DIVERSIFICATION AND PERFORMANCE: THE CASE OF VIETNAMESE COMMERCIAL BANKS
DOI:
https://doi.org/10.61591/jslhu.24.980Keywords:
Đa dạng hóa; Hiệu quả ngân hàng; Tỷ suất lợi nhuận trên tổng tài sản; Tỷ suất lợi nhuận trên vốn chủ sở hữu; Ngân hàng thương mại Việt Nam.Abstract
This study examines the relationship between business diversification and the performance of Vietnamese commercial banks during the period 2016–2023. It focuses on three primary forms of diversification: income, asset, and geographical diversification; and investigates their impacts on bank performance, measured by return on assets (ROA) and return on equity (ROE). The dataset comprises 231 observations from the audited consolidated financial statements of 30 Vietnamese commercial banks, supplemented with macroeconomic data from Reuters and the World Bank. The System Generalized Method of Moments (SGMM) is employed to address potential endogeneity and dynamic panel bias arising from the inclusion of lagged dependent variables. The empirical results reveal that income diversification has a positive effect on ROA, while asset diversification improves ROE. Moreover, control variables such as asset quality (LLP/TL), cost efficiency (CIR), and Equity-to-Asset ratio (TE/TA) also exert significant influences on bank performance. These findings suggest that Vietnamese commercial banks should adopt sustainable diversification strategies - particularly in income and asset structures - combined with prudent risk management, advanced technological applications, and the development of high-quality human resources to enhance operational efficiency, increase profitability, and strengthen competitiveness in the context of global economic integration.
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