Saudi Commercial Banks and Covid-19

Abstract

In late March 2020, the International Monetary Fund announced that the world has entered a recession that may be worse than the recession of 2009, due to the spread of the Coronavirus pandemic around the world. Thus, all countries have announced the negative impact of this Pandemic on their economy. This study aims to identify the level of financial performance of banks listed on the Saudi stock market (Tadawul), before and during the Covid 19 pandemic.

The results showed in the first quarter of 2020 that the negative impact of the Coronavirus pandemic began to appear limited to most banks in Saudi Arabia, especially on the index of profitability, which includes net income, earnings per share, return on equity and return on total assets. On the other hand, there was no impact on the capital adequacy index and the efficiency of employing funds. In the second quarter of 2020, the negative impact of the Coronavirus pandemic was on all banks in Saudi Arabia, in particular, the capital adequacy index and profitability index, while there was no impact on the efficiency of the use of funds index. In the third quarter of 2020, recovery from the impact of the Coronavirus pandemic began for most banks, especially the capital adequacy index and the profitability index, due to the programs were issued by the Saudi Central Bank, and those programs have had a positive impact on all sectors in the economy of Saudi Arabia, especially the banking sector, while there was no effect on the efficiency of investing money index.