Bank size and bank profitability : Case study of Vietnam commercial banks

Abstract

This thesis investigates the relationship between size and performance for commercial banks in Vietnam in order to find out the effect of bank size on each components of profitability in commercial bank in Viet Nam. This study has been progressed from January 2014 to April 2014 in Ho Chi Minh City. The review of literature, related theories, definition as well as the previous research. Theoretical model inherited from the model of Mesut Dogan (2013), Serrasqueiro and Nunes (2008), and Aremu et.al. (2013). The sample consists of 32 banks in which 27 joint stock and 5 stated-owed ones during period from 2006 to 2012. By using fixed effect model with unbalanced panel data, we conclude that performance is related partly to size. This relationship come from total assets – one indicator of bank size have significant influence on bank profitability in terms of ROE and NIM. Furthermore, our empirical results show that other control variables such as debt and bank age also affect bank performance.