Funds mobilization at vietcombank,graduation thesis

State Bank of Vietnam Banking Academy Faculty of Foreign Language ~~~~~~~~~~~~~~~~~~ GRADUATION THESIS FUNDS MOBILIZATION AT VIETCOMBANK (2011-2013) Student: Nguyen Thi Them Student ID: 13A7510166 Class: ATCC K13 Supervisor: Nguyen Thi Hien Hanh (MA) Hanoi, May 2014 Graduation Thesis Banking Academy DECLARATION I declare that this dissertation is the intellectual product of my own work which has not been submitted before any degree or examination in any other university, and that all the sources I have used or quoted have been indicated and acknowledged as complete references Signed: Nguyen Thi Them_K13ATCC Page Graduation Thesis Banking Academy ACKNOWLEGEMENTS First and foremost, I would like to express my deep gratitude to my supervisor, Mrs.Nguyen Thi Hien Hanh for her valuable and constructive advice and stimulating suggestions from the beginning to the final step Without her useful guidance and dedication, the informative and smooth dissertation would not be possible I would also like to thank staff at credit department at Vietcombank who enthusiastically assisted me in collecting data and information as well as effortlessly guided me to finish my dissertation A special thanks to my family Words cannot express how grateful I am to my parents and my elder brothers for all of the sacrifices that they have made on my behalf They have always encouraged me and given me financial and spiritual support I would also like to thank all of my friends who supported me in writing, and incented me to strive towards my goal At the end I would like express appreciation to those who is spending valuable time reading my graduation thesis Nguyen Thi Them_K13ATCC Page Graduation Thesis Banking Academy ABSTRACT It is undeniable that the demand for funds is on increase since Vietnam became member of the World Trade Organization As funds mobilization is the most profitable activity in the domain of banking system, it is essential to enhance the effectiveness of funds mobilization in order to minimize the limitations and promote the development of the whole economy However, commercial banks have experienced challenges in financial market while funds mobilization has been affected by difficult economic situation during the period from 2011 to 2013 With reference to mobilization issue, a study on funds raising at Bank for Foreign Trade of Vietnam - Vietcombank was chosen to identify the limitations and indicate possible causes and then propose recommendations to loans mobilizing efficiency Nguyen Thi Them_K13ATCC Page Graduation Thesis Banking Academy LIST OF FIGURES Name of figures Page Figure 1: Funds mobilization at Vietcombank between 2011 and 2013 32 Figure 2: Funds mobilized from credit institutions from 2011 to 2013 33 Figure 3: Business Activity Achievement of VCB between 2011and 2013 37 Figure 4: Structure of funds mobilization in terms of customers 39 Figure 5: Vietcombank’s funds structure in the period 2011-2013 41 Figure 6: Loans portfolio by terms from 2011 to 2013 42 LIST OF TABLES Name of tables Page Table 1: Reality of credit activities at Vietcombank between 2011 and 2013 34 Table 2: Business achievement of Vietcombank over the period 2011-2013 36 Table 3: Profit after tax of some commercial banks in 2013 37 Table 4: Structure of funds mobilization in terms of currency 38 Table 5: Interest rate for twelve-month in VND deposit at some commercial banks 39 Table 6: Funds mobilization from individuals and corporations from 2011 to 2013 40 Table 7: Structure of funds mobilization in terms of maturity 40 Table 8: Efficiency of using funds mobilization from 2011 to 2013 42 Nguyen Thi Them_K13ATCC Page Graduation Thesis Banking Academy LIST OF ABBREVIATIONS The following table describes the significant of various abbreviations used throughout the thesis The page on which each one is defined or first used is also given Abbreviation Meaning Vietcombank Bank for Foreign Trade of Vietnam SBV State Bank of Vietnam CD Certificate of Deposit NOW Negotiable order of withdrawal account SNOW Super negotiable order of withdrawal account MMDA Money market deposit account VCBL Vietcombank Leasing VCBS Vietcombank Security Nguyen Thi Them_K13ATCC Page Graduation Thesis Banking Academy TABLE OF CONTENT DECLARATION ACKNOWLEGEMENTS ABSTRACT LIST OF FIGURES LIST OF TABLES LIST OF ABBREVIATIONS CHAPTER 1: INTRODUCTION OF FUNDS AND FUDNS MOBILIZATION IN COMMERCIAL BANK 10 Rationale of study 10 Aims of the study 11 Research questions 11 Scope of the study 11 Methodology of the study 11 Organization of the study 12 CHAPTER 2: OVERVIEW OF FUNDS MOBILIZATION AND EFFECTIVE FUNDS UTILIZATION IN COMMERCIAL BANKS 13 Overview of funds mobilization in a commercial bank 13 1.1 Definition of funds mobilization 13 1.2 Functions of capital in funds mobilization 13 1.3 Types of funds mobilization 14 1.3.1 Types of deposits offered by commercial banks and other depository institutions 15 1.3.1.1 Transaction (Payments or Demand) Deposits 15 1.3.1.2 Non-transaction (Savings or Thrift) deposits 16 1.3.2 Forms of borrowings 17 1.3.2.1 Issuing valuable papers 17 1.3.2.2 Loans from other credit institutions 18 1.3.2.3 Borrowing from State Bank of Vietnam 19 Nguyen Thi Them_K13ATCC Page Graduation Thesis Banking Academy Efficiency of funds mobilization 20 2.1 Definition of efficiency of funds mobilization 20 2.2 Criteria to evaluate efficiency of funds mobilization 21 2.2.1 Qualitative criteria 21 2.2.1.1 Mobilizing policies 21 2.2.1.2 Ability to attract funds of commercial banks 23 2.2.2 Quantitative criteria 23 2.2.2.1 Stability of funds mobilization 23 2.2.2.2 Cost of funds mobilization 25 2.2.2.3 Relationship between funds mobilization and utilization 26 2.3 Factors affecting on efficiency of funds mobilization 26 2.3.1 Objective factors 27 2.3.1.1 Legal framework 27 2.3.1.2 Economic growth 27 2.3.1.3 Customer’s habit 27 2.3.2 Subjective factors 28 2.3.2.1 Bank reputation 28 2.3.2.2 Mobilization policies 28 2.3.2.3 Marketing policy 28 2.3.2.4 Technology 29 CHAPTER 3: REALITY OF FUNDS MOBILIZATION AT VIETCOMBANK 30 Overview of Vietcombank 30 1.1 Historical foundation and development of Vietcombank 30 1.2 Structural organization of Vietcombank 31 1.3 Main business activities at Vietcombank 32 1.3.1 Funds mobilization 32 Nguyen Thi Them_K13ATCC Page Graduation Thesis Banking Academy 1.3.1.1 Funds mobilization from residents and from the economy 32 1.3.1.2 Capital mobilization from credit institutions 33 1.3.2 Credit activities 34 1.3.3 Other services 35 1.3.4 Business Activity Achievements 36 Reality of funds mobilization at Vietcombank 38 2.1 Structure of funds mobilization 38 2.1.1 Structure of mobilized funds in terms of currency 38 2.1.2 Structure of funds mobilized in terms of customers 39 2.1.3 Structure of funds in terms of maturity 40 2.2 Reality of using funds mobilization 41 2.2.1 Loan portfolio by terms 42 2.2.2 Reality of using funds mobilization 42 Evaluation on the efficiency of funds mobilization at Vietcombank 43 3.1 Achievements 43 3.2 Shortcomings and major causes 44 3.2.1 Shortcomings 44 3.2.2 Major causes 45 3.2.2.1 Objective causes 45 3.2.2.2 Subjective causes 45 CHAPTER 4: SOLUTIONS AND RECOMMENDATIONS TO ENHANCE THE EFFICIENCY OF FUNDS MOBILIZATION AT VIETCOMBANK 47 CHAPTER 4: SOLUTIONS AND RECOMMENDATIONS TO ENHANCE THE EFFICIENCY OF FUNDS MOBILIZATION AT VIETCOMBANK 47 Proposed suggestions to enhance the efficiency of funds at Vietcombank 47 Recommendations to enhance the efficiency of funds mobilization at Vietcombank 48 2.1 Recommendations to Government 48 2.2 Recommendations to the State Bank of Vietnam 49 2.3 Recommendations to Vietcombank 49 REFERENCES 51 Nguyen Thi Them_K13ATCC Page Graduation Thesis Banking Academy CHAPTER 1: INTRODUCTION OF FUNDS AND FUDNS MOBILIZATION IN COMMERCIAL BANK Rationale of study Funds mobilization is undeniably one of the most important activities in the domain of banking Banks play a special role in providing external funds to the economy and its lending services create handsome profits for both customer and banks As a key component of the financial system, commercial bank, a financial intermediate allocates funds from savers to borrower in an effective manner For most commercial banks, mobilizing funds from the economy and then making loans help the whole economy operate more efficiently Funds mobilization is the most concerned field that every commercial bank in the text of increasingly competitive market Since Vietnam became a member of the World Trade Organization, the demand for funds raising from domestic as well as foreign corporation has increased significantly Meanwhile, the idle money in general public, especially those who not tend to make investment has actually risen considerably than ever It cannot be denied that in developing countries like Vietnam, commercial bank is considered as one of the most popular channels of funds that every business and company could access to capital Therefore, commercial bank, functioning as an effective financial intermediary will attempt to attract idle money from surplus entities and make loans to deficit entities that are in great need of capital such as: small business and start-up companies In other word, funds mobilization makes great contribution to create profit for commercial banks, customers and promote economic growth In Vietnam, Bank for Foreign Trade of Vietnam (Vietcombank) is one of the most dynamic and developed commercial banks in banking sector which has obtained a lot achievement and better overcome challenges over the period of 2011-2013 than other banks Nguyen Thi Them_K13ATCC Page 10 Graduation Thesis Banking Academy Figure 3: Business Activity Achievement of VCB between 2011and 2013 50000 45000 40000 35000 30000 Income 25000 Profit 20000 Expense 15000 10000 5000 2011 2012 2013 Source: Annual reports in 2012, 2013 As can be seen clearly from the chart, VCB’s income slightly decreased over the period between 2011 and 2013 though the income still kept considerably high standing at just over 35000 billion VND in 2013 Thanks to well-managed board of directors as well as strategies drawn in the context of economic difficulty, operating expense makes up relatively small portion (just under 10%).Comparing to other banks in the banking system, VCB takes lead in annually earnings and profit in 2013 as follows: Table 3: Profit after tax of some commercial banks in 2013 Unit: billion VND Vietcombank Sacombank Asia Commercial Bank ACB Eximbank Nguyen Thi Them_K13ATCC 3.014 2.960 1.035 827 Source: vneconomy.vn Page 37 Graduation Thesis Banking Academy Reality of funds mobilization at Vietcombank 2.1 Structure of funds mobilization 2.1.1 Structure of mobilized funds in terms of currency Table 4: Structure of funds mobilization in terms of currency Unit: billion VND 2011 2012/2011 2013/2012 Value % Value % 241.700 303.942 334.259 62.242 26 30.317 10 VND 131.006 166.040 178.825 35.034 26.74 12.785 7.7 Foreign currency 72.193 4.06 20.366 27.1 Funds 2012 2013 mobilization 75.123 95.489 2.930 (value in VND) Source: Annual report in 2012, 2013 As mentioned above, VCB remains the ratio of domestic currency in capital structure around 75% Therefore, funds mobilized in VND grew steadily over the period between 2011 and 2013 with 26.74% and 7.7 % in 2012 and 2013 respectively As matter of fact that, in the period 2011-2013, State Bank of Vietnam lowered the ceiling interest rate for commercial bank According to circular 02/TT-NHNN, the ceiling interest rate for VND deposits decreased from 14% to 7% meanwhile that for USD fell down to 1% in 2013 In spite of changing in SBV’s policies, VCB hit its target of mobilizing funds because of couple reasons Firstly, VCB built great customer trust in a well-known commercial bank Depositors, hence, are confident enough to put their money in VCB Secondly, VCB raised the interest rate for long maturity (24, 36, 48, 60 months) at 8%/year while maturities under 12 months still kept at maximum 7% This table below shows the interest rate for deposit in VND with maturity of 12 months in some selected bank in May 2013: Nguyen Thi Them_K13ATCC Page 38 Graduation Thesis Banking Academy Table 5: Interest rate for twelve-month in VND deposit at some commercial banks Commercial banks Interest rate (%) Vietcombank 7.5 Vietinbank 6.8 VIB BIDV Military Bank 7.5 Techcombank 7.62 Source: vneconomy.vn However, in 2013 saw a significant increase in amount of foreign currency mobilized from 4.07% up to 27.1% thanks to preferential interest rate policy for USD in 2013 as well as more stable financial health 2.1.2 Structure of funds mobilized in terms of customers The pie charts below indicate clearer the funds structure in terms of customers at Vietcombank: Figure 4: Structure of funds mobilization in terms of customers Source: Annual report of VCB in 2012, 2013 Nguyen Thi Them_K13ATCC Page 39 Graduation Thesis Banking Academy In 2012, the capital mobilization from residents was 162,080 billion, increased by 33.3%; while that from corporations reached 141.868 billion VND that was 18.1% higher than that of 2011 The results refer that the public recognition increased for VCB In 2013, the amount of capital raised from residents in the economy increased 6.8% while that from corporations shown 28.8% rise Deposits from individuals and corporations increased over the period could be explained by the economic difficulties when other investment channels like real estate, gold, security are hard to make profit VCB raise idle funds from individuals as well as corporations in the economy Table 6: Funds mobilization from individuals and corporations from 2011 to 2013 2011 2012 Unit: billion VND 2013 Residents 108.107 162.080 173.101 Corporations 116.190 141.868 182.726 Source: VCB’s annual reports in 2012 and 2013 It can be seen obviously from the table that the proportion of funds mobilized from residents follow that of corporations closely though corporation is a little higher over the period from 2011 to 2013 The deposits from corporations in the economy increased in 2013 because of larger amount and more stable maturity However, VCB is trying to diversify its savings products to attract more and more individuals 2.1.3 Structure of funds in terms of maturity The table below illustrates the funds structure classified by maturity: Table 7: Structure of funds mobilization in terms of maturity 2011 2012 2013 Term deposits 75,741 68,087 85,499 Demand deposits 165,959 235,855 248,760 Total funds 241,700 303,942 334,259 Source: VCB’s financial reports 2012 and 2013 Nguyen Thi Them_K13ATCC Page 40 Graduation Thesis Banking Academy Figure 5: Vietcombank’s funds structure in the period 2011-2013 Source: VCB’s annual reports 2012, 2013 It can be seen easily that the majority of deposit in VCB is demand deposit which makes up approximately 70% and increased steadily over the period Term deposits constitutes about one third in the funds structure although the value of deposit climbed gradually from 75,741 to 85,499 in 2013 As the matter of fact, most depositors would like to get access to flexible deposits with interest and withdrawal terms meanwhile the retired and those who has no intention of investment by idle money would prefer term deposits offering higher interest rate 2.2 Reality of using funds mobilization Over the period 2011 and 2013, VCB made loans mostly to domestic individuals and corporations About 70% funds mobilized was used to make loans to customers Nguyen Thi Them_K13ATCC Page 41 Graduation Thesis Banking Academy 2.2.1 Loan portfolio by terms VCB makes loans to customer flexible in terms of maturity namely: short-term, medium-term and long-term loans The chart below shows the amount of funds contributed in different maturities Figure 6: Loans portfolio by terms from 2011 to 2013 Source: VCB financial reports in 2012 and 2013 Loans of all maturities show an upward trend over the period There is a large gap between short-term and medium term loans Short-term loans kept being number-one, climbing from 123,312 in 2011 to 175,257 billion in 2013 Medium and long-term loans shared the same picture of gradual increase 2.2.2 Reality of using funds mobilization Table 8: Efficiency of using funds mobilization from 2011 to 2013 2013 2012 2011 Customer’s loan Funds mobilized 274,341 241,167 209,418 334,259 82.07 303,942 79.3 231,700 90.4 Source: VCB financial reports 2012 and 2013 Nguyen Thi Them_K13ATCC (%) Page 42 Graduation Thesis Banking Academy As can be seen from the table, more than 90% funds was used to make loans to individuals and corporations in the economy In the context of economic difficulty in 2012, less demand of using capital from the economy, therefore the amount lent decreased standing at 79.3%, followed by a significant rise in 2013 hovering at 82% In addition, Vietcombank kept the capital adequacy ratio (CAR) at safe level strictly follow SBV’s requirement In 2013, although more than 80% of funds mobilization was utilized, bad debt ratio kept at 2.73% and CAR was 13.37%, higher than legal ratio regulated by SBV at 9%, which shows that Vietcombank developed and used the amount of funds mobilized in an effective and lower-risk way Evaluation on the efficiency of funds mobilization at Vietcombank 3.1 Achievements Despite the challenges in economic condition over the period from 2011 to 2013, VCB overcame many obstacles and hit the targets successfully and has become one of the most trustworthy commercial banks in Vietnam VCB was awarded “the best commercial bank in Vietnam” by domestic magazines Besides, VCB received a lot international rewards such as: “the best local currency cash management services in Vietnam” as voted by FIs; “the best Vietnamese trade bank”-six consecutive years( 2008-2013); and VCB was ranked 445th out of 1000 best commercial banks over the world and the best bank in Vietnam by The Banker in 2013 The amount of funds mobilization grew gradual from 2011 to 2013 standing at 334,259 billion VND in 2013 VCB also used the source of funds efficiently to make loans with 82.07%, 79.3% and 90.4% in 2013, 2012 and 2011 respectively Although State Bank of Vietnam lowered interest continuously, VCB adjusted the rates as competitive as possible to attract more depositors and borrowers Policy of mobilization is so flexible according to market changes such as: interest rate, promotion and customer service Nguyen Thi Them_K13ATCC Page 43 Graduation Thesis Banking Academy Technologies are applied in banking operations widely such as E-banking, mobile banking, SWIFT and so on which make VCB up-to-date with other commercial banks in Vietnam as well as over the world 3.2 Shortcomings and major causes 3.2.1 Shortcomings Besides above-mentioned achievements, VCB still needs to improve some limitations Firstly, funds structure is unsafe because demand deposit overwhelms term deposit which requires VCB to find out approaches to attract more time deposits In fact, it is risky to use demand deposits as well as short-term capital to finance long-term project or customer’s loans Secondly, by widening targeted as well as products designed to specific customers, VCB can remain traditional customers and expand its credit relations To clarify, VCB now keep its customers just because reputation and stable capital in hand rather than diverse products and services to customers Thirdly, interest rate that VCB offered is not as competitive as other commercial bank such as: Vietinbank, VIB, HD bank or TP bank over the period 2011-2013 Although it can be explained by reputation, some expenses which can be omitted in the overheads expenditure of VCB should be excluded to reduce the lending interest rate and raise depositing rate to customers Last but not least, although VCB paid great attention to social activities involving in education, public health care and charity as well as image promotion, marketing and advertisement also need improving so that VCB’s products will become more and more familiar with people of all ages Nguyen Thi Them_K13ATCC Page 44 Graduation Thesis Banking Academy 3.2.2 Major causes 3.2.2.1 Objective causes The first reason is changes from economy over the period 2011-2013 Especially, financial and banking sector struggled with economic difficulties like real estate freezing, VND devaluation, unemployment and so on, which stimulates savers to put their idle money into money-box instead of banks Moreover, tightening interest rate policy to keep inflation under control limited production and trading Also, depositors would like to demand deposits in lieu of time deposits because of flexibility in difficult economic situations Secondly, the increasing competition from other commercial banks, financial companies are worth being mentioned There are more than 30 commercial banks in Vietnam at the moment offering competitive interest rates as well as promotional campaigns which provide customers wider selections in competitive market which forces VCB to find out how to offer customers the most favorable rates in comparison with other banks Psychological factor also has great influence on depositors Vietnamese tend to be loyal to banks with state capital or keep money in safety box instead of depositing into banks For example, psychology had caused deep impact on Asia Commercial Bank (ACB) recently Fourthly, legal framework has not fully developed so that banking operations such as determine interest rate, credit contracts, credit limit not bring expected results 3.2.2.2 Subjective causes Firstly, marketing and promotional campaigns have not brought results as expected In fact, advertisement has effect on customers’ choice Nevertheless, VCB conducted limited approaches to launch VCB’s image to general public such as charity activities, handouts, sponsoring Secondly, banking staff have few chances to be trained how to use modern technology and machines especially in provinces far from head quarter Nguyen Thi Them_K13ATCC Page 45 Graduation Thesis Banking Academy Thirdly, modern technologies as well as hi-tech advances have not kept up with the pace of countries over the world Especially, application and software or programs supporting in credit activities are out of date at the moment in comparison with that in neighbor countries like China, Thailand or Singapore In conclusion, during the development from 2011-2013, VCB have proven that VCB is one of the most trustworthy commercial banks in Vietnam Despite difficulty in economy as well as fluctuation in financial market and banking sector over the period, VCB overcame every challenge with great effort and effective managerial plan and was recognized as number-one commercial bank in banking sector by international organizations and financial magazines Apart from outstanding achievements VCB obtained over the period from 2011 to 2013, there are some limitations and deficiencies that VCB needs to correct promptly The next chapter would be dug deeper into VCB’s shortcomings and what causes are Then, some possible suggestions will be proposed to enhance and solve VCB’s current situation Nguyen Thi Them_K13ATCC Page 46 Graduation Thesis Banking Academy CHAPTER 4: SOLUTIONS AND RECOMMENDATIONS TO ENHANCE THE EFFICIENCY OF FUNDS MOBILIZATION AT VIETCOMBANK Proposed suggestions to enhance the efficiency of funds at Vietcombank In the first place, VCB need to set up an appropriate funds structure by attracting more medium and long-term deposits to meet demand of long-term projects VCB, therefore, should focus on deposits from public instead of corporations because their aim is interest rather than payment purposes In the second place, it is suggested that VCB push up market studies to find out demands, new targeted customers and oriented market Besides, current customer base, small and medium enterprises (S.M.E) should be strongly focused because S.M.E makes up 97% total number of Vietnamese enterprises according to statistics in 2013 by the Petrotimes issued on 1st June, 2013 Thirdly, classifying and expanding customer base help to increase credit growth as well as better customer services Also, VCB should try to keep VIP customers because they bring bank a lot of benefits Traditional customers are those who have long-established transactions with VCB They also need special care as they are free but most efficient advertising agents for VCB With regard to potential customers, VCB need offer them preferential policies such as interest rate and promotion so that they can become VCB’s customers What is more, staff especially one in provinces should be regularly trained so that they can update to new technologies and enhance the ability to professionally consult It is advisory that VCB’s staff in districts and local provinces should be closely paid attention to besides that in major cities or big branches so as to narrow the gap among VCB’s system Last but not least, VCB should develop new product that specially designed for specific type of customers Target customers should be diversified in different period of time Thanks to this, more customers might turn to VCB to meet their needs Nguyen Thi Them_K13ATCC Page 47 Graduation Thesis Banking Academy Recommendations to enhance the efficiency of funds mobilization at Vietcombank The efficiency of funds mobilization has been a great concerned issue to government, State Bank of Vietnam and Vietcombank over the period To the best of my knowledge, I would like to indicate primary petitions as listed below 2.1 Recommendations to Government Macro-economic environment, which is one of the most important factors impacting on commercial bank’s operations can develop and stabilize by Government’s intervention as follows: Firstly, fully-develop legal framework, which closely follows international regulations should be built so that commercial banks can determine the scope to operate Besides, related laws need to be perfected and guided clearly Any bank violating the laws must be strictly fined Secondly, if more money is invested to develop banking sector’s facilities, non-cash payment will be improved and updated However, non-cash facility requires a huge capital to keep up with foreign countries It cannot be denied that once the payment system is fully equipped, the financial security as well as money creating ability will be enhanced significantly Thirdly, if monetary and financial policies must be come out promptly to stabilize the economy, commercial bank will make stable profit because of public’s greater trustworthiness in healthy economy and banks What is more, Vietnamese government should take close attention to expand international relationship so as to take advantages and support from international monetary organization Therefore, mobilizing activity will be facilitated by government’s diplomatic performance Nguyen Thi Them_K13ATCC Page 48 Graduation Thesis 2.2 Banking Academy Recommendations to the State Bank of Vietnam State Bank of Vietnam need to pay close attention to laws relating to banking services like Internet banking, e-banking, money transferring and so on so as to expand the advantages of cyber and technological advances in banking sector In other words, establishing facilities to make modern technologies come to practice is a need in intensive and extensive globalization nowadays Moreover, monetary and financial policies need to closely following market changes such as interest rate, money supply, foreign exchange, which help commercial bank shield themselves from risks and harsh competition in the market In addition, supervision and inspection should be regularly and strictly followed temporary laws to find out and fix financial problems promptly, which reduce risks and domino effect to banking systems as well as systematic risks 2.3 Recommendations to Vietcombank Although VCB is voted as the best commercial bank in Vietnam, something should be done to better its operations at the moment Firstly, it is advisory that VCB keep being the pioneer in banking with long-term strategies and policies that have made great contribution to the development as well as outstanding success of VCB over the period from 2011 to 2013 Secondly, training staff should be concentrated on so that customer advising service at Vietcombank might overcome other banks as well as gap between staff in different regions can be narrowed gradually Thirdly, VCB should continuously keep itself up to date to the latest technological advance so that VCB is strong enough to outstand and strengthen competitive capacity in the increasing taxing market Nguyen Thi Them_K13ATCC Page 49 Graduation Thesis Banking Academy Finally, by conducting variety of marketing and promotional campaigns, VCB can keep its loyal customers and attract new ones who wish higher earnings Despite the fact that marketing and promotion cost a huge amount of money, VCB’s reputation and image will come to customers’ mind to certain extent On balance, despite the fact that VCB has been the best commercial bank in Vietnam for three successively years from 2011 to 2013, some suggestions proposed in the fourth chapter still should be taken seriously Firstly, funds structure needs to be modified appropriately in every period of development so that the funds raised will be used in the most profitable way Secondly, if market research and development activity is performed well, the number of target customer will be expanded in oncoming period Thirdly, VCB is suggested to train its branch staff nationwide to narrow the regional gap With reference to petitions, something should be done by government, State Bank of Vietnam, and VCB itself Vietnamese government should be completed the legal framework for banking sector as well as financially invest in non-cash payment facility so that the banking system in Vietnam can keep pace with neighbor countries What is more, State Bank of Vietnam also promulgates monetary and financial policies closely follow the changes in financial market and the whole economy Finally, VCB should update itself to the latest technological advances to make banking operation easier; Further training for staff in all branches actually must be included in long-term strategies of VCB If all things are done, VCB can certainly keep the number-one commercial bank in banking sector in Vietnam Nguyen Thi Them_K13ATCC Page 50 Graduation Thesis Banking Academy REFERENCES VCB’s annual reports in 2012 and 2013 www.vietcombank.com.vn Bank Management and Financial Services (7th 2008) Peter Rose www.sbv.gov.vn Decree 49/2000/ND-CP issued on 12th September 2000 http://thuvienphapluat.vn/archive/Nghi-dinh-49-2000-ND-CP-to-chuc-va-hoatdong-cua-Ngan-hang-thuong-mai-vb46748.aspx Law on credit institutions 2000 issued on 16th, June 2010 http://www.moj.gov.vn/vbpq/Lists/Vn%20bn%20php%20lut/View_Detail.aspx?I temID=25814 http://www.thoibaonganhang.vn/tin-tuc/2-sme nhung-khach-hang-tiem-nangcua-ngan-hang-9063.html http://www.moj.gov.vn/tcdcpl/tintuc/Lists/PhapLuatKinhTe/View_detail.aspx?Ite mID=390 http://petrotimes.vn/news/vn/kinh-te/phai-bom-nhieu-von-cho-doanh-nghiep-vuava-nho.html Nguyen Thi Them_K13ATCC Page 51