The objective of this study is to analyze the influence of top management team (TMT) diversity on innovation in the banking industry in Vietnam with the mediating role of capital structure based on data collected from 23 banks. for the period 2015 – 2020. Diverse characteristics of TMT were studied including age, gender, education level and tenure. The analytical methods used in the study include random effects models, fixed effects models and generalized least squares methods. Research results show that the age diversity of TMT has a negative impact on bank innovation. Meanwhile, gender diversity has a positive effect on innovation. However, there is no statistical evidence that education diversity and tenure diversity have an impact on innovation. Based on the research results, a number of governance implications have been proposed to enhance the bank's innovation. In addition to the need of the presence of female members in the board of directors, the bank should consider the age of director when change members of different ages on the board of directors. Besides, senior management should consider when using and choosing appropriate financial leverage.