ĐẠI HỌC QUỐC GIA HÀ NỘI
KHOA QUẢN TRỊ VÀ KINH DOANH
---------------------
TRẦN THANH BÌNH
SOLUTIONS TO IMPROVE THE COMPETITIVENESS OF
BANK FOR INVESTMENT AND DEVELOPMENT OF
VIETNAM - SO GIAO DICH 1 BRANCH
GIẢI PHÁP NÂNG CAO NĂNG LỰC CẠNH TRANH
CỦA NGÂN HÀNG TMCP ĐẦU TƯ VÀ PHÁT TRIỂN
VIỆT NAM - CHI NHÁNH SỞ GIAO DỊCH 1
LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH
HÀ NỘI - 2020
ĐẠI HỌC QUỐC GIA HÀ NỘI
KHOA QUẢN TRỊ VÀ KINH DOANH
---------------------
TRẦN THANH BÌNH
SOLUTIONS TO IMPROVE THE COMPETITIVENESS OF
BANK FOR INVESTMENT AND DEVELOPMENT OF
VIETNAM - SO GIAO DICH 1 BRANCH
GIẢI PHÁP NÂNG CAO NĂNG LỰC CẠNH TRANH
CỦA NGÂN HÀNG TMCP ĐẦU TƯ VÀ PHÁT TRIỂN
VIỆT NAM - CHI NHÁNH SỞ GIAO DỊCH 1
Chuyên ngành: Quản trị kinh doanh
Mã số: 8340101.01
LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH
NGƯỜI HƯỚNG DẪN KHOA HỌC: TS. HOÀNG ANH TUẤN
HÀ NỘI - 2020
DECLARATION
The author confirms that the research outcome in the thesis is the result of
author’s independent work during study and research period and it is not yet
published in other’s research and article.
The other’s research result and documentation (extraction, table, figure,
formula, and other document) used in the thesis are cited properly and the
permission (if required) is given.
The author is responsible in front of the Thesis Assessment Committee,
Hanoi School of Business and Management, and the laws for above-mentioned
declaration.
i
Date…………………………..
TABLE OF CONTENTS
DECLARATION ........................................................................................................ i
PREFACE ................................................................................................................... 1
INTRODUCTION ....................................................................................................... 3
CHAPTER 1: THEORY OF COMPETITIVENESS OF COMMERCIAL BANKS . 5
1.1. The concept of competitiveness........................................................................ 5
1.2. Factors affecting competitiveness: ................................................................... 6
1.2.1. Macro environment .................................................................................... 7
1.2.2. Industry Environment (Michael Porter’s Five forces model) .................... 9
1.2.3. Enterprise (bank) ...................................................................................... 12
1.3. Competitive evaluation criteria ....................................................................... 16
1.3.1. Criteria for evaluating the competitiveness of enterprises in general ...... 17
1.3.2. Criteria for avaluating the competitiveness of banks in particular .......... 18
1.4. Lessons from improving the competitiveness of banks in the world ............. 24
1.4.1. Lessons from the world financial crisis in 2007 – 2008 .......................... 24
1.4.2. Lessons from developing and improving the competitiveness of world
banks in the current period ................................................................................. 26
CHAPTER 2: CURRENT SITUATION OF COMPETITIVE CAPACITY AT
BIDV SO GIAO DICH 1 BANCH ........................................................................... 29
2.1 Overview of BIDV So giao dich 1 Branch ...................................................... 29
2.1.1 The process of formation and development .............................................. 29
2.1.2 Orgnization Structure ................................................................................ 30
2.1.3 Business results in recent years of So giao dich 1 Branch ........................ 31
2.2 Assessment of competitiveness of BIDV So giao dich 1 Branch ................... 36
2.2.1 Assessment of external factors affecting the competitiveness of BIDV So
giao dich 1 Branch .............................................................................................. 36
2.2.2 Assessment of competitiveness of BIDV So giao dich 1 Branch ............. 42
CHAPTER 3: SOLUTIONS TO IMPROVE COMPETITIVENESS OF BIDV SO
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GIAO DICH 1 BRANCH ......................................................................................... 61
3.1 Trends and forecasts for the banking market in the coming years .................. 61
3.2 Orientation and strategic vision of BIDV ........................................................ 66
3.2.1 Orientation and strategic vision of the entire BIDV system ..................... 66
3.2.2 Objectives and orientation of So giao dich 1 Branch ................................ 67
3.3 Solutions: ......................................................................................................... 68
3.3.1 Overall solutions to improve competitiveness .......................................... 68
3.3.2 Main solutions: .......................................................................................... 72
3.4 Recommendations to the State Bank of Vietnam and Head Office of BIDV . 84
3.4.1 Recommendations to the State Bank of Vietnam...................................... 84
3.4.2 Recommendations to the Head Office of BIDV ....................................... 85
CONCLUSION ......................................................................................................... 87
REFERENCE LIST .................................................................................................. 88
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APPENDIX 1. QUESTIONNAIRE IN ENGLISH .................................................. 89
PREFACE
In a market economy, competition is an indispensable rule to survive and
develop. The trend of international integration and globalization is taking place
strongly and deeply, along with the continuous development of science and
technology with the industrial revolution 4.0 affecting all political and economic
fields social life ... Besides providing opportunities for developing economies like
Vietnam to integrate into the world economy, thereby speeding up economic growth
and technological innovation, Globalization also presents many great challenges,
especially the risk of further economic lag due to limited competitiveness.
In recent years, Vietnam's banking industry has been developing rapidly,
gradually moving deeper into the process of international integration. Vietnam's
participation in the World Trade Organization (WTO), the signing of free trade
agreements, especially the Comprehensive and Progressive Agreement for Trans-
Pacific Partnership (CPTPP), opens up many opportunities and brings many risks
and challenges.
The competition between banks becomes extremely fierce, not only
competition among local banks but also between domestic banks and foreign banks
with strong financial potential, technology, management level. In the past, a series
of famous banks, but with weak operations and unprofitable businesses, were forced
to merge or restructure:
In 2012: Hanoi Building Joint Stock Commercial Bank (Habubank) lost
VND 1,715 billion and was merged into Saigon - Hanoi Bank (SHB).
In 2013: Dai A Bank has a small capital scale, low business efficiency, and
merged with HDBank to increase its scale and operational capacity.
In 2015: Mekong Delta Housing Development Commercial Joint Stock Bank
(MHB) saw a loss of VND 476 billion, incurring a bad debt of up to thousands of
billion VND, so it was merged into the Bank for Investment and Development of
Vietnam ( BIDV); Southern Bank with a bad debt ratio of 55.31% was also forced
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to merge into Sacombank.
Therefore, improving competitiveness is an urgent requirement for banks to
exist, stand firm and develop, and affirm their position in the region and the world.
Improving competitiveness is a vital factor not only for small-sized commercial
banks but also for large state-owned commercial banks such as BIDV,
Vietcombank, Vietinbank ... in the context of international integration. with the
appearance of a series of foreign banks with financial capacity, high management
level, modern technology, and experience ...
At Joint Stock Commercial Bank for Investment and Development of
Vietnam (BIDV), So giao dich 1 Branch is the leading branch, leading the whole
BIDV system. Therefore, improving the competitiveness of BIDV So giao dich 1
Branch in the context of the current market is extremely urgent, is the basis for
pioneering, is a model for BIDV branches to apply, thereby improving improve the
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overall competitiveness of the whole BIDV system.
INTRODUCTION
1. The necessary of the thesis:
In a market economy, competition is an indispensable rule for survival and development. The trend of international integration and globalization is taking place
strongly and extensively, it is necessary for Vietnamese banks to meet the capacity to stand firm and compete with foreign banks.
In recent years, the Vietnamese banking industry has developed rapidly, step
by step moved deeper into the international integration process. Vietnam's
participation in the World Trade Organization WTO, signing free trade agreements, especially the Comprehensive and Progressive Agreement for Trans-Pacific
Partnership CPTPP opens up many opportunities and brings many risks and
challenges. The competition among banks has become extremely fierce, not only
competition among domestic banks but also competition between domestic banks
and foreign banks with strong financial potential. technology, management
qualifications. Over the past time, a series of well-known banks with poor
performance and loss-making business have been forced to merge and restructure.
Therefore, enhancing competitiveness is an urgent requirement for banks to survive,
stand firm and develop, and assert their position in the region and internationally.
Improving competitiveness is vital not only for small-scale commercial banks but
also for large state-dominated commercial banks such as BIDV, Vietcombank,
Vietinbank ... in the context of international integration. with the emergence of a
series of foreign banks with financial capacity, high management skills, modern technology, extensive experience ...
Bank for Investment and Development of Vietnam (BIDV) – So giao dich 1
Branch is a key branch, leading the whole BIDV system. Therefore, improving the
competitiveness of BIDV So giao dich 1 Branch in the context of the current market
is extremely urgent, is the basis for pioneering, is a model for BIDV branches to apply, thereby improving the overall competitiveness of the whole BIDV system.
2. Overview of research situation
There are many articles and studies on the competitiveness of the banking industry, commercial banks in general. However, these articles only research and offer general solutions. The introduction of solutions to improve competitiveness
for each specific bank is different, depending on external factors as well as internal
3
factors and characteristics of each bank.
This topic will assess the actual competitiveness of BIDV So giao dich 1
Branch, thereby offering specific, feasible solutions to be applied in practice at
BIDV So giao dich 1 Branch.
3. Research objectives: evaluating Collecting, and proposing solutions to improve the
competitiveness of BIDV So giao dich 1 Branch.
4. Research subjects - Experience in improving the competitiveness of domestic and foreign
banks.
- Assess the competitiveness of BIDV So giao dich 1 Branch in a
comprehensive and profound manner on all operational aspects
- Analysis of factors affecting the competitiveness of BIDV So giao dich 1
Branch
5. Scope of research: Research on competitiveness, offer solutions to improve competitiveness at
BIDV Exchange 1 in the period from now until 2025.
6. Research method: Methods of statistical analysis
Methods of general analysis 7. Structure of thesis In addition to the introduction, conclusion, references, appendixes; the
content of the dissertation is divided into three chapters:
- Chapter 1: THEORY OF COMPETITIVENESS OF COMMERCIAL
BANKS
- Chapter 2: CURRENT SITUATION OF COMPETITIVE CAPACITY AT
BIDV SO GIAO DICH 1 BANCH
- Chapter 3: SOLUTIONS TO IMPROVE COMPETITIVENESS OF BIDV
4
SO GIAO DICH 1 BRANCH
CHAPTER 1: THEORY OF COMPETITIVENESS OF COMMERCIAL
BANKS
1.1. The concept of competitiveness
Economic competition is a competition between economic actors in order to
have advantages in production and consumption and through which maximum
benefits can be obtained.
In the market economy, competition can take place between actors within the
industry, and can also take place between actors of different industries.
(According to Marxist-Leninist Political Economy - Associate Professor Dr.
Ngo Tuan Nghia Chairman of the Compilation Council in 2019)
Terms of competition:
Competition: According to economist Michael Porter, competition (economy)
is gaining market share. The essence of competition is to seek profit, which is
higher than the average profit that the business has. The result of the competition
process is the equilibrium of profits in the industry in the direction of deep
improvement leading to lower price consequences.
From a commercial perspective, competition is a battle between businesses and
businesses to gain customer acceptance and loyalty.
Competitive advantage: Competitive advantage is the possession of specific
values that can be used to seize opportunities and make profitable business. When it
comes to competitive advantage, it refers to the advantages that a business (micro
level), a country (macro level) have and can have, compared to their competitors.
There is also the term sustainable competitive advantage, which means that the
business must continually provide the market with a special value that no
competitor can provide.
(According to Competitive Advantage - Michael Porter)
According to Baumol, Panzar and Willig (1982), a firm's competition is
assumed to include not only all its current competitors but also potential
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competitors ready to enter the industry one day. Future. Therefore, an enterprise that
has a competitive advantage or maintains a competitive advantage is that it is
implementing a strategy without any existing or potential competitors at the same
time. (According to The Literature On The Conformity of the Concept of Entry
Barriers in Competition Strategy Theory - Barney, McWilliams, & Turk, 1989).
Competitiveness: Competitiveness of an enterprise is an expression of the
strength and advantages of the enterprise compared to competitors in the best
satisfaction of customer requirements to earn higher and higher profits. by
exploiting, using force and advantages inside and outside to create products and
services that attract consumers to survive and develop, gain higher profits and
improve their position compared to with competitors in the market.
Competitiveness of the business is created from the power of the business and is
the internal element of each business. Competitiveness is not only calculated by the
criteria of technology, finance, human resources, corporate governance organization
... but the competitiveness of enterprises is associated with the advantages of the
products that the business offers. market. The competitiveness of enterprises is tied
to the market share it holds.
Competitiveness can also be understood as the ability to survive in a business
and achieve some desired results in terms of profit, price, income or quality of
products as well as its ability to declare. exploit existing market opportunities and
create new markets.
1.2. Factors affecting competitiveness:
A business in its operation process is influenced by its surroundings and its
impact. Therefore, the competitiveness of enterprises depends not only on the
enterprise itself but also on objective factors from the environment around the
business. Factors affecting competitiveness of enterprises are divided into 3 basic
groups: macro environment, industry environment (according to Michael Porter),
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enterprises.
1.2.1. Macro environment
Macro environment is the operating business environment, including factors
affecting the existence and development of enterprises: economy, politics and law,
socio-culture, nature, technology. ...
Economic factors:
This is a factor that has a great influence and is the most important factor in the
business environment of any business including banks. Economic factors include
the growth of the economy, interest rates, exchange rates, inflation rates.
A growing economy will create momentum for businesses to grow, increasing
population demand leading to an increase in the rate of investment capital
accumulation in the economy, a high level of investment attraction, and
competition. The picture is getting more and more fierce. The large market is a
good opportunity for businesses to take advantage of opportunities, rise to dominate
the market, and also a challenge for businesses with no clear goals, no reasonable
strategies.
On the contrary, when the economy is in a recession, unstable, the psychology
of people is panic, the purchasing power of people declines, businesses have to
reduce output, must find ways to keep customers, win customers, sales, Profit will
also decrease, while the competition in the market will become more fierce.
Factors such as interest rates, inflation rates, exchange rates ... also affect the
financial capacity of the business.
Political and legal factors
Politics and law are the foundation for economic development as well as the
legal basis for businesses to do business in any market.
Politics and law have a great impact on the development of any business,
especially import-export businesses.
Political stability and legal system will create a favorable environment for
enterprises' long-term business activities, which is a basis for ensuring favorable
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and equal conditions for enterprises to participate in competition.
Without political stability, there will be no stable, long-term and healthy
economy. The law regulates directly the operation of every business in the
economy. Enterprises always need a stable economy, a strict and clear legal
environment, protecting the interests of businesses, individuals and organizations in
the economy.
Social factors
Social factors include lifestyle, customs, consumer attitudes, educational level,
religion and aesthetics. These factors determine the behavior of customers,
consumers, their views on products and services, thereby directly affecting the
results of production and business activities of the business. To survive and
compete in the market, businesses must follow the same social factors.
Understanding and assessing social factors is the basis for enterprises to conduct
market segmentation, thereby offering business strategies and solutions to provide
products and services that meet the needs. of the market, improving its
competitiveness.
Natural factors
The natural geographic conditions of each region will create favorable or
difficult conditions for enterprises to compete with favorable geographical locations
in the industrial center or the nearest source of high-quality raw materials and
manpower. near important roads ... will create opportunities for businesses, reduce
costs.
Technology factors:
Science and technology have a strong impact on the competitiveness of
enterprises through deciding the price and quality of products and services. Today,
along with the 4.0 technology revolution, science and technology are considered as
one of the most important factors, determining the survival of enterprises as well as
the competitiveness and dominate market share. Science and technology
development affects the nature of competition. Previously, competition was mainly
on selling prices. Now, in addition to selling prices, the quality of products and
8
services is focused by businesses. The same type of products and services,
customers are willing to pay a higher amount for products and services that bring
more utilities, added value, and higher technology content.
On the other hand, science and technology help businesses process information
quickly, accurately and efficiently. In this day and age, any business that wants to
succeed needs to have a system of collecting, processing, storing and transmitting
information accurately, adequately, quickly, effectively on the market and for
competitors.
1.2.2. Industry Environment (Michael Porter’s Five forces model)
Industry environment includes enterprises in the same industry engaging in
production and business activities. The industry environment is also understood as
the competitive environment of enterprises, according to Michael Porter including
the basic elements: Competitors, buyers (customers), suppliers, potential
competitors, substitutes. (Competition Strategy Book - Michael Porter )
Competitors:
In a business environment where many businesses offer a range of products and
services that will lead to the inevitable competition, businesses come up with
strategies to attract customers and increase market share. Enterprises need to know
their competitors so that they can have an effective competition strategy. The nature
and intensity of competition among enterprises in the industry depend on the
following industry characteristics:
- The number of competitors, the number of large companies: The number of
large companies increases competition, because there are more firms while
the total number of customers and resources remain constant. The
competition will be stronger if these firms have the same market share,
leading to competition for market dominance.
- Growth rate of the industry: When the market grows slowly, businesses
must compete more aggressively to capture market share. In a high growth
market, businesses are still able to increase their revenue, possibly only due
9
to the expansion of the market.
- Fixed costs: High fixed costs usually exist in a economies of scale, which
means that costs decrease as production scale increases. When the total cost
is only insignificantly larger than the fixed costs, businesses must produce
close to the total capacity to achieve the lowest cost per unit of product.
Thus, businesses will have to sell a huge number of products on the market,
and thus must compete for market share, leading to increased competition
intensity.
- High cost of storage or perishable product characteristics. This feature makes
manufacturers want to sell goods as quickly as possible. If at the same time
other manufacturers want to sell their products, the competition for
customers will become fierce.
- Low cost of goods conversion. When a customer easily switches from one
product to another, the level of competition will be higher because
manufacturers have to try to retain customers.
- Level of product differentiation: Low level of product differentiation will
lead to a high level of competition. On the contrary, if the products of
different enterprises have markedly different goods characteristics, the
competition will be reduced.
- The ability to change strategy: The ability to change strategy is high when a
business is losing its market position, or has the potential to gain more
profits. This situation also increases the competitiveness of the industry.
- High "exit" barriers. This feature makes businesses incur a high cost, if they
want to give up on producing products. So businesses are forced to compete
to survive. This barrier makes a business forced to stay in the industry, even
when the business is not very favorable. A common barrier is the specificity
of fixed assets. When factories and equipment are highly specialized, it is
difficult to sell those assets to other industries.
Buyers (customers)
Customers are the ones who decide the consumption of products and services of
10
enterprises. Pressure from customers mainly comes in two forms: asking for
discounts or asking for better service quality. This makes businesses compete with
each other, leading to the loss of industry profits. The pressure from customers
comes from the following conditions: when the number of buyers is small, when the
buyer purchases a large number of products and concentrates, when the buyer
accounts for a large proportion of the seller's output, the products are not
differentiated and are basic products, customers threaten to integrate backward,
industry products are not important to the product quality of buyers, customers are
well informed.
Provider:
(For the bank the provider will be the input: customers deposit money ...)
Supplier may dominate business operations due to dominance or monopoly
power of some suppliers.
Suppliers can assert their power by threatening to raise or lower the quality of
products and services provided. These changes will affect production costs, product
quality, profits, thereby affecting the competitiveness of enterprises.
Pressure from suppliers will increase if: only a small number of suppliers; When
replacement products are not available; When a supplier's product is an important
input to the customer's operation; When a supplier's product is different and
appreciated by the buyer's competitors; When the buyer incurs a high cost due to
changing suppliers ...
Potential competitors:
Potential competitors are those who will either be new to the industry in which
the business is operating or in the manufacturing of alternative products and
services. When new businesses come in, competition will be fierce. Old businesses
will then have the advantage of products, capital, fixed costs, network of
distribution channels ... will react fiercely to new businesses. However, new
businesses often have more advantages in technology, product quality, methodical
marketing strategies, applying many measures to gain market share ... will be a
11
great pressure for existing businesses, create a higher competitive advantage.
Therefore, old businesses will have to have effective and timely competition
solutions in order not to lose market share.
Alternative products
Replacement products and services are similar products and services that
customers can choose to replace the products and services that businesses are
providing. Substitute products will reduce the profits of the industry because the
highest price is controlled. Without paying attention to substitutes, businesses will
not catch up with the increasingly diverse and abundant changes of the market.
1.2.3. Enterprise (bank)
The competitiveness of enterprises in addition to the external factors as
mentioned above depends greatly on the business itself. The competitiveness of
enterprises is the combination of available and mobilizable enterprise resources
including human resources, financial resources, physical resources, organizational
management and experience. , trademark…
Human resource:
Human resource is a very important factor, bringing creativity in the
organization. Manpower level is reflected in the management level of leaders at all
levels, the professional qualifications of staff members, the level of cultural
ideology of members in the enterprise. This is a factor creating diverse products and
services, high gray matter content, bringing many utilities, high quality services ...
thereby increasing the prestige and reputation of products, services, businesses. will
create a firm position in the market and achieve sustainable development.
An enterprise with strong human resources in terms of professional skills,
technical awareness, labor enthusiasm will be able to become a leading enterprise,
although other factors are not favorable.
In a service business such as a commercial bank, the human element plays an
important role in demonstrating the quality of the service. The staff of the bank is
the person who directly gives customers the feeling of the bank and its products and
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services, while creating customers' trust in the bank. These are important
requirements for the bank staff, thereby helping the bank capture market share as
well as increase business efficiency to improve its competitiveness.
Financial Resource
Financial resources is the most important factor determining competitiveness as
well as a leading indicator assessing the size and capacity of enterprises.
Any activities of the business: production, business, project investment,
procurement of assets, equipment, distribution, advertising of products and services
... are also calculated and based on the financial situation. of the business.
Enterprises with strong financial situation will be able to invest in modern
technology and machines, provide quality products and services to the market,
lower production costs, and promote advertising and production activities. products,
thereby increasing competitiveness, increasing profits for businesses. On the other
hand, businesses with good financial resources will easily attract investors to
contribute capital, increase the ability to raise capital from the stock market, from
shareholders and capital-contributing members of the enterprise, and spend gain the
trust of our customers. Enterprises with weak financial capacity may be annexed,
merged with other enterprises or withdrawn from the market, went bankrupt ...
For banks, financial resources clearly show the vital role to the operation of
banks. The nature of the bank plays an intermediary role in the economy,
mobilizing capital to carry out lending operations, so the capital is directly related to
the competitiveness of the bank. The bank's capital sources include its own capital
and mobilized capital. A bank with high competitiveness is a bank with abundant
capital, able to mobilize capital from many sources with the lowest cost. When the
capital is abundant, the bank can actively use the source for lending, investment
activities, etc., bringing great profits, while ensuring liquidity at all times.
Facilities
The system of modern facilities and advanced technology suitable to the scale of
business activities of the enterprise will contribute to improving production and
business capacity, labor productivity, raising the quality of products and services,
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reducing product costs leads to a corresponding price reduction in the market,
thereby helping to increase competitiveness for businesses. Today, technology has
become a secret weapon in the competition of businesses.
Physical resources include:
- System of factories, headquarters, machinery and equipment ...
- Distribution network: branches, shops, vehicles, agents ...
- Technological and technical system
- Supply: affects cost
- Geographical location: impact on production and transport costs ...
For the operation of banks, the network of branches, representative offices,
transaction offices will help the bank expand its operation to many areas. The large
number of bank branches not only helps the bank reach more customers, attract
more capital for the bank, but also makes it more convenient for customers to use
banking services such as money transfer, receipt. payments…
In the banking sector, technology is increasingly playing a role as one of the
banks' most important competitive advantage resources. The role of technology in
banking activities is shown:
Banking technology includes not only professional technologies such as
electronic payment systems, retail banking systems, ATMs, etc. but also
management information systems and systems. risk report ... within the bank.
Especially in the context that the information technology industry in general and
banking technology in particular develop rapidly today, the ability to upgrade and
innovate technology is also an important indicator reflecting the technological
capacity of a Bank.
The application of technology is one of the factors that makes the difference
between banks, creating the power to increase the competitiveness of commercial
banks. Today, commercial banks are developing high technology applications, and
using translation products of technological nature as a measure of competition,
especially in the field of payment. and other electronic products and services.
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Management Capacity:
Each business must have a separate organizational structure, appropriate to the
characteristics of business activities. The organizational structure should be set up
in a flexible manner, adapting to changes in business environment and other
fluctuations.
In any business, the role of leader and manager is very important, deciding the
success or failure of the business because they hold all the resources of the
organization, outline the strategic and main directions, policies, work plans,
policies, and decisions that affect the entire business.
Enterprises with a reasonable organizational structure, good management skills
will operate efficiently, save many costs, lower costs of products and services,
increase profits and improve competitiveness.
For banks - a field with lots of risks and when risks occur, it will have serious
consequences, the management, control and management capacity of leaders plays a
very important and clear role in ensuring the efficiency and safety in banking
activities. Leadership vision is a key factor for the bank to have a sound business
strategy in the long term.
Experience
Experience will help businesses accurately predict market demand in each
period, so that businesses will be proactive in production and business activities,
avoiding inventory status, capital stagnation.
However, the experience needs to be applied flexibly depending on the specific
conditions and circumstances of the market and enterprises, which are suitable and
practical and feasible.
Brand and reputation:
Brand and reputation are considered an important intangible resource that
creates the competitive power of every business. Brands have the ability to greatly
influence the consumption of products and the provision of services by businesses.
Formed primarily from activities, products, services and communications with
15
stakeholders, reputation is a result of market capacity that has been valued by
stakeholders for many years. A well-known and valuable brand is an application of
reputation to form a competitive advantage.
To get a brand, businesses need to work long and continuously. A brand
accepted by customers is both a success. If you can, this is a big competitive
advantage that your opponent can hardly get.
As an industry where the quality of products and services is not much different,
the uniqueness and distinction to distinguish between different banks is very
difficult to create, so the reputation and reputation become a In the intangible
resources are very important, creating great advantages for banks in competition. If
a bank is more reputable and reputable than its competitors, it is capable of
expanding market share, increasing sales, contributing to its profits.
Operations in the banking sector are always associated with that bank's
reputation factor, consumer psychology is always a decisive factor to the survival of
the bank's operation with the chain effect due to psychology. of consumers.
Therefore, the reputation and reputation of the bank is a huge internal factor,
which determines the success or failure of that bank in the market. Increasing
market share, expanding operation network, increasing income depends greatly on
the reputation of the bank.
However, the reputation of the bank is only created after a long time through the
form of ownership, staff, the application of high-tech products, the full and
satisfactory response. worthy of consumer needs.
Today, in addition to their reputation and reputation, banks must also show their
interconnectedness in their business activities, the event of a bank cooperating with
a reputable credit institution and other reputation in the market, or the close
cooperation between banks or financial institutions, big economic groups also
contributes to enhance the competitiveness of that bank in the market.
1.3. Competitive evaluation criteria
Assessing the competitiveness of enterprises is a necessary job, because each
enterprise can set competitive objectives and strategies suitable to the current
16
operational status of its business.
1.3.1. Criteria for evaluating the competitiveness of enterprises in general
The most obvious criterion to evaluate competitiveness for enterprises is the
financial indicators. Some evaluation criteria:
- Business growth rate by revenue
Revenue growth rate = (Revenue of this period - Revenue of the previous
period) / Revenue of the previous period x 100%
- Business growth rate by profit
Profit growth rate = (Profit in this period - Profit in the previous period) / Profit
in the previous period x 100%
- Market share of the enterprise
+ Market share of enterprise = Enterprise turnover / Total revenue consumed in
the market.
However, this criterion is difficult to guarantee the accuracy when determining it
because the enterprise market is very large, making it difficult to accurately
determine the revenue of other enterprises in the market.
+ Enterprise market share = Business revenue / Revenue of the strongest
competitor.
(Choose from 2 to 5 strongest enterprises depending on the characteristics of each
competitive field).
This is the indicator that most accurately reflects the competitiveness of
enterprises, supporting the planning of production and business strategies,
- Criteria for assessing profitability of enterprises:
This is an indicator reflecting the efficiency of production and business activities
of the enterprise. The higher the profitability of the enterprise indicates that the
enterprise has good operational and management capacity, brings high profits, and
is competitive in the market.
+ Profit / turnover ratio (ROS) = Profit after tax / Revenue
+ Profit / equity ratio (ROE) = Profit after tax / Equity
+ Profit / total assets ratio (ROA) = Profit after tax / Total assets of the
17
enterprise
1.3.2. Criteria for avaluating the competitiveness of banks in particular
a) Criteria to evaluate the competitiveness of a bank For banks, in addition to the evaluation criteria as above-mentioned enterprises,
due to their specific business activities, there are a number of separate
competitiveness assessment criteria for banks.
Financial capacity:
The financial capacity of the bank plays a very important role, reflecting the
strength and business ability of a bank at a given time. Indicators of financial
capacity of the bank:
- Profitability:
This is the most important indicator for every business including banks,
reflecting the efficiency of the bank's business operations. When the bank operates
efficiently, profitably, and large profits are left, it will be possible to set aside
reserve funds, invest in expanding its network of offices, transaction offices and
system investments. technology, improve reputation, create trust for customers,
thereby improving the competitiveness of the bank. Criteria for assessing
profitability of the bank: Return on equity (ROE), return on total assets (ROA),
return on revenue (ROS) ...
- Own capital and capital adequacy ratio:
Equity is a self-owned resource that a bank owner owns and uses for business
purposes in accordance with the law; equity capital is also created in the business
process in the form of retained earnings. Although accounting for a small
proportion of the total capital of the bank, it is the first basic factor determining the
existence and development of a bank. On the other hand, equity capital is the most
stable and long-term capital source, creating the bank's reputation, trusting
customers and maintaining solvency in case of losses. The own capital is also the
basis for calculating the prudential ratios and financial indicators in banking
18
business activities.
According to the regulations of the Basel Committee (Basel Banking
Supervision Committee), the own capital of a commercial bank must reach at least
8% of the bank's total risk of conversion (CAR) .
- Quality of property:
Assets that reflect the use of the bank's capital, including cash, deposits at other
banks, investments, credit (loans), fixed assets, and other assets. Among them,
credit is the most important factor, reflected in the size of outstanding loans and the
quality of outstanding loans. Banks with good quality of outstanding loans (group 1
loans) will have effective business operations, not having to make provision for
risks, so their financial capacity is stronger. Banks with poor debt quality, high bad
debt ratios and bad debts will lead to the risk of setting up risk provisions, even
leading to capital loss, thus reducing financial capacity and capacity. operational
forces and competitiveness in the market, even banks have had to go bankrupt,
merge ...
- Scale and ability to raise capital:
The ability to raise capital reflects the reputation and capacity of the bank. A
reputable bank in the market, with a variety of products to raise capital, many
modern utilities, competitive interest rates ... will attract customers to send money.
Normally banks that are established for a long time and have capital contributed by
the State ... will be trusted by customers to choose to send money.
- Liquidity:
Ratio of immediately payable assets / ratio of payable assets immediately
- Ability to prevent and combat risks:
Banking business is exposed to many risks: credit risk (risk when the bank
cannot fully recover loan principal and interest), market risk (interest rate risk,
exchange rate risk, ...), liquidity risk (risk of insolvency in the bank) and operational
risk (risk due to internal processes, people and systems). When the ability to prevent
risks is low, in case of risks, banking activities will face difficulties, reducing the
19
bank's competitiveness. The bank's risk level is usually measured by 2 indicators:
+ CAR (Capital Adequacy Ratio) is the ratio of equity / total assets at risk of
conversion (According to Basel Credit Supervisory Board). CAR must meet 8% of
international standards. The higher the ratio, the stronger the financial capacity, the
greater the ability to create credibility and trust with customers.
+ Credit quality: overdue debt ratio / total outstanding loan. The lower the ratio,
the better the credit quality, the healthy financial situation and the low credit risk.
Operational capacity:
The main activities of commercial banks include: mobilizing capital, credit and
providing other products and services. The ability of the bank to carry out the above
activities is one of the criteria to assess its competitiveness.
- Ability to raise capital:
Capital mobilization is an important task of commercial banks, deciding
business scale. Banks with large capital mobilization ability have the prospect of
expanding their market share in credit, investment and other services in order to
increase profits and improve their competitiveness. The bank's ability to mobilize
capital is assessed through a number of criteria such as capital mobilization market
share, capital mobilization growth rate, competitive deposit interest rate,
diversification of term deposits and agreement. convenient when dealing, effective
marketing programs ...
- Credit and investment activities:
Credit and investment activities are the key business activities of commercial
banks to generate profits, especially in developing countries like Vietnam. Good
commercial credit and investment activities will bring a lot of profits to the bank,
develop its ability to raise capital, improve business efficiency and thereby enhance
its competitiveness. . Some commonly used criteria for evaluating credit activities
of commercial banks:
+ Outstanding loan growth (loans) = (Outstanding loans this year - Outstanding
loans in the previous year) / Outstanding loans in the previous year x 100%
+ Structure of outstanding debt = Short-term outstanding debt (Medium and
20
long-term outstanding debt) / Total outstanding debt
+ Quality of outstanding debt: Bad debt ratio = Outstanding bad debt / total
outstanding debt
- Developing other products and services:
Each bank has its own goal of developing activities and services to give itself an
advantage in such a product or service. As the economy grew, so did banking
services to meet the increasing and diverse requirements of customers. This activity
brings a significant income for the bank and contains few risks. In developed
countries, income from service intermediaries accounts for over 50% of the bank's
income. The diversification of social life together with the progress of science and
technology requires commercial banks in addition to price competition, to
constantly explore and develop new and diversified types of services. diversify
banking products and categories to better meet customers' needs, increase market
share and increase profits for banks.
Proportion of revenue from services = Service income / total profit
Technology applicability:
Today, banks are developing high-tech products, using technology-translated
translation products as a measure of competition, especially in the field of payment
and other products. other electronics products.
The indicators reflect the bank's technological capacity: Quantity and quality of
current technology; ability to upgrade and innovate technology,
Human Resources:
The competitiveness of human resources of commercial banks must be
considered on the following criteria:
- Regarding the number of employees:
In order to expand the network to increase market share and serve customers
well, banks must have a sufficient workforce. However, it is also necessary to
compare this indicator in relation to the network system and business performance
to recognize the labor productivity of employees in the bank.
- Regarding labor quality:
21
The quality of human resources in a bank is reflected in the following criteria:
+ Education level of labor force: including education level and supporting skills
such as foreign language, information technology, communication, presentation,
decision making, problem solving, etc. Criteria This is quite important because it is
a platform showing the ability of employees in the bank to learn and grasp the job to
perform professional skills.
+ Administrative skills for managers; professional qualifications and
professional skills for employees: this is an important criterion determining the
quality of services that banks provide to customers. The Bank needs a team of good
executives to help the apparatus operate effectively and a staff with high
professional skills, capable of advising customers to create trust with customers and
press. bank icon. These are the key factors that help banks compete for customers.
Therefore, the quality of human resources plays an important and decisive role in
the competitiveness of a bank. The quality of human resources is a result of past
competition and it is also the competitiveness of the bank in the future. Having a
good team of executive officers and staff, who are capable of creating and
implementing strategies will help the bank operate stably and sustainably. It can be
affirmed that the sufficient and quantitative human resource is an expression of the
Bank's high competitiveness.
Management and organizational structure
Often, assessing the management, control and management capacity of a bank is
considered to evaluate the standards and strategies that the bank develops for its
operations. High operational efficiency, growth over time and the ability to
overcome uncertainties are evidence of the bank's high governance capacity.
Some criteria showing the bank's management capacity are:
- Business strategy of the bank: including marketing strategies (building
prestige, brand), market segmentation, product and service development, ..
- Organizational structure and ability to apply effective bank management
- Growth in business results of banks
22
Branch network
The network of branches, representative offices and transaction offices will help
the bank expand its coverage to many areas. This index is calculated by the number
of branches, transaction offices, POS mounting points, ATMs, etc.
Reputation of the bank
Reputation and reputation of the bank are internal factors that determine the
success or failure of the bank. The reputation of the bank is only created after a long
period of time by fully and adequately meeting the needs of consumers, creating
trust for customers.
b) Criteria to assess the competitiveness of a bank branch
A bank branch is a dependent accounting unit of a bank, performing business
functions, bringing profits: capital mobilization, lending, and other banking
products and services: payment, guarantees, trade finance, cards ...
Because it is a dependent unit of a banking system, so the number of indicators
to evaluate the competitiveness of a bank branch will be less than the criteria for
evaluating the competitiveness of the whole banking system. Some criteria that
cannot be applied to a bank branch such as: Return on equity (ROE), rate of return
on total assets (ROA), equity and capital adequacy ratio. Yes (CAR), liquidity ...
Some criteria for evaluating the competitiveness of a bank branch will be similar to
the criteria of the bank's competitiveness, specifically:
• Financial capacity:
Profitability: profit-to-revenue ratio (ROS), profit growth rate over the years.
• Operational capacity:
- Ability to mobilize capital
- Credit operations
+ Growth rate of outstanding loans (loans) = (Outstanding balance of this year -
Outstanding balance of previous year) / Outstanding balance of previous year x
100%
+ Debt structure = Short-term debt balance (Mid-long-term debt balance) / Total
outstanding loans
23
+ Quality of outstanding loans: NPL ratio = Bad debt / total outstanding loan
- Develop other products and services:
Proportion of revenue from services = Service income / total profit
• The ability to apply technology
• Human Resources:
- The number of employees
- Labor quality
• Management qualifications and organizational structure
- Business strategy of the bank branch: including marketing strategy (reputation
building, branding), market segmentation, product and service development, ..
- Organizational structure and ability to apply effective banking governance
- Growth in the bank's business results
• Branch network
This target is calculated according to the number of transaction offices, POS
installation points, ATMs ...
• Reputation of the bank branch
1.4. Lessons from improving the competitiveness of banks in the world
1.4.1. Lessons from the world financial crisis in 2007 – 2008
The world from 2007 to 2008 witnessed the global financial and economic crisis
with the collapse and bankruptcy of a series of large banks, falling stock, and
devalued currencies. major in the US and many European countries, stemming from
the financial crisis in the US. The root cause of the crisis was the explosion of
subprime loans. Subprime loans are loans to people with low creditworthiness such
as unstable jobs, low social status, bad credit history, potential risks. repayment of
debts due.
The banks promote subprime loans from oversupply of mobilized capital,
subprime lending is a solution to solve all excess capital to maximize profits.
Although subprime loans have a high level of risk, but in return, interest rates are
very attractive, bringing many profits to the bank.
When the economy operates ineffectively, rising interest rates create a burden of
24
repaying debts for low-income and unemployed people, the risk arises when a series
of borrowers are squeezed and sold assets. The value of collaterals such as real
estate declines leading to irrecoverable bank loans. A series of banks suffered losses
of billions of dollars such as Citibank (21 billion USD), Merrill Lynch (25 billion
USD), UBS (18 billion USD), Morgan Stanley (10 billion USD), JP Morgan (2.2
billion USD). , Bear Stearns (US $ 2 billion), Lehman Brothers (US $ 1.5 billion),
Goldman Sachs (US $ 1.3 billion). Lehman Brothers went bankrupt after 158 years
of operation and one of the top 5 leading investment banks in the US. Merrill Lynch
must resell to Bank of America. Goldman Sachs and Morgan Stanley have also
shifted from an investment banking model to a general bank model so that they can
mobilize capital through savings deposits, to ensure the existence of the market.
Washington Mutual was sold to JPMorgan Chase after the stock price fell 95% in
value.
The US government must also rescue another big bank, Citigroup. Accordingly,
the Government has injected an additional $ 20 billion to the bank as well as a
guarantee of a total value of $ 306 billion for subprime loans of Citigroup.
In Europe, two major British banks, Northern Rock, Bradford & Bingley, were
nationalized, while another large bank, HBOS, was acquired by another competitor.
The three largest banks of Iceland, Kaupthing, Landsbanki and Glitnir, are also
nationalized.
Many other banks in Europe would also have disintegrated without the timely
intervention of the government such as Fortis and Dexia Bank of Belgium, Hypo
Real Estate of Germany...
So it can be seen that the banks in the US and Europe fall into failure, even
leading to bankruptcy, besides some objective causes from the market, the main
causes stemming from management policies and strategies. wrong business, namely
loose management in lending operations. Excessive lending for subprime loans in a
short time leads to the loss of credit quality control, losses, and loss of capital for
banks. This is one of the most expensive lessons for any bank in the course of
business operations, competition in the market, especially in the context of
25
integration and development today.
1.4.2. Lessons from developing and improving the competitiveness of world banks
in the current period
a) US
The United States is the world's largest economy with a highly developed
banking system compared to other countries. Since the financial crisis of 2007-
2008, banks in the US have had a strong recovery and transformation, figuring out
directions, strategies for sustainable development as well as improving their
competitiveness. One of the largest American banks (Big Four) today is Bank of
America.
As of 2019, Bank of America has total assets of US $ 2,434 billion, revenue of
US $ 96.39 billion; net income of 28.1 billion USD. Bank of America (BOA)
consistently ranks among the best banks in the world.
The overall strategy of BOA is to maximize profits and grow revenue through
business models and intensive growth strategies, minimizing costs. Among BOA's
business models, online banking is a way to maintain and strengthen
competitiveness through technological innovation. BOA's goal is to grow strongly,
increasing market share with major competitors such as JPMorgan Chase,
Citigroup, and Wells Fargo.
Strategically located as one of the largest financial service banks, BOA operates
in a diverse range of commercial banking, investment banking, asset management
and insurance industries.
One of BOA's business strategies is to provide products and services that bring
added value to customers. Customers can access financial data sources through
BOA's website system and mobile banking application to use online services. Based
on these strategies, BOA's competitive advantage is strengthened through its online
operations. This business model optimizes BOA performance by increasing
customer convenience through online options. The introduction of advanced
information technologies through this business model helps BOA optimize
transaction processing speed and operational efficiency, increasing customer
26
satisfaction with its financial services. .
Besides, one of the common strategies to improve BOA's competitive advantage
is cost control. Cost control requires targeting the low cost of providing financial
services to maximize your profits.
Another strategy for increasing competitive advantage for BOA is the
differentiation and focus strategy. BOA provides high quality services to make a
difference. With the advantage of being one of the largest banks in the world, BOA
strongly penetrates the market, strengthening the development and expansion of
new customers of many different subjects.
Along with that, BOA focuses on developing product diversification, constantly
providing new financial products and services, developing markets, to ensure the
competitive growth of financial services business.
b) HSBC
HSBC is one of the 10 largest banks in the world, based in London, England.
HSBC is a leading international bank with high market access. HSBC maintains a
privileged position in high growth markets, especially in Asia and the Middle East
with assets of US $ 1.4 trillion in 2019. The competitive strategies and market
expansion of HSBC during the past time are implemented by:
Invest in developing products and services related to payment and cash
management, which are the key products and services with outstanding facilities of
HSBC.
Expanding the development of trading networks with 64 international markets
accounting for 90% of GDP, global trade.
Improving financial strength HSBC is a strategic advantage of HSBC. HSBC
maintains a strong capital source and high liquidity.
Perform customer care, support customers when making transactions.
HSBC carried out restructuring according to 3 contents: Restructuring to grow
by reshaping the ineffective operations of the Group; Reinvest capital by
restructuring growth opportunities and strengths, including Asia, the Middle East,
the UK ...; Create a simpler, more effective and empowered organization that
27
ensures that we can work together more effectively and serve our customers better.
HSBC has won the following awards: Best Global Trading Awards 2019; The bank
is the market leader in global and commercial finance; Best Asian private bank 2019.
c/ Japan (Mitsubishi UFJ -MUFJ)
MUFJ is the fourth largest bank in Japan in the world, established on January 1,
2006, after the merger of Tokyo-Mitsubishi Bank, Ltd. and UFJ Bank Ltd. MUFG
is one of Japan's three "megabanks" (along with SMBC and Mizuho)
MUFJ's operations include retail banking, corporate banking and investment
banking, the core of Mitsubishi UFJ Financial Group.
Constantly expanding network with 772 transaction offices in Japan and 76
offices overseas. MUFJ's customers, in addition to traditional Japanese customers,
also have many foreign businesses.
MUFJ creates competitive advantage through the following strategies:
Professional in real estate business: MUFJ includes professionals with extensive
experience in not only real estate business, but also real estate finance, global
market and other businesses. MUFJ has policies to retain talented people, often with
the sharing of experience and knowledge in the organization.
Experience: MUFJ inherited many years of business experience from the former
Mitsubishi Trust Group (established in 1927), MUFJ has a system of information
for many customers and large projects.
Expanded third party network: MUFJ has set up an expanded third party network.
This network includes property managers, leasing managers, financial institutions, etc.
MUFJ focuses on developing credit activities, lending to many projects and
28
businesses.
CHAPTER 2: CURRENT SITUATION OF COMPETITIVE CAPACITY AT
BIDV SO GIAO DICH 1 BANCH
2.1 Overview of BIDV So giao dich 1 Branch
2.1.1 The process of formation and development
Bank for Investment and Development of Vietnam (BIDV) was established on
April 26, 1957, is the oldest commercial bank in Vietnam.
BIDV's history of construction and maturation is a path associated with each
historical period of national defense and construction of Vietnam. BIDV contributed
to the recovery and economic recovery after the war (1957-1965); carrying out the
strategic task of building socialism, fighting America's destructive war in the North,
supporting the South, fighting to unify the country (1965-1975); Building and
developing the country's economy (1975-1989) and Implementing the renovation of
banking activities to serve the industrialization and modernization of the country
(1990 - present). BIDV always plays the role of a shocking force on the monetary
and financial front, serving the country's development investment.
Currently, BIDV continues to be one of the largest banks in Vietnam with total
assets as of the end of 2019 reaching VND 1.46 million billion; equity capital of
over VND 60,000 billion; capital mobilization scale of 1.3 million billion dong, up
12%; credit balance: 1.1 million billion dong, up by 12%. Profit before tax in 2019
reached VND 10,768 billion, an increase of 14% compared to 2018. The ratio of
return on assets (ROA) reached 0.61% and the return on equity (ROE) reached over
15%.
In 2020, BIDV aims to grow by 14.5% and credit by about 13%. The
consolidated profit before tax target is 12,600 billion dong, up by 17%. NPL ratio is
controlled lower than 1.6%
BIDV So giao dich 1 Branch (BIDV SGD1) is the largest branch of BIDV
system, established on March 28, 1991 for the purpose of solving overall problems
29
for BIDV at that time:
- Evaluation and lending of development investment projects spread across the
country or along routes such as railway projects, roads, electricity, post and
telecommunications, etc.
- Serving construction organizations operating in a region or the whole country.
- BIDV has just entered commercial activities, so it needs to have a "special
branch" to test new operations, thereby drawing experience and directing the
implementation of the whole system.
Over nearly 30 years of operation, So giao dich 1 Branch has become a strong
brand, a reliable address of corporations, corporations, organizations and
individuals. With a long history and good service quality, So giao dich 1 Branch has
been trusted by many units, State economic groups and large enterprises such as:
Investment and Business Corporation. SCIC State capital, Vietnam Oil and Gas
Group, Viettel Military Telecommunications Group, Vietnam National Oil and Gas
Group, Vietnam Coal and Mineral Industry Group (TKV), Vietnam Electricity
(EVN) , Vietnam Textile Corporation…
For BIDV system, So giao dich 1 Branch has always played a leading and
pioneering role, being one of the leading units of BIDV system in terms of
performance and labor productivity, which has been approved by the State. awarded
noble titles "Labor Hero", "Labor Medal 1, 2, 3".
2.1.2 Orgnization Structure
So giao dich 1 branch consists of 20 units, including 05 affiliated Transaction
Offices, the total number of branch staff to date is 288 people, of which officers
with university and postgraduate degrees account for over 98% of total cadres.
The current organizational structure of the Branch is as follows: The
organizational structure of the branch is divided into blocks, in blocks with sections
and divisions. The organizational structure of a Branch consists of:
- Board of Directors: Director and 7 Deputy Directors
- Customer Management Division: Corporate Customers 1,2,3,4,5 Department
30
and Individual Customer Department 1, 2.
- Risk Management Division: Risk Management Department 1, Risk
Management 2
- Operations: Credit Administration Department, Customer Transaction,
Treasury Management and Services
- Internal management: Financial Planning Department, Administration
Department
- Dependent blocks: Quoc Tu Giam, Ton Duc Thang, Lotte, Kham Thien
transaction offices
2.1.3 Business results in recent years of So giao dich 1 Branch
In recent years, So giao dich 1 branch has always promoted its role as a leading
branch in the BIDV network as well as one of the largest bank branches in the
capital. Business operations of Exchanges 1 have sustained growth and expansion in
terms of capital mobilization, credit scale, service revenue, especially profit, with
strong growth in 2019. reached VND 1,168 billion, an increase of nearly 19.79%
compared to 2018.
Summary of business targets of So giao dich 1 branch in the last 3 years:
Unit: billions VND
STT
Target
2017
2018
2019
% 2018/2017
% 2019/2018
32,969
37,720
14.41%
45,189
19.80%
1
19,900
23,263
16.90%
27,765
19.35%
2
0.09% 0.075%
-16.67%
0.08%
6.67%
3
208
26.06%
279
34.13%
165
4
Deposit at the end of the period Credit Blance at the end of the period NPL (Non – Performing Loan) Ratio Profit from banking service
Total Profit before tax
975
12.72%
1,168
19.79%
865
5
31
Profit of BIDV So giao dich 1 Branh from 2015 to 2019
Profit form 2015-2019
1,168
1,200
975
865
1,000
850
752
800
600
400
200
0
2015
2016
2017
2018
2019
Deposit:
Deposit activities have grown steadily and increased over the years with an
average growth rate of 17% in the last 3 years. In the development trend associated
with international integration, closely following the direction of BIDV
Headquarters, in addition to maintaining the traditional customer base, So giao dich
1 Branch has focused on Deposit activities and development of individual customer
base associated with sustainable growth.
Unit: billions VND
STT
2017
2018
2019
1
Customer type Deposit from Financial Institutions
2 Deposit from enterprises 3 Deposit from individuals
TOTAL
4,616 23,078 5,275 32,969
3,772 26,404 7,544 37,720
3,163 31,632 10,393 45,189
32
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
2017
2018
2019
Deposit Structure Chart (1-2-3)
Credit:
Credit activity is the strength and also the core activity of So giao dich 1 Branch
which has been growing quite well over the past time with an average growth rate
of 18.1% in the last 3 years. Along with the expansion in the size of outstanding
loans, the quality of lending activities was also focused and improved when the bad
debt ratio accounted for a very small proportion of total outstanding loans,
averaging 0.08% of total outstanding loans full branch.
- Credit scale and structure:
The credit scale of So giao dich 1 Branch is constantly growing over the years
and is the largest credit branch in the Northern area of the BIDV system. Credit
33
balance at the end of 2019 of the Branch was VND 27,765 billion
Credit Balance Chart
Credit Balance
27,765
30,000
23,263
25,000
19,900
17,560
20,000
15,692
15,000
10,000
5,000
0
2015
2016
2017
2018
2019
- Regarding credit structure:
+ According to customers:
The branch has implemented the policy of expanding the retail credit scale,
finding customers, implementing many policies to attract and reach customers.
Structure of outstanding loans to economic organizations / retail outstanding loans
is 85% / 15%.
+ By loan term:
With a customer base concentrated primarily in the leading businesses in the
economy, has an important role in the cause of industrialization and modernization
of the country, contributing to promoting the economy of development in both
breadth and width. Depth of capital, the capital needs of these enterprises are
medium and long-term capital, leading to the proportion of medium and long-term
outstanding loans in the previous period, which remained above 60% of total
outstanding loans. However, in the past 5 years, the credit structure by term has
been significantly improved compared to the previous period, shifting towards
reducing the medium and long-term ratio, focusing on promoting short-term loans
by finding seeking to develop business and business customers to lend working
34
capital for production and business activities to regularly increase the ratio of short-
term debt, accordingly, the ratio of medium- and long-term outstanding loans only
remain below 50% of total outstanding loans.
+ Credit structure by industry:
In line with BIDV's industry-oriented credit as well as other credit directives,
So giao dich 1 Branch has strictly complied with the Head Office's regulations on
controlling lending for business investments. real estate and securities led to
significant changes in credit structure. By the end of 2019, the Branch's outstanding
loans were concentrated in several key areas such as processing and manufacturing
industries (29%), wholesale, retail, repair of cars and motorcycles (19%),
construction (20%), production and distribution of electricity, gas, hot water (10%)
... and outstanding loans for the real estate business have fallen below 5%.
- Regarding credit quality:
Outstanding loans in group 1 (standard debt) of the Branch reached 96% of the
total outstanding loans. This shows that the credit balance of the Branch mainly
focused on reputable, capable and effective customers to limit risks, increase credit
efficiency and quality. At the same time, the debt ratio of Group 2 of the Branch has
also decreased significantly over the years, currently only at nearly 4%. Regarding
the bad debt ratio, the branch with low NPL ratio accounted for only 0.08% of the
total outstanding loans, showing that the Branch always ensures the growth target
associated with credit quality control.
Service
Towards the operation of a modern commercial bank, the service activities of
So giao dich 1 branch have been focused on developing and there has been a strong
and comprehensive development in both quality and quantity, the lines New modern
services tend to grow higher than traditional service lines.
Net revenue from services has witnessed a remarkable growth, reaching a high
profit. The proportion of revenue from translation accounts for an increase in the
profit of the whole branch, increasing from 19.08% in 2017 to 23.89% in 2019.
35
Details of specific products and services are as follows:
Unit: billion VND
No
Content
2017
Proportion
2018
Proportion
2019
Proportion
47.35
28.7%
54.45
26.2%
66.75
23.9%
1
31.69 8.25
19.2% 5.0%
39.56 9.50
19.0% 4.6%
56.55 12.67
20.3% 4.5%
2 3
24.75
15.0%
36.97
17.8%
57.50
20.6%
4
6.60
4.0%
9.98
4.8%
14.73
5.3%
5
Guarantee Service Payment service Treasury service Trade finance service Card services and electronic banking
6 Other service
10.06
6.1%
10.47
5.0%
11.19
4.0%
36.30
22.0%
47.07
22.6%
59.61
21.4%
7
165
100%
208
100%
279
100%
865
975
1,168
19.08%
21.33%
23.89%
Foreign currency trading and derivatives Total service revenue Profit before tax Service Revenue/Profit before tax (%)
2.2 Assessment of competitiveness of BIDV So giao dich 1 Branch
2.2.1 Assessment of external factors affecting the competitiveness of BIDV So
giao dich 1 Branch
a) Macroeconomic factors
The world economy in recent years had a good growth due to a number of major
countries with good recovery such as the US, Japan, India, and Brazil, but the
economy in 2019 began to decline compared to 2018. GDP growth in 2019 was
lower than in 2018 (2.6% compared to 3.2% in 2018 according to Citi Research);
inflation fell to 2.4% (from 2.7% in 2018). Investment and consumption decreased
slightly, but remained the main growth driver. Along with that are the positive
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effects from the 4.0 technology revolution and strong restructuring countries.
However, in 2019 the economy has faced many risks and challenges: The US -
China trade war risk causes low trade growth; financial market risk increased due to
differentiation and psychological factors; China's growth slowed down; Geopolitical
risks (US - Iran, Brexit, ...), climate change, terrorism, epidemics ... are
complicated. Especially in 2020, the Covid 19 epidemic is booming, causing
transport and tourism activities to stop, oil prices, gold prices fluctuate, the stock
market plummets, the global economy will suffer. drastically decreased.
In recent years, Vietnam's economy has achieved a higher growth rate than the
average growth rate of the world economy. GDP growth in the years 2018-2019 is
all over 7%. The economy not only achieved high growth, but also continued to
shift the economic structure towards industrialization and modernization. The share
of the GDP of the agriculture, forestry and fishery sector decreased from 17% in
2015 to 13.96% in 2019, while the share of the service sector increased from
39.73% of in 2015 to 41.17% in 2018 and 41.64% in 2019; The proportion of
industry and construction sector remained stable at 33 - 34.5% from 2015 to 2019.
Total investment capital for development of the whole society continues its
positive growth trend. In 2019, development investment increased by 10.2%,
bringing the total investment to 33.9% of GDP.
Investment in the FDI sector has maintained a fairly good growth in recent
years; In 2019, the total FDI capital reached 38.02 billion USD, up 7.2% over the
same period.
In terms of macro stability and inflation control, the State Bank (SBV) has
actively and flexibly operated the monetary policy, closely coordinated with fiscal
and other macroeconomic policies to controlling inflation, stabilizing the macro-
economy, contributing to economic growth; the credit institution's liquidity was
guaranteed and had redundancy, the money and foreign exchange market was stable
and smooth.
Inflation is controlled by implementing well and synchronous monetary, credit
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and fiscal solutions as well as a flexible coordination mechanism between fiscal and
monetary policies. The average annual CPI decreased from 4.74% in 2016 to 3.54%
in 2018; in 2019, down to 2.79%.
In the context of increasing international interest rates (the Fed has increased
interest rates many times), the State Bank has synchronously operated monetary
policy solutions to stabilize interest rates, contributing to macroeconomic stability
and support reasonable growth.
A rather special point in the SBV's way of managing the exchange rate
compared to the past is that it has used marketable tools rather than administrative
imposing tools. This shows the determination to pursue a flexible central exchange
rate mechanism and market orientation of the banking industry. As a result, the
exchange rate was maintained stably, the market liquidity was guaranteed, foreign
currency transactions took place smoothly, and foreign exchange reserves were
strengthened.
Vietnam's merchandise trade balance hit a record surplus of $ 9.9 billion in
2019, surpassing the closest peak of $ 9 billion in 2017.
However, 2020 is forecast to be a difficult year for the world economy in
general as well as for the Vietnamese economy when the global economy is being
affected by the Covid 19 epidemic , Vietnam's economy still has growth potential.
This is the basis for businesses in general as well as banks in particular to have
development opportunities.
This is the basis for businesses in general as well as banks in particular to have
opportunities to develop, including BIDV So giao dich 1 Branch.
b) Political and law factor
Vietnam is considered one of the countries with the most stable political and
security environment in the world. The legal system is regularly revised to suit the
development of the economy. Especially, since Vietnam's accession to WTO,
economic policies and laws are more and more suitable, creating conditions for
domestic enterprises to develop and integrate as well as create conditions for many
enterprises foreign investment in Vietnam. The socialist-oriented market economy
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is increasingly effective.
In the banking sector, the State has issued policies and regulations to create a
stable and safe business environment, encourage healthy competition, uphold the
law and respect the rules of the market. The State aims to develop the system of
credit institutions in the direction: domestic credit institutions play a key role,
operating in a transparent, competitive, safe, and effective manner based on
technology, advanced banking management, in accordance with operating standards
according to international practices, dynamic and creative to adapt to the
liberalization and globalization process; to meet the growing demand for financial
and banking services of the economy. Thus, Big Four banks including BIDV,
Vietcombank, Agribank, and Vietinbank are identified as the key players in the
entire banking system. This is an advantage for these banks, including BIDV So
giao dich 1 branch in attracting customers, continuing to develop, and build
reputation in the banking market. c) Technological factor
Today's technology plays a key role in enhancing the competitiveness of banks.
Industrial revolution 4.0 with the advent of a series of new technologies is strongly
impacting the socio-economic development of each country, including technologies
such as virtual reality (VR), Internet things (Internet of Things), 3D printing, big
data (Big Data), artificial intelligence (AI) are gradually being applied to all areas of
socio-economic life. This opens up many opportunities but also many challenges for
banks in developing new and modern products and services with outstanding utility
features and rapid product delivery speed. , exactly. Banks are forced to promote
digital banking if they want to survive and develop.
d) Competitors
In Vietnam, there are currently 49 banks, including:
- 4 banks with 100% state capital: Agribank, GPBank, Oceanbank, CB
(Construction Bank)
- 31 joint stock commercial banks: ABBank, ACB, North Asia, Bao Viet, BIDV,
Dong A, Eximbank, HDBank, Kien Long, Lien Viet, MB, MSB, South Asia, NCB,
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OCB, PGBank, Pvcombank, Sacombank , Saigonbank, SCB, Seabank, SHB,
Techcombank, TPBank, VIB, Viet Capital Bank, Viet A, Viet Bank, Vietcombank,
Vietinbank, VPBank.
- 9 100% foreign owned banks: ANZ, Hong Leong Bank, HSBC, Shinhanbank
Vietnam, Public Bank Vietnam, CIMB, Woori, UOB
- 2 joint venture banks: VRB, IVB
- 2 Policy Banks: VBSP, VDB
- 1 cooperative bank: Co-opbank
There are also 49 branches of international banks operating in Vietnam:
Citibank, BNP Paribas, KEB Hana, Mizuho, SMBC ...
With such a number of banks, especially the emergence of a number of foreign
banks, competition in the Vietnamese banking market is taking place very
drastically.
BIDV So giao dich 1 Branch has certain advantages as the largest branch of one of
the four "Big 4" banks in Vietnam: BIDV, Vietcombank, Vietinbank, Agribank. Of these
four banks, only Agribank is now 100% state-owned, the rest have been equitized, but
the State still holds shares and a dominant role. The Government of Vietnam has also
determined that this group of State-owned commercial banks will continue to play a key
role in terms of size, market share, and ability to regulate the market.
Although Agribank is still leading in terms of loan and deposit size, but in terms
of business efficiency. Behind Agribank in terms of loans and deposits are BIDV,
Vietinbank, and Vietcombank. However, Vietcombank is the bank with the highest
profitability as well as the lowest NPL ratio.
Currently, this group of four banks has a competitive advantage in capital
mobilization, and products for corporate customers such as project finance credits ...
because these are banks with strong scale and financial potential. .
BIDV So giao dich 1 Branch regularly has to compete to maintain and develop
customers with branches of other Big 4 banks, especially Vietinbank and
Vietcombank, with very low lending interest rates.
In addition, in recent years, the trend of retail banking has developed strongly
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when Vietnam's retail market is very potential with over 96 million people, and is
the 15th most populous country in the world. The group of other domestic
commercial banks that are constantly rising together with the emergence of foreign
banks with potentials, experiences and technology has led to fierce competition in
the retail banking segment. These banks are considered to be more advantageous
than Big Four in terms of retail banking products when continuously providing
products and services with modern, innovative technology, and superior utilities.
outstanding. Some banks such as VPBank, Techcombank, VIB ... the retail banking
segment is the most profitable for the bank. Many private banks to retain customers
have implemented many innovative strategies: in addition to providing banking
services, these banks also coordinate with other retailers to offer or sell premium
products. treat such as beauty care packages, health care, supermarket voucher ...
Recently, the emergence of financial intermediary payment institutions (Fintech)
... with many new financial services has significantly affected the market share of
commercial banks. Fintech companies bring many new convenient products and
services with low cost, simple and convenient transactions, especially in the field of
online electronic payment such as Momo, Onepay, 123pay ... E-wallet service
linked with The bank also developed strongly in both quantity and transaction
value.
e) Customers and suppliers (depositors)
Along with the development of the economy, the trend to limit the use of cash in
Vietnam, the number of customers wishing to use banking products and services is
increasing, especially in Hanoi and other cities. big street. This opens up
opportunities for banks to expand and develop customers. However, with the
appearance of many banks, customers have the right to choose which banks have
high deposit interest rates, low interest rates, low service fees, and good quality
products and services. BIDV So giao dich 1 Branch is under pressure from
customers, including existing customers and new customers, when customers
always ask the bank to apply the appropriate interest rates and fees. compete with
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other banks.
The bank's operations heavily depend on the mobilization of input deposits.
Similar to the pressure from customers wishing to borrow money and use banking
products and services, depositors also put pressure on banks, especially during
times of bank capital decline. decrease, the market deposit interest rate increases.
Some VIP customers with large deposits often ask the bank to apply a deposit
interest rate higher than the normal listed interest rate, and other preferential
policies ...
2.2.2 Assessment of competitiveness of BIDV So giao dich 1 Branch
Competitiveness of BIDV So giao dich 1 branch is assessed mainly according
to the criteria applied to the assessment of the competitiveness of a bank branch as
outlined in section 1.3.2.
a) Financial and operational capacity
BIDV So giao dich 1 Branch is the leading branch in BIDV system in terms of
operation scale as well as business efficiency. The branch's profit has continuously
increased over the years, in the years from 2015 to 2019, the average profit growth
rate reached 11.8% / year, of which profit in 2019 reached 1,168 billion VND, up
nearly 20% compared to 2018. The profit level of the branch of Transaction 1 alone
accounted for nearly 11% of the profit of the whole BIDV system (with nearly 200
branches), equivalent to the profit of a medium-sized commercial bank. in Viet
Nam. BIDV So giao dich 1 Branch is also the branch with large scale of capital
mobilization and credit balance, high growth rate of outstanding loans, reasonable
structure of loan balance by maturity, bad debt ratio is checked. control, product
lines of banking services were promoted ...
The specific assessment of financial capacity and operational capacity of BIDV
Branch of the Transaction Center is analyzed and specified in Section 2.1.3 above.
b) Human resources
Up to now, the total number of staff members of the branch is 288, in which the
Strengths:
leadership of the branch consists of 8 people: The Director is in general charge and
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07 Deputy Directors are assigned to each block and according to each business to
operate activities. As the leading branch of BIDV system, human resources of
BIDV So giao dich 1 Branch is considered to have the following strengths:
- The number of staff is highest in the entire BIDV system, meeting the
expansion of banking operations in a large scale.
- Good quality of staff: The number of staff with bachelor's and postgraduate
degrees accounts for 97.8%; in which university accounts for 75.3%; 22.5%
masters. Staff and staff of Exchange 1 are well trained according to professional
expertise, qualified and qualified to meet working requirements. Staff are young,
dynamic, enthusiastic, with the average age of the whole branch is 30 years old. The
staff have a progressive spirit, always have the spirit of self-training to improve
their qualifications, have a sense of responsibility at work.
- Due to the advantage of the central area of the country, the qualified staff are
trained in professional skills, soft skills, and trained in a challenging and dynamic
environment, contributing to improving professional capacity.
- The branch also regularly sends staff to study, foster, and organize training
courses to invite leading experts on on-the-spot training to improve professional
qualifications and update knowledge promptly. , the latest information in the
banking and finance sector, meeting job needs.
- The branch has issued motivational mechanisms to reward according to sales
and results in the professional areas and deployed motivational mechanisms to
direct sales staff. Thereby, creating motivation to motivate staff to try to complete
the assigned business plan in the best way, bring the most profit.
Weaknesses:
- Due to a large proportion of young cadres, many cadres are inexperienced in
their work, have limited soft skills, are not seasoned, and have collisions in search,
marketing and development. customers in the context of increasingly fierce market
competition.
- The staff's time for customer care, information inquiry to deeply grasp as well
as finding new customers to expand retail/wholesale development at the Branch is
limited, some officials are not really active in advising leaders in finding and
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developing new customers.
- A part of customer relations officers still follow the old mindset, mainly aimed
at providing credit products, not really innovating, fully aware of the responsibility
of the Customer Relations officer. for all customer-related activities. Not paying
attention to sales, still passive and waiting for customers to transact.
c) Technology
Strengths:
Taking advantage of BIDV's IT system with a larger and more modern scale
than some other large banks in Vietnam: IT infrastructure, stable security, well-
equipped and increasingly consolidated; SIBS core banking system operates
relatively better than banks with similar size and using SIBS system of Siverlake
(VCB, Vietinbank).
Deploy e-banking applications, card applications, payment-service applications,
Back Office applications, data storage and report management systems, and other
applications. effectively support the needs of customers and businesses.
Weaknesses:
The technology system still has many applications providing specific functions
according to the different requirements of the professional units at BIDV, not yet
integrated with each other; Therefore, it will be difficult in administration,
management and operation.
The supporting tools for the development of the retail banking system are
lacking and limited: difficulties in creating / adding new channels, new products;
good tools to support customer relationship management have not been deployed;
have no tools to support marketing activities; not yet support the provision of high-
end products and services to individual customers.
d) Facilities, business network
Strengths
- The branch is headquartered at Tower A Vincom, 191 Ba Trieu, Hanoi, is the
central location of the capital with a concentration of population, many agencies and
businesses ... This is also one of the commercial centers. trade, shopping and
services largest in Hanoi. Therefore, business customers as well as individual
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customers easily come to transact at branches.
- The facilities and equipment for the Branch's business activities are always
modern, timely invested and supplemented.
- The branch has set up a system of nearly 20 ATMs at some central points,
crowded with transactions and nearly 200 POS machines installed at stores and
shops in many locations in the city.
Weakness
- The number of transaction offices of the branch currently has only 5 transaction
offices: Hoa Binh Transaction Office, Quoc Tu Giam Transaction Office, Kham Thien
Transaction Office, Lotte Transaction Office, Ton Duc Thang Transaction Office.
e) Trademark
Competitiveness of brand name of BIDV So giao dich 1 branch associated with
the BIDV brand name, is evaluated on 3 aspects: (i) The level of identity, brand
health; (ii) Perceived brand name from customers and (iii) BIDV brand identity
image in network point system.
Content
/ potential
identity brand
Weaknesses - The brand identity rate is still low individual among new customers who have not used BIDV's products and services.
Brand and health
- Having not established competitive advantages, clear brand differences compared to competitors
Customer experience
Strengths - Being a strong brand name with high brand awareness and health index among corporate customers, domestic and foreign financial institutions and customers who are using BIDV's products and services - Being a state-owned commercial joint stock bank with communication easy to establish credibility, with customers. So giao dich 1 Branch is the biggest branch of the BIDV system - Create good faith in growth and superior intelligence compared to other banks
- Lack of characteristics of a bank serving individual customers: young, dynamic, innovative, friendly => The rate of main banking usage and consideration of bank usage is still low.
- Demonstrating the seriousness and responsibility of a large bank. - Brand image: easy to recognize to a - Brand image: not outstanding, quality
Brand image
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group of customers who have been using products and services.
- Showing attributes "successful" "steady" and "mature".
of transaction space is not uniform and uniform, prominent at transaction points - Still affected by the following characteristics: abstract, rigid, afraid to change (BIDV logo from 1991 to present)
In addition to the above factors, based on the actual banking business situation,
the competitive factors of BIDV So giao dich 1 are also concretized by the
following factors:
- Interest and fee policy
- Products and services
- Marketing, customer care and marketing
This is considered as a competitive tool of banks today.
f) Interest and fee policy
Interest rates and fees of So giao dich 1 Branch depends on the general operating
policy of BIDV Head Office, however, for each customer, interest rates and fees are
flexibly applied to suit the benefits each customer brings to the branch.
Deposit rate:
Deposit rates comparison table listed at some banks in March 2020
Unit: %/year
Bank
Demand deposit 0,10 0,10 0,10 0,20 0,50 0,50 -
01 month 4,30 4,30 4,30 4,30 4,75 4,75 4,75
03 month 4,75 4,70 4,75 4,75 4,75 4,75 4,75
Term deposit 09 month 5,30 5,10 5,30 5,40 7,60 6,90 7,20
06 month 5,30 5,10 5,30 5,30 7,50 6,85 7,00
12 month 6,80 6,60 6,80 6,80 7,80 7,95 7,40
18 month 6,80 - 6,70 6,80 7,80 7,60 7,60
24 month 6,80 6,80 6,80 6,80 7,80 7,60 7,60
36 month 6,80 6,50 6,80 - 7,80 7,60 7,60
-
4,65
4,75
6,70
6,80
6,90
7,30
7,40
7,40
BIDV Vietcombank Vietinbank Agribank Bắc Á Bảo Việt Đông Á Maritime Bank MBBank Nam Á Bank NCB
0,20 0,50 0,30
4,40 4,75 4,50
4,75 4,75 4,75
6,00 6,80 7,50
6,30 6,90 7,55
7,40 7,80 8,00
6,90 7,50 8,15
7,60 - 8,30
7,30 7,50 8,30
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OCB Ocean Bank SCB SHB VIB
0,50 0,50 0,50 0,20 -
4,60 4,75 4,75 4,35 4,65
4,75 4,75 4,75 4,55 4,65
7,00 6,55 7,10 6,60 6,90
7,10 6,15 7,10 6,70 6,90
7,20 7,55 7,50 6,80 -
7,30 6,95 7,70 7,10 7,50
7,50 7,05 7,55 7,20 7,50
- 7,15 7,55 - 7,50
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- Strengths:
The current interest rate for raising listed capital of BIDV is in the group of Big
Four banks (state-owned commercial banks or the state holding dominant shares
including BIDV, Vietcombank, Vietinbank, Agribank) at most of terms. Similar to
other banks, however higher than Vietcombank. In addition, BIDV Branch 1 also
applies an additional interest rate for a number of terms applicable to customers
with large deposit balances ... so the deposit interest rate is quite high, ensuring a
high interest rate. security to be competitive with other banks.
- Weaknesses:
To ensure efficiency, in the condition of excess capital, at some point the interest
rate of BIDV So giao dich 1 Branch is less competitive than other commercial
banks, especially joint stock banks; Therefore, attracting more new depositors has
been difficult, some existing customers have withdrawn money and switched to
joint stock commercial banks with higher interest rates.
For the deposit interest rate in USD: Currently, BIDV So giao dich 1 is currently
listing the USD interest rate equal to the ceiling rate prescribed by the State Bank
(0% / year), but some rival banks are still implementing foreign currency derivative
deposit products or other forms of promotions to receive deposits with higher
interest rates from 2.5-2.8% / year.
Lending interest rate:
- Strengths:
BIDV So giao dich 1 Branch always complies with the regulations of the State
Bank and belongs to the group of banks with competitive interest rates and credit
fees, lower than the group of joint stock commercial banks and at the same level or
at times lower than other state-owned commercial banks.
The lending interest rate is applied for each product line, each loan term: project
investment loans, home loans, credit line loans ... regularly updated according to
market developments to ensure competitiveness for credit products. This is one of
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the Branch's advantages to reach and attract new and effective credit customers as
well as maintain large existing customers who have credit relations with many other
banks.
Providing loans to priority subjects as regulated by the State such as small and
medium enterprises, exporting enterprises, agricultural and rural production
enterprises, supporting industries ... low interest rates.
- Weakness:
Short-term USD lending interest rate is less competitive than foreign banks and
VCB, Vietinbank, so it affects the access to a number of large export customers,
indirectly affects the fee collection of products and services. related such as
payment, trade finance ..
Product and Service Fee
- Strengths:
The fee of the products and services of BIDV So giao dich 1 Branch is at the
same level as other banks, there is no big difference; Particularly, some products
and services for financial institutions and retail have relatively competitive fees
compared to other banks in the market: Payment products for financial institutions
have relatively competitive fees. Compared to other payment channels in the market
(multilateral / bilateral payment service fees are only 10% -15% compared to
CITAD payment channel, lower than VCB Money, equal to 20% of Vietinbank's
bilateral payment service) ); The premium price of insurance products through
Bancas channel is relatively competitive compared to other banks, especially BIC-
Binh An products with a fee rate of only 0.3% -0.48% (equivalent to Vietinbank
and only about compared with Vietcombank and Agribank); E-banking products
have a fee that is considered reasonable, suitable for the customers' spending and
market level.
- Weaknesses:
Some products belonging to large service lines (guarantee, payment) are having
higher fees relative to other banks; Setting high fees may contribute to increase the
proportion of service fees from these service lines, but it can also cause a decrease
49
in the attractiveness when attracting new customers to use the service. Specifically:
Fee for money transfer to different systems, different provinces / cities (0.07%)
is equivalent to Agribank but is higher than Vietinbank, Vietcombank (0.05%).
Issuing letters of guarantee for collateral and assets under 100% (2.5%) is higher
than that of Vietinbank, Agribank (2%), VCB (1.8%).
The applicable bond underwriting advisory service fee is 1.4-2% / issue volume
- relatively competitive. However, the fee applicable to low-risk customers is 0.7-
1.2% / volume, which is higher than the general market level and higher than the
level of Securities companies are currently offering the same clients (usually
between 0.3-0.5% / issue volume).
In addition, BIDV So giao dich 1 Branch does not have many flexible and
attractive fee incentives for large and particular customers like some banks are
applying; For example: VCB reduces the fee for foreign currency payment by 20%;
Vietinbank, HSBC apply guarantee fee <1% ...
g) Products and services
- Strength:
The current core product portfolio of BIDV So giao dich 1 Branch is basically
relatively complete when compared to the product portfolio of competitors in the
market, to meet the needs of customers. . Specifically:
So giao dich 1 is providing a variety of banking products and services from
traditional products and services to modern banking products and services for
institutional and individual customers. So giao dich 1 Branch is also the leading
branch in the implementation of new products and services of BIDV.
The portfolio of deposit products is relatively diverse in terms of terms, interest
payment terms and term interest rate mechanism for customers to choose from. In
addition, So giao dich 1 Branch promptly deployed a number of specific products to
meet the maximum needs of customers and markets in each specific period;
regularly deploy promotional programs, diversifying incentives, large-scale prizes,
high winning rate, and competitiveness compared to the general market.
The portfolio of loan products is relatively complete, meeting the needs of many
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different types of customers, the products are quite competitive in terms of loan
amount, loan term and method. In addition, BIDV So giao dich 1 Branch has
always been one of the pioneer BIDV branches in the development of products
under the direction of the Government and the State: implementing credit packages
with preferential interest rates by the Head Office. BIDV itself issued to encourage
credit growth in priority areas, government social housing credit program, rice
purchase loan program, loan support program for offshore fishing, owner initiative
and creativity in building and implementing the link package of 4 Houses ...
In addition to products and services similar to its competitors, BIDV So giao
dich 1 Branch also offers a number of products that are considered pioneers in the
market such as: Multilateral payment - Interbank payment currency on Vietnam's
first web-based platform, bilateral electronic payment with the State Treasury
(BIDV is the first officially deployed commercial bank), electronic tax payment
with the General Department of Taxation (BIDV is the commercial bank selected
by the General Department of Taxation the first pilot), collecting online tuition fees
for educational institutions, collecting road fees for the Registry Department,
implementing modern professional products such as derivative products.
Product and service portfolio for corporate customers of BIDV So giao dich 1 Branch
Deposit
1 1.1 Demand Deposit Flexible Deposit 1.2
1.3
Deposits accumulate automatically
Main features of the product Demand deposit with interest payment term first, periodical and interest later Deposit with term by day, not round week / month / year Term deposit products, under which BIDV is authorized to automatically debit the customer's current account at BIDV upon meeting the condition of the balance on the payment deposit account as agreed to Contract deposit accumulation automatically
1.4
Specialized deposits
Deposit products opened to manage and use the money on the account for the right purposes as customers request or at the request of state management agencies, including: general purpose, specialized collection, specialized business securities business, specialized in casino, specialized in borrowing and repaying foreign loans, specialized in tax payment, specialized in investing abroad, specialized in investing in Vietnam, ...
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1.5 Margin deposit
The product of demand deposit or time deposit of customers opened at BIDV for the purpose of depositing as required by the law on deposit and legal needs of customers. The branch blockade and is only allowed to debit the account to pay for the purposes as committed in the margin contract or the content of authorization on the client's request to open account.
1.6
1.7
Account confirmation and blockade service Special deposit for lottery company
1.8
Valuable papers
Confirmation and blockade service of Deposit Certificates for institutional customers (Company) at the request of the Agent / Affiliate to ensure the Agent / Affiliate's obligations to institutional customers during the period determined time The product that allows for a specific interest rate mechanism for a group of customers is the lottery company Forms of mobilization by confirming debt repayment obligations between BIDV and institutions that hold valuable papers in a term, interest payment conditions and certain customer conditions
2
Main features of the product
Payment and currency management
2.1
Salary payment
Based on the list of beneficiaries that need to be paid by the customer, BIDV will make payment in batches quickly, accurately and strictly confidential.
2.2
BIDV performs international money transfers at the request of customers to ensure credit for the Bank / Branch of the beneficiary bank in China, Taiwan, and Hong Kong on the same transfer date on the basis of the Agreement signed between BIDV and the bank hold Nostro account of BIDV
Outgoing international money transfer credited within the day
2.3
Automatic payment for corporate customers
It is a domestic money transfer product that allows corporate customers to transfer money without setting up separate money transfer orders for each specific and separate transaction. On the basis of prior agreement, BIDV will automatically debit the enterprise's current account to remit money in the following cases: (i) Periodically at a certain time with a certain amount of money. (ii) When BIDV receives documents and documents requesting payment from suppliers or customers' partners; (iii) Other payment transactions according to specific agreements with customers.
2.4
It is an electronic banking service provided to institutional customers via internet and mobile to perform banking services as agreed with BIDV, including: (i) Financial transactions; (ii) Non-financial transactions; (iii) Cash flow management transactions
BIDV iBank (including cash flow management,
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cash flow control
2.5
2.6
Collection and payment on behalf of (tuition fee collection, collection at the location, non-stop collection ...) Revenue Plus (including collection, automatic transfer)
2.7
Pay the bill
Service package includes 5 products: multi-channel collection, automatic capital transfer, term deposit, overdraft for institutional customers, cash flow management, providing customers with a package of revenue management solutions with preferential policies. Payment services for bills of electricity, water, telecommunications charges, cable TV ... Main features of the product
3
Credit, guarantee
3.1
Sector-based credit products for corporate customers
Credit granting through supplementary lending, working capital, guarantee and LC issuance to customers Enterprises operating in the fields of business: Shipbuilding, Construction, Refining, Petroleum, textiles and pharmaceutical products
3.2
Valuable paper discounts for institutional customers
The form in which BIDV buys and receives the ownership of undue valuable papers from customers (including Financial Institutions and Enterprises, except for Financial Institutions that are credit institutions) in accordance with legal regulations. current laws and BIDV
3.3
Business credit card
This is the form BIDV provides credit to customers through the issuance of a corporate credit card for the purpose of paying for the purchase of legal goods and services in accordance with the law of Vietnam.
3.54
Loans for indirect fixed assets
A typical medium and long-term credit solution to meet the investment needs of fixed assets that do not directly generate revenue or generate revenue but are difficult to separate, including factories, offices, machinery and equipment, means of transport for production and business activities ...
3.5
A form of credit granting to customers by allowing customers to withdraw in excess of the balance on customers' current account in accordance with applicable laws and BIDV's regulations.
Loan overdrafts to institutional customers
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3.6
Guarantee import and export tax
BIDV's commitment to the tax authority to pay import / export duties, excise tax and value-added tax on behalf of the Customer if the guarantee period expires. in which the Customer does not fulfill tax obligations
Main features of the product
4
Trade finance products
4.1
Domestic factoring
The form of credit granting to the seller / buyer on a repurchase basis retains the right to reclaim the customer's receivables / payables. The credit extension is made through the disbursement of an advance based on the value of the customer's receivables / payables.
4.2
Working capital loans to corporate customers engaged in production and business activities for the performance of export contracts signed with import partners.
4.3
4.4
Financing import with loans under the export credit support mechanism from State bank of Vietnam
4.5
Payment to countries bordering Vietnam such as China
4.6
4.8
Direct payment channel between Vietnam and Russia
Loan for export contract performance Import finance guaranteed by imported goods Financing import under the framework contract Cross-border payment Paying salary for Vietnamese in Myanmar Vietnam-Russia bilateral payment channel 4.9 CAD payment
Cash Against Document
4.10
UPAS products
Product implementation guide UPAS LC (immediate, deferred payment, periodical fee payment), UPAS collection assistance, UPAS LC in domestic transactions, UPAS LC / Fixed fee collection in VND
4.11
Credit granting to the goods exporters
4.12
Free discount of deferred payment Lc on the basis of Forfaiting sponsorship of correspondent banks
Discount of export documents Discount of recourse against recollection according to L / C at sight
54
4.13
Sponsoring domestic L/C
Discount and prepayment for domestic sales transactions by method of domestic LC
55
Product and service portfolio for individual customers of BIDV So giao dich 1 Branch
Tên sản phẩm
Ghi chú
STT 1 1.1 1.2 1.3 1.4 1.5 2 2.1 2.2 2.3 2.4 2.5 2.6 3 3.1 3.2 3.3 4
Deposit Term Deposit Demand deposit Payment Deposit Deposit for securities Investment Valuable Papers Credit product Business Loans Car loans Home loans Loan proof financial Student Loans Consumer loans without collateral Payment and transfer products Domestic money transfers International money transfer Payment service Digital Banking
4.1
Mobile Banking
BSMS, BIDV Bankplus, BIDV Smart Banking
4.2 4.3 5
BIDV Online ATM Cards
5.1
Domestic debit card
5.2
International debit card
5.3
International credit card
BIDVHarmony (Kim, Mộc, Thủy, Hỏa, Thổ; Etrans, Moving, Co.opmart BIDV Master Card Young Plus, Master Vietravel Debit, Master Card Ready, Master Plantinum Debit BIDV Visa Plantinum Cashback, Visa Premier, Visa Precious, Visa Plantinum, Vietravel Plantinum, Visa Smile, Visa Infinite, Visa Flexi, Vietravel Standard
Weakness:
BIDV So giao dich 1 branch currently lacks specific products and services,
creating a difference and competitive advantage in the market, especially products
56
for individual customers.
The portfolio of residential mobilization products does not yet have high-end
financial products such as deposits associated with investment forms, exchange rate
insurance deposits and there are not many links with other products to form the
package. product.
The new loan product portfolio contains only core products, without branch and
specialized products to meet the specific needs of customers. In addition, a number
of rival banks are implementing flexible and effective loan purchase mechanisms /
products to attract new and good customers while BIDV is initially implementing it.
Service quality of some e-banking products is not really stable, there are many
errors (partly due to the fault of the provider), often used by transaction agent
programs such as SVS, IBMB and BSMS programs, electronic collection and
payment, access speed and processing time are slow.
Some products and services such as IBMB, gold trading ... are behind the market
and do not have outstanding features, thus reducing competitiveness.
In addition, like some other banks, BIDV is facing problems in diversifying
services, adding value to customers to make a difference, especially in the
increasingly competitive and competitive conditions. resources from securities
companies with strong investment banking background such as SSI, which can fully
meet the closed needs of customers (stocks, bonds, financial advisory, M&A ...)
h) Marketing and customer care
Strengths:
For Corporate customers:
BIDV So giao dich 1 Branch continued to maintain its strength in the
relationship with the traditional group of customers, the Group - Corporation and
VIP customers who are financial institutions such as the State Treasury, Social
insurance, SCIC, ...The Branch has built a consistent marketing and care policy for
large groups of customers.
For individual customers: The branch has segmented, selected target customers
and built product policies, suitable for each specific customer group: issued a
57
customer care policy and implementing customer segmentation according to deposit
balance to have a unique policy of care on special occasions to increase customer
engagement; Perform scoring and rating for individual customers; Set up a system
of tools for sale such as product manuals, leaflets for new products.
Promotions, incentives, communication to promote products and services have
been regularly and widely deployed to customers.
Weaknesses:
The interests of important customers only receive normal incentives, special benefits
for VIP customers that are not yet competitive compared with some local banks.
The FDI customer segment is somewhat weaker than its competitors, especially
compared to VCB. Not fully taking advantage of the bank's strength with a large
number of customers to develop potential customers on the basis of existing
customers (from satellite customers, suppliers ... of existing customers. ). BIDV has
the orientation to develop small and medium enterprise customers (policy has been
issued) but the orientation for this group of customers is not specific and has not
made a big difference compared to the general policies of corporate customers.
Some traditional products and services (payment, guarantee, shopping mall) are
not actively promoting, mainly serving on existing customers, not actively
marketing and exploiting customers' needs. to offer services.
The follow-up to customers to grasp the needs as well as consulting, selling is
not really equal for each manager, direct relationship with customers. The reason is
partly due to the large number of customers, the current staff working in all
professional fields, so the time spent on customer care is limited, many staff are not
really sure about the product like the market situation to advise customers ...
Mainly using the traditional sales channel through Branches (counter
transactions or through customer relationships), while joint stock commercial banks
have an internet channel for any customer to post. Online registration becomes a
new customer of the bank, and at the same time, register to use the bank's services.
The fact of surveying 100 customers who are using at least one product or
service of BIDV obtained the following results: (Sample questionnaire according to
58
the Appendix of the thesis)
No
Content
1
2
3
Deposit
Loan
1
Other service
Type of product and service of BIDV So giao dich 1 Branch that you are using
Result
45
71
100
you
giao
dich
loans
2
rates
Very diversified, fully meeting the needs of customers
Not diversified yet, not meeting the needs of customers
Quite diverse, however, there is a lack of special products and services
review Do whether the products and services of BIDV So 1 Branch have been diversified and met the of needs customers
Note One customer can use many and products services of BIDV Other and products services that customers often use: guarantee, L / C opening, card ... The retail products are diversified: not yet loans with unsecured loans, mortgage for unsecured beauty and health care, deposits with preferential interest for individual customers ...
33
52
15
giao
good
is
Low quality
Very quality
Quality decent
1 customer informed that BIDV's Smartbanking system was often faulty and could not be traded at night
82
17
1
3
interest
4
Savings rates lower than joint stock banks such as SHBank, VPbank …
Savings interest rates higher than other banks
Savings rate interest equivalent to other banks
Savings interest rates lower than other banks
19
28
53
than
5
Lending higher other banks
Lending interest rate equivalent to other banks
Lending interest rates than lower other banks
9
33
58
fees than
dich
giao
6
Service higher other banks
fees Service equivalent to other banks
Service fees lower than other banks
Result How would you rate the quality of BIDV dich So 1 Branch's products and services? Result How would you rate interest the savings rate of BIDV So giao dich 1 Branch? Result How do you rate the lending interest rate of BIDV So giao dich 1 Branch? Result How do you rate the service fees of BIDV So 1 Branch? Result
11
55
34
59
the
policy
7
Very pleased Pleased
Unsatisfied
57
41
2
Some customers report transaction but to have been not specifically advised by bank officials ...
How do you evaluate the customer care service of BIDV, Transaction Center 1 Branch? Result
The above survey results show that, basically BIDV, Transaction Center 1
branch is highly appreciated by the majority of customers for the quality of products
and services, the branch has advantages in lending interest rates compared to banks.
However, there are some comments from customers as follows:
- Products and services are quite diverse, but there are not many special and
unique products and services, especially retail products like some other banks are
implementing: quick unsecured loans with loans mortgages, unsecured loans for
beauty and health care, deposits combined with preferential interest rates for
individual customers ...
- Savings interest rates are not as competitive as other joint stock banks:
SHBank, VPBank ...
- Service fees are at the same level as other banks, with no outstanding
competition
Conclusion: Based on the above analysis, it can be seen that BIDV So giao dich 1 Branch is still maintaining a competitive position in the market as well as in
Hanoi city with a diversified product portfolio to meet the copy of customer needs.
However, in general, the Branch lacks its own characteristics, differentiating
factors from competitors, especially retail products, unsurpassed brand
awareness, interest policy and Fee are not really competitive…. compared to
60
major competitors such as Vietcombank, Vietinbank.
CHAPTER 3: SOLUTIONS TO IMPROVE COMPETITIVENESS OF BIDV
SO GIAO DICH 1 BRANCH
3.1 Trends and forecasts for the banking market in the coming years
On August 8, 2019, the Government issued Decision No. 986 / QD-TTg on the
Strategy for the development of the banking sector of Vietnam to 2025, with an
orientation to 2030. The strategy clearly stated the views of the Government.
Considering the monetary, banking and credit institutions' operations to be the
lifeblood of the economy, playing an important role in the overall financial system
of Vietnam, as a prerequisite for economic stability. macro, sustainable growth. The
State creates a stable and safe business environment, encourages fair competition,
respects the law and respects the laws of the market. Banks need to promptly grasp
opportunities and challenges from the impact of the industrial revolution to orient
their operations, apply modern science and technology and innovate in parallel with
developing quality human resources. High is the key to rapid and sustainable
development, enhancing competitiveness.
To develop the system of credit institutions in the direction: domestic credit
institutions play a key role, operate in a transparent, competitive, safe, and effective
manner based on technology, and advanced products, in accordance with operating
standards according to international practices, dynamic and creative to adapt to the
process of liberalization and globalization; meeting the increasing demand for
financial and banking services of the economy.
Industrial revolution 4.0 with the advent of a series of new technologies is
strongly impacting the socio-economic development of each country, including
technologies such as virtual reality (VR), Internet. things (Internet of Things), 3D
printing, big data (Big Data), artificial intelligence (AI) are gradually being applied
to all areas of socio-economic life. The banking industry is one of the sectors
strongly affected by the industrial revolution 4.0. This can be seen through the
development trend of new banking products and services with outstanding features
61
and utilities for customers.
The inevitable trend of commercial banks is digital banking. Digital banking is a
form of making most of banking transactions online through the internet. All
activities of customers are performed through electronic devices such as smart
phones, tablets, laptops ... Through digital banks, transactions such as money
transfers inside and outside the system, international money transfers, Payment of
bills, bank loans, savings ... are not available to a bank branch but can be done at
home. From there, minimizing the procedures and related documents, customers can
make transactions anytime, anywhere, regardless of time and space.
Developing digital banking is no longer an option but an inevitable need,
promoting banks to promote the application of scientific and technological
achievements, especially information technology in financial transactions and
transactions. . In Vietnam, many banks have researched to apply new and modern
technologies to payment activities such as applying fingerprint authentication, facial
recognition, biometrics, using QR code, Tokenization, and non-payment. mPOS
technology. At the same time, banks also improve the ability to collect and process
data, apply Big data, AI to improve management processes, improve customer
experience; apply new security measures and standards. This has created a
widespread digitalization trend in the banking sector.
In the world in recent years as well as future trends, with the extensive impact of
the 4.0 technology revolution, the key factor to enhance the bank's competitiveness
is technology. Digital banking will become a business trend and strategy of any
bank if it wants to survive and be competitive.
Digital banking is part of the broader landscape for the move to online banking,
where banking services are provided over the internet. The shift from traditional
banking to digital banking has been gradual and ongoing, and is constituted by
varying degrees of banking digitization. Digital banking involves a high degree of
web-based service and process automation and can include APIs that enable multi-
organization service components to deliver banking products and provide
transactions. It provides the ability for users to access financial data through
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desktop, mobile and ATM services.
In short, digital banking means digitizing the entire bank and all its operations,
programs, and functions. It's not just about digitizing your services and products -
the front end customers see - but also about automating your processes (back-end)
and connecting these worlds with soft intermediate. Digital banking is about the
automation of every step of the banking relationship, and it goes far beyond an
online or mobile banking platform.
The main benefits of digital banking are:
- Improve business efficiency
Not only do digital platforms improve interaction with customers and deliver
their needs faster, they also provide methods to make internal functions more
efficient. Although banks have been at the forefront of digital technology at the end
of consumers for decades, they have yet to fully accept all the benefits of
middleware to increase productivity.
- Cost savings
One of the keys for banks to cut costs is automatic apps that replace excess manual
labor. Traditional banking is costly, slow and prone to human error, according to
McKinsey & Company. Paper and people reliance also takes up office space, increasing
energy and storage costs. Future digital platforms could reduce costs through the
coordination of more qualitative data and faster response to market changes.
- Increased accuracy
Traditional banks that mainly rely on paper handling can have error rates of up
to 40%, requiring rework. Along with the lack of IT integration between branch and
office staff, this problem reduces business efficiency. By simplifying the
verification process, it is easier to deploy IT solutions with business software,
resulting in more accurate accounting. Financial accuracy is critical for banks to
comply with government regulations.
- Improve the competitive ability
Digital solutions help manage marketing lists, enable banks to access the
broader market, and build closer relationships with tech-savvy consumers. The
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CRM platform can track customer history and provide instant access to email and
other forms of online communication. It is effective to implement customer rewards
programs that can improve loyalty and satisfaction.
- Faster
Using automation can speed up both the external and the internal processes, both
of which can improve customer satisfaction. Following the 2008 financial market
crash, an increasing emphasis was placed on risk management. Instead of banks
recruiting and training risk management professionals, risk management software
can detect and respond to market changes faster than seasoned professionals.
- Increased security
All small and large businesses face a number of growing cyber threats that can
damage their reputation. Banks can benefit from additional layers of security that
protect data.
Along with that is the birth of a series of new technologies applied in the
financial sector, also known as Fintech. Fintech companies bring many new
convenient products and services with low cost, simple and convenient transactions,
especially in the field of online electronic payment such as Momo, Onepay, 123pay
... E-wallet service linked with The bank also developed strongly in both quantity
and transaction value. Payment infrastructure will also thrive with the network of
ATMs, POS installed at most establishments, distribution chains, retailers, large
hotels, medical facilities, hospitals, schools ...
Banks provide services for many fields: payment for electricity, water, tuition,
insurance, financial services, securities transactions, payment for air tickets,
television charges, telecommunications, recharge withdrawing e-wallets ... In
addition to financial services serving residents and businesses, banks also
coordinate with state agencies in reforming administrative procedures: electronic
budget collection and remittance, Tax payments are made in electronic forms of
commercial banks or through the portal of the General Department of Customs ...
Banks will find it difficult to maintain traditional operating models in the face of
64
changing technology and customer expectations.
Another trend for commercial banks in recent years that will remain fiercely
competitive in the near future is retail banking. Retail banking targets individuals,
households, and small and medium enterprises, so products and services are often
simple, convenient and frequent such as deposits, accounts, credit cards. This
development strategy will help banks diversify revenues, minimize operational risks
and achieve optimal business efficiency. Especially in the context that the
Vietnamese market is one of the potential markets for retail banks with a population
of 96 million people, GDP per capita per year… achieved, growing over the years.
The purpose of retail banking is to optimize a customer's personal experience, help
build “positive emotions” and then customer loyalty to his or her bank. The
development of retail banking is based on the following directions:
- Expand the transaction network with the aim of reaching maximum target
customers as well as increasing brand coverage, including transaction offices,
ATMs, POS
- Diversifying products. In addition to traditional products such as credit and
deposits, banks also develop card products, money transfers, e-banking, bill
payment ..., and offer many promotions to attract customers. . The segment of high-
end customers is also a new direction for banks when 10% of the population
belongs to the upper class holding 80% of total personal assets. The services are for
priority customers with many outstanding incentives such as: shuttle and airport
luxury lounge, health care, golf, dining, spa ...
- Improve customer care services when customers' emotions and beliefs become
a key factor for choosing to use services: establishing customer care and counseling
centers.
- Modernizing banking technology, developing new services through
internetbanking, home banking, mobile banking ... combining with Fintech
65
companies or integrating QRPay function is also a new direction for banks.
3.2 Orientation and strategic vision of BIDV 3.2.1 Orientation and strategic vision of the entire BIDV system
BIDV operates with the mission of bringing the best benefits and benefits to
customers, shareholders, employees and social community.
BIDV's vision for the next 5 years is to strive to become a bank in the group of
100 largest banks in Asia, striving to become a top-class bank in Southeast Asia.
General goals: BIDV continues to be a commercial bank playing a key role,
leading in size, market share, and ability to regulate the market; Make the financial
situation healthy, improve governance capacity in accordance with the law in
accordance with international practices; Taking the lead in applying modern
banking technology, improving international credit rating; Increasing brand value;
Improve productivity and income of employees, fulfill obligations to shareholders,
and responsibility to the social community.
The priority orientations of BIDV are all aimed at improving the
competitiveness of BIDV, making BIDV increasingly develop, specifically:
- Improve financial capacity, diversify ownership structure, focus on
restructuring risky assets towards improving asset quality to meet capital adequacy
ratios (CAR) as regulated. State Bank of Vietnam and meeting Basel II standards.
Strive to 2020, equity is 2 times higher than current; is the leading bank in
Southeast Asia.
- Improve credit quality, step up measures to recover bad debts, off-balance
sheet debts, and sell debts of VAMC.
- Diversifying customer base and products and services, promoting retail
operations, developing SME customers, and FDI enterprises.
- Organize business administration according to a modern, advanced banking
model, towards practice, prioritize the comprehensive development of digital
banking strategy on all aspects of business activities, product processes, distribution
66
channels, in line with the development trend of the industrial revolution 4.0.
- Developing a team of high quality human resources; fostering BIDV corporate
culture and developing BIDV brand into a valuable banking brand, strong brand
health, spreading wide awareness to domestic and international markets. 3.2.2 Objectives and orientation of So giao dich 1 Branch
The goal of So giao dich 1 Branch to 2025 is to continue promoting the role and
position of a key branch, leading in the entire BIDV system, always pioneering and
successfully completing business tasks. effective assignment and implementation of
strategic directions of BIDV in each period.
Scale growth, consolidate and increase operational market share; at the same
time strictly controlling quality, ensuring safety and efficiency; improving labor
productivity; continue to maintain its role as the branch with the highest scale and
efficiency in the BIDV system.
Raising staff awareness of the importance of enhancing the competitiveness of
the So giao dich 1 Branch; Determining this is a vital task, requiring each officer,
each professional division, the entire branch to start from the smallest things to
improve combat strength, enhance image, improve competitiveness and identifying
each staff member is a competitive strength of the system.
Improving competitiveness is always the top goal, a central and throughout
mission of the Branch. With the awareness that improving competitiveness will be
the core factor to decide the business performance and development of the Branch.
Operational orientation of the Branch in the coming years:
Following the master plan on socio-economic development of Hanoi city, the
orientations and directions of the State Bank and BIDV Head Office, continue to
improve competitiveness in Hanoi, consider this a regular and continuous task to
strive to complete the assigned business plan.
Continuing to maintain and maintain sustainable credit growth according to the
orientation of BIDV Head Office, change the credit structure to suit the sectors and
industries; strictly control loans for high-risk sectors such as construction, real
67
estate, and securities.
Continue to promote capital mobilization at reasonable costs, ensuring balance
of capital for the Branch's operations.
Promote retail activities, increase the retail scale and efficiency on the basis of
taking advantage of existing customers, continue to increase cross-selling of
products.
Deploying gray matter rich products, high quality utility services, promoting
digital banking products and services, applying modern technology.
Focus on training high-quality, enthusiastic and responsible staff.
3.3 Solutions:
3.3.1 Overall solutions to improve competitiveness
In order to improve competitiveness in the area, BIDV So giao dich 1 Branch
needs to implement comprehensively and synchronously solutions from market
research, customer segmentation, and provision of differentiated products and
services. customer training and marketing, advertising communications ...
Specifically, the solutions are as follows:
a) Solutions to research and collection of market information
- Survey / or coordinate with professional consultants to periodically research,
survey the market, the needs of customers to capture product trends, collect
information about competitors, promptly serve product development, building
policies towards customers.
- For the products being provided, there is a regular review and assessment of
the product's customer satisfaction, whether the product is still suitable / not
suitable, which product is the strength ... from there, there are improvements,
changes in products and services to meet maximum customer needs.
- Exploiting information from competitors in the area of operation to have
appropriate interest rates, fees ... policy, ensuring competitiveness.
b) Solution for customer segmentation
- Segmentation of customers by product line to ensure maximum exploitation of
customers using bank financial products, combining customer policy development
68
and customer care for each brand segment results, quality
- Continuing to promote its strengths in relationships with customers of
Corporations - State corporations, large private corporations / companies (such as
Oil and Gas Group, Viettel Group, Electricity Group, Textile and Garment Group ,
The Coal and Mineral Group ...), at the same time developing new customers in the
areas of strengths in the area, enterprises in the group of priority to develop
according to the State's policies, developing FDI customers ...
c) Solutions for product development.
On the basis of results from market research and implementation of customer
segmentation, thereby enhancing the effective exploitation of BIDV's existing
product portfolio, at the same time developing new products to maximize demand
and benefits. of customers, ensuring competition and efficiency
- For credit products: Continue to implement preferential credit packages with
interest rates / or incentives for attached utilities for the sectors, customers in
priority areas / focus segments by the Association Issued by BIDV headquarters.
Deploying new products in the direction of diversifying according to specific
industries (textiles, pharmaceuticals, rice, seafood, petroleum ...), according to
product packages suitable for each customer / group of specific customers such as
has been deployed to the group of customers exporting rice, seafood, supermarket
businesses, hospitals and universities, combining product cross-selling through
providing banking facilities, cash flow management ... meet the comprehensive
needs of customers.
As for retail credit products: Maintain and focus on promoting lending to
products with advantages of BIDV: products to support housing needs, lending for
production and business; promote products where the locality has potential: car loan
products, student loans, financial proof through current product packages;
Design/amend and supplement retail credit product packages in a timely manner to
suit the market, ensure competition and efficiency like 3000 billion home loan
packages ...
- For capital mobilization products: Submit to Head Office Apply specific
69
products for some groups of customers with large deposits such as SCIC, State
Treasury, and Social Insurance ... in accordance with the actual needs of customers.
to maintain and promote stable and low-cost capital. At the same time, continue to
develop products that are suitable for specific areas, focus on meeting needs,
maintain deposit relationships with large corporations and corporations, in parallel
with diversifying capital sources from businesses with credit relations and services
at BIDV, developing new customer base, limiting capital dependence on a few large
customers.
- For groups of products and services:
Promote the deployment of products focusing on key commodities (especially
trade finance products, foreign currency transactions): textiles, computer
components and peripheral equipment, electronics, gasoline Oil temporarily
imported for re-export ...
d) Solutions for customer policies, pricing policies and customer care:
On the basis of specific customer segments by object, building prices and fees, a
separate mechanism for each industry, customer.
Strengthening the management of cash flow of corporate customers to ensure the
balance between loans and deposits from customers and increase benefits from the bank
Implementing a consistent customer care mechanism, having separate policies
for strategic customers to enable the Branch to maintain relationships with
customers. Actively promote high-level relationships between BIDV and customers
who are corporations and large corporations
With regard to the interest rate of the contract: apply the Deposit interest rate
depending on each customer type, the amount of the deposit, ensuring the relative
competitiveness of the Branch.
For lending interest rates: combining the application of flexible fee pricing tools
(exemption or reduction, regularly deploying preferential interest rate credit
packages ...), and flexibly the product mechanism to meet the requirements
competitive demand is highly competitive in each specific area, ensuring an
increase in the total benefits obtained from customers. Consider reducing lending
70
interest rates to ensure competition with other banks, along with requiring
customers to use more products and services of BIDV So giao dich 1 Branch to still
ensure revenue offset the profit reduction due to lower interest rates for customers.
e) Develop human resources, improve sales skills, improve the management
model
Branches need to increase their initiative in sales, approach to customers, and
focus on comprehensively exploiting customers' needs instead of focusing on
implementing traditional products (credit, deposits, maths). At the same time,
closely coordinating with the Head Office in the deployment of new and special
products.
Regularly organize training for the sales department on product topics and sales
skills to improve the proactiveness and professionalism in sales, approaching new
customers, focusing on comprehensive exploitation. needs of customers instead of
just focusing on implementing traditional products.
Continue to focus resources on building motivational mechanisms and policies
to support sales staff with good achievements in order to create motivation and
increase competitiveness in all aspects of operations.
Improving the governance model in a modern and effective direction, building a
business strategy, marketing strategy, developing products and services in line with
the reality of development.
f) Solutions to enhance information technology application in operations:
Taking the lead in the application of new technology, electronic application
programs are deployed by the Head Office in branches to improve processing speed,
labor efficiency, thereby improving the quality of products and services. of the
branch.
Deploy technology programs to increase the utility of products and services, and
improve the quality of products and services
g) Solutions for marketing, network development and brand identity
enhancement:
Select and focus on communication of key and breakthrough products in the
71
market, targeting target customers. Building a professional marketing method,
building a synchronous and professional PR program to create a unified friendly
image of BIDV brand; There is a consistency in the message, audience and target
audience of your marketing programs. At the same time, enhancing the promotion
and marketing of products to customers through electronic distribution channels.
Improve the operational efficiency of transaction offices, regularly check and
monitor the identity of BIDV's brand image at transaction offices.
Participate in the vote on banking products and services of reputable organizations,
contribute to promoting products in particular and BIDV brand in general.
Organize seminars or go directly to the overall marketing businesses of products
provided by BIDV related to customers' activities, focus on introducing and
developing products that customers have not used at night. multi, offering an overall
product that serves all of the customer's needs
Strengthen the implementation of advertising, communication, marketing of
products and services on central channels, combined with modern electronic
information channels (online newspapers, social networks, forum sites, mobile
marketing ...).
3.3.2 Main solutions:
(In this thesis, only focuses on in-depth analysis of a number of specific
solutions and focuses associated with the actual operation of BIDV So giao dich 1
Branch)
a) Developing and improving the quality of human resources, having
motivation for employees
Human resources play a decisive role in the operation and development of the
organization. For service industry such as banking, human factor is the most
important factor, directly affecting the quality of products and services.
In the context of fierce competition, BIDV So giao dich 1 Branch needs to build
high-quality human resources to meet the increasingly complex requirements of
banking operations. Some solutions to improve the quality of human resources at
72
the current branch:
- Recruitment of input staff: when recruiting input staff on the basis of
candidates meeting the conditions of professional test scores, priority should be
given to candidates who have the ability to think and understand. subject, having
understanding of socio-economic knowledge in addition to professional knowledge,
being healthy and able to withstand work pressure.
- Staff training:
+ Professional training through the development of specialized training
programs, going into each specific profession of the bank. Example for
enterprise lending, providing in-depth training on loan products: lending
according to credit lines for businesses, loans for investment in real estate
projects, loans for investment hydropower projects, loans for investment in
factory construction projects and procurement of machinery and equipment
... Instructors can be experts in the banking sector or good staff with long
experience in transactions at the Branch.
+ Especially, for the staff in the customer management and customer
transaction department: this is a team of staff in direct contact with
customers, directly conducting the business, supplying products. Banking
service products, being the face of the bank, play an important role in
increasing sales, bringing revenue and profit to the bank, so there is a need
for solutions to develop and exploit. Efficiency from this staff:
Training staff to change the perception, thinking, and full sense of
responsibility of the customer relations officer is to be the focal point
to provide a comprehensive range of banking products and services,
including capital mobilization, credit, payment products and services,
e-banking ... not only traditional credit products as before; actively in
customer search and development to avoid passive, waiting for
customers to transact.
Train staff to have a sense of responsibility for their work, actively
learn, accumulate knowledge, experience, creative thinking, and the
73
ability to withstand work pressure.
Training on soft skills: customer transaction skills, negotiation,
persuasion, customer counseling, searching, marketing, exploiting old
customers and developing new customers.
+ In the environment of deep integration, especially when BIDV has sold
15% of the shares to strategic shareholder, KEB Hana Bank - Korea, the
branch should have regulations on requirements to meet foreign
qualifications. language for professional officials, managers, and organizing
foreign language training programs for staff at the agency.
- Management and staffing
+ Review, evaluate, classify staff, restructure to increase the addition of
high-quality personnel for direct consulting and sales staff (corporate
customer rooms, individual customers), reduce the support team / backoffice
because the team of direct sales staff is a team that directly brings revenue
and profit to the branch.
+ To assign annual and quarterly business plans on capital mobilization,
credit balance, service revenues, profits ... for departments, sales offices (the
customer management department, transaction office), for each customer
management officer, associating the completion of the business plan with
income to motivate the staff in trying to increase customers, increase profits
for the branch.
+ For a contingent of managers, executives and leaders: evaluation to have a
program of rotation, training, appointment associated with dismissal,
dismissal, and discipline of officials who do not complete their tasks.
In addition to improving the quality of human resources, the Branch needs to have
motivational and rewarding solutions associated with sanctions, operational monitoring
to ensure motivation for employees to strive to complete. the best job is assigned:
- To promptly monitor, detect, prevent and warn of errors and violations in
operation, and have sanctions to handle and overcome the violations.
- Develop incentive mechanisms to attract talent to cadres who have excellent
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performance, have good capabilities, good qualities, and ability to develop.
- There is a rewarding mechanism corresponding to the business results of
each officer.
b) Development and difference in products and services
In Hanoi, the level of competition among banks is highest in the country when
there are many banks providing the same products and services, making the
difference is an important factor for the Department Branch. So giao dich 1 Branch
may attract customers to use products or services.
To create a competitive advantage, So giao dich 1 Branch needs to follow a
personalized strategy for each customer, meaning that for each type of customer, the
bank will provide products and services tailored to their needs. preferences, desires,
characteristics of that customer, giving customers the feeling of sharing,
accompanying, understanding, not serving all customers in the same way. In
addition, customers increasingly tend to use full-package products at banks to save
time, effort and costs, in addition, they need financial advisory services. Therefore,
So giao dich 1 Branch needs to design product packages that include a full range of
banking products and services suitable for each customer, along with providing
financial advisory services to customers. row. Financial advisory services include
the introduction of product and service options with financial costs for products and
services for customers to choose to ensure the most reasonable financial cost, limit
risks. and bring the highest efficiency to customers.
For example, for an enterprise that produces plastic resins for overseas export,
product packages designed for that business include:
+ Account and payment services: open VND and foreign currency (USD,
EUR…) payment accounts for businesses, make money payment
transactions via accounts.
+ Credit products: Loans for investment in factory construction and
purchase of machinery and equipment for production; Loans according to
credit limits to serve the working capital needs of enterprises for
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enterprises to purchase raw materials for production, pay workers' wages,
pay electricity and water bills ...; Loans to buy cars for enterprises'
operations; Derivative credit ...
+ Trade finance products: Open import L / C for enterprises purchasing raw
materials from abroad; Discount of export documents; ...
+ Other services: issuing payment guarantee, buying and selling foreign
currencies, e-banking service ibank ...
For example, for an individual customer who needs a home loan with an amount
of VND 3 billion with a preferential interest rate. The bank currently has a
preferential loan program to buy a house with different interest rate options:
Option 1: the first year lending rate is fixed at 7.5% / year, the next year the
floating lending rate will be adjusted every 6 months, equal to the 12-month
residential savings interest rate + margin 4.0% / year (currently about 10.9% / year).
Option 2: The first 2-year loan interest rate is fixed at 8.5%, the interest rate for
the following years will be adjusted every 6 months, equal to the 12-month
residential savings interest rate + margin 4.0% / year.
The customer relations officer should advise the client on which option is the
most optimal of the two above plans:
- If the customer only has a temporary shortage of money and needs a loan in a
short time, he can repay the loan in advance: option 1 is optimal because in 1 year,
the customer enjoys a low interest rate of 7.5% / year.
- If the customer has a long-term loan and periodical loan repayment demand:
option 2 is optimal because the customer is entitled to an interest rate incentive of
8.5% in the first 2 years, while if according to plan 1, the first year interest rate is
7.5 % / year, but from the second year, customers have to bear interest rates of
about 10.9% / year.
Some other specific solutions to develop and make a difference to the current
products and services of So giao dich 1 Branch are as follows:
Credit product:
- Focus on implementing credit products of special nature, which are
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considered the strength of the So giao dich 1 Branch, but few banks have
experience: co-financing (syndication) for major projects in the field of oil
and gas exploitation and processing, construction of telecommunications
infrastructure ...; investment projects for hydroelectric plants, thermal power
plants, ...; large-scale real estate complex investment projects; traffic project
investment projects…; lending to contractors in the construction and
installation sector ... For retail credit: promoting lending to support housing
needs, lending for production and business, loans to buy cars, loans to study
abroad , proof of finance ... Apply preferential credit packages in terms of
interest rates, loan terms, loan terms and associated utilities.
- Promote consulting and deploying to customers new and modern products:
derivative credit, cross-currency swap (CCS), commodity derivative ... These
are modern products that many banks However, it is not popular in Vietnam
yet. In order to deploy to customers, it is necessary to have advice on
introducing, analyzing the advantages and benefits brought by the product to
customers so that customers can choose to use products and services.
Deposit mobilization product
- Deploying deposit products suitable for each customer type: specific
products for some customers with large deposits such as securities
companies, insurance companies ...
- Optimizing customers' finance by consulting and implementing cash flow
management services for customers.
Other services: promoting the deployment of products focusing on the main
areas of the branch: trade finance products, foreign currency transactions for
textile and garment industries, machine components. calculation, production
of plastic resins, petrol and oil temporarily imported for re-export ...
In addition, the Branch needs to take advantage of the BIDV system when BIDV
has strengths in three areas: banking, securities, and insurance (BIDV has its own
securities company and insurance company) to provide products and services in a
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closed way for customers, thereby increasing BIDV's competitiveness in the market.
c) Promote marketing and customer care, develop customer policies, and
competitive pricing policies
To be able to develop customer base, including maintaining relationships with
existing customers and expanding exploitation of these customers, at the same time
looking to develop new customers, So giao dich 1 Branch needs have appropriate
marketing and customer care policies as well as apply customer policies and
competitive pricing policies towards customers.
Marketing and customer care
The branch needs to build a customer care policy in the direction of creating a
close relationship with customers, thereby creating customer loyalty with the bank.
In fact, at the So giao dich 1 Branch, a lot of corporate customers, when they were
newly established or when operating on a small scale, only had transaction
relationships, borrowed capital at the Branch, however, when the customers issued
Development and expansion, with good financial status, business performance,
reputation in the market, many other banks have attracted customers by applying
many preferential policies such as preferential rates. collateral even for loans
without collateral, preferential lending rates ... In order to keep good customers and
have potential to bring great benefits to the Branch, the Branch needs establish a
close relationship from leaders to levels of direct staff (finance and accounting
department, investment department ... of the business) between the two units
through regular handover. exchanging information, organizing exchange sessions,
participating in events to celebrate the founding anniversary, giving gifts on
holidays, New Year, birthdays ... This also helps the bank to grasp c information,
business plans, investment projects ... of the business in a timely manner to have a
plan to access credit, products and services ... to customers.
Customer care needs to be done in a consistent manner, with a separate policy
with strategic customers. Promote high-level relationships to deeply exploit with
customers such as corporations, corporations, large private companies: Oil and Gas
Group, Coal and Mineral Group, Petroleum Group, Textile Group Garment,
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Industry - Telecommunication Group Vietel Army….
Paying brokerage commissions for decision makers, who introduce customers to
use products and services, visit, give gifts to customers on holidays, birthdays ....
For customers with close relationships: Building Business Club Groups / SME
Club, Private Customer Club when joining the Club, members will enjoy special
financial incentives: interest rates, interest rates. deposit, preferential fees, priority
to shorten transaction time, to announce new products as soon as the product is
launched, organize business matching seminars for members.
For individual customers, care should be done professionally and regularly:
visiting and giving gifts to customers on holidays, birthdays, special occasions,
organizing promotions and offers. for customers. In the current fierce competition in
the retail sector, building close relationships and sharing with customers is the basis
to retain customers.
In addition to taking care of old customers, the Branch needs to promote
marketing to develop new customers, especially customers in priority areas of the
Government: export production, processing industry, fabrication and construction of
traffic floors, hi-tech parks, hi-tech agriculture, schools, hospitals ..., areas where
Hanoi has strengths: textiles, footwear, electrical components customer
development, FDI customer development (FDI enterprises) ... through customer
development channels as follows:
- Exploiting through existing customers: This is one of the most effective
channels to find new customers through accessing input, output and customer
partners of enterprises that are having relationships at BIDV. Exploitation
method: Review the satellite customer list (input, output) of existing
customers, at the same time ask these customers to introduce, build
relationships to implement marketing and providing products and services to
satellite businesses.
- Adhere to the economic development, industrial development and investment
promotion policies of Hanoi City, grasp development orientations, key
industries, key products, and preferential policy mechanisms, distribution
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plans of industrial parks, industrial clusters, investment promotion
projects/programs of Hanoi City to anticipate, access and consider to provide
products and service.
- Focus on building relationships with local authorities. Focus on developing
new customers through channels: creating relationships with the Department
of Industry and Trade, the Business Association, the Association of SMEs,
the Women's Entrepreneur Association ...
- Participate in the banking - business connection program (especially FDI
enterprises, SMEs). Closely coordinate with local authorities to promptly
grasp information, remove difficulties and problems for businesses in credit
relations by directly communicating and quickly resolving their borrowing
needs. Enterprises can access loans with reasonable interest rates, reduce
capital difficulties and interest costs to help businesses.
- Through the relationship of the Branch's leaders and staff, going to the
market to reach customers, take care of and exploit from the small links in
the customer's business chain.
- Organize customer outreach sessions for employees: Establish new customer
development groups that are responsible for collecting market information,
collecting information about businesses, and organizing promotional
meetings, introducing products and preferential policies for customers;
- Participate in trade and investment promotion seminars and exhibitions in the
locality as well as in neighboring areas. Set up consulting desks, hand out
leaflets, give advice to customers directly to reach customers who are
supporting industries;
- Coordinate with the Head Office to communicate through Internet channels,
Local Newspapers, Advertising Pano… to introduce products being
implemented on BIDV system;
- Coordinate related units and organizations (retailers, companies providing
electricity, water and sanitation services) ... to research and deploy to collect
information about customers, focus promote the association of Bank -
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Service Providers - customers. Research to deploy information and services
to widely provide users, consumers, and linkages between banks, retailers,
public service providers and users.
Develop customer policy, competitive pricing policy:
Branches need to perform customer segmentation according to each product
line; segmentation according to the level of customer benefits; according to the
prestige capacity of each customer ... to have a customer policy, price policy, fee
and separate mechanism suitable for each customer.
In terms of depth, the Branch needs to maximize the benefits brought by existing
customers. Conduct a review of each existing customer relationship: relationship
level, credit size, capital mobilization, credit income, capital mobilization, net
service revenues, total benefits again, the business performance, the financial
situation of the customer, check the CIC information on the credit relationship at
other banks ... to assess the ability to exploit customers, consider increasing credit
use, raise capital, products and services for customers. On that basis, building
business and exploitation plans for each customer: reducing lending interest rates
(accepting reducing credit NIMs) to encourage customers to transfer outstanding
loans from other banks, thereby increasing remittance turnover, increase the scale of
capital mobilization, reduce service fees to attract customers to increase the use of
BIDV's products and services ... The reduction of interest rates, lower fees,
preferential foreign currency points ... must ensure increasing scale, thereby
increasing the total benefits from customers, increasing profits for the branch. The
policy of fees and prices applied to customers should be built on the basis of all
banking products and services, with flexibility to ensure competition with other
banks, and can accept a reduction. Interest rates on customer loans to attract
customers to use other products and services at the Branch, thereby the total profit
earned from customers is still increased.
For example: an enterprise customer who is taking a 6-month short-term loan
with the interest rate of 8% / year. Customers request the Branch to reduce the
interest rate to 7% / year. In this case, if the branch does not reduce interest rates for
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customers, it will not be able to compete with other banks, customers will gradually
reduce the outstanding loans at the branch, leading to a decline in profits. The
branch will reduce interest rates for customers so that customers can focus on
increasing the outstanding loans at the branch, and at the same time requires
customers to use other BIDV's other products and services, thus total profit of
customers. The amount brought to the branch is then much higher than the profit
lost due to the lower interest rates. Therefore, branches need to have a flexible
policy on interest rates, fees, and prices in order to maximize benefits from
customers.
d) Promote the application of modern technology in the provision of products
and services.
As the largest major branch of the entire BIDV system, So giao dich 1 Branch
has always been at the forefront in the deployment of new banking products and
services, in the era of the 4.0 technology revolution. Strongly, in order to increase
competitiveness with other banks, the Branch needs to promote the provision of
high-tech products and services as well as the application of technologies in data
management and information management. information, handling operations for
customers.
Currently, along with the trend of digital banking taking place around the world,
BIDV has identified the application of digital technology in banking operations as a
development strategy. BIDV Ibank's electronic banking product for institutional
customers of BIDV was launched with many outstanding features.
The product is designed with multiple features, with a modern interface,
supporting user experience via the internet and mobile devices, and at the same time
allowing transaction processing by many mechanisms and targeting customers with
the ability to connect directly with the internal accounting system to push payment
orders to BIDV without writing orders directly at the program. With BIDV iBank,
customers can perform transactions with the bank such as: Inquiry of deposit
accounts, loans, guarantees; Conduct domestic and international money transfer and
salary payment; Sending documents containing digital signatures through the
82
program for the bank to execute with the same legal value as the original document;
Information inquiry for merchants. Clients will also effectively manage cash flow
between parent-child accounts; View transaction statistics report, check transaction
status by time and time period; To be provided with cash flow management reports
of members of the Group / Corporation ...
The branch should promote the implementation of BIDV Ibank to all
institutional customers of the branch including corporate customers, financial
institutions and other institutional customers with regular transaction relationships
at the branch. by organizing a meeting at customers to introduce the product,
sending staff directly to guide at the customer's office ...
In addition, on the basis of the needs of each specific customer, with large
customers with specific activities, with the potential to exploit modern products and
services, in coordination with BIDV Head Office, based on the technology platform
of BIDV to design suitable products and services for customers. For example, a
cash flow management service for a client is an insurance company with many
branches
Expansion of ATM network; POS machine. Researching and installing ATMs in
densely populated central locations such as apartment buildings, commercial
centers, resorts, resorts ...
Promote the marketing and installation of POS for direct cash sales customers or
retail customers, focusing on customers with the potential to bring large payment
sales such as customer chains hotels, restaurants, hospitals, schools, shops ...
e) Improve brand
Today, the brand is an intangible asset with very important value, directly
affecting the customers' decision to use products and services. With the advantage
of being the largest branch of one of the four state-owned commercial banks (Big
Four), Exchange 1 needs to take advantage of this advantage to develop and create
its brand name and reputation in the banking market. the whole country as well as
Hanoi.
Some solutions to improve brand awareness, improve the position of So giao
83
dich 1 Branch:
- Participate in funding for key national projects, projects related to socio-
economic infrastructure of the State ...
- Implement comprehensive cooperation including: providing short-term
credit, project investment credit, providing full banking services to large-
scale, well-known enterprises and organizations.
- Communication of major events of the Branch on newspapers, social
networks ...: anniversary of establishment, events of signing large value
credit contracts with partners, investor sponsorship and home buyers in real
estate investment projects ...
- Hanging bandrolls, advertisements on the streets of the central area around
operating areas in Hoan Kiem, Hai Ba Trung ...
3.4 Recommendations to the State Bank of Vietnam and Head Office of BIDV
3.4.1 Recommendations to the State Bank of Vietnam
The Government and the State Bank of Vietnam need to continue to improve
institutions for banking operations, issue a decree on debt trading market, direct the
solving of problems related to bad debt handling according to Resolution 42 of the
National Assembly. Festival; amending the non-cash payment scheme; Legal
framework (including the trial management mechanism - Regulatory Sandbox) for
Fintech, digital banking, peer-to-peer lending, e-wallet, mobile money, banking
cooperation - Fintech and Bigtech, data sharing data ..., creating conditions for
credit institutions to successfully deploy digital banking.
The Government continues to direct and accelerate the construction of national
databases, especially population data. This is the basis and premise for banks to
build a modern product program to serve the economy.
Request the State Bank to allow the rearrangement, reallocation of the network
of transaction offices in different provinces / cities. This contributes to
strengthening the ability to provide services to localities, especially agricultural and
rural areas, in line with the guidelines and orientations of the Government and the
84
State Bank.
It is suggested that the Government continue to promote the digitalization
program, widely applied in the fields of life and society. Develop a national
database system and have a way to effectively exploit banking and finance
activities, serving national development and social management.
Need to expand and develop the capital market with more financial depth.
Having an open policy allows organizations and enterprises to access the market
more easily; offering solutions to reform the institutional system and technical
solutions to meet the ranking criteria on the stock market, thereby increasing the
attraction of domestic and foreign investment capital, to meet the increasing
demand. economic growth.
Proposing to expand the application of electronic signatures, E-KYC, promote
banking cooperation with Fintech companies, enhance security, safety coordination,
and security in banking solutions based on the digitalization platform, helping to
optimize customer experience in using products and services in digital channels,
improving the interoperability between banks and customers, creating new and
practical experiences. , contributing to the strong development of digitalization in
the banking sector in the coming time.
3.4.2 Recommendations to the Head Office of BIDV
BIDV Head Office is the unit that directly manages, directs and operates the
whole system, including branches and member units through the issuance of
regulations, instructions, instructions, and Orientation… Therefore, in order to
create a favorable basis for the Branch to improve its competitiveness in the area,
So giao dich 1 Branch has made a number of recommendations to the Head Office
as follows:
- Regulations and processes towards simplifying the process and procedures of
banking records thereby helping the bank improve service quality: shorten borrowing
time ...
- Research and development of products and services that are different and
85
innovative compared to existing products on the market.
- Issuing preferential credit packages with attractive interest rates that can
compete with other banks
- Competitive fund mobilization interest rate mechanism, accompanied by
promotions, winning numbers, giving gifts to customers ...
- Invest in the technology system of the whole system to improve labor
efficiency, improve the quality of products and services and meet the increasingly
86
strong and extensive digitalization trend.
CONCLUSION
Competition is indispensable for businesses, including banks to survive and
develop, so enhancing competitiveness becomes a vital factor that every
organization must strive to find solutions. to perform.
With the initial target set out, the topic: Solutions to improve the
competitiveness of the Joint Stock Commercial Bank for Investment and
Development of Vietnam – So giao dich 1 Branch has implemented the following
contents:
- Presenting in a comprehensive and systematic way the theoretical bases on
competition and competitiveness, researching experiences in enhancing
competitiveness at major banks in the world.
- Evaluate, analyze, synthesize objectively, scientifically and logically the
current competitive capacity of BIDV, So giao dich 1 Branch.
- Proposing solutions to improve competitiveness at BIDV So giao dich 1
Branch
In order to improve competitiveness, banks have many different solutions,
however, in order to associate with the practicality at BIDV, Transaction Center 1
branch, the topic only goes into depth analysis and offers solutions. Core and
focused solutions include solutions to improve human resources, solutions to
differentiate products and services, marketing solutions, customer policies,
technology solutions and identity solutions. trademark. With the contents of the
topic done, the author hopes to contribute to better improve the competitiveness of
BIDV So giao dich 1 Branch, contribute to improving business efficiency for the
87
Branch. Branch firmly steps on the path of development and integration.
REFERENCE LIST
1. Political Economy Marx-Lenin - Assoc.Prof. Dr. Ngo Tuan Nghia Chairman
of the Compilation Council in 2019
2. Competitive Strategy - Michael E. Porter, 1985
3. Competitive Advantage - Michael Porter, 1985
4. Papers On the Appropriateness of the Concept of Entry Barriers in
Competition Strategy Theory - Barney, McWilliams, & Turk, 1989
5. Article Assessing the competitiveness of Vietnamese banks in the context of
ASEAN economic integration - Author Nguyen Thi Nga, Pham Ngoc Huyen
on the Money Market Journal No. 13 in 2019
6. Article Theory of banking competitiveness - author Luong Xuan Minh,
Nguyen Thi Thu Trang published on the Journal of Industry and Trade on
January 23, 2020.
7. The role of the Vietnamese banking system in 20 years of reform - State
Bank of Vietnam Office
8. http://vinanet.vn/kinhte-taichinh/kinh-te-viet-nam-2016-2019-va-dinh-
huong-2020-724628.html
9. https://caphesach.wordpress.com/2012/12/08/nhung-nguon-luc-cua-doanh-
nghiep-va-duy-tri-loi-the-canh-tranh-phan-ii/
10. http://vneconomy.vn/tai-chinh/khung-hoang-no-duoi-chuan-tai-my-tu-a-den-
z-62186.htm
11. https://www.rancord.org/bank-of-america-business-model-generic-strategy-
intensive-growth-strategies-competitive-advantage
12. https://www.tr.mufg.jp/english/ourservices/realestate/advantages/advantages
_index.html
13. http://dkra.vn/pdf/kinh-te-vi-mo-va-moi-truong-chinh-sach-tac-dong-tt-bds-
2019-2020-f_vi_1578557706.pdf - TS Cấn Văn Lực
14. http://vinanet.vn/kinhte-taichinh/kinh-te-viet-nam-2016-2019-va-dinh-
88
huong-2020-724628.html
APPENDIX
APPENDIX 1. QUESTIONNAIRE IN ENGLISH
Code: ……………
Dear Sirs/Madams!
I am Tran Thanh Binh.- Master student of HSB-MBA12, in Hanoi Schoole of
Business (HSB), Vietnam National University.
Currently, I am researching on the topic of “Solutions to improve the competitiveness of Bank for Investment and Development of Vietnam – So giao dich 1 Branch” and would like to study this issues in reality to serve for our graduation thesis. I hope you can take your time to answer some questions below.
Please also note that your responses are the basis for our evaluation the research’s current status, therefor I am looking forward to receiving your detailed and honest answer. All relevant information will only be available for research purposes and will be fully confidential.
Thanks for your cooperation and help!
Number
Question
1
2
3
Note
Deposit
Loan
1
Other service
Type of product and service of BIDV So giao dich 1 Branch that you are using
you
giao
dich
is a of
2
Very diversified, fully meeting the needs of customers
Not diversified not yet, meeting the needs of customers
Quite diverse, however, there lack special products and services
giao
is
Very good quality
Quality decent
Low quality
review Do whether the products and services of BIDV 1 So Branch have been diversified and met the of needs customers? How would you rate the quality of BIDV dich So 1 Branch's products and services?
3
89
4
other
Savings interest rates higher than other banks
5
Lending higher than other banks
other
dich
giao
other
6
Service fees higher than other banks
How would you rate the savings interest rate of BIDV So giao dich 1 Branch? How do you rate the lending interest rate of BIDV So giao dich 1 Branch? How do you rate the service fees of BIDV So 1 Branch?
Savings interest rate equivalent to banks Lending interest rate equivalent to banks Service fees equivalent to banks
Savings interest rates lower than other banks Lending interest rates lower than other banks Service fees lower than other banks
policy
Pleased
Unsatisfied
7
Very pleased
How do you evaluate the customer care service of BIDV, Transaction Center 1 Branch?
Some customers report the to transaction but have not been specifically advised by bank officials ...
Please provide some personal information (if possible):
Name: ……………………………………………………………………..
Email: ...................................................…………………………………...
Mobile: ........................................................................................................
90
Sincerely thank you and wish you health, success!
