An analysis of loan loss provisioning behaviour in Vietnamese banking

Cormac Bryce, Aristeidis Dadoukis, Maximilian Hall, Linh Nguyen and Richard Simper ()

Finance Research Letters, 2015, vol. 14, issue C, 69-75

Abstract: This paper investigates loan loss provisioning (LLP) behaviour by Vietnamese banks during the period 2006–2012. We test the capital, income-smoothing and cyclical management hypotheses and examine whether the inclusion of X-efficiencies and/or risk control variables influences provisioning behaviour. When the X-efficiency estimates are incorporated into the models, Vietnamese banks do not exhibit counter-cyclical or capital management manipulation by managers, but counter cyclical income smoothing. Yet, the inclusion of risk control variables in X-efficiency scores (either equity or reserves for impaired loans) supports the addition of capital management hypotheses.

Keywords: Loan loss provisioning; Capital management hypothesis; Income smoothing; Vietnam; X-efficiency (search for similar items in EconPapers)
JEL-codes: C33 G01 G21 G28 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:14:y:2015:i:c:p:69-75

DOI: 10.1016/j.frl.2015.05.014

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