Improving the efficiency of capital use of commercial banks in Hanoi in the process of international integration

THANKS

I would like to sincerely thank the teachers of the Faculty of Banking and Finance, Graduate School, National Economics University , Hanoi for enthusiastically helping me complete my thesis.

I would like to thank the relevant agencies and units for their support and coordination during the research process to help me complete my thesis.

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Hanoi, August 20, 2009

Thesis author

Dam Hong Phuong

I hereby certify that the entire content of this thesis is my own research work. The data and materials used in the thesis have clear and honest sources. Up to this point, the entire content of the thesis has not been published in any other similar research work.

Hanoi, August 20, 2009

PhD student

Dam Hong Phuong

Cover page acknowledgements pledges Table of contents

List of abbreviations List of diagrams, tables Cover page

Foreword 1

Chapter 1: Basic issues on improving the efficiency of capital use of commercial banks 11

1.1 International economic integration for commercial banks 11

1.1.1 Concept and characteristics of international financial integration 11

1.1.2 Opportunities and challenges for commercial banking operations in the international integration process 16

1.2 Overview of commercial bank operations 18

1.2.1 Concept of commercial bank 18

1.2.2 Basic operations 18

1.3 Improving the efficiency of capital use of commercial banks 29

1.3.1 Concept of capital and capital efficiency 29

1.3.2 The need to improve the efficiency of capital use of commercial banks 32

1.3.3 Criteria for reflecting and evaluating the efficiency of capital use 32

1.3.4 Factors affecting capital efficiency 45

1.4 Lessons learned from improving capital efficiency of some commercial banks in the world can be applied to

Vietnam in the integration process 53

1.4.1 Experience in improving capital efficiency of some commercial banks in the world that can be applied to Vietnam 53

1.4.2. Some experiences in banking management of commercial banks in some countries that can be applied to commercial banks in Vietnam 56

1.4.3 Lessons learned for Vietnam in international integration .. 58

Chapter 2: Current status of improving capital efficiency of joint stock commercial banks in Hanoi in the process of international integration

period 2002 - 2008 60

2.1 International integration process of Vietnam's banking system 60

2.1.1 Viewpoint of Vietnamese banking system on integration and sustainable development 60

2.1.2 Opportunities and challenges for the operations of Vietnamese commercial banks in the process of international integration 63

2.1.3 Banking activities in the context of international integration 67

2.1.4 Policy mechanism of the Government and the State Bank of Vietnam for Commercial Banks 68

2.2 The process of formation and development of commercial banks

shares 72

2.2.1 Hanoi Housing Commercial Joint Stock Bank 72

2.2.2 Vietnam Technological and Commercial Joint Stock Bank 72

2.2.3 Joint Stock Commercial Bank for Foreign Trade of Vietnam 73

2.2.4 Military Commercial Joint Stock Bank 73

2.2.5 Vietnam International Commercial Joint Stock Bank 75

2.2.6 Southeast Commercial Joint Stock Bank ¸ 75

2.2.7 Vietnam Maritime Commercial Joint Stock Bank 76

2.2.8 Global Petroleum Joint Stock Commercial Bank 77

2.2.9 Overview of the development of 08 Joint Stock Commercial Banks in Hanoi 77

2.3 Current status of capital use efficiency of 08 commercial banks

shares in area 85

2.3.1 Basic activities from 2002 - 2008 85

2.3.2 Analysis and evaluation of operational efficiency 102

Chapter 3 : Solutions to improve the efficiency of capital use of joint stock commercial banks in Hanoi in the process of international integration 137

3.1 Orientation and strategy for international economic integration of the Vietnamese banking system 137

3.1.1 International economic integration strategy of the State Bank of Vietnam 137

3.1.2 Integration strategy of Vietnamese commercial banks... 138

3.1.3 Development of Vietnam's banking industry to 2010 and orientation to 2020 138

3.1.4 Operational orientation of Vietnam's commercial banking system in the international integration process 143

3.2 Solutions to improve the efficiency of capital use of joint stock commercial banks in Hanoi in the process of international integration 146

3.2.1. Group of solutions to ensure a safe operating environment,

Effective for Joint Stock Commercial Banks in Hanoi 146

3.2.2. Internal solution group from Joint Stock Commercial Banks

in Hanoi City 148

3.2.3. Support solution group 177

3.3 Some recommendations 179

3.3.1 For the Government 179

3.3.2 For Ministries 179

3.3.3 For the State Bank of Vietnam 179

Conclusion 187

List of relevant research works published by the author

References

List of abbreviations and symbols

Executive Board

Board of Supervisors

Branch Office

Industrialisation

CSTC Financial Policy

Monetary Policy

Joint Stock Company

CBCNV Staff and employees

Enterprise

State-owned enterprises State-owned enterprises

ECB European Central Bank

FED Federal Reserve

Director

Stock Exchange Stock Trading

GDP National Income

GPBank Global Petroleum Joint Stock Commercial Bank Modernization

Board of Directors Board of Directors

HBB Hanoi Housing Commercial Joint Stock Bank Internal Control

Economic - Social Economy - Social

Internal Audit Internal Audit of State-owned Enterprises Non-State Enterprises

KTr Check

Yield Yield

Libor L+i market rate Bank of London MB Military Commercial Joint Stock Bank

MSB Vietnam Maritime Commercial Joint Stock Bank Bank for Investment and Development of Vietnam

Bank

Social Policy Bank Social Policy Bank for Industry and Trade of Vietnam State Bank of Vietnam

NHNO&PTNT Vietnam Bank for Agriculture and Rural Development NHNT Bank for Foreign Trade of Vietnam

Commercial Bank Commercial Bank Joint Stock Commercial Bank Joint Stock Commercial Bank State Commercial Bank State Commercial Bank Central Bank Central Bank

NIC Newly Industrialized Countries Asia ¸

NQH Overdue Debt

Transaction Office

Deputy Director

Deputy General Director

Decision Decision

RRHD Operational risk

SeAbank Southeast Commercial Joint Stock Bank ¸

SIBOR Singapore InterBank offer Rates-L+i interbank market rates

Singapore goods

TCB Vietnam Technological and Commercial Joint Stock Bank TCKT Economic organization

Credit institutions