Assessing The Profitability And Risk Management Of Listed Banks In Vietnam

Huy Hung Ta (), Vu Duy Do (), Thi Thuy Nguyen (), Thi Thu Huyen Nguyen (), Thi Hanh Vu () and Thi Mai Phuong Nguyen ()
Additional contact information
Huy Hung Ta: Vietnam National University, Faculty of Economics and Management, International School
Vu Duy Do: KPMG Vietnam, Private Enterprise
Thi Thuy Nguyen: Vietnam National University, Department of Academic Affairs, International School
Thi Thu Huyen Nguyen: Vietnam National University, International School
Thi Hanh Vu: Hoang Mai Star Escalator School
Thi Mai Phuong Nguyen: Credit Appraisal and Approval Center, JSC Bank for Investment and Development of Vietnam

A chapter in Proceedings of the International Conference on Emerging Challenges: Sustainable Strategies in the Data-Driven Economy (ICECH 2024), 2025, pp 451-474 from Springer

Abstract: Abstract Instructions providing basic guidelines for preparing an abstract paper for the “ICECH2024 - The 12nd International Conference on Emerging challenges: Sustainable Strategies in the Data – Driven Economy” are presented. This document is itself an example of the desired layout for the abstracts. Therefore, please use it as a template while editing the manuscript. It is recommended that the abstract contains 200–250 words. Research purpose: This research explores bank risk management using quantitative and qualitative methods. It uses financial ratios, trend analysis, comparative analysis, and regression analysis to understand patterns and relationships with bank risk profiles. The study also reviews external forces affecting the banking sector using Porter’s five forces model. The research also investigates profitability determinants for listed banks using financial data and regression analysis. The findings may help bank managers, regulators, investors, and policymakers make informed decisions. Research motivation: The banking sector is a key sector in economic development, yet it is one that is influenced by both the external environment and its own strategy. Rising global uncertainty, unexpected external shocks and internal weaknesses have raised concerns about commercial banks in Vietnam, especially their profits and risks – which may decide the fate of a bank. This study aims to examine how commercial banks in Vietnam manage their risks to make profits as well as offer some implications and recommendations for them. Research design, approach, and method: We employ both qualitative analysis and quantitative analysis of panel data from 20 listed banks in Vietnam by using Stata. Main findings: The Vietnamese banking sector is competitive, driven by numerous players, market saturation, low switching costs, and aggressive marketing tactics. Determinants of bank profitability include bank size, debt-to-equity ratio, deposit-to-asset ratio, and loan-to-deposit ratio. Scale, leverage, and asset-liability management are crucial in determining profitability. The increasing trend in loan-to-deposit and equity-to-asset ratios reflects an increased focus on risk management and growth aspirations. Practical/managerial implications: Banks must continuously innovate and optimize their operations to maintain their edge. The study highlights the importance of understanding bank profitability and risk-taking for policymakers, regulators, and bank managers. It emphasizes the need for strategic agility, technology, product diversification, and customer service to maintain a competitive advantage. The research also helps monitor financial ratio trends and advises banks to optimize asset-liability structures for profitability maximization. Policymakers should promote competition, capitalization, and risk-taking behavior to mitigate systemic risks and maintain financial stability.

Keywords: Profitability determinant factors; risk managements; risk ratio; competitive environment; Porter’s five forces model (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-694-9_31

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DOI: 10.2991/978-94-6463-694-9_31

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