(Luận văn thạc sĩ) the determinants of bank profitability in commercial banks an analysis of BIDV vietnam

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - NGUYỄN QUANG KHÁNH THE DETERMINANTS OF BANK PROFITABILITY IN COMMERCIAL BANKS - AN ANALYSIS OF BIDV VIET NAM CÁC YẾU TỐ QUYẾT ĐỊNH ĐẾN LỢI NHUẬN CỦA NGÂN HÀNG THƯƠNG MẠI – PHÂN TÍCH TRƯỜNG HỢP CỦA BIDV VIỆT NAM LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH HÀ NỘI - 2019 ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - NGUYỄN QUANG KHÁNH THE DETERMINANTS OF BANK PROFITABILITY IN COMMERCIAL BANKS - AN ANALYSIS OF BIDV VIET NAM CÁC YẾU TỐ QUYẾT ĐỊNH ĐẾN LỢI NHUẬN CỦA NGÂN HÀNG THƯƠNG MẠI – PHÂN TÍCH TRƯỜNG HỢP CỦA BIDV VIỆT NAM Chuyên ngành: Quản trị kinh doanh Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS.TS PHẠM THỊ THANH HÒA HÀ NỘI - 2019 DECLARATION The author confirms that the research outcome in the thesis is the result of author‟s independent work during study and research period and it is not yet published in other‟s research and article The other‟s research result and documentation (extraction, table, figure, formula, and other document) used in the thesis are cited properly and the permission (if required) is given The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business and Management, and the laws for abovementioned declaration i TABLE OF CONTENTS DECLARATION i ABBREVIATION iv LIST OF TABLES v LIST OF FIGURES vi INTRODUCTION CHAPTER 1: THEORETICAL FRAMEWORK AND RESEARCH HYPOTHESES 1.1 Commercial banks introduction 1.2 General review of Bank profitability 1.2.1 Definition 1.2.2 Indicators of bank profitability 1.2.3 Internal factors effecting the bank profitability 1.2.4 Other external factor effecting the bank profitability 12 CHAPTER 2: OVERVIEW THE BIDV AND PROFITABILITY OF BIDV16 2.1 Review of BIDV and profitability in 2006-2017 intervals 16 2.1.1 Introduction to BIDV 16 2.1.2 Brief of BIDV profit making performance in 2006-2017 17 2.2 Comparative review of profitability in BIDV and Vietinbank in the concerned period 25 2.3 Potential determinants of profitability of BIDV 30 CHAPTER 3: METHODOLOGY AND DATA ANALYSIS 31 3.1 Chapter introduction 31 3.2 Research paradigm & strategies 31 3.3 Data collection & sample selection strategies 32 3.4 Sampling strategy: 32 3.5 Data analysis methods 33 ii 3.6 Descriptive statistics: 34 3.7 Correlation analysis: 37 3.8 Regression analysis: 38 3.8.1 Return on Equity 38 3.8.2 Return on Assets 40 3.8.3 Comment on model validity: 43 3.8.4 Hausman test 45 3.8.5 Multicollinearity test 46 CHAPTER 4: IMPLICATIONS AND RECOMMENDATIONS FOR BIDV TO IMPROVE THE PROFITABILITY IN THE FUTURE 48 4.1 Development strategy of BIDV in the near future 48 4.2 Recommendations for BIDV to improve the profitability in the future 50 4.2.1 Debt management policy 50 4.2.2 Maintaining other ratios that affect bank profitability 55 4.2.3 Diversify other sources of income beyond lending 57 4.2.4 Customer orientation strategy 58 4.2.5 Other practical solutions for BIDV 59 CONCLUSION 61 REFERENCE LIST 63 APPENDIX 67 iii ABBREVIATION ROA: Return on Assets ROE: Return on Equity NPLR: Non-performing Loan ratio CAR: Capital Adequacy ratio LDR: Loan to Deposit ratio LLPR: Loan Loss Provision ratio TA: Total Asset DR: Dividend Ratio REM: Random Effect Method FEM: Fixed Effect Method iv LIST OF TABLES Table 2.1 - Quality Criteria of BIDV 21 Table 2.2 - Dependent variables on profit in BIDV 30 Table 3.1 - Descriptive statistics 35 Table 3.2 - Correlation analysis 37 Table 3.3 - FEM-ROE regression 38 Table 3.4 - REM - ROE regression 39 Table 3.5 - Hausman Test - ROE 39 Table 3.6 - FEM - ROA regression 40 Table 3.7 - REM - ROA regression 42 Table 3.8 - Hausman Test - ROA 42 Table 3.9- Collinearity statistics 46 v LIST OF FIGURES Figure 2.1 – BIDV ROA & ROE from 2006-2017 17 Figure 2.2 – BIDV Profit before and after tax from 2006-2017 23 Figure 2.3 – BIDV Total assets and Owner‟s equity 24 Figure 2.4 – Comparison of BIDV and Vietinbank profitability 25 Figure 2.5 – Comparison of BIDV and Vietinbank CAR 26 Figure 2.6 – Comparison of BIDV and Vietinbank NPL & LLR 28 vi INTRODUCTION Research motives: In any economy, commercial banks play crucial role in moderating the flow of cash so that the economic goal and objectives can be achieved This function of the commercial banks implies that the economy may only last as long as the commercial banks remain healthy However, the nature of a commercial entity requires any bank to set profit as their ultimate goals According to Misker (2015) profit indicates whether a business may sustain in long time or not while reflecting the efficiency of business management in the short run As a result, the investors also relies on profit to evaluate and compare among the different investment opportunities during decision making process For this reason, profit always remain among the top objectives of commercial banks Meanwhile, it is no doubt that the practices involving credit activities in its core business make the commercial bank inevitably exposed to high credit risks which somehow keep the bank from achieving optimal profits In the wake of bank management, it is therefore important for the bank managers to strive to secure the profit maximization; yet the mission is rather challenging once the competition pressure in the banking sectors escalates Unlike any other type of business, the commercial banks are also tied with the regulations which are released to ensure the safety in bank operation; while the banks themselves must compete against each other Considering such a complicated situation, it is evident that the bank manager must consider such an extensive scope of factors to determine the relevant decisions in line with not only the position of the bank but also the tendency of external environment The challenge in maintaining high profit in the banking sector therefore set the ground for the studies seeking for determinants influencing profit by far However, there remain controversies on the set of criteria as well as how each factor corresponds with the rate of profit, depending on nature of business and conditions where the business operates In Vietnam, the empirical studies on factors affecting profit are numerous, yet the vast majority of papers by far just took account into the issue from rather macro perspectives It is therefore impractical when coming to the application of knowledge in improving profit of particular bank This gaps in literature hence motivates the author in examining the issue in a narrower scope of a specific case – BIDV The selected target of the study is by far named as the Vietnam largest stateowned bank which had its successful IPO in 2011 Research objectives  To identify the endogenous factors affecting profitability of commercial banks in Vietnam  To evaluate the impacts and draw conclusion on the most significant factors those should be considered  To apply the learning‟s on improving the profitability in specific case of BIDV Research questions:  What are the factors which affect the level of profitability in banking sectors?  How those factors influence the operation of commercial banks as BIDV?  How should manager implement the knowledge of these significant variables on improving profit of commercial banks? Research scope: Time scope: The study would focus on an interval over 10 years, starting from 2006 and ending at 2017 This period of time witnessed such a huge high proportion of capital instead of circulating more into the loan market; thus the route to profit maximization would be narrowed (Gizaw, Kebede&Selvaraj, 2015) It is also reasoned that capital adequacy only matters in the tough period of economic environment where banks face higher exogenous threats; whilst the economic performance of Vietnam in the last decade generally witnessed favorable conditions to grow up Even the global financial crisis in 2008 could not leave much damage to Vietnam economy for its high resilience while the domestic recession in 2011 did not last long enough to result in substantial impacts on the domestic banking system Consequently, rather loose pressure on the banks in general made banks to generally maintain capital adequacy at around the minimal line required by the local regulation For this reason, it is not surprising why capital adequacy came with rather weak relationship with the level of profit Based on this finding, it is therefore suggested that the commercial banks of Vietnam in general and BIDV in particular should not set capital adequacy at a too high level Ideally, it should keep the adequacy at approximately 9% as being required by the central bank This level of capital adequacy in fact is still above the minimal requirement proposed by BASEL I; hence the liquidity of the bank could be still safeguarded 4.2.2 Maintaining other ratios that affect bank profitability Total asset, dividend ratio and loan to deposit ratio are ineffective predictors of bank profitability Apart from capital adequacy ratio, the study also found out that other factors including total asset, dividend and loan to deposit ratio are ineffective predictors of profitability in Vietnamese banks For BIDV itself, the ambiguous influence of these factors on bank profit suggest that the strategies adopted by BIDV not need to concern about either of those factors In fact, the size of bank measured by total assets only indicates the capacity of banks; thus this is more likely relevant to investment bank rather 55 than commercial bank Meanwhile, though loan to deposit is shown as an ineffective indicators of profit in general, the qualitative research has found out that the Vietnamese banks tended to heighten lending rate during the economic boom such as between 2008 and 2009 to support activities of the economy; yet control over loans became loosen As a result, the subsequent periods such as in 2011-2012 saw a huge slump in non-performing loan when the long term loans came to maturity From this point, it could be seen that the loan to deposit is not a significant factor but it demonstrates the strategy of bank in credit market Therefore, the indicator should not be drop in decision making process for its indirect influence Another lesson for BIDV can be drawn from Vietinbank is that the individual credit objective could lead to unnecessary pressure on the credit officers, who might omit certain principles in credit risk evaluation for mission accomplishment Therefore, BIDV should not assess the credit officers upon the number of loan he could make, yet the level of security attached with the loan he proceeds This measure could allow BIDV manager to bind responsibility of its credit officers into the overall nonperforming loan of the bank For BIDV, asset quality, among the most important factors that have influence on profitability, should be carefully reviewed The increase of NPLs will have resulted in the erosion of profitability Despite the fact the national banking sector authority has been actively following Basel Accord, and international regulatory framework for banks, there is still a lot of efforts needed to improve from within the banking sector Poor assets quality is mostly coming from the risky business of the banks Some banks not hesitate to put money in risky projects such as real estate properties or gambling stock investment Competition to acquire bigger customer bases also leads to unhealthy business of the banks More important, the poor asset quality reported in the documents of the banks 56 may not reflect the actual situation due to the little transparency in operation of Vietnamese banks and the gap in reporting standards which can be manipulated by the banks Therefore, it is highly suggested that the authority should review the reporting standard to help better reflect the actual situation while strictly enforcing policies to control the non-performing loans level For example, credit expansion can only be done if the banks can maintain a certain safety level of Non-performing loans Besides, requirement for higher capitalization is also a result from the fact that NPLs is becoming a real issue in Vietnam Higher invested capital to ensure the controlled solvency risk can result in lower profitability However, it is understandable and acceptable especially in the period of economic difficulty Banking authority should consider a trade-off between profitability and safety of financial system A low but sustainable profitability is more appreciated than a high but risky profitability 4.2.3 Diversify other sources of income beyond lending Regarding diversification which is indicated by percent of net interest income over total asset, the lower the percentage is, the higher the level of diversification is Surprisingly, the effect is negative It is considered as the most important factor in determining profitability of the bank Although borrowing and lending activity still the driver to bring the major part of income to the bank, they are not steady and stable source as proved in previous studies Non-interest income such as payment service, investment, fee -based services can bring better and more stable profit for the banks in long term As result, similar to capitalization, despite the fact the result is not as expected, the bank management level should be always aware of the need for a diversified business This research suggests BIDV should gradually extend the business to more feed based serviced to better diversify the activity Solely reliance on 57 lending and borrowing activities can easily become highly risky during economic downturn Moreover, when the competition in the market is high, the quality and diversification in services would be a key to competitive advantage 4.2.4 Customer orientation strategy BIDV recognizes the potential of domestic small and medium enterprises (SMEs) They account for the majority (over 97%), contributing about 40% of GDP, 33% of industrial production value, 30% of goods value export and growing At the same time, small and medium enterprises have been receiving the attention of the State and Government The focus on the customer's outstanding loans also created BIDV challenges in management, potential risk due to credit concentration Therefore, the orientation of transferring customers from BIDV's large corporations to SMEs is an indispensable trend, and at the same time will reduce the BIDV's risk of focusing on big customers then towards growth and sustainable development BIDV regularly implements SME credit programs and packages with the annual capital of up to 50,000 - 60,000 billion VND, promoted products and services associated with the needs and characteristics of SMEs in potential sectors / sectors BIDV has implemented a number of mechanisms and products to solve problems related to security assets for SMEs when accessing loans such as credit facilities without security assets The diversification of asset assures SMEs the right to claim future debt from commercial contracts, commodity collateral transfers in business Simultaneously, continuous improvement and simplification of the process and continuing to access SME capital more convenient In addition, BIDV has cooperated with SME Association, Vietnam Chamber of Commerce and Industry to organize seminars and conferences guiding and systematizing legal regulations related to project investment and request for financial statements 58 4.2.5 Other practical solutions for BIDV BIDV need to sell more to each customer specially focus on two operations are cross-selling and up-selling In fact, many branches currently use only about personal service products while the bank has more than 30 including accounts, mobilization, card services, e-banking credit and insurance, etc The goal should be to have at least products and services per customer In addition, in order to increase the share (wallet-share), up-selling must be thoroughly applied in all departments from customer specialist to the counter at the counter - how to turn the branch into select The main choice of customers for the transaction from payment, savings to, swipe cards to investment credit, consumption Focusing on high margin products In which, it is necessary to develop products with high profit margins and good fee opportunities such as demand deposits, card services, unsecured loans, overdrafts and insurance I.ncreasing the productivity of sales: the optimization of sales productivity should be considered the focus of the branch and must be carried out continuously If observed, with the current centralized approval and disbursement process - a loan record (mortgage) is usually completed within 5-7 days As a result, every customer server has to disburse four monthly records In the absence of pressure on the credit line, the bank can focus more resources to develop premium products such as credit cards, insurance, e-banking services Beside this customer growth, in which, the increase in the number of customers opening accounts helps bring opportunities to charge fees, increase demand deposits and help to further expand customer relationships Therefore, the bank needs to actively develop the customer system especially payroll customers and large population in the area within a radius of 1-3km 59 The last, reducing the cost of sales and service there is a fact that in many branches, due to lack of orientation, experts go to exploit the area too far for profile loan just a few hundred million or go more than a dozen kilometers just to release each card By doing so, the credit dispersed, every single retail customer in the area so far makes operating costs high and also become more risks in customer care and management On the other hand, the bank should actively guide and encourage customers to use alternative channels such as internet banking, mobile banking, ATM, etc To save on service costs - but not miss out on cross-selling opportunities In addition, the bank should promote the development and exploitation of channel collaborators and agents to reduce fixed costs Along with the great development of information technology, banking products and services have developed remarkably, diversified and diversified products, bringing convenience to users E-banking services are now diversified and increasingly developed, in which home banking services are being applied and developed at domestic commercial banks, bringing benefits to both customers goods and banking Therefore, besides the traditional solutions for BIDV to improve the bank‟s performance, the development in technology in business operating is one of the key factors that lead to the BIDV‟ future success Currently, BIDV has its own E-banking on mobile phone with the easy using display that help customer can control their account and accepted for payment online Moreover, by cooperating with many partners in other industry such as airline, telephone agencies, and other businesses that the customer can connect directly to their shopping habit by using BIDV account via their personal phone This convenient using by applying technology help BIDV become more attractive than other banks in current time 60 CONCLUSION Research summary: In conclusion, the study that focus on the case of BIDV has highlighted the role of maintaining effective credit management system as the vital concern in profit maximization The attempt of BIDV in tightening credit performance in the recent years could be therefore tracked as the crucial factors contributing to the impressive profit making performance of the bank lately In turn, the research outputs and lessons from BIDV should be adopted as the guideline for other commercial banks in Vietnam to sustain in the ever fierce competition of Vietnam financial market as well as the changes promoted by the integration of Vietnam banking system to the global environment Accordingly, the control on non-performing loan should be kept at the central part of the bank strategy, given that the level of bad debt leaves severe influence on the bank profit while further measures covering the loss could further pulling off the profitability Moreover, the capital adequacy should be seen as the indicator of bank stability in long run rather than a factor driving bank profitability On this ground, it is recommended that BIDV should persistently maintain the capital adequacy as required by the Central Bank and BASEL but still keeping capital adequacy at a relevant level for profit maximization Last but not least, the active engagement of bank in innovating credit management regime is also seen as the core factors contributing to the stability of the credit system Hence generating favorable condition for the bank to achieve the expected objective of profit making Research limitations and future orientations for this thesis: First of all, it is important to highlight the absence of qualitative factors in the research model as one of the limitation which somewhat distort the accuracy 61 of the model employed According to Krauss, (2005), the qualitative variables play important role in shaping the comprehensive environment of commercial bank In a moving economy, the banking performance is also under external pressure such as well-being of economy, level of inflation, interest rate adjustment under monetary policies of the government However, to set the focal point on the specific context of BIDV, this research has assumed that external factors hold equivalent influences on all banks in the same environment, hence external impacts have been ignored to keep the model as simple as possible However, it is certain that the over-simplified research model embeds with lower accuracy would be less likely to reflect the reality Therefore, the future research should take account into these external factors to complete the big picture of bank profitability Another limitation can be referred to the method implemented in the study which focused too much on measurement in a broad scale Accordingly, the study has concerned more to gauging the factors in panel analysis while taking little concern to the specific settings of BIDV The generalization of the study with employment of data of BIDV and Vietinbank does not help get insight into the case of BIDV and the underlying problems occurring in profit making performance of this bank Therefore, the practicality of the research outcome is still rather limited In the future research, it is suggested that qualitative measure such as interview should be adopted to further access the problems of BIDV Another shortcoming of the study is the examination of moderator effects between factors and the profit level A particular example is the lack of measuring moderator effect that the increase of non-performing loan on the level of loan loss provision as well as this effect on the profit Because of this omission, the total effect of the predictors in the model on profitability could 62 have been distorted The future study should, therefore take account into the cross effect to draw out the big picture of bank profitability REFERENCE LIST Asikhia Olalekan & Sokefun Adeyinka (2013) Capital adequacy and banks' profitability: an empirical 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11.000% 2.490% 29.420% MBB 15.890% 0.950% 92.120% 1.180% 16.621 10.000% 1.950% 22.700% EIB 16.700% 0.843% 104.200% 1.100% 16.724 12.000% 2.240% 27.200% SHB 7.560% 2.041% 65.200% 2.285% 14.097 8.000% 1.050% 12.340% Vietinbank 11.620% 0.102% 90.230% 2.120% 18.928 8.000% 1.010% 14.120% STB 11.820% 1.093% 80.000% 1.620% 17.983 5.900% 1.686% 19.200% BIDV 7.850% 1.500% 93.220% 1.470% 19.105 6.900% 1.270% 15.200% ACB 6.800% 0.680% 52.540% 0.817% 18.263 18.000% 3.250% 38.320% Vietcombank 12.650% 0.880% 88.950% 1.120% 19.101 14.000% 2.220% 26.200% MBB 14.900% 0.750% 82.600% 1.154% 17.204 13.000% 2.220% 26.080% EIB 17.000% 0.701% 98.900% 1.060% 17.333 15.000% 1.780% 27.260% SHB 17.900% 1.700% 78.000% 2.820% 16.331 7.000% 0.850% 10.280% Vietinbank 11.200% 0.210% 91.500% 1.540% 19.081 10.000% 1.350% 15.700% STB 12.160% 1.330% 57.200% 1.470% 18.041 5.000% 1.040% 12.310% BIDV 8.940% 1.710% 95.700% 1.760% 19.323 6.500% 1.250% 13.600% ACB 12.400% 0.900% 56.990% 1.147% 18.474 11.000% 2.320% 24.500% Vietcombank 11.500% 1.340% 71.560% 1.350% 19.220 8.500% 1.370% 16.540% MBB 11.470% 1.150% 89.670% 1.210% 18.055 8.000% 1.530% 17.800% EIB 35.890% 3.410% 87.240% 4.989% 17.721 4.300% 0.670% 7.430% SHB 25.800% 2.620% 65.460% 3.963% 16.479 5.000% 0.911% 8.760% 8.600% 0.610% 96.480% 0.890% 19.312 12.000% 1.540% 20.600% 11.410% 0.670% 64.420% 0.740% 18.460 5.700% 1.780% 18.050% BIDV 9.540% 1.420% 106.920% 1.630% 19.507 10.000% 0.940% 21.050% ACB 9.970% 0.700% 60.730% 0.950% 18.939 16.000% 2.100% 31.240% Vietcombank 8.100% 1.070% 83.570% 1.370% 19.360 11.000% 1.640% 25.580% MBB 12.000% 1.018% 107.250% 1.300% 18.050 12.000% 2.660% 26.610% EIB 26.870% 2.830% 85.000% 2.860% 17.997 5.000% 0.790% 8.650% SHB 17.060% 1.940% 68.480% 2.750% 17.128 8.000% 1.590% 11.590% 8.000% 0.660% 118.290% 1.220% 19.723 13.470% 1.510% 22.100% 10.660% 1.520% 61.220% 2.220% 18.842 5.000% 1.390% 14.860% Vietinbank STB 2010 LDR 5.800% STB 2007 NPL Vietinbank STB 67 2011 BIDV 9.320% 1.400% 101.200% 1.950% 19.719 7.000% 1.130% 17.960% ACB 9.250% 0.950% 75.130% 0.830% 19.142 14.000% 1.730% 28.670% Vietcombank 9.000% 1.300% 83.400% 1.530% 19.544 12.000% 1.520% 22.550% MBB 12.900% 0.860% 112.600% 1.080% 18.513 15.000% 2.560% 29.020% EIB 17.790% 1.410% 103.750% 1.990% 18.692 7.000% 1.860% 13.510% SHB 13.810% 1.630% 88.100% 1.850% 17.753 7.000% 1.340% 16.870% Vietinbank 10.570% 0.740% 120.680% 1.350% 19.948 19.000% 2.000% 26.700% STB 11.660% 0.570% 71.190% 1.090% 18.769 5.000% 1.280% 13.530% BIDV 11.070% 2.960% 110.560% 2.970% 19.821 6.500% 0.830% 13.200% ACB 9.250% 1.080% 66.940% 1.023% 19.454 2.000% 1.700% 36.620% 11.140% 2.030% 86.680% 2.010% 19.720 11.500% 1.250% 17.880% 9.590% 1.660% 71.510% 2.240% 18.749 11.000% 1.390% 16.710% EIB 12.940% 1.610% 124.270% 1.690% 19.028 14.000% 1.930% 20.390% SHB 13.370% 1.570% 85.730% 2.090% 18.072 9.000% 1.120% 13.550% Vietinbank 10.330% 1.350% 109.080% 1.910% 20.037 16.000% 1.700% 19.900% STB 9.530% 1.430% 81.360% 1.690% 18.835 5.000% 1.430% 14.200% BIDV 9.650% 3.030% 111.740% 4.340% 19.999 6.500% 0.490% 12.380% ACB 14.160% 2.140% 82.470% 3.500% 18.989 7.500% 0.560% 8.490% Vietcombank 14.630% 2.000% 79.210% 2.910% 19.843 8.300% 1.170% 12.780% MBB 11.150% 1.330% 63.300% 2.080% 18.984 7.200% 1.890% 19.860% EIB 13.470% 1.320% 105.920% 1.790% 18.952 5.200% 1.620% 18.250% SHB 14.180% 1.540% 69.310% 1.890% 18.574 8.700% 1.260% 16.040% Vietinbank 13.200% 0.820% 102.330% 0.880% 20.172 10.000% 1.400% 13.700% 8.430% 1.670% 82.960% 1.520% 18.899 7.000% 1.420% 14.490% BIDV 10.230% 2.300% 113.570% 2.570% 20.122 10.200% 0.780% 13.840% ACB 14.660% 3.070% 76.490% 3.440% 18.931 6.500% 0.580% 8.200% Vietcombank 13.130% 2.730% 80.620% 3.350% 19.966 7.000% 0.990% 10.430% MBB 11.000% 2.220% 58.170% 2.850% 19.011 7.000% 1.200% 14.130% EIB 13.620% 2.980% 100.190% 1.900% 18.950 5.000% 0.750% 7.930% SHB 12.360% 1.960% 79.100% 2.660% 18.782 8.500% 1.510% 17.140% Vietinbank 10.400% 0.900% 86.700% 0.990% 20.310 10.000% 1.200% 10.500% STB 9.870% 1.300% 77.670% 2.370% 19.061 5.000% 1.360% 13.210% BIDV 9.350% 2.060% 99.680% 2.490% 20.293 9.100% 0.830% 15.270% ACB 14.100% 2.210% 75.210% 2.160% 19.006 6.000% 0.750% 9.800% Vietcombank 11.610% 2.360% 74.910% 2.790% 20.173 9.000% 0.880% 10.700% MBB 10.070% 1.740% 56.120% 2.050% 19.116 10.000% 1.290% 14.960% EIB 14.470% 3.460% 88.430% 5.380% 18.897 1.500% 0.340% 3.470% Vietcombank MBB 2012 2013 STB 2014 68 2015 SHB 12.380% 3.060% 82.610% 3.660% 18.949 4.700% 0.570% 7.710% Vietinbank 10.600% 0.730% 86.600% 1.850% 20.474 10.000% 1.000% 10.300% STB 10.120% 3.220% 70.360% 4.330% 19.494 5.000% 0.480% 5.640% BIDV 9.070% 1.700% 104.660% 1.360% 20.561 8.500% 0.850% 15.400% ACB 12.800% 2.340% 76.740% 3.450% 19.121 5.200% 0.540% 8.170% Vietcombank 11.690% 1.890% 75.630% 2.420% 20.329 7.000% 0.850% 12.070% MBB 12.500% 1.750% 64.140% 1.560% 19.214 7.500% 1.280% 14.100% 9.12% 2.860% 84.390% 2.840% 18.643 1.000% 0.110% 1.060% 11.400% 1.720% 84.110% 3.830% 19.137 4.500% 0.450% 7.330% EIB SHB 69 ... managers of the commercial banks in Vietnam an insight into the mechanism of bank profitability so that the strategic decisions in bank development can be more effective Should the elements affecting... growth of Vietnam economy 1.2 General review of Bank profitability 1.2.1 Definition The profitability of commercial bank is critical indicator of bank efficiency in exercising the banking operation... 2.3 Potential determinants of profitability of BIDV Based on the above analysis, we can again summarize the factors and their effect on determinants of profit in BIDV as shown in the table below: