OVERVIEW OF BIDV, THĂNG LONG BRANCH AND THE INTERNSHIP
Overview of BIDV
Full name: Joint Stock Commercial Bank for Investment and Development of
Slogan: Sharing opportunities, cooperating successfully.
Head-Office: BIDV tower, 35 Hang Voi Street, Hoan Kiem District, Ha Noi
System of BIDV: 190 branch and 815 Transaction Office, 1.824 ATM in Vietnam.
Activities: Banking, insurance, securities, financial investment.
+ Individual Customers: Deposits – Savings, Personal loan, E-Banking
+ Corporate Customers: Loans & Guarantees, Trade finance, Deposits
+ Financial Institutions: Global Markets, Banking services, Deposits
- Target: BIDV will constantly innovate and develop to become one of the top 20 banks in Southeast Asia by 2030.
Overview of BIDV- Thang Long Branch
Location : 8 Pham Hung Street, Dich Vong Hau Ward, Cau Giay District, Hanoi
+ Individual Customers: Deposits – Savings, Personal loan, E-Banking
+ Corporate Customers: Loans & Guarantees, Trade finance, Deposits
+ Financial Institutions: Global Markets, Banking services, Deposits
• Targets: Complete the targets, Become the excelent branch of BIDV
• Competitors: Vietcomabank, Vietinbank, Techcombank, Sacombank , SHB,…
Figure 1 Structure of BIDV- Thang Long Branch
(Source: BIDV-Human resource management
Picture 1 Thang Long branch Picture 2 Transaction at Thang Long branch
Currency and Fund management dept
(Source: BIDV- Thang Long branch) (Source: BIDV- Thang Long branch)
Introduction of my internship
1.3.1 The reason for choosing the topic
As the global economy continues to grow, Vietnam is experiencing significant advancements across various aspects of social life, resulting in improved incomes for its citizens This rise in income has led to an increased demand for higher living standards However, when it comes to purchasing certain products, such as cars, the average income in Vietnam still appears insufficient to meet these demands.
Therefore, banks becomes trust-worthy friends sharing financial problems with them
In late 2017, the Vietnamese government announced a reduction in import and consumer levies on various products, notably eliminating the levy on imported cars from ASEAN countries, bringing it down to 0% For instance, a car imported before January 1, 2018, valued at $10,000, would incur a selling price exceeding $20,000 due to the combined costs of export price, import tax, special excise tax, and value-added tax.
As of January 1, 2018, the value of cars in Vietnam has decreased to approximately $15,000 due to a 0% import tax, resulting in a price reduction of around $5,000, or over 100 million VND This significant change is expected to positively impact Vietnam's car market Recognizing the growth potential in this sector, many banks have intensified their car loan services to meet customer demand, with BIDV specifically focusing on enhancing its offerings in this market.
In the past, BIDV did not offer car loans; however, in 2018, the bank recognized the potential of this product and aims to enhance its development Therefore, I intend to conduct research and contribute to the advancement of their car loan offerings.
- Choose car loan service for studying and service development.
- Learn methods to approach customer, to face-to-face communicate and via phone from the experienced staff
- Use telephone directory to start
- Knowing clearly activities of the bank
- Knowing clearly about car loan
- Knowing use BIDV's customer record management system
- Learn how to advise customers from tutor consulting with some acquaintances.
- Assist tutor in meeting customer
- Assist tutor in input the old data into management system of the bank.
- Finish the learning process from the tutor.
- Finding customers by phone from bank- provided list.
- Meet scheduled customers with tutor.
- helping tutor create the records for customers
- Call customers who lack some loaning papers
- Finish the learning process from the tutor.
- Enough knowledge of car product to advise customers
- Start working as an official staff under the management of the tutor.
- Advising Customers at Pham Hung Showroom Huyndai
- Make phone calls from provided bank list
- advising customers at Pham Van Hong
- Get answers from the tutor and improving communication skill
- advising successful for one customer at the showroom
- Help the old employees entering the data into bank's system.
- Assist customers open credit card customers,
- Transfer the loan profile of customers to the appraise dept
- Check for record appraisal results, inform customers their loan agree or not
- Accomplishment the records for successfully consulted customers.
- Make phone calls with customers from bank's provided list.
- Monday, Tuesday (30/4-1/5): days off (International Labour Day)
- Complete papers and records, hand over April tasks to instructor
- opening credit card for customer
- Help the tutor entering the data into
- Successful advise for 2 customer in showroom.
- Successful advise for 1 customer by phone.
- Do research on lending market Week 12
- Help the old employees entering the data into bank's system.
- Meet customers with the tutor
- Make phone calls to seek for customers
- complete all the documents, send back to the instructor
- presenting the internship report to manager and confirming the internship.
- Successful advise for 1 customer at showroom.
- Geting data at the bank and starting write report
INTERNSHIP IMPLEMENTATION AT BIDV, THĂNG LONG BRANCH
The internship position, responsibilities and tasks
After completing a month of training at the main branch, I was assigned by the branch manager to support team 2, focusing on individual customer relationships, at the Lang Quoc Te Thang Long transaction office, where I worked as a salesman under the Thang Long branch's supervision.
- My position is clearly stated in the chart:
Figure 2 The structure of the department and My position
(Source: BIDV- Thang Long branch)
In my role, I served as a consultant for car loan services within the Individual Customer Department, assisting my supervisor in completing various tasks This department comprises two main teams: the Individual Customer Team and the Enterprise Customer Team Specifically, I was part of Team 2 within the Individual Customer Team at the Lang Quoc Te Thang Long transaction office, which consists of six teams dedicated to serving individual clients.
- I was instructed by the instructor to understand all the loan packages, which assists each client's needs in accordance with financial capacity
Customer relationship individual department team 1 team 1 team 2team 2
DAO xuan phong DAO xuan phong meme team 3 team 3 team 4team 4
Customer relationship enterprise departmentCustomer relationship enterprise department
Understanding car loan products allowed me to confidently assist customers in need, enhancing my ability to conduct research on car loan services effectively.
+ Seek for customers who want to use the car loan service of the bank
Contact customers to assess their needs and our financial capabilities, while adhering to bank regulations I will guide clients on the necessary documentation, conditions, and interest rates applicable to their situation.
+ Appraisal report in accordance with the bank's procedures and submit to other management levels of loan approval or loan refusal.
+ Draw up credit contracts, collateral contract and related papers.
+ Keep track and create disbursement records according to customer' requirement.
- Helping tutor prepare loaning record
- finding customers by phone from bank-provided list.
- advising customers at showroof huyndai
- assist customers open credit card, debit card, saving account
- check for record appraisal results, inform customers their loan agree or not
- Meet scheduled customers with tutor.
- Helping tutor Check the record of customers
- Helping tutor create the records for agree customers
- Call customers who Not enough loan document
- Assist tutor in input the old data into management system of the bank.
- Transfer the loan profile of customers to the appraise dept at main branch
Overview of car loan at Thang Long branch
Table 3 Process of car loan
My ( and my team's ) duties
- Making call with the potential customer list from the bank
- Advise customers at car showroom that linked with the bank,
- Referral from friends or old customers
- Clients who have demand and come to the bank themselves.
- Loan condition, interest rate, procedure.
- Answer customer’s questions related to the loan package
-Collect customer records according to bank regulations.
-Re-check customers’ profile and inform customer to complement if the profile not enough or lack notarized documents.
-Transfer the loan profile of customers to the appraise dept.
(Customer’s profile will be sent to the in charge department to appraise and analyze to determine customer’s repayment capacity)
-Appraisal department concludes the customer eligible:
+ The staff prepare loan contracts + Getting customer signatures + Manager approve
+ Transfer the contract to the appraise dept to re-checking
-Appraisal department concludes the customer not eligible:
+ inform customers their loan disagree and find solution
( The staff inform for showroom about loan contract)
7 Disburseme Finance-Economy No information nt Dept The bank will transfermoney to the showroom account
(Source: Regulation of BIDV – decision number 7377/QD-NHBL car loan)
2.2.2 The Car loan service of BIDV- Thang Long branch
• Target customer: Vietnamese people who are over 18 years old with the monthly income equal to or above 15 million VND and live at most 30km around Hanoi.
• The maximum of loan duration is extended to 7 years.
• The loan amount is up to 70% the car value, if customer has other collateral such as land, the maximum amount is 100%.
• In addition, our customer can have a credit card with free annual fee for the first year Customer can use it to buy car insurance, accessories and service.
+ Foreign individuals but permanently living or working in Vietnam.
+ Have stable income and guarantee solvency.
+ Have collateral property for loans The guaranteed assets is the car Other assetsbelonging to the customer/ third side (ex: house, savings book or car)
- ID card/passport and permanent residence / temporary residence book
+ Documents regarding the car: Trading contract, bills, etc.
+ Documents proving debt repayment: Labour contract, timesheet, etc.
BIDV offers a range of preferential interest rates, enabling customers to select a loan package that best suits their needs The preferential package 3 is specifically designed for individuals facing initial financial challenges who are seeking to secure a loan.
Monthly interest rates will be lowered, with a preference for fixed long-term interest rates to meet financial needs effectively The second option offers a competitive fixed interest rate of 7.8% per annum for the first 12 months, making it a popular choice among customers due to its flexibility, fixed duration, and reasonable rates.
The reality of car purchasing at the branch
Total loan of individual department
Car loan Billion/VND % Billion/VND %
(Source: BIDV- Thang Long Branch Financial Report in 2016 & 2017)
Total loan of individual department Car loan
(Source: BIDV- Thang Long branch)
In 2017, BIDV experienced significant growth, with outstanding loans increasing from 5,893 billion at the end of 2016 to 6,528 billion by the end of 2017, reflecting a robust 10.8% rise However, the bank faced challenges in its car loan services, experiencing a decline of 83 billion in total car debt during the same year.
Consumer demand for cars has declined as buyers anticipate government policies, particularly the elimination of import taxes on cars in 2018 This change is expected to significantly lower car prices in Vietnam, ultimately stimulating consumer demand for vehicles and related services, such as car loans.
Some business cases
Income/month: VND 30 million (Data from statement )
Marital status: Married and have 2 children
A doctor at Vietnam National Children's Hospital for five years is seeking a loan to purchase a Hyundai Accent 1.4 AT sedan valued at VND 596,200,000 She aims to finance 100% of the car's value over a seven-year term, using her current residence as collateral for the mortgage.
The disbursement was denied due to the applicant's ineligibility stemming from a Group 2 bad debt status Although her debt is relatively small and has been outstanding for less than two months, I recommended securing a loan against her mortgage and reducing the loan amount to 70% of the car's value; however, we were unable to reach an agreement with the customer.
Income/month: VND 25 million (Data from statement )
After three years of employment at Sudico (SONG DA Urban and Industrial Zone Investment and Development Joint Stock Company), she is looking to purchase a Hyundai Grand I10 sedan 1.2 AT 2018, priced at VND 415,000,000 To finance this purchase, she seeks a loan covering 100% of the car's value, to be repaid over a period of seven years.
The loan application was not approved due to the applicant's ineligibility, stemming from her unstable income of VND 6 million per month plus commission, which is insufficient to cover the monthly interest payments Despite suggestions to use her house or savings account as collateral, she lives with family and does not own a home, and she declined to mortgage her savings Given her low salary and lack of collateral, the likelihood of repayment appeared minimal, leading to the rejection of her loan request.
Income/month: VND 18 million (Data from statement )
Marital status: Married and have 2 children
After six years of employment at Phuc Hung Holdings Construction Jsc, he seeks a loan to purchase a Hyundai Grand Sedan valued at VND 420,000,000 He aims to finance 100% of the car's value over a four-year term, using his house as collateral Following a thorough assessment, his profile meets the bank's regulations, leading to the approval of his loan application.
Income/month: VND 40 million (Data from statement )
Marital status: Married and have 1 child
A restaurant owner seeks a loan to purchase a Hyundai Santafe valued at VND 1,070,000,000, intending to finance 50% over five years However, as he is not an employee, obtaining an unsecured loan proved challenging due to difficulties in proving income To enhance his chances of approval, I recommended switching to a mortgage loan, but he preferred to avoid that option Instead, I suggested reducing the loan term to four years to mitigate the bank's risk After evaluating his profile, it aligned with the bank's regulations, leading to the approval of his loan.
Income/month: VND 17 million (Data from statement )
After two years of employment at Crowne Plaza West Hanoi, she seeks to purchase a 2018 Hyundai Grand I10 1.0MT valued at VND 355,000,000 She is requesting a loan covering 70% of the car's value for a term of seven years Following a thorough assessment of her profile, it aligns with the bank's regulations, leading to the approval of her loan application.
Competitors Analysis
Table 5.Comparing BIDV with competitors
- Free consultation on insurance products, free car insurance for the first 6 months of BIDV Insurance Corporation (BIC)
- Buying insurance with preferential price at Vietinbank Insurance (VBI)
- The refund advance penalties: 2-5% of the refund advance amount
- Fast profile revision time of 24 hours.
- Receive profiles at the transaction
- Receive profiles at transaction office
- Receive profiles at transaction office office or via the staffs’ email
No extra cost No extra cost 3-5% of the total contract value for the personal finance consultant.
That’s car or saving account, home,…
(Source: Summary from the websites of competitor in the market and regulation of BIDV)
BIDV, one of Vietnam's top four banks, stands out in the car loan market by offering lower interest rates than Vietinbank and Techcombank Additionally, BIDV provides up to 100% financing, surpassing competitors who typically offer only 70-80% To enhance customer convenience, BIDV also allows online profile submissions, saving clients both time and money.
PEST
Vietnam has officially signed the ASEAN Trade in Goods Agreement (ATIGA), which allows for a 0% import tax rate on cars from ASEAN countries, provided they meet all specified requirements.
- The Government has enacted the Decree 125/2017/NĐ-CP, domestic motor vehicles assembly company will be imposed the component import tax rate at 0%
In 2018, the 0% car import tax rate from ASEAN raised concerns about a significant surge in imported vehicles in Vietnam To safeguard domestic car manufacturing and regulate the influx of imported cars, the Vietnamese Government enacted Decree 116/2017/NĐ-CP, establishing stringent requirements for the import and trade of motor vehicles.
- CIRCULAR NO.39/2016/TT-NHNN on December 30, 2016 prescribing lending transactions of credit insitutions and foreign bank branches with individual customers.
Decree No 7377/QD-NHBL on 17/11/2014: Regulation on car loan product with individual customers and households
Decree No.1220/QĐ-BIDV on 14/03/2017: on amendment of and addition to a number of articles of Decree No 7377/QĐ-NHBL om 17/11/2014on car loan product with individual customers and households.
- Vietnam economy has increased rapidly
- In 2017, GDP reaches 6.81%, 6.7% higher than expected, inflation is at 3.53%, 4% lower than estimated Export increase by 21.3%, 3 times higher than the planned target.
- Participating in international trade organization such as WTO, APEC,ASEM, has attracted international investment and created competitive environment to motivate the development of domestic enterprises
Vietnam has developed diplomatic relations with over 170 countries globally, enhancing its trade connections by exporting goods to more than 230 nations and territories The country has also signed over 90 bilateral trade agreements and nearly 60 agreements focused on encouraging and protecting investments.
- Vietnam is implementing the commitment on special preferential import tax under 10 FTA framework
Vietnam is set to reduce tariffs on a wide range of imported goods, including food, steel, cars, automotive parts, machinery, and equipment, to facilitate increased imports By 2018, Vietnam's liberalization rate within ASEAN is projected to reach 98.2%, making it the highest among the free trade agreements (FTAs) Vietnam has signed.
Reducing tariffs has created significant opportunities for domestic enterprises, allowing them to import raw materials at lower prices and acquire higher-quality machinery and equipment compared to local options This, in turn, enables the production of goods that are both more affordable and of superior quality for consumers.
- The people’s living standard is increasing
A recent study by the Boston Consulting Group (BCG) assessed living standards in 149 countries, revealing that the quality of life for Vietnamese citizens is relatively comfortable Notably, this level of comfort is comparable to nations with a GDP exceeding $10,000, even though Vietnam's GDP stands at approximately $5,200 per year.
As economies integrate and develop, rising per capita income leads to increased demand for housing and automobiles Individuals seek not only modern vehicles but also luxury options, prioritizing safety and convenience in their purchasing decisions.
Historically, car buyers were predominantly high-income individuals or middle-aged customers with savings However, car manufacturers have now diversified their offerings to provide affordable options for a broader audience Additionally, support from banks and finance companies has led to a wider age range among car buyers, making vehicle ownership accessible to more people than ever before.
In Vietnam, owning a car is more than just a means of transportation; it symbolizes personal status and social class While safety is a primary concern for families, the desire to showcase one's social standing plays a significant role in the decision to purchase a vehicle.
- Car manufacturers are launching new models with smarter features such as HUD glass, satellite positioning and online connectivity, and affordable price for every customer.
- Developing Hybrid technology for fuel saving and emission reducing to protect the environment.
- Integrated radar, laser, and camera technology for safe driving
+ In the recent years, many car manufacturers has integrated several safe driving function on their products.
+ In which, the most notable ones are Forward Collision Alert, Blind SpotInformation System or Auto Emergency Braking, Obstacle Avoidance Sensor, Night ViewAssist Plus,
SWOT analysis
After three months of research on car loan product I have summarized the strengths, weaknesses, threats, opportunities to help banks find strategies suitable for developing car loan products.
- Prestigious bank with 51% state capital
- Not much investment in advertising
- Small market share for car loans.
- Not have close cooperation with car distributors.
-Government’s preferential policies for car manufacturing.
-Car manufacturers has many models with varied prices, meeting customers’ demand.
-Higher income of people => The demand is increasing day by day
- Other competitors has similar products.
- Car loan haven’t been paid much attention => smaller market share compared to other competitors who have paid much attention such as international banks, small banks and financial company
(Source: BIDV- Thang Long branch)
To boost customer acquisition, the branch should enhance its advertising efforts and implement strategies to attract clients, such as offering gifts, sending holiday cards, and providing tickets to sponsored entertainment events.
- Cooperate with more car distributors such as: THACO, HAXACO, Toyota,…
- Cooperate with the car marketing staff, training them on skills to advise clients on BIDV's loan packages
- Change the interest rate to attract more customers.
- Increase the loan period, help customer to take the initiative in loan repayment.
In Vietnam, when customers borrow money from banks to purchase a car, they typically only acquire civil liability insurance However, this leaves them vulnerable to risks such as theft, trade without legal documentation, and accidents that can damage the vehicle To mitigate these risks and safeguard their collateral, banks should require customers to obtain comprehensive vehicle and theft insurance, designating the bank as the beneficiary until the loan is fully repaid.
KPI and KPR
Table 7 Monthly KPI's customer relationship staff
Car loan VND No Target
(Source: BIDV- Thang Long branch)
The table outlines the monthly targets for individual relationship staff at BIDV, which include various financial products like savings, insurance, and bonds Despite offering a diverse range of loan options such as home, car, business, and study abroad loans, BIDV has not clearly defined specific targets for each loan type The primary goal for relationship staff is to achieve a total disbursement of 9 billion VND across all loan categories.
Target Unit Result of car loan
Car loan VND 0 665 mil 540 mil
Insurance product VND 0 11 mil 2.5 mil
total number of calls: 185 customers
As a non-BIDV staff member, I do not have a KPI and my responsibilities are managed by my tutor My primary role involves supporting the tutor in achieving his KPI, while my independent work is documented separately I have chosen to focus on researching and developing a car loan product, which allows me to concentrate solely on this area, resulting in lower targets for other projects.
BIDV staff are tasked with a monthly KPI of 9 billion VND, which encompasses various loan categories such as consumer loans, housing loans, business loans, and car loans However, the bank has not focused sufficiently on car loans, resulting in a limited customer base in this sector, which significantly impacts customer acquisition efforts.
Beside, I haven’t been an official staff, accessing the customer’s information in the system is not approved This is challenges to me in finding customers.
INTERNSHIP ASSESSMENT
Difficult
- The tutor did not have enough time to guide me and answer my questions
Due to a heavy workload at the branch, all employees are occupied, leaving me to independently seek out customers I must conduct market research and identify potential clients, but I face numerous restrictions since I am not an official bank employee.
- lack of practical experience in communication and handling work.
Although i learned communication with professional of Rouen, but the first time i give advice for customer, so I still quite scared and embarrassed when meeting with customers.
When encountering errors in my work, I often feel confused about how to address them and frequently seek assistance from my instructor or consult the official staff at the bank for guidance.
Limited relationships can hinder customer acquisition By fostering trust and ensuring customer satisfaction through excellent service, I can leverage these connections to build a network of potential clients Satisfied customers are likely to refer friends and family, ultimately leading to an increase in new clients for the bank.
- Not yet exposed to the management software of the bank.
In today's rapidly advancing technological landscape, banks are increasingly relying on proprietary software for efficient management However, the security of these systems poses challenges for users who may not be familiar with them, leading to significant difficulties in navigating their functionalities.
Internship gained
3 months internship is an unforgettable time in my life as it taught me a lot of lessons:
- First of all, I have learned how to approach customers, and find out the solution to problems that I encountered.
During my experience in the banking sector, I gained valuable insights into banking services and products, as well as the operational dynamics of the industry What stood out to me the most was witnessing the practical application of theoretical knowledge in a real-world setting This opportunity allowed me to work as a bank staff member, enhancing my understanding of the field.
Time management skills: I learned how to use my time effectively, for both working and daily activities.
Effective communication skills are essential for building strong relationships with coworkers and adapting quickly to new environments Additionally, mastering customer communication enables the gathering of valuable information to enhance interactions and service quality.
I gained valuable insights into providing timely support to others while understanding the banking industry's work culture I realized that success as a staff member requires not only professionalism but also courtesy and supportiveness towards customers Additionally, maintaining an open-minded attitude and respecting colleagues is essential for fostering a positive work environment.
Future plan
Following my internship, I received thorough training from my tutor to become an official staff member This experience allowed me to gain valuable insights and identify my weaknesses, motivating me to enhance my knowledge and skills to meet my future goals.
1.3months Join a toeic courses Achieving 650 toeic
Be approved by the manager
Over 12 months Have chance to work in the banking environment
Become the official staff of BIDV
After 3 months of imternship period at BIDV- Thang Long branch, I learned a lot from my tutor, overcoming many difficulties I have achieved 5 my targets :
- Targets 1: Try to apply learn to theories to real work.
- Target 2: Understand the operation of the bank, the duties of a salesman, how to communicate with customers, how to solve the problems
- Target 3: Try to deal with challenges and keep learning and studying.
- Target 4: Build up good relationship with the bank's employees and open other relationships.
- Target 5: Improving the skills and knowledge to become a banker
Through market research, I have made suggestions for the branch to develop car loan product and and has been recognized by manager.
The car market is experiencing significant growth due to increasing customer demand, prompting BIDV to rapidly enhance its services in this sector While BIDV currently holds a small market share in car loans, it is one of Vietnam's four largest banks, positioning it for substantial growth and improvement in its car loan offerings in the near future.