BANK FAILURE DURING THE COVID-19 PANDEMIC: DO CAMEL RATING MATTER?
DOI:
https://doi.org/10.33736/ijbs.7567.2025Keywords:
Bank Failure, COVID-19, CAMEL-rating, Logistic, PanelAbstract
This paper examines the risk of bank bankruptcy during the Covid-19 pandemic using logistic methods and logistic panels using data from Asia. After data cleaning, the total sample that meets the requirements consists of 1064 banks. Of the total sample, 19% were in the bankruptcy category. The results indicate that the eta capital ratio and the net interest income variable had a negative and significant effect. The credit risk variable, measured by NPL and non-operating cost variables, have a positive and significant effect. The positive coefficient results increase the risk of bankruptcy and vice versa. The liquidity and dependence on money market variables only affect the logistic model. For the dummy variable (D2020), the results are positive and significant, indicating that the impact of COVID-19 had significantly increased the risk of bankruptcy. This finding is robust even though it only includes company-level characteristic variables.
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