Citation:

Uyen Nguyen Thi Tu. "Bank Profitability in Vietnam: Heterogeneous Effects across Large and Small Banks" International Research Journal of Economics and Management Studies, Vol. 5, No. 3, pp. 52-57, 2026. Crossref. http://doi.org/10.56472/25835238/IRJEMS-V5I3P108

Abstract:

This study investigates bank profitability in Vietnam using quarterly panel data on 29 commercial banks from 2024Q1 to 2025Q4. A bank fixed effects model with bank clustered standard errors is employed to evaluate the relationship between quarterly return on assets and factors such as bank size, loan intensity, deposit funding, credit risk, cost efficiency, capitalization, and income diversification. For the full sample, loan intensity and non-interest income share are positively associated with profitability. Subsample analysis reveals substantial heterogeneity across banks. Among large banks, credit risk, cost efficiency, capitalization, and non-interest income are significantly associated with profitability, whereas among small banks, only loan intensity remains significant. These results offer recent evidence from quarterly data and indicate that short-run profitability dynamics vary across different groups of banks within the Vietnamese banking sector.

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Keywords:

Bank Profitability, ROA, Vietnam, Fixed Effects, Credit Risk, Income Diversification.