Business and Business Environment of Techcombank

TABLE OF CONTENT

INTRODUCTION

PVcomBank, commonly known as Vietnam Public Joint-stock Commercial Bank, was established in September 16th 2013, under the Decision no. 279/GP-NHNN, by the State Bank of Vietnam. With the slogan statement is “Gapless banking”, PVcomBank is making efforts to offer the best quality of services and products to customers. They are committed to striving to become a Lifetime bank in providing services, with a professional and friendly style. Additionally, PvcomBank takes the benefits of customers - partners as the targets of actions owing to their experiences and high qualified staffs. Nowadays, with a very large network which estimates to 108 transaction offices throughout the country, PvcomBank has been one of Vietnam’s most progressive and fastest growing banks Vietnam. This report will be show the different types, size and scope of the chosen bank. Moreover, all the issues which relates to organizational structure will also be described, explained and analyzed in details.

In addition, for the further understanding and critical thinking about those characteristics, HDBank is another bank that will be chosen to be discussed to compare and contrast with PvcomBank in this report. HDBank is commonly known as Ho Chi Minh City Development Joint Stock Commercial Bank, established in 1992. From then on, HDBank has progressed to be a top Vietnamese joint stock commercial bank.

MAJOR FINDINGS

1. Different types, size and sope of organization:

1. Legal form, sector and scope of PVcomBank:

1. Legal status

As it was mentioned before, PVcombank’s legal form is Public Limited Company. According to Indian Company Act (1956), Joint Stock Company is such a form of business organization which is established on the principle of having permanent paid or authorized capital divided into shares of specific amount and only its shareholders can be its members. In a joint stock company, the total capital is called share capital. Additionally, share capital is divided into a number of units which are called dividends. Thus, every member has some dividend in a business is called shareholder.

In Limited Company, “an individual’s liability is limited to the amount invested in the business, including any amount remaining unpaid on the shares for which they have subscribed” (Worthington and Britton, 2006)

1. Type, sector and scope:

PVcomBank is a public sector organization. “In general terms, the public sector consists of governments and all publicly controlled or publicly funded agencies, enterprises, and other entities that deliver public programs, goods, or services” (Sikhungo Dube, Daniela Danescu, CIA, CGAP, 2011). “Public” does not mean state, it means listed stock market and is available for all. A company which is known as public company has shares which could be transferred freely and invite public to contribute for shares. Publics sector has various form, and in particular, PVcomBank takes the form of a “public corporation’. “These state corporation are an important part of the public sector of the economy and have contributed significantly to national output, employment and investment” (Worthington and Britton, 2006)

PVcomBank’s type is Tertiary. “The Service sector, also known as ‘Tertiary’” (Victor Fuchs, 1968).

In this kind of type, the main business scopes of PVcomBank are the activities in field of Banking and Finance, divided into 2 groups as the chart below:

                                                Chart 1: PVcomBank activities

[pic 1]

                        Source: pvcombank.com

There is an example of PVcomBank’s activities with the data in 2014 as below.
According to Linh, N. (2015):

b.1 Capital Mobilization: PVcomBank mobilized capital from clients in various geographical areas:

[pic 2]

             b.2 Credit: About loan and debt

[pic 3]

              b.3 Investment

[pic 4]

b.4 Service
- PVcomBank continues making further capital arrangements for projects by Vietnam National Oil and Gas Group such as Vung Ang 1, Thai Binh 2, Long Phu 1.

- Implementing SMS Banking, Internet banking; diversifying the bank’s services and products.

Established in 1990, Vietnam’s banking industry has grown tremendously from a mono-banking system to a huge network of banks and financial institutions (Vietnam Banking Industrial Report, 2015). Vietnam is trying to move from Primary sector to Tertiary sector. In fact, type of services in Viet Nam has not developed much in comparison with other countries in South East Asia. The data is shown below: