Bank Profitability and Economic Uncertainty: A New Perspective on Measurement

Abstract:

This study evaluates the impact of economic uncertainty on bank profitability. Instead of using traditional measures, we applied new indicators to assess bank performance and economic uncertainty. By utilizing the Feasible generalized least squares estimation method along with robustness checks, the results are ensured to be accurate. Based on balanced panel data compiled from the financial statements of 26 Vietnamese commercial banks in the period 2010 – 2023. The analysis reveals that economic uncertainty has a negative impact on the profitability of banks. Other control factors also show a high statistical significance, playing an important role in understanding the factors that influence the banking sector’s profitability.