SOLVAY BRUSSELS SCHOOL OF ECONOMICS AND MANAGEMENT SOLVAY BRUSSELS SCHOOL OF ECONOMICS AND MANAGEMENT NATIONAL ECONOMICS UNIVERSITY Vietnam – Belgium Master Programmes MASTERS IN BUSINESS MANAGEMENT T[.]
Introduction
Background
As Vietnam transitions from a command economy to a market-oriented economy, companies are increasingly competing to attract more customers by offering superior goods and services Recognizing the importance of "better customer care" as a key growth strategy, Vietnamese businesses are prioritizing customer relationship management (CRM) activities Effective CRM has become essential for companies to sustain their presence and thrive in a highly competitive market, emphasizing the need to build strong, lasting relationships with customers.
In 2010, retail banking experienced a significant surge due to intense competition in providing banking services and rapid advancements in information technology This year is regarded as an "explosion year" for retail banking, marked by intensified efforts to target personal customers and small enterprises.
Vietnam trade banks are actively modernizing by integrating new technologies into their systems to enhance retail banking services Transitioning into the retail market offers them the opportunity to access a larger customer base, unlock significant development potential, and diversify their business risks This strategic shift enables banks to expand their market presence and strengthen long-term growth.
Vietnam’s population is projected to reach 88 million this year, accompanied by rising income levels that boost consumer spending Despite a banking service usage rate of only 15-16% nationally, some major cities report a penetration of up to 32%, significantly lower than Thailand and Malaysia, where retail banking usage ranges from 70-80% Over the next decade, Vietnam’s retail banking sector is expected to grow at a rapid rate of 30-40%, highlighting its potential as a lucrative market for commercial banks seeking expansion opportunities.
Financial experts highlight intense competition among local trade banks striving to capture market share and attract more customers Vietnam’s accession to the WTO has compelled the government to open the banking sector to foreign banks, leading to an increase in foreign institutions with strong financial resources, diversified services, advanced technologies, and efficient management Consequently, local banks are gradually losing their advantages in scale, customer base, and distribution channels, particularly after 2010 when most restrictions on foreign banks were removed.
Many local banks are shifting their strategic focus from traditional advantages to developing retail banking services, recognizing it as a crucial area for growth and competitiveness in the current financial landscape.
Techcombank, established in 1993, aims to become Vietnam’s leading retail bank, serving approximately 600,000 individual customers and 25,000 SMEs with tailored financial products and services The bank’s diverse offerings support customers' needs at various life stages and enhance local and international business activities However, changes in the global economy and industry environment present challenges and threats to the bank’s growth and stability These factors form the core of the “Problem Statement,” highlighting the need to address evolving external and internal industry pressures.
Problems Statement
Techcombank currently offers two main banking services: personal (retail) banking and corporate banking The bank's management aims to position retail banking as a key growth driver, yet the customer base remains small at around 600,000, contributing only 20% to the total revenue Despite their strategic focus on expanding retail banking services, Techcombank faces challenges that hinder its growth potential in this sector.
Retail banking services are under many pressures from external environment forces as well as inside bank
Macroeconomic challenges—including political, economic, social, and technological issues—hinder the development of retail banking Despite Vietnam's advantages as a WTO member, retail banking faces significant obstacles such as outdated technology, inadequate legal procedures, limited service offerings, and a serious shortage of skilled human resources and management capacity Additionally, the global economic turmoil in 2008 further exacerbated difficulties, impacting retail banking services across Vietnam and specifically within Techcombank.
Micro economic forces inside the Retail Banking sector also impact to the bank business.
The bank business structures still cumbersome and inflexible to adapt with the unstable economy environment and operate effectively
The human resource increase in quantity but not much in quality The employees working skill, knowledge, professional are not fully meet the new requirements.
Between 2006 and 2009, the bank's staff increased significantly from 1,584 to 5,028 employees During this period, the proportion of staff holding a bachelor's degree or higher rose modestly from 78% to 82% However, the bank faces a challenge due to the lack of effective policies to attract talented professionals and retain skilled personnel in the competitive banking industry.
Human resource structure is not rational and backward in compare with foreign bank’s standards.
Figure 1: Breakdown of staff graduate
The current risk management and internal audit functions remain ineffective, compromising organizational oversight Additionally, the financial reporting, accounting procedures, and information management systems do not comply with international standards, leading to potential regulatory and operational risks Despite numerous recovery efforts, the irrecoverable debt ratio remains high, indicating ongoing financial challenges that need urgent attention.
To enhance its retail banking sector, Techcombank must review its current business strategies and develop a comprehensive plan aligned with long-term goals Although the bank aimed to become the leading retail bank between 2008 and 2009, it lacked a clear, structured strategy for sustained growth in this sector Given the recent global economic fluctuations and increasing competition, there is an urgent need for Techcombank to formulate a robust retail banking strategy for the 2010–2015 period to ensure future competitiveness and success.
Research Objectives
Below are objectives of the study:
- Identify current missions, objectives, strategies of Techcombank retail banking
- Analyze external & internal environment of Techcombank influence on its Retail Banking service
- Base on the result of above researches, the study will suggest a suitable strategy for Techcombank retail banking service in the period 2010-2015.
Research Questions
Below are the research questions that the study aims at answering
1 What is the current mission, objectives, strategies of Techcombank?
2 What is the status of external & internal environment of Techcombank? Base on the environment analysis, point out what is the strong, weakness, opportunities, threats for the company?
3 What should be the suitable strategy for Techcombank retail banking?
The importance of the research
The rapid growth of the bank has raised concerns that the Board of Management may be overlooking critical strategic issues in their pursuit of accelerated expansion This study aims to highlight potential future risks associated with such aggressive growth strategies Our goal is to support the bank's leadership in adjusting their corporate strategy to ensure a safer and more stable future amid a constantly changing financial environment.
Scope of Limitation
Because of the limitation of time and ability to get updated company’s information, this study just only focus on business activities of Techcombank in duration from
Bank services encompass a wide range of offerings, including personal (retail) banking and corporate banking services In this study, the focus is specifically on retail banking, which pertains to the banking services aimed at individual customers.
Structure of Thesis
This thesis consist of five chapters:
Chapter 1 describes the background, operational definitions, statement of problems, the objectives and scope of the study, research questions, and research framework.
Chapter 2 presents the theoretical model, overview of Bank industry in the world and in Vietnam, the related literature to understand the value chain of banks in Vietnam
Chapter 3 presents research methodology with conceptual framework, sources of data, sampling
Chapter 4 presents data analysis in with main parts are response rate, demographic of firms and value chain management analysis, experts’ opinions summary and secondary data analysis
Chapter 5 recommendations, Chapter 6 conclusions, discussions
Literature Review
Theoretical framework
The concept of strategy has roots in ancient history, initially focused on warfare to win battles, defend land, and expand nations Over time, strategy evolved beyond military contexts to encompass various fields such as economy, politics, and society Today, in the business world, strategic planning is crucial for organizations aiming to achieve competitive advantage and sustainable growth.
II.1.1 Corporate strategy & role of corporate strategy in organization
Corporate strategy involves making broad decisions about the organization’s overall scope and direction, including growth objectives and methods to achieve them Key components include defining growth or directional strategies that set the company’s expansion or retrenchment goals, developing a portfolio strategy to determine the level of diversification or concentration across business lines, and establishing a parenting strategy to allocate resources effectively and decide on the level of integration across different business areas Managers must consider how these elements work together to ensure cohesive growth and competitive advantage.
Roles of corporate strategy in organization
Many entrepreneurs begin their businesses with limited capital but achieve success through effective strategies Conversely, numerous large companies have gone bankrupt quickly due to poor strategic decisions In today's competitive landscape, a well-crafted strategy is increasingly crucial for long-term organizational success.
Corporate strategy serves as the long-term roadmap guiding an organization's overall direction and ensuring alignment across all business activities Without a clear or well-defined corporate strategy, companies risk losing their strategic focus and face difficulties in connecting current challenges with future objectives An unstructured or vague strategic approach can lead to a narrow business perspective, hindering the organization’s ability to see the broader picture and integrate its diverse activities effectively.
- Corporate strategy helps the organization to see and utilize the opportunities as well as prepare to deal with threats in business environment.
- Corporate strategy is the key for organization to best employ the resources, enhance the position of enterprise and sustain development.
- Corporate strategy assists the board of managers to make decisions in accordance with the move of market It will be the basis for RD & D, human resource, product development…
Strategy formulation is an essential component of the strategic management process, which includes three phases: diagnosis, formulation, and implementation Strategic management is an ongoing process focused on developing and revising future-oriented strategies that enable organizations to achieve their objectives by considering internal capabilities, constraints, and the external environment This article specifically emphasizes the diagnosis and formulation phases of strategic management, as summarized in table 3.1.
Table 1: Corporate strategy formulation process
Basic question Where are we? Where do we want to be?
Output Understanding of the organization & its environment, therefore, address the critical issues
Corporate strategy recommendations to ensure success & address the critical issues
Process 1 Identify current mission, objectives and (especially) strategies
2 Analyze data about external & internal environment to evaluate performance and identify SWOT
(5-force model), societal environment (political/legal, technological, economic, socio-cultural) -> identify opportunitie s and threats
* Internal: financial, marketing, production/operations, technology, organizational -> identify strengths and weakness
3 Address critical issues: SWOT analysis
1 Identifying directional strategy (grand strategy) for the company
2 Identifying portfolio strategy for the company.
3 Define new mission,goals for the company
- Reviewing the current key objectives and strategies of the organization.
- Performing analysis of the internal environment of the organization including financial resources, physical resources, human resources, technological resources… to identify major strengths and weaknesses;
Analyzing an organization's external environment involves evaluating macro factors such as political, economic, social, and technological influences to identify key opportunities and threats Additionally, assessing micro factors—including rivalry level, threat of substitutes, buyer power, supplier power, and barriers to entry—provides a comprehensive understanding of competitive dynamics and informs strategic decision-making for sustainable growth.
- Identifying the major critical issues, which are a small set, typically two to five, of major problems, threats, weaknesses, and/or opportunities that require particularly high priority attention by managers.
Reviewing current missions, goal and strategy of bank
Before developing a new corporate strategy, it’s essential to assess whether the company already has an existing strategy in place If a strategy exists, evaluating its strengths and weaknesses is crucial to understand its effectiveness and identify areas for improvement This analysis helps determine whether the current strategy aligns with business goals or if there is a need to formulate a new, more effective strategy.
Conducting a comprehensive external environment scan involves analyzing both societal and industry factors Societal environment analysis examines political, economic, social, and technological influences that impact the firm’s operations and strategic decisions Industry analysis evaluates competitive forces such as rivalry levels, the threat of substitutes, buyer power, supplier power, and barriers to entry, providing insights into market dynamics and potential challenges Together, these analyses enable businesses to develop informed strategies to navigate their external environment effectively.
The societal environment comprises key forces that shape the long-term strategic decisions of organizations, including economic, technological, political-legal, and socio-cultural factors For the online banking sector in Vietnam, these influences encompass the country's economic stability, technological advancements, political regulations, and socio-cultural dynamics, all of which play a crucial role in shaping growth opportunities and challenges within the industry.
Political factors such as government regulations, legal issues, and political stability significantly influence the banking sector’s operations and growth These include online trading procedures, labor laws, environmental regulations, trade restrictions, and tariffs, which establish the formal and informal rules that banks must follow Understanding these factors is crucial for banks to navigate legal compliance and adapt to changing political environments effectively.
Economic factors such as economic growth, interest rates, exchange rates, and inflation rates significantly influence customers' purchasing power and a firm's cost of capital Managers need to consider the economic environment when developing strategic plans For instance, in 2010, as the global economy recovered, Vietnam's banking sector was poised to experience increased turnover and growth opportunities.
Social factors, encompassing demographic and cultural aspects of the external macro environment, significantly influence customer needs and the potential market size Key elements such as health consciousness, population growth rate, age distribution, career attitudes, and safety emphasis shape consumer behavior and preferences These social trends directly impact how management develops strategies and makes decisions Consequently, changes in the social environment can profoundly affect managerial decision-making and overall business success.
Technological factors play a crucial role in lowering entry barriers, reducing minimum efficient service levels, and shaping outsourcing decisions within the internet banking sector Key factors such as R&D activities, security measures, and technology incentives influence how banks adopt and implement new technologies Management must carefully determine the optimal technological level for their organization and strategically introduce new technologies to ensure competitive advantage and operational efficiency.
* Business Analysis: Analyzing Task environment
Porter (1985) emphasizes that corporations should focus on the intensity of competition within their industry, which is shaped by five major competitive forces: the threat of new entrants, industry rivalry, the threat of substitute products or services, the bargaining power of suppliers, and the bargaining power of buyers Understanding these forces is crucial for developing effective competitive strategies and gaining a sustainable advantage in the market.
Rivalry is the intensity of the competitive environment consists of those whom an organization must "compete" in order to obtain resources Hamel,
According to 1993, understanding your competitors is essential for developing effective strategies, as analyzing the competitive environment presents a fundamental challenge for management In traditional economic models, intense rivalry among firms tends to drive profits to zero The level of competition varies across industries, with Internet Banking experiencing specific competitive dynamics influenced by unique industry characteristics, which impact the intensity of rivalry in this sector.
Research Methodology
Research background
Techcombank operates through two key divisions: retail banking and corporate banking In recent years, the bank has undergone organizational restructuring and developed a strategic focus on expanding its retail banking services.
It is foreseeable that bank should concentrate its activities within current section retail banking
With the underlined assumption that the scope of activities of bank is limited in retail banking both external and internal analysis should concentrate on this sector.
Research objective
This research aims to analyze Techcombank's current missions, objectives, and strategies within the retail banking sector It evaluates both the external environment and internal capabilities of Techcombank to identify opportunities and challenges The goal is to determine the most suitable corporate strategy that aligns with the bank's strengths and market conditions, ensuring sustainable growth in the competitive retail banking industry.
Research methods
This research is implemented qualitative method
Qualitative research tends to deal with small samples and uniqueness, combined with open-ended interviews, as well as appropriate for the understanding of the problem than quantifying it.
Data collection
The information of this research will be generated in from the following sources:
The information of this research will be generated in from the following sources:
Primary data was collected through in-depth, unstructured interviews to gather rich and detailed insights These interviews aimed to explore customer needs and expectations regarding services and pricing Additionally, interview data complemented secondary sources like company reports to facilitate an in-depth analysis of the company's internal environment.
Interviews were conducted from June 6 to June 18, 2009, each lasting approximately 60 minutes, to gather in-depth insights As a researcher working at Techcombank, I had convenient access to primary and secondary data from colleagues and various departments within the bank Customer data was collected by interviewing individual personal banking customers in collaboration with a retail banking manager, ensuring comprehensive and relevant information for the study.
Key keywords generated from interviews were transformed into meaningful sentences and reviewed by the interviewees to ensure accuracy The data, collected through written interviews, was systematically analyzed, reconstructed, and categorized to identify core themes Additionally, the information was contextualized through a comprehensive literature review, enhancing the understanding of the findings within existing research This rigorous process ensured reliable and insightful results aligned with SEO best practices.
Secondary data, which includes both raw and published data collected for purposes other than the current research, offers valuable insights for researchers Utilizing secondary data from online newspapers allows access to a vast volume of information that might otherwise be difficult to obtain due to time and budget constraints This resource enhances research efficiency and broadens the scope of data analysis.
This study utilized secondary data obtained from Techcombank reports and various other sources The desk research incorporated literature reviews of relevant books, articles, journals, and magazines aligned with the research objectives Additionally, internet research provided valuable data from online sources such as e-newspapers, reports, and official websites of organizations like the State Bank of Vietnam, HSBC, and the Ministry of Trade of Vietnam These diverse secondary data sources enhanced the comprehensiveness and reliability of the research.
Research analysis
Environment analysis
IV.1.1 The societal environment (PEST Analysis)
The PEST analysis is a valuable tool for examining the macro environment of the banking industry, helping identify key factors that will influence its future development This analysis utilizes secondary data sources to evaluate political, economic, social, and technological factors impacting the industry By understanding these external influences, banking institutions can develop strategic responses to emerging trends and challenges The PEST model provides a comprehensive framework for assessing the broader environment shaping the banking sector’s growth and stability.
Since 1990, Vietnam’s economy has experienced remarkable growth, with an average annual GDP increase of 7.5 percent Despite the Asian financial crisis of 1997-1998 that impacted many Southeast Asian nations, Vietnam maintained its economic momentum In 1999, Vietnam’s growth rate reached 4.5 percent, outperforming neighboring countries like Thailand and Indonesia, which faced economic downturns during that period.
Vietnam’s steady economic growth is driven by its consistent macroeconomic policies, including gradual integration into the global economy, aligning with the country's development situation Over the past 20 years, Vietnam has maintained prudent fiscal management by reducing public debt and inflation, ensuring a balanced budget Additionally, the country effectively controls the money supply, contributing to stable economic growth and macroeconomic stability.
Political stability has been a crucial factor enabling Vietnam to pursue its economic development policies, setting it apart from most regional countries that faced political crises since 1990 Unlike other nations, Vietnam has achieved sustained political stability, which has supported its ongoing renewal and economic growth initiatives This stable political environment has been key to Vietnam's successful implementation of its development strategies and overall progress.
The banking industry is significantly shaped by political influences, including reserve requirements, currency controls, and exchange rate policies A major political factor impacting Vietnam's banking sector is the country’s accession to the World Trade Organization (WTO), which has opened up new opportunities and challenges Additionally, policies implemented by the State Bank of Vietnam play a crucial role in regulating and directing banking industry growth and stability.
Vietnam's accession to the world's largest economic organization has ensured equal treatment with other WTO members, eliminating barriers for Vietnamese businesses when collaborating with international companies This integration opens up significant opportunities for increased international trade, fostering rapid growth in various sectors As a result, the banking industry stands to benefit from the expanding global business environment, creating new avenues for financial services and economic development.
As a member of the WTO, Vietnam enhances its attractiveness for foreign direct and indirect investments, especially in banking and infrastructure development sectors This membership provides the country with opportunities to access advanced technologies and improve its management capabilities, fostering sustainable economic growth.
Membership in the WTO offers significant opportunities for the banking sector in Vietnam, opening up new markets and fostering growth However, it also presents increased challenges in competition, as domestic banks face intensified rivalry not only from local financial institutions but also from foreign banks entering the Vietnamese market As Vietnam liberalizes its banking activities in accordance with WTO commitments, the banking sector must navigate a more competitive landscape to maintain its market position and ensure sustainable development.
The State Bank of Vietnam (SBV) holds primary responsibility for managing monetary policy, credit regulation, settlement processes, foreign exchange, and banking operations, functioning as the central bank and the sole issuer of money However, many SBV policies are inconsistent with international standards, as current banking laws and regulations are often inadequate and discriminatory, creating unfair competition between financial institutions and between domestic and foreign banks This situation hampers the development of an equal competitive environment and poses challenges for aligning with WTO regulations Additionally, opening the financial market introduces increased risks from regional and global financial fluctuations, while the SBV's capacity for monetary control and supervision remains limited For example, the Circular No.13 issued on May 20, 2010, aimed to conform to international regulations but included strict deadlines and unreasonable clauses, such as capping 80% of total deposits for commercial lending, which is considered impractical.
Currently, there are no international regulations restricting the loan-to-capital ratio for banks, as each country allows banks to set their own policies based on strategic priorities Unlike some jurisdictions, the SBV's stringent regulation, which applies uniformly to all commercial banks at all times, is unreasonable and creates significant challenges for lenders Banks can choose to maintain higher or lower loan proportions, including lending up to 100% of deposits in low-profit scenarios, highlighting the importance of flexible, policy-driven approaches over rigid restrictions.
The regulation will significantly reduce credit supply and complicate the operations of commercial banks by restricting liquidity Specifically, banks cannot lend 15% of their total funds raised from non-term deposits by institutions and enterprises, in addition to the 20% of deposits they are limited to This results in a total of 35% of idle funds allocated for risk provisions, which is considered excessive and unnecessary, ultimately hindering efficient financial activity and asset-liability management.
The Capital Adequacy Ratio (CAR) in Vietnam is gradually aligning with international standards, now approaching 9% Since 2008, the State Bank of Vietnam has implemented Basel I regulations, mandating a minimum CAR of 8% The country has planned to adopt Basel II by 2012, which requires a CAR of 12% Currently, many banks worldwide have adopted Basel II standards, and several local banks in Vietnam have already met these optimal requirements, indicating progress toward stronger financial stability.
Raising the Capital Adequacy Ratio (CAR) to 9% poses a significant challenge for large banks, while smaller banks find it relatively easier Under current regulations, small banks are required to increase their charter capital to at least VND3 trillion within this year However, their risky assets cannot immediately match this increase, which naturally helps improve their CAR.
Large state-owned and partly private banks face significant challenges in meeting international accounting standards, as these regulations typically lead to higher bad debt ratios and necessitate increased provisions, making compliance more difficult for these institutions.
After 4 months from the enforcing date, with these insufficient terms and facing many protests were raised again this Circular, the State Bank of Vietnam (SBV) decided to adjust the contents of the Circular No.13 conforming with the international regulation in 27 September 2010 by the Circular No.19
Techcombank internal environment analysis
Established on September 27, 1993, Techcombank is a reputable joint-stock commercial bank with a charter capital of VND107,910 billion as of June 2010 The bank benefits from foreign investment, with HSBC holding a 20% share, highlighting its strong international partnership By the end of 2009, Techcombank operated nearly 230 branches and sales outlets across more than 40 cities and provinces nationwide, demonstrating its extensive network and commitment to accessible banking services throughout Vietnam.
During its development, Techcombank has experienced significant growth in share capital, which has been accompanied by a substantial increase in the number of branches and employees The bank not only demonstrates strong financial performance but also actively expands its market presence and workforce, reinforcing its position as a leading financial institution.
Table 5: Charter Capital of Techcombank
Figure 4: Organizational Chart of Techcombank
Techcombank aims to become the leading retail bank in Vietnam by enhancing its operating structure to deliver more professional customer service The bank has introduced a comprehensive range of innovative and customized financial products and services to better meet the diverse needs of individual customers, reinforcing its commitment to customer-centric banking solutions.
Special attention was given to the diversity and convenience of products and service quality as well as enhanced delivery channels aimed at increasing customer accessibility to these services
As of December 31, 2009, the bank managed over 617,000 personal accounts with a total outstanding balance of VND 2,352 billion Retail banking now accounts for more than 20% of the bank’s total revenue, showcasing its vital role in the bank's growth and its potential for future expansion.
Retail banking activities are being continuously enhanced by establishing specialized centers under the Head Office’s Personal Financial Services Division (PFS), enabling us to better meet customer demands and improve overall service structure.
The bank has expanded its network to 188 branches and sales outlets nationwide, enhancing accessibility for customers across cities and provinces Its upgraded Contact Center at the Head Office now functions as a reliable partner, offering 24/7 support with expert information, consultancy, and prompt responses to customer inquiries With a capacity to serve nearly 50 customers simultaneously, the Contact Center ensures efficient and comprehensive customer service around the clock.
Internet banking at Techcombank reinforces its competitive advantage in Vietnam by offering real web-based services that meet international standards The F@st I-bank package for individuals and F@st E-bank package for corporate clients provide convenient features such as account inquiries, interbank and intra-bank transfers, credit card payments, and regular deposits Customers can also set up automatic payment schedules, schedule future transactions, and perform a wide range of online banking transactions with ease and security.
Techcombank enhances its savings and investment offerings by analyzing customer behavior and financial demands across regions nationwide The bank provides a diverse range of flexible deposit products, including installment savings, interest payments before or at maturity, and regular interest payout options Customers can choose between fixed or flexible interest rate products tailored to their financial needs Additionally, Techcombank offers short-term investment solutions for substantial amounts, helping clients maximize returns on idle funds and develop proactive financial plans aligned with different life stages.
During the 2009 financial market fluctuations, Techcombank closely monitored market trends and customer savings preferences to implement an effective interest rate policy that met customer needs and attracted new depositors The bank launched various savings promotion programs, including Lucky Spring Deposit, Super Lucky Savings, and Win Comfortable Prizes from Secured Deposits, with total prizes valued at around VND10 billion, rewarding many fortunate customers These initiatives helped strengthen Techcombank’s reputation as a secure and reliable bank, allowing us to expand our customer base, improve brand recognition, and maintain a stable funding source for lending and investment activities As a result, the bank gained increasing customer trust and loyalty.
Despite market fluctuations, the bank experienced rapid growth in individual deposits, significantly boosting its liquidity By late 2009, total personal customer deposits reached VND29,779 billion, showing a 110.91% increase compared to 2008, and accounted for 71.99% of the bank’s total mobilized funds, marking one of the highest growth rates among local commercial banks that year Additionally, 95.13% of these deposits were term deposits, with 22.41% in foreign currencies, enabling the bank to utilize funds more proactively.
Figure 5: personal customer deposits (BLN VND)
Figure 6: Breakdown of personal customer deposits
In 2009, Techcombank provided financing support to individuals for various needs, including daily living expenses, consumption, investment projects, and private business activities However, due to challenging market conditions, the bank reduced the growth rate of total outstanding personal loans to adapt to the economic environment.
Figure 7: Retail outstanding loans (BLN VND)
The bank’s strategic products, including home loans and consumer loans, continued to demonstrate strong growth, supported by positive performance across other key offerings Notably, overdraft loans, gold trading loans, stock trading loans, overseas study loans, and valuable paper mortgage loans all delivered excellent results Customers can access unsecured overdraft credit equivalent to up to 10 months’ salary, enhancing flexibility and financial convenience.
Total consumer lending as of late 2009 was VND3,386 billion, an increase of 124.83% against 2008, while home loans remained high at VND3,521 billion.
On average, each home loan amounted to VND500 million.
In 2005, Techcombank was known as the first bank in Vietnam to successfully connect its card system with Vietcombank to form the first card alliance in
In Vietnam, Techcombank made a significant breakthrough last year as the first bank to connect its card system with Smart Link and Banknet, the country's two largest card alliances, enhancing its strategic partnership with HSBC Vietnam This integration allows Techcombank cardholders to access over 7,000 ATMs and 14,000 POS terminals nationwide, including 360 ATMs and 2,000 POS devices owned by the bank, providing extensive nationwide ATM and POS coverage.
In 2008, Techcombank successfully integrated with Visa International, enabling its Visa cardholders to access over one million ATMs and millions of Visa POS terminals worldwide, enhancing global transaction convenience Additionally, Techcombank joined the MasterCard network and is actively preparing to launch Techcombank MasterCard in the near future, further expanding its international payment options for customers.
Figure 8: Number of issued card in 2009
In April 2009, Techcombank separated its card operations from the core business system by establishing the Card Management and Operations Center, enhancing service quality and ensuring readiness for a growing customer base This strategic restructuring improved the efficiency, stability, and responsiveness of our card services, aligning with our goal of fast issuance and flexible customer support As a result, customer convenience in using credit cards significantly increased, earning Techcombank high recognition and appreciation from partners.
SWOT analysis
Table 8: SWOT/TOWS matrix of Techcombank
1 Has a share holder with good financial and management skill 2.Skillful, educated, young staffs
3 Technology is strong and an advantage in compare with local banks
4 Good reputation in banking market
5 Continued to sustain rapid growth despite the financial crisis
1.Organization structure still complex and not suitable with the business.
2 Employees fluctuation make the level of skill of staffs reduce
3 Conflict in business benefit while main shareholder also be the competitor
4 The products haven’t got the advance difference with other banks
5 Rapid growth makes threatens increase in bad debts
6 Branch network still small in compare with state own banks and some trade banks
1 The country joining WTO, have chance to access new technologies and managerial skills.
2 Low threat of entry in banking sector
1 Increase the portion of retail banking in the company’s business portfolio
2 Increase margin rate of retail banking products by developing a strategy in order selection (select the styles with better margin
1 Improve the fluctuation of employees by increasing wage and improving human resource policies, especially for staffs who work in retail banking lines
2 Restructure business structure to support retail banking direction of the bank low rate).
3 Low technology level in compare with international standard
4 High rivalry level in retail banking
5 Power of buyer is high
1 Focus on the stable products and services that bring revenue but aren’t impacted much by polices
2 Improve technology capacity by applying International standards step by step.
3 Reduce the power of retail banking customers by creating the competitive advantage in different, modern and multi-features products and services
1 Reducing the portion of high risk products in the bank business portfolio