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Published: 2023-10-25
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DOI: https://doi.org/10.52932/jfm.vi5.336
Issue
Vol. 14, issue 5
Section
Research Articles
How to Cite
Sơn, T. V. . (2023). Impact of competition on the profitability of commercial bank of Vietnam. Journal of Finance and Marketing, 14(5), 84-97. https://doi.org/10.52932/jfm.vi5.336

Impact of competition on the profitability of commercial bank of Vietnam

To Vinh Son1
1 Bac Lieu University

Main Article Content

Abstract

This study aims to analyze the impact of competition on the performance of joint stock commercial banks in Viet Nam, using unbalanced panel data, including 390 observations of 30 banks from 2008-2020. This study uses regression methods of fixed effects model, random effects model. Through the Hausman test to choose an appropriate estimation method to test the impact of competition factors on the performance of joint stock commercial banks. The research results also show that as the level of competition increases, the bank is less profitable in terms of ROA and ROE but more efficient in terms of net profit. In addition, banks can take advantage of size, capital, lending, bank liquidity to improve their financial performance. From the research results, we suggest several policy implications, such as the need for banks to increase competitiveness, size, liquidity, and control the use of financial leverage, strengthen loan supervision, and help banks improve profitability. Furthermore, bank profitability is not only affected by internal factors but also by external factors. The macroeconomic environment, such as economic growth and inflation, affects a bank’s profitability. Therefore, to increase profitability, commercial banks need to focus on not only controlling internal factors but also based on the external macroeconomic situation to make appropriate adjustments

Article Details

Keywords

Commercial banks, Competition, Profitability

References

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