Determinants of Factors Affecting to Profitability Ratio of Listed Commercial Banks in Vietnam

Abstract

The purpose of this research is about to analyzing the effects of internal factors and macroeconomic factors of
the economy on the profitability ratio of joint stock commercial banks (JSBs) listed on Vietnam’s stock market.
In particular, this research considers the impacts of financial crisis 2008-2010 on the rate of return of listed
commercial joint stock commercial banks in Vietnam. The research uses the data panel with two regression
models, the Fixed Effect Model (FEM) and the Random Effect Model (REM) to measure the impact of factors and
financial crisis 2008-2010 in return on equity through return on equity (ROE), return on assets (ROA). Regression
results demonstrate that, the factors that have positive effects on ROE, ROA such as interest income, non-interest
income, inflation, negative effects on ROE, ROA such as customer-loan. Beside these factors, there are also
different influencing factors for ROA, ROE as equity that has a positive effect on ROA but has a negative impact
on ROE, liquidity that negatively affects ROA but no impact on ROE. In conclusion, the results also demonstrate
that financial crisis has negative impact on the rate of return of listed commercial joint stock banks in Vietnam with
a certain latency