Suripto

This study aims to analyze the comparison of the resilience of Islamic and conventional banking in the Association of Southeast Asian Nations (ASEAN) during the COVID-19 pandemic. Comparison of banking resilience was proxied by the Capital Adequacy Ratio (CAR) and Loan-to-Deposit Ratio (LDR) factors, Return on Assets (ROA) and Non-Performing Loans (NPL) with the Multiple Discriminant Analysis test. In this case, the emphasis is placed on the patterns by which Islamic and conventional banking in ASEAN weathered the recent financial crisis during the COVID-19 pandemic. The explanatory and quantitative analysis also used a purposive sample strategy and SPSS to obtain and analyze data from 120-unit analyses of Islamic and conventional banks, respectively. From 2020 to 2021, traditional banks in the ASEAN region, especially in Indonesia, Malaysia, and Brunei Darussalam, were emphasized. Moreover, some data were prioritized regarding the Comparison of Resilience of Sharia and Conventional Banking in ASEAN after the COVID-19 pandemic. The results showed that conventional and Islamic banks had different resilience due to the influence of Capital Adequacy Ratio (CAR) and Loan-to-Deposit Ratio (LDR) factors, but there was no significant difference in the Return on Assets (ROA) and Non-Performing Loans (NPL). Based on the accuracy of the average prediction of 80%, conventional and Islamic bank groups had classification values of 48% and 88%, respectively. This indicated that Islamic financial institutions were more successful than conventional groups in implementing banking resilience.

Type of the article: Research Article

Abstract
Banking systems in emerging economies face mounting exposure to geopolitically induced shocks, yet the precise transmission pathways through which geopolitical disruptions translate into fundamental banking vulnerabilities remain poorly understood, particularly in the ASEAN region. This study examines how geopolitical risk propagates into credit, liquidity, and operational dimensions of banking stability across five major ASEAN economies during the period 2022–2024. Employing a quantitative panel design, the study draws on daily-frequency data from 75 conventional commercial banks operating in Indonesia, Malaysia, Singapore, Thailand, and the Philippines. The analytical framework integrates a newly constructed ASEAN Geopolitical Risk Index derived from text mining and Natural Language Processing applied to over 50,000 regional news articles with Vector Autoregression (VAR) estimation, fixed-effects panel regression, and network-based spillover analysis. Results demonstrate that geopolitical risk exerts a statistically significant positive effect on credit risk (NPL: β = 0.324, p < 0.01) and liquidity risk (LDR: β = 0.287, p < 0.01), while its effect on operational risk (BOPO: β = 0.198, p < 0.05) is heterogeneous across countries. Singapore and Malaysia exhibit superior resilience compared to Indonesia and the Philippines. Network analysis identifies a credit-to-liquidity contagion mechanism with a transmission lag of two to three trading days, and spillover intensity escalates non-linearly with geopolitical stress severity. The study contributes the first region-specific geopolitical risk index for ASEAN, a hybrid VAR-network methodology for systemic risk analysis, and actionable evidence for macroprudential policy design and early warning system development in the region.