Quản lý nợ xấu trong hoạt động tín dụng của ngân hàng thương mại cổ phần công thương việt nam tt tiếng anh

INTRODUCTION The urgency of the research topic Credit activity is one of the most important activities of commercial banks Bad debts are indispensable in credit activities, and maintaining bad debts at a safe level is one of the important goals of commercial banks Bad debt is not only a basic cause of unsafe, increased risk provisioning, increased debt collection costs thereby reducing the bank's expected profits but also negatively affecting the social economic development In addition to the negative financial impacts, bad debt also affects the reputation of the bank itself and greatly affects the banking system The management of nonperforming loans is considered an important activity for banks to determine the causes, predict losses, and then propose measures to minimize the losses caused by bad debts as well as provide preventive measures to avoid Repeated bad debt in the future Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) is one of the four state-owned joint stock commercial banks, with the largest total assets and large outstanding loans in the system of Vietnamese commercial banks Banking credit activities in general and bad debt management of Vietnam Joint Stock Commercial Bank for Industry and Trade have had a good change in recent years In addition to the successes, bad debt management activities of the Bank also have limitations and obstacles: measures to handle bad debts are not diverse; Debts sold to VAMC in the form of special bonds have not yet been fully resolved In order to achieve the objectives of the Vietnam Banking Industry Development Strategy to 2025, with orientations to 2030, the Decision 986 / QD-TTg and requirements for compliance with Basel II standards for the Vietnamese commercial banking system, Vietnam Joint Stock Commercial Bank for Industry and Trade needs to have more drastic measures in the management management of the Bank With the desire to learn and analyze to contribute more scientific and practical evidences, propose solutions to improve bad debt management for the bank, the PhD student has chosen the topic: "Management of bad debts in credit activities of Vietnam Joint Stock Commercial Bank for Industry and Trade”as a topic for the doctoral thesis Research purposes and tasks * Research purposes Proposing some scientific and practical solutions to improve the management of bad debts in credit activities of Vietnam Joint Stock Commercial Bank for Industry and Trade from 2020 to 2025 * Research tasks - Systemizing some theories about credit, bad debt and bad debt management of commercial banks according to the approach of the major Economic Management - Analyze the status of bad debt management in credit activities of Vietnam Joint Stock Commercial Bank for Industry and Trade from 2012 to 2018 (according to management functions) - Proposing solutions and recommendations to strengthen bad debt management activities in credit activities of Vietnam Joint Stock Commercial Bank for Industry and Trade from 2020 to 2025 Research subject and scope * Research subjects The dissertation studies the status of bad debt management in credit activities of Vietnam Joint Stock Commercial Bank for Industry and Trade according to management functions, evaluation criteria and factors affecting the bad debt management of the Bank * Research scope - In terms of contents: The thesis studies to the approach of microeconomic management, namely, the study of bad debt management in credit activities of the system of Vietnam Joint Stock Commercial Bank for Industry and Trade (not study bad debts arising from other activities such as payment, investment) Macro management - state management (of the State Bank) for bad debts at commercial banks is considered in terms of influencing factors - In terms of space: The dissertation compares with a number of other commercial banks such as: Banks representing joint stock banks without State owned capital (ACB, Sacombank, Eximbank, MB, SHB, VPBank, Hdbank), banks representing State-owned commercial banks (BIDV, VCB) - In terms of time: + The length of the dissertation is from 2012 to 2018 + Time to apply solutions from 2020 to 2025 New contributions of the thesis * New contributions in academia and theory The thesis studies and establishes the content of management of bad debts (MBD) in credit activities according to the approach of the major of economic management based on the functions of management (Building and issuing policies and strategies for bad debt management and bad debt management process; Organizational structure of bad debt management apparatus; Organize the implementation of management activities), of a commercial bank The study draws some lessons that can be applied to Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) from the experience in MBD management of BIDV and Vietcombank * New conclusions on practical assessment Summarizing the results of analyzing the status of MBD of commercial banks of Vietinbank from secondary information sources and the results of interviews with experts, the author of the thesis said that: (i) The process of implementing the bank's MBD policies are still inadequate; (ii) The division specialized in managing separate bad debts is unclear; (iii) Methods of measuring bad debt are still simple and the specific level of losses cannot be determined; (iv) The use of MBD tools and measures is limited * New suggestions on policies and solutions The thesis proposes groups of solutions: (i) Continue to improve the formulation and issuance of policies, strategies for managing bad debts and the process of managing bad debts; (ii) Continue to improve the organizational structure of bad debt management system; (iii) Improve the organization of implementation of the bad debt management activities; (iv) Other solutions Of which, some key solutions to focus on settlement are: Improving the early warning system; Completing the internal credit classification and the role of CIC well; Complete quantitative evaluation and ranking combined with qualitative; The role of Asset Management Company AMC (of Vietinbank) in dealing with bad debts; Complete models and organization of risk management mechanism with the expected models and organization of credit (with changes in the organizational structure of parts of TSC) Building and improving the system indicators of valuation of credit risks The thesis structure Chapter 1: Overview of research and research methods Chapter 2: Theoretical basis for bad debts and management of bad debts in credit operations of commercial banks Chapter 3: Actual situation of bad debts and management of bad debts in credit activities of Vietnam Joint Stock Commercial Bank for Industry and Trade Chapter 4: Orientations and solutions to enhance bad debt management in credit activities of Vietnam Joint Stock Commercial Bank for Industry and Trade Chapter OVERVIEW OF RESEARCH AND METHODS RESEARCH 1.1 Overview of relevant studies and research gaps 1.1.1 Overview of domestic and foreign studies related to the thesis topic 1.1.1.1 Studies on credit risk management - Larry D Wall (Determinants of the Loan Loss Allowance: Some Cross-country Comparisons, 2004) - Asokan Anandarajan, Iftekhar Hasan, Ana Lozano-Vivas (Loan loss provision decisions: An empirical analysis of the Spanish depository institutions, 2005) - Rossi, S.P.S., Schwaiger, M.S., and Winkler, G (How loan portfolio diversification affects risk, efficiency and capitalization: A managerial behavior model for Austrian banks, 2009) - Nguyen Duc Tu (Credit risk management at Joint Stock Commercial Bank for Industry and Trade of Vietnam, 2012) - Nguyen Tuan Anh (Credit risk governance of Vietnam Bank for Agriculture and Rural Development, 2012) 1.1.1.2 Studies on bad debts and factors affecting bad debts - Mohd Zaini Abd Karim, Sok-Gee Chan, Sallahudin Hassan (Bank efficiency and non-peforming loans: evidence from Malaysia and Singapore, 2010) - Raphael Espinoza and Ananthakrishnan (Nonperforming Loans in the GCC Banking System and their Macroeconomic Effects, 2010) - Nguyen Thi Thu Dong (Improving credit quality at Joint Stock Commercial Bank for Foreign Trade of Vietnam in the integration process, 2012) - Roland Beck, Petr Jakubik and Anamaria Piloiu (NonPerforming loans What matterSin addition to the economic cycle, 2013) - Alwyn Jordan and Carisma Tucke (Assessing the Impact of Nonperforming Loans on Economic Growth in The Bahamas, 2013) - Rabeya Sultana Lata (Non-Performing Loan and Profitability: The Case of State Owned Commercial Banks in Bangladesh, 2015) - Moh Benny Alexandri and Teguh Iman Santoso (Non Performing Loan: Impact of Internal and External Factor: Evidence in Indonesia, 2015) - Nguyen Thi Hong Vinh (Bad debt of Vietnam commercial banking system, 2017) 1.1.1.3 Research on bad debt management of commercial banks - Nguyen Thi Hoai Phuong (Managing bad debts in Vietnamese commercial banks, 2012) - Nguyen Thi Thu Cuc (Managing bad debts in Vietnam Bank for Agriculture and Rural Development, 2015) - Tran Thi Thanh Diep (Managing bad debts in Vietnam Joint Stock Commercial Bank for Industry and Trade, 2017), 1.1.2 Research gaps and scientific and practical values of the thesis are inherited 1.1.2.1 Research gap Firstly, overseas studies are done in highly developed economies and banking industries There, the market conditions, the management model, the legal corridor governing the economy and the internal conditions of the banks are very different from the characteristics of the Vietnamese economy and commercial banking system Male present Secondly, a number of domestic researches conducted in the previous periods (works of Nguyen Duc Tu (2012) and Nguyen Thi Hoai Phuong (2012)): old data information, while the business environment There have been changes in business, legal policies and management level Although, past and elaborate past studies have practical value during the period of time when the topic is published, it may not be completely suitable for the current context Thirdly, most published studies have approached in the perspective of Finance - Banking (studying credit risks/bad debt management process from identification, risk measurement, classification to debt settlement bad), not researching from the perspective of the approach of Economic Management (researching management content according to management functions: (1) Develop and issue policies, strategies for managing bad debts and procedures for managing bad debts; (2) Organizational structure of bad debt management apparatus; (3) Organize the implementation of bad debt management activities Thus, it can be affirmed that in the published studies there are very few comprehensive studies on bad debt management in credit activities of Vietnam Joint Stock Commercial Bank for Industry and Trade according to the management's functions during the period most recently (2012-2018) From the comments above, the author of the thesis say some of the following gaps have helped the author study in order to implement the thesis topic well: - The theory of content, evaluation criteria and factors affecting the bad debt management of a commercial bank according to the approach of the major economic management - The situation of bad debts and bad debt management at Vietnam Joint Stock Commercial Bank for Industry and Trade (according to management functions) for the period 2012-2018 - Solutions to complete and strengthen management of bad debts of Vietnam Joint Stock Commercial Bank for Industry and Trade 1.1.2.2 Scientific and practical values of the thesis are inherited In the process of researching and implementing the thesis, the PhD student has developed a number of theories on bad debts and credit risk management of commercial banks; Reference to sources of information and data drawn from the research of Nguyen Duc Tu (2012) and Tran Thi Thanh Diep (2017) 1.2 Research questions From the above synthesis and analysis, the thesis will focus on the reply to the following questions: - What does Management of bad debts includes? Which criteria are used to assess the status of bad debt management of commercial banks? - How is the situation of bad debt management at Vietnam Joint Stock Commercial Bank for Industry and Trade? What are the main factors affecting the management of bad debts in credit activities at Vietnam Joint Stock Commercial Bank for Industry and Trade? Advantages, limitations and causes of the limitations and shortcomings in the management of bad debts at Vietnam Joint Stock Commercial Bank for Industry and Trade? - What measures should be done in management of bad debts in order to prevent and control bad debts in Vietnam Joint Stock Commercial Bank for Industry and Trade in the coming years? 1.3 The research method of the thesis 1.3.1 Method of collecting information and data * Primary information Primary information was collected by in-depth interview method to make appropriate assessments and assessments of the content presented in the thesis In addition to the objective subject, the author interviewed a number of subjects who are managers, experts of State inspection and supervision agencies of the provincial / municipal State Bank branches (Appendix 7) * Secondary information PhD student conducted secondary information on the status of credit operations, bad debts and bad debt management at Vietnam Joint Stock Commercial Bank for Industry and Trade (2012-2018) (credit regulations, policies and principles, reports about bad debt of the bank) Websites of SBV, Vietnam Joint Stock Commercial Bank for Industry and Trade, and other commercial banks, 1.3.2 Method of aggregating and processing information and data * Processing primary information For the primary information collected by the method of in-depth interview with experts, the PhD student proceeded to transfer the information data from the interview to the word file format Next, the data is screened, analyzed, synthesized and used in some topics The results of the research are based not only on the summary of the interviewee's opinion on each specific content but also on the general assessment to draw comparisons with the qualitative analysis results through secondary data collected (Appendix 4) The main method used in the thesis is a qualitative method in combination with in-depth interviews with experts, economic managers, experts, chief experts, and senior experts of the State Administration Committee of the State Bank, branch of provincial level/city * Processing secondary information With secondary information collected, postgraduate used statistical research, comparison, analysis and synthesis methods; using supporting tools such as graphs, tables, tables to analyze bad debt management activities in credit activities of Vietnam Joint Stock Commercial Bank for Industry and Trade, based on that evaluation, comparison, to draw the results discuss about management activities in credit activities of Vietnam Joint Stock Commercial Bank for Industry and Trade In addition, postgraduate uses logical reasoning and methodology 1.4 Research process of the thesis Overview of literature review Key words: bad debts, bad debt management, identifying research gap Determining research problems Bad debt management Determining research objectives and questions Systemizing theoretical basis – analysis of current situation – measures to complete Systemization ad development of theoretical basis Theories on bad debts and bad debt management Data collection Primary data Secondary data - Reviewing and collecting data - Checking data - Analyzing data - In depth interview (In depth) Synthetize, analyze and report research results Proposing orientations and solutions Figure 1.1 Research process of the thesis (Source: Illustration of the author) 10 * Process of collecting and processing primary data Research Preparation Determining research sample Prepare questions for interview Interviewing Collecting interview results Analyzing and assessing current situation of bad debt management in Vietinbank Propose sulutions Figure 1.2: Process of collecting and processing primary data (Source: Illustration of the author) Determining objectives, subject and methods of res I Building theoretical basis and bad debt managem Collecting data on bad debt management of Vietinbank and some Analyse, evaluate current situation – dawning conclu Propose solutions and experiences Figure 1.3 Process of collecting and processing secondary data 11 (Source: Illustration of the author) Chapter THEORETICAL BASIS FOR BAD DEBT AND BAD DEBT MANAGEMENT IN CREDIT ACTIVITIES OF COMMERCIAL BANK 2.1 General arguments about bad debts in credit activities of commercial banks 2.1.1 Concepts of bank credit and bad debt 2.1.1.1 Bank credit and credit risk * Banking credit concept Bank credit is a credit relationship between two parties, necessarily on one side as a bank, on the other side as an individual, an enterprise or other organizations This is essentially a transfer of the right to use capital between a bank lender and a credit recipient for a specified period of time Upon the expiry of the agreement, the creditee must repay the creditor the original value and the added value * Credit risk Credit risk is a type of risk arising in the process of a bank's loan, manifested by the fact that customers cannot pay debts or pay debts on time or inadequately to the bank Thus, when the customer is due in due payment or does not pay or does not fully pay, it means that credit risk has occurred 2.1.1.2 The concept of bad debt According to previous studies, the concept of bad debt and how to identify bad debt are complex and diverse The term "bad debt" in English is "bad debt", is "nonperforming loan", or "doubtful debt" According to Basel Committee, According to the Circular No 02/2013/TT - NHNN dated January 21, 2013 of the State Bank of Vietnam, according to PHD candidate’s opinion, bad debt is a loan that is overdue and and / or principal repayment under an agreement over 90 days and doubt the borrower's ability to repay the debt Specifically, according to Article or Article of Decision 493/2005 / QD-NHNN, bad debts are debts of groups 3, 12 and 5, including substandard debts, doubtful debts, and potentially irrecoverable debts 2.1.2 Classification of bad debts - Classification of bad debts by time of overdue debt and debt recovery - Classifying bad debts according to the accounting principles 2.1.3 Method of determining bad debt - According to the quantitative method - According to qualitative methods 2.1.4 Impact of bad debt - The impact of bad debt on the financial situation of the bank -The impact of bad debts on the economy 2.2 Management of bad debts of commercial banks 2.2.1 Bad debt management concept and goal * The concept of bad debt management According to Basel 2005, “Bad debt management is a process of developing and implementing credit management strategies and policies to achieve safety, efficiency and sustainable development; including strengthening measures to prevent and limit the arising of non-performing loans, together with measures to handle the arising bad debts, thereby increasing sales, reducing costs and improving quality , business performance in both short and long term of commercial banks ” * The goal of bad debt management Bad debt management is a part of credit risk management, this is one of the key activities of commercial banks The bad debt management must focus on ensuring the effectiveness of credit operations and constantly improving the quality of credit operations of commercial banks Bad debt management must aim to provide the most effective way to handle and minimize losses to commercial banks 2.2.2 Contents of bad debt management The contents of the bad debt management include: Develop and issue policies and strategies for bad debt management and bad debt management process; (2) Organizational structure of bad debt 13 management apparatus; (3) Organize the implementation of bad debt management activities 2.2.3 Criteria for evaluating the management of bad debts of commercial banks According to management content, the PhD candidate focuses on analyzing criteria: compliance and effectiveness 2.2.3.1 Compliance Compliance is the responsibility of all managers, executives, and bank staff in complying with the State's laws and policies and the bank's own regulations on bad debt management Therefore, according to management function the compliance shows in the commercial banks stage: formulating and issuing policies, strategies for managing bad debts and the process of managing bad debts; Is the organization of implementing the management activities strictly comply with the current regulations of the State Bank? 2.2.3.2 Effectiveness Efficiency (economic efficiency) is an important economic category that shows the comparative relationship between achieved economic results and the costs spent to achieve that efficiency The effectiveness is also reflected in the commercial banks stage: developing and issuing policies, strategies for managing bad debts and the process of managing bad debts, organizational structure of bad debt management apparatus; Has the organization of implementation of the management activities been achieved well or not well, is the current level of the State Bank regulated? In general, efficiency is measured as follows: Total bad debts in the balance sheet The ratio of bad debts within the table Proportion of provision of risk for bad debts The bad credit ratio includes debt that has been settled by risk provisions Total off-balance sheet bad debts and ratio of off-balance sheet bad debts 2.3 Factors affecting the management of bad debts of commercial banks 14 2.3.1 Group of subjective factors - Awareness of bank officials in each position - Information technology system of commercial banks - Ethics and professional qualifications of bank officials and employees - Equity of the bank 2.3.2 Group of objective factors - Business environment - Policy mechanisms and legal corridors - Inspection and supervision of the Central Bank - Consciousness from borrowers 2.4 Experience in managing bad debts in credit operations of some commercial banks and lessons learned for Joint Stock Commercial Bank for Industry and Trade of Vietnam 2.4.1 Experience in managing bad debts of some commercial banks In the research content of bad debt management experience, the PhD student referenced the experience of two banks: Bank for Investment and Development of Vietnam (BIDV) and Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB) These are two large banks with similar characteristics to Vietnam Joint Stock Commercial Bank for Industry and Trade, so the banks' bad debt management experience is a valuable lesson for Vietnam Joint Stock Commercial Bank for Industry and Trade 2.4.2 Lessons learned for Vietnam Joint Stock Commercial Bank for Industry and Trade From researching the management experience of the two banks, the PhD student draws some lessons that Vietnam Joint Stock Commercial Bank for Industry and Trade can refer to or avoid repeating: - Firstly, about the organizational model Although Vietnam Joint Stock Commercial Bank for Industry and Trade has implemented a vertical organizational model, it needs to clearly identify the learning of BIDV's organizational model as a vertically focused organization model with the motto of streamlining 15 compact organizational structure, improve operational efficiency, focus on customers In particular, NH proactively and boldly researched as VCB, at the same time applying the management methods with reasonable processes and procedures, improving the quality, effectiveness, and efficiency of the management - Secondly, the identification of credit risk of each credit and the list of VCB is done regularly, with scientific basis and high reliability For credit portfolio risks, the measurement is quite accurate, the customer scoring system already covers the PD risk component (Probability of Default - probability of not being able to repay the debt); LGD (Loss Given Default - loss due to non-repayment) In addition, VCB's early warning system has been effective in identifying risks to minimize risks in credit contracts - Thirdly, improve the effectiveness of internal audit; developing and managing effectively bank staff, especially improving the capacity of credit assessment, appraisal and professional ethics of bank staff, is always an important factor to limit and manage Good bad debt - Fourthly, apply a modern credit risk management method, in line with international practices, step by step approach to debt classification according to international standards (both quantitative and qualitative), helping to classify Accurate debt type, accurate and complete DPRR deduction - Fifth, the bank should proactively settle the debt before it is sold to VAMC Because the early repurchase of debt sold to VAMC could bring more benefits to the bank Sixthly, the lesson of Joint Stock Commercial Bank for Industry and Trade of Vietnam should be avoided: Accrued interest (expected to be earned in the future) has been recorded as profit from previous years, but so far has not been collected (not to mention BIVD), so the accrued interest is not collected become bad debt, even very bad This is a lesson that should be replicated from BIDV's experience Seventh, perfect the debt classification according to Basel II international standards 16 Although both qualitative and quantitative methods have been clearly specified by the SBV in Circular 14/2014 / TT-NHNN on debt classification, setting up and using provisions to handle credit risks, but currently There are only a few Vietnamese commercial banks applying both methods (as of early 2017, only four banks have applied: Argibank, VCB, BIDV and then Vietnam Joint Stock Commercial Bank for Industry and Trade) Compared with banks before, Vietnam Joint Stock Commercial Bank for Industry and Trade is the last bank to apply both methods above Thus, two experienced research banks namely BIDV and VCB are in the process of applying debt classification according to Basel II, which combines both quantitative and qualitative aspects with some disadvantages that the bank itself does not want to have that is: Disadvantage 1: In order to apply the qualitative method, commercial banks must build an internal credit rating system that is not easy to implement Disadvantage 2: because Circular 09/2014 / TT-NHNN does not have clear guidelines on the application of qualitative methods Disadvantage (usually the biggest disadvantage): because if applying both qualitative and quantitative methods at the same time, the bad debt ratio will skyrocket, which is not many commercial banks want Therefore, in order for credit risk management/or credit management, lessons should be learned for Vietnam Joint Stock Commercial Bank for Industry and Trade to avoid the disadvantages that BIDV and VCB have encountered, it is necessary to strengthen and improve more in applying the classification according to Basel international standards II Chapter CURRENT SITUATION OF BAD DEBT AND MANAGEMENT OF BAD DEBT IN CREDIT ACTIVITIES OF COMMERCIAL BANKS VIETNAM INDUSTRIAL AND TRADE JOINT STOCK COMPANY 3.1 Brief introduction about Vietnam Joint Stock Commercial Bank for Industry and Trade 17 3.1.1 The process of formation and development of Vietnam Joint Stock Commercial Bank for Industry and Trade 3.1.2 Organizational structure and governance structure 3.1.3 Main business results of Vietnam Joint Stock Commercial Bank for Industry and Trade 3.2 The status of credit and bad debt in credit activities of Vietnam Joint Stock Commercial Bank for Industry and Trade 3.2.1 Actual situation of credit activities of Vietnam Joint Stock Commercial Bank for Industry and Trade Credit outstanding classified by: forms of credit; time; customer type and type of business; By business line 3.2.2 Actual situation of bad debts of Vietnam Joint Stock Commercial Bank for Industry and Trade Table 3.3 Bad debt and bad debt ratio in Vietnam Joint Stock Commercial Bank for Industry and Trade for the period 2012-2018 Chỉ tiêu Unit Total tỷ debt đồng outstanding bad debts tỷ đồng Group tỷ đồng Group tỷ đồng Group tỷ đồng Bad debt % ratio VND Billio n Year Year Year Year Year Year Year 2012 2013 2014 2015 2016 2017 2018 333.3 376.2 439.8 538.0 661.9 790.6 864.9 57 89 69 80 88 88 23 4.888 3.769 4.905 4.941 6.980 994 515 352 1.789 1.005 2.468 1.411 2.350 735 811 2.105 2.249 2.085 2.795 3.819 1,47 1,00 1,12 0,92 1,02 9.011 13.69 1.243 2.191 2.550 2.054 5.217 9.446 1,14 1,58 Debts dealt with provision and sold to VAMC 20.86 26.37 30.35 35.40 40.51 46.80 13.42 8 Source: Author synthesized from Annual Report, Management Report of Vietnam Joint Stock Commercial Bank for Industry and Trade 2012-2018) 18 3.3 Current situation of bad debt management of Vietnam Joint Stock Commercial Bank for Industry and Trade 3.3.1 Actual situation of building the issuance policy, strategy of bad debt and procedure for managing bad debts of Vietnam Joint Stock Commercial Bank for Industry and Trade In terms of lending activities; debt classification and provisioning for credit risk; Regarding activities to ensure capital safety; About the process of inspection, supervision of credit extension 3.3.2 Actual situation of structural model of management bad debt in Vietnam Joint Stock Commercial Bank for Industry and Trade 3.3.3 Actual situation of organizing the implementation of bad debt management activities at Vietnam Joint Stock Commercial Bank for Industry and Trade 3.3.3.1 Actual situation of bad debt control and prevention 3.3.3.2 Actual situation of measuring, classifying and dealing with bad debts at Vietnam Joint Stock Commercial Bank for Industry and Trade * Regarding measurement and classification of bad debts at Vietnam Joint Stock Commercial Bank for Industry and Trade * Regarding the handling of losses from bad debts at Vietnam Joint Stock Commercial Bank for Industry and Trade Stock Commercial Bank for Industry and Trade 2012-2018) 3.3.3.3 Actual situation of inspection, supervision and handling of violations 3.3.3.4 Actual Situation of making reports on bad debt management results at Vietnam Joint Stock Commercial Bank for Industry and Trade Vietnam Joint Stock Commercial Bank for Industry and Trade established a system of information and reports serving bad debt management activities, ensuring bad debt management activities with a full database serving comprehensive, effective management requirements and meet the requirements of bad debt management of banks 3.4 Assessing the status of bad debt management of Vietnam Joint Stock Commercial Bank for Industry and Trade 19 3.4.1 Achievements and causes 3.4.1.1 Achievements Firstly, on the formulation and promulgation of policies, strategies for managing bad debts and the process of managing bad debts; Secondly, the organizational structure of bad debt management system; Thirdly, in terms of the organization of implementation of management activities: - Control and prevention; - Measure, classify and handle bad debts; - Activities of inspection, supervision of management of bad debts; - Report on bad debt management results 3.4.1.2 Causes of achievements Firstly, strengthen communication activities on risk appetite and risk culture Secondly, focusing on training, improving the qualifications and ethical qualities of employees Third, increase investment in banking information technology 3.4.2 Limitations and causes 3.4.2.1 Limitations Firstly, on the formulation and promulgation of policies, strategies for managing bad debts and the process of managing bad debts; Secondly, the organizational structure of bad debt management system; Thirdly, in terms of the organization of implementation of management activities: - Control and prevention; - Measure, classify and handle bad debts; - Activities of inspection, supervision of management of bad debts 3.4.2.2 Causes of limitations * Subjective reasons 20 Firstly, the level of compliance with policies, procedures and operations of bank officials in each position is limited Secondly, the banking information technology software supports the management of information technology Early warning information, industry information is still in its infancy Thirdly, the professional qualifications and professional ethics of bank staff are not equal Fourth, the increase in the owners' capital of banks still faces difficulties *Objective reasons Firstly, the business environment is not favorable Secondly, mechanisms and policies of the legal corridor still have inadequacies Thirdly, the inspection and supervision of the State Bank is still limited Fourth, the lack of cooperation of some loan borrowers Fifth, some other objective causes Chapter ORIENTATIONS AND SOLUTIONS FOR STRENGTHENING BAD DEBT MANAGEMENT IN CREDIT ACTIVITIES OF INDUSTRIAL AND COMMERCIAL BANK OF VIETNAM 4.1 Credit development orientation and perspective on strengthening bad debt management of Vietnam Joint Stock Commercial Bank for Industry and Trade 4.1.1 Development orientation of Vietnam Joint Stock Commercial Bank for Industry and Trade to 2025 - Expanding credit scale; - Focus on improving the efficiency and quality of the credit work 4.1.2 Advantages and difficulties in bad debt management of Vietnam Joint Stock Commercial Bank for Industry and Trade in the coming years 4.1.2.1 Advantages The legal framework for banking service business and bad debt 21 management is gradually being implemented according to Basel II international standards: Law No 17/2017 / QH14; Civil Law 2015 and guiding documents; Circular 04/2019 / TT-NHNN; Circular 52/2018 / TT-NHNN; Resolution 42/2017 / QH 14; Circular 09 // 2017 / TT-NHNN; Circular 40/2018 / TT-NHNN; Decision 986 / QDTTg 4.1.2.2 Difficulties - Debt trading market: - The selling price of loan security properties may be higher or lower than the value of the debt (principal and interest) - When applying Decree No 206/2013 ND-CP, dated December 9, 2013 on the management of outstanding debts of SOEs, banks encountered some difficulties 4.1.3 Orientation and Viewpoints on managing bad debts at Vietnam Joint Stock Commercial Bank for Industry and Trade 4.1.3.1 orientations of bad debt management in Vietinbank 4.1.3.2 Viewpoints on bad debt management in Vietinbank 4.2 Solutions to improve and enhance bad debt management of Vietnam Joint Stock Commercial Bank for Industry and Trade 4.2.1 Continue to Improve the formulation and issuance of bad debt management strategies and policies 4.2.2 Continues to Improve the model and structure of credit risk management apparatus Firstly, perfect the early warning system Secondly, perfect internal credit classification and the role of CIC Third, complete the evaluation and quantitative ranking combined with qualitative Fourthly, the role of AMC Asset Management Company (Vietnam Joint Stock Commercial Bank for Industry and Trade) in dealing with bad debts In addition, based on the assessment of the status of the organizational model and the credit management apparatus of the bank and some other banks, NCS proposed a solution to Perfect the organizational model and the credit risk management apparatus with 22 Expected organizational structure and credit structure (there is a change in the organizational structure of parts of TSC) 4.2.3 Improve the organization of the implementation bad debt management activities 4.2.3.1 Strengthen credit risk control and prevention measures 4.2.3.2 Improve measurement, classification and handling of bad debts 4.2.3.3 Promote inspection and supervision of bad debts 4.2.4 Other solutions 4.3 Some recommendations 4.3.1 With the State Bank 4.3.2 With the Banking Association 4.3.3 With the Government and related ministries/branches CONCLUSION After more than 30 years of establishment and development, Vietnam Joint Stock Commercial Bank for Industry and Trade has constantly reformed its organization, management, technology and human resources and made great progress in its business operations However, along with the development of the economy, the macroeconomic disadvantages and the introduction of a series of new products, Vietnam Joint Stock Commercial Bank for Industry and Trade has been facing and will face many losses caused by bad debt On the basis of general application of the dissertation research method "Bad debts management in credit activities of Vietnam Joint Stock Commercial Bank for Industry and Trade" focused on research and implementation to achieve the research objectives Firstly, clarifying the scientific arguments for bad debts and managing bad debts in credit activities of commercial banks In particular, PhD student has focused on clarifying the concept: credit; credit risk; bad debt; manage bad debts Classification, objectives and content of bad debt management Specifically: (1) Develop and issue policies, strategies for managing bad debts and processes for managing bad debts; (2) Organizational structure of bad debt management apparatus; (3) Organize the implementation of bad debt 23 management activities Secondly, studying the bad debt management experience of BIDV and VCB based on which draws some useful lessons that can be applied to Vietnam Joint Stock Commercial Bank for Industry and Trade Thirdly, analyzing the status of bad debts and managing bad debts of Vietnam Joint Stock Commercial Bank for Industry and Trade for the period of 2012-2018 according to the contents established in the theoretical basis chapter From there, draw comments and assessments on groups of results; limiting groups and cause groups (4 subjective and objective causes) Fourthly, on the basis of analyzing and assessing the status of bad debt management in the 2012-2018 period, combined with the opinion of the bank's bad debt manager, PhD candidate proposed some solutions to complete and increase strengthen bad debt management of Vietnam Joint Stock Commercial Bank for Industry and Trade in the period of 2020 - 2025 Completing this thesis, the PhD candidate wishes to contribute a part of his knowledge in proposing feasible solutions to improve the bad debt management activities of Vietnam Joint Stock Commercial Bank for Industry and Trade However, the thesis still has some limitations that have not been completely solved: Firstly, the thesis has not applied quantitative methods in research; Secondly, the number of experts interviewed is limited (there are only 65 experts) The operating area of NH spread throughout the country but the research student has only surveyed in the areas: Hanoi, Hung Yen and Ha Nam Thirdly, due to the sensitivity of the information, the PhD student has not had the conditions to study typical situations of the Bank (the branch has good and not yet good management activities) Because of the above-mentioned limitations, the conclusions drawn from the study may not fully reflect the activities of the Bank's bad debt management These are also the directions for future research issues of the PhD student 24 Due to the limited research capacity, the thesis certainly has many shortcomings, the PhD students hope to receive the contributions of scientists, teachers, and readers in general to make the thesis more complete Thank you so much! 25 ... documents; Circular 04/2019 / TT- NHNN; Circular 52/2018 / TT- NHNN; Resolution 42/2017 / QH 14; Circular 09 // 2017 / TT- NHNN; Circular 40/2018 / TT- NHNN; Decision 986 / QDTTg 4.1.2.2 Difficulties... Commercial Bank for Foreign Trade of Vietnam in the integration process, 2012) - Roland Beck, Petr Jakubik and Anamaria Piloiu (NonPerforming loans What matterSin addition to the economic cycle,... Nguyen Thi Thu Cuc (Managing bad debts in Vietnam Bank for Agriculture and Rural Development, 2015) - Tran Thi Thanh Diep (Managing bad debts in Vietnam Joint Stock Commercial Bank for Industry