TABLE OF CONTENTS INTRODUCTION 1 CHAPTER I INTRODUCTION 4 1 1 Introduction about Vietcombank Hung Yen 4 1 2 Essential business situation at Vietcombank Hung Yen 5 1 3 why choose the subject 11 1 4 Cre[.]
INTRODUCTION
Introduction about Vietcombank Hung Yen
-State commercial bank was the first to be selected Government piloted equitizing, Vietcombank official works as a commercial bank on 02/6/2008 after successfully implemented privatization plan through the issuance of initial public
-After more than half a century of activity on the market, Vietcombank is one of the largest commercial bank in Vietnam with over 14,000 employees, more than 460 branches/offices/representative office/unit and foreign members, including its head office in Hanoi, 96 branches and transaction offices nationwide 368 , 2 subsidiary in Vietnam, 1 representative office and 2 subsidiaries in foreign countries, 5 joint venture, links Besides, Vietcombank is also developing a system with more than 2,300 Autobank ATM and on payment cards acceptance point 69,000 (POS) across the country The banking activities are also supported by more banking 1,856 network agents in 176 countries and territories around the world.
Chart 1.1: administrative set-up of Vietcombank Hung Yen dealing department administration department general co- ordination office accounts department selling retail department
Essential business situation at Vietcombank Hung Yen
As of 2015, the world economy and the region still more instability and complex upheaval, although there are signs of recovery but the pace of growth is slow and not solid Also in this year, the business situation of Hung Yen Vietocmbank achieve more substantial results First came the development of safe effective, towards standards and international practices, maintaining and promoting the role of big state commercial bank The total assets of the branch reached 576 thousand billion, a 14.4% compared to the year 2014, reached 107.7% shareholder General Assembly plan The Branch continued to maintain the growth of stable sources of capital, the balance of resources reach 511 trillion, an increase of 11% compared to the year 2014. Outstanding loans reached 536.5 trillion growth of 14.7% accounted for 93% of total assets (in which the whole industry grows 12%) Outstanding quality compared to the whole industry still maintained at good, bad debt rate is 0.81% of outstanding credit (2014 this rate is 1.35%) a) financing situation
Branch leadership has determined the objective is capital growth at the heart of one of the past time, especially in the year 2016, this was the only goal the decision reviews the emulation and the mechanism of salary, rewards affiliates So right from the beginning of the year the branch leadership had directed, and flexible solutions to increase resources, delivered each month to each target and officers responsible for leadership and leaders of the branch,while regularly monitoring progress made each week , each month to take timely measures The situation of capital mobilization phase 2014-2016 are expressed through the following data tables:
Table 1.1: the situation of capital mobilization of Vietcombank 2014-2016 stage
By term By no term 2600 2171 -16.5% 2352 +8.3%
According to customer type deposits of residents
VND 10230 11186 +9.3% 13041 +16.6% cash foreign currency into VND
Source: Vietcombank General report Hung Yen
As we can see the capital of the branch continually increases every year:
• By the end of 2015, the total capital mobilized reached 12806 billion, up 8% compared to the year 2014, reached 91.5% of the planned headquarters Vietcombank.
Can see in 2016, the amount of capital branch relative increases, especially the capital of foreign currency decreased 3.9% and deposits of economic institutions decreased 2.3% In this year, mobilizing the market interest rates plummeted (5.5%), only one point by some causes such as: first credit context yet strong growth and savings is still more channel choices The demand for investment capital, production and consumption continues to decline; in addition, the State Bank continues to lower the deposit interest rate ceilings; the lack of healthy competition of several credit institutions and psychotherapy, the expectation of the people This led to competition among the banks become more fierce, making branch of Vietcombank Hung Yen also must race to retain customers by offering promotions and incentives to customers.
• By the end of 2016, the total capital reached 14598 billion Capital in
2016 retains the trend increases, the speed increases more rapidly than the year 2015, especially mobilized USD and mobilize the economic organization, two items rose sharply in the year 2015 Cause by this year, with some of the dynamics of the State Bank to stabilize interest rates raised on the market, especially the provisions of 7% interest rate ceiling was issued in October, as well as the strict penalties for exceeding the ceiling of credit institutions to mobilize , making interest rates markedly reduced compared to the mobilization in 2015 However, the branch of one of the country's leadingBank, Vietcombank Hung Yen still raise capital levels this year. b) Loan situation
Table 1.2: the lending situation of Vietcombank Hung Yen 2014-2016 stage
Value Value Up/down Value Up/down
Outstanding loans to the economy
VNĐ 4998 5564 +11,3% 6273 +12,7% foreign currency converted VNĐ
By term Short term loan 4086 3781 -7,5% 4060 +7,4% outstanding loans 1871 2566 +37,1% 2903 +13,1%
Source: Vietcombank General report Hung Yen
Other than the result of raising capital, the credit situation in the past year in the branch have the steady reduction of different, specifically:
• Outstanding to 97.6% achieve rate 6347 reached 31/12/2015 plan
2015, up 390 billion compared with 2014 According to the report of the State Bank, Vietcombank's credit market accounted for 1.14% of the balance owed on the credit system Considering the structure of the residual debt, loan sales increased sharply in all items, such as increased 11.3% to USD debt balance
• In the year 2016, still with the trend in 2015, the outstanding loans to the economy to 31/12/2016 is 6963, reaching 98.2% 2016, up 616 billion (+
9.7%) versus 31/12/2015 Consider the loan structure, outstanding loans decreased in the items: outstanding credit in foreign currencies decreased 11.9%, although the situation remained generally increasing mobilization than the year 2015.
In order to make the direction of the State Bank and the directive from Headquarters, vietcombank in 2016, the branch has restricted lenders to high- risk areas such as business lending, securities trading , boost lending to small and medium businesses have enough financial capacity lending focus, areas of production Made for loans under government programs such as loans to support agricultural lending interest rates, rural development, export loans contributed to the support for business development, at the same time bring efficiency to the business activities of the branch.
Table 1.3: Situation of Vietcombank's credit quality Hung Yen period 2014-2016
Value Value Up/down Value Up/down
Debt recovery has been dealing with risks
Source: Vietcombank General report Hung Yen
Credit quality has improved markedly in the year 2016, although still exist worrying warning in the year 2015 Specifically:
• In the year 2015, the economy still suffered from the crisis It impacts most areas of business make the business fall into a difficult situation last long, forced to shrink production.
• To 2016, the branch leadership has advocated that holds credit and quality enhanced by the attempt of both branches, credit quality has achieved the following results:
The creditors Group 2: as of the time of 31/12/2016 debt reduction Group 2 also decreased, compared with 31/12/2015 million in 1565 is 3740 million This is one of the positive points of the branch because of the current economic conditions, due to large inventories, production of the customers are in serious decline, the hard currency bank debt (origin, interest), causing bad debt tends to rise.
Bad debt: 56780 million decrease 12810 million compared with 31/12/2015 Including debt, the Group 3:0 million, unchanged compared to 2015. c) some other activities
• Trade financing activities: Under the new operating model – is a NH retail, trade financing activity to be moved about the room, but clients have some variation in terms of business process but the activity still achieve high efficiency, contributed to the operations of the branch.
• Development cards & electronic banking services:
• 2014-2016 phase, the work of changing card positively, with the joint efforts and close coordination between the rooms, ban should branch has achieved good results despite the planned delivery of Vietcombank card great.
• The branch has access to a number of customers large ATM card release and promising development in the next years, besides focusing on student subjects, students are customers is relatively stable, has good growth every year ATM card number currently branch are managed as 130,164 cards The balance of deposit ATM card at the time of 31/12/2016 reached 73.3 billion.
• International credit card release branch has developed many new products and services, extending multiple objects using the cards to promote the brand image and Vietcombank Sales payment through international credit card 2016 reached 40.569 billion, achieving 46.3% of customers.
why choose the subject
-Based on the knowledge learned from the school, after a period of internship at the Bank you get out.
Credit operations is always a basic and important activities of commercial banks
So preventing and limiting credit risk is very important for the credit operations of the Bank.
Credit risk divided into two main categories
Short term: credit Is the loan term not exceeding 12 months and be used to offset the shortage of working capital of the enterprise and the short-term spending needs of the individual.
+ Medium term credit: Is the term loans from 12 months to 5 years.Medium-term credit usually is to invest in fixed assets procurement,improvement or renovation of equipment, technology, building small scale projects and quick payback time In agriculture, primarily loans to invest in the construction of objects of industrial orchards.
Competiors
Table 1.4 The situation & lending activity of the banks financing the 2016 Vietnam
Notably, the bad debt rising, especially debt likely to take the capital. The BANK's bad debt as of the time of the day soaring up 14,206 30/6/2015 billion, up 56 percent compared with the beginning of the year, representing 2.74% of residual debt The debt increased 47% below standard and the likely loss of debt to capital increased by 80%.
Prior to that, Mr Tran Bac Ha, Chairman of the BANK also stated that after the merger can increase bad debt but if so be sure to come on 31/12 bad debt Bank will at levels below 3%.
About the quality of debt at Vietinbank, total bad debt increased after 6 months of 6,977, accounting for 1.45% of projected debt, rising 1.1% rate compared to the beginning of the year In that remarkable debt likely to take capital gains 88 percent from 2,084 up 3,923 billion.
Bad debt rate at Vietcombank also increased to 2.48% in that debt likely to increase capital loss 27% compared to the end of 2014.
About HR in the first 6 months of the year, the number of personnel at the BANK increased almost 20%, adding to 3,800 people The personnel of the Bank rose sharply because of the passing of time, BIDV has merged MHBBank Vietcombank rising 2.12% equivalent increase of 299 people and
CASESTUDY ABOUT SHORT-TERM CREDIT RISK AT VIETCOMBANK
Introduction to the client
-Name of business: manufacturing joint stock company trade Binh Minh -Type of organization: joint-stock company
-Category: production business types of bottles, jars, glass tube
-Legal representative: Wu-element/Director of law
legal profile of the Organization
-Business registration certificate No 0103002364 issued by planning and investment in Hanoi granted registration on 16/6/2003 and on 14/01/2008 second change.
-The registry on 18 March 2003 the shareholders
-Certificate of registered seal on 18/06/2003
-The establishment and operation of the business in accordance with the law
-Legal profile of full business, legal, valid
-The representative of the business: have full capacity for civil acts, civil law capacity, operating experience.
Conclusion: the client has the full legal capacity, the capacity for civil acts.
Analysis
-Financial reports two years ago of adjacent 2015.2016
-Table of details of the receivable, are charged by the unit b/ Balance sheet accounts shortened :
I Current assets and short-term investments
- Short term loans in Vietcombank 0 1.439 2.370
- The buyer pays in advance
- Taxes and amounts payable to the government
2 The funds in the equity 822 944 944
-Assets: asset make in total assets of the enterprise, seized from 87% to 95% by 2015, 2016 and January 2017.
-Total assets increased 2016 3,435 million compared with the year 2010 mainly due to the increase in receivables is 827 million and inventory reserves in the repository increases 2,603 million, because the company imports many more new items such as rubber buttons, glass jars, aluminum button types On the other hand due to fluctuating market prices should the company imported a number of items to reserve for production The remainder of the month of 3/2017 of property of the business increased compared to 2016 was 246 million was due to the short term receivables increased This demonstrates the unit capital is taken on as much Therefore, requiring units to take measures to recover the capital to turnaround in business.
-Capital source: 2016 capital increase compared to 2015 is 3,256 million was due to the following causes:
+ 2016 business expansion needs and consumption market, enterprises need a large amount of capital to enter the row so the business loan short term decision for payment of the purchase money from the providers, thereby making the short-term debt of businesses increased to 2,051 million than 2015 simultaneously, the seller must pay the debt increase 1,083 million compared with 2009 Short-term debt as of 16/03/2017 of the business increased to 247 million compared to 2016 is due to the business bank loan to pay for some customer account to buy raw materials, therefore payment due payable decrease 764 million compared to the year 2015.
+ The proportion of equity capital in 2015 as compared to 47%, 2016 and 2017 3 is 30%, which shows the financial situation in the enterprise through the years is stable.
Through which shows: the financial situation of the unit normal, stable through the year.
C/ The results of business activities:
-The target revenue, gross profit, profit before tax, profit after tax of
2016 are increased compared to the year 2015 as part of a business has expanded the market early on, looking for more new customers such as: direct import shipments So the revenue increase and lead to gross profit also increased.
- At three months in 2017 revenue reaching 4,523 million and profit before tax reached 221 million, reaching 20% or out in 2016. d/ Credit relations with credit institutions
Relations with credit institutions the enterprise has no overdue debt atVietcombank and other credit institutions. e/Classified/customer internal credit ratings
The rating business A 2016 f/ Reviews, General
-Reviews: business financial situation is relatively stable, efficient business, have the ability to repay the banks in full and on time.
-Conclusion: full business banking loan conditions.
Secured loan
1/ The secured form: secured by property
2/ The secured property (name, description, characteristics):
- Land in an area of 128 m 2, to be granted land use right certificate, by the people's Committee of Hung Yen city on 09/12/2010 level
- Land in an area of 103 m 2, to be granted land use right certificate. due to the people's Committee of Hung Yen city level 09/12/2010.
3/ The value of the secured property: 3,259,000,000 VND
-Scope of secured loan 2,400,000,000 DD
4/ Record type papers about the property:
-Report on the valuation of secured property signed on 18/01/2016 & 15/4/2016
Mortgage contract of land use signed on 04/5/2016 at the notary's Office Hung Yen mortgage contracts & land use rights property, signed on 25 January 2016 at notary sixth of Hanoi.
-The petition for registration of mortgage of land use signed on 04/5/2016 & 27/01/2016
-Legal: the main property owners of registered mortgage for third parties -Ability to transfer: easy
evaluation business plan
Based on the results of operations in 2016 and the economic contract signed by 2017
Based on the market situation and the ability to consume the products of the company and business plan 2016 the company plans production of business as follows:
2.5.1 The effectiveness of the project loans:
* TOTAL COST:( 31.232.396.000/year) a/ The genus buy raw materials: 27,676,596,000 VND
-Buy glass : 780 tonnes x 14 million VND/ton = 10,920,000,000
-Buy vases glass jars: 3,500,000 x 1,200 VND/vial = 4,200,000,000 -Buy the rubber button: 15 million x 140/PCs = 2,100,000,000
-Buy gas: 45 x 28 million tons of copper per ton = 1,260,000,000 -Buy men in bigger groups: 900 kg x 380,000 VND/kg = 342 million -Buy oxy: 14,000 bottles x 38,000/bottle = 532 million
-Buy carton box: 10,000 13,500 carton/box = 135 million b/salary workers:
55 x 2,667,575 x 12 months = 1,760,600,000 VND c/ Bank interest rates:
Vietcombank : 2,200,000,000 x 20% = 528 million d/ Early Studio rental
25.975.000 VND/month x 12 months = 311,700,000 VND e/ Shipping = 65 million VND f/ Others = 120 million VND g/ Depreciation = 68,500,000 VND
TOTAL REVENUE: VND 32,807,276,000 a/timber revenue 745.62 m3 x 14,254,614/m3 = 10,756,776,000 b/rubber button that 15 million turnover x 160 d/piece = 2,400,000,000 c/glass bottle sales types 3,500,000 vials x 1,450/bottle 5,075,000,000 d/104,450,000 glass pipe sales pipe x 139.545 d/what = 14,575,500,000
The expected profit before tax 32.32.807.276.000 -31,232,396,000 VND = 1,574,880,000 VND
(In words: one billion, five hundred fifty seven million eight hundred eighty thousand investment.)
2.5.2/ Total capital demand and loan schemes
* Working capital ratio = Net Sales/average assets
* Working capital needs/ 1 round = total cost/working capital rotation
-Vietcombank Hung Yen Loan: 2,200 million
+ Petrolimex Gas joint-stock company, Tran Minh co., Ltd, Ltd, TEL and PT Splendor provides liquefied Gas.
+ Corporate America Corporation, specializing in wood material.
+ Company Dongying linuo Glass Ware co., LTD., import and export co., Ltd Jinan munan, Your company JINAN TYK UNITED SCIENCE CO., LTD., provide glass type cỏc type, Your company Gugangxi nanning Haimai., Coltd, Your company JIANGYIN SUNSHINE IMPORT & EXPORT co., LTD, chuyờn provides glass vial rubber button, aluminium, button.
Product consumption: market Your company CP ARMEPHACO, CP company every night every night, Ltd Traphaco MOH Vietnam medical drugs, Pharmaceutical companies, medical supplies
-Status of machinery, equipment and technology: well, we had 4 company cars loading cargo, hydraulic, air blowing line
-Warehouse rental contract of the company signed with the company Hanoi metal body from 18/01/2010-> 31/12/2017 Expiry of 2 sides renewed the contract.
-Status and the ability to consume products, services: primarily sold to patrons of the fuselage
-Level, capacity management: have enough level, capacity management
REVIEWS, suggestions
a/advantages: the company has business activities in many years has a team of trained, skilled craftsmen have many of you Due to the particular item is glass pipes manufacturing health should the market less competitive. b/difficult: company dedicated to import glass that the exchange rates of the Bank there are always adjustments should influence to the business plan of the company. c/The risks can happen: imports about slow compared to plan d/suggestions
-The method of lending: credit limit
-The total amount of loans: 3 billion VND
(In words: Three billion VND)
The purpose of using the loan: Purchase domestic raw materials, import the glass tube type medical, rubber button, button aluminum, wood
-The way the original repayment/interest: each paper accepted the debt, the interest rate paid on the 27th of every month
-Loan interest rates: each acquisition debt
-Secured loan: by the third-party assets
-Disbursement methods: wire transfer or cash
THE SOLUTION FOR THE DEVELOPMENT OF THE
The Bank
First, the building of own credit policies for customers Which need to process loans issued for this client object next to the business loan process in General, along with the specific incentive policy to convey priority undertakings of small and medium enterprises This helps the branch more active in the process of appraising and lending decisions, not dependent on the traditional business loans and high reputation.
Second, investment in research, development and leverages the new products suitable for the small and medium enterprises in the whole system, such as pushing for the medium and long term loans in the form of financial leasing, credit guarantee, the same time interested in developing marketing strategies to promote new products , attract customers, small and medium enterprises and enhance competitiveness on the market.
Third, intensify the exchange of information with the small and medium enterprises to limit the phenomenon of symmetric information between the Bank and the customer Vietcombank Communists should actively organize seminars to exchange information with the small and medium business or networking website aims to provide information for the convenience of the small and medium enterprises on preferential credit policy In addition, promoting the activities of the customer care center for small and medium business object would be a useful communications channel to help resolve the questions of customers and enhance the reputation of the Bank.
Wednesday, its low-cost capital to lend to small and medium enterprises One of the causes of troubled banks in lending to small and medium enterprises is that the cost of higher lending, hidden risks Besides, with complex fluctuations of the economy today, so the lending activities of commercial banks to meet pretty much limited In such conditions, to ensure implementation of the goal wide open for small and medium enterprises, Vietcombank need to enlist low-cost capital to lend to small and medium enterprises, often as government support capital or capital cooperation with international financial institutions to increase lending to small and medium enterprises
Fifth, strengthen inspection, testing, monitoring the operation of the branch in the system The check is done periodically to ensure proper implementation of the regulation branch, true progress had been entrusted.Besides, regular inspection help detect violations promptly, acknowledging the difficulties to branch also disassembly and disposal of storage, the deal was the volatility of the market.
Some recommendations
3.3.1 for the Government and the ministries concerned
First, support to small and medium enterprises to overcome financial difficulties and improve their competitiveness in the current economic conditions, through the establishment of industrial focus for support of small and medium enterprises to easily support State infrastructure , updated information, market development, solving the difficulties on the ground to support the small and medium enterprises Besides, support small and medium enterprises support access loans with reasonable interest rates.
Second, reduce taxes and corporate income taxes, relaxed as the
First, continue the agenda of reducing interest rates in a positive way to reduce the cost of capital for the business One of the things most needed for current business interest is rising as fast as possible This will help the production rise, at the same time create spin fast money in circulation
Second, modernization of the Bank on the basis of continued technological innovation Bank, creating the premise for the commercial banks in mobilization strategies and the use of capital Each step in the internationalization of banking operations, integration with the financial community and international currency, create favorable conditions for banks in credit operations and international payments At the same time, take measures to encourage the commercial banks to increase the ratio of outstanding credit and make the loan program with interest incentives for small and medium enterprises
Third, the State Bank in particular need to improve credit information systems the State Bank is the State governing body of the monetary sector and ensure safety in the operation of the banking system Therefore, the Bank should focus improving the quality and efficiency of activities of the Centre to provide information and prevention of credit risks (CIC) to support the work of the evaluation of the commercial banks, limiting the risk information in the process.
Thursday, review, reviews, to take measures to expand and improve the operational efficiency of the system of credit guarantee Fund for small and medium enterprises of Vietnam Development Bank and credit guarantee funds in the local.
Before the development of the small and medium business association in Vietnam at present, extended loans for the small and medium business association is very active and potential is the trend of the commercial banks. Therefore the development of this ENTERPRISE is for TDNH strategies for general commercial bank and Vietcombank's in particular However in practice the Vietcombank's relationship with the small and medium business association's many inadequacies, when many have yet to find a common voice Therefore, finding out the solution TDNH develops small and medium business association at Vietcombank Hung Yen is a sorely-needed problems
Graduation topics on the subject of "a number of solutions to improve the operation of the credit risk management at vietcombank Hung Yen" has raised some basis of credit operations in General and lending activities to small and medium enterprises in particular, learn and apply on the analysis to clarify the issue of research At the same time the key conclusions was introduced the activity of Hung Yen 2014-2016 stage in Vietcombank, analysis of lending activities to small and medium enterprises in the branch, the strengths and weaknesses of this activity, on the basis of which the proposed solution and a number of recommendations aimed to expand lending to small and medium business association here
However the extension of credit to small and medium business association is a huge problem, need to have the system solutions and the implementation conditions So in this thematic articles, I just look forward to the small contribution in overall lending development solutions to the small and medium business association So the solution is executed and the work