Analysis of the impact from non-interest income to the operational efficiency of commercial banks in Vietnam

• Main Authors: Sang Nguyen Minh, Tam Tran Thi Thanh
• Format: Article
• Language: English
• Published: Growing Science 2020-02-01
• Series: Management Science Letters
• Subjects: Commercial banks; Non-interest income; Operational efficiency; Vietnam
• Online Access: http://www.growingscience.com/msl/Vol10/msl_2019_238.pdf

The research analyses the impact of non-interest income on the performance of 26 Vietnamese commercial banks in the period of 2008 - 2017 by the Generalized Method of Moments (GMM) method. The research results show that: (i) The average non-interest income ratio of Vietnamese commercial banks is only 8.32%, a significantly low level compared with the interest income ratio of more than 90% of the total income of the banks; (ii) Non-interest income has a positive impact on the performance of Vietnamese commercial banks in the research period. The research results assist in confirming the trend of diversifying non-credit activities to increase non-interest income ratio of Vietnamese commercial banks.