analysis of the current status of consumer lending at bidv east ha noi branch

STATE BANK OF VIETNAM BANKING ACADEMY OF VIETNAM FACULTY OF FOREIGN LANGUAGES GRADUATION REPORT — MAJOR: ENGLISH-FOR BANKING AND FINANCE ANALYSIS OF THE CURRENT STATUS OF CONSUMER L

STATE BANK OF VIETNAM BANKING ACADEMY OF VIETNAM FACULTY OF FOREIGN LANGUAGES

GRADUATION REPORT

— MAJOR: ENGLISH-FOR BANKING AND FINANCE

ANALYSIS OF THE CURRENT STATUS OF CONSUMER LENDING AT BIDV - EAST HA NOI BRANCH

STUDENT: DAO THI THUY MAY

STUDENT ID: 22A7510144 CLASS: K22ATCC

SUPERVISOR: MS NGUYEN THI MAI PHUONG

HANOI, MAY 2023

During my four years of university at Banking Academy, | studied in a professional learning environment, the teachers always created the most favorable conditions for

me to promote my strengths and limitations own shortcomings I would like to express my sincere thanks to the teachers of Banking Academy, especially the teachers

of Faculty of Foreign Languages, who dedicatedly impart their professional and social knowledge to help me prepare for my future work

Through the internship process at BIDV - East Hanoi branch, I have learned more about reality as well as applied the knowledge learned in the internship process Besides, I have experience in the professional and dynamic working environment of the Bank

I would like to extend my profound gratitude to all of the brothers and sisters at the East Hanoi branch for their passionate guidance and assistance, which helped to create the ideal circumstances for me to successfully finish the Bank internship Especially, I would like to convey my sincere gratitude in particular to the instructor Nguyen Thi Mai Phuong who eagerly helped me through the graduation thesis writing process She provided me with unwavering editing and feedback so I could finish the assignment as precisely and effectively as possible

I hereby declare that the topic " Analysis of the current status of consumer lending at BIDV - East Hanoi Branch " is a genuine research output from my own experience and collection while interning at BIDV - East Hanoi Branch The data and research results stated in the thesis are true, and have been authorized to use by the co-authors Additionally, the study also makes use of a few sources that are dutifully cited and annotated Regarding this promise to the department, faculty, and university, I accept full responsibility

Signature of student Dao Thi Thuy May

When society is developing, people's income increases, their consumption needs also increase accordingly They spend more, want to own more prime and their shopping becomes easier and more convenient In recent years, the income of Vietnamese people has increased relatively high, accordingly the shopping needs of the people have also increased However, that need is not always met because their current solvency is not enough Therefore, commercial banks have launched and strongly developed consumer loan products to help customers satisfy their needs instead of having to wait for a while to be able to pay

Consumer lending activities are being noticed and developed strongly by banks in recent times Many joint stock commercial banks are strongly developing this field and creating a fiercely competitive environment

Starting from a state-owned commercial bank, mainly providing investment and capital construction loans, consumer lending is not a thriving business of the East Hanoi Branch of Investment and Development Bank With the general orientation of the Bank for Investment and Development of Vietnam to become the leading retail bank in the system of commercial banks, BIDV Dong Hanoi Branch also sets development goals in the coming time, including the important target of promoting consumer lending

Being aware of the above problems and stemming from the practice of consumer lending at BIDV East Hanoi Branch, I decided to choose " Analysis of the current status of consumer lending at BIDV - East Hanoi Branch " as a graduate thesis with the hope that it will make the lending industry better The branch's consumption is expanded effectively, safely and sustainably

LIST OF ABBREVIATIONS

LIST OF TABLES

LIST OF FIGURES

CHAPTER I INTRODUCTION OF THE JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM (BIDV)

1.1 History of Development of Joint Stock Commercial Bank for Investment and Development

Full name: Jomt Stock Commercial Bank for Investment and Development of Vietnam

From 1990 to April 27, 2012: Named Bank for Investment and Development of Vietnam (BIDV).

From April 27, 2012 to present: Officially become the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV)

The history of construction and growth of the Joint Stock Commercial Bank for Investment and Development of Vietnam is a journey full of hardships and challenges, but also very proudly associated with each period of history of fighting against the invaders and building the country of the Vietnamese people

The following timelines show the major changes in BIDV's development since its establishment in 1957:

- Period from 1957 to 1980:

On April 26, 1957 according to Decision 177/TTg, Bank for Construction of Vietnam was established under the Ministry of Finance with a small initial scale of 8 branches and 200 staff (on November 15, 1976, the Ministry of Finance issued Decision No 580-TC/VP established Ho Chi Minh City Branch of Construction Bank, now Ho Chi Minh City Branch) The main task of the Bank for Construction is to allocate and manage basic construction capital from the state budget for all economic and social fields

- Period from 1981 to 1989:

On April 26, 1981, Bank for Construction of Vietnam was renamed Bank for Investment and Construction of Vietnam under the State Bank of Vietnam Its main task is to allocate, lend and manage investment capital to build basically all sectors of the economy under the State plan

- Period from 1990 - 1994:

On November 14, 1990, the Bank for Investment and Construction of Vietnam was renamed the Bank for Investment and Development of Vietnam This is the period of implementing the renovation policy of the Party and the State, transforming from a centralized subsidy mechanism to a mayor mechanism under the management of the

State Therefore, BIDV's tasks were fundamentally changed Continue to receive capital from the state budget to lend to projects under the state budget; Mobilizing medium and long-term capital sources that are easy to lend for investment and development, monetary business, credit and banking services, mainly in the field of construction and installation for development investment

In 1992 started operating with foreign partners In particular, in 1994, it was re- established in the form of a state corporation under Decision No 90/TTg dated March

7, 1994

- Period from 1995 until now:

Marking an important turning poimt in BIDV's operations, the annual budget does not transfer capital through BIDV for investment loans anymore, but BIDV has to raise up and mobilize capital for domestic and foreign development investment Accordingly, BIDV gradually shifted to multi-general business, fully operating the functions of a commercial bank - currency trading, credit, banking and non-banking services to serve customers of all ages economic sectors, in which, the main task is to serve the field of investment and development

In 2000, BIDV was honored to be awarded the title of "Labor Hero in the innovation period" and on the 48th anniversary of its establishment (April 26, 1957-April 26, 2005) by President of the Socialist Republic of Vietnam awarded the first-class independence medal to BIDV for many achievements in national construction and development In recognition of the period of "transformation, renewal, growing up with the country", BIDV has been preparing the foundation firmly, creating momentum along with the country's outstanding development in the cause of industrialization and modernization, especially the accession to the World Trade Organization

After 50 years of construction and growth, with 2 changes of name and addition of functions and tasks, BIDV has always successfully completed its tasks through each stage of the country's development, affirming its key role in serving investment develop Recognizing the efforts of generations of BIDV officials and employees in

the 45-year historical journey, the Party and State of Vietnam have awarded the BIDV system many noble titles and rewards such as the title of Labor Hero During the renovation period, the Order of Ho Chi Minh, the Order of Independence, the Order of Labor of all classes, and the Lao PDR awarded the Order of Independence and the Order of Labor Order of Friendship, King of Cambodia awarded Royal Medial

On the occasion of the 65th anniversary of the traditional day, BIDV announced to adjust the brand identity through changing the new logo and officially applied from April 26, 2022 The new logo symbol is inspired by the image of a 5-petal yellow apricot flower, which is a symbol of courage, bravery and pioneering spirit to overcome all difficulties and challenges

The new brand identity image is a symbol of 05 core values crystallized from the will, aspiration for love and hard work of BIDV's staff for the past 65 years These are Wisdom, Belief, Integrity, Professionalism and Aspiration BIDV logo consists of 2 versions (logo combined into group Since 1957 and original logo) issued together with

a brand identity kit with specific usage instructions for each case

Vietnam's brand identity adjustment is a strong step in BIDV's development strategy

in line with the trend of digital transformation and international integration In the coming time, BIDV will continue to make strong changes to provide high quality products and services, and cooperate and develop with customers and partners

1.2 Functions and Responsibilities of BIDV

1.2.1, Functions

- BIDV provide banking products and services to customers; handling transactions arising in transactions with customers; organize and manage business activities of the unit in accordance with the law, BIDV and its branches in order to achieve the highest results; Proposing and recommending measures to improve the efficiency of main operations of the unit, branch or the whole BIDV system

1.3 Organizational structure

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1.5 Overview of BIDV at East Hanoi branch

1.5.1 A brief introduction of the Loc Ha transaction office, East Hanoi branch BIDV East Hanoi was established in 1967 with the name of Branch 4 Dong Anh under Hanoi Construction Bank, with the initial staff of only 10 people The function of the branch at this time is to manage the allocation and lending of projects in two districts

of Dong Anh and Soc Son

December 1, 2005 marked a turning point in the history of Dong Anh Bank for Investment and Development, which was the establishment of Dong Anh Bank for Investment and Development Level 1, directly under the Bank for Investment and Development of Vietnam, with a total of 71 staff at its establishment

On November 12, 2008, in order to match the scale of development in both quantity and quality in all aspects of the Branch's business activities, especially in line with the

branch's operating area, the Board of Management of the Branch Dong Anh Bank for Investment and Development has decided to submit to the Board of Directors of the Bank for Investment and Development of Vietnam a plan to change the name of Dong Anh Bank for Investment and Development Branch to East Hanoi Branch of Bank for Investment and Development of Vietnam and approved by the Chairman of the Board

of Directors dated 12/11/2008

On May 1, 2012, BIDV successfully equitized In line with the business model after equitization, the East Hanoi Bank for Investment and Development Branch was renamed to the East Hanoi Joint Stock Commercial Bank for Investment and Development Branch dated May 1, 2012, since then, the name of the East Hanoi Joint Stock Commercial Bank for Investment and Development Branch has become close and dear to the Branch's staff and customers

Currently, Joint Stock Commercial Bank for Investment and Development of East Hanoi branch is headquartered in East Hanoi Branch, Corporate Banking Department

2, No 46, Cao Lo, Group 2, Dong Anh Town, Dong Anh District, Hanoi City The Branch's transaction network consists of the Branch Headquarters, 5 Transaction Offices and 22 automated teller machines

5 Transaction offices of the Branch include:

+Lien Ha Transaction Office was established on August 24, 1996 and has an operating address at Thi Tu Lien Ha, Lien Ha Commune, Dong Anh District, Hanoi City +Phu Lo Transaction Office was established on January 21, 2003 and has an operating address at No 40, Street 2, Phu Lo, Soc Son, Hanoi

+Soc Son transaction office was established on 11/08/2002 and operating address is at

No 35, Soc Son TT, Soc Son district, Hanoi city

+Loc Ha Transaction Office was established on December 1, 2007 and its operating address is at Km 3, National Highway 3, Mai Lam Commune, Dong Anh District, Hanoi City

+Van Tri Transaction Office was established on April 4 04/2018 and operating address at No 153-155 Van Tri Street, Van Noi Commune, Dong Anh District, Hanoi

City.

The main transaction points are the "extension arms" of BIDV East Hanoi, thereby providing a full range of products, services, and financial solutions with the best service quality to customers

With a long history, BIDV East Hanoi has successfully completed the assigned business plan tasks for many years

1.5.2 Characteristics of the position

As a customer relations specialist for the consumer lending division during my internship at the BIDV East Hanoi branch, I was exposed to learn about products like savings, credit, cards, and other products I also received introductory training in some banking operations and observed and learned from colleagues during the process | learned how to check accounts, prepare contracts, open account statistics, call customers to find out their credit status, and give them advice on how to apply for credit cards from my amiable and helpful coworkers

The internship was a worthwhile experience for me since I gained a lot of knowledge and applied it, such as observing colleagues’ communication, developing my logical thinking abilities, and building positive relationships with consumers Now that I'm interning at BIDV, a highly professional corporation, I have a greater knowledge of the actual workplace, corporate culture, and interpersonal motives Along with the primary position | practiced, my coworkers also taught me how to perform other tasks related to Internet Banking transactions, like opening and closing for cards, printing statements, and assisting clients with Smart banking problems Since then, I have gradually improved my skills and aptitude with computers as well as my

professionalism when communicating with consumers I was able to familiarize myself with and absorb the instructions more quickly by regularly creating Excel files and importing contracts in Word through regularly assisting colleagues in entering relevant data I consider myself extremely lucky to have acquired so many soft skills | was allowed to access and learn from the company's system on soft skills, including time management, problem solving, and problem solving During my internship, |

observed and realized that the branch's consumer loan product has many interesting aspects but also has a little pressure on the target to be completed in each period

Overall, after completing the internship, I feel that I have received a lot of information and practical experience when working with professionals such as my colleagues where | interned The knowledge and abilities I gained in a new role during my internship will serve as the foundation for me to function more efficiently,

professionally, and responsibly in the future

CHAPTER 2: CURRENT STATUS OF CONSUMER LOANS ACTIVITIES AT

BIDV - EAST HANOI BRANCH 2.1 General understanding of consumer lending activities

2.1.1 The concept of consumer lending

Consumer loans are loans intended to finance the spending needs of consumers, including individuals and households This is an important source of finance to help these people cover their housing needs, household appliances and vehicles Besides, expenditures on education, health and tourism needs can also be financed consumer loans

Loan classification:

Short-term loans: loans with a term of less than 12 months to finance working capital for businesses and individual consumption needs

Medium-term loans: loans with a term of more than 1 month to 5 years

Long-term loans: loans with a term of more than 5 years to meet the needs of businesses investing in fixed assets and personal consumption needs such as housing, transportation

Benefits of personal loans:

Meet the diverse needs of borrowers: travel, go to school, borrow money to buy a car, repair a house No collateral needed for the loan Flexible interest rates for each customer Flexible repayment time helps borrowers reduce the pressure of repayment

2.1.2 Characteristics of consumer loans

Borrowers: Mainly individuals and households with consumption needs at the present time but have not been able to pay

Loan purpose: Consumer loans are made by banks to meet personal consumption needs, not business needs

Loan Size: Each loan is usually relatively small in size compared to business loans Real estate loans may have a larger value, but the comparative value is still smaller than other loans at the Bank

The main reason is that customers only borrow for consumption when they have a relative amount of capital, only borrow from banks to supplement the missing amount (compared to business loans, investors can borrow all the necessary money) for projects) On the other hand, because consumer loans carry a higher risk, the Bank is often more cautious in deciding the loan amount, based on the customer's repayment capacity and collateral

Number of consumer loans:

The number of science and technology is large because the object of this type of loan 1s every individual in society The demand for credit is rich and diversified in science and technology, because when the quality of life and people's education level are improved, people have more and more demand for bank loans to improve and raise their living standards