Increasing capital mobilization at joint stock commercial bank for investment and development of vietnam EAST hanoi brach

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH --- ĐỖ QUỲNH TRANG INCREASING CAPITAL MOBILIZATION AT JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM - EAST HA

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

-

ĐỖ QUỲNH TRANG

INCREASING CAPITAL MOBILIZATION AT JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT

OF VIETNAM - EAST HANOI BRACH

TĂNG CƯỜNG HUY ĐỘNG VỐN DÂN CƯ TẠI NGÂN HÀNG TMCP ĐẦU TƯ VÀ PHÁT TRIỂN VIỆT NAM - CHI NHÁNH ĐÔNG HÀ NỘI

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

HÀ NỘI - 2020

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

-

ĐỖ QUỲNH TRANG

INCREASING CAPITAL MOBILIZATION AT JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT

OF VIETNAM - EAST HANOI BRACH

TĂNG CƯỜNG HUY ĐỘNG VỐN DÂN CƯ TẠI NGÂN HÀNG TMCP ĐẦU TƯ VÀ PHÁT TRIỂN VIỆT NAM - CHI NHÁNH ĐÔNG HÀ NỘI

Chuyên ngành: Quản trị kinh doanh

Mã số: 60 34 01 02

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS.TS PHẠM THANH HÒA

HÀ NỘI - 2020

DECLARATION

The author confirms that the research outcome in the thesis is the result of author’s independent work during study and research period and it is not yet published in other’s research and article

The other’s research result and documentation (extraction, table, figure, formula, and other document) used in the thesis are cited properly and the permission (if required) is given

The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business and Management, and the laws for above-mentioned declaration

Date………

TABLE OF CONTENTS

DECLARATION i

TABLE OF CONTENTS ii

LIST OF TABLE v

LIST OF FIGURES vi

INTRODUCTION 2

CHAPTER 1: OVERVIEW OF MOBILIZING RESIDENTS’ CAPITAL ACTIVITIES OF COMMERCIAL BANKS 6

1.1 Overview of commercial banks 6

1.1.1 Commercial Bank 6

1.1.2 Operations of commercial banks 9

1.2 Mobilized capital of commercial banks 13

1.2.1 Concept of mobilized capital 13

1.2.2 The role of mobilized capital 13

1.2.3 Forms of capital mobilization 14

1.2.4 Capital mobilization policy 16

1.3 Mobilizing capital from residents 18

1.3.1 Characteristics 18

1.3.2 Role 19

1.3.3 Mobilization forms 19

1.3.4 Assessing activities of mobilizing residential capital of commercial banks22 1.3.5 Factors affecting the mobilization of residential capital of commercial banks 25

CHAPTER 2: ACTUAL SITUATION OF MOBILIZING RESIDENTAL CAPITAL ACTIVITIESAT VIETNAM JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT – EASTERN HANOI BRANCH 30

2.1 Overview of Vietnam Joint Stock Commercial Bank for Investment and Development - Eastern Hanoi Branch 30

2.1.1 Overview of Vietnam Joint Stock Commercial Bank for Investment and

Development - Eastern HanoiBranch 30

2.1.2 Business operation situation 34

2.2 Actual situation of mobilizing residents’ capital activities at BIDV – the Eastern Hanoi branch 41

2.2.1 Scale of mobilized capital 41

2.2.2 Structure of residential capital mobilization 45

2.2.3 Capital mobilizing activities in terms of criteria 59

2.2.4 Analysis of factors affecting the results of residents’ capital mobilization 66

2.3 Assessing activities of mobilizing residential capital at BIDV – the Eastern Hanoi branch 72

2.3.1 Achievements 72

2.3.2 Limitations 74

2.3.3 Reasons 76

Chapter 3: SOLUTIONS TO DEVELOP RESIDENTS’CAPITALMOBILIZATION ACTIVITIESAT BIDV-THE EASTERN HANOI BRANCH 80

3.1 Future orientation of mobilizing residential capital activities at BIDV – the Eastern Hanoi branch 80

3.1.1 General orientation for the development of BIDV – the Eastern Hanoi branch 80

3.1.2 BIDV's capital mobilization strategy 81

3.1.3 Orientation for mobilizing residential capital at BIDV - Eastern Hanoi branch 83

3.2 Solution to strengthen residential capital mobilizationBIDV – the Eastern Hanoi branch 84

3.2.1 Diversify mobilization forms and mobilized products 85

3.2.2 Solutions for flexible and competitive banking services 87

3.2.3 Innovative organizational and management solutions 91

3.2.4 Human resource solutions 92

3.2.5 Solutions to adapt to residential practices 93

3.2.6 Improve the quality of using mobilized capital 94

3.3 Bank’s recommendations 95

CONCLUSION 97

REFERENCES 99

APPENDIX 101

LIST OF TABLE

Table 2.1 Business operation of BIDV - the Eastern Hanoi branch in 2015 – 2018 35

Table 2.2 Capital mobilized results in BIDV – The Eastern Hanoi branch In the period of 2015 – 2018 38

Table 2.3 Other business of BIDV – the Eastern Hanoi branch 40

Table 2.4 Capital mobilized in scaleofBIDV – the Eastern Hanoi branch in 2015-2018 42

Table 2.5 Residents’ capital mobilized in scaleofBIDV – the Eastern Hanoi branch in 2015-2018 42

Table 2.6 Capital mobilized in currency in 2015 – 2018 45

Table 2.7 Residents’ capital mobilized in terms of maturity in 2015-2018 47

Table2.10 Average interest rate of some state-own banks in Vietnam in 2018 55

Table 2.11 Residents’ capital in terms of promotion saving forms in 2016-2018 56

Table 2.12 Residents’ capital in terms of valuable paper issuing form in 2015-2018 58

Table 2.13 Residents’ capital mobilization ratio of BIDV – The Eastern Hanoi Branch in 2016 – 2018 period 60

Table 2.14 Interest rate and cost for residents’ capital mobilization 61

Table 2.15 Residentials capital in mobilizing and credit 62

Table 2.16: Revenue – Expenditure differences of BIDV – The Eastern Hanoi Branchin 2015-2018 period 63

Table 2.4 Capital mobilized in scale ofBIDV – the Eastern Hanoi branch in 2015-2018 63

Table 2.17: Customer evaluation for customer management staff 66

Table 2.18: Deposit mobilization productsof banks in Dong Anh area 67

Table 2.19: Customer assessmentsabout mobilized productsof BIDV – the Eastern Hanoi branch 68

Table 2.20: Customer assessments about interest rate policy and transaction procedure at BIDV – the Eastern Hanoi branch 69

Table 2.21: Customers’ assessment about Marketing policy of BIDV – the Eastern Hanoi branch 70

LIST OF FIGURES

Figure 2.1: Organization chart of Eastern Hanoi branch 32

Graph 2.1 Annual resident’s capital mobilized in 2015– 2018 43

Graph 2.2 Capital mobilized in currency in 2015 – 2018 46

Graph 2.3 Annual residents’ capital mobilizes in 2015– 2018 48

Graph 2.4 Annual residents’ capital mobilizes in terms of form in 2015– 2018 50

Table 2.8 Residents’ capital in terms of mobilized forms in 2015-2018 52

Table 2.9 Capital mobilized in terms of currency 2016-2018 54

Graph 2.5 Annual residents’ capital mobilizes in terms of currency Incommon form (2016– 2018) 54

Thesis: “STRENGTHENING THERESIDENT’S CAPITAL MOBILIZATION

AT JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM (BIDV) -EASTERN HANOI

BRANCH” INTRODUCTION

1 Thesis’s necessaryRationale

Mobilizing capital is one of the main activities of commercial banks In recent years, along with the establishment of many domestic commercial banks as well as the appearance of foreign banks, capital mobilization has faced to a fierce competition Each commercial bank, based on its capabilities and conditions, has set

up its measures and solutions to implement capital mobilization Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) is one of the leading banks in commercial banking system of Vietnam Through 60 years of establishment and development, BIDV has affirmed its reputation in the market Bank for Investment and Development of Vietnam – the Eastern Hanoi Branch is one of branch in Hanoi accounting for a relatively large market share, especially in Dong Anh, Soc Son and suburban areas However, due to operation of many credit and financial institutions in the area, the competition has been getting fiercer Therefore, the mobilization of resident’s capital of the Branch has been faced with many difficulties which is negatively affecting to the Growth rate and market share

of the Eastern Hanoi Branch.Therefore, it is necessary to have a scientific, comprehensive, specific and profound research to find effective solutions to ensure that the Branch can attract capital from the residents, maintain and develop its market share in the locality, ensure business efficiency and implement its business plan This is a very urgent issue which is, in one hand, meeting the practical reality requirements of commercial banks,and in other hands, meeting the current issue in business operation of commercial bank Because of the above reasons, the issue of

"Strengthening the mobilization of residential capital at Joint Stock Commercial Bank for Investment and Development of Vietnam- Eastern Hanoi Branch" has been chosen as a topic of master's thesis specialized in Business Management

2 Research objectives and tasks

The objectives of this thesis is suggest some solutions to strenghen

mobilization of residential capital in the coming time

To reach the goals of research, the thesis solve some specific tasks as follows:

Firstly, systematizing the theoretical issues of residential capital

mobilizationof commercial banks

Secondly, analyzing the status of business operations; activities of

mobilizing residential capital of BIDV – Eastern Hanoi Branch, clarifying

achievements, shortcomings and reasons

Thirdly, proposing feasible solutions to strenthenresidential capital

mobilization in the coming time at BIDV – Eastern Hanoi Branch

3 Subjects and scope of research

3.1 Subjectof the research

The mobilizing residential’s capital activities of BIDV – Eastern Hanoi

Branch

3.2 Scope of the research

- In terms of time: 2015-2017 period, some targets were updated to 2018

- In terms of space: BIDV – Eastern Hanoi Branch

4 Research Methodology

* Data analysis method

- Comparison method by absolute numbers

This method is used to compare year-on-year data with previous year's

figures for volatility and find out the causes of fluctuations in those indicators to

make corrective measures

- Comparison method by relative number:

This method is used to clarify the level of volatility of economic indicators

Comparing the growth rates of year-on-year indicators to find out the causes and

remedies

* Visual method

- Tables: show the annual data on the tables

Formatted: Indent: First line: 0.39", Space

Before: 0 pt, After: 0 pt, Line spacing: 1.5 lines

Formatted: Indent: First line: 0.39", Space

Before: 0 pt, After: 0 pt, Line spacing: 1.5 lines

- Charts: vividly describe the situation of increasing and decreasing over the

years

* SWOT matrix analysis

- List strengths, weaknesses, opportunities and threats

- Combine strengths and opportunities to come up with strategies

- Define weaknesses and threats to propose solutions

- Set up opportunity assumptions to overcome or limit weaknesses

Data source is exploited from annual business performance reports of BIDV

– Eastern Hanoi Branch in 2015, 2016, 2017

5 Literature review

Residential capital mobilization is nota new topicthat has been reviewed by

many authors Previous studies had been studied on many different aspects, some of

them includes:

- "Solutions to increase capital mobilization from residents of Bank for

Investment and Development of Vietnam (BIDV) – Transaction Office 3" by Dang

Cong Ngoc, 2010

- "Solutions to strengthen the mobilization of residents’ capital of JSC Bank

for Foreign Trade of Vietnam - Transaction Offices" by Nguyen Thanh Mai, 2009

- “Some solutions to increase capital mobilization in current time of Vietnam

Bank for Agriculture and Rural Development (Agribank) - Hanoi branch" by

Nguyen Thanh Tung, 2009

- Master thesis: "Solution to mobilize residential capital at Vietnam Joint

Stock Commercial Bank for Investment and Development - Da Nang branch" by Do

Van Nhat, 2013

The above topics just analyzed capital mobilization activities and assessing

capital mobilization activities in separate aspects such as structure, scale of capital

mobilization or capital mobilization cost On that basis, some solutions to increase

capital mobilizationwere proposed However, those solutions had just met

requirements of capital mobilization revenue, but not satisfied the requirements

involved inanalysis and evaluation of effectiveness of capital mobilization

Comment [Office1]: Phầnnày em phải sơ lược

qua đượcnhững công trìnhnàycủahọđãlàmđượcgì, chưa làmđượcgìđểtừđó em mới đưa đếnkếtluậnlà công trìnhcủa em không bịtrùnglặpvới công trìnhcủahọ

activities Furthermore, there was no comprehensive and effective solutions to improve capital mobilization It is a fact that, previous solutions cannot be accepted

by the bank to meet the target of “the cheapest cost of capital - the highest profit” Besides, with specific features and different development strategies in specific period and stage, banks will have different directions and solutions to improve its operation It is currently similar to the situation of the Vietnam Bank for Investment and Development Bank –Eastern Hanoi Branch.Furthermore, there is a shortage of official research on the mobilization of residential capital of the branch

Therefore, I would like to choose the topic: “Strengthening the mobilization of residential capital at Joint Stock Commercial Bank for Investment and Development

of Vietnam- Eastern Hanoi Branch” as a theme for my master thesis

Chapter 3: Solutions to develop residential capital mobilization activities at Vietnam Joint Stock Commercial Bank for Investment and Development –Eastern Hanoi Branch

CHAPTER 1: OVERVIEW OF MOBILIZING RESIDENTS’ CAPITAL

ACTIVITIES OF COMMERCIAL BANKS

1.1 Overview of commercial banks

1.1.1 Commercial Bank

1.1.1.1 Concept of commercial bank

Commercial banks are banks that deal directly with companies, enterprises, economic organizations and individuals, by receiving deposits, savings, and using that capital to lend, discount, providing payment facilities and providing banking services to those subjects It wasdefined in the Banking Act of the Republic of

France (1941): "Commercial banks are institutions where careers regularly receive money from the public They are in the form of deposits, or in other forms, and use that money to lend, discount and make payment” According to regulations ofState Bank of Vietnam (SBV)(1990): “Commercial banks are a currency trading organization with regular operations and mainly receive customer deposits with the responsibility to repay and use that money to lend, to discount and to use as payment instrument”

According to the Law on Credit Institutions No 47/2010 / QH12 issued by

the National Assembly and passed on June 16, 2010, it was defined that: “The bank

is a type of credit institution that can be implemented all banking activities in accordance with this Law According to the nature and operational objectives, types of banks include commercial banks, policy banks, cooperative banks, "and" Commercial banks are all types of banks that are carried out all banking operations and other business activities under the provisions of this Law and aiming at profit target”

Thus, commercial banks are an extremely important intermediary financial institution in the economy Thanks to this intermediary financial institution system, capital sources are scattered, gathered in large numbers to provide loans for economic organizations and individuals to serve for the purpose ofsocio-economicdevelopment

Through the concepts and defines of commercial banks, it can be commented that:

 Commercial bank is a type of corporation, because it is established to do business and the purpose of itsoperation is for profit

 Operations of commercial banks include currency trading and banking services

 Besides structural similarities and final financial goals, commercial banks are different from other businesses Such as:

 Business scope: Banking business is money, credit, and banking services

 As a business, the main source of capital that the bank uses in business is capital mobilized from outside, while the bank's own capital accounts for a low proportion of total business capital

 Over the Bank's total assets, fixed assets and current assets account for a low proportion, in which financial assets accounts for significant proportion, including bonds, negotiable instruments, stocks,debt agreements and other valuable papers

 Business activities of commercial banks are under the control of the Central Bankor State Bank Commercial banks cannot expand business activities when the Central Bank is applying monetary tightening policies and limiting inflation and vice versa Therefore, the expanding or narrowing of a commercial bank isdominated by the Central Bank

In conclusion, it can be said that commercial bank is a combination between capital surplus subjects (individuals who have income but do not need to use; enterprises and organizations have just consumed products but have no need to import materials ) to capital deficit subjects

1.1.1.2 Commercial bank branch

To operate effectively and expand the operating market, any commercial bank has established its branches Each branchof commercial bank operates in a specific location that is responsible for attracting customers as well as providing banking services In order to be recognized as a branch of a commercial bank, it is

necessary for a bank to achieve a number of standards according to the specific requirements of each country in terms of scale of operation, number of employees, number of services provided The operations of commercial banks’ branchesare depending on requirements of head office,are under the control of head office and are accountedon head office’s account

The branch is a dependent unit of commercial bank, has its own recognition, carries out business activities in accordance with regulations of commercial banks

In Vietnam, to set up a new branch, there are some specific requirements:

- Safety ratios in banking operation withinrecent three years has been ensured as regulations of the State Bank;

- Information system met the requirements of online management of commercial banks; There are internal regulations on management of transaction offices and branches that ensure safe and effective operation in accordance with recent law

After one year from the date of opening, commercial banks can open transaction offices and branches if following conditions are satisfied:

- The businessresult in the previous year of application for opening new transaction offices and branches was positive; safety ratios in banking operations were ensured; debts were classified, risk provisions were sufficiently set up according to current regulations;

- Having an effective management, executive and internal audit systems;

- Having an internal inspection and control system according to the regulations of the State Bank;

- Having an information system satisfied the requirements of online management of commercial banks; strictly follow statistical reporting regimeof the State Bank;

- There are official internal regulations (in writing form) to manage transaction offices and branches to ensure safe and efficient operation in accordance with recent laws;

- Not being sanctioned by the Bank Inspectorate for a total of thirty million VND or more within one year up to the time of requesting for a new transaction office or branch;

1.1.2 Operations of commercial banks

Along with the formation history of commercial bank, current operation of commercial bank today is far different from that of early commercial banks in the past Due to business today requirements and fierce competition, the commercial banking system has expanded into many typesof financial institutions which providing utility banking services to customers.Althoughsome traditional operations are still inseparable from the operation of the bank, hereinafter we explore some types of services that banks provide for the economy

* Foreign exchange trading

One of the very first and typical services provided by banks is foreign exchange trading, whereby the bank buysseveral currencies in exchange for another currency Banks will receive fees and spread for this type of transaction Thisservice isvery important for international tourists when traveling in the host country Additionally, at the same time, commercial banks also carry out capital mobilization, foreign currency loans, and more importantly, international payment for international trade activities

*Deposits

As mentioned above, in order to have capital for business activities, commercial banks must mobilize from various subjects in the economy Commercial banksarepermitted to receive all deposits of residents, businesses, economic organizations and professional social organizations with appropriate interest rates announced Currently when customers come to send money, the bank will open an account to help customers conveniently transact and check

* Lending

Lending is the main income-generating activity for commercial banks in developing countries (while in developed countries, the main income comes from service fees), there are now some types of loans, including:

- Commercial lending and commercial paper discount: This transaction was appeared right from the beginning of the bank's establishment Commercial banks discount commercial paper, which is to lend to local businesses After the lending, those business would sell their debts (receivables) to banks to get cash It is a transition from discounting to direct lending to customersto help them access capital

to purchase stockpiles or build offices orprocure production equipment

- Consumer lending: In the history of banks’ formation and development, most commercial banks did not actively lend to individuals and households because they believe that, on the one hand, consumer loans were generally small and, in another hand,there was a relatively high risk of default.Therefore, this type of loan became low-profit However, in the early twentieth century, banks began to rely more on customer deposits to finance large commercial loans Otherwise, fierce competition in deposits and loans has forced banks to target consumers as loyal and potential customers Many major commercial banks in the world today have established a strong consumer credit department

- Financing and co-financing: Banks are becoming increasingly active in funding and co-financing for new plans with high cost constructions, especially in high-tech,large-scale industriesand long-timeoperation

* Preserving valuables

This is a medieval business when the bank was still in its primitive form, and banks preserved valuables of customers in their warehouses One interesting thing is that these valuable papers, such as bank-issued certificates for customers (recorded

on the asset being kept), can be circulated like money - this is the first form of check and card payment Today, preservation service is often carried out by a specific department of bank, namely "preservation department"

* Trading through accounts and payments

When businesses set up deposits, they find that banks not only preserve but also make payment orders on behalf of customers Payment via bank has been considered as a form of non-cash payment That means, itis not necessary for depositors to go to a bank with cash withdrawal,but a payment request instead to

pay to the bank In another way, customers may bring documents (Check, signed by other customers) to the bank to receive money The provision of this payment service has played an important role in saving transaction time for both banks and customers, reducing costs.Especially banks will expand their network to meet the customers’ demandquickly and conveniently Thereby banks would encourage businesses, individuals to deposit into banks and use the services provided by the bank Therefore, a new and important service is developed that is the deposit account (demand deposit), which helps depositors write checks, authorize payments

to pay for the purchase of goods and services The introduction of this type of service is seen as one of the most important steps in the banking industry

* Management of funds

With the function of the treasurer of businesses and many other individuals

in the economy, banks will open accounts and keep money for them It in turn will tightly encourage the relationship between banks and customers Additionally, commercial bank is very experienced in budget managing, so they have provided the services of managing and agreeing to manage the revenue and expenditure for the customers especially for the enterprises and using the temporary cash surplus to the purpose of the bank until the customer needs to withdraw money or pay

* Sponsoring Government activities

This is one of the many types of banking operations applied, because the banking industry's activities are directly related to the overall picture of the economy's operation Therefore, since the establishment of the bank, Sponsoring Government activities have been subject to direct or indirect management and regulation of the Government Normally, banks must commit to buy a certain amount of government bonds on the total amount of money it mobilizes Banks pledge to lend to the Government, or to finance government projects and programs

in necessary cases

* Leasing

In order to sell equipment and machinery, especially high-value equipment, many manufacturers and traders have leased (instead of sold) devices At the end of

the lease, the customer can proceed to renew the lease, or redeem (if the contract is

a lease) With its strong financial potential, commercial banks also have the right to choose the necessary equipment and machinery to rent equipment and machinery through a lease or hire purchase contract, in which the bank purchases equipment and machineryfor rented customers, with commitments made by the parties Normally, customers must commit to pay two-thirds of the rental property value Thus, in fact, this is a form of lending made by banks for customersIt is often classified into medium and long-term credit

* Providing trust services and consulting

Because the bank's operations are mainly in the financial and monetary field, the bank often focuses on investment portfolios as experts When individuals, organizations, and businesses request, the bank conducts investment advices, financial managements, establishment/separation of enterprises, and securities trading At the same time, the bank also manages customer assets, and in many cases, the bank also provides trust services for customers such as investment entrustments, entrusted issuances, entrusting loans to households

* Providing brokerage and securities investment services

Due to the demands of competition in the economy, commercial banks are increasingly interested in providing as much service to customers as possible Currently most commercial banks offer securities trading services, providing customers with the opportunity to buy stocks, bonds and other securities without resorting to stock traders Many banks now have established securities companies and securities brokerage companies

* Provide insurance services

In recent years, banks have sold insurance to customers (mainly deposit insurance, or credit insurance), which ensures the ability of customers to return to banks when not sewing customers at risk of affecting health, health or risks in production and business activities

* Provide agency services

Due to many objective and subjective factors, some banks have no conditions to open a Branch, or regional representative office at other related countries Large commercial banks provide correspondent banking services for other banks, household payment agents, issuing agents of deposit certificates, and a leading bank for co-sponsors In addition, some commercial banks also provide other services such as retirement services, support fund services and subsidies This shows the trend of expanding activities of banks, diversifying banking services

1.2 Mobilized capital of commercial banks

1.2.1 Concept of mobilized capital

Mobilized capital of commercial banks is the monetary value mobilized by commercial banks in the market through deposits, loans and other capital sources Parts of mobilized capital make sense to decide the ability of each commercial bank

to operate

In this research, the financial resources mobilizing from the community is defined as the total amount of financial contribution from individuals, households, and enterprises

1.2.2 The role of mobilized capital

Determining the solvency of commercialbank:

The higher the bank's solvency, the greater the bank's available capital Therefore, excluding other factors, the bank's solvency is directly proportional to the bank's capital in general and with the bank's available capital also With great capital potential, the bank can operate with an expanding business scale, effectively carry out competitive activities to keep the prestige and enhance the bank's position

Determining the scale of credit operations and other business activities of commercial bank:

The bank's capital is crucial factor decide to expand or narrow the volume of credit Normally, small banks have a range of business activities, investment items, low lending volume and less diversity Therefore, affecting the ability to attract capital of economic organizations and people, not even meeting the demand for

loans of enterprises They will lose customers and not take advantage of business opportunities If banks become bigger, they would have abundant capital, and therefore surely meet the demand for capital and conditions to expand credit relations with many businesses and credit markets

Determines the competitiveness of banks

It has been proven thatscale, professional qualifications and technical facilities of a bank are the premise factors for attracting capital At the same time, a larger capital capacity is a favorable condition for banks to expand credit relations with economic sectors in terms of size and volume; proactive in terms of time and duration for borrowing, even deciding a reasonable interest rate for customers Furthermore, large banks' capital will create favorable conditions for the combined use of other capital sources On that basis, it will help the bank have enough financial capacity to do multi-purpose business in the market, not only to lend but also to expand forms of joint venture, business of leasing services (leasing), buying and selling debt (factoring), trading in stock market

1.2.3 Forms of capital mobilization

The forms of capital mobilization applied by commercial banking systems often include:

In terms of capital mobilization object

- Mobilizing capital from residents: commercial banks mobilize idle funds in the population (residents), through savings, payment, entrustment to the investment banks However, deposits in the population always account for a significant and primary proportion of commercial banks This source is featured byhighly stable; mainly medium and long term;low transaction costs (in relative numbers); high stabilitycustomers; low volatility Furthermore, it is very convenient for commercial bank to plan in both operation policies and capital mobilization policies

- Mobilize capital from enterprises: Social organizations, professional social organizationsdo not often deposit money into banks for the purpose of saving but for the purpose of daily performance Base on business cycles of enterprises, banks recommend or encourage enterprises and organizations to deposit according to

specific instruments and agreements between both parties as well as the current provisions of law Some state-owned enterprises (SOE) are not allowed to deposit, they send this type of capital in the form of a entrusted investment

- Mobilizing capital from credit institutions: Mobilizing from the inter-bank market and other credit institutions, only applicable in case of temporary commercial bank shortages in payment for customers, or in case the bank lacks reserve according to the regulations of the State Bank or to meet force majeure circumstances The proportion of this source is often low, the stability is not high, the interest rate is often high, so commercial banks are very limited in using this source

For deposit purposes

- Savings deposits: This activity gives the bank a main capital source in total operating capital Through the actual situation of the bank, economic development indicators, current capital demand and forecast in the future, which commercial banks have reasonable, normal capital mobilization policies is an interest rate tool to attract customers' attention, thereby attracting customers to deposit money into banks with different objectives, depending on the needs of depositors and the portfolio providedby banks

- Performance deposits: This deposit is referred to deposit for current paying

of customers This source mainly serves the needs of regular payment or daily consumption of the bank's customers This is not stable, but commercial banks can use some proportions of this source according to its purpose and reasonable calculation of the law and fluctuations of this type of deposit

- Entrusted investment deposit: Many customers (both individuals and organizations) of the bank have a large amount of money in their hands Customers

do not have time to invest, or they lack information However, they still want to make interest from their capital instead of low saving interest rate They entrust investment banks under the agreements Additionally, there are businesses that are not allowed to deposit their savings into banks, so they turn their positions in the form of investment trust

1.2.4 Capital mobilization policy

- Policy to attract customers

Any bank would pay attention in this policy, because, it includes all the content related to the operation and business of the bank The success or failure of a bank is determined by the ability to attract customers However, here we only study the scope of capital mobilization policies of commercial banks only As stated before, the policy of commercial bank mobilization at each time has different changes, it depends directly on the socio-economic context, capital and actual needs

of the bank as the beginning of the year, the middle of the year, the end of the year,

or the seasonality of the bank's industry

- Interest rate policy

Interest is understood as the price of the right to use the loan for a certain period that the user pays to its owner Thus, interest rates are directly related to the sources of money mobilized by commercial banks

In the history of banking industry, interest rate instrument is always considered as a factor contributing to the creation of capital for banks through mobilization from the economy Although at different periods of time, the interest rate offered by banks is different but still ensure to be attractive factors enough for customers, both retaining traditional customers and seeking new customers at the same time

- Policy to expand network by branches

Expanding the network not only helps banks improve capital mobilization, but also meets performance goals set by the bank Although today, the bank's utility services have been adopted by many banks, but it is still important for banks to expand its network That creates a sense of security for customers coming to the bank In addition to expanding the network, strategic decision makers cannot ignore the geographical position, serving the branches and transaction offices for their banks A branch located in a densely populated area, urban area and industrial zone will be an ideal environment for all activities of the bank and especially the capital mobilization of the bank In contrast, in areas where economic and social

development capacity is limited, banks will not ignore it, but sometimes the bank must accept loss-making business to gradually create a relationship in expanding the market

- Policies on expanding relations with credit institutions, commercial banks, individuals and social organizations

The relationship with these organizations helps commercial banks set up strategic plans Especially, direct relationship with organizations, individuals, businesses will help commercial banks in predicting cash flow More importantly, because of close relationship, the bank will have reasonable priorities to encourage customers

- Marketing policy

Marketing is understood as a system of strategies, program measures, operational plans, to influence entire process of providing banking services to satisfy the target customers Theoretically, marketing activities cover almost contents related to the performance of commercial banks, including the operation of the capital mobilization policy Through understanding and considering factors of micro and macro-economic environment, marketing planners will offer the most appropriate program accordingly Marketing policies include the impact of many factors such as: method of valuation (determination of interest rates), product policies (providing services that banks can afford), distribution policies, promotion policies - communication,

- Policy to support customers

This is an activity in which the bank will support and advise customers on issues related to the financial-monetary-banking sector and more importantly, help customers get the portfolio target, and select the types of services that the bank provides Through this business, the bank will help customers understand the effect

of not using cash in circulation and the effect of depositing money and assets in banks rather than storing themselves

- Policy to take care customers

The operation of this policy helps the bank strengthen its relationships with customers, and at the same time, can expand the scope of activities Because customer in general wants to be highly respected and wants to be interested in by others Therefore, this policy helps banks strengthen the mutual relationship between banks and customers It is necessary for a bank to combine all policies to achieveitsown goals, and most importantly, it is very important for a commercial bank to pay attention and take care for customers

1.3 Mobilizing capital from residents

1.3.1 Characteristics

Capital mobilization from residents’ accounts for a small proportion of commercial banks' capital, but it is an annual growth target of commercial banks Therefore, commercial banks often find solutions to maintain and attract capital mobilized from residents

Large scale of residents’ deposit: Mobilization from the population is the temporary idle mobilization in society that is stored by the people as a savings to recover for future demand Because the population is the most crowded object in the economy, capital from this object will create a large-scale capital source for commercial banks From banks’ perspective, these are the sources that banks organize to mobilize from residents to re-invest, so the cost of capital mobilized from residents will create a great impact on the overall mobilization cost of the total funds This cost is considered as one of the most important criteria for commercial banks to determine lending interest rates

Residential deposits are the most stable source: This is the basis for commercial banks to determine reserve ratios and lending rates.Due to the continuous movement of cash flow in the economy, mobilized capital from other credit institutions and socio-economic organizations are often unstable Moreover, equity has a very high cost of ownership, so it is not effective for banks to set up lend Meanwhile, capital mobilized from residents has a stable nature When depositing money in commercial banks, purpose of residents normally is to

accumulate to a higher amount of money in the future, so the bank has a plan and can forecast its rise and fall time

Capital mobilized from the population is a relatively long-term capital, which

is a premise for commercial banks to provide medium and long-term loans this is regulated by the cumulative behavior of people when sending money or lending to commercial banks Other sources, such as borrowing from the State Bank and socio-economic organizations, are short-term due to the frequent use of these organizations' capital

1.3.2 Role

For society: Mobilizing residential deposits increase savings and reduce spending, create jobs for workers, increase production and business, save issuance costs and cash circulation for the society

For residents: Increasing income for the people through interest income, difference in buying and selling valuable papers, income from gifts from the form of savings

For commercial banks: increase the capital of commercial banks, like a buffer for business activities of banks, residents are not only the object of commercial banks but also customers of commercial banks, thereby business of commercial banks becomes effective

1.3.3 Mobilization forms

1.3.3.1 Savings

Savings deposit is an amount of money deposited into a savings account, certified on a savings card, and entitled to interest in accordance with the regulations of the savings organization and insured in accordance with the provisions of law on deposit insurance Savings are reserved for individuals for future consumption purposes but are temporarily deposited in banks to earn interest This is an important capital source of the bank to serve mainly lending of all economic sectors The main purpose of the savings deposit is not to use in the transaction but to earn interest through the accumulated amounts

Savings deposits are categorized according to different terms:time-deposit account and demand-deposit account

Time-deposit

Time deposit account is a type of non-term savings deposit that customers send to banks without an agreement about the time of withdrawal.Customers can deposit or withdraw at any time They also can withdraw some or all of savings according to their requirements However, unlike personal accounts, senders are not entitled to bank payment services Mostofnon-term savings customers do not identify specific spending needs in the future, but they want to enjoy an interest rate during the maturity Although time-deposits are not considered as long-term capital sources, they are considered ascheap, relatively stable sources of capital Therefore, banks just use them for a longer term at a certain level Banks often pay higher interest rates for this type of depositthan that ofpayment deposits

The most disadvantage oftime-deposits are the volatility.Therefore the bank cannot use all this savings for its programs

Term savings deposit (demand-deposit accounts)

This is the type of saving in a bank based on an agreement on term, interest rate, payment method, etc For this type of deposit, the client is only withdrawn when it is due In fact, the bank can still respond if the customer needs to withdraw money before the maturity date with low interest rates (usually at the interest rate of demand deposits) or even no interest For banks, this is a stable source of capital for credit activities With this type of savings, the main purpose of the sender is profitability, so the interest rate issue is an important issue In order to serve the different needs of customers as well as their capital needs, the bank can apply regular term savings deposits (depositors only receive interest in each period) Furthermore, it is possible to apply bonus savings with interest to encourage people

to deposit their savings into the bank Banks also apply different savings deposit term to senders to choose the most suitable option for them (1month, 3 months, 6 months .) For each differentterm, the banks usually apply different interest rates and always ensures that: the longer the termis, the higher the interest rateis In

addition, classification can be based on type of currency: local currency and foreign currency savings deposits

Savings deposit in local currency

The bank mobilizes savings deposits in Vietnam Dong through various forms

of mobilization for many purposes To commercial banks in Vietnam, mobilized deposits in VND accounts for high proportion, meeting the demand for bank's capital use

Savings deposits in foreign currencies

Besides mobilizing savings deposits in VND, the bank also mobilizes savings deposits in foreign currencies The amount of savings in foreign currency converted into VND also accounts for a large proportion in the bank's operations The purpose of mobilizing foreign currency deposits of banks to meet international payment needs as well as foreign currency trading activities of customers and banks Currently, the bank's savings in foreign currencies are mainly USD or EUR

1.3.3.2 Personal account

Commercial banks can mobilize residential deposits in the form of personal accounts for payment purpose Personal payment account is the type of account that the user has full rights to use within the balance as a customer can withdraw money

at the counter or at an automated teller machine Personal payment account can be used to make payment via Bank The customer must comply with the bank's regulations and instructions during the payment process, and the bank must perform the liquidity as requested by the customer and will only be denied when the payment amount exceeds the current balance or illegal documents Deposits from customers via personal accounts are a source of funds that banks can get at low cost because depositors are willing to ignore some of the interest to obtain a liquid asset for easy use in payment Personal accounts create a premise for expanding payment operations through banks, reducing the widespread use of cash in the economy From this activity, the bank will collect fees and change its revenue structure, diversify banking services However, there are also disadvantages arising from the use of this fund because of its low stability, completely dependent on business

characteristics as well as customer credit Therefore, banks are less active in using

this capital

1.3.4 Assessing activities of mobilizing residential capital of commercial banks

1.3.4.1 Quantitative goals

As mentioned in the above contents, we know that the capital mobilized from

the population always accounts for a large proportion of the total mobilized capital

of commercial banks and this is a relatively stable source of money Therefore,

capital mobilized from the population is a major source of capital used by banks for

lending and other investment activities to make a profit Thus, the mobilization of

residential capital will directly affect the business performance of the bank

Therefore, banks always focus on controlling the amount of capital mobilized from

the population

In order to do this, banks need to identify the specific needs of capital

mobilization from residents and clear and detailed implementation plans If the

capital is too small, banks are forced to mobilize more from other sources at higher

costs and less stable Conversely, if the mobilized capital is too large and the bank is

unable to lend, then the bank still must pay the full interest to the customer while

not having interest income Therefore, if the bank cannot determine the exact size of

mobilized capital, the bank's capital mobilization efficiency will be negatively

affected When determining the specific and accurate mobilization scale,

commercial banks will be easier to implement specific capital mobilization

programs and products

Therefore, the efficiency of mobilizing capital from the population will be

assessed through the following criteria:

Rate of completing capital mobilization plan:

Completed capital

mobilization ratio =

Actual mobilized capital

Expected mobilized capital

*100% (1)

If (1)> 100%, that means that, in fact, the bank has mobilized beyond the original expected level When banks do not lend capital, the efficiency of bank mobilization will be reduced This difference increases the cost of capital mobilization because banks still must pay interest to customers while the bank does not make any profit from mobilized capital (1) The greater than 100% the (1) is, the less effective the mobilization of capital from banks is

If (1) <100%, that means, the capital that the bank has mobilized capital is not enough for the target In order to meet the demand for capital for credit or other investment, the bank must mobilize additional funds from other sources such as mobilized capital from other financial and credit institutions, bank loans State Thus, banks will incur higher mobilization costs, and at the same time, the bank loses the opportunity to increase income due to not having enough loans This has a negative impact on the profitability of commercial banks

The ratio of capital mobilized from the population to the total mobilized capital of the whole bank

Capital mobilized from

residentsout of total mobilized

capital of the whole bank

= Total mobilized capital from residents

Total capital mobilization of the whole bank This ratio should be carefully considered because the mobilized capital from the population always accounts for a large proportion of the total mobilized capital

of the bank The capital mobilized from this source as well as the cost to mobilizing create a huge impact on the total capital mobilization of the bank Depending on the strategy and plan of each manager, this ratio will be adjusted so that it is reasonable and suitable to the different business cycles of the bank

Mobilization cost/Mobilized capital scale: Because the cost of mobilization includes interest payment and non-interest expenses, we can divide this ratio into the following two ones:

+ Interest payment / mobilization capital scale: This indicator indicates how much an average bank must pay to customers per a unit of mobilized capital

+ Non-interest expenses / mobilized capital scale: This indicator indicates how much the bank must pay for management, advertising and marketing activities per a unit of mobilized capital

Capital mobilization is effective if the mobilization cost / mobilization scale

is at the lowest level possible To do this, commercial banks need to determine reasonable interest rates to increase costs but not too low to attract customers and ensure competitiveness, and to minimize other interest expenses

Average deposit savings per capita: This indicator assesses the level of

mobilization from residents

Average deposit savings per

to serve the cause of economic development

1.3.4.2 Qualitative criteria

In addition to the above quantitative criteria, the mobilization of capital from residents is also assessed through qualitative criteria

Stability of capital mobilized from residents

One of them is the stability of mobilized capital Stability in mobilized capital is understood as the size of mobilized capital without sudden changes in short time periods When mobilizing capital from the population, the bank can estimate the time it is possible to use that capital for its business activities Because the term deposits usually account for a high proportion of the total mobilized capital from the population, the bank's capital mobilization is only effective when the bank's time is expected to be used using measured capital sources for the purpose

of your business Mobilized capital sources are highly stable and do not change abruptly For example, there is no simultaneous withdrawal of customer deposits, causing insolvency as well as a large decrease in total deposits of banks

Stability of mobilized capital structure

In addition to assessing the stability in mobilized capital, banks' capital mobilization efficiency is also considered by the structure of mobilized capital in currencies, by term or by capital mobilization form

The mobilization of banks' capital is effective if the capital structure does not fluctuate too much between currencies, maturities or between different forms of mobilization in a short time Besides, if the mobilized capital structure is too volatile, the bank's plan to use capital will be changed Since then, the bank's business results will not be guaranteed, leading to a decrease in mobilization efficiency

1.3.5 Factors affecting the mobilization of residential capital of commercial banks

All business activities are subject to certain impacts of the surrounding environment The mobilization of residential capital, a leading important business

of commercial banks is not outside of that rule In the market mechanism, commercial banks are forced to compete to attract large capital at low cost to survive and develop Therefore, it is necessary to study the influencing factors and find solutions to improve capital mobilization Factors affecting mobilization are inherent and varied, but there are two groups of factors: objective and subjective

1.3.5.1 Objective factor

- Economic development cycle: In the condition of stable and stable

economic development, people's income is guaranteed and stable, the demand of population accumulation is higher, from which the amount of deposits banks increase or the ability to mobilize residential capital increases On the other hand, when the economy grows high and stable, the demand for capital increases The bank can expand credit by raising deposit rates to stimulate people to deposit money into banks Therefore, banks can create capital to meet the demand for credit for the economy In contrast, when the economy falls into recession, the real income of workers decreases, reducing consumer confidence in the stability of the currency

At the same time, when the income is low, the amount of idle money in the whole economy will decrease, making the amount of money deposited into the banking

system at risk of being withdrawn At that time, the bank will face difficulties in capital mobilization

- Legal environment: All business activities, in which the bank's operations

are subject to the legal system The activities of commercial banks are subject to the Law on Credit Institutions and the system of other legal documents of the state Commercial banks must comply with the regulations issued by the State Bank in each period on interest rates, reserves, lending limits In the binding of laws, the elements of the capital mobilization operation change will change the scale and quality of capital mobilization activities On the other hand, commercial banks are enterprises operating in the monetary field, which is a very risky field, so banks must strictly comply with the provisions of law

- Competitive environment: The financial market is becoming more and more

active due to the participation of various types of banks and non-bank financial institutions Currently, the number of banks is increasing, along with the strong development and developmentof many non-bank organizations Meanwhile, idle capital in the population and economic organizations is limited Therefore, the monopoly of the banking system declined and affected the bank's operational efficiency Banks mainly compete in the form of interest rates and services Therefore, the bank must build the most reasonable and attractive interest rate combined with its reputation and prestige to gain market share

- Environment - society: The life and income of the people are the direct

factors that determine the amount of money deposited into the bank Indeed, the higher the income of a worker, the greater the capital mobilized into the bank Because, the need to accumulate people will tend to increase when income increases This accumulated amount will be used to satisfy higher demand in the future

Psychology and consumption habits of the people are also social factors affecting the bank's capital mobilization In developed countries, the demand for non-cash payment via banks is very developed Meanwhile, in the underdeveloped countries, the preference for cash and the accumulation of money not deposited in

the bank is quite common In addition, psychology and consumption habits are very different between ethnic groups and regions Therefore, rapid development of non-cash forms is important in mobilizing capital from banks

- Technology: When banks increase the application of high technology, the

ability to raise capital is increased also The reason is that technology helps the bank increase the ability to access to customers and reduce the processing time Currently, commercial banks in Vietnam have introduced ATM machines to the market for customers to use, therefore, customers can withdraw money anytime, anywhere

1.3.5.2 Subjective factor

Interest rate policy:

Interest rate is an important factor, which creates a significant impact on the capital mobilization of commercial banks, especially for the capital that the senders

or people invest in banks for the purpose of interest.Interest rate isa factor that banks use to compete with other banks and the money market Therefore, only a small difference in interest rates can push capital flows in the population to invest in different directions That is also the reason and motivation for investors or depositors to transfer capital from one bank to another Therefore, determining a reasonable and competitive interest rate is an extremely important issue, must be studied, considered, meticulous and comprehensive However, banks must calculate

so that interest rates are both competitive and must ensure the lowest input costs and profitable business

Business strategy of the bank:

Business strategy is another factor that directly and indirectly affects capital mobilization When a bank has the right business strategy, it will achieve the set objectives of cost as well as profit The bank's strategies will involve service products, price strategies, interest rates, distribution strategies, personnel development strategy, etc., have a strong impact on capital mobilization The Bank's business strategy system is a realistic practice to assess the bank's capability and management of business operations Reasonable strategy will create trust for

customers, so the bank attracts more and more customers In terms of customer strategy, banks should classify customers by groups that have appropriate policies for each type of customer

Prestige and position of the bank:

Normally, customers choose reputable banks and market position to trade, borrow, pay and guarantee The prestige and position of the bank has an important meaning in the selection of customers, expressed specifically in financial capacity, business performance, history, marketing quality .Therefore, banks adopt the quality of their operations (service quality, modern technology and civilized and polite working style) will best satisfy all customer requirements This is considered a practical strategy to improve reputation and position in the market

Forms of capital mobilization and services:

In the competitive conditions of the commercial banking system, the diversification of banking products and services to meet customers' needs has a great impact on the bank's business operations With many different types of products, customers can choose a product that fits their ability conditions Thus, commercial banks can attract more and more customers Moreover, the bank has to offer good and diversified services to increase its competitive advantage By offering more and more utilities, banks can attract more and more capital from all economic sectors and people in society Thereby, commercial banks would create more close relationships between banks and customers

Business network of the bank:

Organizing a wide and reasonable network in the residential area helps the bank have more opportunities to attract more capital, helping customers save time and costs to carry out transactions However, the opening of the branch should be in accordance with the conditions of the bank's capacity Location factors also affect customer psychology A convenient location such as central area, densely populated area, convenient transportation helps banks attract more customers It can be said that all customers want to deal with banks with beautiful locations, modern facilities, dedicated and polite staff A bank equipped with modern technology will

shorten the processing time, ensuring high accuracy in economic transactions Moreover, modern facilities, technology level, staff with high professional qualifications are necessary conditions for them to solve their work quickly and effectively Therefore, improve more quality of banking services provided to the market This is what customers are very interested in

CHAPTER 2:

ACTUAL SITUATION OF MOBILIZING RESIDENTAL CAPITAL ACTIVITIESAT VIETNAM JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT – EASTERN HANOI BRANCH

2.1 Overview of Vietnam Joint Stock Commercial Bank for Investment and Development - Eastern Hanoi Branch

2.1.1 Overview of Vietnam Joint Stock Commercial Bank for Investment and Development - Eastern HanoiBranch

BIDV was founded on 26 April 1957 under the initial name of Bank for Construction of Vietnam, then renamed Bank for Investment and Construction of Vietnam (1981 - 1990), Bank for Investment and Development of Vietnam (1990 - 2012), and Joint Stock Commercial Bank for Investment and Development of Vietnam (since 2012)

Joint Stock Commercial Bank for Investment and Development of Vietnam - Eastern HanoiBranch is a branch of Vietnam Joint Stock Commercial Bank for Investment and Development, established in 1967 with the name of Dong Anh Branch 4 The Dong Anh Branch 4was initially a branch of Hanoi Construction Bank (old), with only 10 employees at the beginning

The function of the branch was to carry out the allocation and lending management of works within the two districts of Hanoi: Dong Anh and Soc Son In

1983, it was split into Dong Anh Investment and Construction Department and Soc Son Bank Branch In 1987, it became the Dong Anh Investment and Construction Bank Branch Until 1990, the branch changed its name to Dong Anh Bank for Investment and Development and was the second level branch directly under the Bank for Investment and Development of Hanoi The branch is responsible for carrying out activities in the field of currency, credit and banking services with basic operations, including receiving deposits, granting credits and providing payment services

On November 28th, 2008, with the approval of BIDV Vietnam, Dong Anh Branch changed its name to Eastern Hanoi branch – a branch ofInvestment and

Development Bank under the decision of no.983/QD-HĐQT This had affirmed the broader operation and its new position in the area

On May 1st, 2012, the Board of Directors of Vietnam Joint Stock Commercial Bank for Investment and Development issued the Decision No 30/QD-HDQT on the establishment of branches and transactions under Vietnam Joint Stock Commercial Bank for Investment and Development Accordingly, Vietnam Bank for Investment and Development –Eastern Hanoi branch became Vietnam Joint Stock Commercial Bank for Investment and Development - Eastern Hanoi branch and hasofficially operated in the form of Joint Stock Commercial Bank under the registration certificate code 0100150619086 registered for the fifth change on August 16, 2012

Field of business activities

Vietnam Joint Stock Commercial Bank for Investment & Development –Eastern Hanoi Branch is an active branch of BIDV Bank in the eastern area of Hanoi, this is a state-owned enterprise and functions as a commercial bank with following services:

• Card services: ATM cards, international credit cards

• Overseas remittance service

• Savings, deposits of economic organizations

• Insurance: Property insurance, damage insurance, construction and installation insurance, fire and explosion insurance, motor vehicle insurance with

a large scope of operation and reasonable cost

• Foreign currency trading

Organizational structure:

According to Decision No 3166 / QD-BIDV dated November 30th, 2016 of the Board of Directors of Vietnam Joint Stock Commercial Bank for Investment and Development on approving the organization model of the Branch and promulgating regulations on main functions and tasks of Departments / Divisions, Transaction Offices, Branch At the request of Eastern Hanoi Branch, approving the organizational apparatus of Eastern Hanoi Branchincludes departmentsas illustrated

in Figure 2.1:

Figure 2.1: Organization chart of Eastern Hanoi branch

The organizational structure of Eastern Hanoi Branch includes departments with the main tasks:

Corporate Department 3 Personal Department Corporation Transaction Office Personal Transaction Office Treasury & Service Department

Financial Department

Integrated Planning Department

Credit management Department Risk management Department

Phu Lo Transaction Office Lien Ha Transaction Office

Duc Tu Transaction Office Soc Son Transaction Office