This study aims to examine the relationship between credit risk and the performance of commercial banks in the ASEAN (Association of Southeast Asian Nations) region. 113 commercial banks across Malaysia, Singapore, Thailand, Philippines, and Vietnam are covered for analysis purposes. The study quantifies the credit risk using three commonly seen metrics i.e. capital adequacy ratio, loan to deposit ratio, and non-performing loan. Capital adequacy ratio and loan to deposit ratio could present the riskiness of the funding strategy of banks, while nonperforming loan represents the overall customer payments past due as the potential result of risk-taking behaviour. Panel data analysis covering the years 2016-2020 for the above-mentioned bank sample is employed in examining the relationships. The result indicates that all the above metrics have a significant relationship with commercial bank performance, proxied by return on equity and return on assets, largely consistent with the underlying expectations. While the risktaking behaviour may enhance the return measure of profitability, it would at the same time expose a bank to the downside risk as reflected by a higher level of non-performing loans. The study could provide empirical evidence to the managers and regulators in the region for a better understanding of banks' risks in formulating better policies to foster prudent management and decision making.

This paper attempts to analyse the determinants of capital structure decisions among Malaysian firms by considering both the firm-specific (micro-economic) and the macro-economic factors. Using a sample covering 612 listed firms across major business sectors in the Bursa Malaysia during a span of ten recent years (2009)(2010)(2011)(2012)(2013)(2014)(2015)(2016)(2017)(2018), the analysis proposes that both the micro-and macro-economic determinants are relevant for decision makers in understanding the financial leverage of firms. Panel data regressions suggest a significant positive relationship of non-debt tax shield, firm size, tangibility, interest rate and stock market development with debt ratio of firms. Meanwhile, a significant negative relationship is found for profitability, liquidity and gross domestic product. While the macro-economic variables are proposed to be fundamentally important in this study, they do not affect the roles of commonly proposed firm-specific factors implied by the existing capital structure theories. The results are also robust across the estimations with pooled ordinary least squares, fixed effects and random effects models. This paper particularly focuses on providing empirical evidence from the Malaysian market, extendable to cover the other countries for future investigations.

This study attempts to examine the role of working capital management components on four commons which are distinctive dimensions of business investment performance in Malaysia. The analysis covers 431 listed companies for the period 2000-2017 post the Asian financial crisis. The four performance indicators are return on assets (to proxy book return on overall business assets), return on equity (to proxy book return on shareholders' fund), Tobin's Q (to proxy firm valuation) and stock performance (to proxy real shareholder wealth). Our results indicate that working capital components of receivables collection period, inventory conversion period, payables deferral period, overall cash conversion cycle, current ratio, quick ratio, and cash ratio have generally exhibited important relationships with investment performance before and after the 2007-2008 subprime crisis. We would like to highlight the very robust negative effect of receivables collection period and cash conversion cycle. In addition, it is worth noting the distinctive roles of cash conversion cycle components and working capital liquidity ratios. While overly high liquidity position is usually viewed as inefficiency and detrimental for profitability, our panel data analysis consistently show that a high liquid position is favourable if the impact of cash conversion cycle is well considered. Hence, it is crucial for managers to prioritize the importance of working capital requirements to enhance the value of investors.

In July 2022, several media outlets reported news of Chinese homebuyers refusing to repay mortgages on unfinished buildings. It is uncertain whether this event would have had an impact on bank returns as, there is not an overwhelming amount of literature available. Therefore, we collected data from 43 A-share listed banks and the CSI 300 Index for 191 trading days. Based on the Theory of the Efficient Market Hypothesis, we used an Event Study Method to explore whether the returns of bank stocks were affected by this event. By calculating the Average Abnormal Returns and Cumulative Abnormal Returns of the samples, we found that although the withdrawal of mortgage repayments by homebuyers had a short-term significant negative impact on the returns of banks’ stocks, it was quickly absorbed by the market. We consider this may be related to the risk announcements issued by some banks. Additionally, we have provided recommendations for homebuyers, banks, and relevant institutions based on our findings.

This paper aims to investigate the bank-specific characteristics and macroeconomic factors affecting the profitability performance of the Southeast Asian banking sector. The sample markets cover the five original members of ASEAN, i.e. Indonesia, Malaysia, Philippines, Singapore, and Thailand, whereas the sample period encompasses the years between 2010 and 2017. While a healthy financial system is important for the economic sustainability and growth, there are still limited studies to understand how banks generally perform in this region. Our findings largely support the existing hypotheses about the importance of certain micro- and macro variables while contributing new empirical evidence to the current literature. The bank size, loan to assets, loan loss provision, non-interest incomes and expenses, and capital adequacy remain relevant in influencing bank profitability in the ASEAN-5 region. Macroeconomic variables of inflation, interest rate, market concentration and GDP per capita play considerable roles in profitability when they are assessed separately from the bank-specific factors. It is worth noting that the bank-level factors remain important and outplay the macroeconomic factors when they are considered at the same time. The result robustness is of a certain level of satisfaction because comparisons have been performed across individual countries and across different regression models of pooled ordinary least squares model, random effect model, and fixed effect model for all the tentative tests. Both the return on assets and return on equity are examined. Combining both micro- and macroeconomic variables in the regressions also indicates an overall improvement in the r-squared under the same models.