Issue #1 (Volume 21 2026)

Type of the article: Research Article

Abstract
The study examines the impact of liquidity risk and operational risk on the financial stability in both commercial and Islamic banks in Jordan. The study utilizes secondary data covering a period of ten years, from 2012 to 2022, as it offers a holistic and uninterrupted period that includes the key regulatory, economic, and structural changes in Jordan’s banking sector. The study employs panel data analysis to assess these relationships. Liquidity risks are measured using the cash-to-asset ratio and the liabilities-to-deposit ratio, while operational risks are assessed through two indicators: the operational cost-to-income ratio and the operational cost-to-total-assets ratio. The findings reveal that the liabilities-to-deposit ratio, as represented by liquidity risk, and the operating cost-to-income ratio, as represented by operational risks, have significant negative impacts on the financial stability of conventional banks, which emphasizes the need for effective cost and liquidity management. In Islamic banks, financial stability improves significantly due to liquidity indicators: higher liabilities-to-deposit ratios and cash-to-asset ratios, highlighting how essential liquidity is. The operational risk indicators have no impact on Islamic banks. Moreover, control variables such as return on assets (ROA) positively influence stability in conventional and Islamic banks. However, the stability of conventional and Islamic banks faces negative influences from their size, which indicates that bigger banks could become exposed to operational risks and financial vulnerabilities. The research demonstrates that financial stability elements operate differently between conventional and Islamic banking systems. Financial institutions, together with governments, need to establish solutions to fill these gaps.

Type of the article: Research Article

Abstract
The balance between stability and profitability in banking systems has gained renewed urgency as rising interest rates, persistent inflation, and credit risks reshape the global financial landscape. Regulators, such as the IMF, ECB, and OECD, emphasize that while robust capital buffers are indispensable for resilience, excessive capitalization may constrain lending. In contrast, weak asset quality undermines returns regardless of capital strength. Against this backdrop, this article aims to explore how capital adequacy and asset quality jointly influence bank profitability. The analysis uses IMF Financial Soundness Indicators for 133 countries over 2010–2024 and applies two-way fixed-effects panel regressions with Driscoll-Kraay robust inference. The results reveal a consistently concave relationship: Tier 1 capital to assets is positively related to return on assets (ROA) with diminishing returns, though the turning point lies at an implausible 161.7%. In contrast, Tier 1 capital to risk-weighted assets shows an economically plausible peak around 26.3%, with gains tapering beyond that level. Within typical ranges (15-20% RWA), a one percentage point increase in capital is associated with a 0.06-0.03-point rise in ROA, but additional accumulation yields little benefit. Asset quality exerts a strong negative influence, with a 1-point increase in non-performing loans lowering ROA by 0.04-0.05 points, while liquidity remains statistically insignificant. These findings highlight that capital deepening contributes to profitability only up to moderate levels, and that poor asset quality can offset the benefits of stronger capital buffers, underscoring the need for integrated regulatory approaches to stability and performance.

Type of the article: Research Article

Abstract
The integration of artificial intelligence-driven predictive analytics has redefined financial management and decision-making across Gulf economies. This study compares the performance of artificial-intelligence-based and traditional predictive models using data from twenty financial institutions from six Gulf Cooperation Council countries. A quantitative cross-sectional design was adopted, and analysis of variance revealed statistically significant differences (p < 0.001) across all indicators. Predictive accuracy increased from 83.5 to 91.5 per cent (F = 4.23 × 10²⁹), operational efficiency from 12 to 19.5 per cent (F = 1.31 × 10³¹), risk-management effectiveness from 7.0 to 9.3 points (F = 2.69 × 10³⁰), and customer satisfaction from 6.5 to 8.5 points (F = 1.69 × 10³⁰). Regression analyses confirmed these outcomes: model type produced significant coefficients for predictive accuracy (β = 8.21, p < 0.001), operational efficiency (β = 7.46, p < 0.001), risk-management effectiveness (β = 2.29, p < 0.001), and customer satisfaction (β = 1.84, p < 0.001). The overall model explained 84 per cent (R² = 0.84) of the variation in institutional performance, confirming the strong predictive power of artificial-intelligence models. These results demonstrate that intelligent predictive systems significantly enhance accuracy, efficiency, and stakeholder value. The study concludes that transparent and ethically governed analytical frameworks are essential for sustainable financial competitiveness and responsible innovation in the Gulf region.

Type of the article: Research Article

Abstract
In bank-dependent economies, the structure and cost of corporate debt are crucial determinants of financial sustainability and investment decisions. Vietnam, with its underdeveloped capital market and dominance of bank lending, presents an ideal context to examine how banking market structure influences corporate financing. This paper explores the critical role of bank concentration in shaping the maturity structure and cost of debt among 520 listed Vietnamese firms during 2010–2024. The study utilizes financial data from FiinPro, including firm-level, bank-level, and macroeconomic indicators. A dynamic panel data model is estimated using the two-step system generalized method of moments (GMM) approach to address endogeneity concerns and ensure the robustness of results. The results highlight the pivotal role of bank concentration in shaping both the maturity structure and cost of corporate debt. The empirical findings reveal that higher bank concentration significantly increases the proportion of long-term debt. At the same time, firms reduce their reliance on short-term financing, indicating a shift toward more stable financial structures. Moreover, firms operating in more concentrated banking environments benefit from lower borrowing costs.

Acknowledgment
This research forms a component of Thi Hong Nhung Nguyen’s doctoral dissertation at Ho Chi Minh University of Banking, conducted under the supervision of Van Dan Dang.

Type of the article: Research Article

Abstract
Despite several reforms aimed at financial digitalization, such as the Cashless Policy (CP), Bank verification number (BVN), Linkage of National identification number (NIN) to bank accounts, and the Naira Redesign, a large proportion of Nigeria’s rural population remains digitally excluded. This study addresses a pressing gap of whether financial reforms are facilitating sustainable digital banking adoption or compounding existing barriers among rural users in South-west, Nigeria. A cross-sectional survey research design was employed, drawing data from 376 rural dwellers across six South-western states of Nigeria. A structured questionnaire measured rural dwellers’ engagement with digital financial services and the influence of key reforms. Using a cross-sectional survey, responses were analyzed through PLS-SEM, where findings revealed that the Cashless Policy (β = 0.192, p = 0.008) and National Identification Number linkage reform (β = 0.332, p = 0.000) significantly enhanced digital banking adoption, while the Bank Verification Number reform (β = 0.069, p = 0.396) and Naira Redesign (β = 0.038, p = 0.539) showed no significant effects. The study concludes that while some reforms have improved financial inclusion, Bank Verification Number and currency redesign policies require a systematic approach to better address rural realities and therefore recommends infrastructure development and user-focused reforms to strengthen rural digital financial participation.

Acknowledgment
The authors would like to acknowledge all respondents who took part in the survey.

Type of the article: Research Article

Abstract
This study examines the impact of market volatility on the financial performance sustainability in the banking sector and other sectors of the Saudi stock market (Tadawul). Given Saudi Arabia’s ongoing economic transformation under Vision 2030, financial stability remains a key priority, striving to sustain financial performance in the stock market sectors. Using panel data from various sectors of Saudi stock companies during 2019–2023, the study analyzes the effects of general market volatility and sector-specific volatility on financial performance indicators, such as ROE and net income volatility. A panel data regression approach, incorporating both fixed and random effects models, is employed to assess the relationships between volatility and financial performance. The results indicate that financial performance sustainability functions as a separate element because market volatility does not impact financial stability. Banks maintain their financial performance through their internal financial systems, which they use together with their debt management practices to navigate times of market instability. Financial leverage is a key factor that determines how financial performance is affected by financial volatility. Firms with high debt levels show high volatility in profits, indicating its importance in protecting against financial risks. The study reveals that firms should be effective in financial management systems and corporate governance to attain successful financial sustainability in their diversification of income streams. Additionally, policymakers and investors should optimize financial structures, as this approach strengthens market stability and supports Saudi Arabia in achieving its economic objectives.

Acknowledgment
The author extends appreciation to the Deanship of Postgraduate Studies and Scientific Research at Majmaah University for funding this research work through the project number (R-2026-49).

Type of the article: Research Article

Abstract
In recent years, rapid developments in information technology and the widespread use of the Internet have substantially altered the way organizations engage with customers. The banking industry is a prime example of this transformation, as it increasingly delivers services through electronic platforms. Amidst intensifying competition, banks are required to innovate to attract and retain customers. As a result, e-banking has become a fundamental driver of evolution within the financial sector. Therefore, this paper analyzes the impact of e-service quality, e-trust, and brand image on clients’ e-satisfaction and e-loyalty in Vietnam’s e-banking sector using the cognitive motivational relational theory. Using responses from 305 Vietnamese individuals experienced in e-banking, collected through Google Forms in May 2025 through the purposive sampling method, the study tested the proposed framework via partial least squares analysis. The survey was administered online, as this format offers an efficient and cost-effective solution for data collection. The findings revealed that e-service quality has a positive impact on e-satisfaction (β = 0.234, p = 0.006) and e-loyalty (β = 0.155, p = 0.010). Likewise, e-trust has a positive impact on e-satisfaction (β = 0.297, p < 0.000) and e-loyalty (β = 0.229, p < 0.000). Similarly, brand image has a positive impact on e-satisfaction (β = 0.158, p = 0.009) and e-loyalty (β = 0.194, p < 0.000). Besides, e-satisfaction has a positive impact on e-loyalty (β = 0.364, p < 0.000).

Type of the article: Research Article

Abstract
Climate-related risks have intensified the demand for transparency in the banking sector, particularly with respect to carbon-related information disclosed to stakeholders. In emerging economies, where climate disclosure remains largely voluntary, internal governance mechanisms are expected to play a decisive role in shaping reporting practices. The aim of this study is to examine the relationship between board governance effectiveness and carbon emission disclosure in the ASEAN banking sector. The object of the study is listed commercial banks operating in six ASEAN countries over the period 2014–2023. The analysis is based on panel data and employs fixed-effects and Tobit regression models to account for unobserved heterogeneity and the bounded nature of disclosure scores. The results indicate that board governance effectiveness is positively and statistically associated with carbon emission disclosure. Accordingly, the within R-squared value for the fixed-effects model is 23.5%, while the pseudo R-squared for the Tobit model is 55%, indicating strong explanatory power of both specifications. Economically, a one-point increase in the Board Effectiveness Score corresponds to an increase of 2.630 units in carbon emission disclosure in the fixed-effects model and 4.550 units in the Tobit specification, indicating economically meaningful improvements in disclosure intensity. In addition, bank size, age, profitability, and eco-innovation activity are found to be positively related to disclosure levels. The results remain robust across alternative specifications, including panel quantile regression, panel logit estimation, and two-step system generalized method of moments.