Analyzing Relationship Between ROA and Beta and The Influence of Multi Factors on ROA – A Case of Vietinbank in Vietnam

Abstract

In emerging markets such as Vietnam, banking markets has been developing with fast growth and implies risk, hence, we need to focus on building strategies for improving ROA and profitability of banks. Hossain and Khalid (2018) found that bank specific factors and market specific factors have influenced the bank profitability. One of this study’s purposes is to state formulation of weighted beta capm index, By using VAR (vector auto-regression model) which is a reliable method, our research results tell that there are management and policy implications: Ministry of Finance, State bank of Vietnam and relevant agencies need to control GDP better in medium term to help increasing bank ROA.Beside, the bank may increase lending rate in long term to support ROA. Also, the bank consider to mange cost better in medium term to increase ROA. Last but not least, bank management can consider to reduce lending rate in short term in order to reduce risk or beta. Therefore, our study can be expanded for other markets.