Title: Determinants of Vietnamese bank profitability: comparisons between before and during COVID-19 pandemic periods

Authors: Van Thi Hong Pham; Pham Tuan Anh; Kien Duy Do; Mai Thanh Loan

Addresses: Faculty of Finance and Banking, Van Lang University, 69/68 Dang Thuy Tram Street, Ward 13, Binh Thanh District, Ho Chi Minh City, Vietnam ' Faculty of Accounting – Finance – Banking, Binh Duong Economics and Technology University, 333 Thuan Giao 16 Street, Thuan Giao Ward, Thuan An City, Binh Duong Province, Vietnam ' Department of Business Administration, Finance and Accounting, Foreign Trade University Ho Chi Minh City Campus, 15 D5 Street, Ward 25, Binh Thanh District, Ho Chi Minh City, Vietnam ' Faculty of Finance and Banking, Van Lang University, 69/68 Dang Thuy Tram Street, Ward 13, Binh Thanh District, Ho Chi Minh City, Vietnam

Abstract: The study aims to investigate the effect of the COVID-19 pandemic on the profitability of Vietnamese commercial banks by comparing the regression coefficient estimation results in the two periods before and during COVID-19. We find that the bank profitability is explained by size, equity ratio, provisioning ratio, non-interest service activities, and economic growth. An interesting finding is a change in the direction of the impact of leverage and economic growth on bank profitability. Banks with higher leverage tend to earn more profits in the pre-COVID-19 period, but it becomes a disadvantage for banks during the COVID-19 period. Economic growth has a negative effect on the bank profitability in the pre-COVID-19 period, but the relationship turns positive during the period of the COVID-19 pandemic. Based on these results, our paper proposes several solutions for governmental authorities and bank managers to improve bank profitability under the 'living together with COVID-19' context.

Keywords: COVID-19; commercial bank; bank profitability; Vietnam.

DOI: 10.1504/IJMFA.2024.141739

International Journal of Managerial and Financial Accounting, 2024 Vol.16 No.4, pp.454 - 473

Received: 08 Sep 2022
Accepted: 26 Apr 2023
Published online: 01 Oct 2024 *

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