The Effect of Financial Soundness on Bank Financial Performance during Covid-19 Pandemic: The Role of Bank Size

Nur Hania Amilla and V. Viverita ()
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Nur Hania Amilla: Universitas Indonesia
V. Viverita: Universitas Indonesia

A chapter in Proceedings of the 5th International Conference on Global Innovation and Trends in Economy 2024 (INCOGITE 2024), 2024, pp 234-248 from Springer

Abstract: Abstract This study analyzed the moderating role of bank size on the effect of financial soundness on bank financial performance in ASEAN-4 banks during Covid-19 pandemic. The sample used consists of 77 public commercial banks listed on the Indonesia Stock Exchange (BEI), Malaysia Stock Exchange (MYX), Thailand Stock Exchange (SET), and Philippines Stock Exchange (PSE). A panel data regression with the fixed-effect model estimation method is used to analyze the data. Findings of the study indicate a statistically significant negative impact of NPL and BOPO on bank’s Return on Assets (ROA). Conversely, CAR, earnings quality, and a favorable LDR demonstrate a statistically significant positive influence on NIM. Notably, bank size emerges as a moderator, amplifying the positive effect of CAR on ROA while diminishing the impact of LDR on ROA. Similarly, for NIM, size strengthens the negative effect of NPL but weakens the positive effect of LDR on NIM.

Keywords: Bank Size; Financial Soundness; Financial Performance (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-585-0_17

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DOI: 10.2991/978-94-6463-585-0_17

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