Journal of Entrepreneurship Education (Print ISSN: 1098-8394; Online ISSN: 1528-2651)


The Portfolio Behaviour of Saudi Commercial Banks

Author(s): Zahid Muhammad, Ishtiaq Ahmed Bajwa, Waleed Rafi, Ali Murad Syed

This study explains the banking performance in KSA to draw out the implications of related theories and evidence for policymakers. This paper investigates the portfolio behaviour of commercial banks in Saudi Arabia during the period 1996-2018 using quarterly data. The expected utility model used is based on the portfolio choice theory originated and developed by Hicks (1935) and Markowitz (1952). Some nested models are developed to test symmetry and homogeneity restrictions on the interest rate matrix. The results of this research indicates that the changes in interest rates of banks portfolio variables describe the changes in the portfolio items, but Saudi commercial banks are more interested in the availability of funds.