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Introduction
The banking sector is a fundamental component of Vietnam's economy, which is crucial in fostering economic development and preserving financial stability. However, in the context of global economic integration, Vietnamese commercial banks are increasingly exposed to significant financial risks that arise from economic fluctuations, regulatory changes, and growing competition within the industry. The consequences of the 2008 global financial crisis underscored these weaknesses, as many banks in Vietnam faced severe challenges, including non-performing loans, liquidity shortages, and operational inefficiencies, leading to mergers or nationalization [1]. At the same time, some banks have demonstrated remarkable growth, expanding both in size and quality, becoming influential players in the domestic market, and venturing into foreign markets. This disparity in development among banks underscores the critical need to understand the factors contributing to their varied performance. Between 2019 and 2022, Vietnam experienced the significant effects of the COVID-19 pandemic on its socio-economic environment. The economy faced numerous challenges in production and business activities, including supply chain disruptions, inflationary pressures, rising input costs, labor shortages, and social security issues. The successive waves of the pandemic severely affected all aspects of life, causing production and business operations to stall. In this context, the banking system played a crucial role in sustaining monetary circulation, ensuring macroeconomic conditions, and supporting the country's growth and development, as it is the backbone of the economy.
Risk management has increasingly become critical in developing strategies to enhance operational efficiency and expand commercial banks'scale, particularly in emerging markets. According to Muriithi [2], financial risks are characterized by unanticipated fluctuations or volatility in financial returns, stemming from factors such as credit risk, liquidity risk, operational risk, and interest rate risk. Juma and Atheru [3] defines financial risk as the probability of financial loss caused by market instability, including changes in asset prices, currency fluctuations, and interest rate volatility. For banking institutions, managing financial risks is critical to maintaining long-term stability and minimizing potential losses. This research views financial risks as multidimensional, focusing on credit, liquidity, and operational risks. Credit risk is the probability that a borrower will fail to make debt payments [4]. Liquidity risk arises when a bank struggles to meet its short-term financial obligations, and the ratio of total loans to total deposits commonly measures...