STATUS OF LOAN AND CREDIT GRANTING ACTIVITIES IN OPERATION CENTER – THE MILITARY COMMERCIAL JOINT- STOCK BANK

FOREIGN TRADE UNIVERSITY
Finance and Banking Faculty
----------------------------------------------

MID-TERM INTERNSHIP REPORT

Topic: STATUS OF LOAN AND CREDIT GRANTING ACTIVITIES IN OPERATION
CENTER – THE MILITARY COMMERCIAL JOINT- STOCK BANK

Student: Nguyen Tuan Anh
ID: 1113340071
Intake: 50 – A21 – High quality class
Instructor: Nguyen Thu Trang, MSc

Hanoi, July 2014


ACKNOWLEDGEMENT

At first, I am deeply indebted to my instructor - Mrs. Nguyen Thu Trang, Msc.,
Lecturer of Foreign Trade University for her guidance during the whole of the internship
and research period. I wish to express my great appreciation to her huge support and
responsiveness throughout the research period. Her suggestion and comments were really
a great source of spirit to make the report improved significantly.
Furthermore, I am also grateful with Mr Director Nguyen Cao Cuong , Mr Vice
Director Nguyen Tuan Anh and Mr Do Huy Liem – officer Corporate Institutional
Banking -

customer department of Operation center, The Military Commercial Joint-

Stock Bank and all staff who has been helpful with general advising and supporting

from beginning to end of my internship period.
Finally, I wish to thank all staffs and successors of Operation Center - The Military
Commercial Joint- Stock Bank for their support during the time I worked and research in
the center.


PREFACE

The more growing the economy is, the more demand for capitals increases
sharply, it also means that loans and credit activities will grow along with the growth of
the economy. Currently, investment projects are holding an important position and
participate in most of the economic activities, especially a credit relationship with
commercial banks. Granting Credits is one of the most important business activities and
main sources of profit of any commercial bank.
Starting from this situation, combined with the process of 5-week internship in
CIB Department – Operation Center – The Military Commercial Joint- Stock Bank and
the knowledge acquired during studying in Finance and Banking Faculty – Foreign Trade
University, I have chosen the research "Status of loan and credit granting activities in
operation center – military commercial joint stock bank”. .
The research divided into 3 main chapters, apart from the preface and conclusion.
They are:
 Chapter 1: An overview of Operation center of Military Join Stock Commercial Bank
and
 Chapter 2: Status of loans and credits activities– Operation Center
 Chapter 3: Solutions to improve the efficiency of loans and credits activities Operation
Center


LIST OF ABBREVIATIONS

Order

Abbreviation

Meaning

1

MB Bank

The Military Commercial Joint- Stock Bank

2

CIC

Credit Information Center

3

CIB Department

Corporate and Institutional Banking Department

4

SMEs
Department

5

L/C

6

INCAS

7

SBV

Small and Medium Enterprises Department
Letter of credit
Incombank Advanced System

State Bank of Vietnam


LISTS OF TABLES AND CHARTS

Table 1

Main share holders of MB Bank updated in June 2014

Table 2

Affiliates of MB Banks updated in December, 2013

Table 3

MB Bank Income Statement summary 2010 to 2013 Unit Billion VND

Table 4

Total credit surplus of Operation Center from 2010 to 2013 – Unit Billion
VND

Table 5

The Credit based on the customers at Operation Center- MB Bank

Table 6

The percentage of credit based on type of customers

Table 7

Credit basing on the maturity of Operation Center – MB Bank.

Table 8
Table 9
Table 10
Chart 1

The structure of credit basing on the maturity of Operation Center – MB Bank
in percentage
The quality of debt in Operation Center – MB Bank
The structure of debt based on the quality of debt in Operation Center – MB
Bank
Changes in total credit surplus in Operation Center- MB Bank

TABLE OF CONTENTS
PREFACE ...................................................................................................................................
LIST OF ABBREVIATIONS....................................................................................................
LISTS OF TABLES AND CHARTS........................................................................................
CHAPTER 1: INTRODUCTION............................................................................................ 1
1. The Military Commercial Joint- Stock Bank (MB Bank).............................................. 1
1.1. The formation and development ............................................................................... 1
1.2. Performance of MB Bank .......................................................................................... 3
2. The MB Bank Operation Center ...................................................................................... 4
2.1 Establishment and development ................................................................................. 4
2.2 Main activities at MB Bank Operation Center .......................................................... 5
3. Main tasks in internship period ........................................................................................ 6
CHAPTER 2: LOANS AND CREDITS GRANTING ACTIVITIES IN HANOI
OPERATION CENTER .......................................................................................................... 7
1. Type of credits offered in Operation Center ................................................................... 7
1.1. Classification based on maturity ............................................................................... 7
1.2. Classification based on purpose of using fund ......................................................... 7
2. Procedure of granting credits ........................................................................................... 8
2.1. Giving guidance, receiving and examining the dossiers of customer credit .......... 8
2.2. Appraising the condition of granting credit limit/credit, preparing the Appraisal
report, control and submit appraisal report. ..................................................................... 8
2.3. Independent evaluation of credit risk (in case requested) ....................................... 9
2.4. Approve the credit limit/credit. ............................................................................... 10
2.5. Inform customers of credit limit and update customer data into the system;
Drafting, controlling, completing Credit Contract / The contract of Guarantee ......... 10
2.6. Track and manage credit limit (in case of granting credit limit); Signed
addendums, contract amendments (if any) and adjust credit account information in
INCAS (for with credit) .................................................................................................. 11

2.7. Controlling, monitoring credit................................................................................. 12
2.8. Debt collection / clearance guarantees / L/C payment and handling arising ....... 15
2.9. Closing the credit documents .................................................................................. 17
2.10. Transferring, controlling, recordkeeping .............................................................. 17
3. Analysis of loan and credit activities ............................................................................. 17
3.1. Credit balance ........................................................................................................... 17
3.2. Credit structure ......................................................................................................... 19
CHAPTER 3: RECOMMENDATIONS ............................................................................... 26
1. Evaluation the performance ........................................................................................... 26
1.1. Achievements ........................................................................................................... 26
1.2. Drawbacks ................................................................................................................ 26
2. Solutions .......................................................................................................................... 27
REFERENCES ....................................................................................................................... 30


CHAPTER 1: INTRODUCTION
1. The Military Commercial Joint- Stock Bank (MB Bank)
1.1. The formation and development
MB bank was founded on 4/11/1994 as the license number 0054/NH-GP issued on
14/09/1994 and the business certificate number 060297, issued by Plan and Investment
Ministry on 30/09/1994 (amended on 27/12/2012). This bank was initially formed by 11
different companies which had strong financial health and operated in military field.
MB has a great financial health and competitiveness, always complies with capital
adequacy requirement of State Bank. Total assets of MB is constantly increasing, in terms
of total assets and capital rules, MB is one of the largest commercial banks in the country
With a wide range of products, MB Bank is developing with increasing pace and
expanding its operation to many different segments. Within 6 years, MB Bank is ranked
at level A – the highest standard regulated by State Bank of Vietnam and achieved several

prizes in the banking field.
On 1/ 11/2011, that MB Bank stock was listed in HOSE (Ho Chi Minh Stock
Exchange) is a great event, which marked a new stage of development and the
determination of shareholders and Board of management, leaders of MB Bank towards a
long-term vision and strategy. As a listed corporation, MB Bank is enhancing their
transparency efficiency in business and internationally standardizing the regulations in
operation and management
MB Bank is operating in a large scope of business as followed: Bank services
under the provisions of the State Bank of Vietnam; Supply of derivatives; Insurance
agents and other related services as provided by law; Trading in bonds and other valuable
papers as provided by law; Buying, selling and processing and gold. But we also need to

1


notice that MB Bank is a joint stock bank operating in money business, credits and other
banking services with the initial purpose of serving the needs of military enterprises.
The following table indicates the shareholders of MB Bank. The statistics were
collected in June, 2014.
Name of share holders

Rates

Viettel Group

15.0%

Vietnam Maritime Commercial Joint Stock Bank (Maritimebank)

9.95%

Joint Stock Commercial Bank for foreign trade of Vietnam (Vietcombank)

9.59%

Vietnam Helicopter Corporation

4.7%

Saigon Newport Corporation

4.27%

Others

56.5%

Table 1: Main share holders of MB Bank updated in June 2014

During the operation, MB Bank has expanded their scope of business and
established as well as invested in several companies as listed in the following table:

Name of affiliates

Asset management company (MB AMC)
Investment and controlling Investment
MB Stock company (MBS)
Viet R.E.M.A.X company
MB Land company

Charter

Contributed

capital

capital

Rates

882.69

882.69

100%

100

164.5

82.26%

1,200

970.8

80.9%

100

80

80%

653.73

425

65%
Unit: Billion VND

Table 2: Affiliates of MB Banks updated in December, 2013

2


1.2. Performance of MB Bank

Criteria

2010

2011

2012

2013

(Audited)

(Audited)

(Audited)

(Audited)

Total revenue(*)

9,616

15,091

16,687

15,147

Total costs

7,205

11,027

9,170

10,343

Profit before taxes

2,288

2,625

3,090

3,022

Profit after taxes (**)

1,712

2,127

2,306

2,276
Unit: Billion VND

Table 3: MB Bank Income statement summary from 2010 to 2013
(*):Included revenue from products and services, revenue from finance and others
(**): Deduct profit after taxes of shareholders (if any)
Source- cafef.vn

The above table summarize the performance MB Bank over the four recent years.
It can be clearly seen that:
The total cost of MB Bank in 2012 underwent a fall from 11,027 to 9,170 billion
VND, which is the result of a comprehensive re-structure. MB bank recruited less and
they recruited sale collaborator rather than official sale man who are paid with low fixed
salary and an amount of commission based on the sale revenue they brought. As many
other banks, MB Bank also cut down the cost of products from 5 to 10 per cent.1
Another outstanding feature from the table we should notice is the decrease in the

profit of MB Bank in 2013.2 This could be explained by some main reasons:
The first reason came from the fall in revenue causing by the fall

in the

investment, (profit from stock investment and capital contribution was just over 11
1
2

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3


billion VND which was equal to 10 percent of this figure in 2012). The total profit from
business activity decreased marginally by 2.5 per cent to 7,614 Billion VND.
The increase in bad debts also contributed to the fall in the profit in 2013. The bad
debts valued 2,146 billion VND, increased by 56.4 per cent and occupied 2.45 per cent in
total loan outstanding (this figure in 2012 is 1.84 percent). This fact leaded to the
requirement of nearly two – fold increasing in the bad debt provisions which deteriorate
the profit after tax of MB Bank.3 In particular, the lending provision of MB Bank
increased from from 1,312,741,172,118 VND to 1,770,148,094,019 VND in 2012 and
2013, respectively (annual report of MB Bank, 2013 ).
2. The MB Bank Operation Center
2.1 Establishment and development
The operation center of MB Bank was established in March, 2005. Over the period
of 10 years and after many divisions and merges (with many other branches

and

transaction department such as Ba Dinh, Doi Can branches, Lang Thuong, Tay Ho

transaction department) the operation center is developing as a independent and multiroles without any branches and transaction departments. Operation center is categorized
as the only first level branches of all branches in system.
MB Bank Operation center office is located at MB Bank tower at 21 Cat Linh
street, Dong Da district, Hanoi.
Over the period of establishment and development, MB Bank Operation center is
recognized as the best performance braches of all branches in MB Bank system with over
VND 35,000 billion in total asset (Accounting for 19 per cent of total asset of MB Bank)
top 5 and top 3 of all branches which have the highest surplus in credit and fund
mobilization.

3

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4


2.2 Main activities at MB Bank Operation Center
The operation center of MB Bank is operating with some following
Fund mobilization: Operation center mobilize the capital from population and
enterprises through a variety of products such as deposit accounts offered to companies
and organizations (the company will have a deposit contract with the bank); term deposit
offered to individual customers with a diversified maturities and interest rates (the
customer will open a saving book in bank); and many other products such as debit card.
Fund mobilization value in Operation center often ranked at top 3 of all branches of MB
Bank.
Credits and loans granting:

This is the main profited business activity of

operation center. Operation center is now providing a wide range of loan products varying

in terms, purposes and objectives.4 The credit balance of Operation center often occupied
about 5 per cent of total credit balance in MB Bank.
Domestic Payment: This is a diversified service provided by MB Bank by which
the customer can transfer their payment with traditional and modern methods. And MB
Bank will charge a fee on this service. Currently, MB bank in general and in Operation
center, there are some types of domestic payment provided: Transfer Cash payment ,
Payment in cheque, or certified cheque, Payment with payment order or Telebank.
International Payment: This service provides a flexible means of sending funds
overseas and has been designed to meet the needs in terms of cost and speed. Payments
are sent using an electronic bank-to-bank transfer, which is suitable for both urgent and
less time-critical payments. Payments from VND or currency accounts or against forward
contracts. The customer in Operation center can perform their payments by 3 ways:
Online – available for Online Banking customers; By phone – available for Telephone
Banking customers with their Telephone Banking passcode; or directly in branch

4

This is explained specifically in the next chapter

5


MB Bank is a Bank established by army companies, as stated before, so operation
center also prioritize and concentrate on “special” customers, which are usually
corporations and enterprises of defensive ministry, military or state-owned companies.
3. Main tasks in internship period
During the internship, with the assignment of the Corporate Institutional Banking
department (CIB) , I did some following tasks:
I learned about the Operation center – MB Bank which included some basic information
on history the development and the structure organization as well

After discussing with the instructor on the topic of my research, I choose the topic
"Status of loan and credit granting activities in operation center – military
commercial joint stock bank”.
The instructor provided me with some information on the types of credit products which
are available in Operation center.
In the next step, I was instructed about the procedure of granting credit and the instructor
also gave me an example of 10/10 Garment company to illustrate the procedure.
In the remaining time, I was provided some statistics on the credit activities of Operation
Center and was instructed to check some documents from the customers.

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CHAPTER 2: LOANS AND CREDITS GRANTING ACTIVITIES IN HANOI
OPERATION CENTER
1. Type of credits offered in Operation Center
1.1. Classification based on maturity
Short-term loan
Short-term loan has maturity of under 1 year, is used for personal expenses of individuals
and supplying businesses with necessary amount in case of working capital deficit.
Medium-term loan
This type of loan has maturity of 1 year to 5 years, is supplied for business in need of
purchasing fixed assets, expanding production scale, modernizing production technology,
etc.
Long-term loan
Long-term loan has maturity of over 5 years, is used to fund construction of huge
structures, major expansion of production.
1.2. Classification based on purpose of using fund
Real estate loans are secured by real property – land, buildings and other structures. Real
estate loans include short-term loans for construction and land development and longterm loans to finance the purchase of farmland, homes, apartments, commercial structures

and foreign properties.
Financial institution loans include credit to banks, insurance companies, finance
companies, and other institutions.
Commercial and industrial loans are granted to business to cover such expenses as
purchasing inventories, paying taxes, paying taxes, and meeting payrolls.
Individual loans include credit to finance the purchase of automobiles, mobile home,
appliances, and other retail goods to repair and modernize home, cover the cost of
medical care and other personal expense, either extended directly to individuals or
indirectly through retail dealers.
7


Miscellaneous loans include all those loans not classified here, including securities’
loans.
Lease financing receivables where the bank buys equipment or vehicles and lease
them to its customers.
2. Procedure of granting credits
2.1. Giving guidance, receiving and examining the dossiers of customer credit
In this step, the credit officers of the operation center will perform some tasks, as follow:


Guide customers prepare documents about credit limit / granting credit



Check out the completeness, rationality and legality of documents (consulting
clients if necessary)



Understanding and identifying type of customers, the demand for capital (whether
customers satisfy MB Bank’s credit provision standard / conditional grant lines of
credit ).



Check whether the customer are in the group of related customers.



Determine that the request for granting credit of customers belongs to credit
product portfolio or the current credit program of MB Bank.
2.2. Appraising the condition of granting credit limit/credit, preparing the

Appraisal report, control and submit appraisal report.
Conductors in this step include credit officers, appraiser, staff at a particular department
depending on type of customers (SMEs, large enterprises or individual) .
 Base of the evaluation / re-evaluation: Documents provided by Customer ,
information collected (which ranges from the macro analysis, industry analysis to
finance health and the performance of customer) information from other sources
such as credit information center (CIC) and information from consulting.
 Evaluation contents

8


 Appraising customer, client assessment, prepare Appraisal reports and
identify credit limit of customers.
 Assessing the response of credit conditions, which is included :
-

Macro analysis, industry analysis

,finance

health

and

the

performance of customers and some other historical records.
-

Evaluating business plans, investment projects.

-

For guarantees, L/C: Evaluating the contents related to trade finance,
considering the possibility of exchange balance for payment L/C.

 Evaluating measures of guaranteeing the loan (if any), according to:
 Assessing the level of risk in case of credit approval
 Determining credit amount, method of granting credit, interest rates, fees,
margin (for L/C), duration of credit and term loans (for loans).
 Identifying whether the customer are in the Strategic Clients Group of the
center.
 Control and submit the result of assessment/re-assessment of granting credit
limit/credit. The Head of particular customer department controls the documents,
appraisal reports and gives proposals, submits the competent authorities to decide.

2.3. Independent evaluation of credit risk (in case requested)
Conductors are staffs, the leader of Risk Management Department. They will:
 Check documents provided by the Customers Department and collect information
and coordinate with Customer Department in contact with customers (if
necessary);

9


 Officers at Risk Management Department evaluate credit risk, detect signs of risk,
risk assessment, proposed risk mitigation measures; prepare independent appraisal
reports on credit risk.
 The leader of risk management group controls and submits to the competent
authority to consider.
2.4. Approve the credit limit/credit.
Conductors: Competent authorities. (Credit council)
Responsibilities:
 Review and approve granting credit limit / credit in the jurisdiction
 Comply with Regulation Credit Council
2.5. Inform customers of credit limit and update customer data into the
system; Drafting, controlling, completing Credit Contract / The contract of
Guarantee
Conductors: Customers Department; Competent authorities to approve.
 In case of granting credit limit
 Copy and send the reports to related departments to perform; Send the
announcement of granting credit limit to customers – If required by
customers.
 Update and check the updating data into INCAS system
 In case of granting credit
 Drafting the contract on the basis of:

-

Reference form of MB Bank
10


-

In special case of form not found suitably, reaching agreement with
the the legal division and Risk management Department.

-

Complex cases, credit account is of great value, competent
authorities may hire a law firm to draft the contract, to ensure the
legitimate rights of MB Bank

 Control the contract and related documents (if any):
-

Head of Customer Department: Check the content of Draft of Credit
Contract/ The Contract of Guarantee.

-

Risk Management Department and related Departments: contribute
comments about the content of contract under Customer Department
or competent authorities’ request.

-

Customer Department: adjust the draft of contracts.

 Competent authorities: Signing contracts, ensuring compliance with the
provisions of the law, and in accordance with MB Bank content approved.
 Put, control, approve and monitor data into the INCAS program.
2.6. Track and manage credit limit (in case of granting credit limit); Signed
addendums, contract amendments (if any) and adjust credit account information in
INCAS (for with credit)
Conductors: Customers Department
 In case of granting credit limit
 Adjust to raise credit limit – at customer’s request , in accordance with
regulations: conduct from Step 1 to Step 5, to clarify the reasons to adjust
accordingly
 Adjust to lower credit limit according to:
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-

The request from the Headquarter

-

Suggestions from Customer Department based on hazard warning
information, results of internal control, results of monitoring capital
borrowing, customers’ use of loans, results of the inspection team.

-

Conduct from Step 2 to Step 5. Agreement / Inform customers about
credit limit reduction because of objective reasons or customer’s
violating commitments.

 In case of granting credit
 For Guarantees, L/C: Receipt of application for amendment, and check the
accuracy, legality and validity of the modified documents.
-

In case of increasing the value guarantees, L/C: Perform appraisal as
specified in Step 2.

-

Transfer the record to the Exchanges; print results transaction
processing, inspection, and affix and send them to customers as
specified in Step 7.

 Draft, control and sign the contract appendix or amended and supplemented
written to the contract.
 Put, control and supervise the data importing of contract amendments.
2.7. Controlling, monitoring credit
2.7.1. Loan
 Before disbursement
 Customers Department

12


-

Review the contents of the evaluation, providing loans through the
legal records, loan record, settlement loan documents.

-

Check form and the content of Credit Contract/ The Contract of
Guarantee, and data entry of loans.

-

Adjusting, completing the record and submit remedial measures to
the competent authorities to decide.

 Risk management Department: Check and review all risk factors on
customer documents and related documents of loans on the base of
information supplied by Customer Department and other sources.
 Competent authorities: Enhance the methods of controlling and monitoring;
decide, make agreement on, implement the necessary content to ensure
safety of loans and put up solutions in the jurisdiction.
 In the time of disbursement
Checking and reviewing the conditions of disbursement, disbursement content;
handling occurring during disbursements time; adjust the omission and errors;
submit the solutions to the competent authorities to consider and decide ;
Improving monitoring, stop disbursement in case of detecting high risk signs;
decide solution in the jurisdiction.
 After disbursement
 Customers Department will:
-

Control and supervise the process of using loans.

-

Regularly monitor customer's debt, the debt status of the Credit
Contract, classifying debt through lending module of INCAS

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-

At least 05 working days prior to the repayment of principal, interest
(GSO) / 25th of every month (individual), Credit officers inform
customers to arrange a payment, urging customers to repay on time.

-

Inspect the use of loan periodically and irregularly (when detecting
signs of risk).

-

Every 6 months, make comprehensive audit on financial situation,
business activities of the customer, and the progress of plan or
project.

-

Annually, analyze the status of business activities, finance and credit

relations of customers, combined with the analysis of secured debt,
grading and credit rating of the customer. Warning of the risks can
help Manager apply right policies, directions or decisions in handling
credit relations for each customer.

-

Prepare plans and measures to recover the loans for each customer.

-

Check and re-assess secured assets to evaluate the the security of
assets, then apply timely solutions in case the property is not worth
enough to ensure that the current balance.

-

Inspect the mortgaged collateral; review data entry of loans on
INCAS program.

 Risk Management Department: Review and timely detect the risks arising
during the use of loans and the restructuring of the repayment period. Where
errors are detected potential risk, affecting the solvency of customers,
Department prepares reports and submit to the authority for consideration
and decision.
 Debt Management Office
-

Review measures, credit sanctions, collateral settlement, propose
plans, remedies and recovery for bad loans

14


-

Monitor, Supervise dossiers handling risk, interest rate reduction,
debt sale, debt settlement in accordance with the law and MB Bank

-

Propose remedies for each particular case if errors are detected in the
management of loans

2.7.2. Guarantees, L/C
Conductors: Customer Department
Responsibilities: Reviewing total status of finance, business activities of customer, reevaluate secured assets; analyze the status of business operation, finance and credit
relationship, combined with the analysis of secured debt, grading and credit rating of the
customer, or the use of loans if customers have both credit and guarantee, L/C
relationship.
2.8. Debt collection / clearance guarantees / L/C payment and handling arising
Conductors: Customer Department.
 Handling arising
 Loan
-

Restructuring the repayment period, in which the competent officers
will check conditions for the restructuring of the repayment period
and prepare a proposal to restructure the repayment period and
submit to the competent authorities.

-

Handling other arising

-

Manage the bad debt

 Guarantee ( Applied when perform the guarantee obligation)

15


-

Inform customers about receiving payment requirements under
guarantees and commitments to make payments for the guarantee
directed by the required payment

-

If customers do not actively make guarantee payment: Extract
margin accounts, deposit account or to withdraw money from
savings books, valuable papers of customer. And / or debit loan
accounts of customers with overdue interest rate by 150% for current
interest.

 L/C
-

Check and handle documents / electric demanding money

-

Signing Bill of lading / authorization and send documents to the
customer: after the customer has completed the payment procedure /
debentures sign / accept payment L/C operation

-

When the loan is claimed by telegram: Get the inspection form
documents from the International Transaction Center in the same
way as claiming by mails.

-

In case of issuing guarantees of delivery: Transfer documents to
International Transaction Center; Print "guarantee of delivery",
check, sign and seal in accordance.

 Debt Collection
 Monitoring debt collection by the loans at maturity, including principal,
interest and debt charges, notice to the customer on payment of loan are
due.
 The customers will pay for debt by the currency of the loan, otherwise it
must be allowed by the Loan Bank and the debt will be converted at the MB
Bank exchange rate at the time of repayment.
16

 Perform the process of debt collection and accounting for loans.
 Clearance of guarantee commitments
 Check the document of clearance requested, consider the approval.
 Submit the documents with approval of competent authorities to the
Transaction Center.
 L/C Payments / Accept Payment
 Accept deferred payment L/C : Prepare the written request to accept
payments and send to the Transaction Center ; Print out the debt notice,
SWIFT, charge services for VAT invoices delivered to customers.
 Payment L/C at sight: Transfer documents to the Transaction Center;
Disbursements under the credit management profession; Print out the debt
notice, SWIFT, charge card bill for service VAT to customers.
2.9. Closing the credit documents
2.10. Transferring, controlling, recordkeeping
 Make a receipt-delivery note in the delivery and transferring process of file.
 The recordkeeping complies with current regulations for loan, guarantee,
L/C
 Duration of implementation of recordkeeping is performed in accordance
with the guidance of the State Bank and Director on keeping records and
documents.
3. Analysis of loan and credit activities
3.1. Credit balance

17


2010
Credit balance at Operation center

2264.1

Percentage of changes credit balance

2011

2012

2013

2905.4

3695.65

4363.9

28.325%

27.199%

18.082%

Source: Annual report - Operation Center
Unit: Billion VND
Table 4 : Total credit balance of Operation Center from 2010 to 2013

As can be seen from the chart (next page) and the above table, the total of loan
outstanding in Operation Center of MB Bank increased through out the surveyed period
of 4 years from 2010 to 2013. The continual increase derived from some following
reasons:
 MB Bank is always classified as a bank in group 1 - the group has the highest limit

of credit balance increase per year regulated by SBV. This regulation brought the
advantages to MB Bank to lend out easier.
 Interest rate policy also facilitate the increase in credit. In February, 2012, MB
Bank committed to develop some products with attracting interest rates and
sympathized with the corporate to get through the difficulties.5 This is the reason
why despite of a slight decrease in credit balance speed of Operation Center, this
figure was still far higher than the average of the all the banks, which was just
about 7 per cent.6
However, the increasing speed in each year underwent different levels depending
on different situations. In 2013, the credit balance grow rate fell to 18.082 per cent. This
was the popular trend in banking at that moment and Operation center MB Bank was not
an exception. As stated in chapter 1, the bad debt in Mb bank systems in 2013 increased

5
6

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