Main Findings & Analysis

Task 1
1.1 HSBC’s legal status and sector of activity:
a) Legal status – Private Public Companies.
After acquiring the big companies of Republic National Bank of New York
and other large corporations, HSBC established and became one of the
members of private limited companies on 31 December 1999. On 1 January
2014, the name "HSBC Private Bank” was used. “The use of the label ‘HSBC
Private Bank’ refers to HSBC’s worldwide principal private banking business,
and is not indicative of any legal entity or relationship1”.
According to Sustainability Report of HSBC (2012), after being listed on
five major stock markets including: London. Hong Kong, New York, Paris
and Bermuda in 2012, shares of the HSBC Corporation have held a fixed level
of 220000 shares in 129 countries.

Figure 1: The summary of HSBC in 5 years

1
Source: http://www.hsbcprivatebank.com
 - Activities of HSBC:
According to Dzhinggarow (2017), one of the advantages of Private Limited
companies is protect the shareholders from risk. To manage, create a risk-control
environment, HSBC has set up a model to consolidate the risk management
approach with three lines:

"Ther first line: responsible for identifying,

recording, reporting and managing the risk"

"The second line: responsibility for providing

advice and guidance in relation to the risk"

"The third line: responsibility for providing

independent risk management framework "

Figure 2: The lines to manage the risk of HSBC (Annual Report)

However, besides the advantages, the Private Limited Company also has
some disadvantages. One of this is "submit annual financial accounts” (Green,
2017). According to the book “Going Private” of Borden and Yunis(2016), the act
of disclosing internal information makes it difficult for companies to compete with
other competitors.
b) Sector: Services
Since 2006, HSBC in Viet Nam started to provide many types of services
such as: "domestic custody, supervisory services to domestic funds as part of our
suite of service to local fund managers" and it has occupied 65% market share in
this sector in Viet Nam.2

2
Source: https://www.hsbc.com.vn/1/2/global-banking_en/securities/fund
 Depending on the type of different function, these types of HSBC’s
services have different benefits. With HSBC in Viet Nam, the service offers
several benefits as follows:
 Create more competitive value for business. With a diverse industry
rivals such as bank. HSBC faces a number of large corporations - owning many
types of services such as Vietcombank, BIDV, ...
 "Advantages of world-class systems and technology".
HSBC is proud to be a modern and well-equipped modern bank
offering the most modern and up-to-date banking services.

1.3 The vision, mission, core values, goals and objectives of HSBC:
a) Vision:
Every company, every business has a different vision to become what they
looking for. With HSBC, their vision is “to be the Leading International Bank in
Viet Nam. Especially, HSBC in Viet Nam want to become a global, local bank with
the desire to understand customers everywhere”
b) Mission :
To exit and thrive, every company must follow their mission and HSBC
always focus on a mission is - co-image the top international banks by maintaining
the highest quality to satisfy their customers.
c) Core values:
Every company always has different own core values. For HSBC, it has
proud in 3 main values. First of all, HSBC always believes that they are one of
“the most dependable banks” that their customer can trust 100%. Secondly, it is
important to respect the different culture in different countries so HSBC "open to
different ideas and cultures". Thirdly, the company always has the "connection to
customers, regulators and each other". With these core values, HSBC always
strives to be transparent, accountable to all parties involved in its business by
honesty. With the goal of respect, sharing and mutual support, HSBC is always
interested in the internal and external parts of the company, forming a harmony
and development.
 d) Goals: All goals are set to find the ways, guide the company to
follow its objectives. Therefore, HSBC’s short- term goals are:
 Expanded international business network - Opportunity to open many
international banks in many countries
 Support and investment for businesses at local scale.
e) Objectives:
HSBC’s objectives are to
 Make better achievement in finance
 Improve, increase HSBC bank’s profit
 Invent more efficient services
 Develop and create more technology
 Develop marketing, advertise brand.
To examine the HSBC’s objectives, the S.M.A.R.T tool is used to derive
objectives and goals of HSBC.
HSBC’s objectives have 2 sections to finish its target: financial,
Specific
customer’s satisfaction.
HSBC's goals are difficult to identify because it is a short-term goal,
do not have long-term goals. Moreover, the plan in revenue of HSBC
Measurable
in 2017 is 3000 billion VND , growth 0,3% compared to 2716
billion VND in 2016 .
With an objective view of economics, international finance, the goals
set by HSBC are not beyond the reach of the company in the near
future 2020.
According to HSBC Vietnam, from 2016, total assets of HSBC
Vietnam reached nearly 72 billion. However, HSBC Vietnam's net
Attainable
interest income was more than VND2.200 billion, slightly higher
than in 2015. With this result, HSBC remains one of the leading
banks in the international banking industry. Moreover, it occupies a
large market share in this sector not only in Viet Nam but also in the
world.
 Although HSBC's operating expenses dropped by VND1845 billion
compared to previous years, loan loss provisions dropped sharply by
70% y / y, while HSBC's pre-tax profit stood at VND1805 billion
2017, an increase of 46% over the same period.
Moreover, with bad debt ratio accounting for more than 0.8% of total
outstanding loans - down 1.5% (2016) against 56,100 billion of
deposits of customers is a negligible number.
Therefore, it is easy to see that: HSBC can fully achieve the goals
they set out in 2018.
With a long history of development, HSBC has achieved many
prestigious awards, which have made a great resounding in the
international bgaan world.
"Best Foreign Bank of Vietnam” from 2006 to 2017 by “Finance
Asia Magazine”
"Best International Retail Bank of the Year in Vietnam” in 2016,
Realistic 2017 by “Asia Banking and Finance", ...
"Best Internet Banking for Business Customers in Vietnam" by
Global Finance.
…
With all these achievements, HSBC is confident that they are the No.
1 bank in Vietnam, ready to compete with other banks in today's stiff
market.
To get a success of goals and objectives, HSBC need to set up the
Time-bound
detail plan period until 2030.

In short, HSBC's goals are clearly reflected in the SMART table. Based on
that, we can see that HSBC had understudied and has very clear and definite
steps to achieve future goals.

1.3 HSBC’s balanced scorecard:

 Measures Results Target

2015 2016
Unit (VND) Revenue:

3.000 billion VND

Revenue 2.909 2.716

(billion)

Net income Profit before tax:

from business 1.439 1.863
Maximize 1.500 billion
Financial
stakeholders (billion)
Perspective
profit
Profit before
tax 1.229 1.801

(billion)

Bad debt rate 1,06% 0,84% Under 1%

HSBC always
In 2015 - 2017, HSBC
focuses on quality
has satisfied the needs of
products with the
its customers by
goal of " The best
providing a full range of
Customer Financial service service for
financial services from
Perspective customers ".
individual to collective,
including: “Personal
Financial Services” and
“Asset Management”,
“Corporate Finance”,
 “Global Financial
Services”,..
(HSBC.com.vn).

Create new services and Customer deposits

increase the quality of
Customers’ satisfaction
services to bring more
efficient.

Thanks to appropriate
long-term, short-term
plans and business
strategies, only in 2017,
Internal HSBC of Viet Nam has
Production line
Process increased its assets to
nearly 71 trillion dong.

- With high productivity,

the average profit per
employee is also
significantly higher nearly
 1.5 million dong.

Develop and create

- Leadership in
Payment Volume 2011 - more online
2016 and Leadership in
Learning & services: mobile
Employees’ behaviors Credit Payment Volume
Innovation 2011 – 2016 by Visa banking, online
- Top 3 Payment
banking, credit card
Volume by MasterCard
in 2015 payment

In short, from the Balance Score Card, it is easy to realize that HSBC is one
of the most efficient, effectives businesses in Vietnam. Although net income
fluctuates slightly in 2016, it reached more than 2.300 billion, go up slightly at 2%
compared with 2015. Moreover, not only does HSBC (Viet Nam) focus on the
financial, it also concentrates on improving customers services, customers
satisfaction and improve the staff’ working condition. From 2010 to 2017, HSBC
Vietnam regularly opens many talk shows and programs to contribute to the
development of Vietnamese education in many different provinces to advert their
brand. Especially, in 2018, "more than 1,300 HSBC Bank employees have pledged
to support a program: "Conservation and Management of Water Resources with
Community Participation" in 2 years. This project is designed to conserve water
`resources and bring clean water to communities in Tram Chim submerged area
and Vu Gia - Thu Bon river basin, Quang Nam province.

According to “The Young Knowledge Journal” posted on the website on

July 6 stating the reason why foreign banks withdrew from Vietnam was due to a
series of issues such as governance, the risks from many shortcomings while
corporate governance is limited, reducing the attractiveness of Vietnamese banks.
600,000 billion VND of bad dept of Vietnamese banks are the reason for the
withdrawal of international banks.

Task 2:
 Shinhan Vietnam is a subsidiary of Shinhan Financial Group, a Korean
financial group listed on the Korean and New York Stock Exchange. The bank
opened its first representative office in Ho Chi Minh City in 1993. In 2008,
Shinhan Bank was licensed and became one of the first five banks with 100%
foreign owned capital in Vietnam. . The Bank acts as a bridge for Korean
businesses to invest in Vietnam by providing and supporting financial service.
On November 28, 2011, Shinhan Vietnam acquired a 50% stake in Shinhan Vina
Bank and after that they changed its name to Shinhan Bank Vietnam.
 Goals, objectives, size and growth of Shinhan bank and HSBC:
a) Goals:
In fact, the common point of 100% foreign owned banks is to
focus on two distinct areas: investment and retail, especially retail the
market. Because of that, Shinhan is no exception. According to the
director Shinhan Bank Viet Nam: “We set our mid-term goal as growing
into “ Leading Financial company in Viet Nam” in 2020.One of the key
development strategies of Shinhan Bank has been to expand its retail
banking segment and focus on improving service quality in order to better
serve its customers”.
b) Objectives:
- Shinhan's objectives are to reach the revenue target of $ 2.5 billion by
2019.
- Shinhan Bank will attract more 500,000 card users, helping banks
from the 7th position to rise to the 5th in credit card market in Vietnam.
- Shinhan Bank will become one of the leaders of the field, with the
number of branches expected to reach 30 across the country.
c) Compare Size
According to Business Essential – Business Environment book (2010),
Media said that the sizes of another business always depend on some sectors: the
number of its employees, the figure of sale volume, assets employed, earned a
profit and net worth. Moreover, Scribd.com in 2015 suggests that involves
market share is the method of measuring the size of companies.

HSBC Bank Shinhan Bank

In official website, the number In Sustainable Development
of HSBC’s employees in Viet Report in 2016 of Shinhan
Nam is 1400. Bank in its official website, the
number of employees in Viet
The number of Nam is 1500.
labors  Both of banks have over 300 employees
Therefore, in Article 3, Decree 90/2001 of the
Government of Vietnam was signed on 23 November
2001 (Law on Enterprises, 2015) on the Law on
Enterprises, both of companies have been Considered
as big companies in the market and they are very
competitive with other businesses in Vietnam.
Customer Around 47 million customers Around 3 million customers
through four Global
Businesses.
Assets Growth In 2016, assets growth of In 2016, assets growth of
HSBC Bank Viet Nam are Shinhan Bank are 33,32%.
26,84 %

Total Assets: Total assets of HSBC are Total assets of Shinhan Bank
71,138,048 VND go 30% over 2015.

In conclusion, with all the information collected about the different criteria
(mentioned and analyzed above), HSBC and Shinhan Bank are big organizations
in Vietnam. With such size and scale, these two banks are the promising bank
model, full of opportunities for development of Vietnam in the future.
d) Growth and sustainability:
 HSBC: Applying the modern technology including: Touch ID to
allow their customer to access their account easier.
 Shinhan Bank: Promoting the development-oriented policies that
support productive activities, decent job creation, entrepreneurship,
creativity and innovation, and encourage the formalization and
growth of micro-, small and medium-sized enterprises, including
through access to financial services. Moreover, Shinhan Bank want
to support startup businesses and SMEs to contribute to create
decent work and growth sustainable for them, In addition, providing
job training opportunities to the youth from low income families to
help them become financially independent.

 Stakeholder:
According to the book Business Essential, Stakeholders are people or
individual who relate and have an interest and power impacting on the business
operates.
Stakeholders can be category into 3 groups: connected stakeholders,
internal stakeholders and external stakeholders.
 Figure 3: Stakeholder’s map of Shinhan Bank
a) Shareholders
Shareholder is one of the factions which belong to connected stakeholders
group. Shareholders play the most important roles in a company due to they have a
certain impact direct and indirect ways of the business in different fields.
Shareholders are the people who can join in the election of Board of Directors of
Shinhan and make a decision of the heritor in charge of the company in Vietnam.
Moreover, Shinhan’s shareholders can follow and continue to provide their flow of
money by using their money to invest. Because of this way, the growth rate of
Shinhan's Bank increased dramatically and the interest from another shareholders
growth enormously. In addition, their attention and objective are to earn the
maximum profit and lost minimize the cost. According to Sustainable Report of
Shinhan Bank in 2016 on an official website; they always respect shareholders so
the relationship between Shinhan Bank and their shareholders become closer.
Shinhan has also created and introduced an Investor Department to improve, make
these relations are better to receive more investment and more recommendation
from them. This has shown the important role of shareholders in this Bank.
b) Employees
Employees are the core stakeholders in Shinhan Bank, they have played
an integral, have a close connection with others position in these company.
Although employees are the stakeholder like shareholder but both of them are
not the same. Employees do not care about the number of investment, the
partner companies,... but they also ensure that the efficiency and the
productivity of company every month. This’s the main reason why employees
play an important role in groups of stakeholders. The development of Shinhan
bank can say that based on the development wholeheartedly of their
employees. They try so hard to create, provide the best efficient product and
services for the customer while their objective is salary, soft skills,
opportunities, welfare, bonus and much different insurance like health care,
safety... From Drucker’s view in 2012, employees are factors that directly
affect customer service. They are the ones who create, operate and distribute
the type of service that customers demand, the desire to consume. Therefore, if
the business owner has any discrepancies in operating the staff, the customer
service will be affected. For that reason, employees also need to be cared for,
depending on the department and management. There will be a different model
of care with many policies and working conditions. So understanding:
employees are the key to the development or failure of a company, Shinhan's
services rely on the productivity of each employee to make every decision. The
more satisfied the customers and the employees are, the higher profit of
Shinhan get. Because of that, according to the website of Shinhan, they have
some policy to protect their employees like:" do not discriminate depend on
other ways and create a safer work environment to improve the work time of
our employees.