Issuance of corporate bonds
Corporate bonds are a type of debt security.
issued by DN, confirmed
assumes the obligation to pay principal, interest and other obligations (if any) of the enterprise to the bond owner. In this relationship, the enterprise plays the role of the borrower, the bond buyer (commercial bank) is the lender. Through the use of bonds, enterprises can mobilize a large amount of medium and long-term capital. Compared to borrowing from commercial banks, accessing capital through issuing bonds has the outstanding advantage of not requiring collateral and the enterprise actively uses the proceeds from selling bonds without being supervised by the bond buyer (including commercial banks).[23]
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Current Status of Credit Quality at Vietnamese Joint Stock Commercial Banks -
Improving credit quality at Joint Stock Commercial Bank for Foreign Trade of Vietnam in the integration process - 30 -
Improving credit quality at Vietnamese joint stock commercial banks 1669220937 - 31 -
Some Basic Solutions To Improve Credit Quality At Commercial Banks -
Current status of short-term lending activities and some solutions to improve the quality of short-term credit services at Vietnam Joint Stock Commercial Bank for Industry and Trade Vietinbank - Branch 12 - 1
1.1.2.4 Basic credit process
A credit process is a summary that describes the specific steps from the time of application.
receive loan requests from customers until the bank makes a decision to grant
loan, disbursement and liquidation of credit contracts. Depending on the characteristics of the organization and
management, each bank designs and builds its own QTTD. In general, a bank's QTTD includes the following stages:
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Diagram 1.1: Basic lending process of Vietnamese commercial banks
(Source: í [đ42n])á
Step 1: Create a credit profile
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Credit officers guide customers in need of loans through procedures and processes.
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related documents. And receive loan applications from borrowers; instructions
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Customers complete loan application if valid. Credit officers proceed to
check
check correctness
belong to
item
loan purpose, check authenticity
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c, head
incubate
medical
of the above records. At the same time, credit officers must go to the field
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customers to investigate, collect, and synthesize information about customers.
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through the customer's previous loan records, through the credit center
mound
and the muscles
customer's direct supervisor to check and verify the accuracy of the information.
Step 2: Credit Analysis
This is the step
important
in the business process
loan service.
determine
Borrowers borrow capital through their legal status and capacity, civil conduct capacity; assess the financial capacity of the customer and the customer's relationship situation.
customers with commercial banks. Assessing the financial capacity of customers is very important.
important, greatly affecting the ability of commercial banks to recover capital. In this step,
credit officers
Right
check
check financial capacity of
Customers can
guarantee to repay the debt within the period committed in the credit contract or not?
In every
school
fit,
credit officer
Right
seek to verify information from
customers in different ways.
The goal of credit analysis is to look for situations that may lead to
risks to the bank, the ability to control those risks and
expected measures
prevention
and deadline
damage
possible harm
out. wear
In addition, credit analysis is also concerned with checking the authenticity of the documents.
loan application
that the customer provides,
from there receive
determine
on debt repayment attitude
customers as the basis for lending decisions. At the same time, it is the basis for determining the number
money
borrow, time
loan term, expected
progress
resolution
bank, level
debt collection
reason and
other related conditions; money creation
for customer use
capital
get a loan
effective
fruit and guarantee
tell
item
pepper
of the commercial bank. Upon receipt
asset
sure
tell
money
loan, duty
case of
Credit officers are to conduct analysis and appraisal.
determine those assets.
Step 3: Credit Decision
A credit decision is the decision to grant or deny a loan application.
customer's loan application. This is an extremely important step in the credit process.
use it
image
enjoy
very
large to the following stages and
image
enjoy
arrive
reputation and
operational efficiency
bank credit activity. After approval,
credit officers
use
receive
review and conclusion
discussion
on the financial situation of
customer, need
design
belong to
item
loan purpose,
level
response
application
the things
case
credit,
thing
conditions of the collateral. From there, prepare an appraisal report and submit the loan application for approval to the leadership for approval of the opinions recorded in the report.
Once approved,
CBTD composed
discuss, negotiate terms
case
contract with the customer. The commercial bank and the customer sign the credit contract and the credit officer completes the procedures for handing over documents related to the loan collateral.
Step 4: Disbursement
Prize
bank (disburse money)
loan) is karma
emergency
money
for customers on the basis of
credit level committed under the contract. Implementation principle: Only implement
Disburse loan when customer fully satisfies the conditions specified in the Contract.
Credit contracts; Loan disbursement according to the progress of loan use of the customer; There is evidence to prove that the use of loan capital is consistent with the agreements stated in the credit contract; Always link monetary movements with corresponding movements of goods or services to ensure the ability to recover debt later.
Step 5: Monitoring and debt collection
Post-lending control is an important step to limit risks and improve the quality of credit activities for the Bank. Post-lending control focuses on monitoring customer activities to detect signs of difficulties in customer debt repayment. Based on these findings, the Bank can take appropriate and timely measures to limit possible risks.
Step 6: Liquidate credit contract
This is the stage
last
of
credit process
Credit process
of a loan ends when the customer pays off the principal and interest in full. To a
section
Loan principal and interest are paid on time, bank staff need
Right
determine
Periodically urge and remind customers when the customer's loan interest or principal is due.
These are regulations that must be implemented in the lending and debt collection process in order to preserve capital. The credit process begins when the bank appraises the loan until disbursement, checks the loan usage process and collects debt. During the process of customers using the loan, the bank must regularly
Regularly check whether your capital is used for the right purpose, review and promptly detect violations, take timely measures to handle, limit risks, and contribute to improving credit quality.
1.2 Credit quality of commercial banks
1.2.1 Concept of credit quality of commercial banks
1.2.1.1 Quality concept
Matter
quantity
is the problem
suggestion
out
with
all
type
cartoon
dynamic
product
production, business, service. Quality reflects the value in terms of benefits of the product.
goods and services are complex concepts, depending on the level of
background
economic and depending on
angle of
People
observation that the concept of "quality"
"quantity" has different meanings:
From
angle
Manufacturer:
quality is the degree
product completion
products against design standards
approved
The manufacturer considers the quality
Quality is what they have to do to meet the regulations and requirements set by customers, to be accepted by customers.
From the consumer's perspective: quality is the totality of characteristics of an entity, suitable for use, meeting consumer needs or
Quality is customer value.
that the customer receives, is the
satisfy the needs of
According to the International Organization for Standardization (ISO) definition,
as follows: “Quality is the totality of characteristics of a product, system or process that bear on the ability to fulfill requirements of customers and other interested parties”[44]
Quality is measured by the satisfaction of needs. If a product for some reason is not accepted by the needs, it must be considered to be of poor quality, even though the technology used to manufacture the product may be very modern. This is a key conclusion and the basis for manufacturers to set policies and strategies.
your business strategy.
From the above synthesis, the author gives the following concept of quality:
Quality is the level at which economic organizations perform production and business activities.
goods and services meet regulations and standards
put
out of scale
customers, sales,
level
safety and benefits
profit
Fit
with
benefits of
objects of interest under certain conditions.
1.2.1.2 Concept of credit quality of commercial banks
Activity
dynamic
credit
is one
active
dynamic
profitable
primarily
belong to
Bank
in background
market economy,
but also a place to store
most risky
That is why the quality issue
credit amount
is the problem
important issue,
survival of the fittest
with all Banks. So what is credit quality? Credit quality is
one
violation
wide
include many
internal
content and present
not yet
have one
determine
orthodox
what about quality
quantity
credit
However, when it comes to
Credit quality is often mentioned from three perspectives: customer, bank, and credit quality.
row and background
economy.
Each
opposite to
statue
again
have views
qualitatively different
credit amount, such as:
From the customer's perspective
Customers are the subjects using banking services, especially
service
credit because it is a source of funding
important for every business
Therefore, for customers to evaluate the credit quality of the bank
relatives
The first concern is
interest rate
rate
reasonable, procedure
single
simple
sure
tell
convenient in transaction,
section
save
time
time and cost. If all factors
If these meet the needs of customers, the credit is considered to be of good quality and vice versa.
Therefore, from the customer's point of view, credit quality is: Satisfaction of credit needs in terms of: interest rate, scale, term, disbursement method, debt collection method...
From an economic perspective
Credit quality is reflected in its contribution to job creation.
People
labor,
limit
furniture
career,
exploitable
the potential
ability of
background
economy,
end
use
dark
multi-able
source
capital
temporary
idle
in water, painting
Borrowing foreign capital is beneficial for economic development. Commercial bank credit must
Contribute to building a safe, healthy and stable financial market.
From the banking perspective
Credit quality must pay attention to two basic goals: (1) Affirming the leading role in the credit system, providing capital for the economy; (2) Ensuring the achievement of growth targets, safety and profitability of business capital in accordance with the planning goals and legal regulations in each period. In other words, credit quality is always ensuring that "quantity" must go hand in hand with "quality", specifically:
Regarding "quantity": Commercial banks must perform well the credit intermediary function,
satisfy the capital needs of customers as well as the economy, demonstrated through activities such as: increasing loan scale, expanding network, diversifying lending objects, credit growth rate in accordance with regulations to contribute to promoting the economic development of the country.
About "quality": expressed through
level
capital safety and profitability,
reduce bad debt ratio. Before deciding to lend, the issue is always considered by commercial banks.
Consider carefully whether the customer has a high or low credit rating? Principal and interest
get
full refund
sufficient and on time
or not? Level
risk
belong to
section
How much is a loan? A loan with a low credit rating, or with a high risk, is a poor quality loan and vice versa. The capital safety level of a commercial bank is demonstrated by ensuring the requirements of controlling the bad debt ratio, complying with good credit limits, and capital safety ratios in accordance with regulations... The profitability of a commercial bank is demonstrated by income from credit activities and bank profits.
In this thesis, the author approaches credit quality from the perspective of commercial banks.
Bank credit quality must pay attention to the target of credit growth along with maximizing profits on the basis of ensuring safety. Credit quality is the measure of the level of completion of growth, safety and profitability targets of the operation.
credit. Thus,
job
Improving CLTD is a
request
put
out very
grant
design
for a bank in any period of development.
From the above perspectives, the author
fake
concept
CLTD as follows: Quality
Credit quality is the extent to which a bank achieves its goals of size, safety and
safe, profitable and in accordance with current domestic laws and practices
international. In addition, credit quality is a synthetic indicator reflecting the credit performance of commercial banks, demonstrating the capacity to manage credit activities.
to meet the requirements of economic development and limit risks, ensure safety
on capital and profitability of banks
1.2.2 Criteria for assessing credit quality of commercial banks
To find out
prize
methods to improve quality of service, commercial banks need
Right
perform
“Quality” goes hand in hand with “quantity” of credit. This is reflected in the indicators.
reflect
CLTD light. There are many
much
reflection index
CLTD light of
Commercial Bank but
Based on the concept of CLTD analyzed above, the group of credit scale indicators
use,
profitability
and make sure
tell
Credit security is a top concern.
The leading role of commercial banks in improving credit quality.
1.2.2.1 Group of indicators on credit scale and growth
This group of indicators reflects the ability of credit growth and loan scale of the bank. At the same time, it also reflects the ability of the bank to maintain and expand its lending market share. Credit growth is more stable than other commercial banks in the same market, affirming that the bank's competitiveness is higher than its competitors and its capital contribution to investment in the economy is higher.
a. Credit balance indicator
Total outstanding credit is an indicator that reflects
total light
quantity
money
that the commercial bank has
for customers to borrow at
one
certain time. This is an indicator that reflects
credit scale and is also an indicator reflecting the bank's reputation. This indicator
indicates the amount of money banks supply to the economy at a given time.
points. Currently, the classification of credit balances at each determined point in time can be expressed
presently
in many
criterion
different as:
over time
time, by industry
export,
ingredient
economy,
as guaranteed
money
loan. work
determine the level
outstanding balance at time
points to determine the scale, investment level and diversity in the bank's operations.
loan
Low total outstanding debt shows that the bank's credit activities are still ineffective and unable to expand its customer base. However, the total outstanding debt is too high.
not necessarily good. The amount of money in circulation is large but the quality is poor.
The increase in bad loans and bad debt puts banks at risk of losing capital. On the other hand, excessive credit expansion can cause prices to rise, inflation to rise, and banks to suffer losses due to currency devaluation.
b. Credit growth rate indicator
Is an indicator reflecting the growth of credit balance in terms of scale. The growth rate of credit balance is a relative indicator, calculated in percentage units, determined by the formula:
Credit growth rate
use (%)
Actual credit balance – Credit balance
= previous period
Previous period credit balance
x 100
The rate of increase in credit balance must be consistent with the rate of increase in capital mobilization of commercial banks and current legal regulations.
The larger the next year's usage, the more it reflects the development.
belong to
work
credit
use
But
If
Commercial banks accelerate growth
Chief
credit
too high
In the short term, RRTD will affect CLTD.
c. Loan/asset ratio
The ratio of total outstanding loans divided by total assets of commercial banks means:
determine what percentage of the bank's assets is owed on outstanding loans.
Chan (2009)[67] argues that deposits and loans are considered the most important
balance sheet because these two indicators represent an indication of the traditional performance of the bank. Loans are the main source of income and affect the profit, which in turn affects the credit quality of the bank. However, if
a bank has a
loan to total ratio
asset
too high
arrive
increase
risk of bad debt and operating costs such as appraisal costs, costs
monitor the loan, then can reduce CLTD. With a reasonable increase in the loan ratio will increase net interest income from credit activities, control bad debt, increase the bank's CLTD
d. Credit balance structure indicators: classified by time, lending market share, and mechanism