Pham Thi Xuan Thoa, Nguyen Ngoc Anh

Main Article Content


The analysis of a data set of observations for Vietnamese banks in the period 2011-2015 shows how the Capital Adequacy Ratio (CAR) is influenced by selected factors, namely: asset of the bank SIZE, loans in total assets LOA, leverage LEV, net interest margin NIM, loans lost reserve LLR, Cash and Precious Metals in total assets LIQ. Results indicate, based on data, that NIM and LIQ have significant effect on CAR. On the other hand, SIZE and LEV do not appear to have significant effect on CAR. Variables NIM, LIQ have positive effect on CAR, while variables LLR and LOA are negatively related with CAR.


Capital adequacy ratio (CAR), Vietnamese banks, Basel, NIM, LIQ


[1] Abusharba, M. T., Triyuwono, I., Ismail, M., & Rahman, A. F., “Determinants of capital adequacy ratio (CAR) in Indonesian Islamic commercial banks”, Global Review of Accounting and Finance, 4 (2013) 1, 139-170.
[2] Ahmad, R., Ariff, M., & Skully, M. J., “The determinants of bank capital ratios in a developing economy”, Asia-Pacific Financial Markets, 15 (2008) 3-4, 255-272.
[3] Allen, D. E., Nilapornkul, N., & Powell, R., “The Determinants of Capital Structure: Evidence from Thai Banks”, Journal of Monetary Economics, 32 (2013) 1, 513-542.
[4] Al-Sabbagh, N., “Determinants of capital adequacy ratio in Jordanian and Evidence”, Journal of Monetary Economics, 32 (2004) 1, 513-542.
[5] Aremu, M. A., Ekpo, I. C., Mustapha, A. M., & Adedoyin, S. I., “Determinants of Capital Structure in Nigerian Banking Sector”, International Journal of Academic Research in Economics and Management Sciences, 2 (2013) 4, 27-43.
[6] Arua, N., “Risk- Based Capital Standards for Banks: A critique”, Central Bank of Nigeria’ Economic and Financial Review, 44 (2006) 3, 201-216.
[7] Aspal, P. K., & Nazneen, A., “An empirical analysis of capital adequacy in the Indian private sector banks”, American Journal of Research Communication, 2 (2014) 11, 28-42.
[8] Baltagi, Badi, Econometric analysis of panel data, John Wiley & Sons, 2008.
[9] Basel, I. I., “International Convergence of Capital Measurement and Capital Standards: A Revised Framework Basle Committee on Banking Supervision”, 2004.
[10] Benston, G. J., & Kaufman, G. G., “The appropriate role of bank regulation”, Economic Journal, 106 (1996) 1, 688-697.
[11] Berger, A. N., “The relationship between capital and earnings in banking”, Journal of Money, Credit and Banking, 27 (1995) 2, 432-456.
[12] Berger, A. N., & Di Patti, E., “Capital structure and firm performance: A new approach to testing agency theory and an application to the banking industry”, Journal of Banking and Finance, 30 (2006) 4, 1065-1102.
[13] Berger, A. N., Herring, R. J., & Szegö, G. P., “The role of capital in financial institutions”, Journal of Banking & Finance, 19 (1995) 3, 393-430.
[14] Bokhari, I. H., Ali, S. M., & Sultan, K., “Determinants of Capital Adequacy Ratio in Banking Sector: An Empirical Analysis from Pakistan”, Academy of Contemporary Research Journal, 2 (2012) 1, 1-9.
[15] Büyüksalvarci, A., & Abdioglu, H., “Determinants of capital adequacy ratio in Turkish Banks: A panel data analysis”, African Journal of Business Management, 5 (2011) 27, 11199-11209.
[16] Dreca, N., “Determinants of Capital Adequacy Ratio in Selected Bosnian Banks”, Dumlupınar ÜniversitesiSosyal Bilimler Dergisi EYİ, 12 (2013) 1, 149-162.
[17] Ebhodaghe, J. U., “The impact of failed banks on the Nigerian economy”, NDIC Quarterly Reports, 6 (1996) 1&2.
[18] Gropp, R., & Heider, F., “The determinants of bank capital structure”, Review of Finance, 30 (2010) 1, 1-17.
[19] Ikpefan, O. A., “Capital adequacy, management and performance in the Nigerian commercial bank (1986-2006)”, African Journal of Business Management, 7 (2013) 30, 2938-2950.
[20] Kishore, R. M., Taxmann financial management, New Dehli: Taxmann Allied services Ltd., 2007.
[21] Kleff, V., & Weber, M., “How do banks determine capital? Evidence from Germany”, German Economic Review, 9 (2008) 3, 354-372.
[22] Hausman, Jerry A., ed., Contingent valuation: A critical assessment. Vol. 220. Elsevier, 2012.
[23] Mbizi, R., “An analysis of the impact of minimum capital requirements on commercial bank performance in Zimbabwe”, International Journal of Independent Research and Studies, 1 (2012) 4, 124-134.
[24] Pandey, A., “Volatility models and their performance in Indian capital markets”, Vikalpa, 30 (2005) 2, 27-38.
[25] Reserve Bank of New Zealand, “Capital adequacy ratios for banks-simplified explanation & examples for calculation”, 2004.
[26] Teryima, S. J., Victor, U., & Isaac, K., “Achieving organizational goals through successful strategic change implementation in business organizations: A survey of selected banking firms in Nigeria, West Africa”, The Business & Management Review, 4 (2014) 4, 66-79.
[27] Wall, L. D., “Regulation of bank’s equity capital”, Economic Review-Federal Reserve Bank of Atlanta, 1985.
[28] Williams, H. T., “Determinants of capital adequacy in the Banking Sub-Sector of the Nigeria Economy: Efficacy of CAMELS”, International Journal of Academic Research in Business and Social Sciences, 1 (2011) 3, 233-248.