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Financial Institutions in Vietnam

A topic of my students in University of Finance and Marketing - Vietnam 2015

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Financial Institutions in Vietnam

  2. 2. hello! WE ARE GROUP 1 We are going to give presentations about Viet Nam financial institutions. Nguyễn Hoàng Vĩ Nguyễn Thái Bảo Hoàng Khánh Linh Lê Ngọc Diệp
  4. 4. 1. THE OUTLOOK of FINANCIAL MARKET The case of Viet Nam
  5. 5. “Monetary market Capital market 1993 1994 2000 1995 2000 1995
  6. 6. The capital flows in the financial market Direct financial market Capital suppliers Capital needers Financial institutions
  7. 7. 2. Financial institutions-FIs Introduce
  8. 8. definition of FIs
  9. 9. “An establishment that focuses on dealing with financial transactions, such as investments, loans and deposits
  10. 10. Let’s review some types of FIs Commercial bank ◎ Trade currency ◎ Provide banking services. Such as: take deposits, loans, investments Finance company ◎ Raise capital by issuing bonds, stocks, short- term value papers ◎ lending Leasing finance ◎ Leasing is the active medium & long-term credit ◎ Lease machinery, equipment, movable,... Credit union Mobilize capital from members Only make loans to members Non-profit activities Thrift institution Mobilize capital by receiving deposit Make loans Insurance As financial intermediaries with regular activities and mainly premium income to form insurance funds, using fund to compensate it for the loss insured the risky and insured.
  11. 11. Let’s review some types of FIs Pension fund ◎ Raising capital: Wages and income of workers periodically. ◎ Use capital: Payment of pensions after employees retire ◎ Managed by state or private Mutual fund ◎ Raising capital by issuing Fund certificate and use such funds to invest in securities ◎ Close fund and open fund Money market mutual fund ◎ Invest in the monetary market
  12. 12. Abstract the using and raising funds methods of FIs
  13. 13. Capital raising Capital using Other activities Commercial bank Deposit Credit granting, investments Providing payment services Thrift institution Deposit Mortgage loans Providing payment services Insurance company, pension Premium invest in safe security Finance company Bond, stock, short- term paper Consumer credit granting Mutual fund, MMMF Fund certificate invest in securities, instruments
  14. 14. THE FUNCTIONS OF COMMERCIAL BANK Capital deposit Commercial Loans Capital suppliers Bank needers ✘Credit intermediary ✘Payment intermediary ✘Make money function
  15. 15. Distinguish FIs and credit institutions FIs Credit institutions
  16. 16. 3. FIs in Viet Nam Review
  17. 17. 3,000 billions Whoa! That’s a big number, aren’t you care?
  18. 18. Legal Capital Commercial bank 3000 billions Development, policy bank 5000 billions Foreign bank 15 millions dollar Finance company 500 billions Leasing finance company 150 billions Life insurance company 600 billions Non-life insurance company 300 billions
  19. 19. Want big impact? Use big image.
  20. 20. definition of Bank Following the law on credit institution 2010
  21. 21. “Bank means a type of credit institution which may conduct all banking operations under the law on credit institutions
  22. 22.
  23. 23. According to Circular 22/2011/TT-NHNN, Circular 22 would cancel the ratio of credit granted from funds mobilized stipulated in Circular 13 is not more than 80% for banks and 85% for non-bank credit. No Type of credit institution Ratio of granted credits to mobilized capital 1 State-owned commercial banks 96.74 2 Joint stock commercial banks 79.45 3 Joint venture banks, foreign bank branches 67.29 09/2015 (
  24. 24. Interest income and non-interest income Interest income from lending is mainly the core revenue, represents 70 to 80% of net income
  25. 25. Cross- ownership
  26. 26. ✘ Cross-ownership increases the difficulty for the measurement of bad debt ✘The rise in cross-ownership also reduces competition of banks.
  27. 27. Bank system of Viet Nam currently ✘Over 90% of the share capital of the bank is now short-term funds, Average mobilized capital term tends to shorten while the average loan term is longer.
  28. 28. Security company the case of Viet Nam
  29. 29. Want big impact? Use big image.
  30. 30. The developmental process of security companies 4 100 2000 Nowaday 35132 billions
  31. 31. Place your screenshot here On July 20th 2000, the Ho Chi Minh City Securities Trading Center was officially put into operation and executed the first trading session on July 28th 2000 with 2 types of listing stocks. Stock exchange
  32. 32. Place your screenshot here x the HNX has organized share auctions, Government Bond biddings to mobilize capital for the State budget. x the HNX has operated three secondary trading markets on a modern technological structure, including listed stock market, Government Bond market, and UPCOM
  33. 33. Fund manager the case of Viet Nam
  34. 34. estate investment fund Management company Vietnam Property Holding (VPH) Saigon Asset Management Bao Tin Real Estate Fund Bao Tin Capital Vietnam Property Fund (VPF) Dragon Capital Indochina Land Holdings Indochina Capital Aseana Properties Ireka Corporation Berhad Vietnam Real-Estate Development Fund Korea Investment Trust Management …. ….
  35. 35. Finance & leasing company the case of Viet Nam
  36. 36. Finance company Authorized capital Post and Telecommunication Finance Company Limited 500 billions VND Rubber Finance Company 1089 billions VND Maritime Bank Finance Company Limited 500 billions VND EVN Finance Joint Stock Company 2500 billions VND …. …..
  37. 37. Leasing finance company Authorized capital VINASHIN Finance Leasing Company Limited 300 billions VND Kexim Vietnam Leasing Company 282 billions VND Asia Commercial Bank Leasing Company Limited 200 billions VND Industrial and Commercial Bank of Vietnam Leasing Company Limited 800 billions VND …. …..
  38. 38. Financial leasing company Some companies are almost over and focus on processing non- performing loan Almost firms don’t know this service Loss in a long time They has become feeble and has to face up to dark future
  39. 39. INVESTIGATION OF AMONG 1000 COMPANIES FROM EVERY FIELD WHY ???? 20% - don’t know about this service 70% - they know very few about FLC or never learn about FL service before The others even think of financial leasing similar to installment financing
  40. 40. Insurance the case of Viet Nam
  41. 41. Non-life insurance ✘Nowadays, there are some big life insurance companies. Such as: PVI, Bao Viet, Bao Minh, PTI, Samsung vina, PJICO,… ✘In the first 6 months of 2015, the sale of the non-life insurance market is 15.329 billion ✘PVI gains the highest sale, 3.342 billion dong, increasing 3.37%.
  42. 42. life insurance ✘1996, (Bao Viet) is permitted to establish by Finance Ministry. ✘Nowadays, there are some big life insurance companies. Such as: Bao Viet, Prevoir,... ✘The life insurance companies occupy the high total premium & market share, that include: ....
  43. 43. 4. The solutions for Viet Nam Research
  44. 44. Study from US
  45. 45. Ways to strengthen FIs in US One Associations of insurance and banking operation in American States issued many strict laws of opening the financial intermediary Two The FIs’ s record is checked monthly. They must make some necessary informations available for the public Three The FIs are limited about assets that they can hold The government bans them doing some risky operations Four The government protects the capital suppliers to avoid the loss when FIs go bankrupt Five The government reduces the branches of FIs The bank is banned to open new branch in some state of US Six The government also reduces the competition among FIs by managing the saving interest rate
  46. 46. thanks!