Comparative Effects of Profitability and Risk Management on Financial Stability in A Dual Banking System: Does Yield Matter?
This study aims to examine the impact of risk management and profitability on the stability of conventional and Islamic commercial banks in Indonesia and to assess whether yield can moderate this effect. The research analyzes data from Indonesian Sharia and conventional commercial banks from 2016 to...
Saved in:
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Universitas Airlangga, Departemen Ilmu Ekonomi Fakultas Ekonomi dan Bisnis
2024-12-01
|
| Series: | JIET (Jurnal Ilmu Ekonomi Terapan) |
| Subjects: | |
| Online Access: | https://e-journal.unair.ac.id/JIET/article/view/58254 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1850116793721421824 |
|---|---|
| author | M. Yusril Hafidz Nur Izza Amila Zamzabila Putri |
| author_facet | M. Yusril Hafidz Nur Izza Amila Zamzabila Putri |
| author_sort | M. Yusril Hafidz Nur Izza |
| collection | DOAJ |
| description | This study aims to examine the impact of risk management and profitability on the stability of conventional and Islamic commercial banks in Indonesia and to assess whether yield can moderate this effect. The research analyzes data from Indonesian Sharia and conventional commercial banks from 2016 to 2023 using fixed-effects panel data regression with robust standard errors. The findings reveal that Sharia banks exhibit greater risk resilience than conventional banks, demonstrating a lower probability of instability. Additionally, yield enhances the effect of non-performing financing (NPF) on bank stability in Sharia banks and mitigates the impact of non-performing loans (NPL) in conventional banks. These results offer valuable insights for policymakers and contribute to the literature by highlighting the need for a balanced approach to ensure that bank profitability enhances stability rather than undermines it. It underscores that higher profits are not inherently beneficial, nor are lower profits necessarily detrimental. Banks must strike a balance, maintain public trust, and promote prudent risk management to achieve long-term stability. |
| format | Article |
| id | doaj-art-4eb24095260247e8bdfc3644ca6dee96 |
| institution | OA Journals |
| issn | 2541-1470 2528-1879 |
| language | English |
| publishDate | 2024-12-01 |
| publisher | Universitas Airlangga, Departemen Ilmu Ekonomi Fakultas Ekonomi dan Bisnis |
| record_format | Article |
| series | JIET (Jurnal Ilmu Ekonomi Terapan) |
| spelling | doaj-art-4eb24095260247e8bdfc3644ca6dee962025-08-20T02:36:15ZengUniversitas Airlangga, Departemen Ilmu Ekonomi Fakultas Ekonomi dan BisnisJIET (Jurnal Ilmu Ekonomi Terapan)2541-14702528-18792024-12-019220122010.20473/jiet.v9i2.5825456420Comparative Effects of Profitability and Risk Management on Financial Stability in A Dual Banking System: Does Yield Matter?M. Yusril Hafidz Nur Izza0https://orcid.org/0009-0003-6023-6808Amila Zamzabila Putri1https://orcid.org/0000-0002-5941-9389Master of Islamic Economics Department, UIN Sunan Kalijaga, IndonesiaMaster of Islamic Economics Department, UIN Sunan Kalijaga, IndonesiaThis study aims to examine the impact of risk management and profitability on the stability of conventional and Islamic commercial banks in Indonesia and to assess whether yield can moderate this effect. The research analyzes data from Indonesian Sharia and conventional commercial banks from 2016 to 2023 using fixed-effects panel data regression with robust standard errors. The findings reveal that Sharia banks exhibit greater risk resilience than conventional banks, demonstrating a lower probability of instability. Additionally, yield enhances the effect of non-performing financing (NPF) on bank stability in Sharia banks and mitigates the impact of non-performing loans (NPL) in conventional banks. These results offer valuable insights for policymakers and contribute to the literature by highlighting the need for a balanced approach to ensure that bank profitability enhances stability rather than undermines it. It underscores that higher profits are not inherently beneficial, nor are lower profits necessarily detrimental. Banks must strike a balance, maintain public trust, and promote prudent risk management to achieve long-term stability.https://e-journal.unair.ac.id/JIET/article/view/58254risk managementprofitabilitystabilitydual banking system |
| spellingShingle | M. Yusril Hafidz Nur Izza Amila Zamzabila Putri Comparative Effects of Profitability and Risk Management on Financial Stability in A Dual Banking System: Does Yield Matter? JIET (Jurnal Ilmu Ekonomi Terapan) risk management profitability stability dual banking system |
| title | Comparative Effects of Profitability and Risk Management on Financial Stability in A Dual Banking System: Does Yield Matter? |
| title_full | Comparative Effects of Profitability and Risk Management on Financial Stability in A Dual Banking System: Does Yield Matter? |
| title_fullStr | Comparative Effects of Profitability and Risk Management on Financial Stability in A Dual Banking System: Does Yield Matter? |
| title_full_unstemmed | Comparative Effects of Profitability and Risk Management on Financial Stability in A Dual Banking System: Does Yield Matter? |
| title_short | Comparative Effects of Profitability and Risk Management on Financial Stability in A Dual Banking System: Does Yield Matter? |
| title_sort | comparative effects of profitability and risk management on financial stability in a dual banking system does yield matter |
| topic | risk management profitability stability dual banking system |
| url | https://e-journal.unair.ac.id/JIET/article/view/58254 |
| work_keys_str_mv | AT myusrilhafidznurizza comparativeeffectsofprofitabilityandriskmanagementonfinancialstabilityinadualbankingsystemdoesyieldmatter AT amilazamzabilaputri comparativeeffectsofprofitabilityandriskmanagementonfinancialstabilityinadualbankingsystemdoesyieldmatter |