Banks In Vietnam Research Articles

Interest rate risk in banking book management at commercial banks in Vietnam

Interest rate risk is potentially averse to a commercial bank's trading book and banking book. The sharp and rapid volatility of interest rates can push commercial banks to fall into difficult situations, thus leading to instability of the whole banking system. Therefore, interest rate risk in banking book (IRRBB) management plays a vital role in banking operations. This paper analyzes the current management of IRRBB at 21 commercial banks in Vietnam by doing in-depth interviews and questionnaires. The finding indicates that the level of IRRBB management of commercial banks in Vietnam is mostly relatively completed or inadequate, with the highest levels belonging to international commercial banks and the banks that implement Basel II. Furthermore, the study also executes a simulation of IRRBB management at one commercial bank according to current regulations of the State Bank of Vietnam. Based on the selected interest rate scenarios, the capital requirement for IRRBB is calculated, which is the actual simulation for commercial banking in implementing the IRRBBB framework. Finally, to improve the effectiveness of IRRBB management in Vietnam, some implications for the State Bank of Vietnam and commercial banks are provided.

The Impact of Asset-Liability Management on the Profitability of Listed Commercial Banks in Vietnam

This paper investigates the effect of asset-liability management on the profitability of listed commercial banks in Vietnam, analyzing annual data from 2013 to 2023. The study uses VIF tests, Heteroskedasticity tests, Model Specification tests, and the Generalized Least Squares (GLS) model with the Modified Wald test to examine the data. The results reveal a positive correlation between bank asset management and annual GDP growth with profitability. Conversely, liability management and the year-on-year growth rate of total assets negatively impact profitability. Specifically, factors such as loans and advances, investments in securities on the asset side, and deposits and borrowings from other credit institutions, along with customer deposits on the liability side, are significant. Lending activities, in particular, are identified as key drivers of financial performance in the Vietnamese banking sector. However, the minimal impact of investment securities on profitability raises questions, given their traditionally significant role in banking profitability strategies globally. The study also highlights the negative effects of certain liabilities on bank profitability, stressing the need for careful liability management for banks in Vietnam. While GDP growth is generally linked with economic prosperity and financial sector growth, its impact on bank profitability in Vietnam appears limited, suggesting that other factors might play a more significant role.

Applying vroom expectancy theory to analyse employee motivation: A study of commercial banks in Vietnam

In researching motivation, the process approach is better and has more potential than the content approach. This research aims to apply Vroom expectancy theory, a process-based approach to motivation to gain a greater understanding of employee motivation within the commercial banking sector in Vietnam. Additionally, this study seeks to validate the applicability of the expectancy theory by surveying 901 employees from 16 commercial banks with different total assets and numbers of employees. The data analysis involved the utilization of Cronbach's alpha, Exploratory Factor Analysis (EFA), confirmatory factor analysis (CFA) and structural equation model (SEM). This study reveals that there is a positive relationship between expectancy (E), intrinsic instrument (I-IN), intrinsic valence (I-V) and employee motivation (EM). Employee motivation has an impact on job performance. Nevertheless, it has been observed that the presence of extrinsic valence (E-V) and extrinsic instruments (E-IN) do not significantly impact employee motivation despite the high employees’ level of need for extrinsic valence. This finding deviates considerably from previous studies that applied Vroom's theory. These findings further emphasize the notion that motivation is a dynamic process. Using a process approach in investigating motivation has significant efficacy and employee motivation has a substantial impact on employee performance especially in the context of commercial banks in Vietnam.

The Efficiency and Returns to Scale of the Vietnam Banking Sector: New Evidence

The Efficiency and Returns to Scale of the Vietnam Banking Sector: New Evidence

Cord Blood Banking in Vietnam: Historical Perspective, Status, and Future Developments 2023.

Cord Blood Banking in Vietnam: Historical Perspective, Status, and Future Developments 2023.

Tác động của hoạt động tạo thanh khoản đến khả năng sinh lợi của các ngân hàng thương mại Việt Nam

This study investigates the effect of liquidity creation activities on the profitability of Vietnamese commercial banks. The research sample includes 308 observations from 28 commercial banks in Vietnam from 2012 to 2022. The estimated results from models with random effects (REM), fixed effects (FEM), and feasible generalized least squares (FGLS) show that liquidity creation (LC) has a negative impact on the profitability of commercial banks in Vietnam. Further analysis shows that liquidity creation on the asset side (LCA), liquidity creation on the liability and equity sides (LCC), and liquidity creation on the off-balance sheet side (LCOBS) have a negative effect on the profitability ratio of Vietnamese commercial banks. This study provides some policy implications for bank managers regarding profit maximization strategies in Vietnamese commercial banks

IMPACT OF CREDIT RISK MANAGEMENT ON PROFITABILITY OF COMMERCIAL BANKS: A CASE STUDY IN VIETNAM

The main purpose of this study is to examine the impact of credit risk management on profitability of commercial banks in Vietnam. While the existing literature emphasizes the necessity for a more in-depth study and additional empirical evidence to elucidate intricate relationships between market dynamics and credit risk, particularly in the context of commercial banks in Southeast Asia, there remains a gap in comprehensive studies, with a specific focus on Vietnam. The secondary data was collected from 20 commercial banks from the country for the period of 11 years, from 2012 to 2022. The study used non-performing loans ratio (NPLR), capital adequacy ratio (CAR) as well as loan-loss provision ratio (LLPR) as proxies of credit risk while the financial performance is measured by return on equity (ROE). Moreover, the bank's characteristics, such as its size (SIZE), the macroeconomic inflation rate (INF), and a dummy variable that looks at how ownership type (OWN) affects the bank's profitability are all applied to quantify the independent variables. The model does not exhibit the multicollinearity issue, according to the mean Variance Inflation Factor (VIF) data. The regression results reveal that SIZE, CAR and INF variables have a significant positive effect on ROE, while the NPLR variable has an opposite significant effect on ROE. Nevertheless, there is no connection between the ROE-measured financial performance of commercial banks and the OWN or LLPR variables. This offers further valuable insights to bankers and policy makers in credit risk management of commercial banks in Vietnam to enhance the stability of the Vietnamese banking system.

The Effects of Monitoring Activities on Loan Defaults in Group-Based Lending Program: Evidence from Vietnam

The aim of this study is to investigate the impact of delegated monitoring by a group leader and peer monitoring by group members on loan defaults in a group-based lending program in Vietnam. The data used in the study were collected from a questionnaire survey of 675 participants involved in a group-based lending program conducted from August to October 2022 in the Mekong River Delta, Vietnam. This group-based lending program employs a unique monitoring system that involves hiring the group leader to supervise the group and encouraging group members to monitor each other. The empirical findings derived from the Probit model indicated that delegated monitoring significantly reduces loan defaults, but there was no evidence supporting the effectiveness of peer monitoring within the group. Additionally, under the delegated monitoring scheme, commissions and group size plays an important role in decreasing loan defaults. The implication of the findings is that the Vietnam Bank for Social Policies (VBSP) could maintain large group sizes to provide incentives for group leaders through commissions to enhance repayment rates.

Relationship between enforcement of labor social welfare laws and internal CSR, job satisfaction: a qualitative study at commercial banks in Vietnam

This study aimed to explore the relationship between three factors: enforcement of labor social welfare labor laws, internal corporate social responsibility (CSR) implementation, and job satisfaction as perceived by managers in the commercial banking sector. The research utilized a qualitative research method – in-depth interviews based on a semi-structured questionnaire with 20 experienced managers from 11 commercial banks in Vietnam, an emerging economy. Findings indicated a positive reciprocal relationship between enforcement of social welfare labor laws and internal CSR responsibilities of enterprises. Additionally, enforcing labor social welfare laws and internal CSR implementation positively impacted employee job satisfaction. The study also identified five aspects of internal CSR implementation towards employees: (1) timely and full payment of wages, bonuses, and benefits; (2) establishing a conducive work environment; (3) policies addressing human rights, health, and safety at work; (4) fair and democratic treatment, providing training and career advancement opportunities, and protecting employees through organizational activities; (5) having legal norms, procedures, mechanisms for recording, feedback, monitoring, and reasonable evaluation of job performance. These findings contribute to enriching both theoretical understanding and practical implications regarding the interplay of these three factors in commercial banks, encouraging managers to effectively implement social welfare laws and internal CSR implementation. AcknowledgmentThis collaborative research involves scholars from the University of Law - Hue University and Duy Tan University. The authors extend their gratitude to both institutions for their support and assistance in facilitating the publication of this research. In addition, the authors would like to thank the Editor-in Chief and a reviewer for their helpful comments that in our view have helped to improve the quality of the manuscript significantly. This study was conducted based on decision No. 4741/QD-ĐHDT dated October 18, 2023 of Duy Tan University, Vietnam.

The influence of diversifying income sources on the financial performance: An empirical study on Vietnamese commercial banks

This research investigates the impact of income diversification on the financial outcomes of commercial banks in Vietnam. The analysis utilizes financial reports from 26 Vietnamese commercial banks spanning from 2012 to 2022. A variety of analytical methods, including the Pooled Ordinary Least Squares (OLS) model, Fixed Effects Model (FEM), Random Effects Model (REM), and System Generalized Method of Moments (SGMM) models, were employed to evaluate the data. The findings suggest that diversifying income streams enhances the financial health of commercial banks. The case of Vietnamese banks indicates that bank growth and an increase in borrowing activities positively influence financial results. Additionally, it is recommended for banks to manage deposit ratios of customers and lower the ratio of loan loss provisions to optimize financial performance.

Bank-Specific Factors Influencing the Profitability of Listed Commercial Banks in Vietnam

This research examines the impact of bank-specific financial factors on the Return on Average Assets (ROAA) of commercial banks in Vietnam. The results indicate that Off-Balance Sheet activities (OBS), Net Interest Margin (NIM), and Bank Size (SIZE) positively influence ROAA. OBS presents profit generation opportunities contingent on careful risk management. A higher NIM reflects profitability from the interest rate spread, while a larger bank size enables diversification of operations and risk reduction. Conversely, Credit Balance (CB) negatively impacts ROAA as increased credit exposure can lead to credit risk and reduced profitability. Factors such as the Cost-to-Income Ratio (CIR), Non-Performing Loan ratio (NPL), and Loan Loss Reserves (LLR) do not significantly affect ROAA. The article emphasizes the importance of credit risk and market risk management to ensure the long-term sustainability and growth of commercial banks in Vietnam. Future research directions could focus on further exploring management and organizational factors, the impact of financial technology on financial performance, and the influence of customer behavior on bank profitability. Additionally, studies could consider macroeconomic factors such as global economic fluctuations and monetary policy to better understand the financial environment and support banks in developing more sustainable growth strategies.

The relationship between organizational learning and innovation capability in the Vietnamese banking sector

This study investigates the influence of organizational learning on the innovation capability of commercial banks in Vietnam. Its aim is to identify the nature of the relationship between these constructs and empirically examine whether organizational learning practices impact banks' innovation capabilities. This research uses in-depth interviews with a large-scale survey administered to employees across various Vietnamese commercial banks employing a mixed-methods approach. Data collection primarily relied on questionnaires with 280 valid responses to explore the direct and indirect effects of organizational learning on innovation capability. Quantitative analysis and structural equation modeling (SEM) were conducted using Smart-PLS software to assess scale reliability, test hypotheses and analyze the collected data. The findings confirm a direct and positive relationship between organizational learning and bank innovation capability. Three factors such as commitment to learning, shared vision and open-mindedness were found to exert significant positive influences on the bank’s product and process innovation. However, intra-organizational knowledge sharing exhibited a significant and positive impact only on process innovation with an insignificant effect on product innovation. This finding concerning the limited influence of knowledge sharing on product innovation represents a critical discovery, warranting further investigation into the underlying reasons. It potentially highlights the need for a nuanced understanding of open innovation within the context of commercial banking.

Determinant Influencing Non-Performing Loans: A Story of Vietnamese Commercial Banks

This study aims to analyze the factors influencing non-performing loans (NPLs) in commercial banks during the period 2016-2022. The study utilized a sample of 16 joint-stock commercial banks in Vietnam. The authors employed three regression models: Pooled OLS, Fixed Effects Model (FEM), and Random Effects Model (REM), ultimately selecting REM as the most appropriate model. The results show that out of 5 variables, GDP and bank size have a negative impact on bad debt ratio. However, credit growth rate, credit loss provision and loan to total assets ratio have the same direction on NLPs.

The Effect of Credit Risk on the Financial Performance of Commercial Banks in Vietnam

The Effect of Credit Risk on the Financial Performance of Commercial Banks in Vietnam

The relationship between conscientiousness, openness to experience, knowledge-hiding behavior and job performance of employees

Purpose Knowledge-hiding behavior can lead to adverse consequences for individuals and organizations. Therefore, the purpose of this study is to examine the relationship between personality traits, knowledge-hiding behavior and job performance in the banking sector in Vietnam. Design/methodology/approach This study used a quantitative approach to test the proposed research model using a linear structural modeling method. Data were collected from 291 employees working in commercial banks in Vietnam using a direct survey instrument. Findings The conscientiousness personality trait exhibits a negative relationship with explicit knowledge-hiding behavior but demonstrates a positive association with tacit knowledge-hiding behavior. Openness to experience is negatively correlated with both explicit and tacit knowledge-hiding behaviors. Explicit knowledge-hiding behavior is negatively related to job performance, whereas tacit knowledge-hiding behavior has a positive relationship with job performance. Knowledge-hiding behavior played an intermediary role in the relationship between conscientiousness and job performance. Originality/value The extent to which employees engage in knowledge hiding depends on whether the knowledge is explicit or tacit. The impact of knowledge hiding on job performance is contingent upon the nature of hidden knowledge, whether explicit or tacit, and can either diminish or enhance job performance.

Monetary policy and risk of commercial banks in Vietnam

This study investigates the bank risk-taking channel of monetary policy transmission by comprehensively analyzing multiple bank risk measurements amid monetary policy shocks in Vietnam. Using banking data for 2008–2021, a dynamic panel model is estimated to examine the risk exposure of 30 Vietnamese commercial banks. The paper employs the annual M2 money supply growth as a monetary policy variable, besides two policy interest rates established by the central bank. We find that an expansion of monetary policy benefits the quality of loan portfolios; however, reduced interest rates or an extended money supply increase insolvency risk. We also document that heightened economic growth corresponds to a reduced likelihood of credit and insolvency risks, while a surge in the inflation rate leads to an escalation in insolvency risk, manifested by a decline in the Z-score index. Overall, the findings on different risk dimensions in this paper are expected to draw a comprehensive picture of banks’ risk appetite and behavior in response to monetary changes.

Factors Affecting the Ability to Repay Debts of Corporations at Commercial Banks

This study aims to estimate the influence of these factors on the ability of corporations to repay debts at commercial banks in Vietnam, especially in Ho Chi Minh City. Moreover, this study focuses on the period from 2018 to 2022. Hence, the effects of the COVID-19 pandemic were also examined in this study. In addition, this study employs a binary logistic regression method to analyze the extent of the factors' impact on the ability of corporate customers to repay debts. The results reveal that the model includes six statistically significant factors: collateral, loan term, income, firm size, leverage, net sales, and COVID-19. Furthermore, the model can be used to forecast corporations’ ability to repay debts, which could help commercial banks plan their loan strategies for corporate customers based on the significant results of the Hosmer-Lemeshow test. The study, on the other hand, only focused on some banks in the biggest city in the south of Vietnam, so further research on the area is needed, such as over Vietnam. Doi: 10.28991/ESJ-2024-08-03-016 Full Text: PDF

The impact of digital transformation on credit risk of commercial banks in Vietnam

In Vietnam, digital transformation has been considered as the leading strategy of commercial banks, especially in terms of credit risks. Therefore, they must identify how their digital transformation affects their credit risks to maintain effective operation and steady growth in a complex and changing market environment. Our study takes 29 commercial banks in Vietnam from 2014 to 2022 as the research object to test the impact of bank digital transformation on credit risk. In particular, the level of digital transformation of banks is measured by the ICT Index. The ICT Index is the official measure that evaluates the level of information technology application nationwide each year, with separate indicators for ministries and branches. Banks in Vietnam also use the ICT Index to assess their readiness and ability to apply information technology in the digital transformation process. Various regression models including Pooled Ordinary Least Squares (OLS), Fixed Effects Model (FEM), Random Effects Model (REM), Generalized Least Squares (GLS) are applied using STATA 17. Research results show that credit risk is affected by 5 factors: the information technology development and application readiness index (ICT Index), inflation rate (INF), return on equity (ROE), loans to customers (LOAN), and operational diversification (NIIC). On that basis, the study proposes recommendations for commercial banks to promote their digital transformation process. In addition, the state and policymakers also have appropriate measures to promote digital transformation in the Vietnamese banking system.

Factors Affecting Employee Performance in the Business Recovery Process at Listed Banks in Vietnam

Purpose: In recent years, many disruptions have occurred in the Vietnamese economy, which has caused listed banks to suffer many consequences, so listed banks must recognize the factors that promote recovery. Although studies on this issue have been conducted, the amount is quite limited and there is little focus on human resource factors. This empirical study was conducted to demonstrate the factors that affect employee performance and its impact on the recovery of business operations of listed banks. Design/methodology/approach: In this study, the author used questionnaires to collect data from 850 listed bank employees between 15th August 2023 and 26th December 2023. This study developed a questionnaire that used measures from many previous empirical studies to build a model to measure the impact of human resources on a company's ability to recover performance, using a five-point Likert-style scale (from 1 level equals to totally disagree; to 5 level equals to totally agree). After collecting data, this study used the SPL Smart application, to find the relationship between the role of human resources and the ability to recover business performance. From that analysis, the author will provide an objective perspective on the role of human resources in promoting the recovery performance of listed banks in Vietnam. Findings: Research results show that performance appraisal variables positively impact employee performance. On the other hand, career development and training and development do not affect employee performance. Finally, the analysis shows that there is a positive relationship between employee performance and business recovery at listed banks. Research limitations/implications: This study shows that human resources play a very important role in the recov-ery process of Vietnamese listed banks. Learning about the factors that influence employee performance will help banks align their HR strategies with organizational goals, ensuring that the workforce has the right skills and com-petencies necessary force. This process will help listed banks in Vietnam increase their ability to recover from disruptions and enhance their competitiveness. However, this study still has limitations including sample size and number of independent variables not large enough to show the importance of human resources in the recovery process of listed banks in Vietnam. Originality/value: This study contributes to emphasizing that human resources play an important key in the recov-ery process for Vietnamese listed banks. From an objective perspective, it provides insights into the role of human resources and factors to improve employee performance in listed banks.

The Impact of Emotional Intelligence and Transformational Leadership on Organizational Culture and Employee Performance in the Banking Industry in Vietnam

Purpose: The objective of this research is to evaluate the influence of emotional intelligence and transformational leadership on organizational culture and employee performance. Design/methodology/approach: Data was gathered from a total of 291 employees currently employed at banks in Vietnam via the use of Google Forms. Using PLS-SEM, or partial least squares structural equation modeling, to analyze the data. Findings: The findings revealed that emotional intelligence had a beneficial effect on organizational culture. Besides, the results demonstrated that transformational leadership also had a positive impact on organizational culture. The findings also revealed that organizational culture had a beneficial effect on employee performance. Research limitations/implications: These findings have significant implications for banking managers seeking to enhance employee performance. Originality/value: This important research contributes to improving our comprehension of the impact that emotional intelligence and transformational leadership exert on organizational culture and employee performance.