The impact of COVID-19 on bank stability: Do bank size and ownership matter?

Maria, Siti; Yudaruddin, Rizky; Yudaruddin, Yanzil Azizil

doi:10.21511/bbs.17(2).2022.11

Cited by 31 publications

(20 citation statements)

References 63 publications

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“…After observing the reliance of the joint impact of COVID-19 and market concentration on the degree of bank capitalization, robustness checks were conducted to ensure accurate and steady results. In accordance with Saif-Alyousfi et al [54], the dependent variable was originally substituted with regularly deployed alternative bank stability measures. These included Loan Loss Provision (LLP), Standard Deviation of Return on Equity (STDVROE), and Standard Deviation of Return on Assets (STDVROA), as presented in Table 5, where higher values indicate a higher risk.…”

Section: -Empirical Results and Robustness Checksmentioning

confidence: 99%

“…According to Saif-Alyousfi et al [53], Soedarmono et al [54], Yudaruddin [55] and Maria et al [56] two dependent variables reflect bank stability (ZSCORE), namely the construction for bank 𝑖 at month 𝑡, which are based on the following formula:…”

Section: -Data Variables and Methodologymentioning

confidence: 99%

“…Berger & DeYoung [59], Fiordelisi et al [60], Altunbas et al [61] reported that increased inefficient banks reduces bank stability. The fourth was EQTA (Equity to Total Asset), which was added as a control variable to adjust for the degree of bank capitalization, which has negative and positive impact on bank stability [54,62]. The fifth was LTA (Loans to Total Assets).…”

Section: -Data Variables and Methodologymentioning

confidence: 99%

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Bank Concentration and Bank Stability during the COVID-19 Pandemic

Riadi

Hadjaat²,

Yudaruddin³

2022

Emerg Sci J

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Objectives: The banking sector has been impacted more negatively by the COVID-19 pandemic. At the same time, bank concentration and capitalization stabilize banking systems during times of crisis. This study evaluated the monthly financial reports of all commercial banks in Indonesia to investigate the joint impact of the COVID-19 pandemic and bank concentration on bank stability. Moreover, this study was conducted to determine whether adequate capitalization could enhance the positive effect of the interaction between COVID-19 and bank concentration during the pandemic. Methods/Analysis: Using 108 commercial banks between March 2020 and May 2021, data were analyzed using the fixed-effects estimator with heteroskedasticity and within-panel serial correlations for robust standard errors. Several robustness checks were performed to ensure that the results were accurate and consistent. Findings: Subsequently, the impact of the pandemic and bank concentration was determined to be significant and adverse, though their interplay was strong enough to promote bank stability. This highlights the importance of adequate capitalization in enhancing the beneficial effects of the interaction between COVID-19 and bank concentration on bank stability. Novelty /Improvement: Hence, these ﬁndings contribute to the literature on bank stability and have important policy implications for the banking sector during this pandemic.JEL Classifications: E51, G20, G21. Doi: 10.28991/esj-2022-SPER-018 Full Text: PDF

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Section: -Empirical Results and Robustness Checksmentioning

confidence: 99%

Section: -Data Variables and Methodologymentioning

confidence: 99%

Section: -Data Variables and Methodologymentioning

confidence: 99%

See 1 more Smart Citation

Bank Concentration and Bank Stability during the COVID-19 Pandemic

Riadi

Hadjaat²,

Yudaruddin³

2022

Emerg Sci J

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“…COVID-19 is the independent variable in terms of explanatory variables, and it is measured by the monthly increase in confirmed cases. Previous research also employed this indicator, although the duration of the outbreak in each country differs based on when the first case was confirmed (Gong et al ., 2020; Al-Awadhi et al ., 2020; Maria et al ., 2022; Riadi et al ., 2022). The outbreak began in Indonesia when the first case was confirmed on 2 March 2020 by the Ministry of Health.…”

Section: Methodsmentioning

confidence: 99%

Bank lending during the COVID-19 pandemic: do alliances and digital strategies matter?

Yudaruddin

2022

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PurposeThis paper investigates the joint impact of COVID-19, alliances and digital strategies on bank lending. Additionally, this study examines whether the effect of COVID-19, alliances and digital strategies on bank loans depends on the types of banks.Design/methodology/approachUsing a sample of 92 commercial banks in Indonesia from March 2020 to September 2021, a fixed-effects model (FEM) was used to analyze data.FindingsThis study provides robust results regarding the negative impact of the COVID-19 pandemic on bank loans in Indonesian banking. Furthermore, it reveals that collaboration between banks and FinTech does not substantially influence bank lending, despite the rise in proven cases tending to reduce credit expansion. It emphasizes the importance of the development of mobile banking as part of digitalization in boosting loan bank expansion, and this finding is more noticeable in private and small banks.Practical implicationsThis study highlights some policy recommendations to improve bank lending during the COVID-19 period, particularly the role of new alliances and digital strategy in involving COVID-19 pandemic mitigation within a novel financial ecosystem.Originality/valueThis study offers a significant contribution to the empirical literature that specifically explores the joint impact of the COVID-19 pandemic, alliances and digital strategies on bank lending in banking.

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“…Hampir di segala lini kehidupan terhenti, yang ditandai oleh penguncian produksi barang di banyak negara, mereduksi tingkat konsumsi penduduk, penurunan kepercayaan konsumen, anjloknya bursa saham, dan ketidakpastian kemakmuran (Kumar et al, 2020). Dalam tempo yang singkat, pandemi juga menciptakan polemic baru semisal kestabilan perbankan, renggangnya makroekonomi, dan eksodus finansial yang berujung pada pemecatan dan pengurangan tenaga kerja masal di dunia bisnis (Maria et al, 2022).…”

Section: Pendahuluanunclassified

Penyelamatan ukm dari guncangan wabah sars-cov-2: Sebuah kasus dari Samarinda, Indonesia

Wijaya

Jiuhardi

Nurjanana

2022

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Covid-19 does not only threaten the health aspect, but also threatens social tensions and the economic order. The existence of Small and Medium Enterprises (SMEs) is at the point of collapse. If it is not anticipated through comprehensive reform efforts, then the existence of SMEs is only a discourse and will slowly sink. This article aims to investigate the effects of the pandemic on the SMEs sector in Samarinda City. The method uses a qualitative-case study approach. Referring to the exploratory review, two points are concluded. First, the initial conditions (before Covid-19), the reputation of SMEs classified as "not severe" reached 92.7 percent, while only 1 percent of SMEs were "severe" and 6.3 percent "moderate". Second, after the emergence of Covid-19, there appeared to be significant changes, where there were 56.8 percent of SMEs in "severe" capacities, only a few of them were "not severe" or 15.4 percent, and 27.8 percent were "moderate". Technically, Covid-19 is a holistic cause in the decline in the growth of SMEs in Samarinda City. Additional alternatives are designed to urge and reconstruct the National Economic Recovery (PEN) through the actualization of fiscal instruments (capital assistance, tax relaxation and implementation of partnerships) for SME activists.

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The impact of COVID-19 on bank stability: Do bank size and ownership matter?

Cited by 31 publications

References 63 publications

Bank Concentration and Bank Stability during the COVID-19 Pandemic

Bank Concentration and Bank Stability during the COVID-19 Pandemic

Bank lending during the COVID-19 pandemic: do alliances and digital strategies matter?

Penyelamatan ukm dari guncangan wabah sars-cov-2: Sebuah kasus dari Samarinda, Indonesia

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