After Basel I accord (1988) and Basel II accord (2004), a comprehensive set of reform measures designed to improve the regulation, supervision and risk management within the banking sector. The Basel Committee on Banking Supervision published the first version of Basel III in late 2009 to recover the shortcomings of Basel I and Basel II which led to 2008 financial crisis.Specifically, in response to the credit crisis, banks are required to maintain proper leverage ratios and meet certain capital requirements (Basel Committee on Banking Supervision, 2011). The Saudi Bankscomplied withthe regulatory framework of Basel III. They continued to show strong capital adequacy and liquidity position by exceeding the requirements of Basel III accord through holding enough capital and liquidity. Furthermore, SAMA applied additional regulatory and macroprudential measures helped increase the resilience of the sector and ensure its stability to face any unexpected financial crisis and mitigate the degree of risk exposure faced by Saudi banks (SAMA, 2015). In the MENA region, Saudi Arabia’s economy is the largest with a GDP equals SAR 2,795bn (USD 745bn) in 2014. Accordingly, Saudi banking sector is large and promised sector compared to regional peers (Al-Jazira Capital, 2015).Total assets of the banking sector are equivalent to 75.6% of Saudi annual GDP and 133.2% of the non-oil GDP in 2014 (SAMA, 2015). The compounded growth rate of Saudi Banks’ assets equals 9.3% with an amount of SAR 2.1 trillion from 2010 to 2014. The number of banks operating in Saudi Arabia totalled 24 at the end of 2014 including 12 branches of foreign banks and 12 National Saudi banks. All banks have 1,912 branches and about 15,516 Automated Teller Machines (ATMs). Saudi Banks continued to achieve high asset growth rates on account on-going strong economic activities in recent years (SAMA, 2015; Al-Jazira Capital, 2015).