2. Analyze credit operations Outstanding loan is the amount that disbursed by the bank but not collected yet.

This is also a validation criterion to assess the extent of credit activities in each period. Almost all of banks with high outstanding loan balance often have the highest-scale banking operations, capital strength and diversity. Here are the situation of credit operations in 3 years, from 2007 to 2009: The situation of outstanding loans by loan terms TABLE 3: OUTSTANDING BALANCE SITUATION BY LOAN TERMS OF DONG A BANK FROM 2007 - 2009 Unit: billion VND

Indicator Short-term loan Mediumterm loan Long-term loan Total

2007

2008

2009

Difference 2008 Difference 2009 vs vs 2007 2008 Amount Growth Amount Growth rate(%) rate(%) 2.582 4.397 734 7.713 19.03 122,89 102,80 43,19 6.718 1.187 880 8.785 41,60 14,88 60,77 34,36

13.566 16.148 22.866 3.578 714 7.975 1.448 9.162 2.328

17 858 25 571 34 356

Source: Annual report of DAB from 2007 to 2009 Through the analysis above shows that outstanding loans of DAB has been increasing steadily over the years. Particularly in 2007, outstanding loans of the bank was 17 858 billion, in 2008 has increased to 25 571 billion. In term of value,it rose 43.19% ie 7 713 billion compared with 2007. In 2009 the number was 34 356 billion,an increase of 8 785 or 34.36% compared with 2008. Figure 3: SITUATION IN LOAN TERMS FROM 2007-2009

Hnh. Tnh hnh cho vay 2007

4% 20% 31%

Hnh. Tnh hnh cho vay 2008

6% 0%

63% 76%

Overall, short-term loans are accounted for approximately 60%, but since 2007 this proportion is nearly 76% by 2008, the proportion had fallen to 63% significantly because of the economic crisis in 2008. High inflation leads to higher interest rates so that short-term loans bring lower benefit to the borrower. On the other hand, businesses in this period should have a fixed investment capital in the long-term and overcoming the consequences of the crisis phase, so the ratio between the medium and long term loans increased, especially in the medium term (up from 20% to 31%). On that basis, until 2009 when the economy was more stable, short-term loans has increased in term of proportion, though still insignificant, but it is also a good sign because short-term loans usually have higher interest rate during the same period for the medium and long term loans but the risk is lower. This shows that shortterm loans have higher proportion than medium and long term loans because the longer term, the more risk. Banks tend to shift to increase the proportion of short-term lending to quick recovery, quick return on capital especially in fastgrowing economyand more volatile conditions. 1.2.2. The situation of outstanding loans by economic sectors As a developing country, Vietnam is gradually rising along with the strong development of international economy. The banking system in Vietnam is better responding to demand of the economy, particularly DAB is making strategic activities to improve the performance of their credit operation. Aware that the social and economic development is associated with capital needs, so DAB have been trying to extend funds to meet the needs of the economy. Economy growth leads to demand for higher capital, banks must provide enough capital for fast and efficient economy. So from the loan just for some specific object, the bank has extended loans to various economic sectors and different economic sectors, to fully meet the capital needs of the economy. Analysis of the loans under the ownership of DAB showed the effects of the expansion of lending to economic sectors, the different economic sectors as well as the risks that they will bring to the bank's activities. TABLE 4: OUTSTANDING BALANCE BY ECONOMIC SECTORS OF DAB IN THE PERIOD FROM 2007-2009 Unit: billion VND

Difference 2008 vs2007 INDICATOR 2007 2008 2009 Amount

State Enterprises State Limited Company Private Limited Company Joint Stock Company Private businesses Enterprises with foreign capital investment Collective economy

Growth rate(%) 7,18 13,04 61,53 106,10 8,38 9,10 30,49 4,33 43,19

682 138 4.731 4080 668 22 82 7.455 17.858

731 156 7.642 8409 724 24 107 7.778 25.571

848 139 10.355 11.759 1.415 56 113 9.671 34.356

49 18 2.911 4329 56 2 25 323 7.713

Difference 2009 vs 2008 Gro Amou wth nt rate (%) 117 16 -17 10,9 0 35,5 2.713 0 39,8 3350 4 95,4 691 4 32 6 1.893 8.785 133, 33 5,61 24,3 4 34,3 6

Individual Lending Tng cng

Source: Annual report of the joint-stock commercial banks in East Asia during 2007 to 2009 The above table shows the total outstanding loans to individual customers in 2007 was 7455 billion and to groups was 10,403 billion but over the years 2008 and 2009, these two indicators were quite a lot of difference. Namely in 2008, personal loans to customers were 7778 billion, an increase of 323 billion (up 4.33%) than in 2007 and group customers loans reach 17,793 billion VND,increased 7390 billion (up 71.04%) compared with 2007. In 2007, DAB has diversification of credit products to meet the diverse needs of all different types of customers. For individual customers: EAB has met the needs of customers with its products: investment securities lending and advanced cash loans on the sale of securities through securities companies linked with DAB, real estate business lending, deferred payment loans at Nguyen Kim electronic supermarket, jewelry loans at PNJ company, motorcycle loans at Tien Phat company, Tin Phong company, consumer loans for customers who are officers, ... For business customers: DAB have special attention in small and medium enterprise customers. DAB has continued the cooperation with international

financial institutions to finance small and medium enterprises in Vietnam. In 2009, individual customer loans rose 1893 billion,up to 9671 billion (up 24.34%) and group customer loans was 24,685 billion VND, up 6892 billion (up 38.73%) compared with 2008. We can infer that the size of our country's economy is growing, the retail business is not effective, beside that the enterprises have more opportunities to develop in the intergration age, the individual gradually concentrated into small businesses to develop a specific direction, with the creation of competitive advantage, enterprises need to invest more capital in modern equipment so that loans of this group increased in both proportion and value. Go into specific components of collective loan, we found that the policy of the country is conducting equitization of state enterprises, so the loans of stateowned companies generally decreased or increased less. Enterprises with foreign investment has increased steadily year by year shows that Vietnam is attracting large investments from abroad. In addition, private limited company loans account the highest proportion, this is one of the major economic sectors in the economy of our country today. 4.1.2.3. The situation of debt outstanding under the bank's group TABLE 5: BALANCE SITUATION OF DEBT BY DEBT DONG 2007 2008 2009 Target

Target
Standard debt Special mentioned Sub-standard Doubtful Potential loss of capital creditors Total

2007 Amount Share 17.744 34 5 14 61 17.858 99,36 0,19 0,03 0,08 0,34 100

2008 Amount 24.523 397 354 111 186 25.571 Share 95,90 1,55 1,38 0,43 0,73 100

2009 Amount 33.663 235 60 126 272 34.356 Share 97,98 0,68 0,17 0,37 0,79 100

Source: Annual report of the joint-stock commercial banks in East Asia during 2007 to 2009 Looking at the table, we found that in 2007 the debt qualifies as 17,744 billion by 2008 the number was 24,523 billion but rose 38.2% but compared to the increase of total loans was 43.19%, then the its surface density decreases, the situation in 2009 to better balance is 33,663 billion, increased by 27.15% higher than the growth rate of total outstanding loans. On the other hand in

2008, the debt situation of the group from group 2 to group 5 has greatly increased this shows the strong influence of the crisis on the Bank's systems like, but in this particular Bank of East Asia can be, for particular groups of creditors group 3 had increased 6980% from $ 5 billion in 2007 to 2008 was 354 billion. The group also significantly increased debt all increased over 200%. Thanks to an effective remedy in 2009 to Group 2 and Group 3 debt has decreased markedly the most special is the group 3 group debt fell to 60 billion which is down 490%, but the result of years 2008 that the debt group 4 and 5 have increased but not significantly compared with 2008, but Bank of East Asia requires a lot of measures to redress the group's bad debt increase is happening at the bank. 4.1.2.4. Debt situation in the economic structure In addition to the classification of credit by economic sectors, DAB also classified by economic sectors. This is also the base as a basis for lending because the bank could indentify whether sectors are developing based on this analysis, and through that,the bank will have the right attitude in lending. Today, the country's economy have high-speed development due to intergration, the economic sectors are also under development, so that each industry has its own strengths. Credit analysis by industry which gives us more economic activity in bank credit as well as the risks that it brings. TABLE 6: SITUATION IN EXCESS DEBT STRUCTURE BY ECONOMIC SECTOR BANK OF THE 3-YEAR 2007-2009 Unit: billion VND

Target
Agriculture, forestry and fisheries Trade and services Industry and construction Others Total

2007 793 5.694 11.177 194 17.858

2008 1.328 6.712 17.305 226 25.571

2009 1.430 9.170 23.542 214 34.356

Source: Annual report of the joint-stock commercial banks in East Asia during 2007 to 2009 In 2008 - 2009 due to volatile on food export market such as fish taken in the Red Book, and a number of laws on anti-dumping made loans for Agriculture Forestry - Fisheries increased but not significantly with only 7.68% compared with an increase of 67.47% in 2008. Because our country is in the development period, the demand for food and drink, travel, communication are increasing,so loan volume of trade and services sectors also increased steadily over the years, in 2007 was 5694 billion; in 2008 was 6712,increased 1018 billion (up 17.88%); in 2009 was 9170, an 2458 billion increase (up 36.62%), double the increase in 2008. Besides, with the aim of developing infrastructure, industrialization and modernization, industrial and construction

sector is always accounted for the largest loans. In 2009 although the growth rate (36.04) is lower than in 2008 but the volume increase is equivalent between 2008 and 2009 (6128 and 6237). A BANK FROM 2007 2009