REALITY AND SOLUTIONS FOR LENDING TO INDIVIDUAL CLIENTS AT VPBANK – CAU GIAY BRANCH

Dinh Kieu Trang CQ47/51.03 INTRODUCTION Rationale In recent years, the Vietnamese banking system has radically changed organizational structure, operating mechanism and professional Banks diversify their activities to meet the needs of international economic integration In this context, lending to individual clients is interested by both joint-stock commercial banks and state-owned commercial banks in Vietnamese banking system However, the market for loans to individual clients is still small and is not fully exploited by commercial banks Joint-stock commercial VPbank, Cau Giay branch was found early in Hanoi In recent years, branch has achieved fairly good performance and contributed significantly to the success of the VPBank system Lending to individual clients of VPBank - Cau Giay branch was deployed successfully with a variety of product; outstanding debt to individual clients was large and occupied high proportion of total outstanding debt of VPBank - Cau Giay branch However, when compared with the total outstanding debt to individual clients of VPBank system or with total outstanding debt to individual clients of the whole banking sector in Hanoi, outstanding debt to individual clients of VP Bank - Cau Giay branch was still small, not commensurate with the potentiality of the market, also with the position of VPBank Aware of this issue, to be able to learn more this field and combine the learned knowledge in school to the real, I choose the subject “Reality and solutions for lending to individual clients at VP Bank - Cau Giay branch” for my graduation thesis Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 2 Aims and subject of study In all business activities of banks, lending activity can be considered as the most significant and also the most risky activity which requires banks to be vigilant in management Therefore, the analysis and evaluation of the bank's lending activity is essential This research will help comprehend the theory of lending operations On this basis theory, a thorough and fact-finding study on lending to individual clients at VPbank - Cau Giay branch will be conducted Through this study, we will understand development of lending activity to individual clients and also the difficulties and advantages of banks in the development of this activity from which proposes a number of measures to get better results in credit activity Subject of this thesis is reality of lending to individual clients at joint-stock commercial VPbank, Cau Giay - Ha Noi branch, then find solutions to help banks overcome difficulties and develop this activity Scope of study This thesis will focus on analysis and evaluation of individual lending activity, especially sales of loans, debt collection, outstanding debt, and delinquent debt… which took place from 2010 to 2012 at VPBank Cau Giay Hanoi branch Methodology To complete my graduation thesis, besides the knowledge acquired in school, I used some methods They are gathering data and interviewing I gather data from reports of VPbank and Cau Giay branch They are income statement, balance sheet, and statement of cash flow… From these Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 documents, I receive information, figure of mobilization, lending, credit activity, and business result of VPBank and Cau Giay branch Moreover, to have basic knowledge about credit and lending activity as well as, I collect document of law of credit, magazines on economy, and figures about inflation rate, profit of bank system After gathering data, I using absolute, relative comparison to compare and evaluate data, figure over years or selected years Secondary method which I used is interview This interview is conduct in VPBank –Cau Giay branch I interview Mr Nguyen The Dan – manager of credit department - to understand regulations and procedures in lending to individual clients, reason for fluctuation of sale, profit, debt, nonperforming loans (NPL) … Structure of study In addition to introduction and conclusion, the main content of the thesis consists of three chapters: Chapter 1: Overview of lending to individual clients Chapter 2: Reality of lending to individual clients at VPbank, Cau Giay branch Chapter 3: Scalable solution for lending to individual clients at VPBank, Cau Giay branch Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 CHAPTER OVERVIEW OF LENDING TO INDIVIDUAL CLIENTS 1.1 The definition 1.1.1 The definition of commercial bank As the commodity production had grown, the economy also appeared people who hold a temporary fund and people who need money for business Under the circumstances, in the second half of the 16th century in Europe, the first bank that formerly was known as usury organization was born At this time, the Bank just kept and lent money Along with the continuous development of economy, the operation of the commercial banks have also been strengthened and improved Peter Rose defined commercial banks as follows: “Bank is a financial institution providing a list of the most diversified financial services - especially credit, savings and payment services – and perform more financial functions than any business institution in the economy” And in Vietnam, according to the Law on Credit Institutions, the legislature defines “A banking operation is a monetary business operation or a banking service of regularly taking deposits and using such deposits for granting credit and providing payment services” 1.1.2 The concept of lending activity of commercial banks In the book “Modern Banking”, David Cox stated that: “Most professional activities of commercial banks are called banking service or foundations for developing such service” and lending is main service Provision - Article Decision 1627/2001/QD-NHNN on the regulation of lending by credit institution to clients also provide that: “Lending means a form of extension of credit Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 whereby a credit institution provides a client with an amount of money to be used for a certain purpose and within a fixed period of time as agreed on the basis of the principle of repayment of both principal and interest” Based on the balance sheet of commercial banks, we find that loans always accounted for the largest proportion of the total assets of the bank They also are items which bring the highest income to the bank But risk in banking activities often focuses on the lending activity The loan is a liability to borrowers but is an asset to the bank Loans are less liquid than other bank’s property because they can not be converted into cash before the loan are maturity When a commercial bank grantees loan to the borrower, the borrower is on their own initiative - can repay loan to the bank ahead of time, in time or even extend for loan repayment On the other hand, commercial banks are only allowed to manage the loans that comply with the signed contract 1.2 Lending to individual clients activity 1.2.1 Definition of lending to individual clients If classifying by clients, lending activity includes lending to corporation, lending to financial institutions and lending to individual clients Because the object of this thesis is lending to individual clients of commercial banks, we will consider lending activity to individual clients Lending to individual clients is a form of bank’s financing for individual clients It is the economic relation in which the bank transfers to individual clients the right to use a sum of money with conditions agreed in the contract to Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 serve the purpose of the client (According to “nghiệp vụ ngân hàng thương mại” – Học viện Tài chính) 1.2.2 Characteristic of lending to individual clients According to Ph.D Nguyen Thi Mui, lending to individual clients has some characteristics (Nghiep vu ngan hang thương mai – Hoc vien tai chinh) Borrowers Borrowers are a person or a household They are small traders, farmers, handicraftsmen, tailors, mechanics, students, small manufacturing facility or a representative of the household (who have the legal capacity and civil act in the family) on behalf of the household to sign credit contracts, loan contracts and repay loan to the bank Loan size Lending to individual clients is usually small loan but amount of loan is very large So, the sensitivity of this group is very high, which requires banks to have a separate, suitable marketing strategy It brings the clients closeness, trust and peace Loan size often relies on the borrower but not collateral Purpose loan Purposes of lending to individual clients are various The different groups of income, age, gender, social status have different needs To low-income groups, their demand for credit is usually limited because they are very difficult in spending So they borrow to meet consumer demand To middle-income group, their credit demand has upward trend Although these people have financial resources, they really want to borrow to purchase better products Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 To high-income groups, their credit demand supports for their business, helps liquidity when their money tied up in long-term investments Lending interest Because the size of loans is small, borrowing cost is higher than other costs Moreover, this is a loan with high-risk, short-term, weak collateral … All of things create the form of loans with the highest interest rate in the commercial banks The interest rate of these loans is often 1.5 as high as other interest Therefore, the faster these loans develop, the higher profit the bank gains Term loans Loan purpose is for consumption of personals such as buying electronic machine, car, motor, house, land and small-scale production Therefore, value of loan is small but large amount At the time of making loans, clients not have ability of payment, but they soon have it in short-term or medium-term Because of these reason the term of the loans are mainly short-term, partly medium-term and little long-term 1.2.3 Classification of lending to individual clients 1.2.3.1 Base on purpose loan For business manufacturing purposes They are loans to carry out small business plans of household such as renting a shop, buying materials, buying machine… Characteristics of this loan are that term loan often is long-term, scale depends on the client's business plan, the risk of loan is very high, and this loan has the possibility of moral hazard For consumption purposes Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 Loans for consumption are used mainly for consumption purposes such as buying electronic machine, buying household goods… Object of this loan is personal (for consumption) and government (for expenditures) Characteristics of this loan are small, short-term, lower risk 1.2.3.2 Base on term loan Term loan is a period from when clients start receiving loan to when he/she repay the principal and interest which had been agreed in the credit contract between the bank and the clients (Frederic S Minshkin) Short-term loans Short-term loans are loans with the term of 12 months or less They are used to make up the shortage of working capital of individual clients, organizations and the short-term spending needs Medium-term loans According to the current regulations of the State Bank of Vietnam (SBV), the medium-term loan is loan with the term of over 12 months to 60 months These loans are often used for the purpose of purchasing fixed assets, improvements or renovation equipment, expansion production and business activities They are also used for small-scale new projects and rapid recovery of capital Long-term loans Long-term loans are loans with the term of 60 months or more Long-term credit is provided to meet the long-term needs such as buying house, land, equipment, transport means… 1.2.3.3 Base on payment methods Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 Lump-sum payment at maturity Lump-sum payment at maturity loans is loans to individuals and households to meet instant cash needs This loan only is paid once at maturity The size of the loan is relatively small They are usually short term, low risk and used to pay for the holiday, buying household or repairing auto motor… Installment Installment is short-term or medium-term loans paid in two or more times in succession (usually monthly or quarterly) This method is used to finance expensive assets such as cars, houses, lands or to finance the business plan Generally, these installments apply fixed interest rate, but floating rate is becoming more popular Credit card Credit cards as well as other card were quickly accepted Credit cards provide a revolving and regular credit that clients can use whenever they need Clients can take a lump sum payout or installment payout 1.2.3.4 Base on loan forms Direct lending Direct lending is loan in which bank and clients meet each other, face to face to conduct loans or debt collection Indirect lending Indirect lending is loan in which bank buy debts incurred by enterprises when they sell goods or provide services to their individual clients In this case, bank provides loans to individual clients through companies but not directly in contact with clients Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 10 1.2.3.5 Base on form of security Secured lending Collateral is real estate, estate which are funds or assets owned by clients Collateral create pressure to force clients to pay debt In the case clients can not repay the debt, the bank will sell these asset to reduce losses Unsecured lending Unsecured lending is lending based on reputation or third-party guarantee, not collateral Bank selects clients who have good reputation and good ability to repay loans to lend money Bank lends client money to meet the needs of clients on the basis of salary These loans are mainly small value, and short term 1.3 Factors affecting the expansion of personal loan 1.3.1 Subjective factors Lending policy of bank The bank's lending policy is a system of guidelines and regulations governing the lending activities made by the board in order to effectively use capital for businesses, organizations and households and individuals (Law on credit institution) The elements in lending policies have a strong impact on the expansion of lending in general and lending to individual clients in particular A bank can only expand lending to individual clients when having a clear goal of lending expansion On the other hand, if a bank provides available, various lending products to individuals, expansion is easier and more convenient Financial capacity and management ability of bank Graduation thesis English for finance and accounting Dinh Kieu Trang 38 CQ47/51.03 investment project, and not exceed the percentage of guaranteed rate (maximum 70%) It did not create an incentive with the clients with high income, good collateral, good social prestige, but having need of borrowing more money If the rules were more flexible, it would increase the income of banks without the risk Secondly, the structure of lending to individual clients loses balance Nowadays, consumer credit remained high proportion of lending structures (63.7% in 2010, 65.8% in 2011, and 66.2% in 2012), while trade credit accounted for low proportion (7.5% in 2010, 8.4% in 2011, and 8.8% in 2012) It made the effectiveness of lending reduce Thirdly, the borrower of lending to individual clients was limited Although the bank had diversified lending activities to individual clients though key products: auto loans, home loans, student loans, consumer loans and business loans, the needs of the clients grow, and diverse, these products did not satisfy clients’ demand Moreover, VPBank - Thang Long did not have the separate products for the lending to individual clients while the majority of commercial banks in Vietnam had this type of product Fourthly, the branch did not have a specific marketing strategy in personal loans Another limitation was lack of professional staff in the marketing According to To Khanh Toan – the author of Competitive capacity of Vietnam’s commercial bank in the international economic integration, Economic Research Magazine no 363, August 2008 – The immigration of foreign bank has many influences to Vietnam’s commercial bank One of these influences is the decrease of competitive capacity To against this situation, the bank must find ways to increase the competitive capacity of Vietnamese bank The most Graduation thesis English for finance and accounting Dinh Kieu Trang 39 CQ47/51.03 important factor to improve the competitive capacity is marketing strategy Marketing makes clients understand bank, their product and services If clients not know about bank, how they can make deposits and loans in bank? Because of this reason, a limitation of VPBank – Cau Giay branch is not having a good marketing strategy Fifthly, distribution channels were not diversified, efficient Trading methods and providing services mostly were direct transactions Electronic banking services had not been widely deployed A number of new banking technologies only worked in testing 2.3.2.2 Causes 2.3.2.2.1 Objective causes Socio-economic environment is not stable In recent years, although Vietnamese economy has grown at high speed, the inflation rate was high (10%) in 2010 The reason was the volatility of the global economy and the rise of gold, oil price, the glaciations of real estate market, and unreasonable monetary policy, which reduced the real income of the population In 2011, in Vietnam, inflation rate of food price was higher and more volatile than other countries According to the Ministry of industry and trade, in July 2012, food price increased up to 9.78% comparing with the end of 2011 The reason was the increase of bird flu as well as the consequences of wage increases In addition, the stock market and the real estate were in downward trend which purchased of lands and houses down (from 65.8% in 2011 down to 60.2% in 2012) Ph.D Nguyen Hoang Anh, in “Ảnh hưởng khủng hoảng kinh tế toàn cầu đến thương mại quốc tế Hà Nội” said that influence of Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 40 global economic crisis to Vietnam was most concentrated on banking sectors The economic came down recession making banks’ clients reduce demand for deposits and loans Therefore, the banks’ activities stagnated Environmental law Law system of lending to individual clients was not close and synchronous In Vietnam, we had a legal basis for lending activity to individual clients, but credit activities need a comprehensive law The management of the local government was not efficient Many clients can not immigrate even though they had been in Hanoi for a long time, which make the VPBank not lend to them The bank only lent clients who had permanent residence in Hanoi to easily debt recovery and debt control In Hanoi, progress of issuing Red Book was slow but VPBank only received mortgagee real estate had a Red Book, which reduced clients of the Bank Competition Because Vietnam is a developing country, the competition is very strict, especially in the banking sector When our country joint the WTO, most banks given the similar products and services creating increasingly fierce competition Moreover, the foreign joint venture banks offered many utility products and services having highly competitive Therefore, VPBank – Thang Long must compete not only with other bank such as ACB, Techcombank but also with the foreign bank 2.3.2.2.2 Subjective cause Process of lending to individual clients is complex Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 41 Because in the part, VPBank was tightly controlled by SBV, its credit process is very close, sometimes harsh Therefore, some clients choose to use services of other banks instead of VPBank VPBank – Thang Long does not particular strategy and method for advertising and marketing for its consumer products The marketing strategy promote general image of VPBank did not focus on any products The bank had not found its own market Furthermore, the bank did not exchange information, ideas with clients to know exactly what their needs Bank-technology is unmodern Most of the credit operations of the bank are based on documents management, which is very complex and time consuming Nowadays, VPBank has developed core-banking system and issued its own credit card It will be a big step in the implementation of the Bank's services as well as how to create a competitive advantage for Thang Long in approaching clients The quality of human resources is not high Credit officers are highly qualified, but their career is quite young (average year) So, they lack practical experience, which led to unwise decisions in sensitive or difficult situation Because the assessment the client is complex and difficult, only staff with understanding psychological as well as experience and professional qualification has ability to assess their clients and make right decisions Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 42 CHAPTER EXPANSION SOLUTION FOR LENDING TO INDIVIDUAL CLIENTS AT VPBANK –CAU GIAY BRANCH 3.1 Development plan for lending to individual clients in the next year 3.1.1 The Bank's operations in 2013 The first direction of the bank is NPL ratio at less than one percent in order to standardize the operation of the Bank The bank improves the quality of mobilized capital, loans; strengthens debt collection; and sets regularly up risk reserves Secondly, the bank enhances development of services; especially the card services and cash transaction Currently, VPBank’s profit is mainly from credit activity, which is not consistent with the development of a modern bank So, the development of services is indispensable in integration process It helps raise revenue for banks, as well as distribute and minimize risk In upcoming time, VPBank will issue more cards with the brand's VPBank It can lead to some limitations in linking with the big banks or the bank using their cards On the other hand, it will enhance prestige and position of VPbank in market and in Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 43 competition, which creates long-term advantages for VPbank to promote their image and attract other small banks in its network In money transfer, VPBank has become the official agent of the money transfer world’s largest organization (western-union) along with two other major banks - ACB and BIDV, which clearly represents prestige of VPBank in cash transaction It creates conditions to attract clients and to improve the quality of its services VPbank promotes card services and ATM system in nationwide The Bank are striving for the top three bank having the best card services in the end of 2013 The bank has also focused on retail products, loans for consumer and products for small and medium businesses The bank will raise charter capital to 6000 billion at the end of the year to compete and expand their network It allows bank lend bigger loans, gain more profit, and ensure the capital adequacy ratio (CAR) in international standards (8%) Moreover, VPBank’s sale of shares to foreign banks (OCBC Bank) to increase charter capital will receive technical assistance, staff training, services implementation, as well as management experiences, especially retailer experience to take VPBank in the leading position in Vietnam VPBank develops core - banking system Electronic network of bank is currently not good Although, it can connect branches, it is still inconsistent and incomplete Therefore, it limits the ability to develop service products meeting client demand Branches have been dependent on headquarter in posting, cash transactions and payment, as well as offering its own best strategy Development of core-banking system will help banks implement the most modern payment methods like phone-banking, internet-banking, e-banking area It also helps Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 44 clients save time, easily make transaction The bank can attract clients far from the bank, exploit and carry out online services Besides, it is easy for bank in records management, client information, client evaluation… The bank exploites the features of the new software (T24) to develop modern products and services (Internet Banking, SMS Banking and other products and services) to serve clients The next task is strengthening marketing, promoting bank’s image In modern business strategy, the image of company is very important; its value may be greater than the value of total fixed assets Businesses with good brand can sell more products and higher prices, easily penetrate into new markets In the past, the bank did not pay attention on marketing, because they thought that there were no need marketing activities in baking But this has completely changed in recent years when the bank reliesed that the bank’s image greatly contributes to its success Now, VPBank’s image is not widely known As a result, with the same quality product, VPBank gains less profit than other banks Therefore, the task of 2013 is to enhance the image of the VPBank through measures such as advertising on television and media mass, increasing funding for good television broadcast and reality TV shows Besides, the bank also actively researches new products in order to create bank’s reputation because when they deploy a new product that easily makes impression of clients Therefore, the 2013 plan of VPBank is building the close and friendly image in public VPBank increases investment in real estate A promising new strategy is investment in office for rent Nowadays, VPBank owns land at Ham Nghi Street (known as Bank Street in Ho Chi Minh City) on which the bank can build a Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 45 building for hire It will not only brings significant revenue, but also creates the credibility for VPBank VPBank also expand their network Expanding network is an indispensable strategy, it will help banks exploit resources deposits and borrowers in everywhere, create conditions for effective, diverse and quick payment services and money transfers However, to open the new branch, the bank must satisfy the conditions of SBV with the aim of curbing the massive branch open Besides the bank should consider opening new branch in where to achieve effectiveness In the next time, VPBank will open branches in the big economic centers such as Binh Duong, Vung Tau, Dong Nai The bank also focuses on human training, expands relationships with other banks VPBank has completed the sale of shares (5%) for OCBC bank in the first quarter of 2013 and accepted new technology transfering (TOT) from OCBC to improve its competitiveness They promote cooperation in training between Vietnam and Singapore to create long-term officers for VPBank 3.1.2 Development plan for lending to individual clients in 2013 In 2012, lending to individual clients activity brought significant profit to the VPBank - Thang Long, but this works only meets a small part of clients’ need It means the market is potential It is an opportunity for VPBank to develop lending to individual clients as well as occupy market share of this type of loan With the target for becoming the leading retail bank in Vietnam, VPBank pays attention on lending to individual clients VPBank will focus on exploiting individuals in middle class, who have a stable income and high demand for Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 46 loans Besides, the bank also seeks opportunities to meet consumer needs of the poor because they accounts for the largest proportion of Vietnam's population Especially, the bank is concerned with individuals and households having small business with feasible plans VPBank will increase the proportion of lending to individual clients in lending structure Lending to individual clients brings more profits than other types of loans The bank promotes fast, safe and convenient package services, improves client policies and deployes marketing strategies to attract more clients The bank also modernizes facilities to convenient for clients in payment, records management, and lending procedures 3.2 Some extend solutions for lending to individual clients at VPBank Thang Long 3.2.1 Expanding object of lending to individual clients Mr Nguyen The Dan also said that clients of lending to individual clients are mainly people with high and stable income, those having permanent residence in Hanoi which accounts for small proportion of total population in Hanoi Therfore, the bank need extend lending regulations to find new clients Branch should attract clients with low income by reducing interest rate, providing support services, taking a the flexible repayment period, and developing unsecured loans, especial for state officials Unsecured loans for state officials was uesed been applied, but it did not bring the good results due to many reasons such as the inadequate legal framework, their low income But in this situation, it is time to implement this program Lending to these clients is quite safe; it does not cause significant changes in the risk structure of bank Besides, the bank should apply indirect lending to individual clients through Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 47 retailers (who will offer goods that clients want to buy) This activity not only extends clients for banks but also reduces management cost, debt recovery cost, strengthens relationships between bank and retailers The bank should implement loans through representatives Representatives may be the unions, cooperatives, who clearly know clients’ situation therefore it will reduce the time, costs and risks For example, the bank can lend officials under the guarantee of their leader And the bank can collect debt through monthly salary deduction Finally, the bank should lend clients who not have permanent residence in Hanoi but steady job, or those who have the financial resources but can not prove However, clients need have collateral or the prestige organizations, individuals, and guarantees 3.2.2 Developing new products and services for consumer loans From researching clients’ needs, the bank develops new product consumer loans, such as loans for oversea education, loans for buying household goods Besides, the bank also carry out the modern transaction based on internet, phones It will save time and costs as well as offer better opportunities for clients The development of new products should be based on economic situation, the appearance of new goods on the market, consumer tastes of the people Now, VPBank has some services for individual clients such as household business loans, personal overdraft loans, trust loans for staffs and managers, personal home loans, personal car loans… However, the bank does not have modern technology products with low cost and flexible transaction such as ATM, internet banking, home banking, PC Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 48 banking, mobile banking Therefore, the development of new products is essential and appropriate in current consumer trends 3.2.3 Promote the Bank's marketing The bank should implement marketing campaigns which not only promotes bank's image, but also introduces products and services of the bank, along with its advantages So, the bank need identify target clients, conduct advertising on mass media, and contact with reputable organizations such as trade unions in the companies, society organizations VPBank should provide the services at home, guide clients to use services, provide information relevant to interest rate, term, repayment… In addition, the bank should clearly analyze competitors to offer appropriate solutions 3.2.4 Expanding the branch network of the Bank To attract and serve the client, VPBank Thang Long extends the secondary branches, as well as enhances the role and function of these branches These branches should be located in residential districts with high standard of living, or in large retail companies Opening more branches, the bank will take advantages in transaction, clients’ attraction, bank’s products and services VPBank Thang Long has branches, transaction offices at Doi Can, Yen Hoa, Lang Thuong… , which to meet growing consumer demand in economic development, and rapid urbanization 3.2.5 Focus on human resource development Human resources are one of the key factors determining the success or the failure of any bank The first thing to reform technology is training staffs to adapt this technique To achieve high efficiency in provision credits, staffs Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 49 should have capacity assessment, good decision-making, responsibility, as well as professional ethics Nowadays, VPBank’s staffs are too young (about year), they need be trained and monitored regularly To meet the increase of workload, and network expansion, VPBank should select carefully officials who have higheducation, actual knowledge In addition, the bank should have good salary, benefits policy to encourage and retain old staffs and attract new ones 3.2.6 Improving technology and facilities of the bank Banking technology is one of key factors of competitiveness of the bank In addition, the facilities will make the client trust in bank to make deposits and loans It also create convenient in the transaction With plans to develop corebanking in 2013, the bank should develop modern transaction such as homebanking, internet-banking, and phone-banking to satisfy clients’ needs, shorten time evaluation, and increase labor productivity 3.2.7 Improving credit policy Credit policy is regulation and direction regarding lending activities of bank A good credit policy will take advantages to lending transactions, extension borrowers, exploitation of the market, as well as developing lending products So to develop lending activities, the bank need improve credit policies Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 50 CONCLUSION Improving living standards for the people, bringing large income to the bank by diversification and improvement of products and services, helping the government implement policies… are the benefits that lending to individual clients brings Therefore, the expansion and development of lending to individual clients is not only the want of commercial banks, the requirements of economic and social development, but also the aspirations of the people With the study of lending to individual clients at VPBank –Cau Giay branch based on methods of scientific research, combined with the fact the VPBank – Cau Giay branch, the article mentioned three problems The first chapter is system of basic literal review of lending to individual clients, in which highlights the forms, activities of commercial bank, characteristics, classification and factors affecting lending to individual clients The second issue is the situation of lending to individual clients of VPBank –Cau Giay branch on the basis of analysis of data and figure collecting from finance report of branch and other data from general statistics office, as well as analysis the gain, drawbacks and its causes of branch Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 51 The third one is some solutions to promote lending activities to individual clients at VPBank –Cau Giay branch Because of time limit, the graduation thesis does not research thoroughly and has errors I am looking forward to the comments of the teachers and the friend to complete my graduation thesis better and better REFERENCES National Legislations The law on the State Bank of Vietnam (1997), amendment 2003 The law on credit institutions (1997), amendment 2003 Documents under law include: Documents enforced by the government, those enforced by State Bank of Vietnam Monographs Cox D (1997) “Modern Banking”, Politics Publishing House Frederic S Minshkin (1995) “The economics of money, banking, and financial markets”, HarperCollins College Publishers, New York Peter S Rose (1999) “Commercial Bank Management”, Irwin/McGraw-Hill, Boston, Mass Ph.D Nguyen Thi Mui (2006) “Nghiệp vụ ngân hàng thương mại”, Học viện tài Official Reports and other Documents Annual reports of VPBank in 2010, 2011, 2012 Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 52 Report of general statistics office on inflation rate, CPI, profit of bank system State Bank of Vietnam (3/2008), Document of Law on Institution Project (Amendment) Website of Ministry of Finance, State Bank of Vietnam, Vietnam Chamber of Commerce and Industry, VPbank, VNeconomy, Vietnamnet.vn Articles in Journals, etc Ph.D Nguyen Hoang Anh, Ảnh hưởng khủng hoảng kinh tế toàn cầu đến thương mại quốc tế Hà Nội, Kinh te doi ngoai Magazine no 53, October 2012 To Khanh Toan, Competitive capacity of Vietnam’s commercial bank in the international economic integration, Economic Research Magazine no 363, August 2008 News-letter of Vietnam Prosperity Joint Stock Commercial Bank Graduation thesis English for finance and accounting ... 2: Reality of lending to individual clients at VPbank, Cau Giay branch Chapter 3: Scalable solution for lending to individual clients at VPBank, Cau Giay branch Graduation thesis English for. .. BRANCH CAU GIAY Graduation thesis English for finance and accounting Dinh Kieu Trang CQ47/51.03 20 2.2 Reality of lending to individual clients at VPBank, Cau Giay branch 2.2.1 Lending situation to. .. factors 1.3.2.1 Factors from clients Demand for capital of clients Lending to individual clients is services, so the clients demand for capital is a key factor that determines the forms of lending