Foreign currency loans accounted for a smaller proportion of total loans and tended to decrease because capital mobilization in foreign currencies did not meet the lending demand. In addition, according to Circular No. 20/2011/TT-NHNN stipulating the purchase and sale of foreign currency in cash by individuals with credit institutions; Individuals and economic organizations are not allowed to freely buy, sell and consume in foreign currencies, so it is reasonable to reduce the proportion of foreign currency loans. However, the Branch always creates maximum conditions for import-export businesses, and at the same time, based on its ability to exploit foreign currency capital to help importers have foreign currency sources for payment.
2.2.3. Other business activities
Payment Activity
In addition to the main activities of capital mobilization and lending, the branch’s payment activities in the period 2010-2012 have always been focused and achieved positive growth over the years. In 2010, income from payment activities reached VND 27.08 billion, accounting for 24.15% of the branch’s total income. In the following years, income from this activity continued to increase. In 2011, income from this activity reached 41.09 billion dong, an increase of 14.01 billion dong compared to 2010, accounting for 26.02% of the branch’s total income. In 2012, income from payment activities accounted for 27.64%, an increase of 13.05 billion VND compared to 2011.
These figures have shown the growth of the branch’s payment activities, proving that the branch’s reputation and service quality is increasingly being consolidated. To achieve those results, the Branch has diversified its payment services, launched new products and services for customers to choose easily; as well as the improvement of equipment and technology systems to help the payment be done quickly, conveniently, safely and always fully meet the diverse needs of customers.
Currency trading activities
In 2011, with good grasping of business opportunities according to market movements, the branch’s foreign exchange business achieved positive results. Total income from this activity reached VND 12.11 billion, an increase of 173% compared to the previous year. In 2012, income from currency business continued to be maintained and increased, reaching VND 17.98 billion, an increase of 48.5% compared to 2011. Besides, the Branch also actively organized various events. seminars for corporate customers and investors to help customers become familiar with derivatives in their investment and risk management activities. Capital trading activities in the money market help effectively use their mobilized capital, ensure liquidity and contribute to generating income for the Branch.
Card issuance activity
Card activities are one of the activities always focused on developing by the Branch. In 2011, card sales were focused on promoting by the Branch through direct distribution channels such as collaborators, marketing links with schools, hospitals, and shopping centers¼A number of card conveniences continuously tested and updated by the Branch. Plus day programs, Sacombankplus cooperates with card agents deployed by Sacombank – Hanoi, stimulating more customers to use cards, contributing to increasing sales of goods and services of partners. In 2012, the branch restructured card operations with the following objectives: reducing costs, improving labor productivity, increasing the number of cards in circulation, increasing new card products and services, and improving the quality of card services. Increase revenue, increase profit. As a result, in 2012, Sacombank – Hanoi’s card issuance continued to grow strongly with the issuance of 15,000 cards, bringing the total number of cards in circulation of Sacombank to more than 1.6 million cards.
2.2.4. Business results
In the period 2010-2012, with the difficult context of the economy in general and the risky business environment of the banking industry in particular, Sacombank – Hanoi actively implemented the policy of not focusing on growth indicators that focus on safe, effective development and achieving positive results.
Table 2.3. Business results at Saigon Thuong Tin Commercial Joint Stock Bank – Hanoi Branch
Unit: billion
Difference
| Targets | 2010 | 2011 | 2012 | Difference | |||
| 2011/2010 | 2012/2011 | ||||||
| Absolute | Relative (%) | Absolute | Relative (%) | ||||
| total income | 112.12 | 157.89 | 195.82 | 45.78 | 40.83 | 37.93 | 24.02 |
| total cost | 31.78 | 63.65 | 87.03 | 31.87 | 100.31 | 23.38 | 36.73 |
| DPRR . cost | 11.57 | 18.83 | 25.14 | 7.26 | 62.74 | 6.31 | 33.51 |
| Profit before tax | 68.77 | 75.41 | 83.65 | 6.64 | 9.65 | 8.24 | 10.92 |
| Profit after tax | 51.58 | 56.56 | 62.74 | 4.98 | 9.65 | 6.18 | 10.92 |
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(Source: Report on business results of Sacombank – Hanoi)
From Table 2.3, it can be seen that the branch’s total operating income increased steadily in the three years 2010, 2011 and 2012. In 2010, the branch’s total income was 112.12 billion VND. By 2011 total income reached 157.89 billion VND, an increase of 45.8 billion VND, equivalent to 40.83% compared to 2010. In 2012, total income continued to increase, reaching 195.82 billion VND, an increase of 37.93 billion VND. equivalent to 24.02% compared to 2011. This result shows that Sacombank – Hanoi’s operation scale is expanding as well as its efficiency is increasing, customers trust and use more and more. Branch’s products and services.
In addition, total costs also increased, but the increase in 2012 compared to 2011 was 36.73%, lower than the increase of 100.31% in 2011 compared to 2010. The reason is because in 2011 the economy Difficulties lead to customers not being able to pay capital to the bank, the bank costs more for monitoring as well as collecting overdue debts. Moreover, in order to ensure bank safety, the appraisal work is tightened in the loan process, so the appraisal cost is also increased. In 2012, the branch focused on cutting costs, so the increase in expenses in the year decreased more than 2011.
Another factor to consider is the DPRR cost of the Branch. DPRR costs also increase steadily in the years corresponding to other expenses. In 2010, the branch deducted 11.57 billion dong to DPRR. This figure in 2011 was 18.83 billion VND, an increase of 62.74% compared to 2010. In 2013, this figure continued to increase by 33.51% compared to 2011, reaching 25.14 billion VND. This increase is due to high overdue debts and bad debts in 2011 and 2012, the Branch has to make more provision for risks to ensure stable business operations.
Since then, the branch’s profit before tax has increased steadily over the years. In 2010, pre-tax profit reached 68.77 billion VND; 2011 reached 75.41 billion dong, up 9.65% compared to 2010; By 2012, pre-tax profit reached VND83.65 billion, equivalent to an increase of 10.92% compared to 2011. In 2011 and 2012, the branch’s profit growth was not high due to sudden increase in expenses. compared with 2010.
Profit before tax increased, so profit after tax also increased. In the current context, when most other banks have poor growth, the results achieved by Sacombank – Hanoi in recent years are evidence of the Branch’s high efforts in developing business activities. business activities; the unity and unification of the collective strength; with the close direction of the leaders of the whole bank. The branch took advantage of all market opportunities, maintained reasonable interest rates, saved operating costs to improve efficiency, and expanded market share in the direction of stability and sustainability to achieve high results. Best.
2.3. General regulations on consumer lending activities at Saigon Thuong Tin Commercial Joint Stock Bank – Hanoi Branch
The lending policy of Sacombank in general and Hanoi Branch in particular, approved and issued by the Board of Directors of Saigon Thuong Tin Bank, is the general legal framework guiding lending activities of branches and officers. Credit. The content of the lending policy is drafted on the basis of: Regulations on loan security promulgated by the government and the State Bank of Vietnam; Regulations on lending issued by the State Bank of Vietnam; Strategy and orientation of credit activities of Sacombank; Credit Handbook of Sacombank.
In addition, the Branch also offers its own credit policy on customers, loan conditions, loan forms and regulations on interest rates and loan guarantees.
As follows:
2.3.1. Principles of consumer lending
Loan capital must be used for the right purposes as agreed in the loan contract
When a customer comes to apply for a loan, the branch requires the customer to clearly state the purpose of the loan on the loan application form, together with a feasible and effective production and business plan or a plan for consumption and service. possible life. The improper use of the loan will affect the efficiency of the loan, the Branch has difficulty in managing capital, affecting the timely repayment of both principal and interest of the customer. , leading to risks in lending activities.
Loans must be repaid in full and interest on time as agreed in the loan contract
The bank’s loan capital is mainly derived from customers’ deposits and loans from the bank. If these loans are not repaid on time, it will definitely affect the operation and reputation of the bank. In order to implement this principle well, the bank must determine the loan term, loan terms, and regularly monitor and urge customers to repay the loan. At the end of the last day of the debt term, if the customer fails to pay the debt, the debt must be converted to overdue debt and the overdue debt penalty interest rate will be calculated.
During the lending process, if the bank detects a customer’s violation, depending on each specific case, the bank will apply appropriate credit sanctions such as early debt collection, sale of collateral, starting lawsuits, etc. to recover capital.
For customers whose loans are secured by the bank, which are assets formed from bank loans, the bank and the customer sign a contract to mortgage the property. Goods cannot be sold without the consent of the bank.
2.3.2. Objects of consumer loans
The branch clearly states that the necessary conditions for a customer when taking out a consumer loan at a bank are: Individuals and representatives of households must have civil legal capacity, civil act capacity and bear responsibility. civil liability as prescribed by law, not exceeding 60 years of age at the end of the loan term; borrowers must have permanent residence or long-term temporary residence registration (KT3) in the province or city (under central authority) where the lending bank is located; has a legitimate purpose of using loan capital; have own capital to participate in the plan, the minimum capital level is equal to 30% of the total capital demand, unless the security measure is applied as pledge of valuable papers; have a source of revenue and a loan – repayment plan to ensure the ability to repay principal, interest and fees during the committed loan period; implement loan security measures in accordance with the Government’s regulations,SBV and instructions of Sacombank.
In parallel with the above conditions, Sacombank – Hanoi has introduced additional conditions for each type of consumer loan to suit the actual situation, while ensuring the principles of safety, prudence and improvement. credit quality. Additional conditions include:
For loans to buy houses, land and apartments, customers must be eligible to register for house ownership and land use rights.
For car loans, customers must commit to buy physical insurance for the entire value of the car during the loan period and authorize the lending bank to receive insurance compensation in case of risks. .
For study abroad loans and loans for financial proof, the borrower must have a kin relationship (including: biological father, natural mother, wife, husband, brother, sister) with the person studying abroad in the country. outside.
For loans to employees secured by salary, the borrower needs to meet the following additional conditions: Being civil servants, public employees and employees participating in paying full social insurance, are working on the payroll or under an indefinite-term labor contract at: (i) State agencies (administrative and non-business), the People’s Army and the People’s Public Security; (ii) Political organizations, socio-political organizations operating with the State budget; (iii) Enterprises with effective production and business activities and long-term development strategies, including: State-owned companies, state-owned joint-stock companies, state-owned limited companies, enterprises belonging to the Ministry of National Defense, public utility enterprises; The labor management agency (which directly manages, employs and pays wages to employees) must have its head office located in the same province.city with bank lending; have a regular and stable monthly income of 1,500,000 VND or more; undertakes to notify the Branch of the change of workplace; undertake to repay the loan early if it breaches the credit contract and fails to implement security measures with assets as required by the Branch.
2.3.3. Collateral
In the process of granting credit to customers, an issue that is always concerned and has a great influence on the bank’s decision to grant credit to customers or not is special assets. Special assets are the factors that help prevent risks when the customer’s expected repayment plan cannot be implemented or unforeseen risks occur. In addition, special assets help improve the responsibility of customers to fulfill their debt repayment commitments, creating a legal and economic basis for the protection of the Branch’s legitimate rights and interests in all cases.
According to the regulations on loan security and Sacombank’s special assets, the list of assets accepted as security for the loan includes:
– Money and valuable papers: Including Vietnamese dong and foreign currency; bills, bonds of the State Treasury, bonds for the construction of the Fatherland, bonds guaranteed by the government and other certificates; passbooks, promissory notes, certificates of deposit, checks; stocks (except for shares, convertible bonds of Sacombank); gold, silver, diamonds, precious metals and other precious stones.
– Real estate: Houses, construction works attached to land (office houses, factories, etc.), including properties attached to houses and construction works; mortgaged land use rights prescribed by the Land Law.
– Immovable property: Automobiles, machinery, production lines, raw materials, finished goods, debt collection rights arising from contracts of sale, lease of assets or provision of services, etc.
The assets used to secure the credit are valued before entering into a contract with the customer. The maximum loan amount is implemented in accordance with the regulations of the State Bank and Sacombank from time to time, by type of special asset and by product and service.
2.3.4. Types of consumer loans
Loan to buy real estate
Real estate loans are a product with a variety of rules for each borrower: low, middle and high income people all have the opportunity to borrow money to buy a house that suits their conditions.
Product features: Maximum loan term 180 months, maximum loan amount can be up to 90% of the apartment value, loan interest rate is calculated on the gradually decreasing balance according to regulations of Sacombank – Hanoi at the time of purchase. loans, flexible principal and interest payment methods.
Car loan
Car loan products of Sacombank – Hanoi best meet the car ownership needs that customers love with many utilities and simplicity in loan procedures provided to customers.
Product features: Maximum loan term of 48 months with maximum loan amount up to 90% of new car value. The lending interest rate is calculated on the reducing balance according to the regulations of the branch at the time of borrowing. Flexible principal and interest payment methods.
Study abroad loan
Sacombank – Hanoi provides study abroad loan products to help customers who need to study abroad to solve financial problems.
Product Features: Maximum loan term is 60 months. The loan level is determined on the basis of the expected cost of studying abroad based on the notice of the foreign side for the entire study abroad period, but in accordance with the value of the fixed assets and in accordance with the loan repayment capacity. Lending methods include installment loans or standby credit lines. Loan disbursement in VND, can be disbursed directly, make money transfer orders at the request of customers, or disburse through credit card issuance. Flexible principal and interest payment methods.