Abstract
The purpose of this study is to investigate the impact of Interest Rate change on Saudi Bank Performance. The banks impact was tested using three variables; Deposits, Total credit, Total Assets. The study found that change in interest rate on deposits has no negative performance or indicators on any of the bank performance variables. This result indicates that the change in interest rate on deposits did not alter the competitive environment in the banking sector, hence no negative impact was seen. Unusually, the impact has been positive and upward curves. This is due to the diverse nature of the Saudi economy, which is growing in an upward manner from year to year due to the diversity of this economy and the strength of its revenues from the number of sources.
The research study result can be explained by the relatively small change of the interest rate on deposits in the Saudi banking system in term of volume of assets, deposits, and credit facility. In addition to the well-developed financial system and strong banking system. Furthermore the role of the Central Bank of Saudi (SAMA), which seems give more comparative advantage to banks through the legislative and controlling environment.