Abstract
The article studied the impact of internal and external factors on the profitability of joint-stock commercial banks during 2009–2019. The paper used a data sample of 24 joint-stock commercial banks that account for a large proportion of the total assets of the Vietnamese commercial banking system. Bank profitability is measured by return on assets (ROA) and return on equity (ROE). To be more specific, ROA is a dependent variable with nine independent variables of micro and macro components of the economy. Through Bayesian multivariate regression, the results showed that external factors such as gross domestic product (GDP) and inflation rate (INF) have a positive relationship with ROA and ROE. Internal factors have different effects on ROA & ROE. While size (SIZE) owns a positive relationship to ROA and ROE, credit risk (LLR), operating costs (COSR), income diversification (DIV) are together negatively related to ROA and ROE. The study also reported loan (LOAN) and liquidity (LIQ) both have a positive correlation with ROE yet negative one with ROA, meanwhile equity size (CAP) has a positive relation with ROE and negative relation with ROE.
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Thanh, B.D., Thach, N.N., Tuan, T.A. (2022). Determinants of Bank Profitability in Vietnam. In: Ngoc Thach, N., Kreinovich, V., Ha, D.T., Trung, N.D. (eds) Financial Econometrics: Bayesian Analysis, Quantum Uncertainty, and Related Topics. ECONVN 2022. Studies in Systems, Decision and Control, vol 427. Springer, Cham. https://doi.org/10.1007/978-3-030-98689-6_34
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