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This report provides an analysis and evaluation of the current and prospective profitability, liquidity and financial stability, the organizational structure of VPBank Vietnam, the details about the branch I worked and some raising problems of the bank. Advantages and disadvantages analyze as well as SWOT analysis are conducted in the report to work out the main characters of the organization.
STATE BANK OF VIETNAM BANKING ACADEMY Foreign Language Faculty INTERNSHIP REPORT VIETNAM PROSPERITY JOINT – STOCK COMMERCIAL BANK NAM DINH BRANCH Student: Class: Student ID: Trần Phượng Huyền ATCA – K11 11A7510058 2 nd June 2012 Internship report Banking Academy DEDICATION This Internship Report is dedicated to my family members and Faculty of Foreign Language of Banking Academy, Hanoi, Vietnam. 2 By: Trần Phượng Huyền - ATCA - K11 2 Internship report Banking Academy ACKNOWLEDGEMENT I have taken efforts in this internship. However, it would not have been possible to complete this internship without the kind support and help of many individuals and organizations. I would like to extend my sincere thanks to all of them. I am profoundly indebted to VPBank – Nam Dinh branch for their guidance and constant supervision as well as for providing necessary information regarding the internship and for their support in completing my report. I would like to express my special gratitude and sincere thanks to talented Lecturers and Professor at my English for Banking and Finance Faculty, without whom this project would have been a distant reality. In addition, I wish to sincerely thank and show my appreciation to my colleagues and friends who went out of their way to help me. Finally yet importantly, I am deeply grateful to my family members for their love and support throughout my life. Hanoi, 2012 3 By: Trần Phượng Huyền - ATCA - K11 3 Internship report Banking Academy EXECUTIVE SUMMARY This report is about my internship programme at VPBank Nam Dinh branch. In this comprehensive report, I have discussed about every major aspect of the VPBank system in general and Nam Dinh branch in particular, which I observed and perceived during my internship. The main purpose of internship is to learn by working in practical environment and to examine the theoretical concepts relating to practical experiences. This report provides an analysis and evaluation of the current and prospective profitability, liquidity and financial stability, the organizational structure of VPBank Vietnam, the details about the branch I worked and some raising problems of the bank. Advantages and disadvantages analyze as well as SWOT analysis are conducted in the report to work out the main characters of the organization. The report analyzes the credit operations at VPBank Nam Dinh branch with both advantages and disadvantages. It also finds the prospects of VPBank in its current position are positive but still need to improve its competitiveness. The major areas of weakness require further investigation and remedial action by management. Recommendations discussed include enhancing credit management ability, diversifying products lines, improving human resources quality and conducting business expansion. 4 By: Trần Phượng Huyền - ATCA - K11 4 Internship report Banking Academy TABLE OF CONTENTS LIST OF TABLES AND FIGURES 5 By: Trần Phượng Huyền - ATCA - K11 5 Internship report Banking Academy LIST OF ABRIVIATIONS 1. VPBank: Vietnam Prosperity Joint Stock Commercial Bank 2. SMEs: Small and medium size enterprises 3. EBT: Earning before tax 4. ROE: Return on Equity 5. ROA: Return on Asset 6. VND: Vietnam Dong 7. WTO: World Trade Organization 8. HR: Human Resources 9. Dept: Department 10. IVB: Indonesia Vietnam Bank 11. VRB: Vietnam Russia Bank 12. SBV: State Bank of Vietnam 13. VIB: Vietnam International Bank 14. ACB: Asia Commercial Bank 15. Techcombank: Technological and Commercial Joint Stock Bank of Viet Nam 16. Sacombank: Sai gon Thuong tin Commercial Joint Stock Bank 17. Vietcombank: Bank for Foreign Trade of Vietnam 18. VietinBAnk: Vietnam Joint Stock Commercial Bank for Industry and Trade 19. EximBank: Vietnam Export Import Bank 20. BIDV: Bank for Investment and Development of Vietnam 21. MB: Military Bank 6 By: Trần Phượng Huyền - ATCA - K11 6 Internship report Banking Academy I. INTRODUCTION OF VIETNAM PROSPETITY JOINT – STOCK COMMERCIAL BANK (VPBANK) I.1. Overview of VPBank I.1.1. Brief History of the Organization Vietnam Prosperity Joint- Stock Commercial Bank, formerly known as Vietnam Joint – Stock Commercial Bank for Private Enterprises (VPBank) was established under the business license No. 0042/NH – GP issued by the Governor of the State Bank of Vietnam on 12th August 1993 with an operational period of 99 years. The period from 1994 to 1996 was a dynamic development one of VPBank, in which VPBank made many considerable achievements. The equity rate of return increased to 36% in 1995 and 1996; Credit quality was guaranteed and many services were operating effectively. However, VPBank faced certain difficulties, partly because of the Asian economic crisis at the time, intense competition between commercial banks; also, the bank itself made some mistakes. The next stage from 1997 to 2001 was the period of consolidation and development, created the premises for a coming explosive development phrase. During this time thanks to the support from the Government as well as the State Bank of Vietnam, VPBank successfully solved their issues and generated momentums for sustainable development. In 2006, VPBank and OCBC bank (Singapore) signed a strategic contract in which OCBC Bank became the major shareholder in VPBank. During this year VPBank also expanded its business volume by establishing 2 new associated companies: VPBank Assets Management Company Limited (ACM) and VPBank Securities Company. During this time, VPBank held a most advanced banking technology in Vietnam by purchasing Core Banking – T24 software from Temenos, Switzerland. Aiming to enhance technological strength, in 2007, the bank issued Chip – Card, remarked as the first chip – card in Vietnam market. 7 By: Trần Phượng Huyền - ATCA - K11 7 Internship report Banking Academy VPBank was approved to raise charter capital to VND 2,117 billion by the State Bank of Vietnam in 2008, which resulted an increase in OCBC Bank’s shares at VPBank to 15%. The year of 2011 was considered a successful year for VPBank with remarkable achievements in terms of business performance, network development, and personnel management, etc. VPBank reached a pre-tax profit (EBT) of VND 1,065 billion and raised its charter capital to VND 5,050 billion, and expanded its network to nearly 200 transaction offices nationwide. Over the past years, VPBank has won numerous prizes and awards such as “Enterprises for Community”, “Vietnam Strong Brand Name” Award, Top 100 Trusted Services in 2011, and “International Settlement Bank” Award granted by the Bank of New York and Citibank for 5 consecutive years. That VPBank who continually receives prestigious awards and prizes granted both by domestic and overseas organizations serves as a great source of timely encouragement given by customers and society. This, in turn, will be the stimulus that brush up VPBank’s confidence to develop in the future. I.1.2. Nature of the organization A commercial bank “sells deposits and makes loans to business and individuals”, said Peter Rose in “Bank management and Finance services”. VPBank is a Joint – Stock commercial bank in Vietnam, it functions as a financial intermediary that offers wide range of financial services, and also performs full range of financial function of any business firm in the economy. The bank deals with lending, borrowing and investment activities. VPBank performs nature of responsibilities of a commercial bank with all typical products and services of a financial institution such as mobilizing capital; Utilizing capital; Intermediary services provision (domestic and international payments, treasury services, overseas remittance and fast remittance via banks); trading in foreign currencies; providing payment services for credit cards, debit cards, etc. The nature of VPBank is unique to other banks or financial institutions that are under close control of the Government and the State Bank of Vietnam, directly affected by Monetary Policy of the Central Bank. The bank also plays an important 8 By: Trần Phượng Huyền - ATCA - K11 8 Internship report Banking Academy role in financing country economy, especially small and medium size industries because VPBank consider small and medium size enterprises as its main customers besides individuals. Aiming to be in the top 5 of retail banks with a large market share in Vietnam, VPBank has conducted wide range of activities such as: network development - opening new branches and transaction points nationwide, the service quality improvement, competitive products research, etc. In addition, promotional and training activities are always promoted in order to build the bank's image, construct the brand name identity. I.1.3. Business volume Table : (Unit: Million VND) Criteria 2005 2006 2007 2008 2009 2010 2011 Total Assets 6,090,163 10,159,301 18,137,433 18,587,000 27,543,006 59,807,023 82,817,947 Charter Capital 310,000 750,000 2,000,000 2,117,474 2,117,474 4,000,000 5,050,000 Deposits 5,645,000 9,605,000 15,000,000 15,853,000 24,444,000 48,719,000 70,691,061 Outstanding 3,014,000 >5,000,00013,200,000 13,000,000 15,813,000 25,324,000 29,183,000 EBT 83,320 169,430 313,000 200,000 382,632 663,100,000 1,064,255,000 ROE (%) - 22.95% 17.63 % 6.74 % 11.93% 22.65% - ROA (%) - 1.93% 1.8 % 0.81 % 0.9% 1.15% - I.1.4. Product lines - Mobilize capital (receiving deposit from customers) in VND, foreign currencies, - Utilize capital (offering credit, contributing capital, joint venturing) in VND and foreign currencies. - Provide intermediary services (domestic and international payments, treasury services, overseas remittance and fast remittance via banks). - Conduct trading in foreign currencies. - Issue and provide payment services for credit cards, debit cards, etc. I.1.5 Competitors Competitive environment in banking and finance sector actually launched in 2001, and went sharply from 2006 when Vietnam officially joined WTO. There are many foreign banks are operating in Vietnam such as HSBC, ANZ, Deutsche Bank Vietnam, Citibank…; or joint venture bank as IVB(Indonesia-Vietnam Bank), VRB 9 By: Trần Phượng Huyền - ATCA - K11 9 Internship report Banking Academy (Vietnam- Russia bank), SBV (Singapore Vietnam Bank)… Many joint-stock commercial banks newly established and upgraded as Techcombank, VIB, ACB, Techcombank, SeABank, Sacombank, Eximbank, Ocean Bank, MB… This intense explosion in banking system sparked a competition to penetrate and expand market share through network expansion, diversification of products and services, competitive prices and interest rate…Some foreign banks like HSBC, ANZ… initiated the deposit products and services in Vietnam to compete with banks in Vietnam in the area of mobilization. The State owner banks as Vietcombank, BIDV, Vietinbank, Agribank… began to realize the importance of improving the competitive position through improving service attitude, quality of services. These state-owned commercial banks with the advantage of the patronage capital and sponsor and support from the Government keep dominant roles in the banking services system. The State-owned banks are seen as direct competitors of joint-stock commercial banks like VPBank. VPBank is competitive with other banks in the domestic concrete: - Lending activity - Funding activities - Diversification of products and services - Technological innovation - Service quality, network transactions - Human resources - Price of products and services 10 By: Trần Phượng Huyền - ATCA - K11 10 [...]... communication, delegating tasks and controlling workflow II INTERNSHIP ACTIVITIES II.1 Overview of VPBank Nam Dinh Branch II.1.1 Brief introduction After an in-depth research on Nam Dinh market, VPBank Nam Dinh branch was founded in May 2007 by the Board of Directors of VPBank Vietnam under the Decision No 278-2007/QĐ/HĐQT dated 9th March 2007 VPBank was marked as the first commercial bank to launch a branch. .. in Credit operations at VPBank Nam Dinh VPBank Nam Dinh branch is a new branch, so the lending operations in Customer services department played an important role in the banking services of the branch In a small branch like the Nam Dinh s, the Board of director has conducted strategic lending policy based on general policy of VPBank Vietnam, which is to determine to expand lending operations with some... Internship report Banking Academy VI REFERENCES & SOURCES USED 1 Website: www.vpbank.com.vn 2 VPBank Annual Report 2010, published by VPBank, December 2010 3 VPBank Financial Report 201, conducted by KMPG Vietnam Audit Company 4 VPBank Financial report 2009, published by VPBank 5 VPBank Financial report 2008, published by VPBank Management Brief, October 2011, Administration Department, VPBank Nam Dinh branch. .. conducted the flexible interest rate and lending fee makes VPBank’s products become more competitive in comparison with other products of state-owned banks and commercial banks located in Nam Dinh In the interest policy VPBank has been generating, the bank s interest rate is always lower than VPBank, a state-owned banks which has the largest market share in Nam Dinh city, helping VPBank become a favorable choice... result becomes a strategic products of VPBank Nam Dinh Threats - The competition between banks is becoming more intensive, especially between commercial banks like VPBank and state-owned banks as well as foreign banks - VPBank is facing with merging trend in fiercely competitive business environment, especially after Vietnam joining WTO VPBank is confronting with from international banks in holding market... Organization structure of VPBank Nam Dinh is split into functional divisions as follows: Figure : Organizational structure of VPBank Nam Dinh branch Board of Directors Customer Services Dept Administration Dept Accounting and IT Dept Budget Dept 15 By: Trần Phượng Huyền - ATCA - K11 15 Internship report Banking Academy Transaction Offices Source: Administration data II.1.3 Products and services of the branch. .. individuals or private sector in Nam Dinh city, customers running business in commercial, services, retail business, etc VPBank Nam Dinh branch has taken numerous effective measures to push credit operations As the latest report, the total outstanding in 2011 reached to over 18 By: Trần Phượng Huyền - ATCA - K11 18 Internship report Banking Academy VND 400 billion, the increasing rate in outstanding... of VPBank Nam Dinh, is in favor of customers in the province To succeed in promoting this product, the branch needs to conduct more research on combination of ATM card and overdraft Now, card services of the bank in Nam Dinh city are positive with 4 ATM, diversified with smart cards If VPBank Nam Dinh combine overdraft with card services, the bank will have more chances to raise capital In Nam Dinh. .. along with some other Stateowned banks as VPBank, BIDV, Vietinbank, Vietnam Development Bank, etc Along with the business expansion, VPBank has expanded their share market by opening 4 transaction points besides 1 head office in the center of the city Located in 69 Le Hong Phong Street, a main street of Nam Dinh city, VPBank has many advantages to run effectively Nam Dinh branch operates its business mainly... VPBank in general and VPBank Nam Dinh Branch in particular associate themselves strongly with investment in the retail banking and Small and Medium sized business sector, this is a good marketing strategy in downturn economic situation, potentially promoting the activity levels in this area of operation - Loans for car purchasing and ship manufacturing are the strategic products of VPBank Nam Dinh branch . STATE BANK OF VIETNAM BANKING ACADEMY Foreign Language Faculty INTERNSHIP REPORT VIETNAM PROSPERITY JOINT – STOCK COMMERCIAL BANK NAM DINH BRANCH Student: Class: Student. Brief History of the Organization Vietnam Prosperity Joint- Stock Commercial Bank, formerly known as Vietnam Joint – Stock Commercial Bank for Private Enterprises (VPBank) was established under. Trade of Vietnam 18. VietinBAnk: Vietnam Joint Stock Commercial Bank for Industry and Trade 19. EximBank: Vietnam Export Import Bank 20. BIDV: Bank for Investment and Development of Vietnam 21.