Xây dựng và phát triển chiến lược kinh doanh bán lẻ tại ngân hàng BIDV giai đoạn 2015 2020

LUẬN VĂN THẠC SĨ
Xây dựng và phát triển chiến lược kinh doanh bán lẻ tại ngân hàng BIDV giai
đoạn 2015-2020
THESIS MBA
BUILDING A STRATEGY FOR DEVELOPMENT OF RETAIL BANKING
BUSINESS AT BIDV PERIOD 2015 TO 2020

1


INTRODUCTION
Providing personal financial services or retail banking (RB) business is one of the
traditional activities to form the world commercial banking system. Since its formation
until now, RB has played an important role to create sustainable development for
commercial banks. RB is less affected by economic cycles. It scatters risks and
contributes to create capital and stable income for the banks. In addition, the retail
banking’s actvities play an important role for expanding the market, increasing the
competitive capabilities and stability of the bank’s performance.
This role has been shown clearly in the recent world economic crisis. Almost all
commercial banks which had strategy focusing on RB have survived while the big
investment banks were bankrupted such as: Merrill Lynch, Lemon Brothers... or felt
into difficulties and also shifted to the RB field. Therefore, the trend today of
commercial banks in the world is development of RB.
In Vietnam, stable politial and social enviroment, growing economy, large
population, living standard is more and more improved, the consumer trend and
service usage are more and more increasing, the development of the personal
financial services is still low… which all make the retail banking market be
considered as having great potential and opportunities for development for domestic
and foreign commercial banks.
With the process of economic integration to the world, banks in Vietnam now is
facing the RB development requirements to meet the demand, being under

competitive pressure not only of the domestic banks, but also of foreign banks
operating in the country.
Besides tradition, experience and strengths in corporate banking, the RB business
of BDIV is until now mostly spontaneous, without strategic plan. Under the
intensifying pressure of competition and international integration, BIDV needs to
have a strategy for development of RB, making this activity become one of the core
activities of the bank in order to help the bank keep its competitive capability and
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sustainable development. Because of these reason, we chose the topic "BUILDING
A STRATEGY FOR DEVELOPMENT OF RETAIL BANKING BUSINESS
AT BIDV PERIOD 2015 TO 2020". This is a highly practical topic, contributing to
meet the needs of business and development of BIDV in the future. Besides
significant importance for the bank, studying this topic will also help the team
members to apply the learned knowledge into real business, thus enriching and to
improving knowledge about business administration in career development.
Research purpose:
-

To review the scientific approach to building strategies of a business in general and
in banking field.

-

To investigate the current situation of RB at BIDV, identifying strengths,
weaknesses, opportunities and challenges.

-

To build an appropriate strategy for the bank in period 2010-2015

-

To propose implementation of the chosen strategy to achieve the objectives of BIDV

Research Methodology:
-

Studying theoretical basis for building of strategies for the general business,
bank and RB

-

Investigation, practical survey in the Head office and some branches of BIDV. Data
about the activities of the business is gathered from the bank internal reports.

-

Internal and external analysis

-

Analysis of the data and building strategies, using some tools as BCG, SWOT
Matrix and the theory of the 5 competitive forces by Michael E. Porter.

Structure of the article:
Chapter 1: Theoretical basis about strategic management in general business,
banking and the retail banking field.
Chapter 2: Analysis the current situation of retail banking business at BIDV

Chapter 3: Proposing strategies for development of retail banking business at
BIDV period 2010 - 2015, the solutions, recommendations and conclusions.
3


CHAPTER I

THEORETICAL BASIS OF STRATEGIC MANAGEMENT IN GENERAL BUSINESS,
BANKING AND RETAIL BANKING FIELD
1.1. BASIC ISSUES OF BUSINESS STRATEGY
1.1.1. The concept of business strategy
There are many different definitions about business strategy, each definition is more
or less depending on the viewpoints of each author [3, 4, 6, 11].
Alain Threlart said: "Strategy is the art that businesses use to compete and gains
victories"
According to M. Porter: "Strategy is the art of building the competitive advantages
for defensing".
According to the united point of view : "Business strategy is the art of coordinating
activities and controls them in order to achieve long-term goals of the business".
In 1980, Quinn gave a more general definition: "Strategy is a pattern or plan to
integrate the major objectives, policies and action sequences into a closely
cohensive entity"
Mintzberg defined the general strategy with 5P:
Plan: The sequence of actions intended consistently.
Pattern: The time consistent behavior, intended or not.
Position: The match between the organization and its environment.
Perspective: the way for perception of the world.
Ploy: The concrete way to defeat the competitor.
By Charles W.L.Hill and Gareth R. Jones: "Business strategy is a process of
identifying the basic and long - term goals of business, choosing the way or action

method and allocation of resources to achieve the goals".
4


According to Fred R. David [4], "Business strategy is the means to achieve longterm goals”.
By William J.Glueck, "Business strategy is a plan with united, comprehensive and
cooperative features which is designed to ensure that the basic goals of the business
will be achieved”.
From the mentioned above definitions, we can generally define business strategy as
the following:
"Business strategy is a general long-term plan or a general action program in order
to exploit the resources to achieve the objectives of the company, ensuring
conformity with the change of environment".
With the birth of the concept of business strategy, the concept of strategic
management in business has also been introduced.
By Fred R. David: "Strategic management can be defined as an art and science for
establishment, implementation and evaluation of decisions related to many functions
allows an organization to achieve its objectives".
By John Pearce II and Richard B. Robinson: "Strategic management is a system of
decisions and actions to form and perform plans to achieve the objectives of the
company.
Therefore, strategic management, like any other management process, consists of
planning, organizing the implementation and supervise the implementation.
Object of management here is the impact of the environment (the uncertainties,
and opportunities) and the way businesses respond to the impact of the
environment (by the efforts of all units of the business). In other words, strategic
management includes synthezising of planning activities, organization for
implementation and check, adjustment business strategies to ensure that
company always seizes the opportunities and limits or avoids the threats, the risk
in the way to achieve its goals.

5


Development of
strategic
vision and
mission

Correction
if
necessary

Establishment of
objectives

Correction
if
necessary

Building of
the
strategies
to achieve
the
objectives

Implement
ation and
direction of
the

sellected
strategies

Improvement/
change
If necessary

Improvement/
change
If necessary

Evaluation
implementation
monitoring,
correction
adjustment

Recover
1,2,3,4
If necessary

Figure 1.1: Strategic management
Strategic management is the process of studying the present and future
environment, defining the objectives of the organization; decision making,
performing and supervising the implementation of the decisions to achieve those
objectives in current or future environment to enhance competitive capabilities and
position of the enterprise.
Strategic management consists of 5 tasks with close relationship and mutual impact
as shown in figure 1.1 [6].
- Creation of a strategic vision: Description of the future image of the company,

showing clearly the goal a company wants to achieve.
- Formulation of the goals: Conversion of the strategic vision into the specific
results of performance which the company must achieve.
- Building a strategy to achieve the desired goals
- Implementation and direction the selected strategies effectively and efficiently.
- Evaluattion the implementation and adjustment of the strategic vision, long-term
objectives, strategies, experiences and opportunities.
6


1.1.2. The benefits and the role of strategic management
Strategic management helps companies to seize and take advantage of business
opportunities and simultaneously to take measures to overcome the risks and
threats, to contribute to enhance the efficiency of using resources, to increase
competitive capabilities of enterprises for ensuring sustainable development.
Strategic management creates the solid bases for setting out the policies and
decisions on production and business activities in accordance to the fluctuation of
the market. On the competition aspects, the core capabilities which make the
difference and create certain advantages should be used. Such capabilities consist of
the knowledge, skills, technologies and special resources for an organization to
differentiate itself from the competitors and create competitive advantages.
Strategic management process helps companies to see clearly their purpose and
direction. Awareness of desired results and future goals will help leaders and
employees to realize what to do to achieve success.
Environmental conditions that organizations face are fast-changing and can create
surprises. Management strategies help managers to see the environment in the future,
so they can control it better and utilize the opportunities and avoid or reduce the risks.
Strategic management helps managers to use effectively the available resources of
the company and allocate them rationally. It helps companies to make decisions in
accordance to environmental conditions. In addition, strategic management engages

managers at all levels in the organization and creates resonance to achieve common
goals of the company.
1.2. STRATEGIC MANAGEMENT IN BANKING
1.2.1. The Concepts of Bank and Retail Banking
1.2.1.1. The concept of bank:
According to the functions (services and roles) the bank performs in the economy,
the bank is considered as a financial intermediate organization that accepts deposits,
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gives credits and performs business acivities with currencies and banking services.
The most common activities are accepting deposits, using that money to give credit,
providing payment services.
The main characteristics of banking activity:
•

The bank mobilizes the idle capital of organizations and population, using that
money for lending (so using not-own money to give credit) to other organization
or people, thus creating both subjective and objective risk. This is a sensitive area,
relating directly to all sectors and all aspects of social economic life.

•

Financial asset: highly profitable but it is influenced by factors as interest
rate, inflation.... so banks face many risks.

•

Providing other services to the economy: The large scale of a bank can
create good relationship between the bank and its customers

•

Risk for banks is the relationship between banks and customers.

•

Bank’s goods are money. Compared to conventional goods, money value is
fluctuating quickly by influence of inflation, exchange rates, interest rate.
Money is considered as special good which a state uses to manage the
macroeconomics. Money could influece development or degradation the
economy of a country, therefore it is controlled strictly by the government.

1.2.1.2. The concept of retail banking service:
According to WTO, retail banking is a typical type of banking service. Retail bank
is a place where individual customers can come to carry out such activities as
making deposit, loan, payment, checking accounts and card services. For
commercial banks, retail banking services play an important role to enhance
competitive capability and expand market share, to bring stable revenues and
contribute to create the quality of the banking busisness. In addition, it creates
opportunities to diversify non-banking products and services, cross-selling
opportunities for individuals and small businesses.
8


According to economic experts of Asian Techonology Institute, retail banking are
services providing products -services to individuals, households, small and medium
businesses through a network of branches. Customers can also have direct access to
banking products and services through telecommunication and information technology.
Thus, in general, the retail banking is services providing financial products and services

to customers who are individuals, households, small and medium enterprises.
1.2.1.3. Characteristics of retail banking services:
Object customers of the retail banking services are extremely large but the value of
each transaction is not high. Retail banking products are both debit assets and curent
assets (saving assets, current accounts, bill payment, debit and credit cards, consumer
loans,...) The development of retail banking services depends on the information
technology level of the economics in general and the bank in particular. In addition,
one of the success factors of the retail banking service is distribution channels.
1.2.1.4. The role of retail banking services:
- For the economy: The retail banking services directly change a cash economy into a
non-cash economy, raising the efficiency of state management, reducing social cost in
payment and exchange in cash. In addition, through retail banking services, the process
of currency flow is strengthening and more effective, the capital potentials are utilized
and exploited better to promote business, production and consumption, improving the
lives of people. Banking services are connected closely to the social life. Therefore,
enhancing of the capital flow and stability of the financial system they contribute to
ensure the effectiveness of the state’s macro- management of the economy.
- For bank: RB diversifies products and provides a stable source of revenue for
banks, create a foundation for sustainable development for commercial banks. The
retail banking operations contribute to create stable capital and income for the
banks, scatter the risk and are less affected by economic cycles. In addition, the
retail banking operations contribute importantly to expanding market, improve
competitive capability and operation stability of the bank.
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- For customers: RB provides a variety of products, convenience, safety, saves costs
and time for customers.
1.2.2. The role of strategic management in banking
To be able to exist and develop, a bank must have right business orientation.

Strategic management helps banks to get right business orientation in the short,
medium and long terms. Strategic management helps banks to adapt to the changing
business environment, highly risky and sensitive field of business. Strategic
management also helps the bank to improve management ability, development in
the business environment in order to take the opportunities and cope with
challenges, to exploit and use resources in a bank rationally and efficiently.
Resources of the bank consist of human resources, organization and facilities,
techniques... In the banking activities, building and implementation a strategy are
extremly important. Management of the bank directly impacts the bank
performance and even the value of that bank in the market. In the macro level,
banking management affects risk-taking capacity of banks and is a measure for the
adaptable ability of banks to pressure of the economy.
In the global trend and international integration, requirement of strategic
management will be more intensified for the domestic banks. It is not only for
resistance of competition but also for the stable interaction of the inter-bank market.
A bank with weaknesses in management will not only cause losses to the bank, but
also creates certain risks with chain character for other banks, affecting the
economy and impacting on effectiveness of the state’s macro-regulatory policies.
So the strategic management in banking is very important, especially the stage of
objectives definition, selection of the most appropriate plan, ensure both compliance
to the macro monetary policy and profitability, lowering the risk level.
There are strong relationship between a bank’s strategic management and its
performance [9, 18 , 21, 24, 27], as top bank performers usually has best strategies,
developed for years [25].
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1.2.3. Strategies and trend in retail banking business
There has been documented the relation between customers’ satisfaction and
performance of retail banking [12, 22, 24, 26]. Most banks in retail banking

business now are focusing their strategies in improvement of customer relationship
management (CRM) [12]. In the era of internet and information technology (IT),
retail banking services via IT have become more and more important [10, 17]. With
development of the e-banking, the CRM has become more complicated since
personal contacts between banks and customer are diminishing or vanishing, so
specific strategies may be required [19]. The other strategies for retail banking
development are expansion or consolidation of bank branches [8], market niche
entry planning [13], improvement of risk management [14]…
Looking at the future next decade, Kimberly Hedley and colleagues from IBM
Institute for Business Value indentified 2 megatrends in retail banking: (1)
Customers redefine the rules of the game as their power is increasing, and (2)
universal banks and ultra-focused niche players thrive as competition is intensifying
[16]. The same authors also proposed four strategic imperatives banks must follow
to cultivate innovation and position themselves for sustainable growth:
(1). Focus on core strengths and partner for everything else - Leading banks will
optimize their performance by becoming specialized enterprises, managing only
strategic, differentiating business components internally and partnering with best-inclass specialists for those capabilities that do not drive competitive advantage.
(2). Optimize the potential of each customer relationship - Rather than attempting to be
all things to all people, industry leaders will use superior customer insights to offer the
most appropriate and profitable products, tools and services to targeted segments.
(3). Harness the potential of the workforce through effective performance
management - Banks will need to realign skills and set the right performance metrics
to motivate a changing workforce to continuously pursue innovation.
(4). Recognize that technology will be a critical element of success - By making
technology a central component of the strategic decision making process, banks will be
able to tightly align their business and technology initiatives, and will be able to
differentiate their offerings and seize market opportunities with greater agility.

11

1.3. THE PROCESS OF STRATEGIC BUSINESS MANAGERMENT
Strategic Management helps banks to identify clearly goals and business
orientation, to increase initiativeness and adaptability, to capture the opportunities
and cope with the future challenges. Strategic management process consits of six
basic steps (figure 1.2)
Analysis of
internal
business
environmen
t

Strength
weakness

Defining
objectives

Idendification of
objective
Analysis of
external
business
environment

Building
of
business
strategy

Implementation
business
strategy

Check and
adjust men
business
strategy

Opportunities / threats,
challenges

Building Plan
Organize and
perform

Check and
adjust

Figure 1.2: Basic steps of strategic management
Bank's business strategy is very important. When the bank formulates a business
strategy, this strategy will be pursued in the whole implementation process. A
wrong business strategy will affect long-term development of the bank. Therefore,
to identify their goals, the bank needs to answer the following questions:
1. Customer: Who are the customers of the bank? Who will be the target
customer?
2. Products or services: What are the bank’s main products and services?
3. Market: In what market does the bank focuse on competition?
4. Technology: Investment in technology and development potential?
5. Attention to the existence, growth and profits: Has the bank committed to

achieve growth and financial stability?
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6. Business Philosophy: What are basic beliefs, recognized core values, desires
and priorities of the business ethics of the bank?
7. Self-Assessment: What are competitive advantage and core capabilities of
the bank?
8. Attention to the image in the public: How does the bank meet the
requirements on environmental and social issues?
9. Attention to the staff: How does the bank recognize and assess its human
resources?
From the mission and vision, leaders at all levels will determine the bank’s strategic
objectives. Strategic objectives present the specific results which the bank wants to
achieve in a certain period. The identification of objective strategy is namely the
conversion the mission into specific tasks, giving direction to management
decisions and establishment of criteria for evaluating the work results. Goals can be
separated into two groups: financial and strategic objectives. The financial
objectives aim to improving financial results, and the strategic ones – to improve
the competitive position of the company in the industry. In the process of
implementing strategies to achieve long-term goals, business can split those goals
into many short-term goals, relating to each short period.
1.4. CONTENT STRATEGY BUSINESS MANAGEMENT
1.4.1. Defining of objectives
1.4.1.1. The concept: Objectives are the destination or the results that the bank
wishes to achieve in an operating period.
Objectives are usually referred in general as all short and long term goals. In other
words, objectives may be in the short and long term. The goal is often considered as
a guideline for the bank. In a operating period, a bank may have not one but many
objectives, all of them are directed to the long-term goal: profit.

13


1.4.1.2. The base for determining objectives:
- Functions, tasks and activities of each bank.
- Guideline and policies of the government
- Mission or business principles and purposes of the bank, or in other words, the
leaders and managers’ point of view.
- Business Environment.
- The resources of the bank
- Geographical location, natural conditions, customs, cultures, consumption habits
of the locals where the bank is headquartered.
1.4.1.3. Requirements of the objectives:
- Quantitative: Objectives must be quantifiable. The quantifiability or measurability
helps the bank to check whether its objectives are achieved or not.
- Feasibility: The objectives are feasible or could be reached. If you set goals too
high, you will not achieve them, thus discontenting managers, employees,
customers. In the opposite case, they would waste resources.
- Specification: The objectives of the bank must clearly identify the limits which
should be reached, the time necessary to complete the goals. Large objectives
should be specified or splited into more small targets which are easier to be
achieved. For example, building the objective of expanding market share needs to
determine rate of expansion for each market, the needed time to achieve...
- Legitimacy: The goals that the buiding bank must conform to the law.
- Consistency: The objectives of the bank in each period should not obstruct or
conflict with each other. Conflicting objectives can never be achieved, thus
making the process of setting goals meaningless.
1.4.2. Environmental Analysis
To build business strategies, the study of the environmental factors is very
important. It can help companies to recognize the opportunities, to see the risks and

14


challenges that a company may face so managers can build strategies in order to
take advantage of opportunities and minimize risks. Environmental are the factors,
forces influencing activities and performance of the business. Business environment
include in the macro environment, micro-environment (industry) and conditions
within the enterprise.
1.4.3. Buiding business strategy
1.4.3.1. Proposing business strategy:
There are three levels of strategy according to the equivalent levels of management:
- Overall Strategy (corporate level):
To answer 2 key questions: what business activities to be carried out and how the
firm (corporate) manages these acivities. The strategy of firm level chooses and
manages a group of different business activities in some industries and marketproducts.
- Strategy for a business unit level:
This is a set of commitment and acitivities a firm uses to gain competitive
advantages by using its key success factors in a particular market with particular
product (s). According to Abell, to buid a strategy in business unit level, three
factors must be defined: (1) customers’ needs (what to be satisfied); (2) customer
groups (who to be satisfied); (3) how to be satisified.
There are three basic approaches to build up competitive advantages: (1) stratedy of
cost leader; (2) strategy of differentiation; (3) strategy of focus (or segmentation). In
practice, not rarely the mixed approaches are used instead of purely one.
- Strategy of functional level:
Strategy of functional level support strategy of business unit and the general level
to help achieve the firm’s common goal. Functional level strategies aime to

15

improve efficiency of the basic activities inside the firm as production, marketing,
R&D, human resource…[6].
1.4.3.2. Analysis and selection of business strategies:
The combination of management opportunities, risks, strengths, weaknesses identified
in the analysis of business environment and internal company with the goal that
companies need reach to make the choices suitable strategies.
a. SWOT model:
SWOT is an abbreviation of Strength, Weakness, Opportunities, Threat. SWOT
matrix is used to list all opportunities, risks from external environment, and
strengths and weaknesses from internal environment for a company, in an
appropriate order and placement. To build SWOT matrix, firstly managers have
to conduct screening process, identifying the real opportunities and threats as
well as the main strengths and weaknesses of the enterprise.
SWOT matrix of the bank is very complex. There is no formula to make decision.
Difficulty of using the model is in combination of matrix elements and there is no
certain method to select optimal pair of factors.
b. BCG model:
This model was proposed by Boston Consulting Group. The model is fixed by
two factors, the vertical axis: evaluation of the industry growth rate; horizontal

high

Question
1

low

Developing rate

axis: relative market share of a company compared to the whole industry.

?

Star
2

Dog
3

Cow
4

16
low
high
Market share


Figure 1.3: Boston consulting group (BCG) model
Bank analyzes market share compared to the competitors as well as industry
growth rate to determine the bank’s position.
1.4.4. Implementing business strategy
1.4.4.1. Setting annual objectives:
Annual objectives are part of the identified overal goal. It is considered the results
that a bank wants to achieve in its business each year and help the bank achieve the
defined overall objectives. The meaning of the annual objectives could be expressed
in three aspects:
- Annual objectives are the basis for managers to confide tasks to individuals and
each department in the bank.

- They are the basis for checking, monitoring the implementation process.
- They are the basis for the allocation of resources in each department.
1.4.4.2. Building policies and action plans:
Policies and action plans are short-term plans, concretizing the contents of business
strategies to help administrators identify the tasks, tactics that banks must perform
in each year. The policies clearly defined principles, rules that the functional
departments must comply with in the working process. These policies are regularly
updated, modified to suit the changes of the business environment.
1.4.4.3. Allocation of resources:
Managers have to allocate resources rationally. The bank has many methods to
ensure the effectiveness of the process of allocating resources. The bank should
allocate the resources according to the importance of a task. In this process it must
ensure economy, optimal use of the resources, focus on main resources.

17


1.5. CHECKING AND ADJUSTMENT OF BUSINESS STRATEGIES
This process helps administrators to identifie timely the changes and errors in the
process of building and implementation of the business strategy, to find the causes
and to adjust promptly the strategy, helping the bank to achieve the established
objectives...

Big changes in
external
environment

Check and
evaluation
actions

quality

Big changes in
internal
environment

Impleme
ntation of
present
business
strategy

Adjustment
business
strategy

Re-defining
object-tives

Figure 1.4: Checking and adjusting strategies

SUMMARY
XĐ lại các

Strategic management is a very dynamic and uninterrupted process. Each change in
hỗ trợ
a major component of the model can lead to change one or all other CLKD
components.

Therefore, the activities of formulation, implementation and evaluation of the

strategy should be performed continuously.
To operate effectively, managers have to solve not only internal issues, but also the
factors from the external environment affecting the busisness. In banking business,
this is an important issue to decide the success of the enterprise in the market.
Therefore, managers should concentrate on studying and predicting the variation of
18


environmental factors, the competitive ability, to draw out the best banking
development strategy to achieve the goal of profit and complete their mission.

19


CHAPTER II

ANALYSIS OF THE ACTUAL SITUATION OF RETAIL BANKING BUSINESS AT BIDV
2.1. OVERVIEW ABOUT BIDV OR BANK FOR INVESTMENT AND
DEVELOPMENT OF VIETNAM
2.1.1. General Introduction
Name:

Ngân hàng Đầu tư và Phát Triển Việt Nam

International trade name:

Bank for Investment and Development of Vietnam

Abbreviation:

BIDV

Head office:

194 Tran Quang Khai, Hoan Kiem, Hanoi.

Charter capital:

10.500 billions VND (on 31 December, 2009)

Established on 26 April, 1957 by Decision No. 177/TTG of the Prime Minister,
BIDV is under direct rule of the Finance Ministry. In the earluy stage the bank
consisted of eight branches and 200 staffs with the name: Bank of Construction of
Vietnam. Its tasks consisted of allocation, capital management, supplying capital for
all social and economic fields.
On 24 June, 1981 its name was changed to Bank for Investment and Construction of
Vietnam, under direct rule of Vietnam State Bank. On 18 November, 1990, the
bank was renamed as Bank for Investment and Development of Vietnam. BIDV's
mission was changed: Continue to receive capital to give credit to state- planed
projects; raise capital from medium and long loans for investment and development;
currency operations, bank’s service, credit for business mainly in construction and
installation to serve investment and development. In 1995 BIDV was granted a
versatile business license, diversifying its business fields, including financial,
curency, credit and banking services conforming to the law, constantly increasing
the profitability of the banks, contributing to the implementation of national curency
policy for developing the economy of the country.
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2.1.2. Objectives

To build Bank for Investment and Development of Vietnam to become a Finance
Bank corporation with multi-owned mechanism, multi-sector business including
activities in finance, banking, insurance, securities and financian investment, estatereal estate, at a level equal to the advanced financial banking corporations in South
East Asia. The bank operates under international convention, quality - prestige,
scale efficiency, and is the leading retail bank in Vietnam.
2.1.3. Slogan of BIDV
• Business effectiveness of customers is the operating goal of BIDV
• Sharing opportunities – Successful cooperation.
• Quality - Sustainable growth – Effectiveness and Safety
2.1.4. BIDV’s Products – Service
• Bank: Supplying full package of the traditional and modern banking services.
• Insurance: Insurance, reinsurance of all types of non-life insurance.
• Securities:

brokerage,

repo,

consultance,

guarantee

and issuance,

management of investment portfolio
• Finance Investment: bons, stocks, contributing capital to establishment of
companies for investment in projects
2.1.5. Organizational structure
The board of directors:
Is the highest department of the bank, deciding development strategy and

orientation of activities of BIDV.
Board of general managers:
Board of general managers is the directly managing deparment and manages all
activities of the bank.
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BIDV is one of the banks which have the largest distribution network in the
banking system in Vietnam, divided into two blocks:
Business Block:
• Commercial Bank branches include in 103 level 1 branches with nearly 400
transaction places, more than 700 ATMs and tens of thousants POS places
spread all over the country, ready to serve all customer needs. There are two
specialized units:
 Bank for payment for the stock market (Nam Ky Khoi Nghia).
 Wholesale bank as trustee agency disbuting ODA capital (3rd Transaction

office)
• Securities
 BIDV Securities Company

• Insurance
 BIDV Insurance Company: Includes Head Office and 10 branches

• Investment - Finance:
 Financial Leasing Company I
 Financial Leasing Company II
 Financial Investment Company
 Fund Management Company Industry and Energy,...

• The joint ventures:
 BVIM Investment Management Company
 VID Public venture Bank
 Laos - Vietnam venture Bank
 Vietnam - RussiaVenture Bank
 BIDV Tower verture bank
 Venture Bank of Cambodia
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Administrative block:
 Training Center.
 Information Technology Center

Total staff of the whole system is over 10,000 people.
2.2. ANALYSIS THE ACTUAL SITUATION OF BIDV IN THE RETAIL
BUSINESS FIELD
2.2.1. BIDV Internal environment
2.2.1.1. Organizational structure of retail banking:
Since September 2008, BIDV has made reconstructure in organization and
operational activities in the whole system. Headquarters formed 7 blocks and the
Branch formed 5 blocks (customer relationship, risk management, operational
management, internal and subsidiaries). Accordingly, organizational structure for
the retail banking operations consists of:
a. BIDV’s headquarters:
There are 3 units in BIDV headquater: Department for retail product
development and marketing, Card Center and Board for managemenr of
branches.
- Retail product development board and Marketing: To advise and help the Board
of Directors in direction of development and management of retail products

including retail credit products and retail non-credit products (except for card
product), development and management of modern distribution channels (not
including ATM / POS) and retail marketing operations of the bank . This unit is
responsible for market research, building strategy for development and
management of retail products; defining distribution channels, how to sell to the
department concerned; responsible for efficiency of assigning retailed products.

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- The Centre of Card: Advising Board of dicectors to plan policy, develop
strategies, solutions and organize the business in the system of BIDV; Directing
and guiding the member units to conform to the policies of the government, State
Bank, BIDV in card business.
- The Board for management of branches: Advising Committee and helping
leaders in the development of business networks in the whole system (including
branches and transaction offices, transaction, savings, ATM....); controling and
orientattion activities of the branch in accordance to the conditions and
characteristics of each locality; Direction, guidance and supporting branch in
implementing business plans and business operation; intermediate role between the
Executive Board of Directors, the Board, Center at Headquarters and the branch.
Vice-manager
directs the retail
branch

The retai product
development
department

Marketing

department

Retail credit
development
department

The branch managing
board

Quality
management
department 1

Quality
management
department 2

Non-credit
product
development
department

The card centre

Development
business
department

Operation
department

Risk
management
department

Figure 2.1: Organization of retail business at BIDV
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b. At the branch:
There are departments for individual customer relationship management,
individual customer service and transaction office with main tasks: marketing,
direct selling the retail banking products or services to individual customers and
households.
According to the internal statistic report, to 9/2009, the BIDV system has just
only 30 from total 108 branches with established separate individual customer
relationship department with 250 staffs. The others established in the individual
customer relationship unit in the general customer relationship department and
most staff holds both wholesale and retail service products concurently.
Branch Manager

Vice-manager
directing customer
relationship

Vice- manager
directing customer
service

Individual

customer service
department/ team/
brand
CN

Individual
customer
relationship
department/ team/
brand

Credit management
department

Figure 2.2: Organization of retail banking at a BIDV branch
Transaction

2.2.1.2. The development
Departmentof retail banking network
Storage service
manager
department

a. Branch Network:

Performance of the branch network has been significantly improved in the three
years from 2006 to2008. The reorganization of the network under Rearrangement
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