EFFICIENCY OF RESTRUCTURING COMMERCIAL BANKS IN VIETNAM FROM 2006 TO 2014

Abstract

Restructuring policy aims to fundamentally change banking operations in Viet Nam commercial bank system. This study focuses on the relationship between restructuring and factors affecting the profitability of commercial banks in Vietnam. Data were collected from the financial reports of 20 commercial banks in Vietnam for years 2006-2014. The results showed a positive correlation between returns over total asset (ROA) and the ratio of equity over total assets, size of the bank, and economic growth were inversely correlated with the restructuring while ratio of outstanding loans over total assets, nonperforming loans over total loans and inflation were not significant in our model. Returns on equity (ROE) was positively correlated with size of the bank, economic growth, inflation while negatively correlated with ratio of nonperforming loans over total loans, equity over total assets, and bank restructuring. The result showed that commerical banks were underpressured of the bank restructuring policy as banks' profitability recorded a lower rate after the restructuring policy implemented.

Keywords: Commercial Bank, restructuring policy, profitability, Vietnam.