Assessment of enterprise loans management at asia commercial bank hoang cau branch for the period of 2017 2019

BANKING ACADEMY OF VIETNAM FACULTY OF FOREIGN LANGUAGES GRADUATION THESIS TOPIC: ASSESSMENT OF ENTERPRISE LOAN MANAGEMENT AT ASIA COMMERCIAL BANK – HOANG CAU BRANCH FOR THE PERIOD OF 2017-2019 Student : Nguyen Hoang Dieu Class : K20ATCC Academic year : 2017 – 2021 Student ID : 20A7510030 Advisor : Dr Can Thuy Lien Hanoi, May 2021 Tai ngay!!! Ban co the xoa dong chu nay!!! 17014125816121000000 CERTIFICATE OF ORIGINALITY I hereby undertake that the thesis “Assessment of enterprise loans management at Asia Commercial Bank - Hoang Cau branch for the period of 2017-2019” is completed based on the results of my research and that these findings have not been used for any other studies of the same level I understand that the work submitted may be reproduced and/or communicated to detect plagiarism Author’s signature Nguy Approved by SUPERVISOR (Dr) Date: ………………………………… i ACKNOWLEDGEMENT I am indebted various great thanks to many people for giving support me while doing this thesis In the first place, I would like to express honest appreciation to Dr Can Thuy Lien for her guide in doing this thesis She spent time and effort discussing and giving me helpful advice to ensure that the research was kept on the right track Consequently, I was able to complete the research successfully Secondly, I would like to thank all the lecturers of Banking Academy who are always enthusiastic for helping me gain knowledge and experience during the studies Thirdly, I would like to express my gratitude to the leaders of ACB’s branches in general and the ACB Hoang Cau branch, particularly for their help and support during my studies I also thank my family for their encouragement, support as well as motivation Last but not least, I would like to thank all of my friends who encourage my spirit and put much effort into helping me check my writing styles Thank you! ii TABLE OF CONTENTS CERTIFICATE OF ORIGINALITY i ACKNOWLEDGEMENT ii TABLE OF CONTENTS iii LIST OF ABBREVIATIONS v LIST OF TABLES vi LIST OF FIGURES vii ABSTRACT viii CHAPTER 1: INTRODUCTION 1.1 Introduction 1.2 Background of the Study 1.3 Objectives of the Study 1.4 Significant of the Study 1.5 Scope and Limitation of the Study 1.6 Definition of Terms CHAPTER 2: LITERATURE REVIEW 2.1 Literature review 2.2 Theoretical and Conceptual framework 10 2.2.1 Theoretical framework 10 2.2.2 Conceptual framework 11 CHAPTER 3: RESEARCH METHODOLOGY 13 3.1 Locale of the study 13 3.2 Research Design 13 3.4 Source of Secondary data 14 3.5 Evaluation criteria of Secondary data 14 3.6 Statistical treatment 15 3.7 Reliability and validity 15 CHAPTER 4: FINDINGS AND DISCUSSION 16 4.1 Overview of Asia Commercial Joint Stock Bank and the ACB Hoang Cau branch 16 4.1.1 Overview of Asia Commercial Joint Stock Bank 16 iii 4.1.2 Organizational structure at ACB Hoang Cau 17 4.2 Credit operation at ACB Hoang Cau 18 4.2.1 The orientation of lending to enterprise customers at Asia Commercial Bank - Hoang Cau branch until 2022 18 4.2.2 Lending regulations to enterprise customers at ACB Hoang Cau 20 4.2.3 The basis of making loan plan of ACB - Hoang Cau branch 21 4.2.4 Lending process at ACB Hoang Cau to enterprise customers 23 4.3 Capital mobilization at ACB Hoang Cau 26 4.4 Enterprise loans management at ACB Hoang Cau 31 4.4.1 Enterprise loan management planning at ACB Hoang Cau 31 4.4.2 Outstanding loan of enterprise customers at ACB Hoang Cau 34 4.4.3 Enterprise customers debt collection and debt collection coefficient 37 4.4.4 Bad debt caused by enterprise customers at ACB Hoang Cau from 2017 to 2019 38 4.4.5 Provision for credit risks to enterprise customers at ACB Hoang Cau from 2017 to 2019 39 4.4.6 Examine and supervise the implementation of the enterprise loan plan at ACB Hoang Cau from 2017 to 2019 42 CHAPTER 5: SUMMARY OF FINDING, CONCLUSION, AND RECOMMENDATION 44 5.1 Summary of findings 44 5.2 Conclusion 44 5.3 Recommendation 45 5.3.1 Orientation for perfecting management of lending activities at ACB Hoang Cau 45 5.3.2 Recommendations to the State Bank 46 5.3.3 Recommendation to the ACB Hoang Cau 46 5.3.4 Recommendation to relevant Departments 48 BIBLIOGRAPHY iv LIST OF ABBREVIATIONS ACB ACB Hoang Cau CPI CASA GDP GR KPI Vietcombank Sacombank SBL SMEs VND Vietin Bank Techcombank VinGroup VIP Asia Commercial Bank Asia Commercial Bank – Hoang Cau Branch Consumer Price Index Current Account Savings Account Gross Domestic Product Growth rate Key Performance Indicator Joint Stock Commercial Bank for Foreign Trade of Vietnam Sacombank Leasing Small and Medium Enterprises Viet Nam Dong Vietnam Joint Stock Commercial Bank for Industry and Trade Vietnam Technology and Commercial Joint Stock Bank VinGroup Joint Stock Company Very Important Person v LIST OF TABLES Table 4.1: Regulations of enterprise loan at ACB Hoang Cau 20 Table 4.2: Enterprise lending plan at ACB Hoang Cau from 2017 to 2019 22 Table 4.3: Capital mobilization at ACB Hoang Cau from 2017 to 2019 (Unit: 26 billion VND) Table 4.4: Capital mobilization at ACB Hoang Cau from 2017 to 2019 27 classified by customer group (Unit: billion VND) Table 4.5: Capital mobilization at ACB Hoang Cau from 2017 to 2019 29 classified by term of deposit (Unit: billion VND) Table 4.6: Capital mobilization at ACB Hoang Cau from 2017 to 2019 30 classified by currency (Unit: billion VND) Table 4.7: Outstanding loan at ACB Hoang Cau from 2016 to 2019 (Unit: 32 billion VND) Table 4.8: Outstanding loan at ACB Hoang Cau from 2017 to 2019 (Unit: 34 billion VND) Table 4.9: Outstanding loan of enterprise customers at ACB Hoang Cau from 36 2017 to 2019 (Unit: billion VND) Table 4.10: Enterprise debt collection and debt collection coefficient at ACB 37 Hoang Cau from 2017 to 2019 (Unit: billion VND) Table 4.11: Bad debt caused by enterprise customers at ACB Hoang Cau from 38 2017 to 2019 (Unit: billion VND) Table 4.12: Provision for credit risks to enterprise customers at ACB Hoang 39 Cau from 2017 to 2019 (Unit: billion VND) Table 4.13: Results of post-loan inspection of enterprise customers at ACB 42 Hoang Cau from 2017 to 2019 vi LIST OF FIGURES Figure 2.1: Theoretical framework of enterprise loan management at ACB 10 Hoang Cau Figure 2.2: Conceptual framework 11 Figure 3.1: Research design process 13 Figure 4.1: Organizational structure at ACB Hoang Cau 17 Figure 4.2: Lending process at ACB Hoang Cau to enterprise customers 23 Figure 4.3: Outstanding loan of individual and enterprise customers at ACB 35 Hoang Cau from 2017 to 2019 (Unit: billion VND) Figure 4.4: Provision for credit risks to enterprise customers at ACB Hoang 41 Cau from 2017 to 2019 (Unit: billion VND) vii ABSTRACT Assessment of enterprise loan management at Asia Commercial Bank – Hoang Cau Branch for the period of 2017-2019 Author: Nguyen Hoang Dieu Keywords: Enterprise loan, enterprise loan management, commercial bank Supervisor: Dr Can Thuy Lien This study, “Assessment of enterprise loan management at Asia Commercial Bank – Hoang Cau Branch for the period of 2017-2019”, aims to study enterprise loan management at ACB – Hoang Cau Branch The study has objectives of systematizing several theoretical and practical matters about enterprise loan management at ACB – Hoang Cau Branch; studying the situation of enterprise loan management – Hoang Cau Branch; and providing some solutions to improve the quality of enterprise loan management at ACB – Hoang Cau Branch Moreover, the qualitative research method is applied with secondary data is collected from books and journals about enterprise loan management Internal reports about ACB’s credit activities and enterprise loan management will be collected between 2017 and 2019 Significant findings show that ACB – Hoang Cau Branch has already had effectively enterprise loan management activities, including outstanding loan, debt collection and debt collection coefficient, bad debt, provision risk, and post-loan inspection Although ACB Hoang Cau has reached many achievements, this branch still faced many challenges Potential risks are still existed due to management gaps and flaws caused by loan officers The lending process is not optimized since there are some regulations and laws had to follow The Board of Directors and ACB Headquarter have high expectations but they did not give out suitable plans viii CHAPTER 1: INTRODUCTION 1.1 Introduction Vietnam's economy is in the stage of growth and strong integration into the world economy That has brought both opportunities and challenges for many economic sectors in general and the banking industry In recent years, the operation of the Vietnamese banking system is in the process of reform, approaching a more developed economy Banking is a very susceptible business in the economy so far because products are money Therefore, most of the business sectors of the bank always face more challenges Among them, the bank's credit activity is one of the main activities It determines the existence and development of a bank in the market economy Credit activities often bring significant profits to commercial banks, accompanied by changes in the domestic economy, and the credit performance of commercial banks has also changed for many years On the other hand, with today's fierce competition, almost every business is always a problem when planning to start a business or expand a business To have a source of capital that meets the needs and a good and efficient balance between available capital and bank loans is not easy for businesses From there, choosing a reliable bank, and loan procedures and conditions that are suitable for each business are always their concerns Today, many banks are competing fiercely in enterprise loan issues and offer many different opportunities and preferential policies to encourage businesses to borrow capital Catching up with that situation, Asia Commercial Bank has also set up development policies to attract loans from domestic enterprises Since then, the bank's enterprise credit activities have been paid more attention, and efficiency has been improved Specifically, at the Asia Commercial Joint Stock Bank - Hoang Cau Branch, enterprise loans have been paid attention to and improved quality after many years of establishment The branch has successfully fulfilled its assigned targets and is constantly striving to improve the efficiency of loans to enterprise customers soon