Business project assessment in the joint stock commercial bank for investment and development of viet nam

Cao Thanh Truongand Mr Nguyen Huu Nam, who allowed me to participate in BIDV Dong Do andtrusted me to join in important business projects assessment of the CustomerRelationship Managemen

This internship has been a useful and rewarding experience to me The chance tohave an internship program at BIDV Dong Do was such a valuable and excitingexperience on the last days of my school time Therefore, I would like to express mysincerely thanks to those who supported me greatly to complete this internship report Firstly, a debt of gratitude owed to the bank managers, Mr Cao Thanh Truongand Mr Nguyen Huu Nam, who allowed me to participate in BIDV Dong Do andtrusted me to join in important business projects assessment of the CustomerRelationship Management Department

Secondly, thanks to the guidance of all the staff of CRM Department in BIDVDong Do, especially Ms Nguyen Thi Vui, I have gained a deep knowledge andunderstanding of the basic concept, different aspects, risks, and challenges of theassessment process

Moreover, I would like to say thanks to all my lecturers at Foreign LanguageFaculty of Banking Academy of Vietnam who gave me lots of valuable advices tocomplete this internship report despite being extraordinarily busy with teaching job Finally, I highly appreciate my family members and my friends at the universitywho have heartedly supported me to finish my internship report

EXECUTIVE SUMMARY

In recent years, along with the international economic integration, Vietnam's

economic development has gained significant achievements Investment flows into theeconomy brought about the increase in demand for long-term investments byenterprises in general and new investment projects in particular The need for asufficient capital to participate in the construction of the project requires businesse touse its own capital or need to borrow funds from banks

There are a variety of reasons why I choose Business Project Assessment issue

to mention in this internship report The first reason is that banking operationsorganized in nature profits, which all activities of banks are towards economicefficiency, seeking to disperse and reducing risk Therefore, before each investmentproject, the bank needs to assess the feasibility of the project or the repayment ability

of enterprises Moreover, I have gained lots of valuable experience about projectassessment when I interned in BIDC Dong Do and Customer Relationship

Management Department With the above reasons, I have chosen "Business Project Assessment in the Joint Stock Commercial Bank for Investment and Development of Viet Nam" as an urgent topic presenting within my internship report.

I hope that with this internship report, readers will have an overview of theprofessional appraisal of investment projects in commercial banks

My internship report has four main parts as follow Part I is a brief introduction

of Joint Stock Commercial Bank for Investment and Development of Vietnam In part

II, my internship Program at Customer Relationship Management Department willdescribed in detail In part III, I will give an evaluation of Credit Grant process andCredit assessment in Customer Relationship Management Department And the lastpart, I will propose some recommendations for improvement, and then to come upwith a conclusion

TABLE OF CONTENTS

ACKNOWLEDGEMENT 1

EXECUTIVE SUMMARY 2

TABLE OF CONTENTS 3

LIST OF TABLES 5

LIST OF FIGURES 5

LISTS OF ABBREVIATIONS 6

PART 1: OVERVIEW OF THE JOINSTOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM 7

1.1 Overview of the organization 7

1.1.1 General information about Joint Stock Commercial Bank for Investment and Development of Vietnam 7

1.1.2 Brief history 7

1.1.3 Nature of the organization 9

1.1.4 Business volume 9

1.1.5 Product lines 10

1.1.6 Competitors 11

1.2 Organizational structure of BIDV 12

1.2.1 Organizational chart 12

1.2.2 Number of employees 12

1.2.3 Main offices 12

1.2.4 Introduction of all departments 13

1.2.5 Comments on the organizational structure 14

PART 2: INTERNSHIP ACTIVITIES AT CUSTOMER RELATIONSHIP MANAGEMENT DEPARTMENT IN BIDV DONG DO 15

2.1 A brief introduction of BIDV Dong Do Branch 15

2.2 Nature of BIDV Dong Do Branch 15

2.3 Organizational structure of BIDV Dong Do Branch 16

2.4 Starting and ending dates of my internship at BIDV Dong Do

Branch 16

2.5 Full description of CRM Department in BIDV Dong Do Branch 17

2.5.1 Organizational structure of CRM Department 17

2.5.2 Current activities of CRM department in BIDV Dong Do Branch 18

2.5.3 Activities performed during my internship 19

PART 3: CRITICAL ANALYSIS OF CREDIT ASSESSMENT IN BIDV DONG DO BRANCH 21

3.1 Theoretical concepts 21

3.2 Current business situation 21

3.2.1 Brief introduction of bank’s project assessment situation at CRM department in BIDV Dong Do and “Stone Base” project 21

3.2.2 Advantages and disadvantages of project assessment of BIDV Dong Do Branch 24

3.2.3 SWOT Analysis 25

PART 4: RECOMMENDATIONS FOR IMPROVEMENT AND CONCLUSION 28

4.1 Recommendations 28

4.1.1 Solution in human resources 28

4.1.2 Solution in information quality 28

4.1.3 Solution in technology 28

4.1.4 Solution in assessment process 29

4.2 Conclusion 29

LIST OF TABLES

Table 1: The comparison of business volume in BIDV 9

Table 2: The Balance Sheet of Business Volume of BIDV 10

Table 3: Practical activities performed during the internship 20

Table 4: the proportion of successful projects between 2013 and 2015 21

Table 5: the number of white limestone powder CACO3 that market needs 23 LIST OF FIGURES Figure 1: Organizational structure of BIDV 12

Figure 2: Organizational structure of BIDV Dong Do 16

Figure 3: Organizational structure of CRM Department – BIDV Dong Do 17

LISTS OF ABBREVIATIONS

Investment and Development of Vietnam

BIDV Dong Do Joint Stock Commercial Bank for

Investment and Development of Vietnam –Dong Do Branch

Stone Base Corp Stone Base Corporation

RM department Risk Management department

PART 1:

OVERVIEW OF THE JOINSTOCK COMMERCIAL

BANK FOR INVESTMENT AND DEVELOPMENT

OF VIETNAM 1.1 Overview of the organization

1.1.1 General information about Joint Stock Commercial Bank for Investment and Development of Vietnam

Name of business : Joint Stock Commercial Bank for Investment and

Development of VietnamEstablishment date : 26/04/1957

Headquarters : 35 Hang Voi, Hoan Kiem District, Ha Noi, Vietnam

Slogan : Share opportunities, Share success

Nature of business : Joint Stock Commercial Bank

1.1.2 Brief history

Bank for Investment and Development of Vietnam, formerly known as Bank forConstruction of Vietnam, established by Decision No 177/TTg dated 26/04/1957 ofthe Prime Minister The bank has gone through some milestones in its development asfollows:

1957 Established under the name of Bank for Construction of Vietnam,

under the Ministry of Finance, and wholly owned by the State

1981 Changed name to Bank for Investment and Construction of Vietnam

(under the State Bank)

1990 Changed name to Bank for Investment and Development of Vietnam

1992 Commenced cooperation with overseas partners

1995 Commenced operations as a full-service commercial bank

1996 Was the first commercial bank in Vietnam to conduct both Vietnam

and IFRS reporting, and continuously applied until now (15 years)

2001 Was the first commercial bank in Vietnam to receive ISO 9001:2000

certification2001-2006 Implemented the plan of bank restructuring

2006 Was the first bank in Vietnam to be ranked by Moody’s for its

operational reliability, with all indices meeting national standards

2008 Comprehensively transformed its organizational structure at the

Head office and branches towards a modern retail commercial bank

up to international standards under Project TA2

2011 Was converted from a state-owned enterprise to One-member

Limited Liability Company owned by the State and conductingequalization

1.1.3 Nature of the organization

Up to now, BIDV had 55 years of operation and growth Established early in

Vietnam, BIDV plays an essential role in the country’s finance from the beginning.Depending on the requirement of each history’s stage in the national construction task,BIDV has changed and developed to affirm decisive role in investment anddevelopment areas

BIDV functions as a universal commercial bank providing a full range ofcurrency, credit, banking, and non-banking services, and acting as an authorizedagency funding projects with sources from domestic and international financialinstitutions BIDV has set its own vision that is to become a leading Vietnamesebanking group with booming international operations and high respects and trust ofclients They also expanded credit services in both wholesale market in severalspecialized fields retail market

Source: Annual financial report of BIDV (2013, 2014, 2015)

Table 2: The Balance Sheet of Business Volume of BIDV

(Unit: million VND)

BALANCE SHEET

Placements at and loans to

Placements and borrowing

Mobilizing activities

There are a variety of accounts provided by the bank such as: deposits account,fixed deposit account or Tich luy bao an savings account Therefore, all clients canchoose any products that are most suitable for them to use

Trade finance

This activity of BIDV supports customers when they buy and sell in foreignexchange market in three areas: export finance, import finance, and internationalpayment

Payment services and E-banking

The bank provides customers a wide range of payment services through BIDVBusiness Online, credit card, debit card, visa card, or collection by list

Other activies

In addition to several activities that I mention above, BIDV also provides otheractivities like online export-import tax payment, supply chain financing, domestic andcross-border fund transfers, fixed income or overseas study

1.1.6 Competitors

Competition in the banking industry is increasing fiercely when manycorporations, which are BIDV’s core customers, urgently established bank, financialcompanies The bank will be under pressure for the loss of major customers and keyemployees because a series of new-established banks expected to require thousands ofsenior personnel There is a competition among BIDV with all the banks in theindustry, including Vietcombank, Agribank, Vietinbank and Military Bank

1.2 Organizational structure of BIDV

1.2.4 Introduction of all departments

1.2.3.1 The Customer Relationship Department

Consumer banking division takes responsibility for bringing out businessprojects to interest personal customers and tackling matters connected with cards anddebt management On the other hand, corporate banking division has a duty that isalmost the same as consumer one, but the subjects are corporations

1.2.3.2 The Risk Management Department

The department takes responsibility for controlling credit operations, credit risksand other risks that the Bank may encounter This division also examines the risk frompotential business operations proposed by other divisions

1.2.3.3 The Operations Department

In BIDV, this department has responsibility for payments and direct payment In particular, this division handles domestic payment, international moneytransfer, and SWIFT telegraphic transfer; loan management, customer services, andtrade finance activities

collection-1.2.3.4 The Internal Affairs Department

The Internal Affairs Department is in charge of financial accounting informationfor the Bank and its subsidiaries This department is also responsible for financialanalysis and monitoring

1.2.3.5 Subsidiaries

All Subsidiaries throughout the country provide support to the Bank’s businessactivities and overall transactions

Consumer banking division takes responsibility for bringing out business

projects to interest personal customers and tackling matters connected with cards and

debt management On the other hand, corporate banking division has a duty that is

almost the same as consumer one, but the subjects are corporations

1.2.5 Comments on the organizational structure

Organizational structure has transformed toward the model of a modern,international financial group The organizational structure of BIDV follows the model

of functional activity (credit – service – capital) which brings subjectivity in thedesign model that does not effectively analyze the needs of whether the individual orclientele and not effectively identify customer’s needs, which may lead todisorientation.

PART 2:

INTERNSHIP ACTIVITIES AT CUSTOMER RELATIONSHIP MANAGEMENT DEPARTMENT IN BIDV DONG DO

1

2.1 A brief introduction of BIDV Dong Do Branch.

BIDV - Dong Do branch established basing on the upgrading of trading division2-Exchange 1 The branch started its operation from July 31, 2004 according toDecision 191/QD – HDQT on July 05, 2004 of BIDV’s Board of Directors Theestablishment of BIDV Dong Do conforms to restructuring process, associates withcomprehensive reform and sustainable development with a high growth rate, promotestraditional investment and development in services, and diversifies customer of alleconomic sectors

The main office of this branch is located at 14 Lang Ha Street, Ba Dinh Ha Noi

As the branch is right at the crossroad between Lang and De La Thanh Street, it isquite convenient to provide the Bank's products and services to people and businesses

2.2 Nature of BIDV Dong Do Branch

As one of pioneer establishments in banking system, BIDV focuses on deployingretail-banking operation, making medium and long-term loans, enhancing services tosatisfy customers Moreover, BIDV operates following one-door trading model forbusiness process and modern banking technology

In addition, the bank expanded credit services in wholesale market in severalspecialized fields and focused on improving the quality of customer care services andcontrolling the retail market

2.3 Organizational structure of BIDV Dong Do Branch

Figure 2: Organizational structure of BIDV Dong Do

Source: Data of Administration of BIDV Dong Do Branch

2.4 Starting and ending dates of my internship at BIDV Dong Do Branch

Risk Management

Department

Office

DEPUTY DIRECTOR

DEPUTY DIRECTOR

Accounting Department

Customer Services Department

Computing Team

DEPUTY DIRECTOR

DEPUTY DIRECTOR

Customer Relationship Management Department

SVS Team

DEPUTY DIRECTOR

DEPUTY DIRECTOR

Transaction Department 1,2,4 Hang Bong

Credit Risk Department

2.5 Full description of CRM Department in BIDV Dong Do Branch

2.5.1 Organizational structure of CRM Department

Figure 3: Organizational structure of CRM Department – BIDV Dong Do

Source: Data of Administration of BIDV Dong Do Branch

There are 11 people in the CRM department, where I carried out my internship

The head of CRM department, Mr Nguyen Huu Nam is responsible for all loans of all

members under his guidance He is a person who provides short – term plans, long –

term plans, examines, and supervises all activities in the CRM department

In the department, there are two deputy managers; Mr Hoang Manh Cuong and

Ms Do Lan Huong who are in charge of 2 different areas Ms Do Lan Huong is

responsible for Trade Finance services while Mr Hoang Manh Cuong takes full

responsibility for assessment of all the loans

Other staffs in the department get the blame finding and caring corporate

customers They have to do some sale skills to find out customers After that, all staffs

have to learn about their need and problem in order to solve their problem and offer

effective services for them Importantly, the staff has to assess their customer,

business, and project to make sure that they can pay back for the bank

Head of CRM Department

Head of CRM Department

Mr Nguyen Huu Nam