Abstract:
Worldwide experience of the financial crisis in the banking sector has led to the unstable
performance of banking institutions in Malaysia. Various measures have been taken to
improve and empower bank performance so that their impact toward the crisis can be
reduced, specifically in terms of financial crises. The crisis has resulted in the collapse
of the stock market and property throughout the country, with the greatest impact
causing some banks have been categorized as being unhealthy. Due to the crisis, some
banks have had to merge and consolidate in order to continue their businesses. This
happened due to the lack of mitigating measures, such as a less robust financial structure
and weak corporate governance practices in Malaysia. Initially, most researchers only
investigated the financial performance of banking institutions. However, recent years have shown that, apart from financial performance, corporate governance is also an
indicator that affects the reductions of bank performance.
