Open AccessThe effect of banking expansion on profit efficiency of Saudi banks
Author(s) -
Nader Alber
Publication year - 2011
Publication title -
corporate ownership and control
Language(s) - English
Resource type - Journals
eISSN - 1810-0368
pISSN - 1727-9232
DOI - 10.22495/cocv8si1p6
Subject(s) - profitability index , mobile banking , business , profit (economics) , phone , mobile phone , banking industry , sample (material) , industrial organization , commerce , financial system , monetary economics , finance , economics , marketing , microeconomics , telecommunications , engineering , linguistics , philosophy , chemistry , chromatography
This paper aims at analyzing the profit efficiency of the Saudi banks, and testing how it could be affected by banking expansion. This has been conducted using a sample of 6 commercial banks (out of 11), and covering the period from 1998 to 2007. Profit efficiency has been measured, using the ratio of actual profitability to the best one, which a similar bank (in size) can realize. Tests indicated that we could accept hypotheses regarding the effects of "availability of phone banking", "number of ATMs" and "number of branches" on profit efficiency of Saudi banks, also referred to the need to reject the hypotheses regarding the effects of "number of POSs", "availability of PC banking" and "availability of mobile banking".