Weathering the COVID-19 storm: The case of community banks

Hassan, M. Kabir; Karim, Md. Sydul; Lawrence, Shari; Risfandy, Tastaftiyan

doi:10.1016/j.ribaf.2021.101608

Cited by 14 publications

(14 citation statements)

References 41 publications

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“…The covid-19 pandemic has seriously impacted financial institutions' performance, especially banks (Ashraf et al, 2022;Hassan et al, 2022). In a similar vein, the health crisis also significantly affects a business such as micro, small, and medium enterprises-MSME (Behl et al, 2022).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Most of the prior studies report that the Covid-19 pandemic negatively impacted the global economy (Rizwan et al, 2020) and the banking industry (Ashraf et al, 2022;Hassan et al, 2022). Although some prior research reports that the crisis can have different impacts on two bank types, e.g., Islamic and conventional banks (Alqahtani et al, 2016;, other works conclude that it impacts both banks with no differences (Alexakis et al, 2019;Bourkhis and Nabi, 2013).…”

Section: Hypothesis Developmentmentioning

confidence: 99%

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The Performance of Indonesian Islamic Rural Banks During Covid-19 Outbreak: The Role of Diversification

Risfandy¹,

Pratiwi²

2022

JIMF

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This research investigates how Islamic rural banks performed during the Covid-19 outbreak and how diversification is associated with the performance of the banks. Islamic rural banks provide a unique setting because they serve limited customers in a specific region in Indonesia, different from national commercial banks that accommodate all types of customers in all regions. To investigate this issue, we employ panel data of 164 Islamic rural banks dispersed across 23 provinces in Indonesia from 2020q4-2021q3. We find that covid-19 is negatively associated with the profitability of Islamic rural banks, implying that covid 19 has affected all sectors, including banks with niche markets such as Islamic rural banks. We also find that diversification is negatively related to the Islamic rural banks’ performance. This finding suggests that instead of expanding their business scope, Islamic rural banks should focus on their main business activity because their non-financing income is adversely related to their performance. Our finding suggests that policymakers effectively monitor Islamic rural banks to remain focused on their main business activity.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Hypothesis Developmentmentioning

confidence: 99%

The Performance of Indonesian Islamic Rural Banks During Covid-19 Outbreak: The Role of Diversification

Risfandy¹,

Pratiwi²

2022

JIMF

View full text Add to dashboard Cite

show abstract

“…The initial phase of this pandemic was challenging for all nations, resulting in a slowdown in economic activities. Thus, banks also suffered from this pandemic ( Hassan et al., 2022 ) and experienced a decline in their traditional activities. However, non-traditional activities allow banks to generate income even during the pandemic period and, thus, decrease credit risk.…”

Section: Literature Reviewmentioning

confidence: 99%

“…However, the current COVID-19 pandemic has an influence at a worldwide level. Arguably, this pandemic has also been influencing financial institutions like other firms ( Hassan et al., 2022 ), which are vital for the economy. Among them, banks have a more crucial role in economic growth ( Barth et al., 2004 ).…”

Section: Introductionmentioning

confidence: 99%