Quan hệ tương quan giữa hành vi khách hàng gửi tiền và việc lựa chọn giao dịch ngân hàng trong khu vực các quận nội thành hà nội

..

SOUTHERN LUZON STATE UNIVERSITY, LUCBAN, QUEZON, PHILIPPINES
IN COLLABORATION WITH
THAI NGUYEN UNIVERSITY, SOCIALIST REPUBLIC OF VIETNAM
_______________________________________________________________________________

CORRELATION OF DEPOSITORS’ BEHAVIOR AND BANK
PATRONAGE IN THE INNER DISTRICTS OF HA NOI

DOCTOR
OF BUSINESS ADMINISTRATION

BY
TRINH THANH BINH – BECKAM

August, 2013


1


ACKNOWLEDGEMENT
I would like to express my heartfelt gratitude to leaders of Thai Nguyen
University in VietNam and Southern Luzon State University in the Philippines who
created best conditions for me to complete the course generally and fulfill the thesis
particularly.
My gratitude goes towards Professors directly gave me useful and memorable
lectures and guides in DBA namely Dr. Professor Cecilia N. Gascon, Dr. Professor
Walberto A. Macaraan, Dr.Professor Melchor Melo O. Placino, Dr.Professor Alice T.
Valerio, Dr. Professor Do Anh Tai, and Dr.Professor Tran Dai Nghia. They provided

me a rich and fertile environment to study and explore new ideas. They made my
DBA life is ever fluid, and, in the course of it all, a warm and inviting place to work.
My special thank to Dr. Professor Cecilia N. Gascon who provided me
valuable guides to complete the dissertation.
I am grateful to lecturers who managed the International Cooperation Program
between Vietnam and the Philippines namely Professor Tran Tuan Anh and Professor
Nguyen Thanh Hai. Without their cooperation, I could not have chance to join and
fulfill the course.
I would not have contemplated this road if not for my parents, my wife, my
children, and all of my dear friends who instilled within me a love of creative
pursuits, science and language, all of which finds a place in this the dissertation.
Trinh Thanh Binh
July, 2013

i


TABLE OF CONTENTS
ACKNOWLEDGEMENT

i

TABLE OF CONTENTS

ii

ABSTRACT

vii

LIST OF TABLES

viii

LIST OF FIGURES

xiv

LIST OF APPENDICES

xv

CHAPTER
I.

II.

INTRODUCTION

1

1.1. Background of the Study

1

1.2. Objectives of the Study

3

1.3. Statement of the Problem

3

1.4. Hypotheses of the Study

4

1.5. Significance of the Study

5

1.6. Scope and limitation of the Study

6

1.7. Definition of Terms

7

REVIEW OF LITERATURE AND STUDIES

10

ii


2.1. Economic Development

10

2.1.1 Viet Nam Economy

10

2.1.2. Ha Noi Economic Development

11

2.2. Regulation of Banking Industry

12

2.2.1. Background of Vietnam Banking Industry

12

2.2.2. Key Challenges Facing the Banking Industry

13

2.3. Background of Ha Noi Banking Industry

15

2.3.1. Banking Industry in Ha Noi

15

2.3.2. Practice in Deposit Mobilization in Ha Noi

15

2.4. Consumer Behavior

16

2.5. Review of Related Studies

20

2.6. Psychological Attributes of Depositors’ Behavior in Bank

22

Patronage
2.6.1. External Psycological Attributes

22

2.6.2. Internal Attributes

23

2.7. Factors Influencing Depositor Behavior in Deposit

24

2.7.1. Subjective Factors

24

iii


III.

IV.

2.7.2. Objective Factors

25

2.8. Conceptual Framework

27

METHODOLOGY

29

3.1. Research Design

29

3.2. Determination of Sample Size

29

3.3. Sampling Design and Techniques

30

3.4. Subject of the Study

31

3.5. Research Instrument

31

3.6. Data Collection Method

31

3.7. Data Processing Method

32

RESULTS AND DISCUSSION

34

4.1. Depositors’ Profile

34

4.2. Depositors’ Distribution by Districts

36

4.3. Attributes of Depositors’ Behavior in Bank Patronage in the

37

Inner Districts of Ha Noi
4.3.1. External Attributes Implication of Depositors’ Behavior

37

4.3.1.1. Depositors’ Selection by Specific Banks and Type of

37

Banks – Foreign Banks, State Owned Banks and Joint Stock Banks
4.3.1.2. Time Span Depositors Began Relationship with Banks

39

iv


4.3.1.3. Depositors’ Selection of the Deposit Kinds and Terms

42

4.3.2. Depositors’ Motivation in Bank Patronage

47

4.3.2.1. Depositors’ Motivation for Changing a Bank

47

4.3.2.2. Depositors’ Motivation for Selecting Banks They Deposit

54

with
4.3.2.3. Depositors’ Expectation on the Future Promotions

65

4.3.2.4. Depositors’ Future Investment Plan

68

4.3.2.5. Depositors’ Willingness to Make a Reference with Their

72

Friends
4.3.3. Depositors’ Perception and Bank Patronage

74

4.3.3.1. Depositors’ Attitudes in Acceptance of Interest Rate

74

4.3.3.2. Depositors’ Attitudes in Acceptance of Bank Service Quality

75

4.3.3.3. Depositors’ Attitudes for Existing Promotion Programs

77

4.3.3.4. Depositors’ Perception of Bank Safety

83

4.4. Factors Influencing Depositors’ Behavior in Bank Patronage in

85

the Inner District of Ha Noi
4.4.1. Depositors’ Selection of Factors and Factors’ Correlation

85

4.4.2. Critical Factors

89

v


V.

4.4.2.1. Prestigious Banks

89

4.4.2.2. Quick and Convenient Procedure

91

4.4.2.3. Competitive Interest Rates

91

4.4.2.4. Security and Safe

93

4.4.2.5. Convenient Location

94

SUMMARY, FIDINGS, CONCLUSIONS AND

95

RECOMMENDATIONS
5.1. Summary of Findings

95

5.2. Conclusions

102

5.3. Recommendations

105

BIBLIOGRAPHY

109

APPENDICES

114

SURVEY QUESTIONNAIRES

151

CURRICULUM VITAE

161

vi


ABSTRACT
This study was conducted to determine and analyze the correlation of
depositors’ behavior and bank patronage in the inner districts of Ha Noi. As the
knowledge of depositors’ behavior and bank patronage is not well understandable
and given the critical importance of understanding of depositors’ behavior, this study

intended to identify the factors influencing depositors’ behavior and define the
winning strategies for the banks in fund mobilization.
The methodology of the thesis was to review the various relevant literatures.
Method of system analysis, method of fieldwork, method of comparison, quantitative
research methods and forecasting method were also used in the study.
This research was conducted within the inner districts of Hanoi with 257
respondents, which were selected based on random probability. Findings showed that
depositors’ behavior was influenced by both internal demographic factors and
external factors. The result further revealed a high correlation between depositors’
behavior and factors such as “prestigious banks”, “security and safe”, “competitive
rates”, “quick and convenient procedure”. However, lower correlation was obtained in
depositors’ perception and attitudes.
The recommendations are developed from the insights and conclusions. First
is to address the brand issue of banks that built through depositors’ perception of
“bank safety”, “prestigious” and other key influencers. Second, banks should take
into account all factors in their winning marketing strategies. Third is to recommend
the contingency plan that banks should have to keep safe. And the

last is to

recommend the SBV need to liberalize interest rates on deposits.

vii


LIST OF TABLES
Table

CONTENT

Page

Table 1

Bank classification by ownership and key indicators as of 30
June 2013

13

Table 2

Depositors’ profile

35

Table 3

Distribution of depositors by gender and marital status

36

Table 4

The bank selection by bank ownership

38

Table 5

Distribution of depositors by banks

39

Table 6

The period of time that depositors maintain relationship with

40

Banks
Table 7

Relation between marital Status and time span with banks

41

Table 8

Relation between age range and time span with banks

41

Table 9

Relation between professional, employment and time span

42

with banks
Table 10

Kind of deposits

43

Table 11

Deposit maturity

44

Table 12

Relation between marital status and type of deposits

44

Table 13

Relation between age range and terms of deposits

45

Table 14

Relation between education background and terms of deposits

45

Table 15

Relation between professional, employment and types of

46

deposits
Table 16

Relation between professional, employment and terms of

47

deposits
Table 17

Reasons for depositors to change banks (having at least two

49

banks at the same time) by gender and marital status

viii


Table 18

Reasons for depositors to change banks (having at least two

49

banks at the same time) by age
Table 19

Reasons for depositors to change banks (having at least two

50

banks at the same time) by education background
Table 20

Reasons for depositors to change banks (having at least two

50

banks at the same time) by employment
Table 21

Reasons for depositors to change banks (having at least two

51

banks at the same time) by income
Table 22

Relation between education background and the factor “to seek

51

for stronger reputation”
Table 23

Relation between professional and employment with the factor

52

“to seek for the best/better service”
Table 24

Relation between professional and employment with the factor

53

“I was not happy with the service so I switch to another bank”
Table 25

Descriptive Statistics of the factors depositors select to answer

53

the question why
Table 26

Correlation of the factors depositors select to answer the

54

question why
Table 27

Reasons for depositors to select the first banks

57

Table 28

Relation between age range and the factor of “paper and

57

electronic statements”
Table 29

Relation between age range and the factor of “security and

58

safe”
Table 30

Relation between education background and the factor of

58

“security and safe”

ix


Table 31

Relation between education background and the factors of

59

“prestigious banks, clear explanation and procedure, banks
with branches locate at my convenient place, paper and
electronic statements”
Table 32

Relation between education background and the factor of

59

“competitive interest”
Table 33

Relation between education background and the factor of

60

“paper and electronic statements
Table 34

Relation between education background and the factor of “can

60

make deposit/withdrawal flexibly”
Table 35

Relation between professional and employment and the factor

61

of “competitive interest”
Table 36

Relation between professional and employment and the factor

62

of “prestigious banks”
Table 37

Relation between professional and employment and the factor

62

of “security and safe”
Table 38

Relation between income and the factor of “paper and

63

electronic statements”
Table 39

Relation between income and the factor of “recommendation

63

from friends/relatives”
Table 40

Relation between income and the factor of “banks with

64

branches locate at my convenient place”
Table 41

Descriptive statistics of factors for depositors’ selection of

64

the First Bank they deposited with
Table 42

Correlation of the factors for depositors’ selection of the

65

x


first bank they deposited with
Table 43

Type of promotion that depositors want to have?

66

Table 44

Type of promotion that depositors want to have first?

67

Table 45

Relation between income and lottery participation

67

Table 46

Descriptive statistics of the promotion kinds depositors want

68

to have
Table 47

Correlations of the promotion kinds depositors want to have

68

Table 48

Depositors’ future plan to invest their money

69

Table 49

Relation between marital status with depositors’ plan to

70

deposit foreign currency at banks
Table 50

Relation between age range with depositors’ plan to deposit

70

foreign currency at banks
Table 51

Relation between income with depositors’ plan to deposit

71

foreign currency at banks
Table 52

Relation between income with depositors’ plan to buy gold

71

and save at home
Table 53

Descriptive statistics of future investment factors

72

Table 54

Correlation of future investment factors

72

Table 55

Depositors’ willingness to introduce their banks with friends

73

Table 56

Relation between education background with depositors’

73

willingness to refer banks with their friends.
Table 57

Relation between education background with depositors’

74

willingness to refer banks with their friends.
Table 58

Depositors’ acceptance of interest rates banks offer

75

Table 59

Depositors’ evaluation of service quality of banks

76

xi


Table 60

Relation between marital status and the rating of service

76

Satisfaction
Table 61

Promotion received

78

Table 62

How depositors like received promotion

79

Table 63

Types of promotion depositors received

79

Table 64

Depositors’ selection of promotion ranking the first

79

Table 65

Relation between income and the response to the question:

80

“did you receive any promotion?”
Table 66

Relation between age range with the kinds of promotion

80

Received
Table 67

Relation between age range and the depositors’ ranking of

81

promotion kinds they like most
Table 68

Relation between professional, employment and the

82

depositors’ ranking of promotion kinds they like most
Table 69

Relation between income and the depositors’ ranking of

82

promotion kinds they like most
Table 70

descriptive statistics of promotion kinds depositors received

83

for making deposits at banks
Table 71

Correlation of promotion kinds depositors received for

83

making deposits at banks
Table 72

Depositors’ response to the question as keeping money at

84

banks always safe
Table 73

Relation between employment with depositors’ perception of

85

the bank safety
Table 74

factors that depositors would consider when selecting a bank

87

xii

for deposits
Table 75

The influencing factor that depositors rank as the first

88

Table 76

Descriptive statistics of the factors depositors would consider

88

Table 77

to select banks for deposits in the next time
Correlation of the factors depositors would consider to select

89

banks for deposits in the next time
Table 78

Relation between income with prestigious banks

90

Table 79

Relation between education with prestigious banks and

91

security and safety
Table 80

Relation between education with competitive interest rates

92

Table 81

Relation between employment with the factor of competitive

93

interest rates

xiii


LIST OF FIGURES
Figure

CONTENT

Page

Figure 1

Conceptual Model of Consumer behavior

9

Figure 2

Conscious Problem Solving and Learning Model of Consumer

10

Behavior
Figure 3

28

Conceptual Framework

xiv


LIST OF APPENDICES

Appendix

CONTENT

page

Appendix A.1

List of State Owned Banks (SOBs) as of 30 June 2013

114

Appendix A.2

List of Jointstock Commercial Banks (JSCBs) as of 30 June

115

2013
Appendix A.3

List of foreign banks branches as of 30 June 2013

117

Appendix A.4

List of Joint Venture Banks as of 30 June 2013

120

Appendix A.5

List of 100% owned Foreign Banks as of 30 June 2013

120

Appendix B.1

Distribution of depositors by age

121

Appendix B.2

Distribution of depositors by education background

121

Appendix B.3

Distribution of depositors by Professional and employment

122

Appendix B.4

Distribution of depositors by income

122

Appendix B.5

Distribution of depositors’ first bank selection by gender,

123

marital status and age
Appendix B.6

Distribution of depositors’ second bank selection by gender,

123

marital status and age
Appendix B.7

Distribution of depositors’ third bank selection by gender,

123

marital status and age
Appendix B.8

Distribution of depositors’ fourth bank selection by gender,

124

marital status and age
Appendix B.9

Reasons for depositors to select the second banks

124

Appendix B.10

Reasons for depositors to select the third banks

125

Appendix B.11

Reasons for depositors to select the fourth banks

125

Appendix B.12

Descriptive statistics of factors for depositors’ selection of

126
xv


the Second Bank they deposited with
Appendix B.13

Correlation of the factors for depositors’ selection of the

127

Second bank they deposited with
Appendix B.14

Descriptive statistics of factors for depositors’ selection of

128

the Third Bank they deposited with
Appendix B.15

Correlation of the factors for depositors’ selection of the

129

Third bank they deposited with
Appendix B.16

Descriptive statistics of factors for depositors’ selection of

130

the Fourth Bank they deposited with
Appendix B.17

Correlation of the factors for depositors’ selection of the

131

Fourth bank they deposited with
Appendix B.18

Type of promotion that depositors want to have second?

132

Appendix B.19

Type of promotion that depositors want to have third?

132

Appendix B.20

Type of promotion that depositors want to have fourth?

132

Appendix B.21

Type of promotion that depositors want to have fifth?

133

Appendix B.22

Depositors’ selection of promotion ranking the second

133

Appendix B.23

Depositors’ selection of promotion ranking the third

133

Appendix B.24

Depositors’ selection of promotion ranking the fourth

134

Appendix B.25

Depositors’ selection of promotion ranking the fifth

134

Appendix B.26

The influencing factor that depositors rank as the second

134

Appendix B.27

The influencing factor that depositors rank as the third

135

Appendix B.28

The influencing factor that depositors rank as the fourth

135

Appendix B.29

The influencing factor that depositors rank as the fifth

136

Appendix B.30

The influencing factor that depositors rank as the sixth

136

Appendix B.31

The influencing factor that depositors rank as the seventh

137
xvi


Appendix B.32

The influencing factor that depositors rank as the eighth

137

Appendix B.33

The influencing factor that depositors rank as the ninth

138

Appendix B.34

The influencing factor that depositors rank as the tenth

138

Appendix B.35

The influencing factor that depositors rank as the eleventh

139

Appendix B.36

Relation between age range with the factor suitable fees and

139

charges
Appendix B.37

Relation between marital status with the factor of can make

140

deposit/withdrawal flexibly
Appendix B.38

Relation between age range with the factor of can make

141

deposit/withdrawal flexibly
Appendix B.39

Relation between education with can make

142

deposits/withdrawal flexibly
Appendix B.40

Relation between employment with the factor of can make

143

deposits/withdrawal flexibly
Appendix B.41

Relation between marital status with the factor of clear

144

explanation and procedure
Appendix B.42

Relation between education with the factor of paper and

145

electronic statement
Appendix B.43

Relation between employment with the factor of competitive

146

interest rates
Appendix B.44

Relation between income with paper and electronic statements

147

Appendix B.45

Relation between age range with the factor of

148

recommendations from friends/relatives
Appendix B.46

Relation between employment with the factor of

149

xvii


recommendations from friends/relatives
Appendix B.47

Relation between income with recommendations from

150

friends/relatives

xviii


CHAPTER I
INTRODUCTION

Fund mobilization is essential to banks’ success. Recently, banks face with
strong competition in attracting and retending depositors. Many banks fail to mobilize
funds while others are able to understand better depositors and depositors’ behavior in
bank patronage and take advantadge of their knowledge to win the game. In the study,
the researcher would like to address the issue of depositors’ behavior and bank
patronage.

1.1

Background of the Study
Vietnam economy has been in the fast growth track for a decade. Vietnam

GDP growth is mainly come from government capital expenditure and private sector
investment. The fast infrastructure development and urbanization process require
huge source of funding.

One of the engine to lure the growth is the expansion of

credit by banking sectors.
The banking sector in Viet Nam consists of

5 state owned banks, 37

commercial joint stock banks, 53 foreign – related banks, 30 financial companies and
finance lease companies, 1 Central People Credit Fund and 1,057 local people credit
funds (Nguyen C.T., 2011). The number is quite big giving the Vietnam’s GDP per
capital is 1,300 USD by 2011 (Dantri, 2011). The competition is high in the sector,
especially in main economic and political areas like Ha Noi and Ho Chi Minh cities.
The interest income contributes a major part of banks income. Most banks have their
income heavily dependent on lending activities with interest income to total income
ratio of some banks reaching above 90% in 2010 (Quach, 2011). This causes many

1


banks concentrating on fund mobilization. One of key sources of fund would be the
depositors’ funding. The source of fund is viewed as a stable funding and counts for a
big part in banks’ balance sheet. Many strategies that banks persuad to lure their
deposit growth including branch network expansion, high interest rate offer, attractive
promotion campaigns.
Due to the fact that the banking sector plays a key part in the economic
activities and economic development, and social stability as well, the banking

activities in Vietnam have been highly regulated. There are still many different
experts’ opinions on if the banking sector needs to be moving more deregulation or
regulation. However, taking the reason to prevent banks’ failure, the State Bank of
Viet Nam put in place a very high level on banks supervision. Some regulations that
directly affect banks’ expansion of credit and fund mobilization include control of
capital adequacy, bank liquidity ratio, and the banks’ branch network expansion. Even
though, the State Bank of Viet Nam tries to communicate and act to prevent the
banks’ failure in the future. However, depositors are always facing with risk of losing
their fund in case of banks’ run or bankruptcy. For deposit insurance, the depositors
can receive is 30 million VND at maximum as per law.
To study the depositors’ behavior is always necessary for banks to serve better
their clients. In fact, a few information of depositors’ behavior have been made
available in public sources in Viet Nam. Information is normally in the form of
observation and experts’ opinion. In late 2013, there is a doctorate study on individual
customers’ depositing behavior at banks made by Le Thi Thu Hang, which is
available at the Viet Nam Instiute of Social Science. Le T.T.H (2012) scoped her
study at nationan-wide scale and focused on individuals who had or did not have a
deposit at banks. However, there has not been a similar study of the correlation

2


between depositors’ behavior and bank patronage in Ha Noi that the researcher could
identify in the public sources. In addition, depositors’ behavior would always reflect
through certain factors. Therefore, the study of the correlation of depositors’ behavior
and bank patronage should be a key success factor for banks to win in the deposit
competition race in Ha Noi and for those who want to get knowledge of the study.

1.2

Objectives of the Study
The main objective of the study is to determine and analyse the correlation of

depositors’ behavior and bank patronage in the inner districts of Ha Noi. Besides, the
search aims to achieve the following objectives:
1. To describe the background of the general economic environment and the
banking industry in Ha Noi
2. To determine and analyse comsumer behavior model and to determine
depositors’ behavior model
3. To characterise the profile of the depositors in Ha Noi
4. To identify the factors that influence the depositors’ behavior in selecting
banks in the inner districts of Ha Noi.
5. To determine the correlation of depositors’ behavior and bank patronage in
the inner districts of Ha Noi.
6. To identify the winning strategies for banks in fund mobilization.

1.3

Statement of the Problem
Funding mobilization is very ctitical to banks in Vietnam, especially in Ha Noi

as a large number of banks with too high credit growth (Quach, 2011) with the limited
source of owners capital need to maintain their growth and liquidity by seeking

3


deposits from public. In addition, banks face with stiff competition in deposit
mobilization and this makes banks more difficult in attracting and keeping depositors.
Ha Noi is a big city where all banks have presence and try to gain advantage over

competitors. Understanding depositors’ behavior in Ha Noi would help banks adapt
their funding strategies accordingly. However, there is a very limited knowledge of
depositors’ behavior available in the research or at bank strategists’ desk. Therefore, it
should be an opportunities for researchers to study the depositors’ behavior and make
it useful to all stakeholders.
To understand the depositors’ behavior in bank patronage. The following
questions will be addressed:
1. What is the background of banking industry in Ha Noi?
2. What are the profile of depositors in Ha Noi?
3. What are the implications of depositors’ behavior?
4. How are the depositors’ behavior and bank patronage correlated?
5. What

are the factors that influence the depositors’ behavior in selecting

banks?
6. How do depositors prioritize the factors?
7. What are the winning strategies for the banks in fund mobilization?

1.4

Hypotheses of the Study
The following hypotheses will be tested:

Hypothesis 1: Depositors’ behavior in bank patronage is positively correlated to the
level of interest rates that banks offer for taking deposits.
Hypothesis 2: Depositors’ behavior in bank patronage is positively correlated to the
availability of the bank.

4

Hypothesis 3: Depositors’ behavior in bank patronage is positively influenced by
referral from friends or relatives.
Hypothesis 4: Depositors’ behavior in bank patronage is positively correlated with the
promotion campaigns that banks offer to depositors.
Hypothesis 5: Depositors’ behavior in bank patronage is positively correlated with the
bank reputation in the market.
Hypothesis 6: Depositors’ behavior in bank patronage is positively correlated with the
service quality that depositors experience with banks.
Hypothesis 7: Depositors patronize the banks when their deposit is secured.

1.5

Significance of the Study
The study is important as it addresses to answer several key questions and it

benefits researchers and banks in setting up their strategy in fund mobilization.
The study is to identify the factors that influence depositors’ behavior in
selecting banks for placing their deposits.
For the banking industry’s regulator, it finds out the gap between the fact and
polices for fund mobilization, implication for strenthening the policy environment.
For the banks, they understand factors to influence the depositors’ behaviors;
through which banks would be able to address key issues that influence depositors in
bank patronage and able to reshape their policies and strategies to win the
competition.
For marketers, the understanding of depositor behavior and influencing factors
would help them to develop suitable and effective marketing campaigns.
For researchers and students, they would have a valuable information about
depositor behavior in Ha Noi and apply in the work and study.

5