Overview of Saigon Thuong Tin Commercial Joint Stock Bank

Investment project as well as investment project appraisal in general is a very sophisticated and complicated job. It is not simply a matter of calculating according to available forms. In addition, high discipline, passion for work and good professional ethics will be sufficient conditions to ensure the quality of appraisal. If the CBTĐ has bad moral qualities, it will affect the work progress, the relationship between the Bank and the customer, ... especially the comments and assessments given will be influenced by factors not from the project itself, so objectivity completely does not exist and the appraisal is completely meaningless.

Mistakes in project appraisal from human factors, whether intentional or unintentional, all lead to the same consequence: incorrect assessment of efficiency, financial capacity as well as the ability to repay bank loans, thus causing difficulties for banks in debt collection, and more seriously, the risk of losing capital and reducing business profits.

* Appraisal process

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The appraisal process of each bank is the basis for CBTĐ to perform the work objectively, scientifically and completely. The appraisal process of investment projects includes the content, appraisal methods, and procedures for carrying out those contents. The appraisal process is built in a scientific, advanced and suitable way with the strengths and characteristics of the Bank, which will contribute to improving the quality of project appraisal. The appraisal content is mentioned all issues of the project from the Bank's perspective such as legal issues, investment capital issues, financial efficiency, debt repayment capacity and project risks. The more complete and detailed this content is, the more accurate the appraisal conclusions will be.

* Appraisal method:

The method of financial appraisal of investment projects includes the evaluation criteria system, the way to process information in the project profile and related information to provide necessary information about the feasibility of the project as well as the ability to repay the bank. Modern and scientific methods help CBTĐ, analyze and calculate the financial efficiency of the project quickly and accurately, forecast risks, and serve as a basis for leaders to make the right funding decisions.

Staff performing the appraisal process: Professional qualifications, understanding of areas related to the investment project, staff ethics, etc. all have a direct impact on appraisal effectiveness. Lack of understanding will make this work time-consuming and costly for both the Bank and the enterprise (possibly losing business opportunities, then facing risks, unpaid debts, etc.)

* Assessment content:

Appraising the legality of the enterprise, past and present financial situation, collateral,... control during and after the loan all affect the quality of project appraisal.

* Other factors:

 Information and information processing capabilities

Credit officers conduct appraisals based on the information collected. Thus, appraisal results depend on the quality of information, and complete and accurate information is a necessary condition for good appraisal results. Two issues of concern today are the source of information and the quality of information. Information can be collected from many sources:

- Information from the borrowers themselves. Any customer applying for a loan must be responsible for providing information as required by the Bank. That is information about the borrower, the loan project, financial reports and other necessary documents. This source of information is very important but it is difficult to determine its reliability, because customers who want to borrow money always give good aspects of the project and are often subjective and one-sided, the general mentality is not to want the actual financial situation of their unit. In this case, credit officers often have to use professional experience and base on long-term business relationships and creditworthiness to evaluate the quality of information.

- Information collected from competent authorities. Because before submitting the project for loan application, these projects have gone through the appraisal step of the competent authority to sign and approve the project. This is also the basis for credit officers to be more confident about the feasibility of the project.

- Information from credit information centers and risk prevention centers are also reliable sources of information, but this source of information is not updated and diverse.

- There are also other sources of information such as the borrower's business partners, from banks that have had relationships with the customer before. But this source of information is difficult to collect.

After collecting information, an important issue for credit officers is how to process that information to save time and achieve high results. To do this, it is necessary to conduct analysis, evaluation, and storage regularly and scientifically.

 Appraisal time

For agencies, organizations and individuals with the authority to appraise projects, timely appraisal within the prescribed time limit is a factor contributing to improving the quality of project appraisal. As for commercial banks, when there are complete documents, credit officers will conduct project appraisal as quickly as possible to submit to the Head of Credit Department and Director for consideration and disbursement to customers. Because quick appraisal, following the correct process, good quality will create the Bank's reputation and trust for customers, as well as reduce time and cost for appraisal work, helping to improve the quality of project appraisal work.

 Consistency and uniformity of the legal document system in the project appraisal process

The uniformity and consistency of legal documents is also a fundamental factor affecting the quality of project appraisal. The uniformity and consistency in the provisions of high legal documents will create conditions for appraisal officers to master professional knowledge, thereby promoting the appraisal process and improving the quality of this work.

 Executive organization

Is the arrangement, organization, regulation of responsibilities and authorities of individuals and departments participating in appraisal, the procedure as well as the relationship between individuals and departments.

division in implementation. There needs to be a specific and scientific division of tasks and a mechanism for strict inspection and supervision in the implementation stage, but not rigid or restrictive, in order to achieve objectivity and the appraisal is carried out quickly and conveniently while still ensuring accuracy. Thus, the organization and operation of appraisal activities, if a strong system is built, will maximize the creative capacity of individuals and collective strength, which will improve the quality of appraisal.

2) Objective factors

These are factors beyond the Bank's control, and the Bank can only overcome and adapt.

- From the business side

The project profile submitted by the investor is an important basis for the Bank to appraise, therefore, the investor's poor project preparation, appraisal and implementation skills will adversely affect the Bank's appraisal quality: it will take longer to analyze, calculate, collect more information... especially for Vietnamese enterprises, whose management capacity and financial potential are very limited, the risk of the project not operating as expected is even greater for the Bank - the lender of the majority of the investment capital in the project. On the other hand, the honesty of the information provided by the investor to the Bank about: the current production and business situation and financial capacity, the parameters in the project... as well as all issues.

- Economic environment

The level of socio-economic development of a country determines the common experience and capacity of the subjects in the economy, determines the reliability of information, thereby affecting the quality of appraisal. The underdeveloped economy, the lack of synchronization of economic mechanisms, along with the instability of macroeconomic conditions, have limited the provision of authentic information that accurately reflects developments, market relationships, and information on forecasting the state of the economy. At the same time, the orientations and policies for economic and social development by region, industry, etc. have not been specifically, synchronously and stably developed, which is also a risk factor in analyzing, accepting or approving projects.

- Legal environment

The shortcomings in the consistency and effectiveness of State legal documents all have negative impacts on the quality of appraisal (as well as the results of project activities). For example, the overlapping contradictions of documents, sub-laws on various fields, the continuous changes in documents on financial management regulations, the ineffectiveness of accounting and statistics ordinances, etc. change the feasibility of the project over time as well as make it difficult for the Bank to assess and forecast risks, and limit the collection of accurate information (for example, a business has many types of financial reports serving different purposes).

CHAPTER II: CURRENT STATUS OF INVESTMENT PROJECT APPRAISAL AT SAIGON THUONG TIN COMMERCIAL JOINT STOCK BANK, HA TINH BRANCH

2.1. Overview of Saigon Thuong Tin Commercial Joint Stock Bank - Ha Tinh Branch

2.1.1. The process of formation and development of Saigon Thuong Tin Commercial Joint Stock Bank

Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) was established under Decision No. 05/GP-UB dated December 21, 1991 of the People's Committee of Ho Chi Minh City and operated under Decision No. 0006/NH-GP dated December 5, 1991, on the basis of converting Vo Vap Economic Development Bank and merging three credit cooperatives Tan Binh - Thanh Cong - Lu Gia. At that time, all four units were in a period of extreme financial difficulty. Starting with an initial charter capital of only 3 billion VND, more than 24 years of operation and development. After merging the entire Southern Commercial Joint Stock Bank system, Saigon Thuong Tin Commercial Joint Stock Bank has become one of the Top 5 largest banks in Vietnam with a charter capital of up to 18,853 billion VND, total assets of up to 297,184 billion VND, a network of up to 563 transaction points nationwide and in Laos and Cambodia; a total number of employees of 15,510 people (as of October 1, 2015). With strong resources, Sacombank can further improve the scale and quality of service provision to customers, increasing the ability to supply capital to the market.

1993: The first Joint Stock Commercial Bank of Ho Chi Minh City opened its first branch in Hanoi.

1996: was the first bank to issue public shares with a par value of VND 200,000/share to increase charter capital to VND 71 billion with nearly 9,000 shareholders contributing capital.

2002: Established the first subsidiary - Sacombank Debt Management and Asset Exploitation Company - SBA, initially implementing the strategy of diversifying comprehensive financial service products.

2004: Signed contract to deploy T-24 Corebanking system with Temenos (Switzerland)

2005: Established 8-3 branch, the first model dedicated to women in Vietnam operating with the mission of advancing modern Vietnamese women.

2006: was the first joint stock commercial bank in Vietnam to pioneer in listing shares on HOSE, establishing affiliated companies including: Sacombank Remittance Company - SBR, Sacombank Financial Leasing Company - SBL, Sacombank Securities Company

- SBS.

2007: Established Hoa Viet branch, a special banking model serving the Chinese community, covering the network of operations in provinces and cities in the West, South, Southeast and Central Highlands.

December 2008: was the first Vietnamese commercial joint stock bank to open a branch in Laos.

June 2009: opened a branch in Phnom Penh, completing the network expansion in the Indochina region.

2010: Successfully completed the development goals for the 2001-2010 period with an average growth rate of 64%/year.

October 5, 2011: Saigon Thuong Tin Commercial Joint Stock Bank established a 100% foreign-owned bank in Cambodia.

December 10, 2012: Saigon Thuong Tin Commercial Joint Stock Bank officially received and became the first commercial joint stock bank in Vietnam to apply the environmental and social responsibility management system (ESMS) according to international standards consulted by Price Waterhouse Coopers Netherlands.

Saigon Thuong Tin Commercial Joint Stock Bank is also honored to receive many prestigious certificates of merit and awards such as:

- For 3 consecutive years from 2010 to 2012, the bank has always achieved the title of bank with the best foreign exchange services in Vietnam as voted by Global Finance.

- Awarded the title of best retail bank in Vietnam by The Asset (2009, 2011) and by International Finance magazine (2013).

- Bank with the best cash management service in Vietnam voted by The Asset Hong Kong (2010) and The Asset (2011).

- “Bank with the tightest corporate governance structure and best investor relations activities in 2011” voted by Alpa Southest Asia (Hongkong).

- Most recently, it was voted the Best Domestic Bank in Vietnam by The Asset (2013) and many other titles and awards...etc.

2.1.2. Introduction to Saigon Thuong Tin Commercial Joint Stock Bank – Ha Tinh Branch

June 27, 2012: Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) - officially opened Ha Tinh branch at 37-39 Dang Dung Street - Block 7, Nam Ha Ward, Ha Tinh City.

Saigon Thuong Tin Commercial Joint Stock Bank - Ha Tinh branch operates, providing services such as: receiving deposits in VND, US dollars with attractive interest rates, quick procedures. Providing loans for corporate and individual customers with quick procedures, reasonable interest rates, timely disbursement progress to best serve the business and consumption needs of customers. Providing fast money transfer services with the shortest time, the most reasonable transfer fees through a network of 563 transaction points across 48/63 provinces and cities of Vietnam and two branches in Laos and Cambodia. Providing international payment services, guarantees, factoring, salary collection and payment, ATM card services, foreign currency and gold trading and exchange, remittance payments and financial consulting services.

2.1.3. Organizational structure of Saigon Thuong Tin Commercial Joint Stock Bank - Ha Tinh branch

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