Title: Financial Distress Prediction Using Bankometer Model on Islamic and Conventional Banks: Evidence from Indonesia

Authors: NISFUL LAILA and F. WIDIHADNANTO

Affiliations: Universitas Airlangga Surabaya, Indonesia

Publisher: International Journal of Economics and Management (IJEM)

Abstract

This research aims to assess financial distress prediction of Islamic and conventional banks by analyzing Bankometer scores between Islamic and conventional banks. This research compared the bankometer scores of four Islamic banks and 10 conventional banks observed for the year period of 2011-2014. The data were obtained from annual reports of the sampled banks from 2011 to 2014. The results of this research show that both Islamic and conventional banks have a fine level of resilience against financial distress. This finding suggests that there was no difference of financial distress prediction between Islamic banks and conventional banks. This result also confirms the findings of Gamaginta & Rokhim (undated), Hanif et al., (2012) and Abdul Rahman & Masngut (2014). On the other hand, contradicts that of Pappas et al., (2012) who concluded that Islamic banks are 55% less dangerous to failure than conventional banks.

Keywords: Financial Distress, Bankometer, Islamic Bank, Conventional Bank

Sources: http://www.ijem.upm.edu.my/vol11_noS1/13 ).%20IJEM%2011(S1)2017%20-%20Nisful%20Laila%20(Financial%20Distress...).pdf