Factors Affecting Financial Stability of Sharia Banks in Indonesia

Oktaviana, Ulfi Kartika ORCID: https://orcid.org/0000-0002-5222-4423 and Miranti, Titis ORCID: https://orcid.org/0000-0002-8720-3809 (2024) Factors Affecting Financial Stability of Sharia Banks in Indonesia. Shirkah: Journal of Economics and Business, 9 (2). pp. 213-228. ISSN p-ISSN: 2503-4235 e-ISSN: 2503-4243

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Abstract

To ensure the financial stability of Indonesian banks,
especially Sharia banks, it is essential to focus on various
factors and elements. This study investigates the
endogenous and exogenous factors influencing the financial
stability of Sharia banks in Indonesia. The study utilized
data from the annual financial statements of Sharia banks in
Indonesia spanning from 2010 to 2021. Panel data regression
served as the analytical tool for the research. The findings
indicate that the stability of Sharia commercial banks in
Indonesia is influenced by both capital structure and credit
risk. Financial leverage also affects sharia bank’s financial stability. While ownership distinguishes a bank in terms of organizational structure, it does not necessarily guarantee stability. Islamic commercial banks remain stable amid the COVID-19 pandemic, showing no significant impact on
their overall stability. These findings will enhance bank
understanding of the risks faced by banks and form the basis
for new regulatory efforts to strengthen overall risk
management, including liquidity risk and credit risk.

Item Type:	Journal Article
Keywords:	Bank Ownership; Financial Stability; Sharia Banks in Indonesia
Subjects:	14 ECONOMICS > 1403 Econometrics > 140304 Panel Data Analysis 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment > 150202 Financial Econometrics 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment > 150203 Financial Institutions (incl. Banking) 14 ECONOMICS > 1403 Econometrics 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment
Divisions:	Faculty of Economics > Department of Islamic Banking
Depositing User:	Titis Miranti
Date Deposited:	04 Jun 2024 13:16

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