LV thạc sỹ_Credit risk management of Agribank

FOREWORD
From the point of view of economic growth and development, Vietnam has
achieved significant progresses in the last two decades. The living standard has
been improved remarkably and the national social and economic achievements
are obviously quite impressive. One of the main drivers of the economic
growth and development is economic reform, initiating the transformation from
the centrally planned economy into market economy with socialist orientation.
The financial sector plays a key role in the efforts to reform Vietnam’s
economy; the formation of a market-oriented financial sector has significantly
improved capital mobilization, diversification of banking services and
reasonable allocation of different economic resources. The current and future
financial reforms are expected to bring in deep changes that will create a more
suitable economic management model in Vietnam.
The banking system, as the blood vessel system of the economy, always
plays a very critical role. Vietnam’s banking system in recent years has
achieved encouraging results such as contributing to the stability of and
restraint on inflation and the effective implementation of the national monetary
policies… However, under the market economy, business risks, particularly
banking risks, are unavoidable since they may result in domino effect, widely
spread with increasingly sophisticated symptoms. The collapse of the banking
system may have negative impact on the whole socio-economic and political
life and may expand past the boundaries of a nation to reach a regional, or even
the global scale.
Given the integration trend, banks and financial institutions must always
cope with competition and many different types of risks. In Vietnam, since the
starting point of local banks is quite lower than that of the regional average,
development and profit are given the highest priority. This leads to the situation
that risk management of Vietnam’s local banks is almost ignored without
adequate and professional investment. That’s why bad loans and other
problems due to uncontrollability have not been addressed in almost all local
1|Page