OVERVIEW OF VIETINBANK FOR INDUSTRY AND TRADE

Internship Report
Part I:
OVERVIEW OF VIETINBANK
FOR INDUSTRY AND TRADE – DAKLAK BRANCH
1.1. Overview of Vietnam Bank for Industry and Trade - VietinBank
Vietnam Bank for Industry and Trade – VietinBank was established in 1988, after
being separated from State Bank of Vietnam. VietinBank is one of the four largest State-
owned commercial banks of Vietnam. VietinBank’s capital resources keep on increasing
over the years and have been substantially rising since 1996 with the annual average
growth of 20 percent, especially up 35 percent a year against that of last year.
VietinBank has developed an operations network comprising of 01 Head Office; 03
Transaction Centers; 141 branches, 188 transaction offices, 258 points of sales and 191
savings offices, 742 Automatic Telling Machines (ATMs), throughout 56 provinces and
cities, centered more in big cities such as Hanoi (12 branches and 02 transaction centers),
Ho Chi Minh City (17 branches and 01 Transaction center), industrial zones, trading and
economic parks, densely-populated areas. VietinBank’s traditional services as well as
other modern and valued added services have reached nation-wide users. This has enabled
VietinBank to diversify its products suitable to each segment of customers.
Being diversified with 03 independent accounting subsidiaries: VietinBank Leasing
Company, VietinBank Securities Company, Ltd., VietinBank Liability Management and
Asset Development Company and Insurance Company, Ltd, and 03 non-profit making
units: VietinBank Information Technology Center and VietinBank Training Center,
Training and Human resources Development Center.
Being the founder of the following Financial Credit Institutions:
- Saigon Bank for Commerce and Industry
- Indovina Bank (the first joint-venture bank in Vietnam)
- Vietnam International Leasing Company – VILC (the first financial leasing
company in Vietnam)
Nguyễn Thị Hồng Châu 1
Internship Report
- VietinBank – Asia Insurance Company

Being the official member of:
- Vietnam’s Banker Association
- Asian Banker’s Association
- Society for Worldwide InterBank Financial Telecommunications (SWIFT)
- Visa International Services Association
VietinBank has signed 8 framework-credit Agreements with foreign countries,
including: Belgium, Germany, South Korea, Switzerland and established correspondent
relationship with 600 large banks of 50 countries and territories all over the world.
VietinBank is the first bank in Vietnam to apply modern technology and e-
commerce in its banking operations.
1.2. Vietnam Bank for Industry and Trade – DakLak Branch
1.2.1. The process of formation and development of Vietnam Bank for Industry
and Trade - DakLak Branch
Vietinbank Dak Lak is a member of VietinBank Vietnam, and was established by
the Decision 21/QD – VietinBank Vietnam on 12/02/1999 of the Chairman of the Board
of VietinBank Vietnam. After the preparation of the infrastructure, personnel and
organizations, VietinBank DakLak officially started to operate on 08/07/1999.
Like other Commercial banks in the area, VietinBank DakLak has functions such as
mobilizing capital, making credit, Banking security services, accounting payment,
Banking fund and other tasks. In spite of being a young branch compared with other State
owned commercial banks which have operated for a long time, VietinBank DakLak has
gained many achievements such as exceeding the level of mobilization, lending’s account
outstanding of the year higher than the previous, especially from the first year, first
quarter of the operation… Up to now VietinBank DakLak has made its own reputation in
the province to improve the quality of passenger service. The branch has opened two
more transaction offices: One at No. 25 Phan Chu Trinh – Buon Ma Thuot City and one
named transaction office Buon Ho – Buon Ho town, KrongPak dist., DakLak province.
Nguyễn Thị Hồng Châu 2
Internship Report
The staff since its establishment had 15 to 74 people now. 80% have University level

and constantly improve their skills, tasks, to assert the position as one of the four main
commercial banks of the country as well as provide capital to the development of the
province.
1.2.2. Structure
Each unit, each field of industry has a different requirement for the number and level
of their labor. How reasonable, how effective to allocate the human resources becomes
necessary. Because of that importance, every organization should build a system that
suitable for the duties of each period.
Diagram: The structure of VietinBank DakLak
Direct relation
Functional relation
This structure is convenient for the activities of VietinBank DakLak. Beside the
direct relation between superiors and subordinates, VietinBank DakLak in its operation
show the functional relation among the departments. In addition to completing the specific
tasks, professional responsibilities of each department, VietinBank has linked closely all
of the departments together to make the work more convenient and effective. All activities
of the bank are under the supervision of the internal supervisory department. With the
typical activities of banking, this is a suitable system. It works well in the job of each
department as well as the job of the whole bank to help the board of management control
all happenings and solve problems on time.
Nguyễn Thị Hồng Châu 3
DEPUTY DIRECTOR
Buon Ho
T.Office
Phan Chu
Trinh T.Office
Accounti
ng
Dept.
Personnel

Dept.
Transaction
Dept.
Cash &
Vault Dept.
Customer
Dept.
DIRECTOR
Risk
Management
Dept.
DEPUTY DIRECTOR
Internship Report
Part II:
THE MATTER’S ANALYSIS
2.1. The making loans’ summary of VietinBank DakLak:
Table 1: The lending’s status of Vietinbank DakLak
Unit: Million VND
INDICATORS
2008 2009 VARIANCE
AMOUNT % AMOUNT % AMOUNT %
Volume of
lending
1,752,208 100% 2,181,854 100% 429,646 24.52%
Short-term 1,502,762 85.76% 2,005,600 91.92% 502,838 33.46%
Medium &
Long-term
249,446 14.24% 176,254 8.08% -73,192 -29.34%
Volume of
collecting

1,463,727 100% 1,981,265 100% 517,538 35.36%
Short-term 1,298,681 88.72% 1,883,012 95.04% 584,331 44.99%
Medium &
Long-term
165,046 11.28% 98,253 4.96% -66,793 -40,46%
Debt balance by
loan category
1,016,238 100% 1,216,827 100% 200,589 19.73%
Short-term 437,985 43.09% 560,573 46.06% 122,588 27.99%
Medium &
Long-term
578,253 56.91% 656,254 53.94% 78,001 13.49%
Bad debts 4,135 100% 2,793 100% -1,342 -32.45%
Short-term 3,100 74.97% 2,012 72.04% -1,088 35.1%
Medium &
Long-term
1,035 25.03% 781 27.96% -254 25.54%
Source: Customer Department
Short term loan making is the main activity in lending activity and general credit
activity. In the last 2 years short term debt balance in gross debt balance was down to
32% in 2008 and up to 43% in 2009. Athough VietinBank Daklak had the policy
increasing in making short term loan and decreasing in making medium and long term
loan, there are lot of other comercial banks in Daklak area so it had to compete strongly in
Nguyễn Thị Hồng Châu 4
Internship Report
lending activity. Therefore, the last 2 years the rate of short term loan making had a low
growth’s speed, only 32,2% in 2008 and in 2009, reduced to 30,6%.
The volume of lending in 2009 is 429.646 million VND( 24,52%) higher than 2008.
The volume of short term loan lending had a majority in total volume of lending . In
2008, it was 85,76% while volume of medium and long term loan lending were only

14,24%. In 2009 the volume of short term loan lending increased 502.838 million
VND( 33,46%), compared with 2008. However, the volume of medium and long term
loan lending decreased -29,34%.
The volume of collecting in 2008 was 1.463.272 million VND and in 2009 was
1.981.265 million VND, increased 35,36% compared with 2008. The volume of short
term loan collecting in 2009 was 1.883.012 million VND, increased sharply 584.331
million VND( 44.49%), compared with 2008.
Lending activity of VietinBank DakLak develops well, increases the ability to
compete with other Commercial banks in the area that showed through the debt balance
by loan category of 1,216,827 million VND in 2009, increasing 200,589 million VND
(19.73%) compared with 2008.
Bad debts in 2008 was 4,135 million VND, accounting for the rate of 4.07% of
total average debt balance. Overdue debt in 2009 was 2,793 million VND, accounting for
the rate of 2.3% of total average debt balance. The absolute reduction was 1,342 million
VND compared with 2008, and the rate decreased 32.45%, in which overdue short-term
debt was 2,012 million VND, accounting for the rate of 1.65% of total average debt
balance, decreased 35.1% compared with 2008 and overdue medium and long-term was
781 million VND, accounting for the rate of 0,% / total average debt balance, reduced
25.54 % compared with 2009. This was a bright sign of VietinBank DakLak. The rate of
bad debts which incurred in the year reduced, so it gave chance to make loans and recover
debts.
2.2. The making short-term loans’ summary of VietinBank DakLak:
2.2.1 The analysis of structure in short term loan making by economic sectors:
Table 2: Structure in short term loan making by economic sectors 2008-2009
Nguyễn Thị Hồng Châu 5
Internship Report
Unit: million VND
Indicators 2008 2009
Amount % Amount %
1.Volume of lending

- State-owned enterprise
- Joint-stock company
- Limited company
- Private company
- Other
1.502.762
482.988
371.633
340.977
92.720
214.444
100
32.14
24.73
22.69
6.17
14.27
2.005.600
686.116
412.351
484.754
160.047
262.332
100
34.21
20.56
24.17
7.98
13.08
2. Volume of collecting

- State-owned enterprise
- Joint-stock company
- Limited company
- Private company
- Other
1.298.681
402.461
366.358
255.451
87.141
187.270
100
30.99
28.21
19.67
6.71
14.42
1.883.012
642.295
375.284
416.146
148.570
300.717
100
34.11
19.93
22.10
7.89
15.97
3.Average debt balance

- State-owned enterprise
- Joint-stock company
- Limited company
- Private company
- Other
1.016.238
318.004
254.850
217.324
66.782
159.278
100
31.29
25.08
21.39
6.57
15.67
1.216.827
373.223
234.454
283.501
75.050
250.599
100
30.67
19.27
23.30
6.17
20.59
Nguyễn Thị Hồng Châu 6

Internship Report
Source: Customer Department
State-owned enterprise was the main lending object of VietinBank, about over 32%
in total volume of short term lending in 2008. Next was joint-stock company with the
volume of lending of 24,73% and limited company with the volume of lending of
22,69%. In 2009 the volume of lending increased 502.838 million VND and the growth’s
speed was 33,46%.Almost the volume of lending to economic sectors in 2009 was higher
than 2008. In 2009 the increase of volume of lending to private company was 67.326
million VND with the growth’s speed of 72,6% compared with 2008. It was the highest in
the increase of volume of lending to the total economic sectors.
The volume of collecting depends on the volume of lending. Therefore, as well as
the volume of lending, the volume of collecting in 2009 went up strongly. Among them
the increase of volume of collecting to State-owned enterprise was highest, up to 239.834
million VND( 59,59%) while the others did not increase much.
Besides, the average debt balance by sector category in 2009 increased less than
2008. Therefore, VietinBank should pay more intention in managing debt balance to
ensure that it would develop in next years.
2.2.2 The analysis of structure in short term loan making by fields:
Customers of VietinBank are all economic organizations and individuals which have
enough condition. In there customers who work in industry, trade and service are given
priority. However, in the last years VietinBank had the policy that expanded the scope of
investment into other fields.
Table 2: Structure in short term loan making by fields 2008-2009
Nguyễn Thị Hồng Châu 7
Internship Report
Nguyễn Thị Hồng Châu 8
Indicators 2008 2009
Amount % Amount %
1. Volume of lending
-Agriculture

-Trade
-Industry
-Others
1,502,762
23,143
432,194
649,193
398,232
100
1.54
28.76
43.2
26.5
2,005,600
41,115
592,454
733,247
638,784
100
2.05
29.54
36.56
31.85
2. Volume of collecting
-Agriculture
-Trade
-Industry
-Others
1,298,681
17,532

360,514
571,160
349,475
100
1.35
33.76
45.98
18.91
1,883,012
38,225
556,242
688,429
600,116
100
2.03
29.54
36.56
31.87
3. Average debt balance
-Agriculture
-Trade
-Industry
-Others
1,016,238
11,719
353,653
486,535
164,331
100
1.15

34.80
47.88
16.17
1,216,827
10,915
356,219
550,125
299,568
100
0.90
29.27
45.21
24.62
Internship Report
Source: Customer Department
In DakLak agriculture mainly produces coffee.This sector has a low rate debt
balance, 7,54%, in total debt balance in 2008. In the last 2 years companies which work in
agriculture had to face many serious difficulties, high risks, many of them were in hard
situation or went bankrupt. Therefore, VietinBank DakLak had the policy that decreased
actively the volume of lending in agriculture and focused on industry, especially on
hydroelectric plans. Trade and service sector had a highest proportion in total debt
balance in 2008 and 2009. Industry had the rate of 28.76% in 2009. In last 2 years, debt
balance in 2009 increased 160.260 million VND( 77,65%) compared with 2008.
Other sector: had the great volume of lending. In 2009 it increased 240.552 million
VND and had the growth’s speed of 60,4%.
In recent time the structure of short term loan lending of VietinBank DakLak has
followed the instructions of Vietnam Bank for Industry and Trade that is safety, effective,
suitable to the changes of market.
2.2.3 Analysis of secured and non secured short term loan:
Unit: million VND

Indicators
2008 2009
Amount % Amount %
1. Volume of lending
- Secured by property
- Not secured by property
1.502.762
1.023.554
479.208
100
68,11
31,89
2.005.600
1.329.087
676.513
100
66,27
33,73
Nguyễn Thị Hồng Châu 9
Internship Report
2.Volume of collecting
- Secured by property
- Not secured by property
1.298.681
924.491
374.190
100
71,19
28,81
1.883.012

1.231.002
652.010
100
65,37
34,63
3.Average debt balance
- Secured by property
- Not secured by property
1.016.238
785.998
230.240
100
77,34
22,66
1.216.827
871.221
345.606
100
71,60
28,40
Source: Customer Department
In 2009, the volume of secured short term loan lending had a high proportion,
66,27%. This happened because VietinBank had focused on lending secured loans which
had collateral were real estate, land,… that are hard to damage. Therefore, those loans had
low risk, high safety. In contract, the volume of non secured loan had a low proportion
compared with secured loan.
In recent years, VietinBank had expanded the scope of customers, appraised lending
profile more closely before lending and after lending, credit officers had inspected and
managed the lending purpose of customers strictly. Therefore, the volume of collecting
had been raised. In 2009, the volume of collecting of secured increased sharply 1.231.002

compared with 2008.
Nguyễn Thị Hồng Châu 10
Internship Report
PART III – CONCLUSIONS & PROPOSALS
3.1. Conclusions
After researching the short-term lending situation at VietinBank DakLak, I offer a
conclusion as followed:
Credit activity is always a key part of banks. Expanding the credit volume is
necessary to expand the operation of banks. However, the matter of credit’s quality
decides the existence and development of the banks.
Despite having many problems in the lending activity, and increasing in the rate of
overdue debts, but the short-term credit activity of VietinBank DakLak generally
increases in the last years: The volume of lending increased 90,516 million VND, the
volume of collecting debts increased 28,544 million VND. That shows the effort of the
Nguyễn Thị Hồng Châu 11
Internship Report
bank in expanding the scope, in striving constantly, as well as in the resolutions for
overdue debts, to deserve to its position in the development of DakLak.
VietinBank DakLak has to encounter many difficulties that need to be resolved, in
short time and long time also. Moreover, it has followed the circular number 2 on
05/02/2002 by the Ministry of Justice and the State of Vietnam, guiding the
implementation process of selling mortgage assets to collect debts and get benefits for the
bank.
To really improve the ability in short-term credit activity, the bank needs to develop
the diversification of credit, fields, object loans, increasing advertising and marketing…
In addition, credit activity has to attach to the policies of the Party and State, the
guidelines of the local to have the right way for the activities of the bank.
With its own advantages, VietinBank Daklak has achieved many remarkable
achievements, and showed its important role in providing capital in the area.
3.2. Proposals

Through the practice in nearly 3 months at VietinBank DakLak, I have found out the
bank’s credit activity in recent years. I have some suggestions as followed:
About the internal of VietinBank DakLak, it should:
• Reduce the process of documents, save time, make it quick and convenient for the
customers.
• Concentrate much to short-term loans because it get most benefits to the bank.
• Pay attention to the time of borrowers’ operation because it influences the time they
pay debts…
In the economy of our country, the State should closely control and have some
effective resolutions to make a stable macro-economic environment for the economic
sectors to develop easier. Besides, the Government also needs to complete the legislation,
ensure the security and reduce the risks in credit of commercial banks.
Nguyễn Thị Hồng Châu 12
Internship Report
For the domestic commercial banks to increase the ability to compete with foreign
banks, who are gradually entering the banking services market in Vietnam, the State Bank
should issue the open policies, give chance to commercial banks but not release them,
especially for the State-owned enterprises (SOE) to operate more and more effective.
The State Bank should adjust the regulations on interest rate of banks reasonably, for
the commercial State-owned banks to take the initiative to fix the competitive interest
rate.
The senior banks and the related units need to have the more specific and flexible
guiding text about the credit activity of banks. The documents about mortgaged property,
pledge, guarantees of credit require the participation of many different fields such as
banking, security, courts… This link gets benefit to all of the participation as well as to
the social economic development in the area.
Nguyễn Thị Hồng Châu 13