Professional Documents
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Tài Liệu Mb Bank
Tài Liệu Mb Bank
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Chapter 1: General introduction of Military Bank and their business operations
1.1. The process of formation and development
1.1.1 Banking overview
- Full name: Military Commercial Joint Stock Bank
- Military Commercial Joint Stock Bank, abbreviated as Military Bank, abbreviated as MB,
is a joint-stock commercial bank in Vietnam, an enterprise under the Ministry of Defense.
As of 2018, the bank's charter capital was VND 21,605 trillion 1, and the total assets of the
bank in 2018 were VND 362,325 trillion. The main shareholders of Military Bank are
Viettel, State Capital Investment Corporation, Vietnam Helicopter Corporation, and Saigon
Newport Corporation. In addition to banking services, Military Bank is also engaged in
securities brokerage, fund management, real estate trading, insurance, debt management,
and asset exploitation by holding a controlling stake in the bank, and a number of
enterprises in this field. Currently, Military Bank has a nationwide network with over 100
branches and over 190 transaction points spread across 48 cities and provinces. The bank
also has a representative office in the Russian Federation, and branches in Laos and
Cambodia2.
- MB develop a strategy for the new period 2022-2026. In the coming time, MB sets out the
motto "Digital Acceleration; Retail Breakthrough; Safety - Efficiency", continuing the
vision "MB is the most convenient bank, making MB become the "No. number, ranked in
the Top 3 retail banks in the Vietnam market", upholding the principle of "Respect of the
law".
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According to Colonel Le Cong (2018) - The former chief executive of MB.
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03 branches in Laos, and Cambodia, 01 representative office in the Russian Federation
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1.1.2 Organization structure
In Military Bank, there are several departments with different functions to support each
other.
Appraisal Division: Appraisal of credit options for all customers in the whole system;
System administration on organization, implementation of appraisal of credit granting plans
for customers. (MB.AMC3)
Executive Board: As the governing body for MB's daily activities, organizing the
implementation of business strategies and operational strategies to achieve the goals and
plans approved by the General Meeting of Shareholders, the Board of Directors. governance
through.
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MBAMC is a subsidiary of the Military Commercial Joint Stock Bank with the task of recovering
bad debts for the purpose of making financial and credit activities healthy and assessing asset
valuation: an appraisal of MB's loan security assets.
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Risk management division: is the body that helps the CEO control all risks arising in
business activities, focusing on credit risk, liquidity risk, market risk, and operational risk.
and legal risks. The internal inspection and control division is the agency that establishes,
maintains, and develops a reasonable, safe, effective, and law-compliant internal inspection
and control system.
Business blocks: are intensively organized by customer and market segments, including:
- Funding and currency trading division
- Corporate and Institutional Banking (CIB)
- Small and medium enterprises (SME)
- Block of individual customers (RM)
- Board of Investment
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1.2 Actual situation of business operations at Military Commercial Joint Stock Bank in
the period of 2021-2022
Financial Statement show that in 2021, MB Bank will reach nearly VND 37,000 billion in
total operating income, up 35% over the previous year. Which, net interest income reached
more than 26,000 billion dongs, up 29.2%; Net profit from non-interest business activities
increased by 51.5%. Thanks to strong digital transformation, the bank's operating costs were
controlled, growing much lower than revenue growth (operating expenses increased by
17.2%). In addition, good credit quality and high bad debt coverage help prevent the bank's
provision expenses from increasing too sharply (Provision expenses in 2021 increased by
32%, equivalent to the increase in total income). After deducting expenses, MB Bank
recorded a pre-tax profit of VND 16,527 billion for 2021, an increase of 54.6% compared to
2020, and ranked fourth in the whole system, after Vietcombank, Techcombank and nearly
catching up with VietinBank.
By the end of 2022, MB's consolidated pre-tax profit reached VND 22,729 billion, up
37.5% compared to 2021; in which, the bank's pre-tax profit was 20,318 billion dong, up
41.1% over the previous year. Profit before tax of member companies reached VND 2,411
billion, contributing 12% of the group's pre-tax profit.
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Bank profit ranking in the period of 2021-2022 (Unit: Million VND)
Chapter 2: Overview about retail business model of Military Bank – Tan Cang Branch
and how retail banking department (or calling customer relationship manager units)
works
2.1 The retail business retail of the Military Bank – Tan Cang Branch
Deploying newer and more dynamic and deeper business models for customers in 3
segments: Retail (S&T), SME, CIB, continuing to promote the effectiveness of Treasury
Division...
MB Bank has been operating in the field of capital mobilization, credit granting and related
banking and financial services for military customers and other economic sectors. Besides,
MB has also developed and diversified many other financial products and services such as
fund management, securities brokerage, real estate business, asset exploitation, debt
management, insurance...
Capital mobilization
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Mobilizing capital in the form of deposits of organizations, individuals, and credit
institutions in the form of demand deposits, term deposits, savings deposits... Issuing
certificates of deposit, signing bills, bills, bonds and other valuable papers to mobilize
capital from domestic and foreign individuals and organizations. Borrowing capital from
credit institutions, domestic and foreign credit institutions, from the State Bank in the form
of refinancing.
Investment activities
MB Bank invests in areas such as: Contributing capital to buy shares in enterprises and
credit institutions. Contribute capital with foreign credit institutions to establish joint
venture credit institutions in Vietnam. Invest in joint ventures, contribute capital to
cooperate in investment and development of projects in accordance with the law.
Insurance
MB provides life insurance, non-life insurance, reinsurance and other types of insurance in
accordance with the law.
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derivative services including: interest rate derivatives, foreign exchange, currencies and
other assets. And other financial and banking activities permitted by the State Bank.
2.2 How retail banking department in Tan Cang Branch (or calling customer
relationship manager units) works
Retail banking 4
breakthrough is one of the long-terms goals of MB. Retail banking is a
place where individual customers can come to transact at the bank's transaction points to
perform services such as savings deposits, checking accounts, mortgage loans, credit cards,
etc. debit card and other associated services. Retail banking is banking services provided to
customers who are the general public, usually on a small scale and through branches, in
contrast to NHBB services, which are banking services for institutions. Financial and
banking services are offered in bulk.
Individual customers – the most potential audience of this banking model. The expansion of
branches needs to meet the demand for multi-functional banking services. From there,
customers can experience all the products and services available at the branch simply and
easily.
Besides, the services that retail banks provide also need to be modernized step by step to
provide the best services. From a modern, friendly transaction space to a system of
machines such as automatic ATMs... will be a timely addition to retail banks to be able to
win the hearts of customers.
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According to the concept of the WTO: “Retail banking is a place where individual customers can
come to transact at the bank's transaction points to perform services such as: Saving money and
checking accounts, mortgages. loans, credit card services, debit cards and other related services”.
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- According to specific products: traditional/flexible withdrawal/retirement/for children
/Online/ Mobile,...
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- ID card/Passport of the person authorized to transfer money. A legal power of attorney in
case the remitter is an authorized person
- Other relevant papers
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bank so that the bank can repay the depositor. The interest earned from the interest rate
difference will help the bank offset and cover operating costs.
3.2 Loans for household businesses at Military Bank - Tan Cang Branch
3.2.1 Concept
Loans for household businesses are a group of credit products that support capital to help
customers supplement their working capital or invest in development to buy machinery,
equipment, means of transport, upgrade facilities, and invest in production and business
activities. facilities, factory expansion…
3.2.3 The actual situation of lending for household business at Tan Cang Branch
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The current status of production and business loans for science and technology at MB- Tan
Cang Branch is providing credit to more than 50 individual customers with product-
Production and business loans. The store operates widely in all districts in Ho Chi Minh
City. Which, more than 70% of customers have operating areas in Tan Binh and Tan Phu
Districts with the main business of trading in fabric, and ready-made clothes, at the Tan
Binh wholesale market, "silk road",... The Branch's main loan balance for production and
business focuses on trade and commercial production of consumer products,...
The main feature of these individuals is that trading activities mainly take place between
individuals and individuals. Simple and small business form. The operational structure
includes the household head, sales staff, and delivery staff. Because household businesses
trade with each other, the cash flow between individuals is difficult to manage. In order to
be able to distinguish between cash flows from business activities of household businesses,
or cash flows from other purposes, it is necessary for credit appraisal officers to understand
the methods and methods of doing business with the group client. Therefore, the biggest
difficulty in risk management in production and business lending for individual customers is
cash flow management and loan use purposes. Although at present, lending for production
and business for science and technology at MB Tan Cang Branch does not have overdue
debts, debts to pay attention to, bad debts, etc. However, a hot growth situation is happening
warning signs for MB Tan Cang and MB in general. Reason: Firstly, lending for production
and business is very difficult in managing customers' capital use purposes. For example, for
a home loan, we can easily check that the customer's intent is real by doing a reality check.
However, for production and business loans, it is impossible and very difficult to evaluate
the use of loans by customers. Secondly, business loans are simple and convenient products
for customers who need to use capital in a short time without having to prove the purpose of
the loan. Thirdly, the economic trend increasingly encourages people to start-up, do
business, and create profits for the economy.
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3.2.4 Factors affecting the efficiency of household business lending for individual
customers
Customer's capacity: Including financial capacity, market capacity, production capacity,
customer management capacity, etc., which directly affects credit performance. Whether a
credit is repaid on time or not depends greatly on the capacity and level of the customer in
the business. This is a decisive factor in whether customers use loans effectively or not. If
the customer's capacity is limited, cannot correctly predict the fluctuations of market
demand, the ability to analyze, evaluate and forecast changes in the business environment
are low, the professional level is not high, use Inefficient resources, old and outdated
technology, low management level, etc., the production and business efficiency certainly
cannot be high, the competitiveness is low, the ability to generate revenue sources for Bank
debt is limited. Thereby affecting the efficiency of production and business lending and
service provision of the bank.
Ethical behavior of the customer: In a credit relationship, the customer's moral quality is a
decisive factor in the goodwill to repay the debt as well as the level of honesty and this
determines the customer's debt repayment activities. Therefore, it also affects credit
performance.
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Secondly, collecting information related to customer activities. Based on the content of each
type of customer appraisal report, the information needs to be collected appropriately.
Information sources can be collected through customer records stored at MB, Credit
Information Center - CIC, through competitors, customers' partners, and other media such
as the Internet, newspapers…
Appraisal content
- Evaluation of legal documents: verifying the validity and legality of household
registration, ID card, marriage registration certificate, customer's passport, business
registration license...
- Appraisal of customers' loan use purposes include: Check if the customer's business item
is consistent with the business registration certificate; Evaluate the feasibility of the
production and business plan built by the customer to estimate the reasonableness of the
selling price, purchase price and other costs: management, delivery, transportation, loading
and unloading, warehousing , vouchers, depreciation, brokerage commissions... according to
the reference prices in the market; Verify the implementation progress of the business and
operation plan and the amount of capital needed to supplement the business and operation
plan
- Assess the financial situation and source of income to repay customers. Based on the
information provided by the customer, RM staff conducts an appraisal of the practicality
and value of the assets owned by the customer, the investments, and the financial support
resources for the customer. to assess the financial viability of the client. Verify the
customer's monthly income source to ensure the customer's debt repayment source: income
from business activities, salary income, rental income, and income from capital contribution
activities. Assess the living standard and determine the family's living expenses in order to
assess the financial ability and the remaining accumulation level used to repay the loan,
thereby concluding the customer's debt repayment ability.
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Chapter 4 : The general process of lending activities for household business and
analysis a realistic document of household business loans
4.1 The general process of lending activities for business household individual
customers includes:
Sour
ce: Design by author Nguyen Ngoc Huyen Nhi
Step 4: Disbursement
The entire "credit" contract, after being fully approved and signed, will be reviewed and
disbursed according to regulations.
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The Bank drafted the Contract liquidation minutes, both parties signed the Contract and kept
the records, and at the same time delivered the security measures to the customers.
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- MB has many credit products, but in this case, RM staff offer him a Super preferential
business loan package with interest 8,5%/year, +/- 1,3% floating rate.
- Campaign code: 1230002 KHCN_CT UU DAI CV SXKD 15000 TY 8.5 PT
- Principal debt: 11 months, interest debt: 1 month
The steps for a lending activities of the customer Tran Ngoc Thanh
Firstly, Credit specialists will conduct customer due diligence. An appraisal is a process by
which a credit officer reviews the accuracy of the provided customer profile, and compares
and verifies the information. From there, determine whether the customer is suitable for the
bank's lending conditions. The credit officer may ask additional questions to the customer
himself or to those involved and ask the client to add documents if missing. The customer
needs to provide legal documents such as an ID card; Certificate of business registration,
confirmation of having a business; Confirmation of marital status.
Secondly, customers have to sign Loan application letters; Other relevant documents. The
RM staff will collect this document and then make the following stages. CIC will be
checked for both the new and old ID number, Business registration number… to decide
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whether he can be getting a loan or not. RM staff will go to the business location and have a
real appraisal. The customer has to provide: Sales Invoices, Economic Contracts, Orders
Goods, Invoice list, Delivery and delivery minutes, Goods import plan, ... which clearly
specifies the name of the supplier, the type of goods purchased, the payment amount.
Parallelly, collateral also be appraised by MB.AMC to determine the real value and if this
collateral has any unpermitted condition.
The factual assessment provides the following information:
Based on TB 2161 dated 12/05/2021, he is the subject that is applied to the Flexible
business loan program. Based on the household business registration certificate No.
41W8065382 registered for the first time on 20/02/2023, household business name:
HOUSEHOLD BUSINESS TRAN NGOC THANH with the profession about Trading
bamboo, cork, timber, and processed wood, the customer is the sole representative. When
the RM has looked up the household business, it still works normally.
When the RM has looked up the household business, it still works normally.
From the reality appraised, the credit officer has some business performance assessments:
Operation method follows the stages of from customer orders to input confirmation to
delivery after 30-45 days and then use the winch/ crane to load it onto the truck and take it
to the workshop. In this period, the customer will spray against termites and insects,
duplicate, cover with canvas, and end with the stage of sales (Semi-monolithic or semi-
circular or 5x10cm rods; 10x20 cm. Length depends on type 2m - 3m - 5m, trash
wood/sawdust ). They use a 2.5 tons tow or crane to put into the finished product sawing
CD and deliver to the customer.
The customers have some individual input who specialize in importing wood such as Tuan
Anh Wood, Hoang Phat Wood, Wood Phu Thanh, and Thanh Binh ..., customers will
receive goods at Cat Lai port, Binh Duong port, after 30 -45 days of ordering, 100%
payment on receipt of goods.
The Output includes households trading in wood, and furniture, companies in Ho Chi Minh
City, Binh Duong, and neighboring provinces such as Cuong Nga, TT Decor, Nguyen Kim,
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Architecture Green, Bach Nguyen Store, SQL Company... => the output variety is relatively
stable and continuous.
From actual appraisal, this business household has the result following. Based on the
customer's sales diary from 23/02/2023 to 01/03/2023, the average monthly revenue was
2,421,428,571 VND/month; cost of goods sold was 1,816,071,429 VND/month (accounting
for ~ 75% of revenue); labor expenses was 120,000,000 VND/month (10 employees:
workers, drivers, porters...); shipping cost: 80,000,000 VND/month; tax expenses
(terms/licenses): 83,333,000 VND/month; workshop/store rental: 35,000,000 VND/month;
other expenses (electricity, water): 30,000,000 VND/month; average monthly profit:
340,273,810 VND/month (profit rate 14%)
The proposed business unit to record the customer's income as 340,273,810 VND/month is
appropriated and conforms to TB 2161.
Thirdly, after analyzing the business situation, RM will collect all the documents and then
apply them to HO, HO is the unit that decided whether the loan is committed or not.
Maximum 4 hours HO has to have a decision that this case is approved or not.
RM staff will inform the approval to customer and prepare for the disbursement, and then
the customer will sign into the relevant records.
Disbursement is the final step of the loan process. After receiving the loan decision, the
bank will proceed to disburse the amount you want to borrow according to the agreed
contract. The disbursement can take place once or many times depending on the loan case.
Depending on the loan purpose of each customer, the method of disbursement will also
vary. Accordingly, some popular disbursement methods today are as follows:
Cash disbursement: customers go directly to the bank and receive cash;
Disbursement via account transfer: the bank will transfer the disbursed amount to the bank
account of the loan beneficiary (who is the Customer or the supplier of goods and services,
the seller of Real Estate, Vehicles of Transport, etc.). load).
In addition, RM staff need to take care of the customer after the transaction. In the event
that a loan incurs bad debt, bad debt, etc., the individual customer relationship specialist
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must be in charge of transferring debt groups, handling early debt collection, urging
customers to repay, or initiating lawsuits to Debt collection when needed.
Registering credit for all customers according to the issued regulations, supporting all users
nationwide to check CIC quickly.
● Aggregate information on bad debts of individuals or organizations. Then the CIC
system will process and store the credit information.
● Prevent and limit possible credit risks to the lowest level.
● Has the right to require banks and credit institutions to send customer profiles so that
CIC can give credit scores to each individual and business organization.
● Providing credit products and services in compliance with Vietnamese laws.
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recovery; Consulting on Property Appraisal; Asset Management, and Exploitation. The
strong growth in both scale and field of operation, constant innovation and improvement of
labor productivity, etc. has helped MBAMC to become one of the leading prestigious AMC
companies of commercials bank.
Debt recovery and settlement
The company was born to serve the needs of debt management and asset exploitation of the
Military Bank, expand trading relationships, collect debts, and deploy debt trading from
other credit institutions. healthy and smart transparency of the financial situation, in line
with the strategy to encourage debt cleaning in the banking system in particular and the
national economy in general.
Consulting on Property Appraisal
MBAMC is one of a number of valuation companies with full legal functions and
professional capacity to meet the needs of customers for different valuation purposes.
Property valuation services meet many practical needs with different purposes such as
buying - selling, borrowing capital, contributing capital to joint ventures, equitization,
proving assets... value assets, and making the best decisions for your business.
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- Investment consulting project management.
The project management unit of the Military Commercial Joint Stock Bank is under the
Debt Management and Asset Exploitation Company to meet the development requirements
of the Military Bank and expand its network nationwide.
4.3.3 CRM
CRM has some main functions such as Assigning tasks, Managing customer portfolios,
Viewing KPI score. CRM system is a software package that can adjust parameters for
integration and manage all aspects of customer interaction within the organization and
improve the organization's ability to handle customer service, sales, marketing, online
transactions and ordering
In MB, each civil servant has their own duty, so the organization needs to have a website to
manage the staff and their assignments. Besides, not only T24 but also CRM has functions
to manage customer portfolios such as information about LD, PD.
KPI in MB is about 750 per person and CRM manages the score per month. For example,
the KPI score for opening a new app is 3.5; for a 1 million disbursed money about 162.
In terms of characteristics, Core Banking is the nucleus of the entire information system of a
banking system. Information system here is understood to include information about
money, collateral; transactions, papers, accounting books; computer data, and information
systems… All transactions are transferred through the Core Banking system and in an
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Temenos is banking software. This unit provides fund management software, core banking,
payment and fund management software that is cloud-based, cloud-based, enabling banks to
deliver a zero-channel, omnichannel customer experience. friction and achieve operational
excellence.
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extremely short period of time, they still maintain operation and process information during
the operation period.
Source: Internet
It can be said, Core Banking is a system to centralize data anywhere, anytime. The Bank's
database is centrally managed by relationship and module: deposit, international payment,
money transfer, trade finance, lending, appraisal, capital source, and Internet Banking…
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Source: Internet
● Lending and Deposit module, abbreviated as LD;
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● Module for Management of Required Reserve (Cash Reserve Ratio), abbreviated as
CRR.
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Do It Right The First Time is a principle from management accounting related to just-in-time
(JIT) where a company only receives goods when it needs them to reduce inventory and production
management costs. In MB, FTR has a meaning that the staff has to complete the document in the
determined time, and if the staff surpasses that time, they will have no Commission money.
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SMART FORM is a component of the SMART DIGITAL BANK ecosystem, the total solution for
digital banking transformation.
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