Credit Risk Management and Bank Stability

Abstract

Through the secondary data collected from 2014 to 2019, the researchused POOL, FEM, REM, and GMM methods to test the impact ofprofitability on the stability of the Vietnam commercial bank system.The main findings of this research indicated that bank profitability hasa significant effect and is positively related to bank stability with highsignificance, liquidity, capital ratio, efficiency ratio, and bank size. Non-performing loans have a negative relationship with profitability witha high significance. The result also revealed a significant and positiverelationship between bank size, capital ratio, and bank stability withhigh significance, while credit risk has a negative relationship with bankstability. From the results, the research proposed implications for bankmanagement strategy.