Luận văn thạc sĩ nâng cao năng lực cạnh tranh cho ngân hàng agribank

CAPSTONE PROJECT REPORT ENHANCE COMPETITIVENESS FOR VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT IN INTEGRATION PROCESS (IN 2011-2015 PERIOD) SUMMARY OF THE STUDY Summary content of the study List of figures and tables 2.1 List of main products of Vietnam Bank for Agriculture and Rural Development 2.2 List of abbreviations in the study 2.3 List of references CHAPTER - RATIONALE OF COMPETITION AND COMPETITIVENESS OF ENTERPRISE 1.1 Competition and competitive capacity 1.1.1 Concept of competitive theory of enterprise and concept of competition 1.1.2 Role of competition 1.2 Competitive capacity 1.2.1 Overview of development process of competitive capacity of enterprise .4 1.2.2 Concept of competitive capacity of enterprise 1.2.3 Affecting factors to competitive capacity of enterprise .6 1.2.4 Using forces analysis of M.Porter to evaluate competitive capacity of enterprise .8 1.3 The trend of banks competing in the current period of international economic integration 11 CHAPTER - ANALYZING COMPETITIVENESS OF VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT 16 2.1 History of foundation and development of Vietnam Bank for Agriculture and Rural Development (Agribank) 16 2.1.1 History of foundation of Agribank 16 2.1.2 Development process of Agribank 17 2.1.3 Operation of Agribank 21 2.2 Real competitiveness of Agribank 22 2.2.1 Competitive capacity of Vietnam commercial banks in the world economic integration 22 2.2.2 Evaluating competitive capacity of Agribank via SWOT model .23 2.2.3 Analyzing competitive capacity of Agribank compared to its competitors26 2.2.4 Business performance of Agribank by 2010 37 2.2.5 Analyzing the correlation among competitors and evaluating sustainable capacity of Agribank 45 2.3 Conclusion 47 CHAPTER - SOLUTION TO ENHANCE COMPETITIVE CAPACITY OF VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT 48 3.1 Development orientation of Agribank up to 2015 48 3.1.1 Overview of business environment of Agribank after 2010 48 3.1.2 Vision and development orientation of Agribank up to 2015 49 3.1.3 Applying SWOT model to increase competitive competence of Agribank.51 3.2 Solutions for enhancing competitiveness of Agribank in 2011-2015 55 3.2.1 Groups of solutions on enhancing strong competitiveness .55 3.2.2 Groups of solutions on enhancing weak competitiveness .57 3.3 Recommendations 59 3.3.1 Recommendations to the Government 59 3.3.2 Recommendation to Vietnam State Bank 62 LIST OF ABBREVIATIONS ACB Asia Commercial Bank ADB Asian Development Bank Agribank Bank for Agriculture and Rural Development BIDV Vietnam investment and Development Bank CAR Capital adequacy ratio EAB East Asia commercial joint stock Bank EIB Vietnam Export Import commercial joint stock Bank (Eximbank) L/C The letter of Credit MB Military commercial joint stock Bank Phuongnambank Southern commercial joint stock Bank ROA Return on Assets ROE Return on Equity Tecombank Technological and Commercial Joint Stock VCB Joint stock commercial Bank for Foreign Trade of Viet Nam Vietinbank Vietnam Industrial and Commercial Bank VPBank Vietnam Prosperity commercial joint stock Bank WEF World Economic Forum WTO Word Trade Organization SUMMARY THE CONTENT OF THE STUDY The studied results of the capstone project report will make contribution to supplementing and systemizing theoretical issues on competition and competitive capacity, generalizing competition trend of commercial banks in the coming time, evaluating strengths, weaknesses, opportunities and threats of Agribank, giving out solutions to enhance competitive capacity of Agribank and providing referential document for study and learning LIST OF TABLES Table 1.1 SWOT model 11 Table 2.1 Evaluation on competitive capacity of groups of banks .22 Table 2.2 Equity and total assets of banks as of December 31, 2009 26 Table 2.3 Equity of some leading banks in the world 27 Table 2.4 Increase in charter capital of 05 big joint stock commercial banks in 20082010 period 27 Table 2.5 Domestic commercial banks with investment from foreign partners 28 Table 2.6 Financial ratios of commercial banks in 2010 29 Table 2.7 Proportion of income from fee and interest over the total income of some commercial banks 29 Table 2.8 Market share of big commercial banks in Vietnam in 31 Table 2.9 Table summarizing mainstream products of typical banks 35 Table 2.10 Financial situation of Agribank in 2006- 2010 period 38 Table 2.11 Structure of mobilized capital of Agribank in 2006-2010 period 39 (VND billion) .39 Table 2.12 Proportion of loans by economic sector by economic factor in 2006-2010 period 40 Table 2.13 Proportion of loans by economic sector in 2010 40 Table 2.14 Structure of outstanding loans in 2010 .41 Table 2.15 Structure of foreign currencies 41 Table 2.16 Analyzing the correlation between Agribank and its competitors .46 Table 2.17 Evaluating sustainable capacity of Agribank 46 LIST OF FIGURES Figure 1.1 Porter’s Five Forces model Figure 2.1 Market share of capital mobilization of Agribank in 2006-2008 period .32 Figure 2.2 Market share of outstanding loans of Agribank period 2006-2008 period 33 Figure 2.3 Structure of outstanding loans in 2010 41 Figure 2.4 Structure of foreign currencies 41 Figure 2.5 Affirming the leading position in the network accepting payment and total number of cards issued 43 INTRODUCTION I Reason for selecting the topic Operating in the context that the world and local economies have to face a series of difficulties, challenges, but are well aware of the responsibility of a financial institution playing an important role to the economy, Agribank always takes the lead in seriously and effectively implement guidelines, policies of the Government and instructions of the State Bank of Vietnam in the effort to prevent economic recession, curb inflation, sustain a reasonable growth, stabilize the macro-economy and ensure social safety In 2010, the whole system of Agribank actively deployed Resolution No 18/NQ-CP of the Government on solutions to ensure macro-economy, keep inflation rate low, reach an economic growth rate of about 6.5%, at the same time deploy Decree No.41/2010/ND-CP on the basis of reviewing 10 years of implementing Decision No 67/1999/QD-TTg of the Government on credit policy to develop agriculture and rural area To create a firmer basis for Agribank and the political system to well fulfill the mission of serving “Tam Nong Policy” (Agriculture, rural areas and farmers) under the spirit of Decree No.26-NQ/TU of The Central Committee of the Communist Party of Vietnam term X of the Party on “Agriculture, farmers and rural area”, to boost the industrialization and modernization of rural area of Vietnam in 2011 – 2015 period Since Vietnam became 150th member of WTO on November 7, 2006, Vietnam Commercial banks have implemented many measures to well complete the project of the Government and solutions to enhance their competitive capacity such as raising charter capital, restructure debt, clear balance sheet, renovate administration, improve quality of human resources, invest in technology, etc Besides, the deeper and wider penetration of foreign banks into Vietnam market as well as commitment on opening banking sector in integration process have made the competition among commercial banks in Vietnam tougher and fiercer Although having competitive advantages compared to other commercial banks, Agribank still has a lot of shortcomings as well as has to face numerous challenges ahead To make full use of its advantages on the basis of identifying weaknesses and opportunities brought about by WTO to overcome challenges, we have selected the topic “Strategy to enhance competitive capacity of Vietnam Bank for Agriculture and Rural Development in integration process (in 2011 – 2015) to study and meet the urgent demand Agribank in current period II Objective of the study - Systemizing basic issues related to competition and competitive capacity of commercial banks, affecting factors to competitive capacity and criteria for - evaluating competitive capacity of a commercial bank Analyzing and evaluating strengths, weaknesses, opportunities and threats of Agribank to evaluate competitive capacity of Agribank and other commercial - banks Working out solutions and recommendations to raise competitive capacity of Agribank in integration process III Scope, object and methodology of the study Scope of the study: Operation of Agribank Object of the study - Basic theories on competition and competitive capacity of commercial banks Competition trend of commercial banks and real situation of competitive capacity of Agribank in the previous time – solutions and recommendations to enhance competitive capacity of Agribank in 2011 – 2015 period Methodology of the study There are two methods used in the capstone project report, namely: - Statistical method Analytical method – comparing and generalizing IV Structure of the study Apart from the introduction, conclusion and list of figures and references, the capstone project report is divided into three chapters, including: - Chapter 1: Concept of competitive capacity of commercial banks in the world - economic integration Chapter 2: Real situation of competitive capacity of Agribank in integration - process Chapter 3: Some solutions to enhance competitive capacity of Agribank in integration process CHAPTER - RATIONALE OF COMPETITION AND COMPETITIVENESS OF ENTERPRISE 1.1 Competition and competitive capacity The term “competition” and “competitive capacity” is used commonly and regularly mentioned on economic forums and the mass media, drawing attention of researchers and being analyzed under different angles However, up to now, there have been different viewpoints on competitive capacity on different angles such as nation, enterprise and product At present, there have been not any completely theories on this issue; therefore, there is no “standard” theory on competitive capacity Therefore, to introduce this concept rationally, let’s brief some theories on competitive capacity and the world as well as domestic theories on competitive capacity 1.1.1 Concept of competitive theory of enterprise and concept of competition Nowadays, the term “competition” is used widely in many fields such as economics, trade, law, politics, military, ecology, and sport and regularly mentioned in specialized newspapers, books, economic forums, the mass media and got the attention of many objects and from different angles Especially, in the market economy, competition is not only a common phenomenon but also has a significant implication to the economic development in countries The study of competition has been started very early with some well-known schools such as classic competition theory, new classic competition theory and modern competition theory In current context, competition has turned from antagonistic competition into cooperative competition Competition does not always mean annihilating each other In fact, modern competitive tactics based on competition on quality, pattern, price and supporting services because when there are too many competitors, the removal of other competitors is not simple Competition of an enterprise is the strategy of the enterprise to compete with its rivals in the same sector (S-O) - Agribank’s network is, at the Using its strength to make use Using the strength to limit present, the biggest one both in of the opportunities: threats: scale and quantity, which helps * Strategies to penetrate and * Centralization strategy based Agribank have a plentiful market develop the markets: and create favorable conditions for - Make use on the differences of the - Increase financial strength to Agribank to develop easily in the widespread network to ensure the current and long-term market develop - Agribank is one of the earliest the market, competitive competences of products and services, Agribank banks in Vietnam, also listed in exploit to the maximum - Do researches to develop Vietnam’s bank category so it has of market demands a stable market share with - service products both meeting Maintain and affirm its the demands of realistic plentiful number of customers trademark by the customers and creating the from the rural areas to the urban products’ quality and differences, which can help bring areas services’ quality - Agribank trademark is regarded to - about competitive strength Make use of the support be one of the strongest ones in from the Government and Vietnam other With the support the organizations in order to Government and other international approach and use “low organizations, Agribank has more price” capitals, advanced and technologies more of international developed comprehensively and firmly developed countries 52 of Weakness (W) Weakness and opportunities Weakness and threats (W-T) (W-O) - Sectors to invest are limited; Exploit opportunities to make Make good the weaknesses to mainly focus on agriculture, good the weaknesses forestry and fishery reduce threats Make good the weaknesses to * Strategy to develop new - Suffering from the domination of make use of the opportunities products the Government; therefore, its * Strategies to cooperate * Strategy to propagate the function is not completely because associate of commercial purposes to spread images distribution channel - Management mechanism is still * Strategy to increase managerial competences very weak and less efficient Old * Strategy to train and develop thinking still exists in leading staff, the staffs especially the thinking of relying on the State’s subsidy - The infrastructure and technologies are still backward - Its function is not effective From the above SWOT analysis, we can propose some methods to increase the competitive competences of Agribank as follow: 3.1.3.1 Promote the strength point to make use of the opportunities In current economic situation, Vietnam is highly evaluated by other countries in the world so Agribank needs to grasp and promote its strength to make use the best of its opportunities both at this time and in the future, specifically: Firstly, Agribank is now everywhere in Vietnam In many local areas, there is only one bank that is Agribank To grasp this strength, Agribank can make use of its widespread network to develop its markets, and develop its services and products, exploit the best of the market demands Secondly, Agribank trademark is up to now regarded as one of the strongest and most prestigious trademarks in banking system The point is Agribank needs to maintain and affirm its trademark and use it as a very useful strength Thirdly, Due to its nature of activities, Agribank has received many supports from the Government as well as many other international organizations; therefore, Agribank needs to take advantage of these supports to approach “cheap price” capital sources, at 53 the same time approach advanced technologies in the world 3.1.3.2 Exploit opportunities to make good the weaknesses At present, our country is in its last stage to international integration The integration not only opens new opportunities for Vietnam economy but also creates a lot of opportunities for banking sector in general and for Agribank in particular One way to take advantage of these opportunities is to set up cooperative strategies and associating expansion This strategy not only helps Agribank to approach modern and advanced technologies in the world but also helps Agribank to approach advanced managerial methods in the world Besides, Agribank needs to make use of modern technologies to develop its products and present modern products, high-technology and user-friendly products and make sure of the demands of the customers 3.1.3.3 Using the strength to limit threats With banking system in general, and with Agribank in particular, the point is that how Agribank can overcome all the challenges by available strength, based on the full understanding of existing weaknesses together with making use of opportunities of the market To that, the most important requirement of Agribank is to increase financial strength to make sure the competitive strength of Agribank With financial strength, Agribank can invest in new technologies, and better its infrastructure, and upgrade its equipment; since then, make sure of its efficient and quick functions Take advantage of the support from the Government and other organizations in the world to develop its network, develop its products and researches on developing products and services that suit the realistic demands of the customers At the same time, create the differences to increase competition, limits risks from being occupied the current markets by the competitors 3.1.3.4 Make good the weaknesses to reduce threats The weakness itself is indeed the barrier in the competition of banking sector in general and of Agribank in particular Therefore, to make good its weaknesses and turn them into advantages and opportunities in order to increase competitive strength for the development is the expectation of any organization To so, Agribank needs to: Firstly, diversify products and services, improve service quality based on the advantages of networks, and set up strategies to develop new products… 54 Secondly, improve and increase the managerial roles in banking business function such as: asset management, risk management, personnel management… Thirdly, Increase the quality of the workforce on the basis of setting up and training a new staff with new thought, understanding and recognizing the importance of customers toward the exist and perish and the development of the bank Training an enthusiastic, hard-working and devoted staff for the sake of Agribank’s development Fourthly, Continue to improve reward policies, salary policies and recruitment to attract “intelligent” human force, ensuring to create an energetic and skillful staff to manage and control the corporation now and in the future Finally, One very important factor to create competitive strength that is to concentrate and propose policies and strategies to develop and propagate trademarks and images of Agribank throughout the country as well as in the world 3.2 Solutions for enhancing competitiveness of Agribank in 2011-2015 3.2.1 Groups of solutions on enhancing strong competitiveness 3.2.1.1 Increase financial strength, specifically increase capital scale Available equity plays a great role in the function of a commercial bank because available equity is the factor that decides the financial strength of a bank It also is “cushion against risk”, the factor that creates strength and competitive ability of a bank in the market because it can express available financial competences of a commercial bank itself Therefore, during its functional process, Agribank has to pay attention to increase its available capital and it can apply the following methods to increase the capital scale: Increase capital from internal source, particularly from retailed earnings; increase capital by issuing long-term bonds; increase capital by issuing convertible bonds etc That increase available capital is very necessary, but capital is not the only factor that decides the success or failure of a bank so if increasing capital too fast but banking function is not corresponding, managerial ability cannot keep pace with the capital scale, the increasing capital will not be used effectively Therefore, the important thing is that Agribank has to determine its necessary available capital scale to compensate for risks, at the same time choosing suitable solutions to increase capital to make sure the financial strength and competitive competence of the bank 55 3.2.1.2 Perfect the system, and develop distribution channel The greatest advantage of Agribank is the distribution channel Agribank is everywhere in the country The point is that Agribank needs to make sure the effective quality of this large distribution channel Therefore, to promote effectively its available advantages on network and distribution channel, Agribank needs: - Check and observe regularly its distribution networks - Concentrate on licensing new branches to be founded and the transaction agencies have to function comprehensively and harmoniously among branches of Agribank One very efficient distribution channel is ATM service Agribank needs to open and upgrade its ATM system into “miniature bank” spread all over the provinces, cities and densely populated areas Set up overseas banking system to serve quick and safe international payment demands Together with opening traditional distribution channel – a system of branches and the diversification of current distribution channel plays a role as one factor that creates the success in the more and more violent competition about service and product provision This means diversifying customers’ choices and reducing cost and increasing profits for the bank In the coming time, Agribank focuses new distribution channel as: - Phone Banking - Internet Banking - Mobile Banking - Call – Center 3.2.1.3 Other solutions - Propagate the trademarks from the tiniest thing: daily tools of the staffs in the office (pen, hand-book, uniform…) to bigger things as interior decoration, trading desk, means of transportation, color of the uniform etc - Create the linking between Agribank and other banks and other domestic and foreign organizations with the target to promote the strength from the linking by taking advantage of the advantages of other organizations to fill up its weaknesses and at the same time promote the best of its advantages To corporate to implement cross-selling products, develop plentiful and special services such as wage payment via ATM 56 3.2.2 Groups of solutions on enhancing weak competitiveness - Implement seriously policies, guidelines of the Government and the State Bank about monetary policies in 2011, making contribution to stabilize macro economy, impulse sustainable development - Promote capital mobilization to compensate for the growth rate difference of capital source and account outstanding in 2010, ensuring the stabilities in payment and meeting the capital demand to invest in agriculture and production, collecting and processing export products, committed projects, L/C mature payment, continue to perfect the mechanism to encourage capital mobilization Branches using headquarter capital must have plans to reduce its investment in some cities and focus their investment capitals into prior fields in rural areas - Managerial activities of the business need to renew and strengthen from the Headquarter to branches Increase the capital and stabilize payment are the leading targets; proactively follow closely the market performances, well manage in and out cash flow at every branch and the whole system to balance the capital safe and effectively; strict and serious punishment policies towards the Directors and the Branches that break the business targets assigned by the headquarter; Implement firmly and quickly in management to complete well business plans in 2011 right from the very first months - Organize closing conference to review business operation, closing conference to review special subjects in 2010: plans, credits, financial analysis, servicing, internal testing and controlling… to analyze and evaluate comprehensively the growth situation, financial results and service, products development, international payment, foreign currency trading, collecting risk-processed debts… of every branch and the whole system in 2010 to have suitable solutions to increase financial competences in 2010; 57 - Continue to open cooperation, combining payment with other big organizations and enterprises; impulse capital mobilization in urban areas to transfer to the rural areas, make sure of capital requirement to serve the agriculture and the rural, committed projects, collecting more capital sources to lend small and medium sized enterprises, and export enterprises; - Foster business functions in capital market and precious documents, increase the efficiency of using capital and payment abilities of the whole system - Set up projects and routes to implement circular 13 and 19 of State bank about safe rate in the activities of credit organizations; submit governor of State bank and other Departments and Ministries to supplement chartered capital 2011 - Cooperate closely with Agricultural Affair, Women Union to implement well the decree 41/2010/NĐ-CP, and the project to open and increase the efficiency of agricultural credits Implement projects to develop services and products; set up and implement projects of expanding and developing international relationships, extending and increasing the efficiencies of foreign projects during the period of 2010 – 2015 - Checking, analyzing, evaluating and promoting methods to increase the quality of credits; firmly to revoke bad debts, invested but inadequate procedure debts, process and regulation violation after being checked, risk-processed debts; Strictly fine communities and individuals who break the law - Complete to convert Agribank into one member limited liability company with 100% State capital; check, correct, supplement and perfect mechanisms, regulations on management, suitable professional process with new managerial model, and with Decree No 59, Credit Institution laws and international practices - Organize to sum up and evaluate the performances of business development project in urban areas type I and II and other 58 regions Evaluate comprehensively functions of branches within Hanoi and Ho Chi Minh areas on: business environment, functional situation, management capacities, practical proposals, including the merging of some less effective branches - Implement well observing management, evaluate the efficiency of investment performances and other operations of subordinate companies, increase the efficiencies and safe of the investment capital of Agribank; continue to submit the proposals to restructure operations and implement solutions to deal with difficulties for the business operations of financial leasing companies; - Promote researches to develop banking technologies according to modern banking system IPCAS phase II to develop applications and services with best quality suitable with the demands of the market, increase better customer services to increase external sources of credits and competitive position of Agribank Research to develop banking services to serve the agricultural and rural areas - Continue to strengthen the organization and the apparatus at the Headquarter and branches; check and evaluate and have solutions to reorganize the functional network; set up and provide further training for the skilled staff who can meet the development demand of Agribank; pay attention to practice the virtue of the cadres, and the employees in order to serve better all the customers throughout the country Set up training strategies of the whole sector, focus on training human forces and developing new banking services and products - Better and develop project of business development strategy during the period of 2011-2015, vision 2010 and project of trademark development strategy during the period of 2011-2015 - Organize well the activities of unions, propagate emulation movements, make punishment and reward work become a very 59 important tool in encouraging cadres and employees to complete the business mission in 2011 and 60th anniversary of the founding banks 3.3 Recommendations As analyzed above, there are many objective factors lying outside the control of the banks, having influences on the development of retailed banking services Therefore, beside efforts of Agribank, it is very necessary to have the thorough support from the Government, the State Bank and other concerning departments and ministries 3.3.1 Recommendations to the Government The attention of the Government plays a very important role toward all sectors and all levels because the Government can create general supports on taxes, legal documents, socio-economic policies… 3.3.1.1 The Government needs to create quickly a full legal corridor for banking operations At present, policies and laws of the State Bank also limit considerably the development of retailed banking services Regulations inclined to procedure and administrative formalities make the banks whether they like it or not find it difficult to reduce these procedures for the customers To present a new product, the banks have to pass steps and steps of administrative formalities such as apply for a license, submit… To develop retailed banking services, it is necessary to have a simple and practical mechanism that can make sure of the benefits of the customers Especially, relevant departments need to be the leading in using retailed banking services and products such as cards, way payment via ATM… Objectively, now, it is the political environment that is evaluated to be incomprehensive and that has not created condition for the development of retailed banking services Although the Government has sped up to correct its policies, banks still function in incomprehensive, overlapping and even backward legal environment Many banks that want to have some innovations have to think of “dodge the law” The Government needs to support and create mechanisms to assist banking sector develop That the State Bank has policies to increase the necessary equity for the extension of the network from 20 billion/branch to 70 billion/ branch is a difficult problem for banks that want to expand their network quickly At present, commercial 60 banks also expect direct incentive mechanisms such as: local authorities create conditions for the banks to preferentially buy or lease business premises in good location, create prior conditions on taxes, support the banks at low cost in propagating, universalizing, promoting and marketing banking services and products to the whole community Besides, the Government needs to create mechanisms that themselves have great effects on supporting banking sector such as promulgate regulations on enterprises and individuals to trade through banks, be prior in tax management for enterprises with high rate of trade through banks, not accept great items of expenditure or big trades not through banks… To increase the competitive advantages of domestic commercial banks, beside the attempts of the banks themselves, state authorities need to create a comprehensive legal corridor, create conditions for retailed services to develop Concerning to retailed services means to concern the civil system between the borrowers and the lenders This civil relationship needs institutionalized clearly and explicitly in regulations and duties of the borrowers Civil Law, document to instruct Civil Law, Land Law… need to have concrete regulations to protect the right of the lenders At the same time, law enforcement agencies also have to pay attention to solve disputes, and support and assist banks to take deadweight debts back Besides, as for the market, it is necessary to form market between the buyers and the sellers That may be the secondary market toward consumption loan products For example, resale market of such products as cars, motorbikes, buildings, apartment block so that when the borrowers cannot pay the debts, banks can resell the real estate and movables through this market to take the debts back quickly Together with the participation into WTO, regulations on banking operations should be changed and internationalized The development of technologies has brought some new banking services into the world with different trading methods and process compared with traditional products; therefore, legal documents by the State need correcting suitably with the development of science technology Particularly: - Soon modify Accounting and Statistics Ordinances, supplement new regulations on setting up accounting terms suitable with banking services that are carried out by computer technologies Regulate clearly by laws documents, banking bills managed by the State Bank with the same sample 61 - Do researches to expand ways for Decree 44/2002/QĐ-TTG on E-documents and E-signature such as regulations on the authorities that are responsible for storing Edocuments, or regulations on basic level for legal standards of the coding devices used in banking system - The operations of payment cards are the explosive retailed banking ones at present The Government needs to have legal regulations that are directly related to concerning behaviors to be the basis to deal with when disputes and risks occur Criminal law needs to regulate specified crimes and punishment framework for cheating, making and consuming fake cards 3.3.1.2 The policies improving socio-economic environment Habit and psychology as consuming of people can change following to their income and economic conditions When economy develops, it leads to improved living standard Along with it, intellectual standard of people increases, so most of them have more opportunities to approach modern banking services They are maintaining stable economy, suitable inflation index, encouraging foreign investment, developing tourism and industry, raising income of laborers and civil servants that the Government can stimulates the growth of retailed banking services In addition, the Government needs to build the payment policies without cash like paying earnings for laborers through banking accounts, implementing vending machines…so that people can get accustomed to paying through machines 3.3.1.3 Creating modern technical and technologic environment The technologic premise in Vietnam is still low in comparison with others countries in the world, therefore, the Government should pay attention to develop technicaltechnologic infrastructure It should strengthen technology transfer from developing countries basing on learning and owning those lines Moreover, the Government should set up training strategies for technical experts, especially in IT sector The development of post and telecommunication is the premise and foundation so that commercial banks modernize technology and develop new banking services In regard with individual customers, subscriber and using fee of internet and telephone are still too high, which does not stimulate people to utilize online services Hence, the development of the post and telecommunication is a significant content which needs 62 the attention of the State, especially within the economic development strategies of the country 3.3.2 Recommendation to Vietnam State Bank As the bank of others, Vietnam State Bank plays an important role in strategic developing orientation of banking services and brings out the supporting policies in the field of implementing new services of commercial banks According to the Law of credit organizations, Vietnam commercial banks can put many banking services in practice In order that commercial banks possibly diversify retail business, here is the recommendation to Vietnam State Bank: 3.3.2.1 Supplement, complete the policies, mechanism; Promote application and perform new banking business On the basis of the laws of the State, it needs to complete and synchronize the system of all documents under the law which guideline commercial banks to operate legally with the trend of international integration Documents and mechanism needs to be ahead of technology, orient its, or at least, they should be amended timely so as to keep with developing speed of technology, ensuring safety for modern banking services Promulgating mechanism on banking service management, making chances for development of system of retail service of commercial banks Handing over power to commercial banks to decide which service needs fee according to the commercial principles instead of controlling service fees regulations which reduce competitive capacity 3.3.2.2 Maintain strategic orienting role and direct the process of performing retailed banking services of commercial banks seriously So as that modern banking services are popular with people and they have habit of transaction through banks, it is not depend on each commercial bank but the general policies of the State Bank It should control the general NHBL service developing strategy of commercial banks in macro extent It also needs to ensure harmony general structure of the whole industry, avoiding “my house is my castle” and still guarantee the common profit for each bank as well as setting up the healthy competitive environment The general orientation of the State Bank will help commercial banks update all financial information most fast, associate together in the same sector, avoiding 63 coincide investment and waste For example, in the sector of card, it should establish Vietnam card association directly under the State Bank as a managing organization or payment center among banks Therefore, Department of Banking developing strategy has to show its role to ensure the power of unique state administration in currency and credit business of the State Bank 3.3.2.3 Modernize banking technology Vietnam State Banking needs to go ahead in modernizing banking technology Firstly, it should focus on non-cash payment affair as well as strengthen quality of payment tools and measures strongly The State Bank ought to give supporting and encouraging policies for commercial banks in self-investment, cooperation, capital mobilization for infrastructure, and banking technology modernization In this sector, the Department of banking IT has important role in researching and selecting advanced technologies and soft-wares in domestic and foreign markets in order to consult and orient commercial banks Chapter III goes to the end with the solutions to enhance competitive capacity of Agribank in integration trend The mentioned solutions just have general meanings but not in details However, it is the basic foundation for the developing orientations and specific resolutions for the growth of a Agribank in the period of 2011 - 2015 64 CONCLUSION In the situation of integration, competition is dispensable and the decisive factor of every organization In order to compete with good result in domestic market and then go to foreign environment, Agribank needs to make much more effort in enforcing, increasing financial capability, administrative qualification and human quality It should apply modern technologies to diversify products and services, speed up its brand in both domestic and international markets Due to limitation in many aspects, the author has just introduced some general solutions to complete and strengthen competitive capacity of Agribank on the basis of its strengths, weaknesses, opportunities and threats, within the comparison with other banks in the country as well as in new integrating trend which banks have to aim to so as that they can get the status in market Because of limited time and other sources, the process of performing this Capstone project report cannot avoid some certain shortcomings which needs supplemented to complete Hence, I would like to receive the concern and ideas from The Council, lecturers and classmates of GAMBA_M09 so that this researching Capstone project report can be better 65 REFERENCES Competition in banking sector, projects supporting multi-dimensional trade II, reports on regulations related to competition in banking sector of Vietnam, December 15, 2006 implemented by Ministry of Industry and Trade and European Commission Michael E Porter, Competitive Strategy (1996), Hanoi Science and Technology Publishing House Nguyen Thi Thanh Huyen (2006), “Banking sector after WTO accession: Experience from China and reality in Vietnam” http://www.vneconomy.com.vn The State Bank of Vietnam, Project on Developing Banking Sector to 2010 and Vision to 2020, and related articles at http://www.sbv.gov.vn Banking Magazine editions in 2008, 2009 and 2010 Banking Technology editions in 2009 and 2010 Annual reports in 2007, 2008, 2009 and 2010 of commercial banks Income statement of Agribank in 2010 10 Websites of commercial banks: http://www.acb.com.vn; http://www.sacombank.com.vn; http://www.eib.com.vn; http://www.bidv.com.vn; http://www.vcb.com.vn; http://www.agribank.com.vn 66 ... Development (Agribank) 16 2.1.1 History of foundation of Agribank 16 2.1.2 Development process of Agribank 17 2.1.3 Operation of Agribank 21 2.2 Real competitiveness of Agribank. .. Evaluating competitive capacity of Agribank via SWOT model .23 2.2.3 Analyzing competitive capacity of Agribank compared to its competitors26 2.2.4 Business performance of Agribank by 2010 37 2.2.5... business environment of Agribank after 2010 48 3.1.2 Vision and development orientation of Agribank up to 2015 49 3.1.3 Applying SWOT model to increase competitive competence of Agribank. 51 3.2 Solutions