Factors Affecting the Management Capacity of Credit Risk: A Case Study of Commercial Banks in Ho Chi Minh City

Abstract

The issue of risk and risk management in credit granting activities of commercial banks has now become urgent. Credit risk management is the best way all bank entities need to implement and not lose their invested capital. The article analyzes factors affecting credit risk management capacityat commercial banks in Ho Chi Minh City (HCMC).It is anessential element of the risk management system. The research results had 500credit staffsrelated to commercial banks, but 475 samples were processed. Data collected through a questionnaireuseda convenient sampling method and processed by SPSS 20.0 and Amos.The authors testedthe scales' reliability by Cronbach's Alpha and Structural Equation Model (SEM). The paper's finding has fivefactors affecting the management capacity of credit risk at commercial banks in HCMC, includingExecutive management capacity; Capacity to develop and measure credit risk measurement tools; Credit risk control capacity; Credit risk processing capacity, and Management information systems and informatics infrastructure. This result is a scientific basis to help the managers’ banks improve credit risk management capacityin the future.