Report subject money and capital markets topic commercial bank

TON DUC THANG UNIVERSITY FALCULTY OF BUSINESS ADMINISTRATION REPORT Subject Money and Capital Markets Topic COMMERCIAL BANK Lecturer Do Thi Thanh Nhan Group 02 Group members To Vu Minh Chau Phan Tu Qu[.]

TON DUC THANG UNIVERSITY FALCULTY OF BUSINESS ADMINISTRATION REPORT Subject: Money and Capital Markets Topic: COMMERCIAL BANK Lecturer: Do Thi Thanh Nhan Group: 02 Group members: To Vu Minh Chau Phan Tu Quyen Dinh Quang Hiep Nguyen Tran Dong Quan Major: International Business HCMC, 10th December , 2022 GROUP’S MEMBERS No Name Tô Vũ Minh Châu Student ID 720K0935 Phan Tú Quyên 720K0942 Đinh Quang Hiệp 720K0857 Nguyễn Trần Đông Quân 720K0982 Division work  Present  Summarize the report  Conclusion  Introduction  Chapter  Chapter  Powerpoint  Present  Present  Chapter  Present  Chapter Percentage 100% 100% 100% 100% CONTENT INTRODUCTION .5 CHAPTER 1: GENERAL INTRODUCTION OF VIETNAM COMMERCIAL BANK SYSTEM 1.1 Definition of commercial bank 1.2 How does a commercial bank make money? 1.3 Function 1.3.1 Primary Functions 1.3.2 Secondary Functions 1.4 Types of commercial banks 1.4.1 Public Sector Banks .8 1.4.2 Private Sector Banks 1.4.3 Foreign Banks 1.5 Types of loans offered by commercial banks 1.5.1 Term loan .9 1.5.2 Bank Overdraft facility 1.5.3 Letter of credit .9 1.5.4 Bank Guarantee 1.5.5 Lease Finance 1.5.6 SME collateral-free loan 10 1.5.7 SME credit card 10 1.5.8 Commercial vehicle loans 10 1.6 Regulation by Central bank 10 1.7 SWOT analysis 11 1.7.1 Strengths 11 1.7.2 Weaknesses 11 1.7.3 Opportunities .11 1.7.4 Threat 11 CHAPTER 2: THE IMPORTANCE, THE ADVANTAGES, AND DISADVANTAGES OF COMMERCIAL BANK 12 2.1 The importance of commercial bank 12 2.1.1 Role of commercial banks in economic development .12 2.2 The advantages and disadvantages of commercial bank 13 2.2.1 The advantages of commercial bank .13 2.2.2 The disadvantages of commercial bank 14 CHAPTER 3: TOP OF THE BEST COMMERCIAL BANKS AND ANALYSIS OF THE BEST COMMERCIAL BANK IN VIETNAM 2022 .16 3.1 Top commercial Banks in Vietnam 2022 16 3.2 Analysis of Vietcombank commercial bank, Vietcombank South Sai Gon branch 16 3.2.1 Organization Structure 18 3.2.2 Capital analysis .21 3.2.3 Credit operations .22 3.2.4 Business report 23 CONCLUSION .25 REFERENCES 26 APPENDIX 28 INTRODUCTION The banking industry consists of systems of financial institutions known as banks that assist people in storing and using their money Banks allow customers to open accounts for a variety of purposes, such as saving or investing money The banking industry is also beneficial to the economy because it provides resources for individuals, families, and businesses to use for transactions and investments One way the banking industry accomplishes this is by organizing and distributing loans to applicants for purposes such as purchasing real estate, starting a business, or financing a college education In the banking industry, there are many different types of professionals, each of whom serves a specific purpose in managing people's money Bank tellers, for example, can assist customers in opening and closing accounts, making deposits and withdrawals, and setting up recurring payments for other services A mortgage consultant is another type of baking professional who can assist individuals and families in applying for mortgages that allow them to purchase real estate Similarly, a credit analyst at a bank can examine a client's credit to determine whether they are a good candidate for a loan While the banking industry remains a constant in society, it changes as new trends emerge One of the most popular current banking trends is the use of online banking, which allows account holders to access and manage their funds from home via computer A closely related trend is the rise of mobile banking, which allows users to access their bank accounts via mobile devices Both of these trends are related to technological advancements that assist the banking industry in improving its processes The rise of investment banking is another widespread trend in the banking industry Investment banking is a service in which banking professionals advise their clients on where they should invest their money Investment banking is becoming increasingly popular as a result of advancements in artificial intelligence and automated banking processes Many people use investment banking to inform their investment decisions while also saving money on professional advice because many investment banking tasks can be automated Through a brief introduction to the banking industry, we can see that there are many types of banks in the banking industry Among the types of banks, my team chose commercial banks as the topic of this report CHAPTER 1: GENERAL INTRODUCTION OF VIETNAM COMMERCIAL BANK SYSTEM 1.1 Definition of commercial bank A commercial bank may provide its customers with loans, certificates of deposit, savings accounts, overdrafts, and other banking goods and services Financial institutions earn a profit by lending customer money and collecting interest Commercial banks provide loans for companies, autos, residences, people, and even colleges.  Deposits made by customers in various accounts are used to fund loans Deposits are utilized to finance loan offers A country's economy must have access to commercial banks because of their role in developing new forms of money, credit, and market liquidity While the majority of these organizations are still located in metropolitan areas, their digital equivalents are becoming more prevalent 1.2 How does a commercial bank make money? Commercial banks provide typical banking services to individuals and small to medium-sized enterprises on behalf of the general public Banks make income via fees for customer service and other levies Fees that may be incurred include, but are not limited to, overdraft charges, safe deposit box fees, late payment penalties, and so on In addition to interest, other loan-related expenses may be incurred Profits are generated by banks via the issuance of loans using the funds deposited with them Banks earn more money from client deposits than from the interest they charge on loans they provide For example, a bank may give 0.30 percent yearly interest on savings accounts but 4.80 percent on mortgages Typically, commercial banks are headquartered in structures that provide customers with access to tellers and automated teller machines Since the introduction of faster and more dependable internet connections, the majority of banks now provide their clients the opportunity to complete the vast majority of their banking operations online People may now send money transfers, make deposits, and pay bills online 1.3 Function 1.3.1 Primary Functions Accepting Deposits – Commercial banks accept deposits from their customers in the form of saving, fixed, savings rent deposits.  Savings Deposits – Savings deposits allow a customer to credit funds towards their ato for up to a certain limit These deposits are preferred by individuals with a fixed income, utilized to create ate savings over time Fixed Deposits – Fixed deposits come with a predetermined lock-in period Fixed deposits are also referred to as time deposits as the funds are deposited for a specific time frame Current Deposits – Current deposits allow account holders to deposit and withdraw money whenever necessary In some cases, current accounts also offer overdrafts until a pre-specified limit to individuals and businesses Providing Loans – One of the main functions of commercial banks is to provide credit to organizations and individuals, and profit from the earned interest Usually, banks retain a small reserve for their expenses while offering the remaining amount to customers as various types of short and long-term credits Credit Creation – A unique function of commercial banks is credit creation Instead of offering liquid cash, banks create a line of credit and transfer the loan to a business or commercial body all at once Categories of Secured and Unsecured Loans provided by Commercial Banks Cash Credit – Commercial Banks and their Functions include extending advances to individuals and organizations against bonds, inventories, and other types of securities This facility, commonly known as cash credit, provides a more substantial sum when compared to other forms of credit Short-Term Credits – Short-term loans are usually pledged without any security, offering a smaller loan amount and repayment tenor These are also referred to as personal loans 1.3.2 Secondary Functions Providing locker Facilities – To ensure the security of their customers' valuables, commercial banks often install lockers within the banking premises There is no need to worry about theft or loss when storing belongings in a locker because of the facility's security measures Dealing in Foreign Exchange – Commercial banks facilitate the provision of foreign exchange to exporters and importers of goods However, only authorized foreign exchange-trading banks can engage in such deals.  Exchange of Securities – The purchase and sale of bonds and other securities is an additional service provided by commercial banks Customers find it most convenient to deal with the financial institution on their own when purchasing or selling a unit Discounting Bills of Exchange – Currently, discounting business invoices is the principal service provided by commercial banks By discounting bills, financial firms may profit Because bills are considered negotiable documents, they provide a continual flow of cash without the risk connected with payment In none of these instances is the financial institution required to participate in a lawsuit.  Bank as an Agent – Commercial banks serve as agents in the financial industry by providing a variety of services to their clients, one of which is helping consumers manage their money Common components of such services – Managing an estate on behalf of a client as their administrator, trustee, or executor Helping customers with their tax returns, refunds, and related tasks. Facilitating the transaction of dues, loan payments, etc Providing a medium for the transmission of financial data electronically; this includes the processing of payments (such as checks, drafts, and invoices) 1.4 Types of commercial banks To explain how commercial banks work, it is helpful to first familiarize oneself with the many other sorts of financial organizations In general, three distinct varieties of commercial banks exist Here are the items: ·  Government banks ·  Private sector banks ·  Regional rural banks 1.4.1 Public Sector Banks Banks that are owned by the state, or the public sector, are referred to as "public sector banks." The government has a significant stake in such groups The Reserve Bank of India, the country's central bank, is responsible for establishing policy for the country's public sector banks 1.4.2 Private Sector Banks Banks operating in the private sector are often limited liability firms The major part of the share capital of such companies is owned by individuals or private businesses 1.4.3 Foreign Banks Banks that are based outside of the country's borders are said to be foreign banks There was a dramatic growth in the number of international banks operating in India after the country's financial reform in 1991 They are crucial to a country's economic growth There are commercial banks that provide loans and take deposits, and there is the Central Bank, which is the ultimate authority when it comes to financial institutions The commercial banking system is regulated, interest rates are determined, and the economy's monetary supply is managed by the Central Bank This financial institution does not interact with the general public in the same way as commercial banks when it comes to offering banking services As a result, the public will never get assistance from the Central Bank on par with that from private banks 1.5 Types of loans offered by commercial banks 1.5.1 Term loan A term loan is any loan given to a business with a predetermined payback duration It is payable monthly or quarterly and has a set interest rate There are both secured (where the collateral is provided) and unsecured (where no collateral is provided) term loans A secured term loan will often have a cheaper interest rate than an unsecured loan 1.5.2 Bank Overdraft facility A Bank Overdraft Facility refers to the capacity to draw cash more than is available in the company's current account Before a facility is sanctioned, the amount of the facility and the interest rate on overdrafts are normally agreed upon Since the overdraft may be paid back with the next deposit, it is considered a short-term source of financing 1.5.3 Letter of credit A letter of credit is an agreement between a buyer and a bank wherein the bank guarantees payment to the seller under specified conditions Because of this provision, as long as the services are provided, payment will be given (usually the dispatch of goods) Therefore, a Letter of Credit ensures the vendor will be paid as promised Financing via a third party is a common practice in international commerce, especially when the parties involved are unfamiliar with one another 1.5.4 Bank Guarantee A bank guarantee is a written promise by a bank to pay a specified quantity of money to a beneficiary during the guarantee's validity term if the beneficiary presents the bank with a letter of guarantee issued on behalf of the customer The circumstances under which a guarantee may be called upon are often spelled out in a guarantee letter A line of credit would have been paid out regardless of whether or not the other party fulfilled their contractual responsibilities, but in this case, payment would only be made if the other party breached the terms of the contract To protect one party from financial loss in the event of the other party's breach of contract, a bank guarantee is often employed 1.5.5 Lease Finance Lease Financing is a cutting-edge form of financing that allows borrowers to use and benefit from specific assets for medium- to long-term periods fix payments Lessor (financial institution) acquires and takes title to the property Lessor would have earned interest on the rentals or installments paid by Lessee, and Lessor would have recovered a large portion (or all) of the initial cost of the identified asset at the end of the leasing period Lessee may purchase the asset at the end of the lease term by making the final rental or installment payment, or by agreeing to a purchase price with the lessor As long as the lease is in effect, the lessor (finance company) retains full ownership of the leased property In any case, the lessee has the management of the asset and uses it as necessary 1.5.6 SME collateral-free loan This is generally a business loan issued to SMEs and is collateral-free or without a third-party guarantee Here the borrower is not obliged to offer collateral to receive the loan It is made accessible to SMEs in both the start-up as well as current stages to fulfill working capital needs, acquisition of machinery, and support growth ambitions However, it needs to be mentioned that small enterprises dealing in retail trade are not eligible for this sort of loan Loans are available for the purchase of both new and used construction equipment, including but not limited to excavators, backhoe loaders, cranes, and highend machinery Loan terms may range from 12 to 60 months in length, depending on the specifics of the agreement and the borrower's ability to make monthly payments In most cases, the machine itself serves as collateral for the loan 1.5.7 SME credit card Cash Credit and Term Loan - type Small and Medium-Sized Enterprise Credit Cards are offered, with credit limits of up to 10 Lakhs Small factories, stores, businesses, and shipping companies may all benefit from this lending program Cash Credit has a 3-year payback term, whereas Term Loans have a 5-year term 1.5.8 Commercial vehicle loans Commercial vehicle loans can be used to finance the purchase of any commercial vehicle, including trucks, buses, tippers, and even light commercial vehicles Loan terms may range from 12 to 60 months in length, depending on the specifics of the agreement and the borrower's ability to make monthly payments Companies with over years of operating history, the current owner of at least commercial vehicles, captive customers, and transporters are eligible for this loan facility 1.6 Regulation by Central bank In every nation, commercial banks are subject to regulation from a variety of government bodies Commercial banks are subject to oversight and regulation by central banks, which helps assure compliance with the law on the part of the commercial banking sector A minimum bank reserve is the amount of money that a bank is required to keep on deposit with the central bank to fulfill the standards set out by the regulatory 10 them However, it may also occur as a result of poor economic health, such as during a recession, when customers withdraw more than they borrow  Online fraud risk: Growing digitization has not only simplified operations but also given rise to online fraud Cyber attacks have become more common and frequent in recent years; ATM cards are more vulnerable to theft, and hackers hack digital payment accounts and passwords and steal money online There is an urgent need to improve the internet banking game To summarize, commercial banks are a critical component of the entire banking system In addition, commercial banks' economic outlook is gradually improving over time Commercial banks in less developed countries provide a well-organized financial market by providing financial assistance and meeting the financial needs of individuals, firms, and businesses 15 CHAPTER 3: TOP OF THE BEST COMMERCIAL BANKS AND ANALYSIS OF THE BEST COMMERCIAL BANK IN VIETNAM 2022 3.1 Top commercial Banks in Vietnam 2022 Figure Top 10 prestigious Vietnamese commercial banks in 2022 The best Vietnamese commercial banks in 2022 were officially revealed on June 29, 2022, by Vietnam Report Joint Stock Company (Vietnam Report) This is an annual activity researched and published by Vietnam Report since 2012 And in early August, Forbes announced the list of the Top 50 best-listed companies in Vietnam in 2022, in which the banking industry has representatives: Vietcombank, Vietinbank, BIDV, VIB, ACB, MB, and TPBank Accordingly, the Top Vietnamese commercial banks in 2022 include the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank); Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank); Vietnam Technological and Commercial Joint Stock Bank (Techcombank); Military Commercial Joint Stock Bank (MB); Vietnam Prosperity Joint Stock Commercial Bank (VPBank) 3.2 Analysis of Vietcombank commercial bank, Vietcombank South Sai Gon branch Vietcombank's full name is the Joint Stock Commercial Bank for Foreign Trade of Vietnam, which came into operation in 1963 The predecessor 16 of the organization was the Foreign Exchange Department, under the State Bank of Vietnam This is also the first unit selected by the Government to pilot the equitization model Therefore, in 2008, Vietcombank changed to a joint stock commercial bank In 2009, shares with stock code VCB were officially listed on the Ho Chi Minh City Stock Exchange Up until this point, Vietcombank has evolved into a bank with many different functions Customers can access all financial services, including project financing, credit, and capital raising, here The Autobank system, which has more than 2,500 ATMs and more than 60,000 card payment merchants nationally, was also used to promote the e-banking service segment The company also consistently receives votes for "Best Bank in Vietnam" and is listed in The Banker Magazine's list of the Top 500 World's Leading Banks In addition, Vietcombank is the only company from Vietnam to appear in Forbes' list of the Top 1,000 largest publicly traded firms in the world The Vietcombank South Sai Gon branch was founded on January 10, 1993 After 29 years of development, Vietcombank South Sai Gon has so far proved to be much more durable despite encountering challenges and issues as well as significant changes Located in Tan Hung ward, district 7, Ho Chi Minh City, at the dawn City building, 23 Nguyen Huu Tho street The second-largest branch in the Ho Chi Minh City region and one of the top branches in the Vietcombank system is Vietcombank South Sai Gon This branch has more than 250 staff and 18 departments as of right now, expanding to an increasingly larger extent (including transaction offices) The branch's business performance has consistently ranked among the top 10 in the Vietcombank system, and it has earned praise for its many professional accomplishments as well as participation in social activities, befitting its position as the area's leading branch       Transaction name: Joint Stock Commercial Bank for Foreign Trade of Vietnam – Saigon South branch Branch address: Him Lam new urban area, Sunrise City building No 23 Nguyen Huu Tho-Tan Hung ward-district 7-Ho Chi Minh City Tax code: 01002437.003 Director: Nguyen Nhu Tuong Phone number: 028 3770 1634 Fax Number: 028 3770 1635 Vietcombank South Saigon branch currently has transaction offices and branch office:  Branch office 17       Tan Thuan Transaction Office Tan My Transaction Office My Toan Transaction Office Phu My Hung Transaction Office Transaction Office District Trung Son Transaction Office 3.2.1 Organization Structure Time stamps: 3:48 - 4:39,   6:00 - 6:30,   7:25 - 8:33,   9:32 - 10:26  The organizational chart of Vietcombank is as follows: Figure Organizational chart of Vietcombank The Management structure provided by Vietcombank contains three levels of leadership and management, along with various departments and professional blocks: 18 Figure Management Structure The organizational chart of Vietcombank South Sai Gon branch is as follows: 19 Figure The organizational chart of Vietcombank South Sai Gon branch The organizational structure is divided into several departments, divisions, and blocks to strictly control the process and regulations of currency trading:       Branch Managers and Deputy Directors are the leaders that oversee and direct the development of the bank branch Business department: finding customers, developing markets, and providing financial operations services Service department: provides management of banking services Consulting or providing services, answering customers' questions, and handling complaints related to the service Risk department: identification, measurement, and analysis is an assessment of risks related to financial activities From there, take professional measures to overcome and limit risks as much as possible Support department: serving and supporting other departments with paperwork, healthcare, technology as well as people management Credit Council and internal inspection: assess the business situation, prepare reports and check, review the steps taken properly and in accordabyations with the foreign trade bank as well as the provisions of the law and state bank Organizational features:  Functional online organizational structure  Leveraging the capabilities of departmental managers 20 ... (Vietcombank); Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank); Vietnam Technological and Commercial Joint Stock Bank (Techcombank); Military Commercial Joint Stock Bank. .. Prosperity Joint Stock Commercial Bank (VPBank) 3.2 Analysis of Vietcombank commercial bank, Vietcombank South Sai Gon branch Vietcombank''s full name is the Joint Stock Commercial Bank for Foreign... multinational banks and foreign investment firms 11 CHAPTER 2: THE IMPORTANCE, THE ADVANTAGES, AND DISADVANTAGES OF COMMERCIAL BANK 2.1 The importance of commercial bank 2.1.1 Role of commercial banks