INVESTIGATING THE IMPACT OF FOREIGN BANKS ON DOMESTIC BANKING INDUSTRY IN SAUDI ARABIA

Abstract

The entry of foreign banks into Saudi Arabia is likely to have a significant impact on the domestic banking market. In addition, foreign banks operate on local markets and have felt the impact on the economy as a whole. Financial performance may include aspects such as the level of profitability and net interest margins. Thus, this paper has examined the impact of foreign bank on domestic banking industry in Saudi Arabia. This work was carried out based on quantitative research method.  Comparison was done three major domestic banks and three major foreign banks in Saudi Arabia. The comparison was done based on returns, margins and growth rate from 2014-2018. Thus, based on the comparison result, the outcome showed that domestic banks are stronger and better financially. Finally, the result of this study shows that there are not effects of foreign banks on domestic banking industry because of strong economic in Saudi Arabia.