- Trang Chủ
- Thạc sĩ - Tiến sĩ - Cao học
- Doctor of philosophy thesis: State manamgement in diversification of credit activities of commercial banks in Ho Chi Minh city to the year of 2020
Xem mẫu
- CENTRAL INSTITUTE FOR ECONOMIC MANAGEMENT
HA VAN DUONG
STATE MANAMGEMENT IN DIVERSIFICATION OF CREDIT
ACTIVITIES OF COMMERCIAL BANKS IN HOCHIMINH CITY TO
THE YEAR OF 2020
Major : Economic Management
Code : 62 34 04 10
DOCTOR OF PHILOSOPHY THESIS
HANOI – 2013
- THE THESIS IS COMPLETED AT THE CENTRAL INSTITUTE FOR
ECONOMIC MANAGEMENT
Supervisor:
1. Nguyen Manh Hai (PhD)
2. Le Xuan Sang (PhD)
1ST critic: ………………………………………………
…………………………………………………………….
2nd critic ………………………………………………
…………………………………………………………..
3rd critic: ………………………………………………
……………………………………………………………..
(Name, science position)
The thesis will be defensed at the Evaluation Coucil at Central Institute
for Economic Management on ….. /dd/mm/yyyy
The thesis could be found at:
The library of Central Institute for Economic Management
The national library, Hanoi
- 1
FOREWORD
- 2
1. Motivation of the Study
Credit activity of the banks in general and of the join stock banks in the area
of Ho Chi Minh City (HCMC) in particular have an important contribution to
economic growth health and poverty alleviation through providing capital to the
economy, boosting investment, creating jobs and implementing social welfare.
With the important role of bank credit, the safety, health and efficiency of the
system of finance institutions (FIs) is an important factor for stability of the national
financial system and the macroeconomics. However, due to the impact of the
financial crisis spread around the world comes from the rapidly developed financial
markets with the new model, business activity, the variety of complex financial
products, involves greater risk; management framework and banking supervision as
well as cognitive and credit activity safety standards are not being upgraded make the
financial safety and stability level decreased.
In Vietnam, the credit activity gradually implemented within the framework
of ever-improving legal and international experience drawn from the crisis to apply in
accordance with the specific situation in Vietnam. The international standard for risk
management for each form of credit, credit limits, inspection, monitoring, ...
institutionalized and implemented. However, credit activity in Vietnam and in HCM
City also contains many risks because of developing large-scale credit. The
government and the State Bank of Vietnam (SBV) has a number of solutions
designed to manage stable credit activity and motivated to diversify credit activity in
the commercial banks in HCM City
However, the credit activity in Vietnam and Hochiminh city still containts
risks. Iin the process of implementing policies, some commercial banks still have not
made a compliance with regulations on credit and lending is the primary activity,
many commercial banks in the area have not yet diversify credit activity and risky.
The law is not uniform and synchronous; development orientation to diversify credit
activity not timely; regulatory activity are not appropriate to facilitate the
diversification of credit activity; inspection and supervision activity should be more
complete. These are the requirements for state management, which should be
completed soon and having state management solutions, creating a favorable
environment for commercial banks to diversify credit activity, contribute to limit
operational risks in credit activity of commercial banks and to better meet the needs
of capital for socio-economic development in the area.
- 3
On the basis of the above practices, there have been many international and
domestic studies related to state management in credit activity diversification.
However, the situation is incomplete research, unsystematic; none of the studies are
referring to the state management in diversification of credit activity of commercial
banks in HCMC. Starting from the essential requirements of having complete
solutions for the state management in credit activity diversification process of
commercial banks and related studies’s situation as stated above, the authors selected
the topic "State management in diversification of credit activities of commercial
banks in Ho Chi Minh City to the year of 2020" for the subject of the thesis research.
2. The situation of related studies
There are many valuable researches contributed to the development of credit
activity and state management of credit activity. However, studies have not specified
the content and evaluation criteria for state management in credit activity
diversification. In particular, due to the research focused on lending activity, there is
not any specific, comprehensive, deeper research of state management in
diversification of credit activity of commercial banks in the HCMC area, to be able to
apply scientific and effective in practice.
3. Objective of the Study
The main objectives of the studies are: (i) To systematize, deepening the
theoretical issues related to efficient state management of credit activity
diversification; (ii) To apprise the situation and the results of credit activity
diversification; to identify the causes, the weakness in the credit activity of the local
commercial banks, especially, to analyse the situation of state manangement in credit
activity diversification of the commercial banks and to identify factors affecting the
results of state manangement in diversification of credit activity of the commercial
banks in HCM City to the year 2020; and (iii) To recommend the solutions to
improve state management in diversification of credit activity of the commercial
banks in HCM City to the year 2020.
4. Object and scope of the Study
Subjects of the Study are the contents of state management in diversification
of credit activity of commercial banks in HCMC. The specific subjects include: (i)
theory and international experience of the state management in credit activity
diversification; (ii) state management practices in diversification of credit activity of
the commercial banks in HCM City.
5. Methodology of the Study
Methodology of the Study: The thesis analyzes credit actitivies, credit
diversification and state regulatory on credit diversification, the international
experiences of countries with similar conditions to Vietnam, the current situation of
state regulatory on credit diversification in Vietnam and HCMC to to make
recommendations to improve the state management in diversification of credit
activity of commercial banks in HCMC.
- 4
Thesis uses qualitative methods and research tools. It uses statistical methods,
survey and interview methods, expert method, comparative method, and analysis and
synthesis method.
6. New contributions of the thesis
First, the contribution of literature: The thesis has supplemented, completed
the theory and scientific foundation on credit diversification and state regulatory on
credit diversification. In particular, Ansoff matrix applied to the direction selection
and credit activity diversification choice. It also selected criteria for evaluating the
results of state management and identified factors that affect the results of state
management in credit activity diversification.
Second, applying international experience: Refer to the experience of Asian
countries with similar conditions to Vietnam and combines international experience
with the specific situation in Vietnam.
Third, assessing the result of credit diversification in the period of 2006-2012
based on the criteria of amount, growth rate and safety. In addition, assessing the
state management in diversification of credit activity in HCM City in the period
2006-2012 based on the criteria of the effectiveness, efficiency, relevance and
sustainability.
Fourth, based on the assessment of current situation, achievement,
shortcomings to propose solution to improve state management in diversification of
credit activity of commercial banks in HCM City to the year 2020, consists of the
solutions group about legal framework completion, the development orientation of
the State, the State's regulation, the inspection and supervision of the State.
Fifth, applying the results of research into practice: The groups of propose
solutions and recommendations can be successfully applied in practice, particularly
the legal framework related to each form of credit accordance with the Law on
Finance Institutions (2010). Therefore, implementation of the solution will positively
impact to the state management process of diversifying credit activity of banks in the
country in general and of the commercial banks in HCMC in particular.
7. Structure of the Study
Chapter 1: Literature overview of state management in diversification of
credit activity of commercial banks.
Chapter 2: The realitiy of state management in diversification of credit
activity of commercial banks in HCM City in the period of 2006-2012.
Chapter 3: Solutions to improve state management in diversification of credit
activity of commercial banks in HCM City to the year 2020.
CHAPTER 1
LITERATURE OVERVIEW OF STATE MANAGEMENT IN
DIVERSIFACTION OF CREDIT ACTIVITY OF COMMERCIAL BANKS
1.1 Diversification of credit activity of commercial banks
1.1.1 Definition of diversification of credit activity of commercial banks
- 5
There are many concepts of diversification related to different areas.
Applying and combining of concepts and purposes of credit activity diversification,
the authors of the thesis think that diversification of credit activity of commercial
banks means expanding forms of credit, such as loans, CCCN discount and other
valuable papers, bank guarantees, credit card issuance, factoring and other forms of
credit; and expanding the types and methods of each form of credit, in order to
develop advantages of each form of credit, to exploit the advantages of all kinds, each
method in the form of credit, to better meet the needs of the customers, increase
income and minimize credit risk of commercial banks.
1.1.2 The need to diversify the credit activity of commercial banks
Diversification of credit activity contributes to mitigate credit risk. At the
same time, it contributes to profit growth in a sustainable way.
1.1.3 Contents of the diversification of credit activity of commercial
Orientation and types of credit diversification: Develop new forms of credit;
develop new types and methods on each form of credit (see Figure 1.1)
Figure 1.1. Credit diversification
TYPES OF Term lending
LOAN
Currency lending
Customer oriented lending
Sectoral, industrial lending
LOAN
Lending for each loans
Lending as limits
METHODS Project lending
OF LOAN
Syndicate lending
Installment lending
FORMS Lending under the limit provision
OF Lending overdraft limit
CREDIT
METHODS
VALUATBLE
DOCUMENTS
OF Term purchasing
DISCOUNT
AND CCCN
DISCOUNT
Purchasing with recource
Loan guarantee
TYPES OF
GUARANTEE Payment guarantee
GUARANTEE
Bidding guarantee
Contract implementation guarantee
Product quality guarantee
Advance repayment guarantee
Other guarantees
CREDIT CARD
- 6
TYPES OF
CREDIT Domestic credit card
CARD
International credit card
TYPES OF Factoring with recourse
FACTORING
Factoring without recourse
FACTORING METHODS Factoring for each time
OF
FACTORING
Factoring for each limit
Co-factoring
- 7
Source: Author collected from other articles and legislation documents
1.1.4 Criteria for evaluating the results of the diversification of credit activity of
commercial banks
Based on the detailed direction of diversification and diversifying selection
shows the development requirements in terms of quantity, size, growth rate of forms
of credit, types and methods of credit and apply indicators of a CAMELS criteria, the
author provides evaluation criteria for the results of diversification of credit activity
of commercial banks include quantitative criteria, criteria of size, growth speed
criteria and safety criteria.
1.2 State manangement in diversification of credit activity of commercial banks
1.2.1 Some views on state management
1.2.1.1 The view of state intervention in the economy in general
All economic schools had given the role of the state in the market economy
and theoretical point of each school is different, and that the State can intervene in the
economy through the state management tools and create an enabling environment to
promote and ensure the market factor of stability, to maintain order and security in
society, aimed at stability and economic-social development.
1.2.1.2 The view of state management in the money market and credit activity
Based on the above views, the author take a position on the state management
in money market and credit activity as follows:
First, the State plays an important parte in promoting money market and
credit activity effectively, contributing to the economic and society development.
Second, the State facilitate an enabling environment for all aspects of the
money market and bank credit growth.
Third, the State intervene money market, bank credit in a required level in
accordance with the principles of the movement rule of the market economy.
1.2.2 Definition of state management in diversification of credit activity of
commercial banks
State management in diversification of credit activity of commercial banks
can be understood as the organizational, oriented and state powerful impact of the
state administration bodies by state management methods and tools to the
development process of credit forms, and the development of types and methods for
each form of commercial bank credit, to promote the diversification of credit activity
efficiently, create conditions conducive environment and ensure the diversification of
credit activity of commercial banks for sustainable development, supply credit to
various utilities, contributing to implement target of social-economic development.
1.2.3 State management goal of diversifying the credit activity of commercial banks
(i) To promote the diversification of credit activities grow fast, efficiency, safety
and sustainability; (ii) To develop at the right direction, prescribed by law for other
forms of credit, other types and method of credit; and (iii) To ensure fairness,
transparency and harmony of interests in the process of diversifying credit activity.
- 8
1.2.4 Contents of state management in diversification of credit activity of
commercial banks
State management in diversifying credit activity of commercial banks with
the functions: development planning, administration and control of the State on
various credit activity.
(i) The development strategy of the State in diversifying credit activity; (ii) To
promulgate legislation in diversification of credit activity; (iii) To regulate
diversification process of credit activity; and (iv) To inspect and supervise the
process of diversification of credit activity.
1.2.5 Relationship between State management on diversity and credit activity needs
to diversify credit activity of commercial banks
The relationship between state management in diversification of credit
activity and needs to diversify credit activity of commercial banks plays the decisive
role of state management to meet the needs of having an optimal structural
diversification of the credit activity of commercial banks.
1.2.6 Criteria for evaluating the results of state management in diversification of
credit activity of commercial banks
From the relationships between the objectives, functions and contents of state
management in diversification of credit activity and using the criteria to evaluate the
state management of the Asian Development Bank, the author synthesize criteria for
evaluating the results of state management in diversification of credit activity include:
validity criteria, effectiveness criteria, eligibility criteria, equality criteria and
sustainability criteria.
1.2.7 Factors affecting the results of state management in diversification of credit
activity of commercial banks
Objective factors: (i)The social- economic development, (ii) The finance market
development level; Subjective factors: (i) Orientation of social- economic
development; (ii) Formulation and implementation of banking and finance services
development schemes; (iii)Application of the method of state management in
diversification of credit activity; (iv) Selection tools of state management and support
of the State in diversifying credit activity; and (v) Compliance, observance of the law
of diversification of credit activity.
1.3 International experience in state management in diversification of credit
activity
All countries’ laws allow the commercial banks to implement various forms
of credit, CCCN and valuable papers discount, bank guarantees, credit card issuing
and factoring. The State orients, regulates, inspects, and monitors closely the process
of diversification of credit activity. At the same time, it provides diverse information,
support, orientation, and facilitates the process of diversification of credit activity of
commercial banks.
- 9
Lessons learned about state management to diversify credit activity: to build,
to improve legal framework fully and synchronously, to issue regulations that guiding
inplement credit forms synchronously and timely and in accordance with applicable
laws, to build credit growth plans to ensure feasibility, testing, inspection, monitoring
credit activity according to international standards and practices, to implement the
State support activity to promote the diversification process of credit activity.
CHAPTER 2
THE REALITY OF STATE MANAGEMENT IN DIVERSIFICATION
OF CREDIT ACTIVITY OF COMMERCIAL BANKS IN HCM CITY IN THE
PERIOD OF 2006-2012
2.1 The commercial banks in HCM City overview
2.1.1 Overview of the social-economic situation in HCM City
Ho Chi Minh City a center of economic, finance, trade and services in the
country, that have high rate of economic growth, diversification of economic activity.
HCM City leads the nation in the number of banks and finance/credit sales. However,
HCM City still faces many difficulties such as outdated infrastructure, overload, high
consumer price index .. also make difficult for the economy.
2.1.2 The process of formation and development of the number of
commercial banks
The number of commercial banks based in the province by the end of 2011
was 16, in 2012 was 14, which was established through new establishment, credit
cooperatives fusion and commercial banks mergence. Credit activity of commercial
banks over the years met a certain number of difficulties, particularly credit risk as
increasing NPLs. Therefore, continuing activity restructure and NPLs treatment,
besides diversifying credit activity of commercial banks is an urgent requirement in
the current period.
2.2 The reality of diversification of credit activity of commercial banks
in HCM City in the period of 2006-2012
2.2.1 The reality of diversification of credit forms.
For lending: Lending is the first, primary and traditional activity in the
process of diversification of credit activity that have the proportion over 92% -96% of
total credit outstanding during the period of 2006-2012 (see Table 2.1, Table 2.2).
Table 2.1. Credit activity of commercial banks in the HCM City in 2006-
2012 by forms
- 10
2006 2007 2008 2009 2010 2011 2012
Loans (tỷ đồng)
80.417,75 169.947,81 198.990,98 324.688,76 446.298,44 497.009,18 554.236,49
CCCN and other valuable papers discount
1.452,95 6.318,56 855,61 1.227,73 2.872,83 1.619,95 969,69
Bank guarantees
4.445,15 3.666,14 4.685,43 8.194,34 11.124,42 13.434,82 16.570,23
Credit cards
121,13 186,35 393,34 553,66 681,74 1.816,74 2.150,84
Factoring
115,14 295,77 365,08 548,62 607,85 630,06 664,21
Grand total
86.552,12 180.414,63 205.290,44 335.213,11 461.587,66 514.510,75 574.591,46
Loans proprotion
92,91% 94,20% 96,93% 96,86% 96,69% 96,60% 96,46%
CCCN and other valuable papers discount proprotion
1,68% 3,50% 0,42% 0,37% 0,62% 0,31% 0,16%
Bank guarantees proprotion
5,14% 2,03% 2,28% 2,44% 2,41% 2,61% 2,66%
Credit cards proprotion
0,14% 0,10% 0,19% 0,17% 0,15% 0,35% 0,35%
Factoring proprotion
0,13% 0,16% 0,18% 0,16% 0,13% 0,12% 0,11%
Grand total
- 11
100% 100% 100% 100% 100% 100% 100%
- 12
Source: Annual Report of the State Bank of Vietnam-Ho Chi Minh City Branch,
annual reports, financial reports of commercial banks and the author's calculations.
Loans accounted for high proportion so lending growth correspond to the
credit growth in the period of 2006-2012 (see Table 2.1, Table 2.2).
Table 2.2. Growth in each form of credit and funding of commercial banks
in HCM City in the period of 2006-2012
- 13
Forms 2006 2007 2008 2009 2010 2011 2012
Loans 111,33% 17,09% 63,17% 37,45% 11,36% 11,51%
CCCN and other 334,88% -86,46% 43,49% 134,00% -43,61% -40,14%
valuable papers
discount
Bank guarantees -17,52% 27,80% 74,89% 35,76% 20,77% 23,34%
53,85% 111,08 40,76% 23,13% 166,49% 18,39%
Credit cards %
Factoring 156,88% 23,43% 50,27% 11,23% 3,25% 5,42%
Credit growth 108,45% 13,79% 63,29% 37,70% 11,47% 11,68%
- 14
Funding growth 109,34% 24,59% 37,54% 12,32% 11,31% 16,22%
- 15
Source: Annual Report of the State Bank of Vietnam-Ho Chi Minh City Branch,
annual reports, financial reports of commercial banks and the author's calculations.
By the end of 2012, NPLs rose highly, especially, the proportion at risk of
losing capital debt accounted for over 30% of the bad debt is a high risk of the credit
activity for commercial banks (see Table 2.3). Loan growth in the recent years is
lower than the previous year, but the NPLs ratio rose sharply, increasing delinquency,
shows that loans’ quality is low, that increases risk in credit activity.
Table 2.3. NPLs of commercial banks in HCM City in the period of 2006-
2012
- 16
Debt ratio 2006 2007 2008 2009 2010 2011 2012
NPLs ratio 0,66% 0,49% 2,34% 1,39% 1,82% 1,98% 3,63%
Group 5 debt in total NPLs 39,64% 44,41 21,70% 56,20% 33,74% 30,50% 36,84%
ratio %
Source: Annual Report of the State Bank of Vietnam-Ho Chi Minh City Branch,
annual reports, financial reports of commercial banks and the author's calculations.
CCCN and other valuable papers discount activity: These activities have been
allowed by the SBV since 1991. However, the slow in implementation made discount
balances account for low proportion of total credit outstanding, as 1.68% in 2006,
3.50% in 2007, the years after remaining less than 1% (see Table 2.1) and the growth
rate of these activity fluctuated sharply in the period 2006-2012 (see Table 2.2).
Bank guarantee activity: The balance density has gradually increased from
2% to more than 2.6 % of total credit outstanding after falling in 2006 (see Table
2.1). However, the growth rate is more volatile (see Table 2.2), due to the impact of
the adjustment and additional of many rules for a long time, but still reveals many
disadvantages; it has not mentioned all the practical problems concerning the rights
and obligations of the parties involved in the guarantee contract that cause difficulties
and problems for commercial banks during deployment.
Issuance of credit cards activity: the legal framework had been issued since
1999, but in 2007 a new regulation was enacted, allowing commercial banks issuing
credit cards. High credit growth, especially in 2011 (see Table 2.2), as the SBV limit
consumer lending, many commercial banks turn to credit by issuing credit cards.
However, the debt ratio was still low (see Table 2.1).
Factoring activity: the proportion of factoring is too low, less than 0.2 % of
total credit outstanding (see Table 2.1). Because this activity is new, the SBV has just
issued regulations in 2004 (added in 2008), but the lack of synchronization between
the laws of finance institutions and regulations to ensure the effective implementation
of commercial banks.
2.2.1 The reality of diversification of types and methods in each form of
credit
Diversification of loan types and methods
Diversification of loan terms: Short term loans always account for over 57%
of total loan outstanding and tend to decrease due to the SBV's regulation of limit
consumer lending, not recommended areas lending. Medium-term and long-term
loans tend to increase up to over 40% of total loan outstanding (see Table 2.4 and
Figure 2.1), because commercial banks lend to investment projects under the program
of economic restructuring, investment stimulus in HCM city.
Chart 2.1. Proportion of loans of commercial banks by type in HCM City in
the period of 2006-2012
- 17
70,00% 68,64%
63,68% 63,75%
60,00% 58,55% 58,49% 59,50%
57,02%
50,00%
40,00%
Ngắn hạn
Trung h ạn
30,00% Dài hạn
24,97% 26,09%
23,61% 24,38%
21,02% 21,27% 20,52%
20,00% 17,84%
15,73% 16,55% 16,12% 16,90%
15,05%
10,34%
10,00%
0,00%
Năm Năm Năm Năm Năm Năm Năm
2006 2007 2008 2009 2010 2011 2012
Source: Annual Report of the State Bank of Vietnam-Ho Chi Minh City
Branch, annual reports, financial reports of commercial banks and the author's
calculations
Diversification of loan by economic sectors: Trade and service sector loans
account for over 57%, followed by loans for industry - construction accounting for
over 20% of the outstanding loans (see Table 2.5). The proportion of loans in
accordance with the industry's economic structure in the area.
Table 2.4 Loans by sectors of commercial banks in HCM City in the period of
2006-2012
- 18
Loans 2006 2007 2008 2009 2010 2011 2012
Trade - Service 64,72% 61,57% 59,63% 58,67% 59,95% 57,93% 59,17%
Industry - Construction 23,55% 22,54% 20,69% 23,76% 23,80% 24,97% 28,11%
Argiculture 2,81% 2,44% 5,73% 2,74% 3,95% 4,96% 4,84%
Other industries 8,92% 13,46% 13,94% 14,82% 12,31% 12,13% 7,87%
nguon tai.lieu . vn
