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HANOI UNIVERSITY
FACULTY OF MANAGEMENT AND TOURISM
BANK MANAGEMENT
Financial Analysis of HSBC in Vietnam
Group: 08
Tutorial: 01
Tutor: Mrs. Dao Thi Thanh Binh
Members: Nguyen Ha Giang 1804040039
Dang Hoang Lan 1804040058
Nguyen Thi Hong Nhung 1804040090
Tran Lan Chi 1804040025
Fall 2020
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BANK MANAGEMENT – PEER EVALUATION FORM
Team Member
Student ID
Task given
Contribution
(100%)
Dang Hoang Lan
1804040058
Task 1: HSBC Vietnam’s Services
Task 2:Financial Analysis of HSBC
Task 3: Interest rate in the banking
book and sensitivity of Net Interest
Income
Task 4: Basel I
Task 5: Liquidity management
100%
Nguyen Ha Giang
1804040039
Task 1: HSBC Vietnam’s Services
Task 2: Efficiency ratios
Task 3: Interest rate repricing gap
analysis
Task 4: Basel II
Task 5: Liquidity management
100%
Nguyen Thi Hong
Nhung
1804040090
Task 1: HSBC Vietnam’s General
Information and Introduction
Task 2: The impact of size on
performance
Task 3: Interest rate repricing gap
analysis
Task 4: Basel II
Task 5: Lending management
(Individual loans)
100%
Tran Lan Chi
1804040025
Task 1: HSBC Vietnam’s Structure
Task 2:Maximizing the value of firm
Task 3: Interest rate repricing gap
analysis
Task 4: Basel I
Task 5: Lending management
(Corporation loans)
100%
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TABLE OF CONTENTS
INTRODUCTION………………………………………………………………………………4
I. HSBC VIETNAM’S STRUCTURE……………………………………………………….4
1. HSBC Vietnam’s General Information………………………………………………………4
2.HSBCBank’s structure (Hanoi Branch)………………………………………………………5
3. Main services…..………………………………………………………………………….…….6
II. FINANCIAL PERFORMANCE OF HSBC BANK……………………………………..7
1. Determining the long-range objectives………………………………………………………7
2. Maximizing the value of the firm……………………………………………………………8
3. Financial analysis of HSBC Bank……………………………………………………………8
3.1. Return on equity……………………………………………………………………………..9
3.2. Return on Assets …………………………………………………………………………...9
3.3. Net Interest Margin……………………………………………………………………….10
4. Efficiency ratios………………………………………………………………………………10
5. The impact of size on Performance…………………………………………………………11
III. INTEREST RATE MANAGEMENT OF HSBC BANK………………………………12
1. Interest rate in the banking book and sensitivity of Net Interest Income…………………….12
2. Interest Rate Repricing Gap Analysis………………………………………………………13
IV. BANK CAPITAL………………………………………………………………………..15
1. Basel I……………………………………………………………………………….………….15
2. Basel II……………………………………………………………………………….…………17
V. LIQUIDITY AND LENDING MANAGEMENT………………………………………18
A. Liquidity management……………………………………………………………………18
1. Liquidity assets………………………………………………………………………………18
2. Funding sources……………………………………………………………………………..19
3. Solution for liquidity risk…………………………………………………………………..19
B. Lending Management……………………………………………………………………20
1. Individual Loan………………………………………………………………………………20
2. Corporate Loans……………………………………………………………………………..22
REFERENCES………………………………………………………………………………...24
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INTRODUCTION
Along with the general trend of social development, international integration and outreach is
indispensable for each country, leading to the appearance of many foreign banks in Vietnam
and HSBC is one of the most outstanding foreign bank. HSBC is a multinational financial group
operating mainly in the field of finance – banking, appears in many countries around the world,
HSBC has achieved many successes thanks to the operational orientation set by the bank from
the beginning: Global Bank – well-informed about the labor market. Since its inception, HSBC
has started to expand the branch network, diversifying the services offered to customers, not
only in the banking sector, trade finance is also an area that banks focus on and consider as a
strong point. This helps HSBC become the largest financial group in Asia. It is very first
Vietnamese’s office launched in Sai Gon in 1970. After nearly 40 years, On January 1, 2009, a
one-member responsible bank, HSBC Vietnam, was established. This is the first foreign bank
to have subsidiary banks in Vietnam as well as the first bank with one hundred percent foreign
capital to open a system including transaction offices and branches in Vietnam. (Anh Nguyễn,
2020).
I. HSBC VIETNAM’S STRUCTURE
1. HSBC Vietnam’s General Information
HSBC Holdings plc is well known to everyone as one of the biggest banking and financial
service providers in the global economy. With headquarters in London. HSBC Group has
around 3,900 offices in 65 countries and territories across Africa, Asia, Oceania, Europe, North
America, and South America, and around 38 million customers. Therefore, HSBC positions its
brand through the message “Global Bank understands locality”.
According to the annual report of HSBC VN in 2019, the total worth of the company’s assets
was found to be an estimated 125.167 trillion VND as of 31 December 2010, up to 24.3%
compared to 2018. HSBC‘s network is connected by the use of technology and the internet by
which the company is able to provide good ranges of retail banking, commercial banking,
corporate banking to investment banking, private banking and global banking.
In 1970, The first office was opened by HSBC in Saigon (now Ho Chi Minh City). August
1995, City branch. Ho Chi Minh is authorized to operate and provide a wide range of banking
and financial services. A brand in Hanoi was opened and a Representative office was
established by HSBC in Can Tho in 2005.
Simultaneously, HSBC purchased a 10% stake in the Vietnam Technological and Commercial
Joint Stock Bank (Techcombank), well known as one of the largest joint stock commercial
banks in Vietnam in terms of capital. HSBC bought an additional 5% stake in Techcombank
in July 2007. HSBC completed a growth in its stake in Techcombank in September 2008 from
15% to 20%, becoming the first foreign bank in Vietnam to own a 20% stake in a local bank.
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In September 2007, HSBC signed a contract to buy 10% shares of Bao Viet Group, Vietnam’s
leading insurance and financial group, and became the only foreign strategic partner of Bao
Viet. In October 2009, HSBC signed an agreement to increase its stake in Bao Viet from 10%
to 18% with a value of VND 1.88 trillion (about USD 105.3 million).
On January 1, 2009, HSBC officially placed a subsidiary into operation, becoming the first
foreign bank to bring a subsidiary into operation in Vietnam after obtaining a license from the
State Bank to become an established 100% foreign-owned bank in Vietnam in September 2008.
The new bank named HSBC Bank (Vietnam) Limited is headquartered at the Metropolitan
Building, 235 Dong Khoi, District 1, Ho Chi Minh City. With a registered capital of 3,000
billion VND, HSBC Bank (Vietnam) Limited is 100% owned by the Bank of Hong Kong and
Shanghai, the founder and official member of the HSBC Group.
Currently, HSBC has officially been operating in the financial market of Vietnam for 50 years,
stands one of the largest foreign banks in Vietnam in terms of investment capital, network,
product types, number of employees and customers.
2. HSBC Bank’s structure (Hanoi Branch)
HSBC Hanoi’s Board of Directors:
Chief Executive Officer of HSBC Vietnam
Deputy director general of HSBC Vietnam
Managing director of HSBC Vietnam
Chief Executive Officer of HSBC Hanoi
Managing Director of HSBC Hanoi
HSBC Hanoi’s departments:
Accounting Department for big companies and
multinational companies
Sales Counters
Executive Secretary
Marketing Department
Human Resource Department
Legislation room
• Personal finance department provides services to individual customers. The
departments under this committee have the following functions:
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• Counter: Cash collection and payment, foreign currency exchange, sale and payment of
tourist checks in cash from credit cards, remittance remittances, draft issuance …
• The cashier’s department performs transactions under VND 300 million. In case of
transactions over 300 million VND, the Bulk Cash department will take care of these
transactions.
• Sales department introduces utility products, features, procedures, fees … to customers,
advises customers, sells products. Not performing cash collection and spending but
switching to the counter.
• The accounting department will prepare monthly financial statements for the bank,
prepare daily reports, and send them to the central bank according to regulations, check,
compare statements of the client’s account sub-book.
• Information technology department will manage the banking intranet and connect
information with HSBC branches in other countries, state banks and other financial
institutions and establish information security system, install computer software
• The marketing department collects information about markets, customers and other
information required by the bank. This division will also plan product pricing strategies,
customer service, design and promote products, and examine the implementation of
marketing strategies.
• Money transfer department handles all requests to send money to or from customers at
home and abroad through a network of agents around the world along with international
SWIFT payment quality in Vietnam.
• The international payment office has the tasks of opening credit cards for customers,
checking incoming letters of credit and making money transfers in import and export.
3. Main services
In terms of financial services, HSBC bank provides customers with the activities of a
commercial bank in accordance with provisions of law and the State bank of Vietnam. HSBC
Vietnam’s current commercial products are designed to support the critical needs of customers,
which are: optimizing working capital, developing global trade, managing commercial risk,…..
With the advantage of having a global network of operations in more than 60 countries and
through the sharing of market insights, the main strength of HSBC is to connect buyers and
suppliers as well as help their clients manage risk and liquidity more effectively. In a survey
about commercial finance taken by Euromoney Trade Finance, with the participation of more
than 7,000 international trading companies, HSBC was voted as the leading bank in trading
finance services in the UK, USA as well as in Asia. (Mai Phương/BNEWS/TTXVN, 2018).
To always be trusted by customers, HSBC never stops providing the best services and
developing more special products besides the traditional commercial bank services.
Personal Finance and Wealth Management Service: In Vietnam, HSBC offers a full range of
personal financial services including current accounts, security accounts, and international debit
cards that can be used at approximately 131 HSBC ATMs and more than 9,200 PLUS ATMs
nationwide, term deposits in Dong and foreign currencies like: US Dollar, Euro, British Pound,
Australian Dollar,.. as well as structured deposit, foreign exchange, overdraft, payment services,
credit cards, loan services such as mortgage loans or unsecured loans. HSBC also offers a wide
range of insurance products such as life insurance, personal safety insurance, home insurance,
car insurance, health insurance and travel insurance.
In addition, HSBC also provides Premier Customer Service, which is a comprehensive suite of
banking products and services globally connected, serving high-end clients and focusing on
managing real estate. This is a special service that makes HSBC stand out from the other banks,
from 2020, this product has been upgraded to provide comprehensive support for the
development needs of groups increasingly target customers and their families. (Phương Anh,
2020).
Corporate Finance Service: Business banking products and services include account services,
online banking, short-term loans, international commercial finance, medium and long-term
loans, interest and exchange rate hedging instruments, bond services and corporate credit cards.
There is also a professional customer service center to help answer all customer inquiries.
Global Financial Service: Global Financial Services includes corporate banking, investment
banking, money management services. Investment banking service focus on searching and