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CREDIT RISK MANAGEMENT AND BAD DEBT CONTROLLING
Case: ANZ Vietnam

LAHTI UNIVERSITY OF APPLIED SCIENCES Degree program in International Business Thesis Spring 2013 Minh Thong To

Lahti University of Applied Sciences Degree Programme in International Business MINH THONG, TO Credit risk management and bad debt controlling Case: ANZ Vietnam

Bachelor’s Thesis in International Business, 53 pages, 3 pages of appendices Spring 2013 ABSTRACT

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...

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