CHAPTER 2: ANALYZING THE SITUATION OF CONSUMER LENDING ACTIVITIES IN SAI GON JOINT
2.1 Overview about Saigon Joint Stock Commercial Bank – Dong Da branch .1 General information
2.1.3 Business performance in the period 2020-2022
Overview about the deposit banking activities
Total deposit of SCB Dong Da branch in the period 2020-2022 can be presented in the following table:
Table 2.1 The deposit banking activities of SCB Dong Da branch in 2020- 2022
Unit: billion VND
Year Total deposit Growth rate
2020 169.45 20.1%
2021 202.6 19.57%
2022 229.29 13.17%
Source: SCB Dong Da branch’s annual report 2020-2022 Based on Table 2.1, it is shown that the total banking deposit of SCB Dong Da branch had an increase in the period 2020-2022. In specific, the deposit in SCB Dong Da branch was raised from 169.45 billion VND in 2020 up to 229.29 billion VND in 2022. These figures reflect the development of deposit banking activities in SCB Dong Da branch. However, the growth rate had a downward trend, from 20.1% in 2020 down to 13.17% in 2022.
About the scale:
Deposit banking activities has been SCB Dong Da branch’s main focus and strength since its establishment, benefiting greatly from the branch’s size, duration of operation, reputation, and consistently high level of customer service.
One of the branches in the system with the highest capital mobilization scale has always been the SCB Dong Da Branch.
Total capital mobilization scale of the Exchange has a stable growth rate over the years. In 3 years from 2020 to 2022, the branch’s deposit increased by 59.84 billion VND, equivalent to 73% increase. Currently, the general direction of capital mobilization are individual customer and corporate customer, so in the coming years, the development of capital mobilization from consumer lending activities will be the focus of development of SCB Dong Da branch.
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2020 2021 2022 0
50 100 150 200 250
57.22 62.37 68.53
112.23
140.23
160.76 169.45
202.6
229.29
Deposit
Individual customer Coporate customer Total deposit
Figure 2.4 The scale of deposit banking activities in SCB Dong Da branch (Unit: billion VND)
Source: SCB Dong Da branch’s annual report 2020-2022
About the structure
As a branch with a large scale and high reputation, SCB Dong Da branch is trusted and used by many administrative and non-business units and large organizations. The structure of demand deposits accounted for a high proportion of total deposits (77-80%) at the Exchange, showing the great role of this cheap source of capital in the branch's business strategy. Demand capital has very low cost (interest rate paid to customers is only 0.2%/year). Therefore, this is one of the effective and profitable activities for SCB Dong Da branch. Maintaining a high proportion of demand deposits plays an important role in bringing profits to the branch.
2020 2021 2022
0% 20% 40% 60% 80% 100% 120%
76%
78%
80%
24%
22%
20%
Demand deposit Term deposit
Figure 2.5 The structure of deposit banking activities in SCB Dong Da branch (Unit: million VND)
Source: SCB Dong Da branch’s annual report 2020-2022 2.1.3.2 Results on lending activities
Overview about the lending activities
Total lending amount of SCB Dong Da branch in 2020-2022 can be demonstrated in the following table:
Table 2.2 The lending amount of SCB Dong Da branch in 2020-2022 Unit: billion VND
Year Total lending amount Growth rate
2020 152.505 22.6%
2021 182.34 19.57%
2022 206.361 13.17%
Source: SCB Dong Da branch’s annual report 2020-2022 As stated in Table 2.2, the lending amount of SCB Dong Da branch also had an upward trend in the last years. Between 2020 and 2022, the lending amount of the branch increased from 152.505 up to 206.361 billion VND, which demonstrates the growth of lending activities in SCB Dong Da branch.
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About the scale
2020 2021 2022
0 50 100 150 200 250
80.91
95.14
108.25
7.14 10.03 13.66
64.46
77.17 84.45
152.51
182.34
206.36
Corporate customers Household Individual customers Total loans
Figure 2.6 The scale of lending activities in SCB Dong Da branch (Unit:
Billion VND)
Source: SCB Dong Da branch’s annual report 2020-2022 The scale of the total outstanding loans of SCB Dong Da branch is relatively large (total outstanding loans in 2022 reach VND 206.361 billion and continuously increases over the years, the average annual growth rate in the period 2020-2022 is 16.37 %/year, this is a good growth figure compared to banks of similar size in Hanoi city.
In terms of outstanding loans by borrower, corporate customers are always the customers who account for a large proportion of the total loan balance (average 60% of total outstanding loans) and have not changed too much over the years. With the orientation to grow the retail lending structure and become the No. 1 retail bank in Vietnam by 2025, the restructuring of SCB Dong Da branch is still slow, not meeting the requirements for growth in outstanding loans.
Especially, household customers have a very low growth rate, even negative growth in some periods, not commensurate with the potential of the branch as well as strategic business goals in the next period 2021-2025 that SCB Dong Da branch orientates.
About the structure
2020 2021 2022
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
33% 39%
53%
67% 61%
47%
Short-term Medium & long-term
Figure 2.7 The structure of lending activities in SCB Dong Da branch (Unit:
billion VND)
Source: SCB Dong Da branch’s annual report 2020-2022 The loan structure of SCB Dong Da branch mainly focuses on medium and long-term loans; due to the strength of the Exchange in appraising and lending large investment projects (electricity groups, oil and gas, ...). However, with the general orientation of the whole SCB system focusing on increasing the structure of short-term loans, the proportion of short-term loans of SCB Dong Da branch in the recent period has generally tended to increase gradually. Medium- and long-term lending activities usually have higher profit margins, but also pose more risks because medium- and long-term lending activities have a longer payback period. Therefore, the orientation to increase the proportion of short- term loans also reflects the strategy of SCB Dong Da branch in strengthening credit risk control, increasing capital adequacy efficiency and ensuring asset quality.
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2.1.3.3 Financial situation
2020 2021 2022
0 100 200 300 400 500 600
391.92
455.61
519.25
96.54
125.45
104.32
92.66 105.96 97.5
Net revenue Gross Profit Expense
Indicators 2020 2021 2022
Net revenue 391.92 455.61 519.25
Gross Profit 96.54 125.45 104.32
Expense 92.66 105.96 97.50
Figure 2.8 Results on financial performance of SCB Dong Da branch in 2020-2022 (Unit: billion VND)
Source: Accounting and Fund Department As can be seen from the table, the revenue is increasing every year. From 2020 to 2022, the revenue increased 75.47%. In the next period, the revenue experienced a sustainable growth of 87.74% from 455.61 billion VND to 519.25 billion VND, whereas the gross profit of the branch had a fluctuation in this period. In specific, the gross profit increased from 96.545 billion up to 125.45 billion VND between 2020 and 2021. However, in 2022, the gross profit declined down to 104.32 billion VND.
The Profit after tax of SCB Dong Da branch in 2021 experienced the lowest value of profit after tax. It may result from the economic downturn due to Covid- 19 pandemic, which significantly influenced business activities. Afterwards, the
bank witnessed a positive trend, with an increasing value from 24.39 billion VND to 34.11 billion VND.