Financial stability in Indonesian Islamic banking using Z-Score: Before and during Covid-19

Alfiyan, Moh; Wahyudi, Rofiul; Maimunah, Maimunah Binti Ali; Riduwan, Riduwan

doi:10.26740/aluqud.v7n1.p17-32

al-Uqud

2023

DOI: 10.26740/aluqud.v7n1.p17-32

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Financial stability in Indonesian Islamic banking using Z-Score: Before and during Covid-19

Moh Alfiyan

Rofiul Wahyudi²,

Maimunah Binti Ali Maimunah³

et al.

Abstract: This study aims to analyze the level of comparison of the financial stability of Islamic banking in the period before and during the Covid-19 pandemic. This study uses a paired T-test by taking samples of 13 Islamic Commercial Banks that publish financial reports regularly on the website of OJK in quarter I 2019 – quarter IV 2020. The results explain that Z-Score, BOPO, NPF, HHI, GDP and Inflation have no differences in the average level before pandemic compared to during the Covid-19 pandemic. Then FDR, Bank … Show more

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2024

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Cited by 2 publications

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The impact of the COVID-19 pandemic on the financial performance and stability of Islamic banks

Ben Abdallah,

Bahloul

2024

JIABR

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Purpose The purpose of this paper is to investigate the impact of the COVID-19 pandemic on the financial performance and stability of Islamic banks (IBs) in the Middle East, North Africa and Southeast Asia (MENASA) region. Design/methodology/approach The sample consists of 50 IBs across 13 MENASA countries. The data covers 11 quarters, starting in Q1 2019 and ending in Q3 2021, and are collected from banks’ quarterly reports. The authors proxy financial performance by three measures, namely, return on assets (ROA), return on equity (ROE) and cost-to-income (Cost/Income). For financial stability, the authors use two indicators: insolvency risk (log Z-score) and asset risk (ROA/SDROA). The methodology is based on the generalized least squares method estimation. Findings The results showed a significant and negative impact of COVID-19 on two performance measures of IBs (ROA and ROE) suggesting that IBs were significantly affected during the earlier pandemic. As well, the authors found strong evidence of the impact of COVID-19 on the insolvency risk and asset risk of the studied banks. Practical implications The study of COVID-19’s impact on the performance and stability of IBs in MENASA countries permits the banks’ regulators and policymakers to ameliorate the banks’ financial performance and reinforce their supervisory actions. Also, it gives them assistance to guarantee the financial stability of these banks in times of crisis. Originality/value This study provides significant financial information and policy implications for stakeholders involved in the banking sector in MENASA countries. Consequently, IBs must guarantee their profits and stability to ensure their competitiveness versus conventional banks during the period of crisis.

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The impact of the COVID-19 pandemic on the financial performance and stability of Islamic banks

Ben Abdallah,

Bahloul

2024

JIABR

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Fintech Innovation, Financial Performance and Stability: A Systematic Literature Review and Bibliometric Analysis

Goyal,

Bajaj,

Saxena

2024

Abhigyan

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The financial services industry is experiencing a paradigm shift due to the proliferation of fintech advancements. These innovations span sectors such as mobile payments, blockchain technology and robo-advisors and promise to enhance efficiency, accessibility and financial inclusion. This study investigates the impact of fintech innovation on financial performance and stability. It uses a combined approach of systematic literature review (SLR) and bibliometric analysis. This study aims to (a) determine the state of the art of the impact of fintech innovation on financial performance and stability, (b) identify gaps in the research and (c) identify challenges and trends for future research potential. This analysis provides valuable insights for researchers, practitioners and policymakers. It sheds light on the current knowledge base, highlights emerging research areas and emphasizes the need for further investigation into the complex relationship between Fintech innovation, financial performance and stability.

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Financial stability in Indonesian Islamic banking using Z-Score: Before and during Covid-19

Cited by 2 publications

References 35 publications

The impact of the COVID-19 pandemic on the financial performance and stability of Islamic banks

The impact of the COVID-19 pandemic on the financial performance and stability of Islamic banks

Fintech Innovation, Financial Performance and Stability: A Systematic Literature Review and Bibliometric Analysis

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