Financial Ratio Indicators in Saudi Banks: The Impact of Disclosure and Transparency Criteria

Abstract: By measuring the extent of the impact of the bank's financial indicators, which are represented by liquidity, profitability, and return on assets in Saudi banks, the study aimed to determine the effect of applying the disclosure and transparency standards criteria adopted by the Saudi Arabian Monetary Authority on improving performance indicators in the Saudi banking sector. Disclosure and transparency are one of the main principles in the list of governance that the Saudi Arabian Monetary Authority approved. The study's objective was met by using an analytical technique, which involved analysing Saudi banks' financial statements over eight years to evaluate four hypotheses on the presence of statistically significant disparities in performance. Bank performance metrics before and after implementing the disclosure and transparency rules imposed on Saudi institutions. The research findings revealed the presence of an inverse association between bank liquidity and the proportion of Saudi bank profits. The more liquidity, the lower the profitability level of banks, which indicates that the high liquidity in Saudi banks has led to low profitability in this period, and the study recommended that banks should find a balance between liquidity and profitability. Keywords: Disclosure and Transparency, Saudi Arabian Banks, Financial Ratio Indicators, Return on Assets, Cash Flow Ratio