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Tiêu đề INCREASING CAPITAL MOBILIZATION AT JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM - EAST HANOI BRACH
Tác giả Đỗ Quỳnh Trang
Người hướng dẫn PGS.TS. Phạm Thanh Hòa
Trường học ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH
Chuyên ngành Quản trị kinh doanh
Thể loại LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH
Năm xuất bản 2020
Thành phố HÀ NỘI
Định dạng
Số trang 112
Dung lượng 1,97 MB

Cấu trúc

  • CHAPTER 1: OVERVIEW OF MOBILIZING RESIDENTS’ CAPITAL (14)
    • 1.1. Overview of commercial banks (14)
      • 1.1.1. Commercial Bank (14)
      • 1.1.2. Operations of commercial banks (17)
    • 1.2. Mobilized capital of commercial banks (21)
      • 1.2.1. Concept of mobilized capital (21)
      • 1.2.2. The role of mobilized capital (21)
      • 1.2.3. Forms of capital mobilization (22)
      • 1.2.4. Capital mobilization policy (24)
    • 1.3. Mobilizing capital from residents (26)
      • 1.3.1. Characteristics (26)
      • 1.3.2. Role (27)
      • 1.3.3. Mobilization forms (27)
      • 1.3.4 Assessing activities of mobilizing residential capital of commercial banks22 (30)
      • 1.3.5 Factors affecting the mobilization of residential capital of commercial (33)
  • CHAPTER 2: ACTUAL SITUATION OF MOBILIZING RESIDENTAL (38)
    • 2.1. Overview of Vietnam Joint Stock Commercial Bank for Investment and (38)
      • 2.1.2. Business operation situation (42)
    • 2.2. Actual situation of mobilizing residents’ capital activities at BIDV – the (49)
      • 2.2.1. Scale of mobilized capital (49)
      • 2.2.2. Structure of residential capital mobilization (53)
      • 2.2.3. Capital mobilizing activities in terms of criteria (67)
      • 2.2.4. Analysis of factors affecting the results of residents’ capital mobilization (74)
    • 2.3. Assessing activities of mobilizing residential capital at BIDV – the Eastern (80)
      • 2.3.1. Achievements (80)
      • 2.3.2. Limitations (82)
      • 2.3.3. Reasons (84)
  • Chapter 3: SOLUTIONS TO DEVELOP RESIDENTS’CAPITALMOBILIZATION ACTIVITIESAT BIDV-THE (88)
    • 3.1. Future orientation of mobilizing residential capital activities at BIDV – the (88)
      • 3.1.1. General orientation for the development of BIDV – the Eastern (88)
      • 3.1.2. BIDV's capital mobilization strategy (89)
      • 3.1.3. Orientation for mobilizing residential capital at BIDV - Eastern (91)
    • 3.2. Solution to strengthen residential capital mobilizationBIDV – the Eastern (92)
      • 3.2.1. Diversify mobilization forms and mobilized products (93)
      • 3.2.2. Solutions for flexible and competitive banking services (95)
      • 3.2.3. Innovative organizational and management solutions (99)
      • 3.2.4. Human resource solutions (100)
      • 3.2.5. Solutions to adapt to residential practices (101)
      • 3.2.6. Improve the quality of using mobilized capital (102)
    • 3.3. Bank’s recommendations (103)

Nội dung

OVERVIEW OF MOBILIZING RESIDENTS’ CAPITAL

Overview of commercial banks

1.1.1 Commercial Bank 1.1.1.1 Concept of commercial bank

Commercial banks are banks that deal directly with companies, enterprises, economic organizations and individuals, by receiving deposits, savings, and using that capital to lend, discount, providing payment facilities and providing banking services to those subjects It wasdefined in the Banking Act of the Republic of France (1941): "Commercial banks are institutions where careers regularly receive money from the public They are in the form of deposits, or in other forms, and use that money to lend, discount and make payment” According to regulations ofState

Bank of Vietnam (SBV)(1990): “Commercial banks are a currency trading organization with regular operations and mainly receive customer deposits with the responsibility to repay and use that money to lend, to discount and to use as payment instrument”

According to the Law on Credit Institutions No 47/2010 / QH12 issued by the National Assembly and passed on June 16, 2010, it was defined that: “The bank is a type of credit institution that can be implemented all banking activities in accordance with this Law According to the nature and operational objectives, types of banks include commercial banks, policy banks, cooperative banks, "and"

Commercial banks are all types of banks that are carried out all banking operations and other business activities under the provisions of this Law and aiming at profit target”

Thus, commercial banks are an extremely important intermediary financial institution in the economy Thanks to this intermediary financial institution system, capital sources are scattered, gathered in large numbers to provide loans for economic organizations and individuals to serve for the purpose ofsocio- economicdevelopment

Through the concepts and defines of commercial banks, it can be commented that:

 Commercial bank is a type of corporation, because it is established to do business and the purpose of itsoperation is for profit

 Operations of commercial banks include currency trading and banking services

 Besides structural similarities and final financial goals, commercial banks are different from other businesses Such as:

 Business scope: Banking business is money, credit, and banking services

 As a business, the main source of capital that the bank uses in business is capital mobilized from outside, while the bank's own capital accounts for a low proportion of total business capital

 Over the Bank's total assets, fixed assets and current assets account for a low proportion, in which financial assets accounts for significant proportion, including bonds, negotiable instruments, stocks,debt agreements and other valuable papers

 Business activities of commercial banks are under the control of the Central Bankor State Bank Commercial banks cannot expand business activities when the Central Bank is applying monetary tightening policies and limiting inflation and vice versa Therefore, the expanding or narrowing of a commercial bank isdominated by the Central Bank

In conclusion, it can be said that commercial bank is a combination between capital surplus subjects (individuals who have income but do not need to use; enterprises and organizations have just consumed products but have no need to import materials ) to capital deficit subjects

To operate effectively and expand the operating market, any commercial bank has established its branches Each branchof commercial bank operates in a specific location that is responsible for attracting customers as well as providing banking services In order to be recognized as a branch of a commercial bank, it is necessary for a bank to achieve a number of standards according to the specific requirements of each country in terms of scale of operation, number of employees, number of services provided The operations of commercial banks’ branchesare depending on requirements of head office,are under the control of head office and are accountedon head office’s account

The branch is a dependent unit of commercial bank, has its own recognition, carries out business activities in accordance with regulations of commercial banks

In Vietnam, to set up a new branch, there are some specific requirements:

- Safety ratios in banking operation withinrecent three years has been ensured as regulations of the State Bank;

- Information system met the requirements of online management of commercial banks; There are internal regulations on management of transaction offices and branches that ensure safe and effective operation in accordance with recent law

After one year from the date of opening, commercial banks can open transaction offices and branches if following conditions are satisfied:

- The businessresult in the previous year of application for opening new transaction offices and branches was positive; safety ratios in banking operations were ensured; debts were classified, risk provisions were sufficiently set up according to current regulations;

- Having an effective management, executive and internal audit systems;

- Having an internal inspection and control system according to the regulations of the State Bank;

- Having an information system satisfied the requirements of online management of commercial banks; strictly follow statistical reporting regimeof the State Bank;

- There are official internal regulations (in writing form) to manage transaction offices and branches to ensure safe and efficient operation in accordance with recent laws;

- Not being sanctioned by the Bank Inspectorate for a total of thirty million VND or more within one year up to the time of requesting for a new transaction office or branch;

Along with the formation history of commercial bank, current operation of commercial bank today is far different from that of early commercial banks in the past Due to business today requirements and fierce competition, the commercial banking system has expanded into many typesof financial institutions which providing utility banking services to customers.Althoughsome traditional operations are still inseparable from the operation of the bank, hereinafter we explore some types of services that banks provide for the economy

* Foreign exchange trading One of the very first and typical services provided by banks is foreign exchange trading, whereby the bank buysseveral currencies in exchange for another currency Banks will receive fees and spread for this type of transaction Thisservice isvery important for international tourists when traveling in the host country

Additionally, at the same time, commercial banks also carry out capital mobilization, foreign currency loans, and more importantly, international payment for international trade activities

As mentioned above, in order to have capital for business activities, commercial banks must mobilize from various subjects in the economy

Commercial banksarepermitted to receive all deposits of residents, businesses, economic organizations and professional social organizations with appropriate interest rates announced Currently when customers come to send money, the bank will open an account to help customers conveniently transact and check

Mobilized capital of commercial banks

Mobilized capital of commercial banks is the monetary value mobilized by commercial banks in the market through deposits, loans and other capital sources

Parts of mobilized capital make sense to decide the ability of each commercial bank to operate

In this research, the financial resources mobilizing from the community is defined as the total amount of financial contribution from individuals, households, and enterprises

1.2.2 The role of mobilized capital

Determining the solvency of commercialbank:

The higher the bank's solvency, the greater the bank's available capital

Therefore, excluding other factors, the bank's solvency is directly proportional to the bank's capital in general and with the bank's available capital also With great capital potential, the bank can operate with an expanding business scale, effectively carry out competitive activities to keep the prestige and enhance the bank's position

Determining the scale of credit operations and other business activities of commercial bank:

The bank's capital is crucial factor decide to expand or narrow the volume of credit Normally, small banks have a range of business activities, investment items, low lending volume and less diversity Therefore, affecting the ability to attract capital of economic organizations and people, not even meeting the demand for loans of enterprises They will lose customers and not take advantage of business opportunities If banks become bigger, they would have abundant capital, and therefore surely meet the demand for capital and conditions to expand credit relations with many businesses and credit markets

Determines the competitiveness of banks

It has been proven thatscale, professional qualifications and technical facilities of a bank are the premise factors for attracting capital At the same time, a larger capital capacity is a favorable condition for banks to expand credit relations with economic sectors in terms of size and volume; proactive in terms of time and duration for borrowing, even deciding a reasonable interest rate for customers

Furthermore, large banks' capital will create favorable conditions for the combined use of other capital sources On that basis, it will help the bank have enough financial capacity to do multi-purpose business in the market, not only to lend but also to expand forms of joint venture, business of leasing services (leasing), buying and selling debt (factoring), trading in stock market

The forms of capital mobilization applied by commercial banking systems often include:

In terms of capital mobilization object

- Mobilizing capital from residents: commercial banks mobilize idle funds in the population (residents), through savings, payment, entrustment to the investment banks However, deposits in the population always account for a significant and primary proportion of commercial banks This source is featured byhighly stable; mainly medium and long term;low transaction costs (in relative numbers); high stabilitycustomers; low volatility Furthermore, it is very convenient for commercial bank to plan in both operation policies and capital mobilization policies

- Mobilize capital from enterprises: Social organizations, professional social organizationsdo not often deposit money into banks for the purpose of saving but for the purpose of daily performance Base on business cycles of enterprises, banks recommend or encourage enterprises and organizations to deposit according to specific instruments and agreements between both parties as well as the current provisions of law Some state-owned enterprises (SOE) are not allowed to deposit, they send this type of capital in the form of a entrusted investment

- Mobilizing capital from credit institutions: Mobilizing from the inter-bank market and other credit institutions, only applicable in case of temporary commercial bank shortages in payment for customers, or in case the bank lacks reserve according to the regulations of the State Bank or to meet force majeure circumstances The proportion of this source is often low, the stability is not high, the interest rate is often high, so commercial banks are very limited in using this source

- Savings deposits: This activity gives the bank a main capital source in total operating capital Through the actual situation of the bank, economic development indicators, current capital demand and forecast in the future, which commercial banks have reasonable, normal capital mobilization policies is an interest rate tool to attract customers' attention, thereby attracting customers to deposit money into banks with different objectives, depending on the needs of depositors and the portfolio providedby banks

- Performance deposits: This deposit is referred to deposit for current paying of customers This source mainly serves the needs of regular payment or daily consumption of the bank's customers This is not stable, but commercial banks can use some proportions of this source according to its purpose and reasonable calculation of the law and fluctuations of this type of deposit

- Entrusted investment deposit: Many customers (both individuals and organizations) of the bank have a large amount of money in their hands Customers do not have time to invest, or they lack information However, they still want to make interest from their capital instead of low saving interest rate They entrust investment banks under the agreements Additionally, there are businesses that are not allowed to deposit their savings into banks, so they turn their positions in the form of investment trust

Any bank would pay attention in this policy, because, it includes all the content related to the operation and business of the bank The success or failure of a bank is determined by the ability to attract customers However, here we only study the scope of capital mobilization policies of commercial banks only As stated before, the policy of commercial bank mobilization at each time has different changes, it depends directly on the socio-economic context, capital and actual needs of the bank as the beginning of the year, the middle of the year, the end of the year, or the seasonality of the bank's industry

Interest is understood as the price of the right to use the loan for a certain period that the user pays to its owner Thus, interest rates are directly related to the sources of money mobilized by commercial banks

In the history of banking industry, interest rate instrument is always considered as a factor contributing to the creation of capital for banks through mobilization from the economy Although at different periods of time, the interest rate offered by banks is different but still ensure to be attractive factors enough for customers, both retaining traditional customers and seeking new customers at the same time

- Policy to expand network by branches

Expanding the network not only helps banks improve capital mobilization, but also meets performance goals set by the bank Although today, the bank's utility services have been adopted by many banks, but it is still important for banks to expand its network That creates a sense of security for customers coming to the bank In addition to expanding the network, strategic decision makers cannot ignore the geographical position, serving the branches and transaction offices for their banks A branch located in a densely populated area, urban area and industrial zone will be an ideal environment for all activities of the bank and especially the capital mobilization of the bank In contrast, in areas where economic and social development capacity is limited, banks will not ignore it, but sometimes the bank must accept loss-making business to gradually create a relationship in expanding the market

- Policies on expanding relations with credit institutions, commercial banks, individuals and social organizations

The relationship with these organizations helps commercial banks set up strategic plans Especially, direct relationship with organizations, individuals, businesses will help commercial banks in predicting cash flow More importantly, because of close relationship, the bank will have reasonable priorities to encourage customers

Mobilizing capital from residents

Capital mobilization from residents’ accounts for a small proportion of commercial banks' capital, but it is an annual growth target of commercial banks

Therefore, commercial banks often find solutions to maintain and attract capital mobilized from residents

Large scale of residents’ deposit: Mobilization from the population is the temporary idle mobilization in society that is stored by the people as a savings to recover for future demand Because the population is the most crowded object in the economy, capital from this object will create a large-scale capital source for commercial banks From banks’ perspective, these are the sources that banks organize to mobilize from residents to re-invest, so the cost of capital mobilized from residents will create a great impact on the overall mobilization cost of the total funds This cost is considered as one of the most important criteria for commercial banks to determine lending interest rates

Residential deposits are the most stable source: This is the basis for commercial banks to determine reserve ratios and lending rates.Due to the continuous movement of cash flow in the economy, mobilized capital from other credit institutions and socio-economic organizations are often unstable Moreover, equity has a very high cost of ownership, so it is not effective for banks to set up lend Meanwhile, capital mobilized from residents has a stable nature When depositing money in commercial banks, purpose of residents normally is to accumulate to a higher amount of money in the future, so the bank has a plan and can forecast its rise and fall time

Capital mobilized from the population is a relatively long-term capital, which is a premise for commercial banks to provide medium and long-term loans this is regulated by the cumulative behavior of people when sending money or lending to commercial banks Other sources, such as borrowing from the State Bank and socio-economic organizations, are short-term due to the frequent use of these organizations' capital

For society: Mobilizing residential deposits increase savings and reduce spending, create jobs for workers, increase production and business, save issuance costs and cash circulation for the society

For residents: Increasing income for the people through interest income, difference in buying and selling valuable papers, income from gifts from the form of savings

For commercial banks: increase the capital of commercial banks, like a buffer for business activities of banks, residents are not only the object of commercial banks but also customers of commercial banks, thereby business of commercial banks becomes effective

Savings deposit is an amount of money deposited into a savings account, certified on a savings card, and entitled to interest in accordance with the regulations of the savings organization and insured in accordance with the provisions of law on deposit insurance Savings are reserved for individuals for future consumption purposes but are temporarily deposited in banks to earn interest

This is an important capital source of the bank to serve mainly lending of all economic sectors The main purpose of the savings deposit is not to use in the transaction but to earn interest through the accumulated amounts

Savings deposits are categorized according to different terms:time-deposit account and demand-deposit account

Time deposit account is a type of non-term savings deposit that customers send to banks without an agreement about the time of withdrawal.Customers can deposit or withdraw at any time They also can withdraw some or all of savings according to their requirements However, unlike personal accounts, senders are not entitled to bank payment services Mostofnon-term savings customers do not identify specific spending needs in the future, but they want to enjoy an interest rate during the maturity Although time-deposits are not considered as long-term capital sources, they are considered ascheap, relatively stable sources of capital Therefore, banks just use them for a longer term at a certain level Banks often pay higher interest rates for this type of depositthan that ofpayment deposits

The most disadvantage oftime-deposits are the volatility.Therefore the bank cannot use all this savings for its programs

Term savings deposit (demand-deposit accounts)

This is the type of saving in a bank based on an agreement on term, interest rate, payment method, etc For this type of deposit, the client is only withdrawn when it is due In fact, the bank can still respond if the customer needs to withdraw money before the maturity date with low interest rates (usually at the interest rate of demand deposits) or even no interest For banks, this is a stable source of capital for credit activities With this type of savings, the main purpose of the sender is profitability, so the interest rate issue is an important issue In order to serve the different needs of customers as well as their capital needs, the bank can apply regular term savings deposits (depositors only receive interest in each period)

Furthermore, it is possible to apply bonus savings with interest to encourage people to deposit their savings into the bank Banks also apply different savings deposit term to senders to choose the most suitable option for them (1month, 3 months, 6 months ) For each differentterm, the banks usually apply different interest rates and always ensures that: the longer the termis, the higher the interest rateis In addition, classification can be based on type of currency: local currency and foreign currency savings deposits

Savings deposit in local currency The bank mobilizes savings deposits in Vietnam Dong through various forms of mobilization for many purposes To commercial banks in Vietnam, mobilized deposits in VND accounts for high proportion, meeting the demand for bank's capital use

Savings deposits in foreign currencies

Besides mobilizing savings deposits in VND, the bank also mobilizes savings deposits in foreign currencies The amount of savings in foreign currency converted into VND also accounts for a large proportion in the bank's operations

The purpose of mobilizing foreign currency deposits of banks to meet international payment needs as well as foreign currency trading activities of customers and banks Currently, the bank's savings in foreign currencies are mainly USD or EUR

Commercial banks can mobilize residential deposits in the form of personal accounts for payment purpose Personal payment account is the type of account that the user has full rights to use within the balance as a customer can withdraw money at the counter or at an automated teller machine Personal payment account can be used to make payment via Bank The customer must comply with the bank's regulations and instructions during the payment process, and the bank must perform the liquidity as requested by the customer and will only be denied when the payment amount exceeds the current balance or illegal documents Deposits from customers via personal accounts are a source of funds that banks can get at low cost because depositors are willing to ignore some of the interest to obtain a liquid asset for easy use in payment Personal accounts create a premise for expanding payment operations through banks, reducing the widespread use of cash in the economy

From this activity, the bank will collect fees and change its revenue structure, diversify banking services However, there are also disadvantages arising from the use of this fund because of its low stability, completely dependent on business characteristics as well as customer credit Therefore, banks are less active in using this capital

1.3.4 Assessing activities of mobilizing residential capital of commercial banks 1.3.4.1 Quantitative goals

As mentioned in the above contents, we know that the capital mobilized from the population always accounts for a large proportion of the total mobilized capital of commercial banks and this is a relatively stable source of money Therefore, capital mobilized from the population is a major source of capital used by banks for lending and other investment activities to make a profit Thus, the mobilization of residential capital will directly affect the business performance of the bank

Therefore, banks always focus on controlling the amount of capital mobilized from the population

ACTUAL SITUATION OF MOBILIZING RESIDENTAL

Overview of Vietnam Joint Stock Commercial Bank for Investment and

2.1.1 Overview of Vietnam Joint Stock Commercial Bank for Investment and Development - Eastern HanoiBranch

BIDV was founded on 26 April 1957 under the initial name of Bank for Construction of Vietnam, then renamed Bank for Investment and Construction of Vietnam (1981 - 1990), Bank for Investment and Development of Vietnam (1990 -

2012), and Joint Stock Commercial Bank for Investment and Development of Vietnam (since 2012)

Joint Stock Commercial Bank for Investment and Development of Vietnam - Eastern HanoiBranch is a branch of Vietnam Joint Stock Commercial Bank for Investment and Development, established in 1967 with the name of Dong Anh Branch 4 The Dong Anh Branch 4was initially a branch of Hanoi Construction Bank (old), with only 10 employees at the beginning

The function of the branch was to carry out the allocation and lending management of works within the two districts of Hanoi: Dong Anh and Soc Son In

1983, it was split into Dong Anh Investment and Construction Department and Soc Son Bank Branch In 1987, it became the Dong Anh Investment and Construction Bank Branch Until 1990, the branch changed its name to Dong Anh Bank for Investment and Development and was the second level branch directly under the Bank for Investment and Development of Hanoi The branch is responsible for carrying out activities in the field of currency, credit and banking services with basic operations, including receiving deposits, granting credits and providing payment services

On November 28th, 2008, with the approval of BIDV Vietnam, Dong Anh Branch changed its name to Eastern Hanoi branch – a branch ofInvestment and

Development Bank under the decision of no.983/QD-HĐQT This had affirmed the broader operation and its new position in the area

On May 1st, 2012, the Board of Directors of Vietnam Joint Stock Commercial Bank for Investment and Development issued the Decision No 30/QD- HDQT on the establishment of branches and transactions under Vietnam Joint Stock Commercial Bank for Investment and Development Accordingly, Vietnam Bank for Investment and Development –Eastern Hanoi branch became Vietnam Joint Stock Commercial Bank for Investment and Development - Eastern Hanoi branch and hasofficially operated in the form of Joint Stock Commercial Bank under the registration certificate code 0100150619086 registered for the fifth change on August 16, 2012

Vietnam Joint Stock Commercial Bank for Investment & Development – Eastern Hanoi Branch is an active branch of BIDV Bank in the eastern area of Hanoi, this is a state-owned enterprise and functions as a commercial bank with following services:

• Card services: ATM cards, international credit cards

• Loans: Short-term, medium-term and long-term, import and export financing, consumer loans

• Payment for import and export

• Savings, deposits of economic organizations

• Insurance: Property insurance, damage insurance, construction and installation insurance, fire and explosion insurance, motor vehicle insurance with a large scope of operation and reasonable cost

According to Decision No 3166 / QD-BIDV dated November 30th, 2016 of the Board of Directors of Vietnam Joint Stock Commercial Bank for Investment and Development on approving the organization model of the Branch and promulgating regulations on main functions and tasks of Departments / Divisions, Transaction Offices, Branch At the request of Eastern Hanoi Branch, approving the organizational apparatus of Eastern Hanoi Branchincludes departmentsas illustrated in Figure 2.1:

Figure 2.1: Organization chart of Eastern Hanoi branch

The organizational structure of Eastern Hanoi Branch includes departments with the main tasks:

Corporate Department 1 Corporate Department 2 Corporate Department 3 Personal Department Corporation Transaction Office Personal Transaction Office Treasury & Service Department Financial Department

Credit management Department Risk management Department

Phu Lo Transaction Office Lien Ha Transaction Office

Duc Tu Transaction Office Soc Son Transaction Office

- Board of Directors: including 1 director and 3 deputy directors This is the highest leadership, directly manage all activities of the Branch in general and departments

+) Main tasks of the Corporate Department:

- Marketing services and developing business customer relationships;

- Trade finance operations and perform other duties as required by the Branch Director

+) Main tasks of the Personal Department:

- Sales of retail banking products and services

- Perform other duties as required by the Branch Director +) Main tasks of Customer Transaction Offices:

- Directly manage accounts and transactions with customers

- Implementing the prevention of money laundering for arising transactions in accordance with regulations of the State and BIDV; detect, report and promptly handle transactions with suspicious signal oil in an emergency

- Perform post-inspection for all accounting transaction activities at Customer Transaction Office

+) Main tasks of Treasury and Service Department:

- Directly perform operations on warehouse management and fund import / export Take full responsibility for ensuring the safety of treasury and monetary security, ensuring asset safety of Branches / BIDV and customers

+) Transaction Office: is the authorized representative of the Branch to carry out: Transaction Office is a book-keeping unit under the Branch, operating in the Hanoi area under the supervision of Branch Manager; has the function of carrying out the operations of mobilizing savings capital, lending customers as individuals, performing current payment services in the locality and operations related to deposit accounts of the legal

There are close relationships among departments at Eastern Hanoi Branch

The departments always support and coordinate with others to facilitate the smooth and organized process of implementing activities The internal working process of the Branch is carried out exactly like a chain where each department is a link

Although independent departments perform their own operations, there is always a link between the departments to work together to create a unified block throughout the branch The transaction offices are in many different locationswhich are not concentrated in the same location, but the operation is always linked to other departments and to the Branch to perform in the fastest way

Since its establishment, Eastern Hanoi branch operates in an upward trendwith high profit The branch always innovates to suit to the new economic context In order to survive and develop in the market economy, the Eastern Hanoi branch defines a strategic to integrate and to compete with many domestic and foreign commercial bank branches in Hanoi city The branch operates closely with the industry's orientation, and regularly reorganizes the bank structure in line with business objectives in each specific period With flexible monetary and credit policies according to the change of the monetary market as well as the development of the economy, the Eastern Hanoi branch has created a positionwith certain activities in the area andcreated the trust with customers Thus, the business activities are always effective the Eastern Hanoi branchin recent years has always been a key branch of BIDV, successfully completed the assigned tasks, contributed to the overall success of the BIDV system Some important business targets of the Eastern Hanoi branchare illustrated in Table 2.1

Table 2.1 Business operation of BIDV - the Eastern Hanoi branch in 2015 – 2018

6 Net income from services (exclude currency trading and derivatives) 47.39 72.42 25.03 52.82% 70.82 -1.6 -2.21% 88.4

10 Net income from card service 2.49 3.1 0.61 24.50% 13.73 10.63 342.90% 18

15 Bad debt ratio from retails 2.36% 3.04% 2.18% 1%

The above table shows that the branch's business results are always profitable in the period of 2015-2018 Pre-tax profit of the branch increases annually if 2015 EBT reached VND135.5 billion by 2016, the figure had reached 180.24 billion, up 33.02% compared to 2015 Until 2017, profit before tax reached 232.3 billion, up 28.8% compared with 2016 Expected profit before tax in 2018 reached 307.7 billion The main business activities have been increasingly expanded and achieved high efficiency, specifically:

Credit balance of the Branch has increased nearly 11 times, the average growth in the period 2005 - 2015 reached 28% / year Since 2015, credit growth has still ensured according to the plan but there has been a decrease compared to the previous period with an average growth rate of 17%

The orientation of credit operations of the Branch always follows the development orientation of the Head Office Besides maintaining and developing large enterprise customers, the Branch has strengthened the development of small and medium-sized enterprises, new retail customers Until now, the debt of this customers in the Branch currently accounts for 58% of the total debts

Actual situation of mobilizing residents’ capital activities at BIDV – the

In recent years, the world economy and Vietnam's economyaswellhave experienced many changes In addition, there is a fierce competition among commercial banks to attract idle capital in the economy BIDV – the Eastern Hanoi branch is not outside the above-mentioned impacts Table 2.4, table 2.5 and Graph 2.1 reflected some results of capital mobilization of BIDV – the Eastern Hanoi branch in the period from 2015 to 2018

Table 2.4 Capital mobilized in scaleofBIDV – the Eastern Hanoi branch in

(Source: Business Report of BIDV – The Eastern Hanoi Branch in 2015-2018)

Table 2.5 Residents’ capital mobilized in scaleofBIDV – the Eastern Hanoi branch in 2015-2018

Compared to total capital mobilized (%)

(Source: Business Report of BIDV – The Eastern Hanoi Branch in 2015-2018)

Graph 2.1 Annual resident’s capital mobilized in 2015– 2018

Table 2.4 and chart 2.1 have shown that the scale of population mobilization in the period of 2015-2018 saw a strong growth, with the average growth rate of the whole period reaching 28.7% 2016 marked the strongest growth with a growth rate of 55.55%, with the mobilized capital of VND 4,290 billion This 2016-year marked a strong shift in capital mobilization structure of BIDV – the Eastern Hanoi branch

Capital mobilization from residents became the main driving force in the total capital mobilization scale of BIDV, accounting for the largest proportion of capital mobilization compared to other mobilized components This is completely reasonable when BIDV in general and BIDV – the Eastern Hanoi branch are gradually shifting to the leading modern retail banking model in Vietnam

However, in the context of the volatile economy and fierce competition of banks in the area as well as other branches, the mobilization of capital from commercial banks for investment and development costs ofBIDV – the Eastern Hanoi branch has shown certain difficulties Although the mobilized capital has increased, the growth rate of the last 2 years has slowed In 2016, the growth rate was over 55%, in 2017, this figure was only 22.3%, and by 2018, it was only 10%

This figure reflects an increasingly competitive environment in banking services so people will have more choices Especially in the context of easily accessible information, it makes the level of competition in attracting capital from the residents become more severe

Residents’/tot al capital mobilized (%) Growth rate (%)

2.2.2 Structure of residential capital mobilization

Table 2.6 Capital mobilized in currency in 2015 – 2018

Amount (%) Amount (%) Compared to 2015 (%) Amount (%)

(Source: Business Report of BIDV – The Eastern Hanoi Branch in 2015-2018)

Graph 2.2 Capital mobilized in currency in 2015 – 2018

Table 2.6 and chart 2.2 have shown that the mobilized capital of the bank over the years of 2015-2018 is mainly domestic currency, foreign currency only accounts for a small proportion The proportion of resident mobilization in local currency always accounts for over 97%, especially in 2018, accounting for 98.3%

This reason is mainly due to the interest rate gap between VND and foreign currencies, causing the comparison of customers when sending money In fact, from September 28, 2015, the interest rate applicable to USD deposits of organizations (except for credit institutions and foreign bank branches) is 0% / year; The maximum interest rate applicable to personal deposits is 0.25%/year Therefore, customers tend to sell foreign currency to banks and deposit in local currency

Foreign currencies (converted into VND)

Table 2.7 Residents’ capital mobilized in terms of maturity in 2015-2018

(Source: Business Report of BIDV – The Eastern Hanoi Branch in 2015-2018)

Graph 2.3 Annual residents’ capital mobilizes in 2015– 2018

Deposit term greatly affects the proportion of each term in the total mobilized capital

Table 2.7 shows that short-term deposits always account for over 70% of the total mobilized capital from the residents Short-term deposits include time- deposits, demand-deposits and savings, loans with less than 12month terms In fact, non-term mobilized capital ofBIDV – the Eastern Hanoi branch has contributed greatly to the bank's business performance because this is the capital source with the lowest interest payment Although short-term capital is highly volatile, but due to large numbers, transactions (sending, withdrawing) occur regularly Therefore, the volatility of short-term capital does not cause too much concern about bank’s liquidity Trust and prestige are the competitive advantages of BIDV – the Eastern Hanoi branch in attracting demand deposits These advantagesare formed from the following factors: tradition, prestige and long-term prestige, modern technology, effective interest rate management regime, good service quality, appropriate service fee schedule, Besides, BIDV is a strong unit in payment by debit card products, ATM cards, Non-cash payment services

Digital banking services such as BIDV SmartBanking - are outstanding productswith many utilities, that enable customers to proactively carry out transactions, manage finance safely and quickly The convenient services of BIDV Smart Banking include: 24/7 money transfer, bill payment (electricity, telecom, air

More than 12m ticket, train ticket, hotel booking, tuition payment, cable TV ); Recharge (phone, buy game card, load e-wallet ), Online deposit / withdrawal, Online shopping

In addition, BIDV Bank Plus or the popular and widely used credit card products have also mobilized a large amount of idle capital in the population with low interest payment costs maintained in deposit accounts

BIDV's digital banking products have developed rapidly and are trusted by consumers On 11/29/2018, Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) has successfully passed hundreds of nominations to be in the Top 10 businesses voted by consumers at the program "Trust & Use Vietnam 2018” In 2017, the total number of new customers registering electronic banking services reached over 2 million, with an annual growth rate of over 35% It is expected that by the end of 2018, the growth rate will continue to have a strong increase The number of transactions via E-banking channel reached 44 million transactions The number of inter-bank money transfer transactions via electronic banking accounts for 45% of the total money transfer transactions to the BIDV system BIDV ranked No.1 in terms of quantity and value of transactions, accounting for 22.25% of the total trading volume of the whole market through NAPAS channel By the end of June 2016, BIDV had more than 14 million bill payment transactions on electronic banking channels, of which BIDV SmartBanking was the focus

The development of this form of mobilization not only enhances the mobilized capital at low cost but also contributes to promoting the implementation of the policy of non-cash payment development of Government

Besides non-term deposits, term deposits, especially term deposits and promissory notes, deposit certificates are an important additional source Due to high stability, term capital increases the capital utilization ratio, increases the ratio of medium and long-term capital investment BIDV – the Eastern Hanoi branch has applied many forms of mobilization to attract this capital source: saving term of 01 month, 02 months, 03 months, 06 months, 09 months, 12 months, , 60 months with different interest rates In addition, the branch also implements savings mobilization campaigns, issuing promissory notes and bonds with preferential interest rates according to the general guidelines of Joint Stock Commercial Bank for Investment and Development of Vietnam “Send a place, withdraw many places” process at any of BIDV's transaction points nationwide create favorable conditions for customers to deposit and withdraw money and thus contribute to eliminating the psychology of holding cash of residents, encourage them to send money to the bank Therefore, the deposit rate of residents with a term of over 12 months in BIDV – the Eastern Hanoi branch in recent years has been kept at a stable level, steadily growing along with the new growth rate of the Bank's capital mobilization

2.1.1.1 In terms of mobilized forms

Graph 2.4 Annual residents’ capital mobilizes in terms of form in 2015– 2018 a Common mobilization form

This is a form of mobilizing temporarily idle funds from residents as well as foreign citizens in Vietnam in VND and foreign currencies This type of savings has many flexible terms: non-term, 1 month, 2 months, 3 months, 6 months, 9 months,

12 months, 18 months, 24 months and greater than 24 months; For each term and different types of money, there will be an appropriate interest rate for customers to choose For term savings, if the customer does not withdraw both principal and interest at maturity, the interest will be credited to the original and transferred to the new term In this case, each term has an appropriate interest rate for customers to choose; The current interest rate will be applied to the new term With savings of 6

Promotion savings Valuable papers issuing months or more, the bank applies various forms of interest payment such as monthly interest payment, interest payment every 3 months

Table 2.8 Residents’ capital in terms of mobilized forms in 2015-2018

Compared to 2017 (%) Residents’ capital mobilized 3163 100 4920 100 55.5 6015 100 22.3 6617 100 10

(Source: Business Report of BIDV – The Eastern Hanoi Branch in 2015-2018)

When saving, customers will be granted a savings book by the bank

When customers need money before the maturity date, customers can use the savings book to mortgage, pledge, discount or withdrawal

Lending rate = interest rate on savings book + 2% / month minimum

When withdrawing capital before maturity, customers will enjoy the following interest rates:

+ If the real time deposit is less than 2/3 of the committed time, it will be entitled to a non-term interest rate

+ If the actual deposit time is more than 2/3 of the committed time, it will be entitled to 75% of the same period interest rate

Assessing activities of mobilizing residential capital at BIDV – the Eastern

Mobilizing residential capital at BIDV – the Eastern Hanoi branch plays an important role in mobilizing capital for the wholesystem Because ofhighly stable and long-term capital, the bank is focusing and learning about measures to boost to mobilize this capital source Therefore, the bank has achieved some remarkable achievements

Firstly, the fluctuation of each type of residential capital mobilization clearly shows the ability to attract capital according to each type of mobilization Most of the mobilized capital is mainly from normal savings

Secondly, capital mobilization and using always reflect a relationship Using capital to mobilize reasonably and maximizing income from the use of capital which has brought great profits to the branch This activity also contributes to ensuring income for over 170 employees throughout the branch Joint Stock Commercial Bank for Investment and Development of Eastern Hanoi Branch is always one of the leading branches in terms of profits in the BIDV banking system

Thirdly, BIDV – the Eastern Hanoi branch is gradually diversifying forms of mobilizing residential deposits The bank has diversified regular deposit terms with 21 terms, from non-term to 60 months or more, various forms of interest payment: advance interest payment, interest payment later, interest payment period (month or quarter); diversifying deposit types, in addition to VND deposits, the bank also mobilized deposits in EUR Besides, although it has just been implemented for 3 years, new forms of mobilization: step savings and promotion savings have really attracted the attention of customers Flexible principle withdraw is a type of attractive savings that meet the increasingly diverse needs of depositors This type gives customers different options to improve competitiveness with other financial institutions in mobilizing the amount of idle temporary capital of the population in economic development In addition to the strong growth in capital mobilized from the population, the dramatic change in capital structure, increasing proportion of medium and long-term capital, investment trust capital, and foreign currency capital is increasing, long-term foreign currency deposits increased highly, facilitating the expansion of medium and long-term credit activities of the branch in meeting the capital demand of the economy

Fourthly, in the process of operation, BIDV – the Eastern Hanoi branch is very interested in expanding its network So far, the branch network includes 04 transaction offices under the branch This facilitates the branch in expanding its market share

Fifth, the bank has flexibly used interest rate tools to attract residential capital

The bank has paid special attention to attracting medium and long-term funds to encourage residents to deposit in terms of more than 12 months In addition, the issuance of long-term deposit certificates, bonds of the Central Bank and promissory notes of Commercial Joint Stock Bank Investing and developing BIDV – the Eastern Hanoi branch with other credit institutions in the province also bring positive results for the branch

Sixthly, the bank's information system also developed rapidly, meeting the requirements of new service development of BIDV – the Eastern Hanoi branch All branches have implemented the IPCAS system in dealing with customers and internal transactions Safety and security for the system is implemented more seriously and regularly Therefore, ensuring safety in transactions has brought positive signals and created more peace of mind for customers when depositing money at BIDV in general and BIDV – the Eastern Hanoi branch

Seventhly, residential capital has a relatively high growth rate through

2015,2016, 2017 Especially, in 2016, the population capital was VND 4,920 billion, up 55.5% compared to 2015 Reach This result is due to the Joint Stock Commercial Bank for Investment and Development - BIDV – the Eastern Hanoi branch has done good customer and marketing work to keep traditional customers while attracting more new customers and current customers For traditional customers with big deposits, the BIDV – the Eastern Hanoi branch has always been given preferential policies such as on-the-spot transactions on cash and vouchers

Regarding the source of total mobilized capital and residential capital BIDV – the

Eastern Hanoi branch is one of the leading branches of Joint Stock Commercial Bank for Investment and Development of Vietnam

Although achieving good results, the mobilization of residential capital of Joint Stock Commercial Bank for Investment and Development – the Eastern Hanoi Branch still reveals some following problems:

Although the State Bank of Vietnam has allowed commercial banks to diversify deposits with various forms But attracting deposits into banks is not effective enough In 2015, foreign currency capital accounted for 2.5% of the total mobilized capital, the following years, it tended to decrease and by 2018 this figure accounted for only 1.7% of the total mobilized capital from residents That means, although capital mobilization products have been deployed in many forms of interest payment, these products have been failedin meeting the tastes and demands of customers

Moreover, the growth of capital scale tends to decrease year by year If the capital scale grew to 55.5% in 2016, by 2018, the capital mobilized from the population has only reached 10%, lower than the 12% growth of the total mobilized capital This problem needs to be improved in the future

Secondly: fluctuation of residential capital according to types of mobilization

+ The capital structure is not reasonable:The proportion of time-deposit and under 12-month depositare significant (accounting for over 82% of the total mobilized capital from residents); medium and long-term capital, despite some important changes, but still not enough to serve all the needs of medium and long- term capital use Short-term capital is excessive while medium and long-term capital is lacking

+ Volatility in the form of capital mobilization clearly reflects typical difficulties in 2018 when the growth rate in this year was lower than that in previous years Moreover, the form of mobilizing savings is increasing, leading to an increase in the cost of capital mobilization

Thirdly, cost of capital mobilization

Although the cost of capital mobilization is low, it contains a lot of interest rate risks When interest rates fall, customers will continue to maintain deposits with a maximum term of 36 months If the interest rate increases, the customer will settle the deposit and return it In this case, the same type of deposit product but the bank must pay a higher fee

+ Interest rate policy and procedures, inadequacies in deposit and withdrawal transactions: up to 55.6% of customers have not been satisfied and assessed that: the interest rate policy is not favorable for customers, processes and transaction procedures are inadequate

+ Interest rates have not been diversified due to being controlled by the ceiling interest rate of the State Bank of Vietnam

+ Large interest rate difference between foreign currency and VND On the one hand, foreign currency interest rates are controlled by state regulations On the other hand, banks do not have many preferential policies to attract capital sent in foreign currencies of the population

+ The scale of each capital mobilization is still low due to lack of customer strategy

+ The number of employees in the branch has mostly been trained but the number with basic and specialized qualifications only accounts for over 80%

SOLUTIONS TO DEVELOP RESIDENTS’CAPITALMOBILIZATION ACTIVITIESAT BIDV-THE

Future orientation of mobilizing residential capital activities at BIDV – the

3.1.1 General orientation for the development of BIDV – the Eastern Hanoi branch 3.1.1.1 Targets

Based on the socio-economic development target of Hanoi to 2020, the development strategy of the whole BIDV system until 2020 has been released In addition, there are a number of other legal bases including: Decision No 2886 / NQ-BIDV to improve the competitiveness of BIDV in the period 2015-2017, Decision No 4188 / NQ-BIDV to orient the goals and targets of business plan 2016

- 2018, Party Committee Decision ofthe Eastern Hanoi branch for 2015 – 2020 period on the actual operation of business with advantages and disadvantages along with existing resources On that basis, the Eastern Hanoi branch identifies objectives and orientations for the branch performance in period 2016 – 2018 period as follows:

- Continue to promote business activities towards important breakthroughs; improve business efficiency; promote profit generating sources to contribute to increasing labor productivity; develop operational scale associated with strict control of credit quality;

- BIDV – the Eastern Hanoi branch continues to be a Grade I Branch, a Major Branch of BIDV system BIDV – the Eastern Hanoi branchhas the best credit market share, capital mobilization and best services in the province

- Continue to focus on developing small and medium enterprises, residents; focus on increasing the scale and improving the operational efficiency of retail banks; striving to become one of the leading retail banks of BIDV in Hanoi

- Total assets: average growth of at least 20% / year

- Credit balance at the end of the period: average growth of at least 20% / year; comply with the guidance of BIDV system: "Discipline, quality, efficiency, safety and reasonable growth"

- Capital mobilization at the end of each period: average growth of at least 20% / year

- Net service revenue: average growth of at least 20% / year

- Extract 100% risk reserve according to debt classification

- Earning before tax: average growth of at least 20% / year

The general development orientation of BIDV Vietnam to 2020 is:

Mission: BIDV always accompanies, shares and provides the best, modern banking and financial services for customers; Commitment to bring the best value to shareholders; Create a professional and friendly working environment, create opportunities for career development and bring the benefits to all employees;

Become a pioneer bank in community development activities

About vision: To become the leading, effective and reputable Bank and Financial Group in Vietnam

Core values: Customer-oriented - Innovation - Professional, creative - Social responsibility - Quality, Reliability

Orienting the value of products and services: Leading the comprehensive solution to make a difference to attract target customers instead of just providing ordinary products like other banks in the market

With the strategy of developing mobilized capital - one of the top priorities of BIDV in the coming time, some criteria are set as follows: a Sustainable scale growth:

To 2020, BIDV aims to become Vietnam's leading commercial bank in retail banking and one of the top 5 banks with the most effective business activities in Southeast Asia; Provide the best, diverse, best quality retail banking products and services that fit into the target customer segments;

Having the leading market share and scale of Retail Banking in Vietnam

Retail customers in 2012 accounted for over 5% of the population (about 4.8 million customers) and are expected to account for over 8% of Vietnam's population (about 7.3 million customers) by 2020

Operating scale ranks among the top three retail banks in Vietnam in terms of retail credit, residential capital mobilization and retail banking services

Focus on building synchronously and completing customer mechanisms and policies towards target deposit customers In the customer policy, concretize policies for each target customer segment, continue to improve the FTP mechanism to promote the highest efficiency

Improving the quality and acumen in analyzing and forecasting the financial market, the consumer price index and commodity markets are closely related to the capital and deposit interest rates as gold and foreign currencies to have an effective management solution for capital management b Increasing long-term funds:

Continue to promote the mobilization of capital through long-term capital mobilization channels such as: Issuing medium and long-term valuable papers, commercial loans of foreign financial institutions, borrowing through framework agreements, borrowing medium and long-term capital structure by short-term reciprocal

Promote bond issuance (domestic and international) to increase medium and long-term capital sources and develop other capital mobilization products in the capital market

Strengthen cooperation with international financial institutions and government departments to receive government loans from international financial sources, international financial institutions

Improving the stability of capital resources in the direction of increasing the proportion of long-term mobilized capital, improving the balance of term between capital and capital use

3.1.3 Orientation for mobilizing residential capital at BIDV - Eastern Hanoi branch

Until 2025, Joint Stock Commercial Bank for Investment and Development of Vietnam –the Eastern Hanoi branch aims to maintain the leading strength of mobilizing residential capital in BIDV system; aims to maintain the position of the leading branch in the area of Dong Anh, Soc Son and surrounding areas for capital mobilization The strategy of mobilizing residential capital in the immediate period must be defined in the context of the stock market has been strongly operating along with the integration process of Vietnam into financial activities in the region and the world economy The branch needs to predict the economic development of the country, properly assess its strengths and weaknesses in the context of fierce competition among banks, not only in the country but also abroad In addition, the branch needs the general orientation and strategy of BIDV system to develop a strategy to develop the mobilization of residential capital

Major orientations in mobilizing residential capital of BIDV-the Eastern Hanoi branch:

- Maintaining an average growth rate of over 20% / year

- Determining the mobilization of residential capital is the primary key task of the branch and each employee at BIDV- the Eastern Hanoi branch

- Developing and implementing individual capital mobilization programs and legacy products

- Paying attention to cheap capital sources and to those with stable capital sources

- Diversifying customers to spread risks, create stability

- Improving customer service quality and product quality

Based on the actual situation at the branch, solutions to enhance the bank's mobilization of resident capital must be cored as following:

Firstly, constantly strengthening and improving the efficiency of the business network system to satisfy market demand, thereby increasing the demand for bank assets of customers, creating a motive force for mobilizing residential capital

Secondly, diversifying forms of mobilizing residential capital in business, maximizing the mobilization of idle capital sources in the population as well as economic organizations

Thirdly, modernizing technology to provide high-quality financial products and services to enhance reputation with customers, contributing to creating capital with appropriate scale and structure for use

Fourthly, build a strategy to mobilize residential capital that is suitable with the conditions of organizing the network, the level of competition in each market, thereby increasing the capital source at the same time with reasonable capital costs.

Solution to strengthen residential capital mobilizationBIDV – the Eastern

The bank needs to assess in detail, meticulously analyze and handle information on the density and structure of the total capital mobilized by the bank as well as competitors From the actual situation of the operating area (legal environment, social environment, residential psychology, competitive environment ), banks need to draw out objective or subjective difficulties encountering At the same time, the bank must accurately predict the capital needs to be used for business operations in the coming period Based on the actual amount of capital available, the bank will determine the required capital mobilization in the coming time On that basis, banks need to set up long-term strategies and specific tasks on capital mobilization

Capital mobilization plans must be derived from the following requirements:

- Tasks on banks' capital sources must thoroughly grasp the viewpoint of maximizing the bank's capabilities

- Pay attention to thoroughly exploit capital sources in any form, in many different channels.This is a long-term task and a solution for the current situation

- Associate the source generation strategy with the strategy of using resources in a synchronous, rhythmic and intimate relationship

Comment [Office8]: Sao lạicó firstly ở đây, secondly đâu? Ghépnội dung nàyvàogiảiphápcụthể, đừngđểchơvơ ở đây

- Establish measures to increase the proportion of time deposits of enterprises and increase the amount of deposits from the population strata to establish a stable working capital

3.2.1 Diversify mobilization forms and mobilized products

In addition to the forms of capital mobilization that are already available, the bank needs to research and come up with new forms of capital mobilization:

+ Researching new products on capital mobilization of other commercial banks Then, explore the market's reaction and specific characteristics of the branch to be able to apply for transformation at JSC Bank for Investment and Development of Dong Ha Branch

+ Conducting in-depth research on customer objects to clearly see the needs of each customer and create and implement several new forms of mobilization with reasonable costs that fit customers' demands

Currently, the bank needs to develop the following new product forms:

+ "One time sending - multiple withdrawals": This product is applied to investment projects or planned activities but must be done step by step with a certain amount of capital Initially, the customer may already have a large amount of capital available to cover the cost of the entire implementation process Then, in order to increase the profit, customers will send all the money to the bank to earn interest At the new stage, customers need to have a certain amount of capital to cover the cost and carry out that period, thus, the customer will withdraw the money to use The rest of the funds will be returned to the bank Therefore, banks can increase interest rates to attract more customers to deposit

+ "Multiple sending - once withdrawing": This product is applied to customers whose income is not high but stable These customers can monthly earn an extra income to save and use in the future If the bank uses the form of "multiple deposits - one withdrawal", it will reduce the procedure for customers when sending, thus attracting these customers Although the amount of money from each customer is not high, but the number of customers is numerous, so the amount of capital collected is large and stable

+ "Sending appointment for withdrawal": This is a form of deposit under agreement Customers will deposit money into the bank, until the they need money to use Before withdrawing, the customer will notify the bank before a certain period (according to the bank's regulations or the agreement of both parties) This product helps customers ensuretheir incomewhile commercial banks still actively plan their capital

+ "Saving at a transaction office - withdrawing at many transaction offices":

This product isapplied to customers who often travel For customers who often travel long distances, it isvery important and necessaryto withdraw money in many flexible offices

+ "Housing construction savings": The bank can lend to customers with the purpose of buying houses at agreed interest rates until the customer can pay the debt and the deposit balance has reached a certain level (compared to the bank's conventional value) For this product, the bank holds house papers until the customer pays off the debt

+ Life-saving: Older people often take care of themselves about the risks of uncertainties that occur when they are sick, take care of their children about daily life, etc Therefore, they often accumulate and save some money It iscertain to meet the needs of old age In facts, this form is a kind of life insurance

+ Juvenile savings: Our country is a country with a young populationwho do not have income.Instead, parents accept to send money to their children for learning, to get a job, That is one of the necessities of customers that commercial banks need to exploit

At the same time, each stage should have a plan for capital mobilization and that plan must be appropriate Therefore, at the beginning of each branch period, a clear plan for short-term and future capital mobilization must be established This plan is based on research on the potential of capital in the population, the capital needs of customers This plan will be the orientation for a series of next steps that BIDV – the Eastern Hanoi branch must implement, including setting appropriate deposit rates, determining capital mobilization

3.2.2 Solutions for flexible and competitive banking services 3.2.2.1 The interest rate policy needs to be flexibly applied

Prices always show the relationship between the interests of buyers and sellers in transactions, especially in banking business In banking business, the interest rate of mobilized products is the price of that relationship

Time-deposit are sensitive to interest rates With the interest rate schedule changing from time to time, banks can still apply the maximum interest rate for term deposits when banks need to increase the proportion so that interest rates apply to ensure the principle of "The longer the term, the higher the interest rate”

Through the application of interest rates for each type of deposits, the bank can adjust its capital structure to suit its asset portfolio to create opportunities to increase profits The bank needs to analyze the term structure of capital resources, forecast the volatility trend of interest rates to actively create a gap between interest- sensitive assets and interest-sensitive capital sources

The bank also needs to apply flexible interest rates, suitable for the market to maximize capital Pay attention to the competitive interest rates of other banks to change flexibly but still must calculate reasonable costs to ensure the implementation of the financial plan

On the other hand, banks also need to implement flexible and appropriate price policies in accordance with their interest rate policies Preferential prices are applied to important customers Long-term deposits can be obtained from negotiable interest rates or free services In addition, the bank can apply some other forms of promotion such as gifts on special occasions, such as celebrations, anniversary

Bank’s recommendations

One of the first requirements to ensure banking operations is a stable macro environment Commercial banks cannot mobilize many medium and long-term sources of capital because people have not trusted banks If the macro environment in which political, economic and cultural factors are stabilized, people will put their trust in the bank At that time, they will put their money and assets in the bank instead of buying gold or real estate The Government and the State Bank of Vietnam are responsible for managing the country so that the economic sectors operate in a smooth and effective manner The government and authorities must predict and protect the economy from major shocks At the same time, the government set out the direction of economic development, fully prepare elements for the developed economy, create the ventilation, facilitate the mobilization of capital of commercial banks In order to enhance capital mobilization, it is necessary to have a synchronous development of all components, facilities in the economy and a stable macro environment

Currently, we have the Law on Credit Institutions and the State Bank Law with many new regulations, many of which show progress in accordance with the situation, creating a favorable legal corridor for the operation of Credit institutions in the market economy However, with the requirements of innovation, promoting economic growth, implementing international integration programs, there are many provisions of the law that are no longer appropriate Circular 02/2013 / TT-NHNN dated January 21, 2013 effective from June 1, 2013 on debt classification and provision criteria are not close to reality In the context of economic difficulties, the criteria for classification of loans by qualitative and quantitative criteria do not reflect the debt nature of enterprises Some businesses have good financial situation and production and business activities, rated "3A" qualitatively but have a slow turnover (due to delayed repayment by the partner or delayed payment budget) If the credit institution extends its principal or interest, immediately the enterprise is classified as a bad debt with a period of at least 1-3 months

In fact, due to the socio-economic conditions of Vietnam, the tools on the money market and the open market operations are still limited and cannot meet the management and administration needs of monetary policy This practice raises the need to diversify trading instruments in the open market and money market operations so that the State Bank can be more flexible in using monetary policy management Associated with the mobilization of commercial banks, when rediscounting, the bank has only accepted short-term valuable papers Creating additional tools for the financial and monetary market, ensuring the role of the banking system to mobilize investment capital, to develop the economy and to ensure international economic integration is necessary

The thesis"STRENGTHENING THE RESIDENT’S CAPITAL

MOBILIZATION AT JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM (BIDV) - EASTERN HANOI BRANCH" has studied and solved the following issues:

Firstly, the thesis summarized the theoretical basis for mobilizing residential capital at commercial banks On that basis, the topic has given practical policies, applied to the practice of BIDV – the Eastern Hanoi branch

Secondly, the project has evaluated BIDV's operational efficiency in BIDV – the Eastern Hanoi branch in the period of 2015-2018 The data used are synthesized through the system of credit indicators and aggregated data about situation of mobilizing residential capital at banks In general, during the research period, the bank has fulfilled its planned targets and achieved some remarkable results in the context of economic recovery after the recession

Thirdly, the topic has found major factors affecting the efficiency of residential capital mobilization at BIDV – the Eastern Hanoi branch: Interest rate policy, process, procedures and style of customer care line There are also factors including: Restrictions such as marketing policies have not caught up with state- owned commercial banks, less flexible in collecting money at the place of depositors So, BIDV – the Eastern Hanoi branch needs to have many policies to improve service quality to quickly develop products and become a leading multi- functional retail bank in the field of banking and finance

The topic analyzed the capital mobilization situation of the bank based on the objective assessment of customers when using the service at the branch Since then, the dissertation has proposed some solutions for BIDV – the Eastern Hanoi branch

At the same time, the thesis proposes recommendations to the state management agency on economy, with the state bank and BIDV

Capital mobilization of the Bank is an important and challenging task of BIDV’s branch BIDV – the Eastern Hanoi branchneeds to be determined to comply with the policies set out to develop, to deserve to be the leading state-owned commercial bank in the Vietnam banking system./

1 Business reports of BIDV – the Eastern Hanoi branch in 2015, 2016, 2017, 2018

2 Balance sheet reports of BIDV – the Eastern Hanoi branch in 2015, 2016, 2017,

3 Capital mobilization reports of BIDV – the Eastern Hanoi branch in 2015, 2016,

5 Do Thi Hang, Pham Thi Huong Le (2012), "Discussing the issue of increasing equity capital of commercial banks today", Banking Magazine, (24)

6 French Bank Law (1941)Nguyen Dang Don (2008), Credit and Banking,

7 Law on Vietnamese Credit Institutions (2004), Chapter III

8 Luong Thi Quynh Nga (2011), Improving the efficiency of mobilizing deposits at Vietnam Export Import Commercial Joint Stock Bank, Master Thesis of Ho

Chi Minh City University of Economics

9 Nguyen Dang Don (2008), Credit and banking, Statistical Publishing House

10 Nguyen Minh Kieu (2009), Commercial bank transactions, Statistical

11 Nguyen Thi Mui (2008), Business Banking Curriculum, Finance Publishing House

12 Nguyen Thi Huong (2012), Some solutions to improve capital mobilization efficiency at Lang Son Joint Stock Commercial Bank for Industry and Trade,

Thesis Master, Ho Chi Minh City University of Economics

13 Nguyen Thi Thu Hang (2010), "Reconciliation and capital raising issues of

Vietnam Joint Stock Commercial Banks", Banking Magazine, (22)

14 Nguyen Van Tien (2009), Finance - Monetary Curriculum for Banks, Statistical Publishing House

15 Table of deposit interest rate in terms of mobilization form - Accounting department of BIDV – the Eastern Hanoi branch

APPENDIX SURVEY ON CUSTOMER’S EVALUATION ABOUT EFFECTIVENESS OF MOBILIZING RESIDENTAL’S CAPITAL AT BIDV

The Joint Stock Commercial Bank for Investment and Development (BIDV) – The Eastern Hanoi branch would like to thank our customers for your trust and choice to use our services

In order to improve service quality and better meet the customer below for the most appropriate option

We promise that the information provided by you will be kept confidential and will only be used for research purposes to better serve you

II.Customer’s response for the services of BIDV – The Eastern Hanoi Branch

2 Have you ever use the services ofBIDV– The Eastern Hanoi Branch?

3 Name of products or services used

1 Savings 2 ATM service 3 Payment account 4.Borrowing 5 Other

1 Excellent 2 Good3 Satisfactory 4.Poor5 Very poor

1 Excellent 2 Good3 Satisfactory 4.Poor5 Very poor

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1 Excellent 2 Good3 Satisfactory 4.Poor5 Very poor

1 Reasonable 2 Unreasonable->Need to increase:1 Working hour2.Working day

9 Waiting time to use service

1 Very quick2 Quick3 Normal4.Low5 Very low 9.1Deposit interest rate in compared to other banks

1 Too high2 High3 Normal4.Low5 Very low 9.2 Lending interest rate in compared to other banks 1.Too high2 High3 Normal4.Low5 Very low 9.3 Fee in compared to other banks

1 Too high2 High3 Normal4.Low5 Very low

13 Customer’s satisfactory level for the services of BIDV – The Eastern Hanoi Branch

1 Excellent2 Good3 Satisfactory 4.Poor5 Very poor

14 Comments (ifyes)for BIDV – The Eastern Hanoi Branch 1.Demand on new products and service(in detail)

2.Products or services which need to be improved (in detail)

3 Response of Customers who used to use the service of the bank:

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If possible, kindly lets us know your personal information

16 Business reports of BIDV – the Eastern Hanoi branch in 2015, 2016,

17 Balance sheet reports of BIDV – the Eastern Hanoi branch in 2015, 2016,

18 Capital mobilization reports of BIDV – the Eastern Hanoi branch in 2015,

20 Do Thi Hang, Pham Thi Huong Le (2012), "Discussing the issue of increasing equity capital of commercial banks today", Banking Magazine, (24)

21 French Bank Law (1941)Nguyen Dang Don (2008), Credit and Banking,

22 Law on Vietnamese Credit Institutions (2004), Chapter III

23 Luong Thi Quynh Nga (2011), Improving the efficiency of mobilizing deposits at Vietnam Export Import Commercial Joint Stock Bank, Master Thesis of

Ho Chi Minh City University of Economics

24 Nguyen Dang Don (2008), Credit and banking, Statistical Publishing

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Comment [Office9]: Danhmụctàiliệuthamkhảos ắpxếptheotrậttựabc Nênnhớcầnthựchiệntríchdẫncáctàiliệuthamkhảothe ođúngquyđịnh

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