The mobilization captial at BIDV thai ha branchs

1.
1.1.

General status of TH Branch’s mobilization capital from 2015 - 2017
Mobilization scale of Thai Ha branch’s:

In the operation of the banks, capital mobilization plays an important role, because it
helps them create essential capital for their activities. It maintains the development of the
bank, decides the bank’s scale. Therefore, BIDV Thai Ha branch’s always puts
considerable efforts into creating an abundant capital, seeking for mobilizing resources to
growing stronger.
Table 1: The size and structure of capital raising
(Unit: VND)
2015

2016

2017

859,385,438,082

1,043,190,182,520

1,995,188,466,301

3,917,210,561

2,283,182,653

6,039,275,597

3,278,727,611

1,897,699,703

5,929,792,647

638,482,950

385,482,950

109,482,950

849,021,194,417

994,534,466,279

1,983,884,498,104

deposits

662,681,846,716

718,708,614,918

1,003,754,620,294

2.2 Savings

185,215,036,216

274,481,584,447

978,494,858,509

2.3 CDs and time deposits

1,124,311,485

1,344,266,914

1,635,019,301

3. Issuing valuable paper

2,606,000,000

695,000,000

5,067,392,000

4. Other liabilities

3,841,033,104

45,677,533,588

197,300,600

1,297,412,462

25,605,990,529

Mobilized fund
1. Receiving investments,
trusts and loans
1.1. Deposits from financial
institutions

1.2 Loans from domestic
financial institutions

2. Total interest-bearing
deposits
2.1 Domestic interest-bearing

4.1 Accounts payable
liabilities


4.2 Payable interests and fees
4.3 Foreign exchange

0

19,582,112,690

2,543,620,642

443,515,946

4.4 Unearned revenue
Total capital

197,300,600

45,914,423
872,707,905,655

1,068,840,733,411

1,996,371,175,159

(Source: Financial statement of BIDV Thai Ha 2015-2017)
As we can see from the above table, the Thai Ha branch’s capital has continued to grow
in the recent years. In 2017, the branch’s deposits is more than 1,995 billion, accounting
for 99.9% of the total capital of the bank, while the figure is 98.5% in 2015. This
indicator shows that the deposits scale of the Bank has been growing and met bank’s
demand for emergency capital. Mobilized capital volume of Thai Ha branch’s also shows
a fluctuation over the years: from 98.5% in 2015 to 97.6% in 2016 and 99.9% in 2017. In
this period, deposits always took a large proportion in total mobilized fund: occupied
97.3% in 2015, 93.0% in 2016 and 99.4% in 2017. Although the growth of deposits in
2016 has decreased, it is still accounted for large sales assistance in raising capital
structure.
1.2.
Structure of mobilization in Thai Ha branch’s:
a. Classification under the economic sectors:

For professional capital raising, the extremely important thing is identifying accurately,
completely capital resources, because it concerns to many factors, such as the content of
the raising capital policies or business plan of the bank. When identifying the source of

capital, the bank will regulate the flow of money reasonably to ensure its liquidity at the
highest level. Capital structure divided by economic sectors of Thai Ha branch’s is shown
in the following table:
Table 2: Structure of raised funds through the years 2015, 2016, 2017


Holistically, in total bank capital, the mobilized fund from population and economic
entities accounted for the largest proportion, from 70% to 80%. The rest is from financial
institutions and issuing valuable papers.
Therefore, mobilization of Thai Ha branch’s has been formed from many different
sources, and diversified structure in the ongoing growth. It indicates that the branch’s has
suitable policies and effective measures in its capital raising.
b. Classification under the term of deposit:

Table 3: Resources of mobilization in the period
(Unit: million VND)

2015

2016

2017

Change

Change


2016/2015 2017/2016
Non-term

371,751

664,463

634,500

+292,712 -29,963

939,161

1,431,150 2,079,750 +491,989 +648,600

645,673

460,013

Deposit
Short-term
deposit
Medium and

810,750

-185,661

+350,738

Long-term
deposit

Total

1,956,586 2,555,625 3,525,000 +599,039 +969,375
Source: Financial statement of BIDV Thai Ha 2015-2017

The above table shows that short-term capital in Thai Ha Branch’s takes a large
proportion of the total mobilized funds. In 2015, short-term resources in the Thai ha
branch’s was 1,310,912 million compared with 67% of total deposits. In 2016, this
indicator increased 784 700 million in comparison with 2015 and accounted for 82.06%
of total deposits. And it reached 2,714,250 million in 2017.
c. Classification under the deposit structure:

In addition to distinguishing mobilization under different economic sectors and maturity,
the determination of capital raising under the deposit scale is also important. It helps
banks maintain relationships with individuals, businesses and organizations that have
frequent demand of using foreign currency. Raising capital structure under deposit
structure is specified in the following table:
Table 4: Mobilized resources under deposit structure


Unit: million VND

2015

2016

Change

2017

Change

Local currency

1,308,741 2,218,942 +910,201

2,871,911

+652,969

Foreign currency (in VND)

647,845

653,089

+316,406

Total

1,956,586 2,555,625 +599,039

336,683

-311,162

3,525.,000 +969,375

Source: Financial statement of BIDV Thai Ha 2015-2017
From the above table, we can see that the local currency volume which the branch’s

mobilized has been relatively stable and increased steadily over the years. In 2016, it
raised 910 201 million in comparison with 2015 and in 2017, it increased by 625 969
million compared to 2016. Also, with the data of the recent 3 years, it can be said that the
local currency is the main source of the branch’s deposit and the amount of raised capital
is relatively large and takes a very high proportion of total deposits.
That is why the branch’s needs to invest more to foreign currency mobilization, and
build more specific strategies to satisfy the customer service and increase the amount of
foreign currency.
1.3.

Evaluation of capital mobilization efficiency

In 2017, Vietnam's economy witnessed a drastic change in the quality of commercial
banks with the powerful growth of profit, scale of capital as well as increased
competition. BIDV Thai Ha also reached their development goals:
-

For scale of mobilization: Thai Ha branch’s has pursued development goals and
business strategies to expand the scale constantly, and improve business
performance. Thereby, their raising capital volume has increased over the years


and this situation also has created favorable conditions for the implementation of
bank lending activities and its investments. Moreover, the proportion of deposit
-

being large helps them reduce costs and increase profits.
Regarding the structure: Like other commercial banks, the main mobilization
source is from short-term deposit, however, this source of the Thai Ha branch’s
does not fluctuate much. Medium and long-term deposit has been upward, though

not enough to meet the market’s demand, it still has positive changes, indicating

the bank's focus on medium and long-term capital.
a. Advantages
To achieve the above achievements, the branch’s has taken advantage of their
-

strengths cleverly:
The branch’s has been constantly growing in both scale and structure, developing

-

a network-wide mobilization.
The bank’s brand is prestigious and firm.
The branch’s has set out the reasonable objectives, tasks, measures and long-term
strategies for raising capital, added and improved rules in order to promote

-

individual initiatives.
In recent years, the bank has implemented a flexible mobilizing policy basing on
the basic analyze, estimated trend, and used regulated floating rate instruments to

-

attract customers.
As a part of a state-owned bank, the Thai Ha branch’s could get the attention and

-

guidance from the Government as well as other departments.
For staff, the branch’s has created an attractive and favorable working
environment to attract good employees, encouraged them in studying and

improving their specialist knowledge.
b. Shortcomings
Although Thai Ha branch’s profit has went up through the years, this branch’s still has
drawbacks needing to be tackled:
-

Although the deposit scale has increased in recent years, but its growth rate is slow
and not commensurate with the growth rate of long-term credit needs of the
organizations which is increasing due to intensive investment in the economy.


Saving deposit showed an upward trend, but the branch’s has mainly focused on
products catering for deposits by maturity. This leads to many difficulties in the
-

diversification of traditional credit products, and spread risks.
Mobilization of the TH branch’s has concentrated mainly in the local currency
deposit while public favor is keeping money in gold or dollar. Therefore, mobilized

-

funds in the TH branch’s has not achieved maximum effect compared to resources.
Interest costs have accounted a large of proportion but also showed a downward
trend while cost-benefit has increased, resulting in total funding costs of banks at a
high level but do not attract customers.Part 3: Solution, Recommendations and

Conclusion
2. Solutions
2.1.
Expanding capital mobilization forms
Firstly, the branch’s need to extend the forms of deposit: savings, deposits using card,
savings bonuses, accrued savings, and diversified terms of saving deposits. Flexibility on
the duration is an attraction to customers.
Secondly, attracting customers by enlarging services for medium and long – term deposits
such as the owner can flexibly switch when necessary, from which banks can increase the
proportion of medium and long-term funding.
Thirdly, developing the purposeful deposits. The principal clients of this method is
someone earning not high but stable intending to spend in the future, and having needs to
procure valued assets but their savings in a short time cannot satisfy. If the branch’s
catches the purpose of customer deposits, they can advise customers on time and the
specific payment methods, such as:
- Old-age savings and accrued savings
- Housing Saving
- Savings of expensive equipment procurement
2.2.
Strengthening marketing activities

The expansion of the bank's activities by active promotion, advertising, propaganda takes
an important part of the branch’s development.


2.3.

Diversifying services, along with raising their quality

The bank's activities are closely linked with each other. Therefore, to strengthen capital

mobilization, the TH branch’s should also develop related services. Currently, the
payment deposit is a very attractive market, and if the branch’s well developed in some
ways as opening a free account for in order to actively reach out to both individual and
corporation, developing payment services in domestic and international cards in order to
meet demand of deposits and withdrawals by clients.
2.4.
Improving the quality of service
- Staff attitude needs to be polite, enthusiastic, friendly.
- Recruitment and training staff in order that they have not only professional expertise

but also plentiful knowledge of many aspects. They also need to be nimble,
-

resourceful, and can answer the questions expertly and satisfy customers.
Paying attention to segment of customer care at the transaction counter from

-

drinking water to defending customer’s vehicles.
Launching of the emulation movement for workers performing their allocated

business objectives.
- Good performance in working, performing civilized, and clean transactions.
2.5.
Training and improving staff quality regularly
- Supporting staff of the training by opening professional training sources in the
-

branch’s.
Organizing more forms of discussions between Head Office and branches, among

-

branches in the same locality.
Implementing flexibility labor plans in order that the TH branch’s can ensure human

-

resources match the requirements of branch’s operations in each period
Arming staff with marketing knowledge and reasoning, enabling them to be
important chains in collecting and processing information in time to meet customer’s

2.6.

demand and enhance communication skills and disseminate of banking products.
Innovating technology in raising capital

Banks need to perform simple procedures and shortening time of transaction. The
Headquarter needs to build regulations on the maximum time for each transaction and


deployment to all staff members, basing on ensuring the legality, secure property for the
customer.
3.

Conclusion

Raising capital is regarded as very important measures serving the cause of
industrialization and modernization, making a decisive contribution to the cause of
national construction. In particular, the scale and structure of capital is the basis for

ensuring safety and profitability target of the bank. Thus, it requires commercial banks in
particular and the banking system in general in our country must constantly innovate to
operate, offer solutions and appropriate measures to promote the idle capital in resident.
Furthermore, the government also need to enforce policies and measures to support the
development activities of the banking system in order to uphold maximum internal force
and contribute to stability and develop the economy, improve people's lives.
BIDV Thai Ha, in recent years, has raised a substantial amount of capital with a
reasonable scale and diversity structure and satisfied its capital demand, sponsored for
long term projects which have features as: large-scale, long payback period. However, the
unbalance between the domestic currency and foreign currencies, short-term and longterm still significantly affect the operations of the TH branch’s.
In addition, despite of the fact that there are many competitions as other banks, especially
foreign banks and financial institutions, with a relatively large amount of capital, many
advantages in technology and human resources, BIDV Thai Ha branch’s has constantly
given the strategies to occupy and expand the market. All achievements they reached are
testament to the efforts of all staff here.