LE THI THU HUONG
LE THI THU HUONG
BUSINESS ADMINISTRATION
ANALYZE AND PROPOSE SOME SOLUTIONS TO LIMIT CREDIT RISK AT ASIA COMMERCIAL JOINT STOCK BANK
MASTER OF SCIENCE THESIS
CLASS 2011A
MAJOR: BUSINESS ADMINISTRATION
LE THI THU HUONG
ANALYZE AND PROPOSE SOME SOLUTIONS TO LIMIT CREDIT RISK AT ASIA COMMERCIAL JOINT STOCK BANK
MASTER OF SCIENCE THESIS
MAJOR: BUSINESS ADMINISTRATION
SCIENTIFIC INSTRUCTOR: ASSOCIATE PROFESSOR, DR. TRAN THI LAN HUONG
INDEX
COMMITMENT ..............................................................................................
LIST OF ABBREVIATIONS .......................................................................................... INTRODUCTION 1
CHAPTER I THEORETICAL BASIS OF CREDIT RISK IN COMMERCIAL BANKS 3
1.1 Overview of credit in commercial banks 3
1.1.1 Concept and characteristics of credit 3
1.1.1.1 Credit concept 3
1.1.1.2 Characteristics of credit 3
1.1.2 Forms of credit 4
1.1.2.1 By credit term 4
1.1.2.2 By credit object 4
1.1.2.3 Purpose of capital use 5
1.1.2.4 Subjects in credit relations 5
1.1.3 Indicators for evaluating credit performance 7
1.1.3.1 Outstanding loan growth rate (%): 8
1.1.3.2 Loan Sales Growth Rate (DSCV) (%) 8
1.1.3.3 Profit margin (%) 8
1.1.3.4 Debt/Total Capital Ratio (%) 9
1.1.3.5 Debt/Mobilized Capital Ratio (%) 9
1.1.3.6 Debt collection ratio ( %) 9
1.1.3.7 Debt collection rate (%) 10
1.1.3.8 Overdue debt ratio (%) 10
1.1.3.9 Bad debt ratio (%) 10
1.1.3.10 Credit Capital Turnover (cycle) 10
1.1.3.11 Number of customers receiving loans 11
1.2 Credit risk in commercial banks 11
1.2.1 Concept and classification 11
1.2.1.1 Concept 11
1.2.1.2 Credit risk classification 12
1.2.2 Signs of credit risk 14
1.2.3 Credit risk measurement indicators 15
1.2.4. Causes of credit risk 19
1.2.4.1 Causes from the bank 19
1.2.4.2 Causes from the customer side 20
1.2.4.3 Objective causes from the socio-economic background 21
1.2.5 Impact of credit risk on banking operations and socio-economy 22
1.2.5.1 Impact on banking operations 22
1.3 Measures to limit credit risk 24
1.3.1 Preventive measures 24
1.3.2 Remedy 26
1.3.3 Treatment measures 27
CHAPTER II ANALYSIS OF CREDIT RISK STATUS AT ASIA COMMERCIAL JOINT STOCK BANK 29
2.1. General introduction to Asia Commercial Joint Stock Bank 29
2.1.1. Formation and development process 29
2.1.2. ACB's management structure 31
2.1.3. Business performance of Asia Commercial Joint Stock Bank 34
2.2 Analysis of credit performance of Asia Commercial Bank 39
2.2.1 General results of credit activities 40
2.2.2 Analysis of credit results by loan term 41
2.2.3 Credit performance analysis by lending currency 42
2.2.4 Analysis of loan results by economic sector 43
2.2.5 General assessment of credit performance 43
2.3 Analysis of credit risk status of Asia Commercial Bank 44
2.3.1 Credit business process 44
2.3.2 Credit risk management of Asia Commercial Joint Stock Bank 50
2.3.3 Analysis of credit risk measurement indicators 55
2.4 General assessment and factors affecting credit risk 62
2.4.1 General assessment of risk management 62
2.4.2 Factors affecting credit risk 65
2.4.2.1 Factors related to Asia Commercial Bank 65
2.4.2.2 Analysis of customer factors 70
2.4.2.3 Analysis of factors belonging to the macro environment 73
CHAPTER III SOME SOLUTIONS TO LIMIT CREDIT RISK AT ASIA COMMERCIAL JOINT STOCK BANK 75
3.1. Development goals and orientation of Asia Commercial Joint Stock Bank in the coming time 75
3.1.1. Business development orientation 75
3.1.2. Orientation of credit activity development 77
3.1.3. Main objectives of credit activities 78
3.2. Some solutions to limit credit risks at Asia Commercial Joint Stock Bank ..79
3.2.1. Perfecting lending policy 79
3.2.2. Complete and strictly comply with the lending process 82
3.2.2.1. Customer information file verification phase 82
3.2.2.2. Stage of appraisal of loan plan and debt repayment ability 83
3.2.2.3. Loan decision stage 84
3.2.2.4. Stage of checking capital usage after lending 85
3.2.3. Establish a department for macroeconomic research, analysis and forecasting 86
3.2.4. Enhancing the role of internal control in banks 87
3.2.5. Building an effective credit rating system 88
3.2.6. Improving the quality of human resources 89
3.3 Some recommendations for the State Bank of Vietnam 91
3.3.1 Improving the quality of management and operations 92
3.3.2 Strengthening inspection and control work 92
3.3.3 Improving the quality of credit information center (CIC) 94
CONCLUSION 96
LIST OF REFERENCES 97
COMMITMENT
I hereby certify that this is my own research work. The information, data and results presented in the thesis are true and derived from the reality of Asia Commercial Joint Stock Bank.
Author
Le Thi Thu Huong
LIST OF ABBREVIATIONS
Abbreviation
Full name | |
Commercial Bank | Commercial Bank |
Joint Stock Commercial Bank | Joint Stock Commercial Bank |
State Bank of Vietnam | State Bank |
CIC | Credit Information Center |
ACB | Asia Commercial Joint Stock Bank |
Vietcombank | Joint Stock Commercial Bank for Foreign Trade of Vietnam |
Vietinbank | Vietnam Joint Stock Commercial Bank for Industry and Trade |
Sacombank | Saigon Thuong Tin Commercial Joint Stock Bank |
SCB | Standard Chartered Bank |
General Meeting of Shareholders | General meeting of shareholders |
Board of Directors | Board of Directors |
KSNB | Internal control |
TCTD | Credit Institution |
HDTD | Credit Council |
HMTD | Credit Limit |
CEO | General Director |
AREV | Center for collateral appraisal of Asia Commercial Joint Stock Bank |
IT | Information Technology |
RRTD | Credit risk |
TSDB | Collateral |
KH | Client |
DN | Business |
BL | Guarantee |
L/C | Documentary letter of credit |
Customer Service Staff | Customer Relations Officer |
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Abbreviation
Full name | |
PFC | Personal Financial Advisor/Consultant |
CA | Credit Officer/Analyst |
GO OUT | Corporate Customer Relations Officer |
RO | Corporate Client Relations Specialist |
RM | Corporate Relationship Manager |
LDO | Document Legal Officer/Specialist |
PD | Approval Level |
CSR Loan | Credit Support Officer/Specialist |
Teller | Transaction staff |
ROE | Return on equity |
ROA | Return on total assets |
NIM | Net interest income ratio |
NQH | Overdue debt |
KPP | Distribution channel |