The Determinants of Non-Performing Loans in the Indonesian Banking Industry: An Asymmetric Approach Before and During the Pandemic Crisis
The outbreak has created an unprecedented crisis that influences macroeconomic variables. These circumstances are predicted to be contagious for banking performance. To understand the related influences, this study attempts to examine the asymmetric relationship between macroeconomic variables and n...
| Main Authors: | , , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
SAGE Publishing
2022-06-01
|
| Series: | SAGE Open |
| Online Access: | https://doi.org/10.1177/21582440221102421 |
| _version_ | 1811247882349576192 |
|---|---|
| author | Faaza Fakhrunnas Rindang Nuri Isnaini Nugrohowati Razali Haron Mohammad Bekti Hendrie Anto |
| author_facet | Faaza Fakhrunnas Rindang Nuri Isnaini Nugrohowati Razali Haron Mohammad Bekti Hendrie Anto |
| author_sort | Faaza Fakhrunnas |
| collection | DOAJ |
| description | The outbreak has created an unprecedented crisis that influences macroeconomic variables. These circumstances are predicted to be contagious for banking performance. To understand the related influences, this study attempts to examine the asymmetric relationship between macroeconomic variables and non-performing loans/financing of the Indonesian banking industry before and during the COVID-19 pandemic. The nonlinear autoregressive distributed lag (NARDL) is adopted based on the time-series data from 2005Q1 to 2021Q1. The study provides evidence that an asymmetric relationship between macroeconomic variables and the banks’ non-performing loans/financing exists both before and during the pandemic. In addition, asymmetric relationships of macroeconomic variables on Islamic banks are more prominent before the pandemic even though it occurs inversely during the pandemic. As for policy implication, the financial authority needs to be prudent in implementing financial policies due to the presence of an asymmetric relationship between macroeconomic variables and the banks’ non-performing loans/financing. Moreover, the authority must ensure that all financial policies will be effective to all types of banks regardless of conventional or Islamic banks. |
| first_indexed | 2024-04-12T15:17:18Z |
| format | Article |
| id | doaj.art-38f23e7672b943fda08da48414580145 |
| institution | Directory Open Access Journal |
| issn | 2158-2440 |
| language | English |
| last_indexed | 2024-04-12T15:17:18Z |
| publishDate | 2022-06-01 |
| publisher | SAGE Publishing |
| record_format | Article |
| series | SAGE Open |
| spelling | doaj.art-38f23e7672b943fda08da484145801452022-12-22T03:27:35ZengSAGE PublishingSAGE Open2158-24402022-06-011210.1177/21582440221102421The Determinants of Non-Performing Loans in the Indonesian Banking Industry: An Asymmetric Approach Before and During the Pandemic CrisisFaaza Fakhrunnas0Rindang Nuri Isnaini Nugrohowati1Razali Haron2Mohammad Bekti Hendrie Anto3Universitas Islam Indonesia, Yogyakarta, IndonesiaUniversitas Islam Indonesia, Yogyakarta, IndonesiaIIUM Institute of Islamic Banking and Finance, Kuala Lumpur, MalaysiaUniversitas Islam Indonesia, Yogyakarta, IndonesiaThe outbreak has created an unprecedented crisis that influences macroeconomic variables. These circumstances are predicted to be contagious for banking performance. To understand the related influences, this study attempts to examine the asymmetric relationship between macroeconomic variables and non-performing loans/financing of the Indonesian banking industry before and during the COVID-19 pandemic. The nonlinear autoregressive distributed lag (NARDL) is adopted based on the time-series data from 2005Q1 to 2021Q1. The study provides evidence that an asymmetric relationship between macroeconomic variables and the banks’ non-performing loans/financing exists both before and during the pandemic. In addition, asymmetric relationships of macroeconomic variables on Islamic banks are more prominent before the pandemic even though it occurs inversely during the pandemic. As for policy implication, the financial authority needs to be prudent in implementing financial policies due to the presence of an asymmetric relationship between macroeconomic variables and the banks’ non-performing loans/financing. Moreover, the authority must ensure that all financial policies will be effective to all types of banks regardless of conventional or Islamic banks.https://doi.org/10.1177/21582440221102421 |
| spellingShingle | Faaza Fakhrunnas Rindang Nuri Isnaini Nugrohowati Razali Haron Mohammad Bekti Hendrie Anto The Determinants of Non-Performing Loans in the Indonesian Banking Industry: An Asymmetric Approach Before and During the Pandemic Crisis SAGE Open |
| title | The Determinants of Non-Performing Loans in the Indonesian Banking Industry: An Asymmetric Approach Before and During the Pandemic Crisis |
| title_full | The Determinants of Non-Performing Loans in the Indonesian Banking Industry: An Asymmetric Approach Before and During the Pandemic Crisis |
| title_fullStr | The Determinants of Non-Performing Loans in the Indonesian Banking Industry: An Asymmetric Approach Before and During the Pandemic Crisis |
| title_full_unstemmed | The Determinants of Non-Performing Loans in the Indonesian Banking Industry: An Asymmetric Approach Before and During the Pandemic Crisis |
| title_short | The Determinants of Non-Performing Loans in the Indonesian Banking Industry: An Asymmetric Approach Before and During the Pandemic Crisis |
| title_sort | determinants of non performing loans in the indonesian banking industry an asymmetric approach before and during the pandemic crisis |
| url | https://doi.org/10.1177/21582440221102421 |
| work_keys_str_mv | AT faazafakhrunnas thedeterminantsofnonperformingloansintheindonesianbankingindustryanasymmetricapproachbeforeandduringthepandemiccrisis AT rindangnuriisnaininugrohowati thedeterminantsofnonperformingloansintheindonesianbankingindustryanasymmetricapproachbeforeandduringthepandemiccrisis AT razaliharon thedeterminantsofnonperformingloansintheindonesianbankingindustryanasymmetricapproachbeforeandduringthepandemiccrisis AT mohammadbektihendrieanto thedeterminantsofnonperformingloansintheindonesianbankingindustryanasymmetricapproachbeforeandduringthepandemiccrisis AT faazafakhrunnas determinantsofnonperformingloansintheindonesianbankingindustryanasymmetricapproachbeforeandduringthepandemiccrisis AT rindangnuriisnaininugrohowati determinantsofnonperformingloansintheindonesianbankingindustryanasymmetricapproachbeforeandduringthepandemiccrisis AT razaliharon determinantsofnonperformingloansintheindonesianbankingindustryanasymmetricapproachbeforeandduringthepandemiccrisis AT mohammadbektihendrieanto determinantsofnonperformingloansintheindonesianbankingindustryanasymmetricapproachbeforeandduringthepandemiccrisis |