Credit services quality of vietnam joint stock commercial bank for industry and trade vietinbank

Hypotheses The model will be used to test hypotheses about group relations between the components of credit quality service for customer satisfaction: H1: Tangible means of of bank Vieti

THAI NGUYEN UNIVERSITY

Socialist Republic of Viet Nam

SOUTHERN LUZON STATE UNIVERSITY

Republic of the Philippines

CREDIT SERVICES QUALITY OF VIETNAM JOINT STOCK COMMERCIAL BANK FOR INDUSTRY AND TRADE – (VIETINBANK)

(SUMMARY)

A RESEARCH PROPOSAL PRESENTED TO THE FACULTY OF

GRADUATE SCHOOL SOUTHERN LUZON STATE UNIVERSITY, PHILIPPINES

IN COLLABORATION WITH THAI NGUYEN UNIVERSITY S.R VIETNAM

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE

DOCTOR IN BUSINESS ADMINISTRATION

Supervisor: Dr CONRADO L ABRAHAM Student Name: DONG TRUNG CHINH English name: ERICH

Thai Nguyen, 2013

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PUBLICATIONS RELATED TO THE THESIS

1 Dong Trung Chinh (2012) Solutions to reduce the credit risk of

commercial banks Research Journal of Finance and Accounting No 05 (106)

2012 ISSN 1859 - 4093 http://www.hvtc.edu.vn

2 Pham Hong Manh, Dong Trung Chinh (2013) Restructuring of the state

– owner corporations: Some recommendations Economy and Forrecast Review

No 06, 3/2013 (542) ISSN 0866.7120 http://kinhtevadubao.com.vn

3 Pham Hong Manh, Dong Trung Chinh (2013) What effects the

household businesses’ intention to ask for loans Economy and Forrecast Review

No 08, 4/2013 (544) ISSN 0866.7120 http://kinhtevadubao.com.vn

4 Dong Trung Chinh (2013) About the credit servicing quality at

Vietinbank Economy and Forrecast Review No 09, 5/2013 (545) ISSN 0866.7120 http://kinhtevadubao.com.vn

Chapter I: INTRODUCTION 1.1 Background of the study

The banks are increasingly expressed and demonstrated its important role in the national economy In the context of international economic integration as the current depth has created many opportunities but also many difficulties, challenges and solve problems in the operations of the banks, especially credit area

Such as many other banks in Vietnam, credit is not just a basic service to create a large volume of assets in total assets but also the main source of VietinBank Total revenue, interest income and other expenses directly related to credit operations, representing 65% - 75%

With competition so fierce place, improve the quality of services is vital for the competitiveness of the Bank The fact that banking is highly homogeneous, so the problem is that banks do make a difference in service, high usability, the banks will have strong competitive advantages

Keenly aware of this problem, beside solutions such as rapid increase of charter capital and technological perfection, the joint-stock commercial banks have entered the race to expand its network, diversify products and improve service quality to rapidly chalk up share On the Red River Delta region in recent years, the competitive landscape of the commercial banks came so fierce On the basis of the above mentioned

reason for the author to choose research topics: “Credit services quality of Vietnam

Joint stock commercial bank for industry and trade - VietinBank”

1.2 Statement of the Purpose

1.2.1 Overall object

Study level customer satisfaction with service quality of VietinBank - Red River Delta region - Vietnam, then to propose solutions to improve the quality service credit

of VietinBank, while improving the competitiveness and efficiency of business VietinBank

1.2.2 Special objects

- Identify the components that make up quality service credit of VietinBank

- Building scale components service quality credit of VietinBank

- Proposed model for the study factors that influence the customer satisfaction about the credit quality of VietinBank

- Testing hypotheses about the relationship between qualities of service composition, demographic characteristics to satisfaction of customers about credit quality of VietinBank

- Based in the analysis results, give recommendations necessary of leadership VietinBank

1.2.3 The study questions

1 What is the composition that constitutes quality of service VietinBank?

2 In the composition of VietinBank service quality, the ingredients are affecting customer satisfaction the most important?

3 The basic solution is to improve the quality of service credit for VietinBank now?

4 What is the possible model that influences the customer satisfaction about credit quality of VietinBank?

5 What are the recommendations necessary for the management of VietinBank based on the results?

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1.3 Significance of the Study

1.3.1 In scientific terms:

First, the thesis system theoretical basis of quality and service in general banking and credit services in particular

Second, from the theoretical foundations for quality of service, the subject has built research models and theories of the component factors of service quality for customer satisfaction for financial services VietinBank use in Vietnam

1.3.2 About is practicable:

First, services are difficult to measure, identify the elements of a quality characterized by customer service evaluation, especially credit services is essential Understanding the expectations and perceptions of customers towards banks help managers better understand, more sympathetic, more enthusiasm for serving audience Second, the level of quality of service credit provided by the Bank and its degree of influence to the satisfaction of bank customers have the opportunity to help look at ourselves from the perspective of the customer From there, make policy management, appropriate operational measures to improve service quality, serve customers better

1.4 Scope and Limitations

First, in the process of collecting documents and data investigation on the use of credit services to customers VietinBank still difficult Therefore, the sample size is small compared to investigate the number of customers using services of VietinBank Second, stratified sampling method for the local study area can not represent many different customers

Third, with a large credit institution as VietinBank many different services, such as loans, receiving deposits, ATM, cash However, a new study stopped just in financial services research of this bank

Fourth, from analysis the quality service composition in thesis primarily based on the theory of service quality, namely that model is of Parasuraman SERVQUAL adjusted for the characteristics of VietinBank in the region Red River Delta, Vietnam

Chapter 2: REVIEW OF RELATED LITERATUES AND STUDIES 2.1 Reviw of Related Literature and Studies

2.2 Conceptual Framework

2.3 Hypothesis

2.3.1 Research Model

As mentioned above, and based on the results of in-depth interviews with experienced professionals in the banking sector, the adjusted model to measure satisfaction credit quality service in VietinBank proposed include the following 06 elements

Figure 2.7: The research model with hypotheses based on five dimensions by

Parasuraman et al (1988)

H 1

H 2

H 3

H 4

H 5

H 6

Tangibles

Reliability

Responsiveness

Assurance

Empathy

Credit Profile

Satisfaction the quality of

credit

2.3.2 Hypotheses

The model will be used to test hypotheses about group relations between the components of credit quality service for customer satisfaction:

H1: Tangible means of of bank VietinBank to positively impact customer satisfaction

H2: The reliability of the service provider's bank credit VietinBank to positively impact customer satisfaction

H3: The enthusiasm of staff in providing services to positively impact customer satisfaction

H4 The assured of provides banking services VietinBank to positively impact customer satisfaction

H5: Empathy in the service of the bank employees to positively impact customer satisfaction

H6: Profile of bank credit is simple to positively impact customer satisfaction

2.4 Definition of Terms and Variable

Assurance: The knowledge and courtesy of employees and their ability to convey

trust and confidence

Empathy: The provision of caring, individualized attention to customers

Tangibles: The appearance of physical facilities, equipment personnel and

communication materials

Reliability: The ability to perform the promised service dependably and accurately Responsiveness: The willingness to help customers and to provide prompt service

Chapter 3: METHODOLOGY 3.1 Research Design

This study consists of two main steps: (1) Preliminary research and (2) qualitative research Presented in the following figure:

Figure 3.1: The process of conducting research

3.2 Research Locals

3.3 Samples and Sampling Techniques Used

3.4 Instrumentation

3.5 Procedure

3.6 Statistical Analysis of the Data

Regression Verification of conformity Testing the hypothesis

- Theoretical basis and results

of previous studies

- Quality of service

- Customer satisfaction

Questionnaire

Testing scale

Reliability and value

Adjust model

Discussion group

Adjust the scale and model

Testing theoretical models

Model &

scale (1)

Model &

scale (2)

Check Cronbach Alpha coefficients Factor Analysis

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Chapter 4: RESULTS AND DISCUSSION 4.1 Research Results

4.1.1 Sample size and response rate

With 400 sample, but the sample was collected for analysis unsatisfactory sample was only 368 Due to the client when performing the investigation, did not answer enough information for data analysis Thus, the sample size for the analysis of the thesis

to reach 92% of the sample being investigated

4.1.2 Demographic characteristics

* Gender and age of the customer: In the 368 customer’s surveyed client to 61% in

the loan transaction Vietinban credits are men, the percentage of female customers accounted for 39% The results of gender statistics in the study sample

* Age of customer: The age of the customers is quite diverse, spanning most of the

age Rate Customer under the age of 25 accounted for 20.11% Customer are aged from

25 to less than 35 percentage 35.87% Customer are aged from 35 to less than 45 percentage is 21.20 % Customer aged 45 and under 55 accounted for 19.57% and the rate is the rate customers over the age of 55 accounted for only 3.26% of customer surveyed

Age of the Customer to the transaction at the lowest VietinBank 24 and 58 the highest Average age of the Customer transaction is 36.07 years old

* The level of education: The level of education of the Customer to the transaction at

VietinBank very diverse, from secondary, secondary to university and graduate The rate of high school graduation Customer base up 3.26%, preferably 9.78% of high school, college - university graduates accounted for 72.83% and postgraduate 14.13 percentage %

* Position work at the company: Most Customer are in the business staff to deal with

the bank Rate Customer are directors or deputy directors accounted for 36.40%, the rate

of Customer is the chief accountant at the company is 29.30% and the percentage of customers are accountants is 34.20%

4.1.3 Descriptive Analysis Results

4.1.3.1 The object to business transactions

In business transactions to the bank to 53% of non-state enterprises (except for private enterprises), enterprises are state owned, and the remaining 6.5% are private enterprises, percentage of 40.5%

4.1.3.2 The level of loan transactions and credit

The survey results showed that 368 clients in business transactions at the bank to VietinBank there is now 3.26% of the transaction with the bank's services for the first time, 23.10% and there are more than 1 time to 73.64% in the regular trading

4.1.3.3 Purpose and interest loans credit

The purposes for the loan of credit at the bank Customer also vary with the business With 37.23% of the borrower for the purpose of additional capital for the business, while business loans for machinery and equipment investment is 36.41% Percentage of enterprises using the remaining credits for purposes other customers, such as payment

of short-term debt, building workshops

4.1.3.4 Status debt these loans customers

The survey results also show that, in businesses surveyed 69.3% to regular duly repaid for loans from bank credit, seldom limited to incorrect rate 27.4% and often incorrect term rate is 3.3% of the surveyed enterprises

4.1.3.5 Approaching Credit VietinBank

Assessment of the situation of access to credit services business is very different Of

368 companies surveyed, there were 31.8% of businesses said that access to financial services is easy, 38.6% of the business is normal and 29.6% for that difficult

4.1.4 The rating scale

Using analytical tools reliability Cronbach's Alpha to remove the garbage processing This involved two calculations relationship between themselves and ask the correlation between the scores of all the items asked for the score of the entire chain of respondents asked for The correlation coefficients of variables are greater than 0.3, allowing standard (Nunnally & Burnstein, 1994) and the criteria for selecting the scale when it Cronbach's alpha coefficient reaches 0.6 or higher Cronbach's Alpha will indicate the

measure of the links we have with each other or not

4.1.4.1 Tangible

Composition Scale "Tangible" includes 7 observed variables The Cronbach's Alpha

is 0.9309 > 0.6 The correlation coefficients of variables (Corrected Item-Total Correlation) are greater than 0.3, and if we eliminate any variable will also be reduced Cronbach's Alpha are no variables were excluded So this scale satisfactory, further variables are included in the factor analysis

4.1.4.2 Reliability

The scale consists of 6 observed variables Most of the correlation coefficients of variables (Corrected Item - Total Correlation) are greater than 0.3 However, only variables RELIABI6 = - 0854 < 0.3 is not satisfactory should be excluded (Appendix 2) After this kind of record, perform the analysis, the results achieved scale reliability with Cronbach's Alpha is 0.9229 > 0.6

4.1.4.3 Responsiveness

The scale consists of 5 observed variables The Cronbach's Alpha is 0.8344 > 0.6 The correlation coefficients of variables (Corrected Item-Total Correlation) are greater than 0.3 Results achieved scale reliability

4.1.4.4 Empathy

The scale consists of 5 observed variables The Cronbach's Alpha is 0.8593 > 0.6 The correlation coefficients of variables (Corrected Item-Total Correlation) are greater than 0.3 and if we remove any variable will also be reduced Cronbach's Alpha are no variables were excluded So this scale satisfactory, further variables are included in the factor analysis

4.1.4.5 Assurance

Composition Scale "The assurance provider" includes 5 observed variables The Cronbach's Alpha is 0.8077 > 0.6 The correlation coefficients of variables (Corrected Item-Total Correlation) are greater than 0.3, and if we eliminate any variable will also

be reduced Cronbach's Alpha are no variables were excluded So this scale satisfactory, further variables are included in the factor analysis

4.1.4.6 Profile

Ingredients scale "credit profile" includes 4 observed variables The correlation coefficients of variables (Corrected Item-Total Correlation) are greater than 0.3, except

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for variables PROFILE5 (Appendix 2) After this kind of processing, performance analysis, the results achieved scale reliability, with Cronbach's Alpha is 0.8496 > 0.6

4.1.4.7 Satisfaction

Composition Scale "Satisfaction about the service credit" includes 5 observed variables The Cronbach's Alpha is 0.9209 > 0.6 The correlation coefficients of variables (Corrected Item-Total Correlation) are greater than 0.3 Results achieved scale reliability

4.1.5 The results of analysis to explore factors

Perform job accreditation thang measured EFA, factor analysis for the thang measured be used with method withdraw criticized is the method Principle trục factoring with allows rotary Promax and point stop eigenvalue equal to 1 Thang measured be accepted when total variance criticized equal or greater than 50%, the variables have coefficient load factor <0.5 will continue be disqualified

The results of analysis to explore factors that EFA factor loading of the variable factors EMPA5 < 0.5 However, the value of this variable is very close to 0.5 should retain research proposal KMO value of factor analysis is quite high (0827 > 0.5) and a mean of 0 (sig = 0.000), demonstrating a consistent factor

At Engenvalue value greater than 1 for the extraction Principle axis factoring and Promax rotation, factor analysis has been criticized for 6 EFA factors from 36 variables with observed variance extracted is 68 537% > 50% (Index 2) There are six factors that would explain the 68 537% of the data variability The analytical results relevant factors have drawn six factors, are shown in Table below:

Table 4.1: The analytical results EFA

Component

TANGIB3 905

TANGIB1 890

TANGIB4 879

TANGIB6 875

TANGIB5 793

TANGIB2 779

TANGIB7 767

RELIABI1 897

RELIABI4 838

RELIABI5 834

RELIABI3 821

RELIABI2 807

EMPA2 .901

EMPA4 .868

EMPA3 .841

EMPA1 495 572

EMPA5 .448

RESPON2 .827

RESPON5 .819

RESPON1 .793

RESPON3 .744

RESPON4 .675

ASSURA3 826

ASSURA2 812

ASSURA4 763

ASSURA1 731

ASSURA5 591

PROFILE2 .871

PROFILE1 .832

PROFILE4 .818

PROFILE3 .789

a Rotation converged in 5 iterations Source: Calculated from survey data 4.1.6 The correlation analysis between service quality components with customer satisfaction at VietinBank The analytical results show that a satis correlated strongly correlated positively with the changes and respon-dimensional and correlated strongly with the variables PROFILE, RELIABI and statistically significant at the 1% significance level TANGIB variables, RELIABI, EMPA, respon, ASSURA, PROFILE no relation to each other 4.1.7 Results regression analysis of the impact of the credit component to quality of customer satisfaction at VietinBank The results estimated by regression method identified backward final model (Model 4) The data are explained 37.70% variation of the variables TANGIB, RELIABI, EMPA, respon, ASSURA, PROFILE satisfaction (SATIS) in quality customer service credit for VietinBank in Vietnam South, where most of the explanatory variables are marked as expected In the six variables studied three variables are statistically significant at the significance level of 1% and 5%, including: RELIABI, RESPON, PROFILE In particular, the response factor (RESPON) the greatest impact to customer satisfaction on service quality in bank credit After the turn of no statistical significance and perform the analysis, the results are shown in Table below: Table 4.2 Results regression analysis Unstandardized Coefficients Standardized Coefficients t Sig Collinearity Statistics B Std Error Beta Tolerance VIF (Constant) -3.150E-07 041 000 1.000

a Dependent Variable: SATIS

Source: Calculated from survey data

Regression equations for the components of credit quality services at VietinBank - Red River Delta Area is expressed in the equation:

SATIS = 0.141* RELIABI + 0.590 * RESPON + 0.120* PROFILE

4.2 Discuss research findings

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4.2.1 Characteristics of the borrowers and providers of VietinBank

4.2.2 The components of quality of service credit

Results of the reliability analysis of component services shows that most scales (iterm) were good measure to ensure the reliability and simplicity of the scale direction, except for the iterm PROFILE5, RELIABI6 in components credit profile (PROFILE) and reliability (RELIABI) Cronbach's alpha values of all components are quality of service criteria allows larger (> 0.6) This suggests that the scale measuring the quality

of service composition in VietinBank credit - Red River Delta region to meet the expectations of the study

The factor analysis was performed through EFA tool, has six components were to extract factors include: tangible (TANGIB), reliability (RELIABI), empathy (EMPA), the response (RESPON), assurance (ASSURA), credit profile (PROFILE) and satisfaction with the quality of customer service credit (SATIC)

4.2.3 Evaluate the relationship and the influence of the components in the credit quality of the service to the customer satisfaction

From the correlation analysis results showed that the quality of the service component of the credit VietinBank no relationship is statistically significant at the 1% and 5% However, they are positively correlated to customer satisfaction, 6 components

of research have 3 components correlated to customer satisfaction and are statistically significant at the 1%, including: response (RESPON), credit profile (PROFILE), and reliability (RELIABI) In part 3 of this response (RESPON) strongest correlation and processing credit profile (PROFILE) weakest correlation to customer satisfaction (STATIS)

Regression analysis results are shown in Table 4.16, model explains quite well the change of the composition the credit quality service and customer satisfaction in VietinBank Index Adjusted R Square = 0377; the value F-test = 75 165, at 1% significance level (Sig = 0.000), shows the model explained 37.70% of the variation in the quality of credit services to customers satisfaction in VietinBank As this is cross-data (cross - cross-data) to value Adjusted R Square = 0377 high is not entirely consistent with the characteristics of this kind of data The regression model results also indicate that, in terms of other factors in the model do not change, if the independent variable changes by 1 unit, customer satisfaction with the quality of service the credit VietinBank will increase / decrease β (regression coefficient) units

- Tangible (TANGIB): This factor positively impact customer satisfaction and have

signs as predicted If the viewing other factors constant, then the increase in tangible elements to 1 point will do for satisfaction level of customers increased to 0.024 points However, this variable is not statistically significant at the 10% the level of significance

- The reliability of service credit (RELIABI): This factor impact positively to the

satisfaction of quality of service credit and marks VietinBank as predicted, are statistically significant at the 1% significance level This factor regression coefficient is 0.141 This means that if you seen as other factors unchanged, when confidence increases by 1 point will make the customer satisfaction increased to 0.141 points

- Empathy (EMPA): these factor positive effects on customer satisfaction and have

signs as expected However, this variable is not statistically significant at the 10%