The guarantee process is carried out in the following order:
Receive and guide customers to prepare guarantee application documents
When a customer comes to request a guarantee, the credit officer will ask for some information to check the customer's background. Then, the credit officer will guide the customer to prepare a guarantee application. If the customer has never had a credit relationship with the bank, the credit officer will guide the customer to provide the necessary information, the conditions for the guarantee and advise on the necessary documents for the guarantee application. If the customer has had a credit relationship with the bank, the credit officer will guide the customer to complete the guarantee application.
The credit officer receiving the customer's application will check the completeness of the documents in the application. The documents in the application usually include:
Customer Profile
- Decision to establish a business.
- Charter of organization and operation of the enterprise.
- Decision to appoint Director and Chief Accountant.
- Business registration certificate.
- Tax code.
- Lease contract for headquarters, production and business locations, warehouses, etc. (if any).
- Minutes of the meeting of founders (or founding shareholders) deciding on borrowing capital, transaction authorization and mortgaged assets to borrow capital from the bank (original).
Guarantee documents
- The guarantee application must be an original with full authorized signature.
- Documents proving the ability to perform the guaranteed obligations.
Documents to ensure guaranteed obligations
- Loan guarantee contract.
- Documents proving ownership and right to use collateral.
Assessment of the conditions of the guarantee
Credit officers conduct steps to assess the legal and economic status of customers; assess the proposed guarantee plan/project to ensure that the customer and the plan fully meet the requirements on conditions and principles as prescribed by the State Bank of Vietnam. The guarantee assessment process includes the following contents:
Check the application and obligations for the guarantee
Credit officers check the completeness, authenticity, legality and validity of the documents; check the legality of the obligation proposed for guarantee. For contract performance guarantee, credit officers will analyze the possibility of contract performance.
Collect and verify information
Credit officers collect and verify information about customers and proposed guarantee plans through information sources such as:
- Customer's current and previous loan/guarantee records at NHCT (if any)
- Customer relationship status with NHCT from past to present.
- Meet and discuss directly with customers
- Visit the production and business site to learn about the leadership and actual operating situation of the customer.
- Information from mass media, reports, and specialized research on the industry in which the customer is doing business.
- Information from management agencies, customers' partners, including suppliers of raw materials, equipment, services and customers who consume products.
- The customer's past and present relationship with other credit institutions.
Customer analysis and assessment
- Analyze the customer's legal status and capacity, operational capacity, and production and business management:
+ General information about the customer (business history; business type; changes in capital contribution, management mechanism, technology or equipment, etc.)
+ Investigate and evaluate legal status and capacity (review the validity of the customer's license; location of operation; legal status of the customer, etc.)
+ Organizational model, labor arrangement of customers, especially enterprises (scale of operation; organizational structure; quantity, labor level; production efficiency; technical level;...)
+ Research and evaluate the management and administration capabilities of the board of directors (list of directors; professional qualifications of the board of directors; ethics in credit relations).
the leadership; the experience and management style of the top leader and the executive board; the leadership's ability to grasp the market;...)
- Evaluate customer performance
+ Production and business situation: production conditions, status of machinery and equipment; production results; current production methods; operating capacity; work efficiency; product quality; costs. The focus of the production and business situation assessment is to analyze production efficiency through calculating indicators of capital concentration and capital efficiency.
+ Sales situation: credit officers will analyze changes in revenue and factors affecting revenue; sales methods and organization; customers; product prices and pricing methods; payment methods;…
- Business financial analysis: credit officers will collect and analyze accounting information and other information to assess the current situation, financial trends and potential of the business.
Industry Analysis
Credit officers assess the development trends of the industry in which the proposed project/plan is implemented and create a basis for assessing the feasibility of that project/plan.
Analysis and assessment of security measures for the proposed secured obligationlead
- For bid bonds, credit officers analyze and assess the customer's financial capacity to determine the ability to pay in case the customer has to pay a fine due to violating bidding regulations.
- For loan guarantees, payment guarantees, payment completion guarantees and contract performance guarantees, credit officers will conduct analysis and appraisal of production and business plans and investment projects like other credit operations.
- For customers who apply to open L/C but do not deposit 100% or customers who apply to discount export documents, credit officers must coordinate with the international payment department to further assess issues: marketability of goods in
contract, risks may arise when the opposing bank or the importer does not pay from the discounted documents or the L/C opening documents.
Determine the amount, term and fee of the guarantee
Guarantee fee = Guarantee amount * Guarantee fee * 360 guarantee period In which, the guarantee fee is calculated by the bank as follows:
- The bank will charge a fee of 1%/year on the margin guarantee balance.
- The non-bank deposit portion will be charged a fee of 2%/year on the non-bank deposit guarantee balance.
For example: Company A comes to Dong Da branch of NHCT to request a contract performance guarantee for the electrical equipment manufacturing contract for company B within 60 days. The guarantee amount is 500,000,000 VND, the company deposits 50% of the guarantee amount which is 250,000,000 VND. After assessing the guarantee conditions, the credit officer will calculate the guarantee fee (excluding VAT) for company A as follows:
Guarantee fee = (1% x 250,000,000 + 2% x 250,000,000 ) x
= 1,250,000 VND
Prepare a guarantee appraisal report
60
360
Based on the analysis and evaluation opinions obtained from the guarantee condition assessment step, the credit officer will prepare an assessment report. In which, the credit officer must clearly state his/her comments on the level of satisfaction of the conditions (financial status, feasibility of the plan, collateral, etc.) and propose to grant or refuse the guarantee.
Re-evaluation can be carried out when the credit officer's appraisal process is found to have many shortcomings. The credit officer submits the appraisal/re-evaluation report (if any) along with the entire file to the credit manager for approval.
Guarantee Browser
In case of not going through the basic credit council
The credit officer submits the Appraisal/Re-Appraisal Report along with the entire guarantee file to the credit manager and is responsible for its completeness.
and legality of the entire customer profile, honesty and accuracy of the appraisal report.
Cases must go through the basic credit council
The local credit council will meet and sign a decision to approve or disapprove the guarantee application. If the guarantee exceeds the branch's judgment, the branch will have to transfer the guarantee application to the head office, including the appraisal application, the minutes of the local credit council meeting, and all documents of the customer requesting the guarantee.
Signing of guarantee contracts, security contracts, delivery of secured assets and documents related to secured assets
Once the guarantee has been approved, the credit officer will draft the Guarantee Agreement and the Guarantee Contract for the guaranteed obligation and submit them to the management for review and approval. Once the Contract has been approved, the credit officer will send the contract to the customer for signature.
Issuance of guarantee commitment
The credit officer will draft a guarantee commitment with the following contents:
- Date of guarantee issue, guarantee number
- Name and address of the branch, the guaranteed customer and the guaranteed party
- Amount of guarantee, scope, subject, type of guarantee
- Nature of guarantee (can be revoked or irrevocable)
- Form of performance of guarantee obligation
- Place of receiving payment request under guarantee obligation
- Warranty expiration date
- Requirements that the payee must meet when requesting payment
Depending on the customer's request in the guarantee application, the guarantee commitment can be issued by letter, Telex or Swift.
Monitor the implementation of the guarantee contract
Credit officers regularly monitor and urge customers to perform contracts. For each specific type of guarantee, credit officers will require customers to provide evidence to prove that they are performing the contract with a third party as committed. At the same time, credit officers must also monitor collateral assets.
Periodically check the current condition and market value to re-evaluate the value of the collateral.
Periodically evaluate the customer's production, business and financial situation.
For cases of guarantees with a term longer than 1 year, the credit officer will conduct an annual analysis of the customer. Depending on the developments of the customer and the market, the credit officer will prepare an appraisal report to submit to TPTD, proposing one of the following options: continue to maintain the relationship with the customer; maintain the relationship on the basis of some new conditions or stop issuing new guarantee commitments. The credit officer will then notify the customer of the final decision of the branch.
Warranty Extension
When the credit officer receives the customer's Guarantee Extension Request, he/she will conduct an analysis and check the reason for the extension; the customer's financial status and operations; the actual situation of the performance of the guaranteed obligation; the plan for the performance of the guarantee obligation after the extension; the status and value of the collateral. On that basis, the credit officer will prepare an appraisal report proposing one of three options: agree to extend; extend with conditions; refuse to extend and state the reason, then submit it to the head of the credit department for approval.
If the guarantee is extended, the credit officer will draft a supplementary document to the guarantee contract, the guarantee contract and the guarantee commitment on the extension terms. The extension of the guarantee commitment will be issued in the same manner and sent to the same address as the original guarantee commitment.
Handling when having to perform guarantee obligations
Upon receiving a written request for performance of a third party's guarantee obligation, the credit officer shall re-examine the guarantee commitment regarding the validity of the guarantee and the conditions required for the third party. The credit officer shall propose a meeting of three parties: the bank, the guaranteed party, and the beneficiary of the guarantee to discuss specific payment measures and determine their payment obligations.
Release of guarantee and liquidation of guarantee contract / security contract
The guarantee contract is liquidated when the guarantee commitment expires or when the beneficiary has a written confirmation of termination of the guarantee commitment and returns the original copy of the guarantee commitment to the bank.
2.2.1.2. Branch's guarantee situation in the past
With the goal of increasing service fees and diversifying products, Dong Da Bank has continuously developed and improved guarantee services such as bid guarantees, contract performance guarantees, warranty guarantees, etc. As a result, 2005 marked a large growth in performance guarantee sales. In 2005, the arising guarantee sales were 277,579 billion, an increase of 51.7% compared to 2004, which was only 182,977 billion. However, due to limited investment in the fields of basic construction and transportation, in 2006, the arising guarantee sales decreased, lower than in 2005, specifically in 2006, the arising guarantee sales were 234.63 billion VND, only 84.53% compared to 2005.
Here is the specific implementation situation:
Status of implementation of guarantee operations :
Table 2.8: Growth rate of each type of guarantee
Unit: Billion VND, %
2004 | 2005 | 2006 | |||
Value | Value | 2005/2004 | Value | 2006/2005 | |
Bid security | 36,687 | 59,235 | 161.46% | 45,894 | 77.48% |
Contract performance guarantee | 64,262 | 97,014 | 150.97% | 87,822 | 90.53% |
Payment Guarantee | 9,734 | 9,882 | 101.51% | 9,456 | 95.69% |
Payment Guarantee | 5,727 | 4,552 | 79.49% | 5,420 | 119.06% |
Warranty Guarantee | 66,567 | 106,896 | 160.58% | 86,039 | 80.49% |
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![Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015
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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
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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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Loan Sales Situation of Military Commercial Joint Stock Bank - Hue Branch in the Period 2017 - 2019 -
Results of Tourism Development in An Giang Province Over the Past Time:
Source: General Department, Dong Da Branch of NHCT
From the data in Table 2.8, we can see that in the 3 years from 2004 to 2006, the fluctuation in the sales of guarantee services of Dong Da Commercial Bank Branch was very large and uneven over the years. However, the general trend is that the sales of guarantee services increased in 2005 and decreased in 2006, except for the payment guarantee service. Specifically:
- Bid bond business had a strong increase in revenue in 2005, up 22,548 billion, equivalent to 61.46% compared to 2004, but in 2006 revenue decreased significantly by 13,341 billion, equivalent to 22.52% compared to 2005.
- Contract performance guarantee business also increased significantly in 2005 and not much in 2006. In 2005, contract performance guarantee turnover increased by 35,752 billion, equivalent to 50.97% compared to 2004; in 2006, turnover decreased by 9,192 billion, equivalent to 9.47% compared to 2005.
- Payment guarantee business has not fluctuated significantly in recent times. In 2005, payment guarantee turnover increased by 0.148 billion VND, equivalent to 1.51% compared to 2004; in 2006, turnover decreased slightly by 0.426 billion VND, equivalent to 4.31% compared to 2005.
- The payment guarantee business had a decrease in revenue in 2005 and increased again in 2006. The 2005 revenue decreased by 1.175 billion, equivalent to 20.51% compared to 2004; in 2006 the revenue increased by 0.868 billion, equivalent to 19.06% compared to 2005.
- Warranty business had a strong increase in sales in 2005, up 60.58% compared to 2004, the absolute number was 40.329 billion. However, in 2006, this sales decreased relatively, down 19.51%, or 20.857 billion VND.
In contrast to the fluctuations in the sales of guarantee transactions, the proportion of guarantee types in the total guarantee sales has not changed much. According to the data in Table 2.9, we can see that among the types of guarantees, warranty guarantees and contract performance guarantees still account for the largest proportion of over 30%. These are also the guarantee transactions that Dong Da Bank performs the most. This comes from the reason that the main customers of Dong Da Bank are enterprises in the fields of construction and equipment manufacturing, so the guarantee transactions are mainly required.