DSpace at VNU: Consumer lending - the case of Techcombank

Consumer lending - the case of Techcombank Hoàng Mỹ Khoa Quản trị Kinh doanh Luận văn Thạc sĩ ngành: Kinh doanh quản lý; Mã số: 60 34 05 Người hướng dẫn: TS Phạm Thị Nhuận Năm bảo vệ: 2010 Keywords: Quản trị kinh doanh; Ngân hang; Cho vay; Người tiêu dùng Content TABLE OF CONTENTS ACKNOWLEDGEMENT ABSTRACT TÓM TẮT TABLE OF CONTENTS LIST OF FIGURES AND TABLES EXECUTIVE SUMMARY INTRODUCTION Background to the issue ………………………………… Problem Statement and Research Objectives of the study 10 Scope and Limitation of the Research ………………… 11 Research Methodology ………………………………… 12 Research Structure ……………………………………… 12 Chapter 1: COMMERCIAL BANK’S CONSUMER LENDING THEORETICAL FRAMEWORK FOR ANALYSIC 1.1 The Basis of Bank Lending …………………………… 14 1.2 The Basis of Consumer Lending ……………………… 17 1.2.1 The Concept of Consumer Lending …………………… 17 1.2.2 The Nature of Consumer Lending ……………………… 18 1.2.3 The Types of Consumer Loans ………………………… 19 1.2.4 The Effects of Consumer Lending ……………………… 24 1.2.5 The Factors Impacts on Consumer Lending …………… 25 1.3 The Process of Consumer Lending…………………… 27 1.3.1 Receiving application and collecting information ……… 28 1.3.2 Evaluating applications ………………………………… 29 1.3.3 Approving loans ………………………………………… 32 1.3.4 Managing and collecting loans ………………………… 33 1.4 Precautions to be taken in granting consumer loans … 34 1.5 Pricing and structuring of consumer loans 35 1.5.1 Loan pricing …………………………………………… 35 1.5.2 Loan structuring ………………………………………… 37 1.6 Consumer Lending Quality …………………………… 37 1.6.1 Consumer Lending Quality from Different Perspectives 37 1.6.2 Measuring the Quality Consumer Lending ……………… 39 Chapter 2: CURRENT SITUATION OF CONSUMER LENDING AT TECHCOMBANK 2.1 Techcombank profile …………………………………… 44 2.1.1 History and Development ……………………………… 44 2.1.2 Vision and Mission ……………………………………… 46 2.1.3 Techcombank’s Organization …………………………… 46 2.1.4 The Products …………………………………………… 47 2.1.5 Achievements …………………………………………… 47 2.2 Current Situation of Techcombank’s Consumer Lending 47 2.2.1 Consumer Lending Process ……………………………… 47 2.2.2 Consumer Lending Quality ……………………………… 52 2.2.3 Quality of consumer loans ……………………………… 56 2.2.4 Quality of Service ……………………………………… 58 2.3 Assessment of the Techcombank’s Consumer Lending Quality …………………………………………………… 2.4 62 Development Trend of Techcombank’s Consumer Lending ………………………………………………… 66 Chapter 3: CONCLUSIONS AND RECOMMENDATIONS 3.1 Conclusions ……………………………………………… 68 3.2 Recommendations ……………………………………… 69 3.2.1 Developing the Outstanding of Consumer Loans ……… 69 3.2.2 Increasing in Capital Mobilization ……………………… 70 3.2.3 Clarifying the Responsibility of Professional Divisions … 70 3.2.4 Applying and Revising the Credit Scoring System ……… 71 3.2.5 Applying Up-to-date Technology and Modern Equipments 72 3.2.6 Following Some Tactics in Evaluating Applications and Mitigating Credit Risk …………………………………… 73 3.2.7 Expanding the Key Performance Indicators (KPIs) ……… 74 3.2.8 Increasing the Quality of Information Provided by the Credit Information Centre ……………………………… 74 3.2.9 Enhancing Human Resource Quality …………………… 74 3.2.10 Responding to Changing Consumer Need and Purchasing Behavior ………………………………………………… 3.3 76 Limitations of the Research and Recommendations for Further Study 77 REFERENCES…………………………………………… 79 APENDIXES……………………………………………… 81 APPENDIX 1- QUESTIONNAIRE APPENDIX 2- TECHCOMBANK ORGANIZATION CHART APPENDIX 3: TECHCOMBANK’S PRODUCTS References: (a) Books and magazines Behrens, C.F, 1952, Commercial Bank Activities in Urban Mortgage Financing Bland, M.E, 1998, The Usefulness of Missing Information on Personal Loan Applications in Differentiating Approved from Denied Loans and Late-Paying from Timely Paying Loans, University of Mississippi Bock, C., 1994, Credit-Get it: How to Get the Credit You Deserve, Handle Debt Wisely and Build a Secure Financial Future, Action Publishing, Monument, Colorado Choi, D.Y., 1997, Service Competition in Retail banking, University of California, Los Angeles Duggan, A & Lanyon, E 1999, Consumer Credit Law, Butterworths, Sydney Evan, D.S & Schmalensee, R., 1999, Paying with Plastic: The Digital Revolution in Buying and Borrowing, MIT Press, Cambridge, Massachusetts FDIC, 2007, Quarterly banking profile Hochiminh City Security Corporation Report, 2009, Company Update, Feb 2009 Hyman, L.R., 2007, Debtor Nation: How Consumer Credit Built Poswar America, Cambridge, Massachusetts 10 Iossa, E & Palumbo, G., 2006, Overoptimism and lender liability in the consumer credit market 11 Lawrence, D & Solomon, A., 2002, Managing a consumer lending business, 1st edition, Solomon Lawrence Partners 12 Linda, M.D., 1992, A prescriptive model for the control of commercial lending quality, Georgia, US 13 Lown, C.S., Morgan, D.P & Rohatgi,S., 2004, Listening to Loan Officers: The Impact of Commercial Credit Standards on Lending and Output 14 Maki, M., 2000, The growth of consumer credit and the household debt service burden 15 Mann, R., 2006, Charging Ahead: The Growth and Regulation of Payment Card Markets, Cambridge 16 Nilsen, J.H, 1999, Trade Credit and the Bank Lending Channel, Studienzentrum Gerzensee 17 Oesterreichische Nationalbank (OeNB) and Austrian Financial Market Authority (FMA), Credit Approval Process and Credit Risk Management 18 Ostergaard, C., 1998, Essays on Bank Lending: Portfolio Risk and Consumer Credit, Rhode Island 19 Sathye, M, et al., 2003, Credit Analysis and Lending Management, John Wiley & Sons Australia, Ltd, Australia 20 Thomas, S., 2004, New ideas in credit process 21 Weaver, P.M & Kingsley, C D., 2001, Banking and Lending Practice, Lawbook Company, North Ryde, New South Wales 22 Weaver, P.M & Shanahan, K.M 1994, Banking and Lending Practice, Serendip, Sydney 23 Weerasooriya, W 1998, Bank Lending and Sercurities in Australia, Butterworhs, Sydney 24 Wyman, O., 1999, Report of Credit Process Redesign: Rethinking the Fundamentals b Perodic Reports HSB-MBA lecture documents Techcombank’s annual report in 2006, 2007, 2008 Techcombank’s humance resource report 2007, 2008 Techcombank’s marketing report 2006, 2007, 2008 Techcombank’s retail credit documents Vinacapital, Vietnam banking report in 2006 c websites http://www.acb.com.vn http://www.bidv.com.vn http://www.techcombank.com.vn http://www.vietcombank.com.vn ...1.2.4 The Effects of Consumer Lending ……………………… 24 1.2.5 The Factors Impacts on Consumer Lending …………… 25 1.3 The Process of Consumer Lending ………………… 27 1.3.1 Receiving application and collecting... 1.6.1 Consumer Lending Quality from Different Perspectives 37 1.6.2 Measuring the Quality Consumer Lending ……………… 39 Chapter 2: CURRENT SITUATION OF CONSUMER LENDING AT TECHCOMBANK 2.1 Techcombank. .. 47 2.2 Current Situation of Techcombank s Consumer Lending 47 2.2.1 Consumer Lending Process ……………………………… 47 2.2.2 Consumer Lending Quality ……………………………… 52 2.2.3 Quality of consumer loans ………………………………