Enhancing The Competitiveness Of Agribank In Vietnams Market Finance Essay

To implement program in reconstituting system of commercial articulation stock bank and province bank follow determination by the Prime Minister in 2001. With going 150th member in World Trade Organization ( WTO ) in 07/11/2006, the commercial Bankss Vietnam had implemented many solutions to finish good programs which suggesting from Prime Minister. Many steps had offered in heightening fight such as: increasing authorised capital, restructure liabilities, introducing about managing, heightening quality of human resources, puting in engineering and so on. In add-on, today more and more the foreign Bankss was perforating deep into Vietnam ‘s market, every bit good as the understandings allow opening the banking sector in international economic integrating procedure. Through at that place, it made competition among commercial Bankss in Vietnam more and more intenseness

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The Vietnam Bank of Agriculture and Rural Development ( Agribank ) besides followed policy and that tendency. Although Agribank had advantages in competition compared with other commercial Bankss. However Agribank besides exist many failings, every bit good as being faced with the troubles and challenges in front. To do good usage of themselves advantages on the footing of finding failings, taking advantage of chances that WTO brings to get the better of these challenges.. I chose the subject “ Recommendation to heighten the fight of Vietnam Bank of Agriculture and Rural Development ( Agribank ) in domestic market to analyze. It truly is a subject that meets necessary of Agribank in current period

Research aim:

Systematic of the cardinal issues about competition and competitory ability of the commercial Bankss, the factors impacting competitory ability and the standards to assessment fight of a commercial bank

Analyzing and assessment the strength point, weak point, chance and challenge of Vietnam Bank of Agriculture and Rural Development ( Agribank ) . From at that place, measuring competitory ability of Agribank with the other commercial Bankss such as: Vietcom Bank ( VCB ) , Bank for investing and development of Vietnam ( BIDV ) , Asia Commercial Bank ( ACB ) aˆ¦

Give the solutions to heighten competitory ability of Agribank in tendency “ international economic integrating ”

The chief parts of the undertaking:

The consequences of the undertaking research will lend extra and systematise issues about competition and competitory ability, generalise competitory tendency of commercial Bankss in the following clip, measure the strengths, failings, the chances and challenges of Agribank, offering solutions to assist better the fight of the Agribank, doing mention for research, larning about subjects..

Introduction:

Economic integrating was being as a tendency for invention and development procedure of economic system. In fiscal integrating tendency, banking system is non merely play an of import function in domestic but besides spread outing outside

Integration creates motive for all commercial Bankss in domestic can introduce and develop, but integrating besides brings to the large challenges for Vietnam ‘s banking system which still immature. Besides, in integrating procedure the Vietnam ‘s commercial Bankss will have many chances, cooperation, every bit good as new invention from the foreign Bankss in the universe. But besides those advantage we must confront with challenges, hazard because in fact the fiscal ability of Vietnam ‘s commercial Bankss are still low, the ability in direction still limit, the merchandises and service are non diversified every bit good as low in invention and so on. Therefore the competitions among the Bankss are really drastic and hard. It requires the commercial Bankss in Vietnam must seek to fall in this integrating procedure to last and develop

Vietnam Bank of Agriculture and Rural Development ( Agribank ) besides approach that tendency. Although it had advantage comparison with the commercial Bankss, Agribank still exists the failing every bit good as the troubles, challenges. taking advantage of chances that WTO brings to get the better of these challenges.. I chose the subject “ Recommendation to heighten the fight of Vietnam Bank of Agriculture and Rural Development ( Agribank ) in domestic market to analyze

Part 1

1 ) Overview about fight of commercial bank

Commercial Bankss as a fiscal establishment typical intermediate, plays an of import function in adjust capital flow and run into investing demands of entities in the economic system, coincident it besides keeps of import function in guaranting the economic system operate swimmingly, expeditiously.

Globalization offers many advantages for the state ‘s economic system in general and Bankss in peculiar, but goes along with the chances and challenges is hazards that the Vietnam ‘s banking system confronting. This indicated that the competition is really tough, it requires each bank must hold the right orientation to travel off, catch up.

Competitions in the banking sector and the features of competition in the banking sector.

Like all concerns, the commercial bank is besides an endeavor as a “ particular endeavor ” , so Bankss besides exist the ultimate end is achieve net income. Therefore, the Bankss besides find out many steps to supply merchandises and services with high quality to run into benefits for clients. With the monetary value and the best competition cost, besides guaranting the truth, dependability and the most convenient to pull clients every bit good as expand market portion to accomplish the highest net income possible for bank. Thus competition in the commercial bank is besides the competition, scrambling clients based on all possibility of Bankss to run into the demand of clients about supplying merchandises and services has high quality. Making their ain features compared with other commercial Bankss in the domestic market ; make an advantage competition, increase bank net incomes, making prestigiousness, and trade name place in the domestic market.

With its particular features, competition in the banking sector besides had the major features:

First, the concern of Bankss is straight related to all sectors and facets of economic life-society. Therefore Bankss should hold diversified productions system, widely subdivision web and linked together to function all clients in any geographical location.The commercial bank must construct credibleness, make trust with clients because any the troubles of commercial bank can besides take to the ruin of other topics involved.

Second, the concern of banking is a service, particularly that service related to currency. This is a sensitive sector, so:

The capacity of the bank staff is the most of import factor to show quality of banking merchandises and services. Requirements for bank staff must make trust with clients by cognition, professional manner, professional cognition, ability to consult every bit good as factor about physical visual aspect

The bank ‘s services must rapidly, accurately, handily and security. Particularly with high safety require bank has to hold substructure solid floors, modern engineering systems. Furthermore, the sum of information and client informations is highly big so bank demand to hold the shop system and pull offing all this full information.

Furthermore, by money services of bank is sensitive so to make the trust of clients who taking to utilize their services. Banks must construct repute and trade name value over clip.

Third, to implement currency trading, commercial Bankss must play a function held mediators to mobilise capital in society. The capital outgo of bank are major come from mobilized capital and little portion comes from equity capital of bank. So requirement bank must hold professional direction makings, strong fiscal ability every bit good as ability in control and prevent hazards effectual concern to guarantee safe, effectual.

Finally, the major trading of bank is currency. The currency is a tool which State usage to pull off the macro economic system. Therefore, the currency is controlled tightly by State. Business activities of commercial Bankss conformity outside the general commissariats of the jurisprudence still is dominated by separate legal system for Bankss and pecuniary policy of Central Bank.

The standards to measure the fight of commercial Bankss:

Fiscal ability:

Fiscal ability of commercial bank represented by the factors such as:

Equity capital:

Theoretically, charter capital and equity capital is playing a really of import function in banking operation. The high charter capital will assist Bankss make prestigiousnesss in the market and make assurance for public.The low equity capital express weak fiscal ability and ability to back up hazard is low. Accordance Bassel Committee, the equity capital of commercial Bankss must run into a minimal 8 % of entire hazard assets transition of that bank. It is status to vouch safe operations in concern of banking.

Scale and ability to raise capital:

The ability to raise capital is one of the standards for measuring the public presentation concern of Bankss. The ability to raise capital besides shows effectual, capacity and prestigiousness of those Bankss in the market. The ability to raise capital good besides means that that bank used the merchandise, service or tool to raise capital efficaciously, attract clients.

The ability in liquidness:

Harmonizing to international criterions, solvency is the grade to which the current assets of an person or entity exceed the current liabilities of that person or entity. This mark measures the ability of bank can run into the demands hard currency of consumers. if the demand for money by depositors is limited, the prestigiousness of that bank will significantly cut down, those commercial bank will travel bankrupt if this happen

hypertext transfer protocol: //en.wikipedia.org/wiki/Solvency

Profitableness:

Profitableness is a step to measuring the concern of commercial Bankss. Profitability is analyzed by the undermentioned parametric quantities

Tax return on equity: ROE=

ROE expresses income ratio of co-shareholder equity

Return in plus: ROA=

ROA shows how profitable a company ‘s assets are in bring forthing gross.

Degree of hazard

The degree of hazard frequently expresses by 2 basic standards as:

Capital adequateness ratio ( CAR )

Recognition quality

Capital Adequacy Ratio ( CAR ) is a ratio that regulators in the banking system usage to watch bank ‘s wellness, specifically bank ‘s capital to its hazard. Regulators in the banking system track a bank ‘s CAR to guarantee that it can absorb a sensible sum of loss. Harmonizing to international criterions, the CAR ratio must be at least 8 % . The higher CAR ratio shows the stronger in fiscal ability of Bankss, generate more prestigiousness every bit good as trustiness of clients with bank

hypertext transfer protocol: //www.maxi-pedia.com/capital+adequacy+ratio+CAR

Credit quality is major expresses through bad debt over entire outstanding liabilities. The lower the sort of this ratio shows recognition quality of that bank is good and good fiscal ability and opposite.

Diversity of merchandises and services:

With the specialness of banking sector are merchandises and services. So there are no differences among the other Bankss. The commercial Bankss promote their fight non merely the basic merchandises but besides in the singularity, diverseness of their merchandises and service. Besides, the bank should utilize cyberspace that a tool in marketing their service and merchandises. For many grounds, it is assumed that internet-based house can run with a far lower cost construction than traditional brick-and-mortar houses. Further, it is assumed that is far easier to comparison store on cyberspace. Besides, with the low cost, it still brings consumers into a shop, trusting that they will so purchase several more profitable points while they are physically in the shop because it is excessively inconvenient. ( Metters, Kinh-Metters, Pullman, Walton ( 2006 ) , pg 32 )

A bank can do a difference for their each type of merchandise based on traditional merchandises will do merchandise catalogue became more varied, this will fulfill about demands for all consumers. Thereby easy dominate market portion and increase strong competition from Bankss.

Furthermore, the Bankss besides use complementary merchandises and other services to pull clients, generate gross for Bankss every bit good as provide periodic statements, fiscal guidance

Human resources:

In a service concern endeavor such as Bankss, the human factor plays an of import function in showing the quality of service. The staff who straight giving the clients the feeling about merchandise and service of bank, and make client assurance found with bank. Those are of import demand which Bankss ‘ staffs must hold. From at that place, it can assist Bankss rule market portion and increase efficiency concern to better their fight. In add-on, human resources bing influences direction determinations about human resources activities. Pressures to bring forth may increase short-run profitableness, but this force per unit area may cut down long-run profitableness because of employee bitterness and turnover. On the manus, the development of human resources systems and the creative activity of an effectual direction squad require spendings of times and money that cut down the short-run net income. ( David J. Cherrington ( 1995 ) ( pg 68 )

The fight about human resources of commercial bank evaluated by two facets is measure and quality of labour force

Technological capableness:

In the banking sector, the application of engineering is one of the chief factors making competitory strength of the Bankss. To better merchandise quality services and run into all the demands of clients so engineering demands is really of import. Presents, the commercial Bankss are implementing and developing merchandises with high engineering applications. Using the application of engineering is as a measuring to measuring fight, particularly in the field of payment and electronic merchandises

Management capacity in bank:

An of import factor which finding the success or failure in any concern is the function of concern leaders. Their determinations had impact to overall concern operation of endeavor.

Management capacity, monitoring and disposal of the leaders in banking has really of import function in guaranting the effectivity and safety in bank ‘s operation. The vision of leaders is of import factor which aid bank has right scheme in the long term. Normally assessment direction capacity, monitoring and disposal of a bank, we frequently review the criterions and the schemes that the bank edifice for its operations. High public presentation, with growing over clip and the ability to get the better of hard clip as an grounds for high direction capacity of the bank.

A figure of standards to demo the direction capacity of bank are:

Business scheme of the bank including selling scheme ( constructing repute, trade name ) , market cleavage, developing merchandise and services.

The organisational construction and ability to use efficient methods in banking direction.

The growing in concern operation of Bankss.

And now allow ‘s analyze about procedure in bettering enhance fight of HSBC bank to Agribank consider and larn lesson about experience in their development procedure

In Vietnam, HSBC foremost opened an office in Saigon ( now Ho Chi Minh City ) in 1870. In August 1995, HSBC opened a full-service subdivision in Ho Chi Minh City. In 2005, HSBC besides opened its 2nd subdivision in Hanoi and established a representative office in Can Tho.A

On 29 December 2005, HSBC acquired 10 % portion capital of Vietnam Technological and Commercial Joint Stock Bank ( Techcombank ) , one of the largest joint stock commercial Bankss in Vietnam by equity. In July 2007, HSBC became the first foreign bank to increase its interest in Techcombank to 15 % . In September 2008, HSBC completed the addition of its interest in Techcombank to 20 % , became the first foreign bank in Vietnam to keep a 20 % involvement in a domestic bank.

In September 2007, HSBC acquired 10 % portion capital of Bao Viet Holdings, going the exclusive foreign strategic spouse of Vietnam ‘s taking insurance company. In October 2009, HSBC signed an understanding to increase its shareholding in Bao Viet Holdings to 18 % from 10 % for VND1.88 trillion ( about US $ 105.3 million ) .

On 1 January 2009, HSBC started runing its locally incorporated entity and became the first foreign bank to integrate in Vietnam, after deriving blessing from the State Bank of Vietnam ( SBV ) to put up a Wholly Foreign-Owned Bank ( WFOB ) in Vietnam in September 2008. The new entity, HSBC Bank ( Vietnam ) Ltd. , is headquartered at the Metropolitan Building, 235 Dong Khoi Street, in Ho Chi Minh City ‘s District 1. With a registered capital of VND3,000 billion, HSBC Bank ( Vietnam ) Ltd. is 100 per cent owned by The Hongkong and Shanghai Banking Corporation Limited, the initiation and chief member of the HSBC Group.

HSBC is now the largest foreign bank in Vietnam in footings of investing capital, web, merchandise scope, staff and client base. HSBC ‘s history in Vietnam and cognition of its civilization reflects its committedness to presenting excellence in client service, every clip

( hypertext transfer protocol: //www.hsbc.com.vn/1/2/about-hsbc_en/about_HSBC )

The development in strategic relationships besides play an of import function for the development of HSBC in Vietnam. So far, “ HSBC is the alone foreign Bankss hold a upper limit of 20 % portions in a domestic bank and is alone foreign strategic spouse holds 10 % interest of Bao Viet. HSBC attaches much importance to investing in Bao Viet and Techcombank because these are theoretical accounts that has great possible for development in the long term. With the investing and long-run stableness in the banking and other strategic spouses, HSBC now has a really good place to develop in Viet Nam.

Through experience and development of HSBC, we see now in most Vietnam ‘s commercial Bankss got a deficit of skilled work force. The figure of bank professional staffs and experience are still less and this deficit would be show clearly in the hereafter if there is no readying clip seasonably. Looking back the development of HSBC, Initially, HSBC has seen been considered as a bank for aliens. But following following old ages, with the figure of clients Vietnam increased quickly. And this is one of the grounds for HSBC to alter that perceptual experience and way to domestic clients.Therefore HSBC had established bank with 100 % foreign owned in Vietnam and association in investing become strategic stockholders of Tecombank and Bao Viet insurance company… . So far, HSBC interested in forming the scholarship plan to pull the endowment individuals… HSBC has programs to develop over 400 new employees for HSBC in Vietnam, every bit good as “ targeted ” to the convenient location in other topographic points.

Despite the planetary fiscal market had many fluctuations but HSBC ‘s operations in Vietnam are still good maintained. HSBC has expanded its activities and services to back up its clients in hard times. Therefore, HSBC has six dealing suites comes into operation after two months having blessing from the State Bank of Vietnam for each dealing room. In fact, with the aid of the State Bank in Hanoi, Ho Chi Minh City and Binh Duong, HSBC has conducted activities expanded quickly. With long-run scheme in Vietnam, HSBC did n’t excessively worry about short-run fluctuations of the market.

HSBC has judged the sector of banking-financing worldwide have experienced a hard period and most complex lasted from 2008 until the beginning of 2009. However, the banking sector in Vietnam is non in the “ storm ” of planetary fiscal crisis. HSBC ‘s concern activities still thrive in some classs, HSBC remains confident in the sustainable development and its long term market in Vietnam. Through surveying, the retail banking system in Vietnam has great possible for development because merely 10 % of the entire population who have bank histories. This is one ground many Bankss are eager to develop its activities in Vietnam market.

Therefore, with the effects of the planetary fiscal crisis, HSBC remains loyal to long-run development scheme in Vietnam ‘s market despite the negative marks from the market

Part 2:

Agribank is the biggest commercial bank in Viet Nam with an operating web of 2,300 subdivisions and dealing offices countrywide which have been connected online. With the taking function in rural and agricultural fiscal market, Agribank has paid attending to spread out its operating web to territories and communes in order to ease the clients around the state to acquire entree to bank loans easy and safely. The client base of Agribank now includes over 10 million farm families and 30,000 endeavors. The countrywide web has created Agribank advantage in bettering the fight in the ambitious integrating procedure.

To run into the demand for import-export payment of local and foreign clients, Agribank has focused on spread outing the correspodent dealingss with other Bankss. So far, Agribank has 1,034 letter writer Bankss in 95 states and districts. Agribank signed understandings with Phongsavanh Bank – Laos, Acleda Bank – Cambodia, Agricultural Bank of China ( ABC ) , Bank of China ( BOC ) , China Construction Bank ( CCB ) , Industrial and Commercial Bank of China ( ICBC ) on cross boundary line payment from which clients and all parties benefit.

hypertext transfer protocol: //www.agribank.com.vn/102/790/about-us/agribank-network.aspx

Operational state of affairs of Agribank:

The chief merchandises of Agribank:

Recognition Merchandises: Pursuant to utilize loans aim, Agribank ‘s recognition merchandises including: consumer loans ( bargain auto, purchase house and payment by rewards, income, family shopping.. ) concern loans existent estate, securities loaning concern, pupil loans, loans to foreign workers ; loans for export and import, loans for purchase fixed assets, investing undertakings.

Mobilized Merchandises include: demand sedimentations ; lodge payment ; Savingss Deposit ( Savings Deposit secured by gold, money salvaging ) , Certification of clip sedimentations, histories for clip sedimentation ; money sedimentation from other Bankss.

The guaranteed merchandise in domestic include: command security, public presentation security contract, guarantees payment ; guarantee full payment, the guarantee of plants and equipment, loan guarantee ; other Guarantees

About service: Western Union, reassign money service, card service, service of payment wage through recognition card, check service, purchase and sell currency and so on

E-banking merchandise include: SMS banking ; Atransfer ; Vntopup

The operation consequence in 2009:

2009 twelvemonth is the most successful of Vietnam ‘s banking system after 3 old ages join WTO. Vietnam Bank of Agriculture and Rural Development ( Agribank ) besides achieves the success as:

In 2009, with consequence solutions such as way and concentrate on adjust involvement ; extremist debt renege procedure that was handled hazards, cut downing cost, Agribank has created a fiscal background the most powerful of all time. Owner equity increased from 14.040 billion VND in 2008 to 22.176 billion VND in 2009, net net income 4.143 billion VND. The fiscal ratio such as CAR addition from 8.5 % to 12.5 % in 2009 ; ROE: 26.86 % , ROA: 1.6 % . Besides, entire assets of Agribank reached VND 470,000 billion, an addition of 22 % compared with 2008 ; entire support resources reached VND 434,331 billion, and entire outstanding loans to the economic system reached VND 354,112 billion, of which outstanding loans to agricultural and rural countries was VND 242,062 billion. The fiscal state of affairs of Agribank expressed below tabular array:

Agribank ‘s fiscal state of affairs from 2004- 2009

Currency unit: Billion VND

Year

2004

2005

2006

2007

2008

2009

Net income

( 298 )

462

1.107

4.515

3.314

4.143

Owner equity

484

781

2.566

10.451

14.040

22.176

Entire plus

161.757

192.319

238.495

321.444

396.993

470000

Following this above informations, we can recognize that the state of affairs of concern every bit good as fiscal state of affairs of Agribank in many old ages ago was really good. This is general tendency of all the commercial Bankss in period clip of economic integrating. The addition in charter capital will lend expand proprietor equity of Agribank. This will assist Agribank to heighten competiveness in period clip of integrating

3 ) Measuring the fight of Agribank with utilizing SWOT theoretical account:

a ) Strength:

Network-wide, with over 2000 subdivisions and dealing offices, this is the strongest point of Agribank compared to other fiscal establishments in Vietnam. Besides, it besides creates favourable conditions for Agribank easy develop the retail market

Branding is considered the 2nd strengths that Agribank had when compared to the other fiscal establishments in the state. Nowadays, the trade name is seen as one the of import tool in set uping relationships, constructing trust with local and foreign clients.

Having the support of authorities and supporting and development fund of international organisations such as ODA, AFD, ADB funded for undertakings of agricultural development Rural, industrialisation the sectors as agribusiness, silviculture, piscary. Specifically, the terminal of twelvemonth 2007, Agribank has received, managed and deploy efficaciously 111 undertakings of the international organisations, particularly WB and ADB funded with a capital of over $ 4 Billion

B ) Weak:

Agribank is dominated much from authorities.

Management mechanism did n’t suited with presently state of affairs.

Merchandises non yet diversified, still hapless on merchandise. The quality of service is non concerned suitably.

Fiscal ability is still weak compared to standard of international.

Technology accomplishment, experience, direction accomplishment are still limit.

degree Celsius ) Opportunity:

Economic growing is predicted to be positive in the hereafter.

Opportunity to spread out market from with facts Vietnamese became a WTO member. Therefore, nearing the engineering, direction experience from foreign Bankss is really high.

Games people ‘s consciousness has bit by bit higher, the demand for quality and the usage public-service corporations used Bankss are big, so the chance to develop merchandises engineering is really good

vitamin D ) Menace:

The increasing the competition challengers in future with modern engineering, strong fiscal ability, professor in direction from foreign.

Market hazard increased with the liberalisation of fiscal markets, involvement rates, exchange rate, the ability to influence from the fiscal crises in states and parts worldwide will increase.

The economic system in development procedure and integrating are non truly strong and easy broke when run into the fluctuation.

Human resource is easy attracted by other challengers

Macro-management is besides in complete period and development, so system system policies and Torahs are besides non consistent, easy to impact economic system International capital is still weak.

4 ) Analysis of fight of Agribank with other rivals:

Fiscal ability:

Owner equity, entire plus of the commercial Bankss 31/12/2009

Currency unit: Billion VND

Name of commercial bank

Agribank

VCB

ACB

BIDV

Owner euity

22.176

16.710

10107

13.977

Entire plus

470000

255.496

167.881

292.198

About fiscal ability, at 31/12/2009, Agribank was commercial bank that had the strongest fiscal ability compared to the other commercial Bankss in Vietnam domestic. But since vietcombank have privatized, it became commercial articulation stock bank that have the biggest charter capital in Vietnam. However, the degree of that charter capital is still few if compared with the foreign Bankss. This will cut down fight of Agribank when utilizing the factors related to paid-up capital particular as:

-Loan bounds and warrant: the sum of loan bounds and warrant of recognition organisation with client does non transcend 25 % of the equity capital of recognition organisation, entire loans by recognition organisation for a client does non transcend 15 % paid-up capital of recognition organisation

– Restriction of mobilisation: following the banking regulation in 1990, entire mobilisation capital of commercial Bankss up to 20 times the paid-up capital.

– Restricting the investing and engineering development because commercial Bankss are prescribed merely utilizing 50 % their ain capital for investing in fixed assets, engineering

This is table which represented proprietor equity of some celebrated bank in the universe

Bank

Owner equity ( million USD )

Citigroup

112.537

Morgan

107.211

HSBC

98.226

Mitsubishi UFJ Financial Group

83.281

BNP Paribas

56.610

Mizuho Financial Group

52.243

Beginning: hypertext transfer protocol: //en.wikipedia.org/wiki/Bank

With possible about finance of above foreign Bankss, when committedness of WTO apply, the strength about competition of Agribank will acquire large affect. Besides, in many recent old ages commercial articulation stock Bankss noticed much about increasing charter capital in concern scheme

Besides increasing their charter capital, the commercial Bankss have actively chosen strategic spouses are the foreign Bankss to make links to make strong competition through his farming experience in direction, engineering, merchandises… A figure of Bankss with capital stock of the foreign Bankss include:

Commercial Bankss Foreign spouses Share per centum

ACB Standard Chartered bank 15 %

Connaught Investor ( Jardine Mutheson Group ) and 15 %

renting company IFC

Sacombank ANZ bank 10 %

Dragon Financial Holdings and 8,73 %

Renting company IFC 6,96 %

Techcombank HSBC 20 %

VP Bank Oversea Chinese Banking

Corporation ( OCBC ) 20 %

OCB BNP Paris 10 %

Ph?°??ng Nam Cathay USA 15 %

UOB Singapore 15 %

Eximbank Sumitomo Mitsui Banking

Corporation ( SMBC ) , VOF

Investing Limited-British Virgin 25 %

Islands, Mirae Asset Exim

Investing Limited ( MAE )

Besides the commercial bank is non merely receive the benefits and the existent value when cooperate with the foreign bank or the fiscal foreign cooperation but besides create repute, their trade name thanks to the trade name of the above cooperation trade name. This is really of import to the concern operation of the bank. It contributed in increasing the competitory strength of that commercial bank. Therefore, increasing force per unit area the fight among the commercial bank

Compare ROA, ROE and CAR ratio of some other Bankss:

The fiscal ratio of the commercial bank in 2009:

Agribank

VCB

BIDV

SACOMBANK

Roe

26.86 %

25,58 %

21,04 %

39,16 %

ROA

1.6 %

1,64 %

0,94 %

2,9 %

Car

12.5 %

8,11 %

7,55 %

11,07 %

Comparison with the other commercial Bankss, the fiscal ratio buttocks fiscal ability of commercial bank. in the terminal of 2009, Agribank still gain advantage. Particularly CAR ratio of Agribank ever improves in many recent old ages and about approaches the standard degree of international

The quality of work force:

2009 was besides the twelvemonth Agribank placed a strong focal point on preparation and furthering its staff to run into the demands of competition and integrating. Throughout the twelvemonth, Agribank conducted preparation and retraining to a sum of 142,635 attendee staff members ( an addition of 57 % attending compared with 2008 ) ; successfully implemented on-line preparation theoretical account, and recruited more than 2,000 immature staff with strong educational foundation, foreign linguistic communication accomplishments and IT cognition in order to fix human resources for the undermentioned old ages.

hypertext transfer protocol: //www.agribank.com.vn/102/784/about-us/history.aspx

Technology capacity:

Aware of the importance of non-traditional recognition merchandises and services, during 2009, Agribank utilized modern information engineering to develop and present modern banking merchandises and services including: Mobile Banking related services, such as SMS Banking, VnTopup, A Transfer, A Paybill, and VnMart ; payment connectivity with the State Treasury, in coordination with Taxation and Customs Offices for the aggregation of province budget ; and the issue of more than 4 million cards of all sorts.

In the context, Vietnam joins in WTO and the international economic integrating procedure. Agribank ‘s development scheme is to go a multi-sector, multi-function, multi-owner fiscal group. Following to this, the bank has identified its cardinal ends: staying the dominant function in rural and agricultural fiscal market, being the chap of around 10 million agriculture families, rushing up the restructuring procedure, wholly settling NPLs, making Capital Adequacy Ratio ( CAR ) following international criterions, bettering IT substructure, diversifying merchandises, increasing service quality, fixing qualified staff, guaranting employees ‘ involvements, advancing consciousness of AGRIBANK trade name and civilization.

Part 3:

Some recommendation to heighten competitory ability of Agribank

To heighten fight for State Bank and Agribank need to do clip to sync the undermentioned steps:

Accelerating the procedure of reconstituting the Vietnam State Bank system across district and continue to open representative offices or subdivisions in neighbouring states. Banking reform in the way of beef uping executive direction, fiscal capacity, enlargement in graduated table and fight. Linkss to organize strong pudding stone about banking and finance, this truly is a benefit status to larn experience and hone itself every bit good as survey in addition the charter capital to heighten the fight of the banking. Besides, work outing absolute non-performing loans ( NPLs ) and do more clearly for fiscal study of bank.

There should be a medium-term concern scheme and long term, particularly human resources scheme. The bank can spread out their strategic human resources at cardinal universities every bit good as set up preparation centres in the bank.

Particular attending to the pay income every bit good as other governments to employees ( coverage for workers every bit good as include insurance policies for their households with the object cardinal employees, senior staff… ) . Therefore, there should be suited pay government in conformity with their capacity, avoid paying rewards under the state-owned endeavors

Strengthen and better the subdivisions web, this is the chief strength of the bank every bit good as spells in line with client attention policies and enhance in selling. Besides, bank should go on to diversify banking merchandises and services: in mobilising capital, family recognition, consumer recognition, back uping in export and import, payment services, card, roll uping payment, mandating every bit good as e-banking… Noting the development of merchandises which associated with stock market and insurance activities.

Modernize banking engineering and to see this strategic end to vie with foreign Bankss, better concern efficiency and to pull domestic clients. Particularly the payment mechanism must fast, secure, convenient and systematic.

We must find that the investing in modern engineering can increase the initial cost, but will cut down costs in the long term concern, pull more clients, manage hazard due to rapid information, the efficient operating. Especially Bankss will raise more money direct payment ( less involvement ) by the payment easy, convenient and expanded distribution channels.

To heighten the work of supervising to guarantee safety for both the banking system and make trust for populace, better trade name Agribank sustainable development for the prosperity of the community. Agribank need to beef up in internal controls to supervise and prevent mistakes in each bank. The commissariats on monitoring and supervising should be studied and promulgated in conformity with international criterions and statute law Vietnam

If the above recommendation makes synchrony manner, it will surely lend to bettering the fight of Vietnam Bank of Agriculture and Rural Development ( Agribank ) in the procedure of international integrating.

Sustainable development orientation and growing of Agribank:

In 2010 and for the coming old ages, Agribank is to advance the function of the taking bank in the national economic development and the dominant function in agricultural and rural fiscal market, functioning agribusiness, husbandmans and rural countries. Agribank will do great attempts in fund mobilisation from both local and foreign beginnings, maintain the recognition growing at a sensible degree. Agribank will give precedence in investing in agribusiness, husbandmans and rural countries particularly to farm families with agricultural, forestry, piscary, and salt production and to SMEs which has met the demand for passage to agricultural and rural production. As a consequence 70 % of the entire outstanding loans will be in agribusiness and rural countries. For keeping the taking bank supplying the modern and high quality merchandises and services, run intoing the demand of clients and increasing the noncredit income, Agribank is concentrating on renovate and develop banking engineering in a modernisation mode. Agribank expects to make the ends for 2010 as follows: the fund resource additions by 22 % -25 % compared with 2009 ; the rate of loans to agricultural and rural countries is 70 % , NPLs below 5 % , noncredit income additions by 20 % , net income additions by 10 % , CAR complies with international criterion.

A

To make those terminals, Agribank will set forth a figure of solutions which are following the policy of the Government and the State Bank of Viet Nam on pecuniary policy, rushing up the fund mobilisation from different beginnings, heightening the cooperation and connexion with large organisations and endeavors, heightening the fund mobilisation in urban countries and metropoliss to supplement capital to rural country and guarantee capital for agribusiness, husbandmans, and rural countries ; transporting out investing selectively and with precedence, concentrating on due debts and NPLs aggregation in order to go around capital for agribusiness, husbandmans and rural countries every bit good as cardinal plans of the Government, guaranting the recognition growing as instructed by the State Bank of Viet Nam. Agribank plans to transport out a 10 twelvemonth scheme reappraisal ( 2001-2010 ) , develop concern scheme for 2011-2015 towards 2020 ; develop the publicity scheme for Agribank trade grade. The banking engineering will be modernized based on IPCAS II which is used to develop the new merchandises and services with high quality to better function the clients, enhance competitory advantage. The merchandises like cross boundary line payment, remittal, FX dealing, and valuable documents will be paid much attending to. All processs will be reviewed and amended as needed harmonizing to the new direction theoretical account and international criterions. Human resource development and preparation will play an of import function in developing Agribank trade grade and civilization and prestigiousness in local and foreign market. Agribank doctrine is ever for the prosperity and sustainable development of clients, spouses, of the whole community and the bank itself.

hypertext transfer protocol: //www.agribank.com.vn/102/786/about-us/sustainable-development-and-growth.aspx

Decision:

International economic integrating is indispensable and compulsory with Vietnam in development procedure. We are involved in organisations and international economic associations on the universe like ASEAN, ASEM, APEC, and particularly WTO. Integration will order for us many chances but besides many troubles and disputing. Banking industry in general and in peculiar Agribank is non get away that tendency. With started the low point and undergone the restructure and rearrange procedure. Although there have been certain successes, but in general the cardinal elements of competition is still limited.

During the period of integrating, competition is seen as inevitable and is the endurance of each organisation. To better competition in the domestic market and spread outing market outside, Agribank still must better many problems in consolidating, heighten fiscal capacity, better direction and quality of human resources and promote utilizing application of modern engineering to develop their merchandises and services every bit good as strong forcing in constructing trade names in both domestic and international

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