The Application of The Camel Model to The Assessment of Bank Performance and Its Correlation with Bank Profitability: Evidence from Vietnam

Kód výsledku v IS VaVaI

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Výsledek na webu

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DOI - Digital Object Identifier

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Jazyk výsledku

angličtina

Název v původním jazyce

The Application of The Camel Model to The Assessment of Bank Performance and Its Correlation with Bank Profitability: Evidence from Vietnam

Popis výsledku v původním jazyce

This paper empirically examines the bank-specific determinants of bank profitability in the Vietnamese banking system for the period from 2011 to 2022. The study applies the CAMELS framework and employs panel regression to determine the effects of each CAMELS component on bank earnings per share (EPS). Particularly, by applying the fixed effect regression model, the study explores critical results such as: (i) the capital ratio (equity/total assets) has a negative coefficient with EPS as explained additional capital acquired by large capitalized banks is not efficiently converted into higher income earnings; (ii) asset quality represented by non-performing loans (NPL) ratio is found to have a negative impact on EPS since higher NPLs lead to higher provisioning expenses, then lower net profit; (iii) the management efficiency denoted by the cost to income ratio (CIR) negatively affects EPS since the increase in CIR means lower efficiency and lesser profit; (iv) it is quite evident that a statistically significant positive coefficient exists between Return on Assets (ROA) and EPS since earning quality is vital securing assets and capital for the banks’ competitive advantages; (v) market sensitivity signified by net interest margin (NIM) shows a positive correlation coefficient with EPS, implying that higher NIM significantly leads to higher EPS, vice versa.

Název v anglickém jazyce

The Application of The Camel Model to The Assessment of Bank Performance and Its Correlation with Bank Profitability: Evidence from Vietnam

Popis výsledku anglicky

This paper empirically examines the bank-specific determinants of bank profitability in the Vietnamese banking system for the period from 2011 to 2022. The study applies the CAMELS framework and employs panel regression to determine the effects of each CAMELS component on bank earnings per share (EPS). Particularly, by applying the fixed effect regression model, the study explores critical results such as: (i) the capital ratio (equity/total assets) has a negative coefficient with EPS as explained additional capital acquired by large capitalized banks is not efficiently converted into higher income earnings; (ii) asset quality represented by non-performing loans (NPL) ratio is found to have a negative impact on EPS since higher NPLs lead to higher provisioning expenses, then lower net profit; (iii) the management efficiency denoted by the cost to income ratio (CIR) negatively affects EPS since the increase in CIR means lower efficiency and lesser profit; (iv) it is quite evident that a statistically significant positive coefficient exists between Return on Assets (ROA) and EPS since earning quality is vital securing assets and capital for the banks’ competitive advantages; (v) market sensitivity signified by net interest margin (NIM) shows a positive correlation coefficient with EPS, implying that higher NIM significantly leads to higher EPS, vice versa.

Druh

D - Stať ve sborníku

CEP obor

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OECD FORD obor

50202 - Applied Economics, Econometrics

Projekt

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Návaznosti

V - Vyzkumna aktivita podporovana z jinych verejnych zdroju

Rok uplatnění

2023

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název statě ve sborníku

Conference Proceedings The 6th International Conference on Finance, Accounting and Auditing

ISBN

978-604-3-30957-7

ISSN

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e-ISSN

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Počet stran výsledku

24

Strana od-do

1-24

Název nakladatele

NATIONAL ECONOMICS UNIVERSITY PUBLISHING HOUSE

Místo vydání

Hanoi

Místo konání akce

Hanoj

Datum konání akce

20. 12. 2023

Typ akce podle státní příslušnosti

WRD - Celosvětová akce

Kód UT WoS článku

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