Credit growth, liquidity and business performance of commercial banks listed on Vietnam stock market

Abstract

The thesis studies the relationship between liquidity, credit growth, and business performance of commercial banks through two financial indicators measuring average profitability: ROAA and ROAE. At the same time, the study also inherits and considers the domestic market, the independent variables proposed by the group in the research model includes: Credit Growth (CGR), Liquid Assets (LIQ), Money Growth Deposits (DEP), Deposit Ratio (DLR), Bank Size (SIZE), NPLs (NPL), Equity (CAP), Economic Growth (GDP) and Inflation (INF). Research on data for 2010 - 2021 of 24 commercial banks listed on the Vietnam stock market (UPCoM, HNX, and HoSE) includes 288 observations with 3456 data. The data are designed in an unbalanced tabular format. Apply FEM and REM, regression models. To be more specific in choosing an impact model, the authors choose a fixed effect model (FEM) or a random effect model (REM) through the Hausman test. The study is based on the correlation matrix to test the degree of correlation and the variance amplification factor (VIF) to consider the phenomenon of multicollinearity. In addition, the study carried out testing for model defects and endogenous processing by GMM estimation regression. Specifically, the quantitative results show that most correlations confirm the theory's accuracy and related previous research results. Some of the notable results obtained by the research team include the following: For variables representing internal bank factors: credit growth, liquidity, equity, total asset size, and proportion of deposits have a positive impact, and growth of deposits and bad debts have a positive effect. Adversely affects the performance of commercial banking. For variables representing external factors: Economic growth and inflation positively impact the business performance of commercial banks.