Start
February 26, 2025 - 3:00 pm
End
February 26, 2025 - 4:00 pm
Address
H.001, 1A Hoang Dieu, Phu Nhuan, HCMC View mapThe impact of income diversification on liquidity risk of Vietnamese commercial banks
Student: Đoàn Thị Ngọc Huệ, VNP-28
Supervisor: Dr. Nguyễn Thị Thùy Linh
Abstract:
The study analyzes and evaluates the impacts of income diversification on the liquidity risk of Vietnamese commercial banks, using data from 27 commercial banks spanning from 2005 to 2023. Income diversification is measured by the HerfindahlHirschman Index (HHI) and the ratio of non-interest income to total operational income (SHNON). The liquidity risk of the banks is assessed using the financing gap (FGAP) and the loan-to-deposit ratio (LDR). Furthermore, this study also investigates the impact of the banks’ other activities (non-interest earnings), as well as macroeconomic factors such as GDP growth, changes in money supply, and the inflation rate on liquidity risk. The results show that income diversity has a negative and significantly effect on bank liquidity risk. An increase in income diversity leads to a decrease in liquidity risk. Furthermore, ETA, EFD, SIZE and ROE positively correlate with liquidity risk, although NLP does not influence
liquidity risk. Regarding macroeconomic considerations, inflation rate negative influences liquidity risk. However, GDPG and M2C do not affect banks’ liquidity risk.
