Predicting Financial Distress in Lebanese Non-Listed Banks
Keywords:
Lebanon, Z-Score model, Non-listed Banks, Financial Distress, Bankruptcy.Abstract
The Study uses the Altman Z-score model for non-manufacturing companies and for emerging markets to examine the financial distress of private non-listed banks in the Lebanese banking sector using a sample of four banks including Bankmed, BBAC Bank, Credit Libanais Bank, and IBL Bank; covering the period from 2013 till 2017. The study also uses trend analysis in order to aid in predicting future performance for the chosen sample. The results show that all banks using the Z-score for non-manufacturing firms have a z below the cutoff of 1.1, which means bankruptcy is predicted in the near future which contradicts the current situation of such banks. While as for Z value for emerging markets is above the cutoff of 2.6 which means that such banks are acting within the safe financial zone. The trend analysis shows that Z is stable and improving for the majority of the banks in the sample.
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