Introduction to Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank)

will continue to increase in the near future. This is good information for banks to invest and develop this potential market.

2.3. CONCLUSION OF CHAPTER 2

The content of this chapter has provided theoretical bases that contribute to building the topic in a more understandable and scientific way, especially a foundation for analyzing the current status of using payment cards of Sacombank, proposing causes and recommendations. In addition to these theoretical bases cited from books, newspapers, magazines, theses, dissertations and legal regulations, students also give their own comments. In addition, the theoretical basis chapter also introduces an overview of the sources that students have consulted to help complete the topic such as books, newspapers, magazines, articles on the internet, legal regulations and graduation theses. Hopefully, providing a summary of research related to the topic will enhance the value of the theoretical basis, as well as the importance of developing payment cards in the current economic situation of Vietnam.

CHAPTER 3: INTRODUCTION TO SACOMBANK AND SACOMBANK CARD CENTER

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Each different bank with different business purposes will have its own business strategies, card products will also have their own characteristics based on the characteristics of the issuing bank. In this chapter 3, we will introduce Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) as well as Sacombank card center, the origin of payment cards - the main research object of this essay.

3.1. INTRODUCTION TO SAIGON THUONG TIN BANK (SACOMBANK)

3.1.1. Formation and development process

Saigon Thuong Tin Commercial Joint Stock Bank – Sacombank was officially established and put into operation on December 21, 1991 when merging 3 Credit Cooperatives: Tan Binh – Thanh Cong – Lu Gia and Go Vap Economic Development Bank. Sacombank started out as a small bank, established during the country’s difficult period with an initial charter capital of 3 billion VND, 100 employees and operating mainly in the suburbs of Ho Chi Minh City.

On July 12, 2006, Sacombank became the first bank to officially list its shares on the Vietnamese stock market. This was an important and meaningful event for the development of the Vietnamese capital market.

On May 16, 2008, Sacombank created a new turning point in the history of the Bank's formation and development with the establishment of Sacombank Group - the first joint stock commercial bank to officially announce the establishment of a group. The formation of the Group model is a condition for developing comprehensive financial solutions and reasonable costs, in order to create added value for customers and at the same time enhance the strength in the integration process of Sacombank and its member companies operating in the financial and non-financial fields.

After more than 22 years of operation, Sacombank has become the leading commercial joint stock bank in Vietnam with:

12,425 billion VND charter capital; considered the joint stock commercial bank with the largest charter capital and branch system in Vietnam.

424 transaction points in the country and Indochina region; is the Joint Stock Commercial Bank with the widest network of operations in Vietnam; is the first Bank to establish a Representative Office abroad (Note: on January 8, 2008, the Representative Office was established in Nanning - China and has now ceased operations); is the first Bank to open a branch abroad: Sacombank Laos Branch; Sacombank - Phnom Penh;

10,407 agents of 305 banks in 81 countries and territories;

More than 10,000 young, dynamic, enthusiastic and creative staff.

Sacombank is also honored to receive many prestigious domestic and international awards and certificates, which will be specifically stated in section “3.1.2. Sacombank's position” in this report.

3.1.2. Sacombank's position

According to the joint assessment of Moody's and Standard & Poor's (S&P's) announced on February 10, 2012, Sacombank has stable business performance and growth rate in the face of challenges of the Vietnamese and world economies. Accordingly, Sacombank is the sixth largest bank in Vietnam in terms of assets, branch network and ATMs. At the same time, it has a stronger Tier 1 capital ratio than many other banks. Also according to this assessment result, Moody's assigned a B2 rating to Sacombank's long-term and short-term foreign currency deposit credit, and at the same time stated that Sacombank's strengths are a lower bad debt ratio than the general ratio of the whole industry and a higher than average credit risk provision ratio. Sacombank has a short-term "Assets" portfolio that accounts for a large proportion of total assets, helping to improve liquidity - an important factor in a market like Vietnam.

At the end of March 2012, Sacombank received the award "Best Retail Bank in Vietnam 2012" voted by The Asian Banker. At the same time, Sacombank is the only bank in Vietnam to be evaluated and voted by The Asian Banker's Judging Council based on criteria of brand value, financial efficiency, revenue sustainability, feasibility of retail strategy, sales capacity, risk management capacity, operational processes and information technology, diversity of products and services, ability to penetrate the retail market, human resources and future development potential. Previously, Sacombank was also honored to receive the award "Bank with the best foreign exchange services in Vietnam 2012" voted by Global Finance (USA).

3.1.3. Organizational structure and personnel

Currently, Sacombank is operating with an organizational structure throughout its system according to the diagram from top to bottom as shown in Figure 3.1 below:

Figure 3.1: ORGANIZATIONAL STRUCTURE OF SACOMBANK'S MANAGEMENT APPARATUS

General meeting of shareholders

Board of Directors

Board of Control

Financial Investment Council

Management and control apparatus

control

Credit Council

General Director

The functions of each department and division are summarized as follows:

- General Meeting of Shareholders: is the highest authority of Sacombank, deciding on issues within the duties and powers prescribed by the Law and Sacombank Charter.

- Board of Directors: is the governing body of Sacombank, has full authority on behalf of Sacombank to decide on issues related to the purposes and interests of Sacombank, except for issues under the authority of the General Meeting of Shareholders.

- Board of Control : inspects financial activities; supervises compliance with accounting regimes, operations of internal inspection and audit systems.

- Financial Investment Council: reviews and decides on the Bank's financial investments;

- Credit Council: considers and decides on granting credit for large loans according to regulations.

- General Director: responsible for managing and operating all activities of Sacombank and is also an advisor to the Board of Directors in terms of planning goals and policies.

Under the General Director are the executive apparatus including the Headquarters' functional departments: based on the functions and tasks stipulated in the Executive Organization Regulations, the Headquarters' functional departments can be authorized by the General Director to handle some daily tasks and authorize the implementation of some specific tasks, which can be summarized in the form:

3.2 below:

Image

3.2: MECHANICS

DEPARTMENT ORGANIZATIONAL STRUCTURE

OPERATING MACHINE OF

SACOMBANK

CEO

Human Resources & Training

Personal

business

Money

Card Center

Credit

Information technology

Finance

Operate

risk management

Area

Support

Affiliates

Each department in the operating apparatus has its own function and will coordinate closely for common goals to perfect the organizational structure, meeting the development needs of Sacombank according to international standards.

3.1.4. Fields of operation

Sacombank is a retail bank, very successful in financing small and medium enterprises. Sacombank is also focusing on developing services for individual customers.

Before 1996, due to both objective and subjective conditions, Sacombank's activities were simply capital mobilization and lending. However, since 1996, the bank has made adjustments to expand its field of operation and diversify its service types. In addition to its traditional business of capital mobilization and lending, the bank has also developed new services such as: international payment, cards, money transfer services, guarantee services, consulting, safe deposit box rental and many other services suitable for the functions of a commercial bank.

To support its operations, Sacombank has actively learned from foreign experiences: In 1999, Sacombank became a member of the Society for Worldwide Interbank Telecommunication (SWIFT), then joined the international card association Visa, Master and received credit and sponsorship from many foreign financial and economic organizations. In June 2004, Sacombank signed a contract to deploy the T-24 Corebanking system with Temenos (Switzerland), starting the process of modernizing Sacombank's banking technology in the process of development and integration.

3.1.5. Business performance results 2010-2012

The Bank has set a strategic goal of becoming the leading modern, multi-functional retail bank in Vietnam and Indochina by 2015. According to Table 3.1 below, the consolidated business results from the most recent financial reports as of December 31, 2012 show very positive signs.

Table 3.1: SUMMARY OF SOME PERFORMANCE INDICATORS OF SACOMBANK

Unit: Million VND

Target

Year 2010	2011	2012	% increase/decrease
Total assets	141,789,738	140,136,974	151,281,538	7.95%
Charter capital	9,179,230	10,739,677	10,739,677	0.00%
Total capital mobilized	126,203,455	111,513,453	123,752,773	10.98%
Total outstanding loans	77,486,218	79,429,470	98,728,188	24.30%
Total income from business activities	4,613,073	6,511,022	6,740,585	3.53%
Profit before tax	2,425,859	2,740,230	1,314,557	-52.03%
Current corporate income tax	627,299	707.045	636,068	-10.04%
Deferred income tax	-	-	308,915	100%
Profit after tax	1,785,560	2,033,185	987,404	-51.44%

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Source: Sacombank Prospectus 2012

Explanation of the above summary results: In 2011, in the difficult context of the economy in general and the risky business environment of the banking industry in particular, Sacombank proactively implemented the policy of not focusing on growth indicators but focusing on safe and effective development. Therefore, the total asset index did not fluctuate compared to 2010. In addition, due to the implementation of a safe credit control policy to suit market developments, Sacombank's loan growth rate in 2011 was also not too high. As of December 31, 2011, total outstanding loans reached VND 79,429 billion, an increase of VND 1,943 billion, equivalent to an increase of 2.51% compared to the beginning of the year, accounting for 56.68% of total assets. In 2012, although the market situation was still difficult due to strong fluctuations in interest rates during the year, Sacombank's business activities continued to achieve quite positive results.

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