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Determinants of financial soundness of commercial banks: Evidence from Vietnam

Author

Listed:
  • Van-Thep
  • Nguyen
  • Day-Yang
  • Liu

Abstract

This study aims to analyze the factors affecting financial soundness of commercial banks in Vietnam, in which the financial soundness of banks is estimated in the CAMELS model. The number of observations is employed in this study consists of 22 commercial banks over the 12 years from 2006 to 2017. The authors utilize the logistic regression model with the BMA approach for models selection. Results show that Overhead, Deposit, Owner, and NIEAR have a negative impact on the financial soundness, while RSVs has a positive correlation with the financial soundness. The results also show that LER is only statistically significant in the case of without including yearly effect, whereas CRED, Z_score, and macroeconomic variables (GDP and CPI) are not statistically significant. JEL classification numbers: G15, G21, G28Keywords: Bayesian Model Averaging (BMA), CAMELS, commercial banks, financial soundness, Vietnam

Suggested Citation

  • Van-Thep & Nguyen & Day-Yang & Liu, 2019. "Determinants of financial soundness of commercial banks: Evidence from Vietnam," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 9(3), pages 1-3.
    • Handle: RePEc:spt:apfiba:v:9:y:2019:i:3:f:9_3_3
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    More about this item

    Keywords

    bayesian model averaging (bma); camels; commercial banks; financial soundness; vietnam;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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