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In Vietnam, following the process of financial liberalization, the rapid banking expansion has resulted in structural frangibility and bad debt proliferation with negative implication for bank performance. This is the first comprehensive study that evaluates the performance of the Vietnamese banking system at the start of the Global Financial Crisis in 2008 up to 2016. We show that the Vietnamese banking system experienced a downward trend in technical efficiency over the liberalization period. However, there persists an efficiency gap among banks with different ownership structure, suggesting that privatization matters for performance improvement. One of the major contributions is the analysis of the impact of non-performing loans on bank performance. We argue that this category of loans and bank size have nonlinear effects on the estimated efficiency levels. Medium-sized banks are more efficient than big and small banks. This finding implies that the ongoing restructuring scheme pushing banks' scale expansion via capital build-up should be carefully taken into consideration.

There is a widespread belief that providing access to financial services (microfinance) or reaching the poor with microcredit are perfect solutions to establish a sustainable economy or to help kick-start a bottom-up recovery and social development animated by the poor themselves through self-employment and microenterprises. Microfinance has therefore become an important instrument for poverty alleviation and for improving the welfare of the poor in both developing and transition economies. Due to the difficulty of targeting the poor, who have a lack of collateral, microfinance institutions (MFIs) are called on to achieve a balance between social impact (poverty reduction) and positive financial performance. This paper assumes that the financial objectives of MFIs operate in opposition to each other and that a trade-off is inevitable. Unbalanced panel data of MFIs for the period 1995-2013 has been extracted from the MIX Market website. In order to solve the endogeneity problem, this paper employed the dynamic system GMM (generalized method of moments) of Blundell and Bond (1998) that is considered as the new methodology currently in use in the empirical investigation of the financial performance in banking and finance. This paper outlines some of the parameters that affect the nature of trade-offs and complementarities between social and financial objectives in microfinance performance, and provides empirical evidence from cross-country analysis. Sustainability has a positive link with outreach. MFIs tend to expand their outreach in order to achieve sustainability, based on the advantages of the economies of scale. However, a threshold which makes the trade-offs or complementarities between financial and social objectives reverse if it goes beyond a certain point is also observed.

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