Doan Thanh Ha1, Hoang Thi Thanh Hang2

(1. Department of Finance, Banking University of Hochiminh City, Vietnam;

2. Business Administration Faculty, Banking University of Hochiminh City, Vietnam)

 

 

Abstract: This research investigates the determinants of non-performing loan (NPL) in the banking system of Vienam. We employed panel data analysis with fixed effect and random effect estimation for 29 Vietnamese commercial banks for the period from 2005 to 2014. The empirical results suggest that NPL was determined by both macroeconomic variables and bank-specific characteristics. Specifically, the economic growth, inflation, bank profitability, liquidity and credit growth significantly affect bank credit risk via rising NPL. From these results, we suggest important policy implication for the State Bank of Vietnam and bank managers in reducing NPLs.

 

 

Key words: credit risk; non-performing loan–NPL; macroeconomic variables; bank-specific characteristics

JEL code: G