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Determinants of Vietnamese bank profitability: comparisons between before and during COVID-19 pandemic periods

Author

Listed:
  • Van Thi Hong Pham
  • Pham Tuan Anh
  • Kien Duy Do
  • Mai Thanh Loan

Abstract

The study aims to investigate the effect of the COVID-19 pandemic on the profitability of Vietnamese commercial banks by comparing the regression coefficient estimation results in the two periods before and during COVID-19. We find that the bank profitability is explained by size, equity ratio, provisioning ratio, non-interest service activities, and economic growth. An interesting finding is a change in the direction of the impact of leverage and economic growth on bank profitability. Banks with higher leverage tend to earn more profits in the pre-COVID-19 period, but it becomes a disadvantage for banks during the COVID-19 period. Economic growth has a negative effect on the bank profitability in the pre-COVID-19 period, but the relationship turns positive during the period of the COVID-19 pandemic. Based on these results, our paper proposes several solutions for governmental authorities and bank managers to improve bank profitability under the 'living together with COVID-19' context.

Suggested Citation

  • Van Thi Hong Pham & Pham Tuan Anh & Kien Duy Do & Mai Thanh Loan, 2024. "Determinants of Vietnamese bank profitability: comparisons between before and during COVID-19 pandemic periods," International Journal of Managerial and Financial Accounting, Inderscience Enterprises Ltd, vol. 16(4), pages 454-473.
    • Handle: RePEc:ids:injmfa:v:16:y:2024:i:4:p:454-473
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