Improve financial capacity of commercial banks: Case study at Joint stock commercial bank for foreign trade of Vietnam

Abstract

Financial capacity is a very important factor to evaluate the “strength” of an enterprise. The study focuses on assessing financial capacity of commercial banks using financial indicators related to
capital, income, profitability, asset quality, market share size and liquidity with a case study at Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB). The research employs qualitatitve method to analyse strengths and weaknesses in financial capacity of VCB in compared with other state owned commercial banks. Specifically, VCB ranked the second among the three State-owned commercial banks in terms of financial capacity based on six selected groups of norms. VCB has advantages compared to the other two State-owned commercial banks in terms of groups of norms related to profitability, asset quality and liquidity. However, VCB still has some limitations when it comes to groups of norms related to capital, income and market share size. Therefore, the author proposes some policy recommendations in order to improve the financial capacity of VCB in the coming period.