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What Determines the Profitability of Vietnam Commercial Banks?

Author

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  • Duong Thuy Nguyen
  • Huyen Thanh Ta
  • Huong Thi Diem Nguyen

Abstract

Kunt and Detragiache (1999) said that the profitability of the banking system was a good indication in signaling financial crisis. Therefore, studying determinants of bank profitability is necessary for better understanding of the current condition of the banking sector, and then, for launching new policies. The research explored determinants of Vietnamese commercial banks’ profitability. Using Regression Analysis for Panel Data set of 13 Vietnamese commercial banks over the period from 2006 to 2015, the study found that foreign ownership, cost to income and the level of credit risk, negatively influenced on the profitability of Vietnamese banks, whereas state ownership, size of assets, and macroeconomic factors (GDP and inflation) did not indicated statistically significant relations to the profitability and the relationships between capital structure, liquidity risk and the profitability were mixed.

Suggested Citation

  • Duong Thuy Nguyen & Huyen Thanh Ta & Huong Thi Diem Nguyen, 2018. "What Determines the Profitability of Vietnam Commercial Banks?," International Business Research, Canadian Center of Science and Education, vol. 11(2), pages 231-245, February.
    • Handle: RePEc:ibn:ibrjnl:v:11:y:2018:i:2:p:231-245
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    References listed on IDEAS

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    Cited by:

    1. Mosab I. Tabash & Eissa A. Al-Homaidi & Anwar Ahmad & Najib H.S. Farhan, 2020. "Factors affecting financial performance of Indian firms: an empirical investigation of firms listed on Bombay Stock Exchange," International Journal of Economic Policy in Emerging Economies, Inderscience Enterprises Ltd, vol. 13(2), pages 152-172.
    2. Eissa A. Al-Homaidi & Najib H.S. Farhan & Waleed M. Alahdal & Amgad S.D. Khaled & Moatasem M. Qaid, 2021. "Factors affecting the profitability of Indian listed firms: a panel data approach," International Journal of Business Excellence, Inderscience Enterprises Ltd, vol. 23(1), pages 1-17.
    3. Bayiley, Yitbarek Takele & Belay, Hibret, 2021. "Determinants of Commercial Bank Deposit Growth in Ethiopia," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 30(02), October.

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    More about this item

    Keywords

    ROE; ROA; bank profitability; risk management; ownership structure;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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