Enhancing credit risk management in vietnam joint stock commercial bank for industry and trade – hoang mai branch,graduation thesis

THE STATE BANK OF VIETNAM BANKING ACADEMY FACULTY OF FOREIGN LANGUAGES -***** - GRADUATION THESIS Topic: Enhancing Credit Risk Management in Vietnam Joint-stock Commercial Bank for Industry and Trade – Hoang Mai Branch Supervisor: MA Ngo Tung Anh Student: Nguyen Van Truong Class: ATCB - K12 Major: English in Banking and Finance Student Code: 12A7511194 Hanoi, May 2013 DEDICATION This thesis is dedicated to my parents who have supported me since the beginning of my study Also, this thesis is dedicated to the lecturers and students in faculty of foreign languages Finally, this thesis is dedicated to Banking Academy of Vietnam ACKNOWLEDGEMENT I would like to express my sincere gratitude to my supervisor Mr Ngo Tung Anh for his continuous support, patience, motivation, enthusiasm, useful comments and remarks Without his guidance and persistent help this thesis would not have been possible I would like to give the deep appreciation to recruitment team of Vietnam jointstock commercial bank in Industry and Trade (Vietinbank) – Hoang Mai Branch for considering my CV, interviewing and offering me an internship opportunity at the branch In addition, I would like to thank the Non-performing Loan Recovery Department Manager at Vietinbank Hoang Mai, Mr Hoang Van Kiem, who has introduced loan recovery operations to me as well as supported me during practical loan recovery process Finally, I would like to thank all the lecturers and classmates at Banking Academy for their dedication and support during the 4-year course Hanoi, May 28, 2013 ABSTRACT After Vietnam joined World Trade Organization (WTO), banking and finance industry in Vietnam is approaching many opportunities as well as facing many challenges Currently, the non-performing loan (NPL) ratio of commercial banks in Vietnam in general and Vietnam Joint-stock Commercial Bank for Trade and Industry (Vietinbank) in particular witnessed the signs of rising beyond the allowed rate under the State Bank of Vietnam’s provisions This does not only have influence on commercial banks but also the national economy However, commercial banks still encounter difficulties in managing NPLs This thesis is going to clarify some basic issues about the theoretical basis in the credit risk management of commercial banks After analyzing business situation and credit risk management activities, some measures will be discussed to improve the effectiveness of risk management in Vietinbank TABLE OF CONTENTS INTRODUCTION CHAPTER 1: THERORETICAL BACKGROUND OF CREDIT RISK MANAGEMENT IN THE OPERATIONS OF COMMERCIAL BANKS 1.1 Credit risk in the operations of commercial banks 1.1.1 The concept of risk and the credit risk 1.1.2 Classification of credit risk 1.1.3 Characteristics of credit risks .6 1.1.4 The main basis for determining the level of credit risk 1.1.5 Consequences of credit risk 11 1.1.6 Causes of the credit risk 12 1.2 Credit risk management 13 1.2.1 The necessity of the credit risk management .13 1.2.2 Mission of the credit risk management .14 1.2.3 Credit risk measurement: .14 1.3 Basel core principles of credit risk management 18 1.3.1 Introduction .18 1.3.2 Basel core principles of credit risk management 18 1.4 The application of credit risk management models in Vietnam’s commercial banks .20 1.4.1 Credit appraisal 20 1.4.2 Credit inspection 21 1.5 Conclusion .22 CHAPTER 2: REALITY OF CREDIT RISK MANAGEMENT IN VIETNAM JOINT-STOCK COMMERCIAL BANK FOR INDUSTRY AND TRADE – HOANG MAI BRANCH 23 2.1 Overview of Vietnam Joint-stock Commercial Bank for Industry and Trade – Hoang Mai Branch 23 2.2 The organizational structure of Vietnam Joint-stock Commercial Bank for Industry and Trade - Hoang Mai Branch 24 2.2.1 The organizational model 24 2.2.2 Function and duty of departments at Vietnam Joint-stock Commercial Bank for Industry and Trade - Hoang Mai Branch 26 2.3 Reality of Credit Operation and Credit Risk Management in Vietnam joint-stock commercial bank for Industry and Trade – Hoang Mai Branch 31 2.3.1 Credit Operations 31 2.3.2 Reality and causes of credit risk: 34 2.3.3 Reality of credit risk management 38 2.4 Conclusion .45 CHAPTER 3: MEASURES TO IMPROVE CREDIT RISK MANAGEMENT IN VIETNAM JOINT-STOCK COMMERCIAL BANK FOR INDUSTRY AND TRADE – HOANG MAI BRANCH 46 3.1 Viewpoints of the Vietnam Joint-stock Commercial Bank for Industry and Trade – Hoang Mai Branch on credit policy & credit risk management to 2015 46 3.1.1 Viewpoints: 46 3.1.2 Objectives 47 3.2 The measures to improve the quality of credit risk management in Vietnam Jointstock Commercial Bank for Industry and Trade – Hoang Mai Branch 48 3.2.1 Improving credit granting process 48 3.2.2 Building effective credit policy 49 3.2.3 Improving credit information system 53 3.2.4 Credit risk prevention measures 55 3.2.5 The solutions to reduce and offset losses when risks occur .58 3.2.6 Human Resources Solutions 59 3.3 Other recommendations 60 3.3.1 Recommendations for the State Bank of Vietnam .60 3.3.2 Recommendations for the Government of Vietnam 62 3.4 Conclusion .63 RECAPITULATION AND CONCLUDING REMARKS 64 IMPLICATIONS 65 LIMITATIONS OF THE THESIS 66 REFERENCES 67 TABLE OF ABBREVIATIONS Abbreviations Meaning CIC Credit Information Center IT Information Technology NPL Non-performing Loan Vietinbank Vietnam Joint-Stock Commercial Bank for Industry and Trade SBV The State Bank of Vietnam SME Small and Medium Enterperise USD U.S Dollar VND Vietnam Dong WTO World Trade Organization LIST OF TABLES Table 1: Total Outstanding Loans from 2009 to 03/2013 (Unit: Billion VND) 33 Table 2: Portfolio structure in terms of economic sector (Unit: billion VND) 34 Table 3: Delinquency (unit: Billion VND) 35 Table 4: Loan Classification from 2009 to 03/2013 (Unit: Billion VND) 36 Table 5: Customer Policy .51 LIST OF ILLUSTRATIONS Diagram 1: Executive committee 24 Diagram 2: Operation structure 25 Diagram 3: Credit granting process 41 Graduation Thesis Banking Academy INTRODUCTION Rationale to the study Credit is the most complex banking operation compared to other banking operations Inspite of the profits, this activity brings many risks Therefore, credit risk will not only impact directly to the existence and development of each credit institution, but also affect the entire banking system and the whole economy Credit risk management is the difficult task but urgent, especially for commercial banks of Vietnam as income from credit mainly accounts for 60-80% of banks’ income In the last quarter of 2012, the non-performing loan (NPL) ratio of commercial banks in Vietnam in general and Vietnam Joint-stock Commercial Bank for Trade and Industry (Vietinbank) in particular witnessed the signs of rising beyond the allowed rate under the State Bank of Vietnam’s provisions So what is the cause? How to improve the quality of credit risk management in the credit operation of Vietinbank? In this context, as a student studying at Banking Academy of Vietnam with the encouragement of the faculty, I would boldly choose the subject "Enhancing credit risk management in Vietnam Joint-stock Commercial Bank for Industry and Trade – Hoang Mai Branch "as the thesis subject Objectives of the study The thesis is going to resolve main issues as follows: - Clarifying some basic issues about the theoretical basis in the credit risk management of commercial banks - Analyzing business situation and credit risk management activities in Vietinbank, thereby giving the positives as well as the drawbacks of this administration task Nguyen Van Truong ATCB – K12 Graduation Thesis Banking Academy 2002), JETRO (Japan External Trade Organization support SMEs with International Trade and Investment activities) Developing credit for SME is a rational choice for economic conditions in Vietnam, in accordance with staff capacity and experience, especially when SBV issued strict regulations on risk provision Therefore, risk dispersion to SMEs plays an important role as they usually have sufficient collateral, small credit amount, when risks occur there will be no major impact + Granting credit to Retailing to take advantage of the new favorable conditions (non-cash payment policy, staff credit, overdrafts, home loan project etc In the development of retail products, particularly credit products, Vietinbank Hoang Mai needs to weigh the benefits and management capabilities because it is fairly new market segment and not the strength of the branch To ensure the ability to effectively monitor and manage these loans, Vietinbank Hoang Mai should develop packet synchronization products (payroll accounts, loans, other banking services, etc.), to ensure the autonomy and minimize loan management and recovery time + Continuing to develop the corporate credit, especially the corporates with foreign investment Along with the integration into the global economy, the number of foreign investors in Vietnam is increasing The practical credit investment for FDI corporates reveals that this group has abundant financial resources, strong management capacity and competitiveness, thus operate effectively and have high reputation in the credit relationship Therefore, this market segment should be researched, analyzed for future acceleration 3.2.3 Improving credit information system In recent years, comprehensive and promptly information plays an important role in business success, especially in Vietnam where poor business transparency remains common Although Credit Information Center of the SBV and Credit Nguyen Van Truong 53 ATCB – K12 Graduation Thesis Banking Academy Information Center Commercial Banks have taken efforts in building data warehouse as well as assessment standards in the business sector, credit information cannot either reflect socio-economic situation in the local areas or provide prevention measures Therefore, CIC should be improved as follows: - Based on the collaborative basis, the SBV is required to link commercial banks’ data warehouses to supplement and increase accuracy of the data, not only about customers but also about the assessment and forecast needed for credit analysis and appraisal - Based on the information about the business, industry, credit projects of CIC, Vietinbank Hoang Mai needs to synthesize, analyze and provide useful information for other branches in Vietinbank’s banking system The data warehouse should be open to integrate with other data warehouses of other banks to satisfy competition and cooperation requirements in the integration period - Vietinbank Hoang Mai should establish relationships with other organizations to exploit services and purchase information when necessary to satisfy requests for information from the branches, especially the information about the financial situation and operations of the parent companies - foreign business partners, especially the overseas invested business - Customer information system should be organized logically, avoid duplication in data collection, ensure the information comprehensive in accordance with customer characteristics Using modern information analysis to increase the accuracy of the assessment results in order to make the right decisions - Regularly updating credit handbook Handbook guides credit officers the basics of operation Characteristics of credit operations are based on the provisions of law, the development of credit products, thus it requires timely updates on the legislation, regulations, procedures and forms to satisfy new training requirements and professional studies Nguyen Van Truong 54 ATCB – K12 Graduation Thesis Banking Academy 3.2.4 Credit risk prevention measures 3.2.4.1 Improving the quality of credit appraisal and analysis Credit risk arising from the prudent credit analysis and evaluation leading to inaccurate lending decisions This step plays an extremely important role and helps to limit credit risk with the highest efficiency, at least losses Appraisal process need to meet requirements on analysis quality and decision-making time, ensuring reasonable care on the basis of profitability and risk analysis as well as satisfying the requirements on customer service quality Performing overall prudent analysis and accurate risk assessment through determining credit limits periodically in months or year Accordingly, the branch will have an overview of the financial situation, business quality and business development prospects to realize the risks, set a reasonable credit limit, within the limits of Vietinbank’s banking system However, customers can borrow loans from many different banks and the collapse of any bank loans will cause risks and affect the repayment capacity of the customers Therefore, beside credit limits, other the credit conditions should be accompanied, especially conditions of total outstanding loans and customers’ financial structure, to ensure the safety of the business To satisfy this requirement, Vietinbank Hoang Mai should pay attention to the quantitative analysis on customers’ risks by assessing the data combined with Qualitative analysis (analysis on the macro environment, micro environment, the history of credit relations, etc.) to identify potential risks and the ability to control and limit the risks Applying and improving credit rating system in quantitative analysis This system should be adjusted to suit the practical economic conditions in Vietnam Through the use of quantitative models, the level of risk will be calculated reasonably, reflecting more clearly the risks of loans expected; thereby, commercial banks could develop risk prevention and reduction measures before granting credit to customers Efforts to determine the appropriate credit limits will help the bank manage credit risk effectively Nguyen Van Truong 55 ATCB – K12 Graduation Thesis Banking Academy On the basis of the credit limit approved, the risks of loan plan should be analyzed to reduce the transaction time In this analysis, it is necessary to focus on the legality of the loan plan / loan project, the supply, and consumer market, etc Additionally, risk estimation and solutions should be proposed in case risks occur In investment projects assessment, overstating practical value of the project leads to potential risks as investors’ equity participation accounts for the low proportion in which investors’ responsibility is not high When the risk occurs, the ability to recover loan declines To ensure objective and accurate asset evaluation, the branch should hire reputable independent audit companies to perform the entire audit and asset evaluation Simultaneously, the equity participation and the disbursement due to construction progress should be strictly verified Vietinbank Hoang Mai should tightly combine credit conditions in the credit agreement such as interest rate, equity participation, collateral to ensure profitability proportional to the risk level Based on the base rate of the SBV and reference rate of Vietinbank, Vietinbank Hoang Mai should determine appropriate interest rate for each customer, as well as build interest rate scale for corporate loans For the customers with low credit rating level, equity participation must be lifted up accompanied with high liquidity collateral The tighter the legal conditions in the credit agreement, the more proactive the branch when risks occur, the more responsible customers are in loan utilization 3.2.4.2 Managing, monitoring and strictly controlling disbursement process and after lending Making disbursements in accordance with the credit approval, comparing the loan disbursement requirements to the capital cost structure and ensuring loan utilization for proper purposes Disbursing into customers’ account to control loans utilization Limiting disbursements in cash, except in particular cases due to customers’ business such as loans to purchase agricultural, forestry and fishery tools, pay salary, etc Nguyen Van Truong 56 ATCB – K12 Graduation Thesis Banking Academy The credit risk appears after lending not only because borrowers utilize funds for improper purposes, but also because Banks not control the cash flow at the end of the business plan, leading to customers using these funds for ineffective business purposes To prevent this risk, applying strictly control measures after lending as follows: Inspecting loans in terms of loan characteristics, customers’ quality Banks need to build and select appropriate inspection plans not to only ensure banks’ safety, but also to facilitate customers’ business and the relationship between the parties Using customer credit ratings as the basis for determining a monthly, quarterly or half-year loan utilization checks, in which the customer has high credit rating and prestige in the credit system, the duration will be longer while customers have lower credit rating, the checking density will be more For those customers with nonperforming loans, checking and debt classification should be implemented once per month to follow the client's situation, with identification, analysis and proper solution to minimize risks Seriously implementing the actual inspection, with fund use assessment, customers’ collateral to timely detect and handle the risks, avoid cursory inspection Analyzing and timely evaluating risk signs such as customers’ difficulty in repayment, the change of business environment, market situation adversely affecting the business plan, signs of law violation, etc Applying an early warning system of credit risk to proactively capture and timely prevent potential risks Closely monitor the client's funds on the basis of verification mechanism for each type of loan (loans for export business: checking shipment date, fund requests, documents, payment time; loans for construction: checking the construction progress and investors’ certification for debt and commitment to transfer all funds to customer accounts opened at branches; commercial loans usually need to be checked for principal, monthly interest repayment, the use of revenues, income from loan plan must be repaid as soon as they are collected, whether the loan is undue Carefully checking fund flows from the business plan will help banks to collect loans timely Nguyen Van Truong 57 ATCB – K12 Graduation Thesis Banking Academy 3.2.5 The solutions to reduce and offset losses when risks occur 3.2.5.1 Enhancing effectiveness in non-performing loan recovery Non-performing loans always exist in any bank, thus setting mechanism to recover non-performing loans is an objective requirement To minimize losses when risks occur, there should be clearly defined functions and responsibilities of the relevant departments as well as a strong system to solve the problems arising in the non-performing loan process Non-performing loan recovery staff should advise the Committee on the solutions to non-performing loans when from the operation departments report about risk signs With leaders of relevant Departments such as Customer Relations, Credit Risk Management, Internal Audit, the Non-performing loan Recovery staff will ensure coordination between departments to promptly advise the Branch Manager on flexible solutions to recover the loans In non-performing loan recovery, staff need to perform sequential and prudent steps, not to break the relationships that have been established with customers, especially regular customers, namely: - Clarifying the business, collateral, customer attitudes: analyzing customers’ business resiliency, loan repayment schedule, customers’ collaboration, and collateral handling ability - Selecting remedy: “work – out” method or liquidation The choice of remedy need to be flexible, adapted to the characteristics of each customer, ensuring high performance with reasonable cost 3.2.5.2 Applying loan guarantee and insurance tools Credit risk stems from various causes that banks cannot anticipate Therefore, it is necessary to use insurance tools and apply loan guarantee measures to reduce losses when the risks occur Some measures should be taken as follows: Nguyen Van Truong 58 ATCB – K12 Graduation Thesis - Banking Academy Requiring borrowers to buy construction insurance (for projects), cargo insurance, etc Practically, by fulfilling these requirements, loan losses caused by natural disasters has been paid by the insurance agency, substantially reduced losses - Improving legal regulations on collateral to facilitate the collateral handling when credit risk occurs In some cases, the ownership of property is unclear, lack of ownership certificate leads to difficulties in property sale (Notary Public’s offices not notarize the contracts, buyers show their reservation ) Practically, customers are afraid property registration cost (especially for buildings and constructions on land), bank staff not supervise customers to complete procedures for collateral, the registration of property on land encounter procedural difficulties Therefore, loan guarantee is incomplete, making it difficult to handle collateral to recover loans To reduce legal risks, bank staff must urge customers to complete property registration, strictly implement inspection, constantly review legal documents and collateral condition 3.2.5.3 Seriously implementing loan classification and risk provision Seriously implementing loan classification, avoiding the inaccuracy of loan classification and risk provision due to business results Classifying loans according to the loan nature, the recovery ability of loans, uncompromisingly classify loans as Non-performing loan in contract breach cases with potential credit risks and downgrade the loans, make provision to cover losses when risks happen 3.2.6 Human Resources Solutions Human is not only the central factor to detect, evaluate and prevent timely credit risks but also the cause of credit losses derived from moral factors, weak capacity Thus, staffing solutions play a crucial role in the development of credit risk prevention measures Nguyen Van Truong 59 ATCB – K12 Graduation Thesis Banking Academy 3.2.6.1 Heightening staff quality Selecting qualified staff with professional qualifications and morality to allocate into the credit department as banking credit requires high analysis, assessment ability Additionally, employers need to have appropriate plans to meet the demands for network expansion, the business scale of Vietinbank Hoang Mai in the future Allocating sufficient and appropriate work for staff, avoiding staff overload to ensure work quality Strengthening the training, re-training, periodic training to raise the level of knowledge and ability to apply experience, new techniques in credit appraisal, risk management, improving the credit quality Training should focus on the short-term training for daily work, advanced training for key staff ensuring the stability and future development 3.2.6.2 Improving staff evaluation policy Develop evaluation, reward and discipline regulations based on the credit quality and work efficiency Practically, with the senior’s direction, officials not represent their views clearly in credit appraisal despite the fact that the loans were overdue, but they are still promoted to leadership positions Therefore, it cannot create the clear separation of responsibilities between the appraisal and lending decisions, to provide objective and honest evaluation results Reward and discipline regulations should be consistent throughout the system and be obeyed seriously and thoroughly Implementing staff turnover in the customer management to deduct the negative due to long-term relationships, and help staff to work more effectively by accessing different clients 3.3 Other recommendations 3.3.1 Recommendations for the State Bank of Vietnam 3.3.1.1 Combatting unhealthy competition: Nguyen Van Truong 60 ATCB – K12 Graduation Thesis Banking Academy By extending the autonomy and responsibility of the commercial banks, the SBV has liberated the creativity and initiative in the banking business However, the situation appeared unhealthy competitions, crambling for borrowers among banks such as making loans to repay the loans of other banks, lowering credit standards and conditions leading to increasing credit risk Therefore, the SBV should check, control effectively the business operations of the commercial banks to ensure the safe and sustainable development 3.3.1.2 Enhancing measures to monitor commercial banks Applying the basic principles of effective banking supervision (25 principles in the Banking Supervision of Basel Committee) in the functional execution of state management and market surveillance angencies; improving control methods and internal audit of credit institutions and towards international standards Banking supervision system should be completed to improve the quality of financial analysis and develop an early warning system of potential risks in business in general and in credit granting process in particular, make early warning for the commercial banks to ensure sustainable market development 3.3.1.3 Researching and applying credit insurance tools These are the tools of a developed financial market to help commercial banks prevent and ensure their loans from credit risk, share risks and create flexibility in the loan portfolio management in each bank 3.3.1.4 Improving credit information system of the SBV’s CIC CIC should be a joint stock company with a capital contribution of commercial banks The SBV should research and apply credit ranking company model in Vietnam to support the banking business, attract technology transfer and exchange experience credit ranking companies in the world Nguyen Van Truong 61 ATCB – K12 Graduation Thesis Banking Academy 3.3.2 Recommendations for the Government of Vietnam 3.3.2.1 Issuing regulations on financial transparency There should be specific provisions relating to financial business disclosure with audit verification, tighter regulations on the conditions for audit company establishment and clearly defined responsibilities of audit companies as well as the auditors relating to the introduction of cursory or dishonest audit reports Because the fact is that the quality of many audit firms is not guaranteed (with the financial statements have been audited but even wrong in the most basic criterion between USD and VND) 3.3.2.2 Building more regulations on creditor rights of commercial banks Improving the legal provisions related to the creditor rights of commercial banks and loan security when facilitating the implementation of Property remedies to recover the debt, avoid procrastination, affecting the financial transparency of the bank " Corporate Governance Evaluation " by World Bank stated that the legal rights of creditors in Vietnam are weaker than the average of countries in the region and OECD countries based on a series of measurement standards by the World Bank, for 130 countries, including Vietnam Therefore, the legal system needs to be improved to ensure the bank's creditor rights in collateral handling 3.3.2.3 Promoting safety in credit operations The Vietnamese Government should develop the legal provisions related directly and indirectly to credit activities such as regulations on secured transactions, secured transaction registration, the rules of property papers, regulations of business, etc., which are related to different sectors, affecting the credit risk management The government needs to coordinate with the relevant ministries, along with the SBV to share views and agreements on preventing and limiting credit risk, coordinate together to solve the problems arising in banking credit granting process Nguyen Van Truong 62 ATCB – K12 Graduation Thesis Banking Academy 3.4 Conclusion From the situation of credit operations at Vietnam Joint Stock Commercial Bank for Industry and Trade – Hoang Mai Branch in recent period, these solutions to improve the quality of credit risk management focus on the existing problems that negatively affect the credit quality and enhance the ability to prevent credit risks of Vietinbank, propose amendments to the organizational structure, credit process, information support, etc., contribute to the credit risk management in the system Moreover, this thesis makes some recommendations to SBV and The government to create an effective business environment and risk management, developing a stable and sustainable financial system The efforts of Vietinbank Hoang Mai along with the effective support of the state Government, the credit risk management will meet the requirements for safe credit growth and effectively contribute to the rapid and sustainable development of the Vietnamese economy in the integration period Nguyen Van Truong 63 ATCB – K12 Graduation Thesis Banking Academy RECAPITULATION AND CONCLUDING REMARKS Along with the difficulties of the economy and the global financial crisis, Vietnam Joint-stock Commercial Bank for Industry and Trade – Hoang Mai branch has been suffering the signs of serious decline in the credit quality Therefore, improving the credit quality by completion of credit risk management is the top priority task in current period Based on the theoretical basis of credit risk and credit risk management, the thesis focused on the reality of credit risk and the credit risk management in Vietinbank Hoang Mai as well as pointed out the limitations Thereby, the author has proposed the specific measures to enhance the credit risk management on the basis of oriented viewpoint and goals Beside some solutions that are beyond the decision of Vietinbank Hoang Mai, the authors have also proposed recommendations to the SBV and the Government to support the sustainable credit growth Nguyen Van Truong 64 ATCB – K12 Graduation Thesis Banking Academy IMPLICATIONS In recent time, the non-performing loan (NPL) ratio of commercial banks in Vietnam in general and Vietnam Joint-stock Commercial Bank for Trade and Industry (Vietinbank) in particular witnessed the signs of rising beyond the allowed rate under the State Bank of Vietnam’s provisions This does not only have influence on commercial banks but also the national economy However, commercial banks still encounter difficulties in managing NPLs as well as cred it risk The thesis has clarified some basic issues about the theoretical basis in the credit risk management of commercial banks, analyzed and discussed some measures to improve the situation The completion of the thesis will help commercial banks to realize the potential credit as well as the importance of credit risk management risk in practical credit operation Therefore, they can apply appropriate measures to evaluate, manage, prevent and reduce credit risk and its consequences when it occurs Nguyen Van Truong 65 ATCB – K12 Graduation Thesis Banking Academy LIMITATIONS OF THE THESIS The thesis was written on the basis of credit risk theory in the banking business with practical experience Although the thesis has reached its aims, there were some unavoidable limitations Firstly, because of the time limit, this study was conducted only in Vietinbank Hoang Mai Therefore, to generalize the results for the whole bank, the study should have involved more branches at different level Moreover, the limitations in theoretical background and practical experience, to some extent, might affect the comprehensiveness of the thesis Finally, the short-term internship might be also the cause of the limitations since the author could only collect main information about practical credit risk management in Vietinbank Hoang Mai Nguyen Van Truong 66 ATCB – K12 Graduation Thesis Banking Academy REFERENCES Vietinbank Hoang Mai, the Business Report, 2009 Vietinbank Hoang Mai, the Business Report, 2010 Vietinbank Hoang Mai, the Business Report, 2011 Vietinbank Hoang Mai, the Business Report, 2012 Vietinbank Hoang Mai, the Preliminary Report, 2013 March Timothy W.Koch, Bank Management, University of South Carolina, The Dryden Press, 1995 Peter S Rose, Commercial Bank Management, Irwin/McGraw-Hill, 2002 World Bank, Report on corporate governance in Vietnam, 2006 Edward I Alman, Managing credit risk: A challenge for the new millennium, 2001 10 Shelagh Heffernan, Modern Banking, John Wiley & Sons Publication, 2005 11 A Saunder & H Lange, Financial Institutions Management - A Modern perspective, Irwin/McGraw-Hill, 1994 12 Dr Tran Huy Hoang, Quản trị Ngân hàng thương mại, ( “ Commercial Bank Management”, Nhà xuất lao động xã hội, 2007 13 Nguyen Van Tien, Quản trị rủi ro kinh doanh ngân hàng, (“Risk Management in Banking Business”), Nhà xuất Thống kê, 2005 14 The State Bank of Vietnam, “Quản lý nợ xấu - nguyên tắc Basel quản lý nợ xấu”, (“Non-performing Loan Management - Basel principles on Nonperforming Loan Management”), 2007 Nguyen Van Truong 67 ATCB – K12