Impact of Compliance with International Financial Reporting Standards on Loan Loss Provision in Vietnamese Commercial Banks

Abstract

This study examines the impact of compliance with International Financial Reporting Standards (IFRS) on credit risk provisions among commercial banks in Vietnam during the period 2014–2023. Utilizing financial statement data from 20 banks and employing the Generalized Method of Moments (GMM) estimation technique, the findings reveal a positive relationship between IFRS adoption and credit risk provisioning. These results not only highlight the role of IFRS in bank risk management but also provide valuable practical insights for executives to enhance forecasting capabilities and strengthen credit risk control more effectively.