PREFACE
Reasons to choose the topic
In the context of Vietnam's national industrialization and modernization, mobilizing additional funds is essential for economic development and improving living standards Domestic funds, particularly capital raised by banks, play a crucial role in this process Capital mobilization is a key task for commercial banks, as it is vital for maintaining competitiveness and enhancing market position Consequently, efficient capital raising has become an urgent priority for the banking system at all times.
Belonging to the Vietnamese commercial banking system, Vietnam, Southeast Asia
Commercial Joint Stock Bank – Dai An plays a vital role in national development, yet its capital-raising achievements remain modest Given the current economic recession and various challenges, SeABank Dai An must intensify its efforts to enhance capital mobilization in the coming year Without a robust strategy for raising capital, the branch may struggle to maintain its market position and sustain growth.
Commercial Joint Stock Bank - Dai An branch, I am very concerned about the issue of capital mobilization Therefore, I chose the theme: "FUNDS MOBILIZATION IN
SOUTHEAST ASIA JOINT STOCK BANK – DAI AN BRANCH AN FROM 2012
The purpose of study
Researching for the efficiency of raising capital in commercial banks
Analyzing and assessing the reality in fund mobilization of SeABank Dai An
Proposing solutions to improve the efficiency of capital mobilization in Southeast
Asia Commercial Joint Stock Bank.
The scope of study
The object of research is the effectiveness of mobilizing capital in SeABank Dai
The scope of study: o Space: This study was conducted at SeABank Dai An, in PVI Tower Building
(168 Tran Thai Tong, Dich Vong, Cau Giay District, Hanoi) o Time: Subject is presented based on the data collected through 3years in 2012,
Research methods
Theoretical research methods: The methodology of dialectical materialism and historical materialism
Practical research methodology: Interviewing officials and bank staffs on the effectiveness of the bank raising capital and then summarizing and evaluating comments
Besides, I analyze business result report, the situation of the bank's funding and use statistical methods, comparison between years to evaluate and draw conclusions.
Study’s structure
The content of this thesis includes three main parts:
Chapter II: Rationale for fund mobilization of commercial bank
Chapter III: Current reality of capital mobilization in Southeast Asia Joint stock Bank
Chapter IV: Measures and recommendations to improve the efficiency of capital mobilization in Southeast Asia Joint Stock bank – Dai An branch.
RATIONALE FOR FUND MOBILIZATION OF COMMERCIAL
Commercial bank
The banking systems in many countries, including Vietnam, operate on a two-level model The central bank serves as the primary authority for state management in monetary affairs, functioning as both the issuing bank and the government's bank In contrast, commercial banks focus on executing various monetary business functions.
Each different country forms a different concept of commercial banks In Vietnam, the
The Bank Ordinance, issued on May 23, 1990, defines a commercial bank as an organization engaged in currency trading that regularly accepts customer deposits with a commitment to reimbursement These deposits are then utilized for lending, discount operations, and facilitating payment transactions Additionally, Article 20 of the 2014 Additional CIs Law outlines the establishment of Commercial Institutions (CIs) under specific provisions.
Banking operations are governed by specific laws and regulations that ensure the proper implementation of financial activities These operations primarily involve monetary transactions, including the acceptance of deposits, the provision of credit, and the delivery of payment services.
1.2 Main operations of commercial banks
Commercial banks focus on maximizing profits by consistently evolving their business operations While each bank has unique characteristics and objectives, they primarily engage in three key activities: fund mobilization, capital utilization, and various intermediary services These interconnected operations not only enhance the bank's reputation but also strengthen its competitive position in the market.
Fund mobilization is the primary function of a commercial bank, serving as the cornerstone for all subsequent operations Banks can attract capital from individuals and businesses through various deposit types, including term deposits, demand deposits, and savings deposits Additionally, they can raise funds by issuing certificates of deposits, bank bonds, or borrowing from the State Bank and other financial institutions.
Banks can draw in funds based on their equity, which plays a crucial role in addressing business challenges The State Bank regulations outline the specific percentage of fund mobilization that can be achieved through equity.
Vietnamese commercial banks are not allowed to mobilize in excess of 20 times of equity capital
Capital use involves deploying funds for diverse objectives to ensure the safety of banks while generating profit This process is categorized into several sub-operations.
Treasury operations: This operation reflects that banks' capital is used for the purpose of ensuring safety capability for current solvency and sudden solvency
Moreover, it is also banks‟ implementation under the provision of compulsory reserve set by the central bank
Making loans: It is the most important activity of commercial banks Commercial banks borrow to lend Profit from lending activity usually accounts for 60 – 70% of total commercial bank profit
Banks leverage funds collected from the public and economic institutions to invest in the social economy through various means, including partner capital, capital contributions, and stock trading These investments enable banks to generate direct profits.
There are many other banks‟ operations
Payment services and money transfers act as the backbone of the economy, ensuring that transactions are completed swiftly and accurately This efficiency allows economic organizations to focus on their core activities without the burden of managing post-transaction processes, as banks facilitate prompt payment for goods and services.
Brokerage consulting services: Banks are considered as intermediaries in securities because they make investment advice for customers to buy or sell securities of real estate
Other services: Banks manage the assets of households such as gold, money, security They also perform intermediary trading services in the Forex Market
Through these operations, banks receive income in the form of commission
It can be said that the bank's operations have a close relationship with each other
Capital mobilization is crucial for determining the scale of banking activities, as lending operations directly impact a bank's business functions and rely on mobilized capital The development of intermediary operations not only attracts more customers but also enhances deposit mobilization and lending capabilities Each banking service serves as a prerequisite for maintaining and expanding other operations, creating a synergistic effect within the financial institution.
Commercial Bank’s Fund mobilization
Capital mobilization is operation that receiving funds from organizations and individuals in many different forms in order to form the source of capital for the bank's activities
Mobilizing funds according to their terms is crucial for banks, as it directly impacts both the safety and profitability of their operations, as well as the timeline for customer refunds This type of fund mobilization can be categorized into different forms.
Short-term capital mobilization is a primary strategy employed by commercial banks, which involves raising funds through short-term debt instruments in the money market and attracting short-term deposits This capital is predominantly utilized for issuing short-term loans or converting funds to support medium-term loans Although short-term mobilization typically offers lower interest rates, it is characterized by a lack of stability.
Mid-term capital mobilization involves raising funds by issuing medium and long-term debt instruments in capital markets or accepting medium-term deposits ranging from 1 to 5 years This approach allows banks to utilize the capital effectively and over an extended period, providing flexibility in their financial operations.
However, interest rates of this capital are usually higher than those of short-term capital
Medium-term fund is crucial for banks to conduct investment activity, change in technology and make medium or long term loan with high lending interest rate
Long-term capital mobilization refers to banks' activities in the capital market aimed at securing stable funding for five years or more This approach allows banks to access capital with high stability, resulting in elevated interest rates offered to attract investors.
Mobilizing capital from residents presents a significant opportunity for banks, as they can gather idle public funds and allocate them to individuals or businesses seeking capital for investment and growth This process typically results in a stable source of funding for both the banks and the borrowers.
Raising capital from enterprises and social organizations constitutes a significant portion of total capital, with businesses typically maintaining bank accounts to streamline payments These enterprises deposit profits and withdraw funds as needed, although their withdrawal cycles vary Consequently, banks often have substantial liquidity available for optimal utilization The extent of this available capital is influenced by the quality of services and utilities that banks offer their clients, highlighting the connection between capital raising and the enhancement of banking services.
Mobilizing capital among banks and credit institutions is essential for facilitating payment transactions and addressing reserve deficiencies Banks often engage in mutual borrowing, which, although infrequent, is crucial for their operational stability This borrowing occurs through credit agreements and can take place in both local and foreign currency markets The central bank plays a vital role as the last resort lender, providing support to commercial banks facing solvency issues While raising capital from these institutions is relatively straightforward, it comes with high costs, leading banks to limit its regular use.
2.2.3 According to the nature of mobilization form
This form of classification is currently used by commercial banks mostly
Classification by nature of capital mobilization obviously creates convenience for banks when conducting mobilization The mobilization forms include some following types
According to deposits taking operation
Mobilizing demand deposits is crucial in developed countries, where non-cash payments are prevalent These deposits primarily serve as a means for customers—ranging from economic organizations to individuals—to facilitate constant payments for goods and services rather than generating profit Depositors enjoy the flexibility of withdrawing funds at any time, whether in cash or via cheque, and can conveniently access their money through automated teller machines without the need to visit a bank branch directly.
(ATM) Because the aim of sending money is primarily for the use of banking services, the level of interest rate returned to the depositors is very low, even zero
Mobilizing term deposits refers to the funds deposited by individuals and economic organizations in banks for a fixed duration, typically associated with stable operating cycles and predictable payment times Due to their lower volatility, banks can utilize these deposits effectively, resulting in higher interest rates for depositors Consequently, fluctuations in interest rates significantly influence the mobilization of these funds In Vietnam, term deposits, often issued as deposit certificates with durations of 3 months, 6 months, 1 year, and 2 years, are increasingly popular and play a crucial role in capital generation for banks.
Mobilizing saving deposits: This is the most common and oldest type of fund mobilization o Non-term saving deposits: These deposits are rather the same as term deposits
In Vietnam, term saving deposits are the most popular savings option, allowing depositors to access their funds after specific periods, such as 3 or 6 months These deposits tend to be more stable and less volatile compared to term deposits, prompting banks to offer higher interest rates to attract savers.
In Vietnam, banks typically require customers to maintain their long-term savings deposits until the due date to avoid penalties These stable funds enable banks to offer competitive interest rates; however, to attract more capital, many banks have become flexible, allowing early withdrawals with interest adjustments based on the actual number of days the funds were held While long-term savings deposits are common in developed countries, they remain relatively new in Vietnam, offering customers the flexibility to deposit at any time but restricting withdrawals until the maturity date, thereby providing banks with stable funding for medium to long-term investments.
According to non-deposits taking operation
In today's volatile business environment, commercial banks have several borrowing options to manage capital shortages They often turn to credit institutions for conventional loans, borrowing from one another in the interbank or currency markets Building strong relationships with other banks facilitates this process, allowing them to access funds more easily than relying on the central bank However, when banks face significant reserve shortages or payment challenges, they may resort to borrowing from the central bank as a last resort This borrowing typically occurs through the rediscounting of commercial papers, which the central bank accepts as collateral Nonetheless, access to these loans can be restricted, as the central bank imposes limits based on national fiscal policies.
Capital raising through notes and bonds is an efficient strategy for banks, particularly when they identify lucrative business opportunities During specific periods, banks may recognize the necessity to secure additional capital, prompting them to issue more financial instruments in the market.
A bank bond is a financial instrument that certifies a borrower's obligation to repay a specified amount of money to the bank on a predetermined date, typically over a medium to long-term period These bonds are issued across the banking system primarily to facilitate capital raising efforts.
Bank notes are short-term debt instruments issued by banks to generate funds from the public, primarily aimed at supporting specific business plans or economic programs.
REALITY OF FUND MOBIICATION IN SOUTHEAST ASIA
Overview of Southeast Asia Joint Stock Bank – Dai An branch
1.1 Overview of Southeast Asia Joint Stock Bank
Southeast Asia Joint Stock Bank (SeABank) was established under Operating License
No 0051/NH-GP issued by The State Bank of Vietnam on 25/03/1994 It is one of the earliest joint stock commercial banks in Vietnam After 21 years of development,
SeABank is currently in the Top 10 commercial banks in Vietnam with great achievements SeABank has affirmed its position by its own intrinsic value and efficiency
Name: Southeast Asia Joint Stock Commercial Bank
Head office: 25 Tran Hung Đao, Hoan Kiem, Ha Noi
Website: www.seabank.com.vn
Email: contact@seabank.com.vn
Currently, SeABank has charter capital of VND 5,335 billion, which leads to the fact that it is one of 7 commercial banks having the largest charter capital of Vietnam
Moreover, in 2014, its total asset and transaction divisions was over 80 thousand billion
VND and 154 respectively These figures demonstrate the bank„s strong growth and expansion Additionally, besides cooperating with domestic major partners such as
MobiFone, PVGas, SeABank has also worked with foreign strategic partner - Société
Générale which is the top retail bank in France and Europe SeABank is awarded many honorable titles such as ASEAN business award or certificate of merit from Prime
1.2 Overview of Southeast Asia Joint Stock Bank – Dai An branch
The branch was originally SeABank – Dich Vong Branch (SeABank Dich Vong) which was established in 2010 In 2013, SeABank Dich Vong was renamed to SeaBank –
Dai An branch (SeABank Dai An) In 2014, it had new office at PVI tower (168 Tran
SeABank has established a presence in Thai Tong, Dich Vong, Cau Giay, Ha Noi, to effectively introduce its products and services to local residents and businesses Notably, it caters to the financial needs of PVI Holdings, a key partner, demonstrating its commitment to meeting regional demands through innovation and dedicated efforts.
Dai An has been successful
Address: PVI Tower 168 Tran Thai Tong, Dich Vong, Cau Giay, Ha Noi Điện thoại: 04 62690696/89
1.2.2 Functions, tasks and operational characteristics of SeABank Dai An
SeABank Dai An carries out banking businesses There are several main operations at
Mobilizing short-term, medium and long term funds in the form of term deposits and demand deposits
Lending short-term, medium and long term
Providing payment services and treasury
Other banking services under the Credit Institutions Act
The branch is responsible for ensuring safe, healthy, and efficient operations while safeguarding customer rights and interests It plays a vital role in supporting national monetary policy and fostering the development of the commodity economy, adhering to state regulations and socialist principles.
The organizational structure of SeABank Dai An is represented by the following chart
The Branch Manager oversees all banking operations and management activities at SeABank Dai An, ensuring effective coordination among various departments.
Department of personal customers: Implementing fund mobilization and other related business lending which are in line with the current regime and applicable to individual customers
Department of business customers: Implementing fund mobilization and other related business lending which are in line with the current regime and applicable to business customers
Department of VIP customers: Implementing fund mobilization and other related business lending which are in line with the current regime and applicable to priority customers and strategy customers
Department of administration and operational support: Supporting other departments in the branch, namely technical support, operational support, credit support and HR administrations
Chart 1: Organizational structure of SeABank Dai An
Source: Management operation office of SeABank Dai An
Department of administrati on and operational support
1.2.4 Business result of SeABank Dai An from 2012 to 2014
In recent years, although the business environment has been challenging, SeABank
SeABank Dai An has demonstrated significant progress and consistent results in both professional and special union activities, establishing itself as one of the two exemplary branches of SeABank The branch operates under a new model, featuring a well-organized indoor-outdoor furniture layout, staff, organizational structure, and procedures that align with international standards and a retail banking focus It maintains an online connection to the head office and all banking units within the system, ensuring continuous evolution and improvement in service quality Furthermore, the branch has enhanced the effectiveness of its executive management and organizational structure, committing to deliver top-notch products, services, savings programs, and promotions to its customers These efforts have led to remarkable achievements, as illustrated in the accompanying chart.
Chart 2: Business result of SeABank Dai An from 2012 to 2014
Source: Financial statement of SeABank Dai An
Operating RevenueOperating costProfit from business activitiesThe cost of credit riskProfit before taxProfit after tax
In 2012, SeABank Dai An reported an operating revenue of 108.34 billion dong, which increased to 117.67 billion dong in 2013 However, in 2014, revenue fell to 100.08 billion dong Additionally, the cost of credit risk rose from 21.63 billion dong in 2012 to 27.43 billion dong in 2013, indicating an increase of 5.80 billion dong in credit risk costs.
This fact was rather reasonable Because of difficult economy as well as credit devaluation in 2013, banks, including SeABank Dai An need to increase credit cost
In 2014, the cost of credit risk increased to 29,500 million dong, while profit after tax rose from 35,024.18 to 35,984.28 million dong within the first two years, demonstrating the branch's commitment to profitability despite the rising costs associated with credit risk.
In 2014, the branch experienced a significant profit decline to 24.088,65 million dong, primarily due to a sharp rise in credit risk costs and a decrease in operating revenue.
1.2.5 Evaluating some financial indicators of SeABank Dai An
Chart 3: Liabilities, total asset and equity of SeABank Dai An from 2012 to 2014
Source: Financial statement of SeABank Dai An
From the above chart, it can be seen that liabilities went up stably from
Between 2012 and 2014, the value fluctuated from 1,459,340.83 million dong to 1,613,423.50 million dong, while total assets saw only a modest increase from 1,751,209 million dong to 1,799,218.77 million dong during the initial two years, before declining to 1,720,618 million dong in 2014.
On the contrary, equity changed in the opposite trend It fell gradually from 2012 to
In 2014, SeABank Dai An experienced a decline in total assets and equity, with liabilities increasing significantly, leading to heightened financial risk The total assets dropped from 291.86 million dong in 2012 to 257.03 million dong in 2013, and further decreased to 172.06 million dong in 2014 This negative trend in financial indicators may deter potential investors, highlighting the urgent need for effective measures to enhance the bank's financial stability and attract investment.
Basing on the above data, some financial indicators was calculated and presented in the below table
(Profit after tax/total assets) 0,020 0,020 0,014
SeABank Dai An exhibited a high debt ratio exceeding 0.80, indicating significant financial risk Conversely, its solvency ratio surpassed 1, demonstrating a secure solvency level Nonetheless, if the branch were to settle all its debts simultaneously, the financial stability could be challenged.
Source: Financial statement of SeABank Dai An
Table 1: Financial indicators of SeABank Dai An from 2012 to 2014
Unit: times time, it would have gone bankrupt ROA in 2012 and 2013 was the same, at 0,020
Then, it went down to 0.014 in 2014 ROE in 2012 was 0.12, It increased slightly to
0,14 in 2013 and remained at that figure in 2014 It can be concluded that ROA and
SeABank Dai An has demonstrated a relatively low Return on Equity (ROE), indicating a need for improved efficiency in the utilization of its assets and equity Enhancing these aspects is essential for the branch's overall performance and financial health.
An should make detailed plan to adjust these indicators reasonably to attract more investors.
Reality in fund mobilization of SeABank Dai An
2.1 The scale and growth speed of capital
According to the formula mentioned in chapter 2, the size of capital is shown in the below chart
From 2012 to 2014, SeABank Dai An experienced a modest increase in total fund mobilization In 2012, the amount was 1,420,974.76 million VND, which rose to 1,510,171.67 million VND in 2013, indicating a positive trend that continued into 2014.
The completion rate of plan (%)
Chart 4: Fund mobilized in plan and reality of SeABank Dai An from 2012 to 2014 Unit: million dong
SeABank Dai An has demonstrated remarkable success in raising funds, showcasing their commitment and efforts in achieving significant growth in their financial resources.
The completion rate of the plan at SeABank Dai An consistently fell below 100% throughout the research period, as illustrated by the chart.
82,61%, 74,39% and 75,49% in 2012, 2013 and 2014 respectively As a result, the average rate was over 70%
Between 2012 and 2014, SeABank Dai An had tried to expand its capital by diversifying the forms, measures and channels to mobilize capital from all economic sectors
Despite the challenges posed by market influences and high planning goals, SeABank did not achieve its capital-raising targets However, SeABank Dai An maintained stable fund growth amidst a volatile economy, achieving a commendable completion rate of its plan, which stands out as a significant accomplishment for the branch To address the bank's capital demands, the branch must intensify its efforts moving forward.
SeABank Dai An boasts a diverse capital structure, which can be effectively analyzed through four key criteria: entity, deposit type, monetary type, and term length.
2.2.1 Capital structure according to entity
There are three main kind of mobilizing fund according to entity: deposits from companies, deposits from residents and other deposits The amount of these deposits in
SeABank Dai An between 2012 and 2014 is shown on following bar chart
During the research period, deposits from residents consistently dominated fund mobilization, accounting for 45% in 2014, compared to significantly lower figures for other deposits, which were only 12%, 11%, and 6% in 2012, 2013, and 2014, respectively.
From 2012 to 2014, corporate deposits experienced significant growth, starting at 611.019 million VND in 2012 This amount increased by over 8.000 million VND to reach 619.170 million VND in 2013 By 2014, corporate deposits surged to 713.335 million VND, highlighting a positive trend in the financial contributions from companies during this period.
VND in the amount of deposits from corporates These data represent the fact that
SeABank has effectively attracted major corporations, largely due to its dedicated efforts in identifying potential partners In recent years, both SeABank and SeABank Dai An have established collaborations with prominent companies like PVI, Pvgas, and Mobile Phone, resulting in a significant influx of capital for the bank.
For deposits from residents, it always was the highest figure in the chart The amount of these deposits was 639.439 million VND in 2012 There were jumps to 724.882 and
Deposits from corporates Deposits from residents Other deposits
Chart 5: Fund structure according to entity of SeABank Dai An from 2012 to 2014
Source: Financial statement of SeABank Dai An
In 2013 and 2014, SeABank Dai An achieved remarkable stability with deposits totaling 776.742 million VND, despite challenging economic conditions The State Bank of Vietnam's policy to lower mobilizing and lending interest rates aimed to support corporations, which led to a decrease in depositors across commercial banks However, SeABank experienced an increase of over 52 billion VND in resident deposits in 2014, highlighting its effective operations during this period The bank focused on enhancing service quality, diversifying its product offerings, and launching promotional programs to attract more customers.
In 2012, the total amount of other deposits reached 170.517 million VND, but saw a slight decline to 166.119 million VND in 2013, and experienced a significant drop by half in 2014, marking the lowest percentage in the chart To enhance its reputation and build customer trust, SeABank Dai An must focus on continuously improving service quality and product offerings, which will facilitate easier fund mobilization from various entities in the community.
2.2.2 Capital structure according to the type of deposits
According to this criterion, fund mobilization is divided into three groups: saving deposits, demand deposits and term deposits from economic entities The data of
SeABank Dai An is represented in the below bar chart
Between 2012 and 2014, term deposits consistently represented the highest proportion of total deposits, while demand deposits remained the lowest throughout the entire period.
In 2012, term deposits reached a peak of 426.29 million VND, constituting 30% of total fund mobilization In comparison, demand deposits amounted to 412.08 million VND, representing 29% of the total, while savings deposits matched the term deposits at 426.29 million VND.
In 2013, SeABank Dai An experienced significant growth in savings and term deposits, reaching 528.56 million VND and 785.29 million VND, respectively, representing increases of 23.99% and 34.79% However, demand deposits saw a notable decline, comprising only 13% of the total funds, attributed to a shift towards card payments over cash transactions This trend indicates a strong demand for deposit services among economic entities at SeABank Dai An.
Although the Government helped corporates by reducing lending interest rate, firms still deposit money into the bank to make it safe
In 2014, the amount of savings deposits stood at 602.372,66, which grew by 12.55% compared to 2013 Thus, the amount of saving deposits rose stably from 2012 to 2014
Term deposits from economic entities Demand deposits Saving deposits
Chart 6: Fund structure according to type of deposits of SeABank Dai An from 2012 to 2014
Source: Financial statement of SeABank Dai An
This means that SeABank Dai An built its prestige in the market, so attract a huge amount of saving deposits Moreover, the sum of demand deposits increased slightly to
In Vietnam, term deposits from economic entities decreased to 745.038,64 million VND, indicating a significant withdrawal of funds from banks as these entities seek alternative investment opportunities.
2.2.3 Capital structure according to type of money
SeABank Dai An is diversifying its fund by raising capital in both VND and foreign currencies such as USD and EURO To ensure accurate financial analysis, foreign currencies are converted into VND at a suitable exchange rate, as demonstrated in the accompanying chart.
Achievements – Limitations – Reasons
After nearly four-year operation, SeABank Dai An is one of the branches of the
SeABank has demonstrated strong business performance, particularly in capital mobilization over recent years Despite fluctuations in interest rates and competition from other banks, the total inflow of capital has steadily increased SeABank Dai An has also achieved notable successes during this period.
SeABank Dai An successfully achieved significant capital-raising targets, with 2012 figures reaching 1,420,975 million dong, which is 82.61% of the goal In 2013, the bank mobilized 1,510,172 million dong, achieving 74.39% of its target, while in 2014, it raised 1,585,189 million dong, accounting for 75.49% of the planned amount.
Secondly, the branch resolved bad debt and simultaneously strengthened lending operation
Chart 12: Profit margin from raising capital of SeABank Dai An from 2012 to 2014
Source: Financial statement of SeABank Dai An
The capital structure has stabilized, with a notable increase in deposits from businesses and residents, alongside rising income from services This shift reflects the branch's enhanced reputation for quality services and professionalism in catering to both individual and enterprise clients Despite a decrease in capital-raising costs, the overall funding amount has risen significantly.
From 2012 to 2014, the branch experienced significant success, as the capital not only met the financial needs of Dai An SeABank but also facilitated the overall demand within SeABank.
Finally, the fund mobilization activity was always profitable, shown by the fact that the difference between income and the cost of capital raising capital was always positive
The cost of raising capital has decreased, while revenue from these operations has increased, leading to improved margins and higher profits for the branch This positive gap between revenue and expenditure highlights the effectiveness of capital mobilization at SeABank Dai An.
There are several reasons leading to those above achievements
SeABank has enhanced its network efficiency by opening a new office at PVI Tower, bringing its brand, products, and services closer to local communities and businesses This strategic move specifically addresses the financial needs of PVI, reinforcing SeABank's commitment to regional development.
Holdings which had comprehensive cooperative partnership with SeABank with the slogan "Bring outstanding services for our customers "
Managers and professional division of SeABank had a good prediction of the volatility of capital Therefore, the planned target was set off close to the situation
Moreover, the policy for interest rates on loans was timely, which caused satisfactory results Currently, SeABank Dai An is one of the subsidiary organizations under a model
The furniture, staff, organizational structure, and operating procedures have been established in compliance with international regulations, aligning with a retail banking model that is seamlessly connected online to headquarters and all branches This setup enables the deployment of a comprehensive range of products and services for individuals and businesses, alongside savings mobilization programs and various promotions Departments work in coordination to ensure prompt and efficient customer service Over the years, Vietnam's economy, particularly in Hanoi, has experienced significant growth, resulting in increased income levels and improved living standards, which in turn has led residents to accumulate more savings.
Furthermore, because the branch is located in a favorable place, it has found easy to attract deposits from the public and businesses in the region
SeABank Dai An is committed to technological innovation and enhancing customer privacy The branch has introduced various non-cash payment options and expanded its ATM network, leading to a steady increase in the number of transaction accounts.
SeABank Dai An prioritizes customer care by offering a diverse range of financial products and services, including flexible principal withdrawal savings, interest payments at maturity, prepaid-interest savings, and floating rate savings The branch upholds a competitive and adaptable interest rate policy In 2013, the bank launched incentive programs to express gratitude towards clients who have trusted and utilized its services.
SeABank appreciates customer trust and enhances their banking experience by offering innovative programs designed to boost savings and accessibility to various products Customers receiving monthly payments through their bank accounts can benefit from initiatives such as "Increase in the Balance of Demand Deposit in Account" and "SeAPay for Retirement," aimed at maximizing utility and financial growth.
SeABank Dai An has introduced innovative services to enhance customer convenience, including electronic money transfers, internet banking, phone banking, home banking, mobile payment options, and financial investment advisory services, all of which have garnered significant customer interest.
Over time, the capital structure has evolved towards greater stability, with a rise in short-term funding that enables the Bank to effectively address the economy's immediate capital requirements This trend underscores the growing reputation of the branch within the region.
Dai An SeABank faced challenges in fundraising, with amounts raised significantly lower than those of other commercial banks, despite its favorable geographic location and partnerships with major corporations like MobiFone and PVGas The bank often struggled to meet its annual plans, hindered by a large market size and fluctuating market conditions Additionally, its fund mobilization efforts were constrained by global market influences and state regulations aimed at reducing interest rates to alleviate business difficulties Although mobilized capital increased annually, the growth rate remained sluggish.
Secondly, mobilizing capital structure is irrational in both term and type of currency
The majority of the capital mobilized was short-term, with medium and long-term funds representing only a small share Additionally, foreign currency mobilization constituted a minor portion of the total funds, complicating business operations for the branch.
As a member of the WTO, Vietnam has seen a significant increase in customer demand for foreign currency services, particularly for foreign trade contracts However, a lack of sufficient foreign exchange resources could hinder SeABank Dai An's ability to meet this unexpected demand, putting it at a competitive disadvantage compared to other banks.
Therefore, in the near future, the branch needs to impose policy to attract greater amounts of foreign currency
Solutions
SeABank Dai An, like other sectors and financial institutions, has faced operational challenges on its path to economic integration, necessitating the implementation of effective solutions to enhance its performance.
Below solutions below based on the branch‟s ability Those solutions are not complete, but they would contribute to help the branch to obtain good results
1.1 Developing the potential of the branch‘s capital raising by imposing customer policies and promoting communication
In the competitive landscape of SeABank Dai An's region, where numerous commercial banks operate, it is essential for Dai An SeABank to develop effective customer attraction strategies To succeed, the bank must implement tailored policies that align with key principles of customer engagement and satisfaction.
Customers always deserve to receive the best concern and politeness from bankers
Staffs need welcome customers in professional and friendly style
Bank must strengthen propaganda and advertisements about their activities not only in the region but also in other places such as advertising in newspapers or radio
Establishing strong relationships with other banks and credit institutions, particularly strategic partners such as PVI and mobile phone companies, is essential for the branch These partnerships can attract potential customers and facilitate easier capital raising efforts for the branch.
1.2 Diversifying the types of fund mobilization
To enhance capital mobilization at SeABank Dai An, the branch must creatively implement measures that align with the regulations of SeABank Vietnam and the State By diversifying its capital mobilization strategies, the branch can attract more funds from various entities without increasing capital costs, thereby alleviating withdrawal payment pressures This approach allows for engagement across multiple levels and locations, leveraging a combination of flexible tools to achieve optimal business outcomes Key solutions for SeABank Dai An include improving existing methods and exploring innovative fundraising techniques.
To effectively mobilize deposits, developing savings programs specifically for home purchases can significantly enhance medium and long-term funding With rising housing expenditure needs, this approach enables customers to allocate a portion of their funds towards home buying over time Additionally, customers have the flexibility to select a monthly cash deposit option in banks at a pre-agreed interest rate, making homeownership more attainable.
Secondly, the branch needs to develop expectancy protection and retirement savings, which is suitable for people who want to save their current income for the future monthly
In the current condition, this form could attract deposits from customers than other forms
SeABank Dai An should diversify its residential deposit offerings by including savings deposits, card deposits, bonds, and promissory notes Additionally, the branch needs to expand the variety of deposit terms, providing options such as 1 week, 3 weeks, and 5 weeks to better cater to customer needs.
Fourthly, it is important for the branch to diversify personal deposit accounts to increase the number of accounts which means increasing sales through account payment
To attract more customers to open accounts, SeABank Da An should implement competitive interest rates while enhancing its payment services This can be achieved by educating customers about the benefits of their accounts, ensuring they recognize the value in using them Additionally, the branch can monitor two parallel accounts for customers with high payment deposit balances, strategically transferring some funds to term deposits when appropriate Conversely, when customers require greater access to their funds, the branch should automatically convert term deposits into demand deposits to better meet their needs.
SeABank Dai An carries out this measures, it would help the branch to avoid withdrawal stage repeatedly, time consuming and costly
The branch can establish partnerships with local universities and colleges to create student accounts on campus, tapping into the significant population of students in the region as a valuable resource for mobilization.
1.3 Developing a clear plan to mobilize capital for each stage
SeABank Dai An must implement a consistent capital-raising strategy for each phase, beginning with a clear plan that assesses potential residential capital and customer needs This plan should guide subsequent actions, including setting competitive interest rates and identifying effective capital mobilization methods.
1.4 Applying flexible interest rate policy
The interest rate is one of the powerful factors that impact on attracting capital
Raising interest rates can effectively attract funds, leading to intense competition among banks However, increasing interest rates also raises input costs, impacting business outcomes and lending rates, which can affect overall credit activity Consequently, banks must strategically set interest rates that entice customers while ensuring profitability.
Meanwhile, the branch should apply the preferential rate for potential customers as well as promotion programs to attract customers
1.5 Developing and expanding transaction network
To enhance customer engagement, the branch should focus on increasing transaction volume Additionally, transaction rooms with high customer traffic can benefit from extended service hours, such as offering overtime shifts from 5 PM to 8 PM and providing extra transaction time during holidays.
Therefore, the branch will respond better to customers who do not have time to deal with banks on weekdays and during office hours
1.6 Maximizing human factors and continuing to foster the professional qualifications of staff
One of the factors that increase the competitiveness of SeABank Dai An is employee with high quality Professional bankers are staffs that have below qualities
Understanding the process of operation
Having professional style of working
In the coming year, the branch should focus on promoting highly qualified and dynamic young leaders with strong moral values to key positions It is essential to evaluate and reassess staff capabilities to ensure appropriate sorting, arrangement, and promotion based on individual abilities Additionally, SeABank Dai An must establish transparent bonus and penalty systems to enhance performance and accountability.
To ensure a fair workplace at SeABank Dai An, it is crucial to address employee issues effectively, such as communication complaints from customers or instances of fraud, through appropriate measures like payroll deductions, cautions, or disciplinary actions Conversely, employees who demonstrate exemplary performance and adherence to company policies should be recognized and rewarded impartially This approach fosters motivation and encourages a positive work environment among SeABank Dai An employees.
To enhance capital mobilization, it is essential to utilize capital effectively, as the sources of capital and their usage are interrelated Capital serves as a foundation for banks to ascertain the required amount of funds to mobilize Consequently, branches must implement suitable strategies to both attract and optimize the use of these funds Currently, the quality of credit plays a significant role in this process.
SeABank Dai An is highly regarded, yet it needs to enhance the quality of its project evaluation officers The branch should proactively seek lending sources rather than waiting for customers to approach them Property loans must include specific guarantees, and SeABank Dai An should implement flexible interest rates based on the loan's maturity (short, medium, or long-term), the type and amount of the loan, or the customer's profile, offering lower rates for loyal patrons or potential borrowers.
Recommendations
SeABank Dai An has successfully addressed several operational challenges, yet it continues to face various shortcomings While the Branch can resolve issues within its operational scope, it lacks the authority to tackle problems beyond its jurisdiction To enhance capital mobilization, I propose several suggestions and recommendations.
2.1 Recommendations to the Government and The State Bank of Vietnam
The State Bank of Vietnam (SBV) plays a crucial role in managing and operating the commercial banking system, acting as a central bank for other financial institutions To foster public and business confidence in depositing funds, the SBV must develop and refine a monetary policy tailored to each developmental phase Additionally, it is essential for the SBV to implement clear and stable legal frameworks, minimizing frequent changes The bank should also adopt flexible interest rates that balance the interests of both banks and depositors Moving forward, the SBV should prioritize these key areas to enhance the banking environment.
To enhance the Forex market, it is essential to establish foreign currency funds managed by the State Bank of Vietnam (SBV) to ensure adequate foreign currency reserves for effective market participation Additionally, regulating exchange rates based on real-time supply and demand is crucial for maintaining market stability.
The State Bank of Vietnam (SBV) should establish a reasonable compulsory reserve ratio and implement suitable corrective measures in response to market fluctuations Setting the ratio too high could elevate capital-raising costs, negatively impacting lending sources and the overall profitability of banks.
2.1.2 Recommendations to the Government a Stabilizing the Marco-economy
Sable macro- economy is an important condition for SeABank Dai An to enhance the effectiveness of fund mobilization The Government should take steps to stabilize the
To ensure economic stability, the government must implement policies that promote monetary stability and strengthen the domestic currency This includes establishing a stable exchange rate policy and gradually reducing interest rates to align with global ceiling rates Additionally, enhancing the legal environment is crucial for fostering economic growth and stability.
The current regulatory environment in our country is insufficient and lacks motivation for economic development To enhance and facilitate currency trading activities in line with global integration trends, the government must establish a comprehensive legal framework that encourages bank cooperation and aligns with international standards.
In today's competitive landscape of capital mobilization, SeABank Dai An needs the flexibility to adjust interest rates proactively to attract depositors SeABank Vietnam should establish an interest rate ceiling and implement a tailored interest rate policy, allowing the branch to compete effectively with other banks By offering appealing interest rates and diverse payment options, SeABank Dai An can attract depositors not just through profitability, but also through innovative interest payment methods.
SeABank Vietnam should diversify its capital mobilization strategies by implementing innovative and varied methods to attract a wide range of customers The bank can issue additional long-term deposit certificates and bills to secure long-term funding from residents, thereby enhancing its financial stability and product offerings.
Regular training courses are essential for bank staff involved in fundraising, as they enhance both theoretical knowledge and practical skills The competitiveness of a bank largely depends on the quality of its employees Therefore, during reorganization or labor restructuring, banks should actively provide opportunities for young, qualified staff to undergo training and face challenges, enabling their promotion to more demanding roles Ultimately, prioritizing staff development is crucial for the bank's overall business strategy.
SeABank Vietnam needs to upgrade its systems to enhance the accuracy and speed of customer transactions, thereby preventing operational crashes that halt processing This upgrade will enable the branch to implement modern banking technologies, ultimately improving customer service.
To enhance capital raising quality at SeABank Dai An, several key measures should be implemented Firstly, developing customer policies and improving communication can significantly boost the branch's capital-raising potential Secondly, diversifying the types of raising products and establishing a clear capital mobilization plan for each stage, along with a flexible interest rate policy, is essential Lastly, continuous assessment and adaptation of these strategies will ensure sustained growth and effectiveness in capital raising efforts.
SeABank Dai An aims to enhance its transaction network by optimizing human resources and fostering staff professional development The branch is committed to utilizing capital effectively, improving customer service quality, and advancing technology Furthermore, collaboration among the Government, the State Bank of Vietnam (SBV), and SeABank is essential to create a conducive environment for SeABank Dai An to strengthen its fund mobilization operations.
The current socio-economic landscape presents a complex blend of challenges and opportunities, necessitating a focus on industrialization and modernization To achieve this, the country must harness a technological revolution and optimize resource utilization, particularly in capital Implementing effective capital-raising strategies is crucial, as these solutions are vital for enhancing bank performance, ensuring capital safety, and facilitating growth.
SeABank Dai An aims to thrive and grow by implementing a research methodology that aligns with its objectives and scope, successfully achieving several key tasks outlined in the thesis.
Representing a number of scientific evidence about raising capital
Doing extensive research on the mobilization of capital in SeABank Dai An recently which helps to measure the ability of the Bank to mobilize capital
Outlining a number of measures to strengthen the capital mobilization for
All of my comments and suggestions can only take effect when there is coordination between departments in the banking sector and related industries in the process of implementation
Once again I would like to thank Ms Nguyen Phuong Lan - MA as well as officials in
I would like to express my gratitude to SeABank Dai An for their support in completing my thesis Despite my limited knowledge and time for research, I acknowledge that the thesis may have certain shortcomings I welcome feedback and evaluations from my teachers to enhance the quality of this essay.