Internship Report

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1. General introduction about VCB HN

1.1. History and achievements:

Bank for Foreign Trade of Vietnam, Ha Noi Branch – VCB HN was established

in 01/03/1985 according to the Decision 177/NH.QĐ of Chairman of State Bank of

Vietnam. The purpose of this establishment was to support the development of the

economy of Ha Noi in general and to facilitate the business activities of many

domestic as well as foreign enterprises that were operating in Ha Noi in foreign trade

and travel area.

1985 – 1998: The first period with many affections of subsidy economy, VCB

HN started with many difficulties such as lack of infrastructures, poor human

resources with only 64 staffs … Therefore, the beginning business outcomes were

undesirable: fund mobilization was only 53.4 billion VND, total loans was 13.9 billion

VND, and the number of customers was 20 enterprises.

1999 – 2007: With the development of technology, VCB HN applied the Core

Banking – SilverLake technique of foreign modern banks so it created many new

products and services such as: internet banking, SMS banking, VCBMoney, online

transaction… the implementation and management of banking transaction become

more and more easier for both banks and customers. Network transaction is widened

all over the city include: Thanh Cong, Ba Dinh, Chuong Duong, Cau Giay ( Thang

Long) branches and more than 10 transaction offices. At this time the total capital of

VCB increased dramatically and achieved the impressive number at 10 000 billions

VND. In 2004, VCB HN was awarded the Third Level Labour Medal by the State .

2007 until now: Thanh Cong, Ba Dinh, Chuong Duong, Cau Giay branches

and the Transaction Office number 6 directly belongs to central VCB. After the

division, fund mobilization of VCB HN was 8.355 billion VND, total loans was 3.125

billion VND, import - export settlement turnover was 433 million USD, issued more

than 110 000 ATM card, 5000 international credit card, the number of credit

customers was 1053 people and more than 100 000 customers open transaction

accounts at VCB HN, net operation income before provision in 2009 was 125 billion

VND. Now the head office of VCB HN is located at 344 Ba Trieu Street and has 10

transaction offices.

Supervisor: GS.TS Pham Quang Trung Vu Thanh Loan – AF49

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1.2. Development orientation:

VCB wants to become one of the biggest and the most modern banks not only

in Vietnam but also in the Asian area and all over the world. VCB HN is one important

member of central VCB so VCB HN set some targets and orientations as follow:

Re-organize the organization structure and management system with customer-

oriented purpose and follow the standard of modern banking. Improve the

financial system and achieve the targets under the international rules on banks.

Diversify the banking operations including the whole sale banking and the retail

banking activities. Expand the relationship with all customers in every

economic sector, pay greater attention to small and medium enterprises.

Expand the network transaction and open more channels of banking activities in

the area of Hanoi. Develop rapidly the products and services of VCB on the

basis of modern technology.

Display the leading role in the money market, foreign exchange and import-

export activities.

Enhance training, retraining and recruiting new staffs, creating high-quality

human resources for the bank, so meeting the development needs and improve

business operations of the bank.

Upgrade technology to meet increasing demands from customers as well as to

serve business management and administration.

1.3. Organization structure:

Diagram 1.1 Organization structure of VCB HN

Board of directors

1. Internal control & audit department

2. Credit department

3. Import-export settlement department


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4. Banking service department

5. Card payment department

6. Treasury department

7. Financial accounting department

8. Information Technology department

9. Human resources department

10. Secondary branch - Thành Công Credit – Payment department

Accounting – Service department

Administration – Treasury department

11. Secondary branch - Cầu Giấy Credit – Payment department



12. Secondary branch - Chương Dương Credit – Payment department



13. Secondary branch - Ba Đình Credit – Payment department



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14. Transaction office number 1 - Hàng Bài

15. Transaction office number 2 - Trần Bình Trọng

16. Transaction office number 3 - Hàng Đồng

17. Transaction office Nội Bài


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Source: vcbhanoi.com.vn

Board of directors:

Diagram 1.2 Structure of the board of director

Department Manager

Human resources Ms Phan Thi Hong Van

General co-ordination office Ms Nguyen Hoang Oanh

Import – export settlement Ms Le Thi Lien

Customers Mr Nguyen Tuan Phong

Financial accounting Ms Doan Thi Khanh Van

Treasury Ms Ha Thi Lan

Card payment Mr Tran The Vinh

Banking services Ms Nguyen Thi Mai Hoa

Individual customers Mr Pham Thanh Binh


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Internal control & audit Ms Chu Thi Chau Hanh

Debt handling Ms Nguyen Thi Ba

Technology management Mr Trinh Nam Hung

1.4. Network transaction:

Head office: 344 Ba Trieu

Transaction office number 1: 2 Hang Bai

Transaction office number 2: 14 Tran Binh Trong

Transaction office number 3: 1 Hang Dong

Transaction office number 4: 36 Hoang Cau

Transaction office number 5: Khu CC2 Bac Linh Dam

Transaction office number 6: 277 Nguyen Trai

Transaction office number 7: First floor, Building 434 Tran Khat Chan

Transaction office Yet Kieu: 14 Yet Kieu

Transaction office Bat Dan: 48 Bat Dan

Transaction office Hoang Mai: 89B Ho Den Lu

Transaction office Lac Trung

Transaction office Noi Bai

2. Business activities and results of VCB HN in 2010:

2.1. Fund mobilization:

In 2010, despite facing pressures of stiff competition with the other commercial

banks in the race of interest rates to implement the Circular 13/2010/TT.NHNN and

Circular 19 of governor of State Bank about the regulations of adequacy ratio in activities

of credit unions, but with the flexibility in interest rate operating mechanisms of the board


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of management and the best efforts of all employees at the branch, the fund mobilization

activity got remarkable results.

Total fund mobilization of VCB HN in 2010 reached 11.129 billion VND.

Mobilized fund directly from the economy reached 10.705 billion VND, increased by

28.1% compared to that of 2009 and completed 98.5% of the fund mobilization

expectation. If we based on the “Average implementation speed” target that is given

by Central VCB to calculate the time to complete plan then the daily average fund

mobilization from 01/01/2010 to 31/12/2010 in compared with 31/12/2009 increased

by 9.63%. This figure shows that the growth rate of fund mobilization of VCB HN

branch in 2010 maintains stable and strong.

Source: Financial report of VCN HN 2009

The structure of mobilized capital of VCB HN in 2010 is classified according to:

Type of currency:


6270

2553

6818

2455

8355

3125

0

1000

2000

3000

4000

5000

6000

7000

8000

Billion VND

31/12/2007 31/12/2008 31/12/2009

HĐV CV

9000

Diagram 2.1 Fund mobilization and lending activities through periods

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Domestic currency mobilization reached 6.931 billion VND,

accounting for 64.7% of the total mobilized capital, increased by

44% compared to that of 2009.

Foreign currency mobilization reached 4.540 billion VND,

accounting for 35.3% of the total mobilized capital, went up by 6% in

compared with that in 2009.

Economic sectors:

Mobilized fund from economic organizations reached 4.540 billion

VND, accounting for 42% of the total mobilized capital, increased by

85% over 2009.

Customer deposits reached 6.165 billion VND, accounting for 58%

of the total mobilized capital, increased by 4.4% over 2009.

Maturity:

Short-term mobilized capital reached 10.057 billion VND,

accounting for 94% of the total mobilized fund.

Medium-term and long-term mobilized capital reached 648 billion

VND, accounting for 6% of the total mobilized fund.

Table 2.1 Structure Of Mobilized Capital From 2008 To 2010

Billion

VND

Targets

2008 2009 2010

Outcome

s Percentage

Outcome

s Percentage

Outcome

s Percentage

1. Economic sectors 7,175 100% 8,355 100% 10,705 100%

Residents 5,395 75% 5,904 71% 6,165 58%

Economic organizations 1,780 25% 2,451 29% 4,540 42%

2. Currency 7,175 100% 8,355 100% 10,705 100%

VNĐ 3,919 55% 4,803 57% 6,931 65%

Foreign currency 3,256 45% 3,552 43% 3,774 35%


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Source: Financial report of VCB HN 2010

2.2. Credit activities:

2.2.1. Loans:

Bank for Foreign Trade of Vietnam is of ability to meet fund’s demands of

customers (being individuals, representatives of households, representatives of

cooperatives) with simple and convenient lending procedures, competitive and

attractive lending interest rates.

Type of loans:

- For business purposes including: for development of family’s prosperity, for

implementing plans of manufacture and business to serve daily life.

- For consumption: for purchasing of consumption goods, housework facilities, for

transport means (motobike, automobile …), living house/land…or unsecured lending

to employees. (Loans in foreign currencies must be in accordance with the existing

regulation on forex management.)

From beginning until now, the lending process at VCB HN always follows

strictly the Resolution 03/NQ-CP (15/01/2010) and Resolution 18/NQ-CP

(06/04/2010) of the Government about some solutions to stabilize the

macroeconomics, at the same time, VCB HN adhere to the government’s policy of

against the economic downturn by encouraging investment, consumption, stimulating

economic growth through interest rate lending support channel, focusing on the task of

strengthening the capital mobilization according to the guidelines of the Bank of

Vietnam, ensuring to stabilize the monetary balance, supporting enterprise and

residential business activities and life.

Until 31/12/2010, the gross loans of HN branch reached 3.932 billion VND,

increased 25.8% compared to that of 31/12/2009, beyond the expectations 7.7% (the

2010 plan was 3650 billion VND).

The loans structure until 31/12/2010 as follow:

According to type of currency:

Outstanding loans of domestic currency reached 2.834 billion VND, accounting

for 70% of total loans, increased by 24% compared to 31/12/2009.


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Outstanding loans of foreign currency earned 1.098 billion VND, accounting

for 30% of total loans, increased by 30% compared to 31/12/2009.

According to loans maturity:

Short-term loans reached 2.993 billion VND, made up 76% of total loans

Medium-term and long-term loans reached 939 billion VND, accounting for

14% of total loans.

Especially, in 2010, the Board of director identified the key tasks is to handle the bad

debts, besides that ensure a safe credit growth, always maintain a reasonable level of

outstanding loans and develop a right direction for credit growth.

Until 2010, total bad debts were 237.7 billion VND, accounting for 6% of total loans.

In 2010, VCB HN collected bad debts from Hanoi Electronics Company; and it also

collected 78.397 USD bad debts of Materials and Tourism Company and 300 million

VND from Import-Export Shoes Joint Stock Company.

Loans under the interest rate subsidy program:

Until 31/12/2010, total loans under the interest rate subsidy program at VCB

HN were 52 billion VND, all of them are medium and long term loans, among them:

Loans under interest rate of 4% were 47.7 billion VND

Loans under interest rate of 2% were 4.3 billion VND

This program follows the Circular 27/2009/TT-NHNN of State Bank of Viet Nam on

the purpose of supporting individuals and organization to borrow money at a low rate

to do business.

Real estate loans and stock investment loans:

At this time, total real estate loans at VCB HN reach 411 billion VND,

accounting for 10.4% of total loans. In fact, because of some reasons related to the

legal documents and rules, so this kind of loans is not really developed and noticeable.

VCB HN is promoting some real estate projects to attract more customers in this

potential area.

Loans for investment in the stock market also contains many potential risks,

which require a deep research, Hanoi Branch is not currently developing this service.

Securities outstanding loans currently stand at nearly 4.7 billion VND are the

outstanding loans to securities code named VCB toward VCB staffs enjoying preferred

prices.


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Loan under interest rate agreement:

Total outstanding loans under interest rate agreements reached about 804 billion

VND, of which:

Outstanding loans for capital needs for production, trading, services and

investment reached 528 billion VND, of which short-term loans reached 495 billion

VND, accounted for 93.7%, medium and long term loans reached 32 billion VND,

occupied 6.3% to this type of loans. Specifically: loans for production cost of

processing industry were 65 billion VND; export loans were 430 billion VND.

Outstanding loans to serve daily life, loans through the issuance and usage of

credit cards reached 276 billion VND, of which: loans for serving daily life were 266

billion VND; loans through the issuance and usage of credit cards were 10 billion

VND.

In VCB HN, the loans to serve daily life often mainly meet the demand for

buying appliances, household equipment, purchase of vehicles…in which the majority

of loans is for buying appliances and household equipment (about 259 billion VND,

accounting for 97% to this type of loans)

Circular 13/2010/TT-NHNN implemented from October, 2010 and at the same

time, at the end of the year, the needs for borrowing of enterprises and investment

projects increased rapidly, so the allocation of credit balance based on total

outstanding loans of Central VCB is really a big challenge in the relationship with

customers to VCB HN in 2010.

2.2.2. Guarantee:

Based on customer’s request, Vietcombank issues a written commitment to a

third party designated by the customer (the guarantee’s beneficiary) on execute

financial responsibility for the customer when the customer doesn’t execute or execute

correctly the responsibility committed to the guarantee’s beneficiary. The customer

has to accept the credit and return to the Bank the amount paid on their behalf.

Types of guarantees that can be issued:

Borrowing guarantee

Payment guarantee/ Standby Letter of Credit

Bid Bond


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Performance Bond

Product quality guarantee

Advance payment guarantee (Guarantee for Reimbursing advanced payment,

guarantee for Reimbursing deposit or deposit guarantee)

Guarantee for retained amount (Work quality guarantee/ Warranty guarantee/

Maintenance guarantee)

Counter guarantee

Confirmation of guarantee

Guarantee for studying overseas

Other types of guarantee not forbidden by law and suitable to international

practice.

The total guarantees in 2010 of VCB HN were 190 billion VND, 2.85%

increase compared to 2009, exceeding by 24.2% compared to the plan given by

Central VCB in 2010 (161 billion VND).

2.3. Import – export settlement:

VCB HN had many difficulties in import – export settlement activities in 2010

due to the restriction in import of State, complex movement of foreign exchange

market, the big difference between the bank rate and the market exchange rate

therefore customers with incomes from exports often did not want to sell USD or they

sold USD at black market so it was very hard for banks to buy foreign currency from

customers and it leaded to the shortages of foreign currency supplies for import-export

payment at banks. On the other hand, the current mechanism of VCB do not allow

commission or brokerage fee in buying and selling foreign currencies at high rate as

some other commercial joint stock banks, so many customers have moved the import

and export payments to other banks.

Moreover, the competition for customers and market share in the import-export

activities among commercial banks in Ha Noi is growing rapidly so it also had a huge

impact on the results of the import-export settlement activities at Hanoi branch.


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The total import and export turnover of VCB HN in 2010 was 392 million

USD, 3.13% decrease compared to 2009, completing 88% of the plan in 2010. The

export turnover was 176 million USD; increased by 3 million USD compared to the

previous year, import turnover was 216 million USD, decreased by 43 million USD

compared to 2009.

2.4. Baking and card service:

Good banking services will be one important factor contributing to the growth

of capital mobilization and increasing profits for banks. Results of some operations at

the branch in 2010 as follows:

Newly opened individual accounts in 2010 were 20.079 accounts. Up to

31/12/2010, the total number of personal active accounts at Hanoi branch is 111.218,

increased by 15% over the same period in 2009.

Total money transfer was 56.6 million VND, 7.36% increase compared to 2009,

completed 95.86% its target.

Money Gram payment service: Total Money Gram payment turnover in 2010

was nearly 616 thousand U.S. dollars, increased 4.5% over the same period in 2009.

Number of customers registered to use SMS Banking service reached 31,160

customers, 31% increase compared to 2009, completing 87.6% of the plan in 2010.

Number of customers using Internet banking services reached 22,908 customers,

increased by 43% compared to 2009, completing 95.3% of the plan in 2010.

Card payment activities:

Up to 31/12/2010, VCB HN outreached nearly its entire targets for card

issuance and payment turnover. In 2010, the number of Connect24 cards was 19.381

cards; increased 9.3% compared to 2009 and completed 129% the plan. The number of

International debit card was 6405 cards, increased by 32.5% compared to 2009 and

completed 160% its targets. The number of international credit card was 1351 cards;

increased by 34% compared to 2009 and finished 135% its targets in 2010.

International payment revenue in 2010 was 8 billion USD, increased by 23%

compared to 2009 and completed 115% its targets. Revenues from using international


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credit card were 94.6 billion VND, increased by 50.4% compared to 2009 and

completed 123% its plan. Revenues from using international debit card were 265

billion VND, increased by 14% compared to 2009 and completed 92.7% its plan.

Revenues from using local debit cards at POS were 3.5 billion VND, completed 51%

its plan in 2010.

With efforts of all staffs at Hanoi branch, the current number of card-accepting

units is 65 units, exceeds 10 units compared to the plan and raising the total number of

units to accept credit card of VCB HN to 170 units.

Auto salary payment service:

VCB HN implemented the project on “the development of non-cash payments”

according to the Decision 291/2006/QDD-TTg (29/12/2006) and salary payments

through accounts with all people who are paid by State Budget under the Decision

20/2007/CT-TTg (24/08/2007) of Prime Minister. By the end of 2010, VCB HN had

320 enterprises and organizations using salary payments through banking accounts

service at branch.

2.5. Foreign exchange dealings:

2010 was a difficult year for foreign exchange dealings due to fluctuations in

exchange rate, foreign currency market and prolonged shortage of currency supply.

Thus, total volume of foreign exchange dealings in 2010 was approximately 332.7

million USD, decreased by 47% compared to 2009. Among them, the volume of

buying in was 166.4 million USD, the volume of selling out was 166.3 million USD

and it equals only 52% of buying in and selling out volume in 2009.

In 2010, the foreign exchange market was very complicated. Even though on

17/08/2010, the State Bank of Vietnam increased the average interbank exchange rate

to apply a flexible exchange rate regime and help to reflect better the true supply and

demand in the market but the foreign currency supply and demand in the USD market

still remained complex. Exchange rates at the banks are always equal the ceiling rates

and the price of USD in free market is always higher than the ceiling price at the

banks. This shows that the transactions on the foreign exchange market have not really

reflected the market, and there are many pressures to adjust the price of Vietnamese

currency against the dollar.


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In that circumstance, VCB HN always had active policies in controlling the

exchange rate and attracting foreign currency to meet for the demand of customers in

import payments, paying debts... and still ensured profits for branch. Some strategies

that have been applied by VCB HN such as: agreed rate on USD mobilization,

preferential interest rate on loans for enterprise that committed to sell USD for VCB

HN...However, the foreign currency supply was still not enough for the demand of

partners of VCB HN in importing activities.

Although faced with many difficulties, the foreign exchange dealings activities

of VCB HN still followed the foreign exchange management regime of State Bank of

Vietnam and exchange rate controlling policy of Central VCB.

3. Evaluation of the financial performance of VCB HN in 2010:

3.1. Results:

Diagram 3.1 The development of Vietcombank Hanoi from 1985-2009


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Net operating income after provision up to 31/12/2010 was 133.8 billion VND,

increased more than three times compared to 2009, outreached its targets by 50% (the

planned profits were 89 billion VND)

Mobilizing capital in 2010 USD at the branch increased by 44% over the same

period in 2009. Total funds raised from the economies of all banks in Ha Noi City in

2010 reached 767,683 billion VND and the market share of capital mobilization

according to VND - USD – converted to VND to the end of 2010 of VCB HN with

more than 300 banks and other financial institutions in turn is 1.2% - 0.1 to 1.4%.

Overall, market share in raising capital of VCB HN in 2010 increased 0.05%

compared with that market share in 2009.

Outstanding loans all financial institutions in Hanoi to the end of 2010 reached

494,770 billion VND, went up by 31.27% over the same period in 2009. Of which,

total loans in VND was 338,980 billion USD, increased by 25.14% compared to that

of 2009; total loans in foreign currency reached 125,614 million USD, an increase of

46.75% over the previous year. As a result, the market share of outstanding loans for

VND - USD – converted to VND of VCB Hanoi in 2010, respectively, was 0.83% -

0.046% - 0.79%. Therefore, compared with late 2009, the market share of outstanding

loans decreased by 0.07% - 0.024% - 0.2%.

3.2. Advantages:

The development of the Vietnamese economy and society in 2010 went under a

positive direction; the economy recovered rapidly while the world economy was still

complicated; social security is guaranteed, the life of people was improved, political

and social stability continues as one of the big advantages for business operations of

the bank.

Domestic and international financial and monetary markets stability and

recovery increased so it created a great advantage for doing business, especially in

banking activities.

With the position as an official member of the World Trade Organization WTO

and the integration of Vietnamese economy to international economy, many

opportunities are open for banking area in general and for VCB Hanoi in particular.


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State Bank of Vietnam had a more flexible monetary policy, appropriate

mechanisms and sticks more to market signals as well as the general trends of the

international currency markets, that was most clearly reflected in series of documents

enacted by State Bank in 2010 to orient and control the business activities of credit

institutions in the economy.

Legal framework for banking activity has been relatively stable and

progressively more complete.

In 2010, despite of all difficulties in domestic and overseas economy and the

strong competitions of other commercial banks in the area, business operations at VCB

HN achieved relatively good results because of the best efforts and appropriate

strategy of the Board of director.

In fund mobilization, due to the fluctuation of interest rate on the market,

raising capital from individual customers was not stable and difficult; therefore VCB

HN focused on customers who are relatively successful enterprises.

Business operations of the branch have always received highly support from the

Central VCB and State Bank.

The board of director developed a safe and efficient operation for all banking

activities, made right decisions at the right time that helped to contribute the success of

branch.

The ATM system was cared to work properly and riskless. In addition, with

good customer services, VCB HN built a prolonged relationship with all kind of

customers.

3.3. Disadvantages:

In 2010, VCB HN had to deal with the general challenges and pressure of the

banking sector such as: profit targets, raising capital, make policies to follow the

Circular 13/2010 / TT.NHNN of State Bank, especially the need to increase capacity

for the system and enforce new standards on capital adequacy through make all efforts

to mobilize capital, ensure liquidity and safety credit growth.

Although the economy was out of crisis but the development was not stable and

solid. Consumer price index tended to rise, trade deficit remained high, market rates


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were complicated; people's life faced some difficulties due to the impact of natural

disasters, epidemics... Although the trade deficit has been curbed less than 20% of

total export and import, but the trade deficit in 2010 still remained 8 to over 12 billion

dollars causing huge pressure for the macro economy.

Foreign currency, especially U.S. dollars is insufficient to meet the demand for

import has affected directly to exchange rate management policies and CPI.

Therefore, the pressure on the exchange rate between VND and USD has not

decreased, foreign currency supply and demand balance continuously tensed in the last

months in 2010 and was a difficult problem for the banks in meeting the needs to pay

debts and import activities of enterprises.

To resolve the above difficulties, one of the solutions VCB HN could apply was

increasing the interest rates to attract foreign currency funds into banks, but the ceiling

rate for organization was only 1%, while the dollar deposit rates for individual clients

could not be pushed higher due to they are unable to lend at a higher rate to customers.

Meanwhile some other commercial banks still mobilized with interest rates up to 2-3%

per year leaded to difficulties in mobilizing foreign currency for VCB HN.

In 2010, there was still a race in interest rate between joint stock commercial

bank to earn market share and new customers and it had a large effect to the business

outcomes of VCB HN.

In 2010, there were no longer exist the “Interest rate subsidy program” and

enterprises had to borrow based on market rate so they were resistant to invest because

they scared of many risks like: interest rate and exchange rate fluctuation, economic

instability... that can lead to a huge loss.

Besides, the import-export settlement and foreign exchange dealings at the

branch in 2010 also had difficulties due to scarcity of foreign currency and the import

restriction policy of the State. The drawback in exchange rate and interest rate

management can influence the relationship between banks and customers. In the

foreign currency trading, due to the gap between banking and market exchange rate,

some enterprises did unreasonable transactions by themselves and made profits.

Another challenge is the current interest rate on capital mobilization goes against

the law of trade that is short-term interest rate is higher than long-term interest rate.


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This reflects the instability in the economy and makes it difficult for banks to mobilize

long term capital to meet the investment needs and it does not create the confidence

for citizens in the sustainable development of the economy.

4. Thesis proposal (Card issuance and payment problems):

4.1. General information:

Bank for Foreign Trade of Vietnam (Vietcombank) is the first one carrying out

card service in Vietnam. Thanks to its country-wide network of correspondents,

automatic card payment system in combination with automate information

management, payment activities via Vietcombank are processed quickly, precisely,

safely and efficiently. The Bank, therefore, always maintains its leading position in

international card payment market of Vietnam.

Vietcombank is an official member of the two globally prestigious card

organizations VISA/MasterCArd. We are a full agent of JCB international Card

Company as well as American Express in Vietnam.

Vietcombank is not only the largest agent of various international card in

Vietnam but also is the Bank who directly issues and settles cards. Vietcombank

Credit Card – VISA and Vietcombank-MasterCard provide customers with much

convenience in paying goods and services and in withdrawing cash within the country

and foreign countries as well.

Actually, over the past years, Vietcombank Credit Card is used widely since

this is a safe and modern payment instrument and especially it contributes to increase

individual prestige on transactions.

If you have VISA, MASTERCARD, JCB and AMERICAN EXPRESS cards, you can

pay for goods and services quickly and conveniently at nearly 2000 card payment

agents of Vietcombank as Hotels, Restaurants, tourist centers, shops, supermarkets,

booking offices...

Particularly for VISA, MASTERCARD and JCB cards, you are able to easily

withdraw in cash at offices of Vietcombank.

Conditions for participating card payment network of Vietcombank: all

individuals and agencies who supply goods and services in Vietnam can become Card

acceptance Agent for Vietcombank.

4.2. Issuance and payment of Vietcombank Credit Card


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Who should use Credit Card?

In order to avoid possible risk of bringing with a large amount of cash,

especially for those often go for business abroad or who have relatives and children

studying or having disease treatment in foreign countries, you are kindly advised to

use credit card. Using credit card, you can also easily manage expenditures of yourself

and your relatives.

Benefit and Convenience of using credit card

Credit card can be used to buy goods and services at more than 20 million

places and to withdraw cash at some 1 million cash payment places and from ATM in

Vietnam and other countries in the world as well.

Though International credit card is in VND, you still can use it for payment or

withdrawal in foreign currencies in foreign countries and refund to Vietcombank in

VND.

You are allowed to “expense first and pay later” during a non-interest favorable

time of 10-45 days. This means that you can improve fund utilization efficiency since

you can spend while your money is still deposited at the Bank for interest.

You only have to pay in advance 20% of the balance at the end of the period with

short-term interest rate for the unpaid balance. If you pay the whole balance, you are

exempt for interest of balance arose during the card period.

You are provided with customer services the whole day 24/24h.

In case you loose your card or forget password: you only have to inform the

Card Center or our branches all over the country in order for us to stop all transactions

on this card. If you forget your personal identification number (PIN), you can request

Vietcombank to re-provide you with your PIN (since we do not inform customer PIN

through telephone).

Cards

In order to facilitate customers, Vietcombank also issues maximum 2

supplementary cards to the main card owner.

Personal card: Person who names to issue the card is responsible to pay the Bank. The

main card owner can request the Bank to issue maximum 2 supplementary cards for

his relatives.

Personal card authorized by companies: A company applies to issue cards and

authorizes its staff to use it. The company is responsible to pay the Bank.


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Vietcombank issue VISA/Master Card on two limits: the Yellow Card with the limit

from VND 50 million to VND 90 million; the Silver Card with the limit from VND 10

million to VND 50 million.

Features

Vietcombank issues international VISA/Master Card with all features compliant

with international standards of VISA and Master Card Organizations.

Conditions for international credit card issuance

You are Vietnamese citizen or foreigner who is living and working legally in

Vietnam, more than 18 years old, not under court punishment or accused penal

offence.

If you are foreigner in Vietnam, you are required to have a certain working time

remained and to live in Vietnam for a period of card time plus 40 days.

The following conditions should be met:

+ Personal card authorized to use by a company: the company must be in good

financial situation, with no overdue loan to Vietcombank. It also has to meet all

regulations on loan guarantee.

+ Personal card: the holder must have a stable job and income, collateral,

deposit or be able to satisfy non-collateral borrowing conditions in accordance with

Vietcombank's regulation.

4.3. Some problems:

Like other banks, sales of VCB cards relatively largely depend on the flow of

tourists to Viet Nam. In recent years, as tourism decreased, the VCB card sales will

decline significantly. Moreover, the card market become more and more competitive,

it is very hard for VCB to maintain a unique position in the card market in Vietnam.

Although Central VCB has a long history in the business card, since it is the

only bank card payment agents for foreign banks to directly issue card, but with VCB

HN Branch, cards issuance and payment activity is a very new field. This activity was

initiated from September 8-2002. Therefore, the data on card distribution and payment

of VCB HN branch is very small.

5. Solutions and recommendations:

5.1. General solutions:


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Because of the complexity of the interest rate market, raising capital from

individual customers is not stable and difficult, so HN branch took the initiative to

focus on the enterprises that have a large source of temporary idle cash and have some

achievements in business activities. From June 2010, the branch has mobilized capital

from Yamaha Corporation with the average volume of money with average maturity

up to over 500 billion VND, and had the highest point up to more than 1,000 billion

VND. From June 2010, VCB HN also raised fund from KT company about 500 billion

VND, however, to June 11, due to competitive pressure on interest rates and VCB HN

had difficulties in responding to customers’ demand of foreign currency so this

company should had moved the capital to send at other banks.

Implementing the standards of customer service transactions to all staffs and

departments that work directly with customers; creating a professional image and

increase the competitiveness of the branch. +

Concern in the social development work and complete the changing location of

the transaction offices number 2 to the new place to 32 Quang Trung, while upgrading

and renovating the space transactions, uniform, standardized the transaction.

Regular customer care, make preferential transaction charges and interest

agreement mechanism for VIP customers, loyal customers, customers have a large

balance of trade.

Give rewards for timely staffs, departments that had done good work in raising

capital and deposits according to the volume of deposits in each month of the year.

Continue to improve the quality of services to create a good impression and attract

new customers, retain traditional customers. Specifically, pay attention to

improvement of professional skills, implement special care for special customers

policy, create friendly atmosphere, consulting the best suitable banking products based

on the interests and needs of customer, cross consulting ... Search more new customers

to be able to mobilize all sources of funds as well as the source of term deposits of

organizations.

5.2. Recommendations:

- With Central VCB:


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The CS & SPNHBL department of Central VCB should research and develop

new products in mobilizing capital to be more attractive and more feasible; at the same

time those products should have the superior features in compared to other products of

other banks and show specific characteristics of Vietcombank trademarks.

Building an accurate and timely information systems to forecasts all issues related to

the macroeconomic, monetary market trends, forecasts of exchange rate fluctuations,

interest rates ... so VCB will make the correct management decisions according to the

instability in the market.

Determine the competitive advantage of each position, each customer target, each

branch ... to build the appropriate development strategies, promoting strength in the

business of each branch and each area.

- With the Government and State Bank of Viet Nam

In 2010, even though the economy has recovered but it was still unstable and

had many potential risks. Therefore, governments should continue to have support

policies to create momentum for the business activities of enterprises. Especially, the

government and the central bank should have policies to boost exports through the

mechanism of interest rate support and reasonable exchange rates regulations in order

to encourage exports.

The government and the central bank need to quickly find a solution for

operating mechanism of interest rates and exchange rates in consistent with market

conditions. Since then, it provides the basis to re-establish the order in the relationship

between customers and banks based on equality and inherent rules. At the same time,

they should apply strict measures to control foreign currency in the economy promptly

to resolve the imbalance in supply and demand of foreign currency today.

Apply very serious punishment for the unfair competition in banking business, violate

the rule and the operating mechanism of the government and central bank, causing

instability in the money market and losing trust of citizens in the macroeconomic

policies of the Government.

Issuing documents and legal adjustments to the competitive activity in the

banking business is consistent with our economic context of deeper integration into

world economy.

The government and central bank quickly review and approval of capital

increase for VCB to accelerate the growth rate of capital adequacy of VCB, thereby

increasing the competitiveness for the bank.


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Documents

Internship Report