Credit risk and solutions to reduce credit risk in bank for investment and development of vietnam bac ninh branch,graduation thesis

THE STATE BANK OF VIETNAM BANKING ACADEMY FOREIGN LANGUAGE FACULTY  GRADUATION THESIS TOPIC: CREDIT RISK AND SOLUTIONS TO REDUCE CREDIT RISK IN BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM - BAC NINH BRANCH Student: Nguyen Thi Kim Dung Student ID: 13A7510022 Class: ATCB-K13 Supervisor: Ms Can Thuy Lien (MA) Hanoi, May 26, 2014 THE STATE BANK OF VIETNAM BANKING ACADEMY FOREIGN LANGUAGE FACULTY  GRADUATION THESIS Topic: CREDIT RISK AND SOLUTIONS TO REDUCE CREDIT RISK IN BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM - BAC NINH BRANCH Student: Nguyen Thi Kim Dung Student ID: 13A7510022 Class: ATCB-K13 Supervisor: Ms Can Thuy Lien (MA) Hanoi, May 26, 2014 DEDICATION This thesis is dedicated to my family who has never failed to give me moral and financial support from the beginning of my study Also, this thesis is dedicated to the lecturers and students in Faculty of foreign language Finally, this thesis is dedicated to Banking Academy of Vietnam ACKNOWLEDGEMENT First of all, I want to express my sincere thanks to my teachers, who directly teach and transfer the knowledge to me The knowledge is the basic foundation, the invaluable luggage, the first step for me to start my career confidently Especially, I want to convey my deeply sincere thanks to Ms Can Thuy Lien for her great help during the period I write my graduation thesis It is clear that I can not finish this thesis successfully without her support In addition, I also thank the working staff of Joint Stock Commercial Bank for Investment and Development of Viet Nam-Bac Ninh Branch for their whole-hearted supports: providing useful and effective materials as well as creating the best conditions for me to work and to apply my knowledge during doing research Hanoi, 26th May, 2014 TABLE OF CONTENTS INTRODUCTION .1 CHAPTER 1: THEORETICAL BACKGROUND OF CREDIT RISKS IN THE OPERATION OF COMMERCIAL BANKS 1.1 Credit risk in banking activities 1.1.1 Definition 1.1.2 Classification of credit risk 1.1.3 Characteristics of credit risk 1.1.4 Reasons for credit risk .5 1.1.5 Consequences of credit risk .7 1.1.6 Standards to evaluate credit risk 1.2 Credit risk management .9 1.2.1 The necessity of credit risk management .9 1.2.2 Techniques to manage credit risk 10 CONCLUSION OF CHAPTER 12 CHAPTER 2: REAL SITUATION OF CREDIT RISK IN BANK FOR INVESTMENT AND DEVELOPMENT OF VIET NAM - BAC NINH BRANCH 13 2.1 Overview of Bank for Investment & Development of Viet Nam - Bac Ninh Branch 13 2.1.1 Summary of establishment and development history 13 2.1.2 The organizational structure of the branch 13 2.1.3 Functions and duties of the branch 15 2.2 Status of raising capital in Bank for Investment and Development of Viet Nam - Bac Ninh Branch 16 2.3 The status of credit activities in Bank for Investment and Development of Viet Nam-Bac Ninh Branch 18 2.3.1 Outstanding loans classified by the term loan .19 2.3.2 Outstanding loans classified by economic sector 20 2.3.3 Outstanding loans classified by currency 21 2.3.4 Outstanding loans classified by collateral 22 2.3.5 Outstanding loans classified by business sector 23 2.4 Status of credit risk management in Bank for Investment and Development of Viet Nam - Bac Ninh Branch 24 2.4.1 Credit risk management policy .24 2.4.2 The status of overdue debts and bad debts of Bank for Investment and Development of Viet Nam - Bac Ninh Branch 27 2.4.3 Provision 30 2.5 Evaluation credit risk status and credit risk management in Bank for Investment and Development of Viet Nam - Bac Ninh Branch .31 2.5.1 Implemented methods and achieved results 31 2.5.2 Drawbacks and reasons 31 CONCLUSION OF CHAPTER 33 CHAPTER 3: SOLUTIONS TO PREVENTING AND REDUCING CREDIT RISK IN BANK FOR INVESTMENT AND DEVELOPMENT OF VIET NAM BAC NINH BRANCH .34 3.1 Development orientations of credit activities in the near future (until 2015) 34 3.2 Solutions to reduce credit risk in Bank for Investment and Development of Viet Nam - Bac Ninh Branch 35 3.2.1 Increasing the quality of credit information management system to meet needs of credit risk limitations .35 3.2.2 Improving the quality of human resources; building up investment and labor forces strategies 36 3.2.3 Strengthening credit testing and supervision 36 3.3 Other recommendations .37 3.3.1 Recommendations to Government .37 3.3.2 Recommendations to SBV .38 3.3.3 Recommendations to BIDV 38 CONCLUSION OF CHAPTER 40 CONCLUSION 41 REFERENCES 42 TABLE OF ABBREVIATIONS ABBREVIATION MEANING BIDV Bank for Investment and Development of Viet Nam CB Commercial Bank CIC Credit Information Center IT Information Technology NPL Non-performing loan SVB The State Bank of Vietnam VND Vietnam Dong LIST OF TABLES Pages Table : Total mobilized capital from 2011 to 2013 17 Table 2: Outstanding loan classified by term loan 19 Table 3: Outstanding loan classified by economic sector 20 Table Outstanding loan classified by currency 21 Table 5: Outstanding loan classified by collateral 22 Table 6: Outstanding loan classified by business sector 23 Table 7: Delinquency 27 Table 8: Bad debts 27 Table 9: Standard loan ratio, overdue loan ratio and bad debt ratio 28 Table 10: Provision 30 LIST OF ILLUSTRATIONS Pages Diagram 1: Classification of Credit risk Diagram2: Operation structure 14 Figure 1: Outstanding loan classified by term loan 19 Figure 2: Outstanding loan classified by economic sector 20 Figure 3: Outstanding loan classified by currency 21 Figure 4: Outstanding loan classified by collateral 22 Figure 5: Outstanding loan classified by business sector 24 Figure 6: Bad debts 28 Figure 7: Standard loan ratio, overdue loan ratio and bad debt ratio 29 Figure 8: Provision ratio 30 Banking Academy Graduation Thesis INTRODUCTION The importance and necessity of the theme The deep and wide integration background between Viet Nam’s economy and the world’s economy has created good conditions for Viet Nam’s financial activities The bank market is developing in a better trend that has marked a new development step in both quality and quantity of Viet Nam banking system However, because banking is a field of sensitive business suffered from direct and indirect factors, banking risks are unavoidable and are able to seriously affect the sustainable development of banks in particular and financial markets as well as economy system in general In banking activities, the credit activity is the most basic and important one that brings main income for CBs Through their lending activities, banks have contributed to supplying funds for enterprises and helping the circulation of the economy system operate smoothly and effectively Although the credit activity brings potential income for banks, it also includes big risks as economic rule: “the higher risk, the higher return” Credit risk causes higher costs, slow profit recovery; influences on prestige, position, even existence and development of banks and also affects the whole banking system and the economy Nevertheless, credit risk is an unavoidable risk in credit activity We can not totally erase this risk and we just apply methods to prevent or minimize the damage when credit risk happens Preventing and decreasing credit risk are always the top priority in BIDV Bac Ninh That is the reason why I have chosen the topic “Credit risk and Solutions to reduce credit risk in Bank for Investment and Development of Viet Nam - Bac Ninh Branch” Objectives of the study The thesis is going to resolve three main issues as follow: - Systematizing the theoretical issues of credit risk in banking activities - Analyzing and assessing the status of credit risk in Bank for Investment and Development of Vietnam - Bac Ninh branch - Providing suggested solutions in order to limit credit risk in Bank for Investment and Development of Vietnam - Bac Ninh branch Nguyen Thi Kim Dung Class: ATCB - K13 Banking Academy Graduation Thesis Subject and scope of the study - Study subject: Bank for Investment and Development of Vietnam - Bac Ninh branch - Scope of study: Issues related to credit activities and credit risk from 2011 to 2013 in Bank for Investment and Development of Vietnam - Bac Ninh branch Study questions - In terms of theory: What is the core of credit risk? What reasons result in credit risk? How they affect Bank for Investment and Development of Vietnam - Bac Ninh branch and the economy? - In terms of reality: How is the practice of credit risk management at Bank for Investment and Development of Vietnam - Bac Ninh branch? What could Bank for Investment and Development of Vietnam - Bac Ninh branch, the State Bank of Vietnam and Vietnamese Government to enhance credit management and reduce the loss caused by credit risk? Methods of the study - Using qualitative methods including statistics, comparison, analysis, synthesis, dialectical materialism - Basing mainly on the secondary data Thesis structure Structure of thesis consists of three chapters, namely: Chapter 1: Theoretical background of credit risk in the operation of commercial banks Chapter 2: Real situation of credit risk in Bank for Investment and Development of Vietnam - Bac Ninh Branch Chapter 3: Solutions to preventing and reducing credit risk in Bank for Investment and Development of Vietnam - Bac Ninh Branch Nguyen Thi Kim Dung Class: ATCB - K13 Banking Academy Graduation Thesis Figure : Bad debts 1992 2000 1451 1413 1500 743 1000 241 500 26.6 2011 2012 Total outstanding loan 2013 Bad debts (Source: Annual Report of BIDV Bac Ninh 2011-2013) Due to actively evaluating, classifying debts in order to provide management solutions for credit quality, bad debts prevention and provision, the ratio of bad debts in the period of 2011-2013 tends to significantly decrease over the years The ratio of bad debts until 31th, December, 2011 is 37.3 % Positively, this ratio decreased to 16.6% in 2012 and in 2013, this ratio stood at just under 1.88% (approximately a decrease of 35.42% during three-year period) In this period, BIDV Bac Ninh implements seriously solutions to increase the credit quality such as: closely monitoring and managing overdue debts as well as debts from Group to prevent bad debts from sudden increase For arising debts, the bank applies solutions to deal with and collect bad debts Table 9: Standard Loan ratio, overdue loan ratio and bad debt ratio Unit: % Year 2011 2012 2013 Standard Loans ratio 58.84 73 97.14 Delinquency loans ratio 41.16 27 2.86 Bad debt ratio 37.3 16.6 1.88 Features Nguyen Thi Kim Dung 28 Class: ATCB - K13 Banking Academy Graduation Thesis Figure 7: Standard Loan ratio, overdue loan ratio and bad debt ratio 100% 97.14% 90% 80% 73% 70% 58.84% 60% 50% Standard Loan Overdue loan 41.16% Bad debt 40% 30% 37.30% 27% 20% 16.60% 10% 2.86% 1.88% 0% 2011 2012 2013 (Source: Annual Report of BIDV Bac Ninh 2011-2013) The chart shows the proportion of bad debts, overdue debts at the bank in recent years which was in the positive direction Delinquency ratio fell sharply during the year period from 41.16% in 2011 to 27% in 2011(equal to a decrease of 14.16%) and only was 2.86% (equal to a decrease of 24.14%) in 2013 The ratio of standard debts significantly increased In 2011, the ratio of standard debts was only appropriately 60%, however two years later, this ratio reached at over 97% Meanwhile, the ratio of bad debts indicated the opposite trend, lower 2%, and totally goes in the right orientation of targeted reconstructing projects in 2013 Nguyen Thi Kim Dung 29 Class: ATCB - K13 Banking Academy Graduation Thesis 2.4.3 Provision Figure 8: Provision ratio Provison ratio was made in the period of 2011-2013 50% 40% 30% 20% 15.10% 10.50% 10% 4.80% 0% 2011 2012 2013 Table 10: Provision Unit: Billion VND Year 2011 2012 2013 301 152 68.04 Provision ratio 15.1% 10.5% 4.8% Total outstanding loans 1992 1451 1413 Features Provision (Source: Annual Report of BIDV Bac Ninh 2011-2013) The ratio of credit risk using provision in BIDV Bac Ninh increased from 301 billion VND (approximately15.1%) in 2011 to 152 billion VND in 2012(nearly 10.5%) and maintained at 68.04 billion VND (approximately 4.8%) at the end of 2013 In 2011, with the economic recovery, bad debts were partially collected, the bank successfully managed risks during the three-year period The bank’s provision decreased to 68.04 billion VND in 2013 Nguyen Thi Kim Dung 30 Class: ATCB - K13 Banking Academy Graduation Thesis 2.5 Evaluation credit risk status and credit risk management in Bank for Investment and Development of Viet Nam - Bac Ninh Branch 2.5.1 Implemented methods and achieved results In three-year period (2011-2013), credit risk management activities of the branch always gain positive results The debt scale of the branch has tendency to decrease in the last period, the main reason is that the government allows the branch to transfer off-balance sheet debts and recover bad debts The branch continues to strengthen credit supervision, evaluates the nature of credit quality and creates solutions to deal with bad debts suitably with regulations of BIDV The bank concentrates on improving the credit quality, preventing an increase in bad debts, collecting bad debts, related to distributing detailed duties for each officer, having material and administrative - related - methods to solve responsibility issues for units, officers with subjective mistakes leading to bad debts The branch monitors, cooperates with customers who have difficulties but have capacity to reproduce and have effective business methods to overcome; creates chances for them to stabilize, make profits and supports them to find out markets step by step; cooperates with clients to search for partners with financial capacity in order to partially buy or totally buy production facilities, collateral property to make use of all resources to pay for banks In addition, the branch also reviews customers who not want to repay their debts or have no capacity to repay in order that the bank prepares the related profile to sue customers 2.5.2 Drawbacks and reasons Although the credit quality of the branch is significantly improved, the overdue debts are still high, influencing on business activities of the branch The effectiveness of retail credits is very high, however, developing retail credits does not meet the assigned goal, the scale of retail credits is small and not appropriately with the scale of the branch Credit activities relate to many fields, sectors, products while staff are normally trained in economics universities They are lack of experience in fields of Nguyen Thi Kim Dung 31 Class: ATCB - K13 Banking Academy Graduation Thesis engineering, construction that causes difficulties for analyzing, evaluating business plans as well as invested projects The second income source of loans when risks happen is collateral BIDV needs to implement regulations on notarization, transaction as well as improve qualifications, responsibilities of officers in assessing a price for security and monitoring customers’ security usage The process of handling property to collect debts still happens slowly; even a lot of property is not dealt with causing difficulties for banks Because of competitive pressure and lack of human resources, nowadays, credit staffs are responsible for marketing, initially assessing, making credit decisions The risk management department has not been focused properly and has not illustrated their roles For enterprises, a common situation in recent years is that enterprises not seriously obey the financial reporting regime They themselves are not well awared of the importance of financial reports, making financial reports for sending to banks is not methodical The quality of financial reports is low quality: lack of information and discrepancy of information Lack of information will make banks have difficulty in analyzing, evaluating customers’ actual status Thus, banks’ officers will have to directly come to enterprises to verify information and cause timeconsuming Besides, there are very few enterprises conducting auditing financial reports Thus, banks have difficulty in finding out mistakes in implementing enterprises’ accounting regime that causes making inaccurate credit decisions Nguyen Thi Kim Dung 32 Class: ATCB - K13 Banking Academy Graduation Thesis CONCLUSION OF CHAPTER Based on the rationality in chapter and chapter 2, this thesis analyzes and clarifies the status of credit risks in BIDV Bac Ninh Thereby, the thesis clarifies the status of credit risks and credit risk management in the branch as well as provide assessments on results of BIDV Bac Ninh in credit risk management; find out drawbacks and reasons for these drawbacks This is the basis to provide solutions and recommendations to serve for credit risk management in the branch Nguyen Thi Kim Dung 33 Class: ATCB - K13 Banking Academy Graduation Thesis CHAPTER 3: SOLUTIONS TO PREVENTING AND REDUCING CREDIT RISK IN BANK FOR INVESTMENT AND DEVELOPMENT OF VIET NAM BAC NINH BRANCH 3.1 Development orientations of credit activities in the near future (until 2015)  Credit structure: The branch will pay more attention to importing and exporting credits Besides, the branch will closely supervise and gradually decrease lending construction services and craft villages (such as Phong Khe, Phu Lam village…) Credit structure will be adjusted to each region’s potentials and broaden with effective business regions The branch will also build up a list of credits based on careers, suitable fields to guarantee the principle of risk diversification and avoid big investment on some sectors  The quality of activities: the branch will seriously evaluate and rank clients; classify bad debts; spend an enough amount of provision; minimize bad debts and actively deal with bad debts The branch will increase the quality of services; guarantee the balance between Assets and Liabilities Credit growth must guarantee good credit quality and prevent bad debts and uncollected profits  The effectiveness of activities:  Appling deep training with professional staff, meet the requirements of banking integration, especially educate moral characteristic for staff  Implementing monetary policy closely as well as flexible to maximize the effectiveness of management and credit business in the near future Some main goals: - Total outstanding loan: the average growth of 16%/year - Ratio of bad debts until 2015 : 0.34% - Proportion of medium-long term loan/ total outstanding loan : 19% - Proportion of retail credit/total outstanding loan : 19% - Ratio of loans in group 2/total outstanding loan : ≤ 12 Nguyen Thi Kim Dung 34 Class: ATCB - K13 Banking Academy Graduation Thesis 3.2 Solutions to reduce credit risk in Bank for Investment and Development of Viet Nam - Bac Ninh Branch 3.2.1 Increasing the quality of credit information management system to meet needs of credit risk limitations Information plays an important role in credit activities of CBs, making banks exactly define borrowers and their prestige, their repayment willingness, feasibility of their investment projects To guarantee the safety and effectiveness of loans, information must be tested by banks from many different sources: requesting profile for issuing credits, customers’ profile, related authorities (tax authorities, CIC of SBV…) In addition, customers should be directly interviewed by banks Banks need to update information in markets to serve steps of credit process in the right time Thus, after receiving the requesting profile for issuing credits, banks have to analyze customers’ current capacity and their potentials about using credit capitals as well as their repayment capacity From those basic information, banks will have prevention and limitation solutions Naturally, banks have to know how to create information for themselves in order to have exact and sufficient information Accurate credit information and reasonable credit decision certainly guarantee credit capital to be repaid on time, contributing to increase the quality of credit activities and banking activities Also, the branch should install a two-way-information system between CBs and CIC to widen information resources Moreover, the branch has to create private staff, who are responsible for collecting, analyzing, keeping information on customers and actively finding out methods to solve, exploit and use information in the most effective way The branch can use the following information resources: information from their clients, information from clients who had transaction relationship with the branch, information from other CBs, information from markets and from related authorities (auditing authorities, tax authorities, CIC…) Besides, the branch ought to develop the modern technology equipments such as informatics equipments, automatic machines…to stimulate development and help Nguyen Thi Kim Dung 35 Class: ATCB - K13 Banking Academy Graduation Thesis the branch increase customers’ satisfaction and increase safety as well as make the branch deal with a larger number of transactions Also, the branch must pay a close attention to apply informatics technology achievements such as banking softwares for storing and managing client information, financial and property information; softwares for analyzing and classifying clients contributing to making credit decisions 3.2.2 Improving the quality of human resources; building up investment and labor forces strategies To find out, evaluate and timely limit credit risk, human resource should be considered as the most important factor; however, this is also the direct reason which causes credit losses coming from wrongly moral manners and low quality abilities Thus, solutions to qualified labor forces will promisingly contribute to the prevention of credit risks Firstly, recruiting highly potential employees with good career ethics should be the first priority in long-term planning Credit-related tasks require credit officers to have good analyzing and evaluating abilities, also, a high sense of responsibility Moreover, the bank needs to have a suitable recruiting strategy to meet the requirements of broadening the branch’s business scale Secondly, it is highly appreciated when creating a professional and friendly environment which should be put much attention to help workers completely develop their potentials For example, it is necessary to develop and implement frequent training programs so as to build up their expertise in each special phase of development In addition, enhancing incentives mechanism based on each person’s working quality and credit effectiveness to increase workers’ commitment, responsibility and devotion to their current working environment 3.2.3 Strengthening credit testing and supervision Nguyen Thi Kim Dung 36 Class: ATCB - K13 Banking Academy Graduation Thesis Credit inspection and supervision play a very important role in guaranteeing loans Through out these activities, banks can quickly detect mistakes and timely correct these mistakes which will influence on banks’ debts collecting in the future In the near future, in order to improve the effectiveness of credit risk limitations, the branch needs to strengthen credit supervision and pay attention to loans In addition, the bank needs to determine the credit limitations for each sector and certain economic areas 3.3 Other recommendations 3.3.1 Recommendations to Government  The Government should create opportunities to innovate and modernize the credit information system: As mentioned above, information plays a very important role in credit activities Nevertheless, information has not fully exploited to serve for credit stages by CBs Beside subjective causes from banks, there are some objective causes, such as, obsolete information, poor information resources, ineffective an unequal information communication In the near future, the government should create conditions for information development The Government needs to enhance inspection, give proper sanctions to credit organizations which not provide information sufficiently, timely and accurately for CIC as required  Appropriate policies, sanctions on security: For CBs, security plays an important role in limiting credit risk Nevertheless, policies on collaterals still have a lot of limitations, such as slowness on issuing titledeed, slowness on guaranteed transaction registrations, slow property notarization , troublesome procedures losing business opportunities as well as credit investment opportunities of banks Thus, in the near future, the Government should have reforms, specific remedies to create favorable conditions and protect banks’ rights and customers’ rights Moreover, the Government needs to perfect the legal system, mechanisms and policies to create a stable legal framework for credit activities in particular and economic activities in general Nguyen Thi Kim Dung 37 Class: ATCB - K13 Banking Academy Graduation Thesis 3.3.2 Recommendations to SBV SBV should consider some recommendations to reduce credit risk in the bank as follows:  Strengthening management among banks through out regulations on obligatory audits, periodically checking as well as strengthening inspection and support for banks to realize potential risks, thereby, bring about effective solutions to minimize risks  Providing guidance and supports for credit risk management of CBs through out publicizing experiences on risk management of domestic and foreign banks; issue unified acts on risk management; offering serious sanction methods towards banks which not follow the Acts Supporting CBs in training specialized staff  Increasing the role of providing information of CIC for SBV Information must be explicitly publicized in order to increase the quality of risk management Information explicitness and publicity have to be carried out not only between CBs and SBV, among CBs or in each CB; but also among CBs, investors and community  Preventing unfair competitions In fact, unfair competition and scrambling borrowers (such as lending to repay loans of other banks, lowering standards, lending conditions causing the increase in credit risk) have existed Thus, SBV must supervise and control commercial banks’ business activities effectively to make sure long and secure development 3.3.3 Recommendations to BIDV BIDV should have a unified risk management model with participation of board of directors, board of bank executives Also, having suitable policies, procedures and unified limitation system will help the bank measure, monitor and control credit risks arising in business process in the most effective way BIDV ought to define clearly responsibilities and powers of each department and each individual in risk credit management In addition, BIDV should build up credit development strategies based on goals, abilities and strengths which are suitable with the laws of economy in order to make credit activities develop stably, effectively and to limit risks Furthermore, BIDV should implement credit supporting solutions coordinately, such as IT development, labor forces development and advancement; enhancing Nguyen Thi Kim Dung 38 Class: ATCB - K13 Banking Academy Graduation Thesis marketing; caring customers; constructing and applying the quality management system according to ISO 9001:2000 standard in the whole system for all sectors of the bank Finally, risk management needs to be paid more attention BIDV needs to strengthen the quality of information sufficiently, timely and accurately The risk prediction and evaluation have to frequently implemented and focused according to each region Nguyen Thi Kim Dung 39 Class: ATCB - K13 Banking Academy Graduation Thesis CONCLUSION OF CHAPTER From the status of credit activities of BIDV Bac Ninh illustrated in chapter II, chapter III provides solutions to improve the quality of credit risk management, and focuses on dealing with drawbacks, which exert a bad influence on the quality of credit as well as improve the credit risk prevention capacity of BIDV in the future In addition, this chapter provides some recommendations, for SBV to establish an effective business and risk management environment and develop a stable and persistent financial system BIDV Bac Ninh’s efforts with related national authorities’ effective supports, the credit risk management will meet the requirements of a safe and effective increase in credit, contributing to the quick and persistent development of the Viet Nam economy in the integration process Nguyen Thi Kim Dung 40 Class: ATCB - K13 Banking Academy Graduation Thesis CONCLUSION Credit activity is a traditional activity, accounting for a large proportion of commercial bank’s income Commercial banks’ success highly depend on results of credit activities, therefore, solutions to limit credit risks are closely paid attention to control credit risks in an acceptable level because risks are potential, unavoidable Based on rationality and reality in BIDV Bac Ninh, the thesis has deeply studies following issues: Firstly, the thesis has presented basic issues on credit risk in banking activity, Secondly, the thesis has researched the status of credit risk in BIDV Bac Ninh in three year (2011-2013) Thirdly, on the basis of evaluating the real status of credit risk in BIDV Bac Ninh, the thesis has also suggested some orientations and solutions in order to minimize credit risks in Bank for Investment & Development - Bac Ninh Branch In order for BIDV Bac Ninh to gain more achievements contributing to the general development of BIDV and really becoming one of the top banks in Viet Nam in field of credit, the credit risk limitation is one of the most important duties to create this success Nguyen Thi Kim Dung 41 Class: ATCB - K13 Banking Academy Graduation Thesis REFERENCES Decision No.493/2005/QD-NHNN dated 22/4/2005 Prof.Nguyen Van Tien (2010) Risk Management in Banking – Textbook Statistical Publishing House Peter S.Rose (2002) Commercial Bank Management Irwin/McGraw-Hill A Saunder & H.Lange (1994) Financial Institutions Management – A modern perspective Irwin/McGraw-Hill Anthony Saunders & Linda Allen (2002) Credit Risk Measurement John Wiley and Sons, Inc Jurgen H.M.Van Grinsven (2010) Risk Management in Financial Institutions: Formulating Value Propositions IOS Press Emmanuel N.Roussakis (1997) Commercial Banking in an Era of Deregulation Praeger BIDV Bac Ninh’s Annual Report from 2010-2013 BIDV Bac Ninh’s Restructuring Project period 2013-2015 10 http://www.bis.org 11 http://www.sbv.gov.vn 12 http://www.worldbank.org 13 http://www.cafef.vn 14 http://www.bidv.com.vn Nguyen Thi Kim Dung 42 Class: ATCB - K13