The quality of financial assessment in the lending activity of Viet Nam commercial banks (Vietnam Joint Stock Commercial Bank for Industry and Trade)

INTRODUCTION

MINISTRY OF EDUCATION AND TRAINING
NATIONAL ECONOMICS UNIVERSITY

NGUYEN THI BICH VUONG

1.

In recent years, the investment projects in general and the financial evaluation projects
involving lending activity at commercial banks in viet nam in particular are becoming a
striking event on all the national forum, scientific workshop and the public that attracts the
significant attention of the scientists, the research companies, even the policy makers, the
managers and the officers. Based on this situation, the author decided to carry out the
research “The quality of the financial evaluation on investment projects involving lending
activity at commercial banks in viet nam (the example is conducted from vietnam joint
stock commercial bank for industry and trade)”
2.

THE QUALITY OF THE FINANCIAL EVALUATION ON INVESTMENT
PROJECTS INVOLVING LENDING ACTIVITY AT COMMERCIAL BANKS
IN VIET NAM (EXAMPLE FROM VIETNAM JOINT STOCK
COMMERCIAL BANK FOR INDUSTRY AND TRADE.

ID: 62340201
The summary of the thesis dissertation

The aim of the research

To answer the question “how to improve the quality of the financial evaluation on
investment projects involving lending activity at commercial banks in viet nam” and “ what

are the factors impact on the quality of the financial evaluation on investment projects
involving lending activity at commercial banks in viet nam?”
3.

Major: finance-banking

The rationale of the research

The object of the research

The main object of the research is the quality of the financial evaluation on investment
projects involving lending activity at commercial banks in viet nam which is depent on
several issues like: the ability of the evaluation staff, the information of the evaluation
activity, cost and evaluation time, the evaluation method and the evaluation means.
4.

The scope of the research

Thus, vietnam joint stock commercial bank for industry and trade is a large commercial
bank with one head office, 149 branches and more than 1000 dealing rooms in all cities
around viet nam, in this research, the author focused on 50 lending projects which are
inspired occuring from 2000 to 2014. A survey was conducted directly between 2013 and
2014 with more than 50 managers from dealing offices and more 200 evluation staffs at the
offices in viet nam.
5.

The research method

The author uses the common method like analysis, collection, comparision, statistics,
qualitative research and and quantity research.

6.

The overview of domestic researches and the drawback

Ha noi – 2016
1

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The most significant difference between this research and other researches is the
quantification of factors impact the quality of the financial evaluation on investment projects
involving lending activity at commercial banks in viet nam to make the decision at macro
level with the lender role belonged to the bank.
7.

CHAPTER 1.
THE OVERVIEW OF THE QUALITY OF THE FINANCIAL EVALUATION
ON INVESTMENT PROJECTS INVOLVING LENDING ACTIVITY AT
COMMERCIAL BANKS IN VIET NAM

The new contributions of the thesis

Based on the inherit knowledge and experience of available researches about the quality of
the financial evaluation on investment projects involving lending activity at commercial
banks in viet nam, this research contributes to some new ideas:
(1) Systematize and make clear the arguments of the quality of the financial evaluation on
investment projects involving lending activity at commercial banks in viet nam in general.
(2) Based on the secondary material is 50 investment projects that vietnam joint stock
commercial bank for industry and trade has accepted and inspired from 2000 to 2014, the

author conducted a survey focused on 2 main objects which are more 50 managers from the
dealing rooms in the whole system and more 200 evaluation staff who directly estimate the
projects at the subsidiary and the head office at vietnam joint stock commercial bank for
industry and trade to identify the real situation in the quality of the financial evaluation on
investment projects involving lending activity at commercial banks in viet nam. (3)
Quantification the influence of factors to the quality of the financial evaluation on investment
projects involving lending activity at commercial banks in viet nam to suggest the solutions
which are suitable for level of each factor. (4) The author used the maximum of the
secondary data through analysing several specific investment projects that vietnam joint
stock commercial bank for industry and trade evaluated and accepted to lend from 20002014. As a result, the author requires various solutions and recommendations to improve the
quality of the financial evaluation on investment projects involving lending activity at
commercial banks in viet nam
8. The research structure
The research is devided into 4 different chapters:
Chapter 1: the overview of the quality of the financial evaluation on investment projects
involving lending activity at commercial banks in viet nam.
Chapter 2: the real situation of the quality of the financial evaluation on investment
projects involving lending activity at commercial banks in viet nam.
Chapter 3: the assessment of the factors impact on quality of the financial evaluation on
investment projects involving lending activity at commercial banks in viet nam.
Chapter 4: the solutions to improve the quality of the financial evaluation on investment
projects involving lending activity at commercial banks in viet nam.
3

1.1 The research on the investment project
1.1.1 The definition of the investment project
The investment project is a group of activities that achieve a common goal based on the
input which is the sources and the output which is the outcome.
1.1.2 The classification of the investment project
- Based on the investment type: including 3 types: (i) the investment project involving the

construction works, (ii) the investment project without the construction works, (iii) the
mixture project involving investment and construction.
- Based on the working time: the short term project ( less than one year), the medium
project
- Based on the level of management: 4 main goups: group a group b group c and group d (13 years), the long term project ( more than 3 years).
1.2 The lending activity followed by the investment project of the commercial bank
1.2.1. The lending activity of the comercial bank
1.2.2. The lending activity followed by the investment project of the commercial bank
1.2.2.1.The definition of lending activity followed by the investment project of the commercial
bank
The investment project of the commercial bank is the project which is investment based on
the credit transaction of the commercial bank or this investment is the money that the
commercial bank lend to the organization or the investor which is followed by a common
term to achieve a project of the investor.
1.2.2.2.The lending process of the investment project of the commercial banks
The lending process of the investment project of the commercial banks
4


-

Evaluate of the investment project

-

Carry out the loan

-

Collect the debt

According to the bank, the financial evaluation of the investment project is consideration,
assessment and analysis in a scientific and comprehensive view which is followed by several
terms: the legal issue, the possibility, the efficiency and the ability to redeem of the
investment project, to help the bank to decide whether to len

1.3. The financial evaluation of the investment project involving lendingg activity of the

1.3.2.2. The content of the financial evaluation of the investment project of the commercial

commercial banks

banks or not.

1.3.1. The evaluation of the investment project
1.3.1.1. The definition of the evaluation of the investment project
The evaluation of the investment project of the commercial banks is the process that the
commercial banks assess, analyse and estimate a project in an objective, scientific and
comprehensive decision to make the best outcome.
1.3.1.2. The content of the evaluation of the investment project involving lending activity of
the commercial banks
- Evaluate the investment itself: evaluate the investment on the legal side, the market, the
technique, the investment management, the finance, the environment and the economysociety.
- Evaluate the investor: evaluate the legal status, the financial ability of the customer, the
mortgage asset, the redeem ability.
1.3.1.3. The process of the evaluation of the investment project of the commercial banks
This process consists of following steps:

- Evaluate the total invested capital and the structure of the invested capital as well as the
progress of using the capital.

- Evaluate the cash flow of the project
- Evaluate the indicators estimate the financial efficiency
- Evaluate the risk of the project
1.3.2.3. The financial evaluation of the investment project
The general method to evaluate the finance of the investment project is to compare and
contrast the project to the standards which are assigned in law and the international economic
terms or the international rules.
The financial evaluation methods are: compare the indicators, analyse the sensitivity of the
project and forcast through applying model.
1.4. The quality of the financial evaluation of the investment project involving lending
activity of the commercial banks
1.4.1. The definition of the quality of the financial evaluation of the investment project

- Check before lending

According to the bank term, the the quality of the financial evaluation of the investment
project is the consideration of the project whether this one is suitable for the bank

- Check during the lending time

requirements based on several factors such as if the evaluation process is scientific and

- Check after lending

comprehensive, the evaluation time is fast or not…

1.3.2. The financial evaluation of the investment project involving lending activity of the
commercial banks

1.4.2. The indicators to the quality of the financial evaluation of the investment project

involving lending activity of the commercial banks

1.3.2.1. The definition of the financial evaluation of the investment project

5

1.4.2.1. The qualitative indicators
6


1.4.2.2. The quantity indicators: the real ratio of the project which is successful, the ratio of
the projects which are adjusted, the criteria of account outstanding and the framework of the
long term credit debt, overdue debt, bad debt, the profit criteria.
1.4.3. The factors impact on the quality of the financial evaluation of the investment
project involving lending activity of the commercial banks

CHAPTER 2.
THE REAL SITUATION OF THE QUALITY OF THE FINANCIAL
EVALUATION ON INVESTMENT PROJECTS INVOLVING LENDING
ACTIVITY AT VIETNAM JOINT STOCK COMMERCIAL BANK FOR
INDUSTRY AND TRADE

1.4.3.1. The subjective factors: the evaluation staff, the evaluation equipment, the source of

2.1. The overview of vietnam joint stock commercial bank for industry and trade

information, the operation of the evaluation, the process and the evaluation method.

2.1.1. The general view about the history and the framework structure of vietnam joint

1.4.3.2. The objective factors

stock commercial bank for industry and trade
2.1.2. The main activity of vietnam joint stock commercial bank for industry and trade

A) The factors belong to the investor

Table 2.1 The financial indicators

The financial difficulty of the investor
The management standard of the investor

Unit: Billion dong

The project record written by the investor
B) The environment factors: economic environment, political environment, legal
environment
C) Other objective factors: the market factor, the discount ratio, the inflation rate, the
exchange rate

Indicator

The growth rate (%)

2010

2011

2012

2013

2014

Total asset

367.731

460.420

503.530

576.368

661.132

25,2%

9,4% 14,5% 14,7%

Total funding

339.699

420.212

460.082

511.670

595.094

23,7%

9,5%

11,2

16,3

Gross loan

234.205

293.434

405.744

460.079

542.685

25,3%

38,3

51,4

17,9

Profit before tax

4.638

8.392

8.168

7.751

7.302

80,9%

-2,7%

-

-

Charter capital

15.172

20.230

26.218

37.234

37.234

33,3%

29,6

42%

0%

Owner’s equity

18.170

28.491

33.625

54.075

55.013

56,8%

18%

60,8

1,7%

11/10

12/11 13/12 14/13

ROA

1,5%

2,03%

1,7%

1,4%

1,2%

0,53%

-

-

-

ROE

22,1%

26,74%

19,9%

13,7%

10,5%

4,64%

-

-

-

Npl/gross loan

0,66%

0,75%

1,35%

0,82%

0,90%

0,09%

0,6%

-

0,08

-4%

0,5%
-6%

%
0%

-

2,87

-

0,24

%

2,8%

Dividend payout ratio

13,47%

20%

16%

10%

10%

6,53%

Capital adequacy ratio

8,02%

10,57%

10,33%

13,2%

10,4%

2,55%

(CAR)

(Source: The annual report of vietinbank 2010-2014)
According to the table, the total asset increeased over the period shown. The total
asset to 31/12/2014 was 661.132 million dong, increases 14,7% in compare to that of 2013
and 103% to the plan of the board of director. The source of mobilized capital of vietinbank
also increaseed over the year and reached a peak at 23,7% in 2011 in compare to that of
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2010. However, in 2014, although the bank carried out many mobilized activities and arrange
the source of capital in a positive method, vietinbank remained the stability and sustainable

2.2.3. The real situation of the quality of the financial evaluation method of the investment
projects involving lending activity at vietnam joint stock commercial bank for industry and

developmen; until 31/12/2014, the debit balance of the capital was more 595 thousand billion

trade

dong, increased 16,3% in compare to 2013 and reached 104% to the plan of the board of
director. Meanwhile, the credit balance reached the highest point by 51,4% to that of 2012.
Until 31/12/2014, the credit balance was more 543 thousand billion dong, reached 105% to
the plan of the board of director, increased 18% to that of 2013 and more than the average
growth of all vietnam banks. The capital coefficient factors were remained and followed the
policy. Although the income before tax had a downward trend over the year, the year 2014
reached a profit at 7302 billion dong and 100,3% to the plan of the board of director. In 2012,
because of the influence of the economy fluctuation, the bad debt of all the commercial banks
in viet nam increased while that of vietinbank grew by 1,35%, the highest.
2.2. The real situation of the quality of the financial evaluation on investment projects
involving lending activity at vietnam joint stock commercial bank for industry and
trade
2.2.1. The financial evaluation process of the investment projects involving lending activity
at vietnam joint stock commercial bank for industry and trade

As concerned above, to estimate the quality of the financial evaluation method of the

investment projects involving lending activity at vietnam joint stock commercial bank for
industry and trade, the author based on these quantity terme:
The real ratio of the successful projects.
Table 2.2 The real ratio of the successful projects from 2010-2014
2010

2011

2012

2013

2014

1. The total number of projects
2. The total number of accepted projects
3. The total number of refused projects
4. The number of successful projects
5. The real ratio of the successful projects

Indicators

1906
1785
121
1785
100%

2012
1905

107
1886
99%

1740
1454
286
1361
94%

2147
2014
133
1940
96%

2166
2048
118
1948
96%

6. The real ratio of the refused projects

6,35%

5,32%

16,44%% 6,19%% 5,45%

(Source: The planning board of vietinbank 2010-2014)
As a result, the real ratio of the successful projects is quite good.

Step 1: Identify the investment model
Step 2: Estimate the investment capital and the capital structure

The ratio of the projects which were adjusted
Table 2.3 The ratio of the projects which were adjusted from 2010-2014

Step 3: Estimate the cash flow
Step 4: Compute and analyse the efficiency indicators of the investment project

Indicators
1. The number of accepted projects

Step 5: Estimate the risk of the investment project

2. The number of adjusted projects

Step 6: Prepare the statement

3. The ratio of adjusted projects

2.2.2. The financial evaluation method of the investment projects involving lending activity
at vietnam joint stock commercial bank for industry and trade
The financial evaluation methods that the vietnam joint stock commercial bank for industry

2010

2011

2012

2013

2014

1785

1905

1454

2014

2048

256

294

307

344

406

14,34% 15,43% 21,11%

(Source: The planning board of vietinbank from 2010-2014)

Based on this table, the numbers of adjusted projects in recent years are quite high.
The ratio of long term debt and the ratio of overdue longterm debt

and trade is applying are:
Compare the indicators
Analyse the sensitive indicators with each variable of each factor
9

17,08% 19,82%

10


Table 2.4 The ratio of overdue debt from 2010-2014
Indicators

2010

2011

2012

Table 2.6. Some indicators from four commercial banks from 2010 to 2014
2013

2014

1. The ratio of long term debt

27,3% 33,67% 45,8% 56,4% 82,4%

2. The ratio of overdue longterm debt

8,7%

5,8%

10,3%

6,2%

7,5%

3. The ratio of longterm debt 3,4,5

0,44%

0,56%

1,08% 0,61%

0,7%

Year

2010

(Source: The planning board of vietinbank from 2010-2014)
The ratio of the long term profit and the rate of profit

Bank

(1)

(2)

(3)

(4)

(5)

Vietinbank

100%

6,35%

Agribank

99%

BIDV

(6)

14,34%

27,3%

0,44%

55,01%

10,08%

17,75%

25,66%

0,59%

46,23%

100%

12,31%

15,09%

28,9%

0,33%

59,02%

VCB

100%

8,67%

13,97%

24,55%

0,5%

50,3%

Vietinbank

99%

5,32%

15,43%

33,67%

0,56%

62,36%

Agribank

98%

10,55%

16,68%

41,07%

0,72%

57,3%

BIDV

99%

6,50%

17,1%

37,5%

0,47%

62,05%

VCB

100%

5,12%

15,04%

27,8%

0,4%

54,8%

Vietinbank

94%

16,44%

21,11%

45,8%

1,08%

56,98%

Agribank

90%

21,07%

27,8%

43,61%

1,16%

43,11%

BIDV

92%

15,92%

20,68%

45,08%

0,9%

51,81%

VCB

92%

16,9%

23,27%

41,8%

1,01%

50,02%

Vietinbank

96%

6,19%

17,08%

56,4%

0,61%

69,13%

Agribank

92%

11,2%

22,09%

60,72%

0,67%

63,81%

BIDV

94%

9,98%

19,6%

62,07%

0,41%

67,07%

VCB

92%

7,47%

18,97%

53,89%

0,58%

62,77%

Vietinbank

96%

5,45%

19,82%

82,4%

0,7%

60,2%

Agribank

94%

7,09%

17,66%

77,9%

0,81%

63,7%

BIDV

97%

5,14%

18,05%

86,54%

0,62%

68,55%

VCB

95%

4,96%

17,54%

80,48%

0,73%

64,13%

Table 2.5: The rate of profit from 2010-2014
2011
Unit: billion dong
Indicators
1. The profit from long termcredit activity
2. The gross loan

2010

2011

2012

2013

2014

1.985

4.560

3.980

4.185

3.794

195.670 203.580 308.604 365.075

3. The profit from credit activity
4. The rate of profit
5. The ratio of long term profit

440.650

3.608

7.312

6.985

6.054

6.302

1,12%

2,73%

1,62%

1,23%

1,09%

62,36% 56,55% 69,13%

60,2%

55,01%

2012

(Source: The planning room at Vietinbank from 2010-2014)
The rate of profit at vietnam joint stock commercial bank for industry and trade from 20102014 was low but quite stable and remained at more 1% with the highest one at 2,73% in

2013

2011. Meanwhile, the ratio of long term profit was around more 50% and increased gradually
from 55,01 in 2010 to 60,2% in 2014. It means that the projects that banks are investing bring
a numerous profits to the bank and the high quality of the financial evaluation of the projects.
2.2.4. Compare the real situation of the quality of the financial evaluation of the
investment projects at vietnam joint stock commercial bank for industry and trade to other
banks through some quatity indicators

2014

(Source: Integrated planning department of the bank from 2010 to 2014)

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2.2.4. The specific evaluation of projects in vietnam joint stock commercial bank for
industry and trade.

CHAPTER 3.
IMPACT ASSESSMENT OF THE FACTOR TO QUALITY EVALUATION OF
INVESTMENT PROJECT FINANCING IN VIETNAM JOINT STOCK
COMMERCIAL BANK FOR INDUSTRY AND TRADE

To visualize clearly about the financial evaluation activity investment projects involving
lending activity in vietnam joint stock commercial bank for industry and trade, we consider a
number of specific investment project.

3.1. Research model and hypotheses.

• Project 1: Investment in purchase container kedah of vietnam national shipping lines

Appraisers

• Project 2: Purchasing 20 renewed locomotive d19e maded by china of vietnam
Information sources

railways.

Evaluation agency

• Project 3: Investment in purchase facilities to serve business production of viet hung
construction trading & service limited company.

The quality of
evaluation
work

Evaluation process

• Project 4: Exploiting gold mine tan kim of hai longm cooperative.

Evaluation criteria
Authentication method
Means of Verification

Diagram 3.1 Research model
3.2. Research process

3.2.1. Experimental study
3.2.2.1. Select the template
Through the process of gathering information of the project which invested by
Vietnam joint stock commercial bank for industry and trade from 2010 to 2014, the author
selected 50 project expired to examine and gather information.
3.2.1.2. Find out the scale.
The construction scale of examining for the factor effecting of the model are performed in the
order:
-

13

First step: building the scale preliminary survey according personal opinion and the
general knowledge of scientific research.
14


-

Second step: examining the opinion of the experts in the field of project evaluation in
vietnam joint stock commercial bank for industry and trade and some experts in the
field of banking.

-

Third step: using a questionnaire examine for the first time to carry out a preliminary
examine on the small sample size.

-

Fourth step: analysting and checking the reliability and the convergence of scale of
examining through the research methods as evaluating the reliability by cronbach
alpha coefficient, analyzing the efa explore factors.

3.2.1.3. Design questionnaire.
After the construction and adjustment of scale, the scale is showed official to conduct a
survey in 50 projects with 50 managers and more than 200 examiners. The result will be
analyzed in-depth to check the data, analyze statistics and check the research hypothesis. The
detail questionnaire is used for managers and examiners.
3.2.1.4. Method of analysis.
The method of analysis is applied in the research like:
-

Descriptive statistics and statistics inference.

-

Rating the reliability and validity of scales.

-

Analyzing explore factors efa.

-

Analyzing variances anova.

-

Analyzing multivariate regression.

Table 3.1 The information of respondents.
3.2.2.2. Analyzing of data reliability.
The result of analysis shows that cronbach alpha coefficient of the scale-surveyed achieved
high confidence level, the lowest coefficient is the scale of quality of the evaluation work,
0.712, higher than lever 0.6. The correlation coefficients variables-total of the variable
observed with overall scale are peaking above 0.5. This factor demonstrates good correlation
of the observed variables with the overall scale of the variable performance.
3.2.2.3. Analyzing the factors affecting the quality of the evaluation work.
* Factor analysis for the group of independent variables.
The result shows that:
-

Kmo coefficient (0735) shows the results of factor analysis is to ensure accuracy.

-

Accreditation bartlett for sig coefficient (0.00) show the assurance of level of
statistical significance of the analysis results.

-

The variance (76,69) show that the variability of these factors which is gave from
factor analysis will explain the 76.69% of the overall variation in the initial survey
data, this is quite rate.

-

Coefficient of eigenvalues of the 7th factor is 1,314, this is the lowest value that
higher that 1. This factor confirms that there are 07 factors that can launch from the

analysis.

-

The load factor coefficient of each observed variables represented for each factors are
higher 0.5.this factor show that analyzing efa is guaranteed and having the influence
of each observed variables to the factor that the variables express.

3.2.2. Analyzing the result of formal study.
3.2.2.1. Analyzing the characteristic of respondents.
Thedemographic characteristics and information about the number of officers, during an
assessment of the project are summarized in the above table.

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As a result, the factor analysis for the independent variables showed that there are 07 factors
from the analysis given the reliability is ensured.

• Factor analysis for the dependent variable
The analytical results for the dependent variable showed that:
-

Kmo coefficient equal to 0.5, which is the minimum value allowed for this coefficient,
shows that the results of factor analysis is to ensure accuracy.

-

Inspection of bartlett for sig coefficient = 0.00. From that, we can see that statistical
significance level of analytical results is guaranteed.

-

The result of variance (72.22) shows that the variability of the factors which gave by
factor analysis will explain 72.22% variation of the overall in the initial survey data.
This is high rate.

independent variables are shown in close correlation with the dependent variable is the
effectiveness of the evaluation, with level significant correlation at 0.01. Person correlation
coefficients of the independent variables with the dependent variable are higher than 0. This
factor shows that the correlation is the same way. As a result, with this result of analysis,
independent variables do not show a correlation with each other, between the independent
variables and the dependent variable are shown good correlation.
3.2.2.6. Regression analysis.
Results of multivariate regression analysis showed that:

• The coefficient r equal 0778. This result show that there is 78% of the variation in the
quality of the evaluation work is represented by the factors in the model.
• Durbin-watson coefficient equal 1.880, approximately equal 2. It show that there
aren’t phenomena of correlation between the independent variables.

-

Coefficient eigenvalues of 1st factors has a value of 1,444, which is the smallest value
higher than 1. This value confirms that having 01 factors that may be made from the
analysis.

• In anova analysis, f coefficient equal 100.667 and sig coefficient equal 0.000. It show

that the results of the regression analysis is absolutely guarantees the reliability.

-

The load factor coefficient of each observed variables represented for each factors are
higher 0.5. This factor show that analyzing efa is guaranteed and having the influence
of each observed variables to the factor that the variables express.

• Regression coefficients table with statistical significance level for each factor are
lower than the maximum allowed 0.05, so that all independent variables are affecting
to the dependent variables which are the effectiveness of project evaluation, there are
no variables removed from the model.

The dependent variable was analyzed as a factor and represented by two observed variants
cltd2 and cltd1, is encrypted to cltd.
3.2.2.4. Descriptive statistical analysis.

•
•
•
•
•
•
•
•

Review by respondents about the quality of the examiner.
Review by respondents about sources.
Review by respondents about organizations evaluation work.
Review by respondents about the appraisal process.

Review by respondents about the evaluation criteria.
Review by respondents about the evaluation method.
Review by respondents about means of verification.
Review by respondents about the quality of evaluation work.

• The normal distribution of the residuals after a regression analysis showed that the
residue with a normal distribution with a mean of 0 (1.79 * e ^ -15), standard
deviation equal to 1 (0982).
As a result, the testing of regression models have been accepted, thereby, the independent
variables in the model affect the dependent variable according to the regression equation
standardized format as follows:

CLTD = 0.354*CBTD + 0.327*NTT + 0.310*PPTD + 0.289*QTTD +
0.223*TCTD + 0.223*CTTD + 0.218*PTTD

The result of analysis shows that there aren’t correlations between the independent variables
together after they have been calculated using standardized methods in software. Between the

From the regression equation, we can see the factor “quanlity of examiner” expressed the
most powerful influence on the quality of evaluation work; accurate and reliable information
source is the next factor; the remaining factors ranked in the following order: the selection of
a modern evaluation methods; reasonable appraisal process; the organization the examiner;
evaluation criteria to be applied effectively; and the final is modern, full of means of
verification.

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3.2.2.5. Correlation analysis of factors.

3.2.2.7. Analysis of variance.

CHAPTER 4

To clarify the influence of the factor characteristic of examiner, the number of examiner,
evaluation time whether or not the impact on the quality of evaluation work, author
conducted analysis of variance to compare and comment on the difference between the
effectiveness of the evaluation with the above characteristics.

THE SOLUTIONS TO IMPROVE THE QUALITY OF THE FINANCIAL
EVALUATION ON INVESTMENT PROJECTS INVOLVING LENDING
ACTIVITY AT VIETNAM JOINT STOCK COMMERCIAL BANK FOR
INDUSTRY AND TRADE

• Assess the impact of gender of the examiner.

4.1. Orientation activities of vietnam joint stock commercial bank for industry and

• Assess the impact of experience of the examiner.

trade.

• Assess the impact of qualifications of the examiner.

4.1.1. Oriented development of vietnam joint stock commercial bank for industry and trade
to 2020.

• Assess the impact of income of examiner.

4.1.2. Orientation of lending activity according the investment project of vietnam joint

• Assess the impact of evaluation time.

stock commercial bank for industry and trade to 2020.

• Assess the impact of the number of examiner.
3.3. Assess the quality of the financial evaluation on investment projects involving
lending activity at vietnam joint stock commercial bank for industry and trade

3.3.1. The achievements
-

About the appraisal organizations.
About the information used to assess.
About the processes and content of evaluation.
About the examiner.
About the evaluation time and cost.

In the period 2010-2020, vietnam joint stock commercial bank for industry and trade will
adopt policies to encourage investment in projects, production and business plans which
effective as the manufacturing business exports. Beside the group of state enterprises,
customers of special grade are normally traditional customers as vietnam oil and gas group,
vietnam posts and telecommunications group, vietnam electricity… to achieve this purpose,
vietnam joint stock commercial bank for industry and trade should set out the motto for the
evaluation of financial activities of investment projects oriented: the financial evaluation on
investment projects have to looking forward the perspective of lenders, investor to consider
and appraise; it must proceed from the real situation of the sector and to serve the credit,

3.3.2. Limited and reasons.

especially medium and long term credit of the bank. In addition, it also must be universal in
the entire system, with officers on duty in different parts with different demanding

3.3.2.1. Limited.

requirements.

-

About the science in management.
About the technical evaluation.
About the content evaluation.

4.2. The solutions to improve the quality of the financial evaluation on investment
projects involving lending activity at vietnam joint stock commercial bank for industry
and trade.

3.3.2.2. Reasons.

4.2.1. The solution about the examiner.
a. Subjective reasons.
-

b. Objective reasons.

Establish a network of experts and consulting organizations.
Strengthening cooperation support and studying of the experience of credit institutions
in the financial evaluation of the project.

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-

Raise awareness of the role of financial appraisal of investment projects.
Organization of expert training, professional financial evaluation of of investment
projects.

4.2.2. The solution of the information source.
-

The information about investor.

-

The internal information bank.

-

The outside information.

Sensitivity analysis method one-way. Two-way.

-

The method eliminates the risk.

4.2.5. The solution about organizing the evaluation work.
4.2.6. The solution about the evaluation criteria
4.2.7. The solution about the evaluation content.

For the appraisal of project loans.

by the ordinance on accounting and statistics.

level and quality of financial evaluation of investment projects in the fields of management
sector. The result of evaluation of this project is an important base for the bank stick, used in
the process of project evaluation.

4.3.3. For the state banks.

4.2.4. The solution about evaluation process.

-

Government should take measures of economic, administrative, forcing businesses to abide

The ministry and the managing agencies need to support further enterprises in raising the

-

For the appraisal of borrowers.

4.3.1. For the goverment.

4.3.2. For the related ministries.

4.2.3. The solution about authentication method.

-

4.3. Recommendation.

State bank as a macroeconomic management agency on bank activities need to perform the
function of directing, direction, and build a multidimensional information system of high
quality which can be provided to commercial banks through the "purchase information".

4.3.4. For the investor.
Investors should be aware of the role properly of project evaluation in general and and
financial evaluation of investment projects in particular to be able to assess in an objective,
serious about the financial performance of the project, from that the investors have invested

4.2.8. The solution about the technical evaluation.
-

Improving technical identifying and evaluating the cost items and the economic

-

benefits of the project in financial performance appraisal.
Improving technical selection and application finance to the items of cost / benefits of

-

the project.
Improving calculation technique and selecting discount rate in effective financial

properly oriented, efficient as well as ensuring the viability of the project.

appraisal of the project.
-

Improving the technical analysis of project risks.

4.2.9. The other solution.
-

Preparation of financial evaluation handbook investment projects.

-

Establish centers and forecast calculations.
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CONCLUSION

LIST OF WORKS HAS PUBLISHED BY AUTHOR

Based on systematized basis of theoretical issues and practical the work of the financial
evaluation on investment projects involving lending activity at vietnam joint stock

1. Nguyen Thi Bich Vuong (2009), “Managing funds commercial banks as market
interest rates rising”, Currency finance magazine.

commercial bank for industry and trade, thesis has analyzed and interpreted some basic

2. Nguyen Thi Bich Vuong (2009), "The exchange rate and the impact on exportimport operations in vietnam", Journal of commerce.

issues:
Firstly, from a graduate student on the basis of practical, thesis was presented the
situation of the financial evaluation of investment projects on investment projects involving
lending activity at vietnam joint stock commercial bank for industry and trade by four
specific project. Therefrom evaluating the advantages , disadvantages and reason on
investment projects involving lending activity at vietnam joint stock commercial bank for

3. Nguyen Thi Bich Vuong (2010), "Socialization of bank operations and improve
access to financial services by ethnic minority people in Dien Bien", Magazine
state bank of Vietnam.

industry and trade.

4. Nguyen Thi Bich Vuong (2014), “Advance the quality of the financial evaluation
on investment projects involving lending activity at commercial banks in Viet
nam”, Journal of financial and monetary markets, No.19, page 33-36.

Secondly, exploring the factors affecting the quality of the financial evaluation on
investment projects involving lending activity at commercial banks, from that, gathering the

5. Nguyen Thi Bich Vuong (2014), "About bank credit growth currently", Journal of
economics and forecasting, No. 23, page 32-34.

secondary data and primary data to analyze to see the degree of influence of each factor as a

6. Nguyen Thi Bich Vuong (2015), "Restructuring of commercial banks: results and
forecast", State tax journal, No. 5, page 15-17.

basis for proposed solutions and recommendations to improve the financial evaluation of
investment projects on investment projects involving lending activity at vietnam joint stock
commercial bank for industry and trade.
Beacause of little practical experience and limited in practical time, thesis will be

7. Nguyen Thi Bich Vuong (2015), "Lessons learned operating monetary policy in
2014 - viewpoint and forecast 2015", Proceedings of the national symposium, page
95-102.

more flaws. I’m very happy to receive the oppinions of teachers as well as peers to complete
thesis.
Sincerely thank!

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