Saudi Banks Efficiency

Abstract

This dissertation will investigate the efficiency of Saudi banks over the period 2015 to 2020. This dissertation will present two methods to measure the Saudi Banks’ efficiency. The dissertation will be a functionalist paradigm and will adopt the positivist approach. Data envelopment analysis will be used to measure the banks’ efficiency using the Charnes, Cooper and Rhodes and Banker, Charnes and Cooper methods. The second method will be the ordinary least square method to find the relationships between the banks’ efficiency and size. The required data for this dissertation will be derived from four sources: the Saudi Stock Exchange, the Saudi Central Bank, financial statements, and Data Stream. It appears from the dissertation’s analysis that the Saudi banks have a high level of efficiency. The banks maintained a mean efficiency level ranging between 90.5% and 99% over the period 2015 to 2020. In addition, it appears that the COVID-19 pandemic1 did not affect the efficiency of the Saudi banks.