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Prediction Financial Distress of Commercial Bank through Debt Ratio in<br />

Malaysia<br />

Faridah binti Yusuf<br />

Supervisor: Dr. Hazman Samsudin<br />

Bachelor of Economics (Natural Resources)<br />

School of Social and Economic Development<br />

Commercial banks are key players in the financial system and they help mitigate the<br />

significant informational costs of assessing and monitoring the creditworthiness of<br />

borrowers. The soundness of the banking system is a key element in the<br />

implementation of the prudential framework, especially with reference to capital<br />

regulation, that aims to control bank risk taking. Therefore, this study aims to<br />

investigate the financial distress in commercial bank in Malaysia. Instruments variables<br />

used in this study is return on equity, operating margin ratio, loan deposit ratio and<br />

debt ratio of commercial bank in Malaysia. This study utilized panel data analysis<br />

ranging from 2001 to 2017 by using 10 commercial banks in Malaysia.<br />

1446 | UMT UNDERGRADUATE RESEARCH DAY 2018

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