Tran Huong Giang_10160106_BBE_A1

Table of Contents

Introduction ...................................................................................................................... 3

Executive Summary ......................................................................................................... 4

Major Findings ................................................................................................................. 5

Task 1: Write a report to explain the type and purposes of PVcomBank: ............ 5

1. Explain the activities of PVcomBank in the respects of legal status and

sector. ......................................................................................................................... 5

2. The vision, mission, core values, goals and objectives of PvcomBank ........ 6

3. The performance of PVcomBank ................................................................. 10

Task 2: Write a report to explain the size and scope of different types of
organisations: .............................................................................................................. 14

1. The differences between PVcomBank and Vietcombank........................... 14

2. Choose one of the two banks above, explain the importance of

stakeholders by using stakeholder mapping. ....................................................... 15

3. Analyse the how PVcomBank meets the stakeholders’ interests and

expectations ............................................................................................................. 18

Task 3 (LO2: P3, M2, D1) Write a report to demonstrate the interrelationship of
functions of PVcomBank: .......................................................................................... 19

Conclusion ....................................................................................................................... 23

References ....................................................................................................................... 24
 Introduction

Among many banks in Viet Nam, PVcomBannk is quite a well known bank despite its young age. In

2013, PVcomBank was established and run its operation. During these years, this bank has always been

trying to improve and develop its services.

In this report, I would like to explain the legal status and sector of PVcomBank, the vision, mission,

goals of the bank. The S.M.A.R.T tool and Balanced Scorecard are used to evaluate the objectives and

performance of PVcomBank. Then, I would like to compare the main differences between PVcomBank

and Vietcombank. Vietcombank is also a well known bank in Viet Nam, which is a potential bank with

their growth speed. After the comparison, the importance of PVcomBank’s stakeholders and how

PVcomBank meets the stakeholders’ interests and expectations are also provided. Lastly, the structure

of PVcomBank and the interrelationship of functions of the bank will be given.

 Executive Summary

The report shows the analysis about PVcomBank. This bank reorganized their system after the

association between Petro Finance Vietnam Corporation and Western Bank. Having a clear view of the

goals and objectives as well as the performance of PVcomBank will be an useful tool to evaluate the

working and developing process of the bank. Furthermore, when comparing PVcomBank and

Vietcombank, we could see the potential of both bank and look for the way to put more efforts in the

innovative process of the banks.

 Major Findings

Task 1: Write a report to explain the type and purposes of PVcomBank:

1. Explain the activities of PVcomBank in the respects of legal status and sector.

a. Legal status

As being mentioned in The Business Environment book (Ian W. & Chris B., 2006), there are three

primary kinds of legal status which are sole trader, partnership and company or corporation. Besides

that, the company acts discriminate between Public limited companies and Private limited companies.

Under the Decision No.279/GP-NHNN by the State Bank of Viet Nam, Viet Nam public joint-stock

commercial bank (PVcomBank) was established. On 2013, PVcomBank started its official operations.

The bank has the total assets of approximately 100000 billion VND and the charter capital of 9000

billion VND. The largest shareholder is Viet Nam Oil and Gas group and the strategic shareholder is

Morgan Stanley, accounting for 52% and 6.7% respectively. (PVcomBank, n.d)

According to the theory in The Business Environment book and the status of PVcomBank, this bank

is a public limited company.

 b. Sector

- The private sector is a part of the economic system in a country where individuals and companies

operate it rather than by the government. The purpose of earning money is the main reason to run this

industry in organizations.

- The public sector: Unlike the private sector, each part of the economy is under the control of the

government.

- Voluntary Sector: This is the third segment an organization created for charity and nonprofit

activities.

The activities of PVcomBank involves in mobilization of capital, permiting payment and credit, do

the transfer services. This means PVcomBank provides service product, which makes up the tertiaty

sector (Jacqui J., 2013).

Besides, PVcombank is managed for the purpose of making money from different companies.

Although PVN belongs to the government, it does not directly deal with PVcombank. Therefore, this

organization is the private sector.

2. The vision, mission, core values, goals and objectives of PvcomBank

a. Vision:

In the Annual Report of PVcombank in 2016 (p.4), the company showed its vision is to “Became one

of the seven leading commercial joint-stock banks in Vietnam in terms of asset size by 2020.”

b. Mission:

PVcomBank missions are to “Bring the best financial services to the customers, increasingly add

value to shareholders, build a professional working environment for staff and contribute to the

development of the community.” (The Annual report of PVcomBank, 2016, p.4).

 c. Core value:

According to the The Annual Report of PVcomBank in 2016 (p.5), the core values of PVcomBank

includes:

• Customer-centric

• Humans are the most valuable asset

• Honesty is placed first

• Effectiveness is always valued

d. Goals: (The Annual Report of PVcombank, 2014).

- In quality of service, strive and develop the provision of financial services and banking

solutions.

- In terms of image, PVcomBank will be a friendly bank, stay close to customers and follow the

slogan "Gapless banking."

e. Objectives of PVcomBank: (the Report to General assembly of shareholders of PVcomBank in

2016)

- Objective 1: In 2017, PVcomBank targets chartered capital of 9 triliion VND, with their turnover

reached 6500 billion VND, profit before tax reached 87 billion VND.

- Objective 2: Develop the risk management system to follow the Basel II.

- Objective 3: In 2020, PVcomBank will settle the main problems which are loans, restructure the

debt repayment and investment outside the sector.

To evaluate the objectives of PVcomBank, the S.M.A.R.T tool is being used:

 Access Explaination

Objective 1 √ The objective has been given in

detail with clear number.

Specific target Objective 2 √ The objective gives clear

information.

Objective 3 x The objective gives the idea but

it is still general.

Objective 1 √

Measurable target Objective 2 x They did not describe how to

reach the objective.

Objective 3 x There is no data in the objective

to evalute.

Objective 1 √ PVcomBank is raising the

financial capacity, improve the

asset quality and try to work on the

bad debt. This is why the objective

can be done.

Attainable Objective 2 √ The objective can be done

because the credit risk

management has already been

strictly controlled through the Risk

Management Committee.

Objective 3 √ The objective can be done

because the restructuring plan has

 been submitted to the State Bank

and it will be approved.

Objective 1 √ The goal of this objective is not

too high compare to the finacial

statement of PVcomBank in 2016:

charter capital was 9 triliion VND,

turnover was 6746 billion VND

and profit before tax was 65.4

billion VND. This is why the

objective can be achived.

Result-orriented Objective 2 x The objective did not give a clear

data to orient

Objective 3 √ In 2017, PVcomBank has

collected 1229 billion VND of

debt collection. This data has a

raising trend.

Objective 1 √ The objective sets the time to get

the target in a clear way.

Time bounded Objective 2 x The company does not mention

about when they can achieve this

objective.

Objective 3 √ The company gives the year they

think they will achive the

objective.
 Following the S.M.A.R.T tools, the objectives of PVcomBank is not SMART because it can not

reach all of the conditions mentioned.

3. The performance of PVcomBank

To analyse the performance of PVcomBank, the balanced scorecard is used:

Objective Measure Target Result (in 2016) Initiatives

Develop sales, Total assets 2016 -2020 114 billion VND Publish more shares

trading and

mobilization Net sales 65 billion VND Reduce credit

investment
Financial

Profit after tax 66 billion VND

Implement the

reorganizational

Increase stock Charter capital 9000 billion project

value VND
 Reducing waste, Bring the Saving 375,000 Apply technology

make an efficient evaluation of the papers per year and Lean 6 Sigma

process and speed program “Secret model

up customer” Outstanding

consumer Develop the

Satisfy the lending is 67% internal training

Internal Process

customers

Awards: Develop the

Include stronger Brand identity Familiar “Advertising marketing process

marketing with Campaign of the

customers year” and Run the program

“Website of the “Weighting the

year” internal marketing

practice”
 Speedy purchasing Customers’ 100% of the Create new

process and satisfaction customers products for this

dedicated services show the new customers

satisfaction group
Customers

The network of Net profits 52 billion 101 billion VND Create new profit

prioritized VND from this new

customers customers group

New customers 16,000 new 18,163 new

from prioritized customers prioritized Bring more

groups customers customer service

 Pay attention to the Involve the Awards “Mobile Based on the Smart

strategy of the bank employees to Banking Vista model and

the training Initiative of the EMV for security

Improve the programs Year – Vietnam purpose to develop

qualities of service 2017” and “Core the cards

Profits from the Banking System

Satisfy the needs of technologic Initiative of the Finish training

Learning and Growth

customers services Year – Vietnam program about risk

2017” management

Expand the brand’s Evaluation of

branches products’ Create new

quality Complete the 1st evaluation method

Reorganization of stage of the and product

the system Growth in Reorganizationa development

branches l Project,

successfully

break into PVN

 Overall, the balanced scorecard of PVcomBank shows that the bank always try to manage the

problems and mistakes in business in order to maximize profit. To satisfy the customer,

PVcomBank focus on restructuring and dealing with overdue debt, as well as develop the

internal systems for money transfer and management. In 2016, PVcomBank separated the

segment of microenterprise customers and upgrading the product system. Therefore, the

performance of PVcomBank is effective.

Task 2: Write a report to explain the size and scope of different types of organisations:

1. The differences between PVcomBank and Vietcombank

a. Goals:

PvcomBank Vietcombank

- In quality of service, strive and develop - Become the leading Retail Bank and Top 2

the provision of financial services and banking Wholesale

solutions. - Maximum the profit scale with high

- In terms of image, PVcomBank will be a profitability

friendly bank, stay close to customers and - Have the best evaluation from customers

follow the slogan "Gapless banking." - Best risk management bank

- Manage human resources in the best way

b. Objectives:

PvcomBank Vietcombank

- In 2017, PVcomBank targets chartered capital - Try to reach high profitability: ROE is 13% -

of 9 triliion VND, with their turnover reached 15%, ROA is at least 1%.

6500 billion VND, profit before tax reached 87 - Bring the most convenient products and

billion VND. services; improve the customer service.

- Develop the risk management system to follow - Achieve highest employee productivity and

the Basel II. engagement (highest EES ratio)

- In 2020, PVcomBank will settle the main - Initiate and improve the application of Basel II
 problems which are loans, restructure the debt since 2018

repayment and investment outside the sector.

c. Size:

PvcomBank Vietcombank

- Number of employees: about 4,300 - Number of employees: over 15,000

- Total revenue: 645,081 million VND (in - Total revenue: 789,707 million VND (in

2016) 2016)

 PVcomBank is a large company  Vietcombank is a large company

d. Growth & Sustainability

PVcomBank Vietcombank

Total assets Increase by 12% Increase by 68%

CSI Top 10 sustainable service

organization in Viet Nam (2016)

2. Choose one of the two banks above, explain the importance of stakeholders

by using stakeholder mapping.

In this part, I will choose PVcomBank to evaluate the importance of stakeholders.

According to Business Essentials of BPP Learning Media (Essentials, 2016), there has three main

stakeholders: internal stakeholders (employees, managers), external stakeholders (government, the

community) and connected stakeholders (shareholders, suppliers, consumers). Each stakeholders

 bought the shares of an organisation with their own purposes. Stakeholders can affect the business

of an organisation in both direct and indirect way. However, because each stakeholder has different

level of interest and power, the organisation need to pay attention to treat them in a proper way.

For PVcomBank, the most important stakeholders are employees, customers and shareholders.

a. Employees:

Whilst the employees work for a financial institution, the organisation need to be professional and

efficient to meet customer needs.

In the company's annual report in 2016, PvcomBank has mentioned their core values, with the

workforce is one of their valued resource, demonstrating the importance of employees in their industry.

Although employees have low power due to the Stakeholder mapping, it can see that they have high

interest and because of that, they are the ones who with balance all the activities of the business. They

can minimize the problems of a company in order to improve the quality of their workload.
 b. Customers:

The role of customers is very important for a business like PVcomBank although it is in a low power

and low interest due to Stakeholders mapping. It can bring the failure of success to the bank in a direct

way. PVcomBank always try their best to satisfy the customers and in 2016, when there is more and

more new customers join in the market through PVcomBank, their roles is getting more and more

important. Besides, the banking industry in Viet Nam is substitutes with not only PVcomBank but

many others banks, this is why the demand of customers has always had a high awareness from the

bank.

c. Shareholders:

The most important stakeholders for PVcomBank is the shareholders.

When it comes to the missions of PvcomBank, they mentioned that besides the services for

customers and the community, they also want to add more value to shareholders.

From the chart above, the largest shareholder is Viet Nam Oil and Gas group and the strategic

shareholder is Morgan Stanley, accounting for 52% and 6.7% respectively. (PVcomBank, n.d). The
 shareholders have a great influences in PVcomBank, when they decide who can be the Director of

the company.

3. Analyse the how PVcomBank meets the stakeholders’ interests and

expectations

The conflict of interests among every stakeholders is inevitable because each of them has different

goals when they come to the bank. However it is important for PVcomBank to find the solutions for

each.

There has conflicts between employees and customers in banking services. Banking customers in

Vietnam often do not understand the system and have many answers about the service. Instead of

checking the rules and try to know how to follow it, they usually directly ask bank staff, financial

expertise, rather than support the customers. Banks want to focus on their expertise, especially at the

end of the quarter when they have to prepare the report. During that time, employees are under a lot of

pressure and all they want to do is focus only on their workload. PvcomBank employees have the same

problem.

Fortunately, PvcomBank successfully resolved this contradiction. By 2016, they preferred Branches

of Clients and added the Center and Business Center and concentrated their resources to serve business

customers. (The report in shareholders meeting of PVcomBank, 2017). In this way, they combine two

interests from employees and customers together. Customers have their own support services to answer

questions and give advice on the right decisions and when they encounter this problem from an

individual customer, PvcomBank also connects with corporate customers. Workers can focus on their

expertise and new departments can create job opportunities.

 Task 3 (LO2: P3, M2, D1) Write a report to demonstrate the interrelationship of

functions of PVcomBank:

3.1

There are 5 main structures:

- Functional organizational structure has a group of activities that share the same purpose or

function.

- Product-based organizational structure has multiple workgroups, with each holding responsible

for a particular product or service. A specific part of the organization may have different

functional aspects of it having a specialist.

- Divisional organization structure split the organization into closed business units, each

operating as a profit center.

- The matrix organization structure combines functional components built around products,

projects or programs and then arranges them into matrices. Such a matrix has two flows: powers

and responsibilities.

- The project team differs from all of the mentioned above, as it is only temporary, being set up to

complete a certain task and usually in highly unstable conditions. After the completion of the

work, the disbandment is carried out, then the individuals return to their original or assigned to

a new job.
 It can be seen that PVcomBank follows mixed structure. This bank has 8 sectors which can be

classified to 3 areas: business segment, support segment and middle segment. It is applied the

functional organisation structure in the business segment and the divisional organisation structure in the

support segment. 8 sectors of the bank are:

1. General Shareholders: they own the capital in the bank, they can choose the people to stand in

the Board of Director.

2. Board of Supervisor and Internal Audit: they evaluate the application of law, the internal audit

and the arrangement of Board of Directors and Shareholders.

 3. Board of Directors and Administration Office: they operate, cover and manage all the activities

of the bank daily

4. General director

5. Party committees

6. Office of Board

7. Transaction units

8. 16 specialized blocks

Applying mixed structure of functional and divisional can bring some advantages to PVcomBank.

Firstly, dividing the company into smaller parts help the head to manage better and the results of each

group can be improve. For instance, in 2016, the bank classify the potential customers (whose the net

profit is 101 billion VND), or 100% of the retail products were used effectively. Moreover, the

functional structure offer the efficiency to the system because within the functional area, the employees

can minimize or eliminate the problems.

According to Lumen Learning Courses (n.d), there are some disadvantages of the divisional structure

which are the uncontrollability, the unfairness in expenditure and the ineuality of workload. By mixing

this kind of structure with the functional one, those disadvantages can be limited.

3.2

In PVcom Bank, two main shareholders are PetroVietnam (PVN) with 52% of the shares and Morgan

Stanley with 6.7% share of the shares. PVN belongs to the Government and Government owned by the

State Bank of Vietnam (SBV), which means PVcomBank always has the support of the SBV. Morgan

Stanley is one of the global premier services in global business planning services, financial services

operations and financial management support, so all strategic discussions are held between the
Governing Body and Morgan Stanley. It is undoubted that this two biggest shareholders have a great

impact on PVcomBank's business.

Foreach decision that Government makes is always consulted by Morgan Stanley, so the two largest

shareholders are extremely influential to the Board if Diretors.

About the department, it is divided into two parties: the internal business within the company and the

external part.
 Conclusion

By doing this report, I have the opportunity to know more about some information of PvcomBank,

such as the legal status, the economic sector, the vision, mission, core values, goals and objectives as

well as the performance of PvcomBank. The S.M.A.R.T has been used to assess the objectie of the

bank and the Balanced Scorecard has also been given to evaluate the performance of the bank.

After that, I use the Stakeholder mapping to see the most import stakeholders of PvcomBank. The

comparison between PvcomBank and Vietcombank also help me to have more knowledge about the

banking industry. Moreover, the effective structure of PvcomBank also teach me about how a company

use each kind of structure to improve the quality and profit.

References

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