Non-Performing Loans: Affecting Factor for the Sustainability of Vietnam Commercial Banks

Thi, Nguyen; Hue, Minh

doi:10.33301/2015.17.01.06

Cited by 13 publications

(9 citation statements)

References 8 publications

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“…Hence, the NPL ratio increases along with credit growth. In addition, the research results of Klein (2013), Do andNguyen (2013), andNguyen (2015) are following this finding. In contrast, Dash and Kabra (2010) show that loan growth rate and NPL ratio have a negative relationship.…”

Section: Regression Resultssupporting

confidence: 65%

“…This means that an increase in good-quality loans will improve the NPL ratio. Meanwhile, Nguyen and Dinh (2016) discovered that the loan growth rate is adversely connected with the NPL ratio. This is clarified by the fact that, during the study era in Vietnam, non-performing loans emerge following one year of the loan, implying that the bank loan growth rate this year is low since the bank had a high ratio of non-performing loans the previous year.…”

Section: Regression Resultsmentioning

confidence: 99%

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Determinants Influencing Non-Performing Loan Ratio of Joint Stock Commercial Banks in Vietnam

Viet¹,

Ga²,

Phan³

et al. 2023

J Organ Behav Res

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This study investigates macro and micro determinants of the ratio of non-performing loans (NPL ratio) of Vietnam commercial banks between 2015 and 2021. Data were collected from fifteen banks with total assets accounting for 62.9% of the total banking industry assets. The regression analytical technique is used to determine the impact of some independent variables on the NPL ratio of sample banks. The results reveal that the non -performing loan ratio is negatively correlated with the bank's asset size and loan growth rate but positively correlated with the net interest margin and the credit risk. The variable of Covid-19 has no statistically significant correlation with the non-performing loans ratio. Although a range of previous studies on that topic has been carried out, none of them digs deeper into the impact of these explanatory variables on the ratio of non-performing loans of Vietnamese commercial banks, especially the impact of Covid-19, whereas the banking industry of Vietnam is far-affected by that epidemic. Therefore, these findings can be used by creditors, investors, bank managers, and policy-makers when they have to give decisions relating to commercial banks in this complex period.

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Section: Regression Resultssupporting

confidence: 65%

Section: Regression Resultsmentioning

confidence: 99%

Determinants Influencing Non-Performing Loan Ratio of Joint Stock Commercial Banks in Vietnam

Viet¹,

Ga²,

Phan³

et al. 2023

J Organ Behav Res

View full text Add to dashboard Cite

show abstract

“…According to Le (2013), Nguyen (2015), Banna, Ahmad and Koh (2017), Nguyen and Lien (2019), to develop the economy, banks play an important role in bringing stability and development through mobilizing financial resources throughout the whole economy. The banks' lending performance is very much related to the use of financial statements, including cash flow statements.…”

Section: Influence Of the Methods Of Presenting Cash Flow Statementsmentioning

confidence: 99%

The Impact of Methods of Presenting Cash Flow Statement on Loan Decision: Evidence from Vietnam

Nguyễn¹

2020

JAFEB

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The paper aims to investigate the impact of presenting statements of cash flow using the direct method and the indirect method on loan decision by credit officers at Vietnamese banks. The data was collected from 150 credit officers of commercial banks in Vietnam based on the questionnaire about making loan decision when the cash flow statement is presented in different methods, namely, direct and indirect methods. This research uses T-tests to check whether using the direct or indirect method affects the accurate calculation of loan criteria, affects the loan decision by credit officers, and compare these two methods in the aspects of information provision. The research has pointed out that: 1) the direct method helps the calculation of indicators related to loans more accurately; 2) credit officers say that, while the direct method of presenting cash flow statement provides clearer information, the use of either the direct method or the indirect method does not affect the banks' loan decision. Since then, the author recommends that cash flow statements should be provided with information in a direct method to present the information needed for loan decision more accurately so as to improve the quality of cash flow statement.

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“…Several studies have proved the association between bank-specific variables and problem loans. As stated in the survey by Hue (2015), the study found that the growth rate of the loan, the total assets of the banks, and the previous NPLs have a positive effect on NPLs for the recent year. A study from Hu, Yang, and Yung-Ho (2006) analyzed the association between the ownership structure of the banks and NPLs, and it ratified that the banks with higher government ownership would have the lower NPLs.…”

Section: Effect Of Bank Specific Factorsmentioning

confidence: 67%

Determinants of Non-Performing Loans: Evidence From Conventional Banks in Malaysia

Zain

Ghazali

Daud

2020

HSSR

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Purpose of the study: This paper attempts to determine the determinants of non-performing loans in commercial banks in Malaysia. This study attempts to explore the specific bank factors as well as macroeconomics factors that are contributing to the non-performing loans.Methodology: This paper analyzes the data using eight local commercial banks in Malaysia. The data collected from the annual report and Data Streams database for the year 2009 to 2018. A panel data approach has been used to analyze the data. All the determinants regressed against non-performing loans by using STATA 14 as a tool. Main Findings:The results of this study present that capitalization had a significant negative relationship with nonperforming loans, while the real effective exchange rate had a significant positive correlation with non-performing loans. Applications of this study:This study highlights the crucial factors of the non-performing loans that can be used by the bank or financial institutions. Novelty/Originality of this study:This study includes one new variable for the macroeconomics factors, which is the real effective exchange rate, and the result shows it is significant towards non-performing loans. Therefore, this study enhances the existing model with the new variable that can be used to find what is affecting the non-performing loans.

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Non-Performing Loans: Affecting Factor for the Sustainability of Vietnam Commercial Banks

Cited by 13 publications

References 8 publications

Determinants Influencing Non-Performing Loan Ratio of Joint Stock Commercial Banks in Vietnam

Determinants Influencing Non-Performing Loan Ratio of Joint Stock Commercial Banks in Vietnam

The Impact of Methods of Presenting Cash Flow Statement on Loan Decision: Evidence from Vietnam

Determinants of Non-Performing Loans: Evidence From Conventional Banks in Malaysia

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