Net Interest Margin of Commercial Banks in Vietnam

Abstract

The paper investigates the factors that affect the net interest margin (NIM) of commercial banks (CBs) in Vietnam between 2008 and 2018. We examine secondary data of CBs with 308 observations during the period 2008-2018, and apply a range of investigative methods to confirm the empirical findings. The results show that operating expenses and credit risk have a positive impact on NIM, whereas the level of risk aversion, quality of management, income from trading, and the proportion of deposits have negative impacts on NIM. The empirical findings offer suggestions which should help bank management to identify the factors affecting the marginal interest rate to apply suitable policies in supervising CBs in Vietnam.