BANKING ACADEMY Advanced Program GRADUATION THESIS COMPLETE FINANCIAL ANALYSIS OF BUSINESS CUSTOMERS IN CREDIT ACTIVITIES AT VIETNAM JOINT STOCK COMMERCIAL BANK FOR INDUSTRY AND TRADE - WEST HANOI BRANCH Student: Truong Nguyen Ha Trang Student code: 20A4011372 Class: K20CLCD School year: 2017 – 2021 Instructors: Dr. Bui Thi Men 1 17014126033021000000 PLEDGE I hereby declare that is my independent graduate thesis conducted under the guidance of Dr. Bui Thi Men The data stated in the graduation thesis is honest, has its source and has not been published in any other research work. Student Truonng Nguyen Ha Trang 2 ACKNOWLEDGEMENT In order to carry out this research topic, besides a small part is the effort and learning effort to develop yourself, most of it comes from the guidance and support from the instructors, the staff staff of Joint Stock Commercial Bank of Vietnam – West Hanoi Branch – Transaction Office Hoai Duc.
I would like to thank my lecturer - Dr. Bui Thi Men, who was extremely dedicated to guiding, only thanks to her advice and assessment, so I was able to complete this thesis in the best way. In addition, I would like to thank all the staffs and employees of Joint Stock Commercial Bank of Vietnam - West Hanoi Branch – Hoai Duc Transaction Office, especially Ms. Nguyen Thuy Hoa - Head of Transaction Office Hoai Duc for their support.
, help me complete the internship at the bank smoothly and learn the most experience. Hanoi, May 10, 2021 Student Truong Nguyen Ha Trang 3 CONTENT PLEDGE. 3 LIST OF ABBREVIATIONS. 9 LIST OF TABLES.
The urgency of the subject. Object and scope of the study. 13 CHAPTER 1: THEORETICAL BASIS OF FINANCIAL ANALYSIS OF BUSINESS CUSTOMERS IN CREDIT ACTIVITIES AT COMMERCIAL BANK. Overview of corporate financial analysis in credit activities to businesses at commercial banks .The concept, role and objectives in financing analysis of corporate customer.
Financial analysis for business managers. Financial analysis for investors. Financial performance analysis for credit providers. Financial performance analysis for salaried employees in the business.
Information used in financial analysis of corporate customers. Factors affecting the financial analysis of corporate customers. Factor belonging to the Bank. Bank's capacity in loan analysis.
Bank’s marketing activities. Factors belonging to the enterprise. Financial management capacity of the enterprise. Business loan needs.
Reputation, brand of the business. Businesses do not understand the bank's credit regulations. Financial problems of the business. The implementation of regulations on accounting and auditing is not good.
Restrictions on collateral. Unconvincing business project plan. 24 CHAPTER 2: SITUATION OF FINANCIAL ANALYSIS OF BUSINESS CUSTOMERS IN CREDIT ACTIVITIES AT VIETINBANK WEST HANOI BRANCH. Brief introduction about Vietinbank West Hanoi Branch .1 Organizational structure at Vietinbank West Hanoi Branch.
Business operation situation. Fund raising situation. Business results in the first 6 months of 2020. Current status of financial analysis of corporate customers in credit activities at Vietinbank West Hanoi branch.
Searching and approaching customers. Receiving and checking credit applications. Credit approval/decision. Notice of approval/credit decision.
Signing credit agreements. Completing procedures for obtaining credit guarantee. Handing over and reviewing credit application documents. Disbursement according to signed credit extension contract, issuance of guarantee commitment, payment order, discount.
Inspection and supervision after credit granting. Archieve credit records. Data collection and analysis methods. Production and business capacity.
Evaluation of the production and business situation. Assessing the current situation of financial analysis of corporate customers in credit activities at Vietinbank West Hanoi Branch .1 Some results achieved .1 Consumer loan products are limited and monotonous. The number of borrowers is limited. The structure of consumer loans is not balanced.
The credit process and regulations are still complicated and not suitable for customers. Banking technology is still limited and underdeveloped. 64 7 CHAPTER 3: SOLUTIONS TO COMPLETE FINANCIAL ANALYSIS OF BUSINESS CUSTOMERS IN CREDIT ACTIVITIES AT VIETINBANK WEST HANOI BRANCH .1 General development direction. Development orientation of consumer credit activities.
The credit process and regulations need to be changed reasonably. Improve the quality of information for customer financial analysis. Improve the level of technology to serve the financial work of customers. Some recommendations to improve credit activities.
Recommendations for Vietinbank. Recommendations to the State Bank. 75 LIST OF REFERENCES. 77 8 LIST OF ABBREVIATIONS Acronyms Original BAP Beginning account payables BS Blance Sheet CFS Cash Flow Statement Co,.Ltd Limited Liability Company COGS Cost of good sold EAP Ending account payables EBIT Earning before tax NPL Non- performing loan IS Income Statement ROA Return on Assets ROE Return on Equity ROS Return on Sales 9 LIST OF TABLES Chart Name Chart 1 Organizational structure at Vietinbank West Hanoi Branch Chart 2 Fund raising situation of Vietinbank from 2018 - 2020 Chart 3 Credit structure by customer segment in Vietinbank 2020 Chart 4 Vietinbank's CIR in the period 2015 - 2020 Table Name Table 1 Loan balance according to the loan term of Vietinbank Table 2 Loan balance according to debt quality of Vietinbank Table 3 Business results in the first 6 months of 2020 of Vietinbank Table 4 Income structure in the first 6 months of 2020 of Vietinbank Table 5 Operation cost in the first 6 months of 2020 of Vietinbank Table 6 Property situation in the first 6 months of 2020 of Vietinbank 10 INTRODUCTION 1.
The urgency of the subject The system of commercial banks in Vietnam in recent years has grown strongly in both quantity and quality, constantly increasing its competitive strength in order to maintain market share and develop. In order to ensure sustainable development and be competitive enough in the current context, it is required that banks have solutions as well as pay due attention to performance evaluation through financial analysis tools. In the near future, the number of large enterprises will tend to increase rapidly, so commercial banks need to prepare to best meet this potential customer. The benefits of large enterprises to the bank are not only having the most outstanding loans, giving the bank the highest revenue compared to other customer groups, but also relationships and especially providing many sources of other news.The Vietnamese economy is in dire need of the sustainable development of enterprises, especially large enterprises, to contribute to macroeconomic stability, safety and attractiveness of the business environment.Recognizing this, in recent years Vietnam Joint Stock Commercial Bank for Industry and Trade - Vietinbank has made great efforts to develop credit activities to meet the needs of large enterprises and develop the Bank.
However, with what has been achieved is not yet commensurate with the potential of the bank as well as that of large enterprises, it is necessary for Vietinbank to constantly develop credit activities for large enterprises. stopped expanding and developing, that's why the topic: "The current situation of corporate customers’s financing analysis in credit activities at Joint Stock Commercial Bank for Industry and Trade of Vietnam Vietinbank - West Hanoi Branch" was a selected research to meet practical requirements. Research Overview The banking system has been playing an important role in the renewal of the country, promoting economic growth. In which, it is impossible not to mention the positive contributions of credit activities at commercial banks.
For credit activities, the analysis of customers' financial records is very necessary and important. That is the premise for credit institutions to make choices for customers with good financial potential, good 11 capital structure, and feasible business characteristics with the economic situation. Therefore, the provision of solutions and recommendations to improve the financial analysis of corporate customers in the bank's credit activities must always be updated and appropriately changed from time to time in order to constantly improving credit efficiency, not only helping to increase profits for credit institutions in particular but also affirming a foothold for the entire banking system in general. Therefore, this is a familiar topic chosen by students to carry out the thesis.
Research Purposes The research topic aims to solve the following basic problems: Theoretical: Systematize the theoretical basis for credit development for large corporate customers of commercial banks through an overview of commercial banks' credit activities, characteristics credit for large corporate customers, the concept, evaluation criteria, analysis of factors affecting the development of credit activities for large corporate customers of commercial banks. In practice: Describe, will assess the current situation, point out the causes that limit the development of credit activities for large corporate customers as a basis for proposing and recommendations. solutions to develop credit activities for customers large enterprises at Vieinbank. Object and scope of the study Research object: Developing credit activities for large corporate customers at commercial banks.
Research scope: Scope of content: The thesis only studies some of the main contents of the development of credit activities at commercial banks. Spatial scope: Research on the development of credit activities for large corporate customers at Vietinbank. Scope of time: The current situation of the research project in the period of 2019-2020, the solutions proposed in the project are meaningful until 2025. Research perspective: Research from the perspective of commercial banks.
Research Methods Approach to problem solving: The thesis applies statistical methods of synthesis, analysis, comparison. to analyze and evaluate the current status of financial analysis quality at Vietinbank. Data source: is a secondary data source. The thesis uses data from within Vietinbank from 2017 - 2020 through annual reports, consolidated financial statements, business results reports.
External data sources, namely articles published in journals, reports, textbooks, books, theses, theses, research topics, annual reports of the State Bank , related websites. Structure In addition to the introduction, conclusion and list of references, the thesis is structured into 3 chapters:Chapter 1 Overview of corporate financial analysis in credit to enterprises in commercial banks. Chapter 2: Current status of financial analysis business customers in credit at commercial banks Vietinbank - Branch West Hanoi. Chapter 3: Solutions to complete financial analysis of corporate customers in credit activities at Vietinbank - Hanoi Branch.
13 CHAPTER 1: THEORETICAL BASIS OF FINANCIAL ANALYSIS OF BUSINESS CUSTOMERS IN CREDIT ACTIVITIES AT COMMERCIAL BANK 1. Overview of corporate financial analysis in credit activities to businesses at commercial banks 1.The concept, role and objectives in financing analysis of corporate customer *Concept: Analysis of corporate financial activities is the process of comprehensively applying scientific analytical methods to assess the financial status of an enterprise, helping managers with interests associated with the enterprise understand the current financial status of the enterprise financial security and integrity of the enterprise, accurately predicting the future financial status of the enterprise as well as the financial risks that the enterprise may face; thereby making decisions in accordance with their interests. * Roles and goals: Subjects with interests attached to the enterprise and related subjects are interested in the financial activities of the enterprise and have the need to use economic and financial information of the enterprise. Each object is interested in a different perspective and with different goals.
Objects interested in the financial situation of the business include: - Corporate managers Investors (including current and future shareholders) - Credit providers for businesses such as banks, financial institutions, corporate bond buyers, other businesses. - Salary earners in the enterprise - State management agencies; - Financial analyst; Different users of financial information will make decisions with different purposes. Therefore, analyzing financial performance for each different audience will meet different goals. Financial analysis for business managers 14 As the person who directly manages and runs the business, the manager understands the financials of the business best, so they have a lot of information for analysis.