TOPIC: Banking services through financial statements

of Vietcombank (VCB)

 Members in group 3:

 Doan Phuong An – MSV: 11210208

 Nguyen Huu Tuan Anh – MSV: 11210519
 Phan Hoang Khuong – MSV: 11212924
 Pham Nam Khanh – MSV: 11219185
 Nguyen Huy Hoang – MSV: 11212356
 Bui Khac Hai Dang – MSV: 11218858
 Duong Quoc Hung – MSV: 11212456

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 INDEX:

Page
TOPIC 1
CONTENT 4
I. RAISING CAPITAL AND DEBT
1. Definition 4
2. Features 4
3. Comparison 5
II. DEPOSIT RECEIVING BUSINESS
1. Definition 5
2. CASA index 6
3. Comparison 7
III. CREDIT OPERATION
1. Definition 7
2. Main types 8
3. Credit growth rate 9
4. Loans to Deposit ratio (LDR) 9
5. Non-performing loan ratio (NPL ratio) 9
6. Provision for Credit Losses ratio 9
7. Comparison 10
IV. INVESTING
1. Definition 10
2. Features 10
3. Advantages 10
4. Some indicators in financial statements 11
5. Comparison 11
V. FOREX TRADING
1. Definition 11
2. Main types 12
3. Risks 12

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 4. Roles 12
5. Net profit of Vietcombank's foreign exchange trading income 13
VI. TRANSFERRING AND RECEIVING MONEY
1. In Vietnam 14
2. In aboard 14
a. From Vietnam to aboard 14
b. From aboard to Vietnam 15
VII. COLLECTION AND PAYMENT ORDER
1. Payment order 15
2. Collection order 15
VIII. TRUST SERVICE
1. Definition 16
2. Main types 16
3. Fees 16
IX. GUARANTEE OPERATION
1. Definition 17
2. Main types 17
3. Fees 17
4. Functions 18
DOCUMENTATION 19

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 CONTENT:

I. RAISING CAPITAL AND DEBT

1. Definition

This is one of the major operations in commercial banks. These activities

are reflected through capital and shown in detail. On December 31, 2021,
Vietcombank had total liabilities and owner’s equity of about 1.414 trillion
VND. Some items in the balance sheet of Vietcombank are shown below.

2. Features

Unit: Million VND

31/12/2021 31/12/2020

 Liabilities 1.305.555.194 1.232.135.113

 Amounts due to the Government and the 9.468.116 41.176.995

State Bank

 Deposits and borrowings from other credit 109.757.777 103.583.833

institutions

 Deposits from customers 1.135.323.913 1.032.113.567

 Valuable papers issued 17.387.747 21.240.197

 Other liabilities 33.617.641 34.020.521

 Owner’s equity 109.117.393 94.094.979

Total liabilities and owner’s equity 1.414.672.587 1.326.230.092

 The capital adequacy ratio (CAR) of VCB is always greater than 9,3%,
meeting the requirements of circular 41/2016/TT-NHNN. This CAR could
cover the risk in operating activities as well as the profitability of VCB.

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  With the net profit after tax of 21.939 billion VND in 2021, we could
calculate some indicator used to assess the profitability of VCB's assets and
equity:
Net income 21.939
 ROAA = = = 1,6%
Average Total Assets (1.414 .673+1.326 .230)/2

Net income 21.939

 ROAE = ' = = 21,6%
Average Stockholder s Equity (109.117+ 94.095)/2

 The financial ratio of VCB is higher than average in the banking industry
and has demonstrated that VCB used their capital efficiently.

3. Comparison

VCB Vietinbank Agribank BIDV

ROAA 1,6% 0,99% 0,75% 0,6%
CAR 9,3% 9,14% 10,2% 8,74%
ROAE 21,6% 15,9% 16,4% 13,7%

II. DEPOSIT RECEIVING BUSINESS

1. Definition

 This is a basic operation of commercial banks. The Bank receives deposits

from customers in the form of demand deposits, term deposits, savings
deposits and other forms. Banks receive deposits from individuals,
organizations, and businesses. The bank must return the principal and
interest to the customer when it is due or when the customer needs to use it
to withdraw money at the bank. In there:

 Demand deposit is a type of savings that does not specify the deposit
time as well as the fixed balance in the account. Customers of
demand deposits are mainly those who need to ask the bank to
preserve the money and will withdraw in the near future as soon as
there is a need to use it. Demand deposit accounts are still charged
interest at the interest rate set by the issuing bank, but not exceeding
1%/year.

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  Term deposit means a customer's money deposited at a credit
institution for a certain period of time as agreed upon between the
customer and the credit institution, with the principle of fully
returning principal and interest to the customer.

 Savings deposit is an individual's savings deposited in a bank for the

purpose of periodic interest. The interest rates corresponding to each
deposit term are announced by the bank. The terms are usually 1, 3,
6, 9, 12 months or more than 1 year.

 Items related to deposit receipt in the financial statements:

 Customer deposits
 Issuing valuable papers:
 Interest and fees payable
 Other payables and debts

 Below are the items related to deposit receipts in Vietcombank's financial

statements in 2021.

Unit: Million VND

31/12/2021 31/12/2020

 Customer deposits 1.135.323.913 1.032.113.567

 Demand deposits 367.149.083 307.026.182

 Term deposits 730.223.470 693.604.644

 Deposits for specific purposes 31.642.014 27.325.921

 Margin deposits 6.309.346 4.156.820

2. CASA index
 CASA (Current Account Savings Account) is understood as "demand
deposit". The term demand deposit means the currency that customers
actively deposit in the bank, are paid regularly, and enjoy low interest rates
(about 0.1 - 0.5%) calculated on a daily basis. CASA is an index
representing the competition of banks, increasing demand deposit interest
rates to attract customers.
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  The meaning of the CASA index:
 The CASA index is high, indicating that the bank's cost of capital is
low
 High CASA will affect the index NIM (Net Interest Margin) – High
profit margin, helping to improve net interest income
 A high CASA index shows that the bank has the ability to provide
credit services with low interest rates and has a competitive
advantage in the market
 When the CASA index is high, it shows that the bank is a unit with
good service quality, high technology investment, and modern
convenience for customers. That is, the bank has many attractive
value-added products, associated with demand deposit services,
attracting users to open accounts
 The CASA index also has an important meaning in securities
investment, helping investors analyze and assess the potential,
growth and development of that bank

 CASA index of Vietcombank (December 31, 2021):

Total demand deposit
CASA =
Total mobilized capital

Demand deposit + margin

=
Total deposit + Issuance of valuable papers

367.149.083+6.309 .346
= = 32.4%
1.135.323 .913+17.387 .747

3. Comparison

VCB Vietinbank Agribank BIDV

CASA 32,4% 19,5% 12% 19%

III. CREDIT OPERATION

1. Definition

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 Credit operations are operations in lending, discounting, and financial
leasing activities, in which, lending activities are considered the main
profitable activities of commercial banks.

2. Main types
 Based on purpose
 Commercial and industrial loans: Short-term loans, additional capital
for businesses operating in the field of trade, services or industry
 High-purchase agreement
 Agricultural loans
 Real estate-related loans

 Based on time
 Short-term loans of less than 12 months: Often lent for the purpose
of supporting working capital shortages for businesses
 Medium-term loans from 1 to 3 years: Often used for investment
purposes, procurement of fixed assets
 Long-term loans of at least 3 years: Loans for the purpose of
building houses, large investments
 Based on value morphology
 Money lending
 Lending by assets: Lending using fixed asset

 Based on the creditworthiness of the borrower

 Mortgage lending: A form of customers pledging property and
houses... valuable to receive loans
 Unsecured loans: The amount is based on personal reputation, the
procedure is quite simple
 Based on repayment method
 Installment loan: Customers will choose to repay the loan in a
certain amount of time
 One-time loan: The customer repays the loan and interest at the end
of the loan period

Unit: Million
NVD

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 31/12/2021 31/12/2020

 Loans to customers 934.774.287 820.545.467

 Loans to customers 960.749.955 839.788.261
 Allowance for loans to customers (25.975.668) (19.242.794)

3. Credit growth rate

 Credit growth is an important indicator of the bank, showing how much the
total value of money that the bank lends at the end of the period compared
to the number at the beginning of the period. The higher the credit growth,
the more banks lend and the more profits, but if the rate is too high can lead
to lack of management, non-performing loans will arise.

Total amount of loans at the end of the period

 Credit growth rate = Total amount of loans at the beginning of the period – 1

934.774 .287
= – 1 = 13.92%
820.545 .467

4. Loans to Deposit ratio (LDR)

 The LDR ratio is the total amount of money the bank lends to the customer
compared to the total amount of deposits from the customer.

Total amount of loans 934.774 .287

 LDR = Total amount of deposits = 1.135.323 .913 = 82,33%

5. Non-performing loan ratio (NPL ratio)

 NPL is the ratio between the total debt groups from group 3 to group 5,
divided by the total of customers’ outstanding balance. This ratio shows
how many vnd for every VND 100 loaned, customers will not be able to
repay the debt and corresponds to each level for the company to set up a
provision for difficult receivables.

Total NPL∈group3+ 4+5 743.995+ 965.987+ 4.411.146

 NPL ratio = Customers ' outstanding balance = 960.749 .955
=
0,64%

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 6. Provision for Credit Losses ratio
 Provision for Credit Losses is defined as an amount set aside to provide for
possible losses due to customers of a credit institution not performing their
obligations as committed.

Credit losses provision

 Provision for Credit Losses ratio = '
Custome r outstanding balance
25.975.668
=
960.749.955

= 2,7%

7. Comparison

VCB Vietinbank Agribank BIDV

NPL 0,64% 1,26% 1,71% 1%
LDR 82,33% 95,09% 83,1% 96,02%
Credit growth rate 13,92% 10,18% 7,77% 10,9%

IV. INVESTING
1. Definition
Investment operation is a profitable operation of commercial banks, in
which commercial banks invest in securities and contribute capital to
purchase shares of credit institutions and economic organizations.

2. Features

 This is a transaction in which enterprises and commercial banks agree to

buy and sell bonds that are eligible for trading on the stock market at the
price and time determined at the time of signing the contract.
 When credit growth was sluggish, even negative, banks turned to invest in
bonds to solve the bottleneck caused by liquidity stagnation.

3. Advantages
 Buying bonds:
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  Having the opportunity to diversify asset portfolios, invest in bonds
with high liquidity, low risk, attractive and stable returns.
 There is an opportunity to participate in the primary government
bond market in case they are not a bidding member or an
underwriter of government bonds.
 Selling bonds:
 Bonds can be sold at market price without waiting for maturity.
 There are more effective capital mobilization channels besides
medium and long-term loans at banks

4. Some indicators in financial statements

 NIM stands for Net Interest Margin or net profit margin. NIM is a
measurement that compares a financial institution's net interest income
generated from credit products with the interest paid on savings deposits
and certificates of deposit.
Net Interest Income
 NIM = Average Earning Assets

42.399 .617
=
22.506 .711+225.764 .546+2.776 .098+934.774 .428+170.604 .700

= 3.126%

 CIR is considered a measure for managers to evaluate in a general and

comprehensive way the business results of the owning bank. With a certain
cost, how does the business achieve business efficiency and if additional
costs increase/decrease revenue.
Total OpratingCosts
 CIR = Total Operating Income

17.574 .188
=
129.810+ 2.393.261−85.126+104.114+ 4.374 .820+7.407 .073+ 42.399.617

= 31%

5. Comparison

VCB Vietinbank BIDV

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 NIM 3,126% 3,2% 3,05%
CIR 31% 32,3% 31,1%

V. FOREX TRADING
1. Definition
Forex trading in the narrow sense is just trading the currencies of different
countries. In a broad sense, forex trading involves trading foreign
currencies and foreign currency documents in order to secure foreign
currency account balances to meet the payment needs of the economy and
seek to profit through exchange rate differences and interest rates of
different currencies.

2. Main types
 Forex cash trading is mainly related to tourism activities and has very
small sales compared to trading foreign currency transfers.
 Forex trading transfers are made thanks to orders transferred over the
payment information network. These designations credit to one country's
currency and debit to another country's currency. Money is transferred from
the seller's account to the buyer's account through wire transfers, bills of
exchange...

3. Risks
 Exchange rate risk: When a foreign currency depreciates in an excess state,
it will cause disadvantage.

 Market risk: Due to reactions from financial institutions to tangible or

intangible events leading to the judgment of future exchange rates or
interest rates, causing negative supply and demand in the foreign exchange
market.

 Interest rate risk.

4. Roles

 Increase the country's foreign exchange reserves.

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  Contribute to perfecting state macro policies on foreign exchange
management.
 Contribute to regulating supply and demand relations in the foreign
exchange market.
 Contribute to ensuring the stability of the local currency.
 Contribute to the effective use of foreign exchange resources of economic
organizations in particular and countries in general.
 Increase income for business entities.
 Risk dispersion in business activities.

5. Net profit of Vietcombank's foreign exchange trading income

Unit: Million
VND

  2021 2020

 Gains from trading of foreign currencies

 From spot currency to contracts 8.201.406 6.843.687

 From currency derivative financial

451.852 650.399
instruments

 From foreign exchange differences 370.112 471.478

 From revaluation of derivative contracts 669.968 6.541

  9.693.338 7.972.105

 Loss on trading of foreign currencies

 From spot currency to contracts (3.357.381) (2.913.034)

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  From currency derivative financial
(1.374.802) (1.068.516)
instruments

 From foreign exchange differences (536.789) (39.127)

 From revaluation of derivative contracts (49.709) (45.532)

  (5.318.681) (4.066.209)

 Total profit 4.374.657 3.905.896

VI. TRANSFERRING AND RECEIVING MONEY
1. In Vietnam

 Definition: Allowing customers to conduct transaction with other

individuals or organizations in Vietnam fast and safely, by accounts opened
in Vietcombank or transaction offices.
 Customers:
 Vietnamese
 Foreigners living and working legally in Vietnam

 VCB Digibank
 Created in 7/2020
 Besides making transactions in VCB offices or ATMs, VCB
Digibank is becoming more and more popular with customers
because of its convenience and security
 Designed to be user friendly with customers
 Supporting in transferring money 24/7 on mobile app or web
browser
 Can be used anywhere, anytime
 All the transactions and customers’ information are secured
strictly by Face ID, Smart OTP, ...
 Payments by QR code is more popular because of saving a lot
of time

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  VCB is trying to connect with service providers like electricity
corporations, financial companies, hospitals or schools, ... That
helps customers a lot in payments

2. In aboard
Because of having connections with many correspondent banks and
international transaction methods, Vietcombank can help its customers to
have a lot of options in transferring or receiving money abroad with the
lowest expense and shortest time.

a. From Vietnam to aboard

  Types of transferring:
 By interbank Swift
 By MoneyGram
 Transferring WON to Korea by cooperation with bank Mizuho in
Korea
 Customers:
 Vietnamese: transferring money for studying, healing, traveling, or
working, ...
 Foreigners or Vietnamese living in other countries in more than 12
months: have currency in their accounts or legitimate income that
can be transferred overseas
Note: Customers having legal income in VND can purchase
currency to transfer to aboard.

b. From aboard to Vietnam

 Types of receiving:
 By interbank Swift
 By MoneyGram
 By VCBR – VCB remittance company
 From America by Uniteller
 From America by TN – MONEX
 By RIA
 By XOOM

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  From Europe by BP Remit

 Customers:
 Vietnamese
 Foreigners living and working legally in Vietnam

VII. COLLECTION AND PAYMENT ORDER

1. Payment order: is a means of payment made by the payee who makes a
payment order and sends it to the bank that opened the account for the purpose
of transferring a certain amount of money in his account to a certain
beneficiary.

2. Collection order: is what the bank performs at the request of the beneficiary to
collect a certain amount of money in the payer’s checking account, then
transfer it to the beneficiary based on the authorization agreement in writing
between the beneficiary and the payer.

Note: They are often used in 2 situations:

 Domestic transactions having high value
 International transactions

VIII. TRUST SERVICE

1. Definition
Bank trust service is a financial service offered by a bank that acts as a
trustee on behalf of individuals or organizations to help them manage
assets, investments, and other financial activities.

2. Main types
 Asset management: The bank offers professional management of assets,
including securities, real estate, and other investment products.
 Estate planning: The bank's trust services also include estate planning,
which involves helping customers plan their financial future and ensure
their assets are distributed according to their wishes.

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  Custody services: Vietcombank provides custody services for customers'
securities and other assets, ensuring safekeeping and management of these
assets.
 Investment advisory services: The bank also offers investment advisory
services to help customers make informed investment decisions based on
their financial goals and risk tolerance.

3. Fees

 Asset Management Fees: For asset management services, the bank may
charge a fee of 0.5% to 2% of the assets under management per year. This
fee is typically calculated as a percentage of the total value of the assets
being managed.

 Estate Planning Fees: Fees for estate planning services can vary depending
on the complexity of the plan and the amount of assets involved. The bank
may charge an hourly rate or a flat fee for estate planning services, and the
fee may be adjusted based on the level of customization required.

 Custody Fees: The bank may charge a custody fee for holding securities or
other assets on behalf of customers. This fee can vary depending on the
type of asset being held, the quantity of the asset, and the custody
arrangement.

 Investment Advisory Fees: Vietcombank's investment advisory services

typically charge a fee of 0.5% to 1% of the assets under management per
year. This fee is usually charged as a percentage of the total value of the
assets being managed, similar to asset management fees.

 Other Fees: In addition to the fees listed above, there may be other fees
associated with trust services, such as transaction fees or account
maintenance fees.

IX. GUARANTEE OPERATION

1. Definition

 Bank guarantee is a written commitment of a credit institution to the

entitled party (the guarantor) on the performance of financial obligations on

17
 behalf of the customer (the guaranteed party) when the customer fails to
perform or improperly performs the obligations committed to the guarantor.

 The customer must receive the debt and refund to the credit institution the
money that has been paid on its behalf.

2. Main types

 Loan guarantee
 Payment guarantee
 Bid guarantee
 Contract performance guarantee
 Product quality assurance guarantee
 Guarantee completion of payment

3. Fees

 Guarantee’s fees in Vietcombank ranges 0,2% - 0,3% of guaranteed

amount. They depend on:
 Type of guarantee
 Amount of money involved
 Customer's creditworthiness

4. Functions

 Guarantees are tools that guarantee

 This is the most important function of the guarantee
 By committing to pay compensation when there is an incident of
breach of contract by the guarantor, the banks issuing the guarantee
have created a guarantee for the guaranteed person
 It is this guarantee that creates trust that makes contracts signed
easily and smoothly
 Guarantees are funding tools
 Through guarantee, the guaranteed person does not have to export
funds, recover capital quickly, get a loan or extend the payment
period for goods and services
 Although not directly funded as in credit, bank guarantees help
customers enjoy the same treasury advantages as in the case of loans

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19
 DOCUMENTATION:

 Báo cáo tài chính Hợp nhất năm 2021 đã kiểm toán.pdf

 https://chat.openai.com/chat

 https://www.topcv.vn/6-nghiep-vu-ngan-hang-thuong-mai-ban-can-biet#nhung-
nghiep-vu-ngan-hang-thuong-mai-ban-can-nam-ro-mot-so-nghiep-vu-khac

 https://1drv.ms/b/s!AlLh9LC9ltxslmGcFRPYVpEyxgM9?e=4fbape

 https://portal.vietcombank.com.vn/VCBDigital/2021/BCTN/pdf/vi/Cac-chi-so-tai-
chinh-co-ban.pdf

 https://portal.vietcombank.com.vn/VCBDigital/2021/BCTN/pdf/vi/Cac-chi-so-tai-
chinh-co-ban.pdf

 https://www.finhay.com.vn/casa-la-gi#chi-so-casa-la-gi-vi-du-ve-casa

 https://portal.vietcombank.com.vn/Personal/MoneyTransfer/Pages/Home.aspx?
devicechannel=default

 https://thebank.vn/blog/17389-uy-nhiem-chi-la-gi-va-uy-nhiem-chi-dung-de-lam-
gi.html

 https://thebank.vn/blog/18143-uy-nhiem-thu.html

 https://portal.vietcombank.com.vn/VCBDigital/2021/BCTN/vi/chi-so-tai-chinh-
co-ban-2017-2021

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