IMPACTS OF NON-INTEREST INCOME ON RISKS AND PROFITABILITY IN VIETNAM’S COMMERCIAL BANKS
Keywords:Commercial banks, Non-interest income, Profitability, Risk, Vietnam.
AbstractUsing accounting data from 26 Vietnamese commercial banks over the period from 2008 to 2016, this article applies the panel data analysis method to investigate the impacts of non-interest income on risks and profitability for Vietnam banking industry. Research results indicate that non-interest activities of Vietnamese commercial banks increase the profitability, but do not impact on the risks. Based on the results of this study, some recommendations related to policies are given to enhance the operational efficiency of Vietnam’s commercial banking system.
Apergis, N. (2014). The long-term role of non-traditional banking in profitability and risk profiles: Evidence from a panel of U.S. banking institutions. Journal of International Money, 45, 61-73.
Berger, A., Hasan, I., & Zhou, M. (2010). The effects of focus versus diversification on bank performance: Evidence from Chinese banks. Journal of Banking & Finance, 34, 1417-1435.
Busch, R., & Kick, T. (2015). Income structure and bank business models: Evidence on performance and stability from the German banking industry. Schmalenbach Business Review, 67(2), 226-253.
Chính phủ. (2012). Quyết định phê duyệt đề án "Cơ cấu lại hệ thống các tổ chức tín dụng gia đoạn 2011-2015". Hà Nội, Việt Nam: Văn phòng Chính phủ.
Delpachitra, S., & Lester, L. (2013). Non-interest income: Are Australian banks moving away from their traditional businesses? Economics Papers, 32, 190-199.
Edirisuriya, P., Gunasekarage, A., & Dempsey, M. (2015). Australian specific bank features and the impact of income diversification on bank performance and risk. Australian Economic Papers, 54(2), 63-87.
Haw, I., Ho, S., Hu, B., & Wu, D. (2010). Concentrated control, institutions, and banking sector: An international study. Journal of Banking and Finance, 34, 485-497.
Jaffar, K., Mabwe, K., & Webb, R. (2014). Changing bank income structure: Evidence from large UK banks? Asian Journal of Finance & Accounting, 6, 195-215.
Lê, H. L., & Phạm, Q. X. (2017). Ảnh hưởng của thu nhập ngoài lãi đến hiệu quả kinh doanh của các ngân hàng thương mại Việt Nam giai đoạn 2006-2016. Tạp chí Ngân hàng, (9), 13-17.
Lee, C., Huang, W., & Yin, C. (2013). The dynamic interactions among the stock, bond and insurance markets. North American Journal of Economics and Finance, 26, 28-52.
Lee, C. C., Yang, S. J., & Chang, C. H. (2014). Non-interest income, profitability, and risk in banking industry: A cross-country analysis. North American Journal of Economics and Finance, 27, 48-67.
Lepetit, L., Nys, E., Rous, P., & Tarazi, A. (2008). Bank income structure and risk: An empirical analysis of European banks. Journal of Banking & Finance, 32, 1452-1467.
Li, L., & Zhang, Y. (2013). Are there diversification benefits of increasing noninterest income in the Chinese banking industry? Journal of Empirical Finance, 24, 151-165.
Maudos, J. (2017). Income structure, profitability and risk in the European banking sector: The impact of the crisis. Research in International Business and Finance, 39, 85-101.
Mercieca, S., Schaeck, K., & Wolfe, S. (2007). Small European banks: Benefits from diversification? Journal of Banking & Finance, 31, 1975-1998.
Nguyen, C. T., Vo, D. V., & Nguyen, C. (2015). Risk and income diversification in the Vietnamese banking system. Journal of Applied Finance & Banking, 5, 99-115.
Nguyen, J. (2012). The relationship between net interest margin and noninterest income using a system estimation approach. Journal of Banking & Finance, 36, 2429-2437.
Saunders, A., Schmid, M., & Walter, I. (2014). Non-interest income and bank performance: Does ring-fencing reduce bank risk? (Working Paper No. 1417). Retrieved from https://ideas.repec.org/p/usg/sfwpfi/201417.html.
Shiers, A. (2002). Branch banking, economic diversity and bank risk. The Quarterly Review of Economics and Finance, 42, 587-598.
Singh, K., Upadhyay, Y., Singh, S., & Singh, A. (2016). Impact of non-interest income on risk and profitability of banks in India. Annual International Seminar Proceedings, 17, 997-1007.
Stiroh, K., & Rumble, A. (2006). The dark side of diversification: The case of US financial holding companies. Journal of Banking & Finance, 30(8), 2131-2161.
Williams, B. (2016). The impact of non-interest income on bank risk in Australia. Journal of Banking & Finance, 73, 16-37.
Volume and Issues
Copyright & License
Copyright (c) 2018 Nguyễn Minh Sáng, Nguyễn Thị Thùy Trang
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.