DETERMINANTS OF ASSET QUALITY IN VIETNAMESE COMMERCIAL BANKS
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DOI:
https://doi.org/10.34238/tnu-jst.14950Abstract
This study investigates the determinants of asset quality in Vietnamese commercial banks over the period 2014-2024. Using the Difference Generalized Method of Moments estimator applied to a panel dataset of 27 listed commercial banks, the findings show that the capital adequacy ratio has a significant negative effect on non-performing loans, indicating that banks with stronger capital buffers are better positioned to preserve asset quality. Conversely, lagged non-performing loans, loan loss provisions, and the cost-to-income ratio exert a positive effect on non-performing loans, suggesting that asset quality deterioration is persistent over time and is closely linked to weak internal governance. These findings underscore the pivotal role of internal management capacity in sustaining bank asset quality, implying that commercial banks should proactively strengthen their capital buffers and improve cost efficiency to mitigate credit risk and maintain sound asset quality in the long run.Downloads
References
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