OVERVIEW ABOUT STRATEGIC MANAGEMENT AND RETAIL
Theories about building and managing strategy
1.1.1 Concept about strategy and strategic management
The concept of "strategy," originally rooted in military and political contexts, has evolved significantly since the mid-20th century to encompass socio-economic applications It is commonly understood as a systematic approach to addressing tasks with a long-term perspective According to the United Industrial Development Organization (UNIDO), a development strategy serves as a blueprint for achieving specific goals over a 10 to 20-year period, guiding planners in resource mobilization and allocation Overall, strategy not only articulates a vision for the anticipated development process but also ensures consistency in implementation methods, forming the basis for comprehensive development plans across short, mid, and long-term horizons without imposing rigid expectations on stakeholders.
There are many definitions about strategy Fred R David, in his view, (2003) strategy consists of means reaching long term goals According to Michael E Porter
(1996), strategy is creation of valuable and unique position including different operations
Generally, concepts and definitions about strategy, despite being different in expression, always cover following contents:
+ To define short term and long term goals of enterprise.
+ To propose and select predetermined plans.
+ To conduct and distribute resources aimed at implementing those goals.
Effective leaders must not only understand strategy but also manage it effectively to make informed decisions When executed properly, this approach is known as strategic management In essence, strategic management encompasses a series of decisions and actions that arise from the planning, implementation, and evaluation of strategies, all aimed at achieving long-term success.
1.1.2 The role of building strategy for enterprise
Research indicates that enterprises with a clear business strategy are more likely to develop actionable programs compared to those without a defined strategy A well-defined business strategy serves as a guiding framework, enabling companies to achieve their predetermined goals and effectively align short-term objectives with long-term aspirations This comprehensive approach to development ensures that strategic management benefits are recognized across various industries and company sizes globally In summary, the key features of an effective business strategy include enhanced actionability, goal alignment, and broad applicability across different sectors.
- Business strategy and strategic management help enterprise have specific action program to gained predetermined goals.
- Business strategy helps enterprise define central goals.
- Business strategy helps enterprise have specific and in time measures meeting changes in business environment.
To achieve significant benefits, enterprises must conduct a comprehensive analysis of their current position, roles, internal characteristics, and the opportunities and threats present in their business environment.
In addition to remarkable gains brought by business strategy, business strategy and strategic management also hide certain risks.
Strategic managers must effectively balance their time between planning and executing strategies while also managing other essential tasks Overemphasis on strategy development and implementation can divert attention from critical operational activities, resulting in an imbalance within the enterprise.
Enterprises pursue various goals, and relying solely on a single strategy is insufficient for achieving success To navigate this complexity, businesses often implement multiple strategies simultaneously, which can sometimes conflict with one another For example, adopting a low-cost strategy may compromise product quality Therefore, it is essential for administrators to integrate these strategies effectively to minimize potential conflicts and enhance overall performance.
Strategic management carries the risk of errors made by strategic managers, which can hinder an enterprise's growth and market expansion Effective strategies should stem from objective and rational analyses; however, they often lack alignment with the broader goals of the organization, potentially impacting the company's long-term development.
Steps of researching strategy
Macro environment factors, including economic, political, social, and technological elements, significantly impact a company's operations, both independently and in conjunction with one another In the banking sector, these factors play a crucial role in shaping business strategies and outcomes.
The economic environment significantly influences banking activities, with key factors including interest rates, the economic cycle, CPI inflation, GDP, balance of payments, and fiscal and monetary policy Given the broad nature of these factors, businesses should pinpoint those that most directly affect their operations.
Understanding economic principles enables managers to assess how their enterprise influences the national economy and how government economic policies affect business operations Furthermore, economic stability is crucial, primarily focusing on stabilizing national finances, managing monetary policies, and controlling inflation These factors are of significant concern to enterprises, as they directly impact business performance and production efficiency.
The bank serves as a crucial financial intermediary, significantly impacting the national financial system and thus facing stricter state regulation compared to other sectors Political factors increasingly influence banking operations, encompassing the point system, government policies, legal frameworks, diplomatic trends, and broader political events both domestically and globally.
The socio-cultural environment encompasses the norms and values upheld by a society or culture, with changes in these factors occurring gradually due to their long-term impact from macroeconomic influences Administrators must recognize that the effects of socio-cultural factors are often subtle and challenging to identify, yet they significantly shape how individuals live, work, and consume products and services Furthermore, elements of the socio-cultural environment, such as ethics, aesthetics, lifestyle, customs, and communication systems, play a crucial role in influencing business activities and societal priorities, as well as the overall education and awareness levels within the community.
The technological landscape presents both opportunities and challenges for banks, as emerging technologies can enhance competitive advantages for alternative products while jeopardizing traditional offerings The rapid pace of technological advancements renders existing solutions obsolete, compelling banks to innovate in order to maintain their competitiveness Additionally, the continuous introduction of new technologies intensifies the pressure on established banks, leading to shorter technology life cycles and necessitating a reduced depreciation period for their assets.
Source: Strategic Management, Fred, David
The micro environment refers to specific sectors that significantly influence enterprises within an industry In the banking sector, key factors of the micro environment include rivals, buyers, suppliers, new entrants, and substitute products These elements collectively shape the competitive landscape and operational dynamics of banks.
In today's competitive landscape, banks and financial institutions, including insurance companies and finance firms, face intensifying rivalry Understanding competitors is crucial for banks, as it influences the nature and intensity of competition, ultimately impacting their strategies for gaining a competitive edge.
Intense level of competition depends on the interaction among such factors as the number of banks participating in the competition, the industry’s growth rate, and
Stability of politics Labor law
The advancement of new technologies, along with a fixed cost structure and product diversification, significantly influences banks' strategies to enhance and safeguard their market share These elements contribute to heightened competition within the banking sector, leading to increasingly aggressive market dynamics.
In a competitive landscape, buyers play a crucial role, and their trust is arguably the most valuable asset for banks This trust is cultivated by consistently meeting customer demands and preferences, setting the bank apart from its competitors.
Suppliers: Banks must have relationship with organizations supplying different resources such as material, equipment, labor and finance
New entrants in the banking industry can contribute to declining profits as they leverage new production capacities to capture market share and essential resources A common strategy among these newcomers is the acquisition of existing firms, which reflects their intent to enhance their market presence.
The presence of substitute products significantly influences the earning potential of the banking industry, as their pricing limits the maximum prices banks can charge Many of these substitutes emerge from technological advancements, highlighting the need for banks to invest resources in adopting or developing new technologies to remain competitive and successful.
Figure 1.2: Michael Porter’s five force model
Source: Strategic Management, Fred, David
Analyzing the internal environment of a bank involves examining the controllable factors and systems that influence its operations and strategic feasibility Key internal factors include human resources, facilities, technology, organizational structure, policies, services, and financial status To ensure strategic viability, it is essential to assess the current situation, identify strengths and weaknesses, and recognize the bank's competitive advantages This internal analysis focuses on various aspects of the bank's activities to inform effective strategy development.
Human resources are a crucial and irreplaceable asset in any organization, significantly influencing competitiveness through factors such as training levels, professional qualifications, employee motivation, commitment to the enterprise, public awareness, and work style Furthermore, human resources are essential at every stage of the process, from the development and implementation to the monitoring of strategic initiatives.
The financial status of an organization, particularly a bank, is crucial as it indicates both past performance and future development potential Key financial indicators used in strategic financial analysis include the current ratio, quick liquidity ratio, leverage ratios, operational indicators, and profitability metrics These indicators collectively assess the effectiveness and capability of banking activities, providing insights into the institution's overall financial health.
The facilities include transaction office and transaction point system,equipments serving customers, internal equipments such as payment system and computer network system
Tools used to analyze and select strategy
The selection and analysis of strategy involve making informed decisions based on subjective information to identify optimal operational processes This approach enables banks to effectively achieve their functions and goals By considering current strategies, objectives, and the bank's mission, along with internal and external information, a solid foundation is established for developing and evaluating feasible strategies.
At present, there are many popular matrixes in analyzing strategy such as BOSTON matrix, G.E matrix, Internal and External evaluation factor matrix (I.E),
GS matrix and SWOT matrix Nevertheless, in this capstone project, we would like to focus on analyzing based Internal and External evaluation factor matrix (I.E) and SWOT matrix
1.3.1 Internal Factor Evaluation Matrix (IFE)
Internal evaluation factor matrix (IFE) summarizes important strengths and weaknesses of business departments as well as overall enterprise IFE matrix is developed in five steps:
Step 1: Make a list of factors crucial to the competitiveness of enterprises in an industry (usually from 10 to 20 factors).
Step 2: Assign a weight from 0.0 (not important) to 1.0 (most important) for each factor It should be noted, the importance assigned to the factors show relative importance of those for the success of the enterprises in industry Thus, for enterprises in the industry, the importance of factors listed in step 1 is the same.
Step 3: Assign a rating from 1 to 4 for each factor (actually point to a wider range) Mark the biggest weakness when sorting by one, the smallest weakness when sorting by 2, the minimum strength as classified by 3 and biggest strengths when sorting by 4 So, this is the point of reflecting competitiveness of each factor in enterprise against rivals’.
Step 4: Calculate weighted score for each factor by multiplying the weight of that factor with the corresponding rating.
Step 5: The total weighted score for all factors in the matrix is given by summing the number of relevant factors of each enterprise The total score shows that, this is the absolute competitiveness of enterprises.
In the IFE matrix, a total weighted score of 4 indicates absolute competitiveness for an enterprise Scores ranging from 2.50 and above signify an average level of competitiveness, while any score below 2.50 reflects a competitiveness level that is lower than average.
1.3.2 External Factor Evaluation Matrix (EFE)
The External Factor Evaluation Matrix (EFE) is a valuable tool for summarizing and quantifying the environmental influences on a business To effectively analyze the EFE, we follow a systematic approach consisting of five essential steps, mirroring the process used in the Internal Factor Evaluation Matrix (IFE).
Step 1: Make a list of factors crucial to the competitiveness of enterprises in an industry (usually from 10 to 20 factors).
Step 2: Assign the a weight from 0.0 (not important) to 1.0 (most important) for each factor It should be noted, the importance assigned to the factors show relative importance of those for the success of the enterprises in industry Total importance of factors listed is 1.
Step 3: Assign a rating from 1 to 4 for each factor (actually point to a wider range) Mark the biggest weakness when sorting by one, the smallest weakness when sorting by 2, the minimum strength as classified by 3 and biggest strengths when sorting by 4 So, this is the point of reflecting the adaption of enterprise to threats and opportunities from environment.
Step 4: Calculate score for each factor by multiplying the importance of that factor with the corresponding classification scores.
Step 5: The total weighted score for all factors in the matrix is given by summing the number of relevant factors of each enterprise.
In the IFE matrix, a total weighted score of 4 indicates absolute competitiveness for an enterprise Scores between 2.50 and 4 reflect an above-average competitive position, while scores below 2.50 signify that the enterprise's competitiveness is below average.
The IE matrix is a valuable tool for assessing an enterprise's operational environment, competitive position within its industry, and overall economic standing It is derived from the outcomes of the Internal Factor Evaluation (IFE) and External Factor Evaluation (EFE) matrices.
(1) Results of EFE are put on vertical axis (y)
(2) Results of IFE are put on horizontal axis (x)
The Matrix consists of nine cells that illustrate the competitiveness and positioning of an enterprise within both its sector and the broader macro-business environment, ranging from low to high and weak to strong.
1.0-1.99 Total important score in EFE matrix
Source: Strategic Management, Fred David
The analysis of cells IV, V, and VI indicates that enterprises in this region should refrain from pursuing expansion strategies and instead focus on retaining their current market share to mitigate external challenges In contrast, cells VII, VIII, and IX highlight businesses that are nearing the end of their lifecycle, prompting a gradual withdrawal from the industry in favor of new ventures For enterprises situated in cell I, there is a significant opportunity to capitalize on market conditions by formulating effective strategies for operational expansion and enhancing their competitive stance.
SWOT, which stands for Strengths, Weaknesses, Opportunities, and Threats, is a strategic analysis model developed from a survey of over 500 of the highest-revenue enterprises identified by Fortune.
In the 1960s and 1970s, the Stanford Research Institute conducted a study to understand why many enterprises struggled with implementing their plans The research team, which included notable figures such as Marion Dosher, Ts Otis Benepe, Albert Humphrey, Robert Stewart, and Birger Lie, developed the SWOT model This model outlines four fundamental strategies: (1) SO (Strengths - Opportunities), which leverages an enterprise's strengths to capitalize on market opportunities; (2) WO (Weaknesses - Opportunities), which focuses on overcoming weaknesses to seize market opportunities; (3) ST (Strengths - Threats), which utilizes strengths to mitigate market threats; and (4) WT (Weaknesses - Threats), which aims to address weaknesses to avoid potential threats in the market.
Table 1.2: SWOT matrix SWOT matrix Strengths (S)
Use strengths to make use of opportunities
Overcome weaknesses by making use of opportunities
Use strengths to avoid threats
Minimize weaknesses and avoid threats
Source: Strategic Management, Griggs University
Retail business operations in commercial bank
1.4.1 Concept about retail business in commercial bank
Retail banking refers to the provision of financial services and products to individual consumers, typically involving smaller amounts of money This sector focuses on meeting the banking needs of everyday customers, offering services such as savings accounts, personal loans, and mortgages.
Vietnam Bank for Investment and Development defined that: “Retail banking service includes transactions of bank with customers as individuals and small and medium enterprises”.
Retail banking services, as defined by the World Trade Organization (WTO), are essential offerings that allow individual customers to engage with banks at their branches These services include savings accounts, account inquiries, mortgages, credit cards, debit cards, and various additional services, catering to the diverse financial needs of consumers.
Retail banking services refer to the provision of banking solutions tailored for individual customers and small to medium enterprises, delivered through a network of branches or accessed directly via information technology and electronic telecommunications.
Retail banking services are a fundamental and widely recognized offering within commercial banks, catering primarily to individuals and small to medium enterprises These services are designed to be straightforward, user-friendly, and consistently accessible, which positions retail banking for continued growth and development in the future.
Retail banking service in Vietnamese banks:
- Capital mobilization: payment deposit, saving deposit.
- Retail credit service: consuming loan, business loan and overdraft loan
- Other retail banking services: insurance, card, payment – money transfer, guaranty, investment management and commission, salary payment, so on.
1.4.2 Features of retail banking service
- Retail banking service has diversified customers
Retail banking primarily serves individuals, small and medium enterprises, private companies, limited companies, and joint ventures, all of which contribute to stable business growth and increased demand for production and services These entities often have advantageous access to advanced technology, creating a diverse market characterized by varying income levels, education, preferences, and tastes To effectively meet customer needs, banks must identify their target audience and tailor their products and customer care policies accordingly.
- Value and size of transaction
In the retail sector, despite a high volume of customer transactions, the individual transaction values tend to be low due to the nature of consumption services Therefore, banks need to focus on enhancing their services through modern information technology to cater to the diverse needs of customers This approach not only improves product utility but also enables banks to manage transaction operations more effectively.
Retail banking primarily serves individuals, households, organizations, and small to medium enterprises, resulting in a diverse customer base Retail credit services typically involve smaller loan amounts and straightforward processes, but consumer loans have high lending costs due to their small contract sizes Consequently, the interest rates for consumer loans are higher than those for commercial and industrial loans To efficiently deliver products and services, banks need to invest significantly in initial capital for establishing transaction points and modern information technology systems.
- Operations of commercial banks develop based high technology and the role of marketing becomes more and more important
The expansion and development of retail banking services are significantly influenced by the integration of scientific and technological advancements Customers, driven by diverse needs and qualifications, seek efficient services that save time and are accessible at any moment Consequently, investing in information technology has become essential With advancements in science and e-telecommunication, banks can now offer a wider range of retail banking services, including automated teller machine payments, home banking, telephone banking, internet banking, and automated money transfers.
- Distribution system of retail banking service is rich and diversified
In response to the diverse demands of customers, retail banking products and services are specifically designed to align with and fulfill their needs These offerings increasingly focus on directly supporting both consumption and production activities.
Retail banking services exhibit unique characteristics alongside the general features of banking operations These distinctive traits highlight the advantages of retail banking and necessitate that banks implement effective management and operational strategies tailored to this sector to achieve sustainable growth.
ANALYZING OPERATIONAL ENVIRONMENT OF SEA BANK IN
General information about Seabank
2.1.1 History about foundation and development
Established in 1994, Southeast Asia Commercial Joint Stock Bank (SeABank) is one of Vietnam's pioneering commercial joint stock banks With a commitment to sustainable development, SeABank continually enhances its products and services, striving to position itself among the top commercial banks in Vietnam.
SeABank has implemented comprehensive innovations to develop a modern and multifunctional banking experience By leveraging state-of-the-art banking technology, the bank has enhanced its products and services to better meet customer needs The integration of modern banking services is crucial for increasing competitiveness, with advanced technology being recognized as a key factor for success.
In recognition of its significant achievements over the past year, SeABank received several prestigious accolades, including a Certificate of Merit from the Prime Minister, the title of Most Admired ASEAN Enterprises – ABA 2010, and rankings among the Top 300/500 largest enterprises in Vietnam, the Top 85/500 largest private enterprises, and the Top 44/1000 corporate income tax payers in the country.
With 17 years of growth and development, SeABank has made significant contributions to the advancement of Vietnam's financial industry The bank has introduced innovative products and services for its customers, supporting the country's industrialization and modernization efforts while effectively navigating global financial crises.
SeABank has established a streamlined organizational structure to effectively position itself and achieve its strategic objectives This structure enables the Directorate and employees to work collaboratively towards the bank's overarching aim of becoming a leading retail bank in Vietnam The specifics of SeABank's organizational structure are illustrated in the accompanying figure.
Figure 2.1: Organization structure of SeABank
The Directorate serves as the highest administrative body within the bank, responsible for formulating development strategies across the entire system The bank's head office plays a crucial role in overseeing general management functions, particularly in relation to human resources and policy implementation.
Meanwhile, branches are the direct units not only being independent but also complying with general rules of system to orient to general goals of bank.
2.1.3 Retail banking services and products
SeABank, like many financial institutions, offers a variety of services and products tailored to meet the diverse and ongoing needs of its customers Specifically, in the realm of retail banking, SeABank targets two key market segments: individual customers and small to medium enterprises The range of products and services available in SeABank's retail banking sector is illustrated in the following figure.
Figure 2.2: Retail banking products of SeABank
Since its inception, SeABank has served over 100,000 individual customers and facilitated more than 200,000 commercial transactions for small and medium enterprises As the market economy evolves and integrates, SeABank is committed to enhancing its retail banking products and services to align with the bank's overall strategic goals.
There are some reasons for SeABank to choose both individual and enterprises customers for retail banking products:
The growing demand for retail banking products among individuals, driven by advancements in technology and modernization, has led to the introduction of numerous banking services that offer increased convenience, resulting in a significant rise in customer demand for these products.
The growth of retail banking services for individuals is primarily driven by the revenue generated from various offerings, including savings accounts, debit and credit cards, mobile banking, and loans.
Realizing the important roles of individual customers to development of banks SeABank set its target to expand retail banking for both individual and enterprise customers
Seabank aims to be the leading retail bank in Vietnam by offering secure financial services to consumers while focusing on expanding its market share and profitability The bank has established a clear vision and mission for its future growth.
Our vision is to evolve into a retail banking model that emphasizes development, while progressively establishing a specialized investment banking framework We aim to transform into a multifunctional, modern financial institution, distinguished by exceptional product quality and a strong brand reputation.
SeAbank aims to establish itself as a leading retail banking group in Vietnam, focusing on upholding its reputation, brand integrity, and service quality The bank is dedicated to delivering a comprehensive range of professional financial products and services that cater to individual customer needs By optimizing value for customers and shareholders, SeAbank promotes sustainable growth while actively contributing to the broader development of the community and society.
Analyzing operational environment of SeABank
Vietnam is recognized for its remarkable political stability, which fosters a conducive environment for business development across the country This stability not only enhances opportunities for enterprises but also accelerates economic integration, attracting foreign investment and facilitating technology transfer For SeABank, such a stable political landscape is advantageous, enabling the bank to expand its operations and access international markets more effectively.
The legal framework governing banking activities is outdated, primarily based on manual transactions and complex procedures, which hampers the development of modern retail banking services that require new technologies and efficient processes As the growth of banking services accelerates, existing regulations often fall short, complicating the launch of innovative services However, the State Bank and the Ministry of Finance in Vietnam are actively working to enhance the legal system for retail banking In the coming years, SeABank anticipates a shift towards a more liberal legal environment that will facilitate business operations.
Vietnam presents a promising market for the development of retail banking services, driven by a robust economy that has consistently achieved growth rates of 7-8%, positioning it among the top in Asia With a consumer market of over 88 million people, Vietnam ranks 13th globally, featuring a significant proportion of young and tech-savvy adults who are quick to adopt modern payment methods The average income per capita, estimated at $3,000 in purchasing power parity (2006), has seen a remarkable 64% increase since 2009, aligning with the goal of a 62% rise in average monthly income per person Additionally, the country's literacy rate exceeds 90%, and the rapid growth of internet and mobile phone usage further supports the potential for retail banking expansion in Vietnam.
Vietnam is experiencing rapid urbanization, with major cities seeing a population growth rate of 1% per year By 2009, over 30% of the population lived in urban areas, and more than 52% were of working age The average annual income for over 70% of urban households was VND 57 million The consumer market in Vietnam has become increasingly attractive, with data from TNS Viet Cycle indicating that less than 15% of urban households earned 3 million VND or less, while over 45% earned between 4.5 to 20 million VND per month Consumption patterns are evolving alongside advancements in science and technology, with Vietnam following the U.S and Singapore in growth Despite a population of over 88 million, only 20% have bank accounts, yet the banking sector has seen a service growth rate of 30% per year Additionally, various enterprises and financial institutions are collaborating to enhance consumer service offerings.
As of late 2006, the Ministry of Information and Communications reported that interest in technology surged, with nearly 18% of the population engaged and over 45 telephones per 100 people by mid-2007 Internet users grew significantly from 18.5 million in 2007 to approximately 31.5 million by 2010, while only 13.7% of households owned computers and 6.5% had internet access E-commerce flourished, with 4,790 businesses operating websites and an average monthly revenue of 500 million VND per site The online gaming sector thrived, generating up to 70 billion VND monthly By September 2011, Vietnam had 81.4 million telephone subscribers, predominantly mobile, and only 20% of the population held bank accounts, indicating substantial growth potential in retail banking The burgeoning demand for banking services, particularly in urban areas, combined with advancements in technology and a competitive telecommunications landscape, presents a significant opportunity for the retail banking sector, which currently lags behind regional counterparts like Thailand and Malaysia, where banking system usage density reaches 70-80%.
SeABank, along with other commercial banks, currently enjoys favorable macroeconomic conditions for the growth of retail banking services To successfully penetrate this market and enhance profitability, SeABank must implement a robust strategy focused on market expansion and sustainable development for the future.
2.2.1.2 Micro environment analysis (Michael Porter’s five forces model)
The increase of domestic banks : The establishment of commercial banks in
Vietnam's banking sector has seen rapid growth, with the number of commercial banks surging in recent years In just a decade, over a hundred banks have emerged in the retail banking space However, new entrants face significant challenges in establishing their reputation among customers Despite these hurdles, SeABank's market share expansion remains largely unaffected.
Entry threat of foreign banks: The threat from the new bank will depend on the
The banking sector in Vietnam has undergone significant transformation since 2006, marked by a gradual opening to foreign financial institutions as part of its commitments under the WTO and trade agreements, including the one with the United States This evolution has allowed foreign entities to hold shares in Vietnamese banks and has led to the establishment of 100% foreign-owned banks Additionally, in line with the ASEAN Framework Agreement on Services (AFAS), Vietnam has fully eliminated restrictions on foreign capital contributions and service transaction values since 2008, enhancing the competitiveness and accessibility of its banking industry.
Vietnam has licensed five 100% foreign banks, and the number is expected to grow as more foreign banks establish representative offices and invest in domestic commercial banks The government's suspension of new bank licenses since August 2008 has raised barriers for domestic banks, with strict requirements for charter capital and profitability monitoring by the State Bank However, once the government allows new bank establishments, qualified enterprises will still have opportunities to enter the banking sector Market segmentation, brand value, and customer loyalty are critical factors that influence a bank's success in Vietnam Despite the current economic crisis, the stringent entry barriers limit the threat from new banks, but as the global economy recovers and Vietnam's banking sector opens further under WTO commitments, the emergence of new banks is likely.
Corporate customers typically face a low risk of being replaced, as they prioritize clarity and the inclusion of vouchers and bills in their banking services When issues arise with products or services, these customers are more likely to switch to a different bank rather than seeking alternative banking solutions outside of their current provider.
Vietnamese consumers often prefer to keep cash at home or withdraw their entire bank account balance for spending To encourage non-cash transactions and enhance financial transparency, government agencies and businesses are increasingly paying salaries through bank accounts However, card payment acceptance is primarily limited to restaurants and upscale shopping areas, which may not be frequented by all consumers.
Consumers often face delays in supermarkets when attempting to use card payments, as they must wait for employees to retrieve card readers or switch to different checkout lines This inconvenience, coupled with psychological factors favoring cash, leads many to prefer using physical money over banking options.
Vietnamese consumers have various saving options beyond traditional bank accounts, including foreign currencies, securities, insurance, precious metals like gold and diamonds, and real estate investments Current bank interest rates, which hover around 14% annually, may not be appealing, especially as gold prices experience significant daily fluctuations and the U.S dollar's value in the free market also varies.
SeABank experiences a lower risk of substituting retail banking products for corporate customers However, the bank faces greater challenges from substitute products in the individual customer segment The growth of alternatives for individual retail banking services is likely to increase during periods of financial market instability and heightened consumer apprehension regarding money management.
With over 17 years of successful operations, SeABank has consistently attracted a growing customer base, as illustrated by the accompanying chart.
Chart 2.3: Growth rate of customers in period of 2008-2010
SELETING STRATEGIES AND SOLUTIONS FOR IMPLEMENTING
The long term development orientation of SeABank
SeABank aims to lead among commercial banks in Vietnam while enhancing its reputation internationally, focusing on customer prosperity and sustainable development The bank's strategy includes implementing a restructuring plan, optimizing organizational structure, and improving staff quality through training and technology integration It emphasizes rigorous internal audits and compliance with operational procedures, clearly defining staff responsibilities Additionally, SeABank is committed to regional integration and international cooperation, leveraging financial and technological support from global banking organizations to ensure effective, stable, and sustainable growth From 2012 to 2016, SeABank has laid a solid foundation for future development.
By 2016, aim to boost total capital growth to 25-28% annually, while increasing outstanding debt by 20-25% each year Ensure that medium and long-term credit constitutes up to 45% of total loans, with overdue loans limited to 1% of the total Additionally, target a minimum profit increase of 10%.
We highly value the efforts involved in raising capital, particularly from residential sources, as well as medium and long-term investments, which are essential for economic stability Fostering strong foreign relations is crucial to attracting capital and investments that align with our development needs Additionally, it is important to focus on transforming the economic structure to enhance investment opportunities.
Be interested in IT applications in banking activities Focus on training and retraining of staff.
SeABank is committed to diversifying its credit products and banking services to increase service income while enhancing credit quality and implementing measures to mitigate credit risks The bank aims to strengthen its financial capacity by applying competitive real interest rates and focusing interest at its headquarters, alongside raising capital interest rates.
In Chapter 2 of the project, it is highlighted that retail banking services will be the primary focus of Seabank's development strategy in the coming years Acknowledging the significance of retail banking, Seabank is making strategic investments to enhance these services, which are crucial for the bank's growth and customer engagement.
Seabank is poised for significant growth in modern banking services due to its technological advantages, allowing it to capture a larger market share In the highly competitive banking sector, the four largest state banks leverage their strengths in specific areas like agriculture, industry, and commerce For Seabank, focusing on retail banking services, supported by advanced technology, positions it well to thrive in this dynamic environment.
SG shareholders and modern technology in retail banking present a significant opportunity for Seabank's growth To capitalize on this potential, the bank has established targeted objectives for the development of innovative banking products.
In 2016, SeABank aimed to establish itself as a leading retail bank in Vietnam by enhancing its services for individual and small to medium-sized enterprise customers The bank planned to expand its reach by developing 50 new trading offices and 12 branches in strategic locations, continuing its growth trajectory initiated in 2012 By offering a diverse range of banking services and utilities, SeABank positioned itself to meet the needs of individual households and businesses, solidifying its status in the retail banking sector.
Selecting business strategy in term of retail banking service
3.2.1 SWOT matrix based strategy selection
SeABank's analysis of its strengths, weaknesses, opportunities, and threats reveals the need for S-O strategies from 2012 to 2016 Leveraging its financial strengths and strong reputation, SeABank aims to capitalize on market opportunities to expand its retail banking services targeted at individual customers and small to medium enterprises This S-O growth strategy will be implemented through various strategic activities.
SeABank is strategically expanding its network and diversifying its retail products to meet the growing demand for banking services driven by higher incomes and global economic integration The bank is focusing on developing distribution channels in targeted urban markets while researching and creating new banking services tailored to the sophisticated needs of customers Additionally, SeABank plans to establish representative offices in various Asian countries to enhance its market presence.
SeABank is leveraging its strengths in shareholder relationships, technology, and partnerships with various financial institutions to enhance its retail banking services By collaborating with international card organizations like Visa and MasterCard, insurance companies such as Prudential and AIA, and money transfer services like Western Union, SeABank aims to develop innovative financial products tailored to customer needs Additionally, the bank has formed a strategic alliance with Societe Generale Bank, renowned for its retail banking expertise, to gain insights and technology that will bolster its competitiveness in the evolving financial landscape.
Seabank is focused on building its core strengths by offering a range of capital-raising products, including savings options with floating and flexible interest rates, smart savings, and automated investment products In line with its long-term strategy, the bank aims to enhance its card offerings by leveraging its expertise as a leading retail bank Seabank also boasts a modern technology infrastructure, featuring advanced ATM and POS systems, along with secure magnetic stripe and AMV Chip card technology for optimal processing speed Given Vietnam's low banking product usage and the government's push to reduce cash transactions, Seabank's strategy to develop core products positions it well to capture a larger share of the retail market as card usage becomes more prevalent.
- Strategy S1+T3: Use benefit from large shareholders of SeAbank (strong finance, potential foreign currency) to make present threats of banks to fluctuation of foreign exchange rate into advantage of SeAbank.
In light of the challenges facing the global financial market, Seabank's strategy of W2+T2+T3 emphasizes the need to eliminate or pause retail products that do not align with the bank's strengths in financial services and regulations.
3.2.2 IE matrix based strategy selection
From internal factor evaluation matrix and external evaluation matrix in chapter 2, the IE combined matrix for SeABank is done as following:
Table 3.1: IE Matrix of SeABank
The total score of external factor evaluation matrix of SeABank is 3.0, and of internal factor evaluation matrix is 3:02, so SeABank is ranking on the first cell of
SeABank should implement a "Grow and Build" strategy within the IE matrix's green area, aiming to expand its retail banking services through product diversification To achieve this goal, the bank will concentrate on enhancing its range of retail banking products and services.
- Supply and enhance cooperation relationship with insurance companies to provide financial solutions for customers.
- Do research and establish card company (developed from card center), car- funded company.
- Research feasibility of investment banking activities
Seabank acknowledges its capabilities but remains vigilant about potential threats The bank is committed to intensifying its efforts in implementing technical assistance programs and capacity enhancement projects This focus aims to align with international standards and regulations, ensuring competitiveness and success in regional integration.
3.2.3 Quantitative Strategic Planning Matrix QSPM of SeABank
Between 2012 and 2016, SeABank identified key strategies based on the SWOT and IE matrices, focusing on the SO strategy, which emphasizes growth through expansion and strategic partnerships, alongside a product diversification strategy To validate the effectiveness of these chosen strategies, the author conducted a comparative analysis using the QSPM matrix, assessing their performance against unselected alternatives.
Table 3.2: QSPM matrix of SeABank
Strategies Weight SO ST WO WT
AS TAS AS TAS AS TAS AS TAS
- Support in capital from outside 0.15 3 0.45 3 0.45 2 0.30 2 0.30
- Product quality must be improved 0.10 2 0.20 2 0.20 2 0.20 2 0.20
- Distribution channel has not been diversified 0.05 3 0.15 1 0.05 2 0.10 1 0.05
- Lack experience in retail banking service business 0.10 3 0.30 2 0.20 1 0.10 2 0.20
- Orientation for developing retail banking service of state bank 0.05 3 0.15 2 0.10 3 0.15 1 0.15
- Economic integration is motivation and pressure for development 0.10 3 0.30 2 0.20 2 0.20 1 0.30
- Development of international trade operations 0.15 4 0.60 2 0.30 3 0.45 0 0.00
- Population increases leading to demand on using retail banking service increase 0.10 4 0.40 3 0.30 4 0.40 1 0.40
SeABank has a significant opportunity to expand its market share by leveraging its strengths in technology, capital, and capacity to diversify retail banking products The QSPM matrix results, along with insights from the SWOT and IE matrices, confirm that the development of international trade and Vietnam's deep integration into the global economy, coupled with the rising demand for cards and domestic credit products, positions SeABank favorably for growth.
SO strategy is the expansion strategy that SeABank will select for retail business in period of 2012-2016.
Seabank plans to diversify its retail banking products by introducing innovative and convenient solutions tailored to meet the needs of both individual and enterprise customers The focus will be on developing modern banking offerings that enhance customer satisfaction in today's fast-paced environment Key products slated for development in the coming years include phone banking, private banking, automatic savings banking, and point-of-sale (POS) systems.
The "product specification" strategy, derived from QSPM, aims to enhance Seabank's retail banking offerings by introducing distinctive features that set them apart from existing services in Vietnam These innovative products will prioritize customer security and maximize user benefits, ensuring a superior banking experience.
The strategies chosen from QSPM are also matched with strategy fromSWOT and IE matrix And below parts will be details actions to develop these strategies.
Solutions for implementing strategies
3.3.1 Complete organization structure for retail banking service
SeABank should prioritize transforming into a professional sales organization by establishing independent retail departments The Deputy Directors of transaction and business units must enhance retail trade operations and develop an e-banking department to support growth in these areas, focusing on researching and organizing e-banking products based on the core system Additionally, SeABank should strengthen its card center operations by enhancing the Call Center for card customers and creating a dedicated laboratory for product research and development, separate from the business department This aligns with the recommendations of the card business strategy consultancy center, advocating for the card center to operate as an independent business unit or card company Consequently, the branch organization model will include departments for card business, product research and development, capital management, customer care, risk management, technical support, accounting, and general administration.
3.3.2 Promote researching, diversifying and developing retail banking service
The current trend in commercial banking shows a significant rise in personal accounts as individuals become more accustomed to bank payment methods This increase in personal savings, coupled with traditional Asian saving habits, has led to a surge in bank investments To enhance retail banking services, particularly savings products, it is essential for banks to diversify their offerings SeABank, in particular, must develop a comprehensive and high-quality range of products, focusing on innovative, tech-driven solutions that stand out in the competitive market Under the guidance of SeABank's headquarters, branches are tasked with launching new retail banking products and services, while addressing key challenges to improve their overall offerings.
To enhance product development, it is essential to establish a dedicated research and development department responsible for market surveys and identifying the specific needs of diverse customer groups This department will focus on designing products tailored to these customer segments and can propose new product ideas to headquarters when launching new offerings Additionally, branches must conduct ongoing market research to build and maintain a robust customer information system, gathering insights about the business environment This regular analysis will serve as a foundation for designing innovative products and refining existing ones.
To attract individual funds, we are launching a funding product that features a straightforward deposit account process This initiative includes offering competitive savings account bonuses and deposit interest rates, ensuring the long-term value of deposits for our customers.
As the economy grows and urban populations increase, the demand for consumer loan products is rising significantly, making them essential for the development of retail banking SeABank should focus on expanding its credit offerings, including overdrafts on deposit accounts, student loans, housing support loans, production and business loans, mortgage loans, automobile loans, and advances for the sale of listed securities With intensifying competition among banks, it is crucial for branches to enhance their competitiveness by raising lending limits and streamlining procedures Collaborating with goods suppliers will further boost consumer loans, while implementing a customer scoring system can help mitigate risks and enable quicker lending decisions Additionally, partnerships with organizations that provide stable income services, such as salary payments and utility bills, will strengthen the bank's position in the market.
To enhance the money transfer and non-cash payment services, it is essential to upgrade existing facilities by leveraging information technology to boost accuracy, safety, speed, and user convenience Emphasizing investment banking services and expanding POS payment systems can yield long-term benefits, such as reduced ATM investment and management costs Branches should implement policies that lower fees for sellers and ensure a seamless payment process, including dedicated card payment counters in supermarkets For new products, the design should prioritize simplicity, accessibility, and flexibility to cater to customer needs, while creating tailored product packages for different customer segments Additionally, Seabank must prioritize collaboration between product research and technology development to expedite the launch of viable new offerings.
3.3.3 Diversify distribution channel and enhance efficiency
SeABank has expanded its presence by opening transaction offices across various districts in the city, enhancing its distribution channels To complement its traditional methods, SeABank is also focusing on the implementation of modern distribution channels By improving distribution management, the bank aims to optimize the effectiveness of each sales channel, ensuring accessibility for customers at any time and place.
+ Enhance the efficiency and self-service capabilities of ATM system to provide many different services in cheaper and cheaper, upgrade ATM system into
The "miniature bank" initiative is being implemented across various provinces, focusing on the expansion of a robust POS network This development aims to enhance the connectivity between branches, ultimately improving operational efficiency and increasing the accessibility of ATM and POS card services for users.
To leverage the advancements in personal computing and internet connectivity, banks should develop a robust online banking model that includes both net banking and home banking services This approach will enable branches to provide customers with convenient options for placing orders, making payments, checking account balances, and accessing information regarding their commitments with the bank.
+ Develop bank phone model, this is popular one with significantly low cost and convenient for both customers and banks Customers can perform transactions any time, any place.
To enhance service delivery, it is essential to expand distribution channels by utilizing agents for remittance payments, ATM card issuance, and payment processing Upgrading the ATM system to function as "miniature banks" across provinces will improve efficiency and self-service capabilities, ultimately reducing costs Additionally, developing a robust network of POS systems and strengthening connections between branches will enhance the use of ATM and POS cards By fostering partnerships with merchants and reinforcing bank collaborations, we can maximize the effectiveness of each distribution channel while meeting customer needs.
The development and completion of retail banking services should occur gradually and consistently, with innovative breakthroughs to foster rapid growth while maintaining and expanding market share This approach not only enhances user utility but also aligns customer interests with those of the bank, ultimately benefiting the broader economy.
A successful retail banking strategy relies on leveraging information technology to facilitate trading and introduce innovative service models By enhancing advanced technology applications and developing an online transaction system, banks can modernize their procedures and integrate seamlessly with international financial institutions SeABank should focus on diversifying distribution channels while automating customer service processes to efficiently handle inquiries, evaluate information, and improve service quality, all while ensuring robust security and safety in operations.
3.3.4 Strengthen communication and marketing for retail banking service
Effective communication and marketing are crucial in retail banking, as they benefit both banks and customers It is essential to enhance information dissemination to help customers understand banking services and the advantages of various products Establishing specialized marketing departments within branches can integrate marketing efforts across the organization Strengthening trade promotion, advertising, and brand development will enhance the bank's reputation and highlight product quality SeABank should focus on public relations strategies to improve its image within the community, addressing the inherent risks in the banking sector Additionally, publishing internal and financial reports, brochures, and organizing press releases will further promote transparency Engaging in community initiatives through donations and volunteer work will foster goodwill In conclusion, a cohesive and efficient public relations program will enhance SeABank's retail brand, fostering a positive perception and understanding of its offerings.
Growth rate of customers in period of 2008-2010
In the competitive financial services market, customer power significantly influences SeABank's business strategy, particularly highlighted by recent controversies over ATM usage fees that customers oppose This situation underscores the ongoing tension between banks and consumers, impacting customer satisfaction and trust Consequently, it is essential not to underestimate the influence of customer power within Vietnam's banking sector.
The survival of banks hinges on their ability to attract capital from customers; without this, they risk elimination In Vietnam, the threat of competition for consumer banking is significant, as low switching costs enable customers to easily move their funds elsewhere To thrive in the retail banking sector, SeABank must implement targeted strategies to enhance the quality of its products and services, improve distribution channels, and strengthen customer access.
In the banking sector, the role of suppliers is multifaceted, encompassing shareholders who fund bank operations, companies that maintain systems and ATMs, and those that supply banking software and human resource services Currently, SeABank is strategically investing in equipment and carefully selecting suppliers based on specific criteria, which effectively diminishes the suppliers' power by fostering competition among them in a limited market.
Shareholders play a crucial role in shaping the banking development strategy, significantly influencing institutions like SeABank Despite recent challenges in the stock market due to the financial crisis, SeABank boasts a robust shareholder system that serves as a vital source of capital and management consulting This strong foundation enables the bank to effectively expand its client network Key shareholders, including Societe Generale Retail Bank of France (holding a 20% stake), Mobifone (collaborating on mobile banking development), and PV Gas (enhancing retail banking services for oil companies), contribute to the advancement of SeABank's retail banking products.
The quality of retail banking operations is significantly influenced by the labor force, as banks seek qualified professionals amidst the rapid growth of the commercial banking system The increasing demand for skilled senior staff in the banking industry is intensifying, especially as banks expand their networks to gain market dominance To address human resource challenges, SeABank prioritizes attracting top talent and training the best personnel by developing existing human resources.
In 2010, McKinsey projected that Vietnam's retail banking sector would experience a remarkable 25% growth within 5-10 years, positioning the country as one of the fastest-growing retail banking markets in Asia Despite the economic crisis that has hindered growth and impacted the banking sector, Vietnam remains an underexploited market with significant potential While the temporary effects of the crisis present challenges for banks in acquiring new customers and intensifying competition, the post-crisis period is expected to shift focus towards market exploitation and customer acquisition Additionally, the banking network has consistently expanded over the years, further enhancing opportunities in the sector.
In 2010, commercial banks of similar size consistently expanded their branches and transaction offices while enhancing their retail banking services The accompanying chart illustrates the growth rates and number of branches established by these banks during this period.
Source: Rivalry among commercial banks in Vietnam, Dang Huu Man
Chart 2.4: The number of transaction offices of some commercial banks
The intensity of rivalry among banks in Vietnam has intensified with the emergence of fully foreign-invested banks, which cater primarily to enterprises from their home countries These foreign banks have established long-term relationships with their clients and have opened representative offices in Vietnam to support their customers' expansion into the market This expansion has led to heightened competition in funding activities, posing challenges for local banks like SeABank, particularly in fund mobilization Despite these challenges, SeABank has shown a positive growth rate in its capital resources, indicating resilience in the competitive banking landscape.
Source: Financial report of banks in 2010
Chart2 5: Total capital mobilization and growth rate in some banks in 2010
Seabank faces intense competition in the card market from established state-owned joint stock banks that have long-term development strategies and strong ties with major agencies and organizations Additionally, other banks are implementing flexible policies to attract card issuance and promote card usage The accompanying chart illustrates the competitive landscape within the card market for Seabank.
Source: Vietnam Association of Card
Chart 2.6: The number of issued card and revenue from card in 2010 of some banks
The competition in Vietnam's card market, as illustrated in chart 2.6, highlights the need for SeABank to implement more decisive and effective strategies to enhance its market presence and operational expansion over time.
Foreign banks face barriers that domestic banks often encounter, such as securities lending limits and real estate bad debts However, they benefit from superior infrastructure, professional customer service, and advanced technology, particularly in internet banking Additionally, foreign banks are typically connected to extensive international networks In response, domestic banks have enhanced their technology, products, services, and workforce to compete effectively Their key advantage lies in their close relationships with existing customers, allowing them to offer flexible lending options and incentives to their most valued clients.
SeABank's competitors in the retail banking sector are grappling with significant challenges due to intense competition This landscape underscores the necessity for SeABank to adopt tailored strategies that align with its evolving developmental stages.
By analyzing the impact of external environmental factors and incorporating insights from finance and retail banking experts, the group developed an external factor evaluation matrix that assesses elements crucial to the success of enterprises in production and export.
Table 2.1: External Factor Evaluation Matrix EFE
3 Growth rate of GDP is associated with demand 0,1 4 0,4 increase
4 The world economy integration with threats 0,05 2 0,1
5 The world economy integration with opportunities 0,06 3 0,18
12 Pressure of development from outside 0,07 4 0,28
The evaluation of external factors affecting Sea Bank's operations reveals a positive impact, with a score of 2.57 points Both the macro and micro environments within the financial sector are generating increased opportunities for the growth of retail banking services at Sea Bank.
SeABank is seizing significant opportunities to expand its market share and revenue amid the challenges of international economic integration The growth of information technology, rising income per capita, and overall economic and social development are driving market demand To ensure sustainable growth, the bank must enhance customer trust and mitigate potential risks associated with market competition and volatility.
Growth rate of customers using card in 2008-2010
Source: Financial Accounting Department, SeABank
- Increase revenue from service product and the use of product per each customer
On the basis of retail products and services issued in 2009 such as SeABuy, SeACar, SeAHome, SeAStudy and SeANet, Bank by phone 24 / 7 (telephone 587
In 2010, SeABank enhanced retail banking efficiency through innovative services like SeACall, SMS Banking, and Email Banking The bank improved its offerings, introducing convenient options such as mortgage lending for both listed and unlisted stocks, securities payment advances, and domestic and international money transfers, including Western Union services The launch of new products like SeAMore and SeAFast further contributed to this growth As a result, the strong demand for retail services among individual customers significantly boosted product sales and usage rates.
Growth rate of active cards in period of 2008-2010
Source: Financial Accounting Department, SeABank
Between 2008 and 2010, the growth rate of active cards outpaced the increase in customer numbers, indicating a rise in the number of products and services utilized by each client This trend reflects an enhancement in the quality of retail banking services offered to individual customers.
- Enhance position in credit market
In 2010, SeABank made significant strides in individual credit activities, launching innovative products like "SeAMore" for various consumer loans, including home repairs and car purchases, with amounts ranging from 10 million to 5 billion VND and terms of up to 10 years, all processed within just three days Additionally, the "SeAFast" product allows customers to withdraw up to three times their monthly income, with a maximum limit of 50 million VND, offering a quick solution for urgent spending needs without the requirement of property security Customers benefit from rapid registration procedures, with overdraft limits established within two days, and can access funds via ATMs, SeABank counters, or online banking services The bank's commitment to personal loans has effectively boosted outstanding loans, reaching a total of 4,545 billion VND by the end of 2010, exceeding their annual target by 134% and marking a 362% increase compared to 2009.
Growth rate of loan and deposit in period of 2008-2010
Source: Trading result report in 2010, SeABank
In 2010, SeABank focused on developing service products tailored for small and medium enterprises (SMEs) alongside its retail banking strategy By researching the demands and capabilities of SMEs, SeABank created a diverse range of products and services that cater to various business needs, including loans for individual businesses, additional working capital, export finance, and project financing Additionally, the bank offered preferential lending rates with competitive capital costs, enabling enterprises to enhance productivity, expand operations, and boost competitiveness within their industries.
In 2010, national firms faced significant challenges due to the global economic crisis, leading to a decline in business operations and credit demand In response, SeABank implemented flexible credit solutions and diversified its products and services while assessing enterprise rankings, risk levels, and customer portfolios This strategic approach resulted in notable achievements for the bank amidst a fluctuating economic landscape.
2.2.2.1.2 Small and medium enterprise customers
Stable growth rate of credit
By the end of 2010, outstanding loans for SMEs and private business operators reached 5,696 billion, marking a 244% increase from 2009 Seabank improved credit risk management through enhanced customer classification, loan evaluation, and a robust credit approval system, resulting in a low bad loan rate of just 2.14% The bank modernized its credit control tools and introduced a credit rating system, which effectively tightened control over overdue debts In addition to traditional lending products like medium and long-term property investment loans and working capital financing, Seabank launched new services such as SeACar Business, EDC of SeABank – SeAPos, SeANet, and SeACall 1900 555 587, further expanding its offerings to meet customer needs.
SeACar Business offers enterprises financial support of up to 75% for vehicle purchases, with loan terms extending to 60 months and a grace period of three months for the initial payment, ensuring quick processing within two working days Additionally, SeABank's electronic banking service, SeANet, provides two packages—Basic + and Professional—allowing customers to access account statements, free account activity, and cash transfers up to 500 million VND per day The Professional package enhances efficiency with a money order approval hierarchy, streamlining revenue and expenditure management for businesses SeANet prioritizes security through line encryption technology and multiple authentication methods, including personal passwords and token-based verification, ensuring customer confidentiality Furthermore, SeACall offers 24/7 banking support via a call center, providing comprehensive assistance to clients.
1900 555 587, enterprises can easily query account information, information of credit agreement and other information.
SeABank enhances credit support and offers highly competitive funding policies for SMEs, ensuring beneficial interest rates tailored to each period In 2009, the bank successfully raised 3,192 billion VND from SMEs, achieving 106% of its 2010 funding plan and marking a 176% increase compared to the previous year.
Payment support and commercial funding
In 2010, banking services sales soared to $241 billion, marking a 238% increase from 2009, with net service revenue nearing $205 billion This growth was driven by a strategic focus on revenue enhancement from services and increased product usage per customer The bank's international payments revenue reached $352.25 million (approximately 6,869 billion VND), a 96.5% rise, with export turnover at $85.34 million (1,664 billion VND) up 245.23%, and import turnover at $266.91 million (5,205 billion VND), up 90.94% Additionally, income from international payment fees grew by 27%, totaling $1.53 million (nearly 30 billion VND) Overall, international payment operations demonstrated significant growth in 2010, maintaining and enhancing transaction quality, leading to Seabank receiving a certificate of recognition.
SeABank has forged agency relationships with 299 banks across 49 countries, leveraging the extensive global network of Société Générale The bank is focused on expanding its partnerships in key markets such as Asia, Europe, Africa, and the Middle East With its rapid growth and recent achievements, SeABank has established a dynamic reputation, prompting several European banks to actively recommend forming partnerships with it for enhanced international payment and cash management services.
National payment operation of the bank also has rapid growth
SeABank has introduced an automated payment process that enhances the efficiency and quality of domestic payment services This innovative approach ensures that customer money transfer orders are executed promptly and with high accuracy, significantly improving the overall transaction experience.
In 2010, the revenue surged to 9.204 billion, marking a remarkable increase of 150.96% from 2009 The total payment transactions, both inward and outward, escalated to 194,126, reflecting a rise of 75,924 transactions or 64.23% Outward payment transactions accounted for 109,426, with an increase of 38,293 transactions (53.83%), while inward transactions reached 84,700, up by 37,631 transactions (79.95%) Furthermore, the total domestic payment sales for 2010 soared to 854,002 billion, representing a 133.43% growth compared to 2009 and achieving 152.59% of the annual target This included outward payment transactions totaling 427,119 billion, an increase of 134.53%, and inward transactions amounting to 426,883 billion, up 132.33% from the previous year.
The operations of Western Union in SeAbank had extraordinary progress
SeABank signed contract with quick international money transfer organization Western Union in 2006, through which, customers can transfer money to anywhere in the world with quick and convenient procedure
In 2010, Seabank launched successful communication programs for Western Union, themed "Integration of gratitude - to the gift," which ran from May 16, 2010, to March 31, 2011, alongside the monthly "Western Union Action Day" starting in August These initiatives led to a significant increase in transactions, rising from an average of 484 per month to 779, with a peak of 942 transactions in December 2010 Notably, transaction volumes on Action Days doubled compared to regular weekdays The programs contributed to an impressive growth rate of 66.93% for Western Union, compared to the sector's overall growth of 20% In 2010, Western Union's sales reached 126.317 billion, marking an 86.06% increase from 2009, while revenue from services hit 657.90 million, up 61.52%, with total transactions reaching 7,515, reflecting a 66.93% growth.
After a year of implementing a nationwide operational model transition, SeABank has demonstrated its strong capabilities and internal resources, leading to effective growth based on an internationally recognized retail banking model The emphasis on human factors and collective strength positions the bank's workforce as its key competitive advantage.
SeABank is committed to the continuous growth and expansion of its operations while prioritizing the training and development of its human resources to ensure the bank's legacy and sustainability As of December 31, 2010, the bank employed a total of 1,533 individuals.
104 transaction points nationwide, including managers accounted for 21% of the personnel structure.
In 2010, SeABank made significant strides in personnel development by focusing on the recruitment and training of nearly 500 new staff to support its rapid network expansion The bank enhanced its reputation as a professional employer, effectively attracting candidates through well-planned recruitment initiatives, including the "From Trainee to Professional Banker" program SeABank emphasized quality training via its Training Center, aiming to instill professional standards and business ethics while equipping employees with the necessary skills for the new business model With the support of Société Générale experts, 68 courses were conducted under the SeAMove project, benefiting 1,891 participants The bank also prioritized competitive salaries and favorable working conditions, fostering a modern environment where employees can thrive, contribute, and uphold the core values integral to SeABank's growth.
Between 2008 and 2011, Seabank adapted its retail product offerings to meet market demands by launching and rapidly deploying new retail credit products, including overdraft loans, consumer lending with mortgage options, and credit card services.
SeABank has successfully implemented large-scale programs to mobilize personal savings, enhancing capital to meet customer borrowing needs The introduction of new programs and products has garnered positive customer acceptance, laying a strong foundation for future retail growth In 2010, SeABank exceeded its business targets, achieving total assets of 55.242 billion, total deposits of 39.685 billion, and outstanding loans of 20.512 billion Pre-tax profit reached 829 billion, with the loan structure comprising 82% in VND and 18% in foreign currencies Personal loans made up 22%, while corporate loans accounted for 78%, with large enterprises representing 68% and SMEs 32% Additionally, medium and long-term loans constituted 56.4%, and short-term loans 43.6% of the total Despite rapid loan growth, SeABank maintained high credit quality, with bad debt only at 2.14% of total loans.
No Criteria Plan in 2010 Implementation in 2010
Source: Annual report in 2010, Accounting Department- SeABank