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Structure of Mobilized Deposit Sources Classified by Currency Type


high efficiency, on the other hand, PGD implemented measures to promote PGD image, advertise on radio, approach and attract some new businesses to transact at PGD, so the source of deposits mobilized from economic organizations in 2015 increased sharply with a rate of 30.69%, an increase of 30,323 million VND, accounting for 55.24% compared to 2014.

Thus, in the period 2013 - 2015, this deposit source accounted for the largest proportion of the total mobilized deposit source. This source is often large in scale, low in mobilization costs but unstable, depending heavily on the business performance of the partner. Therefore, PGD needs to introduce specific and flexible customer policies, clearly identify potential customers, offer appropriate incentives, and diversify service types to attract businesses to open accounts and conduct transactions at PGD.

2.2.3.2.Structure of deposit sources by currency

Fearing that the local currency may depreciate, people choose to keep money effectively by buying gold, real estate or strong foreign currencies. In order to meet the maximum needs of customers, PGD has continuously deployed many new forms of mobilization, including forms of mobilization by currency: mobilization by domestic currency deposits and mobilization by foreign currency deposits. The structure of mobilized deposits by currency is shown in the following table:

TABLE 2.11. DEPOSIT STRUCTURE BY CURRENCY TYPE

Unit: million VND



Target

2013

2014

2015

Value

Value

Increase

Chief

Value

Increase

Chief

Total funds

send mobilization

175,895

184,415

4.84%

233,776

26.77%

2.Classification by currency

- VND

153,997

165,305

7.34%

212,424

28.5%

Proportion

87.55%

89.64%

90.87%

- Foreign currency (conversion)

21,899

19.11

- 12.74%

21,351

11.73%

Proportion

12.45%

10.36%

9.13%

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(Source: Business results report of ACB Commercial Joint Stock Bank – Hanoi Branch –

Thanh Nhan Transaction Office 2013-2015)


Chart 2.3: Structure of mobilized deposits classified by currency type


(Source: Business results report of ACB Commercial Joint Stock Bank – Hanoi Branch –

Thanh Nhan Transaction Office 2013-2015)

Mobilization by local currency deposits

Based on the data table and analysis chart, we can see that the main source of mobilized deposits of PGD is the source of mobilized deposits in domestic currency. On average, this source accounts for over 80% of the total mobilized deposits and has a fairly good growth rate. In 2014, the mobilized domestic currency deposits increased by 7.34%, equivalent to 11,308 million VND compared to 2013, accounting for 89.64% of the total mobilized capital. In 2015, this source increased sharply with an increase rate of 28.5%, equivalent to 47,119 million VND compared to 2014, accounting for 90.87% of the total mobilized deposits.

In a competitive environment, commercial banks are always ready to offer higher interest rates, PGD has strived to diversify its deposit forms such as Dai Loc savings, Loc Bao Toan savings, promotional savings, prize savings, etc. to attract more customers. In parallel with finding new customers, PGD also offers preferential policies for long-term customers, strengthening their loyalty. Therefore, in the context of fierce competition among banks in the market, the source of mobilized domestic currency deposits is still increasing, accounting for a stable proportion.


Mobilization in foreign currency

Through the table, the source of foreign currency deposits mobilized by PGD has tended to decrease in recent years. In 2014, this source of capital decreased by 12.74% compared to 2013, accounting for 10.36% of the total mobilized deposits. In 2015, the world economy improved, along with the constant efforts of PGD staff, the amount of foreign currency mobilized increased sharply compared to 2014 with an increase rate of 11.73%, equivalent to 2,241 million VND, accounting for 9.13% of the total mobilized deposits.

2.2.3.3 Structure of deposit sources classified by term

According to the deposit term, the structure of mobilized deposits divided by term includes: demand deposits and term deposits. Currently, according to ACB's regulations, term deposits are divided into 3 types: term deposits under 12 months, term deposits from 12 - 24 months and term deposits over 24 months. The structure of mobilized deposits divided by term in the period 2013 - 2015 of Thanh Nhan Transaction Office is shown in the following table:

TABLE 2.12. DEPOSIT STRUCTURE BY TERM

Unit: million VND



Target

2013

2014

2015

Value

Value

Increase

Chief

Value

Increase

Chief

Total deposits

mobilize

175,895

184,415

4.84%

233,776

26.77%

3. Classify by term

- No term

101,590

105,546

3.89%

136,754

29.57%

Proportion

57.77%

57.23%

58.5%

-Term under 12 months

35,321

38,578

14.88%

57,298

41.2%

Proportion

20.08%

22%

24.61%

-Term from 12-24 months

18,897

16,564

-12.35%

14,986

-9.53%

Proportion

10.74%

8.98%

6.41%

- Term over 24 months

20,087

21,727

8.16%

24,738

13.86%

Proportion

11.41%

11.78%

10.58%

(Source: Business results report of ACB Commercial Joint Stock Bank – Hanoi Branch –

Thanh Nhan Transaction Office 2013-2015)


Chart 2.4: Deposit structure by term


(Source: Business results report of ACB Commercial Joint Stock Bank – Hanoi Branch –

Thanh Nhan Transaction Office in 2013-2015) Based on the data table and analysis chart, we see that the source of mobilized non-term deposits accounts for the largest proportion in the total mobilized deposits of the transaction office, followed by the source of deposits with terms of less than 12 months. The sources of funds are classified as

This type of product has been growing over the years.

Non-term deposit source

This source of money is mainly payment deposits of individuals and businesses in the area. In the period 2013 - 2015, this source of money grew strongly. In 2014, the growth rate was only 3.89%, equivalent to 3,956 million VND compared to 2013, accounting for 57.23% of the deposit source, but by 2015 this rate had reached29.57%, equivalent to 31,208 million VND, accounting for 58.5% of total deposits. This achievement is due to the PGD proactively seeking potential customers, offering utilities for the services provided: fast payment, high accuracy, safety and security.

Term deposits under 12 months

This source of money mainly includes term deposits and savings deposits with a term of less than 12 months. Like non-term deposits, this source of money also accounts for a large proportion of total deposits and has a fairly high growth rate. In 2014, this source of money grew by 14.88% compared to 2013, accounting for 22% of total mobilized deposits. Because ACB is one of the


leading commercial banks with high reputation in the market; in addition, the branch carried out many marketing activities, expanding customer relations, so this source of money in 2015 increased at a rate nearly three times higher than the growth rate of the previous year, up 41.2% compared to 2014, equivalent to 18,720 million VND, accounting for 24.61% of the total deposit source.

Currently, short-term deposits are popular with people. This is because the Vietnamese Dong is depreciating, the consumer price index is increasing dramatically, people mainly keep money for consumption or deposit money in banks with short terms. On the other hand, due to the emergence of many new attractive investment channels such as stocks, real estate, short-term deposits can help people be flexible in investing. Short-term deposits account for a large proportion of the total mobilized deposits, posing a challenge for PGDs on how to be proactive in medium and long-term lending.

Term deposits from 12-24 months

This is a source of money including medium-term deposits and is mainly used to finance medium-term investment projects. This source of money accounts for the smallest proportion of the total mobilized deposits of PGD and has also decreased significantly in the past period. In 2014, this source of money decreased sharply by 12.35% compared to 2013, accounting for 8.98% of the total mobilized deposits. By 2015, it decreased by 9.53%, equivalent to 1,578 million VND compared to 2014, accounting for only 6.41% of the total customer deposits. The reason for the sharp decrease in this source of money in recent years is due to the nature of medium-term deposits - deposits with lower interest rates than long-term deposits. When wanting to receive high interest rates and long-term deposits, customers will choose long-term deposits. When the economic situation is still volatile like today, customers will choose short-term deposit solutions.

Term deposits over 24 months

This is a source of money including long-term deposits and used to finance long-term investment projects of PGD. In the period of 2013 - 2015, this form of mobilization of PGD has increased sharply. In 2014, the growth rate was 8.16%, equivalent to 1,640 VND compared to 2014, accounting for 11.78% of total customer deposits. By 2015, the growth rate was up to 13.86%, accounting for 10.58% of total deposits. The source of long-term deposits has grown steadily over the years, showing that the stable source of capital to finance long-term projects is on the rise. In the current difficult economic conditions, PGD's proactive mobilization of


Long-term deposits, maintaining good growth momentum, show that the Board of Directors' direction in deposit mobilization is on the right track.

Looking at the overall structure of deposit sources by term, in 2013 the proportion of non-term deposits was 57.77%, short-term deposits was 20.08%, medium and long-term deposits were 10.74% and 11.41% respectively, in 2014 and 2015 the proportion of non-term deposits, short-term deposits and medium and long-term deposits were 57.73%, 22%, 8.98%, 11.78% and 58.50%, 24.61%, 6.41%, 10.58% respectively. Thus, in general, medium and long-term deposits are much lower than short-term and non-term deposits, which affects the bank's lending capacity. PDG should focus on measures to increase medium and long-term deposits such as increasing deposit interest rates... to increase this deposit source for PGD.

Factors affecting capital mobilization activities at Thanh Nhan Branch

2.2.4.1 Subjective factors

Technology level

Staff and workers at Thanh Nhan Branch are exposed to the most modern and advanced technology, but there are still some limitations such as PDG does not have its own information technology department, and online money transfer and payment packages are still not widely used by customers, causing the loss of a number of customers to the Branch.

Reception level

PGD ​​has paid great attention to the conduct of its staff. All staff of PGD need to have good professional qualifications and good professional ethics, which is one of the necessary requirements to attract customers to PGD Thanh Nhan in the modern economic era. At the end of the working day, some staff are not dedicated to customers coming to PGD, making customers dissatisfied.

Network

In the current economic development, to grasp the customer's taste in the best way, all departments in the transaction office must have close links to support each other thoroughly. Thanh Nhan transaction office is still not closely linked with the transaction offices of the Bank in the area.

Interest rate

The first thing that any individual or economic organization wants to refer to when depositing money in a bank is the interest rate. PGD has set goals to find appropriate interest rates for each type of product and each target.


customers so as not to miss any potential customers when they come to PGD such as savings for settling down, savings for little angels... but PGD must always look for product packages with more attractive interest rates to attract customers.

Form of capital mobilization deposits

PGD ​​has many forms of capital mobilization, deposits and terms, rich, diverse, flexible to serve all customers. However, PGD is still limited in promoting the Bank's product packages, not focusing on specific and clear advice on capital mobilization forms, making customers coming to PGD still confused.

Deposit mobilization structure

PGD ​​should study the market and customer needs to come up with a reasonable capital mobilization structure without affecting costs. Hanoi is the capital city where many large and small businesses are concentrated, so PGD should have policies to attract this customer base.

PGD's reputation and brand

Thanh Nhan Branch has been operating for many years with the quality and reputation it has today thanks to the collective of staff and workers. However, the Branch still has to try harder so that ACB's brand will gain more and more trust from the people. This is a form of promotion for the Branch in particular and ACB Commercial Joint Stock Bank in general.

2.2.4.2 Objective factors

Economic environment

The economic environment will determine people's income. It will then affect the capital demand and the amount of deposits of customers. Therefore, it has a strong impact on the capital mobilization activities of PGD, so PGD Thanh Nhan should have policies to attract traditional customers and new customers with attractive product packages such as savings with high interest rates and capital safety. Moreover, a country's monetary policy will directly affect the capital mobilization activities of banks...

Political and legal environment

To ensure the equitable development of all economic sectors, each country must have a certain institution to regulate and supervise the compliance with the law of all subjects in the economy. Any business activity must be subject to strict regulation and supervision by the law and competent authorities. Adjustment of the State Bank of Vietnam on financial policy


Currency also strongly affects the operation of the bank. Therefore, Thanh Nhan Branch is also affected more or less by these things.

Competitive environment

Located in a favorable and developed economic region, there are many branches and transaction offices of major banks such as Vietcombank, Viettinbank, Lienvietbank,... competing in all aspects. Thanh Nhan Transaction Office must have clear goals and directions to attract customers to the transaction office.

Customer

PGD ​​must understand the psychology of its customers to find the most suitable policies so as not to miss any customers when they come to PGD. High interest rates, capital safety, convenient services, fast and accurate are the top psychological factors that customers come to the Bank. The more customers trust the bank, the more stable the bank's cash flow and inflow will be, creating better conditions for the bank to mobilize capital for itself.

2.2.5 Efficiency of capital mobilization of Thanh Nhan Branch

In today's fiercely competitive economy, capital mobilization is a matter of survival for commercial banks to maintain and improve business efficiency, meet the capital needs of the economy, and bring high profits to banks. In order to expand market share and mobilize more and more deposits from economic organizations and residents, banks compete with each other in all aspects: technology, product and service quality, location, infrastructure facilities... In which, the important factor that needs to be mentioned is the mobilization interest rate.

In the total cost of mobilized capital, the interest expense payable on mobilized capital is an important factor and greatly affects the quality and business efficiency of the transaction office. It accounts for the largest proportion and fluctuates the most. Increasing mobilized capital in the condition that the interest expense payable on mobilized capital is too high will cause difficulties in resolving the output of capital or reduce the bank's profits. Therefore, considering the interest expense payable on mobilized capital and the fluctuation of this expense is considered a regular task in the management of mobilized capital, an important content in assessing the capital mobilization situation of the bank.

The regulation of ceiling interest rates for commercial banks by the State Bank of Vietnam helps the interest rate situation to be quite stable and the temporary interest rate is not a competitive tool for banks. However, ACB Commercial Joint Stock Bank also needs to diversify.

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