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What Determines the Profitability of Vietnam Commercial Banks?

Duong Thuy Nguyen, Huyen Thanh Ta and Huong Thi Diem Nguyen

International Business Research, 2018, vol. 11, issue 2, 231-245

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.

Keywords: ROE; ROA; bank profitability; risk management; ownership structure (search for similar items in EconPapers)
JEL-codes: R00 Z0 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:ibn:ibrjnl:v:11:y:2018:i:2:p:231-245