Volume 2 • Issue 1 | March, 2018
The Impact of Geographical Diversification on Commercial Banks’ Performance in Vietnam
Tram Thi Xuan Huong, Nguyen Tu Nhu
Abstract:
Nowadays, the diversification strategy of commercial banks is an indispensable trend in the competitive process. Diversification of banking activities is reflected in many fields such as product diversification, revenue diversification, expense diversification or geographical diversification, etc and its results will change the structure of banks’ income. This paper investigates the impact of geographical diversification on business efficiency of commercial banks in Vietnam by using the regression method with the panel data set including 25 commercial banks in Vietnam covering the period from 2004 to 2015. The research provides empirical evidence that geographical diversification is not beneficial to the performance of commercial banks in Viet Nam. It then suggests the necessary policies to diversify geography to improve the efficiency of banking business.