FACTORS AFFECTING BAD DEBT RATIO AT JOINT STOCK COMMERCIAL BANKS IN VIETNAM
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Published:
Jun 29, 2022
Keywords:
bad debt, bad debt ratio, credit risk, joint stock commercial bank
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Abstract
This study analyzes factors affecting bad debt ratio at joint-stock commercial banks in Vietnam. The research collected data from reports of 26 Vietnamese joint-stock commercial banks operating continuously from 2010 to 2020. The research results show the bank size and ratio, bad debt in the previous year, and provision for credit risks had a positive effect on the bad debt ratio of banks. At the same time, the research results show that the inflation rate, unemployment rate, and exchange rate negatively affect the bad debt ratio of banks. In addition, the research results show that GDP growth, credit growth, bank profitability, and nominal interest
rates show no clear impacts on the bad debt ratio of banks. From obtained results, the study proposes suggestions and recommendations to limit the bad debt ratio of banks.
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1.
Tran V. FACTORS AFFECTING BAD DEBT RATIO AT JOINT STOCK COMMERCIAL BANKS IN VIETNAM. journal [Internet]. 29Jun.2022 [cited 16Apr.2024];12(47):21-8. Available from: https://journal.tvu.edu.vn/index.php/journal/article/view/918
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credit risk: The case of Tunisia. Journal of Accounting
and Taxation. 2011;3(4): 70–78.
[22] Boudriga. Does bank supervision impact
nonperforming loans: cross-country determinants using aggregatedata?. MPRA
paper 18068. 2009. https://mpra.ub.unimuenchen.de/18068/1/MPRA_paper_18068.pdf.
[Accessed 25th March 2022].
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[2] Kwambai KD, Wandera M. Effects of credit information sharing on nonperforming loans: the case of
Kenya commercial bank Kenya. European Scientific
Journal. 2013;9(13).
[3] Ngân hàng Nhà nước Việt Nam. Báo cáo thường niên
các năm 2010, 2011, 2012, 2013, 2014, 2015, 2016,
2017, 2018, 2019, 2020. [State Bank of Vietnam.
Annual reports for the years 2010, 2011, 2012, 2013,
2014, 2015, 2016, 2017, 2018, 2019, 2020. Hanoi;
2020].
[4] Võ Thị Quý, Bùi Ngọc Toản. Các yếu tố ảnh hưởng
đến rủi ro tín dụng của hệ thống ngân hàng thương
mại Việt Nam. Tạp chí Khoa học Trường Đại học
Mở Thành phố Hồ Chí Minh. 2014;3: 16–25. [Vo Thi
Quy, Bui Ngoc Toan. The determinants of credit risk
– a study in Vietnamese commercial bank system. Ho
Chi Minh City Open University Journal of Science.
2014;3: 16–25].
[5] Đỗ Quỳnh Anh, Nguyễn Đức Hùng. Phân tích
thực tiễn về những yếu tố quyết định đến
nợ xấu tại các ngân hàng thương mại Việt
Nam. http://vepr.org.vn/seminar-nghien-cuu-kinhte-va-chinh-sach-so-07.html [Ngày truy cập: 25/3/2022]. [Do Quynh Anh, Nguyen Duc
Hung. Analysis of the factors determining nonperforming loans in Vietnamese commercial banks.
http://vepr.org.vn/seminar-nghien-cuu-kinh-tevachinh-sach-so-07.html [Accessed 25th March 2022]].
[6] Messai AS, Jouini F. Determinants of Nonperforming Loans. International Journal of Economics and
Financial Issue. 2013;4: 852–860.
[7] Shu C. The Impact of macroeconomic environment
on the asset quality of Hong Kong’s banking sector.
Hong Kong Monetary Authority; 2002. 1–26.
[8] Salas V, Saurina J. Credit risk in two institutional
regimes: Spanish commercial and savings banks. J.
Financ. Serv. Res. 2002;22: 203–224.
[9] Skarica B. Determinants of non-performing loans in ˇ
Central and Eastern European countries. Financial
Theory and Practice. 2014;38(1): 37–59.
[10] Ekanayake EMNN, Azeez AA. Determinants of non
performing loans in licensed commercial banks: Evidence from Srilanka. Asian Economic and Financial
Review. 2015;5(6): 868–882.
[11] Castro V. Macroeconomic determinants of the credit
risk in the banking system. The case of the GIPSI.
Economic Modelling. 2013;31: 672–683.
[12] Bofondi M, Ropele T. Macroeconomic determinants
of bad loans: evidence from Italian Banks. Bank of
Italy Occasional Paper. 2011; 89.
[13] Godlewski C. Capital Regulation and Credit Risk
Taking: Empirical Evidence from Banks in Emerging Market Economies. Strasbourg: EconWPA; 2004.
http://dx.doi.org/10.2139/ssrn.588163.
[14] Jin-Li Hu, Yang Li, Yung-Ho Chiu. Ownership and
nonperforming loans: Evidence from Taiwan’s banks.
The Developing Economies. 2004;42(3): 405–420.
[15] Somanadevi Thiagarajan, S. Ayyappan, A. Ramachandran. Credit risk determinants of public and private sector banks in India. European Journal of
Economics, Finance and Administrative Sciences.
2011;34: 147–154.
[16] Hess K, Grimes A, Holmes M. Credit losses in Australasian banking. Economic Record. 2009;85(270):
331–343.
[17] Fadzlan Sufian, Royfaizal R. Chong. Determinants of
bank profitability in a developing economy: Empirical
evidences from the Philippines. Asian Academy of
Management Journal of Accounting and Financial.
2008;4(2): 91–112.
[18] Clair RT. Loan growth and loan quality: Some preliminary evidence from Texas banks. Federal Reserve
Bank of Dallas Economic Review. 1992;3: 9–22.
[19] Garcia-Marco T, Robles-Fernandez MD. Risk-taking
behaviour and ownership in the banking industry:
The Spanish evidence. Journal of Economics and
Business. 2008;4: 332–354.
[20] Luc Laeven, Giovanni Majnoni. Loan loss provisioning and economic slowdowns: Too Much, too Late?.
Journal of Financial Intermediation. 2002;12: 178–
197.
[21] Nabila Z, Younes BN. The factors influencing bank
credit risk: The case of Tunisia. Journal of Accounting
and Taxation. 2011;3(4): 70–78.
[22] Boudriga. Does bank supervision impact
nonperforming loans: cross-country determinants using aggregatedata?. MPRA
paper 18068. 2009. https://mpra.ub.unimuenchen.de/18068/1/MPRA_paper_18068.pdf.
[Accessed 25th March 2022].