Enhancing the efficiency of capital mobilization of the bank for the investment and development of vietnam – chuong duong branch

Evaluation of capital mobilization of Joint Stock Commercial Bank for Investment and Development of Vietnam - Chuong Duong Branch through survey questionnaires.. Evaluation of capital mo

ĐẠI HỌC QUỐC GIA HÀ NỘI TRƯỜNG QUẢN TRỊ VÀ KINH DOANH

-

NGUYỄN THỊ MAI LAN

ENHANCING THE EFFICIENCY OF CAPITAL

MOBILIZATION OF THE BANK FOR THE INVESTMENT AND DEVELOPMENT OF VIETNAM – CHUONG DUONG

ĐẠI HỌC QUỐC GIA HÀ NỘI TRƯỜNG QUẢN TRỊ VÀ KINH DOANH

-

NGUYỄN THỊ MAI LAN

ENHANCING THE EFFICIENCY OF CAPITAL

MOBILIZATION OF THE BANK FOR THE INVESTMENT AND DEVELOPMENT OF VIETNAM – CHUONG DUONG

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS.TS PHẠM THỊ THANH HOÀ

HÀ NỘI - 2022

DECLARATION

I hereby declare that this thesis on the topic “Enhancing the efficiency of the Capital Mobilization of the Bank for Investment and Development of Vietnam - Chuong Duong Branch” is my personal research work during this

period via All data used for analysis in the thesis and research results are my own research and analysis, objectively, honestly, with clear origin and have not been published in any form I take full responsibility for any dishonesty in the information used in this study.”

Hanoi, 15/09/2021

Student

Nguyen Thi Mai Lan

ACKNOWLEDGEMENTS

First of all, I would like to thank my supervisor, Assoc of Prof Dr Pham Thi Thanh Hoa This graduate thesis would have never been accomplished if I hadn’t had her assistance and dedicated involvement in every step throughout the process I would like to thank you very much for your support and understanding over these times

I would also like to show gratitude to my teachers at the Hanoi School of Business and Management (HSB) with enthusiastic and inspiring teachers, including Their teaching style and creativities for the topic made a strong impression on me and I have always carried positive memories of all the classes with me Getting through my thesis required more than academic support, and I have many, many people to thank for listening to and, at times, having to tolerate me over the past two years I cannot begin to express my gratitude and appreciation for their friendship My friends have been unwavering in their personal and professional support during the time I spent

at HSB

TABLE OF CONTENTS

DECLARATION i

ACKNOWLEDGEMENTS ii

TABLE OF CONTENTS iii

LIST OF TABLE vi

LIST OF FIGURE vii

INTRODUCTION 1

1 The urgency of the topic 1

2 Overview of research 2

3 Purpose and mission of the study 6

3.1 General objective: 6

3.2 Detail goal: 6

4 Research question 6

5 Object and scope of the study 7

6 Research method 7

6.1 Approach method: 7

6 Research method: 7

7 Proposed thesis structure 8

CHAPTER 1 9

THEORETICAL BASIS OF CAPITAL MOBILIZATION ACTIVITIES OF A COMMERCIAL BANK 9

1.1 Commercial bank overview 9

1.1.1 Concepts and functions of Commercial Banks 9

1.1.2 The main activities of commercial banks 10

1.1.3 Roles and functions of commercial banks 11

1.1.4 Basic operations of a commercial bank 14

1.1.4.1 Fundraising activities 14

1.2 Capital raising activities of commercial banks 15

1.2.1 The concept and role of capital mobilization for commercial banks 15

1.2.2 The necessity of raising capital for commercial banks 16

1.2.3 Types of capital mobilization by commercial banks 18

1.3 Criteria for evaluating capital mobilization activities at commercial banks 21

1.3.1 The role of capital mobilization activities for commercial banks 21

1.3.2 Evaluation of capital mobilization activities at commercial banks 21

1.4 Factors affecting the capital mobilization of commercial banks 25

1.4.1 Internal factors of commercial banks 25

1.4.2 External factors of commercial banks 27

CHAPTER 2 30

CURRENT SITUATION OF CAPITAL MOBILIZATION IN VIETNAM BANK FOR INVESTMENT AND DEVELOPMENT – 30

CHUONG DUONG BRANCH 30

2.1 Overview of Bank for Investment and Development of Vietnam - Chuong Duong Branch 30

2.1.1 History of formation and development 30

2.1.2 Business performance of Bank for Investment and Development of Vietnam - Chuong Duong Branch 34

2.2 Actual situation of capital mobilization at Bank for Investment and Development of Vietnam Chuong Duong Branch 37

2.2.1 Forms of capital mobilization 37

2.2.2 The ability to meet the capital use needs of BIDV, Chuong Duong branch 49

2.2.3 Cost of raising capital 51

2.3 Evaluation of capital mobilization of Joint Stock Commercial Bank for Investment and Development of Vietnam - Chuong Duong Branch through survey questionnaires 52

2.3.1 Evaluate about: Capital mobilization policy 52

2.3.2 Evaluate about: Capital mobilization products 53

2.3.3 Evaluate about: Facilities of BIDV Chuong Duong 53

2.3.4 Evaluate about: Capital mobilization activities 54

2.4 Evaluation of capital mobilization activities at Bank for Investment and

Development of Vietnam – Chuong Duong Branch 55

2.4.1 Result 55

2.4.2 Limited and causes 57

CHAPTER 3 62

SOLUTIONS TO PROMOTE CAPITAL MOBILIZATION AT VIETNAM'S INVESTMENT AND DEVELOPMENT CHUONG DUONG BRANCH 62

3.1 Orientation for capital raising activities of BIDV Chuong Duong 62

3.1.1 General orientation 62

3.1.2 Orientation for capital mobilization 63

3.2 Solutions to increase capital mobilization for BIDV Chuong Duong 64

3.2.1 Diversify capital mobilization products and services 64

3.2.2 Building a reasonable capital mobilization policy, interest rate is the key factor 67

3.2.3 Develop plans and plans to use capital effectively 69

3.2.4 Promote Bank Marketing activities 70

3.2.5 Expand operation network and improve facilities 72

3.3 Recommendations 74

3.3.1 Recommendations to BIDV Vietnam 74

3.3.2 Recommendations to the State Bank of Vietnam 79

3.3.3 Recommendations to the State 81

CONCLUSION 83

REFERENCES 84

LIST OF TABLE

Table 2.1: Business results of BIDV Chuong Duong Branch period 2018-2020 36 Table 2.2: Funding results at BIDV Chuong Duong in the period of 2018-2020 38 Table 2.3: Credit balance of BIDV Bank Chuong Duong Branch period 2018-2020 40 Table 2.4: Mobilization of capital through deposits of residents in the period 2018-

2020 42 Table 2.5: Capital mobilization through the issuance of valuable papers in the period 2018-2020 43 Table 2.6: Payment deposits of economic organizations in the period of 2018-2020 44 Table 2.7: Capital structure by currency at BIDV Chuong Duong in the period of 2018-2020 45 Table 2.8: Capital structure by term at BIDV Chuong Duong in the period of 2018-

2020 47 Table 2.9: Capital structure by mobilized sources in the period 2018-2020 48 Table 2.10: Balance between capital mobilization and use in the period 2018-2020 49 Table 2.11: Balance between capital mobilization and use structure in the period of 2018-2020 50 Table 2.12 Cost of capital mobilization over the years in the period 2018-2020 51 Table 2.13: Survey results on capital mobilization policy of BIDV Chuong Duong 52 Table 2.14: Survey results on capital mobilization products of BIDV Chuong Duong 53 Table 2.15: Survey results on facilities of BIDV Chuong Duong 53 Table 2.16: Survey results on capital mobilization activities of BIDV Chuong Duong 54

LIST OF FIGURE

Figure 2.1: Organizational structure of BIDV, Chuong Duong branch 33

Figure 2.2: Business results of BIDV Chuong Duongperiod 2018-2020 37

Figure 2.3: Structure of capital by foreign currency 46

Figure 2.4: Balance between capital mobilization and use 49

INTRODUCTION

1 The urgency of the topic

Capital plays a very important role in any business For the commercial banking system as an intermediary operating in the monetary sector, capital is even more important Depending on the specific conditions of each bank, the environmental conditions in which a bank operates, banks often seek their own increasingly appropriate forms of capital mobilization

Raising capital is one of the fundamental problems that commercial banks always face In order to maintain regular operations, while ensuring solvency and the ability to provide capital for loans, banks must mobilize a stable source of capital, with a reasonable capital structure and cost the capital is low and the capital size is appropriate to the bank's scale of operations

However, in the context of our country's always changing economy and unpredictable fluctuations, banks always face difficulties in raising capital, such as difficulty in attracting customers, capital mobilization costs are increasing In addition, the network of banks is expanding day by day, raising the efficiency of capital mobilization is on top priority and plays an important role in improving competitiveness of the bank on the market

Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) - Chuong Duong Branch has always been focused and has achieved certain results in capital mobilization However, the capital mobilization process still faces many difficulties, the achievement is not high In addition to the significant impacts

of market factors such as: prices, high inflation, complicated exchange rate fluctuations, deposit interest rates are always hot, the competition among commercial banks is equal interest rates are increasingly drastic… the Branch also has shortcomings that need to be overcome On the other hand, the main source of income for BIDV Chuong Duong is net income from capital mobilization, credit and net service income, in which the net income from capital mobilization is a large, safe and stable source of income for spending branch Therefore, the branch

always considers raising capital as the top priority task The scale of the branch's capital mobilization every year has still grown well, but the income from the capital mobilization has grown more slowly, not commensurate with the increase in size, affecting the business efficiency of the branch The above situation is caused by many reasons, with objective reasons from the market side and subjective reasons from the Bank side

Facing such reality, the problem for BIDV Chuong Duong is to overcome the limitations, build prestige and brand name for customers, maintain and grow a stable capital base and balance for the use of capital to be able to stand and overcome difficulties in all situations

Therefore, how to solve this problem in order to effectively raise capital for the branch is a pressing issue posed to all the Board of Directors and employees of BIDV Chuong Duong Branch Therefore, as an employee of the Branch, I boldly

chose to research the topic: "Enhancing the efficiency of the Capital Mobilization

of the Bank for Investment and Development of Vietnam - Chuong Duong Branch" as the subject for my master thesis mine

2 Overview of research

a Foreign Studies:

- acob, B J., Ishaya, Y., & Innocent, I O (2019) Effect of Deposit Mobilization and Credit Financing of Commercial Banks on Capital Formation in Nigeria International Journal of Small and Medium Enterprises, 2(1), 47-55 https://doi.org/10.46281/ijsmes.v2i1.332

The low level of Capital formation in Nigeria has been blamed on the low level of savings occasioned by the low income level and high level of consumption which reduce the ability of banks to create money through intermediation This study investigates the effect of deposit mobilization and credit financing of commercial banks on capital formation in Nigeria Gross fixed capital formation was used as proxy for dependent variable, while credit to private sectors, lending rate and Total deposit liabilities were used as proxies of independent variables The study employed time series quarterly data from Q1 1980 to Q4 2015, which

constitutes 48 observations Multiple regression techniques were used to analyze the data The study found that (LRN and TDL) have positive impact on GFCF of Nigeria while credit to private sector has an inverse relationship with GDP In view

of this finding, the study recommended that Nigeria commercial banks should direct their intermediation activities effectively

re The Journal of Economic History , Volume 29 , Issue 4 , December 1969 ,

pp 657 - 686 DOI: https://doi.org/10.1017/S002205070007193X

The success with which capital funds are mobilized and transferred to industrial and related activities is widely regarded as a critical determinant of both the timing and the pace of industrialization in the modern era Gerschenkron, for example, has suggested that institutional developments which increased this type of capital mobility played an important role in the varying degrees of industrial progress of nineteenth-century European countries A functionally similar development, resulting from government intervention at the time of the Civil War, occurred in American banking and provided a powerful capital-supply stimulus for the United States's postbellum industrialization This study deals with the origins of this banking development, presents an analysis of its potential effects on patterns of capital movement, and tests the hypotheses arrived at in the theoretical analysis using banking data derived primarily from the Reports of the Comptroller of the Currency

- Omankhanlen, A E (2012) The Role of Banks in Capital Formation and

Economic Growth: The Case of Nigeria Economy Transdisciplinarity Cognition,

15 (1) pp 103-111

This stud; investigate the role of banks in capital formation and economic growth." The case of Nigeria for tl1e period 1980-2009 The economies of all market-oriented nations 'denend o,; 1 the ,efficient operation, of complex and delicately balanced systems of money~ an cred~ it Banks are an indispensable element in these system This stud;{ employed tn1~ e Ordinaty Least square netwd

in carrying m;t tl1e research The expanatoty variables employed include Commercial Banks Deposit Liability (BDL), Maximum Lending Rate (MLR), 1

Commercial Banks' Credit (CBC) and Investment by banks in Nigeria (BlV) The 'dependent variables are Gross Fixed Capital Formation (GFCF) and Gross Domestic Product (GDP), which is a measure of a nation's economic performance- economic growth {!l this instCfnce From the various test carried ; ut it was 'find out that Commercial Ba~.~ Deposit Liabilities, is fastic to Gross Fixed Capital Formation in Nigeria This positivity of the coefficient of Commercial Banks Deposit Liabilities "is 'in conformity to tfze economic"a prior/ expectation ·of a positive impact of Col}vnercial Banks Drmoit Liabilities on Gross Fixed,Capital Formation Also, the regression result shows that 'Commercial Banks Credits (CBC) has a positive ; impitct of Gross Fixed Capital Formation (GFCF) '!t is therefore _econmendea that efforts should be made by the monetary authorities to effectively manage the banks' maximum /ending This policy, thrust will most likely' result into increased investment activities which will enhance capital formation in •Nigeria needed for its reflector investments and industrial growth

- International Journal of Small Business and Entrepreneurship Research Vol.3, No.6, pp.44-71, November 2015 “THE EFFECTS OF DEPOSITS MOBILIZATION ON FINANCIAL PERFORMANCE IN COMMERCIAL BANKS IN RWANDA A CASE OF EQUITY BANK RWANDA LIMITED”

This study is about to establish the effects of deposit mobilization on the bank financial performance in commercial banks in Rwanda A case study of Equity bank Rwanda limited Deposits are an indispensable tool commercial banks use to enhance its profitability through advancing deposits mobilized to its customers in form of loans which make in return interest to commercial banks The lending activity is made possible only if the banks can mobilize enough funds from their customers Specific objectives of this study are to determine the effect of marketing strategies on the financial performance of commercial banks in Rwanda, to establish the effect of interest rate changes on the financial performance of commercial banks

in Rwanda and to determine the effect of banking technology introduced on the financial performance of commercial banks in Rwanda

b Domestic Studies:

- Nguyen Thi Thanh Ha (2013), Analyzing and proposing a number of solutions to enhance the efficiency of capital mobilization at Vietnam Joint Stock Commercial Bank for Industry and Trade, master thesis The author has analyzed the advantages and shortcomings that need to be removed and proposed solutions to improve the efficiency of capital mobilization at Vietinbank However, the important indicator reflecting the efficiency of capital mobilization is the marginal interest income ratio, the author has not mentioned

- Truong Thanh Hai (2014), Promoting the mobilization of residential capital

at Joint Stock Commercial Bank for Investment and Development of Vietnam Hai Van branch, master thesis The author has pointed out the need to raise capital from the residents of BIDV Hai Van branch The author also gives the reasons why the capital mobilization from the population of this bank is not yet developed

- Hoang Thi Hong Le (2014), Solutions to improve the efficiency of capital mobilization at Vietnam International Joint Stock Commercial Bank (VIB), master thesis Thesis outlined the positive and limited points about the efficiency of capital mobilization at the international joint stock commercial bank and outlined solutions

to improve capital mobilization efficiency at this bank The author has not analyzed the bank's capital mobilization efficiency by each customer type and deposit term

- Manh Hoang Diep (2012), Solution to improve capital mobilization efficiency

at Vietcombank branch Vinh, Master thesis The thesis has analyzed quite well the criteria for evaluating the efficiency of capital mobilization at Vietcombank branch Vinh However, there are still outstanding issues that need to be addressed such as deposit mobilization strategy, distribution network and channel

- Pham Thi Minh Thanh (2016), Deposit mobilization at Joint Stock Commercial Bank for Investment and Development of Vietnam - Hung Yen branch, master thesis The thesis has given a number of solutions to diversify capital mobilization forms at BIDV Hung Yen branch, the author pointed out the forms of capital mobilization at this bank such as: by term, by the source of formation and the purpose of capital use The thesis emphasizes that in order to increase the capital

mobilized for this bank in a sustainable direction, it is necessary to increase the proportion of capital mobilized from the population

In general, the above studies have systematized and clarified some theoretical issues about capital mobilization and the current situation of capital mobilization at each bank These works are of high value to the location of the banks studied However, each commercial bank has a capital mobilization management model or has different difficulties and advantages in capital

mobilization The above topics do not overlap with the topic "Enhancing the efficiency of the Capital Mobilization of the Bank for Investment and Development of Vietnam - Chuong Duong Branch" in terms of subject and scope

- On the basis of theory and theoretical reference, propose a system of solutions to improve the efficiency of capital mobilization at Joint Stock Commercial Bank for Investment and Development of Vietnam, Chuong Duong Branch

4 Research question

This study will focus on answering the following questions:

(1) Theoretical basis for mobilizing capital at commercial banks?

(2) What is the current status of capital mobilization activities at Joint Stock Commercial Bank for Investment and Development of Vietnam - Chuong Duong Branch?

(3) What is the level of customer satisfaction with capital mobilization activities at BIDV Chuong Duong?

(4) How to improve capital mobilization efficiency at BIDV Chuong Duong?

5 Object and scope of the study

- Research object: Fund raising activities at Joint Stock Commercial Bank for Investment and Development of Vietnam Chuong Duong Branch

- Research scope:

+ Scope of space: BIDV Chuong Duong branch

+ Scope of time: Studying debt mobilization activities at BIDV Chuong Duong in the period of 2018-2020 and proposing solutions for 2021 and the following years

6 Research method

6.1 Approach method:

The author approaches the research object (capital mobilization activities at BIDV Chuong Duong) from clarifying theoretical issues to identifying research objects and then to determining solutions to improve the efficiency of capital mobilization of enterprises BIDV Chuong Duong

6 Research method:

To achieve the set objectives, the thesis uses the following main methods: (1) Statistical analysis method: To analyze capital mobilization activities at BIDV Chuong Duong, the data is aggregated and detailed through stages, ensuring chain comparison and presented and illustrated by diagrams and tables

(2) System analysis method: To approach and analyze BIDV Chuong Duong's capital mobilization as a system as well as consider it as a module in the commercial banking system

(3) Survey method: Using customer survey to assess the quality of capital mobilization activities at BIDV Chuong Duong

(4) Forecasting method: Used in forecasting data indicators in capital mobilization activities at BIDV Chuong Duong in the future

(5) Interpretive and inductive methods: Used to analyze and evaluate the current situation and propose solutions to improve the efficiency of capital mobilization at BIDV Chuong Duong

7 Proposed thesis structure

In addition to the introduction, conclusion, table of contents, references, a list

of tables, a list of abbreviations, the thesis includes 3 chapters:

Chapter 1: Theoretical basis of capital mobilization activities of commercial

banks

Chapter 2: Current situation of capital mobilization at Bank for Investment

and Development of Vietnam – Chuong Duong Branch

Chapter 3: Solutions to improve capital mobilization efficiency at Bank for

Investment and Development of Vietnam – Chuong Duong Branch

CHAPTER 1 THEORETICAL BASIS OF CAPITAL MOBILIZATION ACTIVITIES OF A

COMMERCIAL BANK 1.1 Commercial bank overview

1.1.1 Concepts and functions of Commercial Banks

The term "Bank" was established long before the production of goods was born In the primitive stage, stemming from the needs of life, the activities of exchange, trade, the need to use, the large circulation of money, merchants established places with the purpose of exchanging money , receive deposits and collect fees from senders, and they also receive payments and payments on their behalf Thus, the first 3 banking operations were formed: depositing, exchanging money and paying on behalf

of the bank At first, the person who had to pay the fee was the depositor, but later, realizing the opportunity to profit from this deposit, the merchants paid a fee to the sender to attract and increase the ability to mobilize Through the process of development, merchants realize the need to borrow capital and they lend for profit, this

is the seed of other basic operations of commercial banks

The development of the commodity economy has led to the explosion of commercial banks becoming an attractive business industry in the monetary field The economy is developing more and more new banking operations are born to meet the needs of the market Many new services have appeared such as: L/C guarantee service, credit services, issuance of certificates of deposit… The first two commercial banks operating in the world were in Spain, Banca di Baralone (ra) 1401) and Banca di Valencia (born 1409)

Although there is a long history, so far, economists have not reached a consensus on the definition of commercial banks This is due to differences in laws, economic conditions, political institutions, social characteristics and the number of heterogeneous operations… In Vietnam, several definitions of commercial banks are recognized and common uses include:

- According to the Ordinance on "Banks, Credit Cooperatives and Finance Companies", (May 24, 1990), a commercial bank is defined as follows: "A

commercial bank is a monetary organization whose principal activities are and often receive deposits from customers with the responsibility to repay and use that money to lend, perform discount operations and as a means of payment” (Pham Xuan Cuong, 2016)

- According to the Law on Credit Institutions, (December 26, 1997): “A commercial bank is an enterprise performing all banking activities, which is monetary business and banking services with the main content and regularly receive deposits, use this money to extend credit and provide payment services” (Truong Thi Thanh Huyen, 2011)

In our country, the "National Bank of Vietnam" was established in 1951 with

a distinctive feature that is both a monetary management function and a commercial bank (one-tier bank) Decree 53/HDBT, (March 26, 1988) contributed an important step forward by dividing the Vietnamese banking system into two levels: “The State Bank performs the function of state management of money and Commercial banks perform the function of currency trading” This has created a strong development for the banking industry, actively contributing to the renovation and modernization

of the country

1.1.2 The main activities of commercial banks

Commercial banks have 3 basic characteristics, including:

• First of all, commercial banking is a form of business with the aim of making a profit and the final destination is profit Commercial banks carry out two types of activities: currency trading and providing banking services In which, currency business is the mobilization of capital from many different sources and used to provide capital to customers who need to borrow capital Or to put it simply,

it is "borrowing to lend" to make a profit Banking service activities are performed through available operations such as currency, payment, foreign exchange, securities, perform a certain job as committed with the customer within a certain period of time and collect a service fee or commission

• All activities of commercial banks must comply with the provisions of law

In fact, the conditions given when licensing the operation in the market for banks are very strict such as regulations on capital, business plans, etc

• As an attractive business as it is, it also comes with a much higher level of risk than other forms of business Commercial banks have a profound influence on industries and on the whole economy of a country The mobilization of capital from idle money to provide credit to customers wishing to borrow according to the principle of repayment of capital and interest within a specified time This has created risks, risks coming from banks, borrowers, depositors and objective factors

In order to minimize unfortunate risks, control and mitigate losses when commercial banks default, the governments of each country have set their own regulations and laws to ensure a safe environment, creating a safe environment

efficiency for commercial banks in the market economy

1.1.3 Roles and functions of commercial banks

1.1.3.1 The role of commercial banks

The commercial banking system has been expanded in both quantity and quality to meet the needs of customers for capital and banking services The specialization, professionalization and application of modern technology increasingly improve the quality and expand the service towards satisfaction Besides, the banking industry also contributes a great role in the State budget through annual tax payment and social welfare fund The "administration of monetary policies according to the market mechanism under the management of the State" is closely demonstrated, and monetary regulation has also been continuously improved One of the typical successes of commercial banks is to significantly contribute to repelling and controlling hyperinflation, bringing it from 3 digits to less than 10% and keeping it stable in recent years A stable macroeconomic environment is a favorable condition for rapid and sustainable economic growth International cooperation activities between domestic and international banks have made many strides, helping to exploit foreign capital Up to now, the bilateral relationship on banking cooperation between Vietnam and other countries has been constantly expanding, establishing transaction relations with more than 2000 banks and financial institutions of more than 100 countries around the world, creating a

convenient and meets all needs of customers, opening up many economic development opportunities (Frederic S.Mishkin, 2015)

1.1.3.2 Functions of a commercial bank

The importance of commercial banks is reflected in its functions and is likened to the heart of the economy The functions of commercial banks can be studied from many different angles, but include three main functions: credit intermediation, payment intermediation, and money creation function of commercial banks:

- Credit intermediary function: is the most basic function of commercial banks, promoting economic development Commercial banks are the "bridge" between the supply and demand of capital in the economy, transferring idle capital

to places that need capital to fulfill many different purposes In an economy the demand for money, capital in different economic units will have different times As

a result, a temporary surplus and shortage of capital is formed The bank is the intermediary that plays the role of converting debt maturity, changing the maturity period of loans and debts Commercial banks stand out to mobilize capital from individuals and economic units From the mobilized capital, continue to be used by other economic entities that need loans to meet their production, business or consumption capital needs Thus, commercial banks are both borrowers and lenders Today, along with the development of the financial market, customers have appeared, the concept of the role of credit intermediaries has changed and expanded: Banks can act as intermediaries between companies shares) with investors, undertake bond trading, etc Moreover, most of the working capital and fixed capital of enterprises are involved from bank credit Therefore, it contributes

to the circulation and regulation of capital in the entire economy to ensure continuous and smooth business and production processes The credit function of banks is the bridge between savings, accumulation and investment

- Commercial Bank - payment intermediary function: The payment intermediary function occupies an increasingly important position, not only according to the traditional method but also managing payment means In

developed countries most transactions, domestic payments are done through checks and most of it takes place by clearing and commercial banks are the ones doing this One of the factors that helps this function to grow is the extensive application of information technology and scientific and technical advances, especially the internet, which facilitates quick payment convenience, cost reduction, time saving, high accuracy and risk reduction The process of transferring funds from the buyer's account to the seller's account via electronic money transfer is almost a necessity in modern countries with developed industries Not only has it become the main method of transaction between companies and organizations, but it has become more and more deeply rooted in life and is a widely familiar payment tool Thus, the Bank has played a great role, creating optimal savings for society in terms of circulation costs, accelerating capital transfer, creating a safe environment and promoting the circulation of goods

- The function of creating bank money in the two-tier banking system: The two-tier banking system has been established since the 19th century, forming a network that is linked with each other, not operating separately The Central Bank holds the role of management and regulation, while commercial banks specialize in currency trading Thanks to the operation in this system, commercial banks have created bad pens This is a great and important initiative in the history of the bank's development This function is expressed through credit and investment activities Banks receiving deposits from customers are those who have idle money, do not want to invest, and use it for new investments But when investing in banking will also be affected by many factors Economic researchers have built a formula showing this effect, such as the formula of Professor P.F LEHAMAN:

Extended deposit multiplier = 1/(a+b+r)

Extended deposit = 1/(a+b+r) x initial deposit

Thus, the ability to create bank money is simply understood as the ability to turn the initial amount of deposit deposited at a first bank into a large amount of money through payment and credit at the bank more banks to follow Currency pens create capital to promote economic development However, the level of money supply is closely related to the required reserve at the central bank, otherwise it will cause a great disaster, difficult to control

From the above three basic functions, it shows the great role of commercial banks in the economy The development of the commercial banking system helps to speed up the payment process, create convenience and reduce transaction costs, and create a favorable environment for capital formation and movement in the economy Commercial banks are also money generators, they play an important role in implementing monetary policies, and are a tool to participate in macro-regulatory activities under the influence and direction of the Central Bank with State policies

1.1.4 Basic operations of a commercial bank

1.1.4.1 Fundraising activities

As the basic activity, the start for other activities of commercial banks to take place Commercial banks are essentially financial intermediaries, operating not with 100% equity In order to obtain capital for operations and provide capital for the economy, banks are required to mobilize temporarily idle capital through activities such as receiving deposits and borrowing from credit institutions at home and abroad, borrow from the central bank or issue promissory notes, bonds, etc

1.1.4.2 Activities using capital

The mobilization of capital will form associated costs and to compensate for these costs, and at the same time make a profit, commercial banks must implement effective ways of using this capital for the purpose of earning revenue take profit This is the main activity that brings the highest level of income and profit for commercial banks The use of mobilized capital is mainly in the following basic directions such as credit activities, securities investment, investment and purchase

of fixed assets and equipment, treasury activities in which credit activities is the most important because it brings most of the income for the bank

1.1.4.3 Other intermediary activities

Intermediary activities are not the main source of income for commercial banks, but they are very important in expanding the mobilization and use of capital Besides, they also create diversification of activities and services, thereby reducing possible risks and increasing income for the bank Intermediary activities include: payment, asset management for customers, business consulting services and corporate governance, securities issuance, securities trading, information provision, etc Development In the modern direction, these activities are increasingly expanded and used by many customers

The three basic activities of commercial banks are generalized as above They are closely related, closely linked and complementary to each other When studying the characteristics of each activity, it is necessary to compare and understand the effects with other activities Therefore, for bank administrators, it is always necessary to consider all three of these activities and not overlook any of these activities to set out business plans and strategies to get the best results

1.2 Capital raising activities of commercial banks

1.2.1 The concept and role of capital mobilization for commercial banks

Capital is the vital element of business activities as well as the whole economy Capital is the premise for the formation and development of all business activities in the whole society in general and for all types of enterprises in particular

To operate, improve and expand, businesses all have capital needs, in which commercial banks are no exception A bank is a financial intermediary whose main purpose is to make a profit The basic functions of banks are: credit intermediaries, payment intermediaries and money creation functions To operate and perform these functions to reach the profit goal, commercial banks must have a certain amount of capital The importance of capital is not only for the business operations of the bank itself but also for the socio-economic development of each country So the question arises "What is commercial capital?" According to the definition given by

economists as follows: “The capital of a commercial bank is the monetary value created or mobilized by the commercial bank itself, used for investment and lending ,

or carry out their other business activities” (Nguyen Van Tien, 2012)

According to the definition on the capital of commercial banks created from many different sources such as: a part of profit or capital contributed by shareholders every year, capital mobilized from a part of national income temporarily idle, this amount of capital is The owner temporarily has not used it to carry out production, distribution and consumption, so it will be deposited in the bank for different purposes, in which the main purpose is to make a profit from the idle money this idle In other words, they transfer the right to use the capital to the bank and at the same time will receive an income from the transfer of the right to use it Thus, it can be seen that commercial banks have performed the role of centralizing capital in society and redistributing capital to the economy in the form

of money Banking activities speed up the capital turnover process, provide the necessary capital to serve and stimulate all production and business activities to develop Thanks to the capital that banks create and mobilize, investment, maintenance and business development activities of the entire economy in general and in each enterprise and company in particular take place advantage Those same activities will be decisive factors to the formation, existence and development of the bank's business activities

1.2.2 The necessity of raising capital for commercial banks

Commercial banks are also businesses, so the first thing that affects commercial banks is the size, power and ability to expand the scale of the banks The necessity of mobilizing capital for commercial banks from an economic perspective is summarized as follows:

• Capital plays an important role in the formation of commercial banks

Just like any business, in order to form and operate a business, it must have basic elements such as: Technology - labor - capital In which capital is the first and most important factor, it reflects the main capacity to decide the business ability of each enterprise itself Particularly for commercial banks, capital is an indispensable

factor in the bank's business activities It can be said that the first thing to consider when setting up a bank is capital Capital is the basis for commercial banks to organize business activities or in other words, banks cannot perform business operations without capital When learning about the characteristics of banking activities, an important characteristic is that "capital is not only the main means of business but also the main business object of commercial banks" On the other hand, a bank is also an organization that trades in special commodities that take place in the money market (short-term capital market) and the stock market (long-term capital market) Banks that own and mobilize a lot of capital (capital fields) will have many advantages in business One of the first advantages of having a large capital source is the ability to comply with the law, first of all, the law of the central bank, the law of credit institutions as well as the regulations of the state, creating advantages and advantages in currency trading

Thus, it can be said that capital is the first link and the thread throughout the business cycle of commercial banks, is the key stage of the bank Therefore, in addition

to the initial capital required for the establishment, ie sufficient charter capital according

to the law for business registration, the bank must regularly take care of and focus on growth by mobilizing capital throughout the business process its activities

• Capital determines the bank's solvency and competitiveness

Today, the expansion of exchanges and cooperation in the market economy opens up many opportunities but also many challenges, especially the increasing competitiveness In order to survive and increasingly expand the scale of operations,

it is important for businesses and banks to build a great reputation and brand in the market One of the first factors that every customer will pay attention to to evaluate the reputation is that it must be shown first of all in the ability to pay and pay customers when performing activities and services bank service Most of the bank's capital is made up of deposits and borrowings, so whenever customers need to withdraw money, the bank must make payments in accordance with regulations Therefore, we can see that a bank with a small capital scale will not be able to meet the demand for loans in the market, if pursuing to meet the loan demand will have

to use the maximum mobilized capital, project Less reserves will easily lead to insolvency Meanwhile, at a capital market bank, a large amount of capital will not only be enough for large reserves, ready to pay, and still satisfy the borrowing needs

of the economy Surely this will create a higher and higher reputation, win the trust

of borrowers and depositors

If we exclude other factors, we can see that the solvency of the bank is proportional to the capital of the bank in general and with the available capital of the bank in particular That is, when the solvency of the bank increases, the available capital will be larger When having great capital potential, commercial banks can enhance business activities with an ever-expanding scale, enhance their position, demonstrate their ability to conduct effective competitive activities

• Capital determines the size of credit activities and other business activities

of the bank

The capital of commercial banks determines the expansion or contraction of credit volume Usually, small banks have less scope of business activities, investment portfolios, loan volume and less diversity Therefore, affecting the ability of economic organizations to attract capital, and the population that cannot even meet the loan needs of businesses, they will lose customers and not take advantage of business opportunities If it is a large bank with abundant capital, they will surely meet the capital needs and have conditions to expand credit relations with many businesses and credit markets

Large capital also helps the bank to do business with many different types such as joint ventures, financial leasing services, securities trading these business forms are aimed at spreading risks and creating more capital for banks In addition, capital also enhances prestige and increases competitiveness in the market Therefore, capital plays a decisive role in the banking business

1.2.3 Types of capital mobilization by commercial banks

1.2.3.1 mobilizing capital from deposit accounts:

- Demand deposit: This is an indefinite amount of money that customers

(who are individuals and organizations) have the right to withdraw at any time

without prior regulation Because this is a part of money that is only temporarily idle, often for a short time, not determined, not a savings account The purpose of this deposit is as follows:

+ Ensure property safety

+ Make payments in production and business activities of the enterprise + Make payments in personal consumption

This type of deposit limits the costs of organizing payments, preserving money and transporting money Because this form of capital mobilization is unstable, banks often have to reserve a very large amount to be ready to meet customers' requirements at any time, so the interest rate applied by banks is usually low low for this deposit

- Term deposits: In contrast to demand deposits, time deposits are deposits

with a predetermined time The principle when making this deposit is that the depositor can only withdraw the money when the agreed deadline is reached The term is usually: 1 month, 3 months, 6 months, 9 months, 12 months or more than 12 months However, the depositor can still withdraw money before maturity in case of desire without having to wait until maturity However, when withdrawing money in advance, you will not enjoy the old interest rate, but will be charged with the interest rate of no term This is a very stable source of capital, favorable for business plans because the bank knows in advance when customers will withdraw money to proactively source money to pay Therefore, banks often offer higher interest rates with many different terms to meet the deposit needs of customers

- Savings deposit: An amount of money deposited in a bank for the purpose

of saving and ensuring safety and accumulation Savings deposit is a part of money income of individuals who have not yet needed to be used and deposited in credit institutions Depositors will be issued a passbook - a certificate of the amount of money when making a deposit in the bank When the time limit is reached, customers who bring their books to the bank and withdraw money will receive an additional interest on the total amount of savings as prescribed There are two types

of savings deposits: demand savings and time savings

1.2.3.2 Mobilizing capital by issuing certificates of deposit, bonds and other valuable papers:

Commercial banks can issue debt instruments to the market to mobilize capital such as: bank certificates of deposit with large denominations, bonds, promissory notes in which the mobilization of capital is by short debt instruments Repayment is important in asset management besides raising capital, because it can

be used at any time when needed The interest rate paid on this type of short-term debt instrument is usually set by direct agreements between the Bank and the depositor or set at a rate acceptable to the depositor It can be said that the buyers of these certificates of deposit are very sensitive to fluctuations in interest rates in the market Therefore, to be able to master this capital, commercial banks must offer a higher interest rate than the interest rate of other certificates of deposit or may also

be higher than the interest rate of bonds

1.2.3.3 Mobilizing capital by borrowing from the State Bank and other credit institutions:

- Borrowing from the State Bank: Currently, most countries allow

commercial banks and other financial institutions in their country to borrow from the State Bank in urgent cases such as budget deficit or too short of capital However, in order to stabilize the currency value as well as prevent the abuse of commercial banks in borrowing capital, the State Bank usually does not want commercial banks to borrow too much discount rate, high penalty interest rate or offer loan conditions that few commercial banks can accept

- Borrowing from other credit institutions: During their operation, there are

times when commercial banks have to face difficult financial situations such as: shortage of required reserves, inability to pay large sums of money .and to avoid the risk of losing customers, and to ensure the Bank's reputation, the best solution is

to borrow Commercial banks can borrow from many different sources, one of which is borrowing from other credit institutions in the interbank market or the domestic and foreign money markets The borrowing of capital between commercial banks and other credit institutions takes place continuously during the

Bank's business operations, forming a fairly regular liability in the balance sheet

On the other hand, it also ensures that the Bank has good relationships with other credit institutions, can support each other in the process of doing business

1.3 Criteria for evaluating capital mobilization activities at commercial banks

1.3.1 The role of capital mobilization activities for commercial banks

In our country today, credit activities account for 90% of the bank's activities, proving that this is the main activity that determines the success and business efficiency of each commercial bank But in order to carry out credit activities, it is necessary to have capital 80% of capital at Vietnamese commercial banks comes from mobilized capital Thus, raising capital is the most important initial step, from which the next steps can be taken

Good capital mobilization, attracting many customers will always ensure a stable amount of reserve and investment, being ready for all withdrawal needs of customers, will create prestige and confidence in a bank financially sound bank In addition, if banks can mobilize cheap capital, they will generate high profits Commercial banks must have a reasonable strategy to attract capital to continue to create an effective lending strategy

1.3.2 Evaluation of capital mobilization activities at commercial banks

1.3.2.1 Indicators Scale of capital mobilization

Size is an indicator reflecting the amount of capital mobilized by the bank When the scale of capital increases, it will help the bank to develop and expand its scope, increase liquidity and ensure payment for customers whenever there is a need

to borrow and withdraw money, improve capacity and position, build trust

Funds mobilized have different sizes in each period depending on the development and business strategy in each period Normally, banks with large scale will have more advantages when raising capital In particular, in the face of the current situation of more and more new banks, the competition for customer market share between banks is inevitable The competition between banks makes customers have more choices in terms of interest rates, size, reputation or liquidity of each specific bank Accordingly, most banks have similar interest rates, not much

difference Therefore, the decisive factor in the choice of customers depends on the size and reputation of the bank to conduct monetary transactions or deposit savings

in order to ensure the safety and liquidity for customers your credit transactions The scale of capital mobilization must be consistent with the growth rate of the Bank When the growth rate of the bank is high, the scale of capital mobilization must be large, the capital must be abundant, and respond promptly to the needs of the bank capital needs of the economy, the capital needs of customers, especially borrowers for large projects, and must be commensurate with the cost of raising capital, that is, when the cost of raising capital is high, the cost of capital mobilization is high must achieve large scale of capital mobilization

1.3.2.2 Capital structure indicator

The structure of mobilized capital affects the asset structure and average operating cost of the bank From there, it will affect the output cost ie the bank's lending interest rate The capital structure must be consistent with the structure of use, properly and fully meet the requirements of use in order to maximize the credit and investment balance, maximize the profit earned without having to pay interest for the loan excess mobilized capital Through determining the capital structure and the growth of capital, it is possible to identify the strengths and weaknesses of the bank in business activities

The indicator of the proportion of mobilized capital reflects the relationship between each type of mobilized capital and the entire mobilized capital Commercial banks need to have a diversified capital structure while ensuring a reasonable ratio between short-term, medium-term and long-term capital, domestic and foreign currencies When building the proportion of mobilized capital, leaders need to rely on external factors, research the market to catch up with the movement trend, thereby proposing the right adjustment strategies

Accordingly, each capital source has its own strengths and weaknesses in mobilizing and exploiting depending on the characteristics of each customer group The change in capital structure will directly affect the change in capital use structure and the change in profit and safety of the bank This also affects the bank's

credibility with potential customers In particular, the changing trend in mobilized capital structure is directly affected by the bank's adjustment plans, operational strategies and strategies, and fluctuations of external factors Therefore,

sub-in order to balance the capital mobilization structure, banks must always be careful

in market research, have strategies suitable to the specific operating situation and have adjustment policies appropriate and timely in each period

1.3.2.3 Cost of raising capital

The cost of capital mobilization is the total cost of the bank in the process of raising capital The cost of capital mobilization includes 2 parts: interest expense (paying deposit interest) and non-interest expense

In which interest expense is the expense that accounts for the largest proportion of the total cost of capital mobilization, so this is the main expense that the bankers are concerned about The interest rate offered by the bank is based on the market interest rate and business strategy of each bank When banks have excess capital, but the number of customers wishing to deposit capital is still high, the deposit interest rate will decrease On the contrary, when customer demand for loans increases or during economic downturn, the government implements a tight monetary policy, causing a shortage of capital, which will push up deposit interest rates In addition, non-interest expenses contribute to the formation of capital mobilization costs such as: salary costs for employees, costs of advertising and marketing, costs of machinery and locations, costs of technology, infrastructure, etc When evaluating capital performance in terms of cost, a bank must meet the following criteria:

- First: Focus on finding the lowest cost sources to meet lending and investment needs, but still need to ensure the criteria on scale, duration and structure

- Second: Increase profits but minimize risks because of the pressure to increase capital costs and the best way is to minimize operating costs Short-term sources are low-cost but less stable while long-term sources have high costs but

better stability Therefore, based on the strategy of each period and the market situation to propose a reasonable policy and interest rate

1.3.2.4 Ability to meet capital needs

Shows the growth rate of mobilized capital or, in other words, the size of bank capital over the years If a stable growth rate is a factor to help the bank achieve stable development, take the initiative when setting out long-term business strategies The ability to meet capital needs also reflects the bank's competitiveness

in the market If the ability is good, the bank is ready to have enough capital to provide customers, thereby building the image of a strong bank with good economic potential and financial capacity

In terms of quantity, the growth rate of mobilized capital is usually assessed through:

Growth rate of current period's working capital = (total working capital of this period-total working capital of the previous period)/(total working capital of the previous period).100

The growth rate of fixed assets reflects the change in the scale of mobilized capital over time If this ratio is above 100%, the scale of mobilized capital has been expanded This result shows that the bank's operating scale is getting bigger and bigger, and the efficiency of capital mobilization has been improved and enhanced

In addition, the growth rate of capital is also one of the criteria to evaluate the scale of capital mobilization as well as the development scale of a bank The growth rate of mobilized capital not only shows the development of the bank but also shows the ability to expand the mobilized capital scale of the bank over the years From there, it shows how the capital source changes according to the trend and how far the bank's ability to control the mobilized capital is These parameters directly affect the development, reputation and position of each bank This not only affects banks' ability to strengthen and expand their operating markets, but also affects customers' decisions

In the case of stable growth, it will contribute to the bank's initiative in planning long-term development strategies and also make customers feel more

secure and confident when depositing and investing in the bank In addition, the indicator of the growth of mobilized capital at the bank also shows the bank's competitiveness with other competitors as well as the bank's reputation in the field

of operation

1.4 Factors affecting the capital mobilization of commercial banks

1.4.1 Internal factors of commercial banks

1.4.1.1 Banking Technology

In the era of the booming information technology market economy, the banking technology industry has made many great changes Today's banking activities are all applied with new technologies It can be said that banking activities are inseparable from the development of technology, especially information technology Technology brings many opportunities and improvements in business process innovation, product distribution, management quality improvement, operations, development of new products, etc One of the easy advantages The most noticed when performing activities through banking technology is to enhance the ability to mobilize capital, shorten transaction time, ensure accuracy, quick and convenient lookup, etc satisfy and attract many customers, increase income and reputation, improve the bank's position However, it will also bring challenges that banks must overcome

1.4.1.2 The Bank's Reputation

The psychology of anyone when sending money is to choose big, reputable banks that have been confirmed for a long time This is understandable because the fear of safety when entrusting your capital to others, especially in the current volatile economic situation, the risks are always hidden For reputable banks, the risk will be lower and more secure In fact, in recent years, although there are many banks pushing the deposit interest rate up very high, many people still choose traditional, long-standing, reputable banks

Therefore, banks need to build their own image in the hearts of customers Once the image has been positioned, the reputation spreads far, and the reputation is strong, it will have an advantage when raising capital Not only that, it also helps

the bank to have stability, maintain the volume of capital mobilization and save a lot of costs Even when the bank has gained the trust of customers, the interest rate may be lower than that of competitors but still retain customers because safety is considered more important than money interest rate to send

1.4.1.3 Direction and business strategy from time to time

Business strategy at commercial banks will decide and govern all activities of the bank in general, including capital mobilization activities The business strategy

of each period is given to expand or shrink the scale of capital mobilization or change the proportion of mobilized capital, adjust interest rates, etc With each different strategy, the bank will offer different policies, such as strategies to increase savings deposit capital, to be effective, will have to push up savings deposit interest rates If the business strategy is correct, commercial banks will exploit the desired capital, meet the needs and achieve high efficiency

1.4.1.4 Interest rate policy

Deposit interest rate is the concern of all individuals or economic organizations when performing deposit activities After all, everyone who deposits money in a bank wants to earn as much interest as possible Especially in the market economy, the industry with higher profits will always attract more people to invest In order to compete and attract more customers, increase the ability to mobilize capital, and meet their needs, banks must offer reasonable interest rates However, not every high interest rate will make the business more profitable due to the increase in capital because a high interest rate will lead to an increase in costs Thus, the requirement for commercial banks is to offer interest rates that are high enough and more attractive than competitors to attract customers to deposit money in their banks, but also make sure not to increase lending rates because it can reduce overall profit

In addition, the decided interest rate depends on many factors such as: the interest rate level in the market, the optimal interest rate desired by the bank, the State's regulations on lending interest rates, and price, inflation rate, etc Therefore, calculating the interest rate requires a detailed and specific plan and is not simple to

be able to give a reasonable and flexible interest rate

1.4.1.5 Product and customer policy

Today, banks have built their own product policies with a variety of products Diversified capital mobilization products with different maturities and currencies help

to increase mobilized capital structure The bank applies a variety of capital mobilization products as a way to meet all customers' needs and attract more deposits

1.4.1.6 Employee competency level

Today service quality is an important factor to evaluate businesses as well as banks The fierce competition in the era of economic integration, more and more direct and indirect competitors require each bank to perfect and improve in all aspects Professional qualifications of staff and service attitude have a direct influence on customer satisfaction when coming to the bank Unlike competition on interest rates, competition in terms of qualifications, capacity and service attitude is unlimited, so this is an always-expanding factor, a strong point for banks to rise up in competition Highly qualified staff, agile style, precise operation, warm and friendly attitude will cause sympathy for customers to continue to come in the next time

1.4.2 External factors of commercial banks

1.4.2.1 State regulatory policies

Commercial banks need to strictly comply with state regulations economic policies have a direct influence on the guidelines and directions in all activities of the bank, in which it is indispensable to mobilize capital Commercial banks, when formulating their business strategies, need to be based on compliance with the laws and macroeconomic policies of the State Directly influencing policies such as savings policy, interest rate policy

Socio-In addition, the State Bank administers monetary policy, which affects the activities of commercial banks The State Bank closely coordinates with other macroeconomic policies in order to stabilize, promote and develop the money market, and create conditions for commercial banks to have a favorable environment Building a healthy, clear and strict legal environment with open mechanisms to facilitate the development of banks is also an important factor contributing to enhancing the efficiency of capital mobilization and use of banks

1.4.2.2 Economic, political and social environment

This factor affects the entire banking industry in mobilizing capital When the economy, politics and society are stable, people will feel secure when choosing and using savings at banks Economic units are also assured of production, promoting monetary circulation Therefore, the banking services are also developed gradually forming the habit of using the benefits that commercial banks provide among people and businesses At that time, the transactions will be paid mainly through banks, obtaining more capital But if the economy falls into crisis, the high inflation rate of commercial banks is the first place to be affected High inflation led to price slippage, causing people to switch to other forms of investment, and mobilized capital was rapidly reduced

1.4.2.3 Psychology and habits of people

The psychology of people's consumption habits also affects the results of capital mobilization at commercial banks It can be seen simply that in big cities, where the population is densely populated with a number of high-income populations, idle money and a large need for savings, it is inevitable that the amount

of capital to be mobilized is will be higher in rural or mountainous areas, islands If people have the mentality of consuming more than saving, the source of mobilization will decrease The seasonality of spending also affects capital mobilization At the end of the year, it will be more difficult to raise capital because this is the time when people and businesses need a large amount of money to spend

at the end of the year and during Tet, so they will limit sending money

1.4.2.4 Competitor

In recent years, witnessing the emergence of many new domestic commercial banks, the market share of state-owned commercial banks has decreased significantly This is a condition for commercial banks to have strong development and evidence that the birth of many new banks and the banking industry has become

a hot and attractive industry At the same time, however, there is increasing competitive pressure Competitive pressure to maintain and develop capital sources

as well as the size and position of the bank is increasingly fierce Not only with

domestic banks, but also with the appearance of foreign banks participating in the market, competition has doubled This requires each bank to find out for themselves measures to improve capacity, attract and build good relationships with customers through factors such as service quality, interest capacity, variety of products provided to meet all needs,

CHAPTER 2 CURRENT SITUATION OF CAPITAL MOBILIZATION IN VIETNAM

BANK FOR INVESTMENT AND DEVELOPMENT –

CHUONG DUONG BRANCH 2.1 Overview of Bank for Investment and Development of Vietnam - Chuong Duong Branch

2.1.1 History of formation and development

BIDV Chuong Duong is one of the newly established branches of the Joint Stock Commercial Bank for Investment and Development of Vietnam in Hanoi Chuong Duong branch was established, starting from Laos - Vietnam Joint Venture Bank - a joint venture between BIDV and Bank for Foreign Trade of Laos (BCEL) was officially established in 1999 After 14 years of operation LVB has performed well its role as a bridge to disburse the projects of the two governments and finance many key investment projects of Vietnamese enterprises in Laos With an average growth rate of 40%/year, by September 30, 2013, total assets reached nearly 550 million USD, charter capital was 70 million USD, ranking second among banks in Laos; BIDV Chuong Duong is a bank with continuously profitable business operations, developing a wide network of operations with Head Office in Vientiane Capital and 07 branches in key economic areas, including 01 branch branch in Hanoi capital LVB's activities and contributions have actively contributed to promoting the traditional friendship and cooperation relationship, especially between the two countries, and have been recognized and highly appreciated by the leaders of the Party, State and Government of the two countries

In the development strategy of LVB, in order to concentrate resources, strengthen and develop LVB's position in Laos market, the two parent banks have agreed to transfer the operation of LVB branch in Vietnam to BIDV

With the approval of the Governments of the two countries, the Central Bank

of Laos and the State Bank of Vietnam, BIDV - BECL has coordinated with LVB to carry out the necessary procedures to transfer the operation of LVB's branch in Vietnam South to BIDV

On October 1, 2013, in Hanoi, the transfer and reception ceremony of commercial bank branch was officially held between Laos-Vietnam Joint Venture Bank (LVB) and Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) and announced the opening of BIDV Chuong Duong branch (on the basis of receiving conversion from LVB Hanoi branch) BIDV Chuong Duong branch will receive the status quo of assets, liabilities and legal rights and obligations of LVB Hanoi branch in accordance with current laws and instructions

of the State Bank BIDV - Chuong Duong is the 119th level 1 branch directly under BIDV, is the legal representative of BIDV, has a seal, has a summary of assets, and

is dependent on accounting in the system of Joint Stock Commercial Bank for Investment and Development of Vietnam Male

+ Full name in Vietnamese: Joint Stock Commercial Bank for Investment and Development of Vietnam, Chuong Duong Branch

+ Vietnamese abbreviation: Branch of Chuong Duong Investment and Development Commercial Joint Stock Bank

+ Full English name: Joint Stock Commercial Bank for Investment and Development of Vietnam – Chuong Duong Branch

+ English abbreviation: BIDV Chuong Duong

+ Head office address: No 41, Hai Ba Trung, Tran Hung Dao ward, Hoan Kiem district, Hanoi city

+ Phone: 02435737681

+ Fax: 02435737684

Operation registration certificate: No 0100150619-128 issued by the Department of Planning and Investment of Hanoi on September 21, 2013

• Functions and duties of BIDV Bank Chuong Duong Branch

The function of BIDV Bank Chuong Duong branch is to provide banking services and other related business activities which are permitted to be performed with the aim of earning profit Carrying out monetary and direct credit business Perform the tasks assigned by the General Director of the Bank for Investment and Development of Vietnam