Author

  • Siti Nurulhuda Ibrahim

    • Faculty of Business & Management, Universiti Teknologi MARA, Cawangan Melaka Kampus Bandaraya Melaka, Jalan Hang Tuah, Melaka, Malaysia
    • Malaysia

  • Shafinar Ismail

    • Faculty of Business & Management, Universiti Teknologi MARA, Cawangan Melaka Kampus Bandaraya Melaka, Jalan Hang Tuah, Melaka, Malaysia
    • Malaysia

  • Nur Hayati Abd Rahman

    • Faculty of Business & Management, Universiti Teknologi MARA, Cawangan Melaka Kampus Alor Gajah, Jalan Lendu, Alor Gajah, Melaka, Malaysia
    • Malaysia

  • Irfah Najihah Basir Malan

    • Faculty of Business & Management, Universiti Teknologi MARA, Cawangan Melaka Kampus Bandaraya Melaka, Jalan Hang Tuah, Melaka, Malaysia
    • Malaysia

  • Wan Musyirah Wan Ismail

    • Faculty of Business & Management, Universiti Teknologi MARA, Cawangan Melaka Kampus Bandaraya Melaka, Jalan Hang Tuah, Melaka, Malaysia
    • Malaysia

Abstract

Financial stability and solvency are essential for manufacturing and service businesses driven by profit, especially the banking sector. As a service sector organization, the banking industry is vital to economic growth. Along with the financial market, both achieved significant progression, particularly in the sukuk market. Despite the possibility of complementary interaction between the sukuk market and Islamic banking institutions, there are also concerns about competitive likelihood. Thus, the study of the finance scope of these Islamic banks in top sukuk issuing countries is crucial. This study applies the Altman Z-score model to measure private-sector banks’ financial health from 2018 to 2022. The sample comprises of Islamic banks in the top sukuk-issuing countries (i.e. Malaysia, Saudi Arabia, Indonesia, Turkiye, United Arab Emirates, Bahrain, and Pakistan). It concludes that UAE, Indonesia, and Saudi Arabia are experiencing financial distress since these banks fall into the “Distress Zone” according to Z-score criteria. Meanwhile, Turkiye, Bahrain, and Pakistan are categorized under the “Grey Zone” and require further improvement on specific financial ratios. Lastly, Malaysia is the only country under the top sukuk-issuing countries that merely achieved the “Safe Zone” criteria, implying that the Islamic banks in this country have greater financial stability rather than others.

Keywords

References

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How to Cite

Ibrahim, S. N., Ismail, S., Abd Rahman, N. H., Basir Malan, I. N., & Wan Ismail, W. M. (2024). Financial Distress Prediction of Islamic Banks in Top Sukuk-Issuing Countries: An Application of Altman’s Z-Score Model. Information Management and Business Review, 16(2(I), 28-36. https://doi.org/10.22610/imbr.v16i2(I).3725

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Copyright (c) 2024 Siti Nurulhuda Ibrahim, Shafinar Ismail, Nur Hayati Abd Rahman, Irfah Najihah Basir Malan, Wan Musyirah Wan Ismail (Author)

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Research Paper

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Vol. 16 No. 2(I) (2024) Digital Taxation, Entrepreneurial Intention & Higher Education View issue contents

Published

2024-07-04

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