Capital mobilization at agribank hoa lu branch situation and recommendations,graduation thesis

STATE BANK OF VIETNAM BANKING ACADEMY Foreign Language Faculty - - GRADUATION THESIS CAPITAL MOBILIZATION AT AGRIBANK HOA LU BRANCH: SITUATION AND RECOMMENDATIONS Lecturer : Nguyen Thi Thuy (M.B.A) Student : Nguyen Le Thuy Duong Class : K15-ATCB Student Code : 15A7510038 Hanoi, May 2016 Nguyen Le Thuy Duong – K15ATCB DEDICATION Some once said that every challenging work needs self-efforts as well as guidance of elders, especially those who were very close to our heart This graduation thesis is dedicated to my father and mother who I am greatly indebted Anything good that has come to my life has been because of your unconditional love, constant faith and support During hard times, in particular my long educational journey, your guidance and encouragement make it possible for me to keep going on my way and obtain such success and honor Without both of you, I would be nowhere I am today I also dedicate this humble work to my close friend, An Thu Huong, who has been next to me and encouraged me ever since we became friends II Nguyen Le Thuy Duong – K15ATCB ACKNOWLEDGEMENT My special thanks are given to my enthusiastic supervisor, M.B.A Nguyen Thi Thuy for her guidance, patience, motivation and assistance during my preparation of this thesis despite her busy schedule Her comments and valuable suggestions are very beneficial to me to complete the manuscript I am very grateful to all the lecturers in Faculty of Foreign Languages of Banking Academy for their conscientious teaching and mates for unforgettable memories and wonderful experiences we have had for the last four years I strongly believe that I learnt from the best I would also like to acknowledge my internship advisors in Personal Customer Department in AGRIBANK HOA LU Branch who let me join their team as a graduate trainee and have access to research statistics tutorial Their enthusiasm and dedication to the job inspired me a lot to pursuit banking sector Finally, I would like to express my deepest gratitude and heart-warming appreciation to my beloved family – my parents and my sister for their endless love, encouragement in both physical and spiritual aspects throughout my life; especially in my years of study and the process of researching and writing the thesis This accomplishment would not have been possible without their precious support III Nguyen Le Thuy Duong – K15ATCB ABSTRACT Under the pressure of globalization, Vietnam is striving for goals of industrialization and modernization It is undeniable that commercial bank plays a key role in promoting both national and global economic growth It is probably the largest source of financing for capital investment One of important business activities which helps banks function as a financial intermediary to develop the economy is capital mobilization Based on general knowledge and fundamental concepts about banking and finance sector, this thesis conducts a research on how commercial bank raises their sources of funds with the aim of providing insight into commercial banks in general and the current situation of capital mobilization of AGRIBANK HOA LU branch from 2013-2015 in particular From these analysis and assessments, the research finds out strengths and weaknesses of the bank; thereby suggests some solutions and recommendations to improve the efficiency of capital mobilization at AGRIBANK HOA LU branch in the future In brief, the thesis consists of four chapters: Chapter 1: Introduction Chapter 2: Literature Review Chapter 3: The situation of capital mobilization at AGRIBANK HOA LU branch Chapter 4: Solutions and recommendations to improve capital mobilization of AGRIBANK HOA LU branch IV Nguyen Le Thuy Duong – K15ATCB TABLE OF CONTENTS DEDICATION I ACKNOWLEDGEMENT III ABSTRACT IV TABLE OF CONTENTS V LIST OF TABLES AND FIGURES VIII LIST OF ABBREVIATIONS IX CHAPTER 1: INTRODUCTION 1.1 Rationale 1.2 Research objectives 1.3 Questions 1.4 Scope and limitations 1.5 Research methodology CHAPTER 2: LITERATURE REVIEW 2.1 The overview of commercial bank 2.1.1 Definition 2.1.2 Main business activities of commercial banks 2.2 The importance of mobilized capital of commercial banks 2.3 Sources of capital 2.4 Capital mobilization forms of commercial banks 2.4.1 Based on types of customers 2.4.2 Based on the nature of fund mobilization 10 2.4.3 Based on terms of fund mobilization 13 2.4.4 Based on types of currency 14 V Nguyen Le Thuy Duong – K15ATCB 2.5 The criteria to evaluate efficiency of capital mobilization at commercial banks 15 2.5.1 Quantitative factors 15 2.5.2 Qualitative factors 19 2.6 Factors affect commercial bank’s efficiency of capital mobilization 19 2.6.1 Subjective factors 19 2.6.2 Objective factors 22 CHAPTER 3: THE STATUS OF CAPITAL MOBILIZATION AT AGRIBANK HOA LU BRANCH 25 3.1 The introduction to AGRIBANK HOA LU branch 25 3.1.1 The history of establishment and development 25 3.1.2 The branch organization and functions of departments 26 3.1.3 Products and services 28 3.2 The overview of the branch’s business performance (2013 - 2015) 29 3.2.1 Fund mobilization 29 3.2.2 Credit growth 31 3.2.3 Other services and activities 32 3.2.4 Business result of the branch 32 3.3 The real situation of capital mobilization of AGRIBANK HOA LU branch from 2013 to 2015……… 34 3.3.1 Capital mobilization by type of customers 2013-2015 34 3.3.2 Mobilized funds by terms 36 3.3.3 Mobilized funds by types of currencies 38 3.4 The efficiency of capital mobilization of AGRIBANK HOA LU branch 39 3.4.1 Cost of fund 39 VI Nguyen Le Thuy Duong – K15ATCB 3.4.2 Capital Coefficient 40 3.5 General assessment on capital mobilization of AGRIBANK HOA LU branch 42 3.5.1 Achievements 42 3.5.2 Limitations & Causes 44 CHAPTER 4: SOLUTIONS AND RECOMMENDATIONS TO IMPROVE CAPITAL MOBILIZATION OF AGRIBANK HOA LU BRANCH 47 4.1 General development orientations 47 4.2 Solutions 48 4.2.1 Diversify products and services by types of customers 48 4.2.2 Promote the forms of fund mobilization 50 4.2.3 Apply reasonable interest rate policy 52 4.2.4 Limit risks and improve the efficiency in business 52 4.2.5 Develop care customer and bank marketing strategy 53 4.2.6 Upgrade banking technology and facilities 54 4.2.7 Improve working skills of staff 55 4.3 Recommendations 56 4.3.1 Recommendations to AGRIBANK 56 4.3.2 Recommendations to State Bank 57 4.3.3 Recommendations to Government 58 CONCLUSION 60 REFERENCE 61 VII Nguyen Le Thuy Duong – K15ATCB LIST OF TABLES AND FIGURES List of tables Page Table 3.1 Credit performance 2013-2015 31 Table 3.2 Deposits source of fund by types of customers 2013-2015 35 Table 3.3 The structure of deposits by types of currency 2013-2015 38 Table 3.4 Interest cost and net income 2013-2015 40 Table 3.5 The efficiency of using mobilized capital 2013-2015 41 List of figures Figure 3.1 Capital mobilization of AGRIBANK Hoa Lu branch 2013-2015 30 Figure 3.2 Business result 2013-2015 33 Figure 3.3 The total mobilized funds by types of customers 2013-2015 34 Figure 3.4 Deposits from consumers by terms 2013-2015 37 Figure 3.5: Capital structure of AGRIBANK Hoa Lu branch 2013-2015 42 VIII Nguyen Le Thuy Duong – K15ATCB LIST OF ABBREVIATIONS AGRIBANK Vietnam Bank for Agriculture and Rural Development FDIC Federal Deposit Insurance Corporation GDP Gross Domestic Product CPI Consumer Price Index SWIFT SBV Society for Worldwide Interbank Financial Telecommunication State Bank of Vietnam IX Nguyen Le Thuy Duong – K15ATCB CHAPTER 1: INTRODUCTION 1.1 Rationale Capital which is considered one of the basic input factors of business operations plays a decisive role in the growth and economic development Without capital, it is impossible to achieve the economic goals of the State in general as well as business targets of enterprises in particular Hence, a huge amount of capital will make great contribution to restructure economy, implement social-economic development strategies; thereby help national economy integrate into regional and world economy, As a typical financial intermediary, commercial banks with their inherent functions always guarantee available sources of funds to meet demands for capital in economy The process of economic reform in Vietnam has increasingly asserted its position and role More than 80% of total capital of the economy is provided by commercial banks while in fact, its equity capital just account for a small proportion of the capital structure, the remaining includes mobilized capital, borrowed capital and the others from outside sources Thus, capital and capital mobilization are very essential to both the economy and banking system Due to the appearance of a wide range of foreign financial institutions and new national organizations such as insurance companies, stock companies…the source of capital flowing into commercial banks is increasingly declining To exist and develop in new environment, it is very necessary for commercial banks to attach special importance to promote the efficiency of capital mobilization with appropriate cost and high stability as well as enhance their competitiveness in the market For Vietnamese commercial banks, mobilizing funds or exploiting the amount of idle money from residents, socio-economic organizations and other credit institutions still exist many shortcomings, which not only affect the their profitability but also put them Nguyen Le Thuy Duong – K15ATCB from residents accounts for more than 60% in total of mobilized funds in local, simultaneously step by step improve the structure of capital source in effective way For credit operation, the amount of medium and long-term lending holds 60% in total lending balance (10% higher than the figure in 2015) and the percentage of bad debt does not excess 2% in sum of loan balance For financial activities, total revenues gains 165.000 million VND while excess profits credit is 10% at minimum and the rate of other expenses is 2% in total expenses Business orientations in competitive environment: For transaction points and offices : Populous urban areas where the majority of high– income people live, shops and private enterprises run their business create many opportunities and great potentials for developing retail market AGRIBANK NINH BINH province includes 13 branches and 24 transaction offices In general assessment of competitors, HOA LU district centralized a great number of commercial banks and financial institutions in NINH BINH This is considered an opportunity and challenge for AGRIBANK HOA LU branch The business in such an economic environment brings many advantages to the bank to access and exploit its markets better In other ways, building banks on a large scale and high competitiveness is common orientation of most commercial banks in local 4.2 Solutions In addition to setting development targets, AGRIBANK HOA LU branch also needs to take appropriate measures based on analysis about limitations and causes above: 4.2.1 Diversify products and services by types of customers Nowadays, competition in banking industry is becoming more severe, in both quantity and quality of provided products and services Market classification helps bank 48 Nguyen Le Thuy Duong – K15ATCB managers estimate demands to invest resources in the market which has high profit potentials Based on this method, banks will be able to build appropriate effective business strategies To diversify products and services by types of customers which are compatible with its targets and financial capacity, the branch can classify into the following ones: Enterprise customers: for different demands and characteristics, the bank can divide it into sections including state owned enterprises and non-state enterprises For state-owned enterprises: normally, they have not only a large scale but also diversified and complicated requirements of payment tools They care more about the quality of payment services than expense It is totally possible for the bank to borrow a large amount of funds with low cost if it provides best services to these enterprises Thus, to build trust and credibility with customers, the bank needs to improve payment process accurately, quickly and safely For non-state enterprises: Business characteristics of this type are seasonal, so they pay more attention to term deposits products instead of payment ones The bank should offer more products and services with many terms and diversify interest rate to attract funds; thereby overcome difficulties in capital mobilization Individual customers: The economic growth leads to a rise in the income of residents, so they increasingly accumulate capital As a result, the bank needs to offer appropriate products to fully utilize this source of idle money The bank can offer different banking products and services to meet different needs of its customers as below: For customers with fixed job and income: This group mainly has demands for payment services The bank should provide products of transferable savings Besides, it is encouraged to open salary accounts and use them to pay periodical expenditure: electric bill, water bill, mobile… 49 Nguyen Le Thuy Duong – K15ATCB For senior citizen: this group is more likely to use long-term savings and home banking services The bank can provide products including: welfare savings, retirement savings…with services; for instance, in case of unexpected incidents, they are able to withdraw before maturity at the bank with low interest rate For merchants and businessman: they have little idle money and continually transfer capital for commercial transactions Thus, they would rather care for the convenience of banking services such as depositing or receiving than interest rate The bank should arrange tellers to meet their demands promptly With this payment deposit method, although quick payment process probably means high costs with specific level, the bank can still attract a huge amount of cheap capital That the bank supply different products for each type of market will enable it to step by step obtain achievements In addition to researching local market, the bank should also consider market outside province to develop business 4.2.2 Promote the forms of fund mobilization Diversifying the forms of borrowing funds and terms as well as predict market fluctuations to create appropriate forms; thereby exploit demands for deposits of economic entities and utilize potential capital at maximum For demand deposits: open accounts for customers who usually make transactions with the bank For term deposits: it is to diversify terms, forms and transfer Currently, the bank has had many forms of terms including as one month, months, months, months, 12 months, 18 months and 24 months In the near future, more forms with longer term are expected 50 Nguyen Le Thuy Duong – K15ATCB For savings deposits: In addition to traditional forms, the bank should build and develop new ones which meet demands for both borrowing and lending to balance mobilizing and using capital In details: Purposed savings: this is long-term savings with a view to building houses, buying cars… Depositors are able to require the bank to monthly transfer a small salary into purposed savings account With this account, although depositors will receive lower interest rate than that of normal saving deposits, the bank will lend them to in case the amount of savings reach two thirds of signed asset value This form enables to purposed savings account the bank to not only attract more money from residents but also increase medium, long-term capital Retirement savings: the contract of retirement savings is considered a hybrid product between insurance and bank It is a typical life insurance provided by the bank to complement the in Vietnam insurance market Otherwise, it is more adapted to Vietnamese psychological characteristics For mobilized funds by valuable papers: It is advantageous that the capital source of the branch is quite stable, so the bank is active in business In the next time, the branch should take measures to raise funds from this form In addition to borrow idle funds from residents, the bank should apply more flexibly the methods of interest payment to increasingly meet customers’ demands for capital; for example, payment in advance This method will make customers think that the interest rate they get is higher than that the bank offers Another one is payment in specific period - the bank can calculate the interest rate in term of months, months or one year… On the other hand, if at maturity depositors not withdraw, interest rate will be capitalized 51 Nguyen Le Thuy Duong – K15ATCB 4.2.3 Apply reasonable interest rate policy Interest rate is considered an importance instrument in fund mobilization strategy of each commercial bank because it has direct impacts on bank’s revenue and depositor’s earned income High interest rate encourages residents to send money to the bank which leads to the increase in the amount of mobilized funds; in contrast, due to expensive cost of borrowing, the bank’s profit declines An appropriate interest rate policy is required as a result Ascertaining interest rate needs to obtain three main targets: create a source of funds with reasonable scale and structure, accompanied with low cost to meet demands for using capital; guarantee safety and profitability for the bank and increase competitiveness of other banks in borrowing and lending At present, interest rate is influenced by severe competition between banks and other credit institutions Therefore, it is essential for the bank to formulate and apply interest rate policies based on its own customers These policies need to assure flexibility, benefits of borrowers and lenders in accordance with principle of profit maximization and comply with the regulations of the Government as well as the law of supply and demand for capital in the market (output interest rate decides input one) For AGRIBANK HOA LU branch, an interest rate framework to attract clients should be formulated; especially interest rate of lending The bank needs to keep positive real interest rate for depositors, borrow the amount of more idle money in society with the lowest cost of capital and lend with acceptable interest rate in the market The bank should also apply the significant higher interest rate of medium and long-term deposit than that of short-term to guarantee a safe and effective capital structure 4.2.4 Limit risks and improve the efficiency in business Managing and using capital have certain impacts on the efficiency of mobilization funds If the bank lends money to customers without repayment, the capital source of 52 Nguyen Le Thuy Duong – K15ATCB the bank will be stagnant In contrast, if the bank performs credit, invest in business well, it will attract more clients The bank’s tasks in the next time are to keep increasing loan sales, improve quality and operations management The bank needs to be active in seeking effective investment projects Before lending, the bank needs to appraise carefully customers In process of implementing lending projects credit officers must regularly supervise the situation of using capital of customers, give assessments and recommendations to the leaderships to make timely decisions in order to prevent the bank from losses It is also necessary for the bank to statistic contractual maturity, urge enterprises to repay overdue debts By its relationships, the bank can support customers to use their products in case their quality is low and discounted due to oversupply This will help the bank not only recover loans, reduce risks at minimum but also avoid bankruptcy The bank should also closely coordinate with local government agencies to manage collateral as well as regularly exchange with the center providing information about bank credit risks 4.2.5 Develop care customer and bank marketing strategy Customer strategy is considered the process of planning and implementing activities to maintain and develop customer network A customer strategy is necessary if the bank wants to obtain a competitive edge in the marketplace by building a large and loyal customer base To develop an effective strategy, the bank needs to classify groups of customers to identify their demands by regular direct contacts, care service surveys and market researches The bank always has to put their clients first Only when the bank exactly knows customers’ expectation in terms of products, services and other intangibles, it meets their needs Additionally, it must maintain long relationships with customers A strong customer relationship means that the client is likely to keep doing 53 Nguyen Le Thuy Duong – K15ATCB business with a provider over the long-term and the chances of that customer recommending the company and its products to others are greatly enhanced as well Nowadays, all economic sectors including banking discern that Marketing is a key tool to enhance their competitiveness in economy integration Its main function is to attract a large number of customers with different income, psychology, hobbies and habits, so applying Marketing principle in managing relations with users is very important It is a business strategy to reached two targets: the bank’s revenue and customers’ satisfaction It is encouraged for the bank to set up a department which specializes in researching bank marketing strategies Currently, almost commercial banks ignore this Bank marketing is a management system to meet demands for capital and services of the bank by flexible measures to adapt with the market Bank marketing operations need to be improved including organizational structure, technological facilities and staff qualification to create a new image of the bank to attract customers Besides, researching market, customers and competitors to create appropriate business strategies with the bank’s capacity should be done more To develop marketing strategy systematically, the Board of Director of AGRIBANK HOA LU branch needs to build policies as well as specific operational directions An appropriate and effective strategy includes widely advertising, introducing products and services of the bank to customers in order to they know more about their benefits The bank should also announce financial information to attract clients’ attention and limit information risks 4.2.6 Upgrade banking technology and facilities Towards global economic integration and the growth of information technology sector, technology not only changes banking operations but also becomes a means of competition Vietnam commercial banks are increasingly applying new technological 54 Nguyen Le Thuy Duong – K15ATCB achievements in business activities Thus, to exist in this competitive market economy, Vietnam AGRIBANK in general and AGRIBANK HOA LU branch in particular should invest in upgrading modern banking technology The branch should offer more online banking services; in other words, internal network on the whole banking system to make deposits and withdrawals more convenient for customers It is also encouraged to develop this type of service to not only groups of customers that have payment accounts but also ones that use savings accounts It is also necessary to design the bank’s own website to introduce about the branch, the history of establishment and development, current provided products and services This is assessed to be a very effective advertising method to attract clients Besides, via its own website, the bank also develops new banking services to diversify products and services and remove the barriers of space and time in relationship with customers Technological facilities are the face of the bank because it partially performs the bank’s financial capacity and contribute to build good reputation, image to customers in transactions Thus, the branch should build a working environment with full of modern facilities to make business operations more effective 4.2.7 Improve working skills of staff Human resources are the most important factor of every business activity including banking business which is one of extremely sensitive fields in some aspects Thus, banking operations require not only well-qualified staff with extensive knowledge of banking sector but also enthusiasm, working ethics, good communication skills, polite behaviors in transaction with customers To have such staff system, the branch needs to organize training courses for staff about check-handling skills, transaction procedures, account-balancing tasks, counterfeit currency recognition and daily settlement procedures so that they can regularly update advanced technology in banking transactions; thereby improve their performance in their current jobs and future 55 Nguyen Le Thuy Duong – K15ATCB responsibilities It is encouraged to apply an appropriate meritocracy policy Personnel department should recruit young people with working capacity and enthusiasm Furthermore, the bank should offer attractive remuneration and reasonable material incentives to talented people and specific jobs that require professional experiences Meanwhile, the branch should also apply appropriate disciplines to credit employees that not complete assigned tasks and train career ethics for the whole staff in making transactions with customers such as reliability, dedication, respectfulness, humility and cooperation 4.3 Recommendations 4.3.1 Recommendations to AGRIBANK AGRIBANK HOA LU is one of AGRIBANK’s branches, so its performance also affects AGRIBANK’s business results as a whole In contrast, AGRIBANK HOA LU branch will unable to perform well without AGRIBANK’s support According to the situation of HOA LU branch in analysis above, AGRIBANK should make some changes to solve existing limitations as the following: adjust the structure of capital mobilization and regulate capital to meet development targets of the bank; build an appropriate interest strategy to apply for all its branches; equip modern technology, utility programs, application software; promote and develop AGRIBANK’s image positively; organize meetings to exchange experiences between branches regularly; take training courses to improve skills and profession of staffs and improve material facilities in all branches Vietnam AGRIBANK should also take measures to create a close association between AGRIBANK HOA LU branch and other branches of the bank as well as in the system of other commercial banks; thereby modernize payment system and ensure implementing new payment mechanism 56 Nguyen Le Thuy Duong – K15ATCB 4.3.2 Recommendations to State Bank To attract more medium and long-term funds for economic growth targets, SBV should takes some effective measures as below Firstly, SBV is responsible for promulgating and implementing monetary policies as well as nation-wide commercial banks’ operations It also facilitates banking systems to keep up with integration trend Therefore, it is very essential to stabilize monetary policy SBV needs to give an appropriate and flexible monetary policy in accordance with reasonable interest rate policy followed by the law of supply and demand in economy in each period and have adjustments market fluctuations Secondly, SBV should also build a general strategy for competition and international integration Being an official member of WTO led to significant changes in Vietnam economy SBV will have more chances to coordinate with other foreign economic organizations; thereby raise more and more foreign source of funds, improve capital mobilization as well as increase their competitiveness in international market Next, it is very necessary to promote the development of financial and monetary market which has great impacts on banks’ development in particular and national economy in general Hence, to develop this market, State bank need to upgrade and improve its parts, especially domestic and foreign currency one Although this market has been in operation for many years, it still needs central bank’s support Finally, State bank should continue researches to build and amend mechanisms, technical process of banking business transaction; especially renew documents based on international standards Simultaneously, it is encouraged for SBV to strengthen internal control in whole banking system as well as develop staff inspection to promptly find out shortcomings and prevent fraud from baking system; thereby improve its capacity on banking supervision 57 Nguyen Le Thuy Duong – K15ATCB 4.3.3 Recommendations to Government The Government needs to create a sustainable macroeconomic environment Macroeconomic environment has substantial impacts on mobilizing funds of banks It brings advantages; in contrast, also causes disadvantages and limit funds mobilization In Vietnam, one of contents of stabilizing macroeconomic environment is to maintain inflation at a reasonable level, guarantee positive real interest rates for depositors and stabilize currency In recent years, world economy falls in crisis, especially monetary crisis of Europe affects most economies over the world Therefore, in these difficult conditions, the Government and State Bank should enforce macroeconomic policies to control, adjust the structure of investment in order to keep the growth stable Besides, it is also important to create a legal environment which is synchronous and stable At present, Vietnam economic law is inadequate and unreasonable in some aspects Thus, to protect the rights of investors, the Government should enforce a system of constitutional laws in accordance with world standards, for instance, law of private assets, law of commercial paper, etc Positive regulations of the Government will have direct influences on adjusting the relationship between consumption and saving, transferring a part of consumption to investment, shifting assets stored in gold, foreign currencies, or real estate to invest in manufacture or deposit in banks Currently, that Vietnam joins WTO leads to establishment of many foreign companies in economy Therefore, the Government should soon introduce laws based on world development trend such as competition law, bankruptcy law A healthy competitive environment will facilitate banks to attract more foreign investment and borrowed fund Moreover, the Government should transfer social environment under appropriate directions Psychological factors, cultural level of individuals or countries also have impacts on the forms and habits of mobilizing deposits Currently, consumers still maintain their habits of spending and storing cash Therefore, banking activities, at 58 Nguyen Le Thuy Duong – K15ATCB first, are to attract all sources of savings and accumulations of residents, economic institutions to support the socioeconomic development Psychological factor requires banks to stimulate and attract idle funds in society For the reason, the Government should combine with commercial banks to promote the benefits of non-cash payment that banks offer The most important thing is that the Government needs to solve the unemployment, improve educational level of citizens so that their living standards and education are enhanced; as a result, it’s easier to approach modern means of payment Finally, it is suggested that the Government should reform external economic policy, continue open door policy and expand economic cooperation with foreign countries Gradually improve domestic investment environment, reform import-export policy to develop economy 59 Nguyen Le Thuy Duong – K15ATCB CONCLUSION In process of national industrialization and modernization, with the goal of bringing our country out of present underdeveloped state as well as improve the material and spiritual life of people, it is necessary to have a strong financial capacity; in other way, a great source of capital Commercial banks were established as a result Bank is a financial intermediary with basic fund mobilization to make loans and investment Therefore, the source of mobilized funds plays a very important role in the business development of banking sector in general and AGRIBANK in particular It is the first key factor to determine the scale and position of the bank in market economy For AGRIBANK HOA LU branch, an optimal capital structure; especially the efficiency of raising funds is always considered one of main operational targets It is undeniable that with continuous efforts over these years, the branch obtained positive results in fund mobilization, credit management and international payment operations However, it still remains certain limitations, noticeably the balance between raising and using capital with unstable coefficient In the near future, with well-qualified staff and broad network, it is highly expected that the branch will build specific business strategies to overcome current difficulties and maintain sustainable growth; thereby assert its position in local and 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