Improving personal credit operation at vietnam international commercial joint stock bank – main transaction center branch

STATE BANK OF VIETNAM BANKING ACADEMY FACULTY OF FOREIGN LANGUAGES - - GRADUATION THESIS TOPIC: IMPROVING PERSONAL CREDIT OPERATION AT VIETNAM INTERNATIONAL COMMERCIAL JOINT STOCK BANK – MAIN TRANSACTION CENTER BRANCH Student : Pham Tran Phong Thu Class : K22ATCC Academic year : 2019 – 2023 Student ID : 22A7510009 Supervisor : Ms Can Thuy Lien (Assoc Prof Dr) Hanoi, May 2023 Tai ngay!!! Ban co the xoa dong chu nay!!! 17014127454491000000 STATE BANK OF VIETNAM BANKING ACADEMY FACULTY OF FOREIGN LANGUAGES - - GRADUATION THESIS TOPIC: IMPROVING PERSONAL CREDIT OPERATION AT VIETNAM INTERNATIONAL COMMERCIAL JOINT STOCK BANK – MAIN TRANSACTION CENTER BRANCH Student : Pham Tran Phong Thu Class : K22ATCC Academic year : 2019 – 2023 Student ID : 22A7510009 Supervisor : Ms Can Thuy Lien (Assoc Prof Dr) Hanoi, May 2023 CERTIFICATE OF ORIGINALITY I declare that the thesis “Improving personal credit operation at Vietnam International Joint Stock Bank- Main Transaction Center Branch” is the result of my research, with the assistance of my supervisor, and has not been copied from any previous research The information gathered is factual and correct If there is a copy of other studies found, I accept full responsibility Ha Noi, May 2023 Author Pham Tran Phong Thu i ACKNOWLEDGEMENTS This section is dedicated to the people I love Thanks to their companionship, I was able to complete my thesis First of all, I would like to express my sincere and deep gratitude to my supervisor, Ms Can Thuy Lien During my research, I received her detailed instructions I am very grateful for her valuable and enthusiastic guidance as I conduct my research Thanks to her support and direction, I was able to get the correct orientation while analyzing and completing my thesis It is an honor for me to have her support I also express my deep gratitude to the Banking Academy, especially the lecturers of the Faculty of Foreign Languages, who have provided me with a solid intellectual foundation The teachers have inspired and encouraged me so that I can improve my skills and be confident Thank you Banking Academy for giving me memorable university years I would also like to thank the Retail Banking Department of VIB MTCB They guided me wholeheartedly during my internship and provided data and information to complete my thesis Finally, I would like to thank my family, siblings, and friends for always encouraging and accompanying me through the most difficult time ii 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 Introduction 1.2 Background of the study .2 1.3 Objectives of the study 1.4 Significance of the study 1.5 Scope and limitation 1.6 Definition of terms .4 CHAPTER 2: LITERATURE REVIEW 2.1 Review of related literature 2.1.1 Domestic studies .7 2.1.2 Foreign studies .9 2.2 Theoretical framework 10 2.2.1 Overview of personal credit activities at commercial banks 10 2.2.2 Personal credit quality at commercial banks 13 CHAPTER 3: RESEARCH METHODOLOGY 17 3.1 Locate of the study .17 3.2 Research design 18 3.3 Validity and Reliability .19 3.4 Self-Reflection on Secondary Data Collection Analysis 19 CHAPTER 4: FINDINGS AND DISCUSSION 20 4.1 VIB’s MTCB business activities in the period from 2020 to 2022 20 4.1.1 Business results 20 4.1.2 Mobilized capital 22 iii 4.1.3 Outstanding credit 25 4.2 Current status of credit quality at VIB Main Transaction Center Branch from 2020 to 2022 27 4.2.1 Personal outstanding credit 27 4.2.2 Effective use of capital 30 4.2.3 Non-performing loans and overdue debts 32 4.2.4 Provisions for credit risk 37 4.2.5 Credit products .38 4.3 Overall assessment of credit quality 42 4.3.1 Achievements 42 4.3.2 Drawbacks 43 CHAPTER 5: CONCLUSION AND RECOMMENDATION 46 5.1 Summary of findings 46 5.2 Conclusion 46 5.3 Recommendation .46 5.3.1 To the State Bank of Vietnam .46 5.3.2 To VIB's head office 47 5.3.3 To VIB MTCB 48 CONCLUSION 53 REFERENCES 54 iv LIST OF ABBREVIATIONS WORD’S MEANING ACRONYMS CIC Vietnam National Credit Information Center CIR Cost-to-income LDR Loan-to-deposit NPL Non-performing loan SBV State Bank of Vietnam VIB Vietnam International Joint Stock Bank VIB- MTCB VND Vietnam International Joint Stock BankMain Transaction Center Branch Vietnam Dong v LIST OF TABLES Table Page Table 4.1 Business result of VIB MTCB from 2020 to 2022 20 Table 4.2 Cost-to-income ratio of VIB MTCB from 2020 to 2022 21 Table 4.3 Capital mobilization of VIB MTCB from 2020 to 2022 23 Table 4.4 Outstanding credit of VIB MTCB from 2020 to 2022 25 Table 4.5 Personal oustanding credit of VIB MTCB from 2020 to 2022 28 Table 4.6 Loan-to-deposit ratio of VIB MTCB from 2020 to 2022 31 Table 4.7 Classification of debt groups of VIB MTCB from 2020 to 2022 Table 4.8 Personal overdue debt ratio of VIB MTCB from 2020 to 2022 32 34 Table 4.9 Personal NPL ratio of VIB MTCB from 2020 to 2022 35 Table 4.10 Provisions ratio of VIB MTCB from 2020 to 2022 37 Table 4.11 Secured loans to individual customers of VIB MTCB from 2020 to 2022 Table 4.12 Personal credit products of VIB MTCB from 2020 to 2022 vi 39 40 LIST OF FIGURES Figure Page Figure 3.1: Hierarchical order in VIB organization 17 Figure 3.2: Research design process 18 Figure 4.1: Capital structure of VIB MTCB from 2020 to 2022 24 Figure 4.2: Loan portfolio by terms from 2020 to 2022 26 Figure 4.3: The proportion of individual outstanding credit from 2020 to 2022 vii 29 ABSTRACT The title of the thesis: Improving personal credit operation at Vietnam International Joint Stock Bank- Main Transaction Center Branch Author: Pham Tran Phong Thu Advisor: Dr Can Thuy Lien Keywords: personal credit, solution, VIB- Main Transaction Center Branch Abstract: Personal credit is an important activity in a bank's operations that must be prioritized To attract consumers, VIB has been strengthening its credit quality in order to become a premier retail bank Therefore, the thesis has provided solutions to improve personal credit quality First, the essay investigated the business situation of VIB MTCB in the period of 2020-2022 Next, the personal credit quality of VIB MTCB was analyzed according to the indicators of outstanding loans, overdue debts, non-performing loans, and provisions for credit risks Some assessments have shown that personal outstanding loan were raised every year However, overdue debt and bad debt was tending to increase Finally, practical and specific solutions were proposed to solve the problem, to improve credit quality for individual customers viii