Factors Affecting Bad Debt in the Vietnam Commercial Banks

The paper examines the factors affecting bad debts of Vietnamese commercial banks in the period of 2012-2018. On the basis of theory and previous empirical studies on the factors affecting NPLs, in combination with the use of GMM method, the author has built a model of eight variables affecting NPLs. However, the research results show that there are five variables affecting bad debt. Statistically significant variables are business performance, bank size, credit growth, gross domestic product growth and inflation rate. The final estimation model is effective because the defects have been tested so there is not any deficiencies in the model. Based on the research results, the author proposes a number of related recommendations to manage and control bad debts and improve business performance of Vietnamese commercial banks.