báo cáo thực tập giữa khóa COLLATERAL METHODS IN MARITIME BANK HANOI

INTRODUCTION In the context of economic integration, Vietnamese government particularly encourages people to contribute in developing the economy by expanding business scale, starting a business or investing, etc The rise in those activities is tied directly to the increase of loan demand as the fact that not all entrepreneurs have equity capital enough all the time Among ways to have loans, mortgage or pledge assets is one of the most credible and popular The banks, to disburse an appropriate amount of capital in response to properties that people mortgage, have to evaluate accurately properties value otherwise it will leave banks with provisioning shortfalls and additional losses when a loan becomes nonperforming Indispensably, a proper collateral valuation plays a crucial role in the lending and borrowing processes and is important during many stages of non-performance loss resolution This paper is to assist readers an overview of existing collateral valuation methods and its current performance worldwide in general and MSB in particular Meanwhile, the author also provides readers with some recommendations to better implement valuation methods as well as minimize the gap between properties intrinsic value and estimated value calculated by valuers, which helps MSB’s valuers come out with valuation results fastest and most accurate As the limitation of the paper, the author wants to focus more on most used methods applied in MSB corresponding with relevant properties The paper is divided into three chapters as follows: Chapter 1: Overview of MSB and Risk Management Department in MSB which bring readers a brief look of MSB such as who they are, what they do, how they it, and particularly, introduction about MSB Risk Management Department; Chapter 2: The analysis and evaluation of collateral valuation methods applied in general and in MSB in particular; and the last chapter is some recommendations to Valuation management center and MSB CHAPTER 1: OVERVIEW OF MSB AND MSB’S RISK MANAGEMENT DEPARTMENT 1.1 Introduction to MSB 1.1.1 History and development MSB – full name is Vietnam Maritime Commercial Joint Stock Bank - is the first bank in Vietnam to be licensed as Joint Stock Commercial Bank - License No 0001 / NH GP 1991 Launching of MSB marked a breakthrough in the process of economic restructuring of the country and is also a clear evidence for the great development of the Commercial Joint Stock Bank model later MSB establishment is the result of vanguard innovation spirit and sharp mind of the founding partners: Vietnam Maritime Administration, General Vietnam Post and Telecommunications Company, Civil Aviation Authority of Vietnam, and other shareholders That vanguard innovation spirit is always performed throughout MSB’s 28 last few years of building and development in all fields such as technology, products, service In the next period, MSB continued to take steps of large conversion, to be the pioneer in bank operating digitalization so as to bring to customers the best experience Some significant milestones: - On July 12, 1991, Maritime Bank officially opened and operated in Hai Phong City with an initial charter capital of VND 40 billion - 2005: Maritime officially moved its Head Office from Hai Phong to Hanoi, marking a period of strong development since 2005 with 16 transaction points - In 2010: Maritime Bank increased its charter capital to VND 5,000 billion, officially launched a new brand identity with a combination of red and black - 2014: Maritime Bank increased its charter capital to VND 8,000 billion, the Bank has 44 branches, 145 transaction offices, 31 savings funds and subsidiary Maritime Bank conducts procedures for the merger of Mekong Development Bank (MDB), completing and expanding the business model of the Community Bank - In July 2015, Maritime Bank decided to buy Vietnam Textile and Garment Finance Joint Stock Company - TFC - On August 12, 2015, MSB officially admitted to merge MDB, increase its charter capital to VND 11,750 billion, the trading system is nearly 300 points, the number of customers nationwide reaches 1.4 million individual customers, nearly 30,000 guests business goods, 600 large businesses and financial institutions - Being the first bank in Vietnam to link the M-QR feature at the same time with the two largest payment gateways in Vietnam, which are VNPay and Payoo, to help customers connect and pay conveniently with nearly 4,500 buying locations as well as hundreds of different ecommerce websites such as Lotte Mart, B's mart, ThaiExpress, Hotpot Story, NoiBai taxi, Being the pioneer bank using artificial intelligence (AI) in verification and approval of customer credit card application Thereby, customers will have the card within 24 hours without proof of finance, shorten the waiting time of customers and minimize risks for the bank With the advice of Mc Kinsey - the world's leading strategic consulting firm - MSB completed the planning of the new development strategy of the bank, entering the acceleration phase 2019 - 2023 Annual business activities 2018 has achieved impressive results with before tax profit of 6.4 times compared with the profit of 2017 Customer loans increased sharply, nearly 35%, total assets increased by 23% compared to the end of 2017 - 2019: 14/01/2019, MSB implemented major changes in strategy, brand identity and customer experience model to give customers "hard to resist" experiences through principles pillars: Simple - Active - Connected - Understanding; aiming to successfully implement the goal: "Become a reliable bank, understand the most customers and achieve high profits in Vietnam" 1.1.2 Vision and mission ● Vision: MSB becomes the bank that everyone wants to join and noone wants to leave ● Mission: MSB always attempt to everything the best day by day so as to: - For customers, they will always satisfy with convenience and benefits they receive from MSB when choosing MSB’s service - For personnel, they will always be happy and have the best motivation to work in MSB - For shareholders, they will be always satisfied with stable development and breakthrough that MSB bring in - For community, they will always perceive caring and initiative support from MSB as a stable development society 1.1.3 Core value - MSB always puts responsibility first and therefore strives to it right, enough, make it to the end - MSB always listens sincerely to understand customers, partners and colleagues - MSB is equal, respect each other and respect the rules and principles in work - MSBs are always encouraged to innovate and come up with useful initiatives 1.1.4 Objectives and action plans ● MSB aims to become a reliable, customer best-understood and profitable bank in - MSB will achieve a market capitalization of 3.5 billion USD - ROE (Return on equity) accounting for 20%, CIR (Cost income ratio) of 45% - CAGR (Compound annual growth rate) of 30% per year - Using production rate of products per customer - OHI (Organization health index) of at least 80 points ● Action plans: To achieve those objectives, MSB will contribute principles pillars: - Locate different customer values - Multi-channel and optimized distribution network Effective, stable sales force - Deep and wide partnership and ecosystem 1.1.5 The organizational structure ● About the top management system: Headed by the General Meeting of Shareholders (General Meeting of Shareholders elected the Board of Directors and the Supervisory Board) The level of management under the General Meeting of Shareholders is the Management Board of the Specialized Committees (Strategy / Technology / Human Resources Committee / Risk Management / Credit & Investment / Risk Tackling Committee) and Supervisory Board (with the Internal Audit department) according to each work piece, serving as an adviser to the Board of Directors in making decisions to manage the Bank ● About the middle management system: - Leading by MSB’s General Director, and also the Chairman of the Executive Board, directing daily operations of the Bank with specialized banks and Support Departments With a vertical organizational structure, specialized banks are built and operated from the segment to solution / product and sales and support channels The division of business operations of specialized banks helps MSB to ensure the best service quality for each customer segment as well as locate risk appetite in accordance with that segment, improve business efficiency according to each identified point Specialized banks include: - Community banks are the main transaction banks of local SME (small and medium enterprises) - Retail Bank serving individual and business customers - Corporate Bank serves corporate customers (large and SME) - Financial Institutions Bank serving customers in institutions and financial institutions - Credit Management Bank serves strategic customers Supporting and operating activities are carried out by Support Departments to ensure safety and continuous operation, serving business activities of specialized banks so as to achieve the goals of the whole bank in general In particular, launching a new department of Digital Banking helps MSB to have a suitable operating model for the current market tendency, and meeting customers’ needs In addition, the model of Branch / Transaction Office is designed to be located in every area to overcome the disadvantages of the previous intensive vertical model and in accordance with the current scale of MSB 1.1.6 Main activities - Mobilize capital in short-term, medium-term and long term - Receive fiduciary investment and development capital - Lend in short term, medium-term and long term Discount valuable papers, joining capital in businesses, join economic organizations, and some other activities 1.2 Introduction to Risk Management Department As can be seen from the figure above, the Department of Risk Management at MSB is divided into ten centers with the aim to manage eight types of bank risks, which are Credit risk, Market risk, Operational risk, Liquidity risk, Business risk, Reputational risk, Systemic risk, and Moral hazard According to MSB’s principles on organizational structure, the department is assigned with three distinct responsibilities: to develop and manage policies, to organize and exercise risk management frameworks, and to identify and proactively monitor risks CHAPTER 2: THE ANALYSIS AND EVALUATION OF COLLATERAL VALUATION METHODS IN GENERAL AND IN MSB IN PARTICULAR 2.1 Literature review 2.1.1 Collateral valuation Some concepts of collateral valuation Collateral is an asset that a lender accepts as security for a loan If the borrower defaults on the loan payments, the lender can seize the collateral and resell it to recoup the losses Valuation, according to the Cambridge dictionary of finance, is the act of deciding how much money something might be sold for or the amount of money decided on Collateral valuation is a process of determining the present market value of anything used as collateral to support a loan This can create issues with margin requirements; if the asset begins to lose value the borrower would need to supply additional assets to underpin their loans ● Types of collateral Common types of collateral include the following: Real Estate Businesses that utilize real estate - usually a personal residence - as collateral are generally requesting long-term loans of significant size (the company has plenty of other collateral options for smaller loans) The size of the loan under this arrangement is predicated in large measure on the market and foreclosure value of the property, as well as the amount of insurance coverage that the company has taken out on it Purchase Money Security Interest (PMSI) Also known as a chattel mortgage, this option allows the borrower to secure a loan by borrowing against the value of the equipment being purchased Endorser Under this form of collateral, a company secures a loan by convincing another person to sign a note that backs up the promises of the borrower "This endorser is then liable for the note," stated Mark Van Note in ABCs of Borrowing "If the borrower fails 10 to pay, the bank expects the endorser to pay Sometimes the endorser may also be asked to pledge assets." A guarantor loan security is similar to the endorser arrangement, except that the guarantor is not required to post collateral Warehouse Receipts Another option for borrowers is to put up a portion of their warehouse commodities as collateral Van Note explained that with warehouse receipts, "the receipt is usually delivered directly to the bank and shows that the merchandise has either been placed in a public warehouse or has been left on your premises under the control of one of your employees who is bonded Such loans are generally made on staple or standard merchandise that can be readily marketed The typical loan is for a percentage of the cost of the merchandise." Display Merchandise This method of borrowing, which is also sometimes referred to as "floor planning," is similar to warehouse inventory Under this plan, display merchandise such as furniture, automobiles, boats, large appliances, and electronic equipment can be used as collateral to secure loans Inventory This encompasses all the various assets (merchandise, property, equipment, etc.) owned by the borrowing business that could be liquidated to repay the loan Accounts Receivable "Many banks lend money against accounts receivable; in effect, counting on your customers to pay your loan," explained Van Note "The bank may take accounts receivable on a notification or non-notification plan Under the notification plan, the purchaser of the goods is informed by the bank that the account has been assigned and is asked to make payments directly to the bank Under the non-notification plan, customers continue to pay you and you pay the bank." Under this collateral agreement, lenders sometimes advance up to 80 percent of the value of the receivables once the goods are shipped Typically, a lender will buy or advance 70 to 80 percent of a company's accounts receivable balance and in turn assess a finance charge or "discount" on the total amount of the receivable That discount is usually between and percent Savings accounts and certificates of deposit 11 Stocks and bonds Publicly held companies have the option of offering stocks and bonds within the company as security Life insurance Some lenders are willing to accept the cash value of a life insurance policy as collateral on a loan 2.1.2 Collateral valuation methods There are five main methods used when valuating properties: sales comparison, contractors (also known as cost approach), investment (also known as income approach), residual method, and profits method A property valuer can use more than one of these methods when calculating the valuation of a property depending on specific characteristics or the complexity of the property The most prominent and preferred method to use is the comparison methods, as it’s directly linked to current market transactions 2.1.2.1 Sales comparison approach Also known as the market data or comparable sales approach, this method is mostly used for land and residential real estate, especially single family homes Valuation in this method is done by comparing a real estate property with similar properties in terms of sales prices, hence the name of the method The properties used for comparison are called comparable properties (also comparables) Not just any properties work as comparisons, however Properties are only considered comparables if they are very similar to the valuated property and have been sold within the year under ordinary market conditions Generally, three or four comparables are used in this method Obviously, in fact, no two comparables are exactly the same Therefore, some adjustments need to be made to sales prices to come up with the property value These alterations are based on other factors that influence the rental property’s market value The most important of these factors is, you guessed, location Location can significantly alter the sales prices of investment properties Physical aspects of the property also come into play Some of these include the square footage, the quantity of bedrooms and bathrooms, the condition, and the interior of the income property The age of the property is also taken into consideration, as well as the market’s conditions during the purchase Finally, an estimated market value can be created 12 As a matter of fact, the purchase itself is analyzed, to see if the seller sold in a desperate attempt or sold to family 2.1.2.2 Cost approach The cost approach estimates the property value as the value of its components, the underlying land, and the depreciated value of the improvements This method can sometimes be used when comparative, profits or investments methods cannot be used The situation often occurs if a property has a specialist nature, meaning there are no market transactions The method assesses all the costs of providing a modern equivalent property, and thereafter adjusting it to reflect the age of the subject property This method is often referred to as the ‘method of last resort’ due to its unreliability, as the market value is determined by the economic forces of supply and demand, not by the cost of production There are two main branches of the cost approach appraisal The reproduction method works on the basis of replicating the home exactly in terms of quality, building materials, etc On the other hand, the replacement method works on an assumption that the replication uses modern techniques and materials The basic formula for valuing a property using the cost approach is: Property Value = Land Value + (Cost New – Accumulated Depreciation) 2.1.2.3 Income approach Income approach (investment method) can be applied to determine the market value of a freehold or leasehold interest in property from its potential to generate future income It is typically used for the main forms of properties where a tenant is providing the landlord with an investment return on his capital cost (purchasing the building) Using this method, the comparable property transactions of sales and lettings are analyzed to find the revenue The profit is thereafter applied to the future rental income, which is discounted back to the present day, giving the net present value (NPV) This is finally used as an indicator of how much the building is presently worth 13 manipulated - - Easy to use Only useful in certain areas: when the inputs are accurate, with the assumption Residual method - Highly flexible (can add that cost of development is borrowed up to the Gross front Development Cost sub categories if needed) - Applied on a unique- Requires operational business currently property - when it is not possible enough to generate(hotels, restaurants, cinemas…) comparable- Absence of rental evidence - this creating information to Profits method running within the property to be valued reliablyrisk as the rental value cannot be estimated determine the value of a property by the comparison method because there is no similar premise with which they may be - Applied on a property thatdirectly compared has lots of unusual or unique has characteristics differing profit generating characteristics 2.2 The analysis of collateral valuation methods in MSB As the limitation of this paper and limitation of author’s approach to different valuation divisions in MSB as the time limit of internship period leading to the fact that customers during internship period that valuation division received are all retail and SME customers, and the collateral properties they mortgage narrowed in real estate and 16 immovable assets associated with lands, valuable chattel such as vehicle and sometimes are machine and equipment in factories The most used collateral method for these properties are sales comparison approach, cost approach used alone or in combination depending on the complexity of valuation properties 2.2.1 Sales comparison approach performance in MSB Objects of application: This method is preferred to determine the value of homogeneous real estate/ chattel that is commonly transacted in the market Whereby, MSB assign requirements of comparable asset as follows: 2.2.1.1 Requirements of data source Source of market information about comparable assets is assigned in order of confidential level as follows: - Data source is a property that has been successfully traded - Data source is a comparable property that can be found when surveying the current status of valuation assets - Existing data source at the Management Office/ Business Registration Center - Valuation certificate of independent valuation organizations licensed under the law - Real transactions are similar to valuation assets - External information sources such as newspapers, websites, real estate business centers, auction transactions, actual transfer transactions, public auction prices announced by state agencies, information on taxable prices of state agencies, information on contracts, invoices, purchase vouchers and other sources of information verified 2.2.1.2 Requirements of comparable asset quantity At least comparable assets with following requirements: - For valuation of land use rights (and construction works on land, if any): In 03 comparative assets, there must be at least 01 comparison property with actual survey + The photos valuers taking must be clear and easy to determine properties location 17 + Location of properties must be sketched on the Status Check Report + Collect and check the contact information of the owner / provider Encouraging valuation staff to meet the owner / user and collect legal documents of the property compared to the actual survey - For apartments and other assets valuation: Encouraging officials to assess the actual asset comparison 2.2.1.3 Requirements of information quality - Comparable assets should be similar to valuated assets in terms of legal, technical and economic characteristics - Transaction information must be objective, independent, conducted under normal commercial conditions - Information must be carefully verified and evaluated before being used for analysis and calculation - Price comparable assets includes value-added tax - Comparable assets must not overlap with valuated assets - Information of comparable assets must be collected when the property has been successfully traded (or is being purchased or sold in the market) at the time of valuation (or the time closest to the valuation time) with the closest location to valuated properties - In case the information cannot be collected within the time of valuation or closest to the time of valuation, information about comparable assets can be collected up to 12 months before the valuation time 2.2.1.4 Some rules and estimative ratio when adjusting value gap between valuation asset and comparable assets ● Rules: - Comparative assets better than valuation assets: Adjusting down (-); - Assets compared by valuation assets: No adjustment; - Assets compared to lower valuation assets: Adjusting increase (+); - Valuers have to make sure that gap between valuation asset and comparable asset are not excess 15%: 18 ● Maximized adjustable ratio limitation of market value of comparable properties No Type of properties Min Apartment Max -5% +5% Tenement house -15% +15% Land in urban area -10% +10% Land in town/ rural area -20% +20% Producing and business land -15% +15% Agricultural land -20% +20% -5% +5% -15% +15% Vehicle, machine and equipment, inventories Other properties 2.2.2 Cost approach performance in MSB As aforementioned in part 2.1.2 Collateral valuation methods, Cost method is a method of determining the value of appraised assets through the cost of creating an asset with functions and utilities identical or similar to valuation and depreciation properties of valuation assets Situations of application: - There is not enough information on the market to apply sales comparison approach - Plan to create a new asset or when evaluating a newly built or newly built property - To check the results of other valuation approaches Formula: Property estimated value = Renewing costs – total depreciation value 2.2.3 An example of a typical property valuation in MSB Land use right valuation method Sales comparison approach 19 Asset associated with land valuation method Cost approach Determine unit price of land use right Valuation Comparable Comparable Comparable property asset asset asset Min roadway section (m) 5.1 5.5 3.5 5.0 Front roadway width (m) 5.1 5.5 3.5 5.0 Pavement width (m) - - - - 70.0 100.0 150.0 120.0 Direction - - - - Land area (m2) 60.0 70.0 75.1 41.0 Front (m) 5.0 4.8 6.1 4.1 Land depth (m) 12.0 14.7 12.3 10.0 Shape Quite square Quite square No of airy sides 1.0 1.0 1.0 1.0 - - - - Information Distance from main street (m) Chamfer rectangle Quite square Other advantage/ disadvantage factor Legal paper Land use rightLand use right Land use right Land use right paper paper paper paper 5.0 3.5 2.0 5.0 Remaining quality ratio 85% 50% 95% Total constructed area (m2) 248.0 252.0 120.0 205.0 Sales price (VND) 7,500,000,000 5,800,000,000 4,225,000,000 No of floors Estimated price (VND) (including VAT) Unit price for constructing the new one (VND/m2) Land unit price (VND/m2) 6,750,000,000 5,220,000,000 4,225,000,000 5,500,000 4,500,000 6,000,000 79,598,571 65,912,117 74,548,780 20 Adjustment of Min roadway -2% 5% 0% -2% 5% 0% -3% 0% 0% 0% 3% 0% 0% 0% 0% 0% 2% 0% 1% -3% 2% 0% 0% 0% 0% 3% 0% 0% 0% 0% 0% 0% 0% Adjustment of Legal paper 0% 0% 0% Comparable ratio 94% 115% 100% 74,822,657 75,798,935 74,548,780 section Adjustment of Front roadway width Adjustment of Pavement width Adjustment of Distance from main street (m) Adjustment of Direction Adjustment of Land area (m2) Adjustment of Front (m) Adjustment of Land depth (m) Adjustment of Shape Adjustment of No of airy sides Adjustment of Other advantage/ disadvantage factor Price based on valuated real estate Average unit price of land (VND/m2) 75,100,000 Determine unit price of asset associated with land Type of property Duration Economic Remaining year quality ratio 21 Unit price of constructing new asset Area Value House 2.0 30.0 93% 6,000,000 247.6 1,381,608,000 Determine land use right value Unit price Land 75,100,000 Area 60.0 Value 4,506,000,000 Some formula applied: - Estimated price (including VAT) = Sales price * (1 - VAT tax ratio) - Land unit price = (Sale price - Unit price to construct the same new one * Total constructed area * Remaining quality ratio)/Land area - Price based on valuated real estate = Land unit price * Comparable ratio 2.3 The evaluation of collateral valuation methods in MSB 2.3.1 Advantages Sales comparison approach: Applying a sales comparison method in collateral valuation gives MSB a lot of significant benefits First of all, the application of this method brings a lot more speed and time saving than other methods The comparison results are relatively accurate because of the information of buying and selling, real estate transactions as well as chattels are very available on the internet, the valuers can easily search for corresponding property-for-sale information, contact properties owner to ask for more information and then make price consultancy reports sent to customers What is more, by applying this method, the valuation result will be closer to the market value of the asset which is the highest estimated price that a buyer would pay and a seller would accept for an item in an open and competitive market Cost approach: Easy to ask owners for properties information such as: how much did they pay for that assets, how long have they used the asset then estimate unit price to contribute the same new one and come up with appropriate depreciation ratio based on asset using duration 22 2.3.2 Disadvantages and Causes As aforementioned, the formula to estimate land price in sales comparison approach is: Land unit price = (Sale price - Unit price to construct the same new one * Total constructed area * Remaining quality ratio)/Land area Whereby, estimated price is based on the price for sale that other asset owners - who are not qualified enough to evaluate an asset - propose, leading to the fact that the price proposed by comparable assets owners and internet searching results can be wrong Moreover, the risk can come from irrelevant comparable assets Despite internet information availability, valuers are not always find out properties that are completely the same For land and assets associated with land, they almost are different in size - which impacts on asset liquidity An asset with the medium size will be more liquidity than the too small or too large one, one with large front will be more valuable, but the medium front (from 2m-4m) will be more liquidity as the buyers can afford enough; location - which impacts on economic potential of the asset Whereas, in valuation process, valuers have to discount or put up value as some good or bad factor of the comparable asset, which primarily depend on qualification and experience of the valuers Valuers with good qualification and experience have more sense about asset price, leading to the fact that the result they come out are more believable than one with fresh or less experience For some extraordinary assets, which is odd (in abnormal potential, abnormal risks) compared with other assets in the same area, only experienced ones who have evaluated many assets before can find out and then adjust comparable asset factors with appropriate ratios 23 CHAPTER 3: RECOMMENDATIONS 3.1 Prepare human resource training MSB needs to have appropriate staff training policies to improve valuers’ quality In particular, it is necessary to recruit qualified and professional valuers with good moral and communication skills, regularly fostering officials to catch up with changes of law and technology At the same time, valuers’ should be equipped with knowledge in all economic fields in order to expand the valuation activities to various types of security assets After training, MSB should create conditions for valuers to apply that knowledge to their work to effectively exploit new technology In addition, MSB needs to encourage the working spirit of valuation staff through the forms of salary increase, bonus, organization of cultural, sports, entertainment activities For valuers who work enthusiastically, MSB should have appropriate reward policy At the same time, discipline the degenerate and degrading officials, have negative behaviors to damage the bank's prestige and material 3.2 Enhance information quality In order to improve the valuation quality, we must first build and well organize the process of collecting, processing, synthesizing, exploiting and providing information to contribute to preventing and limiting risks MSB needs to focus on this work to avoid misinformation provided by customers in order to satisfy the demand for loans, bringing great credit risks to banks MSB should focus on promoting the application of information technology in their operations In order to keep up with the development of the banking system, the Branch needs to invest in technology development, modernize the customer management system, deploy operating information support system and live services online, ensuring information is updated throughout the system 24 3.3 Build big data infrastructure Besides improving information quality, MSB regularly collects and constantly updates information on properties in the regions and localities as a comparison database The number of comparable assets for each property are not three anymore, but as much as possible to avoid biased results When the data of comparable properties is appropriately enough, it is possible to minimize the difference between the valuation value and the actual value of the asset Not only that, when it comes to understanding the assets and business information of customers, MSB can take that advantage to approach customers for service expanding purpose, attract them by offering suitable recommendation even when the customer has not intended to mortgage yet Big data system should be pre-installed algorithms, quantify elements of qualitative nature to facilitate the valuation process appropriately so that when entering the information of valuation assets, the system can automatically filter out the results which are closest to the valuation asset Thus, it is possible to issue the fastest and most accurate valuation results to customers 3.4 Increase loan inspection and supervision Strengthening control inspection is one of the effective measures to contribute to preventing and limiting credit risks Through checking and controlling activities, the bank can understand the production and business situation of customers, the current status of security assets At the same time, with the bank's control and control, new customers actually use the loan for the right purpose and effectively, avoiding fraudulent loans to invest in other purposes From that, the bank can advise and support customers to bring business efficiency 25 CONCLUSION Retail and SME customers are an important economic part and are increasingly contributing to the country's economic development However, because of the small size, weak financial capacity, low capital, small and medium enterprises and individual customers need capital support through official credit from commercial banks This is a favorable condition for banks to develop their valuation activities for this customer department The bank always focuses on valuation because it directly affects the business results and capital of the bank Therefore, improving valuation quality is a matter of primary concern and an important goal of most commercial banks in general and Vietnam Maritime Commercial Joint Stock Bank in particular Over the past years, MSB has made efforts to innovate and perfect in time to continuously improve the quality of valuation for individual customers and small and medium enterprises and has achieved remarkable achievements However, there are still limitations and shortcomings that MSB needs to focus on in order to enhance its reputation and position in the market Hopefully, with the best efforts, appropriate and appropriate measures will be taken, in the coming time, MSB will make great strides in accomplishing the objectives of improving the quality of security asset valuation as well as expanding mortgage to other types of security assets 26 REFERENCE 2017 Appraisal Methods Used to Assess Property Value, [Online] 1, Available at: https://berkshirehathawayhs.tomieraines.com/Blog/ID/337/3-Appraisal-Methods-Usedto-Assess-Property-Value [Accessed August 2019] Bauze, K., 2019 Collateral valuation in the CESEE region, [Online] 1, 20 Available at: http://pubdocs.worldbank.org/en/170621527522945918/Collateral-valuation-in-the-CESEEregion.pdf [Accessed August 2019] Big Data Solution 2019 Ứng dụng Big Data lĩnh vực ngân hàng (Phần 1) [ONLINE] Available at: https://bigdatauni.com/vi/tin-tuc/ung-dung-cua-big-data-trong-linhvuc-ngan-hang-phan-1.html [Accessed August 2019] Big Data Solution 2019 Ứng dụng Big Data lĩnh vực ngân hàng (Phần 2) [ONLINE] Available at: https://bigdatauni.com/vi/tin-tuc/ung-dung-cua-big-data-trong-linhvuc-banking-phan-2.html [Accessed August 2019] Bùi Trung, D., 2019 Thông báo kết định giá Thông báo kết định giá số 1298016, 1, FARID, J., 2010 IMPORTANCE OF COLLATERAL VALUATION TO CREDIT RISK MANAGEMENT COLLATERAL VALUATION: CREDIT RISK: IMPORTANCE OF COLLATERAL VALUATION TO CREDIT RISK MANAGEMENT, [Online] 1, Available at: https://financetrainingcourse.com/education/2010/12/collateral-valuation-credit-riskimportance-of-collateral-valuation-to-credit-risk-management/ [Accessed August 2019] Investopedia 2019 Collateral [ONLINE] Available at: https://www.investopedia.com/terms/c/collateral.asp [Accessed 17 May 2019] Nguyễn Văn, C., 2018 Hướng dẫn định giá tài sản bảo đảm 8th ed Hanoi: MSB 27 Pryce, M., 2016 Valuation methods explained COLLATERAL VALUATION: CREDIT RISK: IMPORTANCE OF COLLATERAL VALUATION TO CREDIT RISK MANAGEMENT, [Online] 1, Available at: https://www.morganpryce.co.uk/knowledge- centre/exclusivenews-articles/valuation-methods-explained [Accessed August 2019] Vietstock 2019 Ngân hàng TMCP Hàng hải Việt Nam (OTC: MSB) [ONLINE] Available at: https://finance.vietstock.vn/MSB/ho-so-doanh-nghiep.htm [Accessed August 2019] 28 INTERNSHIP DAIRY First of all, I want to give thanks to I would like to express my hearty gratefulness to teachers in Faculty of Business Administration Department and Ms Dao Thu Hien in the Department of Communication and External Relationship, who contacted MSB Human Resource Department and appointed me to the division of valuation Although the vacancy is not directly relevant to the major I have followed as its of great professional knowledge, with an opened mindset that only Business Administration students can be trained after three years, I still enjoyed and attempted to learn as much as possible in both professional knowledge and skills from this division during the time-limit internship period of weeks And generally, I found that this internship period is very necessary and useful for me as I could experience a professional and workplace that only bank can have, but no less active and friendly that only valuation specialists in a bank can have All of personnel here are very welcome me and supportive anytime I come up with a difficulty in understanding something Five weeks is not much but enough for me to generally understand valuation professional and its advancement opportunities in a bank “Not all the unexpected things coming up are bad”, I find it very lucky for me to be appointed in this division from which I find valuation professional is an attractive occupation, suitable to me and worth considering to follow in the future Below are tasks and appointments I completed during the mid-term internship period Some tasks are practiced day by day, therefore, I merge them into weekly scale as follows: Week + 2: - Self-study: Read MSB’s internal material of collateral valuation instruction, valuation policy, and valuation process to have an overlook of valuation career, how a bank operate, to valuate a property what kind of paper a valuer has to collect, what kind of legal papers have to be fulfilled in file - Instructed to implement some part in process of valuation such as: Inform valuation result to customers, input results in MSB’s information storage system, arrange property files for storage, etc Week + + 5: 29 - Go with experienced valuers, practically learn from them so that have a clearer look of the job: in particular, what a valuer has to do, how they communicate with customers - Practice: + Survey land, check land status, evaluate land status, draft valuation results + Survey vehicle, take photos of current status of asset, write up survey report, draft valuation results + Practice a complete process of collateral valuation: prepare legal files of papers, plan to survey, survey, choose and apply suitable valuation method, write up valuation results and then submit to competent authorities to get approval - Practice submitting property files to post-control division who have competence to approve or reject to disburse capital 30 ... Retail Bank serving individual and business customers - Corporate Bank serves corporate customers (large and SME) - Financial Institutions Bank serving customers in institutions and financial institutions... risk appetite in accordance with that segment, improve business efficiency according to each identified point Specialized banks include: - Community banks are the main transaction banks of local... guests business goods, 600 large businesses and financial institutions - Being the first bank in Vietnam to link the M-QR feature at the same time with the two largest payment gateways in Vietnam,