LV Thạc sỹ_Imporving short term loan quality at Agribank north hanoi branch

NATIONAL ECONOMIC UNIVERSITY
BUSINESS SCHOOL

Topic:

IMPROVING SHORT – TERM LOAN QUALITY
AT AGRIBANK NORTH HANOI BRANCH
Bachelor of Business Administration in English (E-BBA) Thesis


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TABLE OF CONTENTS

ACKNOWLEDGEMENT
EXECUTIVE SUMMARY.....................................................................................1
LIST OF TABLE......................................................................................................3
LIST OF FIGURES.................................................................................................4
INTRODUCTION...................................................................................................5
1. Rationale................................................................................................................ 5
2. Research objective.................................................................................................5
3. Research methodology...........................................................................................5
4. Research subject and scope....................................................................................6
5. Thesis structure......................................................................................................6
CHAPTER I: OVERVIEW OF SHORT – TERM LOAN OF COMMERCIAL
BANKS.....................................................................................................................7
1.1. Definition and basic activities of commercial bank............................................7
1.1.1. Definition.........................................................................................................7
1.1.2. Basic activities of commercial banks...............................................................7
1.2. Short-term credit activity....................................................................................9
1.2.1. Short-term fund and demand for short-term fund of companies......................9

1.2.2. Feature of short-term loan................................................................................9
1.2.3. Forms of short-term loan...............................................................................10
1.2.4. Short-term loan procedure.............................................................................13
1.3. Short-term loan quality.....................................................................................14
1.3.1. Criteria to evaluate short-term loan quality....................................................14
1.3.2. Factors that affect quality of short-term loan.................................................17
CHAPTER II: ACTUAL CREDIT PERFORMANCE ON AGRIBANK
NORTH HANOI BRANCH..................................................................................19
2.1. An overview Agribank......................................................................................19
2.2. Agribank North Hanoi branch...........................................................................21
2.3. Comment about short-term loan activity at Agribank North Hanoi branch:......30
2.3.1. Achievements.................................................................................................30
2.3.2. Weaknesses and reasons:...............................................................................31


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CHAPTER III: SOLUTIONS TO IMPROVE THE SHORT – TERM LOAN
QUALITY AT AGRIBANK NORTH HANOI BRANCH..................................33
3.1. Orientation of Agribank North Hanoi about credit activity and increasing credit
quality: ...................................................................................................................33
3.1.1. Orientation of Agribank North Hanoi about credit activity............................33
3.1.2. Orientation of Agribank North Hanoi about increasing credit quality...........33
3.2. Solutions to improve the short-term loan quality at Agribank North Hanoi
branch ...................................................................................................................34
3.2.1. Diversify short-term loan...............................................................................34
3.2.2. Increase quality of collecting information process and analyzing process:....34
3.2.3. Restructuring outstanding loan:.....................................................................35
3.2.4. Lending..........................................................................................................35
3.2.5. Debt recovering.............................................................................................36

3.2.6. Increase quality of service and employee training.........................................36
3.3. Recommendations.............................................................................................36
3.3.1. Recommendations for Agribank North Hanoi branch:...................................36
3.3.2. Recommendations for State Bank of Vietnam...............................................38
3.3.3. Recommendations for customer:...................................................................38
CONCLUSION......................................................................................................39
REFERENCES......................................................................................................40


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ACKNOWLEDGEMENT
First, I want to express my thanks to the faculty members of the EBBA
program at the Business School of National Economics University, the place that
have given me valuable knowledge to complete 4 years of university.
Especially, I would like to thank my supervisor Mrs Le Thi Bich Ngoc, Ph.D.
Her guidance and recommendation has helped me a lot in finishing this thesis. With
her instruction, I have completed my thesis more.
Last but not least, I want to thank all my family members include my 1 year
old nephew, for helping and encouraging me for 22 years.


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EXECUTIVE SUMMARY

In recent years, the worldwide baking industry has been sour and Vietnam’s
is not an exception. The bad results of long-term and mid-term loan has started
reflecting in the financial report which cause high bad debt rate for many banks, the
bad debt rate in the banking industry is 8.6% to 10% of total outstanding loan which

equal to 2.5 – 2.8 million billion VND. As a result, bad debt rate of banks has been
a hot topic of society and concerned by many people. Agribank has also met
difficulties in last year when their bad debt rate was 3.8% - 3.9%. Therefore credit
activity of banks has met more challenges and their duty is raising credit quality.
This research will give a theoretical overview of commercial banks and
evaluate real situation of Agribank North Hanoi branch. Based on this evaluation, I
will identify strengths and weaknesses of credit activity. After analyzing actual
business of Agribank North Hanoi branch, I have found out that one of their
weaknesses is short-term loan quality. In 2010, the bad debt rate was only 2.39%
which is below 3% and accepted by State Bank of Vietnam. However, short-term
loan bad debt accounted for more than 70% of total bad debt and it is a hot issue
that the branch has to solve immediately. Based on the causes that the research has
found out, I will suggest some solutions to improve the short-term loan quality of
Agribank North Hanoi branch.
To analyze the actual credit performance of Agribank North Hanoi branch, I
will base on their financial report in 2 years 2009, 2010, some standards in the
banking industry and other sources of information.
The research is aimed to complete following objectives:
-

Reviewing theoretical background on commercial banks and their business
or product as well

-

Analyzing current performance of credit activity of Agribank North Hanoi
branch to find out their problems


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-

Identifying the reasons and causes for their problems

-

Giving some solutions and recommendations to solve the problem
My research has found out some key weaknesses of Agribank North Hanoi

branch:
-

Low short-term loan quality

-

Not effective credit procedure
Based on the research findings, the solutions for weak points that I

mentioned above are:
-

Diversify short-term loan

-

Restructuring outstanding loan

-

Increase quality of staff training

-

Adjust the credit procedure to make it more effective and convenient for
customer


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LIST OF TABLE

Table 1: Business result of Agribank North Hanoi branch.......................................24
Table 2: Outstanding loan of Agribank North Hanoi branch...................................26
Table 3: Outstanding loan divined into economic sectors........................................27
Table 4: Bad debt of Agribank North Hanoi branch................................................28
Table 5.Credit cycle of short-term loan (Source: Agribank North Hanoi branch)....29


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LIST OF FIGURES

Figure 1.Credit line for whole period.......................................................................11
Figure 2.Credit line for the end of period................................................................12
Figure 3.Factors that affect quality of short-term loan.............................................17
Figure 4.Organization of Agribank North Hanoi branch.........................................21
Figure 5.Credit activity based on duration of loan...................................................27

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INTRODUCTION
1. Rationale
Credit is the most basic and most profit activity of commercial banks. Nowadays, when
the relationship between commercial banks and firms is tighter, the commercial banks
system provides a huge amount of fund to firms. Through credit activity, commercial
banks also play an important role in supplying fund to the economy, boosting the
development of the economy. Because of the important role of credit activity,
increasing the quality of credit activity is a necessity with every commercial bank,
especially in the current competitive market of Vietnam.
In recent years, Agribank North Hanoi branch has continuously expanded credit
activity and received some remarkable achievments. The branch is situtated in Ba
Dinh province with many companies and big, potential firms which have high
demand in funding and continuously increasing. This is favorable condition for
Agribank North Hanoi branch to expand credit acitivity and increase profit.
However, Agribank North Hanoi branch has met some problems with short-term
loans for example: procedure or marketing activity,etc... the urgent demands is
finding solutions to solve this problem. Therefore, I decide to research on this
problem and my topic for the graduation is: ” Imporving short-term loan quality at
Agribank North Hanoi branch ”
2. Research objective
Improving short-term loan quality is an important and necessary action with
business of commercial bank. The purpose of the research includes:
* Research the theoretical framework which are related to credit activity of
Agribank North Hanoi branch
* Evaluate short-term loan activity at Agribank North Hanoi branch.
* Giving solution, recommendation to improve short-term loan quality of the branch
3. Research methodology

The information for the research will come from 2 main sources: primary and
secondary data
 Secondary data
Secondary data will mainly come from financial report


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Other sources of secondary data includes: magazine, newspaper, Internet and other
relevant document
 Primary data
In-depth interview:
-

Interview head of credit department to understand the overview of credit
activity

-

Arrange to meet, discuss or exchange email with chief accountant to
understand about finance of the bank

4. Research subject and scope
Research subject: outstanding loan and credit activity
Range of research: from 2009-2011
Due to some limitations, the research is lack of some information that Agribank
North Hanoi branch can not public
5. Thesis structure
Apart from Cover pages, Table of Contents, Abbreviation, List of figures, List of
tables, Acknowledgements, Executive summary, References and Appendixes, the

body of the thesis is divided into 3 chapters as follows:
 Chapter 1: Overview of short-term loan of commercial banks
 Chapter 2: Agribank North Hanoi branch
 Chapter 3: Solutions to improve the short-term loan quality at Agribank
North Hanoi branch


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CHAPTER I: OVERVIEW OF SHORT – TERM LOAN
OF COMMERCIAL BANKS

1.1. Definition and basic activities of commercial bank
1.1.1. Definition

Commercial bank is a credit organization doing currency trading and banking
service with the usual activity is that receiving deposit money and using that money
to provide credit and make payment operations and other related operations
Commercial banks are financial intermediate, the bridge between surplus units and
deficit units. It transfers unused money of surplus units to deficit units who need
money to operate business, manufacture or consume. Banks mobilize unused capital
in the economy through receiving deposit or borrowing and they use those unused
capital to serve spending needs or business capital needs. Credit fund of banks has
facilitated reproducing process in industry, agriculture, commerce and increases the
rate of reproducing process. From providing credit activity, banks have boosted
investment, play an important role in developing the economy and improving living
standard.
1.1.2. Basic activities of commercial banks

 Mobilizing capital

In order to have enough fund for lending, commercial banks have to find a way to
mobilize capital. One of important sources is the deposit of individuals or
organization. Beside that, commercial banks also have other sources such as issuing
loans, borrowing from other credit organization or borrowing State Bank of
Vietnam (SBV). Banks will pay interest for customer ’s deposit, its loan and commit
to pay on due date
When a commercial bank receive more deposit, the reserve increase exactly the
same amount, when customers withdraw their deposit, the reserve decrease exactly
the same amount.
 Credit activity
As we know, the main business field of commercial banks is financial and currency
fields. Credit is the most important activity, bring the highest profit and cover the


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expense for operating cost such as: reserve cost, deposit cost, business cost, risk
management cost or tax. Commercial banks have many different credit product to
serve the needs of customers. However, we can divide it into some basic products:
 Discount valuable notes:
Valuable notes is created mainly from trading products and services on credit
between customers. The seller can keep the valuable notes to ask for money from
buyer on maturity date or bring to the bank to ask for discount berfore maturity
date. When the customer bring the valuable notes to commercial banks to ask for
discount, the commercial banks will keep the valuable notes and give the customer
an amount of money which is calculated based on interest rate on the valuable
notes. Beside that, commercial banks can receive the fee for discounting valuable
notes. The commerial banks can wait until maturity date to receive the money or
rediscount at the State Bank of Vietnam in case they have liquidity need.
 Lending

Lending is the most common operation of banks. When customer has the need to
borrow fund from commercial banks to serve theri business, commercial bank will
evaluate, analyze and funding to customers that meet the requirement of bank. The
customers have to commit to repay both fund and interest on maturity date, using
the credit to serve the right purpose, guarantee the profitability. Therefore,
commercial banks usually require mortage in their lending.
 Renting
The banks will use the money to buy the property and rent it to customers according
to certain terms. After a period of time, the customers have to pay the fund and the
interest to the bank
 Guarantee
The bank commits to execute financial duty for its customer. Although it does not
have to lay out, it allows customer to use its reputation to make profit. There are
many guarantee forms such as payment guarantee, participating in bidding
guarantee or contract performance guarantee.


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1.2.

Short-term credit activity

1.2.1. Short-term fund and demand for short-term fund of companies

Short-term fund is the monetary value of short-term assets which are invested in
business. Short-term fund has short life cycle.
Normally, companies usually take advantage of available short-term funds, only
when they are lack of short-term fund, they have to use the short-term loans from
bank. The lacking of short-term fund of companies may due to the time or scale

difference between inflow and outflow, seasonal sudden demands on increasing
short-term assets. Therefore the demand for short-term fund of companies is also
divided into 2 kinds:


Frequent demand for short-term fund:

Demand for short-term fund usually comes from the time or scale difference
between inflow and outflow of companies. Inflow and outflow are not always fit
properly. If in a period of time, the outflow is higher than the inflow, the companies
have to supplement the shortfall. This shortfall is supplemented from resources or
receivable, the rest is supplemented from bank loans.


Seasonal demand for short-term fund:

Besides frequent demand for short-term fund, companies also have seasonal
demand for short-term fund. This demand comes from of features of business which
make the demand for short-term asset suddenly increase.
In conclusion, companies always have demands for short-term fund. Based on this
demand, banks provide short-term loans for companies. When the credit contract is
implemented, both banks and customers are profitable. Short-term loans do not only
bring profit to the bank but also satisfy the demand for short-term fund of
companies to serve the business.
1.2.2. Feature of short-term loan

Beside basic features of loan, short-term loan also has other features:


Short-term loan funding the demand for short-term fund of companies such as

salary, raw material cost


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

Short-term loan has the maturity below one year. The fund is only used in short-

term to pay the expense in the situation inflow and outflow are not fit or satisfy
seasonal demands
1.2.3. Forms of short-term loan

 Overdraft
Overdraft is an operation which the bank allow borrower to spend more money than
the amount money in their account to certain limit and in a certain time. This limit is
called overdraft limit.
To have overdraft, the customer has to make a request for overdraft limit and
overdraft time. In the overdraft time, the customer can use cheque, authorized
spending, etc… which exceed the amount of deposit money (but in the overdraft
limit range). When the customer deposits the money in their account, the bank will
receive loan principal and interest. The interest will be calculated as below:
Interest = Overdraft interest rate x Overdraft time x Overdraft money
The account which exceeds the overdraft limit will be charged additional fees and
suspense to use this product.
Overdraft is based on time and scale difference between inflow and outflow of
customer. Therefore this product can help the customer in their trading: proactive,
fast and promptly.
Overdraft is a short-term credit which is flexible, has simple procedures, mainly

without mortgage and can be provided to companies in few days of one month or
few months of one year to make the payment. This product is usually applied with
customers with high reliability, regular and short-term income.
 Short-term loans for production and business (one loan at a time)
This is a short-term loan is usually applied for customer which do not have frequent
demand for loan, do not have the condition to have overdraft limit. Companies
mainly use resources and commercial credit to pay for demand of short-term fund
but when they have seasonal demands or special expanding business, they have to
make a loan from the bank. When they want to make a loan, they have to make an
application and show the bank how they are going to use the loan. The bank will


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analyze customer and sign the loan contract which indicates amount of amount,
maturity date, interest rate, disbursement period and other terms if needed.
Based on the contract, the bank will receive loan principal and interest. In the
process of using loan of customer, the bank will supervise the purpose and
efficiency of usage, if they find any action that violent the contract, the bank will
collect the debt before maturity date or change it to overdue loan. This is a simple
product of banks and they will control separately each loan.
 Credit line

The feature of this loan is that one application can be used to apply for many loans.
When customer makes the application for loan, the bank will analyze credit of
customer and if they agree to provide the loan, they will sign a credit contract which
indicates the credit line for the customer. The credit line can be understood as
maximum outstanding debt, the customer can borrow or pay many times but they
cannot exceed the credit line. The credit line can be calculated for the whole period
or at the end of period.

Figure 1.Credit line for whole period


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Figure 2.Credit line for the end of period

Each time a customer want a loan, they only have to present the plan of using loan,
provide documents evidencing and state the demand for the loan. After checking the
legal and valid of documents, the bank will give the money to the customer.
This is convenient product for customer who has frequent demand for short-term
loan. The bank does not indicate the maturity date when customer has inflow the
bank will collect the debt so the companies can be proactive to manage budget and
use the fund effectively. However, loans are not separated into specific periods so
bank cannot easily control the efficiency of each loan. The bank only can realize the
problem when the companies submit financial report or outstanding loan does not
decrease in a long period of time.
 Discounting valuable notes
Valuable notes is created mainly from trading products and services on credit
between customers. The seller can keep the valuable notes to ask for money from
buyer on maturity date or bring to the bank to ask for discount berfore maturity
date. When the customer bring the valuable notes to commercial banks to ask for
discount, the commercial banks will keep the valuable notes and give the customer
an amount of money which is calculated based on interest rate on the valuable
notes. Beside that, commercial banks can receive the fee for discounting valuable
notes. The commerial banks can wait until maturity date to receive the money or


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rediscount at the State Bank of Vietnam in case they need liquidity. Through
discounting valuable notes, commercial bank has provide a short-term credit to
customer.
1.2.4. Short-term loan procedure

 Step 1: Receive application and collect information about customer
When customer makes an application, the bank will start collecting and processing
information about customer:
+ Content of dossier:
- Legal dossiers: include establishment decision, company rules, business
registration, appointment decision of chairman of BOD, BOM and head accountant.
- Financial dossiers: Balance sheet, income statements, financial report, cash-flow
report, business report
- Loan dossiers: strategic plan, repayment plan and related documents
- Mortgage dossiers (if there is a mortgage): list of mortgage asset, legal documents
of mortgage assets, documents that valued mortgage assets by independent
evaluation agency.
 Step 2: Appraisal and appraisal report
After collecting all necessary documents, creditor will start evaluating the customer,
analyze financial report, etc… to judge the repayment ability, credit, competitive
ability, financial ability. They do this by calculating rate, evaluate cash-flow and
assets of customer and through this they can know whether the customer can repay
the loan. Besides that, the bank can also identify appropriate fund that the bank can
give to the customer. The result of analyzing will be shown in a report which is sent
to competent people according to the rules of bank and they will make the decision.
 Step 3: Signing credit contract and disbursement
After competent people approve the application of customer, necessary procedures
will be completed and the bank and the customer will sign credit contract and start
disbursement

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 Step 4: Supervising in loan period and ending contract
In the loan period, creditor will supervise closely the loan to guarantee that
companies use the loan to serve the right purpose and use it effectively. If there is
any sign of suspicious action, it will be analyzed carefully and based on that the
bank will have handling measures such as: stop disbursement or cancel the contract
Ending a contract, the creditor will conclude and record the information about the
loan to use when it is necessary.
1.3.

Short-term loan quality

Short-term loan quality will be judged by effectiveness of loan. When loan is used
effectively and right purpose by customer, create bigger money, according to that,
bank will receive repayment and company can repay the loan, cover the expense
and have profit. This means the bank has just created positive result for the
economy of country.
1.3.1. Criteria to evaluate short-term loan quality

Credit is the most basic activity of banks and brings most profit to it. Moreover,
credit also play an important role in development of economy, the bank will be the
intermediate between surplus units and deficit unit, through that, the fund of
economy is used more effectively. As a result the quality of credit is necessary not
only to banks but also to customer. The quality of short-term loan is similar to the
quality of credit and it is evaluated based on two criteria:
- In the view of bank, the quality of short-term loan attach to the safety of principal
loan. It means that the loan must be secured and profitable. Simple and convenient

procedures will facilitate companies in business and catching opportunities. Besides
that, quality of the loan also means the profit that it brings to the bank. The banking
industry is more and more competitive so each bank has to have their own suitable
policy and find profitable projects
- In the view of customer, short-term loan of bank has supplied short-term fund to
companies to guarantee the fluency of business. To get this loan, companies have to
pay a quite huge cost so companies have to use it the most effective way.


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In conclusion, the quality of a loan is judged based on every period and in both
view of customer and bank. To evaluate quality of a loan, we based on qualitative
and quantitative indicators.
 Qualitative indicators:
 Ensure rules:
These rules are created to guarantee safety and profitability of bank‘s credit:
- Customer must commit to repay principal and interest on maturity date.
- Customer must commit to use the loan to serve the right purpose which has been
agreed by the bank, not to use it illegally and to use it according to the rules of
bank. The purpose of the loan which is written in the credit contract must guarantee
that bank does not fund illegal activities and the funding must be appropriate with
the platform of bank. Since companies sometimes use short-term loan to invest
long-term business with high risk so bank must have rules to force companies to use
the loan with right purpose
- Bank sponsors fund based on effective plan of using loan. Since effective plan of
using loan prove the ability to repay principle and interest of customer so this is the
foundation to rules 1 above.
- Guarantee credit analysis process: Credit analysis process is created and
standardized by banks to lower the risk in each loan. The content of credit analysis

process includes:
 Analysis before granting credit
 Creating and signing credit contract
 Safety, precision in transaction is the first criteria with all customers
 Transaction procedures: A good loan must guarantee not only simple, convenient
transaction procedures for customer but also necessary safety rules. In competitive
environment, simple transaction procedure is also an advantage of banks.
 Quantitative indicators:
To evaluate quality of short-term loan, we also base on quantitative indicators.
These indicators are used to ensure credit quality in the bank’s view:


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- Indicators that reflect scale and profitability of short-term loan:
 Total outstanding short-term loan: Reflects the scale of short-term loan of bank,
the higher outstanding loan the higher scale, it means that the bank expands shortterm loan business and the reputation of the bank is high. Normally, high
outstanding loan means high profit
 Credit cycle
Loan revenue
Average outstanding loan
The higher rate means the higher quality of the loan, the banks use capital more
effectively to participate in the economy.
- Indicators that reflect the credit risk of bank
Indicators that reflect the credit risk of bank are valuable addition to evaluate
quality of short-term loan. If bank has too many risky investments, current rate of
profit will be high but when there is a loss, the rate of profit in the future will be
decreased.
+ Overdue debt
+ Bad debt

+ Rate of using loan for wrong purpose = amount of short-term loan used for wrong
purpose / total outstanding short-term loan
+ Overdue debt rate
+ Bad debt rate
+ Credit risk reserve


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1.3.2. Factors that affect quality of short-term loan

Figure 3.Factors that affect quality of short-term loan



Bank-related factors:

Internal factors are factors that come from bank, it includes:
- Credit policy of bank: Credit policy reflects funding platform of a bank, becomes
guidance for every creditor and employees, increases profession in credit analysis,
creates unite in credit activity to lower the risk and increase profitability. Therefore,
credit policy plays an important role in credit quality. Each bank has their suitable
policy to guarantee profitable loan.
- Credit analysis process of bank: Quality of short-term loan depends on the credit
analysis process. If the process is effective, it will help the bank to choose good
customer so the bank will be repaid fully and on time
- Quality of employee: Quality of creditor plays an important role in improving
quality of credit. Even when the bank has good policy and credit analysis process
but unprofessional creditors or collusion between creditors and customers, the risk
of bad debt is certain

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 Customer-related factors:
- If customer does not use the fund for right purpose or try to fraud, it will cause
risk for the bank. Therefore credit analysis and supervising in loan period of bank is
very important with improving quality of short-term loan.
 Macro environment factors:
- Economic environment: Economic environment is one of the most important
factors that affect credit quality. Since bank and customer run the business in the
economic environment so the credit activity is also impacted by the changes of
economic environment. If the economy develops steadily, quality of short-term loan
of bank will also be improved
- Legal environment: Business of bank especially credit activity plays an important
role in economy but it is a risky business. If there are too many bad debts, it might
affect the stability of economy. Therefore credit activity of bank is under the
supervising of the government and adjusted by many legal documents. If the system
of legal documents is complete and reasonable and the supervision of government
to bank is strict, the quality of credit and short-term loan of bank will increases.
- Political and social environment: An unstable society with war or riots surely will
not be a convenient environment for bank or company. Therefore business of bank
and company are also greatly affected by this.


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CHAPTER II: ACTUAL CREDIT PERFORMANCE ON
AGRIBANK NORTH HANOI BRANCH
2.1. An overview Agribank

 General information
Agribank is the largest bank in Viet Nam in terms of capital, assets, workforce,
operating network and customer base. As of October 2012, the leading role of
Agribank has been confirmed by:
Total asset: VND 560,000 billion
Total fund resource: VND 513,000 billion
Equity: VND 29,605 billion
Total outstanding loans: VND 469,000 billion
Operating network: 2,400 branches and transaction offices nationwide
Personnel: 42,000 staffs
Agribank has always focused on the innovation and application of banking
technology in favour of business administration and the development of an
advanced banking services network. Agribank is the first bank to accomplish the
Project “Intra Payment and Customer Accounting System” (IPCAS) funded by the
World Bank. The finalised IPCAS has enabled Agribank to provide local and
foreign customers with modern banking products and services with extensive safety
and accuracy. At present, Agribank is serving millions of households and
enterprises.
Agribank is one of the banks in Viet Nam who have the largest number of
correspondent banks with 1,033 correspondent banks in 92 countries and territories.
Agribank is currently taking the Chairmanship of Asia Pacific Rural and
Agricultural Credit Association (APRACA) in term of 2008-2010, and also a
member of International Agricultural Credit Confederation (CICA) and Asian


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Bankers Association (ABA). Agribank has hosted a number of big international
conferences, i.e., FAO Conference in 1991, APRACA Meeting in 1996 and 2004,
CICA International conference on agricultural credit in 2001, APRACA Meeting on

fishery in 2002.
Agribank is the leading bank in Viet Nam in receipt and implementation of foreign
projects. In the context of economic volatility, Agribank has received 136 projects
from the World Bank (WB), Asian Development Bank (ADB), French Development
Agency (AFD), European Investment Bank (EIB), etc. with the total fund of over
USD 5.1 billion. Apart from this, Agribank has continuously got accessed to and
attracted new projects: Financing Agreement with European Investment Bank (EIB)
phase II; Rural Finance Project III funded by World Bank, Biogas Project funded by
ADB; JBIC Project by Japan; Small rubber farming project funded by AFD.
Apart from business activities, as a big enterprise, Agribank has shown its corporate
social responsibilities towards the nation’s social welfare program. Resolution
30a/2008/NQ-CP by the Government on rapid and sustainable poverty reduction
supporting program for 61 poor districts in 20 provinces, Agribank has sponsored
VND 160 billion to Muong Ang and Tua Chua districts of DienBien Province.
Agribank provided 2,188 gratitude houses in 2009, as of August 2010, Agribank
also funded 41 blocks of 329 rooms, 40 sanitary quarters, 40 water supplies, 40
kitchens, 9,000 m2 of concrete yard and other equipment for 38 schools of these
two districts. In addition, Agribank funded the building up of hundreds
of gratitude houses over the country; provided passbooks for late - servicewomen
solders with hard life; also funded for surgery of heart-disease children, funded for
Hospital construction and historical monuments embellishment. Annually,
Agrbank’s employees support salary of 04 working days to welfare funds such as:
Fund for the poor, Fund for Children Saving, …. In 2011, Agribank has sponsored
over VND 200 billion for charitable activities.
On the occasion of 21 years of Agribank anniversary (26 March 1988 – 26 March
2009), Agribank was of great pleasure to welcome the visit of His Excellency Mr.
Nong Duc Manh. He highly appreciated the great effort of Agribank and
emphasized that the bank should be fully aware and well done the Decision 26-

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NQ/TW in the direction “Strongly change on mechanism, Improve the spirit and
material life for the farmer”.
With the position of a leading commercial bank in Viet Nam, Agribank has shown
its great efforts, reaching encouraging achievements, and contributing greatly to the
nation’s industrialization and modernization as well as economic development.
2.2. Agribank North Hanoi branch
Agribank North Hanoi branch is established according to decision number 342/QD
of the governor of State Bank of Vietnam on 1/11/2001 and the official opening date
is 6/11/2001.
 Organization:

Figure 4.Organization of Agribank North Hanoi branch