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Impact of Asset Quality on Financial Stability of Islamic Banks in Pakistan: A Moderating Role of Corporate Image

Author

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  • Muhammad Saleem Ashraf

    (Associate Professor, Lahore School of Accountancy and Finance, University of Lahore, Pakistan)

  • Fiaz Ahmad Sulehri

    (Assistant Professor, Lahore School of Accountancy and Finance, University of Lahore, Pakistan)

  • Momina

    (Scholar, Minhaj University Lahore, Pakistan)

Abstract

The study encompasses the financial stability management in the Islamic banking industry in Pakistan keeping in view the impact of asset quality and moderating role of corporate governance. Five Islamic banks were selected for the study, and secondary data was analyzed and obtained from the annual financial reports for eleven years from 2010-to 2020. After using descriptive statistics, correlation analysis, variance inflation factor, regression analysis, and fixed and random effect model, results show that CAR and LDR significant impact on z-score whereas Bs, Bind, and CEO duality are positively significantly associated with z-score. Moreover, the mean average value of financial ratios shows that LDR and CAR have a better impact on z-score than the NPL.

Suggested Citation

  • Muhammad Saleem Ashraf & Fiaz Ahmad Sulehri & Momina, 2023. "Impact of Asset Quality on Financial Stability of Islamic Banks in Pakistan: A Moderating Role of Corporate Image," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 12(3), pages 268-277.
    • Handle: RePEc:rfh:bbejor:v:12:y:2023:i:3:p:268-277
    DOI: https://doi.org/10.61506/01.00028
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    References listed on IDEAS

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    Cited by:

    1. Fiaz Ahmad Sulehri & Hafiz Muhammad Ahsan Khan & Mujahid Shahzad & Amjad Ali, 2023. "Beyond the Balance Sheet: Analyzing the Relationship between Corporate Governance, Financial Performance, and Stock Prices in Pakistan's Non-Bank Financial Industry," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 12(4), pages 88-95.
    2. Fiaz Ahmad Sulehri & Hafiz Muhammad Ahsan Khan & Mujahid Shahzad & Amjad Ali, 2023. "Beyond the Balance Sheet: Analyzing the Relationship between Corporate Governance, Financial Performance, and Stock Prices in Pakistan's Non-Bank Financial Industry," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 12(4), pages 88-95.

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