MINISTRY OF EDUCATION AND TRAINING HANOI UNIVERSITY OF BUSINESS AND TECHNOLOGY VU THI THU HUONG ENHANCING THE COMPETITIVENESS CAPACITY OF JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRAD
Trang 1MINISTRY OF EDUCATION AND TRAINING HANOI UNIVERSITY OF BUSINESS AND TECHNOLOGY
VU THI THU HUONG
ENHANCING THE COMPETITIVENESS CAPACITY
OF JOINT STOCK COMMERCIAL BANK FOR
FOREIGN TRADE OF VIETNAM IN TERMS OF
INTERNATIONAL INTEGRATION OF FINANCE AND
Trang 2THE WORK WAS COMPLETED AT:
HANOI UNIVERSITY OF BUSINESS AND TECHNOLOGY
Suppervisors:
1. PROF DR VU VAN HOA
2. ASSOC PROF DR PHAN VAN TINH
REVIEWER 1: ASSOC PROF DR DAO MINH PHUC
VIETNAM STATE BANK REVIEWER 2: ASSOC PROF DR NGUYEN TRONG THAN
ACADEMY OF FINANCE REVIEWER 3: ASSOC PROF DR LE VAN LUYEN
BANKING ACADEMY
The thesis will be defended in front of the University's Thesis Evaluation Council, meeting at the Hanoi University of Business and Technology
At ……h …… date ……month…….2020
The thesis can be found at:
- The National Library.
- The Library of Hanoi University of Business and Technology.
Trang 31 Urgency of research topics
In developed economies, the banking system has always played animportant role in the development of the economy Commercial banks not onlyensure capital for production - business, but also act as a bridge betweenbusinesses, the market, the Government and the economies in the region as well
as across the globe The role of commercial banks has been confirmed to beindispensable in the modern economy
Commercial banks exist in a specific environment To stand firm anddevelop, they face many difficulties and challenges These are difficulties in
business capital, on the level of labor, the operating environment, institutional arrangements Especially management capacity This is "self-created"
knowledge No commercial bank fully communicated and "genuinely"instructed its partners about market experiences Therefore, commercial banksmust find ways to overcome other commercial banks and do business in the
same area This is a process of competition within the industry of the commercial banking system.
Currently, Vietnam's economy has not been fully opened, so thecompetition among commercial banks is now mainly within the industry Whenthe economy is open completely , competition in the market Vietnam willregional and advance to the global competition At that time competition will be
at a higher level and really full of its meaning is fierce competition.
Regarding competition among commercial banks, there have been many
authors and research works However, the competitiveness of JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - Vietcombank,
in terms of international integration of finance and banking, has not been
studied deeply and comprehensively by many authors
The author of this thesis finds that the above contents need to besystematically studied The purpose to clarify the position and role of the
Vietcombank's competitiveness with domestic commercial banks and its ability
to play on the international playing field
Regarding the above contents, the author of the thesis emphasizes:
First of all, Vietcombank's role in the Vietnamese economy and with the
current Vietnamese commercial banking system
Secondly , Analyzing the strengths and limitations of Vietcombank in
terms of financial capacity, management capacity and Vietcombank's
competitiveness in the market
Third, Assess and rate Vietcombank according to the announced criteria
of the commercial banking system in the market
Trang 4These are basic contents assessing the competitiveness of Vietcombankand the leading prestigious commercial banks in Vietnam
Stemming from the above-mentioned reasons, the topic: "Enhancing the competitiveness capacity of Joint Stock Commercial Bank for Foreign Trade of Vietnam in terms of international integration of finance and banking", selected
by the PhD student make a PhD thesis topic, which has practical and scientificsignificance
and international integration:
- The role of Vietcombank and Vietnam commercial banking system interms of international integration in Finance - Banking
- The number and types of commercial banks in the internal competitiveconditions
- The reality of the capital, assets, capabilities science - technologyVietcombank and Vietnam commercial system available today
- Vietcombank's management capacity in terms of competition andinternational integration
2.2 Analyzing Vietcombank's competitiveness in the current conditions
of international integration in Finance - Banking.
2.3 Researching the state of the State's policies towards the Vietnam commercial banking system and with Vietcombank in the process of Vietnam's international integration in Finance - Banking.
2.4 Researching policies of some countries in the region and the World
on enhancing the competitiveness of commercial banks, can refer to Vietcombank.
2.5 Proposing some solutions to improve Vietcombank's competitiveness
in the context of international integration in finance and banking
3 Research subject and scope
Subject of study : Vietcombank With the key contents are:
- Assessing the status of business, financial capacity of VCB in thecontext of competition and international integration, VCB's management ability
in competition conditions among commercial banks, VCB's science andtechnology capacity, in competitive conditions and international integration offinance and banking for a period of 5 years from 2014-2018
Research scope.
Trang 5Overview of Vietcombank and its development in the period of 2014 2018.
Vietcombank's position and role in the Vietnamese economy and itsforeign relations
- Research period: 5 consecutive years: 2014 - 2018
4 Research Methodology.
- Methodology.
The thesis is studied based on dialectical materialism and historicalmaterialism
The research data is based on the reality of socio-economic development
of Vietnam and the World in the period of 2014 - 2018 In which, based on data
on the development of Vietnam's commercial banking system, the focus is onVietcombank - object of this thesis
Comparative statistics by expert method
Comments and conclusions
5 Scientific and practical significance of the research topic
Firstly , the thesis contributes to clarify the content: the term of
competition, the origin of competition, the competitiveness in general and the
enterprise system in the market economy Especially in the context ofinternational economic integration
Secondly, the thesis stated and analyzed the current situation of
competitiveness of Vietnamese commercial banks and the State's policiesaffecting the Competitive capability of the Vietnamese commercial bankingsystem in the context of international integration in finance - banking
Thirdly, to study status of VCB's competitiveness in the context of
international economic integration in finance - banking
Fourthly, the thesis contributes to finalizing the financial policy for the
development of Vietnam's commercial banking system, focusing on improvingVietcombank's competitiveness, in the context of international integration inFinance - Banking
Based on the research results, the thesis proposes a number of solutions
to improve Vietcombank's competitiveness in the current conditions of international financial and banking integration of Vietnam.
Trang 66 Structure of the thesis: The content of the thesis is structured into three chapters.
Chapter 1.
OVERVIEW OF COMMERCIAL BANK AND COMPETITIVENESS
OF COMMERCIAL BANK IN CONDITIONS OF INTERNATIONALINTEGRATION ON FINANCE - BANKING
Chapter 2
CURRENT SITUATION OF BUSINESS AND COMPETITIVENESS
OF JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OFVIETNAM IN CONDITIONS OF INTERNATIONAL INTEGRATION ONFINANCE - BANKING
Chapter 3
SOLUTIONS TO IMPROVE THE COMPETITIVENESSCAPACITY OF JOINT STOCK COMMERCIAL BANK FOR FOREIGNTRADE OF VIETNAM IN CONDITIONS OF INTERNATIONALINTEGRATION ON FINANCE – BANKING
Chapter 1.
OVERVIEW OF COMMERCIAL BANK AND COMPETITIVENESS OF COMMERCIAL BANK IN CONDITIONS OF INTERNATIONAL
INTEGRATION ON FINANCE - BANKING
1.1 COMMERCIAL BANK AND THE ROLE OF A COMMERCIAL BANK IN THE MARKET ECONOMY.
1.1.1 Overview of the development of commercial banks in the market economy.
In Vietnam market, commercial banks have developed and built up asystem with the State Bank of Vietnam - responsible for state management inthe field of currency, credit, banking and commercial banks with non-bankcredit institutions These institutions are capable of managing money - credit andbanking services in the socio-economic life
1.1.2 Functions and operations of commercial banks
1.1.2.1 Functions of commercial banks
In the market economy, commercial banks perform the followingfunctions here :
i Credit intermediaries.
Performing the function of credit intermediaries, commercial banks arethe "bridge" between the subjects with free capital and those who need capitalfor production - business and investment
Trang 7ii Intermediary payment.
Acting as an intermediary for payment when a commercial bank makes apayment at the request of a customer Payment transactions of customers arisediverse, such as payment of goods, services, money transfer or enter into thecustomer's deposit accounts of receipts - sales proceeds and valid receipts, Otherlegal orders of account holder Performing this function, commercial banks act
as "cashiers" for account holders and follow their orders
iii "Money creation" function
With the function of credit intermediaries and payment intermediaries,commercial banks have the ability to create credit money, which is thebookkeeping currency This currency is shown on customers' payment depositaccounts, at commercial banks This amount is part of the amount of moneyused in customer transactions and commercial banks
1.1.2.2 Tasks of commercial banks
Although in the markets with different levels, the names and contents ofcommercial banks' operations have not changed the traditional names andcontents Therefore, in this thesis, the author still refers to inherent operations ofcommercial banks, which are:
i Capital raising operations.
Capital mobilization is a profession whereby commercial banks gather idle capital sources in the economy, form a centralized monetary fund to use for the determined purpose
ii Use of funds.
As used funding operations of commercial banks The capital is mainlyused to carry out lending, investment activities and repaying due debts thatcommercial banks have mobilized in advance Ensuring safety in business, inwhich credit security is put first The above contents are effectivelyimplemented depending on the management capacity , in which creditmanagement, is considered above all
1.1.2.3 Intermediary payment
Payment is both a function and a professional of a commercial bank.Performing this function, commercial banks are the agencies that organizepayment in the economy Commercial banks apply the most effective forms ofpayment to legal entities and natural persons
1.1.3 The role of commercial banks in the market economy.
The role of commercial banks is evident in the following areas:
1.1.3.1 Commercial banks provide timely capital for the economy
The timely and timely supply of capital is the most important factordetermining the success of the enterprise's production and business This is also
a favorable opportunity to promote the development of the economy
Trang 81.1.3.2 Commercial banks are dynamic intermediaries between businesses and the market.
As an institution that provides the most important capital to the economy,
as a bridge between money holders and people who need money, betweenbusinesses and markets, commercial banks are really considered as "midwives"for development, no of businesses but also of the economy
1.1.3.3 Commercial banks are the tools of macroeconomic regulation of the economy
In a unified economy managed by the Government, commercial banksmust comply with the monetary, credit and banking policies of the State.Therefore, with the economic development policy, in addition to capital fromthe state budget, the Government must use a significant amount of capital fromcommercial banks Investing in economic development with credit capital is astrategic solution Therefore, commercial banks must abide by the State'sguidelines From the reality of all economies, commercial banks are animportant tool of the State to promote economic development
1.2 COMPETITIVENESS AND SOME CRITERIA FOR ASSESSING COMPETITIVENESS OF COMMERCIAL BANK
1.2.1 General overview of competition and competitiveness of enterprises.
1.2.1.1 Some views on business competition.
i The concept of enterprise competition.
There are many definitions of competition However, the views andcontent of competition among entities in the market economy of economists aresimilar In view of the author of this thesis , the above concepts, although given
at different times, but the content, are generally consistent These concepts arestill used to study competition in the context of the current international marketintegration economy
However, to clarify the content and development of competition in thetrend of international economic integration, this thesis analyzes some contents ofthe development of competition in terms of market expansion and development
of enterprises in general and commercial banks in particular
ii Competitiveness
In the framework of this thesis, only limited research on economiccompetition of enterprises and in-depth study of competition among commercialbanks, focusing on Joint Stock Commercial Bank for Foreign Trade of Vietnam
To clarify the content of enterprise competitiveness, the thesis gives an overview
of the competitiveness of economic sectors, namely
- National competitiveness
Compiled from many different perspectives, according to the author, this thesis competes enterprises in terms of development and international
Trang 9integration, which can be understood as follows: Business competition is a competition between businesses that produce the same goods or provide a service in the same market with specific production and business secrets and superior management capacity and the ability to apply Science - Technology effectively to gain higher market share, with the goal of maximizing profits.
- International competitiveness.
Unlike national competition, international competition is a demonstration
of the nation's capacity in the international arena
iii Factors determining competitiveness.
- Assessment of national competitiveness.
So far, there are still many views on the factors that determine national competitive competence But there were some relatively unified opinions on 8 factors that play a decisive role for the national competitive competence, namely: (1) The degree of openness of the economy ; (2) The role of the Government ; (3) Finance ; (4) Science - Technology ( Science - Technology ) ; (5) Infrastructure ; (6) Administrative capacity value ; (7) Labor; (8) Institutions.
- Assessment of enterprise competitiveness.
To assess the competitiveness of enterprises need to consider and analyzethe basic elements of the object, then rank the competitiveness of this object.The elements of the object of interest, that is:
+ Field of Production - Business and the size of the business
+ Financial capacity, in which equity plays a crucial role
+ Management capacity
+ Scientific - technological capacity.
+ Quality of human resources
1.2.1.2 Development of economic competition
i Origin of competition
Human society, in the economy, among businesses also has similar
"struggle" processes But it is not a struggle to survive as in nature Which is
competing to survive and grow
ii Definition of competition.
Competition takes place in almost all areas: natural, economic, social sothe content of this terminology is wide and complex Therefore, in this thesis, it
is not possible to cover all fields, but only limits some basic contents ofeconomic competition Mostly competition between businesses, includingcommercial banks
Trang 10From the statement above, in view of the thesis , the competitive economy
can be understood as follows:
Economic competition is a competition between entities, using specific tools (tactics) to win the most profitable Production - Business conditions, in order to gain absolute market share, with the utmost goal of profit maximization
Economic competition has broader content than business competition.Along with economic development and market expansion, economiccompetition is also expanding, developing and increasing at a higher level
1.2.1.3 Classification of economic competition
Competition classification is a combination of several criteria that clarifythe scope, level and nature of enterprise competition In this thesis, only themost general content, without in-depth analysis of business ethics incompetition For the reasons mentioned above, enterprise competition isclassified according to the following criteria:
i According to economic sector.
This type of competition is divided into two categories, intra-industry competition and competition between industries.
ii.The level of competition
By level, or level of competition , competition is divided into two
categories: perfect competition and imperfect competition.
iii According to business ethics [ 4 4 ]
According to business ethics, competition in economics is divided
into two types: Legal competition and illegal competition.
iiii According to the market [ 4 5 ]
Compete in market or place of business Kind of competition is divided into two categories: competition within the national and international competition
1.2.1.4 Competitiveness of enterprises in the market economy
i Overview of Competitive capability of enterprises
Competitiveness of a business, is a combination of many differentfactors , or tactics Combined are the factors of "material and intellectual" Thesetwo elements are initially of equal value But in the development of competition,
"intelligence" has a superior value However, the author of this thesis thinks that the intellectual factor does not have a "universal" measure, so a visual comparison of "material" capacity will be a method of comparing and evaluating the Competitive capability of this thesis
ii Some basic criteria to assess enterprise competitiveness.
- Financial capacity.
Trang 11Financial capacity is expressed by the total value of assets, used in the business of the enterprise, in which equity plays a core role
- Scientific and technological capacity.
Scientific and technological capacity is the ability to apply the latestscientific and technological achievements to the production and business process
of a business at a given time
- Business administration capacity.
Corporate governance capacity is overall management solutions treatment, in order to achieve high efficiency in production - business The
operation of each business consists of many stages, connected by the system,from the beginning, until the product is completely consumed
- Quality of human resources
The quality of human resources is a combination of criteria showing the professional competence, job proficiency and productivity of each employee with assigned tasks.
1.2.2 Banking Competition and some criteria to evaluate the competitiveness of Commercial Banks.
1.2.2.1 Origin and form of competition among commercial banks.
i Origin of commercial banks competition.
Content competition among industries, in this thesis, the author mentioned
in section "1.2.1", so in this section, the author only mentioned competition
"within the banking industry"
ii Competitive development among commercial banks.
Competition among commercial banks, is a form of competition withinthe industry The objective of this type of competition is to find a high return,with limited time and amount of capital
iii Competitive forms of commercial banks
Commercial banks in the market economy development, although theinvestment field are not the same, but revolve around a fixed axis is monetary,credit and services bank The tactics that commercial banks implement are notthe same, but are aimed at increasing profits in a finite time with a limitedamount of investment The current form of competition among commercialbanks is:
- Competing interest rates.
- Expanding the operational network.
- Competition for service quality
1.2.2.2 Some criteria to evaluate the competitiveness of commercial banks
i Financial capacity.
Trang 12ii Scientific - technological capacity
iii Business administration capacity.
iv Quality of human resources
v Annual sales and profit after tax.
1.2.2.3 Meaning to improve the competitiveness and the downside of this process
1.2.2.3.1 Competition in commercial banking system
1.2.2.3.2 Competition among businesses in the economy
1.3 THE IMPACTS OF INTERNATIONAL INTEGRATION ON FINANCE - BANKING ON COMPETITIVENESS CAPACITY OF VIETNAMESE COMMERCIAL SYSTEM.
1.3.1 Basic content of International Integration on Banking - Finance
1.3.1.1 Overview of international economic integration.
Economic integration International are the agreements open markets for goods - service, uniform tariff, free movement of capital, banking services based on the principle of consensus, between two or more countries.
- Basic content of international economic integration.
International integration of Finance Bank as bargaining economy financial, under which a number of institutions, commercial banks of thecountry, is entitled to do business in the country in the other, on the principles of
-the agreement between states national and international
1.3.1.2 The meaning of international integration on Finance - Banking.
Firstly, international integration to the Bank is the basis for progressing to
financial integration
Secondly, international integration in Finance - Banking, on the basis of
large capital created, used dynamically, with a large "frequency", createdconditions for industry - trade to be eligible for development
Thirdly, international integration in Finance - Banking is the basis for the
domestic commercial banking system to access to international banks
1.3.1.3 Barriers in international integration
International economic integration with bilateral or multilateralagreements has been signed with high consensus, but not yet completelyfavorable in the implementation of the agreements
1.3.2 Vietnam's viewpoint in International Economic Integration [ 64 ]
The concept of international economic integration is consistent from theParty, the Government to the entire people, including businesses, entrepreneurs,intellectuals With the viewpoints and actions in recent years, Vietnam has
Trang 13achieved successes encouraging on the path of international economicintegration.
1.3.3 The impact of international integration on banking - finance on Vietnamese commercial banking system.
1.3.3.1 Contribute to innovating the economic thinking of Vietnam's banking system.
1.3.3.2 Orientation for business innovation and service in the commercial banking system.
1.3.3.3 Enhance the position of Vietnamese commercial banks in the international arena.
1.4 EXPERIENCES IN RAISING COMPETITIVENESS OF COMMERCIAL BANKS IN SOME COUNTRIES IN THE REGION 1.4.1 Business administration model of some commercial banks.
1.4.1.1 The China Construction Bank (CCB)
1.4.1.2 The Development Bank of Singapore Limited (DBS).
1.4.1.3 Experience of some Asian countries on reforming commercial banks
in terms of development and competition.
a/ Experience of Thailand on restructuring commercial bank system b/ Experience of Malaysia
c/ Restructuring the banking system in Korea
1.4.2 Experiences for VCB
Experience from Thailand, Malaysia and South Korea on the reform ofcommercial banking system, can give Vietnam some experience in managing itscommercial banking system
Chapter 2:
CURRENT SITUATION OF BUSINESS AND COMPETITIVENESS OF JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM IN CONDITIONS OF INTERNATIONAL INTEGRATION
ON FINANCE - BANKING
2.1 OVERVIEW OF THE FORMATION AND DEVELOPMENT OF VCB.
2.1.1 Construction and development process [ 72 ]
Joint Stock Commercial Bank for Foreign Trade of Vietnam - VCB, isone of four commercial banks in the top group of Vietnam - Agribank,Vietinbank, BIDV and VCB VCB is a reputable commercial bank Being acommercial bank known by many countries in the region and the world with
Trang 14reliable international business function, being a good partner of manycommercial banks in the world
2.1.2 Organizing committee.
- International transaction name JOINT STOCK COMMERCIAL BANKFOR FOREIGN TRADE OF VIETNAM
2.1.3 Functions and duties.
Tasks and functions of VCB's components are designed according to themodel of advanced commercial banks in the region and the World Components
in the organizational structure, approved by the State Bank of Vietnam , becomethe organizational structure today Duties and functions of the parts are clearly
defined Including: i General Meeting of Shareholders; ii Board of Directors (BOD); iii.Banning board.
Besides general organizational models mentioned above, vertical, VCBorganized civil apparatus model management reasons at the basis of main andeach detailed branch This organizational model, has been standardized by VCB
2.2 BUSINESS SITUATION OF VCB PERIOD 2014 - 2018
2.2.1 Credit business
Credit operations are divided into: capital mobilization and lending,investment In the period of 2014 - 2018, the business results of VCB's creditbusiness showed:
2.2.1.1 Capital raising operation
In the period of 2014 - 2018, the growth rate of VCB's mobilized capital,achieved positive results, according to [B2.3] comparison between yearsshowing the results of capital mobilization of VCB, the years always growing: