Developing retail credit at vietnam joint stock commercial bank for industry and trade ha tinh branch

MASTER OF FINANCE – BANKING – INSURANCE Southeast Asia 2016 - 2018 DEVELOPING RETAIL CREDIT AT VIETNAM JOINT STOCK COMMERCIAL BANK FOR INDUSTRY AND TRADE – HA TINH BRANCH TRUONG THUY C

MASTER OF FINANCE – BANKING – INSURANCE

(Southeast Asia)

2016 - 2018

DEVELOPING RETAIL CREDIT AT VIETNAM JOINT STOCK COMMERCIAL

BANK FOR INDUSTRY AND TRADE – HA TINH BRANCH

TRUONG THUY CHUNG

Advisor: Assoc Prof., Ph.D Nguyen Van Dinh

Hanoi, 2018

I would also like to thanks the BOM & staff of Vietinbank Ha Tinh for providing the data of the company

CONTENTS

ACKNOWLEDGMENTS i

LIST OF TABLES AND FIGURES iv

INTRODUCTION 1

CHAPTER 1: LITERATURE REVIEW AND THEORETICAL BACKGROUND 4

1.1 Literature review 4

1.2 Theoretical background 5

1.2.1 Commercial banks and their characteristics 5

1.2.2 Main activities of commercial banks 8

1.2.3 Credit activities of commercial banks 10

1.2.4 Retailed credits of banks 14

CHAPTER 2: RESEARCH METHODS 23

2.1 Research approach 23

2.2 Data collection method 23

2.3 The data analysis methods 24

2.4 Research design 24

2.4.1 Identify targets, objects and scope of research: 25

2.4.2 Choosing research methods of the topic 26

2.4.3 Learning and studying the theoretical basis related to research topics 26

2.4.4 Collect data on retail credit status in Vietinbank Ha Tinh 26

2.4.5 Analyze, synthesize and put into the final research thesis 26

CHAPTER 3: CURENT SITUATION OF RETAIL CREDIT ACTIVITIES AT VIETINBANK HA TINH BRANCH 27

3.1 Introcution to Vietinbank Ha Tinh 27

3.1.1 History 27

3.1.2 Organizational structure 28

3.1.3 Business operation results of Vietinbank Ha Tinh through 2 year (2015-2016) 31

3.2 Retailed credit activities in Vietinbank Ha Tinh 37

3.2.1 Retail credit polices 37

3.2.2 Retail credit activities 38

3.2.3 Retail credit products of the Branch 40

3.2.4 Asessements of current situation 45

CHAPTER 4: THE PROPOSED SOLUTIONS DEVELOPMENT TO IMPROVE RETAIL CREDIT AT VIETNAM JOINT STOCK COMMERCIAL BANK FOR INDUSTRY AND

TRADE – HA TINH BRANCH (VIETINBANK HA TINH) 52

4.1 The orientations and objectives to expand retail credit activity 52

4.1.1 The orientations for development of retail credit in Vietinbank system 52

4.1.2 The orientations and objectives to develop retail credit activity at Vietinbank Ha Tinh 53 4.2 The proposed solutions to improve retailed credit at Vietinbank Ha Tinh 54

4.2.1 Developing customer policy 55

4.2.2 Diversification of types, retail credit products 56

4.2.3 Developing distribution channel system 57

4.2.4 Improve the quality of retail credit human resources 57

4.2.5 Promoting marketing activity 58

4.2.6 Increasing risk management capacity and improve retail credit operation efficiency 59

4.3 The Recommendations 60

CONCLUSION 64

REFERENCES 66

LIST OF TABLES AND FIGURES

Table 3.1 Main performance indicators in 2015, 2016 32

Table 3.2 Capital raising results of Vietinbank Ha Tinh in the period of 2014 - 2016 33

Table 3.3 Loan result of Vietinbank Ha Tinh for the period 2014-2016 34

Table 3.4 Compare the number of retail credit products of banks in the area 38

Table 3.5 the overview of retail credit activities of Vietinbank Ha Tinh Branch in the period of 2014 - 2016 39

Table 3.6 Result of Loans for land purchase, construction and repair of houses 41

Table 3.7 Result of Loans for business 42

Table 3.8 Result of mortgated loans 43

Table 3.9 Result of car loans 44

Figure 2.1 Research design used in research topic 25

Figure 3.1 Organized at VietinBank Ha Tinh 29

Figure 3.2 Capital raising results of Vietinbank Ha Tinh in the period of 2014 - 2016 33

Figure 3.3 Loan results of Vietinbank Ha Tinh by period 2014-2016 35

Figure 3.4 Loan result of Vietinbank Ha Tinh by customers in period 2014-2016 35

Figure 3.5 The income of services over the year at Vietinbank Ha Tinh 37

Figure 3.6 Outstanding retail loans at Vietinbank Ha Tinh branch for the period 2014 – 2016 39

Figure 3.7 Outstanding retail credit products for the period 2014-2016 40

Figure 3.8 Outstanding of loans for land purchase, construction and repair of houses 42

Figure 3.9 Outstanding of loans for business 43

Figure 3.10 Outstanding of mortgaged loans 44

Figure 3.11 Outstanding of car loans 45

INTRODUCTION

In recent years, With the deepening integration process, Vietnamese commercial banks operate in fierce competition, in order to innovate and improve service quality,Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) has chosen a long-term and sustainable development orientation Developing retail banking services and consider retailing activity as the most important strategies, in there focusing on retailed credit services is the one of activities that bring in the main income and profit Therefore, The Vietinbank branches have been deploying activities in accordance with the development orientation of the whole system

Ha Tinh in recent years has become one of the bright spots in attracting investment of the country Vung Ang Economic Zone and many industrial clusters have been formed as potential convergence places for economic development Accordingly, the development of demand for capital and finance of enterprises and individuals increased rapidly Therefore, many banks have joined and created fierce competition in the retail market in the area

To capture the real demand as well as to strengthen the competitiveness with banks in the area, Vietinbank Ha Tinh Branch has developed different types of retail credit for corporate clients and individuals, households However, retail credit balance of branch is not high, the development of retail credit in the area is difficult, the number of products deployed is still limited, the proportion of credit is still lower than the total outstanding loans of the bank On the other hand, advertising, marketing as well as the development of retail credit network, human resources still exist difficulties, objective and subjective obstacles affecting the development of retail credit activities of the Branch

From that reason, I decided to choose the topic "Development of retail credit in the Vietnam Joint Stock Commercial Bank for Industry and Trade - Ha Tinh Branch" for thesis to provide general solutions to develop retail credit in the current period

The research topic of the thesis is through the theoretical foundation of developing retail credit services, analyzing the Bank's current resources in the local operating environment, determining the causes that limit the development of the Bank's retail credit services to show the challenges that banks are facing, Thereby offering solutions to develop retail financial services in the Vietnam Joint Stock Commercial Bank for Industry and Trade - Ha Tinh Branch in the future

 Research Questions

With the title of the thesis topic, research questions are:

What is retail credit? What are the characteristics of retail credit?

What are the results and limitations of retail credit activities in Vietinbank Ha Tinh? What are the causes of those limitations?

To develop retail credit in Vietinbank Ha Tinh, what solutions should be implemented?

 Research objectives

The major objectives of the research are:

(1) Systematize theories of retail credit and retail credit development;

(2) Analyze and assess the current situation of retail credit activities in Vietinbank Ha Tinh; and

(3) Proposed solutions to develop retail credit in Vietinbank Ha Tinh

The first important task of the research is to study the general theories of retail credit and retail credit development for analysis Based on these models, the research will assess the current situation of retail credit activities in Vietinbank Ha Tinh Finally, the research will propose solutions to develop retail credit in Vietinbank Ha Tinh based on the above standard models and the results from the situation analysis of the bank

 The object and scope of the reseach

Research subject

Research subject:

Research the related issues in the retail credit activities in the actual situation of Vietinbank Ha Tinh branch

Scope of the research:

Content: The research topic focuses on the following main contents:

+ Actual retail credit activities in Vietinbank Ha Tinh

+ The problems posed in the development of retail credit products branch mainly: Loans for business and consumption for individuals and micro-enterprises; Loan for financial proof, study loan

Spatial range: Vietnam Joint Stock Commercial Bank for Industry and Trade - Ha Tinh Branch

Time range: Data are collected, analyzed and used for three years from 2014 to 2016

 Research methodology

- Systematic method: Assess all the factors that can affect retail credit activities in Vietinbank

Ha Tinh With this method, the assessment of factors affecting the bank’s retail credit activities includes both external and internal environment of Vietinbank Ha Tinh

- Secondary data analysis method: This method is used to study the theoretical background

for the development of retailing credit

- Primary data analysis method: Assess the actual situation of Vietinbank Ha Tinh in the

developing retailed credit services and implementation retailed credit activities

- Quantitative method: This method is used to select data and analyze

 Structure of the thesis

In addition to the Table of contents, Introduction and List of references, this thesis includes four following chapters:

Chapter 1: Literature review, theoretical background

Chapter 2: Research methods

Chapter 3: Curent situation of retail credit activities at Vietinbank Ha Tinh Branch

Chapter 4: The Proposed solutions development to improve retail credit at Vietnam Joint Stock Commercial Bank for industry and trade – Ha Tinh Branch (Vietinbank Ha Tinh)

CHAPTER 1: LITERATURE REVIEW AND THEORETICAL BACKGROUND

1.1 Literature review

Developing retail banking in general and retail loans service has become an imperative not only for commercial banks, but also for articles in journals and surveys Masters of thesis or other scientific studies at our country and abroad

Typical articles on economic magazine

At the post number 2, economy and forecast review, Dr Nguyen Dai Lai, Deputy Director of the Development Department of the Vietnam State Bank has written “Identify and propose solutions to develop retail credit services at commercial banks in Vietnam” In the article, the author raises the issue of the distinction between wholesale bank and retail bank and simultaneously highlights the development of retail banking for commercial banks in allocating fees as well as Cost accounting and selling price The author also outlines the current status of operations of Vietnamese commercial banks in the global economy, which will serve as a basis for developing retail development plans in general and developing retail credit services particularly, market strategy of commercial banks

Some master's thesis on the subject studied

a) Nguyen Thi Hai Ha, master thesis "Solution for developing retail credit services in Thanh Xuan branch - Bank for Investment and Development of Vietnam", 2009

Throughout the thesis, in the general theoretical chapter, the author presents the general concepts

of commercial banks and the development of retail credit services at commercial banks The thesis analyzed the current status of retail credit activities of BIDV in general and Thanh Xuan branch in particular, From this situation, the author has presented a panoramic picture of retail credit services of Thanh Xuan branch and analyzed the overall business environment of Thanh Xuan branch so that there are evaluations on the process of retail credit services Based on the overall analysis of the business environment and the current status of retail credit services at Thanh Xuan branch, the author outlines the causes that exist objectively and subjectively while learning business Experienced in developing retail credit services of banks around the world The thesis has provided basic solutions in terms of market access and customer management, technology, human resources development, financial capacity building as the basis for the development of retail credit services at BIDV Thanh Xuan

However, throughout the essay, the authors did not analyze each specific factor affecting the retail operation at BIDV Thanh Xuan, but rather the general situation of the Bank for

Investment and Development of Vietnam from which infer to Thanh Xuan Branch, so the persuasiveness of the solution is not high

b) Vo Thi Hong Hien, master thesis "Strategic development of retail credit services at Vietcombank Quang Ngai Branch", 2010

Unlike Nguyen Thi Hai Ha, Vo Thi Hong Hien analyzes the current status of retail credit operations at Vietcombank Quang Ngai branch through strategic elements, brand names, products, organizational structure, personnel and finance to identify the strengths and weaknesses of Vietcombank Quang Ngai Branch in combination with external socio-economic and political analyzes to help Vietcombank Quang Ngai Branch to plan its operational strategy retail credit as well as solutions to implement that strategy most effectively From the above situation, the author has introduced solutions: Developing technology, people, distribution channels, product development, brand name, risk management in retail credit activities at Vietcombank Quang Ngai branch also issued a number of recommendations to the Government, the State Bank and related agencies to achieve the ultimate goal of developing retail credit services at Vietcombank Quang Ngai

By analyzing the same research topics on retail credit development as mentioned above, we find that although the authors have provided basic solutions to develop retail credit services, However, most of the theses still go from general theory, These have not applied a specific theoretical model to develop specific solutions to develop retail credit service

Recognizing the outstanding issues of the studied research on the development of retail credit services together with the statement "Development of retail credit services at Vietinbank Ha Tinh" is a new field of research but in the future It will bring many development opportunities that previously had no research work on this field in Ha Tinh branch The author went from systematizing the general theoretical issues of commercial bank credit services to concurrent application of the Ansoff matrix combined with the analysis of individual factors of Ha Tinh town where Vietinbank Ha Tinh operates as well as retail credit analysis From the point of view, the author provides the solutions for developing retail credit services of the Vietinbank

commercial banks usually occupies the largest share in size of assets, market share and number of types Bank

The bank is one of the most important financial intermediaries The Bank pursues economic policies, especially monetary policy, so it is an important channel in the economic policy of the Government to stabilize the economy

Banks can be defined by the functions, services or roles they perform in the economy But the most prudent approach is to consider banks in terms of the types of services they provide: “Banks are financial institutions that provide the most diversified portfolio of financial services - especially

credit, savings, payment services, and performs the most financial functions in the economy " (source: The Law on Credit Institutions of the Socialist Republic of Vietnam )

According to the Law on Credit Institutions of the Socialist Republic of Vietnam states that

“The activities of banks are monetary trading and banking services with the regular content of receiving deposits and using money to provide credit and provision of payment services” Commercial banks are the largest savings institution in most economies Millions of individuals, households, enterprises and socio-economic organizations send money to banks Loans from banks are an important source of income for many households This is a major lending organization for corporates, individuals and households For companies, commercial banks are usually credit organization to serve the purchase of reserve goods or plant construction, procurement of technical equipment When companies and consumers pay for purchases of goods and services, they usually use checks, debit authorizations, credit cards or electronic accounts When they need financial information or financial planning, they often come to the bank for advice Bank credits to the Government are an important source of financing for development A commercial bank is a credit organization that represents its most basic task of mobilizing capital and providing loans Commercial banks are the bridge between individuals and organizations that draw from idle capital and inject money into the shortage The commercial banks' activities are aimed at trading a special commodity that is

"capital-money" The deposit rate is lower than the lending rate and the interest difference is the profit of the commercial bank Commercial banks' activities provide for all capital needs

of all classes, types of businesses and other organizations in the society Different from commercial banks, The State Bank (central bank) does not operate for profit or monetary purposes Each country has only one state-owned bank, which may be called a parent bank, which functions to issue money, administer, implement and monitor monetary policies; and there are many commercial banks, which can be considered as the function banks to transfer money in the economy In the case of commercial banks standing on the bankruptcy, the

central bank will be the last source of funding that commercial banks seek In commercial banks, depositors' money is called "debit" assets, money for companies and individuals, as well as deposits in other banks, and the number of bank-owned bonds called credit assets The difference between the amount of money raised and the amount of money lent to banks and bonds is called equity

In developing countries like Vietnam, commercial banks really play a very important role, as

it assumes the role of keeping the flow of capital of the economy circulated and thus contributing to the lubricant for the functioning of a weak market economy

1.2.1.2 Characteristics

Firstly, the commercial bank intermediary is the financial performing currency business A commercial bank is a financial institution which primarily deals with the transfer of savings into investment, requiring contact with two types of individuals and organizations in the economy: (1) individuals and organizations with a deficit of expenditure, that is, expenditures for consumption and investment that exceed income and thus are additional to capital; (2) individuals and organizations have a surplus of expenditure, like as their current income is greater than the expenditures on goods and services and thus they have the money to save There are two types of individuals and organizations that are completely independent of commercial banks It is inevitable that money will move from group (2) to group (1) if both are mutually beneficial Thus, increased income is the driving force behind the financial relationship between the two groups If cash flow moves on the return of a larger amount of capital over a certain period of time, it is a credit relationship Otherwise it is a distribution or partnership relationship This is a direct financial relationship

Direct financial relations, however, are severely constrained by inadequate size, time, space This hinders direct development and is a precursor to financial intermediation Financial intermediation has increased incomes for savers, thereby encouraging savings, while reducing the cost of credit for investors (increased income for investors) Financial intermediation has brought together savers and investors Intermediary mechanism will be effective when it incurs risks and uses business techniques to limit, disperse risks and reduce transaction costs Commercial banks are willing to accept high risk loans while issuing low-risk securities to depositors In fact, commercial banks engage in risky business Commercial banks also satisfy the liquidity needs of many customers Commercial banks are a payment intermediary On behalf of customers, the bank performs the payment of goods and services with various forms of payment such as checks, collection orders, cards providing electronic payment network Connect funds and provide money when customers need it Banks also make mutual offsetting through the Central Bank or

through the payment center Currently, the bank becomes the largest payment intermediary in most countries One reason banks thrive is the ability to evaluate information Uneven distribution

of information and capacity for information analysis are known as "asymmetric information" that reduces the efficiency of the market but creates a profitability for banks, where expertise and experience in evaluating financial instruments and the ability to choose the tools with the most attractive risk-reward elements

Secondly, banks are organizations that must have conditions The bank is more closely regulated

by the government than any other organization in the economy, as the bank is the treasurer of the economy A bank that wishes to obtain a license must have a certain amount of capital committed

to implement certain policies, such as lending, financing a project or expenditure, and in the process The bank is subject to strict management by the State In order to perform well, the bank continuously increases its capital base, recruits qualified and qualified staff and has a wide network of branches to meet the needs of customers and perform many activities Other, to gain great profits, limits risks for both depositors and banks

1.2.2 Main activities of commercial banks

1.2.2.1 Fund mobilization

 Mobilize equity

Equity of a bank usually consists of own capital (capital contribution), capital surplus and accumulated profit To start a banking activity (legally allowed), the banker must have a certain amount of capital Depending on the nature of each bank, the sources of capital formation are different: State banks are allocated by the state budget; Joint-stock banks contributed by shareholders; Joint-venture banks contributed by joint-venture parties; Private banks are privately owned In the course of operation, the bank must constantly increase its equity by: the accumulation of profits (turning a part of net income into capital); capital surplus, additional sources from additional contributions, additions or from funds and sources of debt that can be converted into shares (medium and long-term loans)

 Deposits

Deposits from customers are the most important resource and account for the highest proportion of total commercial banks' funds In order to increase deposits in a competitive environment and to obtain more and better quality cash, banks have launched and implemented various forms of mobilization such as:

- Payment deposits are deposits of individuals or enterprises that are sent and kept by the bank within the allowed balance at very low or zero rates

- Term deposits of enterprises and social organizations: the money of enterprises or social organizations deposited in banks with certain terms (may be 1 month, 3 months, 6 months, 1 year, 2 years .) with the corresponding term interest rate The higher the deposit rate, the higher the deposit rate Senders can go to the withdrawal bank if there is a need to spend money, but only lower interest rates due to not withdrawn on time

- Savings deposit: the money deposited in a bank with a certain term The bank offers a variety of attractive deposits and interest rates (eg deposits with different maturities, savings

in foreign currency or gold)

- Deposits from other banks: For settlement purposes and other purposes, this commercial bank may deposit money at other banks However, this source is usually not large

 Borrowing from other organizations:

Deposits are the most important source of commercial banks However, when needed, banks often borrow more with various types of borrowing:

- Loans from the State Bank: This is a loan that addresses the urgent need of commercial banks In the case of shortage of reserves (lack of compulsory reserves or payment reserves), commercial banks usually borrow from the State Bank The form of lending is mainly rediscount or recapitalization

- Loans from other credit institutions: These are mutual loans between banks and other credit institutions on the interbank market This source is used to meet the need for stockpiling and emergency payments and in many cases it replaces and replaces loans borrowed from the State Bank

- Borrowing in the capital market: This is a source of debt financing to compensate for the shortage of medium and long term loans Banks borrow money by issuing debt instruments (bills, bills, bonds)

1.2.2.2 Credit and investment activities

The main activity of a commercial bank is to seek capital to use for profit

* Treasury Operations: Banks have to put a certain amount of cash in a bank so they can pay quickly when it's available to their needs Therefore, in order to meet both liquidity targets and create an income for the bank, banks usually have a deposit at the State Bank, banks and other banks

* Securities investment activities: Commercial banks hold securities for liquidity and diversification purposes Commonly held bank securities are: government securities; Securities of other banks, finance companies and securities of other companies Banks hold securities because they bring income to the bank (larger than deposits at the State Bank and

credit institutions) and can sell to raise funds when needed But it is important to understand that investing in securities is investing in bonds, bills rather than investing in stocks Investing in stocks belonging to the bank's equity partnership

* Credit activities: It is a typical activity of commercial banks, accounting for the largest proportion and bring the biggest income to the bank There are many ways to classify the type

of credit: over time (short, medium and long term), in the form of financing (including loans, guarantees, leasing, discount .), according to property guaranteed, at risk (including high, medium, and low security items), or by industry (industry, agriculture, etc.), or by sponsorship (commodity, or real estate ) or by purpose (production, consumption )

* Other capital using activities: Other activities are activities such as payment activities, trust activities, capital contribution activities (banks participating in capital contribution with other organizations in the form of holding shares joint ventures, joint ventures, etc.), other capital use activities such as procurement, housing and equipment for the customer's business and leasing

1.2.2.3 Other banking services

In addition to the traditional and specific activities, commercial banks also carry out other activities to seek for profits such as: providing trust services, consulting services, investment brokerage services Securities, insurance services, agent services …

Payment and treasury activities are very important activities and marked The particularity of commercial banks, thanks to this activity that the payment transactions of the whole economy

is implemented smoothly and favorably Others also contributed to a significant reduction in the amount of cash flowing into the economy Commercial banks provide payment and treasury operations in various forms as:

- Providing payment facilities

- Implementing domestic payment services

- Providing other payment services in accordance with the regulations of the SBV

- Providing international payment services when permitted by the SBV

- Providing payment services

- Carry out the services of tallying, sorting, preservation and transportation cash,…

1.2.3 Credit activities of commercial banks

1.2.3.1 The concept of bank credit

Credit is an objective economic category, a process of birth, survival and development along with the development of commodity economy It reflects the borrowing relationship between entities based on the principle of repayment Accordingly, the lender will transfer the right of

use of the goods or its own currency to the borrower and the borrower is obliged to repay the lender a value greater than the initial value already received

Bank credit is the transfer of the right to use capital from banks to customers (organizations or individuals) for a certain period of time at a certain cost In other words, bank credit is the credit relationship between the bank and the organizations and individuals carried out in the form of banks raising money in cash and lending to the above objects Banking credit is particularly important in the economy, its operations are diverse and plentiful Bank credit and development associated with the birth and development of the banking system The subject of bank credit is monetary capital, in which: the bank is the lender also the organization, the individual is the borrower

Bank credit is the most profitable activity for commercial banks but the highest risk This is the most important activity of banks in particular and financial intermediaries in general, accounting for the highest proportion of total assets and generating large interest income Credit is also a financing activity of the bank for customers Credit relations are largely determined through a credit agreement with a focus on identifying the ability and willingness

of the recipient to perform the contract (source: Law on Credit Institutions)

1.2.3.2 The Principles of bank credit

Bank credit is both a business and production credit, linked to business and consumer credit, not linked to business However, banking credit is always guaranteed 3 basic principles: Firstly, customers must commit to repay principal, interest with a fixed time The principal credits originated from the deposits of customers and the loans the bank borrows Therefore, banks always require credit recipients to comply with this commitment This is a condition for banks to survive and develop

Secondly, customers must commit to use credit for the purpose agreed with the bank, not contrary to the provisions of law and other regulations of the higher level The law regulates the scope of activities for banks Each bank can have its own purpose and scope of activity The purpose of the grant is stated in the credit agreement to ensure that the bank does not fund illegal activities and that the financing is not appropriate for the bank's platform

Thirdly, loans must be secured by assets (except in the case of unsecured, unsecured loans.) Bank loans based on (or projects) are effectively To implementation of the first principle, Efficient borrower's solution demonstrates the ability to recover capital and make profits to repay the bank, the bank's funding must be associated with the figure In case of insecurity, the bank requires the borrower to have collateral for the loan

1.2.3.3 Nature of roles bank credit

The nature of credit is generally the system of economic relations between the lender and the borrower By that, capital is mobilized from one subject to another on the principle of repayment to meet the different needs of the economy Bank credit plays a very important role

in the survival and development of the economy Internal conflicts of credit exist in two opposite directions: positive and negative affect on social-economic If credit development is rampant, uncontrolled, it will lead to excessive amount of money in circulation, supply exceeds demand which will cause inflation to affect social-economic life Thus, credit actually develops with the following positive roles:

 Promoting production and circulation of goods

Credit is both a tool to mobilize capital and an effective tool to provide capital to the economy, meet the capital needs for production and business activities of organizations and enterprises timely The credit is concentrated in excess, idle in the society and redistributed to the capital, such as enterprises, economic organizations Through credit, money is used effectively In all socio-economic times, credit plays an important role in all sectors of society:

For enterprises: With the mobilized capital, credit activities can supply capital for production and business activities, meeting the demand for fixed capital (purchase of machinery and equipment, construction of infrastructure floor, ), working capital (purchase of materials and materials for goods production) On the other hand, credit also controls the circulation of goods in the economy

For people (consumers): credit for mobilizing idle capital from people, organizations and enterprises Encourage people to save and accumulate for investment

 Currency stabilization

With the focus on capital, credit has helped to reduce the amount of money circulating in the economy, especially the amount of cash in the population, reducing the inflationary pressure, contributing to currency stability in the economy

Credit to provide capital for the economy, contributing to expand and develop production, creating products and services more and more, meeting the increasing demand of society, stabilizing prices in the market

 Stabilize life, social order and create jobs

Providing capital to create conditions for production activities is ensured continuously, creating many diversified jobs, solving employment for laborers, reducing the unemployment rate, helping to stabilize the order It contributes to the stabilization of life and the improvement of the living standard of the people

 Play an active role in external relations

The development of credit is incessantly within the boundaries of a country that extends beyond the international arena Cross-country credit is required to meet the capital needs of countries, contributing to shortening the gap between countries, supporting capital for development or international organizations (World Bank, United Nations - IMF, etc.) for poor, developing countries Vietnam is a developing country International credit creates a friendly relationship that brings the countries closer together and grows together

1.2.3.4 Categories of bank credit

Bank credit can be divided into different categories depending on classification criteria:

 Based on purpose of credit

According to this credit criterion can be divided into the following categories:

- Loans for commercial production and business;

- Consumer loans;

- Loan for real estate;

- Loans for agricultural production;

- Loans for export business,

 Based on credit term

- Short-term credit means a credit activity of a maximum duration of 12 months, the usual purpose being to finance the investment in liquid assets;

- Medium-term credit means a credit granting activity with a term of from 12 months to 60 months; the usual purpose is to finance the investment in fixed assets;

- Long-term credit is a credit granting activity with a term of over 60 months The purpose is usually to fund investment projects

 Based on the level of trust of customers

- Unsecured collateral: Loans without collateral, mortgages or guarantees of third parties, but based on the credibility of customers themselves to decide on the loan;

- Secured Loans: Loans based on loan guarantees such as mortgages, mortgages or guarantees

by a third party

 Based on the method of credit

Loans for each time

Loans for credit limits

Loans for overdraft limits

1.2.4 Retailed credits of banks

1.2.4.1 Definitions

Retail credit along with wholesale credit are two components that make up the credit activity

of commercial banks Retail credit is a form of bank providing utilities as well as providing credit services (by lending, discounting, guaranteeing and other operations) to individual customers (Vietnamese individuals Households and foreigner individuals) to borrow capital to meet the demand for capital for production, business, service, investment and living The individuals mentioned here are individuals with legal capacity (also representing a household), capacity for civil acts and civil liability in accordance with the law These individuals belong to different sectors such as public servants, non-state employees, and self-employed workers

1.2.4.2 Characteristics of retailed credit

The object of providing retail credit products is very broad, the number of customers is enormous, including individual households and small and medium enterprises in the economy, but the value of loans usually small

The quality of financial information of the borrower usually not high, for individual customers and households is difficult to determine, for small and medium-sized enterprises of the financial statements are not audited

The proportion of medium and long-term loans for retail credit tends to be higher than the average rate, as the demand for medium and long term loans to buy houses in residential land, purchase fixed assets accounted for a large proportion; In addition, borrowers often do not actively plan cash flow, the demand for consumer loans usually has a term of more than 12 months

The need for retail credit of customers is strongly affected and depends largely on the economic cycle; Strong increasing in the period of good economic growth, high income, increased spending, investment in production and business services of small profitability; Conversely, when the economy is in recession, unemployment increases many individuals households, limiting spending on consumer loans, small and medium enterprises rapidly reduce production

The cost of retail credit is higher than the average rate, because of the small loans, the large number of customers, management costs, operating costs are high; Due to the high demand for medium and long term capital, the cost of capital is also high

Retail credit has capability of dispersing risk, due to large number of clients and the small value loans

Procedures and records in retail credit are relatively quicker and simpler than other types of credit products because the amount of loans is not large, the appraisal record is neither complicated nor necessary Analysis and evaluation of financial statements as in credit to enterprises

1.2.4.3 Roles and the importance of retail credit in the economy

 For the social economy

Credit activity generally plays an important role in promoting economic development, while retail credit has some specific roles such as:

Contribute to speeding up the process of money circulation, to use capital sources efficiently,

so that small and medium enterprises and households can expand their production of goods and services and handle large volumes of jobs High role of these economic sectors in the economy, increasing contribution in GDP

Contribute to stimulating consumer demand: With loans for housing, cars, equipment for family activities in accordance with the ability to pay customers, consumer credit products Through domestic and international cards, it stimulates people to increase their expenditures, thereby boosting enterprises to invest in increasing their production capacity and economic growth

Helping to reverse the black credit, usury in many places: retail credit channel opened to help individual customers, households, small businesses easy access to capital bank profits Attractive interests will limit usury in many places

 For the retailed customers

Maximizing internal resources of individual customers, households, small and medium enterprises, exploiting the potential of land, goods, machinery, workshops in a reasonable and effectiveness

Contribute to improving the material life and spirit of the people and create conditions to raise the people, formed the habit of using the products and services of modern banking, in accordance with the requirements of industrialization and modernization of country

 For the commercial banks

Retail credit is one of the credit operations of the Bank, in addition to corporate or business credit Accelerated retail credit rate contributed to accelerate outstanding loans, which means that the income growth of the Bank This brings to the bank large income on service fees Developing a diversified range of services in the direction of improving payment methods, simplifying procedures and expanding the network In addition, the bank can develop support services such as payroll services for people with accounts at various banks, transfer cash

transactions directly to recipients will attract more and more Customers come to the bank, thereby increasing the bank's revenue from services

In order to be able to compete with other banks, the bank has to meet the increasing demands

of customers such as researching new products, improving service quality The bank is increasingly improving itself, becoming stronger rivals of other banks

It can be seen that since the commercial banks in Vietnam applied the provision of retail credit products and services, beside the traditional credit products, the bank's product portfolio has been much more diverse Overdrafts for deposit accounts, housing loans, auto loans, advance loans for sale of listed securities, loans for employees…

Product portfolio expanded, service quality increased It can be said that retail credit has contributed to increase the ability to meet the customer’s needs, satisfying customers, bringing their images into the minds of customers

1.2.4.4 Retailed credit products

 The loans for retailed customers

On the basis of the forms of credit extension, along with the development of the economy, banks are constantly researching and introducing a lot of new products, so that they can meet the diversified demands increasingly advanced customers The products are designed on the basis of careful study of customer needs, based on the purpose of using loans, some popular products today include:

Loans for production and business: These are short-term credit products to meet capital requirements for domestic production and business such as purchasing materials and goods, labor costs, fuel taxes, Import and export materials, goods; usually through credit limit or by each time

Loans for investment fixed asset: These are long-term credit products aimed at supplementing new investment capital or repairing and upgrading machinery and equipment, transport means, working offices

Loans for purchase of houses and houses for residential purposes: It is a product for individual clients to borrow money for the construction, purchase, repair, transfer of the right to sublease the house of the State, transfer the land use right

Mortgage of valuable paper, savings card: It is a form of secured lending by valuable papers and savings cards issued by the Government, the Bank or other credit institutions

in order to respond quickly customer’s needs for capital when valuable papers and credit cards are not due

Lending to employees: This product provides loans to customers who are employees to develop sub-family economy and / or meet the needs of living staff of employees who source debt is income Frequent of them

Loans for purchase of cars: Customers get loans to own and use a beautiful new car for consumption and business

1.2.4.5 Criteria to evaluate retailed credit of banks

Bank credit can be divided into different categories depending on the classification criteria:

• Based on the purpose of credit:

According to this credit criterion can be divided into the following categories:

- Loans for commercial production and business;

- Consumer loans;

- Loan for real estate;

- Loans for agricultural production;

- Lending for export business,

• Based on the credit term:

- Short-term credit means a credit activity of a maximum duration of 12 months, the usual purpose being to finance the investment in liquid assets;

- Medium-term credit means a credit granting activity with a term of from 12 months to 60 months; the usual purpose is to finance the investment in fixed assets;

- Long-term credit is a credit granting activity with a term of over 60 months The purpose is usually to fund investment projects

• Based on the level of trusted customers:

- Loans without collateral: Loans without collateral, mortgages or guarantees of third parties, but based on the credibility of customers themselves to decide on the loan;

- Secured Loans: A type of loan based on loan guarantees such as mortgages, pledges or guarantees from a third party

• Based on the method of loans: According to this criterion, credit can be divided into the following types:

- Loans under the loan;

- Lending by credit line;

- Lending under overdraft limit

• Based on the repayment method:

- Loans have only one repayment term, also called one-time repayment loans;

- Loans with multiple repayments or so-called installment loans;

- Loans repay many times but there is no specific repayment schedule but depending on the financial ability of the borrower can repay at any time

1.2.4.6 Factors affecting retail credit of banks

 Objective factors:

+ ment of retail credit are the factors that directly participate in credit relations Society: The social factors that directly influence the developTrends in demographic change that are studied include total population, population growth rate, population structure changes, population movement trends are important data sources From these figures, the bank identifies the potential market for credit activity and the bank's capacity relative to its competitors to capture each segment of the market Accompanying GDP growth is the process

of urbanization Urbanization is accelerating the population at large cities at a rate of 1% per year According to the report of World Bank at October 3rd, the urbanization process in our country last time with the rate of 3.2% per year, is very fast compared to the region and twice

as high rate of population growth in the country If the urban population in 2015 accounted for 29.6%, in 2016 rose to 30.5% about 26.3 million people The proportion of people in working age is quite large, accounting for 65% of the population More than 70% of urban Vietnamese households currently have an average annual income of over 57 million VND The high growth rate of population and income leads to high demand for consumption

+ Legal and political environment: Banking business is one of the branches subject to strict supervision of the law, regulations of the State Bank First of all, State policies have a strong influence in the field of lending, especially the policies and programs related to economic For example, when the state increases its investment in the economy as well as increases the attractiveness of foreign investment through investment incentives (simplification of paperwork, tax incentives .) This will create conditions for the overall development of the economy, society, GDP will increase, the unemployment rate will decrease, the income of workers will increase, thereby increasing the demand for consumption and operation business Nowadays, in the market economy regulated by the state, the current law plays an indispensable role There are no laws or laws that are not in line with the market economy's development requirements, and all activities cannot be smooth With the assurance role of transforming a spontaneous, unorganized market economy into a more civilized market economy, the law has a tremendous task in creating a legal framework that helps the production and business activities are favorable, bringing high economic efficiency, resolving conflicts, disputes and complaints Therefore, the law is very important for the operation of the bank in general and the quality of credit in particular Only in the condition that the

subjects involved in credit relations comply strictly with the law, the new credit relations bring efficiency and benefits to both parties and the quality of credit is guaranteed

+ Economic environment: The economic environment includes factors that affect the ability

of people to income, payment, expenditures, and capital needs As the economy recession, incomes decline, inflation and unemployment rise, the unfavorable business environment also affects the business plan of the bank On the other hand when the economy is flourishing, production and business activity development will be a good opportunity to carry out banking operations Trends in the use of banking services are increasing: with 86 million people, only 17% opened bank accounts, but the growth rate of banking services in the last 3 years was over 30% Types of businesses, products and services that support the consumption of people increase Finance companies, financial leasing, bank collaboration with suppliers, boost trade offers credit products Interest rates will determine the demand for lending, commercial banks often offer attractive interest rates to attract borrowers Of course, it must be based on the basic interest rate of the State Bank to control the market High inflation makes it difficult for banks to control prices and amounts of money Businesses and individuals will be hesitant to deposit money into the bank, raising interest rates will increase Enterprises have limited investment in production and business projects because the risk in this time is quite high Therefore, in order to encourage borrowing, banks must lower lending rates

+ Technology environment: The emergence and development of modern technology has changed the face of the banking industry The new technology allows the Bank to innovate not only on the business process but also on the way it is distributed, especially the development of new products and services, such as the development of a computer network that allows the Bank to provide banking services According to the development trend of the digital information age, banks increasingly focus on applying information technology to business process innovation and distribution Especially, the development of new products and services, including retail credit technology applications will be the trend in the coming time Consumption trend associated with access to technology: Internet access rate is 77 subscribers per 1,000 people, internet users 20.8 million people make up 25% of population; The number of fixed and mobile phone subscribers is 921 per 1000 people, just behind the US and Singapore in terms of speed of development

+ The social and cultural environment: The behavior of customers and their competitors is dominated by cultural factors Consumption behavior is also influenced by cultural factors, so

it also affects the demand for consumer lending products of the bank Therefore, the level of culture is one of the factors that the bankers carefully study in business strategies and apply

the current marketing methods Different geographical areas have different cultural characteristics of customs, ways of communication, demand for goods and services in general and banking products and services in particular These conditions have formed populated places, trade centers, tourist centers, manufacturing centers, and influenced the booking of a transaction office or a branch of a bank The expansion of the network in the areas with good income, the economic development environment is favorable for business in general and retail loans

+ Competitors: Competitor activities also have a significant impact on the Bank's operations, especially when the banks offer the same product, targeting the same target audience in the same area The banking market is more active, the competition among banks has become more acute As a result, banks are increasingly spending much of their time researching the market structure and behavior of banks in the marketplace, studying the specific behavior of each competitor (direct competitors, potential competitors .) in order to actively propose a dynamic and effective competition strategy

+ The units support the operation of the bank: Finding and establishing a mutually beneficial relationship between the Bank and its affiliates contributes to improving the Bank's performance and image The units supporting the operation of the bank are the units that have relations with banks in business activities such as organizations providing marketing services, financial intermediaries, credit media the masses, the State organs With the current situation, many banks have little experience in marketing activities, so it should use this service in professional organizations With regular credit and financial intermediaries, the banks deal with these organizations through three types of services: insurance, credit capital, and valuable paper services For example, the relationship with the insurance company for the collateral is car generated from the loan; or the mutual supply between financial institutions - credit, credit sources are relatively widely implemented Banks should look for these possibilities because buying credit capital at commercial banks is often cheaper than at central banks

+ Customers: Customers are the most important factor determining the success of the bank as customers are directly involved in the process of providing banking products and services directly to enjoy the product Therefore, the demand, desire and usage of banking products and services will be important factors influencing the quantity, structure and distribution of products and services

Customers play an important role in banking business As customers are directly involved in the process of providing banking products and services, both direct use and enjoyment of

products Therefore, the demand, desire and usage of products and services of customers will

be the decisive factors in terms of quantity, structure, quality of products and services and results of business operations of the bank The important task of banking marketing is to research, analyze and understand the needs of the customers to identify the individual they are looking for from the bank Pay attention to the potential customers The advantages of banking services compared with competitive banks Checking the use of loans helps the bank understand the evolution of the loan so that it can adjust or intervene when necessary, soon to see the cause and prevent possible risks Choosing and applying effective controls will establish an effective risk prevention system for credit quality

 Subjective factors:

+ Loans policy of the bank: The influence determines the existence and development of the bank's lending If the development and diversification of credit activities are not part of a bank's development policy or the bank's policy does not promote credit growth, it is difficult for customers to borrow money Meeting the demand of spending or demand for loans for production and business Except for cases where the bank is sure to recover debt from reputable customers That is, this policy does not encourage people to borrow money to meet the needs of living or the need to borrow small business loans so they will have difficulty in the process of borrowing On the contrary, when the bank determines that credit activities are

a direction for business development, the bank will set policies to promote this activity such

as interest rate policy, guaranteed asset ratio borrowing capital, conditions for borrowing + Capital size and development potential of the bank: Business objects of the bank are monetary so the capital size and financial status of a bank play an important role The larger the scale, the more financial indicators on the report, the more psychological peace of mind for the customer In addition, the development of credit products, technology applications in lending activities always associated with the investment in the purchase of new equipment, software The value of these investments is quite So it is not possible for small banks to make it So, with the large capital, the banks not only make themselves active in front of all activities but also create their ability to stand before the competition

+ Marketing activities of the Bank: With the information gathered, the department will synthesize, analyze, make conclusions about the research problem, the solutions to achieve the goal: attract more and more customers, occupy the market High market share, high profitability, increased competitiveness in the market, completed the plan of the Board of Directors, the target shareholders

+ Qualification of staff: First of all, the managers shall require the person skilled professionals, able to analyze and judge, was the first responsible for the competitiveness of the bank Besides, due to specific characteristics of the expansion of lending activities depends largely on the qualifications of staff Customer Relationship Managers directly contact customers through the transaction process, suggesting product improvement ideas or service delivery Therefore, the management should have a policy to arouse the capacity of labor, creativity for the staff of customer relations, especially promoting the effectiveness of reward policy, motivating employees to be attentive Good service and attract many customers for the bank

+ Credit processes: Credit procedures include provisions to be made in the process of lending and debt collection to ensure the safety of credit It starts with the preparation of the loan, disburses the loan, checks the process of using the loan until the debt is recovered Guaranteed credit quality does not depend on the good execution of the loan Staged procedures and close coordination between the steps in the credit process In the credit process, the preparation of the loan is very important, as the basis for risk assessment in the process of lending In this step, the quality of credit depends on the quality of loan appraisal as well as the condition of loan procedures of each bank

CHAPTER 2: RESEARCH METHODS

2.1 Research approach

For years, the research approach has been divided into two modes: inductive and interpretive

On the inductive approach, it is the way in which researchers develop new theories through the exploration, discovery and application of existing theories and the application of such theories into research Thus, if an inductive approach is applied, the author will not introduce

a new theory that will use the theory that was previously developed into the particular research environment On the interpretive approach, this is the way of argument that begins

by recognizing a general rule or principle and then applying it to explaining the phenomenon

of things The interpretation differs from the inductive induction of reasoning from the observation of things, phenomena and the conclusion of a general principle With this research topic, the author will use the inductive approach With this approach, the author will study theories, the previous scientific work on business management from which applied research to Vietinbank Ha Tinh to achieve the goals and the research task of this thesis

2.2 Data collection method

The main research methods used in the thesis include two main methods: (1) data collection method, (2) data processing method

The published information and data will be an important basis for the researcher to create a theoretical basis, methodology and overall picture of the socio-economic situation of the study area Methods of collecting information and data published in the following order:

1) List the necessary information that can be collected, systematized according to the content

or location of the collection and expected information provider

2) Contact the information provider

3) Carry out the collection by recording, copying

4) Check the actuality of the information through direct survey and cross-checking

As follows:

Theoretical bases related to

topics, data and information

+ Articles, related articles from magazines, from the internet

+ Essays and theses related to research topics

+ Library of Hanoi National University; National Library

Data on the overall situation

of the company such as

organizational structure,

number of employees, number

of agents, policies, business

programs, quantity of goods

sold, turnover, profit

+ Income statement over the years of the company

+ Strategy, action plan of the company

+ Policies on business activities of the company

+ Reports of agencies, data promotions, warranty

+ Finance Department of the company

+ Business planning

resources department

+ Agents of the company

2.3 The data analysis methods

Descriptive statistics methods: The method involved data collection, summary presentation, calculation and description of different characteristics to reflect the general object of study Economic statistical methods: This method is used to synthesize, analyze and compare qualitative and quantitative indicators to reflect the dynamics and nature of the phenomenon Comparative statistical methods: Through absolute numbers, the relative number for comparison shows the change in the phenomenon of the study

System of analysis criteria: The proportion of outstanding loans, bad debt ratio, growth rate of

outstanding loans

2.4 Research design

The research design or research process is summarized in Figure 2.1 below:

Research design

Identify targets, objects and scope

of research

Determine the meaning and methodology of the

topic

Understand and study

the theories of bank

credit, retail credit and

retail banking products

Collection and processing

of secondary data on the status of activities at Vietinbank

Analyze, synthesize and put into the final research thesis

Figure 2.1 Research design used in research topic

Accordingly (Figure 2.1), the research design used in the thesis includes the following main contents:

(1) Identify targets, objects and scope of research

(2) Determine the meaning and methodology of the topic

(3) Understand and study the theories of bank credit, retail credit and retail banking products (4) Collection and processing of secondary data on the status of activities at Vietinbank

(5) Analyze, synthesize and put into the final research thesis

2.4.1 Identify targets, objects and scope of research:

First, the dissertation researcher will determine the objectives, subjects and scope of research

of the topic to have orientation to exploit the contents related to the topic being studied In this essay, the author identifies:

Research subject:

Research the related issues in the retail credit activities in the actual situation of Vietinbank

Ha Tinh branch

Scope of the research:

Content: The research topic focuses on the following main contents:

+ Actual retail credit activities in Vietinbank Ha Tinh

+ The problems posed in the development of retail credit products branch mainly: Loans for business and consumption for individuals and micro-enterprises; Loan for financial proof, study loan

Spatial range: Vietnam Joint Stock Commercial Bank for Industry and Trade - Ha Tinh Branch

Time range: Data are collected, analyzed and used for three years from 2014 to 2016

2.4.2 Choosing research methods of the topic

As the basis for the systematization of theoretical as well as the analysis of retail credit status

in Vietinbank Ha Tinh Chapters 1 and 2 will elaborate on the overview of the research situation and the synthesis of research methods to be used in the thesis Accordingly, the research section will make a statement about the meaning and non-duplication of thesis topic through the process of studying the previous research

The synthesis of research methods will be used in the dissertation to present the research methods as well as the research design used in the thesis Accordingly, the specific contents of the dissertation will be implemented

2.4.3 Learning and studying the theoretical basis related to research topics

After determining the objectives, subjects and scope of the study, the author undertakes to study and study the theoretical basis related to research topics, ie the basis of bank credit, credit retail In this context, methods of collecting secondary data from books, textbooks, scientific reports, previous studies, and secondary data processing methods will be used The concepts of retail credit, roles as well as related content will be clarified, in particular

2.4.4 Collect data on retail credit status in Vietinbank Ha Tinh

Authors will collect secondary data from previous studies, including reference essays, journals, articles related to retail banking activities in Vietinbank Ha Tinh from 2014 to 2016 Then, based on the research methodology, the authors will select, process and analyze data related to the real situation of retail credit in Vietinbank Ha Tinh

2.4.5 Analyze, synthesize and put into the final research thesis

According to the results, the author analyzes, sums up and applies the final research thesis, which

is used in the dissertation in the form of a text or a graphic representation Data processing methods will be thoroughly used in this section Content analysis and synthesis, put into the thesis the final study results will give the final assessment of the real situation of retail credit in Vietinbank Ha Tinh from 2014 to 2016 and as a basis for proposing solutions of developing and improving the quality of retail credit in Vietinbank Ha Tinh in the coming years

CHAPTER 3: CURENT SITUATION OF RETAIL CREDIT ACTIVITIES AT

VIETINBANK HA TINH BRANCH

3.1 Introcution to Vietinbank Ha Tinh

3.1.1 History

In 1988, following the decree of the Government, the establishment of specialized banks separated from the State Bank, the banking sector in Vietnam had shifted from a one-tier banking system to a two-tier banking system Since then, commercial banks have been formed: Bank for Foreign Trade of Vietnam, Bank for Agriculture and Rural Development of Vietnam, Bank for Investment and Development of Vietnam VietinBank was established and put into operation on the basis of the Credit Department of the Ministry of Industry and Trade and the Department of Commercial Credit of the Central State Bank, together with the Industrial and Commercial Credit Departments of the Bank Branch Local government, marks

a turning point in the cause of innovation and development of the banking system in Vietnam VietinBank has subsidiaries such as VietinBank Leasing Company, VietinBank Securities Limited Liability Company and VietinBank Asset Management In addition, VietinBank is co-founder and major shareholder of Indovina bank, Saigon Commercial Joint Stock Bank, International Finance Leasing Company of Vietnam, Asia Insurance Joint Venture Company, Vietnam National Financial System VietinBank is an official member of the Association of Asian Banks, the Association of Vietnamese Banks, the Swift Interbank Global Payments Telecommunications Association, the Visa, Master Card Association, the Chamber of Commerce and Public Works Viet Nam Association of Small and Medium Enterprises (APEC) Financing Organizations

Vietnam Joint Stock Commercial Bank for Industry and Trade - Ha Tinh Branch was established in 2004 under the Decision No 177 / QD-HDQT-NHCT1 dated 26/10/2004 by the Chairman of Vietnam Joint Stock Commercial Bank for Industry and Trade Vietinbank

Ha Tinh is the first branch under Vietnam Joint Stock Commercial Bank for Industry and Trade Vietinbank Ha Tinh branch is located at 82 Phan Dinh Phung Street, Ha Tinh City, Ha Tinh Province From the early days of establishment, the branch has only 26 members from other commercial banks in the area moved to 5 professional departments Over the 14 years of establishment and development, as of December 31, 2017, Vietinbank Ha Tinh has grown steadily with a network of 01 head office, 3 transaction offices class I, 2 transaction offices class II and over 105 employees This is one of the large bank branches with modern technology system that connects all products, banking services, qualified staffs, experienced

and enthusiastic, helping branches can provide customers with modern banking products with high quality As a business unit in the field of currency, borrowing to lend and carry out other business services, with continuous efforts, Vietinbank Ha Tinh has gradually overcome all difficulties and challenges confident, standing on the market VietinBank's business activities

in Ha Tinh always grows firmly and firmly The market share in the business has been expanded in terms of geographic location and market size, fulfilling its assigned tasks, contributing positively on socio-economic development in Ha Tinh province Over the past years with the progress of economic development in general and the social economic situation

of Ha Tinh is also developing strongly, the activities of Vietnam Joint Stock Commercial Bank for Industry and Trade - Branch Ha Tinh also achieved certain improvements Vietinbank Ha Tinh has always been one of 5 year successive the branches to achieve the branch of excellence in the system of Industrial and Commercial Bank Nearly 14 years of establishment and development Vietinbank has overcome many difficulties, challenges, always pioneering in business as well as social security, contributing actively implementing the policy direction of the Party and Government Vietinbank Ha Tinh has constantly strived

to rise and affirm its position as the leading commercial joint stock bank in Ha Tinh Besides,

in the banking system located in Ha Tinh province, VietinBank- Ha Tinh Branch always pioneers in the application of modern technology and e-commerce, non-stop Research and improve existing products and services and develop new products to meet the highest demands of customers

The development objective of Vietnam Joint Stock Commercial Bank for Industry and Trade -

Ha Tinh branch to 2020 is “To build VietinBank Ha Tinh into a leading and modern commercial bank in the locality, to operate effectively, secure and sustainable, healthy credit quality, multi-functional business, strong development of banking services Retail, capable of edge with the system of commercial joint stock banks in Ha Tinh province”

Figure 3.1 Organized at VietinBank Ha Tinh

(Source: Vietinbank Ha Tinh)

- Director:

To sign and execute contracts and other documents related to credit limit-granting activities, contracts for the purchase and sale of valuable papers, secured contracts, contracts related to the handling of debts, Disposing of secured assets, according to regulations of Vietinbank Deciding on authorization levels verdict credit to branch manager level 2, head of trading, head of transaction within the level authorized by the council credit facility is decided, but not exceeding 70% verification of credit Authorization shall be made to deputy directors within the scope of their competence, in accordance with the qualifications, capabilities and experiences of the authorized person

Decision on credit limit, loan limit, guarantee limit loan, guarantee under investment plan, project for a customer below the authority of the credit committee Department

To propose the General Director to decide on the establishment, merger or dissolution of transaction points, the appointment, dismissal, disciplining and rewarding of titles, heads and deputy heads of units of transaction units

- Deputy director:

On behalf of the Managing Director, there are some matters when the Director is absent (under the authorization of the Director) and report the results of work when the Director is present at the unit

Assist the director in the management of a number of operations assigned by the Director and

be responsible to the Director for his decisions

Discussing and commenting with the Director on the performance of the tasks of the Branch under the principles of democracy and the regime of heads

- Administration and Organization Department

It is a function room to assist the Director in matters relating to the organization of the Branch such as: personnel work, recruitment, reception and arrangement of staff in accordance with the principle

Performing the management of seals, performing other administrative tasks, clerical documents, typing, documenting, archiving documents at the request of the Board of Directors, receptionists, means of transport, protection , medical agency

Performing regular repairs, procurement of assets, and stationery

- Enterprise Department and Retail Department

Developing a customer strategy for lending, appraisal and re-appraisal, proposing loan modalities for projects under the jurisdiction of Vietnam Joint Stock Commercial Bank for Industry and Trade - Ha Tinh Branch

To receive and perform loan operations for enterprise customers and individual clients in the locality under their management and according to their competence

Assist the director in directing and inspecting the credit activities of the transaction bureaus in the localities, as well as the information for the prevention and treatment of credit risks Performing analysis of outstanding loans, quarterly overdue debts and implementation of credit professional documents, organizing training courses and examinations for credit officers To receive and implement programs and projects funded by domestic and foreign capital

- Accountant Department

To synthesize and store accounting and bookkeeping documents and make reports according

to the prescribed regime To organize well guidances on safety measures for treasury

To manage and use computerized information equipment in service of business operations according to the regulations of Vietnam Joint Stock Commercial Bank for Industry and Trade Direct accounting, statistic accounting, business accounting, payment and reporting according

to the regulations of the State bank and VietinBank

To make financial plans for the whole branch, to assign financial targets of the entire branch,

to assign financial targets, to make financial statements for the departments, to perform the payment accounting and statutory remittances

- Treasury and currency Department

To supervise, monitor and inspect vaults and all specialized machines and equipment in the field of treasury money, supervise and monitor the cash balance and cash transactions of the transactors in the system The system is designed to detect early differences and transactions are questioned by the transactor

Performing the counting, selecting, classifying and packing of money, ensuring the cash disbursed from the funds of the branches meeting the circulation standards and the regulations

of the State bank and VietinBank

- Transaction Department

To implement programs and products for capital mobilization; Marketing programs, sales support to: exploit capital Vietnamese Dong and foreign currency from customers according

to the current regulations of VietinBank

Performing credit activities for individual clients, households and institutional clients in accordance with current regulations of Vietinbank

3.1.3 Business operation results of Vietinbank Ha Tinh through 2 year (2015-2016)

In the 2 years from 2015 - 2016, Vietinbank Ha Tinh has implemented the technology modernization of the Bank With this technology, the branch has been able to provide banking services to clients with the one-stop transaction model - a new organizational model following the World Bank's technical assistance consultancy, which is implemented synchronously creating a breakthrough in banking technology and a prerequisite for improving service quality and diversifying banking products and services

The application of modern banking technology has facilitated the deployment of new products and services based on advanced utilities of the system such as capital mobilization products, savings deposits and money certificates send money, home checks, traveler checks, remittances, VISA CARD, MASTER CARD, currency exchange ATM card issuance, automatic messaging, payroll services In the credit products, in addition to providing short,