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

Nam Pham Hai () and Chi Le Ha Diem ()
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Nam Pham Hai: Ho Chi Minh City University of Banking
Chi Le Ha Diem: Ho Chi Minh City University of Banking

Journal of Banking Regulation, 2024, vol. 25, issue 3, No 4, 272-283

Abstract: 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.

Keywords: Capital structure; Commercial banks; Credit risk; Vietnam (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1057/s41261-023-00229-4

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