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Credit risk of Vietnamese commercial banks: does capital structure matter?

Author

Listed:
  • Nam Pham Hai

    (Ho Chi Minh City University of Banking)

  • Chi Le Ha Diem

    (Ho Chi Minh City University of Banking)

Abstract

The study was conducted to evaluate the impact of capital structure on the credit risk of Vietnamese commercial banks in 2012–2020. The variables representing the capital structure of banks are the ratio of customer deposits to total assets (CDEP) and non-deposit liabilities to total assets (NDEP). The study uses the non-performing loan ratio on total outstanding loans (NPL) as a proxy variable for credit risk. By using Pooled OLS, FEM, REM, FGLS, and SysGMM methods, the research results show that the CDEP positively impacts credit risk. Meanwhile, the NDEP has a negative impact on the credit risk of Vietnamese commercial banks. On that basis, the study proposes measures to reduce credit risk for Vietnamese commercial banks.

Suggested Citation

  • Nam Pham Hai & Chi Le Ha Diem, 2024. "Credit risk of Vietnamese commercial banks: does capital structure matter?," Journal of Banking Regulation, Palgrave Macmillan, vol. 25(3), pages 272-283, September.
    • Handle: RePEc:pal:jbkreg:v:25:y:2024:i:3:d:10.1057_s41261-023-00229-4
    DOI: 10.1057/s41261-023-00229-4
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    References listed on IDEAS

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