It can be seen that the Vietnamese economy in the first decade of the 21st century has a significant development in the banking sector. Commercial banks represent a big role in this development. The banks’ capital rose rapidly and became an important factor in Vietnamese economic growth. However, a negative side always follows the result of any growth. Expanding operation leads to debt rate increase in most commercial banks. Especially bad debts rate rose rapidly. Bad debts became a serious problem for the Vietnamese economy.
When the amount of bad debts increases to a particular point, it will hinder the development as well as the operations of the banks. Due to this issue, controlling the bad debt rate is hard work for all commercial banks. There is no model of solution for all banks. According to specific characteristic of each bank, specific solutions to control bad debt rate are provided. However, those solutions seem to be not as effective as expected due to many reasons. When Vietnam became an official member of the World Trade Organization (WTO), the high bad debt rate brought many challenges. It reduced the banks’ core competency as well as customer trust.
The objective of this thesis is evaluating credit risk management policies and investigating Australia and New Zealand (ANZ) Bank as a case study. Readers will get familiar with the risk management’s concepts in banking business, understand more about the Vietnamese banking system and know more about the importance of credit risk management as well as controlling bad debt rate in the economy.
The research for this thesis is mainly done in ANZ Vietnam with the help of three employees and one manager of the Collections Department, Loan Assessment Department and Fraud Department. This thesis also tries to create a picture of the lending procedure and criteria of ANZ Vietnam. Moreover, the State Bank of Vietnam’s regulations and policies are also investigated to contribute to the research.
Because ANZ Vietnam is considered one of the best banks that has lowbad debt rate, recommendations for other banks are provided.