In the context of unfavourable macro economy and banking system, Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) has presented its best effort as one of the leading commercial banks, contributing to the implementation of the policy of the State Bank of Vietnam (SBV) and to the macro economy stabilisation. With management perspectives of “Acute-Flexible-Drastic”, the Board of Directors and the Board of Management have closely monitored changes in the business environment and directed Vietcombank’s operations accordingly, in order to achieve the business targets.
Last year, Vietcombank continued to improve its business operation and corporate governance. In line with boosting the credit growth, the bank has focused on monitoring credit quality, resolving and recovering bad debts. Other services and FX trading activities experienced remarkable growth. By year-end 2013, most business targets have either been met or exceeded.
Vietcombank has achieved remarkable results in business performance, given the challenging economic environment in Vietnam particularly and worldwide in general. Some highlights in business performance in 2013 are as follows:
- 1st in the import and export turnover whichincreased by 7.2 percent compared with that of 2012 and accounting for 15.80 percent of the market share.
- 1st in the card services which accounts for 44 percent market share and the largest ATM network nation-wide and 42,283 POS (33 percent of the total POS nation-wide).
- 1st in FX trading with total FX dealing volume rose by 7.1 percent against 2012, overall profit from this operation was approximately US$68 billion.
- 2nd in profitability with consolidated profit before tax was VND5,743 billion.
- 2nd by total shareholder’s equity: US$2,015 billion.
- 3th in lending services: credit outstanding was VND274.3 trillion, increased 13.74 percent, significantly higher than the banking sector’s average credit growth and above the target.
- 3th in total assets: VND469 trillion exceeding the target growth of 9 percent.
- 3th in fund mobilization: Deposits from the economy reached VND340.3 trillion, up 11.98 percent from 2012. Deposit growth has been monitored in line with the credit growth, aiming at maximizing the capital use efficiency.
- ROAA and ROAE in 2013 were 0.99 percent and 10.38 percent respectively. CAR ratio was 13.37 percent, above the minimum requirement of 9 percent by the SBV.
Besides accomplished business performance, Vietcombank has also expanded its network expansion and enhanced management style as well as operational framework. In 2013, Vietcombank launched one branch and 21 transaction offices, contributing to the total of 80 branches and 333 transaction offices all over the country, 1 Head Office in Hanoi, 1 Operation Center, 5 subsidiaries, 1 representative office in Singapore and 5 JVs . In 2014, Vietcombank was approved to open more 15 branches and 26 transaction offices. Moreover, the Bank’s operations are supported by a network of more than 2,000 correspondent banks in 120 countries and territories.
The bank’s organizational structure has been remarkably improved toward standardization and centralization. Vietcombank made the adjustment to the functions of the departments; continued comprehensively reviewing and standardizing the organization of the internal audit and compliance, which resulted in the establishment of FDI, ALM departments in Head Office, the establishment of the Individual Banking, SME and Debt Management Divisions.
Together with internal regulatory, framework and policy system continued to be enhanced. A number of new regulations and policies have been issued and implemented.
Vietcombank is adapting its risk management scheme to meet the international standards, starting with the implementation of Basel II, Management Information System and KPI projects. Other large-scale IT projects, such as Trade Finance Centralization, CoreBanking replacement have also been in progress.
Vietcombank and Mizuho have been cooperating proactively on the strategic business alliance from 2012. Since then, a number of business agreements in FX trading, customer sharing, etc. have been made. Mizuho helped introduce Japanese corporates and individual customers and provide technical assistance, started the retail banking, trade finance and cash management services for the Japanese FDI customers, facilitating the business activities of Vietcombank and enhancing the cooperation between two sides, including exchanging the high-level management visits and training courses.
To manage and assess internal targets, Vietcombank has focused on six significant metrics, including:
Financial performance: Risk-based capital and a method to apply quantitative methods to build budget and planning is examined.
Operation efficiency: Time-driven method is used in order to reduce the servicing time for each individual customer without diminishing the quality of service; rearranging and differentiating functions of sale and management in order to utilize internal resources and enhance capability of sale.
Customer: Behavior model is tested on customers’ response to external shocks such as peers’ interest rate policies and promotions; macroeconomic shocks in order to determine the extent of customer loyalty.
Risk management: Data dictionary is created in order to apply advanced models to compute PD & LGD.
Workforce: KPI system is established to calculate and improve the efficiency of our staff.
Governance: Highest international standards are applied to our operations whenever applicable, given the conditions in Vietnam. With regards to corporate governance, the Bank is in the process of shifting from the traditional business model to a new one, where group operations such as retail banking and wholesale banking are managed by the Head Office being the centralized management point and branches serving as points of sales.
In the near future, Vietcombank hopes to become not only the best bank in Vietnam but also a regional bank satisfying international standards.
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