Navigating the Egyptian Commercial Banks’ Profitability: The Interplay of Geopolitical (GP) and Uncertainty (U) Risks | ||||
| التجارة والتمويل | ||||
| Volume 45, Issue 2, June 2025, Page 210-236 PDF (1.36 MB) | ||||
| DOI: 10.21608/caf.2025.434546 | ||||
 View on SCiNiTO | ||||
| Author | ||||
| Ahmed Hassan Elgayar | ||||
| Lecturer, Business Administration Department, Faculty of Commerce, Tanta University, Tanta, Egypt | ||||
| Abstract | ||||
| This study investigates the intricate relationship between geopolitical (GP) risks, uncertainty (U) risks, and the profitability of Egyptian commercial banks, focusing on data spanning from 2010 to 2022. Using panel data regression analysis, the research integrates the Caldara-Iacoviello Geopolitical Risk (GPR) Index and the World Uncertainty Index (WUI) to quantify external risks and examine their combined effects on bank profitability. Return on Average Assets (ROAA) is employed as the dependent variable, reflecting managerial efficiency and overall financial performance. The analysis incorporates key control variables, including capitalization risk, liquidity risk, and credit risk, to capture bank-specific dynamics. The sample is based on data from 11 Egyptian commercial banks, selected based on size and financial performance criteria. The findings reveal that both GP and U risks individually exert significant negative impacts on profitability, disrupting operational efficiency, reducing investor confidence, and increasing exposure to financial shocks. However, the interaction between these risks exhibits a positive moderating effect, indicating that Egyptian banks adaptively respond to compounded challenges through resilience and strategic innovations. Additionally, capitalization risk positively influences profitability, underscoring the importance of maintaining robust capital buffers. Conversely, high credit risk negatively affects financial performance, while effective liquidity management contributes to profitability. This research fills a critical gap in the literature on banking resilience in emerging markets, particularly in Egypt, where political and economic volatility is pervasive. The study provides actionable insights for policymakers and banking professionals, recommending enhanced risk management frameworks, strategic adaptability, and targeted regulatory interventions to mitigate the adverse effects of external shocks and sustain financial stability. | ||||
| Keywords | ||||
| Geopolitical Risk; Uncertainty Risk; Bank Profitability; Egyptian Commercial Banks; Panel Data Regression; Risk Management; Emerging Markets; Financial Resilience | ||||
|
Statistics Article View: 33 PDF Download: 22 |
||||
