Are Saudi Banks Efficient? Evidence using Data Envelopment Analysis (DEA

Abstract

Saudi Arabia has a bank-centric and diverse financial system compared with other countries in the region. This paper uses basic DEA models i.e. CCR and BCR to evaluate the relative efficiency of Saudi Banks using annual data from 2003 through 2008. The results show that, on a relative scale, Saudi banks were efficient in the management of their financial resources. In addition, the results would provide crucial information about Saudi banks' financial conditions and management performance for the benefit of bank regulators, managers and bank stock investors.