Orientation and Development Strategy of Vietnam Banking System and Vietnam Joint Stock Commercial Bank for Investment and Development

The analysis of liquidity risk of banks only stops at the assessment of static conditions, meaning that banks can only determine their liquidity status at a certain point in time, and cannot determine it for the future when there are fluctuations in interest rates or monetary policies. This shows that liquidity risk management will depend a lot on determining the measurement method as well as market fluctuations.

Fifth, equity capital is not managed effectively.

BIDV's equity capital accounts for too small a proportion of the bank's total assets (less than 5% in the last years of the research period). The equity/total assets ratio (ETA) also tends to decrease over the research period, showing the inefficiency in increasing BIDV's equity capital. The weak increase in equity capital has been the main factor that has dragged BIDV's ROE down since 2015. Thus, effective management of this equity capital will also contribute to increasing BIDV's business efficiency in the future.

Sixth, data collection, analysis and forecasting still face many difficulties.

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Assessing the impact of factors on the efficiency of a bank, whether a bank has a sustainable and in-depth development strategy or not depends largely on the bank's ability to analyze and forecast. However, in order to analyze and forecast, the bank must first collect data to serve the evaluation process. Although BIDV has implemented the collection, processing and storage of information, it is still highly dispersed among branches. The management, operation and control of the information system is still mainly manually compiled, or the quality and reliability of the collected information is not high. Moreover, collecting information for credit rating, serving risk management for each customer group, each individual customer is still a difficult problem not only for BIDV. The information linkage system between banks and credit institutions is still limited, causing difficulties in the information appraisal process. The difficulty in collecting information has led to the difficulty in analyzing and forecasting for the bank. Combined with that, the diverse fluctuations of the market along with BIDV's limited ability to analyze and forecast, has led to a decline in the bank's profits.

Seventh, sustainable and specialized development strategy in the medium and long term.

BIDV, like other banks, has its own development strategy for the future, in the medium and long term, taking into account market changes. However, due to limited analysis and forecasting, the bank's development strategy is somewhat unsuitable for the future. In addition, the indicators in BIDV's development strategy are only based on domestic standards, many of which meet international standards or have not been applied, leading to development that is not sustainable and in-depth. That development strategy may be suitable for Vietnam's conditions but will not be applicable when BIDV develops in the region and internationally. Therefore, BIDV needs to proactively increase its competitiveness and financial capacity according to international standards. First of all, the standards on risk management, accounting standards and Basel II.

Chapter 2 Conclusion

Thus, after more than 60 years of establishment and development, with many changes in name and form of operation, BIDV has achieved impressive results: becoming the number one commercial bank in Vietnam in providing retail services; being one of the commercial banks with the largest asset scale; being one of the pioneering and leading banks in providing high-quality products and services; being the pioneer bank in establishing a financial monitoring and evaluation department nationwide and in some other countries where it operates, etc. However, BIDV needs to focus on increasing its profitability as well as its solvency when its asset scale is greatly increased. At the same time, the bank also needs to focus on its management work throughout the system, especially in the case of a large scope of operations with a huge network.

In addition, over the past 10 years of operation, BIDV has had strong growth, gradually becoming one of the four pillars of the Vietnamese commercial banking industry. The scale of the bank has continuously increased, and the scope of its operations has expanded beyond Vietnam. The bank's future goal is to catch up with regional and world standards, gradually becoming on par with strong competitors in the race. However, strong growth always comes with risks and limitations. Therefore, BIDV needs to recognize and evaluate the causes that may lead to its risks and limitations, and gradually come up with necessary and timely solutions to improve its business efficiency.

Chapter 2 has provided an overview of the current state of BIDV's business performance over the past 12 years. The thesis has deeply studied the factors affecting the bank's business performance. Based on Chapter 1, there are specific criteria for evaluating the current state of BIDV's business performance, thereby pointing out the successes, limitations and related causes. The limitations and causes in this chapter will be used by the researcher as a basis for proposing solutions to improve BIDV's business performance in the future.

CHAPTER 3

SOLUTIONS TO IMPROVE BUSINESS EFFICIENCY OF VIETNAM JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT

3.1. ORIENTATION AND DEVELOPMENT STRATEGY OF THE VIETNAMESE BANKING SYSTEM AND THE JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM

3.1.1. Orientation and development strategy of Vietnam's banking system

3.1.1.1. Factors influencing the development orientation of Vietnam's banking system to 2025 and 2030

The global financial crisis in 2008 had a strong impact on the Vietnamese banking system, especially in the period 2010-2013. With flexible and reasonable policies of the State, Vietnamese commercial banks have basically escaped from the weak financial situation, gradually restoring their financial capacity. However, the consequences of the financial crisis have not been completely resolved, typically the bad debt ratio is still relatively high. In addition, the opening of the economy and integration with countries in the region and internationally have created a very competitive environment for the domestic banking system. From here, the development orientation of the Vietnamese banking system until 2025 is influenced by a number of factors.

The first is globalization. In the context of the country promoting globalization, increasing integration with countries in the region and the world, implementing CPTPP cooperation has contributed to increasing the liberalization factor in the market, bringing many new opportunities to Vietnamese banks. It could be an opportunity to expand the scope of bank operations; an opportunity to access a large number of high-quality customers; or it could be an opportunity to access modern technology, new and more effective management experiences, etc. However, along with those opportunities, Vietnamese banks also have to face certain challenges. The first challenge that most Vietnamese banks face is competitiveness (capital, technology, management skills, employee skills, etc.). In addition, Vietnamese banks may have to face great risks to

from within and outside the country. From the opportunities and challenges that may come to us in the future, the Vietnamese commercial banking system needs to be more dynamic, more stable in business operations, proactive in responding to market fluctuations, and improving its business efficiency.

The second is the explosive development of information technology. In the period when the country is implementing technology 4.0, commercial banks have brought new products and services to the banking system (such as Bankplus products and services, POS machines, ATMs, internet banking, etc.) and will continue to apply modern technological products and services in the future, thereby changing some methods in the competition for quality and business efficiency of commercial banks themselves. Thanks to high-tech products and services, the scope of operations of commercial banks has been expanded with minimal costs and all commercial banks have the same advantages. From here, competition for market share among commercial banks has also become fiercer, and the advantage will belong to commercial banks with high capacity and ability to quickly adapt to new technologies, with advanced and modern technological apparatus.

On the other hand, when the economy develops at a rapid pace, it has led to an increase in the needs and opportunities for social entities (such as businesses and individuals). To meet the needs of social entities, commercial banks need to be able to provide their products and services quickly with high quality and competitiveness. This will be one of the conditions to help commercial banks maintain stability not only for themselves, but also for businesses and households, and to stabilize the financial system.

But to innovate in science and technology, commercial banks will need a large amount of capital for investment. Commercial banks will need highly qualified human resources to use those high-tech products and services. At the same time, risks from technology are also one of the major risks that commercial banks must face.

Third is the change of the global financial market. Vietnam's financial market is still very new, not really developed, transactions of financial assets are mainly pure transactions. However, in the conditions of integration and

With the continued development of the Vietnamese financial market, commercial banks will have the opportunity to receive many new financial assets, many new financial markets such as derivative securities market, securitization (with products such as CDs, MBS, CDO, ...), along with many new financial institutions (for example, SPV). Along with the advantages they bring, the Vietnamese financial market, when not fully developed, will have to face very large risks. In the large financial markets, where financial assets are formed, those financial markets and financial institutions have also encountered many difficulties in evaluating and controlling their operations. A typical example is the US - the largest financial market in the world. The global financial crisis of 2008 shook the US commercial banking system as well as the commercial banking systems of countries around the world, leading to the dissolution of many large, long-standing commercial banks.

Therefore, in order to survive and develop, countries in general and Vietnam in particular need to restructure their financial systems to increase the financial supervision capacity of commercial banks, thereby providing timely warnings to help commercial banks prevent risks that may occur during their operations.

Fourth is the inadequacy between the domestic and international legal environments. When Vietnamese commercial banks aim to operate beyond the domestic territory, reaching out to regional and international markets, it requires a complete legal environment for Vietnamese commercial banks and foreign commercial banks operating in Vietnam. Vietnam must meet the criteria set by the world as a necessary condition to be able to participate with countries in the region and the world. These are criteria on competitiveness, financial capacity, safety, etc. For example, the most common standard accepted by the world for the commercial banking system is the Basel operational safety standard (including Basel I, II, III). In the integration process, Vietnam has taken initial steps to apply Basel II standards in the operations of commercial banks, issuing circulars and decisions on the application of these standards. The implementation roadmap is given in stages, each stage will complete a Basel standard from low to high. An example is that 10 large commercial banks

Vietnam is on the roadmap to implement Basel II and the goal is to fully implement the regulations of the standard by 2020. Or, another law of commercial banks widely applied in Europe is the Dodd-Frank law.

The application of regional and global standards and criteria will facilitate easy market access for commercial banks, but before that, these commercial banks will have to bear a large cost to be able to comply with those standards and criteria. For this reason, in Vietnam, only the largest commercial banks have been selected to implement.

Fifth, competition among commercial banks is increasingly fierce. Competition among commercial banks not only occurs between domestic commercial banks, but also between domestic commercial banks and foreign commercial banks. Commercial banks compete with each other in terms of product quality, services provided to customers, capital, management capacity, and business efficiency. In the integration process, domestic commercial banks are often weaker than foreign commercial banks in all aspects, requiring the Vietnamese commercial banking system to have solid preparations for this competition. In addition, commercial banks also face fierce competition from non-bank organizations. In Vietnam today, there are many non-bank organizations providing bank-like services such as payment services, lending services, and deposit services very quickly and competitively in terms of price (such as MoMo, Payoo, etc.). In addition, Vietnamese commercial banks are mainly small-scale banks, with only a few Vietnamese commercial banks having total equity exceeding 50,000 billion VND. This will be a disadvantage when Vietnam joins the CPTPP agreement and the integration and competition process in the region and the world.

Finally, the change of customers. Commercial banks aim to serve many different customer groups, each group will have its own policies, products and services. When choosing customers, commercial banks need to pay attention to their changes, such as: changes in behavior, or changes in needs. In the coming time, according to the announcement of the World Bank, Vietnam's population will shift to an aging population. And in the case of an aging population, the needs of some customer groups will change. Instead of borrowing, these customers will have the need to

more about savings, asset management, or using consulting services of commercial banks. On the other hand, customer behavior of commercial banks also tends to change differently from before. With the development of science and technology, customers are increasingly proficient with high-tech products and services (especially young customers and businesses) and tend to increase the use of technology products that help them transact and pay immediately such as internet banking, mobile banking.

In addition, the rapid economic growth has opened up investment opportunities and huge capital needs for some individual customers and the majority of businesses. This is also one of the subjects that commercial banks want to attract. To increase the attractiveness to these subjects, commercial banks need to provide highly effective products and services.

Thus, in order to minimize the impacts of the above factors, Vietnam needs to provide appropriate immediate directions for the 2015-2020 period, with a vision to 2025.

3.1.1.2. Scale and investment needs of Vietnam's economy by 2025 and 2030

According to the "Socio-economic development strategy 2011-2020" approved on January 19, 2011 [5] and Decision 681/QD-TTg dated June 4, 2019 of the Government, it shows that, in the period of 2011-2020 and 2025-2030, the Government of Vietnam aims for its development goals as follows:

Firstly, rapid but sustainable development . This rapid and sustainable development is reflected in the average annual growth rate of gross domestic product (GDP). Accordingly, the Government believes that an economy develops sustainably when it has an average GDP growth rate of about 7-8%/year (2016-2020 period) and 5%-6% (2025-2030 period). With such a growth rate, Vietnam's GDP per capita by 2020 will reach the threshold of about 3,000 to 3,200 USD; an increase of 2.2 times at comparable prices, and 3 times at actual prices when compared to 2010.

Second, ensure macroeconomic stability . This goal mainly focuses on building a modern industrial-agricultural-service economic structure.

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