Post on 24-Jan-2023
NATIONAL ECONOMIC UNIVERSITY
ADVANCED EDUCATIONAL PROGRAM
---------------------------------
INTERSHIP REPORT
LIENVIET POST BANK
Student’s name : DINH DO VIET DUNG
Student ID : CQ 520588
Class : High Quality Educational Program in Enterprise
Intake : 52
Supervisior : DR TRUONG THI NAM THANG
Hanoi - 2014
INTRODUCTION
Vietnamese economy is facing a period of globalization,
competitiveness is raising increasingly, business
strategy planning is the one important part that every
company must take serious considerations and
implementations in order to make a better and sustain
business environment. Despite being one of the youngest
banks in Vietnam, LienVietPostBank (LVP) has overcome
many challenges and had some significant achievements
paving the way for future development. During the last 4
years, LVP continuously maintained its sustainable growth
and strengthened its position in the banking market. In
addition, LVP has a clearly defined business strategy,
which is to balance between profitability and sustainable
development, stay closer to farmers and focus more on
agriculture and rural development and afford to increase
their access to financial service. This proposal aims to
providing a good and basic idea of building a business
strategy for the company period 2014 to 2017. This is
only for reviewing purpose. Many thanks to bank's staffs
and directors, special to Mr. Trinh Ha Anh, and also
thanks to my instructor Ms. Truong Thi Nam Thang who
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stick with me and help me to achieve the objectives.
This proposal is broken into three parts:
CHAPTER I: OVERVIEW OF LIENVIET POST JOINT-STOCK
COMERCIAL BANK
CHAPTER II: EVALUATION SITUATION AND BUSINESS PERFORMANCE
OF LIENVIET POSTBANK FROM 2010 TO 2013
CHAPTER III: PROBLEMS AND SOLUTION FOR DEVELOPMENT IN THE
FUTURE
3
ContentsINTRODUCTION......................................................2CHAPTER I: OVERVIEW OF LIENVIET POST JOINT-STOCK COMERCIAL BANK...4
1. General information..........................................4
2. Legal information.............................................7
3. Vision & Strategy.............................................7
4. Business scope................................................8
5. Product & services............................................9
6. Company Structure............................................10
7. Performance highlights.......................................12
CHAPTER II: EVALUATION SITUATION AND BUSINESS PERFORMANCE OF LIENVIET POSTBANK FROM 2010 TO 2013.............................131. Overview of business environment.............................13
2. Total assets.................................................14
3. Profit before tax............................................15
4. Capital mobilization.........................................16
5. Loans and advances...........................................17
6. Payment activities...........................................18
7. Other support................................................19
8. HR & Training activities.....................................20
9. Coporate social responsibility...............................21
CHAPTER III: PROBLEMS AND SOLUTION FOR DEVELOPMENT IN THE FUTURE.221. Profit in recent year is not achieved as expected............22
2. Other operating activities problems..........................23
3. Recommendation for developing in the future..................23
4
CHAPTER I: OVERVIEW OF LIENVIET POST JOINT-STOCKCOMERCIAL BANK
1. General informationLien Viet Post Joint Stock Commercial Bank
(LienVietPostBank), formerly known as LienVietBank(LBP),
was granted it Operation License No 91/GP-NHNN on March
28, 2008 by the Governor of the State Bank of Vietnam and
became the first newly established joint stock commercial
bank since 1993.
Established in Hau Giang Province – the heart of
Southwest Vietnam, LVP was one of the top ten commercial
banks in Vietnam in terms of chartered capital at that
time. Since its inception, the bank has paid attention to
applying modern technology, recruiting and retaining
talents and training staffs which have created solid
foundation for a fast and sustainable development.
Pursuing the strategy of sustainable development and
drastic management of the Board of Management and the
Board of Directors, after 5 years of operation, has
confirmed its solid position in the banking and financial
market in Vietnam by sizable total assets, healthy
profitability, modern technologies, wide branch network,
excellent quality of service, good human resource and
sound corporate governance with international standards.
5
In 2011, Vietnam Post Corporation (Vietnam Post), a
member of Vietnam Post and Telecommunication Group
(VNPT), became the Bank's biggest shareholder by
contributing capital to the Bank equal to the value of
the Vietnam Postal Savings Service Company (VPSC) and in
cash. Vietnam Post Saving Company (VPSC) is a subsidiary
of Vietnam Post Corporation (VNPost), which is a member
of Vietnam Post and Telecommunications Group (VNPT).
Since 1999, through VNPost’s network, VPSC has been
offering saving products and services such as remittance,
collectives to customers mainly in rural areas.
LVP and VNPost signed a 50-year-co-operation agreement
which allows LPB to be an exclusive bank in providing
postal saving services and other banking services through
out the network of more than 10,000 transaction points of
VNPost. On July 29th, 2011, LienVietBank declared the
merger and changed the name to LienVietPostBank. As of
December 31st 2012, VNPost increased their holding to
12.54% stakes in LPB. This gives LPB the opportunity to
be present in 63 cities and provinces with 90% coverage
at communal level around the country. Additionally, the
huge client base of more than 400,000 individual clients
and strong relationship with the World Saving Bank
Institution (WSBI) are great advantages that LPB acquired
through the merger.
6
In the next 10 years, it is expected that the Bank can
meet its goal of expanding full banking services to at
least 80% of more than 10,000 post offices throughout
Vietnam, including mobile wallets/cards, mobile micro-
finance services, banking transaction and other banking
products and services.
International relations: Since its establishment in 2008,
the Bank has approached and built relationships with
several international organizations and foreign financial
institutions such as:
IFC – International Finance Corporation: May 2011,
LVP’s initial trade line through IFC’s Global Trade
Finance Program (GTFP) reached USD 5 million. January
2012, the trade line is increased to USD 20 million to
help SMEs sustain import and export activities.
World Bank: In May 2012, the Bank participated in the
third Rural Finance Program III sponsored by the
International Development Association, a member of
World Bank, to support end-borrowers including
individuals, households and SMEs in rural areas.
WSBI – World Saving Bank Institute: In July 2011, LVP
officially became a member of WSBI, a global voice of
the world’s retail and saving banks. In November 2011,
WSBI with Bill & Melinda Gates Foundation began
assisting LVP in implementing the project of “Working
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with saving banks to double the number of savings
accounts for the poor”.
JICA – Japan International Cooperation Agency:
September 2011, LVP participated in the third stage of
SMEs’ financing project of JICA.
JP Morgan Chase, Wells Fargo and Industrial and
Commercial Bank of China (ICBC) are currently important
partners of LVP and play vital roles in assisting the
Bank to enhance trade finance for SMEs.
Table 1: Historical highlights
Mar
2008
Received operation license from the SBV
(formerly known as Lien Viet Joint-stock
Commercial Bank)Oct
2009
Increased chartered capital to USD 193 million
Jul
2010
Signed cooperation agreement with Wells Fargo
in Washington DCMay
2011
Officially formed relationship with IFC
through the GTFP with an initial trade line of
USD 5 millionJul
2011
Merged with Vietnam Postal Savings Company
(VPSC), and changed name to LienVietPostBank
Became a member of the World Savings Banks
Institute (WSBI).Sep Successfully participated in SMEs’ financing
8
2011 via Japan International Corporation Agency
(JICA) loans.Nov
2011
Successfully called for support from WSBI &
IFC in consulting microfinance development
strategy & competitiveness improvement. Jan
2012
On January 16th, 2012, the LPB’s GTFP trade
line was increased to US 20 million by IFC,
allowing LPB to further help SMEs sustain
import and export activities.May
2012
Successfully participated in the third Rural
Finance Program built by
The World Bank to support end-borrowers which
are individuals, households and SMEs in rural
areas.2013 Ranked 39th in the TOP 500 biggest private
enterprises in Vietnam according to VNR500.
9
2. Legal information
Abbreviation in English: LienVietPostBank
Headquarters: No. 32, Nguyen Cong Tru St, Ward 1, Vi
Thanh City, Hau Giang Province.
Business Registeration No.: 6300048638 (the banking
licence was issued by the State Bank of Vietnam and is
valid for 99 years from the issuing date).
Tax No: 6300048638
SWIFT Code: LVBKVNVXXXXChartered Capital: VND6,460 billion (around USD310 million as of June 30th , 2013).
Corporate Website: http://www.lienvietpostbank.com.vn/
Email dichvukhachhang@lienvietpostbank.com.vn
Major Shareholders
Him Lam Joint Stock Company (10.44%)
Vietnam Post Corporation (Vietnam Post, 12.54%).
Strategic Partners
Vietnam Bank for Agriculture and Rural Development
(Agribank).
Wells Fargo Bank (The US).
Credit Suisse Bank (Switzerland).
Oracle Financial Services Software Limited.
10
3. Vision & StrategyMission: provide customers with diversified and
tailormade products which benefit the Bank and society at
large.
Vision: Become a leading retail & universal bank
targeting the mass market.
Strategy: pursue a retail customer-oriented strategy by
delivering excellent services
Expand network coverage to target the untapped rural
area and small and medium enterprise market segments.
Approach customers through advanced, user-friendly,
and cost effective technologies
such as Phone banking, Mobile banking, Internet
banking and Mobile money (Vi Viet)
Design products based on the needs of customers and
following standards of Simplicity, Comprehensibility,
Cost effectiveness.
Place transaction points at convenient locations and
in a simple and friendly arrangement manner.
Build corporate culture on 3 core values: Discipline,
Creativity and Humanity.
4. Business scopeLVP is providing various products and services as
follows:
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(i) Mobilizing Capital from deposits, certificates of
deposits, bonds, and valuable papers, borrowings from
other credit institutions, short-term loans from the
State Bank of Vietnam, andother types of capital
mobilization if allowed;
(ii) Granting credit to individuals, enterprises in the
form of loans, discounting commercial papers, discounting
valuable papers, guarantee, financial lease and other
types of granting credit if allowed;
(iii) Payment and treasury services;
(iv) Others activities such as equity contribution,
shares investment, participation in money market,
subsidiaries establishment, fiduciary activities, agency
on banking and insurance services and so forth.
Besides the aforementioned business activities, LVP has
also obtained permissions from the State bank of Vietnam
to offer other services such as Foreign exchange services
(includes international payment services, foreign
exchange trading activities in global market, etc…);
International investments, etc.
12
5. Product & servicesCapital mobilization products:
LPB provides various term deposit products with
competitive interest rates. Some typical products are:
term saving deposits with flexible principle withdrawal,
floating rate deposits, step-up deposits, automatic
investment accounts, studying abroad saving deposits,
high interest-rate deposits.
Credit products:
Typical retail banking products: Flagship products, for
example, car loans, real-estate loans, consumer loans,
mortgage loans, study overseas loans, agricultural loans
and home loans.
Typical corporate banking products: Short-term credit
line, export financing, LienVietPostBank guarantee
product packages, foreign bill purchase and agricultural
loans.
Electronic banking products:
In 2012, LienVietPostBank launched two breakthrough
services including Green Banking (products and services
with environment-protecting covenants and non-cash
transaction services) and New Generation Banking (product
and services targeting at children and parents with
assistance in educating personal finance management).In
13
addition to traditional services in domestic payment,
international settlement, cash management and property
keeping services, LienVietPostBank was also eligible for
providing State budget collection and electricity bill
collection service in 2012. LVP is about to implement
telephone bill collection service for Viettel Telecom
Group and Vietnam Computerized Lottery Company.
Regarding electronic banking, in 2011, LVP launched Vi
Viet E-wallet, a mobile money and online payment
platform. LVP believes that one of the most efficient
ways to reach viral is to shift the majority of cash-
based financial transactions into digital form through a
mobile phone or any digital interfaces. LVP is now in the
process of improving Vi Viet E-wallet to transform it
into an effective tool to access its un-banked segment
and mass market coverage.
Services:
LPB provides full range of services from domestic
payment, international settlement and cash management to
financial consultancy and property keeping services.
In 2012, LPB has successfully developed and launched two
breakthrough services which are Green banking (including
products and services with environment-protecting
covenants and non-cash transaction services) and New
Generation Bank (including products and services
14
targeting at children and parents with assistance in
educating personal finance management). Besides, LPB is
also eligible for providing State budget collection
service, electricity bill collection service and
completing procedure to launch telephone bill collection
service for Viettel Telecom Group and Vietnam
computerized lottery company.
6. Company StructureFigure 1:Organization structure of Lienvietpostbank’s
headquarters
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The Board of Directors
Mr. Duong Cong
MinhChairman
Mr. Nguyen Duc
Huong
Vice
Chairman
Mr. Nguyen Duc Cu Member
Mr. Tran Viet
TrungMember
Mr. Nguyen Dinh
ThangMember
Mr. Nguyen Van
HuynhMember
Mr. Pham Anh Tuan Member
Mr. Le Hong Phong Member
Mr. Do Ngoc Binh Member
The Board of Management
Mr. Pham Doan Son General Director
Mr. Le Hong Phong General Director
Mr. Doan Van ThangDeputy General
Director
Mr. Nguyen Minh Tri Deputy General
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Director
Mr. To Van ChanhDeputy General
Director
Ms. Nguyen Thu HoaDeputy General
Director
Ms. Nguyen Thi GamDeputy General
Director
Ms. Nguyen Thi Bich
Loc
Deputy General
Director
Mr. Nghiem Sy ThangDeputy General
Director
Ms. Nguyen Anh VanDeputy General
Director
Mr. Ho Nam TienDeputy General
Director
Ms. Nguyen Thi Thanh
Son
Deputy General
Director
Mr. Nguyen Van GamDeputy General
Director
Mr. Vu Quoc KhanhDeputy General
Director
Mr. Pham Anh DungDeputy General
Director
17
7. Performance highlights Table 2: Performance highlights from 2010 to 2013 (Unit:
VND billion)
Performance highlights 2010 2011 2012 2013
Total assets3498
5
5613
2
6641
3
7959
4
Sharesholders’ equity 4105 6594 7391 7271
Chartered capital 3650 6010 6460 6460
Total deposits3042
1
4814
8
5762
8
7109
2
Total loans and advances1011
4
1275
7
2932
5
3078
9
Profit before tax 759 1086 968 664
Net profit after tax 683 977 868 566
Since its establishment in 2008, LVP’s total assets has
increased rapidly and stably, from VND 7,453 billion in
2008 to VND 79594 billion at the end of 2013. This
demonstrated the great effort of the bank in the context
of economic difficulties.
Despite difficulties in the banking sector LVP still
generated a positive result in 2013, thanks to proper
business strategy and great effort of the whole bank. In
18
2013, the bank’s profit before tax was VND 664 billion,
the dividend payout ratio was 8%, and the provision were
sufficiently allocated in compliance with the State Bank
of Vietnam’s regulations.
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CHAPTER II: EVALUATION SITUATION AND BUSINESS PERFORMANCEOF LIENVIET POSTBANK FROM 2010 TO 2013
1. Overview of business environmentVietnam, like the rest of Asia, has entered a period of
slower growth. The main reason was the difficulties in
both domestic and global economies. Many companies faced
with declining business activities and even with
bankruptcy risks. Beside the manufacturing and
agricultural sector, other industry sectors are being
adversely by slower growth and the Banking sector is no
exception. With lower credit growth, tighter margins and
high levels of non - performing loans, it is evident that
banks are operating in a challenging environment.
However, there are still positive signs. The national
economy has shown signs of gradual recovery which will
bring in more investment opportunities and business
improvement. What’s more important is that LienVietBank
has reinforced its brand awareness, reputation and
influence among clients and on the financial market. This
is not only due to its effective business operation but
also the commitment to sustainable development by
fulfilling the social responsibility as a corporate
citizen, specifically the credit program for agriculture
and rural development.
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2. Total assets Chart 1:Total assets from 2010 to 2013
2010 2011 2012 20130
10000
20000
30000
40000
50000
60000
70000
80000
90000
As of December 31st, 2010, LienVietBank’s total assets
reached VND 34,985 billion.
As of 31st December 2011, our total assets had reached
VND 56,132 billion, increased 60% or VND 22,147 billion
compared to the previous year. After 4 years of
operation, we have increased significantly in total
assets, joining the group with fast total asset
development and paving the way to become one of top 10
leading commercial banks in Vietnam.
From 2010 to 2012, LienVietPostBank’s total assets has
increased rapidly and stably, from VND 34,985 billion in
2010 to VND 66,413 billion at the end of 2012. This
demonstrated the great effort of the bank in the context
of economic difficulties.
21
As of December 31st, 2013, LienVietBank’s total assets
reached VND 79,594 billion.
3. Profit before taxChart 2: Profit before tax from 2010 to 2013
2010 2011 2012 20130
200
400
600
800
1000
1200
At the end of 2010, profit before tax achieved VND 759
billion.
At the end of 2011, profit before tax stood at VND 1,086
billion or an increase of 43.08% in comparison with 2010.
The accumulated profit from 2008 to 2011 was VND 2,829
billion which in our view is a solid foundation for our
development and growth in the future. It is a remarkable
achievement taking in consideration the difficult
business environment in 2011.
Despite difficulties in the banking sector,
LienVietPostBank still generated a positive result in
22
2012, thanks to proper business strategy and great effort
of the whole bank. In 2012, the bank’s profit before tax
was VND 968 billion, the dividend payout ratio was 10%,
and the provision were sufficiently allocated in
compliance with the State Bank of Vietnam’s regulations.
At the end of 2013, profit before tax achieved VND 664
billion, an decrease of 31.40% versus 2012.
4. Capital mobilizationChart 3: Capital mobilization from 2010 to 2013
0
10000
20000
30000
40000
50000
60000
70000
80000
Deposits from customers
Deposits fromcredit institutions
As of December 31st 2010, total capital mobilization of
the bank reached VND 30,421 billion. In which, deposits
from customer (corporate and individuals) were VND 15,439
billion, accounting for 50.75% of total capital
mobilization. Deposits from credit institutions (borrowed
from the State Bank and other financial institutions)
23
were VND 14,982 billion, accounting for 49.25% of total
capital mobilization.
As of 31st December 2011, total mobilized capital reached
VND 48,148 billion or an increase of 58% from 2010, which
is an equivalent of VND 17,727 billion. Deposits from
corporate and individual customers were VND 26,663
billion accounting for 55.38% of total mobilized capital
and deposits from credit institutions were VND 21,485
billion, or approximately 44.62%.
In 2012, the State Bank of Vietnam cut the interest rate
six times, from 14% to 8%, which made the mobilization
market sharply fluctuated. To deal with this situation,
the bank diversified its products, improved service
quality and issued various customer service policies. The
actions have helped the bank not only retain the existing
customers, but also reach new customers. Besides, the
capital mobilized through the Postal savings system has
been stable and grown steadily with the total amount of
VND 10,201 billion at 31st December 2012, accounting for
24.68% of total bank deposits. The total bank deposits
grew by 19.69%, to end the year at VND 57,628 billion.
As of 31st December 2013, total mobilized capital reached
over VND 71000 billion or an increase of 23% from 2012.
Deposits from corporate and individual customers were VND
55,558 billion accounting for 78.12% of total mobilized
24
capital and deposits from credit institutions were VND
15,558 billion, or approximately 21.87%.
5. Loans and advancesChart 4: Loans and advances from 2010 to 2013
2010 2011 2012 20130
5000
10000
15000
20000
25000
30000
35000
Loans to customersLoans to credit institutions
As of December 31st 2010, total loans and advances of
LienVietBank was VND 10,114 billion. Loans for corporate
and individuals reached VND 9,834 billion, accounting for
97.23% of total loans and advances. Among these, loans
and advances for enterprise dominate with VND 7,170
billion which accounts for 72.91% of total loans and
advances for customers. Individual credit loans reached
VND 2.664 billion.
As of 31st December 2011, loans and advances were VND
12,757 billion.
25
In compliance with the State Bank of Vietnam’s
orientation and the Government’s policies, in 2012,
LienVietPostBank focused on lending to prioritize sectors
such as manufacturing, agriculture and rural areas.
Lending to those sectors such as real-estate, finance was
tightened to ensure loan quality and increase capital
efficiency. As of 31st December 2012, the total loans and
advances to customers was VND 22,992 billion, in which
41.02% of its outstanding loan was to finance agriculture
and rural areas in Vietnam.
As of December 31st 2013, total loans and advances of
LienVietBank was VND 30,789 billion. Loans for corporate
and individuals reached VND 29,548 billion, accounting
for 95.96% of total loans and advances. Loans and
advances credit institutions dominate with VND 1,241
billion which accounts for 4.03% of total loans.
6. Payment activitiesAfter 3 years of operation, LienVietBank has built and
improved the domestic payment system via the channels:
the interbank electronic payment channel of SBV (CITAD),
the payment system of Vietnam Bank for Agricultural and
Rural Development (VBA) and the payment system of
Vietcombank (VBC-Money). The Bank has also completed the
implementation of the Western Union payment application
with the Bank for Investment and Development of Vietnam
26
(BIDV). LienVietBank always pays attention to carry out
and develop the centralized international payment
activities, processing transactions at the Payment
Center, to reduce risk and enhance prestige and service
quality. Together with developing the existing
relationships the Bank also has continued searching and
expanding new relationships with local and foreign banks,
representative offices of foreign banks in Vietnam.
Result:
2011 was a year of dramatic economic turbulence causing
the decrease in trade flows both domestically and
globally. Vietnam was not an exception, with the
country’s export and import activities suffering from
international financial crisis and economic downturn.
Nevertheless, LienVietPostBank witnessed the significant
increases in international payments with import revenue
at USD 551.84 million, a 146% increase from 2010 and
export revenue at USD 120.62 million, a growth of 43% in
comparison to the previous year. International payment
activities contributed a large portion of revenue coming
from services.
In 2012 International payment volume through
LienVietPostBank increased 30.62% to nearly USD 598
million in comparison to that of 2011. Especially, the
volume of export payment by L/C through LienVietPostBank
27
reached USD 63 million, an impressive growth of 207% in
comparison to that of the previous year. International
payment activities of LienVietPostBank were made in the
U.S, Taiwan, Hong Kong, Singapore, Japan, South Korea,
China and the Europe.
In 2013 International payment volume through
LienVietPostBank reached over USD 500 million in,
decreased 19.6% comparison to that of 2012.
7. Other supportNetwork expansion
LienVietBank is constantly pursuing the network
development strategy. By December 31st, 2010,
LienVietBank had established a network of 45 transaction
points throughout the country, including 01 Head Office,
01 Transaction Center placed in Hau Giang Province, 15
branches and 29 transaction offices.
Since 1st July 2011, LienVietPostBank has officially
utilized the system of more than 10,000 transaction
points , after Vietnam Post Corporation has contributed
capital to the bank through the corporate value of its
affiliate, the Vietnam Postal Savings Services Company
(VPSC) and through cash. With the wide network spreading
over 63 provinces/ cities and more than 10,000 wards
nationwide, LienVietPostBank would be able to bring
28
modern banking products and services to all customers,
including those who are living in remote areas.
As of 3/2014, the number of branches amounted to 82
across the country. LienVietPostBank is expected to be
present in 56 provinces across the country by the end of
2014.
Technology
Oracle Form – LPB’s Core Banking system utilizes Oracle
Form & Report to support the full spectrum of banking
operations.
GPS - To provide higher safety and security,
LienVietPostBank‘s IT system uses the Global Positioning
System
(GPS) which monitors the network operations, enhances
cashflow management and onsite collection services.
Daily reports & Post Office Transactions – LPB’s IT team
has developed its own core system for the Postal
Transaction Office System which fully serve the needs of
more than 10,000 transaction points of VNPost to connect
and integrate with the current core banking system of
LPB, allowing efficient network management of more
than10,000 postal transaction offices across 63 provinces
nationwide.
29
Recognitions - IT Head of LienVietPostBank received the
CSO award which reflects the Bank’s remarkable effort in
providing a more secured information technology system.
8. HR & Training activitiesIn the past 5 years, the number of employees at
LienVietPostBank increased rapidly in line with the
network development of branches. Compared to the time the
Bank was set-up, the current number of employees
increased more than fourfold to nearly 2,500. Besides,
20,000 additional employees of Vietnam Post Corporation
(VNPost) are also involved in providing the bank’s
services at over 10,000 postal transaction offices after
the stake contribution of VNPost to LienVietPostBank
through the corporate value of one of its subsidiaries –
the Vietnam Postal Savings Service Company.
In addition to the growth in the number of employees,
LienVietPostBank has also paid great attention to the
quality of human resources. This could be seen by
qualified applicants and training programs for their
employees. The majority of LVP employees graduated from
leading domestic universities such as National Economics
University, Academy of Finance, Banking Academy, Foreign
Trade University and other prestigious universities in
the UK, United States, France, Australia, and Germany...
Currently, the ratio of employees who hold Master degrees
30
is 7% and Bachelordegrees is over 85%. After the
recruitment of a competent staff, the training is the
next step to build a team of qualified employees.
9. Coporate social responsibility“Integrating business and society” is LienVietPostBank’s
long-term operational orientation. Along with effective
business development, LienVietPostBank has committed to
contribute to the development of the community and
society through direct social charitable activities.
LienVietPostBank has focused on the following social
activities: financing the construction of education,
healthcare and culture premises; supporting the
sustainable development of agriculture and rural areas;
sponsoring for sport events and assistance for disaster
victims.
Currently, LienVietPostBank has built itself to be “The
best bank on Corporate Social Responsibility” in which it
pursues sustainable development and commits to operate in
accordance with its core values.
In 2013, LPB committed to contribute nearly USD 5 billion
donation in the following areas: Education & Culture
- Sponsor for construction of schools, bridges, public
healthcare stations, historical and cultural memorials,
granting education and training equipment. LPB has funded
various schools in over 20 provinces in Vietnam.
31
- Fund for Intellectual Talent Encouragement via
scholarship programs and education promotion funds in
coordination with universities and localities.
- Fund for the 5th Quang Nam Heritage Festival 2013
- Sponsor for Elderly Association in Phu Tho Province
- Other programs to reduce poverty
32
CHAPTER III: PROBLEMS AND SOLUTION FOR DEVELOPMENT IN THEFUTURE
1. Profit in recent year is not achieved as expected
Net interest income 2,271 2,454 2,058 1,224
Net fee and commission income (184) (144) (40) 33
Net gain/(loss) from trading foreign currenciesand gold
7 32 103 50
Net gain/(loss) from trading of trading securities
- - -
Net gain/(loss) from salesof investment securities (9) (14) (23) 17
Net other income 54 (16) 4 4Income from investments inother entities - -
Operating expenses 1,191 1,036 940 511Operating profit before provision for credit losses
948 1,275 1,161 816
Provisions for credit losses 283 307 75 58
Profit before tax 664 968 1,086 759
As of 31/12/ 2012, profit before tax achieved VND 968
billion, an decrease of 10.86% versus 2011. At the end of
2013, profit before tax achieved VND 664 billion, an
33
decrease of 31.40% versus 2012 and an decrease of 38.85 %
compare with 2010.
Causes:
Vietnam, like the rest of Asia, has entered a period
of slower growth. The main reason was the
difficulties in both domestic and global economies.
Many companies faced with declining business
activities and even with bankruptcy risks. Beside the
manufacturing and agricultural sector, other industry
sectors are being adversely by slower growth and the
Banking sector is no exception.
In 2012, the State Bank of Vietnam (SBV) cut the
interest rate six times, from 14% to 8%, which made
the mobilization market sharply fluctuated. In 2013,
the interest rate remaining around 7%, many banks
face with the excess of capital. The bank is facing
with the excess of capital. With tighter margins,
profit before tax also reduce despite of both loans
and redits is higher.
Because of the high levels of non - performing loans,
the bank have to increase the provision for credit
losses amount. It‘s strong impact on profit result.
Network expansion cost in recent year increase
rapidly, so the operating expenses also increasing.
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2. Other operating activities problems Although they have been oriented to become a leading
retail bank, a specific marketing strategy has yet to
be made. The structure of individual customers
accounted low ration on both mobilization and
lending.
Risk management need improve: LienVietPostBank
doesn’t have early debt warning system.
The information technology system needs upgrade after
6 years woking.
3. Recommendation for developing in the futureGeneral targets
Continue to restructure the bank’s system;
Capture the new market share and new opportunities;
Expand the joint venture, link and proceed towards
standardize the rules, regulations, and procedures
according to the international standards and especially
focus on customer services and attracting new customers,
promote the bank’s brand;
Detect and solve the problem loans and non-performing
loans;
Train and re-train the human resources of the whole bank,
focus on qualification and occupational ethics.
Solution
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Maintaining the existing funding and mobilizing lower
cost funds to get low input average interest rate, to be
ready for financing in accordance with the regulations of
low ceiling interest rates and finding appropriate
products of bond investment when it’s hard for financing
(in 2013 and 2014, even when the inflation and interest
rates increase then)
Focusing on handling non-performing loans and problem
loans as well as collecting existing loans in order to
reduce capital losses and to increase income and fund for
new loans.
Despite the challenges of global financial crisis, there
still have many opportunities. Accordingly, the funded
loan will be used effectively only when there are new
suitable products. For now, LienVietPostBank should focus
on developing retail products, finding suitable market
segment which is to cooperate with strategic partners,
promoting China cross border payments, and tightening the
wholesale lending conditions, engaging in
financingnational projects which have guarantees from the
Government.
Analyzing the efficiency of the investment products in
order to provide solutions of “taking profit” or
“stopping loss” the derivative products invested in
global capital markets in the last few years in order to
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reclaim capital in 2013 and to search for effective
products for the next few years.
Launching a movement to facilitate economic analysis
activities widely, deeply and systematically in order to:
promptly detect the strengths and weaknesses of the whole
LienVietPostBank system, of each branch, of each
department; attach special importance to quality of
audit, maintain control before, during, after each
operation to avoid unexpected results.
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