HANOI, 2014

PREFACE
The purpose of the report is to describe my valuable experience
during the internship in Import Export Office of VietinBanks Main
Operation Center. This report is also to fulfill the requirement for my
Finance and Banking course in Foreign Trade University. For the
whole internship, I had opportunity to learn general operation
process in that Bank and to observe how banking officers perform
their duties day by day. Besides that, I was able to put my
theoretical knowledge into the real cases and gain a lot experience.
In the report, I intend to concentrate on analyzing the business
performance

of

the

whole

VietinBank

and

suggesting

some

recommendations to improve the effectiveness in its operation.

Therefore, I would like to divide my report into 3main parts,
including:
Chapter 1: An overview of VietinBanks Main Operation Center.
Chapter 2: Internship journal.
Chapter 3: Recommendations to improve the effectiveness in
VietinBanks performance.
Over the period of internship, I would like to give my special thanks
to my internship guide Mr. Nguyen Thanh Hai and other banking
officers in Import - Export Office for their supports and suggestions.
And the person I most wish to thank is my supervisor Professor. Tran

Thi Thu Huong for her dedicated instructions to help me accomplish

my internship report.

Chapter 1: An overview about Main Operation Center of Vietnam joint

stock commercial bank for industry and trade.............................................3
1. Profile of Vietinbank................................................................................. 3
1.1. Formation and development.............................................................3
1.2. Organization structure and function of Main Operational Center.4
1.3. Current performance of Vietinbanks Main Operation Center...................7
Chap 2: Internship Journal...............................................................................9
Chapter 3: Nghip v thanh ton L/C xut nhp khu ti SGD............................12

Chapter 1: An overview about Main Operation Center of

Vietnam joint stock commercial bank for industry and trade
1. Formation and development

Vietinbank was established on 26 March 1988 after its separation

from the State Bank of Vietnam in accordance with Decree
No.53/HDBT by the Ministers Council. Its register name in English is
VIETNAM JOINT STOCK COMERCIAL BANK FOR INDUSTRY AND
TRADE and its trade name is VietinBank. The head quarter is
located in 108 Tran Hung Dao Street, Hoan Kiem District, Hanoi,
Vietnam with the network of 147 branches across 63 provinces and
cities nationwide

and 3 foreign branches: 1 branch in Frankfurt,

Germany, 1 branch in Berlin, Germany and 1 branch in Vientiane,

Lao PD.
In terms of scope of business, VietinBank offers a wide range of
retail and wholesale banking products and services both at home
and abroad. VietinBank also operates in the following areas: lending,
investment, trade finance, guarantee, re - guarantee, forex trading,
deposit,

payment,

money

transfer,

card

services,

local

and

international credit card, travelers cheque, securities trading,

insurance, financial leasing, and many others.
Since 16 July 2009, Vietinbank stock has been official traded on HCM
City Stock Exchange (HOSE). The diagram below illustrates its
formation and development over a twenty five years period.

omplete
system
innovation
towards project
modernization
and
in all
aspects
of banking
act ivies; con
o-tier
nted the
bank,
organized
officially
restructuring
put Vietnam
JSC Bank
in for
terms
Industry
ofstandardization
debts
andhandling,
Trade into
general
operation
policies
& mechanisms

Figure 1: Twenty five years of construction and development

Source: Vietinbank annual report 2013

Before, period of foundation, VietinBank was a bank in small size
and had only 01 transaction center. However, over the time, up to
now, VietinBank has developed an operation network comprising
of 01 Transaction Centers, 150 branches, over 1000 transaction
offices/ savings

offices.

It

also established

correspondent

relationship with 900 banks, financial institutions of 90 countries and

territories all over the world.
Over the period of building and development, until now, VietinBank
has been achieving many outstanding
in fund allocation and
Board results
of directors
its credit activities. In 2004, it successfully mobilized VND 64,160
billion and lent to a large number of companies about VND 121
General directors-CEO

billion. And after that, these figures increased to VND 422,995 billion
and nearly VND 468 billion. Over the recession period, this bank still
Vietinbanks headquarter

maintained nonperforming loan (NPL) ratios under 3 %. Up to

present, in implementing the States reform guidelines, the bank has
been active to mobilize medium and long term capital
besides
the
Branch
network
Operational center (Transaction center)

State budget fund for important projects and works.

1.1. Organization structure and function of Main
Main functional divisions

Supporting divisions

Operational Center
1.1.1. Organization structure

Export Documentary Settlement Department

Accounting Dept

HR and administration Dept .DEDept

Import Documentary Settlement 1 Dept.

Figure 2: Organization chart

Research and service development Dept

Bank guarantee & Import Documentary Settlement 2 Dept. SWIFT & test key Dept.

Technical Dept
Factoring and Receivables Financing Dept.

Cash transfer Dept

Source: HR and administration Dept.

1.1.2. Function of main divisions of Main
Operation Center
Export Settlement Department
This is an outstanding product of VietinBank, ensuring that the
exporter will be paid upon delivery of goods/services and
presentation of the documents complied with the terms and
conditions of the L/C. VietinBank will serve you as an advising bank,
paying bank, confirming bank or negotiating bank.

Exporters will receive consultancy about unfavorable

or exceptional points,... upon receipt of L/C and during preparation
of documents to claim for payment according to L/C.

Exporters will be financed through export financing solutions

with favourable terms and preferential interest rates.

Import Settlement Department (1 &2)

After clients import goods and their partners want to select a secure
payment method, VietinBank will issue L/C for the importers and
pay/accept to pay foreign banks upon receipt of compliant shipping
documents within the validity of the L/C.

Importers will receive free consultancy on international trade

rules and practice and special terms and conditions of the L/C in
order to minimize risks arising from foreign trade payments.

VietinBank will be responsible for checking the compliance of

the documents.

Importers will be financed through import financing solutions.

Factoring and Receivable Financing Dept.

As a leading bank in international payments, Vietinbank always

provides the best services, facilitating the international trade
activities.

Services

at

the

department

include:

export

factoring/financial risk guaranty and proflifting. Factoring is a special

form of short-term finance where Vietinbank purchases the sellers
receivables and assumes the credit rish, either with or without
recourse to the seller. .Porfaiting
Recently, export factor is a common new practices
Stipulated tolerances in credit amount, quantity, unit price or other
variables have not been met.
SWIFT & test key Dept.
Xc nhn ch k ca ngn hng thng bo xem c ng hay khng.
Accounting Dept.

Accounting

Division

is

responsible

for

the

mobilization

and

administration of the Bank's financial resources, both the assets

and liabilities, and for the management of the Bank's liquidity,
accounting and financial records, and the relations with financial
markets and intermediaries. In addition, it manages the Bank's
accounting system and is responsible for keeping the accounts and
mandatory

ledgers

(annual

accounts

and

accompanying

documents, as well as the periodic reports).

HR & Administration Dept.
The generic function of this department are: recruitment of new
employees; orientation and placement of the recruited employees;
administration

of

benefits

and

compensation

programmes;

ensuring efficient HR Information Systems; developing and running

with

strategic

approach

to

human

resources;

monitoring

compliance with legal requirements as well as administering award

and recognition programmes. Under the same division lies the Staff
Benefits Section which is responsible for all employee welfare
matters including the administration of pensions; administration of
the medical aid scheme; administration of group life insurances for
members of staff; supervision of the sports club; employee
wellness.
1.3. Current performance of Vietinbanks Main Operation
Center.

As of financial-year-end 2013, Vietinbanks impressive results were

driven by increasing growth momentum together with secure and
efficient operations. More specifically, Vietinbanks revenue rose
significantly throughout the five-year period from 3373 billion in
2009 to 7751 billion in 2013, a growth of 56%. Such achievement

was brought about by the diversification of services and other

activities which attracts more customers and increases the income
from payment fee, money transfer charge, L/C issuance, etc. In the
year 2011, Vietinbanks revenue reached a peak of nearly double
that in the previous year, which signals the result of a fruitful
cooperation between Vietinbank and other international commercial
banks. However, likewise the upward trend in profit, its costs tripled
from 2400 billion at the beginning to over 6000 billion in 2011. The
high total cost was attributed by a rise in surcharges, advertising,
promotion and investment on new technology. Vietinbank
continuously expands its branches, clearing houses and transaction
offices.
9000
8000
7000
6000
5000
billion

Total Revenue
Total Cost

4000

Profit

3000
2000
1000
0
2009

2010

2011

2012

2013

Figure 3: Vietinbanks performance

Source: Vietinbanks annual report, 2013
VietinBank always adheres to policies on provisioning for nonperforming loans. At the end of the third quarter, the bank continued
to maintain a provision of 4.051 trillion VND, significantly higher

than the value of non-performing loans. The frequency at which

VietinBank makes provisions for credit risk is 1.08 times. This is a
factor that ensures safety of operations, allowing the bank to deal
with non-performing loans at its discretion. In addition, VietinBank
achieved ROA, ROE, and CAR figures that far surpass the targets set
by the shareholders committee. This achievement is a testament to
VietinBanks effectiveness in increasing capital and profits.Having
achieved such results, at the end of the third quarter, VietinBank
was the leading bank in Vietnam despite difficult conditions in the
economy as well as the banking industry. It is expected that by year
end 2014, VietinBanks financial results will be yet more favorable,
owing in large part to wise managerial decisions and sound business
solutions that are being taken as the year comes to a close.

Chap 2: Internship Journal

Day One: Monday, July 01st, 2014, 12:30 PM 4:30 PM
(Hours: 4)

Today is my first day at the Main Operational Center of Vietinbank.

The office was nicely and tastefully decorated, which made a deep
impression on me. A small bulletin board was hang on the wall and
artificial flowers were lying on each table. Working hour is divided in
three shifts: the first shift is from 8:0 a.m to 5:30 p.m, the second
shift is from 9 a.m to 8 p.m and the third shift is from 1:30 p.m until
the work finished.
As I walked in my first day, I was greeted with cheerful smiles and
positive attitudes. My supervisor, Nguyen Thanh Hai, introduced me
to each person present and gave me a description of what types of

things they work on. After introductions, he showed me around the

office and work center. He described various departments within the
work

center,

such

as

Export

Documentary

Dep.,

Import

Documentary Dep. and Factoring and Receivables Bank Financing

Dep. We then went on to some personal details and job expectation.
It came to my surprise to know that my supervisor, as well as many
people there, was a graduate from FTU, K45 and that he had an
internship at the headquarter of Vietinbank before.
Day Two: Tuesday, July 02, 2014, 10:15AM 4:15PM (Hours:
6)

Today I helped my supervisor, Mr. Hai, with sorting L/C to each

group. The Main Operational Center was responsible to monitor
banking branches in provinces, so each group of four staff working
together to deal with documents from six provinces.
The morning shift has fewer tasks than the afternoon one, so fewer
bank officers came to the workplace. The first thing that they do in
the morning is check their emails, then prioritize their activities for
the working day. When observing the staff doing their tasks, I read
the operation guideline and found out how close it was to what I had
studied at my university so far. The first chapter in the guidebook is
steps to open an L/C and the second is about documentary
collection.
Day Three: Wednesday, July 03, 2014, 9 A.M 4 PM (Hours:
7)
Today I was introduced to the Export Documentary Settlement
Department. This office included four men and six women, which
was a common picture in most banks. Through observing my

supervisor I learned that communication and connection were very

essential. Interbank chat was available at all time to help the staff
conduct teamwork more effectively. Though the workload was
sometimes stressful, I could feel a cozy and comfortable atmosphere
where there was always a smile on peoples face. The Main
Operation Center seemed to be their second family and occasionally
they told jokes toward each other.
After having background information about L/C and other documents
and categories of service relating L/C that VietinBank supplies, I was
guided to check the accuracy of every single document when
VietinBank played a role as advising bank. First of all, the banker had
to

read

and

understood

all

terms

and

conditions

of

L/C.

Subsequently, he/ she continued to check other papers, for example:

packing list, commercial invoices, bill of lading, bill of exchange, or
some kinds of certificates under the rules of Incoterm 2010. If there
is no mistake, discrepancy, then banker would be responsible to
pack these entire documents and send them to issuing bank in
foreign country and write a notification to customer, informing that
VietinBank complete its duty. Otherwise, the banker had to notify to
his/her clients and required them to correct the discrepancies until
the issuing bank accepted or agreed to pass.
Day Four: Monday, July 08, 2014, 9 A.M 2 PM (Hours: 5)
Today was the first day of the week so everyone in the office got
busier than usual and the office was far from being quiet. Everyone
received more LC application from the banking branches and
customers. Hardly did the printer stop working. Once it was out of
order, the fixer came immediately to fix it.

The discrepancies among several documents were widely discussed,

such as the lack of Certificate of Origin (CO) number, the incorrect
measurement of carton, the lack of an unit for weight. For example,
a $30 000 contract with Japan lacked the CO form VJ..Common
customers of Vietinbank were Viglacera Ceramic Tile Company
(Ceramic), Hoa Sen (steel), Tu Thanh Company Lmt. (gherkin), Cty
co phan may mac QTN, May 10 Company Lmt (Garment)..
Day 20: Tuesday, July 29, 2014, 9 A.M 3 PM (Hours: 6)
Today, Mr.Hai gave me a real task: dealing with information using
TRADE FINANCE system and SWIFT program. While giving instruction,
he always made sure that I remember the key words and typical
codes. I became interested to know that most letter of credit was in
the SWIFT format, with about 49 terms. A complex term of L/C was
included in article 47 of the SWIFT form. During the period, I realized
the importance of learning international payment, which I had not
studied at my university.
My supervisor encouraged me to ask if there was anything sound
ambiguous.

He

emphasized

that

understanding

the

procedure

thoroughly was of great necessity to conduct a hands-on task.

Day 21: Thursday, July 31, 2014, 9 A.M 4 PM (Hours: 7)
Today I learned that bank officers need to have flexible attitude and
alert mind in the workplace. They enjoyed a cup of coffee after lunch
or when feeling drowsy. During the tea break, they received a
updated list of banned countries for American companies. Cuba,
North Korea and Egypt were examples of the countries with which
American companies were banned from doing business. As a result,
US dollar transaction with these countries was not allowed and other
trade currencies, such as euro, were an optimal choice. For the

countries and products which were suspected to encounter trade

restriction or limitation, officers in Export Documentary Dept.
needed to ask the R&D officers to check.
Day 25: Tuesday, August 05, 2014, 9 A.M 4 PM (Hours: 7)
Today is the last day I am at the office. It is near the mid-autum
festival, so the office was full of moon cake and fruits. Everyone
seemed to be cheerful
The reason why I chose to have an internship in the Main Operation
Center is because I have a passion for the banking industry and
international finance. I enjoy the aspects of the office: being
organized, checking the documents and collaborating with other
members, The internship period plays a pivotal role and of great
necessity for all undergraduate students. It does not only provide
me a golden chance to check theoretical knowledge but also helps
me learn how to put theories into practices.

The tasks, at first,

sounded fairly simple for a newcomer like me. However, I realized

that it really requires the staff many qualities such as: carefulness,
patience and proficiency. In addition, I also observed the typical
works of banking officers and their attitudes when dealing with the
problems.
Even though, I had only five weeks for my internship in VietinBanks
Main Operation Center, I would still feel more self confident than
before. And personally, I think this valuable opportunity would be a
stepping stone and unforgettable experience for me to prepare the
best things for my future career.

Chapter 3: Nghip v thanh ton L/C xut nhp

khu ti Main Operation Center
Letter of Credit (L/C), as people know, is a payment method in which
the issuing bank, upon request of the applicant (the importer),
commits to pay a certain amount of money to the beneficiary (the
exporter) or accept the bill of exchange drawn by the beneficiary
after receiving the documents in conformity with the terms and
Seller

conditions of the L/C. More specifically, figure 4 Buyer

illustrates the
Contract

process in which L/C is issued and payment is made.

appl
Documents
payment icati
on

Payment

Doc
Advising
Figure 4:
Letter of
credit
um
ent

Payment
Advising bank

Document
pay
men
t Issue

Issuing bank

Source: Viettinbanks procedure guideline

1. L/C issuance
At the request of the customer (the importer), the Import
Documentary Settelemt 1 and 2 of VietinBank issues the L/C,
committing to pay to the beneficiary at sight or at maturity when
the beneficiary presents the documents in conformity with the terms
and conditions of the L/C. Depending on your credit history, L/C can
be issued with or without a deposit. Vietinbank acts like an
intermediary ensures safety for both exporter and importer; reduces
capital pressure for the importer; and give advises on the
transactions to ensure customersbenefits. This is particularly
important to bear in mind that Vietinbank only deal in documents,
not in goods. In the case L/C amendment, VietinBank amends the
L/C upon request of the customer (the importer). As illustrated in
Figure 5, L/C is issued by the following process.
Figure 5: L/C opening procedure

c
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td
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m
S
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1
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/C
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/C
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5
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te
Example:
SALES CONTRACT
Date: 2014-06-26
Contract No: S04688
Seller: CARGILL INTERNATIONAL TRADING PTE LTD
300 Beach Road, #23-01 The Concourse Singapore 199555
Phone: (65)6295-1112
Fax: (65)6393-8880
Co: Reg No.196700442
Buyer: HOA SEN GROUP
No. 9, Thong Nhat Boulevard, Song Than II Industrial Park
Di An Ward, Di An Town, Binh Duong Province, Vietnam
Commodity: Prime Newly Produced Hot Rolled Steel Coils
Specification: HRC grade: SAE1006
Step 1: Receive documents to open L/C
On 20th May, representative from Hoa Sen Group

sent L/C

application letter and letter to borrow foreign currency. Bank officer

checks the information in the application form. The commodity

traded is steel coils, so it is in conformity with the business scope of
the company. Because the documents related to L/C is sent through
fax, SWIFT & Testkey staff is responsible to check the documents,
the number of documents received and the signature of Hoa Sen
Groups representative. If the signature is correct, SWIFT & Testkey
staff notes the words Test Correct on the documents.
Step 2: Open L/C
Upon received of the verified documents, Vietinbank rechecks to see
if the document fit with international practices, governing rule of
Vietnam state bank, international commercial contract, whether it is
risky for the customers and issuing banks. If there exists any
discrepancy, Vietinbank immediately contacts Hoa Sen Groups
representative to review the documents.
As Vietinbank follows the SWIFT message body of issurance of letter
of credit, it uses MT 700-Issue of a Documentary Credit swift
messages when issuing a L/C.

Step 7: Save documents

The documents is then put together in file and after several days is
packed then all the documents was transported to Dong Anh to
save. (hn does not have land)
2. L/C advising
VietinBank will serve exporters as an advising bank, paying bank,
confirming bank or negotiating bank.

At present, it is common practice in Vietinbank that L/Cs are issued

as SWIFT messages in a standardized format. This procedure
facilitates both the issue of the L/C and authentication at the
advising bank, which will then be able to advice it immediately to
the seller.
Today, most L/C are issued in a standardized SWIFT format, as
shown below
The box on page shows a standard SWIFT format. This example
shows a freely negotiable L/C, available at sight with the issuing
bank, and advised to the seller without the advising banks
confirmation.
Vietinbank advices L/Cs to the seller through its internet-based
advising services, which means that the seller can expect to receive
the L/C almost immediately after the bank receives it. In this form of
the L/C can then easily be distributed in a standardized electronic
format to and within the company, thus increasing its effectiveness
and reducing possible errors in transmission.
The next phase in the chain, the presentation of documents, can
also be completed electronically in some cases, but only if the L/C
indicates that it is subject to the eUCP rules. The main limitation in
presenting all documents in this form seems to be the transport
documents, which are not always available in an electronic format.
Example of an L/C issued through SWIFT

CONCLUSION
After more than 25 years of development, Vietinbank has achieved
several accomplishments and has been one of the leading banks in
Vietnam. It is proved by the continuous efforts of all branch
employees on improving service quality as well as maintaining a
sustainable growth in both fund mobilization and credit activity.
Although there are still some certain difficulties existing, from my
point of view, the appropriate strategies and targets of the Bank will
guarantee that its stable position in the eyes of customers.
It will be an unforgettable time of my life when I had the experience
in working as a banking officer. Moreover, working as an internee
assists me to comprehend more about banking system, which is
very useful for my future career.
To conclude, I would like to express my gratefulness to everyone,
who support me accomplish the report.

REFERENCE
Anders Grath, The handbook of International Trade and Finance,
Nordia Publishing Ltd for the Institute of Export, 2005, Great Britain
Annual reports of VietinBank from 2009 to 2013, available on
VietinBanks

website:

http://investor.vietinbank.vn/FinancialReports.aspxv
Analysis of ABC securities in 2013 about VietinBanks security.
Information about VietinBank, available on website of StoxPlus,
http://www.stoxplus.com/