The paper, therefore, tries to suggest some measures to improve financial strength and adjust the income structure for commercial banks by controlling income from lending service and developing sources of income from non-lending services. | 114 | Nguyễn Thị Loan | 114 - 132 Financial Performance and Income Structure in Vietnam’s Commercial Banks NGUYỄN THỊ LOAN Banking University Email: ARTICLE INFO ABSTRACT Article history: Received: May 7, 2013 Received in revised form May 21, 2013 Accepted: Sep. 25, 2013 Keywords: banking financial performance, banking income In this paper, the author uses the index analysis to explore relationships between financial performance and income structure in Vietnamese commercial banks during the years 2007-2011. The results show that financial performance of most commercial banks is mainly determined by lending service, which implies that their profits involve high degrees of risk. The paper, therefore, tries to suggest some measures to improve financial strength and adjust the income structure for commercial banks by controlling income from lending service and developing sources of income from non-lending services. Financial Performance and Income Structure JED October 2013| 115 1. INTRODUCTION Analysis of banking financial performance in general and income structure in commercial banks in particular plays an important role in supporting banking executives to make decisions on organizational issues and policy that may enhance financial strength, restructure banking operations, and affect every customer segment, thereby gaining optimal income and controlling risky income from lending service. 2. BANKING INCOME Financial performance reflects structure and size of assets of a bank. Equity and profit (or loss) of the bank are presented in financial reports: sizes of assets and equity are presented in balance sheet, while profit or loss is presented in income statement. Financial performance of the bank is mainly recorded according to Accounting Standard 22, “Disclosures in financial statements of banks and similar financial institutions” and relevant accounting standards, principles and regulations. Banking income is part of profit for
