An analysis of loan loss provisioning behaviour in Vietnamese banking

Bryce, Cormac; Dadoukis, Aristeidis; Hall, Maximilian; Nguyen, Linh; Simper, Richard

Abstract

This paper investigates loan loss provisioning (LLP) behaviour by Vietnamese banks during the period 2006–2012. We test the capital, income-smoothing and cyclical management hypotheses and examine whether the inclusion of X-efficiencies and/or risk control variables influences provisioning behaviour. When the X-efficiency estimates are incorporated into the models, Vietnamese banks do not exhibit counter-cyclical or capital management manipulation by managers, but counter cyclical income smoothing. Yet, the inclusion of risk control variables in X-efficiency scores (either equity or reserves for impaired loans) supports the addition of capital management hypotheses.

Citation

Bryce, C., Dadoukis, A., Hall, M., Nguyen, L., & Simper, R. (2015). An analysis of loan loss provisioning behaviour in Vietnamese banking. Finance Research Letters, 14, 69-75. doi:10.1016/j.frl.2015.05.014

• Journal Article Type: Article
• Acceptance Date: May 25, 2015
• Online Publication Date: May 29, 2015
• Publication Date: Aug 25, 2015
• Deposit Date: Jun 28, 2017
• Publicly Available Date: Feb 6, 2019
• Print ISSN: 1544-6123
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 14
• Pages: 69-75
• DOI: https://doi.org/10.1016/j.frl.2015.05.014
• Public URL: https://nottingham-repository.worktribe.com/output/1103338
• Publisher URL: https://www.sciencedirect.com/science/article/pii/S1544612315000586?via%3Dihub