Business strategy of Nam Viet commercial jointstock bank - Hai Phong branch period 2012 - 2017 capstone project report Ha Noi

BUSINESS STRATEGY OF NAM VIET COMMERCIAL
JOINTSTOCK BANK- HAI PHONG BRANCH PERIOD
2012 - 2017
CAPSTONE PROJECT REPORT
HA NOI 2012
GROUP NO: 07
Class: GaMBA- M0210


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LIST OF ABBREVIATED WORDS
NHNN
State Bank of Vietnam
HN
Ha noi
Navibank
Nam Viet Joint Stock Commercial Bank

Navibank HP
Nam Viet Joint Stock Commercial Bank – Hai Phong Branch
IT
Information Technology
BTA
Bilateral Trade Agreement
EFE
External Factor Evaluation Matrix
IFE
Internal Factor Evaluation Matrix
SWOT
SWOT matrix (Strengths, Weaknesses, Opportunities, and Threats)
SPACE
SPACE matrix (The Strategic Position and Action Evaluation)
QSPM
Quantitative Strategic Planning Matrix
Vietinbank HP
Vietnam Industry and comercial Bank – Hai Phong Branch
BIDV HP
Bank for Investment and Development of VN – Hai Phong Branch
Vietcombank HP
The Bank for Foreign trade of Vietnam – Hai Phong Branch
TCTD
Banker

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LIST OF TABLES – FIGURES
Table 2.1
Results of implementation of some operation norms for the 2005 – 2010 period
Table 2.2
Results of business operation of Navibank in Vietnam for the 2005- 2010 period
Table 2.3
Operating results of Navibank – Hai Phong branch
Table 2.4
Data sheet of customers‟ deposit mobilzation
Table 2.5
Loan and structure of outstanding credit in the 2007 – 30/09/2011 period
Table 2.6
Services operations
Table 2.7
The growth of number in banking industry
Table 2.8

Growth of capital mobilization and credit
Table 2.9
EFE matrix
Table 2.10
Compatitive image matrix
Table 2.11
IFE matrix
Table 3.1
SWOT matrix for Navibank Hai Phong
Table 3.2
SPACE matrix for Navibank Hai Phong
Table 3.3
QSPM matrix for Navibank Hai Phong
Figure 1.1
Business strategy formulation process
Figure 1.2
External environment
Figure 1.3
SWOT Matrix
Figure 1.4
SPACE Matrix
Figure 1.5
Grand Strategy Matrix
Figure 2.1
Operational and institutional structure
Figure 2.2
Map of transaction offices under the branch
Figure 2.3
GDP growth speed of economic sectors in the 2000 – 2010 period
Figure 2.4

Average GDP per capita in the 2000 – 2010 period






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INTRODUCTION
1. Reasons for topic.
The financial crisis has rocked the globe and one again confirmed the special role
of banks in the globalized economy in recent years. Today, close the bank or weakened
banking system not only disrupt the domestic economy but also quickly spread like
infectious diseases. Although Vietnam's economy is not really integrated into the
regional economy, but the consequence of the financial crisis has left the Vietnam
banking system, which to be solved. The integrated trend is a objective process, time of
integration is very near. To integrate successfully requires the Vietnam banks improve
their competitiveness quickly.
Currently Vietnam Commercial bank system includes five state-owned banks, 37
joint stock banks, 5 joint venture banks and 48 foreign bank branches. To be sure, with
the easing route and banking liberalization for foreign banks, the competitive level will
be increasingly fierce among banks.
In the extremely difficult period of the Vietnam banks when Vietnam integrates
into the world economy, if business strategy of a bank executed well, it will be the
determining factor to the survival, development or speed up of the bank. With the
knowledge gained from the MBA course of Griggs University and is one of the staff of
Navibank Hai Phong with a desire to contribute to the Bank growing more and more,
Group 7 decided to select topic: “Building business stratery for NAVIBANK – Hai
Phong branch for period 2012-2015”.
2. Purpose of research.

The topic is with a view to establish and select business strategy for Navibank
Hai Phong branch period 2012- 2015 and propose solutions to implement this strategy,
aiming at leading Navibank Hai Phong to be one of great branches among Navibank
system and on the its area.
The great assignment is done by a group of most members who are working in
banking and is investigated, analyzed based on the reality, therefore business strategy
set up for Navibank Hai Phong by this group must make a positive contribution to the
branch‟s activitites in the following years.
3. Research method.
Mainly based on knowledge of the economic subjects such as: strategic


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management, financial and monetary theory, marketing management, human resource
management, financial management and practical knowledge application.
The data analysis according to historical materialism method and descriptive
statistics based on the statistics, the figures reported by the State Bank and of the
commercial banks.
4. Lay-out of the Capstone report.
Apart from introduction, conclusion, reference materials, the great assignment
includes 3 chapters:
Chapter 1: Theoretical framework about business strategy formulation
Chapter 2: Analysis of business strategy formulation for Navibank Hai Phong
branch.
Chapter 3: Business strategy of Navibank Hai Phong branch for period 2012-
2015 and solution for implementation.



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CHAPTER 1: THEORETICAL FRAMEWORK OF BUSINESS STRATEGY
1.1 Concept of strategy and role of business strategy.
1.1.1 Concept of strategy.
A strategy is a plan of action designed to achieve a vision. Strategy is all about
gaining (or being prepared to gain) a position of advantage over adversaries or best
exploiting emerging possibilities. As there is always an element of uncertainty about
future, strategy is more about a set of options ("strategic choices") than a fixed plan.
Moreover, strategies are potential actions that require top management decisions and
large amounts of the firm‟s resources. In addition, strategies affect an organization‟s
long-term prosperity, typically for at least five years, and thus are future-oriented.
Strategies have multifunctional or multidivisional consequences and require
consideration of both the external and factors facing the firm
1.1.2. Strategic management.
Strategic management can be defined as the art and science of formulating,
implementing and evaluating cross-functional decisions that enable an organization to
achieve its objective.
Strategic management focuses on integrating management, marketing,
finance/accounting, production/operations, research and development, and information
system achieve organizational success.
Strategic management process consists 3 stages are formulation, implementation
and evaluation of strategies. Each stage based upon set of activities performed by the
individual working in the organization.
+ Strategy Formulation:
Strategy formulation is the first stage of strategic management, this stage
includes developing vision and mission statement, identifying external opportunities
and threats, evaluating company internal strengths and weaknesses, developing
alternative strategies, selection strategies which benefits the business. Strategy
formulation issues include deciding what new business to enter, what business to
abandon, how to allocate resources, whether to expand operation or diversify, whether
to enter international market. Whether to merge or form a joint venture.

No organization have unlimited resources, strategists must go with the strategies
which are most feasible and beneficial for the business. Strategy formulation commits


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an organization to specific products, services, markets, resources and technologies over
an extended period of time. Strategies are developed for long term competitive
advantage over its competitors.
+ Strategy Implementation:
Strategy implementation is the second stage of strategic management. Strategy
implementation can be only proceeds after completion of strategy formulation stage,
when strategists are done with strategies selection. This stage includes number of
activities such as defining policies, building organizational structure, allocating resource
to implementing strategy, assigning tasks to each functional area employees and
tracking the progress of strategy implementation.
+ Strategy Evaluation:
Strategy evaluation is the last stage of strategic management, the purpose of this
stage to monitor the implemented strategies and find out whether they are working or
not to achieve organization objectives. Strategy evaluation consists of three fundamental
activities reviewing external and internal factors that are bases for current strategies,
measuring performance and taking corrective action. Each implemented strategy is
evaluated to determine the outcomes, if the outcomes are meeting the expectation it
means strategy is successfully otherwise corrective action is required.
+ Role of a strategic management:
Strategic management allows an organization to be more proactive than reactive
in shaping its own future; it allows an organization to initiate and influence activities
and thus to exert control over its own destiny.
Historically, the principle benefit of strategic management has been to help
organizations formulate better strategies through the use of the more systematic, logical
and rational approach to strategic choice.

Research indicates that organizations using strategic management concepts are
more profitable and successful than those that do not. Businesses using strategic
management concepts show significant improvement in sales, profitability, and
productivity compared to firms without systematic planning activities.
Besides helping firms avoid financial demise, strategic management offers other
tangible benefits, such as an enhanced awareness of external threats, an improved
understanding of competitors‟ strategies, increased employee productivity, reduced


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resistance to change and a cleared understanding of performance-reward relationships.
Strategic management enhances the problem-prevention capabilities of organizations
because it promotes interaction among managers at all divisional and functional levels.
Firms that have nurtured their managers and employees, shared organizational
objectives with them, empowered them to help improve the product or service and
recognized their contributions can turn to them for help in a pinch because of this
interaction.
In addition to empowering managers and employees, strategic management often
brings order and discipline to an otherwise floundering firm. It can be the beginning of
the efficient and effective managerial system. The strategic-management process
provides a basis for identifying and rationalizing the need for change to all managers
and employees of firm; it helps them view change as an opportunity rather than as a
threat.
1.1.3. Classification of strategy
Depending on the different criteria strategies can be classifed differently. In real
estate field, our group relize some type of classification should be studied as follows:
Classifying by managerial level.
- Company: Strategy at the company level is to identify and define the purposes
and objectives of the company, identifying the business activities pursued by the
company, create policies and plans to achieve the company's goals, allocating resources

between businesses activities. Company strategy is applied to the entire enterprise.
- Business: Strategy at business level is planned to determine the selection of
products for private business within the company. In the strategy at business level,
people must determine the way that each business unit must be completed to contribute
to accomplishing the goal of the company.
- Function: In strategy at function level, people focused on supporting
company‟s strategy and focus on areas of operational business areas such as finance,
human resources, marketing.
Classification of strategy based on the way companies build competitive position.
- Cost - leading : As a result, businesses have more profits than the average one
of the whole fiel. The total cost based on the scale of production efficiency, cut costs


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sharply based on experience, control cost tightly and minimize the cost of the parts such
as: research and development, sales, advertising …
- Characterized differences through the creation of the distinct attributes of the
products or services with other businesses in the same fiel, such as quality, brand image,
technology, features, customer service or dealer network. This strategy will help
businesses get profits above the fiel‟s average one because it established a solid position
to deal with competition in the same fiel.
- Focusing on the group of customers, product segment or a specific geographic
market. This strategy is built around serving a particular target well and each of the
policies is developed with the direction. The strategy gives business unique
characteristics due to better meet the requirements of specific targets or have lower
costs in the service of that goal, or both. From this, enterprises can get profits above the
fiel‟s average one.
Classification of strategies based on performance way.
The combined strategy group includes: Combined forward; combined back;
combined horizontally.

Intensive strategy group includes: Market penetration, market development;
product development.
Group strategy to expand activities includes
- Diversify concentric activities: put on the existing market products or services
related to the current products.
- Diversify activities horizontally: put on the existing market for the current
customer group of new products or services, not related to the current products.
- Diversify mixed activities: put on the existing market with the products or
services, not related to the current products.
Other strategy group include:
- Joint ventures strategy: when one or more businesses unite with each other to
pursue a certain goal.
- Narrow operating strategy: when businesses need to restructure, conducting to
remove a number of products or activity areas to save the position of the business.
- Liquidation strategy: the sale of assets of the business. Enterprises accept defeat
and try to save up maximum all the things they can.


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1.2. Tool, Models of strategic analysis and evaluation.
1.2.1. Analyze the business environment.
Environmental analysis for a business looks at the factors inherent in a business's
environment that may have some impact thereof. This type of analysis is relatively
qualitative and involves the identifying, scanning, analyzing and forecasting of the
environmental variables. Some frameworks of environmental analysis have received
large amounts of attention in the world of business management literature, such as
SWOT analysis and PEST analysis.
1.2.1.1. Analyze the micro environment - PEST model:
PEST analysis stands for "Political, Economic, Social, and Technological
analysis" and describes a framework of macro-environmental factors used in the

environmental scanning component of strategic management. It is a part of the external
analysis when conducting a strategic analysis or doing market research, and gives an
overview of the different macro environmental factors that the company has to take into
consideration. It is a useful strategic tool for understanding market growth or decline,
business position, potential and direction for operations.
+ Political factors are how and to what degree a government intervenes in the
economy. Specifically, political factors include areas such as tax policy, labor law,
environmental law, trade restrictions, tariffs, and political stability. Political factors may
also include goods and services which the government wants to provide or be provided
(merit goods) and those that the government does not want to be provided (demerit
goods or merit bads). Furthermore, governments have great influence on the health,
education, and infrastructure of a nation
+ Economic factors include economic growth, interest rates, exchange rates and
the inflation rate. These factors have major impacts on how businesses operate and
make decisions. For example, interest rates affect a firm's cost of capital and therefore
to what extent a business grows and expands. Exchange rates affect the costs of
exporting goods and the supply and price of imported goods in an economy
+ Social factors include the cultural aspects and include health consciousness,
population growth rate, age distribution, career attitudes and emphasis on safety. Trends
in social factors affect the demand for a company's products and how that company
operates. For example, an aging population may imply a smaller and less-willing


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workforce (thus increasing the cost of labor). Furthermore, companies may change
various management strategies to adapt to these social trends (such as recruiting older
workers).
+ Technological factors include technological aspects such as R&D activity,
automation, technology incentives and the rate of technological change. They can
determine barriers to entry, minimum efficient production level and influence

outsourcing decisions. Furthermore, technological shifts can affect costs, quality, and
lead to innovation.
+ Environmental factors include ecological and environmental aspects such as
weather, climate, and climate change, which may especially affect industries such as
tourism, farming, and insurance. Furthermore, growing awareness of the potential
impacts of climate change is affecting how companies operate and the products they
offer, both creating new markets and diminishing or destroying existing ones.
+ Legal factors include discrimination law, consumer law, antitrust law,
employment law, and health and safety law. These factors can affect how a company
operates, its costs, and the demand for its products.
The model's factors will vary in importance to a given company based on its industry
and the goods it produces. For example, consumer and companies tend to be more
affected by the social factors, while a global defense contractor would tend to be more
affected by political factors. Additionally, factors that are more likely to change in the
future or more relevant to a given company will carry greater importance. For example,
a company which has borrowed heavily will need to focus more on the economic
factors (especially interest rates).
1.2.2. Analyze the industry environment – M.Porter’s five forces model.
As illustrated in Figure below, Porter‟s Five-Forces Model of competitive
analysis is a widely used approach for developing strategies in many industries. The
intensity of competition among firms varies widely across industries. According to
Porter, the nature of competitiveness in a given industry can be viewed as a composite
of five forces:



Potential development of sustitute products


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- Potential competitors: potential competitors include companies which have
just joined in, their current competitiveness is still weak, but they have great potents and
still have competitiveness in the future. Potential competitors may reduce the
profitability of the business because they put into operation new production capacities,
with the desire to gain market and the necessary resources. Therefore, when formulating
strategies managers should consider the risk due to the entry of new potential
competitors.
- Current Competitors: This is the second competitive forces based on Michael
Porter‟s model. They are competitors with strong position in the market in the same
business. The higher level of cometition is, the lower reduction of profit is.
There are three important factors constituting the level of competition between
companies operating in the same field, namely: competitive structure; situation of
market demand; barriers out of the business sector . Important part of controlling
external factors is to identify all the competitors and identify their advantages,
disadvantages, capabilities, oppotunities, threats, objectives and strategies.
- Matrix-competition images: In all events and environmental trends may affect
the strategic position of a company, the impact of competition is often considered as the
most important one. Matrix-competition images identifies the principal competitors
with their special advantages and disadvantages
- Buyers: The 3

rd
force in the model of Michael Porter is the ability to bargain of
the customer. Normally, customers request a price reduction or quality requirements
Potential entry of new competitors
Bargaining power of
suppliers
Rivalry among
competing firms
Bargaining power of
consumers



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accompanied by impeccable service. This makes the cost of operations increase,
creating the risk of competitive price.
- Providers: The 4th force is the ability to bargain of suppliers. Suppliers not
only supply materials, equipments and labor power but also the consulting firm,
providing advertising services, transportation… Generally, they provide the inputs of
production and business processes. To avoid bargain or the pressure of suppliers,
company should build a mutal relation interest or expected various supply.
- Substitutes: The last force is the competitiveness of substitutes products.
Substitutes products are the products of competitors in the same field or business sector
which have same function to meet consumer demand. To limit the important stress of
this risk, companies need to consider carefully the price trends and forecasts of the
substitutes products in the future.
1.2.3. Tools to develop a strategy.
According to Fred R David, important techniques in developing a strategy
consist of three stages. Tools used in this process can be employed in any model and
organization. They help managers to define, assess and select strategies and are

presented as follows:


The input stage
External Factor
Evaluation Matrix
(EFE)
Competitive
Profile Matrix
(CPM)
Internal Factor
Evaluation Matrix
(IFE)

The matching stage
Strengths-
Weaknesses-
Opportunities-
Threats Matrix
(SWOT)
Boston Consulting
Group Matrix
(BCG)
External –
Internal Matrix
(IE)
Grand
Strategy
Matrix
The decision stage

Quantitative Strategic Planning Matrix (QSPM)


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Source: Fred R. David, Strategic Management Concepts and Cases, Figure 6-2, P.222
Figure 1.4: Model of developing a strategy
Stage 1: input into EFE, IFE and CPM. This phase sums up basic input
information which is very necessary to form a strategy.
Stage 2: The matching stage. This stage presents pratical strategies which can be
selected by arranging and combining important external and internal factors. In this
stage, we choose one of matrixes such as SWOT, CG, IE and SPACE
Stage 3: The decision stage. This stage only include one technique which is
using QSPM (Quantitative StrategicPlanning Matrix). This matrix uses input
information in the first stage to objectively evaluate and select possible strategies in the
second stage, and then choose a suitable strategy in the third stage.
External Factor Evaluation matrix (EFE matrix)
EFE matrix lets strategy planners to summarize and evaluate competitive,
technological, legal, government, political, geographic, demographic, cultural, social
and economic information. There are five steps to develop an external factor evaluation
matrix:
Step 1: List down 10 to 20 key external opportunities and threats which are
defined as decisive factors to the firm‟s sucess in the external audit process
Step 2: Assign weights to each factor that ranges from 0,0 (not important) to 1,0
(most important). The total weights must sum up to 1.00. It should be noted that the
importance of weights depend upon the probable impact of factors on the strategic
position of the company.
Step 3: rate each factor (ranging from 1 to 4) on the basis of company‟s response
to that factor (Here, 1 shows poor response, 2 shows average response, 3 shows above
average respons and 4 shows superior response). These rates are based on effectiveness
of business strategy. To sum up, classification in this step is relied on the company‟s

scale while that in step 2 is based on the industry.
Step 4: Caculate the weighted scores by multiplying the each factors weight by
its rating.
Step 5: Finding the total weighted score by adding the weighted score for each
variable. The toal weighted score ranges from 1 to 4 regardless of the total unmber of


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opportunities and threats. If the total weighted score is under 2.5, the company is
internally weak . On the contrary, if it is over 2.5, the company is internally strong.
Internal Factor Evaluation matrix ( IFE matrix)
The final step in analysis of internal situation is to build a internal factor evaluation
matrix. This strategic tool summarizes and evaluates strengths and weaknesses of
functional areas of business. It also provides principles to define and assess evaluate
relations among those areas. There are five steps to develop IFE matrix:
Step 1: List key internal factors as identified in the internal audit process. Use a
total of from ten to twenty internal factors, including both strengths and weaknesses.
Step 2: Assign a weight that ranges from 0.0 (not important) to 1.0 (all
important) to each factor. The weight assigned to a given factor indicates the relative
importance of the factor to being successful in the firm‟s industry. Regardless of
whether a key factor is an internal strength or weakness, factors considered to have the
greatest effect on organizational performance should be assigned the highest weights.
The sum of all weights must equal 1.0.
Step 3: Assign a 1 to 4 rating to each factor to indicate whether that factor
represents a major weakness (rating = 1), a minor weakness (rating = 2), a minor
strength (rating = 3), or a major strength (rating = 4). Note that strengths must receive a
4 or 3 rating and weaknesses must receive a 1 or 2 rating. Ratings are thus company
based, whereas the weights in Step 2 are industry based.
Step 4: Multiply each factor‟s weight by its rating to determine a weighted score
for each variable.

Step 5: Sum the weighted scores for each variable to determine the total
weighted score for the organization.
The toal weighted score ranges from 1 to 4 regardless of the total unmber of strengths
and weaknesses. If it is over 2.5, the company‟s internal position is better.
Competitive Profile Matrix (CPM)
Competitive profile matrix is an essential strategic management tool to compare
the firm with the major players of the industry. Competitive profile matrix show the
clear picture to the firm about their strong points and weak points relative to their
competitors. There are five steps to build CPM:
Step 1: List down 10 key decisive factors to the competitiveness of the firm


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Step 2: Assign a weight that ranges from 0.0 (not important) to 1.0 (all
important) to each factor. The weight assigned to a given factor indicates the relative
importance of the factor to being competitive in the firm‟s industry. The sum of all
weights must equal 1.0.
Step 3: rate each factor (ranging from 1 to 4) on the basis of company‟s
competitiveness to that factor (Here, 1 shows weak, 2 shows average, 3 shows above
average and 4 shows good.
Step 4: Multiply each factor‟s weight by its rating to determine a weighted score
for each variable.
Step 5: Sum the weighted scores for each variable to determine the total
weighted score for the organization. Compare the total weighted score of the firm with
that of competitors to assess competitiveness of the firm.
The Strengths-Weaknesses-Oppotunities-Threats(SWOT) Matrix is an important
matching tool that helps managers to develope four types of strategies : SO Strategies,
WO Strategies, ST Strategies, WT Strategies. Matching key external and internal factor
sis the most difficult part of developing a SWOT matrix and requires good judment- and
there is no one best set of matches.

SO Strategies use a firm's internal strengths to take advantage of external
opportunities. All managers would like their organizations to be in a position where
internal strengths can be used to take advantage of external trends and events.
Organizations generally will pursue WO, ST, or WT Strategies in order to get into a
situation where they can apply SO Strategies. When a firm has major weaknesses, it
will strive to overcome them and make them strengths. When an organization faces
major threats, it will seek to avoid them in order to concentrate on opportunities.
WO Strategies aim at improving internal weaknesses by taking advantage of
external opportunities. Sometimes key external opportunities exist, but a firm has
internal weaknesses that prevent it from exploiting those opportunities. For example,
there may be a high demand for electronic devices to control the amount and timing of
fuel injection in automobile engines (opportunity), but a certain auto parts manufacturer
may lack the technology required for producing these devices (weakness). One possible
WO Strategy would be to acquire this technology by forming a joint venture with a firm


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having competency in this area. An alternative WO Strategy would be to hire and train
people with the required technical capabilities.
ST Strategies use a firm's strengths to avoid or reduce the impact of external
threats. This does not mean that a strong organization should always meet threats in the
external environment head-on. A recent example of ST Strategy occurred when Texas
Instruments used an excellent
WT Strategies are defensive tactics directed at reducing internal weaknesses and
avoiding environmental threats. An organization faced with numerous external threats
and internal weaknesses may indeed be in a precarious position. In fact, such a firm may
have to fight for its survival, merge, retrench, declare bankruptcy, or choose liquidation.
Quantitative Strategic Planning Matrix (QSPM)
The QSPM incorporates earlier stage details in an organize way to calculate the score of
multiple strategies in order to find the best match strategy for the organization.

According to Ferd R David, it takes six steps to build QSPM:
Step 1: List down all key external threats and internal weaknesses of the firm
Step 2: Assign weights to each key external and internal factor. These weights
are identical to those in the EFE Matrix and the IFE Matrix
Step 3: dentify alternative strategies that the organization should consider
implementing
Step 4: Determine the Attractiveness Scores (AS), defined as numerical values
that indicate the relative attractiveness of each strategy in a given set of alternatives.
The attractiveness score ranges from 1 to 4: 1 = not attractive, 2 = somewhat attractive,
3 = reasonably attractive, and 4 = highly attractive
Step 5: Caculate Total Attractiveness Scores. Total Attractiveness Scores are
defined as the product of multiplying the weights (Step 2) by the Attractiveness Scores
(Step 4) in each row. The higher the Total Attractiveness Score, the more attractive the
strategic alternative
Step 6: Sum Total Attractiveness Score. Add Total Attractiveness Scores in
each strategy column of the QSPM. he magnitude of the difference between the Sum
Total Attractiveness Scores in a given set of strategic alternatives indicates the relative
desirability of one strategy over another.


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CHAPTER II
ACTUAL BUSINESS SITUATION OF HAI PHONG BRANCH OF NAM VIET
JOINT STOCK COMMERCIAL BANK
2.1. Introduction to Hai Phong Branch of the Nam Viet Joint Stock Commercial Bank.
2.1.1 Overview of the Nam Viet Joint Stock Commercial Bank.
2.1.1.1 Introduction
Set up since 1995, after 15 years of operation, the Nam Viet Joint Stock Commercial
Bank (Navi Bank) has established its place in the financial-monetary market in Viet Nam that
was manifested in its rapid growth rate and stability in terms of total asset and the efficiency of

its the business activity. The NaviBank has demonstrated a strong vitality of a trade mark, which
suffices to affirm the correct business strategy.
In the context of economic integration that led to growing acute competition as at
present, the NaviBank has identified that it should follow a strategic thrust to enhance its
competitive capability through increasing its financial capability, perfecting the information
technology system and practice a good governance of risks.
NaviBank is proud to be a financial mainstay to support its clients in order to attain
greater successes in their business activities and daily life.
2.1.1.2 Vision and missions.
+ Vision: “ Becoming a leading retail bank in Viet Nam”
+ Missions:
- Striving to become a reliable financial partner to clients based on diversified financial
products, Services centering on the clients.
- Creating for those working in the NaviBank the most favorable working environment
with a commitment to bringing about various opportunities for them to develop their careers and
bring into full play their capability in order to contribute to the overall development of the
NaviBank.
- Bringing about long-term and attractive benefits through implementing sound business
strategy and good risks management.
2.1.1.3 Results and achievements attained.
2.1.1.3.1 Improvements of organizational structure, policies and management:
- NaviBank has separated the business function from the managerial function of the
Headquarter through the establishment and operation of the Nam Viet Transaction Office (16


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September 2010). The separation of the business and the managerial functions was aimed at
further enhancing the quality of the direction and governance in order to best support the
business activities.
- The shares of the NaviBank coded NVB were officially registered in the Ha Noi Stock

Exchange (HNX) on 13 September 2010. This constituted an important turning point, testifying
to the maturity of the trade mark NaviBank in Viet Nam‟s financial market when it met all the
difficult requirements of the State Bank of Viet Nam and HNX regarding registered shares.
2.1.1.3.2. Measures of control:
In order to ensure the safety and efficiency in its activities, a part from making sure that
all transactions in the day should be in line with the regulations, process and guidance of each
type of business, the Bank also pays special attention to risks management.
- Risk of liquidity: Risks of liquidity areas always under special supervision and control
of the Bank in order to preserve its capability for liquidity and to observe the regulations on
liquidity put forth by the State Bank of Viet Nam.
- Risk of credits: The Bank has implemented a number of various policies of control in
order to minimize risks of credits as much as possible on the basis of strengthening the
organizational apparatus, increasing the quality of appraising and approving the grant of credits,
strengthening the supervision and control before, during and after granting credits.
- Risk of interest rates: The Bank has improved the governance of the risk of interest rates
in a flexible and efficient manner. As a result, the interest rates of deposits and credits have been
adjusted according to changes of the market on the basis of the calculation of the actual costs,
the analytical reports of the average rates of the inputs and outputs to ensure that the gap of the
interest rates is always with a reasonable range and to make sure that the business activity is to
be efficient.
Additionally, the Bank places the control and supervision on the activities of the Bank on
the basis of the objective, impartial principle regarding all activities of the Bank; and the Bank
also put in the first place the organizational structure and system of documents, regulations,
guiding process.
2.1.2. Overview of the Nam Viet Joint Stock Commercial Bank - Hai Phong Branch.
2.1.2.1. Developments:
The Nam Viet Joint Stock Commercial Bank (abbreviated as NaviBank) formerly named
the Joint Stock Commercial Bank of Song Kien Rural Areas, was set up under the Permit No

19
00057/NH-GP dated 18 September 1995 issued by the State Bank of Viet Nam and the Permit
No. 1217/GP-UB dated 17 October 1995 issued by the Provincial People‟s Committee of Kien
Giang.
The Bank conducts its business activities under the Registration Certificate No.
4103005193 issued by the Planning and Investment Department of Ho Chi Minh City.
Throughout 15 years of operation, the Nam Viet Joint Stock Commercial Bank has established
its place in the financial and monetary market in Viet Nam as shown by its sustainable growth
and stability in terms of the size of the total assets and business efficiency.
Full name: Ngân hàng Thương mại Cổ phần Nam Việt (Nam Viet Joint Stock
Commercial Bank)
International transaction name: Nam Viet Joint Stock Commercial Bank
Short name: NAVIBANK
Head Office address: 343 Pham Ngu Lao, Pham Ngu Lao Ward, District 1, Ho Chi Minh City
Phone: (08) 38 216 216 Fax: (08) 39 142 738
Website: www.navibank.com.vn Email:
Established since 1995, throughout 15 years of operation, albeit not a long period of time,
it suffices to prove the strong vitality of a trade mark as well as the correct business strategy.
The NaviBank has affirmed its place in the financial and monetary market through its robust
growth rate and stability in terns of the total assets, the registered capital and the business
efficiency. At present, the registered capital of the Bank is VND 3.010 billion.
In the context of ongoing competition, in order to seize opportunities offered by the trend
of international economic integration, the Bank identifies that it should follow the strategic
thrust in upgrading its business capability through financial information technology capability
and the good governance of risks. Parallel to that, the Bank also pays attention to research and
development and application of information technology into widening the usability of the
financial services and products.
In addition to the head office at 343 Pham Ngu Lao, District 1, Ho Chi Minh City, the
Bank possesses a wide network of activities in 24 cities and provinces and more than 100
transaction sites throughout the country. The Bank employs staff size of 1300 professional and

dynamic members. The Bank‟s total assets passes the landmark of VND 20.000 billion, and the
profit before tax payment reached more than 241 billion.
The Nam Viet Joint Stock Commercial Bank – Hai Phong Branch (NaviBank Hai Phong)


20
was set up under the Business Certificate for the branch office No. 17001697-004 issued by the
Business Registration Section of the Planning and Investment Department of Hai Phong City. It
first registered on 24 November 2006 and registered for changed for the third time on 9
November 2011. NaviBank formally operated on 6 January 2007 and it became one of the main
branches in the North of the NaviBank. When first set up, NaviBank Hai Phong had only 30
employees with tow transaction sites in Hai An and Le Chan Districts. Up to now, after 5 years
of activities in Hai Phong, the NaviBank Hai Phong has constantly grown with the total assets of
somewhat VND 1.000 Billion, with a network of transaction at 08 sites and the staff size of
more than 100 members, among them, there are two master degree holders, 85 % of them are
university graduates and the rest are secondary professional training certificates and non-
professional working as guards or drivers. Taking good care of the clients, promoting marketing
with a list of diversified and modern financial services and products, NaviBank Hai Phong has
earned trust and confidence of many individuals and organizations.
2.1.2.2. Organizational structure:
The main office of the NaviBank Hai Phong is at No. 326-328 To Hieu, Ho Nam Ward,
Le Chan District, Hai Phong City. Since its birth, NaviBank Hai Phong has developed a wide
network with 08 transaction sites in order to create favorable conditions for business activities in
Hai Phong, Quang Ninh and Thai Binh, namely:
- NaviBank Hai An: 413 Ngo Gia Tu, Hải An District, Hai Phong
- NaviBank Le Chan: 88-90 Tran Nguyen Han, Le Chan District, Hai Phong
- NaviBank Hong Bang: 155 Quang Trung, Hong Bang District, Hai Phong
- NaviBank Ngo Quyen: 9F Tran Phu, Ngo Quyen District, Hai Phong
- NaviBank Quang Ninh: 577 Tran Phu, Cam Trung, Cam Pha, Quang Ninh
- NaviBank Thuy Nguyên: 49 Bach Đang, Núi Đèo, Thuy Nguyen District, Hai Phong

- NaviBank Hoang Van Thu: 18 Trần Hưng Đạo, Hong Bang District, Hai Phong
- NaviBank Thai Binh: 176 Hai Ba Trung, Đe Tham, Thai Binh.








21

Chart 2.1. Management Organisational Structure of Hai Phong
Functions and responsibilities of the leading staff of the sections and sub-sections:
- Director of the Branch: having the overall responsibilities for managing, directing all
activities of the whole branch, with the direct responsibility for business operation of the Section for
Clients Relations and Transaction Sections.
- Deputy Director of the Branch: having the direct responsibilities for Section of Client
Services, the Administrative Section, the Section of Accountancy, the Information Technology
Section and all client services by all the transaction sections in the branch.
Director in
General

Customer Relations
Division
Vice Director
(VD)



Customer Service
Division
Admin and HR
Division

Internal Monitor
Division

Accounting
division
IT Division

VD
Thuy Nguyen
VD
Hoang Van Thu

VD
Hai An
VD
Le Chan
VD
Hong Bang
VD
Ngo Quyen
VD
Quang Ninh
VD
Thai Binh



22
- Section for Client Relations: having the responsibility for providing credits and credit
repayment by clients such as enterprises and individuals in order to ensure the high level of
business efficiency; compiling and preparing reports on business activities to submit to the State

Bank and the Headquarters.
- Section for Client Services: the main function is to mobilize capital, develop the
network of depositors and managing the capital.
- Section on Administrative Affairs and Personnel: having the function of formulating
the monthly, quarterly and annual business plans; providing advisory inputs to the Director in
recruiting new employees, training, resource allocation, managing the salaries of the staff;
preparing plan for proper, equipment purchase; organizing events, in charge of PR and
marketing…
- Section for internal control: Inspecting, controlling the implementation of
professional regulations in line with the law, decisions of the State Bank and the NaviBank in
ensuring the safety of activities relating to money, credits and banking services.
- Section of Accountancy: carrying out statistic accounting and accounting in line with
the regulations of the branch, identifying financial criteria, settlement of financial revenues and
expenditures plan, the budget for salaries of the staff for the consideration of the Headquarters.
- Section of Information Technology: Formulating plans to develop a system of banking
information technology; running the computer network, the banking software.
2.1.2.3. Main business activities of NaviBank Hai Phong :
- Money deposit services: mobilizing capital from organizations, individuals from various
economic sectors, accepting deposits in NVD and foreign currency under various forms, diversified
timeframes.
- Credit services: providing credits to various economic enterprises and individuals
under the forms of providing loans to economic enterprises and individuals in the forms of
credits, discounted commercial papers and other valuable papers, guarantee and other forms in
line with the regulations of the State Bank.
- Payment services: providing payment services in the forms of providing payments
means, in-country payment or international payment services when permitted by the State Bank,
debt collection and treasury services.
- Other activities: Issuing and accepting payments for credit cards such as the NaviCard-
Debit, NaviCard-Credit, e-pockets … participating in the currency market, foreign exchange

23
business and business activities relating to gold.
2.1.2.4. Outcomes of business activities.
2.1.2.4.1. Capital mobilization.
Right after the establishment, NaviBank Hai Phong has paid attention to the work of
mobilizing capital in order to control the source of capital for business activities. Capital is an
important pre-condition, having the decisive factor relating to the scale, scope of activities as
well as other business activities of the banks. As such, the senior staff and the entire employers
of the NaviBank Hai Phong have paid special attention to activities relating to capital
mobilization with diversified forms, applying various products for money depositing, for
instance: saving deposits, deposits for payments, accumulative deposits, escalative deposits…in
order to mobilize as much as possible the idle capital among the local population and economic
enterprises…
In addition to normal forms of capital mobilization, NaviBank Hai Phong also has
regular programs of incentives, saving with rewards, setting up of NaviBank clubs with a view
to creating a special program to take special care of the clients and as an expression of
appreciation to clients, meeting reasonable needs of clients. Up to now, NaviBank Hai Phong
has had a big number of clients who have deposited their money in a traditional way. With a
network of 7 transaction offices in the city and the neighboring provinces, NaviBank Hai
Phong is trying to mobilize as much as possible the capital resources from the communities.
Table 2.1. Capital mobilization for 2009 – 2010 period by NaviBank Hai Phong
In million
Target
Year
2009
Year
2010
Year
2011

2010/2009
2011/2010
Level
+/-
%
Level
+/-
%
Timeframe
451,847
498,594
469,714
46,747
10.35%
(28,880)
-5.79%
Short-term
422,878
482.,84
455,641
59,406
14.05%
(26,643)
-5.52%
Percentage (%)
93.59%
96.73%
97.00%

Medium-term
28,969
16,310
14,073
(12,659)
-
43.70%
(2,237)
-
13.71%
Percentage (%)
6.41%
3.%
3.00%




Forms of
mobilization
451,847
498,594
469,714
46,747
10.%
(28,880)
-5.79%

24
Money deposit
67,874
103,935
69,337
36,060
53.13%
(34,598)
-
33.29%
Percentage (%)
15.02%
20.85%
14.76%




Money deposited by
economic enterprises
9,557
9,006
5,914
(550)
-5.76%
(3,092)
-
34.33%
Percentage (%)

2.11%
1.81%
1.26%




Other forms of
deposits
374,416
385,653
394.463
11,237
3.00%
8,810
2.28%
Percentage (%)
82.86%
77.35%
83.98%




Types of currencies
deposited
451,847
498,594
469,714
46,747

10.35%
(28,880)
-5.79%
VNĐ
348,016
361,628
399,858
13,612
3.91%
38.230
10.57%
Percentage (%)
77.02%
72.53%
85.3%




Foreign currencies
103,831
136,966
69,856
33,135
31.91%
(67,110)
-
4.,00%
Percentage (%)
22.98%

27.%
14.87%













-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
Year 2009
Year 2010
Year 2011
Chart 2.1: funding structure over time

Short – term
medium
and long term