Internship Report Vietnam Bank For Agriculture And Rural Development.pdf

TABLE OF CONTENT ACKNOWLEDGEMENTSCHAPTER 1: THE VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT’S - EAST HANOI BRANCH GENERAL INFORMATION 2.1 Capital Mobilization Activities 2.2 Loan

NATIONAL ECONOMICS UNIVERSITY ADVANCED EDUCATIONAL PROGRAMS

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TABLE OF CONTENT ACKNOWLEDGEMENTS

CHAPTER 1: THE VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT’S - EAST HANOI BRANCH GENERAL INFORMATION

2.1 Capital Mobilization Activities

2.2 Loan Activities

2.3 Other services activities

CHAPTER 3: ORIENTATION FOR FURTHER DEVELOPMENT OF VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT - EAST HANOI BRANCH

3.1 Advantages and limitations of the branch

3.1.1 Advantages

3.1.2 Limitations and Causes

3.2 Business Orientation of the branch for the upcoming period

CHAPTER 4: CURRENT ISSUES AND PROPOSED SOLUTIONS

4.1 Current Issues

4.2 Proposed Solutions

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I would like to express my heartfelt thanks!

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THE VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT’S - EAST HANOI BRANCH GENERAL INFORMATION 1.1 Company Information

Vietnam Bank for Agriculture and Rural Development (Agribank) was established under Decree No 53-HDBT dated March 26, 1988, of the Council of Ministers (now the Government) Despite going through each period of development with different names associated with different missions, Agribank always affirms its position and role as one of the leading commercial banks in Vietnam, taking the lead in implementing monetary policy, contributing to stabilizing the macro economy, controlling inflation, supporting growth, always accompanying the development of agriculture, farmers and rural areas, making many positive contributions to promoting the process of restructuring the economy economy, building new rural areas, and ensuring social security in Hoan Kiem and Hanoi in particular and the whole country in general.

 Transaction point name: Agribank East Hanoi Branch (Hoan Kiem, Hanoi)

 Address: Building No 23B Quang Trung Street, Tran Hung Dao Ward, Hoan Kiem District, Hanoi City

 Affiliated to: Agribank transaction point system

1.2 Formation and Development

According to Decision No 170/QD/HĐQT-TCCB of the Chairman of the Board of Directors of Agribank: Agribank East Hanoi branch was established on July 2, 2003,

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along with part of the personnel and infrastructure of the Golden Corporation, and Vietnamese gemstones and Agribank Ba Trieu branch After twenty years of construction and development, the Agribank East Hanoi branch has gradually shown its position and brand, becoming a reliable place for customers to place their trust and at the same time grant thousands of billions of dollars contracts for individual customers and businesses with capital to invest and develop production and business, contributing to promoting the capital's economic development.

The initial period of establishment was a big challenge for the Branch, starting almost from scratch In terms of the network, there is only one Ba Trieu Transaction Office in addition to the branch headquarters, with roughly half of the total number of personnel transferred from Gold, Silver, and Gemstone Corporation, the majority of whom transferred, however, do not comprehend banking procedures The infrastructure, while being in a convenient position in the capital, needed more than a year to refurbish and rebuild to be suitable for the Bank's activities, and train a class of employees with expertise and skills so that the branch's operations could gradually go into orbit The branch’s main business philosophy "Bring prosperity to customers" plus development strategy, as well as business strategy, must be based on trust and mutual benefit when dealing with customers Over time, the above strategy has proven correct.

Currently, the Agribank East Hanoi branch has 120 officers and employees with sufficient capacity, qualifications, and professional experience Step by step the branch network has been expanded, with 04 affiliated transaction offices and penetrating quite deeply into the demanding and competitive market in the capital.

Faced with the difficulties of the early years of beginning a business, the branch leadership as well as the whole staff team had undertaken several groundbreaking efforts

to investigate and experiment in order to develop a brand for Agribank And, thankfully, the market share of the Agribank Thu Do branch is increasing day by day Customers, from individuals to businesses, expanded dramatically Many significant economic contracts worth hundreds of billions of dong have been signed, delivering economic efficiency to the parties while also contributing to the capital's socioeconomic growth After many years of construction and development, the business plan targets of Agribank East Hanoi branch have increasingly achieved more praiseworthy achievements Capital mobilization increased from 216 billion VND in 2003, after only 1 decade, by June 30, 2013, it reached 1,423 billion VND, an increase of nearly 7 times.

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Outstanding debt of 144 billion VND from 2003 to June 30, 2013, reached 1,206 billion VND, an increase of nearly 10 times compared to the previous 10 years Banking services have increased sharply, 30,000 ATM cards with more than 70 POS devices at 40 card acceptance units have been issued to date.

With the development and business strategy that has been shaped and throughout its operation since its establishment, Agribank Thu Do branch will strive to overcome difficulties to develop, contributing to enhancing Agribank's brand in the capital.

1.3 Notable Awards

The development of the Agribank East Hanoi branch has been marked by important milestones On January 1, 2006, the branch was given the rank of Second-Class Branch, on January 1, 2008, it was promoted to the First-Class Branch On September 4,

2008, said branch of Agribank received the Certificate of Appropriate Quality Management System International standard ISO9001:2000 issued by SGS Certification Organization (Switzerland) and UKAS Accreditation Organization (UK) and on August 5,

2009, was updated with the new version ISO9001:2008 In addition, Agribank East-Hanoi branch in 2009 also received a certificate of merit from the Prime Minister and a certificate of merit from the Chairman of the City People's Committee In 2007, the Branch received a certificate of merit from the Governor of the State Bank

1.4 Organizational Structure and The Functions of Each Department

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General Planning Department

VICE-DIRECTOR

Forex Trading Department

Internal Control Departme

Transaction Office Bà Triệu

Computing Department

Transaction

Office No.1

Transaction Office Nguyễn Công Trứ

As of the end of 2020, the Branch has a total number of employees of 108 people,

of which 35 are male (accounting for 32%), and 73 are female (taking up 68%) Professional qualifications: 01 PhD, 45 Masters; 59 people at university level, 03 people under university level The specific organizational structure at the Branch is:

 The Director is responsible before the law for all activities and business results

of Agribank East Hanoi Branch The Director can delegate tasks to Vice Directors within their authority and at the same time directly direct departments under the bank.

 Vice Director 1: in charge of the treasury accounting department and human resources administration department

 Vice Director 2: in charge of the general planning department and foreign exchange trading department.

 Vice Director 3: in charge of the marketing department and computer department

 Human Resources Administration Department: is responsible for completing the branch's monthly and quarterly work plans and regularly urging the implementation of the program approved by the Branch Director At the same time, the department is also responsible for directly managing the Branch's seal, performing administrative work, managing salaries, and monitoring the Branch's regimes.

 Credit Department: research, develop strategies, classify customers, and propose preferential policies for each type of customer; Analyze customer portfolio, select safe and highly effective lending methods; Appraise and propose loans for credit projects, evaluate projects, complete documents to submit to superiors according to authorized decentralization; Classify debt, analyze overdue debt, find causes and solutions, compile reports and conduct specialized inspections according to regulations.

 Accounting and Treasury Department: accounts for money, manages accounts of individuals and businesses opening accounts at banks, and buys and sells foreign currencies Manage revenue and expenditure, tally, be responsible for reporting the amount of cash, gold, and silver at the bank, and perform direct payment functions with customers

 General Planning Department: Research and propose the development of short-, medium- and long-term business strategies for the branch Develop annual business plans, develop quarterly plans, synthesize business plan targets, make statistical reports, monitor

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branch capital sources, calculate and notify interest rates mobilization and lending of branches from time to time.

 Marketing Department: makes cards for customers, manages ATMs under management branches, runs advertising programs and campaigns to promote the bank's image on media and social networks, and enhances Popular pitch for the branch

 Computer department: manages the network system, branch computer system, manages ATMs.

 Foreign Exchange Department: opens letters of credit for imports, exports, foreign currency trading, and international money transfers for customers.

 Internal Control Department: checks records of all daily activities of the branch Four transaction offices: carry out all business activities.

1.5 Products and Services

The first type of service Agribank provides is Domestic payment , in which the procedure is simple, convenient, confidential, fast, and accurate Customers can transfer money to beneficiaries with or without an account at Agribank An unlimited number of transfers/withdrawals/withdrawals within a day, and allow customers to withdraw/receive money on the same day Saving costs, time and limit risks compared to cash delivery All information about customers' accounts is also at the highest security This type of service can include:

 Deposit, and withdrawal transactions at many places

 Bills payment

 Electronic tax payment on Internet Banking of Agribank

This branch of Agribank also provides a second type of service, which is buying and selling foreign currencies This service has swift and convenient processes many

international currencies An national extensive network of transaction sites Transactions that are quick, safe, and easy and that are confidential preferential and affordable prices This type of service includes:

 Buy and sell foreign currencies immediately

 Forward trade

 Issue a certificate to carry foreign currency and Vietnamese Dong in cash abroad

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The third type of service they provide is International payments , which can include:

 Receive money from countries around the world via Western Union (WU)

 Transfer money abroad via Western Union (WU)

 Receive money from Korea via Kookmin Bank

 Receive money via Nonghyup Bank

 Receive money from Taiwan via SinoPac Bank

 Receive money into your account from Taiwan via Chang Hwa Bank

 Transfer money from Japan via Dcom

 International money transfer and receipt service via SWIFT

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BUSINESS PERFORMANCE OF VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT - EAST HANOI BRANCH

2.1 Capital Mobilization Activities

Capital is crucial to banking operations and is what determines whether a bank will continue to exist and grow The basis for all actions, including assessing the scope and caliber of credit-related activities as well as other activities, are conducted by the bank The division has concentrated on obtaining temporary idle financial capital from locals, companies, and nonprofit groups The Bank actively monitors the changes in deposit interest rates at each particular period and the psychology of individuals and their spending patterns This has aided the Bank in making wise choices about interest rates and mobilization documents.

The Bank actively diversifies capital mobilization products, creates favorable conditions for depositors, increases attractiveness, and attracts customers to increase mobilized capital to meet the business activities of the entire Branch

According to the report, the bank's capital rose due to positive improvements Despite the fact that banks have many diverse ways of mobilizing capital, such as deposits from business groups, Vietnam Social Security deposits, and investment trust deposits, they still primarily collect money from the populace Customer deposits always account for more than 50% of total mobilized capital.

By December 31, 2021, total capital reached 4,229,480,077,109 VND, an increase

of 11.3% compared to the end of 2020 By December 31, 2022, the total capital mobilized

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in the market I (excluding State Treasury) of the branch reached 4,708,183,064,401 VND,

an increase of 11.1% compared to the beginning of the year Total capital (excluding Euro, social insurance, and bonds issued before 2023) as of August 31, 2023, reached 4,919 billion VND, an increase of 211 billion VND compared to December 31, 2022, reaching 102% of the quarter plan III in 2023 and reach 94% of the 2023 plan.

Capital mobilized from residents in 2020 grew steadily, reaching 2,102,061,680,057 VND By December 31, 2021, capital mobilized from customers reached 2,551,005,200,465 VND, an increase of 21.3% The proportion of residential deposits is the main source of capital, accounting for over 50% of capital By December

31, 2022, residential deposits reached more than 2,540,536,879,987 VND, accounting for 81.84% of capital (excluding State Treasury deposits) Residential capital as of August 31,

2023, reached 2,370 billion VND, down 170 billion from December 31, 2022, which decreased due to mortgage settlement (25 billion VND).

Term deposits dominate the capital structure of savings accounts The percentages for 2020-2022 are 78.39%, 86.2%, and 72.96%, respectively Although demand deposits have a smaller structure, their proportion in total mobilized capital has remained stable, with the exception of 2021, when it decreased by nearly 8% to 13.7% compared to 21.6%

in 2020; however, by 2022, this proportion had increased by 13.3% compared to 2021, to 27.03% According to the data, people's and businesses' payment demands have increased

in recent years, and more transactions are being processed.

The largest portion of the total capital mobilized from savings deposits is held by medium-term deposits, which account for 61.01% of the total in 2020, rising to 72.09% in

2020 before dropping to 54.52% in 2022 While the percentage of short-term deposits has decreased, it is still relatively steady, with 2020 seeing a reading of 15.9%, 2021 seeing 11.5%, and 2022 seeing 16.62% Both short-term and demand deposits will increase in

2022, by 42.38% and 93.6%, respectively Banks primarily mobilize savings deposits,

with payment deposits, certificates of deposit, and other sources like as ATM account balances accounting for a relatively minor fraction Term savings, in particular, outnumber non-term savings.

2.2 Loan Activities

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2021 2022 2023 0

Total oustanding loan balance Business loan balance

Figure 2.2: Business loan balance compared to the total outstanding loan balance

of Agribank East Hanoi branch in the period 2021-2023

Unit: Billion dongs

According to the graph above, outstanding corporate loans of Agribank East Hanoi branch in the period 2021-2023 always account for a substantial part of total outstanding loans and tend to expand over time Outstanding loans to enterprises grew by 482 billion VND between 2021 and 2023, rising from 4156 billion VND to 4638 billion VND Outstanding company loans will be 4,369 billion VND in 2022, representing a 223 billion VND increase and a 5.37% growth rate Outstanding corporate debt grew by 269 billion VND, or 6.15%, in 2023 The rise in outstanding corporate debt is the result of the bank introducing a capital support program for firms, drawing attention by giving interest rates significantly lower than usual lending interest rates (maximum short-term loans) 4.5% per year for personal loans, 7.5% per year for medium and long-term corporate loans) Although constant, the growth rate of branches' outstanding business loans is still lower than the overall economy's growth rate of 8.28% at the end of 2023 compared to the end

of 2022 The size and growth rate of the branch's outstanding corporate loans have increased fairly steadily over time Branches must continue to support, maintain, and improve this growth momentum while also taking steps to support the growth of capital mobilized from businesses and moderately slow the rate at which outstanding loans are growing Alternatively, more capital may need to be raised from other sources in order to increase mobilized capital in a reasonable way

The Vietnamese economy is expected to grow fairly steadily between 2021 and

2023, though growth will moderate a bit in 2023 To support and assist businesses and the

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industry, the government has implemented a number of policies, from those that aim to improve the business environment and production quality to those that promote access to capital, technology, and human resource training As a result, in other major cities generally and Hanoi city specifically, the cost of living has decreased Agribank East Hanoi branch has recommended using open procedures and conditions to attract prospective new clients while enhancing and extending connections with existing ones after taking this circumstance into consideration possessed a credit connection with the branch As a result, the loan volume to enterprises at the Agribank East Hanoi office has increased and stabilized in recent years.

Figure 2.3: Loan structure by term and field Unit: Billion dong Short-term outstanding loans continue to dominate the structure of Agribank East Hanoi's outstanding corporate loans by term, accounting for 71.92%, 76.19%, and 77.8%

of total outstanding loans from 2021 to 2023, respectively The growth rate for 2022 is 12.8%, and for 2023 it is 9.1% When interest rates rise, businesses' requirement for loans often declines, which is the overall pattern shown in 2023's reduced growth rate The remaining two groupings of unpaid loans make up a minor amount and have varied little over the past three years This is acceptable given that the branch's business clients are mostly seasonal manufacturing companies, the volume of production and business is tiny, and the time required to spend in production and business is similarly condensed As a result, they mostly require short-term funding sources to support their production and commercial objectives Furthermore, the branch continues to assist and support enterprises when certain clients require and qualify for medium and long-term loans to increase production and operations As a result, even if the medium and long-term loan

Industry and construction 1,299 1,302 1,394