VIETNAM NATIONAL UNIVERSITY, HANOI VNU INTERNATIONAL SCHOOL Nguyen Anh Nam ENHANCING CAPITAL MOBILIZATION AT THE JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM (Tăng cường huy đ[.]
VIETNAM NATIONAL UNIVERSITY, HANOI VNU INTERNATIONAL SCHOOL Nguyen Anh Nam ENHANCING CAPITAL MOBILIZATION AT THE JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM (Tăng cường huy động vốn Ngân hàng TMCP đầu tư phát triển Việt Nam) MASTER IN FINANCIAL MANAGAMENT HANOI, 2021 VIETNAM NATIONAL UNIVERSITY, HANOI VNU INTERNATIONAL SCHOOL Nguyen Anh Nam ENHANCING CAPITAL MOBILIZATION AT THE JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM (Tăng cường huy động vốn Ngân hàng TMCP đầu tư phát triển Việt Nam) Major: Financial Managament Code: 8340202.01QTD MASTER IN FINANCIAL MANAGAMENT HANOI, 2021 ACKNOWLEDGEMENT I would like to thank the Board of Directors, the training department of the International Faculty, Hanoi National University for creating all conditions for me in the process of studying and completing this thesis I would like to express my gratitude to the teachers and ladies who have dedicatedly taught MFM2 master class I would like to express my deep gratitude to my teacher, Dr Tran Tat Thanh who wholeheartedly helped and guided me during the process of writing this thesis I would like to thank all my friends, colleagues and family who have always supported, encouraged and created the best conditions for me to complete this thesis Thank you! Author i TABLE OF CONTENTS ACKNOWLEDGEMENT i LIST OF ACRONYMS v LIST OF TABLES vi LIST OF DIAGRAMS, CHARTS, IMAGES vii INTRODUCTION .9 The necessity of research and rationale 1.1 Setting out research issues 1.2 Rational Research Objectives 10 Subject and scope of research .11 Method of research 11 4.1 Data Collection 11 4.2 Data processing 11 Outline of thesis 12 Scientific and practical meanings of the topic: .12 Previous Studies: 12 CHAPTER 1: BASIC PRINCIPLES OF CAPITAL MOBILIZATION ACTIVITIES OF COMMERCIAL BANKS 14 1.1 Basic issues of capital mobilization of commercial banks 14 1.1.1 Major activities of commercial bank 14 1.1.2 Capital mobilization activities of commercial bank .14 1.2 Evaluation criteria of capital mobilization in commercial bank 20 1.2.1.Scale of capital and capital growth rate 20 1.2.2 Structure of capital mobilization: by subject, terms, currency .21 1.2.3 Costs of capital mobilization 23 1.2.4 Relationship between capital mobilization and capital using 24 ii 1.2.5 Different between average interest rates and average saving interest rates 25 1.3 Factors affecting capital mobilization activities of commercial banks 26 1.3.1 Subjective factor 26 1.3.2 Objective factors .31 CONCLUSION OF CHAPTER 34 CHAPTER 2: CURRENT SITUATION OF CAPITAL MOBILIZATION AT THE JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM 35 2.1 Overview of Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) 35 2.1.1 Process of formation and development 35 2.1.2 BIDV's organizational structure model 38 2.1.3 Forms of capital mobilization at BIDV 38 2.2 Analysis of capital mobilization at BIDV according to evaluation criteria 41 2.2.1 Analysis of capital size and growth rate over the years 41 2.2.2 Analysis of capital mobilization structure 44 2.3 Evaluation of capital mobilization activities at BIDV .51 2.3.1 Achievements 51 2.3.2 Limitations 52 2.3.3 Reasons for limitations 54 CONCLUSION OF CHAPTER .58 CHAPTER 3: RESEARCH METHODOLOGY 59 3.1 Data collection 59 3.1.1 Secondary data 59 3.1.2 Primary data collection 60 3.2 Data processing 61 CHAPTER 4: SOLUTIONS TO ENHANCE CAPITAL MOBILIZATION AT COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM .62 iii 4.1 Solutions .62 4.1.1 For Policies 62 4.1.2 For interest rate 62 4.1.3 For Human resources 63 4.1.4 For technology 65 4.2 Recommendations 65 4.2.1.Recommendations to the Government 65 4.2.2 Recommendations to the State Bank 68 CONCLUSION OF CHAPTER .71 CONCLUSION 72 REFERENCES 73 iv LIST OF ACRONYMS ADB ATM BQGQ CCTG CN CTCP ĐCTC DPRR ĐT&PT FTP GDKH GTCG HĐV KH KHKD KKH NH NHNN NHTM NHTMCP NQD NV PGD QL&DV QTK SDV TCTD TDH TGTT TSĐB : Vietnam Development Bank : Automated Bank teller machine : Average cost : Certificates of deposit : Branch : Joint Stock Company : Financial institutions : Risk provisions : Investment and development : Transfer of internal capital : Customer transaction : Valuable papers : Mobilize capital : Customer : Business plan : Corroborate : Bank : State bank : Commercial Bank : Joint-stock commercial bank : Non-state : Capital : Transaction office : Management and service : Saving Fund : Capital using : Credit institutions : Medium and long term : Deposit payment : Collateral v LIST OF TABLES Table 2.1 Evaluation compared to the plan proposed by BIDV 42 Table 2.2 Capital mobilization of banks in 2019 (Ai, 2020) .43 Table 2.3 Structure of mobilized capital by customers of BIDV in the period of 2018-2019 (BIDV, 2019) 44 Table 2.3: Total mobilized capital from retail and wholesale activities (BIDV, 2019) 46 Table 2.4 Movement of capital mobilization by currency of BIDV in the period of 2018 - 2019 .48 vi LIST OF DIAGRAMS, CHARTS, IMAGES Figure 2.1: Organizational structure of BIDV 38 2.1.3 Forms of capital mobilization at BIDV 38 Figure 2.2 Total amount of capital raised over the years 42 Figure 2.3 Structure of mobilized capital by customers of BIDV in the period 2015 - 2019 .44 Figure 2.4: Total capital mobilized from retail and wholesale activities 46 Figure 2.5 Movement of capital mobilization by currency of BIDV in the period 2015 - 2019 48 Figure 2.6: Structure of deposits by term of BIDV in the period 2015 - 2019 50 vii SUMMARY OF THESIS Being well aware of the importance of capital and facing to the hard competition from other credit institutions in the market, during the 62 years since the establishment, capital mobilization activities at the Joint Stock Commercial Bank for Investment & Development Commercial of Vietnam (BIDV) has always been focused and has achieved certain results However, the process of mobilizing capital still faces many difficulties and the efficiency is still not high Besides the significant impacts of market factors such as: prices, continuously rising inflation, complicated exchange rate fluctuations, competitive deposit interest rates, competition among commercial banks by interest rates which are getting more and more drastic…, BIDV also has limitations that need to be overcome BIDV’s mobilized capital decreased in 2018 but in 2019 mobilized capital increased, the decrease in capital mobilization did not meet the demand for using, causing an imbalance between capital mobilization and capital using Facing such reality, the issue for BIDV is to overcome limitations, build a reputation and brand for customers, maintain and grow a stable capital base for customers and balancing with the use of capital to be able to stand firm and overcome difficulties in any situation The research objective of the topic is clarifying the situation of capital mobilization, properly evaluating the results, limitations and causes of limitations in capital mobilization activities, thereby proposing solutions to enhance the capital mobilization at BIDV In order to achieve the general goal, the thesis aims at the following specific objectives: Systematize the theoretical basis for capital mobilization of commercial banks; Evaluate the current situation of capital mobilization at BIDV; Suggest solutions for the implementation of capital mobilization solutions at BIDV The subject of the research: the basic issues of capital mobilization of commercial banks in general and of BIDV in particular ... process of formation and development of Joint Stock Commercial Bank for Investment and Development of Vietnam, business performance, the thesis analyzes the current situation of capital mobilization. .. mobilization at BIDV as well as bank development The scope of the research: The situation of deposit capital mobilization at the Joint Stock Commercial Bank for Investment and Development of Vietnam. . .VIETNAM NATIONAL UNIVERSITY, HANOI VNU INTERNATIONAL SCHOOL Nguyen Anh Nam ENHANCING CAPITAL MOBILIZATION AT THE JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM (Tăng cường