Stability Of Sector Research Articles

The sanctions’ resistance analysis of economic sectors: Priorities of sovereign development and technological modernization

The purpose of the study is to develop analytical tools and methodological support for assessing the stability and vulnerability of sectors of the national economy to the effects of external sanctions. The study of the problem was based on the general scientific methods of generalization, analysis and classification. Methods of logical, economic, content, statistical, investment and expert analysis were used, as well as methods of econometric and mathematical modeling to achieve the research goal. A system of indicators for assessing the operational (technological and commercial) and investment dependence of the economic sector on imports is proposed. Methodological methods for assessing the sanctions dependence of the industry in the formation of production and investment development programs are substantiated. Examples of calculations of dependence indicators by levels and aspects of the industry description in the operating and investment areas are given. Recommendations are given on the use of the proposed indicators in the process of strategic and programming development in the conditions of ensuring technological independence and structural adaptation of the Russian economy.

Loan growth drivers in state-owned banks: A fixed effects model approach

Loan growth is a critical driver for economic development, and comprehending the determinants affecting lending in state-owned banks is vital for enhancing financial sector stability and performance. This paper examines the factors that affect loan growth in state-owned banks in Bangladesh. We collected data over a 11-year period from 2012 to 2022. We applied ordinary least square method primarily followed by fixed effect estimation. To check the validity of the regression models of the study, we have considered several diagnostic tests. Our findings indicate that loan growth in state-owned banks is influenced by several industry-dependent variables i.e. size, liquidity, efficiency, non-performing loans, etc. The influence of bank size, income, liquidity, non-performing loan ratio, and cost-to-income ratio is the main emphasis of this study's investigation into the factors influencing bank lending. According to the statistics, there is a significant positive correlation between size and lending. Bank liquidity and lending show a strong negative correlation. The study also found higher lending is associated with higher non-performing loans significantly. The efficiency ratio shows a substantial negative impact on lending. To improve bank performance and stability, policymakers and bank management may benefit greatly from these results. Policymakers need to integrate various macroeconomic and qualitative elements into regulatory frameworks to bolster financial stability while facilitating sustainable loan expansion. Bank management can enhance efficiency by decreasing the cost-to-income ratio and strengthening credit risk management, while utilizing bank size for strategic expansions to increase lending capacity.

The Economic Shockwaves of the Russia-Ukraine Conflict and Energy Sources Prices – The Impact on International Energy Markets

The Russia-Ukraine conflict has raised concerns regarding the stability of the global energy sector, considering that Russia is a big player in the industry, producing and exporting crude oil and natural gas globally. This study aimed to empirically investigate the impact of the conflict on the prices of energy sources in international markets. The analysis was conducted using secondary data. The data was for prices of various commodity products, including diesel, petroleum, natural gas, and crude oil. The data was collected on multiple international markets for periods from January 1, 2021 to November 30, 2023. The analysis was conducted using trend analysis and event study. The capital asset pricing model (CAPM) was adopted to run the event study analysis. The results indicated that immediately after the Russian invasion of Ukraine, major energy products such as US crude oil, European crude oil, and the global energy index experienced a sharp rise in price, followed by significant price volatility over the following up to seven months. The review of OPEC energy prices also indicated an increase in prices, and volatility was experienced in countries producing and exporting oil products. The event study further revealed that there was a sharp increasing trend immediately after the event date and an upward trend for more than ten months after the event, resulting in the highest prices recorded in the event window. The study suggested three policy implications - conflict should serve as a wake-up call on diversification of energy sources, investment in alternative, sustainable and green sources of energy to reduce the dependence on oil, and promotion of international cooperation on energy security.

On ways to reduce the energy supply costs in Russia

Purpose: is to research of ways to reduce the energy supply costs for Russian consumers.Methods: the analysis of the transformation of the electric power industry was carried out using the tools of tectology and system economic theory.Results: the key reason for the constant increase in the cost of energy supply has been identified, which is the transition from a systematic approach to energy development aimed at increasing general economic efficiency to maximizing the economic performance of independent energy companies. The need to adjust the basic principles laid down in the concept of electric power industry development is substantiated.Conclusions and Relevance: the result of the successful completion of the reform of the Russian electric power industry is a steady influx of significant investments into the industry over the course of decades. But despite the increase in power system capacity, which is outstripping the dynamics of electricity demand, the need for the most expensive peak power sources and energy storage systems is growing, which leads to an increase in electricity prices in addition to the investment component. A positive feedback has been identified that reduces the structural stability of the energy sector, namely: between rising electricity prices; reduction of electricity consumption from the network as a result of the installation of their own generation by some consumers; increasing costs of generating and network companies; more intensive growth in electricity prices and increased motivation to install their own generation for that part of consumers who continue to use grid electricity. The ways are proposed and the solutions are considered aimed at forming new connections between participants in the single technological process of production, transmission and consumption of energy resources, with the aim of reducing the energy supply costs and improving the specific performance indicators of the energy system, and in the future reducing the costs of integrating renewable energy sources into it.

Development of innovationin the Polish banking sector

The rapidly developing market for new technologies is driving the introduction of innovative solutions in the banking sector. As a public trust sector, they are subject to numerous regulations. Supervisors and central banks are trying to support the develop- ment of new technologies in the sector by reducing regulatory uncertainty and support programs aimed at FinTech (Financial Technologies) companies. The purpose of the study is to analyse existing regulations and regulators’ initiatives on new technologies in the banking sector. The author seeks to answer the research question of whether the introduced regulations support or limit the digital transformation of the banking sector in Poland. An im- portant aspect in the sector is customer security, so regulations should focus on protecting the banking customer and ensuring the stability of the sector. They are analysed by regulators so that the relevant regulations enable the introduction of innovative yet safe solutions. The author points out possible synergies resulting from cooperation between banks and FinTech companies. In conclusion, dialogue between banking sector institutions, regulators, central banks and banks leads to the creation of an environment that allows the introduction of innovative solutions while maintaining customer protection and banking sector stability.

Impact of digital transformation on financial stability in emerging markets: evidence from Ethiopia

This insightful study delves into the intricate relationship between key digital finance adoption indicators and the stability of the banking sector in Ethiopia, an emerging economy undergoing rapid digitalization. Covering annual data from 1991 to 2022 and utilizing an autoregressive distributed lag (ARDL) approach alongside Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) techniques, the researchers uncover thought-provoking findings that challenge conventional wisdom. Contrary to expectations of a positive long-term association, the analysis reveals a statistically significant negative relationship between both internet usage and mobile phone subscriptions and Ethiopia's banking system's financial stability. This robust result, validated through rigorous robustness checks, suggests that the breakneck pace of digital transformation may outpace the development of robust regulatory frameworks and risk management practices, ultimately undermining the overall stability of the financial sector. Interestingly, the short-term analysis presents a more nuanced picture, with mobile phone subscriptions exhibiting a stabilizing effect in the immediate aftermath. This intriguing dichotomy highlights the complex and evolving dynamics at play, where the challenges of integrating digital finance with the traditional banking infrastructure and the persistence of informal financial activities potentially offset the benefits of enhanced financial inclusion and transaction efficiency. These thought-provoking findings carry crucial implications for policymakers and industry stakeholders navigating the digital revolution. Policy implications emphasize the need for robust regulatory frameworks, enhanced cyber security measures, and improved financial literacy. The findings underscore the importance of a nuanced approach to digital finance in emerging economies, advocating for continuous adaptation of policies to address the evolving landscape of financial technology. Continued inquiry can better guide policies that foster digital transformation while safeguarding stability, especially in rapidly developing regions like sub-Saharan Africa.Graphical

ФОРМУВАННЯ НА СУЧАСНОМУ ЕТАПІ РИНКУ ФІНАНСОВИХ ТЕХНОЛОГІЙ В СВІТОВІЙ ЕКОНОМІЦІ

The current stage of development of the world economy is characterized by the process of increasing the role of the financial sector, as well as the transition to a new phase of development - innovation. Globalization in financial innovations is critical in international innovative development in today's conditions. The rapid spread of financial innovations under the conditions of financial globalization has become the main driver of the formation of the world economic system, contributing to the deepening of financial globalization. The formation of the financial services market is uneven because various factors influence it, including the level of development of information and communication technologies, the stability of the financial sector, and others. These factors have been studied by researchers, but the development of specific segments of the fintech market has its peculiarities. Fintech is a complex system that unites the sectors of new technologies and financial services, startups, and the relevant infrastructure. The financial services sector is increasingly actively using new technologies and tools to perform its functions and implement fundamentally new solutions in which consumers of services are interested. New technologies inherently changed not only the historically formed landscape of providing financial services, giving it freshness and dynamics, but also changed the attitude to such a concept as "money", realizing the transition from cash to virtual money in a reasonably short period. The industry provides subjects of financial relations with a wide range of innovative technologies, among which robotics, biometrics, remote banking, P2P lending, and many others have become vital. The fintech industry is expected to grow due to increased market penetration rates for existing services and their international expansion. The transition from the traditional financial services system to a digital one provides excellent opportunities for large financial companies and FinTech startups to work with banks or financial organizations. As more critical financial infrastructure projects come into production, more players will be interested in implementing digital financial technologies.

Connectedness and systemic risk between FinTech and traditional financial stocks: Implications for portfolio diversification

The rapid growth in FinTech is attracting significant investor attention. There are concerns that FinTech stocks may be a source of systemic risk and this has implications for the stability of the financial sector. This study uses a TVP-VAR model to estimate the dynamic connectedness between global FinTech stocks and the stocks of large US banks, regional US banks, US insurance, and global private equity. The findings reveal that FinTech and insurance stocks are net receivers of shocks while large US banks are a major source of shocks. Thus, FinTech stocks are not a source of systemic risk but can be affected by financial contagion and systemic risk originating from large US banks. The highest connectedness was observed at the onset of the COVID-19 lockdowns illustrating the dramatic impact that a health pandemic can have on systemic risk. Systemic risk also increased during the 2023 US bank panic. Connectedness has implications for constructing investment portfolios. The equally weighted, risk parity, and risk parity connectedness portfolios have similar portfolio summary statistics, but lower risk adjusted returns than the maximum Sharpe ratio portfolio which better captures the low correlation between FinTech stocks and traditional financial stocks. These results are robust across various portfolio rebalancing periods (daily, weekly, monthly).

THEORETICAL APPROACHES TO THE ASSESSMENT OF THE FINANCIAL STABILITY OF BANKING INSTITUTIONS

The article considers the essence of the concept of ‘financial stability of a banking institution’. The external and internal factors of influence on the activities of commercial banks in the current socio-economic conditions of Ukraine are identified. It is noted that the leading role in ensuring financial stability belongs to the bank, subject to effective regulation and the use of internal methods to ensure financial stability. The existing methodological approaches to assessing the financial stability of banks used in domestic practice are analysed. It is noted that in order to ensure financial stability, it is necessary to regularly monitor and analyse vulnerabilities and risks of the financial system based on macroeconomic and prudential indicators, as well as to respond to them in a timely manner with appropriate measures. It is determined that the use of integrated approaches and the latest methods, such as econometric modelling, fuzzy set methods and graphical methods, allows obtaining a more detailed and accurate picture of the financial condition of banks and ensuring their effective management. It has been shown that the development and implementation of new methods and improvement of existing tools for analysing financial stability are extremely important for ensuring the stability and development of the banking sector. Effective financial stability management requires the use of modern methods and approaches that allow timely and accurate risk assessment and adaptation to dynamic conditions

Оценка экономического влияния массовых ложных сообщений на сферу торговых центров

The article examines the economic impact of mass false bomb threat calls faced by shopping centers in Russia. The causes, prevalence of this phenomenon, and its impact on shopping center businesses are analyzed. Attention is given to direct and indirect losses, such as lost revenue, evacuation and inspection costs, and decreased trust from tenants and visitors. Estimates of damage to Moscow shopping centers' economy are provided, reaching tens of billions of rubles annually. Mechanisms for minimizing losses and the influence of these events on the sector's stability in a transforming market are discussed.

The mechanism of brand crisis influence on consumer purchase intentions in the context of green development

The promotion of new energy vehicles (NEVs) in China not only provides a pathway for the country to achieve its “dual carbon” strategic goals but also facilitates the transformation and upgrading of the automotive industry, contributing to social development and economic growth. This study examines the influence mechanism of brand crises on consumer purchase intentions within the NEV sector, an area critical to sustainable infrastructure and green development. Using a framework of “brand crisis—consumer negative emotions/perceived risk—consumer purchase intention,” and data from consumer surveys conducted in Beijing, Shanghai, Zhengzhou, and two other locations, the study employs regression models to analyze the relationship between brand crises and purchase intentions. Mediation effect models are used to explore how brand crises impact consumer purchase intentions through negative emotions and perceived risks. The results indicate that brand crises significantly reduce consumers’ willingness to purchase products from affected brands, posing a threat to the market stability and growth of the NEV sector. Moreover, negative emotions and perceived risks mediate the relationship between brand crises and purchase intentions, highlighting the importance of addressing both emotional and cognitive responses in crisis management strategies. To mitigate the adverse effects of brand crises, companies should adopt measures to improve consumer sentiment and reduce perceived risks, such as proactive communication, transparency, and effective recall procedures. Additionally, factors such as NEV performance, price, and charging infrastructure coverage also play a crucial role in consumer purchase decisions. Therefore, companies must consider these factors when formulating crisis response strategies to swiftly regain consumer trust and promote sustainable market and green development. This study contributes to the broader discourse on infrastructure development and public policy by providing insights into how brand crises in the NEV industry can be managed to support sustainable economic growth and development. By understanding the mechanisms through which brand crises affect consumer behavior, this research offers valuable recommendations for policymakers, industry professionals, and academic researchers focused on the interplay between infrastructure, development, and policy.

From innovation to stability: Evaluating the ripple influence of digital payment systems and capital adequacy ratio on a bank’s Z-score

This study investigated the influence of digital payment systems on banks’ stability by exploring their effect on the Z-score of the Jordanian banking sector during the period from 2004 until 2022. It specifically focused on liquidity risks generated from e-payment transactions and how sufficient capital adequacy ratios enhance banking sector stability over both short-term and long-term periods by standing against sudden volatilities yielded from large amounts of transactions executed through digital payment systems. To achieve this objective, the study utilizes time series dual regression analyses of vector autoregression and vector error correction models on E-views 12 to cover the time variation influences of digital payment on the banking sector Z-score. The regression results indicate varied effects between the benefits and risks of digital payment systems on a bank’s Z-score that influence the immediate sector’s stability, indicating that while digital payment systems can initially hold liquidity risks, leading to short-term instability; the strategic implementation of robust capital adequacy ratio stands as a protective buffer by fostering long-term banking sector resilience. The results also suggest future predictions and insights for financial sector legislators and regulators emphasizing the need for monitoring strategies that stimulate continuous innovations in the digital payment infrastructure while constantly ensuring the stability and resilience of the banking sector. Thus, prudent liquidity management and the reinforcement of capital buffers are encouraged to pilot the dual challenges and opportunities that appeared at the stages of the digital payment process, ultimately guiding the sector toward continuous growth and sustainability. AcknowledgmentThe author is grateful to the Middle East University, Amman, Jordan for the financial support granted to cover the publication fee of this research.

Operational risk management, financial sector stability and sustainable development in West Africa

Achieving sustainable development in West Africa is vital for integrating environmental, social and economic well-being in the region. This study examines the impact of operational risk management and financial sector’s stability on sustainable development in West Africa, focusing on countries that are members of the Economic Community of West African States (ECOWAS) from 2015 to 2022. Data from the World Development Indicators (WDI) and country Policy and Institutional Assessment (CPIA) were analyzed using the systems GMM to control for endogeneity. The study found conflicting results for financial sector stability’s impact on adjusted net savings and the sustainable development index. While financial sector stability had a negative effect on adjusted net savings, it had a positive impact on the sustainable development index. Additionally, environmental taxes were found to contribute to sustainable development by promoting efficiency and reducing carbon emissions. In conclusion, addressing operational risks, ensuring financial sector stability and promoting sustainable development can help achieve SDGs 8, 9, and 11, creating a stable, inclusive, and resilient economic environment conducive to long-term growth and sustainability in West Africa.

The Mismatch Between Macroeconomic Stability and Declining Stock Performance of Digital Banks in Indonesia: An Empirical Study of 2022-2023

This study examines the mismatch between macroeconomic stability and the stock performance of digital banks in Indonesia over the period 2022-2023. The results of the analysis show that the USD/IDR exchange rate and Bank Indonesia interest rate have a significant negative effect on stock prices, while inflation shows no significant effect. These findings suggest that despite stable macroeconomic conditions, the share prices of digital banks experienced a significant decline, indicating market inefficiencies. This study makes a theoretical contribution by revealing the role of exchange rate and interest rate fluctuations in influencing the stock performance of digital banks in emerging markets. In conclusion, factors such as investor sentiment, market behavior, and the influence of digital financial technology need to be taken into account in developing strategies to support the stability and growth of the digital banking sector in Indonesia. The results of this study are important for policymakers, regulators, and market participants in dealing with the challenges faced by the digital banking sector in Indonesia. Keywords Digital banking, macroeconomic stability, stock performance, market inefficiency.

Resource dependence and life expectancy in sub-Saharan Africa: Does financial sector stability break the curse?

Natural resource wealth can contribute to human and economic development if the revenues from natural resource sectors are effectively invested by the government. In particular, countries with abundant natural resources have the potential to experience significant development and improvements in their quality of life. This study first examines the impact of natural resource rents on life expectancy in sub-Saharan Africa. We then investigate the moderating role of the financial sector in this relationship. Using mainly the Generalized Moments Method in a panel of 44 Sub-Saharan African countries over the period 1990–2021, the results obtained in this paper reveal a negative effect of natural resource rents on life expectancy, supporting the resource curse-health hypothesis. However, the stability of the financial system moderates this relationship and makes it positive, at specific thresholds. These results are consistent with Hirschman's conjecture that production leakage is low in landlocked countries, but that there are stronger links with public revenues than with other sectors of activity. The ‘wealth channel’ lubricated by the financial sector that this study identifies calls for greater caution when adopting non-rentier policies in countries exploiting their natural wealth, specifically countries with low human capital. We suggest that a portion of resources should be allocated to financing human capital in order to increase life expectancy.

PENGARUH OPASITAS BANK TERHADAP TINGKAT PERTUMBUHAN KREDIT DI MODERASI OLEH VARIABEL KAPITALISASI BANK, WHOLESALE FUNDING, MACROECONOMY CONDITION, DAN KUALITAS KREDIT (Studi Empiris pada Bank Umum Konvensional yang terdaftar di BEI 2018-2022)

This study aims to investigate the effect of bank opacity on loan growth rates by considering the role of bank capitalization variables, wholesale funding, macroeconomic conditions, and credit quality as moderating factors. The empirical study was conducted on Conventional Commercial Banks listed on the Indonesia Stock Exchange (IDX) during the period 2018-2022. The research method uses multiple regression analysis and moderation techniques by utilizing financial and macroeconomic data sourced from bank financial reports in Indonesia. The results of this analysis can provide insight into the impact of bank opacity on loan growth, while explaining the extent to which the variables of bank capitalization, wholesale funding, macroeconomic conditions, and credit quality moderate the relationship. The findings of this study are expected to contribute to the understanding of the factors that influence credit growth in the banking sector, particularly in the context of bank opacity. The practical implications of this study can help regulators, bank management, and other stakeholders to develop appropriate policies to improve the stability and growth of the banking sector. Keywords: bank opacity, loan growth, bank capitalization, wholesale funding, macroeconomic conditions, credit quality.

Impact of Liquidity Risk and Leverage on the Financial Performance of Nigerian Deposit Money Banks

This study investigates the impact of liquidity risk and leverage on the financial performance of listed Deposit Money Banks (DMBs) in Nigeria. The study utilized a census approach to gather data from all 15 listed DMBs on the Nigerian Exchange Group as of December 31, 2022. The study spanned from 2013 to 2022, employing various statistical analyses including descriptive analysis, correlation analysis, skewness and kurtosis tests for normality, multiple regression models for fixed-effects and random-effects models, and the Hausman test to ensure robust findings. The results indicated that liquidity risk exhibited a positive and significant impact on return on equity (ROE), a measure of financial performance, with a coefficient of 0.132 and a p-value of 0.000, suggesting that effective management of liquidity risk enhances profitability. Conversely, leverage was found to have a significant negative impact on ROE, with a coefficient of -1.351 and a p-value of 0.007, highlighting that higher debt levels substantially reduce profitability. In conclusion, the study suggests that while liquidity risk can be effectively managed to enhance profitability, excessive leverage poses significant threats to financial performance. The findings underscore the importance of robust risk management strategies for improving the financial performance of listed DMBs in Nigeria. These insights are crucial for policymakers, banking executives, and investors seeking to enhance the stability and performance of the banking sector.

Lebanon’s Economic Development Risk: Global Factors and Local Realities of the Shadow Economy Amid Financial Crisis

The shadow economy’s size and impact remain subjects of extensive research and debate, holding significant implications for economic policy and social welfare. In Lebanon, the ongoing crisis since 2019 has exacerbated severe economic challenges, with the national currency’s collapse, bank crisis, and foreign reserve deficits. The World Bank reports Lebanon’s financial deficit surpassed $72 billion, three times the GDP in 2021. Despite a drastic decline in GDP, imports have surged to near-pre-crisis levels, exacerbating economic woes and indicating a constant outflow of foreign currencies. Considering such contracting facts, this paper aims to investigate global factors influencing the shadow economy and discern their manifestations in Lebanon during financial crises. Our methodology involves a comprehensive literature review, alongside a case study approach specific to Lebanon. This dual-method strategy ensures a detailed understanding of the shadow economy’s impact and the development of actionable insights for policy and economic reform. Through this approach, we seek to contribute to a nuanced understanding of Lebanon’s economic landscape and provide valuable guidance for policy decisions aimed at reducing corruption, promoting transparency, and fostering a robust formal economy. The increase in the shadow economy raises the formal economy risk, as resources and activities diverted to informal channels hinder the growth and stability of the official economic sector. Although focusing on Lebanon, this analysis deepens the comprehension of the economic landscape and provides valuable guidance for policymakers, researchers, and stakeholders, aiming to address the root causes of informal economic activities and promote sustainable growth in developing countries in general.

Does banking consolidation improve bank stability? Evidence from Sub-Saharan Africa

PurposeThis study aims to investigate the influence of banking consolidations on bank stability in Sub-Saharan African (SSA) countries for the period 2003–2019, following a series of bank mergers and acquisitions (M&As) in the region and whether regulation-induced bank M&As affect banking sector stability.Design/methodology/approachThe fixed effect panel regression model is used to understand the influence of regulation-induced and voluntary bank mergers and acquisitions on banking stability in SSA. The study also controlled for bank-specific factors, market concentration and macroeconomic variables that affect banking stability. The study used three measures of bank stability: the Z-score, risk-adjusted return on assets and risk-adjusted bank capital.FindingsThe study results reveal that voluntary bank M&As, market concentration, net interest margin, bank capital, bank deposits and income diversification influence banking sector stability positively. However, the findings show that regulation-induced bank mergers and acquisitions impact banking stability negatively. Where bank M&As were a result of banking regulatory reforms, called regulation-induced mergers and acquisitions (RIM&As), banking stability suffered, but voluntary bank M&As improved banking stability. Again, the study supports the concentration–stability argument rather than the competition–stability hypothesis. Therefore, more concentrated banking markets in SSA countries have more stable banks and fewer risks of system-wide bank failures. Other factors influencing banking stability in SSA are return on equity, bank efficiency (cost-to-income), bank size and deposits-to-assets ratio. However, their relationship is negative with the stability of the banking sector.Practical implicationsThe findings imply that the regulatory authorities should encourage voluntary bank M&As and not regulation-induced bank M&As to improve the stability of the banking systems in SSA.Originality/valueThe study provides new evidence on the effects of regulation-induced bank M&As on the stability of banks.

Dampak Kinerja Keuangan terhadap Profitabilitas Bank Syariah: Analisis Perbandingan Bank Syariah di Indonesia dan Malaysia

This study aims to analyze the effect of financial performance on the profitability of Islamic banks in Indonesia and Malaysia, using the Partial Least Squares Structural Equation Modeling (PLS-SEM) approach and secondary data from 2019 to 2023. The results showed that asset quality, as measured by Net Performing Financing, proved to have a significant influence on profitability, with the coefficient value of Islamic banks in Indonesia is 0.035 and in Malaysia is 0.05. While other factors do not have a significant effect on profitability. This shows that both Islamic banks are very vulnerable to the quality of financing. Based on the results of this study, it is expected that stakeholders, such as Islamic banks and the government, can take concrete steps to improve the profitability and stability of the Islamic banking sector. Islamic banks are expected to focus on improving asset quality, managing credit risk better, and developing effective risk management strategies. Keywords: Financial performance; Profitability; Islamic banks; Indonesia; Malaysia; PLS-SEM.