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GLOBAL PETROLEUM COMMERCIAL JOINT STOCK BANK IN NGHE AN

ASSIGNMENT
APPLING BALANCED SCORECARD SYSTEM TO IMPROVE STRATEGY FOR
GLOBAL PETROLEUM COMMERCIAL JOINT STOCK BANK IN NGHE AN

Class: Auditing 56
Lecturer: Nguyen Thi Phuong Hoa
Members of group: Ha Vu Ngoc Linh (33%)
To Thi My Duyen (34%)
Tran Ngoc Mai (33%)


INTRODUCTION
Balanced Scorecard System is a modern management approach based on
objective. Accordingly, the development orientation of the enterprise is
expressed by indicators and objectives which are organized in harmony and
harmony based on important priorities of organizations and enterprises. This
system helps people to move towards the common goal as well as the
sustainable development of the business and as the basis for the management
and evaluation system. Therefore, although quarterly annual business
performance measures will still be used to provide a current performance
report, these financial metrics will need to be supplemented by factors that

affect long-term financial performance. These factors, particularly those of
growth opportunities, require other measures beyond the existing financial
measures.
In the age of globalization and the increasingly competitive business
environment, choosing the strategy for survival and development of banks is
a difficult issue. The traditional measure used in the evaluation of the
performance of banks, primarily the financial information in the past has
become outdated and no longer relevant. Global Petroleum Joint Stock
Company Nghe An Branch is a young and to confirm the role and position of
the Bank as well as strengthening and enhancing its position in the market. It
requires the bank to develop a good strategy, a plan for the deployment of
science, and the development of an appropriate metrology system. The
Balanced Scorecard (BSC) is a very appropriate tool for the Bank in the
current period. It is a planning and performance measurement method that
transforms the Bank's vision and strategy into concrete goals, measurable, and
measurable targets. BCS not only helps the Bank assess its financial
performance by measuring its financial position but also evaluates its
measurement based on the measurement of non-financial factors. Based on
the fact that we have chosen the topic "Apply balanced scorecard system to
improve the strategy for Global Petroleum Commercial Joint Stock Bank in
Nghe An”. BCS will help the bank to complete the strategy to evaluate the
results on four aspects:
1. Financial


2. Customer
3. Internal business
4. Innovation and learning
APPLING BALANCED SCORECARD SYSTEM TO IMPROVE STRATEGY FOR
GLOBAL PETROLEUM COMMERCIAL JOINT STOCK BANK IN NGHE AN

Chapter 1: Overview of GPBANK NGHE AN
1.1.

General Introduction of Global Petroleum Commercial Joint Stock
Bank - Nghe An Branch (GP Bank Nghe An)
1.1.1. Introduction to GP Bank
Global Petroleum Commercial Joint Stock Bank, formerly known as Ninh
Binh Rural Commercial Bank, was officially transformed from a rural bank
to an urban bank on November 7, 2005. From a unit of less than 10 members


in November 2005, GP Bank's business network has been expanded
continuously with 1 head office. GP Bank has built a team of more than 1400
young staffs, trained professionally, working in the network of nearly 80
branches and transaction offices of GP Bank nationwide in provinces, cities
such as: Ha Noi, Ho Chi Minh City, Ninh Binh, Hai Phong, Vung Tau and Da
Nang. Over time, GP Bank has affirmed the growth, gradually make a good
impression on the financial market - currency of Vietnam. In the coming time,
GP Bank will continue to develop its network to provide high quality financial
and banking services closer to customers.
1.1.2. Introduction of Global Petroleum Commercial Joint Stock Bank Nghe An Branch
Full name: Gobal Petroleum Commercial Joint Stock Bank - Nghe An Branch
Address: Lot 4.5, Building CT 1A, Quang Trung street, Vinh, Nghe An
province.
As a new branch was put into operation, GP Bank Nghe An Branch has been
striving, step by step building and mature comprehensive in terms of capital
mobilization, investment growth and credit quality, cash receipts, expansion
of external economic relations and other activities.
1.2. Products and services at GP Bank Nghe An
1.2.1. Raising capital


-

-

-

Exploiting and receiving deposits of other domestic and foreign organizations,
individuals and credit institutions in the form of demand deposits, term
deposits and other deposits in VND and foreign currencies.
Issuance of certificates of deposits, bonds, promissory notes and other
valuable papers.
Borrowing capital from other financial and credit institutions operating in
Vietnam and foreign credit institutions when permitted in writing by the
General Director.
1.2.2. Lending:
To perform short-term, medium-term and long-term loans in Vietnam dong or
foreign currencies for individuals and economic organizations of all sectors
and all business sectors according to GP Bank's regulations.
1.2.3. Foreign exchange trading:
Capital mobilization and lending, purchase and sale foreign currency,
international payments, guarantee, re-guarantee, discount, rediscount of
documents and other foreign exchange services in accordance with the
Government's foreign exchange control policy, State Bank of Vietnam and
GP Bank.
1.2.4. Providing payment and treasury services include:
Providing payment instruments;
Implement domestic payment services for customers;
Implement cash collection and payment services for customers;
Implement other payment services.
1.2.5. Trading in other banking services:
Include: collect and distribute cash; trading gold, silver, currency; automatic
teller machine, card services; safe deposit, receiving reserve preservation;
financial leasing agents, securities, insurance ... and other banking services
are allowed by the State and GP Bank.
1.3. Organizational structure and management apparatus
❖ Board of directors:
The branch manager directs all activities of the board of directors, who
performs his or her duties and powers in accordance with the law and the
superior bank and is responsible for all business activities of the branch.
The deputy director is the consultant who assists the director in the process of
managing and operating the business, to the extent authorized by the director.


-

-

-

-

-

The deputy director shall have the right to act on behalf of the Director and
shall be liable for such decisions.
❖ Customer Relationship Department
Including: credit, international payment, capital, currency trading.
Function:
• Advise the branch leaders to develop quarterly and annual business
plans and propose measures to comply.
• Direct implementation of business operations under the scope of work.
Mission:
• Compile the business data of the entire branch, help branch leaders
evaluate the results of implementation from time to time.
• Monitoring and balancing capital sources as well as the use of these
sources (loans, mobilized capital, short-term and long-term capital ...).
It then advises the leader on promoting or restricting capital
mobilization. Performing loan and guarantee business, in collaboration
with the provision to ensure good information work under the direction
of the Board of Directors.
• To organize and administer the bank's assets and liabilities in money in
order to ensure the effective and safe operation of its assets in
accordance with law.
❖ Credit Support Department
Responsible for credit marketing, advising clients on credit products, services
and listings on related issues.
Researching customer credit strategies, classifying customers and proposing
preferential policies for each type of customer.
❖ Administrative offices – organizations
Function:
• Advise the leaders to build human resources for the branch through the
proposal, set criteria for recruiting cadres, train human resources for
business activities, to set up the regimes of personnel management,
property management, reward and discipline of officials and
employees.
Mission:


• Management of employee records, recommendations to leaders in
mobilizing and supplementing labor for departments, coordinate with
departments to monitor the situation, summarize periodical emulation.
❖ Accounting Department:
- Function:
• To advise the branch leaders on the management of assets in accordance
with the financial and property management regime of the State of
Vietnam.
• To act as the branch clue in researching and exploiting modern
technologies for business purposes, ensuring thrift and efficiency.
- Mission:
• To organize the implementation of accounting timely, accurate, honest
reflection objectively under accounting regulations to ensure the safety
of assets to banks and customers, make quarterly, full and timely
balance sheet reports.
• Performing domestic and international remittance, account receivable,
loan, promissory note, bond.
• Providing trust services between branches and credit institutions,
economic organizations under contracts in accordance with the regime
and providing data for payment, inspection and audit work.
❖ Internal Control Inspectorate
- To control the entire operation of the bank, the director and the functional
divisions to ensure the regulation of the State Bank of Vietnam and the
statutory regulations of the State.
Chapter 2: Identification strategies and application Balanced Scorecard in strategic
assessment of GP Bank
2.1. Mission, objective and vision, strategic GP Bank
- Mission: GP Bank strives to become a leading financial institution in Vietnam
with outstanding values of prestige and quality of products and services. The
bank is committed to providing products and services that are professional,
optimized to enhance and connect the value of life to every customer.


- Objective: To build GP Bank into a typical retail bank in Vietnam, "Not the
first, but the best". In its retail banking strategy, GP Bank will focus
specifically on individual customers.
- Vision to 2017: GP Bank will reach a comprehensive development bank to
promote advanced technology capacity, modern NH management, qualify for
competition and development in the regional financial system and new
international financial system: Affirming the ability to compete equally with
commercial banks, foreign banks.
- Strategy: Safety - Sustainability – Effectiveness
GP Bank is constantly improving its competitiveness in the new phase to
become one of the leading commercial banks in Vietnam. The Bank always
maintain financial status at a high level of safety, optimizing the use of
shareholder capital to ensure the interests of customers, banks and
shareholders. High growth is made by creating a difference on the basis of
understanding customer needs and customer orientation. A comprehensive,
effective and professional risk management system are developed to ensure
sustainable growth; strategically prepare human resources and train
professional staff, building "GP Bank Culture" into a spiritual element that
links the whole system.
2.1.1. Strategic view of GP Bank Nghe An branch
- As a branch of GP Bank, first of all, the bank's strategic objectives must be
closely aligned with the strategic objectives of GP Bank. However, each
region will have different environmental, economic, cultural and social
characteristics. In order to achieve its objectives, branch banks will have their
own strategies. With a strategic view from the corporation "Commitment to
Success", analysis of population characteristics in Nghe An Province, GP
Bank branch in Nghe An continues to inherit this strategic view, to bring the
greatest benefits to people here, while improving the profitability of
enterprises.
- Based on the orientation of operation in the past few years, it is possible to
highlight some key objectives of GP Bank in Nghe An province as follows:
• Raising total capital
• Efficient capital allocation with low cost, ensuring practical benefits for
businesses


-

• Managing risk effectively
• Improved service quality: convenient, reliable, fast through effective
processes, supported by talented staff.
• Harmonizing GP Bank's customer and employee benefits, GP Bank's
culture building is: Honesty, Ethics, Creativity, Quality and
Effectiveness.
2.1.2. The strategic objective of GP Bank Nghe An branch
Based on the general and specific objectives of GP Bank, GP Bank Nghe An
has set its own objectives for its business from 2013 to 2016. As bank
operations are special types of services, including various activities,
operational strategies are not aggregated in terms of BSCs. In order to
complete the strategy for GP Bank Nghe An according to the BSC, the
objectives were rebuilt based on the results of the strategy implementation and
divided into four aspects as follows:
❖ Financial objectives
Mobilized capital (VND bill): increased by 15% - 17% compared to the
beginning of the year
Outstanding loans: went up 11% - 12% over the beginning of the year
Maximum capital utilization rate: 80%
Ratio of medium, long term loans/total outstanding loans: Up to 40%
Bad debt ratio: Less than 3%
Issuance of ATM cards: 500 - 1,000 cards
Non-credit revenue: rose to 20% over the previous year
Profit: increased 16% compared to 2016
Raising employee incomes: a 15% increase over 2016
The proportion of short-term capital used for medium and long term loans is
30%.
❖ Customers objectives
Next year, the bank's goal is to improve customer satisfaction, especially in
terms of creating close relationships with traditional customers. Besides,
continuously develop selective new potential customers, accounting for 25%
of total customers, especially increasing the market share of small and
medium enterprises, building a sustainable business strategy.


The target of the bank in the next year also develops stronger than the
advertising programs of GP Bank such as: advertising in newspapers,
television, participation in trade fairs, especially seminars and conferences.
This is a good opportunity for businesses to know the bank and also the
opportunity for banks to better understand the needs of businesses, find good
customers. Banks should provide information, policies on interest rates,
service charges ... apply to different types of customers, at the same time listen
to their opinions and answer their questions. As a result, the bank can take
positive steps to overcome the shortcomings and provide more reasonable
policies and services to better meet the needs of its customers.
❖ Internal business objectives
In order to accomplish customer objectives, the goal of the internal process is
to improve the supply of products and services. To ensure the criteria such as
conditions and procedures for using the service simple, fast processing speed,
safety, high accuracy, customer data is updated continuously. This enables the
bank to increase its added value, provide its products and services at the lowest
cost, and enhance the bank's asset utilization.
In addition to consolidating and increasing value for traditional products, the
bank's goal is to develop new products and services, increase service fees,
especially products and services package. This service is a one-stop solution,
a combination of existing products to bring maximum convenience as well as
minimize time and procedures for customers. Product packaging is a new
trend in service delivery. Cross selling products are commonly used. These
two forms deal with market saturation trends and improve competitiveness for
service products. Thus, the value that package products bring is the
convenience, simple procedures accompanied by incentives. Consequently,
customers have to make fewer transactions for a variety of needs, thus saving
time, money and feeling the added value of the service. The cost for a service
pack is therefore lower than the total cost of each service combined and also
facilitates the customer's access to and use.
The working environment for employees is also a very important factor for
achieving the bank's goals. Therefore, the creation of a good working
environment, motivation and conditions for employees is also an important
goal set by the bank.


In addition to its business activities, GP Bank of Nghe An targets to further
develop and actively implement social charity programs such as: visiting
families with Agent Orange victims, handing over charity houses and
supporting families in difficult circumstances.
❖ Innovation and learning objectives
To achieve customer objectives and internal process goals, the bank viewed
training and development as the primary principle of its existence.
The Bank's 2016 goal is to develop a strong workforce that develops
knowledge and skills for employees to create a culture of continuous
improvement and alignment on the basis of solid information technology. It
is the fact that the bank has continuously implemented training plans for its
staff every year.
Assurance of the quality of human resources of banks with the criteria such
as capacity, qualifications, ability to integrate, work efficiency and good
moral qualities. In fact, no matter how strict the legal regulations and business
process, for the personal benefit of the bankers can still collusion, deliberately
spleen the law, leading to unpredictable risks. In fact, there have been many
serious losses due to the moral hazard of bank officials. Therefore, the bank's
objectives need to constantly educate the ethics of the profession to every
officer in each department and its branches and transaction offices.
In addition to training staff, the bank's objectives are to build a modern
technology foundation that ensures the bank's internal management
requirements.
In addition, the bank also satisfies the growing demand for business
transactions, demand for risk management and liquidity, able to connect with
other banks in the area and in the country. The modern banking services are
developed on the basis of ensuring risk prevention, confidentiality and safe
operation.
2.2. Appling BSC to evaluate strategy of GP Bank Nghe An
2.2.1. Identifying and determining weights for the KPIs
The weight of the core measurement indicators KPIs are defined as follows:


Important level

Less important------------ The most important

Weight

1

---------------- 5

After conducting interviews with bank executives and department heads to
assess the importance of KPIs to strategic objectives, we gain weightings for
KPIs as follows.
Table 2.1: Table weighting of KPIs
The criteria
The weight
I.Financial criteria
TC-01

Speed increase profits

5

TC-02

Rely on non-credit revenue

4

TC-03

The percentage of employee income is 5
increased
The percentage of mobilized capital 5
increased
The percentage of outstanding loans 4
increased

TC-04
TC-05
II.Customers criteria
KH-01
KH-02
KH-03
KH-04

Number of traditional customers still
relate
The number of new customers
increase
The percentage of customers are
satisfied
Brands are preferred and recognizable

III.Internal business criteria

5
4
5
2


HN-01

4

HN-06

The percentage of use capacity of the
property
Average time to provide product or
service
The percentage error occurs when
providing service products
The percentage of winning / losing
lawsuit
The market share of each customer
segment
Safety from new products

HN-07

Cost of production for new products

3

HN-08

Satisfaction of internal customers

5

HN-09

Work efficiency of employees

5

HN-02
HN-03
HN-04
HN-05

4
4
3
2
5

HN-10

The number of participating social 4
programs
IV. Innovation and learning criteria
DP-01

The level of training for staff

DP-02

Budget to develop skills for employee 3

DP-03

The number of violations related to 5
professional ethic
The number of upgraded computers
4

DP-04
DP-05

4

The level of employee decision- 3
making


DP-06

The degree of affiliation between 4
employees in the bank
DP-07
The percentage of managers who are 2
studying abroad
DP-08
The percentage of managers who go to 4
study in the country
(Source of data from Financial Statement of GP Bank Nghe An through
2014,2015,2016)
KPIs such as increased profitability, increased percentage of employee’s
salary, and increased percentage of funds raised, the number of traditional
clients still in contact, the safety of new products, the satisfaction of internal
customers, the efficiency of employees, the number of infringements related
to ethics. are the most important KIPs and affect directly to other KIPs and
bank’s objectives that include: increasing profitability, retaining traditional
customers, enhancing customer satisfaction, enhancing efficiency in new
product development, and improving the working environment for human
resources, improve the professional ethics, and decide on the existence of the
bank, so the weight of these KPIs is 5, at the highest level.
KPIs such as non-credit revenue, increased loan portfolio, increased number
of new clients, percentage of used assets, average time spent on products and
services, the percentage of errors occurring when providing products or
services; the amount of social activities involved, the level of training for
employees, the number of computers upgraded to date, the level of alignment
among the bank's employees, the percentage of managers who are going study
in the country. The KPIs are also very important, affecting directly the bank's
strategic objectives such as increasing non-credit income, increasing
outstanding loans, developing new customers, loss of risk, etc., but it has little
direct impact on core KPIs other than KPIs that are weighted at 5, which often
indirectly affect, so the weight of these KPIs is 4.
KPIs such as the percentage of winning / losing cases, production costs for
new products, budget for developing skills for employees, and the level of
involved decision-making are also important, but they have little direct effect,
which indirectly influences the strategic objectives of the bank and indirectly
affects other core KPIs such as percentage of satisfaction Customer service,
the average time provided for the product or service, the error occurred when


providing product or service, the level of training for employees, etc., so the
weight of these KPIs is 3.
KPIs such as favorite brands and perceptions, the market share of each client
segment, the percentage of managers who are studying abroad, are KPIs that
have a weak impact on strategic objectives. so their weight is 2.
2.3. Assessment of strategic objectives of GP Bank Nghe An
2.3.1. Financial perspective
In 2016, in general, the financial criteria are well implemented by banks, such
as 13% increase in profit, 14% increase in capital, of which short-term capital
increased by 8% and long-term capital increased. 6%. Besides, outstanding
loans also increased at a relatively safe rate compared to mobilized capital,
specifically 10% higher than in 2013. Therefore, these targets are considered
strong points of banks with% completed more than 80%.
However, the percentage of employees' incomes has not been increased,
increasing by 7% against the target of 10%. Although profits increase, but
costs also increase, especially the costs associated with the creation of new
products and services. In addition, the non-credit revenue in 2016 increased
quite low compared to the target, specifically 10% increase compared with the
target of 18%, with a trend of a modern bank, the revenue beyond credit The
ratio is quite low, profit is mainly based on credit, this is the target has not
reached the requirements and will create many risks, should be rated as
average.
2.3.2. Customer perspective
The bank's financial indicators for 2016 are quite good, especially the
percentage of traditional customers still relate. This index is 95% higher than
the target of 100%, leading to a 96% completion, this is a strong point of Nghe
An GP Bank. The number of traditional customers is rated by the bank yearly,
mainly for borrowers and deposits. For loan transaction customers are
assessed through criteria such as the number of years that customer used GP
Bank’s service, the average loan balance, the payment of principal, interest
and other related costs, financial resources of enterprises ...; For loan
transaction, customers are assessed through criteria such as the number of
years that customer used GP Bank’s service, average deposit balance, term
deposit ...


In addition, the criteria such as the number of new customers increase, the
percentage of satisfied customers, favorite brands and recognition, are quite
well. Specifically, the number of new customers increased by 7%, which is an
increase of nearly 450 customers compared to the total number of customers
in 2015, the number of customers is mainly individual customers. Percentage
of satisfied customers is 70% so the level of completion is 76%. According to
the Marketing Department's report, the bank's brand recognition and
preference increased by 10% over 2015. This is the result of market research
outside the bank.
2.3.3. Internal process aspect
Criteria for internal processes such as safety from new products, internal
customer satisfaction, and the number of participating social programs are
programs implemented by banks are good and strong points. Specifically, the
safety of new products is 96% of the total number of products and services
provided by the bank, error rate is low, the lack of risk for the bank and the
customer. Internal customer satisfaction reached 96%, which is the result of
an annual survey conducted by the marketing department for all employees in
the bank. The number of social activities participating in the program exceeds
the target, which is the activity launched by banks throughout the system and
implemented on a regular basis such as: gratitude, build charity houses,
activities for the green environment of the city ...
- Criteria such as the percentage of utilization capacity of the property, average
time of supply of products and services, the percentage of winning or losing
cases, performance of employees, also performed well by the bank and is
pretty good. Specifically, the asset utilization rate is 73% and nearly 5%
higher than that of 2015. The duration of service provision is down 7%
compared to 2015, this is the result of the combination of departments in
providing products and services. The percentage of win or loss lawsuit
increased by 2%, which is usually related to the bank's operating margin,
which is the main profit-making and risk-weighted segment in 2016. GP Bank
has 3 cases not successfully implemented due to negligence in the process of
providing products and services to customers. Employee productivity
increased by 7%, which is measured by the time it takes to deliver products
and services to customers, and the amount of work and customers that each
employee has to take up compared to 2015.


However, some banking criteria are not well implemented, such as market
share of each customer segment, the percentage of errors occurring when
providing products and services, cost of production for new products, these
criteria are only medium and weak. The market shares of each customer
segment grew only 1%, 3% lower than in 2015 and only 50% of the target is
up 2%. The percentage of errors occurring when providing services is 1.5%
less than in 2015 but still higher than the target of 5% reduction. Similarly,
production costs for new products fell 3% from 2015, but were lower than the
target of 7%, which were directly related to research, development and
deployment. Piloting products and services, with this result, the bank's
implementation is not really effective.
2.3.4. The aspect of training and development
The criteria related to training and development are very well done by GP
Bank Nghe An, which is reflected in the comparison with 2015 and
benchmarking with other banks. Specific criteria such as the level of training
for employees, the budget to develop skills for employees, the number of
violations related to professional ethics, the number of computers upgraded
modern the proportion of managers who go to study abroad, the percentage of
managers who go to study in the country, are the criteria considered as
strengths. Developing professional skills and life skills for staff is one of the
top targets, so the budget for this investment is paid by the bank. Budget
increased by 12% compared to 2015, this budget is regularly held by banks or
invited lecturers from universities, and international arbitration center for
training of employees, banks achieved the target with a 95% training rate,
which is higher than other banks in the city, which also results in jobless
moratoriums in 2016.In addition to the development of skills for staff, the
development of skills for leaders is also emphasized, in particular% of
managers who go to study in the country and abroad increase by 12% and 5%
over 2015. In addition to developing skills for staff and management, IT
systems are also paid attention, especially the number of computers upgraded
is 75%. The number GP Bank's current computer system is 100% modern,
which is strength of GP Bank in terms of standardization with the system.
2.3.5. Assessment of GP Bank Nghe An's strategy completion results
The percentage of completion of GP Bank Nghe An's strategy is calculated by
the following formula:
(%TC+%KH+%HN+%DP)


- The percentage Complete strategy =
4
According to the results in the table above and the calculation formula we
have the result of the completion percentage of the criteria are:
The percentage of Financial Criteria: 74.4%
The percentage of Customer Criteria is 79.5%
The percentage of Internal business criteria is 68.8%
The percentage of Innovation and learning criteria are 87.8%
So GP Bank's strategy completion percentage is 77.6%.
With 77.6% of its performance, it reflects the true potential of the bank.
Financial
Good (74,4%)
Điểm khá (74,4%)

Customer
Good (79,5%)

Good
(77,6%)

Internal business
Good (68,8%)

Innovation and learning
Strong (87,8%)

Figure 2.1. Results of implementing the strategy of GP Bank Nghe An
As can be seen in Figure 2.1, the training and development aspects are wellobserved and 87.8% are paid special attention. This has a huge impact on the
customer and the result is 79.5% in this respect. Although the aspect of
training and development was well implemented by the bank, it did not impact
positively on the internal aspect, although it was quite good with a
performance ratio of 68.8 %, but this rate is quite low compared to the efforts
of the training and development, and lower than the result of the customer.
But overall, these three aspects have impacted quite positively on the financial
side, with 74.4% results. This is a good result compared to other banks in
Nghe An province.


Thanks to the application of the balanced scorecard system, GP Bank Nghe
An managers can easily identify their existing strengths and weaknesses, as
well as quickly identify the cause of the problem. From there, managers can
make the right decisions to improve and correct their weaknesses. In addition,
it also helps managers continue to develop their strengths, to improve their
operational efficiency, as well as to improve their performance for the overall
purpose of GP Bank.
Although the implementation of the strategy of GP Bank in general successes
and accomplishments beyond the targets, but looking deeper we see there are
several key issues that need to be addressed:
• GP Bank is an average bank in the province that pursues a strategy
focused on the business of small and medium enterprises, which means
that the risk will be higher than other banks. However, the bank does
not yet have a tool for evaluating the effectiveness of specific strategies,
but mainly for transaction offices, to focus on financial factors that are
ignored. Non-financial factors are important factors contributing to the
future development of the bank.
• Marketing activities are passive, customers themselves are the main.
Some of the staff are still very busy, not enthusiastic about work,
leading to stagnant work, reducing the number of customers.
• Analyzing and evaluating the market according to the structure of the
sector and economic sectors in order to build the structure of credit
investment is limited, affecting the credit investment for each sector,
each economic sector and war long-term investment.
• Not actively in the examination and self-examination. The
investigation, detection and handling of cases of errors sometimes lack
of persistence leading to the error situation is still recurring. Over the
recent law violations in some branches, showing that beside the selfcultivation of professional ethics of each staff should be more
strengthened quality, seriousness. In the control work to prevent the
remote, prevent serious consequences arising.
• Credit services have not been closely linked with the expansion of new
product services in the form of package. A number of GP Bank projects


have been completed and put into operation, but other commercial
banks have been competing to provide products and services.
Chapter 3: Strengthen the strategy for GP Bank Nghe An based on Balanced
Scorecard.
3.1. Viewpoint to complete strategy under Balanced Scorecard for GP Bank
Nghe An.
3.1.1. Finishing strategy to connect the bank's strategy with the
activities of staff
The goal of the bank is to use the BSC to communicate its strategy to all levels
of the organization. This enables all staff at all levels of the organization to
better understand the organization's strategy and objectives. From there, they
can know what to do on their own so that they can achieve strategic efficiency
as well as goals for the bank.
The Bank's strategic link to employee activities has increased over the four
years shown in Table 3.1:
Table 3.1: Percentage Goal of Strategic Linking to Employee Activity
Year
2014
The connection 3%
strategy

2015
8%

2016
15%

2017
30%

3.1.2. Perfecting the strategy to incorporate strategic objectives with
resource allocation processes
This is an important goal because it determines the success of the bank in
executing the strategy. Use the BSC to encourage bank managers to focus
accurately on the proper distribution of resources based on the bank's strategic
objectives. It helps to concentrate on the strategic focus of the bank. Based on
this strategic objective, managers can assess the importance of each goal. It
can then give priority to allocating resources appropriately to ensure that the
bank's strategic goals are met, avoiding waste in allocating resources in an
unreasonable manner.
The goal of using the Balanced Scorecard system is to achieve high efficiency
in the distribution of resources. The target is shown in Table 3.2.


Table 3.2: Percentage Target of Effectiveness in Resource Distribution
Year
2014
2015
2016
2017
Effectiveness 5%
in resource
allocation

12%

20%

37%

3.1.3. Perfecting the strategy to create a stronger change and more
flexibility for the bank
This is not only a target of the bank but also a requirement for the use of the
BSC.
Firstly, in the integration and development of global economy, the change and
flexibility of a bank is essential to success. GP Bank Nghe An is a small bank
in the banking sector in Nghe An, so the change of the bank will be more
difficult than the larger banks. Therefore, the use of BSC with the goal is to
help banks escape the situation.
Secondly, BSC focuses on the bank's strategy implementation, which always
requires change. Therefore, GP Bank Nghe An needs to create change,
continuous improvement and flexibility over time.
3.2. Perfecting the strategy for GP Bank Nghe An
3.2.1. In terms of financial
3.2.1.1. Raising and balancing capital to meet customers'
demand for loans
The development of banking credit services is directly influenced by the
ability to provide capital. Banks with strong financial strength, good capital
mobilization capacity, high capital sources and low mobilization interest rates
will have access to many loan contracts. Therefore, raising capital and
balancing domestic and foreign currency is the first job a bank must perform
to facilitate its business. The bank's capital must be abundant and stable, so
the bank can meet the demand of enterprises. To do this, the bank should
implement the following measures:
• Firstly, interest rate policy
A flexible and reasonable interest rate policy will be a good condition for
banks to raise capital. Specifically, the interest rate must be consistent with
the term of the mobilized fund and have the targeted objectives towards


customers. With customers using many products and services of banks, people
who have prestige with banks and have long-term relationships with banks
will enjoy preferential interest rates on deposits. For example, customers have
high deposit balance, the bank should have reasonable incentive policy on
interest rates, service fees. Banks should apply preferential rates and interest
rates to export customers, who have a large source of foreign currency to sell
to banks.
• Secondly, product and service policies
Banks should increase the supply of credit services to customers, diversify
products and services to meet the needs of customers. Specifically,
strengthening the trust, preservation and consulting services. Banks need to
diversify in term of mobilization, mobilization method. At the same time,
propaganda, advertising, consulting for customers to know and understand the
benefits from these services.
In addition, banks need to implement customer care activities such as sending
gifts, greeting cards for holidays, anniversary of the establishment of
enterprises, birthdays of business managers, individual customers ... to
increase understanding, friendly with customers.
• Thirdly, policy on information networks and people
In order to develop the products and services, the bank needs to better organize
the development of information networks and improve the quality of
information. Develop and improve the system of tools to support credit
activities for customers through the website of the bank, with the purpose to
transmit information, shorten the gap between banks and customers.
Along with the application of advanced modern banking technology, it is
necessary to do well the work of staffs, raise the qualifications of bank
officials to avoid waste of investment capital, especially the applications of
information technology.
In addition, banking is a complex business activity, involving the interests of
customers belonging to different components of business conditions, financial
capacity, business ethics, demand for the type of service. Therefore, the bank
needs to build a civilized and polite communication style among the
contingent of officials: enthusiastic, attentive to customers while still abide by
the professional procedures and regulations on information security of the
bank.


3.2.1.2. Improve loan conditions and administrative procedures
Typically, a banking product is considered complete and of good quality if it
satisfies the needs of the customer best. When evaluating the completeness of
a bank credit service, customers often rely on criteria such as simple or
complex service conditions and procedures, fast or slow processing rates, safe,
high or low accuracy, the attitude of service of bank staff like, interest costs,
high or low service charges and customer benefits will be achieved. For a
bank, a complete credit service must be those that better meet your needs than
your competitors. Next is the benefit to the bank itself, which is reflected in
the income from lending activities and bad debt ratio, overdue debt on total
debt. To achieve that the bank needs to address the following issues:
• Firstly, making use of credit services is becoming easier, more
convenient, more attractive and giving customers value by completing
the business process, simple procedures and conditions for using the
service. Particular attention is paid to project appraisal in order to make
the right decisions in selecting clients and investment projects. In
particular, banks must establish a multi-dimensional credit information
system on a selective basis. By collecting good information, accurate
and timely manner not only help banks to assess correctly the capacity
of the client, but also help to make credit decisions quickly. Banks will
not miss out on potential customers as well as not to lose business
opportunities of our clients.
• Secondly, the bank constantly improves, adds and improves the rating
system, rating customers to match the real situation of enterprises in all
aspects such as collateral, accounting system. To increase efficiency,
reduce costs through automation as part of the decision-making
process.
• Thirdly, the bank should consider and loosen the lending conditions,
focusing mainly on the feasibility, effectiveness of the project and
production plan. For collateral assets, the valuation must be
commensurate with the market value and reasonable to help customers
can borrow the amount closest to their capital needs. For customers who
are considered to have growth potential but do not have adequate
collateral, they can create conditions for them to borrow without


collateral in a safe and effective manner, or mortgaged from the assets
formed by the loan or loan with a portion of the collateral.
• Fourthly, considering the improvement of traditional products in the
direction of adding new features. In essence, banks are increasing the
value of their services and developing new products that are more
relevant to their customers. Instead of a service product that meets only
one need, a service product can meet the needs of its customers.
Applying modern technology to provide products and services package
for customers, both increase the convenience and reduce the cost per
unit. Improving loan conditions and administrative procedures will
enable banks to reduce the time it takes to deliver products and services,
thereby improving customer satisfaction and increasing the number of
new customers.
3.2.2. In terms of customers
To arrange non-financial support staff for each client group. Non-financial
support activities include the provision of financial information, procedural
guidance, the introduction of business opportunities, the introduction of
investment partners and clients through various channels. Especially through
the website of the bank, the bank can support the typical customers to
participate in training courses, participate in trade fairs and exhibitions.
thereby promoting the purchase and sale, technology transfer between
customers, domestic and foreign enterprises.
The bank should regularly organize seminars, customer conferences for
corporate clients and large individuals. This is a good opportunity for
customers to know the bank and also the opportunity for banks to better
understand the needs of customers, find good customers. The bank should
provide information, policies on interest rates, service fees ... apply to each
group of customers, and listen to their opinions and answers to their questions
about credit activities. As a result, the bank can take positive steps to
overcome the shortcomings and provide more reasonable policies and services
to better meet the needs of its customers.
3.2.3. In terms of internal business
The bank continues to closely follow the process of implementing business
plans, agreed in the executive management and promote the strength of
internal unity in the unit. Organizing laborers to give comments on building


business solutions and proposing emulation movements. Regularly review the
organization and operation of each department and encourage the promotion
of contributions to further improve the work processes of each department.
Enhancing the speed of exchange between departments to respond quickly to
customer requests. Regularly check the attitudes of employees in the work
process to colleagues and customers. Actively deploy new products and
services to increase revenue beyond credit, and engage customers with
positive interest through effective marketing channels. Carrying out
accounting work, promptly and accurately payment, and follow the operating
procedures to ensure the safety of the treasury.
3.2.4. In terms of innovation and learning
3.2.4.1. Improve the capacity and performance of employees
Business organizations and staff is the key to bank success, so bankers need
to be knowledgeable about the law and the market, have in-depth knowledge
of customers, work methods, good communication and customer service
skills. Employees need to know the market and advise customers to help
customers choose the right service and bring efficiency to customers. To do
this, the bank should implement the following solutions:
• Firstly, it is necessary to continue to improve credit officers' skills,
strengthen training and retraining so that credit officers have sufficient
expertise as well as knowledge about market economy. The bank
regularly has different training forms with staff such as on-the-job
training, sending to domestic and international organizations and
inviting teachers for training on the subject. In the immediate future, it
is necessary to regularly coordinate with other commercial banks and
government agencies in organizing seminars and training for
professional staff in relation to customers such as: method of assessing
collateral for bank loans, financial performance appraisal parameters,
business results, information on prevention and risk warnings. The
bank should organize a good credit officer contest to encourage credit
officers to learn from your banks and to keep up to date with new and
useful information.
• Secondly, organizing the examination fairly, seriously, objectively
select qualified people, dedicated to the profession, preferably
experienced people. The process of recruiting staff should not be rigid,


but must be based on actual capacity to make arrangements for job
placement as well as income adequately.
• Thirdly, educational cooperation programs with universities in the
country, especially universities in the area or organizing internships are
effective recruitment methods. It not only can help banks recruit
graduate students achieve honors, but also help save a lot of costs and
promoting the image of their brand.
• Fourthly, the arrangement of using staff of credit officers must be in
line with the position of each task and must be in line with the standard.
Clarify the legal responsibilities of each position to ensure that the
rights attached to the responsibility.
• Fifthly, developing salary and incentive policies under the motive force
to attract talented people, encourage cadres to love the job, devoted to
the job. This will improve productivity, labor quality and reduce grayscale competition in financial markets.
• Finally, it is important to build and link the relationship with business
associations of the central, provincial, the credit guarantee funds for
small and medium enterprises, the industrial and commercial
departments of the city to capture the business activities and needs of
businesses.
3.2.4.2. Developing products and services package for
customers
The development of products and services will enable banks to increase
revenue beyond credit, minimize the time and costs of developing new
products and improve customer satisfaction, strengthen traditional customer
loyalty and increase new customers.
Currently, the bank only offers some products to customers such as: lending,
guarantee, discounting of documents, international payment and account
services. Meanwhile, one of the wishes of customers in general is to use the
package products, multi-utility for their business operations are conducted
efficiently, conveniently and quickly. On the other hands, credit and services
are two cohesive activities. credit products, which are package services
including credit and insurance services, foreign currency trading, international


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