An Empirical Analysis of Performance of Retail and Wholesale Conventional Banks in Bahrain

The main purpose of this study is to examine the financial performance of retail and wholesale conventional banks in Bahrain. The study covers a period of five years from 2009 to 2013. Ratio analysis was used to analyse the comparative financial efficiency of banks under study and correlation analysis was used to test the significance. Descriptive statistical analysis was used to measure the dispersion and the stability-variability of the ratios. The results indicate that wholesale banks are more efficient than retail banks in terms of overall cost to income and asset utilisation whereas retail banks are more efficient than wholesale banks in staff cost to income and operations. Correlation analysis showed a high positive correlation of staff cost to income ratio with operational efficiency ratio and cost to income ratio in retail banks and positive correlation of staff cost to income ratio with operational efficiency ratio and cost to income ratio in wholesale banks