Báo cáo thực tập an binh commercial joint stock bank (ABBank) ha noi branch

VIETNAM NATIONAL UNIVERSITY, HANOI
INTERNATIONAL SCHOOL
***

GRADUATE INTERNSHIP REPORT
INTERNSHIP COMPANY/INSTITUTION:
Transaction Office No. 109 Tran Dang Ninh
An Binh Commercial Joint Stock Bank (ABBank) - Ha Noi Branch
Address: No.109 Tran Dang Ninh, Cau Giay Street, Ha Noi City.

Supervisor: Mr. Pham Duc Cuong
Student’s full name: Nguyen Khanh Ly
Student’s ID: 11071235
Major: International Business
Class: Ib2012B

Hanoi, 11/03/2016.


ACKHOWELDGEMENT
.At first I would like to express my International School – Viet Nam
National University - the cradle has trained me since the first steps into
university lecture halls, has given me opportunity for me to participate in
awareness practice session this useful to accumulate more knowledge and
valuable practical experience, creating a firm basis for the future career.
Also, I would like to take the opportunity to express my gratitude to my
internship advisor, Mr. Pham Duc Cuong, senior lecturer, international school
whose direction, guidance and support helped me a lot in writing this report.
It was a great pleasure for me to work in Transaction Office 109 Tran Dang
Ninh - An Binh Commercial Joint Stock Bank - Hanoi Branch as an intern. I
thank all the employees for being friendly and cooperative. I was taught lots of

important things throughout my internship career because of their proper
attention and cooperation.
My deepest appreciation and special thanks goes to Mr. Chuyen, the department
manager of Transaction office, for extending his support in compiling this
report. I would specially like to thank Mr. Dat, the expert of Transaction office,
who helped me a lot during my Internship days with valuable advices, guidance
and necessary information.
At last I must mention the wonderful working environment and group
commitment of this bank that has enabled me a lot deal to do and observe the
bank activities during my internship period of six weeks.
Sincerely yours,
Khanh Ly


TABLE OF FIGURE
1.3

Fig-1.1: Organization and operation at Tran Dang Ninh Transaction

05

1.4

Office
Fig-1.2: Business Outcome of ABBANK (2013-2015)

06

1.4

Fig-1.3: Balance Sheet of ABBANK (2013-2015)

07-08

2.1.1 Fig-2.1: Situation in the mobilization of Tran Dang Ninh Transaction

09

Office (2013-2014)
2.1.1 Fig-2.2: Growth of the sources of mobilized capital (2013-2015)

10

2.1.2 Fig-2.3: Lending situation of Tran Dang Ninh Transaction Office (2013-

11

2015)
2.1.2 Fig-2.4: Growth rate of outstanding loans (2013-2015)

12

2.2.2 Fig-2.5: Credit process in An Binh Commercial Joint Stock Bank

17

2.2.3.1 Fig-2.6: Volume, sales, debt recovery volume, closing outstanding

19

balance of loans for corporate customers at Tran Dang Ninh Transaction
Office (2013-2015)
2.2.3.1 Fig-2.7: Growth in lending operations for corporate customers at Tran

20

Dang Ninh Transaction Office (2013-2015)
2.2.3.1 Fig-2.8: Outstanding loans for corporate customers by loan terms at Tran

21

Dang Ninh Transaction Office (2013-2015)
2.2.3.1
-2 Fig-2.9: Lending growth rate of corporate customers at Tran Dang Ninh

22

Transaction Office (2013-2015)
2.2.3.2 Fig-2.10 Debt recovery coefficient for corporate customers at Tran Dang

24

Ninh Transaction Office (2013-2015)
2.2.3.2 Fig-2.11: Credit fund turnover of corporate customer loans at Tran Dang

24

Ninh Exchange Office (2013-2015)
2.2.3.2 Fig-2.12: Income from loans, and corporate customer loans in Tran Dang 26
Ninh Transaction Office (2013-2015)

2.2.3.2 Fig-2.13: Growth on income from loan activities of corporate customer in 26
Tran Dang Ninh Transaction Office (2013-2015)
2.2.3.2 Fig-2.14: Income from corporate customer loan in Tran Dang Ninh
Transaction Office (2013-2015)

27


TABLE OF CONTENT
1.0
1.1
1.2
1.3
1.4

CHAPTER 1: OVERVIEW OF ABBANK
INTRODUCTION
MILESTONE
TRANSACTION OFFICE NO. 109 TRAN DANG NINH
RECENT BUSINESS RESULTS:

01-08
01-02
03-04
04-05
06-08

2.0
2.1
2.1.1

2.1.2
2.1.3
2.2
2.2.1

CHAPTER 2: BUSINESS PRODUCTION OPERATIONS OF
GENERAL
BUSINESSOFFICE
ACTIVITIES
TRANSACTION
The Situation of Capital Mobilization
Lending situation
Other Business Activities
LENDING OPERATIONS FOR CORPORATE CUSTOMERS
Some regulation on the implementation of lending operations for

09-34
09-13
09-10
10-12
13
14-28
14-16

2.2.2

corporate customers at ABBANK
Credit process in An Binh Commercial Joint Stock Bank:

16-19

2.2.3

The situation and performance of lending operations for corporate

19-28

customers at Tran Dang Ninh Transaction Office
The situation of lending operations for corporate customers

19-23

2.2.3.1
2.2.3.2
2.2.4
2.2.4.1
2.2.4.2

The performance of lending operations for corporate customers

23-28

Conclusions and Recommendations in order to enhance effective

28-34

operation in customer loan in Tran Dang Ninh Transaction Office
Conclusions found in research problem
Some suggestions on raising efficiency of corporate customer loan

28-30
30-34

activity
3.0 CHAPTER 3: TARGET INTERN, CONTENT OF WORK, METHOD 35- 37
OF IMPLEMENTATION.
3.1
TARGET INTERN
3.2
CONTENT INTERN AND METHOD OF IMPLEMENTATION
4.0
CHAPTER 4: ACHIEVEMENTS
4.1
COMMEMT
4.2
INTERNSHIP EXPERIENCE
4.3
CONCLUSION
REFERENCE

35
35-37
37-39
37
38
39
40


1

CHAPTER 1
OVERVIEW OF JOINT STOCK COMMERCIAL
BANK AN BINH
1.1 INTRODUCTION
1.1.1 Overview:
Full Name: An Binh Bank.
International transaction name: JOINT STOCK COMMERCIAL BANK AN
BINH
Short name: ABBANK.
Type: Enterprise shares.
Industry: Banking.
Establishment: On 13.05.1993
Headquarters: Hai Ba Trung Street, Da Kao Ward, District 1, HCMC
Key members of the leadership:
•

Mr. Vu Van Tien (Chairman of the Personnel Committee)

•

Mr. Cu Anh Tuan (Interim. Chief Executive Officer)

An Binh Commercial Joint Stock Bank (ABBank) Founded under license
No. 535 / GP-UB granted by the HCMC People's Committee on 13 May 1993.
After more than 18 years of operation and Development, is one of ABBANK
banks leading commercial in Vietnam with registered capital of over 4,200
billion. Together with a network of over 133 outlets and continues to be
expanded, ABBANK has become a prestigious address and familiar with more
than 10,000 corporate customers and 100,000 individual clients in 29 provinces

and cities nationwide.
With the support of the Electricity of Vietnam (EVN) - the strategic partner
in the country and the sharing of experience on professional management models
of Maybank – the foreign strategic partner, ABBANK has built up a


2
development plan from now until 2016. ABBANK aims for an annual growth
rate at an average of 35% - 40%.
In recent years, in order to diversify the range of products and services,
ABBANK also enhanced the cooperation with big Vietnamese and international
partners such as Agribank, Prudential Vietnam, Deutsche Bank, EVN SPC,
Prevoir VN, Postal Corporation of Vietnam (VNPost), Telecom Corporation
Viettel, etc.
1.1.2. Slogan:
“Provide to solution - Receive the smile"
ABBANK stands out in the market becoming a friendly retail bank.
ABBANK takes the customer needs and satisfaction as the core element of all
business activities. At ABBANK, customers are satisfied not only with the
product diversification and flexibility, but also the friendly and professional
services.
1.1.3 Vision:
ABBANK aim to become a leading commercial bank of Vietnam; operating
under the commercial banking model focused retailer, according to the best
international practices with modern technology, capable of competing with
domestic banks and international operations in Vietnam.
1.1.4 Mission:


Serving the customers with safe, efficient and value added products and

services.


Increase benefits for shareholders.



Moving towards the comprehensive and sustainable development of the

bank.


Investing in the human resources as the basis for long-term development


3

1.2 MILESTONE
Year 2011:
•

In September 2011, ABBANK launched the international credit card -

ABBANK Visa Credit.
•

On November 30, 2011 ABBANK official increased its charter capital to

VND 4,200billion through the issuance of bonus shares to existing shareholders

from the equity fund surplus.
•

As of December 2011, the ABBANK's transaction network reached 133

transaction sites spread across 29 provinces nationwide.
Year 2010:
•

ABBANK’s network reached 115 transaction sites covering 29 provinces

and cities nationwide.
•

ABBANK successfully issued 600,000 convertible bonds and 390,000

ordinary bonds for the International Financial Company (IFC) and Maybank.
•

In December 2010, ABBANK increased the chartered to VND 3,831

billion.
Year 2009:
•

In July 2009, ABBANK increased the charter capital to VND 2,805

billion.
•

In September 2009, ABBANK officially relocated the new Head Office at

170 Hai Ba Trung, Da kao Ward, District 1.
•

In December 2009, ABBANK officially increased the charter capital to

VND 3,482 billion.
Year 2008:
•

ABBANK successfully deployed the core banking system (Core Banking)

in the operation throughout the system.
•

Maybank officially became the foreign strategic partner of ABBANK

with the ownership of 15%.
•

ABBANK increased the charter capital to VND 2,705 billion.

Year 2007:


•

4
ABBANK signed a strategic cooperation with Agribank and other

affiliates and subsidiaries of EVN such as: PC1, PC2, PC3 ...
•

ABBANK became a member of PayNet. Also, the charter capital of

ABBANK increased to VND 2,300 billion.
Year 2006:
The charter capital from VND165 billion in the beginning of the year to
VND 1,131 billion at the end of the year.
Year 2005:
Electricity Corporation of Vietnam (EVN) became a strategic shareholder
of ABBANK. Other major shareholders including: Petro Vietnam Finance
Corporation (PVFC), Hanoi general Export Import Corporation (GELEXIMCO).
Year 2004:
ABBANK increased the chartered capital to VND 70.04 billion.
Year 2002:
In order to meet the increasing demand of the customers, ABBANK
conducted a strong reform of structure and human resource to focus on
specialize commercial banking business.
Year 1993:
An Binh Commercial Joint Stock Bank (ABBANK) was established under
the license No.535/GP-UB issued by People's Committee of Ho Chi Minh City
date May 13, 1993

1.3. TRANSACTION OFFICE NO. 109 TRAN DANG NINH

1.3.1 Transaction Office No. 109 Tran Dang Ninh - An Binh Commercial
Joint Stock Bank (ABBank) – Ha Noi Branch:
On July 03, 2007, ABBank opened Tran Dang Ninh Transaction Office at

No. 109 Tran Dang Ninh - Cau Giay - Hanoi belonging to An Binh Commercial
Joint Stock Bank -Ha Noi Branch with basic functionality and tasks as follows:
Short term, medium term and long term capital mobilization by time deposits,
certificates of deposit, receipt trust capital for investment and development from
organizations; getting loans from the State Bank of Vietnam (VSB) and other


5
credit institutions; lending of short-term, medium-term and long-term loans for
economic development purposes; discount of commercial bills, bonds and other
valuable papers; capital contributions and joint venture; provision of payment
services between banks.
1.3.2 Organization and operation model:
Head of Transaction
Office

Customer Relation

Fund Accounting

Department

Department

Customer

Credit

Relation

Management

Division

Division

Accounting

Warehouse

Division

Fund Division

Figure – 1.1: Organization and operation at Tran Dang Ninh Transaction
Office
 Board of Directors
Head of Transaction Office: Vu Dang Chuyen
Duties: Plan and organize activities of Transaction Office, make strategic
development plans of Transaction Office. Build, manage and ensure the
completion of business target of Transaction Office.
 Customer Relation Department:
Receive, verify, test, review, and grant loans for individual and corporate
customers. Withdraw capital and interests, dispose bad debts Do marketing for
market expansion and introduce ABBANK's products
 Fund Accounting Department:
Monitor, track time and attendance, prepare payroll, check, and issue
receipt and payment vouchers for loan application documents. Check actual
receipt and payment according to documents of accounting, balance of liquidity
and capital transfer. Be responsible for the preservation of money and gold,

pledge and mortgage of the borrowers.


6

1.4 RECENT BUSINESS RESULTS:
Due to try to achieve these objectives and better serve the needs of
customers, ABBANK has achieved significant results in years ended 2013 to 2015:
 Business Outcome:
Content
1. Interest incomes and similar

12/31/2013
16,469,654,945

12/31/2014
24,712,978,874

12/31/2015
28,412,178,352

incomes
2. Interest expenses and similar

11,330,586,068

15,924,981,988

18,212,934,841

charges
I. NET INTEREST INCOME
3. Income from service activities
4. Costs of service activities
II. NET PROFIT/LOSS FROM

5,139,068,877
1,503,314,696
346,467,002
1,156,847,694

8,787,996,886
2,917,619,152
761,970,394
2,155,648,758

10,199,243,511
3,821,990,056
1,012,970,852
2,809,019,204

73,503,850

57,925,316

276,983,168

5. Income from other activities
6. Other operating expenses

29.384134
5,672,929

367,257,468
325,746,216

601,229,508
7,272,929

VI. NET PROFIT/LOSS FROM

23,711,205

41,511,252

593,956,579

2,871,319,862
3,521,811,764

3,210,770,395
7,832,311,817

3,743,671,588
10,262,956,148

405,164,185

615,963,287

201,234,238

3,116,647,579

7,216,348,530

10,061,711,910

3,116,647,579

7,216,348,530

10,061,711,910

SERVICE ACTIVITIES
III. NET PROFIT/LOSS
FROM FOREIGN
EXCHANGE
ACTIVITIES

OTHER ACTIVITIES
VIII. OPERATING COSTS
IX. NET PROFIT FROM
BUSINESS OPERATIONS
BEFORE CREDIT LOSS
PROVISION
X. COST OF CREDIT LOSS
PROVISION
XI. TOTAL PROFIT BEFORE
TAX

XII. CORPORATE INCOME
TAX EXPENSES

XIII. PROFIT AFTER TAX

Unit: VND
Figure – 1.2: Business Outcome of ABBANK (2013-2015)

 Balance Sheet:
Content
A. ASSETS
I.
Customer

12/31/2013

12/31/2014

12/31/2015

92,858,207,694

125,542,812,657

135,447,102,261

91,985,365,996

123,996,387,533

134,378,933,558

loans
1. Customer loans


7
2. Risk provision for loans

872,841,698

1,546,425,124

1,068,168,703

from consumer
II.
Fixed assets

131,690,126

97,249,269

114,418,864

1. Tangible fixed assets
a. Historical costs of fixed

131,690,126
259,254,884

97,249,269
275,367,537

114,418,864
276,750,123

assets
b. Depreciation of fixed

-127,564,758

-178,118,268

-162,331,277

29,521,442,672

29,529,538,322

33,840,868,563

5,125,362
496,387,195

6,815,377
357,216,926

7,914,644
505,505,111

29,019,930,115
121,511,340,492

29,165,506,019
155,169,600,248

33,327,448,808
169,402,389,670

assets
III.

Other
assets

1. Receivables
2. Interests and

fees

receivable
3. Deferred tax assets
4. Other assets
TOTAL ASSETS
B. Liabilities and equity
IV. Deposits of

109,245,879,916

146,257,382,126

160,301,819,180

V.Other liabilities

956,128,356

1,078,547,196

1,252,494,423

1. Interests and fees

879,658,126

923,215,158

1,048,573,283

payable
3. Payables and other

25,698,143

26,312,496

24,733,089

liabilities

4. Other risk provision

50,772,087

129,019,542

179,155,051

sheet commitment
Total liabilities
VI. Equity and funds

110,202,008,272
11,309,332,220

147,335,929,322
7,833,670,926

161,554,313,603
7,848,067,067

1. Exchange rate

2,859,542

3,125,235

2,261,100

revaluation

3. Retained earnings/

11,306,472,678

7,830,545,691

7,845,814,967

Accumulated profit/loss
TOTAL LIABILITIES

121,511,340,492

155,169,600,248

169,402,389,670

customers

payable
2. Deferred business
income tax charge

(provision for underlying
liabilities and off-balance

differences
2. Differences upon asset

AND EQUITY

Unit: VND
Figure – 1.3: Balance Sheet of ABBANK (2013-2015)


8
Through the above-mentioned reports, it is clear that business results of
the Bank are very satisfactory with increased profits for three consecutive years.
Equity and total assets are increasingly added. Profit after tax in 2015 raised by
39.43% compared to that of 2014. Besides the other indices such as total assets
also had an annual growth, the business operations also have fairly stable
growth. Therefore, by achieving above - mentioned results, the Bank shows that
its business activities over the years have a satisfactory growth and strong
changes.


9

CHAPTER 2:
BUSINESS PRODUCTION OPERATIONS OF TRANSACTION
OFFICE
109 - TRAN DANG NINH
(An Binh Commercial Joint Stock Bank - Hanoi Branch)
2.1 GENERAL BUSINESS ACTIVITIES:
2.1.1 The Situation of Capital Mobilization:
In term of capital mobilization activities, Transaction Office No. 109 Tran
Dang Ninh is always on of the transaction with good capital mobilization of An
Binh Commercial Joint Stock Bank -Ha Noi branch.
Unit: VND million
Year

2013

2014

2015

Difference
2014/2013

Proport
Amount

capital

Amount

(%)

Target
Total
mobilized

ion

Propor
tion

2015/2014

Propo
Amount

(%)

rtion
(%)

Amount

%

Amount

%

109,246

100

146,257

100

160,302

100

37.011

33.87

14,625

10.01

15,524

14.21

26,340

18.05

34,096

21.27

10,816

69.67

7,756

29.45

87,823

80.39

110,482 75.54 114,375 71.35

22,659

25.80

3,893

3.52

5,899

5.40

3,536

59.94

2,396

25.40

resources
Demand
deposit
mobilization
Time
deposit
mobilization
Other

mobilization

9,435

6.41

11,831

7.38

Figure – 2.1: Situation in the mobilization of Tran Dang Ninh Transaction Office
(2013-2015)

The figure shows that in the past 3 years, the situation of capital
mobilization at Transaction Office has a relatively gradual growth. In 2013,
Transaction Office No. 109 Tran Dang Ninh has raised a total amount of VND
109,246 million. This amount includes 80.39% of time deposits which accounts


10
for the highest proportion in the total mobilized capital. It implies that in
Vietnam, the traditional trend is money accumulation through time deposit at the
banks. In 2014, the Transaction Office's more increasing promotion of activities
with the branch's business strategies resulted in the total capital mobilized in
2014 of VND146,257 million, an increase of 33.87% compared to that of 2013.
Mobilization through time deposits continued to be dominant in the total capital
raised (75.54%). However, there was a slight structural shift to demand deposit
mobilization. In 2015, capital mobilization activities of the Transaction Office
continued to grow which is shown by an increase of 10.01% in the total capital
resources in 2015 with VND160.302 million. Transaction Office promotes

mobilizing payment deposit resulting in a continual structural shift to demand
deposit mobilization. This form is fully suitable with the current trend with
which SBV encourages people not to use cash. Many deposit accounts are
opened for meeting the demands of payment. Therefore, demand deposits also
increased respectively.

Capital Funding

Deposit with Maturity
Funding
Deposit without Maturity
Funding

Figure – 2.2: Growth of the sources of mobilized capital (2013-2015)
The growth and development of the activity of raising capital transaction
Tran Dang Ninh - An Binh Commercial Joint Stock Bank - Hanoi Branch is a
solid basis for the transaction conducted lending operations, credit to the socioeconomic subjects in general and business customers in particular.
2.1.2 Lending situation:


11
Credit activities of AB Bank in general and Transaction Office No. 109
Tran Dang Ninh in particular is constantly innovated, finalized and improved in
both quantity and quality. From the low number of customers and residual
balances and credit quality in the first years of establishment of Transaction
Office, in 2011 the Transaction Office developed a wide range of customers in a
variety of industries and economic sectors.
2013

Year

2014
Prop

Propo
Amount
Target

rtion

2015

Amount

(%)

ortio
n

Difference
Prop

Amount

(%)

Amount

Proportion (%)

ortio
n

Amount

%

(%)

Amou
nt

%

Total
outstanding

92.858

100

125.543

100

136.360

100

32.685

35.20

10.817

8.62

91.985

99.06

123.996

98.77

134.378

98.55

32.011

34.80

10.382

8.37

873

0.94

1.547

1.23

1.982

1.45

674

77.20

435

28.12

loans
Credit
Risk provision
for loans

Unit: Million (VND)
(Source: Report on business operation results of Transaction Office No. 109 Tran
Dang Ninh)

Figure – 2.3: Lending situation of Tran Dang Ninh Transaction Office (2013-2015)
According to data in Figure – 6, the total outstanding loans have a
remarkable increase over the years 2013, 2014 and 2015.
Despite the effects of the global economic crisis and the European public

debt crisis in 2008 and 2010, all leaders and staff members of the Bank worked
constantly with progressive development to keep up the flow of the economy. In
spite of many disadvantages in business activities in these years, thanks to its
prestige and good quality services, Tran Dang Ninh Transaction Office has a
total outstanding loans of VND 125,543,000 in 2014 with an increase of 35.20%
compared with that in 2013 (VND 92,858,000). In 2011, the Branch continued to
achieve growth in lending activities with a slight decrease. Compared with the
year 2011, the outstanding loans of Transaction Office reached an increase of
8.62% corresponding to the amount of VND 10.817 million. A total outstanding
loan in 2011 is VND 136.360 million.


12
Figure – 2.4: Growth rate of outstanding loans (2013-2015)
Data on risk provision for loans of Transaction Office No. 109 Tran Dang
Lending

Ninh also reflects clearly the economic situation with high credit risk provision.
Loss
Provision
Particularly, in 2013, credit risk provision was VND 873 million corresponding
Lending

to a proportion of 0.94% of the total outstanding loans. In 2014, credit risk
provision was VND 1,547 million accounting for 1.23% and increasing by 77.20
% compared to that of 2013. In 2015, risk provision was VND 1.982 million
accounting for 1.45% of the total outstanding loans and creasing 28.12%
compared to that of 2014.
Overall the Transaction Office achieved a relatively stable growth in
outstanding loans in the economy of many changes of the past years

2.1.3 Other Business Activities:
Today, activities of commercial banks achieve a far more significant
development compared to traditional activities. The application of modern
technology and scientific achievements along with the development of a diverse
variety of services has met the demands of the flexible and dynamic market
economy.
 About payment service activities: Payment activities of the Bank were
developed from domestic payments only in the early years after its establishment
to international payment through banks in other countries. From the end of 2004,
An Binh Bank made international payment directly using the Society for the
Worldwide Interbank Financial Telecommunication (SWIFT) which helps the
customer's payments of export and import become more rapid more convenient.
Payment for import and export and money transfers is convenient, fast, and
timely and complies with international practices. Furthermore, it enhances AB
Bank's credibility in payment on the international market. In term of Tran Dang
Ninh Transaction Office, due to restrictions on its scale, its current income from


13
this activity is still low, accounting for only a small proportion in its total
income. In detail, payment service fees are VND 93.48 million, VND 207.48
million VND and VND 312.54 million in 2013, 2014 and 2015 respectively. The
proportion of payment service fees is approximately 3% of its total income.
 About guarantee operations: Guarantee operations of AB Bank in
general and Transaction Office No. 109 Tran Dang Ninh in particular are highly
effective with good quality of services. Revenue of the Bank's from guarantee
operations achieves a continuous growth. The total value of guarantees is VND
972 million; VND 1.458 million and VND 2.126 million in 2013, 2014 and 2015
respectively. The forms of guarantee provided by the Bank include bid security,

product quality guarantee, payment guarantee, etc. The Bank's guarantees
operations are very effective with no need to pay debt instead of the customer with
bank guarantee. Revenues from guarantee operations contributed a significant
proportion to the operation results of Tran Dang Ninh Transaction Office.

2.2 LENDING OPERATIONS FOR CORPORATE CUSTOMERS
2.2.1. Some regulation on the implementation of lending operations for
corporate customers at ABBANK
a. Lending objects:
The borrowers at ABBANK are Vietnam and foreign enterprises with the
demands for getting loans and repayment capacity to implement investment
projects, production and business plans and services domestically and abroad.
Where the borrowers get loans for investment projects, production and business
plans and services domestically and abroad and comply with regulations of the
State Bank of Vietnam and of the bank.
b. Lending regulations
Customers using lending capital from ABBANK must ensure:
• The right use of loan purposes agreed in the credit contract


14
• Debt repayment for principal and interests of loans on time as agreed
in credit contract
c. Loan conditions:
ABBANK shall review and decide loans when customers meet the
following conditions:
•

Have civil legal capacity, legal capacity for civil acts and bear civil liability

in accordance with the law.
•

Legal purposes of using loans

•

Have financial capacity to ensure repayment in the committed term

•

Have feasible and effective investment projects, production and business and

services and in accordance with the provisions of the law
•

Implement the regulations on loan guarantees under the Government's

regulations and instructions of the State Bank of Vietnam and ABBANK.
d. Provisions on the repayment of principal and interest of loans
•

ABBANK decides the repayment of principal and interest of loans as
follows:


Repayment term of principal



Repayment term of loan interest along with principal in specific terms



The currency of repayment and the conservation of the principal value
shall use appropriate forms in accordance with the provisions of the law

•

For loans fail to repay in accordance with their terms and evaluated to have

no capacity of timely repayment and not approved for restructuring the
repayment term by ABBANK, the original balance of the credit contract shall
deemed to be overdue and ABBANK shall implement necessary measures for
debt recovery and fine for delay in payment and for overdue debt and interest of
loans as agreed by the two parties based on the provisions of the law. ABBANK
shall classify the entire original balance of the borrowers with overdue
outstanding loans and appropriate lending accounts as prescribed by the State
Bank of Vietnam


15
• ABBANK and the customers can negotiate on the conditions, the amount of
loan interest, fees to be charged in case of repayment before maturity
• Debt repayment in foreign currency: Loans in foreign currency shall be
repaid principal and interest in that foreign currency which. In case of repayment
in another foreign currency or in Vietnam dong, the implementation shall
comply with the agreement between the customers and the ABBANK and
regulations on Foreign Exchange Management of the Government and the
direction of the State Bank of Vietnam

e. Lending interest rates, overdue interest rate and interest rate reduction and
exemption:
•

Interest rates for loans shall be agreed by ABBANK and the customers in

consistent with the regulations of the State Bank of Vietnam
•

Interest rates applied to the overdue principal shall be determined by

ABBANK after reaching an agreement with customers in the credit contract but
not to exceed 150% of the loan interest rates applied in the loan term signed or
adjusted in the credit contract
•

Interest rate reduction and exemption: ABBANK decide interest exemption

or reduction to the customer in accordance with the following principles:
 The customers with losses on their properties leading to financial burdens
 The level of interest rate reduction and exemption shall be consistent with
ABBANK's financial capacity
 Interest rate reduction and exemption shall be implemented under
ABBANK's regulations on interest rate reduction and exemption for
customers

f. Loan term:
ABBANK and customer shall reach an agreement based on production
and business cycle, the term for capital recovery of investment projects,
repayment ability of customers and sources of loan capital. For Vietnam and

foreign institutions, the loan term shall not exceed the remaining operation
period under establishment decision or operation license in Vietnam.


16
g. Loan categories:
ABBANK shall consider and determine granting loans to the borrowers
under different categories including short term, medium term and long term
loans in order to meet the capital demands for production, business, services,
investment and development.
• Short term loans shall have a term less than 12 months
• Medium-term loans shall have a loan term loan from over 12 months to 60
months
• Long term loans shall have a loan term loan from over 60 months or more.
h. Loan inspection and supervision:
ABBANK shall take responsibility and have the right to inspect and
supervise the processes of lending, using loans and repayment of customers
ABBANK shall inspect and supervise lending capitals and manage debt
recovery according to the current process of ABBANK for supervision of the
customer's lending, using loans and repayment processes in accordance with
operation characteristics of ABBANK and the nature of the loans, in order to
ensure effective and full recovery capabilities of the principal and interest
2.2.2 Credit process in An Binh Commercial Joint Stock Bank:
Approach to
customers/

1

Credit evaluation

2

Credit decision/
approval

prepare credit

proposal records
3
Bad debt
management

5

Credit supervision and
liquidation

4

Credit and banking
procedures

customers/ prepare
credit proposal
Figure – 2.5: Credit process in An Binh Commercial Joint Stock Bank
 Step 1: Approach to customers/ prepare credit proposal records
a. Objects for implementation: Customer relation officials/ supporting officials
(if any)

17
b. Contents: Customer relation officials/ supporting officials receive records and
loan demands of customers; provide required credit proposal records in
accordance with regulations
 Step 2: Credit evaluation
a.

Objects for implementation: Customer relation officials/ credit officials/

approval officials
b. Content:
After approaching customers and collection necessary information, Customer
relation officials/ credit officials/ approval officials shall evaluate/reevaluate the
following contents:
•

Legal status

•

Business and financial capability of the customers

•

Business plan/project, the purpose of using loans and the repayment ability

of customers
•

Own capital, other lending capital included in business and production plans

of customers
• Collateral for loans
• Risk issues may arise
The credit evaluation of customer relation officials must be implemented
with evaluation reports
After the completion of evaluation reports, customer relation officials
shall submit evaluation reports and full credit proposal records to Head of
Transaction Office/Customer Relation to control the contents of credit
evaluation
In case of refusal to grant credit, customer relation officials shall submit
credit refusal reports clarifying refusal reasons to leader of relevant divisions for
consideration
 Step 3: Credit decision/ approval
Head/Deputy Head of Transaction Office/Customer Relation shall control
the contents of credit evaluation provided by customer relation officials
In case, credit proposal records are beyond approval authority of
Head/Deputy Head of Transaction Office/Customer Relation, after reaching
agreed opinion from Head/Deputy Head of Transaction Office/Customer


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Relation, customer relation officials shall continue submit records to Credit
Division, higher authorities after the Head of Transaction Office/Customer
Relation have controlled such records.
The approving authorities shall takes steps in credit approval as
authorized by Chief Executive Officer/Board of Directors of ABBANK in each
period
In case of refusal to grant credit, customer relation officials shall prepare
notice of refusal and send to customers
File records submitted for credit granting

 Step 4: Credit and disbursement procedures

a. Objects for implementation: Credit Management Officials Customer relation
officials shall support Credit Management Officials in finalizing credit records
in accordance with regulations on approving and granting credit of ABBANK
b. Contents:
Comply with ABBANK's regulations on disbursement in each period.
In case of refusal to grant credit: business unit shall prepare notice of refusal and
send to customers
 Step 5: Credit supervision and liquidation credit, bad debt management

After disbursement, customer relation officials must regularly supervise
credit granting, check the use of lending capital, urge and request customers to
implement in accordance with conditions after disbursements as approved (if
applicable).
Perform periodic evaluation of credit granting; timely detect signals that
can possibly lead to risks in repayment of customers for timely processing
Credit management officials shall coordinate with customer relation
officials in supervising the implementation of the conditions on approval and
supplement of documents, records, debt notification to customers.
2.2.3 The situation and performance of lending operations for corporate
customers at Tran Dang Ninh Transaction Office:
2.2.3.1. The situation of lending operations for corporate customers:
a. Growth rate of loans for corporate customers
Unit: Million (VND)
Year

2013

2014

2015


19
Difference
Amount

Amount

Target
Volume of loans for
corporate customers
Debt recovery volume
from corporate
customers

Difference

compared with
2013
Amount

%

Amount

compared with
2014
Amount

%

158.703

211.250

52.547

33.11

240.571

29.321

13.88

72.917

98.682

25.765

35.34

112.398

13.716

13.90

85.786

112.568

26.782

31.22

128.173

15.605

13.86

loan sales
Closing outstanding
balance of loans for
corporate customers

Figure – 2.6: Volume, sales, debt recovery volume, closing outstanding balance of

loans for corporate customers at Tran Dang Ninh Transaction Office (2013-2015)
The data shows that there is a high but uneven growth through the years
in lending operations for corporate customers at Tran Dang Ninh Transaction
Office. As presented above, the Transaction Office was founded in early 2007.
Over 6 years of operation, in 2013, there are many familiar customers most of
which are corporate customers and Volume of loans for corporate customers is
VND158.703 million. By the end of 2013, debt recovery volume from corporate
customers is VND 72.917 million and outstanding consumer loans at the end of

2013 are VND 85.786 million.
In 2014, the Transaction Office has a significant growth in lending
operations for corporate customers. Volume of loans for corporate customers
reached VND 211.250 million, increased by 33.11% (respectively to VND
52.547 million) compared with 2009. This shows the fact that, over three years
of operation, Tran Dang Ninh Transaction Office has obtained the trust of
enterprises resulting in a increase in the volume of enterprises requesting for
loans. Debt recovery volume also increased from VND 98.682 million up to
VND 72.917 million, an increase of 25.765% compared with 35.34% in 2013.
This is because of Vietnam's economic recovery after the global financial crisis.
Enterprises get more loans for business, production, investment, construction,
etc. leading to an increase of 31.22% in outstanding loans at the end of 2014
corresponding to VND 112.568 million


20

Outstanding loans

Debt recovery volume from

Volume of loans for
corporate

from corporate customers

corporate customers

customers

Figure – 2.7 Growth in lending operations for corporate customers at Tran
Dang Ninh Transaction Office (2013-2015)
The figure shows the growth in lending operations for corporate
customers at Tran Dang Ninh Transaction Office in the past time. In 2011,
volume of loans for corporate customers reached VND 240.571 million. There
was an increase in the number but not as strong as that in 2014 (an increase of
13.88% compared with 2014). Similarly, there was also a slight increase of 13%
in debt recovery volume and outstanding loans at the end of 2011. Debt recovery
volume from corporate customers is VND112.398 million meanwhile
outstanding loan for corporate customers is VND 128.173 million. Results also
shows that in 2015, despite its GDP growth rate of 6.8% per year, Vietnam had
such a great inflation rate of 18.58% and lending interest the Bank also raised up
to about 19-21% per year. Enterprises faced many difficulties in production and
business forcing them into bare-minimum operating conditions and reduced
business activities of the Bank.
b. Outstanding loans by loan terms:
Year

2013

2014
Propor

Target

Amount

tion

Amount

(%)

2015
Proport
ion (%)

Difference
Propor

Amount

tion
(%)

Amount
Amount

Proportion (%)
%

Amount

%

Total
outstanding
loans for

85.786

100

112.568

100

85.786

100

112.568

100

85.786

100

74.633

87.00

100.681

89.44

74.633

87.00

100.681

89.44

74.633

87.00

corporate
customers
Short term


21
loans for
corporate
customers
Medium term
and long term
loans for

11.153

13.00

11,887

10.56

11.153

13.00

11,887

10.56

11.153

corporate
customers

Unit: Million (VND)

Figure – 2.8: Outstanding loans for corporate customers by loan terms at Tran
Dang Ninh Transaction Office (2013-2015)
The table shows that, short term loans for corporate customers account for
the largest proportion in the total structure of outstanding loans for corporate
customers at Tran Dang Ninh Transaction Office
In 2013, short term loans for corporate customers account for 87.00% of
the total outstanding loans for corporate customers equivalent to VND 74.633
million, while short-term consumer loans account for only VND 11.153 million
(13.00%).
In 2014, increase by VND 26.048 million with an increase of 34.90%
compared with that in 2014. Medium term and long term loans for corporate
customers has slower growth rate with an increase of 6.58 percent compared
with that in 2013. This leads to a change in the proportion in the total
outstanding loans for corporate customers in 2014. The proportion of short term
loans for corporate customers was 89.44% while that for medium term and long

term outstanding loans for corporate customers was 10.56%. There was a slight
shift in structure of loans for corporate customers.

13.00