LIST OF CHARTS, DIAGRAMS
Diagram 1.1. Credit risk management process 28
Diagram 2.1. Organizational structure 44
Diagram 2.2. Credit risk management organization model of Nam A Bank 54
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Diagram 2.3. Three lines of defense model at Nam A Bank - Quang Ninh Branch 54 Diagram 2.4. Problem debt management diagram 70
Chart 2.1. Credit structure of Nam A Bank - Quang Ninh Branch by loan size in the period 2017 - 2019 51
LIST OF ABBREVIATIONS
Board of Directors Board of Directors
Board of Supervisors
Customer Relations Officer Customer Relations Officer Credit Officer
Customer Service Specialist
DPRR Risk Reserve
Director
Business Support Business Support
Customer
Science and Technology Individual customers
KTGD Transaction Accounting
KU Contract
Bank
State Bank of Vietnam
NQH Overdue Debt
Risk Management
RRTD Credit Risk
Credit institutions
Collateral Assets
INTRODUCTION
1. Reason for choosing the topic
Increasingly deep economic integration with the world economy has created favorable conditions for financial activities.
With both direct and indirect factors, large bank risks are inevitable and have the potential to become a serious threat to the sustainable development of banks in particular, the financial market and the economy in general.
Lending is an important and basic activity, bringing in the majority of revenue and profit in the total income of the bank.
total risk level of banking activities. The issue of risk and credit risk management of commercial banks in Vietnam becomes urgent when the numbers of bad debts are increasing and difficult to control. Risk management is the best way that all credit institutions need to implement to avoid losing capital. Therefore, credit risk management has the effect of
risks in credit granting activities, aiming at international standards in credit risk management in general and credit risk management in lending to individual customers in particular.
As one of the joint stock commercial banks in Vietnam and classified by the State Bank as a healthy operating bank, Nam A Commercial Joint Stock Bank has made initial progress in credit risk management, proactively applying control and handling of problem debts. By the end of 2019, the ratio
Nam A Bank's bad debt ratio is at 1.67% (annual report 2019). Basically, Nam A Bank has resolved bad debt issues and moved to a stage of sustainable and healthy development.
Quang Ninh is a province with a rapidly developing economy. Nam A Commercial Joint Stock Bank - Quang Ninh Branch focuses on developing the banking sector.
retail banking, the proportion of personal loans to total loans at Nam A Commercial Joint Stock Bank - Quang Ninh Branch from 2017 to present has continuously increased and reached 47.37% in 2019 (Nam A Bank internal report in 2019). Therefore, credit risks in personal loans are always latent and can occur at any time, resulting in Nam A Commercial Joint Stock Bank - Quang Ninh Branch having to increase costs, delay interest collection, and even lose loan capital, affecting the overall business performance of the entire bank. Therefore, the urgent requirement is that credit risks in personal loans must be scientifically managed and controlled, ensuring credit activities within acceptable risk limits, minimizing losses arising from credit risks, improving credit quality and profitability.
During my study and research at Nam A Commercial Joint Stock Bank - Quang Ninh Branch, I chose the research topic "Credit risk management for personal loans at Nam A Commercial Joint Stock Bank - Quang Ninh Branch" as my master's thesis.
2. Overview of the research situation of the topic
Credit risk management is one of the important parts of any commercial bank, therefore, there have been many research works on this topic. The research works have reflected the general theoretical basis and research at each specific unit, showing the aspects of credit, credit risk and management.
credit risk management in customer lending
individual in particular
Master's thesis in economics: "Credit risk management at Vietnam Technological and Commercial Joint Stock Bank" by author Nguyen Thu Trang - University of Commerce, 2015 has synthesized the concepts, general content of credit risk management, the current status of credit risk management at Nam A Bank - Quang Ninh Branch in the period 2013-2015.
Master's thesis in economics: "Credit risk management for lending activities"
"Individual customers at ACB Hanoi branch" by author Le Ba Cuong - Banking Academy, in 2016, presented basic theoretical issues on personal lending, credit risk management in personal lending, and summarized the strengths and weaknesses of the current situation of credit risk management at ACB Hanoi branch in the period 2016 - 2018.
Thesis of Nguyen Duc Tu (2012), Credit risk management at Vietnam Joint Stock Commercial Bank for Industry and Trade , PhD thesis in economics, National Economics University. The thesis has clarified the theoretical basis of credit risk of Commercial Banks, the necessity of credit risk management, the content of credit risk management including: credit risk recognition, credit risk measurement, credit risk response and credit risk control. In addition, the author also studied the credit risk management experience of banks such as: Korea Development Bank, Nova Scotia Bank - Canada, Citibank of the US, ING Bank of the Netherlands and KasiKom Bank of Thailand. Through studying the risk management of the above banks, the author draws lessons in credit risk management of Vietnam Joint Stock Commercial Bank.
Master's thesis Nguyen Tuan Khanh (2014), Credit risk management for corporate customers at Military Commercial Joint Stock Bank - Da Nang Branch , Master's thesis in Business Administration, Da Nang University. In his theoretical part, the author has presented basic issues on credit risk management; solutions to improve credit risk management.
Refer to documents such as procedures, regulations, and reports of Nam A Commercial Joint Stock Bank.
development direction for your topic.
Each study, in a different aspect, has basically reflected the specific industry, field and unit that it studies. However, there has not been any research topic
Research on credit risk and credit risk management in personal lending activities at Nam A Commercial Joint Stock Bank - Quang Ninh Branch in the period of 2017 - 2019, a period with many changes in the banking industry in general and Nam A Commercial Joint Stock Bank - Quang Ninh Branch in particular.
3. Objectives and research tasks of the topic
+ Research objective: The topic proposes solutions to enhance credit risk management in lending to individual customers at Nam A Commercial Joint Stock Bank - Quang Ninh Branch.
+ Research tasks:
- Firstly, systematize the theoretical basis of credit risk management in lending to individual customers of commercial banks.
- Second, analyze and evaluate the current status of credit risk management in lending to individual customers at Nam A Commercial Joint Stock Bank - Quang Ninh Branch
existence and cause.
- Third, propose solutions to strengthen credit risk management in lending to individual customers at Nam A Commercial Joint Stock Bank - Quang Ninh Branch.
4. Research objects and scope
- Research object: Credit risk management in lending to individual customers of commercial banks in general, and of Nam A Commercial Joint Stock Bank - Quang Ninh Branch in particular.
- Research scope:
+ About space: Nam A Commercial Joint Stock Bank - Quang Ninh Branch.
+ About time: Data was collected during the period 2017 - 2019.
+ Content: Credit risk management activities in lending to individual customers at Nam A Commercial Joint Stock Bank - Quang Ninh Branch. Solutions until 2025.
5. Research methods
5.1. Data collection method
The thesis uses secondary data including general theoretical issues on risk.
credit risk, credit risk management in banking; overview of the formation and development process of Nam A Commercial Joint Stock Bank - Quang Ninh Branch; organizational structure, operating characteristics and business performance of Nam A Commercial Joint Stock Bank
- Quang Ninh Branch; lending process and current status of credit risk management in lending to individual customers at Nam A Commercial Joint Stock Bank - Quang Ninh Branch... These data are inherited from books, textbooks, other published research works, extracted from the website of Nam A Commercial Joint Stock Bank - Quang Ninh Branch and collected from internal reports of Nam A Commercial Joint Stock Bank - Quang Ninh Branch.
5.2. Data analysis method
- Statistical, synthesis and analysis method: from the collected data, the author statistically and synthesized into specific and clear tables, thereby analyzing the current status of credit risk management in lending activities to individual customers at Nam A Commercial Joint Stock Bank - Quang Ninh Branch.
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Targets and data related to risk management activities and lending activities in the period 2017-2019 of Nam A Commercial Joint Stock Bank - Quang Ninh Branch.
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The thesis boldly made comments on the successes and limitations in credit risk management in lending to individual customers at Nam A Commercial Joint Stock Bank - Quang Ninh Branch, and at the same time assessed the causes leading to the above successes and limitations.
6. Scientific and practical significance of the topic
- In terms of theory: The study contributes to perfecting the theory of credit risk management for personal loans in the current open and integrated economy.
- In practice: Correctly assess the current status of credit risk management for personal loans at Nam A Commercial Joint Stock Bank - Quang Ninh Branch,
Propose main systematic and feasible solutions to improve credit risk management for personal loans at Nam A Commercial Joint Stock Bank - Quang Ninh Branch in the future.
7. Structure of the thesis
In addition to the introduction and conclusion, the thesis is divided into 3 chapters:
Chapter 1: Theoretical basis of credit risk management in personal lending of commercial banks.
Chapter 2: Current status of credit risk management in lending activities at Nam A Commercial Joint Stock Bank - Quang Ninh Branch.
Chapter 3: Solutions to enhance credit risk management in lending to individual customers at Nam A Commercial Joint Stock Bank - Quang Ninh Branch.