Financial Performance of UAE Banking Sector: Domestic vs. Foreign Banks

UAE (United Arab Emirate) is considered as a hub of profit in banking industry nowadays. A number of banks include foreign, public and domestic banks are enjoying fruitful business in the UAE because of its rapidly growth trading, oil and business industries. There is no doubt that UAE known as the hub of increasing banking sector, therefore, we aim to evaluate the performance of domestic and foreign banks of UAE specifically. The major aim is to find out which sector is more effective and earning more based on bank specific factors that include: return on assets, return on equity, liquidity ratio, management efficiency, capital adequacy and asset management. Six foreign and domestic banks of the UAE have been taken into account for the period of 2008 to 2014. Trend and correlation analysis have been performed to get more authentic results. Previous studies have been used to support end results of our study. The findings proved that foreign banks are performing a way better than domestic banks in the UAE.