Correlation of depositors behavior and bank patronage in the inner districts of ha noi

CORRELATION OF DEPOSITORS’ BEHAVIOR AND BANK PATRONAGE IN THE INNER DISTRICTS OF HANOI _ A DISSERTATION Presented to the Faculty of the Graduate School Southern Luzon State University, Lucban, Quezon, Philippines in Collaboration with Thai Nguyen University, Socialist Republic of Vietnam _ In Partial Fulfillment of the Requirements for the Degree Doctor of Business Administration _ By TRINH THANH BINH (BECKAM) August 2014 i APPROVAL SHEET The Dissertation of TRINH THANH BINH entitled CORRELATION OF DEPOSITORS’ BEHAVIOR AND BANK PATRONAGE IN THE INNER DISTRICTS OF HA NOI Submitted in Partial Fulfilment of the Requirements for the Degree DOCTOR OF BUSINESS ADMINISTRATION A program offered by Southern Luzon State University, Republic of the Philippines in collaboration with Thai Nguyen University, Socialist Republic of Vietnam has been approved by Oral Examination Committee JOANNA PAULA A ELLAGA, DBA Expert EDWIN P BERNAL, DBA Expert NELLY I MENDOZA, DBA Expert ALICE T VALERIO, PhD External Panel MELCHOR MELO O PLACINO, PhD Chairman Endorsed by: Recommended by: CECILIA N GASCON, PhD Adviser APOLONIA A ESPINOSA, PhD Dean Accepted in Partial Fulfilment of the Requirements for the Degree Doctor of Business Administration _ Date WALBERTO A MACARAAN, EdD Vice President for Academic Affairs ii CERTIFICATE OF ORIGINALITY iii ACKNOWLEDGMENT I would like to express my heartfelt gratitude to leaders of Thai Nguyen University in VietNam and Southern Luzon State University in the Philippines who created best conditions for me to complete the course generally and fulfill the thesis particularly My gratitude goes towards Professors directly gave me useful and memorable lectures and guides in DBA namely Dr.Cecilia N Gascon, Dr.Walberto A Macaraan, Dr.MelchorMelo O Placino, Dr.Alice T Valerio, Dr Professor Do Anh Tai, and Dr Tran Dai Nghia They provided me a rich and fertile environment to study and explore new ideas They made my DBA life is ever fluid, and, in the course of it all, a warm and inviting place to work My special thank to Dr Cecilia N Gascon who provided me valuable guides to complete the dissertation I am grateful to lecturers who managed the International Cooperation Program between Vietnam and the Philippines namely Professor Tran Tuan Anh and Professor Nguyen ThanhHai Without their cooperation, I could not have chance to join and fulfill the course I would not have contemplated this road if not for my parents, my wife, my children, and all of my dear friends who instilled within me a love of creative pursuits, science and language, all of which finds a place in this the dissertation Trinh ThanhBinh iv DEDICATION To My Friends & Family Thank you for ALL the Support Trinh ThanhBinh v TABLE OF CONTENTS PAGE TITLE PAGE ……………………………………………………………… i APPROVAL SHEET ……………………………………………………… ii CERTIFICATE OF ORIGINALITY ……………………………………… iii ACKNOWLEDGEMENT ………………………………………………… iv DEDICATION ……………………………………………………………… v TABLE OF CONTENTS ………………………………………………… vi LIST OF TABLES ………………………………………………………… viii LIST OF FIGURES ……………………………………………………… xiii LIST OF APPENDICES ………………………………………………… xiv ABSTRACT ………………………………………………………………… xviii CHAPTER I II III INTRODUCTION Introduction ………………………………………………… Background of the Study ………………………………… Objectives of the Study …………………………………… Statement of the Problem ………………………………… Hypothesis of the Study …………………………………… Significance of the Study ………………………………… Scope and Limitation of the Study ……………………… Definition of Terms ………………………………………… REVIEW OF LITERATURE AND STUDIES Related Literature … …………………….……………… 11 Related Studies …………………………………………… 20 Operational Framework …………………………………… 28 METHODOLOGY Research Design …………………………………………… 30 Determination of Sample Size …………………………… 30 Sampling Design and Techniques …………………….… 31 vi Subject of the Study ……………………… …….…… 32 Research Instrument ……………………………………… 32 Data Collection Method …………………………………… 33 Data Processing Method ………………………………… 33 IV RESULTS AND DISCUSSIONS ………………………… 35 V SUMMARY, CONCLUSION AND RECOMMENDATION Summary of Findings ……………………………………… 103 Conclusions ………………………………………………… 111 Recommendations ………………………………………… 114 BIBLIOGRAPHY ………………………………………………………… 118 APPENDICES …………………………………………………………… 123 CURRICULUM VITAE …………………………………………………… 177 vii LIST OF TABLES TABLE PAGE Bank classification by ownership and key indicators as of 30 June 2013 14 Depositors’ Profile 38 Distribution of Depositors by Gender and Marital Status 39 The Bank Selection by Bank Ownership 41 Distribution of Depositors by Banks 42 The Period of Time that Depositors Maintain Relationship with Banks 43 Relation between Marital Status and Time Span with Banks 44 Relation between Age Range and Time Span with Banks 44 Relation between Professional, Employment and Time Span with Banks 45 10 Kind of Deposits 46 11 Deposit Maturity 47 12 Relation between Marital Status and Type of Deposits 47 13 Relation between Age Range and Terms of Deposits 48 14 Relation between Education Background and Terms of Deposits 48 15 Relation between Professional, Employment and Types of Deposits 49 16 Relation between Professional, Employment and Terms of Deposits 50 17 Reasons for Depositors to Change Banks (having at least two banks at the same time) by Gender and Marital Status 52 18 Reasons for Depositors to Change Banks (at least two banks at same time) by Age 53 viii 19 Reasons for Depositors to Change Banks (having at least two banks at the same time) by Educational Background 53 20 Reasons for Depositors to Change Banks (having at least two banks at the same time) by Employment 54 21 Reasons for Depositors to Change Banks (having at least two banks at the same time) by Income 54 22 Relation Between Education and Factor “To Seek for Stronger Reputation” 55 23 Relation between Professional and Employment with the Factor “To Seek for the Best/Better Service” 56 24 Relation between Professional and Employment with the Factor “I was Not Happy with the Service so I Switch to Another Bank” 57 25 Descriptive Statistics of the Factors Depositors Select to Answer the Question Why 57 26 Correlation of the Factors Depositors Select to Answer the Question Why 58 27 Reasons for Depositors to Select the First Banks 61 28 Relation between Age Range and the Factor of “Paper and Electronic Statements” 62 29 Relation between Age Range and the Factor of “Security and Safety” 62 30 Relation between Educational Background and the Factor of “Security and Safety” 63 31 Relation between Educational Background and the Factors of “Prestigious Banks, Clear Explanation and Procedure, Banks with Branches Located at Convenient Place, Paper and Electronic Statements” 63 32 Relation between Educational Background and the Factor of “Competitive Interest” 64 33 Relation between Education Background and the Factor of “Paper and Electronic Statements” 64 34 Relation between Educational Background and the Factor of “Can Make Deposit/ Withdrawal Flexibly” 65 35 Relation between Professional and Employment and the Factor of “Competitive Interest” 65 ix 36 Relation between Employment and the Factor of “Prestigious Banks” 66 37 Relation between Employment and the Factor of “Security and Safety” 66 38 Relation between Income and the Factor of “Paper and Electronic Statements” 67 39 Relation between Income and the Factor of “Recommendation from Friends/Relatives” 67 40 Relation between Income and the Factor of “Banks with Branches Located at Convenient Place” 68 41 Descriptive Statistics of Factors for Depositors’ Selection of the First Bank They Deposited With 68 42 Correlation of Factors for Depositors’ Selection of the First Bank They Deposited With 69 43 Type of Promotion that Depositors Want to Have 70 44 Type of Promotion that Depositors Want to Have First 71 45 Relation between Income and Lottery Participation 71 46 Descriptive Statistics of the Promotion Kinds Depositors Want to Have 72 47 Correlations of the Promotion Kinds Depositors Want to Have 72 48 Depositors’ Future Plan to Invest their Money 73 49 Relation between Marital Status with Depositors’ Plan to Deposit Foreign Currency at Banks 74 50 Relation between Age Ranges with Depositors’ Plan to Deposit Foreign Currency at Banks 74 51 Relation between Incomes with Depositors’ Plan to Foreign Currency 75 52 Relation between Incomes with Depositors’ Plan to Buy Gold, Save at Home 76 53 Descriptive Statistics of Future Investment Factors 76 x 164 Appendix B.54 Relation between Bank-Related Factors and Kinds of Deposits a Q5b What type of deposits did you select Others Certificate of (please Savings deposits specify……) Total Q15a What of the following a Prestigious bank Count 349 22 21.4% 15.6% 19.0% 214 20 13.1% 18.8% 17.2% 291 19 17.8% 12.5% 16.4% 178 10.9% 15.6% 7.8% 50 3.1% 6.2% 6.0% 155 9.5% 9.4% 5.2% 58 2 3.5% 6.2% 1.7% 166 12 10.2% 6.2% 10.3% 18 % within $Q5b 1.1% 0% 9% Recommendatio Count n from friends / % within $Q5b relatives 60 3.7% 6.2% 6.9% 95 10 5.8% 3.1% 8.6% % within $Q5b Quick and convenient procedure Count Competitive interest rate Count Security and safe Suitable fees and charge % within $Q5b % within $Q5b Count % within $Q5b Count % within $Q5b Can make deposit / withdrawal flexibly Clear explanation & procedure Count Bank with branches locate at my convenient place Paper and electronic statements Count Has attractive promotions Total Source: SPSS % within $Q5b Count % within $Q5b % within $Q5b Count Count % within $Q5b Count 1634 32 116 376 240 314 192 59 164 62 180 19 70 106 1782 165 Appendix B.55 Relation between Bank-Related Factors and Future Investment a Q14 What is your plan for future saving? Depositing Buying Buying to Depositing by foreign gold and gold and by VND at currency at save at save at bank bank bank home Total Q15a What of the following a Prestigious bank Count 199 32 21 21.9% 21.5% 20.8% 21.4% 128 20 11 14.1% 13.4% 10.9% 14.3% 147 28 17 16.2% 18.8% 16.8% 14.3% 101 19 16 % within $Q14 11.1% 12.8% 15.8% 10.7% Suitable fees and Count charge % within $Q14 33 3.6% 3.4% 1.0% 0% 86 12 11 9.5% 8.1% 10.9% 7.1% 37 2 4.1% 3.4% 2.0% 7.1% 84 13 9.2% 8.7% 5.9% 3.6% 1 9% 7% 0% 3.6% 33 3.6% 5.4% 4.0% 0% 54 12 5.9% 4.0% 11.9% 17.9% 910 149 101 % within $Q14 Quick and convenient procedure Competitive interest rate Count % within $Q14 Count % within $Q14 Security and safe Count Can make Count deposit / % within $Q14 withdrawal flexibly Clear explanation Count & procedure % within $Q14 Bank with branches locate at my convenient place Paper and electronic statements Recommendatio n from friends / relatives Has attractive promotions Total Source: SPSS Count % within $Q14 Count % within $Q14 Count % within $Q14 Count % within $Q14 Count 258 163 196 139 39 111 46 104 10 45 77 28 1188 166 Appendix B.56 Relation between Bank-Related Factors and Kinds of Promotion Depositors want to have in the Future a Q16 What kinds of promotion would you Add Combine Lottery Cash point to many particip Gifts reward loyalty kinds ation cards above Total Q15a What of the Prestigious bank following a Quick and convenient procedure Count 142 45 126 18 24 21.1% 22.8% 21.7% 18.4% 20.2% 91 25 76 14 19 % within $Q16 13.5% 12.7% 13.1% 14.3% 16.0% Competitive interest Count rate % within $Q16 119 34 103 18 21 17.7% 17.3% 17.8% 18.4% 17.6% 77 18 64 11 11 11.4% 9.1% 11.0% 11.2% 9.2% 27 20 % within $Q16 4.0% 1.5% 3.4% 4.1% 5.9% Can make deposit / Count withdrawal flexibly % within $Q16 60 19 52 11 10 8.9% 9.6% 9.0% 11.2% 8.4% 23 20 3.4% 3.6% 3.4% 2.0% 3.4% 64 21 50 9.5% 10.7% 8.6% 8.2% 7.6% 9% 0% 1.2% 2.0% 8% 26 11 23 6 3.9% 5.6% 4.0% 6.1% 5.0% 39 14 39 5.8% 7.1% 6.7% 4.1% 5.9% 674 197 580 98 119 % within $Q16 Count Count 355 225 295 181 Security and safe % within $Q16 Suitable fees and charge Count Clear explanation & Count procedure % within $Q16 Bank with branches Count locate at my % within $Q16 convenient place Paper and electronic statements Count Recommendation from friends / relatives Count Has attractive promotions Count Total % within $Q16 % within $Q16 % within $Q16 Count Source: SPSS 61 152 56 152 16 72 103 1668 167 Appendix B.57 Relation between Bank-Related Factors and Kinds of Promotion Depositors Used to Have a Q12a What kinds of promotion did you Add Combine Lottery Cash point to many participat Gifts reward loyalty kinds ion cards above Q15a What of Prestigious bank the following a Quick and convenient procedure Competitive interest rate Security and safe Suitable fees and charge Can make deposit / withdrawal flexibly Clear explanation & procedure Count % within $Q12a Count % within $Q12a Count % within $Q12a Count % within $Q12a Count % within $Q12a Count % within $Q12a Count % within $Q12a Count Bank with branches locate % within $Q12a at my convenient place Paper and electronic statements Count % within $Q12a Recommendatio Count n from friends / % within $Q12a relatives Has attractive promotions Total Source: SPSS Count % within $Q12a Count 73 21.2% 47 13.6% 60 17.4% 37 10.7% 77 134 13 13 20.0% 21.4% 18.8% 22.4% 83 9 13.0% 13.3% 13.0% 15.5% 112 12 15.8% 17.9% 17.4% 15.5% 72 8 11.2% 11.5% 11.6% 13.8% 50 61 43 12 19 2.6% 3.1% 3.0% 2.9% 1.7% 35 35 57 10.1% 9.1% 9.1% 11.6% 10.3% 11 16 22 3.2% 4.2% 3.5% 1.4% 5.2% 30 38 59 8.7% 9.9% 9.4% 7.2% 6.9% 9% 1.3% 1.0% 1.4% 0% 14 21 25 4.1% 5.5% 4.0% 7.2% 1.7% 26 27 37 7.5% 7.0% 5.9% 7.2% 6.9% 345 385 626 69 58 Total 310 198 254 168 43 141 53 136 15 66 99 1483 168 Appendix C Survey Questionnaire SURVEY QUESTIONNAIRE “Correlation of Depositors’ Behavior and Bank Patronage (inner districts of Ha Noi) Dear Sir/Madam, We are conducting a study to understand depositors’ behavior and bank patronage in the inner districts of Ha Noi to complete our proposal for Doctor program in business administration (DBA) managed by The Southern Luzon University and Thai Nguyen University Could you please spend some time and contribute to our study Your opinions are highly appreciated and kept confidential Full name: _ Telephone: Address: MAIN QUESTIONS No Question Answer Gender: (Record, not ask) Q1 Have you placed Yes Male Female CONTINUE deposits at bank in inner districts of Ha Noi in the last 12 months THANKS No & CLOSE 169 Q2 Your district: Hoan Kiem Ba Dinh Tay Ho Hai Ba Trung Dong Da Cau Giay Thanh Xuan Hoang Mai Long Bien Tu Liem 10 (Check quota) Q3 a At present, which ABBank Q3 a Currently use ACB Agribank ANZ BIDV Citi Bank Dong A Bank (EAB) with first, second Eximbank and so on? Habubank HD Bank 10 HSBC 11 banks are you keeping your deposits with? b Please rank in order for the banks you deal Q3 b Ranking in order 170 Maritime bank 12 MB Bank 13 NaVibank 14 Ocean bank 15 PG Bank 16 Sacombank 17 SCB 18 SeAbank 19 Standard Chartered 20 Bank Techcombank 21 VIB Bank 22 Vietcombank 23 Vietinbank 24 VP Bank 25 Others, please specify: 97 Q4 Only ask if more than code is selected in Q3 Why did you have To reduce risk To seek for the best/better service To seek for better interest rate To have attractive promotion Have friends/relatives working in that deposits with more than bank? 171 bank To seek for stronger reputation Bank branch closer to my home Variety of products for selection I was not happy with the service so I switch to another bank 98 Others (Please specify) Q5a dealing with these banks? Q5b Bank Bank Bank Bank Bank Less than months 1 1 months to < year 2 2 to 5 years 5 5 Bank Bank Bank Bank Bank 1 1 2 2 3 3 How long have you been What type of deposits did you select? Please select all applicable Savings Certificat e of deposits Others (please specify… …) 172 Q6 Bank Bank Bank Bank Bank By week 1 1 1 month 2 2 months 3 3 months 4 4 12 months 5 5 Bank Bank Bank Bank Bank What term (time duration) of deposit did you deposit your money? Q7 Please let me know what were Prestigious bank reasons that Quick and convenient procedure you chose to save at Competitive interest rate these banks? Security and safe Suitable fees and charge Can make deposit / withdrawal flexibly Clear explanation & procedure Bank with branches locate at my convenient place Paper and electronic statements Recommendation from friends / relatives Has attractive promotions Others (specify _ _) 173 Q8 Bank Bank Bank Bank Bank Very likely 1 1 Somewh at likely 2 2 Neutral 3 3 Somewh at unlikely 4 4 Very unlikely 5 5 How likely are you to recommend the bank with your friends? Q9 a In overall, how Q9a Q9b Very dissatisfied 1 Somewhat dissatisfied 2 Neutral 3 Somewhat satisfied 4 Very satisfied 5 satisfied are you with the current level of interest rate that banks offer? b In overall, how satisfied are you with the bank’s service quality? Q10 Did you receive any Yes No promotion? Q11 Ask if code is selected, if not, move to Q12 In overall, how satisfied Very satisfied Somewhat satisfied Neutral Somewhat dissatisfied Very dissatisfied were you with the bank’s promotion campaign? 174 Q12 Q12a a What kinds of Q12b promotion did you receive? Cash reward 1 Lottery participation 2 Gifts 3 Add point to loyalty cards 4 Combine many kinds above 5 b Please rank the promotion that you liked most by Others (Specify) Q13 Would you agree that Very disagree Somewhat disagree Neutral Somewhat agree Very agree keeping money at bank always safe? Q14 What is your plan for future saving? Depositing by VND at bank Depositing by foreign currency at bank Buying gold and save at the bank Buying to gold and save at home Keep money in cash at home Others (please specify) 175 Q15 Q15a a What of the Q15b following factors would you consider Prestigious bank Quick and convenient procedure Competitive interest rate Security and safety Suitable fees and charge Can make deposit / withdrawal flexibly Clear explanation & procedure Bank with branches locate at my convenient place Paper and electronic statements Recommendation from friends / relatives 10 Has attractive promotions 11 for selecting a bank for deposit next time? b Please rank, in order of importance from most important to less important, in which is most important and 11 is least important Q16 a What kinds of Q16a promotion would you like to have? b Please rank the most by Cash reward Lottery participation Gifts Add point to loyalty cards Combine many kinds above Others (Specify) 98 Q16b 176 DEMOGRAPHIC Q17 Your marital Status Q18 Your age range: Q19 Your education background: Q20 Your professional and employment Q21 Your average monthly income: Single Married Below 25 25 to 34 35 to 44 45 to 54 55 to 64 From 65 and over High school College University Postgraduate Retired person Self-employed Work in government agencies Work in business sector Other, please specify Less than 10 million VND 10 million to less than 20 million 20 million to less than 30 million 30 million to less than 40 million 40 million to less than 50 million 60 million to less than 70 million 70 million to less than 80 million 80 million and more 177 CURRICULUM VITAE I Personal Information Name: TRINH THANH BINH Birthday: 10-05-1972 Birthplace: Ninh Binh, Viet Nam Civil Status: Vietnamese Parents: Trinh Quang Do (father); Duong Thi Thao (mother) Spouse's name: Nguyen Thi Kieu Oanh Children: Trinh Hoang Anh II Educational Qualification 1988-1992: Bachelor in Economics, Banking and Finance, National Economics University, Ha Noi 1995-1997: Master in Business Administration (MBA), Asian Institute of Management (AIM), Makati, the Philippines 2010-2013: student of Doctor in Business Management (DBA), Southern Luzon State University, the Philippines and Thai Nguyen University, Viet Nam III Civil service, eligibility and Government Licensure, Examination IV Experiences 1992-2001 : Vietnam Bank for Agriculture and Rural Development 178 Manager of Foreign Exchange Skills Department 2001-2002 : Vietnam Bank for Agriculture and Rural Development, Bac Ha Noi Branch, Head of International Payment Department 2002- 2008 : Vietnam International Bank (VIB) Deputy General Director 2008- Present: Vietnam International Bank (VIB) Head of Supervisors Board ... determine and analyze the correlation of depositors’ behavior and bank patronage in the inner districts of Ha Noi As the knowledge of depositors’ behavior and bank patronage is not well understandable... knowledge of the study Objectives of the Study The main objective of the study is to determine and analyze the correlation of depositors’ behavior and bank patronage in the inner districts of Ha Noi. .. understand the depositors’ behavior and bank patronage The following questions will be addressed: What is the background of banking industry in Ha Noi? What are the profiles of depositors in Ha Noi?