TABLE OF CONTENT

1 Executive Summary 3

2 Situational Analysis 3

2.1 Market Summary 3

2.1.1 Market Needs 8

2.1.2 Market Trends 10

2.1.3 Market Growth 10

2.2 Competition analysis 12

2.3 Internal analysis 13

2.3.1 Introduction on ABBANK 13

2.3.2 Local debit card project 16

2.4 SWOT Analysis 18

2.5 Products Offered 18 2.6 Keys to Success 18

2.7 Critical Issues 18

3 Marketing Strategy 18

3.1 Mission 18

3.2 Target customers 18

3.3 Marketing Mix 19

4 Controls 24

5 Finance 25

Appendix A 29

Appendix B 33

Abreviation

ABBANK: An Binh Bank

EVN: Vietnam Electricity

BanknetVN: National Financial Switching Company

Smartlink: Card service joint stock company

VCB: Vietcombank – Bank for foreign trade of Vietnam

EAB: East Asia Bank

ICB: Incombank – Industrial and Commercial Bank of Vietnam

BIDV: Bank for Investment and Development of Vietnam

Eximbank: Vietnam Export Import Bank

Techcombank: Technology commercial Bank

Visa: Visa International

MasterCard: MasterCard International

ATM: Automatic Teller Machine

POS: Point of Sale

1. Executive Summary

In the general trend of the market, competition, international economic integration, most Vietnam commercial banks has step by step adjusted their business operation strategies in the direction of diversifying and expanding their business and products, new bank services, especially for the CARD service. This service has born, aiming to attract and maintain target-customers (individuals and enterprises) to increase income for bank fee service, bring to full strength of bank services, improve competition capacity as well as prestige of the bank in the market.
According to assessment of experts on the field of payment card, the card market of Vietnam is quite new and potential. Moreover, it is foreseen an active and strong development in recent 1-2 years and it will continue big development in the coming years.
In line with general trend of the market, the joint-stock commercial Bank of An Binh (ABBANK) – one of the biggest the joint-stock commercial Banks in Vietnam, has started to join the card market to improve its complete services and bring the most convenient and benefit bank services to its own customers – individuals and enterprises.
However, it is quite challenging for ABBANK to introduce its new product to the competitive market and compete with other experiencing Banks such as Vietcombank, Incombank, East-Asian bank... It requires a good network of distribution as well as marketing for the ABBANK in issuing the fist card service products.

2.0 Situational Analysis

2.1 Market Summary

The activity of bank card issuance in Vietnam was born with the objectives of long term-development of card services of Vietnam commercial banks, that aims to improve competition of banks in the market of provision financial services of the banks. The pioneer in the field of bank card issuance is the Vietcombank (VCB)– the first commercial bank in Vietnam has issued the pilot Vietcombank card (one of the smart card) that maily to be used for the purpose of cash withdrawal in 1994.
In 1996, the followers of VCB is other commercial banks like ACB, Eximbank which has become formal members of 2 international card organizations of Visa and MasterCard. These banks started issuing the local and international card services and calling recognition of people to the use of bank card services in Vietnam, and later on it is stimulating the habit of using card for Vietnamese people and proceeding this market delopmed in Vietnam.
Up to now, there are 27 banks issuing the loal bank card services with the participation of diversified elements like state-own commercial banks, joint-stock commercial banks and foreign banks; in which there are 6 banks issuing inernational card (VCB, ACB, ICB, Eximbank, ANZ and Techcombank). In fact, it is showing that the activity of bank card issuance in recent years has improved considrable achievements, however, it is quite challening as well. - Achievements: • A quick increase of card quantity:
In recent years, with clear evidence of booming bank card services market in Vietnam and a big leap has been made since 2002, by the fund of World Bank for the project of bank modernization process to bring in operation of core-banking system in all commercial banks, start issuing local debit card/ATM and automatic transaction system ATM. Within the year 2002, there were 25 thousands new issued cards, it is nearly double compared to number of card issued for the period of 1996-2001.
From 2002 up to now, the number of cards issued has been developed in geometric progression. In 3 consecutive year of 2002-2205, the average growth rate of card issued reaches 300%. Due to the character of local card is suitable to most of Vietnamese, therefore, the operation of local card issuance has been developed very well during past time. According to the reports of Vietnam Card Association, up to end of June 2007, number of card issued by all banks has reached 4.8 millions, increasing 3 times compared to the year 2005 (1.5 million cards). VCB still keeps the top position in this business, next is East Asian bank, followers by ICB, AgriBank, BIDV (see Diagram 2.1 and 2.2). [pic] Source: Vietnam Card Association 10years development report

1 Diagram 2.2 Market share of local card by banks in Vietnam up to 6/2007

[pic] Source: Vietnam Card Association 10years development report Especially, by the end of 2005, the international Visa Debit card has been issued and launched to the local market by 5 banks of VCB, Eximbank, Sacombank, Techcombank, and ANZ. This is an international bank card obtaining appropriate multi-functions and simple issuance procedures to Vietnamese people. Therefore, it is promising a positive response and acceptance by all levels of Vietnamese and bringing a big profit for all banks involved in the market.

- Some constraints: • Lack of synchronism on technical issues:
For the bank card products, there is no synchronic technical system from national and grassroots levels as well as for the soft- and hardware between banks. With the above mentioned of non-synchronism of technical issues and the differences of applied standards that causes the difficulties in card alliance of banks all over the country. This is also causing the partition and dividing into fractions of the networking, therefore, the customers have many difficulties in executing their payments timely and conveniently. • Low competition capacity:
The competition capacity of card services in the market is very low and under-potential development. Competition by brand-name and by quality of services has not yet been popular. Some bank card services, instead of developing new products or value added to the products, they are only focusing on the price-factor for their competition strategy. This makes customers can not be aware of differences between products of different banks, therefore, they easily give up product of this bank and use other bank’s one. • Lack of professionalism in ad. services:
All information on new card product services, advantage features of using card... is only advertised by different banks severally, partially but not systematically and synchronically. Therefore, it is impossible to avoid unclear or misunderstanding of customers to advantages as well as risks related to card services. Most people get to know that the unique advantage of the ATM card service is for cash withdrawal and the international card is for the ones who can use it abroad. – Reasons: • Insufficiency between high-technology and human resources:
Most commercial banks of Vietnam has operated card service products in conditions of in-experienced staff, incomplete process and limited capacity to manage the technology presently, these have led to low quality of card services.

• Lack of unified management and operation mechanism:
In the process of card services development in Vietnam, there is lack of an unified management and operation mechanism from the top level; there is no leading organization which can mobilizes and gathers operating banks together. Meanwhile, all the banks are not of the same mind. Moreover, in the regulations on bank card provision issued by State Bank, there is not any items stimulated responsibility on quality of services of the banks. In fact, the regulations only mentions the role of State Bank on issuing initial permit, all issues arisen afterwards are not taken into account and paid attention properly. • Lack of close cooperation between banks on activity of card issuance:
There are 4 card-alliances born, however, these alliances are unprompted and operated for benefits of separate group only. This has not yet formulated a close cooperation between banks to create a payment centre network to associate all banks together.

2.1.1 Market Needs

The following are results from a market research survey conducted on the bank card preferences of consumers in Vietnam related cardholder behavior.

Reason for Holding Existing Card
Why do you have your current card? (% of respondents)
[pic]

Card Preferences and Attitudes
Do you agree with the following statements? (% of respondents)

[pic]

Key Requirements for Next Card
What do you want your next card to provide? (% of respondents)

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2.1.2 Market Trends

• The constant development and diversifications of card products :
Most commercial banks of Vietnam has incessantly diversified their international card products, launching high quality of local debit card based on advanced technology, exploiting and expanding their customers to all classes of people all over the country. VCB presently holds the top position on number of card issued and variety of card service products in the market. ACB – the bank has strengths of international credit and local credit products. ICB has been exerting itself a lot in improving service products. And finally, East Asia Bank is appearing as a vanguard bank in providing new user-friendly functions of ATM as well… • Constant improvement of convenience of card services:
Beside cash withdrawal function, all banks has been constantly improving other functions of the card in order to serve the best services to customers such as: bank transfer, goods purchase, mobile fee payment, savings service, investment services, payment for electricity and water use fee, periodical fee payment…Most commercial banks of Vietnam conduct regular promotion policies, advertisement, no charge fee of issuance card, presents and discounts... • Increasing number of customers using card:
Target-customer of the local card service is quite diversified and plentiful, including all classes of people all over the country. For the target-customer of the international cards, it has been increased and expanded from the traditional customers of study abroad students to new and potential target-customers of staff on business trip abroad, staff of representative offices, joint-venture companies, tourists, high-income people who has demands of shopping abroad...

2.1.3 Market Growth

From 1993, Vietcombank issued the first card, after that Incombank, ACB and other banks was issued, up to now, the market has: 27 banks was issued local card; 2.200 ATMs and 14.000 merchants. The average growth rate of card issued reaches 300%.

The Market growth of bank card product from 1996 to 2007

|Year |Number of issued cards |
| |(unit: card) |
|1996 |360 |
|1997 |460 |
|1998 |4.500 |
|1999 |2.500 |
|2000 |5.000 |
|2001 |15.000 |
|2002 |40.000 |
|2003 |230.000 |
|2004 |560.000 |
|2005 |1.250.000 |
|M6/2006 |3.500.000 |
|M6/2007 |4.800.000 |

Source: Vietnam Card Association 10years development report
Due to the condition is simple, easy to use, suitable in Vietnam market, the issuing local card activity was fast growth. The first function of ATM is cash withdraw from VND account, fund transfer, balance inquiry, now, the local card can withdraw from USD account, purchase good and service at the merchants, payment the water bill, electric bill, insurance bill, deposit money to ATM, purchase prepaid code of Vinaphone, mobile phone, S-phone, HT Mobile…
The ATM system of the bank is also increase very fast. Such as: Incombank, BIDV, VBARD: in the first period, each bank had only 25-30 ATMs, now Incombank has more than 400 ATMs, BIDV has more than 400 ATMs and VBARD has 202 ATMs; Vietcombank and the member have more than 800 ATMs, EAB and members have more than 400 ATMs.
The development of ATM system is the reason to effect to the development of cards. This is also the reason of the card is familiar with the population. In the next year, with the Instruction No.20 of Government, the card market will be developed more.

2.2 Competition Analysis

In Vietnam, until now, there are 27 banks to issue the local debit card:

- Vietcombank: Connect 24

- Incombank: E-partner

- EAB: EAB card (multil function card)

- Techcombank: Fast Access

- BIDV, VBARD, Eximbank, Sacombank, ACB, Saigonbank,

- Habubank, Oceanbank, Mulitary bank....

The biggest competitor is Vietcombank, Incombank and EAB. These banks have long experiences, large networks and diversified services for card products. Incombank (ICB), it has more than 1 millions cash withdrawal station and 500,000 ATM; 9,000 bank agents in Vietnam and 25 millions agents that accepts ICB card all over the world. VietcomBank (VCB), it has a large network of good system of ATM all over the country of 800,000 ones. Moreover, VCB’s ATM system is operating 24/24 hours a day.
These competitors have the following strengths:

- Large merchant to accept card.

- Diversified product services

- Large networks all over the country

- Experiencing in providing products to customers

However, they also have some of the following weaknesses:

- Not high quality of services

- Large network of card acceptance also causes difficulties and less quality in training partners as well as services of customer’s care.

We will find quality of card services that a number of competitors can provide and what they have not yet met the demands of customers in the Appendix A. This is considered as an opportunity for ABBANK to know what can be further developed the strengths of the competitors as well as improving weaknesses to address the demand of customers

2.3 Internal Analysis

2.3.1 Introduction on ABBANK

An Binh Joint-Stock Bank (ABBANK), one of the leading joint-stock banks of Vietnam and one of the ten banks with the largest registered capital of Vietnam, after 13 years of growth and development since establishment in 1993, ABBANK has made great advances in its business performances and results in the last 3 years, marked by significant milestones such as: Electricity of Vietnam Group (EVN) became a strategic shareholder of ABBANK with 30% of shareholdings in 2006; ABBANK and An Binh Securities (ABS) has successfully issued VND 2000 billion bond for EVN in 2006; EVN bond issued by ABBANK has been selected by Asia Money 1.2007 as the best local currency bond of Asia in 2006.
Currently ABBANK has a network of 40 branches and transactional offices in 9 provinces of Vietnam, serving 5,000 business clients and 50,000 individual customers. Target business clients of ABBANK consist of companies and enterprises belonged to EVN and EVN Telecom, small and medium enterprises (SME) in export and import industries. For the individual customers, ABBANK focuses on EVN and EVN Telecom employees, electricity consumers, and other customers who have needs for debit and credit card products, account salary payments, installment loans for car, house and consumption.
To attract and maintain customer, ABBANK commits to create its unique service differentiation comparing to other banks by delivering best service quality to its target customers by frequently listening to customer opinions and feedbacks, applying most up-to-date IT infrastructure and solutions, professionally recruiting and training our staffs and developing joint marketing programs and products with our strategic partners.
In 2007, ABBANK business objectives include: increasing the number of our branches and transactional offices to 50 by the end of the year, achieving growth of 250-300% in fund mobilization, loan provision and total revenue with a strong increase from fee-based services.

Organizational Structure of ABBANK

Management Structre of ABBANK

Business Operations result, treasury and credit activity

* Summarize the result of business activities from 2004 to 2006

Unit: billion VNĐ

Source: Notification of ABBANK 2007

Unit: Billion VNĐ

Source: Notification of ABBANK 2007
Structure of capital mobilization

(Source: Audit Report 2006)

2.3.2 ABBANK local debit card project

This product of ABBANK local debit card was born when EVN has become a strategic shareholder of ABBANK. The objective of ABBANK is to provide suitable products and services that address demands of EVN staff and customers. In which, card product that can function of payment transaction for electricity use and/or telecom cost for customers of EVN, is one of the first priority of ABBANK in this project.
At the beginning period, our goal is to approach and maintain customer-group of EVN. The product that we plan to provide to this customer-group is Local debit card which has all advantage features of bank card as other banks provided. Specially, our card obtains function of payment for electricity, water use and/or telecom cost of EVN for customers. In future, we will develop this card to be the international debit card that it can be used by all customers for more services in all over the world.

2.4 SWOT Analysis

|Strengths |Weaknesses |
|ABBANK invested the model of high technology for both Corebanking and Card |Beginning to joint card market, lack of experience. |
|System Management. |Limited networks (only in big cities) |
|Possessing experienced Management Team that used to work for most big banks |Limited capacity to expand for the time being |
|in the country. | |
|The biggest shareholder is EVN. | |
|Being shareholder of Card Service Company (Smartlink) and a member of | |
|National finance switching company (BanknetVN), therefore, it has big | |
|advantage of using large networks. | |
| Opportunities |Threats |
|New decision by Vietnamese Government on salary payment for civil servants |Strong competition from the big bank (Vietcombank, |
|through bank account by January 2008 |Incombank) |
|Large/Potential demand and market on the product |ABBANK has low card market share. |
|Demand on bank services as well as card service is increasing day by day. | |
|Life quality is improving, people has trends to use professional services: | |
|insurance, financial services, payment by cards... | |

2.5 Products Offered

The product is local debit card namely YOUcard.

The functions of this card:

- On ATM:

Cash withdraw

Fund transfer

Inquiry

Print mini statement

Change PIN

Buying prepaid code (Vina phone, Mobile phone, HT Mobile, Vietel, EVN Telecom)

Bill payment (Electric billing, EVN Telephone billing)

- On POS:

Cash withdraw

Inquiry

Print mini statement

Change PIN

Sale good and service

Buying prepaid code

Bill payment

Feature function:

Bill payment via SMS

2.6 Keys to Success

The keys to success of YOUcard is the good service and the function of this card on POS, especially bill payment function.

2.7 Critical Issues

The critical issues for ABBANK are how to raise awareness of EVN staff and customers on the convenience of this product and how to promote it effectively to target-customer during this period. High awareness of customers on the product is the key for success of our business. In order to achieve that, ABBANK plans to conduct extensive promotion and marketing activities on all public media that bring fast and clear information about product to our customers.

3.0 Marketing Strategy

3.1 Mission

[pic]

3.2 Target customers

Presently, most households all over the country are customers of EVN. EVN electricity has more than 8 million customers and EVN telecom has more than 2 millions customers. For the time being, collection of electricity and telecom fees is done by EVN staff and it takes a lot of overtime (collecting outside working hours and going to each door) and high risk because the staff has to collect. Therefore, ABBANK has cooperated with EVN in developing payment services to attract most EVN customers to pay their electricity and telecom fees through bank card services.
If these services go into implementation, it will bring benefits for EVN customers more convenience of avoiding late payment and cut off services if they are not in the town for a certain or other reasons.
Therefore, objective of ABBANK is to provide these services to all EVN staff and EVN customers. The product is designed for not only payment of electricity and telecom fees, but also ensuring other normal features of a bank card. Thus, this product can also be developed to attract other customers in future as well. Moreover, ABBANK is planning to develop this local debit card into international debit card (Visa debit/MasterCard debit) to complete our card services and reach more groups of customers in future.
Objective of ABBANK is how to provide suitable and convenient bank card services to following target customer: – EVN staff – EVN customer in big cities especially who work and live in the building (who can easily to access ABBANK services) – EVN customers, who are civil servants

3.3 Marketing Mix

3.3.1 Product

The YOUcard, beside normal features of a bank card as other banks’: cash withdrawal, fund transfer, statement report, purchase goods... it can be used to buy advance-payment-mobile card of Vinaphone, Mobile phone, Vietel... and payment for electricity and telecom fees of EVN.

In future:

- YOUcard will be able to do payment for telecom fee of Vinaphone, Mobile phone, S-phone…

- Payment, SMS for checking bank account information

- Purchase goods/services through Internet

- To be developed into international debit card .

Moreover, owner of YOUcard possesses some of following benefits:

- Member of EVN Telecom Club

- To be accumulated award-points for presents in promotion programme.

- Benefiting from other marketing programmer of the bank.

3.3.2 Pricing

The price will be the same as other bank. This is the standard price for the issuing and services.

Price policy:

- Discount 50% joining fee for customers who has salary via card and registered auto debit for bill payment.

- Discount 50% joining fee in the first 3 month.

THE FEE TABLE FOR YOUCARD DEBIT

|Seq |Item |Fee |
|1 |Joining fee (normal issue) |100.000 |
|2 |Joining fee (fast issue) |200.000 |
|3 |Replacement fee (normal issue) |80.000 |
|4 |Replacement fee (fast issue) |160.000 |
|5 |Reissue PIN |20.000 |
|6 |Monthly maintenance card fee |5.000 per month |
|7 |Cash withdrawal/advance fee |Free |
|8 |Print mini statement fee |Free |
|9 |Fund transfer fee |Free |
|10 |Bill payment |2.000/ transaction |

Unit: Vietnam Dong (VND)

3.3.3 Promotion

3.3.3.1. Advertising:
Media:
• Advertising is on VTV, HCM TV and Da Nang TV after evening news and on sport channel. • Internet advertising: advertisement is maintained one per month in selected newspapers and magazines such as The Bank Times, The Economic times. Logo and website address will be first appeared on Vnexpress.net and Vietnamnet.vn Advertising on website vneconomy.com; evn.com.vn;

3.3.3.2 Public relations:
The launching activity will be reported in leading newspaper and magazines such as the Labours, The Bank Times, The Economic times….

3.3.3.3 Sales promotion:
In the first 3 months: discount 50% issuing fee for the cardholder.
A good service and added value should be designed to new customers. Also co-operate with EVN Telecom to issue the promotion card for EVN telecom customers and lucky draw program for card usage.

3.3.3.4 Personal selling:
The business department will be in charge of this activity. Regular meeting with target customer and to be present the function, benefit of product. The Sale Manager will set a goal of sale turnover for all the business staff.
Especially, ABBANK has the partner is EVN, therefore, the business department can co-operate with the EVN business department for sale.
The ABBANK card center business department will be hold the training to the EVN business staff at least 01 month to know how ABBANK’s product information, sales process and relationship skills.
Weekly, the business department is organized to discuss about the sale turnover, the difficult in the sale activity and plan for next week.

3.3.3.5 Direct Mail
The card centre marketing division will co-operate with the personal client center to get the list of ABBANK customer address and email.
Promotion will be sent to customer for consideration by email, letter or fax. The information about the service and product is required to get a feedback from customer.

3.3.4. Place (Distribution)
The product will be distributed through our branch in 16 cities and provinces (Appendix B: ABBANK branches listing).
There are 3 main distribution channels: – Main channel: through ABBANK branches in cities, provinces (40% sale volume will be collected via this channels) – Second one: outsourcing by agents of the bank. We have 1 partner for issuing agent card. It has more than 40 clients and 20 sale staff for sale. ((40% sale volume will be collected via this channels) – Third one: sale by EVN staff. (20% sale volume will be collected via this channels in the first year and will be increased in the next year when the EVN staff clear about benefit of our product)
The accepted channels: ABBANK will be connected with the BanknetVN (members are: Incombank, BIDV, Agribank, ACB…) and Smartlink (Vietcombank and 17 members) and Paynet (one of the service provider) therefore, the YOUcard will be accepted on:
- More than 2,000 ATMs
- More than 14,000 merchants

4.0 Controls

Card Centre Organization

[pic]

5.0 Finance

5.1 Sales Forecast

Table 1: Sale Forecast ($ - in thousand VND)
|No |Debit Card Budgeting | |Yr 2007 |Month1 |Month2 |
|No |
|BANK'S NAME |VIETCOMBANK |

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Chanel development

Business support

Risk management

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PROJECT TEAM:
Nguyen Thi Ngọc Anh – Tran Thi Thu Hien – Nguyen Thi Phuong Thao

Acquiring Business

Issuing business

Administrator

Personalization card

Customer service

Accounting

PR

Fraud management

Policy

Research and Develop product

Marketing

Branch

Risk management

Business Development

Operator

Maketing & Product management

HCM Card centre

Crad Centre

Boad of Director

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[pic]

[pic]

Business Development Department

Centre for Payment & Currency Management

CARD CENTRE

Network Development in the North

Legislation
Department

Department for Communication & Sponsor

Brand name Department

Product & Market Research Department

Department for Human Resources Preservation

Training Department

Recruitment Department

Policy Department

Marketing Dept.

Department for Mobilization & Financial Services

Department for Credit & Social collateral

Business support Department

Data Information
Depart.

EVN customer Department

Risk Manage-ment
Department

Human Resource management

Individual customer Department

Deputy General Director

Deputy General Director

Network development Department

Administration
Department

Finance & Accounting Department

Interanal supervision Department

Policy & Product Department

Centre for international Payment

TREASURY

IT CENTRE

Finance Investment

Deputy General Director

Deputy General Director

Deputy General Director

General Director