Measuring the capacity of Mellat Bank to provide services (guarantee, LC,...) with an emphasis on profitability and providing a suitable capacity management model in Semnan province

Dissertation for Master's Degree in Industrial Management

Production Orientation

Abstract

Major changes and transformations in the banking system of Iran have faced Bank Mellat with new challenges: the change of public to private structure, the increase of competitors and their intense competition to obtain more market share, the expensive and costly four bank deposits, etc., this bank towards increasing non-recurring income. (Gaining income from fees) has led so that providing all current expenses of the bank from non-shared income or fees has become one of the main goals of Bank Mellat. In this research, the researcher has collected the information he needs by interviewing experts and scientific and library studies. In the first part of the research, the SWOT planning model was used to determine the non-shared income capacity of Bank Mellat. This is because in the evaluation model of internal factors (IFE) and external factors (EFE), Bank Mellat has scored 2.25 and 1.75, respectively. Therefore, this bank has not been successful in using its appropriate capacity in the field of providing services and non-shared revenues. In the fifth chapter of the thesis, several strategies SO, ST, WO and WT are proposed along with two combined strategies to improve the non-shared services capacity of Bank Mellat. According to the results of the evaluation of internal and external factors obtained by the bank Mellat, the defensive strategy (WT) is chosen as the main strategy of the bank, and about 12 main factors for the defensive strategy are proposed by the researcher. Further, with the help of the AHP decision model, the researcher tries to determine the priority and importance coefficient of each of these factors of the defensive strategy.

Key words: capacity measurement, non-shared income, guarantee, fee, SWOT planning technique, AHP decision model

Chapters Dissertation

Chapter one: introduction and generalities

2-Chapter two: literature review and research questions

3-Chapter three: methods and tools

4-Chapter four: analysis

5- Chapter five: conclusion and presentation Strategy

Chapter 1

Introduction and Generalities

1-1- Introduction

The fundamental changes in today's world have disrupted the past paradigms in all fields. changes in the life cycle of products; The increase in the level of awareness of etymologists due to the changes in the education and training systems, the growth of innovations and innovations have all led to the fact that the past paradigms cannot meet the needs of today's world (Keighbadi, p. 2). Today's world is full of unlimited demands and limited human resources. In this situation, all organizations try to act in such a way as to realize the maximum of their power and potential. In such a situation, capacity measurement and planning for production capacity and services in order to use their effective power seems to be a very tangible and vital thing for all organizations. Especially since organizations in this era need to have a competitive advantage in order to outdo their competitors and earn more profit. Qaida is not an exception and it has been a long time since it has taken this path. Therefore, there is a need to measure the capacity of providing banking services in order to determine; Each branch according to the available resources, the number and type of customers, the use of human resources and according to the state of the society and its competitors. To what extent can it sell bank guarantees, open letters of credit (LC), receive all kinds of fees? and so on.  Relying on its history and valuable experiences of several years, this bank has made it its agenda to create competitive advantages in the non-common services market of the country's banking system, and along with the important developments in the banking world, it has taken steps to design and implement the relevant systems with the aim of providing its current expenses from the commissions.

In this research, the researcher has tried to: in the first step;

Using the SWOT planning technique [1] to state whether Bank Mellat has been able to use all its capacity to earn more non-shared income (types of fees)? Or that there is unused capacity? And if it has not managed to use its appropriate service capacity, what strategies and solutions should be followed?

And in the second stage; After stating the types of strategies proposed by the researcher and choosing a defensive strategy for Bank Mellat, with the help of the Analytical Hierarchy Process (AHP) decision-making model, the priority and importance of the factors of this strategy are determined, and finally the researcher achieves a suitable model of capacity management in Bank Mellat. Bank

means all incomes that are the result of the main activity of the bank. Such as the income from providing facilities to customers. B- Non-common or non-operating incomes It means earning income from other methods that are not the result of the bank's main activity and this income is not obtained from providing facilities to customers. Such as the types of fees resulting from the issuance of bank guarantees and the opening of letters of credit (LC) etc. The implementation of Article 44 of the Constitution and the privatization of Bank Mellat has left many changes and effects on this bank, which will be addressed in the next research. Also, studies have been done on the operational plan codified in this bank, and during the research, this operational plan and its basic challenges will be addressed.

Since the researcher of this research is an employee of Bank Mellat and is familiar with the needs and conditions of this bank, the purpose of choosing this research is; He knows how to try to solve even a small problem of Bank Mellat. And he tries to use the knowledge of his graduate education in a field in which he has been working for several years. We also know that the employees of Mellat Bank are shareholders of this bank and the profits from the dividends of this bank go directly to their pockets. And this doubles the effort to improve Bank Mellat in the eyes of the researcher.

1-2- Statement of the problem

Nowadays, organizations not only have to adapt themselves to changes and new conditions, but also have to use the changes to their advantage and be the leaders in the industry by making newer changes in the business environment and use it as a competitive advantage (Keigbadi, p. 8). This is evident in Bank Mellat with its new slogan "Let's feel the change". The main problem in Bank Mellat started with the issue of structural change (public to private) and continues with drastic changes in all areas, including the provision of current expenses from non-shared revenues.

Also, with the entry into the 21st century, many concepts and definitions in successful and forward-looking organizations have found a newer and different concept. Taking into account that our resources are limited, but our demands are unlimited. Surplus capacity and unused capacity. Both are contrary to the progress of today's organizations. This article requires the use of a comprehensive system of capacity measurement in 21st century organizations.

Many researches and scientific articles have been written about the provision of banking services and fees. However, these topics are raised in a new and innovative way in this research. The researcher's meaning of bank fee is not its jurisprudential meaning, i.e. the earning of income from Islamic contracts or its concept of usury. And the researcher's intention of providing banking services is not to provide all banking services, but the researcher intends to measure the capacity of providing services that bring non-recurring income to the bank. Such as services in the field of issuing guarantees and LCs.

To better understand this issue, we explain the above concepts:

The income that the bank receives from customers for providing facilities (at any rate and under any contract) is a common and operational income. This income is the same income that is called a fee in Islamic banking and bank interest in usurious banking. However, the meaning of the researcher is not this type of income or this type of fee, but the income from issuing guarantees, LC, and generally the income from providing services to customers (other than providing facilities) is called non-operating or non-common income. Such as the income from issuing invoices for customers or the income from paying checks in a branch other than the branch that opened the account, etc. The purpose of the researcher in this article is the second type of income. In this article, non-shared income and fees are both used in the same meaning, and whenever non-shared income is mentioned, it means to earn income for the bank from receiving various types of fees.

In the difficult conditions of banking in Iran and the decrease in profitability of banks, including Bank Mellat, as in the past, collecting people's monetary resources and granting them facilities for profit-making is no longer very effective, and banks are obliged to implement new profit-making strategies. Earning income from non-shared income or receiving various types of fees is one of the most important solutions for this issue