Development Orientation and Goals of Bidv – Hoan Kiem Branch

using various analytical methods to more accurately reflect the financial situation of corporate customers.

- Credit rating and customer classification help banks have preferential policies for customers with healthy financial status, and at the same time have risk prevention measures for customers with problematic financial status.

- With the attention of the branch management board, branch staff are provided with the most modern equipment, telephones, computers, fax machines, etc. Internal procedural document news pages and internet information sources help staff collect comprehensive multi-dimensional information about customers. Application software supporting scoring, analysis, evaluation and classification of customers is constantly improved and updated, helping to make the work of proposing and appraising credit activities highly effective.

- The human factor is also given special attention, training courses are continuously organized, helping bank staff to increasingly improve their professional qualifications. In addition to in-depth training in analyzing and evaluating customers' financial situation, professional ethics education is also given special attention. Standards on professional ethics, building corporate culture, standards on customer transaction style are issued, requiring bank staff not only to improve their expertise but also to always put professional ethics first.

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3.4.2 Existing issues

The processing time, analysis and evaluation of loan applications at BIDV Hoan Kiem Branch is not yet effective in terms of time, especially for large enterprises, or non-traditional customers. Prolonging the appraisal and evaluation time will cause difficulties for enterprises to borrow capital, miss investment opportunities and cause costs for the bank itself.

- The assessment of the financial situation of corporate customers in specialized fields such as mining, healthcare, etc. still has many limitations. Therefore, the structure of corporate customer loans is not yet diversified across industries, and the risk dispersion in credit activities is not high.

- In reality, the work of assessing the financial situation of corporate customers still focuses on the pre-lending stage, not paying attention to the stage during the lending. This can lead to risks for banks, when bank staff are not closely monitoring the situation of loan capital use, the status of collateral or other lending conditions in the loan contract.

- The information sources that bank officers use to assess the financial situation of enterprises are still limited and unreliable. In particular, most of the financial statements provided by enterprises are not audited. This affects the results of the officers' analysis and assessment, as well as credit decisions if customers commit fraud that distorts the financial statements.

The reasons leading to the above limitations:

- Regarding the implementation of the lending process: The lending process at BIDV Hoan Kiem Branch is built scientifically and strictly from the time of marketing, understanding the needs of customers to borrow capital until debt collection and loan settlement. However, in reality, the results of assessing the financial situation of customers are sometimes ineffective, stemming from the following reasons:

+ Verification of information on financial statements provided by enterprises: for financial statements of enterprises that have not been independently audited, in many cases, bank officers have not been close in directly surveying the enterprises, checking documents and books, checking assets, raw materials, materials, etc.

+ Using data in assessment: bank staff often focus on

to analyze financial statements and business performance reports more than to analyze data from financial statements

LCTT. While the LCTT report plays an important role, reflecting the actual cash generation ability of the enterprise, it is a source of compensation for bank loans.

+ Regarding assessment content: indicators related to cash flow and cash flow statements are rarely analyzed. This leads to limited assessment of the ability to generate money and maintain stable cash flow as well as the production and business capacity of the enterprise.

- Regarding staff qualifications: Staff performing the task of assessing the financial situation of customers at BIDV Hoan Kiem Branch are quite young, with an average age of 28 years old. Therefore, although they have been well-trained and have a good grasp of the prescribed procedures, the files of large, diverse customers in many fields require a lot of experience, and the results of analysis and assessment sometimes still have unavoidable errors.

- About information sources for analysis:

+ There is no official agency that synthesizes information and evaluates and classifies businesses through financial information indicators in our country. The activity of evaluating customers' financial situation based on such reliable information will help the analysis and evaluation results and credit decisions to be more accurate.

+ Currently, the support for verifying customer information between banks in the banking system in Vietnam is not high, and some banks still consider each other as competitors. When analyzing and evaluating unaudited loan applications, banks find it difficult to cross-check customer information from other banks, and the role of the State Bank is extremely important. In addition, the role of providing information on the situation and development trends of economic sectors from the State and ministries is not timely, so banks lack important information as a reference when analyzing and evaluating.

- On the customer side:

+ Some businesses do not want to disclose their real financial situation, so it is difficult for bank staff to access accurate information, affecting the results of financial analysis.

+ In reality, businesses applying for loans often make late settlements, and the audited financial statements sent to bank officers are financial statements from many months ago, making it difficult to accurately analyze and evaluate the customer's financial situation at the time of the loan application.

Chapter 3 Conclusion

Joint Stock Commercial Bank for Investment and Development of Vietnam is one of the leading state-owned banks in the banking system in Vietnam. As a key branch, BIDV Hoan Kiem Branch has always been the leading branch in the entire BIDV system in terms of scale and operational efficiency since its establishment.

In Chapter 3 of the topic, the author delves into the current status of assessing the financial situation of enterprises in the lending process at BIDV Bank, BIDV Hoan Kiem Branch. From there, it points out the limitations and causes of those limitations in assessing the financial situation of corporate customers. On that basis, the topic will propose a number of solutions to improve the efficiency and improve the assessment of the financial situation of corporate customers in the lending process at the bank.

CHAPTER 4

COMPLETE SOLUTION FOR FINANCIAL ANALYSIS OF BUSINESS CUSTOMERS IN LENDING ACTIVITIES

BIDV - HOAN KIEM BRANCH

4.1. Development orientation and goals of BIDV - Hoan Kiem branch

Vietnam Joint Stock Commercial Bank for Investment and Development has set out the general objectives for the 2017-2020 restructuring period, continuing to be a commercial bank playing a key and leading role in terms of scale, market share, and market regulation capacity; Improving the financial situation, strengthening institutional reform, improving governance capacity according to the provisions of law in accordance with international practices; Taking the lead in applying modern banking technology, improving international credit ratings; Increasing brand value; Improving productivity and income of employees, fulfilling obligations to shareholders and responsibilities to the community.

In line with the development goals of the entire BIDV system, BIDV Hoan Kiem Branch is also constantly improving credit quality, improving efficiency in assessing the financial situation of enterprises, minimizing bad debts, maintaining relationships with old customers, and developing relationships with new customers with healthy financial situations. To achieve the set goals, BIDV Hoan Kiem Branch has set out a number of specific directions and tasks as follows:

- Improve staff capacity, especially in ethics and professional skills in assessing customers' financial situation.

- Invest in modern equipment, be at the forefront of technology, develop software to support staff in analyzing and evaluating customers' financial situation.

- The assessment of the financial situation of the enterprise needs close attention from the Branch Management Board in managing, supervising, and promptly handling difficulties and problems. At the same time, gradually perfecting the regulatory process to create synchronization and smooth operation between the departments proposing, appraising, and approving credit.

- The work of assessing the financial situation of enterprises must gradually become a competitive strength of BIDV Hoan Kiem Branch, improving the efficiency of analysis, shortening the analysis time, and attracting customers to access the bank's credit products.

With the goal of perfecting the classification of customer management by type, business sector, and business scale, leading to the financial analysis of the enterprise being authenticated and highly reliable.

4.2. Requirements and principles for completing financial analysis of corporate customers of BIDV - Hoan Kiem branch

In line with the development goals of the entire BIDV system, BIDV Hoan Kiem Branch is also constantly improving credit quality, improving efficiency in assessing the financial situation of corporate customers, minimizing bad debts, maintaining relationships with old customers, and developing relationships with new customers with healthy financial situations. To achieve the set goals, BIDV Hoan Kiem Branch has set out a number of specific directions and tasks as follows:

- Improve staff capacity, especially in ethics and professional skills in assessing customers' financial situation.

- Invest in modern equipment, be at the forefront of technology, develop software to support staff in analyzing and evaluating customers' financial situation.

- The assessment of the financial situation of corporate customers requires close attention from the branch's Board of Directors in management and supervision.

Monitor and promptly handle difficulties and problems. At the same time, gradually perfect the regulatory process to create synchronization and smooth operation between the departments of credit proposal, appraisal and approval.

- The work of assessing customers' financial situation must gradually become a competitive strength of BIDV Hoan Kiem Branch, improving analysis efficiency, shortening analysis time, and attracting customers to access the bank's credit products.

- Regularly look up information through the State Bank's credit information center (CIC): The State Bank has provided online support for credit information through the website http://www.creditinfo.org.vn . The website provides a lot of information about businesses nationwide, financial reports, customer rating instructions, online business scoring program, online individual scoring; based on financial reports, CIC calculates a number of basic indicators such as: solvency indicators, performance indicators, debt balance index, etc. to score and rank businesses. Information from CIC is that when building scoring criteria, it has considered industry factors and business scale. In recent years, CIC has improved the number of businesses and the quality of information to meet customer needs. Therefore, information about businesses on CIC is quite complete, accurate and reliable.

- In the process of analyzing customer finances, banks are mainly comparing horizontally (comparing data and indicators between years) to reflect the trend of the business. Vertical comparison (comparing with other businesses in the same business field, industry average data) still has many limitations because data of other businesses, industry average data is difficult to collect or the collected data is not consistent. If there is more industry average data, the comparison will help the analyst evaluate the business more correctly, more accurately and more accurately.