(TIỂU LUẬN) thảo luận nhóm TMU expanding a car loan service for individual customers in thanh cong branch ham nghi transaction office, joi – nt stock commercial bank for foreign trade of vietnam

THUONGMAI UNIVERSITY INSTITUTE OF INTERNATIONAL COOPERATION TUTORED PROJECT Expanding a car loan service for individual customers in Thanh Cong branch – Ham Nghi transaction office, Joint Stock Commercial Bank for Foreign Trade of Vietnam Group : 08 Class : CN16 - TNA Doctor : ĐẶNG Thị Minh Nguyệt Tutor at transaction office: Director Members: Full name Date of birth NGUYỄN Minh Hiếu (leader) 06/12/1999 NGUYỄN Quỳnh Trang NGUYỄN Thị Nguyệt 27/09/2001 24/01/2001 LÊ Anh Đức 14/11/2001 HOÀNG Văn Thắng 21/08/2001 Ha Noi, 01/2022 Academic Year 3rd ACKNOWLEDGMENTS Internship is the last step that we need to take to graduate and is not an easy process without the guidance and dedicated guidance of teachers at Toulon University and ThuongMai University, as well as the encouragement of family and friends during the internship First of all, we would like to express our sincere gratitude to Doctor Dang Thi Minh Nguyet - our tutor, who always believes in us, enthusiastically sharing the knowledge and experience in the real process, including knowledge in Finance - Banking Secondly, we would like to express our sincere gratitude to the Vietnam Joint Stock Commercial Bank for Foreign Trade – Thanh Cong branch, Ham Nghi Transaction Office, especially Ms DAU Thi Thuy Van - Branch Director, for their support and create the best conditions for us during the research and implementation of the topic of the report Finally, we are really grateful to the colleagues from Vietcombank who gave us the motivation to overcome obstacles in the process of completing the report A TABLE OF CONTENTS ACKNOWLEDGMENTS A TABLE OF CONTENTS B LIST OF FIGURES AND TABLES D LIST OF TABLES D LIST OF FIGURES D LIST OF ACRONYMS E INTRODUCTION PART A: GENERAL INFORMATION OF THE VIETCOMBANK AND GROUP PROJECT Overview of Vietcombank - Thanh Cong branch, Ham Nghi transaction office 1.1 General characteristic of Vietcombank 1.2 History and development 1.3 Ham Nghi transaction office 1.4 The internship positions, responsibilities, and tasks 1.4.1 Internship positions and responsibilities 1.4.2 Daily task Overview of project: 2.1 Reason for choosing the topic 2.2 Objectives of the project 2.3 Project implementation schedule PART B: OVERVIEW OF VIETCOMBANK CAR LOAN SERVICE 10 Process of car loan 10 Car loan service of Vietcombank Thanh Cong Branch, Ham Nghi transaction office 11 Car loan packages 12 The reality of car purchasing at the branch 12 PEST analysis for Vietcombank - Thanh Cong branch, Hàm Nghi transaction office 13 5.1 Political 13 5.2 Economics 13 5.3 Social 13 5.4 Technology 14 B SWOT analysis and recommendations for Vietcombank - Thanh Cong branch, Hàm Nghi transaction office 14 Proposals to improve the car loan product for individual customer for Vietcombank Thanh Cong branch, Hàm Nghi transaction office 15 PART C: SURVEY OF THE DEMAND FOR USING CAR LOANS FOR PERSONAL CUSTOMERS 16 Quantitative survey: 16 Analyze the results of survey 16 2.1 Summary of findings 16 2.2 Recommendations and Conclusions 25 Business cases 26 3.1 The 1st cases 27 3.2 The 2nd cases 27 PART D: SELF ASSESSMENT OF THE PROJECT 29 CONCLUSION 30 REFERRENCES 31 ANNEX i C LIST OF FIGURES AND TABLES LIST OF TABLES Table 1: Daily task Table 2: Project implementation plan Table 3: Process of car loan 10 Table 4: Business results 12 Table 5: SWOT analysis for car loan service 14 LIST OF FIGURES Figure 1: Organizational chart of Thanh Cong , Ham nghi transaction office Figure 2: The structure of the department and our position Figure 3: The chart presents the price range of car 16 Figure 4: The chart illustrates the choice of bank of customers with many original features 18 Figure 5: The chart presents the choice of interest rate 19 Figure 6: The chart presents the loan tenor 20 Figure 7: The chart illustrates the percentage of the loan value on the car value 21 Figure 8: The chart presents the FLEXIBLE EMI PREFERENCE 21 Figure 9: The chart presents the structured EMI preference 22 Figure 10: The chart illustrates the important terms of Services of Auto Loans 23 Figure 11: The chart presents some additional Cross Selling Services 24 D LIST OF ACRONYMS No Abbreviation Full words Agribank Vietnam Bank for Agriculture and Rural Development Vietinbank Vietnam Joint Stock Commercial Bank for Industry and Trade Vietcombank Vietnam Joint Stock Commercial Bank for Foreign Trade BIDV Bank for Investment and Development of Vietnam Techcombank Vietnam Technological and Commercial Joint Stock Bank CEO Chief Executive Officer VND Vietnam Dong ID Identification ATIGA ASEAN Trade in Goods Agreement 10 NĐ-CP Nghị định-Chính Phủ 11 EVFTA Eurpoe-Vietnam Free Trade Agreement 12 MFN Most-favored nation 13 WTO World Trade Organization 14 APEC Asia-Pacific Economic Cooperation 15 ASEM The Asia-Europe Meeting 16 GDP Gross Domestic Product 17 FTA Free Trade Agreement 18 BCG Boston Consulting Group 19 VF Vin Fast 20 US United State 21 ROI Rate of interest 22 EMI Equated Monthly Installment E INTRODUCTION ThuongMai University and Toulon University facilitated students to take part in banking environment before finish this course with the aim of establish the vocational awareness for students Having the opportunity to get acquainted with the real working environment at the bank, we applied for positions as a salesman - an important part of the bank Fulfilling the duties of a salesman plays an important role in bank development During my internship at Ham Nghi transaction office - Vietcombank Thanh Cong Branch, we have set for ourselves the following targets: - Targets 1: Try to apply learnt theories to real work - Target 2: Understand the operation of the bank, duties of a salesman, how to communicate with customers, how to solve the problems - Target 3: Try to deal with challenges and keep learning and studying - Target 4: Build up good relationship with bank's employees and open other relationships - Target 5: Improving the skills and knowledge ready to become a banker In time internship, we have accumulated a lot of knowledge from difficulties we have been through Those experiences will be stated in the following report Scope and objective of the project After a process of discussion and information research, we decided to implement the project: 50 41-50 31-40 18-30 0% 20% 40% 60% 80% 100% Yes 18-30 41 31-40 20 41-50 13 >50 No 10 2.8 Yes No 73% of respondents said 8Yes9 to structured EMI payment methods which were suited to their needs Structured EMI payment preference was highly preferred among the younger group of respondents The preference for structured payments decreases gradually among the older group of respondents 21 • STRUCTURED EMI PREFERNCE Figure 9: The chart presents the structured EMI preference Structured EMI preference >50 41-50 31-40 18-30 10 20 30 40 50 18-30 11 31-40 41-50 >50 Real End Balloon 0 Step Down 24 17 12 Step Up Bullet Payment Bullet Payment Real End Balloon Step Down Step Up Age Group • 18-30 years: 59% respondents preferred the Step Down payment method while 27% preferred the Bullet payment method • 31-40 years: 85% respondents preferred the Step Down payment method • 41-50 years: 92% preferred the Step Down payment method • 51-60 years: 50% preferred the Bullet payment and Balloon payment each The data indicates that the Step Down mode of payment (68%) was preferred across all categories while the Bullet Mode of payment (21%) was the second most preferred choice 22 • Importance of Auto Loans Terms of Services: Figure 10: The chart illustrates the important terms of Services of Auto Loans Importance of Auto Loans Terms of Service-Rank 3% 1% 2% 11% ROI Flexible EMI Prepayment charges Loan tenor 83% Loan disbursement Among all respondents, 83% ranked Rate of Interest as the most important factor in selecting an auto loan Importance of Auto Loan Terms of Service-Rank 6% 6% 2% 15% 48% 23% Flexible EMI Prepayment charges Loan disbursement Loan to value ROI Tenor 48% of respondents selected Flexible EMI as the second most important factor while 23% selected Prepayment charges 23 Overall analysis: • The majority of respondents ranked Rate of Interest (83%) as the most important determining factor in selecting an auto loan •A low down payment was the second most preferred choice • Prepayment charges, loan tenor and loan disbursement were the other important factors identified by respondents as important in selecting an auto loan • After the initial two rankings, responses were varied among customers so the third and fourth important factors were not as conclusive as the first two important factors Figure 11: The chart presents some additional Cross Selling Services Cross-selling product preference DISCOUNT ON HEALTH INSURANCE 19% DISCOUNT PERSONAL LOAN 4% DISCOUNT LIFE INSURANCE DISCOUNT EDUCATION LOAN 7% 10% DISCOUNT VEHICLE INSURANCE 59% INSURANCE ON LOAN COVER 78% Cross-selling product preference Of the Total Sample Size of 107, the following interpretations were obtained: • Insurance on Loan Cover was the most preferred option among all respondents (78%) • Discount on Vehicle Insurance was the second preference among respondents (59%) • Discount on • The other Health Insurance was the third preference among respondents (22%) cross selling features was not popular among the respondents 24 2.2 Recommendations and Conclusions About 76% of customers preferred the Fixed Rate of Interest Floating Rate was only popular among the 18-30years age group (31%) We can therefore infer that a majority of customers are still risk averse while seeking a loan due to the current economic climate There are 55% of customers preferred a loan tenor of years while 58% preferred a loan to value deal (LTV %) of 80-90% Therefore, customers considered a year loan period as the optimal period for an auto loan There are 71% of respondents had a favorable opinion of structured EMI payment methods and responded positively if such customized payment methods were offered The data indicates that the younger groups of respondents (18-30 years) were more responsive towards a structured EMI payment method which suited their needs whereas the older groups of respondents were more averse and preferred a standardized EMI payment method Overall, structured payments were viewed favourably across all age groups except respondents above 51 years of age Across all age groups 67% of respondents who chose structured payments preferred the Step Down mode of payment while 22% preferred the Bullet mode of payment This shows that people across age groups preferred to have a lower credit liability over the years Although the Step Down mode of payment meant a higher payment in the initial years, the gradual reduction in EMI towards the end of the loan period was seen as a major factor for the respondents to select this method of structured payment ➢ Recommendation: As the respondents generally preferred structured payments, the Step Down and Bullet mode of payment should be promoted so the customers are more aware of the customized forms of payments which suit their needs Among the choices of Banks provided to respondents i.e Vietcombank, BIDV, Techcombank, 58% of respondents chose Vietcombank, 28% chose BIDV and 14% chose Techcombank BIDV had the lowest interest rate among all banks while Vietcombank offered interest rates as per industry average and Techcombank had the highest interest rate Therefore, in spite of BIDV offering the lowest interest rate, it was seen that customers preferred Vietcombank This indicates that customers are looking for a few more favorable service terms other than only the interest rate A majority of respondents ranked the Interest rate as the most important factor in selecting an auto loan But customers were also looking for favorable down payment 25 charges, lower prepayment or foreclosure charges, loan tenor as well as a quicker loan disbursement process ➢ Recommendation: Vietcombank was the most selected option among respondents Compared to BIDV and Techcombank had a higher interest rate but had more favorable terms of services which included a lower down payment and a quicker loan disbursement process which customers rated highly Compared to TCB, VCB did not offer the structured mode of payments which TCB offered but had offered lower prepayment charges and a lower interest rate Therefore, although structured payment methods were highly preferred by customers, the rate of interest was the single most defining factor which prevented customers from opting for Techcombank Therefore, in order to attract a newer group of customers in this segment, the rate of interest would need to be more competitive with industry standards, especially in comparison to Public Sector Banks Along with the Rate of Interest, Structured Payments such as the Step Down mode and Bullet payment would then be highly desirable among these customers Additional Cross Selling Services: • Insurance on loan cover (Credit Assure) was well received among customers (78%) • Also a Discount on vehicle insurance was also preferred among respondents (59%) • The concept of keeping margin money as a fixed deposit for a 100% loan disbursement was well received by 22% of customers • The other services mentioned in the questionnaire were not that well received among respondents ➢ Recommendations: Insurance on loan product should be well promoted among car buyers to increase its visibility and eventually it would lead to acceptance of the insurance product Also, a vehicle insurance discount should be provided to those customers who seek a Vietcombank auto loan Business cases Our team fulfilled this survey of consumer automobile lending online using Google Form, by filling in the response via Link and getting 107 clients to respond There are two 26 very typical cases of consumer automobile lending in which we've successfully connected with them In particular, 3.1 The 1st cases • Name: Nguyen Minh Duc • Age: 29 • Address: 75 Ho Tung Mau, Cau Giay, Ha Noi • Job: Architect • Income/month: VND 18 million (Data from statement) • Marital status: Married and have child We contacted Mr Duc via email, realizing his situation that He has worked for Phuc Hung Holdings Construction Jsc for years He has the demand of buying a car - Hyundai Grand Sedan valued VND 420.000.000 He wants a loan of 100% car value in years with the collateral is his house He wanted to learn how to use the car loan service at Vietcombank, so we invited him to Ham Nghi transaction office for advice and cooperation, provide more information about the service After consulting and reviewing the requirements and legal documents, Mr Duc agreed to register to use the service We helped and guided him to write the application form according to Vietcombank's application form Next is the approval and review step of Vietcombank At this step, we have forwarded it to the credit department staff at Vietcombank, Ham Nghi transaction office to continue to complete the procedures for customers to buy cars After assessing his profile, his profile is in line with the bank's regulations, the loan is approved 3.2 The 2nd cases • Name: Nguyen Thi Trang • Gender: Female • Age: 35 • Job: Cashier • Address: 36 Ngoc Lam, Long Bien , Ha Noi • Marital status: Single The second customer is Ms Trang, we did contact her just like Mr Duc We find out som information about her that she has worked for Sudico (SONG DA Urban and Industrial Zone Investment and Development Joint Stock Company) for years She has the demand 27 of buying a car- Hyundai Grand I10 sedan 1.2 AT 2018 valued VND 415.000.000 She wants a loan of 100% car value in years Reason for not disbursing: She is not eligible as she doesn9t have stable income Her salary is VND million/ month + commission This cannot make sure that she can afford the monthly interest on loan I advised her to use her house or savings account to the mortgage but she is living with family and haven9t got home of his own She does not agree to use savings account to mortgage Because she has low salary, doesn9t have any mortgage The possibility of this customer is a low refund, so the loan was not approved 28 PART D: SELF ASSESSMENT OF THE PROJECT months of internship at Vietcombank - Thanh Cong branch, Ham Nghi transaction office is an unforgettable moment We face many difficulties during the implementation of a group project such as lack of time, lack of information and conflicts between members within the team This time might be described as a practical course in which our team has gained more knowledge and cultivated experience in the banking business Firstly, with specialized knowledge, our group has applied what they've learned in the learning process to practice to the real-world situation, such as determining the issuing process of the project, setting up the car loan service registration procedure, analyzing and improving the service for individual customers, etc This allows each member in the group to accumulate more experience and have greater confidence in the future Secondly, besides banking knowledge, our foreign language and computer skills have also developed a lot Members of our group are frequently forced to use English when speaking a foreign language Reading, translating, evaluating, and synthesizing documents and information in English improves our basic skills such as reading, listening, speaking, writing, and so on Our team must also use word processing tools like Word, Excel, and Gantt Project for group practice, As a result, this moment gives us a chance to improve each team member's computer skills Thirdly, initiative is the most important lesson, as well as the first lesson, that our group has learned via accumulated practice Proactively getting to know people, learning about the company's condition, proposing to join in banking operations and so on All of them help our team complete the report most smoothly Finally, by understanding the importance of car loan services for different individual customers as well as banking operations in general, our group has reached more experience working in this area After graduation, all individuals of our group want to continue to learn a Master Degree in Banking - Finance major 29 CONCLUSION The global socio-economic life is growing as a result of the current internationalization process Car lending services through banking credit operations are becoming increasingly popular in developing countries like Vietnam Over the past, Vietcombank has always paid attention to innovation in customer relations to improve efficiency and develop car loan service activities, especially car loan services for individual customers Through a study of the situation at Vietcombank -Thanh Cong branch, Ham Nghi transaction office on the car loan service between the bank and clients, we can see that besides the encouraging results, there are still certain limitations that exist in developing the quality of car loan services Therefore, to improve the efficiency of the affiliate of this service at Vietcombank, we need to have coordination from many sides, not only the relationship between the bank and the other institutions but also the combination of strategies to attract customers to use the service Our intern report is unable to avoid mistakes due to time restrictions and ability Therefore, the opinions of teachers and friends are very valuable and necessary for us to be able to complete this project excellently 30 REFERRENCES General informations about Vietcombank: https://portal.vietcombank.com.vn/enus/about/Pages/Home.aspx?devicechannel=default General informations about Vietcombank-Thanh Cong Branch: https://vietcombank.ngan-hang.com/chi-nhanh/ha-noi/chi-nhanh-thanh-cong VCB9s auto loan products: https://portal.vietcombank.com.vn/Personal/Loan/CVMOT/Pages/Cho-vay-mua-o-tomoi.aspx?devicechannel=default Vietnam economy in 2020: https://www.gso.gov.vn/en/data-and-statistics/2021/01/vietnam-economy-in-2020-the-growth-of-a-year-with-full-of-bravery/ Vietnam reached EVFTA: https://moit.gov.vn/tin-tuc/hoat-dong/evfta-la-mot-trongnhung-hiep-dinh-thuong-mai-tu-do-viet-nam-tan-dung-tot-nhat-trong-nam-dau-thucthi.html 31 ANNEX QUESTIONNAIRE ON THE DEMAND FOR USING CAR LOANS FOR INDIVIDUAL CUSTOMERS Dear Sir/ Madam, We would be grateful if you could answer the following questions honestly Your valuable time spared will assist us in collecting relevant data in our area of research All information collected will be treated as confidential Information gathered is strictly for research purpose ✓ Please tick the check boxes wherever applicable ✓ Name (Optional): _ Age (yrs): 18-30 31-40 41-50 Profession: Salaried Self-Employed 51 & above Business Annual Income (VND): < 120 millions 120 millions – 240 millions 240 millions – 480 millions 480 millions – 1.2 billions 1.2 billions & above First-Time Buyer: Yes No 1) Which Car you intend to purchase? _ 2) What would be the price range of the Car you intend to purchase? (millions VND) – billion i 1–2 billions > billions 3) What type of Rate of Interest (ROI) facility you prefer on your auto loan deal? Fixed Floating 4) What is the % of Loan to value (LTV) deal you expect for your auto loan? Less than 50% 50-70% 70-80% 80-90% 0-100% 5) What is the Loan tenor you expect? (No of Years) more than 6) Are you willing to utilize flexible EMI repayment facilities if offered? Yes No 7) If Yes, please select your preference among the following flexible EMI repayment services offered EMI services Step Up Step Down Bullet Payment Balloon repayment 8) Please see the terms offered by three different Banks A, B, and C for a particular car in your price range As per your requirements, please tick the Bank you would most likely seek to finance your auto loan ii Auto Loan Terms of Service Vietcombank BIDV Techcombank Flexible EMI repayment options Available Available Available Loan Disbursement (in days) 1-3 days 6-8 days days 70-100% Up to 80% 100% No Ceiling No Ceiling billions 7 0,5-1% 2% 1% 7,5% 7.4% 7.6% Loan to Value (LTV) deal (%) *(On-Road Price) Ceiling on Loan Amount Loan Tenor maximum (Years) Prepayment Charges *(On % of Principal Amount prepaid) Rate of Interest Vietcombank BIDV Techcombank 9) With reference to the previous question and as per your selection, please rank the most Important Auto Loan Terms of Services offered (Rank – Highest importance to Rank – Lowest importance) Auto Loan Services Rank (1 to 4) Flexible EMI repayment options Loan Disbursement (in days) Loan to Value (LTV) deal (%) Loan Tenor (Years) Prepayment Charges Rate of Interest (%) 10) What kind of additional services you expect along with your auto loan? Please check the boxes below: Insurance Cover on Loan Voucher services International Credit Card Free registration fee iii Discount on (Please select from below): General Insurance premium (Vehicle) Personal Loan Life Insurance premium Education Loan Health Insurance premium (for self and family) iv ... LIST OF ACRONYMS No Abbreviation Full words Agribank Vietnam Bank for Agriculture and Rural Development Vietinbank Vietnam Joint Stock Commercial Bank for Industry and Trade Vietcombank Vietnam Joint... Vietcombank Thanh Cong Branch, Ham Nghi transaction office 11 Car loan packages 12 The reality of car purchasing at the branch 12 PEST analysis for Vietcombank - Thanh Cong branch, ... important part of the bank Fulfilling the duties of a salesman plays an important role in bank development During my internship at Ham Nghi transaction office - Vietcombank Thanh Cong Branch, we have