Impact of Ownership Structure and Bank Performance – An Empirical Test in Vietnamese Banks

Abstract

By using the data collected from the whole 44 banks in the banking system in Vietnam from 2010-2012, the authors try to investigate the impacts of ownership structure on bank performance in Vietnamese banking system. Research results show that capital concentration and private ownership have positive impact on bank profitablity, the nonperforming loan ratio has negative relation with banks' profitability. Besides, the research results are also consistent with the previous researches (Nguyen, Tran & Pham, 2014) on the positive correlation of corporate governance and bank performance in Vietnam. The findings in this paper are also relevant with the previous researches in Kenya, China, Malaysia (Wen, 2010, Rokwaro, 2013). From these findings, some policy implications are also suggested as follow: (i) encourage the large shareholders participation the Board of Director to reduce the interest conflict in banks, (ii) enhance private ownership to increase bank profitability, (iii) improve the corporate governance of banks under international standards, and (iv) push-up the solving of non-performing loans in the bank restructuring in Vietnam.

Does Ownership Structure Matter for Bank Performance in the MENA Region? An Empirical Evidence

“…The results support the monitoring hypothesis that ownership concentration leads to more efficient internal process and governance structure. This result is consistent with the results reported by (Jensen and Meckling, 1976;Shleifer and Vishny, 1986;Affes and Hakim, 2013;Son et al, 2015;Heugens et al, 2009). …”

“…This confirm the expropriation hypothesis which states that ownership concentration has an adverse effect on bank performance as it may increase the agency costs and cause tunneling problem. The results is consistent with (Gutiérrez &Tribo, 2004;Boyd et al, 1998;Filatotchev et al,2001;Alimehmeti and Paletta, 2012;Pinto and Augusto,2014;Lee, 2008;Su and He,2012) and contradicts with (Jensen and Meckling, 1976;Shleifer and Vishny, 1986;Affes and Hakim, 2013;Heugens et al, 2009;Son et al,2015) who support the positive association between ownership concentration and bank performance according to the monitoring hypothesis. Bank size has a significant positive effect on overall bank performance measured by BSC.…”

“…This negative effect can be justified by the expropriation hypothesis which comes at the ISSN 1946-052X 2017 cost of improving the workplace and investing in their stuff. The results is consistent with (Gutiérrez & Tribo,2004;Boyd et al, 1998;Filatotchev et al,2001;Alimehmeti and Paletta, 2012;Pinto and Augusto, 2014;Lee, 2008;Su and He, 2012) and contradicts with (Jensen and Meckling,1976;Shleifer and Vishny,1986;Affes and Hakim,2013;Heugenset al, 2009, Son et al, 2015.…”

Impacts of Ownership Structure on Systemic Risk of Listed Companies in Vietnam

“…The ownership structure helps enhance the corporate governance and thereby improve the information environment of the company or through mechanisms based on the information advantages of some investors transactions based those obtained information advantages to limit the degree of stock synchronicity compared to that of the overall market and thereby limit the systemic risk of the market. The ownership structure was approached in two aspects: ownership concentration -ownership of the major shareholder and ownership mix (Nguyen, Tran, Dinh, Lai, & Pham, 2015).…”

Impact of Ownership Concentration on Capital Structures: A Case of Turkish Banking Sector

“…This result may be due to the fact that major shareholders leave banks no choice but get into long-term debt and that make difficult to determine optimal capital structure. On the other hand, while several studies (Ozili & Uadiale, 2017;Migliardo & Forgione, 2018) found a positive relationship between these two variables, some of them provided evidence that there is no relationship between the so-called variables (Chalermchatvichien et al, 2014;Son et al, 2015;Iannotta et al, 2007;Micco et al, 2007;Zouari & Taktak, 2014;Musah, 2017). Besides, the empirical findings for the first model have shown a positive relationship between bank size and the share of total deposits.…”