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NATIONAL ECONOMICS UNIVERSITY EXCELLENT EDUCATIONAL PROGRAM BACHELOR''''S THESIS Expanding Consumer Lending at Joint Stock Commercial Bank for Foreign Trade Of Vietnam Transaction Center Branch Chu Thi T[.]
NATIONAL ECONOMICS UNIVERSITY EXCELLENT EDUCATIONAL PROGRAM BACHELOR'S THESIS Expanding Consumer Lending at Joint Stock Commercial Bank for Foreign Trade Of Vietnam Transaction Center Branch Chu Thi Thao Phuong HANOI, 2017 NATIONAL ECONOMICS UNIVERSITY EXCELLENT EDUCATIONAL PROGRAM BACHELOR'S THESIS Topic: Expanding Consumer Lending at Joint Stock Commercial Bank for Foreign Trade Of Vietnam Transaction Center Branch Student: Chu Thi Thao Phuong Major: Banking Class: Banking EEP 55 Student's ID: 11133189 Supervisor: Dr Le Thi Huong Lan HANOI, 2017 ACKNOWLEGDEMENTS Foremost, I would like to express my sincere gratitude to my supervisor Dr Le Thi Huong Lan for the continuous support of my study and research, for her patience, enthusiasm, and immense knowledge Her guidance helped me in all the time of research and writing of this thesis I could not have imagined having a better supervisor for my study Besides my supervisor, I would like to thank Mr Dao Thanh Tung for being a delicated mentor who helped me a lot during my internship at Joint Stock Commercial Bank for Foreign Trade of Vietnam - Transaction Center Branch I thank my classmates in Banking EEP class: Tran Bao Ngoc, Nguyen Dieu Thuy, Nguyen Thu Thao, Dinh Hoang Lan, for the stimulating discussions and for all the support as well as encouragement Last but not the least, I would like to thank my brother Chu Anh Minh for constantly cheering me up during my most stressful times STATUTORY DECLARATION I herewith formally declare that I myself have written the submitted Barchelor's Thesis independently I did not use any outside support except for the quoted literature and other sources mentioned at the end of this paper Hanoi, ./ ./ 2017 TABLE OF CONTENT Introduction .1 CHAPTER THEORETICAL FRAMEWORK ON CONSUMER LOANS OF COMMERCIAL BANKS 1.1 Consumer lending of Commercial Banks 1.1.1 Commercial Bank and its basic activities .3 1.1.1.1 Definition of Commercial Bank 1.1.1.2 Primary activities of Commercial Banks 1.1.2 Lending activities of Commercial Banks 1.1.2.1 The concept of bank lending .6 1.1.2.2 Classification of lending activities of commercial banks 1.1.3 Consumer lending activities of Commercial Banks 11 1.1.3.1 The concept of consumer lending 11 1.1.3.2 The basis of consumer lending .11 1.1.3.3 Characteristics of consumer loans 11 1.1.3.4 The role of consumer lending 12 1.1.3.5 Types of consumer loans 14 1.2 Expanding consumer lending of commercial banks 17 1.2.1 The concept of expanding consumer lending of commercial banks .18 1.2.2 Indicators reflecting expanding consumer lending of Commercial Banks 18 1.2.2.1 Indicators on the number of customers dealing with banks 18 1.2.2.2 Indicators on consumer loan sales 19 1.2.2.3 Indicators on consumer loan outstanding balance 20 1.2.2.4 Indicators reflecting the expanding types of consumer lending .21 1.2.2.5 Indicators reflecting the quality of consumer lending 21 1.3 Factors affecting the expanding consumer lending of Commercial Banks 22 1.3.1 Internal factors 22 1.3.1.1 Scale of Capital Mobilization 22 1.3.1.2 Bank Lending Procedures .23 1.3.1.3 Application of Technology in Banking Sector .23 1.3.1.4 The Diversity and Quality of Consumer Lending Forms .23 1.3.1.5 Preferences for Customers when borrowing 24 1.3.1.6 Quality of Human Resources 24 1.3.2 External factors .25 1.3.2.1 Socio-Cultural Environment 25 1.3.2.2 Economic Environment 25 1.3.2.3 Regulatory Environment 26 1.3.2.4 Development Orientation of the State .26 1.3.2.5 Factors relating to Customers 26 CHAPTER EMPIRICAL DATA ANALYSIS IN CONSUMER LENDING AT JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - TRANSACTION CENTER BRANCH 28 2.1 Overview of Joint Stock Commercial Bank for Foreign Trade of Vietnam Transaction Center Branch 28 2.1.1.Brief history of formation and development 28 2.1.2 Overview of the operational situation 29 2.1.2.1 Capital Mobilization Activities .29 2.1.2.2 Capital Using Situation 31 2.1.2.3 Income Statement 32 2.1.2.4 Credit activities .32 2.2 Empirical data analysis in Consumer Lending at Joint Stock Commercial Bank for Foreign Trade of Vietnam - Transaction Center Branch 34 2.2.1 Regulations relating to Consumer Lending at Joint Stock Commercial Bank for Foreign Trade of Vietnam - Transaction Center Branch 34 2.2.1.1 Legal Basis 34 2.2.1.2 Consumer Lending Process .35 2.2.1.3 Consumer Lending Products 38 2.2.2 Empirical data analysis in Consumer Lending at Joint Stock Commercial Bank for Foreign Trade of Vietnam - Transaction Center Branch 45 2.2.2.1 Consumer loan sale 45 2.2.2.2 Consumer loan outstanding balance .50 2.2.2.3 Structure of consumer loan outstanding balance by term .52 2.2.2.4 Structure of Consumer Loan Outstanding Balance by Purpose 54 2.2.2.5 Quality of consumer loans 58 2.2.2.6 Number of customers dealing with banks .60 2.3 Evaluation of Consumer Lending Expansion at Joint Stock Commercial Bank for Foreign Trade of Vietnam - Transaction Center Branch 61 2.3.1 Achievements 61 2.3.2 Limitations 62 2.3.3 Causes of limitations .63 2.3.3.1 Objective causes 63 2.3.3.2 Subjective reasons 64 CHAPTER SOLUTIONS AND RECOMMENDATIONS TO EXPAND CONSUMER LENDING AT JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - TRANSACTION CENTER BRANCH .67 3.1 Orientations of Consumer Lending Expansion of Joint Stock Commercial Bank for Foreign Trade of Vietnam - Transaction Center Branch in the coming years 67 3.1.1 Vision and Business Strategy 67 3.1.2 Medium-term Targets 68 3.1.3 Perspectives on Expanding Consumer Lending 69 3.2 Solutions to expand Consumer Lending at Joint Stock Commercial Bank for Foreign Trade of Vietnam - Transaction Center Branch 70 3.2.1 Improving technology and products .70 3.2.1.1 Upgrading and developing banking technology .70 3.2.1.2 Creating package products 72 3.2.2 Promoting the propaganda and advertisement 72 3.2.2.1 Investing properly in market research .72 3.2.2.2 Promoting products and brands 73 3.2.2.3 Implementing good customer care policy .74 3.2.3 Implementing a reasonable domestic policy 74 3.2.3.1 Regarding staff and employees as a group of target customers 74 3.2.3.2 Training and developing human resource 75 3.3 Recommendations 76 3.3.1 Recommendations to the Government 76 3.3.2 Recommendations to the State Bank of Vietnam 76 3.3.3 Recommendations to Joint Stock Commercial Bank for Foreign Trade of Vietnam 77 Conclusion .81 References 82 LIST OF TABLES Table Page Table 2.1 Capital Mobilization Situation of Vietcombank - Transaction Center branch 30 Table 2.2 Capital Using Situation of Vietcombank - Transaction Center Branch 31 Table 2.3 Summary of Income Statement of Vietcombank - Transaction Center Branch 32 Table 2.4 Loan outstanding balance situation of Vietcombank Transaction Center branch 32 Table 2.5 Consumer Lending Products of Vietcombank 38 Table 2.6 Consumer Loan Sales of Vietcombank Transaction Center branch 46 Table 2.7 Consumer Loan Outstanding Balance of Vietcombank Transaction Center branch 50 Table 2.8 Structure of Consumer Loan Outstanding Balance by Term of Vietcombank - Transaction Center branch 52 Table 2.9 Structure of Consumer Loan Outstanding Balance by Lending Object of Vietcombank - Transaction Center branch 54 Table 2.10 Bad debt ratio and overdue debt ratio of Vietcombank Transaction Center Branch 58 Table 2.11 Interest income growth in consumer lending of Vietcombank Transaction Center Branch 59 Table 2.12 Number of customers coming to borrow consumer loans at Vietcombank - Transaction Center Branch 60 LIST OF FIGURES Figures Page Figure 2.1 Consumer Loan Sales 2014 - 2016 47 Figure 2.2 Consumer Loan Outstanding Balance 2014 - 2016 51 Figure 2.3 Structure of Consumer Loan Outstanding Balance by Term 2014 - 2016 53 Figure 2.4 Structure of Consumer Loan Outstanding Balance by Lending Object 2014 - 2016 56 ... JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - TRANSACTION CENTER BRANCH 28 2.1 Overview of Joint Stock Commercial Bank for Foreign Trade of Vietnam Transaction Center Branch. .. Stock Commercial Bank for Foreign Trade of Vietnam - Transaction Center branch - Chapter Solutions and recommendations to expand consumer lending at Joint Stock Commercial Bank for Foreign Trade of. .. RECOMMENDATIONS TO EXPAND CONSUMER LENDING AT JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - TRANSACTION CENTER BRANCH .67 3.1 Orientations of Consumer Lending Expansion of Joint