This thesis has been completed with a lot of valuable assistance and cooperation from many people, whom I am sincerely grateful for.
Firstly, I would like to express my gratitude and appreciation to my supervisor, Luong Thai Bao, PhD, for providing me professional guidance and direction throughout my study. His careful editing contributed enormously to the production of this thesis. I could not have imagined having a better supervisor and mentor for my study.
Besides my supervisor, I would like to thank the rest of my thesis committee, for their encouragement, insightful comments, and hard suggestions in completing this thesis.
My sincere gratitude also goes to the professors in the EMBA program and EMBA staff, as well as the professors in NEU, for offering me great knowledge and supports.
Last but not the least. I would like to send my special thanks to my fellow colleagues of Bank for Foreign Trade of Vietnam for their great support in collecting and using the data during my thesis completion, for their ideas and advices, as well as their enthusiasm during the in-depth interviews in order to complete this thesis.
Chu Thi Thu Ba
TABLE OF CONTENTS
LIST OF TABLES 2
LIST OF FIGURES 3
EXECUTIVE SUMMARY 4
CHAPTER 1: THEORETICAL BACKGROUND AND LITERATURE REVIEW ON CREDIT RISKS AND CREDIT RATING 15
1.1. Credit risks and credit risk management in banks 15
1.1.1. Definition of credit risks 15
1.1.2. Classification of credit risks 16
1.1.3. Features of credit risks. 17
1.1.4. The main basis in determination of the credit risk levels. 18
1.1.5. Consequences of credit risks. 19
1.1.6.Reasons for credit risks 21
1.1.7. Credit risks management in banks 23
1.1.8. Credit risk management by internal credit rating
References: Figure 2.4: Outstanding loans by industries of Vietcombank at December 31st, 2010 53 Figure 2.5: Outstanding loans by economic sectors of Vietcombank at December 31st, 2010 54 Figure 2.6: Loans to small and medium enterprises (SMEs) of Vietcombank at December 31st, 2010 55 Figure 2.7: Credit market share in 2010 56