Development strategy of BIDV in the near future- 123docz.net

CHAPTER 4: IMPLICATIONS AND RECOMMENDATIONS FOR BIDV

4.1. Development strategy of BIDV in the near future

2017 was a successful year for Vietnamese economy. For the first time in many years, the socio-economic indexes of Vietnam have achieved and exceeded the objectives: economic growth reached 6.81%; income per capita rose by USD 170 compared to the figure of 2016; foreign direct investments reached the highest peak of the last ten years; import-export turnover also set a record with a trade surplus of USD 2.67 billion. The finance & banking sector in particular also witnessed essential achievements: successful control over inflation; lower interest rates in the context of rapidly increased total outstanding loans; high reserves of foreign currencies, helping the State Bank of Vietnam to flexibly monitor the exchange rates, setting the ground for Vietnam to achieve a higher credit rating in the future; improvements in resolving bad debts, enhancing the credit flows within the economy.

Against that backdrop, BIDV achieved positive business results, continuing to affirm its role and position as Vietnam‟s leading financial institution. About the development plan in the future, BIDV already set some priority objectives for the period from 2016 – 2020:

- Promoting the role of Joint Stock Commercial Bank which has major State ownership, maintaining its position as the bank with leading scale, quality, efficiency, and prestige in Vietnam; as the major bank, with national responsibility, actively contributing to macroeconomic stability and promoting the economic growth of the country.

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-Becoming the most modern Commercial Bank in Viet Nam in term of market share in fund mobilization, loans, and retail services and in the Top 3 market leaders in customer satisfaction as evaluated by an independent and reputable organization.

- Developing insurance business (life and non-life) as the 2nd main activity beside banking business, with the connection between insurance and banking products;

increasing insurance business‟s contribution to the total income of BIDV.

-Developing and diversifying product and service portfolio, maximizing cross-selling banking and insurance products, creating and developing closed insurance services, developing high-technology products which are differentiated from those of competitors being preferred in the market.

- Proactively, aggressively and deeply integrating into banking and financial market in the region. Applying and operating international standards and practices in the modern banking business; maintaining CAR under international rules and regulations of the State Bank of Vietnam; enhancing the capacity to manage risks; fully applying the provisions of Basel 2 as requested by the State Bank of Viet Nam (2018).

- Becoming the leading bank in both Vietnam and Southeast Asia in application of information technology to bring convenience, the best service and satisfaction to domestic and international customers.

Completing a model of governance complying with the law, routine activities, transparency, openness and efficiency. Changing organization model into centralized management at the Head Office and operating business activities under vertical application of modern and advanced banking model. Improving business efficiency and productivity.

-Improving the quality, efficiency of traditional distribution channels including branches, transaction offices, subsidiaries, affiliated companies, and promoting the development of modern distribution channels such as Internet

Banking, Mobile Banking, Contact Center, ATM, POS ... Actively developing and expanding distribution channels as well as commercial presence in the regional and international markets.

- Training and developing high quality human resources to meet the international standards and practices. This helps to improve the quality and effectiveness of banking operations in integration and globalization.

Continuing to improve the working environment with professional and friendly organization, development opportunities and benefits for all employees, per capita income higher than the market.

- Spreading BIDV‟s brand awareness extensively throughout domestic and international markets as the leading bank in Vietnam, whose banking and financial services are chosen by individuals and economic organizations.

Key targets for the Period from 2016 to 2020 Total assets increase 17%/per year

Fund mobilization increase 20%/ per year Outstanding loans increase 20%/ per year Profit before tax increase 19%/ per year NPLs ratio ≤ 3%

ROA 0.8% - 0.9%

ROE ≥ 15%

Development strategy of BIDV in the near future

Internal factors effecting the bank profitability

Other external factor effecting the bank profitability