Bank efficiency, ownership structure and regulations in Vietnam.

Summary This thesis consists of three chapters. The first chapter analyzes the impact of shareholding structure and reforms implemented in the 2000s on the efficiency of commercial banks in Vietnam. The results show that efficiency differs according to the type of ownership structure: state-owned banks have lower efficiency levels compared to private banks and banks with foreign shareholders. Since the implementation of stricter minimum capital requirements, bank capitalization has also been an important driver of bank efficiency. The second chapter discusses how banks in Vietnam set their interest margins with a particular focus on banks' ownership structure and central bank regulation of interest rates. The results show that only private and public banks pass on their operational costs to their customers. Bank capitalization, which reflects banks' risk aversion, is a significant determinant for foreign and state-owned banks only in the case of interest rate regulation. these banks tend to pass on the high cost of capital to customers. We also show that, in the absence of interest rate controls, foreign banks set higher margins when they take on higher credit risk, whereas in the presence of interest rate regulation private banks face higher credit risk without being able to increase their margin accordingly. The final chapter studies the impact of monetary policy and economic conditions on bank lending for different levels of bank capitalization. The results indicate that all types of monetary policy shocks have a negative effect on lending, but that increasing bank liquidity leads to a smaller reduction in loan growth. Finally, banks with lower capitalization are less influenced by the business cycle.