Impact of covid 19 on business efficiency of Vietnam commercial banks
Main Article Content
Abstract
The purpose of this research is to study the impact of the Covid-19 pandemic on the business efficiency of Vietnam's commercial banks. The business performance of commercial banks is measured by the return on equity (ROE) and the return on total assets (ROA). The panel data regression method is used to test the impact of Covid-19 on the business performance of Vietnamese commercial banks on the basis of a system of secondary data collected from 21 banks in the period 2012–2021. The estimated results show that Covid-19 has negatively affected, significantly reducing the business efficiency of Vietnamese commercial banks. In addition, the study also showed that the business performance of banks is affected by the ratio of equity to total assets, the capacity to manage credit risk costs. It is recommended that managers have appropriate response solutions (such as expanding investment activities, strengthening risk management, increasing the size of capital and assets) to improve business efficiency when the epidemic is still likely to last but still ensure capital support for organizations and individuals to overcome difficulties after the Covid-19 pandemic.
Article Details
Keywords
Business efficiency, Commercial banking, Covid-19
References
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Anbar, A., & Alper, D. (2011). Bank specific and macroeconomic determinants of commercial bank profitability: Empirical evidence from Turkey. Business and economics research journal, 2(2), 139-152.
Athanasoglou, P. P., Brissimis, S. N., & Delis, M. D. (2008). Bank-specific, industry-specific and macroeconomic determinants of bank profitability. Journal of international financial Markets, Institutions and Money, 18(2), 121-136.
Athanasoglou, P., Brissimis, S., & Delis, M. (2005). Bank-specific, industry-specific and macroeconomic determinants of bank profitability. University Library of Munich, Germany.
Athanasoglou, P., Delis, M., & Staikouras, C. (2006). Determinants Of Bank Profitability In The South Eastern European Region (No. 10274). University Library of Munich, Germany.
Beck, N., & Katz, J. N. (1995). What to do (and not to do) with time-series cross-section data. American political science review, 89(3), 634-647.
Berger, A. & Humphrey, D. (1987). The effect of the firm’s capital structure on the systematic risk of common stocks. Journal of Finance, 27(2), 435–452.
Berger, A. N. (1995). The relationship between capital and earnings in banking. Journal of money, credit and Banking, 27(2), 432-456.
Bessis, J. (2011). Risk management in banking. John Wiley & Sons..
Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of econometrics, 87(1), 115-143.
Bobáková, I. V. (2003). The Federal Reserve Banks, imputed cost of equity capital. Federal Reserve Bank of New York Economic Policy Review, 9, 55–81.
Breusch, T. S., & Pagan, A. R. (1980). The Lagrange multiplier test and its applications to model specification in econometrics. The review of economic studies, 47(1), 239-253.
Casu, B., Girardone, C., & Molyneux, P. (2006). Introduction to banking (Vol. 10). Pearson education..
Coase, R. H. (1937). The nature of the firm. Economica, 4(16), 386-405.
Cooper, M. J., Jackson III, W. E., & Patterson, G. A. (2003). Evidence of predictability in the cross-section of bank stock returns. Journal of Banking & Finance, 27(5), 817-850.
Graham, J. R., & Harvey, C. R. (2001). The theory and practice of corporate finance: Evidence from the field. Journal of financial economics, 60(2-3), 187-243.
Demirgüç-Kunt, A., & Huizinga, H. (1999). Determinants of commercial bank interest margins and profitability: some international evidence. The World Bank Economic Review, 13(2), 379-408.
Demirgüç-Kun, A. & Huizinga, H. (2012). Do we need big banks? Evidence on performance, strategy and market discipline. Bank for International Settlements.
Dietrich, A., & Wanzenried, G. (2014). The determinants of commercial banking profitability in low-, middle-, and high-income countries. The Quarterly Review of Economics and Finance, 54(3), 337-354.
Disemadi, H. S., & Shaleh, A. I. (2020). Banking credit restructuring policy on the impact of COVID-19 spread in indonesia. Jurnal Inovasi Ekonomi, 5(02), 63-70.
Duca, J. V., & McLaughlin, M. M. (1990). Developments affecting the profitability of commercial banks. Fed. Res. Bull, 76(7), 477–499.
Gul, S., Irshad, F., & Zaman, K. (2011). Factors Affecting Bank Profitability in Pakistan. Romanian Economic Journal, 14(39), 61-87.
Bashir, A. M., & Hassan, M. K. (2003, December). Determinants of Islamic banking profitability. In presented on the ERF 10th Annual Conference. http://www. erf. org. eg/tenthconf/Financial_Markets_Presented/Kabir_Bashir. pdf.
Heid, F., Porath, D., & Stolz, S. (2004). Does capital regulation matter for bank behaviour? Evidence for German savings banks (No. 2004, 03). Deutsche Bundesbank.
Hoechle, D. (2007). Robust standard errors for panel regressions with cross-sectional dependence. The Stata journal, 7(3), 281-312.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360.
Lee, C. C., & Hsieh, M. F. (2013). The impact of bank capital on profitability and risk in Asian banking. Journal of International Money and Finance, 32(1), 251-281.
Micco, A., Panizza, U., & Yanez, M. (2007). Bank ownership and performance. Does politics matter?. Journal of Banking & Finance, 31(1), 219-241.
Miller, S. M., & Noulas, A. G. (1997). Portfolio mix and large-bank profitability in the USA. Applied Economics, 29(4), 505-512.
Molyneux, P., & Thornton, J. (1992). Determinants of European bank profitability: A note. Journal of banking & Finance, 16(6), 1173-1178.
Naceur, S. B., & Kandil, M. (2009). The impact of capital requirements on banks’ cost of intermediation and performance: The case of Egypt. Journal of Economics and Business, 61(1), 70-89.
Naceur, S. B., & Omran, M. (2011). The effects of bank regulations, competition, and financial reforms on banks' performance. Emerging markets review, 12(1), 1-20.
Naceur, S. B. (2003). The determinants of the Tunisian banking industry profitability: Panel evidence. Universite Libre de Tunis working papers, 10. http://www.mafhoum.com/press6/174E11.pdf.
Nguyễn Thị Thái Hưng (2021). Những khó khăn của ngành ngân hàng trong bối cảnh đại dịch Covid-19. Tạp chí Thị trường Tài chính Tiền tệ. https://thitruongtaichinhtiente.vn/nhung-kho-khan-cua-nganh-ngan-hang-trong-boi-canh-dai-dich-covid-19-38827.html.
Pasiouras, F., & Kosmidou, K. (2007). Factors influencing the profitability of domestic and foreign commercial banks in the European Union. Research in International Business and Finance, 21(2), 222-237.
Perera, S., Skully, M., & Wickramanayake, J. (2007). Cost efficiency in South Asian banking: The impact of bank size, state ownership and stock exchange listings. International Review of Finance, 7(1‐2), 35-60.
Perry, P. (1992). Do banks gain or lose from inflation?. Journal of retail banking, 14(2), 25-31.
Rasiah, D. (2010). Theoretical framework of profitability as applied to commercial banks in Malaysia. European Journal of Economics, Finance and Administrative Sciences, 19(19), 75-97.
Revell, J. (1979). Inflation & Financial Institutions. Financial Times Limited.
Ross, S. A. (1977). The determination of financial structure: the incentive-signalling approach. The Bell Journal of Economics, 8(1), 23-40.
Saeed, M. S. (2014). Bank-related, industry-related and macroeconomic factors affecting bank profitability: A case of the United Kingdom. Research journal of finance and accounting, 5(2), 42-50.
Sastrosuwito, S., & Suzuki, Y. (2012). The determinants of post-crisis Indonesian banking system profitability. Economics and finance review, 1(11), 48-57.
Sufian, F., & Chong, R. R. (2008). Determinants of Bank Profitability in a Developing Economy: Empirical Evidence from the Philipinnes. Asian Academy of Management Journal of Accounting and Finance (AAMJAF), 4(2), 91-112.
Trịnh Xuân Hoàng (2021). Tác động của đại dịch COVID-19 đến hoạt động của các ngân hàng niêm yết trên sàn chứng khoán Việt Nam. Tạp chí Tài chính, 2. https://tapchitaichinh.vn/ngan-hang/tac-dong-cua-dai-dich-Covid-19-den-hoat-dong-cua-cac-ngan-hang-niem-yet-tren-san-chung-khoan-338321.html.
Yusuf, M., & Ichsan, R. N. (2021). Analysis of Banking Performance in The Aftermath of The Merger of Bank Syariah Indonesia in Covid 19. International Journal of Science, Technology & Management, 2(2), 472-478.
Anbar, A., & Alper, D. (2011). Bank specific and macroeconomic determinants of commercial bank profitability: Empirical evidence from Turkey. Business and economics research journal, 2(2), 139-152.
Athanasoglou, P. P., Brissimis, S. N., & Delis, M. D. (2008). Bank-specific, industry-specific and macroeconomic determinants of bank profitability. Journal of international financial Markets, Institutions and Money, 18(2), 121-136.
Athanasoglou, P., Brissimis, S., & Delis, M. (2005). Bank-specific, industry-specific and macroeconomic determinants of bank profitability. University Library of Munich, Germany.
Athanasoglou, P., Delis, M., & Staikouras, C. (2006). Determinants Of Bank Profitability In The South Eastern European Region (No. 10274). University Library of Munich, Germany.
Beck, N., & Katz, J. N. (1995). What to do (and not to do) with time-series cross-section data. American political science review, 89(3), 634-647.
Berger, A. & Humphrey, D. (1987). The effect of the firm’s capital structure on the systematic risk of common stocks. Journal of Finance, 27(2), 435–452.
Berger, A. N. (1995). The relationship between capital and earnings in banking. Journal of money, credit and Banking, 27(2), 432-456.
Bessis, J. (2011). Risk management in banking. John Wiley & Sons..
Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of econometrics, 87(1), 115-143.
Bobáková, I. V. (2003). The Federal Reserve Banks, imputed cost of equity capital. Federal Reserve Bank of New York Economic Policy Review, 9, 55–81.
Breusch, T. S., & Pagan, A. R. (1980). The Lagrange multiplier test and its applications to model specification in econometrics. The review of economic studies, 47(1), 239-253.
Casu, B., Girardone, C., & Molyneux, P. (2006). Introduction to banking (Vol. 10). Pearson education..
Coase, R. H. (1937). The nature of the firm. Economica, 4(16), 386-405.
Cooper, M. J., Jackson III, W. E., & Patterson, G. A. (2003). Evidence of predictability in the cross-section of bank stock returns. Journal of Banking & Finance, 27(5), 817-850.
Graham, J. R., & Harvey, C. R. (2001). The theory and practice of corporate finance: Evidence from the field. Journal of financial economics, 60(2-3), 187-243.
Demirgüç-Kunt, A., & Huizinga, H. (1999). Determinants of commercial bank interest margins and profitability: some international evidence. The World Bank Economic Review, 13(2), 379-408.
Demirgüç-Kun, A. & Huizinga, H. (2012). Do we need big banks? Evidence on performance, strategy and market discipline. Bank for International Settlements.
Dietrich, A., & Wanzenried, G. (2014). The determinants of commercial banking profitability in low-, middle-, and high-income countries. The Quarterly Review of Economics and Finance, 54(3), 337-354.
Disemadi, H. S., & Shaleh, A. I. (2020). Banking credit restructuring policy on the impact of COVID-19 spread in indonesia. Jurnal Inovasi Ekonomi, 5(02), 63-70.
Duca, J. V., & McLaughlin, M. M. (1990). Developments affecting the profitability of commercial banks. Fed. Res. Bull, 76(7), 477–499.
Gul, S., Irshad, F., & Zaman, K. (2011). Factors Affecting Bank Profitability in Pakistan. Romanian Economic Journal, 14(39), 61-87.
Bashir, A. M., & Hassan, M. K. (2003, December). Determinants of Islamic banking profitability. In presented on the ERF 10th Annual Conference. http://www. erf. org. eg/tenthconf/Financial_Markets_Presented/Kabir_Bashir. pdf.
Heid, F., Porath, D., & Stolz, S. (2004). Does capital regulation matter for bank behaviour? Evidence for German savings banks (No. 2004, 03). Deutsche Bundesbank.
Hoechle, D. (2007). Robust standard errors for panel regressions with cross-sectional dependence. The Stata journal, 7(3), 281-312.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360.
Lee, C. C., & Hsieh, M. F. (2013). The impact of bank capital on profitability and risk in Asian banking. Journal of International Money and Finance, 32(1), 251-281.
Micco, A., Panizza, U., & Yanez, M. (2007). Bank ownership and performance. Does politics matter?. Journal of Banking & Finance, 31(1), 219-241.
Miller, S. M., & Noulas, A. G. (1997). Portfolio mix and large-bank profitability in the USA. Applied Economics, 29(4), 505-512.
Molyneux, P., & Thornton, J. (1992). Determinants of European bank profitability: A note. Journal of banking & Finance, 16(6), 1173-1178.
Naceur, S. B., & Kandil, M. (2009). The impact of capital requirements on banks’ cost of intermediation and performance: The case of Egypt. Journal of Economics and Business, 61(1), 70-89.
Naceur, S. B., & Omran, M. (2011). The effects of bank regulations, competition, and financial reforms on banks' performance. Emerging markets review, 12(1), 1-20.
Naceur, S. B. (2003). The determinants of the Tunisian banking industry profitability: Panel evidence. Universite Libre de Tunis working papers, 10. http://www.mafhoum.com/press6/174E11.pdf.
Nguyễn Thị Thái Hưng (2021). Những khó khăn của ngành ngân hàng trong bối cảnh đại dịch Covid-19. Tạp chí Thị trường Tài chính Tiền tệ. https://thitruongtaichinhtiente.vn/nhung-kho-khan-cua-nganh-ngan-hang-trong-boi-canh-dai-dich-covid-19-38827.html.
Pasiouras, F., & Kosmidou, K. (2007). Factors influencing the profitability of domestic and foreign commercial banks in the European Union. Research in International Business and Finance, 21(2), 222-237.
Perera, S., Skully, M., & Wickramanayake, J. (2007). Cost efficiency in South Asian banking: The impact of bank size, state ownership and stock exchange listings. International Review of Finance, 7(1‐2), 35-60.
Perry, P. (1992). Do banks gain or lose from inflation?. Journal of retail banking, 14(2), 25-31.
Rasiah, D. (2010). Theoretical framework of profitability as applied to commercial banks in Malaysia. European Journal of Economics, Finance and Administrative Sciences, 19(19), 75-97.
Revell, J. (1979). Inflation & Financial Institutions. Financial Times Limited.
Ross, S. A. (1977). The determination of financial structure: the incentive-signalling approach. The Bell Journal of Economics, 8(1), 23-40.
Saeed, M. S. (2014). Bank-related, industry-related and macroeconomic factors affecting bank profitability: A case of the United Kingdom. Research journal of finance and accounting, 5(2), 42-50.
Sastrosuwito, S., & Suzuki, Y. (2012). The determinants of post-crisis Indonesian banking system profitability. Economics and finance review, 1(11), 48-57.
Sufian, F., & Chong, R. R. (2008). Determinants of Bank Profitability in a Developing Economy: Empirical Evidence from the Philipinnes. Asian Academy of Management Journal of Accounting and Finance (AAMJAF), 4(2), 91-112.
Trịnh Xuân Hoàng (2021). Tác động của đại dịch COVID-19 đến hoạt động của các ngân hàng niêm yết trên sàn chứng khoán Việt Nam. Tạp chí Tài chính, 2. https://tapchitaichinh.vn/ngan-hang/tac-dong-cua-dai-dich-Covid-19-den-hoat-dong-cua-cac-ngan-hang-niem-yet-tren-san-chung-khoan-338321.html.
Yusuf, M., & Ichsan, R. N. (2021). Analysis of Banking Performance in The Aftermath of The Merger of Bank Syariah Indonesia in Covid 19. International Journal of Science, Technology & Management, 2(2), 472-478.
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