CHAPTER III FOREIGN CASH BUSINESS STRATEGY OF VIETINBANK MTOII
I. ANALYSING FOREIGN CASH BUSINESS CONDITIONS AT VIETIBANK MTOII
I.1) Strengths:
Having advantage conditions to realize object developing customer network who has needs to hand in, draw out foreign cash:
Vietinbank MTOII which is one of the commerce banks in HCM city area is permitted by state bank that can export and import foreign cash;
Vietinbak MTOII is given by Vietinbank Head Office on to be a clue bank to receipt and payment foreign cash for 16 branches of Vietinbank in HCM city and 41 branches in south towns. With this clue role Vietinbank MTOII built-in a network receipt and payment foreign cash to attract and expense foreign cash.
Vietinbank MTOII exchange foreign cash recently with 15 other commerce banks without system in area of HCM city. Consequently, expanding plan supply ability foreign cash for banks in area HCM city that is so realizable because of residual a huge number of banks in area HCM city which have not exchanged foreign cash with Vietinbank MTOII yet.
Two foreign banks HSBC and UOB often buy and sell foreign cash with commerce banks in Viet Nam all ones are agent banks of Vietinbank MTOII and contracted sale and purchase contract foreign cash with Vietinbank MTOII.
Vietinbank MTOII has a seat at centre district in HCM city, it is an advantage for Vietinbank MTOII to develop bank services what have a connection with receipt and payment foreign cash. Because HCM city is a city at top the country about accepting overseas national currency exchange resource is transferred from overseas, accepting tourists who are foreigners, numbers of Vietnamese who go abroad, traveling/ cure disease and repatriation resource, drawing out of huge
number of foreigners who work for diplomacy organizations, economic organizations and commerce organizations in Viet Nam, etc.
Be determined to become one of the centers that export import foreign cash to satisfy needs of foreign cash in area HCM city and for system of Vietinbank:
Executive board of Vietinbank MTOII built project to Vietinbank MTOII to become a foreign cash exchange center in area HCM city;
Vietinbank MTOII has cadre forces, staffs who are trained completely, timely about kinds of currency foreign, having standard, experiences about foreign cash business management.
Vietinbank MTOII current account for 15% foreign cash export market share of commerce banks in area HCM city.
1.2) Weaknesses:
Compares with Vietcombank HCM so that Vietinbank MTOII processes accounting for foreign cash exchange between Vietinbank MTOII with commerce banks in area HCM city be still slow. Reason of this default in paying that is caused whole commerce banks in area that have need to receipt and expense foreign cash all open deposit account at Vietcombank HCM while only have a few having foreign cash deposit account at Vietinbank MTOII. This makes processing/
transferring money to account for foreign cash exchanges between commerce banks ( have not opened foreign cash account at Vietinbank MTOII) with Vietinbank MTOII not quick and less advantage when these commerce banks exchange foreign cash with Vietcombank HCM.
Nearly 50% got foreign cash source of Vietinbank MTOII that is from currency foreign collection agents with high mobilizing expenditure (must pay brokerage expenses for collection agents) this makes Vietinbank MTOII hardly in realizing competitive method about fee in foreign cash exchange with commerce banks that have braches network, public relation, exchange point whole in area HCM city, such as: ACB, DONGA, EXIMBANK, SACOMBANK, VCB HCM.
I.3) Opportunities:
Needing of foreign cash expenses in area HCM city as well as in south area be still so high:
Overseas national currency exchange customers often have needing accepted money by currency foreign. In 2007 number of overseas national currency exchange money transferred to Viet Nam convert to USD according to commerce banks system that is 5,6 billions of USD, in there at HCM city is 3,6 billions of USD. Foresee that overseas national currency exchange is transferred to HCM city according to commerce banks system in 2008 will be 4 billion of USD.
People has saving habit, accumulate by currency foreign than VND.
Through government of Viet Nam had regulation in domain of Viet Nam that only permitted using and circulating VND but in fact some buying and selling actions outside free market sellers and buyers still want to account together by currency foreign.
Policies to encourage Vietnamese at overseas transfer money to country and permit people is owned and storage currency foreign this brings to actual situation in free market circulating foreign cash parallel with domestic currency although this circulation is not permitted by law
According to export – import actions foreign cash can be used as a business mean to develop bank service to take part in making increase effect in common business of Vietinbank MTOII.
Viet Nam is a developing country so Trade deficit is indispensable trend to day. Export accounting turn-over at Vietinbank MTOII is continuous growth pass years and import accounting turn-over always is higher than export that is a advantage condition for Vietinbank MTOII purchasing foreign cash to make up for currency foreign capital source import accounting is short of above.
Attracting many customers import accounting, exchange with Vietinbank MTOII by sell timely and enough currency foreign with competitive rate for customers.
I.4) Threats:
Many commerce banks (ACB, Sacombank, Eximbank, DONGA) in past must exchange currency foreign with Vietinbank MTOII to balance foreign cash to meet the customer demand so now became competitors in foreign cash business area with Vietinbank MTOII. Reason is these banks were:
Increasing capital, expanding branches network in area HCM city and towns to attract and consume a huge foreign cash;
Caused founding/ connection with overseas national currency exchange company operating effect scoop market share to head a list in area HCM city about accepting overseas national currency exchange money so having advantage conditions more than Vietinbank MTOII in expenses effect foreign cash source pay in bank and to restrain having to export to overseas superfluous foreign cash
In area HCM city without 4 commerce banks Vietinbank MTOII, Vietcombank HCM, Agribank, BIVB more and more have many commerce banks join in foreign business having enough conditions can be licensed by State bank for export-import foreign cash directly as: Eximbank, ACB, DongAbank, VP bank, Sacombank, SCB, etc.