Abstract
Purpose – the main purpose of the study is to investigate an accurate prediction method for banking distress applied on a set of Egyptian banks.Methodology - the researchers have compared the prediction accuracy of the discriminant analysis and logistic regression model, to choose the most appropriate one. The data has been collected from the “Bank scope” data base and for the period of 2002–2016.Findings – the results of the study revealed that the predictive accuracy of discriminant analysis outperformed that of the logistic regression model.Originality - The study adds value to the literature as it is one of the few studies that is concerned with predicating the banking financial distress especially in Egypt.
Highlights
The central Bank of Egypt completed the first phase of the banking reform program, which started in 2004 and ended in 2008
While skewness is negative for LADF, deposits, type of auditor and concentration
13 variables are used as explanatory variables that have been proven to influence bank risk
Summary
The central Bank of Egypt completed the first phase of the banking reform program, which started in 2004 and ended in 2008. This stage included four logistic pillars: first, conducting. 2018, Vol 8, No 3 some privatization and consolidation processes in the banking sector. Confronting the problem of nonperforming loans in banks. Restructuring public sector banks financially and administratively. Support the supervision sector of the central Bank of Egypt. The political events in Egypt led to major shifts that adversely affected economic activity and financial markets during 2011 and 2012. The Egyptian banking sector ranks fourth among the Arab banking sector, and ranks first among the banking sector of the non- oil Arab countries
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