* Service quality
In addition to the appropriate and attractive interest rate policy and diverse products, service quality is also an important factor in determining BIDV's ability to attract customers. Therefore, BIDV has issued a set of service quality standards as a standard rule in serving and communicating with customers. The set of service quality standards is to specify the wishes of customers that BIDV employees need to meet. It is the core of the entire process of building BIDV's image and brand; to act in a unified manner throughout the system; to create confidence and determination in the work of staff at transaction points, bringing customers a perfect service from BIDV. The set of standards for transaction points is specifically regulated as follows:
- Front area: Original copy, interest rate sign.... complete and clean
- Common space: Ceiling, walls, lights, air conditioner, counter, toilet...
- General space information: Interest rate board, screen, LCD, ATM, publications, product advertising leaflets... accurate, clear, updated.
- Equipment and tools: ensure equipment is in good working order, clean, and in suitable location.
- Counter space, desk: Files, items... neatly arranged.
- ATM: The area outside the ATM must be clean and have money available for customers to make transactions.
Particularly for transaction staff and financial consultants who directly advise and sell capital mobilization products, there are specific regulations on uniform style, knowledge, and customer care consulting skills.
* Interest rate policy
The first thing any customer wants to consult when
Depositing money in the Bank is the interest rate. Therefore, the interest rate policy is one of the most important policies among the supporting policies for capital mobilization of commercial banks.
Since its establishment, the ceiling on deposit interest rates has had a profound impact on the operations of commercial banks. The ceiling on VND deposit interest rates as of September 2016 was 6%/year. However, for many commercial banks with large market shares, this interest rate has decreased by 0.2%-0.5%/year. For BIDV, the interest rate on individual deposits as of September 2017 was 7.6%/year (12-month term) for VND and 1%/year for USD. BIDV must comply with the regulations on the ceiling on deposit interest rates of the State Bank, and at the same time, regulate the interest rate to achieve capital mobilization efficiency; that is, BIDV must offer an interest rate that is appropriate to the amount of capital mobilized and the period of each capital source.
* Bank marketing activities
BIDV periodically organizes roadshow programs (selling on the street): to achieve many goals: promote BIDV's image in the most visual, vivid and specific way, thereby expanding the number of customers, exploiting the needs of casual customers.
BIDV cooperates in sponsoring many television and advertising programs, with the goal of spreading BIDV's image to all classes of people.
2.2.2.2. Objective factors
* Economic situation
In 2021, our country's economy has achieved positive results, inflation has initially been controlled at a low level; the macro economy is basically stable, social security is guaranteed. However, business activities still face many difficulties, market purchasing power has decreased, there are many unsold goods in inventory, the real estate market shows signs of warming up but is still in the process of recovery.
difficult period, prices of agricultural products and foodstuffs fluctuated complicatedly... those developments significantly affected the development and economic growth in the district and directly affected the business activities of the bank in general as well as capital mobilization activities in particular.
* Competitive environment
Up to now, our country has 38 commercial banks; 66 100% foreign-owned banks and branches, representative offices of foreign banks and 4 joint venture banks. In addition, there are insurance companies, gold markets, real estate... which are also channels attracting large capital sources from the population. Therefore, there is always fierce competition in capital mobilization activities between banks and other financial companies.
* Savings factor of the population:
In addition to saving money in banks, there are many other investment channels that people can choose from such as the gold market, foreign currency, stocks... especially when the savings interest rate gradually decreases from 7.5%/year to 5.6%/year. However, for a market where gold prices are constantly increasing, the difference is too high compared to world prices; stocks fluctuate strongly, the real estate market has had many measures to overcome difficulties but has not yet recovered due to the impact of the Covid-19 epidemic, the savings channel is still the choice of many people.
2.2.3. Some indicators on deposit mobilization activities
2.2.3.1. Scale of deposit mobilization at branches
In recent years, the capital mobilization results of BIDV - Hai Ba Trung Branch have had many positive changes, the scale growth is consistent with the general situation of the entire banking industry, the development of the economy, growth goes hand in hand with ensuring quality and efficiency. Specifically:
Table 2.2. Scale of capital mobilization from deposits of branches from 2016-2020
TT
Target | 2016 | 2017 | 2018 | 2019 | 2020 | Compare | ||||||||
2017/2016 | 2018/2017 | 2019/2018 | 2020/2019 | |||||||||||
Great number opposite to | Rate (%) | Great number opposite to | Rate (%) | Great number opposite to | Rate (%) | Great number opposite to | Rate (%) | |||||||
1. | Total capital mobilized dynamic | 6,356 | 9,153 | 8,453 | 7,163 | 9,116 | 2,797 | 44% | (700) | -8% | (1,290) | -15% | 1,953 | 27% |
2. | Plan year | 6,100 | 7,500 | 8,300 | 7,300 | 8,500 | - | - | - | - | - | - | - | - |
3. | Plan completion rate plan | 104.2% | 122.0% | 101.08 | 98.1% | 107.2% | - | - | - | - | - | - | - | - |
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(Source: Business performance report for the period 2016-2020) Despite the impact and unfavorable influences of the macroeconomic environment as well as the financial and monetary market, in recent years, the branch has achieved certain results. Deposit mobilization in 2016 grew strongly, completing 104% of the plan assigned by the head office and with that growth momentum, total deposit mobilization at the branch in 2017 reached 9,153 billion VND, up 44% compared to 2016 and completing 122% of the plan. In 2018, the branch's deposit mobilization results decreased by 700 billion VND compared to 2017, still completing 102% of the plan and following the branch's direction. By 2016, total deposit mobilization reached
7,163 billion, down 1,290 billion compared to 2018 and down 1,990 billion compared to 2017 and reaching 98% of the plan, the deep decrease in deposit mobilization was due to the branch implementing the capital management of the Head Office, which was to transfer all deposit mobilization of the Vietnam Development Bank to BIDV Head Office. At the end of 2020, deposit mobilization at the branch reached 9,116 billion VND, up
1,953 billion growth compared to 2019, completing 107% of the assigned plan, the year of deposit mobilization recorded the highest growth in the past 5 years. Along with the growth in scale, the operational efficiency of capital mobilization also increased significantly. Although capital mobilization of credit institutions decreased sharply, capital mobilization of residential deposits increased higher than the average of the system.
The result of capital mobilization after 5 years increased by 2,760 billion and increased by 43% (compared data for 2020/2016) is the great contribution of 130 staff members in the entire branch, specifically the direct business departments such as KHDN1, KHDN2, KHCN and 6 transaction offices which are the branches of the branch.
The following is a chart showing the scale of capital mobilization at Hai Ba Trung branch from 2016-2020.
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
9153
9116
8453
7163
6356
2016 2017 2018 2019 2020
Unit: Billion VND
Figure 2.2: Scale of capital mobilized from deposits from 2016-2022
(Source: Business performance report for the period 2016-2020)
Looking at Figure 2.2, the growth scale of deposit mobilization in the last 5 consecutive years of the branch, we can see that the growth rate has been from 2016, the year the branch has only been in operation for 5 years, since its establishment, it was only separated from 2 transaction offices of the Exchange 1 branch, with an initial deposit capital of more than 2,000 billion and has had initial steps of development. The deposit capital is
The sharp increase in 2016 and 2017 was due to the fact that at that time, Hai Ba Trung branch mobilized idle deposits from the State Bank on a relatively large scale. The scale of capital mobilization has grown steadily for many years and until 2018 and 2019, the total capital has decreased sharply, mainly due to the general policy of the Head Office to concentrate all deposits of large institutions to the Head Office as a focal point. For that reason, the Board of Directors of BIDV - Hai Ba Trung has restructured the branch's customer base to continue to shift towards sustainability, increasing the proportion in quantity as well as efficiency of the residential and economic organization customer base, gradually eliminating dependence on large customers, and increasing net deposit income to be more sustainable. The branch has 6 affiliated transaction offices that have operated effectively and had high growth rates over the past 5 years. These are affiliated transaction offices but operate in different locations and are geographically far from the head office and also have different scales and growth rates over the years.
The following is a chart of the growth in the scale of capital mobilization of Lac Trung Transaction Office, Tran Dai Nghia Transaction Office, Minh Khai Transaction Office, Bach Mai Transaction Office, Tay Son Transaction Office, and Bac Linh Dam Transaction Office from 2016-2020:
1800
1600
1400
1200
1000
800
600
400
200
0
1534
1400
1486
1130
859
757
746
839
782
735
671
503
548
542
596
430
438
522
416 368
431 446
180 154
265
200 194
204
65
111
2016 2017 2018 2019 2020
Lac Trung Transaction Office
Bach Mai Transaction Office
Tran Dai Nghia Transaction Office Minh Khai Transaction Office
Tay Son Transaction Office Bac Linh Dam Transaction Office
Figure 2.3: Deposit mobilization scale of transaction offices from 2016-2020
(Source: Business performance report for the period 2016-2020)
Looking at the chart of the growth scale of capital mobilization at transaction offices from 2016 to 2020, we can see that the growth rate of capital mobilization at the offices is relatively high. Leading is the Lac Trung transaction office, the total capital mobilization in 2016 reached 503 billion and increased steadily in consecutive years at a high level and by December 31, 2020 reached 1,534 billion, an increase of 304% compared to 2016 and accounted for 16.8% of total capital mobilization at the branch. With the scale of capital mobilization increasing dramatically over the years, income from deposit mobilization contributes mainly to the difference in revenue and expenditure of the office and deserves to be a special transaction office for 3 consecutive years 2018, 2019, 2020. Next is Tran Dai Nghia transaction office in 2016 with a relatively modest capital mobilization scale of only 180 billion until 2020, it has skyrocketed to 1,486 billion, with the galloping growth rate of deposit mobilization, Tran Dai Nghia transaction office also contributed a significant achievement of 16.3% to the results of deposit mobilization at the branch, ranking 2nd out of 6 direct business transaction offices under Hai Ba Trung branch. Next are the Bach Mai, Tay Son, Minh Khai transaction offices, which have also been established for a long time, but the growth rate is not high, some offices even have a sharp decrease in the proportion of capital mobilization results contributed to the branch, which is not much, not satisfying the expectations of the management board. Finally, the Bac Linh Dam transaction office is one of the offices established last and upgraded from the Linh Dam savings fund in October 2018, but by December 31, 2020, the scale of capital mobilization at the office has grown significantly, reaching 596 billion, far exceeding the Bach Mai transaction office and approximately equal to the long-established Tay Son office.
It can be said that the capital mobilization scale of transaction offices at Hai Ba Trung branch has grown strongly in recent years. As of December 31, 2016, the capital mobilization scale of transaction offices only accounted for 25% of the total capital mobilization scale of deposits at the branch. By December 31, 2020, the capital mobilization scale of deposits had increased approximately 2.5 times and reached 61% compared to the previous year.
with the total scale of capital mobilization deposits at the branch. This is the result of the efforts of all the staff of the affiliated transaction offices and the drastic management of the branch's Board of Directors, but besides that, there are still some offices that have not tried their best and have not achieved results worthy of the position of the main branch in Hanoi.
2.2.3.2. Structure of deposit mobilization at branches
BIDV's deposit mobilization structure - Hai Ba Trung branch is divided into 2 types: first based on customer target, second based on customer deposit structure.
* Based on customer target:
According to the customer group depositing money into the bank, the structure of capital mobilization will include deposits from corporate customers, economic customers and individual customers. According to this classification, the structure of capital mobilization of BIDV Hai Ba Trung Branch from 2016 - 2020 is shown in the following table:
Table 2.3: Structure of capital mobilization from deposits by customer type from 2016-2020
TT
Target | 2016 | 2017 | 2018 | 2019 | 2020 | Compare | ||||||||
2017/2016 | 2018/2017 | 2019/2018 | 2020/2019 | |||||||||||
Great number opposite to | Rate (%) | Great number opposite to | Rate (%) | Great number opposite to | Rate (%) | Great number opposite to | Rate (%) | |||||||
1. | Total source capital mobilized | 6,356 | 9,153 | 8,453 | 7,163 | 9,116 | 2,797 | 44% | (700) | -8% | (1,290) | -15% | 1,953 | 27% |
2. | Client DCTC | 4,241 | 6,144 | 3,569 | 1,541 | 2,153 | 1,903 | 45% | (2,575) | -42% | (2,028) | -57% | 612 | 40% |
3. | Client TCKT | 439 | 746 | 1,506 | 1,616 | 1,681 | 307 | 70% | 760 | 102% | 110 | 7% | 65 | 4% |
4. | Client individual | 1,676 | 2,263 | 3,378 | 4,006 | 5,300 | 587 | 35% | 1,115 | 49% | 628 | 19% | 1,294 | 32% |
(Source: Business performance report for the period 2016-2020)