Impact of the COVID-19 pandemic on bank efficiency in Vietnam

  • Received August 23, 2021;
    Accepted January 25, 2022;
    Published January 26, 2022
  • Author(s)
  • DOI
    http://dx.doi.org/10.21511/bbs.17(1).2022.02
  • Article Info
    Volume 17 2022, Issue #1, pp. 13-23
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This work is licensed under a Creative Commons Attribution 4.0 International License

Banking system is an important part of the financial system of each country. The operating efficiency in the commercial banking system will provide the tools and financial products more attractive and relevant to the needs of actors in the economy. The purpose of this paper is to analyze the impact of COVID-19 on the efficiency of 26 Vietnamese commercial banks. The paper uses a quantitative method with the nonparametric frontier analysis, data envelopment analysis (DEA) approach, to measure the efficiency of Vietnamese commercial banks. The paper adopts an intermediation approach as the banks are viewed as financial intermediaries providing financial services and payment services to entities in the economy. Research findings reveal that Vietnamese commercial banks have effectively leveraged the positive impacts of the COVID-19 pandemic, since the average efficiency in 2020 improved over the pre-pandemic period in 2019 on the same models for comparison and estimation. Based on such findings, the study makes some suggestions and recommendations to help Vietnamese commercial banks increase their operational efficiency in the context of the prolonged pandemic.

Acknowledgment
The author wishes to acknowledge support from the Banking University – Ho Chi Minh City. This research was made possible thanks to all valuable support from relevant stakeholders.

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    • Table 1. The information of banks in the dataset
    • Table 2. Descriptive statistics on banks for 2019
    • Table 3. Descriptive statistics on banks for 2020
    • Table 4. The efficiency of 26 Vietnamese commercial banks in 2019
    • Table 5. The efficiency of 26 Vietnamese commercial banks in 2020
    • Table 6. Efficiency comparison of 26 Vietnamese commercial banks before and during the COVID-19 pandemic
    • Table 7. Hypotheses testing results
    • Conceptualization
      Nguyen Minh Sang
    • Data curation
      Nguyen Minh Sang
    • Formal Analysis
      Nguyen Minh Sang
    • Methodology
      Nguyen Minh Sang
    • Software
      Nguyen Minh Sang
    • Visualization
      Nguyen Minh Sang
    • Writing – original draft
      Nguyen Minh Sang
    • Writing – review & editing
      Nguyen Minh Sang