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Jurnal Ekonomi Malaysia

54 (2) 2020 41 – 51

Prediction Models for Bank Failure: ASEAN Countries
Model Jangkaan ke atas Kegagalan Bank: Negara-negara ASEAN)

Faculty of Economics
Airlangga University
Jl. Airlangga 4 Surabaya 60115
INDONESIA

anggi@perbanas.ac.id

STIE Perbanas Surabaya
Jl. Nginden Semolo 36 Surabaya 60118
Ikatan Sarjana ekonomi Indonesia
Jl. Daksa IV/ 9
Kebayoran Baru
Jakarta 12110
INDONESIA

mongide@perbanas.ac.id

STIE Perbanas Surabaya
Jl. Nginden Semolo 36 Surabaya 60118
INDONESIA

suhartono_12@yahoo.com

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 failure; Bank performance; early warning; logistic regression

Author’s Acknowledgement

Research Grant from the Ministry of Higher Education and Technology Contract No. 5171/Pk.20300/04/19 is highly appreciated. Support from The Indonesia
Economist Association (ISEI) to represent Indonesia during the 44th FAEA (Federation of ASEAN Economist Association) Conference in Singapore 28-30 November 2019 is also acknowledged.

http://dx.doi.org/10.17576/JEM-2020-5402-4
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Anggraeni, , Mongid, , & Suhartono, (2020). Prediction Models for Bank Failure: ASEAN Countries. Jurnal Ekonomi Malaysia, 54(2), 41–51. http://dx.doi.org/10.17576/JEM-2020-5402-4

@article{anggraeni2020prediction,
  title={Prediction Models for Bank Failure: ASEAN Countries},
  author={Anggraeni, Anggraeni and Mongid, Abdul and Suhartono, },
  journal={Jurnal Ekonomi Malaysia},
  volume={54},
  number={2},
  pages={41—51},
 

year={2020},
}

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