NATIONAL ECONOMICS UNIVERSITY SOCIALIST REPUBLIC OF VIETNAM

CENTER FOR ADVANCED Independence – Freedom – Happiness

EDUCATIONAL PROGRAMS -----------------------------------
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SYLLABUS

1. MODULE PROFILE
Course name: Commercial Banking 2
Course code: NHTM1111E Credit: 3
Class: Banking 62 Program: Advanced Educational Program

2. LECTURER’S INFORMATION
Full name:
Title:
Address: Room 916, Building A1, National Economics University
Phone number:
Email: ....@neu.edu.vn
Faculty/ Institute: School of Banking and Finance

3. COURSE PREREQUISITES
Financial and Monetary Theory, Banking Management 1

4. COURSE DESCRIPTIONS
Banking and monetary institutions are an essential component of our lives. More and more
professionals are acquiring knowledge in this area for professional advancement or personal
knowledge. Banking courses can give individuals the knowledge needed to fulfill their goals and
advance careers. The purpose of this course is to provide students with understanding of banking
issues with a specific focus on lending, risk management and bank performance evaluation. The
course will cover different aspects of this interesting part of the financial world, including lending
to business and individuals; main risks on banking operations; measuring and evaluating the
performance of banks and their principal competitors.

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5. COURSE OBJECTIVES
Upon completion of this course, students will be able to:
 Understand the importance of lending policy and procedures, the different types of loans
from banks and their competitors.
 Analyze loan request from both corporate and individual customers and price the loans.
 Understand the main risks in banking business; the framework of risk management; and the
important role played by capital in the banking sector as well as the relevance of the Basel
Capital Accords.
 Analyse bank performance and other issues using ratio analysis.
 Apply these skills to the full spectrum of banking operations through classroom study,
integrated team projects and independent research.
 Present modern banking issues and current debates with various topics, including lending
pricing, reserve management, and credit rating among many other themes.
 Develop the students' transferable skills including communication (oral and written), team
work, decision making, economic and risk analysis, time and project management, and
work ethics.

6. COURSE SCHEDULE
Including Note
Number of Homework,
No Chapter
Period Theory Exam, Practice
Presentation
1 Chapter 1: Lending policies 9 6 3
and procedures
2 Chapter 2: Lending to 9 3 3 3
businesses and pricing
business loans
3 Chapter 3: Consumer loans, 9 3 3 3
credit cards and real estate
lending
4 Chapter 4: Risks in banking 6 3 3
operations
5 Chapter 5: Measuring and 6 3 2 1
evaluating the performance of
banks
6 Mid-term exam 3 2 1

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 Review 3 2 1
Total 45 20 17 8

Week Contents
1 Review of Commercial Banking 1
2 Chapter 1: Lending policies and procedures
3 Chapter 1: Lending policies and procedures
Exercises
4 Chapter 2: Lending to businesses and pricing business loans
Exercises
5 Chapter 2: Lending to businesses and pricing business loans
Presentation 1: Credit rating to customers in commercial banks: rationality
and issues
6 Chapter 3: Consumer loans, credit cards and real estate lending
Exercises
7 Chapter 3: Consumer loans, credit cards and real estate lending
Presentation 2: Business lending of selected commercial banks in Vietnam:
facts and issues
8 Mid-exam
9 Chapter 4: Risks in banking operations
Exercises
10 Chapter 4: Risks in banking operations
Presentation 3: Credit risk management of commercial banks in Vietnam: facts
and issues
11 Chapter 5: Measuring and evaluating the performance of banks
12 Chapter 5: Measuring and evaluating the performance of banks
Presentation 3: Application of CAMELS to financial assessment of bank
performance
13 Exercises
Mid-exam
14 Exercises
15 Review
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7. GROUP PRESENTATION
Presentation time: Total 90 minutes
 In each section, two groups are directly involved, including one presentation group
and one defence group.
 Presentation is limited to 45 mins. Defence group have to be mainly responsible for
commenting and questioning.
 Q&A is limited to 30 mins.
 Comments and discussion from the instructor: 10 mins.
Requirements
 A PowerPoint Presentation is to be sent to lecturers at least 14 days before the
presentation day. Final presentation should be sent to class e-mail at least 03 day
before the presentation day.
 The whole presenting and defending group is to attend class well on time

8. COURSE SCHEDULE
Chapter 1: Lending policies and procedures
Summary of Chapter 1:
Satisfying credit needs from borrowers, banks offer a broad range of loan products, which
are affected by many factors. Lending is closely regulated and monitored in banks because
of its importance as a source of income and a share in assets. In addition to the introduction
of loan types, factors and regulations, other topics in lending are presented, includingloan
policy, lending process, loan review and loan workouts.
1. Types of loans
2. Factors affecting the mix of loans
3. Regulation of lending
4. Creating a written loan policy
5. Steps in the lending process
6. Loan review and loan workouts
References of Chapter 1:
1. Casu, B., C. Girardone, and P. Molyneux (2006), Introduction to Banking, Harlow:
FT Prentice Hall.
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 2. Timothy W. Koch, S. Scott MacDonald (2009), Bank Management, Eighth Edition
3. Howells, P. and K. Bain (2008), The Economics of Money, Banking, and Finance.
4th Edition. Harlow: FT Prentice Hall.
4. Heffernan, S. (2005) Modern Banking Theory and Practice, Chichester: John Wiley.
5. Journal of Banking, Journal of Finance (Vietnam), Wall Street Journal; Business
Week or any other equivalent financial journal
6. Website
 www.vcb.com.vn
 www.sbv.org.com.vn
 www.vbard.com
 www.vpbank.vn
 www.vneconomy.com.vn
 www.vi.wikipedia.org

Chapter 2: Lending to business firms and pricing business loans

Summary of Chapter 2: Lending to business firms represents the earliest form of lending
that banks offer to the mark, loans extended to business firms take large proportion of total
lending portfolio of banks. This activity ranks both the highest interest revenues and
highest risk exposure to banks. The chapter present many different types that banks
typically make, the process for evaluating business loans and the most widely techniques
for pricing loans granted to business customers.
2.1 Types of business loans
2.2 Analyzing business loans requests
2.3 Analyzing collateral and contingent liabilities
2.4 Pricing business loans
2.5 Customer Profitability Analysis

References of Chapter 2:
1. Peter S. Rose and Sylvia C. Hudgins (2010), Bank Management and Financial
Services, McGraw-Hill Irwin Press, Eighth Edition, chapter 17.
2. Phan Thi Thu Ha (2013), Commercial bank management, National Economics
Publishing House , chapter 5
3. Frederic S.Miskin (1994), The Economics of Money, Banking and Financial
Markets, Technology and Science Publishing House, Chapter 9, 10.
4. National Assembly (2010), Law on Credit Institution, Hanoi.

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 5. State Bank of Vietnam (2013), Circular 02 on Providing for classification of assets,
level, method of making risk provisioning and use of provision to deal with risks in
operation of credit institution, forgeign bank branches, Hanoi
6. State Bank of Vietnam (2013), Decision 1627 on issuing regulations on lending by
credit institution to clients, Hanoi

Chapter 3: Consumer loans, credit cards and real estate lending

Summary of Chapter 3: Competition in business segments become tougher, banks have
to find new markets to expand credit operations and maintain their profitability targets.
Consumer borrowing has become a key driving force in the financial market place today,
consumer debt become one of the fastest growing forms of borrowing money around globe.
This activity ranks the most costly and risky financial products that require modern
technique management to reach target of highest profitability and lowest risky. The chapter
examines the types of consumer loans, credit rating systems, and significant consumer
pricing methods,
3.1 Types of loans for individuals and Families
3.2 Unique characteristics of Consumer loans
3.3 Evaluating consumer loan requests
3.4 Credit cards and credit scoring
3.5 Disclosure rules and Discrimination
3.6 Consumer loan pricing and refinancing
References of Chapter 3:
1. Peter S. Rose and Sylvia C. Hudgins (2010),Bank Management and Financial
Services, McGraw-Hill Irwin Press, Eighth Edition, chapter 18.
2. Phan Thi Thu Ha (2013), Commercial bank management, National Economics
Publishing House , chapter 5, 6
3. Frederic S.Miskin (1994), The Economics of Money, Banking and Financial
Markets, Technology and Science Publishing House, Chapter 9, 10.
4. National Assembly (2010), Law on Credit Institution, Hanoi.
5. State Bank of Vietnam (2013), Circular 02 on Providing for classification of assets,
level, method of making risk provisioning and use of provision to deal with risks in
operation of credit institution, forgeign bank branches, Hanoi
6. State Bank of Vietnam (2013), Decision 1627 on issuing regulations on lending by
credit institution to clients, Hanoi

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 Chapter 4: Main risks in banking operations
Summary of Chapter 4: In banking sector, risk is often highest concern of manager.
Changing interest rates directly affect banks’ in income and expenses due to the difference
between the interest - sensitive bank’s assets and interest - sensitive bank’s liabilities;
Estimating adequate funds to meet fund need to prevent panic; Coping with adverse
selection in lending decision are main concentrated issues of banking in their operations.
The chapter presents thoroughly all issues above and suggests some solutions often used to
handle these risks.
4.1 Interest rate risk
4.2 Liquidity risk
4.3 Credit risk
References of Chapter 4:
1. Peter S. Rose and Sylvia C. Hudgins (2010), Bank Management and Financial
Services, McGraw-Hill Irwin Press, Eighth Edition, chapter 11, chapter 16
2. Phan Thi Thu Ha (2013), Commercial bank management, National Economics
Publishing House , chapter 11, chapter 12
3. Frederic S.Miskin (1994), The Economics of Money, Banking and Financial
Markets, Technology and Science Publishing House, Chapter 9, 10.
4. National Assembly (2010), Law on Credit Institution, Hanoi.
5. State Bank of Vietnam (2014), Circular 36 on Providing for the prudential ratios,
limits in activities of credit institutions, foreign bank branches, Hanoi

Chapter 5: Measuring and evaluating the performance of banks and their principal
competitors
Summary of Chapter 5: Performance of banks is the result of their efforts under macro
and micro factors. The chapter examines process, methods, content and indicators to
measure and evaluate bank’s performance.

5.1 Financial statements of banks

5.2 Stock values and profitability ratios
5.3 Measuring operating efficiency
5.4 Size and location effects
References of Chapter 5:
1. Peter S. Rose and Sylvia C. Hudgins (2010),Bank Management and Financial
Services, McGraw-Hill Irwin Press, Eighth Edition, chapter 6

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2. Phan Thi Thu Ha (2013), Commercial bank management, National Economics
Publishing House , chapter 15
3. Frederic S.Miskin (1994), The Economics of Money, Banking and Financial
Markets, Technology and Science Publishing House, Chapter 9, 10.
4. Annual statements of BIDV on website: http://bidv.com.vn/Nha-dau-tu/Bao-cao-tai-
chinh/Bao-cao-thuong-nien.aspx

9. REQUIRED TEXTBOOK
Peter S. Rose and Sylvia C. Hudgins (2013), Bank Management and Financial Services, McGraw-
Hill Irwin Press, Ninth Edition

10. OTHER LEARNING RESOURCES: COURSE BOOKS, REFERENCE BOOKS, AND

SOFTWARES
- Joel Bessis (2011), Risk management in Banking, John Wiley & Sons, third edition.
- Casu, B., C. Girardone, and P. Molyneux (2005), Introduction to Banking, Harlow: Pearson,
First Edition.
- Peter Rose và Sylvia C. Hudgins (2001), Quản trị ngân hàng thương mại. NXB Tài chính,
Hà Nội, ấn bản lần thứ 4.
- Heffernan, S. (2005) Modern Banking Theory and Practice, Chichester: John Wiley.
- Case studies/news on bank management and bank regulations of Vietnam in newspapers,
articles, other relevant textbooks, and websites are highly recommended.
- State Bank of Vietnam, www.sbv.gov.vn
- Deposit Insurance of Vietnam, www.div.gov.vn
- Banking of England, www.bankofengland.co.uk
- UK Financial Conduct Authority, www.fca.org.uk
- British Banking Association, www.bba.org.uk
- American Banking Association, www.aba.com
- European Central Bank, www.ecb.int
- US Federal Reserve System, www.federalreserve.gov/
- US Federal Deposit Insurance Corporation, www.fdic.gov
- Bank for International Settlements, www.bis.org
- Financial Times, www.ft.com
- Bloomberg, www.bloomberg.com
- Reuters, www.reuters.com/
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- The Banker, www.thebankfer.com
- UK National Statistics, www.statistics.gov.uk
- Eurostat, http://ec.europa.eu/eurostat
- The Economist, www.economist.com
- Organization for Economic Cooperation and Development, www.oecd.com
- International Monetary Fund, www.imf.org
- World Bank, www.worldbank.org

11. COURSE REQUIREMENTS & GRADING POLICY

- Students are required to attend at least 75% of class hours. Extra credit will be given for frequent
attendance.
- There will be mini-tests during the course. The mini-tests are meant to prepare for the exams and
add extra credit to the final grade at the end of the semester for students.
- Students will be grouped for class presentation. In each presentation, there are one group of
presenters and one group of defenders. The defence group is mainly responsible for commenting
and questioning.
- Students are required to attend class well on time.
- Final grade is calculated by the below structure:
Criteria Weight Description
Attendance 10% Students should attend at least 75% of class hours. Extra
credit will be given for frequent attendance. However,
activeness in class discussion is the most important.
Group project 20% Students will be grouped for weekly presentation. One group
is the presenter, while the other group acts as the defender.
Mid-term exam 20% This is a 60 min open-book exam.
Final exam 50% This is a 90 min close-book exam.

Hanoi, August 2, 2020

CENTER FOR ADVANCED Lecturer
EDUCATIONAL PROGRAMS (full name and signature)

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Chapter 1: Lending policies and procedures (16)
Chapter 2: Lending to businesses and pricing business loans (17)
Chapter 3: Consumer loans, credit cards and real estate lending (18)
Chapter 4: Risks in banking operations (7)
Chapter 5: Measuring and evaluating the performance of banks (5+6)

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