ABBANK Enhancing Governance and Competitiveness

“There are still opportunities for breakthrough development in tough times. ABBANK has managed to perfect a new organisational structure to match the pattern of a modern financial institution and enhance market competitiveness. Besides, during the 20 years of construction and development, ABBANK has always had great advantages because it has constant support and accompanying of shareholders and partners, which are large domestic and foreign firms,” said Mr Vu Van Tien, President of the Board of Directors of An Binh Commercial Joint Stock Bank (ABBANK) in an interview with Vietnam Business Forum at the bank’s 20th founding anniversary. Quynh Chi reports.

Could you talk major advantages and difficulties ABBank has faced in the past time, especially in the present time when many banks are faced with bad debt and liquidity strains?

The year 2013 marks many important milestones for ABBANK, with the very important one being the 20th founding anniversary. Like any other banks, ABBANK has also met with many challenges and opportunities in the course of development. We are placed under a plenty of pressures arising from the country’s economic restructuring process, banking system restructuring, bad debts, credit growth, liquidity, many economic policies, fiscal and monetary policies, as well as many other matters like stiff competition in capital mobilisation and lending, credit quality control, prudent lending for property and securities business.

However, there are still opportunities for breakthrough development in the tough time. ABBANK has managed to perfect a new organisational structure to match the pattern of a modern financial institution and enhance market competitiveness. Besides, during the 20 years of construction and development, ABBANK has always had great advantages because it has constant support and accompanying of shareholders and partners which are large domestic and foreign firms like the Electricity of Vietnam (EVN), Hanoi General Import & Export Corporation (Geleximco), Maybank of Malaysia, and International Financial Corporation (IFC).

It is not natural when ABBANK received huge funding, investment and cooperation from Maybank and IFC in 2008 and 2013 when the national economy confronted enormous difficulties. The stake holding of foreign investors shows ABBANK’s financial stability, strong internal forces, safety requirement compliance, ability to meet system improvement requirements from investors, ability to perceive consultations and strategic cooperation programmes suggested by foreign investors. This also confirms the fact that ABBANK is trusted by foreign banks and they cooperate with ABBANK because of good strategy, far-sighted vision, safe investment and sustainability. These strengths help us be confident to grasp development opportunities in the future.

ABBANK was established on May 13, 1993 with the original name of An Binh Rural Commercial Joint Stock Bank with the initial registered capital of VND1 billion and one transaction point in Ho Chi Minh City. After 20 years, ABBANK had VND4,800 billion of share capital, 144 transaction points in 29 provinces and cities throughout the country, over 2,760 employees, and VND47,780 billion of total assets.

Each development step of ABBANK was marked by important events. In 2005, ABBANK was transformed from a rural lender to an urban lender with the participation of the Electricity of Vietnam (EVN), and Hanoi General Import & Export Corporation (Geleximco). In 2008, Maybank, Malaysia's largest bank, became a strategic shareholder of ABBANK. And, in 2013, IFC officially became a major shareholder of ABBANK. Currently, Maybank holds 20 percent of stake and IFC keeps 10 percent. The participation of domestic and foreign majority shareholders proves the potentiality of the bank and the trust of big businesses the bank and enhances the reputation, capacity and position of ABBANK on the market.

IFC has officially become a principal shareholder at ABBANK after bonds were converted into common stock shares in accordance with the tripartite agreement signed December 2010. With this conversion, IFC was a major shareholder at ABBANK with 10 percent of stake and Maybank continued to keep 20 percent. What does this move benefit ABBANK’s operations?

IFC has supported ABBANK to enhance banking governance capacity, product development, product development policies for small and medium enterprises (SMEs), and trade financing since 2009. After officially becoming a major shareholder, IFC has assigned its personnel to the ABBANK Board of Directors and continued to support ABBANK to improve banking governance towards international practices, banking service development for SMEs, and trade finance.

Maybank’s cooperation with ABBANK is a long-term investment commitment. Maybank specialists have arrived in Vietnam, taking seats in the Board of Directors, the Risk Management Board, and Personnel Committee of ABBANK. Such operations as trade finance, foreign exchange trading are effectively carried out with the participation of Maybank. In 2013, Maybank continues to send experts to support ABBANK to manage and improve risk management systems and internal audit systems.

The participation of two major financial institutions in the world will add more resources and experience for ABBANK to achieve sustainable development objectives and grasp opportunities to make breakthrough development.

What development plans will ABBANK take to realise its ambition of being a top 10 commercial joint stock bank in Vietnam?

Sticking to development sustainability, ABBANK will continue to complete system restructuring, stabilising and operating the new mechanism, and making preparations for long-term development towards 2020 in a bid to become a Top 10 commercial joint stock bank in Vietnam.

The banking system in particular and the economy in general are forecast to continue facing difficulties in 2013. The ABBANK’s Board of Directors determines to improve governance, enhance competitiveness, ensure efficient and safe business operations, and comply with State Bank’s regulations and international practices in 2013. We will carry out strategic decisions to strengthen our system, develop human resources, and manage credit and risks. Besides, ABBANK will further enhance monitoring capacity and ensure system stability and operational transparency.