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Financial Results of Agribank Quang Trach District Branch in the Period 2014 - 2016

- Business results:

Like other commercial banks, the activities of Agribank Quang Trach District Branch always aim at profit, ensuring the rights of employees and fulfilling obligations to the State and Agribank. Every year, based on the plan assigned by Agribank, the branch implements many positive solutions such as increasing capital sources, expanding outstanding loans, increasing revenue, saving expenses, urging the recovery of bad debts, outstanding debts, outstanding interests... financial results always meet and exceed the plan. In the years 2014 - 2016, the branch always ensures income for employees. Specifically, in 2015, profit reached 25,283 million VND, an increase of 3,633 million VND, equivalent to 16.78% compared to 2015. In 2016, profit reached 30,060 million VND, an increase of 4,777 million VND, equivalent to 18.89% compared to 2015. Along with the growth of profit, average income per capita also increased significantly. In 2016, average income per capita reached 858.9 million VND/year, an increase of 137 million VND compared to 2015.

Figure 2.1 Financial results of Agribank Quang Trach District Branch in the period 2014 - 2016

(Source: year-end summary report 2014-2016 Agribank Quang Trach Branch)

2.2 Current status of capital mobilization at Agribank Quang Nam District Branch

Trach Bac Quang Binh

2.2.1 Capital scale of Agribank Quang Trach District Branch, Bac Quang Binh

During the period from 2014 to 2016, despite continuously facing many difficulties and challenges, with the efforts of the staff and appropriate management solutions, the scale and growth rate of capital mobilization still achieved positive results.

Table 2.2 shows that the scale of capital mobilization has increased steadily over the years. Increasing from

989,100 million VND (2014) to 1,218,500 million VND (2016). In 2014, the growth rate reached 9.62%, in 2015 the growth rate reached 10.87%. In particular, in 2016 the growth rate reached the highest in three years, reaching 11.12%.

Table 2.2: Scale and growth rate of capital mobilization of Agribank Quang Trach District Branch in the period 2014-2016

Unit: Million VND



2014

2015

2016

Difference

deviated

Proportion

(%)

Difference

deviated

Proportion

(%)

Total capital raised

989,100

1,096,600

1,218,500

107,500

10.87

121,900

11,12

Growth rate (%)

9.62

10.87

11,12

1.25

-

0.25

-

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Target


Year


Year


Year

Comparison 2015/2014

Comparison 2016/2015


(Source: year-end summary report 2014-2016 Agribank Quang Trach Branch) With an average capital mobilization growth rate of 10.54% in the period 2014-2016, Agribank Quang Trach District Branch is the commercial bank with the largest growth rate and capital mobilization scale in Quang Trach District. In which, the capital mobilized from

The population with high stability accounts for a proportion of the total mobilized resources.

2.2.2 Capital structure of Agribank Quang Trach District Branch, Bac Quang Binh

Regarding the structure of mobilized capital, we will analyze the capital structure of

Agribank Quang Trach District Branch by currency, term and economic sector from

That assesses the stability of the capital mobilized by Agribank Quang Trach District Branch as well as the ability to meet the capital needs of the Branch.

2.2.2.1 Capital structure by currency

Structure of mobilized capital by currency includes: VND and foreign currency USD. Rate

The importance and development trends of currencies are reflected in the following table:

Table 2.3. Capital mobilization structure by currency of Agribank Quang Trach District Branch in the period 2014-2016

Unit: Million VND



2014

2015

2016

Difference

deviated

Proportion

(%)

Difference

deviated

Proportion

(%)

Total capital raised

989,100

1,096,600

1,218,500

107,500

10.87

121,900

11,12

1. According to VND

960.100

1,074,150

1,198,400

114,050

11.87

124,250

11.56

Proportion (%)/Total operating capital

97.06

97.9

98.35

0.84

-

0.45

-

2. According to USD

29,000

22,450

20,100

-6.550

-22.59

-2.350

-10.47

Proportion (%)/Total operating capital

2.94

2.1

1.4

-0.84

-

-0.7

-

Target


Year


Year


Year

Comparison 2015/2014

Comparison 2016/2015


(Source: year-end summary report 2014-2016 Agribank Quang Trach Branch)

From the above data, we can see that in the 3 years from 2014 to 2016, domestic capital always accounted for a large and stable proportion and scale in the total capital. In 2014, domestic capital was 960,100 million VND, accounting for 97.06%; in 2015, it was 1,074,150 million VND, accounting for 97.9% and in 2016, it was 1,198,400 million VND, accounting for 98.35%. Meanwhile, foreign capital decreased over the years. In 2014, foreign capital was 29,000 million VND, accounting for 2.94% of the total capital, in 2015, it was 22,450 million VND, accounting for 2.1% and in 2016, it was 20,100 million VND, accounting for 1.4% of the total capital. The reason why foreign currency capital accounts for a small proportion is because the Branch is located in a district, where foreign currency exchange and trading activities are not yet popular. And the above results are consistent with the Branch's business orientation strategy of increasing the proportion of capital mobilized in VND in its total mobilized capital. However, although foreign currency capital accounts for a small proportion, it also plays an important role in the bank's international payment and service activities.

2.2.2.2 Capital structure by term

In terms of capital mobilization time, there are two types: non-term and term. The Bank's term forms are very diverse, meeting all the needs of depositors, including the following forms: term under 12 months, term over 12 months. The diverse terms have met all the purposes of depositors: depositing for profit, depositing for payment, depositing for safety... The Bank has created all favorable conditions for depositors and has been highly appreciated by customers, as shown through the mobilization results.

Table 2.4. Capital mobilization structure by term of Agribank Quang Trach District Branch in the period 2014-2016

Unit: Million VND




2014

2015

2016

Difference

deviated

Proportion

(%)

Difference

deviated

Proportion

(%)

Total capital raised

989,100

1,096,600

1,218,500

107,500

10.87

121,900

11,12

1. Non-term deposit

104,950

135,320

145,900

30,370

28.93

10,580

7.81

Proportion (%)/Total operating capital

10.61

12.34

11.98

1.73

-

-0.36

-

2.Term < 12T

548,320

609,800

650,820

61,480

11.21

41,020

6.72

Proportion (%)/Total operating capital

55.44

55.61

53.41

0.17

-

-2.2

-

3.Term >12T

335,830

351,480

421,780

15,650

4.67

70,300

20


Proportion (%)/Total operating capital

33.95

32.05

34.61

-1.9

-

2.56


Target


Year


Year


Year

Comparison 2015/2014

Comparison 2016/2015


(Source: year-end summary report 2014-2016 Agribank Quang Trach Branch)

Table 2.3 shows that demand deposits account for a relatively small proportion of total mobilized capital, because demand deposits are not very stable because customers can deposit and withdraw at any time, the Bank is passive in using this capital source for lending investment activities. In 2014, this capital source was 104,950 million VND, accounting for 10.61%. In 2015, demand deposits increased by 30,370 million, equivalent to 28.93% compared to 2014, accounting for 12.34% of total capital. By 2016, this deposit source reached

145,900 million VND, accounting for 11.98% of the total capital, the growth rate compared to 2015 was 7.81%. This result is due to the fact that economic organizations and residents in the area deposit money at the Bank, in addition to the purpose of enjoying convenient payment and money transfer services, they also take advantage of depositing idle money in the Bank to avoid the situation of dead capital. Because people cannot calculate in advance the need for cash in the future, they deposit in non-term deposits so that they can withdraw immediately when needed. Therefore, this source of capital is always fluctuating and unstable, but in return, the cost for this source of capital is the lowest.

Term deposits account for the largest proportion of total mobilized capital. The proportion of term deposits under 12 months in 2014, 2015, 2016 is 55.44%; 55.61%; 53.41% respectively. The growth rate of term deposits under 12 months in 2015 compared to 2014 is 12.41% equivalent to 61,480 million VND, in 2016 compared to 2015 is 6.72% equivalent to 41,020 million VND. The reason for this slow growth may be due to businesses. For example, businesses always have idle money for a short period of time (day, week): wages, salaries that have not yet been paid, money for purchasing raw materials that have not yet been paid... Businesses really want to make a profit on this idle money in a short period of time, but the Bank stipulates a minimum deposit term of 1 month, so businesses do not want to deposit. This is a source of capital that the Bank should take advantage of by diversifying shorter deposit terms such as 1 week, 2 weeks, 3 weeks with flexible interest rates. The proportion of term deposits over 12 months in 2014 was 33.95% in 2015 was 32.05% and in 2016 was 34.61%. The growth rate of term deposits over 12 months in 2015 compared to 2014 was 4.67%, in 2016 compared to 2015 was 20%. This source of capital is stable, customers deposit money in the Bank with the purpose of earning interest and only withdraw it when due. This helps the Bank to be more proactive in using capital for lending, increasing capital efficiency, but the disadvantage of this source of capital is the high interest cost.

2.2.2.3 Structure by economic sector

Table 2.5. Capital mobilization structure by economic sector of Agribank Quang Trach District Branch in the period 2014-2016

Unit: Million VND




2014

2015

2016

Difference

deviated

Proportion

(%)

Difference

deviated

Proportion

(%)

Total capital raised

989,100

1,096,600

1,218,500

107,500

10.87

121,900

11,12

1.TG of the organization

110,750

124,720

127,540

13,970

12.6

2,820

2.3

Proportion (%)/Total operating capital

11.19

11.37

10.47

0.18

-

-0.9

-

2. Personal TG

878,350

971,880

1,090,960

93,530

10.65

119,080

12.25


Proportion (%)/Total

88.81

88.63

89.53

-0.18

-

0.9

-

Target


Year


Year


Year

Comparison 2015/2014

Comparison 2016/2015


(Source: year-end summary report 2014-2016 Agribank Quang Trach Branch)

Deposits of economic organizations: This is the source of mobilized capital with the lowest cost, directly affecting the business activities of the branch. Deposits of economic organizations are the temporarily idle currency that has not been used in the production and business process of the enterprise, deposited in the Bank not for the main purpose of earning interest, but mainly used for the purpose of payment for money transfer to buy and sell goods.

In 2014, mobilized capital was 110,750 million VND, accounting for 11.19% of total capital.

% of total capital. In 2015, it increased by 13,970 million (up 12.6%) compared to 2014. By 2016, mobilized capital reached 127,540, up 2,820 million (up 2.3%) compared to 2015. We see that the proportion of this type of mobilization is quite small, the reason is that Agribank Quang Trach District Branch since its establishment until now, although in the process of operation has gradually approached modern technology, it has only stopped at the same level as other branches in the same system, so the advantage of technology is not yet considered a competitive factor.

The results of mobilization from economic organizations are not high compared to the potential of the Bank, so in the present as well as in the future, Agribank Quang Trach District Branch needs to continue to promote measures to exploit this capital source to achieve better efficiency such as account opening procedures need to be simple and quick to facilitate customers, along with the advantages of accuracy and safety of payment through the Bank will attract more economic units to the branch.

Deposits mobilized from residents: This is a traditional form of capital mobilization of Agribank Quang Trach District Branch, familiar to local residents. In recent times, the branch has applied many measures to exploit capital in a stable and profitable way for business. Mobilization from residents always accounts for a high proportion, over 80%. Specifically, in 2014, it reached 878,350 million VND, accounting for 88.81% of the total mobilized capital, by 2015, the mobilized capital from residents was 971,880 million VND, accounting for 88.63% of the total mobilized capital in the year. This number continues to increase, up to 1,090,960 million VND by the end of 2016, an increase of

119,080 million (up 12.25%) compared to 2015. The balance of savings accounts from residents increased over the years, proving that the branch has made efforts in capital mobilization work.

It can be said that this is an important source of capital not only for the Bank but also for the economic development of the province. However, the amount of savings deposits at Agribank Quang Trach District Branch is still low compared to the local population. The reason is that customers are still hesitant when transacting with the Bank, most of them are still confused about the procedures, so the Bank staff need to help and guide them to transact with the Bank in a convenient and easy-to-understand way. Moreover, non-state joint stock commercial banks and other commercial banks in the area often increase high savings interest rates, and have more diverse and attractive forms of capital mobilization, which have attracted some capital from the population.

2.2.3 Market share of capital sources in the area of ​​Agribank Quang Trach District Branch, Bac Quang Binh

Table 2.6. Market share of capital sources in Quang Trach district, Bac Quang Binh

Unit: Million VND


Market share of capital


STT

Billionaire Bank

Amount Amount Weight Amount Weight (%) (%)


- Agribank Quang Nam Branch

1

Trach







2

- Social Policy Bank

15,014

0.64

18,664

0.70

18,963

0.65

3

- Development and Investment Bank

503,890

21.41

642,546

23.95

650,834

22.48

4

- Sacombank

132,668

5.64

133,080

4.96

145,970

5.04

5

- VP Bank

14,550

0.62

14,787

0.55

15,539

0.54

6

- Credit fund

698,551

29.68

701,651

26.15

755,419

26.09

7

- Viettinbank

-


75,815

2.83

90,162

3.11

Total 2,353,773

100

2,683,143

100

2,895,387

100

2014 2015 2016


Proportion

(%)


989,100 42.02 1,096,600 40.87 1,218,500 42.08


(Source: State Bank of Quang Binh province, period 2014-2016)

The capital market share of Agribank Quang Trach District Branch, Bac Quang Binh in the period of 2014-2016 accounted for the largest proportion of the market share in Quang Trach District. Specifically, in 2014 it was 42.02%, in 2015 it was 40.87%, the capital market share in 2015 decreased due to the appearance of Vietinbank Quang Trach Branch in the area, but in 2016 the capital market share increased again, accounting for 42.08% of the total mobilized capital in the district. In short, in the past 3 years, the market share of Agribank Quang Trach District Branch has always ranked first in the total mobilized capital of the whole district. This shows that Agribank Quang Trach District Branch has gained the trust of customers in capital mobilization activities. In addition, the opening of mobile transaction points in the past time has helped the bank collect deposits from customers in remote and difficult-to-travel areas.

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