ASSETS LIABILITY MANAGEMENT AT SAUDI COMMERCIAL BANKS

Abstract

Commercial banks market at Saudi Arabia is developing at a steady pace. Risk analysis is important in ensuring the banks are ready for any eventuality in the market. A macro level structure for risk management is given by Asset Liability Management (ALM). Thus, this work has looked into the issues to ensure that commercial banks in Saudi Arabia offer the best services. The ALM practices and liquidity risk of commercial bank in Saudi Arabia were analyzed. Eight banks listed on the Saudi Arabia Stock Exchange for the period of five years from 2013 to 2017 were used as samples. This work was done based on quantitative method. The variables that were analyzed are return on asset (ROA), total assets, total liability, inflation and interest rate. Based on observation of eight banks listed on the Saudi Arabia Stock Exchange in the period of 2014 to 2017, results showed that banks profitability was negatively affected by liabilities.