This capital is only mobilized for a certain period of time. When the expected capital volume is sufficient, banks will stop mobilizing (selling) promissory notes and bonds.
4.2. Mobilizing capital through borrowing from Commercial Banks, credit institutions and central banks (mobilizing through other forms of borrowing in the market)
When Commercial Banks appear on the market to borrow capital, it is often due to some urgent reasons such as shortage of reserves at the central bank, lack of cash... so in addition to issuing debt notes, Commercial Banks can borrow from each other at reserves at the central bank or issue RPs with repurchase agreements. These are securities purchases that Commercial Banks are trading on the assets side with other financial intermediaries. The borrowing term between Commercial Banks is very flexible, it can be a few days or a long term, suitable for the capital needs of Commercial Banks in each specific period.
In case the above loan capital continues to not meet the needs of the Commercial Bank, the Commercial Bank will borrow from the central bank. In the relationship with the central bank, the Commercial Bank plays the role of a regular customer and the central bank acts as the bank of the banks and at the same time is the "last resort" for the Commercial Bank.
Appendix B-1. ORGANIZATIONAL STRUCTURE OF VIETINBANK HCM
Customer Room No. 1
Private Customer Room
General Planning Department
Organization Department
Organizational chart of Vietinbank – HCM
Vice president
Customer Room No. 2
Le Thanh Ton Transaction Office
Truong Son Transaction Office
Tan Son Nhat Transaction Office
Manager
Vice president
Risk Management and Problem Debt Department
Treasury Currency Department
Administration Department
Tan Thuan Tay Transaction Office
Nguyen Hue Transaction Office
Thanh Thai Transaction Office
Nguyen Trong Tuyen Transaction Office
Vice president
Transaction Accounting Department
Financial Accounting Department
Card Service Department
Ben Thanh Transaction Office
An Dong Transaction Office
Bui Vien Transaction Office
Vice president
Trade Finance Department
Customer Relations Department
Information Technology Department
Dien Bien Phu Transaction Office
Dinh Tien Hoang Transaction Office
Hiep Binh Phuoc Transaction Office
Ly Chinh Thang Transaction Office
Compared to many other branches in the system, Vietinbank – HCM has a more complex organizational structure; this is due to the large scale of operations. However, the departments have close relationships with each other, helping the branch operate effectively and smoothly.
Board of Directors: includes Director and four Deputy Directors
The branch is headed by the Director, who is primarily responsible for all branch activities; planning, organizing and controlling all branch activities, the focal point for managing organizational and personnel work, administrative and operational work, political and ideological work, anti-corruption work, internal inspection, settlement, income fund allocation, emulation and rewards, discipline, purchasing high-value fixed assets, business policies, etc. Every day, the Director directly directs and handles the work of the Organization Department, General Planning, Customer No. 1 and Individual Customers. In addition to the above directly handled tasks, the Branch Director authorizes four Deputy Directors to directly take charge of other areas of operation.
Organization Department : organizes staff and trains at branches in accordance with the policies of the State and Vietinbank.
Risk Management and Problem Debt Handling Department : advises the Board of Directors on general and specific credit orientations for each branch, creating conditions for branches to grasp favorable developments and warn of risks that may lead to credit risks; ensuring that branch operations develop in accordance with the set orientation; handling problem debts...
Administration Department : advises the Board of Directors, performs administrative work, manages, protects property safety, and security and order at the branch.
Customer Relations Department : manage and take care of VIP customers with deposits of 10 billion VND or more; advise the Board of Directors in building marketing strategies, customer care, customer policies and product development.
New products in accordance with Vietinbank regulations and in line with the branch's development requirements.
Personal Customer Department : directly deals with individual customers to mobilize capital in VND and foreign currencies, handles lending-related operations and manages loan products in accordance with current regulations and guidelines of Vietinbank.
Customer Service Department No. 1 : directly deals with large corporate customers to exploit capital sources in VND and foreign currencies; handles lending-related operations, manages corporate loan products in accordance with current regulations and guidelines of Vietinbank.
Customer Service Department No. 2 : directly deals with customers who are small and medium enterprises to exploit capital sources in VND and foreign currencies; handles operations related to lending, manages business loan products in accordance with current regulations and guidelines of Vietinbank.
Trade Finance Department : performs trade finance and foreign exchange business operations at the branch according to regulations.
Card Service Department : advises the Board of Directors on research and development of payment services through cards issued by Vietinbank, directly organizes and implements card issuance and payment operations in accordance with regulations.
Treasury Currency Department : manage treasury safety, manage cash according to regulations of Vietinbank and the State Bank; advance and collect money for savings funds, transaction offices...; collect and pay cash for businesses with large cash collection and payment needs...
Financial Accounting Department : assists the Board of Directors in financial management and internal branch spending according to regulations.
Transaction Accounting Department : conducts direct transactions with customers, provides payment services, and processes transaction accounting according to regulations.
Information Technology Department : performs technical operations in accordance with the unified direction of Vietinbank's Information Technology Center; supports the resolution of information technology technical issues for the bank; periodically inspects and maintains machinery and computing equipment, and guides staff in implementing technical safety procedures.
General Planning Department : develop capital mobilization plan, balance business capital; balance capital sources and daily capital use; develop cash plan, cash balance level, payment checks; develop monthly and quarterly clearing payment plan capital with the State Bank as prescribed. Prepare statistical reports, analyze business results according to Vietinbank's regulations to ensure business capital safety.
14 transaction offices : act as a miniature bank, located in many different areas to facilitate customers when transacting with the bank.
Appendix B-2. BUSINESS RESULTS OF VIETINBANK HCM
As of September 2012, Vietinbank HCM's profit after deducting risk provisions was VND476 billion. Of which, the revenue with the highest proportion (62.41%) was from loan interest, followed by revenue from deposit interest (31.57%). Service revenue still accounts for a modest proportion of total revenue (about 1.61%), this source of revenue decreased in scale compared to 2011, which is an unfavorable sign for Vietinbank HCM, not in line with the trend of modern banks which is to increasingly increase the proportion of service revenue.
STT
Target | Year 2010 | 2011 | September 2012 | ||||
Value (billion VND) | Proportion | Value (billion VND) | Proportion | Value (billion VND) | Proportion | ||
1 | Total revenue | 2,049 | 100.00% | 4,535 | 100.00% | 3,355 | 100.00% |
1.1 | Loan interest income | 1,057 | 51.59% | 2,898 | 63.91% | 2,094 | 62.41% |
1.2 | Interest income | 512 | 25.00% | 1,382 | 30.48% | 1,059 | 31.57% |
1.3 | Service Charges | 76 | 3.71% | 84 | 1.85% | 54 | 1.61% |
1.4 | Other income | 404 | 19.70% | 171 | 3.76% | 148 | 4.41% |
2 | Total cost | 1,083 | 100.00% | 3,386 | 100.00% | 2,878 | 100.00% |
2.1 | Interest on deposits | 532 | 49.09% | 1,876 | 55.39% | 1,189 | 41.31% |
2.2 | Interest expense | 161 | 14.89% | 604 | 17.85% | 1,221 | 42.42% |
2.3 | Service charges | 21 | 1.97% | 44 | 1.29% | 54 | 1.86% |
2.4 | Management costs | 185 | 17.10% | 818 | 24.15% | 261 | 9.06% |
2.5 | Extract from Risk Reserve | 107 | 9.86% | 644 | 19.03% | 154 | 5.34% |
2.6 | Other expenses | 15 | 1.41% | 45 | 1.34% | 0 | 0.00% |
3 | Profit before tax | 966 | 1,149 | 476 | |||
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The activities of Vietinbank HCM and many other commercial banks are mainly capital mobilization and lending. Therefore, in the operating costs of commercial banks, the interest payment on deposits often accounts for the highest proportion of total expenses. Vietinbank HCM is no exception to that trend - interest payment on deposits accounts for 49.09% in 2010, 55.39% in 2011 and 41.31% in 2012. Regarding interest payment on loans, the proportion in 2012 increased compared to 2011. Management costs increased
significantly in 2011, but decreased sharply in 2012, because in 2011 Vietinbank HCM had set aside almost enough risk provisions, so in 2012 the amount of risk provisions was less than in previous years.
In the first 9 months of 2012, Vietinbank HCM's pre-tax and pre-risk provision profits decreased sharply compared to 2011 - from 1,149 billion VND to 476 billion VND - a decrease of 58.53%.
Appendix B-3. LABOR USE SITUATION OF VIETINBANK HCM
Human resources are the decisive factor for the success of any organization, especially for commercial banks, because products and services are intangible, the quality of service of bank employees creates the quality of banking products and services. Understanding this importance, Vietinbank HCM constantly promotes the role of human resources and always encourages all officers and employees to constantly improve their professional qualifications and improve their service style to always satisfy customers. However, along with the changes and development of the Vietnamese financial system, the establishment and expansion of the network of Vietnamese commercial banks and the increasing appearance of financial institutions such as securities companies, investment funds, foreign bank branches... have affected the human resources of Vietinbank HCM. These organizations, with attractive salary policies and other benefits, have partly affected the commitment of employees to Vietinbank HCM. The brain drain causes losses to Vietinbank HCM in terms of human resources and significantly affects business operations.
Through the data in the Table below, we see that the total number of employees of Vietinbank HCM is relatively stable over the three years 2010, 2011 and 2012, there are increases and decreases but not much. In which:
Regarding the labor structure by gender: female workers account for the majority with a proportion of 62-64%. Male workers account for about 36-38%, the number of male workers is only nearly half of the number of female workers.
Regarding the labor structure by training level: in the total number of employees of Vietinbank HCM, the labor force with university degrees accounts for the highest proportion and has gradually decreased over time (from 73.37% in 2010, down to 70.97% in 2012). The reason for this decrease is due to the change in labor and the rapid increase in the number of employees with post-graduate degrees (in 2010, there were 28 employees with university degrees, by 2012, this number was 45 employees), and in terms of the current proportion, it accounts for