Determinants of capital adequacy ratio for Vietnamese commercial banks

Abstract

The thesis is based on data from 26 commercial banks in Vietnam from 2011 to 2020, and the study intends to investigate which factors impact capital adequacy ratios by employing multiple regression models for the dataset. The outcome is that the variables bank size (SIZE) and financial leverage (LEV) have a negative influence on the CAR coefficient when using the Feasible generalized least squares (FGLS) model. Another element, such as Log Interest Rate Log (LnIR), on the other hand, shows a positive association with CAR. As a result, this study offers some recommendations for investors to have a better understanding of capital management at banks as well as some ways to assist banks in improving their capital adequacy ratio