Graduation Thesis - CQ46-51.04 - Le Thi Van

Graduation Thesis

Academy of Finance

MINISTRY OF FINANCE ACADEMY OF FINANCE *****************

Le Thi Van Group: CQ46/51.04

"INTERNATIONAL PAYMENT ACTIVITIES AT HOAN KIEM BRANCH OF MILITARY JOINT STOCK COMMERCIAL BANK, CURRENT SITUATION AND SOLUTIONS"

GRADUATION THESIS

Major: English for Finance and Accounting

Hanoi – 2012 Supervisor: Ph.D. Bui Ba Luy

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

MINISTRY OF FINANCE ACADEMY OF FINANCE *****************

Le Thi Van Group: CQ46/51.04 "INTERNATIONAL PAYMENT ACTIVITIES AT HOAN KIEM BRANCH OF MILITARY JOINT STOCK COMMERCIAL BANK, CURRENT SITUATION AND SOLUTIONS"

GRADUATION THESIS Major: English for Finance and Accounting Supervisor: PhD. Bui Ba Luy

Hanoi - 2012

Supervisor: Ph.D. Bui Ba Luy

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

DECLARATION

I sincerely state that I: Le Thi Van, student of group CQ46/51.04, being a candidate for the Degree of Bachelor in English for Finance and Accounting, accept the requirements of the Academy relating to the retention and use of the Bachelor’s Graduation Thesis to deposit in the library.

In term of these conditions, I agree that the origin of my Graduation Thesis deposited in the library should be accessible for the purpose of study and research, on accordance with the normal conditions given by the librarian for the care, lending or republish of the paper.

Ha Noi, April 28th 2012 Student

Le Thi Van

Supervisor: Ph.D. Bui Ba Luy

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

ACKNOWLEDGEMENT

First of all, I would like to express my sincere to Ph.D. Bui Ba Luy for his guidance and supervisor. I also would like to thank the staffs at Military Joint Stock Commercial Bank, Hoan Kiem branch, Kim Lien transaction office for assisting and supporting me in fulfilling my internship plan and broadening my view and knowledge of banking and finance, especially international payments. Lastly, I would like to extend my heartiest gratitude to my parents and all of those who supported me in the completion of my Graduation Thesis during internship time.

Ha Noi, April 28th 2012 Student Le Thi Van

Supervisor: Ph.D. Bui Ba Luy

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

CONTENTS

INTRODUCTION ............................................................................................. 1 CHAPTER 1: INTERNATIONAL PAYMENT ACTIVITIES OF COMMERCIAL BANKS ................................................................................. 4 1.1 Overview of international payments in commercial banks .............. 4 1.1.1 Definition ......................................................................................... 4 1.1.2 Foundation and operation of international payments ..................... 4 1.2 Some conditions in international payments ............................................ 6 1.2.1 Condition on the currency for payment and ensuring the exchange 6 1.2.2 Condition on place of payments....................................................... 7 1.2.3 Condition for payment time ............................................................. 8 1.2.4 Condition of payment methods ...................................................... 8 1.3 Means of international payments ............................................................ 9 1.3.1 Check................................................................................................ 9 1.3.2 Bills of exchange (draft) ................................................................ 10 1.3.3 Promissory notes ............................................................................ 10 1.4 The methods used in international payments ........................................ 11 1.4.1 Remittance...................................................................................... 11 1.4.2

Collection of payment ................................................................ 13

1.4.3

Documentary Credit ................................................................... 16

1.5 Roles of international payments for commercial banks and exports and imports ......................................................................................................... 17 1.5.1 For Commercial banks ................................................................... 18 1.5.2 For exports and imports ................................................................. 19

Supervisor: Ph.D. Bui Ba Luy

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

CHAPTER 2: CURRENT SITUATION OF INTERNATIONAL PAYMENTS AT HOAN KIEM BRANCH OF MILITARY JOINT STOCK COMMERCIAL BANK ................................................................................. 20 2.1 Overview of Military Joint Stock Commercial bank and Hoan Kiem branch .......................................................................................................... 20 2.1.1 Overview of Military Joint Stock Commercial bank ..................... 20 2.1.2 Overview of Hoan Kiem branch .................................................... 26 2.1.2.1 Organizational structure .......................................................... 26 2.1.2.2 Business performance ............................................................. 27 2.2 Current situation of international payment at Hoan Kiem branch of MB ..................................................................................................................... 30 2.2.1 Overview of international payment activities at Hoan Kiem branch ................................................................................................................. 30 2.2.2 Current situation of each method ................................................... 32 2.2.2.1 Remittance method ................................................................. 32 2.2.2.2 Collection of payment ............................................................. 34 2.2.2.3 Documentary credit (Letter of Credit) .................................... 35 2.2.3 Summary of international payment activities at Hoan Kiem branch ................................................................................................................. 38 2.3 Causes leading to restrictions of international payments activities at Hoan Kiem branch of MB ........................................................................... 39 2.3.1 Objective causes ............................................................................. 39 2.3.2 Subjective causes from the bank .................................................... 41 CHAPTER 3: SOME SOULUTIONS AND RECOMMENDATIONS TO ENHANCE INTERNATIONAL PAYMENT ACTIVITIES AT HOAN KIEM BRANCH OF MILITARY JOINT STOCK COMMERCIAL BANK 42 3.1 Some factors making the competitiveness of MB increase .................. 42 Supervisor: Ph.D. Bui Ba Luy

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

3.1.1 Quality of payment services ........................................................... 42 3.1.2 Service fees .................................................................................... 44 3.1.3 Bank’s reputation ........................................................................... 44 3.1.4 Branches network and agency relationships .................................. 45 3.1.5 Marketing activities ........................................................................ 46 3.2 The direction of international payment activities at the branch in 2012 ..................................................................................................................... 47 3.2.1 Orientation in general ..................................................................... 47 3.2.2 Orientation for international payment at Hoan Kiem branch ........ 50 3.3 Some solutions to expand the scope of international payment activities at MB, Hoan Kiem branch .......................................................................... 51 3.3.1 Improvement and development of service activities ..................... 51 3.3.2 Coordination between international payments and foreign currency exchange .................................................................................................. 52 3.3.3 Improvement of the level and professional skills of the staff ........ 53 3.3.4 Enhancement of trade financing activities ..................................... 53 3.3.5 Adjustment of service fee .............................................................. 54 3.3.6 Rebuilding regulations and conditions for L/C loans .................... 54 CONCLUSION ............................................................................................... 55 REFERENCES ................................................................................................ 56

Supervisor: Ph.D. Bui Ba Luy

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

ABBREVIATION

MB

Military Joint Stock Commercial Bank

HSBC

HONGKONG AND SHANGHAI Banking Corporation

SME

Small and Medium Enterprise

VIP

Very important person

WB

World Bank

Supervisor: Ph.D. Bui Ba Luy

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

LIST OF DIAGRAMS AND TABLES

Diagram 1.1: Payment by remittance method Diagram 1.2: Clean collection payment process Diagram 1.3: Documentary collection payment process Diagram 1.4: Documentary credit payment process

Table 2.1

: Business performance of the bank 2009-2011

Table 2.2 : The organizational structure of Hoan Kiem branch Table 2.3

: Business performance of Hoan Kiem branch 2010-2011

Supervisor: Ph.D. Bui Ba Luy

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

INTRODUCTION 1. Rationale Nowadays, along with the trend of internationalization, globalization and commercialization, the globalization of finance and banking is also increasingly being expanded. Foreign business operation in general and international payments of commercial banks in particular, is constantly being improved to match with general trends of the world. To keep pace with the overall trend of the region and the world, in the process of economic reform, international payments of commercial banks in Vietnam have been formed and developed with a rapid speed and also attained many significant achievements. However, up to now, international payment operation is considered a new field which is not completed and still inadequate in the level of technology as well as actual operating experience. The complexity of professional knowledge and fiercely competitive environment makes foreign business operation in general and international payments of commercial banks in particular have difficulties and risks. Thus, the study for solutions to expand and improve international payment activities is a frequent and urgent requirement for each commercial bank. Hoan Kiem branch of Military Joint Stock Commercial Bank (MB) is one of the most efficiently operating branches. During the past years, the branch has achieved certain successes in the international payments, but the branch is attempting to improve efficiency further. Therefore, the introduction of some measures to expand its international payments in order to meet international standards and improve the competitiveness of the branch in particular and the whole system in general is one of the top missions for the branch

Supervisor: Ph.D. Bui Ba Luy

1

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

Because of above reasons, the author would like to present the thesis with topic: “International payment activities at Hoan Kiem branch of Military joint-stock commercial bank, current situation and solutions” 2. Aim of the study The first aim of the study is to clarify the position and importance of the quality of international payments for exports and imports in general and for commercial banks in particular. Secondly, on the basis of analyzing the current situation and evaluating the quality of international payments over the years, the thesis points out difficulties and problems that Hoan Kiem branch has. Lastly, the thesis also suggests some solutions to remove the obstacles currently exists in the international payment operations, encourage and improve the quality of international payments at Hoan Kiem branch. 3. Scope and subject of the study Research scope: research scope here has only focused on international payment activities at MB under the economic perspective in period 20092011 Subject of the study: Because of the limitation of the author, the thesis just gives brief overview of international payments at Hoan Kiem branch of MB 4. Methods of the study Based on collected data, mainly the data from annual reports, financial reports, articles and financial books...the thesis would combine some main methods such as: comparision, analysis, statistic, synthesis to find out the shortcomings and recommend some solutions for improving international payment activities. Supervisor: Ph.D. Bui Ba Luy

2

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

5. Organization struture  Introduction  Chapter 1: International payment activities of commercial banks  Chapter 2: Current situation of international payment at Military joint stock commercial bank, Hoan Kiem branch  Chapter 3: Some solutions and recommendations to enhance international payment activities at MB, Hoan Kiem branch  Conclusion

Supervisor: Ph.D. Bui Ba Luy

3

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

CHAPTER 1: INTERNATIONAL PAYMENT ACTIVITIES OF COMMERCIAL BANKS 1.1 Overview of international payments in commercial banks 1.1.1 Definition International payment of commercial bank is a field of professional activities, in which the commercial banks of a country are through a contractual relationship with the agent bank in other country to support enterprises exporting and importing goods and services in paying and receiving money. In other word, international payment is the implementation of receiving and paying in the international monetary units through banking system in the world to serve exchanging relationships arising among banks. Unlike the domestic payments, international payments must have the participation of two or more entities of two or more different countries. It is therefore very complex and requires carefulness when joining its process. 1.1.2 Foundation and operation of international payments All countries in the world that are eager to develop can not just rely on domestic production activities but have to expand the operation relations with other countries. Because of distinctions in natural conditions and natural resources, there are differences in the inputs that a country can produce some products with very low input costs but with extremely high costs for other products. If they only depend on the domestic production, they can not fully supply goods and services in order to meet the demand of the economy. On the basic of exploiting the inherent potentials and economic advantages in the economy; the international trading activities can not only serve domestic

Supervisor: Ph.D. Bui Ba Luy

4

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

demands but also create the surpluses exporting to other countries, which contributes to increase of foreign currency for the country to import the deficit things and to repay debts. It is the demand of developing the economy that raises the exchanges of goods between the countries to exploit the potential and strengths of each country in the most effective way. Exports and imports are therefore the objective requirements of the economy, international payment is the last stage in exports and imports and it is different from domestic payments. As international trade was in the early period, traders directly transported goods to sell in other countries and collect money. The difficulties due to differences in currency were solved by the participation of a bank acting as the intermediary for exchanging money. In terms of progress, international trading relations have been expanding in scope and scale, accompanied by the monetary amount. Due to the safety, traders did not collect money directly but through banks as payments intermediaries. However when international payment activities developed more and more rapidly, the payment was very complex under the influence of economic, politic and social factors and leaded to increase risks. The parties participating in exports and imports revealed increasingly deep conflicts, which led to the appearance of methods and means of international payments. They were continuously improved to resolve those conflicts and create conditions for commercial development. Thus, the basics to form international payments of commercial banks are foreign trading activities. International payment not only contributes significantly on promoting foreign trading but also is an important factor to assess the external economic performance of a country.

Supervisor: Ph.D. Bui Ba Luy

5

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

1.2 Some conditions in international payments International payment is an extremely complicating activity because it has the impact of foreign elements. The participating entities have specified differences in cultures, politics... In international payments between countries, the problems related to rights and obligations that both parties have to work out, solve and implement are prescribed in the conditions known as international payment conditions. 1.2.1 Condition on the currency for payment and ensuring the exchange * Condition on the currency of payment Unlike the domestic payment operations, payment activities related to at least two or more countries are related to two types of currency involved. Targets in terms of currency of exporters and importers are not as simple as those in the domestic payment operation. In addition, the purchasing power of money can change and even fluctuate between the time of contracting and payment. It is therefore essential to have the monetary conditions for payment in foreign trading relations. The selection of currency in international payments is extremely important. It depends on many factors such as: the position of that currency in the international market, comparing forces between buyer and seller sides, practices of using the settlement currency in the world, agreements in economic or commercial alliances. However, when making payments, the parties involved are looking for ways to achieve the payment conditions for their own benefits. The selection will depend very much on the status of negotiation, commercial practices and viewpoints of each side about the trend of risk.

Supervisor: Ph.D. Bui Ba Luy

6

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

* Condition on ensuring the exchange Condition on ensuring the exchange gives reserving condition to ensure the real value of incomes when the monetary value fluctuates unpredictably. The purchase contract must clearly state the kind of currency for payment and conditions on ensuring: Condition on ensuring the gold, condition on ensuring foreign exchange and condition on making sure the “basket of currency”. As applying this guarantee, both parties should notice: Firstly, select unanimously the kind of foreign currency to put into the currency basket; secondly, determine uniformly the exchange rate between the currency for payments and the currency in the basket at the time of signing the contract and the time of payments in order to make a basis for adjusting contract value. 1.2.2 Condition on place of payments As paying for export and import contracts, location for payment can be in the importer’s country or in any intermediary country. The determination for the place of payment is often based on the comparison between the two forces. The powerful can easily convince the other to accept the conditions they offered. If they pay by the currency of any country, the place of payment is always in that country. However, they both want to choose their country for the place of payment because there will be much benefits for the payment process. Firstly, the importers will avoid accumulating the capitals and the exporters will collect the money quickly. Secondly, it can create conditions to improve the status of his country in the international market. Thirdly, it can also facilitate for their banks to collect professional fees.

Supervisor: Ph.D. Bui Ba Luy

7

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

1.2.3 Condition for payment time This condition is required in international transactions. The given conditions include prepaid, paid at sight, and postpaid:  Prepaid: In this condition, the buyer will pay a portion or all of the capitals to the seller. The prepaid is for the purpose of the importer providing commercial credits to the exporter, or for binding the importer with implementing the contract.  At sight: The buyers will pay to the seller intermediately upon receiving goods. The at-sight concept includes many ways of payment from the time of preparing goods for loading on board to the time when the buyers received goods.  Post-paid: After a certain time of delivery, the sellers will collect money from the buyers. The post-paid payment is actually that the sellers give credits for the buyers. The time of payment is long or not depending on the agreement of both sides and is required by each country’s foreign exchange regulations. This is the most common case in imports and exports. 1.2.4 Condition of payment methods This is one of the most important conditions in the international payment conditions. It is the way for the buyers and the sellers fulfilling the obligations of payments. The two parties may choose and pay by one of the following methods: Remittance, collection of payment and documentary credit. These methods will be discussed further in Chapter two. People can have many different methods, but they must select them based on the sellers’ requirement

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

of collecting money completely, fast and properly and on the buyer’s demand of quantities and quality of goods. Therefore, we must use payment methods appropriately to meet business efficiency. 1.3 Means of international payments In the payment operations, cash is the common and preferred means. However, in international payments, cash is not the primary means but secondary one. The main means used in international activities are financial documents such as: checks, bills of exchange (draft), promissory notes and ecards. There are also payment orders and remittance. 1.3.1 Check Check is an unconditional paper paid by a customer with a deposit account at a bank requiring the bank to deduct a specified account (by bank transferring or cash) to pay for the person named in the check or pay according to that person’s command. In exports and imports, checks are used as tools for direct payment for goods or providing services between exporters and importers who have closed and trusted relationship. The nature of limited time is the most interesting point of checks. It means that checks are valid if its effect of payment has not expired. The duration of checks depends on the spatial extent that checks circulate and the laws made by the nations. Normally, checks for domestic circulation have shorter time than checks used in international payments. There are many types of checks used in payments. Based on the movement of checks, checks are divided into four categories: real name checks, anonymous checks, order checks and cross checks. Based on the location of using, checks include: checks of cash, checks of transfer, traveler’s checks and guaranteed checks.

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

1.3.2 Bills of exchange (draft) A draft is an unconditional writen order of the drawer for the person (the draft payer) who is required to pay immediately or at the time able determined in the future with some money given. Like checks, bills of exchange are also divided in to several categories according to different bases. Based on payment term, there are two types: at sight draft and late draft. Based on the documents accompanying, there are clean draft and documentary draft. In addition, as classifying draft, it is based on the nature of transferring to divide them into three categories: real name draft, anonymous draft and ordering draft. 1.3.3 Promissory notes Promissory notes are financial securities in which the drawer is committed to pay a certain amount on a certain date for a beneficiary given on the notes, for someone else, or by the order of the payee. They should be guaranteed by a bank or finance company. This guaranty ensures the solvency of promissory notes. Promissory notes have some following characteristics: - Terms of promissory notes are clearly defined - A promissory note may not be signed by one or more persons to commit to pay for one or more beneficiaries This means is only used when the entities are not in a relation or without mutual trust. Moreover, this is a kind of debentures issued by the debtor, so it is inactive and rarely used in international payments.

Supervisor: Ph.D. Bui Ba Luy

10

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

1.4 The methods used in international payments In international payments, the whole process of how to receive and make payments for foreign trading transactions between exporters and importers is known as the international method. Nowadays, there are some payment methods used primarily in international activities such as: remittance, collection of payment and documentary credit. 1.4.1 Remittance a) Definition Remittance is the simplest payment method, in which a customer (the payer, buyer or importer) requires his bank to transfer a certain amount to the beneficiary (the seller or exporter) in a certain place and time. b) Advantages and disadvantages This method not only is quick but also costs less. However, that the payment is implemented or not depends on the willingness of the importers. Risks will occur if the importer doesn’t make remittance after receiving goods or deliberately prolongs the delays in order to appropriate the capitals of the exporters.

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

c) Diagram of implementation process Diagram 1.1: Payment by remittance method

Remitting Bank

Paying Bank (4)

(2 )

(5)

(3)

Remitter

(1)

Benificiary

(1) After signing commercial contract, the exporter will supply goods and services to the importer, and transfer all the documents of lading and the documents related. (2) The importer writes the remittance order to require the bank remitting money after checking documents and invoices. (3) After checking the validity and liquidity, the bank will deduct its account to transfer money and send a written notification of payment to the importer. (4) Remitting bank orders (by email or telegraph) its agents in foreign country to remitting money paid to the recipient. (5) Paying bank transfers money to the beneficiary (directly or indirectly through other bank) and then send credit notice for the receiving unit.

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

1.4.2 Collection of payment a) Definition Collection of payment is a payment method in which the exporter makes a table of payment vouchers and entrusts for the bank to collect his money from the importer on the basic of bills of exchange issued. b) Classification: Collection of payment includes two types Clean collection: According to the Uniform Rules for Collection URC-522, clean collection means collection of financial documents without commercial documents. Diagram 1.2: Clean collection payment process (3) Remitting Bank

Paying Bank (6)

(2)

(7)

Remitter/Exporter

(5) (1)

(4) Drawee/Importer

(1) The exporter delivers goods and all documents to the importer. (2) The exporter makes collection of payment drafts for entrusting remitting bank on collecting money from the importer. Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

(3) Remitting bank delivers collection of payment drafts for its agent (paying bank) to inform to the importer. (4) Paying bank gives drafts for the importer to require for acceptance or payments. (5) The importer makes payments or refuses to pay for drafts. (6) Paying bank deducts money from the importer’s account transferring to remitting bank in order to credit for the exporter in case the importer agreed to pay. (7) Remitting bank makes credited and informs to the exporter. The application scope of this method is mainly between the customers at a level of high trust and goodwill in both trading and payment obligations. Documentary collection According

to

the

Uniform Rules

for

Collection

URC-522,

documentary collection is defined as following: “Documentary collection means collection of: - Financial documents accompanying commercial documents - Commercial documents without financial documents”

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

(7) Remitting Bank

Presenting Bank (3)

(8)

(2)

(4)

(5)

(6)

(1) Exporter

Importer

Diagram 1.3: Documentary collection payment process (1) The exporter delivers goods to the importer. (2) The exporter prepares payment documents for remitting bank to collect money from the importer. (3) Remitting bank sends those documents to presenting bank in order to collect from the importer. (4) Presenting bank collects money from the importer. (5) The importer pays or accepts bills of exchange, promissory notes, or debentures issued. (6) Presenting bank gives documents of goods to the importer. (7) Presenting bank transfers money to remitting bank. (8) Make payments for the exporter. Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

1.4.3 Documentary Credit a) Definition: Documentary credit is an agreement in which a bank (bank opening letters of credit) as required by the customer (the person requiring to open documentary credit) will pay a certain amount to the other (the beneficiary) or accept bills of exchange drawed by this person when he presents to the bank all documents in accordance with the provisions outlined in the documentary credit b) Process of payment transactions Diagram 1.4: Documentary credit payment process

Advising bank

Issuing bank (2) (8)

(7)

(1)

(3)

Applicant (Importer)

(5)

(6)

Beneficiary (Exporter) (4)

(1) The importer makes an application for a letter of credit (L/C) to require his bank to open L/C for the exporter. (2) Based on the contents of L/C, if they meet requirements, issuing bank will make a letter of documentary credit through its agent in exporting country to announce the opening of L/C. Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

(3) Advising bank informs and transfers L/C to the exporter. (4) If the exporter accepts L/C, he will make delivery, or he will ask issuing bank to amend and supplement to be in accordance with the contract. (5) After delivering goods, the exporter prepares documents in accordance with L/C through advising bank in order to present for issuing bank to get payment. (6) Issuing bank checks payment documentaries, if they match the provisions in L/C, the bank will make payment for the exporter. If not, it refuses and returns them to the exporter through advising bank. (7) Issuing bank returns all payment documentaries to the importer and requests reimbursement. (8) The importer checks all documents, if they meet the conditions in L/C, he will reimburse for issuing bank, or he could refuse to pay for the bank. 1.5 Roles of international payments for commercial banks and exports and imports An economy can only be developed on the basis of developing domestic advantages, utilizing external resources and combining the powers in international economic cooperation. Under the trend of globalization, many countries are putting the external economic activities on the top, international payments are increasingly confirmed the important role in the national economy.

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

1.5.1 For Commercial banks Firstly, international payments make the liquidity of banks increase. Through the implementation of international payments’ methods for customers, the bank require customers to deposit money in a given rate in order to ensure their solvency. Sources of colletaral arise frequently and are relatively stable to contribute for the payment of banks and increase their liquidity. Secondly, international payments allow banks to expand foreign relationships. Through the guarantee for domestic customers in paying for foreign banks, commercial banks will have opportunities to expand the braches network and agent banks. Relationships based on cooperation and mutual assistance will creat their position in the market, contributing to increase of sales and improvement of their business perfomance. Lastly, international payment also increase competitiveness for banks, which contributes to raise the prestige of banks in the international and domestic market. Then, banks will exploit funding sources in and out of the country in order to meet customers’ demands. In addition, international payments boost banks to replace and innovate technology to update with their partners, which also increases the competitiveness of banks. In summary, international payments have extremely important position for the national economy in general and for the business performance of commercial banks in particular. It is therefore necessary to focus on and invest more and more in these activities.

Supervisor: Ph.D. Bui Ba Luy

18

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

1.5.2 For exports and imports International commercial transactions are governed by inherent rules in the world market, so paying by international prices is agreed by the parties. In exports and imports, task of international payment is to ensure the safety for revenues of exported goods. This is very important to business production activities of the parties involved. Thus, in international payments, people often choose the less volatile currency for calculations and payments. Firstly, international payment is a connection between buyers and sellers, a last critical stage in business cycle. If the purchase contracts are done smoothly and safely, the reputation of the parties will be strengthen and their relationship will be more and more closely for long-term relation business. Secondly, international payment is a factor affecting business performance directly. It creates good conditions for enterprises to engage in foreign trade transactions, simultaneously expands their manufacturing operations and improves sales methods between countries. The fast payment process will help to improve capital efficiency, shorten cycle time of capitals, increase sales and profits of the parties involved. Through international payments we can evaluate financial capability, reputation and potentials of those entities. Simultaneously, international payments activities enhance production in developing countries, encourage exporting goods and tie the commercial and cultural relationships among countries. In conclusion, the development of international payment not only increases the speed of capital flow but also improves business performance and strengthens incentives for economic development engine. Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

CHAPTER 2: CURRENT SITUATION OF INTERNATIONAL PAYMENTS AT HOAN KIEM BRANCH OF MILITARY JOINT STOCK COMMERCIAL BANK

2.1 Overview of Military Joint Stock Commercial bank and Hoan Kiem branch 2.1.1 Overview of Military Joint Stock Commercial bank Military Joint Stock Commercial Bank has been established in the Republic of Viet Nam Socialist according to the operation license: No.0054/NH-GP, September 14th 1994 issued by the State Bank of Vietnam with a term of fiffty years from the date of issuance. The bank officially came into operation November 4th 1994. The Head Office is located at No.3, Lieu Giai, Badinh Distrist, Hanoi Capital of Vietnam. MB is one of the large commercial banks in Vietnam, with the slogan “STRONG – RELIABLE”, beside sticking with traditional customer-base, MB is constantly expanding to provide its products and services to customers in many economic sectors and contribute to several major national projects such as: Ham Thuan- Da Mi hydropower plant, Noi Bai and Tan Son Nhat airport…Its aim is to carry out banking transactions, including raising capitals, receiving deposits and providing short-term or long-term loans for organizations and individuals on the basis of characteristics and capacity of bank. In addition, the bank also makes foreign currency transactions, international trade, financial services, discounting commercial papers, bonds and other value papers. Chartered capital of the bank in the year of establishing 1994 is VND 20 billions and is added in each period by decisions of the General shareholders meetings. Until the end of 2009, this figure is up to VND 5,300 billions. By Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

June 30th 2011, the chartered capital of MB has reached VND 7,300 billions (the same as that of November 31st 2010) in which there are more than 4,000 legal entities and individuals as shareholders, which reflects diversification in the ownership of MB. Up to now, there are five companies which hold over 50% stakes of MB: Thang Long Securities Company, MB Capital Management Joint Stock Company, Assets Management Company and MB Land Joint Stock Company. MB’s value is not defined by its assets but lies in its six inherent core values that are respected and upheld by each and every member of MB, including:  Trust  Cooperation  Customer care  Creativity  Professionalism  Efficiency During the past years, thanks to the power originated from the combination between principles, professional conduction, and the consistent direction of the board of management, executive board as well as a team of enthusiastic and dynamic employees, MB has delivered a successful performance to the set plans. The following table will indicate clearly MB’s business performance from 2009 to 2011:

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

Table 2.1: Business performance of the bank 2009-2011 Unit: in VND Billions 2011 Year 2009

2010

Indicators

(The six first months)

Total Assets

69,008

109,623

115,181

Capitals mobilization

59,279

96,954

78,132

Profit before tax

1,505

2,288

1,455

Outstanding loans

29,588

48,797

54,119

Source: Financial Statements of MB (June 30th, 2011)

120000 100000 80000

Raising capital Profits before tax Total assets Outstanding loans

60000 40000 20000 0 2009

2010

2011

In 2009, total assets reached VND 69,008 billion; equivalent to 156% in comparison with those of 2008 and 18% surpassed the plan. That number was

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

at VND 109,623 billion, up 59% compared to 2009. As June 30 th of 2011, with the plan of VND 152,000 billion for the whole year, it has been up 12% compared to the beginning of the year and fulfilled two thirds of the plan only after a half of the year. Although the liquidation remained a concern of many credit organizations, especially at the ending half of 2009, the mobilized capital source of MB kept stable and sound growing. At the end of 2009, total mobilized capital of MB stood at VND 59,279 billions, completing 153% target compared with that of the previous year, which was mainly attributable to deposits from economic organizations for VND 39,978 billions, accounting for 67.4% of total mobilized account. Despite the fierce competition and fluctuation in the last quarter of 2010, MB has successfully maintained stable growth for its mobilizing fund thanks to flexible and sufficient management policies. By the end of 2010, MB’s total mobilizing fund reached VND 96,945 billion, at an increase of 64% in comparison with 2009 (of which VND 71,152 billion – 73.44% was from enterprises and individuals. Raising capitals up to the date of June 30th 2011 has reached VND 78,132 billions, 42% of the plan and up 12.6% compared to the early year; in which raising capital by VND has increased 6.4% and 31.4% those of foreign currency. This is an impressive growth comparing with the general mobilizing growth of the whole sector of only 2.88%). As 2009, in the general difficulties of the economy, MB has obtained positive business results. The consolidated profit before tax of MB arrived at VND 1,505 billion, increasing 75% compared with that of 2008 and realizing 51% of the target assigned by Shareholder’s Meeting in 2008. Therefore, MB has held firmly its financial position as one of five commercial joint stock banks in Vietnam that had the highest profit. In 2010, despite of prevailing Supervisor: Ph.D. Bui Ba Luy

23

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

difficulties and market fluctuations, MB, with support from its customers, has executed prompt and proper decisions to get through obstacle. MB’s consolidated profit before tax achieved VND 2,288 billions which increased 52% compared to 2009 and surpassed the target set by Annual General Shareholders Meeting by 14%. That number have been at VND 1,455 billions after the first six months of 2011, increased 131% those of the same period last year and reached 52% of plan. This outstanding result has continued to claim MB a position in the top leading five commercial Joint Stock Banks with regards to profitability. Outstanding loans (includes Laos branch) have been at VND 54,119 billions, up 13% over the early year and accounted 7.05% of the growth of overall sector. The bad debts ratio of MB (Nonperform loans) is at 1.51% while the ratio of the sector is 2.72%, which indicates that the credit quality of MB is well controlled. Business performance of MB has always been highly appreciated by the management agencies, partners and customers. It also constantly has been ranked firstly by State Bank of Vietnam and given many awards for outstanding achievements; received the international payment award by prestigious international banks as HSBC, Standard Charted Bank, and UBOC for many years. In addition, MB was selected by customers as “Strong Brand” in the two consecutive years 2005 and 2006; reached Gold Cup for Top ten of Vietnamese Brand in financial banking in 2006, and recently received the prize “Excellent Global Payment and Cash Management awarded by HSBC” and “VNR 500 (500 Largest Enterprises in Vietnam)” in 2011. Products and services of MB are continuously being diversified towards improving and promoting traditional services associated with the development of modern services such as: card payment systems, mobile banking and

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

internet banking. Services of MB are also constantly enhanced to bring customers not only financial efficiency but also absolute satisfactory. Along with improving the quality of products and services, MB has particularly focused on expanding distribution channels in major economic areas of the country. Up to June 30th, 2011; MB has a head office, a transaction center, a branch in Laos, 41 branches and 4 branches level, 98 transaction offices over the country, five subsidiaries and three associated companies. Considering the quality of the staff as the strength of the bank, MB has sent thousands of employees for training abroad every year. With the rich and highly specialized numbers of young staff (by the end of 2010, the total number of employees in MB’s banking system reached 3,269 and in the quarter III that number is up to more than 4,000). MB is developing to become a multi-bank. It has established Thang Long Securities Company, Debt Management and Assets Exploitation Company and Ha Noi Managing Investment funds Company and also finance its subsidiaries in order to make profits and reputation in the market. Risk management is given top priority to make the overall solutions for reducing risks not only for the bank but also for the customers. Therefore, MB always ensures the safety ratio according to international standard and the bad debt ratio at a reasonable level. Inheriting bravery and morality of the soldiers, each staff of MB is determined and unanimous with the aim of developing to become one of the leading Joint Stock Commercial Banks in Vietnam. Simultaneously, MB would like to become a reliable, safe and honest partner who brings customers maximum benefits through providing diversified products and banking services in order to match the general market trend and meet the increasing requirements of customers.

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

2.1.2 Overview of Hoan Kiem branch 2.1.2.1 Organizational structure Table 2.2: The organizational structure of Hoan Kiem branch

Director

Vice director

Enterprise customers relation department 06 Transaction offices

Private customers relation department

Support customers relation department

Supervisor: Ph.D. Bui Ba Luy

Tellers

Main Treasury

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

Until November 31st, 2011; Hoan Kiem branch has six transation offices under its administration: Tran Hung Dao, Lan Ong, Kim Lien, Ly Thai To, Hang Bo and Tran Nhat Duat office. There are eight specialized departments: SMEs 1, SMEs 2, Individual customers, private, credit management, support services, accounting and customer services and general administration department. Each department has its own tasks and function, and it also supports each other to complete missions. The branch has a team of young, enthusiastic, energetic and dynamic employees who are trained thoroughly in supporting, marketing, developing and deploying customer services. Leaders of the branch also assign and arrange right works for each employee and focus on training new staff. Thus, during the past years, Hoan Kiem branch has always completed excellently its tasks and continuosly received many remarkable and value rewards.

2.1.2.2 Business performance Hoan Kiem branch does business with synthetic multi-functions, with basic activities such as: raising capitals, giving short and medium-term loans and other main activities like many other branches in MB system. Hoan Kiem branch also makes joint venture with economic organizations and credit institutions to do fast money transfer services; domestic payments via computer networks such as: Visa, Master card, ATM. Moreover, it implements treasury services: currency exchange, remittance payment, cash supplying… Hoan Kiem branch is one of the most efficient operating branches of MB. It is strong in professionalism, which is especially expressed in Smartsales contest held in 2011 within MB system. In addition, 2011 is the year when Hoan Kiem branch completed missions assigned, even be over the plan and Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

ranked an excellent branch. Especially, it attained the award “Sunflower” and at the end of the third quarter of 2011. The business performance of Hoan Kiem branch 2010-2011 is clearly shown by the following table:

Table 2.3: Business performance of Hoan Kiem branch 2010-2011 Units: in VND Billions

No.

Indicators

Units

2010

2011

1

Total assets

Billion

2,500

4,000

2

Raising capital

Billion

3,700

5,300

3

Outstanding loans

Billion

2,900

3,500

4

Profits after tax

Billion

30

100

Source: The Journal of MB

Look at the above table; we can see firstly that total assets of Hoan Kiem branch increase remarkably over the two years 2010 and 2011, from VND 2,500 billions in 2010 to 4,000 billions in 2011, up 60% after only one year. This shows that Hoan Kiem branch has right policy in raising capitals, investing and lending as well in the past two years. In raising capital task, besides the implementation of traditional raising capital forms, Hoan Kiem branch has adopted many diversified forms such as: savings program with rewards and gifts in order to attract customers. Thus, funds mobilized in the branch increase continuously, year after year. In specific, the raised capital is up 43.24% and reaches VND 5,300 billions in the third quarter of 2011. In Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

particular; in 2011, raising capital activity of Hoan Kiem branch reaches 107% of the plan only after the first six months. This demonstrates that the interest rate policy of the bank has attracted customers and ensured safety for them. In general, outstanding loans of Hoan Kiem branch have gradually increased over the two years. In 2010, outstanding loans were at VND 2,900 billions, in 2011 that number was up to VND 3,500 billions which was up 20.69% compared to that of 2010. Thereby, we can find that the credit activity of the branch is quite effective. It has also done well of classifying loans and making provisions for risks in order to improve credit quality and mitigate risks. Thanks to not only right policies in raising capital, lending and investing but also hard working of the personnel of the branch in the recent years, profits of Hoan Kiem branch have been at high level compared to the other branch in MB system. Specifically, profits after tax of the branch were only at VND 30 billions in 2010; but that figure reached VND 100 billions in 2011, which shows a sharp increase and effective business performance of Hoan Kiem branch in the recent two years. In summary, business performance of Hoan Kiem branch is relatively stable. Although sometimes there are certain difficulties, Hoan Kiem branch has had methods in innovating management and overcome those difficulties to do business with high efficiency.

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

2.2 Current situation of international payment at Hoan Kiem branch of MB 2.2.1 Overview of international payment activities at Hoan Kiem branch Along with the joint efforts of the whole banking sector, Hoan Kiem branch has achieved positive results in their business activities in general and in international payment activities in particular. The branch has dedicated services, inspect, and advice on international payments of enterprises to meet customers’ demands. Moreover, the branch provides a variety of products and services to attract many highly prestigious customers with a healthy and stable financial situation. Although when the branch has been just established, international payment activities had to face difficulties; Hoan Kiem branch has now built a steady position in international payment field thanks to the supervision of boards of directors and the tireless efforts of staffs. International payment turnovers of the branch increased consistently, reaching a high growth rate. Table 2.4: International payment figures of Hoan Kiem branch in 2010 and 2011 Unit: USD millions Indicators

2010

2011

Payment turnovers

23 (100%)

32 (100%)

Export L/C

11.27 (49%)

18.56 (58%)

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

Import L/C

0

0.48 (1.5%)

0

0.16 (0.5%)

0

0.8 (2.5%)

Export TTR

11.73 (51%)

11.2 (35%)

Import TTR

0

0.8 (2.5%)

Export collection of payment Import collection of payment

(Source: General report of MB) In revenues of export and import payments at Hoan Kiem branch, the ratio of documentary credit (L/C) method dominates over that of the remained two methods. The reason is for in fact L/C is the method which can guarantee safety for the parties involved. The exporters prefer to use this method for their best interests. L/C method always gets high ratio in total sales of international payments of the bank. Remittance and collection of payment method are not complete in some aspects, are beneficial for one of the parties. They are therefore less used but often for the cases of the two sides trust each other. However, the proportion of these two methods over total revenues of international payments is quite stable and not changed much over the years. Advantages of Hoan Kiem branch in international payment activities are the balance in their foreign currency sources, and the independence from external factors. After nearly 10 years of operation, Hoan Kiem branch has

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

had a number of loyal customers, has stabilized the number of transactions revenues from these activities. The bank not only maintains the traditional customers but also expands and penetrates into the market of potential customers. In addition, the branch gradually enhances international payments, improves services quality, and innovates the style of dealing with customers by listening, analyzing and evaluating the customers’ opinions. This has strengthened the bank’s reputation in the eyes of customers, increased market share and advanced economic efficiency. In general, international payments at Hoan Kiem branch are also as strong as that of the whole system of MB. Especially, Hoan Kiem branch has got excellent results as finishing the third quarter of 2011 with international payments indicator reaching 103% of the year plan. This indicates that international payments at Hoan Kiem branch are really steady despite of the fluctuating exports and imports market. 2.2.2 Current situation of each method 2.2.2.1 Remittance method In this method, Hoan Kiem branch is rarely taking risks. The reason is that the bank is merely an intermediary to carry cash for customers and only do when there is a remitting order and customer’s account is affordable to pay. The bank only is at risk of professionalism such as remitting errors or loss on the way of transferring. Customers with remittance demand will give the bank a remitting order according to the form of the bank including such items: accounts used to transfer, transferring by which form (mails or checks), value date, amounts, currency, the person gave the order, the beneficiary, the beneficiary’s bank, payment contents and accompanied by a commercial

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

contract between the parties. The bank will check the customer’s account after receiving the remitting order and compare it with the contract. If all of them are valid, the bank will transfer money to the beneficiary’s bank and debit to the customer. Then the bank will charge money transferring fees. All accounting operations are performed by computers and printed into written documents to inform customers. There are three types of remittance: before, during and after the importer receives goods. Remittance before receiving money is the way in which bank’s customers as the importers must pay before receiving goods but are likely not to receive goods or get goods of inferior quality compared to the signed contract. Thus, Hoan Kiem branch often advices its customers to use the other two ways in order to avoid risks. However, choosing the way for remittance is due to the advantages of the parties in the commercial contract. The party who has advantage will select the way of payments or the method for remitting. The utilities that this method gives the customers when they make transactions at Hoan Kiem branch. Firstly, its procedure is simple and fast. Secondly, it is safe, secured and low cost. Thirdly, the method is investigated quickly through the wide and diverse agency system in many domestic and foreign markets. Lastly, trading by this method uses a variety of different currencies. International payment activities by this method of Hoan Kiem branch have changed dramatically, in 2006 it was just a remittance method through exports, but the following years have had perfect balance between exports and imports. At the end of the third quarter in 2011, payment turnovers via this method reduced not remarkably to USD 11.2 millions from USD 11.73 millions in 2010. This demonstrates that in fact the remittance method is not Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

preferred. The reason is for the characteristic of this method with unfair advantages between the two sides. However, attracting the small but regular transactions is expected to bring the development for the bank in the future. 2.2.2.2 Collection of payment This is an international payment method in which the exporter entrusts MB to collect the payments from the importer (buyer) based on the financial and/or commercial documents. MB gives these documents to the importer (to receive goods) only after the importer has fulfilled all the collection requirements. In the case of customers are committed to pay in written documents or sign the bill payments by the due date, the bank will deliver documents to customers. Then, the bank will notice the bank sending collection of payments about the purchaser’s payment acceptance with payment date be in the electric sample MT 412 and charge service fees. In other cases, if the collection side requires obligations of MB, MB has the right to refuse collecting except for agreements. In this payment method, Hoan Kiem hardly bears risks and its customers (importers) are also at fewer risks. The collection of payment method has some following benefits: * For export collections: 

Quick processing



Able to search information about the importer, to set up contract and select reliable correspondent banks



Fast tracking with a wide network of correspondent banks in both domestic and international markets



Reasonable fee



Minimized risk in foreign trading

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

* For import collections: Free verification of documents (invoices, bills of lading…) and



advisory. 

Simple procedure, quick processing and competitive price



Safe, secured procedures The proportion of international payments through collections method is

not very high in 2011 (just only 7.2%). The main reason is for the method is not the strength of Hoan Kiem branch. Moreover, enterprises engaged in exports and imports do not want to use this method because it does not guarantee benefits for exporters and has high rate of risks. However, the bank should try to advice customers to use this method when they start new business sales, offering sales…in order to develop in terms of quality and scales of this method. 2.2.2.3 Documentary credit (Letter of Credit) Letter of Credit (LC) is an irrevocable commitment of an issuing Bank to make payment on transactions whose supporting documents are properly presented. Based on opening L/C requirements and customers’ commercial contracts, Hoan Kiem branch opens a L/C. However, this is the method in which the bank must be at most risks in international payment methods because the bank has to take responsibility. The bank not only is an intermediary of payment but also be responsible for finance in paying for the foreign exports. At MB in general and at Hoan Kiem branch in particular, customers will get some following benefits as making transactions with the bank:

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

* For export LC 

Quick documentation processing



Consultant service for export contracts, LC condition, documentation and filing



Documents is strictly verified with high accuracy standard



Large and diversified banking agent system in multi-markets



Reasonable fee, free of charge for L/C announcement; able to modify/amend L/C in case customer presents/ discounts documents at MB

* For import L/C 

Flexible condition, simple and convenient procedures



Transactions are processed quickly and accurately



Assure profitability and save cost for corporations.



Minimize risk for foreign trade settlement.



Consultant service for international trade principles, customs and the most favorable terms and conditions while processing L/C related issues.



Large and diversified banking agent system in multi-markets



Preferred policy for loyal clients which have sound credit relationship history and use non-credit services at MB

In the process of opening L/C, Hoan Kiem branch often has to check many times to test the suitability of L/C with the contract, analyze the commercial contract to consider whether it brings benefits to the bank’s customers or not, investigate the factors related to goods, and check solvency of customers.

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

After sending L/C to the exporter’s bank, Hoan Kiem branch asks the importer for payments and makes payments for the exporter when they present all valid documents. In addition, as using this method in Hoan Kiem branch, there are some following certain requirements about documents and procedures:  For export L/C: 

L/C documents



Export settlement voucher (Original)



L/C and amendments (Original)  For import L/C



L/C issuing documents including: L/C opening request (Original -MB form); Foreign trade contract (Original/ Hard copy); Other documents (if needed) (Original/Hard copy); Domestic contract (if needed) (Original/Hard copy); Foreign currency exchange contract (if needed) (Original).



Other documents as requested in each period

This is a quite fair method for both exporters and importers. However, it is very complicated and risky for the bank because it requires high level of professional staff and modern machinery system supporting for payment activities. Despite of those complexities, Hoan Kiem branch has completed all the missions and fulfilled the plans of the recent years. Specifically, export L/C revenues of 2010 were USD 11.27 millions and up more than USD 7 millions to reach USD 18.56 millions in 2011. Moreover, there is the balance on developing between payments for exports and imports, which is a good Supervisor: Ph.D. Bui Ba Luy

37

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

signal for international payments of MB in general and Hoan Kiem branch in particular. 2.2.3 Summary of international payment activities at Hoan Kiem branch International payments are closely connected with many other activities in the bank. Therefore, improving the quality of international payments not only brings big revenues for banks but also helps to enhance business efficiency. Hoan Kiem branch has always attracted many customers from domestic and international market in international payment transactions by implementing preferential policies such as reducing some service fees, reducing interest rate for loans or discount rate… Moreover, the branch has provided services of foreign exchange, payment remittance, and individual remittances for customers. Enterprises and economic organizations who have transactions with the bank will be fully provided all requirements for payments and other related business in a closed and simple procedure with reasonable costs. In the operation of international payments, Hoan Kiem branch has made great efforts to meet customers’ international payment requirements in the best way. Quality and time of payment is gradually being improved. It has focused on material and technical basis for modernizing the payment technology, such as: SWIFT, Telex… On October 28 th 2011, MB introduced the product international prepaid card, the same brand with Viettel MasterCard Bankplus Prepaid. Bankplus MasterCard is aimed to the group of young and active customers by meeting fully the various payment demands of customers such as online shopping, making the payment of invoices, fees or expenses in the abroad trips. With the prepaid card, the customers can fully Supervisor: Ph.D. Bui Ba Luy

38

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

control their expenses as well as eliminate the risked related to the card usage. The money recharge becomes easy with many recharging channels and the transaction points over country of MB and Viettel. Moreover, when using this card, the customers are able to enjoy many preferences and outstanding services of MB and Viettel. Especially, customer who wants to register Bankplus MasterCard are able to using this card without opening account at the Bank, proving income, and keeping the minimum balance. Although in recent years, the economy of the country and the world have had many fluctuations, Hoan Kiem branch has made attempts to fulfill tasks in order to contribute remarkably to the whole bank’s benefits and bring great reputation to the customers. 2.3 Causes leading to restrictions of international payments activities at Hoan Kiem branch of MB 2.3.1 Objective causes o Inadequacy and lacking stability of Government policies Our country is in a period of innovation and development to integrate the international economy. There are many difficulties, shortcomings in the policy regime, legal system and legal framework governing the operation of international payments. Therefore, the regulatory environment continues to improve. In 2010, a series of legal documents were issued to improve the operating environment for the banking system as Circular 13 (19) and the Law on Credit Institutions in 2010. However Circular 12 (19) is rated inadequate and has been modified in the new circular issued on 30/08. At the same time, a number of existing regulations will continue to be added or

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

modified. From early 2011, banking sector has constantly many changes, especially about interest rates and credits toward no benefits for the activities of banks. State Bank of Vietnam continuously adjusted the interest operating in the direction of tightening the basic interest rates in VND and USD to control inflation and make macroeconomic stable. Firstly, the legal framework for activities of banks is not integrated, unpredictable, lack of transparency, not enough both ventilation and severe. This makes the application of international standards in enterprise governance and risk management very difficult. This limitation, coupled with outdated technology and poor human resources are major challenges for banking system in the medium term. Secondly, foreign exchange management policy of the government and state banks is still inadequate. The basis for determining exchange rate is not based on market value, may not reflect the reality, and make a large difference between the exchange rate on free markets and exchange rates on the inter-bank market. o Fierce competition in banking system There are many small banks with a hot credit growth. By the end of 2010, Vietnam's market has more than 101 banks and branches of foreign banks, including domestic commercial banks, foreign banks and foreign bank branches. Specifically, there are five owned commercial bank, 38 joint stock commercial banks, 53 banks with 100% foreign-owned and five joint ventures banks. According to the World Bank (WB), Vietnam has too many banks with small scale and its starting point is in rural areas but expanding operations in urban areas, so asset growth speed and loan portfolio development were overheating.

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

o Causes from customers Important factors from our customers are the level of knowledge and experience in finding partners. Customers are often lack of market expertise and without deep understanding of professional import and export payments. Specifically, exporters are failure to provide goods in accordance with the provisions of L/C even though importers who opened L/C have made bank deposits. Or exporters have delivered with delays due to not gathering and preparing timely. Sometimes is the problem with the validity of payment documentaries as: fake or untruthful vouchers, the content of goods not consistent with documents… 2.3.2 Subjective causes from the bank This is the important cause which directly influences on international payment activities of the branch. Hoan Kiem branch locates in the center area of Hanoi capital where there are many strong banks such as: BIDV, VietcomBank, VPBank and credit institutions as: Textile Finance, Oil and gas company…who have attracted large customers in the area. It indicates that customers have so many choices for their needs. In addition, the import and export commodities of Hoan Kiem branch are the kinds of common goods. Other goods such as machine tools, technologies are mostly in the overall competitive strategy of the other banks. Thus, Hoan Kiem branch has suffered enormous competitive pressure. Also, an employee of the branch must take quite a lot of work which make the resolution of inquiry sometimes slow and lack of accuracy. This pretty much affects service quality and customer impression for the branch.

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

CHAPTER 3: SOME SOULUTIONS AND RECOMMENDATIONS TO ENHANCE INTERNATIONAL PAYMENT ACTIVITIES AT HOAN KIEM BRANCH OF MILITARY JOINT STOCK COMMERCIAL BANK

3.1 Some factors making the competitiveness of MB increase 3.1.1 Quality of payment services Vietnam is in the open era of integration with the world’s economy. That is why the big names targeting a potential market as Vietnam is already predicted, such as HSBC bank with well-known headquarters in London, or one of the largest banks in the globe - ANZ. And such financial giants are ready to broaden their giant arms to extend their operation. This is no small challenge for commercial banks as confronting with foreign giants. Therefore there are more and more commercial banks like MB constantly expanding their branches network, modernizing service system, speeding up a professional servicing style oriented bank by customers in order to have a strong position in the open market. Up to now, MB has opened so many branches nationwide and had large branches network all over the country. MB understands that the quality of services is an important factor to raise the prestige and MB always gives the top priority for service quality. Therefore, MB in general and Hoan Kiem branch in particular are highly appreciated in terms of service quality. Bank’s customers always feel satisfied and have a good impression with the bank. This is a tool that MB uses quite effectively to attract customers. Up to now, MB has built much convenient services for its customers. Some main services are: banking service, investment service, insurance service and other ones. Supervisor: Ph.D. Bui Ba Luy

42

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

MB is currently working with a large number of correspondent banks including around 800 banks and branches bank in 75 countries and territories over the world, especially the top rankers in each of those countries and territories. In Vietnam, MB interacts with nearly 100 financial institutions including State-owned commercial banks, joint-stock commercial banks, joint-venture banks, 100% foreign invested banks, foreign bank branches, financial companies and other financial institutions. Saving products of MB provide VIP customers with perfect solutions, particular convenience and unique features, along with advices from Customer Relationship Senior Directors. As a MB Private Customer, he will enjoy the favorable interest rate for all kinds of deposits at the Bank. Particularly, deposit services are offered at his convenient location and timing in a fast, professional and time-saving manner. In addition to maintain its growth rate and bring stable income to shareholder, MB has grasped all chances to build its images and expand its customer system, which then formed basic foundation for its future development. The fact that MB had met various demands for financial banking services and products when other enterprises were struggling with difficulties and challenges under crisis helped MB set up relations with new customers, consolidate relations with existing customers and build loyal partnership. The position as well as the awareness of MB brand had been notably reinforced during the last years. The business profit, above-plan business results, improvement in financial and management capacity, operation stabilization and customer system expansion were some prominent successes of MB that can be named in the last three years.

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

3.1.2 Service fees The price of international payment product is fees that customers must pay to the bank for opening L/C services, remittance, issuance of checks, credit cards payments and guarantees. Fees have importance role in determining competitiveness. The ability to lower international payment fees depends on the cost of business services and capability of the bank. For large banks, the increase or decrease in fees of payment services is usually associated with that of the charges system in other banks. The fee tool can be used when banks enter a new market. However, they should use this tool in each appropriate time. They can increase gradually fees as the demand of the market rises, which makes large profits because customers are used to using their services and do not have enough time to change their selection to other banks. Or they can reduce costs to dominate the market of competitors indirectly through the sales promotion or increasing advertising. In general, costs of banking services are relatively stable elements to maintain the competitiveness. 3.1.3 Bank’s reputation Brand and reputation are very important things for a bank. If a bank is not prestigious, very few customers use the service and trust it in international payment. So, attracting customers is to pay higher fees than other banks, to bring much more utility than the big banks and to suffer advertising costs. By contrast, a large bank with reputation will be trusted to participate in the international payment services, and other services despite of higher costs. Firms who have payment with those banks are known as transacting with a

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

reputable bank and get the trust of business partners. Part of the reason, there are continuously occurring bank mergers, creating giant financial institutions to capture a large amount of assets in countries. The prestige of the bank must be established in a long time and the bank should always ensure good service quality, finish the job on time and guarantee the service in a long time relationship. Once you have credibility with the expansion of each transaction between the parties, you will be growing up quickly and conveniently. Customers will rely on persuasion and advice from bankers so that they will compare with selected banks, then cooperative banks are hard to appeal customers. This is the sharpest weapon of banks in competition. 3.1.4 Branches network and agency relationships Network of branches, representative offices and transaction offices will help the bank expand the scope of activities to more areas. Number of major bank’s branches not only attract customers to make payments or make use of services but also make convenient for customers in the following services: transfer money, receive money, check payment ... In addition, in international payments, banks should increase domestic networks and expand to international markets, the number of branches are constantly expanding. However, banks should account the cost for operating large transaction branches. The banks currently tend to put automatic teller machines with increasingly diverse functions, which can replace office buildings and personnel transactions. Besides, they also establish extensive relationships with international banks to increase bank profits in the field of money transfer,

collection,

foreign

Supervisor: Ph.D. Bui Ba Luy

exchange, 45

international

payments,

and

Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

international investment... Some banks have orientation to be an intermediary receiving the money among the banks together. They open accounts at most focal point banks in many countries in the world and enjoy charges from the international remittance services, foreign exchange... 3.1.5 Marketing activities The number of banks in Vietnamese market is increasing, the supply is growing and customers are facing too many choices. It is an objective review that banks are working hard in implementing marketing activities to enhance their image. The introduction of services and facilities of the service is under the influence of advertising promotion. This is an important weapon affecting the competitiveness of the bank. Advertising is the active promotion to attract customers to the bank's own products and create images of the banks in the consumer’s mind. Nowadays banks are using various means to facilitate activities in order to get customers for international payments as trading press brochure, phone book... The marketing methods are changing everyday, consumers nowadays do not need to go to the bank to deposit or withdraw money anymore; they can communicate by phone, counseling enthusiastic support and even just sitting at home to be served. Customers who often use banking services will be entitled to special offers, promotions of winning valuable items such as gold, cars, foreign travel... Banks have to identify that man is the most important factor in implementing the development goals of banking products and marketing development activities. So banks need to expand and improve the training of bank staff in Marketing. They can link with economic universities into training marketing. Moreover, banks may organize seminars, experience

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

exchanging within the bank; invite experts on teaching good Marketing, appoint the Marketing experience in attending the training course. In addition, banks should clearly identify the role of marketing activities for the performance of the banking business, avoiding duplication or overlap between the branches of commercial banks. 3.2 The direction of international payment activities at the branch in 2012 3.2.1 Orientation in general The objective of MB is striving to become the leading commercial banks in Vietnam, with active dynamic, diversified distribution channels, modern technology, business efficiency and safety , achieve sustainable growth, with a staff of professional ethics and expertise. MB is currently in the top of five leading joint stock commercial banks in Vietnam. However, the distance of MB compared to the bank on top is pretty far, because these banks have recently had strong steps to break through. Meanwhile, the distance of MB with the top banks in behind is not remarkable, and probably they will be on the higher rank than MB if MB does not change. At the same time, the economy is growing, integration trend is increasing, and international market has unpredictable challenges; so competition for survival and development between enterprises are increasingly fierce. Thus, MB should have an appropriate strategy to become the leading bank. The objective of the MB was in 2015 that, after developing strategy, MB will become a strong holding finance group in Vietnam and are firmly in the top of three leading joint stock banks. This is also the strategic objectives and aspirations in developing of MB. More importantly, MB wants to build itself into a very prominent and

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

differentiate bank, which is to become bank-friendly and convenient in the transaction based on five basic pillars:  Community banks with personal and SME customer segments  Bank of professionalism in CIB and Mid Corp customer segments  Bank with convenience in transactions throughout the customer segments  Superior risk management  Bank with the culture of providing fast, reliable, uniform high quality, also developing customer-oriented culture with high discipline and team spirit. MB has also determined ten elements to make a difference in the performance of the MB’s strategy: o Provide community banking services to SME customers o Provide MB private services with the products and services "red carpet" o Supply professional banking services to Mid Corp and CIB customers o Increase treasury activity towards profit center o Give prominent personal payment service o Supply solutions for package products chain o Build and operate risk management in an advanced and modern model o Improve procedures for credit; improve productivity and processing dossiers of good credit quality o Promote cultural strength of MB to deploy fast, efficiently, consistently with high quality o Promote the advantages of building a network of links with the military units

Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

In specific, the product mobilized from individual customers will be modified to suit each customer segment, and must be competitive in an environment full of challenges. Raising capital from the business plays a supportive role for the capital increase. Funds mobilized through the interbank market also contributed to the increase in operating capital. Credit growth rate in 2012 will continue to grow higher than that of 2011, and must still ensure that overdue debts rate is not over the level allowed and raise the role of the credit committee members. In addition, information technology continues to be improved in term of stability and security, development of new features, electronic banking products and management information systems. Specially, MB will improve the inspection and monitoring activities, close supervision of credit, centralized management of credit risks, partners, liquidity, interest rate, foreign exchange and operations. On that basis, the orientation of the MB in 2012 is: "Reasonable, Safe and efficient growth" to maintain their social standing and improve the competitiveness on the market, which is towards one of three large joint-stock commercial banks, the best quality service in Vietnam in the 2011-2015. The whole system of MB will perform well five targets in2012: o Implement the strategy in the 2nd year of the five year strategy 20112015, synchronously implement strategic vision and twenty initiatives; transform business scale and the value of customers. o Strengthen human resources development to increase the quantity, best quality, reasonable allocation of resources and attract good and talented people. o Strengthen and improve technology, invest software to increases the capacity of business administration.

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

o Focus on financial capacity: Increase chartered capital and focus on mobilizing. o Maintain their social position and improve the competitiveness of MB on the market, make political stable in all conditions.

3.2.2 Orientation for international payment at Hoan Kiem branch Targeting of further improving efficiency in the operation of international payment, Hoan Kiem branch set itself some basic tasks: Firstly, the branch build external business development strategies in a synchronous way to optimize overall competitiveness and make profitability for the bank. Secondly, the branch needs to promote the marketing, attraction of exportimport units; especially those operating units with large export. Thirdly, Hoan Kiem branch will expand trading relations with other sources of strong currencies to boost business performance and raising capital in foreign currency trading. It also strives to increase the foreign exchange trading services rate on the annual net profit. In addition, branch focuses on training and supplementing management and technical staff of international banking qualification; handling proficiently international banking, especially financial capacity in professional import and export transactions and international payments. Besides, the innovation of product quality and pricing services to meet the increasing demands of customers are also being focused more. Network of agent banks should be expanded in activities and be facilitated the convenient and easy payment. Currently, the banking system of the bank has in many countries around the world, however along with the development of

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

international payment operations; the banking system of this agent should be further extended to compete and grow with other banks. They will also focus on consolidating and completing payment towards international commercial banking model in accordance with the international trend of development in each stage. Lastly, Hoan Kiem branch will strengthen internal control systems and financial supervision to maintain healthy business operations, capital preservation and risk prevention.

3.3 Some solutions to expand the scope of international payment activities at MB, Hoan Kiem branch Through international payment activities and evaluation of international payment, Hoan Kiem branch found that there are certain limitations and constraints should be removed besides the achievements. Therefore, providing uniform and reasonable solutions should be done with the best strict efforts from the board of bank and bankers. Through this thesis, the author would like to present some key measures to develop and improve international payment activities at Hoan Kiem branch. 3.3.1 Improvement and development of service activities Demands and expectations of customers change over time. A product can fit them now but not fit them anymore when life circumstances and incomes change. Besides, the attraction of new customers is very difficult, especially to attract customers who are using products or services of competitors. It is therefore best to attract customers with suitable products and switch to provide them other products as circumstances change. There is no other way to get customers’ satisfactions that the Hoan Kiem branch constantly Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

improves and develops the products of its retail services. In addition, it is better to continue to improve tourism products lending, securities lending; and developing links with Viettel products, discount products, business loans for construction, lending in term of items and asset-based lending… Treasury activities remain safe. However Hoan Kiem branch should ensure accurate revenue and expenditure, sufficient time for customers, step by step implementation of transaction model in several affiliates. Besides, it needs to regard financial management with the implementation of cost accounting; delivery and performance test plans for business units to fulfill the plan set for the whole systems. For expenditure management, the bank implements the policy cycle savings, strictly observe the provisions of state spending, fulfill tax obligations, financial regulations promulgated in the entire system. Our country is moving closer to regional integration and international expansion of international economic relations. So the market has given the bank expansion opportunities. The international payment methods generate high safety in international sales to customers will be prevailed. Therefore, the liquidator should be mastered and deeply understood the process steps to minimize payment risks for customers and for the bank. Also, bank management must be updated promptly to members upon any changes in policies; procedures of international payments within our country and countries with economic trading relations. 3.3.2 Coordination between international payments and foreign currency exchange International payments and foreign exchange activities are not two separate activities. Foreign currency trading not only makes profits for banks

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

but also address the needs of other currencies for international payment operations. For more on the initiative of foreign currency sources, during the next time; the bank should further promote business activities in foreign currency to meet promptly payment activities. To prevent risks in foreign exchange, Hoan Kiem branch needs to apply the risk prevention instruments in this field, such as term-period foreign exchange contract (FORWARD), futures contract (FUTURE), a buy - sell option contract (OPTION), swaps (SWAP), and use more professional tools in foreign currency trading to be more active in preventing unforeseen risks arise. 3.3.3 Improvement of the level and professional skills of the staff Qualifications of staff working in international payments directly influence services quality. By assessing the capacity of bankers, customers can determine whether to use banking services or not. So, to have staffs that are qualified and deeply understanding of payment operations, the bank needs to: organize regularly professional seminars to exchange experiences and knowledge in solving problems, puzzle weaknesses of the staff working in international payments. At the same time, they need sending for training to improve their expertise, learn new business on the payment of international law, international payment practices so that the quality of staff payment not only is at the professional level, cultural knowledge but also on the independence, autonomy, creativity and a sense of responsibility with experience in the field of international payments. 3.3.4 Enhancement of trade financing activities In modern times, companies always need capitals to make investments in many categories. Moreover the value of imports generally account for a large proportion of the assets of the business, so business desired to be funded in Supervisor: Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

import payments. Thus, Hoan Kiem branch should have the norms for each specific customer. Because customers expect the little deposit of their funds, but the bank must sign margin of safety for the bank, so there is necessary to have margin level reasonable for both parties. Free collateral value is the financing to help customers pay for the business capitals and create higher business competitiveness. This will attract customers to the bank and raise customer loyalty for the bank.

3.3.5 Adjustment of service fee Service fee plays an important role in the international payment operations. Therefore, to expand its international payment, Hoan Kiem branch should continue to make adjustments to fit the trend of modern times. Moreover, there is necessary to have the incentives and promotions from reasonable time to time in order to attract customers to use their services. 3.3.6 Rebuilding regulations and conditions for L/C loans With a dynamic strategy, and the caution in stringent standards for credit and asset security make MB a leader in terms of revenue generation activities in the sector. On the other hand, they make MB become a bank with low lending rates and deposits and be among banks with spreads between lending and deposit interest rates at lowest level. However, there are many inadequacies in the old regulation that the customer does not respond well. Therfore, to expand its international payments in the future, Hoan Kiem branch needs to adjust regulations as well as lending margin requirements for account opening L/C.

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

CONCLUSION

In recent years, along with the socio-economic transformation, Vietnam's banking system also constantly innovate and develop, that is worthy of effective payment center of the economy and meet growing demand and high diversity of market mechanisms. Parallel to other activities, the international payment operations of commercial banks has contributed important part to business processes, improve the reputation of banks through trade finance activities and provides international products and services. International payment activities related to many sectors of the domestic and abroad economy. Thus the process of international economic development is constantly changing and influenced by many different factors. Besides the commercial banking system of Vietnam is in the development process, the proposing solutions to improve international payment operations of commercial banks is an objective factor. Based on the general theoretical research methods, objective and actual application, the thesis did give the following major contributions:  Firstly, the thesis systematized generally theoretical issues on the international payment operations of commercial banks  Secondly, the thesis analyzed and evaluate the status of international payments at Hoan Kiem branch of MB, pointing out the achievements and the causes leading to restrictions  Lastly, on the basis of the situation existing in Hoan Kiem branch; the study raised a number of solutions to expand its international payment .

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

REFERENCES

1. Annual reports of Military Joint Stock Commercial Bank 2. Reports on business performance in 2009-2011 3. International payment operations in foreign trade – Ph.D. Dinh Xuan Trinh, Education Publisher in Hanoi Foreign Trade University in 1998 4. International payment - Le Van Te 5. Dr. Nguyen Van Tien: International payment in foreign trade activities, Statistics Publisher in 2005 6. Dr. Nguyen Van Tien: Evaluation and prevention of risks in the banking business 7. International payments and financing imports and exports coursebook, Statistics Publisher in 2002 8. Times bank, banking magazines, Vietnam Economic Times ... 9. WEBSITE: http://www.militarybank.com.vn 10. Internal Journal of MB

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

CỘNG HÒA XÃ HỘI CHỦ NGHĨA VIỆT NAM Độc lập – Tự do – Hạnh phúc -----o0o----NHẬN XÉT CỦA ĐƠN VỊ THỰC TẬP Tên người nhận xét: .................................................................................... Chức vụ: ...................................................................................................... Ngân hàng: ................................................................................................. Nhận xét luận văn tốt nghiệp Sinh viên: Lê Thị Vân Lớp: CQ46/51.04 Chuyên ngành: Tiếng Anh Tài Chính, Trường Học Viện Tài Chính Đề tài: “International payment activities at Hoan Kiem branch of Military joint-stock commercial bank, current situation and solutions” Nhận xét: ..................................................................................................... ..................................................................................................................... ..................................................................................................................... ..................................................................................................................... ..................................................................................................................... ..................................................................................................................... ..................................................................................................................... ..................................................................................................................... Hà Nội, ngày 28 tháng 04 năm 2012 Người nhận xét

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

SUPERVISOR JUDGEMENT

Name of supervisor: Ph.D. BUI BA LUY Comment on Graduation thesis Student name: Le Thi Van Group: 51.04

Intake: 46

Topic: “International payment activities at Hoan Kiem branch of Military joint-stock commercial bank, current situation and solutions” Comment: ................................................................................................................ ................................................................................................................ ................................................................................................................ ................................................................................................................ ................................................................................................................ ................................................................................................................ ................................................................................................................ ................................................................................................................ ................................................................................................................ ................................................................................................................ Mark: - In number: .......................................................................... - In word :.......................................................................... Supervisor

Ph.D. Bui Ba Luy

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Student: Le Thi Van CQ46/51.04

Graduation Thesis

Academy of Finance

CRITIC EVALUATION

Name of the critic: Comment on Graduation thesis Student name: Le Thi Van Group: 51.04

Intake: 46

Topic: “International payment activities at Hoan Kiem branch of Military joint-stock commercial bank, current situation and solutions” Comment: ................................................................................................................ ................................................................................................................ ................................................................................................................ ................................................................................................................ ................................................................................................................ ................................................................................................................ ................................................................................................................ ................................................................................................................ ................................................................................................................ ................................................................................................................ Mark: - In number: ................................................................................ - In word: .................................................................................... Name of the critic

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