GRIGGS UNIVERSITY
GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM
CAPSTONE PROJECT REPORT
PLANNING BUSINESS STRATEGY OF SAIGON J.S COMMERCIAL BANK —
NGHE AN BRANCH UNTIL 2020
Group 7 - Class: GAMBA 01.V03 Phan Tri Nghia
Truong Minh Hung Nguyen Duc Tri
Dau Anh Tuan
NGHE AN 2011
Trang 2
TABLE OF CONTENT ABBREVIATIONS LIST OF DIAGRAMS, CHARTS AND TABLES ASSURANCE ACKNOW LE DGEMBENDS toiccnisaeitiidridarkeEitii6sa18.100/66614052068652656853553ã252066684485645446k4e INTRODUCTION 1 The necessity of the research topic 2 Research objectives 3 Thesis and scope 4 Research methodology 5 Structure CHAPTER 1: THEORETICAL FRAMEWORK FOR BUSINESS STRATEGY I FUNDAMENTAL GROUNDWORK FOR STRATEGY AND MODERN BUSINESS STRATEGY 1.1Concept and role of strategy 1.1.1 Concept 1 1.2 Role of strategy
1.2 Characteristics of business strategies: 1.3 The types of business strategy
1.3.1 Classified as strategic business-level:
1.3.2 Classified as the content of strategy:
Trang 31.3.4 Strategic business practices in the banking activities 1.4 Strategy formulation process
1.4.1 Definition of business vision — mission — objectives of the organization 1.4.2 External environmental impact assessment
1.4.3 Internal factor analysis 1.4.4 Strategic planning 1.4.5 Strategic plan selection 1.4.6 Strategic decision 1.4.6 Strategy realization
1.4.7 Monitoring and assessment of strategy realization 1.5 Strategic analysis tools 1.5.1 Information collection 1.5.2 Combined application 1.5.3 Strategy selection CHAPTER II: ANALYSIS OF THE BUSINESS ENVIRONMENT SCB’s NGHE AN BRANCH 2.1 OVERVIEW OF SCB
2.1.1 The formation and development of SCB’s Nghe An branch 2.1.2 The organizational structure of SCB’s Nghe An branch 2.1.3 SCB's products and services
2.1.3.1 Fund mobilization 2.1.3.2 Credit
2.1.3.3 Results of the business operations of the SCB over the 3 years 2008 - 2010 2.2 Analysis of external environmental factors affecting the business activities of SCB’s Nghe An branch
2.2.1 Macro environment analysis of SCB’s Nghe An branch
Trang 42.2.1.2 Political- legal environment
2.2.1.2 Economic environment 2.2.1.3 Economic environment 2.2.1.4 Cultural-social environment
2.2.1.5 Technological environment 2.2.1.6 Human resources environment 2.2.2 Analysis of micro environment 2.2.2.1 Analysis of competitive rival 2.2.2.2 Analysis on customers 2.2.2.3 Analysis on alternatives
2.2.2.4 Analysis on potential risks of opponents 2.3 Opportunities and challenges
2.3.1 Oportunities 2.3.2 Challenges
2.4 Analysis on the matrix for evaluation of external factors (EFE) 2.5 Analysis of internal environment of SCB’s Nghe An branch 2.5.1 Human resource of SCB's Nghe An branch
2.5.2 Financial capability of SCB’s Nghe An branch 2.5.3 Evaluation on marketing skill
2.5.4 Other products and services
2.6 Evaluation of core banking software technology of the SCB’s Nghe An
branch
2.7 Strengths and Weaknesses of SCB’s Nghe An branch 2.4.6.1 Strengths
2.4.6.1 Weaknessess
2.4.6 Matrix on internal factors of SCB’s Nghe An branch (IFE)
Trang 52.5 Analysis of internal environment of SCB's Nghe An branch
Trang 6ABBREVIATIONS
SWOT SWOT Matrix: Strengths Weaknesses, Opportunities and Threats
EFE Matrix of the external factors IFE Matrix of the internal factors QSPM QSPM Matrix
SPACE Matrix of strategic position GDP Gross domestic product
SCB’s Nghe Saigon J.S Commercial Bank - Nghe An Branch An branch
Trang 7LIST OF DIAGRAMS, CHARTS AND TABLES 1 DIAGRAM
Diagram 1.1: Process of forming a business strategy
Diagram 1.2: Organizational structure of SCB’s Nghe An branch 2 TABLE Jable 1.1: The business operating results of SCB’s Nghe An branch over 3 years of 2008, 2009, 2010 Table 1.2: Some financial Criteria s of SCB’s Nghe An branch during 2008-2010 period
Table 1.3: Criteria of SCB’s Nghe An branch and other opponents Table 1.4 Picture matrix of competition
Table 1.5: Matrix for evaluation of external factors (EFE)
Table 1.6: Matrix of competition image of SCB’s Nghe An branch Table 1.7: Indicators finance SCB Nghe An Branch
Table 1.8: Some operational of criterias of the payment services of SCB’s Nghe An branch Table 1.9: Matrix on internal factors (IFE)
Trang 8ACKNOWLEDGEMENTS
Ve would like to extend our sincere thanks to SCB’s Nghe An branch which sipported us enthusiastically during the process of providing data as well as h:ld the working sessions in order to make business strategy for the enterprise Fesides, we would like extend our sincere thank to the professors and doctors - who have given us the skills and knowledge of the corporate governance trroughout the entire course
Trang 9ASSURANCE
We assure: Theme “Planning business strategy of Saigon J.S Commercial Bank - Nghe An Branch until 2020” is the theme performed by our Research Team The data relating to Saigon Commercial Bank - Nghe An Branch were
provided by the own unit
Vinh, 31 March, 2011
THE IMPLEMENTATION AUTHORS TEAM
Trang 10INTRODUCTION
1 The necessity of the research topic
On implementing Vietnam's policy toward developing a multi-component socialist-oriented economy in the period of industrialization and modernization commercial banking system in Vietnam has constantly renewed and grown, particularly in recent years, Vietnam's banking sector has seen a great development Banking structure is becoming more various, including National Commercial Bank under the central bank, Commercial Joint-Stock Bank, Joint-Venture Bank, representative offices and branches of foreign banks, Bank for Social Policy New types of services provided by such banks for Vietnam’s economy are becoming more modern, which has significantly contributed to bringing the banking system more and more competitiveness
Trang 11Therefore, the Team selected the theme “Planning a business strategy of Nghe An Branch of Saigon J.S Commercial Bank until 2020” as the theme of dissertation - the big Assignment of the Team
2 Research objectives:
The study will focus on business results at SCB’s Nghe An branch in recent years and the results of performance of business strategy, then it will recommend various solutions tc expand its business banking services
3 Thesis and scope
The research’s thesis is the result of business operations as well as its implementation of business strategies in the past years SCB’s Nghe An branch Its theme focuses on theoretical and practical aspect of business results, it will also recommend many strategies which need implementing in the coming period in order to improve SCB and competitiveness of SCB’s Nghe An branch
The study’s scope: limited to Vietnam's banking sector, the characteristics and the operations of SCB as well as its main rivals in recent years
4 Research methodology
Trang 12- Methods of statistics on the basis of data collection and data analysis: Based on SCB’s actual documents, the study will also refer to other data from the documents from the State Bank of Vietnam as well as other commercial banks and other
relevant documents
e Using the theoretical models of strategic management in a business in order to apply into the specific conditions cof the bank with ai aim of making strategy planning for the bank
e Using the historical methods in combination to analyze, synthesize, combining with the matrix tools such as SWOT, QSPM which have been learned in the course of the Program and applied them in the research of the business characteristics, financial data at SCB’s Nghe An branch and a number of the banks of the same sector
5 Structure:
The research theme is designed and presented in three chapters CHAPTER I: Basic theories about setting up a business strategy
CHAPTER II: Analysis of the business environment of the SCB’s Nghe An branch CHAPTER III: Strategy selection and solutions for strategy implementation of SCB’s Nghe An branch
Trang 13CHAPTER I THEORETICAL FRAMEWORK FOR SETTING UP BUSINESS STRATEGY I FUNDAMENTAL GROUNDWORK FOR STRATEGY AND MODERN BUSINESS STRATEGY 1.1 Concept and role of strategy 1.1 1 Concept
Until now there are many definitions of strategy
+ According to Michael Porter "Strategy is a process to find out an appropriate position in a competitive industry, it contains a range of activities in which competitiveness occur”
+ According to Alfred Chandler "Strategy is the determination of basic and long-term goals for business, action plans along with the allocation of resources needed to accomplish those goals”
+ William F Gluek said: "The strategy is a unanimous, comprehensive, coordinated plan designed to ensure that the basic objectives of a enterprise are done successfully’,
4 Minzberg sums up the meanings of strategy used by such authors and offers five words to describe strategy, which is called "SP", including Plan, Ploy, Pattern, Position, Perspective Within the meaning of such words, strategy is a plan or an action plan drafted in a conscious way
Trang 14implement their objectives Strategies are not separate actions but a series of actions or decisions which have intimate relationship with each other All strategies should aim to enterprises’ goal which is set on the basis of internal resources within an enterprise as well as external factors affecting business In summary, we can offer a broad definition of strategy as follows: Strategy is a complex series of actions t6 mobilize resources of an organization to achieve a certain goal
Business strategy of a enterprise is a series of commitments and actions that the enterprise uses to win a competitive advantage by exploiting its core competencies in a specific market
1 1.1.2 The role of strategy
First, the business strategy helps enterprises clearly realize the purpose, its direction, as a guideline for all actions of enterprises in their business
The second, business strategy enables businesses to capture and take advantage of business opportunities and actively seek solutions to surmount, overcome dangers and pitfalls of the market
The third, business strategies contributes to improve the efficiency in the use of the enterprise's resources, strengthen the competitive position, ensure the continuous and sustainable growth of the businesses in the long term
The fourth, the construction and implementation of a business strategy creates a solid basis for enterprises to set forth policies and decisions in line with market fluctuations
1.2 Characteristics of business strategies:
** Business strategies often determine enterprise’s basic objectives and their business style in each business cycle and is sufficiently thorough in all aspects of its production and business activities to ensure its business
Trang 15** Business strategy ensure the maximum of exploitation and utilization of enterprise resources in the present and future to promote the advantages and to seize the opportunity of gaining advantage in the market
“* Strategy clearly defined the scope of business competition.This is an important step in the analysis of a enterprise’s business environment, strategic direction, resource allocation, and portfolio management
“* Strategy must be reflected throughout a continuous process from developing strategy, implementation, testing, evaluating and adjusting strategies
** Business strategy must be thought offensive to win business in the market (to take full advantage of their capability to take the victory)
** Strategy should establish a relationship between the strengths and the weaknesses of the enterprise as well as mutual relationship between the Opportunities and the challenges outside the enterprise, thereby creating their competitive edge
%* Business strategies are often developed for a relatively long period (3 to 5 years), tendency to shorten it will depend on the characteristics of each
sector
1.3 The types of business strategy 1.3.1 Classified as strategic-level:
Business strategy can be divided into the following categories:
a) enterprise -level strategy (or general strategy): developed for all companies in all areas in which they participate
b) Business-level strategy (field): built for a specialized industry
c) Functional-level strategy: This is a strategy of each individual function in a enterprise such as finance, marketing human resources
1.3.2 Classified as the content of strategy:
Trang 161.3.3 Classified as strategic process
Business strategies include: oriented -strategy: refers to the major orientations of the business objectives, directions and measures to achieve these objectives: Strategies for action: action plans of the enterprise in each particular situation and an expected adjustment strategy
1.4 Strategic business practices in the banking activities
1.4.1 Strategy to strengthen market share: oriented to strengthen the position and image of the bank by improved governance model, reviewing and improving control system, tackling debt, improving quality products and services to retain customers This strategy is often applied in the banking credibility crisis period
14.2 Strategy to diversify distribution networks: oriented to the diversification of products and services to satisfy the solvency of customers It is to develop customers and to increase profits This strategy is often used by the banks when their business gets high growth rates In addition, the diversification and expansion of banks’ distribution channels to provide customers most convenience when using their products and services This strategy is often applied by banks in the period of competition acceleration
1.4.3 Niche strategy: Identifying segments, sectors, products which are banks’ advantages, then they can concentrate all resources to achieve growth and efficiency
1.4.4 Differentiation strategy: Identifying or establishing outstanding points of a enterprise on products, distribution channels, pricing, promotion policies to achieve business goals
1.5 Strategy formulation process
1.5.1 Definition of business vision — mission — objectives of the organization Defining the vision and mission is aimed to deal with the key questions who
organization is, which their position at present and future is and what their long-
Trang 17strategy formulation process, enlightening the strategy-maker determines materials
need be collected
1.5.2 External environmental impact assessment
f:xternal environmental impact assessment targets at identification of possible
opportunities and threats towards the enterprise’s business operations A Macro environment
+ Economic factors: The economic growth rate leads to new demands for development of the economy; Inflation rate is influential in interest rate and
return on investment (ROI); Unemployment rate affects recruitment and lay- off; Exchange rate impacts on bank interest rates, financial policies, wage
control and balance of payment
4 Politic factors: They are deemed increasingly important, including Government stability; Regulations on tax, fare and rate; Regulations on recruitment and dismissal; Regulations on safety and environmental
protection, etc
+ Social factors: Quality of life; Customs; Regional culture; Population growth rate, etc
4 Technology factors: They produce a significant direct effect on business strategy of the enterprise because invention and changes of new technologies, in a revolutionary technology age, may bring about not only opportunities but risks as well threatening interprise’s existence and development Thus, an enterprise is supposed to set a flexible technology application strategy in order to take the imitative and keep up to the advancements
B Task environment (micro)
Trang 18Customers, Suppliers, Substitute products Existing competitors, Potential Competitors An enterprise is supposed to analyze the aforesaid factors to identify possible opportunities and threats
1.5.3 Internal factor analysis
This is to analyze the present state and capacity of corporate resources aimed at identification of both strengths and weaknesses for development and improvement
a) Corporate resource analysis
+ Human resource: including high-ranking executives, key executives and staffs
4 Finance resource: focusing on capital allocation, capital efficiency and financial targets
4 Technology resource: including workshops, warehouses, roads, means of transport and machinery
4+ Marketing analysis: It’s of significant importance in internal analysis, enabling assessment of corporate capability in demand satisfaction based on such issues as product categories, product quality, market share, prices and consumer confidence
1.5.4 Strategic planning
Every enterprise presents a number of strategic objectives One of the main objectives an enterprise strives to achieve is growth In addition, the corporate development process is subject to various changes; therefore, the goal is supposed to be adjusted accordingly General strategy is normally applied for that stage
1.5.5 Strategic plan selection
After strategic selection model is determined, the next step is selection strategic method The base to assess method strategic selection is to choose the better plans among established ones and finally pick the best one
Trang 19Followed by strategic analysis and selection, a strategic decision is made upon the following conditions:
- The decision must abide by the general objective and long-term goals of the system
- The decision of the system must conform to the law and customary practices - The decision must be made on the basis of available or possible-to-be-mobilized resources
- The decision must be made in a timely manner 1.5.6 Strategy realization
This is considered an important stage in putting strategies into practice
Success in realizing strategy not only depends on the strategy quality but the manager’s ability of encouraging his subordinates
1.5.7 Monitoring and assessment of strategy realization
It’s essential to monitor and assess if strategies are carried out as planned during the strategy realization process There are a lot of reasons why some strategy fails to achieve the objective They might be changes in environment or failure in attracting human resources Thus, it’s necessary to monitor and evaluate the realization process through the feedback system and other check-up measures
In summary, the strategy formulation and realization process is staged as
follows:
Trang 20Diagram 1.1 Strategy formulation process e Definition of mission and objectives | External environment assessment | Internal analysis Ỳ Strategic planning Strategic analysis and selection v Strategy realization y Strategy realization monitoring and assessment 1.6 Strategic analysis tools 1.6.1 Information collection:
1.6.1.1 External Factor Evaluation (EFE) Matrix
Trang 21advantageous or disadvantageous to the enterprise 5 steps are required to build this
matrix:
\ Step 1: List 10- 20 factors categorized into opportunities or threats you think, substantially influential to the success of the enterprise in their business field/industry
\ Step 2: To assign a weight to each tactor in accordance with the importance scale from 0.0 (not impartant) to 1.0 (Very important) Its importance level is in line with its influence upon the business field/industry the enterprise is specialized in The total value of all weights together should be 1.0
\ Step 3: To assign a rating (1-4) to each factor The rating indicates how effective the enterprise's current strategies respond to the factor 4 = the response is superior, 3 = the response is above average 2 = below average, | = poor
\ Step 4: Multiply each factor weight with its rating This will calculate the weighted score for each factor
\ Step 5: Add all weighted scores for each factor to calculate the total weighted score for the matrix
1 Evaluation: The total weighted score of the matrix is not dependent on the number of factors listed in the matrix; the highest score is 4 and the lowest
one is 1
t2 The total weighted score being 4 indicates that the enterprise is responding well to opportunities and threats
3 The total weighted score being 2.5 indicates that the enterprise has average ability to respond to opportunities and threats
Trang 221.6.1.2 Internal Factor Evaluation (IFE) Matrix
Internal factors are considered play an important role in each business strategy and
objectives the enterprise has set After taking internal factors into consideration, enterprise executives are supposed to build a matrix to evaluate the intensity of response and intensify strengths and weaknesses The enterprise is thereby able to take full advaniage of strengths and get prepared for dealing with weaknesses and eventually finding improvement soiutions 5 steps are required as foliows to build
an IFE matrix:
Step 1: List 10- 20 factors categorized into opportunities or threats, you think, substantially influential to the success of the enterprise in their business field/industry and the set objectives
Step 2: To assign a weight to each factor in accordance with the importance scale
from 0.0 (not important) to 1.0 (Very important) Its importance level is in line with
its influence upon the business field/industry the enterprise is specialized in The total value of all weights together should be 1.0
Step 3: To assign a rating (1-4) to each factor 4 = a major strength; 3 = a minor
strength, 2 = a minor weakness, | = a major weakness
Step 4: Multiply each factor weight with its rating This will calculate the weighted score for each factor
Step 5: Add all weighted scores for each factor to calculate the total weighted score for the matrix
Evaluation: The total weighted score of the matrix is not dependent on the number
of factors listed in the matrix; and on the scale from | to 4
- The total weighted score being below 2.5 the enterprise is weak in terms of
internal factors
Trang 23- The total weighted score being above 2.5, the enterprise is strong in terms of internal factors
1.6.2 Combined application
1.6.2.1 Strategic Position and Action Evaluation matrix-SPACE matrix
The SPACE matrix is used to determine what type of a strategy the enterprise should undertake: Aggressive, Conservative, Defensive or Competitive
Step |: List a group of factors categorized into financial strength (FS) competitive
advantage (CA), environmental stability (ES) and industry strength (IS) The
following are suggested of criterias shown on the SPACE axes
Step 2: Rate each factor of FS and IS using the rating scale from +1 (worst) to +6
(best) and from -1 (best) to — 6 (worst) to each factor of ES and CA
Step 3: To calculate average scores for FS by adding assigned values together and
then get them divided by the number of factors listed in FS The same calculation is applied to average scores of IS ES and CA
Step 4: Plot the average scores of FS, IS, ES and CA dimension on the appropriate axis of SPACE matrix
Step 5: Add scores on the axis X and plot the final point on the axis X, do the same to the axis Y and find the intersection of the X and Y points
Step 6: Draw a line from the center of the SPACE matrix to the intersected point This line reveals the type of strategy the enterprise should pursue: Aggressive,
Conservative, Defensive or Competitive
1.6.2.2 SWOT matrix
Trang 24+ S/O combination: It’s aimed to combine the strengths and opportunities of the enterprise The key point is that the enterprise must take advantage of their strengths to grasp Opportunities
+ S/T combination: It’s aimed to combine strengths and threats of environment to curb threats with their strengths
+ W/O combination: It’s aimed to combine weaknesses and opportunities The enterprise is supposed to take advantage of opportunities to overcome weaknesses + W/T combination: It’s aimed to combine weaknesses and threats of the enterprise The enterprise is supposed to minimize their weaknesses to avoid threats
1.6.3 Strategy selection
Quantitative Strategic Planning Matrix (QSPM)
QSPM matrix is used to review the information and analysis the enterprise executives have from the stages of building EFE, IFE and SWOT matrix in order to pick the best strategy to put into practice QSPM matrix is built on the basis of the following 6 steps:
1) List strengths, weaknesses, opportunities and threats from EFE and IFE
matrix
2) Categorize and evaluate every factor suitable for each matrix, analyze
external factors and IFE matrix
3) Analyze and evaluate the already-built matrixes such as EFE, IFE and SWOT
4) Calculate Total Attractiveness Scores for each factor in ascending order
using the 1-4 scale, of which | = not attractive, 2 = somewhat attractive, 3 =
reasonably attractive, 4 = highly attractive
5) Calculate the Total Attractiveness Scores for each row by multiplying the weights (step 2) by Attractiveness Scores (step 4)
Trang 256) The strategy with the highest total attractive score is preferably chosen In summary, the best and most suitable strategy can be selected followed by establishment of some certain strategies based on QSPM-analyzing results
Trang 26CHAPTERH
ANALYSIS OF THE BUSINESS ENVIRONMENT SCB’s NGHE AN BRANCH
2.1 OVERVIEW OF SCB’ NGHE AN
2.1.1 The formation and development of SCB Introduction to SCB’s Nghe An branch cutest _ Fe NESE awn ono coin ttn _— Trademark —" scB
Abbreviation Saigon Commercial Bank
Address: No 25, Quang Trung Road, Vinh Province: Nghé An Phone: 383588500 Fax: 383588501 Email: ———=———— scb@scb.com.vn Website: http://www.scb.com.vn
Trang 27SCB’s Nghe An branch comes into operation with the following aims: Contributing to mobilization of investment capital for socio-economic development of the province; Expanding the scope of and enhancing the capacity of SCB; Meeting the needs to provide financial products and services in the area
SCB’s Nghe An branch has the immediate goal to exploit and mobilize domestic and forcign funds, contributing to meeting the investment needs for social and economic deveiopment in Nghe An and meeting the needs of banking products and services from Nghe An’s citizens In term of long-term goals, SCB’s Nghe An branch will contribute to support social and economic development in Nghe An as well as the North Central and to enhance their competitiveness and expand the system's operation of Saigon Commercial Bank system
Proper activities of SCB’s Nghe An branch are to provide banking products and services for residential and economic organizations in Nghe An and its neighboring provinces The products and services which SCB’s Nghe An branch offer is expected to raise capital from organizations and individuals of all economic sectors in the province and the surrounding area, providing credit products for economic organizations, local residents and performing other forms of investment in various forms in accordance with State Law and SCB’s regulations and giving other banking services: international payment and business foreign currency, bank guarantees, factoring, cash withdrawal through ATMs, salary payment through accounts
Vision: Becoming one of 5 leading joint-stock commercial banks in Vietnam
Core values: SCB believes that the core values will enable SCB to create a solid
foundation, a collective unity, which is the basis for SCB to accomplish
commitment and their vision
Trang 28Customer is the focusing point: SCB acts for customers, all its activities are oriented to the customer SCB always gives its action based on considerations and concern for the needs of customers All SCB_ staff always put our-selves in customer's position to understand them and to find optimal solutions for customers Innovation - Creativity - Professionalism: SCB continuously improves and diversifies its products and services, constantly evolving and improving service quality to customer at its best and providing more choices for customers All SCB’s employees always train and equip themselves to confidently handle any situation happening in a perfect manner
Solidarity - Sharing - Cooperation: SCB will operate in a spirit of cooperation to truly immerse our-selves in things we are doing and share successes It unites all its employees to work together to create better results
Mission operations: Harmonying the benefits of society, customers and employees to ensure its shareholder value All SCB’s activities SCB are oriented to the development of a harmonious sustainable prosperity of the community and enhancing value for shareholders, customers, its staff so that it can create conditions for their fullest capacity and creativeness to achieve higher productivity from available resources
Slogan: Be perfect for customer
2.1.2 The organizational structure of SCB’s Nghe An branch:
SCB’s Nghe An branch operates as a branch of undertaking full mobilization, credit and other banking services across the entire province of Nghe An Its structure consists of six departments and functional sections with 2 sub-branchs and 52 staff members under the organizational diagram as follows:
Diagram 1.2: Organization diagram of SCB’s Nghe An branch
Trang 29Director of branch Business department Personal denartment eee arr - Danking team Monetery trading department Business assistant department Fund and accounting department Administration department (Source: made by the authors team based on the actual organizational structure at SCB’'s Nghe An branch)
2.1.3 Products and services of SCB’s Nghe An branch
SCB’s Nghe An branch is now providing many types of financial services and product for individual customers and businesses at home and abroad
2.1.3.1 Fund mobilization:
+ Deposits mobilized trom businesses and individuals in VND foreign currencies, and gold with the diverse terms, attractive interest rates, flexibly accumulated savings:
Trang 304 Loans with short term: Loans for working capital addition, Loans for exported goods production; Loans for discount of document set for export commodities/ goods; and Loans for payment covering
+ Mediuin and lony term loans, it has many diverse loan packages such as: Loans for investment projects, Loans for houses and factories building, Loans for machinery procurement.; Loans for consumption,
4 Policies to support borrowers at SCB: Support the establishment of investment projects, business plans; Free of charge for the relevant domestic payment services ; Support 50% premium for collaterals
4 Wholesale business: Trustee lending loans; co-financing loans, and co-
guarantees
4 Securities trading loans: Mortgage of listed and unlisted securities 2.1.3.3 Service
+ Provide many convenient services such as: Service of payment
accounts, service in charge of receivable incomes collection and expenditure payments, in charge of salary payment International payment services (in charge of collection and payment of import / export by LC .); Services of domestic and foreign money remittances; Overseas national currency exchange Service; Card Services, SMS Banking Service, Internet Banking Service, Securities Repo .,
2.1.4 Results of the business operations of the SCB over the 3 years 2008 - 2010
For nearly 4 years of presence in the market of Nghe An, SCB has quickly entered into the banking market of the North Central region with a strong pace, the capital mobilizing ability has increased rapidly
Trang 31Table 1.1: Rerults of business operation of SCB in 3 years of 2008, 2009, 2010 'CRITERIAS 2008 2009 2010
| TOTAL CAPITAL RESOURCES | 42979 | 607.53 | 954 “1- The funds mobilized in the local aren | 418.49 | 597.71 | 750
+ Market share of the capital mobilized in the
area (%) 2.6 2.70 Ẩn l2 Market share of the capital mobilized at the
beginning of the year (%) 2.6 “7
“+ Increase (decrease) compared with the
Trang 32+ Term of 3 months to less than 12 months 83 + Over 12 month term 133 Valuable papers 18.60 15.62 117 sa Below l2 months 117
4 Over 12 month term 0
“L1- Classification by currency types
* In Vietnamese dong 378.40 | 540.77 609 “in foreign currency and gold 37.09 56.94 141
L2 Classification by the time
* Short-term funds SỐ 320.38 | 476.61 551 7 * Medium- and long-term fund 95.11 121.10 198 2-Treasury's deposits 0 3-Deposits of the other Cls 0 4-Internal transferring capital -414.78 | -591.68 195
* Transferring out capital 417.32 | 593.84 846 * Transferring in capital 2.54 2.16 1,041 II-TOTAL ASSETS 429.79 | 607.53 954
Trang 33
1- Investments 1.1-Deposits at the SBV 2.90 9.70 3
1.2- The Government treasury bills, short- ñ
term valuable papers
1.3-Deposits at the other CIs 0.00 0.02 0 1.4-Securities investment 0 1.5-Capital contribution, long term 5 investment
2- Total outstanding loans 10.10 17.48 933
* Market shares of the outstanding loans (%) 0.047 0.058 2.0
* Market shares of the outstanding loans at n the beginning of the year (3%) 0.047 ,
* Percentage of Total Outstanding Loans
2.35 2.88 97.8 /Total Assets
* Increase (decrease) compared with the
1,648.40 | 5,237.0 beginning of the year (%)
2.1- Outstanding loans classified by the time
- Short term 7.95 16.47 12 - Medium and long term 2.16 1.02 921
Trang 342.2- Outstanding loans classified by currency types | * In Vietnamese dong 10.10 17.48 933 «In foreign currency and gold 0.00 0.00 0 mm mm loans by economic sectors 10.10 17.48 933
“Central State-run Enterprises 0 R Local State-run Enterprises 0 R State-run enterprise Limited 0
"Private enterprise Limited 0.30 1.00 380
Trang 35economic sectors - Agriculture, forestry — | sectors 0.06 0 Fisheries Sector _ 0.08 0 - Mining Exploiting Industry 0 - Processing !ndustry 0 - klectricity, gas, water manufacturing and distributing sectors ° - Construction Industry 1.05 0.24 Zz | - Trade Sector 0 - Hotel and restaurant sector 0.12 380 - Transportation, storage and communications
0.08 0.04 0 - Scientific and technological activities 0 - Financial activities and consulting services 0.31 0.58 l - State management, defense business, social
insurance ° - Education and training 0 - Health care and social assistance 0 - Cultural and sports activities 0
Trang 36
E
- Personal & community services 8.4] 16.62 550 - Seniee activities in household 7 _ w 0 - - Activities of the International union organizations ° 28 Bad debts 0.00 0 TH SERVICE OPERATIONS an 1 Payment services LL Domestic payments 5,702.08 | 1,398.95 64 - Payment in cash 5,047.91 34.58 3 ~ Non-cash payment 654.17 | 1,364.37 61 ˆ + Handling through electronic money transfer ° + Handling by documents 20 + Handling through the Internet, mobile, pe 4]
1.2- Receiving- paying in cash via fund 0 ~ Total received cash -33
Trang 371.3- Payment account - Number of customer opened accounts 838 1,079 0 '- Account balances 6.96 9.65 0
i.4- Card services
- Number of local cards in circulation, 685 945 1,394 | Number of international cards in circulation | 0 | amber of ATMs 2 2 0 - Number of EFTPOS terminals 2 - Number of units accepting cards 4
3-Guarantee services 2.36 6.04 l
- Guarantee for contract performance 1.00 1.00 0 - Guarantee for payment 0.91 3.43 l - Guarantee for bid participation 0.31 0
~ Other guarantees 0.14 1.61 0
4- Income from services 0.01 0.43 l * Market share of revenues from services (%) 0.2 * Percentage of Service Revenue / Total
0.04 0.58 0.7
Revenue (%)
Trang 38
(Source: SCB’s Nghe An Branch)
Above key business criterias of SCB’s Nghe An branch show that the business operation of Vinh branch has relatively high growth rate Criterias of capital mobilization converted in VND with regular and high increase Critenias of loans converted in VND also increased, although in 2008 the bank just went into operation and was influenced by the tightening credit policies to control inflation by the Government but SCB’s Nghe An branch has achieved its set forth plans Through the profit targets may see that the profit growth is higher than the growth rate of mobilization and lending, which shows the working efficiency of Nghe An Vinh SCB statt was very high
Chart.1.1: The mobilized fund of SCB’s Nghe An branch during 2008 — 2010 period ` ft Mobilized fund Billion dong 800.00 600.00 » 400.00 200.00: 0.00 2008 2009 2010 2008 2009 | 2010 Mobilized fund — Ƒ t = a aly 415.49 597.71 | 750
(Source: L-stablished by the authors team based on the data of the report on the activities of credit institutions in the province of Nghe An in 2008, 2009, 2010 of
Trang 39Chart 1.2: Credit Outstanding Loan of SCB’s Nghe An branch during 2008 — 2010 period Credit Outstanding Loan Billion 1,000.00 dong 800.00 600.00 400.00 - 200.00 Credit Outstanding DOO ö Credit | 2008 2009 2010 | TENHE | 1010 „oan a L 17.48 - + 93 | - ad F
(Source: Established by the authors team based on the data of the report on the activities of credit institutions in the province of Nghe An in 2008, 2009, 2010 of Nehe An State Bank)
Table 1.2: Some financial Criteria s of SCB's Nghe An branch during 2008-2010
period
Criteria 31122008 31122009 31122010 -
Total tund (Total Assets) 429.79 | 607.53 954 | Capital mobilized in the area | 415.49 | 597.71 750 |
Outstanding loans | 10.1 | 17.48 333 | Mobilized flacd Total fund - | 0.97 | 0.98 | 0.79
Trang 40Assets Outstanding Loans / Mobilized Fun 0.02 0.03 1.24 Disparity of Incomes - Costs (million VND) Zi low 17139.5 13392 (Source: Report on Business Operation of the SCB for the years of 2008, 2009, 2010)
Through a number of criterias on the financial situation of SCB’s Nghe An branch can see that: Total funds of SCB increased in 2009/2008 was 41.36%; in 2010/2009 was 57.03% Capacity of mobilizing capital in the area of the SCB also escalated at the rate of 43.86% in 2009 and 25.48% in 2010 The profit of the SCB in 2008 - the first year put in operation was only 2.5 billion dong, then in the year of 2009 when the banking market operated very dynamically, the profits reached more than 17 billion dong
2.2 Analysis of external environmental factors affecting the business activities of SCB’s Nghe An branch
2.2.1 Macro environment analysis of SCB’s Nghe An branch 2.2.1.1 Economic environment