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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.Q 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

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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 - Thnh Cng Credit Payment department Accounting Service department Administration Treasury department 11. Secondary branch - Cu Giy Credit Payment department Accounting Service department Administration Treasury department 12. Secondary branch - Chng Dng Credit Payment department Accounting Service department Administration Treasury department 13. Secondary branch - Ba nh Credit Payment department Accounting Service department Administration Treasury department 14. Transaction office number 1 - Hng Bi 15. Transaction office number 2 - Trn Bnh Trng 16. Transaction office number 3 - Hng ng

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17. Transaction office Ni Bi

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Source: vcbhanoi.com.vn

Board of directors: Diagram 1.2 Structure of the board of director

Department Human resources General co-ordination office Import export settlement Customers Financial accounting Treasury Card payment Banking services Individual customers Internal control & audit Debt handling Technology management

Manager Ms Phan Thi Hong Van Ms Nguyen Hoang Oanh Ms Le Thi Lien Mr Nguyen Tuan Phong Ms Doan Thi Khanh Van Ms Ha Thi Lan Mr Tran The Vinh Ms Nguyen Thi Mai Hoa Mr Pham Thanh Binh Ms Chu Thi Chau Hanh Ms Nguyen Thi Ba Mr Trinh Nam Hung

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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 of management and the best efforts of all employees at the branch, the fund mobilization activity got remarkable results.

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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. Diagram 2.1 Fund mobilization and lending activities through periods
Billion VND 9000 8355 8000 7000 6000 5000 4000 3000 2000 1000 0 31/12/2007 31/12/2008
HV

6270

6818

3125 2553 2455

31/12/2009
CV

Source: Financial report of VCN HN 2009

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

Type of currency:

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.

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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 accounting for 94% of the total mobilized fund.

billion

VND,

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

2008

2009
Outcome s Percentag e Outcome s

2010
Percentage

Targets
1. Economic sectors Residents Economic organizations 2. Currency VN Foreign currency

Outcome s

Percentag e

7,175 5,395 1,780 7,175 3,919 3,256

100% 75% 25% 100% 55% 45%

8,355 5,904 2,451 8,355 4,803 3,552

100% 71% 29% 100% 57% 43%

10,705 6,165 4,540 10,705 6,931 3,774

100% 58% 42% 100% 65% 35%

Source: Financial report of VCB HN 2010

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2.2.

Credit activities:

2.2.1. Loans: Bank for Foreign Trade of Vietnam is of ability to meet funds 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 familys 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/landor 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 governments 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. Outstanding loans of foreign currency earned 1.098 billion VND, accounting for 30% of total loans, increased by 30% compared to 31/12/2009.

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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. Loan under interest rate agreement: Total outstanding loans under interest rate agreements reached about 804 billion VND, of which:

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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 vehiclesin 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 customers request, Vietcombank issues a written commitment to a third party designated by the customer (the guarantees beneficiary) on execute financial responsibility for the customer when the customer doesnt execute or execute correctly the responsibility committed to the guarantees 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 Performance Bond Product quality guarantee Advance payment guarantee (Guarantee for Reimbursing advanced payment, guarantee for Reimbursing deposit or deposit guarantee)

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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. 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:

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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 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.

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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. 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

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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

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%.

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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%. Advantages:

3.2.

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. 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

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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 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.

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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. 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,

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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

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.

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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. 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.

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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:

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.

Supervisor: GS.TS Pham Quang Trung

Vu Thanh Loan AF49

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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:

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

Supervisor: GS.TS Pham Quang Trung

Vu Thanh Loan AF49

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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.

Supervisor: GS.TS Pham Quang Trung

Vu Thanh Loan AF49