Analysis of Banking Sector in Vietnam with reference to restructuring and cross ownership

Bc. Duc Mien Tran, BA

Master's thesis

Abstract:

The recent financial crisis in 2008 and economic downturn in 2012 of Vietnam, together with the restructuring policies applied for banking and financial institutions made by the State Bank of Vietnam had significant impacts on the banks operations. The ownership relationship among commercial banks and financial institutions was criticized for the inefficient performances of banks. This thesis examines the relationship between cross-ownership, restructuring policy with the performance of Vietnamese banks regarding the profitability of return on asset and return on equity.The first part describes the banking theories and significance of monitoring and supervising banks performances follow the CAMEL framework to maintain safety and soundness of banks. Literature review also shows empirical results of previous studies on the performance of banks and cross-ownership phenomenon. Financial analysis for 25 Vietnamese commercial banks with indicators regarding components of CAMEL framework during the period of 2006-2015 showed that during the crisis and economic downturn, large banks performed better than small banks in term of profitability. The regression analysis for panel data of 25 banks in ten years indicated that the cross-ownership negatively affected banks profitability. In term of restructuring, regression analysis show the negative relationship with ROE and ROA.

Keywords

Vietnam, commercial banks, CAMEL framework, financial analysis, panel data, regression analysis, SWOT analysis, cross-ownership, restructuring policy, non-performing loans, profitability

Language used: English

Date on which the thesis was submitted / produced: 30. 3. 2017

Thesis defence

• Supervisor: Ing. Petr Procházka, MSc Ph.D.

Czech University of Life Sciences Prague

Faculty of Economics and Management

Master programme / field:
Economics and Management / Economics and Management