SOLUTIONS FOR DEVELOPMENT OF DEPOSIT DEPOSIT ACTIVITIES AT INDUSTRY AND TRADE BANK NGU HANH SON BRANCH

DUY TAN UNIVERSITY INSTITUTE OF INTERNATIONAL TRAINING FACULTY OF ECONOMIC MANAGEMENT VIET MY (PSU) GRADUATE THESIS COURSE SOLUTIONS FOR DEVELOPMENT OF DEPOSIT DEPOSIT ACTIVITIES AT INDUSTRY AND TRADE.

DUY TAN UNIVERSITY INSTITUTE OF INTERNATIONAL TRAINING FACULTY OF ECONOMIC MANAGEMENT - VIET MY (PSU)

-

GRADUATE THESIS COURSE

SOLUTIONS FOR DEVELOPMENT OF DEPOSIT DEPOSIT ACTIVITIES AT INDUSTRY AND TRADE BANK NGU

HANH SON BRANCH

MENTOR: MBA NGUYEN NHU HIEN HOA STUDENT: PHAN VIET HANG

CLASS: K24PSU-QNH

ID NUMBER: 24202409992

Da Nang, 2022

I certify that this Graduation Thesis is the result of my work and the guidance of

Ms Nguyen Nhu Hien Hoa I hereby declare that the data and research results in theThesis are truthful

I understand that this Dissertation may be reproduced and/or communicated forthe sole purpose of detecting plagiarism I understand and undertake that if I violatethe commitment, I will be sanctioned according to current regulations of Duy TanUniversity (DTU)

To complete this thesis, first of all, I would like to express my deep gratitude to

Ms Nguyen Nhu Hien Hoa, who wholeheartedly guided me throughout the writingprocess

I would also like to thank the management and accounting department of JointStock Commercial Bank for Industry and Trade - Ngu Hanh Son branch in Da Nangcity for creating conditions for me to complete this report

Due to limited time and limited understanding, errors will inevitably occurwhen completing this report Therefore, I look forward to comments from theteachers as well as the accounting department of the Joint Stock Commercial Bankfor Industry and Trade - Ngu Hanh Son branch

Da Nang, May …, 2022

Student

Phan Viet Hang

TABLE OF CONTENTS

LIST OF TABLE

1 Urgency of the topic

As the economy is growing, the need for capital is always a top priority Todevelop socio-economic needs a lot of capital, commercial banks, a sanction in thefinancial market, operating in the field of currency business, capital plays a veryimportant role The main activity of commercial banks is lending, so in order to meetthe demand of the market, banks will have to mobilize capital from outside Raisingcapital will help the bank earn more income from loans and collect service fees, itwill help the bank survive and develop The past two years have been a difficult timefor banks, with the Covid-19 epidemic causing workers to quit, many businessesdefaulting, and unable to pay loans The epidemic has affected the global economyand the Vietnamese economy, so banks have to change customer segments and switch

to potential individual customers

After researching on capital mobilization activities at Vietinbank Ngu HanhSon, I feel that deposit mobilization plays an important part in the bank's operations.With the desire to effectively develop deposit mobilization activities of Joint StockCommercial Banks in general and Joint Stock Commercial Bank for Industry andTrade of Vietnam Ngu Hanh Son Branch in particular, I would like to choose thetopic "Solutions to develop mobilization activities" Savings deposit at Vietinbank –Ngu Hanh Son Branch”

- Propose some solutions and recommendations to increase deposit mobilization

at Vietinbank Ngu Hanh Son

3 Research question

- What is savings deposit mobilization at commercial banks? What are thecontents of deposit mobilization activities, what are the factors affecting depositmobilization activities?

- What is the status of savings deposits at Bank for Industry and Trade, NguHanh Son branch?

- What solutions can help the Bank develop savings deposit activities ofindividual customers?

4 Objects and scope of research

- Research object: deposit mobilization activities at commercial banks

- Research scope: deposit mobilization activities of Vietinbank, Ngu Hanh Sonbranch

- Research period: period 2019-2021

5 Research Methods

The thesis uses the methods of description explanation, comparison comparison, analysis - synthesis The thesis also collects more information related tothe research problem from reference books and data from Vietinbank Ngu Hanh Son

1.1.1 The concept of capital source of commercial banks.

“The capital of a commercial bank is the monetary value created or mobilized

by the commercial bank itself and used to lend, invest or perform business services.other” (Don, N D (2007) Commercial banking)

Thereby, we see that capital includes equity capital and borrowed capital Interms of the nature of the capital of CB, it is the idle money in the population andeconomic organizations that are concentrated by the bank to carry out businessactivities: lending, guaranteeing, leasing, etc increase cash flow

1.1.2 Meaning of capital mobilization activities of commercial banks.

1.1.2.1 For economy

Deposit mobilization from individual customers increases savings for theeconomy when idle capital is used efficiently and profitably instead of storing it asunprofitable cash On the other hand, through individual transactions with banks, theGovernment can monitor and regulate the economy more proactively

1.1.2.2 For the bank

In the current retail banking trend, it can be said that deposits from individualcustomers play a very important role in the business activities of CB Deposits fromindividual customers not only meet loan capital needs, contribute to increasingliquidity, but also determine the bank's brand and reputation

1.1.2.3 For customers

Deposit mobilization provides individual customers with a safe place to storetheir assets, temporarily storing capital when idle; At the same time, it also providescustomers with a profitable investment savings channel Moreover, this is a conditionfor customers to access other convenient and fast banking services such as: bankpayment, transfer, loan in a more convenient way Capital mobilization will helpencourage people to use payment services, send money through banks, etc., therebyreducing risks and dangers in storing assets in cash.

1.2 THEORETICAL BASIS ON SAVING DEPOSIT MOBILE ACTIVITIES FOR PERSONAL CUSTOMERS AT COMMERCIAL BANKS.

1.2.1 The concept of savings deposit mobilization.

Personal deposit account is a deposit account with a term or demand balanceopened by an independent individual in the name of the account holder Thus,individual customer's deposit is money deposited by an independent individual into acommercial bank for the purpose of serving non-cash payment, savings and otherpurposes Mobilization of deposits from individual customers of CB is defined as thereceipt of deposits from individual customers in the form of demand deposits, timedeposits, savings deposits, certificates of deposit and other forms of deposit receiptaccording to the principle of full refund of principal and interest to depositors asagreed

1.2.2 Classify

1.2.2.1 Sort by term

- Demand savings deposit: A deposit that can be withdrawn at any time, butpayment instruments cannot be used to pay other people This deposit balance is notlarge, but less volatile, so for this type of deposit, CB often pay higher interest rates

on payment deposits

- Term savings deposit: A deposit with an agreement on the time of deposit andwithdrawal, with a higher interest rate than a demand deposit This type of savings is

quite familiar in Vietnam, Vietnamese CB often mobilize savings with various termsfrom one month to more than one year.

1.2.2.3 Classification by form of interest payment

- Prepaid interest savings: is a form of savings where customers receive interestwhen depositing money

- Savings with interest payment later: is a form of savings where customers onlyreceive interest when the payment term is due

- Savings with periodic interest payment: is a form of savings in whichcustomers receive interest according to the term agreed with the bank

1.2.2.4 Sort by time

Due to the economic situation and the business situation of the people, thedemand for saving deposits in the year is not the same, but it is often cyclical andseasonal: Quarter I, Quarter II, Quarter III, Quarter IV

1.2.2.5 Sort by product

Commercial banks often diversify savings products, create more convenience toattract customers, and help banks increase deposit market share Savings mobilizationproducts of commercial banks are always aimed at clear objects, depending on eachbank, they will have their own products with their own characteristics to createcompetitiveness in the market Savings deposit products at commercial banks are asfollows:

1.2.3 Characteristics of savings deposits mobilized from individual customers

 Most of the capital mobilized from the population is usually deposited withshort term:

Residential capital consists of people's payment deposits, which are consumer

or business funds, usually transferred from one account to another, from one bank toanother, or withdrawn for spending purposes Therefore, this money is very short-lived in the customer's account Most time deposits and personal savings are alsousually deposited with terms of less than 12 months For the purpose of depositingmoney to increase income, individual customers cannot grasp the changes in themacro economy that will affect interest rates, other investment channels and thebank's deposit policies goods like That's why they tend to deposit money with shortterm However, due to the stability, customers who have the need to save money willeither turn around their savings books when they are due or withdraw for savings anddeposit them with a new term Therefore, the capital mobilized from the populationoften has a long actual term

 Capital mobilized from the population is more stable than capital fromeconomic organizations:

Due to the characteristics of individual customers that the number of customers

is very large and each customer deposits a smaller amount than corporate andinstitutional customers, the impact of an individual customer's withdrawal on the total

The source of mobilized capital is much less affected than the withdrawal of deposits

by an institutional or corporate customer In addition, deposits in checking accountsare complex volatile deposits However, residents deposit money into CB usually assavings (term deposit) With this form, the customer will agree with the bank on theterm and interest rate of the deposit In necessary cases, customers can still withdrawmoney before maturity, but most customers can determine their deposit term and onlywithdraw when it is due or continue to deposit it at the bank Therefore, the capitalmobilized from the population is highly stable Based on this feature, CB can useresidential capital for medium and long-term loans, which is an advantage of capitalfrom residents

 High cost of crowdfunding:

Due to the stable characteristics and the purpose of profiting from customers,the cost of mobilizing from residential capital is high The cost of raising residentialcapital includes interest expenses and non-interest expenses Interest expense is theinterest payable on deposits issued by the bank based on the interest rate agreed upon

by the bank and the customer Non-interest expenses are very diverse, includingexpenses paid directly to depositors such as gifts, insurance, salary costs for bankstaff, costs of increasing utilities for depositors such as: : open more branches,transaction offices

 Funds mobilized from the population have a large scale in the total mobilizedcapital of CB, but are dispersed according to the number of customers:

The capital mobilization structure of CB includes mobilizing capital fromfinancial institutions, mobilizing capital from economic organizations and mobilizingcapital from the population Most people do not like taking risks, they want to ensurethe safety of their money source and want that money source to bring certain returns.Depositing money in a bank is considered a satisfactory solution to satisfy this need.Therefore, the capital mobilized from the population of CB has a large scale in the

total mobilized capital However, this source of capital is dispersed according to thenumber of depositing customers because the number of customers is very large.

1.3 INDICATORS FOR ASSESSMENT OF DEPOSIT DEPOSIT ACTIVITIES

AT COMMERCIAL BANKS.

1.3.1 Savings deposit growth rate.

The first issue that is concerned when considering the results of savings depositmobilization of a commercial bank is the capital size, or the size of the amount ofdeposit accounts that the bank has mobilized The size of the deposit account capital

of each bank should be determined based on the correlation with lending activitiesand other asset use activities If a commercial bank mobilizes too much capital andfails to lend in time, it will fall into a state of capital stagnation and risk losses Tosolve that situation, some banks extend loans in a risky way, without strict creditappraisal This can lead to bad debts and the risk of insolvency Besides, theexpansion of capital will generate new costs The larger the scale of mobilizedcapital, the higher the marginal cost will be and affect the bank's income Therefore, areasonable capital size is something that each commercial bank needs to havecarefully calculated

Deposit size is an absolute indicator and if used alone, it does not fully reflect abank's ability to mobilize deposit accounts Based on the scale indicator, manyrelative indicators are determined These indicators show more fully the ability tomobilize deposit accounts of CB If the size of deposit accounts indicates the size ofthe amount of deposit accounts mobilized by the bank, then the growth rate reflectsthe increase (decrease) of capital from the deposit accounts at different times as well

as the increase (decrease) which is much or little

Savings deposit growth rate = (Total savings this year - Total savings last

year)/(Total savings last year)*100%

Growth rate > 0: the size of capital from the bank's deposit account increases.

Growth rate < 0: the size of capital from the deposit account of the bankdecreases

A form of capital mobilization from SAVINGS MONEY is considered good, inaddition to factors such as meeting demand at low cost, it needs to be stable, that is,there is no sudden change in the time of using that capital banking, this is also truefor deposit mobilization activities in particular

This capital must have a stable growth in quantity to satisfy the credit demand

as well as the needs of other activities On the other hand it also needs to have timestability For example, if a bank mobilizes a large source of capital from a residentialdeposit account, meets the credit requirements, but fails to assess or forecast thestability of that capital source, it will affect the operation of the bank banks, creatingunforeseeable risks for the bank On the contrary, if the bank can only mobilizecapital from the deposit account, which is small but stable in time, it will make theinvestment from this source safer, bringing profits to the bank

1.3.2 Proportion of mobilized capital from savings deposits.

The formula for calculating the proportion of savings deposits in the totalmobilized capital each period:

The proportion of capital mobilized from the deposit account on the totalmobilized capital of CB shows how much impact the deposit account has on thebank's business activities This index has a proportional relationship with the ability

of the influence of capital mobilized from residential deposit accounts on theefficiency of capital creation activities of CB

This large proportion shows that the level of capital mobilization from thedeposit account is high, which also means that the change in the amount of the

Proportion of savings = (Difference amount)/(Total savings in previous

year)*100%

deposit account will have a great influence on the total mobilized capital of the bank.

On the contrary, if this ratio is small, it means that the level of capital mobilizationfrom the deposit account is not high, then the change of deposit mobilization sourcedoes not affect the total capital mobilized by the bank

In banking activities, the mobilized capital must be large enough to be used incredit activities and in other activities of the bank With a large proportion of capitalmobilized from the deposit account, the bank will be able to reduce the cost of usingother capital sources, which are usually very expensive (eg borrowing in theinterbank market) From that, it can be seen that the proportion of capital mobilizedfrom the deposit account on the total mobilized capital of CB is an indicator of theeffectiveness of the mobilization of residential deposit accounts, because it not onlyshows the results of capital mobilization of CB but also affects the cost of bankmobilization

1.3.3 Cost of deposit savings

The cost of raising capital from residential savings deposits is mainly interestexpenses In addition, there are deposit insurance costs, management costs, costs formarketing and advertising activities to attract customers to deposit, costs ofpurchasing machinery and equipment, etc., and other related costs this fundraisingactivity

Interest expense paid by the bank to the customer is the interest payment costbased on the nominal interest rate, the interest rate announced by the bank to thecustomer This cost depends on many factors such as term, type of deposit, businessstrategy of the bank in each period, attached utilities, etc However, the actual interestrate of capital mobilized from money Residential savings accounts for banks arehigher because in addition to interest payments, banks also have to pay many otherexpenses Therefore, the target of depositing deposit cost/total capital raised from thedeposit account is divided into two other criteria That is:

Average deposit rate = Total interest payable/Total mobilized capital

Interest expense/total capital mobilized from residential savings accounts showshow much money the bank needs to pay to raise a dollar of capital from residentialsavings accounts based on the interest rates announced to customers .

The cost of paying interest/total capital raised from residential savings accountsshows how much the bank needs to spend for a dollar of capital mobilized fromresidential savings deposits preserve…

In summary, the cost of depositing savings accounts/total capital raised from thesavings accounts is used to assess how much a bank's deposit of deposits needs tospend

Thus, when considering the effectiveness of capital mobilization fromresidential savings deposits, it is necessary to pay attention to the cost of a dollar ofcapital to be reasonable, to ensure that the income can cover this cost and make aprofit for bank The lower this indicator, the more effective the capital mobilization.However, it must also be seen that in order to reduce the cost of mobilization, it isnecessary to reduce the deposit interest rate and have the costs of management,preservation and reserve of capital mobilized from savings deposits in the mostoptimal way It is very important to offer a reasonable deposit interest rate, theinterest rate is not too high - to ensure the bank's benefits - to attract depositors Atthe same time, reducing non-interest expenses will also make the effectiveness of thebank's deposit account mobilization activities more effective

1.4 FACTORS AFFECTING DEPOSIT MOBILE ACTIVITIES.

1.4.1 Subjective factors.

- Business strategy of the Bank: Each bank must plan for itself a separatebusiness strategy, suitable to the conditions inside and outside the bank Businessstrategy is decisive to the bank's performance Banks need to determine their currentposition in the system, see their strengths and weaknesses, and see opportunities and

threats On that basis, predict the change of the environment to build an appropriatebusiness strategy in which the strategy to develop the size and quality of capital is animportant part of the overall strategy of the bank In each period, based on assignedtargets on capital mobilization, capital use and other activities of the Central Banktogether with the actual situation of each bank Banks must plan and balance betweencapital mobilization and capital use.

- Efficiency of the Bank's business operations: To invest in any business,investors also need to understand the business performance of the business throughrevenue, cost, profit, etc Especially for depositors in the bank, an effective bank alsocontributes to the reputation of that bank Therefore, the ability to manage businessperformance plays an important role in affecting the efficiency of capitalmobilization of the bank

- Forms of capital mobilization, quality of services provided by the Bank andnetwork of networks: A factor affecting the size and quality of mobilized capital isthe form, term and services related services such as home transactions, automaticwithdrawals, business consulting, collection services, etc There are also some otherfactors such as transaction time and procedures Because the needs of customerswhen coming to the bank are different, satisfying the diverse needs of customers willcontribute to improving the efficiency of capital mobilization activities A bank withmore convenient, flexible and diversified deposit methods and terms will attract newcustomers and retain existing customers than other banks Currently, banks not onlymobilize savings deposits, but also encourage people to deposit money in differentforms such as opening deposit accounts, mobilizing through promissory notes andbonds with a variety of par values and terms term and type

- Interest rate policy: The first thing that any individual or economicorganization wants to refer to when depositing money in a bank is the interest rate.Therefore, interest rate policy is one of the most important policies among supportingpolicies for capital mobilization of banks Banks use the interest rate system as animportant tool in mobilizing and changing the size of capital attracted to banks To

maintain and attract more capital, banks need to set competitive interest rates, offerpreferential interest rates to large customers, and deposit regularly However, notevery bank that offers a high interest rate will attract a lot of idle capital from thepopulation, but the problem is that with the specific interest rate that the bank offers,

it will bring depositors a higher rate of return What is the actual profit? That meansthat the interest rate offered by the bank must always be greater than the inflationrate, so the bank must accurately predict the inflation rate in each period to give areasonable interest rate In addition, when deciding to give a certain interest rate, italso depends on a number of other factors such as the maturity of the deposit, theability to convert between terms, the level of risk and the profit brought from thedeposit other investments, state regulations, regulations of the central bank, outputinterest rates that banks can apply to borrowers The higher the interest rate, the moreattractive it is to depositors, but the high deposit interest rate also means that thelending interest rate must also be correspondingly high for a business bank to beprofitable The interest rate is high enough to attract customers but not too high tostill attract borrowers without reducing the bank's profits Moreover, banks must takeinto account their own capital mobilization costs and their deposit interest ratescompared to other banks

Banking technology innovation, especially the payment stage: Along with therenewal of banking activities, CB are increasingly focusing on the application ofmodern science and technology to banking activities, especially the payment stage

As a result, capital flows quickly and conveniently, ensuring safety for customers indepositing, withdrawing and borrowing If this stage is done well, it will limit thecirculation of cash which is both ineffective and unsafe In addition, if the rate ofnon-cash payment increases, the bank will attract more and more idle money in theeconomy into the banking system and contribute to reducing the cost of printing,preserving, and controlling money count

- Marketing activities of the Bank: This is a very important issue to help thebank understand the requirements and aspirations of customers Since then, the bank

has come up with appropriate forms of capital mobilization, interest rate policies,credit policies, etc At the same time, CB must collect sufficient and timelyinformation to grasp the needs of the market so that they can take measures overcompetitors to gain their advantage.

- Level of seniority and reputation of the Bank: On the basis of actualavailability, each bank has, is and will create its own image in the market A large,reputable bank will have more advantages in banking activities in general and capitalmobilization activities in particular The trust of customers will help the bank tostabilize the mobilized capital volume and save the cost of mobilization, therebyhelping the bank to be more proactive in business A bank with a long history with itsreputation, facilities, staff qualifications will create a good image of the bank,attract the attention of customers, thereby attracting customers to the bank tradingsystem with you

1.4.2 Objective factors

- Economic development cycle: The development status of the economy is amacro factor that has a direct impact on the operation of CB in general and on capitalmobilization in particular In conditions of economic growth and stability, people'sincome is guaranteed and stable, the demand for accumulation of the population ishigher, thereby increasing the amount of deposits in banks or the ability to mobilizecapital capital increased On the other hand, when the economy has high and stablegrowth, the demand for capital increases, banks can expand the credit volume byincreasing the deposit interest rates to stimulate people to deposit money in banks tocreate more money capital to meet the credit needs of the economy On the contrary,when the economy is in a recession, the real income of workers decreases andbecomes more and more volatile, which will reduce customers' confidence in thestability of the currency even more when collecting money If income is low, theamount of idle money in the whole economy will decrease, but the amount of moneydeposited in the banking system is still in danger of being withdrawn At that time,

banks will face difficulties in mobilizing capital, managing reserves andstrengthening customers' confidence in the banking system.

- Legal environment: All business activities, in which the bank's activities aresubject to the regulation of the law The activities of CB are governed by the law oncredit institutions and the system of other legal documents of the state On the otherhand, in Vietnam today, CB are organized in the form of a corporation, so in addition

to having to comply with the laws and regulations issued by the state, the bankbranches in their operations must comply with the laws and regulations must alsocomply with the regulations issued by the Central Bank in each period on interestrates, reserves, loan limits, etc., subject to the constraints of the law, the elements ofcapital mobilization operations change changes in the scale and quality of capitalmobilization activities On the other hand, CB are businesses operating in themonetary sector, which is a field containing huge risks, so banks must strictly complywith the provisions of the law

- Competitive environment: In a market economy, competition is a common andobjective phenomenon The banking industry is one of the highly competitive andincreasingly complex industries In recent years, the financial market has becomemore and more active due to the participation of many types of banks and non-bankfinancial institutions Currently, the number of banks allowed to operate is increasingalong with the birth and strong development of many non-banking organizations,while the idle capital in the population and economic organizations is limited Thereby losing the monopoly of the banking system and affecting the performance ofthe bank

- Saving factor of the population: The bank's capital mobilization activities aremainly formed from the mobilization of idle monetary sources among the population.This is the amount of idle money mainly obtained from people's saving andconsumption in the present to expect to spend more in the future Therefore, thebank's capital mobilization is greatly influenced by this factor If there is no savings,there will be no capital to invest in production and vice versa The savings factor of

the population depends on many factors such as the population's income, spendinghabits in cash and especially the stability of the economy If the economy is unstable,the value of money always fluctuates according to the general tendency of thepopulation to exchange local currencies into strong currencies (Foreign currencies) orstore gold and silver, buy real estate are more stable assets In addition, thedistribution of population in different territories has different psychological, culturaland lifestyle factors Therefore, banks must capture the psychological factors of thepeople from there to offer appropriate forms of capital mobilization.

2.1.1 The process of formation and development.

- Business name: Vietnam Joint Stock Commercial Bank for Industry andTrade, Ngu Hanh Son branch

- Short name: VIETINBANK

- Address: 49 Ngu Hanh Son, Ngu Hanh Son District, Da Nang City

- Website: vietinbank.vn

Joint Stock Commercial Bank for Industry and Trade of Vietnam Ngu Hanh Sonbranch was established according to Decision NHCT/QD 33 dated May 28, 1990:Decision to establish Industry and Trade Bank Region III in Quang Nam - Da Nangprovince After that, the administrative boundaries were divided into Quang Namprovince and Ho Chi Minh City In Da Nang, Incombank was re-established, underthe branch of Informatics Bank in Da Nang city according to the regulation No.14/NHCT dated February 17, 1996 of the General Director of Industry and TradeBank

According to Decision No 133 dated 03/03/1997, Intl Bank Region III wasrenamed to Informatics Bank, Ngu Hanh Son branch - TP Da Nang, headquartered at

49 Ngu Hanh Son Street With more than 20 years of operation, the image ofIncombank Ngu Hanh Son branch has been known by many customers and hasgradually built customer trust Over the years, the bank has made appropriatestructural changes in the direction of local economic development Through its

activities, Incombank Ngu Hanh Son branch has contributed to the production andbusiness capacity of enterprises, creating jobs and encouraging export productionactivities.

With over 20 years of operation, the image of Ngu Hanh Son Industry andTrade Joint Stock Commercial Bank has been known by many customers andgradually built customer trust Over the years, the branch has made appropriaterestructuring steps according to the country's economic development With itsactivities, the Bank for Industry and Trade, Ngu Hanh Son branch has contributed tocreating more production and business capacity, creating more jobs, encouragingimport and export activities

The business process so far has grown strongly in many aspects, the number oftransactions is increasing, the volume of capital mobilization and lending isincreasing, the quality of business activities is increasingly improved and has opened

up many forms of mobilization, lending, diversified banking services to better servethe process of economic development and business activities From the resultsachieved in business activities in 2009, the branch has achieved the title of excellentbranch in the system of Incombank of Vietnam

On October 5, 2011, the Chairman of the Board of Directors of the Bank forIndustry and Trade of Vietnam signed the decision No 1002/QD-HTQT-NHCT 14 onthe monetary reward for branches that achieve high 2011 plan targets Ngu Hanh Sonbranch is one of 7 branches that successfully completed the prize program (thebranch performed well in both VND and USD at the same time)

With accumulated experience and achievements, according to Decision055/QD-HĐQT-NHCT issued on 28/02/2006, Ngu Hanh Son Industrial andCommercial Joint Stock Commercial Bank under Da Nang Commercial Bank wastransformed into Ngu Hanh Son Commercial Joint Stock Commercial Bank HanhSon branch level I of Incombank of Vietnam The upgrade from a level II branch to alevel I branch will create favorable conditions for Incombank - Ngu Hanh Son

Board Manager

Vice President

Transaction Tay Ho Customer service department

Transaction Nam Da Nang

Vice President Vice President

Credit support department

Manager

Transaction O.I.Customeriem Retail roomBusiness customersGeneral roomOrganization and Administration

Branch to grow stronger, better serve the needs of capital and banking services It is

also a very heavy responsibility that requires each officer to constantly strive to

successfully complete the assigned tasks with the new organizational model To step

by step implement the objectives set by the General Bank, contributing to the overall

development of the country

2.1.2 Organizational structure.

Industry and Trade Bank Ngu Hanh Son branch is a direct subsidiary ofVietnam Bank for Industry and Trade, with staff and management including one

director, two deputy directors, and the entire branch is divided into two branches The

rooms are as follows:

(Source: General Department of Vietinbank Ngu Hanh Son)

Figure 2.1: Organizational model of Vietinbank Ngu Hanh Son

Note: Online relationship:

Functional relationship:

+ Deputy Director: on behalf of the Director, directing and operating thebusiness, activities of the departments specializing in currency, treasury, transactionaccounting, individual customers, general, transaction counters, other departments.PGD Take personal responsibility before the Director and the law for the work theysolve, be responsible for operating the branch's operations when authorized by theDirector.

- Departments:

- Corporate Customer Department: Performing the function of capitalmobilization and lending, import-export payment, guarantee for corporate customers.Directly advertise, market, recommend and sell customer service products tobusinesses

- Retail department + Type 2 transaction offices: Performing capitalmobilization and lending functions for individual customers Directly advertise,market, recommend, and sell customer service products to individuals

- Administration Department: Performing the support function for the branch'sbusiness activities such as purchasing equipment and tools, arranging for organizingconferences, meetings, receiving guests, foreign relations, etc manage and protectthe assets of the bank

- General Department: Synthesize reports and statistics, balance businesscapital, develop business strategies, marketing, exploit markets, develop bankingservices and manage cards.

- Customer service department: Specialized in performing operations andtransaction procedures for customers with the bank, undertaking services such asopening/closing accounts, depositing/withdrawing, transferring, counting money,exchanging foreign currencies , support debt recovery, opening / closing bank cards,remittances, printing transaction statements and other banking services

- Credit support department: Performing the function of helping credit officersprepare documents, books

- Transaction offices: Perform accounting for arising transactions, open andmanage accounts for customers

2.1.4 Business results.

2.1.4.1 Fund raising situation

Capital is the initial amount of money that any business owner needs to have inorder to carry out the intention that he or she wants to make Especially in the marketeconomy, the competitive factor is one of the leading and indispensable factors Interms of number of banks, Da Nang can be ranked third after Hanoi and Ho ChiMinh City Thus, the business activities of Da Nang Bank's branch in the comingtime will also face many difficulties In order to enhance its competitiveness, thebank needs a stable source of capital to expand its business scale This is animportant task that the bank will have to perform in the near future Therefore, inorder to be competitive enough, the bank will have to gradually overcome thedifficulties encountered with the motto "mobilizing capital for lending", in the pastthree years, the mobilized capital scale of the branch has reached :

Table 2.1: Capital mobilization situation of Vietinbank Ngu Hanh Son in the

(Source: General Department of Vietinbank Ngu Hanh Son)

Figure 2.1: Capital mobilization situation of Vietinbank Ngu Hanh Son in the

period of 2019-2021.

Deposits from economic organizations are a relatively stable source of capitalfor banks, banks in the area are currently competing fiercely in mobilizing thisdeposit account With its reputation and service quality, in 2019 the branch raised 320billion VND from this deposit, accounting for 23.99% of the total capital mobilized

by the branch In 2020, this source of money has increased by 67.81%, equivalent to

217 billion VND, accounting for 35.42% of the total mobilized capital in 2020,however in 2021, deposits from SAVINGS MONEYs have decreased by 18.25%,equivalent to 98 billion VND, but still accounted for 28.56% of total mobilizedcapital The main reason is that in 2021, Da Nang city has experienced many months

of isolation because of the epidemic and because it is a coastal city, the situation ofnatural disasters, storms and floods also causes many difficulties, making theproduction situation of enterprises decreased significantly, so the amount of moneydeposited in the bank also decreased.

In 2019, residential deposits reached VND 1,014 billion, accounting for 76.01%

of the total capital mobilized by the branch In 2020, it will reduce 35 billion VND,equivalent to 3.45%, only 979 billion VND mobilized from the population It can beseen that in 2020 due to the influence of the epidemic, at the end of 2020, Da Nangcity had to implement a city-wide lockdown, leading to more and more unemployedpeople, so the amount of money mobilized from the population has decreased.forward But through 2021, the situation has improved when increasing by 12.16%compared to 2020 corresponding to 119 billion VND To ensure the maintenance andgrowth of capital in recent years, the branch has proposed specific measures asfollows: timely grasping market interest rates, customer requirements to applymechanisms and policies, appropriate capital mobilization products, focusing onexploiting low-cost capital sources and non-term deposit accounts in the locality

2.1.4.2 Activities using capital

In the current period, the main profit-making activities for banks are stilllending activities In general, the production and business situation of enterprises thathave a relationship with the branch of the Da Nang Insurer Bank has mostly changed

in a positive direction, increasing revenue and profit, so it has a good impact onbusiness activities in general and business activities lending in particular However, asignificant challenge for the development of the branch is that the area has a sloweconomic development and few businesses, so it is very difficult to grow capital andoutstanding loans

Table 2.2: Capital use situation of Vietinbank Ngu Hanh Son in the period of

2019-2021.

Unit: Billion VND.

Year 2019

Yea r 202 0

Yea r 202 1

Difference 2020/2019 Difference 2021/2020

(Source: General Department of Vietinbank Ngu Hanh Son)

Figure 2.2: Capital use situation of Vietinbank Ngu Hanh Son in the period of

2019-2021.

Loan sales in 2020 decreased by 9.4%, equivalent to 635 billion VNDcompared to 2019 Through 2021, this target increased by 18.8%, equivalent to 1,181billion VND compared to 2020 2021, before the impact Due to the negative effects

of the Covid-19 epidemic, Vietinbank has spent more than VND 7,000 billionthrough profit reduction to proactively and effectively deploy many support solutions

in terms of credit, debt structure, loan interest rate reduction, service fees topromptly solve problems for customers Vietinbank has come up with solutionssuitable for each customer and customer group to maintain operations and recoverand develop, such as: Solution package to accompany enterprises to win theepidemic, campaign for financial green zone together Vietinbank, the frontlinefinancial package to fight the epidemic Vietinbank has made a new loan of morethan VND 940 trillion to more than 22 thousand customers facing difficulties due tothe impact of the epidemic; support to lower interest rates with a popular interest ratereduction of 1% - 2%/year for about 25,000 customers with a loan balance that is

exempted from interest rate of more than VND 400 trillion At the same time,VietinBank continues to restructure the repayment period, keeping the debt group asprescribed by the State Bank for about 2,000 customers.

Besides loan sales, debt collection also increased equally Compared to 2019,the difference in 2020 will increase by VND 282 billion, equivalent to 4.7%, in 2021,

an increase of VND 864 billion, equivalent to 13.6% Thereby, it shows that thecollection, management, handling of debt recovery of the bank staff have done verywell This is explained by any bank who wants to recover capital quickly to continueinvesting in other projects and fields

Along with the increasingly improved credit activities, the average loan balancerate also maintained at a difference of 7% per year In which, the difference between

2020 and 2019 is 7%, equivalent to 212 billion VND The difference between 2021and 2020 is 7.1%, equivalent to 229 billion VND Thereby, it shows that the debtcollection and post-borrowing management of the branch have not been done well.The bad debt ratio in the past three hashes has always been approximately 2-3billion VND In 2020, bad debt increased to 1 billion dong due to the impact ofepidemics and natural disasters, so customers could not pay their debts, so bad debtsincreased, but in 2021, it has decreased to 2 billion dong, although it is no more.significant but it is the great efforts of the officials in the collection of overdue debtsduring the time of the epidemic epidemic and economic difficulties Industry andTrade Bank has also introduced many policies to recover debts such as reducinginterest rates and restructuring loan repayment periods for customers, so the bad debtratio has decreased

In the past three years, in the face of major events related to the Covid-19epidemic and constant natural disasters, the branch has always well implementedmeasures to achieve the goal of maintaining and growing credit stably and safely.Effectively thanks to the following measures: Focusing on developing credit forbusinesses, promoting lending to individual customers who have production and

business needs Pay attention to customer care, learn the credit needs of customers ineach period to meet and provide services Regularly control credit quality, limit thearising of group 2 debt and bad debt Monitoring and grasping the situation ofcustomers in relation to other credit institutions, avoiding the situation of transferringhigher debt groups.

2.1.4.3 Business results at the branch

Table 2.3: Business performance of Vietinbank Ngu Hanh Son in the period of 2019-2021.

Figure 2.3: Business performance of Vietinbank Ngu Hanh Son in the period of

2019-2021.

Through the data reflected in Table 3, we can have an overview of businessactivities at Vietinbank Ngu Hanh Son Da Nang branch in the period of 2019-2021 asfollows:

According to the above data table, the growth rate of income at the branch in 2020compared to 2019 increased by 8.41%, equivalent to VND 264 billion, it can be seenthat the branch has made a lot of efforts in promoting lending But in 2021 compared

to 2020 there will be a decrease and an increase of only 4.26%, equivalent to anincrease of 145 billion VND It can be seen that due to the impact of the epidemic,banks have to offer many preferential policies for customers, so income from lendingactivities does not increase much, only 0.78% increase in 2021 compared to 2020.Other activities such as income from payment and treasury activities, etc onlyaccount for a small amount of the branch's total income, but it also contributes toimproving the income of park staff and increasing the branch's profit

Besides the income, the bank also has to pay quite large expenses Interestexpense in 2019 was VND 427 billion, but in 2020 it increased to 19.91%, equivalent

to VND 85 billion, and in 2021 compared to 2020 also increased by 20.7% Because

in 2021 savings deposits from residents increase by 12.6%, the branch has to spend

an expense to pay interest In contrast to interest payment expenses, other expensesdecreased, in 2019 it decreased by 0.75%, equivalent to 3 billion VND In 2021, adecrease of 22.11% compared to 2020 It can be explained that through the distancingorders, the number of employees coming to the bank to work has decreased, thebranch has saved some money for electricity, water, and daily life , teambuilding,…for a long period of time

Affected by the Covid-19 epidemic, the branch's business activities will still beprofitable in 2020 and 2021 Profit before tax in 2019 reached VND 2,310 billion, in

2020 increased by 7.88%, corresponding to an increase of VND 182 billion, in 2021

also increased by 5.1% compared to 2020 corresponding to VND 127 billion Ingeneral, the past three years were difficult, but the branch also fulfilled its profittarget To achieve this is the unremitting efforts and efforts of all staff withenthusiasm and devotion to the profession for the branch's business activities andchanging policies in accordance with the current situation economic status of theVietnam Bank for Industry and Trade.

2.2 THE STATUS OF DEPOSIT DEPOSIT AT INDUSTRY AND TRADE BANK NGU HANH SON BRANCH.

2.2.1 Products to mobilize savings deposits of individual customers at Vietinbank Ngu Hanh Son.

Savings deposit is a product exclusively for Vietnamese individual customersand foreigners living and working in Vietnam In the structure of mobilized capital atVietinbank Ngu Hanh Son, savings accounts account for a large proportion, in order

to attract individual customers to deposit money, the branch has deployed quite avariety of products according to the form, deposit term, different interest paymentterms Particularly for the group of savings products, they have quite similarcharacteristics: they are all forms of savings in installments towards the goal ofaccumulating capital to meet future financial planning needs and withdrawingmoney once upon maturity, enjoy all the benefits of the term product However, eachproduct still has its own characteristics, suitable and attractive to each customergroup These differences are detailed in the following table

Table 2.4: Personal savings deposit products at Vietinbank Ngu Hanh Son

have Individualcustomers - Minimum balance: 100,000VND, 10 USD, 10 EUR

- Interest rate: according to the regulations of the Bank

of Vietnam for each term

VND, USD, EUR

Customers can choose the sending term

according tothe number

of days or

2 Unlimited

savings

Individualcustomers

- Minimum balance: 100,000VND, 10 USD, 10 EUR

- Interest is accrued daily, principal is entered on the last day of the month

VND, USD, EUR

Corroborate

3 Multi-term

savings

Individualcustomers

- Minimum balance:

10,000,000 VND

- Interest payment method:

At the end of the original term or at the time of registration or when the customer pays off before the due date

- Interest calculation method:

Interest is calculated on the basis of actual balance, actual number of deposit days and corresponding interest rate at registered or original terms

VND - Original

term: 9, 12,

18, 24 months

- Deadline for

withdrawal registration

4 Preferentia

l deposit

rate

Individualcustomers

- Minimum balance: 15,000 units of foreign currency

- The preferential exchange rate is based on the amount

of foreign currency the customer sells to the Incombank

- The amount of savings deposit is not lower than the amount of foreign currency converted at the preferential exchange rate

USD, EUR

Customers choose the deposit term

in monthly units, the minimum term is 1 month

e savings

Individualcustomers

- Period of deposit: 1 month/time

- Minimum balance: 100,000VND / 10 USD

- Customer is not allowed to pay at the last period

- Interest payment and interest rate adjustment cycle: 03 months or 12

VND, USD

1, 2, 3, 5,10 years

Savings Individualcustomers - Minimum balance: 1.000.000 VND.

- Interest rate: Online savings customers with a term of 3 months or more will receive an interest margin of 0.15%/year compared to the normal VND deposit interest rate at the counter

- Interest payment method:

pay interest at the end of the period

- Payment before maturity:

to be paid before due date

month

(Source: General Department of Vietinbank Ngu Hanh Son)

2.2.2 Procedures for mobilizing savings deposits.

2.2.2.1 Procedures for depositing and receiving savings deposits, paying and withdrawing savings deposits at the counter:

 Procedures for sending and receiving new savings deposits:

- The Customer/Customer sends the General Depository Account/LegalRepresentative (collectively, the Customer) to the legal transaction point of theVietinBank network (transaction point), providing full deposit records, registersample signature and make deposit receipt according to VietinBank's regulations

- After VietinBank successfully records the deposit transaction, the customerreceives the VietinBank's accounting voucher and savings card

 Procedures for sending and receiving savings deposits into theissued book/card: