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A modified generalised directional distance function data envelopment analysis model is introduced into the smoothed bootstrap context. The new model handles asymmetrically desirable and undesirable outputs and deals with positive and negative values, while the bias-corrected estimators are independent of the length of the direction vector. The reason for the development of this new efficiency assessment model is the estimation of the degree of operating efficiency gains from possible mergers and acquisitions (M&A) between banks. Our estimations are regarded as more realistic compared to those found in the extant literature, as they consider not only desirable but also undesirable variables and negative values that are crucial to the evaluation of firm performance. The new model is not only applicable to the banking sector but also in any industry. We use two data samples, one consisting of 86 conventional and a second consisting of 21 Islamic banks. Among the findings of this study is the convergence of the conventional and Islamic banks' efficiencies over the period 2014–2016. Moreover, consolidations only between efficient and inefficient conventional banks lead to higher operating efficiency, while M&A between efficient only or inefficient only conventional banks and between Islamic banks are likely to be undesirable. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to assess performance factors in the UAE commercial banks by using multiple approaches taking into consideration the effect of the bank size. Design/methodology/approach – The UAE banking sector is divided, for the purpose of this research, into two groups: large and small based on the total assets. The last balance sheet has been used for size classification; those with total assets of AED10 billion and above are considered large banks, whereas banks with total assets less than AED10 billion are considered small banks. This classification criteria led to a sample of 15 large and 23 small banks. The number of banks included in this study is only 38 banks due to the scarcity of available information. Data for the study cover the period from 1996 to 2005. Findings – The main findings of this study indicate that generally large banks perform better than small banks. The results partially confirmed the hypothesis that there is a positive and significant statistical difference between the small and large banks regarding bank performance indicators. Finally, the results reveal that the ratio of total equity to total assets, which reflect the importance of capital adequacy to commercial banks, is the most important performance indicator taking into account the bank size. In other words, it was the determinative factor in the classification of banks into large or small ones. Practical implications – The paper's findings support the proposition that in an environment where banks are highly fragmented, mostly small, and are not performing well, there is a need to consolidate the operations of some of these banks. That is, small banks, and even large ones, might be better off, if they are merged into one major institution in order to reduce waste and improve efficiency. Originality/value – The paper will be of value to UAE banks and those interested in investment in the UAE financial markets. [ABSTRACT FROM AUTHOR]

This paper compares the determinants of bank performance between national and foreign commercial banks in UAE. It also compares the relative importance of each determinant on bank performance in the two sets of banks. This paper adopts two regression models. The results indicate that the most significant determinants of the national banks' performance were banks' size and banks' portfolio composition. Variables which had been thought to play a major role, including labor productivity, capitalization, liquidity and economic conditions, were found to be less significant. It is also found that the most significant determinants of the foreign banks' performance were capital productivity, capitalization, leverage, and economic conditions. Variables had less significant impact on foreign banks' performance were banks' portfolio composition, liquidity, concentration and costs. [ABSTRACT FROM PUBLISHER]