Individual Loan Services At The Orient Commercial Joint Stock Bank - Nguyen Trai Transaction Office.pdf

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<b>STATE BANK OF VIETNAM</b>

<b>BANKING ACADEMY OF VIETNAM</b>

<b>FACULTY OF FOREIGN LANGUAGES</b>

O0O

<b>INTERNSHIP REPORT</b>

<b>MAJOR: ENGLISH FOR BANKING AND FINANCE</b>

<b>INDIVIDUAL LOAN SERVICES AT THE ORIENTCOMMERCIAL JOINT STOCK BANK - NGUYEN TRAI</b>

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Hoàng Minh Tuấn | K20ATCC

<b>Statement of the Authorship</b>

Student name: Hoàng Minh TuấnClass: K20ATCC

Student ID: 20A7510195Declaration

I declare that the work attached is entirely my own, and that I have given dueacknowledgement as required by the Faculty of Foreign Languages.

I understand that the submitted work can be reproduced and / or communicated forthe purpose of detecting plagiarism.

Signed Date: May 20/2021Plagiarism

By signing the statement, you declare that you have not plagiarized. Use the following as a checklist.

☑ This work is entirely my own.

☑ I have not copied another student’s work.

☑ I have not copied or used in any way material from a text, journal, website orother published source without acknowledgement (including non – English sources).

☑ I have cited and referenced fully and correctly as required by the Faculty ofForeign Languages where applicable.

☑ I have not reworded material from another source and presented it as my own.☑ I have not used this work in a previous class (self – plagiarism).

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First of all, with sincere gratitude, I would like to say thanks to everyone whosupported me throughout the process of studying and researching this topic.Through my internship at Nguyen Trai Transaction Office, Orient Commercial JointStock Bank, I have had the opportunity to access and study much valuableknowledge that I have never known before. Thanks for the friendly advice andencouragement I received during my internship.

I would love to explicit my heat gratitude to Mr. Le Xuan Linh, Director of OCBNguyen Trai, for facilitating me to access activities at banks and departments. I wouldalso like to thank Ms. Pham Hong Tham, the Credit officer who directly taught mevaluable experiences and lessons, and all the other staff members at OCB NguyenTrai who enthusiastically gave me their time guided me to complete the internship.I sincerely thank my instructor - Mr. Ngo Tung Anh who has guided and given mevaluable advices. With deep gratitude, I would like to thank all lecturers from theFaculty of Foreign Languages for imparting valuable knowledge to me during mytime studying at the Banking Academy. Thanks to the instructions and teachings ofthe lecturers, my research topic can be completed successfully.

I am also thankful to my friends and people who inspired me to finish my internshipreport.

Last but not least, from my heart, I want to show endless gratitude to my family,they are an indispensable factor for me to accomplice what I have today.

<b>Hanoi, 20th May 2021</b>

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<b>Table of Contents</b>

<b>CHAPTER I. INTRODUCTION OF ORIENT COMMERCIAL JOINT</b>

1.1.<b>Brief History of Orient Commercial Joint Stock Bank (OCB) 1 </b>

1.2.<b>Functions and responsibilities of OCB 2 </b>

2.5.1. OCB – Nguyen Trai Transaction Office 9

1.5.2. Characteristics of Credit Department 10

<b>CHAPTER 2. INDIVIDUAL LOAN SERVICES AT OCB NGUYEN TRAI 11</b>

2.1.<b>Factors affecting the loan services 11 </b>

2.1.1.State regulations on loans services related to Commercial Banks 11

2.2.<b>Individual loan services at OCB Nguyen Trai 12 </b>

2.2.1.Business loan 12

2.2.2.House and apartment loan 14

2.2.3.Real estate loan 16

2.2.4.Home construction and repairs loan 17

2.2.5.Car purchase loan 19

2.2.6.Consumption unsecured loan 20

2.2.7.COM-B consumption unsecured loan 22

2.2.8.TOP-UP unsecured loan 24

2.3.<b>Achievements and limitations of individual loan services at OCB NguyenTrai 27 </b>

2.3.1.Achievements 27

2.3.1. Limitations 28

<b>CHAPTER 3: RECOMMENDATIONS TO UPGRADE THE QUALITY OF INDIVIDUAL LOAN SERVICES OF OCB</b> 303.1.<b>Solutions to increase brand awareness 30 </b>

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3.2.<b>Solutions to minimize overdue debts 32 </b>

3.3.<b>Solution to promote publicity and simplify loan procedures 33 </b>

<b>LIST OF ABBREVIATIONS</b>

CIC: National Credit Information Center

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<b>LIST OF FIGURES</b>

Figure 1.1: Ownership structure of OCB ... 2

Figure 1.2: OCB Organization Structure ... 6

Figure 1.3: Organization Figure of OCB Ngyen Trai ... 9

Figure 2.1: Total value of business loans at Nguyen Trai Transaction Office ... 13

Figure 2.2: Number of business loan customers at Nguyen Trai Transaction Office... 13

Figure 2.3: Total value of house and apartment loans at Nguyen Trai TransactionOffice ... 15

Figure 2.4: Total value of Real estate loan at Nguyen Trai Transaction Office ... 16

Figure 2.5: Total value of Home construction and repairs loan at Nguyen TraiTransaction Office ... 18

Figure 2.6: Total value of Car purchase loan at Nguyen Trai Transaction Office 20 ....

Figure 2.7: Total value of Consumption unsecured loan at Nguyen Trai TransactionOffice ... 21

Figure 2.8: Total value of COM-B consumption unsecured loan at Nguyen TraiTransaction Office ... 23

Figure 2.9: Number of COM-B consumption unsecured loan customers at NguyenTrai Transaction Office ... 23

Figure 2.10: Total value of TOP-UP unsecured loan at Nguyen Trai TransactionOffice ... 25

Figure 2.11: Number of TOP-UP unsecured customers at Nguyen Trai TransactionOffice ... 26

<b>LIST OF TABLES</b>Table 1.1: Business Volume of OCB in recent years ... 7

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According to the plan of the Banking Academy, my internship lasts more than 4months from 25 January 2021 to 5 May 2021. After my internship at OCB CreditDepartment - Nguyen Trai Transaction Office, I have an overview of bank'soperations as well as the works of a banker. Through this rewarding practice, I haveaccumulated many valuable experiences and lessons.

First of all, thanks to the consent and help of the Director of Transaction OfficeNguyen Trai. I was an intern in the Credit Department, and able to observe andstudy the details of the Transaction office such as the organizational structure,functions of all departments, especially individual loan services, along with thebank's business activities. After an internship, I have correctly understood theorganizational structure and especially lending activities at transaction offices.Second, my report describes the whole process that I researched about individual loanservices at Nguyen Trai Transaction Office. My internship at Credit Departmentwent through three main phases, which were (i) reading general and specificregulations relating to banking operations and lending procedures at the CreditDepartment; (ii) practicing a credit officer's key activities; (iii) processing andcompleting loan applications under the guidance of Credit officer - Ms. Pham HongTham. After a period of internship at OCB - Nguyen Trai Transaction Office, I canunderstand the business operations, processes, and procedures of the bank.Finally, besides participating in practical activities in the banking sector, I didresearch to point out and analysis of the strengths and weaknesses of the CreditDepartment of Nguyen Trai Transaction Office and Orient Commercial Joint StockBank (OCB). In addition, I also give specific recommendations for the bank'sshortcomings according to my observations at the Transaction Office.

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Hoàng Minh Tuấn | K20ATCC

Page 1

<b>CHAPTER I. INTRODUCTION OF ORIENT COMMERCIAL JOINTSTOCK BANK (OCB)</b>

<b>1.1. Brief History of Orient Commercial Joint Stock Bank (OCB)</b>

The full name of OCB is Orient Commercial Joint Stock Bank with its Head officelocated at 45 Le Duan, District 1, Ho Chi Minh City, Vietnam. OCB was establishedon June 10, 1996 with an initial Figureer capital of VND 70 billion. With the rapidand steady development, within only 24 years of development, OCB Bank hascurrently owned a Figureer capital of up to VND 6,599 billion, this number willcontinue to increase in the near future. 2020 was a very successful year with therevenue of 20.000 billion and the net profit result up to VND 1000 billion, this is anextremely impressive figure.

Slogan "Trust and prosperity" affirms that OCB brings value and prosperity tocustomers, partners and shareholders. Thereby this bank can build solid trust and gainsupport from customers, partners, and shareholders for the bank's operations.Over nearly 24 years of operation, OCB has gradually affirmed its firm position inthe Vietnamese commercial banking system, with many important developmentmilestones:

- Orient Commercial Joint Stock Bank (OCB) was licensed by the State Bank ofVietnam on April 13, 1996. The initial Figureer capital was 70 billion VND.- December 31, 2001: Opened the first branch (Ben Thanh Branch) and the firsttransaction office (Ham Nghi transaction office)

- August 2002: Joined Global Interbank Financial Telecommunication Association(SWIFT)

- January 14, 2003: Merged Tay Do Bank into Orient Bank.

- 2004: Joined the Vietcombank Card Service Alliance, joined the Western Unionfast money transfer system, and linked with Saigon Thuong Tin Bank in a numberof banking sectors.

- December 19, 2008: Signed a contract to deploy the core banking system betweenOCB - Vietnam and Temenos AG - Switzerland.

- September 16, 2009: OCB and Ernst & Young Vietnam officially signed a contractto provide support services to complete the internal credit rating system.

- November 6, 2009: OCB signed a shareholder book management contract withPhuong Dong Securities Joint Stock Company (ORS).

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<small>Aozora BankTrinh Van Tuan</small>

<small>Ben Thanh Corporation Cao Thi Que AnhPhan Trung</small>

<small>VinaCapital Vietnam Opportunity Fund</small>

<small>Trinh Mai Linh Trinh Mai Phuong Trinh Thi Mai Anh Other shareholders</small>

Figure 1.1: Ownership structure of OCB<small>15%</small>

- December 15, 2009: OCB announced to offer VND 600 billion of convertible bonds to the public, convertible bonds into common shares.

- In 2013, Total assets reached 33,000 billion VND.

- In 2016, Total assets reached 65,000 billion VND. Growth rate is in the group oftop 3 leading banks in the market.

- In 2017, Total assets are nearly 85,000 billion VND.

- In 2019, Achieved revenue of 20,000 billion VND and the result in a net profit ofup to 1000 billion VND.

<b>Main owners</b>

OCB is a joint-stock commercial bank with many shareholders, the largest one isAozora Bank Ltd, a Japanese commercial bank, and other individual andinstitutional shareholders.

(Source: OCB, OCB Ownership Structure, 2019)

<b>1.2. Functions and responsibilities of OCB1.2.1. Functions</b>

Through 24 years of operation and development, in addition to building financialsolutions that are suitable for each customer, OCB has constantly improved servicequality through improving processes, modern technology, and quality, towards

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customer-focused goals. As a joint stock commercial bank, OCB has the mainfunctions of a commercial bank. They are best demonstrated through the productsand services provided to customers.

<b>Main Functions</b>

- Credit intermediary function: OCB both plays the role of receiving deposits, andacts as a lender and earns profits, which is the difference between the depositinterest rate and the lending interest rate and contributes to the benefits of the bank.Deposits and loans are always the most important activities of a commercial bank. Itbrings the greatest profits.

- Payment intermediary function: OCB acts as the cashier for businesses andindividuals, makes payments at the request of customers such as deducting moneyfrom their deposit accounts to pay for goods and services, or enters into a client'sdeposit account sales and other charges on their order.

- Money creation function: Money generation is an important function, clearlyreflecting the nature of commercial banks. With the goal of seeking profits as themain task for their survival and development, OCB with its distinctive businessoperations has the function of making money for the economy.

<b>Products and services</b>

OCB savings products:

Oriental bank savings deposit is a deposit service with various terms for customers.Savings interest rates are also extremely attractive. Customers can receive interestperiodically or flexibly at the end of the period. When depositing OCB savings,customers will receive many attractive benefits such as the savings that are kept safeand secure during the deposit period, and the savings book can be used as collateral.Wishing to borrow loans at OCB banks and other credit institutions, savings booksare used to prove financial ability in case customers apply for tourist or study visas,pay tuition fees abroad, send cash and withdraw money at all OCB bankingtransaction offices nationwide, automatically receive savings interest into the bankaccount when interest is on due, OCB loan products offer customers a wide range ofproducts. Loan products, to satisfy your spending needs as much as possible.OCB loan services:

OCB Bank offers customers a variety of loan products, to satisfy the maximumspending needs of customers.

COM-B unsecured loan package is a consumer loan package for all customers. Customers just need to prove that their monthly income from 2 million VND can

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borrow money. A flexible loan is from 6 months up to 36 months with an extremelyattractive interest rate.

Top-up unsecured loan package is a loan product, helping customers take theinitiative in all expenses and activities of individuals and families. Maximumsupport for their financial plans is the most quick. Customers can borrow withoutcollateral. The maximum amount up to 200 million VND.

Loans to buy real estate, customers wishing to borrow houses, build and repair housesat OCB bank are all applied with extremely attractive lending policies. Loans up to100% of the value of the property to buy. Long loan term, up to 20 years to helpreduce the monthly debt repayment burden.

<b>OCB card products</b>

OCB is currently issuing 2 types of cards for customers to choose, which are debitcard and credit card. OCB has cooperated with major card organizations in theworld such as Mastercard, Visa, JCB, and domestic cards.

<b>Other products</b>

In addition to the main deposit and credit products, OCB also offers a wide range ofother financial products such as insurance services, international money transfer,and receipt, foreign currency trading, remittances ... etc.

<b>1.2.2. Responsibilities</b>

During the process of establishment and development, Orient Commercial JointStock Bank always puts the values of customers and partners first. With a vision ofbecoming one of the best banks in Vietnam, OCB has built itself a set of core valuesas well as distinct values. The entire staff of the bank are always actively learning,improving skills, and enthusiasm with customers.

The best evidence for reputation is the trust of customers. Each year, OCB servestens of thousands of customers across all business sectors. The number of customersis increasing year by year. The Bank also received many prestigious awards fromlarge domestic and foreign organizations. This is the recognition and appreciation ofOCB's contributions to the economy and the community.

Vision to become a good leading bank in Vietnam, and mission to create optimalsolutions that bring the highest value to customers and investors, positively contributeto the general development of the community and society through building a teamof

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enthusiastic staff, understanding the needs of customers, OCB has developed asystem of responsibilities to achieve goals, some of the key points are listed below.

- OCB develops and issues internal regulations on the professional operations ofcredit institutions to ensure there is a mechanism of internal control, audit, and riskmanagement associated with each business process, and plans to handleemergencies.

- Absolutely secure customer information.

- Having regulations on credit extension and loan management to ensure the correctuse of loans.

- Follow the regulations on asset classification, setting up and using the standardrisk provisions of the central bank

- Regulations on asset quality assessment and compliance with minimum capitaladequacy ratio.

- Liquidity management regulations, including procedures and limits on liquiditymanagement.

- Regulations on the internal control system and internal audit mechanism inaccordance with the nature and scale of operations of each department.

- Regulations on the internal credit rating system. Regulations on risk managementin credit institutions' operations.

- Regulations on processes and procedures, including customer identificationprinciples, to ensure preventing credit institutions from being used for moneylaundering, terrorism financing, and other crimes.

- Regulations on plans to handle emergency cases.

<b>Core values:</b>

(i). Customers are central, understanding and friendly- Customer satisfaction is the driving force for growth- Commitment to provide solutions tailored to needs (ii). Speed - Aspiration to pioneer and lead- The process is simple and fast

- Operation is accurate and efficient(iii). Profession - Transparent institutions- Strong professional expertise- Standard behavioral culture

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<b>Loan procedure:</b>

Applying for a loan: Proposing to sign a loan agreement showing loan intent withspecified terms. The party proposing to enter into a contract is a customer who has aneed for a loan at a bank. Usually, customers fill out an existing form from the bank.Appraisal of credit documents: Credit application appraisals are professional actsperformed by the credit department to determine the satisfaction of loan conditions,as a basis for lending decisions. An appraisal of the credit file is performed by thecredit officer and at the end of the assessment process is the preparation of anappraisal report.

Acceptance of offer to enter into a contract: This is an action a bank takes in theform of an official document sent to the customer with the content showing theagreement to enter into a contract. Considered as a statement of consent to enter intoa contract.

Signing a contract: After the credit file is approved, the parties will come to agreeon final terms and then sign a contract. According to the law, the representatives ofthe contracting parties must be the legal representatives, including the legalrepresentative or the authorized representative.

Disbursement: The bank disburses the client, providing the amount agreed upon inthe credit agreement. This amount can be disbursed once, or many times by cash orbank transfer.

<b>2.2. Individual loan services at OCB Nguyen Trai2.2.1. Business loan</b>

A business and production loan at OCB is a bank loan that provides additionalcapital needs of customers to produce, trade, provide services, expand the scale,improve competitiveness... The accepted business loan purposes are the purchase ofgoods and materials for investment in machinery and equipment, repair and upgradeof factories, production and business establishments, investment loans, andhousehold businesses...

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<small>Total loan amount (VND billion )</small>

<small>Number of customers (People)</small>

<b>Figure 2.1: Total value of business loans at at Nguyen Trai Transaction Office</b>

(Source: Internal database of Nguyen Trai Transaction Office)

<b>Figure 2.2: Number of business loan customers at Nguyen Trai TransactionOffice</b>

(Source: Internal database of Nguyen Trai Transaction Office)

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From 2016 to 2020, the number of customers increased by 66.67%, total loansincreased by 171.43%. Rapid growth extends into 2020 with an average growth rateevery year of over 13.2% and 34% respectively, the highest growth rate since theopening in 2013. This is the first time OCB Nguyen Trai has experienced fiveconsecutive years with customer growth of over 10% and loan growth of 30%.However, it can be seen that the growth rate is slowing down and entering thecurrent state of slow growth.

The growth is reflected in both sectors, the number of customers and the totalamount of loans developed quite strongly. In 2017, business loans increased by VND 6billion and played an important part in the overall growth of the Nguyen Traitransaction office. Growth in the total value reached only one billion and thenumber increased only about 5.5% in 2020 due to unfavorable conditions impactedby global epidemic Covid-19. The number of new customers was also delayed,reflecting lower demand while the number of late and bad debts increased.It can be seen that a uniform growth in both the number of customers and the loanamount, the more customers, the higher the loan amount.

<b>2.2.2. House and apartment loan</b>

Borrowing capital is no longer a strange concept for many people. When there is aneed to buy a house, most people with average income need to borrow money fromthe bank. Home mortgage loans are at OCB as a popular form of a loan. This is aform of collateral loan to be able to get loans with no too high-interest rates. With amortgage loan, the loan term is long term, up to 25 years. Collateral can be realestate or another equivalent. For mortgage loans, customers can borrow a largeamount of money and the long-term loan period depends on the value of thecollateral. A mortgage loan is a form of loan that requires assets to mortgages suchas a house, a car, or property of appropriate value. After that the mortgage is stillowned by the customer. However, if it is unable to repay the debt to OCB, the

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collateral will be transferred to the own bank. Because the loan amount is oftenlarge, it takes time to

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<small>Total loan amount (VND Billion)</small>

appraise the property, so the processing time of the loan application is also long because of many procedures.

Because a house or apartment loan is a one-time loan and owns a home, an analysisof the aggregate loan amount can reflect the number of customers and their demand.

<b>Figure 2.3: Total value of house and apartment loans at Nguyen Trai Transaction Office</b>

(Source: Internal database of Nguyen Trai Transaction Office)

In the 5 years since 2016, the total average growth rate of home loans increased by10.6 % per year and reached VND 26 billion in 2020 - the highest ever at NguyenTrai transaction office. Demand for loans for housing and mid-range apartments isgrowing particularly strong, record levels for continuously changing numbers, withhigh and steady growth. Total lending in the last 5 years has increased from VND17 billion to VND 26 billion, a total increase of 53 %. At the same time, the demandfor capital is expected to increase steadily, through surveys and market predictions.In 2020, although businesses are negatively affected, the number of customers whoborrowed money to buy houses at OCB did not decrease.

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<small>Total loan amount (VND Billion)</small>

<b>2.2.3. Real estate loan</b>

In Vietnam, real estate is one of the pillars of the economy, a dynamic ofmacroeconomic development. According to the Civil Code Law, Chapter 2, Article181, of this Code stipulates, "Real estate" that is "Non-movable property includes:Land; Houses, works attached to land; Other assets attached to land; Otherproperties as stipulated by law.” In the Civil Code Law, the noun "Real Estate" hasbeen explained in details.

The demand of customers to buy real estate for residential or investment purposes isincreasing. Loan products to buy real estate from OCB are receiving more and moreattention from those in need. One of the most highly valued assets today is realestate. Many people have to accumulate a lifetime or borrow money from manypeople with many difficulties to afford real estate. There are customers who havefound good real estate but have not been able to buy it because their financialconditions do not allow it. The most optimal solution at this time is to borrow froma bank to buy real estate. This solution helps customers to soon own the real estatethey want to live or invest in profitably.

<b>Figure 2.4: Total value of Real estate loan at at Nguyen Trai TransactionOffice</b>

(Source: Internal database of Nguyen Trai Transaction Office)

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With moderate inflation, steady economic growth, and mitigating risks, the realestate market is growing very thin and GDP is growing rapidly, the demand forloans to buy real estate is also stronger than ever. Total loans to buy real estate atNguyen Trai Transaction Office compared to the same period of previous yearsreached a peak at VND 8 billion in 2019. Loan demand is relatively stable in 4 yearsfrom 2016 to 2019. However, in a reaction move when economic activities wereaffected by the Covid- 19 epidemic, the number of real estate loans at OCBdecreased. Comparative loan volume over the same period last year has decreasedfrom a peak of VND 8 billion in 2019 to VND 6 billion in 2020, a decline rateequivalent to -25%. This downward disparity between the two recent years is notexpected to last long as the economic situation in the world and Vietnam is and isabout to recover and grows even stronger than before the pandemic.

<b>2.2.4. Home construction and repairs loan</b>

Borrowing money to build a house is the optimal financial solution to supportcustomers even when they have not saved enough money. It can be seen that thedemand for housing construction and repair of people is increasing. However, noteveryone has enough finance at the same time to make the dream home and family.And to meet the need for capital to build a house, OCB has launched a home repairloan product with many attractive incentives. A home loan is a loan productdeployed by OCB to support customers to have enough capital to carry out thepurpose of building and repairing their house.

Housing loan characteristics at OCB: The loan limit to build a house is quite highup to 90% of the collateral value. Collateral can be real estate under construction orother real estates. Long loan periods help to reduce pressure to repay debts forcustomers. OCB has a flexible repayment plan according to customers' needs. Loanapplications are processed and responded to the results within the same day. Simple

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procedure, quick loan, helps customer quickly have money to build and repair theirhouse.

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<small>Total loan amount (VND Billion)</small>

<b>Figure 2.5: Total value of Home construction and repairs loan at Nguyen TraiTransaction Office</b>

(Source: Internal database of Nguyen Trai Transaction Office)

In recent years, OCB has made efforts to formulate a policy of diversifying its productportfolio in the hope to bring the best products to customers and increasing profits.However, despite fast growing economy, the growth is stable. In fact, for manyconsecutive years, the competition in the field is increasing and showing signs ofsaturation. Although not making a large contribution to total product sales, homeconstruction and repair loans also achieved a number of achievements. Increasingthe loan to build houses at Nguyen Trai intersection is similar to that of OCB'stransaction offices and other branches. Growth has been steadily 32.25% in fouryears, and in 2018 growth has been at its highest level since the establishment of thetransaction office in 2013. Efforts to stimulate demand through promotions andsupport have been effective. But OCB witnessed a decline in 2020, dropping to pre-2018 levels with VND 1.4 billion. Due to the impact of the pandemic and these areusually small and medium loans. Without product quality enhancement, homeconstruction and repair loans will face the risk of prolonging a period of slowgrowth.

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<b>2.2.5. Car purchase loan</b>

Car loan instalment is a form of bank loan to buy a car. Customers need to prepay acertain amount of money, the outstanding balance will be borrowed from the bank,monthly instalments will be paid to the bank at a specific interest rate. If customerscannot afford a one-time payment to buy a car, they can pay a part of the value ofthe car in advance to the dealer, the remaining amount will be supported by OCB topay off instalments at a reasonable interest rate, with many attractive incentivesfrom time to time. Customers can make their own loan at OCB and then go to thecar dealership with the referral from the agent. At that time, the salesperson takes themiddle position between OCB and the buyer. A car loan to buy car instalments wasdeployed and expanded nationwide by OCB. The loan interest rate in each period isdifferent, preferential from 7.50% - 9% / year depending on the type of loan profile,vehicle term, loan type, income proof, the value of the mortgage ... After thepreferential period, the floating interest rate is usually 11-13% / year. At NguyenTrai Transaction Office, car loans are not popular and have a low proportioncompared to other business categories.

<b>Figure 2.6: Total value of Car purchase loan at at Nguyen Trai TransactionOffice</b>

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<small>Total loan amount (VND Billion)</small>

(Source: Internal database of Nguyen Trai Transaction Office)

From this figure, it can be seen that the level of change is erratic and unstable. Thesituation does not have much practical significance because this is a small loanproduct at Nguyen Trai Transaction Office and it does not reflect the currentsituation at OCB. In 2016, the total loan amount was VND 0.3 billion andincreased to VND

0.5 billion in the following year, then the change was not stable thereafter. The totalcar loan amount in 2020 is VND 0.2 billion. The total amount of value peaked atVND 0.7 billion in 2019, the cause for this was not specified, possibly due to arandom factor. In 2020, due to the impact of the epidemic, the car industry hasdeclined but is strongly recovering at the present time. In the future, OCB isplanning to promote cooperation with dealers and car manufacturers, deductcommissions for sellers and referrals, creating incentives that are expected toproduce positive results.

<b>2.2.6. Consumption unsecured loan</b>

An unsecured loan is a form of the loan without collateral. OCB approves the loanbased on the credibility, repayment history at other banks, and the income level ofthe borrower. Factors assessed by OCB when lending unsecured loans include, the

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reputation of customers, credit history, whether customers have ever borrowed ornot,

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