2.3.3. Indicators for assessing the quality of short-term credit activities of banks
Short-term credit quality is of great significance to the existence and development of commercial banks. To have the most accurate view of bank credit quality, we use some indicators to reflect it as follows:
2.3.3.1. Short-term debt on short-term mobilized capital
This indicator shows how much of the short-term mobilized capital that the bank invests is short-term debt. This indicator determines the investment efficiency of a short-term mobilized capital. And short-term debt on short-term mobilized capital is determined by the following formula:
Short-term debt/Short-term mobilized capital (%) = Short-term mobilized capital x 100
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short term debt
2.3.3.2. Short-term debt collection ratio
This indicator reflects the efficiency of the bank's debt collection or the ability of customers to repay loans, indicating the amount of money the bank collects in a certain business period from a short-term loan turnover. The larger the debt collection ratio, the better it is evaluated, showing that the bank's capital recovery work is more effective and vice versa. The short-term debt collection ratio is determined by the following formula:
Short-term debt collection ratio (%) = short-term loan sales x100
short term debt collection
2.3.3.3. Short-term credit turnover
This indicator measures the speed of short-term credit capital turnover of the bank, reflecting how fast or slow the investment capital is rotated. The higher the credit capital turnover, the faster the bank's capital rotates, continuously circulating with high efficiency. Short-term credit capital turnover is determined by the following formula:
Short-term credit turnover (turns) = average short-term debt x100
short term debt collection
In which, average short-term debt is calculated according to the following formula:
short-term debt at the beginning of the period + short-term debt at the end of the period
Average short-term debt =2
deadline)
2.3.3.4. Short-term bad debt on short-term debt balance (Short-term credit risk ratio)
This index measures the quality of short-term credit operations of banks.
The lower this ratio is, the higher the quality of short-term credit of this bank. According to international practice, commercial banks need to control the bad debt ratio to no more than 3%. Short-term bad debt on short-term outstanding debt is determined by the formula:
Bad debt/short-term debt (%) = total short-term debt x100
Short-term bad debt
2.4. LITERATURE REVIEW
* Graduation thesis : "Analysis of credit activities at the Investment and Development Bank, Hau Giang branch" by student Nguyen Thi Kim Cuong in 2007.
In the topic, the author analyzes the credit activities of the Investment and Development Bank, Hau Giang branch by analyzing: Loan turnover, debt collection turnover, outstanding debt, credit risk and analyzing lending business indicators. The article mentions the ratio of bad debt to total outstanding debt. The author finds out the limitations in the bank's credit activities and proposes some solutions such as proposing solutions to help increase loan turnover, solutions to improve credit quality, solutions to increase outstanding debt, reduce overdue debt and reduce credit risk,...
* Graduation thesis : "Analysis of medium and long-term credit performance at the Can Tho City Investment and Development Bank Branch" by student Nguyen Van Quan, class K28 credit finance. This topic studies the medium and long-term credit situation at the Can Tho Investment and Development Bank, analyzed by dividing by economic sectors. As for my topic, I expanded the scope of research in two directions: by economic sector and by economic sector, delving into the analysis of the short-term credit situation. This is a very detailed and coherent article because it accurately reflects the medium and long-term credit performance of BIDV in the three years of 2003.
– 2005, has helped readers see the fluctuations in the medium and long-term credit situation at BIDV Can Tho Bank in the three years 2003-2005. Through this topic, we can see that the business performance of Can Tho Investment and Development Bank in this period was quite effective through the indicators of costs and income. However, up to the present period (2004-2006), the Bank has achieved more positive results, specifically through the indicators of income and expenses, the difference between income and expenses is increasing, proving that the Bank is operating more and more effectively. However, the article only focuses on analyzing medium and long-term credit activities, not mentioning much about credit risks as well as solutions to limit credit risks, the topic has not been given.
The conclusions show the importance and impact of credit activities on the overall performance of the Bank.
* Thesis : "Analysis of short-term credit activities and measures to improve the efficiency of short-term credit activities at the Binh Minh branch of the Bank for Agriculture and Rural Development" by student Nguyen Thi Ngoc Thuy, Accounting class 02, course 27.
The content of the topic is to analyze the situation of lending, debt collection, outstanding debt, short-term overdue debt at the Binh Minh branch of NHNo & PTNT in the three years 2002-2004. From there, the strengths and weaknesses of the Bank can be seen. Based on the analysis, the author proposes measures in mobilizing and lending short-term to improve the efficiency of short-term credit activities at the Bank and serve customers better and better.
*Thesis : "Improving short-term credit activities at Vietnam Bank for Agriculture and Rural Development, Thoai Son District Branch, An Giang Province" by student Luong Thi Thanh Tuyen, the thesis continues to analyze in depth the short-term credit activities at the bank, analyze the business performance and capital situation at the bank and propose some criteria to evaluate short-term credit activities. In addition, the thesis also uses primary and secondary data, runs SPSS and Stata models to analyze the bank's credit loan term, proposes some solutions and recommendations to improve short-term credit activities at the bank.
* Thesis: " Analysis of credit activities for production and business households at the Bank for Agriculture and Rural Development of Phu Tan district, An Giang province" by Dang Minh Chau. In addition to giving general comments and assessments on credit activities at the bank such as business performance reports, capital situation, outstanding debt, debt collection, loan turnover, etc. by year of the bank. The author also combines qualitative and quantitative analysis methods in the Probit model to estimate, delve into local reality, get opinions from each household about credit activities for production and business at the bank, to see the shortcomings that still exist, the positive aspects that need to continue to be promoted and from the model results, it can be seen which households are able to borrow capital, which households are not able to borrow capital, which factors affect customers' borrowing. From there, measures are proposed to improve the efficiency of credit for production and business households at the bank.
In addition, I also referred to the article "Credit solutions of commercial banks in the coming time" published in Banking Magazine No. 2, February 2007; the article "Solutions to expand credit for small and medium enterprises in Ho Chi Minh City" published in Banking Magazine No. 6, March 2007.
CHAPTER 3
OVERVIEW OF HDBANK CAN THO BRANCH, ANALYSIS OF CREDIT SITUATION
SHORT TERM AT BRANCH IN 3 YEARS 2014 - 2016
AND EXPLAIN THE RESEARCH MODEL OF FACTORS AFFECTING SHORT-TERM CREDIT AT BANKS
3.1. OVERVIEW OF HO CHI MINH CITY DEVELOPMENT JOINT STOCK COMMERCIAL BANK (HDBANK) SYSTEM
3.1.1. History of formation and development
HDBank was established on January 4, 1990 with the full name of Ho Chi Minh City Housing Development Commercial Joint Stock Bank, one of the first joint stock commercial banks in the country with an initial charter capital of 3 billion VND with the mission of "developing housing and urban beautification, contributing to building a civilized and modern Ho Chi Minh City". And based on Decision No. 2096/QD - NHNN of the Governor of the State Bank of Vietnam, from March 16, 2012, HDBank will officially change its name and introduce a new brand logo with the full name of Ho Chi Minh City Development Joint Stock Commercial Bank, abbreviated as HDBank.
In the integration trend of the Vietnamese banking and finance industry to develop and integrate into the global economy, HDBank has successfully implemented phase 1 (2009 - 2010) of the Restructuring project (2009 - 2012) and along with the renaming and changing the brand identity system, HDBank continues to comprehensively restructure the bank towards sustainable, synchronous and comprehensive development, taking advantage of opportunities to make a breakthrough in phase 2 (2013).
– 2016). The bank restructuring continues to be implemented comprehensively and synchronously. Focusing on 3 main areas: business, administration and risk management, aiming to successfully build the slogan " Commitment to the highest benefits " for all customers. HDBank also focuses on implementing the 5-year banking technology development strategy and plan, ensuring the most competitive technology products on the market but with reasonable and optimal investment costs. Regarding risk management, we will improve operational efficiency, ensuring the role of preventing and limiting risks in business and operations. HDBank also builds a dynamic, clean, humane and professional corporate culture with the goal of building HDBank into a multi-functional retail bank, approaching international standards in management; Strengthening financial capacity; Developing modern industry; Building and developing strong, professional human resources; Providing diverse, comprehensive products with high quality to satisfy
requirements of all customer segments. In parallel with the development of a retail bank, HDBank has initially built an investment banking model to maximize capital business efficiency.
By July 2015, HDBank had more than 220 transaction points nationwide, present in most of the country's major economic centers such as Ho Chi Minh City, Hanoi, Dong Nai, Binh Duong, Ba Ria - Vung Tau, Binh Phuoc, Tay Ninh, Dak Lak, Gia Lai, Kon Tum, Lam Dong, Binh Thuan, Khanh Hoa, Binh Dinh, Quang Ngai, Da Nang, Thua Thien - Hue, Ha Tinh, Nghe An, Thanh Hoa, Quang Ninh, Hai Phong, Lang Son, Bac Ninh, Hai Duong, Lao Cai, Long An, Vinh Long, Can Tho, Soc Trang, Ca Mau, Dong Thap, An Giang, Kien Giang,... In 2013, with the integration strength from DaiABank and HDFinance, HDBank became one of the largest banks in Vietnam, with total assets of nearly 100,000 billion VND, charter capital of 8,100 billion VND, and a staff of more than 6,000 people; network with more than 220 banking transaction points, over 3,000 financial transaction points nationwide and is promoting the opening of branches abroad. In the international market, HDBank has established relationships with more than 300 banks and branches in more than 150 different countries and territories. On March 22, 2012, after officially announcing the name change and launching the new brand identity system, HDBank had an important event of signing a strategic cooperation agreement with Microsoft with the content of business cooperation. With this agreement, HDBank will deploy Microsoft's comprehensive technology products and solutions to improve efficiency, save costs and bring customers the most modern banking products and services.
All activities of HDBank are carried out in accordance with HDBank's Procedures and Regulations, strictly complying with the provisions of law. HDBank fully meets the criteria for rapid, healthy and sustainable development of a joint stock commercial bank that is constantly striving to become "The leading effective financial group in Vietnam, with an international network and a brand that Vietnamese customers are proud to trust with the slogan " HDBank commits to the highest benefits " .
(Excerpt from "Vision, mission, core values" of HDBank)