Measures to improve the effectiveness of asset management at vietinbank, hoang mai branch,graduation thesis

STATE BANK OF VIETNAM BANKING ACADEMY Foreign Language Faculty GRADUATION THESIS TOPIC: MEASURES TO IMPROVE THE EFFECTIVENESS OF ASSET MANAGEMENT AT VIETINBANK, HOANG MAI BRANCH " Supervisors: M.A Tran Thi Xuan Anh Student: Dương Kim Huệ ID Number: 13A7510063 Ha Noi - 26th June 2014 STATE BANK OF VIETNAM BANKING ACADEMY Foreign Language Faculty GRADUATION THESIS TOPIC: MEASURES TO IMPROVE THE EFFECTIVENESS OF ASSET MANAGEMENT AT VIETINBANK, HOANG MAI BRANCH " Supervisors: M.A Tran Thi Xuan Anh Student: Dương Kim Huệ ID Number: 13A7510063 Ha Noi - 26th June 2014 GRADUATION THESIS ACKNOWLEDGEMENT This paper could not have been completed without the help, encouragement and support from a number of people who all deserve my sincerest gratitude and appreciation First of all, I am particularly grateful for the assistance given by Master Tran Thi Xuan Anh for her patience and constructive advice throughout the course of the thesis Thanks to her continual encouragement, careful reading, critical comments and patient guidance, I have done the work more enjoyable and easier Furthermore, I take immense pleasure in thanking the Faculty of Foreign Language and Training Department, Banking Academy for equipping significant knowledge and opportunity to perform my thesis Special words of thank also go to all informants for their willing participation in the study I greatly appreciate their generosity with their time and efforts in filling in the questionnaire Without this noticeable support this paper could not have been possible In addition, I also thank the working staff of Vietnam joint stock commercial bank for industry and trade Hoang Mai Branch for their whole- hearted supports: providing useful and effective materials as well as creating the best conditions for me to work in a authentic working environment and to apply my taught knowledge for my report- making process Hanoi, May 25th, 2014 Duong Kim Hue – ATCA – K13 GRADUATION THESIS ABSTRACT Since taking part in the world trade organization (WTO), Viet Nam has gained significant accomplishments for 20 years With the expectation becoming the industrial country 2020, Viet Nam has to overcome many challenges and obstacles in the next ten years Ho Finally, after the assessment about the importance of inflation in Vietnam, my paper aims to systemize fundamental theories of inflation and suggest a variety of solutions The expectation is that this research could make contribution to the government’s macroeconomic plans in order to have a part in building a prosperous Vietnam economy However, banking system still did not meet the requirements of the economy due to low performance It is remarkable that in our country, banking credit activities in the economic environment are under incompleted legal system, low effective legislation, natural disasters often happen resulting in higher degree of risk and lower business performance of banks In fact, it requires commercial banks to continue innovative activities to find the effective solutions to make the economy better and improve the efficiency of their own operations That is reason why my paper aims to systemize fundamental theories of asset management and suggest a variety of solutions The expectation is that this research could make contribution to the government’s macroeconomic plans in order to have a part in building a prosperous Vietnam economy Duong Kim Hue – ATCA – K13 GRADUATION THESIS TABLE OF CONTENTS INTRODUCTION Chapter 1: ASSETS MANAGEMENT OF COMMERCIAL BANKS IN THE MARKET ECONOMY 1.1 OVERVIEW OF COMMERCIAL BANK’ASSETS 1.1.1 Definition 1.1.2 Characteristics of bank asset 1.1.3 Classification of bank asset 1.1.3.1 Reserved items 1.1.3.2 Investment securities items 1.1.3.3 Lending items 1.1.3.4 Fixed assets and other assets 1.2 Management of commercial bank assets 1.2.1 Definition and objectives 1.2.1.1 Definition 1.2.1.2 Objectives and tasks 1.2.2 The basic content of asset management 1.2.2.1 Managing structure of assets 1.2.2.2 Reserves management 1.2.2.3 Liquidity management of the Bank 1.2.3 Managing an investment or securities 1.2.3.1 Securities investment portfolio 1.2.3.2 Selecting portfolio securities is effective 1.2.4 Managing loan items 1.2.5 Management of fixed assets and other assets 10 1.2.5.1 Management of fixed assets 10 1.2.5.2 Managing other assets 10 CHAPTER 2: CURRENT SITUATION OF ASSET MANAGEMENT AT VIETINBANK, HOANG MAI BRANCH 12 2.1 Overview of Vietinbank, Hoang Mai, Ha Noi 12 Duong Kim Hue – ATCA – K13 GRADUATION THESIS 2.1.1 Summary of establishment and development history 12 2.1.2 Structure of the branch’s organization 12 2.1.3 Functions and duties of the branch 14 2.2 Status of business at Vietinbank Hoang Mai 14 2.1.1 Capital raising activities 14 2.1.2 Credit activities 16 2.2.3 International payment operations and foreign currency trading 17 2.3 Situation of asset management at Vietinbank Hoang Mai branch 18 2.3.1 Asset Management structure in Hoang Mai branch Vietinbank 18 2.3.2 Administration of reserves items 20 2.3.2.1 Administration of required reserves 20 2.3.2.2 Administration of surplus reserves 20 2.3.3 Managing investment items at Hoang Mai Vietinbank 20 2.3.4 Administration of lending items at Vietinbank Hoang Mai 21 2.3.4.1 Managing credit scale 21 2.3.4.2 Administrating structure of the loans 22 2.3.5 Managing the implementation of the lending process 23 2.3.6 Management of monitoring loans 24 2.3.7 Measures that Vietinbank Hoang Mai has done to improve the quality of asset management 25 2.3.7.1 In reserves and liquidity administration 25 2.3.7.2 In loans item’s administration 25 2.3.7.3 In fixed asset and others ‘s administration 26 2.3.8 Evaluateing the management situation at Vietinbank Hoang Mai 26 2.3.8.1 These achievements 26 2.3.8.2 The existence and cause of these problems 28 CHAPTER 3: IMPROVEMENT SOLUTIONS IN ASSETS AND RECOMMENDATIONS MANAGEMENT AT FOR VIETINBANK, BRANCH HOANG MAI, HA NOI 32 3.1 Orientation of asset management at Vietinbank Hoang Mai 32 Duong Kim Hue – ATCA – K13 GRADUATION THESIS 3.1.1 General orientation 32 3.1.2 Orientation on property management’s mission 32 3.2 Solutions to complete asset management activities at Vietinbank Hoang Mai branch 33 3.2.1 Restructure assets of Vietinbank Hoang Mai 33 3.2.2 Improving the quality of governance and liquidity reserves at Vietinbank Hoang Mai 33 3.2.3 Solutions for the management of investment items at Vietinbank Hoang Mai 35 3.2.4 Solutions for governance of lending items atVietinbank Hoang Mai branch 35 3.2.4.1 Develop an effective credit policy 35 3.2.4.2 Completing customer policy 36 3.2.4.3 Seriously implement the lending process 38 3.2.4.4 Pay attention to the evaluation of the loan process 38 3.2.4.5 Diversify the loan portfolio 38 3.2.4.6 Promote the monitoring and supervision of loans 39 3.2.4.7 Solutions to credit risk management 39 3.2.4.8 Solutions to the lending operations 41 3.2.5 Some supporting solutions 41 3.2.5.1 HR ( human resourses solutions) 41 3.2.5.2 Technological solutions 42 3.3 Recommendations to implement the proposed solutions 42 3.3.1 Proposals to the government 42 3.3.2 Recommendations to State Bank of Vietnam 43 3.3.3 Propasals to Vietinbank Vietnam 43 CONCLUSION 45 REFERENCES 46 Duong Kim Hue – ATCA – K13 GRADUATION THESIS TABLE OF ABBREVIATIONS ABBREVIA MEANING TION VIETINBAN K Vietnam joint stock commercial bank for industry and trade CB Commercial Bank CIC Credit Information Center IT Information Technology SMEs Small and Medium Enterprises SVB The State Bank of Vietnam VND Vietnam Dong Duong Kim Hue – ATCA – K13 GRADUATION THESIS LIST OF TABLES Table 1: Fund rasing activities from 2011 to 2013 Table 2: Credit activities at Vietinbank Hoang Mai from 2011 to 2013 Table 3: Asset structure of Vietinbank Hoang Mai from 2011 to 2013 Table 4: The growth rate of assets at Vietinbank Hoang Mai from 2011 to 2013 Table 5: Results of Credit activities at Vietinbank Hoang Mai from 2011 to 2013 Table 6: Loans classified under the lending terms at Vietinbank Hoang Mai from 2011 to 2013 LIST OF ILLUSTRATIONS Diagram 1: Classification of bank assets Diagram 2: Process of lending items management Diagram 3: Structure of Vietinbank Hoang Mai Diagram 4: Propotion of commercial bank market share in 2013 Diagram 5: Comparision on the growth rate of assets at Vietinbank Hoang Mai Duong Kim Hue – ATCA – K13 GRADUATION THESIS INTRODUCTION The importance and necessity of the theme In the market economy, banking activities are sensitive areas as well as the entire nervous system of the economy Therefore , reforming the banking system and improving the efficiency of its operation are the foundation for building and developing the national economy modernization Banking system in VN are being renovated and initially obtained encouraging results; however, it still did not meet the requirements of the economy due to low performance It is remarkable that in our country, banking credit activities in the economic environment are under incompleted legal system, low effective legislation, natural disasters often happen resulting in higher degree of risk and lower business performance of banks In fact, it requires banking system , especially the banks to continue innovative activities to find the effective solutions to make the economy better and improve the efficiency of their own operations In this context , the role of assets managament is increasingly important Through fixed assets’s management ; banks can improve the efficiency of capital use, guarantee the saty for operations , avoid the risks and gain high profit On account of asset administration’s importance, I decided to choose the topic" Measures to improve the effectiveness of asset management at Vietinbank, Hoang Mai branch " with a desire to contribute partially to the asset management’s governance at Vietinbank Hoang Mai branch Objectives of the study The thesis is going to resolve three main issues as follow: - Systematizing the theoretical issues of asset management in banking activities - Analyzing and assessing the status of aset management at Vietinbank Hoang Mai - Providing suggested solutions in order to improve asset management at Vietinbank Hoang Mai Duong Kim Hue – ATCA – K13 GRADUATION THESIS CHAPTER 3: SOLUTIONS AND RECOMMENDATIONS FOR IMPROVEMENT IN ASSETS MANAGEMENT AT VIETINBANK, BRANCH HOANG MAI, HA NOI 3.1 Orientation of asset management at Vietinbank Hoang Mai 3.1.1 General orientation The basic orientation is to maintain growth at a reasonable level to ensure balance , safety and profitability, expand and improve the service quality of banks with sufficient competitiveness; focus on modernization’s investment, training of human resources integration for the next years." To successfully implement the overall goal, in 2014, Hoang Mai Vietinbank need to perform some specific growth targets as following : Specifically, the total local currency deposits increased by 22% compared to 31/12/2014 31/12/2013 Foreign currency to rise 15 % 31/12/2014 Up to 31/12/2014, the total loans increased 16% to reach 1,780 billion.The percentage of long- term normally doesn’t exceed 45 % of total loans Overdue less than % Finance: ensuring sufficient income to offset expenses, salaries, shift meal, and provisions for income risk for workers which reach the maximum level, not less than the amount spent in 2013 Fee income: increase the proportion of 5% over 2014, according to calculations based on the new method 3.1.2 Orientation on property management’s mission Debt restructuring: reflecting the true state of operations and financial condition Vietinbank Hoang Mai Improved affordability and liquidity: Balance between liquidity and profitability , while ensuring liquidity and profits, strive to meet the reserve’s requirements and demand for loans and cash withdrawals of customers Duong Kim Hue – ATCA – K13 32 GRADUATION THESIS Improved loans portfolio: Classifying loans effectively on the level of risk with the following categories: very high quality, good quality, medium quality, for small and medium projects, the rest for new investment projects Strengthening risk management systems: Enhancing assessment, prediction and risks mitigation that may occur in all aspects of business operations of banks, ensure the safety and enhance the credibilit, reliability creditworthiness of clients Focus on improving credit quality through strict consideration about borrowers, to enhance self-responsibility of each unit and individual 3.2 Solutions to complete asset management activities at Vietinbank Hoang Mai branch 3.2.1 Restructure assets of Vietinbank Hoang Mai In fact, there has been a significant change in scale of bank assets in recent times However, the structure is still unreasonable Specifically, loans account for the largest proportion in the assets list while investment items almost have no density In order to ensure a safe assets structure and profitability, the branch needs to restructure its assets Specifically: Specifically, the bank needs to raise the proportion of investments in the total of assets while reducing the proportion of loan items At first, bringing the proportion of investments made up to 20-25 % of asset is very difficult; however, banks can gradually balance the use of lending and investment items, ensure liquidity amounts of certain securities to enhance liquidity for banks Regular monitoring and evaluation of shortcomings are necessary to adjust to the appropriate targets and measures to urge the departments to ensure the implementation of proposed plans 3.2.2 Improving the quality of governance and liquidity reserves at Vietinbank Hoang Mai Especially in the coming year, business activities of banks become more diversed and complex, and the market is more sensitive leading to the rise in the reserve ratio of banks at this time Duong Kim Hue – ATCA – K13 33 GRADUATION THESIS Currently, Vietinbank Hoang Mai just stop at making cash plan in the near future based on tracking customer’s demand in the past, at present and in the future, based on the situation of economic development, social sector and country while banks need to split the liquidity’s needs of banks into three parts: regular demand, seasonal demand and unexpected needs Since then, banks have the appropriate level of reserves to avoid excess cash shortage, more proactive in payment In particular, regular demand will often be met with cash reserves in vaults and short -term valuable papers The second part will be met by borrowings on the money markets through the previous credit commitments with the lenders in which the amount , duration and interest rates are predetermined The last part will be dealt with non- deposit borrowings on the money market such as issuance of certificates of deposit which can be transferred or borrowed funds on the interbank market goods due to unprediction With current management mechanism of cash now, there is no difficulty in payment because the amount of reserve are suitable for the operations of the bank Yet it remains a shortage of cash so that bank have to ask for a cash transfer from senior, causing a delay in the payment process To remedy this situation, Vietinbank Hoang mai need to conduct a wide range of solutions such as : Firstly, set up tracking software of term deposits and withdrawals of clients To monitor a withdrawal period of the customer, banks should establish monitoring software of client’s withdrawal term so that it can balance the capital for designing preparation plan and minimizing liquidity risk It can be said in the period of information technology’s modernization, the software is set up and the split of terms into different interest rates is easily done Banks can apply the solutions to increase offshore funds to attract customers towards themselves Secondly, banks need good organizational customer research to make concrete policy for each client: Establishing a good and durable relationship with the customers, the implementation of policies to attract customers through recommendations encouraging physical benefits together with a Duong Kim Hue – ATCA – K13 consistent 34 GRADUATION THESIS mechanism of customer caring This allows to create business growth and create attractiveness to new customers through the promotion and customer relations In addition, banks should promote the electronic payments, bilateral payments, payment network with larger units to attract capital from international organizations, socio-political organizations and financial institutions 3.2.3 Solutions for the management of investment items at Vietinbank Hoang Mai Currently, the activities of the stock market so far has made remarkable progress However, the instability of the market still exist and market information is not completely correct This limitation affects the selection of a securities portfolio of commercial banks effectively However, the bank can take actions in deciding the scale when purchasing government securities on the balance of certain items between lending and investment items On the other hand, banks need to participate actively in the inter-bank market which thereby strengthen the partnerships with banks It help banks have additional sources of liquidity when banks need liquidity management’s implementation strategy combined with assets By actively participating in investment activities and financial will help the bank diversify an investment and raise the share of this item in the assets catalog 3.2.4 Solutions for governance of lending items atVietinbank Hoang Mai branch 3.2.4.1 Develop an effective credit policy Developing credit policies is the concretization of the regulations on bank lending at Vietinbank Hoang Mai branch based on the operation of the technology A lending policy should have clearly defined and must be communicated to all relevant parts in the form of specific documents Based on the assessment of lending items’s management in recent years, according to the authors of the bank credit we should have additional points as following : Duong Kim Hue – ATCA – K13 35 GRADUATION THESIS • Pay attention to attract more business customers Especially, the enterprises which have overseas investments and medium businesses and meet credit demand for all segments of the population • Expanding loans to industrial and commercial sectors and consumption loans • Lending policy should also state the type of loans which can provide geographic areas, industries and services that need to focus • Policy makers should also lend the structure of these loans , their proportion in the total loans of the bank 3.2.4.2 Completing customer policy Bank’s business operations depend on customers in the cycle of mobilization, lending and capital circulation Thus if a bank want to survive and develop sustainably, it must have both appropriate and long term customer policy To so, the bank should have clear policies and mechanisms to establish and maintain good relationships with customers All followings are the main contents of a client policy that Vietinbank Hoang Mai branch should develop in the future: a Customer classification Customers maybe the persons who can use capital with right purposes and interest and then make repayment on time But it can also be customers who can not repay the loans These customers need to borrow money and find ways to borrow money, so banks are easy to misunderstand and the moral hazard of borrowers will take place immediately However, customers can also refuse to borrow money from the bank if the process the bank implement does not satisfy customer’s loans demand, or the bank’s interest rate is too high In this case, the bank will suffer a loss because of the dramatically reduced number of borrowers With these characteristics, in the lending operations , building strategies for each type of customer is very important and meaningful strategy throughout the business process Duong Kim Hue – ATCA – K13 36 GRADUATION THESIS b Establish good and durable relationships with clients In bank’s operation, customers not only the persons who provide capital for credit activity but also are the ones using this sources Therefore, customer policies the are very important Establishing good and long-lasting relationships with clients will help bank have relevant information and conditions with appropriate policies to be able to stand firmly in a competitive environment c Implement policies to attract customers through encouraging physical benefits Firstly, encouraging residential areas to step up the payment by check and debit card through opening deposits at the bank Because our country’s economy develop stably and income of the population increas which will lead to the extention of demand for non-cash payments The economic benefits of check’s usage will replace the incentives of bank material benefits Secondly, supplying diversed means of payment suitable for the request of customers Currently, economic organizations and residents in the economic transactions are afraid to make payment by counting cash because it takes time and rather costly If banks perform non-cash payments well, economic organizations and people will deposit cash into bank and bank will carry out treasury services and payment services for customers It is also an effective solution to help increase the volume of cash in the bank d Customer after-services plans Because the bank’s business operations depends on the customers, they need to maintain relationships with traditional customers and develop relationships with new customers For this reasons, banks need to have appropriate customer afterservices plans Good customer service can gain many benefits such as: Customer services allow to create growth in business perormance and attract more new customers through the promotion and customer’s relations Understanding and updating knowledge about types of products in coordination with the maintenance and development of good relations with Duong Kim Hue – ATCA – K13 37 GRADUATION THESIS customers will help staff can have deep understanding about what customer needs and advise them the appropriate products and services Good quality of customer care( services) will enhance the image of the bank and their reputation to provide the competive ability for banks on price 3.2.4.3 Seriously implement the lending process Bank needs to improve the quality of monitoring the implementation of institutional policies and operation processes of Vietinbank Hoang Mai so that we can detect and deal with promptly the weakness and replicate these positive factors To make a good lending process, Vietinbank Hoang Mai should complete information systems Currently, a shortage of information is one of the main causes of credit risk at branch Bank needs to explore the correct information so that bank can evaluate customer’s information in a more comprehensive way and see the advantages as well as disadvantages of the customer to make right decisions 3.2.4.4 Pay attention to the evaluation of the loan process The toughest part of the process can be seen as “technology evaluation” Of course, banks will have to hire experts ; however, the difficulty is that where to hire them? So the evaluation of bank entirely depends on the ability to capture information of credit officers So every credit staff should consciously improve their qualifications to meet the demands of the market To assess the project which have high complexity and large –scale, credit staff should consult some research materials related to the projects and schemes such as price fluctuation, the situation of customer consumption through the mass media( newspapers, TV ), using modern technology such as the internet In addition, credit staff can collect information from the department or from the central statistics CIC In the current context when providing public information is not favorable, bank need to build a synchronous information system at all branches to enable credit staff verify loans in the most accurate way 3.2.4.5 Diversify the loan portfolio • Bank should be more active with the non-state sector( ngoai quoc doanh): This sector is a really potential and promising future for bank Bank should requires Duong Kim Hue – ATCA – K13 38 GRADUATION THESIS an appropriate investment policy for this sector on the basis of analyzing and accurately assessing the operation of each economic unit to develop effectively and safely for the operation Expanding lending activities towards increasing the proportion of loans to non-state contributes to the portfolio a higher result To disburse projects effectively, it is necessary to have advices from the provision of business and the close guidance, determination of the Bank for the provincial leadership 3.2.4.6 Promote the monitoring and supervision of loans After making disbursement to clients, credit staff should regularly monitor production activities of our clients The method in which credit staff should use when monitoring is: Visit directly to the borrower’s manufacture locations Then, take full advantage of borrowers whenever they pay interest to the bank Through the means of the press and television, bank can supervise strictly the situaton of the business and their business performances Since then, credit staff can base on the assessment of the borrower in many different ways The ultimate goal of tracking loans are timely detecting any problematic debts( loans) and proposing timely countermeasures 3.2.4.7 Solutions to credit risk management a Sorting loans according to risk level At present, Vietinbank Hoang Mai just at keeping track of loans according to criteria: term debts , bad debts and crossed debts To improve the quality of asset governance, especially credit quality , banks can use the method of arranging loans portfolio in order of various risks These loans which have great value will be scrutinized under the specific criteria For example: The periodical principal’s payment rate is on time or not? How is the business situation of the borrower And should it be monitored regularly? These small loans will be checked at random manner to minimize costs When reviewing or evaluating term loans( debts, banks can classify as follows: Duong Kim Hue – ATCA – K13 39 GRADUATION THESIS These loans are progressing well but there are a few minor defects were classified as a type of loan is also considered These loans contain many defection, it is necessary to plan monitoring the situation closely monitor business operations of borrowers while planning to handle risk signs The loans contained a germ of risks which can not be recovered under the plan will be ranked in jeopardy In this case, banks need to change policies and procedures for loan For example, loans are no longer safe due to the decrease of the bank mortgage assets, customers may be ed an additional collateral asset b Determining the process of credit risk management To control and limit the credit risk, the risk management must be conducted in a number of specific steps : (1) Identify and measure credit risk trends that may occur (2) Consider the operational policies of the departments, especially the credit departments and the implementation of policies for the early detection of risks (3) Analyse the relationship between policy and management changes planned TD of short-term and long- term (4) Analyse the results of risk management policies and solutions to risk management (5) The implementation of this process will help banks assess whether these risk management policies are appropriate to the situation and the business environment of bannk or not Since then, the bank can be adjusted to be suitable to the actual situations c Solutions to handle bad loans To handle bad loans, banks should firstly analyze the causes of overdue loans Then, banks propose some appropriate suitable measures For clients who are reluctant to repay or have no intention to repay, banks need to use tough measures combined with the support of local authorities (the authorities to release mortgage assets and force them to recover the debt the faster) Duong Kim Hue – ATCA – K13 40 GRADUATION THESIS It should be definitely determined in any case to avoid the spread of the debt that may not paid to the bank For the lending group with no guarantee assets but the debtor still works, banks need debt collection and foreclosure Specifically, banks can implement a number of measures such as debt sale, debt conversion into equity and transfer of capital 3.2.4.8 Solutions to the lending operations Vietinbank Hoang Mai need to require leaders regularly visit and supervise locations monthly to know the reality of credit situation , and coordinating with local agencies to promptly solve problems and enable customers to understand the policies of the bank’s credit rules Appointing credit officers to approach the local government through regular meetings and communes to promptly understand the situation and customer’s needs Regularly or periodically organizing training regimes and rules of credit branches about work (operations) to strengthen and enhance professionalism as well as ensuring loan’s quality and efficiency Regularly attach activities of banks to the responsibility of the leadership or the party committee and government from senior to junior 3.2.5 Some supporting solutions 3.2.5.1 HR ( human resourses solutions) The fact that bank need to be more interested in the training of human resources, e.g, regularly organize training cources for bank staff However, in the current competitive conditions, banks need to have more robust measures such as : Quickly enhance knowledge of the market economy in general and specific environmental conditions in VN together with raisung awareness of the economy’s bank credit with many active ingredients in the market mechanism Through new training, retraining, experimentation will make staff understand the nature of credit and positive side of the market mechanism, the law relating to the credit operation Duong Kim Hue – ATCA – K13 41 GRADUATION THESIS Specially , equip credit staff with lending regulations, lending procedures, lending conditions, customer classification survey and inspection and control Create conditions to improve bank staff in collecting and analyzing information to predict the trends in interest rates, exchange rates, inflation to be able to make feasible and rational plans Relocate regularly credit officers’s workplace in bank and management of borrowers to eliminate collusion or connivance between officials and credit clients There remuneration from that competition to attract new talent , and motivate creative dynamism in business activities of the bank staff Creating an atmosphere of hard working with the style industry Strengthen the relationship between leadership and staffs , thereby helping reduce the costs of employee turnover and the costs related to recruitment and selection and training 3.2.5.2 Technological solutions Continue equiping with modern technical facilities, working facilities, suitable computer system with modernization targets to serve well to business and good exploitation of database WB program, the continue apply software programs to assist another step computerization of all operations of the bank Increase spending on the research and new applications in software management, especially accounting software, project evaluation software and customer information management software 3.3 Recommendations to implement the proposed solutions 3.3.1 Proposals to the government Firstly , the Government proposed a complete system of legal documents related to the handling of assets to recover the debt in order to relieve the congestion in the current issue of debt collection and reduce risks for banks and help banks recover capital quickly when the borrower has no sense Secondly, the loans without no asset guarantee should not be secured and combined closely with the handling loans subject to bad debts , overdue debts and the government need to support timely the loans to borrowers as well as banks Duong Kim Hue – ATCA – K13 42 GRADUATION THESIS Thirdly, the State Securities Commission should coordinate and operate smoothly in the new situation , and must set forth the policies and mechanisms appropriate to the operational characteristics of bank Fourthly, completing legal documents and strengthening supervision of nonstate enterprise’s activities Government’s departments need to develop a draft decree to implement business rules and create a legal environment for private enterprises , non-state economic development lawful stably and steadily Fifthly, accelerating the equitization process of large scle state-owned business which are effective but not in critical areas to create growth rate 3.3.2 Recommendations to State Bank of Vietnam Continue to improve open-market operations: the central bank should coordinate with relevant ministries, develop repurchasing market of valuable documents on the secondary market between the State Bank and credit institutions or among banks This solution has important implications in determining the price of the credit banks Take measures to improve the efficiency of information bank center, preparing the conditions for the Center to operate under the principle of free trade the stimulates banks to provide full information in the most accurate way Attract more projects and international training programs from other countries to support the banking sector about professional staff training, project evaluation and analysis of risk assessment for bank staff who are equipped with modern technology 3.3.3 Propasals to Vietinbank Vietnam Vietinbank Vietnam’s leaders should provide clear guidelines in the securities and investment management of securities with investment activities On that basis, Vietinbank establishe a team of professionals specialized business operations to build and write up policy formulation mechanism in investment securities Taking measures to boost the company's debt management and exploiting assets of Vietinbank Vietnam Duong Kim Hue – ATCA – K13 43 GRADUATION THESIS Establishing an organization which include experts in fields such as engineering construction, experts in the field of agriculture to support the Vietinbank when evaluating large projects or requiring complex extensive knowledge questions Regularly training operation classes and professional legal credit documents related to credit activities for credit staff directly Considering and partially supporting for branch’s capital so that the branch can actively manage their operations, then helps the administration of bank implemented fully and completely in all respects Organizing workshops and seminars between banks with business associations, industry organizations such as chambers of commerce Vietnam industry the Trade Association of the city of Hanoi, Vietnam Fertilizer Association, Association of Small and Medium Enterprises, Vietnam farmers Union signed the joint resolution, the memorandum, program coordination, the working principle and create unity in transactions between affiliated entities and industry systems profession Modernising information management systems, data warehouse construction and setting up management software of Vietinbank as well as allowing operators online and fast data Developing policies, regulations, wages, promotion, reward, discipline closely tied with the principle of the results Recruiting staff according to current job needs and must meet the selection criteria Sorting organizational structure towards two executive level business directly, eliminating the intermediate administrative level Developing master plan for long-term management including planning the objectives, strategies, business plans which provide the basis for specific annual plans quarterl What I have mentioned above are some solutions and recommendations that I make to contribute to improve governance of assets at Vietinbank Hoang Mai Ha Noi Duong Kim Hue – ATCA – K13 44 GRADUATION THESIS CONCLUSION The management of bank assets plays an important role in the governance of bank’s business activities It determines the performance and quality of bank operations Recognizing the importance of this issue, that thesis has focused on the following points : Systemizing some basic theories of administration underlying each item of assets Giving the concept, characteristics and objectives of reserve management, liquidity management, portfolio management, loans item management, fixed asset management and other assets Also, I refers to the methods, strategies, factors affecting the quality of each asset item’s administration Analyzing the current situation of the asset management at Vietinbank Hoang Mai Since then, the thesis show all the results as well as existing problems and the causes of the existence there On a theoretical basis, the thesis give actual status of the asset management at Vietinbank Hoang Mai and provides some key solutions and recommendations to contribute to improving the quality of corporate governance in bank assets Although I myself have strived my best to accomplish these results, the thesis should not avoid these shortcomings due to the field of study of the subject is a very broad and relatively complex and the limited time and practical I am looking forward to the contribution of the teachers, offical staff at Mai Vietinbank and anyone of those who care about this issue Duong Kim Hue – ATCA – K13 45 GRADUATION THESIS REFERENCES Books, articles and reports Fredetic A Mishkin – The Economic of money, banking and financial market – 7th ( 2004) Columbia university – United State of America The State bank of Vietnam – Annual report 2010 – 2013 En.wikipedia.org, Inflaion, 2010 Financial statements and business report of Vietinbank from 2010-2013 IMF, “Vietnam: 2010 Article IV Consultation—Staff Report and Public Information Notice,” September 2010 Websites www.sbc.gove.vn www.vneconomy.vn http://vi.scribd.com www.worldbank.org 10.www.vietinbank.vn Duong Kim Hue – ATCA – K13 46