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Bank plays the most important role among financial intermediaries in each economy. Worldwide, banks are not only the principal source of credit (loanable funds) but also grant more installment loans to customers. Through mobilizing channels from millions of individuals, families and many units of government, businesses in society, commercial banks act as the transferor of funds from savers to borrowers and involve in payments of goods and services.
INTERNSHIP REPORT Nguyen Thi Thanh Huyen. ID: 0704040027 Page 1 Faculty of Management and Tourism, Hanoi University PREFACE An old joke attributed to comedian Bob Hope says “a bank is financial institution where you can borrow money only if you can prove you do not need it”. Although many of a bank’s customers may get the impression that this old joke is more truth than fiction, the real story is that banks today readily provide hundreds of different services to millions of people, businesses, and governments all over the world. And many of these services are vital to our personal well-being and the well-being of the communities and nations where we live. Bank plays the most important role among financial intermediaries in each economy. Worldwide, banks are not only the principal source of credit (loanable funds) but also grant more installment loans to customers. Through mobilizing channels from millions of individuals, families and many units of government, businesses in society, commercial banks act as the transferor of funds from savers to borrowers and involve in payments of goods and services. Banks, with the key function of transferring capital, are always pushing up mobilization to collect money for investments, enforcing economy and improving society. This function is daily carried out by Business Development and Planning Department which involves directly to mobilizing activity and lending decisions. However, due to the increasing of banks as well as financial institutions, each entity will find different ways to differentiate its products from others. In order to make clearer understanding of what this department is really doing, I decided to have my internship at Agribank, Back Khoa branch. After two months here, I would love to share what I got and what I might think to make this bank change, to work more effectively and distinct from competitors. INTERNSHIP REPORT Nguyen Thi Thanh Huyen. ID: 0704040027 Page 2 Faculty of Management and Tourism, Hanoi University TABLE OF CONTENT Table of content………………………………………………………………………… …1 Preface ……………………………………………………………………………… …… 2 I. Introduction ………………….……………………………………… ………… …3 1. Overview of Agribank Vietnam…………………………………………… …3 2. Overview of Agribank Bach Khoa………………… ………………… ….…3 II. Responsibilities …………………………………………………… …………… … 8 III. Major Assignments ………………………………………… ……………… ………8 IV. Organizational analysis ……………………………………………………… ……10 V. Internship summary…………………… ……………………………….………….12 Appendix …………………………………………………………………………………… 13 INTERNSHIP REPORT Nguyen Thi Thanh Huyen. ID: 0704040027 Page 3 Faculty of Management and Tourism, Hanoi University I. INTRODUCTION 1) Agribank Vietnam Overview Agribank (Vietnam Bank for Agriculture and Rural Development) was founded under Decree of 53/HDBT on 26 March, 1988. Agribank is the leading commercial bank in Vietnam, holding the dominant role in the economic development of Vietnam, particularly in the investment for agriculture, farmers, and rural areas. Agribank is considered to be the biggest bank in Vietnam in terms of capital, asset, and number of staff, branch network and customer base. As of December 2009, Agribank’s leading position confirms itself in: · Total capital resources: VND 434,331 billion · Equity: VND 22,176 billion · Total assets: VND 470,000 billion · Total outstanding loans: VND 354,112 billion · Branch network: 2,300 branches and transaction offices nationwide · Employees: 35,135 Agribank, with huge investments on application of technology into banking, was the first bank to complete the Project on modernizing the Intra-bank Payment and Customer Accounting System (IPCAS) sponsored by the World Bank. Therefore, at present, Agribank has a customer base of over 10 million households and 30,000 enterprises. Agribank is determined to maintain and confirm its leading and dominant positions to provide loans for the cause of industrialization and modernization of agriculture and rural development, economic development in conformity with the policies and objectives set by the Party and the State. 2) Agribank Back Khoa Transactional name: The branch for Agriculture and Rural Development Address: No.92, Vo Thi Sau, Thanh Nhan, Hai Ba Trung, Ha Noi INTERNSHIP REPORT Nguyen Thi Thanh Huyen. ID: 0704040027 Page 4 Faculty of Management and Tourism, Hanoi University Front offices: · No. 4: No. 224 Lo Duc, Dong Mac, Hai Ba Trung · No. 7: No. 326 Kim Nguu, Minh Khai, Hai Ba Trung · No. 9: No. 54 Le Thanh Nghi, Bach Khoa, Hai Ba Trung · Kim Lien: No. 1 Dao Duy Anh, Kim Lien, Dong Da · Tan Mai: No. 25 Tan Mai, Hoang Mai, Hai Ba Trung a. Foundation Back Khoa branch is formerly Back Khoa front office being established under Decision 293/QD-NHLH on 15, July, 2001 of Lang Ha branch’s director. At the early days of foundation, the Bach Khoa front office, placing on 51 Ta Quang Buu, Bach Khoa street, Hai Ba Trung district, had only 7 officers, and was under the control of Director Truong Minh Hoang. On 4 th June, 2002, Bach Khoa branch was officially founded under the Decision 123/QD/HDQT-TCCB of Board of Management of Agribank Viet Nam. This was the first level-2 branch being allowed to exchange foreign currency. After 3 years, with the number of 27 officers, this branch reached some items over target: · Loan amount: VND 219 billion (184 % planned) · Debit balance: VND 71.7 billion (101.8 % planned) · Profit: VND 1,873 billion On 20 th September, 2005, the branch moved to No. 92 Vo Thi Sau, Thanh Nhan, Hai Ba Trung. It continued to be upgraded from level 2 – class 2 to level 2 – class 2 and operated, managed under Agribank Viet Nam, on 1 st April, 2008, according to Decision of the Board of Management Agribank Viet Nam. INTERNSHIP REPORT Nguyen Thi Thanh Huyen . ID: 0704040027 Faculty of Management and Touris b. Organizational structure Organizationa l structure of Agribank Bach Khoa includes 6 departments and 5 which is illust rated by the following chart: c. Operation · Mobilization Over the years, capital mobilization of Agribank receiving depositing money from organizations and individuals, issuing valuable paper bills of exchange or bo nd, borrowing from Central Bank institutions. Raising capital in the branch Business Development & Planning Department Accounting and Treasury Department Front Office No. 4 . ID: 0704040027 of Management and Touris m, Hanoi University Organizational structure l structure of Agribank Bach Khoa includes 6 departments and 5 rated by the following chart: (Source: Administrative and HR Management Department Over the years, capital mobilization of Agribank Bach Khoa has been performed through receiving depositing money from organizations and individuals, issuing valuable paper nd, borrowing from Central Bank , Agribank Vietnam and other institutions. Raising capital in the branch fluctuated over the years. Board of Directors Administrative and HR Management Department International Payment Department Internal Control Front Offices Front Office No. 7 Front Office No. 9 Front Office Kim Lien Office Tan Page 5 front offices, Administrative and HR Management Department ) has been performed through receiving depositing money from organizations and individuals, issuing valuable paper s like Agribank Vietnam and other Marketing and Service Department Front Offices Front Office Tan Mai INTERNSHIP REPORT Nguyen Thi Thanh Huyen. ID: 0704040027 Page 6 Faculty of Management and Tourism, Hanoi University (Unit: VND billion) Year Mobilizing Capital 31/12/2008 1,856 31/12/2009 1,267.1 31/12/2010 1,835.86 31/12/2010 1,835.86 (Source: Business Development and Planning Department) Table 1: Total amount of mobilizing capital through recent years It can be clearly seen that this amount of capital reduced significantly by 68.27% in 2009 compared to 2008. But then, it rose by VND 589 billion in 2010, got 5.8% over the beginning target. Although this activity does not bring revenue to the bank, it plays the most important role in operating other departments, and Bach Khoa branch did this task well in 2010. Capital structure is mainly composed of deposits while issuing valuable papers and borrowings makes up for little amount. It can be seen from the table below that deposits mostly were domestic currency and came from economic institutions, with long term of more than 24 months. (Unit: VND billion) Subjects 2008 2009 2010 TĐ % TĐ % TĐ % Term deposits 1,856 100 1,267.1 100 1.835,86 100 Less than 12 months 365 19.67 285.84 22.56 447.03 24.35 12 – 24 months 10 0.54 26.99 2.13 77.66 4.23 More than 24 months 1,468 79.09 913.51 72.1 1,264.72 68.89 Others 13 0.7 40.66 3.21 46.45 2.53 Depositors 1,856 100 1,267.1 100 1,835.86 100 INTERNSHIP REPORT Nguyen Thi Thanh Huyen. ID: 0704040027 Page 7 Faculty of Management and Tourism, Hanoi University Individuals 282 15.19 153.95 12.15 470.92 25.65 Credit institutions 610 32.87 450.45 35.55 208.87 11.38 Economic organizations 964 51.94 662.7 52.3 156.07 62.97 Currency 1,856 100 1,267.1 100 1,835.86 100 Domestic 1,413.53 76.16 989 78.05 1,378.58 75.09 Foreign currency 442.47 23.84 278.1 21.95 457.28 24.91 (Source: Business Development and Planning Department) Table 2: Mobilizing capital according to classification · Credit activities Table 3: Total loan amount and debit balance period 2003 – 2010 Table 4: Capital condition in 2008 – 2010 period Data in table 3 and table 4 shows the significant change in debit balance from 2003 until now, even there was decrease of total capital amount in 2009. It should be noticed the rate of capital efficiency in 2009 and 2010 kept at high level compared with that of 2008 that was only Year Subjects 2008 2009 2010 Total capital 1,856 1,267.1 1,835.86 Debit balance 701 1,078 1,547.44 Collecting from credit 127 205.117 214.06 Bad debts 15.5 109.3 281.91 Bad debt rate (%) 2.21% 10.14% 18.22% Capital efficiency (%) 37.77% 85.08% 84.29% Year Total amount Debit balance 31/12/2003 118.6 70.2 31/12/2004 219 71.7 31/12/2005 391.9 86.7 31/12/2006 338 127.7 31/12/2007 508 261 31/12/2008 1,856 701 31/12/2009 1,267.1 1,077.8 31/12/2010 1,835.86 1,547.92 INTERNSHIP REPORT Nguyen Thi Thanh Huyen. ID: 0704040027 Page 8 Faculty of Management and Tourism, Hanoi University 37.77% in spite of financial crisis, this reflected capital turnover’s stability of the Bach Khoa branch. II. RESPONSIBILITIES My internship lasted more than 2 months from 16 th February to 26 th April and I worked as the part-time intern in Business Development and Planning Department, Agribank Bach Khoa branch. By its nature, this department carries out daily mobilization and lending decisions. This process includes 5 steps from preparing credit documents, analyzing and evaluating the loan, decision and disbursement, even then, it requires credit officers to follow those loans seriously until their recovery from customers. During the early working days, I was given documents relating to banking rules, the branch Charter as well as credit operations or even any papers that I saw there. Generally, I studied the process of loan application for enterprises and individuals. Besides, I also supported creditors in preparing documents, inserting data, and working customers. III. MAJOR ASSIGMENTS 1. Training The department did not provide any training courses for interns, but each was instructed by his own supervisor, at which the intern was given and asked to read some documents that are both banking rules or Charter and lending decisions in order to know how to apply for each type of credit activity. Each step of credit process requires different papers and documents. As the most important part of lending decision, preparing and checking the legality of customer’s documents requires the creditor’s professional knowledge of those like loan application, legal entity, financial capacity, collateral papers, specific business plan as well as business’ forecasting financial statement. However, those will be different among customers whether they are individuals, families or business organization, or it also depends on borrowing’s INTERNSHIP REPORT Nguyen Thi Thanh Huyen. ID: 0704040027 Page 9 Faculty of Management and Tourism, Hanoi University objectives. Actually, the Agribank’s Charter and Decision, Decree includes all those documents’ form that makes it easier for credit officers and customers to work out coincide and quickly. Since the internship time was limited and because of huge number of documents, I brought some to home to have time understand more. Specially, I was made acquainted with IPCAS and was practiced on this system. It is quite convenient and easy to understand and apply. Whenever customer calls and asks about his credit condition, terms, daily or quarterly interest, the only thing to do is to input or access the customer’s code, the IPCAS will quickly show all related information as well as recalculating on-that-day interest. 2. Document preparation Since I was trained to be familiar with legal documents, I knew which items need for what, and then I was assigned to collect documents both on internet and from borrowers such as financial statements, meeting minute of Board of Management. After that, I was asked to classify in different files. Moreover, making photocopies and scanning or faxing are daily chores. 3. Data filling Since I got understandings of documents and E-application of IPCAS, data filling into computer became much easier for me. Because this application belongs to Agribank system, I was not allowed to copy and public outside. 4. Customer services Sometimes, I answered the phone and connected to other officers. Besides, I also instructed the customers when my supervisor was absent at office. Sometimes, I needed other officers’ help to deal with those customers since I was not allowed to use computer freely and could not check information for them. INTERNSHIP REPORT Nguyen Thi Thanh Huyen. ID: 0704040027 Page 10 Faculty of Management and Tourism, Hanoi University IV. ORGANIZATION ANALYSIS More than two-month working time at a bank is not much and not enough to understand all requirements and basic working steps, but it is quite useful for me to get more experience and knowledge in order to apply in future jobs. There were many things new to study, but they also came with obstacles that I’ve never met. In the respect of objectivity, I would like to share both good and weak points that I could see here. 1) Strong points In terms of credit operation, it can be clearly seen that the Bach Khoa branch improved itself over years and got bright numbers. It was shown by annual income statement: Year 2008 2009 2010 Revenue 132 216.524 454.8 COGS 119.38 202.180 436.16 Profit 12.62 14.344 18.64 Profit/Rev. 9.56% 6.62% 4.14% (Source: Business Development and Planning Department) Table 5: Income Statement in 2008 – 2010 period Although the rate of Profit/ Revenue reduced recent years, its revenue and profit increased significantly over years, this means that the bank was expanding its operation. The above gain could be explained by one word that is “people”. The Business Development and Planning Department includes 12 creditors and those are quite young since this branch was new opened. They all graduated from famous universities in which trained with subjects of finance and banking, so they are professional and able to make changes. They had good relationship with customers and were very friendly, open-minded to solve all of customers’ complaint. [...]... information bulletin at workplace, ensuring smooth and uninterrupted communication at work 2) Weak points In spite of advantage of young and high-qualified employees, the number was still limited Since organizational structure was new and due to the birth of International Payment Department, some business staffs were required to rotate, then the rest officers were overloaded with works As I know that... Management and Tourism, Hanoi University Page 11 INTERNSHIP REPORT V INTERNSHIP SUMMARY Two-month internship gave me chance to study real things and apply what I had learnt at university Since all works in the Business Development and Planning Department were very important, I had small chance to involve in specific tasks, and everything needed to be selfstudied And what I got here is not only the technical... it is in an Agribank s Department Nguyen Thi Thanh Huyen ID: 0704040027 Faculty of Management and Tourism, Hanoi University Page 12 INTERNSHIP REPORT APPENDIX Supervisor’s Evaluation Người hướng dẫn: Chức vụ: Phòng/ Ban: Xác nhận sinh viên đã hoàn thành khóa thực tập tại Đánh giá: Nguyen Thi Thanh Huyen ID: 0704040027 Faculty of Management and Tourism, Hanoi University Page 13 INTERNSHIP REPORT Nguyen... that I learnt here, even at the beginning of the internship period, is that I was interested in credit activities although it requires little or even no English skills, and this would limit my ability as well as my ambition of working in one foreign environment Therefore, I decided to study more in order to work in a Business Development and Planning Department in the future, and this will be great... only, that means he or she needs to follow all steps in lending decision, then control or manage that loan until its recovery This reality leads to requirement of new recruitment of more creditors in nearest time, and I am waiting for a potential position there Additionally, it would be sensitive to remind, but from my point of view, punctuation is the most important criteria to evaluate a person’s attitude... sensitive to remind, but from my point of view, punctuation is the most important criteria to evaluate a person’s attitude toward his work They started new days late and even someone came very lately I have never seen all staff at same time at office This can be easily to understand since they can work with customers outside However, no one knows where the others were, particularly when their customers.. .INTERNSHIP REPORT Specially, there was effective internal communication among officers and interns as well as others from different departments Those who are quite young, enthusiastic, and responsible for works, built up a flexible working environment Employees were free to ask what they did not know, and the managers were comfortable to answer . to differentiate its products from others. In order to make clearer understanding of what this department is really doing, I decided to have my internship at Agribank, Back Khoa branch. After. all related information as well as recalculating on-that-day interest. 2. Document preparation Since I was trained to be familiar with legal documents, I knew which items need for what, and. Nghi, Bach Khoa, Hai Ba Trung · Kim Lien: No. 1 Dao Duy Anh, Kim Lien, Dong Da · Tan Mai: No. 25 Tan Mai, Hoang Mai, Hai Ba Trung a. Foundation Back Khoa branch is formerly Back Khoa front