Dissertations for Finance

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Browsing Dissertations for Finance by Subject "banking sector"

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    An application of Data Envelopment Analysis to study the Technical Efficiency of UAE banks in the pre and post crisis period
    (The British University in Dubai (BUiD), 2012-04) Siddiqui, Huma Anjum
    The rapid growth and development of the UAE banking sector over the past decade has seen increased competitiveness, technological advancements, booming economic conditions as well as a global financial meltdown resulting in tighter regulatory norms and increased emphasis on operational efficiency. To this end, the present paper carries out a two stage analysis on 11 local commercial UAE banks, over the period of ‘2003-‘2010. In the first stage, the technical efficiency scores of the sample banks are computed with the help of the output oriented, variable returns to scale, Data Envelopment Analysis technique. The scores so arrived at in the first stage, were used in the second stage of the analysis, where the Tobit censored regression test was used to regress the dependent variables (the efficiency scores) against 4 selected variables, so as to understand whether these variables influence efficiency scores and if so, to what extent. The findings indicated that the UAE banking sector was affected by the financial crisis based on the pre crisis (i.e. ‘2003-‘2008) technical efficiency scores which reflected an ascending trend. Thereafter, a decline of 33.33% in the number of technically efficient banks was observed and it was inferred that DEA as a technique was able to reflect this trend. The results of the second stage analysis showed that the size of a bank, the profitability (in terms of net income) and the market share of each bank positively influenced the technical efficiency scores, where an increase in these independent variables led to improved efficiency scores. On the other hand, total equity (the proxy for bank capitalization) was found to be negatively related to efficiency scores, which meant banks with lower capitalization ratios had better efficiency levels and vice versa.
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    Impact of the Global Financial Crisis on GCC- UAE's Banking Sector
    (The British University in Dubai (BUiD), 2012-02) Jaber, Hoda
    The rationale behind this paper is to inspect the impact of the global financial crisis on GCC countries, UAE in particular & its banking sector. To assess the extent of that effect, this paper provides some comparison before & after the crises. Additionally, it examines the challenges & recommendations. Whilst for various GCC the effects of the crisis have been considered to be mild compared to the rest of the world, its impact had been ruthless in some countries, including UAE. A lot of GCC countries have made an gigantic effort in strengthening their policy frameworks and sturdiness, thought-provoking a healthy economic growth, improving the sovereign wealth fund, foreign reserve, financial systems, and the account balance. But a lot are still considered being highly susceptible to a deep global downturn that is so very well linked to oil prices. This paper provides policy advice on how best to address the impact of the crisis on GCC countries, UAE banking sector specifically, and describes suitable measures & policies that should be adopted. It is crucial to set up managed financing facilities to help out sms's, the real-estate sector, the bank operations and industrial sectors, while making efforts to maintain and catalyze additional
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    Macroeconomic Conditions and Soundness of UAE Banking Sector
    (The British University in Dubai (BUiD), 2012-04) Ali, Dhuha Musleh Fadhel
    Using a panel data for 19 UAE national banks covering the period 2005-2010, this research analyzes the impact of selected macroeconomic and bank-specific variables on financial soundness indicators (FSIs) related to banks. Capital adequacy, Assets quality and profitability are key indicators for banks’ soundness and they are believed to have a robust correlation with business cycle and other macroeconomic indicators. The study finds that banks’ FSIs are strongly related to the business cycle and inflation rate. Banks tend to increase their capital ratios in downturns while reducing them in upturns causing a pro-cyclical effect on the business cycle. Also, inflation rate has a strong negative relationship with capital ratios due to its impact on banks’ costs and profitability. Probability of default tends to increase during adverse macroeconomic conditions and thus increases non-performing loans in the banking sector. Moreover, some bank-specific characteristics showed significant relationship with soundness indicators of banks. Cost of adjusting capital and risk appetite of banks have significant impact on the CAR ratios. Also, higher spread between lending rate and deposit rate increases the debt servicing burden on borrowers and thus increases the probability of default, while banks with lower leverage ratios can be more profitable due to their low cost of funding.