Nâng cao năng lực cạnh tranh của NHTMCP ngoại thương việt nam trong điều kiện hội nhập quốc tế về tài chính – ngân hàng tt tieng anh

MINISTRY OF EDUCATION AND TRAINING
HANOI UNIVERSITY OF BUSINESS AND TECHNOLOGY
----------------------

VU THI THU HUONG

ENHANCING THE COMPETITIVENESS CAPACITY
OF JOINT STOCK COMMERCIAL BANK FOR
FOREIGN TRADE OF VIETNAM IN TERMS OF
INTERNATIONAL INTEGRATION OF FINANCE AND
BANKING
Major: Business Administration
Code: 9 340 101

ABSTRACT THESIS ECONOMIC WILL

HANOI – 2020


THE WORK WAS COMPLETED AT:
HANOI UNIVERSITY OF BUSINESS AND TECHNOLOGY
Suppervisors:
1. PROF. DR. VU VAN HOA
2. ASSOC. PROF. DR. PHAN VAN TINH
REVIEWER 1: ASSOC. PROF. DR. DAO MINH PHUC
VIETNAM STATE BANK
REVIEWER 2: ASSOC. PROF. DR. NGUYEN TRONG THAN
ACADEMY OF FINANCE
REVIEWER 3: ASSOC. PROF. DR. LE VAN LUYEN
BANKING ACADEMY

The thesis will be defended in front of the University's Thesis Evaluation
Council, meeting at the Hanoi University of Business and Technology
At ……h ……. date ……month…….2020

The thesis can be found at:
- The National Library.
- The Library of Hanoi University of Business and Technology.


INTRODUCTION
1. Urgency of research topics
In developed economies, the banking system has always played an
important role in the development of the economy. Commercial banks not only
ensure capital for production - business, but also act as a bridge between
businesses, the market, the Government and the economies in the region as well
as across the globe. The role of commercial banks has been confirmed to be
indispensable in the modern economy.
Commercial banks exist in a specific environment. To stand firm and
develop, they face many difficulties and challenges. These are difficulties in
business capital, on the level of labor, the operating environment, institutional
arrangements ... Especially management capacity. This is "self-created"
knowledge. No commercial bank fully communicated and "genuinely"
instructed its partners about market experiences. Therefore, commercial banks
must find ways to overcome other commercial banks and do business in the
same area. This is a process of competition within the industry of the
commercial banking system.
Currently, Vietnam's economy has not been fully opened, so the
competition among commercial banks is now mainly within the industry . When
the economy is open completely , competition in the market Vietnam will
regional and advance to the global competition. At that time competition will be

at a higher level and really full of its meaning is fierce competition.
Regarding competition among commercial banks, there have been many
authors and research works. However, the competitiveness of JOINT STOCK
COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - Vietcombank,
in terms of international integration of finance and banking, has not been
studied deeply and comprehensively by many authors.
The author of this thesis finds that the above contents need to be
systematically studied. The purpose to clarify the position and role of the
Vietcombank in Vietnam banking system today. At the same time, clarifying
Vietcombank's competitiveness with domestic commercial banks and its ability
to play on the international playing field.
Regarding the above contents, the author of the thesis emphasizes:
First of all, Vietcombank's role in the Vietnamese economy and with the
current Vietnamese commercial banking system.
Secondly , Analyzing the strengths and limitations of Vietcombank in
terms of financial capacity, management capacity ... and Vietcombank's
competitiveness in the market.
Third, Assess and rate Vietcombank according to the announced criteria of
the commercial banking system in the market.

1


These are basic contents assessing the competitiveness of Vietcombank
and the leading prestigious commercial banks in Vietnam.
Stemming from the above-mentioned reasons, the topic: "Enhancing the
competitiveness capacity of Joint Stock Commercial Bank for Foreign Trade of
Vietnam in terms of international integration of finance and banking", selected
by the PhD student make a PhD thesis topic, which has practical and scientific
significance.

2. Research purpose
Section landing research thesis to make clear the content body of the
following:
2.1. Analyzing the current situation of Vietnam commercial banking
system, focusing on Vietnam commercial bank system in terms of competition
and international integration:
- The role of Vietcombank and Vietnam commercial banking system in
terms of international integration in Finance - Banking.
- The number and types of commercial banks in the internal competitive
conditions.
- The reality of the capital, assets, capabilities science - technology
Vietcombank and Vietnam commercial system available today.
- Vietcombank's management capacity in terms of competition and
international integration.
2.2 . Analyzing Vietcombank's competitiveness in the current conditions of
international integration in Finance - Banking.
2.3 . Researching the state of the State's policies towards the Vietnam
commercial banking system and with Vietcombank in the process of Vietnam's
international integration in Finance - Banking.
2.4. Researching policies of some countries in the region and the World
on enhancing the competitiveness of commercial banks, can refer to
Vietcombank.
2.5. Proposing some solutions to improve Vietcombank's competitiveness
in the context of international integration in finance and banking .
3. Research subject and scope
Subject of study : Vietcombank . With the key contents are:
- Assessing the status of business, financial capacity of VCB in the
context of competition and international integration, VCB's management ability
in competition conditions among commercial banks, VCB's science and
technology capacity, in competitive conditions and international integration of

finance and banking for a period of 5 years from 2014-2018.
Research scope.
2


- Overview of Vietcombank and its development in the period of 2014 2018.
- Vietcombank's position and role in the Vietnamese economy and its
foreign relations.
- Research period: 5 consecutive years: 2014 - 2018.
4. Research Methodology.
- Methodology.
The thesis is studied based on dialectical materialism and historical
materialism.
The research data is based on the reality of socio-economic development
of Vietnam and the World in the period of 2014 - 2018. In which, based on data
on the development of Vietnam's commercial banking system, the focus is on
Vietcombank - object of this thesis.
- Research Methodology .
Gather documents and data related to the subject of the research - VCB,
with the document was officially announced on the mainstream media.
Summary, theoretical system and actual data according to VCB Annual
Report.
Comparative statistics by expert method.
Comments and conclusions.
5. Scientific and practical significance of the research topic.
Firstly , the thesis contributes to clarify the content: the term of
competition, the origin of competition, the competitiveness in general and the
enterprise system in the market economy. Especially in the context of
international economic integration.
Secondly, the thesis stated and analyzed the current situation of

competitiveness of Vietnamese commercial banks and the State's policies
affecting the Competitive capability of the Vietnamese commercial banking
system in the context of international integration in finance - banking.
Thirdly, to study status of VCB's competitiveness in the context of
international economic integration in finance - banking.
Fourthly, the thesis contributes to finalizing the financial policy for the
development of Vietnam's commercial banking system, focusing on improving
Vietcombank's competitiveness, in the context of international integration in
Finance - Banking.
Based on the research results, the thesis proposes a number of solutions to
improve Vietcombank's competitiveness in the current conditions of
international financial and banking integration of Vietnam.
3


6 . Structure of the thesis: The content of the thesis is structured into three
chapters.
Chapter 1.
OVERVIEW OF COMMERCIAL BANK AND COMPETITIVENESS
OF COMMERCIAL BANK IN CONDITIONS OF INTERNATIONAL
INTEGRATION ON FINANCE - BANKING
Chapter 2
CURRENT SITUATION OF BUSINESS AND COMPETITIVENESS
OF JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF
VIETNAM IN CONDITIONS OF INTERNATIONAL INTEGRATION ON
FINANCE - BANKING.
Chapter 3
SOLUTIONS TO IMPROVE THE COMPETITIVENESS
CAPACITY OF JOINT STOCK COMMERCIAL BANK FOR FOREIGN
TRADE OF VIETNAM IN CONDITIONS OF INTERNATIONAL

INTEGRATION ON FINANCE – BANKING.
Chapter 1.
OVERVIEW OF COMMERCIAL BANK AND COMPETITIVENESS OF
COMMERCIAL BANK IN CONDITIONS OF INTERNATIONAL
INTEGRATION ON FINANCE - BANKING.
1.1. COMMERCIAL BANK AND THE ROLE OF A COMMERCIAL
BANK IN THE MARKET ECONOMY.
1.1.1. Overview of the development of commercial banks in the market
economy.
In Vietnam market, commercial banks have developed and built up a
system with the State Bank of Vietnam - responsible for state management in the
field of currency, credit, banking and commercial banks. with non-bank credit
institutions. These institutions are capable of managing money - credit and
banking services in the socio-economic life.
1.1.2. Functions and operations of commercial banks.
1.1.2.1. Functions of commercial banks
In the market economy, commercial banks perform the following
functions here :
i . Credit intermediaries.
Performing the function of credit intermediaries, commercial banks are
the "bridge" between the subjects with free capital and those who need capital
for production - business and investment.
4


ii. Intermediary payment.
Acting as an intermediary for payment when a commercial bank makes a
payment at the request of a customer. Payment transactions of customers arise
diverse, such as payment of goods, services, money transfer ... or enter into the
customer's deposit accounts of receipts - sales proceeds and valid receipts, Other

legal orders of account holder. Performing this function, commercial banks act
as "cashiers" for account holders and follow their orders.
iii. "Money creation" function .
With the function of credit intermediaries and payment intermediaries,
commercial banks have the ability to create credit money, which is the
bookkeeping currency. This currency is shown on customers' payment deposit
accounts, at commercial banks. This amount is part of the amount of money
used in customer transactions and commercial banks.
1.1.2.2. Tasks of commercial banks.
Although in the markets with different levels, the names and contents of
commercial banks' operations have not changed the traditional names and
contents. Therefore, in this thesis, the author still refers to inherent operations of
commercial banks, which are:
i. Capital raising operations.
Capital mobilization is a profession whereby commercial banks gather
idle capital sources in the economy, form a centralized monetary fund to use for
the determined purpose .
ii. Use of funds.
As used funding operations of commercial banks. The capital is mainly
used to carry out lending, investment activities and repaying due debts that
commercial banks have mobilized in advance. Ensuring safety in business, in
which credit security is put first . The above contents are effectively
implemented depending on the management capacity , in which credit
management, is considered above all .
1.1.2.3 . Intermediary payment.
Payment is both a function and a professional of a commercial bank.
Performing this function, commercial banks are the agencies that organize
payment in the economy. Commercial banks apply the most effective forms of
payment to legal entities and natural persons.
1.1.3. The role of commercial banks in the market economy.

The role of commercial banks is evident in the following areas:
1.1.3.1. Commercial banks provide timely capital for the economy.
The timely and timely supply of capital is the most important factor
determining the success of the enterprise's production and business. This is also
a favorable opportunity to promote the development of the economy.
5


1.1.3.2. Commercial banks are dynamic intermediaries between businesses
and the market.
As an institution that provides the most important capital to the economy,
as a bridge between money holders and people who need money, between
businesses and markets, commercial banks are really considered as "midwives"
for development, no of businesses but also of the economy.
1.1.3.3. Commercial banks are the tools of macroeconomic regulation of the
economy .
In a unified economy managed by the Government, commercial banks
must comply with the monetary, credit and banking policies of the State.
Therefore, with the economic development policy, in addition to capital from the
state budget, the Government must use a significant amount of capital from
commercial banks. Investing in economic development with credit capital is a
strategic solution. Therefore, commercial banks must abide by the State's
guidelines. From the reality of all economies, commercial banks are an
important tool of the State to promote economic development.
1.2. COMPETITIVENESS AND SOME CRITERIA FOR ASSESSING
COMPETITIVENESS OF COMMERCIAL BANK
1.2.1. General overview of competition and competitiveness of enterprises.
1.2.1.1. Some views on business competition.
i. The concept of enterprise competition.
There are many definitions of competition. However, the views and

content of competition among entities in the market economy of economists are
similar. In view of the author of this thesis , the above concepts, although given
at different times, but the content, are generally consistent. These concepts are
still used to study competition in the context of the current international market
integration economy.
However, to clarify the content and development of competition in the
trend of international economic integration, this thesis analyzes some contents of
the development of competition in terms of market expansion and development
of enterprises in general and commercial banks in particular.
ii . Competitiveness .
In the framework of this thesis, only limited research on economic
competition of enterprises and in-depth study of competition among commercial
banks, focusing on Joint Stock Commercial Bank for Foreign Trade of Vietnam.
To clarify the content of enterprise competitiveness, the thesis gives an overview
of the competitiveness of economic sectors, namely.
- National competitiveness.
Compiled from many different perspectives, according to the author, this
thesis competes enterprises in terms of development and international
6


integration, which can be understood as follows: Business competition is a
competition between businesses that produce the same goods or provide a
service in the same market with specific production and business secrets and
superior management capacity and the ability to apply Science - Technology
effectively ... to gain higher market share, with the goal of maximizing profits.
- International competitiveness.
Unlike national competition, international competition is a demonstration
of the nation's capacity in the international arena.
iii. Factors determining competitiveness.

- Assessment of national competitiveness.
So far, there are still many views on the factors that determine national
competitive competence. But there were some relatively unified opinions on 8
factors that play a decisive role for the national competitive competence,
namely: (1). The degree of openness of the economy ; (2). The role of the
Government ; (3). Finance ; (4). Science - Technology ( Science - Technology ) ;
(5). Infrastructure ; (6). Administrative capacity value ; (7). Labor; (8).
Institutions.
- Assessment of enterprise competitiveness.
To assess the competitiveness of enterprises need to consider and analyze
the basic elements of the object, then rank the competitiveness of this object.
The elements of the object of interest, that is:
+ Field of Production - Business and the size of the business .
+ Financial capacity, in which equity plays a crucial role .
+ Management capacity .
+ Scientific - technological capacity.
+ Quality of human resources ...
1.2.1.2. Development of economic competition.
i. Origin of competition
Human society, in the economy, among businesses ... also has similar
"struggle" processes. But it is not a struggle to survive as in nature. Which is
competing to survive and grow .
ii. Definition of competition.
Competition takes place in almost all areas: natural, economic, social ... so
the content of this terminology is wide and complex. Therefore, in this thesis, it
is not possible to cover all fields, but only limits some basic contents of
economic competition. Mostly competition between businesses, including
commercial banks.

7

From the statement above, in view of the thesis , the competitive economy
can be understood as follows:
Economic competition is a competition between entities, using specific
tools (tactics) to win the most profitable Production - Business conditions, in
order to gain absolute market share, with the utmost goal of profit maximization
Economic competition has broader content than business competition.
Along with economic development and market expansion, economic
competition is also expanding, developing and increasing at a higher level.
1.2.1.3. Classification of economic competition.
Competition classification is a combination of several criteria that clarify
the scope, level and nature of enterprise competition. In this thesis, only the
most general content, without in-depth analysis of business ethics in
competition. For the reasons mentioned above, enterprise competition is
classified according to the following criteria:
i. According to economic sector.
This type of competition is divided into two categories, intra-industry
competition and competition between industries.
ii.The level of competition.
By level, or level of competition , competition is divided into two
categories: perfect competition and imperfect competition.
iii. According to business ethics . [ 4 4 ]
According to business ethics, competition in economics is divided
into two types: Legal competition and illegal competition.
iiii. According to the market. [ 4 5 ]
Compete in market or place of business . Kind of competition is divided
into two categories: competition within the national and international
competition.
1.2.1.4. Competitiveness of enterprises in the market economy.

i . Overview of Competitive capability of enterprises .
Competitiveness of a business, is a combination of many different
factors , or tactics. Combined are the factors of "material and intellectual". These
two elements are initially of equal value. But in the development of competition,
"intelligence" has a superior value. However, the author of this thesis thinks that
the intellectual factor does not have a "universal" measure, so a visual
comparison of "material" capacity will be a method of comparing and
evaluating the Competitive capability of this thesis..
ii . Some basic criteria to assess enterprise competitiveness.
- Financial capacity.
8


Financial capacity is expressed by the total value of assets, used in the
business of the enterprise, in which equity plays a core role.
- Scientific and technological capacity.
Scientific and technological capacity is the ability to apply the latest
scientific and technological achievements to the production and business process
of a business at a given time.
- Business administration capacity.
Corporate governance capacity is overall management solutions
treatment, in order to achieve high efficiency in production - business. The
operation of each business consists of many stages, connected by the system,
from the beginning, until the product is completely consumed.
- Quality of human resources.
The quality of human resources is a combination of criteria showing the
professional competence, job proficiency and productivity of each employee ...
with assigned tasks.
1.2.2. Banking Competition and some
competitiveness of Commercial Banks.

criteria

to

evaluate

the

1.2.2.1. Origin and form of competition among commercial banks.
i. Origin of commercial banks competition.
Content competition among industries, in this thesis, the author mentioned
in section "1.2.1", so in this section, the author only mentioned competition
"within the banking industry".
ii. Competitive development among commercial banks.
Competition among commercial banks, is a form of competition within
the industry. The objective of this type of competition is to find a high return,
with limited time and amount of capital.
iii. Competitive forms of commercial banks.
Commercial banks in the market economy development, although the
investment field are not the same, but revolve around a fixed axis is monetary,
credit and services bank. The tactics that commercial banks implement are not
the same, but are aimed at increasing profits in a finite time with a limited
amount of investment. The current form of competition among commercial
banks is:
- Competing interest rates.
- Expanding the operational network.
- Competition for service quality.
1.2.2.2. Some criteria to evaluate the competitiveness of commercial banks .
i. Financial capacity.

9


ii. Scientific - technological capacity .
iii. Business administration capacity.
iv. Quality of human resources.
v. Annual sales and profit after tax.
1.2.2.3. Meaning to improve the competitiveness and the downside of this
process .
1.2.2.3.1. Competition in commercial banking system .
1.2.2.3.2. Competition among businesses in the economy.
1.3. THE IMPACTS OF INTERNATIONAL INTEGRATION ON
FINANCE - BANKING ON COMPETITIVENESS CAPACITY OF
VIETNAMESE COMMERCIAL SYSTEM.
1.3.1. Basic content of International Integration on Banking - Finance.
1.3.1.1. Overview of international economic integration.
Economic integration International are the agreements open markets for
goods - service, uniform tariff, free movement of capital, banking services ...
based on the principle of consensus, between two or more countries.
- Basic content of international economic integration.
International integration of Finance - Bank as bargaining economy financial, under which a number of institutions, commercial banks of the
country, is entitled to do business in the country in the other, on the principles of
the agreement between states national and international.
1.3.1.2. The meaning of international integration on Finance - Banking.
Firstly, international integration to the Bank is the basis for progressing to
financial integration.
Secondly, international integration in Finance - Banking, on the basis of
large capital created, used dynamically, with a large "frequency", created
conditions for industry - trade to be eligible for development.
Thirdly, international integration in Finance - Banking is the basis for the

domestic commercial banking system to access to international banks.
1.3.1.3 Barriers in international integration.
International economic integration with bilateral or multilateral
agreements has been signed with high consensus, but not yet completely
favorable in the implementation of the agreements.
1.3.2 Vietnam's viewpoint in International Economic Integration. [ 64 ]
The concept of international economic integration is consistent from the
Party, the Government to the entire people, including businesses, entrepreneurs,
intellectuals ... With the viewpoints and actions in recent years, Vietnam has
10


achieved successes. encouraging on the path of international economic
integration.
1.3.3. The impact of international integration on banking - finance on
Vietnamese commercial banking system.
1.3.3.1. Contribute to innovating the economic thinking of Vietnam's banking
system.
1.3.3.2 Orientation for business innovation and service in the commercial
banking system.
1.3.3.3. Enhance the position of Vietnamese commercial banks in the
international arena.
1.4 EXPERIENCES
IN
RAISING
COMPETITIVENESS
COMMERCIAL BANKS IN SOME COUNTRIES IN THE REGION.

OF

1.4.1. Business administration model of some commercial banks.
1.4.1.1. The China Construction Bank (CCB)
1.4.1.2. The Development Bank of Singapore Limited (DBS).
1.4.1.3. Experience of some Asian countries on reforming commercial banks
in terms of development and competition.
a/. Experience of Thailand on restructuring commercial bank system.
b/. Experience of Malaysia .
c/. Restructuring the banking system in Korea.
1.4.2 Experiences for VCB
Experience from Thailand, Malaysia and South Korea on the reform of
commercial banking system, can give Vietnam some experience in managing its
commercial banking system.
Chapter 2:
CURRENT SITUATION OF BUSINESS AND COMPETITIVENESS OF
JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF
VIETNAM IN CONDITIONS OF INTERNATIONAL INTEGRATION ON
FINANCE - BANKING
2.1. OVERVIEW OF THE FORMATION AND DEVELOPMENT OF
VCB.
2.1.1. Construction and development process [ 72 ]
Joint Stock Commercial Bank for Foreign Trade of Vietnam - VCB, is one
of four commercial banks in the top group of Vietnam - Agribank, Vietinbank,
BIDV and VCB. VCB is a reputable commercial bank. Being a commercial
bank known by many countries in the region and the world with reliable
11


international business function, being a good partner of many commercial banks
in the world.
2.1.2. Organizing committee.

- International transaction name JOINT STOCK COMMERCIAL BANK
FOR FOREIGN TRADE OF VIETNAM
2.1.3. Functions and duties.
Tasks and functions of VCB's components are designed according to the
model of advanced commercial banks in the region and the World . Components
in the organizational structure, approved by the State Bank of Vietnam , become
the organizational structure today. Duties and functions of the parts are clearly
defined . Including: i. General Meeting of Shareholders; ii. Board of
Directors (BOD); iii.Banning board.
Besides general organizational models mentioned above, vertical, VCB
organized civil apparatus model management reasons at the basis of main and
each detailed branch. This organizational model, has been standardized by VCB.
2.2. BUSINESS SITUATION OF VCB PERIOD 2014 - 2018
2.2.1. Credit business.
Credit operations are divided into: capital mobilization and lending,
investment. In the period of 2014 - 2018, the business results of VCB's credit
business showed:
2.2.1.1. Capital raising operation.
In the period of 2014 - 2018, the growth rate of VCB's mobilized capital,
achieved positive results, according to [B2.3] comparison between years
showing the results of capital mobilization of VCB, the years always growing:
CREDIT BUSINESS OF VCB PERIOD 2014 - 2018 [ B 2. 3]
Unit: VND Billion
Year
Criteria

2014

2015

2016

2017

2018

Average

Capital raised from the
422,204 500,528 600,737 726,734 1,010,511
economy (A + B)
Compared to the previous
year (%)
(A) Capital mobilized
from economic
organizations
Proportion (%)

27.08

18.5 0

20.02

20.17

195.981 224.731 268.049 328,484
46.42

44.90

12

44.62

4 5. 20

39.04

19.78

472.919
46.80

45.58


Compared to the previous
23.18
year (%)

14.67

19.28

20.90

(B) Capital mobilized
226.222 275.798 332.688 398.250
from the population
Proportion (%)

39.0

17.32

537.592

53.58

55.10

55.38

54.80

53.20

54.42

Compared to the previous
30.66
year (%)

21.91

20.63

19.70

34.90

22.72

Loans outstanding
overall (1 + 2)

323,338 387,152 460,808 530,821

Compared to the previous
17.87
year (%)

19.74

19.03

15.10

(1) Outstanding debt of
271.604 308,947 344.684 401.201
financial institution
Proportion (%)

616,948
16.20

17.33

478.135

84,00

79.80

74.80

75.60

77.50

83.83

Compared to the previous
14.60
year (%)

13.75

11.57

16.30

19.10

13.88

(2) Outstanding loans to
51.746
natural persons

77,831 116.124 129,520

Proportion (%)

16.00

20.20

25.20

24.40

22.50

16.17

Compared to the previous
38.88
year (%)

50.41

49.20

11.50

7.10

36.23

138,813

(Source: Annual report of VCB in the years 2014 - 2018)
2.2.1.2. Lending service.
Outstanding loans of VCB in the period of 2014 - 2018, the speed of
continuous increase. The following year is higher than the previous year. The
lowest outstanding debt in 2014 - 323 338 billion VND. The highest outstanding
loans in 2018 - 616,948 billion VND. The average growth rate of outstanding
loans in the period of 2014 - 2018 reached 17.33% / year. In general, capital
mobilization and outstanding loans of VCB still grew steadily. Demonstrating
the competitiveness of this commercial bank has reached a fairly high point,
attracting customers, recorded in the Vietnamese market.
2.2.1.3. Bad debt.

13


BAD DEBT OF VCB FOR THE PERIOD 201 4 - 2018 [ B 2. 5]
Calculation unit: VND billion
Year
Criteria
Bad debt (%)

2014

2015

2016

2017

2018

2.31

1.79

1.46

1.1

<1.0

(Source: Annual report of VCB during 2014-2018)
According to the table above, the bad debt ratio tended to decrease
gradually from VND 2.31 billion in 2014, to less than 1 billion in 2018. The
above reported figures show that VCB's credit management results in the period
of 2014 - 2018 are very positive.
2.2.2. Banking services.
Banking service is a derivative operation of a commercial bank, in the
context of development of science - technology and customer needs in a market
economy. Services offered by commercial banks are divided into two categories
- wholesale and retail services.
2.2.2.1. Credit services.
VCB's credit services are analyzed on two components of credit
operations, namely capital mobilization and lending, in the latest two years 2017
and 2018, separately analyzing each block, which the retail sector surplus and
lack of capital in wholesale sector. The situation of "excess, lack" of mechanics
as above is normal. VCB may adjust by operations.
2.2.2.2. Card service of VCB

The card service of VCB has been continuously and steadily growing in
recent years. Especially, the international card business, from the right place
through the correspondent banks, to VCB has full autonomy in issuing, offering
and paying.
2.2.2.3. Electronic banking services.
To increase market share of electronic banking, VCB has promoted the
utilities of the above services to customers in Vietnam market. Since launching
the service in 2009, with the number of 1.8 million customers, it has increased to
9 million customers in 2016. By 2018, it reached 13 million customers. With an
average growth in the period of 2014-2018 reached 42% / year.
2.2.2.4. International money transfer service .
Recently, each year the overseas remittance service brought VCB a
turnover of 1–1.6 billion USD. The average growth of remittance revenue of
VCB reached 6% / year. In particular, in 2016, VCB remittance amount
increased by about 7%, reaching 1.64 billion USD.
2.3 FINANCIAL CAPACITY AND BUSINESS MANAGEMENT OF VCB.
14


2.3.1. Financial capacity of VCB in the period of 2014 - 2018.
In the last two years, equity and liabilities of VCB have continued to grow
steadily:
OWNERS 'EQUITY AND LIABILITIES OF VCB IN THE PERIOD
2017 - 2018 [B2.8]
Calculation unit: VND billion
2017

Year
Criteria

2018

Compare

Amount Proportion Amount Proportion Amount of
Ratio (%)
of money
(%)
of money
(%)
money

1. Equity capital

51,289

5.0

60,788

5.7

9,499

18.52

2. Liabilities

981,023

95.0

1,010,511

94.3

29,488

3.0

1,032,312

100

1,071,299

100

38,987

3.8

3. Total Business
Capital Liabilities and
Equity

(Source: VCB Balance Sheet dated December 31, 2018)
Figures in the Balance Sheet of 2017 and 2018 show that VCB's equity
only accounts for 5.0 - 5.7%, while "liabilities" account for 94.3% - 95.0% is
very high. This is a weak point of VCB's financial capacity at present.

2.3.1.2. Distribution of equity to commercial banks and credit institutions.
VCB always focused on ensuring the maximum safety of business capital,
under the "risk dispersion" approach. Therefore, in parallel with investing capital
in a number of other commercial banks, VCB also established a number of
subsidiaries, to trade in traditional and newly launched services on the
Vietnamese market.
2.3.1.3. Evaluation of VCB's financial capacity.
In order to evaluate VCB's financial capacity and performance, it is
necessary to compare with other banks in the same block. Through this result
will have to comment objectively on VCB, and evaluate solutions that VCB has
been carried out, overcoming the existence , in the business to become
commercial banks in the top first large commercial banks in Vietnam The
current.

15


SOME FINANCIAL INDICATORS OF THE TOP 4 COMMERCIAL
BANKS IN VIETNAM [ B 2. 10]
(Unit: VND billion)
Criteria

VCB

BIDV

Vietinbank

Agribank

The total value of
assets

787,907

1,006.404

948,699

1,001,204

Equity

48,102

44,144

60,399

49,231

Outstanding credit

460,808

723,697

721,798

791,450

Capital raised

600,737

797,689

870,163

924,000

Profit before tax

8,523

7,709

8,569

4,212

Bad debt (%)

1.46

1.95

0.93

1.89

ROA (%)

0.94

0.67

1.00

0.36

ROE (%)

14.69

14.70

11.80

7.45

CAR (%)

11.13

> 9.0

10.40

6.70

LDR (%)

76.71

80.85

82.95

81.58

Profit after tax

6,851

6,229

6,858

3,388

(Source: Annual Report & Financial Statements of 4 Commercial Banks in 2016)

2.3.2. VCB's governance capacity.
2.3.2.1. Managing human resource
Most of the management staff of VCB have a Master's degree or higher.
Of which over 70% graduated from universities, at prestigious universities at
home and abroad. Staff quality is controlled input, according to criteria that are
standardized by the advanced level of Vietnam and the leading international
commercial banks.

2.3.2.2. Business administration.
Business management is essentially seeking solutions to ensure safety and
efficiency in the business activities of economic entities. In fact, the business of
VCB in the past decades has chosen the right direction, which is the earliest
approach to the "business management technology" of advanced commercial
banks in the world.
2.3.3. Scientific and technological capacity.

16


VCB's science and technology capability is highly appreciated among
Vietnamese commercial banks. VCB has a modern and uniform information
technology (IT) infrastructure system, which is remarkable in the system of
Vietnamese commercial banks.
2.3.4. Trademark of VCB .
VCB's brand name has been affirmed in Vietnam market. The overall
brand and each sector of VCB have been recognized and honored by many
international Finance - Banking organizations.
SOME FINANCIAL INDICATORS OF VCB - 2018 [ B 2. 12]
(Unit: billion USD)
Criteria

Value

Equity

2.4 billion USD

Market capitalization

8.7 billion USD

The total value of assets 46.2 billion USD
Outstanding credit

24.2 billion USD

Total raised capital

31.5 billion USD

Profit before tax

506 Million USD

Card issuing service

16.3 Million cards issued

ATM & POS network

2487 ATM & 47,030 POS

Electronic customer
service

13.1 million customers use

Foreign currency

trading

45.1 billion USD

International payments $ 69.4 billion
(Source: VCB Report - May 2018)
The finance - business indicators in the table above, show that VCB is a
brand capable of operating in a market economy. VCB's competitiveness is
good. This brand has always been "fostered and embellished" to develop
sustainably in competition and international integration .
2.4. ASSESSMENT OF BUSINESS PERFORMANCE AND COMPETITIVENESS
OF VCB (2014 - 2018).
2.4.1. Business efficiency.
17


2.4.1.1. Business strengths of VCB.
INCOME COST AND PROFIT OF VCB (2014 - 2018) [ B 2. 13]
Unit: Billion VND
Year

2014

2015

2016

2017

2018

1 / Total operating
income

17,304

21,202

24,880

28,859

38,644

Compared to the previous
year (%)

11.59

22.53

17.35

15.90

33.90

2 / Net interest from
lending

12,009

15,453

18,528

17,208

25,415

Proportion (%)

69.40

72.88

74.47

59.62

65.76

73.73

Compared to the previous
year (%)

11,38

28.68

19.90

0.92

47.60

16.36

3 / Net interest from
service activities

1,517

1,873

2,107

5.115

6,716

Proportion (%)

8.77

8.83

8.47

8.69

17.37

9.30

Compared to the previous
year (%)

-6,32

23.47

12.49

242.7 6

31.90

7.53

4 / Total cost

-6,849

-8,306

-9,95

-13,228 -11,650

9.69

21.27

19.79

32.94

0.88

5 / Profit before risk
provisions

10,436

12,896

14,929

11,021

18,016

Compared with the last
year (%)

12.66

23.57

15.76

-0,738

63.40

Criteria

Compared to the previous
year (%)

Average

20.25

14.10

14.15

(Annual report of VCB)
2.4.1.2. Profitability and income of VCB.
The profitability and income of business entities are an important criterion
to assess the viability and development of enterprises in a market economy. The
profitability and income of an enterprise is a combination of many components,
in which business capital and management capacity of business leaders are
ranked first. With the above reasons, when researching the competitiveness of
VCB today, it is impossible not to analyze the above factors.
About profitability.

18


Through the analysis of performance and business safety indicators, all
four criteria: ROA, ROE, CAR and LDR, Joint Stock Commercial Bank for
Foreign Trade of Vietnam, are all at a level exceeding the prescribed level of the
State Bank of Vietnam. VCB is a commercial bank in the direction of sustainable
development.
2.4.1.3. Competitiveness of VCB.
2.4.2 Some existences and limitations.
- The total value of VCB's assets is still low. In terms of competition,
business capital is a very important factor. Low capital means restrictions on
investment and business expansion.
- Capital mobilized is low and so outstanding loans of VCB are low.
- VCB's profit before tax is not much higher than Vietinbank , lower than
that of BIDV and Agribank.
- VCB not have enough capacity financing and the " necessary condition "
for application use information technology and applying these advances in
governance of commercial banks in the world advanced to the bank's business
administration.
2.4.3. Cause of the above situation.
- The business autonomy of VCB is limited.
- The charter capital of VCB is very low, but it is slowly supplemented .
- VCB has not been proactively calling for a "strategic shareholder", so
the ability to increase equity and therefore expand investment, implement new
technologies in business management faces difficulties.
The shortcomings and shortcomings of VCB above, need to have
solutions, so that VCB will become a strong brand in the Vietnamese market
in the near future.

19


Chapter 3 :
SOLUTIONS TO IMPROVE THE COMPETITIVENESS CAPACITY OF
JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF
VIETNAM IN CONDITIONS OF INTERNATIONAL INTEGRATION ON
FINANCE - BANKING
3.1. INTERNATIONAL INTEGRATION ON FINANCE - BANKING IS A
STRATEGIC ORIENTATION OF VIETNAM.
3.1.1. Vietnam's international integration process on banking and finance.
3.1.1.1. Process of implementation.
Although international economic integration has many difficulties, but in
integration , individuals have many advantages in business and enjoy many
other benefits. International integration on Finance - Banking gives commercial
banks the right to participate equally in the currency trading market, the market
for trading of banking services, regionally and internationally, in accordance
with national laws and international practices. This is the liberalization and
expansion of the banking market in line with international commitments.
3.1.1.2. Vietnam's commitments in the integration process of Banking Finance
To implement the integration of Economics International fair, responsible
and efficient, Vietnam has committed to all partners in each individual
agreement. Some basic agreements have been confirmed on the International
arena, including:
Agreement on Liberalization of Financial Services;
Agreement on Capital account Liberalization.
3.1.1.3. Achievements in the process of international integration.
Vietnam has become an active member of ASEAN and many EuropeanAmerican countries, has seen its position - an important role of Vietnam in the
region and in the international arena. From WTO members, to the position in
the "Comprehensive and Progressive Agreement for Trans-Pacific Partnership CPTPP", Vietnam has a solid position in the international arena.

3.1.2. The development of the capital market.
The capital market is one of the important financial centers of each
country. Having built a market, but without international capital exchanges, the
role of this Market has not been effective for the domestic economy. Therefore,
every country is looking for agreements to access international capital markets,
connecting and seeking capital from outside markets. Thanks to the connection
with other countries, it has facilitated the enhancement of liquidity in the

20


domestic market. Simultaneously with new capital flows, creating high capital
flows, meeting the needs of economic development
3.1.3. Forming ASEAN + 3 bloc.
The Chiang Mai Initiative Multilateralisation (CMIM) initiative has been
successful and the ASEAN bond market has promoted deeper participation in
the ASEAN +3 bond market - including ASEAN countries and three countries,
namely China, South Korea and Japan. With this success, in May 2010, the
Credit Guarantee and Investment Facility (CGIF) was established to support
the issuance of corporate bonds in the ASEAN + 3 region.
3.2. OBJECTIVES OF VCB TO MEET COMPETITION AND
INTERNATIONAL INTEGRATION ON FINANCE - BANKING
Vietcombank is one of the top four banks in the Vietnam. The equity of
this bank is about USD 2.4 billion; Market capitalization of 8.7 billion USD.
This bank has a wide network of branches throughout Vietnam and with over
1856 correspondent banks in the international market ... However, in the
integration, the total value of VCB's existing assets, compared to international
commercial banks , especially compared to some commercial banks in the
"ASEAN + 3" block, the financial capacity of VCB is very limited.
In order to truly integrate with the region and the World, ensuring

successful competition on the "home market" and on the international arena,
VCB needs to have a strategy, improve its financial and governance capacity in
all aspects. :
•

Improve financial capacity to preserve and expand business market .

Innovating the management method in accordance with the development
of information technology in the context of international integration in
Finance - Banking.
•

Innovating business products in line with market demands in digital
technology.
•

3.3. SOLUTIONS TO IMPROVE THE COMPETITIVENESS OF VCB IN
CONDITIONS FOR INTERNATIONAL INTEGRATION ON FINANCE BANKING
In order to meet the expectations in the world's top "Dynamic and
Effective Business", the solutions need to be implemented immediately
according to the roadmap, namely:
3.3.1. Improve financial capacity.
VCB's financial capacity is the combination of financial resources,
expressed in cash, created by VCB from legal sources and used in business
according to the provisions of law.

21


For the amount of financial strong enough , actively carry out business

services, VCB need to actively focus on finding sources of capital to increase
the types of business, such as :
3.3.1.1. Increase equity.
3.3.1.2. Implement the competitive capital mobilization policy.
3.3.1.3. Doing joint venture with commercial banks in the region and in the
world.
3.3.2. Improving the efficiency of lending and investment.
3.3.2.1. Investing in projects.
3.3.2.2. Improve the efficiency and safety of production - business loans.
3.3.2.3. Solution to expand market share of retail banking services.
3.3.3. Solutions to improve governance capacity.
Commercial bank management , an advanced control method according
to the socio-economic development, ensures the stability of the commercial
banking system of each country and globally.
In the context that Vietnam is integrating deeply into the World of Finance
- Banking, VCB has prepared itself an equipment to cope with these changes,
which is to improve governance. Administration of VCB, is the type of
multimodal governance, that is:
3.3.3.1. Management of business capital.
3.3.3.2. Managing business relationships.
Administration of business relations of commercial banks, which are the
measures to classify and select business partners, to determine the level of
business cooperation for each type of service, in the development stages .
Managing business relationships includes the core content, which is:
- Select partners by region and business area.
- Choose customers who perform each type of business service.
- Select the object and level of business cooperation.
The above contents are expressed in the business "strategy" of VCB. This
strategy is basically public. But specific cooperation partners and
implementation content, it may be uncommon for VCB documents.

3.3.3.3 Manpower management.
Human resources is a decisive factor in winning all business activities and
socio-economic development, including the operation of the banking system.
VCB is well aware of this. Since its inception, especially in the context of
competition and international integration, VCB leaders have paid great attention
to training source staff for their fields of operation.
22


3.3.4. Computerize management and business services.
3.3.4.1. Meaning of computerization with commercial bank governance.
Information technology will connect this difference into a multi-colored
picture, but can understand and help each other develop together.
Despite the connection by high technology, countries, businesses and
individuals cannot wait for all conditions to apply modern science to the
production and business process. The world and in every country , do not wait
for "slow individuals" in the trend of "development and integration".
3.3.4.2 Current situation of information technology application at VCB
Enterprises Vietnam, including VCB has been ready with the countries in
parallel on the road "international integration of Finance - Bank". However,
when testing its facilities, VCB still lacks many conditions to enter this vibrant
international integration roadmap. With the traditional method "running and
queuing", VCB has achieved certain successes on the path of international
integration, which started several decades ago.
3.3.4.3 Method of applying information technology to governance at VCB
For VCB, in order to ensure safety and sustainable business development,
information technology solutions need to be implemented in two directions:
Firstly, prevent redundancy against network attacks.
Secondly, use the Crowdsourcet Security method.
3.4 CONDITIONS FOR IMPLEMENTATION OF SOLUTIONS.

3.4.1. With Congress.
Originating from the recent practice of managing credit institutions in
Vietnam, in the course of researching business activities of commercial banks,
the author of this thesis has a number of recommendations to the National
Assembly - the governing body highest, on some content related to the activities
of Vietnamese commercial banks.
3.4.2 Recommendations to the Government.
3.4.2.1. Withdraw state capital from commercial banks.
3.4.2.2. National Monetary Policy Making.
3.4.3. Recommendations to the State Bank of Vietnam.
•

Formulating and implementing policies on interest rates to mobilize
capital in different periods.

•

Establishment of Competition Regulation in Vietnam commercial banking
system.

•

Receiving and using new banking technology.

•

Building a network security system for Vietnamese commercial banks.
23