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Article

Revenue Diversification, Risk and Bank Performance of Vietnamese Commercial Banks

Faculty of Banking, Banking Academy, Hanoi 100000, Vietnam
J. Risk Financial Manag. 2019, 12(3), 138; https://doi.org/10.3390/jrfm12030138
Received: 28 June 2019 / Revised: 24 August 2019 / Accepted: 26 August 2019 / Published: 28 August 2019
(This article belongs to the Special Issue Commercial Banking)
In the future, when the process of economic integration in the banking sector is more powerful, and competitive, diversifying revenue is an inevitable and objective trend to help the banks increase profits, minimize risks and improve their competitive position in the system. The research is on the relationship between revenue diversification, risk and bank performance using data from audited financial statements and annual reports of 26 commercial banks listed and unlisted in Vietnam during the period 2010–2018. The research method uses Generalized Method of Moment (GMM) modeling techniques to solve endogenous problems, variance and autocorrelation in the research model. Research results show that diversification negatively impacts profitability and the higher the diversification, the higher the risk of commercial banks. However, the more diversified listed banks, the more increased the bank’s stability. The banks show the weakness and lack of experience of the banking system in developing a reasonable profit transformation model. The revenue diversification of banks is currently passive and moves slowly. Interest income is still the motivation of bank development, boosting profit growth. Growth, as well as the contribution from service activities, is not commensurate with potentials; although there are many positive points, they are not enough to cover risks from net interest income activities. View Full-Text
Keywords: revenue diversification; bank risks; bank performance; net interest income; non-interest income revenue diversification; bank risks; bank performance; net interest income; non-interest income
MDPI and ACS Style

Ngoc Nguyen, K. Revenue Diversification, Risk and Bank Performance of Vietnamese Commercial Banks. J. Risk Financial Manag. 2019, 12, 138. https://doi.org/10.3390/jrfm12030138

AMA Style

Ngoc Nguyen K. Revenue Diversification, Risk and Bank Performance of Vietnamese Commercial Banks. Journal of Risk and Financial Management. 2019; 12(3):138. https://doi.org/10.3390/jrfm12030138

Chicago/Turabian Style

Ngoc Nguyen, Khanh. 2019. "Revenue Diversification, Risk and Bank Performance of Vietnamese Commercial Banks" Journal of Risk and Financial Management 12, no. 3: 138. https://doi.org/10.3390/jrfm12030138

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