Impact of Social Responsibility on the Financial Performance of Commercial Banks

Abstract

The paper investigates the effect of corporate social responsibility (CSR) disclosure on the performance of Vietnamese commercial banks from 2013 to 2022. Utilizing the Generalized Method of Moments (GMM) approach, the findings indicate that CSR disclosure has the potential to enhance a bank's financial performance. However, the impact is not uniform across all components of CSR implementation. Specifically, factors such as credibility, operational practices, product responsibility, environmental performance, and an organization's sustainability strategy positively influenced the Return on Average Assets (ROAA). Additionally, variables including bank size, equity, and non-interest expenses were also identified as significant determinants of ROAA. Based on these findings, the study proposes several recommendations to improve commercial banks' operational efficiency in the future.