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= β + β 2 + β + β + β + ε
, 0 2 3 4 5 ,
With i, t corresponding to the bank and survey year, β is the intercept coefficient,
0
β to β are the slope coefficients of the independent variables and ε is the statistical
1 5 ,
residual.
3.2. Variables and data
Non-performing loans (NPL) are debts belonging to groups 3, 4, and 5 (according
to the regulations of the State Bank of Vietnam), clearly shown in the Circular. From
the notes of the financial statements and total outstanding loans of the banks' financial
statements for 2014 - 2023. In this article, we also use gross NPLs, and each group of
NPLs includes groups 2, 3, 4, and 5.

CO2 emissions (CO2) in Vietnam are increasing, affecting the overdue loan rate.
The leading causes of increased CO2 emissions are burning oil, coal, gas, petroleum,
and deforestation. The independent variable CO2 is determined by the natural logarithm
of CO2 emissions (tons/person) in year t, data collected from the World Bank and
Climate Watch.
Credit growth (CG), a key indicator of a bank's loan portfolio expansion, is a

primary goal for most commercial banks. However, rapid and uncontrolled credit
growth can pose significant risks to risk management and loan quality. Data on credit
growth is sourced from the General Statistics Office and World Bank, highlighting the
urgency of this issue in the financial sector.
The economic growth rate (GDP), a macro indicator of the overall economy, plays
a crucial role in loan repayment. During economic crises, the financial situation of
individuals and businesses becomes precarious, leading to difficulties in debt repayment

and an increase in the overdue loan rate. The GDP data, which reflects the rate of
decrease/increase in gross domestic product, is sourced from the General Statistics
Office and World Bank, underscoring the gravity of the situation.
Inflation (INF) is a factor that directly affects market prices of goods. The
independent variable INF is determined through the consumer price index - CPI through
the expression of CPI growth rate and the Vietnam General Statistics Office.

Table 1. Summary of variables and expectations
Variables Signs Measure Expected
NPLs , 3+4+5

CO2 emissions 2 Ln(Amount of CO2) -

Credit growth +
,
Economic growth rate Real GDP growth rate -

Inflation ratio Consumer price index - CPI +

Source: Authors’ gathering

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