Examining the Effect of Bank Health Level towards Stock Return of Commercial Banks in Three-Selected ASEAN Countries

Ria Sandora; Mustaruddin Saleh

doi:10.56225/ijfeb.v2i4.184

Authors

Ria Sandora Department of Management, Faculty of Economics and Business, Universitas Tanjungpura, Pontianak Tenggara, 78124 Kota Pontianak, Kalimantan Barat, Indonesia
Mustaruddin Saleh Department of Management, Faculty of Economics and Business, Universitas Tanjungpura, Pontianak Tenggara, 78124 Kota Pontianak, Kalimantan Barat, Indonesia

DOI:

https://doi.org/10.56225/ijfeb.v2i4.184

Keywords:

Non-Performing Loan, Good Corporate Governance, Return on Assets, Capital Adequacy Ratio, Price to Book Value, Bank Stock Return

Abstract

Today, various main factors, including the banking sector, support a country's economy. The growth and performance of banks in a country are factors in measuring the country's economic growth. The increasing number of banking stocks traded in ASEAN countries proves banking development. However, since middle-to-low-income countries dominate ASEAN, it opens up a greater risk to the volatility of bank stock returns because of economic turmoil. Non-performing loans (NPL), Good Corporate Governance (GCG), Return on Assets (ROA), and Capital Adequacy Ratio (CAR) are found to influence bank stock return in some studies, but other similar studies show the opposite. Therefore, this study uses 28 banks in ASEAN countries as a sample, consisting of 10 Indonesian banks, 8 Malaysian banks, and 10 Thailand banks. Data analysis uses regression analysis with moderated regression analysis (MRA) and discrimination tests. The result shows NPL and GCG have no significant effect on bank stock return, ROA has a positive and significant effect, and CAR has a negative and significant effect. Price to Book Value (PBV) has a positive and significant effect on bank stock return but can only moderate ROA on stock return. The discrimination test shows that ASEAN countries' NPL, GCG, ROA, and CAR differ significantly. Therefore, banks in ASEAN ought to maintain their health through these factors to maximize their stock return.

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