CHAPTER 2: ANALYZING THE SITUATION OF CONSUMER LENDING ACTIVITIES IN SAI GON JOINT
2.2.3 Assessing the criteria of improving consumer lending activities in the branch
Bad debt in this item also decreased over 3 years. In 2021, it will decrease by 0.02 billion VND (a decrease of -1.83%) compared to 2020, and in 2022, it will decrease by 0.01 billion VND (equivalent to a decrease of 0.93%). The decrease in bad debt is also due to the achievements of specialists in debt collection and the sense of debt repayment of customers.
2.2.3 Assessing the criteria of improving consumer lending activities in the branch
2.2.3.1 Loan sales
Considering the loan sales of consumer lending activities, it is shown in Table 2.5 that SCB Dong Da branch had upward trends in its loan sales for all categories including home repair, buying cars and other demand. In overall, total loan sales for consumer lending activities increased from 760.37 billion VND in 2020 up to 1128 billion VND in 2022.
Regarding to the growth rate of loan sales, the consumer lending activities of SCB Dong Da branch had a growth rate of 28.90% between 2020 and 2021. In 2022, this indicator continued its growth and reached to 15.09% between 2021 and 2022. Among the categories of consumer lending activities, the loan sales for other demands accounted the largest percentage and had the highest growth rate in compared to consumer loans for home repair and buying cars.
These figures reflect that the bank has been strengthening the development of consumer loans categories and making a lot of efforts to attract customers.
Table 2.5 Loan sales of consumer lending activities at SCB Dong Da branch Unit: Billion VND
Categorie s of loan
sales
Year Changes
2020 2021 2022 2021/2020 2022/2021
Amount Amoun
t % Amoun
t %
For home
repair 260.1 302.8 2
308.1
2 42.72 16.42% 5.3 1.75%
For buying
cars 150.4 180.5
6 210.3
2 30.16 20.05% 29.76 16.48%
For other demands
349.8 7
496.7 4
609.5
6 146.88 41.98% 112.82 22.71%
Total loan sales
760.3 7
980.1
2 1128.0 219.75 28.90
% 147.88 15.09
% Source: Accounting and Fund Department 2.2.3.2 Outstanding loans
The changes in outstanding loans
The changes in outstanding loans of consumer lending activities in SCB Dong Da branch is presented in Table 2.6 as follows:
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Table 2.6 The outstanding loans of consumer lending activities in SCB Dong Da branch
Unit: Billion VND
Outstandin g loans
Year Changes
2020 2021 2022 2021/2020 2022/2021
Amount Amoun
t % Amoun
t %
226.4 7
286.3 4
239.9
2 59.875 26.44
% -46.42
- 16.21
% Source: Accounting and Fund Department As shown in Table 2.6, it is clear that there was a fluctuation in the outstanding loans of consumer lending activities in SCB Dong Da branch in the period 2020-2022. Between 2020 and 2021, the outstanding loans had an increase from 226.47 billion VND in 2020 up to 286.34 billion VND in 2021, equivalent to the growth rate of 26.44%. However, in 2022, the outstanding loans declined significantly from 286.34 billion VND in 2021 down to 239.92 billion VND in 2022, respectively the growth rate of -16.21%. Since the loan sales had an increase in the period 2020-2022, a negative growth rate of outstanding loans can reflect an improvement of SCB Dong Da branch in collecting the debts.
The market share of outstanding loans
To determine the market share of outstanding loans in consumer lending activities in SCB Dong Da branch, the author could compare with some major competitors of SCB which also provide the consumer loans in Dong Da district including: VIB Dong Da branch, Techcombank Dong Da branch, Sacombank Dong Da branch and VPBank Dong Da branch.
According to the annual reports of SCB Dong Da branch, the market share of the commercial bank branches can be illustratrated in the below chart:
27.00%
25.00%
8.00%
29.00%
11.00%
Market share
VIB Dong Da branch Techcombank Dong Da branch Sacombank Dong Da branch VPBank Dong Da branch SCB Dong Da branch
Figure 2.11 The market share of outstanding loans (Unit: %) As illustrated in the above chart, it is revealed that the market share of outstanding loans in SCB Dong Da branch is still lower than the other competitors in Dong Da district. The commercial bank with the largest market share of outstanding loans in consumer lending activities is VPBank Dong Da branch, accounting for 29%. It is followed by VIB Dong Da branch (27%) and Techcombank Dong Da branch (25%). Whereas the market share of SCB Dong Da branch only accounts for 11%. It means that the development of consumer lending activities of Dong Da branch is still limited in compared with other commercial banks.
2.2.3.3 Number of customers
The number of customers who involved in the consumer lending activities of SCB Dong Da branch is presented in the below table:
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Table 2.7 The outstanding loans of consumer lending activities in SCB Dong Da branch
Unit: Billion VND
Number of customers
Year Changes
2020 2021 2022 2021/2020 2022/2021
Number Numbe
r % Numbe
r %
1062 1146 1228 84 7.91% 82 7.16%
Source: Accounting and Fund Department Generally speaking, the number of customers involving in consumer lending activities of SCB Dong Da branch had an upward trend in the period 2020-2022. The growth rate in number of customers also remain stable. In specific, the number of customers in 2021 increased 7.91% in comparison with that of 2022, equivalent to 84 customers. In 2022, number of customers had a growth rate of 7.16%, equivalent to 82 customers in comparison with that of 2021.
2.2.3.4 Bad debt to total outstanding loans ratio
Table 2.8 Debt classification of SCB Dong Da branch
Debt group Unit 2020 2021 2022
Group 1 Billion
VND 370.765 489 597.43
Group 2 Billion
VND 160.17 128.36 199.87
Group 3 Billion
VND 1.65 1.50 1.61
Group 4 Billion
VND 1.20 1.21 1.26
Group 5 Billion
VND 1.21 1.28 1.09
Total debt Billion
VND 760.37 980.12 1128
Total bad debt (Group 3 + 4 + 5)
Billion
VND 4.06 3.99 3.96
Bad debt ratio Times 0.53% 0.41% 0.35%
Source: Accounting and Fund Department The indicator of consumer bad debt compared to the consumer debt balance in 2020 is 0.53%, showing that for every 1,000 VND of consumer loans that have not been recovered, there are 5.3 VND as bad debt. This indicator in 2021 is 0.41% and slightly decreased in 2022 is 0.35%. This indicator tends to decrease slightly and is less than 3%, showing that the bank branch has actively handled consumer bad debts by reminding and urging customers to pay debts and customers also voluntarily pay off their loan to build a good credit history for future loans.