modern agriculture, strengthening rural infrastructure and improving farmers' lives. In 2009, the Government issued Resolution No. 63/2009/NQ-CP to ensure national food security by ensuring adequate food supply, especially rice. This was the first policy document for this purpose.
Thanks to the implementation of policy measures on ensuring food security, from 1986 to present, we have continuously achieved good results in agriculture in general and food security in particular.
Table 3.1: Area and output of grain crops
Year
Total Area (Thousand hectares) | Rice Area (Thousand hectares) | Corn Area (Thousand hectares) | Total Product quantity (Thousand tons) | Rice Yield (Thousand tons) | Corn Production (Thousand tons) | |
1990 | 6,477 | 6,043 | 432 | 19,898 | 19,225 | 671 |
1991 | 6,753 | 6.303 | 448 | 20,296 | 19,622 | 672 |
1992 | 6,956 | 6,475 | 478 | 22,343 | 21,590 | 748 |
1993 | 7,058 | 6,559 | 497 | 23,721 | 22,837 | 882 |
1994 | 7,136 | 6,599 | 535 | 24,674 | 23,528 | 1,144 |
1995 | 7,324 | 6,766 | 557 | 26,143 | 24,964 | 1,177 |
1996 | 7,621 | 7.004 | 615 | 27,936 | 26,397 | 1,537 |
1997 | 7,768 | 7,100 | 663 | 29,183 | 27,524 | 1,651 |
1998 | 8,016 | 7,363 | 650 | 30,759 | 29,146 | 1,612 |
1999 | 8,349 | 7,654 | 692 | 33,150 | 31,394 | 1,753 |
2000 | 8,399 | 7,666 | 730 | 34,539 | 32,530 | 2.006 |
2001 | 8,225 | 7,493 | 730 | 34,273 | 32,108 | 2,162 |
2002 | 8,323 | 7,504 | 816 | 36,961 | 34,447 | 2,511 |
2003 | 8,367 | 7,452 | 913 | 37,707 | 34,569 | 3.136 |
2004 | 8,438 | 7,445 | 991 | 39,581 | 36,149 | 3,431 |
2005 | 8,383 | 7,329 | 1,053 | 39,622 | 35,833 | 3,787 |
2006 | 8,360 | 7,325 | 1,033 | 39,706 | 35,850 | 3,855 |
2007 | 8,305 | 7,207 | 1,096 | 40,247 | 35,943 | 4.303 |
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Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015
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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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8,542 | 7,400 | 1,140 | 43,305 | 38,730 | 4,573 | |
2009 | 8,527 | 7,437 | 1,089 | 43,323 | 38,950 | 4,372 |
2010 | 8,616 | 7,489 | 1,126 | 44,632 | 40,006 | 4,626 |
2011 | 8,778 | 7,655 | 1.121 | 47,236 | 42,399 | 4,836 |
2012 | 8,919 | 7,761 | 1,157 | 48,713 | 43,738 | 4,974 |
2013 | 9,074 | 7,903 | 1,170 | 49,232 | 44,039 | 5.191 |
2014 | 8,996 | 7,816 | 1,179 | 50,179 | 44,975 | 5.202 |
Preliminary 2015 | 9,015 | 7,835 | 1,179 | 50,498 | 45,216 | 5,281 |
2008
Source: General Statistics Office
The total area of food cultivation has an increasing trend, from 6,477 thousand hectares in 1990 to 8,438 thousand hectares in 2004 and to 8,996 in 2014 (an increase of 2,519 hectares from 1990 to 2014). The area of rice cultivation increased from 6,043 hectares in 1990 to 7,816 in 2014 (an increase of 1,773 thousand hectares), the area of corn cultivation increased from 432 thousand in 1990 to 1,179 (an increase of 747 thousand hectares). The total food production also increased by 30,281 thousand tons from 19,898 thousand tons in 1990 to 50,179 thousand tons in 2014, of which rice production alone increased by 25,750 thousand tons (2.34 times higher than in 1990).
Ensuring national food security is mainly implemented through the development of the agricultural sector producing food and distributing food to the people through sectoral policies. The objectives of these sectoral policies are set out in a number of documents and plans. Each sectoral policy sets out specific objectives and actions to achieve this objective. If we consider the requirement of ensuring food security as "ensuring that everyone, at all times, can easily access safe food sources to ensure normal life and activities", policies for food security can be classified into the following groups of policies:
(1) The group of policies on ensuring food supply capacity includes:
- Policy on land use planning, area, and types of food crops;
- Policy to support food production.
(2) Policy groups to enhance food access include:
- Labor and employment policy, increasing income;
- Support policies, food subsidies and income subsidies.
- Building food distribution channels.
(3) Policy group to enhance food safety and hygiene.
(4) Policies to cope with food crises.
3.1.1. Policy group on ensuring food supply capacity
3.1.1.1. Land use planning policy, area, and types of food crops
In agriculture, it can be said that land is the most important factor and therefore receives great attention from the Vietnamese government. The basic content of the current agricultural land policy of the Vietnamese State is reflected in the agricultural land ownership regime, the State's land price policy, the agricultural land accumulation and concentration policy, the agricultural land tax policy and the compensation policy when reclaiming agricultural land. The land ownership regime of Vietnam is divided into ownership rights and use rights. Land ownership rights belong to the State (representing the entire people). The State plays both the role of a public administrative management agency for land and the role of land owner, has the right to decide to reclaim land use rights of farmers, change the purpose of agricultural land use and allocate agricultural land that has been converted to the purpose of use to organizations and individuals who are not farmers, and regulate the price of reclaiming agricultural land. The right to use agricultural land belongs to farmers but is limited to using land for agricultural purposes only, farmers are not allowed to arbitrarily change the purpose of land use to other areas. The goal of these policies is to ensure the rational use and management of land in general. In the agricultural sector, the State issues regulations on land use planning. The following documents can be mentioned:
Land Law: After 1986, the Land Law was first promulgated in 1987, defining: “Land is owned by the entire people and is uniformly managed by the State. The State allocates land to farms, forestry farms, enterprises, people's armed forces units, state agencies, social organizations and individuals for stable and long-term use”. In 1993, the new Land Law replaced the 1987 Land Law, stipulating that “land is owned by the entire people and land use rights belong to land users”. In 2003, the 1993 Land Law was replaced by the 2003 Land Law, inheriting the provisions of the 1993 Land Law and expanding the rights of agricultural land users, including households and individuals, including issues such as the land use term for agricultural land for annual crops is 20 years, for land for perennial crops is 50 years; The limit for allocation of land for annual crops, aquaculture, and salt production to each household or individual shall not exceed 3 hectares for each type of land. The limit for allocation of land for perennial crops to each household or individual shall not exceed 10 hectares for communes, wards, and towns in the plains; and not exceed 30 hectares for communes, wards, and towns in the midlands and mountainous areas. In cases where a household or individual is allocated many types of land including land for annual crops, aquaculture, and salt production, the total limit for land allocation shall not exceed 5 hectares. The Law also expands the limit for receiving land use rights transfers of households and individuals to meet the requirements for land accumulation for agricultural production in a modern direction in accordance with the agricultural and rural development policy. Households and individuals are allowed to accumulate larger areas (not exceeding 10 times the limit for agricultural land allocation). The law specifically and fully regulates land acquisition, compensation, and resettlement support to ensure openness, transparency, and the rights of people whose land is acquired, while effectively addressing cases of land acquisition that are not put into use, causing waste, while farmers have no land for production. This law also regulates cases of conversion of agricultural land use purpose to non-agricultural land in Article 36, accordingly, when converting agricultural land to non-agricultural land
Agricultural land must obtain permission from competent authorities and fulfill financial obligations to the State. Land for annual agricultural crops that is not used for 12 months or more will be recovered according to Article 38 of the 2013 Land Law.
In 1993, the Government issued Decree No. 64/CP dated September 27, 1993 on the allocation of agricultural land to households for stable and long-term use for agricultural production purposes. This Decree determined the land areas allocated for agricultural production purposes, the duration and area of allocation. In October 2001, the Government issued Decree No. 68/2001/ND-CP, which stated the provisions on the authority and bases for making land use plans and projects.
The 13th National Assembly issued Resolution No. 17/2011/QH13 dated November 22, 2011 on Land Use Planning to 2020 and the National 5-year Land Use Plan (2011-2015). Accordingly, by 2020, the agricultural land area of the whole country will be 26.732 million hectares, the rice growing land area will be 3.812 million hectares (14.26%), the land area specializing in growing wet rice with 2 or more crops will be 3.222 million hectares (12.1%).
In 2012, the Prime Minister issued Decision No. 124/QD-TTg dated February 2, 2012 on approving the Master Plan for Agricultural Production Development to 2020 and Vision to 2030. Accordingly, by 2020, the agricultural land area in 2020 is 9.59 million hectares, of which rice land is 3.812 million hectares. Thus, there are differences between the two land planning documents of the National Assembly and the Government when determining the total agricultural land area but the rice growing area is still the same.
Decision No. 432/QD-TTg dated April 12, 2012 on the sustainable development strategy for the period 2011-2020 puts ensuring food security in the priority orientation: "Ensuring food security on the basis of protecting 3.8 million hectares of rice land, ensuring food supply, nutritional needs and people's access to food".
Decree No. 42/2012/ND-CP dated November 5, 2012 stipulates the management and use of rice-growing land in rice-growing areas nationwide. This Decree also mentions the conditions and authority to change the purpose of rice-growing land. In addition, the Decree also mentions the level of cash support to protect and develop rice-growing land: Support of 500,000 VND/ha/year for organizations, households and individuals producing rice on land specializing in wet rice cultivation and 100,000 VND/ha/year on other rice-growing land except for upland rice land that is self-expanded without planning. For cases of damage caused by natural disasters, epidemics or cases of land reclamation and land improvement for agricultural purposes, this Decree also provides support levels based on the cost ratio.
Resolution 63/NQ-CP dated December 23, 2009 on ensuring national food security has included planning for rice and other food land as the main tasks and solutions that need to be implemented: “By 2020, protect the rice land fund of 3.8 million hectares to have an output of 41 - 43 million tons of rice to meet the total domestic consumption demand and export about 4 million tons of rice/year; increase the corn growing area to 1.3 million hectares, output of 7.5 million tons; the fruit growing area to 1.2 million hectares, output of 12 million tons; vegetables of all kinds to 1.2 million hectares, output of 20 million tons”.
In 2015, the Government continued to issue Decree No. 35/2015/ND-CP dated April 13, 2015 on management and use of rice-growing land, replacing Decree No. 42/2012/ND-CP dated May 11, 2012 on management and use of rice-growing land, which took effect from July 1, 2015. Decree 35/2015/ND-CP has changes in the support level compared to Decree 42/2012/ND-CP. Specifically: increasing the support level from VND 500,000 to VND 1,000,000/ha/year for land specializing in wet rice cultivation and from VND 100,000 to VND 500,000/ha/year for other rice-growing land, except for upland rice land that is spontaneously expanded without following the planning and land use plan for rice cultivation. In the case of reclaimed land, according to the previous Decree, support will be based on the cost ratio that organizations, individuals and households have spent, but according to the new Decree, cash support will be 10,000,000 VND.
VND/ha of rice land, support of VND 5,000,000/ha for rice land converted from single-crop rice land or other agricultural land.
The general focus of the above policies is to ensure the use of land for food cultivation according to government orientation, mainly rice, to ensure food self-sufficiency. The policy's goal is to maintain 3.8 million hectares of rice land to ensure the output of 41 to 32 million tons of rice to meet domestic demand and export about 4 million tons of rice/year, in addition to increasing the area and output of other food crops and vegetables. The Land Law also stipulates the responsibility of authorities at all levels in protecting agricultural land by stipulating that when farmers want to change the purpose of land use, they must ask for permission from competent authorities. This contributes to controlling the urbanization process. Some main contents of this policy include: minimizing the conversion of land specialized in rice cultivation to non-agricultural purposes except for national defense, security, national interests, public interests and must be approved. Proposing plans to support and encourage the reclamation, protection and development of rice land. Support farmers when rice is damaged by natural diseases, support for land reclamation and improvement.
3.1.1.2. Policy to support food production
In order to maintain food supply, it is necessary to increase production level and apply science and technology. Currently, Vietnam's food production is oriented not only to meet domestic consumption and export needs. Therefore, this group of policies aims to increase production level, apply science and technology, promote mechanization, irrigation, and chemicalization.
Typical of this group of policies are policies aimed at developing infrastructure for agricultural production, including irrigation systems, road systems, and investment in agricultural scientific research. Some policy documents on agricultural infrastructure in general and rice production in particular
Specifically: Decree No. 32/2001/PL-UBTVQH10 dated April 4, 2001 on exploitation and protection of irrigation works; Decision No. 1590/QD-TTg dated October 9, 2009 on approving the strategy for developing irrigation in Vietnam. These policies aim to strengthen the irrigation system to regulate water volume, consolidate dykes, and serve the needs of people and production in general. The National Target Program on New Rural Construction for the period 2016 - 2020 approved by the Government also includes the content of Infrastructure Development in Content No. 02: Completing the intra-field irrigation system. By 2020, 77% of communes will meet criterion No. 3 on irrigation.
The agricultural extension system is organized from the central to local levels with the function of providing technical guidance, organizing training courses on transferring scientific and technical advances in agricultural production, knowledge of safe production, agricultural cooperatives, etc. However, the most important are still agricultural extension activities carried out by agricultural extension centers and agricultural extension officers at all levels. Short-term training courses to train farmers' skills are organized regularly and periodically according to the plans of the localities. Documents and information on agricultural production are provided to communes and wards, and disseminated to farmers through farmers' associations and cooperatives. Currently, all 63 provinces and centrally-run cities have agricultural extension centers or agricultural extension - fisheries extension centers.
During the period 1992 - 2008, the F1 hybrid rice production extension program guided and transferred hybrid seed production technology through models to farmers in 26 provinces and cities. The F1 hybrid rice area increased from 173ha (in 1992) to 1,500ha in 2006-2008, and seed yield from 300kg/ha (1992) to 2,500kg/ha in 2000. The cost of domestic seeds is 60% compared to imported seeds, self-sufficient in about 25% of hybrid rice seed demand.

![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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