IMPROVING THE COMPETITIVENESS OF VIETNAMESE JOINT STOCK COMMERCIAL BANKS In Partial Fulfillment of the Requirements of the Degree of MASTER OF BUSINESS ADMINISTRATION In (specialization) By Mr. Vu Van Thanh ID: MBA 02033 International University - Vietnam National University HCM August 2013 IMPROVING THE COMPETITIVENESS OF VIETNAMESE JOINT STOCK COMMERCIAL BANKS In Partial Fulfillment of the Requirements of the Degree of MASTER OF BUSINESS ADMINISTRATION In specialization By Mr. Vu Van Thanh ID: MBA 02033 International University - Vietnam National University HCMC August 2013 Under the guidance and approval of the committee, and approved by all its members, this thesis has been accepted in partial fulfillment of the requirements for the degree. Approved: ---------------------------------------------Chairperson ---------------------------------------------Committee member ---------------------------------------------Committee member --------------------------------------------Committee member --------------------------------------------Committee member --------------------------------------------Committee member Acknowledgments To complete this thesis, I have been received many help and counsel of many people. From the beginning, I would have been incapable of writing and re-writing without the encouragement, critical responses of many people whom I now wish to acknowledge with very appreciation and gratitude. First of all, I would like to express my sincerely thank to my teacher – Mr. Nguyen Kiem Than, and all of teachers in the Committee of Examination, who have saved much time to correct, and recommend ideas to my thesis. I also express my gratitude to all teachers of HCMC International University, who have taught and given me a lot of useful knowledge during my studying at the International University. Many thanks to officers, friends working at the State Bank, commercial banks, Social and Labor Services, Statistics Department, who have provided me necessary data regarding the operation of commercial banks that help me to complete my thesis. I do hope that my thesis will partly bring useful references to people, even small references. Respectfully, Vu Van Thanh 1 Plagiarism Statements I would like to declare that, apart from the acknowledged references, this thesis either does not use language, ideas, or other original material from anyone; or has not been previously submitted to any other educational and research programs or institutions. I fully understand that any writings in this thesis contradicted to the above statement will automatically lead to the rejection from the MBA program at the International University – Vietnam National University Ho chi minh City. 2 Copyright Statement This copy of the thesis has been supplied on condition that anyone who consults it is understood to recognize that its copyright rests with its author and that no quotation from the thesis and no information derived from it may be published without the author’s prior consent. © VU VAN THANH / MBA 02033 / YEAR 2013 3 Table of Contents Page Introduction Chapter I 1 Literature review 4 I.1 Concept of competitiveness of commercial bank I.2 Theories of evaluation of the competitiveness of commercial bank 5 I.3 Measuring tool for evaluating the competitiveness of commercial bank Chapter II 6 Research methodology II.1 Research Process 7 II.2 Construction of competitiveness measuring tool 8 II.3 Collection of research data 11 II.4 Data analysis II.4.1 Character of research sample 11 II.4.2 Analysis of reliability 12 II.4.3 Analysis of relation among components of competitiveness 12 Chapter III Evaluation of the competitiveness of commercial banks III.1 Evaluation of all components of the competitiveness 14 III.2 Evaluation of the competitiveness of commercial bank 19 Chapter IV Solutions for improving the competitiveness of commercial bank IV.1 Experiences for improving the competitiveness of banking system IV.2.1 Experiences from other countries 20 4 IV.2.2 Experience lessons for Vietnamese commercial banks 22 IV.2 Solutions of improving the competitiveness of commercial banks IV.2.1 Improvement of human resources quality 24 IV.2,2 Improvement of technology potential 26 IV.2.3 Improvement of financial strength 27 Limitation and Conclusion 29 References 30 List of Figures Page Figure 1Bad debt of Vietnamese commercial banks Figure 2Mergence among Vietnamese commercial bank 1 1 Figure 3The number of commercial banks over years 2 Figure 4Measuring tool for evaluating the competitiveness 6 Figure 5Research process 7 Figure 6Components of competitiveness in details 10 Figure 7Questionnaires sheet 33 Figure 8Cronbach Alpha coefficient of financial capability Figure 9Cronbach Alpha coefficient of Services and products quality 36 36 Figure 10 Cronbach Alpha coefficient of human resources quality 37 Figure 11 Cronbach Alpha coefficient of technology capability 37 Figure 12 Cronbach Alpha coefficient of distribution network 38 5 Figure 13 Cronbach Alpha coefficient of brand name strength 38 Figure 14 KMO and Barllert’s test Figure 15 Total variances explained 39 Figure 16 Rotated component matrix 40 Figure 17 Regression coefficient 41 Figure 18 Correlation coefficient 41 Figure 19 Summary of value of Cronbach Alpha and EFA 42 Figure 21 Mean of Financial Capability 14 Figure 22 Legal capital of commercial banks 47 Figure 23 Legal capital of some foreign banks 48 Figure 24 Rate of fund mobilization of commercial banks Figure 25 Rate of lending of commercial banks Figure 26 ROA and ROE of some commercial banks Figure 27 Mean of services and products quality Figure 28 Interest rates of commercial banks 51 Figure 29 Mean of human resources quality 16 Figure 30 Rate of education qualification of commercial banks 53 Figure 31 Mean of technology capability Figure 32 Core banking software of commercial banks 52 Figure 33 Mean of distribution network 18 Figure 34 The number of ATM and POS of commercial bank 51 39 49 49 50 15 17 6 Figure 35 Mean of brand name strength 18 Figure 36 Appraisal of competitive capability of commercial banks 19 Figure 37 Solutions of improving banking operation in Asian countries 21 Figure 38 Effect of restructuring banking system in Asian countries Figure 39 Selling stocks to foreign financial institutions Figure 40 Bad debt rates of commercial banks Figure 41 Classification of Vietnamese commercial banks 22 23 54 55 7 A VNSCB B Vietnamese State Commercial Banks VNJSCB B Vietnamese Joint Stock Commercial Banks R JVB E Foreign V Banks I VCB BIDV Viettinbank A T I O Joint Venture Banks 100% Foreign Owned Banks The Bank for Foreign Trade of Vietnam The Bank for Investment and Development of Vietnam The Bank for Industry of Vietnam N Agribank The bank for Agricultural and Rural Development of ACB Vietnam Asia Joint Stock Commercial Bank EIB Export and Import Commercial Bank Sacombank Saigon Commercial Bank TCB Technology Joint Stock Commercial Bank Navibank Nam Viet Joint Stock Commercial Bank VIB Vietnam International Commercial Bank 8 Seabank South East Asia Joint Stock Commercial Bank MB Military Bank MSB Maritime Joint Stock Commercial Bank HSBC Hong Kong Shanghai Banking Corporation ANZ Australia and New Zealand Commercial Bank SHB Shinhan Vietnam Bank UOB United Overseas Bank IT Information Technology CAR Capital Adequate Rate or Minimum Safe Rate ROE Return on Equity ROA Return of Asset ATM Automatic Teller Machine EFA Effective Factor Analysis POS Point of Sale IMF International Monetary Fund Loan Lending 9 Introduction 1. Reasons of improving the competitiveness of Vietnamese commercial banks Recent years, Vietnam banking operation has faced many difficulties. For instance, lending money to customers, but it was hard to collect it, or could not collect it; embezzlement from banking officers made a big loss to the bank and so on. As a result, bad debt increased over years, especially bad debt was up to 10% in 2012 (Figure 1), and there were many cases of mergence among Vietnamese commercial banks due to ineffective operation (Figure 2). Bad Debt of Vietnamese Commercial Banks Description Lending amount (VND 1.000 billion) 2009 2010 2011 2012 1,754 2,301 2,577 2,800 36 58 85 280 2.03 2.51 3.3 10 Bad debt (VND 1,000 billion) Bad debt / lending amount (%) Sources: Banking Technology Magazine 2012 (6) No Year Mergence among Vietnamese Commercial Banks 1 2011 First Bank + Tin Nghia Bank + Saigon Bank 2 2012 Habubank + Saigon Hanoi Bank F i g u r e1 Bad Debt of Vietnamese Commercial Banks 10 3 4 Western Bank + Petro Vietnam Finance Company 2013 Dai Nam Bank + Southern Bank 5 Tay Do Bank + Eastern Bank 6 Dai A Bank + HD Bank Sources: Banking Technology Magazine (6), and Internet 2012-2013 Figure 2 No Mergence among Vietnamese Commercial Banks Forms of Bank 2009 2010 2011 2012 1 Vietnamese State Commercial Bank 5 5 5 5 2 Vietnamese Joint Stock Commercial Bank 39 38 35 34 3 Foreign Bank and branch 45 53 54 57 4 Joint -Venture Bank 5 5 5 4 11 B Sources: Reports of Vietnamese State Bank (38) e sides, Vietnam has entered the World Trade Organization since 2007. All barriers to foreign banks as well as foreign financial institutions in banking industry have been removed entirely from 2012, according to the commitment of Vietnam in the WTO integration process. The increase of foreign banks and their branches every year made the competition among commercial banks in Vietnam become more severely. Figure 3 The Number of Commercial Banks over years We wonder whether Vietnamese commercial banks can stabilize and compete to other bigger banks in the coming time. Originated from the above reality, I would like to choose the topic of improving the competitiveness of Vietnamese commercial banks as my final thesis. 2. Objective and scope of research 12 In this thesis, we will study some theories of competitive capability and construct a measuring tool for evaluating the competitiveness of commercial bank. It is also to analyze real business operation and to evaluate the competitiveness of Vietnamese joint stock commercial banks. With reference to the experiences from abroad and in Vietnam for improving the operation of banking industry, and real evaluation of competitiveness of Vietnamese commercial banks, I will raise some solutions for improving the competitiveness of Vietnamese joint stock commercial banks. 3. Research methodology The research of competitiveness of commercial bank will be made in three stages. In the first stage, we find out a model for evaluating the competitiveness of commercial bank. In order to do that, we first study the existing theory models of evaluation of competitiveness from the Economists and build a measuring tool of competitiveness. Then, we will meet some banks managers to get more opinions of evaluation of competitiveness of commercial banks, to clear and to perfect the competitiveness measuring tool and make a question table for the research. In the second stage, we will verify the reliability of the research model or the measuring tool built on the first stage. We base on the question table to interview banking officers and get their evaluation of the competitiveness of commercial bank. From these evaluation, we use SPSS program to calculate some coefficients as Cronbach Alpha, Effective Factor Analysis ( EFA), and Regression Linear for analysis. In the third stage, we use the mean analysis to evaluate the competitiveness of Vietnamese joint stock commercial banks. 4. Material resources 13 Materials and data in this thesis are collected from books, annual reports, magazines, real survey and interview, published reports, and the previous thesis. 5. Contents of thesis There are four main chapters in this thesis. In chapter one, we will study some theories model of competitiveness evaluation, and then to construct a research model or a measuring tool for evaluating the competitiveness of commercial bank. In chapter two and chapter three, we will analyze real operation of commercial bank and evaluate the competitiveness of commercial banks based on real research. In chapter four, we base on research results, and refer experiences for improving the banking operation from abroad and in Viet Nam in order to have real suitable solutions for improving the competitiveness of commercial banks Chapter I Literature Review I.1 Concept of competitiveness of commercial bank I.1.1 Concept of competitiveness The terms of competitiveness is often used to evaluate competitive capability of a country, an industry, an enterprise, and other fields. Depending on research view, there will be different basic content for the research. For instance, improving living standard and benefit for people is the object of a country, while the object of an enterprise is profitability. Although, there have been many study projects of the competitiveness, but we did not unify the definition of competitiveness yet. According to the World Economic Forum (33), the competitiveness of a country was the capability of the country that gained quick and exact achievements about high economic growth calculated by general domestic product per person. A Summit on industry competition of the Organization for Economic Cooperation and Development (34) supposed that competitiveness was the capability of enterprises, industries, countries in creating jobs, higher income in the condition of international competition. According to Michael Porter, the Professor of Harvard University, enterprises having competitiveness would either make higher progress than middle level about 14 commodities quality and services or be able to reduce expenses to increase profit, market share and so on (25). He also supposed that in order to succeed in competition, enterprises should have the competitive advance under the form of either low manufacturing cost or product differentiation to reach the higher price level than normal price, then provide best products or services and manufacture products with high effect. I.1.2 Concept of competitiveness of commercial bank Like the enterprises, banks also face other competitive rival to gain the market share. Competition in banking business is the process of attracting, finding customers in the market. Actually, competition in banking business is not different from competition of other industries. But, banking business has some specific characteristics as follows: Banking business is affected by many factors of economy, politic, society, psychology, and so on. Only a bad rumor will affect seriously banking system. Baking operation is related to many economical, political institutions, individual through activities as fund mobilization, loan, and other banking services. If one bank faces difficulties, or goes bankrupt, other banks will also face difficulty. Therefore, bank not only compete with each other, but also co-operate in doing business. Banking operation is controlled by the State bank and required a high tech equipment Mainly capital resources for banking operation come from outside mobilized capital, and owned capital occupies a small rate in operating capital resources. Customers of commercial banks are either the suppliers of input products or the users of banking products. According to Ph. D Nguyen Thi Quy, competitiveness of a commercial bank was the capability of the bank itself in creating, maintaining, and developing advantages to maintain and develop market shares, to achieve profit higher than that of industry, to ensure the safe and strong operation, and to be able to overcome fluctuation of business environment (14). I.2 Theories of evaluation of the competitiveness of commercial bank 15 According to Michael Porter (25), evaluation of the competitiveness of an enterprise would base on product, distribution channel, marketing operation, financial capability, technology, and management ability. He explained product position in every sector of market would influence the consumption capability of customer; Distribution channel included the cover level in the market and its quality; Marketing operation expressed product selling, product introducing skills; Finance capability showed in its capital mobilization; Technology was ability of study and development of production line, and management ability showed in leadership ability and leaders moral problem. According to Victor Smith (35), banks needed to develop the following competences to compete with other banks such as brand name, product, service, intellectual sources, and finance capability. By introducing and expanding brand name to everyone, bank could raise its value in the stock market. The success in brand management would increase trust and satisfaction to customers of the bank. Product had value to customers when it satisfies demand of customers. Service had two parts that was customer interface and transaction execution. Intellectual sources showed human resources quality, management ability. Cost and infrastructure showed ability of expense management, risk management, safety, and law compliance. According to CAMEL model (27), one of the models of ranking credit institutions, the competitiveness of commercial bank also based on such criterions as capital adequacy, asset quality, management ability, earning, and liquidity ability. In this model capital adequacy showed in owed capital to support banking operation; the more risk bank accepted, the more owned capital the bank had in order to cover risky. Asset quality was one of the reasons caused bankruptcy. Management ability would decide the success of banking operation. Earning was an important indicator to evaluate the effect of banking operation. Liquidity ability would help the stability of banking operation and bring trust to customers. I.3 Measuring tool for evaluating the competitiveness of commercial bank Basing on the above theory models of competitiveness evaluation, we first draw a set of measuring tool for evaluating the competitiveness of commercial bank including six components such as component of financial capability, diversification of products 16 and services, human resources quality and management ability, brand name strength, technology capability, and component of distribution network. In other words, the competitiveness of commercial bank depends on six these components (Figure 4). Financial Capability F Diversification of Products and Services Competitiveness of Human Resources quality and Management Ability Commercial Bank Brand Name Strength Technology Capability Distribution Network Figure 4 Measuring Tool for evaluating of the competitiveness of Commercial Bank Chapter II Research Methodology II.1 Research Process The process of research of the competitiveness of commercial bank is described in the below figure 5. To study theories of evaluation of competitiveness To interview 250 banking officer to get evaluation Cronbach Alpha Analysis Preliminary measuring tool for evaluating the competitiveness To create a detail question table for the interview To interview 5 bank managers to adjust the measuring tool To set up a detail measuring tool for the research - Delete illegal variable that has small correlation coefficient -------------> - Verify Cranach alpha coefficient - Check general reliability coefficient KMO Effect Factor Analysis --------> - Calculated extracted variance value (EFA) - Check convergence of variables to verify The reliability of the research model Regression Linear Analysis 17 --------> - Check collinear of components of competitiveness - Check degree of accuracy Sig value of each component - Set up the regression linear equation for the research model. Mean Analysis to evaluate the competitiveness ---------> - Evaluate the competitive level of each component - Evaluate the competitiveness of commercial bank. Solutions for evaluating the competitiveness of commercial bank Figure 5 Main Research Process II.2 Construction of a competitiveness measuring tool Basing on the competitiveness measuring tool drawn from the above theory models, we interviewed about five bank manages to exchange, share ideas, and supplement some more details in the measuring scale for evaluating the competitiveness of commercial bank as follows: For financial capability Financial capability of commercial bank shows in owned capital, ability for lending, ability for mobilizing capital, and profitability coefficient such as return on equity (ROE) and return on assets (ROA). Strong financial capability helps a bank to develop market, enhance product quality and services and so on. As regulated, banks must have a minimum legal equity to open a new branch; or bank only provide a limit sum of amount to one customer due to its legal capital and so on. Increasing financial capability is necessary for bank to enhance operating scale, modernize technology, and bring trust to customers who want to put their money in or to do business. Ability of mobilizing capital also reflects the strength about capital of the bank. Profitability and lending ability also show the effect of banking operation. For diversification of products and services 18 Diversification of products and services may include price and police for serving customers. Diversification of products and services will satisfy much more demands from customers, and attract more customers to use banking services. For human resources quality and management ability Human resources quality shows in education qualification, policy in attracting employees, and moral behavior of banking officers. Ability of employees will affect work quality. Employees of a bank will bring directly feeling of banking services, products to customers as well as create trust to customers. Especially, in the current fierce competence, the enhancement of capability of employees in banking knowledge, skills and awareness of operating environment is very necessary to develop business. Bad moral from banking officers will make a lot of troubles to the bank, reduction of credibility of the bank, brand name, and profitability decrease. For brand name strength Brand name strength consists of social donation activities, co-operation in banking business, and trust to customers. Being trusted by customers will help the bank to attract more customers and create competitive advantage against other rivals. Donation to social will make more people know more about the bank name. Well cooperation with other banks will enhance the strength of commercial bank in and out the countries. For technology capability In banking business, applying technology is one of the factors for creating the competition strength of a bank. High technology will help the bank to develop its products, especially payment services and other electronics services products. Technology will help a bank to create differentiation from rivals. Apart from using ATM, POS, and core software in banking operation, ability of upgrading and improving software of bank also express competitive capability of commercial bank For distribution network The increase of operation network of bank such as transaction office, branch is also one of the important factors of commercial bank. It is an effective channel for a bank to increase market share and compete with other banks. The number of ATM or POS 19 and their location in the market will create favorable condition for customers and enhance competitive ability of the bank. From the above statements, I built a competitiveness measuring tool of six (6) components consisting of twenty three (23) variables (Figure 6). Component of financial capability consists of four (4) variables of A1,A2,A3,A4. Component of services and products quality includes four (4) variables of A5,A6, A15,A16. Component of human resources quality has four (4) variables of A7, A8, A9, A10. Technology capability has four variables from A11 to A14. Distribution network component includes two (3) variables of A17, A18, A19. Component of brand name strength consists of three (3) variables from A20 to A22. One variable of A23 is to measure capability of competition of commercial bank. Variables from 1 to 22 are called independent variables, and variable 23 is called dependent variable. I. II. Products & Services Quality A1 Owned Capital A5 Service Diversification A2 Profitability (ROE and ROA) A6 Policy of serving customers A3 Funding Mobilization Capability A15 Product Diversification A4 Lending Capability A16 Competitive Product Price III . Financial Capability Human Resources Quality IV. Brand Name Strength A7 Employees Qualification A17 Social Donation Activities A8 Human resources Policy A18 International Co-operation A9 Leadership Capability A19 Be trusted by Customers A10 Employees Moral 20 F V i A11 Product Research and Development Quality A12 Capability for Upgrading and Developing new Technology A13 Software for Banking Management A14 Effect of payment by ATM and POS g u r e 6 VI Technology Capability Distribution Network A20 Number of Branches A21 Number of ATM and POS A22 Convenience of Location of ATM VII A23 Competitive Capability Competitive Capability of Vietnamese Commercial Banks D etails of Components of competitiveness In this stage, we also create a question table for evaluation (Figure 7). In the question table, we use a Likert measuring scale of five lever of answer from 1 to 5 to evaluate competitive capability of commercial bank, in which number 1 means absolute disagree, number 2 means disagree, number 3 means acceptable, number 4 means agree, and number 5 means absolute agree. 21 II.3 Collection of research data We interviewed and delivered the question tables to 250 banking officers who are working at the commercial banks in Ho Chi Minh City and Dong Nai Province to get their opinion for evaluating the competitiveness of commercial banks. However, only 234 question tables are collected for data analysis. Remaining 16 question tables are not legal for the research, because they are not filled up and finished. After receiving back 234 question tables from the evaluators, we use SPSS software to calculate some coefficients as Cronbach Alpha, Effective Factors Analysis (EFA) to evaluate the reliability of variables and components of competitiveness, and regression linear to find out the relations and influences of components to competitive capability of commercial bank. Then, we use mean analysis to every variable and component to evaluate the competitive level of each component and the competitiveness of commercial bank. II.4 Data analysis II.4.1 Character of research sample The question table or survey sample made in December 2012 were delivered to and collected from 234 bank officers working in HCM City and Dong Nai Province where I am working now, in which 110 officers from four (4) Vietnamese State commercial banks (VNSCB) such as Vietcombank, BIDV, Viettinbank, Agribank, 85 officers from eighteen (18) Vietnamese joint stock commercial banks (VNJSCB) such as Sacombank, ACB, Techcombank, VIB, VPBank, Eximbank, DongABank, Maritimebank, HD Bank, Military Bank, Trust Bank, Southern bank, 5 officers from Shinhanbank - a 100% foreign owned bank, and 34 officers from HCMC State Bank who working at general research department, and inspection department. They are supervisors, managers, and some directors of the banks. We also calculated education level of banking officers to ensure quality of the research sample. There are 208 banking officers graduated from Universities and 26 officers graduated after University, occupied nearly 89% and 11% respectively. II.4.2 Analysis of Reliability 22 In this analysis, we calculate the value of Cronbach Alpha of every competitiveness component to delete illegal variables. Then, we analyze the effective factors (EFA) to evaluate the reliability of component. - For Cronbach Alpha, we run the order of Analyze, Scale, and Reliability Analysis. Illegal variable that has the value of item total correlation smaller than 0.3 and cronbach alpha lower than 0.6 will be deleted from the measuring tool As a result (Figure 8 to Figure 13), we found that cronbach alpha coefficients of all variables reached reliable level (> 0.6). The minimum value of item total correlation is 0.525, and the maximum of that is 0.911. All variables are satisfied the above mentioned conditions. Therefore, all variables of components will be used for the effect factor analysis (EFA). -For EFA, we run the order of Analyze, Data Reduction, and Factor, with extraction method of principal component and rotation method of Varimax. The effect factor analysis (EFA) will be acceptable when KMO (Bartlett verification) is bigger than 0.5, total extracted variance is bigger than 50%, and eigenvalue is higher than 1 (Anderson and Gerbing, 1988). As a result (Figure 14), we found that KMO coefficient is 0.648 with reliability level sig equal 0.000, it shows that all variables have correlated to each other; there are 6 new factors extracted at the eigenvalue of 2.001, and total extracted variances are 74.51% (Figure 15). All variables also converged in six components, and weight value of all variables are bigger than 0.6 (Figure 16). All variables are tightly related to 6 extracted new factors. Therefore, they all are appropriate and will be used in the competitiveness measuring tool or research model (Figure 19). II.4.3 Analysis of relation between competitiveness components and competitive capability of commercial banks Regression linear model with backward method will be used to evaluate the relation between six competitiveness components and competitive capability of commercial banks. In regression linear of SPSS program, I put the average of each component into independent box, the competitive capability component into dependent box, and run SPSS program. Standard for accepting this regression model is that sig value is smaller than 0.05, or equal 0.05, and there is no collinear among components of competitiveness (value of VIF 77 49 -> 85 51 ->67 71 -> 78 62 -> 52 5 -> 10 13 -> 18 21 -> 35 5.2 -> 22 2 -> 12 4.5 -> 12 1.3 -> 5.5 Loan on GDP 31 -> 20.5 72 -> 90 48 ->35 107 -> 37 Overdue debt/total debt 37 -> 8.5 13 -> 2.4 12.6 -> 13.5 33 -> 11 Return on Assets -3.4 -> 1.7 -2.3 -> 0.75 0.6 -> 1 -4 -> 0.3 Market share of 5 biggest banks Market share of state commercial banks (%) Market share of banks having foreign banks’ capital Figure 38 Effect of restructuring banking system in Asia countries. Source: Nation Financial Security Committee in Dec 2011(10) IV.1.2 Experience lessons for Vietnamese banks Recently, Vietnam has also restructured its banking system in order to enhance its financial strength, operating competence and compete in the market. Mergence The mergence between Lien Viet Banks and the Post Office Company established Lien Viet Post Office Bank at the end of 2011. Before mergence, the Post Office Saving Company was not allowed to mobilize demand deposit from customers. It reduced partly income from fund mobilization. Therefore, the mergence help post office to enlarge its operation scope, and help Lien Viet bank to increase their market share (36) The mergence between the Joint Venture ShinhanVina Bank (SVB) and Shinhan Bank Viet Nam (SHB) formed Shinhan Vietnam Bank at the end of 2011. Before mergence, legal capital of SVB and SHB were USD 30 millions and USD 150 million respectively. After mergence, its legal capital increased to nearly USD 350 million; 33 the number of branch increased from 3 to 7 (Bulletin of Shinhan Vietnam Bank 2012). Another mergence was among three Vietnamese joint stocks commercial banks including First Commercial Bank, Tin Nghia Bank, and Saison Commercial Bank in 2011. Before mergence, three banks were in insolvency, because they used too much short term deposit for long term lending. The State Bank of Vietnam has temporarily provided more fund to maintain normal operation of banks. After mergence, legal of capital of bank is up to VND 10,400 billion, and total asset of VND 154,000 billion (41). Selling stocks to foreign banks and companies to increase owned equity To increase owned capital, some banks has sold partly its stocks to foreign banks. Local banks (selling stocks) Foreign banks (buying stocks) Rate (%) Asian Bank (ACB) Standard Chartered Bank 11.47% Sacombank (STB) ANZ 9.78% Eximbank (EIB) Sumitomo Mitsui 15% Techcombank (TCB) HSBC 20% Seabank (SEA) Societe General 20% Southern bank UOB International Bank (VIB) Common Wealth 20% Habubank Deutsche Bank 10% Figure 39 19.99% Vietnamese banks sold stocks to foreign financial institutions Source: Security Company of Vietcombank 2011 (19) Comment 34 To improve banking operation as well as to enhance the competitiveness of commercial banks, many countries have applied some solutions such as closing weak banks, merging banks, selling its stocks to other banks, changing members of the Board of Management. Vietnamese banks also applied these solutions for improving their banking system; however Vietnam banks did not close weak banks because it will influence strongly the normal operation of other banks. IV.2 Solutions for improving the competitiveness of commercial banks From the above analysis, we find that most of competitive components of VNJSCB are evaluated not high. It is necessary to improve components of financial capability, brand name strength, distribution network, services quality, technology capability, and human resources quality. However, improving all components of competitiveness at the same time is very difficult, especially for small joint stock commercial banks. Therefore, we concentrate in improving some important components that strongly influences other components and the competitive capability commercial bank. As a result of analysis in the chapter I ( Figure 18), we find that there is a relation between human resources component and brand name strength, services quality; a relation between technology capability and service quality; a relation between financial capability and distribution network; It means that if we improve human resources quality, brand name strength and service quality will be influenced more actively; or if we increase financial capability, distribution network will also be increased; or if we improve technology capability, payment service quality and the stability and reliability of informatics equipments as ATM, POS and so on will be better. According to the result from regression linear equation (Figure 17), technology capability is most influences the competitive capability of commercial bank. From the above consideration, in my opinion, we may concentrate to improve three components of human resources management, technology capability, and financial capability. IV.2.1 Improvement of human resources quality and management ability 35 As you know, human resources quality is a decisive factor to business effect and the competitiveness of commercial banks in particularly, and the other fields in general. Employees who have good behavior to customers and professional working style will create good images to customers, or bring trust to customers; who have good knowledge will shorten time of serving customers and increase profit to the bank. As the above evaluation, moral behavior of employees should be improved. Moral behavior influences strongly not only to business operation but reputation of the bank and credibility to customers. However, it is not easy to control moral behavior of employees. For me, in order to improve moral behavior of employees, apart from strengthen the operation management process, we may rotate employees among Departments every period of time. Rotation means we transfer officers from Department to Department. It also means that nobody can works at any Department forever. This rotation will limit partly the errors caused by moral problem from officers if any, and also give them a change for understanding every job in the bank. Though, it will be difficult for officers at the beginning of rotation, because they are not yet familiar with their jobs. Therefore, job training in banking operation should be made frequently, for instance one time per year. There will be an examination after training to ensure training effect. Results of training would be considered for evaluation of performance of employees every year. However, there are cases for rotation among employees. For young employees that have the position of staff and supervisors, it is easy to rotate and assign new jobs. For old employees or those who keep positions of managers, change to other job is more difficult because of psychology and change ability. We may transfer to other positions depending on their capability and their performance. If impossible, we may assign them to work at a position that is not influenced main operation of the bank. There will be many cases of job rotations, for instance, rotation employees in the same Department, among Departments, and among Branches, provided that salary and other Allowances for them after rotation are at least the same as that of the previous positions. 36 Like employees, job rotation for leader is also important to limit latent risk such as professional moral, therefore, we may build criterions for selecting leaders (Branch Director, Director, and so on), and refer opinion of employees about credibility and capabilities of leaders before appointment. We may select leaders from inside and outside the bank, even to allow employees register themselves, not to appoint directly as per the policy of Vietnamese State commercial banks. Information of selection is also publicized. For the time being, most of joint stock commercial banks such as ACB, Eximbank, Sacombank, SHB, HDB, and so on, have found training centers. Therefore, training to employees is easy to do, and rotation among employees is feasibility. IV.2.2 Improvement of technology competence Enhancement and improvement informatics technology in banking system is the best way to develop banking services operation and increase more profit for the bank. Basing on up-to-date technology, banks can apply more new services to meet customers’ demand, diversify their payment services in and out of the country, reduce risks and limit error for banks and customers when using banking services. As stated above, Vietnamese commercial banks have applied advanced software and hard ware in banking technology, for instance, Smart link, Banknetvn, VNBC to operate equipment using card for ATM, software of Silver Lake, Symbol System for Core banking and so on. Some banks use this software, other banks use that software. However, they could not connect smoothly together, and error happened very often, therefore, it limited income from banking service operation of Vietnamese commercial banks, especially the small and medium sized commercial banks. Therefore, solutions for improving technology capability of small bank and big bank will be different. For the large sized commercial banks (group 1) The large sized banks (20) should cooperate in connecting and upgrading IT software together. As you know the large sized commercial banks such as group of VNSCB including VCB, Agribank, Viettinbank, BIDV, and some VNJSCB consisting of ACB, Sacombank, Eximbank, Techcombank, VPBank, VIB and so on which have 37 high rate of branches and ATM, POS may co-operate to find good software solution or change another software to connect their IT equipments together. This way may spend a lot of money for bank in the short time, but it is better for banking operation in the long time. By doing this, we may improve the rate banking service operation and Vietnamese banking system. Besides, the informatics technology department of the State Bank of Vietnam may consult and support the best software solutions, especially software for card connection to commercial banks in order to save expense for each bank and enhance operation effect. It is also help the State Bank to manage operation of Vietnamese banking system more effective. When buying ATM from abroad, Vietnamese commercial banks need to refer experience of other banks and the State Bank about technical specification to easy connect into banking system and to upgrade ATM in the future. In reality, there are many kinds of ATM using at commercial banks, and each bank use different ATM. For the small sized commercial banks (Group 2,3, and 4) Due to limit of fund, small sized commercial banks (20) do not have enough capital to invest much in IT software and equipments such as ATM, POS, and so on; small banks may cooperate and sign the agent contract with big banks to use their ATM, POS. By doing this, small banks can also provide their services to customers. IV.2.3 Improvement of Financial Capability Financial capability, especially owned capital keeps an important role in developing banking operation. Capital is the basic for the bank to accelerate scale of banking operation, to provide more capital to customer, because according to the banking Laws, bank cannot provide more than 15% of its owned capital to a customer. Capital increased will also help a bank to develop technology capability and enlarge distribution channels. Therefore, in order to increase owned capital, bank may apply some solutions as using a part retained income, issuing more stocks, or mergence. Increase owned capital from retained income It is an important supplement fund resource. This resource has advantage of not depending on outside market, and not bearing high expense for borrowing from outside market. However, it is necessary to determine a reasonable retained income to increase owned capital. Because if this ratio is too low, it will lead to slow increase of 38 fund, and conversely if this ratio is too high, it will reduce income of share holders or value of stock listed in the market. Therefore, if growth rate of retained income to supplement owned capital is stable over years and commensurate with growth rate of asset, it shows the good sign for development of the bank, and high support from share holders to the bank. Increase owned capital from issuing stocks Normally, expense for issuing stocks is higher than other ways. This method will reduce the right of vote and control a bank, unless new stocks will be bought by the old share holder. The strong point of this method is that dividend of stock depends on banking business result, thus when the bank losses, interest expense is not the burden for bank and bank does not return fund to share holder. But, weak point of this method is to disperse the right of inspection, to increase issuing stocks; therefore, this method is only applied for big banks gained profitability from their operation. Mergence It is the last method to increase owned capital for bank. By doing this, organization structure of the Board of Management and employees may be changed, especially banks that have weaker operation situation. According to plan for increasing owned capital to VND 5,000 to the end of 2013, and VND 10,000 in 2015 by the State Bank of Vietnam, many small-sized banks (20) will face difficulties. Therefore, solution of mergence with other banks is unavoidable. In summary, three solutions for improving the competitiveness of commercial that I mentioned in this thesis are conformable with reality in Vietnam and other countries. Solutions for improving technology capability and increasing owned capital are rather difficult to small sized commercial banks because of limitation of capital. However, small sized commercial banks can compete to big banks and foreign bank from their existing advantages in the small market and perennial experiences to local customers; improving human resources quality and management ability, business operation of small banks will stabilize and develop. 39 LIMITATION AND CONCLUSION Due to the limit time, the research data is only collected from commercial banks in Hochiminh City and in Dong Nai Province. Besides, most of secondary data is collected from leading Vietnamese joint stock commercial banks. Therefore, result of evaluation of the competitiveness of joint stock commercial banks may be a little different from reality. Being evaluated low in the competitiveness, for instance brand name strength is weak, distribution network is not high, financial capability is low, technology capability is not high, and human resources quality is normal, Vietnamese joint stock commercial especially small sized banks may be able to improve if they try to develop its advantage and improve human resources quality, a decisive factor for the bank development. Best quality in human resources will help banks to limit bad debt, increase profitability and owned capital, improve technology and customer service, and expand distribution network and brand name. The purpose of the above research aims to provide bankers with references to improve and develop their banking operation in the current competition environment in Vietnam. The competition becomes more fiercely in the stage of integration into the region economy and the World Trade Organization. Banking business is a very large field and very complicated and changeable. Hoping that the thesis will be a small contribution and partly bring benefit to the bankers. However, due to a limit time, the thesis may be shortage of data and face errors. Therefore, I am really very grateful to your comments and exchange on this thesis. 40 References 1. Anthony Saunders., Marcia Million Cornett (2009). Financial Markets and Institutions. Mc GRAW HILL International Edition, Fourth edition 2. Anderson and Gerbing (1988). Structural Equation Modeling in practice: a review and recommended two-step approach. Psychological Bulletin 3. Annual Report of Commercial Banks. 4. Asia Economic Monitor. (Dec 2011). 5. Banking Law. (2010). 6. Banking Technology Magazine (2012, 2013) 7. Credit Institutions Law. (2007). 8. Competition Law. (2009). 9. Fitch Ratings, International Monetary Fund, Central Banks. (2011). Report of C V Luc at the National Finance Security Committee, 21 Dec 2011. 10. Fitch Ratings, World Bank. (2011). Report of C.V. Luc at the National Finance Security Committee, 21 Dec 2011. 11. Ho Dieu. 2002. Banking Management. Statistics Publishing House of HCM City. 12. Le Thi Tuyet Hoa. (2009). Banking Monetary. HCM City Statistics Publishing House. 13. Ngoc Trang. (8 Dec 2011). Bay vu sap nhap ngan hang “Dinh Dam” nhat the gioi. http://www.tinmoi.vn/7-vu-sap-nhap-ngan-hang-dinh-dam-nhat-the-gioi-09667757.html. 14. Nguyen Thi Quy. (2008). Nang luc canh tranh cua Ngan hang thuong mai trong xu the hoi nhap. National Politic Publishing House. 15. Nguyen Dang Don. (2010). Management of Modern Banking. Statistics publishing house of Ho Chi Minh City. 16. Porter, M.E. (2008). The Five Competitive Forces That Shape Strategy, Harvard Business Review, Jan 2008. 17. Pham Tien Dat, TTXVN. (9 Feb 2012). Kinh nghiem tai co cau ngan hang cua Nhat Ban. http://tinnhanhchungkhoan.vn/kinh-nghiem-tai-co-cau-ngan-hang-cua-nhat-ban.html 18. RSS. ( 9 Feb 2012). Ngan hang xay dung Trung Quoc ban co phan cho Bank of America. http://tintuc.xalo.vn/00912541470/Bank_of_America_ban_28_ty_co_phieu_Ngan_hang_Xay _dung_Trung_Quoc.html 19. Security Company of Vietcombank. (2011). Banking industry report. 41 20. Security Company of Vietcombank. (2012). Banking industry report, Mar 2012. 21. Tap Chi Cong Nghe Ngan Hang. (2011,2012). 22. The State Bank of Vietnam, Annual Reports. (2007-2011). 23. The State Bank of Vietnam. (2010). Circular 13/2010/TT-NHNN 24. The State Bank of Vietnam. (2008). Decision 13/2008/QD-NHNN 25. Truong Ngoc Dung. (2008). Chien luoc canh tranh theo ly thuyet cua Michael Porter. General Publishing House 26. Thanh Thanh Lan. (2012). Thong Doc giai trinh no xau va tai co cau ngan hang. http://ebank.vnexpress.net/gl/tintuc/2012/07/thong-doc-gia-trinh-no-xau-va-tai-co-cau-nganhang. 27. Taichinh 24h. (14 Feb 2011). http://vnexim.com.vn/forum/bai-viet/8639-Giam-sat-he-thong-theo-chuan-CAMELS 28. Thanh Thanh Lan (2 Aug 2012). Ngan hang cang lon n cang nhieu no xau. http://ebank.vnexpress.net/gl/ebank/tin-tuc/2012/08/ngan-hang-cang-lon-cang-nhieu-no-xau 29.Thanh Loan. (12 Dec 2011). Tham nhung tong nganh ngan hang. http://thuvienphapluat.vn/tintuc/vn/thoi-su-phap-luat/tham-nhung/1818/tham-nhung-trongnganh-ngan-hang-bong-den-lung-doan-nen-kinh-te 30. THA BA. (15 July 2012). Mot so vu pham phap cua nhan vien ngan hang. http://www.vietfin.net/mot-so-vu-pham-phap-cua-nhan-vien-ngan-hang/ 31. Thu Thuy. (12 May 2012). Toc do gia tang may ATM. http://fbnc.com.vn/DetailSelect/Index/17622# 32. Thai Son (9 Aug 2012). Quyen luc khung cua bau Kien . http://www.thanhnien.com.vn/pages/20130808/quyen-luc-khung-cua-bau-kien.aspx , 33. The World Economic Forum. (1997). Global competitiveness report. 34. The Organization for Economic Cooperation and Development. (2001). Enhancing the competitiveness. 35. Victor Smith. (2002). Core competencies in the retail sector of financial service industry, http://www.crm2day.com/library/EpFkZlFkpAbiECLFkn.php 36. VnMedia (25 July 2011). Ngan hang Buu Dien Lien Viet: Thuong Vu Lich Su http://www.lienvietpostbank.com.vn/tin-tuc-su-kien/tin-lienvietbank/content/ngan-hangbuu-dien-lien-viet-thuong-vu-lich-su 37. Vu Thanh. (22 April 2012). Nhung Kho khan cua ngan hang thuong mai hien nay. 42 http://gdtd.vn/channel/3023/201204/Nhung-kho-khan-cua-NHTM-hien-nay-1960802/ 38. http://www.sbv.gov.vn 39. http://www.hsbc.com.vn 40. http://www.thebankerdatabase.com 41. http://ebank.vnexpress.net 43 Figure 7 BẢNG CÂU HỎI / QUETIONARE NGHIÊN CỨU NĂNG LỰC CẠNH TRANH CỦA NGÂN HÀNG THƯƠNG MẠI CỔ PHẦN RESEARCH THE COMPETITIVENESS OF JOINT STOCK COMMERCIAL BANKS Kính chào các Anh, Chị, Chúng tôi, nhóm nghiên cứu thuộc trường Đại học Quốc gia HCM, đang tiến hành nghiên cứu về Năng Lực Cạnh Tranh của các Ngân hàng Thương Mại Cổ Phần Việt Nam (NHTMCP). Rất mong các anh/ chi vui lòng trả lời môt số câu hỏi dưới đây (bằng cách đánh dấu √ vào các ô trống). Mọi quan điểm của anh/chị đều có giá trị cho nghiên cứu của chúng tôi. We, a research group of HCMC National University, are researching the competitiveness of Vietnamese Joint Stock Commercial Banks (NHTMCP). We are looking forward to your reply to the below questions (by sticking x into the blank box). Any opinions from you are still worth to our research. Quy ước về chọn ô trả lời như sau: 1  Hoàn toàn không đồng ý Absolute 2  Không đồng ý Disagree 3  Bình thường Accept 4  Đồng ý Agree 5  Hoàn toàn đồng ý Absolute disagree agree 1 2 3 4 □ □ □ □ 5 1. NHTMCP có vốn tự có lớn □ NHTMCP has a high owned capital 44 2. NHTMCP có tỷ lệ lợi nhuận trên vốn (ROE) cao □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ Rate of return on equity of NTTMCP is high 3. Khả năng huy động vốn của NHTMCP tốt □ Capital mobilization ability of NHTMCP is good 4. Khả năng cho vay của NHTMCP tốt □ Loan mobilization ability of NHTMCP is good. 5. NHTMNN chú trọng phát triển mạnh dịch vu khác □ ngoài cho vay như dịch vụ thanh toán, chuyển tiền… NHTMCP pay much attention to develop other banking Services such as payment, remittance, cards and so on. 6. NHTMCP có chính sách chăm sóc và phục vụ □ Khách hàng tốt NHTMCP have good policies for taking care and Serving customers 7. NHTMCP có đội ngũ nhân viên có trình độ □ NHTMCP have qualified member staff 8. NHTMCP có chính sách thu hút nguồn nhân lực □ NHTMCP have good policies of attracting HR 9. Khả năng quản lý của ban lãnh đạo NHTMCP tốt □ Management ability of leaders of NHTMCP is good. 10. Đạo đức nghề nghiệp của cán bộ nhân viên tốt □ Professional ethics of member staff is good. 45 11. Chất lượng nghiên cứu và phát triên sản phẩm □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ mới của ngân hàng có hiệu quả Quality of searching and developing new products of the banks is effective. 12. NHTMCP thường xuyên nâng cấp và ứng dụng □ Công nghệ mới NHTMCP frequently upgrade and apply new Technology in banking services 13. Phần mềm quản trị ngân hàng có hiệu quả □ Banking management software is effective. 14. Hệ thống thanh toán qua ATM, máy POS, □ Mobile và Internet banking rất hiệu quả Payment system through ATM, POS, Mobile, And Internet banking is effective. 15. Sản phẩm của NHTMCP rất đa dạng □ NHTMCP have diversified products 16. Giá cả sản phẩm NHTMCP rất cạnh tranh □ Product price of NHTMCP is very competitive 17. NHTMCP có mạng lưới chi nhánh rộng khắp □ cả nước NHTMCP have a very large branches network 46 18. Số lượng máy ATM, máy POS khá nhiều □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ □ NHTMCP have a lot of ATM and POS 19. Địa điểm đặt máy ATM và máy POS □ thuận tiện cho khách hàng giao dịch Location of ATM and POS is convenient for For customers in doing business. 20. NHTMCP có nhiều hoạt động tài trợ xã hội □ NHTMCP have many activities of social donations. 21. NHTMCP mở rộng hợp tác quốc tế □ NHTMCP enlarge international co-operation. 22. NHTMCP được sự tín nhiệm của khách hàng □ NHTMCP are being trusted by customers. 23. NHTMCP có khả năng canh tranh tốt □ so với nhóm ngân hàng thương mại khác. NHTMCP are able to compete well with others Chúng tôi chân thành cám ơn sự hỗ trợ của các anh/chị về những đánh giá trên. Thank you very much for your support to the above evaluation. Tên người trả lời: ................................................................................................. Name of replier Nơi làm việc…………………………………………………………………………… Working Place 47 Trinh độ học vấn: Qualification □ Cao đẳng College □ Đại học University □ Trên đại học Master/Doctor Điện thoại: (nếu có)…………………………………………………………………… Telephone No (If any) Figure 8 Cronbach Alpha of Financial Capability Component Source: From SPSS program Figure 9 Cronbach Alpha of Services and Products Quality 48 Figure 10 Cronbach Alpha of Human Resources Quality Figure 11 Cronbach Alpha of Technology Capability 49 Figure 12 Cronbach Alpha of Distribution Network Figure 13 Cronbach Alpha of Brand Name Strength 50 Figure 14 KMO and Barllert’s Test Source: SPSS Program Figure 15 Total Variances Explained 51 Figure 16 Rotated Component Matrix Source: SPSS Program Rotated Component Matrix 52 Figure 17 Regression Coefficient Figure 18 Correlation Coefficient 53 Figure 19 Summary of value of Cronbach Alpha and Effective Factors Analysis (EFA) Vari able s H u m an Re so ur ce A7 0. 94 0. 89 0. 88 0. 79 A8 A9 A10 A15 A16 A5 A6 A11 A12 Se rvi ce s an d Pr od uct s 0.8 83 0.8 54 0.8 53 0.7 86 Tech nolo gy Capa bility 0.92 7 0.87 9 Components Fin anc ial Ca pa bili ty Bra nd Na me Str en gth Distri butio n Netw ork 54 0.82 2 0.59 1 A13 A14 A3 A4 A2 A1 0.8 50 0.8 27 0.7 53 0.7 45 A20 A21 A22 0.9 34 0.9 26 0.7 94 A17 0.934 A18 0.910 A19 0.824 Eige nval % Vari Cron bach Alph a 3. 89 17 .7 0. 91 2 2.9 36 13. 34 0.8 67 2.88 5 13.1 16 0.86 9 2.5 17 11. 43 0.8 03 2.1 49 9.7 70 0.8 82 2.001 9.142 0.881 55 Full name: Position: Department service date: Department: Employment date: Promotion date: 1st Appraisal Appraisal by Fact E G S N U E 1. Work Performance 4.0 3.4 2.8 2.2 1.6 4.0 2. Job Knowledge 4.0 3.4 2.8 2.2 1.6 4.0 3. Quality Work 4.0 3.4 2.8 2.2 1.6 4.0 4. Judgment 4.0 3.4 2.8 2.2 1.6 4.0 5. Initiative 4.0 3.4 2.8 2.2 1.6 4.0 6. Co-operation 2.0 1.7 1.4 1.1 0.8 2.0 7. Appearance & Conduct 2.0 1.7 1.4 1.1 0.8 2.0 8. Sense of Responsibility 2.0 1.7 1.4 1.1 0.8 2.0 2.0 1.7 1.4 1.1 0.8 2.0 2.0 1.7 1.4 1.1 0.8 2.0 of 9. Human Relations Communications 10. Ve rb al 11. Wr itt en 2.0 1.7 1.4 1.1 0.8 2.0 12. Customer Satisfaction 2.0 1.7 1.4 1.1 0.8 2.0 13. Delegation Skills 2.0 1.7 1.4 1.1 0.8 2.0 14. Versatility 2.0 1.7 1.4 1.1 0.8 2.0 15. Punctuality 2.0 1.7 1.4 1.1 0.8 2.0 Points (2) Sub-total Total (1) (3) = [(1)+(2)]/2 Final Point Average [(3)+(4)]/2 Adjusted Point The appraiser The appraiser 1st Name: 2nd Confirmed by * E: Excellent >38 Name: Name: 34[...]... commercial banks With reference to the experiences from abroad and in Vietnam for improving the operation of banking industry, and real evaluation of competitiveness of Vietnamese commercial banks, I will raise some solutions for improving the competitiveness of Vietnamese joint stock commercial banks 3 Research methodology The research of competitiveness of commercial bank will be made in three stages In the. .. IV Solutions for improving the competitiveness of Vietnamese joint stock commercial banks 30 For improving the competitiveness of Vietnamese joint stock commercial banks, we should refer some experiences from advanced countries and reality in Vietnam to have a trend of development of banking industry Then, we can find out feasibility solutions for improving the competitiveness of commercial bank IV.1... choose the topic of improving the competitiveness of Vietnamese commercial banks as my final thesis 2 Objective and scope of research 12 In this thesis, we will study some theories of competitive capability and construct a measuring tool for evaluating the competitiveness of commercial bank It is also to analyze real business operation and to evaluate the competitiveness of Vietnamese joint stock commercial. .. B Vietnamese State Commercial Banks VNJSCB B Vietnamese Joint Stock Commercial Banks R JVB E Foreign V Banks I VCB BIDV Viettinbank A T I O Joint Venture Banks 100% Foreign Owned Banks The Bank for Foreign Trade of Vietnam The Bank for Investment and Development of Vietnam The Bank for Industry of Vietnam N Agribank The bank for Agricultural and Rural Development of ACB Vietnam Asia Joint Stock Commercial. .. find out a model for evaluating the competitiveness of commercial bank In order to do that, we first study the existing theory models of evaluation of competitiveness from the Economists and build a measuring tool of competitiveness Then, we will meet some banks managers to get more opinions of evaluation of competitiveness of commercial banks, to clear and to perfect the competitiveness measuring tool... 2012, according to the commitment of Vietnam in the WTO integration process The increase of foreign banks and their branches every year made the competition among commercial banks in Vietnam become more severely Figure 3 The Number of Commercial Banks over years We wonder whether Vietnamese commercial banks can stabilize and compete to other bigger banks in the coming time Originated from the above reality,... for improving the competitiveness of commercial banks Chapter I Literature Review I.1 Concept of competitiveness of commercial bank I.1.1 Concept of competitiveness The terms of competitiveness is often used to evaluate competitive capability of a country, an industry, an enterprise, and other fields Depending on research view, there will be different basic content for the research For instance, improving. .. software in banking operation, ability of upgrading and improving software of bank also express competitive capability of commercial bank For distribution network The increase of operation network of bank such as transaction office, branch is also one of the important factors of commercial bank It is an effective channel for a bank to increase market share and compete with other banks The number of. .. leaders Many embezzlement of employees and members of the Board of Management happened at Vietnamese commercial banks In 2010 and 2011 alone, loss amount from this action was up to thousands of billions of Vietnamese Dong (28,29, and 30) Recently, the embezzlement of a leader of Asian Commercial Bank (ACB) caused the loss of nearly VND 800 billion to the bank (32).It is one of the reasons that caused... very often, payment system through ATM, POS is not much effective It may be the limitation of capital for technology investment According to the calculation, mean of A11 and mean of A13 are higher the average VNJSCB has applied the software of core banking in management, and the research of new products shows rather good The secondary data collected from some Vietnamese joint stock commercial banks ... components of competitiveness 12 Chapter III Evaluation of the competitiveness of commercial banks III.1 Evaluation of all components of the competitiveness 14 III.2 Evaluation of the competitiveness of. . .IMPROVING THE COMPETITIVENESS OF VIETNAMESE JOINT STOCK COMMERCIAL BANKS In Partial Fulfillment of the Requirements of the Degree of MASTER OF BUSINESS ADMINISTRATION... to choose the topic of improving the competitiveness of Vietnamese commercial banks as my final thesis Objective and scope of research 12 In this thesis, we will study some theories of competitive