BÁO CÁO NÂNG CAO CHIẾN LƯỢC CHO NGÂN HÀNG TMCP DÀU KHÍ TOÁN CẦU GLOBAL PETROLEUM COMMERCIAL JOINT STOCK BANK IN NGHE AN

ASSIGNMENTAPPLING BALANCED SCORECARD SYSTEM TO IMPROVE STRATEGY FORGLOBAL PETROLEUM COMMERCIAL JOINT STOCK BANK IN NGHE ANBalanced Scorecard System is a modern management approach based onobjective. Accordingly, the development orientation of the enterprise isexpressed by indicators and objectives which are organized in harmony andharmony based on important priorities of organizations and enterprises. Thissystem helps people to move towards the common goal as well as thesustainable development of the business and as the basis for the managementand evaluation system. Therefore, although quarterly annual businessperformance measures will still be used to provide a current performancereport, these financial metrics will need to be supplemented by factors thataffect longterm financial performance

ASSIGNMENT

APPLING BALANCED SCORECARD SYSTEM TO IMPROVE STRATEGY FOR GLOBAL PETROLEUM COMMERCIAL JOINT STOCK BANK IN NGHE AN

Class: Auditing 56

Lecturer: Nguyen Thi Phuong Hoa

Members of group: Ha Vu Ngoc Linh (33%)

To Thi My Duyen (34%)

Tran Ngoc Mai (33%)

INTRODUCTION

Balanced Scorecard System is a modern management approach based on objective Accordingly, the development orientation of the enterprise is expressed by indicators and objectives which are organized in harmony and harmony based on important priorities of organizations and enterprises This system helps people to move towards the common goal as well as the sustainable development of the business and as the basis for the management and evaluation system Therefore, although quarterly annual business performance measures will still be used to provide a current performance report, these financial metrics will need to be supplemented by factors that affect long-term financial performance These factors, particularly those of growth opportunities, require other measures beyond the existing financial measures

In the age of globalization and the increasingly competitive business environment, choosing the strategy for survival and development of banks is

a difficult issue The traditional measure used in the evaluation of the performance of banks, primarily the financial information in the past has become outdated and no longer relevant Global Petroleum Joint Stock Company Nghe An Branch is a young and to confirm the role and position of the Bank as well as strengthening and enhancing its position in the market It requires the bank to develop a good strategy, a plan for the deployment of science, and the development of an appropriate metrology system The Balanced Scorecard (BSC) is a very appropriate tool for the Bank in the current period It is a planning and performance measurement method that transforms the Bank's vision and strategy into concrete goals, measurable, and measurable targets BCS not only helps the Bank assess its financial performance by measuring its financial position but also evaluates its measurement based on the measurement of non-financial factors Based on

the fact that we have chosen the topic "Apply balanced scorecard system to improve the strategy for Global Petroleum Commercial Joint Stock Bank in Nghe An” BCS will help the bank to complete the strategy to evaluate the

results on four aspects:

1 Financial

2 Customer

3 Internal business

4 Innovation and learning

APPLING BALANCED SCORECARD SYSTEM TO IMPROVE STRATEGY FOR

GLOBAL PETROLEUM COMMERCIAL JOINT STOCK BANK IN NGHE AN

Chapter 1: Overview of GPBANK NGHE AN

1.1 General Introduction of Global Petroleum Commercial Joint Stock

Bank - Nghe An Branch (GP Bank Nghe An) 1.1.1 Introduction to GP Bank

Global Petroleum Commercial Joint Stock Bank, formerly known as Ninh Binh Rural Commercial Bank, was officially transformed from a rural bank

to an urban bank on November 7, 2005 From a unit of less than 10 members

in November 2005, GP Bank's business network has been expanded continuously with 1 head office GP Bank has built a team of more than 1400 young staffs, trained professionally, working in the network of nearly 80 branches and transaction offices of GP Bank nationwide in provinces, cities such as: Ha Noi, Ho Chi Minh City, Ninh Binh, Hai Phong, Vung Tau and Da Nang Over time, GP Bank has affirmed the growth, gradually make a good impression on the financial market - currency of Vietnam In the coming time,

GP Bank will continue to develop its network to provide high quality financial and banking services closer to customers

1.1.2 Introduction of Global Petroleum Commercial Joint Stock Bank -

Nghe An Branch Full name: Gobal Petroleum Commercial Joint Stock Bank - Nghe An Branch Address: Lot 4.5, Building CT 1A, Quang Trung street, Vinh, Nghe An province

As a new branch was put into operation, GP Bank Nghe An Branch has been striving, step by step building and mature comprehensive in terms of capital mobilization, investment growth and credit quality, cash receipts, expansion

of external economic relations and other activities

1.2 Products and services at GP Bank Nghe An

1.2.1 Raising capital

Exploiting and receiving deposits of other domestic and foreign organizations, individuals and credit institutions in the form of demand deposits, term deposits and other deposits in VND and foreign currencies

Issuance of certificates of deposits, bonds, promissory notes and other valuable papers

Borrowing capital from other financial and credit institutions operating in Vietnam and foreign credit institutions when permitted in writing by the General Director

1.2.2 Lending:

To perform short-term, medium-term and long-term loans in Vietnam dong or foreign currencies for individuals and economic organizations of all sectors and all business sectors according to GP Bank's regulations

1.2.3 Foreign exchange trading:

Capital mobilization and lending, purchase and sale foreign currency, international payments, guarantee, re-guarantee, discount, rediscount of documents and other foreign exchange services in accordance with the Government's foreign exchange control policy, State Bank of Vietnam and

GP Bank

1.2.4 Providing payment and treasury services include:

- Providing payment instruments;

- Implement domestic payment services for customers;

- Implement cash collection and payment services for customers;

- Implement other payment services

1.2.5 Trading in other banking services:

- Include: collect and distribute cash; trading gold, silver, currency; automatic teller machine, card services; safe deposit, receiving reserve preservation; financial leasing agents, securities, insurance and other banking services are allowed by the State and GP Bank

1.3 Organizational structure and management apparatus

❖ Board of directors:

- The branch manager directs all activities of the board of directors, who performs his or her duties and powers in accordance with the law and the superior bank and is responsible for all business activities of the branch

- The deputy director is the consultant who assists the director in the process of managing and operating the business, to the extent authorized by the director

The deputy director shall have the right to act on behalf of the Director and shall be liable for such decisions

❖ Customer Relationship Department

- Including: credit, international payment, capital, currency trading

of the Board of Directors

• To organize and administer the bank's assets and liabilities in money in order to ensure the effective and safe operation of its assets in accordance with law

❖ Credit Support Department

- Responsible for credit marketing, advising clients on credit products, services and listings on related issues

- Researching customer credit strategies, classifying customers and proposing preferential policies for each type of customer

❖ Administrative offices – organizations

- Function:

• Advise the leaders to build human resources for the branch through the proposal, set criteria for recruiting cadres, train human resources for business activities, to set up the regimes of personnel management, property management, reward and discipline of officials and employees

- Mission:

• Management of employee records, recommendations to leaders in mobilizing and supplementing labor for departments, coordinate with departments to monitor the situation, summarize periodical emulation

❖ Accounting Department:

- Function:

• To advise the branch leaders on the management of assets in accordance with the financial and property management regime of the State of Vietnam

• To act as the branch clue in researching and exploiting modern technologies for business purposes, ensuring thrift and efficiency

❖ Internal Control Inspectorate

- To control the entire operation of the bank, the director and the functional divisions to ensure the regulation of the State Bank of Vietnam and the statutory regulations of the State

Chapter 2: Identification strategies and application Balanced Scorecard in strategic assessment of GP Bank

2.1 Mission, objective and vision, strategic GP Bank

- Mission: GP Bank strives to become a leading financial institution in Vietnam with outstanding values of prestige and quality of products and services The bank is committed to providing products and services that are professional, optimized to enhance and connect the value of life to every customer

- Objective: To build GP Bank into a typical retail bank in Vietnam, "Not the first, but the best" In its retail banking strategy, GP Bank will focus specifically on individual customers

- Vision to 2017: GP Bank will reach a comprehensive development bank to promote advanced technology capacity, modern NH management, qualify for competition and development in the regional financial system and new international financial system: Affirming the ability to compete equally with commercial banks, foreign banks

- Strategy: Safety - Sustainability – Effectiveness

GP Bank is constantly improving its competitiveness in the new phase to become one of the leading commercial banks in Vietnam The Bank always maintain financial status at a high level of safety, optimizing the use of shareholder capital to ensure the interests of customers, banks and shareholders High growth is made by creating a difference on the basis of understanding customer needs and customer orientation A comprehensive, effective and professional risk management system are developed to ensure sustainable growth; strategically prepare human resources and train professional staff, building "GP Bank Culture" into a spiritual element that links the whole system

2.1.1 Strategic view of GP Bank Nghe An branch

- As a branch of GP Bank, first of all, the bank's strategic objectives must be closely aligned with the strategic objectives of GP Bank However, each region will have different environmental, economic, cultural and social characteristics In order to achieve its objectives, branch banks will have their own strategies With a strategic view from the corporation "Commitment to Success", analysis of population characteristics in Nghe An Province, GP Bank branch in Nghe An continues to inherit this strategic view, to bring the greatest benefits to people here, while improving the profitability of enterprises

- Based on the orientation of operation in the past few years, it is possible to highlight some key objectives of GP Bank in Nghe An province as follows:

• Raising total capital

• Efficient capital allocation with low cost, ensuring practical benefits for businesses

• Managing risk effectively

• Improved service quality: convenient, reliable, fast through effective processes, supported by talented staff

• Harmonizing GP Bank's customer and employee benefits, GP Bank's culture building is: Honesty, Ethics, Creativity, Quality and Effectiveness

2.1.2 The strategic objective of GP Bank Nghe An branch

Based on the general and specific objectives of GP Bank, GP Bank Nghe An has set its own objectives for its business from 2013 to 2016 As bank operations are special types of services, including various activities, operational strategies are not aggregated in terms of BSCs In order to complete the strategy for GP Bank Nghe An according to the BSC, the objectives were rebuilt based on the results of the strategy implementation and divided into four aspects as follows:

❖ Financial objectives

- Mobilized capital (VND bill): increased by 15% - 17% compared to the beginning of the year

- Outstanding loans: went up 11% - 12% over the beginning of the year

- Maximum capital utilization rate: 80%

- Ratio of medium, long term loans/total outstanding loans: Up to 40%

- Bad debt ratio: Less than 3%

- Issuance of ATM cards: 500 - 1,000 cards

- Non-credit revenue: rose to 20% over the previous year

- Profit: increased 16% compared to 2016

- Raising employee incomes: a 15% increase over 2016

- The proportion of short-term capital used for medium and long term loans is 30%

❖ Customers objectives

Next year, the bank's goal is to improve customer satisfaction, especially in terms of creating close relationships with traditional customers Besides, continuously develop selective new potential customers, accounting for 25%

of total customers, especially increasing the market share of small and medium enterprises, building a sustainable business strategy

The target of the bank in the next year also develops stronger than the advertising programs of GP Bank such as: advertising in newspapers, television, participation in trade fairs, especially seminars and conferences This is a good opportunity for businesses to know the bank and also the opportunity for banks to better understand the needs of businesses, find good customers Banks should provide information, policies on interest rates, service charges apply to different types of customers, at the same time listen

to their opinions and answer their questions As a result, the bank can take positive steps to overcome the shortcomings and provide more reasonable policies and services to better meet the needs of its customers

❖ Internal business objectives

In order to accomplish customer objectives, the goal of the internal process is

to improve the supply of products and services To ensure the criteria such as conditions and procedures for using the service simple, fast processing speed, safety, high accuracy, customer data is updated continuously This enables the bank to increase its added value, provide its products and services at the lowest cost, and enhance the bank's asset utilization

In addition to consolidating and increasing value for traditional products, the bank's goal is to develop new products and services, increase service fees, especially products and services package This service is a one-stop solution,

a combination of existing products to bring maximum convenience as well as minimize time and procedures for customers Product packaging is a new trend in service delivery Cross selling products are commonly used These two forms deal with market saturation trends and improve competitiveness for service products Thus, the value that package products bring is the convenience, simple procedures accompanied by incentives Consequently, customers have to make fewer transactions for a variety of needs, thus saving time, money and feeling the added value of the service The cost for a service pack is therefore lower than the total cost of each service combined and also facilitates the customer's access to and use

The working environment for employees is also a very important factor for achieving the bank's goals Therefore, the creation of a good working environment, motivation and conditions for employees is also an important goal set by the bank

In addition to its business activities, GP Bank of Nghe An targets to further develop and actively implement social charity programs such as: visiting families with Agent Orange victims, handing over charity houses and supporting families in difficult circumstances

❖ Innovation and learning objectives

To achieve customer objectives and internal process goals, the bank viewed training and development as the primary principle of its existence

The Bank's 2016 goal is to develop a strong workforce that develops knowledge and skills for employees to create a culture of continuous improvement and alignment on the basis of solid information technology It

is the fact that the bank has continuously implemented training plans for its staff every year

Assurance of the quality of human resources of banks with the criteria such

as capacity, qualifications, ability to integrate, work efficiency and good moral qualities In fact, no matter how strict the legal regulations and business process, for the personal benefit of the bankers can still collusion, deliberately spleen the law, leading to unpredictable risks In fact, there have been many serious losses due to the moral hazard of bank officials Therefore, the bank's objectives need to constantly educate the ethics of the profession to every officer in each department and its branches and transaction offices

In addition to training staff, the bank's objectives are to build a modern technology foundation that ensures the bank's internal management requirements

In addition, the bank also satisfies the growing demand for business transactions, demand for risk management and liquidity, able to connect with other banks in the area and in the country The modern banking services are developed on the basis of ensuring risk prevention, confidentiality and safe operation

2.2 Appling BSC to evaluate strategy of GP Bank Nghe An

2.2.1 Identifying and determining weights for the KPIs

The weight of the core measurement indicators KPIs are defined as follows:

Important level Less important - The most important Weight 1 - 5

After conducting interviews with bank executives and department heads to assess the importance of KPIs to strategic objectives, we gain weightings for KPIs as follows

Table 2.1: Table weighting of KPIs

I.Financial criteria

TC-03 The percentage of employee income is

KH-01 Number of traditional customers still

III.Internal business criteria

HN-01 The percentage of use capacity of the

HN-03 The percentage error occurs when

providing service products

HN-07 Cost of production for new products 3 HN-08 Satisfaction of internal customers 5

HN-10 The number of participating social

programs

4

IV Innovation and learning criteria

DP-01 The level of training for staff 4 DP-02 Budget to develop skills for employee 3

DP-03 The number of violations related to

professional ethic

5 DP-04 The number of upgraded computers 4

DP-05 The level of employee

decision-making

3

DP-06 The degree of affiliation between

employees in the bank

4

DP-07 The percentage of managers who are

studying abroad

2

DP-08 The percentage of managers who go to

study in the country

to ethics are the most important KIPs and affect directly to other KIPs and bank’s objectives that include: increasing profitability, retaining traditional customers, enhancing customer satisfaction, enhancing efficiency in new product development, and improving the working environment for human resources, improve the professional ethics, and decide on the existence of the bank, so the weight of these KPIs is 5, at the highest level

KPIs such as non-credit revenue, increased loan portfolio, increased number

of new clients, percentage of used assets, average time spent on products and services, the percentage of errors occurring when providing products or services; the amount of social activities involved, the level of training for employees, the number of computers upgraded to date, the level of alignment among the bank's employees, the percentage of managers who are going study

in the country The KPIs are also very important, affecting directly the bank's strategic objectives such as increasing non-credit income, increasing outstanding loans, developing new customers, loss of risk, etc., but it has little direct impact on core KPIs other than KPIs that are weighted at 5, which often indirectly affect, so the weight of these KPIs is 4

KPIs such as the percentage of winning / losing cases, production costs for new products, budget for developing skills for employees, and the level of involved decision-making are also important, but they have little direct effect, which indirectly influences the strategic objectives of the bank and indirectly affects other core KPIs such as percentage of satisfaction Customer service, the average time provided for the product or service, the error occurred when

providing product or service, the level of training for employees, etc., so the weight of these KPIs is 3

KPIs such as favorite brands and perceptions, the market share of each client segment, the percentage of managers who are studying abroad, are KPIs that have a weak impact on strategic objectives so their weight is 2

2.3 Assessment of strategic objectives of GP Bank Nghe An

2.3.1 Financial perspective

In 2016, in general, the financial criteria are well implemented by banks, such

as 13% increase in profit, 14% increase in capital, of which short-term capital increased by 8% and long-term capital increased 6% Besides, outstanding loans also increased at a relatively safe rate compared to mobilized capital, specifically 10% higher than in 2013 Therefore, these targets are considered strong points of banks with% completed more than 80%

However, the percentage of employees' incomes has not been increased, increasing by 7% against the target of 10% Although profits increase, but costs also increase, especially the costs associated with the creation of new products and services In addition, the non-credit revenue in 2016 increased quite low compared to the target, specifically 10% increase compared with the target of 18%, with a trend of a modern bank, the revenue beyond credit The ratio is quite low, profit is mainly based on credit, this is the target has not reached the requirements and will create many risks, should be rated as average

2.3.2 Customer perspective

The bank's financial indicators for 2016 are quite good, especially the percentage of traditional customers still relate This index is 95% higher than the target of 100%, leading to a 96% completion, this is a strong point of Nghe

An GP Bank The number of traditional customers is rated by the bank yearly, mainly for borrowers and deposits For loan transaction customers are assessed through criteria such as the number of years that customer used GP Bank’s service, the average loan balance, the payment of principal, interest and other related costs, financial resources of enterprises .; For loan transaction, customers are assessed through criteria such as the number of years that customer used GP Bank’s service, average deposit balance, term deposit