The impact of credit risk on the business performance of commercial banks in Vietnam
DOI:
https://doi.org/10.56097/binhduonguniversityjournalofscienceandtechnology.v8i2.316Keywords:
Hiệu quả kinh doanh; Mô hình hồi quy; Nợ xấu; Ngân hàng thương mại; Quản lý rủi ro; Rủi ro tín dụngAbstract
This study examines the impact of credit risk on the business performance of commercial
banks in Vietnam from 2013 to 2023. Commercial banks play a crucial role in the modern economy, not
only as financial intermediaries but also as key providers of credit to the economy. Credit activities
constitute a significant portion of banks' income, making credit risk management essential for evaluating
their business performance. This research employs quantitative regression models, including the Pool
(OLS), Fixed Effects Model (FEM), Random Effects Model (REM), and Feasible Generalized Least
Squares (FGLS), to analyze data from 27 commercial banks operating in Vietnam. The findings indicate
that credit risk significantly impacts the banks' business performance, especially in terms of managing
bad debts and credit provisions. Based on these results, the study proposes solutions to mitigate credit risk
and improve business performance, contributing to the stability and sustainable development of the
banking system in Vietnam.
