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MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS OF HO CHI MINH CITY - HUYNH THI HUONG THAO RESEARCHING THE IMPACTS OF INTERNATIONAL BANKING SERVICES TO OPERATIONAL EFFICIENCY OF VIETNAM COMMERCIAL BANKS Major: Finance and Banking Code: 62340201 SUMMARY OF ECONOMIC DOCTORAL THESIS Ho Chi Minh City - 2016 The work was completed at: University of Economics of Ho Chi Minh City The scientific instructors: Assoc Prof Dr Tran Huy Hoang Reviewer: The thesis will be protected in front of thesis scoring council at the University of Economics of Ho Chi Minh City at hour day month 2016 The thesis can be studied at: - Synthesis Scientific Library in Ho Chi Minh City - Library of University of Economics of Ho Chi Minh City PUBLISHED SCIENTIFIC WORKS Huynh Thi Huong Thao, 2015 Development orientation of international banking services of Vietnam commercial banks Financial & Monetary Review, No 431, p 20-23 Huynh Thi Huong Thao, 2016 Measurement of operational efficiency of Vietnam commercial banks Banking Science & Training Review, No 168, p 43-48 Huynh Thi Huong Thao, 2016 Researching the impacts of international banking services to the operational efficiency of Vietnam commercial banks Banking technology Review No 123, p 44-53 INTRODUCTION INTRODUCTION Reason for study of the thesis Competitive pressure has helped Vietnam banking system has made positive changes in scale of operation, quality of services, financial capacity In efforts to maintain market shares, stable and profitable growth, Vietnam commercial banks (VCB) has given many new products and services gradually to diversify their profitable operations Despite international banking services (IBS) was the development focus of VCB but must have long-term development strategies to adapt to the fierce competition Therefore, the study of the impacts of IBSs to operational efficiency (OE) of VCB in recent years as well as providing solutions to improve OE and develop IBS is needed The aim of the thesis’ research The impact study of IBS to OE of banks has important implications, especially for administrators so that banks will have the analysis and evaluation required in the strategic decisions for themselves So the research has the following objectives: - Study IBS indicators of VCB nowadays - Study of the impact of the IBS to OE of VCB Object and scope of the research The thesis chosen object of study is the impacts of IBS to OE of VCB Research’s data taken from annual reports or financial statements were audited from 38 banks include state commercial banks and joint stock commercial banks in period 2008-2014 Research methodology The study used qualitative and quantitative methods The qualitative method were conducted through interviewing directly with experts, bank managers Quantitative methods to study the thesis includes: method of non-parametric analysis through DEA model; regression models with pooled ordinary least squares - Pooled OLS, fixed effect model – FEM, random effect model - REM, feasible generalized least squares - FGLS Structure of the subject In addition to the introduction, conclusion, appendices, references, structure of the thesis consists of chapters Practical significance of the thesis Scientific contributions: + The thesis has codified the general theoretical issues of IBS and OE, the importance of IBS, the relationship between IBS and OE of banks in the context of international integration and fierce competition in the banking and financial banking sector + The thesis has identified the IBS indicators impact to OE of VCB, thereby determining the model of the impacts of IBS to OE, this is a new point and no duplication of the thesis + This is the first study to apply quantitative methods through a systematic way approach with DEA, Pooled OLS regression method, FEM, REM, FGLS and necessary tests such as: F test, Hausman test, Pagan Lagrangian Breusch test, Modified Wald test, Wooldridge test to study the impacts of IBS to OE of VCB that no previous research done Practical contributions: + The thesis has quantified OE of VCB period 2008-2014, this research’s results is a scientific reference help administrators assess the plans’ completion level and growth of OE of banks The thesis has analyzed the IBS’s positive factors, negative factors that influence OE of banks, which propose solutions to promote positive factors, control negative factors, improve OE constantly and develop highly diversity of products and services of banks especially IBS + In addition, this research is the scientific basis for the Government and the State bank to identify factors affecting OE of VCB which can make policies timely and reasonable in order to establish a solid banking system, ensure a healthy and effective banking business CHAPTER 1: OVERVIEW OF THEORY AND EXPERIMENTAL STUDY ON INTERNATIONAL BANKING SERVICES AND OPERATIONAL EFFICIENCY OF COMMERCIAL BANKS 1.1 International banking services of banks 1.1.1 The concept of international banking services According to the Foreign Exchange Ordinance in 2005 and Foreign Exchange Ordinance amended in 2013, on the territory of Vietnam, foreign exchange transactions in limited use except for cases permitted including resident and non resident Decree No 24/2012/ND-CP dated 03/04/2012 of the Government on management of gold trading activities and Circular No 16/2012/TTNHNN dated 25/05/2012 guiding some articles of Decree 24/2012/ND-CP was issued to move policy "mobilization and lending in gold" to relations "buy, sell gold", so the scope of the thesis of foreign exchange transactions of banks are in foreign currency On the basis of inheriting the concept of IBS and legal documents in Vietnam, concepts of IBS used in this thesis is the banking services related to foreign currency provided by banks 1.1.2 The role of international banking services In conditions of an open economy, the liberalization of trade and finance, the demand of IBS will develop increasingly towards combining harmoniously between the interests of customers with the benefit of banks and bring benefits to the economy 1.1.3 The international banking services of banks IBS includes the following services: foreign exchange services, international payment services, foreign currency lending services, international card services, correspondent banking services 1.2 Operational efficiency of commercial banks 1.2.1 The concept of operational efficiency of commercial banks Efficiency in economy is consided the level of success that the production units or banks achieved in the distribution of inputs to optimize outputs, reflecting the level of use of resources (human, financial and material resources, capital) to achieve defined goals (Nguyen Khac Minh, 2004) 1.2.2 The methods of evaluating the operational efficiency of commercial banks The present studies in the world analyzes about OE usually use two main methods are: financial indicators and marginal efficiency 1.2.2.1 The method of using financial indicators To evaluate OE by financial indicators of commercial banks, the two indicators most often used as ROA and ROE Besides two profitable indicators of business, OE of banks is also reflected by indicators on the marginal income ratio 1.2.2.2 Marginal efficiency analysis method The research using DEA method, DEA’s results includes: technical efficiency (TE) or whole TE, pure technical efficiency (PTE) and scale efficiency (SE) 1.3 The relationship between international banking services and OE of banks IBS can not stand individually that can only grow well in horizontal and vertical linkages with other services of banks, together with support and the rise of mutual control In terms of the nature and history of the development, IBS is always a useful part, tied to domestic banking services and created the entire business operations of a bank IBS is an integral part of the banks' business activities and the development of IBS will impact on OE of banks certainly and effectively Therefore, the study of the impact of IBS to OE is truly meaningful and essential 1.4 The studies of IBS and OE in Vietnam and abroad, gaps in research in Vietnam 1.4.1 The studies published in Vietnam With the in-depth studies on IBS in Vietnam, the authors only just at the described statistical or inductive, deductive method without qualitative research and quantitative research to study specially about OE and IBS Overall, through the studies of OE of banks could judge by the financial indicators such as ROA, ROE or using non-parametric methods as DEA OLS regression model or Topit often used for studies analyzes the factors affecting banks' OE There have been a number of separate studies on the impact of a banking service or specific indicators of banks, such as bad debt, non-credit services, income diversified levels for banks’ OE but which IBS’ research does not have a domestic research use quantitative methods to examine the impact of IBS to OE 1.4.2 The quantitative studies published in other countries Through surveys of researchs in the world, the author found that the most researchs used DEA methods to estimate OE when applying analytical methods of marginal efficiency, Pooled OLS regression method, FEM, REM also used to analyze the factors affecting OE in the studies This demonstrates the superiority of the DEA and regression methods in assessing the overall picture of the banks’ OE in each country 1.4.3 Some problems existed in studies The study is based on previous studies and has some new features based on the following grounds: (1) Economic integration to create conditions for the banking system and the development of banking services as Claessens (2009), Sufian (2011) (2) Diversification of banking services both domestic banking services and IBS will help banks maximize profits (Chiorazzo et al, 2008; Gurbuz et al, 2013; Vo Xuan Vinh et al, 2015 and Nguyen Thi Canh et al, 2015) (3) The fact that there are many studies on the impact of banking services to OE but still not have any projects in Vietnam and around the world gives a quantitative model of the impact of IBS to OE of commercial banks Thus, this thesis will be the difference compared with the previous studies on the content of research and the research model when using Pooled OLS regression model, FEM, REM, FGLS to assess the impacts of IBS to OE period 2008-2014 Thereby, this is the perfect basis for a rational policy framework of the operating management of banks in Vietnam during the integration period 10 In 2008, non-interest income reached average value 542 billion In 2009, the central bank's efforts to deal with the impact of the global economic crisis, Vietnam's economy has been gradually recovering, the stock market has gradually developed a more upbeat, average non-interest earnings increased to reach 667 billion, but the average interest income decreased to 4.785 billion, this was the year that the average interest income is lowest in period 2008-2014 2.2.2 Profitability of VCB The most important index reflecting business efficiency and profitability ratios of banking sector is ROA, ROE, NIM ROA, ROE of banks decreased over the years; especially ROE, ROA of 2013 is 5,46% and 0,54% respectively 2.3 Reality of international banking services of VCB 2.3.1 The legal basis of international banking services in Vietnam The specific laws governing each IBS adhere mainly by laws of State bank of Vietnam (SBV) issued and the international practice by the International Chamber of Commerce issued International Chamber of Commerce is a highly reputable non-governmental organization in the field of international trade and finance has issued a number of rules governing trading in IBS such as UCP, URC, URR, URDG, Incoterms 2.3.2 Some mainly international banking services of VCB 2.3.2.1 Currency trading services Since appearing, the derivative currency services in Vietnam has been growing very modestly with the pilot program of the central bank A number of complex derivative products have appeared but very limited and operate mostly by foreign banks in Vietnam 11 2.3.2.2 International payment services VCB are growing network of correspondent banks constantly serving international payments in order to meet the needs of customers However, compared to the system of some correspondent banks by foreign banks in Vietnam may find their superior advantages With this reality, many VCB searched the area of business in other country in line with standards and its resources 2.3.2.3 Factoring services Realizing the necessity of factoring business for Vietnam enterprises, dated 09.06.2004, SBV has issued regulations on factoring activities for CI prescribed 1096/2004/QĐ-NHNN The introduction of this legislation was created CI’s motivation initially and development of factoring services And it was early 2005, factoring services deployed in Vietnam officially 2.3.2.4 Correspondent banking services For overseas markets, the Vietnam banking brands are only known in some markets such as Laos, Cambodia, Myanmar Therefore, development of IBS overseas is now difficult because VCB have not really a strong brand, which is not known to the world market 12 CHAPTER 3: RESEARCH METHOD 3.1 Qualitative research 3.1.1 The purpose and methodology In this study, 10 experts (in particular in Annex 1) have discussed with the author bilaterally to review and make new discoveries about the indicators reflecting IBS in Vietnam The discussion was conducted to clarify the following issues: - The definition of IBS of commercial banks in Vietnam - The importance of IBS in Vietnam - The impact of IBS to OE of commercial banks in Vietnam - Identify and assess IBS in Vietnam currently - Defining IBS’ indicators for evaluation of commercial banks in Vietnam 3.1.2 Qualitative research results Based on the concept of IBS used unitedly in the study and based on indicators reflected in the accounting balance sheet and income statement of VCB, experts offer the two most common evaluation unified indicators for IBS as follows: Indicator 1: Foreign currency loans to the total foreign currency assets ratio Indicator 2: Foreign currency liabilities to total liabilities and capital ratio 3.2 Quantitative research 3.2.1 Research data To implement the research, the author has collected data on financial statements or annual reports of 38 VCB period 2008-2014, the Vietnam macroeconomic data such as economic growth, inflation rates are collected from the General Statistics Office 13 3.2.2 Description of the studied variables 3.2.2.1 For operational effeciency research of VCB Input variables: includes interest expenses (X1), wage costs (X2) and other expenses (X3) Output variables: consists of interest income (Y1) and other income (Y2) 3.2.2.2 For studying the impact of international banking services to operational efficiency of VCB - Dependent variables: technical efficiency (TE), pure technical efficiency (PTE), scale efficiency (SE) - Independent variables includes: the total foreign currency loans to foreign currency assets ratio (FLFA) and foreign currency liabilities to total liabilities and capital ratio (or foreign currency liabilities on total assets (FLTA)) - Control variables includes: equity to total assets ratio (ETA), the size of bank assets (SIZE), loans to total assets ratio (LTA), deposits to loans ratio (DTL), economic growth (GDP), rate of inflation (IFL) 3.2.3 Research model and hypotheses Model 1: TE = ε + β1*FLFA + β2*FLTA + β3*ETA + β4*SIZE + β5*LTA + β6*DTL + β7*GDP + β8*INL Model 2: PTE = ε + β1*FLFA + β2*FLTA + β3*ETA + β4*SIZE + β5*LTA + β6*DTL + β7*GDP + β8*INL Model 3: SE = ε + β1*FLFA + β2*FLTA + β3*ETA + β4*SIZE + β5*LTA + β6*DTL + β7*GDP + β8*INL 14 Table 3.4: The research hypothesis Hypothesis Hypothesis Content There are same or opposite correlations between FLFA and TE of banks Hypothesis There are same or opposite correlations between FLTA and TE of banks Hypothesis There are same or opposite correlations between FLFA and PTE of banks Hypothesis There are same or opposite correlations between FLTA and PTE of banks Hypothesis There are same or opposite correlations between FLFA and SE of banks Hypothesis There are same or opposite correlations between FLTA and SE of banks Source: Compiled by the author 3.2.4 Research methods and testing Research on DEA method to analyze OE which will determine TE, PTE, SE of VCB period 2008-2014 by DEAP 2.1 software Next, research used panel data is regressed with ways: Pooled OLS, FEM, REM, FGLS by Stata 11.1 15 CHAPTER 4: RESEARCHING INTERNATIONAL OPERATIONAL BANKING THE IMPACTS SERVICES EFFICIENCY OF OF TO VIETNAM COMMERCIAL BANKS 4.1 Researching the operational efficiency of VCB 4.1.1 Describing statistics the sample data variables Number of banks studyding are not equal over the years, number of banks in 2008 is 35, in 2009 is 36 banks because Baovietbank were established in this year and 2010, 36 banks were also studied In 2011, there are 35 banks under study because could not be collected data of Tienphongbank and number of banks in 2012 is the same as 2011 In 2013, there were 34 banks in studying and in 2014, the research could study 31 banks 4.1.2 Results of the OE estimation of VCB by DEA 4.1.2.1 Results of TE estimation by DEACRS The average TE of the samples over the years 2008, 2009, 2010, 2011, 2012, 2013, 2014 is 0,862; 0,917; 0,893; 0,946; 0,943; 0,931; 0,92 respectively, this shows that TE of Vietnam commercial banks have reached only 86,2% in 2008; 91,7% in 2009; 89,3% in 2010; 94,6% in 2011; 94,3% in 2012; 93,1% in 2013 and 92% in 2014 4.1.2.2 Results of PTE estimation by DEA VRS The average PTE over the years 2008, 2009, 2010, 2011, 2012, 2013, 2014 is 0,918; 0,959; 0,938; 0,966; 0,971; 0,951; 0,94 respectively This suggests that PTE of VCB is only 91,8% in 2008; 95,9% in 2009; 93,8% in 2010; 96,6% in 2011; 97,1% in 2012; 95,1% in 2013 and 94% in 2014 16 4.1.2.3 Scale efficiency of VCB the period 2008-2014 The average SE over the years 2008, 2009, 2010, 2011, 2012, 2013, 2014 is 0,939; 0,956; 0,952; 0,979; 0,972; 0,979; 0,98 respectively This shows that SE of VCB is 93,9% in 2008; 95,6% in 2009; 95,2% in 2010; 97,9% in 2011; 97,2% in 2012; 97,9% in 2013 and 98% in 2014 4.1.2.4 The estimation results of Malmquist index The average total factor productivity (TFP) index change in period 2008-2014 was 0,971 (less than 1) means a decline of 2,9% in the TFP in years The cause of this decline is due to changes in technology factor fell by 4,2% despite improvements in the technical efficiency change (up 1,3%) but lower than the decline of technological factors during this period 4.2 Experimental study the impacts of international banking services to operational efficiency of VCB 4.2.1 Descriptive statistics of the variables Data are presented as descriptive statistics, each variable described as: variable name, number of observations, the minimum value, maximum value, average value, standard deviation from which conduct a general analysis of the variables included in models 4.2.2 Correlated coefficient results between variables Correlated analysis was used to examine the relationship between the independent variables and the dependent variables Correlated analysis results can assess the model's forecasts initially Also, in the case of the independent variables have high correlation, this is a sign of multicollinearity, so this is a basis for the multicollinearity accreditation for the author to adjust models 17 4.2.3 Multicollinearity inspection results The correlation coefficient between the independent variables are less than 0,8 which shows that the possibility of multicollinearity phenomenon is low as regression analysis 4.2.4 Research results for the dependent variable TE 4.2.4.1 Selection and testing the regression models for dependent variable TE For the sample whole banks: Through the F-test (P-value = 0,0000) and Hausman test (P-value = 0,0782), the model was selected as REM However, when testing the variance change (Pvalue = 0,0000) and the autocorrelation (P-value = 0,0016), the model have variance change phenomenon and autocorrelation To correct the variance change and autocorrelation, regression model is selected FGLS for studying the whole sample banks For the sample banks group 1: Through the F-test (Pvalue = 0,0478) and Hausman test (P-value = 0,8323), the model was selected as REM However, when testing the variance change (P-value = 0,2140) and the autocorrelation (P-value = 0,0184), the model has autocorrelation phenomenon To overcome the autocorrelation, regression model FGLS selected for banks group For sample banks group 2: Through the F-test (P-value = 0,0000) and Hausman test (P-value = 0,6646), the selected model is REM However, when testing the variance change (P-value = 0,0000) and the autocorrelation (P-value = 0,0041), the model have variance change phenomenon and autocorrelation To correct the variance change and autocorrelation, regression model FGLS is selected for banks group 18 4.2.4.2 Discuss the results of research and hypothesis testing for the dependent variable TE FLFA variable have opposite impact to TE with statistical significance at 5% for banks group and no statistical significance for the whole sample banks and banks group show that the increase in foreign currency lending will not bring greater efficiency to the banks group 1, which banks have foreign currency lending to total loans significantly Based on the findings above, we reject the hypothesis for the whole sample banks and banks group because the regression coefficient is not statistically significant, accept the hypothesis for the sample is banks group FLTA have the same impact to TE with the whole sample banks and banks group at statistical significance 5% and 10% respectively FLTA have positive correlation suggests if banks use foreign currency funds mobilized well will increase OE, create more investment opportunities for banks Based on the results above, we reject hypothesis for banks group due to the regression coefficient is not significant statistically, accept hypothesis for the whole banks and banks group 4.2.5 Research results for the dependent variable PTE 4.2.5.1 Selection and regression models testing for dependent variable PTE For the whole banks: Through the F-test (P-value = 0,0000) and Hausman test (P-value = 0,2888), the model was selected as REM However, when testing the variance change (Pvalue = 0,0000) and the autocorrelation (P-value = 0,0023), the model have variance change phenomenon and autocorrelation To correct the variance change and autocorrelation, regression model is 19 selected FGLS for the whole sample banks For the sample banks group 1: Through the F-test (P-value = 0,0010) and Hausman test (P-value = 0,0683), the model is selected as REM However, when testing the variance change (Pvalue = 0,0173) and the autocorrelation (P-value = 0,0555), the model have variance change phenomenon To correct the variance change, FGLS regression model is selected for banks group For the sample banks group 2: Through the F-test (P-value = 0,0000) and Hausman test (P-value = 0,4242), the selected model is REM However, when testing the variance change (P-value = 0,0000) and the autocorrelation (P-value = 0,0038), the model have variance change phenomenon and autocorrelation To correct the variance change and autocorrelation, regression model FGLS is selected for banks group 4.2.5.2 Discuss the results of research and hypothesis testing for the dependent variable PTE FLFA variable have opposite impact to PTE but no statistical significance Therefore, hypothesis is rejected However, this result shows foreign currency lending of banks does not bring well to OE of banks demonstrate that management of the risks of foreign currency lending activity is not good FLTA have same impact to PTE of the whole sample banks and banks group were at 5% significance level FLTA have positive correlation suggests if banks use foreign currency funds mobilized well will increase OE, create more investment opportunities for banks With this result, we accept hypothesis for the whole sample banks and banks group 1, reject hypothesis for banks group Banks group 1’s regression coefficient is higher than 20 the whole sample banks demonstrates with management ability, the banks group raises deposits in foreign currencies as much as it will increase OE 4.2.6 Research results for the dependent variable SE 4.2.6.1 Selection and regression models testing for dependent variable SE For the whole sample banks: Through the F-test (P-value = 0,0000) and Hausman test (P-value = 0,0002), the model is selected as FEM However, when testing the variance change (P-value = 0,0000) and the autocorrelation (P-value = 0,0377), the model have variance change phenomenon and autocorrelation To correct the variance change and autocorrelation, regression model is selected FGLS for the whole sample banks For banks group 1: Through the F-test (P-value = 0,0010) and Hausman test (P-value = 0,2865), the model is selected as REM However, when testing the variance change (P-value = 0,3333) and the autocorrelation (P-value = 0,0709), the model have no changing phenomenon variance and autocorrelation So REM regression model is selected for banks group For banks group 2: Through the F-test (P-value = 0,0020) and Hausman test (P-value = 0,8692), the selected model is REM However, when testing the variance change (P-value = 0,0046) and the autocorrelation (P-value = 0,1910), the model have variance change phenomenon To correct the variance change, FGLS regression model is selected for banks group 21 4.2.6.2 Discuss the results of research and hypothesis testing for the dependent variable SE FLFA have impact negatively on the whole sample banks and the banks group demonstrates that the increased activity of foreign currency loans not increase SE In contrast, for the banks group when increasing foreign currency lending will increase SE However, this result is not significant statistically, so hypothesis should be rejected FLTA have impact negatively on the whole sample banks and the banks group demonstrates that the increased activity of foreign currency deposit mobilization does not increase SE In contrast, for the banks group 2, when raising foreign currency deposit mobilization will increase SE However, this result is not significant statistically so hypothesis should be rejected 22 CHAPTER 5: DEVELOPMENT SOLUTIONS OF INTERNATIONAL BANKING SERVICES TO IMPROVE THE OPERATIONAL EFFICIENCY OF VIETNAM COMMERCIAL BANKS 5.1 Development orientations for developing IBS to improve OE of VCB in conditions of integration - The strong need for innovation of VCB in organizational models, expanding transnational activities and can gradually established a number of financial conglomerates; expanding dealer relations, business cooperation, product development, application and transfer of technology with foreign financial institutions - SBV implement monetary policy effectively, actively: operating exchange rates and interest rates in sync with the development of the money market consistently with international practice and the practical conditions of Vietnam, bonding closely exchange rate and interest rate management 5.2 Solutions for developing IBS to improve OE of VCB 5.2.1 Expanding foreign currency deposits of banks According to research results, FLTA variable have correlated positively with TE and PTE, this result demonstrates that banks should increase in foreign currency deposits to enhance OE To improve the ability to mobilize in foreign currency, in addition to a reasonable interest rate policy, VCB should consider operation scale through branches are allocated according to appropriate geographic area nationally as well as countries in the region 5.2.2 Foreign currency credit restriction According to research results, FLFA have opposite relationship with TE for banks group which have large foreign 23 currency loans The study results are correct completely according to the policy of the current foreign currency lending by SBV Limiting and eventually eliminating foreign currency credit can be carried out according to a schedule to be determined in two stages, restrictions on foreign currency lending firstly, then remove the foreign currency credit completely transfer into foreign currency trading relations 5.2.3 Improving the quality and diversification of IBS With foreign currency deposit raised, in order to maximize profits required commercial banks to use these funds for other IBS diversification as develop foreign exchange business, international payment services, international card services and correspondent banks 5.2.4 Perfecting, innovating technology and qualitying banking human resources IBS should have a modern infrastructure system with advanced technology Staffs sales IBS directly need high expertise in their respective fields, foreign language proficiency, work experience, professional ethics 5.3 Recommendations to the State bank and the Government 5.3.1 Derivative currency market development SBV should study to issue derivative currency instruments trending relevant international integration of Vietnam economic condition in each period 5.3.2 Exchange rate management SBV should build a flexible exchange rate mechanism, exchange rate policy should be developed in favor of the float in order to reflect market fluctuations 24 5.4 Some limitations of the study and subsequent research Due to limited access to further data bank, research scope is quite broad, so this thesis requires further research on this following directions: a longer studying period; adding missing variables not included in the model studies to increase the level of explanation of the model; increase the number of input variables, output of DEA models CONCLUSION Thesis: "Researching the impacts of international banking services to operational efficiency of Vietnam commercial banks" is a new, deep study of theoretical issues and practical field of IBS’s impacts to OE of commercial banks applied to the assessment for period 2008-2014 with 38 VCB Based on the evaluation combination of banks’OE by DEA and offer models based on regression analysis reflects IBS’s factors such as foreign currency lending on total foreign currency assets ratio, foreign currency liabilities to total assets ratio, the thesis have been raised in these factors which have a strong impact on the OE of VCB, thereby helping to find solutions for bank’s governance are more favorable With the results obtained, the thesis draws a number of solutions to improve OE and develop IBS of VCB to suit current requirements and innovation trend of international economic integration, in particular such as: restrictions on foreign currency lending activities, development activities in foreign currency deposits, expansion, strengthening financial banking technological capicity, operational modernization, scale developing human resources, improvement and diversification of other IBS ... 1.4 The studies of IBS and OE in Vietnam and abroad, gaps in research in Vietnam 1.4.1 The studies published in Vietnam With the in-depth studies on IBS in Vietnam, the authors only just at the... banks in Vietnam during the integration period 8 CHAPTER 2: REALITY OF OPERATIONAL EFFICIENCY AND INTERNATIONAL BANKING SERVICES 0F VIETNAM COMMERCIAL BANKS 2.1 Business operation of Vietnam commercial... reflecting IBS in Vietnam The discussion was conducted to clarify the following issues: - The definition of IBS of commercial banks in Vietnam - The importance of IBS in Vietnam - The impact of