Vietcombank, also known as joint stock commercial bank for foreigntrade of vietnam, is one of the four largest banks in vietnam

Service fees for loan products  Vietcombank:  Loan account service: Free  Change of collateral issued by Vietcombank: Free  Change of collateral as other assets: 200,000 VND/time 

MINISTRY OF EDUCATION & TRAINING

NATIONAL ECONOMICS UNIVERSITY

-

-COMMERCIAL BANKING

Class: Corporate Finance CLC 63A

Teacher: PhD Le Phong Chau

Group 1

Student ID Full name

11210407 Le Huy Anh

11210635 Nguyen Thi Quynh Anh

11217670 Pham Linh Chi

11211292 Vu Tien Dat

11211906 Nguyen Ngan Ha

11212669 Dinh Khanh Huyen

11213181 Le Phuong Linh

11213416 Phung Ngoc Linh

11213884 Nguyen Phuc Minh

11217386 Nguyen Tran Khanh Nha

11214802 Nguyen Ha Phuong

11218696 Dang Viet Thanh

11216283 Hoang Tuan Vu

MAIN CONTENTS

A INTRODUCTION 1

B SERVICES 1

I DEPOSITS 1

1 The advantages and disadvantages of deposits today 1

2 Assess 2

3 Typical products 3

II BANKING PAYMENT SERVICES 4

III LENDING SERVICES 4

1 Interest rates on lending products of Vietcombank and GP Bank 5

2 Service fees for loan products 6

3 Loan procedures 7

IV FOREIGN CURRENCY EXCHANGE 8

V GUARANTEES 8

1 Benefits 8

2 Subjects of bank guarantee 9

C CHALLENGES AND OPPORTUNITIES 10

I DEPOSITS 10

1 Opportunities 10

2 Challenges 14

II PAYMENT SERVICES 18

1 Opportunities 18

2 Challenges 20

III LENDING SERVICES 22

1 Opportunities 22

2 Challenges 28

IV FOREIGN CURRENCY 30

1 Opportunities 30

2 Challenges 31

V GUARANTEES 32

1 Opportunities 32

2 Challenges 33

A INTRODUCTION

Vietcombank, also known as Joint Stock Commercial Bank for ForeignTrade of Vietnam, is one of the four largest banks in Vietnam Moreover,Vietcombank used to be the Foreign Exchange Department under the State Bank ofVietnam

Although being less well known than VCB, GP Bank - Global Petro

Commercial Joint Stock Bank is 100% state-owned bank operating and developing under the control and management of the State Few people know that GP Bank was acquired for 0 VND in 2015 After being acquired, GP Bank was managed by one of the four largest banks in Vietnam jointly with the state bank, Viettinbank Due to the difference in size, history as well as the reputation of both banks,our group chose these two banks’ services as references for the first part

B SERVICES

I DEPOSITS

Deposits are one of the most important services of the bank Thanks to this service,the person who does not need the money will be able to give money to the personwho needs it through the banking system

1 The advantages and disadvantages of deposits today

a Advantages

 Safe investment channel, stable profitability at the signed interest rate

 Digital transformation helps people not necessarily go to transaction pointsanymore There is also a reduction in costs thanks to online deposits

 Variety of packages sent

b Disadvantages

 Savings interest rates are usually not high and are variable over time

 If customers settle in advance, they will receive a much lower non-terminterest rate than the original interest rate

 If customers do not select carefully, they may choose 1 bank with low liquidity, leading to easy deposits

2 Typical products:

1

Flexible deposits and

withdrawals

 Interest payment method: Pay interest later

 Channel: Online or over the counter

 Number of original withdrawals: unlimited

Electronic savings,

online

 Interest payment method: Interest entered intoprincipal or transferred to the customer's ownVND payment account

 Implementation channel: Online

 Fixed interest rate during the deposit period

Deposits returned at

the end of the period

 Interest payment method: End-of-term interestpayment

 Channel: Online or over the counter

 Fixed interest rate during the deposit period

Early return deposit

 Interest payment method: Early interest payment

 Channel: Online or over the counter

 Fixed interest rate during the deposit period

3 Interest rate (%)

The following is a chart of annual interest rates of 2 banks (%/year)

4 The differences of deposit products between 2 banks are:

 Interest

3

Discover more from:

Btap NHTM - full version

With the difference in size between the 2 banks, customers can clearly seethe difference in interest rates compared to the size of each bank Vietcombank with much lower interest rates than GP Bank.

 Audience of the product

Vietcombank is a leading commercial bank, so it only focuses on the generalcustomer in the market, it is still large enough to be able to send foreigncurrency for a period of time

GP Bank is a weak joint stock bank so they will focus on specific classesand offer specific incentive packages: the elderly, low-income people Butalso because of its small size, this bank does not have foreign currencydeposit products

II BANKING PAYMENT SERVICES

Advantage - Quick payment, easy service

- Services associated with

e-commerce platforms, payment

applications widely and

conveniently

- As one of the leading banks in

terms of safety and security

- Take the lead in updating user

trends

- There are many advantages

when using the service

- The annual fee is quite low

- Cash can be withdrawn on

(Thailand), PayNet (Malaysia),

LaoVietBank

- Already applied interbankpayment, Napas fast payment24/7

- Integrating other electronicwallets, but not too popular.Customers can pay online forservices…

- Update some incentives whenbuying goods and using GPBank's services

Disadvantag

e

- High fees related to bank

accounts: money transfer fees,

- Haven't updated some quickuser trends

4

SMS fees

- Many card transactions take a

long time to update in the

application

- Some affiliate utilities failed

- Internet Banking is not yetpopular and trusted by manypeople

III LENDING SERVICES

Interest High (mostly 7.5% per year) Low (5.5% to 6.25%)The amount of

money is able to

be lended

90% of PCE (Personal Consumption Expenditures)70% ~ 80% value of collateral

80% of PCE

Up to 100% value of collateral

Procedure

There are 2 ways:

1, At the counter, the paperwork

2, Send online via app

There are 2 ways:

1, At the counter, the paperwork

2, Send online via app

1 Interest rates on lending products of Vietcombank and GP Bank

a For consumer loans



 Vietcombank:

 6.79%/year for the first 6 months with loans of 12 months or less

 6.99%/year for the first 6 months with loans over 12 to 24 months

 7.29%/year in the first month with loans over 24 months

 Flexible lending and repayment methods to best meet the needs ofcustomers.

 Competitive lending rates

 The interest rate applied by GP Bank to customers when taking out a loan isquite low compared to the common ground, at approximately 5.5%- 6.25%,meanwhile the interest of Vietcombank is mostly 7.5% per year Interest rates oflending products are always stable, and in the mid-range in the market Theservice, enthusiasm and convenience of GP Bank are the advantages to attractcustomers, the main targets are small business households, focusing more onconsumer lending The lending services of Vietcombank will have manyincentives but not as diverse as those of GP Bank

b For business loan products

 Vietcombank: In the first period of 2022, Vietcombank has spent VND 80,000

billion to implement a short-term production and business loan program forindividual customers and business households to borrow additional workingcapital with preferential interest rates such as: after:

 5.5%/year for loans under 6 months

 6.1%/year for loans from 6 to 9 months

 6.6% with 10 to 12-month loan

 GP Bank: Low-interest rate, more favorable than many other banks in the

market Interest rates will range from 5.5 %/year to 6.99 %/year depending onthe loan package and the customer's profile and credit history Loan packagessuch as business support with an interest rate of 6.25%/year, unsecuredoverdraft loan with an interest rate of 8.25%/year

 Most of GP Bank's business loan products are aimed at small businesses andsmall business households The products are often created with interest ratesthat are not considered high compared to other commercial banks in thecountry Including Vietcombank In addition, the lenders that Vietcombank'sproducts target are usually small and medium-sized enterprises with high-interest rates compared to the lending market

6

2 Service fees for loan products



 Vietcombank:

 Loan account service: Free

 Change of collateral issued by Vietcombank: Free

 Change of collateral as other assets: 200,000 VND/time

 Borrowing documents of collateral: 200,000 VND/time

 Issuance of confirmation of loan details: 100,000 VND/time



 GP Bank:

 Customers only have to pay fees as prescribed by GPBank and other costssuch as notarization fees; security transaction registration fees according tothe regulations of these agencies

 As for the service fees of the two commercial banks above, we can see a cleardifference between them The larger bank, Vietcombank, will be exempted fromsome service fees for problems arising from lending products to customers,while GP Bank - a smaller bank with better products and services, productscloser to the needs of customers are exempt from all fees associated with its

 Certificate of registration of legal ownership of the collateral

 Other documents when required by the bank



 GP Bank:

Customers need to prepare loan documents to request a loan with the bank.Required documents in the loan application:

 Bank loan application form

 Notarized copies of the following documents: ID card, householdregistration book, payroll, and labor contract at the capital (according to theform of Vietcombank)

 Household registration/ Certificate of temporary residence, ID card/Passport.

 Certificates of land use rights

 Proof of monthly income and ability to repay debt

 Certificate of identity

 Documents related to collateral for mortgage borrowers

 Letter of commitment for the purpose of using capital and payment method

 In addition, depending on each case, customers need to prepare othernecessary documents such as sales contracts, business contracts

 Both banks have simplified procedures so that customers can have easier access

to their available loan products Thereby, it can be seen that the loan procedures

of the two banks have basic steps such as a mortgage, collateral, and necessaryidentification documents to complete the loan procedure

IV FOREIGN CURRENCY EXCHANGE

Foreign currency exchange is one of the first banking services This is a reallyimportant service since firms have to buy ingredients or sell products to othercountries, the exchange rate would affect a lot on the firm’s decision Forindividuals, foreign exchange rate affects travellers, foreign exchage students andexporting workers

Transportation Through app and over the

8

 Even though the exchange rate of GP Bank is lower, many firms andindividuals use Vỉetcombank’s services for their foreign currency balance ismuch bigger than the GP Bank’s one

 All foreign exchange payment transactions and remittance are freely undertaken by residents and non-residents via their current accounts in accordance with the law on foreign exchange management Residents must transfer foreign currency income from export of goods and services

or from other current revenues in foreign countries to foreign currency accounts opened at the licensed credit institutions Non-residents are allowed to buy/sell, transfer or carry foreign currencies abroad for the following purposes: overseas study and healthcare, business, travel and visit, supporting relatives, inheritance remittance to overseas heirs, remittance for overseas settlement purposes and one way transfer for other legitimate needs In the territory of Vietnam, all transactions, payments, listing, advertisement, price quoting, contracting, agreements and other transactions are not allowed to be denominated in foreign currencies, except for certain cases in accordance with SBV's regulations.

V GUARANTEES

A bank guarantee is a type of financial backstop offered by a lending institution.The bank guarantee means that the lender will ensure that the liabilities of a debtorwill be met In other words, if the debtor fails to settle a debt, the bank will cover

it A bank guarantee enables the customer (or debtor) to acquire goods, buyequipment, or draw down a loan

2 Subjects of bank guarantee

 Legitimate businesses in the Vietnamese market

 Credit institutions are established and operate under the laws of creditinstitutions

 Cooperatives and other organizations that fully meet the conditionsspecified in article 94 of the Civil Code

 Foreign economic organizations participate in joint venture cooperation contracts and participate in bidding for investment projects in the

Vietnamese market

Different Banking guarantee:

 A payment guarantee assures a seller the purchase price is paid on a set date

 An advance payment guarantee acts as collateral for reimbursing advancepayment from the buyer if the seller does not supply the specified goods perthe contract

 A credit security bond serves as collateral for repaying a loan

 A rental guarantee serves as collateral for rental agreement payments

 A confirmed payment order is an irrevocable obligation where the bank paysthe beneficiary a set amount on a given date on the client’s behalf

 A performance bond serves as collateral for the buyer’s costs incurred ifservices or goods are not provided as agreed in the contract

 A warranty bond serves as collateral ensuring ordered goods are delivered asagreed

Client Individual, organizations

and businesses

Businesses and SME

10

C CHALLENGES AND OPPORTUNITIES

I DEPOSITS

1 Opportunities

a Bank applies technology to help customers open payment and save easily anytime and anywhere, with no need to go to the bank

Digital technology, innovation in production, and the connection and sharing

of information have created a big revolution in all industries and fields Data hasbecome the most important resource in products/services that are also graduallyprovided mainly in digital form to consumers, not limited by space and time.Digital technology has been transforming the banking and financial sectors in thefollowing aspects:

First, data is central: Data will change the nature of all banking and

financial services The future bank with a data-driven model will build a degree panoramic view of customers to enhance its service delivery and legalcompliance capabilities

360-Second, changing business methods and models: Banks and financial

technology companies gradually apply artificial intelligence combined with datascience to change traditional business models to models more sensitive and flexiblenew ones such as Digital banking, Platform banking, Platform Economy, Banking

as a service, Banking as a service leading bank (Incumbent Banking)

Third, increase opportunities for breakthrough development from

technology: Organizations that invest heavily in technology research anddevelopment and leverage the power of data will have the ability to outperformtraditional organizations (Bank of challenger, New Banking)

Fourth, changes in legal and policy: The rapid change of technology

requires regulatory agencies to change their approach from prudent management toensuring compliance Regulations and laws promote innovation, protectconsumers, open policies, and adapt to the environment and rapidly changingcircumstances of the 4.0 era

b Technology application in the banking system in Vietnam

 According to a survey by the State Bank of Vietnam's Institute of Strategy,96% of banks participating in the survey are building development strategiesbased on 4.0 technologies, of which 92% of banks are developing strategies

and developing application services on the Internet Internet and Mobile, 48%have an automation strategy, and 16% pay attention to IoT strategy Inaddition, 100% of banks also plan to expand cooperation with Fintechcompanies to provide banking products and services related to the followingareas: Payment (92%); digital banking services (76%); big data - Big data(68%); Blockchain technology (16%) Many domestic banks have nowapplied the successful technologies of Industry 4.0 such as advanced dataanalysis (Advanced Analytics), Artificial Intelligence (AI), machine learningtechnology (Machine learning), automated consulting services, and more.(Chatbot), blockchain technology into specific business activities, improveoperational efficiency and bring new experiences to customers.

 Automated banking services, banking applications, and digital paymentshave been researched and deployed by many banks (for example,Timo/YoLo digital banking application of VPbank, automatic banking -Livebank of TpBank; payment ATM OPBA branch of Nam A Bank; MB,Viet A, Nam A banks applying artificial intelligence, machine learningtechnology, ChatBot, in transaction support activities, customerconsultation 24/7 store)

 Banks have also built a data warehouse, centralized, standardized digitalinfrastructure that allows sharing and integration to create a digitalecosystem spanning many industries and fields such as a Mobile bankingecosystem connected to public services, finance, telecommunications,electricity, transportation, healthcare so that on mobile phones, customerscan use more utilities than direct transactions at banks Payment institutionshave applied all new technologies in the world (ATM, POS, InternetBanking, Mobile Banking, QR Code, Tokenization ), serving most of thekey economic sectors, and obtaining results

c Opportunities to develop digital technology applications in banking and finance in Vietnam

First, reach out and catch up on the world's banking technology Advances

from the digital technology revolution and subsequent Industry 4.0 will createfavorable conditions for Vietnamese banks to have the opportunity to takeshortcuts, attract investment capital, access international markets, innovatetechnology, create competitive advantages, and catch up with technology trends tobuild products and services to expand the market

12

Second, improve governance, apply technology in management to reduce

management costs, and traditional branch investment costs, develop many newproducts and services on the basis of 4.0 technology to attract wider customeraccess, and take advantage of economies of scale and sharing economy to develop

Third, new technology will make an important breakthrough in the

implementation of new modern banking services, meeting the diverse needs ofcustomers The trend of applying artificial intelligence and data science to enhancecustomers’ experience and provide highly personalized banking products to users

at the right time and right demand

For example, Online deposit: Vietcombank products

Vietcombank Digibank is a digital banking service built to fulfill itscommitment to bring Vietcombank to customers anytime, anywhere

This service is merged from 2 platforms Mobile Banking and InternetBanking to help customers experience all modern and fast financial utilities withjust a computer/phone with an Internet connection and an access code issued by thebank provided, very safe and convenient

Joining the Online Accumulated Deposit product, users will have theflexibility to make convenient daily deposits on VCB Digibank, ensuring asustainable financial future with outstanding product offers:

 Flexible accumulating deposits according to users’ financial plan with termdeposit interest rates

 Deposit and withdraw easily and conveniently on VCB Digibank onlinebanking

 Safe, accurate, and secure with modern authentication methods

Vietcombank has converted all internet banking services into VCB Digibankwith many outstanding features and advantages to bringing new and bestexperiences to customers, specifically as follows:

 Using the same account and password

This is an integrated product from Internet Banking and Mobile Bankingservices, so customers only need to use one username and one password to useboth versions of Vietcombank Digibank on web and mobile platforms

 Agree on transaction limit

In addition, customers can also agree on a maximum transaction limit for onlinebanking services Specifically, for regular customers, the transaction limit is 1billion VND/transaction and for priority customers, the transaction limit is 3 billionVND/transaction

 Enhanced security

Applying modern technology with high security features Smart OTP andintegrating new login authentication technology - Push Authentication to ensurethe safety of all customers’ transactions

 Receive transaction alerts anytime, anywhere

With Vietcombank Digibank, customer can receive balance change notificationsvia OTT (OTT Alert) messages right on the VCB application anytime, anywhere,replacing notifications via Vietcombank sms banking service to help customerssave money There are many costs involved Therefore, when using VietcombankDigibank, users can cancel SMS Banking Vietcombank to avoid additional fees

 The convenient transaction, payment, and shopping

Customers using the Vietcombank Digibank service can perform basictransactions such as viewing balances, paying domestic taxes, looking up the latestupdated Vietcombank savings interest rates, 24/7 quick money transfers, and onlinesavings, paying bills, booking flights/hotels, shopping online, etc… right on adevice with an Internet connection

2 Challenges

a Instruction of the State Bank to reduce interest rates

"The State Bank has directed all banks to reduce deposit interest rates at anappropriate level, and also reduce lending rates according to their size and potential

to support businesses and the economy.”

In Document No 9064 enacted in 2022 sent to banks, the State Bankrequires banks to reduce operating costs and unnecessary expenses to have room tostrive, to reduce lending interest rates, and strictly control risk credit for investment

in corporate bonds and real estate

14

According to the Deputy Governor, the most important interest ratereduction is to cut operating costs and profits, and shareholders must share Avoidhigh-interest rates from banks when the economy is in trouble, putting pressure onborrowers In addition, leaders of the State Bank asked banks to rebuild theirbusiness plans and strictly implement their commitments

Recently, the SBV has also issued a document requiring banks to reportdeposit and lending interest rates of new transactions in the weekly reportingperiod The purpose of this requirement, according to the State Bank, is to servethe management of banking operations and the administration of monetary policy

If the commercial bank decides to change the interest rate in the weeklyreporting period, it must send the decision on interest rate adjustment to the StateBank

At a meeting to agree on solutions to support businesses to developproduction and business held by the Vietnam Banks Association on the morning ofDecember 15, the Association called on banks to agree on the deposit interest rate

at all periods no more than 9.5%/year including promotions and reduced from0.5%-2% of lending interest rates Deposit rates have increased by 3%-4%.However, the deposit interest rate in market 1 is still very high, ranging from9% to 10% for terms over 12 months, of which some banks have interest rates up

to 11.5 %/ year Some commercial banks have sharply increased deposit interestrates, causing fierce competition for deposits, and creating instability for bothdepositors and borrowers

b The Russia-Ukraine conflict causes inflation

Inflationary pressure will make deposits at commercial banks less attractivesince citizens have to spend more money on daily supplies such as gas, food, etc.Besides they tends to invest in real estates, buy gold, etc in order to deal withinflation

Russia plays an important role in supplying petroleum and gas to the world,especially to the EU region Sanctions against Russia have caused oil and naturalgas prices to skyrocket, pushing up the price level of commodities, threatening thecontinuity of production and consumer demand, and increasing inflation Fuelprices increased following the escalation of world oil prices From about February