Enhancing the competitiveness capacity of joint stock commercial bank for foreign trade of Vietnam in terms of international integration of finance and banking

Although international economic integration has many difficulties, but in integration , individuals have many advantages in business and enjoy many other benefits. International integration on Finance - Banking gives commercial banks the right to participate equally in the currency trading market, the market for trading of banking services, regionally and internationally, in accordance with national laws and international practices. This is the liberalization and expansion of the banking market in line with international commitments

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s in terms of development and international integration, which can be understood as follows: Business competition is a competition between businesses that produce the same goods or provide a service in the same market with specific production and business secrets and superior management capacity and the ability to apply Science - Technology effectively ... to gain higher market share, with the goal of maximizing profits. - International competitiveness. Unlike national competition, international competition is a demonstration of the nation's capacity in the international arena. iii. Factors determining competitiveness. - Assessment of national competitiveness. So far, there are still many views on the factors that determine national competitive competence. But there were some relatively unified opinions on 8 factors that play a decisive role for the national competitive competence, namely: (1). The degree of openness of the economy ; (2). The role of the Government ; (3). Finance ; (4). Science - Technology ( Science - Technology ) ; (5). Infrastructure ; (6). Administrative capacity value ; (7). Labor; (8). Institutions. - Assessment of enterprise competitiveness. To assess the competitiveness of enterprises need to consider and analyze the basic elements of the object, then rank the competitiveness of this object. The elements of the object of interest, that is: + Field of Production - Business and the size of the business .         + Financial capacity, in which equity plays a crucial role . + Management capacity . + Scientific - technological capacity. + Quality of human resources ... Development of economic competition.             i. Origin of competition Human society, in the economy, among businesses ... also has similar "struggle" processes. But it is not a struggle to survive as in nature. Which is competing to survive and grow .              ii. Definition of competition. Competition takes place in almost all areas: natural, economic, social ... so the content of this terminology is wide and complex. Therefore, in this thesis, it is not possible to cover all fields, but only limits some basic contents of economic competition. Mostly competition between businesses, including commercial banks. From the statement above, in view of the thesis , the competitive economy can be understood as follows: Economic competition is a competition between entities, using specific tools (tactics) to win the most profitable Production - Business conditions, in order to gain absolute market share, with the utmost goal of profit maximization Economic competition has broader content than business competition. Along with economic development and market expansion, economic competition is also expanding, developing and increasing at a higher level. Classification of economic competition.                Competition classification is a combination of several criteria that clarify the scope, level and nature of enterprise competition. In this thesis, only the most general content, without in-depth analysis of business ethics in competition. For the reasons mentioned above, enterprise competition is classified according to the following criteria: i. According to economic sector. This type of competition is divided into two categories, intra-industry competition and competition between industries. ii.The level of competition.       By level, or level of competition , competition is divided into two categories: perfect competition and imperfect competition. iii. According to business ethics . [ 4 4 ]                                        According to business ethics, competition in economics is divided into two types: Legal competition and illegal competition. iiii. According to the market. [ 4 5 ] Compete in market or place of business . Kind of competition is divided into two categories: competition within the national and international competition. Competitiveness of enterprises in the market economy. i . Overview of Competitive capability of enterprises . Competitiveness of a business, is a combination of many different factors , or tactics. Combined are the factors of "material and intellectual". These two elements are initially of equal value. But in the development of competition, "intelligence" has a superior value. However, the author of this thesis thinks that the intellectual factor does not have a "universal" measure, so a visual comparison of "material" capacity will be a method of comparing and evaluating the Competitive capability of this thesis.. ii . Some basic criteria to assess enterprise competitiveness. - Financial capacity. Financial capacity is expressed by the total value of assets, used in the business of the enterprise, in which equity plays a core role. - Scientific and technological capacity. Scientific and technological capacity is the ability to apply the latest scientific and technological achievements to the production and business process of a business at a given time. - Business administration capacity. Corporate governance capacity is overall management solutions treatment, in order to achieve high efficiency in production - business. The operation of each business consists of many stages, connected by the system, from the beginning, until the product is completely consumed. - Quality of human resources.                               The quality of human resources is a combination of criteria showing the professional competence, job proficiency and productivity of each employee ... with assigned tasks. 1.2.2. Banking Competition and some criteria to evaluate the competitiveness of Commercial Banks. Origin and form of competition among commercial banks. i. Origin of commercial banks competition. Content competition among industries, in this thesis, the author mentioned in section "1.2.1", so in this section, the author only mentioned competition "within the banking industry". ii. Competitive development among commercial banks. Competition among commercial banks, is a form of competition within the industry. The objective of this type of competition is to find a high return, with limited time and amount of capital. iii. Competitive forms of commercial banks.                     Commercial banks in the market economy development, although the investment field are not the same, but revolve around a fixed axis is monetary, credit and services bank. The tactics that commercial banks implement are not the same, but are aimed at increasing profits in a finite time with a limited amount of investment. The current form of competition among commercial banks is: - Competing interest rates. - Expanding the operational network. - Competition for service quality. Some criteria to evaluate the competitiveness of commercial banks .  i. Financial capacity. ii. Scientific - technological capacity . iii. Business administration capacity. iv. Quality of human resources.   v. Annual sales and profit after tax. Meaning to improve the competitiveness and the downside of this process . Competition in commercial banking system .   Competition among businesses in the economy. 1.3. THE IMPACTS OF INTERNATIONAL INTEGRATION ON FINANCE - BANKING ON COMPETITIVENESS CAPACITY OF VIETNAMESE COMMERCIAL SYSTEM. 1.3.1. Basic content of International Integration on Banking - Finance. Overview of international economic integration. Economic integration International are the agreements open markets for goods - service, uniform tariff, free movement of capital, banking services ... based on the principle of consensus, between two or more countries. - Basic content of international economic integration. International integration of Finance - Bank as bargaining economy - financial, under which a number of institutions, commercial banks of the country, is entitled to do business in the country in the other, on the principles of the agreement between states national and international. The meaning of international integration on Finance - Banking. Firstly, international integration to the Bank is the basis for progressing to financial integration. Secondly, international integration in Finance - Banking, on the basis of large capital created, used dynamically, with a large "frequency", created conditions for industry - trade to be eligible for development. Thirdly, international integration in Finance - Banking is the basis for the domestic commercial banking system to access to international banks. Barriers in international integration. International economic integration with bilateral or multilateral agreements has been signed with high consensus, but not yet completely favorable in the implementation of the agreements. 1.3.2 Vietnam's viewpoint in International Economic Integration. [ 64 ] The concept of international economic integration is consistent from the Party, the Government to the entire people, including businesses, entrepreneurs, intellectuals ... With the viewpoints and actions in recent years, Vietnam has achieved successes. encouraging on the path of international economic integration. 1.3.3. The impact of international integration on banking - finance on Vietnamese commercial banking system. Contribute to innovating the economic thinking of Vietnam's banking system. Orientation for business innovation and service in the commercial banking system. Enhance the position of Vietnamese commercial banks in the international arena. 1.4 EXPERIENCES IN RAISING COMPETITIVENESS OF COMMERCIAL BANKS IN SOME COUNTRIES IN THE REGION. 1.4.1. Business administration model of some commercial banks. The China Construction Bank (CCB) The Development Bank of Singapore Limited (DBS). Experience of some Asian countries on reforming commercial banks in terms of development and competition. a/. Experience of Thailand on restructuring commercial bank system. b/. Experience of Malaysia . c/. Restructuring the banking system in Korea.        1.4.2 Experiences for VCB Experience from Thailand, Malaysia and South Korea on the reform of commercial banking system, can give Vietnam some experience in managing its commercial banking system.  Chapter 2: CURRENT SITUATION OF BUSINESS AND COMPETITIVENESS OF JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM IN CONDITIONS OF INTERNATIONAL INTEGRATION ON FINANCE - BANKING 2.1. OVERVIEW OF THE FORMATION AND DEVELOPMENT OF VCB. 2.1.1. Construction and development process [ 72 ]  Joint Stock Commercial Bank for Foreign Trade of Vietnam - VCB, is one of four commercial banks in the top group of Vietnam - Agribank, Vietinbank, BIDV and VCB. VCB is a reputable commercial bank. Being a commercial bank known by many countries in the region and the world with reliable international business function, being a good partner of many commercial banks in the world. 2.1.2. Organizing committee. - International transaction name JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM 2.1.3. Functions and duties. Tasks and functions of VCB's components are designed according to the model of advanced commercial banks in the region and the World . Components in the organizational structure, approved by the State Bank of Vietnam , become the organizational structure today. Duties and functions of the parts are clearly defined . Including: i. General Meeting of Shareholders; ii. Board of Directors (BOD); iii.Banning board. Besides general organizational models mentioned above, vertical, VCB organized civil apparatus model management reasons at the basis of main and each detailed branch. This organizational model, has been standardized by VCB. 2.2. BUSINESS SITUATION OF VCB PERIOD 2014 - 2018 2.2.1. Credit business.          Credit operations are divided into: capital mobilization and lending, investment. In the period of 2014 - 2018, the business results of VCB's credit business showed: Capital raising operation.          In the period of 2014 - 2018, the growth rate of VCB's mobilized capital, achieved positive results, according to [B2.3] comparison between years showing the results of capital mobilization of VCB, the years always growing:            CREDIT BUSINESS OF VCB PERIOD 2014 - 2018 [ B 2. 3]                                                                                          Unit: VND Billion                            Year Criteria 2014 2015 2016 2017 2018 Average Capital raised from the economy (A + B) 422,204 500,528 600,737 726,734 1,010,511 Compared to the previous year (%) 27.08 18.5 0 20.02 20.17 39.04 19.78 (A) Capital mobilized from economic organizations 195.981 224.731 268.049 328,484 472.919 Proportion (%) 46.42 44.90 44.62 4 5. 20 46.80 45.58 Compared to the previous year (%) 23.18 14.67 19.28 20.90 39.0 17.32 (B) Capital mobilized from the population 226.222 275.798 332.688 398.250 537.592 Proportion (%)                   53.58 55.10 55.38 54.80 53.20 54.42 Compared to the previous year (%) 30.66 21.91 20.63 19.70 34.90 22.72 Loans outstanding overall (1 + 2) 323,338 387,152 460,808 530,821 616,948 Compared to the previous year (%) 17.87 19.74 19.03 15.10 16.20 17.33 (1) Outstanding debt of financial institution 271.604 308,947 344.684 401.201 478.135 Proportion (%) 84,00 79.80 74.80 75.60 77.50 83.83 Compared to the previous year (%) 14.60 13.75 11.57 16.30 19.10 13.88 (2) Outstanding loans to natural persons 51.746 77,831 116.124 129,520 138,813 Proportion (%) 16.00 20.20 25.20 24.40 22.50 16.17 Compared to the previous year (%) 38.88 50.41 49.20 11.50 7.10 36.23          (Source: Annual report of VCB in the years 2014 - 2018) Lending service. Outstanding loans of VCB in the period of 2014 - 2018, the speed of continuous increase. The following year is higher than the previous year. The lowest outstanding debt in 2014 - 323 338 billion VND. The highest outstanding loans in 2018 - 616,948 billion VND. The average growth rate of outstanding loans in the period of 2014 - 2018 reached 17.33% / year. In general, capital mobilization and outstanding loans of VCB still grew steadily. Demonstrating the competitiveness of this commercial bank has reached a fairly high point, attracting customers, recorded in the Vietnamese market. Bad debt. BAD DEBT OF VCB FOR THE PERIOD 201 4 - 2018 [ B 2. 5]                                                                       Calculation unit: VND billion                  Year Criteria 2014 2015 2016 2017 2018 Bad debt (%) 2.31 1.79 1.46 1.1 <1.0           (Source: Annual report of VCB during 2014-2018) According to the table above, the bad debt ratio tended to decrease gradually from VND 2.31 billion in 2014, to less than 1 billion in 2018. The above reported figures show that VCB's credit management results in the period of 2014 - 2018 are very positive. 2.2.2. Banking services.                Banking service is a derivative operation of a commercial bank, in the context of development of science - technology and customer needs in a market economy. Services offered by commercial banks are divided into two categories - wholesale and retail services. Credit services. VCB's credit services are analyzed on two components of credit operations, namely capital mobilization and lending, in the latest two years 2017 and 2018, separately analyzing each block, which the retail sector surplus and lack of capital in wholesale sector. The situation of "excess, lack" of mechanics as above is normal. VCB may adjust by operations. Card service of VCB The card service of VCB has been continuously and steadily growing in recent years. Especially, the international card business, from the right place through the correspondent banks, to VCB has full autonomy in issuing, offering and paying. Electronic banking services.          To increase market share of electronic banking, VCB has promoted the utilities of the above services to customers in Vietnam market. Since launching the service in 2009, with the number of 1.8 million customers, it has increased to 9 million customers in 2016. By 2018, it reached 13 million customers. With an average growth in the period of 2014-2018 reached 42% / year. International money transfer service .  Recently, each year the overseas remittance service brought VCB a turnover of 1–1.6 billion USD. The average growth of remittance revenue of VCB reached 6% / year. In particular, in 2016, VCB remittance amount increased by about 7%, reaching 1.64 billion USD. 2.3 FINANCIAL CAPACITY AND BUSINESS MANAGEMENT OF VCB. 2.3.1. Financial capacity of VCB in the period of 2014 - 2018.              In the last two years, equity and liabilities of VCB have continued to grow steadily: OWNERS 'EQUITY AND LIABILITIES OF VCB IN THE PERIOD 2017 - 2018 [B2.8]                               Calculation unit: VND billion                  Year Criteria 2017 2018 Compare Amount of money Proportion (%) Amount of money Proportion (%) Amount of money Ratio (%) 1. Equity capital 51,289 5.0 60,788 5.7 9,499 18.52 2. Liabilities 981,023 95.0 1,010,511 94.3 29,488 3.0 3. Total Business Capital - Liabilities and Equity 1,032,312 100 1,071,299 100 38,987 3.8           (Source: VCB Balance Sheet dated December 31, 2018) Figures in the Balance Sheet of 2017 and 2018 show that VCB's equity only accounts for 5.0 - 5.7%, while "liabilities" account for 94.3% - 95.0% is very high. This is a weak point of VCB's financial capacity at present. Distribution of equity to commercial banks and credit institutions. VCB always focused on ensuring the maximum safety of business capital, under the "risk dispersion" approach. Therefore, in parallel with investing capital in a number of other commercial banks, VCB also established a number of subsidiaries, to trade in traditional and newly launched services on the Vietnamese market. Evaluation of VCB's financial capacity.           In order to evaluate VCB's financial capacity and performance, it is necessary to compare with other banks in the same block. Through this result will have to comment objectively on VCB, and evaluate solutions that VCB has been carried out, overcoming the existence , in the business to become commercial banks in the top first large commercial banks in Vietnam The current. SOME FINANCIAL INDICATORS OF THE TOP 4 COMMERCIAL BANKS IN VIETNAM [ B 2. 10] (Unit: VND billion)         Criteria VCB BIDV Vietinbank Agribank The total value of assets   787,907 1,006.404 948,699 1,001,204 Equity 48,102 44,144 60,399 49,231 Outstanding credit 460,808 723,697 721,798 791,450 Capital raised 600,737 797,689 870,163 924,000 Profit before tax 8,523 7,709 8,569 4,212 Bad debt (%) 1.46 1.95 0.93 1.89 ROA (%) 0.94 0.67 1.00 0.36 ROE (%) 14.69 14.70 11.80 7.45 CAR (%) 11.13 > 9.0 10.40 6.70 LDR (%) 76.71 80.85 82.95 81.58 Profit after tax 6,851 6,229 6,858 3,388 (Source: Annual Report & Financial Statements of 4 Commercial Banks in 2016) 2.3.2. VCB's governance capacity. Managing human resource Most of the management staff of VCB have a Master's degree or higher. Of which over 70% graduated from universities, at prestigious universities at home and abroad. Staff quality is controlled input, according to criteria that are standardized by the advanced level of Vietnam and the leading international commercial banks. Business administration.               Business management is essentially seeking solutions to ensure safety and efficiency in the business activities of economic entities. In fact, the business of VCB in the past decades has chosen the right direction, which is the earliest approach to the "business management technology" of advanced commercial banks in the world. 2.3.3. Scientific and technological capacity.   VCB's science and technology capability is highly appreciated among Vietnamese commercial banks. VCB has a modern and uniform information technology (IT) infrastructure system, which is remarkable in the system of Vietnamese commercial banks. 2.3.4. Trademark of VCB . VCB's brand name has been affirmed in Vietnam market. The overall brand and each sector of VCB have been recognized and honored by many international Finance - Banking organizations. SOME FINANCIAL INDICATORS OF VCB - 2018 [ B 2. 12]                                                                                                 (Unit: billion USD)       Criteria Value Equity   2.4 billion USD Market capitalization 8.7 billion USD The total value of assets 46.2 billion USD Outstanding credit 24.2 billion USD Total raised capital 31.5 billion USD Profit before tax 506 Million USD Card issuing service 16.3 Million cards issued ATM & POS network 2487 ATM & 47,030 POS Electronic customer service 13.1 million customers use Foreign currency trading 45.1 billion USD International payments $ 69.4 billion (Source: VCB Report - May 2018) The finance - business indicators in the table above, show that VCB is a brand capable of operating in a market economy. VCB's competitiveness is good. This brand has always been "fostered and embellished" to develop sustainably in competition and international integration .      2.4. ASSESSMENT OF BUSINESS PERFORMANCE AND COMPETITIVENESS OF VCB (2014 - 2018). 2.4.1. Business efficiency. Business strengths of VCB. INCOME COST AND PROFIT OF VCB (2014 - 2018) [ B 2. 13]                                                                                         Unit: Billion VND                Year       Criteria 2014 2015 2016 2017 2018 Average 1 / Total operating income 17,304 21,202 24,880 28,859 38,644 Compared to the previous year (%)                11.59 22.53 17.35 15.90 33.90 20.25 2 / Net interest from lending                          12,009 15,453 18,528 17,208 25,415 Proportion (%)                   69.40 72.88 74.47 59.62 65.76 73.73 Compared to the previous year (%)          11,38 28.68 19.90 0.92 47.60 16.36 3 / Net interest from service activities             1,517 1,873 2,107 5.115 6,716 Proportion (%)                  8.77 8.83 8.47 8.69 17.37 9.30 Compared to the previous year (%)            -6,32 23.47 12.49 242.7 6 31.90 7.53 4 / Total cost -6,849 -8,306 -9,95 -13,228 -11,650 Compared to the previous year (%)                9.69 21.27 19.79 32.94 0.88 14.10 5 / Profit before risk provisions 10,436 12,896 14,929 11,021 18,016 Compared with the last year (%)          12.66 23.57 15.76 -0,738 63.40 14.15                                                                          (Annual report of VCB) Profitability and income of VCB.      The profitability and income of business entities are an important criterion to assess the viability and development of enterprises in a market economy. The profitability and income of an enterprise is a combination of many components, in which business capital and management capacity of business leaders are ranked first. With the above reasons, when researching the competitiveness of VCB today, it is impossible not to analyze the above factors. About profitability. Through the analysis of performance and business safety indicators, all four criteria: ROA, ROE, CAR and LDR, Joint Stock Commercial Bank for Foreign Trade of Vietnam, are all at a level exceeding the prescribed level of the State Bank of Vietnam. VCB is a commercial bank in the direction of sustainable development. Competitiveness of VCB. 2.4.2 Some existences and limitations. - The total value of VCB's assets is still low. In terms of competition, business capital is a very important factor. Low capital means restrictions on investment and business expansion. - Capital mobilized is low and so outstanding loans of VCB are low.          - VCB's profit before tax is not much higher than Vietinbank , lower than that of BIDV and Agribank. - VCB not have enough capacity financing and the " necessary condition " for application use information technology and applying these advances in governance of commercial banks in the world advanced to the bank's business administration.          2.4.3. Cause of the above situation. - The business autonomy of VCB is limited. - The charter capital of VCB is very low, but it is slowly supplemented . - VCB has not been proactively calling for a "strategic shareholder", so the ability to increase equity and therefore expand investment, implement new

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