Solutions to promote the efficiency of consumer lending activities at Saigon Thuong Tin Commercial Joint Stock Bank

Loan turnover is the total amount that the bank has disbursed to customers for a certain period of time. If the amount of money mobilized by the bank is high and the loan turnover is high, it proves that the bank has used the mobilized money effectively, with the aim of bringing profit to the bank. But high loan sales does not mean good lending performance, but it also depends on debt collection in the period.

Table 2.4. Sales of consumer loans at Saigon Thuong Tin Commercial Joint Stock Bank - Hanoi Branch in the period 2010 - 2012

(Unit: billion VND)

Targets	2010	2011	Year 2012	Difference in 2010-2011		Difference in 2011-2012
Targets	2010	2011	Year 2012	Amount of money	Proportion (%)	Amount of money	Proportion (%)
Sales of CVTD	160.68	303.42	551.37	143.04	89.02	247.95	81.71
Total loan sales	957.60	1,762.85	2.757.17	805,25	84.09	994.32	56.40
Proportion of credit card sales (%)	16.46	17.21	19.99	-	-	-	-

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(Source: Report on credit card activities at Sacombank - Hanoi)

Credit card sales accounted for a small proportion of total loans but tended to increase in the period 2010-2012. Looking at Table 2.4, we can see that in 2010, credit card sales accounted for 16.46% of loan sales, in 2011 this figure was 17.21% and in 2012 it was 19.99%. In recent years, when business lending activities are not very positive, branches have begun to focus on lending to individual customers, especially in consumer lending. The branch has grasped the increasing consumer demand of customers, launched development policies in this lending field, such as improving and designing many new products and services, expanding the area. operates and offers attractive consumer loan interest rates and many incentives.It is these factors that have helped credit card activities account for an increasing proportion and achieve positive growth results.

CVTD sales have grown steadily over the years. In 2011, sales reached 303.42 billion VND, an increase of 143.04 billion VND, equivalent to 89.02% compared to 2010. In 2012, sales increased to 247.95 billion VND compared to 2011, respectively. increased by 81.71%. This is a commendable achievement of the Branch in the context that the economy is still facing many difficulties and the consumer lending activities of other banks have not been really effective. The increase in sales of consumer loans is also partly due to the increasing prestige of the Branch, attracting a number of new individual customers, along with promotional activities associated with products with special offers. big for customers. While the interest rates on credit cards of other banks in the market are still quite high, the branch has offered interest rates of only 16.5-17.5%/year for each type of credit card product,In addition, there are incentives for loyal customers and customers with good credit relationship with the Branch. That has also contributed to attracting customers to the branch. When it is increasingly difficult for businesses to disburse due to high bad debts and increasingly stagnant production and business activities, focusing on credit card development is a new direction to help the Branch's operations to be better. more stable, mobilized funds are used more efficiently, bringing higher profits.When it is increasingly difficult for businesses to disburse due to high bad debts and increasingly stagnant production and business activities, focusing on credit card development is a new direction to help the Branch's operations to be better. more stable, mobilized funds are used more efficiently, bringing higher profits.When it is increasingly difficult for businesses to disburse due to high bad debts and increasingly stagnant production and business activities, focusing on credit card development is a new direction to help the Branch's operations to be better. more stable, mobilized funds are used more efficiently, bringing higher profits.

With the goal of becoming the leading retail bank today, Sacombank in general and Sacombank - Hanoi in particular need to try harder to maintain, develop and improve the relationship between customers, especially are individual customers with high consumption demand; as well as upgrading and expanding consumer loan products and services to maximize benefits for customers. However, because consumer loans are often high-risk, the Branch still needs to build a credit process, together with checking and monitoring debts, and setting up full risk provisions to achieve the best effect in the future. consumer lending.

2.4.2. Consumer loan balance

Total outstanding loans is an indicator that reflects the amount of money banks provide to the economy at a time. Combined with loan sales, loan balance reflects the bank's performance. The larger the loan balance, the faster the growth rate of the outstanding balance, proving that the bank has a reputation and diversified and rich customer service. But a high total loan balance does not mean good lending performance because besides those loans are credit risks that banks will encounter.

In terms of credit portfolio size Looking at Table 2.5, we can see that the total outstanding credit balance of Sacombank - Hanoi has grown strongly over the years. In 2010, credit card outstanding loans reached 117.45 billion VND; in 2011 this figure was 205.67 billion dong, an increase of 88.22 billion dong, corresponding to a growth rate of 75.11% compared to 2010. The reason was because in 2011, awareness of the importance of selling loans. Retail, the Branch has really focused on lending activities to individual customers, especially CVTD. Although the economy still faces many difficulties, causing people's consumption demand to decrease compared to the previous year, but with the advantage of operating in a densely populated area, with a relatively high per capita income. , the consumption of customers' goods still brings potential development opportunities for the Branch. Therefore,The branch has cooperated with a number of manufacturers to offer consumer loan packages with many incentives; Incentive programs for consumers via card are many and extremely diverse. For example, when paying with Sacombank-Mastercard to win a trip to Singapore, or Sacombank will refund 5% of the bill that customers pay with this bank's ATM card at all card-accepting points. via POS) nationwide;…. Inheriting and promoting the achievements in 2011, in 2012 the Branch continued to implement activities to promote the effectiveness of credit card. Sales of credit cards in 2012 continued to grow, reaching VND 347.94 billion, up 69.17% over the previous year.For example, when paying with Sacombank-Mastercard to win a trip to Singapore, or Sacombank will refund 5% of the bill that customers pay with this bank's ATM card at all card-accepting points. via POS) nationwide;…. Inheriting and promoting the achievements in 2011, in 2012 the Branch continued to implement activities to promote the effectiveness of credit card. Sales of credit cards in 2012 continued to grow, reaching VND 347.94 billion, up 69.17% over the previous year.For example, when paying with Sacombank-Mastercard to win a trip to Singapore, or Sacombank will refund 5% of the bill that customers pay with this bank's ATM card at all card-accepting points. via POS) nationwide;…. Inheriting and promoting the achievements in 2011, in 2012 the Branch continued to implement activities to promote the effectiveness of credit card. Sales of credit cards in 2012 continued to grow, reaching VND 347.94 billion, up 69.17% over the previous year.Sales of credit cards in 2012 continued to grow, reaching VND 347.94 billion, up 69.17% over the previous year.Sales of credit cards in 2012 continued to grow, reaching VND 347.94 billion, up 69.17% over the previous year.

Looking at the growing credit card balance not only shows that the branch's consumer lending activities are expanding, but also helps the bank's reputation to be increasingly affirmed in the eyes of customers. The development of the branch's credit card activities also contributes to promoting consumption of the population, helping production and business activities and the economy develop more.

In terms of loan structure

Structure over time

Medium and long-term credit balance accounts for the majority of total outstanding loans (from 71.95% to 73.47%) and has almost no change over the years. This is explained by the fact that most of the Branch's consumer loan products have long terms.

Moreover, with the Vietnamese mentality of "settling down and getting a job", home loans still account for a large proportion of consumer lending activities, or when living needs are increasingly improved, loan products Buying a car, lending to study abroad are still many customers' choices. These are also the main products in credit card activities at the Branch and are always focused on development.

In addition to the proportion that does not differ much, the growth rate of medium and long-term credit balances is very good. In 2010, the balance of medium and long-term loans was 86.22 billion VND; in 2011 outstanding loans increased to 61.76 billion dong, equivalent to an increase of 71.63% compared to 2010. By 2012, outstanding loans were 255.63 billion dong, an increase of 107.65 billion dong, equivalent to 72, 74%.

Table 2.5. Outstanding consumer loans of Saigon Thuong Tin Bank, Hanoi Branch for the period 2010 - 2012

Unit: billion dong

Targets	2010		2011		Year 2012		Difference
	2010		2011		Year 2012		2011/2010		2012/2011
	Amount of money	Proportion (%)	Amount of money	Proportion (%)	Amount of money	Proportion (%)	Amount increased (+) decreased (-)	Gain the ratio (%)	Amount increased (+) decreased (-)	Gain the ratio (%)
Total outstanding balance of CVTD	117.45	100	205.67	100	347.94	100	88.22	75.11	142.27	69.17
I. Over time
1. Short-term debt	31.23	26.59	57.69	28.05	92.30	26.53	26.46	84.72	34.61	59.99
2. Medium-term – long-term debt	86.22	73.41	147.98	71.95	255.63	73.47	61.76	71.63	107.65	72.74
II. According to TSDB
1. Having a fixed asset	100.58	85.63	172.58	83.91	287.73	80.11	72	71.58	115.15	66.72
2. No special assets	17.04	14.37	33.09	16.09	69.20	19.89	16.05	94.19	36.11	109.12
III. By loan currency
1. VND	112.10	95.45	192.53	93.61	315.06	90.55	80.43	71.75	122.53	63.64
2. Foreign currency (conversion)	5.35	4.55	13.14	6.39	32.88	9.45	7.79	145.60	19.74	150.22

The reason for the increase in the balance of medium and long-term loans is that the Branch has made active efforts in promoting customers to use products such as long-term loans such as offering lower interest rates. , completing the loan process simpler and faster. Moreover, the Branch also clearly identifies and zoning potential customers for these types of products who are people with good income or more, helping to focus on product marketing as well as brand promotion. more efficiently, achieve better results.

Short-term credit balance accounts for a relatively low proportion of total outstanding loans and has unequal increase and decrease over the years (2010: 26.59%; 2011: 28.05%; 2012: 26.53%). . In 2011, the Branch promoted lending activities for customers' short-term consumption needs, developed more products such as unsecured consumer loans, loans to employees for consumption goods. date, shopping for goods; with a maximum loan amount of up to 200 million VND and loan documents are processed quickly and conveniently in just 2 days from the date of receipt of complete documents. In addition, customers also enjoy very competitive interest rates and bundled Life Insurance for the entire loan term. The above conditions have really attracted many customers, helping the proportion of short-term credit outstanding loans increase, and also increase in absolute number. In 2010, outstanding loans reached 31.23 billion VND;In 2011, short-term credit balance increased by 84.72% compared to 2010 to reach VND 57.69 billion. However, in 2012, these products did not perform as well as in 2011 when the competition between banks became more and more fierce, other banks also offered similar service packages and products with similar products and services. interest rates are more favorable, causing the proportion of outstanding loans to decrease. However, it is thanks to the prestige as well as the efforts to perfect products as well as service quality that have helped the Branch always have a stable number of consumer customers and help the short-term credit card balance to continue to grow. In 2012, short-term credit balance was VND 92.30 billion, equivalent to an increase of 59.99% compared to 2011. In 2012, the economy was still difficult, consumers were more thrifty, so short-term consumption decreased in rate. growth compared to 2011.69 billion VND. However, in 2012, these products did not perform as well as in 2011 when the competition between banks became more and more fierce, other banks also offered similar service packages and products with similar products and services. interest rates are more favorable, causing the proportion of outstanding loans to decrease. However, it is thanks to prestige as well as efforts to perfect products as well as service quality that have helped the Branch always have a stable number of consumer customers and help the short-term credit card balance to continue to grow. In 2012, short-term credit balance was VND 92.30 billion, equivalent to an increase of 59.99% compared to 2011. In 2012, the economy was still difficult, consumers were more thrifty, so short-term consumption decreased in rate. growth compared to 2011.69 billion VND. However, in 2012, these products did not perform as well as in 2011 when the competition between banks became more and more fierce, other banks also offered similar service packages and products with similar products and services. interest rates are more favorable, causing the proportion of outstanding loans to decrease. However, it is thanks to prestige as well as efforts to perfect products as well as service quality that have helped the Branch always have a stable number of consumer customers and help the short-term credit card balance to continue to grow. In 2012, short-term credit balance was VND 92.30 billion, equivalent to an increase of 59.99% compared to 2011. In 2012, the economy was still difficult, consumers were more thrifty, so short-term consumption decreased in rate. growth compared to 2011.these products are not as effective as in 2011 when the competition between banks is getting fiercer, other banks also offer similar service packages and products with more preferential interest rates, causing the debt ratio to decrease. However, it is thanks to prestige as well as efforts to perfect products as well as service quality that have helped the Branch always have a stable number of consumer customers and help the short-term credit card balance to continue to grow. In 2012, short-term credit balance was VND 92.30 billion, equivalent to an increase of 59.99% compared to 2011. In 2012, the economy was still difficult, consumers were more thrifty, so short-term consumption decreased in rate. growth compared to 2011.these products are not as effective as in 2011 when the competition between banks is getting fiercer, other banks also offer similar service packages and products with more preferential interest rates, causing the debt ratio to decrease. However, it is thanks to the prestige as well as the efforts to perfect products as well as service quality that have helped the Branch always have a stable number of consumer customers and help the short-term credit card balance to continue to grow. In 2012, short-term credit balance was VND 92.30 billion, equivalent to an increase of 59.99% compared to 2011. In 2012, the economy was still difficult, consumers were more thrifty, so short-term consumption decreased in rate. growth compared to 2011.It is thanks to prestige as well as efforts to perfect products as well as service quality that have helped the Branch always have a stable number of consumer customers and help the short-term credit balance to continue to grow. In 2012, short-term credit balance was VND 92.30 billion, equivalent to an increase of 59.99% compared to 2011. In 2012, the economy was still difficult, consumers were more thrifty, so short-term consumption decreased in rate. growth compared to 2011.It is thanks to prestige as well as efforts to perfect products as well as service quality that have helped the Branch always have a stable number of consumer customers and help the short-term credit balance to continue to grow. In 2012, short-term credit balance was VND 92.30 billion, equivalent to an increase of 59.99% compared to 2011. In 2012, the economy was still difficult, consumers were more thrifty, so short-term consumption decreased in rate. growth compared to 2011.

Structure by loan type Consumer loans in VND accounted for a large proportion of total outstanding loans, but tended to decrease slightly in the period 2010-2012. In 2010, the proportion of outstanding loans in VND was 95.45%, in 2011 the proportion decreased to 93.61% and in 2012 it was only 90.55% of the total outstanding loans. Realizing that the bank's main source of mobilized capital is from local currency and the majority of customers are domestic residents, the loans are mainly for domestic consumption. That explains why credit cards in local currency account for a large proportion of total outstanding loans. However, the proportion of loans in local currency has tended to decrease in recent years because the Branch has begun to pay more attention to consumer loans in foreign currencies, while international trade and diplomacy activities development, customers borrow foreign currency to meet the purpose of studying abroad,Labor export or business with foreign partners… increased. This also explains the growth of the branch's foreign currency loan balance. In 2010, consumer loans in foreign currencies reached 5.35 billion VND; in 2011 increased to 13.14 billion VND, corresponding to an increase of 145.60% compared to 2010; 2012 increased to 32.88 billion VND, equivalent to an increase of 150.22% compared to 2012.

Structure by special assets From Table 2.5, we can see that credit portfolios with special assets account for a large proportion compared to loans without special assets. However, from 2010 to 2012, the proportion of loans with special assets is gradually shrinking and the proportion of loans without special assets is expanding. Specifically, in 2010, outstanding loans for consumer loans with special assets were VND 100.58 billion, accounting for 85.63% of total outstanding loans, in 2011 reaching VND 172.58 billion, accounting for 83.91% and in 2012 it was VND 172.58 billion, accounting for 83.91%. 287.73 billion dong, accounting for 80.11%. Loans without special assets for the three years 2010, 2011 and 2012 respectively were 17.04 billion dong, accounting for 14.37%, 33.09 billion dong, accounting for 16.09% and 69.20 billion dong, accounting for 19. 89%. This is explained by the fact that lending without special assets is being implemented by the Branch to attract more customers. Although the proportion of outstanding loans with special assets decreased in proportion, in absolute terms, the balance of credit loans with special assets was increasing.In 2011, outstanding loans with special assets increased by 72 billion VND, equivalent to 71.58% compared to 2010, in 2012 increased by 107.65 billion VND, equivalent to 72.74% compared to 2011. When credit card sales increased over 80% Every year, with the growth rate of outstanding loans of credit institutions with special assets as above, we can see that most consumer loans of customers are strictly guaranteed, this is a good sign proving the safety in operations. branch's consumer loans. In addition, outstanding loans without special assets also increased sharply during this period. In 2011, outstanding loans without special assets increased by 16.06 billion VND, equivalent to 94.19% compared to 2010, in 2012 this figure was 36.11 billion VND, equivalent to 109.12%. The reason is that in loan appraisal, the branch has performed well and fully completed the procedures, only accepting customers with healthy finances.With full capacity and civil behavior to borrow capital, most customers access capital without special assets.

In addition, old customers also create a reputation with the bank, so they can get loans without special assets. The branch also deployed more credit card products without special assets such as unsecured loans, loans to employees and attracted more customers.