Net Stable Funding Ratio, Contingent Convertible Capital, Covid-19 and Bank Profitability: Evidence from Non-linear Panel Relationship
(Pages 961-970)Mohamed Saad Amroony*, M.H. Yahya, Siong Hook Law, Fakarudin Kamarudin and Nazrul Hisyam Ab Raza
Department of Accounting and Finance, Faculty of Economics and Management, Universiti Putra Malaysia, Malaysia
DOI: https://doi.org/10.55365/1923.x2022.20.108
Abstract:
The paper evaluates the effect of contingent convertible capital (cocos) on bank profitability between 2015 and 2020 using a dynamic system generalized method of moments (GMM) approach. The empirical findings indicate that (cocos) are positive and statistically significant, implying that more contingent convertible capital improves bank profitability. Additionally, bank profitability increases when the bank's net stable funding ratio (NSFR) increases and the interaction between liquidity (NSFR) and capital (COCOs) has a negative influence on bank profitability during the covid-19 pandemic. These findings hold true when an alternative proxy is used. This study provides insight into the role of contingent convertible capital in bank profitability for policymakers
Keywords:
NSFR; contingent convertible capital; covid-19; Tobin’s Q; non-linearity.
JEL Classification:
G01; G20; G21; G28; G32; G33.
How to Cite:
Mohamed Saad Amroony, M.H. Yahya, Siong Hook Law, Fakarudin Kamarudin and Nazrul Hisyam Ab Raza. Net Stable Funding Ratio, Contingent Convertible Capital, Covid-19 and Bank Profitability: Evidence from Non-linear Panel Relationship. [ref]: vol.20.2022. available at: https://refpress.org/ref-vol20-a108/
Licensee REF Press This is an open access article licensed under the terms of the Creative Commons Attribution Non-Commercial License (http://creativecommons.org/licenses/by-nc/3.0/) which permits unrestricted, non-commercial use, distribution and reproduction in any medium, provided the work is properly cited.