The influence of factors on the probability of incurring bad debt exceeding the threshold at joint-stock commercial banks

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Abstract

The study aims to analyze the factors affecting the probability of bad debt exceeding the threshold at listed joint-stock commercial banks in Vietnam during the period 2012–2024. The study examines the relationship between the probability of bad debt exceeding the threshold (Lyra et al., 2015) and independent variables such as credit growth rate, bank size, business efficiency, liquidity, and macroeconomic variables such as inflation rate, economic growth, and money supply by using a binary logit model. The results show that rapid credit growth, low business efficiency, and poor liquidity are factors that significantly increase the probability of bad debt exceeding the threshold. On the contrary, large size and high profitability have an impact on reducing this probability. The study provides important empirical evidence for bank managers in controlling credit risks and contributing to ensuring the safety of the banking and financial system in Vietnam (Chang et al., 2025). The study contributes to the application of the logit model to predict the possibility of bad debt exceeding the threshold, while clearly identifying key factors to enable banks to enhance early warning and control credit risks more effectively.

Keywords: Joint-Stock Commercial Banks, Stock Market, Internal Financial Factors, Macroeconomic Factors, Non-Performing Loans

Authors’ individual contribution: Conceptualization — T.V.A.P and T.H.T.H.; Methodology — T.V.A.P.; Validation — V.B.N. and T.H.T.H.; Formal Analysis — T.V.A.P. and V.B.N.; Investigation — V.B.N.; Resources — T.H.T.H.; Data Curation — H.Q.D. and T.H.T.H.; Writing — H.Q.D. and T.H.T.H.; Supervision — H.Q.D.; Project Administration — T.V.A.P.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: E31, G21, G30, G32

Received: 23.11.2025
Revised: 15.02.2026; 02.03.2026
Accepted: 11.03.2026
Published online: 13.03.2026

How to cite this paper: Pham, T. V. A., Nguyen, V. B., Doan, H. Q., & Ho, T. H. T. (2026). The influence of factors on the probability of incurring bad debt exceeding the threshold at joint-stock commercial banks. Risk Governance and Control: Financial Markets & Institutions, 16(1), 152–162. https://doi.org/10.22495/rgcv16i1p13