Bank-Specific Factors Influencing the Profitability of Listed Commercial Banks in Vietnam

Huong Dao Thi () and Theanh Nguyen ()
Additional contact information
Huong Dao Thi: Thuyloi University
Theanh Nguyen: Academy Of Finance

Revista Finanzas y Politica Economica, 2024, vol. 16, issue 2, 469-488

Abstract: This research examines the impact of bank-specific financial factors on the Return on Average Assets (ROAA) of commercial banks in Vietnam. The results indicate that Off-Balance Sheet activities (OBS), Net Interest Margin (NIM), and Bank Size (SIZE) positively influence ROAA. OBS presents profit generation opportunities contingent on careful risk management. A higher NIM reflects profitability from the interest rate spread, while a larger bank size enables diversification of operations and risk reduction. Conversely, Credit Balance (CB) negatively impacts ROAA as increased credit exposure can lead to credit risk and reduced profitability. Factors such as the Cost-to-Income Ratio (CIR), Non-Performing Loan ratio (NPL), and Loan Loss Reserves (LLR) do not significantly affect ROAA. The article emphasizes the importance of credit risk and market risk management to ensure the long-term sustainability and growth of commercial banks in Vietnam. Future research directions could focus on further exploring management and organizational factors, the impact of financial technology on financial performance, and the influence of customer behavior on bank profitability. Additionally, studies could consider macroeconomic factors such as global economic fluctuations and monetary policy to better understand the financial environment and support banks in developing more sustainable growth strategies.

Keywords: finance; profitability; commercial bank; return on average assets; Vietnam. (search for similar items in EconPapers)
JEL-codes: G21 G24 G32 G39 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://revfinypolecon.ucatolica.edu.co/article/view/5597 Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:col:000443:021240

Access Statistics for this article

More articles in Revista Finanzas y Politica Economica from Universidad Católica de Colombia Contact information at EDIRC.
Bibliographic data for series maintained by Universidad Católica de Colombia ().