Complete financial analysis of business customers in credit activities at vietnam joint stock commercial bank for industry and trade west hanoi branch

BANKING ACADEMY Advanced Program GRADUATION THESIS COMPLETE FINANCIAL ANALYSIS OF BUSINESS CUSTOMERS IN CREDIT ACTIVITIES AT VIETNAM JOINT STOCK COMMERCIAL BANK FOR INDUSTRY AND TRADE - WEST HANOI BRANCH Student: Truong Nguyen Ha Trang Student code: 20A4011372 Class: K20CLCD School year: 2017 – 2021 Instructors: Dr Bui Thi Men Tai ngay!!! Ban co the xoa dong chu nay!!! 17014126033021000000 PLEDGE I hereby declare that is my independent graduate thesis conducted under the guidance of Dr Bui Thi Men The data stated in the graduation thesis is honest, has its source and has not been published in any other research work Student Truonng Nguyen Ha Trang ACKNOWLEDGEMENT In order to carry out this research topic, besides a small part is the effort and learning effort to develop yourself, most of it comes from the guidance and support from the instructors, the staff staff of Joint Stock Commercial Bank of Vietnam – West Hanoi Branch – Transaction Office Hoai Duc I would like to thank my lecturer - Dr Bui Thi Men, who was extremely dedicated to guiding, only thanks to her advice and assessment, so I was able to complete this thesis in the best way In addition, I would like to thank all the staffs and employees of Joint Stock Commercial Bank of Vietnam - West Hanoi Branch – Hoai Duc Transaction Office, especially Ms Nguyen Thuy Hoa - Head of Transaction Office Hoai Duc for their support , help me complete the internship at the bank smoothly and learn the most experience Hanoi, May 10, 2021 Student Truong Nguyen Ha Trang CONTENT PLEDGE ACKNOWLEDGEMENT LIST OF ABBREVIATIONS LIST OF TABLES 10 INTRODUCTION 11 The urgency of the subject 11 Research Overview 11 Research Purposes 12 Object and scope of the study 12 Research Methods 13 Structure 13 CHAPTER 1: THEORETICAL BASIS OF FINANCIAL ANALYSIS OF BUSINESS CUSTOMERS IN CREDIT ACTIVITIES AT COMMERCIAL BANK 14 1.1 Overview of corporate financial analysis in credit activities to businesses at commercial banks 14 1.1.1.The concept, role and objectives in financing analysis of corporate customer 14 1.1.1.1 Financial analysis for business managers 14 1.1.1.2 Financial analysis for investors .15 1.1.1.3 Financial performance analysis for credit providers .16 1.1.1.4 Financial performance analysis for salaried employees in the business .16 1.1.2 Information used in financial analysis of corporate customers 17 1.1.3 Content analysis 20 1.2 Factors affecting the financial analysis of corporate customers 20 1.2.1 Factor belonging to the Bank 20 1.2.1.2 Bank's capacity in loan analysis .21 1.2.1.3 Bank’s marketing activities .21 1.2.2 Factors belonging to the enterprise 21 1.2.2.2 Financial management capacity of the enterprise 21 1.2.2.3 Business loan needs 21 1.2.2.4 Reputation, brand of the business 21 1.2.2.5 Businesses not understand the bank's credit regulations 21 1.2.2.6 Financial problems of the business 22 1.2.2.7 The implementation of regulations on accounting and auditing is not good 22 1.2.2.8 Restrictions on collateral 22 1.2.2.9 Unconvincing business project plan 22 1.2.3 Regulatory environment 22 1.2.3.2 Regulatory environment 22 CONCLUSION CHAPTER 24 CHAPTER 2: SITUATION OF FINANCIAL ANALYSIS OF BUSINESS CUSTOMERS IN CREDIT ACTIVITIES AT VIETINBANK WEST HANOI BRANCH 25 2.1 Brief introduction about Vietinbank West Hanoi Branch 25 2.1.1 Bank services 27 2.1.1.1 Organizational structure at Vietinbank West Hanoi Branch 29 (Chart Organizational structure at Vietinbank West Hanoi Branch) 29 2.1.2 Business operation situation .32 2.1.2.1 Fund raising situation 32 2.1.2.2 Credit activities 33 2.1.2.3 Business results in the first months of 2020 35 2.2 Current status of financial analysis of corporate customers in credit activities at Vietinbank West Hanoi branch 39 2.2.1 Loan process 39 2.2.1.1 Searching and approaching customers 39 2.2.1.2 Receiving and checking credit applications .39 2.2.1.3 Expertise .40 2.2.1.4 Reevaluation .41 2.2.1.5 Credit approval/decision 43 2.2.1.6 Notice of approval/credit decision 43 2.2.1.7 Signing credit agreements 44 2.2.1.8 Completing procedures for obtaining credit guarantee 44 2.2.1.9 Handing over and reviewing credit application documents 44 2.2.1.10 Disbursement according to signed credit extension contract, issuance of guarantee commitment, payment order, discount 45 2.2.1.11 Inspection and supervision after credit granting 46 2.2.1.12 Handling incidents 46 2.2.1.14 Archieve credit records 47 2.2.2 Data collection and analysis methods 47 2.2.3 Content analysis 47 2.2.4 Illustration 47 2.2.4.1 Customer information .48 2.2.4.2 Production and business capacity 48 2.2.4.3 Evaluation of the production and business situation 49 2.2.4.4.Conclusion 59 2.3 Assessing the current situation of financial analysis of corporate customers in credit activities at Vietinbank West Hanoi Branch 59 2.3.1 Some results achieved 59 2.3.2 Basic limitation 61 2.3.2.1 Consumer loan products are limited and monotonous 61 2.3.2.2 The number of borrowers is limited .61 2.3.2.3 The structure of consumer loans is not balanced 61 2.3.2.4 The credit process and regulations are still complicated and not suitable for customers 62 2.3.2.5 Banking technology is still limited and underdeveloped 62 2.3.3 Reason 62 2.3.3.1 Subjective reasons .62 2.3.3.2 Objective reasons 63 CONCLUSION CHAPTER 64 CHAPTER 3: SOLUTIONS TO COMPLETE FINANCIAL ANALYSIS OF BUSINESS CUSTOMERS IN CREDIT ACTIVITIES AT VIETINBANK WEST HANOI BRANCH 65 3.1 Oriented development 65 3.1.1 General development direction 65 3.1.2 Development orientation of consumer credit activities 66 3.2.2 The credit process and regulations need to be changed reasonably .70 3.2.3 Improve the quality of information for customer financial analysis 71 3.2.4 Improve the level of technology to serve the financial work of customers 71 3.3 Some recommendations to improve credit activities 72 3.3.1 Recommendations for Vietinbank 72 3.3.2 Recommendations to the State Bank .72 CONCLUSION CHAPTER 74 GENERAL CONCLUSION 75 LIST OF REFERENCES 76 APPENDIX 77 LIST OF ABBREVIATIONS Acronyms Original BAP Beginning account payables BS Blance Sheet CFS Cash Flow Statement Co,.Ltd Limited Liability Company COGS Cost of good sold EAP Ending account payables EBIT Earning before tax NPL Non- performing loan IS Income Statement ROA Return on Assets ROE Return on Equity ROS Return on Sales LIST OF TABLES Chart Name Chart Organizational structure at Vietinbank West Hanoi Branch Chart Fund raising situation of Vietinbank from 2018 - 2020 Chart Credit structure by customer segment in Vietinbank 2020 Chart Vietinbank's CIR in the period 2015 - 2020 Table Name Table Loan balance according to the loan term of Vietinbank Table Loan balance according to debt quality of Vietinbank Table Business results in the first months of 2020 of Vietinbank Table Income structure in the first months of 2020 of Vietinbank Table Operation cost in the first months of 2020 of Vietinbank Table Property situation in the first months of 2020 of Vietinbank 10