CREDIT ASSESSMENT OF BUSINESS IN THE JOINSTOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM

Cao Thanh Truong and Mr.……….., who allowed me to participate in BIDV Dong Do and trusted me to join inimportant business projects assessment of the Customer Relationship Management Depar

Firstly, a debt of gratitude owed to the bank managers, Mr Cao Thanh Truong and Mr.

……… , who allowed me to participate in BIDV Dong Do and trusted me to join inimportant business projects assessment of the Customer Relationship Management Department

Secondly, thanks to the guidance of all the staff of CRM Department in BIDV Dong Do,especially Ms …… …… Vui, I have gained a deep knowledge and understanding of the basicconcept, different aspects, risks and challenges of the assessment process

Moreover, I would like to say thanks to my lecturers who gave me lots of valuable advices tocomplete this internship report despite being extraordinarily busy with her teaching job And, I am alsothankful to all my beloved teachers at Foreign Language Faculty of Banking Academy of Vietnam,who delivered precious support over my student life

Finally, I highly appreciate my family members and my friends at the university who haveheartedly 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 the economy brought about the increase indemand for long-term investments by enterprises in general and new investment projects in particular.The need for a sufficient capital to participate in the construction of the project requires businesse touse its own capital, funds raised from the business cooperation partners need to borrow funds frombanks trade to investment projects in line with the set schedule

There are a variety of reasons why I choose Business Project Assessment issue to mention in thisinternship report The first reason is that banking operations organized in nature profits, which allactivities of banks are towards economic efficiency, seeking to disperse and reducing risk Therefore,before each investment project, the bank needs to assess the feasibility of the project or the repaymentability of enterprises Moreover, I have gained lots of valuable experience about project assessmentwhen 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

TABLE OF CONTENTS

ACKNOWLEDGEMENT 1

EXECUTIVE SUMMARY 2

LISTS OF ABBREVIATIONS 6

PART 1: OVERVIEW OF THE JOINSTOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM – DONG DO BRANCH 7

I Overview of the organization 7

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

2 Brief history 7

3 Nature of the organization 9

4 Business volume 9

5 Product lines 11

6 Competitors 12

II Organizational structure of BIDV 12

1 Organizational chart 12

2 Number of employees 13

3 Main offices 13

4 Introduction of all departments 13

4.1 The Customer Relationship Department 13

4.2 The Risk Management Department 14

4.3 The Operations Department 14

4.4 The Internal Affairs Department 14

4.5 Subsidiaries 14

5 Comments on the organizational structure 14

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

I A brief introduction of BIDV Dong Do Branch 15

II Nature of BIDV Dong Do Branch 15

III Organizational tructure of BIDV Dong Do Branch 16

IV Starting and ending dates of my internship at BIDV Dong Do Branch 16

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

1 Organizational structure of CRM Department 17

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

2.1 Marketing and developing customer relationship 18

2.2 Trade finance transactions 19

2.3 Other activities 19

3 Activities performed during my internship 19

1 CHAP 3: CRITICAL ANALYSIS OF CREDIT ASSESSMENT IN CRM DEPARTMENT 22

I Theoretical concepts 22

II CURRENT BUSINESS SITUATION 22

1 Brief introduction of bank’s project assessment of BIDV Dong Do and “Stone Base” project 22

1.1 Project assessment of BIDV Dong Do 22

1.2 “Stone Base” project 23

2 Advantages and disadvantages of project assessment of BIDV Dong Do Branch 26

3 SWOT analysis 26

CHAP 4: RECOMMENDATIONS FOR IMPROVEMENT AND CONCLUSION 27

I Recommendations 27

II Conclusion 27

REFERENCES 28

LIST OF TABLES

Table 1: The comparison of business volume in BIDV (Unit: million VND)

Table 2: Table 2: The Balance Sheet of Business Volume of BIDV (Unit: million VND)

LIST OF FIGURES

Figure 1: Organizational structure of DongA

Figure 2: Organizational structure of DongA Bank Bac Ninh

Figure 3: Structure of outstanding loans for SMEs according to time at DongA bank – Bac Ninh

branch:

Figure 4: Structure of outstanding loans for SMEs according to types

LISTS OF ABBREVIATIONS

Investment and Development of Vietnam

Investment and Development of Vietnam– Dong Do Branch

PART 1: OVERVIEW OF THE JOINSTOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM – DONG DO BRANCH

I Overview of the organization

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

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)

Vietnam

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

9001:2000 certification

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

Limited Liability Company owned by the State and conductingequalization

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 eachhistory’s stage in the national construction task, BIDV has changed and developed to affirm decisiverole in investment and development areas

BIDV functions as a universal commercial bank providing a full range of currency, credit, banking,and non-banking services, and acting as an authorized agency funding projects with sources fromdomestic and international financial institutions

However, to make it become the unique in the banking system and in customers’ eyes, since theestablishment date, BIDV has set its own vision that is to become a leading Vietnamese banking groupwith booming international operations and high respects and trust of clients To be more specific, thebank expanded credit services in wholesale market in several specialized fields such as aquaculturesector, electric sector and real estate sector On the other hand, in retail market, BIDV focused onimproving the quality of customer care services and controlling the 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

other credit institutions

Placements and borrowing

from other credit

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 can choose any products that are mostsuitable for them to use

Trade finance

This activity of BIDV supports customers when they buy and sell in foreign exchange market in threeareas: export finance, import finance, and international payment

Payment services and E-banking

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

Other activies

In addition to several activities that I mention above, BIDV also provides other activities like onlineexport-import tax payment, supply chain financing, domestic and cross-border fund transfers, fixedincome or overseas study

5 Competitors

Competition in the banking industry is increasing fiercely when many corporations, which are BIDV’score customers, urgently established bank, financial companies The bank will be under pressure forthe loss of major customers and key employees because a series of new-established banks expected torequire thousands of senior personnel There is a competition among BIDV with all the banks in theindustry, including Vietcombank, Agribank, Vietinbank and Military Bank

II Organizational structure of BIDV

1 Organizational chart

4 Introduction of all departments

- Consumer banking division takes responsibility for bringing out business projects to interest

personal customers and tackling matters connected with cards and debt management

- Corporate banking division has a duty that is almost the same as consumer one, but the subjects

are corporations In addition, it also derives the demand of international payment fromcompanies This department is responsible for maintaining and developing the relationshipsbetween BIDV and its large corporate customers Specifically, the Customer Relationship

The department takes responsibility for controlling credit operations, credit risks and other risksthat the Bank may encounter This division also examines the risk from potential businessoperations proposed by other divisions.

In BIDV, this department has responsibility for payments and direct collection-payment Inparticular, this division handles domestic payment, international money transfer, and SWIFTtelegraphic transfer; loan management, customer services, and trade finance activities

The Internal Affairs Department is in charge of financial accounting information for the Bank andits subsidiaries This department also manages financial operations for the transaction office andgeneral accounting, as well as responsible for financial analysis and monitoring

All Subsidiaries throughout the country provide support to the Bank’s business activities andoverall transactions

Consumer banking division takes responsibility for bringing out business projects to interest

personal customers and tackling matters connected with cards and debt management

Corporate banking division has a duty that is almost the same as consumer one, but the subjects are

corporations In addition, it also derives the demand of international payment from companies

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 the design model that does not effectively analyze the needs ofwhether the individual or clientele and not effectively identify customer’s needs, which may lead todisorientation

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

I A brief introduction of BIDV Dong Do Branch.

BIDV - Dong Do branch established basing on the upgrading of trading division 2-Exchange 1 Thebranch started its operation from July 31, 2004 according to Decision 191/QD – HDQT on July 05,

2004 of BIDV’s Board of Directors The establishment of BIDV Dong Do conforms to restructuringprocess, associates with comprehensive reform and sustainable development with a high growth rate,promotes traditional investment and development in services, and diversifies customer of all economicsectors Furthermore, BIDV Dong Do helps to improve and enhance the quality of banking services,improves the efficient of safety system required by the market economy and integration roadmap, as acore for building a strong financial corporation

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 is quite convenient to provide the Bank'sproducts and services to people and businesses

II Nature of BIDV Dong Do Branch

As one of pioneer establishments in banking system, BIDV focuses on deploying retail-bankingoperation, making medium and long-term loans, enhancing services to satisfy customers Moreover,BIDV operates following one-door trading model for business process and modern bankingtechnology

III Organizational structure of BIDV Dong Do Branch

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

V Full description of CRM Department in BIDV Dong Do Branch

1 Organizational structure of CRM Department

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

Source: Data of Administration

There are 11 people in the CRM department, where I carried out my internship The head of CRMdepartment, Mr ………., is responsible for all loans of all members under his guidance He is aperson who provides short – term plans, long – term plans, examines, and supervises all activities inthe CRM department

In the department, there are two deputy managers, Mr ……… and Ms ……… who are

in charge of 2 different areas Ms ……… is responsible for Trade Finance services while Mr

……… 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 dosome 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 assesstheir customer, business, and project to make sure that they can pay back for the bank

2 Current activities of CRM department in BIDV Dong Do Branch

Head of CRM Department

Head of CRM Department

section

Deputy of CRM Deparment - Credit

section

Ms

2.1 Marketing and developing customer relationship

- Advising and proposing policies and plans for developing customer relationship

- Direct marketing and sale of products (products wholesale, trade finance, venture capital andcurrency, ):

- Responsibility for establishing, maintaining and developing partnerships with customers andselling banking products:

- Credit services

- Direct proposing limits, credit limits and credit proposal

- Monitoring and managing the operations of our customers

- Classifying and examining risk detection

- Accepting full responsibility for:

 Finding customers, developing credit activity (business), growth, and credit performance(business) of the Branch

 The completeness, accuracy, and truthfulness of the information customers providing reports tocater the grant of credit for customers

risk level of the bank, are legal and credit conditions

 The safety and effectiveness for the proposed loan to provide credit decision

- Handling the bad debts

- Managing trade finance transactions at the branch, in coordination with the departments related

to development approach customers use the trade finance products and sales of products fortrade financing BIDV

Current activities

Marketing and developing customer relationship

Credit services

Trade finance transactions Other

activities