Diversifying Business Models and Bank Stability

Research on banking sustainability plays an important role for banks in the growing financial market. As a result, banks must compete more, making the risk of weak banks increase. This study was conducted to evaluate the impact of business models on bank stability — analytical data on joint-stock commercial banks listed on the Vietnam stock exchange from 2012 to 2019. The panel data regression analysis model with a generalized method of moments (GMM) is used to analyze the results. The GMM results show that net interest income (NII) has a positive effect on bank stability. On the other hand, non-interest income (NNII and TRADE) has a negative impact on bank stability. This result indicates that business models are having a negative impact on bank stability. The study also points out several implications for improving the sustainability of banks.