The Threshold for the Efficient Scale of Vietnamese Commercial Banks: A Study Based on Bayesian Model

The study is conducted to determine the relationship between total assets and return on assets (ROA) and to find the optimal size of commercial banks in Vietnam. Based on the data collected from 31 Vietnamese commercial banks in the period 2007–2017, the results show that there is an inverted U-shaped relationship between total assets and ROA of commercial banks in Vietnam. The current total assets of commercial banks are still much below the optimal size. Therefore, the policies of the Central Bank and bank’s owners should focus on increasing bank’s capitial as well as bank’s financial capacity.