Improving credit quality at Vietnam joint stock commercial bank for industry and trade - Thu Duc Branch: Khóa luận tốt nghiệp Đại học / Cu Ngo Hai Yen

MINISTRY OF EDUCATION AND TRAINING THE STATE BANK OF VIET NAM

BANKING UNIVERSITY OF HO CHI MINH CITY

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CU NGO HAI YEN

IMPROVING CREDIT QUALITY AT VIETNAM

JOINT STOCK COMMERCIAL BANK FOR

INDUSTRY AND TRADE –THU DUC BRANCH

GRADUATION THESIS

MAJOR FINANCE AND BANKING

ID: 7340201

HO CHI MINH CITY, 2018

MINISTRY OF EDUCATION AND TRAINING THE STATE BANK OF VIET NAM

BANKING UNIVERSITY OF HO CHI MINH CITY

--------------------------------------

CU NGO HAI YEN

IMPROVING CREDIT QUALITY AT VIETNAM

JOINT STOCK COMMERCIAL BANK FOR

INDUSTRY AND TRADE –THU DUC BRANCH

GRADUATION THESIS

MAJOR FINANCE AND BANKING

ID: 7340201

SUPERVISOR

PHD LE DINH HAC

HO CHI MINH CITY, 2018

ABSTRACT

The graduation thesis with the topic "Improving credit quality at Vietnam

Joint Stock Commercial Bank for Industry and Trade - Thu Duc Branch"

presented the general theories on bank credit and raised the characteristics and roles

credit quality, credit quality, and indicators to measure credit quality. From these

basis, the author collects data related to the assessment criteria, comments on credit

activities and quality of credit products of the Branch. Then, draw the results and

limitations of credit quality at the Branch. According to the research results,

VietinBank Thu Duc has a high growth rate of credit outstanding balance, overdue

debt ratio and bad debt ratio are always at low levels. In addition, according to the

survey from customers, the problem that customers are not satisfied in the business

is the cumbersome precedures, the transaction processing time is not fast, the time

to solve loans are still slow, credit products are not very diversified, marketing

policies are not focused. The above mentioned issues are formed partly from banks

and partly from policy, economic situation and customers' activities. Based on the

analytical reasons, the author proposed solutions to overcome, and made

recommendations to the Government, State Bank of Viet Nam and Vietinbank.

COMMITMENT

This is the author's own research, the results in the reaserch are true, without

prior publication of content or other content that is performed by others except for

the references which are cited full source in the thesis.

Author

CÙ NGÔ HẢI YẾN

ACKNOWLEDGEMENT

After four years studying at the Banking University of Ho Chi Minh City, I

have gained a wealth of knowledge and experience from talented, dedicated and

enthusiastic teachers, especially excellent care for students from the Faculty of

Finance - Banking.

Hereby, I would like to send my sincere thanks to all the teachers of Banking

University in Ho Chi Minh City in general and the Faculty of Finance and Banking

in particular,who have created a good environment for me. In particular, I would

like to thank PhD. Le Dinh Hac for giving useful tips, knowledge to help me

complete the graduation thesis.

During the course of the graduation thesis, this can not avoide restriction due

to the shortcomings of experience and limited knowledge. I am looking forward to

receive comments from the teachers, so I can complete the thesis with better quality

and accumulate more knowledge and experience for later work.

TABLE OF CONTENTS

TABLE OF CONTENTS

LIST OF ABBREVIATIONS

LIST OF TABLES

INTRODUCTION

CHAPTER1: THEORY OF CREDIT AND BANK CREDIT QUALITY..........1

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

1.1. Overview of credit......................................................................................1

1.1.1. Credit definition and credit characteristics................................................1

1.1.2. Roles of bank credit...................................................................................2

1.1.3. Credit classification ...................................................................................3

1.2. Credit quality of commercial banks .........................................................8

1.2.1. Definition of credit quality of commercial banks .....................................8

1.2.2. Criteria for evaluating credit quality ........................................................9

1.2.2.1. For customers .........................................................................................9

1.2.2.2. For banks ..............................................................................................12

1.3. Factors affecting the credit quality of commercial banks ..........................14

1.3.1. Factors belong to the bank.......................................................................15

1.3.2. Factors belong to the business, customers...............................................18

CHAPTER 1 CONCLUSION................................................................................23

CHAPTER 2: QUALITY OF CREDIT IN VIETNAM BANK FOR

INDUSTRY AND TRADE - THU DUC BRANCH.............................................24

CHAPTER 2 INTRODUCTION ...........................................................................24

2.1. An overview of VietinBank.....................................................................24

2.1.1. Overview of VietinBank..........................................................................24

2.1.2. Development process................................................................................25

2.1.3. Organizational chart of VietinBank..........................................................25

2.1.4. Mission of VietinBank ............................................................................26

2.1.5. Achievements of VietinBank ..................................................................27

2.2. General introduction of VietinBank Thu Duc..........................................27

2.2.1. Formation process.....................................................................................27

2.2.2. Functions of VietinBank Thu Duc ...........................................................28

2.2.3. Organizational structure of VietinBank Thu Duc .................................28

2.2.3.1. Organizational structure ........................................................................29

2.2.3.2. Duty of the departments .......................................................................29

2.2.3.3. Fields of activity of VietinBank Thu Duc ............................................32

2.2.4. Business results of VietinBank Thu Duc.................................................33

2.3 Current scenario of credit activities at VietinBank Thu Duc ...................37

2.3.1 Credit products at VietinBank Thu Duc...................................................37

2.3.2. Credit performance at VietinBank Thu Duc ...........................................43

2.4. Valuation of credit quality at VietinBank Thu Duc .................................54

2.4.1. From customer perspective.......................................................................54

2.4.2. From bank perspective .............................................................................58

2.4.3. Limitations................................................................................................58

2.4.4. The cause of the limitations......................................................................59

2.4.4.1. Causes from banks.................................................................................59

2.4.4.2. Causes from the customers....................................................................60

2.4.4.3. Objective reasons...................................................................................61

CHAPTER 2 CONCLUSION................................................................................62

CHAPTER 3: SOLUTIONS TO IMPROVE CREDIT QUALITY AT

VIETINBANK THU DUC......................................................................................63

CHAPTER 3 INTRODUCTION ...........................................................................63

3.1. Business orientation of Vietinbank Thu Duc ..........................................63

3.2. Solutions to improve quality of credit in VietinBank Thu Duc ...............64

3.2.1. Simplify procedures of corporate loans....................................................64

3.2.2. Improve the efficiency of coordination between departments................64

3.2.3. Diversify credit products.........................................................................64

3.2.4. Apply advanced science and technology.................................................64

3.2.5. Advance the marketing policy................................................................65

3.3 Recommendation.....................................................................................66

3.3.1 Recommendation to the State..................................................................66

3.3.2 Recommendation to the State Bank ........................................................66

3.3.3 Recommendations to VietinBank............................................................67

CHAPTER 3 CONCLUSION................................................................................69

CONCLUSION........................................................................................................70

REFERENCES........................................................................................................71

APPENDIX ..............................................................................................................74

LIST OF ABBREVIATIONS

Table 1

Abbreviations Meaning

Agribank Vietnam Bank for Agriculture and Rural Development

ASEAN Association of South East Asia Nations

ATM Automatic Teller Machine

BIDV

Joint Stock Commercial Bank for Investment and

Development of Vietnam

FDI Foreign Direct Investment

GDP Gross domestic product

ISO International Organization for Standardization

L/C Letter of credit

SBV State Bank of Vietnam

SME Small and Medium sized enterprises

SWIFT

Society for Worldwide Interbank Financial

Telecommunication

UPAS L/C Unsance payale at sight Letter of credit

VAMC Vietnam Asset Management Company

VBI Vietinbank Insurance Company

Vietcombank Joint Stock Commercial Bank for Foreign Trade of Vietnam

VietinBank Vietnam Joint Stock Commercial Bank for Industry and Trade

VietinBank

Thu Duc

Vietnam Joint Stock Commercial Bank for Industry and Trade

- Thu Duc Branch

VND Dongs – Viet Nam Dong