The credit risk management of agribank’s bien hoa branch 4

Microsoft Word F69703116 doc 28 Chapter4 Research Results and Analysis Contents of Chapter4 includes (1) To analyze the general information of investigated persons; (2) To analyze the causes of credit risk in banks 4 1 To Analyze the General Information of Investigated Persons Table 4 1 The Size of Credit Deposit Frequency Percent Valid Percent Cumulative Percent Valid Less than 100 billions 13 13 0 13 0 13 0 From 100 to 500 billions 36 36 0 36 0 49 0 Great than 500 billions 51 51 0 51 0 100 0 T.

Chapter4 Research Results and

Analysis

Contents of Chapter4 includes: (1) To analyze the general information of investigated persons; (2) To analyze the causes of credit risk in banks

4.1 To Analyze the General Information of Investigated Persons

Table 4-1 The Size of Credit Deposit

Frequency Percent

Valid Percent

Cumulative Percent

Table 4-2 About Your Working Experience in Bank

Frequency Percent

Valid Percent

Cumulative Percent

Table 4-3 Professional Degree

Frequency Percent

Valid Percent

Cumulative Percent

Comment: the results show that the surveyed bank clerks in credit field who have less 3 years experience but hold university degrees and work with over VND

500 billion credit owe projects

4.2 To Analyze the Causes of Credit Risk in Banks

4.2.1 The reasons causing credit risk (the outside causes)

Table 4-4 The Reasons Causing Credit Risk

N Mean

Std Deviation

4/ The regulator modifies regulation 100 2.31 .748

Average 2.39 .669

As stated before the factor “The change of economic” has the most value at 2.52 It showed that the cause of credit risk from economics fluctuation is so big In

addition, the factor “Irresistibility causes” gained 2.47 to reflect that risks causing from natural disasters in big too, VN yearly suffers from storms and floods so the people lives and their doing business are affected sharply It’s also true for reduced goods consumption, collecting materials, goods shipping, payment, and so on As a result many enterprises can’t pay loans to the banks

Moreover, the factor “The government’s policies” and “The regulator modifies regulation” have the value at 2.51 and 2.31 respectively , to see that Vietnamese laws environment are not stable and synchronous to affect the credit activities of the national banks In certain circumstances, per person understands and implements differently from the other leading to difficult implementation Many relating banking activity documents are sometimes suitable at the limited period of time and real situations The mechanism and management policies are left behind the economic development leading to changing policies frequently, and sometimes contrast to make the economy unsteadily In many examples, enterprises have lost their chances leading to loss and difficulty

The factor “The credit information system” has the least Mean value at 2.16 to expose the supplying information system for the markets and for businesses is limited and not developed properly

4.2.2 The credit risk be caused from customers

Table 4-5 The Credit Risk Be Caused From Customers

N Mean

Std Deviation

8/ The customers intentionally deceive 100 2.28 .7409/ Customers do not perform a credit contract 100 2.27 .76310/ The customers change initial purpose 100 2.40 .69611/ Customer offer the truthful financial

Average 2.38 .706

According to the analyzed data above, the factor “Customer offers the truthful financial reports” reached the highest value Mean at 2.63 to show that the risk rate about the liable financial reports offered by clients is not so serious In additions, the factors “The loan procedure too looses” and “The amount of loan of customer” have the value of mean at 2.3 and 2.42 respectively to say that the financial abilities of enterprises are weak and the earning profits are low, so they must depend on the loans from the bank to operate, the rate of own capital pouring into business projects

is not high As a result, the risk of loss in doing business of enterprises would affect directly to the bank, and the bank will lose the loans if the businesses lost capital or bankruptcy

The factor “The customers intentionally deceive”, “Customers do not perform

a credit contract” and “The customers change initial purpose” also have the high value at 2.28 – 2.27 – 2.4 respectively to review that the risk of credit problems from the customers relating to the above factors are concerned too Many customers have the ideas of cheating, providing false financial information to obtain capital, creating virtual documents, making false contracts, shaking a hand with the sellers to use the loans to deceive the bank or not to implement payment deliberately, and other customers use the loans wrongly and take advantages of withdrawing cash for the fees outside the business strategies registered for the banks before

4.2.3 The credit be caused from the weakness of risk management of bank

Table 4-6 The Credit Risk Be Caused From the Weakness of Risk Management of

Bank (1)

N Mean

Std Deviation

12/ The lack of customer's information 100 2.33 .682

14/ The difficulty in verifying information 100 2.44 .57417/ For evaluating and analyzing risk of

27/ The records declared on IPCAS system 100 2.12 .832

Average 2.25 .754

Base on the surveyed results, the factors of “The lack of customer’s information”, “The lack of information of CIC”, “The difficulty in verifying information”, “For evaluating and analyzing risk of customer” and “The records declared on IPCAS system” have the value of mean at 2.33 - 2.09 - 2.44 - 2.29 - 2.12 respectively to say that the risk rates from these factors are not so serious The lack of customer’s information to examine for loans happened frequently, the information supplied from CIC only reflected about the credit deals, the financial information is out of date and even having none

The information systems of the bank are not strong enough, and there is no information library about economy fields, many businesses related to the systems must rely on their searching information or supplied by their clients In the circumstances, if the clients want to cheat, the bank will face difficulties to check, but the loan tellers usually base on the reports of business results offered by clients And

so that, the lack of information and liable one of the customers is the barrier of loan tellers in their tasks and this is the invisible problem to cause the risk of credit in the credit organizations Besides, IPCAS system is not properly liable that is the factor to urge the banks need to invest the information system strongly

Table 4-7 The Credit Risk Be Caused From the Weakness of Risk Management of

Bank (2)

N Mean

Std

Deviation

20/ The low qualification and uncompleted

31/ The updated relevant credit information 100 2.36 .718

Average 2.32 744

Based on the above table, the factor “The reducing in loan terms” and “The low qualification and completed training” have the value of mean at 2.3 - 2.36 to reflect that the banks In order to attract and maintain customer from the competition

of other credit organization, the banks also make some mistakes when they cut some terms and conditions of loans At the same time, credit tellers’ experience and skills are also limited They truly believed customers objectively when they decided to issues the credit cards while they didn’t have enough clients’ information such as real and prestige finance, rights finance as well as prestigious borrowers, these cause risk

of debtors payment abilities But the agents seldom agree with clients such as “The cheating by staff” has the value at 1.98

Besides the factors “The loan of bank” has the highest value at 2.51, this means that the loan terms of the banks only concentrated on a group of customers, when these customers have difficulties in doing business, bad businesses results, they can’t pay loan on time Loans rate in the banks are strongly increased

In addition, the two factors “The credit information sharing” and “The updated relevant credit information” have the low value at 2.38 - 2.36 Meanwhile, the exchanging information among credit organizations are not good and the competition

as well as the lack of customers’ collateral information, some firms take advantage of borrowing loans from many banks to work on the same projects This causes difficulty for the banks

Table 4-8 The Credit Risk Be Caused From the Weakness of Risk Management of

24/ The lack of collateral information 100 2.20 .79125/ The difficulty of handling of collateral 100 2.56 .608

29/ The lack of re-checking and supervising

Average 2.24 .732

As showing above, two factors “Bank regulations” and “The loan procedure of bank” has the value mean at 2.06 - 2.07 to show that the terms and regulations of the banks are fairly suitable, but there are some problems which the banks need to correct in order to improve the regulations and procedures and limit the worst things The factor "The lack of collateral information", "The difficulty of handling of collateral", "The inspection of collateral" and "The lack of re-checking and supervising" keep Mean value respectively are 2.2 - 2.56 - 2.24 - 2.31, they show the level of lack of inspection and control after loan, if they had happened they were only formal Inspection records did not complete all the content or implementation not in accordance time after loan There were not recommendations to handle of using loans for improper purposes in time Pursuing achievements so the adjustments of the terms of liability, term of deferment, overdue loans are implemented wrongly to show the unreal credit situation Not considering to the quality of guaranteed properties, not finishing the process to offer loans properly, not performing to evaluate the property on time The guaranty properties haven’t been supervised and closely managed, when the banks offer loans, they haven’t evaluated the true value of properties, so that when the banks solved the credit risk problems, some properties are difficult to handle, and liquidation sales get low value

Table 4-9 The Credit Risk Be Caused From the Weakness of Risk Management of

Average 2.33 .734

The results say that” the factor: “The credit staff is overload of working”, “The working tools cannot compatible” and “For archiving the amount of credit target” have rather close value Mean at 2.44 – 2.31 – 2.25 These figures show that the volume of work is overloaded The branch of Agribank in Bien Hoa city is the one in which the credit tellers have the highest owe surplus in the Agribank system From this problem, each credit teller has to perform overload work leading to losing control the total and the customers to whom he/she is in charge for

Besides that, the continuous changes of the human resources among credit tellers in the bank recently, the work pressure on the current credit tellers is very heavy The recruitment new agents is done slowly, while most of the new agents are graduates and have less experiences, so they are not qualified enough to perform their tasks well As a result, the pressure on finishing planned target is heavy too In addition, the supporting tools such as information system doesn’t work well making the credit quality weaker, the credit risk will be high

4.3 Comparisons Analysis

4.3.1 Comparing three groups of causes of credit risk among the size of credit deposit

Table 4-10 ONE – WAY ANOVA – Descriptives of the 3 Group of Causes among

the Size of Credit Deposit

The credit risk be

caused from the

Table 4-11 Test of Homogeneity of Variances – among the Size of Credit Deposit for

Each Group of Causes

Levene Statistic df1 df2 Sig

The credit risk be caused from

The credit risk be caused from

the weakness of risk

management of bank

Table 4-11 shows that the Levene Statistics show that the 3 different the size of credit deposit are not homogeneous for the 3 group of causes They should adopt the Post Hoc statistic test indicated for homogeneity not assumed if the means do have significant differences

Table 4-12 ANOVA

Sum of Squares df SquareMean F Sig The reasons causing

credit risk Between Groups 2.737 2 1.369 5.314 006**

The credit risk be

caused from customers

Between

The credit risk be

caused from the

the weakness of risk management of bank are significant (p < 0.05) According to

SPSS theory, for the group of causes of the reasons causing credit risk, the credit risk

is caused from customers and the credit risk be caused from the weakness of risk management of bank using Games – Howell Post Hoc Test The following are the Post Hoc Test for these groups of causes

1 Games-Howell Post Hoc Test (The reasons causing credit risk)

Table 4-13 ANOVA

The reasons causing credit risk

Note: *p< 05; **p< 01 and ***p < 001

Post Hoc Tests

Table 4-14 Multiple Comparisons

Dependent Variable: The reasons causing credit risk

Games-Howell

(I) Credit deposit (J) Credit deposit Difference (I-J) Std Error Mean Sig

Less than 100 billions From 100 to 500

Table 4-14 indicates that, the Sig (p=0.000) show that there is a statistically

significant difference between Less than 100 billions and From 100 to 500 billions,

and the Sig (p=0.000) also displays that there is significant difference between Less

than 100 billions and Great than 500 billions

2 Games-Howell Post Hoc Test (The credit risk be caused from customers)

Post Hoc Tests

Table 4-16 Multiple Comparisons

Dependent Variable: The credit risk be caused from customers

Games-Howell

(I) Credit deposit (J) Credit deposit

Mean Difference (I-J) Std Error Sig Less than 100

Table 4-16 indicates that, the Sig (p=0.000) show that there is a statistically

significant difference between Less than 100 billions and From 100 to 500 billions,

and the Sig (p=0.005) also displays that there is significant difference between Less

than 100 billions and Great than 500 billions

3 Games-Howell Post Hoc Test (The credit risk be caused from the weakness of risk management of bank)

Post Hoc Tests

Table 4-18 Multiple Comparisons

Dependent Variable: The credit risk be caused from the weakness of risk management

of bank

Games-Howell

(I) Credit deposit (J) Credit deposit

Mean Difference (I-J)

Std

Error Sig Less than 100 billions From 100 to 500

Table 4-18 indicates that, the Sig (p=0.001) show that there is a statistically

significant difference between Less than 100 billions and From 100 to 500 billions,

and the Sig (p=0.001) also displays that there is significant difference between Less

than 100 billions and Great than 500 billions

4.3.2 Comparing three groups of causes of credit risk among working experience in bank

Table 4-19 ONE – WAY ANOVA – Descriptives of the 3 Group of Causes among

Working Experience in Bank

The credit risk be

caused from the

weakness of risk

management of

bank

Less than 3 years

Table 4-20 Test of Homogeneity of Variances – Among Working Experience in Bank

for Each Group of Causes

The credit risk be caused from the

weakness of risk management of bank 6.139 2 97 .003**Note: *p< 05; **p< 01 and ***p < 001

Table 4-20 shows that the Levene Statistics show that the 3 different Working experience in bank are not homogeneous for the 3 group of causes They should adopt the Post Hoc statistic test indicated for homogeneity not assumed if the means

do have significant differences

Table 4-21 ANOVA

Sum of Squares df SquareMean F Sig The reasons causing

credit risk Between Groups 5.236 2 2.618 11.297 000***

The credit risk be

caused from the

the weakness of risk management of bank are significant (p < 0.05) According to

SPSS theory, for the group of causes of the reasons causing credit risk, the credit risk

is caused from customers and the credit risk be caused from the weakness of risk management of bank using Games – Howell Post Hoc Test The following are the Post Hoc Test for these groups of causes