Bank's Development Orientation and Goals

Regarding deposit terms, Asia Commercial Joint Stock Bank always tries to satisfy customers, so the mobilization products are always diverse in terms of deposit terms. The current deposit terms that the bank is implementing are weekly, 1 month, 2 months, 3 months, 4 months, 5 months, 6 months, 9 months, 12 months, 13 months with a variety of interest payment periods such as monthly interest, quarterly interest, and end-of-term interest. This has made the bank's savings products more diverse and competitive compared to other competitors.

Table 2.3 : SAVINGS DEPOSIT STRUCTURE BY TERM

Unit: billion VND

Term Type

First 6 months 2012	Proportion (%)	Last 6 months 2012	Proportion (%)
No term	13,670	14.95%	6,068	12.32%
Under 12 months	58,979	64.49%	30,220	61.36%
12  24 months	18,415	20.13%	12,812	26.02%
24 months and up	391	0.43%	145	0.3%
Total	91,455	100%	49,245	100%

Maybe you are interested!

(Source: Sales Management Department - Asia Commercial Joint Stock Bank)

In analyzing the stability of this capital source, we will consider the proportion of each term type in the amount of savings deposits. In the table above, we see that Asia Commercial Joint Stock Bank has mobilized mainly deposits with terms of less than 12 months. The amount of term deposits under 12 months is a type of mobilized capital with quite low stability, accounting for over 50% and has a tendency to decrease slightly in the last 6 months of 2012. In addition, the type of term deposits with terms of 12  24 months tends to increase in the last period of the year because the bank has launched the 12+ savings product with preferential interest rates when customers return to save at the bank after the mass withdrawal incident in mid-August. This is a type of deposit with high stability and accounts for the second largest proportion, which also contributes to helping the bank manage its solvency.

In addition to the large amount of capital mobilized from individuals, the bank also has a significant amount of capital mobilized from corporate customers. If for individual customers, non-term deposits account for a low proportion because the purpose of depositing money of the majority of people is to save, then for corporate customers, deposits are mainly for payment purposes. However, mobilizing a large amount of capital from this group is not ineffective for the bank. On the other hand, when attracting corporate deposits, ACB can provide many other services such as: payment entrustment, guarantee, lending, etc. Because, normally, customers will have the mentality of using the services of banks with which they have had previous transaction relationships.

In general, the deposit characteristics of the two types of subjects are different and have opposite impacts on the liquidity of the bank. However, the diversity of deposit types is also a way to ensure the bank's solvency. With a reasonable liquidity policy, the bank will make the most of the capital available to invest in business activities to maximize profits while minimizing liquidity risk.

2.1.7 Development orientation and goals of the bank

The strategic development orientation of Asia Commercial Joint Stock Bank for the period 2013 was built and approved in early 2011.

The main spirit of the strategic development orientation for the period 2011 - 2015 aims to develop Asia Commercial Joint Stock Bank as "The bank for everyone", occupying the leading position in the Vietnamese banking system. This strategic orientation includes 2 major contents: (1) Business operation strategy, in which the core spirit is to focus on developing multi-functional commercial banking activities with target customer segments, improving ACB's competitiveness to strengthen its position in the market; (2) Restructuring strategy, improving institutional capacity.

Implementing the strategy, in the years 2011 - 2012, Asia Commercial Joint Stock Bank

Satisfied:

i. Regarding business activities: the principle that the bank focuses on its core business is commercial banking has been affirmed. In 2011, the bank implemented 5 sub-projects in 2 business blocks and completed the project phase to start implementing it throughout the system in 2012.

ii. Regarding institutional capacity enhancement: has completed a step of organization and operation of the Board of Directors, the Board of Directors' committees. Has continued to build new/supplemented capacity for risk management, finance, human resource management, etc. Currently continuing to innovate the organization and operation of the Financial Markets Block (formerly the Treasury Block), Information Technology Block, ACBS, etc. Has prepared a program to convert distribution channels in the direction of converting the current one-level system into a two-level system. Prepare a project to change the design and layout of distribution channels to be more suitable for the retail banking model.

iii. In 2011, the first year of the 2011-2015 economic development period, the Vietnamese economy faced many challenges, with GDP growth of only over 6%, lower than many previous years. The year 2012 marked a particularly difficult year for the Vietnamese economy in general and the Vietnamese banking industry in particular. The national GDP growth rate in 2012 was only 5.03%, significantly lower than many previous years, and the number of loss-making enterprises, having to stop operations, dissolve, and go bankrupt increased. Credit growth in the entire banking industry in 2012 reached its lowest level in the past 10 years, while bad debt increased. Experts' assessments all said that the difficulties of the economy will continue in 2013 and may not end soon. That situation will greatly affect the implementation of the socio-economic development goals set by the Government for the 2011-2015 period, and also have a decisive impact on the development of the entire Vietnamese banking industry in general, as well as the development of each bank in particular in the coming period.

In that general context, the incident that occurred at Asia Commercial Joint Stock Bank in August and September 2012 posed even greater challenges for the bank in achieving its development goals for the period 2011 - 2015. After the initial phase of handling the crisis and ensuring liquidity safety for the Bank, the Board of Directors of Asia Commercial Joint Stock Bank directed the focus on continuing to develop the bank's business activities, while organizing the review and handling of urgent issues arising after the crisis, ensuring conditions for safe, effective and sustainable development for the bank.

Persistently orienting the development of Asia Commercial Joint Stock Bank as "A Bank for everyone", continuing to research, develop and implement programs to improve institutional capacity:

 Build and strengthen the Bank's image, identify core values and build corporate culture.

 Enhance the governance role of the Board of Directors, increase the active and proactive participation of Board members in bank governance activities.

 Develop and apply a Code of Conduct throughout the system.

 Improve the organization and operation of the Executive Board, more clearly define the authority and responsibility of the Executive Board and its members.

 Immediately implement in the first half of 2013 the program to rearrange the distribution channel into a two-level system.

 Continue programs to improve functional management capacity: risk management, financial management, human resource management, etc., while implementing new organization and operations of the Financial Markets and Information Technology Blocks.

Continuing to focus on core business activities, namely commercial banking activities in urban areas, Asia Commercial Joint Stock Bank will:

 Review the Bank's annual growth targets from now until 2015 in accordance with the new economic context, towards appropriate, safe and effective growth.

 Prioritize the development of retail banking business activities, with small and medium-sized customer segments and individual customers.

 In addition, continue to maintain and develop operations with large corporate customers and financial institutions selectively. In addition to credit relationships, banks need to focus on developing transactional banking products, improving professionalism and service quality to effectively promote diverse relationships with this group of customers.

Compliance with strategic directions is essential to ensure the Bank's sustainable, safe and effective development in the coming period.

2.2 Analysis of factors affecting the decision to deposit savings in Asia Commercial Joint Stock Bank

2.2.1 Evaluation of factors affecting the decision to deposit savings in Asia Commercial Joint Stock Bank: Results from a survey.

The study of factors influencing the decision to deposit savings in banks was conducted based on the model of financial service usage behavior.

2.2.1.1 Need recognition

First of all, from the awareness of saving money, shown through understanding the reasons for saving money.

According to the survey results, we can see that most customers save for the purpose of earning interest, 102 people choose to do so, accounting for 85%. The second reason is because they want to find a safer place to keep their money, customers feel worried and insecure when having to keep a large amount of money on their person, that is why they choose the bank as a place where they can

do a good job. These two reasons often go together because saving money in the bank is both safe and profitable.

Another reason that we can see is that 65 out of 120 people (54.17%) are for the purpose of maintaining a stable life, with this purpose they think that they will be able to ensure their life later when they can no longer work.

For the purpose of contingency, the proportion is smaller, people save for this purpose mainly because their income is lower with unexpected expenses that may occur. For example, saving to prepare for illness or accident.

Table 3.1 : REASONS FOR SAVINGS

Reason

Frequency	Rate (%)
Profitable	102	85%
Maintain life	65	54.17%
Keep money safe	96	80%
Preventive	33	27.5%

(Source: Customer interview questionnaire)

2.2.1.2 Search for information

The next step, after determining the need, is to collect and learn information related to the service. Each different customer will have a different approach to information, from many sources and each source will have different levels of influence on their decisions.

Table 3.2 : SEARCH FOR INFORMATION

Number of customers	Rate (%)
Proactive	51	42.50%
Not proactive	69	57.50%
Total	120	100%

(Source: Customer interview questionnaire)

Of the 120 people interviewed, 51 actively sought information about savings services as well as issuing banks, accounting for 42.5%. Vietnamese people in general are quite passive in accessing information in that they are reluctant to actively seek information but only wait for available information. Therefore, banks need to inform customers in a reasonable way, through understanding customers' habits. We need to provide information about savings services, promotional programs according to customers' information access habits, as well as reliable sources of information. However, through the survey results, we see that the difference between the two groups of active and inactive people is not much. This not only shows that in a dynamic city like Ho Chi Minh City, people have begun to pay more attention to searching for information because they have many choices for their needs, but also affirms the fierce competition between banks in the current difficult economic context.

Currently, mass media are very diverse such as television, newspapers, internet, billboards, banners, brochures... According to interview samples, most banks use the above information channels to introduce and promote their products and services. However, for the majority of customers today, they access information by word of mouth, that is, through friends and relatives introducing the bank and services, the information is more reliable (up to 104 through friends and acquaintances introducing, accounting for 86.67%). Information from relatives or friends has a great influence on their decision to deposit savings in the bank with an average score of 4.32 points. Through this, we can see that the ability to attract customers through old customers is very large. Therefore, the role of customer care service is to both retain old customers and gain new customers. The second most trusted and widely used source of information is information from bank employees, with 76 people choosing it and the influence level of this information channel is 4.11 points. In addition, information sources from newspapers, television, billboards, etc. are all referenced by many customers. The internet alone is an effective information tool.

and less expensive, but because they are not familiar with accessing the internet, only 34 people have consulted information about savings deposits via the internet.

Table 3.3 : INFORMATION REFERENCE CHANNELS

Information channel

Customers can refer to		Degree of influence on decision
Quantity	Rate (%)	Degree of influence on decision
Friends and relatives recommend	104	86.67	4.32
Bank employee	76	63.33	4.11
Press	58	48.33	3.58
Television	48	40	3.76
Billboards, brochures, …	46	38.33	3.31
Internet	34	28.33	3.15

(Source: Customer interview questionnaire)

2.2.1.3 Evaluation

After having information about the savings service, customers begin to evaluate the criteria they need when choosing a bank to deposit savings. According to the interview results, we have the following table:

Table 3.4 : FACTORS AFFECTING THE DECISION TO DEPOSIT SAVINGS IN ASIA BANK

Element

Number of interested customers		Level of importance
Quantity	Rate (%)	Level of importance
Interest rate	117	97.50	4.82
Bank acquaintance	90	75	4.63
Employee Attitude	85	70.83	4.35
Promotion program	82	68.33	4.15
Product information	77	64.16	3.63
Transaction time	65	54.16	3.05

(Source: Customer interview questionnaire)

Comment