FACTORS AFFECTING THE NET INTEREST MARGIN OF VIETNAMESE COMMERCIAL BANKS

THE STATE BANK OF VIETNAM MINISTRY OF EDUCATION BANKING UNIVERSITY AND TRAINING HO CHI MINH CITY NGUYỄN HOÀNG PHƯƠNG UYÊN Major : Banking and Finance FACTORS AFFECTING THE NET INTEREST MARGIN OF VIETNAMESE COMMERCIAL BANKS GRADUATE THESIS MAJOR : BANKING AND FINANCE MAJOR CODE: SCIENCE INSTRUCTOR: VO, THI NGOC HA, MSc HO CHI MINH, SEPTEMBER 2021 THE STATE BANK OF VIETNAM MINISTRY OF EDUCATION BANKING UNIVERSITY AND TRAINING HO CHI MINH CITY NGUYỄN HOÀNG PHƯƠNG UYÊN Major : Banking and Finance FACTORS AFFECTING THE NET INTEREST MARGIN OF VIETNAMESE COMMERCIAL BANKS GRADUATE THESIS MAJOR : BANKING AND FINANCE MAJOR CODE: SCIENCE INSTRUCTOR: VO, THI NGOC HA, MSc HO CHI MINH, SEPTEMBER 2021 ABSTRACT This thesis investigates the factors affecting the net interest margin of Vietnamese commercial banks over the period of 2009 - 2020 suggest some management indications for commercial banks for the next period Based on the theoretical basis and previous empirical studies, the thesis has been selected an appropriate research model, specifically using quantitative methods such as: descriptive statistics, correlation matrix, multicollinearity phenomenon, regression model, Pooled-OLS model, fixed effects model (FEM), random effects model ( REM), generalized least squares (GLS), hausman test, and hypothesis testing to select the most appropriate model Moreover, based on the analysis results, the thesis will also propose some recommendations to improve the net interest margin of commercial banks in Vietnam At the same time, the thesis is also a reference for those who are interested in improving the bank's profit relations in the direction of a new scientific approach Keywords: The net interest margin, commercial banks, factors, Pooled-OLS, FEM, REM, GLS… i PLEDGE My name is Nguyen Hoang Phuong Uyen I am a student of Banking university of Ho Chi Minh city, majoring in Banking and Finance The thesis: “Factors affecting the net interest margin of Vietnamese commercial banks” has been carried out at Banking university of Ho Chi Minh City This thesis is the author's own research work, the research results are honest, in which there are no previously published contents or contents made by others except sufficient citations or source citations in thesis The information and data used in the research processes are collected by author from various sources, which is completely truthful and clearly citied in the references Ho Chi Minh, 27th September 2021 Uyen ii ACKNOWLEDGEMENT A completed study would not be possible without help As a result, the author gratefully acknowledges their assistance and encouragement during the course of conducting this research as a requirement of obtaining my Degree of Banking Finance My special thanks and gratefulness approve to MSc.Vo Thi Ngoc Ha for her kindly support and advices through the process of completing my research Besides, she gave me a lot of advice so that I can complete my chosen topic well, reminding me of time and imparting to me a lot of your experience and knowledge Her comments and suggestions are extremely valuable, helping me to complete this thesis well CONTENTS PLEDGE ii ACKNOWLEDGEMENT CONTENTS LIST OF ABBREVIATIONS .8 LIST OF TABLES AND FIGURES LIST OF CHART CHAPTER 1: INTRODUCTION 10 1.1 Background of study 10 1.2 Objectives 11 1.2.1 General objectives: 11 1.2.2 Specific objectives 11 1.3 Research Questions: 11 1.4 Research’s contribution: 12 1.5 Objects and scope of study: 13 1.5.1 Research objects: 13 1.5.2 Scope of study: 14 1.6 Structure of study: 14 CHAPTER 2: THEORETICAL FRAMEWORK AND LITERATURE REVIEW 15 2.1 Theoretical Framework: 15 2.1.1 Commercial banks: 15 2.1.2 Function of commercial banks: 15 2.1.3 The net interest margin: 16 2.1.4 NIM generating financial services: 17 2.2 Literature review: 20 2.2.1 Some typical studies in Vietnam: 20 2.2.2 Some typical studies in the world 21 CHAPTER 3: RESEARCH METHODS .23 3.1 Research model: 23 3.2 Defining and Measuring Variables: 25 3.2.1 Dependence variable: 25 3.2.2 Independence variables: 25 3.2.2.1 Bank size: 25 3.2.2.2 Deposit: 26 3.2.2.3 Capitalization: 26 3.2.2.4 Non-interest income: 27 3.2.2.5 Non-performing loan: 27 3.2.2.6 Cost efficiency: 28 3.2.2.7 Liquidity: 28 3.2.2.8 Implied interest payment: 29 3.2.2.9 Market share: 29 3.2.2.10 Inflation: 30 3.2.2.11 Gross domestic product: 30 3.3 Method of data collection: 33 3.4 Method of data analysis: 35 3.4.1 Descriptive Statistics 35 3.4.2 Testing Pool-OLS, FEM, REM models 36 3.4.3 Testing coefficient of regression 37 3.4.4 Testing disability model 38 CHAPTER 4: EMPRICAL RESULT AND DISCUSION 40 4.1 Description statistics: 40 4.1.1 The net interest margin: 40 4.1.2 Liquidity: 41 4.1.3 Capitalization: 42 4.1.4 Size of bank: 43 4.1.5 Non-performing loan: 43 4.1.6 Non-interest income: 44 4.1.7 Cost efficiency: 45 4.1.8 Implied interest payment: 46 4.1.9 Deposit: 46 4.1.10 Inflation: 47 4.1.11 Gross Domestic Product: 48 4.1.12 Market Share: 50 4.2 Correlation analysis between variables and multicollinearity test 51 4.3 Regression Analysis : 53 4.3.1 Pooled-OLS model: 53 4.3.2 Fixed effect model (FEM): 54 4.3.3 Random effect model (REM): 55 4.3.4 Hausman Test: 56 4.3.5 Breusch – Pagan test: 56 4.3.6 Heteroscedasticity Test: 56 4.3.7 Correlation Test: 57 4.3.8 Regression results of research model according to GLS: 57 4.4 Discussing the results of the analysis: 59 4.4.1 INF - Inflation 59 4.4.2 CI – Cost efficiency 60 4.4.3 MS – Market share 60 4.4.4 CAP – Capitalization 60 4.4.5 LIQ – Liquidity 61 4.4.6 DEP – Deposit ratio 61 4.4.7 SIZE – Size of bank 62 4.4.8 NI (Non-interest income) 62 4.4.9 IP (Implied interest payment) 63 4.4.10 GDP (Gross Domestic Product) 63 CHAPTER 5: CONCLUSION AND MANAGEMENT INTERPRETATION 65 5.1 Conclusion: 65 5.2 Recommendations: 65 5.2.1 Concerning about cost efficiency: 65 5.2.2 Managing market share while expending bank’s size: 66 5.2.3 Capital adequacy management of commercial bank: 67 5.2.4 Improve Liquidity capacity: 68 5.2.5 Dealing with macroeconomic: 68 5.3 Limitation: 69 5.4 Directions for further research: 70 FOREIGN REFERENCES I VIETNAM REFERENCES II APPENDIX IV LIST OF ABBREVIATIONS Abbreviation Explanation ADB Asian Development Bank FEM Fixed Effects Model GDP Gross Domestic Product GLS Generalized Least Square IMF International Monetary Fund NIM Net interest margin SBV State Bank of Vietnam OECD Organisation for Economic Co-operation and Development OLS Ordinary Least Squared POLS Pooled Ordinary Least Squared REM Random Effects Model increase but banks use assets less efficiently resulting in a decrease in net interest income However bank’s size has a positive impact on the net interest margin of commercial banks, research results of variable MS shows that an increase in total assets does not mean that profits represented by the net interest income will be increased So that, It also depends on the use of assets to achieve effective or not Therefore, in order to increase the rate of net interest income, Vietnamese commercial banks need to manage your assets more efficiently by managing loans, investments and accounts bank's fixed assets For a fiercely competitive market today, the author makes some recommendations: Firstly, commercial banks can increase their bank size through capital increase The advantage of this is to improve financial capacity, expand credit, increase competitiveness for banks However, raising capital needs to be very cautious Currently, most banks are focusing on the trend of raising capital to expand their business, increase investment in the coming years, increase asset strength, deal with bad debts, etc Second, invest in fixed assets such as building more branches and transaction offices in strategic locations, densely populated residential areas, and industrial zones to increase the popularity of the bank to customers row Large banks with strong financial capacity can develop and expand branches and representative offices in countries in the region However, the expansion of the scale of each commercial bank must depend on the financial capacity as well as the customers that the bank is targeting to avoid wasting money, causing damage to the bank's profits and reputation on the market 5.2.3 Capital adequacy management of commercial bank: It can be seen that the increase in equity contributes to the increase of the bank's net interest margin During the period when commercial banks are trying to increase capital by mobilizing all capital sources to apply Basel II standards, the author makes some recommendations such as: First, banks can increase equity by increasing their own capital through external influences from the issuance of shares, preferred shares, convertible shares and internal effects from increasing profits retained earnings (increasing Tier capital) 67 Next, carry out mergers and acquisitions (M&A) activities to reduce the burden of small banks, and at the same time increase the size of assets, capital and reputation for large banks 5.2.4 Improve Liquidity capacity: The variable LIQ has a favorable impact on the net interest margin of commercial bank, as shown by the model result As a result, in order to improve operational performance, managers should ponder over things below: To begin, commercial banks must strictly adhere to regulations governing liquidity safety in particular, as well as regulations governing bank business activities in general Commercial banks must maintain a higher level of safety than the regulatory minimum for the liquidity ratio This strategy will give commercial banks greater options for avoiding risks posed by unusual business circumstances In terms of business activity compliance, legal infractions by a single bank can have a significant impact on the liquidity safety of the entire banking system As a result, regular supervision and inspection actions in the bank are required So that, It is feasible to quickly identify mistakes and make corrections Secondly, commercial bank boards of directors should ensure that the liquidity gap and issues connected to interest rate risk are adequately managed Commercial banks must comply with all mobilization and lending rules (especially medium and long-term deposits and loans) When the market interest rate rises or when other competitors offer higher interest rates that are more appealing to clients, it is vital to establish a scientific approach to prevent customers from depositing and withdrawing money before maturity Furthermore, controlling the maturity mismatch between the bank's liabilities and assets is critical to effective liquidity management Implement the issuing of valuable papers, and tailor the loan structure to sensitive and risky industries like stocks, real estate, and consumer products To guarantee the State Bank's required reserve is maintained and to deal with cash outflows, all banks must maintain a reserve ratio (which includes cash in the bank, deposits at the State Bank, and other highly "liquid" assets) 5.2.5 Dealing with macroeconomic: 68 Inflation is one of the factors that has both positive and negative effects on economic growth through a variety of channels with varying levels of overall influence, depending on the economy's institutional structure (both public and private), as well as its ability to adapt to prevailing inflation and predictability As a result, inflation must be seen as a factor that helps commercial banks improve their operational efficiency by stimulating capital mobilization and boosting exchange rate flexibility Stabilizing inflation, interest rates, and currency rates at a fair level is one of the necessities in a market economy, especially in emerging nations like Vietnam, to assure national monetary and financial stability This factor's change, it can be argued, has a significant impact on the profitability of Vietnamese commercial banks Furthermore, commercial banks' operations are susceptible to and volatile in response to macroeconomic developments Changes in macroeconomic circumstances might have an impact on a bank's profitability As a result, commercial banks must keep a careful eye on the economic situation in Vietnam as well as abroad in order to respond quickly Effectively updating and utilizing economic, political, and social data in order to quickly establish operating directions and avoid losses due to a lack of objective and subjective data In order to create timely projections and avoid potential losses early, commercial banks must increase their ability to assess and evaluate financial indicators at the bank 5.3 Limitation: Although the research objectives have been achieved and the time is limited, the author still cannot avoid some limitations as follows: Firstly, the author cannot collect all the data of the Vietnamese commercial banking system Some banks were excluded from the study due to insufficient data during the research period Therefore, the thesis is not reliable enough of the specific data to only represent the typical banks researched Secondly, the research and data collection period is short, only studied in the period after the United State financial crisis, not considering the previous period Thirdly, this study employs a non-diversified sample, focusing solely on local commercial banks, despite the fact that joint venture and international banks play a significant role in the banking system of Vietnam Furthermore, the study's scope is 69 limited to a few variables, including bank size, equity capital, liquidity, deposits, nonperforming loans, cost efficiency, and macroeconomic variable such as inflation, market share In fact, several factors influence the net interest margin including credit risk, funding structure, financial leverage, and so on Therefore, the independent variables in the study have not fully explained the factors affecting the profitability of Vietnamese commercial banks 5.4 Directions for further research: Based on the limitations mentioned above, the author proposes some future research directions as follows: First, future studies can increase the number of observations by increasing the number of years of observation by extending the study period to the years before the crisis in 2008 and comparing the effects of other factors affecting bank profitability before and after the crisis, or an increase in the number of banks as banks were left out began to have sufficient data in the market When the number of observations is large, the accuracy of the study is also improved, moreover to explain the impact variables clearly, a large number of observations is required Finally, the research articles can use addition of micro and macro independent variables that affect the profitability of commercial banks such as monetary policy, tax, management quality, product policy, human policy, level of investment, concentration of the market, etc Then, the topic will more comprehensively evaluate the independent variables affecting the profitability of commercial banks 70 FOREIGN REFERENCES: Angori, G., Aristei, D., & Gallo, M (2019) Determinants of banks’ net interest margin evidence from the Euro area during the crisis and post-crisis period Sustainability, 11(14), 3785 Ben Naceur, S., & Goaied, M (2008) The determinants of commercial bank interest margin and profitability evidence from Tunisia Frontiers in finance and economics, 5(1), 106-130 Cruz-García, P., & Fernández de Guevara, J (2020) Determinants of net interest margin: the effect of capital requirements and deposit insurance scheme The European Journal of Finance, 26(11), 1102-1123 Demirgỹỗ-Kunt, A., Huizinga, H (1999), Determinants of commercial bank interest margins and profitability: Some international evidence The World Bank Economic Review, 13(2), 379-408 Farrar, D E., & Glauber, R R (1967) Multicollinearity in regression analysis: the problem revisited The Review of Economic and Statistics, 92-107 Fungáčová, Z., & Poghosyan, 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9(1), 115-136 Memmel, Christoph and Schertler, Andrea, Banks' Management of the Net Interest Margin: Evidence from Germany (2011) Bundesbank Series 2, Discussion Paper No 2011,13 Nassar, K.B., Martinez, E., Pineda, A (2014), Determinants of Banks’ Net Interest Margins in Honduras (No 14-163) International Monetary Fund Rose, P S., & Hudgins, S C (2013) Bank management & financial services McGrawHill Rudra, S., & Ghost, S (2004) Net interest margin: Does ownership matter VIKALPA, 29(1), 41-47 Sentürk, B (2016) The determinants of net interest margins & net interest spreads in the Russian & Japanese Commercial Banking sectors (Doctoral dissertation) Van den Heuvel, S J (2002) The bank capital channel of monetary policy The Wharton School, University of Pennsylvania, mimeo, 2013-14 Wooldridge, J M (2002) Inverse probability weighted M-estimators for sample selection, attrition, and stratification Portuguese Economic Journal, 1(2), 117-139 Yuksel, S., & Zengin, S (2017) Influencing factors of net interest margin in Turkish banking sector International Journal of Economics and Financial Issues, 7(1), 178 VIETNAM REFERENCES: Dien, P M., Hoang, D T K., & Nga, D Q (2018) Ảnh hưởng số LERNER, số HHI chi phí hội dự trữ đến tỷ lệ thu nhập lãi cận biên ngân hàng thương mại KINH TẾ VÀ QUẢN TRỊ KINH DOANH, 13(1), 3-19 General Statistics Office of Vietnam (2021), Vietnam economy in 2020 the growth of a year with full of bravery, https://www.gso.gov.vn/en/data-and-statistics/2021/01/vietnam-economy-in-2020-the-growth-of-a-year-with-full-of-bravery/ DATE OF ISSUE: 14/01/2021 Hoang Trung Khanh, Vu Thu Đan Tra (2015) Những nhân tố ảnh hưởng đến hệ số thu nhập lãi (NIM) ngân hàng thương mại Việt Nam.KT&PT, số 215 (II), tháng 05 năm 2015, tr 47-55 II Hoang, Thu Thi Anh (2017), Factors affecting decision to choose a bank for saving deposits by personal clients in Hue, "Science & Technology Development JournalEconomics-Law and Management, 20(3), 96-104 Ngân hàng nhà nước, Luật số 47/2010/QH12 Luật Tổ chức tín dụng Việt Nam (Law No 47/2010/QH12 of the Law on Credit Institutions of Vietnam) Nguyen Thi My Linh & Nguyen Thi Ngọc Huong (2015), Nghiên cứu yếu tố ảnh hưởng đến thu nhập lãi cận biên ngân hàng thương mại cổ phần Việt Nam, Tạp chí kinh tế, số 450, tháng 11/2015, trang 43-51 Quy định phân loại tài sản có, mức trích, phương pháp trích lập dự phịng rủi ro việc sử dụng dự phòng để xử lý rủi ro hoạt động tổ chức tín dụng, chi nhánh ngân hàng nước ngoài, Số: 02/2013/TT-NHNN (Regulations on classification of assets, level of deduction, method of making provision for risks and use of provisions to handle risks in operations of credit institutions, foreign bank branches, 2013) Thông tư quy định tỷ lệ an toàn vốn ngân hàng, chi nhánh ngân hàng nước ngoài, Số: 41/2016/TT-NHNN (Circular 41/2016/TT-NHNN) Thu, N K., & Huyen, Đ T T (2014) Phân tích yếu tố ảnh hưởng đến tỷ lệ thu nhập lãi ngân hàng thương mại Việt Nam VNU Journal of Science: Economics and Business, 30(4) Vu Thi Phuong Thao & Ngo Thi Huong (2020) Nghiên cứu thực nghiệm nhân tố tác động đến tiền gửi ngân hàng thương mại, Tạp chí Tài chính, 06/2020 … III APPENDIX  APPENDIX 1: STATISTICS DECRIPTION sum nim liq cap size npl ni ci ip dep inf gdp ms  Variable Obs NIM 336 LIQ Mean Std.Dev Min Max 0.030678 0.016399 -0.0079 0.1157 336 0.042219 0.024544 0.0081 0.197 CAP 336 0.097459 0.054823 0.0269 0.6915 SIZE 336 7.971746 0.526265 6.5163 9.1809 NPL 336 0.012531 0.000 0.0657 NI 336 0.0075 CI 336 0.649456 0.132516 0.005845 1.069628 IP 336 0.006521 0.005512 -0.00542 0.042814 DEP 336 0.62873 INF 336 0.059116 0.045783 0.008786 0.186755 GDP 336 0.059517 0.010962 0.029101 0.070758 MS 336 0.035928 0.042763 0.001912 0.175901 0.00574 0.006718 0.000483 0.060073 0.132533 0.000 0.893717 APPENDIX 2: TEST OF VARIANCE EXEGGERATION FACTOR VIF vif Variable VIF 1/VIF size 5.09 0.19636 ms 3.06 0.326805 cap 2.12 0.47228 inf 1.79 0.5582 ni 1.68 0.594467 ip 1.65 0.606555 dep 1.62 0.615928 ci 1.25 0.798583 npl 1.08 0.923172 liq 1.06 0.944876 IV gdp Mean VIF 1.02 0.981559 1.95 V  APPENDIX 3: CORRELATION COEFICIENTS BETWEEN VARIABLES: corr nim liq cap size npl ni ci ip dep inf gdp ms (obs=336) | nim liq cap size npl ni ci ip dep inf gdp nim liq 0.0842 cap 0.1927 0.049 size 0.109 -0.0481 -0.6242 npl -0.0058 0.0517 0.017 0.1618 ni 0.1901 -0.037 0.0621 0.1986 0.1718 ci -0.5994 0.0045 -0.1495 -0.1234 -0.0093 -0.1544 ip 0.164 0.0289 0.0771 0.1813 0.1301 0.6036 -0.2001 dep 0.0366 -0.0231 -0.2857 0.3903 0.044 -0.0427 -0.1382 0.0053 inf 0.0575 0.1773 0.2135 -0.2673 0.0538 0.0339 0.2887 -0.047 -0.5531 gdp 0.034 -0.0198 -0.0792 -0.0019 -0.0366 -0.0156 -0.0185 -0.0576 -0.0151 0.0091 ms 0.2117 0.0311 -0.3522 0.7722 0.1892 0.1424 -0.1028 0.1244 0.1966 -0.001 0.0001 ms VI  APPENDIX 4: POOLED-OLS REGRESSION RESULT reg nim liq cap size npl ni ci ip dep inf gdp ms Source | SS df MS Number of obs = 336 -+ F( 11, 324) = 25.91 Model |.042161398 11.003832854 Prob > F = 0.0000 Residual |.047929633 324.000147931 R-squared = 0.4680 -+ Adj R-squared = 0.4499 Total |.090091031 335.000268928 Root MSE =.01216 | Coef liq | 0.027485 0.027854 0.99 0.324 -0.02731 cap | 0.046887 0.017638 2.66 0.008 0.012188 0.081586 size | 0.001418 0.00285 0.619 -0.00419 0.007024 npl | -0.2318 0.055 -0.46884 0.005232 ni | 0.197355 0.128295 1.54 0.125 -0.05504 0.44975 ci | -0.07528 0.005612 -13.42 -0.08632 -0.06424 ip | -0.06878 0.154805 -0.44 0.657 -0.37333 0.235774 dep | 0.012674 0.006389 1.98 0.048 0.000105 0.025243 inf | 0.093712 0.019427 4.82 0.055492 0.131931 gdp | 0.048144 0.061185 0.79 0.432 -0.07223 ms | 0.05935 0.03 0.005872 0.112827 _cons | 0.045903 0.024009 1.91 0.057 -0.00133  Std.Err t 0.5 0.120487 -1.92 0.027183 2.18 P>|t| [95% nim Conf Interval] 0.082282 0.168515 0.093136 APPENDIX 5: FEM REGRESSION RESULT xtreg nim liq cap size npl ni ci ip dep inf gdp ms,fe Fixed-effects (within) regression Number of obs = 336 Group variable: bank1 Number of groups = 28 R-sq: within = 0.4796 Obs per group: = 12 between = 0.2910 avg = 12.0 VII overall = 0.2876 max = 12 F(11,297) = 24.88 corr(u_i, Xb) = -0.7558 Prob > F = 0.0000 Std.Err Coef liq 0.046086 0.025237 1.83 0.069 -0.00358 cap 0.065307 0.015364 4.25 0.035071 0.095544 size 0.00854 0.003135 2.72 0.007 0.00237 0.01471 npl 0.0233 0.113921 0.2 0.838 -0.20089 0.247494 ni 0.113496 0.117543 0.97 0.335 -0.11783 0.344819 ci -0.08166 -0.09359 -0.06973 ip 0.058607 0.135841 0.43 0.666 -0.20873 0.32594 dep 0.018891 0.0071 0.008 0.004919 0.032863 inf 0.124022 0.017907 6.93 0.088782 0.159262 gdp 0.063128 0.048826 1.29 0.197 -0.03296 0.159217 ms 0.304863 0.081806 3.73 0.14387 0.465856 _cons -0.02812 0.269 -0.07811 0.021874 0.006064 t 13.47 2.66 0.025403 -1.11 P>|t| [95% nim Conf Interval] 0.095751 sigma_u 0.016164 sigma_e 0.009688 rho  0.735723 APPENDIX 6: REM REGRESSION RESULT xtreg nim liq cap size npl ni ci ip dep inf gdp ms,re Random-effects GLS regression Number of obs = 336 Group variable: bank1 Number of groups = 28 R-sq: within = 0.4579 Obs per group: = 12 between = 0.4577 avg = 12.0 overall = 0.4446 max = 12 Wald chi2(11) = 268.20 corr(u_i, X) = (assumed) Prob > chi2 = 0.0000 VIII Std.Err z P>|z| [95% nim Coef liq 0.050976 0.025149 2.03 0.043 0.001686 0.100267 cap 0.062481 0.01549 0.032122 0.09284 size 0.008089 0.003003 2.69 0.007 0.002204 0.013975 npl -0.09205 0.111384 -0.83 0.409 -0.31036 0.126253 ni 0.10151 0.117206 0.87 0.386 -0.12821 0.33123 ci -0.0782 0.005841 -13.39 -0.08965 -0.06675 ip -0.00842 0.136197 -0.06 0.951 -0.27537 0.258516 dep 0.012916 0.006689 1.93 0.053 -0.00019 0.026026 inf 0.110664 0.017668 6.26 0.076036 0.145293 gdp 0.058244 0.049825 1.17 0.242 -0.03941 0.1559 ms 0.050701 0.041905 1.21 0.226 -0.03143 0.132833 _cons -0.01077 0.663 -0.05915 0.037622 4.03 0.024688 -0.44 Interval] Conf sigma_u 0.007594 sigma_e 0.009688 rho  0.380589 APPENDIX 7: HAUSMAN TEST Coefficients sqrt(diag(V_b- | (b) (B) (b-B) | fem rem Difference S.E Liq 0.046086 0.0509764 -0.00489 0.0021038 Cap 0.065307 0.0624808 0.002827 Size 0.00854 0.0009019 0.0080894 0.00045 V_B)) Npl 0.0233 0.0920544 0.115354 0.0239099 Ni 0.113496 0.1015102 0.011985 0.0088998 IX Ci -0.08166 0.0782006 -0.00346 0.0016289 Ip 0.058607 0.0084248 0.067031 Dep 0.018891 0.0129161 0.005975 0.0023797 Inf 0.124022 0.1106644 0.013358 0.0029146 gdp 0.063128 0.0582444 0.004884 Ms 0.304863 0.0507009 0.254162 0.0702581 b = consistent under Ho and Ha; obtained from xtreg B = inconsistent under Ha, efficient under Ho; obtained from xtreg Test: Ho: difference in coefficients not systematic chi2(11) = (b-B)'[(V_b-V_B)^(-1)](b-B) = 24.96 Prob>chi2 = 0.0092 (V_b-V_B is not positive definite)  APPENDIX 8: BREUSCH – PAGAN TEST Breusch-Pagan / Cook-Weisberg test for heteroskedasticity Ho: Constant variance Variables: fitted values of nim chi2(1) = 117.12 Prob > chi2 = 0.0000  APPENDIX 9: HETEROSKEDASTICITY TEST Modified Wald test for groupwise heteroskedasticity in fixed effect regression model H0: sigma(i)^2 = sigma^2 for all i chi2 (28) = 5806.83 Prob>chi2 = 0.0000  APPENDIX 10: AUTOCORRELATION TEST Wooldridge test for autocorrelation in panel data X H0: no first-order autocorrelation F( 1, 27) = 74.185 Prob > F = 0.0000  APPENDIX 11: GLS TEST RESULT xtgls nim liq cap size npl ni ci ip dep inf gdp ms,corr(ar1) panels(h) Cross-sectional time-series FGLS regression Coefficients: generalized least squares Panels: heteroskedastic Correlation: common AR(1) coefficient for all panels (0.4774) Estimated covariances = 28 Number of obs = 336 Estimated autocorrelations = Number of groups = 28 Estimated coefficients = 12 Time periods = 12 Wald chi2(11) = 1353.92 Prob > chi2 = 0.0000 nim Coef Std.Err z P>|z| [95% Conf Interval] Liq 0.027687 0.0124596 2.22 0.026 0.003267 0.052107 cap 0.038475 0.0081914 4.7 0.02242 0.05453 size 0.004015 0.0015973 2.51 0.012 0.000884 0.007145 npl -0.03732 0.0623038 -0.6 0.549 -0.15944 0.084789 Ni 0.00033 0.0551268 0.01 0.995 -0.10772 0.108377 Ci -0.07889 0.0022386 -35.24 -0.08328 -0.0745 Ip -0.11677 0.0697551 -1.67 0.94 -0.25348 0.01995 dep 0.012926 0.0031744 4.07 0.006704 0.019148 Inf 0.097524 0.0081959 11.9 0.08146 0.113588 gdp 0.000807 0.0223033 0.04 0.971 -0.04291 0.044521 Ms -0.06827 0.026242 -2.6 0.009 -0.11971 -0.01684 _cons 0.03266 0.0128198 2.55 0.011 0.007534 0.057787 XI ... increase the competitiveness of commercial banks by analyzing and measuring the impact of these factors on banks' net interest margin of commercial banks listed on the Vietnamese Stock Exchange in the. .. net interest margin of Vietnamese commercial banks, and clarify factors affecting the net interest margin of Vietnamese banks in recent years based on quantitative analysis models Finally, the thesis... suggesting the higher accuracy of study In terms of practical meaning, the research results will show the group of factors affecting the net interest margin of Vietnamese commercial banks and the level