Prediction Models for Bank Failure: ASEAN Countries

Anggraeni Anggraeni (), Abdul Mongid and Suhartono, ()
Additional contact information
Anggraeni Anggraeni: Faculty of Economics Airlangga University Jl. Airlangga 4 Surabaya 60115 INDONESIA
Suhartono,: STIE Perbanas Surabaya Jl. Nginden Semolo 36 Surabaya 60118 INDONESIA

Jurnal Ekonomi Malaysia, 2020, vol. 54, issue 2, 41-51

Abstract: The paper analyses how global financial crisis effects the performance of banks. This study further estimate the determinants of banks failure on a sample of banks in ASEAN countries namely, Indonesia, Malaysia, Singapore, Cambodia, Thailand, Philippine, Singapore, and Vietnam. We define a bank as having failed when its profitability, equity, and loan quality are below a minimum standard. Besides bank-specific variables (microeconomic variables), some macroeconomic variables have been considered in this study. The findings reveal that during global finance crisis, the performance of the banks is at its weakest before its significant recovery. The findings show that the banking failure is positively linked to cost inefficiency, debt to equity ratio, an inflation rate, but negatively related to profitability. The findings suggest that cost inefficiency, can serve as a foundation for corrective action to be considered by banking authorities in the future.

Keywords: ASEAN; Bank performance; bank failure; early warning; logistic regression (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.ukm.my/jem/wp-content/uploads/2021/05/jeko_542-4.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ukm:jlekon:v:54:y:2020:i:2:p:41-51

DOI: 10.17576/JEM-2020-5402-4

Access Statistics for this article

More articles in Jurnal Ekonomi Malaysia from Faculty of Economics and Business, Universiti Kebangsaan Malaysia Contact information at EDIRC.
Bibliographic data for series maintained by Muhammad Asri Abd Ghani ().