,
Department of Accounting, University of Labor and Social Affairs (ULSA), Hanoi, Vietnam
,
Academy of Finance (AOF), Hanoi, Vietnam
Hanoi Metropolitan University, Hanoi, Vietnam
This paper evaluates the influence of equity capital structure on the performance of the Vietnamese joint-stock commercial banks. The empirical study is based on the dataset comprising 30 commercial banks observed over the period 2015–2024, resulting in a total of 300 observations. To confirm statistical validity and the robustness of the empirical findings, four estimation techniques were employed: Ordinary Least Squares (OLS), Fixed Effects Model (FEM), Random Effects Model (REM), and Generalized Least Squares (GLS). After accounting for potential heteroskedasticity and autocorrelation, the GLS model was identified as the most appropriate specification, with a coefficient of determination of R2 = 0.740. The empirical results reveal that Equity Capital (EC) has a positive and statistically significant effect on Return on Equity (ROE) . This finding specifies that stronger equity capital enhances banks' financial resilience by serving as a capital buffer, thereby mitigating risk and improving overall financial performance. The performance of banks is also positively influenced by control variables such as the bank size (β = 0.0119) and the loan-to-total assets ratio (β = 0.0205). On the contrary, the profitability of banks is significantly affected by cost to income ratio (β = −0.0261), non-performing loan ratio (β = −0.0291) (p < 0.05), this is the most important need for maintaining banks and implementing them with strict and careful cost optimization and credit risk management. Based on these statistical findings, commercial banks need to focus on strengthening capital and asset quality management in order to continue to operate in the financial dynamic of Vietnam.
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