LV Thạc sỹ_Current situation and solution for the development of personal lending activity in HSBC hanoi branch

I ACKNOWLEDGEMENT With the grateful help from National Economic University, I have a chance to intern at Hong Kong & Shanghai Banking Corporation (HSBC) Ha Noi Branch Studying at National Economic University, especially in Advanced Program has provided me large range of academic knowledge under international view Besides, three month internship in HSBC Hanoi branch was an actual challenge for me but it also was a helpful learning course of reality First and foremost, my utmost gratitude to PhD …, my supervisor, whose sincerity and encouragement I will never forget Mr… has been guides and supports me from the initial to the final level, as well as helps me to accomplish this thesis Secondly, I would like to thank my colleagues at HSBC Hanoi Branch for their useful material and guidelines during the time I was working on important analysis of my thesis Lastly, I offer my regards and blessings to all of my family and friend who supported me in any respect during the completion of thesis Despite of all the help and effort I have, mistakes may remain in the following page There for, I really expect suggestions from the supervisor to make this report better II TABLE OF CONTENTS ACKNOWLEDGEMENT .I ACKNOWLEDGEMENT .I ABBREVIATION .V ABBREVIATION .V LIST OF TABLES .VI LIST OF TABLES .VI LIST OF FIGURES VII LIST OF FIGURES VII INTRODUCTION VIII INTRODUCTION VIII 1.Rationale VIII Research scope .IX 3.Research Methodology IX 4.Research structure .IX CHAPTER I: OVERVIEW ABOUT LENDING ACTIVITY TO PERSONAL CUSTOMER IN COMMERCIAL BANK CHAPTER I: OVERVIEW ABOUT LENDING ACTIVITY TO PERSONAL CUSTOMER IN COMMERCIAL BANK 1.1.Definition and basic activities of commercial bank 1.1.1.Definition of commercial banks 1.1.2.Basic activities of commercial bank .1 1.2.Lending activity in commercial bank 1.2.1.Definition and characteristics of lending activity in commercial bank 1.2.2.Classification of loans in commercial banks 1.3.Lending activity for personal customer in commercial banks 1.3.1.The concept and characteristics of lending activity to personal customer.5 1.3.2.Loans Classification for personal customers 1.3.3.The process of lending to individual customers in commercial banks 11 1.3.4.Development lending to personal customer 15 III 1.4.Factors affecting to the development of personal lending activity in commercial bank 19 1.4.1.Objective factors 19 1.4.2.Subjective factors 22 CHAPTER 2: CURRENT SITUATION OF PERSONAL LENDING ACTIVITY IN HSBC – HANOI BRANCH 26 CHAPTER 2: CURRENT SITUATION OF PERSONAL LENDING ACTIVITY IN HSBC – HANOI BRANCH 26 2.1 Overview about HSBC – Hanoi branch 26 2.1.1 Formation and development process of HSBC – Hanoi branch 26 2.1.2 Organization structure 28 2.1.3 Business results of HSBC Hanoi branch in period of 2009 – 2011 .30 2.2 Situation of personal lending activity in HSBC Hanoi Branch 36 2.2.1 Lending policy for personal customer in HSBC Hanoi branch .36 2.2.2 Number of personal customer in HSBC Hanoi Branch 38 2.2.3 Structure of lending for personal customer in HSBC Hanoi Branch .39 2.2.2 Quality of personal lending activity in HSBC - Hanoi branch 43 2.3 Evaluation of personal lending efficiency in HSBC Hanoi branch 46 2.3.1 Achievement 46 2.3.2 Limitations and cause 47 CHAPTER III: ORIENTATIONS AND SOLUTIONS TO IMPROVE THE QUALITY OF PERSONAL LENDING ACTIVITY IN HSBC HANOI BRANCH 51 CHAPTER III: ORIENTATIONS AND SOLUTIONS TO IMPROVE THE QUALITY OF PERSONAL LENDING ACTIVITY IN HSBC HANOI BRANCH 51 3.1 Orientations for lending to individual customer of Hanoi branch 51 3.1.1 The long-term orientation of HSBC Hanoi branch .51 3.1.2 Business plan in 2012 51 3.1.3 Objectives of lending to personal customers of HSBC Hanoi branch 52 3.2 Solutions to develop personal lending activity in HSBC Hanoi branch .52 3.2.1 Improving branch’s staff quality 52 3.2.2 Widening the network of branch 53 3.2.3 Promote the branch's marketing activities .53 IV 3.2.4 Improve the quality of loans for personal customers 54 3.3 Recommendations .55 3.3.1 Recommendations to State Bank 55 3.3.2 Recommendation to HSBC Vietnam .55 3.3.3 Recommendations to the state agencies and government 56 CONCLUSION 57 CONCLUSION 57 REFERENCES A REFERENCES A V ABBREVIATION HSBC: Hong Kong and Shanghai Banking Corporation SBV: State Bank of Vietnam WTO: World Trade Organization ROA: Return on Assets ROE: Return on Equity BOD: Board of Director VI LIST OF TABLES TABLE 2.1: FUND MOBILIZING OF HSBC HANOI BRANCH 2009- 2011 32 TABLE 2.2: BUSINESS RESULT OF HSBC HANOI BRANCH 35 TABLE 2.3: NUMBER OF PERSONAL CUSTOMER IN HSBC HANOI BRANCH 2010-2011 38 TABLE 2.4: CREDIT ACTIVITY OF HANOI BRANCH 39 TABLE 2.5: STRUCTURE OF PERSONAL LOANS PRODUCT IN 2009-2011 40 TABLE 2.6: OVERDUE DEBT RATIO THROUGH PERSONAL LOAN PRODUCTS OF BRANCH IN PERIOD OF 2009-2010 44 TABLE 2.7: SITUATION OF BAD DEBT IN PERSONAL LOANS 45 TABLE 2.8: PROFIT FROM PERSONAL LENDING ACTIVITY (UNIT: MILLION VND) 45 VII LIST OF FIGURES FIGURE 1.1: PROCESS OF LENDING TO INDIVIDUAL CUSTOMERS IN COMMERCIAL BANKS .12 FIGURE 2.2: STRUCTURE OF HANOI BRANCH 28 FIGURE 2.3: CAPITAL MOBILIZATION IN RECENT YEARS 31 FIGURE 2.4: BUSINESS RESULT OF HSBC HANOI BRANCH IN PERIOD 2009- 2011 35 FIGURE 2.5: PERSONAL OUTSTANDING LOANS 2009-2011.41 VIII INTRODUCTION Rationale Opening up economy and accessing to World Trade Organization has facilitated Vietnam's further global integration Beside, Vietnamese enterprises have a huge advantage to approach the large range of opinions, business models from developed country as well as foreign firms which have been operated in Vietnam As a part of the world economy, the inevitable trend of development of Vietnam’s banking sector in recent year is developing in the retail banking and wealth management model The lending activity for personal customer is a part of retail operations of the bank It not only generates large and stable income base on the large number of users but also increases bank’s image in the eyes of customer as well as contributes to the sustainable development of the bank in the long term From the past to present, this trend has been a long term orientation of the majority of join stock bank in Vietnam The foreign banks such as ANZ, HSBC also promote many strategies to join in this market after establishment with 100% foreign capital Lending activity to personal customer is still quite small compare with its potential It is seem not to be exploited fully by commercial bank in Vietnam According to statistics from State Bank of Vietnam (SBV), only about 20% of populations have personal account and use banking service Few years ago, personal lending activity has many limitations because of the low technology which doesn’t meet the requirement of product, and the restricted perception of bank against personal loans which be seen as a risk perspective Most of domestic commercial banks have a wide net-work activity primarily focus on enterprise lending activity, and the market for personal loans is not considered significantly This is an opportunity for foreign banks which have IX strong capital, well liquidity and diversified revenue when they can take an objective to serve the small to medium loans, including individual customers Aware of the important and benefits from the development of personal lending activity, and the working process in HSBC Hanoi branch, I select the topic “Current situation and solution for the development of personal lending activity in HSBC Hanoi branch” for my thesis research Research scope The overall aim of thesis is giving an overview of the theoretical issue in personal lending activity of commercial bank as well as mentioning about current situation of personal lending activity in HSBC Hanoi branch from 2009 to 2011 Research Methodology In order to conduct the research, comparative, statistics, mathematics method, economic analyses are used Moreover, secondary data also collected from various sources such as website of SBV, HSBC bank… Simultaneously with secondary data, primary data also need Research structure The thesis includes three chapters: CHAPTER I: Overview about lending activity to personal customer in commercial bank CHAPTER II: Current situation of personal lending activity on HSBC Hanoi branch in period of 2009-2011 CHAPTER III: Solution and Orientation to improving personal lending activity in HSBC Hanoi Branch CHAPTER I: OVERVIEW ABOUT LENDING ACTIVITY TO PERSONAL CUSTOMER IN COMMERCIAL BANK 1.1 Definition and basic activities of commercial bank 111111 Definition of commercial banks Bank is a type of institution that has an important role to the whole economy in general and for the each local community in particular Bank can be defined in term of the economic functions it serve, services it offer to customer, and the legal basis for its existence Along with the development of the economy, the number of financial institutions has provided many types of banking services such as lending, investment trust, and saving deposit On the contrary, commercial banks also expand and diversify its range of services Therefore, it is easy to be confusion between types of banks and other financial intermediaries Peter Rose has defined commercial banks as follows: "Bank is a type of financial institution which mostly offers a portfolio of diversified financial services, especially credit, savings and payment services, and perform many finance functions than any other business organization in the economy” Commercial bank is an institution which has several of activities like accepting deposits, making business loans, investment, and other related service In more detail, major operations of commercial bank are: mobilization, lending, investment, payment, foreign exchange, and others business 111111 Basic activities of commercial bank 1.1.1.1 Mobilization This is the initial operation which considered as the starting activity for commercial banks Bank can mobilize fund from individual or organization under customer’s demand deposit, fixed deposit, and mobilize from other commercial 44 Table 2.6: Overdue debt ratio through personal loan products of branch in period of 2009-2010 Product Home loans Overdue debt ratio Loans for purchasing car Overdue debt ratio Loans for other consumption Overdue debt ratio Loans for staff Overdue debt ratio Loans for Overdraft Overdue debt ratio Loans for Visa card Overdue debt ratio Overdue debt ratio in total Outstanding loan status 2009 2010 2011 343,356 515,643 775,548 1.5% 1.3% 2.0% 89,928 106,886 121,153 1.5% 1.01% 1.7% 97,820 105,998 141,183 1.5% 1.2% 1.3% 77,871 95,993 101,247 0.02% 0.01% 0.15% 27,932 44,875 53,244 0.32% 0.43% 1.01% 81,356 112,876 166,005 0.6% 0.9% 0.4% 1.1% 1.01% 1.56% (Source: annual lending activity report of Hanoi branch) From the table above we can see that overdue debt ratio through almost personal loans product in Hanoi Branch is always below the limit of overdue debt ratio according to the regulation of HSBC Vietnam (2%) Overdue ratio seems to be slightly decreasing in 2010, from 1.1% to 1.01%, but increase again in 2011, 1.56% Overdue of home loans products have the highest debt, and increase from 1.5% to 2.0% from 2009 to 2011 The reasons of this fluctuation in home and automotive products loan partly because of two reasons Firstly, in 2009, lending condition for personal customer to purchasing home or car seems easy, and branch does not manage the charge of customer tightly Second, in 2011 the hard economic context has affected the customer's capital to pay debt In 2011, ratio of overdue debt to total outstanding personal loans only stood at 1.56% which is lower than that in other branches 2.2.2.2 Bad debt 45 Table 2.7: Situation of bad debt in personal loans Indicators 2009 Amount of bad debt (million 64,406 VND) Bad debt ratio 1.05% 2010 11,556 2011 103,003 0.85% 1.28% (Source: annual lending activity report of Hanoi branch) From the data above, we can see that the fluctuation of bad debt is quite similar with the overdue debt ratio It decreases slightly in 2010 and increases remarkable in 2011 2010 is a year that branch have a high efficiency of personal lending activity with is falling bad debt (from 1.05 in 2009 to 0.85 in 210) In general, bad debt ratio for personal loans of branch is lower compare with other branches of HSBC and other banks in commercial bank system In 2011, bad debt ratio of branch was 1.28% This is a good number for branch, especially in time of economic recovery 2.2.2.3 Profit from personal lending activity Table 2.8: Profit from personal lending activity (unit: million VND) Figure Net operating income from personal lending activity Net operating income from lending Profit ratio of personal lending activity 2009 292,438 2010 534,203 2011 987,129 1,928,930 15.1% 2,937,129 4,093,121 18.18% 24.11% (Source: annual lending activity report of Hanoi branch) From the table above, we can see the positive net profit income from lending activity in general and personal lending activity in particular of branch in recent year This is a good signal for branch in the difficult economic condition in three recent years Profit ratio of personal lending increase over years, from 15.1% in 2009 to 24.9% in 2010 and reach to 26.6% in 2011 46 2.3 Evaluation of personal lending efficiency in HSBC Hanoi branch From analyzing personal lending activity of HSBC Hanoi branch, I have come up with some personal observations, about the achievable advantages and existing disadvantages of personal lending efficiency Thus, I want to demonstrate my idea in more detail 2.3.1 Achievement In recent years, with a strongly strategy and ongoing efforts of all staff, HSBC Hanoi Branch has got some remarkable achievements The first achievement is the fast increasing of number of personal customer as well as amount of outstanding loans in all personal product loans of branch from 2009 to 2011 This demonstrates the positive impact of branch in the eyes of customer Hanoi branch has prolonged such irreplaceable relationships with customers with a strong ground of understanding and faith With the orientation in focusing and developing personal lending activity in recent year, the outstanding loans to personal customer increase instantly over years The growth rate in outstanding loans is always at high rate (79.4% in 2010 and 60.1% in 2011) In 2011, even many commercial banks were opened with many incentives and promotional campaigns to gain market shares, many customers remained loyal with HSBC Hanoi branch Secondly, the rate of overdue and bad debt ratio is still low compared with other branch and bank Both overdue and bad debt decrease significantly in 2010, and slightly increase in 2011 Bad debt rate fell from 1.05% in 2009 to 0.85% in 2010 In 2011, outstanding overdue loans was 3.9 billion, but the ratio of overdue debt to total outstanding personal loans only stood at 1.56% which is lower than that in other branches In brief, activity of controlling overdue and bad debt is always implemented well to be active in personal lending activity It also means that personal lending in Hanoi branch has good quality 47 Beside, net income and profit ratio from personal lending activity of HSBC Hanoi branch have increases constantly This good result may come from the deployment of many favorable lending policies for personal customer in HSBC in recent years 2.3.2 Limitations and cause 2.3.2.1 Limitations Hanoi branch has achieved a good result; however, some limitations are still remaining The efficiency of personal lending activity is still at low level as the following details: Firstly, the scale of personal lending in branch is quite small The percentage of individual outstanding loans is at the low level It only account for 24.4% in total outstanding loans in 2011, and 27.8% in 2010 Moreover, structure of personal loan products is not really diversified compare with other branch of other commercial banks Branch has deployed only about six main products for personal lending structure Many products were developed but not yet put into effective in reality For example the assessment of customer with limited product or regulations on loans to customers is unable to meet the need of customer of take much time to provide product Thus the product quality is not high, yet creates a usable and convenient for the borrower Secondly, the object and scope of personal lending activity are still limited The number of personal loans increases over the years, but compared to its potential and the number of residents in the area which can access to banking services, the number of such customers is quite low, representing only a small level In 2011 HSBC Hanoi Branch has a total of 15,557 individual customers Compared with an estimated market share of the joint stock banks, branch has only 0.9% market share It also shows people's attention to the product of the HSBC is quite limited, yet creates a strong attraction for customers wishing to borrow 48 Thirdly, the lending method of branch is still simple, not diversify The time to develop a produce is quite long, but personal loans products is not really diverse and abundant The loan products primarily are in accordance with traditional Personal customer has a unique characteristic that they are not having a high level of management as the business professional Their business is spontaneous, not go to planning, therefore capital and cash flow management is difficult and the business lending just is not realistic Last but not least, the quality and result of personal lensing activity is quite low The net operation income from personal lending activity increase over year but is still small compare with total net income The highest profit ratio in three recent years is only account for 24.11% in total net operation income from lending activity In addition, the bad debt still increase which represent a negative efficiency in personal lending activity of branch 2.3.2.2 Causes a Internal cause Firstly, the ability of bank staff is one of the weaknesses of HSBC Hanoi branch Most of personal bankers are in the age of 20 to 24 Some of them are inexperienced in lending activity Moreover, lacking of skill in using English of credit officers is dangerous problem especially in a foreign bank like HSBC Many credit officers are not fluent in writing skill although working in a professional foreign bank This caused a inconvenience in making credit report and approval process In addition, some credit officers are lack of basic skills in communication lead to sometime misunderstand to customer This seriously affect to the image of branch Secondly, credit process of branch is still slow and inadequate Although, Hanoi branch has implemented many methods to improve credit policy, it is still in a big trouble The approval of branch is very slow because lack of operational officers Each personal banker in branch have to perform all tasks relate to 49 customer, there for it lack of specialization in job for credit There are even some personal loans approved in months This caused a disadvantage for customer to their borrowing decision, and then they may decide to borrow in other banks b External cause Firstly, the psychology and understanding of the people on the bank's products in general and personal banking products in particular is limited Although there has been a positive change in the habit of using the bank's products, but that habit is not really popular among the people People still have the habit of saving enough money or borrow from friends and relatives for the purpose of business or consumer purposes They are reluctant to access services of personal loans On the other hand, for collateral such as real estate (land ownership, housing) and other valuable property (cars, motorcycles), they often use hand-written papers that not certified by the local government, so they cannot borrow capital from banks because lack the proof of ownership This is partly due to administrative procedure was too cumbersome This has caused difficulties for the banking system to expand lending activities to personal customer Second, customer’s earnings are transparency and people's living standards remain low Most of personal loans are taken from source from salary To cover living expenses, the amount left to pay is quite small For large item of lending, banks also difficult to determine the real income of the customer to be able to repay the debt, sources of payment made also very general, affected by the market as a source of returns from estate property is sold Many customers have income from investment activities contribute, but no business registration, there is no evidence Therefore, this fact makes it difficult to expand, develop personal lending activity Thirdly, competition for market of personal lending takes place among stock commercial banks, foreign banks and joint ventures Many banks offer more diverse 50 forms of loans, enriched with attractive interest rates, processes and procedures for loan It is simple and convenient services to personal customer Fourth, the whole economy in Vietnam in recent years is in recession People tend to save money, buy gold or dollar reserves which affect on buying and borrowing decision from people We can see this real estate market of the Vietnam in recent two year, the government to step in to prevent the collapse of the lending company when the property sale and purchase real property is fewer transactions 51 CHAPTER III: ORIENTATIONS AND SOLUTIONS TO IMPROVE THE QUALITY OF PERSONAL LENDING ACTIVITY IN HSBC - HANOI BRANCH 3.1 Orientations for lending to individual customer of Hanoi branch 3.1.1 The long-term orientation of HSBC Hanoi branch Firstly, Hanoi branch continuously modernizes the IT infrastructure to support business planning and improve service quality and efficiency as well as strengthening risk management activities Secondly, branch will expand the branch network to optimize efficiency, enhance agent relationships and brand awareness Moreover, branch will continue focus on retail banking services and diversify products Last but not least, it will maintain the flexibility to help branch adapt to the constantly changing market and economic environment in Ha Noi capital 3.1.2 Business plan in 2012 In 2012, SBV conduct the orientation for credit growth is from 15% to 17% Within first three months of this year, liquidity of VND in the banking system is quite insurable and tends to improve; credit structure shifted towards focusing on priority areas and gradually reducing outstanding credit in the non-priory sector; interest rate reduce consistent with macro-economic developments and currency markets In the first quarter of 2012, credit growth is estimated 1.96% negatively It decrease compared to the end of 2011 In 2012, the economics predicted the economic situation in Vietnam will face difficulties Economic growth rate will decline and inflation will be still high Gold prices continue to fluctuate abnormally, the stock market and real estate market continues quiet Regarding the financial sector, State Bank continued to tighten 52 monetary policy, tight management of USD / VND and control of credit growth rate Liquidity situation will remain difficult until the end of the year From the economic reality, HSBC Hanoi branch has launched the 2012 plan as follows: Beside tight the control of funds to ensure payment, HSBC Hanoi branch focus on promoting the work of raising capital in the trading blocks, strengthening the management of market risk, operational risk to optimize the credit structure under the new rate In addition, maintain good customers, and restructure the customer base to choose quality customers, and enhance customer care and quality management services 3.1.3 Objectives of lending to personal customers of HSBC Hanoi branch Long term orientation for lending at HSBC Hanoi branch is completing and adjusting product and processing to increase the practical relevance and accessibility of customers for these products Moreover, Hanoi branch will the market research; create packages to provide customers and partners Beside improve product, branch also prioritizes the customers who have stable earnings and business efficiency 3.2 Solutions to develop personal lending activity in HSBC Hanoi branch In the fiercely competitive environment today, the market of individual customers lending but has not yet been fully exploited There are a lot of commercial bank market share is identified target market and invest money and manpower to penetrate and dominate the damage If the HSBC Hanoi branch does not have specific and long term strategies, it will be very easy to lose market share for individual customers This strategy includes many of the following solutions 3.2.1 Improving branch’s staff quality Staff is crucial element which directly affect to personal lending performance In Hanoi branch, credit officers are mostly young, enthusiastic, but inexperienced To improve branch’s staff ability, branch should: 53 • Improve English writing skill of credit officials which obviously affect the credit approval process of a foreign bank like HSBC Moreover, branch should enhance their soft skill by organizing communication courses and seminars between branches • Always create encourage credit officers by building a strict and fairly regime of rewards and punishments, evaluate credit officials by work performance • Branch should periodically train product development staff with the knowledge of the market, market assessment, the transformation of the product This team will create better products and achieve desired results Branch also may recruit employees with professional experience in personal lending, and often have a reasonable reward for the group to make a good product idea, to encourage the creation of members 3.2.2 Widening the network of branch Currently, HSBC Hanoi branch has a small number of transaction and deposit office This make Hanoi branch difficult to expanding market share The network expansion is needed to increase to access the customers in new markets To strengthen Hanoi branch’s position in the personal lending market, branch should pay more attention to expanding personal loans to balance its loan structure Therefore, widening the network of branch should be focused in long term strategy for branch 3.2.3 Promote the branch's marketing activities To introduce products to more people, HSBC Hanoi branch should develop a marketing strategy including product strategy customer research, market segments to make the product fit the customer needs The study of market demand starts from the capture of the common needs of different customer groups to discovering similarities and differences between customer groups, and detecting the potential demand These needs can be identified through interviews, market surveys, through to customer transactions with the bank 54 Then, the branch can improve its products in accordance with customer needs In addition, Hanoi branch need to study the products of competitors currently on the market, analyze strengths and weaknesses of the product so that it can further improve its product For individual customers lending, loan demand is relatively small and dispersed, customers are reluctant to psychological exposure to banks Branch should conduct introduction of the products through newspaper or internet In addition, branch should in conjunction with the retail business like home business companies, prestigious car company or the local supermarket to introduce a form of loan repayment branch Moreover, banks should regularly provide information about the financial situation, capabilities and business results to customers with a total view of the bank and increase confidence in banks Hanoi branch should maintain regular PR program brand on the mass media, creating a lasting impression, create trust and intimacy with the bank 3.2.4 Improve the quality of loans for personal customers To implement this solution, Hanoi branch should offer a synchronous, selfcontained loan process of from the stage of analysis to the stage to collect the debts In which, bank should focus on the stage of analysis before lending because this stage was most likely moral hazard of the customer Also, in case of the loan is used for proper purposes, the credit officers should also assess the recoverability of the loan debt and make debt collection in a reasonable period Credit officers also need to check before and after borrowing about the customer’s income; capital uses to control risks throughout the loan period This requires that loan officers have a thorough understanding of the customer, the customer’s business environment Thus, the quality of bank staff, including qualifications and ethics need to be improved 55 3.3 Recommendations 3.3.1 Recommendations to State Bank First, the State Bank requires commercial banks to implement the provision of credit information personal loans for CIC Center, to the banks may have sufficient information about customers, avoid credit risk The online information needs to be updated regularly and periodically Second, the State Bank executive stable monetary policy, provide the basis for the commercial bank deposits with more affordable loans to promote science and technology with abundant capital, reasonable interest rate Third, the central bank should also regularly organizes professional training courses on the use of the new program towards modernizing the banking system funded by the World Bank, the professional training course credit, the workshops, exchange of scientific and technological experience in lending between credit institutions and banks together, especially the contents of personal loan customers Invite experts with experience at major financial institutions in the world to Vietnam to talk about bank-oriented development, especially retail banking 3.3.2 Recommendation to HSBC Vietnam Diversify products were identified as key strengths to develop personal banking services To help Hanoi branch develops personal lending activity, HSBC should concentrate on products with high technological content, taking advantage of modern banking technology The products must have advantageous characteristics compared to other products on the market to create a competitive difference HSBC need to make individual customers lending products for diverse borrower, including the diversity in the method of repayment, interest rate consistent with borrowing needs of society The creation of multiple loan products the bank will reach many more customers 56 The bank should offer products that have beneficial features in the form of repayment of principal and interest applicable rate, loan period Creating distinctive loan products will also contribute significantly to attract customers The customer will choose the bank that the most distinctive, most customer-oriented 3.3.3 Recommendations to the state agencies and government Firstly, the government needs stabilize the market through long-term policy to improve incomes and living standards, boosting demand for goods and consumer services Second, the Government should strengthen the enforcement of legislation to create unity and conformity of the legal environment to improve the investment environment and business Third , the government should direct the People's Committees at all levels and agencies to accelerate certification of ownership and land use rights for the households and individuals, to facilitate them in taking these assets as collateral when borrowing from the bank If this operation is well underway, there will be more capital from bank loans Fourth, the government should direct agencies to implement projects to improve and enhance the efficiency in the processing of collateral Thursday, the State administrative agencies should quickly implement the pay of civil servants through their bank accounts; the route is paid through the bank account is done through three stages This is to limit the routine down payment in cash in the general population, on the other hand is more capital for banks These are favorable conditions to help banks to expand lending to its individual customers lending 57 CONCLUSION In summary, lending to individual customer activity has played an important role in economy as well as bank’s operation The deeply understanding of factors which affect the quality of personal lending activity help bank to develop credit quality, enhance the competitive capacity, and get more profitability HSBC Hanoi Branch has been operating in Vietnam market for years Being affected by hard economic scene, the bank could not work well as expectation In the fiercely competitive environment today, the market of individual customers lending but has not yet been fully exploited This is where a lot of commercial bank market share is identified target market and invest money and manpower to penetrate and dominate the damage If the HSBC does not have specific and long term strategies, it will be very easy to lose market share for individual customers lending into the hands of commercial banks to borrow shares My internship in HSBC is a great chance for me to evaluate HSBC’s performance, discover the problems and consider of solutions Lastly, I want to express my gratefulness to my instructor Professor … and my colleague on HSBC Hanoi branch for supporting me in my internship and helping me to accomplish this thesis A REFERENCES Vietnamese: Phan Thị Thu Hà (2007), Ngân hàng thương mại, Nhà xuất Đại học Kinh Tế Quốc Dân, Hà Nội Nguyen Minh Kieu (2008), Hướng dẫn nghiệp vụ cấp tín dụng thẩm định tín dụng, Nhà xuất Thống Kê, Hà Nội English: Perter S.Rose & Sylvia C Hudgins (2008) Bank Management & Financial Services, The McGraw-Hill, New York Thompson, Strickland & Gamble (2010) Crafting and Executing Strategy, The McGraw-Hill, New York Andrew Fight (2004) Credit risk management 3rd Edition Great Britain Publisher Website: http://www.hsbc.com.vn/1/2/home http://www.saga.vn/ http://en.wikipedia.org/ http://cafef.vn/ http://vneconomy.vn/ ... of lending for personal customer in HSBC Hanoi Branch .39 2.2.2 Quality of personal lending activity in HSBC - Hanoi branch 43 2.3 Evaluation of personal lending efficiency in HSBC Hanoi branch. .. activity, and the working process in HSBC Hanoi branch, I select the topic “Current situation and solution for the development of personal lending activity in HSBC Hanoi branch? ?? for my thesis research... potential for development in personal lending activity in future 2.2.3 Structure of lending for personal customer in HSBC Hanoi Branch 2.2.3.1 In term of outstanding loans Table 2.4: Credit activity of