A BAYESIAN ANALYSIS OF DETERMINANTS OF NET INTEREST MARGINS OF COMMERCIAL BANKS IN VIETNAM.

The current article investigates the impact of bank-specific and macroeconomic factors on the net interest margin (NIM) of commercial banks in Vietnam. In order to explore the association, we performed Bayesian linear regression on a dataset of 24 banks from 2008 to 2020. Our research result reveals that bank size (LNSIZE), profitability (ROA), operational cost to operating income ratio (BOPO), loan-to-deposit ratio (LDR), and non-performing loan ratio (NPL) of a bank positively affect the NIM of banks. On the contrary, bank liquidity (GWM) and loan market power (MPR) negatively affect the NIM of banks. Moreover, we suggest that macroeconomic factors, including GDP growth (GDP) and M2 money supply growth (M2), have a negative impact on NIM. Furthermore, the impact of the inflation rate (INFL) on NIM is relatively low. Our article highlights new information that improves the understanding of the NIM of banks in emerging economies like Vietnam. [ABSTRACT FROM AUTHOR]