Open AccessFactors Affecting Bank Risks in Vietnam
Author(s) -
Phuong Anh Nguyen,
Thi Thuy Trang Dinh
Publication year - 2021
Publication title -
international journal of economics and finance
Language(s) - English
Resource type - Journals
eISSN - 1916-9728
pISSN - 1916-971X
DOI - 10.5539/ijef.v13n10p42
Subject(s) - capital adequacy ratio , return on equity , business , loan , non performing loan , market liquidity , capitalization , credit risk , bank rate , financial system , return on assets , insolvency , risk weighted asset , interest rate risk , economics , interest rate , monetary economics , actuarial science , finance , central bank , profitability index , monetary policy , capital formation , profit (economics) , linguistics , philosophy , financial capital , microeconomics , economic growth , human capital
The research identifies the determinants of credit risk and insolvency risk in the Vietnamese banking sector. Using the data sample of 25 commercial banks over ten years (2008-2017), we examine the relationship between internal variables, external variables, and bank risks. In this study, the independent variables are bank size, bank capitalization, return on asset, return on equity, loan loss provision, capital adequacy ratio, inflation rate, and GDP growth rate. In contrast, non-performing loans and Z-score are the dependent variables. The empirical results show that all factors have an effect on bank risks except liquidity ratio.