internship report at vietnam prosperity joint – stock commercial bank nam dinh branch

This report provides an analysis and evaluation of the current and prospective profitability, liquidity and financial stability, the organizational structure of VPBank Vietnam, the details about the branch I worked and some raising problems of the bank. Advantages and disadvantages analyze as well as SWOT analysis are conducted in the report to work out the main characters of the organization.

Foreign Language Faculty

INTERNSHIP REPORT VIETNAM PROSPERITY JOINT – STOCK COMMERCIAL BANK

NAM DINH BRANCH

Student:

Class:

Student ID:

Trần Phượng Huyền ATCA – K11

11A7510058

2 nd June 2012

This Internship Report is dedicated to my family members and

Faculty of Foreign Language of Banking Academy, Hanoi, Vietnam

I have taken efforts in this internship However, it would not have beenpossible to complete this internship without the kind support and help of manyindividuals and organizations I would like to extend my sincere thanks to all of them

I am profoundly indebted to VPBank – Nam Dinh branch for their guidanceand constant supervision as well as for providing necessary information regarding theinternship and for their support in completing my report

I would like to express my special gratitude and sincere thanks to talentedLecturers and Professor at my English for Banking and Finance Faculty, withoutwhom this project would have been a distant reality

In addition, I wish to sincerely thank and show my appreciation to mycolleagues and friends who went out of their way to help me

Finally yet importantly, I am deeply grateful to my family members for theirlove and support throughout my life

Hanoi, 2012

EXECUTIVE SUMMARY

This report is about my internship programme at VPBank Nam Dinh branch Inthis comprehensive report, I have discussed about every major aspect of the VPBanksystem in general and Nam Dinh branch in particular, which I observed and perceivedduring my internship

The main purpose of internship is to learn by working in practical environmentand to examine the theoretical concepts relating to practical experiences

This report provides an analysis and evaluation of the current and prospectiveprofitability, liquidity and financial stability, the organizational structure of VPBankVietnam, the details about the branch I worked and some raising problems of thebank Advantages and disadvantages analyze as well as SWOT analysis are conducted

in the report to work out the main characters of the organization

The report analyzes the credit operations at VPBank Nam Dinh branch withboth advantages and disadvantages It also finds the prospects of VPBank in itscurrent position are positive but still need to improve its competitiveness The majorareas of weakness require further investigation and remedial action by management.Recommendations discussed include enhancing credit management ability,diversifying products lines, improving human resources quality and conductingbusiness expansion

TABLE OF CONTENTS

DEDICATION 1

ACKNOWLEDGEMENT 2

EXECUTIVE SUMMARY 3

TABLE OF CONTENTS 4

LIST OF TABLES AND FIGURES 5

LIST OF ABRIVIATIONS 6

I INTRODUCTION OF VIETNAM PROSPETITY JOINT – STOCK COMMERCIAL BANK (VPBANK) 7

I.1 Overview of VPBank 7

I.1.1 Brief History of the Organization 7

I.1.2 Nature of the organization 8

I.1.3 Business volume 9

I.1.4 Product lines 9

I.1.5 Competitors 9

I.2 Organizational Structure 11

I.2.1 Organizational chart 11

I.2.2 Number of employees 12

I.2.3 Main Offices: 12

I.2.4 Introduction of all departments 12

II INTERNSHIP ACTIVITIES 15

II.1 Overview of VPBank Nam Dinh Branch 15

II.1.1 Brief introduction 15

II.1.2 Organizational structure: 16

II.1.3 Products and services of the branch 16

II.2 Starting and ending dates of internship 17

II.3 Detailed description of the department I worked during internship 17

II.3.1 Customer services department structure 17

II.3.2 Current activities of the department 18

II.3.3 Activities performed during the internship 18

III CRITICAL ANALYSIS 19

III.1 Advantages and disadvantages in Credit operations at VPBank Nam Dinh 19

III.2 SWOT analysis of the VP Nam Dinh branch 20

IV CONCLUSION 22

V RECOMMENDATIONS FOR IMPROVEMENT 22

VI REFERENCES & SOURCES USED 24

LIST OF TABLES AND FIGURES

Table 1: Business Volume 9

Figure 1: Organizational structure of VPBank 11

Figure 2: Organizational structure of VPBank Nam Dinh branch 0

Figure 3: Organizational structure of Customer Services department 17

LIST OF ABRIVIATIONS

1 VPBank: Vietnam Prosperity Joint Stock Commercial Bank

2 SMEs: Small and medium size enterprises

3 EBT: Earning before tax

4 ROE: Return on Equity

5 ROA: Return on Asset

6 VND: Vietnam Dong

7 WTO: World Trade Organization

8 HR: Human Resources

9 Dept: Department

10 IVB: Indonesia Vietnam Bank

11 VRB: Vietnam Russia Bank

12 SBV: State Bank of Vietnam

13 VIB: Vietnam International Bank

14 ACB: Asia Commercial Bank

15 Techcombank: Technological and Commercial Joint Stock Bank of Viet Nam

16 Sacombank: Sai gon Thuong tin Commercial Joint Stock Bank

17 Vietcombank: Bank for Foreign Trade of Vietnam

18 VietinBAnk: Vietnam Joint Stock Commercial Bank for Industry and Trade

19 EximBank: Vietnam Export Import Bank

20 BIDV: Bank for Investment and Development of Vietnam

21 MB: Military Bank

I INTRODUCTION OF VIETNAM PROSPETITY JOINT – STOCK

COMMERCIAL BANK (VPBANK)

I.1 Overview of VPBank

I.1.1 Brief History of the Organization

Vietnam Prosperity Joint- Stock Commercial Bank, formerly known asVietnam Joint – Stock Commercial Bank for Private Enterprises (VPBank) wasestablished under the business license No 0042/NH – GP issued by the Governor ofthe State Bank of Vietnam on 12th August 1993 with an operational period of 99years

The period from 1994 to 1996 was a dynamic development one of VPBank, inwhich VPBank made many considerable achievements The equity rate of returnincreased to 36% in 1995 and 1996; Credit quality was guaranteed and many serviceswere operating effectively However, VPBank faced certain difficulties, partlybecause of the Asian economic crisis at the time, intense competition betweencommercial banks; also, the bank itself made some mistakes

The next stage from 1997 to 2001 was the period of consolidation anddevelopment, created the premises for a coming explosive development phrase.During this time thanks to the support from the Government as well as the State Bank

of Vietnam, VPBank successfully solved their issues and generated momentums forsustainable development

In 2006, VPBank and OCBC bank (Singapore) signed a strategic contract inwhich OCBC Bank became the major shareholder in VPBank During this yearVPBank also expanded its business volume by establishing 2 new associatedcompanies: VPBank Assets Management Company Limited (ACM) and VPBankSecurities Company

During this time, VPBank held a most advanced banking technology inVietnam by purchasing Core Banking – T24 software from Temenos, Switzerland.Aiming to enhance technological strength, in 2007, the bank issued Chip – Card,remarked as the first chip – card in Vietnam market

VPBank was approved to raise charter capital to VND 2,117 billion by theState Bank of Vietnam in 2008, which resulted an increase in OCBC Bank’s shares atVPBank to 15%.

The year of 2011 was considered a successful year for VPBank withremarkable achievements in terms of business performance, network development,and personnel management, etc VPBank reached a pre-tax profit (EBT) of VND1,065 billion and raised its charter capital to VND 5,050 billion, and expanded itsnetwork to nearly 200 transaction offices nationwide

Over the past years, VPBank has won numerous prizes and awards such as

“Enterprises for Community”, “Vietnam Strong Brand Name” Award, Top 100Trusted Services in 2011, and “International Settlement Bank” Award granted by theBank of New York and Citibank for 5 consecutive years That VPBank whocontinually receives prestigious awards and prizes granted both by domestic andoverseas organizations serves as a great source of timely encouragement given bycustomers and society This, in turn, will be the stimulus that brush up VPBank’sconfidence to develop in the future

I.1.2 Nature of the organization

A commercial bank “sells deposits and makes loans to business andindividuals”, said Peter Rose in “Bank management and Finance services” VPBank is

a Joint – Stock commercial bank in Vietnam, it functions as a financial intermediarythat offers wide range of financial services, and also performs full range of financialfunction of any business firm in the economy The bank deals with lending, borrowingand investment activities VPBank performs nature of responsibilities of a commercialbank with all typical products and services of a financial institution such as mobilizingcapital; Utilizing capital; Intermediary services provision (domestic and internationalpayments, treasury services, overseas remittance and fast remittance via banks);trading in foreign currencies; providing payment services for credit cards, debit cards,etc

The nature of VPBank is unique to other banks or financial institutions that areunder close control of the Government and the State Bank of Vietnam, directlyaffected by Monetary Policy of the Central Bank The bank also plays an important

role in financing country economy, especially small and medium size industriesbecause VPBank consider small and medium size enterprises as its main customersbesides individuals.

Aiming to be in the top 5 of retail banks with a large market share in Vietnam,VPBank has conducted wide range of activities such as: network development -opening new branches and transaction points nationwide, the service qualityimprovement, competitive products research, etc In addition, promotional andtraining activities are always promoted in order to build the bank's image, constructthe brand name identity

I.1.3 Business volume

Table 1: (Unit: Million VND)

Total Assets 6,090,163 10,159,301 18,137,433 18,587,000 27,543,006 59,807,023 82,817,947Charter Capital 310,000 750,000 2,000,000 2,117,474 2,117,474 4,000,000 5,050,000Deposits 5,645,000 9,605,000 15,000,000 15,853,000 24,444,000 48,719,000 70,691,061Outstanding 3,014,000 >5,000,00013,200,000 13,000,000 15,813,000 25,324,000 29,183,000EBT 83,320 169,430 313,000 200,000 382,632 663,100,000 1,064,255,000ROE (%) - 22.95% 17.63 % 6.74 % 11.93% 22.65% -

-I.1.4 Product lines

- Mobilize capital (receiving deposit from customers) in VND, foreign currencies,

- Utilize capital (offering credit, contributing capital, joint venturing) in VND andforeign currencies

- Provide intermediary services (domestic and international payments, treasuryservices, overseas remittance and fast remittance via banks)

- Conduct trading in foreign currencies

- Issue and provide payment services for credit cards, debit cards, etc

I.1.5 Competitors

Competitive environment in banking and finance sector actually launched in

2001, and went sharply from 2006 when Vietnam officially joined WTO There aremany foreign banks are operating in Vietnam such as HSBC, ANZ, Deutsche BankVietnam, Citibank…; or joint venture bank as IVB(Indonesia-Vietnam Bank), VRB

(Vietnam- Russia bank), SBV (Singapore Vietnam Bank)… Many joint-stockcommercial banks newly established and upgraded as Techcombank, VIB, ACB,Techcombank, SeABank, Sacombank, Eximbank, Ocean Bank, MB… This intenseexplosion in banking system sparked a competition to penetrate and expand marketshare through network expansion, diversification of products and services,competitive prices and interest rate…Some foreign banks like HSBC, ANZ… initiatedthe deposit products and services in Vietnam to compete with banks in Vietnam in thearea of mobilization The State owner banks as Vietcombank, BIDV, Vietinbank,Agribank… began to realize the importance of improving the competitive positionthrough improving service attitude, quality of services These state-owned commercialbanks with the advantage of the patronage capital and sponsor and support from theGovernment keep dominant roles in the banking services system The State-ownedbanks are seen as direct competitors of joint-stock commercial banks like VPBank VPBank is competitive with other banks in the domestic concrete:

Financing & Investment

Corporate Customers DivisionSupervisory DivisionSupport DivisionInformatics Center

Consumption Loans DivisionStrategy Center

I.2 Organizational Structure

I.2.1 Organizational chart

Figure 1: Organizational structure of VPBank

Annual Report 2010

I.2.2 Number of employees

On 10 September 1993 when VPBank officially opened for trading, the totalnumber of employees was only 18 Along with the development and businessexpansion, the number of personnel of VPBank has been increasing accordingly

By the end of 2009, number of the bank staff was 2,560 people and reached to3,000 staff by the end of December 2011 with more than 92% of those under age of

40, about 80% of employees have university degrees or higher

The Board of directors are aware that staff quality is the strength of the bank.Therefore, in recent years, VPBank always focused in improving the quality of humanresources management The bank regularly organizes training courses at home andabroad to give opportunities to their staff to improve their professional qualifications

I.2.3 Main Offices:

Head office: No 8 Le Thai To, Hoan Kiem District, Hanoi

Supervisory Board:

Supervisory Board’s primary responsibility is the supervision and review of thedevelopment of VPBank’s operations, based on the Executive Board’s writtenquarterly reports

Internal Audit Dept

The Internal Audit Department attaches to the Board of Directors of VPBank,with the Head Auditor having responsibility for internal audit throughout the entirebank The auditors of the department examine and evaluate the internal control

system, to estimate the system efficiency and to provide timely suggestion to insurethe system be implemented consistently and effectively.

Credit Committee (Executive)

Secures and collects information relating to borrowers Checks statementssubmitted by them In charge of credit files which contain information as to thereliability, business habits and financial strength of borrowers

Assets and Liabilities Committee

The department is to forecast net interest income, measure the bank’s interest rate risk,establish guidelines for risk taking and balance sheet funding, manage the bank'sreserve and risk capital requirements

Human resources Committee

The Committee assists the board in ensuring the commission has an effectiveorganizational structure and competitive human resources and compensation policiesand practices It also ensures appropriate possesses are place for the selection,evaluation of senior managers

Risk Management committee

The purpose of the committee is to identify, assess, monitor and manage risk Thecommittee is to oversee, report and make recommendations to the Board in respect offinancial and non-financial risk faced by the Bank

Board of Management

The duties and powers of the Board is to prepare the budget and annual report,balance sheet, income statements and agenda to report to the Shareholders’ meeting,approve the regulations on the administration, organization, services and personnelpolicy of the Bank

Human Resources Management Division

The division is in charge of recruiting suitable personnel for the Bank’s needsand training staff according to their position It also develops training system inaccordance with the Bank’s general objective and policy, implements and evaluatestraining plans and programs

Individual Customer Division