A study on the enhancement of personal loans quality at vietnam international joint stock commercial bank – hai ba trung branch

BANKING ACADEMY OF VIETNAM FOREIGN LANGUAGES FACULTY - - GRADUATION THESIS A STUDY ON THE ENHANCEMENT OF PERSONAL LOANS QUALITY AT VIETNAM INTERNATIONAL JOINT - STOCK COMMERCIAL BANK – HAI BA TRUNG BRANCH Student : Vu Thi Thu Van Class : K20ATCC Academic Year : 2017 - 2021 Student ID : 20A7510201 Advisor : Ms Pham Thi Hoang Anh (Assoc Prof.PhD) Ha Noi, May 2021 Tai ngay!!! Ban co the xoa dong chu nay!!! 17014125818431000000 Graduation Thesis Banking Academy CERTIFICATE OF ORIGINALITY I would like to reassure that my graduation thesis is conducted by myself with the support of the instructor and not copy the research works of others The secondary information data used in the article is sourced and explicitly cited I take full responsibility for this certificate of originality! Ha Noi, May 2021 Student Vu Thi Thu Van Student: Vu Thi Thu Van i Student ID: 20A7510201 Graduation Thesis Banking Academy ACKNOWLEDGEMENTS I would like to express my deep and sincere gratitude to my supervisor, Ms Pham Thi Hoang Anh (Assoc Prof PhD), for helping me in the process of the research and providing invaluable guidance throughout my research Ms Hoang Anh has made a suitable suggestion and detailed comments to make my article as complete as possible It was a great privilege and honor to work under her guidance I also take immense pleasure in thanking all of my teacher in Foreign Language Faculty at Banking Academy for their compensation and expensive lessons during the past years of study Finally, my special thanks are extended to Vietnam International Joint-Stock Commercial Bank – Hai Ba Trung Branch Especially, the Board of Directors of the bank has expedited me to go to the practice and enthusiastically supported me during the training period At the same time, I would like to thank the staff working in the personal client room for enthusiastically helping and facilitating me during the training process at the branch Student: Vu Thi Thu Van ii Student ID: 20A7510201 Graduation Thesis Banking Academy TABLE OF CONTENT CERTIFICATE OF ORIGINALITY i ACKNOWLEDGEMENTS ii TABLE OF CONTENT iii LIST OF ABBREVIATIONS .v LIST OF TABLES vi LIST OF FIGURES vii ABSTRACT viii CHAPTER 1: INTRODUCTION .1 1.1 Introduction 1.2 Background of the study 1.3 Objective 1.4 Significance of the study 1.5 Scope and limitation of the study 1.5.1 Limitation of the study 1.5.2 Scope of the study .5 1.6 Definition of terms .5 CHAPTER 2: LITERATURE REVIEW AND THEORETICAL FRAMEWORK 2.1 Literature review 2.2 Theoretical framework 2.2.1 Theoretical Background of Personal Loans at Commercial Bank 2.2.2 Theoretical Background of Personal Loans Quality .14 CHAPTER 3: PROCEDURE OF SECONDARY DATA COLLECTION AND ANALYSIS/ RESEARCH METHODOLOGY 20 3.1 Locale of the study 20 3.2 Research design/ methodology 21 3.2.1 Method Alignment 21 3.2.2 The Participants .21 3.2.3 The Instruments .21 3.3 Sources of Secondary Data 24 3.4 Validity and Reliability of data analysis 24 Student: Vu Thi Thu Van iii Student ID: 20A7510201 Graduation Thesis Banking Academy 3.5 Self Reflection on Secondary Data Collection Analysis 25 CHAPTER 4: FINDINGS AND DISCUSSION 27 4.1 Findings and Discussion of the business operations at VIB Hai Ba Trung Branch for three years (2018-2020) 27 4.1.1 Business Results of VIB Hai Ba Trung Branch from 2018 to 2020 .28 4.1.2 Capital Mobilization 31 4.1.3 Outstanding Loans 35 4.1.4 Indicator reflecting the quality of business activities .39 4.2 Findings and Discussion of general assessment on Personal Credit Activities at VIB – Hai Ba Trung 47 4.2.1 Advantages 47 4.2.2 Disadvantages 48 4.2.3 Main causes limiting personal loans quality 49 4.3 Conclusion 52 CHAPTER 5: CONCLUSION AND RECOMMENDATION 53 5.1 Orientation for enhancing personal loans quality at VIB Hai Ba Trung Branch in the period 2021 - 2026 53 5.2 Solutions for enhancing personal loans quality at VIB Hai Ba Trung Branch 56 5.2.1 Product development Solutions 56 5.2.2 Solutions to improve credit quality 57 5.2.3 Human resource development Solutions 59 5.2.4 Solutions to enhancing technology infrastructure 60 5.2.5 Solutions to broaden customer relations and marketing activities 60 5.3 Recommendations 62 5.3.1 Recommendations to The Goverment and The State Bank of Vietnam 62 5.3.2 Recommendation to The head office of Vietnam International Joint Stock Commercial Bank 64 5.4 Final thoughts .65 REFERENCES APPENDIX Student: Vu Thi Thu Van iv Student ID: 20A7510201 Graduation Thesis Banking Academy LIST OF ABBREVIATIONS Abbrevations Meanings VIB Vietnam International Joint-Stock Commercial Bank CBs Commercial Banks HBT Hai Ba Trung Branch NPLs Non-performing Loans KPIs Key Performance Indicators IMF International Monetary Fund UNCTAD United Nations Conference on Trade and Development FDI Foreign Direct Investment WTO World Trade Organization ILO International Labour Organization OCB OricomBank ACB A Chau Joint-Stock Commercial Bank CIF Customer Information Files CIC Credit Information Center SBV State Bank of Vietnam VND Viet Nam Dong Student: Vu Thi Thu Van v Student ID: 20A7510201 Graduation Thesis Banking Academy LIST OF TABLES Table 4.1: VIB Hai Ba Trung’s Outstanding Loans based on Page: 37 customer types from 2018 to 2020 Table 4.2: Loss Loan Provision of VIB Hai Ba Trung over the Page: 42 years (2018-2020) Student: Vu Thi Thu Van vi Student ID: 20A7510201 Graduation Thesis Banking Academy LIST OF FIGURES Diagram 1.1: The proportion of personal credit growth of banks in Page: 2020 Diagram 1.2: Lowest Personal Loans IR in 12/2020 Page: Diagram 1.3: Credit Granting Process Page: 13 Diagram 4.1: Total Operating Income of VIB Hai Ba Trung (2018- Page: 28 2020) Diagram 4.2: Total Mobilized Capital of VIB Page: 32 Diagram 4.3: Mobilized Capital based on customer types Page: 34 Diagram 4.4: Total Outstanding Loans of VIB Hai Ba Trung Branch Page: 36 (2018-2020) Diagram 4.5: VIB Hai Ba Trung’s Outstanding Loans based on Page: 38 customer types from 2018 to 2020 Diagram 4.6: NPLs and Overdue Debt Ratio of VIB – Hai Ba Trung Page: 40 Branch in period 2018 – 2020 Diagram 4.7: Customer survey results on the ability to meet the needs Page: 43 of customer at the HBT Branch Diagram 4.8: Customer survey results on the safety of credit transactions at VIB HBT Page: 44 Diagram 4.9: Customer survey results on utilities of products Page: 45 Diagram 4.10: Customer survey results on satisfaction with the service attitude of employees Page: 46 Student: Vu Thi Thu Van vii Student ID: 20A7510201 Graduation Thesis Banking Academy ABSTRACT It is undeniable that personal credit is a very potent type of service, promising to bring great profits to commercial banks Accordingly, enhancing personal loans has become a priority goal of the entire financial industry in the context of fiercely competitive markets The thesis "A STUDY ON THE ENHANCEMENT OF PERSONAL LOANS QUALITY AT VIETNAM INTERNATIONAL JOINTSTOCK COMMERCIAL BANK – HAI BA TRUNG BRANCH" will shed light on issues related to personal credit development at VIB This includes an overview of credit operations in individual customer segments and business efficiency At the same time, the thesis aims to analyze the lending situation of VIB Hai Ba Trung while following retail model banks and find their current weakness and lending Finally, to come up with some solutions to attract customers among this animated market In addition, the author also made several recommendations to the Government, State bank of Vietnam, and Head Office of VIB to contribute to the evolution of personal loan quality at commercial banks in general and VIB Hai Ba Trung in particular Student: Vu Thi Thu Van viii Student ID: 20A7510201 Graduation Thesis Banking Academy CHAPTER 1: INTRODUCTION 1.1 Introduction Nowadays, as a developed society, people's lives are increasing, accompanied by significant improvement of human beings in manufacturing sectors such as science and technology, transportation, home appliances Thank that, demand for capital use of people and businesses that have pushed to the maximum Along with the burgeoning of commodity production, the commercial banking system is expanding while confirming its vital role in the economy and finance In particular, credit activity is considered the foundation of the entire banking industry, accounting for a large proportion of the bank's total assets profitably After experiencing many periods of hardship from world economic crises such as the 1997 Asian financial crisis, 2008 world financial crisis; Now, the banking markets of many countries, include Vietnam's banking system, have been dramatically reformed and arranged in a new order By multi-sector restructuring activities, they have succeeded in improving their quality and diversifying product items In specific, the credit products for the individual customer segment evaluate as one of the high potential products which have a vibrant market, with the participation of most commercial banks In line with McKinsey's forecasts (2020), Asia would reach more than $900 billion in retail banking revenue, with an average growth rate of 14% per year by the end of 2020 Of course, the retail banking market in Vietnam will catch up with the general trend of the world, and the potential for personal lending in the future is enormous Due to Le Thi Anh Quyen's (2020) report, personal loans account for 6070% of total loan sales (at VIB or Agribank ) and are growing higher and higher However, the growth rate of customer loans in the banking system still had a strong differentiation Some banks had negative growth, while another bank had a growth rate of over 10%, as indicated in diagram 1.1 Overall, the consequence that bankers are flush with cash Student: Vu Thi Thu Van Student ID: 20A7510201