PERFORMANCE AND PROFITABILITY OF LOCAL BANKS: THE CASE OF THE EMERGING MARKET

Sami Al Kharusi*, Y. Sree Rama Murthy, Alya Al Foori

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

This paper investigates the performance and profitability of local banks of Oman for 2017–2020. Financial ratios are employed to measure the financial performance of the local banks listed in the Muscat Securities Market (Sufian, 2009). The study uses cluster analysis procedures for statistical investigation. The cluster results show that cost, profitability, and balance sheet structure (asset-liability structure) are important factors. Big banks behave differently compared to small banks, even though the size was not included as a variable in the cluster analysis. The cluster results did not indicate that COVID-19 has significantly dented the performance of banks in Oman. The financial stability and the soundness of the banking sectors are essential for both investors and depositors, and the main policy implication of this research study is that local banks in Oman are resilient, and a positive outlook is expected, given their ability to survive and manage their business during the global coronavirus outbreak.

Original languageEnglish
Pages (from-to)55-63
Number of pages9
JournalCorporate and Business Strategy Review
Volume3
Issue number1
DOIs
Publication statusPublished - 2022

Keywords

  • Banks
  • Cluster Analysis
  • Global Outbreak
  • Oman
  • Ratio Analysis

ASJC Scopus subject areas

  • Strategy and Management
  • Earth and Planetary Sciences (miscellaneous)
  • Management Science and Operations Research
  • Decision Sciences (miscellaneous)

Cite this