Chapter 7. 6 CONCLUSIONS AND RECOMMENDATIONS
From the above analysis, we can see that the project is completely feasible in terms of finance and economy, in line with the policy and is encouraged by the city to implement. Compared to land leasing, if VBH changes the land use purpose, it will increase the budget by 817.04 billion VND, create jobs for more than 300 workers during the implementation period (construction period) and nearly 100 long-term workers (Management Board), at the same time, the project also contributes to beautifying the landscape and improving the quality of life for the city's residents.
Since the project is financially and economically feasible, the government does not need to provide any additional support. Interest rate subsidies for the city's housing construction program are not affected by the project. The project does not require compensation for site clearance, so there is no negative externality on displaced and cleared residents. In the long term, people living around the project area will benefit from the positive impact of commercial leasing activities, job creation, and increased land and business premises prices.
The analysis also shows that both enterprises and the state benefit when enterprises change land use purposes. When implementing the project, it will bring the investor 1,110.6 billion VND, bringing revenue to the budget of more than 800 billion VND, many times larger than the revenue from long-term land lease.
The State should agree to change the purpose of land use because of the benefits from budget revenue, in accordance with planning policies, to enhance urban aesthetics and increase land use coefficient, take advantage of vertical urban development, and at the same time create jobs for workers.
If the state agrees to allow enterprises to convert land use purposes by buying back land at state prices (Steering Committee 09), the state will lose 716.8 billion VND in budget revenue.
If the state agrees to allow enterprises to convert land use purposes by buying back land at market prices, the state and enterprises will still benefit, so enterprises will still be willing to invest in the above project and the state will not have to provide any additional subsidies.
The thesis recommends that the state should organize a public bidding for projects to convert land use purposes from long-term lease land to the field of apartment and office construction for rent. Because these lands are often large in area and located in the center, they have great value. Any enterprise that wins the bid will have to pay back the cost to the investment project establishment unit because that will encourage enterprises to establish investment projects to convert land use purposes. The cost of preparing project investment documents is not large compared to the revenue that the state receives, which is hundreds of times higher.
The project does not take into account negative environmental externalities during construction because it is believed that these externalities will be eliminated because after the project is implemented, the environment will be improved compared to before because the land for the project is an industrial production facility. Although during construction, the project investor will have to comply with environmental regulations, the state needs to monitor the environmental impacts during the construction process to limit negative externalities.
Summary conclusion, answers to research questions:
- Binh Hoa Joint Stock Company (VBH) should change the land use purpose to invest in Binh Hoa project, build apartment complex and office for rent.
- The HCM City People's Committee has a positive incentive to allow VBH to change land use purposes.
REFERENCES
[1] Resolution No. 22/2002/NQ-HD dated June 29, 2002 of the People's Council of Ho Chi Minh City.
[2] Decision No. 80/2002/QD-UB dated July 8, 2002 of the People's Committee of Ho Chi Minh City
[3] http://www.thesaigontimes.vn/Home/thoisu/doisong/11839/
[4] Decision 4159/QD-UBND dated September 14, 2006 of the People's Committee of Ho Chi Minh City on continuing to allow VBH to use land.
[5] Land lease contract No. 9871/HD-TNMT-DKKTD dated October 16, 2006 of the Department of Natural Resources and Environment.
[6] Land Law, Socialist Republic of Vietnam 2003, Article 38.
[7] Decree 198/2004/ND-CP dated December 3, 2004 of the Government on land use fee collection.
[8] Map of the architectural and landscape space organization of the Binh Hoa Apartment, Office and Commercial Service Complex of Urban Construction Design Consulting Joint Stock Company, 2009.
[9] http://www.forecast-chart.com/forecast-inflation-rate.html
[10] Nguyen Tan Binh, Business performance analysis, HCM City National University Publishing House, 2003, page 299.
[11] Fulbright Economics Teaching Program - Lecture notes for Financial Analysis, 2009.
[12] Glenn P.Jenkins, Arnold C.Harberger, (1995), Cost and benefit analysis for investment decisions, Harvard university, pp. 9 to 13.
[13] Decision No. 2554/QD-TCCB dated August 8, 2005 of the Minister of Industry (now the Ministry of Industry and Trade) on converting Binh Hoa Electronics One Member Co., Ltd. into Binh Hoa Electronics Joint Stock Company.
[14] Document No. 49/UBND-QLDT of Binh Thanh District People's Committee dated January 13, 2009 on ensuring educational land in the district's planning.
[15] http://vietbao.vn/The-gioi-giai-tri/Thieu-can-ho-dien-tich-nho/50789802/411
[16] Construction investment capital rate 2009, issued by the Ministry of Construction according to decision
Decree 411/QD-BXD dated March 31, 2010.
[17] Decision 410/QD-BXD dated March 31, 2010 of the Ministry of Construction on the announcement of the 2009 construction price index.
[18] http://vneconomy.vn/2010012111041111P0C19/chi-so-gia-tieu-dung-thang- 12010-tang-136.htm
[19] http://203.162.71.77:808/vn/thongtinnganh/48620/index.aspx
[20] http://vneconomy.vn/20100324012725770P0C19/cpi-thang-3-tang-075-bao-hieu- rui-ro-lam-phat.htm
[21] VBH's application for providing architectural planning agreement sent to the Department of Planning and Architecture on August 22, 2008.
[22] Certificate of land use rights in Decision 4159/QD-UBND dated September 14, 2006 of Ho Chi Minh City People's Committee.
[23] CBRE report Q3/2009, Q4/2009 and Q1/2010.
[25] Total demand for apartments in Ho Chi Minh City in the period 2010 - 2011, see at http://www.vietrees.com/index.php?navi=home
[26] Investment reports on projects: District 2, District 12, Linh Dong (HCM); C1 Quang Trung, Vinh Tan (Nghe An) invested and constructed by Tecco.
[27] http://vietnamnet.vn/lanhte/200912/Mong-chua-xong-nha-da-ban-885579
[28] Circular 01/2009/TT-BXD of the Ministry of Construction stipulates a number of contents on granting certificates of house ownership and guiding the sample contract for buying and selling apartments in construction investment projects of housing business organizations.
[29] http://diaoc.tuoitre.vn/Index.aspx?ArticleID=355810&ChannelID=204
[30] http://www.vtc.vn/bvntd/156-246887/the-gioi-tieu-dung/lai-suat-huy-dong-tien- gui-tai-ngan-hang-vuot-115nam.htm
[31] http://www.dothi.net/news/tin-tuc/thi-truong/2010/03/3b9aee56/ (data collection from CBRE)
[32] Vietnam inflation forecast data by Economist Intelligence Unit (EIU), 2009.
[33] Selling price of Linh Dong apartment - Thu Duc, provided by TECCO
[34] ADB (Asian Developing Bank), (1997), Guidelines for economic analysis of projects, pp. 22 – 24.
APPENDIX
Appendix 1. Project input information
Appendix 2. Land lease contract
Appendix 3. Design and detailed planning of Binh Hoa project
Appendix 4. Construction progress of apartment complex
Appendix 5. Operation, management and maintenance costs (billion VND)
Appendix 6. Debt repayment schedule (billion VND)
Appendix 7. Depreciation schedule (billion VND)
Appendix 8. Financial income statement (billion VND) Appendix 9. Project financial revenue (billion VND) Appendix 10. Financial cashflow (billion VND)
Appendix 11. Crystal Ball results for apartment and land prices calculated according to state prices Appendix 12. Crystal Ball results for apartment and land prices calculated according to market prices Appendix 13. Project economic cash flow (billion VND)
Appendix 1. Project input information
Year | 2010 | |
Unit | 0 | |
Domestic inflation | proportion | 8% |
Foreign inflation | proportion | 2.54% |
Domestic price index | 1.00 | |
Foreign price index | 1.00 | |
Exchange rate VND/USD 1/10/2010 | proportion | 18544 |
Land value | ||
Land area | m 2 | 24,418.5 |
Land rental price | VND/m2 / year | 47,625 |
Land rent | billion VND/m2 / year | 1.16 |
Land price on the market, No Trang Long | million VND/m 2 | 37,777 |
Land area along No Trang Long alley | m 2 | 24,418,500 |
Land purchase coefficient on No Trang Long street | 1.0 | |
Land use rights transfer tax/land value | proportion | 4% |
Land use transfer tax, agricultural prices | billion VND | 9.33 |
Total land value, according to state decision, before conversion | billion VND | 233.20 |
Total land value, according to state decision, after conversion | billion VND | 242.52 |
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![Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015
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zt2a3gsnon-credit services, joint stock commercial bank
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At that time, the Branch had to set aside a provision for credit risks, which reduced the Branchs income.
Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015
Unit: Billion VND
140
120
100
80
60
40
20
0
63.3
80.34
89.29
110.08
131.99
2011 2012 2013 2014 2015
Profit before tax
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, through chart 2.2, it can be seen that BIDV Tien Giangs profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project Restructuring the system of credit institutions in the period 2011-2015 approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services.
2.2. Current status of non-credit service development at BIDV Tien Giang.
2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times.
Along with the development of the Head Office, BIDV Tien Giangs products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,...
2.2.1.1. Payment services:
In accordance with the Prime Ministers Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc.
Chart 2.3. Net income from payment services in the period 2011-2015
Unit: Million VND
6000
5000
4000
3000
2000
1000
0
3922 4065
4720 5084 5324
2011 2012 2013 2014 2015
Net income from payment services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment.
2.2.1.2. Treasury services:
BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giangs treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17].
Chart 2.4. Net income from treasury services in the period 2011-2015
Unit: Million VND
350
300
250
200
150
100
50
0
105 122
309 289 279
2011 2012 2013 2014 2015
Net income from treasury services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services.
2.2.1.3. Guarantee and trade finance services:
BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance.
Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015
Unit: Million VND
14000
12000
10000
8000
6000
4000
2000
0
5193 5695
2742 3420
8889
3992
11604 12206
5143 5312
2011 2012 2013 2014 2015
Net income from guarantee services Net income from Trade Finance
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.5, we can see that BIDV Tien Giangs income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giangs corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area.
are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future.
2.2.1.4. Card and POS services:
As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services.
In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system.
Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments.
Chart 2.6. Net income from card services in the period 2011-2015
Unit: Million VND
3500
3000
2500
2000
1500
1000
500
0
687
1023
1547
2267
3104
2011 2012 2013 2014 2015
Net income from card services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.6, it can be seen that BIDV Tien Giangs card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25].
Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area.
Unit: Machine
STT
Bank name
Number of ATMs
Cumulative number of ATM cards
POS machine
1
BIDV Tien Giang
23
97,095
22
2
BIDV My Tho
7
21,325
0
3
Agribank Tien Giang
29
115,743
77
4
Vietinbank Tien Giang
16
100,052
54
5
Dong A Tien Giang
26
97,536
11
6
Sacombank Tien Giang
24
88,513
27
7
Vietcombank Tien Giang
15
61,607
96
8
Vietinbank - Tay Tien Giang Branch
6
46,042
38
(Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21])
Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6).
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![Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015
zt2i3t4l5ee
zt2a3gsnon-credit services, joint stock commercial bank
zt2a3ge
zc2o3n4t5e6n7ts
At that time, the Branch had to set aside a provision for credit risks, which reduced the Branchs income.
Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015
Unit: Billion VND
140
120
100
80
60
40
20
0
63.3
80.34
89.29
110.08
131.99
2011 2012 2013 2014 2015
Profit before tax
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, through chart 2.2, it can be seen that BIDV Tien Giangs profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project Restructuring the system of credit institutions in the period 2011-2015 approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services.
2.2. Current status of non-credit service development at BIDV Tien Giang.
2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times.
Along with the development of the Head Office, BIDV Tien Giangs products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,...
2.2.1.1. Payment services:
In accordance with the Prime Ministers Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc.
Chart 2.3. Net income from payment services in the period 2011-2015
Unit: Million VND
6000
5000
4000
3000
2000
1000
0
3922 4065
4720 5084 5324
2011 2012 2013 2014 2015
Net income from payment services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment.
2.2.1.2. Treasury services:
BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giangs treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17].
Chart 2.4. Net income from treasury services in the period 2011-2015
Unit: Million VND
350
300
250
200
150
100
50
0
105 122
309 289 279
2011 2012 2013 2014 2015
Net income from treasury services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services.
2.2.1.3. Guarantee and trade finance services:
BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance.
Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015
Unit: Million VND
14000
12000
10000
8000
6000
4000
2000
0
5193 5695
2742 3420
8889
3992
11604 12206
5143 5312
2011 2012 2013 2014 2015
Net income from guarantee services Net income from Trade Finance
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.5, we can see that BIDV Tien Giangs income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giangs corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area.
are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future.
2.2.1.4. Card and POS services:
As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services.
In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system.
Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments.
Chart 2.6. Net income from card services in the period 2011-2015
Unit: Million VND
3500
3000
2500
2000
1500
1000
500
0
687
1023
1547
2267
3104
2011 2012 2013 2014 2015
Net income from card services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.6, it can be seen that BIDV Tien Giangs card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25].
Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area.
Unit: Machine
STT
Bank name
Number of ATMs
Cumulative number of ATM cards
POS machine
1
BIDV Tien Giang
23
97,095
22
2
BIDV My Tho
7
21,325
0
3
Agribank Tien Giang
29
115,743
77
4
Vietinbank Tien Giang
16
100,052
54
5
Dong A Tien Giang
26
97,536
11
6
Sacombank Tien Giang
24
88,513
27
7
Vietcombank Tien Giang
15
61,607
96
8
Vietinbank - Tay Tien Giang Branch
6
46,042
38
(Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21])
Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6).
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div.maincontent .s40 { color: black; font-family:Times New Roman, serif; font-style: normal; fo](data:image/svg+xml,%3Csvg%20xmlns=%22http://www.w3.org/2000/svg%22%20viewBox=%220%200%2075%2075%22%3E%3C/svg%3E)
Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015
zt2i3t4l5ee
zt2a3gsnon-credit services, joint stock commercial bank
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zc2o3n4t5e6n7ts
At that time, the Branch had to set aside a provision for credit risks, which reduced the Branch's income.
Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015
Unit: Billion VND
140
120
100
80
60
40
20
0
63.3
80.34
89.29
110.08
131.99
2011 2012 2013 2014 2015
Profit before tax
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, through chart 2.2, it can be seen that BIDV Tien Giang's profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project "Restructuring the system of credit institutions in the period 2011-2015" approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: "Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services".
2.2. Current status of non-credit service development at BIDV Tien Giang.
2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times.
Along with the development of the Head Office, BIDV Tien Giang's products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,...
2.2.1.1. Payment services:
In accordance with the Prime Minister's Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers' cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc.
Chart 2.3. Net income from payment services in the period 2011-2015
Unit: Million VND
6000
5000
4000
3000
2000
1000
0
3922 4065
4720 5084 5324
2011 2012 2013 2014 2015
Net income from payment services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment.
2.2.1.2. Treasury services:
BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giang's treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17].
Chart 2.4. Net income from treasury services in the period 2011-2015
Unit: Million VND
350
300
250
200
150
100
50
0
105 122
309 289 279
2011 2012 2013 2014 2015
Net income from treasury services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services.
2.2.1.3. Guarantee and trade finance services:
BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance.
Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015
Unit: Million VND
14000
12000
10000
8000
6000
4000
2000
0
5193 5695
2742 3420
8889
3992
11604 12206
5143 5312
2011 2012 2013 2014 2015
Net income from guarantee services Net income from Trade Finance
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.5, we can see that BIDV Tien Giang's income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giang's corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area.
are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future.
2.2.1.4. Card and POS services:
As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services.
In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system.
Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments.
Chart 2.6. Net income from card services in the period 2011-2015
Unit: Million VND
3500
3000
2500
2000
1500
1000
500
0
687
1023
1547
2267
3104
2011 2012 2013 2014 2015
Net income from card services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.6, it can be seen that BIDV Tien Giang's card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25].
Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area.
Unit: Machine
STT
Bank name
Number of ATMs
Cumulative number of ATM cards
POS machine
1
BIDV Tien Giang
23
97,095
22
2
BIDV My Tho
7
21,325
0
3
Agribank Tien Giang
29
115,743
77
4
Vietinbank Tien Giang
16
100,052
54
5
Dong A Tien Giang
26
97,536
11
6
Sacombank Tien Giang
24
88,513
27
7
Vietcombank Tien Giang
15
61,607
96
8
Vietinbank - Tay Tien Giang Branch
6
46,042
38
(Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21])
Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6).
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Applying a Suitable Port Investment and Operation Management Model -
Monitoring Report Based on Approved Plan Item: Operation Management Area of Song Bung 4 Hydropower Plant -
Organizational Structure of Management Apparatus: The Organizational Model and Operation of the Nghe An Provincial People's Credit Fund is Shown in Diagram 3.1. Below. -
General Accounting Diagram of Business Management Costs
Construction planning (m 2 )
Construction land | Number of floors | Number of floors for long term lease | Number of floors of apartments for sale | Construction floor area (m 2 ) | Investment rate (million VND/ m2 ) | |
Block A, block1 | 995 | 15 | 2 | 13 | 14925 | 5730 |
block2 | 1400 | 20 | 2 | 18 | 28000 | 7180 |
block3 | 600 | 18 | 2 | 16 | 10800 | 6450 |
Block B, block1 | 1487 | 15 | 2 | 13 | 22305 | 5730 |
block2 | 647 | 20 | 2 | 18 | 12940 | 7180 |
Block C, block1 | 524 | 15 | 2 | 13 | 7860 | 5730 |
block2 | 1097 | 20 | 2 | 18 | 21940 | 7180 |
Pool | 863 | 1 | 863 | 8540 | ||
School | 1,100.0 | 2 | 2200 | |||
Green park, school | 15,705.5 | 1 | 15705.5 | 2000 |
Block construction floor area
m 2 | 118770 | |
Construction area/apartment area ratio | proportion | 1.15 |
Apartment floor area: | m 2 | 103278.26 |
Floor area of apartment for rent (2 floors) | m 2 | 11739.13 |
Floor area of apartment for sale | m 2 | 91539.13 |
Management and operation fees | VND/m2 / year | 60000 |
2 Blocks for rent + Basement for rent | ||
Long term rental | ||
Basement, Management Board Contract | ||
Total basement area for rent, long term | m 2 | 9,188.2 |
Car parking fee | VND/month/unit | 0.85 |
Motorbike parking fee | VND/month/unit | 0.1 |
Total car fee | VND/month | 108.8 |
Total motorbike fee | VND/month | 25.4 |
External revenue rate | proportion | 50% |
Expected to charge visitors fee | VND/month | 67.1 |
Total revenue from basement | VND/month | 201.3 |
Real rental price increase/decrease rate | proportion | |
Prepayment period | month | 12 |
Tax | proportion | 10% |
Office floor for rent | ||
Number of floors for rent, long term | unit | 2 |
1 floor area for rent, long term | m 2 | 5869.57 |
Total area for long term apartment rental | m 2 | 11739.13 |
Apartment rental price (including management fee and VAT) | USD/m2 / month | 30 |
Apartment rental price (including management fee and VAT) | VND/m2 / month | 556320 |
Apartment rental price | VND/m2 / year | 6,676 |
Real rental price increase/decrease rate | proportion | |
Tax | proportion | 10% |
Maintenance deduction | proportion | 2% |
Prepayment (time) | month | 12 |
Short term rental | ||
Office floor for rent | ||
Number of floors for rent, short term | unit | 0 |
1 floor area for rent, short term | m 2 | 5869.57 |
Total area for apartment rental, short term | m 2 | 0.00 |
Apartment rental price (excluding management fee) | USD/m2 / month | 24.7 |
Apartment rental price | VND/m2 / month | 458036.8 |
Apartment rental price | VND/m2 / year | 5,496 |
Real rental price increase/decrease rate | proportion |
Room occupancy rate
proportion | ||
Tax | proportion | 10% |
Maintenance deduction | proportion | 2% |
Prepayment (time) | month | 3 |
Apartment building, sold out
Total floor area of apartment for sale | m 2 | 91539.1 |
Real selling price increase/decrease rate | proportion | |
Apartment selling price (including Tax, transaction fee) | VND/ m2 | 14 |
Floor area for sale | proportion | |
Exchange transaction fee | proportion | 1% |
Tax | proportion | 10% |
Maintenance fee/selling price | proportion | 2% |
% of payment in 2011 | proportion | 0% |
% of payment in 2012 | ||
% of payment from 2013 onwards | ||
Revenue from apartment sales 2011 (excluding tax) | billion VND | 0 |
Revenue from apartment sales 2012 (excluding tax) | billion VND | |
Revenue from apartment sales 2013 (excluding tax) | billion VND | |
Total revenue from apartment sales (excluding tax) | billion VND | 0 |
Revenue from apartment sales 2011 (after deducting 10% tax) | billion VND | 0.00 |
Revenue from apartment sales 2012 (after deducting 10% tax) | billion VND | |
Revenue from apartment sales 2013 (after deducting 10% tax) | billion VND | |
Total revenue from apartment sales (after tax) | 0.00 | |
Expense | ||
7 Block | ||
Construction costs | billion VND | 1008,681 |
Exterior cost/apartment floor area | VND/ m2 | 0.30 |
Management costs/construction costs | billion VND | 1% |
Exterior costs | billion VND | 35,631 |
Management Fees | billion VND | 10.09 |
Total cost of building construction | billion VND | 1,054,398 |
Internal roads, trees, sports grounds | billion VND | 36.45 |
Total infrastructure cost: | billion VND | 36.45 |
Basement (Cost calculated according to investment rate method) | ||
Total usable floor area | m 2 | 10,209.1 |
Usable area | proportion | 90% |
Adjustment factor (basement) min | 1.1 | |
Adjustment factor (basement) max | 1.13 | |
Pool | ||
Swimming pool construction costs | 000VND/ m2 | 9,911.0 |
Total cost of swimming pool construction | billion VND | 8.55 |
School |