Impact of investment activities on the financial performance of Vietnamese commercial banks


Authors

  • Nguyen Thuc Huong Giang School of Economics and Management - Hanoi University of Science and Technology
  • Trinh Thi Hue School of Economics and Management - Hanoi University of Science and Technology
  • Pham Thi Quynh Trang School of Economics and Management - Hanoi University of Science and Technology
  • Nguyen Thi Phuong Dung School of Economics and Management - Hanoi University of Science and Technology
  • Le Thao Linh School of Economics and Management - Hanoi University of Science and Technology
DOI: https://doi.org/10.57110/vnu-jeb.v4i3.343

Keywords:

Investment activities, financial performance, commercial banks, Vietnam

Abstract

This study examines the influence of investment activities on the financial performance of Vietnamese joint-stock commercial banks. Utilizing the Ordinary Least Squares (OLS) regression model for quantitative analysis and STATA17 statistical software, financial data from 24 joint-stock commercial banks spanning 2018 to 2022 are analyzed. The research examines the impact of investments in stocks, bonds, businesses, and real estate on key financial performance metrics such as Return on Assets (ROA) and Net Interest Margin (NIM). The findings indicate that the investment rate in bonds positively affects their financial performance whereas investments in real-estate have a negative influence. Investment in stocks show no significant influence on bank performance during the period due to erratic market fluctuations. However, investments in subsidiaries and other businesses only affects ROA. Beyond contributing to the theoretical framework of financial management in Vietnam’s banking sector, these results offer insights for policymakers and bank managers to refine investment strategies and optimize financial performance, thereby enhancing industry competitiveness.

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25-06-2024

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Nguyen Thuc Huong Giang, Trinh Thi Hue, Pham Thi Quynh Trang, Nguyen Thi Phuong Dung, & Le Thao Linh. (2024). Impact of investment activities on the financial performance of Vietnamese commercial banks. VNU JOURNAL OF ECONOMICS AND BUSINESS, 4(3), 21. https://doi.org/10.57110/vnu-jeb.v4i3.343

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