The impact of financial risks on bank performance: evidence from Bayesian analysis in Vietnam's commercial banks
Abstract This research examines how financial risks influence the performance of Vietnam’s ten largest joint-stock commercial banks, with return on equity as the primary profitability metric. Spanning the years 2015 to 2023, the study applies a Bayesian regression model to ensure a robust and thorou...
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| Format: | Article |
| Language: | English |
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Springer
2025-06-01
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| Series: | Discover Sustainability |
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| Online Access: | https://doi.org/10.1007/s43621-025-01246-1 |
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| author | Huyen Khanh Ngo Hang Thi Thu Trinh |
| author_facet | Huyen Khanh Ngo Hang Thi Thu Trinh |
| author_sort | Huyen Khanh Ngo |
| collection | DOAJ |
| description | Abstract This research examines how financial risks influence the performance of Vietnam’s ten largest joint-stock commercial banks, with return on equity as the primary profitability metric. Spanning the years 2015 to 2023, the study applies a Bayesian regression model to ensure a robust and thorough analysis. The data includes audited annual financial statements from the selected banks. At the same time, macroeconomic indicators such as GDP growth and inflation are sourced from the SBV and WB. This study explores the critical financial risks that affect bank performance, focusing on credit, liquidity, and operational risks. It also considers the impact of bank size, GDP growth, and inflation rate on bank performance. The analysis shows a clear negative impact of these financial risks on bank profitability, as higher credit and operational risks are associated with reduced financial performance. This underscores the critical importance of financial risk management in effectively monitoring and controlling key performance indicators in joint-stock commercial banks. Moreover, both macroeconomic conditions and bank-specific attributes are shown to impact financial outcomes significantly. By offering insightful perspectives on risk management strategies, this study provides practical recommendations to enhance financial stability and bolster the resilience of Vietnamese commercial banks in an evolving economic landscape. |
| format | Article |
| id | doaj-art-e115535911d54c02a0a4843b65c2e59b |
| institution | OA Journals |
| issn | 2662-9984 |
| language | English |
| publishDate | 2025-06-01 |
| publisher | Springer |
| record_format | Article |
| series | Discover Sustainability |
| spelling | doaj-art-e115535911d54c02a0a4843b65c2e59b2025-08-20T02:05:44ZengSpringerDiscover Sustainability2662-99842025-06-016111510.1007/s43621-025-01246-1The impact of financial risks on bank performance: evidence from Bayesian analysis in Vietnam's commercial banksHuyen Khanh Ngo0Hang Thi Thu Trinh1Thang Long UniversityVNU University of Economics and BusinessAbstract This research examines how financial risks influence the performance of Vietnam’s ten largest joint-stock commercial banks, with return on equity as the primary profitability metric. Spanning the years 2015 to 2023, the study applies a Bayesian regression model to ensure a robust and thorough analysis. The data includes audited annual financial statements from the selected banks. At the same time, macroeconomic indicators such as GDP growth and inflation are sourced from the SBV and WB. This study explores the critical financial risks that affect bank performance, focusing on credit, liquidity, and operational risks. It also considers the impact of bank size, GDP growth, and inflation rate on bank performance. The analysis shows a clear negative impact of these financial risks on bank profitability, as higher credit and operational risks are associated with reduced financial performance. This underscores the critical importance of financial risk management in effectively monitoring and controlling key performance indicators in joint-stock commercial banks. Moreover, both macroeconomic conditions and bank-specific attributes are shown to impact financial outcomes significantly. By offering insightful perspectives on risk management strategies, this study provides practical recommendations to enhance financial stability and bolster the resilience of Vietnamese commercial banks in an evolving economic landscape.https://doi.org/10.1007/s43621-025-01246-1Financial riskCommercial bankVietnamBayesian |
| spellingShingle | Huyen Khanh Ngo Hang Thi Thu Trinh The impact of financial risks on bank performance: evidence from Bayesian analysis in Vietnam's commercial banks Discover Sustainability Financial risk Commercial bank Vietnam Bayesian |
| title | The impact of financial risks on bank performance: evidence from Bayesian analysis in Vietnam's commercial banks |
| title_full | The impact of financial risks on bank performance: evidence from Bayesian analysis in Vietnam's commercial banks |
| title_fullStr | The impact of financial risks on bank performance: evidence from Bayesian analysis in Vietnam's commercial banks |
| title_full_unstemmed | The impact of financial risks on bank performance: evidence from Bayesian analysis in Vietnam's commercial banks |
| title_short | The impact of financial risks on bank performance: evidence from Bayesian analysis in Vietnam's commercial banks |
| title_sort | impact of financial risks on bank performance evidence from bayesian analysis in vietnam s commercial banks |
| topic | Financial risk Commercial bank Vietnam Bayesian |
| url | https://doi.org/10.1007/s43621-025-01246-1 |
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