A Newsletter of Bank for Investment and Development of Vietnam JSC Issue No. 7 | Aug 2015

ODA in Vietnam A twenty-year reviewAftershocks Of yuAn DeVAluAtiOn

EXECUTIVE PRODUCERQUACH HUNG HIEPSenior Executive Vice President

EDITORIAL BOARDBRANDING AND PUBLIC RELATIONS

TRANSLATORSNGUYEN TRANTRANG TRINH

HEAD OFFICEBIDV Tower, 35 Hang Voi str., Hoan Kiem dist., Hanoi, Vietnam

Tel: (+84) 4 22200484Fax: (+84) 4 22225316Email: bidvreview@bidv.com.vn

License No. 14/GP-XBBT dated 11 February 2015 by the Ministry of Information and CommunicationsPrinted at Vietnam Book Printing Joint Stock Company

Bank for Investment and development of vIetnam JsC

ABOUT BIDVEstablished in 1957, BIDV has grown to become one of the leading commercial banks in Vietnam. By the end of June 2015, BIDV employs over 22,000 staff and has almost 1,000 transaction points as well as thousands of ATMs. It boasts subsidiaries in finance, banking, securities and insurance. In recent years, BIDV has expanded its business to the international market, with investment in Laos, Cambodia, Myanmar, the Czech Republic, and Russia. BIDV’s total assets are close to USD35 billion, with its charter capital around USD1.5 billion. BIDV stock (BID) is listed on the Ho Chi Minh City Stock Exchange (HOSE). For more information, visit us at www.bidv.com.vn

A beautiful beach in Quang Binh Province

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Editor’s Letter

This month can be known as the ‘month of conferences’ as BIDV coordinated with partners to host the event Operation of Vietnamese Derivative Market. A conference on Quang Binh Investment and Tourism Promotion for 2015 was held, as well as a workshop on the socio-economic development of the Mekong Delta region during the period 2016 - 2020, with orientation to 2030.

Market movements have been significant, with the aftershocks of yuan devaluation, the relaxation of foreign ownership limitations in the Vietnamese stock market and the impact of TPP on Vietnam. In particular, the banking system has released more information relating to M&A, and BIDV has continued to play a supporting role in the system’s restructuring process.

Last but not least, let’s forget about the market and enjoy the beautiful pictures of Phu Quoc island – the heaven of Vietnam, the gorgeous view of The Dunes course in Danang, as well as interesting information about BIDV’s products, services and promotional program.

Dear readers,

IDV successfully organised an appreciation event for international clients and partners on the occasion of its 20th anniversary of transforming into a commercial bank. BIDV hosted many important events including an international symposium named Attracting and Utilising ODA in Vietnam: A Twenty-Year Review in collaboration with the Party’s Central Economic Commission. Other significant events included the signing of both an MOU on comprehensive cooperation and a syndicated loan contract with Cathay United Bank and ANZ Vietnam. The event was organised in Danang City, one of the most livable cities in the world.

Twenty years ago, BIDV was on the brink of historic change and facing many challenges. Now the bank has overcome these challenges and risen through this difficult time, becoming a successful bank at the forefront of the Vietnamese banking sector.

Earlier in the month, BIDV held a conference entitled BIDV- Twenty years transforming into a commercial bank – Development and Integration. The conference attracted the participation of many Vietnamese managers, who commented upon BIDV’s successes over the last two decades.

contents

20 years a commercial bank4. Celebrating achievements

Partners18. A milestone in lending

6. A fully-fledged international standard bank

biDV HigHligHts8. Two decades of ODA

10. The ODA jigsaw

12. From backwater to investment hotspot

14. Momentum for Mekong Delta development

15. Promoting partnerships in Europe

16. Derivatives market – essential for development

20. A mutually beneficial partnership

22. Bancassurance set for rapid growth

24. BIDV to onlend to Japanese SMEs

26. Credit agreement cements Nghe An project

27. BIDV, Bank of Kyoto ink cooperation agreement

market moVements28. Aftershocks of yuan devaluation

contents

30. Affordable housing for prospective home-owners ProDucts & serVices42. Breaking new ground

38. A glance at Vietnam banking system

acHieVements anD awarDs39. Deal of the year

40. Leader in Technology and Operations

41. BSC snags Finance Asia award

43. A plethora of prizes

Rewarding customers new and old

44. Hello, It’s BIDV 19009247

lifestyle45. For the love of books

46. Fairway celebrations

48. The heaven of Vietnam

csr50. Disaster relief for Myanmar

Aid for coal industry

32. TPP – opportunities for breakthrough

34. Weighing up foreign ownership

36. M&A gather pace in banking sector

20 years a commercial bank

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tue minh

celebrating achievements To celebrate twenty years of operation as a commercial bank, BIDV held an appreciation event on the evening of August 7, 2015, in the beautiful coastal city of Danang.

assets of nearly USD35 billion and a network of close to 1,000 transaction points. BIDV is trusted as a leading brand in the commercial banking sector.

Mrs. Men Sam An, Deputy Prime Minister, Minister of National Assembly-Senate Relation and Inspections of the Royal Government of Cambodia commented, “BIDV is well-known and widely recognised by many customers throughout

Cambodia, a country that this commercial bank has a long reputation in. BIDV is a leading bank amongst the largest banks operating in Vietnam and in Cambodia. The bank has greatly contributed to the reconstruction and development of both countries. After beginning its operation as a commercial bank in 1995 in Vietnam, BIDV, particularly in recent years, has achieved rapid growth and success in international commerce and integration.”

Mr. Somsavat Lengsavad, Deputy Prime Minister of Lao P.D.R., remarked: During its twenty years of operation as a commercial bank, BIDV has played a key role in the financial and banking sector of Laos for the last sixteen of those years. Through implementation of the responsibilities entrusted by the governments of both Laos and Vietnam, BIDV has contributed significantly to the economic development of Laos. The bank has provided loans for key strategic economic projects and

Twenty years ago, BIDV was on the brink of historic change and facing many challenges. Now the bank has overcome these challenges and risen through this difficult time to become a successful bank at the forefront of the Vietnamese banking sector.

Business partners, acquaintances and friends were reunited at the event, and reminded of both the challenging period

and the achievements BIDV has made since this period. Twenty years after transforming into a commercial bank, BIDV has overcome its initial difficulties and shown confidence in its path to become one of the top two thousand largest global enterprises, the top thirty largest banks in Southeast Asia as well as one of the top ten biggest tax payers to the state budget in Vietnam. BIDV can also lay claim to the title of the leading bank in the Vietnamese banking sector, with total

Attending the ceremony were Mr. Somsavat Lengsavad, Deputy Prime Minister of Lao

P.D.R., Mrs. Men Sam An, Deputy Prime Minister, Minister of National Assembly-Senate Relation and Inspections of the Royal Government of Cambodia, Mr. Kyaw Kyaw Maung, Governor of the Central Bank of Myanmar, as well as representatives of the Government of Vietnam, large corporations, financial institutions and international partners and clients of BIDV.

The event was a great success, with live music, and the chance to meet and mingle at a relaxing, seaside venue.

Mrs. Men Sam An, Deputy Prime Minister of the Royal Government of Cambodia

Mr. Nirukt Sapru, CEO of Standard Chartered Bank

20 years a commercial bank

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contract signing and bilateral meetings On the morning of August 7, 2015 BIDV held bilateral meetings with fourteen international partners of leading financial institutions and some of the largest in the world. These included the Industrial and Commercial Bank of China (ICBC); HSBC, Standard Chartered, MetLife USA, JICA, Juroku Bank, Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank (Japan), CTCB, Chang Hwa Commercial Bank (Taiwan), Russian Foreign Trade Bank (VTB), International Investment Bank – IIB (Russia) and Mashreq Bank (UAE). On the same day, BIDV concluded important memorandums of understanding and contracts with Cathay United Bank (CUB) and ANZ Vietnam.

infrastructure projects in various provinces throughout Laos. BIDV has become a symbol for the economic cooperation between the two countries. As well as business operations, BIDV has been active in social security development in various fields including health, education and training.

Nirukt Sapru, CEO of Standard Chartered Bank Vietnam commented at the ceremony: “Throughout its fifty eight years of development, and particularly in the last twenty years, BIDV has become a highly competitive bank, capable of maintaining sustainable growth while expanding its business both regionally and

internationally. Following twenty years of operation as a full fledged commercial bank, BIDV has become a highly regarded and leading financial institution in Vietnam. BIDV plays a leading role in all areas of the banking sector”.

BIDV leadership at the bank's appreciation event, August 2015

Mr. Somsavat Lengsavad - Deputy Prime Minister of Lao P.D.R.

20 years a commercial bank

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tran duc luong, former president of Vietnam

BIDV has grown significantly from

its humble beginnings as a bank with small-scale credit activities, into a fully-fledged bank receiving international recognition in the region.

During the period 1994-1995, the first two ordinances relating to the Vietnamese banking system were implemented. At that time other commercial banks were developing, whilst BIDV was merely a credit institution disbursing the State budget. However, after these two ordinances were released, BIDV was able to transform from being under the charge of the Ministry of Finance into a fully operating commercial bank.

All this was not without its challenges, and BIDV staff and management have worked tremendously hard to achieve the outstanding results seen today. BIDV is immensely proud of these efforts. BIDV has developed into an effective bank, leading the

a fully-fledged international standard bank

Phan anh

During the conference entitled BIDV- Twenty Years Transforming into a Commercial bank – Development and Integration, Vietnamese managers commented upon BIDV’s successes over the last two decades.

way in supporting the development of the nation. BIDV not only operates well within Vietnam but has also expanded to integrate effectively in the international market.

cao sy kiem, Former State Bank Governor

I have been fortunate enough to work

with BIDV since it first transformed into a commercial bank. During the transformation time, BIDV encountered many challenges. However, those twenty years are evidence of BIDV’s tremendous perseverance and creativity as well as its responsible contribution towards the development of Vietnam, the life of its employees and social security as a whole.

From its beginnings as a bank providing resources from the state budget, BIDV has transformed into a commercial bank. At that time, BIDV had yet to open any branches and its human resources were inadequate. Since then, it has developed into a modern commercial bank employing

the latest technology and offering the most up-to-date services.

Furthermore, BIDV is a pioneering business in terms of expansion into the international market. BIDV is the first bank to form a joint venture with a partner in Myanmar. BIDV is continuing to expand into Laos, Myanmar, Cambodia, Russia and the Czech Republic.

In many phases of Vietnam’s banking system restructuring process, BIDV has been the leading bank supporting the State Bank of Vietnam in restructuring weaker banks. This year has also seen the Mekong Housing Bank (MHB) merge into BIDV.

Following twenty years of challenges and triumphs, BIDV can be proud of what it has achieved so far.

le duc thuy, Former State Bank Governor

Between the years 1996 and 2007,

the Vietnamese economy progressed rapidly towards a market-oriented economy, with particular development seen in banking credit operations. During this period BIDV made significant change, transforming across the board.

20 years a commercial bank

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Since 2007, Vietnam has had to cope with the global financial crisis whilst attempting to stabilise the macro-economy, settle non-performing loans, and simultaneously restructure the banking system. This proved to be a challenging period for BIDV as well as many other commercial banks.

Reflecting on the past twenty years, it is clear that a significant contribution has been made by both management and staff at BIDV. The bank has learnt from experience and developed to operate more safely and effectively.

dao minh tu, Deputy Governor, State Bank of Vietnam

Following twenty years of growth

and development in becoming a commercial bank, BIDV has confirmed its position as a leader in the financial market. The bank supports the State in implementing the national monetary policies, contributing to macroeconomic stability and thus speeding up the country’s industrialisation and modernisation.

During the difficult economic period, BIDV followed the State’s direction, by actively reducing interest rates, focusing loans on the State’s priority areas, promoting production and

applying preferential credit packages. Furthermore, the bank worked with enterprises to find solutions to their difficulties. All this served to support the economy during this challenging time.

Throughout its fifty seven years of operation, the bank has channelled most of its investment into the nation’s infrastructure, creating a solid basis to support the economic and social development of the country. As a commercial bank with strong financial capacity, the bank has been able to focus capital on many national key projects where other commercial banks could not.

Pham hong son, Vice Chairman of the State Securities Commission (SSC)

BIDV has functioned

effectively as a nominated-payment bank for all transactions on the stock market during the fifteen years of development of the SSC. BIDV has constructed an efficient information technology system as well as infrastructure that can cope with the demands of the stock exchange and the Vietnam Securities Depository Centre (VSD). BIDV has conducted transactions for nearly 2,300 trading sessions with total value of USD268.5

billion, ensuring safe and accurate payments.

BIDV has been actively involved in the equitisation process of State owned enterprises (SOEs) and has successfully issued long-term bonds eligible for listing on the market. From 2006 to date, the bank has consistently issued bonds to raise capital with a total volume of up to USD358 million. These bonds are of international standard and with terms of ten, fifteen or twenty years.

nguyen ngoc bao, Central Economic Committee deputy head

Since 1996, the Bank has been entrusted

to manage USD548 million from the World Bank to fund three projects in rural finance. These projects have resulted in a total investment in the rural area of nearly USD2 billion, with 1.7 million loans granted and 410,000 new jobs created, helping farmers to increase their income and improve their living conditions.

In addition, BIDV sponsor many social welfare programs and projects equating to thousands of billion VND. These projects are primarily in the mountainous provinces, in remote and isolated areas.

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ODA has significantly contributed to Vietnam’s achievement of its socio-economic development objectives, with the country receiving an average of USD3.5 billion ODA per year.

On August 7, 2015, the Central Economic Commission and Bank for Investment and

Development of Vietnam JSC (BIDV) co-held an international symposium ‘Attracting and utilising ODA in Vietnam: A twenty-year review’. This aimed to review the impact ODA has had on development in Vietnam over the last twenty years.

the uncountable contribution

Thanks to the invaluable support of more than fifty international donors working in development cooperation in almost all sectors, areas and provinces, by the end of 2014, total committed ODA funds to Vietnam reached USD89.5 billion. The ODA agreements signed in the last twenty years averaged around USD3.5 billion per year. The total disbursed concessional loans hit USD54 billion, or 73.2 percent of the total signed ODA. Mr. Vuong Dinh Hue, Chairman of the Central Economic Commission, commented that with these achievements, Vietnam can be seen as a successful model of mobilising and using ODA.

ODA to Vietnam over the past twenty years has provided a source for Vietnam to achieve important outcomes in socio-economic development. Specifically, ODA has contributed to the conduct of an open, diversified and multilateral external policy of the country, building confidence and encouraging foreign businesses and investors to expand business and investment in Vietnam.

ODA has supported research and design of development policies and significantly contributed to capacity building and improvement of public service delivery and socio-economic infrastructure including transport, energy, healthcare, education and training. It has also enabled development of agricultural, supported

two decades of oda

viet dung

poverty reduction, environmental protection and improvement, mitigation of natural disasters and adaptation to climate change.

Furthermore, ODA has supported human resource capacity through local and external training activities, transfer of technology, provision of knowledge and sharing experiences on social and economic management.

According to Deputy Prime Minister Vu Van Ninh, ODA accounts for ten percent of Vietnam’s total development fund, focusing on key industries such as transport, energy, health, education and environment. ODA is essential for the development of domestic production and increase of international trade.

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“Most importantly, the committed ODA showed the strong support of the international community for the renovation and development of Vietnam and the trust of donors in Vietnam’s development strategy and ability to utilise ODA effectively,” he said.

bidv – effective management of oda funds

Contributing to the success in utilising ODA is the role of commercial banks, financial institutions with experience in managing and disbursing ODA from donors. With fifty eight years of operation, BIDV was assigned to serve large-scale projects financed by the ODA funds.

Having managed over 200 programs and projects totaling USD15 billion, BIDV is one of the leading State-owned Commercial Banks (SOCBs) assigned to serve large-scale projects. These have been financed by funds trusted by the governments of Japan, France, Germany

and Switzerland, and international financial institutions including the World Bank, ADB, NIB and EIB. These programs and projects have been served by BIDV through timely, effective and safe disbursement of funds.

Through management and implementation of ODA-funded programs and projects, BIDV has made active contributions to poverty reduction, improvement of living standards and the development of key industries including electricity, water supply and drainage, transport, telecommunications, agriculture and rural development.

In addition, BIDV successfully performed its role as a wholesale bank of rural finance projects (Phase I, II, III). Since 2002, as well as ODA-funded projects, BIDV has also been entrusted by the Government to be the Employer (Wholesale Bank) for 3 tranches of rural finance projects financed by a WB loan of USD548

million. One hundred percent of the credit has been disbursed, adding VND44 trillion (USD2.1 billion) to rural development investments and making over 1.7 million loans for households and businesses, including 600,000 low-income households, and generating 410,000 new jobs in rural areas nationwide.

According to Tran Bac Ha, Chairman of BIDV, BIDV’s achieved outcomes in management and implementation of ODA-funded programs and projects have contributed to improving Vietnam’s image and reputation in the international business sector, building donors’ confidence in supporting Vietnam with development funding. Specifically, the World Bank considers Vietnam as the most successful country to have implemented the rural finance model, both in terms of model, administration and implementation arrangements as well as investment effectiveness and socio-economic impact on the rural sector.

Nhat Tan Bridge

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the oda jigsaw

viet anh

As Vietnam develops into a low middle-income country, the amount of ODA it receives will reduce, and thus it will be forced to mobilise capital at higher costs and under stricter conditions. Therefore, Vietnam must make significant changes in managing and using ODA effectively.

Ph. D. Nguyen Thanh Do Former Director General of Debt

Management and External Finance Department, Ministry of Finance

“concerns exist which should not be neglected”

We have already seen many ODA programs and projects either fail completely or fail to deliver the desired effect. One example of this is a Ha Long frozen seafood factory funded by Italy’s ODA which has been inactive due to unavailability of raw materials. Another is a clean water supply project in Kon Tum, Yen Bai, funded by French ODA loans. This project has so far been ineffective as only one third of the design capacity is being used.

These failing projects were mainly on-lending ODA projects. Under this mechanism, the failure becomes clear when the project is unable to make the required repayments. However, seventy percent of ODA projects are implemented under the whole grant from the State budget. The most apparent of these projects’ flaws is the wasteful use of funds, caused by delays, high investment units costs, ineffectiveness or scattered investments.

The international symposium ‘Attracting and utilising ODA in Vietnam: A twenty-

year review’ co-held by the Central Economic Commission and BIDV has created an open forum for individuals, institutions and experts to share their multi-directional views, strict assessments and suggestions to help Vietnam continue to receive ODA.

Accordingly, the forum participants emphasised the lingering mindset that views ODA as a non-refundable source to be granted by the government and ODA loan to be paid by the government. The consequence of this misconception is demonstrated in the efforts to access ODA without sound evaluation of economic efficiency, sustainability and ability to make repayments. A transparent supervision scheme is required to restrict ODA donor role, ensuring investment efficiency.

Economist Tran Du Lich

“oda should not be considered as grants”

ODA loans are not grants and they carry risks, particularly in terms of exchange rates. For example, Japanese yen has weakened against the U.S. dollar recently. But if conversely it had strengthened, how would Vietnam have coped with managing ODA loans in yen?

ODA should be used as the initial capital to encourage capital contribution from society. The State only has to allocate enough reciprocal capital for ODA projects. Therefore, we need the responsibility of local provinces in terms of capital contribution and close supervision on the ODA projects implementation progress.

Cai Mep International Terminal

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Le Dao Nguyen Member of BOD, BIDV

“mobilising resources from society to finance counterpart funds for oda projects”

Counterpart funding has been one of the causes of delays in many programs and projects, therefore, BIDV suggests new methods to ensure counterpart funding.

The first is mobilising resources from society to finance counterpart funds for ODA projects by allowing various economic sectors, both public and private, to invest in BOT, BT and PPP schemes, thus reducing the burden on the state budget. The investors can participate as employers, or become involved in project management.

The second is promoting on-lending to commercial banks in ODA projects with a credit component, either in the form of wholesale banking (the rural finance project) or retail banking of the project funds - for example renewable energy or SME lending projects - under which the commercial bank is responsible for counterpart funding.

In terms of modality of ODA projects, Vietnam should promote on-lending of ODA funds, with the credit institution on-lending and taking credit risks to reduce the pressure of domestic counterpart funding and public debts, while meeting the funding demand for socio-development and fulfilment of the set development objectives.

“the government must develop vietnam’s capital market”

The government must put plans in place for the long-term development of the capital market, ensuring Vietnam can develop independently with the future goal of no longer requiring or relying on ODA. We need to simplify the ODA disbursement and lending process, ensuring transparency and restricting moral hazard. To supervise these processes, involvement from the National Assembly, the community and even the online community is required.

“relationships with donors are of significant importance”

We often emphasise the ODA capital’s role. However, the relationships with the international donors should not be underestimated. Over the next five years, Vietnam needs USD400-450 billion in investment for development. This is equal to USD90 billion each year. Therefore, Vietnam must have strategies in place both for attracting investment and using it effectively.

Economist Le Dang Doanh

Cao Viet Sinh Former Permanent Deputy Minister of Planning and Investment (MPI)

Cai Mep International Terminal

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A Conference on Quang Binh Investment and Tourism Promotion for 2015 held in the province’s Dong Hoi city opened new opportunities for investment and development.

a kingdom of caves

Throughout 2015 and 2016, Quang Binh Province is hoping to secure investment in thirty five key project areas including general infrastructure and infrastructure in industrial zones; commercial and tourism development; industrial production, agriculture, culture, health and education.

Quang Binh is known as the world’s ‘kingdom of caves’. Currently, Quang Binh is receiving a great deal of attention from both local and international media due to its spectacular underground cave system. The New York Times included Quang Binh in its top attractive destinations list, ranking it eighth out of fifty two world destinations and the top destination in Asia. US Travel magazine Business Insider voted Son Doong cave as one of the top twelve most spectacular caves in the world.

Positive signals

As well as the media, Quang Binh is attracting the attention of domestic and foreign investors and enterprises due to its development potential

from backwater to investment hotspot

hoang duc

and the supportive mechanisms and policies that are in place.

At the conference held on August 14 of this year, the People's Committee of Quang Binh Province gave investment certificates to nine projects with a total investment of USD40 million. These included Hoang Long Mineral’s titanium ore project; Quang Binh garment factory governed by Vietnam Textile and Garment Group; and an electrical cabinets and wastewater treatment project run by Everglory Environmental Technology Company.

Furthermore, leaders in Quang Binh Province signed memorandums of understanding for ten more projects with a total investment of USD690 million, confirming the desire for

investment in Quang Binh. Large projects include the FLC tourism complex project, featuring a golf course, resorts, luxurious villas and entertainment with a total investment of USD390 million; Binh Ha Breeding Joint Stock Company’s cattle breeding and beef project with a total investment of USD170 million; Vingroup’s Vincom Trade Centre project with expected total investment of USD37 million; An Viet Investment and Infrastructure Company’s Bao Ninh and Hai Ninh golf course projects, with total investment capital of USD35 million; as well as the Hon La port construction and management project managed by FLC Group, with a total investment of USD23 million.

Addressing the conference, Deputy

Deputy Prime Minister Nguyen Xuan Phuc (center) speaks at the Conference

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Prime Minister Nguyen Xuan Phuc praised the combined efforts and proactiveness of the authorities of Quang Binh Province and BIDV in organising the investment and tourism promotion conference. The Deputy Prime Minister also requested for a road map for the completion and implementation of the projects to be developed, which will in turn contribute to the socio-economic development of the province.

bidv - a suPPorting role

At this conference, BIDV played four roles, as initiator and co-organiser; as the focal point calling investors and businesses to survey and research investment opportunities in Quang Binh; and as the sponsor and the bank providing credit for projects. As co-organiser, BIDV continued to show its enthusiasm and interest in Quang Binh while confirming its proactive and pioneering role in supporting the province in its socio-economic innovation and development.

In 2014, BIDV coordinated with the province to successfully hold the first

investment promotion conference in Quang Binh Province. At the first conference, investors committed to invest USD1 billion in the province, with thirteen projects being granted investment certificates with a total capital of over USD390 million. A further five memorandum of understandings were signed, with a total investment of USD525 million.

Tran Bac Ha, BIDV’s Chairman commented, “BIDV identifies itself as both a companion and a reliable partner of Quang Binh Province in terms of the development of the province, particularly in the tourism industry. BIDV provides consultancy on strategy for tourism development in Quang Binh and continues to call for domestic and foreign investors to invest in tourism infrastructure. Furthermore, BIDV is committed to supporting those businesses investing in Quang Binh Province, by arranging and providing capital and providing banking services to support manufacturing and production.”

In line with its commitment to supporting businesses investing in

In the first six months of 2015, Quang Binh saw nearly 1.8 million visitors. This number is expected to reach 3.3 million for the whole year, with total revenue from tourism reaching approximately USD185 million. To date, Quang Binh has 268 accommodation establishments, including sixty hotels ranging from one to five stars and twenty five domestic and international travel agencies.

Quang Binh, BIDV signed agreements in principle to fund four projects with a total investment of over USD500 million including a project of Vinatex, one of Truong Thinh Group and two projects of FLC Group.

At the conference BIDV also announced and awarded social security worth over USD1 million to Quang Binh province, including USD230,000 to a tourism development program; USD460,000 to a program for integration knowledge for young people in Quang Binh; USD275,000 for the construction of a preschool in Quang Trach district; as well as funding one hundred bicycles for police officers in the province.

Quang Binh has great potential for tourism development

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The Conference on Socio-Economic Development of Key Economic Regions in the

Mekong Delta for the 2016 - 2020 period, with a vision to 2030 was held on August 21, 2015 in Can Tho City by the Southwest Steering Committee, the Ministry of Planning and Investment, Can Tho People’s Committee and BIDV. Mr. Vu Van Ninh, Deputy Prime Minister, Head of the Southwest Steering Committee was in attendance and played a key directing role.

The conference included presentations on orientation for socio-economic development in the Mekong Delta; the current status of production, purchase and export of agricultural and fishery products in the Mekong Delta and the future orientations of these; as well as the current status of the application of technology and science in agriculture in the Mekong Delta and its developmental directions.

Addressing the conference, Deputy Prime Minister Vu Van Ninh stressed, “The key task of the region is the

shifting of economic structure and production reorganisation. There is a need to move labour from the agricultural to the service sector and processing industry to serve agricultural production, which will result in raising the income of local people. The Deputy Prime Minister also urged cities and provinces to actively replicate the new model of cooperatives, form new cooperative groups in agricultural production and to study measures to diversify resources from the private sector to create momentum for the development of the Mekong Delta.

BIDV joined the conference with three roles: initiator, co-organiser and sponsor. As of July 2015, BIDV has 28 branches and 89 transaction offices in the Mekong Delta, as well as 141 ATMs and 457 POS with 245,800 cards issued. These effectively meet the banking service needs of the local people and businesses, contributing to the socio-economic development of the region.

Mr. Tran Bac Ha, BIDV Chairman said:

“In the 2016-2020 period, BIDV pledges to increase total outstanding loans in the Mekong Delta from the current figure of between USD1.4 and 1.6 billion to USD5.3 billion by 2018 (an increase of 3.2 times from 2015) and USD7.4 billion by 2020 (an increase of 4.6 times), figures that will account for 16.5 percent of total loans granted by credit institutions in the Mekong Delta. BIDV has also committed to supporting key projects in the region, providing USD460-690 million to Quan Chanh Bo and Cho Gao canal projects as well as USD550-690 million for infrastructure projects in Phu Quoc district”.

At the conference, BIDV leaders signed agreements with the Southwest Steering Committee and the Ministry of Transport. Amongst others, these included an agreement in principle on financing National Road 1 BOT projects in Soc Trang and Bac Lieu and an agreement in principle on providing working capital to Nam Hai, Thanh The and Co Chien companies in the fisheries sector. The total value of the agreements signed was over USD115 million.

momentum for mekong delta development

thuong mai

The conference on socio-economic development in the Mekong Delta, August 2015

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On August 22, 2015, the 9th Conference of Vietnamese Businessmen in Europe

took place in Varna, Bulgaria. The forum, which is sponsored by BIDV, functioned as a meeting place for Vietnamese entrepreneurs from fifteen countries of the European community. Eighteen Vietnamese ambassadors to European countries were in attendance.

This is an annual event, which helps provide the operational and investment direction for Vietnamese enterprises in Europe as well as overseas Vietnamese conducting business in both Europe and Vietnam. The forum has significantly contributed to the development of the Vietnamese business community in Europe.

With the theme Vietnamese Enterprises in Europe – Towards Sustainable Integration and Development, the forum aimed to support Vietnamese enterprises to operate stably and adjust their business mindset in order to develop long-term; organise reasonable production models; connect and establish distribution systems; raise the profile of Vietnam and its natural and cultural beauty; and connect Vietnamese communities in Europe.

BIDV sponsored the forum, aiming to both support and connect with Vietnamese enterprises in Europe,

particularly in Eastern Europe where many Vietnamese people reside. On this occasion, BIDV signed an MOU with the United Association of Overseas Vietnamese Enterprises in Europe. BIDV will provide consultancy, support, and create favorable conditions for enterprises of the association to use the bank’s services and products including letter of credit opening, cash transfers, and contract payments through its international transaction system.

Moreover, BIDV - through IDCC Europe - will consider financing the association’s members at preferential cost and employing quick procedures.

BIDV will directly support or become the correspondent bank of European banks in terms of project financing for members of the United Association of Overseas Vietnamese Enterprises in Europe.

Sponsoring the forum as well as signing the MOU will help BIDV to coordinate more closely with Vietnamese businesses in Europe. At the same time, BIDV can extend its brand image and reputation into Europe. Overall, these moves reflect BIDV’s concern with Vietnamese enterprises in Europe and the bank’s drive to expand its operations into Europe.

Promoting partnerships in europe

hoa Quynh

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The derivatives market in Vietnam is still in its infancy; however, its establishment has been necessary to meet the diversified demands of market members. Financial institutions are important market members as they contribute to the effective operation of the market.

foundations for the vietnamese derivatives market

To prepare for the market establishment, the State Securities Commission of Vietnam (SSC), Vietnam Institute for Advanced Study in Mathematics (VIASM) and BIDV co-organised the seminar entitled Operation of Vietnam Derivatives Market. This was effective as a forum for exchanging market operation and management experience as well as for the preparation and application of maths into the market.

Derivatives transactions such as forward transactions appeared under Decision No. 65/1999/QD-NHNN. Swap transactions also appeared earlier under Decision No. 430/1997/QD-NHNN - later known as Decision 893/2001/QD-NHNN; however, such

derivatives market –essential for development

anh tuan

operations have not yet fully developed.

Decision 366/QD-TTg approving the establishment and development of the derivatives markets in Vietnam with effect from March 11, 2014 is the first legal document governing the derivatives market in Vietnam.

Finally, on May 5, 2014, the government promulgated Decree 42/2015/ND-CP providing the derivatives and derivatives market with clear information and guidelines including governing scope, business

organisation, organisation of trading markets, clearing and settlements.

Mr. Tran Phuong, BIDV Senior Executive Vice President, said the decree has provided the initial foundations for the establishment and development of the Vietnamese derivatives market.

Mr. Nguyen Son, SSC Market Development Director emphasised the importance of the decree as developing the derivatives market was an important element in the stock

Professor Ngo Bao Chau

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market development strategy to 2020. “Currently there are only very basic securities in the financial market, such as stock, bond and fund certificates, with a lack of financial instruments like derivatives for hedging and leverage investment.”

As such, the opening of the derivatives market is a crucial solution to the long-time financial market development that requires essential changes. Investors have increasing demands for not only simple structured products but also more sophisticated products to diversify their investment portfolios.

role of financial institutions

According to Mr. Can Van Luc, Senior Executive Vice President of BIDV, financial institutions are special trading members of the market. Financial institutions play the role of intermediaries, trading between members, connecting the demands of purchasers and sellers in terms of

derivative contracts and increasing the liquidity of the markets.

On the other hand, financial institutions will directly use derivative products for similar purposes to those of investors, including risk hedging, speculation and arbitrage.

Trinh Hoai Giang, the deputy CEO of Ho Chi Minh Securities Corporation (HSC) commented that according to the agenda of the SSC, there will be several new developments in the domestic stock market within the next twelve to eighteen months. These changes will lead to significant increases in trading values as well as new ways of operating for securities companies.

As a large financial institution in the market, HSC has prepared fully for participation in the market including preparation for membership, building a new system – a general concept trading system - business processes and procedures and human resources.

However, any market contains risks. Experts including Professor Henri Berestycki have said that these risks could be eliminated by the application of maths into the financial market in general and the derivative market in particular.

Having already recognised the importance of financial maths application, earlier this year, BIDV coordinated with VIASM to establish the Lab for the Research and Application of Mathematics in Economics, Finance and Banking (FMathLab). VIASM and BIDV also signed a memorandum of understanding on the research and application of mathematics in economics, finance and banking

According to Professor Ngo Bao Chau, providing a high quality financial maths education forms the basis for conducting research projects. The application of maths in the derivative market is essential.

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a milestone in lending

Quynh chi

BIDV recently signed the biggest international syndicated loan ever offered by an overseas bank to a commercial Vietnamese bank.

In 1994, with the support of Krungthai Bank, BIDV became the first commercial bank to

receive a syndicated loan of USD100 million from twenty global banks. Marking the twentieth ceremony of transforming into a commercial bank, BIDV continues to affirm its position and prestige, receiving appreciation from international financial and credit institutions with the offshore five-year term syndicated loan of USD105 million.

This loan, which was granted on August 7 this year, is the largest offshore syndicated loan that a Vietnamese commercial bank receives.

Eleven foreign banks participated in this syndication, including Cathay United Bank (CUB), Grand Capital International Limited, Mega International Commercial Bank, Chang Hwa Commercial Bank, E.Sun Commercial Bank, Hua Nan Commercial Bank, Taishin International Bank, Sunny Bank, The Shanghai Commercial & Savings Bank, Land Bank of Taiwan and Far Eastern International Bank.

The signing ceremony was held in Danang, during BIDV’s appreciation event in celebration of the bank’s

twenty year anniversary of transforming into a commercial bank. On the same day, BIDV and CUB also signed the Memorandum of Understanding on Comprehensive Cooperation and the

Remittance Agreement.

This five-year USD105 million syndicated loan will provide BIDV with stable supplementary funding of foreign

Cathay Financial Center, Taiwan

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currency, contributing significantly to BIDV’s capabilities not only to supply loans for projects of national economic development, but also to enhance the bank’s prudential ratios in accordance with the SBV’s regulations. This long-term, reasonably priced loan has proved BIDV’s wide accessibility to overseas medium to long term funding and asserted BIDV’s credibility in the international financial market.

The MoU includes cooperation in banking services, cooperation between overseas presences and subsidiaries of CUB and BIDV, customer referrals, introduction of investment opportunities, training and experience exchange.

The remittance agreement will create a new and fast remittance channel at low cost, meeting the diversified demand of enterprises and residents of the two countries.

Cathay United Bank is one of the biggest banks in Taiwan, with its holding company, Cathay Financial Holdings, the largest financial holding in Taiwan. CUB has a network of 165 branches in Taiwan as well as fifteen foreign branches and representative offices. It has total assets and equity of USD70.7 billion and USD4.62 billion respectively. As of December 31 2014, this accounted for thirty two percent of total assets and thirty four percent of total profit of Cathay Financial Holding Co. Ltd (CFHC). CFHC is the largest financial group in Taiwan with total assets of USD225.4 billion and total owner equity of USD14.7 billion, as of March 31, 2014. CFHC is a multi-sector financial group with seven subsidiaries operating in finance and banking, insurance, securities and investment.

According to Mr. Chang-Ken Lee, President & Chief Executive Officer of Cathay United Bank and President of Cathay Financial Holdings Co., Ltd., it has been a great honour for Cathay United Bank Co., Ltd. to be and continue to be a long-term partner of BIDV. Cathay United Bank appreciated the opportunities they had to work with BIDV, particularly in the successful arrangement of syndicated loans.

“We strongly believe that BIDV will continue to achieve success in its development progress and we would like to continue our partnerships with the bank,” emphasised Mr. Chang-Ken Lee.

Mr. Tran Bac Ha, BIDV’s Chairman said the MoU confirmed the two banks’ commitment to future development, bringing more valuable cooperation opportunities and enhancing service and product quality for all customers.

Mr. Phan Duc Tu, CEO of BIDV (L) and Mr. Chang-Ken Lee, President and CEO of CUB, President of CFHC (R) in the signing ceremony

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a mutuallybeneficial partnership

anh tuan

BIDV and ANZ have been in cooperation since 1993 and the relationship between the two banks has risen to a new level through the signing of the Memorandum of Understanding on Comprehensive Cooperation (MOU).

The MOU demonstrates the strong commitment of the two banks in implementing

prioritised cooperation in banking products and services. The banks each bring their own expertise and services. These include bank-to-bank loans; handling of foreign exchange; international payment services; trade financing; project financing and

syndication; bond issuance and fund raising advisory services.

Furthermore, the two banks offer knowledge of both the interbank market and capital markets and their derivatives products. The MOU also enables the banks to offer investment opportunities in Vietnam to Australian and New Zealand investors; fosters cooperation between the overseas offices of ANZ and BIDV; as well as encouraging the sharing of experience through staff training and professional development.

According to Mr. Tran Bac Ha, Chairman of BIDV, BIDV is confident that the signing of the MOU will

In 1993, ANZ became one of the first foreign banks to establish its presence in Vietnam. The ANZ Vietnam franchise supports customers in the areas of retail banking and wealth management and consumer finance as well as serving large and emerging corporate segments, financial institutions and the public sector.

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promote bilateral cooperation and proves the commitment of the two banks to working together for mutually beneficial development. This will bring valuable opportunities and continuous improvement of banking products and services catering to the customers of each party. The two banks will support each other’s sustainable development, contributing to the development of each party as an individual organisation.

As well as the important commitments it makes, the MOU is of significance as it was signed on BIDV’s twentieth anniversary of transforming into a commercial bank with international integration.

Twenty years ago, BIDV was a subsidised bank allocating funds from the State budget, serving only the key infrastructure and development projects of the country. Since transforming into a commercial bank,

BIDV has made many innovative developments and stepped into the global market, earning its reputation as a brand within the international community.

The MOU indicates ANZ Banking Group’s confidence in BIDV, as one of the leading banks possessing a long and successful history of banking operations and providing banking services in thirty four countries globally.

According to Mr. Dennis Hussey, CEO of ANZ Vietnam, the MOU signing with BIDV marks an important milestone in the relationship between the two banks, at the same time showing ANZ’s long term commitment to the Vietnamese financial market. “We have confidence in BIDV as a partner for positive change and development.”

BIDV and ANZ Group have been in cooperation since 1993, when BIDV

BIDV is one of Vietnam’s leading commercial banks, providing diverse operations through a nationwide network and business experiences in Laos, Cambodia and Myanmar. BIDV is proactively reforming to become an advanced and globally recognised bank operating in accordance with international standards and best practices.

first launched its international banking operations. Since 2008 when ANZ Group began to set up subsidiaries in Vietnam, the two parties have cooperated more comprehensively and effectively in the fields of treasury, payment and trade finance, clearing, training and experience exchange.

By signing this MOU, both parties believe they can deepen cooperation further, bringing mutual benefits to the two banks and their customers.

Mr. Phan Duc Tu, CEO of BIDV signed the MOU with Mr. Dennis Hussey, CEO of ANZ Vietnam

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What factors prompted MetLife to begin investing in the bancassurance sector in Vietnam?

MetLife has been providing life insurance, annuities, employees benefits and asset management for almost 150 years. Today we serve 100 million customers in nearly fifty countries around the world. We have been in Asia for sixty years and our vision is to be recognised as the leading global life and health insurer in the region. To do this, we continue to extend our presence in high growth, emerging markets, and the addition of Vietnam is a great example of our strategy in action. Vietnam is a dynamic emerging market and is one of the fastest growing life insurance markets in Asia with an expected annual growth rate of fifteen percent over the next five years.

Our decision to focus on bancassurance is based on our belief that the bancassurance channel will be the fastest growing channel in the market. In Vietnam, bancassurance accounts for less than ten percent of sales, however in similar markets in Asia bancassurance accounts for more than fifty percent of new sales. We expect that Vietnam will follow

bancassurance set for rapid growth

hoai thu

that pattern as both the banking and insurance sectors continue to develop.

Is Vietnam’s bancassurance market growing in line with that of the rest of Asia?

Vietnam is one of the fastest growing markets in Asia due to its improving economy and strong support from the Vietnamese Government and Ministry of Finance. However, the life insurance penetration is still below other countries with Vietnam’s life insurance penetration/GDP per capita less than one percent, compared to for example Indonesia, which is at two percent, Malaysia at approximately three percent and Thailand at four percent. This means that there is still a lot of

opportunity for the market to grow and we expect the growth that we have seen over the last few years to continue.

Bancassurance in Vietnam has not developed as quickly as in other markets where the channel represents over fifty percent of new sales. We expect that Vietnam will catch up quickly with other markets and that bancassurance will become the fastest growing channel.

Can you summarise for us the present state of both the insurance industry as a whole and bancassurance in Vietnam?

Vietnam stands amongst countries with the highest life insurance market growth in Asia. With a forecasted

One year on from the formation of BIDV MetLife - a joint venture between MetLife Limited, BIDV, and BIDV’s affiliate, BIC- Dustin Ball, CEO of the company, shares his thoughts on the development of bancassurance in Vietnam.

Dustin Ball, CEO, BIDV MetLife

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economic growth rate of six percent per year and per capita income of two thousand USD per year in 2016, personal financial needs are expected to increase rapidly. Vietnam has the thirteenth highest population in the world, at ninety million. These are predominantly young people, who have increasing financial needs for health care and education services. Life insurance growth rate is expected to be fifteen percent over the next five years. The most popular product lines are savings, investments and endowments, similar to other Asian markets where products are mostly distributed through agency channels. Bancassurance is higher than fifty percent in China, Korea, Taiwan, Malaysia and Thailand. The bancassurance channel in Vietnam is still very new, accounting for less than ten percent of ANP, however, it has seen rapid growth of as much as thirty percent annually in recent years.

How do you expect to see bancassurance in Vietnam develop over the next five years?

We believe bancassurance holds great potential and is still largely untouched in Vietnam. In the next five years, we expect the life insurance industry to witness remarkable growth in bancassurance.

What are BIDV MetLife’s unique products and capabilities that make it an active competitor in the Vietnamese market?

BIDV MetLife brings together the credibility and trust of BIDV, one of

Vietnam’s oldest and leading banks serving seven million customers, partnering with the experience of MetLife, a leading global life insurance provider with 150 years of experience, serving 100 million customers worldwide. MetLife has consistently offered innovative financial products and high levels of service. It provides international standard best practice and significant investments in innovation, such as its e-learning platform - the first of its kind in Vietnam - to improve the way BIDV employees work and to offer increased flexibility, connectivity, speed and high-level personalisation capabilities for BIDV MetLife’s customers.

Why is bancassurance set to become a trend in Vietnam?

Bancassurance has become the trend in many countries in recent years, accounting for a large part of revenue. MetLife has presence in bancassurance in nine countries across Asia, with nearly 200 successful partnerships with global, regional and local banks, many of which are long-term. In 2014, bancassurance contributed twenty one percent to the overall MetLife sales in Asia. Vietnam must follow this trend if it is to become a regional market competitor.

In the banking industry, the goal is to build a complete insurance services supply chain for customers so that insurance becomes one of the key operations. Banking and finance groups are under pressure to diversify their operations to maximise profits and reduce risks. Insurance companies are under pressure to diversify their

distribution channels.

Do you view building up BIDV MetLife as a leading bancassurance provider in Vietnam as an opportunity or a challenge and for what reasons?

We see a lot of opportunities ahead to build up BIDV MetLife as leading bancassurer:

Firstly, we have BIDV as an excellent partner. BIDV is a huge financial institution in Vietnam and provides a trusted and effective financial resource with an extensive network of seven million customers throughout the country. The BIDV brand has been built over the last fifty eight years to become a trusted household name for Vietnamese customers and clients. In its integration into the world economy, BIDV has transformed its operation and development model from that of credit provider to investment and development projects into a commercial bank with modern retail activities. These include its strategy to strengthen insurance activities throughout BIDV’s entire network.

This life insurance joint venture is the combination of MetLife’s experience and financial strength as a world class life insurer and BIDV’s nationwide extensive network of branches and customers. We will design innovative products and services to meet the increasingly diversified needs of our customers, contributing to the development of Vietnam’s life insurance market whilst increasing its competitiveness and reducing sales costs and increasing benefits to clients.

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bidv to onlend to Japanese smes

tue minh

BIDV, the Japan International Cooperation Agency (JICA) and Japanese SMEs Company (JSC) have signed an agreement to finance a rental factory for SMEs in southern Dong Nai Province’s Nhon Trach 3 Industrial Park.

Under the agreement signed on August 13, 2015, the JICA will lend BIDV a preferential loan

of 2.94 billion Japanese yen (USD24 million) with a fifteen year tenor. The loan will come from Japan’s Private Sector Investment Finance (PSIF). BIDV will then on-lend to JSC to finance the USD 33-million rental factory project.

According to Mr. Quach Hung Hiep, BIDV’s Senior Executive Vice President, one of BIDV’s key development strategies is to establish and maintain cooperation with foreign financial institutions and international cooperation agencies in providing banking services and utilities in order to support FDI enterprises in Vietnam, particularly those owned by Japanese. The selection of BIDV for the JICA’s two-step loan has further confirmed the bank’s prestige and capabilities in the international capital market. The bank’s securement of the loan for the Many Japanese SMEs with high technology are seeking to rent a factory in Vietnam

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As of June 2015, Japan has become one of the two biggest investors of the 103 countries and territories investing in Vietnam. 2,661 projects are in place with a total registered capital of USD37.7 billion. Two-way trade turnover between Vietnam and Japan ranked third at USD28 billion. Japan is now the largest ODA partner of Vietnam, with a total capital flow of USD27 billion over the past twenty years. This figure accounted for 72 percent of ODA funds for Vietnam. There are currently over 2,000 Japanese enterprises operating in Vietnam.

factory-for-lease project has confirmed its commitment to supporting businesses which have Japanese investments in Vietnam.

The JICA considered several Vietnamese banks for the loan, as well as conducting an evaluation study of around 5,000 Japanese firms in terms of factory demand in Vietnam’s industrial parks. Established in June 2015, JSC is a joint venture between the Tin Nghia Corporation, the Forval Japan Company and the Dong Nai Container Port Company.

Mr. Yasushi Tanaka, director general of the Private Sector Partnership and Finance Department, JICA, said the co-operation would be an opportunity to expand credit relationships with one of the leading banks in Vietnam. The project in Dong Nai Province aimed to meet the business demands of the support industry in Vietnam. It was

expected that under the support of Japan’s Saitama Province, there would be many SMEs with high technology seeking to rent a factory in the area.

Mr. Nguyen Thanh Binh, a member of the JSC’s board of directors, appreciated the positive support received from JICA and BIDV. He said the JICA’s long-tenor loan disbursed through BIDV would help the company to save costs, stabilise and expand its production. The company is targeting the provision of long-term factory areas for Japanese companies in the Dong Nai province.

With the signing of the two-step loan agreement, the parties hope to continue building stronger relationships, contributing to the long-term development of each party and bringing mutual benefits to businesses within the two countries. If achieved, these outcomes will help realise the

objectives set out in the Vietnam - Japan cooperation framework towards 2020-2030, of developing strategic relationships between the two countries.

Mr. Quach Hung Hiep, BIDV's SEVP (L) and Mr. Yasushi Tanaka, director general of the PSPF Department, JICA (R) in the signing ceremony

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credit agreement cements nghe an project

thy huong

A credit agreement between BIDV, Bac A Bank and Tan Thang Cement Joint Stock Company will finance Tan Thang’s cement plant project, kickstarting the development of the cement industry in Nghe An Province.

This marks the second key project of Vietnam’s cement industry to be co-financed by BIDV,

the first being the Song Lam cement project. The Tan Thang project is valued at USD210 million, including a developer’s equity capital of USD49 million and maximum loan value of USD145 million. BIDV will provide USD110 million, with Bac A Bank financing USD34.5 million. The loan tenor is up to twelve years. BIDV and Bac A Bank will provide full banking services and products to assist the developer to complete the project as per schedule.

Addressing the ceremony, Mr. Tran Bac Ha, Chairman of BIDV, said: “The signing of the credit agreement to finance Tan Thang cement project

demonstrates BIDV’s commitment to supporting the socio-economic development of Nghe An over the next five years. BIDV believes that given the building and operational capacity, the company and its shareholders will be able to complete the project according to schedule, creating jobs for local people and contributing to the economic development of both Quynh Luu District and Nghe An Province, where the plant lies.

The Tan Thang cement plant has a production capacity of 5,000 tonnes of clinker per day, equivalent to 1.98 million tonnes of cement per year. The plant is in the North Central region of Vietnam. It lies twelve kilometers from National Highway 1A; thirty kilometers from Nghi Son deep-water seaport

Representatives of BIDV, Bac A Bank and Tan Thang Cement signed credit agreement

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BIDV and Bank of Kyoto officially signed a cooperation agreement on August 24,

2015 to serve Japanese customers operating in Vietnam. Kyoto is the twentieth Japanese bank to enter into a cooperation agreement with BIDV.

Under the agreement, the Bank of Kyoto and BIDV will cooperate to provide banking products and services to the Bank of Kyoto’s Japanese businesses investing and conducting business in Vietnam. The two banks will cooperate to meet the needs of customers on various banking products and services, including accounts, deposits, loans, guarantees, domestic and international

bidv, bank of kyoto ink cooperation agreement

an nam

settlements, forex trading and derivatives.

In addition, the two banks will cooperate to provide information and consultancy to customers on the business and investment climate in Vietnam, legal landscapes for foreign investors in the banking and financial sector as well as business matching services.

The Bank of Kyoto is one of the largest regional banks in Japan, with total assets as of March 31, 2015 at 8,242.8 billion Japanese yen, equivalent to USD68.59 billion. The Bank of Kyoto received a long-term Issuer Rating ‘A’ by S&P. The Bank of Kyoto is headquartered in Kyoto prefecture, Japan.

and twenty kilometers from Dong Hoi seaport. The plant is a key project of Nghe An Province listed on the government’s plan for the development of the Vietnamese cement industry to 2020 with vision to 2030. Nghe An is one of the few provinces in Vietnam to have very large stocks of limestones and clay for cement production. Given its mineral potential, Nghe An is expected to become one of the big centers of building and industrial materials in the North Central region in the near future.

The project will produce PCB 50 and PCB 40 cement of high quality marketed in Nghe An, Ha Tinh, the South Central region, Central Highlands, the Southeast and the Southwest regions. Thirty percent of the products will be exported to Laos and other countries.

Mr. Nguyen Cao Dien, CEO of Tan Thang Cement Joint Stock Company said: “With credit from BIDV, a long-established and prestigious bank, Tan Thang Cement Company is confident that it can successfully implement the project. The company is committed to utilising the credit efficiently to ensure the quality, progress and effectiveness of the project, bringing the most competitive benefits to investors, financial institutions and employees and contributing to the socio-economic development of the province.”

The Bank of Kyoto, Japan

According to the Ministry of Construction, cement consumption of the entire cement industry in 2015 is estimated to reach 72-74 million tonnes, a figure up 1.5 to 2 percent compared with 2014. In particular, domestic consumption is expected to be in the region of 53-54 million tonnes, with cement export at 19-20 million tonnes. In the first six months of 2015, cement consumption was estimated at 34.16 million tonnes, reaching 47 percent of the plan set for 2015- domestic consumption at 25.97 million tonnes and export at 8.19 million tonnes.

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the yuan devaluation

On the morning of August 11, 2015, the People's Bank of China (PBC) increased the USD/CNY exchange rate by 1.9 percent to 6.2298, keeping the exchange rate band at +/- two percent. Along with the decision on the yuan devaluation, PBC also announced a mechanism for listing new average exchange rates to enhance flexibility, improve the guidance of the policy rate and gradually make yuan develop close to market trends.

After three days, the average interbank exchange rate announced by PBC increased by 4.5%.

Global stock markets plunged after China’s decision to adjust the exchange rate. Key stock indexes like the S&P500, Dow Jones, FTSE 100, DAX and Nikkei dropped between one and three percent.

imPlications for vietnam

In terms of bilateral trade relations between Vietnam and China, the devaluation of the Chinese yuan will place great pressure on the trade balance of Vietnam over the coming time. Assuming that other factors are unchanged, imports will be encouraged, export will be limited and trade deficit will therefore be

widened. If nominal devaluation of the CNY increases up to ten percent, trade deficit with China could worsen from the end of 2015, continuing into 2016.

The overall balance of payments may be negatively affected, initially in several areas. Firstly, trade balance between Vietnam and China is likely to see an increased deficit right at the end of 2015 which may last into the subsequent years if CNY continues to devalue. As a result, the general trade balance will be negatively affected. Secondly, the volatile foreign exchange market will negatively impact the attraction of indirect investment capital.

Vietnam’s financial market will also be markedly affected by the PBC’s adjustments, firstly the foreign exchange market, followed by the currency market and government bonds.

Immediately after China adjusted their exchange rate policy, Vietnam’s foreign exchange market saw sharp fluctuations. The USD/VND exchange rate increased significantly by about 1.3 percent from 21,820 to 22,100, which is close to the new ceiling rate allowed by the SBV. The market liquidity was weak, and market sentiment was volatile. There appeared a speculation of foreign currency and customers’ demand for early payment.

aftershocks of yuan devaluation

nguyen Phan

In mid-August, the world currency markets were shaken when the Chinese yuan (CNY) was suddenly devalued. According to the BIDV Research Center, this impacted greatly on international markets, including Vietnam.

It is forecast that the forex market may continue to be affected in the following aspects. Firstly, the SBV’s exchange rate policy will be under great pressure and there is a possibility that the SBV may further adjust the exchange rate band if China continues the strong devaluation of the yuan. Secondly, the market sentiment saw a negative trend and the trust in the SBV’s ability to keep

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the rate at a two percent maximum tended to thin due to the objective market pressure. This market sentiment turmoil is likely to spread if the central bank does not have a clear message and consistent policies to intervene in the market in the coming time.

scenarios

Developments of the market in the time to come will depend largely on the next steps of the PBC. The BIDV Research Center predicts two scenarios for the two levels of adjustment by the PBC.

The first scenario is that the PBC will soon have the interventions to stabilise the foreign exchange market in the short term, for example by selling foreign currency, to curb the depreciation of the CNY, and keep the yuan at an appropriate level. The PBC can adjust the USD/CNY exchange rate

in the range of 6.4 and 6.5 -up about five percent compared to the time before the adjustments.

The second scenario is where the PBC continues to devalue the yuan, increasing the reference exchange rate by about ten percent against the time before the adjustments. Accordingly, the USD/CNY exchange rate is forecast to maintain strong momentum and may reach 6.8 following the general directions of the central bank.

According to the BIDV Research Center, the first scenario will be more likely. The reasons given are that after the PBC adjusted the exchange rate, the difference in the exchange rate of CNY/CNH in the market and the exchange rate announced by the central bank was narrowed down to 0.2 percent from 1.3 percent. This is one of the reasons why the IMF refused

to include CNY in the currency basket for SDR calculation. Furthermore, given China's world position today, a decision to devalue the local currency to stimulate exports will face strong criticism from countries globally.

recommendations

Given the sudden and rapid movements of the market following the CNY devaluation and the continued market fluctuations, the BIDV Research Center gives some recommendations to the regulators.

The State Bank should intervene immediately, in a consistent and aggressive manner, to stabilise the market and reassure the market sentiment. Specifically, it should set the exchange rate for commercial banks and take appropriate action to avoid big fluctuations due to psychological factors and maintain flexibility in regulating the money supply through open market operations in order to avoid disturbances in the liquidity of the banking system.

Furthermore, the SBV should work with agencies such as the Ministry of Industry and Trade, Ministry of Planning and Investment and Ministry of Finance, to make an overall assessment of the purpose, moves and trends of the PBC’s adjustments, not only in the short term but also in the medium and long term, as well as the possible implications for Vietnam's economy, and develop appropriate scenarios for response.

BIDV also proposed that the Ministry of Industry and Trade should evaluate the impact of the PBC’s adjusted exchange rate on the bilateral trade balance between Vietnam and China in particular and the trade balance of Vietnam in general following the scenarios of volatility of the CNY. They should continue to implement strong measures to diversify Vietnam’s export as well as import markets, reducing the dependence on the Chinese market through trade promotion and similar means, as planned. Global stock markets plunged after China’s decision to adjust the exchange rate

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affordable housing forprospective home-owners

binh an

In the first seven months of the year, the real estate market has seen growth with both increases in liquidity and prices in all segments. Among these, affordable housing has shown its advantage in creating more opportunity for end-users to own their own home.

Positive market signs

According to the figures from the Vietnam Real Estate Association (VNRA), more than 26,000 units were successfully transferred in the first seven months of the year, a twofold increase compared with the same period last year.

Dozens of stalled projects have reportedly been revived by new developers under improved financial conditions, providing an additional housing supply for local buyers.

The Ho Chi Minh City Real Estate Association (HOREA) chairman Le Hoang Chau said the local housing supply would expand further once more stalled projects were taken over by financially strong developers and guiding documents for the laws on real estate business and housing were issued, paving the way for more efficient market transactions.

According to Nguyen Tran Nam, chairman of the VNRA, the market

is currently in fever, particularly in certain segments such as small scale units and projects belonging to prestigious investors.

Notably, affordable and mid-end projects are attracting many customers because of their reasonable prices.

In the first seven months of this year, small scale units of less than seventy square metres and selling for around USD44,750, were the most sought-after in the market.

Figures from Cushman and Wakefield Vietnam confirmed that low-end and affordable apartments will continue to be most in demand. A spokesperson commented, “Small sized, affordable apartments will continue to be the most sought-after. Notably, there is no future supply in the city centre location due to limited supply of development sites and difficulties obtaining permission for residential building.”

With an abundant stock of affordable

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apartments, sufficient land set aside for project development and improving infrastructure, these areas are attracting both developers and low income earners.

stimulus Packages

The government has issued many credit stimulus packages aiming to help revive the commercial housing market.

Two years ago the government decided to provide a USD1.4 billion credit package to help investors and developers to provide affordable housing and buyers to own their own homes.

Despite claims from investors that it is not easy to access the loans from this package, it has shown to be instrumental in reviving a range of projects that have been delayed for a long time.

According to the Ministry of Construction, following two years of implementation local commercial

banks had disbursed USD332 million out of a total of USD608 million committed.

Although this figure was as low as around forty five percent of the total commitment of the bank system for investors and buyers, it had still helped more than 17,000 families to buy their own homes.

According to the Ministry of Construction, more than 100 social housing projects in key cities like Hanoi and Ho Chi Minh City have been completed, including 38 projects with 19,680 apartments for low-income earners, and 64 housing projects with 20,270 apartments for workers. Around 150 other projects are currently under construction, including 91 housing projects for low income families and 59 projects with 122,500 apartments for workers.

A spokesperson from HOREA claimed that it is preferable to lease social housing rather than sell it because the price of many commercial housing

projects is as low as social housing projects. In order to encourage enterprises to invest in housing for lease projects, the government should extend the payment of land use for enterprises.

At present affordable and social housing only meets one-third of the public demand.

BIDV has been playing a flagging position. The bank has launched many preferential credit packages to support borrowers in owning their own home. In particular, BIDV has recently announced its latest package worth nearly USD540 million to individual and household customers. Accordingly, borrowers can buy, construct and upgrade their houses at low cost. The lending rate is very competitive at seven percent per year with a lending period of up to twenty years with flexible options tailored to customers’ demand.

Central Park - Binh Duong New City, Binh Duong industrial - urban - service complex

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the mutual agreement of countries accounting for forty Percent of global gdP

At the end of 2005, Brunei, Chile, New Zealand and Singapore signed a free trade agreement called the Trans - Pacific Strategic Economic Partnership Agreement (TPP). In September 2008, the United States declared its wish to take part in the TPP, prompting a new agreement. Australia, Peru, Vietnam, Malaysia, Canada, Mexico and Japan took part in this TPP, raising the total number of member countries to twelve. The GDP of the TPP members now accounts for forty percent of global GDP. South Korea, Colombia, Costa Rica, Indonesia, Thailand, Taiwan as well as several other countries have also expressed their desire to join the TPP.

Since March 2010, nineteen formal rounds of TPP negotiations have taken place. TPP is expected to be the new economic cooperation model, creating the maximum favorable conditions for commerce and investment

tPP–opportunities for breakthrough

hoang thanh

Trans-Pacific Partnership is considered a significant treaty with the potential to change Vietnam’s position in international trade cooperation. Once completed, the TPP is expected to boost the economy, lower barriers to trade and investment, increase exports, and create more jobs for local people.

enhancement. It is expected to become the nucleus to form an FTA for the whole of the Asia-Pacific region. The main goal of the TPP is the elimination of taxes and barriers for goods and services traded among its members. In addition, the TPP will also unify laws and rules among countries, such as those on intellectual property, food quality and labor safety.

creating oPPortunities for vietnam

Vietnam plays an important role in the TPP negotiations. It has a significant market that can bring relatively large added value during negotiations. Many countries already have FTA with Vietnam, including Australia, Japan, Chile, New Zealand and Singapore. The participation of Vietnam in the TPP will bring these countries many further benefits, particularly in the areas that they have yet to establish relations.

Firstly, the TPP will help Vietnam balance trade relations with global markets,

avoiding over-dependence on a certain market. Currently Vietnam imports and exports predominantly in the East Asian region, with a turnover proportion of above sixty percent. This proportion carries potential risk if East Asian economies were to become less stable. Therefore, the negotiation and signing of FTAs with a number of key markets in the world including the US and EU may help Vietnam to address this imbalance.

Creating free trade relations with giant markets such as the US and Canada along with the removal of export tax on agricultural products in the TPP will hike Vietnam’s exports. If export tax reduces to zero percent, Vietnamese garments, textiles and footwear exports can expand in TPP countries, including the US. Similar opportunities could exist for fisheries and wood products.

In addition, the clear commitment in terms of investment in environment

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august 201533

improvement and intellectual property will help attract foreign investment in Vietnam, with the potential to create more jobs and increase production capacity. Vietnam can take advantage of wider export opportunities by participating in both regional and global value chains.

Finally, TPP and WTO commitments will help Vietnam to reallocate resources more effectively, supporting restructure of the growth model. The TPP aims to provide a fair competition environment, transparent policies for progress and encourages the participation of the community. It will also support the complete legal framework and strengthen administrative reforms.

inevitable challenges

Vietnam also faces some challenges when participating in the TPP. Firstly,

in terms of competitiveness in business, products and as a nation, Vietnam is currently fairly low and slow to improve. Tariff removal will lead to an increase in imported products from TPP countries into Vietnam with competitive prices. As a consequence, this brings about a further challenge in terms of narrowed market share.

In addition, the legal framework completion is presenting significantly more challenge to Vietnam than other countries with better developed legal systems.

In terms of commerce, agricultural and fisheries products will face non-tariff barriers such as those relating to chemical residues, packaging and labels. Vietnamese products do not consistently meet the quality and food safety criteria.

Although there are some limitations

in place in opening the banking and financial market, the domestic banks and financial institutions will still face pressure from large and global institutions that compete in the Vietnamese market.

With the opening of public procurement, Vietnam will also encounter disadvantageous effects due to the entrance and penetration of foreign contractors that domestic ones cannot compete with.

Overall, commitments and the implementation of commitments in the TPP is compatible with the requirements of reform and economic restructuring and changing the pattern of growth of Vietnam in its current development stage.

In July, President Obama met with Vietnam's Communist Party General Secretary Nguyen Phu Trong at the White House and praised the progress made in relations between the U.S. and Vietnam. According to Minister of Industry and Trade Vu Huy Hoang, as a result of this visit, Vietnam and the US will coordinate closely with related parties to conclude TPP negotiations.

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Decree 60 was brought in to amend and supplement several articles of Decree No. 58/2012/

ND-CP on Securities Law, which was issued three years ago. Since this decree has been expected for a long time, why has it only just been released?

The Vietnamese securities market is still in its infancy and therefore the policy making process as well as market studies can take time and effort. Moreover, the decree issuance must comply with other state laws and policies, ensuring consistency. As such, policymakers had to consider both timing and conditions when issuing this decree.

weighing upforeign ownership

thu trang

Expansion in foreign ownership has been predicted by many foreign investors in the Vietnamese securities market. BIDV Review interviewed Mr. Nguyen Son, head of the Market Development Department, State Securities Commission of Vietnam, to review the positive effects as well as the challenges brought about by Decree 60/2015/ND-CP (Decree 60), which relaxed foreign ownership limitations.

This time can be considered the ‘golden time’, when sufficient conditions to release a decree were met and foreign ownership limitations in the Vietnamese securities market were relaxed. This will support the market liquidity as well as attracting cash flow to domestic enterprises. These conditions are as follows.

Firstly, Vietnam’s new Law on Investment and the Law on Enterprises, which take effect from July 2015, provide clear messages on institutional reform, and create the principal foundation to calculate the proportion of foreign ownership.

Secondly, Decree 58/2012/ND-CP

and Decision 55/2009/QD/TTg, both of which relate to foreign ownership in the securities market, revealed limitations which must be amended based on current market conditions.

Thirdly, with Vietnam having joined the WTO five years ago, many of the WTO’s commitments are now becoming effective. The bilateral and multilateral economic agreements are soon to be concluded (Trans - Pacific Strategic Economic Partnership Agreement -TPP), and the Asean Economic Community (AEC) will be introduced at the end of this year.

With great effort and careful consideration from the lawmakers, Decree 60 was finally issued.

What are the main differences between Decree 60 and the previous regulations in terms of foreign ownership limitations?

The most notable changes with this Decree are in comprehensiveness and flexibility. It allows unlimited

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august 201535

ownership of normal businesses, while keeping a specific limit for public enterprises with conditional business lines. Most businesses would receive foreign ownership extension of maximum one hundred percent based on the WTO’s commitment.

Decree 60, along with other regulations which allow for greater flexibility, will enhance the market and speed up economic restructuring.

The Decree will take effect on September 1, 2015 and will replace the Prime Minister’s Decision No. 55/2009/QD-TTg from 2009 on the ratio of foreign to local investors in the Vietnamese securities market.

The positive effects of Decree 60 are very clear. Do you think the decree will pose any challenges for Vietnam?

Decree 60 was issued at exactly the right time, following fifteen years of operation of the Vietnamese stock market. Foreign investors have an excellent opportunity to invest in a

market when the macro economy is stable, inflation is curbed and the country is integrating more fully. The total book value of 340 state owned enterprises which will be equitised in the period 2015 -2017 reached USD25 billion. These enterprises are expected to receive more cash flow from foreign investors at better prices thanks to the newly opened ownership, contributing to their successful equitisation.

Moreover, this is an important step in promoting public investment restructuring, encouraging the private sector’s development, socialising investment and gradually decreasing the burden on the state budget and improving the competitiveness of the economy.

However, there are some challenges ahead that necessitate restructuring of the Vietnamese securities market in order to attract more foreign investment.

Firstly, in a small-scale market, most top enterprises will have sold the

maximum stakes to foreign investors. Therefore, the lift on the foreign cap would indirectly support the market, and would not be a catalyst for significant continuous growth.

In addition, a strict supervision and management system is necessary to forecast and provide solutions to the movement of foreign cash flow.

Thirdly, the ability to cope with takeover risk of Vietnamese enterprises is still limited. In particular, the legal system and specialised legal frameworks are not yet complete.`

The fourth issue is the conflict between domestic and foreign shareholders. However, effective and transparent business operations, good management capabilities, and sound investor relationships will help limit any takeover risk. These factors are unique values which can serve to promote the brand and position of Vietnamese enterprises in negotiating M&A deals.

market movements

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bustling m&a market

At an extraordinary meeting on July 11, Sacombank shareholders approved the bank’s merger with Southern Bank and the issue of three-fourths of a share for each share of the latter.

Many other M&A were seen in the financial sector, such as that of BIDV and MHB, Mekong Development Bank and Maritime Bank, and HDB and Dai A Bank.

The restructuring of several credit institutions through M&A is planned in the near future, such as of Vietcombank and Saigon Bank, PGBank and VietinBank, as well as Nam A Bank and Eximbank.

The State Bank of Vietnam said M&A would positively contribute to the restructuring process and also speed up the implementation of the government and the central bank's policies to stabilise the economy and

the banking system.

Consulting firm RECOF Corporation of Japan also said Vietnam ranked high among the ASEAN countries in the number of M&A deals and the value of the deals that involved the world's inflow capital.

In the first half of this year, Vietnam, with 77 deals, was second only to Singapore with 93 deals. Through these deals, Vietnamese enterprises received USD1.122 billion from investors elsewhere, ranking third, after Singapore and Indonesia.

Between 2005 and 2009, Vietnam got 307 deals, worth USD2.888 billion, which placed the country in sixth position among six ASEAN countries, after Singapore, Malaysia, Indonesia and Thailand, as well as the Philippines.

Deputy Minister of Planning and Investment Dang Huy Dong said the government had issued a decree allowing larger room for foreign investment in various areas.

The implementation of laws and policies were creating a better legal environment for the M&A market, he said.

The country's deeper and wider integration into the world's economy

was offering new opportunities for M&A activities, he said.

The restructuring of commercial banks and divestment from non-core business by state-owned enterprises have made the M&A markets more attractive.

Statistics from the MAF research group show that the value of M&A transactions last year in Vietnam rose 20 percent compared with 2013, reaching USD4.2 billion (more than 300 deals), but still lower than the record USD5 billion in 2012.

new wave of widening networks

M&A has become a vital task for several banks as the central bank aims to cut the number of banks by half to 14-17 banks in the next three years.

The banking sector saw a wave of voluntary M&A with the aim of enhancing their strengths and to help them support each other better. The trend is expected to help the market achieve major changes in the near future.

M&As could help banks take advantage of the branches system, transaction points as well as the strengths of each

m&a gather pace in banking sector

hoa vu

Three banks bought out at 0 dong and several mergers and acquisitions (M&A) have been the highlight of the banking sector this year, as the restructuring process deadline ended.

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august 201537

bank with their credit products.

More importantly, two banks that are similar in management and business culture can run their operations better.

Experts said M&A on a voluntary basis in the banking sector would lead to major changes in the market, forming new large banks with diversified products, widening networks, strengthening finance and capital and saving costs.

Sharing his ideas, Nguyen Thuy Duong, deputy general director of EY Vietnam said the country needed a number of national banks that are large enough, operating regionally and globally, to support other Vietnamese banks’ integration into the ASEAN Economic Community. Vietnam needs such large coverage for national banks, he said.

"It is not meant to deter the development of small-scale banks,

but to direct them towards niche or specialty markets. For instance, Japan has five world-class banks, and yet has more than 40 local-level banks. The situation is the same in South Korea and Malaysia. After completing their restructuring process, the number of banks in those two countries significantly decreased to 18 and 8 respectively, of which two to four are of regional level," Duong said.

mhb's flash merger with bidv

The merger between Mekong Housing Bank and the Bank for Investment and Development of Vietnam was completed on May 25, 2015, just 55 days after the central bank established the steering committee for the merger. This is considered to be the fastest merger as per standards, as normal deals often take eight to 12 months.

On April 25, the State Bank of Vietnam issued Decision No.589/QD-NHNN

on the merger. The deal was finalised quickly because they are state-owned banks. The state has a 96 percent stake and a 91 percent stake in BIDV and MHB, respectively. That was the reason why the merger received support from the shareholders and the SBV.

In addition, BIDV had prepared carefully for the merger as soon as it received SBV’s approval.

BIDV announced a 12 percent rise in its charter capital from USD1.30 billion to USD1.44 billion. The increase in the charter capital follows its merger.

BIDV Chairman Tran Bac Ha told a news conference in Hanoi that a month after the merger, the bank's operations were functioning efficiently.

It would strengthen BIDV's performance, help maintain its leading position in Vietnam and prepare it for competition with regional banks, he said.

market movements

Dec.2011 Ficombank, Tin Nghia Bank and Saigon

Commercial Bank (SCB) consolidated into SCB

Aug. 2012

May 2013 TrustBank renamed Vietnam

Construction Bank (VNCB)

Oct. 2013

Nov. 2013 DaiA Bank merged with HDBank

Dec. 2013 TPBank successfully restructured

May. 2014 Navibank successfully restructured and

renamed National Citizen Bank (NCB)

Feb.2015 The State Bank of Vietnam

acquired VNCB at price 0

Apr. 2015 The State Bank of Vietnam acquired

Oceanbank at price 0

May 2015

Jul. 2015 The State Bank of Vietnam acquired

GPBank at price 0

Southern Bank merged with Sacombank

Westernbank and PVFC consolidated into PVcombank

Habubank merged with SHB

MHB merged with BIDV

DongA Bank put under special supervision by the State Bank

MDB merged with Maritime Bank

Vietnam banking RestRuctuRingA glANCe At

Aug. 2015

PGBank merged with Vietinbank

37 commercial banks instead of 42 after the restructuring3 banks acquired at price 04 banks with majority stakes owned by the State

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The Vietnam M&A Forum, held on August 6 this year, is Vietnam’s largest annual event focusing

on mergers, acquisitions and strategic investments. Its was co-held by the Ministry of Planning and Investment, Vietnam Investment Review and AVM Vietnam. The Forum included workshops, domestic and international deal-makers meetings and an awards ceremony, related to the theme “Countdown to the next market boom”. Nearly 500 business leaders, local and international investors as well as media attended the event. The Vietnam M&A Forum in 2015 provided an overview and sharp analysis of the current M&A wave in Vietnam.

The merging of Mekong Housing Bank (MHB) into BIDV was commended as a successful example due to its fast and standardised merger process. It was evaluated as the pioneering merger deal of the credit institution restructuring scheme of phase two in 2015.

Can Van Luc, Ph.D, Senior Executive Vice President of BIDV, represented the bank and delivered a speech entitled “M&A experience in Vietnam”. Mr. Luc shared his direct experience of M&A as well as providing useful information

for businesses about the process, while discussing the future of mergers of banks and financial institutions in Vietnam.

Being honoured the award once again confirmed BIDV’s status as a leading financial institution, following the directions of the government and the central bank in the process of implementing restructuring of credit institutions in accordance with the government’s Decision 254/QD-TTg. It also proves the position and reputation of BIDV in the financial and banking sector in Vietnam.

On May 25, 2015, BIDV and MHB concluded the merger hand-over, completing the final procedures to formally merge MHB with BIDV. The entire process of implementation of the merger took only 55 days upon the decision by the State Bank of Vietnam (SBV) on establishing a steering committee for the merger and within one month of the SBV Governor’s approval of the merger. After the merger, BIDV had total assets of nearly USD35 billion, charter capital of nearly USD1.5 billion and 1,000 transaction points across the country.

deal of the year

lan Phuong

BIDV was recently awarded Best M&A Deal of the Year at the Vietnam Mergers and Acquisitions Forum in Ho Chi Minh City.

Mr. Can Van Luc, Senior Executive Vice President, BIDV (L) received the award

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The Asian Banking and Finance (ABF) awards were held at the Shangri-La Hotel, Singapore

in July and attracted more than 200 bankers from over 30 countries. Representing BIDV were Mr. Dang Manh Pho, Senior Executive Vice President and Mr. Nguyen Xuan Hoa, Head of Information Technology Center.

“This year marks the tenth year of our Retail Banking Awards, and the fourth year of our Wholesale Banking Awards. Asian Banking and Finance magazine is immensely proud to have produced a long and esteemed roster of winners comprised of Asia’s most impressive banks,” said Tim Charlton, editor-in-chief of ABF.

The ABF awards recognise the most innovative projects and best practice in Asia’s retail and wholesale banking. BIDV’s IT Center’s nomination for ABF’s annual awards was supported

by BIDV’s leadership team, following a self-evaluation that found they met the award criteria.

Technology and Operations forms one of the categories in ABF’s wholesale banking awards. Within this category the award is given to the most innovative, unique IT product launched in 2014 which has been shown to bring high efficiency to the business operations of the bank.

In April 2015, BIDV’s IT Center completed and submitted the nomination documents to the organising committee. The documents also provided an overview of BIDV’s IT applications, management areas, and IT application level. The IT Center chose its Online Tax Payment Portal product for nomination.

In June 2015, ABF announced that BIDV had been recognised as the

leaderin technology and operations

Quoc bao

BIDV is proud to have been named Vietnam Domestic Technology and Operations Bank of the Year by Asian Banking and Finance magazine.

Following the government’s policy on reducing the use of cash in public administration, BIDV worked with the General Department of Taxation to implement Vietnam’s first online tax payment service. The service was officially launched in 2014 and rolled out nationwide in early 2015. BIDV showed its creativity as the leading bank supporting state administrative institutions to reform areas of public spending. BIDV currently accounts for over 70% of the market share in electronic tax collection amongst banks in Vietnam.

Vietnam Domestic Technology and Operations Bank of the Year. The award confirms the significant growth in the IT operations of BIDV, which has served to enhance the bank’s position and competitiveness locally and abroad.

BIDV representatives received the award

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august 201541

Hanoi-based BIDV Securities Company (BSC), a subsidiary of BIDV, won the Best Debt Capital

Market House award of 2015 from Finance Asia, one of Asia's leading financial magazines. The awarding ceremony was held on August 27, 2015 at Ritz-Carlton Hotel in Hong Kong.

Aimed at honoring securities firms and investment banks that have secured a large number of debt capital market deals of significant transaction value, the award is based on a range of criteria including the institution's background, its positive influence on the development of the local debt capital market, the most significant transactions and their relevance to the market and its development.

This year’s award honors BSC as a market-maker that promotes the sustainable development of the corporate bond market as well as the debt capital market. In the 2014-2015 period, BSC book-ran and successfully arranged more than USD1 billion of corporate bonds for leading economic conglomerates, state-owned enterprises and leading industry companies in Vietnam.

One of the most active and responsible members in the government bond

bsc snags finance asia award

an nam

market from its inception, BSC was awarded a certificate of merit by the Ministry of Finance to recognize its contributions to the developing bond market. In 2014 and the first quarter of 2015, BSC was the leading company in Vietnam by share of brokerage and government bond tender.

This is the second year running that BSC has been recognized by a leading prestigious financial magazine in the region as last year BSC was awarded with Vietnam’s Best Investment Bank 2014 by

Finance Asia, the region’s most authoritative source of financial news and analysis, was founded in 1996 to cover investment banking, capital markets and strategic corporate finance in Asia Pacific. Haymarket Media, a privately held publisher in the UK, acquired Finance Asia in 2005. Finance Asia is now a publication of Haymarket Financial Media.

Mr. Pham Xuan Anh, Head of Investment Banking, BSC, received the award

Alpha South East Asia magazine.

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BIDV continues to support fishermen to build steel ships for offshore fishing through the largest-scale credit agreements for shipbuilding to date.

BIDV Phu Tai Branch in Binh Dinh Province has signed seven credit contracts worth VND107 billion

(USD4.8 million) with fishermen in the Phu My, Phu Cat and Hoai Nhon districts of the province.

These contracts have already proved successful, with an existing contract between a BIDV branch in Binh Dinh Province and fishermen from this province currently being in the completion process. The steel ship constructed is due to make its maiden voyage this September.

BIDV’s credit contracts are consistent with the government’s Decree 67 regarding policies to boost the development of the fisheries industry, including supporting fishermen to build high-capacity, ironclad ships designed for offshore fishing.

As part of the process, BIDV works with fishermen to find shipbuilders capable of working to a high standard. Furthermore, when the ships are completed and put into operation, BIDV supports fishermen to develop and sustain production, by connecting them with processing companies to ensure stable revenue for the future.

Besides these shipbuilding contracts, BIDV also provides working capital loans for fishermen so they are able to maintain their regular business.

In Binh Dinh Province seventy six shipowners were approved for ship loans. This is a quarter of the total number of shipowners in the province. So far, new loan contracts have been agreed that have raised the total number of customers receiving BIDV’s loans under Decree 67 to eleven, accounting for fifteen percent of the total number of shipowners in Binh Dinh. Binh Dinh is now the leading province in supplying shipbuilding loans under Decree 67.

BIDV is also implementing five

commercial credit packages to support development of the fisheries infrastructure. These aim to enhance production, processing and consumption capability; create an efficient value chain; and support the formation of modern high capacity fleets for offshore fishing. Overall, it is expected that this will contribute to the development of the national economy.

In July, BIDV launched a USD46-million credit package – the largest credit package ever for shipbuilding. The package is effective from July 1, 2015 until December 31, 2016 with a maximum loan per customer of VND500 million (USD23,000).

breaking new ground

Quang nguyen

On August 27, 2015, the first steel ship financed by BIDV under the Government Decree 67 was completed and handed over to fishermen in Binh Dinh, making it the first steel ship to be launched under the Decree 67 in the whole country in general and in Binh Dinh province in particular. The next two steel ships will be launched in September, 2015.

The first steel ship financed by BIDV under the Government Decree 67 was launched in August 2015

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august 201543

Existing customers renewing BIDV credit

cards and new credit card customers will be eligible for promotional gifts between August 12 and November 11, 2015. Customers opening new BIDV MasterCard Platinum cards will receive VND500,000 (USD23) for each purchase of VND500,000 or more, with a maximum of VND2,000,000 (USD92) per cardholder. Customers opening new BIDV Precious cards will receive VND200,000 (USD9.2) for each purchase of VND200,000 or more, with a maximum of VND600,000 (USD28) per cardholder.

Customers opening new BIDV Flexi cards will be entitled to first-year annual fee waiver. Customer group opening cards and making purchases of VND200,000 or more will be entitled to the following: groups of three to five customers - VND100,000 (USD4.6) per cardholder; groups of six to ten customers - VND200,000 per cardholder, groups of eleven or more customers - VND300,000 (USD13.8) per cardholder.

Customers renewing BIDV Flexi, BIDV Precious and BIDV MasterCard Platinum credit cards will be entitled to first year annual fee waiver.

rewarding customers new and old

ngan duc

Celebrating the 20th anniversary of transforming into a commercial bank, BIDV launched

a deposit promotion program entitled Full of Luck 2015 for all customers making deposits at BIDV. The program is valid from August 10, 2015 until November 7, 2015.

Over 116,000 prizes worth up to VND15 billion (USD690,000) are being offered. Customers making deposits of at least VND15 million (USD690) will receive a lucky-draw number and have four chances to win prizes. These include weekly prizes; program closing prizes; instant gifts at the time of depositing at the bank; and appreciation gifts.

With three or more numbers, BIDV customers will be entitled to lucky gifts called Faith, Joy, Luck, Happiness, Fortune, Family gathering, Satisfaction and Gratitude in cash from VND20,000 up to VND1 million (USD46).

Every week, customers depositing VND300 million (USD13,800) or more will be entitled to weekly electronic

a plethora of prizes lucky draws where they will have the chance to win up to five 64Gb iPhone 6 worth VND20 million (USD920) each during the eight weeks of the promotion program.

At the program closing, BIDV will hold lucky-draws. Customers will have the chance to win one first prize of a Hyundai Accent Blue car 2015 or a BIDV savings book worth VND600,000,000 (USD27,600); five second prizes of special version Piaggio Vespa Sprint 3V i.e motorbikes or a BIDV savings book worth VND80 million (nearly USD3,700); ten Led LG55 UF850T UHD 55-inch TV or a BIDV savings book worth VND40 million (USD1,850) and thousands of other attractive prizes.

At the end of the program, 1,500 lucky customers with the highest amount of deposits with term of thirteen months or more will be entitled to VND1 million from BIDV as an appreciation gift.

Contact BIDV’s nearest branch or call the 24/7 hotline: 19009247 for more information.

Products & services

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Q I have registered for a BIDV Visa Platinum. Does BIDV currently

offer any promotions for holders of this card?

Presently, Visa Platinum cardholders can benefit from the promotion ‘BIDV Visa Platinum - goes above and beyond’ launched on June 24, 2015 and effective until September 21, 2015. The promotion offers many incentives for new cardholders, for example those making transactions with a minimum value of USD50 during the promotion time can receive cashback worth 100 percent of the value of the

Q I’m aware of BIDV MetLife’s program ‘Educare – give wings

to your child’s dreams’. Can you tell me about it?

BIDV MetLife is holding a series of customer seminars on a range of topics relating to the optimal development of children. The first seminar entitled The Power of Play was held in August, the second How to Teach Children in Modern Life will be held in both Hanoi and Ho Chi Minh City on September 12 and 19, respectively. The third seminar entitled Help Children Turn their Dreams into Reality will take place on October 17 and 24 in the two cities respectively. BIDV MetLife and Educare Club’s Partners will be giving away many free gifts at these events. For more details, please contact BIDV MetLife through www.bidvmetlife.com.vn or their hotline (04)62820606.

first transaction, up to VND2,000,000 (USD92). Alternatively, customers can choose to receive reward miles for Vietnam Airlines, with the amount dependent on their GLP class.

In addition, all BIDV Visa Platinum cardholders making a valid payment transaction of USD50 or more will receive a code to join a lucky draw with the chance to win a Ha Long Bay seaplane tour and L'Azalee yacht for two worth VND19.8 million (USD912). Further information can be sought at local branches.

Q BIDV has updated its internet and mobile

banking services. What new functions are being offered?

BIDV internet and mobile banking has recently been updated with more automatic functions to meet customers’ increasing demands. These include allowing the withdrawal of online savings for online savings accounts; twenty four hour interbank cash transfers; automatic saving and display of beneficiaries details; and periodic payment orders for bills.

Hello, it’s biDV 19009247

lifestyle

august 201545

Pham Quang Huy, who writes under the pen name Han Si Huy, was an in-house lawyer for BIDV for eight years. Now working at Ngan Luc Investment and Development Joint Stock Company, he spoke to Minh Minh about his collection of 2000 old books

Please tell us a bit about why you like collecting old books.

My initial interest in books came from my parents. They taught my older sister and I to love books and treat them with respect. My family was poor, so I usually shared books with my sister.

Growing up, old books became my passion. Sometimes I find items hidden amongst the pages of an old book, such as a 1970s postcard from the original owners.

For the love of books

minh minh

Furthermore, I'm a practicing lawyer and an independent researcher of law. Therefore reading widely is a necessity for me and fortunately I enjoy reading a lot. I read a wide range of genres as well as law books.

In 2006 I was recieved an award from Thanh Nien News magazine. With the prize money I purchased a lot of old books published before 1975 in Saigon.

You own a vast book collection. Which books are your favourites?

Currently I own around 2000 books. Among them, the oldest book is E. Vayrac‘s Su ky Thanh Hoa (Perfume of History) translated by Nguyen Van Vinh and published by the Library of Tonkin Governor in 1936. Another of my favourites is Ngay Moi (New Day), a novel written by Thach Lam and published by Doi nay (This Life) publishing house in 1939.

As well as these I have a complete set of books from law schools existing in Saigon before 1975 written by such scholars as Vu Van Mau, Le Dinh Chan and Nguyen Manh Bach.

I derive great pleasure from the charm and historical interest of collecting old books. Amongst my collection I have books with the signatures of numerous famous authors, with Ho Huu Tuong, Chu Lai, Dong Si Nguyen, Nguyen Dinh Dau and Nguyen Thi Binh amongst them.

How do you share your love of books?

I believe we all have a duty within our communities. Although I was born in Hanoi, in 2014 fellow book lover Nguyen Quang Thach and I set up the Library of Pham in my hometown Nhat Quang commune in Hung Yen province. The website www.hophamvietnam.org gives more details about this venture.

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As part of BIDV’s twentieth anniversary of transforming into a commercial bank and

integrating into the financial market, a golf tournament was held on the Dunes Course, Danang Golf Club.

This tournament was a chance for the bank to establish and maintain cooperative relationships with valuable partners. Sixty golfers participated in the BIDV Golf Tournament 2015 including BIDV employees, partners, customers and close friends.

The Dunes Course is situated on the

Fairwaycelebrations

fledgling central coast of Vietnam amid 150 hectares of dunes similar to those the world’s first golf courses were carved from.

Australian golf legend and former world No. 1 Greg Norman cites this course as one of his favorite golf courses to play on- “A must for every golfer”.

It lies in close proximity to two of Vietnam’s most historic destinations - UNESCO World Heritage sites Hoi An and Hue - and offers breathtaking views of the Marble Mountains, East Sea and Cham Islands.

The beauty of Dunes Course – Danang Golf Club bathed in August sunshine

Mr. Lai Tien Quan, BIDV director, Thanh Xuan Branch won the prize for ‘hole-in-one’ -a ball

hit from a tee shot that finishes in the cup. The prize was VND100 million (USD4,500)

from BIDV Insurance Corporation (BIC) and a special gift from the Dunes Course, Danang

Golf Club

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august 201547

A great golf strike

Mr. Tran Du Lich, economic expert and experienced and passionate golfer won the first runner up prize

Golfers donned the beautiful green uniform of the tournament and arrived early at the Dunes Course. There was a spirit of enthusiasm for meeting other golfers, exchanging golf techniques and sharing a mutual passion for the sport

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The heaven of Vietnam

kim dung

Investment is pouring into Phu Quoc, an island that is rapidly gaining a reputation as an idyllic travel destination and that is set to become one of Vietnam’s Special Economic Zones P

hu Quoc is the largest island in Vietnam. It is located off the western coast of Vietnam off

mainland Kien Giang Province and on the Vietnam-Cambodia-Thailand marine economic belt, at the centre of Southeast Asia. The 589.23 sq.km island has a population of over 100,000.

Phu Quoc holds many advantages in terms of transportation, being only 45km from the mainland and just a two hour flight from all the Southeast Asian capital cities.

Besides its geographical location, Phu Quoc possesses many other assets, including rich natural resources, good infrastructure and strong government support with high investment incentives.

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Large-scale projects currently in operation on Phu Quoc include the Phu Quoc international airport. Completed projects include the trans-island road, Ha Tien - Phu Quoc 110KV high voltage underground cable, An Thoi Seaport, Vinpearl Resort Phu Quoc and Duong Dong water plant, which has a capacity of 10,000 m3/day. Infrastructure continues to improve as further roads are laid down and connected to each other.

Phu Quoc is currently receiving a great deal of attention and support from the government. In 2015 it was recognised as a grade two city. The government has just reviewed a major plan to establish a special economic zone on the island, assigning the Ministry of Planning and Investment to present it to the Politburo.

At the end of 2013, Decision 80 was put in place by the Prime Minister relating to the development of Phu Quoc. As a result, the island now boasts a seaport, airport and clean water supply facilities, access to the national power grid, and a high quality north-south road.

So far, 164 projects worth a combined USD7.7 billion have been approved on Phu Quoc. Twenty three of them are already operating, with registered capital totaling USD1.18 billion. A further fourteen worth USD522 million are currently under construction.

It is hoped that in becoming a special economic zone, Phu Quoc will attract more investors and in turn see a growth in tourism.

Phu Quoc branch opens doors

At the end of July, BIDV Phu Quoc Branch,

located at 133 Nguyen Trung Truc, Street 4, Duong Dong Town, officially began operating.

BIDV Phu Quoc initially began as Phu Quoc transaction office under BIDV Kien Giang Branch. During the first phase, the branch employed forty staff and its departments operated as a first-grade branch of BIDV. BIDV Phu Quoc was constructed with the functions of a modern bank, with the aim of providing products that meet all the needs of its customers including loans, guarantees, payments, treasury, trade finance and modern banking services such as payment cards, POS and internet banking.

Kien Giang is located in the key economic regions of the Mekong Delta and plans are in place for Phu Quoc to become a special economic zone in the near future. It is expected to receive increased investments from the government and economic organisations.

At the opening ceremony, BIDV Phu Quoc signed a credit agreement to finance the Milton PQ hotel project, with a total value of USD27.6 million.

The opening of BIDV Phu Quoc brings the total number of branches of BIDV in Kien Giang province to four.

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Heavy rains and flash flooding in Quang

Ninh Province during late July caused severe damage across the region, with the coal industry suffering the greatest destruction. Many coal mines and coal storage areas were flooded, resulting in production being suspended. The coal industry was reported to suffer an estimated loss of USD55.3 million.

BIDV provided a one-off donation of USD230,000 to the coal industry to support efforts to overcome the consequences of the floods and stabilise the exploitation and production of coal.

Earlier, BIDV also gave emergency assistance amounting to nearly USD23,000 to affected families in Quang Ninh province.

disaster relief for myanmar

Heavy rain during mid-July took its toll on the people and properties across most of

Myanmar, with thirteen out of fourteen administrative units, particularly in the western region of the country, suffering damage.

Many roads, bridges, railroads, farms and other infrastructure were destroyed and many areas were left isolated. The death toll reached forty two, with a further four people missing, and 150,000 evacuated. In all, the lives of 260,000 people were heavily affected in the flood-hit areas. Myanmar's president toured the country and declared a state of emergency in four regions and states including Chin, Magway, Sagaing and Rakhine, all in the western areas. The president instructed the country’s ministries and agencies to take immediate action to address the

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problems resulting from the floods and distribute food to affected people.

BIDV donated USD50,000 in cash to support the people of Myanmar in coping with the consequences of the floods.

On August 5 the BIDV representative office in Myanmar in collaboration with the Embassy of Vietnam donated 1,000 gifts worth USD20,000 including food, drinking water and medicine to the Myanmar Ministry of Social Welfare, Relief and Resettlement in a relief effort for the families of victims in the hardest-hit areas.

The second donation was made on August 6 when BIDV handed over USD30,000 to the Embassy of Myanmar in Vietnam, Hanoi, in the presence of the Governor of the Central Bank of Myanmar who was on a working visit to Vietnam and BIDV.

Mr. Le Dao Nguyen, member of BIDV's Board of Directors presents a USD50,000 donation to flood-hit Myanmar people through a representative of Myanmar Embassy in Vietnam