- Remittance payment turnover: In 2016, it reached 300 million VND. In 2017, it reached 300 million VND, equal to 100% compared to 2016. In 2018, it reached 300 million VND, equal to 100% compared to
2017
- Card issuance turnover: 2016 reached 800 million VND. 2017 reached 800 million VND, equal to 100% compared to 2016. 2018 reached 500 million VND, down 300 million VND.
copper (down 37.5%) compared to 2017
- E-Banking revenue: 500 million VND in 2016. 800 million VND in 2017, an increase of 300 million VND (60%) compared to 2016. 900 million VND in 2018, an increase of 100 million VND (13%) compared to 2017.
- Insurance banking revenue: 2016 reached 1,700 million VND. 2017 reached 2,600 million VND, increased 900 million VND (increased 53%) compared to 2016. 2018 reached
3,300 million VND, an increase of 700 million VND (27%) compared to 2017
* Financial work
Table 2.2: Profit of the Bank for Agriculture and Rural Development, Tay Quang Ninh Branch in 2016 - 2018
Unit: Billion VND
Year
Target
2016 | 2017 | 2018 | |
Total revenue | 294 | 357.7 | 431.9 |
Total cost | 224 | 279 | 343 |
Financial contract profit | 70 | 78.7 | 88.9 |
Maybe you are interested!
-
Bad debt management of small and medium enterprises at Vietnam Bank for Agriculture and Rural Development - Quang Binh branch - 1 -
Bad debt management at Vietnam Bank for Agriculture and Rural Development - 17 -
Current Status of Bad Debt Handling at Mekong Development Joint Stock Commercial Bank: -
The impact of job satisfaction on employee commitment to the Bank for Agriculture and Rural Development of Ben Tre - 3 -
Factors affecting the brand value of the Bank for Agriculture and Rural Development of Vietnam - 15
Source: Business performance summary report of 03 NHNo branches (Uong Bi, Mao Khe and Dong Trieu) in 2016, 2017 and Business performance summary report of NHNo Tay Quang Ninh Branch in 2018
Thanks to the good implementation of the set plans, in recent years, NHNo Tay Quang Ninh Branch has continued to achieve encouraging business results.
Unit: Billion VND
90
80 70
70
60
50
40
30
20
10
0
78.7
88.9
Financial contract profit
2016 2017 2018
Chart 2.3 : Profit of the Bank for Agriculture and Rural Development, Tay Quang Ninh Branch in 2016 - 2018
Source: Business performance summary report of 03 NHNo branches (Uong Bi, Mao Khe and Dong Trieu) in 2016, 2017 and Business performance summary report of NHNo Tay Quang Ninh Branch in 2018
Financial contract profit in 2017 increased by 8.7 billion VND (up 12.8%) compared to 2016. In 2018, it increased by 10.2 billion VND (up 13%) compared to 2017, which is a fairly high growth rate compared to the entire system of NHNo Vietnam and compared to other credit institutions in the area. Profit growth over the years has contributed to ensuring income and benefits for employees in the branch.
* Accounting and asset security
- Accounting work
Comply with professional procedures on accounting work; timely, accurately and correctly account for arising economic transactions; manage, set up depreciation, purchase and repair assets in accordance with regulations; compile and keep records and documents in a timely and correct manner.
Increase revenue, implement cost savings, reduce unnecessary expenses to ensure salary fund for employees
- Asset security work
Ensure cash receipts and disbursements, and safety of assets and money at the counter, at the transaction office, at ATMs, at one-stop transaction officers and on the transfer route. Make new purchases, repair and replace equipment to ensure adequate equipment for staff and workers during the working process.
Implement well the work of security, order, safety of assets, fire and explosion prevention. Arrange security forces 24/24 hours/day; assign leaders to be on duty during holidays, storms; equip adequate security equipment to ensure good operation when incidents occur. Coordinate with the police force to protect during the capital transfer process.
* Other aspects of work
Strengthening marketing and propaganda activities, promoting and building the brand image of NHNo Vietnam, with the consistent viewpoint of "Please customers when they come, satisfy customers when they leave", "Time is up when the work is done", NHNo Tay Quang Ninh Branch always pays attention to improving transaction style and manners, especially the customer communication department and is always highly appreciated by customers.
Issue documents according to decentralization to ensure the operation process; strictly follow procedures in professional stages.
Assign specific and detailed targets to each department, team, and individual employee regarding capital growth, credit growth, service revenue, etc. as a basis for classifying and ranking employees for rewards and salary payments.
2.2.2. Current status of bad debt and practical application of law on bad debt settlement at the Bank for Agriculture and Rural Development, Tay Quang Ninh Branch
2.2.2.1. Bad debt situation at the Bank for Agriculture and Rural Development, Tay Quang Ninh Branch from 2016 - 2018
To understand clearly about credit quality and bad debt, we can consider the general bad debt situation of NHNo Tay Quang Ninh in the table below:
Table 2.3: Bad debt and outstanding credit of the Bank for Agriculture and Rural Development, Tay Quang Ninh Branch, period 2016 - 2018
Unit: billion VND
Target
2016 | 2017 | 2018 | |
Bad debt | 9 | 31 | 48 |
Total Outstanding Debt | 3,413 | 3,994 | 4,459 |
Bad Debt / Total Outstanding Debt (%) | 0.26% | 0.78% | 1.08% |
Source: Business performance summary report of 03 NHNo branches (Uong Bi, Mao Khe and Dong Trieu) in 2016, 2017 and Business performance summary report of NHNo Tay Quang Ninh Branch in 2018
It can be seen that in the period 2016 - 2018, bad debt increased both in absolute and relative terms. Specifically, bad debt in 2017 was 31 billion VND, an increase of 22 billion VND (an increase of 0.52%) compared to 2016, accounting for 0.78% of total outstanding debt. In 2018, it was 48 billion VND, an increase of 17 billion VND (an increase of 0.3%) compared to 2017, accounting for 1.08% of total outstanding debt. However, the ratio of bad debt/total outstanding debt is always below the permitted level (the regulation of NHNo Vietnam is <2.5%/total outstanding debt).
Unit: billion VND
48
31
9
50
40
Total Bad Debt
30
20
10
0
2016 2017 2018
Chart 2.4: Total bad debt of the Bank for Agriculture and Rural Development, Tay Quang Ninh Branch in 2016-2018
Source: Business performance summary report of 03 NHNo branches (Uong Bi, Mao Khe and Dong Trieu) in 2016, 2017 and Business performance summary report of NHNo Tay Quang Ninh Branch in 2018
The bad debt of NHNo Tay Quang Ninh Branch is as follows (see chart 2.4): In 2017, group 1 debt accounted for 96.8% of total outstanding debt; group 2 debt accounted for 2.45% of total outstanding debt and bad debt group (group 3, group 4, group 5) was controlled at 0.78% of total outstanding debt, compared to the bad debt group ratio of 2016 at 0.26%, the bad debt ratio in 2017 increased by 0.52% mainly due to some customers with loss-making production and business operations who could not repay their debts within the prescribed terms. The provisioning of general provisions and specific provisions for loans of NHNo Tay Quang Ninh Branch was thoroughly implemented in accordance with the regulations of the State Bank. Therefore, in 2017, NHNo Tay Quang Ninh Branch made full provisioning of 100% of risk provisions in accordance with the provisions of Circular 02/2013/TT-NHNN. The amount of risk reserves used in 2017 to handle debt was 5.5 billion VND. After handling with reserves, the monitoring, development and implementation of debt collection plans for each customer were vigorously implemented. In 2017, the revenue from debts handled with reserves was 3.5 billion VND.
By 2018, the bad debt of NHNo Tay Quang Ninh Branch continued to increase in both absolute and relative numbers, specifically: group 1 debt accounted for 94.86% of total outstanding debt; group 2 accounted for 4.06% of total outstanding debt and bad debt group (group 3-5) accounted for 1.08% of total outstanding debt, compared to the bad debt group ratio of 2017, an increase of 0.3%. With a cautious viewpoint, NHNo Tay Quang Ninh Branch has classified debt quite strictly according to the regulations of the State Bank and has made full provisions for debt with potential risks. In 2018, NHNo Tay Quang Ninh Branch has set aside 100% of the credit risk reserve with a total amount recorded as expense of 40 billion VND, equal to 100% compared to the reserve expense in 2017. The reason is that the economic situation in the area is difficult, some key industries such as coal and cement production is stagnant due to unsold products, large inventory of goods. On the other hand, due to the impact of climate change, unusual weather, and outbreaks of diseases have directly affected the production and business activities and financial situation of enterprises, causing many enterprises and individuals to have difficulty in fulfilling their debt repayment commitments to the Bank. Enterprises with financial difficulties all face obstacles in paying for goods, slow collection of sales, enterprises not paying debts on time, leading to NHNo Tay Quang Ninh Branch having to adjust.
Adjusting debt terms, extending debt and transferring overdue debt to appropriate debt groups leads to an increase in bad debt.
Table 2.4: Outstanding credit balance of the Bank for Agriculture and Rural Development, Tay Quang Ninh Branch from 2016 - 2018
Unit: billion VND, million USD
Target
Year | 2017 vs. 2016 | 2018 vs. with 2017 | |||||
2016 | 2107 | 2108 | Great opposite to | % Increase Chief | Great opposite to | % Increase Chief | |
Total outstanding debt in VND | 3,413 | 3,994 | 4,459 | 581 | 17% | 465 | 11.6% |
1. By currency: | 3,413 | 3,994 | 4,459 | 581 | 17% | 465 | 11.6% |
- VND | 3,413 | 3,994 | 4,459 | 581 | 17% | 465 | 11.6% |
- Foreign currency (converted to USD) | 0 | 0 | 0 | ||||
2. Over time: | 3,413 | 3,994 | 4,459 | 581 | 17% | 465 | 11.6% |
- Short term | 1,734 | 2,226 | 2,722 | 492 | 28.4% | 496 | 22.3% |
- Medium and long term | 1,680 | 1,768 | 1,737 | 88 | 5.2% | -31 | -1.75% |
3. Bad debt: | |||||||
- Total bad debt | 9 | 31 | 48 | 22 | 244.4% | 17 | 54.8% |
- Bad debt ratio | 0.26% | 0.78% | 1.08% | 0.52% | 0.3% | ||
Source: Business performance summary report of 03 NHNo branches (Uong Bi, Mao Khe and Dong Trieu) in 2016, 2017 and Business performance summary report of NHNo Tay Quang Ninh Branch in 2018
Another reason that cannot be ignored is the increasing number of credit institutions opened locally, causing the dispersion of capital sources because each credit institution tries to gain market share and wants to increase credit scale (because most of them are still small scale but still commit to diverse investment loans), while the ability to mobilize capital is still weak. Therefore, the mobilized capital of NHNo Tay Quang Ninh Branch is significantly affected. On the other hand, due to competition between
In order to gain market share, local credit institutions should sometimes loosen their business processes. In addition, some officers of NHNo Tay Quang Ninh Branch have limited capacity, when lending, they sometimes do not carefully assess the conditions of collateral, especially the mortgage valuation, financial capacity, and feasibility plan, even lending capital for the wrong purpose, customers' business is ineffective, there is a risk of bankruptcy, making it difficult for the bank to recover or unable to recover capital and interest, leading to bad debt continuing to increase.
Another reason is that the involvement of law enforcement agencies is sometimes slow and not timely, especially for bad debts where borrowers resist handing over assets, flee, die, etc., so the recovery of assets for auction is very difficult and time-consuming. In addition, the real estate market in the area, after a period of excitement, has now become stagnant, and there is not much demand from buyers, leading to difficulties in auctioning real estate. In case the assets are sold, the value obtained is very low, only enough to cover the outstanding loan balance.
Those are objective reasons, but on the subjective side: although bad debt in the period of 2016 - 2018 increased, however, with its creative, flexible and persistent management, NHNo Tay Quang Branch always steadfastly implemented the policy of sustainable credit growth, attaching importance to improving credit quality with measures: restructuring investment portfolio, strengthening customer relations...; strictly controlling credit quality. risk management... As a result, the credit quality of NHNo Tay Quang Ninh Branch always maintained at a low level. As of December 31, 2018, the bad debt ratio was 1.08% - much lower than the regulation of NHNo Vietnam allowed at 2.5%. Regarding the provisioning and use of risk reserves, as of December 31, 2018, NHNo Tay Quang Ninh Branch has fully set aside 100% of general and specific provisions according to the results of debt classification according to current regulations of the State Bank. The balance of the Risk Reserve Fund as of December 31, 2018 was VND 50 billion, of which general provisions were VND 33 billion and specific provisions were VND 17 billion. In 2018, NHNo Tay Quang Ninh Branch actively applied debt collection measures and the amount recovered was recorded in extraordinary income as VND 9 billion.
47
In addition, if considering the application of classification according to Circular 02/2013/TT-NHNN to classify debt, the debt classification results from 2016 - 2018 show that credit quality at NHNo Tay Quang Ninh Branch is always guaranteed, the proportion of each debt group on total outstanding debt at times as in Table 2.5
Table 2.5: Debt classification according to Circular 02/2013/TT-NHNN
Unit: Billion VND
Year
Target
December 31, 2016 | December 31, 2017 | December 31, 2018 | ||||
Balance | % | Balance | % | Balance | % | |
Group 1 (Standard Debt) | 3,267 | 95.72 | 3,865 | 96.77 | 4,230 | 94.86 |
Group 2 (Debts needing attention) | 137 | 4.01 | 98 | 2.45 | 181 | 4.06 |
Group 3 (Substandard debt) | 1 | 0.03 | 2 | 0.05 | 2 | 0.05 |
Group 4 (Doubtful debt) | 3 | 0.09 | 24 | 0.60 | 11 | 0.25 |
Group 5 (Debt with potential loss of capital) | 5 | 0.15 | 5 | 0.13 | 35 | 0.78 |
Total outstanding debt | 3,413 | 3,994 | 4,459 | 100% | ||
Source: Business performance summary report of 03 NHNo branches (Uong Bi, Mao Khe and Dong Trieu) in 2016, 2017 and Business performance summary report of NHNo Tay Quang Ninh Branch in 2018
Table 2.5 shows that group 1 and group 2 debts of NHNo Tay Quang Ninh Branch in the years 2016 - 2018 both accounted for a very large proportion. Bad debts (including groups 3, 4, and 5) accounted for a very small proportion and had specific changes over the years. This proves that the bad debt handling work of NHNo Tay Quang Ninh Branch has always been focused on and has partly promoted its effectiveness.
Specifically, in 2017, the bad debt ratio increased slightly compared to 2016, mainly due to the debt classification being conducted according to the State Bank's stricter revised regulations. The general and specific provisions for loans of NHNo Tay Quang Ninh Branch were thoroughly implemented according to the State Bank's regulations.