Panel data analysis assesses credit risk impact on profitability and financial stability in emerging markets, indicating significant challenges for banks.
Key Points
Credit risk shows a marginally significant negative effect on financial stability, highlighting vulnerabilities.
Capital adequacy significantly enhances profitability, whereas credit risk does not impact Return on Assets.
Profitability fails to predict financial stability, challenging traditional banking models in emerging markets.
The analysis uses panel regression models for 10 Egyptian banks from 2013 to 2023, revealing the heterogeneous behavior of banks.