Macroeconomic Condition and Banking Industry Performance in Indonesia

Ekananda, Mahjus

doi:10.21098/bemp.v20i1.725

Cited by 11 publications

(10 citation statements)

References 19 publications

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“…Sources of financing from debt cause banks to provide greater capital adequacy. This result is consistent with Ekananda's (2017) research, which states that banks increase capital to respond to increased financial financing.…”

Section: Resultssupporting

confidence: 92%

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Panel VAR for Analyzing Business Cycle Influence on the Distribution of Sharia Banking Financing in Indonesian Sharia Banking

Ekananda

Syahrivar

2023

mem

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This paper is structured to explain the effect of the business cycle on the distribution of Islamic banking financing in Indonesia. Furthermore, this research examined the differences between account receivables financing and profit-sharing financing, as well as different forms of Islamic banking. In this case, Islamic banking financing, account receivables financing, and profit-sharing financing will have the same responses or changes in the face of the business cycle in Indonesia. This research is focused and limited to the response of Islamic banking financing to the business cycle in Indonesia. Second, this research used quarterly data from 2007 to 2020 obtained from financial data of each sharia commercial bank and sharia business unit published through the Financial Services Authority (OJK) and Bank of Indonesia; meanwhile, the macro-level data was taken from data from the Central Agency publication Indonesian Statistics. Third, the estimation method used is the Panel VAR to accommodate the heterogeneity between firms. The results show that capital and liquidity respond positively to changes in banking financing, account receivables financing, and profit-sharing financing. The results also show that performing loans and profitability will decrease if there is a shock to the three types of financing.

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Section: Resultssupporting

confidence: 92%

“…However, in the long term, the NPF response is negative for GFIN funding sources and profit-sharing (GBH). This result follows research by Kasri (2010) and Ekananda (2017), which state that the financial quality of shariah banking will improve the financial structure due to the existence of healthy and quality funding sources.…”

Section: Resultssupporting

confidence: 81%

Panel VAR for Analyzing Business Cycle Influence on the Distribution of Sharia Banking Financing in Indonesian Sharia Banking

Ekananda

Syahrivar

2023

mem

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“…The liquidity ratio would be categorized as bad when Non-Performing Finance (NPF) is high (Arif & Nauman Anees, 2012). Non-Performing Loans (NPL) of banks with small asset will increase rapidly when interest rates fluctuate, while increase in interest rates of banks with large assets will lead to a more significant reduction of the CAR (Ekananda, 2017).…”

Section: Introductionmentioning

confidence: 99%

Macro and micro determinants of the non-performing finance: The case of Indonesian Islamic bank

Rahmah

Armina

2020

JEKI

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Doubtful finance showing a bad performance of a company, but this can be avoided if the banks use the right strategy to prevent such financial condition. This study aims to indicate the determinants of doubtful finance in the Indonesian Islamic banking sector from 2011 to 2018. We employed panel data regression to meet our objectives. Our results depict that banks' profitability and finance to deposit ratio have a significant positive impact on Non-Performing Finance. On the other hand, Gross Domestic Product has a significant positive effect on doubtful finance. This study provides an alluded picture of Indonesian Islamic banking sectors, particularly Non-Performing Finance (NPF). Moreover, it enables policymakers to deliberate on the macroeconomic determinants of NPFs (i.e. GDP). Furthermore, this study will enhance the Islamic bank's performance literature.

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“…However, a study by Setyawati et al, (2017) shows that during the global crisis of Islamic banks' performance, NPF was better after the global crisis. While vulnerable banking research needs to pay attention to exchange rate risks and fluctuating inflation, especially banks that have small size asset size (Ekananda, 2017). Previous research (Iriani and Yuliadi, 2015) has said that the behavior of banking and economic behavior has been affecting NPF in sharia banking in Indonesia.…”

Section: Introductionmentioning

confidence: 99%

What is the Determinant of Non-Performing Financing in Branch Sharia Regional Bank in Indonesia

Damanhur

Albra

Syamni

et al. 2018

Proceedings of MICoMS 2017

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Purpose-The aim of this study is to analyze the effects of macro-and micro-economic variables on the ratio of troubled financing (Non-Performing Financing, NPF). Design/Methodology/Approach-The method used in this research is the data panel fixed effect with 13 banks and 4 periods of data report (semi-annual report 2014-2015). Findings-The regression result achieved that variable inflation significantly influences the ratio of NPF. Variable Gross Domestic Product and assets total significantly influence the ratio of NPF too. While the SBI sharia's variable and Financing to Deposit Ratio did not significantly affect NPF in Syariah's Unit of Aceh Bank Pembangunan Daerah (BPD) in Indonesia. Research Limitations/Implications-This study uses panel data which are a combination of time series data and cross-section. Practical Implications-The policymakers can design a macro-policy carefully and better fiscal policies.

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Macroeconomic Condition and Banking Industry Performance in Indonesia

Cited by 11 publications

References 19 publications

Panel VAR for Analyzing Business Cycle Influence on the Distribution of Sharia Banking Financing in Indonesian Sharia Banking

Panel VAR for Analyzing Business Cycle Influence on the Distribution of Sharia Banking Financing in Indonesian Sharia Banking

Macro and micro determinants of the non-performing finance: The case of Indonesian Islamic bank

What is the Determinant of Non-Performing Financing in Branch Sharia Regional Bank in Indonesia

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