Báo cáo tốt nghiệp Tiếng Anh Ngân hàng tài chính GRADUATION REPORT ENGLISH FOR BANKING AND FINANCE

STATE BANK OF VIETNAM BANKING ACADEMY OF VIETNAM FACULTY OF FOREIGN LANGUAGES o0o GRADUATION REPORT MAJOR ENGLISH FOR BANKING AND FINANCE ENHANCING CREDIT QUALITY IN BAOVIET COMMERCIAL JOINT STOCK BANK STUDENT STUDENT ID CLASS SUPERVISOR HANOI, May 2022 ACKNOWLEDGEMENT In fact, success is always associated with support and help, whether more or less, directly or indirectly from others During the time I started studying at the Banking Academy until now, I have received a lot of attention and help.

STATE BANK OF VIETNAM BANKING ACADEMY OF VIETNAM

FACULTY OF FOREIGN

LANGUAGES

-o0o -GRADUATION REPORT MAJOR: ENGLISH FOR BANKING AND FINANCE ENHANCING CREDIT QUALITY IN BAOVIET COMMERCIAL JOINT STOCK BANK STUDENT : ………

STUDENT ID : ………

CLASS : ………

SUPERVISOR : ………

HANOI, May 2022

In addition, I would like to thank the officers and managers in the credit department

of Baoviet Bank for creating the best conditions for me to develop myself My firsttime going into practice, learning about credit in commercial banks, my knowledge

is still limited and there are still many surprises Therefore, it is inevitable that therewill be shortcomings, I look forward to receiving valuable comments from teachersand colleagues to improve my knowledge in this field

Finally, I would like to wish all the teachers in the department good health and faith

to continue carrying out their noble mission of imparting knowledge to futuregenerations

Hanoi, May 2022

Enhancing Credit Quality In Bao Viet Commercial Joint Stock Bank

2

STUDENT DECLARATION

Student name: Vũ Đức Nam

Declaration

I declare that the work attached is entirely my own and that I have given due

acknowledgment as required by the Faculty of Foreign Languages

I understand that the work submitted may be reproduced and/ or communicated todetect plagiarism

This work is entirely my own

I have not copied another student’s work

I have not copied or used in any way material from a text, journal, website,

or other published source without acknowledgment (including non – English

sources) I have cited and referenced fully and correctly as required by the Faculty ofForeign Languages where applicable

I have not reworded material from another source and presented it as my own

I have not used this work in a previous class (self–plagiarism)

PART I INTRODUCTION OF THE BAO VIET JOINT STOCK COMMERCIAL

PART 2: CURRENT BACKGROUND OF THE CREDIT QUALITY AT

2.1 Bank regulations on credit granting and credit quality 18

2.2 The reality of the credit quality at Bao Viet Commercial Joint Stock Bank 222.3 Assess the current status of credit quality 31

2.2.3 Causes of limitations in BaoViet Bank 33PART 3 RECOMMENDATIONS FOR IMPROVING THE CREDIT QUALITY

In addition to the introduction and conclusion, the table of contents, the list oftables, and the references, the internship report includes three main chapters asfollows:

Part 1 Introduction Of Bao Viet Joint Stock Commercial Bank

Part 2 Reality Of The Credit Quality At Bao Viet Joint Stock Commercialbank

Part 3 Recommendations For Improving The Credit Quality Of Bao Viet JointStock Commercial bank

Enhancing Credit Quality In Bao Viet Commercial Joint Stock Bank

6

VŨ ĐỨC NAM-K21ATCB

LIST OF ABBREVIATIONS

BVB Bao Viet Joint Stock Commercial Bank

SBV State Bank of Vietnam

SME Small and Medium Enterprise

CIC Credit Information Center

VAMC Vietnam Asset Management Company

LIST OF FIGURES AND TABLES

Figure 2 Loan Turnovers Of BaoViet Bank in the period of 2019-2021 23 Figure 3 Debt Collection Turnover of BaoViet Bank in the period of

Table 2. Loans and debt collection turnovers of BaoViet Bank

2019-2021

23

Table 3. Total outstanding loans to customers of BaoViet Bank

Enhancing Credit Quality In Bao Viet Commercial Joint Stock Bank

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PART I INTRODUCTION OF THE BAO VIET JOINT STOCK COMMERCIAL BANK

1.1 History of Development

● Legal name: Bao Viet Joint Stock Commercial Bank

● Transaction name: BaoViet Bank (BVB)

● Legal form: Joint stock company

● Address: Corner Stone Building, No 16 Phan Chu Trinh, Phan ChuTrinh Ward, Hoan Kiem District, Hanoi

● Tax Identification Number: 0103126572

● Certificate of operation number: 328/GP-NHNN dated 11/12/2008

● Charter Capital: 3.150 billion VND (2021)

● Total Assets: 59.822 billion VND (2021)

● Chairman Of The Board: Mr Lưu Quyết Thắng

● General Manager: Mr Cao Nam Giang

Enhancing Credit Quality In Bao Viet Commercial Joint Stock Bank

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as well as the youngest commercial bank in Vietnam's credit institutions system.The

establishment of BAOVIET Bank has strengthened the whole strength forsustainable and complete development of the BAOVIET System by forming arobust triangle of Insurance – Investment – Banking.

BAOVIET Bank has numerous favorable conditions in developing partnershipswith domestic and international economic organizations, and in applying the mostadvanced and effective banking technologies to create the Bank's competitivestrength and premise to become one of the leading banks in Vietnam, thanks toBaoviet Holdings, the largest founding shareholder, and other domestic reputableorganization shareholders

BAOVIET Bank has strived for long-term development, as well as companyexpansion based on stability and efficiency, as well as scale growth associated withsafe operations that adhere to international norms and procedures Furthermore,BAOVIET Bank aims to build and innovate a modern banking system focused atachieving specified business plans and ensuring both interests and benefits ofshareholders and employees

BAOVIET Bank, inspired by the company slogan "Your trust, Our commitment,"pledges to build a standard financial intermediary, offering the best products andservices, and bringing the greatest benefits to each customer

The development journey of Baoviet Bank through the time:

● In 2008-2009, the establishment of BAOVIET Commercial Joint Stock Bankunder the operation license No 328/GP-NHNN by the State Bank ofVietnam, the opening of the first branch in Ho Chi Minh City

● In 2010-2011, impressive growth in business scale and profit, the opening ofbranches in Nghe An, Hai Phong, Dak Lak, Can Tho provinces and activeparticipation in a variety of social- charity activities, contributing to thecommunity development

● In 2012-2013, the accomplishment to increase Charter capital to VND threetrillion The achievement of being ranked in group 2 of banks with healthy,stable, and secure operation Successful organization of a professionalcontest on the whole BaoViet Bank system scale - "Talented teller" Thelaunch of numerous cultural, sports, charity activities .etc, significantlycontributing to building BAOVIET Bank's own corporate culture identity.

● In 2014-2015, the project "Counter Quality Improvement" to improve andoptimize customer service quality The launch of the new website Thelaunch of multiple rewards programs, the concentration on developing e-banking services with various conveniences and utilities The honor of beingawarded the Gold Prize in the "2015 Annual report Vision Awards" contestorganized by the League of American Communications Professionals(LACP) The title "Excellent Labor Collective" awarded by the Ministry ofFinance

● In 2016-2018, strong development of personal products, electronic banking,especially Bancassurance coordinated with Bao Viet Insurance and Bao VietLife are trusted by customers Expansion and consolidation of the wholebranch network along with the unity of trademark image providing customerswith a consistent image and professional service style • The organization ofcorporate culture training program and a large number of meaningful socialcharity programs and activities The honor of being the "Outstanding Bankfor Community 2016" awarded by Vietnam Banks Association andInternational Data Group IDG and the " Vietnamese High-Quality Goods, -Perfect Service 2016" voted by Vietnam Standards and ConsumersAssociation for 24/7 interbank funds transfer service

● In 2018-2022, remarkable results in cross-selling business with BAOVIETHoldings' subsidiaries Strong concentration on developing customer care;enhancement of product marketing Continuous expansion of branch network

in Thanh Hoa, Gia Lai, and Thai Nguyen provinces The honor of being "TheBank with Innovative Banking Product/Service in 2018" and "Top 100 BestProducts and Services for Families and Children in 2018" The project for

conversion of the magnetic cards to EMV standardized chip cards Theproject

for transformation of Internet Banking interfaces to user-friendly ones,optimizing the service delivery Various support programs, accompanyingcustomers to overcome the Covid-19 pandemic.

1.2 Functions and Responsibilities of the Bao Viet Bank

Credit intermediate function: Commercial banks serve as a link between peoplewith excess capital and those who need it Customers will profit from theirperiodically idle capital in terms of interest, secure deposits, and utilities asdepositors Borrowers benefit from it because it allows them to meet a temporaryshortage of capital in the manufacturing and commercial processes while savingmoney, time, convenience, safety, and legality For banks, this service is the basisfor the bank's existence and development from earnings from the differencebetween lending interest rates and deposit interest rates, and it is also the basis forcommercial banks to contribute to the economy's credit scale For the economy, thisrole aids in the regulation of monetary capital from a position of temporary surplus

to a position of temporary scarcity, therefore contributing to the growth ofmanufacturing enterprises and fostering economic progress

Payment intermediary function: With this function, commercial banks take moneyfrom accounts on behalf of customers to pay beneficiaries or receive money intoaccounts Customers will be able to pay promptly, securely, and efficiently It alsocreates conditions for banks to attract deposit capital by producing a reliable non-cashpayment service This function circulates goods, enhances economic growth,contributes to the improvement of the social reproductive cycle, and helps tominimize the amount of currency, resulting in saving the cost of cash circulation

Treasurer function: Commercial banks take deposits, retain money, conservemoney, make withdrawal requests, and spend the money for their customers, whoare economic entities Customers get benefit from the cashier function since it notonly ensures the safety of their assets but also generates temporary excess capital

Capital is accessible for banks to conduct the credit function and serves as thefoundation for

banks to fulfill the payment intermediary function For the economy, the treasurerfunction supports societal accumulation while also concentrating temporary excessmoney to assist economic expansion.

Like other commercial banks, Baoviet Bank also provides a full range of bankingservices as accepting deposits from other domestic and foreign organizations,individuals and credit institutions in the form of demand deposits, term deposits andother types of deposits in Vietnam dong and foreign currencies Banks are grantedcredit in the following forms: Loans; Discounting, rediscounting negotiableinstruments and other valuable papers; Bank guarantee; Issuing credit cards;BaoViet Bank opens payment accounts for customers; Providing means of payment;Providing payment services including Performing domestic payment servicesincluding checks, orders, payment orders, collection requests, collection orders,letters of credit, bank cards, collection and payment services; Performinginternational payment services and other payment services after being approved bythe State Bank

1.3 Organizational structure of Bao Viet Bank

The current organizational structure of Bao Viet Bank includes:

 Board of Directors headed by Chairman Mr Luu Quyet Thang

 Board of Directors: Mr Cao Nam Giang is Interim CEO, supported by 3Deputy Directors Mr Ton Quoc Binh, Mr Nguyen Cong Nghia, Mr LaiVan Hai

 Supervisory Board: headed by the head of the Supervisory Board, Mr BuiQuang Vu

 business center unit, headed by Mr Le Quang Huy

 Retail and corporate banking, headed by Mr Pham Duc Hung

 Currency trading unit is operated by Mr Lai Van Hai

 Credit approval unit, headed by Mr Nguyen Duc

 Risk management unit, headed by Ms Nguyen Thi Thu Huong

 The Financial Management Unit is headed by Ms Nguyen Quynh Anh

Figure 1: The BaoViet Bank Organization Chart

Source: BaoViet Bank Annual Report 2019Baoviet Commercial Joint Stock Bank's corporate governance structure consists ofthe following components: a General Meeting of Shareholders, a Board ofSupervisors, a Board of Directors (including functional committees), an ExecutiveBoard, and functional committees The Parent Company's organizational structure isbased on the principle of assignment and management based on functionaldepartments that have a tight interaction with one another

In general, today's governance model has been developed and follows tointernational principles and requirements The restructuring of the governance

model initially increased the efficiency of management, governance, and theeffectiveness of the

Board of Directors for the executive instrumentation; performing the function of

managing owners' investment capital through a structure of regulation andsupervision throughout the bank in terms of strategy, investment, and riskmanagement.

The Board of Directors has formed operational committees and boards to assist inthe development of strategic direction, audit, financial, and risk management interms of improving governance efficiency in compliance with internationalstandards

Source: BaoViet Bank Annual Report

Through the development process, BaoViet Bank has strengthened its place in theeconomic industry, giving satisfaction to clients, partners, and shareholders In theirstrategic period 2021-2023, BaoViet Bank pursues the goal of being a multi-functional, modern, customer-oriented retail bank, especially for individualcustomers and SMEs, with the orientation of "growth - sustainability – quality based

on the built foundation

BVB has announced that its revenue in 2021 climbed by 14,7% over the previousyear, reaching more than 4488 billion VND, mainly from profit of tradinginvestment securities around 165 Billion VND

By 2021, an extremely difficult year for the economy under the terrible impact ofepidemics and natural disasters, BaoViet Bank can still achieve deposits that exceedexpectations With a total deposit of 50293 billion VND, the growth rate reached14.46% compared with 2020

As can be seen, the bank's net income tends to rise year after year The bank'soverall profit after tax was VND 126 billion in 2020, an increase of VND 32 billionover 2019, corresponding to a 34.04 percent growth rate By 2021, the impact of theCovid- 19 pandemic will affect the profits from service activities and otheractivities; however, with the right and timely policies in place, as well as thedetermination of all officers and employees in the company, profits from serviceactivities and other activities will be reduced Ensuring the bank's operationalefficiency has contributed to the bank's net interest income growing at a healthyrate As a result, the bank's overall profit after tax was roughly VND 161 billion, anincrease of 27.77 percent over the same period in 2020

1.5 Introduction of the credit department of BaoViet Bank

1.5.1 A brief introduction of the credit department of BaoViet Bank

The credit department of BaoViet Bank is responsible for supervising the actualcredit process Making loans is one of bank's core activities, and banks createrevenue by charging higher interest rates on loans than they do on customerdeposits

The credit department of the bank is responsible for selecting and vetting borrowers,and it is required to analyze the financial status of applicants for credit, their ability

to use the funds to make a profit, and their capacity to pay back the principal andinterest money, as well as maintain a log of current loan payments Creditinformation is gathered in a secure manner and saved for future use.

Duties of a bank credit officer:

 Developing and utilizing potential customers: This is the most fundamentalaction that every credit officer must perform in order to expand the bank'scustomer base and enhance sales Creditors will search for possible customerinformation, excluding potential clients in order to plan for using of thebank's services Individual customers will commonly save money, makepayments, borrow investment capital, and so on, whereas corporate clientswill generally be credit services

 Consulting service information for customers: Once the credit officer hasobtained client information, he or she must work directly with the consumer

to provide advise and information about the present services that customers

is seeking The banker will select a suitable service based on the customers'requirements, answer questions completely, and help the consumercomprehend the many types of services

 Appraising of customer information: One of the required skills for creditofficers is the appraisal When corporate or individual customers require aloan, credit officer will appraise customer data, evaluate indicators ofrevenue, reputation, financial capacity, business ability, business size, theability to repay debts, or appraise the valuation of assets in terms ofmortgage loans

 Monitoring the status of loan use: Credit officers will be responsible forsupervising the status of credit used in the banking process for both firms andindividuals If there is a problem with the ability to repay principal and interest

 Finalizing the contract according to regulations: When the customer repaysthe loan in full, including principal and interest, the credit officer isresponsible for concluding the contract in compliance with the regulations,disposing of the collateral, and performing transaction deregistration

1.5.2 Starting and ending dates of internship

Starting date: February 14nd, 2022

Ending date: May 9th, 2022

1.5.3 Characteristics of the position

I am now interning at Baoviet Bank as a credit officer Today, more and moretrainees are recruited for the role of bank credit officer This is an excellent chance forstudents who wish to study and advance in their careers At BaoViet Bank, mymajor task is to seek prospective customers, introduce financing options that aresuited for them, and help them through loan procedures and documentation I work

in a position to assist official staff in obtaining, checking, and completing customer

’s credit documents, such as scanning document files, stamping credit grantingprocedures, and providing granting credit report to other departments in the bank inaccordance with regulations During my internship at Baoviet Bank, I have applied

a lot of skills and knowledge that I have learned through the study program ofBanking Academy, specifically in the Faculty of Foreign Languages For example,you can apply the knowledge of business correspondence to write emails, andunderstand terms related to import and export With experience in speakingsubjects, I can confidently present my ideas to the officers in the department.Besides, using and operating office equipment is not too difficult for me thanks to

my background knowledge of general computer science Reading comprehensionskills also help me read credit documents quickly which improves work efficiency.Intercultural communication also helps me get acquainted with colleagues fromother countries, overcoming cultural barriers However, this can be stated that thiswould be a difficult job with the highest rate of rejection among banking internshippositions So I'm trying to train myself well and do well in this, in the hopes that myprospects of becoming a banker would grow

PART 2: CURRENT BACKGROUND OF THE CREDIT QUALITY AT BAOVIET COMMERCIAL JOINT STOCK BANK

2.1 Bank regulations on credit granting and credit quality

2.1.1 Nature of credit

Credit comes from the Latin word Creditum, which means "trust" is a type oftransaction in which the lender gives an asset, such as money or goods, to theborrower, and the borrower has temporary access to that asset for a given length oftime The parties have agreed on a time frame beyond which the lender will berequired to repay both the principal and the agreed-upon interest Bank credit is amore progressive and systematic form of credit To restrict the condition of usury,black credit, and unstructured lending, which has severe effects on the stability ofsociety and the economy, banks will operate under oversight and control Bylegislation, the government acts as a bridge to engage credit financial intermediationfor the economy Bank credit activities can thus be understood as a type of credittransaction in which financial institutions are banks that provide funds to debtorswho are individuals, economic and socio-political organizations based on strictregulations set forth by banks and government agencies, according to the principle

of borrowing with an unconditional return of both capital and interest as specified inthe parties' agreement

Credit operations in the commodities economy are inextricably linked to theproduction and sale of goods Although capital requirements vary by industry,manufacturing activities are usually related to capital requirements However, due tothe disparity between capital needs and the time capital needs, when there is ashortage or surplus of capital in the market, making timely meeting the needs ofbusiness entities is hard Funds requested from investors are limited, and cashmobilized from individuals is ineffective This causes slowness and inefficiencies inmanufacturing operations, decreasing the economy's growth velocity In response tothis difficulty, commercial banks act as middlemen, repaying loans and mobilizingthe max amount of idle capital in the economy, so establishing a capital resourcehighly vast, and easily accessible to commercial entities Bank credit is governed by

law, adhering to the strict principles and regulations established by the governmentand the banks themselves, and operating on the basis of strict and appropriateprocesses, ensuring flexibility and ease of access to customers, while providing safetyand reducing risks for banks With the establishment of bank credit, loan suppliesare always secured, idle money sources in the economy would be profitable, andthose in the market who lack capital will have quicker access to capital As a result,new companies can expand steadily and act as a jumping-off point for economicprogress The construction and development of bank credit is a significant stepforward for the global economy in general and the Vietnamese economy inparticular.

2.1.2 The role of bank credit

The establishment and development of bank credit is a critical step for the economy,assisting in the promotion of economic development and the regulation of cash flow

- the lifeblood of the market economy The following characteristics indicate thefunction of bank credit in the economy and society:

For economics: Bank credit serves as an intermediary link to manage and circulatefinancial flows on the market, enabling capital movement and thereby stimulatingeconomic development: The commodity system is constantly related to capitalneeds; nevertheless, the capital needs of each business vary greatly from time totime, resulting in an asymmetry between market capital and essential capital ineconomic activities Furthermore, the ability of commercial entities to access idlecash is severely curtailed As a result of the appearance of bank credit, idle capital iscirculated to those in need of capital, producing flexibility and stability of cash flowwhile ensuring consumer profits for idle capital owners

Bank credit encourages overseas trade development: Cooperation and trade withother economic entities throughout the world are critical in the age of globalization.With the emergence of bank credit, businesses will be supported with stablebusiness capital, which, combined with the bank's global economic supportactivities such as guarantee, inter-bank money transfer, and so on, will promote

business enterprise trade activities, contributing to the rise of businesses in theglobal economy.

Bank credit enhances the quality and market prosperity: Due to the rigorousrestrictions governing bank credit, economic entities seeking loans must verifyproject quality They must use their own money while also adhering to the capitalusage agreement made with the bank; this helps to assure the quality of thecompany, limits negatives, frauds, and ensures idle cash is used reasonably, for theright purposes, and without loss.

For banks: Bank credit is a significant source of revenue for banks: Interest incomeand services provided always account for a significant share of total bank revenue.Bank credit creates a relationship between banks and financial institutions: Supportand communication during the process of working with economic entities aid in thedevelopment of long-term collaborative partnerships between banks and otherfinancial institutions customers and entities, so that they can timely support theparties' next projects

Support and connectivity during the process of working with economic entities aid

in the development of long-term collaborative partnerships between banks and otherfinancial institutions, customers, and entities, so that they can timely support theparties' next projects

Bank credit boosts prestige and competitiveness in the banking market: Aspreviously stated, credit is always one of the operations that banks prioritize interms of creating and developing Efficient and successful credit activities not onlygenerate a large profit for the bank but also help create the bank's brand name andstrengthen the bank's position in an increasingly competitive business environment

2.1.3 Regulations on credit policy

Credit policies serve as guiding guidelines from the Head Office and leaders, assisting

in the precise and successful shaping and operation of credit Credit policy governshow a bank selects its target consumers, product characteristics, and customerservice methods It is the bank's policy because it plays such a significant part in thebank's operations Credit policy must be reasonable, taking into account the bank'sresources, characteristics, and financial situation A bank with an average credit