UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Huynh Dao Duc UNCERTAINTY ABOUT PROCESSES AND REGULATIONS OF CREDIT OFFICERS AT ORIENT BANK MASTER OF BUSINESS ADMINISTRATION[.]
UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Huynh Dao Duc UNCERTAINTY ABOUT PROCESSES AND REGULATIONS OF CREDIT OFFICERS AT ORIENT BANK MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2019 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Huynh Dao Duc UNCERTAINTY ABOUT PROCESSES AND REGULATIONS OF CREDIT OFFICERS AT ORIENT BANK MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Nguyễn Thị Mai Trang Ho Chi Minh City – Year 2019 EXECUTIVE SUMMARY In 2018 marked the milestone of 10 years since the global financial crisis took place and contrary to previous expectations, the world economy slowed markedly Global growth is estimated to increase by only 3.1% - lower than the previous forecast of 4% - due to escalating and prolonged trade war between the US and China In addition, the monetary policy of the State Bank also began to tighten Facing the challenges of the world situation, Vietnam still has a quite successful year, namely: GDP (Gross domestic product) growth of + 7.08%; inflation is well controlled with average annual CPI (Consumer price index) of 3.54%; The stable economic environment has helped attract a large amount of foreign investment in 2018 The banking sector continued to prosper in 2018 with the general trend of profit exceeding the plan, declining NPLs (Non-performing loan), controlled credit increased by 14%, exchange rate and market interest rates were kept stable thanks to policies active, flexible and effective currency Big banks such as Vietcombank, Techcombank, BIDV, Vietinbank have positive operating results in 2018 with high profits through promoting many associated service activities to promote business, paralleling that, increasing strengthening the quality of banking services Also in 2018, OCB achieved many successes with revenue and profit growth over the years from 2015 to 2018 Many prestigious awards for banks such as Vietnam Outstanding Banking Awards 2018, Most Innovative Digital Bank Vietnam 2018 and Best New Omni Channel Platform in Vietnam It shows that OCB is constantly improving and improving the quality of services and technology to meet the market's demand in the best way However, besides, there are still a number of problems that have significant impact on the quality of lending services of OCB, partly affecting the satisfaction of customers when using the service, that making the results of business profit of OCB not really achieved as expected Research results show that business activities affected by human factors as credit officers when working with customers are still lacking in knowledge processing skills for ineffective customers to play the role Important in the outcome of the set target bank In addition, some reasonable solutions are proposed to solve problem to improve the service quality of OCB in order to improve the professional quality of credit officers, promote business growth strongly ACKNOWLEDGEMENT In the process of researching the topic, I have received the encouragement, guidance and support of Professor Nguyen Thi Mai Trang and other teachers, in order to complete the implementation of the entire master's degree project I want to send my appreciation to my mentor It was a pleasure working with her in this project I want to thank my friends and family for supporting me a lot while I was studying Your patience, understanding and respect have been greatly appreciated I sincerely thank: - Board of Directors, Professor Nguyen Thi Mai Trang and lecturers and supporters at ISB - Family, friends, colleagues encouraged, cheering and help me during the past time Although there have been many attempts during the process of implementing the topic, there may be limitations and shortcomings I look forward to receiving comments and advice from teachers TABLE OF CONTENTS Executive summary…………………………………………………… ………….1 Acknowledgement ……………………………………………………… ….….…3 List of Tables ………… ……………………………………………….….………6 List of Figures…….……….…………………………………………… …………6 Introduction……….…… …………………………………………… ……… Symptom analysis……………………………………………………………….9 Problems analysis…………………………………….…………………………16 3.1.Potential problems……………………………………… ………………… 16 3.1.1.Criteria for assessing loan service quality……………… ………………….16 3.1.2.Criteria for evaluation of distribution network…………………….… …….20 3.2 Problem validation …………………………………… ………….………….22 Cause analysis……………………….…………………………….…………….24 4.1 Potential causes…………………………… ……………………….…….… 24 4.1.1 Lack of support from leaders and organizations…………………… ….… 24 4.1.2 Processes and regulations are overlapping and inconsistent…… … …… 25 4.2 Cause validation……………………………………………………… … …27 Alternative solution………………………………………………………….….28 5.1.The first alternative solution: simplify the system of regulatory documents 30 5.2.The second alternative solution: Contribute comments from relevant departments for regulatory documents issued in the system …….….…32 5.3.The third alternative solution: Hire an independent consulting firm to issue regulations……………………………………………………………….35 5.4.Justification solution………………………………………………………… 36 Organization of action ………………………………………………………….37 Conclusion………………………………………………………………………40 Supporting information…………………………………………………………41 Interview description ………………….………………………………… ………42 Questionnaire……… … ……………………………………………….… ……49 Interview transcript………….………………………………………….………….51 Reference… …………………………………………….……………… ………72 Appendix………………………………………………………………….……….74 LIST OF TABLES Table 1: Table of business profit results of OCB compared the plan in 2018 Table 2: Table of results of lending and capital mobilization activities in 2018 LIST OF FIGURES Figure 1: OCB organizational structure Figure 2: The reason why customers are satisfied when using loan service at OCB Figure 3: Evaluate transaction system conveniently, safely, accurately Figure 4: Evaluate level of information security control Figure 5: Customer satisfaction on information of business activities publicly and transparently Figure 6: Customer satisfaction level of bad debt of OCB is consistent with the government's proposal Figure 7: Customer satisfaction on diverse, suitable and responsive business products Figure 8: Customer satisfaction on transaction processing time Figure 9: Customer satisfaction on transaction process Figure 10: Customer satisfaction on enthusiastic, friendly of customer service Figure 11: The level of satisfaction of you about the transaction location of OCB Figure 12: Transaction location network of commercial banks Figure 13: Fish bone chart on the main problem - the cause Figure 14: Cause – and – effect tree INTRODUCTION Name of Bank: Orient Commercial Joint Stock Bank (OCB) Head office: 41 - 45 Le Duan, Ben Nghe Ward, District 1, TP Ho Chi Minh Phone: (84-28) 3822 0960 - 3822 0962 - Fax: (84-28) 3822 0963 Website: www.ocb.com.vn License No 0061 / NH-GP dated April 13, 1996 issued by the State Bank of Vietnam Charter capital: VND 6,599,000,000,000 Business Registration Certificate: No 0300852005 issued by Ho Chi Minh City Department of Planning and Investment for the first time on May 10, 1996, registered for the 31st change on December 26, 2017 Founded on 10.06.1996, OCB has nearly 200 business units at 120 transaction points present in all cities and key economic regions throughout the country OCB has affirmed its leading position in the foundation of modern technology, loved brand Continuously for many years, OCB has twice the growth rate of the industry average, the bad debt rate is always controlled with a low level, ensuring high and stable safety indicators The year of 2017 is considered a successful year of OCB with impressive profit of over VND 1,000 billion; ranked B2 by Moody’s (one of the three most prestigious credit rating firms in the world) - the highest level of commercial banks in Vietnam OCB also announced that the first Vietnamese bank announced the completion of Basel II project implementation On March 19, 2017, OCB was also the first bank to deploy digital banking services on the Omni-Channel platform With the foundation already prepared, OCB will continue to implement the strategic objectives to affirm the best Banking group in Vietnam with good business efficiency, good asset quality and intelligent management system transparent, complying with the regulations of the State Bank and towards international standards Figure 1: OCB organizational structure (Source: OCB, 2019 (14)) Enterprise customer relations department (credit officer) is a subordinate sales team of CB and SME centers of business units within the enterprise customers and micro- Enterprise customers (business block) Operation of the sales team is to set up marketing plans and exploit customers according to each specific region and locality; Developing new customers, selling products and services on mobilization, credit, services and consulting, solving customer requirements; Take care and maintain existing customers Managing business customers on business operations; Besides, participating and designing to build content on policies, procedures, guidelines and promotions for products and services for enterprise customers The operation of the Credit Management Division is to conduct appraisal, evaluation and control of ...UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Huynh Dao Duc UNCERTAINTY ABOUT PROCESSES AND REGULATIONS OF CREDIT OFFICERS AT ORIENT BANK MASTER OF BUSINESS... Lack of support from leaders and organizations…………………… ….… 24 4.1.2 Processes and regulations are overlapping and inconsistent…… … …… 25 4.2 Cause validation……………………………………………………… … …27 Alternative... Customer satisfaction on enthusiastic, friendly of customer service Figure 11: The level of satisfaction of you about the transaction location of OCB Figure 12: Transaction location network of commercial