Evaluating the Financial Performance of Libyan Banks Using Operational Efficiency Indicators (A Comparative Study for the Period 2018–2024)

Abstract

This study aims to evaluate the operational efficiency of a sample of Libyan banks (Al-Saray, Libyan Islamic Bank, Nuran, and Yaqeen) during the period 2018-2024. The study adopted a descriptive-analytical approach using five financial indicators: return on equity (ROE), return on assets (ROA), equity multiplier (EM), asset utilization (AU), and profit margin (PM). The results revealed a clear disparity in efficiency levels; mature banks outperformed in achieving profitability and controlling costs, while the performance of newly established banks was affected by founding costs. The results also revealed a general decline in return on assets due to the high proportion of underutilized liquid assets and heavy reliance on depositor funds for financing. The study recommends directing liquid assets toward investments that increase returns, and controlling financial leverage to achieve a balance between profitability and risk.