GIẢI PHÁP NÂNG CAO CHẤT LƯỢNG tín DỤNG tại NGÂN HÀNG TMCP dầu KHÍ TOÀN cầu CHI NHÁNH ĐÔNG đô sLIDE

“SOLUTIONS TO IMPROVE CREDIT QUALITY AT TOAN CAU OIL & GAS JOINT STOCK COMMERCIAL BANK - DONG DO BRANCH” PRESENTATION OPENING The necessity of the thesis Aims of the thesis Objects and scope of the thesis Methodology Structure of the thesis STRUCUTRE OF THE THESIS Chapter 1: General Introduction Chapter 2: The situation of credit quality at GP Bank - Dong Do Branch Chapter 3: Conclusion and solutions to improve the credit quality at GP Bank - Dong Do Branch CHAPTER 1: GENERAL INTRODUCTION Definition of strategy Fried R David: strategy is the determination of the basic long-term goals and objectives of an enterprise and the adoption of the courses of action and the allocation of resources necessary for carrying out these goals Moreover, competitive strategy or corporate strategy is also defined by factors: - Product market - Level of investment - Strategic function - Asset strategy and capability strategy The allocation of resources - - Corporation effects between enterprises CHAPTER 1: GENERAL INTRODUCTION External environment analysis (PEST) Legal, political (P) These factors have influences on all industries in a territory, institutional factors, law may endanger the viability and growth of any industry Economic (E) Enterprises should pay attention to the economic factors in the short-term, longterm and government intervention on the economy Typically the enterprise will base on economic factors for investment decisions in the sector, and region Socio-Culture (S) Cultural values make a society, it can foster the existence and development od the society Therefore, cultural factors are highly protected, especially the spiritual culture Technology (T) The world of technology revolution leads to a series of new technology launched and integrated into production and services CHAPTER 1: GENERAL INTRODUCTION Industry analysis Five Forces Model Porter’s Five Forces is first published on Harvard Business Review in 1979 with the content of finding the factors that make profit for business This model is usually called “ forces of Porter”, which is known as an effective and useful tool to find the root of profit Moreover, it shows the competitive strategy to maintain or increase profit of a business CHAPTER 1: GENERAL INTRODUCTION Basic concept of bank credit Credit is a asset transaction which allows one party to provide resources (financial, goods, or service) to another party (corporation, individuals) where that second party does not reimburse the first party immediately (thereby generating a debt), but instead arranges either to repay or return those resources (or other materials of equal value) at a later date Roles of bank credit * First: bank credit increases the economic efficiency •Second: bank credit contributes to the continuous movement of capital, increases the currency cycle in the economy, creates a mechanism in distributing capital effectively * Third: bank credit supports the economic strategy and the monetary policy * Forth: bank credit helps motivate the international economic relations CHAPTER 1: GENERAL INTRODUCTION Bank credit quality *For customers: Credit quality is reflected in the amount of money, which is lended from banks, has interest rates and reasonable terms of payment; simple, convenient procedures, attracts more customers, while ensuring the principle of credit *For commercial banks: Credit quality is reflected that the credit scope, extent, limits must be consistent with the bank and forced to ensure competitiveness in the market to repay the principle and interest on time *For Government and the economic – socio development: Credit quality is shown in the credits given to the production and circulation of goods, contributes to the employment, exploits potential resources of the economy, accelerates the process of accumulation and production concentration, resolves the relationship between the credit growth and economic growth CHAPTER 1: GENERAL INTRODUCTION Indicators measuring bank credit quality For customers * Capital needs of the customers * The ability to meet the conditions and criteria of bank credit * The ability of customers in the management and use of loans effectively For commercial banks * Term structure of commercial banks’ scale * The capacity of banks in the project appraisal process * The capacity to monitor and handle the situations of banks * Lending policy * Credit information : * Science and technology * The quality of personnel and human resource management Objective factors *Natural environment * Economic – Socio environment * Political environment * Legal environment CHAPTER 2: CREDIT QUALITY IMPROVEMENT– THE CASE AT GP BANK - DONG DO BRANCH Overview of GP Bank - Dong Do Branch Dong Do is one of the newly established branched with developing positive, effective business operations, creating large scale and position in GP.Bank system BOARD OF DIRECTOR Admini stratio n Dept Internal Inspect ion and Superv ision Custo mer Relatio n Dept Credit Suppor ting Dept Accoun tant and Treasu ry Dept Transa ction offices (10) - Board of Director:03 Proportion: 2,7% /Total employees - Head of department: 15 Proportion : 13,6% /Total employees - Supervisors: 10 Proportion : 9,1% /Total employees - Expert, staff: 82 Proportion : 74,5% /Total employees CHAPTER 2: CREDIT QUALITY IMPROVEMENT– THE CASE AT GP BANK – DONG DO BRANCH Business performance activity of GP Bank - Dong Do Branch Short term, middle term and long term structure CHAPTER 2: CREDIT QUALITY IMPROVEMENT - THE CASE AT GP BANK - DONG DO BRANCH Business performance activity of GP Bank - Dong Do Branch Economic classification structure CHAPTER 2: CREDIT QUALITY IMPROVEMENT - THE CASE AT GP BANK - DONG DO BRANCH Business performance activity of GP Bank - Dong Do Branch Collateral asset classification credit structure CHAPTER 2: CREDIT QUALITY IMPROVEMENT - THE CASE AT GP BANK - DONG DO BRANCH Business performance activity of GP Bank - Dong Do Branch Overdue debt Description Total debt Therein: -Overdue debt -Overdue debt rate Year 2010 333.222 0 Year 2011 913.297 1.827 0,2% Unit: Year 2012 Million 1.042.263 22.929 2,2% CHAPTER 2: CREDIT QUALITY IMPROVEMENT - THE CASE AT GP BANK - DONG DO BRANCH Business performance activity of GP Bank - Dong Do Branch Overdue debt classified in groups Description Total debt, including: Group 1: Current debt Group 2: Special mentioned debt Group 3: Sub-standard debt Group 4: Doubtful debt Group 5: Loss Year 2011 913.297 911.470 Yeardong 2012 Million 1.042.263 870.867 14.072 0 0 1.827 5.122 2.500 1.235 Credit cycle Description Collection revenue Debt in the period Debt in the last period Average debt Credit cycle Unit: Year 2010 333.222 333.222 Year 2010 131.603 92.262 333.222 212.742 0.61 Unit: Million dong Year 2011 920.909 333.222 913.297 623.259 1.48 Year 2012 1.718.868 913.297 1.042.263 977.780 1.76 CHAPTER 2: CREDIT QUALITY IMPROVEMENT - THE CASE AT GP BANK - DONG DO BRANCH Business performance activity of GP Bank - Dong Do Branch ICOR - Incremental Capital Output Ratio Criteria Total debt Unit: Year 2010 333.222 Year 2011 913.297 Year 2012 Million dong 1.042.263 873.338 38.2% 2.494.924 36.6% 2.265.814 46% Total debt financing ICOR Income from loans Year 2010 Criteria Income from loans Total profit Year 2011 Unit: Year 2012 Million dong Sales Rate Sales Rate Sales Rate 735 49% 7.088 53% 13.398 61,6% 1.500 13.374 21.750 CHAPTER 2: CREDIT QUALITY IMPROVEMENT- THE CASE AT GP BANK - DONG DO BRANCH Analyse the external environment of GP Bank - Dong Do Branch Opportunities (O): Vietnam banks with international integration should take advantages of conditional capital, technology and staff training, develop their comparative advantages required to keep international competition and market expansion abroad Then, improving product quality and services Opening market financial services will allow foreign banks to participate in all of the banking services in Vietnam that forced the Vietnam commercial banks further specialize in banking, banking management asset-liability management, asset management, risk management, improve credit quality, capital efficiency, banking services and develop new services that foreign banks are expected to apply in Vietnam Demand for access and use the bank products and services is on the increase Many potential customers are not exploited The political situation is stable, the economy is continually growing, attracting FDI, the domestic financial market is growing makes more opportunities for the development of banking services and credit growth Science and technology development to modernize banking services more and more useful and diversified CHAPTER 2: CREDIT QUALITY IMPROVEMENT - THE CASE AT GP BANK - DONG DO BRANCH Analyse the external environment of GP Bank - Dong Do Branch Threats (T): Competitive pressures in the banking sector increased by a growing number of newly established banks both at home and abroad Brain drain is unavoidable when integration There will be a large amount of human resources to move between banks The process of international integration increases the risk of bankruptcy of the traditional client, affects the safety and effectiveness of the bank Inflation makes the input costs of bank services increase, affecting competitiveness Bad debt is a big challenge for the current banking CHAPTER 2: CREDIT QUALITY IMPROVEMENT - THE CASE AT GP BANK - DONG DO BRANCH Analyse the external environment of GP Bank - Dong Do Branch Strengths (S): GP Bank is a prestige brandname in the market Advantages in human resources: along with the experienced and well educated managers There are internal mechanisms effectively motivate and encourage all officers, employees to creatively work, responsibility and dedication Wages and income is associated with productivity, quality and effectiveness The training of human resource development is wll done System of technology and products, banking services is often innovative, advanced and modern CHAPTER 2: CREDIT QUALITY IMPROVEMENT - THE CASE AT GP BANK - DONG DO BRANCH Analyse the external environment of GP Bank - Dong Do Branch Weaknesses (W) Do not have a cohensive business strategy The marketing activity is not good Limit in financial ability Risk management activity is not good Few transaction offices CHAPTER 3: SOLUTIONS AND RECOMMENDATIONS TO INCREASE THE CREDIT QUALITY AT GP BANK - DONG DO BRANCH Evaluate the achievements of GP Bank - Dong Do Branch • Achievements: - Sales of loans and total loans continued to increase over the years - Credit grows not only in size but also ensures the quality, delinquency rates remain low and under control of the allowed rate - Revenues from credit operations, although the proportion is not as high as expected but there has been a steady and solid growth - Structure to ensure proper credit, according to the credit policy of GP.Bank CHAPTER 3: CHAPTER 3: SOLUTIONS AND RECOMMENDATIONS TO INCREASE THE CREDIT QUALITY AT GP BANK - DONG DO BRANCH Evaluate the achievements of GP Bank – Dong Do Branch Limitations Besides many achievements, the credit activity still exists some problems: -Scale of credit is not commensurate with the capacity to mobilize capital abundant branch, capital ratio in the recent time has not reached 50 % of total mobilized capital - Judgment of bank credit is limited, the maximum loan is billion per customer, outstanding loans and guarantees is billion per customer, and the reevaluation mechanism credit approval of the Headquarter is too complex - In terms of credit, loans in foreign currencies is too small compared to the total outstanding debt, foreign exchange services and international payment has not been promoted - Policy implement of products and services diversification is unsatisfied In addition, bank marketing activities has not been paid enough attention due to the dependence thought of GP.Bank headquarters - Staff are young , highly qualified, but the productivity is not high, not cohensive, experience with introducing and selling banking services are limited CHAPTER 3: CHAPTER 3: SOLUTIONS AND RECOMMENDATIONS TO INCREASE THE CREDIT QUALITY AT GP BANK - DONG DO BRANCH Cause of Exist and Quality of Credit * Objective causes: - For enterprises + There is no feasible projects + Not enough owner ‘s equity to participate in the projects + Not eligible for collateral + Capacity to manage and operate the business of many business owners did not meet requirements - Busisness environment : + the domestic economy is unstable , influenced by the global economic depression + Bank competition becomes increasingly fierce + Policies and mechanisms for macroeconomic management of the State has been gradually perfected Subjective causes: The observance of rules and regulations for loans in many cases is not serious , there are a lot of gap in the lending process implementation - The arrangement of staff, and customer service satff not take full advantages of their ability - Professional guidance, capacity investigating, control of the professional departments at GP.Bank headquarter is loosen CHAPTER 3: CHAPTER 3: SOLUTIONS AND RECOMMENDATIONS TO INCREASE THE CREDIT QUALITY AT GP BANK - DONG DO BRANCH Solutions to increase credit quality Capital mobilization to improve credit quality Improving credit policies contribute to credit quality improvement Diversification of the customer, made a reasonable customer strategy Complete credit process Analysis, accurate assessment of borrowers Improve the quality of evaluation Lending decisions must be based on identifying and understanding the borrower Build up inspection systems , credit monitoring performance Strengthen the debt management and overdue debt settlement Make differences to compete Create Marketing Strategies for banks Develop and use properply the reserve fund Foster the Investigation and supervision Modernize banking technology for credit operations Build credit information system ... strategy is also defined by factors: - Product market - Level of investment - Strategic function - Asset strategy and capability strategy The allocation of resources - - Corporation effects between... dong Description Lending revenue - Short term - Middle and long term Debt collection revenue - Short term - Middle and long term Outstanding lending - Short term - Middle and long term Year 2010... QUALITY AT GP BANK - DONG DO BRANCH Evaluate the achievements of GP Bank - Dong Do Branch • Achievements: - Sales of loans and total loans continued to increase over the years - Credit grows not