BREAKTHROUGH

THINKING
VALUE
ENHANCEMENT

2019 ANNUAL
REPORT
CONTENTS
06 Letter from Chairman
08 - 37 38 - 77 78 - 97 98 - 153 154 - 242
CREATE A JOURNEY BREAK THROUGH MINDSET BREAK OUT CHALLENGES SPREAD THE LOVE ENHANCE THE VALUE

10 Vision - Mission - Core values 40 Performance overview in 2019 80 Governance activities overview 100 Sustainable development report 156 Consolidated financial
BOARD OF EDITORS 12 General information 42 Business results in 2019 82 BOD report 2019 statements
Head 14 Network development 50 Performance of personal banking, 90 Board of Supervisors report 102 Sacombank’s sustainable 168 Notes to the consolidated
Ms. Nguyen Duc Thach Diem corporate banking, and credit development context financial statements
15 Network 94 Rights and obligations of
Member of BOD cum CEO divisions 104 Breakthrough thinking
16 Key milestones in 28-year history shareholders
52 Financial performance through strategic sustainable
Deputy Head 18 2019’s highlights 96 Shareholders structure
development vision and specific
Mr. Ha Van Trung 54 Performance of subsidiaries and 97 Corporate governance
22 Outstanding awards in 2019 actions
Deputy CEO cum subsidiary banks
24 Organizational structure 106 Opportunities and challenges
Director of Finance Division 56 Restructuring plan report
26 Board of Directors 108 Sustainable development in
58 Risk management performance
Members 28 Board of Supervisors governance
report
Mr. Do Duc Hung 30 Board of Management 110 Internal audit and internal
60 Getting ready for digital
Planning Manager control in connection with
34 CEO Nguyen Duc Thach Diem: transformation
Mr. Ho Viet Phuoc sustainable development
Manager of Risk Management The inspirer of Sacombank’s youth 64 Breakthrough thinking
114 Risk management towards
Department 66 Value enhancement sustainable development
Mr. Bui Anh Tu 72 Development orientation in 2020 116 Implementing Basel II to develop
Director of Financial Institution and vision for 2025 sustainably
Ms. Vu Thi Thuy Hang
Deputy Manager of Communication 73 SWOT analysis 118 Sustainable corporate culture
and Marketing 74 Business plan in 2020 119 Stakeholders
120 Major stakeholders
Secretary
Ms. Luu Thi Minh Ngoc 121 Key issues
Communications Specialist 122 Economic standards
128 Environmental standards
130 Social standards
140 Community activities in 2019
144 Sacombank youth
148 GRI standards compliance
 BREAKTHROUGH THINKING -
VALUE ENHANCEMENT

A
journey of a thousand miles begins with a single step (Lao Tzu)
– and such step becomes stronger with unshakable belief.

Sacombank has been making stable and constant footprint on

development journey. All.Ahead was embodied in ways Sacombank
featured, pro-active operations management and market trends to
seize business opportunities and expand competitive advantages in
2019. The solid results were achieved and the Restructuring agenda
was timely implemented.

Lotus – the symbol, represents Sacombank’s spirit and determination

possessed with Breakthrough thinking - Value enhancement.
•• Break through mindset to shape the present
•• Enhance the value to master the future

Sacombank always strive to gain the trust, belief, and satisfaction from
shareholders, partners, customers and gain employees‘ gratification.
On the journey, we will keep smiling and strive to become a
Happy Bank.

The Editors of Annual Report 2019.

 Dear Esteemed Shareholders, Investors, Customers and Partners,
For the last 28 years, Sacombank has positioned itself as one of top Vietnamese banks despite many
headwinds. After 3 years under the SBV-approved Restructuring Plan, Sacombank has basically consolidated
and is currently in the phase of accelerating and returning to the track.
Sacombank recovered nearly VND38,400 billion of the Restructuring Plan’s problem loans, with an average
recovery of nearly VND13,000 billion per year in the last 3 years. Thereby achieving healthy financials, decreasing
the proportion of problem assets to total assets to 13.8% from 29.3%, reducing non-performing loan ratio to
1.76% from 7.25% (as of 30 June 2017) and dropped the non-performing loan - including VAMC bonds - ratio to
11.23% from 21.38%.
The Bank also collected one-third of accrued interest, pro-actively booked VND6,200 billion of expenses for
collecting problem assets, exceeding 158.9% of the planned. Sacombank has invested significantly in advanced
banking technologies, upgraded core banking, implemented Basel II-related projects for operational safety
and sustainable development.
In 2019, Sacombank continued following the belief of “Customers are centric - human resources are core”
and delivering results, namely:
•• Opened four new branches in Northern region (Nam Dinh, Thai Binh, Lao Cai, Ninh Binh), expanding
the network to 570 transaction offices in 52 territories in Vietnam as well as Laos and Cambodia. The
number of customers increases significantly, to more than 6 million.
•• Collected VND18,400 billion of bad debts over target of VND15,000 billion, of which VND12,409 billion
was under the Plan. Additionally, Sacombank reserved allowances and allocated accrued interest of
nearly VND4,400 billion.
•• In preparation to meet Basel II standards and the requirements of Circular No. 13, 41 and 22 issued by
the SBV.
•• Deployed flexible and comprehensive business solutions. Achieved and exceeded key business targets:
the Bank’s consolidated profit in 2019 was VND3217 billion, exceeding 21.4% from the plan outlined
in the AGM; total assets was VND453,581 billion; deposits from corporates and individuals reached
VND410,334 billion; total loans was recorded at VND296,030 billion, NPL ratio decreased to 1.9%,
productivity improved and provisioning coverage ratio increased.
In 2020, Sacombank is going to execute the following key objectives:
•• Increase business efficiency, expand scale and market share and improve financial position.
•• Recover non-performing loans and closely monitor credit quality.
•• Accelerate the restructuring process, optimize value for shareholders, investors, customers and
partners.
•• Pioneer the utilization of advanced technology and security platforms.
•• Enhance customer experiences, engage in corporate community, economic sectors and customers.
•• Lean organizational structure, enhance personnel skills, and improve workplace environment.
On behalf of the Board of Directors, I would like to extend our appreciation to the Executive Board and more
Mr. Duong Cong Minh - Chairman than 19,000 employees who have been committing to Sacombank’s development. Particularly, I would like
to express my profound gratitude to the valuable shareholders, investors, customers and partners who have
been faithful and supportive of Sacombank. We pledge to trying our best and taking highest responsibilities
to complete Sacombank’s restructuring agenda.

LETTER FROM CHAIRMAN Wishing you good health, happiness and success.
Best regards.

6 7
SACOMBANK INTRODUCTION

Create
A JOURNEY
SACOMBANK INTRODUCTION

VISION, MISSION AND CORE VALUES

CORE VALUES

VISION Pioneering and paving towards success;

Leading bank in Vietnam’s retail banking service. Providing innovative approaches for sustainable
development;

Committing to quality assurance in customer service

MISSION and partner coordination;

Providing best-in-class comprehensive Making a difference via breakthrough innovations and

financial solutions for customers; advanced business governance;

Maximizing added-value to stakeholders; Committing to community and social responsibility.

Creating value and prosperity for

employees;

Contributing to the development of society

and community.

10 11
SACOMBANK INTRODUCTION

GENERAL INFORMATION

CHARTER CAPITAL

18,852 VND BILLION

GENERAL INFORMATION BANKING OPERATIONS

•• Vietnamese name: Established: 21 December 1991

Charter capital:
•• Funds Mobilization •• Express Money Transfer
Ngân hàng Thương mại Cổ phần Sài Gòn Thương Tín
VND18,852,157,160,000
•• English name: (as of 31 December 2019)
•• Credit Issuance •• Remittances
Saigon Thuong Tin Commercial Joint Stock Bank Listed on: 02 June 2006

•• Trade name: Sacombank SWIFT code: SGTTVNVX •• International Payment •• Foreign exchange

•• Certificate of Establishment and Operation No. 111/ Head Office: 266-268 Nam Ky Khoi Nghia •• Export and Import Financing •• Safe Deposit Box
GP-NHNN issued by the State Bank of Vietnam on 09 Street, Ward 8, District 3, HCMC
November 2018.
Tel: (+8428) 38 469 516
•• Certificate of Business Registration of Joint Stock •• Bank Account Services •• Factoring and Forfaiting
Enterprise: Hotline: 1900 5555 88
€€ Business Code: 0301103908 Email: [email protected] •• Card Services •• Insurance and investment solutions, forex trading

Registered on 03 January 1992, No. 059002 at Business

Website: www.sacombank.com.vn
€€

Registration Office, Department of Planning and •• E-Banking Services •• Other services authorized by the State Bank of Vietnam
Investment, HCMC.

€€ The 39th edition as of on 26 January 2018.

12 13
SACOMBANK INTRODUCTION

NETWORK DEVELOPMENT NETWORK

Branching to the Northern region was an opportunity for Sacombank to
effectively explore and develop new potentials.

OPENED 4 NEW BRANCHES

570
IN NORTHERN REGION LAOS

Relocated, renamed
and transferred
management rights TRANSACTION POINTS
Lao Cai Ninh Binh Nam Dinh Thai Binh
5 39 VIETNAM CAMBODIA LAOS

branches transaction offices 556 9 5

POINTS POINTS POINTS
THAILAND

4
Number of
Province/ Number of
Vietnam Total transaction
City branches
points
SUBSIDIARIES
1 Hanoi 1/1 61 12 49
2 North 14/25 42 14 28
3 North Central 8/8 47 9 38
South Central
4 9/9 52 11 41
& West Highlands
5 Southeast 6/6 59 11 48 CAMBODIA
6 East HCMC 87 15 72
1/1
7 West HCMC 95 15 80
8 Southwest 13/13 113 22 91
Number of domestic transaction points 52/63 556 109 447

Province/ Number of
Overseas Total Head Office
City branches Note
1 Cambodia 4/25 9 1 9 Operational Network
2 Laos 3/18 5 1 5 Money transfer units

Number of oversea transaction points - 14 - 14

TOTAL - 570
14 15
SACOMBANK INTRODUCTION

KEY MILESTONES IN 28-YEAR HISTORY

1991 1993 1996 1997 2002 2006

Sacombank was the first Sacombank opened the first Sacombank was the first bank Sacombank was the first bank Sacombank began diversifying Sacombank was the first
commercial joint stock bank to branch in Hanoi to issue public shares to open rural branches comprehensive financial Commercial Joint Stock Bank
establish in Ho Chi Minh City services and products of Vietnam to be listed on
and became the first Bank to at par value of VND200,000 per to provide the access to financial Ho Chi Minh City Stock Exchange
Following the merger of Go Vap provide express money transfer share to raise capital. funds for rural communities. This with the incorporation of
Economic Development Bank services between Hanoi and Ho Chi was an important foundation to Sacombank Asset Management with stock code of STB, and total
and 3 credit cooperatives i.e. Tan Minh City, reducing cash payment establish and develop business in Company (Sacombank-SBA). market capitalization on the listing
Binh, Lu Gia and Thanh Cong in the two biggest economic hubs. rural areas effectively afterwards. Followed was the incorporation date was VND1,900 billion.
with charter capital of VND3 of other companies specializing
billion and 100 employees. in the money transfer
(Sacombank-SBR) and financial
leasing (Sacombank-SBL) in
2006, and gemstones and jewelry
(Sacombank-SBJ) in 2008 to
meet the increasing demands of
customers.

2008 2015 2017 2018 2019

Sacombank launched Sacombank merged with Restructured after the merger Sacombank deployed many
operations in Laos Southern Bank
This was the first year
important projects such as
LOS, CRM, BASEL II…
ALL. AHEAD
In 2009, Sacombank opened made The bank one of the 5 Sacombank officially carried
branches in Cambodia, marking biggest commercial banks in out the approved Restructuring Sacombank continued to Sacombank consolidated and accelerated to
the completion of Indochina Vietnam in terms of total assets, Plan. Taken together, Sacombank enrich the existing value and
market expansion strategy. charter capital and operation completed developing and accelerated to catch the trends
develop comprehensively in order to grow market
network. applying corporate governance and seize the development share and reach most of the targets under the
model in conformity with a new opportunities.
development period. Restructuring Plan.

16 17
 SACOMBANK INTRODUCTION

2019’S HIGHLIGHTS

Upgraded T24 core banking system to Launched major projects: One of the first seven banks in Vietnam to issue domestic card
the most advanced version - R17. equipped with EMV chip.

BUSINESS PERFORMANCE
“Upgrading internal audit
INFORMATION TECHNOLOGY

framework” project
Cooperated with PwC to implement the
“Upgrading and completing of Asset “Upgrading valuation model Pioneer to deploy shared POS infrastructure in cooperation
Liability Management Framework and building the required with Alliex, contributing to cashless payment in Vietnam.

BASEL II
(ALM)” project. capital calculation model for
market risks” project

Customer Relationship Signed the Memorandum of Agreement on textile and apparel

Implemented the Loan Origination
Management (CRM) system cooperation and development with Vietnam Textile and Apparel
System (LOS).
Association.
“Credit risk modelling (CM)”
project

Obtained the latest 2019 version (3.2.1) “Completing risk data Opened four branches in Thai Binh, Ninh Binh, Nam Dinh,
PCI DSS security certificate governance framework” Lao Cai.
project

18 19
SACOMBANK INTRODUCTION

2019’S HIGHLIGHTS (continued)

Collaborated with Tuoi Tre Newspaper to organize the running program
“Cashless Day” in Hanoi and HCMC with the participation of over 4,500
runners, raised VND600 million for “Thuy’s Dream program”.
Launched the “Sacombank’s youth” program

Took part in nationwide the 7th “Red Journey” with the message
HUMAN RESOURCES

SOCIAL GIVING BACK

“Sacombank - Sharing from the Heart”.
Organized a series of seminars “Orient mindset - Change life” for
nearly 2,000 students from reputable Universities nationwide.
Awarded 3,559 “Sacombank - Nurturing dreams” scholarships for students
nationwide.
Organized series of “Inspire the Youth - Connect to Success”
program for Senior leaders with the message of team spirit,
inspiration and positive energy.
Organized “Race with Sacombank for public heath” programs in 39
provinces and cities countrywide with participation of over 28,000 runners.

Surveyed “Employee’s satisfaction Index” to understand thoughts

and aspirations of employees
Organized the 17th “Warm Spring” annual activities program with the theme
“Spread happiness - Share love” in 52 provinces and cities in Vietnam, Laos,
and Cambodia in January and February 2020.

20 21
SACOMBANK INTRODUCTION

OUTSTANDING AWARDS IN 2019

CORPORATE GOVERNANCE TOP 500 best profitable enterprises in

Vietnam in 2019
Recognized by Vietnam Report Joint Stock Company in collaboration with
Ms. Nguyen Duc Thach Diem - Member of BOD cum CEO of Sacombank was given Vietnamnet Online Newspaper.
“Red Star Award 2019” (Vietnam Top 10 outstanding Vietnamese entrepreneurs and
the only bank CEO to receive Red Star Award in 2019). SERVICE QUALITY
The award was hosted by Vietnam National Youth Federation and the Vietnam Young Entrepreneurs’
Association’s central committee
Sacombank maintains its leading position in
contactless payment and QR code payment

TOP 10
technology in 2018.
private commercial banks

TOP 3
Recognized by Mastercard International Card Organization in 2019 public listing businesses recognized by
Recognized by Vietnam Report Joint Stock Company in collaboration investors in 2019 (Large Cap)
with Vietnamnet Online Newspaper. Recognized by Vietstock in collaboration with Finance and Life Online Newspaper (Fili.vn).

BRAND POSITIONING

•• Outstanding retail banking service

•• Outstanding e-banking service
Awarded by International Data Group (IDG) in collaboration with
Vietnam Banking Association.

•• Leading bank in card transaction volume

•• Leading bank in number of newly-issued credit cards
•• Leading bank in number of credit cards in circulation
•• Leading bank in new card products •• Leading bank in total payment transaction volume
•• Leading bank in card transaction volume growth •• Leading bank in total payment transaction volume by credit card
Recognized by JCB International Card Organization •• Leading bank in volume growth at card acceptance points
•• Leading bank in the highest ratio of active contactless acceptance devices
•• Leading bank in total contactless payment volume and top bank in total QR payment volume.
Recognized by Visa Inc. International Card Organization

22 23
 SACOMBANK INTRODUCTION

ORGANIZATIONAL STRUCTURE

SHAREHOLDERS COMMITTEE

MANAGEMENT
AND BOARD OF SUPERVISORS BOARD OF DIRECTORS
SUPERVISION
Internal Audit COMMITTEES

Board of Directors’ Office

CEO

Councils Executive Secretary

Internal Control & Itinerant Marketing and

Director Department Communications Center

PERSONAL CORPORATE GLOBAL DEBT HUMAN RESOURCES INFORMATION RISK

CREDIT OPERATION FINANCE SUPPORTING
BANKING BANKING MARKETS MANAGEMENT MANAGEMENT TECHNOLOGY MANAGEMENT

Corporate Business Risk Management

Personal Banking Development FX & Derivatives Debt Management Credit Center Domestic Payment Planning Administration Human Resources Research &
Department Department Markets Center Center Center Department Department Department Innovation Center Center

E-Banking Corporate Policy and Capital Market & Accounting Construction Training Application
Product Development Investment Special Debt Valuation International
Department Department Department Payment Center Department Department Center Development Center Legal Department
Department Department

Bancassurance Corporate Sales Financial Institutions Customer Services ALM IT Operations Compliance
Center Center Department Center Department Center Department

OPERATIONS Telesales Center

Cashiering
Department
IT Infrastructure
Center

IT Security
Card Center Center

Business
Development Unit Regional Office REGIONS SUBSIDIARY BANKS SUBSIDIARIES

Corporate Banking
Department
Sacombank Sacombank Sacombank-SBL Sacombank-SBA Sacombank-SBR Sacombank-SBJ
Personal Banking Cambodia Plc Laos
Department
Branches
Accounting & Cash
Department
In 2019, Sacombank strongly restructured internal organization to comprehensively implement
Risk Control
Department strategic solutions with the following major results:

€€ Established the Compliance Department and built internal €€ Restructured comprehensively the Corporate Banking Division,
Transaction Offices
control system with 03 lines of defense in accordance with the adjusted the Branches’ vertical organizational structures to
Transaction Offices
Circular No. 13/2018/TT-NHNN and Basel II standard. synchronize the different business models: centralized, dispersed
sales, and customer segmentation.
€€ Restructured the Information Technology Division, prepared
resources to digitize banking operations and ensure the €€ Divided, merged, renamed, modified functions and duties of some
Business Accounting & Risk Control Business Accounting & separation of Development - Governance - Operation - departments in accordance with the new marketing strategy.
Unit Cash Unit Unit Unit Cash Unit Inspection responsibilities between employees in accordance
with Circular No. 18/2018/TT-NHNN

24 25
SACOMBANK INTRODUCTION

BOARD OF DIRECTORS 2
1
3
4 5
6 7

1. MR. DUONG CONG MINH

Chairman of BOD
34 years of experience in Economics - Finance - Banking
Bachelor of Economics

2. MR. PHAM VAN PHONG

Standing Vice Chairman of BOD
39 years of experience in Economics - Finance - Banking
Bachelor of Economics, Bachelor of Politics, Master of Business Administration

3. MR. NGUYEN MIEN TUAN

Vice Chairman of BOD
22 years of experience in Economics - Finance - Banking
Bachelor of Arts in English Literature, Master of Economics

4. MS. LE THI HOA

Independent Member of BOD
36 years of experience in Economics - Finance - Banking
Bachelor of Finance - Banking, Bachelor of Arts in English Linguistics,
Master of French - Vietnamese Economics

5. MR. NGUYEN VAN HUYNH

Independent Member of BOD
31 years of experience in Economics - Finance - Banking
Bachelor of Economics

6. MS. NGUYEN DUC THACH DIEM

Member of BOD
20 years of experience in Economics - Finance - Banking
Master of Business Administration

7. MR. NGUYEN XUAN VU

Member of BOD
13 years of experience in Economics - Finance - Banking
Bachelor of Economics, Master of Finance - Banking

26 27
 SACOMBANK INTRODUCTION

BOARD OF SUPERVISORS

MR. TRAN MINH TRIET MS. NGUYEN THI THANH MAI MR. LE VAN TONG MR. HA TON TRUNG HANH
Chief Supervisor Member of BOS Member of BOS Member of BOS

18 years of experience in 26 years of experience in 31 years of experience in 36 years of experience in

Economics - Finance - Banking Economics - Finance - Banking Economics - Finance - Banking Economics - Finance - Banking
Master of Business Administration Bachelor of Business Administration Bachelor of Science Bachelor of Banking, Master of
Economics - Finance - Banking

28 29
SACOMBANK INTRODUCTION

BOARD OF MANAGEMENT

MS. NGUYEN DUC THACH DIEM MR. PHAN DINH TUE MR. HA VAN TRUNG MR. NGUYEN MINH TAM MS. QUACH THANH NGOC THUY MR. LE DUC THINH MR. LE VAN RON
Chief Executive Officer (CEO) Deputy CEO cum Director of Deputy CEO cum Director of Deputy CEO cum Director of Deputy CEO cum Director of Deputy CEO cum Director Deputy CEO cum Director of
Credit Division Finance Division Personal Banking Division Operation Division of Human Resources Risk Management Division
Management Division

20 years of experience in 36 years of experience in 23 years of experience in 25 years of experience in 28 years of experience in 24 years of experience in 29 years of experience in
Economics - Finance - Banking Economics - Finance - Banking Economics - Finance - Banking Economics - Finance - Banking Economics - Finance - Banking Economics - Finance - Banking Economics - Finance - Banking
Master of Business Administration Bachelor of Business Administration Master of Finance and Banking Master of Economics Bachelor of Business Administration Bachelor of Economics Master of Business Administration
- Foreign Trade

Responsible for general management for all Responsible for Credit and Corporate Responsible for Finance and Responsible for Personal Banking Responsible for Operation Division. Responsible for Human Resources Responsible for Risk Management
activities of Sacombank; Debt Management and Banking Divisions and Sacombank-SBA. Supporting Divisions and Sacombank Division and Sacombank-SBR. Management Division, Internal Division and Sacombank Cambodia
Information Technology Divisions; Marketing and Laos. Control and Travelling Director Plc.
Communications Center; and Sacombank-SBL. Department.

30 31
 SACOMBANK INTRODUCTION

BOARD OF MANAGEMENT(continued)

MR. DAO NGUYEN VU MR. NGUYEN BA TRI MS. HA QUYNH ANH MR. HOANG THANH HAI MR. HO DOAN CUONG MR. VO ANH NHUE MR. BUI VAN DUNG MR. HUYNH THANH GIANG
Deputy CEO cum Director of Deputy CEO cum Director of Deputy CEO cum Director of Deputy CEO cum Director of Deputy CEO cum Director of Deputy CEO cum Director of Deputy CEO Chief Accountant
East HCMC Region West HCMC Region Hanoi City Region North Region Southeast Region Southwest Region

28 years of experience in 26 years of experience in 27 years of experience in 23 years of experience in 24 years of experience in 26 years of experience in 31 years of experience in 25 years of experience in
Economics - Finance - Banking Economics - Finance - Banking Economics - Finance - Banking Economics - Finance - Banking Economics - Finance - Banking Economics - Finance - Banking Economics - Finance - Banking Economics - Finance - Banking
Bachelor of Banking Bachelor of Economics Bachelor of Economics and Laws Bachelor of Economics Bachelor of Business Administration Master of Finance Bachelor of Mathematical & Master of Economics.
Cybernetics.

Responsible for East HCMC Region. Responsible for West HCMC Region. Responsible for Hanoi City Region. Responsible for North Region. Responsible for Southeast Region. Responsible for Southwest Region.

32 33
SACOMBANK INTRODUCTION

CEO NGUYEN DUC THACH DIEM:

THE INSPIRER OF SACOMBANK’S YOUTH 4 ELEMENTS OF THE
SUCCESSFUL LEADER
Ms. Nguyen Duc Thach Diem – 1st female leader in Vietnam banking industry since coming in her way and fortunately Chairman Confidence, credibility, strong-willed and
Duong Cong Minh was very accommodating to any
2017. In her incumbent, she deployed her characteristic rationality, couple with decisions of her.
commitment are 4 traits that Ms. Diem
a sentimentality, to guide Sacombank through what has so far been successfully demonstrates in her daily work-life:
Visionary, creative and driven - personal traits portray
journey against challenging issues. Her journey is proving to be the outcomes Ms. Diem. She always offers her understanding, support “I have my confident in every decisions
for a commander whose leadership has been consistently describe as sensible, and sentimentality, which are credited to gain trust and and actions that I made and I believe
inspired and cautious. respect from her colleagues and subordinates.
that I am on the right track. I choose
The overall business of Sacombank was restored
From non-performing loans to reflecting on the financial indicators - a fair and true to be credible in everything I do, I focus
over VND3,200 billion profit view of operation and finances. The peak ratio of on the collective interests over others.
legacy assets dropped by 35.6% compared to 2017, Strong-willed is not only a must but also
accounting for 13.8% of total assets.
Ms. Diem started her career at Sacombank from a necessity for me to steer Sacombank
the very ground level as a sales staff in 2002. Since Sacombank had outdone its 2019 performance
then, she exposed herself to different positions in in this regard, net profit was at VND3,217 billion, to new phase. And finally, I myself need
organization, which quietly built up her experiences exceeding 21.4% than set out in the AGM; Total to be courageous and ready to fulfill the
and characters. Her competency is marked by the assets topped at VND453,581 billion; Deposit taking
outperformance of South Central and Western and loan givings were in constant growth and NPL
responsibilities”.
Highlands Region (2013 – 2016) – where market is ratio lowered at 1.9%. The number of customers
defined as competitive and tough. peaked at 6 million customers were well based
across Indochina.

She defined herself as a hard worker whose

responsibility is guiding people to yield the
collective benefit.

She braced herself in crowning challenge when

she handled the Debt Collection Department which
was believed to earn her advantages that laid out
foundation to the later career. In July 2017, she took
position as CEO, and later in April 2018, Ms. Diem was
enlisted in Member of BOD. The moment she took
on roles, headwinds were awaiting – credit value-
chain lowering, employees offboarding, long-term
customers runoff. On the top, reported non-earning
assets of over VND96,000 billion (nearly 30% of total
assets) and the urge to complete the Restructuring
Plan were her quest.
Ms. Diem revealed, the ultimate duty came to her
sense was how strike the chord in 19,000 employees
to create a sense of shared value to the whole
organization. She defined herself as a hard worker
whose responsibility is guiding people to yield the
collective benefit. Transparency and preciseness
– her deliberate measures to deal with any issues

Sacombank’s Board of Management 34 35

SACOMBANK INTRODUCTION

Break through mindset to shape the present

CEO NGUYEN DUC THACH DIEM: Enhance the value to master the future
THE INSPIRER OF SACOMBANK’S YOUTH (continued)

Leadership with competency, fair Employees give their credit to Sacombank even
they leaved. Existing customers oftentimes provide
the desire to create human capital, the reviewed
performance-based payroll scheme came in as As a Red Star entrepreneur,
mindedness and decisiveness referral about Sacombank’s products and services,
the consequence. She paid attention to employee’s
I hold myself accountable
wellbeing through a comfortable, flexible and
and new partners onboard in our progressive
Ms. Diem and her associates have spent nearly
1,000 days working wholeheartedly to re-image
transition journey, Ms. Diem delightful addressed.
inspiring working environment, in which the talents
felt attached to. and responsible to manage
Sacombank and her hardship had paid off. Board
of Management worked around the clock to solve
Ms. Diem believed the guidance of Board of Sacombank to follow the rules
outstanding issues, to develop employee retention Other than self-judgment, fair mindedness is Directors, Board of Supervisors, the effort of Board
and policies so that Sacombank
of Management, together with the hardship of
scheme, and to increase the cooperation among necessary to inspire thousands of employees employees had been a springboard to the initial
business units. Other than self-judgment, fair
to believe in her leadership to work together outcomes - reflected the solidarity of Sacombank’s could complete the Restructuring
mindedness is necessary to inspire thousands
of employees to believe in her leadership to work to achieve common goals. leaders and employees – ‘’shoulder to shoulder’’, as
well as the confidence of stakeholders, helped us to Plan while heading towards
together to achieve common goals.

To rebuild the corporate culture, Ms. Diem issued a

return to the track. ‘’That is why I am very proud of
my team”, Ms. Diem fondly shared. sustainable development. We
set of cultural standards to help all new employees
to understand the Bank’s core values and code
Committed to wellbeing, which we believe is source
of our strength, Ms. Diem fostered employees to With the outstanding leadership to restructure pledged our support to the
Sacombank, Ms. Nguyen Duc Thach Diem was
of conduct. In March 2019, Ms. Diem launched
“Sacombank’s youth” program - “Physical fitness -
build hope, to dream up and to succeed by offering
training sessions, education programs as well as the only CEO in the financial sector awarded “Red corporate community. We offered
Star Award 2019” - the honorable award for young
Mental strength” theme to nurture the relationship,
pairing with universities in “Sacombank internship
semester”, “Excellence Trainee”. She showcased entrepreneurs in Vietnam. banking solutions for startups
to boost the creativity and to grow the engagement.
and investment packages for
(Abstracted from the Young Entrepreneur Magazine,
No. 01/2020) local enterprises to position
their core business and
strengthen our networking.

36 37
 BUSINESS PERFORMANCE IN 2019

Break through
MINDSET
BUSINESS PERFORMANCE IN 2019

PERFORMANCE OVERVIEW IN 2019

TOTAL ASSETS BUSINESS RESULTS

TOTAL ASSETS PROFIT BEFORE TAX PROFIT FROM SERVICES

453,581 VND billion 11.7% 18.6% 81.4% 3,217 VND billion 43.2% 3,323 VND billion 23.9%
4.7% 4.7%

453,581 3,217 3,323

406,041 2,682
368,469 2,624
Structure 2,247

1,492

Earning assets
2017 2018 2019 Non-earning assets 2017 2018 2019 2017 2018 2019

CUSTOMER DEPOSITS CUSTOMER LOANS NPLs

Profitability

410,334 VND billion 14.8% 296,030 VND billion 15.4% 9.56 % 0.57% 1.9% 0.22%
ROAE ROAA
Total recovery of non-performing loans
and legacy assets in 2019
410,334

>18,400 VND billion

296,030 9.56% 0.57%
357,455
325,461 256,623
222,947 7.48% 0.46%

NUMBER OF CUSTOMERS
Lowered
medium-
Increased term and
CASA ratio long-term
(VND) loan ratio

6.1million customers
1.9% 4%

2017 2018 2019 2017 2018 2019 2018 2019 2018 2019 18.6%

40 41
BUSINESS PERFORMANCE IN 2019

BUSINESS RESULTS IN 2019

In 2019, the philosophy of All.Ahead was delivered in the four
key elements - finance, customer, procedure, training and
development; successfully completed key targets as committed
to the AGM, ensuring progress of the Restructuring Plan.

Financial performance
Sacombank has scaled up its market share aligned with efficiency, returns, financial indicators and
prudential ratios: Controlled credit quality, lower NPL and legacy asset
recoveries
NPL ratio

1.9 %
NPL ratio was down to 1.9%. Meanwhile, Sacombank increased risk
Top 6 largest banks in Vietnam by total assets, greater provision with loan loss reserves (LLR) ratio reached 69.3% (increased
Total assets asset quality by 4.8 pps). In addition, Sacombank actively promoted the progress of

453,581
recovering and handling bad debts and legacy assets (including debts
Total assets (TA) grew by 11.7% to VND453,581 billion. Sacombank sold to VAMC) with total recoveries of more than VND18,400 billion (of
made some good progress in recovering legacy assets, generate which, VND 2,700 billion is expected to be received in the coming year).
inflows into business. Earning assets increased by 18.5% from last
VND billion year. Owner’s equity was VND26,742 billion, increased by 8.6%, mainly
from retained earnings.
Low-risk portfolio
Total revenue from
investment securities In 2019, Sacombank mainly expanded the bond portfolio, especially the

2,039
Government bonds. Sacombank made some new investments in other
Deposits taking Stable deposit growth, ensuring liquidity level institutions while reviewing portfolio and divesting from risky and less

410,334
beneficial activities. Total investment securities and trading securities
Deposits taking was at VND410,334 billion, grew by 14.8% YoY, higher (excluding VAMC bonds) were VND47,189 billion, accounting for 10.4%
than the average of 13.9% of banking industry. The proportion of CASA
(VND) increased to 16.3% from 14.4%, demand and week-term deposits VND billion of TA. Total revenue from investment securities was VND2,039 billion,
increased by 5.3% from last year.
VND billion increased by 30.5%.

Improved services to offer customers the optimal

experience and security
Reasonable growth of credit from the beginning of the Revenue from services

3,323
Outstanding loan year, in accordance with regulations of the State Bank

296,457
of Vietnam Revenue from services was VND3,323 billion, 23.9% higher than
2018, contributed 22.7% of the Bank’s total revenue. Of which, 80%
Outstanding loan reached VND296,457 billion, increased by 15.3% was generated from individual customers. Sacombank’s traditional
YoY, strictly keep within limits set by the State Bank of Vietnam (SBV). VND billion services were well developed, products and services were gradually
VND billion In which, customers loan rose by 15.4%, loan portfolio shifted from
medium - and long-term to short-term, loans in foreign currencies
digitized, and bancassurance activities were promoted.

decreased by 30bps. The distribution of corporate loans increased by

5.1pps while book to property segment declined by 2.5pps.

42 43
BUSINESS PERFORMANCE IN 2019

BUSINESS RESULTS IN 2019

The number of eBanking users
(continued)
2.2
million users
Net revenue from eBanking
eBanking transaction volume 49.9% services

1,990,262 369
VND billion
VND billion
47.2% 87.3%
E-
ba
se nkin
rv g
ice
Domestic payment volume

12.93 EN
YM AL
PA ION E
IC T C
ST NA VI
ME TER SER
T

VND quadrillion DO IN NT
D E
AN YM
Card service

35,844
PA

14.7%
VND billion

35%

Ca
rd
se
rv
ice
Payment volume

671
VND billion

14.5%
International payment volume

11.5
USD billion Revenue

11.3% 1,011 The number of card holders

Profit from card services
VND billion
5.2 1,003
5.8% VND billion
million customers

16.4% 37.1%
44 45
BUSINESS PERFORMANCE IN 2019

BUSINESS RESULTS IN 2019

(continued)
Dynamic forex trading
Forex trading profit
Against the less favorable market (Stable USD/VND exchange rate,

609
decreased cross-border trading, etc.), Sacombank incorporate
Direct insurance business point Revenue from First Year Premium (FYP) technologies in developing products and services’ functionalities to

771
attract new customers. Subsequently, forex trading profit increased by
156 VND billion 51.7% YoY to VND609 billion, and trading volume grew by 8.6% YoY to
USD13.2 billion.
points VND billion

139points exceeded VND 317 billion compared with contracts Improved cost efficiency
Cost to Income ratio
Cost was effectively managed. In order to maintain competitiveness,

57.2
% Sacombank prioritized investment in network development, employee
benefits, information technology (IT) and branding. Then, the bank
lowered the cost to income ratio (CIR) by 4.7 pps to 57.2% in comparison
E with that of 2018.
A NC
UR IC E
INSERV
S
Profit before tax exceeded the plan by 20%, profitability
gradually improved
Profit before tax

3,217
Total revenue was VND14,635 billion, up 25.3% compared to the previous
year, with main contributions from interest revenue (up 20.3%) and
service revenue (up 23.9%). It allowed Sacombank to increase provision
and allocating expenses for handling legacy assets.
VND billion Profit before tax (PBT) significantly increased by 43.2% to VND3,217
billion (121.4% of the plan approved in the AGM. Profitability significantly
improved: ROAE was 9.56% (up 2.08pps), NIM was 2.7% (up 4bps).

Complied with all prudential All of Sacombank’s prudential ratios always abided with the SBV’s
ratios regulated by the regulations. In which, 30-day solvency ratio in VND significantly
SBV, enhanced the Bank’s improved, ratio of short-term capital for provision of medium-term
and long-term loans gradually decreased according to the roadmap
information transparency set by the SBV.

Capital Ratio of Ratio of Fixed-asset Loan-to- Ratio of Liquidity 30-day

Net revenue from Number of life insurance contracts
adequacy ratio short-term capital investment Deposit investment in reserve solvency
insurance service issued during the year
(consolidated) capital for contribution ratio Ratio government ratio ratio
815 39,797 provision of and Shares
medium- purchase
bonds,
government-
(VND)

VND billion contracts term and backed bonds

long-term
47.2% 80% loans

11.53% 35.02% 21.74% 42.7% 70.78% 10.27% 16.03% 70.75%

46 47
BUSINESS PERFORMANCE IN 2019

BUSINESS RESULTS IN 2019

(continued)

Customers Internal process

•• With the belief “Customers are centric”, Sacombank has focused •• Establishing the organizational structure in •• Embracing the role of human resources
on improving customer experiences and satisfaction by introducing compliance with the Circular No. 13: With 03 and encouraging innovation and creativity:
modern and comprehensive products and services, advancing and i-line of defense model: (i) identify, control and Improving personnel value and working
Online deposits

30.7
developing digital channels, digitizing internal processes, and improving minimize risks; (ii) develop risk management environment by offering competitive welfare,
% customer service. There were more than 1 million new customers, with
a cross-selling ratio of 2-3:1. The level of satisfaction with the bank’s
policy, internal regulations on risk management,
measure, monitor risks and comply with legal
optimizing values, and increasing satisfaction for
employees. Income was linked with employees’
products and services significantly improved, the number of complaints regulations; (iii) internal audits. Also, the Bank performance and profit contribution. Raising
decreased by 63%. The number of online banking transactions has reviewed top-down approach to ensure awareness of Sacombank’s culture, as well as
reached over 44 million transactions, with a total value of nearly VND2 appropriate control and decision-making was core values and code of conduct. Sacombank
quadrillion, online deposits increased by 30.7%. well-defined and applied through out Sacombank ensures the transparency and fairness in
in scope of management and operation. promoting management through examinations,
•• Sacombank has run a series of media events and marketing activities interview, and employee feedback. The Bank
throughout the year, driving customer enjoyment, engagement. Spirit of •• Implementing effective objective-oriented committed to builds the culture of collaboration
a youthful – active – innovative employees was well developed through management in business operation: Design through launching activities to grow “Internal
outdoor activities. sales promotions, sales incentive program to connection - reshape mindset”.
boost up sales.
•• As a result, employee productivity has been
•• Renetworking and increasing the share improved, the average PBT/employee reached
of sales in the workforce: Sacombank VND169 million/employee, VND49 million higher
synchronized internal quality and risk than previous year (increased by 40.5%). Innovation
management standards at the Bank’s and creativity were encouraged, employee
transaction points. In 2019, the Bank opened satisfaction level was higher than the compatible
4 branches in the North region, expanding its banks and the turnover rate was significantly
network to 570 transaction points. decreased.

•• Streamlining and digitizing regulatory

documents: Shortened the average transaction
processing time at counter by 21% compared to
the previous year. Sacombank maintained ISO
9001 – 2015 quality management certification.

Learning and development

•• Engaging IT in all activities: Automated or
semi automated all products, services and
operational process to ensure the continuity,
safety, and security in system operation.
Particularly, the Bank has upgraded the core
banking system T24 to R17, launched and
successfully operated debt management and
recovery system, Sacombank Pay phase 2, and
LOS phase 1 projects. Projects relating to Basel
II, Chatbox, Smart Queue, etc. are recently
launched or are under pilot phase.

48 49
BUSINESS PERFORMANCE IN 2019

CORPORATE BANKING DIVISION

PERFORMANCE OF PERSONAL BANKING,
CORPORATE BANKING, AND CREDIT DIVISIONS
Extensive distribution
channels, advanced
technology, and in
57,789 113,063 119,240 2 20% 25%
VND billion VND billion frequent users average total service total bank
deep understanding of
market and customer 25.1% 12.7% 6.8% products and revenue revenue
In which: 38.2% of services unit
needs, Sacombank has used by 1
developed the customer FDI 23% proportion
customer
14.1% of
base and ebanking, PRODUCT REVENUE
proportion
to promote cross AND SERVICE/ FROM
DEPOSIT LENDING CUSTOMERS CUSTOMER SERVICES TOTAL REVENUE
sellings. Subsequently,
all business activities Launching 5 preferential loan packages worth VND10,500
has earned significant billion such as: }} Applying technology, streamlining procedures,
(Opening online account, applying for product and service,
revenue: }} Environment Loan/Green Credit – Promoting Export.
printing e-forms, e-invoice, using QR code to check
Working capital2019.
deposit contract/bank guarantee).
}}

}} SMEs Loan 2019.

}} Car loan
}} Short-term VND loans for VIP corporate customers.

PERSONAL BANKING DIVISION CREDIT DIVISION

352,546 182,966 5.9 million 3 80% 75% 296,030 182 385,900 28,047
VND billion VND billion customers average total service total bank VND billion transaction customers VND billion
products and
13.3% 17.1% 18.7% services unit
revenue revenue 15.4% points 5% 15.9%
85.9% of 61.8% of used by 1 In which: loan amount
proportion proportion customer <VND10 billion, accounting
for 65%
PRODUCT
LENDING REVENUE FROM
DEPOSIT CUSTOMERS AND SERVICE/ TOTAL REVENUE
SERVICES LOS SYSTEM REVENUES FROM
CUSTOMER TOTAL LOAN CUSTOMERS
IMPLEMENTATION CREDIT INTERESTS

Focusing on business loans, reducing loans to Providing diverse banking platforms (eBanking, card, Loan Origination System (LOS): Implementing }} Consolidating regulatory documents in credit activities, issuing
real estate, securities, and other sectors. Taken insurance-linked services, etc.), many traditional Phase 1 to new credit application requested guideline for credit limits by economic sectors.
together launching consumer finance loans services such as: overseas remittance, tax payment, from 182 transaction points in Eastern and the Implementing training programs, workshops and seminars on
enabling to generate higher margin. on-line services with advanced risk management
}}

Western of HCMC. Ethics in credit issuance for the whole bank.

system to ensure security and confidentiality.

50 51
BUSINESS PERFORMANCE IN 2019

FINANCIAL PERFORMANCE

Assets Liabilities
Sacombank has pro-actively changed asset portfolio towards increasing Earning assets and decreasing With the aims at not only ensuring liquidity level, loan-to-deposit ratio (LDR) and investment ratios that meet
risk-weighted ones. Early 2020, thus Sacombank could comply with the SBV’s capital adequacy requirement the SBV’s regulations but also improving profitability, Sacombank pro-actively utilized the deposit funding
regulated in Circular No. 41. Also, the Bank adopted the continued bad-debt recovering approach to increase by promoting deposits from economic organizations and individuals from flexible strategy (interest rates)
more cash flows. Certain results came in as follows: according to market demands as well as SBV’s requirements. This strategy produced good funding structure
with a major contribution source from individual/corporate customer, and low beta on market sensitivity.
•• Earning assets grew by 18.5% YoY to VND369,067 billion, accounting for 81.4% of total assets, higher
than 76.7% of last year. In which: Sacombank’s total liabilities were VND 426,839 billion, up 11.9% from early year. In which:
€€ Customer loans increased by 15.4% and investment in debt securities rose by 23.6%, mainly from
Government bonds.
• Deposits from corporate and individuals grew by 14.8%, accounting for 96.1%. Sacombank focused on
€€ Assets with risk-weighted ≤100% increased by 13.3% and assets with risk-weighted ≥150% decreased by increasing low-cost funding, thus CASA ratio (VND) was at 16.3%.
5.8%. Hence, the proportion of asset with risk-weighted ≤100% increased to 92.9% from 91.6%.
• Funding from capital market accounted for 0.9% only.

7.1%
Risk-weighted Total assets

453,581 VND billion

19.3%
8,4%
assets structure
19.6% 17.5%
Risk-weighted 0%
21.8% 7.7%
10.8%
Risk-weighted 20%
Assets with risk-weighted ≤100%

92.9%
Risk-weighted 50%
41.5%
Risk-weighted 100%

46.3% Risk-weighted 150 - 200%

•• Interest income gradually stabilized, NIM grew to 2.7% from 2.66%.

52 53
BUSINESS PERFORMANCE IN 2019

PERFORMANCE OF SUBSIDIARIES
AND SUBSIDIARY BANKS
Sacombank Jewelry Co., Ltd. (Sacombank-SBJ)
In 2019, subsidiaries took advantage of the market to promote business activities, Revenue Charter capital: VND250 billion

1,369 6
attract new customers, encourage cross sales and support Sacombank while
In 2019, Sacombank-SBJ’s production and operations prospered with
assuring risk control. As a result, most of subsidiaries/subsidiary banks reported revenue growth rate of 6 times from that of 2018, recorded at over VND1,369
significantly improved performance compared to the previous year. times billion. Although business performance significantly improved and was on
VND billion an upward trajectory, PBT was still low due to industry characteristics with
strong competition and high cost of funds. PBT of Sacombank-SBJ was
recorded at VND5.1 billion, grew by 158% YoY.

Sacombank Asset Exploitation & Debt Management Co.,

Ltd. (Sacombank-SBA)
Profit before tax Sacombank Cambodia Plc

150
Charter capital: VND800 billion
Charter capital: VND1,644 billion

60.3 %
Sacombank-SBA recorded a good growth rate of warehouse leasing that
Total assets In 2019, Sacombank Cambodia Plc scaled up business.
reached 100% capacity. Collaterals management and property appraising

223.1
services effectively supported the Parent Bank. Furthermore, the Total asset was VND223.1 million, 24.6% higher than last year.
VND billion
}}

company gained significant revenue from legacy assets liquidation. PBT

of Sacombank-SBA reached VND150 billion, up 60.3% compared to 2018. 24.6 % }}Total deposit was USD158 million, in which, deposits from corporates
and individuals reached nearly USD145.7 million, up 31.3% from last
USD million year.
}}Loan was USD157.5 million, up 12.2% from the previous year, of which,
personal loans increased by over 30%.
Total income

5.9
Sacombank Leasing Company Ltd. (Sacombank-SBL) }}Total income was USD5.9 million, mainly from credit revenue.
Charter capital: VND300 billion On the other hand, Sacombank Cambodia Plc recovered problem loans.
Profit before tax Consequently, Sacombank Cambodia Plc reduced loss by USD11.8 million.

79.4
Sacombank-SBL pro-actively restructured its loans portfolio given the However, there were still NPLs that have not been fully recovered that
USD million require risk provision to ensure financial metrics, as a result, PBT loss
favorable market condition, business performance improved. Financial
20.5 % leasing balance was VND1,931 billion, up 13.55% from last year. Sacombank-
SBL delivered good progress in recovering problem loans, outstanding loans
was recorded at USD-2.6 million. In the beginning of 2020, Sacombank
Cambodia Plc has fully recovered NPLs and recorded positive profits.
VND billion lowered to 2.73% and non-performing loans went down 2.30%. Cost of funds
decrease; operating expenses were well-controlled. Subsequently, PBT
reached VND79.4 billion, up 20.5% compared to that of 2018.
Sacombank Laos
Total assets Charter capital: VND819 billion

Sacombank Overseas Remittance Service Company

Sacombank-SBR’s overseas (Sacombank-SBR)
remittance volume
173.7 In 2019, Sacombank Laos’s business operation maintained its upward
trajectory.
Its total assets reached USD173.7 million.
Charter capital: VND15 billion USD million }}

531.4
}}Total deposits was USD127.4 million. Of which, deposits from corporates

48.3 % Sacombank-SBR’s witnessed an improvement in overseas remittance

volume with a modest growth rate. In 2019, SBR’s volume increased by 48.3%
Profit before tax
and individuals reached USD59 million, 56.9% higher than last year.
Loans reached USD97.8 million, 12.5% higher than last year by

>1
}}

USD million YoY to USD531.4 million. The on-going restructuring process and corporate decentralizing and decreasing balance of potential risky portfolio.
governance remodelling for risk management affected PBT - at VND0.4 Total income reached USD6.3 million, of which non-credit income
billion (up 109% YoY).
}}

USD million accounted for 25%.

}}PBT reached over USD1 million.

54 55
BUSINESS PERFORMANCE IN 2019

RESTRUCTURING PLAN REPORT (Separated Financial Statements)

The year 2019 was marked the 3rd year of the Restructuring Plan’s
implementation. Sacombank continued to achieve impressive
results of business solutions, capacity in operation management,
risk management.

1 3
The business scale was developed towards stability, Digital banking operation and IT projects’ progress,
ROAE

2.46
quality and efficiency’s improvement and income Applied were boosted to fully meet requirements of Circular No. 41 being
% increase, contributing to the handling of financial
Circular No. 41 effective as of 01 January 2020. Sacombank has developed and
applied internal control system model, complying with the roadmap
problems under the Plan of SBV’s Circular No. 13.
as of
ROAA
Deposit and loan market shares increased by 0.03% and 0.05%
01/01/2020
0.13
}}

respectively, compared to last year. However, Sacombank could

% not fully exploit its resources due to the approved credit limit.

}}
being under that of the Plan (18-19%).

The business performance significantly improved: ROAE increased

4
by 2.46%, ROAA increased by 0.13%, NIM increased by 0.04%. Owner’s capital generating ensuring prudential ratios
Owner’s capital
2
27,345
in accordance with SBV’s regulations at all times.
Owner’s capital reached VND27,345 billion, increased by VND8,226
Sacombank proactively collected/handled NPLs, billion (+43%) compared to the end of 2016. The prudential ratios were
under control within the SBV’s regulations.
non-earning assets decreased
Accrued interest VND billion

1/3
In 2019, total revenues from the collection and recovering NPLs
reached over VND18,400 billion, including VND14,364 billion from
liquidation of Collaterals (VND12,409 billion under the Plan), over
VND1,300 billion collection from accrued interest reversed to
income, and over VND2,700 billion will be collected according to
5
Problem assets the contract.

35.6
Number of Customers Branch network and customer base expanded: In
%
18.6
}} Accrued interest decreased by one third, from VND21,576 billion to 2019 Sacombank opened 4 new branches in the Northern region
VND14,878 billion.
% (Nam Dinh, Thai Binh, Lao Cai, Ninh Binh), increasing it’s the total
number of transaction points to 570. The Bank have operations in
}} Nearly VND4,400 billion problem assets was recovered or allocated
to operating expenses, which cumulatively totalled VND6,200 billion 52/63 provinces and cities in Vietnam, Laos and Cambodia with over
from the start of the Plan’s implementation, 158.9% of the Plan’s 6 million customers, increasing by 18.6% which helps fully exploit the
schedule. local potentiality.

}} Problem assets decreased by 35.6% compared to the end of 2016,

currently accounting for 13.8% of total assets (decreased by 15.5%).

56 57
BUSINESS PERFORMANCE IN 2019

RISK MANAGEMENT PERFORMANCE REPORT

In 2019, Sacombank transformed its Risk Management

Department into Risk Management Center to
upgrade risk management function. Currently, risk
management apparatus operates with 3 lines of
defense: Business, Risk Management and Internal
Control. All 3 lines work together so that risks are
In addition, Sacombank established risk appetite framework in each aspect such as: credit quality, liquidity,
controlled before, during and after transactions.
operational risk limit, loss limit, etc. On such basis, limits for the bank’s risk-generating activities were set
following the risk appetite.

In addition, Basel II projects which are currently at the final stage will facilitate Sacombank in approaching
advanced standards, such as:

Sacombank also completed legal framework by •• Credit Risk Quantification Model Project: Measures specifically the credit risk level of each borrower,
issuing risk management regulatory framework to each loan and determines the credit risk indicators such as PD, LGD, EAD, etc. After completing this
guide and govern key risks: Credit risk, Operational project, the Bank will apply Basel II advanced standards in credit operations.
risk, Liquidity risk, Market risk, Concentration risk,
and Interest rate risk. The risk management •• ALM Framework Comprehensive Upgrading Project: Establishes and completes framework for
regulatory framework is in accordance with liquidity risk management and interest rate risk on Banking book.
Circular No. 13/2018/TT-NHNN dated
18th May 2018 on internal control •• Bank’s risk control project: Completes operational risk governance system.
system of commercial
banks, Basel standards •• Market risk system upgrading project: Upgrades valuation model, calculates required capital and
and Sacombank’s develops stress testing methods for market risk-sensitive product portfolio.
development strategies.
Also since 2019, Circular No. 41 has been officially applied by Sacombank on capital adequacy management.
Aside from successfully implementing a complicated utility system like Oracle’s OFSAA, Sacombank is also
developing Risk Data Mart system – a risk management database as a foundation for Basel II and other
upgraded versions.

58 59
BUSINESS PERFORMANCE IN 2019

GETTING READY FOR DIGITAL TRANSFORMATION

Since 2005, technology has

fundamentally changed
31million 64 %
55 million
people are Facebook
the market and industries, depositors don’t
of the population, users, of which 59% of
access the Internet them use everyday, 33% are
especially our daily lives have any bank
account
on their mobile in 18-24 years old age group.
phones (61.7
in work, communicating million people)

with others, booking cars,

shopping, etc. and in
transaction with banks. 80 million
67 % of population use the
Internet (64 million people)
people use Zalo

60 61
BUSINESS PERFORMANCE IN 2019

GETTING READY FOR DIGITAL TRANSFORMATION

(continued)
Robotic Process
Cloud Computing Automation (RPA)

WHAT IS DIGITAL DIGITAL

TRANSFORMATION? TRANSFORMATION
Artificial
Blockchain
Intelligence and
Machine Learning TRENDS
(AI & ML)

?
Digital transformation is the integration of digital technologies into all Big Data, Data Mining
areas of society and corporates. At Sacombank, digital transformation & Data Analytic Internet of Things
- IoT
is leveraged in developing products, services, operational procedures
and business models to achieve the following goals:

Digital transformation process at Sacombank

2010 2013 2018 - 2019
Technology was identified Sacombank launched the first Sacombank implemented
as a core pillar in the breakthrough Omni-channel a series of large projects,
development strategy. banking model in Vietnam that marking the inauguration
To create a collaborative Sacombank develop an integrated Internet banking, mobile of digital transformation
To optimize customer To provide better To optimize operation Omni-channel distribution banking and transaction notification journey. A modern and multi-
experience working environment products and and increase labor – financial services system in one platform, delivering functional bank providing
and manage workforce services productivity digitalization plan to narrow convenience and consistent multi-utility products and
effectively the gap between the bank customer experience. services on digital platform is
and its customers. the journey destination.

Digital transformation Applications in Vietnamese banks

Sacombank’s important projects
Facing behavior changes and emerging customer demand as well as the market competitiveness, Vietnamese
commercial banks have been executing digital transformation strategies and considering technology as an •• Core Banking T24-R17 was successfully •• Sacombank Pay - A smart personal financial
important factor of a successful transformation journey. transformed on the digital platform, creating management application was created to meet
•• Chatbot: a virtual assistant with artificial •• RPA: a computerized robot that performs a foundation for the development of multi-utility customers’ daily life demand and promote
intelligence and machine learning technology repetitive tasks to help employees focus on products and services for Customers (June 2018 cashless payment (December 2017 – December
that creates effective interactions and improves prioritized works; – September 2019); 2018);
customer experiences; •• BPM: a digitized and automated business/ •• CRM – Customer Relationship Management: •• LOS - Loan Origination System was fully
•• Digital Banking Platform/Omni-channel: operation process; was developed to digitize marketing, sales digitized (December 2018 – March 2019);
a platform that helps deliver consistent and and customer service processes, targeting at
•• Data analysis: a system that has prediction A series of Basel II projects were implemented
seamless customer experience, connecting customer insight to provide the right service ••

capabilities to provide the right service on to advance risk management and enable
customers to the bank; at the right time, and better service quality
demand at the right time and is able to predict Sacombank to meet requirements of Circular
(December 2017 – January 2019);
risks, turn raw data to intelligent data, etc. No. 41 at the end of 2019.

62 63
BUSINESS PERFORMANCE IN 2019

BREAKTHROUGH
THINKING
Sacombank is always honored to have employees
that possess both strong professional skills and high
integrity. Nowadays, Sacombank employees do not
only fulfill their duties but also continuously improve
and think outside the box. Only when employees can
change their mindsets and unite towards a common
goal, will Sacombank be a powerful organization of Breakthrough thinking
which all values are optimized.
In order to complete the 2020 mission, each of us has to together practice physical exercises, improve professional
etiquette and be willing to accept challenges with the solidarity, creativeness and pioneering spirit.
(CEO Nguyen Duc Thach Diem)

Promotion of inner strength

In 2019, with the motto of “Human resources Sacombank also conducted the Human Resource In 2020, with the spirit of “Breakthrough thinking”, The Bank carried out employee suggestion program
are core”, Sacombank focused on improving Happiness Survey to understand thoughts of all Sacombank will launch a range of actions relating to to foster Sacombank’s development and pro-actively
collaboration, consolidating and promote positivity employees, as a basis for practical activities in the workforce quality enhancement, lean organization, applied technologies into business operations,
in the workplace, so that all employees can break forthcoming years. productivity and working environment. risk management and modern human resource
through their mindsets to complete themselves - management.
Enhance their values to master the future in 2020. Sacombank’s purpose is to increase the happiness Employees were enrolled in training programs
among employees reaching the target “Sacombank focusing on personal capabilities and values. The For the past 28 years, the whole Sacombank family
Sacombank carried out many programs to promote - a Happy Bank”. Bank also carried out the “Trends Integration” has always kept the faith, enthusiasm and dedication
inner strength and connect all employees, such program to improve English skills for Head and to the bank’s development. Each staff will break its
as “Sacombank’s Youth” program encouraging Sacombank always uphold community and social Deputy Head of Units; the “Courageous Leaders” limits to firmly stand amid challenges. Sacombank
physical exercises, promoting determination and responsibility through volunteer activities, local contest for middle-level managers. From 2020 today will develop more than yesterday and further
creativeness to reach outstanding achievements connection events and business support to onwards, all employees from branches to Head in the future, solidify lead position and evolve along
in work and life; “Nurture the Youth - Connect customers. The Bank focuses on training and Office Units will be entitled to participate in with the Vietnam’s development.
to Success” program series for Senior managers, orientation for the young generation through knowledge tests.
Head of Units with the message of team spirit, annual programs such as: “Nurturing dreams”
inspiration and positive energy sharing with scholarship, “Potential interns’’ program, talk To increase the existing workforce productivity,
employees to complete the common targets. shows and skill training courses, etc. In 2019, Sacombank rearranged employees among business
Sacombank established 04 sports clubs, including: Sacombank pioneered to organize a talk-show units, Subsidiaries/Subsidiary banks and Regional
Running, Tennis, Yoga and Dancing with the motto: series “Orient thinking - Change life” with the Branches; increased the number of front-line
Sacombank people are physically fit, mentally participation of nearly 2,000 students from top- workers; rotated Head/Deputy Head of Units with
strong. notch Universities nationwide with the purpose of more than 02 consecutive terms in one Unit to create
inspiring positive thinking and orienting the future the new vitality and challenges for Units; designed a
for each student. sales incentive plan.

64 65
BUSINESS PERFORMANCE IN 2019

Improvement of products, provision of excellent financial solutions

VALUE Identifying creativeness and flexibility are important factors to in running a business, Sacombank continued

ENHANCEMENT
to innovate products and services; lean procedures and forms in a user-friendly way; supplement new
utilities and create unique products and services.

Save time, costs and optimize customer’s demands

01 through promoting online transactions;

Brand is one of vital factors determining the success of a business that

greatly influences investment decisions or customers’ choice. This is
Upgrade E-banking system and financial
especially true for business depending on credibility and trust like banking.
Sacombank always strive to answer the question “What can we do to maintain
management application - Sacombank Pay regularly
with preeminent features; 02
and enhance the brand value?”.

Introduce Smart Queue system - online appointment

03 booking;

Enable beneficiary to receive remittance after 1

minute via ATM (Sacombank was the first bank to
deploy the service); 04

Provide API connection solutions to support

05 automatic and seamless interaction between
corporates and the Bank;

Implement loan packages with preferential interest

rate for individual customers and corporate
customers;
06

Deploy Sacombank Sapphire preferential policy with

07 incentives for long-term customers;

66 67
BUSINESS PERFORMANCE IN 2019

A Pioneer in the modern technology platform and information security Promotion of brand value, maintenance of leading position
with international standards. Sacombank has constantly improved service quality and brought the highest satisfaction for customers,
thereby promoting the brand value of a leading bank in the financial market.
Sacombank has promoted digital banking activities and up-to-date IT advance technology applications and
platforms, ensuring international security standards.

The first bank in Vietnam to launch JCB Ultimate card,

aside from others such as Visa Infinite, Mastercard
World; 01
1 of the first 7 banks in Vietnam to issue domestic
01 EMV chip card;

The first and only bank to develop standard QR code

for: Visa, Mastercard. JCB, Union Pay and Napas; 02
Maintained PCI-DSS certification for 6 consecutive
02 years;

The first and sole bank up to carry out Visa Direct

service; 03
Successful upgraded of the core banking system T24
03 from version R11 to the latest R17 version;

The first bank to deploy SamsungPay with domestic

Napas card; 04
Deployed the Loan Origination System (LOS) to digitize and
04 automate lending process, from document preparation to
appraisal and disbursement;
The first bank in Vietnam to launch contactless chip
card according to Visa’s international standards; 05
Promoted Customer Relationship Management

05 system (CRM) to optimize management and customer

service activities, etc.;
The first bank to complete ahead of schedule set by the
SBV regarding devices accepting domestic chip card; 06

Continuous implemented anti-fraud solutions in online

transactions, improved security authentication – especially the The pioneer bank to sign deal with Alliex Vietnam
06 most advance digital biometric authentication solutions. to deploy shared POS infrastructure to promote
cashless payment in Vietnam; 07

68 69
BUSINESS PERFORMANCE IN 2019

Practical companion with corporate community and economic sectors To Sacombank, success is not a
destination but a journey with
Sacombank believes that sustainable development will contribute practical values to the society. Therefore,
besides annual activities, Sacombank has always engaged with the corporate community and other economic
memorable milestones marking
sectors in the market to strengthen cooperation and development. the Bank’s significant efforts.
Therefore, Sacombank always
commits to maximize benefits for
customers, contributing to enhance
Sacombank’s value.
Sponsored game shows “The Smart Money, The Clever Money”,
“Wise Money” organized by the SBV to raise public awareness
01 of finance and banking;

Cooperated with “For a beautiful life” fund of Dai-ichi Life

Insurance Vietnam to install 16 clean water filters in 8 schools in
disadvantaged areas lacking of clean water, regularly providing
clean water for over 3,000 students; 02

Regularly communicated, provided guidance in safe and secure

card use, personal information nondisclosure and updated
03 fraud warning;

Extensively collaborated with other financial institutions,

industry associations to rapidly meet specific financial
demand of corporates; 04

Signed Memorandum of cooperation with Vietnam Textile and

05 Apparel Association;

Participated in the bank-to-corporate networking program

and market stabilization program for consecutive 8 years. 06

70 71
BUSINESS PERFORMANCE IN 2019

DEVELOPMENT ORIENTATION IN 2020 SWOT ANALYSIS

AND VISION FOR 2025

Medium and long-term goals: STRENGTHS WEAKNESSES

RANKED IN TOP 10 COMMERCIAL BANKS IN VIETNAM •• Streamlined business structure is well •• Financial structure is subjected to Restructuring
integrated by young and professional Plan;
employees;
•• Post merger-related issues affect Earning
•• Advanced IT platform for operational assets.
security;

EXPECTED FINANCIAL INDICATORS Variable regulatory document system and

••

risk management process;

DURING 2020 - 2025 •• Products and services undergo risk

assessment using technology instruments.
•• Branching network and a large number of
customers.
Customer Customer Service Profit before
Total assets
deposits loans revenue tax

OPPORTUNITIES THREATS
927,000 859,000 681,000 6,200 12,500
VND billion VND billion VND billion VND billion VND billion •• Banks are exposed to revolutionary •• The global economy is disrupted by
12%/year 13%/year 15%/year 13%/year 26%/year products and services when Vietnam is macroeconomic headwinds and Vietnam must
more and more engaging in the global remain economic growth given continued
financial market. uncertainty.

NPLs ratio < 3% •• SBV is regulating operational practices so •• Subject to FTA, Vietnam will lift entry barrier in
that local banks can meet the international banking sector to welcome any international
Compliance with prudential ratios set out in SBV’s regulations standards. bank with open arm. The competition is
increasingly fierce;
•• Banks are challenged by the new customer
demography including mix of generations, •• Consumer demand become more challenging
incomes, and needs… for banking service in terms of product features
and service quality.
Business environment evaluation
•• The Bank must strongly focus on restructuring
asset portfolio, maximizing revenues from non-
After undergoing stage of scaling up, the banking sector entered restructuring progress, consolidating the
credit activities given the fairly competitive
credit institutions will be prioritized and credit growth, thus is expected to be at 14-15%/year.
market.
Decision No. 1058/QD-TTg dated 19 July 2017 approved by PM on approving scheme for “Restructuring
system of Credit Institutions associated with settlement of bad debts in the period of 2016-2020”. The next
phase will intensify restructuring all financial institutions. To serve this purpose, rather than obtaining
significant credit growth, banking authority was managing ecosystem to shift toward healthy financial status.

72 73
BUSINESS PERFORMANCE IN 2019

BUSINESS PLAN IN 2020

BREAKTHROUGH THINKING - VALUE ENHANCEMENT

Development-oriented perspective in 2020

The economy will suffer uncertainties in view of unfolding coronavirus
infections COVID-19. Vietnam’s economy is also exposed to adverse impacts.
Proactive guidelines by the Government are expected to minimize the economic ANCHORING ON STRENGTH OF
disruption. EXPANDING ENHANCING
TECHNOLOGY – HUMAN
BUSINESS SACOMBANK’S VALUE
Following up the guidelines of the authority and the goals of the Restructuring RESOURCES
Plan, Sacombank’s general orientation for 2020 is: BREAKTHROUGH THINKING
- VALUE ENHANCEMENT, covering the following key goals:
Optimizing operations and
Increasing market share
financial indicators.

FINANCE
IMPROVING
PROMOTING THE OVERDUE
PRODUCTIVITY AND
DEBTS, NPLs RECOVERY
PERFORMANCE
1 Increase market share in Deposits & Loans, by 10 -11%; PROGRESS

Improve structure of fundings and portfolio - Increase financial position;

2 Gaining
Expanding Introducing
Modern and
CUSTOMER BASE

CUSTOMER
Customer
COMPREHENSIVE
Promote the progress of overdue debts, NPLs recovery; ensure NPLs ratio SATISFACTION
3
products and
below 3%; services

4 Expand retail and SME customer base;

Improving Launching
5 Deliver modern and customized products and services; Increase the share

INTERNAL
PROCESS
of revenue from services by at least 10%; EFFICIENCY VISIONARY Marketing Campaign

6 Increase customers’ satisfaction; develop in-depth customer database to

facilitate business decision;
Improving quality of
CUSTOMER DATABASE

7 Invest in media communication, branding and digital marketing;

DEVELOPMENT
LEARNING &
8 Utilizing the existing branch network; Improving quality of Human Resources
Engaging advanced technology in
DYNAMICS – CREATIVENESS –
BUSINESS – GOVERNANCE
CONNECTION

9 Improve productivity and business performance.

74 75
BUSINESS PERFORMANCE IN 2019

BUSINESS PLAN IN 2020

(continued)

Key solutions

Anchoring on strength of technology - human resources Enhancing of value

•• Promoting technology applications: Deploying technology projects to increase •• Scaling up the business – Gaining market share: increasing deposits, promoting
efficiency and safety; effectively engaging features of CRM, LOS in new platform of CASA VND; managing lending activities along with appropriate disbursement
Corebanking R17; enhancing system security in all activities. to keep prudent capital adequacy ratio at all time; developing product solutions,
particularly cashless payment, and bancassurance; improving productivity across
•• Building the upskill human resources with “Dynamics - Creativeness - Connection”: employees.
providing professional working environment, and transparent promotion policies; reviewing
performance-based salary mechanism; increasing the number of in-branch sales force; •• Increasing operational efficiency and financial position: restructuring fundings
increasing sentiment index of employees; maximizing the creativeness, responsibility, – portfolio, managing CAR ratio in compliance with Circular No. 41; intensifying
unity of Sacombank - “Development – Professionalism – Dynamics”. control of overdue debts and collection of NPLs as well as legacy assets; significantly
improving profitability, managing costs associated with efficiency.
•• Selective asset investment: emphasizing on core technology advancement to
serve for the purpose of product development, thereby maintaining market position.

Expanding business

•• Strengthening customer database: standardizing customer database, complying

with storage and confidential regulations of customer and bank information; continuing
to streamline regulatory documents.
•• Investing in media communication, branding and digital marketing.
•• Exploiting network, increasing coordination across franchising network. Re-adjustment
to any underperformed franchise; establishing new transaction offices, relocating to
promote business efficiency. Thoroughly restructuring apparatuses of subsidiaries/
subsidiary banks.
•• Improving corporate governance pursuant to international standards; upholding and
controlling the mechanism through the whole business from Head Office to franchising
network, ensuring the benefits of stakeholders.
•• Modernizing products: modernizing products and services, promoting digital banking,
facilitating connection among Sales team, completing digitization of all core products and
services processes.
•• Expanding customer base: increasing users of Sacombank Pay, POS, QR code, etc. In
addition, marketing bancassurance to depositors as well as enhancing service quality by
decreasing hassle customer experience.

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CORPORATE GOVERNANCE REPORT

Break out
CHALLENGES
CORPORATE GOVERNANCE REPORT

GOVERNANCE ACTIVITIES OVERVIEW

Board of Directors (BOD) is the representative of Sacombank

to make decisions, perform rights and obligations, except
for the matters under the authority of the AGM.

Shaping objectives and policies Deploying personnel and

on developing and building a developing human capital;
legal framework;

GOVERNANCE The principles of governance practices in Sacombank

FUNCTIONS
1 Ensuring compliance with the laws, regulations and internal rules.

2 Prioritizing protecting and increasing legal benefits for shareholders and the Bank.

Steering the Bank to complete Inspecting, and monitoring 3 Ensuring transparency in all activities of the BOD and the Bank.
objectives and action plans; compliance of regulation,
policies, and guidelines.
4 Ensuring the autonomy and responsibility of the BOD and governance of the Bank in
line with resolutions of AGM.

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CORPORATE GOVERNANCE REPORT

BOD REPORT

Report on implementation of the annual AGM’s Resolution in 2019

Implementing profit distribution plan for fiscal year 2019 Updating Business License and Corporate registration

Completed profit distribution plan for fiscal year 2019 set out in AGM. The Board of Directors updated Business License and contents of Sacombank’s corporate registration in
2019.

Implementing business plan approved by the AGM for fiscal year 2019
Revising Sacombank’s Charter
As of 31 December 2019, Sacombank’s total assets was VND 453,581 billion (99.6% of the plan); total •• The Board of Directors completed the charter according to contents approved by the AGM.
deposits was VND 414,185 billion (97.8% of the plan), total credit balance was VND 296,457 billion, within
the SBV’s approved limit, NLPs ratio of 1.9%, profit before tax was VND 3,217 billion (121.4% of the plan). •• On 10 May 2019, the BOD sent in to the SBV the charter applied Article No. 31 of the Laws on Credit
Prudential ratios met the SBV’s standards.
Institutions in 2010, amended in 2017.

Implementing equity utilization plan and investment activities in 2019 Amending regulations on governance and operation

As of 31 December 2019, Sacombank’s equity was VND 26,742 billion (101.7% of the plan), of which: (i) •• The Board of Directors completed the regulations on governance and operation according to the plan
Charter capital was VND 18,852 billion (100% of the plan); (ii) Surplus of charter capital and treasury approved by the AGM;
share was VND -687 billion (100% of the plan); (iii) Reserves was VND 2,964 billion (100.1% of the plan);
(iv) Undistributed profits was VND 5,412 billion (107.4% of the plan); (v) Exchange rate differences was VND •• On 26 April 2019, Chairman of BOD issued regulations on governance and operation approved by the
200 billion. AGM.

Equity was invested in: (i) fixed-assets of VND 681 billion (85.3% of the plan), (ii) business activities of VND Amending regulations on organization and operation of BOS
16,567 billion (103.6% of the plan).
Chief Supervisor issued regulations on BOS’s organization and operation on behalf of the AGM issued on 26
Capital injection for Cambodia subsidiary was VND 861 billion (100% of the plan). April 2019.

Remunerations for BOD and BOS in 2019

Members of BOD and BOS executed their responsibility in governing and supervising the restructuring
progress. Remuneration for BOD and BOS was approved by the AGM (2% of consolidated profit before tax in
fiscal year 2019).

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CORPORATE GOVERNANCE REPORT

BOD REPORT (continued)

Assessment of BOD’s performance BOD’S assessment of the bank’s activities

In 2019, BOD held 09 meetings, sent out 106 requests for shareholder
opinions on policies, regulations, resolutions, decisions, etc. to drive 106 2019 was a challenging year for Sacombank as well
as global economy with trade tension, disrupted local
the sustainability, fulfillment and compliance.
requests for industry. Against this backdrop, sustainability business
review increasingly focused to ensure restructuring
In total, BOD issued 267 resolutions and decisions regarding internal shareholder opinions progress on agenda.
protocols, credit issuance, debt settlement, network and other

267
governance practices accordingly. BOD kept all Sacombank’s activities in check in
order to deliver positive outcomes. The Bank has
successfully completed the targets assigned by AGM
which contributed to reduce restructuring agenda to
resolutions and decisions 05 years instead of 10.
regarding internal protocols, credit
issuance, debt settlement, network
and other governance practices During its operation, Sacombank always receive
support from the SBV and regulatory authorities.

BOD’S assessment of BOS’S performance

BOD highly appreciated the performance of BOS in 2019 who had completed their duties with sense of
responsibility in appraising the Bank’s financial statements, supervising the administration, management
and internal control system in line with SBV’s regulations.

BOD’S assessment on BOM’S performance

BOD highly appreciated and recognized the efforts of BOM in term of the adherence to the Plan, handling bad
debts, recovering legacy assets as well as the enhancement of asset quality. These activities drove profit of
the Bank and spurred the completion of the Restructuring Plan. Unity, responsibility, and determination are
at be the heart of Sacombank movement.

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CORPORATE GOVERNANCE REPORT

BOD REPORT (continued)

Activities of Sub-Committees under BOD

BOD established Risk Management Committee, Human Resource Committee and other Sub-committees
in accordance with the laws.

In 2019, the Committees fulfilled their advisory duties to BOD to ensure compliance with the laws, and
Sacombank’s regulations; timely supported BOM in business operations as well as risk management.

The Committees abided by regulations to ensure transparency. In addition, the Committees reviewed
and completed the regulatory documents within their authorities to ensure the separation between the
governance and supervisory functions of BOD and business management functions of BOM.

BOARD OF DIRECTORS

BOD’s goals and strategies for Sacombank in 2020

The BOD’s strategies in 2020 - “Breakthrough thinking - Value enhancement” – aim towards accelerating
the restructuring progress with the fundamental principle of “Transparency - Sustainability – Moving
Forward” to create benefits for Stakeholders and Society, with 06 goals: HUMAN RESOURCE RISK MANAGEMENT
COMMITTEE COMMITTEE

Increasing business efficiency, Recovering non-performing Accelerating the restructuring

expanding scale and market loans and closely controlling progress to maximize values for
share, improving financial credit quality. stakeholders.
indicators.

Pioneering advanced Improving customer Streamlining organizational

information technology and experiences. Supporting structure, increasing personnel
security platforms. enterprises and customers. proficient level and improving
workplace environment.

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CORPORATE GOVERNANCE REPORT

BOD REPORT (continued)

Functions and duties of Committees

Risk Management Committee Human Resource Committee

•• Identify and monitor exposure limits in •• Review the performance of Sacombank’s
accordance with the Bank’s risk appetite; executives throughout their terms to advise the
BOD on issues related to the human resource;
•• Review BOM and BOS’s recommendations
on risk management; •• Advising the BOD on personnel of BOD’s
and BOM according to operation scale and
•• Analyze and issue report of the Bank’s development strategies;
potential risks and take precautions against
short- and long-term risks; •• Advising on procedure of election, appointment,
dismissal of BOD’s, BOS’s members and Senior
•• Review, assess the effectiveness of the executives in line with regulations and the
Bank’s current risk management policies Bank’s charter;
and processes; provide recommendations
and proposals for changes to the BOD, •• Advising on issuing internal regulations related
thereby risk management is effectively to salary, remuneration, bonus, recruitment,
enforced. training and benefits for Senior executives and
employees.
•• Approve investments and related
transactions, policies and risk management •• Reviewing and advising BOD on appointment,
methods within duties re-appointment of Sacombank’s Senior
executives, Managers of subsidiaries based on
•• Monitor, supervise the timeline of the recommendations from Sacombank’s CEO and/
Restructuring Plan and transition plans, or Chairmen of subsidiaries.
including Basel II, to improve the Bank’s
risk managing capabilities.

Members

Mr. Pham Van Phong Chairman Members

Ms. Le Thi Hoa Vice Chairwoman Mr. Duong Cong Minh Chairman

Deputy CEO cum Director of Risk Management Division Member Ms. Nguyen Duc Thach Diem Vice Chairwoman

Head of Internal Audit Member Mr. Nguyen Van Huynh Member

Head of Internal Inspection Department Member Mr. Nguyen Xuan Vu Member

Head of Legal Department Member Deputy CEO responsible for Human Resource Management Division Member

Director of Risk Management Center Member cum Secretary Director of Human Resources Department Secretary

88 89
CORPORATE GOVERNANCE REPORT

BOARD OF SUPERVISORS REPORT

BOS’s performance
In 2019, the BOS organized 10 meetings, including: 05 periodic meetings and 05 meetings under the form Results of BOS periodic meetings
of collecting written opinions from BOS members, with participation of all BOS members to discuss and
unanimously vote on matters within BOS ‘s duties.

Date Main takeaways

}} Reviewed Sacombank’s performance and key figures in the financial statements

15/01/2019 as of 31 December 2018
}} Planned internal audit activities in 2019.

}} Reviewed, evaluated internal audit activities of the first quarter of 2019 and
implemented internal audit plan of the second quarter of 2019.
Approved the Report of BOS’s performance in the Shareholders’ Annual
09/04/2019
}}

General Meeting in 2018.

}} Approved the amended BOS’s organization and operation regulations,
submitted to the AGM for approval.

Member of BOS’s meeting participation rate in 2019 26/06/2019

}} Reviewed internal audit activities in the first 06 months of 2019 and planned
internal audit activities in the second 06 months of 2019.

Number
BOS member Reviewed KPMG’s report on upgrading internal audit framework project.
of BOS Participation
}}

No. BOS member Position commencement Appointed BOS’s representative to participate in the recognition committee
meeting’s rate 11/09/2019
date as
}}

participated of senior auditor.

Chief }} Reviewed the appointment of internal audit team’s manager.
1 Mr. Tran Minh Triet Supervisor 30/06/2017 10 100%
(Full-time)
}} Approved independent audit firm to perform financial statements and operation
BOS member 19/11/2019 of internal control system for fiscal year 2020.
2 Ms. Nguyen Thi Thanh Mai 02/04/2011 10 100%
(Full-time)
}} Approved internal auditing plan for 2020.
BOS member
3 Mr. Ha Ton Trung Hanh 30/06/2017 10 100%
(Full-time)
BOS member
4 Mr. Le Van Tong 04/2006 10 100%
(Part-time)

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CORPORATE GOVERNANCE REPORT

BOARD OF SUPERVISORS REPORT (continued)

Assessment of BOS’s performance Assessment of Internal Audit Department

Important activities Results In 2019, Internal audit department fully completed The BOS annually reviews internal regulations,
duties and audit plan as approved by the BOS, as revises and amends internal documents of BOS and
In 2019, the BOS completed their duties in •• The BOS’s assessment of the BOD, BOM: follows: internal audit department that in line with the SBV’s
accordance with regulations on credit institutions, regulations. In 2019, the BOS issued the process on
charter, BOS’s regulations and operation with the €€ The BOD has fulfilled management duties •• Completing direct audit activities at 19 internal audit (Decision No. 01/2019/QĐ-BKS dated
following highlights: by fully and timely implementing the SBV’s branches; 01 Banking Operation Unit (Card 11 January 2019), regulations of BOS’s organization
guidelines and AGM’s resolution; issued Center); 01 seminar on anti-money laundering and operation, under the authorization of the AGM
•• Monitored compliance with the laws, Sacombank resolutions, decisions, directions, to lead, at Head Office; 03 seminars on IT at Head Office (Decision No. 02/2019/QĐ-ĐHĐCĐ dated 26 April
charter on governance, management and guide, and support the BOM on managing the (regarding IT infrastructure, IT applications, 2019), process on remote monitoring (Decision No.
implementation of the AGM’s resolution; Bank, as well as closely coordinated with the card core - Sacombank Pay); 01 seminar on IT in 10/2019/QĐ-BKS dated 20 May 2019).
monitored implementation of the Restructuring BOS in supervising the Bank, subsidiaries and Sacombank-SBR and audit 02 subsidiary banks
Plan as approved by the SBV. subsidiary banks’ operations. (Sacombank Laos and Sacombank Cambodia
Plc).
•• Guided and monitored internal audit activities €€ The BOM has completed duties, implemented
according to the Circular No. 13/2018/TT-NHNN business plan, made great efforts, caught up •• In view of legal compliance, business efficiency,
dated 18 May 2018. with market trends, resolutions of the BOD, and minimize risks and operational safety, Internal
closely followed business plan and achieved audit department gave out recommendations in
•• Appraised financial statements for the first 06 profits before tax higher than the target assigned audit reports submitted to the BOD, BOS, BOM
months and the whole year of 2019 audited by by the AGM in 2019 . and related departments to modify action plans
Ernst & Young Vietnam Ltd. in respectively.
€€ Sacombank’s BOD, BOM followed the
•• Proposed the BOD to approve independent restructuring plan approved by the SBV. Solutions •• To timely detect and prevent potential risks,
audit firm to audit financial statements and to recover NPLs were well-implemented, internal audit department also remotely
Sacombank’s internal control system in 2020. brought great results, and contributed to monitors:
improving credit quality and gradually optimized Transactions in branches, and transaction
All BOS members completed the assigned asset portfolio.
€€
••
points;
duties. Chief Supervisor participated in all
BOD’s meetings, anti-money laundering •• Other BOS’s activities: The BOS led and €€ Some main information technology systems;
council meetings. Chief Supervisor and/or monitored internal audit team in accordance €€ Operations of subsidiaries/subsidiary banks
member of BOS participated in meetings of with the SBV’s regulations and Sacombank through monthly reports;
the Basel II project Committee, attended some internal regulations.
meetings/conferences held by the executive €€ Implementation of banking supervision agency’s
board to review business performance and recommendations;
make recommendations to improve the Bank’s
performance and security. In 2019, internal audit department developed 09
additional remote monitoring criteria, increasing
•• The BOS coordinated with the BOD, BOM the total number of monitoring criteria to 35.
to perform duties and supervising goals as
assigned. On 10 May 2019, Sacombank’s BOS officially
launched “Upgrading internal audit framework”
project in collaboration with KPMG Vietnam, which
was not only in line with Circular No. 13/2018/TT-
NHNN but Basel II standards and satisfy internal
audit standards of the International Internal
Auditing Association (IIA) and COSO Internal Control
Framework as well.

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CORPORATE GOVERNANCE REPORT

RIGHTS AND OBLIGATIONS OF SHAREHOLDERS

Rights of shareholders: As prescribed in article 25 – Sacombank’s Charter

(please visit: https://www.sacombank.com.vn)

Shareholder Engagement:
•• On 26 April 2019, the AGM FY2018 was held at White Palace Convention Center (194
Hoang Van Thu, Ward 9, Phu Nhuan District, HCMC).
•• On 26 June 2019, the Annual Shareholder Appreciation Gala Dinner was held in honor
of Sacombank’s loyal shareholders.

Shares trading of internal shareholders (BOD, BOS, BOM and major

shareholders)

Number
Internal shareholders Registration Result Number
Trader Relationship of
Stock of shares
(organization/ with internal shares Proportion Notes
code Current after
individual) shareholders Full name before Buy Sell Start date End date Buy Sell Trade date
position trade
trade

STB Ms. Tran Thi Xuan Wife Mr. Phan Quoc Huynh Deputy CEO 20,000 20,000 09/10/2019 0.00

STB Ms. Tran Thi Xuan Wife Mr. Phan Quoc Huynh Deputy CEO 0 20,000 12/09/2019 12/09/2019 20,000 12/09/2019 20,000 0.00

Independent
Lien Viet Securities
STB Mr. Nguyen Van Huynh Member of 2,456,000 544,000 04/09/2019 03/10/2019 544,000 17/09/2019 3,000,000 0.17
JSC. BOD

Lien Viet Securities

STB 456,000 2,000,000 27/05/2019 25/06/2019 2,000,000 07/06/2019 2,456,000 0.14
JSC.

Lien Viet Securities

STB 190,000 1,800,000 04/03/2019 02/04/2019 266,000 02/04/2019 456,000 0.03
JSC.

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CORPORATE GOVERNANCE REPORT

SHAREHOLDERS STRUCTURE CORPORATE GOVERNANCE

Percentage
Current position at
No. Full name of common Notes
Sacombank
share (%)
Majority shareholders: 0 shareholders Domestic shareholders: 67,142 shareholders
BOARD OF DIRECTORS
Minority shareholders: 67,999 shareholders Foreign shareholders: 857 shareholders
1 Mr. Duong Cong Minh Chairman of BOD 3.31
2 Mr. Pham Van Phong Standing Vice Chairman of BOD 0.001
3 Mr. Nguyen Mien Tuan Vice Chairman of BOD 0.01
4 Mr. Nguyen Xuan Vu Member of BOD 0.00004
Individuals: 67,695 shareholders State-owned shareholders: 3 shareholders
5 Ms. Nguyen Duc Thach Diem Member of BOD cum CEO 0.004
Organizations: 304 shareholders Other shareholders: 67,996 shareholders
6 Ms. Le Thi Hoa Independent member of BOD 0.000 1 share
7 Mr. Nguyen Van Huynh Independent member of BOD 0
BOARD OF SUPERVISORS
Owner’s equity: VND26,742 billion (as at 31 December 2019) 8 Mr. Tran Minh Triet Chief Supervisor 0
9 Mr. Le Van Tong BOS Member 0.056
Treasury shares: none
10 Ms. Nguyen Thi Thanh Mai BOS Member 0.014
11 Mr. Ha Ton Trung Hanh BOS Member 0
BOARD OF MANAGEMENT
12 Mr. Phan Dinh Tue Deputy CEO 0.0076
13 Mr. Ha Van Trung Deputy CEO 0.00053
14 Mr. Nguyen Minh Tam Deputy CEO 0.0007
15 Ms. Quach Thanh Ngoc Thuy Deputy CEO 0.000005
16 Mr. Le Duc Thinh Deputy CEO 0
17 Mr. Le Van Ron Deputy CEO 0
18 Mr. Dao Nguyen Vu Deputy CEO 0.0027
19 Mr. Nguyen Ba Tri Deputy CEO 0.000 7 shares
20 Ms. Ha Quynh Anh Deputy CEO 0.0003
21 Mr. Hoang Thanh Hai Deputy CEO 0.004
22 Mr. Vo Anh Nhue Deputy CEO 0.000 3 shares
23 Mr. Ho Doan Cuong Deputy CEO 0.00038
24 Mr. Bui Van Dung Deputy CEO 0.0074
25 Mr. Phan Quoc Huynh Deputy CEO 0
26 Mr. Huynh Thanh Giang Chief Accountant 0.0026

In 2019, BOD, BOS, BOM and Chief Accountant did not have any STB stock transaction.

96 97
 SUSTAINABLE DEVELOPMENT REPORT

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SUSTAINABLE DEVELOPMENT REPORT

SUSTAINABLE DEVELOPMENT REPORT 2019

In accordance with Global Reporting Initiative (GRI)
sustainability reporting standards

INTRODUCTION OVERVIEW

I T
n Vietnam, sustainable development has always been his report provides a snapshot of Sacombank’s
a part of the 2011-2020 Socioeconomic Development sustainable development during 2019. In this
Strategy and the 2016-2020 Socioeconomic report, Sacombank depicts the assessment on
Development Plan, being applied to all sectors including: socioeconomic development and environmental protection
National Strategy for climate change, National Strategy for aspects embedded in operation and strategies.
green growth and National Target Program on sustainable
poverty reduction in the 2016 – 2020 period. •• Reporting scope

In promoting economic growth, environment protection The report included performance indicators of
and community development, Sacombank has chosen to Sacombank and subsidiaries/subsidiary banks.
focus on its mission – to be a force for good by pioneering
movements supporting social enterprises.
•• Reporting period
From 01 January 2019 to 31 December 2019

•• Reporting standards
The report adhered to the GRI Sustainability Reporting
Standards with 04 main components:

- GRI 101: Foundation Standards.

- GRI 200: Economic Standards.

- GRI 300: Environmental Standards.

- GRI 400: Social Standards.

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SUSTAINABLE DEVELOPMENT REPORT

SACOMBANK’S SUSTAINABLE
DEVELOPMENT CONTEXT

The 2030 Agenda for global sustainable development From practical operation and through referring GRI standards to global sustainable development goals
(SDGs), Sacombank has identified the following critical objectives:
outlined a comprehensive plan for peace and
prosperity of people and the whole planet at present SDGs INTERCONNECTION GRI STANDARDS - REPORTING OUTLINE
and in the future. DECENT WORK AND
ECONOMIC GROWTH

GRI 201: Economic performance

In 2019, there was an acceleration in the SUSTAINABLE CITIES
AND COMMUNITIES

GRI 202: Market presence

implementation of 17 global sustainable development RESPONSIBLE
CONSUMPTION
GRI 203: Indirect economic impacts
goals (SDGs) in Vietnam.
AND PRODUCTION

On 22 January 2019, the Minister of Planning and

Investment issued Circular No. 03/2019/TT-BKHĐT AFFORDABLE AND
CLEAN ENERGY
CLIMATE
ACTION
GRI 302: Energy
stipulating the set of 158 sustainable development GRI 307: Environmental compliance
statistical indicators of Vietnam, orienting that
sustainable development is a balanced combination GOOD HEALTH
AND WELL-BEING
QUALITY
EDUCATION GRI 401: Employment
of 3 major issues: Economy, Society and Environment. GRI 403: Occupational health and safety
These three issues have been handled in a commitment GRI 404: Training and education
framework covering five dimensions: People, Planet, GENDER
EQUALITY
PEACE, JUSTICE
AND STRONG
INSTITUTIONS GRI 405: Diversity and equal opportunity
Prosperity, Peace and Partnership following the GRI 413: Local communities
principle “NO ONE IS LEFT BEHIND”.

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SUSTAINABLE DEVELOPMENT REPORT

BREAKTHROUGH THINKING THROUGH STRATEGIC

SUSTAINABLE DEVELOPMENT VISION AND
SPECIFIC ACTIONS

BREAKTHROUGH Exploitation of technology and human resources

THINKING IN 2020 •• Leveraging technology and constantly updating modern trends;
•• Improving human resources quality in the Dynamism – Creativity – Connection orientation:

With the “All. Ahead” Dynamism – proactive interdivisional coordination in customer services, Creativity – timely update
of market trends and customer demands, Connection – cohesion promotion between employees
and enhanced readiness for change.
orientation, Sacombank will
Breakthrough in business
BREAK THROUGH MINDSET to •• At the heart of “Customers centricity”, Sacombank has focused on customer data’s expansion and
shape the present and ENHANCE quality improvement through researching customer behavior and catching up with the latest consumer
trends. We have modernized products and services coupled with comprehensive multi-utility ecosystem

THE VALUE to master the future and thoroughly streamlined processes and internal document to ensure security and improve customer
satisfaction. Sacombank has also invested in marketing communication and branding to build successfully
a loyal and sustainably growing customer base.
in 2020. Technology and Human
Enhance the value
Resources are two main fields •• By leveraging current technology and human resources, Sacombank will scale up operation, increase
innovated continuously to create market share and improve productivity of every transaction point, every employee. We optimize business
performance and financial indicators in terms of safety, prudence, strong profitability and effective

breakthroughs in business, expense management. Sacombank also aggressively handles NPLs and problem assets, improve
portfolio quality, capital and safety indicators. These will strengthen Sacombank’s leading position as a
modern, dynamic and prestigious bank.
hence enhance values.

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SUSTAINABLE DEVELOPMENT REPORT

OPPORTUNITIES AND CHALLENGES

OPPORTUNITIES CHALLENGES
•• Vietnamese economy is expected to maintain •• Customers have become more demanding high •• Given the openness of the economy, with •• To meet increasingly tightened safety and
a stable growth in the medium and long term. quality and high-tech products and services. import and export of up to 150% GDP, Vietnam soundness standards, banks will have to balance
Foreign capital inflows to Vietnam has increased Understanding this, Sacombank has invested is inevitably influenced by the global economic between growth, efficiency and safety. Profits of
considerably. Sacombank shall take advantage heavily in technology infrastructures, especially and international trade downturn. Banking banking sector and Sacombank will be affected
of this opportunity to expand the business, high-tech products and services to win the race sector and Sacombank have to face difficulties in the short term. Given that context, Sacombank
market share and attract foreign investments. for market share. arising from. has proactively completed technical models to
meet safety standards and minimize short-term
•• Given the macroeconomic stability and domestic •• The higher level of competitive fairness of risks, enhancing operational efficiency.
income increase, Sacombank will be able to industry drove Sacombank’s financial health
boost retail banking, optimizing this potential. and service quality.

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SUSTAINABLE DEVELOPMENT REPORT

SUSTAINABLE DEVELOPMENT IN GOVERNANCE

Principles and core values in governance Roles and responsibilities of BOD, BOS and BOM in Sacombank’s
sustainable development
Sustainable governance model
Sacombank’s sustainable governance model is centrally organized where Roles and responsibilities of BOD
authority and obligation are distributed vertically from AGM, Board of
Directors (BOD), Board of Supervisors (BOS), Board of Management (BOM), BOD plays a central role in the constitution of management framework, strategic orientation and sustainable
Directors/Heads of Headquarters Center/Department/Office, Branch development plan. BOD is also responsible for risk management, executive apparatus oversight and
Director, Head of Transaction Office to employees. accountability to shareholders.

Sacombank’s governance principles Roles and responsibilities of BOS

•• Ensuring compliance with laws, Bank’s charter and internal BOS has the function of supervising the laws, Sacombank’s Charter and the AGM resolution/decision
regulations. compliance in the Bank’s management and administration, particularly in risk management, internal
control and internal audit. BOS is also responsible to AGM about their performance of assigned tasks and
•• Ensuring publicity and transparency in all activities of BOD and the
authorities.
Bank.
•• Ensuring action principle’s ultimate purpose is to protect and increase Roles and responsibilities of BOM
legitimate interests for shareholders and the Bank.
BOM performs the role of counselling, managing, and implementing directions of BOD and Committees
•• Engaging in the society and community development. regarding sustainable development plan within their assigned authorities and duties.

Sacombank’s core values of governance

Roles and responsibilities of Committees under BOD Sacombank’s
•• Pioneering and overcoming challenges towards success;
sustainable development strategy
•• Providing innovative approaches for sustainable development;
•• Commitment professional demeanor displayed by each employee. The Human Resources Committee takes the main responsibility for supporting BOD in implementing
Sacombank’s sustainable development strategies. Of which:
•• Breakthrough innovations in business and governance;
•• Advising the BOD’s size and structure fitting operational scale and sustainable development strategies;
•• Connecting to community and social responsibility.
•• Advising the BOD on handling human resource matters in the election, appointment and dismissal of
BOD, BOM and BOS’s members in accordance with Bank’s regulations and laws;
•• Researching and advising the BOD on the issuance of internal regulations in terms of salary, remuneration,
bonus, recruitment regulations, training and other policies for BOM and employees.

Remuneration policy for members of BOD, BOS, and BOM

•• BOD and BOS remuneration has complied with AGM’s Resolution No. 01/2019/NQ-ĐHĐCĐ dated 26
April 2019.
•• BOM remuneration has complied with the Bank’s regulation on salary regime.

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SUSTAINABLE DEVELOPMENT REPORT

INTERNAL AUDIT AND INTERNAL CONTROL IN

CONNECTION WITH SUSTAINABLE DEVELOPMENT
Roles and responsibilities Internal Audit method

•• Reviewing and evaluating independently and objectively executive management, internal control, risk Sacombank’s internal audit applies risk-based approach, prioritizing audit of material or high-risk activities,
management; Assessing capital sufficiency; Evaluating independently the bank’s compliance with procedures and units.
internal regulations, policies and procedures;
•• Making recommendations to improve the efficiency of systems, processes and regulations, ensuring
safe, efficient and lawful operation.

Principles of operation
PLANNING

Risk analysis and

Risk profiles building Risk analysis result
INDEPENDENT OBJECTIVE PROFESSIONAL evaluation

Internal auditors must:

•• Free from undue influence of personnel at these positions; Performance measures
•• Demonstrate integrity, objectivity, accountability, prudency and professional care;
•• Possess sufficient and adequate technical knowledge and skills, especially for IT Internal auditors.

DIRECT AUDIT REMOTE MONITORING

Internal audit department, under the directions The internal audit plan, approved by BOS, is revised
of BOD and BOS, develops annual internal audit in accordance with changes in the Bank’s activities
plan based on risk evaluation results. and associated risks.

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 SUSTAINABLE DEVELOPMENT REPORT

INTERNAL AUDIT AND INTERNAL CONTROL IN

CONNECTION WITH SUSTAINABLE DEVELOPMENT
(continued)
Lines of defense Internal Audit Process
Internal audit (IA), organized into smaller IA teams and under the management and supervision of BOS, is
the third line of defense. INTERNAL AUDIT PROCESS

Business Departments; Departments

that generate other revenues; Establish audit Follow up
Set up annual Conduct audit
THE FIRST LINE Departments that is responsible for team and detailed suggestions for
1
internal audit plan
making risk-bearing decisions; outline revision
Identifying, controlling
and mitigating risks.
Departments with the function of risk
limit allocation, risk management and
mitigation in each type of transaction Build risk profile Assign personnel Implement Follow up revision
and business activity.
INTERNAL CONTROL SYSTEM

Human Resource Department,

Accounting Department Review internal audit
Approve Report the progress Revise
principles

Risk Management Center

THE SECOND LINE
2 Formulating risk management policy,
internal regulations, measuring and
Compliance Department Develop plan
Design outline and
form audit team
Prepare, summarize
and review report draft Review revision

monitoring risk in accordance with Laws.

Legal Department
Hold meeting to
Issue plan Approve Document filling
Security Center approve report

Internal Control and Travelling Directors

Issue decision Sign and issue report

Internal Audit

3
THE THIRD LINE •• IA Teams in charge of Regions Evaluate internal audit
Internal Audit •• IA Teams in charge of Banking Units, quality
Subsidiaries/Subsidiary Banks.
•• General IA Team.

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SUSTAINABLE DEVELOPMENT REPORT

RISK MANAGEMENT TOWARDS

SUSTAINABLE DEVELOPMENT

In 2019, Sacombank issued regulations on risk management in

pursuant to international practices as well as raised awareness
among stakeholders to ensure the sustainable growth of the Bank.

Green credit and the impact on the sustainable development of Managing risks in line with sustainable development
Sacombank Sacombank is always aware of the impact of financial services on the social environment, partners or
projects, thereby indirectly affecting the community and the environment.
Global climate change – critical and controversy topic for years, many countries now that picked up on green
Sacombank is taking the lead in building an environmental and social management system (ESMS). After a
and sustainability growth of economic.
decade of reviewing and implementing environmental and social policies, in 2019, Sacombank has completely
Recent authorized documents by the Prime Minister related to the transformation of Vietnam’s economy engaged the strategy of sustainable development risk management.
such Vietnam’s sustainable development strategy for 2011-2020; National action plan on green growth 2014
- 2020 etc. had spurred Sacombank to develop the internal environmental and social risk evaluation while
named Green credit as integral element of the Bank’s development strategy.

BOARD OF DIRECTORS
GOVERNMENT REGULATION Develop a sustainable development strategy for Sacombank, identify
ESMS risk appetite and approve the environmental & social policy.
The Directive No. 03/CT-NHNN on promoting Green credit growth and
environmental - social risks management in credit granting activities;

The Decision No. 1552/QD-NHNN dated on 6 August 2015 - Introducing BOARD OF MANAGEMENT
the action plan of the Banking sector for implementation of the National Approve the environmental and social impact assessment process.
strategy for Green growth by 2020.

The scheme for Green banking growth in Vietnam dated on 7 August 2018
approved by the SBV.
ESMS Team Legal department
Compose and supervise the deployment of Supplement customer’s
environmental and social policy; alert on medium/high environmental and social
OUTCOME environmental and social risk transactions; do reporting; commitments into Loan
agreement.
By the end of September 2019, total balance of Green projects
reached VND 310,600 billion, of which the medium and long-term First line of defense Second line of defense Third line of defense
loans accounted for 76% of Green credit loans. Relationship management Credit approval authorities Internal Audit
officers, Appraisal officer

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SUSTAINABLE DEVELOPMENT REPORT

IMPLEMENTING BASEL II
TO DEVELOP SUSTAINABLY

By the end of 2019, Sacombank completed a risk management framework in 2017/Q4 2018 - 2019
accordance with the direction of SBV and Basel II requirements.
Establishing the Basel II project Committee Accelerating the implementation of the key projects as
approved by the Resolution 167/2017/ follows:
Sacombank was well placed to apply Basel II NQ-HĐQT dated on 30 August 2017 on
standards and Circular 41 by agenda of the SBV (01
•• Completing risk data governance framework.
proposal of Basel II project based on the
January 2020). Governance mechanism (Circular actual situation of Sacombank. In detail, •• Credit Risk Modeling (CM).
13) and Basel II sub-project were synchronously Sacombank would deploy 35 projects from •• Loan Origination System (LOS).
implemented: Loan Originate System (LOS); Credit 2017 to 2019.
Risk Modeling (CM); risk data governance (DG) •• Completing the debt management and recovery system.
framework; Upgrading the framework of Assets •• Upgrading and completing the framework of Assets and
and Liabilities (ALM) management, enhancement
Liabilities (ALM) management.
of valuation model and establishment of required
capital charge calculation model for market risks; •• Enhancement of valuation model and establishment of
Building a centralized debt management and required capital charge calculation model for market
recovery system. risks.
•• Upgrading internal audit framework.

To achieve the above results, Sacombank took a series of actions: Sacombank applied advanced measures to reduce time-consuming
•• Deploying consultancy and solution components in the same project, typically: Completing Risk Data
Governance framework project; Credit Risk Modeling project.
•• Integrating small into one large project, typically:

}} The project “Credit Risk Modeling” was integrated from 4 projects: (1) Developing LGD and EAD
estimation model for individual customers, (2) Developing LGD and EAD estimation model for corporate
customers, (3) Developing PD, A - Card and B - Card models and (4) Re-inspecting and upgrading the
2014/Q4 2015/Q1 2015 - 2017 current Internal Credit Ranking System.

}} The project “Completing risk data governance framework” was integrated from 2 projects: (1) Completing
Completing the evaluation Completing the analysis of Research and implementation of the following the database framework and (2) Implementing RWA calculation solution.
of the difference between database status related to projects:
Sacombank’s current Basel II. The project “Enhancement of valuation model and establishment of required capital charge calculation
Improving internal credit appraisal system.
}}
••
position and Basel II (GAP model for market risks” was integrated from 3 projects: (1) Upgrading the valuation model and building
evaluation). Derive from •• Building a debt management system. SMM model, (2) Upgrading the VaR measurement and required capital model according to IMA and (3)
the evaluation results, Developing a test method for market risks.
•• Improving relevant regulatory documents.
Sacombank built a route
for Basel II implementation •• Engaging the 3-line of defense. •• Some of core projects were completely engaged such as:
from 2014 to 2018. Studying the capital calculation according to The project “Bank Risk control” is integrated: (1) Improving loss management tool and (2) Upgrading
••
}}

the Circular 41. operational risk management system.

}} The project “Completing the debt management and recovery system”.

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SUSTAINABLE DEVELOPMENT REPORT

SUSTAINABLE CORPORATE CULTURE STAKEHOLDERS

The initial objective of Sacombank hasn’t

changed over times - create the sustainable
stakeholders’ value.
THE CORE VALUE At the heart of relationship of Sacombank
OF SACOMBANK and stakeholders was on the faith,
transparency and commitment built
HUMAN through the ups and downs. The mutual
RESOURCES understanding was deeper by underlying
interaction from dialogues, feedback from
related parties.

Proper
Enthusiastic Professional
working Knowledge Creativity
attitude behavior
etiquette

High
Government Employees

Customers
The very first bank digitizing the working

Influence on Sacombank
environment with Microsoft teams
On 31 July 2019, Sacombank was the very first bank in Vietnam
to integrate the Microsoft Teams - the teamwork conversational
applications into working environment which contributed to improving Community Investors
productivity and effectiveness of employees.

WORKING
AGENDA
5,000
active Users Suppliers

100,000 120
Low

messages virtual meetings Low Dependence on Sacombank High

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SUSTAINABLE DEVELOPMENT REPORT

MAJOR STAKEHOLDERS KEY ISSUES

The sustainable development strategy was developed upon 3 principles: Economy

Incorporating with governmental - Environment - Society. These concerns were taken into consideration so that the
authorities, understanding the
expectations of the local.
expectation and the performance are aligned.
•• Participating in conferences
and seminars organized by
the Government, Ministries/ •• Consultancy specialist,
Committees/ Departments tellers directly work with
•• Dialoguing with State customers;
agencies, contributing to •• Customer care center and
regulations and policies hotline are available 24/7;
improvement •• Web-based customer
•• Joining organizations, service platform.
associations, economic Community
forums, etc.

Governmental
Agencies
Customers ECONOMY ENVIRONMENT

SACOMBANK

Suppliers Employees

•• Meeting •• Satisfaction survey;

•• Bidding Investors •• Sacombank Spirit
•• Commitment to service quality newsletter website;
and origin of goods. •• Training programs.

•• Shareholders’ Annual
General Meeting; SOCIETY
•• Meeting investors in person;
•• Sacombank Website;
•• Customer conference.

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SUSTAINABLE DEVELOPMENT REPORT

ECONOMIC STANDARDS

Economic performance TOTAL ASSETS OWNER’S EQUITY TOTAL REVENUE

The business strategy 2019 had yielded measurable Unit: VND billion Unit: VND billion Unit: VND billion
results in terms of market share, profit and

453,581 26,742 37,476

business scale.

11.7% 8.6% 19.2%

453,581 26,742 37,476
406,041 31,447
368,469 25,725
24,632

23,236

2017 2018 2019 2017 2018 2019 2017 2018 2019

DEPOSITS FROM ECONOMIC

ORGANIZATIONS AND
INDIVIDUALS CUSTOMER LOANS REVENUES FROM SERVICES PROFIT BEFORE TAX
Unit: VND billion Unit: VND billion Unit: VND billion Unit: VND billion

410,334 14.8% 296,030 15.4% 3,323 23.9% 3,217 43.2%

410,334 3,323 3,217
357,455 296,030 2,682
325,461 256,623 2,624
222,947 2,247

1,492

2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019

122 123
SUSTAINABLE DEVELOPMENT REPORT

ECONOMIC STANDARDS (continued)

Market presence Helping to promote commodity loans
Total funds from
In 2019, Sacombank implemented revised salary scheme specially As part of the instructions of the SBV, Sacombank pledged commitment WorldBank IDA

105 million
for ground-based employees of, 7% higher than the minimum to support the cooperate and farmers, providing access to short-term
wage of Region 1. operation loans for purchase of cops input suppliers within the Mekong
Delta. USD
Region Minimum wage
August 2018: Sacombank became a member of the Vietnam Sustainable
Region 1 4,180,000 (The Decree No. Agriculture Transformation Project (VnSAT) by WorldBank - IDA.
157/2018/NĐ-CP dated
Region 2 3,710,000 Total loans

15,000 VND billion

16 November 2018
VnSAT project
Region 3 3,250,000 stipulates region-based
minimum wages applied •• Total funds from WorldBank IDA is at USD 105 million, equivalent to
Region 4 2,920,000 to employees working VND 2,400 billion for 2015 - 2020.
Sacombank 4,475,000 under labor contract).

•• The component B2 of the project provides the capital and techniques to invest in producing and processing
Annually, Sacombank evaluates and revised incentivizing paying high quality rice.
scheme for employees to enhance their motivation, commitment •• B2 consist of the enterprises who own the private capital or are in the equitization process of private
and productivity. ownership; and customers who have business plans and use the inputs came from 8 provinces of the
Mekong Delta including: An Giang, Can Tho, Dong Thap, Hau Giang, Kien Giang, Long An, Soc Trang, and
Tien Giang.

Promoting economic development

Consumer financial products
Sacombank develops ecosystem financing products, coupled with
utilities to offer seamless experience driving Sacombank ahead
Loan for rural development
in the way of being a top regional Retail Bank in South East Asian.
}} Total disbursement: VND 28,712 billion
Furthermore, we impact the natural environment directly in }} The number of customers: 97,057 customers
our operations – green loans and green – related loans like
renewable energy, clean energy, environmental-friendly projects
were favorable.
Household Loan
QR payment platform was launched to drive a culture of cashless
payment and sustainably alternative payment platform. Deploying
Deposit: VND 8,304 billion
VNPAYQR allows us to leverage QR payment agents from 3,500
}}

to more than 29,000 agents across Vietnam enabling the simple }} The number of customers: 11,681 customers
and speedy connectivity.

QR payment agents By the end of 2018, Sacombank’s total loans peaked VND 15,000 billion; Southwest region contributed more

29,000 agents
than VND 8,000 billion in portfolio.

By implementing loan packages and participating in the World Bank’s VnSAT project, Sacombank pledge
ongoing effort in promoting the development of agriculture sector and rice production and processing.

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SUSTAINABLE DEVELOPMENT REPORT

ECONOMIC STANDARDS (continued)

Solutions for Micro Small and Medium Enterprises (MSME)

Most of MSMEs developed from household businesses with simple financial demands and simple management Enterprises could easily make online Using Sacombank’s applications, enterprises
models (the owner shall directly business and process most transactions). Therefore, Sacombank offered 3 payment for taxes or wages up to could easily make online payment for taxes

2,000 employees
solutions: or wages (to Sacombank’s or other banks’
accounts) for up to 2,000 employees in
•• Since August 2019, MSME can perform transaction as an individual, with no requirement to just one transaction; schedule future
register a chief accountant (01 user can complete the transaction). in just one transaction
money transfers; perform
simultaneous payment

1,600 new customers

to different accounts;
conduct multi-channel
transactions with
registered as MSME various authentication
methods including mSign,
1,300 new customers, QR Code, Advance Token, Digital
300 existing customers Signature.

744 customers
registered internet banking
Sacombank also focused on
developing online system that
allowed enterprises to open
accounts, apply for loans 24/7,
657 new customers, print e-forms, check electronic
about 100 existing customers invoices issued by Sacombank.

•• Simplifying credit issuance documents and process for

MSMEs while ensuring safety as prescribed by laws
344 customers
made transactions
As of 20 November 2019, Sacombank issued VND 3,584 billion of with total volume increased by Procurement practices
loans for MSMEs (increase by 35% compared to that of 2018), the VND 379 billion over 4 months.
number of customers was 1,865 (increased by 28% over the same Every year, Sacombank conducts the assessment of suppliers’ quality (services and products quality, supply
period), the share of overdue debts was low at 0.3%. capacity, delivery time, warranty, etc.) in order to select the most optimal supplier. In addition, Sacombank
Total loans for MSMEs requires suppliers not to violate the regulations on input materials usage, waste treatment, and employing

3,584 VND billion

•• Engaging technology to diversify offerings and reduce child labor, forced labor, etc. Sacombank’s prefers environmental friendly materials, which is in accordance
with ISO14001 and ISO 9706 standards for environment and society.
transaction time

There are more than 85,000 enterprises currently using

Sacombank’s internet banking (IB) service to perform daily 35 % Anti-corruption activities
transactions such as: checking account information and balance
inquiry; making payment for partners and utility bills (electricity, Corruption is an action that adversely affects the enterprises as well as the country, resulting in negative
water, telecommunications, etc.); experiencing other outstanding Enterprises currently using
impacts on the environment, economy and society. Therefore, Sacombank is highly aware of responsibility in
utilities: loan payoff, international money transfer, etc. Sacombank’s Internet Banking improving anti-corruption, seriously propagates anti-corruption laws to all employees. In 2019, Sacombank

85,000 enterprises
recorded no corruption case in the Bank or in subsidiaries/subsidiary banks.

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SUSTAINABLE DEVELOPMENT REPORT

ENVIRONMENTAL STANDARDS

Annually, Sacombank makes a detailed plan on energy usage and

stationeries consumption to closely monitor operating expenses.
In case any unexpected change occurs, the Bank shall always
explain the causes and propose the solutions.

Proper lightings Inspection

at workplaces of electrical
equipment at the
end of the day

Shutdown of
unused electrical
equipment Sacombank’s
Unit: VND million before leaving outdoor
(air conditioners, advertising light
No. Items 2017 2018 2019 lights, printers, boxes are set
etc.) from 18:30 to
1 Electricity consumption 134,709 150,287 152,395
20:00
2 Fuel costs 45,183 52,557 46,644

3 Business trip expenses 27,323 30,707 39,123

Reusing
4 Printing costs 53,074 61,395 66,867 Moderate
single-sided
use of air
5 Fixed assets investment 781,142 1,059,828 1,084,743 prints
conditioners
6 Equipment purchases 74,184 72,403 101,706 Regular check of
water equipment
In 2019, Sacombank continued to strengthen internal propaganda (via documents and newsletters) to to avoid leaks
raise employee awareness about environmental protection. Additionally, Sacombank did not violate the
Vietnamese and international laws on environmental issues.

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SUSTAINABLE DEVELOPMENT REPORT

SOCIAL STANDARDS

Sacombank always focuses on fostering and training human

resources through professional training courses related to
customer service, communication methods, etc., so that employees
can identify strengths to promote and weaknesses to minimize,
thereby improve capacity and increase productivity.

Sacombank Employment
Remuneration and promotion opportunities
Sacombank recruits employees from all regions of Vietnam. Sacombank always prioritizes local candidates at Sacombank
to increase employee engagement and contribute to local development.
Unit: VND million/employee

25.4
Year
Region
2015 2016 2017 2018 2019 18.3
16.6
Hanoi 551 279 367 278 273 14.8

North 133 119 145 205 290

North Central 223 140 174 196 146

South Central & Western

330 142 169 156 147
Highlands

Southeast 407 252 308 241 206 2016 2017 2018 2019

East HCMC 969 475 511 387 366

Career path is clearly defined for each position, coupled with appropriate remuneration.
99.57% of the managers were promoted from internal human resources, partly reflects
West HCMC 1.047 417 542 405 401 the opportunities for senior employees who have been committed to the Bank.

99.57%
Southwest 822 452 565 334 291

of the managers were promoted from

Total 4,482 2,276 2,781 2,202 2,120
internal human resources

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SUSTAINABLE DEVELOPMENT REPORT

SOCIAL STANDARDS (continued)

Excellent trainee
Over last 11 years, Sacombank has provided several chances for recent graduates to gain experience in
a professional working environment through “Excellent trainee” program. Moreover, most of them also
received offers to become official employees at Sacombank.

Year
Region
2015 2016 2017 2018 2019

Hanoi 123 133 188 147 147

North 42 41 39 33 60

North Central 46 79 56 78 75

South Central & Western Highlands 56 37 40 90 63

Southeast 28 44 102 70 65

East HCMC 115 215 179 225 194

West HCMC 99 171 114 169 165

Southwest 77 114 177 148 110

Total 586 834 895 960 879

Mechanism for Senior specialists

Applied to employees at the headquarters to:
•• Create professional development opportunities for employees to improve their skills and professionalism.
•• Encourage employees to proactively participate in new visionary projects and programs, while improving
their daily tasks.
•• Attract and retain proficient personnel:

By end of 2019, 47 employees were successfully entitled to Senior specialist, accounting for 2.5% of
headquarters’ total employees.

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SUSTAINABLE DEVELOPMENT REPORT

SOCIAL STANDARDS (continued)

Diversity and equal opportunities(*)

Total employees as of 31 December 2019 was 18,108 persons, gender equality greatly balancing across all
levels.

The majority of management was in the group age between 30 and 50, whose qualification and experience
were certified. The man force of Sacombank was nurtured by younger generation those are under 30
accounted for 43.79%.

Management structure Total: 2,753 employees

Unit: employees

By age By gender
Under 30: 190 Male: 1,439
From 30 to 50: 2,508 Female: 1,314
Over 50: 55

Ratio of Specialist to Employee Total: 15,355 employees Basic salary ratio by gender Employee income ratio by gender

By age By gender
Under 30: 7,741 Male: 7,988 Male: 55.03% Male: 54.19%
From 30 to 50:: 7,376 Female: 7,367 Female: 44.97% Female: 45.81%
Over 50: 238

(*)
According to Separated Financial Statements.
134 135
SUSTAINABLE DEVELOPMENT REPORT

SOCIAL STANDARDS (continued)

06 REASONS TO BE COMMITTED TO SACOMBANK

EMPLOYEES & SACOMBANK EMPLOYEES & SACOMBANK

Strengthening brand image

}} Top 10 prestigious private
commercial banks in 2019
“Alo CEO” channel was

1 4
Caring, supportive
Dynamic and innovative Top 3 favorite listed introduced to connect
and respectful
}}

working environment businesses recognized by employees and the CEO at

management
investors in 2019 (Large Cap) anytime.
}} The brand value reaches USD
27.9 million.
(Voted by Forbes VN)

}} Adjusting salary regime in

Sacombank always focuses on November 2018.
Improving employee
2 Professional trainings
training and developing human
resources to have the successive
management ready.
5 benefits mechanisms and
policies.
}} Amending regulations
on emulation and
compensation in April 2019.

Clear career path for each title.

Planning to appoint managers }} Preferential credit policies for
after 02 years of work. employees.
Proper recognition from
3 Clear career path }} Number of managers in 2018:
2,704
6 the management for
contribution.
}} Recognition “Excellent individual”
every year.
}} Number of managers in 2019: }} Honoring “Sacombank Stars”.
2,753

136 137
SUSTAINABLE DEVELOPMENT REPORT

SOCIAL STANDARDS (continued)

Personnel health and safety Education and training

148,436
In 2019, Sacombank continued to pay attention to employees’ safety Over the last 28 years, Sacombank had always paid attention to
and health through practices as follows: professional training courses regarding communication methods,
customer service, etc. so that employees can find out their strengths
and weaknesses, thereby improve capacity and productivity. In addition,
Sacombank had also promoted employee’s work-life balance.
total training hours
With the belief of “Human resources are core”, in 2019, Sacombank
provided 194 training courses for managers and employees with total
hours of up to 148,436.

Employees can seek for

health support from internal
Number of employees
medical rooms.
participated in training
courses based on Number of training
their position courses

Identifying measures Staff: 15,353 Professional training: 122

100% of the employees
to ensure safety and
receive annual health Manager: 2,749 Skills training: 65
sanitation, improve
checks. Employees in high
working conditions and Comprehensive training
health-risk positions (cashiers,
provide sufficient protection for managers: 7
sub-cashiers, fund tellers) get
equipment while protecting
health checks twice a year.
the environmental.

Sacombank provides partial

financial support for employee
who gets sick or accident on Annual team building vacation
business trip. provided to employees.

138 139
SUSTAINABLE DEVELOPMENT REPORT

COMMUNITY ACTIVITIES IN 2019

28,000
runners
participated in “Race with
Sacombank for public health”
program

1,526
blood units
obtained from “Sacombank -
Sharing from the heart” program
in 2019.

3,559
scholarships
were gifted to disadvantaged students in
“Sacombank - Nurturing dreams” program
with total value of more than VND 8 billion.

16
VND billion
to hold 17th “Warm spring” program with the theme
of “Spread Happiness - Share Love” in 52 provinces
and cities in Vietnam, Laos and Cambodia.

140 141
SUSTAINABLE DEVELOPMENT REPORT

COMMUNITY ACTIVITIES IN 2019 (continued)

17 Nearly
VND billion 1,600
was donated to support flood victims; build charity houses
and schools; contribute to the fund “For the poor”; sponsor
students
art activities, preserve cultural heritages; support social were eligible for the “Excellent trainee”
security for the poor, etc. program.

Nearly
19 4,500
free public toilets runners
were built in Ho Chi Minh City,
participated in “Cashless Day” program in Hanoi City
Da Nang, Da Lat, Vung Tau, Vinh
and Ho Chi Minh City, raising VND 600 million for
Long, Cao Lanh and Phu Quoc.
“Thuy’s Dream” program.

2,000
students
participated in the talk-show series “Orient thinking - Change life”

142 143
SUSTAINABLE DEVELOPMENT REPORT

”Youth is not a time of life – it is a state of mind” (Samuel Ullman). As long

as we believe in that, no matter how old we are, we can still be optimistic
START
and enjoy our lives. To promote that belief, CEO Nguyen Duc Thach Diem
20/04/2019
kicked off SACOMBANK YOUTH program. to encourage employee’s physical Kicking off
SACOMBANK YOUTH PROGRAM
training, determination and creativity.

08/06/2019 11/05/2019
SACOMBANK TENNIS CLUB SACOMBANK RUNNERS CLUB

09/07/2019 11/07/2019
SACOMBANK YOGA CLUB SACOMBANK DANCING CLUB

144 145
SUSTAINABLE DEVELOPMENT REPORT

SACOMBANK YOUTH (continued)

Sacombank Runners Club Sacombank Tennis Club

From 400 initial members, Sacombank Runners Club has been rapidly growing in both quantity and quality with Sacombank Tennis Club was introduced to provide opportunities for employees who share same interests in
more than 3,000 members in Vietnam, Laos and Cambodia with the message: “Sacombank-er are physically this sport to practice and compete with each other. As a result, they can enhance their health and determination,
and mentally strong”. Members of the club been actively participated in many running competitions held by contributing to success in career and life.
prestigious organizations. The most outstanding achievement was to become the champion of the UPRACE
2019 with total track of 200,319 km, contributing VND 200,319,000 to Newborn Vietnam Fund.

Sacombank Dancing Club

With the message “Dancing with passion”, the Club organized many activities and created a vibrant playground,
connecting more than 6,000 members. The club also generated positive and fresh energy for each member.

Sacombank Yoga Club

Yoga is a Physical - Mental – Spiritual practice that offers many health benefits. Therefore, Sacombank Yoga
Club is a place for all Sacombank’s employees with the same interest and ability to practice Yoga.

146 147
SUSTAINABLE DEVELOPMENT REPORT

GRI STANDARDS COMPLIANCE

This report includes standard and supplemental information disclosures based on GRI Standards guideline
GRI
for the financial sector. INFORMATION DISCLOSURE CONTENTS PAGE
STANDARDS
The GRI Sustainability Reporting Standards guideline is the latest comprehensive assessment of business GOVERNANCE
sustainability and provides more details on 3 main areas of Economy - Environment - Society. Sacombank
had selected and applied these standards to implement Sustainable Development Report since 2017 till now.
102-18 Governance structure Organizational structure 24-25

102-19 Delegating authority Roles and responsibilities of BOD,

GRI BOS and BOM towards sustainable 109
INFORMATION DISCLOSURE CONTENTS PAGE Executive-levels for economic,
STANDARDS 102-20 development
environmental and social topics
GRI100: GENERAL DISCLOSURES 2019 Consulting stakeholders on
102-21 economic, environmental and social Associating with stakeholders 119
ORGANIZATION PROFILE topics
Effectiveness of risk management
102-1 Name of the organization 102-30
processes Risk management towards
114-115
Review of economic, environmental sustainable development
Activities, brands, products and 102-31
102-2 and social topics
services
STAKEHOLDERS ENGAGEMENT
102-3 Location of headquarters
General information 10-12 102-40 List of stakeholder group
102-4 Locations of operations
Identifying and selecting
102-42 Associating with stakeholders 119
stakeholders
102-5 Ownership and legal form
Approach to stakeholder
102-43
engagement
102-6 Markets served

Network development 14-15

102-7 Scale of organization Organizational structure 24-25

Business performance 122-123

Sustainable development
108-109
governance
102-11 Precautionary Principle or approach
Risk management towards
114-115
sustainable development
STRATEGY
Statement from senior decision
102-14 Letter from Chairman 6-7
maker
102-15 Key impacts, risks and opportunities Opportunities and challenges 106-107

148 149
SUSTAINABLE DEVELOPMENT REPORT

GRI STANDARDS COMPLIANCE (continued)

GRI GRI
INFORMATION DISCLOSURE CONTENTS PAGE INFORMATION DISCLOSURE CONTENTS PAGE
STANDARDS STANDARDS
REPORTING PRACTICE GRI 204: PROCUREMENT PRACTICES
Entities included in the consolidated 204-1 Sustainable value chain
102-45
financial statements
Defining report content and topic Environmental, social and corporate
102-46 204-2 governance standards in investment
Boundaries Procurement practices 127
projects
102-47 List of material topics Environmental, social and corporate
204-3 governance standards in supply
102-48 Restatements of information chain and supplier selection
GRI 205: ANTI-CORRUPTION
102-49 Changes in reporting
Sustainable Development Report – Communication and training
100-101 205-2 about anti-corruption policies and Anti-corruption activities 127
General information
102-50 Reporting period procedures
GRI 300: ENVIRONMENTAL STANDARDS
102-51 Date of most recent report
GRI 302: ENERGY
102-52 Reporting cycle
Energy consumption within the
302-1
Contact points for questions organization
102-53 Energy 128
regarding the report 302-4 Reduction of energy consumption
Claims of reporting in accordance
102-54 GRI 307: ENVIRONMENTAL COMPLIANCE
with the GRI Standards
GRI 200: ECONOMIC STANDARD Non-compliance with environmental
307-1 Environment 128-129
laws and regulations
GRI 201: ECONOMIC PERFORMANCE
GRI 400: SOCIAL STANDARDS
Direct economic value generated
201-1 Economic performance 122-123 GRI 401: EMPLOYMENT
and distributed
GRI 202: MARKET PRESENCE New employee hires and employee
401-1 Sacombank Employment 130
turnover
Ratios of standard entry level
202-1 wage by gender compared to local Market presence 124 Benefits provided to full-time Market presence 124
minimum wage 401-2 employees that are not provided to
Compensation and benefits
temporary or part-time employees 131
GRI 203: INDIRECT ECONOMIC IMPACTS scheme

Significant indirect economic

203-2 Promoting economic development 124-125
impacts

150 151
SUSTAINABLE DEVELOPMENT REPORT

GRI STANDARDS COMPLIANCE (continued)

GRI GRI
INFORMATION DISCLOSURE CONTENTS PAGE INFORMATION DISCLOSURE CONTENTS PAGE
STANDARDS STANDARDS
GRI 403: OCCUPATIONAL HEALTH AND SAFETY GRI 408: CHILD LABOR
Sacombank’s Trade Union Operations and suppliers at
Workers representation in formal Sacombank absolutely does not use child labor in
represents for employees in formal 408-1 significant risk for incidents of child
403-1 joint management-worker health all business activities
joint management-worker health labor
and safety committees
and safety committees
GRI 409: FORCED OR COMPULSORY LABOR
Types of injury and rates of injury,
occupational diseases, lost days, and Operations and suppliers at
403-2 409-1 significant risk for incidents of None
absenteeism, and number of work
related fatalities None forced or compulsory labor
Workers with high incidence or high GRI 411: RIGHTS OF INDIGENOUS PEOPLE
403-3 risk of diseases related to their
occupation Incidents of violations involving
411-1 None
rights of indigenous peoples
Health and safety topics covered
403-4 in formal agreements with trade Occupational health and safety 138 GRI 413: LOCAL COMMUNITIES
unions
Operations with local communities
GRI 404: TRAINING AND EDUCATION 413-1 engagement, impact assessment and Community activities in 2019 140-143
development programs
Average hours of training per year
404-1
per employee GRI 416: CUSTOMER HEALTH AND SAFETY
Programs for upgrading employee Education and training 139
Assessment of the health and safety
404-2 skills and transition assistance 416-1 impacts of product and service
programs categories
None
GRI 405: DIVERSITY AND EQUAL OPPORTUNITY Incidents of non-compliance
416-2 concerning the health and safety
Diversity of governance bodies and
405-1 impacts of products and services
employees
Ratio of basic salary and Diversity and equal opportunities 134-135 GRI 417: MARKETING AND LABELING
405-2 remuneration of women compared Requirements for product and
to men 417-1
service information and labeling
GRI 406: NON-DISCRIMINATION Incidents of non-compliance
417-2 concerning product and service
Incidents of discrimination and None
406-1 None information and labeling
corrective actions taken
Incidents of non-compliance
GRI 407: FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING 417-3 concerning marketing
Operations and suppliers in which communications
Sacombank records no case of not exercising
the right to freedom of association
407-1 rights to participate in Trade Union and collective
and collective bargaining may be at
bargaining
risk

152 153
FINANCIAL STATEMENTS

Enhance
THE VALUE
 GENERAL INFORMATION

SAIGON THUONG TIN COMMERCIAL JOINT STOCK BANK BANK INFORMATION

Consolidated financial statements Saigon Thuong Tin Commercial Joint Stock Bank (“the Bank”) is a commercial joint stock bank incorporated
in the Socialist Republic of Vietnam.
For the year ended 31 December 2019
The Bank was established and operates in accordance with Banking License No. 111/GP-NHNN issued
by the State Bank of Vietnam on 9 November 2018 replacing Banking License No. 0006/NH-GP dated 5
December 1991, Business Registration Certificate No. 0301103908 dated 13 January 1992 and other
amendments issued by Ho Chi Minh City Department of Planning and Investment. The Bank’s operation
period is 99 years from 5 December 1991.

CONTENTS As at 1 October 2015, Southern Commercial Joint Stock Bank was officially merged into Saigon Thuong Tin
Commercial Joint Stock Bank according to Decision No. 1844/QD-NHNN dated 14 September 2015 issued
by the State Bank of Vietnam. Accordingly, Saigon Thuong Tin Commercial Joint Stock Bank has received
Pages and inherited all assets and obligations of Southern Commercial Joint Stock Bank since the date of merger.

General information 157-158 The Bank is allowed to carry out full range of banking services including mobilizing and receiving short,
medium and long-term deposits from organizations and individuals; providing short, medium and long-term
Report of the Board of Management 159 loans to organizations and individuals based on the Bank’s nature and capacity of the capital resources;
foreign exchange trading; international trade financing services; discount of commercial papers, bonds and
Independent auditors’ report 160-161 other valuable papers; providing settlement services; operating in monetary market; banking and financial
consultancy; trading in government and corporate bonds; gold trading; cash management services, asset
Consolidated balance sheet 162-164 preservation, cabin and safer renting; entrustment and trusteeship services; insurance agent; brokerage
and other banking services as allowed by the State Bank of Vietnam.
Consolidated income statement 165
The Bank’s head office is located at 266 - 268 Nam Ky Khoi Nghia Street, Ward 8, District 3, Ho Chi Minh City.
Consolidated cash flow statement 166-167 As at 31 December 2019, the Bank had one (1) Head Office, one hundred and ten (110) branches located in
cities and provinces in Vietnam, four hundred and forty-seven (447) domestic transaction offices located in
Notes to the consolidated financial statements 168-242 cities and provinces in Vietnam (31 December 2018: the Bank had one (1) Head Office, one hundred and five
(105) branches, four hundred and forty-seven (447) domestic transaction offices).

BOARD OF DIRECTORS

Members of the Board of Directors of the Bank during the year and at the date of this report are:

Name Position Date of appointment

Mr. Duong Cong Minh Chairman Appointed on 30 June 2017
Mr. Pham Van Phong Standing Vice Chairman Appointed on 20 April 2018
Mr. Nguyen Mien Tuan Vice Chairman Appointed on 20 April 2018
Mr. Nguyen Xuan Vu Member Appointed on 30 June 2017
Ms. Nguyen Duc Thach Diem Member Appointed on 20 April 2018
Ms. Le Thi Hoa Independent member Appointed on 30 June 2017
Mr. Nguyen Van Huynh Independent member Appointed on 20 April 2018

156 157
GENERAL INFORMATION (continued) REPORT OF THE BOARD OF MANAGEMENT

BOARD OF SUPERVISION The Board of Management of Saigon Thuong Tin Commercial Joint Stock Bank (“the Bank”) is pleased to
present this report and the consolidated financial statements of the Bank and its subsidiaries for the year
Members of the Board of Supervision of the Bank during the year and at the date of this report are: ended 31 December 2019.
THE BOARD OF MANAGEMENT’S RESPONSIBILITY IN RESPECT OF THE CONSOLIDATED
Name Position Date of appointment/re-appointment FINANCIAL STATEMENTS
Mr. Tran Minh Triet Chief Supervisor Appointed on 30 June 2017
The Board of Management is responsible for the consolidated financial statements of each financial year
Mr. Ha Ton Trung Hanh Member Appointed on 30 June 2017 which give a true and fair view of the consolidated financial position of the Bank and its subsidiaries, and of
Ms. Nguyen Thi Thanh Mai Member Re-appointed on 30 June 2017 the consolidated results of its operations and its consolidated cash flows for the year. In preparing those
Mr. Le Van Tong Non-dedicated member Re-appointed on 20 April 2018 consolidated financial statements, the Board of Management is required to:
»» select suitable accounting policies and apply them consistently;
BOARD OF MANAGEMENT AND CHIEF ACCOUNTANT »» make judgments and estimates that are reasonable and prudent;
Members of the Board of Management and Chief Accountant of the Bank during the year and at the date of »» state whether applicable accounting standards have been followed, subject to any material departures
this report are: disclosed and explained in the consolidated financial statements; and
»» prepare the consolidated financial statements on the going concern basis unless it is inappropriate to
Name Position Date of appointment/resignation presume that the Bank and its subsidiaries will continue in business.
Ms. Nguyen Duc Thach Diem General Director Appointed on 25 July 2017 The Board of Management is responsible for ensuring that proper accounting records are kept which
disclose, with reasonable accuracy at any time, the consolidated financial position of the Bank and its
Mr. Nguyen Minh Tam Deputy General Director Appointed on 21 May 2007 subsidiaries and to ensure that the accounting records comply with the applied accounting system. It is also
Mr. Dao Nguyen Vu Deputy General Director Appointed on 27 June 2007 responsible for safeguarding the assets of the Bank and its subsidiaries and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
Ms. Quach Thanh Ngoc Thuy Deputy General Director Appointed on 5 February 2010
The Board of Management confirmed that it has complied with the above requirements in preparing the
Mr. Bui Van Dung Deputy General Director Appointed on 29 March 2012 accompanying consolidated financial statements.
Mr. Phan Dinh Tue Deputy General Director Appointed on 14 June 2012 STATEMENT BY THE BOARD OF MANAGEMENT
Ms. Ha Quynh Anh Deputy General Director Appointed on 28 June 2012 The Board of Management does hereby state that, in its opinion, the accompanying consolidated financial
statements give a true and fair view of the consolidated financial position of the Bank and its subsidiaries
Mr. Nguyen Ba Tri Deputy General Director Appointed on 26 July 2012 as at 31 December 2019, of the consolidated results of its operations and its consolidated cash flows for
Mr. Ho Doan Cuong Deputy General Director Appointed on 1 October 2012 the year then ended in accordance with Vietnamese Accounting Standards, Vietnamese Accounting System
for Credit Institutions, the official approval of the State Bank of Vietnam for the Post-merger Restructuring
Mr. Vo Anh Nhue Deputy General Director Appointed on 1 October 2012 Plan and the Bank’s proposals for financial regimes and resolutions in the Restructuring Plan in relation
to accrued interest receivables, VAMC’s special bonds, bad debts, doubtful assets and investments during
Mr. Ha Van Trung Deputy General Director Appointed on 10 October 2012
restructuring period (“the Restructuring Plan approved by the State Bank of Vietnam”) as described in
Mr. Hoang Thanh Hai Deputy General Director Appointed on 7 April 2014 Note 3.4 and the statutory requirements relevant to the preparation and presentation of the consolidated
financial statements.
Mr. Le Van Ron Deputy General Director Appointed on 11 July 2017
For and on behalf of the Board of Management:
Mr. Le Duc Thinh Deputy General Director Appointed on 15 September 2017
Mr. Phan Quoc Huynh Deputy General Director Resigned on 2 March 2020
Mr. Huynh Thanh Giang Chief Accountant Appointed on 1 June 2012

LEGAL REPRESENTATIVE

The legal representative of the Bank during the year and at the date of this report is Ms. Nguyen Duc Thach
Diem, General Director.
Ms. Nguyen Duc Thach Diem
AUDITORS General Director

The auditor of the Bank is Ernst & Young Vietnam Limited. Ho Chi Minh City, Vietnam
24 March 2020 158 159
INDEPENDENT AUDITORS’ REPORT INDEPENDENT AUDITORS’ REPORT (continued)
Reference: 60857352/21220063-HN Reference: 60857352/21220063-HN

TO: THE SHAREHOLDERS OF SAIGON THUONG TIN COMMERCIAL JOINT STOCK BANK OPINION

We have audited the accompanying consolidated financial statements of Saigon Thuong Tin Commercial In our opinion, the consolidated financial statements give a true and fair view, in all material respects, of
Joint Stock Bank (“the Bank”) and its subsidiaries as prepared on 24 March 2020 and set out on pages 162 the consolidated financial position of the Bank and its subsidiaries as at 31 December 2019, and of the
to 242, which comprise the consolidated balance sheet as at 31 December 2019, the consolidated income consolidated results of its operations and its consolidated cash flows for the year then ended in accordance
statement and the consolidated cash flow statement for the year then ended and the notes thereto. with Vietnamese Accounting Standards, Vietnamese Accounting System for Credit Institutions, the official
approval of the State Bank of Vietnam for the Post-merger Restructuring Plan and the Bank’s proposals
THE BOARD OF MANAGEMENT’S RESPONSIBILITY for financial regimes and resolutions in the Restructuring Plan in relation to accrued interest receivables,
VAMC’s special bonds, bad debts, doubtful assets and investment securities during the restructuring period
The Bank’s the Board of Management is responsible for the preparation and fair presentation of the and the statutory requirements relevant to the preparation and presentation of the consolidated financial
consolidated financial statements in accordance with Vietnamese Accounting Standards, Vietnamese statements.
Accounting System for Credit Institutions, the official approval of the State Bank of Vietnam for the
Post-merger Restructuring Plan and the Bank’s proposal for financial regimes and resolutions in the EMPHASIS OF MATTER
Restructuring Plan in relation to accrued interest receivables, VAMC’s special bonds, bad debts, doubtful
assets and investments during the restructuring period and the statutory requirements relevant to the We draw attention to Note 3.4, on 22 May 2017, the Post-merger Restructuring Plan of Saigon Thuong Tin
preparation and presentation of the consolidated financial statements, and for such internal control as Commercial Joint Stock Bank with the implementation period until end of 2025 and the Bank’s proposals
the Board of Management determines is necessary to enable the preparation and presentation of the for financial regimes and resolutions in the Restructuring Plan in relation to accrued interest receivables,
consolidated financial statements that are free from material misstatement, whether due to fraud or error. VAMC’s special bonds, bad debts, doubtful assets and investments during the restructuring period was
approved by the State Bank of Vietnam according to Decision No. 34/QD-NHNN.Tym and Official Letter
AUDITORS’ RESPONSIBILITY No. 426/NHNN-TTGSNH.Tym. Accordingly, the basis for recognition, measurement and presentation of
these items in the consolidated financial statements was adopted in accordance with the official approval
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. of the State Bank of Vietnam for the Post-merger Restructuring Plan and the Bank’s proposals in the
We conducted our audit in accordance with Vietnamese Standards on Auditing. Those standards require Restructuring Plan, which are presented in relevant notes to the consolidated financial statements.
that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements of the Bank and its subsidiaries are free from material Our opinion is not modified in respect of this matter.
misstatement.
OTHER MATTER
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditors’ judgment, including The consolidated financial statements of the Bank and its subsidiaries for the year ended 31 December 2018
the assessment of the risks of material misstatement of the consolidated financial statements, whether were audited by another audit firm which expressed an unmodified opinion on those consolidated financial
due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to statements with emphasis of matter on the accounting policies for accrued interest receivables, VAMC’s
the Bank and its subsidiaries’ preparation and fair presentation of the consolidated financial statements special bonds, bad debts, doubtful assets and investments in the consolidated financial statements, which
in order to design audit procedures that are appropriate in the circumstances, but not for the purpose were adopted by the Bank in accordance with the official approval of the State Bank of Vietnam for the Post-
of expressing an opinion on the effectiveness of the Bank and its subsidiaries’ internal control. An audit merger Restructuring Plan and the Bank’s proposals in the Restructuring Plan in the audit report dated 29
also includes evaluating the appropriateness of accounting policies used and the reasonableness of March 2019.
accounting estimates made by the Board of Management, as well as evaluating the overall presentation of
the consolidated financial statements. ERNST & YOUNG VIETNAM LIMITED

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.

Nguyen Thuy Duong Vu Tien Dung

Deputy General Director Auditor
Audit Practicing Registration Audit Practicing Registration
Certificate No. 0893-2018-004-01 Certificate No. 3221-2020-004-1

Ho Chi Minh City, Vietnam

24 March 2020
160 161
CONSOLIDATED BALANCE SHEET CONSOLIDATED BALANCE SHEET (continued)
as at 31 December 2019 B02/TCTD-HN B02/TCTD-HN as at 31 December 2019

Ending balance Beginning balance Ending balance Beginning balance

Notes VND million VND million Notes VND million VND million
ASSETS LIABILITIES
Cash, gold and gemstones 5 8,269,373 6,379,549 Due to the State Bank of Vietnam 16 241,539 5,293,086
Balances with the Central Bank 6 12,109,861 9,611,502
Due to and borrowings from other credit institutions 3,525,560 7,300,158
Due from and loans to other credit institutions 13,150,915 4,822,454
Due to other credit institutions 17.1 399,665 1,043,216
Due from other credit institutions 7.1 12,716,806 4,448,288
Loans to other credit institutions 7.2 434,109 374,718 Borrowings from other credit institutions 17.2 3,125,895 6,256,942

Provision for credit losses 7.2 - (552) Due to customers 18 400,844,380 349,388,922
Derivatives and other financial assets 8 24,465 21,310 Grants, entrusted funds and loans exposed to risks 19 83,606 87,728
Loans to customers 292,058,715 253,100,111
Valuable papers issued 20 9,490,048 8,065,909
Loans to customers 9 296,029,774 256,622,753
Other liabilities 12,654,284 11,272,428
Provision for credit losses on loans to customers 11.1 (3,971,059) (3,522,642)
Purchased debts 10 423,453 544,786 Interest and fees payable 21.1 7,105,423 5,946,965

Purchased debts 426,769 549,040 Deferred corporate income tax liabilities 22.2 25,462 25,462
Provision for credit losses on purchased debts (3,316) (4,254) Other liabilities 21.2 5,523,399 5,300,001
Investment securities 76,497,497 75,514,421
TOTAL LIABILITIES 426,839,417 381,408,231
Available-for-sale securities 12.1 46,890,019 37,988,732
OWNERS’ EQUITY
Held-to-maturity securities 12.2 33,647,189 40,233,215
Capital 18,166,632 18,166,632
Provision for investment securities 12.3 (4,039,711) (2,707,526)
Long-term investments 13 103,854 142,613 Charter capital 18,852,157 18,852,157
Other long-term investments 298,971 320,477 Fund for capital expenditure 1,121 1,121
Provision for long-term investments (195,117) (177,864) Share premium 63,612 63,612
Fixed assets 8,289,968 8,249,652
Treasury shares (750,911) (750,911)
Tangible fixed assets 14.1 4,697,387 4,617,730
Other capital 653 653
Cost 7,448,991 7,088,107
Accumulated depreciation (2,751,604) (2,470,377) Reserves 2,963,901 2,720,885

Intangible fixed assets 14.2 3,592,581 3,631,922 Foreign currency translation reserve 199,543 223,786
Cost 4,677,710 4,573,585 Retained earnings 5,411,564 3,521,064
Accumulated amortization (1,085,129) (941,663)
TOTAL OWNERS’ EQUITY 23.1 26,741,640 24,632,367
Other assets 42,652,956 47,654,200
TOTAL LIABILITIES AND OWNERS’ EQUITY 453,581,057 406,040,598
Receivables 15.1 22,258,865 23,729,951
Interest and fees receivable 15.2 19,538,880 23,154,608
Deferred corporate income tax assets 22.2 159,813 63,102
Other assets 15.3 1,561,309 1,186,348
Provision for other assets 15.4 (865,911) (479,809)
TOTAL ASSETS 453,581,057 406,040,598

162 163
CONSOLIDATED BALANCE SHEET (continued) CONSOLIDATED INCOME STATEMENT
as at 31 December 2019 B02/TCTD-HN B03/TCTD-HN for the year ended 31 December 2019

OFF BALANCE SHEET ITEMS Current year Previous year

Notes VND million VND million
Ending balance Beginning balance Interest and similar income 25 30,476,971 26,295,571
Notes VND million VND million Interest and similar expenses 26 (21,296,283) (18,661,777)
Guarantees for borrowings 29,832 22,784 Net interest and similar income 9,180,688 7,633,794
Foreign exchange commitments 44,660,130 15,914,207 Fee and commission income 4,803,443 3,772,038

- Commitments on buying foreign currencies 1,492,052 547,702 Fee and commission expenses (1,480,453) (1,089,894)
Net fee and commission income 27 3,322,990 2,682,144
- Commitments on selling foreign currencies 1,700,159 984,502
Net gain from trading of foreign currencies 28 608,748 401,278
- Commitments on swap transactions 41,467,919 14,382,003
Net gain from dealing of held-for-trading securities - 3,304
Letters of credit 5,514,066 7,406,560 Net gain from investment securities 29 72,764 21,223
Other guarantees 7,568,102 6,932,154 Other operating income 1,485,474 951,030
Other commitments 1,906 3,718 Other operating expenses (64,287) (18,647)
Net gain from other operating activities 30 1,421,187 932,383
36 57,774,036 30,279,423
Income from investments in other entities 31 28,961 2,809
TOTAL OPERATING INCOME 14,635,338 11,676,935
Prepared by: Reviewed by: Approved by: Personnel expenses (5,465,357) (4,832,476)
Depreciation and amortization charges (544,864) (458,917)
Other operating expenses (3,255,482) (2,546,437)
TOTAL OPERATING EXPENSES 32 (9,265,703) (7,837,830)
Net operating profit before provision expense for credit losses 5,369,635 3,839,105
Provision expense for credit losses 11 (2,152,889) (1,592,114)
PROFIT BEFORE TAX 3,216,746 2,246,991
Current corporate income tax expense 22.1 (791,542) (445,711)
Deferred corporate income tax income/(expense) 22.2 29,660 (11,124)
Mr. Luu Van Hoa Mr. Huynh Thanh Giang Ms. Nguyen Duc Thach Diem
Accountant Chief Accountant General Director Corporate income tax expenses (761,882) (456,835)
PROFIT AFTER TAX 2,454,864 1,790,156
Ho Chi Minh City, Vietnam
24 March 2020 Basic earnings per share (VND/share) 24 1,119 781

Prepared by: Reviewed by: Approved by:

Mr. Luu Van Hoa Mr. Huynh Thanh Giang Ms. Nguyen Duc Thach Diem
Accountant Chief Accountant General Director

Ho Chi Minh City, Vietnam

24 March 2020
164 165
CONSOLIDATED CASH FLOW STATEMENT CONSOLIDATED CASH FLOW STATEMENT (continued)
for the year ended 31 December 2019 B04/TCTD-HN B04/TCTD-HN for the year ended 31 December 2019

Current year Previous year Current year Previous year

Notes VND million VND million Notes VND million VND million
CASH FLOWS FROM OPERATING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITY
Interest and similar receipts 34,420,735 28,139,058 Dividends distributed to shareholders 23.2 (202) (136)
Interest and similar payments (20,515,549) (17,307,737)
Net cash used in financing activity (202) (136)
Net fee and commission receipts 3,242,134 2,420,494
Net cash flows during the year 12,680,944 4,305,618
Net receipts from trading of securities, gold and foreign
667,601 449,231
currencies Cash and cash equivalents at beginning of the year 33 20,439,339 16,143,835
Receipts from other activities 813,579 555,823
Foreign exchange difference (24,243) (10,114)
Recoveries from bad debts previously written-off 30 251,457 187,760
Cash and cash equivalents at end of the year 33 33,096,040 20,439,339
Payments for operations and salary expenses (8,973,927) (6,864,760)
Corporate income tax paid during the year 22 (631,348) (359,221)
Net cash flows from operating activities before changes in
9,274,682 7,220,648
operating assets and liabilities Prepared by: Reviewed by: Approved by:
Changes in operating assets (38,374,479) (36,525,616)
(Increase)/decrease in due from and loans to other credit
(59,391) 69,876
institutions
Increase in trading securities (2,476,057) (1,008,642)
Increase in derivatives and other financial assets (3,155) (1,059)
Increase in loans to customers (39,284,590) (35,998,597)
Utilization of provision to write-off (167,185) (7,986)
Decrease in other operating assets 3,615,899 420,792
Changes in operating liabilities 42,168,210 34,236,737 Mr. Luu Van Hoa Mr. Huynh Thanh Giang Ms. Nguyen Duc Thach Diem
(Decrease)/increase in due to the State Bank of Vietnam (5,051,547) 5,061,602 Accountant Chief Accountant General Director

Decrease in due to and borrowings from other credit institutions (5,683,897) (5,348,848) Ho Chi Minh City, Vietnam
Increase in due to customers 51,455,458 29,529,335 24 March 2020
Decrease in grants, entrusted funds and loans exposed to risks (4,122) (3,247)
Increase in valuable papers issued 1,424,139 2,464,523
Increase in other operating liabilities 57,539 2,597,859
Utilization of reverses during the year 21.2 (29,360) (64,487)
Net cash from operating activities 13,068,413 4,931,769
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets (885,024) (1,053,926)
Proceeds from disposals of fixed assets 448,179 424,645
Payments for investments in other entities - -
Proceeds from investments in other entities 44,735 950
Dividends received from long-term investments 4,843 2,316
Net cash used in investing activities (387,267) (626,015)

166 167
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

1. BANK INFORMATION 1. BANK INFORMATION (continued)

Saigon Thuong Tin Commercial Joint Stock Bank (“the Bank”) is a commercial joint stock bank Subsidiaries
incorporated in the Socialist Republic of Vietnam.
As at 31 December 2019, the Bank has six (6) subsidiaries as follows:
Establishment and Operations
Business
The Bank was established and operates in accordance with Banking License No. 111/GP-NHNN registration
issued by the State Bank of Vietnam on 9 November 2018 replacing Banking License No. 0006/NH- Certificate/
GP dated 5 December 1991, Business Registration Certificate No. 0301103908 dated 13 January Operating
1992 and other amendments issued by Ho Chi Minh City Department of Planning and Investment. Subsidiaries License No. Nature of Business Ownership
The Bank’s operation period is 99 years from 5 December 1991.
Sacombank Asset Management
4104000053 Asset management 100%
On 1 October 2015, Southern Commercial Joint Stock Bank was officially merged into Saigon Thuong Co., Ltd.
Tin Commercial Joint Stock Bank according to Decision No. 1844/QD-NHNN dated 14 September Mobilizing capital and leasing
2015 issued by the State Bank of Vietnam. Accordingly, Saigon Thuong Tin Commercial Joint Stock Sacombank Leasing Co., Ltd. 65a/GP-NHNN 100%
activities
Bank has received and inherited all assets and obligations of Southern Commercial Joint Stock
Foreign currency remittance
Bank since the date of merger. Sacombank Remittance Express
0304242674 service and foreign exchange 100%
Co., Ltd.
agent
The Bank is allowed to carry out full range of banking services including mobilizing and receiving
short, medium and long-term deposits from organizations and individuals; providing short, medium Retailing gold, silver and precious
and long-term loans to organizations and individuals based on the Bank’s nature and capacity of stones, jewelry; commercial
Sacombank Jewelry Co., Ltd. 0305584790 100%
the capital resources; foreign exchange trading; international trade financing services; discount of inspection; gold trading,
manufacturing gold and jewelry
commercial papers, bonds and other valuable papers; providing settlement services, operating in
monetary market; banking and financial consultancy; trading in government and corporate bonds; Sacombank (Cambodia) Plc. N.27 Banking business 100%
gold trading; cash management services, asset preservation; cabin and safer renting; entrustment
and trusteeship services; insurance agent; brokerage and other banking services as allowed by the Sacombank (Lao) Plc. 15/NHNN Banking business 100%
State Bank of Vietnam.
Employees
Charter capital
The Bank and its subsidiaries are total number of employees as at 31 December 2019 were 19,237
The charter capital of the Bank as at 31 December 2019 amounted to VND18,852,157 million (31 persons (31 December 2018: 18,818 persons).
December 2018: VND18,852,157 million). The Bank has issued 1,885,215,716 ordinary shares with a
par value of VND10,000 per share. The Bank’s shares have been listed on the Ho Chi Minh City Stock
Exchange.

Network

The Bank’s Head Office is located at 266 - 268 Nam Ky Khoi Nghia Street, Ward 8, District 3, Ho Chi
Minh City, Vietnam. As at 31 December 2019, the Bank had one (1) Head Office, one hundred and ten
(110) branches, four hundred and forty-seven (447) domestic transaction offices located in cities and
provinces in Vietnam (31 December 2018: the Bank had one (1) Head Office, one hundred and five
(105) branches, four hundred and forty-seven (447) domestic transaction offices).

168 169
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

2. ACCOUNTING PERIOD AND ACCOUNTING CURRENCY 3. APPLIED ACCOUNTING STANDARDS AND SYSTEM (continued)

2.1 Fiscal year

3.2 Accounting standards and system (continued)
The Bank and its subsidiaries’ fiscal year start on 1 January and end on 31 December.
The accompanying consolidated financial statements have been prepared in accordance with
2.2 Accounting currency accounting principles and practices generally accepted in Vietnam. Accordingly, the accompanying
consolidated financial statements, including their utilization are not designed for those who are not
The Bank and its subsidiaries maintain its accounting recorded in Vietnam dong (“VND”). According informed about Vietnam’s accounting principles, procedures and practices and furthermore are not
to Circular No. 49/2014/TT-NHNN, for the purpose of preparing these consolidated financial intended to present the consolidated financial position and consolidated results of operations and
statements, the amounts are rounded to the nearest millions and presented in millions of Vietnam consolidated cash flows in accordance with accounting principles and practices generally accepted
dong (“VND million”). in countries other than Vietnam.

3. APPLIED ACCOUNTING STANDARDS AND SYSTEM Items or balances required by Decision No. 16/2007/QD-NHNN dated 18 April 2007 and Circular
No. 49/2014/TT-NHNN dated 31 December 2014 issued by the State Bank of Vietnam stipulating
3.1 Statement of compliance the financial statements reporting mechanism for credit institutions that are not shown in these
consolidated financial statements indicate nil balance.
The Board of Management of the Bank confirms that the accompanying consolidated financial
statements have been prepared in accordance with Vietnamese Accounting Standards, Vietnamese
Accounting System for Credit Institutions, the official approval of the State Bank of Vietnam for the 3.3 Basis of consolidation
Post-merger Restructuring Plan and the Bank’s proposals for financial regimes and resolutions in
the Restructuring Plan in relation to accrued interest receivables, VAMC’s special bonds, bad debts, The consolidated financial statements comprise the financial statements of the Bank and its
doubtful assets and investments during the restructuring period and the statutory requirements subsidiaries for the year ended 31 December 2019.
relevant to the preparation and presentation of the consolidated financial statements.

3.2 Accounting standards and system Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Bank
obtains control, and continue to be consolidated until the date that such control ceases.
The consolidated financial statements of the Bank and its subsidiaries are prepared in accordance
with the Accounting System applicable to credit institutions required under Decision No. 479/2004/
The financial statements of the subsidiaries are prepared for the same reporting period as the Bank,
QD-NHNN issued on 29 April 2004, Circular No. 10/2014/TT-NHNN dated 20 March 2014 and
using consistent accounting policies.
Circular No. 22/2017/TT-NHNN dated 29 December 2017 amending and supplementing Decision
No. 479/2004/QD-NHNN; the financial reporting regime applicable to Credit Institutions required
under Decision No. 16/2007/QD-NHNN dated 18 April 2007 and Circular No. 49/2014/TT-NHNN All intra-group balances, income and expenses and unrealized gains or losses resulting from intra-
amending and supplementing a number of articles of Decision No. 16/2007/QD-NHNN and the group transactions are eliminated in full.
chart of account system for credit institutions issued in connection with Decision No. 479/2004/
QD-NHNN by the State Bank of Vietnam; Decision No. 34/QD-NHNN.Tym dated 22 May 2017 and
3.4 Accounting policies applicable to the main items in accordance with the Restructuring Plan
Official Letter No. 426/NHNN-TTGSNH.Tym dated 22 May 2017 by the State Bank of Vietnam for the
approved by the State Bank of Vietnam
Post-merger Restructuring Plan and the Bank’s proposals for financial regimes and resolutions in
the Restructuring Plan as described in Note 3.4 and other Vietnamese Accounting Standards issued
by the Ministry of Finance as per: On 22 May 2017, the Post-merger Restructuring Plan of Saigon Thuong Tin Commercial Joint Stock
Bank with the implementation period until end of 2025 and the Bank’s proposals for financial regimes
»» Decision No. 149/2001/QD-BTC dated 31 December 2001 on the Issuance and Promulgation of
and resolutions in the Restructuring Plan in relation to accrued interest receivables, VAMC’s special
Four Vietnamese Standards on Accounting (Series 1);
bonds, bad debts, doubtful assets and investments during the restructuring period was approved
»» Decision No. 165/2002/QD-BTC dated 31 December 2002 on the Issuance and Promulgation of by the State Bank of Vietnam according to Decision No. 34/QD-NHNN.Tym and Official Letter No.
Six Vietnamese Standards on Accounting (Series 2); 426/NHNN-TTGSNH.Tym. Accordingly, the basis for recognition, measurement and presentation
of these items in the consolidated financial statements was adopted in accordance with the official
»» Decision No. 234/2003/QD-BTC dated 30 December 2003 on the Issuance and Promulgation of approval of the State Bank of Vietnam for the Post-merger Restructuring Plan and the Bank’s
Six Vietnamese Standards on Accounting (Series 3); proposals in the Restructuring Plan which are presented in relevant notes to the consolidated
financial statements. These proposals are summarized as follows:
»» Decision No. 12/2005/QD-BTC dated 15 February 2005 on the Issuance and Promulgation of Six
Vietnamese Standards on Accounting (Series 4); and

»» Decision No. 100/2005/QD-BTC dated 28 December 2005 on the Issuance and Promulgation of
Four Vietnamese Standards on Accounting (Series 5).
170 171
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

3. APPLIED ACCOUNTING STANDARDS AND SYSTEM (continued) 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

4.1 Changes in accounting policies and disclosures

3.4 Accounting policies applicable to the main items in accordance with the Restructuring Plan
approved by the State Bank of Vietnam (continued)
The accounting policies adopted by the Bank and its subsidiaries in preparation of the consolidated
financial statements are consistent with those followed in the preparation of the consolidated
»» Accrued interest receivables: The Bank is permitted to block accrued interest receivables of
financial statements for the year ended 31 December 2018, except for the following change in the
certain bad debts and doubtful assets in its consolidated financial statements as at 31 December
accounting policy:
2015 and amortize such accrued interest receivables to profit and loss based on its financial
capability over a maximum period of 10 years according to the Restructuring Plan developed by
Circular No. 48/2019/TT-BTC providing guidance to the appropriation and use of provisions for devaluation
the Bank (Note 15.2).
of inventories, financial investments, bad receivable debts and warranty for products, goods and
construction works at enterprises.
»» Provision for credit losses: The Bank is permitted to make and allocate provision for credit
losses based on its financial capability according to the Restructuring Plan developed by the On 8 August 2019, the Ministry of Finance issued Circular No. 48/2019/TT-BTC (“Circular 48”)
Bank during the restructuring period (Note 9.1 and 11.1). providing guidance to the appropriation and use of provisions for devaluation of inventories, loss
of financial investments, bad receivable debts and warranty for products, goods and construction
»» Special bonds issued by VAMC: The Bank is permitted to make and allocate provision for VAMC’s works as a basis for determining deductible expenses when determining taxable income.
special bonds based on its financial capability during the term of the bonds (Note 12.2).
Key changes in Circular 48 are as below:
»» Doubtful assets, foreclosed assets: The Bank is required to establish specific processes and
schedules to completely resolve the foreclosed assets in order to recover the capital for the »» Amending the guidance on making provisions for losses due to devaluation of securities;
Bank. The Bank is permitted to sell its bad debts and doubtful assets to organizations and
individuals at market prices and amortize losses arising from sales of these debts to profit and »» Amending guidance on making provisions for capital contribution and long-term investments;
loss based on its financial capability over a maximum period of 5 years from the selling date
(Note 15.1 and 15.3). »» Amending guidance on making provisions for bad debts.

Circular 48 has taken effect since 10 October 2019, applied from fiscal year 2019 and replaced
»» Investments in excess of 11% of the investee’s charter capital and cross ownership: The Bank is
Circular No. 228/2009/TT-BTC dated 7 December 2009, Circular No. 34/2011/TT-BTC dated 14
approved to follow the proposed schedule for resolving these investments in the Restructuring
March 2011 and Circular No. 89/2013/TT-BTC dated 28 June 2013.
Plan to comply with the prevailing regulations (Note 12.1).
4.2 Cash and cash equivalents
3.5 Accounting estimates and assumptions
Cash and cash equivalents comprise cash on hand, gold and gemstones balances with the Central
The preparation of the consolidated financial statements requires the Board of Management make Bank, treasury notes and other short-term valuable papers which can be discounted with the State
estimates and assumptions that affect the reported amount of assets and liabilities and disclosure Bank of Vietnam (“the SBV”), due from other credit institutions on demand or with an original maturity
of contingent liabilities. These estimates and assumptions also affect the income, the expenses and of less than three months from the transaction date and securities investments with maturity of less
provisions. Such estimates are based on assumptions involving varying degrees of subjectivity and than three months from purchase dates which are readily convertible into certain amounts of cash
uncertainty. Therefore, actual results may differ from estimates, resulting in future changes to such and subject to insignificant risks of change in value at the reporting date.
items.

3.6 Going concern

The Board of Management has taken all necessary measures to maintain the Bank’s operation
continuity, including the recovery of matured debts and bad debts, maintenance of existing customer
deposits, finding new customers, deployment of new services and products, strict control of operating
expenses, etc. Simultaneously, the Board of Management has also implemented the bad debt
recovery and restructuring according to the Merger Plan and the Restructuring Plan as approved by
the State Bank of Vietnam. The Board of Management believes that with the implementation of the
above measures, the Bank and its subsidiaries will continue to operate in the definite future. As a
result, these consolidated financial statements have been prepared on the going assumption basis.

172 173
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

4.3 Due from and loans to other credit institutions 4.6 Loan classification and provision for credit losses applied to due from and loans to other credit
institutions, unlisted corporate bonds purchased and trusted for purchase by the Bank, loans to
Due from and loans to other credit institutions are presented at the principal amounts outstanding at the customers, entrusted for credit granting by the Bank and other credit risk bearing assets
end of the year.
Loan classification
The credit risk classification of due from and loans to other credit institutions and provision for credit risks
thereof are provided in accordance with Circular No. 02/2013/TT-NHNN dated 21 January 2013 of the The classification of due from and loans to other credit institutions, unlisted corporate bonds
SBV on classification of assets, levels and method of making risk provision, and use of provision against purchased and trusted for purchase by the Bank, loans to customers, entrusted for credit granting by
credit risks in operation of credit institutions, foreign bank’s branches (“Circular 02”) and Circular No. the Bank and other credit risk bearing assets (collectively called “debts”) is made in compliance with
09/2014/TT-NHNN dated 18 March 2014 on amending and supplementing a number of article of Circular the quantitative method as prescribed in Article 10 of Circular 02. Accordingly, debts are classified
02 (“Circular 09”). according to levels of risk as: Current, Special mention, Sub-standard, Doubtful and Loss based on
their overdue status and other qualitative factors. Debts classified into sub-standard, doubtful and
Accordingly, the Bank and its subsidiaries make a specific provision for due from (except for current loss group are determined as bad debts.
accounts) and loans to other credit institutions according to the method as described in Note 4.6.
Specific provision
According to Circular 02 and Circular 09, the Bank and its subsidiaries are not required to make a general
provision for due from and loans to other credit institutions. The specific provision for debts belonging to the Restructuring Plan is made in compliance with the
official approval of the SBV for the Post-merger Restructuring Plan and the Bank’s proposals in the
4.4 Purchased debts Restructuring Plan during the restructuring period (Note 3.4).

Purchased debts are recognized at the amount which has been paid for debt purchase and classified The specific provision for debts as at 31 December is made based on the principal balance less
into the group of risk which is not lower than the group of debts classified before purchase. Interest discounted value of collaterals multiplied by provision rates which are determined based on the
receipt including the interest incurred before the purchase is recognized using the following debt classifications as at 30 November. The specific provision rates for each group are presented
principle: (i) reduce the value of purchased debts by the amount of interest incurred before the as follows:
purchase date, (ii) recognize the interest income in the period by the amount incurred after the
purchase date. Specific
Loan group Description provision rate
The purchased debts are classified into loan groups and made provisions against credit risks in
accordance with regulations on making provisions and using of provisions against credit risks as 1 Current (a) Current debts are assessed as fully and timely recoverable for both 0%
described in Note 4.6. principals and interests; or
(b) Debts are overdue for a period of less than 10 days and assessed as
fully recoverable for both overdue principals and interests, and fully
4.5 Loans to customers
and timely recoverable for both remaining principals and interests.
Loans to customers are disclosed and presented at the principal amounts outstanding at the end
2 Special (a) Debts are overdue for a period of between 10 days and 90 days; or 5%
of the year. Mention (b) Debts which the repayment terms are restructured for the first time.

Short-term loans have maturity of less than one year from disbursement date. Medium-term loans
have maturity of more than one to five years from disbursement date. Long-term loans have maturity
of more than five years from disbursement date.

Loan classification and provision for credit losses are made according to Circular 02 and Circular
09 as described in Note 4.6.

174 175
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

4.6 Loan classification and provision for credit losses applied to due from and loans to other credit 4.6 Loan classification and provision for credit losses applied to due from and loans to other credit
institutions, unlisted corporate bonds purchased and trusted for purchase by the Bank, loans institutions, unlisted corporate bonds purchased and trusted for purchase by the Bank, loans
to customers, entrusted for credit granting by the Bank and other credit risk bearing assets to customers, entrusted for credit granting by the Bank and other credit risk bearing assets
(continued) (continued)

Specific provision (continued) Specific provision (continued)

Specific If a customer has more than one debt with the Bank and its subsidiaries, any of outstanding debts is
Loan group Description provision classified into a higher risk group, the entire remaining debts of such customer should be classified
rate into the corresponding higher risk group.

3 Sub- (a) Debts are overdue for a period of between 91 days and 180 days; or 20%
standard (b) Debts which the repayment terms are extended for the first time; or When the Bank and its subsidiaries participate in a syndicated loan as a participant, it classifies such
(c) Debts which interests are exempted or reduced because customers do not loans (including syndicated loans) into a higher risk group between the Bank and its subsidiaries’
have sufficient capability to repay all interests under credit contracts; or assessment and the leading bank’s assessment.
(d) Debts under one of the following cases which have not been recovered in less
than 30 days from the date of the recovery decision:
»» Debts made incompliance with Clause 1, 3, 4, 5, 6 under Article 126 of For loans to customers in agricultural and rural sector, the Bank and its subsidiaries are allowed
Law on Credit Institutions; or to restructure these loans and remain their debt groups as they are only one time in accordance
»» Debts made incompliance with Clause 1, 2, 3, 4 under Article 127 of Law with Circular No. 10/2015/TT-NHNN dated 22 July 2015 and Circular No. 25/2018/TT-NHNN dated
on Credit Institutions; or 24 October 2018 amending a number of articles of the Circular No. 10/2015/TT-NHNN guiding the
»» Debts made incompliance with Clauses 1, 2 and 5 under Article 128 of implementation of a number of contents of the Decree No. 55/2015/ND-CP dated 9 June 2015 by the
Law on Credit Institutions. Government on the credit policy for agricultural and rural development.
(e) Debts are required to be recovered according to regulatory inspection
conclusions.
If a customer is classified into debt group with lower risk than debt group in CIC list, the Bank its
4 Doubtful (a) Debts are overdue for a period of between 181 days and 360 days; or 50%
subsidiaries must adjust the debt classification results according to CIC list.
(b) Debts which the repayment terms are restructured for the first time but still
overdue for a period of less than 90 days under that restructured repayment
term; or The basis for determination of value and discounted value of collaterals is regulated in Circular 02
(c) Debts which the repayment terms are restructured for the second time; or and Circular 09.
(d) Debts are specified in point (d) of Loan group 3 and overdue for a period of
between 30 days and 60 days after decisions of recovery have been issued; or
(e) Debts are required to be recovered according to regulatory inspection General provision
conclusions but still outstanding with an overdue period up to 60 days since
the recovery date as required by regulatory inspection conclusions.
General provision as at 31 December is made at 0.75% of total outstanding loans excluding due from
5 Loss (a) Debts are overdue for a period of more than 360 days; or 100% and loans to other credit institutions and loans classified as loss (Group 5) as at 30 November.
(b) Debts which the repayment terms are restructured for the first time but
still overdue for a period of 90 days or more under that first restructured
repayment term; or Write-off bad debts
(c) Debts which the repayment terms are restructured for the second time but
still overdue under that second restructured repayment term; or
(d) Debts which the repayment terms are restructured for the third time or Provision is recognized as an expense on the consolidated income statement and used to write-off
more, regardless of being overdue or not; or bad debts. According to Circular 02, the Bank and its subsidiaries establish a Risks Settlement
(e) Debts are specified in point (d) of Loan group 3 and overdue for a period of Committee to deal with risks for bad debts if they are classified in Group 5 or if the borrower is a
more than 60 days after decisions on recovery have been issued; or dissolved, bankrupt organization or individual who is dead or missing.
(f) Debts are required to be recovered under regulatory inspection conclusions
but still outstanding with an overdue period of more than 60 days since the
recovery date as required by regulatory inspection conclusions; or
(g) Debts of credit institutions under special control as announced by the SBV, or
debts of foreign bank branches which capital and assets are blocked.

176 177
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

4.7 Available-for-sale securities 4.7 Available-for-sale securities (continued)

4.7.1 Classification and recognition 4.7.3 Derecognition

Available-for-sale securities include debt and equity securities that are acquired by the Bank and Available-for-sale securities are derecognized when the rights to receive cash flows from the
its subsidiaries for the investment and available-for-sale purposes, not regularly traded but can be securities have expired or the Bank and its subsidiaries have transferred substantially all risks and
sold when there is a benefit. For equity securities, the Bank and its subsidiaries are also neither the rewards of ownership of these securities.
founding shareholder nor the strategic partner and do not have the ability to make certain influence
in establishing and making the financial and operating policies of the investees through a written
4.8 Held-to-maturity investment securities
agreement on assignment of its personnel to the Board of Directors/Management.

Special bonds issued by VAMC

Available-for-sale equity securities are initially recognized at cost at the purchase date and
continuously presented at cost in subsequent periods.
Special bonds issued by VAMC are valuable papers with specific terms issued by VAMC to purchase
bad debts from the Bank and its subsidiaries. Special bonds are recognized at par value at the
Available-for-sale debt securities are recognized at par value at the purchase date. Accrued interest
transaction date and continuously recorded at par value in subsequent periods. Par value of special
(for debt securities with interest payment in arrears) and deferred interest (for debt securities with
bonds relating to the bad debts sold, is the difference between the outstanding loan balance and
interest payment in advance) is recognized in a separate account. Discount/premium, which is the
unused balance of specific provision of loan.
difference between the cost and the amount being the par value plus (+) accrued interest (if any) or
minus (-) deferred interest (if any) is also recognized in a separate account.
During the holding period, the Bank and its subsidiaries annually calculate and make allowance in
accordance with Circular No. 14/2015/TT-NHNN dated 28 August 2015 amending and supplementing
In subsequent periods, these securities are continuously recorded at par value, and the discount/
some articles of Circular No. 19/2013/TT-NHNN which stimulates the purchase, sale and write-off
premium (if any) is amortized to the consolidated income statement on a straight-line basis over the
bad debts of VAMC.
remaining term of securities. Interest received in arrears is recorded as follows: Cumulative interest
incurred before the purchasing date is recorded as a decrease in the accrued interest; cumulative
interest incurred after the purchasing date is recognized as income based on the accumulated As required by Circular No. 14/2015/TT-NHNN, each year within five consecutive working days prior
method. Interest received in advance is amortized into the securities investment interest income on to the maturity date of special bonds, the Bank is obliged to fully make specific provision for each
a straight-line basis over the term of securities investment. special bond using the below formula:

4.7.2 Measurement

Periodically, available-for-sale securities will be considered for impairment.

Provision for impairment of securities is made when book value of the securities is higher than
its market value which is determined according to Circular No. 48/2019/TT-BTC. Provision for
impairment is recorded to “Net gain/(loss) from investment securities” in the consolidated income
statement.

For corporate bonds that have not yet been listed on the securities market or have not been registered
for trading on unlisted public companies, the Bank and its subsidiaries shall made provisions for
those bonds in accordance with Circular 02 and Circular 09 as described in Note 4.6.

178 179
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

4.8 Held-to-maturity investment securities (continued) 4.9 Repurchase and reverse repurchase agreements (continued)

Special bonds issued by VAMC (continued) Conversely, securities purchased under agreements to resell at a specific date in the future are
not recognized in the consolidated financial statements. The corresponding cash paid is recognized
Y in the consolidated balance sheet as an asset item. The difference between the sale price and
X(m)= x m – (Zm + Xm-1) repurchase price is recognized to the consolidated income statement using contract interest rate.
n
Provision for securities purchased with commitment to resell belonging to the Restructuring Plan
In which:
is made in compliance with the official approval of the SBV for the Post-merger Restructuring Plan
and the Bank’s proposals in the Restructuring Plan during the restructuring period (Note 3.4).
»» X(m) is minimum provision for special bonds in the mth year;
»» Xm-1 is accumulated specific provision for special bonds in the m-1th year; 4.10 Other long-term investments
»» Y is face value of special bonds;
»» n is term of special bonds (years); Other long-term investments represent investments in other entities in which the Bank and its
subsidiaries hold less than or equal to 11% of voting rights. These investments are initially recorded
»» m is number of years from the bond issuance date to the provision date;
at cost at the investment date.
»» Zm is accumulated bad debt recoveries at the provision date (mth year). Credit institutions
should co-operate with VAMC to determine the recovery of the bad debts. For registered trading securities on unlisted public company market (“UPCoM”), provision for
diminution in value is made when their actual market price which determined by weighted average
If (Zm + Xm-1) ≥ (Y/n x m), the specific provision (X(m)) will be zero (0). prices within the last 30 transaction days before the balance sheet date announced by the Stock
Exchange, is lower than the book value of the securities. In case of no transactions available within 30
Specific provision for each special bond is recognized in the consolidated income statement in days for such the securities prior to the balance sheet date, the Bank and its subsidiaries determine
“Provision expense for credit losses”. General provision is not required for the special bonds. the provision rate for each investment similar to other investments below.

Provision for special bonds issued by VAMC belonging to the Restructuring Plan is made in In other cases, at the balance sheet date, if the investments to the economic institutions are
compliance with the official approval of the SBV for the Post-merger Restructuring Plan and the impaired, the Bank and its subsidiaries make provision for such investments in accordance with
Bank’s proposal in the Restructuring Plan during the restructuring period (Note 3.4). Circular 48/2019/TT-BTC.

On settlement date of special bonds, interest receipt from recovering of debts is recognized into In other cases, at the balance sheet date, if the investments to the economic institutions are
“Interest and similar income”. impaired, the Bank and its subsidiaries makes provision for such investments in accordance with
Circular 48/2019/TT-BTC:
Other held-to-maturity investment securities
Parties’ actual
Other held-to-maturity investments include debt securities acquired by the Bank and its subsidiaries investment capital
for earning interest and which the Bank and its subsidiaries have the intention and ability to hold Actual rate of charter
at the business Actual equity capital of
capital (%) of the Bank at
to maturity. Held-to-maturity investments have fixed or determinable payments and maturity date. Level of provision for organization business organization at
= a business organization x -
In case these securities are sold before maturity, they will be reclassified to trading securities or investment
at the time of making the
receiving capital the time of making the
available-for-sale securities. contribution at the provision
provision
time of making the
provision
Held-to-maturity securities are recognized and measured similarly as debts securities available-
for-sale as described in Note 4.7.
If the business organization receiving capital contribution does not make its financial statement
4.9 Repurchase and reverse repurchase agreements at the same time with the Bank and its subsidiaries; the Bank and its subsidiaries shall not make
provision for investment in such organization.
Securities sold under agreements to repurchase at a specific date in the future are not derecognized
from the consolidated financial statements. The corresponding cash received is recognized in the Provision is reversed when the recoverable amount of the investment increases after the provision
consolidated balance sheet as a liability item. The difference between the sale price and repurchase made. Provision is reversed up to the extent that the carrying value of the investment does not
price is recognized to the consolidated income statement using contract interest rate. exceed the carrying value of this investment assuming that no provision is recognized.

180 181
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

4.11 Fixed assets 4.13 Depreciation and amortization

Depreciation and amortization of tangible and intangible fixed assets are calculated on a straight-
Fixed assets are stated at cost less accumulated depreciation or accumulated amortization.
line basis over the estimated useful life of the assets as follows:
The cost of a fixed asset comprises its purchase price plus any directly attributable costs of bringing Buildings and structures 5 - 50 years
the fixed asset to working condition for its intended use.
Machines and equipment 3 - 15 years

Expenditures for additions, improvements and renewals are added to the carrying amount of the Transportation vehicles 6 - 10 years
assets while expenditures for maintenance and repairs are charged to the consolidated income Other tangible assets 4 - 25 years
statement as incurred. Computer software 3 - 5 years

When fixed assets are sold or retired, any gain or loss resulting from their disposal (the difference Infinite land use rights of the Bank and its subsidiaries granted by the government are not amortized.
between the net disposal proceeds and the carrying amount) is included in the consolidated income Definite term land use rights are amortized over the term of use.
statement. 4.14 Receivables

4.12 Leased assets 4.14.1 Receivables classified as credit risk bearing assets
Receivables classified as credit risk bearing assets are recognized at cost. Classification and
The determination of whether an arrangement is, or contains a lease is based on the substance provision for doubtful receivables are made by the Bank as described in Note 4.6.
of the arrangement at inception date and requires an assessment of whether the fulfilment of the
arrangement is dependent on the use of a specific asset and the arrangement conveys a right to use 4.14.2 Other receivables
the asset. Receivables other than receivables classified as credit risk bearing assets are initially recognized at cost.

A lease is classified as a finance lease whenever the terms of the lease transfer substantially all Provision for receivables is set up based on the aging schedule of overdue receivables or expected
the risks and rewards of ownership of the asset to the lessee. All other leases are classified as losses which may occur in case where the receivables has not been due for payment but an economic
operating leases. organization is bankrupted or liquidated; or individual debtor is missing, run away, being prosecuted,
under a trial or serving sentences or dead. Provision expense occurred will be recognized into
Rentals under operating leases are charged to the other operating expense on a straight-line basis “Operating expenses” during the year.
over the term of the lease. For overdue receivables, the Bank and its subsidiaries make provision in compliance with Circular No.
48/2019/TT-BTC as follows:
4.12.1 The lessees
Overdue Provision rate
Rentals under operating leases are charged to the consolidated income statement on a straight-line From six (6) months up to less than one (1) year 30%
basis over the term of the lease.
From one (1) year up to less than two (2) years 50%
4.12.2 The lessors
From two (2) years up to less than three (3) years 70%
The Bank and its subsidiaries recognize the value of financial lease assets as receivables in the From three (3) years and above 100%
consolidated balance sheet using the net investment value in the finance lease contract. Receivables
from finance leases are recognized as principal receivables and financial income from the lessor’s 4.15 Prepaid expenses
investments and services. The Bank and its subsidiaries allocate financial income over the lease
Prepaid expenses are reported as short-term or long-term prepaid expenses on the consolidated
term based on the fixed rate of interest and the net finance lease investment.
balance sheet and amortized over the period for which the amount is paid or the period in which
economic benefit are generated in relation to these expenses.
The Bank and its subsidiaries recognize operating lease assets on the consolidated balance sheet.
Revenue from operating leases is recognized on a straight-line basis over the lease term, regardless 4.16 Due to other credit institutions, due to customers and value papers issued
of the payment method. Operating lease expenses, including depreciation of lease property, are Due to other credit institutions, due to customers and value papers issued are disclosed at the
recognized as an expense when incurred. principal amounts outstanding at the date of the consolidated financial statements.

182 183
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

4.17 Payables and accruals 4.20 Derivatives (continued)

Payables and accruals are recognized for amounts to be paid in the future for goods and services Currency option contracts (continued)
received, whether or not billed to the Bank and its subsidiaries.
The contractual value of currency option contracts is revaluated monthly at the spot rate at month
4.18 Fiduciary assets end. Unrealized gains or losses at each month end are recorded in foreign exchange difference and
Entrusted operations that the Bank bears no risks transferred to the consolidated income statement at the end of the year.

The Bank provides services of holding assets in trust or in a fiduciary capacity. Assets held in trust Cross currency interest rate swap contracts
or in a fiduciary capacity are not reported in the consolidated financial statements since they are not
assets of the Bank. For cross currency interest rate swap contracts, the interest difference between swap foreign
currencies are recognized in the consolidated income statement on an accrual basis.
Entrusted operations that the Bank bears all risks
4.21 Science and Technology Development Fund
The Bank receives entrusted funds from the trustor in order to grant loans to borrowers. The
Bank records loan balance granted from entrusted funds in the loans to customers account. The According to relevant regulations and Official Letter No. 10186/NHNN-TCKKT dated 24 December
accounting policy for loans granted to customers is in accordance with regulations of the SBV and 2009 of the SBV, the Science and Technology Development Fund is recognized immediately in
is described in Note 4.5 and 4.6. management expenses when the fund is set up and credited to a separate account in other payables.
4.19 Off-balance-sheet commitments Subsequently, the Fund will be used for fixed asset or operating expenses, which are specified in the
relevant regulations.
According to Circular 02, the Bank classifies guarantees, acceptances for payment and irrevocable
loan commitments with specific effective date (generally called “off-balance-sheet commitments”) 4.22 Equity
into different groups as regulated in Article 10, Circular 02 to control and monitor credit quality.
Accordingly, off-balance-sheet commitments are classified into groups such as Current, Special Charter capital
mention, Sub-standard, Doubtful and Loss based on the overdue status and other qualitative factors. Contributed capital from issuance of shares is recorded into to charter capital account at par value.
4.20 Derivatives
Share premium
Currency forward and swap contracts
The Bank records the difference between the par value and issue price of shares if the issue price is
The Bank involves in currency forward contracts and currency swap contracts to facilitate customers higher than par value, and the difference between the price of repurchasing of treasury stocks and
to transfer, modify or minimize foreign exchange risk or other market risks, and also for the trading the re-issue price of treasury stocks into the share premium account.
purpose of the Bank.
Forward contracts are commitments to either purchase or sell a designated currency at a specific Treasury shares
future date for a specific exchange rate and cash settlement. Forward contracts are recorded at Own equity instruments which are reacquired (treasury shares) are recognized at cost and deducted
nominal values at transaction dates and are subsequently revaluated at the end of the accounting from equity. No gain or loss is recognized in profit or loss upon purchase, sale, issue or cancellation
period. The difference on revaluation is recognized under “Foreign exchange differences” in the of the Bank’s own equity instruments.
equity section and is recorded in the consolidated income statement at the end of the financial year.
Statutory reserves
The swap contracts are commitments to settle in cash on a pre-determined future date based on
the difference between pre-determined exchange rates, calculated on the notional principal amount The Bank and Sacombank Leasing Co., Ltd
or commitments to settle interest based on a floating rate or a fixed rate calculated on the notional
amount and in a given period. The difference between spot rate and forward rate are recorded In accordance with the Law on Credit Institutions No. 47/2010/QH12 and Decree No. 93/2017/ND-
at contract date as assets or liabilities and are amortized to the consolidated income statement CP issued by the Government of Vietnam on the financial regimes applicable to credit institutions,
straight-line basis over the contract period. foreign bank branches, the Bank and Sacombank Leasing Company Limited are required to make
the following allocations to statutory reserves before distribution of profits:
Currency option contracts
Commitments in currency options are not recognized in the consolidated balance sheet. Fees for Basis for calculation Maximum balance
options paid or received are recorded as receivables or payables and are amortized on a straight- Capital supplementary reserve 5% of profit after tax 100% of charter capital
line to income or expense during the period of the contract.
Financial reserve 10% of profit after tax Not regulated

184 185
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4.22 Equity (continued) 4.23 Recognition of income and expenses (continued)

Statutory reserves (continued) Income and expense from sale of debts

Sacombank (Lao) Co., Ltd Income and expenses from the sale of debts are recognized in accordance with Circular No. 09/2015/
TT-NHNN issued by the SBV promulgating regulations on sale and purchase of debts by credit
According to the Law on Commercial Bank dated 16 January 2007, Sacombank (Lao) Co., Ltd. is institutions. Accordingly, the difference between the prices of debts purchased or sold and their book
required to use profits after tax to make the following allocations to following reserves before value is recorded as follows:
distribution of profits:
»» For debts recorded in the balance sheet:
»» Statutory reserves
• If the sale price is higher than the book value of the debt, the difference shall be recorded
»» Business development reserve and other reserves in the income for the period of the Bank and its subsidiaries;
In accordance with the regulations on capital Safety No. 1/BOL dated 28 August 2001 of the Governor • If the purchase or sale price is lower than the book value of the debt, the difference shall
of the Bank of Lao P.D.R and the other relevant guidelines, commercial banks are required to allocate be used to offset against the indemnity paid by an individual or guarantor (in case such
5% profits after tax to statutory reserves after deducting accumulated losses. This reserve is made individual or guarantor is determined to be responsible for the damage and obliged to make
until its balance reach 10% of capital tier 1. Based on the requirement, the Board of Management indemnity under prevailing regulations), or the compensation paid by the insurer, or use
will determine the specific ratio for each year. Business development and other reserves are made of outstanding provision recognized as expense previously. The remaining balance (if any)
based on the decision of the Board of Management. shall be recognized as an operating expense of the Bank and its subsidiaries for the year.

Sacombank Asset Management Co., Ltd »» For debts written off and monitored off balance sheet, the proceeds from sale of debts shall be
recognized as other income of the Bank and its subsidiaries.
In accordance with Circular No. 27/2002/TT-BTC dated 22 March 2002 issued by Ministry of Finance,
reserves of subsidiary were made in accordance with the Bank’s regulation as described above. Book value of debts purchased and sold is the book value of the principal, interest and related
financial obligations (if any) of debts recorded in the balance sheet or the off balance sheet at the
Other reserves date of debt purchase or sale; or the book value at the date of writing-off of debts; or the book value
of debts written off previously at the date of debt purchase and sale.
Other equity reserves will be allocated from profit after tax. The allocation from profit after tax and
utilization of reserves must be approved by the General Meeting of Shareholders. These reserves Debt purchase and sale price are the sum of money to be paid by a debt purchaser to a debt seller
are not regulated by statutory and allowed to be fully allocated. under a debt purchase and sale contract.

4.23 Recognition of income and expenses Other income

Interest income and interest expenses Receivables which have recorded as income but then they are assessed to be uncollectable or are
not collected at maturity date will be recognized as a reduction of income when are incurred in
Interest income and interest expenses are recognized in the consolidated income statement on an the same period or recognized as expense when incurred in a different period and monitored off-
accrual basis. The recognition of accrued interest income is suspended when a loan is classified in balance sheet, then recognized in the consolidated income statement upon actual receipt.
groups 2 to 5 according to Circular 02 except for some accrued interest receivables recognized in
accordance with the official approval of the SBV for the Post-merger Restructuring Plan and the 4.24 Corporate income tax (“CIT”)
Bank’s proposals in the Restructuring Plan during the restructuring period (Note 3.4). Suspended
interest income is reversed and monitored off-balance-sheet and recognized in the consolidated 4.24.1 Current income tax
income statement upon actual receipt. Current income tax assets and liabilities for the current and prior years are measured at the amount
Fees and commissions income expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to
compute the amount are those that are effective as at the consolidated balance sheet date.
Fees and commissions are recognized when services are provided.
Current income tax is charged or credited to the consolidated income statement, except when it
Income from investment relates to items recognized directly to equity, in which case the current income tax is also dealt with
in equity.
Income from securities investment is recognized on the difference between the selling price and
cost of the securities sold. Current income tax assets and liabilities are offset when there is a legally enforceable right for the
Bank and its subsidiaries to set off current tax assets against current tax liabilities and when the
Cash dividends from equity investment are recognized income when the Bank and its subsidiaries’ Bank and its subsidiaries intend to settle its current tax assets and liabilities on a net basis.
right to receive the payment is established. For stock dividends and bonus shares, the number of
shares is just updated and no dividend income is recognized in the consolidated income statement.
186 187
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4.24 Corporate income tax (“CIT”) (continued) 4.24 Corporate income tax (“CIT”) (continued)
4.24.1 Current income tax (continued)
4.24.2 Deferred tax (continued)
The Bank and its subsidiaries’ tax returns are subject to examination by the taxation authorities.
Since the application of tax laws and regulations to many types of transactions are susceptible to The Bank and its subsidiaries are only allowed to offset deferred income tax assets and deferred
varying interpretations, amounts reported in the consolidated financial statements could be changed income tax payable when the Bank has a legally enforceable right to offset current income tax
at a later date upon final determination by the taxation authorities. assets with current income tax payable and deferred income tax assets and deferred income tax
4.24.2 Deferred tax liabilities related to corporate income tax managed by the same tax authority on:

Deferred tax is provided for temporary differences at the consolidated balance sheet date between »» either the same taxable entity; or
the tax base of assets and liabilities and their carrying amount recorded in consolidated financial
»» The Bank and its subsidiaries intend either settle current tax liabilities and assets on a net basis,
reporting purposes.
or to realise the assets and settle the liabilities simultaneously, in each future period in which
Deferred tax liabilities are recognized for all taxable temporary differences, except: significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
»» Where the deferred tax liability arises from the initial recognition of an asset or liability in a
4.25 Foreign currency transactions
transaction which at the time of the related transaction affects neither the accounting profit nor
taxable profit or loss. Foreign currency transactions
»» In respect of taxable temporarily differences associated with investments in subsidiaries
and associates, and interests in joint ventures where timing of the reversal of the temporary In accordance with the accounting system of the Bank and its subsidiaries, all transactions are
difference can be controlled and it is probable that the temporary difference will not reverse in recorded in original currencies. Monetary assets and liabilities denominated in foreign currencies
the foreseeable future. are translated into VND using exchange rates ruling at the consolidated balance sheet (Note 47).
Deferred tax assets are recognized for all deductible temporary differences, carried forward unused Income and expenses arising in foreign currencies during the year are converted into VND at
tax credit and unused tax losses, to the extent that it is probable that taxable profit will be available rates ruling at the transaction dates. Foreign exchange differences arising from the translation of
against deductible temporary differences, carried forward unused tax credit and unused tax losses monetary assets and liabilities are recognized and followed in the “Foreign exchange differences”
can be recognized, except: under “Owners’ Equity” section and will be transferred to the consolidated income statement at the
end of the financial year.
»» Where the deferred tax asset in respect of deductible temporary difference which arises from
the initial recognition of an asset or liability which at the time of the related transaction, affects Overseas activities
neither the accounting profit nor taxable profit or loss.
»» In respect of deductible temporarily differences associated with investments in subsidiaries, The currency used in separate financial statements of foreign subsidiaries (including Sacombank
associates, and interests in joint ventures, deferred tax assets are recognized only to the extent (Cambodia) Plc. and Sacombank (Lao) Plc.) are US dollar and Lao KIP. The separate financial
that it is probable that the temporary differences will reverse in the foreseeable future and statements of these overseas subsidiaries are converted based on the principles as follows:
taxable profit will be available against which the temporary differences can be utilized.
The carrying amount of deferred income tax assets is reviewed at each consolidated balance sheet a) Assets and liabilities (both monetary and non-monetary items) of foreign subsidiaries are
date and reduced to the extent that it is no longer probable that sufficient taxable profit will be translated using exchange rates ruling at the consolidated balance sheet date;
available to allow all or part of the deferred income tax asset to be utilized. Previously unrecognized
deferred income tax assets are re-assessed at each consolidated balance sheet date and are b) Revenues, other incomes and expenses of foreign subsidiaries are translated at the average
recognized to the extent that it has become probable that future taxable profit will allow the deferred exchange rate;
tax assets to be recovered.
Foreign exchange differences arising from the translation of financial statements are recognized in the
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply foreign exchange differences in the owners’ equity.
in the period when the asset is realized or the liability is settled based on tax rates and tax laws that
4.26 Offsetting
have been enacted at the consolidated balance sheet date.
Financial assets and financial liabilities are offset and reported at the net amount in the consolidated
Deferred tax is charged or credited to the consolidated income statement, except when it relates
balance sheet if, and only if, the Bank and its subsidiaries have an enforceable legal right to offset
to items recognized directly to equity, in which case the deferred tax is also dealt with in the equity
financial assets against financial liabilities and the Bank its subsidiaries have intention to settle on a
account.
net basis, or the realization of the assets and settlement of liabilities is made simultaneously.

188 189
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 6. BALANCES WITH THE CENTRAL BANK (continued)
4.27 Employee benefits (a) Balances with the SBV include settlement and compulsory deposits. The average balance of
compulsory deposits of the Bank at the SBV is not less than the compulsory deposits in the
4.27.1 Post-employment benefits month. The compulsory deposits are calculated by multiplying previous month average deposit
balances of each deposit category and respectively compulsory deposit rates.
Post-employment benefits are paid to retired employees of the Bank by the Social Insurance Agency
which belongs to the Ministry of Labor and Social Affairs. The Bank and its subsidiaries are required The compulsory deposit rates are as follows:
to contribute to these post-employment benefits by paying social insurance premium to the Social
Insurance Agency at the rate of 17.50% of an employee’s basic salary on a monthly basis. Besides,
the Bank and its subsidiaries have no further obligation of post-employee benefits. Ending balance Beginning balance
% p.a. % p.a.
4.27.2 Voluntary resignation benefits For customers
Demand deposits and deposit with term less than 12 months in VND 3.00 3.00
The Bank and its subsidiaries have the obligation, under Section 48 of the Vietnam Labor Code
No.10/2012/QH13 effective from 1 May 2013, to pay allowance arising from voluntary resignation Deposits with term over 12 months in VND 1.00 1.00
of employees, equal to one-half month’s salary for each year of employment up to 31 December Demand deposits and deposit with term less than 12 months in
8.00
2008 plus salary allowances (if any). From 1 January 2009, the average monthly salary used in this foreign currencies 8.00
calculation is the average monthly salary of the latest six-month period up to the resignation date. Deposits with term over 12 months in foreign currencies 6.00 6.00
For overseas credit institutions
4.27.3 Unemployment insurance
Deposits in foreign currencies 1.00 1.00
According to the current regulations on unemployment insurance, the Bank and its subsidiaries are
obliged to pay unemployment insurance at 1.00% of its salary fund used to pay for unemployment The actual annual interest rates on deposits with the SBV are as follows:
insurance and deduct 1.00% of salary of each employee to pay simultaneously to the Unemployment
Insurance Fund. Ending balance Beginning balance
% p.a. % p.a.
5. CASH, GOLD AND GEMSTONES
Within the limit of compulsory deposits in VND 0.80 1.20
Within the limit of compulsory deposits in USD 0.00 0.00
Ending balance Beginning balance
VND million VND million Exceeding the limit of compulsory deposits in VND 0.00 0.00
In VND 5,314,947 3,751,609 Exceeding the limit of compulsory deposits in USD 0.05 0.05
In foreign currencies 2,540,641 2,410,900
(b) Deposits at the Bank of Lao P.D.R include deposits in Lao Kip (“LAK”) and currencies other than
Gold 336,285 131,355 LAK relating to activities of the Bank’s subsidiary in the Lao People’s Democratic Republic and
Jewelry 65,988 76,587 compulsory deposits following the regulations of the Bank of Lao P.D.R.
Gemstones and others 11,512 9,098
The compulsory deposit rates are as follows:
8,269,373 6,379,549

6. BALANCES WITH THE CENTRAL BANK Ending balance Beginning balance

% p.a. % p.a.
Ending balance Beginning balance Deposit with term less than 12 months in LAK 5.00 5.00
VND million VND million Deposits with term over 12 months in LAK 0.00 0.00
Balances with the State Bank of Vietnam (“SBV”) (a) Deposit with term less than 12 months in currencies other than LAK 10.00 10.00
- In VND 10,077,297 7,746,360 Deposits with term over 12 months in curren-cies other than LAK 0.00 0.00
- In foreign currencies 939,332 867,075
Balance with the Bank of Lao P.D.R (b) 339,172 386,745
Balance with the National Bank of Cambodia (c) 754,060 611,322
12,109,861 9,611,502

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

6. BALANCES WITH THE CENTRAL BANK (continued) 7. DUE FROM AND LOANS TO OTHER CREDIT INSTITUTIONS (continued)

(c) Deposits at the National Bank of Cambodia include deposits in Cambodia Riel (“KHR”) and 7.2 Loans to other credit institutions
currencies other than KHR relating to activities of the Bank’s subsidiary in the People’s Republic
of Cambodia and compulsory deposits following the regulations of the National Bank of Cambodia. Ending balance Beginning balance
The compulsory deposits are calculated by multiplying average deposit balances and compulsory VND million VND million
deposit rates.
In VND 48,931 552
The compulsory deposit rates are as follows: In foreign currencies 385,178 374,166
434,109 374,718
Ending balance Beginning balance Provision for credit losses - (552)
% p.a. % p.a. 434,109 374,166
Deposits in KHR 8.00 8.00
7.3 Analysis term deposits and loans to other credit institutions by quality
Deposits in currencies other than KHR 12.50 12.50

Reserves of 8.00% in KHR is interest free, reserve of 12.50% in currencies other than KHR earns Ending balance Beginning balance
interest at the rate prescribed by the National Bank of Cambodia on the determination of interest VND million VND million
rates on term deposits. Current 5,137,650 1,133,811
Loss - 552
7. DUE FROM AND LOANS TO OTHER CREDIT INSTITUTIONS 5,137,650 1,134,363

7.1 Due from other credit institutions

8. DERIVATIVES AND OTHER FINANCIAL ASSETS
Ending balance Beginning balance
VND million VND million Total contract nominal Carrying value
value (using the (using the exchange rate
Demand deposits 8,013,265 3,688,643 at the balance sheet date)
exchange rate at the
- In VND 901,341 1,791,613
effective date) Assets Liabilities
- In foreign currencies 7,111,924 1,897,030 VND million VND million VND million
Term deposits 4,703,541 759,645 Currency derivative financial
- In VND 4,600,000 450,000 instruments as at 31 December 2019

- In foreign currencies 103,541 309,645 Forward contracts 1,321,691 129 -

12,716,806 4,448,288 Swap contracts 20,785,138 24,336 -

22,106,829 24,465 -
The annual interest rates of term deposits at other credit institutions are as follows: Net value 24,465
Option transactions
Ending balance Beginning balance
Selling currency option 10,641 - 79
% p.a. % p.a.
Net amount 79
In VND 2.40 - 4.00 4.90 - 5.50

In foreign currencies 3.20 - 6.50 2.00 - 6.50

192 193
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

8. DERIVATIVES AND OTHER FINANCIAL ASSETS (continued) 9. LOANS TO CUSTOMERS (continued)

Total contract Carrying value 9.2 Analysis of loans by original term

nominal value (using the exchange rate
(using the exchange at the balance sheet date) Ending balance Beginning balance
rate at the effective VND million VND million
date) Assets Liabilities Short-term loans 153,783,211 123,168,464
VND million VND million VND million
Medium-term loans 60,080,130 56,710,314
Currency derivatives financial
instruments as at 31 December 2018 Long-term loans 82,166,433 76,743,975

Forward contracts 2,235,933 - 5,894 296,029,774 256,622,753

Swap contracts 7,238,536 27,204 -

9.3 Analysis of loans by currency
9,474,469 27,204 5,894
Net value 21,310 Ending balance Beginning balance
Option transactions VND million % VND million %
Selling currency option 41,894 - 129 In VND 283,292,411 95.70 244,748,955 95.37
Net amount 129 In foreign currencies 12,737,363 4.30 11,873,798 4.63
296,029,774 100.00 256,622,753 100.00
9. LOANS TO CUSTOMERS
9.4 Analysis of loans by type of customer and ownership
Ending balance Beginning balance
VND million VND million
Ending balance Beginning balance
Loans to domestic economic entities and individuals 288,105,299 249,629,153
VND million % VND million %
Loans to foreign economic entities and individuals 5,844,778 5,217,634
Loans to corporations 113,085,691 38.20 100,371,382 39.11
Finance leases 1,919,023 1,688,394
Other private limited companies 60,435,650 20.42 54,026,682 21.05
Discounted transferrable instruments and valuable papers 157,317 81,600
Other joint stock companies 42,559,351 14.38 37,833,875 14.74
Loans financed by grants and entrusted funds - 708
Private companies 3,985,711 1.35 3,840,003 1.50
Other loans 3,357 5,264
State-owned companies 2,850,884 0.96 1,310,915 0.51
296,029,774 256,622,753
Foreign invested companies 1,517,423 0.51 1,289,460 0.50

9.1 Analysis of loans by quality One-member limited liability companies of which

338,835 0.11 602,153 0.23
100% charter capital is held by the State
Cooperatives and inter-cooperatives 231,143 0.08 283,430 0.11
Ending balance Beginning balance
VND million VND million Limited liability companies with two or more
members of which more than 50% of the charter 148,187 0.05 179,706 0.07
Current 289,470,048 250,019,193
capital is held or controlled by the State
Special mention 826,400 1,141,055
The joint stock company of which over 50% of share
Sub-standard 298,378 193,601 capital or the total voting share capital is held or 103,026 0.03 61,114 0.02
Doubtful 412,614 311,452 controlled by the State under the company's charter

Loss 5,022,334 4,957,452 Business household and individuals 22,207 0.01 17,906 0.01

296,029,774 256,622,753 Partnerships 5,682 0.01 2,022 0.01

Others 887,592 0.29 924,116 0.36
Included in the balances of loss loans as at 31 December 2019 were some loans amounting to Loans to individuals 182,944,083 61.80 156,251,371 60.89
VND3,173,763 million (31 December 2018: VND3,382,638 million), of which the provision were made
296,029,774 100.00 256,622,753 100.00
upon the Bank’s financial capability according to the Post-merger Restructuring Plan approved by
the SBV as described in Note 3.4.

194 195
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

9. LOANS TO CUSTOMERS (continued) 10. PURCHASED DEBTS

9.5 Analysis of loans by economic sectors Ending balance Beginning balance

VND million VND million
Ending balance Beginning balance Purchased debts by foreign currencies 426,769 549,040
VND million % VND million % Provision for purchased debts (3,316) (4,254)
Administrative activities and supporting services 88,220,010 29.80 43,918,119 17.11 423,453 544,786
Activities of households as employers,
undifferentiated goods and services producing 39,634,084 13.39 40,549,911 15.80 The principal value of the purchased debts is as follows:
activities of households for own use

Agriculture, forestry and fisheries 34,333,655 11.60 29,459,684 11.48 Ending balance Beginning balance
VND million VND million
Trading, repair of motor vehicles, motorcycles and
28,976,620 9.79 26,246,366 10.23 Principal value of the purchased debts 822,534 823,279
other vehicles

Real estate trading and consulting services 25,318,931 8.55 37,071,273 14.45 Results of the loan classification as at 30 November 2019 and provision for purchased debts as
Manufacturing and processing 22,291,058 7.53 22,948,817 8.94 required by Circular 02, Circular 09 and the Bank’s policy on loan classification and provision are as
follows:
Construction 15,200,532 5.13 15,749,092 6.14

Education and training 5,501,704 1.86 5,515,346 2.15 Outstanding

Transportation, warehousing and communication 4,743,371 1.60 4,198,617 1.64 balance Specific provision General provision Total provision
Classification VND million VND million VND million VND million
Finance services, banking and insurance activities 3,571,999 1.21 2,970,855 1.16
Current 442,081 - (3,316) (3,316)
Health and social support activities 2,781,695 0.94 2,131,205 0.83

Electricity, gas, steam and air conditioning supply 2,734,564 0.92 2,865,568 1.12 Movements of provision for purchase debts in current year are as follows:

Hotels and accommodation services 2,340,325 0.79 2,802,819 1.09

Specific provision General provision Total provision
Mining exploration 1,184,784 0.40 1,277,682 0.50 VND million VND million VND million
Activities of Communist Party, socio-political As at 1 January 2019 - 4,254 4,254
organization, public administration and defense; 1,024,049 0.35 861,218 0.34 Reversal during the year - (938) (938)
compulsory security
As at 31 December 2019 - 3,316 3,316
Arts, entertainment and recreation 430,427 0.15 389,026 0.15
Movement of provision for purchase debts in previous year are as follows:
Science and technology activities 262,508 0.09 160,821 0.06

Information and communication 143,808 0.05 94,442 0.04

Specific provision General provision Total provision
Water supply; sewerage, waste management and VND million VND million VND million
43,897 0.01 66,484 0.03
remediation activities As at 1 January 2018 - 4,979 4,979
Others 17,291,753 5.84 17,345,408 6.74 Reversal during the year - (725) (725)
296,029,774 100.00 256,622,753 100.00 As at 31 December 2018 - 4,254 4,254

196 197
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

11. PROVISION FOR CREDIT LOSSES 11. PROVISION FOR CREDIT LOSSES (continued)

Provision for credit losses at the year-end comprised of: 11.1 Provision for loans to customers (continued)

Ending balance Beginning balance The movements of provision for loans to customers during the previous year are as follows:
Notes VND million VND million
Provision for due from and loans to other credit Specific provision General provision Total
7.2 - 552 VND million VND million VND million
institutions
Provision for purchased debts 10 3,316 4,254 As at 1 January 2018 1,151,837 1,597,041 2,748,878
Provision for loans to customers 11.1 3,971,059 3,522,642 Provision charged during the year 824,296 248,231 1,072,527
Provision for special bonds issued by VAMC 12.3 3,936,323 2,569,707 Provision used to write-off loans sold to VAMC in
(297,967) - (297,967)
the year
Provision for credit risk bearing assets 15.4 329,459 152,519
Provision used to write-off loans in the year (7,986) - (7,986)
8,240,157 6,249,674
Foreign exchange differences 6,784 406 7,190
Provision expenses for credit losses during the year are as follows: As at 31 December 2018 1,676,964 1,845,678 3,522,642

Current year Previous year 12. INVESTMENT SECURITIES

Notes VND million VND million
12.1 Available-for-sale securities
Provision reversal for purchased debts 10 (938) (725)
Provision reversal for due from and loans to other
credit institutions
(552) - Ending balance Beginning balance
VND million VND million
Provision expenses for loans to customers 11.1 609,684 1,072,527
Debt securities 46,663,579 37,762,291
Provision expenses for special bonds issued by VAMC 12.3 1,367,755 620,387 Government bonds (a) 43,913,270 37,659,180
Provision reversal for securities held-to-maturity 12.3 - (15,000) Bonds and certificates of deposit issued by other domestic credit institutions (b) 2,750,309 50,459
Provision expenses/(reversal) for credit-risk bearing assets 15.4 176,940 (85,075) Foreign debts securities - 52,652
Equity securities 226,440 226,441
2,152,889 1,592,114
Equity securities issued by other domestic credit institutions (c) 163,690 163,690
Equity securities issued by domestic economic entities 62,171 62,171
11.1 Provision for loans to customers
Foreign equity securities 579 580
As described in Note 3.4, for the loans included in the Restructuring Plan, the Bank is allowed to 46,890,019 37,988,732
make provision for credit losses based on its financial capability during the restructuring period in Provision for available-for-sale securities
accordance with the official approval of the SBV. Balance of these loans is presented in Note 9.1. Diminution provision (103,388) (137,819)
46,786,631 37,850,913
The movements of provision for loans to customers during the current year are as follows:
(a) Government bonds have terms from 5 years to 10 years and bear interest at rates ranging from
Specific provision General provision Total 2.90% p.a. to 11.10% p.a., interest is paid annually. In which, some bonds with carrying value of
VND million VND million VND million VND3,620,853 million (31 December 2018: VND8,540,785 million) have been used as collateral for
As at 1 January 2019 1,676,964 1,845,678 3,522,642 the credit limit to borrow from other credit institutions and the SBV (Note 35.2). At 31 December
2019, the Bank has not used any of these limits.
Provision charged during the year 299,571 310,113 609,684
Provision used to write-off loans during the year (166,046) - (166,046) (b) Bonds and certificates of deposit issued by domestic credit institutions have terms from 1 year
Other increase - 5,904 5,904 to 15 years and bear interest at rates ranging from 6.80% p.a. to 9.00% p.a., interest is paid
annually. In which, some bonds with carrying value of VND50,309 million (31 December 2018:
Foreign exchange differences (672) (453) (1,125)
VND50,459 million) have been used as collateral for the credit limit to borrow from the SBV
As at 31 December 2019 1,809,817 2,161,242 3,971,059 (Note 35.2). At 31 December 2019, the Bank has not used any of these limits.

198 199
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

12. INVESTMENT SECURITIES (continued) 12. INVESTMENT SECURITIES (continued)

12.1 Available-for-sale securities (continued) 12.3 Provision for investment securities

(c) This balance represents the share value of one (1) domestic credit institution and was transferred The movement of provision for investment securities during the year are as follows:
from Southern Commercial Joint Stock Bank after the merger. The Bank is resolving this
investment in accordance with the official approval of the SBV for the Post-merger Restructuring Current year Previous year
Plan and the Bank’s proposals in the Restructuring Plan (Note 3.4). VND million VND million
Beginning balance
Listing status of available-for-sale securities are as follows: Available-for-sale securities 137,819 121,235
Held-to-maturity securities
- 15,000
Ending balance Beginning balance (excluded special bonds issued by VAMC)
VND million VND million Special bonds issued by VAMC 2,569,707 1,949,320
Debt securities 46,663,579 37,762,291 2,707,526 2,085,555
Provision charged/(reversed) in the year
Listed 43,963,579 37,709,639
Available-for-sale securities (34,431) 16,584
Unlisted 2,700,000 52,652 Held-to-maturity securities
- (15,000)
Equity securities 226,440 226,441 (excluded special bonds issued by VAMC)
Unlisted 226,440 226,441 Special bonds issued by VAMC 1,367,755 620,387
1,333,324 621,971
46,890,019 37,988,732
Provision used to write-off bad debts
Special bonds issued by VAMC (1,139) -
12.2 Held-to-maturity securities Ending balance
Available-for-sale securities 103,388 137,819
These are special bonds issued by Vietnam Asset Management Company (“VAMC”) to purchase bad Held-to-maturity securities
debts of the Bank and its subsidiaries. These bonds have term from five (5) years to ten (10) years - -
(excluded special bonds issued by VAMC)
and bear interest at rate of 0.00%. Par value of these special bonds is the difference between the Special bonds issued by VAMC 3,936,323 2,569,707
outstanding loan balance and the corresponding unused specific provision at the purchasing date.
4,039,711 2,707,526

Movement of VAMC bonds during the year are as follows:

13. LONG-TERM INVESTMENTS
Ending balance Beginning balance
Ending balance Beginning balance
VND million VND million
VND million VND million
Beginning balance 40,233,215 43,266,699
Investment in other credit institutions
Increase from selling debts to VAMC during the year - 2,124,230 Unlisted 1,634 1,634
Settlement during the year (6,586,026) (5,157,714) Investment in economic entities
Ending balance 33,647,189 40,233,215 Unlisted 297,337 318,843
Total other long-term investments 298,971 320,477
Included in the balance of special bonds issued by VAMC as at 31 December 2019 were special Provision for other long-term investments (195,117) (177,864)
bonds amounting to VND24,161,048 million (31 December 2018: VND26,820,564 million), which was 103,854 142,613
originated from the loans under Restructuring Plan. The principal of these loans was VND24,388,104
million (31 December 2018: VND27,047,584 million). The Bank is allowed to make provision for these Movements in provision for long-term investment in the year are as follows:
bonds upon its financial capability in accordance with the official approval of the SBV as described
in Note 3.4.
Current year Previous year
VND million VND million
Beginning balance 177,864 156,750
Provision charged during the year 17,253 21,114
Ending balance 195,117 177,864

200 201
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

14. FIXED ASSETS (continued)

cost of VND53,012 million. The accounting policy applied for these assets differs from other similar assets. Accordingly, the depreciation
Included in the machines and equipment balance are the assets financed by Science and Technology Development Fund with historical
408,498
7,448,991

2,470,377

4,617,730
4,697,387
7,369

382,519

(202,737)
(15,025)
Total
VND million

7,088,107
188,758

3,894

(125,257)
(5,908)
2,751,604
14.1 Tangible fixed assets (continued)

Other information on tangible fixed assets as follows:

Ending balance Beginning balance

33,576
346,732

126,648
(18,521)
(2,446)
-

9,273

148,783

195,514
197,949
Other
vehicles tangible assets
VND million

322,162
36,264

(10,182)
(1,259)
VND million VND million
Net carrying value of tangible fixed assets that are temporarily not
153,330 160,708
in use
Fully depreciated tangible fixed assets that are still in use 485,639 330,641

14.2 Intangible fixed assets

61,653
695,298

310,055
(37,346)
(386)

343,396
357,823
-

23,817

(304)
337,475
Transportation

VND million

653,451
55,762

(33,929)
Computer
Land use rights software Others Total
VND million VND million VND million VND million
Cost
Beginning balance 3,613,144 959,957 484 4,573,585
2,247,101

1,153,947
196,917
(35,096)
(40)

769,012
926,309
6,644

260,538

(39)
1,320,792
Machines and
equipment
VND million

1,922,959
92,096

3,894

(33,927)
Increase from upgrading 39,919 221 120 40,260

of these assets is funded by the Science and Technology Development Fund.

Transferred from construction in
progress and advances for purchases 4,221 271,148 - 275,369
of fixed assets
Disposals (209,256) (107) - (209,363)
Foreign exchange differences (1,504) (637) - (2,141)
4,159,860

879,727
116,352
(111,774)
(12,153)

3,309,808
3,215,306
725

88,891

(4,306)
944,554
Building and
structures
VND million

4,189,535
4,636

(47,219)

Ending balance 3,446,524 1,230,582 604 4,677,710

Accumulated amortization
Beginning balance 198,065 743,114 484 941,663
Amortization during the year 29,205 118,261 20 147,486
Disposals (3,390) (107) - (3,497)
Foreign exchange differences - (523) - (523)
and advances for purchases of fixed assets
Transferred from construction in progress

Ending balance 223,880 860,745 504 1,085,129

Net book value
Charges to Science and Technology

Beginning balance 3,415,079 216,843 - 3,631,922

New purchases during the year

Foreign exchange differences

Foreign exchange differences

Ending balance 3,222,644 369,837 100 3,592,581

Depreciation during the year
Accumulated depreciation
Increase from upgrading
Tangible fixed assets

Other information on intangible fixed assets as follows:

Beginning balance

Beginning balance
Beginning balance
FIXED ASSETS

Development Fund

Ending balance Beginning balance

Ending balance

Ending balance
Ending balance
Net book value

VND million VND million

Disposals

Disposals

Net carrying value of intangible fixed assets that are temporarily

816,987 1,004,238
not in use
Cost

Fully amortized intangible fixed assets that are still in use 610,911 560,308
14.1
14.

202 203
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

15. OTHER ASSETS 15. OTHER ASSETS (continued)

15.1 Receivables 15.1 Receivables (continued)

Ending balance Beginning balance (b) Other receivables comprised of:

VND million VND million
Constructions in progress and advances for purchases of fixed Ending balance Beginning balance
640,961 696,992 VND million VND million
assets (a)
Other receivables (b) 21,617,904 23,032,959 Internal receivables 572,146 2,278,947
22,258,865 23,729,951 Advances for operations 339,482 2,044,087
Advances for construction of FICO building (i) 216,693 216,693
(a) This account presents constructions in progress and advances for purchases of fixed assets of Others 15,971 18,167
branches and transaction offices. Movements of this account during the year are as follows:
External receivables 21,045,758 20,754,012
Receivables from sale of foreclosed assets (v) 7,091,350 8,280,000
Current year Previous year
VND million VND million Foreclosed assets (ii) 5,168,834 5,972,053
Beginning balance 696,992 548,606 Receivables relating to intermediary and electronic support
2,470,376 1,410,219
Increased during the year 648,637 714,452 payment services
Transferred to tangible fixed assets (382,519) (416,506) Receivables related to usance letter of credit 1,909,299 -
Transferred to intangible fixed assets (275,369) (120,241) Receivables from reverse repurchase agreements of securities (iii) 1,645,387 1,857,465
Transferred to deferred expenses and other operating expenses (46,968) (29,319) Receivables from Southern Jewelry Joint Stock Company (iv) 503,639 503,639
Other increase 188 - Receivables from insurance agent services 426,000 335,000
Ending balance 640,961 696,992
Receivables from card organizations 386,219 606,385

Constructions in progress and advances for purchases of fixed assets comprised of: Receivables from disposal of securities (vi) 381,151 451,369
Receivables from selling debts (ix) 190,769 347,300
Ending balance Beginning balance Receivables from deposits for office rental 160,706 136,733
VND million VND million Receivable from sale of a part of FICO building (vii) 158,204 158,204
Construction work at branches 140,439 53,481
Receivables from foreign remittance services 79,746 83,722
Office building in Tan Binh District, Ho Chi Minh City 89,800 89,300
Office building in Tay Ninh Town, Tay Ninh Province 71,062 71,062 Margin deposits for commodity future contracts 66,624 58,254
Digital wallet Sacombank Pay 51,824 30,438 Receivable from investment in Southern Jewelry Joint Stock
64,800 64,800
Loan origination System (LOS) 47,694 23,967 Company (viii)
Basel II Project 41,351 45,775 Deposits and pledges 48,043 157,420
Office building in Tan Phu District, Ho Chi Minh City 37,609 37,609 Receivable from disposal of convertible bonds of Sacombank
T24 Corebanking upgrade 25,207 92,549 41,000 41,000
Securities Company
Internet Banking and Moblie banking system upgrade 15,396 -
Receivables from the State Budget relating to interest subsidy
Uninterruptible Power Supply (“UPS”) system 10,029 - 27,535 27,535
program
Customer Relationship Management solution Project - 82,878
Tax advance 2,494 2,619
Other constructions in progress 110,550 169,933
640,961 696,992 Others 223,582 260,295
21,617,904 23,032,959
The Bank and its subsidiaries have entered into agreements to purchase these assets and made
partial or full payments. As at 31 December 2019, the Bank and its subsidiaries are still in process Internal receivables:
of implementing necessary procedures to complete the transfer of ownership to the Bank and its
subsidiaries in accordance with the current regulations. (i) This balance related to the advance for purchasing a part of FICO building at No. 927 Tran Hung
Dao, District 5, Ho Chi Minh City. As at the report date, the Bank is implementing necessary
procedures to transfer the ownership in accordance with prevailing regulations.

204 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

15. OTHER ASSETS (continued) 15. OTHER ASSETS (continued)

15.1 Receivables (continued) 15.2 Interest and fees receivable
(b) Other receivables comprised of (continued): Ending balance Beginning balance
External receivables in the Restructuring Plan: VND million VND million
Interest receivables from loans to customers (i) 16,735,452 20,561,468
External receivable items (ii), (iii) and (iv) included receivables being resolved and collected in Interest receivables from investments (ii) 1,803,357 1,582,947
accordance with the official approval of the SBV for the Post-merger Restructuring Plan and the
Interest receivables from reverse repurchase agreements of
Bank’s proposals in the Restructuring Plan as described in Note 3.4. 912,556 912,556
securities (iii)
(ii) These foreclosed assets are in the process of completing transfer of ownership to the Bank or Interest receivable from entrusted investment (iv) 51,612 51,612
are being resolved for collection. They include VND4,812,695 million as at 31 December 2019 Interest receivables from due from and loans to other credit
15,735 26,799
(31 December 2018: VND5,448,014 million) of foreclosed assets, which were transferred from institutions
Southern Commercial Joint Stock Bank. Receivables from derivatives 11,411 9,502
Interest receivables from finance lease 6,540 6,627
(iii) These receivables, which were derived from reverse repurchase agreements of securities
Interest receivables from purchased debts 2,217 3,097
of Southern Commercial Joint Stock Bank upon merger are secured by underlying shares.
19,538,880 23,154,608
Included in these receivables are VND1,106,039 million which have been proposed by the Bank
to sell to VAMC in accordance with the Restructuring Plan approved by the SBV. As at the report (i) Included in interest receivables from loans to customers as at 31 December 2019 are interest
date, the procedures for selling these receivables to VAMC have not been completed and the receivables amounting to VND13,689,337 million (31 December 2018: VND17,719,696 million)
Bank is making partial provision for these receivables. being blocked and amortized to profit and loss based on the Bank’s financial capability over a
maximum period of 10 years in accordance with the official approval of the SBV for the Post-merger
(iv) These receivables were resulted from gold trading activities between Southern Jewelry Joint
Restructuring Plan and the Bank’s proposals in the Restructuring Plan as described in Note 3.4.
Stock Company and Southern Commercial Joint Stock Bank before the merger and are secured
by shares with par value of VND510,857 million. These receivables are proposed by the Bank to (ii) Included in interest receivables from investments as at 31 December 2019 and 31 December 2018
sell to VAMC in accordance with the Restructuring Plan approved by the SBV. As at the report are interest receivables from bonds amounting to VND224,537 million which were received from
date, the procedures for selling these receivables to VAMC have not been completed and the Southern Commercial Joint Stock Bank. The Bank is allowed to block these interest receivables
Bank is making partial provision for these receivables. and amortize to profit and loss based on its financial capability over a maximum period of 10 in
accordance with the official approval of the SBV for the Post-merger Restructuring Plan and the
Other external receivables:
Bank’s proposals in the Restructuring Plan as described in Note 3.4.
(v) These receivables are related to the auction of collaterals located in Duc Hoa III Industrial Park,
(iii) This balance represents interest receivables from reverse repurchase agreements of securities (Note
Duc Hoa District, Long An Province. The Bank entered into contracts with counterparty on 29
15.1 (iii)) which were received from Southern Commercial Joint Stock Bank. The Bank is allowed to
December 2017 with total value of VND9,200,000 million. A deposit of 10% contract value was
block these interest receivables and amortize to profit and loss based on its financial capability over
paid at the contract date. The remaining amount of 90% contract value shall be paid within 7
a maximum period of 10 years in accordance with the official approval of the SBV for the Post-merger
years from the contract date with 2 years grace period and deferred payment fee at 7.50% p.a.
Restructuring Plan and the Bank’s proposals in the Restructuring Plan as described in Note 3.4.
(vi) These receivables are related to the sale of securities with credit term granted to customers,
(iv) This balance represents interest receivable from entrusted investment in a company (Note 15.3 (iii))
in which, the customers made deposits and made partial payments. The remaining amount will
which were received from Southern Commercial Joint Stock Bank. The Bank is allowed to block
be due on 29 December 2021.
these interest receivables and amortize to profit and loss based on its financial capability over a
(vii) This receivable is related to the sale of a part of FICO building located at No. 927 Tran Hung maximum period of 10 in accordance with the official approval of the SBV for the Post-merger
Dao, District 5, Ho Chi Minh City by Southern Commercial Joint Stock Bank to a counterparty for Restructuring Plan and the Bank’s proposals in the Restructuring Plan as described in Note 3.4.
using as head office. As at the report date, the Bank is in process of completing legal procedures
15.3 Other assets
to transfer the ownership to the buyer in accordance with the prevailing regulations.
(viii) This receivable is related to investment in Southern Jewelry Joint Stock Company by Southern Ending balance Beginning balance
Commercial Joint Stock Company before the merger and was authorized to an individual to VND million VND million
own the shares on behalf. The Bank has made full provision for this receivable and is in process Foreclosed assets (i) 69,711 157,472
stipulated resolving it in accordance with regulations stipulated by the SBV In which:
- Real estates 28,677 116,438
(ix) This receivable is related to the sales of debts at market price to Vietnam Asset Management
- Securities 41,034 41,034
Company (“VAMC”) with amount of VND390,769 million. The Bank had received the payment of
Prepaid expenses (ii) 1,354,121 871,697
VND200,000 million. The remaining amount of VND190,769 million was settled in January 2020.
Receivables from entrusted investment (iii) 70,700 76,500
Investment in finance leasing equipment 11,985 12,145
Other assets 54,792 68,534
1,561,309 1,186,348

206 207
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

15. OTHER ASSETS (continued) 16. DUE TO THE STATE BANK OF VIETNAM
15.3 Other assets (continued)
Ending balance Beginning balance
(i) This balance represents collaterals of customers which were foreclosed by the Bank and its VND million VND million
subsidiaries upon writing-off of bad debts including loans and other receivables. The Bank and its Borrowings from the SBV 241,536 244,664
subsidiaries have completed procedures to receive the ownership of these assets and is in progress
Discount, rediscount of valuable papers - 5,048,400
to resolve these foreclosed assets in accordance with regulations stipulated by the SBV.
Other 3 22
(ii) Prepaid expenses comprise of assets rental, assets maintenance and repairing expenses, option 241,539 5,293,086
premium fee and prepaid interest expenses which are amortized for a period ranging from 1 year
to 50 years.
17. DUE TO AND BORROWINGS FROM OTHER CREDIT INSTITUTIONS
(iii) This balance represents an entrusted investment in a company of Southern Commercial Joint
Stock Bank before the merger. This entrusted investment is proposed to sell to VAMC according 17.1 Due to other credit institutions
to the Post-merger Restructuring Plan approved by the SBV but the Bank has not yet sold these
receivables to VAMC. During the year, the Bank has made full provision for this receivable. Ending balance Beginning balance
VND million VND million
15.4 Provision for other assets
Demand deposits 191,135 259,095
Analysis of credit quality of other assets exposing to credit risk are as follows: In VND 182,730 247,997
In foreign currency 8,405 11,098
Ending balance Beginning balance
VND million VND million Term deposits 208,530 784,121
Loss In VND - 400,000
Receivables from reverse repurchase agreements of securities 1,645,387 1,857,465 In foreign currency 208,530 384,121
Receivables from entrusted investment 70,700 76,500
399,665 1,043,216
1,716,087 1,933,965

Included in loss debts as at 31 December 2019 are receivables from reverse repurchase agreements Annual interest rates applicable to due to other credit institutions are as follows:
of securities (Note 15.1 (iii)) and an entrusted investment (Note 15.3 (iii)) with total amount of
VND1,176,739 million (31 December 2018: VND1,182,539 million). These receivables are in process of Ending balance Beginning balance
resolving in accordance with the official approval of the SBV for the Post-merger Restructuring Plan % p.a. % p.a.
as described in Note 3.4.
Term deposits in VND Not applicable 4.70
Provision for other assets comprises of: Term deposits in foreign currency 2.00 - 4.30 1.90 - 5.50

Ending balance Beginning balance 17.2 Borrowings from other credit institutions
VND million VND million
Provision for credit losses Ending balance Beginning balance
- Specific provision 329,459 152,519 VND million VND million
Provision for other assets
Borrowings from other domestic credit institutions in VND 870,172 4,064,615
- Provision for foreclosed assets 28,067 28,328
Borrowings from domestic and overseas credit institutions in
- Provision for other assets 508,385 298,962 2,255,723 2,192,327
foreign currencies
865,911 479,809
3,125,895 6,256,942
Changes in provision for other assets during the year are as follows:
Annual interest rates applicable to borrowings from other credit institutions are as follows:
Current year Previous year
VND million VND million
Beginning balance 479,809 513,353 Ending balance Beginning balance
Provision charged/(reversed) for credit losses during the year 176,940 (85,075) % p.a. % p.a.
Provision charged for other assets during the year 209,162 51,531 In VND 5.74 - 6.30 3.80 - 5.97
Ending balance 865,911 479,809 In foreign currencies 0.75 - 5.29 0.75 - 5.84

208 209
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

18. DUE TO CUSTOMERS 18. DUE TO CUSTOMERS (continued)

18.1 Breakdown by type of deposits 18.2 Breakdown by customers and type of business

Ending balance Beginning balance Ending balance Beginning balance

VND million VND million VND million VND million
Demand deposits 67,193,213 51,792,625 Deposits from economic entities 57,932,345 47,067,883
Demand deposits in VND 62,671,111 47,389,761 Other private limited companies 18,067,262 14,453,074
Demand deposits in foreign currencies 4,210,011 3,889,414 Other joint stock companies 15,182,133 11,211,478
Demand savings in VND 73,351 140,446 Foreign invested companies 11,393,017 9,060,143
Demand savings in foreign currencies 238,740 373,004 One-member limited liability companies of which 100% charter
2,430,187 2,806,291
capital is held by the State
Term deposits 332,573,736 296,641,686
The joint stock company of which over 50% of share capital or the
Term deposits in VND 32,967,274 24,857,527
total voting share capital is held or controlled by the State under 3,478,620 2,809,883
Term deposits in foreign currencies 4,953,535 3,761,775 the company’s charter
Term savings in VND 289,164,420 260,898,488 State-owned companies 3,098,953 2,431,164
Term savings in foreign currencies 5,488,507 7,123,896 Business households, individuals 176,987 898,756
Margin deposits 489,416 384,795 Private companies 402,660 410,922
Margin deposits in VND 445,761 320,147 Public administrative units, agencies of the Communist Party,
270,087 355,108
Margin deposits in foreign currencies 43,655 64,648 unions and associations

Deposits for specific purposes 309,645 239,425 Cooperatives and inter-cooperatives 176,069 106,319

Deposits for specific purposes in VND 37,924 58,739 Limited liability companies with two or more members of which
more than 50% of the charter capital is held or controlled by the 53,579 44,841
Deposits for specific purposes in foreign currencies 271,721 180,686 State
Margin deposits for other settlement services 278,370 330,391 Partnerships 26,272 11,151
Margin deposits for other settlement services in VND 277,996 330,016 Others 3,176,519 2,468,753
Margin deposits for other settlement services in foreign currencies 374 375 Deposits from individuals 342,912,035 302,321,039
400,844,380 349,388,922 400,844,380 349,388,922

Annual interest rates applicable to customer deposits are as follows: 19. GRANTS, ENTRUSTED FUNDS AND LOANS EXPOSED TO RISKS

Ending balance Beginning balance Ending balance Beginning balance

% p.a. % p.a. VND million VND million
Demand deposits in VND 0.00 - 1.00 0.03 - 1.00 Grants, entrusted funds and loans in VND - 708
Demand savings deposits in VND 0.30 0.30 Grants, entrusted funds and loans in gold and foreign currencies 83,606 87,020
Demand deposits in foreign currencies 0.00 - 1.89 0.00 - 1.89 83,606 87,728
Demand savings deposits in foreign currencies 0.00 0.00
Term deposits in VND 0.80 - 9.00 0.10 - 8.71 20. VALUABLE PAPERS ISSUED
Term savings deposits in VND 0.30 - 12.00 0.30 - 12.00
Term deposits in foreign currencies 0.00 - 9.63 0.60 - 9.63 Ending balance Beginning balance
VND million VND million
Term savings deposits in foreign currencies 0.00 - 1.50 0.00 - 1.50
Certificates of deposit
In case term deposits are withdrawn before the maturity date, the demand interest rate shall be - Under 12 months 470 600
applied. - Over 5 years 9,489,578 8,065,309
9,490,048 8,065,909

210 211
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

20. VALUABLE PAPERS ISSUED (continued) 21. OTHER LIABILITIES (continued)

Annual interest rates applicable to valuable papers issued as follows: 21.2 Other payables (continued)

Ending balance Beginning balance (i) Movements of the bonus and welfare fund during the year are as follows:
% p.a. % p.a.
Over 5 years 8.48 - 9.03 8.50 - 8.90 Current year Previous year
VND million VND million
21. OTHER LIABILITIES Beginning balance 10,402 1,481
Appropriation during the year 381,416 383,408
21.1 Interest and fees payable Net-off advance to the fund - (310,000)
Utilization (29,360) (64,487)
Ending balance Beginning balance
VND million VND million Ending balance 362,458 10,402
Interest payables for saving deposits in VND 5,912,249 5,009,584
Interest payables for customer deposits in VND 526,996 394,935 (ii) Movements of Science and Technology Development Fund during the year are as follows:
Interest payables for valuable papers in VND 520,246 427,072
Interest payables for customer deposits in foreign currencies 92,973 67,956 Current year Previous year
Interest payables for currency derivatives 39,930 18,445 VND million VND million
Interest payables for borrowings in foreign currencies 9,632 17,115 Beginning balance 7,943 11,837
Interest payables for borrowings in VND 1,320 7,370 Utilization (3,894) (3,894)
Interest payables for deposits from credit institutions in foreign currencies 873 3,285 Ending balance 4,049 7,943
Interest payables for grants, entrusted funds and loans in foreign currencies 714 735
Interest payables for saving deposits in foreign currencies 490 210
22. STATUTORY OBLIGATIONS
Interest payables for deposits from credit institutions in VND - 258
7,105,423 5,946,965
Beginning Movements during the year
21.2 Other payables balance Payables Paid Ending balance
VND million VND million VND million VND million
Corporate income tax 58,561 791,542 (631,348) 218,755
Ending balance Beginning balance
Value added tax 27,297 708,518 (700,886) 34,929
VND million VND million
Other tax 46,179 708,988 (670,966) 84,201
Payables for internal activities 883,485 869,822
132,037 2,209,048 (2,003,200) 337,885
Payables to employees 481,494 832,589
In which:
Bonus and welfare funds (i) 362,458 10,402
Tax advances (2,619) (2,494)
Other payables 39,533 26,831
Tax payables to the State 134,656 340,379
Payables for external activities 4,639,914 4,430,179
Payables relating to intermediary and electronic support payment services 2,107,479 1,531,390
22.1 Current corporate income tax (“CIT”)
Payables for card operations 706,198 715,992
Taxes payable to the State Budge 340,379 134,656
The Bank and its subsidiaries have the obligation to pay corporate income tax at the rate of 20% of
Interest payable on deposits due to payment 329,093 99,174 taxable profit for the current year. Sacombank (Cambodia) Plc. has the obligation to pay corporate
Deposits for purchase of foreclosed assets 316,549 430,849 income tax at the rate of 20% of taxable profit for the current year in Cambodia. Sacombank (Lao)
Payables to foreign remittance companies 195,502 118,439 Co.,Ltd has the obligation to pay corporate income tax at the rate of 24% of taxable profit for the
Payables to customers 133,250 71,145 current year in Laos.
Payables for pending remittance 78,517 813,649
Unearned income 67,809 59,009 The Bank and its subsidiaries’ tax returns are subject to examination by the taxation authorities.
Dividend payables 9,211 9,413 Since the application of tax laws and regulations to many types of transactions are susceptible to
Payables in collecting bad debts transactions 8,438 232,164 varying interpretations, amounts reported in the consolidated financial statements could be changed
Science and Technology Development Fund (ii) 4,049 7,943 at a later date upon final determination by the taxation authorities.
Others 343,440 206,356
5,523,399 5,300,001
212 213
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

22. STATUTORY OBLIGATIONS (continued) 22. STATUTORY OBLIGATIONS (continued)

22.1 Current corporate income tax (“CIT”) (continued) 22.2 Deferred corporate income tax

The current tax payable is based on taxable profit for the year. Taxable income differs from profit Changes in deferred CIT tax assets and effects on the consolidated income statement of the Bank
as reported in the consolidated income statement since it excludes taxable income or deductible and its subsidiaries are as follows:
expenses in prior years due to the differences between the Bank and its subsidiaries’ accounting
policies and the current income tax policies, and also excludes non-taxable income or non-deductible The consolidated The consolidated
expenses. The current CIT payables are calculated based on the statutory tax rates applicable at the balance sheet income statement
consolidated balance sheet date.
Beginning
Reconciliation between current CIT expense and the accounting profit multiplied by CIT rate is Ending balance balance Current year Previous year
presented below: VND million VND million VND million VND million
Deferred CIT tax assets
Current year Previous year Tax loss carried forward 66,532 - 66,532 -
VND million VND million
Provision for investments and other
Accounting profit before tax 3,216,746 2,246,991 85,301 55,640 29,661 -
assets
Adjustments to consolidate the financial statement (103,002) (327,400)
Regulatory provision for credit loss 7,980 7,462 518 -
Accounting profit before tax before adjustments for consolidation
3,113,744 1,919,591
of financial statement 159,813 63,102 96,711 -
At applicable CIT tax rate of 20% 622,749 383,918 Deferred CIT tax payables
Adjustments to increase:
Depreciation difference (681) (681) - -
- Tax rate differences 1,516 3,935
Accumulated loss from subsidiaries (24,781) (24,781) - (11,124)
- Provision for other assets and investments 95,803 -
- Non-taxable losses from subsidiaries 10,302 67,505 (25,462) (25,462) - (11,124)

- Non-deductible expenses 30,675 13,316 Previous year’s adjustment 65,972 -

Adjustments to decrease: Foreign currency difference 1,079 -
- Income from untaxable dividends (1,146) (445) Net deferred tax income/(expenses) charged to the consolidated income
29,660 (11,124)
- Unrealized foreign exchange gain for current year (5,092) (13,041) statement
- Provision reversal for other assets and investments (1,570) (9,485)
- Income from transfer of land use rights (30,768) (35,435)
- Tax loss carried forward of subsidiaries (1,054) -
Estimate CIT expense for the year 721,415 410,268
Tax expense for land use rights transfer 32,521 35,435
Supplementary tax for previous years 37,606 8
Current CIT expense for the year 791,542 445,711

214 215
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

23. OWNERS’ EQUITY (CONTINUED)

During the year, the Bank and its subsidiaries have made appropriation to Financial reserve, Capital supplementary reserve funds and
Total
VND million VND million

2,720,885

243,016

2,963,901

Bonus and welfare funds according to approval of the Resolution of the General Meeting of Shareholders No. 01/2019/NQ-DHDCD dated
Total
VND million

24,632,367

2,430,621

(381,416)

60,068

26,741,640
23.1 Statement of changes in owners’ equity (continued)

Details of shares issued by the Bank are as follows:

Other reserves

11,105

11,105
Retained
earnings
VND million

3,521,064

2,454,864

(243,016)

(381,416)

60,068

5,411,564
Ending balance Beginning balance
Unit Unit
Number of authorized shares 1,885,215,716 1,885,215,716
Number of issued shares
Foreign currency
translation
reserve
VND million

223,786

(24,243)

199,543
- Ordinary shares 1,885,215,716 1,885,215,716
Number of repurchased shares

Capital
supplementary
reserve
VND million

958,957

88,753

1,047,710
- Ordinary shares (81,562,287) (81,562,287)
Number of outstanding shares
- Ordinary shares 1,803,653,429 1,803,653,429
Reserves
VND million

2,720,885

243,016

2,963,901

Movements of reverse funds of the Bank and its subsidiaries during the year are as follows:
23.2 Dividends

development fund Financial reserve

VND million

1,632,284

154,263

1,786,547
Current year Previous year
Other capital
VND million

653

653

VND million VND million

Beginning balance of dividend payable 9,413 9,549
Dividend paid during the year (202) (136)
Ending balance of dividend payable 9,211 9,413
Share premium Treasury shares
VND million

Investment and

VND million

118,539

118,539
(750,911)

(750,911)

24. BASIC EARNINGS PER SHARE

Basic earnings per share are calculated by dividing net profit after tax for the year attributable to
ordinary shareholders of the Bank (after adjusting for the bonus and welfare fund) to the weighted
VND million

63,612

63,612

average number of ordinary shares outstanding during the year.

The following reflects the income and share data used in the basic and diluted earnings per share
computations:
Fund for capital
expenditure
VND
million

1,121

1,121

Previous year
Statement of changes in owners’ equity

Current year (Restate)

VND million VND million
Profit after tax (VND million) 2,454,864 1,790,156
Charter capital
VND million

18,852,157

18,852,157

Distribution to bonus and welfare fund (VND million) (*) (436,599) (381,416)
Net profit after tax attributable to ordinary shareholders
2,018,265 1,408,740
Appropriation to reverses

(VND million)
OWNERS’ EQUITY

Weighted average number of ordinary shares (share) 1,803,653,429 1,803,653,429

Profit appropriation

Other adjustments

Beginning balance
Beginning balance

Basic earnings per share (VND/share) 1,119 781

to the Bonus and
Net profit for the

Appropriation to

Ending balance
Ending balance

26 April 2019.
welfare fund

(*) The profit used to calculate the earnings per share for 2018 presented in this report has been revised
reverses

in comparison with the figures presented in the consolidated financial statements of 2018 to factor
Items

in Bonus and welfare fund’ appropriation from the retained earnings of 2018 according to approval
year

of the Resolution of the General Meeting of Shareholders No. 01/2019/NQ-DHDCD dated 26 April
2019. The appropriation to bonus and welfare fund in 2019 is estimated on the basis of after-tax
23.1

profit after compulsory allocations to Financial reserve, Capital supplementary reserve for the year.
23.

216 217
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

25. INTEREST AND SIMILAR INCOME 28. NET GAIN FROM TRADING OF FOREIGN CURRENCIES

Current year Previous year Current year Previous year

VND million VND million VND million VND million
From loans to customers and other credit institutions 27,061,642 23,287,663 Income from trading of foreign currencies 765,418 1,109,548
From investment securities 1,937,261 1,908,302 Income from spot foreign exchange 479,220 476,775
From due from other credit institutions 492,383 187,750 Income from gold trading 102,081 32,325
From guarantee services 200,416 187,624 Income from currency derivatives 158,982 589,467
From financial leasing services 178,310 156,509 Profit from revaluation of foreign currencies, gold and derivative
25,135 10,981
financial instruments
From purchased debts 45,328 54,924
Expenses from trading of foreign currencies (156,670) (708,270)
From other credit activities 561,631 512,799
Expenses from spot foreign exchange (30,355) (65,600)
30,476,971 26,295,571
Expenses from gold trading (9,230) (8,333)
26. INTEREST AND SIMILAR EXPENSES Expenses from currency derivatives (117,085) (634,337)
608,748 401,278
Current year Previous year
VND million VND million 29. NET GAIN FROM INVESTMENT SECURITIES
For due to customers and other credit institutions 20,237,351 17,673,780
For valuable paper issued 783,935 626,870 Current year Previous year
For borrowings from the SBV and other credit institutions 158,903 182,755
VND million VND million
Gain from dealing of investment securities 48,031 67,672
For other credit activities 116,094 178,372
Loss from dealing of investment securities (9,698) (29,865)
21,296,283 18,661,777
Provision (reversed)/charged for investment securities 34,431 (16,584)
27. NET FEE AND COMMISSION INCOME 72,764 21,223

Current year Previous year 30. NET GAIN FROM OTHER OPERATING ACTIVITIES
VND million VND million
Fee and commission income 4,803,443 3,772,038 Current year Previous year
From settlement services 1,189,454 973,027 VND million VND million
From insurance agency services 925,933 596,622 Other operating income 1,485,474 951,030
From entrustment and agency services 618,514 407,363 Deferred payment fee from the contract of selling assets 815,738 426,263
From cashier services 446,666 412,980 Recovery of bad debts previously written-off 251,457 187,760
From warehouse rental 191,886 190,577 Gain from disposal of fixed assets 164,833 188,899
From remittance services 34,558 27,828 Gain from disposal of securities 150,617 28,832
From other services 1,396,432 1,163,641 Deferred payment fee from debts selling contract with VAMC - 36,016
Fee and commission expenses (1,480,453) (1,089,894) Other income 102,829 83,260
For settlement services (996,135) (670,695) Other operating expenses (64,287) (18,647)
For postal and communication (291,746) (246,422) Other expenses (64,287) (18,647)
For brokerage services (51,756) (59,901) 1,421,187 932,383
Consulting services (44,264) (11,405)
For cashier services (38,712) (44,411)
For other services (57,840) (57,060)
3,322,990 2,682,144

218 219
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

31. INCOME FROM INVESTMENTS IN OTHER ENTITIES 33. CASH AND CASH EQUIVALENTS

Current year Previous year Cash and cash equivalents included in the consolidated cash flow statement comprise of the
VND million VND million following amounts on the consolidated balance sheet:
Dividends received during the year
Ending balance Beginning balance
- From investment securities 1,640 1,316
VND million VND million
- From other long-term investments 4,092 1,000
Cash, gold and gemstones 8,269,373 6,379,549
Gain from disposal of other long-term investments 23,229 493
Balances with the Central Bank 12,109,861 9,611,502
28,961 2,809
Demand deposits with other credit institutions 8,013,265 3,688,643
Due from other credit institutions 4,703,541 759,645
32. OPERATING EXPENSES
33,096,040 20,439,339

Current year Previous year

VND million VND million 34. EMPLOYEES’ INCOME
Tax, duties and fees 186,707 101,521
Current year Previous year
Personnel expenses 5,465,357 4,832,476
I. Total average number of employees (persons) 19,068 18,622
- Salary and allowances 4,894,248 4,271,097
II. Employees’ income (VND million)
- Salary-related allowances 356,715 323,908
1. Total salary and advances 4,391,114 3,424,648
- Subsidy 150,686 211,562
2. Bonus 1,410,022 655,293
- Uniform allowances 63,708 25,909
3. Total income (1+2) 5,801,136 4,079,941
Asset expenditures 1,609,952 1,385,383
4. Average salary per month (VND million/person) 19.19 15.33
- Expenses for office rental 495,759 466,682
5. Average income per month (VND million/person) 25.35 18.26
- Depreciation and amortization charges 544,864 458,917
- Expenses for assets repairing and maintenance 449,821 375,087 35. COLLATERALS AND MORTGAGES
- Purchasing tools and supplies 108,236 73,347
- Expenses for asset insurance 11,272 11,350 35.1 Assets, valuable papers taken for mortgage, pledge and discount, rediscount
Other operating expenses 1,291,493 1,008,287
Types and book value of collaterals of customers at the year-end are as follows:
- Expenses for advertising, marketing 454,346 288,945
- Material, printing expense 211,993 189,648 Ending balance Beginning balance
- Utilities expenses 178,439 163,158 VND million VND million
- Meeting and conference expense 102,531 68,451 Real estate properties 471,282,941 387,029,869
- Business trip expenses 45,610 34,152 Valuable papers 33,860,458 32,530,343
- Postage and telecommunication expenses 41,189 43,520 Transportation vehicles 23,896,511 23,372,684
- Education and training expenses 6,010 4,883 Machines and equipment 6,087,097 5,729,295
- Other expenses 251,375 215,530 Inventories 4,717,086 5,005,158
Insurance expenses for customer deposits 485,779 437,518 Other assets 43,024,475 36,674,750
Provision expenses (excluding provision for credit losses, 582,868,568 490,342,099
226,415 72,645
investment)
- Provision expenses for long-term investments 17,253 21,114
- Provision expenses for other assets 209,162 51,531
9,265,703 7,837,830

220 221
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

35. COLLATERALS AND MORTGAGES (continued) 36. CONTINGENT LIABILITIES AND COMMITMENTS (continued)
35.2 Assets, valuable papers for mortgage, pledge and discount, rediscount The Bank and its subsidiaries require margin deposits to support credit-related financial instruments
Breakdown of the Bank and its subsidiaries’ financial assets used to guarantee the credit limit for when it is deemed necessary. The margin deposit required varies from nil to 100% of the value of a
borrowings from other credit institutions and the SBV are as follows: commitment granted, depending on the creditworthiness of clients as assessed by the Bank and its
subsidiaries.
Ending balance Beginning balance
VND million VND million The currency trading commitments are commitments to purchase, sell at spot and currency swap
commitments. Commitments to purchase, sell at spot are commitments to purchase, sell currency
Government bonds 3,620,853 8,540,785 according to exchange rate dealt and payment within 2 (two) days since transaction date. Currency
Bonds issued by domestic credit institutions 50,309 50,459 swap commitments are commitments to purchase and sell with the same notional principal amount
3,671,162 8,591,244 (only two currencies used for transaction) to one client, including one transaction for term payment at
spot and one transaction for term payment in the future with the exchange rate of both transactions
At 31 December 2019, the Bank and its subsidiaries have not incurred borrowings from other credit determined at spot transaction date.
institutions and the SBV which use these bonds as collateral.
Details of outstanding commitments and contingent liabilities are as follows:
36. CONTINGENT LIABILITIES AND COMMITMENTS
In the normal course of business, the Bank and its subsidiaries are parties to financial instruments Ending balance Beginning balance
which are recorded as off-balance sheet items. These financial instruments mainly comprise of VND million VND million
guarantee commitments and commercial letters of credit. These instruments involve elements of Currency trading commitments 44,660,130 15,914,207
credit risk out of the items recognized in the consolidated balance sheet. - Commitments on buying foreign currencies 1,492,052 547,702
Credit risk for off-balance sheet financial instruments is defined as the possibility of sustaining a - Commitments on selling foreign currencies 1,700,159 984,502
loss because any other party to a financial instrument fails to perform in accordance with the terms
- Commitments on swap 41,467,919 14,382,003
of the contract.
Letters of credit 5,748,655 7,580,064
Financial guarantees are conditional commitments issued by the Bank to guarantee the performance
Guarantees for borrowings 29,832 22,784
of a customer to a third party including guarantee for borrowings, settlement, performing contracts
and bidding. The credit risk involved in issuing guarantees is essentially the same as that involved in Other guarantees 7,677,713 7,008,732
extending loans to other customers. Other commitments 1,906 3,718
Commercial at sight letters of credit represent a financing transaction by the Bank and its subsidiaries 58,118,236 30,529,505
to its customer who is usually the buyer/importer of goods and the beneficiary is typically the seller/ Less: Margin deposits (344,200) (250,082)
exporter. Credit risk from this type of letters of credit is limited as the merchandise shipped serves
Contingent liabilities and commitments 57,774,036 30,279,423
as collateral for the transaction.
Deferred payment letters of credits represent the amounts at risk should the contract be fully Results of the loan classification as required by Circular 02, Circular 09 and the Bank and its
effected but the client defaults in repayment to the beneficiary. Deferred payment letters of credit that subsidiaries’ policy on loan classification and provision are as follows:
defaulted by clients are recognized by the Bank and its subsidiaries as granting of a compulsory loan
with a corresponding liability representing the financial obligation of the Bank and its subsidiaries to
Ending balance Beginning balance
pay the beneficiaries and to fulfil the guarantor obligation.
VND million VND million
Guarantee commitment is the commitment issued by the Bank and its subsidiaries to guarantee Current 13,456,200 14,611,580
the performance of the customers to a third party including guarantee for borrowings, settlement,
In which:
performing contracts and bidding... Credit risk of the borrowing guarantee, settlement guarantee in
general is essentially the same as that involved in extending loans to other customers, while other - Letters of credit 5,748,655 7,580,064
guarantees, the risk is lower. - Guarantees for borrowings 29,832 22,784
Risk of the letter of credit is usually lower, in condition that the Bank can control goods. Deferred - Other guarantees 7,677,713 7,008,732
letter of credit may have contingent risk higher than at sight letter of credit. Deferred payment
letters of credit that were defaulted by clients are recognized by the Bank and its subsidiaries as
granting of a compulsory loan with a corresponding liability representing the financial obligation of
the Bank and its subsidiaries to pay the benificiaries and to fulfill the guarantor obligation.

222 223
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

37. RELATED PARTY TRANSACTIONS 37. RELATED PARTY TRANSACTIONS (continued)

Related party transactions include all transactions undertaken with other entities to which the Bank Receivables/(payables) with related parties as at the year-end are as follows:
and its subsidiaries are related. Parties are considered as related parties if one party is able to
control over or significantly influence the other party in making decision of financial and operational Ending balance Beginning balance
policies. A party is deemed to be related to the Bank and its subsidiaries if: Related party Transactions VND million VND million
(a) Directly, or indirectly through one or more intermediaries, the party: Key management of the Bank and Loans 25,091 68,227
subsidiaries
Due to (121,957) (87,590)
»» control or is controlled by or is under common control with the Bank (including parents and Certificates of
subsidiaries); (160) (160)
deposit
»» has an interest (owning 5% or more of the charter capital or voting share capital) in the Bank Other receivables 70 88
that gives it significant influence over the Bank;
»» has joint control over the Bank; Other payables (2,001) (1,148)
Related parties to key management of the Loans 27,484 683,865
(b) The party is a joint venture in which the Bank and its subsidiaries are a venture or an associate Bank and subsidiaries
Due to (160,809) (205,183)
(owning over 11% of the charter capital or voting share capital, but is not a subsidiary of the Bank);
Certificates of
(11,030) (11,030)
deposit
(c) The party is a member of the key management personnel of the Bank and its subsidiaries;
Other receivables 107 2,490
(d) The party is a close member of the family of any individual referred to in (a) or (c); or Other payables (2,391) (2,337)

(e) The party is an entity that is, directly or indirectly, controlled, jointly controlled or significantly 38. CONCENTRATION OF ASSETS, LIABILITIES AND OFF-BALANCE SHEET ITEMS BY
influenced by, or of which, significant voting power in such entity resides with any individual GEOGRAPHICAL REGIONS
referred to in (c) or (d).

Significant transactions with related parties during the year are as follows: Domestic Overseas Total
VND million VND million VND million
Assets as at 31 December 2019
Current year Previous year
Related party Transactions VND million VND million Due from and loans to other credit
5,660,247 7,490,668 13,150,915
institutions
Key management of the Bank Interest income from loans 3,046 270 Derivatives and other financial instruments
and subsidiaries 22,106,829 - 22,106,829
Interest expenses on deposit (5,512) (1,805) (Nominal amount)
Loans to customers - gross 290,184,996 5,844,778 296,029,774
Fee and commission income 44 42
Purchased debts - gross 426,769 - 426,769
Other expenses (51) -
Trading and investment securities - gross 80,536,629 579 80,537,208
Post-tax remuneration of members Long-term investments - gross 298,971 - 298,971
of the Board of Director and Board of (42,169) (39,775)
Supervisors Liabilities as at 31 December 2019

Post-tax income of members of the Board Due to the SBV 241,539 - 241,539
(94,135) (75,979)
of Management Due to and borrowings from other credit
2,082,662 1,442,898 3,525,560
institutions
Related parties to key Interest income from deposits/loans 1,750 330
management of the Bank and Due to customers 394,225,864 6,618,516 400,844,380
subsidiaries Interest expenses on borrowings/
(5,991) (3,067) Grants, entrusted funds and loans exposed
deposits - 83,606 83,606
to risks
Fee and commission income 269 124 Valuable papers issued 9,490,048 - 9,490,048
Off-balance-sheet commitments
56,734,107 1,384,129 58,118,236
as at 31 December 2019

224 225
 39. SEGMENT REPORT
39.1 Main segment report: by geographical region
Information on income, expenses, assets and liabilities by geographical region of the Bank and its subsidiaries as at 31 December 2019
and for the year then ended is as follows:
Total segment
North Central South Laos Cambodia reported Eliminations Total
VND million VND million VND million VND million VND million VND million VND million VND million
Interest and similar income 6,284,978 5,794,740 29,976,472 219,470 267,286 42,542,946 (12,065,975) 30,476,971
Interest and similar expenses (4,532,809) (3,617,204) (24,974,691) (115,848) (121,706) (33,362,258) 12,065,975 (21,296,283)
Net interest and similar income 1,752,169 2,177,536 5,001,781 103,622 145,580 9,180,688 - 9,180,688
Non-interest income 276,445 213,526 4,886,053 20,758 57,868 5,454,650 - 5,454,650
TOTAL OPERATING INCOME 2,028,614 2,391,062 9,887,834 124,380 203,448 14,635,338 - 14,635,338
TOTAL OPERATING EXPENSES (898,663) (785,106) (7,296,301) (118,269) (167,364) (9,265,703) - (9,265,703)
Net profit before provision for credit
1,129,951 1,605,956 2,591,533 6,111 36,084 5,369,635 - 5,369,635
losses
Provision expense of credit losses - - (2,068,166) 533 (85,256) (2,152,889) - (2,152,889)
as at 31 December 2019 and for the year then ended

PROFIT BEFORE TAX 1,129,951 1,605,956 523,367 6,644 (49,172) 3,216,746 - 3,216,746
Corporate income tax expenses - - (756,369) (2,336) (3,177) (761,882) - (761,882)
PROFIT AFTER TAX 1,129,951 1,605,956 (233,002) 4,308 (52,349) 2,454,864 - 2,454,864
ASSETS
Cash, gold and gemstones 1,469,578 842,515 5,666,106 50,970 240,204 8,269,373 - 8,269,373
Balances with the Central Bank 208,584 297,889 10,510,155 339,172 754,061 12,109,861 - 12,109,861
Due from and loans to other credit
62,101 1,997 12,318,622 279,207 488,988 13,150,915 - 13,150,915
institutions
Loans to customers 37,668,376 52,425,583 196,632,776 2,182,447 3,149,533 292,058,715 - 292,058,715
Purchased debts - - 423,453 - - 423,453 - 423,453
Investments - - 76,600,772 - 579 76,601,351 - 76,601,351
Other assets 2,269,244 1,016,397 47,799,390 312,121 132,155 51,529,307 (561,918) 50,967,389
TOTAL ASSETS 41,677,883 54,584,381 349,951,274 3,163,917 4,765,520 454,142,975 (561,918) 453,581,057
LIABILITIES
Due to the SBV - - 241,539 - - 241,539 - 241,539
Due from and borrowings from other
27,908 4,291 3,239,784 44,898 208,679 3,525,560 - 3,525,560
credit institutions
Due to customers 71,359,511 47,114,550 276,907,416 2,110,485 3,352,418 400,844,380 - 400,844,380
Other liabilities 5,142,223 2,868,134 14,567,202 130,124 82,173 22,789,856 (561,918) 22,227,938
TOTAL LIABILITIES 76,529,642 49,986,975 294,955,941 2,285,507 3,643,270 427,401,335 (561,918) 426,839,417
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
B05/TCTD-HN

39.

39.2
B05/TCTD-HN

Interbank:
customers:
followings:

Investments:
Individual customers and corporate
SEGMENT REPORT (continued)

include:
Secondary segment report: by business sector

- customer deposits;
- loans and advances to customers;

activities with other credit institutions.

- card services and remittance services.
Securities investments and other long-term investments.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended

Placements from and to; borrowings, lending and other interbank

For management purposes, the Bank and its subsidiaries are organized into sectors based on the

The products and services provided to individual and corporate clients

226 227
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

Risk is inherent in the Bank and its subsidiaries’ activities and is managed through a process of

Total
VND million

8,269,373
12,109,861
13,150,915
24,465
292,058,715
423,453
76,497,497
103,854
8,289,968
42,652,956
453,581,057

241,539
3,525,560
400,844,380
83,606
9,490,048
12,654,284
426,839,417

Segmental information on income and expenses is not presented as the Bank and its subsidiaries have not established management
ongoing identification, measurement and monitoring, subject to risk limits and other controls. This
process of risk management is critical to the Bank’s continuing profitability and each individual within
Information on assets and liabilities of the business sectors of the Bank and its subsidiaries as at 31 December 2019 is as follows:

the Bank and its subsidiaries are accountable for the risk prevention within his or her responsibilities.
The Bank and its subsidiaries are exposed to credit risk, liquidity risk and market risk (then being
subdivided into trading and non-trading risks). It is also subject to various operational risks.
Un-allocated
general
activities
VND million

8,269,373
-
-
-
-
-
-
-
8,289,968
7,143,824
23,703,165

-
-
-
-
-
1,324,196
1,324,196
The independent risk control process does not include business risks such as changes in the
environment, technology and industry. The Bank and its subsidiaries’ policy is to monitor those
business risks through the Bank and its subsidiaries’ strategic planning process.
(i) Risk management structure
The Board of Management is ultimately responsible for identifying and controlling risks.
However, each consolidated member shall be responsible for managing and monitoring risks.
Interbank
VND million

-
12,109,861
13,150,915
24,465
-
-
-
-
-
22,407
25,307,648

241,539
3,525,560
-
83,606
-
213,481
4,064,186
(ii) Board of Management
The Board of Management is responsible for monitoring the overall risk management process
within the Bank and its subsidiaries.
(iii) Risk Management Committee
Risk Management Committee advises the Board of Management in the promulgation of
Investments
VND million

-
-
-
-
-
-
76,497,497
103,854
-
1,578,820
78,180,171

-
-
-
-
-
-
-
procedures and policies under their jurisdiction relating to risk management in the Bank and
its subsidiaries’ activities.
Risk Management Committee analyses and provides warnings on the potential risks that may
affect the Bank and its subsidiaries’ operation and preventive measures in the short term as
well as long term.
Individual and
corporate
customers
VND million

-
-
-
-
292,058,715
423,453
-
-
-
33,907,905
326,390,073

-
-
400,844,380
-
9,490,048
11,116,607
421,451,035 Risk Management Committee reviews and evaluates the appropriateness and effectiveness
of the risk management of procedures and policies of the Bank and its subsidiaries to make
Secondary segment report: by business sector (continued)

recommendations to the Board of Management on the improvement of procedures, policies

and operational strategies.
(iv) Board of Supervisors
information system to collect these information.

The Board of Supervisors has the responsibility to control the overall risk management
Due to and borrowings from other credit institutions

Grants, entrusted funds and loans exposed to risks

process within the Bank and its subsidiaries.

Due from and loans to other credit institutions

(v) Internal Audit

FINANCIAL RISK MANAGEMENT

According to the annual internal audit plan, business processes throughout the Bank and
SEGMENT REPORT (continued)

Derivatives and other financial assets

its subsidiaries are audited annually by the internal audit function, which examines both the
adequacy of the procedures and compliance with the Bank and its subsidiaries’ procedures.
Loans and advances to customers
Balances with the Central Bank

Internal audit discusses the results of all assessments with the Board of Directors, and
reports its findings and recommendations to the Board of Supervisors.
Cash, gold and gemstones

(vi) Risk measurement and reporting systems

Long-term investments

Valuable papers issued

Investment securities

TOTAL LIABILITIES

The Bank and its subsidiaries’ risks are measured using a method which reflects both the
Due to customers
Purchased debts

expected loss likely to arise in normal circumstances and unexpected losses, which are an
TOTAL ASSETS

Other liabilities
Due to the SBV

estimate of the ultimate actual loss based on statistical models.

Other assets
Fixed assets

LIABILITIES

Monitoring and controlling of risks is primarily performed based on limits established by the
ASSETS

Bank and its subsidiaries in compliance with the SBV’s regulations. These limits reflect the
business strategy and market environment of the Bank and its subsidiaries as well as the
level of risk that the Bank and its subsidiaries are willing to accept.
39.2
39.

40.

228 229
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

40. FINANCIAL RISK MANAGEMENT (continued) 41. CREDIT RISK (continued)

(vi) Risk measurement and reporting systems (continued) 41.1 Maximum exposure to credit risk before collateral held or other credit enhancements
The maximum exposures to credit risk relating to each group of financial assets, which are equivalent
Information compiled from all business activities is examined and processed in order to
to their book values on the consolidated balance sheet, are listed below:
analyze, control and early identify risks. This information is presented and explained to the
Board of Management, Board of Directors, and the department heads. The report includes Ending balance Beginning balance
aggregate credit exposure, credit metric forecasts, limit exceptions, liquidity ratios and risk VND million VND million
profile changes. The Board of Directors assesses the appropriateness of the allowance for
Credit risk exposures of balance sheet items
credit losses on a quarterly basis. The Board of Directors receives a comprehensive risk
report quarterly which is designed to provide all the necessary information to assess and Balances with the Central Bank 12,109,861 9,611,502
conclude on the risks of the Bank and its subsidiaries. Due from and loans to other credit institutions - gross 13,150,915 4,823,006
Derivative financial instruments 24,465 21,310
For all levels throughout the Bank and its subsidiaries, specifically tailored risk reports are
Loans to customers - gross 296,029,774 256,622,753
prepared and distributed in order to ensure that all business departments have access to
extensive, necessary and up-to-date information. - Individuals 182,944,083 156,251,371
- Corporates 113,085,691 100,371,382
(vii) Risk mitigation Purchased debts - gross 426,769 549,040
The Bank and its subsidiaries actively use collaterals to reduce its credit risks. Investment securities – gross 80,310,768 77,995,506
- Debt securities - available-for-sale 46,663,579 37,762,291
(viii) Excessive risk concentration
- Debt securities - held-to-maturity 33,647,189 40,233,215
Concentrations arise when a number of counterparties are engaged in similar business Other financial assets 35,443,726 37,918,113
activities, or activities in the same geographic region, or have similar economic features that Credit risk exposures of off-balance sheet items
would affect the group of customers’ payment obligations or payment receipt rights when due Financial guarantees 7,707,545 7,031,516
under changes in economic, political or other conditions.
Letters of credit 5,748,655 7,580,064
These above concentrations indicate the relative sensitivity of the Bank and its subsidiaries’ This table presents the worst scenario which the Bank and its subsidiaries will incur the maximum
performance to the development of a particular industry or geographic allocation. credit exposures as at 31 December 2019 and as at 31 December 2018, without taking into account
In order to avoid excessive concentrations of risk, the Bank and its subsidiaries’ policies of any collateral held or their credit enhancements.
and procedures include specific guidelines to focus on maintaining a diversified portfolio. 41.2 Financial assets neither past due nor impaired
Identified concentrations of credit risk are controlled and managed accordingly. Selective
hedging is used within the Bank in respect of the industries and other related factors. The Bank and its subsidiaries’ financial assets which are neither past due nor impaired include
loans to customers classified as Group 1 (Current) in accordance with Circular 02 and Circular 09;
41. CREDIT RISK securities, receivables and other financial assets which are not past due and no provision is required
in accordance with Circular No. 48/2019/TT-BTC dated 8 August 2019.
Credit risk is the risk that the Bank will incur a loss because its customers or counterparties fail to
The Bank and its subsidiaries determine that the Bank and its subsidiaries have absolutely capacity
discharge their contractual obligations.
to fully and timely recover these financial assets in the futures.
The Bank and its subsidiaries manage and controls credit risk by setting limits on the amount of risk 41.3 Financial assets past due but not impaired
it is willing to accept for individual counterparties and for geographical and industry concentrations,
and by monitoring exposures in relation to such limits. The age of financial assets past due but not impaired as at 31 December 2019 is presented below:

The Bank and its subsidiaries have established a credit quality review process to provide early Overdue
identification of possible changes in the financial position and creditworthiness of counterparties Less than From From 181 to More than
based on qualitative and quantitative indicators. Counterparty’s limits are established by the use 90 days 91 to 180 days 360 days 360 days Total
of a credit rating system, which assigns each counterparty a risk rating. Risk ratings are subject to VND million VND million VND million VND million VND million
regular revision.
Loans to customers 52,346 22,253 19,621 105,419 199,639

Loans to customers past due but not impaired are loans which are overdue but no provision is required as
these loans are secured adequately by collaterals under the form of deposits, real estate, movable asset,
valuable papers and other assets.

230 231
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

42. MARKET RISKS

8,269,373
12,109,861

13,150,915

24,465
296,029,774
426,769
80,537,208
298,971
8,289,968
43,518,867
462,656,171

241,539

3,525,560

400,844,380

83,606

9,490,048
12,654,284
426,839,417
35,816,754
Total
VND million
42.1 Interest rate risk

No analysis on interest rate sensitivity was performed at 31 December 2019 due to unavailability of sufficient data and technology.
Interest rate risk arises from the possibility that changes in interest rates will affect the fair values

-
-

-
6,679,299
-
3,491,677
-
-
-
10,170,976

31,705

-
-
31,705
10,139,271
Over 5
years
VND million
of financial instruments. The Bank and its subsidiaries are exposed to interest rate risk as a result of
mismatches of maturity dates or dates of interest rate re-pricing in respect of assets, liabilities and
off-balance sheet instruments over a certain period. The Bank and its subsidiaries manage this risk
by matching the dates of interest rate re-pricing of assets and liabilities through risk management

-
-

48,931

-
5,601,073
-
35,290,030
-
-
-
40,940,034

22,555,735

-
-
22,555,735
18,384,299
From 1 to 5
years
VND million
strategies.

Analysis of assets and liabilities based on interest rate re-pricing date

Re-pricing term of the effective interest rate is the remaining period from the date of the consolidated

-
-

-
1,420,714
-
4,478,942
-
-
294
5,899,950

4,471

60,091,185

83,606

2,797,321
-
62,976,583
(57,076,633)
From 6 to 12
months
VND million
financial statements to the nearest re-pricing date of interest rate applicable to assets and equity.

Interest re-pricing period

The following assumptions and conditions are used in analysis of the re-pricing period of interest
rates of the Bank and its subsidiaries’ assets and liabilities:

-
-

146,787

-
979,931
-
952,124
-
-
8,642
2,087,484

819,242

66,901,018

3,956,087
-
71,676,347
(69,588,863)
From 3 to 6
months
VND million
»» Cash, gold and gemstones; investment in equity securities; long-term investment and other
assets (including fixed assets, investment properties and other assets) are classified as non-
interest bearing items.

From 1 to 3
months
VND million

-
-

291,155

-
175,635,863
426,769
1,550,548
-
-
-
177,904,335

236,258

645,467

82,479,427

2,736,170
-
86,097,322
91,807,013
»» The re-pricing term of balances with the Central Bank is considered as up to 1-month.

»» The re-pricing term of investment securities and trading securities is calculated based on the
time to maturity from the balance sheet date for each type of securities.

Up to 1 month
VND million

-
11,770,688

12,664,042

-
99,153,168
-
900,258
-
-
3,049
124,491,205

5,281

2,056,380

168,017,524

-
-
170,079,185
(45,587,980)
»» The re-pricing term of placements with other banks and loans to other banks; loans to customers;
borrowings from the Government and the Central Bank; placements and borrowings from other
credit institutions; customer deposits and grants, entrusted funds and loans exposed to risks

Non-interest
bearing
VND million

8,269,373
339,173

24,465
-
-
33,873,629
298,971
8,289,968
42,076,963
93,172,542

767,786

470
12,654,284
13,422,540
79,750,002
are determined as follows:

- Items which bear fixed interest rate during the contractual term: The re-pricing term is
determined based on the time to maturity from the balance sheet date.

Overdue
VND million

-
-

-
6,559,726
-
-
-
-
1,429,919
7,989,645

-
-
-
7,989,645
- Items which bear floating interest rate: The re-pricing term is determined based on the time
to the nearest interest rate re-pricing date from the balance sheet date.

MARKET RISKS (continued)

The re-pricing term of valuable papers is determined based on the time to the nearest interest

Interest rate risk (continued)

»»

Due from and loans to other credit

rate re-pricing date from the balance sheet date.

Grants, entrusted funds and loans

Due to and borrowings from other
Balances with the Central Bank

Derivatives and financial assets

Long-term investments - gross

Investment securities - gross
Loans to customers - gross
The following table presents the interest re-pricing period of the Bank and its subsidiaries’ assets

Cash, gold and gemstones

Purchased debts - gross

and liabilities as at 31 December 2019:

Valuable papers issued

Other assets - gross

Interest sensitivity gap

institutions - gross

Due to customers
credit institutions

exposed to risks

Other liabilities
Due to the SBV

Total liabilities
Fixed assets

Total assets
Liabilities
Assets
42.1
42.

232 233
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

42. MARKET RISK (continued)

are used to ensure positions of the currencies to be maintained within the established limits. Exchange rate of some significant foreign

2,954,426
2,032,564
Total
VND million

7,600,643
12,737,363
426,769
579
289,990
2,294,024
28,336,358

2,472,658
15,206,543
83,606
7,934,831
5
508,124
26,205,767
2,130,591
(208,162)
1,922,429
subsidiaries have set limits to control the positions of the currencies. Positions are monitored on a daily basis and hedging strategies
The Bank and its subsidiaries are incorporated and operating in Vietnam with reporting currency as VND. The major currency of
its transaction is also VND, some transactions are denominated in gold, USD, EUR and other foreign currencies. The Bank and its
42.2 Currency risk (continued)
Foreign currency sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in exchange rate,
with all other variables held constant, of the Bank and its subsidiaries’ profit after tax and share

984,009
172,248
Other foreign
currencies
equivalent
VND million

3,558,638
1,955,666
-
-
250,975
81,118
7,002,654

18,959
1,934,819
83,606
3,425,835
-
63,801
5,527,020
1,475,634
(149,431)
1,326,203
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates.

holders’ equity. The Bank and its subsidiaries’ exposure to foreign currency changes for all other
The following table presents assets and liabilities in foreign currencies translated into VND as at 31 December 2019:

currencies is not material.

Assumed Effects on increase/

level of change (decrease) profit after tax
% VND million
As at 31 December 2019
Gold
equivalent equivalent equivalent
VND million VND million VND million

336,285
-
-
460,229
-
-
-
28
796,542

-
41
-
-
-
-
41
796,501
(323,468)
473,033
EUR +2.00% 329
EUR -2.00% (329)
USD +2.00% (2,594)
USD

1,378,602
1,860,316
4,002,385
10,321,468
426,769
579
39,015
2,210,771
20,239,905

2,453,691
13,041,439
-
4,488,202
5
418,700
20,402,037
(162,132)
282,672
120,540
USD -2.00% 2,594
SJC +5.00% 31,860
SJC -5.00% (31,860)

42.3 Liquidity risk

EUR

255,530
-
39,620
-
-
-
-
2,107
297,257

8
230,244
-
20,794
-
25,623
276,669
20,588
(17,935)
2,653
Liquidity risk is the risk which the Bank and its subsidiaries have difficulties in meeting the obligations
of financial liabilities. Liquidity risk occurs when the Bank and its subsidiaries cannot afford to settle
debt obligations at the due dates in the normal or stress conditions. To manage the liquidity risk
exposure, the Bank and its subsidiaries have diversified the mobilization of deposits from various
sources in addition to its basic capital resources. In addition, the Bank and its subsidiaries have
established policy for control of liquidity assets flexibly; monitor the future cash flows and daily
liquidity. The Bank and its subsidiaries have also evaluated the estimated cash flows and the
availability of current collateral assets in case of obtaining more deposits.
currencies at year-end are presented in Note 47.

Due to and borrowings from other credit institutions

Foreign exchange position on and off-balance sheet

Due from and loans to other credit institutions - gross

The maturity term of assets and liabilities is the remaining period of assets and liabilities as
Grants, entrusted funds and loans exposed to risks

calculated from the balance sheet date to the settlement date in accordance with contractual terms
and conditions.
Foreign exchange position off-balance sheet
Foreign exchange position on-balance sheet

The following assumptions and conditions are applied in the analysis of maturity of the Bank and its
subsidiaries’ assets and liabilities:
MARKET RISKS (continued)

Derivatives and financial liabilities

»» Balances with the central banks are classified as demand deposits which include compulsory
Balances with the Central Bank

deposits;
Investment securities - gross
Loans to customers - gross
Cash, gold and gemstones

Purchased debts - gross

»» The maturity term of investment securities - listed debt securities is considered within one (1)
Valuable papers issued

month because of their high liquidity; investment securities - equity securities is considered
Other assets - gross

as from one (1) to three (3) months; maturity term of investment securities - unlisted debt
Due to customers
Currency risk

securities and special bond issued by VAMC is calculated based on the maturity date of each
Other liabilities
Total liabilities
Fixed assets

kind of securities;
Total assets
Liabilities

»» The maturity term of due to the Central Bank; grants, entrusted funds and loans exposed to
Assets

risks; valuable papers issued; due from and loans to other credit institutions, loans and advances
to customers is determined based on the maturity date as stipulated in contracts. The actual
maturity term may be altered because loan contracts may be extended;
42.2
42.

234 235
 42.

42.3

»»
»»
»»

maturity date;
Liquidity risk (continued)
MARKET RISK (continued)
as at 31 December 2019 and for the year then ended

these investments do not have specific maturity date;

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

The maturity term of fixed assets is determined based on the remaining useful life of assets.
B05/TCTD-HN

practice, these amounts may be rolled over, and therefore, they may last beyond the original
as required by customers, and therefore, classified as current accounts. The maturity term
financial liabilities and customer deposits are determined based on features of these items or
The maturity term of long-term investments is considered as more than five (5) years because

of borrowings and term deposits is determined based on the maturity date in contracts. In
the maturity date as stipulated in contracts. Vostro account and demand deposits are transacted
The maturity term of due to and borrowings from other credit institutions; derivatives, other

42. MARKET RISK (continued)

42.3 Liquidity risk (continued)
The following table presents the Bank and its subsidiaries’ assets and liabilities by relevant maturity based on the remaining period
calculated as at 31 December 2019. In fact, these amounts may be rotated, and therefore, they last beyond the original maturity date.
B05/TCTD-HN

Overdue Current
Above 3 Up to 3 Up to 1 1 to 3 3 to 12 1 to 5 Above
months months month months months years 5 years Total
VND million VND million VND million VND million VND million VND million VND million VND million
Assets
Cash, gold and gemstones - - 8,269,373 - - - - 8,269,373
Balances with the Central Bank - - 12,109,861 - - - - 12,109,861
Due from and loans to other credit
- - 12,664,042 291,155 146,787 - 48,931 13,150,915
institutions - gross
Derivatives and other financial
- - 24,465 - - - - 24,465
assets
Loans to customers - gross 5,733,326 826,400 14,977,003 37,964,226 101,129,046 62,600,194 72,799,579 296,029,774
Purchased debts - gross - - - - - 426,769 - 426,769
Investment securities - gross - - 43,963,580 525,860 1,300,000 4,876,388 29,871,380 80,537,208
Long-term investments - gross - - - - - - 298,971 298,971
Fixed assets - - 344 340 30,833 680,253 7,578,198 8,289,968
Other assets - gross 1,423,307 6,611 8,227,988 1,213,684 3,536,931 14,171,849 14,938,497 43,518,867
Total assets 7,156,633 833,011 100,236,656 39,995,265 106,143,597 82,755,453 125,535,556 462,656,171
Liabilities
Due to the SBV - - 5,280 21,330 70,235 144,344 350 241,539
Due to and borrowings from other
- - 1,025,453 659,026 1,340,858 494,890 5,333 3,525,560
credit institutions
Due to customers - - 168,643,592 82,482,284 127,015,925 22,666,063 36,516 400,844,380
Grants, entrusted funds and loans
- - - - 83,606 - - 83,606
exposed to risks
Valuable papers issued 470 - - 5,533,491 3,956,087 9,490,048
Other liabilities - - 5,324,819 2,395,010 4,324,764 592,368 17,323 12,654,284
Total liabilities - - 174,999,614 85,557,650 132,835,388 29,431,156 4,015,609 426,839,417
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended

236 237

Net liquidity gap 7,156,633 833,011 (74,762,958) (45,562,385) (26,691,791) 53,324,297 121,519,947 35,816,754
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

42. MARKET RISK (continued) 44. SUPPLEMENTAL NOTES ON FINANCIAL ASSETS AND FINANCIAL LIABILITIES (continued)

42.4 Market price risk Financial assets

Financial assets of the Bank and its subsidiaries within the scope of Circular 210 comprise cash,
Except for the assets and liabilities presented above, the Bank and its subsidiaries have no other
gold, precious stones, balances with the Central Bank, due from and loans to other credit institutions,
market price risks which have risk level accounting for 5% or more of net profit or the value of
loans and advances to customers, trading and investment securities, receivables and other assets
assets, liabilities accounting for 5% or more of total assets.
under currency derivative contracts.
43. EXPENDITURE, OPERATING LEASE COMMITMENTS AND FIDUCIARY ASSETS According to Circular 210, financial assets are classified appropriately, for the purpose of disclosure
in the consolidated financial statements, into one of the following categories:
43.1 Expenditure commitments
»» A financial asset at fair value through profit or loss:
Ending balance Beginning balance Is a financial asset that meets either of the following conditions:
VND million VND million
Construction costs and office equipment acquisition 360,835 486,646 (a) It is classified as held-for-trading. A financial asset is classified as held-for-trading if:

- It is acquired or incurred principally for the purpose of selling or repurchasing it in the near
43.2 Operating lease commitments
term; or

Ending balance Beginning balance - There is evidence of a recent actual pattern of short-term profit-taking; or
VND million VND million
- It is a derivative (except for a derivative that is a financial guarantee contract or a designated
Irrevocable operating lease commitments 3,285,124 2,384,696 and effective hedging instrument).
In which:
(b) Upon initial recognition, it is designated by the Bank and its subsidiaries as at fair value
- Due within one year 417,343 303,310
through profit or loss.
- Due from one to five years 1,549,111 968,223
- Due after five years 1,318,670 1,113,163
»» Held-to-maturity investments:

Are non-derivative financial assets with fixed or determinable payments and fixed maturity that
43.3 Fiduciary assets the Bank and its subsidiaries have the positive intention and ability to hold to maturity other than:

Ending balance Beginning balance (a) Those that the Bank and its subsidiaries upon initial recognition designated as at fair value
VND million VND million through profit or loss;
Gold kept on behalf of customers 87,776 101,889 (b) Those that the Bank its subsidiaries designate as available for sale;

44. SUPPLEMENTAL NOTES ON FINANCIAL ASSETS AND FINANCIAL LIABILITIES (c) Those that meet the definitions of loans and receivables.

»» Loans and advances to customers and receivables:

On 6 November 2009, the Ministry of Finance issued Circular No. 210/2009/TT-BTC providing guidance
for the adoption in Vietnam of the International Financial Reporting Standards on presentation and Are non-derivative financial assets with fixed or determinable payments that are not quoted in
disclosures of financial instruments (“Circular 210”) which is effective for financial years beginning an active market other than:
on or after 1 January 2011.
(a) Those that the Bank and its subsidiaries intend to sell immediately or in the near term, which
The Circular 210 only provides for the presentation and disclosures of financial instruments;
shall be classified as held-for-trading, and those that the Bank and its subsidiaries upon
therefore, the concepts of financial assets, financial liabilities and related concepts are applied solely
initial recognition designates as at fair value through profit or loss;
for the supplemental presentation. Assets, liabilities and equity of the Bank and its subsidiaries have
been recognized and measured in accordance with Vietnamese Accounting Standards, Vietnamese (b) Those that the Bank and its subsidiaries upon initial recognition designated as available-for-
Accounting System for Credit Institutions, the official approval of the State Bank of Vietnam for the sale; or
Post-merger Restructuring Plan and the Bank’s proposals for financial regimes and resolutions
in the Restructuring Plan in relation to accrued interest receivables, VAMC’s special bonds, bad (c) Those for which the holder may not recover substantially all of its initial investment, other
debts, doubtful assets and investment securities during the restructuring period and the statutory than because of credit deterioration, which shall be classified as available for sale.
requirements relevant to the preparation and presentation of the consolidated financial statements.

238 239
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN B05/TCTD-HN as at 31 December 2019 and for the year then ended

44. SUPPLEMENTAL NOTES ON FINANCIAL ASSETS AND FINANCIAL LIABILITIES (continued)

The carrying amount and fair value of the Bank and its subsidiaries’ financial instruments as at 31 December 2019 are presented as below:

(*) Because Vietnamese Accounting Standards and Accounting System for Credit Institutions do not have specific guidance on the fair value
amortized cost Book value Fair value (*)
VND million VND million VND million

8,269,373
12,109,861
(*)
(*)
(*)
(*)
(*)
(*)
(*)

(*)
(*)
(*)
(*)

(*)
(*)
Financial assets (continued)

»» Available-for-sale assets:

Total

8,269,373
12,109,861
13,150,915
24,465
292,058,715
423,453
46,786,631
29,710,866
103,854
34,633,044
437,271,177

241,539
3,525,560
400,844,380
83,606
9,490,048
11,333,100
425,518,233
Are non-derivative financial assets that are designated as available-for-sale or are not classified as:

(a) Loans and receivables;

(b) Held-to-maturity investments;

Other assets
and liabilities at

8,269,373
12,109,861
12,716,806
-
-
-
-
-
-
34,633,044
67,729,084

241,539
3,525,560
400,844,380
83,606
9,490,048
11,333,100
425,518,233
(c) Financial assets at fair value through profit or loss.

Financial liabilities

SUPPLEMENTAL NOTES ON FINANCIAL ASSETS AND FINANCIAL LIABILITIES (continued)

Financial liabilities of the Bank and its subsidiaries within the scope of Circular 210 consist of
borrowings from the Government and the Central Bank, due to and borrowings from other credit
institutions, customer deposits, grants, entrusted funds and loans exposed to risks, valuable papers

Available
for sale
securities
VND million VND million VND million VND million

-
-
-
-
-
-
46,786,631
-
103,854
-
46,890,485

-
-
-
-
-
-
-
issued, payables and other liabilities under currency derivative contracts.

Carrying amount
According to Circular 210, financial liabilities are classified appropriately, for the purpose of
disclosure in the consolidated financial statements, into one of the following categories:

Loans and
securities receivables

-
-
434,109
-
292,058,715
423,453
-
-
-
-
292,916,277

-
-
-
-
-
-
-
»» A financial liability at fair value through profit or loss:

Carrying amount and fair value of finanical assets and financial liabilities
Is a financial liability that meets either of the following conditions:

(a) It is classified as held-for-trading. A financial liability is classified as held-for-trading if:

determination, the fair value of these items cannot be determined.

Held to
maturity

-
-
-
-
-
-
-
29,710,866
-
-
29,710,866

-
-
-
-
-
-
-
- It is acquired or incurred principally for the purpose of selling or repurchasing it in the near
term; or

- There is evidence of a recent actual pattern of short-term profit-taking; or

Trading
securities

-
-
-
24,465
-
-
-
-
-
-
24,465

-
-
-
-
-
-
-
- It is a derivative (except for a derivative that is a financial guarantee contract or a designated
and effective hedging instrument).

(b) Upon initial recognition it is designated by the Bank and its subsidiaries as at fair value through
profit or loss.

Grants, entrusted funds and loans exposed

»» Financial liabilities at amortized cost:

Derivatives and other financial assets

Financial liabilities which are not categorised as at fair value through profit or loss will be classified

Due from and loans to other credit

Due to and borrowings from other

as financial liabilities at amortised cost.

Balances with the Central Bank

Other long-term investments

Available-for-sale securities
Held-to-maturity securities
Offsetting financial assets and liabilities

Cash, gold and gemstones

Valuable papers issued

Financial assets and financial liabilities are offset and reported at the net amount in the consolidated

Other financial assets

Loans to customers

Financial liabilities
balance sheet if, and only if, the Bank and its subsidiaries have an enforceable legal right to offset

Due to customers
credit institutions
Purchased debts
Financial assets
financial assets against financial liabilities and the Bank and its subsidiaries have intention to settle

Other liabilities
Due to the SBV
on a net basis, or the realization of the assets and settlement of liabilities is made simultaneously.

institutions
Fair value of financial instruments

to risks
The fair value of cash and short term deposits approximate to their carrying value due to their short
term maturity.
44.

240 241
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2019 and for the year then ended B05/TCTD-HN

45. HEDGING

For assets and liabilities management, the Bank and its subsidiaries have used hedging derivatives
to mitigate credit risk and market risk. Hedging is applied to a specific financial instrument, a
portfolio of financial instruments having fixed interest rate as well as total financial position.

The Bank and its subsidiaries have used fair value hedging to mitigate the risk from the fluctuation
of assets and liabilities’ fair value caused by the changes in interest rate and foreign exchange
rate. For interest hedging, hedged financial instruments include loans and advances to customers,
available-for-sale debt securities and valuable papers issued. For currency hedging, the Bank and
its subsidiaries have used swap contracts.

46. EVENTS AFTER THE BALANCE SHEET DATE

There has been no matter occurring after the balance sheet date that requires adjustments or
disclosures to be made in the consolidated financial statements.

47. EXCHANGE RATES OF APPLICABLE FOREIGN CURRENCIES AGAINST VND

At 31 December 2019 At 31 December 2018

VND VND
SJC gold 4,230,000 3,622,000
SBJ gold 4,005,000 3,545,000
USD 23,170 23,191
EUR 25,993 26,559
GBP 30,227 29,356
CHF 23,957 23,387
JPY 212,82 208,70
SGD 17,219 16,917
CAD 17,747 17,021
AUD 16,246 16,476
LAK 2.54 2.64
THB 796 728
NZD 15,608 15,573

Prepared by: Reviewed by: Approved by:

Mr. Luu Van Hoa Mr. Huynh Thanh Giang Ms. Nguyen Duc Thach Diem
Accountant Chief Accountant General Director

Ho Chi Minh City, Vietnam

24 March 2020