VIETNAM NATIONAL UNIVERSITY, HANOI
INTERNATIONAL SCHOOL

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GRADUATE INTERNSHIP REPORT
INTERNSHIP COMPANY/INSTITUTION: VP Bank Trung Hoa Nhan Chinh Branch

Address: 29T1, Hoang Dao Thuy, Hanoi

Supervisor: Ph.D Ly Phuong Duyen
Student’s full name: Dao Duc Anh
Student’s ID: 11071285
Major: International Business
Class: Ib2012B

Ha Noi, 5th March 2016


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ACKNOWLEDGEMENT
I am very grateful to the teachers at International School, especially Ph.D Ly
Phuong Duyen who have made the most sacrifice in term of time and energy for
knowledge of banking and finance; I could build a solid foundation to apply on my
future career.
I am really very thankful to Mr. Tran Trung Van – branch director for his
acceptance of my internship. He has supported me during the period of collecting
information.

Besides, there are many people who supported me attentively in formulation of
this report and without the support of them I could never be able to complete this report
successfully. In this respect, I am very grateful to all the officers and the staff
members, who cooperated with me, provided me with valuable information about
capital mobilizing and guided at each step of my internship. Their valuable advices and
specially the amicable attitude always inspired me for hard work.

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VIETNAM NATIONAL UNIVERSITY, HANOI
INTERNATIONAL SCHOOL

SOCIAL REPUBLIC OF VIETNAM
Independence – Liberty - Happiness

Graduate Internship Evaluation
(for Supervisor)
Student’s full name: ………………………………………………………………..
Student’s ID: ...................................................... Class: ………………………………
Major: …………………………………………………………………………………
Internship Company/Organization……………………………………………………..
Supervisor: ………………………………………………………………………………….
1. The performance of the schedule:

Internship period starts from…………………………….. to …………………………………
…………………………………………………………………………………………………
2. Awareness, attitude:
…………………………………………………………………………………………..
…………………………………………………………………………………………..
…………………………………………………………………………………………..
3. Other comments:
…………………………………………………………………………………………..
…………………………………………………………………………………………..
…………………………………………………………………………………………..
Hanoi, …………………………………

Supervisor
(Signature and Full name)

Table content
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Chapter 1. Overview of VP-Bank
1.1 Introduction of VP-Bank

1.1.1 Historical development
VPBANK (Viet Nam Joint Stock Commercial Bank for Private Enterprises) was

established under the Operating License No. 0042 / NHGP of Governor State Bank of
Vietnam granted August 12, 1993 with a 99-year operating period. VPBank began
operating under Establishment License No.1535 / QĐ-UB dated September 4, 1993.
The bank developed through 4 main periods.
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From 1993 to 1996: it is a beginning time without experience in management

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and operation as well as inability of growth control.
From 1996 to 2004: The phase of determining the keeping money emergency. In
1997, the Asian money related and fiscal emergency happened, along these lines
the VP Bank need to settle inside remarkable issues as well as must resolve the

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troubles brought on by the emergency.
From 2004 to 2012: A stage arranged maintainable advancement in the initial
four years. However, by 2008, the bank kept dealing with the worldwide money
related emergency in 2008. This stage had been the troublesome time of the

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saving money market when all is said in done and of VPBank specifically
From 2012 to present: the recovering time after recession and continuing growth
in the future.

The starting contract capital of the recently settled bank is 20 billion VND. At that
point as improvement requests, after few years VP Bank has over and again expanded

its contract capital. By 8/2006, VP Bank's charter capital achieved 500 billion VND.
9/2006, VPBank is endorsed by the national bank to offer 10% of value money to a
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remote key accomplice which is OCBC bank, the Singapore's biggest bank. After that,
VP Bank's charter capital will increment to more than 1,000 billion VND. 4/2015, VP
Bank is affirmed to expand sanction capital from 6.347 billion to 7.324 billion VND.
In growth process, VPBank dependably pays consideration on the development of
scale and upgrade of its system in real urban areas. State Bank's Governor has endorsed
the VPBank to build its charter capital from 7.324 billion to 8.444 billion under the
Charter Capital Increase Plan in Resolution dated 10.02.2015 affirmed by the Annual
Shareholders Meeting.
From 2010 to 2015, the development rate has a sharp increase, with the exception of
the lessening in 2014. Following 5 years, the capital has achieved 8.444 thousand
billion VND, expanded 111.1% contrasted with 2010. It prove that VPBank has huge
effort to enhance the operation throughout the years. Raising capital helps the bank to
improve the extension and nature of profitable resources, expand the competitiveness
of the bank and raise the bank's brand image.
VPBank dependably pays consideration on grow scale and improve its system in
particularly urban communities. 12/1993, VPBank branch was built up in HCM City.
By 11/1994, VPBank Hai Phong was set up, and presently in 7/1995, VP Bank office
in Da Nang was built up. Especially in 2004, VP Bank opened 3 new branches under
the approval of the national bank. They are VPBank Hanoi Branch which was

independence from the Head Office, Hue Branch and Sai Gon Branch. In 2005, a chain
of VP Bank offices was conceived: Can Tho Branch, Quang Ninh Branch, Vinh Phuc
Branch, Thanh Xuan Branch... In 2006, VP Bank set up two subsidiaries: VPBank
Asset Management Company (VPBANK AMC) and VPBank Securities Company
(VPBS). Today with 22 years of operations, VP Bank has raised its contracted cashflow to 8.444 billion and added to the system to more than 200 value-based focuses,
with staff of more than 7,000 employees.

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As a member of the group of 12 leading banks in Vietnam (G12 ( G12 ) , VP Bank is
finding a way to declare the notoriety of a dynamic bank , high security and high
responsibility to the social . To accomplish the aspiring vision, VP Bank has executed
forceful development methodology for the period 2012 - 2017 with the help of a main
consulting firm McKinsey. With this strategy, VPBank has development endeavors in
the objective client segment, building a consolidate foundation to develop, and
effectively checking opportunities in the business sector .
To plan for the development, VP Bank has directed synchronic method for assemble
bank’s framework. VPBank try to be a market leader in the use of high technologies in
product, service and working frameworks. Alongside the effective working of solid
corporate social environment, the center HR administration has been created
effectively at VP Bank. In addition, VPBank has bit by bit built up an arrangement of
autonomous and particular risk management to catch worldwide principles and adjust
to the business system of the Bank. In parallel with the following of the global

practices of corporate administration, VP Bank always enhance transpiration and
clearly by restructuring the organization.
1.1.2. Organizational structure
Figure 1.1

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Through each stage about development, VP bank made transformation in the
authoritative structure to adapt the recent situation. The Board of Directors work for
Shareholders who have capital proportion in the bank. It is a highest organ in this
organization that have power in making decision in the way of development. They will
elect a General Manager and Board of Management who responsible for all banking
activities.
Through the chart, the organizational structure of VP bank is quietly strict that include
functional department to run all activities smoothly.
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Shareholders Meeting: is the highest authority of VP Bank. It can decide the
orientation of VP Bank, organizational structure, controlling the Board of
Director, Supervisory Board, and Credit Committee, charter capital,

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purchasing and saling of shares of the bank; restructuring or dissolution of
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the bank; establishing subsidiaries; financial matters of VP Bank.
Board of Directors is the management department of the bank; has the right
to represent the bank in order to resolve all matters relating to the
achievement and interests of the bank, except for matters under the authority
of the Shareholders Meeting. VP Bank's Board of Directors has a minimum
of 5 members and a maximum of 11 members. At least half of the members

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must be non-executive and independent members.
Supervisory Board is responsible for examining the accuracy and legality in
the management, business operations, accounting records and financial
statements; report to the Board of Director the results of operation; consult to
Board of Director before submitting the reports, decisions and petitions to
the Shareholders Meeting. VP Bank's Supervisory Board must have at least 3
members, no limit on maximum, and at least half of the members are not in

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other positions at VP Bank and other businesses simultaneously.

General Manager supervises operating daily business of VP Bank,
implementing the decisions of the Shareholders Meeting, Board of Directors
as well as the other business plans of VP Bank. It is subject to the
supervision of the Board of Director and the Supervisory Board, responsible
to the Board of Director and to the law for the implementation of the rights
and duties assigned. Assistants for the General Manager are the deputy
general managers, chief accountant, heads of departments at the head office,
branch managers and other titles.

1.1.3 Main activities of VP Bank

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Lend short-term, medium-term and long-term loans to the financial

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organizations and residents from the availability of bank funds
Mobilize short-term, medium-term and long-term capital in term of deposits,

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demand deposits from the financial firms and residents
Borrow money from the central bank and other credit institutions
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Contribute capital, form joint ventures and purchase or sell shares under the

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current law
Trade in foreign exchange; perform international payments; mobilize funds
from abroad and perform banking services related to foreign countries when the

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central bank allows
Discount commercial paper, bonds and other valuable vouchers Provide
transactional services and other banking services as stipulated by the State Bank

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of Vietnam
Intermediary for payment and transaction

1.2 Overview of VPBank Trung Hoa Nhan Chinh Branch
1.2.1 Historical development
Transactional office VP bank Trung Hoa Nhan Chinh have been secured once
01/02/2007 under the management of the level I VPBank Kinh Do. It is placed at 1st
floor of 29T1 tower in Hoang Dao Thuy Street, Cau Giay District. VPBank Trung Hoa
Nhan Chinh created for the mission to extend those zone of operation, serving clients

in the district as well as assisting the customer in transactions.
After five year, 17/01/2012 VP Trung Hoa - Nhan Chinh authoritatively
differentiated from extension Kinh Do, created an autonomous branch which
connected the new model about transactional purpose called “Conversion” of VPBank.
This may be an transaction model which bank representatives will serve customers
contrast to traditional way. Furthermore, the new approach focus on intimacy and
consultation. As a result, VPBank Trung Hoa - Nhan Chinh has the loyalty of many
clients owing to young and energetic employees in banking system.
1.2.2. Organizational structure
Figure 1.2: Organizational structure of VPBank THNC

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Branch Director

personal customer department

small and medium enterprise

customer service department

Accounting division


department

Transactional divison

a. SME Department
 Functions:

Create and execute marketing policies, boost the relationship with customers, research
and classify the products and services for different clients.
create criteria to assessing credit, classifying customers; performance appraisal of each
corporation.
 Missions:

Based on each kind of target customers, propose and realize forms of advertising the
products and services to enterprise clients the department can suggest and execute
marketing policies.
Gather and store documents and papers relating to the clients such as operations,
production and business of customers; regularly supervise customer activities and
maintain close relationships with customers.
Contact and consult the customer; suggest expert advice on products and services
according to customer’s requirements; introduce new products and services if the
customers is potential
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Conduct market research; figure out customer’s needs, focus on small and medium
enterprises
Receive the application of loans, guarantees or foreign currency trading from
customers; appraise and grant proposals based on consideration and settlement.
Responsible for the legal of credit granting activities related to the clients.
Regularly value clients in order to estimate how much the bank can support for this
plan or project of corporation; transfer the record of questionable loans to VPBank
Asset Management Corporation (AMC) in the higher authorities for handling
according to current law.
Provide various products and services related to enterprise customers like cash
management, trade finance, derivative trading…
Analyze, synthesize and evaluate the activities of the branch periodically.
b.



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Customer service department
Transactional Division
Function:
Welcome customers; introduce items as well as benefits of the bank.
Collect information from customers
Mission:
Activities related to saving account like deposit, withdrawals, interest payment.
Guide customers how to use the products
Open the bank account or some type of cards
Carry out daily transactions such as money transfer, check issuance, withdraw,


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deposit, etc
Provide information about bank account; send debit notes, credit notes, account

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statements ... for customers in accordance with the jurisdiction rules
Implement exchange of currency for customers according to the principle of

Central Bank and of VP Bank.
 Accounting division
- Pay salaries and compensation for employees monthly
- Manage and supervise the fixed assets and internal expense
- Implement the accounting for mobilizing capital, lending and other business
operations
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Estimate and calculate the income, expenses, balance of receiving and paying,

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take advantage bank’s resource and capital in investment.
Make a plan for financing for future as well as the financial report and balance

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sheet based on current principles
Collaborate with other departments to collect and manage documents and data

by computer system.
c. Personal Customer Department
 Function:
Evaluate and classify the customers based on the criteria that can help the bank to
appraise clients if they want to borrow or open the credit account.
Carry out the marketing plan, promote the customer relationships, provide the service
and products that is appropriate for customers.
Promote a new plan for raising capital through the forms of deposits and savings;
attract depositors with various forms of promotion.
 Mission:

Basically, it is similar SME Department with the products and services focus on
personal or household customers of middle class or high class.
1.2.3. Main activities and products
Trung Hoa Nhan Chinh branch has main activities and products related to the personal
and SME customers. Large number of transactions related to larger customers like
corporate or group of firms will be centralized at the headquarters.
a. Small and Medium Enterprises (SMEs)
 Loan products:
- Supporting finance in some kind of industries like agriculture industry: wood,
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rice coffee beans or seafood.
Thanks to collaborating to JICA (Japan International Corporation Agency), VP

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Bank can offer the long term loan with lower interest for SMEs.
Unsecured loans: the bank can assist the firms to add more capital and buy more
fix assets without guaranteed capital.

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SME Smart Credit: is introduced in order to supplement working capital for
small enterprises’ business, production activities as well as purchase of fixed
assets. This product is desired to be a smart and excellent solution for the

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operation.
Business financing loan to SME customers secured 100 % by real estate.
Corporate Account Overdraft: it is a optimal solution to face the unforeseen demand.


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Firms can be support capital in short term in manufacturing
Syndicated loans: VP bank make alliance with other credit institution in order to extend

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the loans for customers in which VP Bank or others become arrangers
Guarantee: VP Bank offer some kind of guarantee in different cases. Tender
guarantee, payment guarantee, import-export tax payment guarantees,
performance guarantee, etc can help the firms to increase the trust and prestige

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during doing business in Vietnam or overseas.
Some traditional loans: Installment working capital Loans, Ordinary medium
and long - term loans

 International payment
- International money transfer: help firms can pay or receive money from
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overseas.
Authorized export collection: the bank will represent for customer to return

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money from importers
Authorized import collection: importer transfer the right of receive, check and



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notify the documents from exporter’s bank and make the payment.
Letter credit for import or export
Cash management
VPBiz debit card/ credit card
Cash pooling: VPBank provides this optimal financial management service to
help customers automatically transfer money between accounts at VPBank to
concentrate financial resources on the parent company for maximum

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profitability and control of receipts and payments of member units
Periodic transfer: based on the authority from customers, VP bank will transfer
to beneficiary a determined sum of money that ensure the maximum pre-defined
balance on specific day of month.

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
b.


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Derivatives products
Foreign exchange forward contract:
Foreign exchange spot contract
Foreign exchange swap contract
Foreign exchange derivatives and options.
Logistics service
For individual
Saving account
Easy saving: customers can increase the deposit without limit times, amount and

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duration.
Regular saving account with interest paid at maturity
Saving account with interest paid in advance is suitable for people who want to

cover their unexpected expense
- Overnight saving
- Prosperity saving with floating interest rate
 Personal service
- Receive money via Western Union online.
- Payroll service: firms can pay salaries to their employees automatically based on
period
- Domestic/ International remittance service
- Foreign exchange services
- Deposit, withdrawal services for VPBank Sercurities account
 Loans

- Household business loans
- Personal overdraft loans
- Installment loans financing working capital for household business
- Personal home loans
- Personal loans for house construction and renovation
 Card services
VPBank offers many different type of card that can suitable for various of
people.
- VPBank Stepup credit card
- VPLady credit card
- Virtual payment card
- Mc2 credit master card
- Etc.
 Insurance
VPBank offers two main type of insurance:
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Insurance for women – VP Lady Care
Comprehensive Medical Care Insurance – VP Medi care

1.2.4. SWOT analysis of branch

a. Strengths:
- The branch is located at good place in Hoang Dao Thuy Street. Besides

convenient transportation, it also in place where high income people live around
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as well as many restaurants or services are operating.
The branch has high skill and experienced employees in banking who can apply
the modern banking application. The candidates need to be through the
professional recruitment process with strict and clarified criteria if they want to

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be hired.
The products and services are diversified for different clients such as domestics
or international residents, personal or SMEs, etc. "VP Bank has been
implementing a wide range of payment solutions, investment and new lending
flexibility and added convenience to suit the needs of customers" - Mr. Kalidas

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Ghose said.
Applying the latest technologies can assist the bankers to manage and support
the operation faster and safer. The customers also can use banking services
everywhere and every time. Through IT infrastructure, the bank has channel for
marketing and distributing products leading to approach more potential

customers.
b. Weakness
- The THNC branch is official independence branch in 3 years so the structure is

still quite simple. Some specialized departments like international payment and
remittance department, debt recovery office have not set up yet, it leads low
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working performance of whole branch.
The health of finance is not good in some cases. The branch do no have
sufficient capital to support demand of firms.

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Although the branch offers many kinds of product and service, the total revenue
still depends on the credit and saving deposit from residents. The marketing
channels may be in trouble with introducing and attracting customers.

c. Opportunities
- VP bank focus on individual customers and SMEs, while two sectors remain the

growth rate in next few years. The branch can continue exploiting this
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segmentation and improving the customer care.

International integration can help the bank to run operation more professional,
specialize the product and service, manage risk and credit effectively as well as
take more advantage of capital. In addition, VP Bank can approach newest
technologies in banking systems to create and support for new type of products.
Cooperating to other banks opens opportunities to exchange, international
cooperation between VP Bank and commercial banks in monetary operations,
proposed solutions to strengthen supervision and risk prevention, thereby
enhancing the prestige and status of the system VN banks in international

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transactions.
Economic integration enlists facilitate capital, technology and staff training,
promotion of comparative advantages of the VP to keep up the international

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competition requirements, expand overseas markets.
Collaborating foreign firms allows foreign banks to participate in all the banking
services in Vietnam. In this situation, the bank has to force to dig deeper
specialization banking, bank management, asset management liabilities - assets
Is there & risk management, improved credit quality, enhancing capital
efficiency, service. As a result, VP Bank should promote strength is its retail
banking more, on the basis of existing customer loyalty

d. Threats
- Other competitors also try to improve their own systems and collaborate with

each other, that can increase capable of competing in market. The branch will
also face to strong competitive by new branch of others bank in same place.


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Domestic legal systems, market institutions are incomplete, inconsistent and
consistency, inadequate compared to the requirements of international
integration of banking. Economic integration, increased international
transactions and the risk capital of the banking system, while the management
mechanism and information system of banking supervision is still very

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primitive, is not consistent with international practice.
The changes of technology caused the technology risk is unavoidable. However,
in the banking sector, only a small change in technical systems will change

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gained profit many times.
The issue is a top concern of human resources and incentives to work in the
current bank. Brain drain problem is unavoidable when open integration. VP
takes the salary policy and reasonable remuneration to attract and retain good

employees.

Chapter 2. Research of operation of VP Bank
2.1 Some main activities
2.1.1 Card activities
Alongside the advancement of the economy, the interest of utilization grows quickly.
Accordingly, people will find a payment method that is fast, security and convenient.
In Viet Nam, those propensities of utilizing cards in daily transactions is getting to be
progressively prominent. In addition, using high technology in baking system enabled
banks to complete their techniques for card payment, fulfilling the necessities from
claiming clients. VP Bank's achievement may be also reflected in the performance of
the card issuance. Besides offering some new types of cards, VP bank build more Atm
as well as POS to increase ability of using card.. VP bank also create network payment
with other business units like restaurants, business centers, hospital… can expand the
card acknowledged units in the city area, upgrading card installment operations.

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Table 2.1: New issued cards of VPBank Trung Hoa Nhan Chinh 2012-2015
2012
Numbe Proportio

2013

Numbe Proportio

2014
Numbe Proportio

2015
Numbe Proportion

r
2185

n
83.1%

r
3679

n
83%

r
5400

n
84.7%

r
5600

80,9%


Internationa

370

11%

654

14.7%

702

14.1%

950

13,7%

l debit card
Credit card

75

2.8%

102

2.3%


270

4.3%

370

5.2%

Domestic
debit card

(Source: Annual report of VPBank)

According the chart, issued card in branch increased gradually from 2012 to 2014.
The branch issued 5400 domestic debit cards in 2004 which is double increase from
2012 with 2185 cards. International debit card had high growth in 2013 with 654 cards
from 2012, but in 2014 it just has 7,3% positive changes as 2013. Although credit card
occurs small proportion, it quietly sharp increase about 260% compared to 2012.
Generally, issuing cards is one of many other activities of bank, however, it can reflect
partly the effective of direction of bank in sales, marketing. By researching and
diversifying the market segment in right way, the bank can approach more type of
customers. From 2013 to 2014, VPBank differentiate a few new cards for example,
international prepaid card VP Passport, VPBank Visa SmartCash, credit card VP Stepup, VP Lady. Besides, Visa VP woman had been honored “Banking Product Vietnam
2014” by organization Global Banking & Finance Review (GBAF) of England.
2.1.2 International payment activities

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VP Bank was the 8th consecutive awarded "The Bank has international payment
quality excellence" from Bank of New York Mellon The Bank of (BNYM). This is an
annual award to honor the bank has an international payment transaction rate high
standard power (Straight Through Processing - STP), one of the important criteria for
assessing the quality of the automatic payment Bank. According BNYM, in 2013, VP
Bank STP rate to nearly 98%.
Table 2.1.2: Indicators of international payments 2012-2014 (Unit: Thousand
USD)
Import L/C
Export L/C
TTR
Collection of

2012
176
138
130
39.6

2013
250
234
180
49.9


2014
570
520
250
57.2

Payment
(Source: Annual report of VPBank)

Vietnam’s economy is in world integration process so the demand of international
payment increase indispensably. The value of import L/C grew sharply at 2014 with
570 thousand dollars compared to 250 thousand dollars in 2013. The following is value
of export L/C that reached 520 thousand dollars in 2014. The value of TTR also have
steady growth through 3 years. In conclusion, VP bank can attract more and more
customers using their baking system by professional experience as well as modern
technologies.
2.1.3 Capital mobilization

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The funds raised will determine the size and orientation of banking operations. If
capital is regarded as inputs in the process of business of a commercial bank, the
mobilized capital is regarded as regular inputs, most major banks. Banks perform credit

operations, investments mainly rely on this source. Mobilized funds have a major
influence on the results of the commercial bank operations. Specifically, if the bank
raised abundant capital at low cost it can expand investment credit and higher profits.
In contrast, with limited scale and high costs, the bank may face difficulties in its
business activities. Cost of bank raise capital is closely related to the type of interest
rates on deposits, savings deposits interest rates and interest rate types of debt
instruments issued by banks.
Table 2.1.3: Capital Mobilization of VPBank Trung Hoa Nhan Chinh 2012-2014
Mobilized Capital
Personal
SMEs

2012
2013
1100
1800
980
1240
120
560
(Source: Annual report of VPBank)

2014
2552
1562
990

In 2012, VPBank THNC branch started to operate as independent branch from Kinh
Do branch, however, it needed to face the trouble in capital because of economy crisis
in 2008. The State bank had 6 times to decrease saving deposit rates (3-6% per year) in

2012 compared to 2011. The low interest rate made customer do not hold money in
bank instead of making other investments that can offer higher interest rate than the
bank can do. Fortunately, some customers try to saving deposit in long term to have
suitable interest rate , therefore it can help the branch can stabilize their funds. Until
6/2012, the State bank has remove the rate ceiling for terms of more than 1 years, and
continued remove for short term in 1 year later. VP Bank can attend to race of interest

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rate to mobilize more capital from social. After many efforts in 3 years, the branch can
mobilize more and more capital from personal and SMEs that reached 2552 billion
VND, it increased about 60% as statistic in 2012.
In 2015, VP Bank also have some highlight achievement in mobilized capital. Ended
the third quarter of 2015, the VP Bank's indicators continue to grow strong, stable and
sustainable. Total deposits reached nearly 148 trillion, exceeding 5% of the yearly plan
and up 22% compared to the end of 2014. Charges reached good results, growing 51%,
has to be part of the aim of reducing dependence on revenues from interest activities in
the structure of revenues. Until 09/30/2015, VP Bank has completed processing 100%
of bad debt with the central bank committed to contribute actively to the goal off bad
debts of the whole industry. Notably, VP Bank has handled nearly 1,250 billion is
collected in part due to repay customers. Consolidated total assets as at 09/30/2015 VP
Bank reached 195 004 billion, an increase of nearly 32,000 billion VND
(approximately 19%) compared to the end of 2014 and completed 96% of the plan.

Continue to pursue the strategy aims to raise capital to expand base "core deposits"
include those who are relatively stable, according to the VP Bank in different periods,
total deposits (deposits restaurant, deposit and loan associations other credit institutions
and issuing valuable papers) at the 31/12/2014 reaching 146 991 billion, up 41% over
the same period in 2013, while customer deposits reached first on 100 trillion, reaching
108 354 billion, exceeding the 2% target set AGM. Generally during the period 20102014, CAGR (CAGR) of customer deposits was approximately 46%.
In 2014, VP Bank always follow the fluctuations of the funds and use of funds for
measures to adjust timely to mobilize capital to secure liquidity at all times. Liquidity
contingency plan has been adopted and is always ready to respond in crisis situations
on solvency, while including the cash flows offset action in an emergency.
In terms of customer deposits: funds raised from individuals rose from 8926 billion and
economic organization nearly 15,000 billion compared to 2013. Thus, the mobilization
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has been restructured in a positive direction, sticking Bank strategy 2012-2017 which
set out: in addition to promoting growth in the private customer segment tradition, VP
Bank has expanded to fully exploit in the corporate customer segment to diversify
sources force, while increasing the stability of funding and effective contribution to the
goal of reducing the cost of capital.
2.1.4 Credit activities
Credit activities is one of the sections the bank need to focus on because it can make
profit as well as is the important criteria to rate the performance of bank. By
undertaking some measure such as training employees with deep knowledge in

crediting and consulting, increasing the trust in customers as well as brand image of
bank, it helps crediting department to operate more effectively. VP Bank THNC can
lend more money to small and medium enterprises and individual customers.
Through 3 years, total lending from bank had an increase. At the end of 2015, the total
debit balance of VP Bank THNC reached 890 billion VND; increased 41.3% compared
to 2013 and 270.8% compared to 2012.
Figure 2.4: Credit activities of VP Bank Trung Hoa Nhan Chinh 2012-2015
(Unit: Billion VND)
Based on the figure, the bank pays much attention to short term loans that usually
occurs 75% in total except in 2012. Although with medium and long term loans, the
bank can generate more profit, the long time and huge amount money can put the
whole bank in danger in any time. Another reason is that enterprises which usually
borrow in long term absorbs the capital from bank slowly, individual credit seems to
grow continuously in near future according to the Kalidas Ghose – vice director of VP
Bank. However, the branch still support to demand of long terms loans. However,
thanks to deep knowledge in risk management co-oparate to flexible products, 450
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billions VND in 2015 could be transfered in contrast 115 billions in last 3 years.

VND loans
Foreign


2012
240
currency 0

loans
Overdue debt ratio

2013
630
0

2.6%
2.3%
(Source: Annual report of VP Bank)

2014
890
100
1.8%

Highlights we could find was that the increase in foreign currency loans in 2014,
while in 2012 and 2013, total loans were paid all in VND. This difference may stem
from several causes. First, reduce lending rates in USD may have stimulated the
demand of the market. starting in 2013, interest rates fell 1% compared to 2012, in
which short-term interest rate of about 4-6% and long-term loan of about 6 - 7.5%.
Moreover, USD is hard to fluctuated as VND, it will help the debt not disturbed by the
exchange rate between VND and USD. Also, in 2014, the exchange rate was stable and
within the control of state-owned banks, the firms prefer using USD – strong currency
than using VND in transactions.
In 2012, in the difficulty in the financial market, the individuals and enterprises had

encountered difficulties in repaying the debt. Besides, the ability of credit management
is still incomplete and weak. Therefore, the overdue debt ratio is quite high, account for
2.6% of total debit balance. Until 2014, using experience and banking tools, the
management team could estimate risk more exactly, so it was a successful year of VP
Bank THNC in the acquisition and processing of overdue debts. Over debt of branch
has decreased from 2.6% in 2012 to 2.3% in 2013 and to 1.8% in 2014.
Another point of credit activities is that personal credit became primary orientation of
retail banks due to variety of products and right strategies. Mr.Kalisdas Ghose said that
tough situation of economy have not huge negative impact on personal consumption

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demand like other economic sectors. It is growing steadily that can force personal loans
at VP Bank.
VP Bank appealed 57% new customers in 2013 compared to same period in 2012,
manager expect the trend can occur in the future. To implement the personal credit
activities, the bank will make some new kind of products and services such as payment
method in card services, flexible loans with concise procedures for customer’s asset
purchase, investment products.
In 2015, VP Bank is selected to test method of governance and risk capital under Basel
II standards that is both an honor but also a challenge. Basel II implementation
roadmap help the operation of VP safer, more stable due to the level of risk
management is strengthened, capital is managed in a more efficient way. At the same

time, the deployment also affects interest rate differential because of the increase of
cost of capital. To tackle problem, the Board of Directors VP Bank has taken active
measures to protect the interests of shareholders and investors as improving
management efficiency to reduce operational costs, specialization thoroughly to
increase labor productivity ...
VP Bank ‘s representative said: "In 2015, VP Bank has successfully implemented risk
management system comprehensively (end-to-end) for personal and SMEs, since new
loan quality improved 4 times, risk provisions fell. Besides, debt collection system is
set up, it leads that rate debt group decreased significantly compared with the same
period last year. Series of major projects to upgrade IT systems is prepared for the
deployment of advanced technologies. Moreover, the Board of Directors VP Bank is
also particularly interested in building corporate culture being indispensable on the
path leading affirmed throne in the market.
In general, after long time of development, the bank has tight operation to manage risk
and control risk of loan portfolio. Providing more diversity of loan product as well as

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relevant strengthening risk management policies to attract more customers is a big
purpose the bank pursue in long term.
2.2 Business performance
Table 2.3: Operating results of VPBank Trung Hoa Nhan Chinh 2012-2014
(Unit: billion VND)

2012

2013

2014

4.788

12.471

16.097

Net revenue from interest

4.232

10.164

13.211

Net revenue from fees and services

0.346

0.890

1.952

0.121


0.768

0.590

Net revenue from other activities

0.089

0.649

0.344

Operating expenses

7.425

7.437

7.602

Profit before tax and risk provisions

-2.637

5.034

8.495

Total net revenue
including:


Net revenue from foreign currency
trading

With high effort in development and improvement in baking systems as well as
experiences, the branch had remarkable achievement. The total revenue had sharp
increase from 4.788 billion in 2012 to 16.097 in 2014, it means the branch can remain
the growth rate in double for 2 years. Thanks to effective operation and cost
management, the profit also rocketed to 8.495 billion in 2014 while in 2012 they lost
2637 billion.

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