Abstract

In this study, the factors that affected bank profitability in Vietnam over the period 2007–2018 are investigated. The net interest margin (NIM), the return on assets (ROA), and the return on equity (ROE) are considered proxies for bank profitability. Substantial predictive ability is analyzed by applying a variable selection technique known as the least absolute shrinkage and selection operator (LASSO). This analysis was based on considering a dataset of annual reports of 30 banks as well as macroeconomic factors. Finally, the results demonstrate that capital rate, equity, loan rate, bank size, deposit, and liquidity are used to determine bank profitability.

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