Factors affecting the efficiency of Vietnam's joint stock commercial banks

Five years after the National Assembly's Resolution 42/2017/QH14 on the settlement of credit institutions' bad debts and the Prime Minister's Decision 1058/QD-TTG approving a plan for credit institution restructuring, this study assesses the effectiveness of Vietnam's Joint Stock Commercial Banks (JSCBs). Using the Data Envelopment Analysis (DEA) technique, a quantitative method, this study evaluates the efficiency of 18 selected JSCBs in Vietnam between 2018 and 2022. It employs the Tobit model and Ordinary Least Squares (OLS) model to investigate the factors that affect efficiency. The findings demonstrate that, with an average technical efficiency index of 44.09%, banks underutilize their input resources between 2018 and 2022. To increase business efficiency, JSCBs in Vietnam should manage human resources, increase capital mobilized from deposits, and enhance income from credit activities. Furthermore, empirical data indicates that JSCBs can function more efficiently if their total assets and equity are increased, and their existing loan portfolio is reduced.