Solutions to improve lending efficiency at vietcombank

ACKNOWLEDGMENTS I assure you that this is my own research, the data and results stated in my graduation thesis are honest; originated and clearly quoted Student (sign) INTRODUCTION The urgency of the topic The bank is an important entity and a leading channel of capital in each country's economy In the current competitive environment of the banking industry, each bank needs to have the right orientations and goals to help the bank survive and develop Besides operations such as accepting deposits, providing payment services through accounts, granting credits, banks must always pay special attention to lending activities Lending is one of the traditional activities that bring a crucial source of income for the bank It can be said that this is the business that the bank has the closest approach to the life of the people, to support them in improving their material and spiritual life Human needs are increasing with the development of social-economy, along with a series of requirements that need to be satisfied The financial ability has become a very important factor to finance such needs, but most times the need for loans often appears before the private equity fund is formed There is a separation of time factors for the loan needs and financial capacity of each person The credit was then used as an advance of the future private equity fund to satisfy current needs Because of that purpose, right from the time the State Bank issued the policy of stimulating demand for loan incentives and implemented by commercial banks, this type has received a positive response from the worker Lending not only benefits the Bank but also has a profound social meaning, contributing to improving the lives of employees better and better At the same time, it is the link between the employees and the agencies and enterprises where they work From there, it can increase labor capacity and the ability to contribute to society Along with the trend of diversification in commercial bank operations and the fierce competition in resolving output for capital sources of banks The lending activity used by banks is the main solution In recent years, lending activities have brought many benefits to the Bank and are on the way of further development However, besides, the increasing competition of domestic commercial banks and the introduction of international banks have somewhat reduced its effectiveness In the future, if Vietnam Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) wants to continue to develop and gain the confidence of its employees, the Bank needs to change the way it operates That's why I chose the topic: "SOLUTIONS TO IMPROVE LENDING EFFICIENCY AT VIETCOMBANK", to come up with some solutions to improve the loan performance of Vietcombank Subjects and research purposes: Research subjects: Lending activities at Vietcombank Research objectives: Assess loan effectiveness at Vietcombank to provide solutions and recommendations to improve and enhance loan efficiency Research scope: - Research on Vietcombank lending activities - Research period: In 03 2017, 2018, 2019 Research Methodology The research methods used are mainly the information collection method and the information analysis method Information is gathered through the internship directly at Vietcombank, through financial statements, through balance sheet, cash flow statement.etc The analysis method is based on collected data, then compared, collated, summarized, and made comments on the current status of loan performance at Vietcombank The structure of the thesis Besides the introduction and conclusion, the thesis consists of chapters: Chapter 1: Literature review of lending efficiency at commercial banks Chapter 2: Lending efficiency at Vietcombank in the period of 2017-2019 Chapter 3: Solutions to improve lending efficiency at Vietcombank CHAPTER LITERATURE REVIEW OF LENDING EFFICIENCY AT COMMERCIAL BANKS 1.1 Overview of commercial banks 1.1.1 Definition of commercial banks The concept of commercial banks has many and depending on each aspect there will be different definitions According to Clause 3, Article of the 2010 Law on Credit Institutions, a commercial bank is a type of bank that is allowed to conduct all banking activities and other business activities in accordance with this Law to spend profits In France, they define commercial banks as enterprises whose occupation is to receive public money in the form of deposits (or other forms) and use that resource for themselves in the credit, credit, and finance From the above considerations, I use the following definition: Commercial banks are financial intermediaries, operating under the model of an enterprise Commercial banks trade in monetary, credit, and financialbanking services according to market principles Commercial banks operate for profit purposes 1.1.2 Function of commercial banks Commercial banks have three main functions: credit intermediation function, payment intermediary function, and money creation function - Credit intermediation function This is considered the most important function of commercial banks In the economy, there are always two entities, one is a temporary spending shortage, and the other is a temporary surplus These two things exist independently of the bank and money from the second group will be transferred to the first group if both are mutually beneficial At that time, financial relationships will be formed, which can be direct credit or indirect credit Due to the limited information between different entities, it is necessary for financial intermediaries such as commercial banks to help connect capital holders and those who need capital Thanks to the professional operation of commercial banks, the subjects are connected with each other and create benefits for the parties For depositors, they have additional income from their free temporary money through bank deposit rates Moreover, deposits in banks, the deposit is secure and has convenient payment services For borrowers, they will have business capital, spending payment without having to search for capital For the economy, the function of credit intermediaries contributes to promoting economic growth because it helps to promote the process of capital circulation and promote production and business development Since then, meet the capital needs to ensure the reproduction process is carried out continuously With this function, the Bank will act as a financial intermediary, both accepting deposits and being lenders, and enjoying the difference between the deposit rates and the lending rates Therefore, lending is always the key activity and the traditional activity that creates a big profit for commercial banks Figure 1- The credit intermediation function of commercial banks (Source: author) - Payment intermediary function With this function, the bank acts as an "accountant and cashier" for businesses and individuals with bank accounts The bank collects and pays the goods and services at the request of customers, the payment is deducted from the customer's deposit accounts The bank provides customers with many optimal payment methods such as checks, collection/payment orders, credit cards, etc to help debtors pay quickly, save time, and ensure safety Thereby, this function promotes the circulation of goods, speeds up the speed of payment, the speed of capital flow, contributing to economic development Besides, the non-cash payment through banks reduces the amount of cash in circulation, helping to save printing costs, counting, preserving money Collecting payment fees also helps increase profits for the bank, increase the loan source shown on the balance in customers' deposit accounts - Money creation function When performing the function of credit intermediaries and payment intermediaries, commercial banks can generate a credit (bookkeeping), shown on customers' payment deposit accounts at banks From the initial deposit, the Bank lends by wire transfer, after which a portion of the amount will be returned to the bank as a deposit The continued and repeated process will result in deposits that are many times larger than the original deposits Thereby, the commercial banking system has increased the total means of payment in the economy, meeting the payment and payment needs of the society The functions of commercial banks are closely related and complementary, of which the credit intermediation function is the most basic function, creating the basis for the implementation of the following functions When performing the function of intermediary payment and money creation function, the bank can increase credit capital, expand credit activities 1.1.3 Operation of commercial banks  Capital mobilization and development activities The bank mobilizes idle funds to make credit capital for lending Capital sources of commercial banks include Statutory Capital; Reserve funds; Mobilized Capital; Borrowed Capital; Trust capital; Other Capital Capital mobilization and development activities include activities such as the development of charter capital and funds, receipt of deposits, loans, receipt of trust funds, and management of other deposits In particular, receiving deposits is an important and traditional activity in raising capital at banks According to Clause 13, Article of the 2010 Law on Credit Institutions: “Receiving deposits means activities of receiving money from organizations and individuals in the form of demand deposits, term deposits, and savings deposits savings, issuance of deposit certificates, promissory notes, treasury bills, and other forms of deposit receipt on the principle of a full refund of principal and interest to depositors as agreed " • Capital management and use activities Capital management and use activities include Management of compulsory reserve assets and liquidity reserves, lending and discounting of valuable papers for organizations and individuals, financial leasing, bank guarantees for customers, investing activities, contributing capital, buying shares In particular, lending and investment activities are the two most important capital-using activities, which determine the viability and operation of banks • Service fee collection Fee collection service activities of commercial banks include domestic and international payment services, a collection of taxes, fees and charges; payment for remittance and remittance; services of providing credit cards, payment cards, ATM cards ; service of receipt and storage of precious assets and valuable papers; trading and buying and selling foreign currencies, gold, silver and gems; financial advisory, advice on issuing stocks and bonds; securities investment brokerage; insurance services • Other business activities In addition to the three main activities above, the bank also has a number of other business activities as follows: - Borrowing capital from Central Banks, Credit Institutions, Financial Institutions - Trading and providing foreign exchange services and recycled products - Bond trading - Contributing capital, buying shares - Supplying services The operations of commercial banks are diverse and plentiful, each bank tries to create the most distinctive and preferential products to attract customers However, to maintain efficient operation, the bank must have a stable capital source so the major activity of the bank is still capital mobilizing and using activities 1.2 Lending activities at commercial banks 1.2.1 Definition of lending at commercial banks In Vietnam, Decision 1627 / 2001_QD_NHNN dated December 31, 2001 of the Governor of the Bank on the issuance of the lending regulations of credit institutions, stipulates that: Lending is a form of credit extension by commercial banks commercial, ie the bank gives money to the borrower to use for a certain purpose and time as agreed, with the commitment that the customer must pay both principal and interest 1.2.2 Characteristic of lending at commercial banks - Lending activities are expressed in cash or representative money Due to the nature of its business, to meet the demand for capital in a timely and adequate manner, the bank mainly uses the form of currency for its operations - Borrowers are individuals with very diverse and diverse loan needs Due to diverse borrowers, the collection of bank information about customers is often complicated On the other hand, because customers' loan demands are for various purposes such as consumption and business, the source of debt repayment is collected from borrowers Therefore, when making a loan, the bank must verify the borrower's income to assess the repayment ability of the customer - Lending activities are also risky, as the subjects vary from individuals, households to companies and businesses, so besides external factors such as natural disasters, loss season, unemployment, economic cycles also have subjective factors from customers In addition, even though banks hold collateral, customers still face the risk of income reduction, business stagnation, or even bankruptcy On the other hand, lending rates are often rigid, so when the capital mobilizing interest rates rise, banks face interest rate risks - Customers' demand for loans is often inelastic with interest rates Typically, borrowers are more interested in the amount they pay than the interest they incur, and the majority of individual customer loan needs are smaller than corporate customers - Income level and education level are two variables that are very closely related to customers' loan needs When customers' income is high, the satisfaction of their personal needs is also higher, so the demand for loans also increases - The quality of financial information on borrowers is usually not high Information about customer income, consumption plan, financial capacity, and reputation of customers may be hidden by customers, changing information that credit officers can hardly recognize and distribute - Principal repayment sources of customers can fluctuate greatly, depending on their work history, skills, and work experience These factors can impact clients' work efficiency and the main source of funding - Loans are often secured by assets: Due to the high risk of lending, most of them are secured by assets, usually those that are easy to sell in the market 1.2.3 Function of lending activities at commercial banks to change, so that both parties can achieve the desired content without affecting the legality, not violating the rights, obligations between the parties Then the bank will approve the edit Stage 5: Disbursement of checks while lending The customer official prepares a debit note and documents as per the bank's form, such as a money order, money order, etc., to prepare arrangement Staff officials request customers to present withdrawal procedures, documents such as purchase contracts, money orders At the same time, they need to check whether the capital withdrawal documents are legal, valid or not, yes In accordance with the approved loan conditions Gather all the documents listed on the notice of eligibility for capital withdrawal to the debt management department Debt managers will check the entire loan profile of customers to ensure the completeness and suitability to issue credits, declare information into the data network, switch to the accounting department of counterfeit accounting, then keep loan records Stage 6: Manage to check after lending Based on each loan, the borrower that the Customer Officer inspects, supervises the loan, uses the loan and repay the customer in accordance with the content of the signed contract according to the process lending operations to ensure efficiency and solvency Timely detect signs of adverse effects on the customer's ability to repay the debt and report to the superior to be directed to take timely measures This stage is to ensure customers pay their debts on time and also take care of them The result is an intimate relationship with customers that aims to provide a variety of banking services to customers, creating a good, comprehensive and longlasting relationship between the bank and its customers 2.2.1.5 Popular lending products • Consumer loans with collaterals • Lending to buy real estate • Car loan • Business loans -term business loan 2.2.2 Lending efficiency at Vietcombank in the period 2017-2019 2.2.2.1 Analysis of lending activities based on forms of business Năm Tiêu chí 2017 2018/2 2019/2 2018 2019 017 018 Tỷ lệ Tỷ lệ Số tiền Số tiền Số tiền (%) (%) Phân tích dư nợ cho vay theo ngành hàng Công nghiệp 242.631.365 257.340.440 272.254.751 6,06 5,80 Thương mại, dịch vụ 118.498.977 120.238.625 131.825.366 1,47 9,64 Nông, lâm, thủy hải sản 11.291.317 14.496.533 16.121.696 28,39 11,21 Tổng 538.871.669 627.183.053 728.945.394 16,39 16,23 Outstanding loans by industry Outstanding loans to industries accounted for the highest proportion, respectively accounting for 45%, 47.7% and 50.5% over the years, respectively, with a value of VND 242,631,365 million; VND 257,340,440 million and VND 272,254,751 million Since 2016, the bank has implemented the restructuring project for the 2016-2020 period, focusing on developing the retail credit segment, including small and medium business customers Along with the expansion of business objects in the industry, the bank also focuses on investment and development of trade in services Lending to trade in services accounted for about 22-24.5% of total loans, at the beginning of this period, it reached VND 118,498,977 million By the end of this period, it increased by VND 13,326,389 million to reach VND 131,825,366 million Agriculture - forestry - fishery is not a strong point in the bank's lending activities, because Vietcombank developed from big cities to gradually develop to remote provinces and cities, thus, the The debt of this industry is very small Outstanding loans of the agriculture-forestry-fishery sector accounted for only 6% of the total outstanding loans In 2018, the growth of this industry was 28.39% compared to 2017 (from VND 11,291,317 million to VND 14,496,533 million) In 2019, agriculture-forestry-fishery lending continued to increase by VND 1,625,163 million, equivalent to an increase of 11.21% compared to 2018 Năm 2018/2 2019/2 017 018 Tăng 2017 2018 2019 Tăng Số tiền Số tiền Số tiền giảm so giảm so với với 2017 2019 Dư nợ cho vay 538.871.669 627.183.053 728.945.394 16,4 16,2 Cá nhân 176.880.162 235.110.059 314.671.070 32,921 33,840 Doanh nghiệp 234.702.169 235.983.145 245.032.215 0,546 3,835 Đối tượng khác 127.289.338 156.089.849 169.242.109 22,626 8,426 Outstanding loans by subject: Structure of outstanding loans by economic sectors at Vietcombank in 2017, loans to businesses accounted for the largest proportion However, in 2018 and 2019, individual loans gradually dominated By the end of 2018, individual debt reached VND 235,110,059 million, an increase of VND 58,229,897 million (an increase of 32.9%) compared to 2017, in 2019 reached VND 314,671,070 million, an increase of VND 79,561,011 million ( an increase of 33.84%) The ratio of the individual loan outstanding to total outstanding loans has slightly improved compared to previous years, at the beginning of the individual lending period accounted for 33%, by the end of this period it accounted for 43% of total outstanding loans Individual customers are also an important customer group, being quite concerned by the bank to improve the quality of loans, especially to enhance consumer lending and unsecured lending Business outstanding loans in 2018 reached VND 235,983,145 million, nearly equal to personal loans at the bank at that time, an increase of 5.4% compared to 2017 By the end of 2019, the enterprise loan balance reached 245,032 VND 215 million, corresponding to an increase of only 3.8% compared to 2018 The proportion of corporate credit outstanding/total outstanding loans increased but very little compared to the previous year Other entities, apart from individual corporate customers, account for about 25% of the total outstanding loans and have grown steadily over the years 2.2.2.2 Analysis of lending activities based on forms of guarantee Năm Tiêu chí Tổng dư nợ 2018/2017 2019/2018 2017 2018 2019 T ỷ lệ Tỷ lệ Số tiền Số tiền Số tiền (%) (%) 538.871.669 627.183.053 728.945.394 Vay có tài sản đảm bảo 444.272.236 500.822.040 570.585.302 12,73 13,93 94.599.433 25,32 Vay không tài sản đảm bảo 126.361.013 158.360.092 33,57 Most bank loans are collaterals because this helps the bank minimize risks, if the customer cannot pay the debt, the bank also has a plan to recover the debt At the same time, the mortgaged property also helps customers create credibility with the bank, customers will be approved for loans with higher limits and preferential interest rates Customers often mortgage assets formed from loans to mortgage, or assets such as land, houses, payroll, etc Loans with secured assets always account for a high proportion: in 2017, VND 444,272,236 million accounted for 82.4%; in 2018 was VND 500,822,040 million, accounting for 79.85% of the proportion and up 12.73% compared to 2017; in 2019, the figure will reach VND 570,585,302 million, accounting for 78.27% Although loans with collaterals are at a top rate, there is a real shift to unsecured loans Loans without collateral increased rapidly in 2018, reaching 126,361,013 million VND, up 33.57% compared to 2017, raising the proportion from 17.55% to 20.14%, this ratio is 2019 slightly increased to VND 158,360,092 million, an increase of 25.32% compared to 2018 The reason for 2018 and 2019 is a sharp increase in unsecured loans because of the expansion of Vietcombank to customers according to the policy of developing retail credit from Vietcombank and the policy of expanding and relaxing lending activities In 2019, lending products without collaterals are still being expanded, but because many banks simultaneously expand market segments such as MBBank, Sacombank, Viettinbank, customers have many choices Moreover, Vietcombank's leading position decreased, the value of outstanding loans to customers without collaterals of the bank no longer increased as fast as in 2018 2.2.2.3 Analysis of lending activities based on maturity of loans Năm 2018/2 2019/2 017 018 2017 2018 2019 Tỷ lệ Tỷ lệ Số tiền Số tiền Số tiền (%) (%) Tổng 538.871.669 627.183.053 728.945.394 Nội tệ 413.273.282 482.950.684 538.373.831 Tiêu chí 16,860 11,476 Ngoại tệ 125.598.387 144.232.369 190.571.563 14,836 32,128 Customers having credit relationships with the bank are mainly domestic individuals, so the bank mainly lends in VND According to Table 2, domestic debt outstanding always accounts for over 75% in years In 2018, Vietcombank provided loans in local currencies of VND 482,950,684 million, an increase of 16.86% compared to 2017 and VND 538,373,831 million in 2019, an increase of 11.46% compared to 2018 The growth rate decreased of VND outstanding loans corresponds to the increase and decrease of mobilized capital in local currency Foreign currency loans accounted for a quarter of total loans, in 2017 and 2018, foreign currency loans remained at 23%, only changing in quantity, from VND 125,598,387 million to VND 144,232,369 million VND (growth of 14.83%) In 2019, Outstanding foreign currency debt increased by 32.12% to VND 190,571,563 million Outstanding foreign currency loans are likely to increase sharply in 2019 due to the demand of people in the price overseas in tourism activities, paying school fees, or lending to Vietnamese workers abroad 2.2.2.4 Measuring lending efficiency at Vietcombank in the period 2017-2019 by the Set of criteria + Legal basis: Vietcombank has complied with the regulations on lending activities of the State Bank, meeting the needs of customers, ensuring the quality of loans and reduce risks in the lending process In addition to complying with the regulations on credit activities of the state bank and the bank itself, it also complies with and complies with law Compliance with the general provisions of the law has also contributed to increasing the efficiency of lending activities at Vietcombannk + Lending process: Vietcombank has applied the lending process in accordance with the regulations of the bank In particular, the evaluation is always focused by the bank because this is the most important step to consider whether to lend to customers The bank's credit appraisal process complies with the following principles: Transparency, fast, accurate, and effective Credit officers always have a firm grasp of operations, constantly update market economy information so they can make accurate and timely recommendations and assessments for appraisal work; At the same time, we are also dedicated to supporting our clients in completing the application file so that customers can borrow as quickly as possible Lending Regulation and Lending Contract: All loan contracts at Vietcombank are carefully researched and drafted with the consent, acceptance and commitment of both banks banks and customers Most customers agree and strictly comply with agreements made with Vietcombank and Vietcombank is also obliged to fulfill its commitments with customers However, there still exist some customers who intentionally fail to comply with the commitments in the credit contract, making loans ineffective and posing risks to banks + Diversifying lending methods At Vietcombank, there are various types of lending methods such as one-time lending, credit line, installment loan, etc diversify loans, create conditions to attract different types of customers and different economic sectors + Diversifying the loan industry Vietcombank is one of the major commercial banks in Vietnam, so the industries that the bank serves are also very diverse: manufacturing and processing, manufacturing, distributing electricity, gas and water, construction , transportation, warehousing and communications, agriculture, forestry and fishery; Trade in Services,… a Targets on outstanding loans Vietcombank's total outstanding loans have all grown well over the past three years, proving that the bank's debt collection has been quite good and profitable for the bank b Situation of overdue debt, bad debt 2017 2018 2019 Số tiền % Số tiền % Số tiền % Nợ nhóm 527.929.102 97,97 617.257.683 98,42 720.674.783 98,87 Nợ nhóm 4.772.389 0,89 3.736.701 0,60 2.501.352 0,34 Nợ nhóm 684.223 0,13 290.984 0,05 681.402 0,1 Nợ nhóm 3.583.828 0,67 1.160.151 0,18 576.783 0,08 Nợ nhóm 1.902.127 0,35 4.737.534 0,76 4.511.074 0,62 Tổng 538.871.669 627.183.053 728.945.394 From Table 4, we can see that the bank's debt balance mainly focused on group debt In 2017, group debt was VND 527,929,102 million, accounting for 97.97%; in 2018, VND 617,257,683 million, accounting for 98.42% and in 2019, VND 720,674,783 million, accounting for 98.87% Group is the standard debt and has not been overdue for over 10 days, the proportion of debt group in the total debt group increases slightly over the years At Vietcombank, the proportion of qualified debt is always maintained / total outstanding loans were at a high level (all over 97% of the total outstanding loans) The high proportion of Group debt in this period proves that the lending activities at banks are quite good, the loan quality is high, and the credit relationship with customers is maintained well, creating favorable conditions for the bank to maintain and expand relationships with this customer group Debts in groups and in this period decreased while debts in groups and fluctuated Group debt accounted for 0.89% in 2017 (VND 4,772,389 million), in 2018 group debt decreased to 0.60% equivalent (VND 3,736,701 million), in 2019 this group debt decreased to , 34% (VND 2,501,352 million) In 2017 to 2019, Group debt also decreased from 0.67% to 0.08% Group debt in 2018 decreased from 0.13% to 0.05% and increased to 0.1% in 2019 Significantly, group debt from the datasheet can see a sharp increase of this debt, here NPL that the bank will no longer be able to collect the debt from customers If in 2017, the debt of group was only VND 1,902,127 million, equivalent to 0.35%, then in 2018 this debt group increased to VND 4,737,534 million, the proportion of 0.76% (corresponding to an increase of 149.1%) In 2018, the world economy continued to show positive signs, but there were still potential risks from trade wars between major economies, affecting the economy as well as the business situation of many businesses That is also the reason why the debt that is likely to raise capital (Group debt) increases; Many businesses and household businesses face many difficulties, and the bankruptcy situation makes many customers unable to pay their debts Another reason is due to poor ability to appraise business plans, repayment ability of customers, and poor control of the loan usage process This has led to an increase in the proportion of potentially irrecoverable debt groups, although the bank has handled collaterals but has not fully recovered both the principal and interest of these debts 2017 2018 2019 Tỷ lệ nợ hạn Tỷ lệ nợ xấu 1,6% 1,58% 1,56% 1,11% 0,97% 0,78% Thanks to the restructuring of credit operations, strongly associated with the handling of bad debts, the ratio of bad debts and overdue debts in Vietcombank in the past years has tended to decrease Vietcombank's NPL ratio by the end of 2018 dropped to less than 1%, the lowest level in the past 10 years, reached its destination years earlier than the Vietcombank Restructuring Plan and was the first commercial bank in Vietnam NPL ratio is actually less than 1% and classified according to international standards The ratio of overdue debt at the bank is always kept below 2%, in 2017 the overdue debt ratio was 1.6%, gradually decreasing by 0.02% over the years until 2019 this rate was 1.56% The above result is because the bank has tightened credit, disbursed less, and had more control over lending c Collection debt target Debt collection turnover is the total amount of capital that the bank has collected from customers, it shows whether the bank's ability to collect debts is good or not The following table presents Vietcombank's debt collection period 2017-2019: 2018/2017 2019/2018 2017 2018 2019 (%) (%) Doanh số cho vay 1.458.668 1.623.756 1.718.858 11,32 5,86 Doanh số thu nợ 1.376.305 1.534.396 1.617.310 11,49 5,40 Hệ số dư nợ 0,944 0,945 0,941 In the period of 2010-2012, the bank's loan sales grew: from VND 1,458,668 million in 2017 to VND 1,623,756 million in 2018 (an increase of 11.32%), and in 2019 it was 1,718,858 million, equivalent to an increase of 5.86% over the previous year Accordingly, debt collection revenue also increased, Vietcombank's total debt collection in 2018 was 1,534,396 million dong, up 11.49% compared to 2017's debt collection (1,376,305 million dong) In 2017, the bank's lending subjects were mainly businesses, so the main source of debt collection was from businesses, and in 2018 and 2019 loans gradually shifted to individual customers, so the outstanding loans also is collected from the main group of individuals In 2019, the debt collection turnover is 1,617,310 million VND, an increase of 5.40% compared to 2018 Accordingly, Vietcombank's debt collection ratio is always high above 0.9% and changes insignificantly Specifically, over the three years of 2017, 2018, 2019, the debt collection ratio is: 0.944; 0.945; and 0.941 The growth rate of total outstanding loans is lower than the growth rate of loan sales, proving that the bank's debt collection is quite good Debt collection ratio evaluates the credit performance at the bank, showing that during that period, how much value a bank lends Vietcombank's debt collection ratio is relatively good, so the bank needs to continue promoting and improving the quality of lending operations so that loans are always safe and effective d Criteria for assessing the ratio of loans with collaterals (%) 2017 2018 2019 Tỷ lệ vay có tài sản đảm bảo 82,44 79,85 78,28 Tỷ lệ vay khơng có tài sản đảm bảo 17,56 20,15 21,72 Vietcombank mainly loans with collaterals, so the proportion of collaterals is always high, but is on a downward trend recently In 2017, loans with collaterals accounted for 82.44% of total loans, in 2018 the ratio was 79.85% and in 2019 it decreased to 78.28% Despite the downward trend, but lending with collaterals accounts for a high proportion, it proves that the bank is increasingly good at lending customers' collaterals This helps the bank avoid potential risks from customers' bad debts, and the risk of benefits is also lessened The proportion of unsecured loans of the bank also accounted for 17% to 22% during this period, and is on the rise Unsecured loans are unsecured, mostly loyal, long-term, reputable customers and have a good credit history The increase in unsecured loans meant an increase in the number of loyal and reputable customers with Vietcombank, so the unsecured loans were approved more At the same time, the absence of collateral still carries significant risks to the bank in the current volatile economic environment e Targets on loan interest collection 2017 2018 2019 Thu nhập lãi từ cho vay khách hàng 22.753.632 34.237.424 39.532.242 Tổng thu nhập 28.859.058 38.644.570 45.023.696 Thu nhập lãi cho vay/ tổng thu nhập 78,84% 88,59% 87,80% The main activity of the bank is always lending activities, therefore, interest income from lending activities always accounts for a high proportion (> 78%) of the bank's total income In 2017, interest income from customer loans was VND 22,753,632 million, accounting for 78.84% of total income In 2018, this number increased to VND 34,237,424 million (equivalent to an increase of 50.47%), accounting for 88.59% of total income In 2019, revenue from lending activities was VND 39,532,242 million with a growth rate of 15.46%, accounting for 87.80% of total revenue 2.3 Assessing lending efficiency at Vietcombank in the period of 2017-2019 2.3.1 Achievements Although the world economy has experienced many fluctuations in recent years, Vietcombank has constantly tried to operate business effectively, maintaining its position and trust with customers The Bank always tries to improve and innovate quality, services, diversify products and business forms to meet the increasing demands of customers Vietcombank has strictly implemented the regulations and guiding documents of the State Bank of Vietnam on improving the quality and enhancing lending activities to customers The Bank has reviewed and screened customers, continued building credit relationships with customers with healthy financial status, effective loan schemes, and resolutely refused to lend to customers with weak repayment history and financial features, customers who have a history of bad credit relationship with the bank In addition, Vietcombank has always closely followed the economic and political situation at home and abroad, directed by superior banks and local development programs and projects to build business plans and solutions to be compliant, ensure effective compliance with laws and business Business activities in the period of 2017-2019 continue to maintain a good development and growth momentum Vietcombank has well performed its role in promoting the image to the population, increasingly empowering its position in operations not only through the figures of profits or number of customers but also known as a bank for the development of the community In particular, lending is the most important activity and has been the most preferred bank With this attention paid to, lending activities at banks have gained many achievements Specifically: - Regarding loan sales: Every year, the bank's loan sales grow steadily The growth in loan sales shows that the increasing demand for consumer loans contributes to the loan sales in particular and the bank's total assets This shows that the efficiency of consumer loans is relatively stable Credit balance reached VND 728,945,394 million, up 16.2% compared to 2018 and reaching 100% of the assigned plan The highest sales of consumer loans are VND 1,718,858 million in 2019 2.3.2 Limitations 2.3.3 The cause of the limitations ... needs to change the way it operates That's why I chose the topic: "SOLUTIONS TO IMPROVE LENDING EFFICIENCY AT VIETCOMBANK" , to come up with some solutions to improve the loan performance of Vietcombank. .. Literature review of lending efficiency at commercial banks Chapter 2: Lending efficiency at Vietcombank in the period of 2017-2019 Chapter 3: Solutions to improve lending efficiency at Vietcombank. .. Research subjects: Lending activities at Vietcombank Research objectives: Assess loan effectiveness at Vietcombank to provide solutions and recommendations to improve and enhance loan efficiency 3