(TIỂU LUẬN) thảo luận nhóm TMU expanding a car loan service for individual customers in thanh cong branch ham nghi transaction office, joi – nt stock commercial bank for foreign trade of vietnam

THUONGMAI UNIVERSITY INSTITUTE OF INTERNATIONAL COOPERATION TUTORED PROJECT Expanding a car loan service for individual customers in Commercial Bank for Foreign Trade of Vietnam Gro

THUONGMAI UNIVERSITY INSTITUTE OF INTERNATIONAL COOPERATION

TUTORED PROJECT

Expanding a car loan service for individual customers in

Commercial Bank for Foreign Trade of Vietnam

Group : 08

Class : CN16 - TNA

Doctor : ĐẶNG Thị Minh Nguyệt

Tutor at transaction office: Director

ACKNOWLEDGMENTS

Internship is the last step that we need to take to graduate and is not an easy process without the guidance and dedicated guidance of teachers at Toulon University and ThuongMai University, as well as the encouragement of family and friends during the internship

First of all, we would like to express our sincere gratitude to Doctor Dang Thi Minh Nguyet - our tutor, who always believes in us, enthusiastically sharing the knowledge and experience in the real process, including knowledge in Finance - Banking

Secondly, we would like to express our sincere gratitude to the Vietnam Joint Stock Commercial Bank for Foreign Trade Thanh Cong branch, Ham Nghi Transaction Office, –especially Ms DAU Thi Thuy Van - Branch Director, for their support and create the best conditions for us during the research and implementation of the topic of the report

Finally, we are really grateful to the colleagues from Vietcombank who gave us the motivation to overcome obstacles in the process of completing the report

TABLE OF CONTENTS

ACKNOWLEDGMENTS A TABLE OF CONTENTS B LIST OF FIGURES AND TABLES D LIST OF TABLES D LIST OF FIGURES D LIST OF ACRONYMS E

INTRODUCTION 1

PART A: GENERAL INFORMATION OF THE VIETCOMBANK AND GROUP PROJECT 3

1 Overview of Vietcombank - Thanh Cong branch, Ham Nghi transaction office 3

1.1 General characteristic of Vietcombank 3

1.2 History and development 3

1.3 Ham Nghi transaction office 4

1.4 The internship positions, responsibilities, and tasks 4

1.4.1 Internship positions and responsibilities 4

1.4.2 Daily task 6

2 Overview of project: 6

2.1 Reason for choosing the topic 6

2.2 Objectives of the project 7

2.3 Project implementation schedule 7

PART B: OVERVIEW OF VIETCOMBANK CAR LOAN SERVICE 10

1 Process of car loan 10

2 Car loan service of Vietcombank Thanh Cong Branch, Ham Nghi transaction office 11

3 Car loan packages 12

4 The reality of car purchasing at the branch 12

5 PEST analysis for Vietcombank - Thanh Cong branch, Hàm Nghi transaction office 13

5.1 Political 13

6 SWOT analysis and recommendations for Vietcombank - Thanh Cong branch, Hàm

Nghi transaction office 14

7 Proposals to improve the car loan product for individual customer for Vietcombank - Thanh Cong branch, Hàm Nghi transaction office 15

PART C: SURVEY OF THE DEMAND FOR USING CAR LOANS FOR PERSONAL CUSTOMERS 16

1 Quantitative survey: 16

2 Analyze the results of survey 16

2.1 Summary of findings 16

2.2 Recommendations and Conclusions 25

3 Business cases 26

3.1 The 1st cases 27

3.2 The 2nd cases 27

PART D: SELF ASSESSMENT OF THE PROJECT 29

CONCLUSION 30

REFERRENCES 31

ANNEX i

LIST OF FIGURES AND TABLES

LIST OF TABLES

Table 1: Daily task 6

Table 2: Project implementation plan 8

Table 3: Process of car loan 10

Table 4: Business results 12

Table 5: SWOT analysis for car loan service 14

LIST OF FIGURES Figure 1: Organizational chart of Thanh Cong , Ham nghi transaction office 4

Figure 2: The structure of the department and our position 5

Figure 3: The chart presents the price range of car 16

Figure 4: The chart illustrates the choice of bank of customers with many original features 18

Figure 5: The chart presents the choice of interest rate 19

Figure 6: The chart presents the loan tenor 20

Figure 7: The chart illustrates the percentage of the loan value on the car value 21

Figure 8: The chart presents the FLEXIBLE EMI PREFERENCE 21

Figure 9: The chart presents the structured EMI preference 22

Figure 10: The chart illustrates the important terms of Services of Auto Loans 23

Figure 11: The chart presents some additional Cross Selling Services 24

LIST OF ACRONYMS

1 Agribank Vietnam Bank for Agriculture and Rural Development

2 Vietinbank Vietnam Joint Stock Commercial Bank for Industry and Trade

3 Vietcombank Vietnam Joint Stock Commercial Bank for Foreign Trade

5 Techcombank Vietnam Technological and Commercial Joint Stock Bank

INTRODUCTION

ThuongMai University and Toulon University facilitated students to take part in banking environment before finish this course with the aim of establish the vocational awareness for students Having the opportunity to get acquainted with the real working environment at the bank, we applied for positions as a salesman - an important part of the bank Fulfilling the duties of a salesman plays an important role in bank development During my internship at Ham Nghi transaction office - Vietcombank Thanh Cong Branch,

we have set for ourselves the following targets:

- Targets 1: Try to apply learnt theories to real work

- Target 2: Understand the operation of the bank, duties of a salesman, how to communicate with customers, how to solve the problems

- Target 3: Try to deal with challenges and keep learning and studying

- Target 4: Build up good relationship with bank's employees and open other relationships

- Target 5: Improving the skills and knowledge ready to become a banker

In time internship, we have accumulated a lot of knowledge from difficulties we have been through

Those experiences will be stated in the following report

Scope and objective of the project

After a process of discussion and information research, we decided to implement the project: <Expanding a car loan service for individual customers at Thanh Cong branch – Ham Nghi transaction office, Vietcombank= The reason we choose this topic is because

we found that this service is interested in by many customers and has great potential development

In order to finish the project of expanding a car loan service for individual customers

at Vietcombank, we need to find out the goals to complete and support the project research

The first goal, we will have to research on general information of banking operations

at Vietcombank Thanh Cong branch, Ham Nghi transaction office, and the objectives of the car loan service project

Furthermore, we will conduct one general survey of car loan service for individual customers After that, we have the result figures of many types of customers, and analyze SWOT to make some conclusions about reviews, ideas and feasible solutions to improve this service

Finally, expanding the number of individual customers to use it at Vietcombank is the most important tasks So, we need to have an insight into the car needs of customers and make market research to help bank attract more customers so as to raise sales and profit

Research method

Secondary research: The more detailed, specific information, the more clearer and

reliable the report is As can be seen, our group has executed the project by collecting data files, information in posts, social networking as a website of the bank as well as analyzing and researching many types of figures, documents at Vietcombank where we were working

as an internship

Primary research: After discussions in group and consultation with a credit

department at the bank and which derived from the model of factors affecting service quality

of Parasuraman (1988), we have decided to perform a survey to gather data to support the project and to determine the significance, strengths, weaknesses and opportunities of the project Therefore, we will be able to make the most proper decisions and a lot of project proposals

The population has different categories like people belonging to different age groups, different income levels each have different perceptions of a loan product depending upon their need So we are using simple random sampling The sample size of 107 was collected by sending online questionaire to car groups in Facebook and potential customers from database of VCB-Ham Nghi transaction office

PART A: GENERAL INFORMATION OF THE VIETCOMBANK AND GROUP

PROJECT

1 Overview of Vietcombank - Thanh Cong branch, Ham Nghi transaction office 1.1 General characteristic of Vietcombank

Name: Joint Stock Commercial Bank for Foreign Trade of Vietnam

Contract name: Vietcombank

Logo:

CEO: Mr PHAM Quang Dung

Address: 01 Thai Ha, Dong Da District, Hanoi

Phone: 024 6257 8686

Sector: Foreign currency trading and derivatives, card services

1.2 History and development

The predecessor organization of Vietcombank is the Foreign Exchange Management Department of the National Bank of Vietnam, established on January 20, 1955 In 1961, this unit was renamed the Foreign Exchange Department under the State Bank of Vietnam

After 58 years of establishment and development (April 1, 1963 - April 1, 2021), Vietcombank has been constantly growing, ready to reach out with the banking system to integrate with the domestic and regional economies regional and international In which, Period 2013-2018: This is the period when Vietcombank has recorded a remarkable transformation and breakthrough

The five-year period from 2013 to 2017 is a time when Vietcombank has made strong and comprehensive transformations in order to realize its number one position in the banking system During this period, Vietcombank had a breakthrough growth both in terms

of total assets and capital and credit mobilization 2018 is the 55th anniversary of Vietcombank9s founding, Vietcombank marked its strong growth by maintaining total

1.3 Ham Nghi transaction office

● Overview of Ham Nghi transacrtion office

- Location: 8 Pham Hung Street, Dich Vong Hau Ward, Cau Giay District, Hanoi

- Employees: 15 staff (2021)

- Founded on: 9/11/2020

- Services:

+ Individual Customers: Deposits Savings, Personal loan, E-Banking –

+ Corporate Customers: Loans & Guarantees, Trade finance, Deposits

- Targets: Complete the targets, Become the excelent transaction office of Vietcombank

- Competitors: Vietcombank, Vietinbank, Techcombank, Sacombank , SHB,&

Figure 1: Organizational chart of Thanh Cong , Ham nghi transaction office

(Source: Vietcombank Ham Nghi Transaction office)–

1.4 The internship positions, responsibilities, and tasks

1.4.1 Internship positions and responsibilities

Our position is clearly stated in the chart:

Head of Ham Nghi Transaction office

Administration

Department

Sale Department

Accounting Department

Figure 2: The structure of the department and our position

(Source: Customer relationship department)

Responsibility: Our duties partly were acting as a consultant about car loan service at

individual customer departments and supporting our tutor to complete his work Individual relationship department includes 2 departments are individual customer team and enterprise customer team Individual customer team has 6 teams and we were in the team number 2 in Ham Nghi transaction official

- We were instructed by the instructor to understand all the loan packages, which assist each client's needs in accordance with financial capacity

- After clearly knowing car loan product, we were able to meet some of my customers who were in need, and we were confident in the way doing some tasks regarding my research topic - car loan service:

+ Seek for customers who want to use the car loan service of the bank

+ Contact customers, based on the needs of customers and the ability to provide financial along with the rules of the bank we will advise clients on the conditions, necessary papers and interest rates

Customer relationship department

Customer relationship individual department

Customer relationship enterprise department

- Helping tutor prepare loaning record

- Finding customers by phone from bank-provided list

- Advising customers at showroom Huyndai

- Assist customers open credit card, debit card, saving account

- Check for record appraisal results, inform customers their loan agree or not

Afternoon

(1.00 pm 5.00 pm ) –

- Meet scheduled customers with tutor

- Helping tutor Check the record of customers

- Helping tutor create the records for agree customers

- Call customers who Not enough loan document

- Assist tutor in input the old data into management system of the bank

- Transfer the loan profile of customers to the appraise debt at main branch

2 Overview of project:

2.1 Reason for choosing the topic

In the past few years, consumer credit has been the growth engine of many banks, including car loans; Credit activities for car loans are very developed because people's travel needs are increasing day by day Vietcombank has launched a car loan service package for individual customers with suitable interest rates since 2015 to bring convenience in transportation, both to meet personal travel needs as well as to business

Attracting potential customer segments will help Vietcombank increase the number

of customers, the number of transactions as well as the efficiency of the bank's credit operations And to realize that goal, Vietcombank has implemented preferential interest rate programs for individuals such as "SUZUKI CAR LOAN WITH 0% INTEREST IN THE FIRST 6 MONTHS of 2020", "Competitive interest rate 2021", Typically, the program

"Interest rates for products for individual customers buying Vinfast cars" is organized to encourage individual customers to support their travel needs

Although there are undeniable advantages, our team realizes that the loan service for individual customers has many limitations that Vietcombank needs to overcome Therefore,

we choose this topic to deepen and analyze this type of service, thereby making recommendations to contribute to improving the quality of this service as well as bringing more satisfaction from customers in the near future

2.2 Objectives of the project

We implemented this project to participate in the activities of Vietcombank Ham Nghi branch From there, we can better understand how the bank operates

Firstly, we work on a project to figure out how the bank issues auto loans and how individual clients can sign up for the service We have a chance to be involved directly in the process of issuing a car loan for individual clients in this project, from approaching them during the survey while they are at the bank, gathering information from them, to the marketing process, and learning about customer satisfaction while using the service

Secondly, we use a questionnaire to survey a group of potential consumers from database of Ham Nghi transaction office and car groups in Facebook As a result, we conduct client interviews in order to obtain information from them, particularly regarding their degree of satisfaction with the service

Thirdly, we synthesize, select, and evaluate data from consumers using a variety of approaches to get a true picture of the state of the vehicle loan service for individual customers

Finally, through the implementation of this project, we have proposed some solutions to improve the quality of this car loan service in the future By using the knowledge gained during the implementation of this project, we hope to be able to come up with effective solutions to optimize the service as well as attract more customers to use it

2.3 Project implementation schedule

Table 2: Project implementation plan

1 Survey the necessity of

using car buying demand

for customers

August 3, 2021 –August 13, 2021

Nguyen Nguyet : 60%

Minh Hieu : 40%

2 Attend instruction on the

process of entering service

registration information for

Customers

August 14, 2021 –August 17, 2021

Anh Duc : 30%

Minh Hieu : 17,5% Hoang Thang : 17,5% Quynh Trang : 17,5% Nguyen Nguyet : 17,5 %

3 Support the branch in

guiding customers to apply

for the integration car loan

service in cooperation with

Hoang Thang : 17,5% Anh Duc : 17,5%

Nguyen Nguyet : 17,5% Quynh Trang : 17,5%

4 Summary of the results

collected through the

Minh Hieu : 17,5% Hoang Thang : 17,5% Nguyen Nguyet : 17,5% Quynh Trang : 17,5%

5 Implement some duty of

car loan service process at

credit Department at Ham

Nghi transaction office

October 6, 2021 Quynh Trang :

60%

Hoang Thang : 40%

6 Survey to assess the car

loan service for

Vietcombank9s customers

October 7, 2019 –October 14, 2021

Hoang Thang : 30%

Nguyen Nguyet : 17,5% Quynh Trang : 17,5% Anh Duc : 17,5%

8 Analysis of car loan for

Mission Time Responsibility Other responsibility

9 Suggestions for new

enhancements of car loan

service for individual at

Nguyen Nguyet : 17,5% Minh Hieu : 17,5% Quynh Trang : 17,5% Anh Duc : 17,5%

10 Prepare summaries and

reports for projects

December 1, 2021 –

January 2, 2022

Nguyen Nguyet

: 30%

Minh Hieu : 17,5% Anh Duc : 17,5%

Hoang Thang : 17,5% Quynh Trang : 17,5%

11 Defend the project in

front of the council

January 17, 2022 Minh Hieu : 25% Hoang Thang : 18,75%

Anh Duc : 18,75% Nguyen Nguyet : 18,75% Quynh Trang :18,75%

* Project implementation cost:

Costs include: internal costs and external costs

Because the project is voluntary, our team has no authority to require the branch to cover external expenditures incurred during the implementation process, such as travel charges, communication fees, food expenses, and document costs To avoid the conflicts between members of the group, these costs are evenly distributed among the group members

PART B: OVERVIEW OF VIETCOMBANK CAR LOAN SERVICE

1 Process of car loan

Table 3: Process of car loan

Method looking for customers

- Making call with the potential customer list from the bank

- Advise customers at car showroom that linked with the bank,

- Referral from friends or old customers

- Clients who have demand and come to the bank themselves

2.Consult

customers

Customer relationship individual department

Providing customer with information:

- Loan condition, interest rate, procedure

- Answer customer9s questions related to the loan package

3.Collect

customer9s

profile

Customer relationship individual department

- Collect customer records according to bank regulations

- Re-check customers9 profile and inform customer to complement if the profile not enough or lack notarized documents

- Transfer the loan profile of customers to the appraise dept

4.Analyze

customer

profile

Appraisal dept No information

(Customer9s profile will be sent to the in charge department to appraise and analyze to determine customer9s repayment capacity)

5 Sign

contract

Customer relationship individual department

- Appraisal department concludes the customer eligible: + The staff prepare loan contracts

+ Getting customer signatures + Manager approve

+ Transfer the contract to the appraise dept to re-checking

- Appraisal department concludes the customer not eligible:

+ inform customers their loan disagree and find solution

6 Approve

loan

Appraisal dept No information

(The staff inform for showroom about loan contract)

7

Disbursement

Economy Dept

Finance-No information

The bank will transfer money to the showroom account

(Source: Regulation of Vietcombank)

2 Car loan service of Vietcombank Thanh Cong Branch, Ham Nghi transaction office

• Target customer: Vietnamese people who are over 18 years old with the monthly income equal to or above 15 million VND and live at most 30km around Hanoi

• The maximum of loan duration is extended to 7 years

• The loan amount is up to 70% the car value, if customer has other collateral such as real estate, the maximum amount is 100%

• In addition, our customer can have a credit card with free annual fee for the first year Customer can use it to buy car insurance, accessories and service

- Loaning conditions

+ Vietnamese individual customer/ households

+ Foreign individuals but permanently living or working in Vietnam

+ Have stable income and guarantee solvency

+ Have collateral property for loans The guaranteed asset is the car Other assets belonging to the customer/ third side (ex: house, savings book or car)

- Document of registration:

+ Application for loans

- ID card/passport and permanent residence / temporary residence book

+ Documents regarding the car: Trading contract, bills, etc

+ Documents proving debt repayment: Labour contract, timesheet, etc

+ Document regarding mortgage asset

3 Car loan packages

Thanks to the variety of preferential interest rates, Vietcombank allows customers

to choose their loan package, preferential package 3 will be suitable for customers who are financially difficult in the beginning and want to borrow money

Monthly interest will be reduced The first option will be preferred due to its fixed interest rates in the long term to take initiative in the financial needs to pay monthly customers The second preferential interest rate package: interest rates 7.8% per annum fixed in the first 12 months This is the most customers' choice because this is the package

of interest suitable for many customers today by the flexibility, fixed time and moderate interest rates

4 The reality of car purchasing at the branch

Table 4: Business results

5893 billion, and to the end of 2020 is 6528 billion, increasing 636 billion equivalent to 10.8% But loan car sevice, this may be unsuccessful year when total car debt reduce 83 billion in 2020

5 PEST analysis for Vietcombank - Thanh Cong branch, Hàm Nghi transaction office 5.1 Political

The Vietnamese government has many policies and has reached many trade agreements like Decree 125/2017/NĐ-CP, ATIGA, EVFTA to promote the domestic auto market According to ATIGA, car from ASEAN countries will be imposed the import tax rate at 0% if they can meet all the requirements And with EVFTA Agreement, Vietnam will gradually remove and eliminate import tax on European cars, reducing each year from

6.8 - 7%, then after 10 years will cut taxes to 0%

5.2 Economics

Vietnam economy has increased rapidly The 2020 is considered as a year of difficulties and challenges for the world economy in general, including Viet Nam The world economy is forecasted to experience the most serious recession in history, the growth

of major economies has declined deeply due to negative effects of the Covid-19 pandemic However, Viet Nam9s economy still maintained growth with GDP growth estimated to increase by 2.91%

Participating in international trade organization such as WTO, APEC, ASEM, has attracted international investment and created competitive environment to motivate the development of domestic enterprises

5.3 Social

The people9s living standard is increasing Boston Consulting Group (BCG) has carried out a research on people9s living standard in 149 countries According to this, Vietnamese people9s living quality is quite comfortable, comparable to countries with GDP

of over 10.000 USD, despite the fact that Vietnamese people9s GDP is only around 5.200 USD/year

In the context of economy integration and development, the higher income per capita

is, the more demands for houses and car increase People not only want to buy modern motor vehicles, they also want to buy luxury ones since their safety and convenience

In the past, customers buying cars mainly were those who have high income or the middle-age who had certain savings However, now, cars manufacturers have diversified their products which are affordable for everyone, besides thanks to assistance from banks

5.4 Technology

Vietnam has produced its own car brand, VinFast With the launch of two models

VF e35 and e36 on November 18 at the Los Angeles auto show 2021, VinFast has officially

"set foot" in the US market This event has made Vietnam a new bright spot on the world auto map

Car manufacturers are launching new models with smarter features such as HUD glass, satellite positioning and online connectivity, and affordable price for every customer

Developing Hybrid technology for fuel saving and emission reducing to protect the environment

6 SWOT analysis and recommendations for Vietcombank - Thanh Cong branch, Hàm Nghi transaction office

After three months of research on car loan product We have summarized the strengths, weaknesses, threats, opportunities to help banks find strategies suitable for developing car loan products

Table 5: SWOT analysis for car loan service Internal STRENGTHS

- Prestigious bank with 74.8% state

- Not much investment in advertising

- Small market share for car loans

- Not have close cooperation with car distributors

External OPPORTUNITIES

- Government9s preferential policies

for car manufacturing

- Car manufacturers have many

models with varied prices, meeting

customers9 demand

- Higher income of people therefore,

the demand is increasing day by day

THREATS

- Have many competitors

- Other competitors have similar products

- Car loan haven9t been paid much attention => smaller market share compared to other competitors who have paid much attention such as international banks, small banks and financial company