While quality is a specific transaction and quality is an overall judgment made after a cumulative evaluation process, satisfaction researchers take the opposite view.
In this study, the author also agrees with the view that it is impossible to evaluate service quality in general, such as whether the service quality is high or low, but service quality must be measured by a set of scales to measure the component concepts that are related to each other and that create service quality (Nguyen Dinh Tho, 2007, p.139). Thus, after qualitative research on the SERVQUAL model of the components in the service quality model and customer satisfaction using ATM cards, hypotheses about the influence of perceived service quality factors are put forward according to Parasuraman's research model, which includes 5 components as follows:
H1: Reliability has a significant direct impact on customer satisfaction, when the reliability of ATM cards is assessed by customers to increase, the level of customer satisfaction will increase and vice versa .
H2: Customer empathy has a significant direct impact on customer satisfaction, when customer empathy about ATM card increases, customer satisfaction will increase and vice versa .
H3: Tangible means have a significant direct impact on customer satisfaction. When the tangible assets of ATM cards are evaluated by customers to increase, the level of customer satisfaction will increase and vice versa .
H4: Service efficiency has a significant direct impact on customers. When the effectiveness of ATM card service of the bank is evaluated by customers to increase, the level of customer satisfaction will increase and vice versa .
H5: Assurance has a significant direct impact on customer satisfaction. When the bank's assurance on ATM cards is rated by customers to increase, customer satisfaction will increase and vice versa .
2.3.2. ATM network operations and customer satisfaction
ATM network can have a significant impact on customer satisfaction regarding convenience and accessibility when customers use card services of the company.
bank. Therefore, this is also a factor that needs to be considered when analyzing, especially for Vinh Long province where the network is unevenly distributed among districts in the province. Through the preliminary research process, the network factor is a factor that customers are interested in and needs to be included in the research model to assess the level of impact on satisfaction.
H6: Network has a significant direct impact on customer satisfaction, when the bank's ATM card network is rated by customers to increase, the customer satisfaction level will increase and vice versa .
2.3.3. Perceived price and customer satisfaction
According to Fornel (1996), the first factor determining customer satisfaction is perceived quality, the second factor is perceived price. Customer satisfaction is the result of customers' perception of value while value is measured by the relationship between perceived service quality and service price (Hallowel, 1996, cited in Bexley, 2005, p.68). Service price is the customer's subjective perception of the price of similar services with other suppliers (Nguyen Dinh Tho, 2007). In this study, perceived prices are deposit interest rates, loan interest rates and service fees when compared with other banks. Deposit interest rates can be understood as savings interest rates, non-term payment account interest rates, loan interest rates can be business loans, real estate loans, car loans, consumer loans... and service fees are money transfer fees, statement printing fees, card issuance fees, online banking service fees... The next hypothesis is put forward:
H7: Perceived service price has a significant direct impact on customer satisfaction. When customers perceive the bank's service price for ATM cards to be high or low, customer satisfaction increases or decreases accordingly .
2.4. PROPOSED RESEARCH MODEL
Through referring to studies on customer satisfaction, the author proposes to build a framework model for researching customer satisfaction using ATM card services. This article is based on the model of perceived performance - SERVPERF scale (1992) with appropriate adjustments to the research field to build the model as follows:
H6
H1
Empathy
H2
H3
ATM card service customer satisfaction
Service efficiency
H4
H5
H7
Network
Trust
Tangible means
Guarantee
Price
Figure 2.6: Proposed research framework model
Based on the research model, the author ran SPSS and AMOS to analyze the factors affecting customers' SHL and find the most suitable model.
2.5 SUMMARY OF CHAPTER 2
Chapter 2 of the thesis deals with issues of theoretical basis related to services, customer satisfaction, overview of bank cards and ATM cards. At the same time, the study also provides some models to measure the satisfaction of foreign and domestic customers. Based on the appropriate model, the topic provides an applied research framework to measure the satisfaction of customers using ATM card services of the Foreign Trade Bank, Vinh Long branch for the next chapter.
CHAPTER 3 RESEARCH METHODOLOGY
Chapter 2, the study presented the theoretical basis of research concepts and research models along with proposed research hypotheses. Chapter 3 presented an overview of the research area, research objects, current status of research problems, research design and at the same time presented the focus of scientific research methods used to evaluate the scales used to measure research concepts as well as test the model and research hypotheses stated in Chapter 2.
3.1 RESEARCH CONTEXT
3.1.1 Overview of Vinh Long province and Vinh Long banking industry
3.1.1.1 General introduction to Vinh Long province
Vinh Long is a province located in the center of the Mekong Delta, about 135 km southwest of Ho Chi Minh City, located between the two branches of the Tien and Hau rivers and right in the center of the Mekong Delta. To the southeast is Tra Vinh province, to the southwest is Can Tho city, to the northwest is Dong Thap province, to the north and northeast is Tien Giang and Ben Tre provinces. Compared to the 12 provinces of the Mekong Delta, Vinh Long is a relatively small province in terms of both area and population of the entire Mekong Delta, but it is the province with the highest population density (698 people/km2), low arable land area per capita.
Vinh Long province has entered a period of innovation, with great efforts from the Party and people in the province. The province's economy has had quite stable growth, shifting the economic structure in a positive direction. The shift in sectoral structure is clearly shown in the proportion of the industrial and service sectors constantly increasing, the proportion of the agricultural, forestry and fishery sectors decreasing correspondingly while still maintaining the growth rate in all economic sectors.
Gross domestic product (GDP) in 2013 (calculated at 1994 prices) reached 9,842 billion VND, 1.4 times higher than in 2009. The average growth rate in the period 2009-2013 was 8.82%/year, of which the agriculture, forestry and fishery sector increased by 3.38%, and the industrial sector increased by 1.6%.
Industry and construction increased by 13.58%, services increased by 10.8%. GDP per capita in 2013 reached 30.15 million VND, equivalent to 1,436 USD, 2.5 times higher than in 2009.
Chart 3.1: GDP value by economic sector in the period 2009-2013
3.909 | |||||||||
3,663 | |||||||||
3,394 | |||||||||
3,047 | |||||||||
2,594 | |||||||||
2,793 | |||||||||
2,499 | |||||||||
2.203 | |||||||||
1,678 | 1,881 | ||||||||
2,892 | 2,998 | 3.105 | 3.137 | ||||||
2,746 | |||||||||
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![Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015
zt2i3t4l5ee
zt2a3gsnon-credit services, joint stock commercial bank
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At that time, the Branch had to set aside a provision for credit risks, which reduced the Branchs income.
Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015
Unit: Billion VND
140
120
100
80
60
40
20
0
63.3
80.34
89.29
110.08
131.99
2011 2012 2013 2014 2015
Profit before tax
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, through chart 2.2, it can be seen that BIDV Tien Giangs profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project Restructuring the system of credit institutions in the period 2011-2015 approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services.
2.2. Current status of non-credit service development at BIDV Tien Giang.
2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times.
Along with the development of the Head Office, BIDV Tien Giangs products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,...
2.2.1.1. Payment services:
In accordance with the Prime Ministers Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc.
Chart 2.3. Net income from payment services in the period 2011-2015
Unit: Million VND
6000
5000
4000
3000
2000
1000
0
3922 4065
4720 5084 5324
2011 2012 2013 2014 2015
Net income from payment services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment.
2.2.1.2. Treasury services:
BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giangs treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17].
Chart 2.4. Net income from treasury services in the period 2011-2015
Unit: Million VND
350
300
250
200
150
100
50
0
105 122
309 289 279
2011 2012 2013 2014 2015
Net income from treasury services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services.
2.2.1.3. Guarantee and trade finance services:
BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance.
Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015
Unit: Million VND
14000
12000
10000
8000
6000
4000
2000
0
5193 5695
2742 3420
8889
3992
11604 12206
5143 5312
2011 2012 2013 2014 2015
Net income from guarantee services Net income from Trade Finance
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.5, we can see that BIDV Tien Giangs income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giangs corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area.
are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future.
2.2.1.4. Card and POS services:
As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services.
In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system.
Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments.
Chart 2.6. Net income from card services in the period 2011-2015
Unit: Million VND
3500
3000
2500
2000
1500
1000
500
0
687
1023
1547
2267
3104
2011 2012 2013 2014 2015
Net income from card services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.6, it can be seen that BIDV Tien Giangs card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25].
Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area.
Unit: Machine
STT
Bank name
Number of ATMs
Cumulative number of ATM cards
POS machine
1
BIDV Tien Giang
23
97,095
22
2
BIDV My Tho
7
21,325
0
3
Agribank Tien Giang
29
115,743
77
4
Vietinbank Tien Giang
16
100,052
54
5
Dong A Tien Giang
26
97,536
11
6
Sacombank Tien Giang
24
88,513
27
7
Vietcombank Tien Giang
15
61,607
96
8
Vietinbank - Tay Tien Giang Branch
6
46,042
38
(Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21])
Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6).
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![Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015
zt2i3t4l5ee
zt2a3gsnon-credit services, joint stock commercial bank
zt2a3ge
zc2o3n4t5e6n7ts
At that time, the Branch had to set aside a provision for credit risks, which reduced the Branchs income.
Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015
Unit: Billion VND
140
120
100
80
60
40
20
0
63.3
80.34
89.29
110.08
131.99
2011 2012 2013 2014 2015
Profit before tax
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, through chart 2.2, it can be seen that BIDV Tien Giangs profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project Restructuring the system of credit institutions in the period 2011-2015 approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services.
2.2. Current status of non-credit service development at BIDV Tien Giang.
2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times.
Along with the development of the Head Office, BIDV Tien Giangs products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,...
2.2.1.1. Payment services:
In accordance with the Prime Ministers Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc.
Chart 2.3. Net income from payment services in the period 2011-2015
Unit: Million VND
6000
5000
4000
3000
2000
1000
0
3922 4065
4720 5084 5324
2011 2012 2013 2014 2015
Net income from payment services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment.
2.2.1.2. Treasury services:
BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giangs treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17].
Chart 2.4. Net income from treasury services in the period 2011-2015
Unit: Million VND
350
300
250
200
150
100
50
0
105 122
309 289 279
2011 2012 2013 2014 2015
Net income from treasury services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services.
2.2.1.3. Guarantee and trade finance services:
BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance.
Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015
Unit: Million VND
14000
12000
10000
8000
6000
4000
2000
0
5193 5695
2742 3420
8889
3992
11604 12206
5143 5312
2011 2012 2013 2014 2015
Net income from guarantee services Net income from Trade Finance
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.5, we can see that BIDV Tien Giangs income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giangs corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area.
are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future.
2.2.1.4. Card and POS services:
As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services.
In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system.
Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments.
Chart 2.6. Net income from card services in the period 2011-2015
Unit: Million VND
3500
3000
2500
2000
1500
1000
500
0
687
1023
1547
2267
3104
2011 2012 2013 2014 2015
Net income from card services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.6, it can be seen that BIDV Tien Giangs card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25].
Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area.
Unit: Machine
STT
Bank name
Number of ATMs
Cumulative number of ATM cards
POS machine
1
BIDV Tien Giang
23
97,095
22
2
BIDV My Tho
7
21,325
0
3
Agribank Tien Giang
29
115,743
77
4
Vietinbank Tien Giang
16
100,052
54
5
Dong A Tien Giang
26
97,536
11
6
Sacombank Tien Giang
24
88,513
27
7
Vietcombank Tien Giang
15
61,607
96
8
Vietinbank - Tay Tien Giang Branch
6
46,042
38
(Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21])
Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6).
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div.maincontent .s40 { color: black; font-family:Times New Roman, serif; font-style: normal; fo](data:image/svg+xml,%3Csvg%20xmlns=%22http://www.w3.org/2000/svg%22%20viewBox=%220%200%2075%2075%22%3E%3C/svg%3E)
Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015
zt2i3t4l5ee
zt2a3gsnon-credit services, joint stock commercial bank
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zc2o3n4t5e6n7ts
At that time, the Branch had to set aside a provision for credit risks, which reduced the Branch's income.
Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015
Unit: Billion VND
140
120
100
80
60
40
20
0
63.3
80.34
89.29
110.08
131.99
2011 2012 2013 2014 2015
Profit before tax
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, through chart 2.2, it can be seen that BIDV Tien Giang's profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project "Restructuring the system of credit institutions in the period 2011-2015" approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: "Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services".
2.2. Current status of non-credit service development at BIDV Tien Giang.
2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times.
Along with the development of the Head Office, BIDV Tien Giang's products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,...
2.2.1.1. Payment services:
In accordance with the Prime Minister's Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers' cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc.
Chart 2.3. Net income from payment services in the period 2011-2015
Unit: Million VND
6000
5000
4000
3000
2000
1000
0
3922 4065
4720 5084 5324
2011 2012 2013 2014 2015
Net income from payment services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment.
2.2.1.2. Treasury services:
BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giang's treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17].
Chart 2.4. Net income from treasury services in the period 2011-2015
Unit: Million VND
350
300
250
200
150
100
50
0
105 122
309 289 279
2011 2012 2013 2014 2015
Net income from treasury services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services.
2.2.1.3. Guarantee and trade finance services:
BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance.
Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015
Unit: Million VND
14000
12000
10000
8000
6000
4000
2000
0
5193 5695
2742 3420
8889
3992
11604 12206
5143 5312
2011 2012 2013 2014 2015
Net income from guarantee services Net income from Trade Finance
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.5, we can see that BIDV Tien Giang's income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giang's corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area.
are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future.
2.2.1.4. Card and POS services:
As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services.
In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system.
Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments.
Chart 2.6. Net income from card services in the period 2011-2015
Unit: Million VND
3500
3000
2500
2000
1500
1000
500
0
687
1023
1547
2267
3104
2011 2012 2013 2014 2015
Net income from card services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.6, it can be seen that BIDV Tien Giang's card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25].
Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area.
Unit: Machine
STT
Bank name
Number of ATMs
Cumulative number of ATM cards
POS machine
1
BIDV Tien Giang
23
97,095
22
2
BIDV My Tho
7
21,325
0
3
Agribank Tien Giang
29
115,743
77
4
Vietinbank Tien Giang
16
100,052
54
5
Dong A Tien Giang
26
97,536
11
6
Sacombank Tien Giang
24
88,513
27
7
Vietcombank Tien Giang
15
61,607
96
8
Vietinbank - Tay Tien Giang Branch
6
46,042
38
(Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21])
Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6).
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Evaluating customer satisfaction with savings deposit services at National Citizen Commercial Joint Stock Bank NCB Tan Huong Transaction Office - 3 -
Factors affecting customer satisfaction with the quality of international money transfer services at Dong A Commercial Joint Stock Bank - 1 -
Analyze and propose solutions to improve individual customer satisfaction with lending services of Global Petroleum Joint Stock Commercial Bank GP. Bank, Vung Tau branch - 2 -
Measuring Individual Customer Satisfaction on Service Quality of Joint Stock Commercial Bank for Foreign Trade of Vietnam - Ho Chi Minh Branch Through Survey
Unit: billion VND
2009
2010
2011
2012
2013
Year
Service
Industry, construction Agriculture, forestry and fisheries
(Source: Statistical yearbook of Vinh Long province, period 2009-2013)
The province's economic structure has shifted in a positive direction: the proportion of industry and services in GDP has continuously increased. The output value of sector I (agriculture, forestry, fishery) has decreased from 39.1% in 2009 to 31.9% in 2013. Sector II (industry, construction) has increased from 23.9% in 2009 to 28.4% in 2013 and sector III (services) has increased from 37% in 2009 to 39% in 2013.
3.1.1.2 Overview of the banking industry in Vinh Long province
a) Network of operations
As of December 31, 2013, the network of credit institutions currently includes 5 state-owned and state-owned commercial banks, 14 joint-stock commercial banks, the Vietnam Bank for Social Policies, the Development Bank and 4 People's Credit Funds; In total, there are 98 transaction points with 21 level 1 branches, 9 level 3 branches; 60 transaction offices, 4 Savings Funds and 4 grassroots People's Credit Funds, 106 ATMs and 131 POS machines operating to help
for businesses and people to easily access capital and banking products and services.
b) Capital mobilization, lending, and credit quality of commercial banks
Capital mobilization situation
With the motto of mobilizing local capital to meet capital needs for local economic development, expanding market share and gradually limiting dependence on loans from the Head Office. In the past 5 years, commercial banks have continuously launched diverse capital mobilization products with many terms, flexible deposit and withdrawal forms and promotional policies... so the capital mobilization of banks in the area has always achieved good results. The average mobilized capital increased by 23.95% per year.
Chart 3.2: Capital mobilization situation of commercial banks in the area 2009-2013
18 | 9 | ||||||||
190 | |||||||||
10,982 | |||||||||
10,692 | |||||||||
84 | |||||||||
182 | 8,097 | ||||||||
6.664 | |||||||||
205 | |||||||||
4,891 1 | |||||||||
5,057 | |||||||||
2. | 3.04 | 3.13 | |||||||
.7 | |||||||||
3 | 4 |
Unit: billion VND
2009
2010
2011
2012
2013
Year
- Treasury
- Population
- TCKT
568
79
(Source: State Bank of Vietnam, Vinh Long province branch)
Residential deposits : quite stable and always growing over the years. By the end of 2013, this source of capital reached 10,982 billion VND, compared to 2009, an increase of 6,091 billion VND (+124%) and an average annual growth rate of 22.4%/year. This is a source of
Capital is important in the capital mobilization strategy of commercial banks because the potential is still very large and always accounts for a high proportion of the total mobilized capital in the whole area.
Deposits from economic organizations : By the end of 2013, this capital source reached 5,057 billion VND, an increase of 3,278 billion VND (+184%) compared to 2009 and had a fairly high average growth rate of 29.8%/year.
State treasury deposits : This is the unused state budget source that the local treasury system deposits into commercial banks in the districts.
Loan situation
Currently, lending is still the main income generating activity for Vietnamese commercial banks in general and commercial banks in Vinh Long province in particular. In the past 5 years (2009-2013), commercial banks have made significant efforts in expanding banking services to attract fees, but credit activities are still an important business activity of banks.
Table 3.1: Sales and outstanding loans of commercial banks in the area
Unit: billion VND
Target
Year | Average growth (%) | |||||
2009 | 2010 | 2011 | 2012 | 2013 | ||
Loan Sales | 20,557 | 23,376 | 33,341 | 30,663 | 24,776 | 4.78 |
- Short term | 18,004 | 20,665 | 30,435 | 28,298 | 22,389 | 5.60 |
- Medium and long term | 2,553 | 2,711 | 2,906 | 2,365 | 2,387 | -1.66 |
Outstanding Loans | 10,882 | 13,039 | 13,417 | 13,572 | 14,765 | 7.93 |
By currency | 10,882 | 13,039 | 13,417 | 13,572 | 14,765 | 7.93 |
- VND | 10,857 | 12,859 | 12,277 | 12,405 | 14,011 | 6.6 |
- Foreign currency converted to VND | 25 | 180 | 1,140 | 1,167 | 754 | 134.3 |
Duration | 10,882 | 13,039 | 13,417 | 13,572 | 13,572 | 7.93 |
- Short term | 7.115 | 8,671 | 9,133 | 9,199 | 10,088 | 9.12 |
- Medium and long term | 3,767 | 4,368 | 4,284 | 4,373 | 4,676 | 5.56 |
(Source: State Bank of Vietnam, Vinh Long province branch)
Regarding loan turnover : in 2013, loan turnover reached 24,776 billion VND, down 19% from 2012, compared to 2009, increased 4,219 billion VND (+21%), the average growth rate in 5 years (2009-2013) reached 4.78%.
Regarding outstanding credit : At the end of 2013, outstanding loans reached 14,765 billion VND, compared to the beginning of 2009, an increase of 3,883 billion VND (35.68%), achieving a growth rate of 7.93%/year.
Outstanding loans by currency
+ Outstanding loans in VND always account for a high proportion from 91.4% to 99.77% of total outstanding loans, reaching 14,011 billion VND at the end of 2013, an increase of 3,154 billion VND (+29%) compared to 2009, achieving an average growth rate of 6.6%/year.
+ Outstanding loans in foreign currency have a high average growth rate of 134.3%
/year but accounts for an insignificant proportion (about 5% of total outstanding loans).
Loan balance over time
+ Short-term loan balance: accounts for 65.4% - 68.3% of total loan balance and this balance tends to increase. By the end of 2013, short-term loan balance reached 10,088 billion VND, compared to the beginning of 2009, an increase of 2,973 billion VND (+42%), achieving an average growth rate of 9.12%/year over the past 5 years.
+ Outstanding medium and long-term loans: account for 31.7% to 34.6% of total outstanding loans. By the end of 2013, outstanding medium and long-term loans reached 4,676 billion VND, an increase of 909 billion VND (+24.1%) compared to 2009, achieving an average growth rate of 5.56%/year.
Credit quality
Along with the development and expansion of credit, credit quality also affects the lending results of credit institutions. The bad debt ratio of commercial banks in Vinh Long from 2009-2013 has increased every year. Commercial banks in the area have tried to promote bad debt handling measures such as: debt collection, limiting new occurrences, risk management, selling debt to VAMC to reduce the bad debt ratio to below 5% according to the level allowed by the State Bank. By the end of 
2012
decreased by -90 billion VND, 
4.88%/TDN. In which, bad debt is concentrated in the fields of real estate business, manufacturing and processing industry; transportation, aquaculture and seafood processing; wholesale and retail with the amount of 650 billion VND, accounting for 90.7% of total bad debt.