Current Status Of Credit Process For Private Banking Finance Essay

2010 is a hard twelvemonth for Vietnam Banking industry with effect of fiscal crisis in all planetary with many challenges such as: On the one manus Vietnamese banking industry has to increase recognition, investing, consumer to forestall the diminution of economic system within the range of exigency of Governance, on the other manus, Vietnam has to take attention of high rising prices rate and enhance meet the demand of foreign currency, corporate capital in this hard period ( decline sedimentation, national budget, fiscal income from export activities and speedy alteration of international situationaˆ¦ )

There are 10 high spots of Vietnam ‘s banking and fiscal sector in 2010 as below:

( 1 ) Successful publishing for $ 1billion of autonomous bonds with the voucher rate of 6.57 per centum per annum.

On January 25, 2010, in New York, Vietnam succeeded in publishing $ 1 billion of 10 twelvemonth term international bonds with the nominal voucher rate of 6.57 per centum dad and the output of 6.95 per centum dad, higher by 1 per centum dad than the output offered by Indonesia and Philippines at that clip although Vietnam ‘s recognition evaluation was higher one class than that of Indonesia and Philippines. These bonds are being listed on Singapore Stock Exchange and will be matured on January 29, 2020. The entire sum of $ 1 billion was already transferred to Vietnam on January 29, 2010. This capital beginning is being used to function the authorities ‘s disbursals and loaning activities for investing undertakings such as $ 700 million for Dung Quat oil refinery ( the loaning rate offering to Vietnam National Oil and Gas Group-PetroVietnam was 3.6 per centum per annum ) and the staying for investing undertakings disbursed by the Ministry of Finance.

( 2 ) Closing the gold trading floor on March 30, 2010.

Confronting unmanageable motions of the gold floor, on December 30, 2009, the Vietnamese authorities asked to shut the gold trading floor countrywide as of March 30, 2010. At the same clip, the Prime Minister besides required SBV ‘s governor to extinguish ordinances on gold trading in foreign histories.

( 3 ) World ‘s taking recognition establishments downgraded the recognition evaluation of Vietnam in 2010.

In July, 2010, Fitch downgraded Vietnam ‘s recognition evaluation from BB- to B+ because of low modesty of US dollar and weak banking system. In September, Fitch devaluated the recognition evaluation of Vietnam Commercial Joint Stock Bank for Foreign Trade ( Vietcombank-VCB ) and Asia Commercial Bank ( ACB ) from D/E degree to the D degree because of high outstanding loan growing and low loan quality. Fitch said that even when finalising the hired capital addition program in 2010, these two Bankss could non run into high recognition costs and back up growing for loans. Meanwhile, other establishments such as Asian Development Bank ( ADB ) , and International Monetary Fund ( IMF ) were surprised with Fitch ‘s recognition evaluation downgrade determination for Vietnam because establishments like IMF, World Bank ( WB ) and ADB gave optimistic prognosiss on Vietnam ‘s economic system state of affairs.

In December 2010, Moody besides lowered the Vietnam ‘s bond evaluation to B1 from Ba3 and maintained a negative mentality due to put on the line associating to payment balance crisis, devaluation force per unit area of dong and high rising prices. Moody besides mentioned the default of Vietnam Shipbuilding Industry Group ( Vinashin ) . Moody said that Vietnam ‘s rising prices after mounting to 11 per centum in November 2010, the highest degree during past 20 months, will do many force per unit areas on the foreign exchange rate and capital backdown phenomenon. Moody lowered the recognition evaluation in US dollar sedimentations of six Vietnamese Bankss ( including ACB, BIDV, MB, Saigon-Hanoi Bank, Techcombank and VIB ) to B1 degree from B2. In add-on, Moody besides reduced from one to two stairss as for Baseline Credit Assessments and Bank Financial Strength Ratings of these six Bankss.

On December 23, 2010, Standard & A ; Poor ‘s ( S & A ; P ) announced that it was take downing Vietnam ‘s long-run crowned head evaluation in foreign currency by one notch to BB subtraction from BB, seting it on the same degree with Bangladesh and Mongolia. The state ‘s long term crowned head evaluation in local bill was besides cut down by one class to BB from BB plus while the ranking on short term autonomous short term in dong was maintained at the B degree.

The lower recognition evaluations mean Vietnam will hold to bear higher involvement rate to borrow capital abroad in approaching clip.

( 4 ) The gilded monetary value touched the highest degree of 38.5 million dong per tael, up 43.6 per centum against the shutting monetary value in 2009, raising a rumor that about 1,000 metric tons of gold is being held by dweller, SBV ‘s governor announced Vietnam ‘s gold trade shortage was 71 metric tons in 12 old ages.

The domestic gold monetary value set up a new record on November 9, 2010 when leaping to 38.5 million dong per tael, lifting 44.68 percent versus the terminal of 2009 ( at 26.61 million dong/tael ) and up 36.8 per centum against old three months. Meanwhile, till December 7, 2010, the universe gold monetary value established the twelvemonth ‘s record at $ 1,427.8 per ounce and the lowest degree in 2010 was at $ 1,061.4/oz, a different of 34.5 per centum. If ciphering establishing on the shutting monetary value at New York market in 2010, the highest degree was $ 1,423/oz, up 23.8 percent year-on-year. In twelvemonth, the cardinal bank had to publish many ordinances taking to ease the gold market such as leting gold imports, cut downing the gold import duty from 1 per centum to zero per centum from November 12, 2010 and increasing the gold export duty from zero per centum to 1 per centum as of January 1, 2011 and publishing the Circular No 22 to control elevation and utilizing capital in gold of commercial Bankss. In the market, raising an information that about 1,000 metric tons of gold is being held by inhabitant nevertheless, SBV ‘s governor, Nguyen Van Giau announced that Vietnam ‘s gold trade spread was 71 metric tons in recent 12 old ages.

( 5 ) The US dollar monetary value hit the highest degree of 21,500 dong in November 2010 and Vietnam made two devaluations on dong.

In 2010, the cardinal bank made two accommodations on FX rate.

The first was made on February 10, 2010 whereby the mean interbank FX rate was adjusted up from 17,941 dong/US dollar to 18,544 dong/US dollar ( up 3.3 per centum ) , puting the ceiling monetary value at 19,100 dong per US dollar at commercial Bankss. On the same twenty-four hours, the cardinal bank besides regulated the ceiling sedimentation rate in US dollar at economic establishments at 1 per centum per annum, using from February 11, 2010.

In the 2nd accommodation, the cardinal bank increased the interbank mean FX rate to 18,932 dong/US dollar, using from August 18, 2010, lifting 2.09 per centum, giving the ceiling US dollar monetary value at commercial Bankss at 19,500 dong/US dollar.

After the cardinal bank ‘s 2nd accommodation, along with instable motions of the foreign and domestic gold market, in the free market, the US dollar monetary value even set up the record of 21,530 dong/US dollar, up 12 per centum from 2009 and higher by 10 per centum than the listed FX rate at commercial Bankss at the same period.

On November 4, 2010, the National Financial Supervisory Commission ( NFSC ) announced that the authorities agreed to pump strongly US dollar into the market to function indispensable production sectors but non exports and would retain the FX rate till the terminal of the twelvemonth. Harmonizing to Le Duc Thuy, in October 2010, SBV pumped $ 200 million to stabilise the market.

By the terminal of twelvemonth, SBV announced this twelvemonth ‘s inward remittal may hit $ 8 billion and the force per unit area on US dollar may be lessened, so the FX rate in the free market ranged about 21,000 dong per US dollar.

( 6 ) The keeping bank is non allowed to supply recognition for its securities installations.

This ordinance took consequence from January 1, 2010. Consequently, recognition establishments are non allowed to offer capital to its outgrowths runing in securities sector. In add-on, the ordinance besides stipulated that Bankss are non allowed loaning to lend capital to other recognition establishments via having assets secured by stock of that recognition establishment. Besides harmonizing to the jurisprudence, the allowance for recognition establishments to use the dialogue involvement rate mechanism does non intend that the involvement rate will be floated freely in the market. In necessary instance, the cardinal bank will do direct intercession to the involvement rate mechanism of recognition establishments. Harmonizing to the ordinance, the State Bank of Vietnam ( SBV ) will be responsible for denoting the refinancing involvement rate, basic rates and other involvement rates to run the pecuniary policy.

( 7 ) The Circular No 13 issued on May 20 increased the capital adequateness ratio ( CAR ) from 8 per centum to 9 per centum.

SBV ‘s governor on May 20 signed a Round No 13/TT-NHNN modulating the capital adequateness ratio ( CAR ) at recognition establishments whereby the CAR will be raised to 9 per centum from 8 per centum of old ordinance. The round came to consequence as of October 1, 2010.

( 8 ) Recognition growing at 27.65 per centum in 2010. The sedimentation rate established record of 18 per centum per twelvemonth by Techcombank.

Till June, 2010, the recognition growing was about 10.52 per centum, but recognition growing in dong was merely 4.6 per centum whereas recognition growing in US dollar surged 27 per centum. However, by the terminal of twelvemonth, the recognition growing was up 27.65 per centum ( excepting the gold monetary value index ) , of which, recognition growing in dong was 25.34 per centum and it was 37.76 per centum in US dollar. By the center of the twelvemonth, commercial Bankss committed to use the loaning rate at 12 per centum per twelvemonth and salvaging rate at 10 percent/yr. But, in fact, the loaning rate for non-production sector was up to 13-15 per centum per twelvemonth, and the sedimentation rate was 11 per centum per twelvemonth. However, by the terminal of the twelvemonth, the sedimentation rate climbed to 18 per centum per twelvemonth and the loaning rate soared to 21 per centum per twelvemonth. After unpredictable motions of the FX rate and domestic gold monetary value by the terminal of October, at the meeting on November 4, the NFSC announced to use the floating involvement rate in conformity with the market. On November 5, the cardinal bank increased the cardinal rate from 8 per centum to 9 per centum. Vietnam Bank Association ( VNBA ) ‘s members agreed to increase the ceiling consensus sedimentation rate to 12 per centum per twelvemonth. However, subsequently little Bankss started a race in salvaging rate, forcing up the sedimentation rate to 14 per centum per twelvemonth ; the interbank nightlong involvement rate was up to 13 per centum per twelvemonth, even to 20 per centum per twelvemonth. On November 11, the cardinal bank strongly pumped capital into the OMO market and opened more 14 twenty-four hours term to stabilise the interbank market. On December 8, Vietnam Technological and Commercial Joint Stock Bank ( Techcombank ) launched “ Three aureate yearss ” publicity plan with the salvaging rate of up to 17.6 per centum, making premiss for little commercial Bankss to offer the implicitly negotiated involvement rate to 17-18 per centum per twelvemonth. On December 15, after working with the cardinal bank, 50 Bankss committed to take down the ceiling sedimentation rate to 14 per centum per twelvemonth ( including publicity plan ) . By the terminal of December, the involvement rate market reached the stableness whereby the loaning rate lowered to 18-20 per centum per twelvemonth and the nightlong loaning rate decreased to 10-12 per centum per twelvemonth.

( 9 ) The authorities agreed to widen the deadline by one more twelvemonth for commercial Bankss to boost hired capital to three trillion dong.

Harmonizing to the authorities ‘s Decree No 141 issued on November 22, 2006, till the terminal of 2010, all commercial Bankss must run into the minimal legal capital of three trillion dong and it is 500 billion dong for finance companies and 150 billion dong for fiscal leasing companies. By the terminal of November, approximately 19 commercial Bankss in the banking system find it difficult to run into the ordinance on clip. On December 14, the cardinal bank officially announced that the authorities agreed to widen the deadline by one more twelvemonth for commercial Bankss to finalise the legal capital of three trillion dong by December 31, 2011. However, about Bankss announced that they will transport out the Decree No 141 on clip. Vietbank, Mekong Bank and GPBank announced finalising the addition of hired capital to three trillion dong. DaiABank and HDBank besides expect to finalise the charter capital addition in December. These Bankss are being chiefly supported by domestic and foreign bulk stockholders. On December 21, 2010, the cardinal bank besides allowed four foreign Bankss ‘ subdivisions to boost capital. Particularly, Huanan Commercial Bank, Ltd ‘s HCM City subdivision will scale up capital from $ 15 million to $ 65 million, Chinatrust Commercial Bank ‘s HCM City subdivision ( from $ 15 million to $ 50 million ) , Mizuho Corporate Bank, Ltd ‘s HCM City ( from $ 15 million to $ 133.5 million ) and Mizuho Corporate Bank, Ltd ‘s Hanoi subdivision ( from $ 15 million to $ 133.5 million ) .

( 10 ) Individual and establishment are allowed to put capital into one recognition establishment.

The authorities on December 17, 2010 issued a Resolution No 60/NQ-CP on simplifying administrative processs under the direction map of the State Bank of Vietnam ( SBV ) . Consequently, each person and establishment are allowed to put capital into merely one recognition establishment[ 1 ]

Techcombank ‘s chief rival analysis in retail loaning

Harmonizing to Research Market research for Consumer Financial Services Monitor conducted in Q3/2009 by Cimigo with intent to roll up clients sentiments on consumer fiscal services in Hanoi and Ho Chi Minh metropolis ( Sources of informations: sentiments of sample citizens in Hanoi and Ho Chi Minh metropolis )

Share of clients in Hanoi mostly unchanged over past twelvemonth. Vietcombank remains market leader in HCMC, with 6-points higher reported usage among respondents in Q2-3 2009. ( TCB ranks 8 )

DongA, VIB have highest proportion of & lt ; 25 users, Sacombank, MB and ACB have highest proportion of older users. TCB client ‘s age from 25-50 old ages old is approximately 80 %

Banks with strong presence in the North have highest % college-educated users, with the exclusion of Agribank ( BIDV: 63 % . Megabit: 58 % and TCB: 56 % )

Banks with strong presence in the North have highest % college-educated users, with the exclusion of Agribank ( Management – junior: BIDV: 22 % . VCB: 20 % ; Professional workers: BIDV: 23 % , TCB:24 % ; Small game: Sacombank:19, ACB:22 % )

National Bankss

Vietcombank: is one of the first Bankss that define retail banking services are focus scheme. Vietcombank is known as diversified and modern services for persons as loans, cards, ATM system, sedimentations, e-banking, remittals. One of Vietcombank ‘s strength is focus on traditional merchandises and suited merchandises for each mark client groups: Launch Priority plans. Unbarred loans: meet the client demand and hazard direction every bit good

In 2002, the first ATM system and the first local debit card issued in Vietnam with trade name name Vietcombank Connect 24. After 5 old ages, Vietcombank has full card bundle, including Debit card and Credit card ( with trade name name Visa, Master, American Express, Diner Club and JCB ) . End of 2007, Vietcombank has more than 100.000 recognition cards, 2,5 local debit cards, more than 1000 ATMs and about 6,000 merchandisers.

From 1000s of clients in September, presently Vietcombank has more than 3 million clients ( prehend 30 % entire market )

Joint-stock Bankss – Group 1

3 top articulation stock Bankss in Vietnam are ACB, Sacombank, Dong A bank, straight rivals of Techcombank on market portion and web development every bit good

ACB: follows a competitory scheme of distinction with retail banking orientation ( personal Customers and Small and Medium Enterprises ) . Presently, ACB opens about 200 branches/TSOs with more than 6,000 staffs over the state.

Sacombank: After 17 old ages from a little bank with hired capital of 3 measures, Sacombank increased their hired capital to 5,116 measures up to now and unfastened 266 branches/TSOs in 45/63 provinces/cities over the state. Sacombank received many esteemed awards every bit symbolic as “ Yearly retail bank in Vietnam in 2008 ” nominated by Asian Banking & A ; Finance

In May 16, 2008, Sacombank functionary promulgate to set up Sacombank Financial Group that regulate 10 company members with chief aims: “ Coordination – Alliance – Association ” to supplement human resource, usage every capableness, use modern engineering and direction experiences, diversify products/services to supply Customer to the full fiscal bundle to run into market demand. This is one of advantage for Sacombank to implement retail banking scheme.

Dong A bank: is established at July 7, 1992 with hired capital VND 20 billion. After 16 old ages, Dong A Bank is going best joint stock bank in Vietnam with 3,400 of chartered capital and takes the enterprise in developing modern banking services that meet life demand. With perceptual experience “ popularise banking services and banking engineering ” Dong A bank sets the mark to be multipurpose bank – stable finance group.

Foreign Bankss

ANZ: In July 2008, ANZ implemented “ Ngan bent sunburn noi ” in Ha Noi and Ho Chi Minh metropolis, Customers can be consulted and do dealing demand in expected clip and topographic point. Mr.Alex Thursby – Director of ANZ ‘s Pacific Asian country stated that: “ ANZ will open many branchces/TSOs in large metropoliss ”

Standard Chartered-Bank: Presented “ retail banking in Vietnam ” service. Mr.Ashok Sud – Chief executive officer of Standard chartered in Vietnam said that: Even if they adjust economic growing forecast GDP of Vietnam from 7 % to 6.7 % , Vietnam still is one of the state with high growing in this country ” “ We are still optimistic about economic growing in general and banking development in peculiar within 3-5 coming old ages, particularly in retail banking service. We provided Consumer loan and we will present other loans for SME in the close hereafter ”

HSBC: has been in Vietnam for 138 old ages – the Bank foremost opened an office in Ho Chi Minh metropolis in 1870 ( it is called Sai Gon at that minute ) . HSBC presently holds 20 % of the portion capital of Techcombank and 10 % of the portion capital of Bao Viet Holdings – the taking fiscal insurance group in Vietnam. These investings strengthen HSBC ‘s place as the largest foreign bank in the state in footings of investing capital, web, merchandise scope, staff and client base. The Bank officially started to run at HSBC Bank ( Vietnam ) Ltd on January 1, 2009 and is headquartered in Ho Chi Minh. Currently, HSBC has 4 dealing offices. HSBC aim is to be best retail Bankss in Vietnam.

Table I. 1: Competitor comparing of Techcombank about loaning merchandises


Strategic merchandise 2009



Strategic merchandise 2010




-Credit card


Wide branch/transaction point web with 237 Braches/Transaction point

Associate with many developers, Showroom aˆ¦

Strong and esteemed trade name

Professional staff

More upper client ( Ex: minimal income & gt ; =5mio )

– Mortgage

– Car

– Bancassurance

– Survey aboard

– Card





Wide branch/transaction point web with more 300 braches/Transaction point

Good cross-selling, Assorted merchandise

Professional staff

Lack of capital at the terminal of the twelvemonth.

Tighten loaning procedure

– Mortgage

– Car


– Cardaˆ¦


-Study abroad



Competitive Interest rate

Wide concern loaning web

Assorted merchandises

Small retail loaning web

Do n’t tie in with many salesroom because of policies

– Mortgage

– Car

– Survey abroad

– Bancassurance





Professional staff, good adviser services

Competitive Interest rate

Upper client

Small retail loaning web



Market composing & A ; Techcombank: As appraisal, Techcombank additions 14 % in the retail recognition market.

Figure I. 1: Market portion in Vietnam Retail Credit Market

Beginning: Research Market research for Consumer Financial Services Monitor conducted in Q3/2009 by Cimigo

Over position of Techcombank

Techcombank Introduction


Techcombank was established on September twenty-seventh 1993 with the first registered capital of 20 billion dong. Its purpose is to go the most efficient fiscal intermediary supplying fiscal merchandises, services every bit good as consultancy in banking field. Now the registered capital of Techcombank come up to 5,400 billion dong and the entire plus calculated at the terminal of 2009 was around 93,000 billion dong. The twelvemonth 2004 made a milepost when Techcombank changed from urban banking to national one. On the way of development Techcombank sold 10 % of its portions to HSBC in 2006. Thankss to the cooperation with HSBC, Techcombank made a dramatically success in both quality and measure and received many supports from its partnership including fiscal and human resources.

Techcombank is big corporate with about 260 dealing offices and more than 6000 employees. It presents in big metropoliss and urban aiming at developing retail web, offering diversified merchandises and services based on high engineerings approach. That helps the bank become one of the most successful commercial bank from 2006 to 2009. Below are some fiscal figures achieved through five-year period.

Table I. 2: Chief Financial indexs of Techcombank

Unit of measurement: VND billion







Entire ASSET


















Net income BEFORE Tax






Net income AFTER TAX






ROE ( % )

33.39 %

17.13 %

20.23 %

32.21 %

29.96 %

ROA ( % )

1.93 %

1.48 %

1.29 %

1.98 %

1.75 %

Beginning: Annual study 2004 to 2009- Techcombank

In 2010, Techcombank additions 150,000 billion dong entire assets and net income before revenue enhancement archives more than 2700 billion dong.

Vision and Mission


In 2010, the Chair adult male of the bank announced a transmutation message that is so ambitious in which Techcombank aspires to go the best commercial bank and first degree concern in Vietnam. Techcombank starts to transform its old concern system into dynamic one in the way of suppressing a new extremum.


In Techcombank ‘s transmutation, three missions are set for five twelvemonth development period 2010-2015. They are:

( 1 ) To be the preferable and most sure fiscal spouse of our clients, supplying them with a full scope of fiscal merchandises and services through a personalized/customer centric relationship.

( 2 ) To supply employees with a great working environment where they have multiple chances to develop, contribute and construct a successful calling.

( 3 ) To offer stockholders superior long term returns by put to deathing a fast growing scheme while implementing strict corporate administration and hazard direction best patterns.

Core values:

The success of Techcombank may be explained by many grounds in which the most of import is right scheme go arounding about five nucleus values:

– Customer foremost: Customer is ever right. Techcombank works difficult to offer and convey valuable fiscal merchandises to outdo meet client demands.

– Invention: Techcombank keeps acquisition and improving

– Teamwork: Techcombank extremely recommend teamwork spirit, encourage officer to give for the bank

– People development: Techcombank develops people to accomplish their best potencies and wages worthy for officers ‘ attempt.

– Accountability: Techcombank does whatever it takes to acquire what it has committed.

Techcombank organisation construction

Figure I. 2: Techcombank organisation construction

Beginning: Techcombank internal papers

Techcombank organisation is structured to divisions: concern units and service support units. Gross saless and Distribution is the biggest division of Techcombank with more than 4,000 staffs. The Bank now has 14 functional divisions with separate duties and mark under the CEO. Four divisions belonged to Governance/control support units are: Risk direction, Finance and Accounting, Legal and Compliance and Strategy and corporate development. These divisions are in charge of guaranting Techcombank system operated in smooth manner and appropriate with Vietnamese jurisprudence and accounting criterion. Six divisions on the left manus are concern units in charge of doing net income for the Bank. CIB, SME banking and PFS are established establishing on client cleavage. Transaction banking manages all sorts of fiscal fees while Gross saless and Distribution ‘s duty is widen the Bank ‘s web and gross revenues service. Under Gross saless and Distribution division is four concern parts which are divided harmonizing geographics for easy direction. Treasury is front office unit which undertakes the undertaking of pull offing all activities associating to foreign exchange, involvement rate, equity and trade good derived functions. Four divisions left are: Operationss, Technology, Human Resources and Marketing playing as service support units.

Lending merchandises for retail banking of Techcombank

Figure I. 3: Lending retail merchandise Matrix of Techcombank

Beginning: Techcombank internal papers


Current Retail Credit Process of Techcombank

Procedure debut

There are three sections joined straight recognition procedure as Branch, RCC, CCA with the undermentioned duties:

Branch: Branch is responsible for presenting, confer withing and steering client to register application and do certain of full-document sent to RCC for blessing. Besides, Branch has to verify fundamentally client KYC and client information, ( income, collateral, loan intent ) …

RCC: To look into the application full completion, eligibility and genuineness of application under TCB checklist, verify loan based on application surface and make blessing to the loan.

CCA: usher client to notarise loan papers and registry collateral enrollment, bill of exchange contracts and paperss, expense control

Figure II. 1: Retail recognition procedure in Techcombank

Beginning: Techcombank internal papers

Advantages and Disadvantages of centralized retail recognition procedure:

In Vietnam, there are 02 Bankss apply centralized recognition procedure are HSBC and Techcombank. This procedure theoretical account has advantages and disadvantages as the followers:

Advantages: There are struggle between concern development and hazard direction so that centralised recognition procedure can assist Bankss to command hazard better. Sale adult male can concentrate on sale to increase sale public presentation and client service. Bank board direction can set recognition policy instantly if necessary.

Disadvantages: In general, centralised recognition procedure will lengthen turn-around clip to supply recognition to imparting clients compared with rivals and subdivision directors do non hold determination right to O.K. a loan to clients.

Apply Lean Thinking in Retail Credit Process at Techcombank under clients ‘ position

In order to use Thin Manufacturing for Financial Services, I did a client satisfaction study with current recognition procedure and merchandise every bit good in Jun 2010 with figure of clients: 100 bing clients of Techcombank in Quarter I and II of 2010 in Ha Noi, Ho Chi Minh and figure of inquiry: 25 inquiries ( Appendix 01 and Appendix 02 )

Figure II. 2: Age of client in the study

Beginning: Customer study of this survey

There are 38 females, 62 males in this study and 85 % clients are from 20 to 40 old ages old. These clients are dynamic, successful and knowing so they have a really high demand with service quality.

Figure II. 3: Number of clients separated into merchandise sorts

Beginning: Customer study of this survey

From this study and other researches, I analyzed current retail recognition procedure based on three chief standards affected straight on retail recognition procedure as the followerss:

Value to the client

Key drivers of client in taking loaning service

In state of affairs that clients take a instead much attention in service as the research of Cimigo ( an independent squad of selling and trade name research specializers runing throughout the Asia Pacific part ) in Quarter 04 – 20009 and Quarter 01 – 2010 as order of Techcombank:

In Cimigo Consumer Financial Services Monitoring – One-fourth 04 – 2009 studies, they grouped client based on Derived Importance and Stated Importance and analyze key drivers for each group of clients.

Figure II. 4: Groups of clients

Beginning: Cimigo report Quarter 04 – 2009

The cardinal drivers of clients in taking loaning service sorted in order belows:

Figure II. 5: Cardinal drivers of client in taking loaning service

Beginning: Cimigo report Quarter 04 – 2009

Harmonizing to the consequences, cardinal properties which have possible to increase client ‘s overall satisfaction with the bank are:

( 1 ) Easy procedure of subscribing up for services

( 2 ) Staff responds rapidly

( 3 ) Overall quality of the service

However, current retail recognition procedure at Techcombank does non fulfill clients as consequences of Cimigo study in Quarter 01 – 2010. The grade for staff respond rapidly of Techcombank decreased.

Figure II. 6: Measuring the quality of recognition services

Beginning: Cimigo report Quarter 01 – 2010

Survey consequences for loan client satisfaction with current recognition procedure of Techcombank as value for clients

Figure II. 7: Value to client rating in client satisfaction study ( 1 )

Beginning: Customer study of this survey

68 % loaning clients do non cognize who is the chief contact point of Techcombank. Furthermore, when other rivals take about 5 – 7 yearss to O.K. a house loan or car loan, 76 % clients claim that it takes more than 10 yearss to pay out my car loan and 68 % claim that it takes more than 10 yearss to pay out my house loan. Almost clients feel that loan involvement rate of Techcombank is higher than some other Bankss and Techcombank loaning merchandises are rather hard to near.

Figure II. 8: Value to client rating in client satisfaction study ( 2 )

Beginning: Customer study of this survey

58 % clients feel that, service quality of Techcombank subdivisions is non unified. Some subdivisions have a good service quality but some others non. This issue is one of the most of import things that Techcombank has to take attention to be more competitory in the banking market. 74 % clients complaint about the papers demands. As their feedback, a loan application that Techcombank required is longer and more problem than other Bankss offered. Related to client services of Techcombank, most clients satisfy with attitude and support from Techcombank to confer with them the papers demand, Turn-around clip treating pricing ( more than 80 % ) and merchandise characteristics ( more than 90 % ) . Techcombank develops a really strong sale force and quite professional so that this is an advantage of Techcombank compared with other rivals ( province owned Bankss, some articulation stock Bankss ) . Interest rate and merchandise characteristics of Techcombank are rather competitory compared with other bank. Techcombank ‘s merchandise bundle is considered to be the most diversified in the market.

However, there is a disadvantage that makes client unsated is committedness of Techcombank to pay out a loan. 60 % clients complain that, Techcombank do non maintain Service-Leverage-Agreement ( SLA ) committed to client. This issue affects really bad on loaning service quality.

Procedure flow and clip holds

Figure II. 9: Procedure flow and Time detain rating in client satisfaction study ( 1 )

Beginning: Customer study of this survey

Related to procedure flows, there are many jobs raised by clients as the followers:

About 60 % subdivision staffs do non proactively unbroken clients updated on the position of their application. Customers have to name straight to Techcombank to cognize their application position. The grounds are: foremost, branch staffs focus on concern development to get new clients. Second, there are many new sale staffs that have non much experience on client service. However, more than 60 % clients feel happy when Techcombank ever try to keep a good relationship.

54 % clients feel uncomfortable when Techcombank staff ( RCC ) name them to verify personal information as an research worker. Branch staffs have a really good attitude to pull client to utilize banking service, nevertheless, RCC staffs are responsible for hazard control non concern development so RCC staffs client service accomplishment is non good

Techcombank rents a private notarize office to notarise client paperss. However, 78 % clients feel unhappy when they have to wait at CCA to notarise to finish disbursement paperss.

Figure II. 10: Procedure flow and Time detain rating in client satisfaction study ( 2 )

Beginning: Customer study of this survey

70 % clients said that, Techcombank evaluate their collateral lower than existent value and it affected on their recognition bound and they suggest Techcombank to accept consequence of external rating company.

60 % clients complain that, they have to supplement paperss many times to Techcombank when they want to acquire a loan. The ground is branch staffs do non confer with them carefully necessary paperss.

80 % subdivision staffs do non make bold to corroborate client Turn-around clip because of procedure flow and clip hold from RCC and CCA.

In general, 40 % clients was non happy with their experience at Techcombank, 52 % clients feel impersonal when utilizing Techcombank loaning services. With mount-to saddle horse signal, bing clients will non present other client to Techcombank because they are non satisfy with Techcombank service quality


Figure II. 11: Waste rating in client satisfaction study

Beginning: Customer study of this survey

Many clients complain to blow their clip with Techcombank procedure. 74 % clients have to supplement necessary loan paperss more than one clip before expense because of Techcombank staffs do non confer with them carefully completed loan application. 70 % clients complain about clip blowing to remain at CCA – Techcombank to notarise. Techcombank does non construct a comfy topographic point for them. Many clients ( 66 % ) said that, they have to run into at least 3 people of Techcombank for a loan so it takes much clip and they feel really unhappy for that. Besides, clients do non be updated position of their application and Techcombank did non maintain committedness of treating turn-around clip with them ( 62 % ) . And some clients ( about 40 % ) complain about clip waste for vacating loan contract because of loan involvement rate changing.

Apply Lean Thinking to analyse current Retail Credit Process at Techcombank

In order to specify jobs, step, analyze to happen out how to apologize retail recognition operation at Techcombank, I co-operated with some of my co-workers at Techcombank to roll up informations about the existent procedure at Business Center ( Hanoi ) and Cho Lon subdivision ( Ho Chi Minh metropolis ) , the two biggest subdivisions in Hanoi and Ho Chi Minh City of Techcombank in September, October and November of 2010.

As the survey, there were 314 instance incurred at two subdivisions in 3 months. All processes in subdivision took approximately 2 working – yearss for each instance. In the 314 instance, there were 15 instances in fact incurred before researched period, 39 % applications denied by directors of the subdivision ( 123 instances ) . Merely 99 instances if the last were approved by RCC. In other words, there were 77 instance were denied by CCA.

I continued analyzed based on the information of 99 completed expense instances reasoning 31 auto loan applications, 54 Auto-overdraft F1 and 21 house loan applications ( Appendix 03 ) .

Table II. 1: Average existent Turn-around clip to treat a loan at Techcombank

Actual TAT ( hours )
















Difference ( Fastest V. Slowest )




Beginning: Research of this survey

Figure II. 12: Average existent Turn-around clip to treat a loan at Techcombank

Beginning: Research of this survey

10.1 % applications were disbursed by assignment to have consequences of enrollment of security minutess that helps the procedure shorten approximately 1 % entire clip of all procedure ( entire is 37.49 hours for 99 applications ) .

The day of the month shows that it takes a long clip to O.K. a loan in Techcombank, particularly compared to rivals.

Table II. 2: Compare existent Turn-around clip to treat a loan among Techcombank and some rivals

Current TCB










Mortgage/ House









3- 4











3 -5













Beginning: Cimigo report Quarter 01 – 2010

Furthermore, I interview some internal experts for some remarks and suggestions about current procedure ( Appendix 04 ) .

The consequences display some non – added value stairss that cause waste from the research and interviews:

Merely 26 % loan applications can be supplement required paperss in one working – twenty-four hours ( less than 8 hours ) . In other words, about applications are incomplete, and many of them are instead hard to supplement. Reasons that causes the jobs are the excessively complex cheque list required paperss and the limited ability of RBO in confer withing and steering client for loan paperss readying.

Branchs bring manager difficult transcript client applications to RCC for confirmation and blessing so branch sale capacity is lessening, sale staffs take much clip on back-office work.

In RCC, all applications were evaluate in a same procedure although it is complied with the commissariats of the merchandise or an exclusion. So the standardize merchandise can non advance efficiency, doing loss of clip of both RCC and Branches.

22 % clients have to wait more than 4 hours to subscribe in all needed paperss ( exclude the instances have been approved in rule and prepared dossiers before ) because one CCA staff at the same clip serves about 10 clients from different subdivisions and he can non take attention all clients.

Customers have to run into straight at least 2 different people: RBO and CCA staff to finish their loan without direct debut from the first contact. It is non professional.

CCA has to look into conditions for expense for each loan and the needed paperss for each loan are different, that wastes clip and cause that CCA staff work manually.


After analysing current retail recognition procedure by utilizing Lean Thinking theoretical model applied to Financial Services, I recommend focused on below points:

Improve Value to client

The battleground in Financial Services is the client experience at the point of sale and in the journey through the procedures. In retail recognition procedure, value to client is expressed by turn-around clip to treat a loan, simple necessary applications, easy procedure of subscribing up for services, staff respond rapidly and merchandise diversify. So after analysing current state of affairs of imparting client satisfaction, in order to fulfill loaning clients, retail recognition procedure has to run into the undermentioned conditions:

There is one chief contact point of Techcombank with incorporate service quality in all subdivisions.

Techcombank staffs are professional and enthusiastic.

Customers do non hold to supplement needed papers many times.

In order to run into client satisfaction, I suggest some below recommendations

Document demand: Techcombank should unite RCC and CCA doc checklist to one checklist for every individual merchandise and promulgate, train to gross revenues adult male, RCC, CCA. Besides, prepare to roll up sufficient sales/performance informations of RBO, path in inside informations % uncomplete physician, % applications with complete physician provided and reexamine KPI/commission/penalty strategy for RBO if necessary.

Training: In subdivision, as analysing current retail recognition procedure, the longest clip used in procedure is the clip to supplementing paperss ( 74 % incomplete papers and clip for completion paperss submit to RCC for blessing and CCA for expense of subdivision seize 78 % turn-around clip ( TAT ) so Techcombank has to develop developing class to sale adult male: Know Your Customer ( KYC ) accomplishment, loan application analysing accomplishment, client confirmation accomplishment. With RCC, CCA should carry on preparation classs every three month for treating officer and develop KPI and inducements for them. If their work public presentation is linked to inducements or KPI they will make it better and increase work capacity in general.

HR Appraisal: Techcombank should develop KPI and inducements for confirmation staff, approver at RCC and treating officer, accountant at CCA to promote them to better capacity.

Improve Process flow and Time holds

Thin Thinking enables one to service clients faster and cut costs. One of cardinal rule to do Techcombank loaning merchandises to be more competitory is shorten clip holds and simple procedure flow. As client satisfaction study, most clients feel unhappy with current procedure of Techcombank ( centralized notarization, indirect rating, information confirmation ) and turn-around clip of loan ( make non maintain SLA, do non update position of loan processing ) . Furthermore, after questioning some experts, I suggest to use new retail recognition procedure and assign duties between sections as below:

Figure III. 1: Recommended new procedure


Branchs should hold sale support to assist RBO back office plant: file client papers, notarize and indirect enrollment.

Besides, this people can function clients when sale adult male is out of office.

However, Techcombank should cipher carefully figure of sale support that is necessary to maximise capacity. Sale support can be assigned to back up some subdivisions.

Besides, subdivision director has to command loan papers before directing to RCC and to makes certain that, merely completed loan applications will direct to RCC for blessing.

Sale directors should reexamine direction of sale adult male public presentation informations by consolidating KPI/commission/penalty strategy for RBOs. Besides, sale directors have to use punishment for duplicity to lower public presentation evaluation, expiration.

Retail recognition admin:

Re-engineer confirmation and blessing procedure ( Verify-Check-Approve ) a Remove one checking after Verification to shorten processing clip at RCC

Center of Credit Admin:

CCA will non subscribe recognition contract. This work is transferred to subdivision directors to subscribe off. CCA will be responsible for composing loan contract, expense control and expense. Document filing, notarising and indirect enrollment will be besides transferred to subdivisions.

Decrease Waste

The meat of Lean Manufacturing is all about extinguishing waste. Current retail recognition procedure of Techcombank creates much clip waste and procedure to do clients unsated with Techcombank service quality. The disadvantages of bing procedure are: most of loan clients are non satisfied with current recognition procedure of Techcombank when they waste much clip on Techcombank regulation/process.

Retail Credit Center:

Recognition procedure in most foreign Bankss in developed states has two stairss as rectification and blessing. However, Vietnam is a underdeveloped state and legal system is non stable and unified so I suggest keep confirmation measure so that Techcombank can command hazard with 2 stairss to command. So RCC should shorten procedure from 4 stairss to 3 stairss: rectification, confirmation, blessing. Correction squad receives loan applications from subdivisions in soft-copy and look into completing of necessary loan checklist. If completeness, rectification squad transportation application to treating officer. If non, rectification squad sends application back to subdivisions for implementing before verifying. Processing officers verify client information on surface of loan application and transportation to approver to O.K. loan application.

RCC and other related sections have to develop loan checklist. All subdivisions have to compliance with common standard checklist to roll up paperss from client. If sale adult male direct RCC incomplete loan application, RCC will give back to subdivision manager board to train their staff to be conformity.

Required clip to treat house loan is longer than car loan so Author suggest to divide RCC into two squads, house loan squad is people that have much experiences than car loan squad so we can shorten processing clip in general of RCC.


In the competitory banking market in Vietnam, the necessary to better service quality is going more and more of import. Retail loaning development is one of the cardinal activities to convey net income to Techcombank so in writer ‘ sentiments, Techcombank has to concentrate their beginnings on this issue to better retail recognition procedure to fulfill clients.

After making this survey, the strongest and most of import thing that Author realize and did in this survey is retail recognition procedure analysis based on Thin Thinking: Value to client, Process flow and Time holds, Waste with intents: Improve service quality offered to loan client, cut down 70 % turn-around-time of recognition procedure in Techcombank, better recognition application quality given by subdivisions in all system and increase capacity of back office sections.

Based on the consequence from this survey, writer suggests develop a undertaking squad to implement this undertaking to better retail recognition procedure at Techcombank with three stages: Do pilot in some subdivisions, Analyze the consequence from pilot stage, Implement in all system.

Furthermore, Techcombank can use Thin Thinking to better corporate recognition procedure to better service quality provided to corporate.