122 VIETINBANK MTO II’S BUSINESS STRATEGY FOR FOREIGN CURRENCY BANKNOTES

LINCOLN UNIVERSITY
OAKLAND, CA, USA
INTERNATIONAL PROGRAM
VIETINBANK MTO II’S
BUSINESS STRATEGY FOR FOREIGN
CURRENCY BANKNOTES
A RESEARCH PAPER SUBMITTED TO
THE GRADUATE FACULTY OF LINCOLN UNIVERSITY FOR
THE MASTER OF BUSINESS ADMINISTRATION
BY
NGUYEN NGOC THANH
OCTOBER, 2008
INTRODUCTION
Since the Vietnamese government promulgated Decision No. 170/1999/QD-
TTg dated 12/09/1999 encourage Vietnamese people in foreign countries to transfer
money to beneficiaries in Viet Nam through the banking system, by post, through
the account (deposits and foreign currency savings) of the individual beneficiaries or
organizations or individuals are allowed to do service to receive and pay foreign
currencies, the active transactions presence of foreign currencies System
Commercial Bank in Ho Chi Minh development is quite strong. It is significant
money transfers overseas remittance and purchase foreign currencies face for the
needs tourism, treatment, study, work, etc. Foreign currency has transactions of
goods by the fastest-growing customer personal talents deposit and foreign currency
savings in the bank, when it should be entitled to withdraw money by foreign
currency cash. Individuals have foreign currency cash also added to your account
deposit foreign currency savings in commercial banks. The practice shows that
when exchange rates stable, interest rates deposit foreign currency and local
currency difference is not much different, the amount of foreign currency customer
personally sent to commercial banks increased and vice versa when the exchange
rate variable the deposit interest rate foreign currency lower than deposit interest
rates of currencies, the amount of foreign currency-side customers to withdraw or to

sell the bank also increased strongly. It can be concluded one of the factors directly
as the need to use foreign currency is the increasing presence of overseas remittance
money. Throughout nearly 10 years, overseas remittance money transfer system
through commercial banks in the province of Ho Chi Minh City has increased
continuously, from 829 million USD in 2001 has reached 3.6 billion U.S. dollars
in 2007 (equal to 35% total export turnover of goods from crude oil city of Ho Chi
Minh in 2007). Money transfer overseas remittance is concentrated especially on the
year and the end of the year. This is also a time of active air-conditioned foreign
currency cash in commercial banks in the province of Ho Chi Minh City in which
Vietinbank MTOII often faced with a lack of foreign currency while in the
remaining months in the year to admit foreign currency cash.
Although Vietinbank MTOII have been business strategy overall to develop
them in 2010 to become a banking business operations of currency with high
efficiency, the position has strong financial, banking technology advanced products,
services - diversity and makes up market share to compete in the province of Ho Chi
Minh City now but I still do not have a business strategy to face foreign currency
restrictions overcome the current status or lack of surplus foreign currency such as
the above aspects in order to further improve the efficiency of business in foreign
currencies solutions, appropriate measures are economical, high in attracting,
exploitation and adjust management foreign currencies cash.
Therefore, we have made this thesis to the official presentation of theory and
practical meaning of business strategy foreign currency face. analyze the reality of
business operations in foreign currencies face Vietinbank MTOII from 2004 to
present, competitive position, market share of import-export foreign currency
Vietinbank MTOII aspects of the total value of import-export foreign currency
aspects of the bank trade in the province of Ho Chi Minh City to on the basis of that
proposed solutions, measures in strategic business aspects of foreign currencies
Vietinbank MTOII by 2010 in order to contribute to the harmonious operation more
foreign currency revenue side, improving the efficiency of business operations,
foreign currency to meet present needs foreign currency to customers face consistent

with trends integration of the commercial banks in Vietnam.
The purpose of this thesis to give the solution, measures to:
+ Attract foreign currency from the face of commercial banks in the province
of Ho Chi Minh City, branches in the south of the banking system Vietinbank, the
tables and cleaning agents and foreign currency exchange, the anonymous customer,
the customer needs to send money to save foreign currency, foreign currency, etc.
and submit the cash to Vietinbank MTOII.
+ To supply the foreign currency cash demands for withdrawal or bring
foreign currency to face valid of all customers through banking services such as pay
deposit savings, paying money overseas remittance, foreign currency withdrawn
read surface of the water from outside the deposit accounts opened in their
Vietinbank MTOII, selling foreign currency for international students, customers
traveling, business, healing go abroad, etc.
+ Consolidate and further expand banking network - customers dealing with
Vietinbank MTOII
+ Efficient processing status of foreign currencies or face excessive lack of
business activities, provision of services for bank customers.
+ Improving the quality of banking services related to income - more foreign
currency cash
+ Increased revenue for Vietinbank MTOII.
Requirements of the thesis:
+ Specify actual work trang incomes and expenses in foreign currencies cash
Vietinbank MTOII during the past
+ If the advantages and disadvantages in the business operations foreign
currencies cash of Vietinbank MTOII
+ Outline orientation and business solutions, appropriate measures to bring
the actual effect of foreign currency business presence and customer service
+ Propose recommendations withVietinbank MTOII, Vietinbank HO and
local governments to improve feasible strategy for the foreign currency cash in
business

Objectives of the this study:
+ Improving competitive positions of Vietinbank MTOII to serve the best
needs more income foreign currency cash of customers, especially for individual
customers.
+ Through the ability to timely meet all needs more income Foreign currency
present a reasonable customer's personal effects will create psychological well in
customer on the increase the conversion of money in comparison with Vietnam
foreign currency because every individual customer who can use the domestic
currency to buy foreign currency now is when there is a reasonable demand in the
transaction is allowed in Vietinbank MTOII.
+ Withdrawn from the lessons of experience in operating effectively manage
foreign currency present at transactions II of Vietnam Commercial Bank (defined
survival rate of foreign currency funds present a reasonable choice and options for
revenue foreign currencies surface optimization).
CHAPTER I
REVIEW OF THE LITERATURE
I/. DEFINITION OF TERMS
The terminology used in this research has the following meaning:
1) Foreign currency: means the currency of a foreign State or a common
currency of many States.
2) Foreign currency banknotes: Lawful currencies of foreign countries being
circulated in the forms of bank-notes.
3) Foreign exchange rate means the value of a foreign monetary unit calculated
in Vietnam's monetary unit.
4) Licensed credit institutions are banks and non-bank credit institutions in
Vietnam which is allowed by the State Bank to provide and carry out foreign
exchange transactions.
5) Foreign exchange Desk is an organization allowed by the State Bank to
collect and exchange foreign currencies in cash. Conditions for being allowed to
carry out foreign exchange transactions for foreign exchange desks, are: (a) Having

convenient locations for transactions or places where foreign exchange demand
exits; (b) Having enough equipment and material bases to meet the requirements of
the exchange of foreign currencies in cash; (c) Having personnel with good
knowledge about cash-related transactions and capability to carry out currency
exchange operations.
6) Foreign exchange agent is an organization acting as the authorized agent of
the credit organizations and allowed to operate after has register certification foreign
exchange agents by the State Bank branch province, city directly under the center
government on area only. The foreign exchange agents only operation under form
used Vietnam dong to buy foreign currency cash of individual and not sell foreign
currency cash for individual to take Vietnam dong (except foreign exchange agents
put on isolate zones in national border gates). The foreign exchange agents must sell
all foreign currency bought for credit organizations on end of the working day
except of foreign currency able to leaving by agreement with credit organizations
(maximum is not over 2,000 USD or other kind foreign currency has the same
value) .
7) Residents are the following organizations and individuals:
a) Credit institutions are established and doing business in Vietnam (hereafter
called credit institutions);
b) Economic organizations set up and doing business in Vietnam except above
credit institutions (hereafter called economic organizations);
c) State agencies, armed forces units, political organizations, social-political
organizations, social-political professional organizations, social organizations,
social-professional organizations, social funds and charity funds, which are
operating in Vietnam;
d) Vietnamese diplomatic missions, consulates operating overseas;
e) Representative offices of all above-said institutions, organizations operating
overseas;
f) Vietnamese citizens residing in Vietnam; Vietnamese citizens residing
abroad for less than 12 months; Vietnamese citizens working in organizations

(which stipulated in above-said items “d” and “e”) and their dependents;
g) Vietnamese citizens going abroad for tourism, study, medical treatment or
visits;
h) Foreigners residing in Vietnam for 12 months or more except in cases
foreigners entering Vietnam for study, medical treatment , tourism or working in
foreign representative diplomatic agents, consulates offices and organizations in
Vietnam .
8) Non-residents being organizations or individuals have not yet been stipulated
as above residents.
9) SWOT Analysis is a strategic planning method used to evaluate the
Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a
business venture. It involves specifying the objective of the business venture or
project and identifying the internal and external factors that are favorable and
unfavorable to achieving that objective.
II/. REVIEW OF THE LITERATURE
This research describes “Vietinbank MTOII’s business strategy for foreign
currency banknotes to the year 2010”, so the concepts of strategy and strategic
management should be defined and frameworks in strategic planning process such
as SWOT analysis which will be used in analyzing the status-quo of Vietinbank
MTOII’s business activities for foreign currency banknotes.
II.1) WHAT IS STRATEGY?
Strategies are plans for achieving organizational goals. A strategy is an
integrated and coordinated set of commitments and actions designed to exploit core
competencies and gain a competitive advantage.
When choosing a strategy, firms make choices among competing
alternatives. In this sense, the chosen strategy indicates what the firm intends to do,
as well as what it does not intend to do.
Strategies provide focus for decision making and tactics are the methods and
actions used to accomplish strategies.
II.2) STRATEGY AT DIFFERENT LEVELS OF A BUSINESS

Business-level strategy is an integrated and coordinated set of commitments
and actions the firm uses to gain a competitive advantage by exploiting core
competencies in specific product markets. Every firm must form and use a business-
level strategy. However, every firm may not use all the strategies – corporate-level,
acquisition and restructuring, international, and cooperative – A firm competing in a
single-product market area in a single geographic location does not need a
corporate-level strategy to deal with product diversity or an international strategy to
deal with geographic diversity. In contrast, a diversified firm will use one of the
corporate-level strategies as well as choose a separate business-level strategy for
each product market area in which it competes. Business-level strategy is the core
strategy – the strategy that the firm forms to describe how it intends to compete in a
product markets.
Because customers are the foundation of successful business-level strategies,
therefore, when selecting a business-level strategy the firm determines (1) who will
be served, (2) what needs those target customers have that it will satisfy, and (3)
how those needs will be satisfied .

II.3) STRATEGIC MANAGEMENT
The strategic management process is the full set of commitments, decisions,
and actions required for a firm to achieve strategic competitiveness and earn above-
average returns. The firm’s first step in the process is to analyze its external and
internal environments to determine its resources, capabilities, and core competencies
– the sources of its “strategic inputs.” With this information, the firm develops its
vision and mission and formulates its strategy. To implement this strategy, the firm
takes actions toward achieving strategic competitiveness and above-average returns.
Effective strategic actions that take place in the context of carefully integrated
strategy formulation and implementation actions result in desired strategic
outcomes. It is a dynamic process, as ever-changing markets and competitive
structures are coordinated with a firm’s continuously evolving strategic inputs.”
Vision is a picture of what the firm wants to be and, in broad terms, what it

wants to ultimately achieve. It is the foundation for the firm’s mission.
Mission is the reason for the existence of an organization. A mission
specifies the business or businesses in which the firm intends to compete and the
customers it intends to serve.
II.4) EXTERNAL FACTORS TO AFFECT BUSINESS STRATERGY FOR
FOREIGN CURENCY BANKNOTES
II.4.1. DOLLARIZATION
Concepts of dollars:
Dollar's is to use foreign currencies instead of the currency to perform some
or all of the functions of the currency in a country. Therefore, when it comes to the
economy is dollar and means the residents of the country that use foreign currencies
instead of the currency reserves in the value of, or payment calculations, the price of
goods.
For the economy is in the process of transition like Vietnam, departing point
still low, the currency did not have the ability to convert the status of dollars status
of dollars in the market and financial Viet Nam is unavoidable.
The process of dollars in Vietnam at present affected by the following
ten factors:
a) Source of overseas remittance increased rapidly, each year an average
increase of 52% (See the sub-I attached), private Ho Chi Minh City in the past 4
years the average increase is 47% per year
b) The number of tourists and international increasing, in 2006, has
3.600.000 turns’ people, in 2007 with 4.171.564 people turn to Vietnam. Only Ho
Chi Minh City in 2006 received 2.350.000 turns’ people.
c) The wages paid in foreign currency for the Vietnamese to work in foreign
d) Foreigners come to Vietnam (who do not reside) is increased
e) Money financing from foreign country
f) Foreign investment in Vietnam's steady growth through the year, on
average each year increased 30%
g) Export turnover of Vietnam is increasing rapidly (see the sub-2 attached).

In 2007, export turnover reached 48 billion USD (an increase of 8,2 billion
compared to 2006) in which its own in Ho Chi Minh City reached 10,3 billion USD
(not including export turnover of crude oil)
h) Tend to increase the number of absolute mobilization of capital and loans
in foreign currency of commercial banks in the province of Ho Chi Minh City (see
the sub-3 attached)
k) Source of foreign currency circulation on the free market through
economic activities and other underground, such as purchase and sale of any estate,
jewelry, vehicles and other assets valued other, etc.
l) Foreign currency from the smuggling operation (black market)
This reality has created the environment for work early every time the
exchange rates fluctuation.
Statistics of the state bank in the province of Ho Chi Minh City showed
that:
- Dollars of assets in debt banking system through reduced year. The rate of
deposit U.S. dollars in total deposits at commercial banks from 32,5% at the end of
2004 was reduced to 20,74% at the end of 2007. However, the absolute number of
101.020 billion of the total capital raised in foreign currencies into VND to the end
of 2007 it has doubled compared with the end of 2004 (as 48.857 billion of VND)!
- Dollars of assets in the banking system but reducing the speed is reduced to
less than the dollars and assets. The rate of loans in foreign currency debt balance of
the total credit at commercial banks from 35,1% at the end of 2004 was reduced to
25,60% at the end of 2007. However, the absolute number of 104.010 billion of
VND of total debt balance of loans in foreign currencies into VND to the end of
2007, it has also risen more than doubled last year compared with 2004 (as 47.968
billion of VND).
- Dollars in economic conditions can be calculated in billions of USD by the
percentage of the total means of payment for USD to be transferred to Vietnam
through non-official channels such as through the path's personal residence and non-
residents (do not move directly through the banking system). However, can also

imagine is some level of growth of state dollars and through the number of foreign
currencies face of the U.S. dollar, which commercial banks in the province of Ho
Chi Minh City has gained and to produce the foreign banks increased continuously
from 775.989.069 USD in 2003, up to 1.533.948.150 USD in 2007 and only the first
6 months of the year 2008 this figure had reached 1.084.580.000USD!
-
II.4.2. VIETNAMESE GOVERNMENT DECREE No. 160/2006/ND-CP
It is issued on December 28
th
, 2006 and apply to organizations and
individuals being residents and non-residents engaged in foreign exchange activities
in Vietnam as well as organizations and individuals being residents related to the
management, inspection, and handling of violations .
 Regarding the liberalization of current transactions, Decree stipulates that in
Vietnamese territory all payment and money transfer transactions for current
transactions of residents and non-residents are freely made in accordance with
Decree and relevant legal provisions on the following principles:
- Residents and non-residents may purchase, transfer or carry foreign
currencies abroad in service of their demands for payment and money transfer for
current transactions;
- Residents and non-residents shall present documents according to
regulations of credit institutions upon purchase, transfer or carrying of foreign
currencies abroad and take responsibility before law for the truthfulness of those
documents, but they are not required to present documents certifying the fulfillment
of their tax obligations towards the Vietnamese State .
 Regarding individuals and organizations’ rights to use foreign currencies) cash,
Decree stipulates that:
- The residents, who do not reside there is a personal foreign currency cash is
entitled to store, carry people, for, gift, inheritance, selling for credit organizations
are allowed to, move, bring the foreign service for the purpose of the legal and

payment for people who are collecting foreign currency as stipulated by the law on
management of foreign exchange.
- Residents who are individuals with foreign currency cash added savings in
foreign currencies held are allowed to withdraw money origin, interest in foreign
currency cash as stipulated by the law on sending foreign currency savings
- Who residents, who do not reside is held open and use your deposit in
foreign currency credit organizations are allowed to carry out the transaction
revenue, more foreign currency cash after :
+ Collect foreign currency cash from abroad in accordance with regulations of
the State Bank of Vietnam
+ Only withdraw foreign currency cash (or converted into other currencies by
their cash) for individuals working for organizations when it is sent overseas work
+ Only withdraw foreign currency cash (or converted into other currencies by
their cash) to pay salary, bonus, allowances for non-residents, the residents are
foreigners
- Who residents, who are not homeless personal residence is open and use your
deposit in foreign currency credit organizations are allowed to carry out the
transaction revenue, more foreign currency cash follows:
+ Revenue foreign currency cash from abroad to bring under of the State Bank
of Vietnam
+ Only withdraw foreign currency cash (or converted into other currencies by
their cash)
II.4.3. DECISION No. 170/1999/QD-TTg DATED AUGUST 19
TH
, 1999 ON
ENCOURAGING VIETNAMESE EXPATRIATES TO TRANSFER
MONEY HOME .
Decision No. 170/1999/QD-TTg decides that:
The Government encourages and creates favorable conditions for
Vietnamese expatriates to transfer money home provided their remittance is

compliant with the law of Vietnam and the law of country where they reside and
have a demand for remitting money to Vietnam.
Foreigners who transfer money to Vietnam in order to assist their families,
relatives, or to donate to charity shall be got similar treatment as the Vietnamese
expatriates as stated hereof.
Vietnamese expatriates and foreigners shall be entitled to transfer money to
Vietnam under the following forms: (1) Through an authorized Credit Institution;
(2) Via International Postal finance services Providers; (3) Cash brought along by
individuals.
The Vietnamese beneficiaries have right : (1) To receive the proceeds in
foreign currency or in Vietnamese Dong upon request; (2) In case of receiving in
foreign currency, the beneficiary may : + Sell it to the authorized credit
institutions; + Transfer it into his foreign currency Deposit Account and use it in
compliance with the prevailing regulations on foreign exchange management; +
Deposit it in his foreign currency Savings Account with the authorized credit
institutions; or + Use it for other purposes as stated by the law of Vietnam; (3) To
enjoy income tax exemption .
CHAPTER 2
REALITY OF BUSINESS OPERATIONS IN FOREIGN CURRENCIES
FACE VIETINBANK MTOII
I. Situation of business operations in foreign currencies Vietinbank MTOII
I.1) Reality surplus, a lack of foreign currency aspects of commercial banks in
the province of Ho Chi Minh City
1.1.1) network held commercial bank off the province of Ho Chi Minh City
Ho Chi Minh City is an economic center of the country, where there are
many types of services and economic activities simmering, and the market is a very
dynamic sensitive in the process of integration with other countries in the region and
internationally, future have the ability to become a financial markets - currency of
the region by the scale of activities and diversity in the area of operations currency -
credit - payment

Up to 31 July 2008, based on proprietary components and scope of the
business operations of the monetary credit organizations can share network to credit
institutions in the province of Ho Chi Minh City to 4 banking system commercial
needs more income foreign currency as demand:
+ Banking system commercial state enterprises: 01 of the assembly, 3 of the
transaction, 86 branches, 206 rooms transactions, transactions 62 points and 20
savings
+ System of commercial banks shares: 17 of the Assembly, 08 of the
transaction, 607 branches and transaction dependent
+ Banking system overseas: 30 bank branches overseas
+ Banking system linked Company: 05 banks
Network of organizations such as credit has been dominant on the capital
markets in the province of Ho Chi Minh City in many channels to mobilize capital
vary, but each system of commercial banks with many branches and units directly
under the direct participants or indirect participation of business operations for
foreign suppliers have the products and services diversity, creating many utilities for
customers should have attracted a good deal of capital from the economy and
foreign quite large for investment in economic sectors for all enterprises to expand
production scale and development in order to explore thoroughly resources of the
banking system and improve their competitive advantage in business and economic
foreign relations
1.1.2) Aspects of Vietinbank and Vietinbank MTOII
1.1.2.1) Vietinbank
Vietnam Bank for Industry and Trade (VietinBank) was established in 1988
after being separated from State Bank of Vietnam.
Being one of the four largest State-owned commercial banks of Vietnam,
VietinBank’s total assets account for over 20 percent of the market share of the
whole Vietnamese banking system. 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.
Up to the end of July 2008, Vietinbank’s equity capital is VND11.310.508
millions equivalent to USD 685.609.989 at exchange rate 16.497 VND/USD.
Having an extensive network throughout the country with Vietinbank Head
Office, 3 main transaction offices, 142 branches and 575 transaction counters and
nearly 1,000 ATMs.
Being diversified with 03 independent accounting subsidiaries: VietinBank
Leasing Company, VietinBank Securities Company, Ltd., VietinBank Asset
Management Company and 02 non-profit making units: VietinBank Information
Technology Center and VietinBank Training 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)
+ 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
It 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. It is being the first bank in Vietnam to apply modern technology and
e-commerce in its banking operations.
After 15 years of construction and development, VietinBank has overcome
many difficulties and challenges, becoming the leader in the market mechanism,
making contribution to the active implementation of the State and Government’s
Policies. The bank has been continuously striving to go ahead in order to

consolidate its position as one of the leading commercial banks in Vietnam,
procuring fast development, reaching great achievements in all business areas,
developing both internally and externally, deploying state of the art banking
technologies, all in all to strengthen its image in the mind of domestic as well as
foreign clients.
VietinBank has to realize the following target to the year 2010: "Building Vietnam
Bank for Industry and Trade (VietinBank) to become a mainstay and modern State-
owned commercial bank with high efficient business activities, healthy financial
position, high banking technology, diversified products and services and big market
share".
1.1.2.2) Vietinbank MTOII
Being the member of Vietnam Bank for Industry and Trade system, one of
the biggest state-owned commercial Banks in Viet Nam .
Located at 79A Ham Nghi Blvd., District 1, Ho Chi Minh City - the
economic, financial and credit - is the most convenient and ideal bank for you to
deal with .
Providing a variety of banking products and services for individuals and
enterprises. In order to participate actively in fulfilment of above-said target of
Vietinbank to 2010, we – Vietinbank MTOII – has had a corporate strategy and
outlined our strategic vision and mission for its business operation from now to the
year of 2010 and subsequent years, as follows :
To make Vietinbank MTOII become a multi-function bank, which is strongly
reformed its business structure. To combine wholesale and retail banking
operations, in which we strongly develop our retail banking with high
competitiveness. Firmly maintain our credit market share in line with investment,
credit portfolio restructure for customers and industries with well
developing prospect.
To expand our non-credit market share : becoming one of the top commercial
banks in developing card service, overseas study remittance, overseas Vietnamese
remittance, safe deposit locker rental … with diversified products, outstanding

added value, second to none quality of service, making us as a bank with a separate
competitiveness, brand name and image.
To become a bank with modern technology science, exploring efficiently new
technologies in our business and management; applying and providing our
customers with modern electric banking products/services.
To form a network of banks and customers in order to serve our customers in a most
convenient and effective way.
+ A network includes over 10.000 customers who are dealing with Vietinbank
MTOII.
+ Be able to attract many customers of all economic sectors.
+ Cooperate with over 70 overseas study assistance centers.
+ Deal with over 40 foreign exchange agents
+ Cooperate with service suppliers such as post office, electricity, water
supply, etc in the field of non-cash payment.
+ Cooperate with Auditing organizations, Assets valuation, Insurance,
Transport logistics services companies for providing services to customers.
However, Vietinbank MTOII has not had a separate business strategy for foreign
currency banknotes.
1.1.3) on a number of professional activities of commercial banks in the
province of Ho Chi Minh City and Vietinbank MTOII affect the construction
business strategy in the face of foreign currencies Vietinbank MTOII
1.1.3.1) on mobilizing capital, loans, purchase and sale of foreign currency,
foreign currency exchange and transfer money overseas remittance of
commercial banks in the province of Ho Chi Minh City
To mobilize capital and loans
Interpreting
prizes
31/12/2004 31/12/2005 31/12/2006 31/12/2007
Balance Density Balance Density Balance Density Balance Density
1/. Total capital

raised (the bill)
150,337 100 188,876 100 285,503 100 487,028 100
+ VNÑ 98,206 65.3 123,575 65.4 197,554 69.20 365,080 74.96
+ Foreign
currency VND
provisions
48,857 32.5 59,915 31.7 75,458 26.43 101,020 20.74
+ Provisions
VND gold
3,274 2.2 5,386 2.9 12,491 4.37 20,928 4.30
2/. Total credit
debt balance
(billion)
123,624 100 175,759 100 229,747 100 406,353 100
+ VNÑ 86,834 63.6 120,281 62.8 159,254 69.32 292,001 71.86
+ Foreign
currency VND
provisions
47,968 35.1 62,388 35.5 68,204 29.69 104,010 25.60
+ Provisions
VND gold
1,822 1.3 3,090 1.76 2,289 0.99 10,342 2.54
Interpreting on buying and selling foreign currencies, transfer money
overseas remittance and money exchange:
Year 2004 2005 2006 2007
1/. Sales of foreign currencies to buy into U.S. dollars
(USD million)
13.924 20.407 21.410 40.288
2/. Sales of foreign currencies into U.S. dollars (USD
million)

13.048 19.628 21.449 39.075
3/.The company moved overseas remittance of money
into U.S. dollars (million USD)
1.891 2.200 2.600 3.600
4/.Total (buying) foreign currency exchange aspects
of the U.S. dollar (USD million)
1.537 2.108 1.544 1.693
+ The table's change directly 1.015 1.497 1.087 1.112
+ The agent's change of credit 522 611 457 581
5/. The percentage of foreign currency bought on the
total value of foreign currencies was attributed USD
10.04% 7.34% 7.21% 2.76%
1.1.3.2) Interpreting mobilization of capital, loans, purchase and sale of
foreign currency, foreign currency exchange, remittance and overseas
remittance income and expenses in foreign currencies cash Vietinbank
MTOII:
To mobilize capital and loans
Interpreting 31/12/2004 31/12/2005 31/12/2006 31/12/2007
Balance Density Balance Density Balance Density Balance Density
1/. Total capital
raised (billion)
5.786 100 7.386 100 8.317 100 10.658 100
+ VNÑ 4.828 83,45 6.326 85,65 6.382 76,73 8.701 81,64
+ Foreign currency
regulations VND
957 16,55 1.060 14,35 1.935 23,27 1.957 18,36
2/. Total debt
balance credit and
investment
(billion)

4.816 100 5.298 100 6.360 100 7.323 100
+ VNÑ 3.633 75,44 4.223 79,71 4.781 75,17 5.027 68,65
+ Foreign currency
regulations VND
1.183 24,56 1.075 20,29 1.579 24,83 2.296 31,35
Interpreting on buying and selling foreign currencies, transfer money
overseas remittance and exchange currency
Year 2004 2005 2006 2007
1/. Sales to buy foreign currency to the U.S. dollar
(USD million)
529,32 569,45 561,64 786,22
2/. Sales of foreign currencies into U.S. dollars 529,15 569,97 561,82 786,88
3/. Total remittance of overseas remittance into U.S.
dollars (million USD)
67,79 126,13 156,95 215.57
4/. Total purchase (the collection) Foreign currency
aspects of the U.S. dollar (USD million)
123,3 95,29 109,28 168,00
5/. The rate of foreign currency bought on the total
value of foreign currency purchases provided USD
23.29% 16.73% 19.46% 21.36%
Vietnam's foreign currency face read
Year 2004 2005 2006 2007
1/. Foreign currency revenue side of the U.S. dollars
(USD million)
383,80 362,71 437,18 505,13
2/. more aspects of foreign currencies into U.S.
dollars (USD million)
382,01 359,41 434,04 511,33
1.1.4) Cost increases in management reasons legacy status, lack of presence of

foreign currencies Vietinbank MTOII and commercial banks in the Ho Chi
Minh City:
In general of Vietnam and Ho Chi Minh City in particular did not have a
central air-conditioned foreign currencies face to air-conditioned source foreign
currency for the present commercial banks. Therefore, commercial banks have to be
air-conditioned foreign currencies face their own ways in face of foreign currencies
abroad (when excess foreign currency side) and enter the face of foreign currency
from abroad (when the present lack of foreign currency). As a result, costs for the
management of foreign currencies increased surface because they must pay the cost
of buying and selling foreign currency surface, transport and insurance for foreign
currency import / export.
According to statistics from the state banks in Ho Chi Minh City, the amount
of foreign currency cash import, export through commercial banks from 2003 to
2008 in Table Ho Chi Minh City, as follows:
Unit: measured in U.S dollars
Year process ( In
there at…)
Value of foreign currency
Imported
Value of foreign currency
Exported
Value Foreign currency
Export > Import
2003 418.500.000 775.989.069 357.489.069
(Vietibank MTOII) (16.000.000) (16.000.000)
2004 278.230.000 1.137.600.000 859.370.000
(Vietibank MTOII) (170.000.000) (170.000.000)
2005 218.923.360 1.601.820.348 1.382.896.988
(Vietibank MTOII) (206.500.000) (206.500.000)
2006 448.000.000 1.704.000.000 1.256.000.000

(Vietibank MTOII) (255.500.000) (255.500.000)
2007 723.637.750 1.533.948.150 810.310.400
(Vietibank MTOII) (3.000.000) (286.400.000) (289.400.000)
6 months of 2008 613.350.000 1.084.580.000 471.230.000
The estimated total cost incurred on average in the face of foreign currency
(selling foreign currency as a foreign bank) the equivalent of 1 million USD is USD
1.760 and the total average cost incurred for the importation of foreign currencies
surface ( buy foreign currencies presence of foreign banks) the equivalent of 1
million USD is the 983 USD from 2003 to June 2008 commercial banks in the
province of Ho Chi Minh City had to read out over 16 million USD for to import
foreign currency cash
Unit: measured in U.S dollars
Year Process Costs for import of
foreign currencies cash
Costs for export of
foreign currencies cash
The total cost of import
export of foreign
currencies cash
2003 411.385,50 1.365.740,76 1.777.126,26
2004 273.500,09 2.002.176,00 2.275.676,09
2005 215.103,36 2.819.203,81 3.034.307,17
2006 440.384,00 2.999.040,00 3.439.424,00
2007 711.335,91 2.699.748,74 3.411.084,65
6 months of 2008 602.923,05 1.908.860,80 2.511.783,85
Total 2.654.631,91 13.794.770,11 16.449.402,02
However, over here is a just cost incurred to import foreign presence only if
the computer is enough to include both the amount of additional damages arising
from the management to use funds that commercial banks are losing by disparity in
interest rates to mobilize term is not between VND larger foreign currencies USD

the purchase of foreign currencies into USD in cash and payment in VND. Level
disparity in interest rates raised short-term up to date 30 June 2008 between VND
and USD at Vietinbank MTOII is at 4,5%/ year (interest rate mobilize VND
deposits is 6% and raised deposit USD is 1,5%).
II. Scale transaction revenue and expenses in foreign currencies cash
Vietinbank MTOII
II.1) Source revenue foreign currency cash:
Vietinbank MTOII foreign currency revenue from surface activities or
provision of services and deposit money at the request of customers:
+ Foreign currency cash by the branch in the South of Vietinbank submitted to
Vietinbank MTOII to be credited to your account deposit of foreign currencies
branch in Vietinbank Head Office
+ Cash foreign currency sent by customers in savings Vietinbank MTOII
+ Money buying currencies gained through the transaction contracts signed
with foreign currencies on credit institutions: Vietinbank MTOII receive cash
foreign currency of credit, charges filed and present foreign currency transfer
foreign currency into the account of the credit institutions in Vietcombank or banks
abroad
+ Foreign currency cash by customers are economic organizations (business
operations are allowed to sell goods, provision of services to customers in Vietnam
to collect money in foreign currencies) to submit financial of units open at
Vietinbank MTOII.
+ Foreign currency cash receipt of Vietinbank HO to ensure pay foreign
currency as a customer of Vietinbank MTOII air-conditioned or foreign currency in
the face of system Vietinbank.
Vietinbank MTOII collects foreign currency cash business in foreign currencies:
+ Cash income in foreign currencies by buying foreign currencies face of the
anonymous (personal customers, tourists, customers who are not residents, etc)
+ Cash into foreign currency income by buying foreign currencies aspects of
our clients are the economic organizations of business operations are allowed to sell

goods, provision of services for customers in Vietnam
+ Cash into foreign currency income by buying foreign currency aspects of the
agents Foreign exchange Vietinbank of the table and money exchange in the
province of Ho Chi Minh City
+ Cash into foreign currency income by buying (import) of foreign currency
bank foreign agents, such as HSBC, UOB, AMERICAN EXPRESS BANK
II. 2) Source of foreign currency cash:
Vietinbank MTOII more foreign currency as a customer at work or provision
of services and deposit money at the request of customers:
+ Branches of the South Vietinbank withdraw cash in foreign currencies
Vietinbank MTOII
+ Customers withdrawing cash from foreign currency savings accounts in
foreign currencies Vietinbank MTOII
+ Organizations receive credit for cash of foreign currency Vietinbank MTOII
and return by writing for Vietinbank MTOII through foreign accounts Exchange
Rate of through foreign currency accounts of Vietinbank HO foreign entire value of
foreign currency received fees plus exchange currency transfer foreign currency
surface obtain under contract transactions signed with foreign currency Vietinbank
MTOII
+ Customers are organizations in domestic and foreign, who do not reside (the
Embassy, consular, etc.) have deposit accounts in foreign currencies Vietinbank
MTOII withdraw cash foreign currency under the provisions
+ Companies overseas remittance withdraw cash in foreign currencies
Vietinbank MTOII to pay for paid to customers under contract agents pay overseas
remittance has signed with Vietinbank MTOII
+ Customers personally receive money overseas remittance in foreign currency
cash + Cash foreign currency transfer for Vietinbank HO to mediation in the
face of foreign currencies Vietinbank system
Vietinbank MTOII more foreign currency cash for business operations,
foreign currency:

+ Cash read out foreign currency by selling and / or foreign currency exchange
thoai face for the anonymous customer (customer individuals, tourists, customers
who are not residents ...)
+ Foreign currency cash out by selling more foreign currency for the present
credit organization under contract buying and selling foreign currency credit
organizations signed with Vietinbank MTOII
+ Foreign currency cash out by selling more (in) a foreign currency bank to
foreign agents, such as HSBC,UOB, AMERICAN EXPRESS BANK;

II. 3) Cost foreign currency transactions present:
Customers pay for Vietinbank MTOII when submitting to withdraw cash
from foreign currency deposit accounts opened in payment Vietinbank:
Bank / Customer Vietinbank MTOII collect maximum % on number of foreigner currencies
cash of customers
Pay accounts in foreign currency
deposits
Withdrawn from the account deposit
foreign currencies
U.S. dollars Currency U.S. dollars Currency
Credit Organization 0,14% 0,65% 0,1% 0,15%