This paper aims to assess the behavior of Islamic banks regarding their financial sustainability. It employed an econometric approach to estimate the financial sustainability of Islamic banks in ten predominantly Muslim countries. We derived financial sustainability indicators using the Bellman equation to demonstrate when Islamic banks achieved sustainability performance. We estimated the model with a refined Heckman selection through simulated maximum likelihood. Most of the results confirmed the findings of previous studies that financial sustainability of Islamic banks is influenced by ROA and efficiency. According to our estimation, we predicted that the majority of Islamic banks in ten Muslim countries failed to deliver Islamic moral economy. Islamic bank financing activities are still dominated by commercial financing rather than maqasid concepts. This paper explicitly shows a strong message for Islamic banks in Muslim countries to implement maqasid to improve the mandates of Islamic moral economy. We have presented a quantitative approach to produce robust estimations and predict bank sustainability according to the latest econometric methods. Contribution/Originality: This study contributes to the existing literature on Islamic bank sustainability. This study used new estimation methodology that introduces Islamic bank behavior with a refined Heckman selection methodology that has not previously been used. This study introduces a new formula of Islamic bank sustainability with dynamic optimization through the Bellman equation.

There is an ongoing debate on how Islamic banks contribute to bank sustainability. Theoretically, Islamic ethics promote sustainability, also called Maqasid al-shari'ah. This paper investigates the effect of geographical factors on Islamic bank sustainability. A theoretical and empirical model was developed to assess this relationship. It was hypothesized that geographical factors affect Islamic bank sustainability. Countries in specific geographical locations that are dominated by Islamic rules, such as the Middle East, have different magnitudes compared to east Asian countries that have fewer Islamic rules. A geographical risk model was developed according to the Maqasid al-Shari'ah concept and was employed based on a microeconomic banking model that portrays a variety of risks for 159 Islamic banks in ten countries. We constructed variables from macroeconomic databases, such as the World Development Indicators, and microeconomic databases, such as financial indicators and environmental, social, and governance (ESG) data from Thomson Reuters from 2012 to 2019. The analysis was conducted using panel instrumental variable regression to test the hypothesis; however, geographical risk variables produced biased results affecting Maqasid financing. The method was refined with IV quantile regression. It was found that geographical factors are strongly related to the improvement of Maqasid financing in Middle East regions, whereas in eastern regions this is vice versa. The results indicate that geopolitical factors stimulate Maqasid financing for Sustainable Development Goals.

Islamic Bank Listed in Financial Market: Risk, Governance, Earning, and Capital. Islamic Bank is a bank that applies Islamic principles in running the business. Until 2015, there were 12 Islamic Bank in Indonesia; one of them already listed on the stock market. The purpose of this study was to analyze differences in the bank's soundness was assessed using a bank's risk profile, good corporate governance, income, and capital (RGEC) between listed Islamic Banks and the unlisted ones. Using the data period 2011-2015 used the independent t-test to test for differences. Statistical tests showed that there is no significant difference in credit risk as measured by NPF and Earning as measured by BOPO that represent cost efficiency between the two groups of companies. Listed Islamic banks have lower credit risk and greater efficiency than the unlisted ones. Abstrak. Bank Syariah yang Terdaftar Pada Pasar Keuangan: Risiko, Tata Kelola, Pendapatan, dan Modal. Bank syariah adalah bank yang mengaplikasikan prinsip-prinsip syariah dalam menjalankan kegiatan bisnisnya.Hingga tahun 2015 terdapat 12 Bank Islamik di Indonesia, dimana salah satunya sudah terdaftar di pasar modal. Tujuan studi ini adalah menganalisis perbedaan kesehatan bank yang dinilai menggunakan profil risiko, tata kelola perusahaan yang baik, pendapatan, dan modal untuk Bank syariah yang terdaftar dengan yang tidak terdaftar di pasar modal Indonesia. Uji independen t digunakan untuk menguji perbedaan tersebut dengan menggunakan data periode 2011-2015. Hasil pengujian statistik menunjukkan ada perbedaan yang signifikan pada risiko kredit yang diukur dengan NPF dan Earning, diukur dengan BOPO yang mencerminkan efisiensi biaya, antara kedua kelompok perusahaan tersebut. Bank syariah yang terdaftar di pasar modal memiliki risiko kredit yang lebih kecil dan efisiensi yang lebih besar dibandingkan yang tidak terdaftar di Bursa Efek.

Objective - In recent years, the market share of Indonesian Islamic banks has declined. The purpose of this study is to assess the financial distress being experienced by Islamic banks in Indonesia by using the Bankometer's score. This study will also uncover any differences between listed and non-listed Islamic banks using the Bankometer model. The Bankometer model is a model developed by the IMF (2000) to measure the financial soundness of banks. Methodology/Technique - The study uses data obtained between 2011 and 2015 using a purposive sampling model. The sample consists of 11 Islamic Banks in Indonesia. Findings - The results show that all Islamic banks are categorized as very healthy throughout the period of the research. Using and independent t-test, it is shown that there are differences between non-performing loans from listed and non-listed Islamic banks. However, there are no significant differences between Variable Capital Asset, Equity Asset, Cost to Income and Loan to Asset. Novelty - The study uses Bankometer's score to evaluate financial distress. Type of Paper - Empirical Keywords: Bankometer Model; Financial Distress; Islamic Banks. JEL Classification: E44, F14, G01.

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