A study on the enhancement of personal loans quality at Vietnam International Joint - Stock Commercial Bank – Hai Ba Trung Branch

BANKING ACADEMY OF VIETNAM

FOREIGN LANGUAGES FACULTY

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GRADUATION THESIS

A STUDY ON THE ENHANCEMENT OF PERSONAL LOANS

QUALITY AT VIETNAM INTERNATIONAL JOINT - STOCK

COMMERCIAL BANK – HAI BA TRUNG BRANCH

Student : Vu Thi Thu Van

Class : K20ATCC

Academic Year : 2017 - 2021

Student ID : 20A7510201

Advisor : Ms. Pham Thi Hoang Anh (Assoc. Prof.PhD)

Ha Noi, May 2021

Graduation Thesis Banking Academy

Student: Vu Thi Thu Van i Student ID: 20A7510201

CERTIFICATE OF ORIGINALITY

I would like to reassure that my graduation thesis is conducted by myself with

the support of the instructor and do not copy the research works of others. The

secondary information data used in the article is sourced and explicitly cited.

I take full responsibility for this certificate of originality!

Ha Noi, May 2021

Student

Vu Thi Thu Van

Graduation Thesis Banking Academy

Student: Vu Thi Thu Van ii Student ID: 20A7510201

ACKNOWLEDGEMENTS

I would like to express my deep and sincere gratitude to my supervisor, Ms.

Pham Thi Hoang Anh (Assoc. Prof. PhD), for helping me in the process of the

research and providing invaluable guidance throughout my research. Ms. Hoang

Anh has made a suitable suggestion and detailed comments to make my article as

complete as possible. It was a great privilege and honor to work under her guidance.

I also take immense pleasure in thanking all of my teacher in Foreign

Language Faculty at Banking Academy for their compensation and expensive

lessons during the past 4 years of study.

Finally, my special thanks are extended to Vietnam International Joint-Stock

Commercial Bank – Hai Ba Trung Branch. Especially, the Board of Directors of the

bank has expedited me to go to the practice and enthusiastically supported me

during the training period. At the same time, I would like to thank the staff working

in the personal client room for enthusiastically helping and facilitating me during

the training process at the branch.

Graduation Thesis Banking Academy

Student: Vu Thi Thu Van iii Student ID: 20A7510201

TABLE OF CONTENT

CERTIFICATE OF ORIGINALITY .......................................................................... i

ACKNOWLEDGEMENTS ....................................................................................... ii

TABLE OF CONTENT............................................................................................ iii

LIST OF ABBREVIATIONS.....................................................................................v

LIST OF TABLES .................................................................................................... vi

LIST OF FIGURES.................................................................................................. vii

ABSTRACT............................................................................................................ viii

CHAPTER 1: INTRODUCTION ...............................................................................1

1.1. Introduction ..........................................................................................................1

1.2. Background of the study ......................................................................................2

1.3. Objective ..............................................................................................................4

1.4. Significance of the study......................................................................................4

1.5. Scope and limitation of the study.........................................................................5

1.5.1. Limitation of the study......................................................................................5

1.5.2. Scope of the study .............................................................................................5

1.6. Definition of terms...............................................................................................5

CHAPTER 2: LITERATURE REVIEW AND THEORETICAL FRAMEWORK...7

2.1 Literature review ...................................................................................................7

2.2. Theoretical framework .........................................................................................9

2.2.1. Theoretical Background of Personal Loans at Commercial Bank....................9

2.2.2. Theoretical Background of Personal Loans Quality.......................................14

CHAPTER 3: PROCEDURE OF SECONDARY DATA COLLECTION AND

ANALYSIS/ RESEARCH METHODOLOGY........................................................20

3.1 Locale of the study..............................................................................................20

3.2. Research design/ methodology ..........................................................................21

3.2.1. Method Alignment ..........................................................................................21

3.2.2. The Participants...............................................................................................21

3.2.3. The Instruments...............................................................................................21

3.3. Sources of Secondary Data ................................................................................24

3.4. Validity and Reliability of data analysis............................................................24

Graduation Thesis Banking Academy

Student: Vu Thi Thu Van iv Student ID: 20A7510201

3.5. Self Reflection on Secondary Data Collection Analysis ...................................25

CHAPTER 4: FINDINGS AND DISCUSSION ......................................................27

4.1. Findings and Discussion of the business operations at VIB Hai Ba Trung

Branch for three years (2018-2020)..........................................................................27

4.1.1. Business Results of VIB Hai Ba Trung Branch from 2018 to 2020...............28

4.1.2. Capital Mobilization........................................................................................31

4.1.3. Outstanding Loans ..........................................................................................35

4.1.4. Indicator reflecting the quality of business activities .....................................39

4.2. Findings and Discussion of general assessment on Personal Credit Activities at

VIB – Hai Ba Trung..................................................................................................47

4.2.1. Advantages......................................................................................................47

4.2.2. Disadvantages .................................................................................................48

4.2.3. Main causes limiting personal loans quality...................................................49

4.3. Conclusion..........................................................................................................52

CHAPTER 5: CONCLUSION AND RECOMMENDATION ................................53

5.1. Orientation for enhancing personal loans quality at VIB Hai Ba Trung Branch

in the period 2021 - 2026 ..........................................................................................53

5.2. Solutions for enhancing personal loans quality at VIB Hai Ba Trung Branch..56

5.2.1. Product development Solutions ......................................................................56

5.2.2. Solutions to improve credit quality.................................................................57

5.2.3. Human resource development Solutions........................................................59

5.2.4. Solutions to enhancing technology infrastructure...........................................60

5.2.5. Solutions to broaden customer relations and marketing activities..................60

5.3. Recommendations..............................................................................................62

5.3.1. Recommendations to The Goverment and The State Bank of Vietnam.........62

5.3.2. Recommendation to The head office of Vietnam International Joint Stock

Commercial Bank......................................................................................................64

5.4. Final thoughts.....................................................................................................65

REFERENCES..............................................................................................................

APPENDIX...................................................................................................................

Graduation Thesis Banking Academy

Student: Vu Thi Thu Van v Student ID: 20A7510201

LIST OF ABBREVIATIONS

Abbrevations Meanings

VIB Vietnam International Joint-Stock Commercial Bank

CBs Commercial Banks

HBT Hai Ba Trung Branch

NPLs Non-performing Loans

KPIs Key Performance Indicators

IMF International Monetary Fund

UNCTAD United Nations Conference on Trade and Development

FDI Foreign Direct Investment

WTO World Trade Organization

ILO International Labour Organization

OCB OricomBank

ACB A Chau Joint-Stock Commercial Bank

CIF Customer Information Files

CIC Credit Information Center

SBV State Bank of Vietnam

VND Viet Nam Dong

Graduation Thesis Banking Academy

Student: Vu Thi Thu Van vi Student ID: 20A7510201

LIST OF TABLES

Table 4.1: VIB Hai Ba Trung’s Outstanding Loans based on

customer types from 2018 to 2020

Page: 37

Table 4.2: Loss Loan Provision of VIB Hai Ba Trung over the

years (2018-2020)

Page: 42

Graduation Thesis Banking Academy

Student: Vu Thi Thu Van vii Student ID: 20A7510201

LIST OF FIGURES

Diagram 1.1: The proportion of personal credit growth of banks in

2020

Page: 2

Diagram 1.2: Lowest Personal Loans IR in 12/2020 Page: 4

Diagram 1.3: Credit Granting Process Page: 13

Diagram 4.1: Total Operating Income of VIB Hai Ba Trung (2018-

2020)

Page: 28

Diagram 4.2: Total Mobilized Capital of VIB Page: 32

Diagram 4.3: Mobilized Capital based on customer types Page: 34

Diagram 4.4: Total Outstanding Loans of VIB Hai Ba Trung Branch

(2018-2020)

Page: 36

Diagram 4.5: VIB Hai Ba Trung’s Outstanding Loans based on

customer types from 2018 to 2020

Page: 38

Diagram 4.6: NPLs and Overdue Debt Ratio of VIB – Hai Ba Trung

Branch in period 2018 – 2020

Page: 40

Diagram 4.7: Customer survey results on the ability to meet the needs

of customer at the HBT Branch

Page: 43

Diagram 4.8: Customer survey results on the safety of credit

transactions at VIB HBT

Page: 44

Diagram 4.9: Customer survey results on utilities of products Page: 45

Diagram 4.10: Customer survey results on satisfaction with the service

attitude of employees

Page: 46