UUM Electronic Theses and Dissertation
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Factors influencing financial stability: a comparative study between conventional banks and Islamic banks in Malaysia

Anis Atikah, Abdul Aziz (2019) Factors influencing financial stability: a comparative study between conventional banks and Islamic banks in Malaysia. Masters thesis, Universiti Utara Malaysia.

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Abstract

Financial stability is very crucial for every financial institutions as it will bring public trust and confidence in the whole system and at the same time contribute for a healthy and well-functioning economy of a country. Hence, financial institutions including banks need to maintain their financial soundness and stability as they play an important role in the economy. Thus, this study was conducted to examine the influence of bank specific variables and macroeconomic factors such as Liquidity Ratio (LIQR), Profitability (PROFIT), Asset Quality Ratio (AQR), Capital Ratio (CAP), Gross
Domestic Product (GDP), Inflation Rate (INF), Unemployment Rate (UNR), and Money Supply (M2) on the Financial Stability of Islamic banks and Conventional banks in Malaysia. By using E-Views 8 software, the data obtained from the year 2009 until 2017 then is evaluated and interpreted. The Multiple Regression Analysis was conducted in order to examine the factors that influencing the financial stability of the banks in Malaysia. The findings from this study revealed that only two variables were found to be significant with the financial stability of Islamic banks which are CAP and GDP. While there are six variables were found to be significant with the financial stability of Conventional banks which are PROFIT, AQR, CAP, GDP, INF and UNR. From these results, it was proved that Islamic banks are able to withstand from economy crisis as INF, UNR and M2 were found not significant with financial stability of Islamic banks. Meanwhile, conventional banks are highly affected with economy crisis since GDP, INF and UNR were found to be significant with its financial stability.

Item Type: Thesis (Masters)
Supervisor : Mat Nor, Alias
Item ID: 8813
Uncontrolled Keywords: financial stability, Islamic banks, conventional banks, Z-score
Subjects: H Social Sciences > HG Finance
Divisions: Othman Yeop Abdullah Graduate School of Business
Date Deposited: 16 Nov 2021 02:41
Last Modified: 10 Apr 2022 23:49
Department: Othman Yeop Abdullah Graduate School of Business
Name: Mat Nor, Alias
URI: https://etd.uum.edu.my/id/eprint/8813

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