Improving business efficiency of Vietnam Technological and Commercial Joint Stock Bank

LIST OF TABLES

Table 2.1: Formula for calculating business efficiency indicators of commercial banks 46

Table 3.1: Techcombank's capital mobilization 66

Table 3.2: Techcombank's outstanding loans 69

Table 3.3: Techcombank's personal loan products 75

Table 3.4: Techcombank's operating network 75

Table 3.5: Techcombank's business performance 81

Table 3.6: Techcombank's income structure 81

Table 3.7: Techcombank's operating cost structure 82

Table 3.8: Return on equity (ROE) of banks 87

Table 3.9: Return on assets (ROA) of Vietnamese commercial banks 88

Table 3.10: Net interest margin (NIM) of Vietnamese commercial banks 88

Table 3.11: Proportion of non-interest income (NII) of Vietnamese commercial banks 89

Table 3.12: Techcombank's corporate income tax payment ratio 91

Table 3.13: Ranking order of corporate income tax payments of banks 91

Table 3.14: Average income per capita of banks 93

Table 3.15: Capital adequacy ratio of Vietnamese commercial banks 101

Table 3.16: Techcombank's liquidity reserve ratio 102

Table 3.17: Efficiency of capital mobilization for lending of banks 102

Table 3.18: Loan to total asset ratio of Vietnamese commercial banks 103

Table 3.19: List of Techcombank brand awards 104

Table 4.1: Some development indicators of the whole country 115

Table 4.2: Forecast of investment demand for the period 2015-2020 135

Table 4.3: Forecast of human resource training needs for Techcombank 144

LIST OF ABBREVIATIONS

1. Vietnamese

ACB	: Asia Commercial Joint Stock Bank
BIDV	: Bank for Investment and Development of Vietnam
EIB	: Joint Stock Commercial Bank for Import and Export
HSBC	: Hongkong and Shanghai Banking Corporation
State Bank of Vietnam	: State Bank
Commercial Bank	: Commercial Bank
TMCP	: Joint stock trading
Sacombank	: Saigon Thuong Tin Commercial Joint Stock Bank
Eximbank	: Joint Stock Commercial Bank for Import and Export
TCTD	: Credit institution
Techcombank	: Techcombank
VCB	: Bank for Foreign Trade of Vietnam
VIB	: International Commercial Joint Stock Bank
SHB	: Saigon – Hanoi Bank
Vietcombank	: Joint Stock Commercial Bank for Foreign Trade of Vietnam
Vietinbank	: Vietnam Joint Stock Commercial Bank for Industry and Trade
VPBank	: Vietnam Prosperity Joint Stock Commercial Bank
Corporate Income Tax	: Business income
2. English
ATM	: Automatic Teller Machine
CAR	: Capital adequacy ratio
FDI	: Direct investment capital
GATS	: General Agreement on Trade in Services
GDP	: Gross domestic product
IMF	: International Monetary Fund
ROA	: Return on total assets
ROE	: Return on equity
WB	: World Bank
WTO	: World Trade Organization.

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1. Reasons for choosing the topic

INTRODUCTION

In recent years, the Vietnamese banking system has been strongly reformed in terms of both scale and service quality as well as constantly improving banking products and technology. At the same time, in the context of globalization, foreign banks also operate in Vietnam, having both positive and negative impacts on economic development in general and the development of the domestic banking system in particular. Foreign banks often have large capital, better management skills and more efficient business operations. Therefore, right at home, Vietnamese commercial banks have to compete fiercely with foreign banks. According to assessments by prestigious international organizations such as the World Bank and the International Monetary Fund, the operational efficiency of the Vietnamese commercial banking system is still far behind that of commercial banks in developed countries.

Since its establishment (1993), Vietnam Technological and Commercial Joint Stock Bank (Techcombank) has gradually affirmed itself as one of the largest joint stock commercial banks (100% shares) with a strong brand and advantages in the retail sector. In the recent past, Techcombank has achieved many achievements in business results as well as contributed to economic and social development, however, its operating efficiency is not high and unsustainable. In the context of Vietnam's economy as well as the context of the banking system being strongly restructured, studying the business efficiency of Techcombank is of particular importance.

Up to now, there has been no scientific research, especially in the form of a doctoral thesis, on improving business efficiency for joint stock commercial banks as well as for Techcombank.

Based on the above situation, the author chose the issue: "Improving the business efficiency of Vietnam Technological and Commercial Joint Stock Bank " as the topic of his doctoral thesis in Development Economics. Researching the business efficiency of Techcombank is an urgent requirement to propose directions and solutions to improve the business efficiency of Techcombank, contributing to improving the quality of the bank.

high position, competitiveness of this bank in particular and the Vietnamese banking system in general .

2. Research purpose

2.1. Theoretical

Clarifying theoretical issues on business efficiency of commercial banks to apply to the study of business efficiency of joint stock commercial banks in Vietnam; proposing a system of criteria and indicators to evaluate the business efficiency of joint stock commercial banks in the context of globalization.

2.2. In practice

Applying theoretical issues and proposed indicators to evaluate Techcombank's business performance in the period 2010 - 2014 (including advantages, disadvantages and causes of disadvantages). From there, propose development orientation and solutions to improve Techcombank's business performance in the context of globalization.

3. Research object and scope

3.1. Research subjects

Business performance of Vietnam Technological and Commercial Joint Stock Bank in the context of globalization.

3.2. Scope of research

+ In terms of time: Research to evaluate the current business performance of Techcombank in the period 2010 - 2014 and vision to 2020.

+ In terms of space: Business activities of Vietnam Technological and Commercial Joint Stock Bank are nationwide.

+ Scientifically: Research both theoretically and practically on business efficiency, factors influencing business efficiency and the system of indicators to evaluate business efficiency of Techcombank in the socio-economic conditions of Vietnam and in the context of globalization. From clarifying related theoretical issues and based on the results of assessing the current situation, propose development orientations and solutions to improve

Techcombank's business performance to 2020 in the context of globalization.

4. Research methods

4.1. Approach

The author approaches the research subject (Techcombank's business efficiency) from clarifying theoretical issues to identifying the research subject and then determining solutions to improve Techcombank's business efficiency. At the same time, using systems theory to study the issue of improving Techcombank's business efficiency in the context of globalization.

4.2. Research methods

To achieve the set objectives, the thesis uses the following main methods: (1). Statistical analysis method: To analyze the business performance

business and business performance of Techcombank. Data is grouped in a comprehensive and detailed manner through stages, ensuring chain comparison and is represented and illustrated by diagrams and tables.

(2). System analysis method: To approach and analyze Techcombank's business performance as a system as well as consider it as a subsystem in the commercial banking system and place it in the entire economy of our country.

(3). Expert method: Used to summarize research works; in which, generalize and analyze opinions, draw conclusions as well as verify the author's new proposals. The author groups the opinions of domestic and foreign scholars according to each issue to determine the points that the author agrees with and can inherit. At the same time, consider whether those opinions are incorrect or no longer suitable for the new situation.

(4). Survey method: Used to survey and evaluate the quality of Techcombank's services and personnel.

(5). Forecasting method: Used to forecast Techcombank's future business performance indicators.

(6). Interpretive and inductive methods: Used to analyze the current state of business performance and propose development directions and solutions to improve efficiency.

Techcombank business.

5. New contributions of the thesis

+ In terms of theory: The thesis presents new concepts and contents on Techcombank's business efficiency from the perspective of the bank's own efficiency and social efficiency; Proposes a system of criteria and indicators to evaluate Techcombank's business efficiency suitable to Vietnam's conditions and in the context of globalization.

+ In terms of practice: The thesis affirms that Techcombank is one of the large joint stock banks, playing an important role in the development of the national economy (contributing to the budget quite well, creating many jobs, participating significantly in lending capital for production development, etc.); Pointing out the current state of Techcombank's business performance (including successes, problems and causes from both the state and Techcombank); Proposing solutions to contribute to improving Techcombank's business performance; At the same time, recommending to the state and the State Bank to improve mechanisms and policies so that commercial banks can operate more effectively and sustainably.

6. Structure of the thesis

In addition to the introduction and conclusion, the thesis is structured into 4 chapters:

- Chapter 1: Overview of research works related to the topic

- Chapter 2: Theoretical and practical basis of commercial bank business efficiency.

- Chapter 3: Current business performance of Vietnam Technological and Commercial Joint Stock Bank in the period 2010-2014

- Chapter 4: Solutions to improve business efficiency of Vietnam Technological and Commercial Joint Stock Bank

CHAPTER 1

OVERVIEW OF RESEARCH WORKS RELATED TO THE TOPIC

From the requirement to clarify theoretical and practical issues on the issue of business efficiency of commercial banks to apply to the study of business efficiency of Techcombank, the author collected more than 80 documents (44 domestic documents, 16 foreign documents and more than 20 doctoral theses). Based on the collected documents, the author has investigated to what extent domestic and foreign scholars have mentioned the issue of business efficiency of commercial banks? In their research results, which points can the thesis inherit to serve the purpose of building a theoretical foundation to meet the research requirements of the thesis, and at the same time clearly identify the points that the thesis still needs to continue to study in depth to clarify. In particular, scholars have mentioned the system of indicators to evaluate the business efficiency of commercial banks in the conditions of globalization and international integration to be able to refer to building a set of indicators to evaluate the business efficiency of commercial banks in Vietnam. To achieve this purpose, the thesis has collected documents and overviewed the following issues:

1.1. Overview of the concept of commercial banks in the context of globalization

The thesis has studied 16 documents on the issue of commercial banks. They have presented different concepts of commercial banks. Although there are differences, in general, scholars who study the concept of commercial banks agree that commercial banks are a type of monetary trading company, specializing in providing financial services and operating in the financial services industry, taking profit as an important criterion for business activities.

1.1.1. Concept of commercial banks

In general, there are many research works on the concept of commercial banking.

a). Domestic documents:

Scholars interested in this issue believe that commercial banks have been formed, existed and developed for thousands of years associated with the development of the commodity economy. The development of the commercial banking system has had a great and important impact on the development of the commodity economy. On the contrary, when the commodity economy develops strongly to the highest stage of the market economy, commercial banks are increasingly perfected and become indispensable financial institutions. According to studies by Vu Van Hoa [24], Duong Huu Hanh [33], Hoang Xuan Que [66], Nguyen Thi Mui [48], banking activities appeared very early in developed countries, but it was not until around the 15th century that people were able to establish banks with complete operations such as in the Netherlands, Sweden, England, America, France. The banking system of Vietnam develops very slowly compared to the world. In Vietnam, in 1951, the National Bank of Vietnam was established. Previously, during the period from 1945 to 1951, the printing of money and management of national finances were carried out by the Ministry of Finance (established in 1945). There are many concepts of commercial banks, but to give an accurate concept, we must rely on the nature and purpose of their operations in the monetary market.

- According to the Law on Credit Institutions 2010 of Vietnam [50]: “A bank is a type of credit institution that can perform all banking activities according to the provisions of this Law. According to the nature and objectives of operations, types of banks include commercial banks, policy banks and cooperative banks”. “Banking activities are regular business, provision or some of the following operations: Receiving deposits; granting credit; providing payment services through accounts”.

- In the US: A commercial bank is a money-trading company that specializes in providing financial services and operates in the financial services industry (Encyclopedia) [2].

- The French Banking Act (1941) also defined: “Commercial banks are enterprises or establishments whose regular business is to receive money from the public in the form of deposits, or in other forms, and to use them as collateral.

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