Issue #1 (Volume 19 2024)

An important factor in increasing public trust in banks is to show bank performance, so it is necessary to know the factors that influence bank performance. Therefore, it is important to attract the attention of bank management. This study aims to determine the factors influencing bank performance by using social responsibility as a moderating variable. This study involved 20 banks in Indonesia and used a quantitative approach. Secondary data sources were used for data collection and analyzed using a regression equation model. The results show that non-performing loans and bank size have no effect on bank performance. Meanwhile, loan-to-deposit ratio and corporate social responsibility have a positive effect at the 1% significance level. The results of testing the moderation effect obtained t-statistic values of –0.365 and –4.269. These results show that social responsibility has a negative effect, does not moderate the relationship between non-performing loans and bank performance, but has a negative effect, moderating the relationship between the loan-to-deposit ratio and bank performance. These findings have policy implications for bank performance through the implementation of corporate social responsibility policies.

Acknowledgments
The authors would like to thank the DPPMP of Stikubank University for supporting the funding of this research. Thanks also to the NGEJUS - FEB Unisbank team who helped provide the facilities needed for this study.

Fraud and financial crimes involving banking employees have become serious and complex problems throughout the world, including Indonesia. This study aimed to analyze a fraud prevention through anti-fraud strategy and modified situational crime prevention theory. Data were obtained using a questionnaire distributed and interviewed to accounting officers, marketing departments, customer services, tellers, operational supervisors and risk management of banks in Indonesia. Respondent filled in 217 questionnaires completely. The data analysis technique used is a path analysis technique with the WarpPLS. The results show that anti-fraud strategies have a positive effect on fraud prevention. Banking in Indonesia has succeeded in implementing anti-fraud strategy through a whistleblowing policy, which focuses on efforts to protect whistleblowers and disclose potential fraud, compliance with the implementation of internal controls in activity units, and the proper functioning of risk management. The modified situational crime prevention theory also has a positive effect, and religiosity is a moderating variable. The results have also informed that banks have attempted to create conditions and awareness for perpetrators that the benefits of fraud are less and not commensurate with the high risks borne, and narrowing opportunities and providing strict sanctions to perpetrators can prevent fraud.

This empirical study aims to explore the factors that impact job satisfaction among employees in private banks in Bangladesh, considering the prevailing atmosphere of intense competition in the country’s banking sector. Recognizing that employees are a crucial asset to any organization’s success, it is essential to explore the variables that contribute to their work contentment. The methodology adopted for this study follows a quantitative approach, employing regression analysis for scrutinizing the relationships between job satisfaction and selected variables. This study included a sample of 320 individuals employed in private banks in Bangladesh. This sample size was considered suitable for conducting a robust quantitative regression analysis. To collect the necessary data, the questionnaire was given to the bank personnel and employees via their email addresses. The survey instrument utilized in this investigation was modified from earlier research endeavors to ensure validity and reliability. To analyze the collected data, the researchers utilized the statistical software SPSS version 29.0. The regression analysis feature of SPSS was employed to test the model and hypotheses formulated for this study. The findings of the study reveal that green HR practices
(β = 0.284), which encompass environmentally friendly policies and practices in human resource management, significantly contribute to employee job satisfaction. Additionally, remuneration (β = 0.224) emerges as another vital factor influencing job satisfaction. Furthermore, work environment (β = 0.298) was found to have a significant positive and highest effect among other two variables on job satisfaction levels.

This study examines the level of knowledge, use, and determinants determining the adoption of Apple Pay among Generation Z customers in Vietnam. An online survey with 339 participants aged 18-26 was done using quantitative methods. The participants were recruited using social media platforms. The study model included elements from technological acceptance theories, such as effort expectation, perceived risk, perceived value, and convenience. The measurements were ensured to be reliable and genuine. The hypotheses were tested by analyzing the data using partial least squares structural equation modeling. The study’s results suggest that the data collected through PLS-SEM analysis provide evidence in support of the hypotheses proposing that factors such as Mobile User Skillfulness, Personal Innovation, Perceived Usefulness, Effort Expectation, Convenience, and Perceived Value have a positive influence on individuals’ Intentions to Use Apple Pay in Vietnam. Furthermore, the study revealed that the variables of Perceived Risk and Social Image did not have a statistically significant influence. The findings suggest that the pragmatic orientation of Generation Z towards the functionality and ease of use of Apple Pay has a significant impact on their adoption of this payment system in Vietnam. The study offers banks in Vietnam significant insights regarding the promotion of mobile wallet adoption among the younger demographic. Adoption may be increased by presenting Apple Pay as a practical and convenient application.

Acknowledgment
The author would like to thank everyone who filled out the survey. Without the help of everyone involved and the Ho Chi Minh University of Banking (Vietnam), this study would not have been possible. 

This study examines the role of a bank’s cost efficiency and competition when creating liquidity. It also investigates the different abilities to create liquidity between conventional banks and Islamic banks. This study employs data from annual reports for 117 banks, including 103 conventional banks and 14 Islamic banks from the Association of Southeast Asian Nations 4 (ASEAN-4). Using the dynamic panel regression with the GMM system, this study finds that cost-efficient banks have a higher ability to create liquidity, while high banking competition deteriorates that ability. However, these effects decrease as banks manage their costs more efficiently. The findings imply that banks’ ability to create liquidity is impacted by their market power to win the competition. Additionally, this study found that Islamic banks create more liquidity than conventional banks. This phenomenon indicates that by being more focused on activities using on-balance sheet items, Islamic banks are spared from risky off-balance sheet commitments. Furthermore, efficient banks are more able to generate liquidity in competitive markets.

The Unified Payments Interface (UPI) represents a revolutionary advancement in mobile payment systems and has been primarily embraced by the middle and high-income segments of the Indian population. Its uptake among the low-income or those at the bottom-of-the-pyramid (BOP), characterized by individuals with an annual income less than USD 3,175, remains notably low, necessitating prompt investigation. This study endeavors to explore and validate contextual determinants influencing the development of behavioral intention to use UPI among BOP users. Under the mixed method approach, 26 interviews with active UPI users were conducted in the first phase. The collected data were subjected to deductive thematic analysis and the resulting factors were fused with the Extended Unified Theory of Acceptance and Use of Technology (UTAUT2) model to adapt it to the BOP requirements. In the second phase, responses from 423 potential UPI users were collected and scrutinized using structural equation modelling. The data analysis unveiled that the path coefficients for social influence (0.527), performance expectancy (0.242), perceived security risk (–0.166), knowledge (0.138), price value (0.123), facilitating conditions (0.119), and social benefits (0.096) were statistically significant in impacting user intentions. The model fit measures of the structural model fell within an acceptable range, and collectively, these factors elucidated 52% of the variance in behavioral intentions. It is recommended that marketers should leverage the interconnected nature of BOP communities to enhance awareness on functionality, subjective utility, social benefits, word-of-mouth, and security issues. This strategy aims to overcome barriers and boost UPI adoption among the BOP.

The independence of the central bank is one of the most important factors for effective monetary policy. Central bank independence is closely related to monetary stability, which is an important part of monetary policy. In this study, the purpose of the analysis is to understand whether monetary stability functions effectively for central bank independence in Azerbaijan using the vector autoregression method. In addition, the Granger Causality test was conducted to empirically investigate how central bank independence affects the provision of monetary stability in the economy of Azerbaijan over the data period from 1996 to 2022. In this framework, indices or variables are the exchange rate stability index (ERS) in 1996–2022, the level of monetary independence index (MI) in 1996–2020, taken from the “trilemma indexes”, which are defined as the consumer price index (CPI) in 1996–2022, and the broad money supply (M2) in 1996–2022. The findings of the study show that the independence of the central bank has a positive effect on the monetary stability of the Azerbaijani economy.

The aim of this study is to assess the viability of SMEs that had benefited from bank loans backed by credit guarantee schemes. A quantitative approach has been adopted by the study. The sample comprised 398 Moroccan SMEs that had benefited from this type of financing, and the primary objective was to examine their survival over the ten years following the obtaining of these guarantees. Logistic regression was used to reflect several results. The results of the study highlight several factors influencing the probability of survival of these SMEs. Larger amounts of credit promote financial resilience and growth, thereby increasing the likelihood of business survival. Business profitability is a key factor in the likelihood of survival. Profitable businesses attract more investors and lenders, improving access to credit and increasing survival prospects. Contrary to some studies, high levels of debt do not appear to reduce the probability of survival. Similarly, repayment capacity showed no significant link with survival, suggesting the importance of other non-financial factors. Mature and well-considered management decision making is associated with a higher probability of survival. Well-thought-out decisions promote the long-term viability of businesses. Small SMEs also have a good chance of survival because of their rapid adaptability. A manager’s active participation in a company’s capital is linked to a higher probability of survival. This underlines the importance of the personal involvement of the manager and of solid governance.

The importance of the study stems from the fact that Iraq’s economy is facing a housing crisis, especially in the Iraqi capital, Baghdad, great demographic pressure due to pronounced population growth over the past two decades. The Central Bank of Iraq undertakes several initiatives represented in granting real estate loans, mainly through the Real Estate Bank at very low interest, and in the last two years, the interest has become zero. The purpose of the study is to analyze the fiscal implications of the Iraqi central bank’s real estate initiatives, as well as its real impact on the spatial dimension of the Iraqi governorates through new housing in those governorates. Using data mainly from the Central Bank of Iraq’s bulletins, the study obtained a 6-year sample of study variables for 15 Iraqi governorates. Multiple Correspondence Analysis (MCA) was used to test such repercussions. One of the study’s findings is that the greatest impact of the Iraqi central bank’s real estate initiative was the fiscal and real repercussions for the year 2021, and the highest relative impact was in Baghdad governorate, with fiscal and real returns distinct from the rest of the governorates. One of the conclusions reached is that the strength of the fiscal repercussion was more important, more significant, and stronger than the real impact of the initiatives of the Central Bank of Iraq. Similarly, it was concluded that Baghdad was the first governorate that benefited from the effects of the initiative.

The global economy has fostered a dynamic environment of economic globalization, leading to amplified interconnectedness, integration, and worldwide influence in both commercial transactions and monetary activities. This occurrence emphasizes the vital role of liberalizing capital and international trade in economic discussions, particularly in emerging economies where banking-centric systems wield considerable influence. The objective of this study is to investigate the correlation between trade liberalization and financial inclusivity, specifically concerning the resilience of the banking industry in developing nations throughout the period of 2010–2020. Utilizing the dynamic data model of Arellano-Bond’s Generalized Method of Moment Estimator, this study yields a significant revelation. The interaction between trade openness and financial transparency exerts a noticeable and advantageous impact on banking stability, with each 1% increase in openness resulting in a remarkable improvement of 98.9445 in Net Interest Margin, 116.2575 in Z score, and 119.9189 in Non-Performing Loans. Consequently, this investigation confirms the presence of a diversification effect on stability while concurrently applying the concept of voltage fragility. In essence, trade openness propels the banking sector toward heightened competitiveness due to increased demand from local businesses, while financial openness fosters heightened competition within the credit market.

Digital transformation refers to strategic activities undertaken by organizations to improve and simplify their process and even alter their business models with abreast to enhance firm performance. Thus, the aim of this study was to analyze the impact of digital transformation on organizational performance among the Jordanian commercial banks listed on the Amman Stock Exchange. The descriptive research design was used in this quantitative study. Primary data were collected to achieve the objectives of the study. The target population was employees (managers and non-managers) of Jordanian commercial banks listed on the Amman Stock Exchange. The sample size was selected using Krejcie and Morgan rule; after data cleaning procedures, the final sample of 282 respondents was used for final analysis. The study employed regression analysis to arrive at the results. The results confirm that digital transformation has a significant positive effect on customer experience and IT innovation. These results were significant at a 1% level. The results also confirm that digital transformation has a significant positive effect on firm performance, with a significance level of 1%. Moreover, the significant positive impact of customer experience and IT innovation was confirmed. Therefore, the significant positive impact of digital transformation on firm performance was found viz-a-viz direct as well as indirect route.

The paper is devoted to an under-researched topic of the international business community’s reaction to russia’s armed aggression against Ukraine. It aims to evaluate how G7 and EU financial sanctions, institutional pressure, ESG ratings, and asset value of multinational banks in russia influence their decisions to reduce activities in the invading country. The study used the Yale CELI database of companies leaving and staying in Russia for the classification tree method. The results show that none of the banks headquartered in G7 and EU member states that had no or relatively little assets in russia before the invasion are doing business there on a pre-war scale. Unlike banks headquartered in other countries, most either curtailed their presence in that market or exited the market. This indicates that financial sanctions imposed by G7 and EU member states and institutional pressure on banks in these countries to withdraw from the russian market have proven effective to a certain extent. However, these factors do not meaningfully influence the business of multinational banks with significant assets in russia. The study has not confirmed the hypothesis that a bank with higher ESG ratings is more likely to curtail its operations in the market of an aggressor country and withdraw. However, nearly all banks that scaled back significant activities or even pulled out of russia have better ESG indicators than the industry average. The results suggest the feasibility of improving the methodologies of ESG rating providers for accurately measuring business reactions to aggression and war crimes.

Most developed and emerging economies pay substantial attention to liquidity to understand stock return behavior. However, there is a need for more focus on understanding the impact of such factors on stock returns in developing countries such as Nepal. This study aims to examine the effect of liquidity, size, financial and asset risk, growth potential, and profitability on stock returns in Nepalese commercial banks. A pooled ordinary least squares regression model is utilized, employing data from the Central Bank of Nepal and the Nepal Stock Exchange. There are 249 observations in the data set, which covers the period from 2009/10 to 2019/20. The model considers the impact of trading volume, market capitalization, book-to-market ratio, asset growth, and return on asset on stock returns in Nepalese commercial banks. The results indicate that trading volume, a proxy of liquidity, positively affects stock returns in Nepalese commercial banks. The finding reveals that when other variables are held constant, a 0.288 percent increase in stock returns is expected for a one percent rise in trading volume. However, asset growth and return on assets show a weakly favorable link with stock returns in Nepal. Conversely, the research findings suggest an insignificant inverse correlation between book-to-market and stock returns. A decrease in stock returns of 0.307 percent is expected for a one percent increase in the book-to-market ratio. Similarly, market capitalization has a negligible effect on stock returns in Nepal.

This study aims to assess the impact of regulatory compliance on the effectiveness of risk management and the financial performance of Kazakhstan’s banking sector. Applying Structural Equation Modeling (SEM), the study examines data from Kazakhstani banking institutions, revealing the direct and mediated impacts of regulatory compliance on financial performance, with risk management efficacy as a key intermediary. The analysis identifies a significant direct relationship between regulatory compliance and risk management efficacy (coefficient: 0.45, p-value: < 0.001), suggesting that compliance efforts substantially bolster risk management capabilities. The impact of risk management efficacy on financial performance is also notable (coefficient: 0.35, p-value: < 0.001), confirming its crucial role in financial success. Additionally, a direct, though less pronounced, influence of regulatory compliance on financial performance is observed (coefficient: 0.20, p-value: 0.004). The model’s explanatory power is reflected in an R-squared value of 0.248, indicating that it accounts for approximately 24.8% of the variability in financial performance. These findings underline the critical role of regulatory adherence and effective risk management in ensuring financial success, offering strategic insights for banking operations in Kazakhstan.

Bank financing decisions by small and medium-sized enterprises (SMEs) are crucial to their growth and survival, particularly in emerging economies such as Morocco. This study aims to assess the impact of behavioral biases on these decisions, an area little explored in the existing financial literature. The main objective is to analyze how behavioral biases such as overconfidence, risk aversion, confirmation bias, anchoring, and managerial myopia biases influence bank financing decisions of Moroccan SMEs. The approach adopted is quantitative and uses robust least squares regression to analyze data collected from 167 Moroccan SMEs. The results reveal that overconfidence and anchoring have a significant positive impact on the propensity to take out bank loans, while risk aversion and confirmation bias have a negative effect. Managerial myopia had no significant influence. Control variables such as past financial performance, the length of the banking relationship, and lower risk also positively influence the financing decision.

Board diversity is crucial for corporate governance and improves corporate outcomes by aligning management with stakeholders’ interests. Compared to advanced environments, Jordan’s decent sociocultural backdrop exhibits a higher level of gender bias. This study investigates the influence of board gender diversity (BGD) on Jordanian banking sector performance, an under-explored area. This quantitative paper employs Ordinary Least Squares (OLS), random, and fixed-effect approaches to analyze 182 bank-year observations for balanced longitudinal data analysis. These approaches correctly establish the BGD-Tobin’s Q nexus during 2010–2022. The coefficient of determination was 70.57%. The model confirms a positive correlation between BGD and market-based performance indicators. Findings support agency and resource dependency hypotheses, showing BGD’s role in decision-making. Hence, a one-unit increase in BGD causes a 37.2-cent increase in Tobin’s Q measure. Moreover, a one-unit change in board independence, board meetings, size, women’s representation in top management, and capital adequacy ratio, assuming all other factors remain constant, results in Tobin-Q changes of 2.57 cents, 32.8 cents, 5.78 cents, 51.2 cents, 30.55 cents, and 22.86 cents, respectively, and the same direction. The results show how BGD enhances bank performance and contributes to relevant theories. The results are vigorous in a variety of identification and estimation methodologies.

This study delves into the influence of Peer-to-Peer (P2P) Fintech lending on bank performance in Indonesia, with a specific focus on its effects on Islamic banks both before and during the COVID-19 pandemic. Employing a fixed-effects model, unbalanced panel data from 121 banks, including 16 Islamic banks, were analyzed. The findings unveil a significant and positive impact of growth loan disbursement to borrowers from P2P lending on bank performance, particularly in terms of return on assets. Additionally, Islamic Banks exhibit a significant and favorable effect on overall bank performance. Conversely, the joint interaction between P2P lending and Islamic Banks demonstrates a negative and significant influence on Islamic bank performance, suggesting that while P2P lending may benefit conventional banks, it adversely affects Islamic banks. Furthermore, this negative impact is exacerbated during the COVID-19 period. These outcomes underscore the importance of collaboration or strategic alliances between P2P lending platforms and Islamic banks, particularly in the context of the COVID-19 pandemic.

Environmental, social, and governance (ESG) disclosure becomes vital for banks to be transparent and accountable for their investments and lending decisions to shareholders, regulators, and society. The potential enhancement of shareholder value through ESG disclosure is still inconsistent. Empirical studies on the association between ESG disclosure and financial performance are mixed and limited in emerging economies. This study aims to examine whether ESG disclosure impacts the financial performance of 24 Vietnamese commercial banks in terms of return on assets (ROA), return on equity (ROE), and net interest margin (NIM). The study uses the feasible generalized least squares estimation method based on panel data from 2018 to 2022. The study employs content analysis on 12 themes related to environmental, social, and governance pillars to score policy disclosure based on the Fair Finance Guide Methodology. The results highlight the positive effects of ESG policy disclosure, individual environment disclosure (E), and individual governance disclosure (G) on bank financial performance. Notably, ESG, E, and G have the largest influence on ROE, with coefficients of 0.051, 0.036, and 0.027, respectively, at a 5% significance level. However, the study does not provide evidence of a statistically significant association between social disclosure and financial performance. These results provide empirical evidence for regulators and bank managers to shape ESG policies and practices aligning with international standards.

Acknowledgment
ESG disclosure score of 11 banks as primary data in this study is conducted under the project coordinated by the Fair Finance Vietnam coalition, as part of Fair Finance International.

This study analyzes the effect of internal factors of bank performance on deposit flows, considering the changes in the stock market conditions in Ghana. A panel dataset covering 2007 to 2021 of 18 banks in Ghana is applied in a dynamic panel model for the analysis. The results show that the lagged deposit growth exerts an impressive influence of 0.68 percent on the future deposit flows of banks, thus positing a favorable implication for their trading momentum. Also, liquidity was found to have a negative relationship of –0.64 percent with deposit growth. This implies that the holding of excess liquidity diminishes investors’ confidence in a bank’s ability to generate more revenue to enhance the value of their funds, as high liquidity ratios reduce the bank’s capacity to grant more loans for profit. Furthermore, the analysis revealed a positive effect of 1.93 percent by expenditure on deposit growth, which suggests that depositors recognize a rise in operational costs as an indication of a bank’s potential for growth and rapid expansion. Moreover, the analysis found the existence of a negative effect of –0.88 percent by the stock market conditions on deposit growth, which implies that bullish market conditions reduce bank deposits. This verifies that the determinants of deposit flows adapt to the changes in market conditions. Policy strategies should include non-performance metrics such as an increase in the interest paid on customers’ deposits, product promotions, and targeted advertisements to sustain the inflow of depositors’ funds under changing market conditions.