Financial Risk and Financial Performance of Banks in Egypt

2020-07-27T11:45:24Z (GMT) by Karim Mahmoud Dief El-Faham
This research focuses on the two main dimensions of bank performance; profitability and risk using a sample of the listed banks in Egypt. The lack of this type of research in Egypt is the main motive for this thesis, especially after years of political and economic instability in the middle east; in addition to the major regulatory reforms implemented by the Central Bank of Egypt through its banking reform program in the last few years. Therefore, this research examines the most important intra- and extra-bank profitability determinants, using data collected from the unconsolidated quarterly financial reports of the eleven banks listed consistently on the Egyptian Stock Exchange for the period (2005-2015), in addition to country data collected from Euromonitor International and Trading Economics databases. Moreover, the effects of the 2007/2008 Global Financial Crisis and the Arab Spring are considered. This is done along with estimating a panel vector auto-regression model under a generalized method of moments framework to investigate the Granger causality between two main financial risk types for banks; credit and liquidity risks. Furthermore, testing the effect of regulatory capital on bank profitability after applying Pillar I of Basel II in Egypt since 2013 is conducted through using additional data collected from Thompson Reuters databases based on the consolidated statements of the sample banks from the first quarter 2014 until the second quarter 2016.