Impact of income diversification on the business performance of Vietnamese commercial banks

Commercial banks listed on the Ho Chi Minh City stock exchange: An analysis of diversification, human capital, and performance

“…value of less than 1%. These results indicate the presence of heteroskedasticity and autocorrelation Tran Quang Phuc (2020), Phan et al (2022), as well as Githaiga (2022). This finding elucidates the rationale for state banks' perpetual interest in and insistence on commercial banks augmenting their equity capital.…”

“…divides the operating cost by the operating income expressed as a percentage. The cost efficiency of banks is assessed using the CIR, as demonstrated in the studies conducted by Hafidiyah & Trinugroho (2016), Pham Quoc Viet & Pham Tran Quang Phuc (2020), and Phan et al (2022). The findings indicated an inverse correlation between the corporate income tax rate (CIR) and the Return on Assets (ROA).…”

“…It is expressed as a percentage. Several studies conducted by Hafidiyah & Trinugroho (2016), Pham Quoc Viet & Pham Tran Quang Phuc (2020), Phan et al (2022), as well as Githaiga (2022), have provided evidence supporting a positive correlation between loan projections and bank performance. Consequently, the fourth hypothesis (H4) posits that there exists a positive relationship between Loan-to-Asset Ratio (LAR) and Return on Assets (ROA), suggesting that higher loan balances contribute to greater operational efficiency in banks.…”

“…Assessed in natural logarithms of total assets, SIZE serves as a measure of the bank's scope. The research findings of Hafidiyah & Trinugroho (2016), Ahamed (2017), Nguyen Thi Thu Trang & Hoàng Anh Thư (2019), Octavio & Soesetio (2019), and Phan et al (2022) have established that the statistical analysis of banks demonstrates a favorable influence on operational efficiency. Drawing upon the schematic economic advantage theory and the empirical investigations, we put forth the H7 hypothesis, which posits a positive relationship between the size of a bank (measured by its range of expenditure levels observed across different banks.…”

“…According to Nguyen et al (2012) and Nguyen et al (2016), income diversification refers to the strategic pursuit of banks to augment their revenue streams by expanding their sources of income derived from operational activitiesthe process of generating revenue from sources other than interest. According to Phan et al (2022), the diversification of banks may be observed through three distinct tendencies, including financial product diversification, regional diversification, and the integration of geographic diversification with business operations. The income diversification activities…”