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Diversifying Business Models and Bank Stability

Author

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  • Du Do Kim

    (Thai Nguyen University of Economics and Business Administration, Vietnam)

  • Huyen Do Phuong

    (Vietnam National University, Vietnam)

  • Tam Le Xuan

Abstract

Research on banking sustainability plays an important role for banks in the growing financial market. As a result, banks must compete more, making the risk of weak banks increase. This study was conducted to evaluate the impact of business models on bank stability — analytical data on joint-stock commercial banks listed on the Vietnam stock exchange from 2012 to 2019. The panel data regression analysis model with a generalized method of moments (GMM) is used to analyze the results. The GMM results show that net interest income (NII) has a positive effect on bank stability. On the other hand, non-interest income (NNII and TRADE) has a negative impact on bank stability. This result indicates that business models are having a negative impact on bank stability. The study also points out several implications for improving the sustainability of banks.

Suggested Citation

  • Du Do Kim & Huyen Do Phuong & Tam Le Xuan, 2022. "Diversifying Business Models and Bank Stability," European Journal of Business and Management Research, European Open Science, vol. 7(3), pages 299-303, May.
    • Handle: RePEc:epw:ejbmr0:v:7:y:2022:i:3:id:51447
    DOI: 10.24018/ejbmr.2022.7.3.1447
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