2006 was 70,323 million VND, 2007 was 107,591 million VND, an increase of 53% compared to 2006, and in 2008 it decreased to 106,515 million VND, a decrease of 1% compared to 2007. Similar to the general lending situation of VP Bank Giang Vo, the outstanding debt in 2008 decreased according to VP Bank's general policy, credit activities for enterprises also encountered difficulties. Regarding debt collection activities, the bank performed well. Especially in 2007, the debt collection situation was very positive. In 2008, due to the difficult economic situation, businesses encountered many difficulties, so debt collection was slower. According to forecasts, until 2009, the economic situation will continue to affect the activities of businesses and banks. To operate effectively, banks need to continue to expand lending but must limit the rate of bad debt and doubtful debt.
2.2. Loan structure for SMEs by term
Table 2.16: Lending situation for state-owned enterprises by term
Unit: Million VND
Target
2006 | 2007 | 2008 | ||||
Amount | % | Amount | % | Amount | % | |
1. Loan sales | 85957 | 100 | 141829 | 100 | 156012 | 100 |
- Short term | 46417 | 54 | 73751 | 52 | 63965 | 41 |
- Medium & long term | 39540 | 46 | 68078 | 48 | 92047 | 59 |
2. Debt collection turnover | 15634 | 100 | 34238 | 100 | 49497 | 100 |
- Short term | 6723 | 43 | 10956 | 32 | 19799 | 40 |
- Medium & long term | 9811 | 57 | 23282 | 68 | 29698 | 60 |
3. Total outstanding debt | 70323 | 100 | 107591 | 100 | 106515 | 100 |
- Short term | 33755 | 48 | 40885 | 38 | 46867 | 44 |
- Medium & long term | 36568 | 52 | 66706 | 62 | 59648 | 56 |
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Short-term lending turnover always accounts for a high proportion in the credit activities of banks. In 2006, short-term lending turnover was 46,417 million VND, accounting for 54% of lending turnover to state-owned enterprises. In 2007, it was 73,751 million VND, accounting for 52%, and in 2008, it was 32,245 million VND, accounting for 41%. The proportion of short-term lending has decreased because the investment structure of state-owned enterprises is currently investing in long-term projects, so the need for short-term capital has decreased. On the contrary, long-term lending turnover has increased very quickly. In 2006, it was 39,540 million VND, accounting for 46%, in 2007, it was 68,078 million VND, accounting for 48% of lending turnover to state-owned enterprises. By 2006, it had increased to a very high 92,047 million VND, accounting for 59%. The main reason is that state-owned enterprises change their business structure. State-owned enterprises now not only focus on trade and service sectors but also focus on key sectors of the country, industries...
As well as short-term lending, short-term debt also decreased. In 2006, it was 33,755 million VND, accounting for 48%, in 2007, it was 38% of total debt, in 2008, it was 46,867 million VND, accounting for 44%. Long-term debt increased, in 2006, it was 36,568 million VND, accounting for 52% of total debt, in 2007, it was 66,706 million VND, accounting for 62%, in 2006, long-term debt decreased to 59,648 million VND, accounting for 56%. The bank has made positive developments, the expansion of customer base has achieved very high results. In particular, the bank's debt collection work is very good. The reason is that the bank has issued policies to ensure the expansion of credit activities, increase outstanding loans while still ensuring credit quality, and at the same time due to the efforts of A/O officers to always check and monitor the business activities of enterprises.
2.3. Calculate the indicators reflecting the level of credit expansion for domestic enterprises at VP Bank Giang Vo.
Calculate customer metrics:
Number of borrowers
Loan customer ratio =
Total number of borrowers
Table 2.8: Customer proportion over the years
Target
2006 | 2007 | 2008 | |
Proportion of enterprises borrowing capital | 47.3% | 52.7% | 65.6% |
The bank has promoted activities to attract customers, especially SOEs. The result is that the proportion of SOEs has increased over the years. In 2006, it was 47.3%, in 2007, it was 52.7%, in 2008, it was 65.6%. The number of SOEs is an indicator to evaluate the expansion of lending in terms of scale. The more SOEs there are, the more the bank can meet the capital needs of more customers. If the number of customers increases, the bank can expand its lending in terms of scale. The larger the scale, the more effective the bank is. This result is due to the fact that the bank has taken many measures to attract new customers and maintain good relationships with old customers. The bank has taken measures to attract new customers and maintain good relationships with old customers by offering incentives on interest rates, payment terms and methods, etc.
+ Absolute growth in number of customers
absolute
Growth value= | Enterprise year (n) | - | Enterprise year (n – 1) |
+ Relative growth rate in number of customers
Relative growth rate in the number of state-owned enterprises
= | Absolute growth in the number of state-owned enterprises Total loan turnover for domestic enterprises in year (n-1) | × 100% |
Table 2.9: Relative and absolute growth rates in the number of state-owned enterprises
Target
2007 | 2008 | |
Absolute growth rate | 558 | 1284 |
Relative growth rate | 46.6% | 73.1% |
The bank still ensures the growth in the number of enterprises. That is due to the management and leadership of the Board of Directors, General Director of VP Bank in general, the leadership of the Board of Directors of VP Bank Giang Vo in particular, and the efforts of all employees. In 2007, there were 558 enterprises, an increase of 46.6% compared to 2006, in 2008 there were 1,284 enterprises, an increase of 73.1% compared to 2007. The number of enterprises increased every year due to the customer attraction policy of VP Bank Giang Vo, on the other hand, it is also due to customers' trust and coming to the bank. This indicator reflects the level of fast or slow expansion of lending in terms of scale. Here, the growth rate in the number of enterprises > 0: the number of enterprises in the next period > the number of enterprises in the previous period, the bank has expanded lending to enterprises in the previous period.
Calculate loan turnover indicators :
Business loan turnover
+ Loan turnover ratio =
Total loan turnover
Table 2.10: Proportion of loan turnover of state-owned enterprises
Spending
2006 | 2007 | 2008 | |
Sales ratio lending to SMEs | 45.8% | 44.4% | 45% |
Over the past three years, we can see that the proportion of lending to SMEs has always been stable. In 2006, it accounted for 45.8% of lending, in 2007, it accounted for 44.4% of lending and in 2008, it was 45.0%. Sales represent the extent of credit expansion of the bank. Through the proportion of sales, we can see how the bank's business situation is going. Through the table above, we can see that the bank's business situation is always stable. Although 2008 was affected by the global economic crisis, the bank still maintained a high proportion of lending, proving that the bank is reputable, respected by customers and operates effectively.
+ Absolute growth in loan turnover:
= | Total loan turnover for SOEs year (n) | - | Total loan turnover for state-owned enterprises in the year (n– 1) |
+ Relative growth rate in loan turnover
Relative growth rate in loan volume
Absolute growth rate sales | |
= | x 100% |
Total loan volume for Enterprise year (n-1) | |
Table 2.11: Relative and absolute growth rates in loan turnover
Target
2007 | 2008 | |
Absolute growth in loan volume | 55872 | 14183 |
Relative growth rate in loan volume | 65% | 10% |
In 2007, it increased by 55,872 million VND, an increase of 65% compared to 2006.
2008 increased to 14,183 million VND, an increase of 10% compared to 2007. In 2007, the absolute growth in sales and the relative growth rate reached a high level. 2007 was a successful year for VP Bank Giang Vo. The policy of expanding credit activities along with the socio-economic situation contributed to the success of the bank's credit activities. In 2008, due to the policy of narrowing lending, focusing on recovering bad debts and bad debts, the bank's lending rate decreased significantly. However, according to forecasts, by mid-2009, when the economic crisis is overcome, the lending situation will improve.
Calculate the debt balance ratios
+ Loan balance ratio =
Outstanding debt for state-owned enterprises
Total outstanding debt
Table 2.12: Proportion of outstanding loans to domestic enterprises
Target
2006 | 2007 | 2008 | |
Outstanding loan ratio Enterprise loan | 47.7% | 44.8% | 45.7% |
Outstanding loans are the amount of money that the bank is currently lending as of a specific point in time. The larger the outstanding loan ratio, the higher the level of lending expansion.
The proportion of outstanding loans to SMEs over the years is high, which shows that SMEs are the main customers of the bank. In 2006, it was 47.7%, in 2007, it decreased slightly but not significantly to 44.8% and in 2008 it increased to 45.7%. The high level of outstanding loans to SMEs requires banks to analyze the credit quality of SMEs very closely to avoid risks for the bank. In 2007, although the loan turnover to SMEs increased, the proportion of outstanding loans to the bank decreased because the bank had completed debt collection activities well.
+ Absolute growth in outstanding debt:
absolute on outstanding debt
Growth rate= | Total outstanding debt for Enterprise year (n) | - | Total outstanding debt for Year of Enterprise (n– 1) |
+ Relative growth rate of outstanding debt:
relative to outstanding debt
Growth rateAbsolute growth in outstanding loans | ||
= | Total outstanding debt for state-owned enterprises in year (n-1) | x 100% |
Table 2.13: Relative and absolute growth rates in outstanding loans
Target
2007 | 2008 | |
Absolute growth in outstanding loans | 37268 | (1076) |
Relative growth rate of outstanding loans | 53 % | (1)% |
The outstanding debt level in 2007 was higher than in 2006 due to the bank's policy of expanding credit activities for state-owned enterprises while still ensuring credit quality. The decrease in 2008 was due to the bank's credit tightening policy in accordance with the economic recession and the general operating situation of VP Bank. 2008 was a difficult year not only for VP Bank Giang Vo but also for commercial banks in general. The impact of the global crisis along with the domestic economic situation affected the operations of
Domestic enterprises also affected banking operations. In 2008, banks had to narrow credit operations and tighten conditions for loans.
Calculate debt collection turnover indicators
Debt collection for state-owned enterprises
+ Loan collection ratio =
Total debt collection
Table 2.14: Loan collection ratio
Target
2006 | 2007 | 2008 | |
Loan collection ratio | 38.7% | 43.3% | 44.3% |
In the past three years, the bank has done very well in debt collection. In 2006, the debt collection rate was 38.7%, in 2007 it was 43.3%, in 2008 it was 44.3%. In 2007 and 2008, the bank did well in debt collection, especially bad debts and uncollectible debts. This was due to the efforts of A/O officers in debt collection for the bank. The bank must control bad debts and uncollectible debts through controlling lending conditions. If this is done well, the bank will not only expand its credit activities but also manage bad debts and uncollectible debts well, helping the bank operate more effectively.
+ Absolute growth in debt collection:
absolute
Growth value= | Total debt collection for Enterprise year (n) | - | Total debt collection for Enterprise year (n – 1) |
+ Relative growth rate in debt collection:
= | Absolute growth in debt collection | x 100% |