Determinants of Bank Stability in Emerging Economies: Empirical Evidence From Vietnam

Abstract

The thesis explores the main factors affecting the financial stability of commercial banks in Vietnam. It utilizes annual panel data from 27 banks listed on the Vietnamese Stock Exchange, covering the period from 2009 to 2023. Findings reveal that factors such as the equity-to-asset ratio (ETA), bank size (SIZE), return on equity (ROE), and ownership structure (OWN) positively correlate with financial stability, whereas non- performing loans (NPL) negatively affect it. The impact of net interest margin (NIM) and loan-to-deposit ratio (LDR) on stability remains inconclusive. Among macroeconomic factors, the inflation rate (INF) positively influences financial stability, while GDP growth (GDP) does not have a significant effect. Additionally, COVID-19 variables showed no significant association with financial stability.