Vietcombank Analysis

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  • Topic: Bank, Vietnam, Commercial bank
  • Pages : 9 (3103 words )
  • Download(s) : 172
  • Published : October 5, 2008
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I. Macro-environment
1. Economic
One of the biggest successes of 2007 was the annual economic growth rate reaching an impressive 8.48 per cent. This high growth creates an important premise for Vietnam to move to a higher development plan in the coming years. 10.6 percent growth rate of the industrial sector shows the economy’s ability to develop sustainable. (Ministry of foreign affairs) The economic growth of the Viet Nam relied on chiefly into contribution the number of investment element. It is estimated that at the end of November 2007 total lending account outstanding and investment in banking increase nearly 34% (Vietnamnet). This number shows that the banking industry is concerned by a lot of financial institution, big company and so on. 2. Demographic

The country’s population was last recorded at 84.16 million in 2007. According to the statistics, about 65 percent of the Vietnamese populations are in the working age group (15-59 years old) (Vietnamnet). These figures indicated that there are a great number of Vietnamese people who have ability to earn and save the money. 3. Technological element

Nowadays, Vietnamese banks have applied new technology: Host (the internal network and international network to connect all Banks’ branches over sea.) Besides, each bank also uses an information management system to control all branches’ database. Preventable risk system was established because the experiences from the past. A lot of banks could not survive when they lost a lot of money which customers loaned and did not pay. In April 2004, USAID experts assessed the bank’s information technology systems and recommended improvement. Integrating ATMs, credit, debit cards and e-banking into existing services make the transactions between the customers and bank become more comfortable and easier.(USAID) 4. Social/Culture

Many Vietnamese people have traditional thinking is that they deposited their money into bank just for safe and interest. 5. Legal/ Political
Reforming foreign exchange control policies to liberalize current transactions, prudently relaxing capital transactions to better meet the requirements of a market economy and increase the convertibility of the Vietnam dong(Vietnam Law & Legal forum).The foreign exchange control policies have been gradually renewed to be more open and liberal. Unreasonable limitations on international payment and money transmission, purchase, sale, investment and savings in foreign currencies and inward remittances have been gradually abolished in order to liberate current accounts and facilitate international commercial and investment transactions. Moreover, Vietnam has made great strides in opening the banking service market, creating opportunities for foreign credit institutions to enter the market and expand their operations in Vietnam. In terms of operation, licensing and distribution network, joint-venture banks, wholly foreign-invested and joint-venture financial companies and financial leasing companies now enjoy fundamentally equal treatment with domestic credit institutions. Limitations on the acceptance of deposits by foreign banks’ branches have been abolished step-by-step. Foreign bank branches operating in Vietnam are now allowed to accept demand and time deposits and savings in Vietnam dong from Vietnamese legal entities and natural persons with which they do not have a credit relationship in a ratio of no more than 50% of paid-in capital (compared to 25% previously).(Vietnam Law & Legal forum) In addition to, the equitization of State-owned commercial banks aims to increase their equity as well as bring minimum capital safety ratios up to international standards; make their operations more healthy, effective and competitive.(Vietnam Law & Legal forum)

II. Industry and competition analysis
1. Industry analysis
1.1. Bargaining power of customers : low
Price: the customers has no considerable effects because the bank has the advantages in...
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