(Luận văn) issues in credit granting process in vp bank

t to UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ng hi ep w n lo ad ju y th yi pl n ua al LE HUNG CUONG Student ID: 22170008 n va ll fu oi m at nh z Issues in Credit Granting Process in VP bank z k jm ht vb om l.c gm MASTER OF BUSINESS ADMINISTRATION n a Lu n va y te re th Ho Chi Minh City – 2019 t to UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ng hi ep w n lo ad ju y th yi pl n ua al LE HUNG CUONG Student ID: 22170008 n va ll fu oi m nh at Issues in Credit Granting Process in VP bank z z k jm ht vb gm MASTER OF BUSINESS ADMINISTRATION om l.c n a Lu SUPERVISOR: Prof TRAN HA MINH QUAN n va Ho Chi Minh City – 2019 y te re th t to ng EXECUTIVE SUMMARY hi This research is developed with the objective of identifying the main problems that lead to ep the downturn of credit growth rate of VPBank during 2018 It was captured that VPBank has faced up with lower credit growth rate in 2018 and this symptom was explained by some problems, w n namely SBV’s credit growth cap, peer-to-peer lending, overlapped products, lower lending interest lo ad rates from bigger banks, higher document processing time, impolite collection activities, slow y th SMS and mobile internet banking, lack of live banking services, high lead time for customer ju complaints, incorrect information by sales teams, and less attractive advertising contents yi However, only two problems are actually existed, namely higher document processing time and pl ua al incorrect information by sales teams Other problems have not had high impact or have no impact in coming years Based on that, the researcher proposes set of solutions to help VPBank to further n n va decrease the time required for document processing and to reduce adverse impact from wrong fu information provided by sales officers The set of solutions are translated to change plan with detail ll solutions, detail actions, people management, and communication oi m at nh z z k jm ht vb om l.c gm n a Lu n va y te re th t to PART I - BACKGROUND ng 1.1 Company background hi ep 1.1.1 History of establishment and development Vietnam Prosperity Joint Stock Commercial Bank (VPBank) was established in 1993 Over w 25 years of doing business in Vietnamese financial and banking industry, the bank achieved n lo outstanding result since its charter capital was reached US$681.49 million and total asset was more ad than US$12 billion in the financial year of 2018 VPBank has been listed in Ho Chi Minh Stock y th Exchange (HOSE) with 1.33 billion shares were issued to public investors VPBank conducted the ju yi transformation in 2010, remarked by new logo and brand identify as well as the focus on modern pl retail banking business under the consultation from McKinsey & Company In 2011, the bank al ua implemented different business initiatives consulted by McKinsey & Company and successfully n raised charter capital to balance with new business capacity and development In 2012, VPBank va n achieved national brand value and it established risk management division to monitor risk issues ll fu in bank wide level In 2013, VPBank was rated at B3 by Moody and it conducted Information oi m Technology and Risk Management Master Plan In 2014 and 2015, VPBank focused on mass nh consumer market by establishing VPBank Finance Company Limited (FECredit) and the bank was at among largest corporate income tax payers in Vietnam The year of 2016 remarked a big leap since z z VPBank moved to new head office and total asset was over US$8 billion The bank also received vb a loan from International Finance Corporation (IFC) with cheap price In 2017, VPBank conducted ht jm Initial Public Offering (IPO) and it successfully issued 1.33 billion shares and raised nearly k US$300 million from public investors Moody rated VPBank as B2 which was known as an gm upgrade from the last rating in 2013 Digital banking services have been developed in order meet 1.1.2 Market share om l.c new business opportunities in the market a Lu An illustrative way to capture market share of VPBank is through its market capitalization n in comparison with other banks and financial institutions listed in Vietnam stock exchanges current market share of VPBank is 5% in term of total market capitalization value th TCB (US$3.8 billion), CTG (US$3.5 billion) and BVH (US$2.8 billion) Based on this statistics, y at 6th position with US$2.1 billion, lower than VCB (US$10.8 billion), BIDV (US$5.2 billion), te re institutions with total market capitalization of US$39 billion Currently, VPBank has been ranked n va According to the data obtained from cophieu68.com, there are 26 listed banks and financial t to 1.1.3 Vision, mission, core values ng The vision of VPBank is to become one of the largest joint-stock commercial banks and hi ep one of the leading retail joint-stock commercial banks in Vietnam To support this business vision, the bank conducts two different missions The first mission is to conduct aggressive w organic-growth with high attention to retail, small and medium enterprises (SMEs), consumer n lo finance, and corporate segment The second mission refers to strong investment and continuous ad development of foundation systems, including human resource, information technology, risk y th management, and operation Moreover, there are core values which are being maintained in ju yi VPBank, including make the difference, ambition, customer focus, trust, people development, and pl productivity Toward the long-term and sustainable development, VPBank committed to deliver al n va 1.1.4 Organization structure n difference ua banking products and services to the customers with professionalism, simplicity, dedication, and ll fu Currently, VPBank has been organized by high standardized organization structure oi m General Shareholder Meetings takes the higher position in the structure and it is being supported nh by Board of Directors Chief Executive Officer (CEO) is managing advisory units (finance, risk at management, human resource management, strategy and project management) and business units z z (retail banking, household banking, SME banking, commercial banking, corporate and investment ht vb banking, digital banking services, financial institution and transactional banking) and operating jm and supporting units (credit, operations, information technology, legal and compliance, business k intelligence competency center, and marketing and communication) Moreover, current gm organization structure addresses the importance of different committees, including human resource om l.c committee, risk management committee, credit committee, operational risk committee, credit and collections committee Supervisory board and internal audit are established to support Board of n a Lu Directors in entire banking management and monitoring n va y te re th t to ng hi ep w n lo ad ju y th yi pl n ua al n va ll fu oi m at nh z z k jm ht vb om l.c gm n a Lu n va te re y Figure 1: Organization structure of VPBank th Source: VPBank’s annual reports (2017) t to 1.2 Symptom ng During the period of 2014-2018, business performance of VPBank is summarized below: hi Table 1: Business performance of VPBank ep Indicator w n lo ad 2014 2015 2016 2017 2018 7,698 423 5,619 3,696 8,826 609 6,925 5,317 10,222 768 7,705 6,464 12,226 1,307 8,789 8,041 14,028 1,508 9,524 9,476 43.86% 21.57% 24.40% 17.85% 549 754 1,102 1,349 76 141 220 358 399 0.99% 17.92% 1.60% 23.12% 2.15% 28.69% 2.93% 27.38% 2.85% 26.47% y th % ju US$m 296 yi pl n va % % ua US$m al Total asset Equity Saving Lending Lending growth Total operating income Profit before tax ROA ROE Unit US$m US$m US$m US$m n Source: VPBank’s annual reports (2019) fu ll VPBank’s total asset was nearly double from US$7,698 million in 2014 to US$14,028 m oi million in 2018 Equity was raised from US$423 million to US$1,508 million during the period at nh The bank attracted depositors with value in 2018 recorded at US$9,524 million while lending value was US$9,476 million Total operating income in 2018 was stood at US$1,349 million and profit z z before tax was US$399 million Although VPBank achieved many remarkable results, the bank vb ht faced a shortfall in returns on asset (ROA) and returns on equity (ROE) in 2018 In more detail, k jm ROA of the bank increased from 0.99% in 2014 to 2.93% in 2017 but it dropped to 2.85% in 2018 gm Similarly, ROE in 2018 was 26.47% lower than ROE in 2017 The comparison between the target and actual result for the financial year of 2018 provided Table 2: 2018 target vs actual performance of VPBank 15,598 10,486 9,943 14,028 9,524 9,476 -14.8% th 469 399 Source: VPBank’s annual reports (2019) y US$m te re US$m US$m US$m Target vs Actual -10.1% -9.2% -4.7% n Actual va Target n Total asset Saving Lending Profit before tax Unit a Lu Indicator om l.c more detail about the symptom of the bank t to In March 2018, VPBank delivered a business plan for 2018 in which total asset was ng expected at US$15,598 million but actual result was captured at US$14,028 million or the actual hi ep result is 10.1% lower than the target Similarly, saving size and loan size were lower than the target of 9.2% and 4.7% Profit before tax was not achieved the target since it was US$399 million and w it was lower than the target by nearly 15% Lending is key symptom since lending is important n lo item of total asset and the lower lending size affects to total asset In addition, saving was decreased ad but it was not the issue since the bank has good funding resources from Internal Finance y th Corporation When lending size is decreased, the profit from interest income is decreased From ju yi 2014 to 2018, the structure of net interest income of VPBank is presented below: pl Table 3: Structure of net interest income of VPBank 2015 2016 2017 2018 585 854 1,145 1,503 1,748 383 468 595 676 678 907 1,072 43.79% 33.88% 18.11% n US$m 2014 ua Unit al 335 US$m 249 % growth - 88.92% n US$m m va ll fu 471 oi at nh z Indicator Interest income Interest expenses Net interest income Net interest income z Source: VPBank’s annual reports (2019) vb jm ht It was observed that net interest income of VPBank was increased only 18.11% in 2018 compared to 2017 and it was a big drop compared to 33.88% as growth rate of net interest income k gm in 2017 It was captured that the growth rate of net income has been decreasing and the trend has been continuously since 2016 Moreover, lower net interest income is not by high interest l.c om expenses Table above shows that interest expenses in 2018 increased 27.14% and 13.61% in 2017 a Lu but interest income increases 31.27% and 16.30% Therefore, it is concluded that the weaknesses in lending activities is the business symptom in the case study of VPBank It is translated to the n section, the initial cause-effect map is prepared and it is developed to point out what the main categorized into several causes or explanatory factors th conducted between the researchers and some branch managers of VPBank and the findings are y reasons of lower growth rate in lending portfolio of the bank A focus group of discussion was te re reduces the bank’s profits since large of income source is from lending activities In the next n va fact that when the bank has lower lending volume, its net interest income will be decreased and it t to 1.3 Initial cause-effect map ng As mentioned earlier, the interviews with focus group of branch managers helps to capture hi ep initial causes that leader to lower lending growth of VPBank during 2018 branch managers were participated into the interviews To protect the personal information of branch managers, the w researcher codes the name of each branch manager as A, B, C, D, and E For all interviewees, an n lo interview question of what the causes of lower lending size during 2018 was asked and their ad answers are summarized below y th Branch manager A said that one of the main reason for lower lending size in 2018 was the ju yi credit growth rate cap by State Bank of Vietnam (SBV) He mentioned that SBV only allowed pl local commercial banks to grow their credit at maximum of 14% However, VPBank was al ua exceeding this level since the third quarter of 2018 He provided the credit growth rate of VPBank n was more than 15% after quarter III of 2018 and therefore, the head office team asked him to n va postpone disbursement activities fu ll Branch manager B indicated that his branch faced with the shortfall in unsecured lending oi m due to the new peer-to-peer lending activities in the North of Vietnam He noted that Vietnam has nh a population of about 96 million, GDP per capita in 2018 is nearly US$2,590 so that Vietnam is at considered a potential market for retail banking, and this trend is expected to continue Moreover, z z a large number of Vietnamese people have not yet access to banking products and services, and vb will become a source of retail banking In particular, in the era of information technology, retail ht jm banking activities will be strongly supported when there are millions of new customers from rural k to urban areas and having quick access to financial products through the application of new gm technology He confirmed that there are new players in Vietnamese financial market with high om l.c investment funded from foreign investors in order to provide super convenient unsecured loans to lower income customers Normally, the third and the last quarter of a year was good time for a Lu unsecure lending due to the customers wanted borrowing money to purchase some stuffs (i.e n smartphone, durable goods) but his branch suffered a big drop in customer demand His sale of peer-to-peer lending since it has very high interest rate (i.e more than 60% per annum) th normal disbursement time of VPBank is about days However, he questioned about the quality y traditional banking process as the customers can receive the loan in less than 24 hours while the te re peer lending form He also noted that peer-to-peer lending platform is faster compared to n va officers could not achieve the sales target for the third and the fourth quarter because of peer-to- t to Branch manager C provided the same reason as Branch manager A and B She noted that ng her branch could not grow lending portfolio due to SBV’s cap and the raise of peer-to-peer lending hi ep has been a threat Moreover, she emphasized the overlap in product structure of VPBank Currently, retail banking division provides unsecure lending to individual and household w customers SMEs banking division also provides loan to micro-SME customers which is quite n lo similar to household customers VPBank has FECredit which is providing unsecured lending to ad individual customers She explicated that the bank should review product policy and to combine y th products from different division into single package She concerned that the overlapping leads to ju yi future business growing issues She often faced up with the situation of one customer is categorized pl as household business and retail customers, leading to different loan booking for two segments al ua Branch manager D has strong experience in banking and finance He mentioned that the n demand for banking services has been increasing recently, especially retail banking services va n Focusing on retailing activities is becoming a trend of commercial banks to diversify revenues, ll fu increase business efficiency and reduce operational risks Only in the period of 2016-2018, the oi m income from retailing activities of banks increased every year with a large growth rate He nh indicated that VPBank cannot compete with bigger banks like BIDV, Agribank and Vietcombank at in term of interest rate Generally, the interest rate of VPBank is always higher than BIDV, z z Agribank, and Vietcombank due to these banks have cheaper sources of funds He took an example ht vb of Agribank since this bank is offering the loan package to lower income customers with interest jm rate is much cheaper than current 25% as unsecure lending interest rate of VPBank BIDV and k Vietcombank are providing auto loan and home loan with cheaper interest rate compared to gm VPBank His concern was further expanding to current operating cost of VPBank was high since om l.c the bank has been conducting fast growing business strategy with number of branches and network have been increasing rapidly The bank did not care about the growth quality for the last few years a Lu and it might be the issue in the long run perspectives n Branch manager E provided another reason for lower lending growth rate She indicated VPBank Some customers went to her branch and claimed for impolite debt collection reminders th to disburse to the customers She provided another concern related to collections activities of y is 3-5 days, depending on lending products A home loan may take more than week to finish and te re offered loans to the customers in 1.5 days while her branch’s average document processing time n va that document processing time in VPBank was higher than other banks He noted that TPBank t to should take into account the design ATM to ensure the consistency between ATM appearance and ng VPB’s branch appearance hi The bank should also improve the customer satisfaction through the employee training ep Once the employees receive the training, the human resource management can assign the customer w satisfaction as one of the most important Key Performance Indicator for the employees, especially n lo to tellers and customer relationship officers ad Beside of the development of product bundle, VPBank should develop the supply chain y th finance (SCF) product It is defined a financial product and service which is designed to provide ju yi financial supports to the companies based on physical and information flows in their supply chain pl process SCF product refers to working capital financing with the application of information al ua technologies It is asserted that VPBank should develop following SCF products, including export n and import finance, trade finance loans, structured trade loans, online trade solutions, and risk va n solutions These products are grouped into four major categorizes, namely trade risk management ll fu solutions, online trade solutions, import and export financing solutions, and commodity financing oi m solutions Descriptions - Sub-products: bid bonds, document letters of credit (LOC), guarantees, standby letters of credit, and performance bonds - Customers’ benefits: § The customers who utilize guarantees services from VPBank are not worry of subjecting their money as security for their contracts in trade activities § The customers who utilize bid bonds and performance bonds gain the benefit of using their bonds as securities and it is useful in case of large capital-required projects § Document LOC is utilized in case of the sellers and the buyers have strong relationship and VPBank will provide credit supports to the sellers in case of they can provide a prearranged documentary credit facility § Standby LOC is applied when VPBank must pay guarantees to the sellers when their underlying transactions are not fulfilled or payment becomes defaults - Online trade solutions is a web-based credit services which are offered by VPBank to the customers who want to apply a credit by sending invoices of goods through an online portal established and maintained by the banks Security technologies are applied to protect transaction information and the bank accesses information of transactions to timely offers the credit supports to both buyers and sellers involved into this VPBank’s network - Sub-products: documentary collections, trade finance loans, bills negotiated not under credit, and repayment - The most important is trade finance loans since it gains high attention and demands from enterprises customers - Trade finance loans require the companies to open current account in VPBank and loans will be disbursed after the customers to provide proper documents to prove that it is a genuine underlying trade transactions - Commodity finance has another name as structured trade finance It refers to the solutions for the customers who demand for short-term working capital loans In order to get a credit, the customers must submit the inventory evidence and trade evidences between parties The objective of developing commodity finance is because of it is flexible and is suitable to the customers who want to have sufficient liquidity during their business cycle at Solutions nh Table 17: Supply chain finance solutions z z k jm ht vb Trade risk management solutions om l.c gm Online trade solutions 37 th y from the customers Currently, general practice in lending assessment is conducted by credit te re VPBank should apply credit scoring system to reduce the time of validating information n va Commodity financing solutions n a Lu Import and export financing solutions t to verification officers in Operation Division and they must make a call to customers and to sales ng officers to verify customers’ information and cash-flow before taking the final decision related to hi ep loan disbursement Credit scoring system can help to reduce the time required for this process Credit scoring is developed with quantitative analysis techniques it is based on historical data of w good and bad borrowers A modelling team which is placed under Risk Division should take the n lo responsibility of gathering data, developing the assessment criteria, and modeling all factors and ad generating final scoring model By using credit scoring system, expected decision time should be y th decreased by at least 30% compared to current process ju yi Another way to decrease document processing time refers to checking of the customers’ pl historical lending profile Currently, when a customer submits loan application, credit officers al ua must check historical lending profile through State Bank of Vietnam’s portal This process often n takes at least working day to generate the result VPBank should take into account similar va n services which are offered by private credit bureau in Vietnam The cost of using this services is ll fu about VND 5,000-10,000 per case and the response time is much higher It is because of SBV’s oi m services are being used by all commercial banks in Vietnam and therefore the number of queries nh is enormous By using private credit bureau’s services, VPBank can release the dependency to at SBV’s services while increasing the response time and therefore further reducing overall document z z processing time ht vb It is also recommended that credit verification team should be divided into sub-teams and jm each sub-team will be in-charge different products Currently, credit verification process is k characterized by secured and unsecured lending However, the bank should categorize secured gm team to home loan verification team, auto loan verification team, and working capital verification om l.c team while unsecured team is categorized into consumer lending verification team and credit card verification team Since each team will handle different product, the specialization is increased n 3.2.2 The set of solutions to eliminate wrong information provided by sales teams a Lu and it is expected that the time spent for each verification session is reduced Division, Head of Credit Division, Head of Legal and Compliance Division, and at least one 38 th violator Sanction Committee will be involved by Head of Human Resource Management y and it takes the responsibilities of validating violation cases and providing the disciplines for each te re should develop the disciplines for each identified violation Sanction Committee must be setup n va To reduce adverse impact from the wrong information provided by sales teams, VPBank t to member from Board of Director Legal and Compliance Division should cooperate with Credit ng Officer to develop independent team who make a field check to the bank’s branches The objective hi ep of this action is to check what the integrity of sales officers For example, the team can send one employee to be a customer and it will check how the sales officers provide information related to w lending products and services, the hidden cost that the customers have to pay for sales officers, n lo and the information related to interest rate repayment from the sales officers ad It is recommended that the bank should develop feasible training for credit officers and y th sales officers in term of products and services’ characteristics In more detail, newly recruited ju yi employees in credit and sales services must be trained and they must pass the exam to ensure that pl they understand the bank’s credit and product policies The training should be given to existing al ua employees so that they are up to date with new policies changes Training quality must be n conducted through after-training assessment forms and the trainees must provide their assessment va n about training content and quality of the trainers Moreover, the training should be given to the ll fu branch’s directors so that they are able to manage their employees in the way of not providing oi m wrong information to the customers nh Another recommendation refers to the customer verification before loan is disbursed To at that, VPBank should develop a call center which is placed under Operation Division and it takes z z the responsibilities of making calls to the customers before their loans are disbursed A calling ht vb script is developed with some basic information checking, including the customers’ identification jm and the loan purpose Tele-callers must check whether the customers agree with the loans’ k conditions such as loan amount, loan term, and lending interest rate In case of the customers agree gm with all the loans’ conditions, their loans will be disbursed In the contrast, the loans will not be om l.c disbursed if the customers disagree with the loans’ conditions Improving customer care service is also one of the core issues in the development trend of a Lu retail banks when customers’ emotions are a key factor for deciding to use the service In this area, n young private banks like Techcombank or TP Bank are always highly appreciated with the staff, 39 th opinions of customers on social media listening related to BIDV Since then, the unit can find out y Network Center (SMCC) to help listen and monitor all information, discussions and especially the te re hard to improve the quality of their customer care For example, BIDV established a Social n va especially young, dynamic and friendly traders Most of local commercial banks are also working t to customers' problems not only in service products but also in consulting staff, helping to improve ng service quality and take care of users more effectively hi Customer service department of VPBank must provide one team to handle customers’ ep complaints related to wrong information provided by sales teams This team receives all w customers’ complaints and categorizes into several groups In addition, customer service n lo department must purchase the software to help them managing overall customer complaint ad handling process It is denoted that the bank does not have the software for customer complaint y th resolution and everything is done manually by using Excel file In this context, customer service ju yi department must work with Information Technology Division and Procurement Center to develop pl or to purchase customer service management software The investment cost of this system is al ua ranged from US$300,000 to US$500,000 in term of software cost and the bank must purchase the n hardware such as server to use this software properly va n VPBank should further use a risk management framework to manage information flows ll fu Three Line of Defense Risk Management Framework must be applied in VPBank and it is depicted oi m in the Figure below: at nh z z k jm ht vb om l.c gm a Lu Figure 8: Three Line of Defense Risk Management Framework in VPBank n The first line of defense consists of management controls and internal control measures stakeholders in Three Line of Defense Risk Management Framework 40 th and Compliance, and Head of Internal Audit External audit and regulators are two key y will be under the management of senior management such as Chief Risk Officer, Head of Legal te re inspection, and compliance The third line of defense is internal audit All three lines of defenses n va The second line of defense includes financial controllers, security, risk management, quality, t to VPBank should provide clear information about loans terms and loans conditions through ng its website and associated communication channels such as Facebook It means that the bank hi ep publish the documents requirement for loans applications, the interest range, the repayment period, and the location of making payment It helps the customers to pre-understand their responsibilities w after the loan is disbursed n lo 3.3 Change plan design ad Change plan is designed given to the set of solutions It is expected that a change plan will y th consist of the objectives, the actions, the people, and the communication plan ju yi Table 18: Change plan Objectives - To reduce the document processing time and decision process Actions pl Solutions al - To purchase online lending solutions from T24 - To digitalize document entry process n ua Automate lending solution People - Information technology department - Credit division - Operation division va - To develop Dynamic Bundle, Closed Bundle, and Open Bundle Supply chain finance products - To diversify products and services related to credit process - To develop export and import finance, trade finance loans, structured trade loans, online trade solutions, and risk solutions n Product bundle - To reduce the time required in customers’ information verification Communication Plan - To communicate internally throughout the bank’s intra-network ll fu - To communicate through the bank’s website, Facebook, mass-media instruments, and billboards - To communicate through the bank’s website, Facebook, mass-media instruments, and billboards - Information technology department - Credit division - Operation division - Product Team oi m at nh - Product development department z - To collect historical data related to customers’ information and customers’ repayment behavior - To develop quantitative model based on logistics regression - To align credit scoring decision with cut-off rate - To identify the possible vendor who can provide customers’ historical lending profile - To check the price of services - To make a bidding process to choose the best vendor - To divide secured team into home loan verification team, auto loan verification team, and working capital verification team - To divide unsecured team into consumer lending and credit card verification team - To set up clear roles of department involved into this framework - To define each checking point of risk management - To fasten the lending decision time Use of services from private credit bureau - To fasten the time of checking customers’ historical lending profile Specialize credit verification team - To improve the productivity of the employees during credit verification process Three Lines of Defense Framework - To improve the control overall entire banking process Separate team to handle customer complaint related to wrong information provided sales officers - To reduce the time required to resolve one customer’s complaint - To newly recruit people or to transfer people from existing teams - To purchase the software to monitor customer services Call center for before loan is disbursed - To reduce the fraud issues from sales officers or customers - To newly recruit people or to transfer people from existing teams - To develop call script to verify customers’ information and loans demands - Operation division Training to the employees - To strengthen the employees’ knowledge - To provide trainings to newly recruited and existing employees about products and lending process - Human resource management division - To communicate internally throughout the bank’s intra-network - Risk management division - Credit division jm ht vb - To communicate internally throughout the bank’s intra-network - Procurement center - Credit division k gm - Credit division - Human resource management division om l.c - Risk management division - To communicate internally throughout the bank’s intra-network - To communicate internally throughout the bank’s intra-network n a Lu - To communicate internally throughout the bank’s intra-network n - Operation division va te re - To communicate internally throughout the bank’s intra-network - Online communication system - Online communication system - Email push y 41 th z Credit scoring system t to - To provide trainings to the branches’ directors to control their people ng hi Sanction Committee ep - Human resource management division - Credit division - Legal and compliance division - To develop the set of discipline applicable for each violation type - To develop independent unit to randomly check the integrity in sales teams - To monitor all internal violation of the bank’s employees - Human resource management division Source: Developed by the researcher (2019) w n lo ad ju y th yi pl n ua al n va ll fu oi m at nh z z k jm ht vb om l.c gm n a Lu n va y te re th 42 t to REFERENCES ng Agribank (2019) SBV Governor: Credit growth of 14% in 2019 Retrieved from hi http://www.agribank.com.vn/32/822/tin-tuc/tai-chinh-ngan-hang/2019/01/15121/sbv-governor ep credit-growth-of-14 in-2019.aspx w Al-Ajmi, J., Abo Hussain, H & Al-Saleh, N (2009) Clients of conventional and Islamic n lo banks in Bahrain: How they choose which bank to patronize International Journal of Social ad 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hi Interviewee ep w Branch manager A n lo ad y th ju Branch manager B yi Summary of interview content I don’t think VPBank’s technology is weak In fact, the bank is among top leading technology absorption in Vietnam with the introduction of Timo which is known as the first digital banking services provider We deliver internet banking to both retail and SMEs customers VPBank’s technology level is good in overall The time to access internet banking is fast and responsive user interaction through mobile banking application It is available in both Android and iOS mobile platform So, I don’t think there are any issues with VPBank’s technology performance Sometimes I got a customer complain about they could not access to VPBank’s mobile internet banking in specific time Generally, it was happened during salary pay day and there were often large transactions which were carried out by both salaried customers and VPBank’s employees transferred money to others or paid the bills Currently, VPBank introduced mobile internet banking services with the integration of many payment services such as electric bill payment, Internet bill payment, television cab, etc I thought it is very good services that VPBank is offering to the customers However, I believe that other banks also introduce the same services to their customers The main thing here VPBank has lack of innovative technological based products and services to the customers For example, I saw that TPBank introduces a service all Live Banking whether the customers are able to take payment cards immediately in this bank’s live counters My customers sometimes go to the branch and asked for the issue of they did not receive SMS to know their repayment information I checked with IT support and found that it was delayed by the system error I believed that if the bank could not fix this issue, the customer would not satisfy with VPBank’s service quality It is my major concern Other while, I don’t think there are other issues in VPBank’s technologies pl n ua al Branch manager C n va ll fu oi m at nh Branch manager D z z k jm ht vb om l.c gm Branch manager E y th 49 te re n Branch manager B Summary of interview content I think VPBank does not have good location compared to other banks like Agribank since Agribank has better network coverage For instance, my branch has small size and it creates the concern to the customers since it is often full of people to transact My branch is located in District of HCMC and the bank network is quite good compared to other banks like Vietinbank or BIDV I va Branch manager A n Interviewee a Lu What is your opinion towards VPBank’s bank location? t to ng hi ep Branch manager C w n lo ad ju y th Branch manager D yi think branch location is important to almost customers since Vietnamese people prefer going to the branches rather than doing everything in Internet banking VPBank’s branches are not covered well in the district Only one branch is there to compete with three branches from TPBank I believe that if VPBank does not open more branch in this district, TPBank will take over my clients soon VPBank has more than 200 branches and transaction offices in Vietnam It is good setup and allows the bank to expand quicker and to approach different customers However, I faced with the fierce competition from financial companies and they are mostly located in every street to provide finances to individual lower income customers I believe that VPBank has good location I have no concern about the branch coverage Current branch can serve well current customer base even we can provide services more to the customers pl n ua al Branch manager E va What is your opinion towards VPBank’s service quality? n Summary of interview content VPBank currently provides wide range of banking services to the customers such as home loan, auto loan, unsecured loan, etc I think VPBank is doing a good job in term of service quality All the customers’ complaints are effectively resolved by my staffs I am not allowing my staffs to take hidden fees from the customers from taking a credit If I know someone did that, I will fire them I am very concern about service quality of VPBank The bank is growing very fast recently and it seems no one take care for service quality I received a complaint from the customers and asked them to call to customer service hotline but they had to wait more than week to get appropriate resolution I think VPBank should review the quality of customer complaint handling I found that the ATMs have been overloaded many times My customers could not withdraw money in specific time or the ATMs did not return the cards to the customers In this month, I have received four complaints about ATMs issues My staffs have apologized to the customers and it was a shame Service quality of VPBank is improving over the time although there are still some weaknesses My customers are quite happy with the bank service But they only complaint the late collections call reminders However, these customers were overdue so that they accepted the calls with little dissatisfaction My branch got a rating as maximum satisfaction score from the customers The major limitation in VPBank’s service quality is the unclear consultant services from sales team when they introduced loans to the customers I have been going to this branch for few months It ll fu Interviewee oi m at nh Branch manager A z z k jm ht vb Branch manager B om l.c gm Branch manager C n a Lu y th 50 te re n Branch manager E va Branch manager D t to seemed previous guys did not fulfill the jobs since some customers complained unclear charge fees I believed that VPBank should provide clear documents and guidance related to sales advisors We could not accept the case of incorrect information provided by our staffs It takes the customer dissatisfaction and they might not want to keep relationship with the bank ng hi ep w n lo What is your opinion towards VPBank’s reputation? ad Interviewee y th ju Branch manager A yi Summary of interview content I believe that VPBank has good image in the public It is the result of strong market campaign to raise the awareness of the customers towards VPBank’s brand I think VPBank is doing a good job in rising customer’s brand awareness My branch frequently conducted a marketing campaign in which sales teams going to the street in order to provide the leaflet to the customers My personal opinion is that VPBank is highly well-known in HCMC It surpasses smaller banks like OCB with household products and unsecured lending from FECredit VPBank did not utilize well the poster to inform the customers about the bank’s services in big street It might be the concern for brand reputation However, I believe that the Internet may help to widen our reputation to the customers It is somehow to improve brand reputation through the advertisement VPBank should focus on brand reputation through diversified and innovative products and services to increase customers’ brand awareness Some banks are now introducing live banking services or they advertise that the processing time is within 24 hours I think their advertisement is more attractive than VPBank pl n ua al Branch manager B n va Branch manager C ll fu oi m Branch manager D at nh z z k jm ht vb Branch manager E gm om quality, and VPBank’s reputation? l.c What is your opinion towards VPBank’s technology performance, bank location, service n a Lu n va y te re th 51