Luận án tiến sĩ năm 2013 Đề tài: Correlation of Depositors’ Behavior and Bank Patronage in the Inner Districts of Ha Noi Quan hệ tương quan giữa hành vi khách hàng gửi tiền và việc lựa chọn giao dịch ngân hàng trong khu vực các quận nội thành Hà Nội Luận án được trình bày bằng tiếng Anh TABLE OF CONTENTS ACKNOWLEDGEMENT i TABLE OF CONTENTS ii ABSTRACT vii LIST OF TABLES viii LIST OF FIGURES xiv LIST OF APPENDICES xv CHAPTER I. INTRODUCTION 1 1.1. Background of the Study 1 1.2. Objectives of the Study 3 1.3. Statement of the Problem 3 1.4. Hypotheses of the Study 4 1.5. Significance of the Study 5 1.6. Scope and limitation of the Study 6 1.7. Definition of Terms 7 II. REVIEW OF LITERATURE AND STUDIES 10 iii 2.1. Economic Development 10 2.1.1 Viet Nam Economy 10 2.1.2. Ha Noi Economic Development 11 2.2. Regulation of Banking Industry 12 2.2.1. Background of Vietnam Banking Industry 12 2.2.2. Key Challenges Facing the Banking Industry 13 2.3. Background of Ha Noi Banking Industry 15 2.3.1. Banking Industry in Ha Noi 15 2.3.2. Practice in Deposit Mobilization in Ha Noi 15 2.4. Consumer Behavior 16 2.5. Review of Related Studies 20 2.6. Psychological Attributes of Depositors’ Behavior in Bank Patronage 22 2.6.1. External Psycological Attributes 22 2.6.2. Internal Attributes 23 2.7. Factors Influencing Depositor Behavior in Deposit 24 2.7.1. Subjective Factors 24 iv 2.7.2. Objective Factors 25 2.8. Conceptual Framework 27 III. METHODOLOGY 29 3.1. Research Design 29 3.2. Determination of Sample Size 29 3.3. Sampling Design and Techniques 30 3.4. Subject of the Study 31 3.5. Research Instrument 31 3.6. Data Collection Method 31 3.7. Data Processing Method 32 IV. RESULTS AND DISCUSSION 34 4.1. Depositors’ Profile 34 4.2. Depositors’ Distribution by Districts 36 4.3. Attributes of Depositors’ Behavior in Bank Patronage in the Inner Districts of Ha Noi 37 4.3.1. External Attributes Implication of Depositors’ Behavior 37 4.3.1.1. Depositors’ Selection by Specific Banks and Type of Banks – Foreign Banks, State Owned Banks and Joint Stock Banks 37 4.3.1.2. Time Span Depositors Began Relationship with Banks 39 v 4.3.1.3. Depositors’ Selection of the Deposit Kinds and Terms 42 4.3.2. Depositors’ Motivation in Bank Patronage 47 4.3.2.1. Depositors’ Motivation for Changing a Bank 47 4.3.2.2. Depositors’ Motivation for Selecting Banks They Deposit with 54 4.3.2.3. Depositors’ Expectation on the Future Promotions 65 4.3.2.4. Depositors’ Future Investment Plan 68 4.3.2.5. Depositors’ Willingness to Make a Reference with Their Friends 72 4.3.3. Depositors’ Perception and Bank Patronage 74 4.3.3.1. Depositors’ Attitudes in Acceptance of Interest Rate 74 4.3.3.2. Depositors’ Attitudes in Acceptance of Bank Service Quality 75 4.3.3.3. Depositors’ Attitudes for Existing Promotion Programs 77 4.3.3.4. Depositors’ Perception of Bank Safety 83 4.4. Factors Influencing Depositors’ Behavior in Bank Patronage in the Inner District of Ha Noi 85 4.4.1. Depositors’ Selection of Factors and Factors’ Correlation 85 4.4.2. Critical Factors 89 vi 4.4.2.1. Prestigious Banks 89 4.4.2.2. Quick and Convenient Procedure 91 4.4.2.3. Competitive Interest Rates 91 4.4.2.4. Security and Safe 93 4.4.2.5. Convenient Location 94 V. SUMMARY, FIDINGS, CONCLUSIONS AND RECOMMENDATIONS 95 5.1. Summary of Findings 95 5.2. Conclusions 102 5.3. Recommendations 105 BIBLIOGRAPHY 109 APPENDICES 114 SURVEY QUESTIONNAIRES 151 CURRICULUM VITAE 161 ABSTRACT This study was conducted to determine and analyze the correlation of depositors’ behavior and bank patronage in the inner districts of Ha Noi. As the knowledge of depositors’ behavior and bank patronage is not well understandable and given the critical importance of understanding of depositors’ behavior, this study intended to identify the factors influencing depositors’ behavior and define the winning strategies for the banks in fund mobilization. The methodology of the thesis was to review the various relevant literatures. Method of system analysis, method of fieldwork, method of comparison, quantitative research methods and forecasting method were also used in the study. This research was conducted within the inner districts of Hanoi with 257 respondents, which were selected based on random probability. Findings showed that depositors’ behavior was influenced by both internal demographic factors and external factors. The result further revealed a high correlation between depositors’ behavior and factors such as “prestigious banks”, “security and safe”, “competitive rates”, “quick and convenient procedure”. However, lower correlation was obtained in depositors’ perception and attitudes. The recommendations are developed from the insights and conclusions. First is to address the brand issue of banks that built through depositors’ perception of “bank safety”, “prestigious” and other key influencers. Second, banks should take into account all factors in their winning marketing strategies. Third is to recommend the contingency plan that banks should have to keep safe. And the last is to recommend the SBV need to liberalize interest rates on deposits. CHAPTER I INTRODUCTION Fund mobilization is essential to banks’ success. Recently, banks face with strong competition in attracting and retending depositors. Many banks fail to mobilize funds while others are able to understand better depositors and depositors’ behavior in bank patronage and take advantadge of their knowledge to win the game. In the study, the researcher would like to address the issue of depositors’ behavior and bank patronage. 1.1 Background of the Study Vietnam economy has been in the fast growth track for a decade. Vietnam GDP growth is mainly come from government capital expenditure and private sector investment. The fast infrastructure development and urbanization process require huge source of funding. One of the engine to lure the growth is the expansion of credit by banking sectors. The banking sector in Viet Nam consists of 5 state owned banks, 37 commercial joint stock banks, 53 foreign – related banks, 30 financial companies and finance lease companies, 1 Central People Credit Fund and 1,057 local people credit funds (Nguyen C.T., 2011). The number is quite big giving the Vietnam’s GDP per capital is 1,300 USD by 2011 (Dantri, 2011). The competition is high in the sector, especially in main economic and political areas like Ha Noi and Ho Chi Minh cities. The interest income contributes a major part of banks income. Most banks have their income heavily dependent on lending activities with interest income to total income ratio of some banks reaching above 90% in 2010 (Quach, 2011). This causes many 2 banks concentrating on fund mobilization. One of key sources of fund would be the depositors’ funding. The source of fund is viewed as a stable funding and counts for a big part in banks’ balance sheet. Many strategies that banks persuad to lure their deposit growth including branch network expansion, high interest rate offer, attractive promotion campaigns. Due to the fact that the banking sector plays a key part in the economic activities and economic development, and social stability as well, the banking activities in Vietnam have been highly regulated. There are still many different experts’ opinions on if the banking sector needs to be moving more deregulation or regulation. However, taking the reason to prevent banks’ failure, the State Bank of Viet Nam put in place a very high level on banks supervision. Some regulations that directly affect banks’ expansion of credit and fund mobilization include control of capital adequacy, bank liquidity ratio, and the banks’ branch network expansion. Even though, the State Bank of Viet Nam tries to communicate and act to prevent the banks’ failure in the future. However, depositors are always facing with risk of losing their fund in case of banks’ run or bankruptcy. For deposit insurance, the depositors can receive is 30 million VND at maximum as per law. To study the depositors’ behavior is always necessary for banks to serve better their clients. In fact, a few information of depositors’ behavior have been made available in public sources in Viet Nam. Information is normally in the form of observation and experts’ opinion. In late 2013, there is a doctorate study on individual customers’ depositing behavior at banks made by Le Thi Thu Hang, which is available at the Viet Nam Instiute of Social Science. Le T.T.H (2012) scoped her study at nationan-wide scale and focused on individuals who had or did not have a deposit at banks. However, there has not been a similar study of the correlation 3 between depositors’ behavior and bank patronage in Ha Noi that the researcher could identify in the public sources. In addition, depositors’ behavior would always reflect through certain factors. Therefore, the study of the correlation of depositors’ behavior and bank patronage should be a key success factor for banks to win in the deposit competition race in Ha Noi and for those who want to get knowledge of the study. 1.2 Objectives of the Study The main objective of the study is to determine and analyse the correlation of depositors’ behavior and bank patronage in the inner districts of Ha Noi. Besides, the search aims to achieve the following objectives: 1. To describe the background of the general economic environment and the banking industry in Ha Noi 2. To determine and analyse comsumer behavior model and to determine depositors’ behavior model 3. To characterise the profile of the depositors in Ha Noi 4. To identify the factors that influence the depositors’ behavior in selecting banks in the inner districts of Ha Noi. 5. To determine the correlation of depositors’ behavior and bank patronage in the inner districts of Ha Noi. 6. To identify the winning strategies for banks in fund mobilization. 1.3 Statement of the Problem Funding mobilization is very ctitical to banks in Vietnam, especially in Ha Noi as a large number of banks with too high credit growth (Quach, 2011) with the limited source of owners capital need to maintain their growth and liquidity by seeking BIBLIOGRAPHY 1. Arnould E, Price L & Zinkhan (2002). Consumer (first edition). Mc Graw Hill, New York 2. 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