The impact of listing on banks’ performance: case study from Saudi Arabia

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Using quarterly data from 2010 to 2019, this paper investigates the impact of listing status on the performance of the National Commercial Bank (NCB), the largest commercial bank in Saudi Arabia, by applying a combination of financial ratios analysis and efficient frontier analysis with a mix of parametric and non-parametric tests. The overall results show that although the NCB performance is superior compared to their counterparts, this superiority has deteriorated after the bank was listed in 2014. This result was captured by the deterioration in the efficiency measures of NCB, indicating the significance of using the efficient frontier analysis as an additional monitoring tool by the Saudi regulators. The financial ratios analysis also shows that even though the NCB profitability has increased, there is an increase in the bank’s overall risk after being listed. Therefore, Saudi regulators should closely monitor their listed banks as these banks are directed toward high-risk assets.

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    • Figure 1. Saudi banks’ market share (%) concerning deposits, loans, and assets in 2018
    • Figure 2. NCB’s assets, loans, and deposits from 2000 to 2018, USD billion
    • Figure 3. Efficiency measures of the NCB over the sample period
    • Table 1. Variables definition
    • Table 2. Descriptive statistics of all variables of the NCB
    • Table 3. The results of the pre- and post-listing empirical design of the NCB
    • Conceptualization
      Mohammad Alsharif
    • Data curation
      Mohammad Alsharif
    • Formal Analysis
      Mohammad Alsharif
    • Investigation
      Mohammad Alsharif
    • Resources
      Mohammad Alsharif
    • Writing – original draft
      Mohammad Alsharif
    • Writing – review & editing
      Mohammad Alsharif