Gr3 commercial banking 1 draft

Bạn đang xem bản rút gọn của tài liệu. Xem và tải ngay bản đầy đủ của tài liệu tại đây (245.13 KB, 15 trang )

Trang 1<div class="page_container" data-page="1">

Gr3 Commercial-banking-1- Draft

International financial management (Đại học Kinh tế Quốc dân)

Scan to open on Studocu

Gr3 Commercial-banking-1- Draft

International financial management (Đại học Kinh tế Quốc dân)

Scan to open on Studocu

</div>Trang 2<div class="page_container" data-page="2">

NATIONAL ECONOMIC UNIVERSITY ADVANCED EDUCATION PROGRAM

Title of the essay:

PRODUCTS AND PRICE RELATING TO DEPOSITS OFFEREDTO INDIVIDUAL CUSTOMERS BY SELECTED COMMERCIAL

BANKS IN VIETNAM: FIGURES AND ISSUES

Course name: COMMERCIAL BANKING 1 (NHTM1102E)

Member: Nguyen Thi Kim Dung - 11218647

Nguyen Khoa Lam Khanh - 11212808 Le Thi Linh Chi - 11211073

Class: Corporate Finance 63E

Mentor: Truong Thi Hoai Linh

</div>Trang 3<div class="page_container" data-page="3">

LIST OF HEADINGS

Abstract...1. Introduction...2. Products and price relating to deposits offered to individual customers by

selected commercial banks in Vietnam: figures and issues...

2.1. Products relating to deposits offered to individual customers by selected

commercial banks in Vietnam... 2.2. Price relating to deposits offered to individual customers by selected

commercial banks in Vietnam... 2.3. Analysis and evaluation on the deposit products and prices given by

selected commercial banks...

3. Conclusion...References...

</div>Trang 4<div class="page_container" data-page="4">

The Vietnamese banking sector has undergone significant transformation in the process of industrialization and modernization of the country. Regulatory changes and technological advancements have led to changes in the way banks operate and expand their services to meet the increasing demands of the banking industry and customers. The deposit product offered by commercial banks is one of the most popular financial services in today's banking industry. As the financial market becomes increasingly competitive, commercial banks are striving to create more diversified and flexible deposit products to attract customers. Some new deposit products have been developed, including short-term deposits with higher interest rates and greater flexibility in withdrawing money. The essay will discuss in-depth the deposit products and their interest rates offered by three major commercial banks in Vietnam: BIDV, HD Bank, and Agribank. The purpose of the study is to examine the role and influence of deposit products and their prices on the operations of banks and their individual customers.

1. Introduction

The banking industry in Vietnam has witnessed rapid growth and development over the past few decades, with a significant increase in the number of commercial banks operating in the country. Among the most popular financial products offered by these banks are deposit accounts, which allow customers to save money and earn interest on their savings. However, with a wide range of deposit products available in the market, it can be challenging for customers to choose the right product that aligns with their financial goals and needs.

This article aims to address this challenge by providing an overview of the deposit products offered to individual customers by selected commercial banks in Vietnam. We will explore the features and benefits of these deposit products, along with their respective prices and interest rates, to help customers make informed decisions. By comparing the products and prices offered by different banks, this article aims to shed light on the differences in their strategies, target customers, and risk management practices. In addition, by analyzing and comparing the criteria, we will provide the most objective evaluations of the selected bank's deposit products, and these analyses may help customers choose the right deposit product that meets their specific needs and maximizes their savings potential.

To gain insights into the market trends and offerings of deposit products offered to individual customers by commercial banks in Vietnam, this article focuses on three banks with different capital scales: BIDV, Agribank, and HD Bank. BIDV is one of the largest state-owned banks in Vietnam, with a significant presence in the domestic and international markets. Agribank is another state-owned bank that specializes in serving the agricultural and rural sectors, while HD Bank is a joint-stock commercial bank that targets the retail and SME segments.

The structure of our paper is as follows: section 1 and 2 provides information about products and prices relating to deposits offered to individual customers by selected commercial banks in Vietnam, respectively. In section 3, we will analyze and evaluate each bank’s deposit product.

</div>Trang 5<div class="page_container" data-page="5">

2. Products and price relating to deposits offered to individual customers by selected commercial banks in Vietnam

2.1. Products relating to deposits offered to individual customers by selected commercial banks in Vietnam.

In the banking industry, deposits are one of the main services provided by banks to customers. Personal deposits are the safest and most popular form of investment among deposit products offered by banks in Vietnam. However, with a variety of choices and differences in interest rates, service fees, and transaction conditions among banks, choosing a suitable deposit product can become challenging for customers.

To help customers have a comprehensive view of deposit products offered by banks in Vietnam, we have compiled and compared personal deposit products of major banks including Agribank, BIDV, and HD Bank.

All these three banks BIDV, HD Bank, and Agribank, both provide term deposit products and payment accounts for individual customers. However, there are still similarities and differences between the products offered by each bank in terms of key product information, transaction conditions, and the benefits of the deposit products. This will be summarized in two tables below.

depositFeaturesBIDVHD BankAgribank

Types of currencyVND, EUR, USD.

Interest ratesFixed interest according to the current interest rate.Purpose of using

account balance

Confirm customers’ financial capability or to guarantee their relatives’ overseas travel and study, etc.

Valid ID/Citizen identity card/Passport (not more than 15 years).Confirm open an account.

Benefits Guaranteed returns, Low- risk investment, Flexible terms, Easy to open, Competitive interest rates.

Tenors1 to 24 months End of term: 1-36 months

Periodically: 3-36 months Monthly

</div>Trang 6<div class="page_container" data-page="6">

withdraw Allow account holders to deposit and withdraw funds at any time Minimum balance 50,000VND; 10USD; 10EUR.

Target clientsIndividuals who are Vietnamese citizens and foreigners.

Offer competitive interest rates and a range of payment options;provide cashback and discounts for certain transactions andpurchases made using their payment cards, and rewards and loyaltyprograms for their customers

The similarities in the features of term deposits and payment accounts among BIDV, HD Bank, and Agribank may be due to these factors being important and fundamental aspects of deposit products, which the banks apply to meet the needs of their customers.

Another reason for the similarities in the features of deposit products among the three banks is the competitive market environment in the banking industry. All three banks operate in a highly competitive market, where they need to offer attractive deposit products to retain existing customers and attract new ones.

Additionally, the similarities could also be due to regulatory requirements. The State Bank of Vietnam (SBV) sets certain rules and regulations that all banks must comply with when offering deposit products. For instance, the SBV may require that all banks offer deposit accounts in multiple currencies or that they offer fixed interest rates for term deposits.

Overall, the similarities in the features of term deposits among BIDV, HD Bank, and Agribank can be attributed to a combination of factors, including customer demand, competition in the banking industry, and regulatory requirements.

However, despite the similarities, there are still differences between the deposit products offered by each bank. The main factors are:

</div>Trang 7<div class="page_container" data-page="7">

- Business strategy: HD Bank focuses on serving young customers and SMEs through flexible

deposit products and online/mobile banking. Agribank caters to farmers and rural customers with deposit products featuring harvest payments, crop insurance, and financing for agricultural inputs. BIDV offers a diverse range of deposit products with features like automatic renewal, overdraft facilities, and preferential rates for loyal customers, catering to retail, corporate, and international customers.

- Regulatory requirements:Banks in Vietnam are subject to regulatory requirements set by the

State Bank of Vietnam, which can impact the terms and flexibility of their deposit products.

- Market demand: The demand for deposit products may be affected by a range of factors, such

as interest rates, economic conditions and changes in consumer behavior.

- Market competition: The competition from other banks and financial institutions can also

influence the features and terms of deposit products. Banks may try to differentiate themselves by offering more favorable interest rates, flexible terms, or additional benefits to attract customers.

- Cost of funds: The cost of funding can impact the interest rates paid to customers and the

terms of deposit products. Banks with lower funding costs may be able to offer more competitive interest rates or more flexible terms. (HD Bank and Agribank has a lower cost of funds; BIDV has a high cost of funds)

In addition to the two above products, the selected banks also provide products related to saving deposits. However, the quantity and characteristics of each type of product vary

- Online saving deposits

- Savings deposit with floating interest rate- Savings deposit with periodic installments- Savings deposit on school

- Savings deposit for retirement- Remittance savings

- Online savings deposit

To explain the differences in the quantity of saving deposit products among these 3 banks, there are many factors, including:

- Business strategy: Each bank has a different business strategy and different goals for deposit

products. HD Bank and Agribank focus on offering flexible savings products to attract individual customers, while BIDV focus on offering fixed-term savings products to attract both individual and business customers.

- Customer demand: Agribank offers savings products with favorable interest rates to support

education and retirement, while BIDV and HD Bank offer savings products which are suitable for both individual and business customers to support investment.

- Market conditions: If the financial market is stable and interest rates are low, banks may

focus on offering long-term savings products to attract customers and reduce financial risks.

- Competition: If a bank wants to compete with other rivals, they may focus on providing new

and diverse savings products to attract customers.

</div>Trang 8<div class="page_container" data-page="8">

2.2. Price relating to deposits offered to individual customers by selected commercial banks in Vietnam.

In this following section, we will explore the pricing strategies employed by selected commercial banks in Vietnam in relation to the deposits offered to individual customers. Deposit products are a crucial aspect of the banking industry, and the pricing of these products can have a significant impact on a bank's customer acquisition and retention rates. We will examine the various factors that influence pricing decisions, as well as the differences in pricing strategies among the selected banks.

Term deposit plays a very important role in providing long-term capital for banks and also helps customers invest safely and effectively. That's why it is a deposit product that most banks offer. However, the interest rates and related prices of the product differ among them.

The table below shows the interest rates offered by BIDV, Agribank, and HD Bank for term deposit accounts with different maturity periods. From the table, we can see that the interest rates offered by these three banks vary depending on the maturity period of the term deposit:

HD Bank offers the highest interest rates across all durations, with rates of 5.5% for a 3-month term, 7.0% for a 6-3-month term, and 7.4% for a 12-3-month term. However, their rates are slightly lower than the other two banks for longer-term deposits.BIDV and Agribank offer identical interest rates for each duration, indicating that they are in direct competition with each other for customers seeking term deposits.

The interest rates offered by these banks are relatively low compared to some other investment options, such as stocks or mutual funds. However, they are a good choice for investors seeking a low-risk, guaranteed return on their money.

In conclusion, through the above data table, we can see that banks have different policies on interest rates for different deposit periods of term deposit.

In addition to term deposit products, current accounts are also an important category of banking products. Current accounts allow customers to conduct everyday transactions, including receiving salaries, paying bills, and making purchases.

The table provides information on payment accounts at three Vietnamese banks, including BIDV, Agribank, and HD Bank, with different interest rates and monthly fees.

</div>Trang 9<div class="page_container" data-page="9">

Payment accountBIDVAgribankHD BankInterest rate 0.1%0.3%0.5%

Monthly fee 5000 - 15000 VND10000 VND5000 VND

All three banks offer payment accounts with varying interest rates and monthly fees. Payment accounts are designed to be convenient for customers to manage their finances with features such as bill payment and online banking. These accounts can be used to store short-term cash or to handle daily transactions. However, compared to other financial products, payment accounts typically offer lower interest rates.

The interest rates for payment accounts offered by these banks range from 0.1% to 0.5% per year. HD Bank provides the highest interest rate of 0.5% per year, which is significantly higher than Agribank's average interest rate of 0.3% per year and BIDV's 0.1% per year.

Monthly fees for payment accounts vary among the banks. BIDV has the highest fees ranging from 5,000 VND to 15,000 VND, Agribank charges a flat fee of 10,000 VND, and HD Bank has the lowest fee of 5,000 VND.

In summary, through the above table, we can see that the banks have different policies on interest rates and fees for their payment accounts.

The prices of deposit products offered by each bank may vary for various reasons, including:

- Business strategy of the bank: BIDV maintains stable interest rates to keep customers,

Agribank offers higher rates to support agriculture and rural development, and HD Bank offers higher rates to attract and retain customers.

- Competition in the market: As one of the largest banks in Vietnam, BIDV competes with

other banks by providing better products and services. Agribank competes with expertise in agricultural and rural finance, while HD Bank focuses on rapid growth and development by offering new and effective products and services.

- Economic conditions: BIDV, Agribank, and HD Bank all depend on the country's economic

conditions to determine the interest rates for customers' deposits. If the economic conditions are difficult, banks may lower their interest rates to adjust to the market conditions.

2.3. Analysis and evaluation on the deposit products and prices given by selectedcommercial banks

We will look at and analyze the problems related to the pricing and product of deposits in this section. Customers consider pricing and product information to be two key elements when choosing a deposit product bundle. These two elements have overlapping problems and have a direct impact on the items that buyers choose. Each of the three chosen banks will have distinct policies and rules regarding elements relating to the nature and cost of deposits. Our team's evaluations of the benefits and drawbacks of deposit products at three banks - BIDV, HD Bank, and Agribank - are based on an analysis of these variables. This can assist individual clients in selecting a product bundle that suits their needs and budget.

As per our group's research, below are some issues that need to be analyzed in order to evaluate a bank's deposit products.

Regarding product:

</div>Trang 10<div class="page_container" data-page="10">

- Flexibility: Customers should be able to easily request for deposit and withdrawal time. - Profitability: Deposit products should have a high profitability ratio so that customers

can maximize their profits.

- Fees and costs: Customers need to consider the costs and fees associated with deposit products, including deposit and withdrawal fees.

- Risks: Customers need to consider the risks associated with deposit products. For example, in the case of uninsured deposits, customers should carefully consider before making an investment decision.

Regarding price:

- Profitability ratio: Customers need to consider the profitability ratio to ensure that they are receiving the best value for their deposits.

- Interest rate: Interest rate is one of the important factors in determining the value of deposits.

- Promotional programs: Customers can search for promotional programs such as gifts or discounts to increase the value of their deposits.

Based on these factors, we will examine and analyze the issues surrounding information on the product and price of deposits at three selected banks. And after that, we will identify the advantages and disadvantages of the deposit products offered by each selected bank.

Firstly, these are the pieces of information we have learned about the aforementioned

issues of BIDV:

+ Flexibility : BIDV offers flexible deposit products to meet customer needs, including demand deposit products like savings account and current account with no withdrawal penalties or minimum balance requirements, and term deposit products with higher interest rates but fixed terms and penalties for early withdrawal.

+ Profitability : BIDV's deposit products have varying profitability levels. Their term deposit products offer higher interest rates and profitability than their non-term deposit products. For example, in 2023, BIDV offers a 12-month term deposit with a maximum interest rate of 5.5% per year for deposits over VND 1 billion, while their non-term deposit products typically offer lower interest rates which are often under 1% per year. + Fees and costs : BIDV's deposit products have fees and costs, including deposit and

withdrawal fees, early withdrawal penalties, and account maintenance fees.

+ Risks : The risks associated with BIDV's deposit products include uninsured deposits, inflation, the risk of default or bankruptcy of the financial institution and interest rate fluctuations, which can impact the profitability of term deposit products if interest rates fall. For example, if a customer invests in a 12-month term deposit at 5.5%, but interest rates decrease during the period, they may miss out on potential higher returns.

+ Interest rate : BIDV's deposit products offer a variety of interest rates depending on the deposit amount, deposit term, and other factors. Generally, their term deposit products offer higher interest rates compared to their non-term deposit products. In 2023, BIDV offered interest rates ranging from 4.9% to 7.2% for their term deposit products with terms ranging from 3 months to 3 years. Their non-term deposit products, such as demand deposits, offered interest rates ranging from 0.1% to 0.3%.

+ Promotional programs : BIDV offers promotional programs for their deposit products, such as gifts, rewards, and discounts on services. One example is The "Golden Season

</div>