Evaluation on sources of fund and capital raising activities of military commercial joint stock bank of vietnam (MB)

BANKING ACADEMY
FACULTY OF LANGUAGES



COMMERCIAL BANKING
Evaluation on Sources of Fund and Capital-raising
Activities of Military Commercial Joint Stock Bank of
Vietnam (MB)


Lecturer: Mrs. Pham Thu Thuy

Miffy Group
Nguyễn Ngọc Phương Thảo
Trần Thùy Linh
Quách Lan Hương
Trang Thị Huyền Trang
Vũ Thị Trinh
Hà nội - 2016
1


TABLE OF CONTENT

2


ABSTRACT
The commercial banking system with strategic domestic and foreign
resources fund-raising activities plays an significant role in Vietnam economic

growth. It is fundamental for students majoring in economics, especially those
who are studying in banking and financing sectors, to do research on fundraising problems, methods and markets so as to build proper strategies and apply
them into practice, to comply with the country’s capital requirements for
developement. Facts and statistics have shown that Vietnam commercial banks
failed to fully realize their potential position as the amount of mobilized capital
is a small proportion of total assets, quality of credit is indequate, ratio of bad
debts remains high, services are not diversified enough to meet the customers’
demands and the financial situation of many banks is now in humble conditions.
Particularly in the banking sector, fast growth of competitors and strict
regulations pose big challenges for financial institutions. Dealing with such a
severe environment, approoriate solutions and policies must be drawn to take
full advantages of potential fund-raising from customers and eco-social
institutions to expand banking operation and enhance development.
Understanding this, Miffy Group has chosen Military Commercial Joint
Stock bank of Vietnam (MB), a distinguished commercial bank recognized for
its strong financial situation anf eminent customer experiences, to be the subject
of the case study. Through the analyses of MB’s size and capacity performance
of fund in the period from 2013 to 2015 presented in this report, the bank’s
strategies of fund-raising are relieved such as their products and techniques.
Brief descriptions of major factors affecting MB’s operation are provided as
well. Lastly, there are recommendations for the bank in terms of fund
mobilizations, loans and securities investment activities.

3


OVERVIEW OF MILITARY COMMERCIAL JOINT STOCK BANK
OF VIETNAM
I.

History:

Military Commercial Joint Stock Bank of Vietnam, abbreviated as MB,
was founded on 4th November 1994 under the license issued by State Bank of
VietNam and valid for 50 years. After 22 years of development, MB has become
one of the strongest commercial banks with a sustainable position in Vietnam’s
banking and finance sector. The main shareholders of MB are industrial, serving
and financial institutions. In addition to that, about 7000 individual shareholders
also join hands in order to build up a potent bank. The bank started its operation
with innitial capital of VND 20 million and 25 staffs. Charter capital of MB in
2010 was 7300 billion and this number is estimated to increase rapidly in the
upcoming years, which will give MB the chance to be a big financial institution.
It has been annually rated A ranking by State Bank and gained many impressive
achievements such as Vietnam Brand Award in 2005 and 2006, Vietnam Trusted
Brand Award and Top 100 Vietnamese Brands in 2007, Vietnam Gold Star Award
in 7 consecutive years and so on. Late 2007, MB had expanded its network in
almost all the cities and provinces in Vietnam with 65 branches, 3000 staffs and
expected to grow more. It also focuses on enhancing international cooperation
with more than 700 agencies in 75 countries all over the world.
Over the past 20 years, with the wish to become a wholehearted and
reliable companion of customers, partners and shareholders, MB has been
making all efforts, heading towards the goal of sustainable development and
4


bringing about more added values. MB’s values are not only evident in its assets
but also in the intangible values that every staff appreciates and collaborates of
which include Reliability, Teamwork, Customer Care, Creative, Professionalism
and Performance-driven.
Being a business with a military origin, MB always pays attention and

gives top priority to activities for gratitude, sharing losses and difficulties with
wounded and diseased soldiers, family members and relatives of martyrs and
war veterans, and people with meritorious services to the revolution, etc. In
2014, MB allocated VND20 billion to these activities comprising multiple
meaningful programs, namely searching martyrs’ remains, building houses for
soldiers and families in difficult living conditions, supporting education,
promoting community health and life, etc.
The Board of Directors, Board of Management and all employees of the Bank
make strong commitment to continue to be a safe and sustainable financial fulcrum
for all the customers; an efficient and stable investment destination for shareholders,
and one of the prestigious financial organizations with active contribution to the
implementation of the monetary policies of the Government and State Bank of
Vietnam.

5


1994
2000

2003
2004
2005

2006

MB developed strongly beyond the scope of a bank and step by step,
became a group starting with the establishment of 2 member entities
which are thang Long securities Co., Ltd, currently known as MB
securities Joint stock Company (MBs) and MB assets. Management

After 8 years of effective operation, MB decided to reorganize itself to develop in a faster,
stronger and more sustainable manner under the MB reorganization project. accordingly, MB
worked with a foreign consulting company to develop the 2004-2008 strategy with a vision
towards 2015.

MB became the first commercial joint stock bank to offer its shares via public bidding with total
par value of Vnd20 billion.

MB entered into a three-party agreement with Vietcombank and Viettel group with respect
to payment of telecommunication fees for Viettel and a cooperative agreement with
Citibank.

MB continued its business expansion with the establishment of hanoi fund Management
Company (hfM), which is currently MB Capital Management Joint stock Company (MB
Capital). MB successfully implemented the project of information and technology
modernisation Core Banking t24 of temenos group (switzerland).

2008

MB started the process of organizational restructuring, improving and
implementing the personnel strategy under the organizational model
of the period 2008-2012. Viettel group became a strategic shareholder
and MB increased its share capital to Vnd3,400 billion.

2009

MB completed the increase of its chartered capital to Vnd5,300 billion. MB was awarded Labor
Medal grade 3, and the iso 9001:2008 Certificate from Bureau Veritas Certification (UK). The
247 Customer Center was launched.

2010

2011

6

MB was established with the initial charter capital of Vnd 20 billion and the purpose of
providing financial support to military enterprises.

The MB’s first branch located in a foreign country was launched in
Laos. MB was assessed and rated e+ by Moody’s, a worldwide credit
rating organization. MB achieved initial successes in the
implementation of the development strategy in the southern region
and invested in construction of the database center and the provision
center with the total investment capital of Usd10 million.
During the year, MB successfully appointed the new Chairman and
transferred its administration and military function to be under the
Ministry of national defence and its Party Committee to be directly
under the Central Military Commission. Additionally, MB’s shares
have been successfully listed on Ho Chi Minh City stock exchange –
HSX since 1 November 2011. MB implemented its strategic model
for 2011-2015, as well as its business model and deployed strategies
for the Southern region, the Central region and the Central highland.
MB sucessfully upgraded Core T24 from R5 to R10.


General business activities:

II.

Military Commercial Joint Stock Bank (MB) provides a wide range of
products and services. The major offerings and activities include:
-

Commerical banking activities in accordance with regulations by the State Bank

-

of Vietnam;
Provide derivatives products in accordance with legal regulations;
Act as an agent for insurance and related services in accordance with legal

-

regulations;
Trading bonds and other financial products in accordance with laws/legal

-

regulations;
Trade and process gold;
For businesses that require special licensing, the Bank only operates in those
businesses when it is capable of meeting these condition accordance with legal
regulations.
Main services and business activities

1.

Savings deposit mobilization activities:
MB has implemented many solutions to attract funding sources to serve its

business operations. MB received savings deposits from corporates and
individual customers via numerous channels. Deposits that come from corporate
clients through MB’s sales network from CIB division (Corporate, Institutional
Banking Division), SME division (Small & Medium Enterprises Division) and
retail clients have all brought about favourable results. MB has a diverse and
flexible means of attracting deposits, which serves well to meet the diversified
needs of corporate and retail clients.

2.

Lending activities:
MB has achieved good growth in terms of both the number of clients and
size of the loan portfolio.
MB’s credit approval process involves the Credit Committee (including
senior executives) and thus warrants that the credit approval activity is executed
with the highest possible quality. The Credit Committee serves all three main
7


groups of clients (large enterprises and financial entities; small & medium
enterprises; and individuals) with the goal of evaluating and making credit
approval decisions according to its given authority as specified in each period.
MB has provided loans for corporates, institution and individuals with different
types and maturities, such as short-term, mid and long term credits, clean credit
or collateralized loans in various currencies… MB has funded major defense
economic projects through lending activities. Besides, MB has implemented
credit financing activities for customers such as large State owned corporations,
small and medium enterprises, household as well as individuals, who have needs
for mortgage-back loans for consumption or running business.
3.

Bank Guarantee:
MB provides a wide range of bank guarantee services, such as bid bond,
performance bond, advance payment guarantee, guarantee for warranty
obligations, payment guarantee, tax payment guarantee, product quality
guarantee, etc. MB’s bank guarantee services have significantly contributed to
MB’s sources of income and have been efficient and prudent without any
substantial risk events, Among domestic commercial joint stock banks, MB is
one of the few with the highest revenues generated from bank guarantee
operation since MB has a diverse client base operating in a large number of
industries with high demands for bank guarantee services. Moreover, MB
possesses the financial capacity and credibility to win business from
beneficiaries of these guarantees.

4.
4.1.

Payment services:
Domestic payment:
MB offers a domestic payment service via its network of transaction
offices, ATM machines, e-banking system and agreements with other banks that
gives MB clients access to their payment networks. Specifically, MB provides
services such as domestic payment, transaction account management for deposit
withdrawals, balance management and other account management services.
8


International payment:

4.2.

MB’s network of over 800 correspondent banks all over the globe means
that its international payment services are effective, timely and well-respected
by its partners.
The international payment services that MB offers include Barter
transaction payments; Overseas outward remittance;. Overseas inward
remittance; Documentary Collection including Documentary Collection Against
Payment (D/P) and Documentary Collection Against Acceptance (D/A), where
MB acts as the collecting bank and transfer documents; Issuing export letter of
credit with services including Advising and Amending L/C, Discounting L/C or
Confirming L/C; Import letter of credit; Discounting bills from export letter of
credit and International guarantee issuance.
5.

Money Market and Forex trading:
With many partners that are banking and non-banking financial insitutions
both in and outside of Vietnam, MB is an active player in the monety market.
Trading in the money market helps MB utilize effectively its sources of capital
while managing liquidity and earning a reliable income stream.

6.

Card services:
In 2004, MB started offering the debit card Active Plus for its clients. This
product has important features such as payment through POS, money transfer
via ATM, and personal insurance for card owners. The Bank successfully
established connections with the card union system Smart Link, enabling clients
to complete transactions from any ATM machine within the card alliance. MB
has also officially become a member of Master. Regarding the Visa Card project,
MB succeeded in launching an internal payment system on December 27, 2010.

As of June 30, 2011, MB had issued in total of 398,500 cards; established 1,328
POS and installed 327 ATM machines. Since early 2011, the Bank has also
launched the Visa Card and Master Card international credit card programs.

9


MILITARY COMMERCIAL JOINT STOCK BANK’S SOURCES OF
FUND
I.

MB’s capital raising products:
From 2013 to 2015, MB bank applied to capital raising products for 2
types of customer with a variety of deposits. There are 2 types of customers :
personal banking and corporate banking.
10


1.

Personal banking customer:
Personal banking customer of MB includes 3 types : current account,
traditional saving and accumulated savings for corporate staff.

-

Current account: With a payment account (current account), customers can
receive and keep their deposited money (VND, USD, EUR, etc,..) as well as use
the money in account for daily spending and payment. Current account is
unlimited for the times of deposit or withdrawal.

-

Traditional savings: MB always brings customers the convenient products.
Beside new products, MB still offers “traditional savings” including: advanced
interest term savings, monthly interest term savings, in-arrear interest term
savings. To enjoy this service, customers only need to bring the ID to any
branch/ transaction office of MB nationwide. The product is flexible and
convenient for customers. Interest can be paid in advance, on monthly basis or at
maturity.

-

Accumulated savings for corporate staff: this is a product with unique characters
to help customers know how to use their salary in an effective way. The salary
will become a source of benefit. Interest is earned on customers’ actual
depositing period and accumulated depositing balance. Monthly deposit amount
may vary during the depositing period, based on the Deposits Periodical
Statement corporations send to MB. This is a term deposit in which deposits are
placed on a periodic basis to earn interest and aim at least long-term saving
purposes. (Term: 12 months at minimum; Currency: VND, USD, EUR)

2.

Corporate banking customer:
There are 3 forms of the deposit, which is applied to this customer objects :
demand deposit, term deposit and term deposit with partial withdrawals .
TYPE

11

DEFINITION

BENEFITS

REQUIRED
DOCUMENTS,


Demand
deposit

Term
deposit

Demand deposit
accounts
are
opened
at
financial
institutions
to
enable enterprises
to exercise their
settlement
transactions via
banks’ means of
payment.

Term deposit is
the money of
organizations
deposited at MB
for a certain
period of time in
order to earn
interest.

Term deposit with
partial
withdrawals
is
designated
for
organizational
Term
customers.
deposit with Customers
are
partial
entitled
to
withdrawals withdraw parts of
their
deposited
12

- Account opening fee;
- Simple, fast and

convenient application
procedure;
- Safe and convenient
transactions;
- Account information
security;
-Beneficial to valueadded
services:
overdrafts on demand
accounts, bank transfer,
on-behalf
salary
payment, receivables
collections for goods
and
services,
Ebanking services…

PROCEDURE
- Account application
form
Legal
documents:
Business
License,
Decisions
for
Appointment of General
Director
and

Chief
accountant, etc.
-Documents
verifying
legal representative status
of the account owner: ID
or passport, appointment
decisions (if any)…
-Tax code registration.

- Account opening free
waive;
- Simple and fast
application procedure;
- Diversified terms
corresponding
with
flexible interest rates;
- Safe and confidential
account information;

- Documents verifying
legal status of the account
owner;
- Tax code registration;
- Term deposit contract
(in MB form).

- Simple procedure,
fast

document
processing;
- Diversified terms
with flexible interest
rates;
- Principal can be
withdrawn at any time
and at any MB
transaction offices;

- Documents verifying
legal representative status
of the account owner;
- Tax code registration;
- Term deposit contract
(using MB template).


amount
demand.

3.

Factors affecting capital-raising activities of MB:

3.1. External
a.

on The
remaining

principal in the term
deposits with partial
withdrawals is still
subject to the preagreed interest rate.

factors:

Population structure and geographic location
If located evenly in a densely populated places or sub-regions, business and
economic activities would grow better, bank’s expansion and fund raising
activities are likely to flourish more rapid. Even more favorable locations are
ones that is surrounded by active markets, high sensitivity to interest rate trends

b.

and business operations.
Development status of the economy
The move of the economy, or the development cycle of the economy,
heavily impacts depositor’ decision to whether putting money in bank, hoarding
gold, dollars or buying other asset. In the case of economic instability, price and
purchasing power of the currency fuctuates greatly so people tend to keep
valuable assets to themselves rather than bringing money to banks. Conversely,
a developing economy that is stable with reasonable inflation rates would have

c.

increasing people deposit in banks.
Funding demand of the economy
Commercial banks are essential financial intermediaries as it plays a bridge
connecting the lack of capital and surplus capital, fulfilling funding demand of

the economy. The role of commercial banks in Vietnam is especially appreciated
as the stock market has just been recently opened; leaving borrowing demand

d.

heavily depends on commercial banks.
Conditions in a competive environment
MB, in terms of total value of assets, doesn’t stand out as significant to the
entire banking sector (MB’s total asset valued at VND 200.00 million in 2015,
but the biggest banks in the country all have total asset valued at over VND
13


800.000 billion). Consequently, MB isn’t quite recognized by the large number
of people. Therefore, in order to survive and develop, MB needs to define
appropriate business straegy to be able to win in competiton with rivals, MB has
to improve and diversify its services, implement resonable products, develop
e.

market research skills and perform well in marketing.
Enviroment law
Regulations are major factor that influences the mobilization of any bank’s
capital. Monetary policies, fiscal policies, and the legal framework in Vietnam
imposes very specific guidelines to banking operations and therefore makes the
market incredibly sensitive to any smallest change. For instance, under the
operation of a tightening monetary policy can impact negatively on a liquidity of
a bank. Currently, regulators, understanding the neccessity of raising capital of
commercial banks, have issued several documents encouraging bank’ capital
expansion to meet capital requirements for industrialization and modernization

f.

of the country.
Saving status of the economy
The surplus of assets in the econmy geratly afects capital-raising activities
of banks. When there is great productivity in the economy or when people make
sastisfying income, savinf ratio grow as well. In fact, when per capital income
reaches a certain level, savings rate will be increasing with larger porportion to
per capital income. In addition, MB should sihnificant role in issuance
operation.

g.

Element of culture, social, and psychological
Culturally and socially approriate marketing would make MB more appeal
to depositors. Psychological conditions can be expressed as lenders’ belief in
currency appreciation/depreciation. For example, if MB were to be marketed
offensively to the Vietnamses culture, or if depositors believed in a future of
falling currency, there would be a mass withdraw of capital. Another
characteristic of customers is ther freqency of the use of banking services.

14


Higher useage levels, or more loyal customers, are favorable conditions to a
bank’s operation.
3.2. Internal
a.

factors:

Level of banking technology
The level of banking technology is expressed through the type of services
that bank supplies and their productivity; professional ability of staff; facilities
and cater equipments of the banks operation.

b.

Business operation’s aims & strategies
In banking operation, operation of capital use directly affect capital
mobilization, each bank has own strategy from time to time, depend on the
operational characteristic of the banks themselves and the business enviroment
conditions. To perform well the task of raising capital, MB launched various
forms of capital mobilization, from different types of deposit to distinct financial
instrument. Consequently, the most powerful tool in the bank’s hand is interest
rate. The effects of interest rates on lenders’ behavior are never to be disregared.
Beside capital use, products, and interest rates policy, capital balancing
mangement also allows the banks to understand certain financial situation and
make appropriate moves.

c.

Reputation of the bank
Having great reputation meaning thats bank would have more advantages
in capital mobliziation. The trust and loyalty of customers will help the bank in
terms of stablizing capacity because the bank could set the reserver strategy
easier. In line with advertising images, banks should not forget the important
supportive role of products policy, customer policy, consulting services, discount
policy, and staff poliscy because they are captivating unlities that cold ensure
customers’ belief, bring more customers and strengthen the bank’s

competiveness.

4.

Techniques used to raise capital of MB:
There are 3 main solutions for MB to raise capital effectively.
15


4.1. Economic

solution

There have been many products for raising capital and with each product,
the bank has many different interest level.
Bank/ term (month)

Non

1

2

3

6

9

12 18

24

36

5.4
5.3
5.1
4.9
4.3
5.2
5.4
4.8
4.8
4.6
4.5
5.35
4.3
4.4
4.3
5.2
5.2
5
0.1
5.4
5.1
5.5

5.4
5.3

5.1
4.9
4.3
5.2
5.4
5
4.9
4.7
4.8
5.35
4.3
4.5
4.3
5.4
5.3
5.1
4.75
5.5
5.2
5.5

5.5
5.5
5.4
5.3
4.8
5.2
5.5
5.3
5.15

5.3
5.25
5.45
4.8
4.9
4.8
5.5
5.5
5.2
5.1
5.5
5.52
5.5

6.4
6.5
5.9
6
5.3
6.2
7
5.9
5.65
5.7
5.8
7.1
5.3
5.4
5.3
6.5

6.4
5.8
5.6
6.5
5.8
6.1

6.5
6.6
6.2
5.7
5.5
6.3
7.1
5.9
5.65
5.7
5.8
6.9
5.5
5.6
5.5
6.7
6.5
6.3
5.6
6.5
6.2
6.2

7
7.1
7
7
6.9
7
7.2
6.8
6.6
6.2
6.5
7.4
6.5
7.2
6.8
6.9
7.1
6.8
6.7
7
6.8
6.9

7.5
7.3
6.9
6.5
6.8
7.3
7.5

6.8
0
6.5
6.8
7.2
6.5
7.5
6.8
7.6
7.25
7.1
6.5
7.25
6.9
6.9

7.7
7.2
6.9
6.5
6.8
7.4
7.5
6.8
0
6.7
0
7.2
6.5
7

6.8
7.7
7.6
7.4
6.2
7.25
6.95
6.9

term
OCB
SHB
HD Bank
AB Bank
BIDV
Ocean Bank
VietBank
Sacombank
Techcombank
ACB
Agribank
VietCapital Bank
Vietcombank
MB
Vietinbank
VP Bank
Bảo Việt Bank
TP Bank
VIB
SCB

SeABank
GP Bank

0
0.5
0.7
0.4
0.5
0.8
1
0.3
0
0.3
1
1
0.3
0.3
0.5
0.5
1
0.6
0.1
0
0
0

7.3
7.3
7.6
6.5

6.8
7.2
7.5
6.8
6.5
0
6.5
8.2
0
0
6.8
7.4
7.2
7
6.2
7.2
6.85
0

As clearly shown in the table, the longer term of the deposit is, the higher
interest rate is. MB is not the bank that pays the highest IR but this bank is still
believed and has a large number of deposit customers.
In additional, a lot of specific products of MB brings it more customers and
more capital, such as: Saving for military person ( servicemen), saving for startup, saving for kids, saving for the elder and so on.
16


Only with an integrated revolution based forms check forms relating to
customers, in 2014 Military Bank (MB) has dropped 53% the length of the
contract from 26 pages to 10 pages, reduce 81% of the signatures of individual

customers, down 37% the number of signatures and 27% of all forms of
enterprise customers.
These efforts administrative reform (PAR) thus contributing to improving
the quality banking services and the position of MB increased over the years.
This is a practical activity, bring efficiency to customers as well as meet the risk
appetite for the bank.
4.2. Technogical

solution

Currently, MB is one of the few banks in Vietnam that early appling the
system of international quality standards with effective management tools such
as quality management system ISO 9001, applying Lean Six Sigma approach
(system of tools and strategies to improve the operation of the business) on
redesigning

operational

processes,

business

processes.

MB has invested and gradually perfecting multi-channel communication system
to convey timely information to make up a high consistency in action from the
head Office to branches throughout the system towards serving customers with
the best quality. Database of MB is gradually concentrated, systematized.
On 01/07/2013, Military Commercial Joint Stock Bank (MB) and JSC
Trading Services and Technology M-Pay (M-Pay) has officially launched the

Electronic Communication Service Safety Contract operation between the two
sides, which provide services to clients MB.Plus MB bank.
With MB.Plus services, customer could buy cards, money transfer, query
your bank account information with a simple operation, smart as your
smartphone. Service applies to all customers using telecommunications
networks (Viettel, Mobifone, Vinaphone ...).
From this point, the MB has implemented standardized processes large
groups of bank-driven End-to-End (from start to finish for 4 groups of
17


processes). As of August, 2015, the bank has completed the redesign work to
improve procedures and processes with 17 groups of 4 credit operations,
payment and trade finance and cards.
The application of Lean methods - Six Sigma has helped improve
construction processes to be efficient services, customer-oriented operations
through standardization, reduced administrative and transaction processing time
of customer service. For example, international payments, customers not only
can perform the service at home, but international transfer period only 1/3 the
time compared to before the project implementation.
By the end of the first 6 months 2015, MB has completed 29 procedures
and continuous improvement processes, especially the process of delivering
products and services directly to customers, increase customer satisfaction and
employee productivity. In 2015, MB has completed system improvements in the
exchange forms, reduced by 44% the number of forms, reduced to 74 155 pages
in forms, and provide 27 to 40 innovation forms automation helps ratio to 39%.
MB has implemented strong and effective projects big improvement applications
for the reform of administrative procedures, enhance process automation
activities such as computerization of processes BPM, 2B category system, MIS,
eBanking, CMR ...

Particularly BPM projects have been put into operation according to
schedule in 2014 and aims to shorten the 40% of the processing steps, 90%
digitized documents and papers into electronic archives, automated 100% profile
rotation stages, reducing the processing time of end-to-end transactions 30%. IT
applications to perform reporting documents, forms, increase the rate to 90%
automation
4.3. Psychological

...
solution

Not only increase the quality of service over time, MB has focused on
training and raising professional qualifications, competence, attitude of service
18


for staff to complete, in order to further improve the transmission leading
products and services to the society, reduce the time, cost approach to customer
service.
On average, each year 270 banking organizations recruit new training,
start-up key 53, 188 update course 3 courses and resources, equivalent to more
than 30 thousand visitors participated in the entire system of training, the
percentage of online training e-learning accounts for about 50% of the total
number of training courses.
According to the Military Commercial Joint Stock Bank (MB), from
February 2009, MB officially launched customer care services - MB 247. This is
the latest model of Avaya, a company that leads the world in the field of
customer care services are MB application, in order to improve service quality
and increase customer utility. MB 247 will operate continuously for 24 hours
and 7 days a week

Together with a public listing on the web and as prescribed by the State
Bank, SSC, MB has established communication channels and improve the
mechanism of internal customer care. Accordingly, the receipt, handling, reflect
the recommendations of customers for products and services of the bank are
recorded, tracked and resolved promptly, not to happen the other complaints.

II.

Structure of MB’s sources of fund:

19


The total amount of MB’s sources of fund created an upward trend from
2013 to 2015. The number changed significantly with a stable growth rate each
year (1,1%), from VND179,821 billion in 2013 to VND199,901 billion in 2014
and reached an impressive number of VND221,041 billion in 2015. These
figures indicates that MB, with firm steps, have ascertained its market position
and upheld the confidence of shareholders, investors and customers.
In 2013, MB incessantly made efforts to develop solutions to control and
improve the quality of services – an important factor responsible for making the
difference of a leading bank. Close relations were maintained with traditional
customers, military customers and customers in the armed forces. a wide range
of customer-specific products were developed for military servants and staff and
officers in the national defense sector such as: savings for military personnel,
loans to military personnel, etc.
With a sustainable foundation system, in 2014, MB continued to adjust the
mobilization policy. It was flexible in line with market movements, policies of
the state Bank of vietnam, and customer demands. A wide range of deposit
products, such as nhan an savings, Cambodian actual savings, 12-Month easy

savings
and Mobile savings, were provided to be suitable with different
geographical markets and customer segments. MB’s network in 2015 was
expanded with 253 transaction points, compared to the 140 transaction points in
late 2010, with 2 foreign branches in Laos and Cambodia. Its network, premises
and infrastructure were heavily invested, especially in large cities. The Bank’s
charter capital reached VND16,000 billion, more than doubling from VND7,300
billion in 2010, which reflected the significant contribution from shareholders.
1.

2013:
Overall, the total number of deposit from customer and Credit Institutions
accounted for the biggest proppotion of liabilities, which equaled to
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VND146,254 billion – 88.81%.This fact suggests that MB has very good image
and reputation in customers’ eyes.

(MB’s consolidated balance sheet in 2013)

According to MB’s consolidated balance sheet in 2013, the number of
deposit from customer increased sharply in comparison with the same period in
2011, from VND117,747 billion to VND136,088 billion. On the other hand, the
amount of Credit Institution’s deposit from 2011 to 2012 was in a light decline.
The number decreased by more than VND4 billion.
Clearly seen from the balance sheet, non-deposit sources of fund accounted
for a small proportion of total liabilities, which was 17.36%. The biggest amount
of non-deposit source of fund was borrowings from Credit Institution with the
number of VND11,256 billion. This number shown a slump in borrowings from

Credit Institution compared to the same period in 2012. In addition to that,
valuable papers issued and other liabilities saw considerable falls with dramatic
figures. Other sources also had moderate fluctuations due to the fact that MB
was mainly focusing on how to attract more deposit sources of fund.
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(MB’s consolidated balance sheet in 2013)

As recorded figures from MB’s Annual Report in 2013 has shown, the total
shareholders’ equity was VND15,148 billion, increased by 5% as compared to
2012, in which more than 75% of capital accounted for. The capital included
charter capital, share premium and other types of capital. The bank’s retained
earnings only held a small proportion of 14.07% , equivalent to VND2,129
billion. Reserves improved slightly in comparison with 2012 but still remained
the smallest one among three factors.
2.

2014:

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(MB’s

consolidated balance sheet in 2014)

Being customer-oriented, in 2014, MB focused on developing hi-tech
integrated services, increasing customers’ convenience especially from
electronic

products

offered

in

cooperation

with

Military

electronics

telecommunication Corporation (Viettel). This improvement in customer
services lead to the fact that the total amount of fund from customer’s deposit
was extremely high in comparison with the same period in 2013 (increased from
VND136,088,812 billion to VND167,608,506 billion). Customer’s deposit also
played such an important role in fund structure of MB with the proportion of
91.42% of total fund. However, deposit fund from Credit Institutions in this year
dropped dramatically from VND10,196,446 billion to VND966,714 billion,
which accounted for a very small percentage. Borrowings from Credit
Institutions also saw a steady decline in amount, which went down by nearly
VND8 billion.
Other non-deposit sources of fund changed in many different trends. The
amount of valuable papers issued remained stable which was exactly equal to
the amount in 2013. Other borrowed and entrusted funds as well as other
liabilities reached a noticeably climb with nearly 1.5 times their previous values.

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Especially, fund from derrivatives and other financial liabilities turned to zero in
2014, which stated that at that time the bank had no fund from this source.

(MB’s consolidated balance sheet in 2014)

In 2014, MB strictly enforced applies the principle of ensuring stable and
appropriate income for its shareholders by paying dividends to shareholders in
different forms such as cash dividend and share dividend. Meanwhile, MB also
maintained sustainable growth and value of its shareholders’ capital by using
retained earnings to reinvest in the future and maintain shareholder value. Its
profit after tax was allocated to various reserves in accordance with relevant
legal regulations, dividend payment and other funds. The amount of three factors
in equity structure rose slightly, in which capital accounted for the biggest
proportion as normal with 70%.
3.

2015:

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(MB’s consolidated balance sheet in 2015)

In 2015, MB once again, shown its sustainable position in Vietnam banking
and finance sector by mobilizing a big amount of deposit fund from customers
in comparison with the same period in 2014. The number was VND181,565,384
million, which increased VND13,956,877 million. This type of fund continued

to hold the biggest proportion of total fund raised with 91.42%. The reason
behind MB’s success was the development of products and services which closely
followed MB’s strategic direction. Diversified products and services were built
and developed, that met relevant business targets, approaching every customer
segments and being compatible with specific characteristics of each region.
Deposit fund from Credit Institutions in 2015 had a considerable improvement
with the amount equaled to nearly 3.5 times its previous value in 2014.
Non-deposit sources of fund in 2015, in general, increased gradually except
for the other liabilities - which declined by half of the amount in 2014.
Especially, the amount due to the Government and State Banks went up from
zero in both 2013 and 2014 to the number of VND1,411,502 million. This figure

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