Overview Of Ba Dinh Branch Of Industrial And Commercial Bank

• Consumer loan demand of KHU

In a market economy, when the demand for a certain commodity increases, it is necessary to increase the supply to meet that demand. In the field of credit, the same is true. Consumers with a large demand for capital for consumption will push the bank to improve the quality of credit card, thereby attracting a larger number of customers to the bank. Therefore, the demand for consumer capital of customers is an objective factor affecting the improvement of the quality of credit records of commercial banks.

• The customer's ability to meet loan conditions: is considered in terms of: financial capacity and collateral of the customer. These factors determine whether they can get a bank loan or not.

Pre-credit analysis is an indispensable step in the lending activities of commercial banks. Through that, the bank understands the financial situation and capacity of the customer who needs to borrow money. The stronger the customer's financial situation and capacity, the greater the ability to meet the lending conditions. Credit card is a credit activity that contains many risks, so banks always require collateral for loans. Collateral is the basis for the Bank to determine the loan level for customers. If the customer has no collateral, no guarantor or the collateral value is low and unqualified, it is difficult to get a loan from the bank. Thus, the financial situation, financial capacity and collateral are decisive factors to the ability of customers to meet loan conditions for consumer loans. The better those indicators, the easier it is to improve the quality of credit records of commercial banks.Factors from the business environment

• General situation of the economy: Banking activities are related to all sectors in the economy. Therefore, fluctuations of the economy will have an impact on the activities of banks, especially lending activities. Specifically, when the economy grows, people's consumption demand increases. Commercial banks tend to improve credit quality, thereby attracting many customers and expanding investment fields.

• Legal environment: Credit is one of the most risky activities of banks, but it is very important for the economy. Therefore, it is subject to very strict control of the law. A clear and transparent legal environment with a system of reasonable and unified legal documents is a condition for customers to have easier access to the capital of commercial banks.

• Socio-political environment: A stable socio-political environment helps people's living standards to be improved, consumption demand increases in both quality and quantity. On the contrary, the unstable socio-political environment will make people's consumption tendency decrease, leading to the narrowing of credit card activities of commercial banks. In summary, the improvement of credit card quality is not only influenced by factors inside commercial banks, but also from many other objective factors. Whether that activity is good or bad, strong or weak, is determined by these factors. So, how is the current status of credit card activities of Ba Dinh branch of Industry and Trade Bank ? How do the above factors affect this situation? These issues will be clearly presented in chapter 2. CHAPTER 2. CURRENT LIVING STATUS OF BA DINH INDUSTRY AND TRADE BANK BRANCH

2.1 Overview of Ba Dinh Branch of Industrial and Commercial Bank

2.1.1 History of establishment and development of Ba Dinh Branch of Industry and Trade Bank

The branch of Ba Dinh Industrial and Commercial Bank with the international transaction name VietinBank Ba Dinh (Vietnam Industrial and commercial Bank Ba Dinh) was established in 1959 with the name when it was established as "Ba Dinh Bank Branch under Ba Dinh Bank". Hanoi restaurant", the location is located at Doi Can Street - Hanoi (now 142 Doi Can Street). The branch was established with the mission: both building facilities, strengthening the organization and operation of the bank (operating in the form of supply and allocation according to assigned targets and plans). The branch's operational objectives are subsidized, serving, not profit-oriented, operating under a one-level management model (the State Bank) and this model has been maintained since its establishment until the end of its operation. It ended in July 1988.

The number of Bank staff at that time was over 10 people. On July 1, 1988, implementing Decree 53 of the Council of Ministers (now the Government), the banking industry changed its operations from administrative management and planning to economic and business accounting according to the model of business model. In the form of two-level banking management (State Bank - Commercial Bank), taking profit as the goal in business activities, state-owned commercial banks were born (Industrial Commercial Bank, Commercial Bank) respectively. Foreign Trade, Investment and Development Bank, Bank for Agriculture and Rural Development).

In the context of that transformation, Ba Dinh Bank was also transformed into a state-owned commercial bank branch with the name Ba Dinh Branch of Industrial and Commercial Bank under Hanoi City Bank for Industry and Trade. Real business activities, through the innovation of communication style, serving, taking profit as the business goal, along with the diversification of service business, exploitation and expand markets, improve and introduce new products and services into business. At this time, Ba Dinh Industrial and Commercial Bank operates under the management model of a three-level Industrial and Commercial Bank (Central - City - District). With this management model, in the early years of establishment (July 1988 - March 1993), the business activities of Ba Dinh Commercial Bank were inefficient, unable to promote the strengths and advantages of a local commercial bank branch. capital table,due to the fact that business activities depend entirely on the Incombank of Hanoi, along with the difficulties and challenges of the first years of economic model transformation according to the Party's innovation line. Facing difficulties and obstacles from the organizational and management model as well as the mechanism, starting from April 1, 1993, Incombank of Vietnam piloted the model of two-tiered Informatics Bank (Central - District level). , eliminating the intermediary level of Hanoi City Incombank, along with renovating and strengthening staff work.

Therefore, right after upgrading management, along with renovating the operating mechanism, and strengthening the talented young team, the business activities of Ba Dinh Commercial Joint Stock Bank have gained a new impetus, operating according to the business model. a versatile commercial bank with full capacity and reputation to actively participate in competition in the market.Facing difficulties and obstacles from the organizational and management model as well as the mechanism, starting from April 1, 1993, Incombank of Vietnam piloted the model of two-tiered Informatics Bank (Central - District level). , eliminating the intermediary level of Hanoi City Incombank, along with renovating and strengthening staff work. Therefore, right after upgrading management, along with renovating the operating mechanism, and strengthening the talented young team, the business activities of Ba Dinh Commercial Joint Stock Bank have gained a new impetus, operating according to the business model. a versatile commercial bank with full capacity and reputation to actively participate in competition in the market.Facing difficulties and obstacles from the organizational and management model as well as the mechanism, starting from April 1, 1993, Incombank of Vietnam piloted the model of two-tiered Informatics Bank (Central - District level). , eliminating the intermediary level of Hanoi City Incombank, along with renovating and strengthening staff work. Therefore, right after upgrading the management along with renovating the operating mechanism and strengthening the capable young team, the business activities of Ba Dinh Commercial Bank have gained a new impetus. a versatile commercial bank with full capacity and reputation to actively participate in competition in the market.Immediately after upgrading management, along with renovating the operation mechanism, and strengthening the capable young team, the business activities of Ba Dinh Commercial Bank have gained a new impetus, operating under the model of a diversified commercial bank. capable, have full capacity and reputation to participate actively in competition in the market.Immediately after upgrading management, along with renovating the operation mechanism, and strengthening the capable young team, the business activities of Ba Dinh Commercial Bank have gained a new impetus, operating under the model of a diversified commercial bank. capable, have full capacity and reputation to participate actively in competition in the market.

Quickly approaching the market and constantly innovating and perfecting themselves to adapt to the business environment in the market economy mechanism. Since the transformation of the new management model up to now, the business activities of the Ba Dinh branch of Incombank have constantly developed in the direction of "Stability - Safety - Efficiency and development" in both scale and size. , growth rate, area of operation, as well as in terms of structure, network, and organizational structure. Up to now, the operation apparatus of Ba Dinh Bank's Branch has more than 300 employees (of which over 85% have university and post-graduate degrees, 10% have intermediate degrees and are training at university). education, the rest is simple labor), with 12 professional departments, 1 transaction office, 12 savings funds, operating in a large area including Ba Dinh - Hoan Kiem - Tay Ho districts. From 1995 to present,Business activities of Incombank Ba Dinh branch in Ba Dinh area was continuously recognized as one of the best branches in the system of Incombank of Vietnam by the Prime Minister in 1998, in 1999 by the President of Vietnam. The country awarded the Third-class Labor Medal, continuously during the prison years from 2000 to 2005 and received many rewards: the Chairman of the Hanoi People's Committee awarded the certificate of merit, the Governor of the State Bank of Vietnam awarded the certificate of merit, was awarded the Certificate of Merit by the Council of Powers - Economic Sector. The bank proposed to the Prime Minister to present a certificate of merit.The Chairman of the Hanoi People's Committee awarded the certificate of merit, the Governor of the State Bank of Vietnam awarded the certificate of merit, and the Council of Economic Affairs - Banking Sector proposed the Prime Minister to give the certificate of merit.The Chairman of the Hanoi People's Committee awarded the certificate of merit, the Governor of the State Bank of Vietnam awarded the certificate of merit, and the Council of Economic Affairs - Banking Sector proposed the Prime Minister to give the certificate of merit.

2.1.2 Organizational model

According to Decision No. 068/QD-CNBD-TCHC on the transformation and rearrangement of the branch's organizational model and Decision No. 1500/QD-NHCT on amending and supplementing functions and duties of departments and divisions Branch of Incombank, the organizational model of Ba Dinh Branch of Industry and Trade Bank includes the following professional departments:

2.1.3 Operations of the Branch in the last 3 years

2.1.3.1 Capital raising activities

The competition between banks in mobilizing capital is a reality that has taken place in recent years and tends to be stronger. In that context, the branch's capital continued to grow, which is the combined result of advanced technology application, product development and civilized transaction style of the bank's staff. The table below shows the movement of the branch's mobilized capital in the last 3 years: Table 2.1 Capital mobilization situation

Unit: billion dong

Targets	2005	2006	2007
Targets	Value	Proportion	Value	Proportion	Value	Proportion
Sort by sender
TG of economic organizations		2050	49.2%	1962	45.1%	2817	54.8%
TG of the population		2114	50.8%	2388	54.9%	2324	45.2%
Sort by currency
Deposit VND		3469	87.7%	3497	80.4%	4040	78.6%
Foreign currency deposit		695	12.3%	853	19.6%	1101	21.4%
TOTAL		4164	100.0%	4350	100.0%	5141	100%

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(Source: annual summary report of the Bank's Branch, 2005-2007)

The branch's mobilization sources include: deposits from economic organizations and deposits from residents. The amount of mobilized capital has increased gradually over the years, showing that the branch's ability to raise capital is effective. Capital growth rate: in 2006 increased by 4.5% compared to 2005, in 2007 increased by 18.2% compared to 2006. Capital mobilization activities of the branch had strong breakthroughs, although in the late 2007 period. There was a fierce interest rate race among banks. The development of the stock market led to an increase in the number of accounts that investors opened at securities companies, leading to an increase in the amount of payment deposits at branches.

For deposits from economic organizations, although in 2006 it decreased by 4.3% compared to 2005, but by 2007 the total deposit from economic organizations increased to 43.6%. This proves that the branch has not only strengthened its relationship with traditional customers but also attracted many new customers. Thanks to offering attractive interest rates, flexible mobilization tools and providing modern payment services, the branch has mobilized a large amount of deposits from economic organizations.

The TG segment of the population: the implementation of the commitment on ceiling interest rates of branches as well as other state-owned commercial banks to the Bankers Association has limited the branch's competitiveness in the race on deposit interest rates with other NHs. While joint stock commercial banks race to raise interest rates to mobilize deposits from all sectors of the economy, state-owned commercial banks are bound by regulations on ceiling interest rates. However, in that situation, the branch still maintained the growth rate of deposit mobilization from the population. In 2006, the amount of deposits mobilized from the population increased by 13%, in 2007 it decreased slightly by 2.7%, still reaching a high level of 2324 billion VND.

Regarding the structure of mobilization sources, it can be seen that the change in the direction: the proportion of deposits of economic organizations has grown strongly, while the proportion of deposits of the population has increased slightly and kept at a stable level.

Residential banks are tending to shift from state-owned commercial banks to joint-stock commercial banks, due to the high interest rates offered by joint-stock commercial banks. However, the branch still maintains a steady growth rate due to certain competitive advantages and familiar customers, of course the branch still needs to pay more attention to raising capital from this department, because the Capital from the population has great potential and is increasingly important for banks. Moreover, the majority of people still have confidence in state-owned commercial banks. That is the factor that the branch can take advantage of to increase capital mobilization from the population.

2.1.3.2 Credit activities It can be said that credit is a continuation of capital mobilization.

In order to fulfill the business tasks assigned by the Bank of Industry and Trade, the branch has continuously expanded its operations, improved the quality and increased the scale of loans. In addition, the branch also paid attention to credit safety on the basis of complying with the principles, safety index and credit limit prescribed by Industry and Trade Bank.

Table 2.2 Credit activities

Unit: billion dong

Targets

2005

2006

2007

	Value	Value	Value
Sort by currency
Outstanding balance in VND	1950	1710	1844
Outstanding balance in foreign currency	866	650	799
Classification by loan object
Business loan	2789.6	2309.7	2572.6
Consumer loans	26.4	50.3	70.4
Total loan balance Overdue debt	2816 5.9	2360 19.6	2643 4.4

(Source: Summary report for the year 2005-2007)

Outstanding loans in 2006 decreased by 16.2% compared to 2005, but in 2007 increased by 12% compared to 2006. The reason was due to the production, business and financial situation of some Construction - Transport enterprises. Transport has shown weakness in recent years and has not yet been overcome. Loan balance is shown in Figure 2.2

Credit quality of the branch has improved, although in 2006 the rate of overdue debt increased dramatically, but in 2007 the credit quality has stabilized again.

2.1.3.3 Business results

Although the implementation of the business plan targets encountered many difficulties, the branch was still determined to complete the business plan targets and made strong changes. Specifically:

Table 2.3: Accounting profit

(Unit: million VND)

Targets	2005	2006	2007
Accounting profit	90,681	129,000 won	134,727

(Source: Annual summary report of the Bank of Incorporation BD 2005-2007)

Profit in 2006 increased by 42.26% compared to 2005, in 2007 increased by 5.7% compared to 2006. It is thanks to that achievement that the branch has been recognized by the People's Committee of Ba Dinh District as an excellent unit. in the emulation movement of the self-defense force of Ba Dinh district.

2.2 Current status of branch's consumer lending

2.2.1 Legal basis for consumer lending activities at Ba Dinh Branch of Industry and Trade Bank

Like other banks and credit institutions, consumer lending activities of Ba Dinh Branch of Industry and Trade Bank also comply with a number of legal documents and the State Bank such as:

Law on Credit Institutions No. 02/1997/QH10 dated 12/12/1997, Law amending and supplementing a number of articles of Law on Credit Institutions No. 20/2004/QH11 dated June 15, 2004.