Bank Size, Credit Risk and Bank Profitability in Vietnam

Tran, Dieu Thi Thanh; Phan, Ha

doi:10.22452/mjes.vol57no2.4

Cited by 4 publications

(4 citation statements)

References 38 publications

(79 reference statements)

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“…Similar findings were reported by Jeris (2021) and Isayas (2022) for banks in Bangladesh and Ethiopia, respectively. However, in the case of Nepal, Tharu and Shrestha (2019) observed no significant impact of BSIZE on profitability, while Thi Thanh Thi Thanh Tran and Phan (2020) noted the negative effect of BSIZE on bank profitability in Vietnam.…”

Section: Bank Size (Bsize)mentioning

confidence: 90%

Determinants of Bank Profitability—Do Institutions, Globalization, and Global Uncertainty Matter for Banks in Island Economies? The Case of Fiji

Chand,

Kumar,

Stauvermann

et al. 2024

JRFM

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The objective of this study is to examine the influences of institutions, globalization, and world uncertainty on bank profitability in small developing economies. Consequently, we emphasize the significance of both bank-specific and other external factors influencing bank profitability. The empirical estimation is based on seven banks in Fiji—a small island economy—over the period 2000–2021. Together with bank-specific and macro factors, we account for institutions, globalization, and world uncertainty in analyzing the determinants of bank profitability. The study uses the fixed-effect estimation method. From the results, we observe that bank-specific variables, like the net interest margin, non-interest income, bank size, and capital adequacy ratio, are positively associated with bank profitability. Non-performing loans and credit risk are negatively associated with bank profitability. Macro variables, such as real GDP growth and remittances, have positive effects on bank profitability. Institutional factors, such as government effectiveness and voice and accountability, are positively associated with bank profitability. Regarding globalization, we find that it supports bank profitability. Global uncertainty and the Global Financial Crisis (2007–2008) are positively associated with profitability, whereas the global pandemic (COVID-19) is negatively associated. This study underscores the need to analyze the bank performance with factors beyond those reported in financial statements to derive a comprehensive understanding and appreciation of the complex nature of banking operations.

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Section: Bank Size (Bsize)mentioning

confidence: 90%

Determinants of Bank Profitability—Do Institutions, Globalization, and Global Uncertainty Matter for Banks in Island Economies? The Case of Fiji

Chand,

Kumar,

Stauvermann

et al. 2024

JRFM

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“…These findings are consistent with the findings of Bandara, Jameel and Haleem (2021) in their study in Sri Lanka with respect to CAR and NPL. A study in Vietnam also found that credit risk as measured by loan loss provision and bank size had an adverse impact on bank profitability (Tran, 2020). Conversely, gearing (total debt to total assets), inflation and GDP growth had a positive impact on profitability.…”

Section: Studies In Asiamentioning

confidence: 98%

Credit Management and Profitability of Banks in Zambia

2023

RJFA

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The aim of this study was to evaluate the effect of credit management on profitability of banks in Zambia. Accordingly, the research question designed to guide the study was: To what extend do bank credit management policies and practices affect the profitability of banks in Zambia?To answer the research question above, the Return on Average Assets (ROAA) was computed as a measure of bank profitability, the dependent variable. Measures for independent variables such as leverage (the ratio of total debt to total net assets), asset quality (non-performing loan ratio) and credit risk (gross loans and advances to total assets, and loan loss provision ratio), which reflect bank credit management policies and practices were also computed. Bank size and percentage growth in annual income were included as control variables in the model. To analyze the data, a fixed effects regression model with dummy variables was employed, using panel data spanning 12 years from 2010 to 2021. The data encompassed 15 out of the 18 commercial banks operating in the country.The study found that the regression model accounted for 60% of the variation in bank profitability, of which 35% was attributable to the in-between subject variation and 25% to the independent variables. With respect to the effect of individual predictor variables on bank profit, the study found a statistically significant positive relationship with bank size, while the loan loss provision had a statistically significant negative correlation. Illustratively, a one unit increase in bank size enhanced bank profit by 0.019 units, ceteris paribus, while a one unit increase in loan loss provision decreased bank profit by 0.278 units, ceteris paribus. Furthermore, the study revealed that an increase in leverage and credit risk had negative but statistically insignificant effect on profit respectively, while growth and asset quality had the opposite but also statistically insignificant effect. Overall, the study concluded that credit management policies and practices, as measured by the independent variables, significantly affected bank profit performance in the country.

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“…Regarding financial technology, studies in economics and finance have not paid much attention to the role of technology and its relations to bank behavior. There is a powerful argument on the relationship between religion and its impact on the bank performance (Chen and Zhu, 2004;Phan, 2020); its impact on profitability and bank liquidity (Dong et al, 2017); or its impact on bank stock prices (Ferri et al (2019). For example, IT-value added activity aids in the efficient collection of funds from customers in deposits in the banking business.…”

Section: Macroeconomic Factorsmentioning

confidence: 99%

“…As banks grow in size, management of potential risks becomes crucial. Thus, with larger banks, the likelihood of the mismanagement of banks assets increases, resulting a decline in their profitability (Thi Thanh Tran and Phan, 2020). An industrial characteristic was accounted for by the market SHIB.…”

Section: Empirical Findingsmentioning

confidence: 99%

Does social and governmental responsibility matter for financial stability and bank profitability? Evidence from commercial and Islamic banks

Kanapiyanova

Faizulayev

Ruzanov

et al. 2022

JIABR

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Purpose This paper aims to explore the drivers of banking stability in the case of QISMUT+3 countries (Qatar, Indonesia, Saudi Arabia, Malaysia, United Arab Emirates, Turkey, Pakistan, Kuwait and Bahrain) focusing on social and governmental responsibility (SGR) determinants. Both main indicators of banking stability, namely, profitability and nonperforming loans, were treated as dependent variables. The model is examined with the whole sample and separately by examining commercial banks and Islamic banks. Design/methodology/approach Cross-country bank-level panel data spanning from 2011 to 2018 is used. Two-step system generalized methods of moments alongside both panel-corrected standard error and feasible generalized least squares models were applied to ensure the robustness of the results. Findings Findings reveal that capital adequacy and corruption control are the most dominant determinants of banking profitability in the studied sample regardless of the type of the bank. In addition, profitability, efficient management, inflation and government effectiveness were found to be the main drivers of financial vulnerability risk. Practical implications Findings of this study offer many insights and policy implications to help stakeholders gain a comprehensive understanding of banking stability. Suggested policy implications targeting bank management, governmental policymakers and investors are offered to better the banking stability of QISMUT+3 countries. Originality/value This paper has multiple contributions to the existing literature. The determinants of banking stability are examined in QISMUT+3 group of countries which is the focus of a limited number of studies. In addition, the use of a comprehensive variable set alongside the addition of SGR determinants in the case of banking system stability is one of the main contributions of this paper.

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Bank Size, Credit Risk and Bank Profitability in Vietnam

Cited by 4 publications

References 38 publications

Determinants of Bank Profitability—Do Institutions, Globalization, and Global Uncertainty Matter for Banks in Island Economies? The Case of Fiji

Determinants of Bank Profitability—Do Institutions, Globalization, and Global Uncertainty Matter for Banks in Island Economies? The Case of Fiji

Credit Management and Profitability of Banks in Zambia

Does social and governmental responsibility matter for financial stability and bank profitability? Evidence from commercial and Islamic banks

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