Current Status of Retail Banking Services Development

Term deposits, with an average proportion of about 86%, the rest is from demand deposits.

By currency,

Retail capital mainly comes from

Vietnamese money

VND, average proportion 93% of total retail capital mobilization, the rest is deposits

Foreign currency. Vietinbank's foreign currency deposits mainly come from remittances. Due to the government's policy in attracting remittances being more open through the abolition of many tax regulations, no limit on the amount of money, receiving and paying goods in original currency, remittance recipients are not subject to income tax on foreign currency transferred from abroad or are required to sell foreign currency to banks. Overseas Vietnamese are also given favorable conditions

more convenient for return

visit hometown, buy house

and investment

in

Another important factor is that the number of Vietnamese people living abroad tends to increase because every year hundreds of thousands of people go abroad to work.

activities, study, training, family reunion... forming human communities

Vietnam in some new locations in Asia, the Middle East, Africa. Vietinbank with over 1,100 branches and transaction points spread across the country, with a modern technology system, highly automated transactions according to international standards and strictly secured and has agency relationships with over 1,000 reputable banks in all countries and has cooperation contracts on remittances with many foreign banks at low fees. This is the reason for the recent increase in remittances at Vietinbank.

2.2.1.2. Structure of outstanding loans and retail outstanding loans

Debt structure

Promoting its role as a large State-owned commercial bank, Vietinbank is always actively developing

synchronized declaration

solutions to improve the ability

access to capital for businesses

businesses, households, individuals, maximally and promptly meeting customers' capital and service needs.

Table 2.13. Vietinbank's outstanding debt structure Unit: Billion VND

Year

Criteria

(Source: Annual Report and Vietinbank Retail Special Report 2015-2020)

supporting enterprises; small and medium enterprises; technology application enterprises

high) on average accounts for 60% of the credit portfolio. The customer structure continues to

shifting towards increasing the proportion of segments with high profitability, which are SME customers, business households and retail. Specifically, the average retail outstanding loan ratio accounts for 48.8% of total outstanding loans and tends to increase. In 2019 and 2020, retail outstanding loans accounted for 54% and 51% of total outstanding credit, respectively.

Retail debt structure (Table 2.14)

Consider the mechanism

residual

retail debt

by customer

Over the years

Over the past years, SMEs have always been considered by VietinBank as a key customer segment.

strategy. From

2015 2020, capital and surplus

customer segment debt

SMEs maintain a high and sustainable growth rate with an average growth rate of 15.8%/year. This growth rate has brought VietinBank to the top position in terms of SME market share nationwide. The proportion of SME customers in VietinBank's asset and income structure has also grown strongly. The breakthrough in the SME segment can be seen from the expansion of scale. In 2016 alone, the number of

The number of SME customers has increased significantly from 128,993 (beginning of the year) to 142,848

(end of year). In the first 6 months of 2017, this number continued to grow with

7,500 new customers. Currently, about 25% of SMEs in Vietnam transact with VietinBank[86].

Vietinbank also launched a preferential program for unlimited money transfers.

Limited to businesses with a minimum net revenue of VND 200 billion/year.

Accordingly, customers only

need to pay

one time fee for the whole

transaction

Domestic VND transfers within 3 months or 12 months. Remittance transactions include VND transfers within Vietnam via eFAST

or via Payment Order at the transaction counters of the full fee collection branch

package. In addition, Vietinbank also provides a full package of products and services with

many non-financial benefits. Specifically, VietinBank SME Club preferential banking services

Priority reserved for Top 1,000 SME customers highly appreciated by the business sector.

SMEs, VietinBank

priority focus response

meet customer needs by

product development. Vietinbank has implemented many new credit programs suitable for the financial needs of SME customers. In particular, the fixed interest rate program for working capital loans allows small businesses to plan

Fixed financial plan over 6 months or customer support program

SMEs enjoy preferential loan and deposit interest rates.

Table 2.14. Vietinbank retail debt structure Unit: Billion VND

Year

Criteria

(Source: Annual Report and Vietinbank Retail Special Report 2015-2020)

About the remainder

personal loan debt, number

data showing personal customer debt

increased by an average of 18.1% per year in the period 2015 - 2020, reaching VND 256,783 billion in 2020. The proportion of personal loans to total outstanding loans increased from 48% in 2015 to 54% in 2019. It can be said that the trend of personal loans plays a leading role in Vietnamese commercial banks in general and Vietinbank in particular. Over the past 5 years, Vietinbank has had a clearer direction in focusing on promoting the retail sector, especially focusing on market share in personal loans. In fact, Vietnamese people borrow money from banks mainly to buy consumer goods such as cars, household appliances, smartphones, and entertainment activities such as travel.

Seizing this opportunity, Vietinbank has focused its resources on the banking sector.

retail as well as personal lending to match the main trends of the economy.

Table 2.15. Number of SME customers of Vietinbank Unit: Enterprise

Year

Criteria

(Source: Vietinbank retail topic report 2015-2020)

supporting industry

support; small business

and medium; business

public application

turmeric

High)

also owner

encourage businesses to borrow short-term capital by

VND to supplement working capital for production and business. Outstanding retail debt of medium and