Evaluating the Performance of Libyan Commercial Banks Using the Dupont Model

Abstract

     This study aimed to evaluate the performance of the Libyan commercial banks under study using the DuPont model through a comparative applied analysis of the financial statements of five Libyan banks: Jumhouria Bank, National Commercial Bank, Trade and Development Bank, Wahda Bank, and United Bank for Trade and Investment for the year 2023. The study adopted the descriptive-analytical approach. The study reached several findings, the most important of which was a clear variation in return on equity (ROE) among the banks under study. United Bank for Trade and Investment ranked first, with an ROE of 35.21%, despite having the lowest financial leverage multiplier, indicating the contribution of asset utilization efficiency and profitability to achieving the return. Trade and Development Bank ranked second, with an ROE of 15.89%, supported by a high profit margin and moderate financial leverage, followed by Wahda Bank, which recorded an ROE of 10.42% with a relatively high financial leverage multiplier. Jumhouria Bank recorded an ROE of 7.14%, accompanied by a lower asset turnover rate. Meanwhile, National Commercial Bank recorded the lowest ROE at -0.03%, despite having a high financial leverage multiplier. The study recommended several measures, most importantly enhancing asset utilization efficiency, improving profit margins, monitoring financial leverage levels, and conducting periodic analyses of the components of the DuPont model.