ADVANCED

COMMERCIAL
BANKING

Nguyen Thi Hai Hang, Msc

Faculty of Finance and Banking
University of Economics and Law
FFB– University of Economics and Law
 ELOs

Develop professional skills

Having the ability to apply the theory to solve situations

arisen in actual business activities of commercial
banking

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Course assessment

FFB– University of Economics and Law

 Course assessment
 In class progress:
 Percentage: 30%
 Methods: Homework, quizs (Mindtap), discussion and
presentations
 Mid-term Exam:
 Percentage: 20%
 Methods: Multiple choice (30 questions), Short-answer
Questions (5-10 questions – true/false, explain for false)
 Duration: 60 minutes
 Final Exam:
 Percentage: 50%
 Methods: Multiple choice, Case study
 Duration: 60 - 75 minutes
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 How shall we learn for this course?

to get the principal knowledge through the lectures.

to consolidate the knowledge through self-taught learning with
supplementary materials, and by doing exercises after lesson.
to have discussions on the subject between students, or between
students and the lecturers in the lesson or after the lesson.
to have an extensive reading on the reference materials in addition to
the textbook

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 Course requirements

Attend at least 70% lessons as regulated

Read compulsory references required by lecturers
Complete all the assignments for group and individual
Prepare discussion assignment and other practices.
Comply with classroom discipline

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 Course materials

Center for financial training, The US Banking System, 3rd

edition, Cengage Learning
 www.sbv.gov.vn
Website of commercial banks in Vietnam.
Related law documents
…..

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 Course content

Money mobilizing activities

Credit extension activities
Payment services
 Domestic payment
 International payment
Other activities

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 Remind
1.Credit institution means an enterprise conducting one. some or all
banking operations. Credit institutions include banks, non-bank credit
institutions, microfinance institutions and people's credit funds.
2.Bank means a type of credit institution which may conduct all banking
operations under this Law. Based on their characteristics and
operation objectives, banks include commercial banks, policy banks
and cooperative banks.
3.Commercial bank means a type of bank which may conduct all
banking operations and other business activities under this Law for
profit

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 Credit Institutions System
1. Banks
 Commercial banks
 Policy banks
 Cooperative banks
2. Non-bank credit institutions
3. Microfinance institutions
4. People's credit funds
5. Foreign bank branches
6. Representative offices

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 Credit Institutions System
Banks
 Commercial banks
• State commercial banks
• Joint-stock commercial banks
• Wholly foreign-owned banks
• Joint-venture banks
 Policy banks
 Cooperative banks

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 Banking operations

Banking operations means the trading in and regular

provision of one or some of the following services:
 Deposit taking
 Credit extension
 Via-account payment

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 CHAPTER 1
OVERVIEW OF COMMERCIAL BANKING

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Chapter expected learning outcomes
 Introducing the general picture of Commercial Banks including:
Function, organizational structure and operation of this
organization( hoạt động của tổ chức)
 After completing this chapter, individuals will be able to understand:
Definition, function, classification( phân loại), organization,
operation( hoạt động) of commercial banks and have general
knowledge about commercial banking operations.
 The students will be able to identify the characteristics( đặc trưng) of
a commercial bank and its’ operations.
 The students will be able to describe the overview of
Vietnam’s banking system.
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References
 Commercial banking operation textbook.
 Law on credit institutions (Law No. 47/2010/QH12
and No. 17/2017/QH14)
 Circular stipulating minimum safety limits and ratios
for transactions performed by credit institutions and
branches of foreign banks (No. 36/2014/TT-NHNN)
and related documents
 Decision on the issuance of regulation on the debts
classification, provisioning and use of provisions
against credit risks in the banking activity of credit
institutions (No. 493/2005/QD-NHNN) and related
documents

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 Content

Influence of the legal environment on the operation of com

Overview of Commercial(thương
Commercial
mại) banking
Banks operations

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Overview of Commercial Bank
Definion:
 Commercial bank means a type of bank which may
conduct all banking operations and other business
activities for profit.( lợi nhuận )
 Banking operations means the trading in and regular
provision of one or some of the following services:
 Deposit taking;
 Credit extension:
 Via-account payment.
(Article 4 - Law on credit institutions 2010)

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Overview of Commercial Bank
Characteristics:
 A traditional bank type.
 Implement the most diversified financial services
compared to other types of banks: Receive
deposits, mobilize capital by issuing valuable
papers, lending, providing trust, guarantee and
financing services for trading, trading foreign
exchange, international banking services,
payment and treasury services ...
=> This is full service Bank
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Overview of Commercial Bank

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 Overview of Commercial Bank

 Based on ownership:
 State – owned commercial banks
 Joint – stock commercial banks
Cla
 wholly foreign – owned banks
ss
 Joint - venture banks
ifi  Foreign banks’branches and Representative Offices of Foreign
ca Banks
ti  Based on business strategy:
o  Retail bank
 Wholesale bank
 Based on organizational relationship:
 Bank head office
 Bank branch level 1,2, transaction office
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Overview of Commercial Bank

Functions of commercial banks:

Financial intermediation;
Payment intermediaries;
Create money;
Financial services and other banking
services

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Overview of Commercial Bank

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 Functions of commercial banks
Financial intermediation:

Lenders Financial intermediaries Borrowers

(organization, individual) (organization, individual)
Commercial Banks

The intermediary rotates capital in the

economy, from capital surplus to lack of capital

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Functions of commercial
banks
 Payment intermediation and management of
payment facilities: Commercial banks act as
cashiers for businesses and individuals, making
payments at the request of customers.
 promoting goods circulation, saving
circulation costs, creating a foundation for
commercial banks to perform lending
operations.

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Functions of commercial banks
 Create money

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Major activities of commercial banks
 Capital mobilization activities:
 Receive deposits from organizations and individuals
 Release valuable papers
 Borrowing from domestic and foreign credit institutions
 Short-term loan from the SBV
 Credit granting activities:
 Loan
 Discount
 Factoring
 Guarantee
 Financial leasing…
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Major activities of commercial banks
 Payment and treasury service activities:
 Provide payment facilities
 Cash collection and payment: collection and payment
 Payment services to join the domestic and international inter-
bank system.
 Other activities:
 Investment
 Trading in Foreign exchange
 Trust and receive trust
 Finance support
 Preserving valuables, insurance ...
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Commercial banking
operations
Based on type of customers:
Individual activities
Bussiness activities
Based on the balance sheet:
Balance Sheet
Off-Balance Sheet

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 KEY STATISTICAL INDICATORS
%Short-term
Regulatory Charter
Categories of CIs Total Assets CAR* funds/ long-
capital* Capital
term loans
State-owned banks 5.361.158 282.199 155.2 9,61 29,94
Vietnam Bank for Social Policies 228.996 17.288
Joint stock commercial banks 5.422.134 352.305 290.11 11,10 28,21

Joint venture, 100% foreign-owned

1.434.698 177.037 125.98 25,90
banks, foreign banks'branches

Finance and leasing companies 205.047 36.315 27.78 20,91 34,22

Cooperative bank 40.913 3.939 3.029 19,21 16,33
People's Credit Funds 138.107 5.038
Whole system 12.831.052 624.42 12,19 25,88
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 Total Assets of the credit
institutions in Vietnam
(2018)
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 Total Assets of the credit
institutions in Vietnam
(2020)
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 Charter capital of Vietnam’s
commercial Banks (VND Billion, 2018)

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 WHOLLY FOREIGN – OWNED BANKS
No Name of Banks Address Charter capital
1 ANZ Bank (Vietnam) Limited - ANZVL Hanoi 3,000
2 CIMB Bank (Vietnam) Limited -CIMB Việt Nam Hanoi 3,203.20
3 Hong Leong Bank Vietnam Limited - HLBVN HCMC 3,000

4 Hongkong-Shanghai Bank Vietnam Limited - HSBC HCMC 7,528

5 Public Bank Vietnam Hanoi 3,000
6 Shinhan Bank Vietnam Limited - SHBVN HCMC 5,709.9

7 Standard Chartered Bank (Vietnam) Limited - SCBVL Hanoi 4,215.30

United Overseas Bank (Vietnam) Limited –UOB
8 HCMC 3,000
Vietnam
9 Woori Bank Vietnam Limited -Woori Bank Vietnam Hanoi 4,600
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 Number of branches & transaction centers

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