PART 2: PART 2: CURRENT BACKGROUND OF THE CREDIT QUALITY AT BAOVIET COMMERCIAL JOINT STOCK BANK
2.3. Assess the current status of credit quality 1. Achievements
In the period 2019-2021, the bank's commercial activities will be highly challenging due to the influence of numerous variables within and without the economy, forcing the bank to continuously adapt and aggressively develop science and technology,
simplifying the process, and increase service quality. The following are some of Bao Viet Bank's outstanding credit quality achievements from 2019 to 2021.
Credit policy is suitable for the bank's resources and responsive to market fluctuations: The Bank constantly observes and evaluates market movements in order to make suitable and timely adjustments. credit policy while adhering to the State Bank's regulatory requirements Meanwhile, Baoviet Bank regularly adjusts credit policy to promote competitiveness, satisfy customer market needs, and manage economic fluctuations, focusing on developing competitive interest rates, lending terms, enhancing credit procedures, and market access.
Product development and innovation: In terms of products, from 2019 to 2021, Baoviet Bank has been highly effectively implementing new credit services and product promotions with many new utilities, with the goal of expanding customer network and meeting the diversified demands of the economy. Credit offerings are still planned and implemented in a consistent manner by the bank. Individual clients and SMEs are the primary targets of the bank's loan activity. However, the bank continues to ensure that other clients' credit needs are met in a timely and thorough manner.
Limiting and managing bad debts and overdue debts: The bank has continually improved its credit management and monitoring system, as well as raised officers' understanding of the importance of being cautious and cautious in the process of the project assessment and appraisal, as well as the property value. The bank is also continually striving to improve the quality of care operations and regulate the customer's capital usage behavior, as well as actively participating in debt recovery activities and providing acceptable levels of risk reduction provision.
2.3.2. Limitations
Although it has achieved highly encouraging achievements in recent years, Baoviet Bank's credit activities continue to have several limitations, which have a negative impact on the bank's credit activity efficiency and efforts to improve credit quality.
The following are some of the main causes of BVB credit quality deterioration:
Credit policy remains to have points that make it very hard for consumers to reach products: due to the effect of the Covid-19 pandemic in 2020, numerous customers are also having difficulty making timely loan payments, resulting in a record of past due debt group 2 in CIC. The bank's policy makes it difficult for customers who have had group 2 loans within the last 12 months to apply for a loan.
This is the bank's right strategy in order to prevent risks as much as possible;
nevertheless, given that the Covid-19 outbreak is still having a significant impact on production and commercial activities. Regulations imposed on consumers who have a history of group 2 outstanding loans may also have a positive influence.
The technology platform is inadequately developed and uncompetitive: The ability to develop and use technology for lending activities has not been extremely effective; the Internet Banking application for users is still complicated to use, and system failures do happen occasionally. In comparison to other elements, technological products that support customers' demands more conveniently and minimize complexity in credit officers' working processes, such as the Live Bank system and the BVB CRM program, have still not achieved high efficiency when compared with that large commercial joint-stock banks like as Techcombank, MBBank, and BIDV.
The bad debt ratio hasn't really significantly improved throughout the years:
When analyzing Baoviet Bank's credit quality from 2019 to 2021, it is obvious that credit quality has improved significantly year after year, particularly in 2019.
Despite encountering numerous difficulties as a result of the epidemic's impact, the bank contains a steady bad ratio and overdue debt, particularly in 2021. However, the bank's negative ratio really hasn't improved considerably since 2020, despite the fact that the total loan balance continues to expand, indicating that the bank's credit quality has not yet reached the anticipated effect. Baoviet Bank must adopt reform initiatives as quickly as possible.
2.2.3. Causes of limitations in BaoViet Bank a. Obtained from the bank
Based on analysis and discussions with colleagues, it is obvious that BaoViet Bank's credit quality is limited as mentioned above, in part due to the following reasons
The increase in bad debt and late debt is still mostly mainly a result of Covid-19, which has caused many challenges for clients' business initiatives, causing payback schedule delays. In comparison to the market's dynamic and continuous swings during the epidemic period, the product policy remains limited and inflexible.
Credit officers continue to make mistakes and neglect their responsibilities, leading to low- quality, risky loans. Since the bank has not spent sufficiently on updating its scientific and technological core, it has lost competitiveness in the market.
b. Obtained from customers
Consumers have brought the following factors to the current situation of BaoViet Bank's credit quality.
In the agreement with the bank, the consumer is dishonest, provides misleading information, and misuses funds. - The customer has a viable business idea but lacks the essential monetary capacity, as well as a distinguishing asset that is not legal and tricky to value. As a result of the impact of epidemics and natural disasters, manufacturing faced numerous challenges.
c. Other aspects
Through research, the current situation of BaoViet Bank's credit quality is also influenced by a few other objective factors, such as:
Administrative and legal actions with State administrative agencies such as notaries, judges, and so on are time-consuming and restrictive, negatively impacting the working process as well as the ability to handle bad debts and late debt. The state's economic, social, and legal policies are incoherent.
Enhancing Credit Quality In Bao Viet Commercial Joint Stock Bank
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PART 3. RECOMMENDATIONS FOR IMPROVING THE CREDIT