vietnam international commercial joint stock bank group assignment

Body2.1 Internal environmentThe tertiary sector of the Vietnamese economy, which includes services like banking andfinance, is where VIB Bank works as a significant player in the country

VIETNAM INTERNATIONAL COMMERCIAL JOINT STOCK BANK

GROUP ASSIGNMENT

Lecturer:

_

INTRODUCTION OF MANAGEMENT (MGT103) CLASS:

GROUP MEMBER:

1 Introduction 3

2.4 One to two management issues or challenges faced by that company 8 2.5 Suggestions and strategies to overcome the obstacles 9

Vietnam International Commercial Joint Stock Bank

Table 1 General introduction

VNR500 rating 22(B2/2022)-54(B1/2022)

Head office 1st floor (ground floor) and 2nd floor, Sailing Tower

Building, 111A Pasteur, Ben Nghe Ward, District 1, City Ho Chi Minh City, Vietnam

Year of establishment 18/09/1996

(Source: VNR500, 2023)

Vietnam International Commercial Joint Stock Bank (VIB) is one of the 10 highest rated banks in Vietnam VIB was officially established on September 18, 1996 VIB has existed and developed for more than 20 years With an initial capital of only VND 50 billion and the companionship of 23 employees, VIB has covered the whole country with a large transaction network with more than 160 branches With the current VIB has grown and increased more than 200 times compared to the original Therefore, VIB is in the top 10 most developed banks in Vietnam VIB is one of the banks in Vietnam operating in the field of external

establishment and development VIB has been present in almost all parts of the country, present in 27 provinces and cities, including 162 branches and transaction offices with more than 5000 employees serving and answering questions VIB has constantly tried to provide the best services to customers, so VIB has built the trust of customers because VIB is orienting to develop the retail banking segment through many distribution channels and providing the most optimal economic solutions for customers It is because of this remarkable improvement that VIB is constantly developing

2 Body

2.1 Internal environment

The tertiary sector of the Vietnamese economy, which includes services like banking and finance, is where VIB Bank works as a significant player in the country's banking sector These include the evaluation of collateral, the sale and use of collateral assets, and the administration of finished products as collateral assets

A crucial component of lending operations is the valuation of collateral, and VIB Bank has created a strict procedure for doing so By doing this, the bank is able to evaluate the worth of the collateral with accuracy and lower the risk of loan defaults

Generally speaking, VIB Bank is involved in a number of activities involving collateral assets

in the tertiary sector, highlighting the bank's dedication to risk management and guaranteeing the stability of its loan operations

VIB Bank is a prominent player in Vietnam's banking industry, and its internal environment

is shaped by several key factors VIB Bank operates within several economic sectors, including retail banking, corporate banking, and consumer finance This diversity of sectors allows the bank to mitigate risk and leverage opportunities across different areas of the economy

In terms of its workforce, VIB Bank employs a significant number of individuals across its various business units The bank had 9658 employees as of December 31, 2021 The bank places a strong emphasis on employee development and engagement, offering training programs and opportunities for career advancement This focus on its workforce helps to create a positive internal environment that fosters innovation and collaboration

In 2021, VIB Bank generated a total revenue of approximately 20,949 billion VND Vietnamese dong This revenue is a testament to the bank's strong market position and ability

to generate income across its various business units The bank's revenue performance also reflects its ability to adapt to changing market conditions and customer needs

Finally, in 2021, The total capital of VIB Bank was 15,531,429,930,000 VND This capital provides the bank with the financial resources needed to support its growth and expansion initiatives With strong capital reserves, VIB Bank is well-positioned to weather any economic challenges that may arise in the future

within Vietnam's economy, its strong workforce, impressive revenue performance, and robust capital reserves These factors contribute to the bank's success and help to create a positive work culture that is conducive to innovation and collaboration

2.2 External environment

VIB Bank is one of the banks with a broad strategic vision, which is developing strongly in the Vietnamese banking market However, in order to continue to stand firm in the market, VIB needs to fully recognize external environmental factors

VIB's competitors are big banks such as American Express, HSBC, Citibank, MSB, SCB, SeABank, SHB, TPBank, HDBank, OCB These competitors also have many attractive new policies, promotions, products, and services to attract their customers Therefore the competition with potential rivals is high

VIB's customers are a wide audience, including individuals and households, businesses, and organizations Therefore, to attract customers, banks need to provide the best products and services, and at the same time create a professional and customer-friendly working environment

In addition, VIB is cooperating with invisible service providers such as web and SMS of carriers, delivery services of Shoppe, Lazada, and aviation services such as VietNam Airline, to create discount events or promotions when using VIB's services for payment, in order to increase value for customers

However, VIB also faces competing services that can replace its services, such as lending services with lower interest rates, unlimited loans, investment in real estate or gold

Therefore, in order to achieve success in the banking market, VIB needs to fully recognize the external environmental factors and come up with appropriate policies to create the highest value for customers

(Source: VIB Annual reports, 2021)

Departments within an organization often have specific roles and functions to ensure that the organization's operations are carried out efficiently Here are the roles of Marketing, Human Resources (HR) and Finance departments in an organization:

The Role of the marketing department is to determine the type of products and services that the bank needs to provide to the market, then the marketing department will collect market information, research consumer behavior, and customer choice of banks Organize the process of providing products and services with three factors: technical facilities, direct staff and customers

The HR department has the role of managing all issues related to the construction, management and development of quality and sustainable HRto ensure the growing business and this is the role of the HR department of VIB bank The first is recruitment The HR Department will post recruitment information, then select resumes and interview, the interview content mainly asks about banking operations The second role is to train personnel VIB currently has a training department under the HR department and has 2 offices for this work with full facilities in Ha Noi and Ho Chi Minh City The next role is to evaluate personnel HR evaluation is extremely important to reward and re-train weak employees Currently, VIB has 2 annual HR evaluation periods in the 2nd and 4th quarters The fourth

structure to help VIB reduce costs but still meet the requirements of focus Last but not least

is customer orientation Currently, VIB operating policy is customer-oriented, VIB strategy is

"to become the most innovative and customer-oriented bank in Vietnam"

The finance department is the one that is basically responsible for choosing the company's internal and external financial policies The gathering and processing of the company's traded funds is the responsibility of the financial office In addition to maintaining smooth, efficient commercial operations, the department also oversees income and expenses Besides, the finance department's duties also include doing economic analysis to enhance important corporate plans In annual reports, we know that the total income of VND 309.517 billion is

an increase of more than 19% compared to 2020 It is an example of the simple task of the finance department

In short, the Marketing, HR and Finance departments play an important role in ensuring that the organization's operations are carried out efficiently and that the needs of customers and shareholders are met

2.4 One to two management issues or challenges faced by that company

In the context of the complicated Covid-19 pandemic situation as well as the complicated economic situation, many businesses suffered heavy losses, even going bankrupt As a result, the risk of growing bad debt is unavoidable VIB bank is no exception, in 2021 VIB has not been able to control the quality of bad debts The value of bad debt increased by approximately 58%, from 2,957 billion VND at the start of the year to 4,669 billion VND In more detail, doubtful and subprime debt increased by 208% and more than 101%, respectively As a result, from 1.75% in 2020 to 2.32% at the end of 2021, the ratio of bad debt to loan balance increased Besides, based on data from VIB's financial statements from

2017 to 2021, we can see that VIB's bad debt ratio increases rapidly in 2021 and risk prevention for goods is not focused on VIB

Additionally, the bank's disbursement and tax payment have not been handled smoothly The

This is not the first time VIB has paid a tax penalty.

We all know that the company's financial issues will always be an issue in the operation process As a result, the difficulties that VIB is experiencing are understandable However, VIB must pay more attention to how the finance department operates smoothly and quickly in order to increase customer trust and be more stable in the future

2.5 Suggestions and strategies to overcome the obstacles

2 SMART Goals

Table 2:

Focusing particularly on medium- and long-term capital sources to support business activities, the goal is optimizing, expanding, and diversifying funding sources in Vietnam and international markets in 2022

Specific (S) - Increasing the value of Foreign capital mobilization, Forex

trading operations and Customer deposits and valuable papers to maintain and develop business activities

Measurable(M) - Foreign capital mobilization: 20% increase compared to 2021

(27,3 trillion VND)

- Forex trading operations: 10% increase compared to 2021 (118.8 billion VND)

- Customer deposits and valuable papers: 20% increase compared

to 2021 (259 trillion VND)

Achievable(A) - With diversified capital mobilization, well-established

relationships with domestic and foreign financial institutions and reputation among clients over the past 27 years, this plan can be accomplished well

Relevant(R) - In order to consolidate and develop the company's capital in order

to avoid the severe impact of customer bad debts

- Foreign capital mobilization: increase by 5-6 trillion VND

- Forex trading operations: increased 35-40 billion VND

- Customer deposits and valuable papers: 60-65 trillion VND

Table 3:

Completing the upgrade and implementation of the anti money laundering system in 2022

Specific (S) 6-step process:

- Guidelines from central banks and guidelines from anti-money laundering

- Examine the current state of VIB's PCT system to identify flaws and vulnerabilities and make necessary changes

- Conduct PCT awareness training for VIB staff and teach them how to detect and report suspected money laundering or unauthorized money transfers

- Update VIB's PCT policies and procedures to meet regulatory requirements and apply risk controls to reduce the risk of money laundering

- Implement cutting-edge PCT technologies and solutions to boost VIB's PCT performance, such as data analysis systems or blockchain technology to monitor financial transactions and detect fraudulent or suspicious activity

- Conduct periodic assessments and monitoring to ensure that VIB's PCT system is operating properly

Measurable(M) In 2021 there are 20 suspected cases of money laundering

identification (eKYC) processes to minimize risks, meet international standards on anti money-laundering Besides, in addition to constantly keep abreast of AML trends on anti-money laundering in the world, staff training is also paid special attention to raise the compliance awareness

of employees and to ensure full and appropriate compliance in consistent with the development of banking products

Relevant(R) Create a new AML system to satisfy integration needs, automate the

KYC process, and improve monitoring of suspicious activity

Time-bound(T) The first 2 quarters of upgrading the money laundering screening

project:

Refer to the anti-money laundering laws and policies of VIB Bank to

Contact relevant departments in VIB to understand their requirements and expectations for the upgrade project

The following 2 quarters apply and screen the following cases:

Define criteria for evaluating suspicious transactions and accounts, including risk metrics and data analysis models Perform suspicious transaction and account screening by applying defined criteria and using appropriate data analysis tools Identify potential cases of money laundering or financial terrorism related activities and notify the appropriate authorities

In order to operate the bank's capital well, we need a system to strictly control the cash outflow We need to consider carefully before lending money to any company At the same time, banks must regularly check lending activities during the prescribed period to prevent risks and avoid capital loss of the company To help capital grow well, the investors department of VIB has to determine a wise investment strategy With customers' deposits, banks need to devise a strategy to allocate capital for each business plan in a reasonable

capital of the business.

Applying Artificial Intelligence to money anti-checking systems is one of options that VIB should consider Set up with a high precision algorithm, this automatic system will ensure the progress of the work AI can link transaction information over a set time period to find anomalies Manual control makes it difficult for employees to capture ambiguous connections, thereby ignoring suspicious manifestations, opening the way for money laundering This system upgrade is a worthwhile investment that the bank should consider Reducing money laundering transactions contributes to promoting the long-term and sustainable development

of the country's economy This also helps the bank's business activities become stable

3 Conclusion

In short, an action to be considered good must meet the criteria for the benefit of the company and the interests of society However, VIB had bad debt, this bad action has partly lost the reputation of customers for the company, this is inevitable for businesses in general and VIB

in particular But now, VIB's bad debt ratio has decreased many times In recent years, VIB has grown significantly compared to previous years VIB has cooperated with leading technology applications such as Big Data, and AI, which will help customers pay more easily and save money These are also factors and strengths of VIB that have helped this bank lead

in online transactions Although not one of the top banks in Vietnam, VIB has promoted its strengths and made progress day by day This is also a good thing, and hopefully, VIB will bring more incentives for customers