Liquidity, Growth, Governance and Bank Stability :The Moderating Role of Bank Size

Abstract

Banking stability is a key element of financial system resilience. This role is not limited to large commercial banks but also involves rural banks (BPR), which are closely linked to local economic activity. This study examines how liquidity, growth, and governance affect BPR stability, with bank size as a moderating variable. Stability is measured using the Z-Score, based on data from conventional BPRs in Batam during 2021–2024. The analysis applies multiple linear regression and moderated regression. The results show that liquidity (LDR) has no significant effect on stability. In contrast, revenue growth and governance have a significant positive impact. Together, the three variables explain 27.3% of the variation in stability. Bank size does not moderate these relationships, indicating that asset scale alone does not guarantee resilience. The findings highlight that sustainable growth and sound governance matter more for BPR stability than asset expansion.