Banking Segment Research Articles

Assessing the modulation of outer bank erosion by slump blocks: A case study from Marqu Meadow, China

The outer bank slump blocks play a fundamental role in modulating the rate of bank erosion, and consequently, have a profound influence on many geomorphic and ecologic processes in meandering streams, e.g., channel evolution and habitat creation. To date, no adequate research has been developed regarding how these blocks, partially strengthened by roots of herbaceous plants, impact the near-bank flow velocity, bank erosion, and migration of streambanks. This paper analyzes 246 slump blocks in a meandering stream on the Marqu Meadow, China. Aerial surveys were conducted once a year from 2018 to 2021 and the lateral migration rates (M) of streambanks are estimated by superimposing the current-year drone imagery onto its previous-year counterpart. When compared to the outer bank segments lacking slumps, our research findings indicate that the bank segments exhibiting slumps demonstrate a reduction of 57 % and 43 % in the maximum and average bank erosion rates, respectively. Overall, the wider blocks provide stronger bank protection; nevertheless, they may also introduce or enhance local scouring in their vicinity, thereby increasing the heterogeneity of bank erosion rates. To elucidate this complex influence mechanism, we simulate the three-dimensional flow velocity field of a ~100 m meandering bend containing three slump blocks using the MIKE-3 model. Furthermore, we compare one-year bank migration distance with and without the blocks by correlating the lateral migration distance of outer banks to the longitudinal gradient of near-bank velocity. The paper provides valuable insights into the complex interplay between flow dynamics and streambank behavior in real-world settings, thereby enhancing the effectiveness of future management and restoration practices.

МОДЕЛІ БІЗНЕСУ УКРАЇНСЬКИХ ОЩАДНИХ БАНКІВ

In the banking system, savings banks represent a special component, as they form their resource base mainly due to the accumulation of population savings. Problem Statement. Ukrainian savings banks are a factor in ensuring financial stability, but at the same time they are vulnerable to depositors’ panic in conditions of systemic stresses. Therefore, the analysis of their activities is important for understanding the prospects of the banking system. Savings banks in Ukraine differ significantly in scale and level of business technology. Leading savings banks are planned by the state for privatization, so they are designed to improve their investment attractiveness, at the same time, the status of state ownership gives such banks additional advantages in the market. The purpose is a comparative analysis of the business models of savings banks in Ukraine and the behavior of such banks on the market. Methods. The authors used the methods of comparative analysis, logical generalization, analysis and synthesis. Results. In Ukraine, savings banks are divided by origin into two categories ( state and private capital), and by a business model into those, focused on lending to business clients and those with a balanced composition of the loan portfolio. The monopoly of the state bank was broken by the entry of banks with private capital to the market. Savings banks are identified based on the ratio of funds raised by individuals to the total amount of balances on customer accounts. A blueprint of two business models for the savings bank segment was built, the structure of assets and liabilities, the development of the branch network and market positions in terms of deposits were compared. The analysis of the efficiency of a sample of savings banks was carried out and compared with the indicators of the banking system (profitability, return on operating expenses, profitability of the loan portfolio, cost of funds of individuals, the branching of branch network), as well as the impact of the business model on the investment attractiveness of banks was assessed, the volumes of savings and allocation of funds in loans to individuals were compared. Conclusions. The research made it possible to identify a specific group of banks with heterogeneous business models: firstly, banks that use public funds mainly to finance business clients, secondly, banks that have a relatively balanced credit portfolio for individuals and legal entities. The segment of Ukrainian savings banks is clearly dominated by two large state-owned banks, and given the state of war and citizens' trust in the state itself, there is no reason to expect a change in leaders. Digitization of products and processes will allow savings banks to compensate for the reduction of the branch network, but other banks also take advantage of this opportunity. and return on investment in technological innovation projects will bring effect in the medium term. To a large extent, the amount of savings accumulated by banks depends on two factors - customer trust and assessment of service quality. Savings bank managers should pay primary attention to this. Excessively high dependence of banks on the funds of individuals can be considered as a disadvantage, rather than as an advantage, if a bank itself works inefficiently.

The Development of the Cooperative Banking Sector in Selected Central and Eastern European Countries

The study assesses the development of the cooperative banking sector in selected Central and Eastern European (CEE) countries against the average statistics of the segment in those countries. It also compares it to the largest European cooperative banking group in Germany. The article presents the results of an analysis of the cooperative banking sectors between 2016 and 2021 in Poland, Bulgaria, Romania, Hungary and Germany, all of which are members of the European Association of Cooperative Banks (EACB). The selection criterion was based on the availability of detailed data on cooperative banks published by the EACB on a temporal and spatial basis.
 The empirical basis for the issues addressed in the article is a review of the reference literature and the comparative analysis of the development of the cooperative banking sector using a synthetic development indicator for the period 2016–2021. According to the theoretical and empirical analysis, Romania demonstrates the lowest level of development of the cooperative banking segment. In turn, the Polish and Bulgarian cooperative banking sectors represents a higher level of development than the Romanian one. Hungary has reached the highest level of development in the group of Central and Eastern European countries. While comparing the CEE countries to the German cooperative banking sector, their development was almost one and a half times lower and, in the case of Romania, three times lower.

What drives bank liquidity creation? The interaction of monetary policy and strategic scope

The research investigates how the marginal influence of monetary policy on the expansion of liquidity creation changes depending on the strategic scope of banks. Through a sample of Vietnamese commercial banks between 2007 and 2019, we estimate measures of liquidity creation that consider all banking items and build up various monetary policy indicators. Empirical regressions are achieved with the dynamic generalized method of moments (GMM) estimator that is fitted to tackle the endogeneity issue. The study confirms the existence of the bank liquidity creation channel, i.e., an easing monetary policy boosts the banks' liquidity creation ability, both when the central bank reduces interest rates and injects more capital into the market. For banks with a strategic scope that relies more on non-interest revenues or diversifies more into various banking segments, the relationship between monetary policy and the generation of bank liquidity is strengthened when the central bank adjusts interest rates but mitigated if it changes the money supply using quantitative-based monetary tools. This paper expands the literature stream on monetary policy's liquidity creation channel, which is essential to the economy but has been little explored, by shedding light on the moderating role of bank income. Additionally, this study employs many policy indicators based on interest- and non-interest-rate tools to avoid misleading conclusions on the policy stance.

ФІНАНСОВИЙ ТА СТАТИСТИЧНИЙ АНАЛІЗ В УПРАВЛІННІ РИЗИКАМИ НА ФІНАНСОВОМУ РИНКУ У КОНТЕКСТІ ФОРМУВАННЯ «INDUSTRY 5.0»

One of the basic principles of the financial market is transparency, which is directly related to the reliability and accessibility of information held by financial market participants. Accordingly, in the context of ensuring the implementation of the "Industry 5.0" concept, the article considers the problems of information support for market participants and analytical procedures in the risk management system. It is noted that the functioning of the financial market of Ukraine today is taking place in conditions of uncertainty and high risks, and digitalization has a significant impact on the functioning of the financial market. The article aims to study the current features and functional load of financial and statistical analysis in financial market risk management and identify the problematic issues and prospects for overcoming them in the context of the formation of Industry 5.0. The article emphasizes the need to increase the level of financial and digital literacy of the population as a prerequisite for developing the financial market. It is established that applying an exclusively retrospective approach in the context of forming information support for managerial decision-making in the financial market is inappropriate. It is also noted that when making decisions by financial market participants, in addition to traditional financial analysis, it is necessary to analyze environmental and social information. This makes it expedient to disseminate ESG principles and standards in Ukraine. The leading place in the financial services market of Ukraine is occupied by banks. Over the past ten years, the number of commercial banks in Ukraine has decreased from 180 to 63, which in the context of the formation of Industry 5.0 can be seen as a consequence of optimizing the structure of the banking segment of the financial market. Financial analysis plays a significant role in managing risks in the financial market, the main information source for which is accounting information, primarily financial statements. Market participants based on information signals, which are a unique information source, make management decisions regarding a particular action in the financial market. The article considers the feedback and influence of information on the status of financial market participants on prices in the financial market and the influence of prices in the financial market on decision-making by various market participants. Prices are the main source of information for making important decisions, forecasting, etc. Areas for further research include scientific substantiation and methodological support of consulting activities in the field of information support of financial market participants.

Achieving the Sustainable Development Goals Through Corporate Sustainability in a Private Banking Organization

Corporate sustainability (CS) has drawn the attention of academics and practitioners as a way to achieve profitable businesses without negatively impacting society. However, financial business organizations have not adequately realized the importance of CS in meeting sustainable development goals (SDGs). Thus, it is unclear how the financial sector will achieve the SDGs using CS. All 17 goals are essential, but achieving them depends on which CS issues the organization prioritizes. This study uses a qualitative case study to investigate the use of CS to achieve SDGs at financial corporations. Interviews were conducted with five respondents from City Alo, an SME banking segment of City Bank in Bangladesh, and 15 women entrepreneurs engaging with this organization to receive entrepreneurship education through a bank–university collaboration. The results show that the private banking organization achieved seven SDGs by prioritizing appropriate CS issues.

Creating Shared Value in Banking by Offering Entrepreneurship Education to Female Entrepreneurs

Apart from less entrepreneur-friendly banking services, a lack of entrepreneurial qualities in entrepreneurs makes entrepreneurship challenging. As a result, banking experiences difficulties in accessing entrepreneurs as customers. Creating shared value (CSV) is a model for business that overcomes these socioeconomic challenges by converting social issues into three pillars: reconceiving markets and products, redefining value chains, and developing local clusters. Banking has a conservative business model in which it is difficult to simultaneously achieve the above three pillars of CSV for the three dimensions of banking, i.e., client prosperity, regional economic growth, and solutions to financial problems. This study investigated the key to the simultaneous achievement of the three pillars of CSV by aligning social issues with the value chain. We conducted a qualitative case study of City Alo in Bangladesh, a female-centered banking segment of City Bank, that offers a university-collaborated entrepreneurship education course as well as small and medium enterprise banking products to female entrepreneurs. The findings indicate that in CSV of banking, entrepreneurs are the source of economic growth and entrepreneurship education promotes client prosperity. Therefore, entrepreneurs overcome entrepreneurship barriers to achieve success in their field and the bank becomes more active by accessing many entrepreneurs as customers.

Кредитний портфель українських банків: аналіз впливу воєнного стану

In 2022 and at the beginning of 2023, the financial system of Ukraine proved its institutional capacity. The results of the banks' activities in 2022 confirm their significant contribution to its stabilization during the period of full-scale Russian aggression. The measures of the monetary authority were more balanced and effective compared to the events of 2014-2015. The current state of the banking system proved the integration of Ukrainian banks into the European financial space. Problem Statement. Systematization of problems and approaches to the strategic development of the banking system in the period of post-war economic recovery and its impact on the general security of money circulation in the country.The given calculations and graphs make it possible to compare the trends in the main markets of banking operations in 2014–2023. Purpose. To assess the current state of dynamics of active and passive operations of Ukrainian banks after the pandemic crisis and in the midst of full-scale Russian aggression, as well as the impact of their activities on the development of the real sector. Methods. General scientific and special methods are used: analysis, synthesis, grouping, description, comparison, theoretical generalization and abstract-logical. Results. The dynamics of changes in the resource base of banks at the expense of legal entities and individuals, as well as their credit and investment portfolios, are presented. The main macroeconomic strategies of monetary policy, which influenced the development of banks in 2014–2023, were considered. The importance of resuming the cooperation of the Government of Ukraine with international financial organizations in 2023 and further institutional development of the banking system was emphasized. Conclusions. The quality of management of the financial sector and the banking segment, in particular in 2022, is higher than in 2014. The bank-centric financial system that has developed in Ukraine should have a long-term strategy for the development of institutions along with a transparent mechanism for evaluating the quality of their management. For the development of the banking system in order to improve the resource provision of the economy, it is necessary to return to the idea of creating a national reconstruction and development bank, a bank of assets damaged and destroyed by the war.

A comparative study of Non-Colour Bank segment among leading paint brands in Asansol market

The Indian paint industry is one of the fastest growing ones in the country, maintaining double digit growth rates over the last few years, primarily due to shift in consumption patterns of the decorative paints. However, the Non-Colour Bank (NCB) segment consisting of enamels, primers, thinners, are not showing similar growth patterns, and is dominated by one firm. This study investigates the Availability, On-time delivery, Incentive schemes, and Customer Service pattern of Non-Colour Bank (NCB) products of Asian Paints Ltd., the market leader, and Other Brands, primarily including Berger Paints Ltd. in the Asansol Municipal Corporation area. The results will help Berger Paints, the market follower, to be aware of its position in the market while also assist other firms in finding out the lacunae regarding various NCB products in Asansol area in order to compete and have a strategic edge over other paint brands in the survey area.

Value relevance of financial risk disclosures

PurposeThe objective of the present study is to examine the value relevance of accounting information presented by Brazilian banks.Design/methodology/approachThe studied sample derived from Brazil’s Stock Exchange, B3, under the banking segment, resulting in a group of 24 publicly listed companies, whose data ranged from 2017 to 2019. The study was conducted using the disclosure index, made with the intent of evaluating the disclosure adherence of a company to the reporting standard. In this case, Comitê de Pronunciamentos Contábeis (CPC) 40, financial instruments: recognition, evaluation and disclosure, Instrumentos Financeiros: Evidenciação, Brazil’s interpretation of the International Financial Reporting Standards (IFRS) 7.FindingsThe results show that for the sample and period, the disclosure index cannot be used as an explanatory variable for the market evaluation of financial institutions.Originality/valueWhile other studies have presented a similar approach to the value-relevance theme, the present work is original as it develops the methodology on financial institutions, and even more so on the financial institutions of a developing country.

Credit risk management in commercial banks

Development of the banking sector in Kazakhstan is characterized by a rapid pace. This growth is combined with increased competition, access to foreign markets, and the birth of new banking products. Most banking services fall on credit activities. In this regard, it is relevant to build an effective risk management of the loan portfolio. The purpose of the study is to develop proposals for improving the management of credit risks in the banking sector. The research methodology is based on the use of such methods as generalization, statistical methods, comparative analysis and statistical method. The authors analyzed the loan portfolio of the banking segment and based on this, conclusions and suggestions were made to improve the quality of lending. It is noted that over the past few years there has been a tendency to increase loans to individuals in the structure of the loan portfolio. The article outlines a number of proposals aimed at improving and enhancing the quality of credit risk management in the current economic conditions.

Theoretical approaches to interpreting the essence of banking innovations and determining the goals of their implementation

Any scientific study of the development of economic systems or society directly or indirectly determines the need for innovations, which are the driving force of qualitatively new, progressive changes. The article examines the evolution of the concept of "innovation" and the features of its application in banking. The author addresses theoretical approaches to the interpretation of the essence of "banking innovation" and reveals that the main goal of the innovative activity of banking institutions is to make a profit and improve their competitive positions. The article substantiates that the innovative activity of banks is not the same as the concept of financial innovations, and the latter is an element of the innovative activity of banking institutions. Characteristics of financial innovations and the reasons for the frequent identification of the essence of financial and banking innovations are analyzed. They are analyzed and structured according to the goals and directions of their implementation. The comparison of innovations and financial innovations is analyzed and their main similarities and differences are revealed. The dependence of financial investments on the bank’s competitiveness and the peculiarities of their relationship are outlined. Factors influencing the innovative component of banking institutions are structured. The article shows that the presence of qualitatively new changes contributing to increasing the efficiency of the use of banking institutions’ resources in the conditions of digitalization and remote banking is the main characteristic of banking innovations. It also reveals that the trend towards digitalization of all spheres of social life, including banking, has a significant influence on banking innovations, however, in the context of this trend, the aspect of guaranteeing the financial security of the banking segment becomes important. Given the resource investments aimed at financing the implementation of innovations in the field of banking services, the characteristic signs of investment are identified. The actual implementation of innovations, like investments, involves spending money now in order to obtain economic benefits in the future. That is, the objective and ultimate goals of innovation and investment coincide. However, the concept of investment is broader than innovation and includes the latter. They correlate as a whole and a unit when viewed from the perspective of philosophical categories.

СУЧАСНИЙ СТАН ПОКАЗНИКІВ УКРАЇНСЬКОЇ БАНКІВСЬКОЇ СИСТЕМИ

The article is devoted to the analysis of the main quantitative indicators of the development of the banking sector of Ukraine: the number of banks included in the State Register; the number of licensed banks; the number of operating banking institutions; the number of banks with foreign capital; the number of banks under liquidation, etc. The dynamics of the assets of the banking system in Ukraine and the main reasons for the identified trends are given. The structure of bank assets is determined. The dynamics and structure of Ukraine’s banking resources are also analysed. An assessment of the dynamics and structure of revenues and expenses of the banking segment of the Ukrainian economy was made. The main financial results of the banking sector of the national economy are determined. As main financial results were chosen net profit, net loss and profitability of assets. The main trends in the development of the banking sector of Ukraine in the period 2018–2022 are outlined, such as: reduction in the number of banking institutions, in particular banks with foreign capital, and the number of structural units; increased mistrust of banks; adaptation to working conditions during the war period; positive dynamics of the assets of Ukrainian banks; a slight decrease in the loan portfolio; the growth of non-performing loans, after a long decline; profitability of capital and assets indicates the restoration of the banking system; the tendency to increase the liabilities of banks and their obligations. In the conditions of martial law, the banking sector of Ukraine continues to work, restore the work of branches in the liberated regions of Ukraine and actively develop. It can be argued that the banking system as a whole has withstood the serious challenges of the modern stage: banks operate and lend while maintaining their liquidity.

The Framework of Loyalty and Customer Satisfaction with Perceived value and Omni-channel Integration Quality as Drivers in Banking Sector of Pakistan

Technological advancement and digitalization bring drastic transformations in the business market. This study intends to recognize the factors that influence customer loyalty and enhance the literature relevant to the evolving topic of Omni-channel which provides a seamless experience to consumers among all channels. This study empirically investigates the association among the Omni-channel “integration quality, perceived value, customer satisfaction & customer loyalty” in the Pakistani banking segment. To collect the data, a quantitative study was accompanied. The online surveys were generated on google forms filled out by the customer and some were distributed by hand. 233 questionnaires out of 250 were used to perform the analysis, and 17 questionnaires were excluded due to incomplete or missing data. SPSS 21 was used to perform Cronbach alpha & regression analysis. The result shows that loyalty & satisfaction are significantly influenced by the Integration quality, and a significant positive association of Perceived Value with satisfaction but shows insignificant relation with loyalty. Moreover, by enhancing customer satisfaction loyalty can be increased in the banking segment also showing significant results, and high-quality integration enhances the Perceived Value. while examining the given framework outcomes, the Pakistani bank's manager might be able to use the Omni-channel strategy in the banking sector favorably & recognize its influence on customers as well.

FACTORS IN THE DEVELOPMENT OF BANKING CRISES: THEORETICAL AND MANAGEMENT ASPECT

The study is based on the thesis that the functioning of the banking segment of the financial market always reacts sensitively to any changes in the external and internal environment. Since such changes are caused by various factors, they must be systematized in order to build an effective mechanism of anti-crisis management of banks. The article substantiates that such factors are formed at different levels and can cause destructive changes both in the work of an individual bank and become a threat to the functioning of the banking system. At the same time, banks' risk management systems are only part of the anti-crisis management of a banking institution. An important task is the formation of a certain mechanism of anti-crisis management of banking activities. Increasing the effectiveness of such a mechanism and its effectiveness is possible by taking into account the factors of banking crises and the levels of their deployment. For this purpose, the article researches modem author's approaches to the concept of "banking crisis". Their content characteristics are revealed, methodological differences in their interpretation are emphasized. It is determined that the factors or causes of the banking crisis are always closely intertwined, often overlapping each other, intensifying its negative consequences. In this aspect, it is determined that the factors of the banking crisis are formed at different levels of economic systems. It is advisable to consider them depending on the environment of formation - external or internal. External (exogenous) factors are, as a rule, responsible for the formation of macro- and meso-levels. Internal (endogenous) factors are caused by poorly managed banking business. These include: miscalculations in setting interest rates, unbalanced management of assets and liabilities, aggressive bank policy in the credit and deposit markets, non-compliance with regulatory requirements, etc. The key feature of the factors is that in practice they are combined, and therefore able to form unique vectors of influence - both on an individual bank and on the banking system. As a result of the combination of these factors, the banking crisis can unfold as a systemic phenomenon or as a crisis of the functioning of an individual institution. At the same time, the crisis is caused by a critical combination of risks that is poorly predictable. The development of anti-crisis management measures is impossible without taking into account crisis events in the bank's business model. It was also determined that innovative activity is of key importance for the development of anti-crisis management measures. It is the basis of increasing the bank's competitiveness, and therefore its market position.

Accelerated Growth of Peer-to-Peer Lending and Its Impact on the Consumer Credit Market: Evidence from Lithuania

The paper analyses development and drivers of accelerated growth of peer-to-peer (P2P) lending in Lithuania and its impact on the consumer credit market with a focus on related sustainability issues. Legislative discrepancies between the P2P and banking segments are analysed and their role in predetermining the different development trends within the segments is highlighted. The research is composed of several steps, where each step analyses a certain problem with the aim to compare the processes in both segments, and is using two different approaches based on macroeconomic data and legislative environment analysis. The applied setup of the research allows for distinguishing and quantitative evaluation of the impact on the segments caused by various internal and external factors, such as macroeconomics, technological advantages of P2P platforms, and discrepancies within business regulation. The obtained results could fill in the scientific literature gaps by providing quantitative evidence of the influence the analysed internal and external drivers have on the growth rate of the consumer credit market segments in Lithuania and how this could affect the performance of the whole market, including its sustainability. Conclusions made could be of interest to researchers and practitioners in other countries too, especially those which have similar legislation and regulations within the consumer credit market. Methods used: a scientific literature analysis and generalisation, comparative analysis, statistical data analysis, correlation–regression analysis, mathematical modelling.

Corporate social responsibility disclosures and profitability of Islamic banks: an empirical study

PurposeThis study aims to investigate the relationship between corporate social responsibility (CSR) disclosure and financial performance (FP) of Islamic banking sector from a developing country perspective. It also explores the present status of CSR activities performing by the listed Islamic banks (IBs) of Bangladesh.Design/methodology/approachThe secondary data from seven IBs’ annual reports for the years 2009–2018 are taken to obtain substantial measures of CSR activities. A corporate social responsibility disclosure index is constructed based on disclosure status on nine dimensions and 75 items as per the Accounting and Auditing Organization for Islamic Financial Institutions standards. To find the association between CSR disclosures and profitability, panel regression analysis has been performed.FindingsThe result indicates that CSR disclosures have a significant and negative relation with FP (return on assets) of IBs. It also suggests the expansion of CSR practices and the communicative CSR reporting of IBs, as an ethical identity, toward the stakeholders and society.Research limitations/implicationsFirst, the samples used in this study are limited to IBs as ethical identities in Bangladesh. Second, the length of a time frame as the practice of CSR activities and its reporting is still ineffective following the enforcement of the central bank directive in 2008. Another limitation is that the study used a subjective measure, content analysis, of CSR activities that was self-reported disclosures, which may creep some biasness.Practical implicationsThe practical involvement of this research includes the assistance for policy development regarding better understanding of expansion of CSR practices and trustworthiness of CSR reporting by the Islamic banking segments in developing country context. Future researchers can get a glimpse of what reputational impact CSR initiatives really have on consumers and investors, considering CSR activities as an indicator of greater transparency and honesty in operations and financial reporting.Originality/valueThis study makes an important contribution to the academic literature on CSR communication from developing country context where CSR activities are supported under Islamic banking system. In addition, its examination of the legitimacy of CSR disclosures elaborates the social obligations of corporate entities to their stakeholders and society.

Effect of Information Technology on Banking Segment in the Indian Financial Growth

The current banking environment must be extremely competitive. IT refers to the acquisition, distribution, archiving, and dissemination of all kinds of information via computer technology and communication networks. The input is made using these technologies, Information is kept, distributed, and communicated. IT involves supplemental hardware, software and other such tools, services, etc. recent changes in the banking industry in The Internet is in India. Information technology (IT) is fundamental to the banking industry. Sector are fulfilling internal needs, processing data effectively, and expanding customer services, innovative help for the development of new products, and end-user training for nontechnical workers. The following are some new information technology trends in the banking industry: outsourcing, combining, differentiating IT as a Source of Income, Thriving in Down Market. Tests the Indian banking system in India must pass include Meet potential customers on customer retention, the bank's service and capacity, dealing with spreads, and maintaining the operating profit, taking into account the sector's current market share and the accomplishment from another set of players in the banking business reveals the same.

The consequence of the credit risk on the financial performance in light of COVID-19: Evidence from Islamic versus conventional banks across MEA region

PurposeThe increased number of nonperforming loans (NPLs) during COVID-19 pandemic has interrogated the robustness of banks and stability of the whole banking segment. We examine the impact of credit risk (CR) on financial performance (FP) by comparing Islamic banks (IBs) to conventional banks (CBs). We also investigate the influence of COVID-19 on this association.Design/methodology/approachOur sample includes the largest 200 banks across 15 countries from the Middle East and the Africa (MEA) region over a four-year period (2018–2021). Panel ordinary least squares (OLS) with fixed and random effects were used.FindingsWe find a negative association between NPLs and FP for IBs and CBs. We reveal that COVID-19 is partially mediated the association between NPLs and FP in case of the whole sample and separated sample of CBs while not in case of IBs.OriginalityThe evidence of CR and FP on samples of financial sector across MEA region has not been studied in the era of COVID-19 as far as we know.Research limitations/implicationsThis study contributes to the knowledge of the risk and financial performance during the crisis nexus and provides information that is valued to bankers, academics, managers and regulators for policy formulation.

Islamic Banking System and Economic Growth: Exploration of D-8 Countries

The aim of this investigation is to look at the effect of the Islamic banking system on the economic growth of D-8 countries as well as their relationship and the causality direction. Annual report time series data were used from 2010–2021. Islamic Banking Financing (IBF) was used as a representation of the Islamic banking sector, while Foreign Direct Investment (FDI), Gross Fixed Capital Formation (GFCF), Gross Domestic Product (GDP), and Trade were used to represent the economic sector. The econometric tools used are the panel unit root test, panel test of cointegration, and the causality test of Granger. The findings showed that, in the short and long run, Islamic banking and economic growth have a positive connection in D-8 countries. Moreover, there is bi-directional causality. That means, there is a two-way causality starting from the growth sector to Islamic banking and Islamic banking to economic growth. It is also discovered that, in the short run, investment (GFCF) and trade activities have an affirmative influence on the development of Islamic banking. Increasing investment formation will thus successfully subsidize the expansion of the Islamic banking segment of D-8 countries. However, the main policy implication is that governments of the D-8 countries can support economic growth by expanding the finance sector through additional liberalization measures. It is recommended to include another variable that is currently not used, such as the quality of the institutions, and moreover, to apply other statistical tools such as ARCH and GARCH to look at profound relationships.