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The dynamics behind private banking growth in Egypt

Author

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  • Doaa M. Salman Abdou

    (October University for Modern Sciences and Arts)

  • Yomna Alarabi

    (October University for Modern Sciences and Arts)

Abstract

The research investigates the determinants of private banks profitability in Egypt. The determinants are bank specific (liquidity, capital adequacy, bank size, asset structure, credit risk, and non-performing loans), industry-specific (industry concentration and banking industry development), and macroeconomics (economic growth and inflation). It is an empirical study applying a quantitative method for data analysis and the type of data is secondary data. The sample size of the research is 15 private banks on the Egyptian and the panel data for the research is 2013–2022. The multiple linear regression analysis using the Eviews 12 application as an analytical tool by applying generalized least squares model. The profitability of private banks, which is the dependent factor, is calculated by two measurements, Return on Assets and Return on Equity with ten determinants of profitability as independent variables. Results indicate that capital adequacy, economic growth bank size, and inflation has a positive significant effect on private banks profitability in Egypt. While NPL, liquidity and credit risk have significant negative effect on private banks profitability in Egypt. Based on the results recommendations are provided for bank management to maximize their profitability.

Suggested Citation

  • Doaa M. Salman Abdou & Yomna Alarabi, 2024. "The dynamics behind private banking growth in Egypt," Future Business Journal, Springer, vol. 10(1), pages 1-11, December.
    • Handle: RePEc:spr:futbus:v:10:y:2024:i:1:d:10.1186_s43093-023-00290-5
    DOI: 10.1186/s43093-023-00290-5
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    References listed on IDEAS

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    1. Hongxing Yao & Muhammad Haris & Gulzara Tariq, 2018. "Profitability Determinants of Financial Institutions: Evidence from Banks in Pakistan," IJFS, MDPI, vol. 6(2), pages 1-28, May.
    2. Ameur Imane & Zerouti Messaoud & Bouchetara Mehdi, 2023. "Internal Determinants Of Profitability In Public Algerian Banks," Journal of Financial Studies, Institute of Financial Studies, vol. 14(8), pages 95-116, June.
    3. Yonas Nigussie Isayas, 2022. "Determinants of banks’ profitability: Empirical evidence from banks in Ethiopia," Cogent Economics & Finance, Taylor & Francis Journals, vol. 10(1), pages 2031433-203, December.
    4. repec:fst:rfsisf:v:8:y:2023:i:special-june_2023:p:95-116 is not listed on IDEAS
    5. Tan, Yong, 2016. "The impacts of risk and competition on bank profitability in China," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 40(C), pages 85-110.
    6. Muhammad Haris & Yong Tan & Ali Malik & Qurat Ul Ain, 2020. "A Study on the Impact of Capitalization on the Profitability of Banks in Emerging Markets: A Case of Pakistan," JRFM, MDPI, vol. 13(9), pages 1-21, September.
    7. Faluk Shair & Na Sun & Sun Shaorong & Firdos Atta & Muhammad Hussain, 2019. "Impacts of risk and competition on the profitability of banks: Empirical evidence from Pakistan," PLOS ONE, Public Library of Science, vol. 14(11), pages 1-27, November.
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    Cited by:

    1. Sakila Zabin & Manik Hossain & Ayrin Sultana, 2024. "Impact of Non-Performing Loans on Bank Profitability: A Study of Rupali Bank PLC, Bangladesh," International Journal of Science and Business, IJSAB International, vol. 42(1), pages 159-174.

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