annual report

Transcription

annual report

annual
report
2012
FIRE PROVES GOLD
ADVERSITY PROVES MEN
04. MESSAGE FROM THE CHAIRMAN
06. 10 SIGNIFICANT EVENTS IN 2012
12.
16.
18.
BUSINESS GOALS & DEVELOPMENT
STRATEGY FOR 2010 - 2015
22. ORGANIZATIONAL STRUCTURE IN
ESTABLISHMENT & DEVELOPMENT
PROCESS
VISION, STRATEGY, CORE VALUES
THE PERIOD OF 2010 - 2015
24. MEMBERS OF THE BOARD OF
DIRECTORS & SUPERVISORY BOARD
30. MEMBERS OF THE BOARD OF
MANAGEMENT
‘s ANNUAL REPORT 2012
CONTENT
36. REPORT OF THE BOARD OF
MANAGEMENT
48. REPORT OF THE BOARD OF
DIRECTORS
64. HUMAN RESOURCES POLICIES
68. MB & THE COMMUNITY
70. BRANCH NETWORK
52. CORPORATE GOVERNANCE
74.SUBSIDIARIES
58. ACHIEVEMENTS & AWARDS
80. FINANCIAL REPORT
62. HUMAN RESOURCES STATISTICS
MESSAGE FROM THE CHAIRMAN
OF THE BOARD
Dear shareholders,
T
he year 2012 was possibly the most challenging time
both for Vietnam and the world since the adoption of
“Doi Moi” by our Party and the Government. Under the
strong leadership of the Party and rigorous oversight by
the Government, Vietnam’s economy has recorded encouraging
improvements: the economy continued to grow at 5.03% while
inflation was effectively curbed (down from 18. 1% in 2011 to
6.8% in 2012). Interest rates were lowered (from 14% to 8%), the
value of Vietnam’s currency was strengthened, foreign exchange
reserves increased and social welfare was improved. The hunger
eradication and poverty reduction also got notable results, with
the poverty rate being about 10% nationwide, down 1.76%
compared to 2011; national security as well as sovereignty were
maintained. However, a tight monetary policy (or the tightening
policy) and slash public investment must be implemented, in
order to achieve the goals of curbing inflation and stabilizing
the macro-economy. Last year, we witnessed a decline in total
demands, as well as investment cuts and bankruptcy of a great
number of enterprises. Many businesses, after several years of
successfully creating their brands also got desperate. The realestate market was freezing and the stock market was sluggish.
The banking sector underwent an extremely tough and possibly
fierce health check, rising non-performing loans coupled with
low credit growth dented banking profits. Restructuring process
of the banking system only showed initial results.
In this context, with the motto “reasonable growth,
restructuring, and efficiency”, and the determination to stay side
by side with clients and partners, MB has constantly made best
efforts to realize our commitments to shareholders and investors
and basically fulfilled targets set by the general meeting of
shareholders. Business results in 2012 again showed that MB is
a bank of sound and sustainable development. I am delighted to
share with you that although we have not yet achieved the set
plan, for the first time we was a real leader in the sector in terms
of our pre-tax profit, reaching VND 3,090 billion. Total loans grew
by over 26%, nearly three times faster than the industry average;
total deposits stood at VND 152,358 billion, up 26% against the
beginning of the year and non-performing loans was maintained
4
Business results in 2012 again showed that MB
is a bank of sound and sustainable development.
at 1.84%. MB has also increased the bank’s charter capital to
VND 10,000 billion, facilitating to improve product and service
availability, enhance infrastructure capabilities and invest in
modern technologies while make sure that financial indicators are
well-managed in compliance with stipulations by state regulators
and international practices. Branches and transaction offices were
expanded to 182 facilities, including two international branches in
Laos and Cambodia that are efficiently working (MB PhnomPenh
has become profitable after 6 months of operation). After 1 year
of listing, MBB stock has been stable, liquid and preferred by
investors.
The bank achieved a solid financial performance thanks to having
a dynamic, united, creative workforce to be eager to overcome
challenges. With MB’s 5-year development strategy (2010-2015)
in mind, the Board of Directors, the Board of Management along
with the staff have set practical plans to improve performance
with the priority given to the organizational structure and risk
management to ensure the smooth and safe operation of the
system. In 2012, MB took initiative developing more products
and services, providing greater convenience to customers,
innovating technology and building MB as a brand of community.
At the same time, the bank has been aware of maintaining and
enhancing efficiency and transparency in management, towards
the application of international best practices in management,
ensuring the legitimate rights and equality among shareholders.
At MB, we are proud to have a competent and consistent
leadership team, united staff, a strong shareholder structure and
no group benefit.
The year 2013 is expected to be a difficult year for the economy
with many challenges ahead. The Board of Directors and the
Management of the bank, together with all MB employees
determine not to shrink from new challenges and not to be
complacent about our achievements, either.
MB will continue to foster restructuring banking activities,
investments and subsidiaries, consolidating the group’s business
model, maintaining the emphasis of “restructuring, sustainable
development” in 2013. MB’s vision is to be among the top 3 jointstock commercial banks in terms of total assets, market share and
earnings in 2015.
During the last 18 years, MB has been striving to become a
devoted, friendly, reliable companion of clients, partners and
shareholders. With the existing advantages at the core, MB aims
to forge sustainable development and brings greater added value
to clients, partners, investors. Your trust and support are strong
motivator for MB to move forward and realize our plan for 2013.
The Board of Directors, the Board of Management are committed
that MB will continue to be a powerful, dedicated financial backer
for all clients, a provider of profitable and stable investments
for our shareholders and will be one of the pioneering financial
institutions that proactively contribute to the realization of
monetary policies set out by the Government and the State Bank.
On behalf of the MB Board of Directors, the Supervisory Board, the
Board of Management, I would like to extend our sincere thanks to
the government agencies, shareholders, clients and partners who
have always supported us over the years. And we look forward to
your continued support and companionship in the coming years.
mr. Le Huu duc
Chairman of the Board of Directors
5
Significant events in 2012
01
Successfully moving the Head Office
From No. 3 Lieu Giai, Hanoi to No.21 Cat Linh, Dong Da, Ha Noi. The New Head Office building is spacious,
modern, covering an area of 2,500 square meters with 18 floors and 3 basements, providing working
space for over 1,000 employees in the Head Office and the Operation Center.
6
02
Continuing to be in Vietnam’s top five largest commercial banks:
Despite the bad shape of the whole economy and the banking sector in 2012, MB successfully
completed our plans,with total mobilized capital rising by 26% compared to the industry’s average
growth of 18.6%, achieving credit growth of 26% against the industry-level of 7%. MB was also a
leader in commercial banking sector in terms of ROE with total assets exceeding VND 175,000 billion,
the charter capital reaching VND 10,000 billion, profit standing at VND 3.090 billion.
03
Restructuring, strengthening overall capabilities of 5 subsidiaries
04
Successfully implementating of major business projects:
VND 10,000 billion export incentives; VND 2,000 billion low-interest loans for SMEs; 4 capital
mobilization programs intended for individual clients, …These programs both ensured mobilization
& credit targets and helped expand the customer base.
7
significant events in 2012
05
Doubling the number of new products compared to 2011:
These hi-tech products are appealing to MB’s target clients and consolidate
our positioning as a “customer convenient bank” . Many MB products and
services namely, mobile remittance (MB Mobile Money), BankPlus USSD, …
are true pioneers in the market.
06
MB Phnompenh - Cambodia reaping profits after 6 months of operation:
This is the second MB overseas branch operating in 2012. New products and
services such as MB online banking (eMB), SMS banking were also experimented here, contributing to foster brand awareness in the Cambodian
market.
07
Successful development of Basel 2 – based “operational risk appetite”
framework:
In 2012, with Deloitte’s consultations, MB has completed Phase 1 to build
risk management framework in pursuant to Basel 2 as scheduled. MB is one
of the first banks in Vietnam to have successfully documented a complete
guideline for managing operational risk.
8
08
Successfully switching to a new organizational model embracing the
2010 – 2015 development strategy
09
Operating our internal information portal - MB Portal:
This is an important information portal that enhances internal communications and serves as a digital office facilitating internal interactions towards a modern management model of convenience and efficiency.
10
37 prizes granted to MB and our employees:
Including the Certificate of Merit from the Prime Minister for the CEO and
the Recognition Flags for being “Leader of the emulation movement” from
the Government, State Bank and Hanoi People’s Committee.
9
10
GENERAL INFORMATION:
Establishment & Development Process
Vision, Strategy, Core Values
Business Goals & Development Strategy for 2010 – 2015
Organizational Structure during 2010 - 2015
Members of the BODs & Supervisory Board
Members of the Board of Management
11
Establishment AND
Development Process
With the idea of developing a corporate financial institution and a millitary enterprise to a
Commercial Joint Stock Bank, after an active preparation period of 18 months, on 04 November
1994, MB BANK started its official operation with head office at 28 Dien Bien Phu, Hanoi, with a
charter capital of VND 20 billion and 25 employees.
2012
MB successfully shifted its organizational model following the Development
Strategy for 2010-2015 and finished moving the Head Office from No. 3 Lieu Giai
Street to No. 21 Cat Linh Street, Hanoi. With pre-tax profit of VND 3,090 billion, MB
was a leader in commercial banking sector (excluding banks with a dominant stake
held by the State) in terms of ROE and secured its strong position among the top 5
largest commercial banks in Vietnam. In particular, regarding operation scale, MB is
also enjoying an industry-leading position in Vietnam considering indicators from
labor productivity, return on equity to capital mobilization growth, credit growth,
profit, etc…
MB achieved this enormous success thanks to its target of among the Vietnam’s
Top 3 leading commercial banks in all fields towards 2015 and the strategic vision
to become the “Customer Convenient Bank”. Its motto for growth “Fast, Different, Sustainable, Efficient”, along with the consistent implementation of flexible
business solutions responsive to market volatility, became the guideline for all MB’s
activities.
12
1994
With the initial charter capital of VND 20 billion, MB was established for the purpose of
financing military enterprises.
2000
MB developed strongly beyond the scope of a bank and step by step, became a group
starting with the establishment of 2 member entities which are Thang Long Securities
Co., Ltd, currently known as Thang Long Securities Joint Stock Company (TLS) and
MB Assets Management Company (AMC) to diversify its range of services towards a
multitask and modern financial institution.
2003
After 7 years of effective operation (1994 - 2002), MB decided to reorganize itself to
develop in a faster, stronger and more sustainable manner under the MB reorganization
project. Accordingly, MB worked with a foreign consulting company to develop the
2004-2008 strategy with a vision towards 2015.
2004
MB became the first commercial joint stock bank to offer its shares via public bidding
with total par value of VND20 billion.
2005
MB entered into a three-party agreement with Vietcombank and Viettel Group with
respect to payment of telecommunication fees for Viettel and a cooperative agreement
with Citibank. This strategic cooperation helps MB access to a wider range of customers
and and deliver faster services.
2006
MB continued its business expansion with the establishment of Hanoi Fund Management
Company (HFM), which is currently MB Fund Management Stock Company (MB Capital).
MB successfully implemented the project of information and technology modernisation
Core Banking T24 of Temenos Group (Switzerland).
2008
2009
2010
2011
MB started the process of organizational restructuring, improving and implementing the
personnel strategy under the organizational model of the period 2008-2012. Viettel Group
became a strategic shareholder and MB increased its share capital to VND3,400 billion. MB
was the first commercial bank to complete and apply the internal credit rating system.
MB completed the increase of its chartered capital to VND5,300 billion. MB was awarded
Labor Medal Grade 3, and the ISO 9001:2008 Certificate from Bureau Veritas Certification
(UK). The 247 Customer Center was launched.
Mr. Le Cong was appointed as the new CEO. He signed and implemented the project on
consultation and development of 2011-2015 strategies with visions towards 2020 with
McKinsey. The first branch located in a foreign country was launched in Laos. MB was
assessed and rated E+ by Moody’s, a worldwide credit rating organization. MB achieved
initial successes in the implementation of the development strategy in the Southern
region and invested in construction of the database center and the provision center with
the total investment capital of USD10 million.
Is a year of milestones of MB. During the year, MB successfully appointed the new
Chairman and transferred its administration and military function to be under the
Ministry of National Defence and its Party Committee to be directly under the Central
Military Commission. Additionally, MB’s shares have been successfully listed on Ho Chi
Minh City Stock Exchange – HSX since 1 November 2011. In 2011, another success of MB
is launching launching its second international branch in PhnomPenh – Combodia after
a fruitful year of its first international branch in Laos. MB implemented its strategic
model for 2011-2015, as well as its business model and deployed strategies for the
Southern region, the Central region and the Central Highland. After reforming Thang
Long Securities Joint Stock Company, MB sucessfully upgraded Core T25 from R5 to R10.
13
ESTABLISHMENT AND
DEVELOPMENT PROCESS
TOTAL ASSETS
175 610
138 831
109 623
69 008
44 346
2008
2009
2010
2011
2012
Total assets (VND billion)
capital mobilising
117 747
89 581
65 741
39 978
27 163
2008
2009
2010
2011
2012
Deposits of economic organizations & individuals (VND billion)
14
TOTal outstanding loans
74 479
59 045
48 797
29 588
15 740
2008
2009
2010
2011
2012
Total outstanding ( VND billion )
Profit before tax
3090
2625
2288
1505
861
2008
2009
2010
2011
2012
Profit before tax ( VND billion)
15
Vision - Strategy
To become The Customer Convenient Bank.
Core values
MB’s values are not only evident in its assets but also
in the spiritual values that every MB staff appreciates
and collaborates, which includes:
Trustworthy
Teamwork
across the Bank
Customer Care
16
Motto for growth
Fast
Creative
Different
Sustainable
Professional
Efficient
Performance
- driven
17
Business goals
and development
strategy for
2010 - 2015
18
OVERVIEW OF BUSINESS ENVIRONMENT
and MB’S POSITION
2012 Business environment overview
I
n 2012, the World economy faced
3 major challenges, namely the
sovereign debt crisis in the European
countries, the U.S. economy with
quantitative easing programs (QEs) and
“fiscal cliff”, and the slowdown in Asian
economies.
Although
governments
implemented serious measures to
promote economic recovery and growth,
there were little signs of recovery in 2012:
U.S. growth remained low with 2.2%;
Eurozone countries and Japan posted
negative growth respectively by -0.9%
and -0.4%; China’s economy grew by
7.8% at its slowest pace in the past 13
years.
Thanks to an array of flexible solutions
by State management bodies, Vietnam’s
economy in 2012 showed some positive
signs where inflation was curbed at 6.81%,
interest rates were lowered, the banking
sector was rescued from a liquidity crisis;
exchange rates and the trade balance
were relatively stable, foreign exchange
reserves rose and the sovereign debt
was under control. However, Vietnam’s
economy in 2012 only grew by 5.03% with
many challenges remaining unsolved: the
frozen real estate market kept placing
more pressures on the economy; excess
inventory along with capital shortages
and unfavorable market conditions put a
great number of enterprises at risk, even
declaring bankruptcy.
Vietnam’s banking sector experienced
a turbulent year with non-performing
loans on the rise, 8 out of 9 the vulnerable
banks being approved to be restructured
by the State Bank, resulting changes in
personnel across their administration and
executive board. 2012 saw a lot of banking
frauds and violations undermining the
industry’s reputation. On the other hand,
restructuring programs across the sector
was gradually put in place and produced
certain results; liquidity was improved
and bad debt was quantified in a clearer
fashion providing a basis to introduce
appropriate and effective measures;
banks with restructuring programs got
some of their plans approved.
This can be seen clearly through a number
of MB’s performance indicators in 2012.
Total assets increased by nearly 30%
compared to 2.54% growth of the whole
industry, ranking the second largest bank
in terms of total assets and becoming an
industry leader regarding loans balance
and capital mobilization among Hanoibased commercial banks. With effective
business operations, MB managed
to generate more profits than direct
competitors and ranked the fifth in the
banking sector while its non-performing
loans were kept below 2%. Strategic
programs were implemented in a allround
manner as scheduled to strengthen our
core competencies and competitive
advantages over competitors in all client
segments.
In 2012, MB was also honorably granted
the Recognition Flags from Government,
State Bank and Hanoi’s People Committe
as well as over 30 domestic and foreign
pretigious wards.
MB’s current position
W
ith the goal of becoming one
of the top 3 Vietnam banks in
2015 & positioning ourselves
as a ‘‘customer convenient
bank’’, MB is making the best efforts and
demonstrating our ability to achieve the
planned goals.
MB had a successful year fulfilling most
of the targets, especially ensuring a
stable development with non-performing
loans under control and no related group
benefits. The bank successfully addressed
liquidity problems and at the same time
took advantage of opportunities to rise
ahead of our peers. With the achievements
in 2012, it is safe to say that MB is one of
the best commercial banks in Vietnam.
19
MB’s strategic goals
period
2010 - 2015
Target of growth for the period 2010 - 2015
Top 3 Commercial joint stock banks in Viet Nam
Annual Growth rate 1.5 – 2 times higher than domestic banking industry’s
average growth rate
20
Vision for the period 2010-2015
To become The Customer Convenient Bank with three pillars,
namely The Community Bank, The Professional Commercial Bank
and The Transaction Bank and two platforms:
Risk leader
Fast execution and delivery culture
The Customer Convenient
The Community
Bank
The Professional
Commercial Bank
The Transaction
Bank
Risk leader
Fast execution AND delivery culture
21
ORGANIZATIONAL STRUCTURE
IN THE PERIOD OF 2010-2015
INTERNAL AUDIT OFFICE
SUPERVISORY BOARD
HIGH-LEVEL COMMITTEES:
1. HR COMMITTEE
2. RISK MANAGEMENT COMMITTEE
3. CREDIT COMMITTEE
INTERNAL INSPECTION AND
CONTROL DIVISION
FINANCE AND ACCOUNTING
DIVISION
RISK MANAGEMENT DIVISION
APPRAISAL DIVISION
POLITICAL DEPARTMENT
LARGE CUSTOMERS
DIVISION
SMES DIVISION
INDIVIDUAL
CUSTOMERS DIVISION
DEVELOPMENT OF MB’S BRANCH NETWORK
22
BOARD OF DIRECTORS OFFICE
BOARD OF DIRECTORS
CEO
ALCO
HR DIVISION
CEO OFFICE
STRATEGY DEPLOYMENT DIVISION
INVESTMENT BOARD
FUNDAMENTAL CONSTRUCTION BOARD
TREASURY DIVISION
NETWORK &
DISTRIBUTION DIVISION
OPERATION
DIVISION
IT DIVISION
BRANCHES
2008
2009
2010
2011
2012
90
103
140
176
182
Transactions
Transactions
Transactions
Transactions
Transactions
Branches &
Branches &
Branches &
Branches &
Branches &
23
Members of
the board of
directors
Mr. Le Huu Duc
Chairman of the Board
of directors
Mr. Le Van Be
Mr. Nguyen Manh Hung
1st Vice Chairman
of the Board
of directors
Vice Chairman of the Board
of directors
Mr. Ha Tien Dung
Mr. Dau Quang Lanh
Mr. Nguyen Dang Nghiem
Ms. Tran Thi Kim Thanh
Member of Board
of directors
Member of Board
of directors
Member of Board
of directors
Member of Board
of directors
24
Mr. Le Huu Duc
Ông Lê Hữu Đức
Chairman
Mr. Le Van Be
ÔngChairman
Lê Văn Bé
First Vice
Ông Nguyễn Mạnh Hùng
Vice Chairman
Senior Lieutenant-General Le Huu Duc
was granted a Ph.D degree from Vietnam
Academy of Defence. He has held key
positions at the Air Force and Air Defence
for 20 years. Senior Lieutenant-General
Le Huu Duc became MB Chairman since
April, 2011. In the new position, he has a
considerable influence on MB’s strategies
and governance.
Senior Lieutenant-General Le Huu Duc is
currently a member of the 11th Central
Committee of the Communist Party,
member of the Central Military Commission,
13th National Assembly Deputy; member of
the National Assembly’s Finance - Budget
Committee, Deputy Minister of National
Defence.
Mr. Le Van Be used to hold several positions
of state financial management at the
Ministry of National Defence and has had
nearly 20 years’experience in the banking
sector, including over 15 years as Chief
Executive Officer of MB and many years as
First Vice Chairman. He was directly involved
in the MB’s Establishment Scheme. Playing
an important role in the implementation and
development of MB’s corporate culture, Mr.
Le Van Be is always an outstanding leader
making his significant contribution in every
step of MB’s development.
Currently, he is the First Vice Chairman of the
BOD.
Major General Nguyen Manh Hung
has a Master’s Degrees in Electronics
& Telecommunication and Business
Administration. He has spent many years
working and making major contributions to
the success and development of the Vietnam
Military Telecom Corporation (Viettel
Corporation). In 2012, he was granted Major
General in the Vietnam People’s Army. As
Vice Chairman of MB, he plays an important
role in developing IT strategies and the
Telebanking integrated services.
He is currently Deputy General Director of
Viettel Corporation.
Chủ tịch HĐQT
Phó Chủ tịch thứ nhất HĐQT
Phó Chủ tịch HĐQT
25
Members of the Board
of directors
Ông
Đậu
Quang
Lành
Mr.
Dau
Quang
Lanh
Ông
Tiến
Dũng
Mr.
HaHà
Tien
Dung
Thành viên HĐQT
Member
Thành viên HĐQT
Member
Mr. Dau Quang Lanh graduated from Ho
Chi Minh City Economics University with a
Master’s degree in economics. He has over
14 years’ experience in various financial
and corporate management positions at the
Ministry of Defence. Apart from his role as a
member of the Board, he is now Chairman
and General Director of 28 Corporation
Agtex One-member Limited Liability
Company (Ministry of Defence), and also
Chairman of subsidiaries and associates of
28 Corporation Agtex such as 28 Corporation
Agtex - Hung Phu, 28 Corporation Agtex Quang Ngai, Binh Phu Joint Stock Company,
28 Corporation Agtex - 1.
Graduating from the Air Force Officers
Institute, National Economics University,
Gagarin Air Force Academy (former Soviet
Union), Major General Ha Tien Dung has held
senior management positions at Vietnam
Air Service Corporation (currently known as
Vietnam Helicopter Corporation) for more
than 12 years.
In addition to being a member of the
Board, he is Commander of the 18th Corps,
Chairman and General Director of the
Vietnam Helicopter Corporation, Chairman
of MB Real Estate JSC (MB Land); Chairman
Hai Au Investment and Trading JSC.
26
BàTran
TrầnThi
ThịKim
KimThanh
Thanh
Ms.
Ông
Nguyễn
Đăng
Nghiêm
Mr.
Nguyen
Dang
Nghiem
Thành viên HĐQT
Member
Thành viên HĐQT
Member
Graduating from the Banking Academy,
and earned a Master’s degree in Economics
from Foreign Trade University, Ms. Tran
Thi Kim Thanh is a experienced banking
expert. Since 1995, she has held several
important management positions at
Vietnam Commercial Bank for Foreign Trade
(Vietcombank): Head of Funds Department,
Deputy Director of Vietnam Finance
Company Limited in Hong Kong.
She is currently Head of Investment
Department of Vietcombank, a member
of the BOD of Vietcombank Tower 198
Company Limited and a member of the
BOD of Vietcombank – Cardif Life Insurance
Company Limited.
Graduating from Marine Transportation
Economics, Major General Nguyen Dang
Nghiem has over 20 years’ experience in
several key positions at Saigon Military
Port. In addition to being a member of
the Board, he is now Vice Chairman and
CEO of Saigon Newport Holding Company
– Vietnam People’s Navy (Ministry of
Defence), Vice Chairman of Cat Lai Port
Corporation, Chairman of Newport - Cai
Mep Corporation, Chairman of Newport
- Cai Mep International Port Company
Limited.
27
Members of the
Supervisory Board
Ms. Pham Thi Ty
Mr. Le Cong Soa
Head of Supervisory Board
Member of Supervisory Board
Graduated from the University of –Finance and
Accounting, Ms. Pham Thi Ty formerly worked
at the Accounting Department of State Bank of
Vietnam, Vietinbank Ba Dinh Branch for about
10 years and served as the Chief Financial Officer
(CFO) of MB for 15 years. In July 2009, Ms. Pham
Thi Ty was officially appointed Head of MB’s
Supervisory Board.
Graduated from the University of Finance and
Accounting, Mr Le Cong Soa has many years
of experience in finance and banking. Before
becoming a member of the Supervisory Board,
he served as Head of Accounting and Banking
Department - Finance Bureau - Ministry of Defence
from 1998 to 2008.
28
Ms. Nguyen Thanh Binh
Mr. Nguyen Xuan Truong
Graduating from the University of Economics in
Prague, Ms. Nguyen Thanh Binh had 21 years of
experience in managing the Corporate Finance
Division. Currently, Ms. Nguyen Thanh Binh is a
member of MB’s Supervisory Board and Head of
Supervisory Board in MB Securities JSC.
Graduating from the Soviet Air Force Officers
Institute, Mr. Nguyen Xuan Truong held a
management position at a large enterprise under
the Ministry of Defence. In the 1994 – 2004 period,
he was MB’s Vice Chairman and also General
Director of the Vietnam Air Service Corporation of
Vietnam. In 2005, he was appointed a member of
MB’s Supervisory Board.
29
of Management
Mr. Le Cong
Chief Executive Officer (CEO)
Ms. Nguyen Minh Chau
Ms. Pham Thi Trung Ha
vice ceo
vice ceo
Mr. Dang Quoc Tien
Vice CEO
Mr. Hoang The Hung
Vice CEO
MS. NGUYEN THI AN BINH
MS. VU THI HAI PHUONG
MR. DO VAN HUNG
MS. CAO THUY NGA
MS. LE THI LOI
vice ceo
vice ceo
vice ceo
vice ceo
CFO
30
Mr. Le Cong
MR. DO VAN HUNG
Mr. Dang Quoc Tien
Chief Executive Officer (CEO)
Vice ceo
vice ceo
Vice CEO
CEO Le Cong is the key leading
person who has contributed for
the development of MB since
its foundation. He graduated
with a Bachelor Degree honored
by the University of Finance
and Accounting and Hanoi
University of Technology, and
is an Economics Master. He held
many such important roles as
Head of SMEs, Deputy General
Director and Chairman of Military
Insurance
Company
(MIC)
before officially appointed MB’s
CEO in January, 2010. He is an
enthusiastic and drastic leader in
executing MB’s strategy during
the period of 2010-2015.
Graduating from the National
Economics University (Faculty of
Finance and Banking) and Hanoi
University for Foreign Studies
(English Faculty), Mr. Hung has
more than 10 years of experience
in banking and finance. Joining
MB since 1999, Mr. Hung held key
positions for many years such
as Deputy Head of International
Payment Department, Head
of
International
Payment
Department and Head of HR and
Graduating with a Master degree
in Economics (Finance and
Banking), Ms Ha has 15 years of
experience working at MB. She
held several important positions
at MB including Head of Credit
Management
Department,
Deputy
Head
of
Risk
Management Division, Head of
Risk Management Division. With
great contribution to MB with
excellent accomplishments, she
was appointed Deputy General
Director in charge of he Internal
Inspection and Control Division
and Risk Management Division.
Mr. Dang Quoc Tien was born on
15th of July 1955. Before joining
MB in 1996, he was the officer
in the Department of Economics
under the Military Zone 7 Ministry of National Defence.
He has a master’s degree and
has been through reputable
training courses in leadership
development,
business
strategies, KPIs; as well as
experienced the 2011 CEO Summit
himself. With more than 13 years
at MB, he has actively contributed
to MB’s development, especially
in the Southern market.
31
of Management
On 15th November 2012,
Mr. Hoang The Hung was
appointed Vice CEO in
charge of Information
Technology under the
Decision
No.708/QDHDQT signed by MB’s
Chairman.
Mr. Hoang The Hung
Ms. Nguyen Thi An Binh
Ms. Vu Thi Hai Phuong
Vice CEO
vice ceo
vice ceo
Born on 24th October 1981, Mr.
Hoang The Hung belongs to the new
generation of young, dynamic leaders
in MB. Graduating with a Master’s
Degree in Information Technology
from the University of Nottingham –
the United Kingdom, he made notable
contributions to the development
of Viettel Telecom under Viettel
Corporation. He has been serving as
vice CEO, in charge of Information
Technology at MB since 5th of
November 2012. He is expected to
promote the development of MB’s hitech banking products in the coming
years.
Holding a Masters degree in Economics, Ms Binh has much experience in
internal control. She has been working in this area for many years and
assumed various important positions
including Deputy Head of Finance and
Accounting Department in charge of
Internal Control, Deputy Head of Internal Control Department and then Head
of Internal Audit Division. She has led
the Internal Control Division to gain
excellent achievements and awards
at MB and was granted a Certificate of
Merit by the Governor of SBV in 2009.
Ms. Binh is now in charge of Operation
Division.
Joining MB since its early establishment, Ms Phuong has contributed
excellently towards MB’s development. Graduating with a Masters
Degree, majoring in Money and Finance, from the Banking Academy,
she has held several key positions
including Head of Credit Department (Head Office), Director of MB
Ly Nam De Branch, Vice-Director
and then Director of MB Dien Bien
Phu Branch. Currently, she is in
charge of the Network and Distribution Channel Management Division.
32
vice ceo
Graduating from Paris Dauphine
Economics University (France) and
ESCP-EAP Economics Management
University with Masters Degrees,
Ms. Chau has several years holding
senior positions in fund and
foreign exchange management at
reputable banks including Hanoi
Hanil, Woori Bank, and PG Bank. She
officially joined MB in November
2009 in the capacity of Deputy
General Director in charge of the
Treasury division.
MS. CAO THUY NGA
vice ceo
With much experience in banking industry,
Ms Nga was honored with a Masters
degree from the University of Finance and
Accounting and participated in several
International Auditing courses held by the
Vietnam Auditing Company. She has 11
years of experience working in the credit
division of BIDV, 12 years serving as the Chief
Accountant cum Head of Human Resources
Department at VIDPUBLIC Bank. At MB, she
is the first person to deploy the individual
banking division and take charge of the
Administration and Quality Control Division.
At present, she is in charge of the Public
Relations Department and Subsidiaries
Management Department.
MS. LE THI LOI
CFO
As one of the first joiners to MB, Ms. Loi
has been assigned several key positions
and has many years of experience in
Accounting and Finance. She assumed
several key positions at MB Dien Bien
Phu Branch and MB including the Head
of Accounting Department and then
Vice-Director of Dien Bien Phu Branch,
Deputy General Director of MB. She is
regarded as providing the major contribution to the success of Dien Bien
Phu Branch as a leading branch in the
whole MB system. She has changed to
MB Head Office to be appointed Deputy
Finance Officer and since 2009, she was
appointed CFO.
33
34
REPORT OF THE BOARD OF MANAGEMENT
Overview
2012’s Operational Results
2013 Plans
35
Report of the
Board OF MANAGEMENT
MB’S PERFORMANCE IN 2012 AND PLANS
FOR 2013
2
012 was a challenging economic time. The world economy
was gloomy, the European sovereign debt crisis and the U.S.
economic downturn showed no signs of recovery. Global
economic growth in 2012 was only 2.3% while world trade grew
by 3.6%, a year on year decreased in the last 3 consecutive years.
Vietnam’s economy experienced a slowdown with a large number
of enterprises going bankrupt and facing shutdown, inventories
staying high, a freezing real estate market, and a decline in
aggregate demand. GDP in 2012 rose 5.03% while inflation was,
to some extent, kept under control (CPI 6.81%).
The banking sector also faced great difficulties. The State
Bank pursued tight monetary policies with interest rates for
Vietnamese Dong plummeting. Non-performing loans across the
sector increased while credit growth was slow. The restructuring
programs at commercial banks, the handling of non-performing
loans showed little progress.
36
Table of key indicators
Indicators
2011
2012
% change
138,831
175,610
126%
7,300
10,000
137%
120,954
152,358
126%
Total loans and investments (*)
60,706
76,314
126%
Total loans
59,045
74,479
126%
Non-performing loan ratio
1.59%
1.84%
116%
Pre–tax profit
2,625
3,090
118%
Total assets
Chartered capital
Total mobilized capital
(*)Includes: total loans and investments in corporate bonds, exclusive of financial institution bonds as regulated in Directive No. 674/NHNNCSTT).
Capital Mobilization
From the beginning of 2012, MB took numerous measures to
mobilize capital like setting up the Steering Committee on Capital
Mobilization, developing policies suitable to clients’ area/region/
segment, implementing various programs, namely “Happy New
Year: win big with MB savings”,” Enjoying a merry summer with
MB savings”, “MB savings, buds of gold” ...
As at December 31, 2012, MB successfully attracted VND 152,358
billion, an increase of 26% compared with 2011, approximately
1.4% higher than the average growth rate of the banking system,
equivalent to 109% of the set target.
Credit activities
In light of troubled economic times, MB decided to pursue
credit growth based on the principle of reasonable, selective,
safe, efficient growth with credit quality being the top priority;
proactively developed sales programs that met clients’ demands
and complied with SBV’s policies; deepened the relationship
between the bank and clients. Total loans and investments
(inclusive of total loans and corporate bonds) as at December 31,
2012 were VND 76,314 billion, an increase of 26% compared to
2011, equivalent to 106% of the set target.
With priority on credit quality, MB focused a lot on scrutinizing
loans and managing credit risk. The non-performing loan ratio
was 1.84% as at December 31, 2012, much lower than the average
ratio of the sector.
Service activities
In 2012, the bank promoted services by developing numerous
integrated applications like BankPlus for Vinamilk chains and
Smart Sim users, digital savings on eMB, online money transfer in
collaboration with Viettel, and selected account numbers…
Guarantee: Revenue from guarantee reached VND 21,222 billion,
up 63% compared to 2011, equivalent to 130% of the set target.
Revenue from international payments stood at USD 6,240 million,
up 5% compared to 2011, equivalent to 105% of the set target.
Revenue from overseas remittance reached USD 385 million, up
by 75% compared to 2011, equivalent to 110% of the set target.
Cards: 145,345 new cards were opened and the year-end figure
totalled 680,064 cards in issue, equivalent to 83% of the set
target. 512 new POS were installed and the final number of POS by
year-end was 1,106, equivalent to 150% of the set target. 61 new
ATMs were put into operation, and the year-end number totalled
388, equivalent to 61% of the set target.
The total net income from services stood at VND 733 billion, up
by 14% compared to 2011, accounting for 9.38% of the total
operating income.
37
Report of the
Board OF MANAGEMENT
Business strategy execution
MB has implemented development strategies for the 2010 - 2015
period as scheduled in pursuant to outlined quality and orientation,
including core business solutions, business support solutions,
solutions to stimulate execution capabilities of the organization.
At the same time, the Bank continues to improve the long-term
development strategies for Central Vietnam - Central Highlands
and Southern regions.
It has been forging ahead with the restructuring of subsidiaries,
the realignment of the organizational structure; introducing
operating regulations of associate companies. Providing a
powerful link between subsidiaries and the Bank and among
themselves towards the group model.
Breeding a competent workforce
MB’s constant focus has been on improving the quality of personnel
and appropriate staffing. The bank operated new organizational
model to facilitate business activities and operations; promoted
the application of technology in recruitment and training, human
resources management across the system. 400 training courses
were organized, including 288 professional training courses
and 122 skill training courses. The total number of MB group’s
employees as at December 31, 2012 was 5,806 , an increase of
708 employees from 2011.
38
Improving service quality
S
ervice quality has increasingly improved with high stability.
MB conducted regular quality assessment using ISO, SLA, 5S
measurements and standard transaction office ... to build a
mind-set quality management in the system; focused on refining
and systemizing banking procedures, end to end management of
procedures, risks control and speeding up transaction execution
with internal and external clients.
Upgrading technology infrastructure
T
he T24 banking system after being upgraded to the new
version (R10) begun working smoothly and saving time.
MB also deployed a number of technological projects,
namely the internal pricing software, credit rating of
individual clients, upgrading Internet Banking, Go Live information
portal to support business …
Focusing on information security, MB operated centralized
security devices at the Head Office and the user management
system for computers throughout the system.
Developing Branch Network
W
ith the aim of expanding the network in border areas
helping bolster national security, in 2012, MB opened
new branches in Lao Cai and Tay Ninh, Mong Cai. The
number of transaction offices in the whole system totalled 182
facilities, including 01 Operation Center, 01 branch in Laos, 01
branch in Cambodia, 53 branches, 118 transaction offices, 04
savings funds and 04 transaction points in 32 provinces and cities
across the country.
39
Report of the
Board OF MANAGEMENT
Profitability
W
ith the determination and unity from the Board of Directors, the Board of Management to all employees, in 2012,
MB achieved impressive business results. The bank’s pre-tax profit reached 3,090 billion VND, an increase of 18%
compared to 2011. These are outstanding efforts by MB when most of the banks experienced negative growth last
year.
Although the return on equity-ROE (Pre-tax profit/Average owner’s equity), the return on assets-ROA (Pre-tax profit/Average
total assets) in 2012 showed a decline compared to 2011, MB was a leader among its peers. ROE stood at 27.46% while the
ROA reached 1.97%. EPS (earnings per share) were 2,457 dong / share.
Indicators
Pre-tax profit/Average
owner’s equity (ROE)
Pre-tax profit/Average total
assets (ROA)
2009
2010
2011
2012
26.61%
29.02%
28.34%
27.46%
2.66%
2.56%
2.11%
1.97%
Liquidity
I
n 2012, MB achieved good levels of liquidity. Liquidity management was an inherent part of the capital management policy
and it demonstrated the solidity and stability of MB’s financial status. The liquidity indicators such as the capital adequacy
ratio, the solvency ratio, rate of granting credit from deposit mobilization, the maximum rate of short-term funds used for
long-term and mid-term loans always met the regulations of the State Bank.
Key targets (MB Bank alone)
2009
2010
2011
2012
Capital adequacy ratio (CAR)
12.00%
12.90%
9.59%
11.15%
Percentage of short-term funds
used for long-term and midterm loans
25.77%
17.62%
15.80%
10.90%
40
Statement
Báo cáo tìnhofhình
Financial
tài chính position
Chỉ số TÀI CHÍNH
NỔI BẬT 2012
41
audited consolidated figures
Total assets
175,610
VND bilion
26% compared with the figure of 2011.
Profit before tax
3,090
Total outstanding
74,479
VND bilion
Total capital mobilization
152,358
VND bilion
ROA
1.97%
VND bilion
EPS
2,457
VND/share
ROE
27.46%
42
Some of financial indicators in the last five years
Indicators
2008
2009
2010
2011
2012
44,346
69,008
109,623
138,831
175,610
Owner’s Equity (Billion dong)
4,424
6,888
8,882
9,642
12,864
Of which: Chartered capital (Billion
dong)
3,400
5,300
7,300
7,300
10,000
Deposits from institutions and individuals (Billion dong)
27,163
39,978
65,741
89,549
117,747
Total loans (Billion dong)
15,740
29,588
48,797
59,045
74,479
Net income (Billion dong)
1,421
1,838
3,519
5,222
6,603
217
815
569
-75
1,211
1,638
2,654
4,088
5,147
7,813
555
784
1,254
1,881
2,697
1,083
1,869
2,834
3,266
5,117
Provisions for credit losses
(Billion dong)
222
364
546
641
2,027
Pre-tax profit (Billion dong)
861
1,505
2,288
2,625
3,090
Profit after tax (Billion dong)
696
1,174
1,745
1,915
2,320
Net income/ owner’s equity
(ROE) (%)
21.78%
26.61%
29.02%
28.34%
27.46%
2.33%
2.66%
2.56%
2.11%
1.97%
89
102
140
176
182
Total number of employees
(the bank and associate companies)
2,435
2,999
4,079
5,098
5,806
EPS (dong/share)
3,173
2,951
2,844
2,913
2,457
Total assets (Billion dong)
Non – interest income (Billion dong)
Total operating income (Billion dong)
Total operating costs (Billion dong)
Operating profit before provisions
for credit losses (Billion dong)
Net income/Total assets (ROA) (%)
Number of transaction offices
43
Action Plan
for 2013
“restructuring, sustainable development”
M
B’s motto in 2013 is “restructuring, sustainable development”. Taking advantage of
resources available and the determination of all employees, MB expects to enjoy a
new year of success where key business targets will be reached.
44
Specific goals for 2013
Strategy:
Consistent, comprehensive, effective implementation of strategic solutions for enhancing MB competencies
and honing core competencies.
Human resources:
Improving the quality of personnel and productivity. Carrying out management succession planning.
Implementing performance and talent management.
Technology:
Investing in innovations, softwares that facilitate automation of business processes, upgrading technology
infrastructure.
Quality:
Launching projects to improve the quality of execution, internal service, quality of appraisal and risk
management, financial management, client service, constantly enhancing client satisfaction…
Politics:
Building a transparent and strong Party’s organization, and strong mass organizations and unions.
Developing corporate culture, promoting customer- driven spirit.
Some key performance indicators for The 2013 plan:
Result 2012
Plan 2013
% compare with
2012
175,610
191,800
109%
10,000
15,000
150%
152,358
167,850
110%
Total loans and investments (*)
76,314
83,900
110%
5
Total loans
74,479
83,500
112%
6
Non-performing loan ratio
1.84%
<2.5%
7
Pre–tax profit
3,090
3,523
No.
Indicators
1
Total assets
2
Chartered capital
3
Total mobilized capital
4
114%
(*)Includes: total loans and investments in corporate bonds, excluding financial institution bonds as regulated in Directive No. 674/NHNN-CSTT).
45
46
REPORT OF THE BOARD OF DIRECTORS
Notable Achievements
Outlook & Plans for Future Development
CORPORATE GOVERNANCE
Activities of the BOD & Supervisory Board
Shareholders policy
47
report
báo
cáoof
của
the
hội đồng
board
ofquản
directors
trị
NOTABLE ACHIEVEMENTS
IN 2012
In 2012, MB recorded encouraging
achievements during the implementation
of the 2010-2015 strategy. Thanks to
being committed to the motto “reasonable
growth, restructuring and efficiency”
and “strict risk management”, strategic
programs were carried out in a concerted
manner, which
assist MB in better
adapting to market changes. Thus, even in
extremely difficult times, MB sustained its
steady growth and performed as a market
leader in terms of profit growth, credit
growth, total assets and productivity...
with growth indicators being maintained
from 20 to 30% while non-performing
loans being kept below the average rate
across the sector.
Officially
operating
as
a
listed
company, MB has also been making
remarkable advances on administration
– management – supervision towards
48
applying best international practices,
ensuring compliance with applicable laws
and policies stipulated by the Government
and State Bank. In particular, MB activities
are getting more transparent and
professional in the stock market under
the constant supervision of investors
and the public. These factors have
positively contributed to the liquidity of
MB shares and addressed itself as a safe
and highly stable investment. In 2012,
MB also made an advance on dividends
of 10% to shareholders as earlier
commitments. Those great efforts by MB
in such unpredictable financial market also
spoke volumes about its strong financial
capability.
With its desire to become a group capable
of offering various financial solution
packages, MB and its subsidiaries are
increasingly connected both in terms
of product & service platforms as well
as administration. In a long term, this
connection will foster mutual synergy
among MB and those companies, which
certainly enhances MB’s competitiveness
in the market and serve as a basis for the
bank’s sustainable development.
Role of the Supervisory Board assists
the Board of Directors in monitoring any
operations, then giving timely guidelines
to improve efficiency and reduce risks.
The Board of Directors makes sure that
regulations compliance of relevant
authorities are observed and MB financial
indicators (capital adequacy ratio, nonperforming loans, credit growth) are
well-controlled according to criteria by the
State.
The Board of Directors and Supervisory
Board together issued, amended and
revised regulations on MB’s structure
and operations tomatch with its new
organizational model and the overall
strategy; worked together to adjust the
Charter in accordance with applicable laws
and being adopted by the annual General
Meeting of Shareholders; directed the
finalization of the Corporate Governance
Regulations of the listed company towards
an advanced management model; offering
maximum support to 5 subsidiaries;
oriented the completion of regulations
on human resources management, risk
management as a basis for safe and
sustainable development.
The think-tank assisting the Board of
Directors and including committees and
sub-committees actively supports the
Board of Directors in their area of expertise.
In particular, the Risk Management
Committee, and the Human Resources
Committee were officially active. The
Credit Committee is about to operate; the
Asset Liability Committee (ALCO) was
assigned to the Board of Management for
implementation.
Through periodic reports, meetings and
direct discussions with the Board of
Management and managers at all levels,
the Board of Directors has seen a clear
picture of MB operations and given timely
directions as well as orientations in line
with actual situations and in compliance
with applicable laws to secure MB’s
rights and also timely supported business
development, resolved problems and
made necessary adjustments as well as
created bonds and ensured the effective
operation of the Bank.
The Board of Management was
acknowledged by the Board of Directors.
In 2012, the Board of Management
followed up directions and orientations
from the Board of Directors and gradually
improved business and management
capacities.
Various
programs
to
accomplish strategic objectives were
strictly executed in line with the approved
schedule with adjustments necessary
to macro-economic conditions and
competition in the banking sector. The
Board of Management took the initiative
in business operations, taking advantage
of market opportunities, adhering to
State policies and presenting valuable
proposals to the Board of Directors.
2012 was also the year when the Board
of Directors forged the restructuring in
human resources and senior personnel in
both MB and subsidiaries. In addition to the
appointment of 01 more Vice CEO in charge
of IT, the Board of Directors also elected/
appointed new Boards of Directors/
Boards of Management for 5 subsidiaries
and appointed a number of key business
division Directors. All appointments were
properly conducted in line with election/
appointment
procedures,
ensuring
transparency and publicity, selection of
excellent employees, consistent with
MB’s development goals.
In parallel with robust and timely
deployment of business and management
strategies, MB focused on refining its
corporate culture and continued to
promote its inherent values. Discipline
and professionalism were strengthened
to create a common bond within the
bank, among the bank, shareholders
and partners. Network expansion in key
economic regions all over Vietnam and in
regional countries was a major priority.
These activities were instrumental in
MB’s expansion of market share and its
improvement of service availability across
the country.
Remaining steady growth in difficult
times, MB has been able to build rapport
with clients, partners, and shareholders,
strengthening its position in the
market and actively contributing to the
implementation of monetary policies by
the State Bank. This also justified great
visions and decisions by the MB’s Board
of Directors, the flexibility and synergy
among the Board of Management and
executive leaders in MB group.
49
outlook and plans for future
development
In response to the pressure of a sluggish
global economy in 2013 and Vietnam’s
solutions to stabilize its macro economic
conditions, MB’s Board of Directors
has determined to continue with the
orientation “Restructuring, sustainable
development” where it will stick with
5-year-development strategy (20102015) and adapt to practical situations,
particularly in expanding the client base
and increasing market share. MB will hold
onto its strategic pillars and platforms to
position itself as a “customer convienient
bank” for all the selected client segments.
2013 will be a key execution phase of the
strategy and the Board of Directors decides
to carry out drastic transformations. Since
one of the goals is to take the lead in
Information Technology application, MB
will boost investments in infrastructure
and technology, continually stimulate
the development of integrated hi-tech
products and services. At the same time,
it will focus on improving service quality,
the employee’s professionalism and
dedication to service. A combination of hitech products and service excellence will
be essential to put MB into the league of
leaders with exceptional service.
Along with improving product and
service quality towards creating great
convenience to clients, MB will accelerate
the development of product chains,
enhance cross-selling between MB
products, between MB and subsidiaries
and among subsidiaries themselves. This
is also part of the strategy to realize the
group model, which is currently active in
MB. The goal is, each member in the MB
system will become a leader in their field,
and act as an important and powerful link
to enhance MB’s position as a customer
convenient bank, listing among the 3
best commercial banks across Vietnam in
2015. To accomplish this task, corporate
governance and the refinement of MB’s
organizational structure will be a special
focus.
With sustainable development being the
core, MB will continue to strengthen the
risk management system, review current
processes, regulations to better control
operations; improve corporate culture,
nurture qualified and loyal personnel
on the basis of discipline, unity and
accountability.
With a sense of unity, discipline along
with its core values, MB is on the way
to become one of the leading financial
groups in Vietnam in 2015 and it desires to
thrive with partners, clients, shareholders
beyond challenges. The results achieved in
2012 and the confidence of shareholders
are a great motivator for MB to realize its
future plans.
50
51
1,000,000,000
shares
Currently circulated shares
15,073
shareholders
Number of shareholders
CORPORATE GOVERNANCE
Salaries, bonuses, remuneration rewarded to the Board of Directors, the Supervisory Board:
In 2012, remuneration and operating budget for the Board of Directors, the Supervisory Board was 0.5% of fiscal year’s net profit
– as approved by the AGM Resolution on April 26, 2012.
Activities of the Board of Directors, the Supervisory Board:
In 2012, the MB Board of Directors implemented the Governance Regulations applicable to the management of listed companies
to satisfy internal control requirements, statutory requirements and business requirements.
With the clearly assigned roles of the Annual General Meeting, the Board of Directors, the Supervisory Board, the Board of
Management,... corporate governance is systematically executed in a way that facilitates cooperation and information sharing to
fulfill business requirements in a timely manner.
Implementing the Governance Regulations, in 2012, the MB Board of Directors directed their branches to comply with reporting/
communicating requirements from the Board of Directors/the Supervisory Board, providing a basis to monitor MB’s operations
and the implementation of the Board’s resolutions by branches on a regular and ad-hoc basis.
The Standing BoD’s meetings are held on a weekly basis. The Board of Directors also holds quarterly meetings to evaluate the
Board of Management’s reports on operations and direct weekly, monthly planning as well as maintain a monitoring system based
on hierarchical authority. The Board of Directors and the Supervisory Board will work together to direct Internal Audits to organize
inspection programs, comprehensive audits, program audits and special purpose audits for 25 branches, 2 subsidiaries and 4
Divisions at the Head Office to monitor, and provide orientation and directive opinions. This will serve as a basis to periodically
evaluate activities of the Board of Management based on the objectives and results.
Shareholder’s Portal:
MB shareholders may find more information at tab Investors on the website: www.mbbank.com.vn or directly contact
Shareholders Management Office (Address: 3rd Floor – No. 3 Lieu Giai - Ba Dinh - Hanoi. Tel: 04. 3762. 3326)
52
Shareholders Information and shareholders management:
Changes in shareholders’ equity
In 2012, MB increased the charter capital as planned. Thus, as at December 31, 2012, the MB charter
capital stood at 10,000 billion VND
Total number of listed shares : 1,000,000,000 shares
Total number of circulated shares: 1,000,000,000 shares
Number of treasury shares: Nil
As at December 31, 2012, MB made 2 payments of dividends in advance in cash for the year of 2011
with total rate of 5% (the cash dividend payout ratio in 2011 was 17%, which was divided into 3
installments) and 01 payment of 10% for 2012.
53
Ownership Structure, Change in Ownership Structure of BoD Members, Shareholders Policies
* Share Structure (Shareholder data collected as at December 31, 2012)
No.
Members of the Board of Directors
% Equity Owned as at
December 31, 2010
December 31, 2011
December 31, 2012
-
0%
0.003%
1
Le Huu Duc
2
Le Van Be
0.128%
0.128%
0.119%
3
Nguyen Manh Hung
0.013%
0.013%
0.015%
4
Ha Tien Dung
0.010%
0.010%
0.011%
5
Dau Quang Lanh
0.022%
0.022%
0.021%
6
Tran Thi Kim Thanh
0.008%
0.008%
0.006%
7
Nguyen Dang Nghiem
0.008%
0.008%
0.009%
54
Major shareholders (Equity owned >=5%)
No.
Shareholders’ Names
1
Bank for Foreign Trade of Vietnam
(Vietcombank)
2
Vietnam Military Telecom Corporation (Viettel)
3
Vietnam Maritime Commercial
Joint Stock Bank
4
Vietnam Helicopter Corporation
Address
Principal
business
activities
As at December 31, 2012
Number of
shares owned
% Equity
owned
No. 198 Tran Quang Khai Street,
Hanoi City
Banking
97,900,000
9.79%
No. 01 Giang Van Minh Street,
Hanoi City
Telecommunication
150,000,000
15.00%
No. 88 Lang Ha Street, Dong Da
district, Hanoi City
Banking
94,114,630
9.41%
No. 172 Truong Chinh Street,
Hanoi City
Air service
52,882,207
5.28%
Shareholder Structure
Number of
shareholders
Number of shares owned
% Equity Owned
Institutional shareholders
233
722,904,535
72.29%
A
Domestic
170
637,399,678
63.74%
B
Foreign
63
85,504,857
8.55%
2
Individual shareholders
14,840
277,095,465
27.71%
A
Domestic
14,744
276,154,034
27.62%
B
Foreign
96
941,431
0.09%
15,073
1,000,000,000
100%
No.
Classification of shareholders
1
Total
55
56
Achievements & Awards
Human Resource
Community Activities
Branch Network
Subsidiaries
57
MB significant achievements and
awards in 2012
01
CERTIFICATE OF MERIT FROM THE STATE BANK
This is granted to an entity for its successful completion of duties in the emulation movement and
positive contributions to the banking industry.
02
03
VIETNAM STRONG BRAND NAME AWARD
“Vietnam Strong Brand Name” is a prestigious annual award presented by the Vietnam Economic Times in co-ordination with the Vietnam Trade Promotion Agency (the Ministry of Industry and
Trade). Awards are granted to 100 Vietnam businesses for their outstanding business results and
sustainable brand development, increased competitiveness in times of economic integration, and
their contributions to building the country’s brand. MB has been the receiver of this award in consecutive years.
100 ASEAN STRONG BRANDS AWARD
This is a regional prestigious award among Southeast Asian nations which aims to honor outstanding
enterprises and individuals for their contributions to the common prosperity, the socio-economic
and cultural development and the friendly relationships across ASEAN. This is the 2nd consecutive
year MB has received this award.
04
05
CERTIFICATE OF VIETNAM 50 TOP PERFORMING COMPANIES
“Vietnam 50 Top Performing Companies” is an annual ranking and survey
program conducted by the Investment Bridge Journal, intended for listed
companies in Vietnam.
CERTIFICATE OF MERIT GRANTED BY PRIME MINISTER
Mr Le Cong – MB’s CEO was awarded for his outstanding achievements during 2007- 2011, contributing to the cause of building socialism and defending nation.
58
06
TOP 50 OF THE 500 LARGEST ENTERPRISES IN VIETNAM
MB was in the Top 50 of the 500 largest
enterprises in Vietnam – according to the
annual report conducted by the Vietnam
Report JSC and VietNamNet e-newspaper.
07
AWARD FOR THE EXCELLENT MEMBER IN PRIMARY
MARKET FOR GOVERNMENT BONDS IN 2012
MB was the only bank to be awarded this prize by the
Vietnam State Treasury.
08
RECOGNITION FLAGS GRANTED BY THE
GOVERNMENT AND THE MINISTRY OF DEFENCE
These were granted to MB for excellently fulfilling
business duties and spearheading the emulation
movement in the banking sector.
09
“EMULATED SOLDIER” IN THE BANKING SECTOR
Mr. Le Cong, CEO and Ms. Pham Thi Trung Ha, Deputy General Director of MB were
awarded the title for “their outstanding achievements in the emulation movement in
the sector from 2009 to 2012.”
10
RECOGNITION FLAG GRANTED BY HANOI PEOPLE’S COMMITTEE
This is granted to entities with significant contributions to the development of the city.
59
60
Human Resources Statistics
Policies for Employees
61
General statistics
of HR*
* MB Bank alone
VND Million
average before tax/ person in 2012
2008
2009
number of employees till
31/12/2012
5,221
people
2010
2011
2012
average age
28
year-old
average profit before tax/person 2012
605
million dong/ person
62
educational qualification by 2012
post-graduate &
university degree
4,731
people
college degree
202
people
vocational secondary education
certificate or equivalents
288
people
63
policies for
employees
64
By the end of 2012, the number of employees of
MB Bank is: 5,221 employees
Average income of MB Bank’s employees in 2012
is: 17,952,431 dong/month
A
part from monthly salary and allowances, MB also
offers periodic bonuses on the occasions of public
holidays, performance-based bonuses and ad-hoc bonuses to teams and individuals who have provided excellent performance, initiatives, or made valuable contributions
to MB, bonuses for those who have completed and exceeded the
annual targets, and bonus share and preferential share plans.
To motivate, support and associate each employee with the
Bank, MB currently applies a number of benefit plans for employees and their family as follows: presenting gifts on birthdays
and gifts to employees’ families on the occasion of Lunar New
Year, funding employee social activities, offering combined
health insurance plans for individuals.
65
66
MB’s Social Activities in 2012
67
community
activities
68
Living the spirit of solidarity and mutual assistance,
the MB soldiers on the economic front are also
committed enthusiasts of meaningful community
activities.
A
part from making great efforts to
establish its position in the financial
market, in 2012, MB also actively
participated in various gratitude activities
intended for disadvantaged people and
families under preferential treatment
policy. A great number of meaningful
programs were implemented across the
MB system with the total funding for social
activities surpassing VND 30 billion.
One notable program being “Home of
Comrades” was initiated by MB with
the participation of the following units,
namely Military Zone 4, Military Zone 5 and
Military Command of Dong Thap. In this
program alone, MB completed and handed
over 27 houses. Senior Lieutenant-General
Le Huu Duc,Chairman of the MB’s Board
of Directors, had presented two houses
to two parishioner families in Cam Phuoc
Dong Commune, Cam Ranh City, Khanh
Hoa Province. In 2012, MB financed and
constructed 47 houses for families under
special treatment policy altogether. At the
same time, we provided funding for home
repair of 50 families who were former
youth volunteers in Nghe An Province.
In parallel with housing support for those
kinds of families, MB also engaged in
assisting the Association of Vietnam
Martyrs’ Families, presenting gifts to war
invalids, martyrs’ relatives and funding the
printing of the book “Portraits of Vietnam’s
Heroic Mothers”, presented 4 houses of
gratitude to martyrs’ mothers in Thai Binh
Province, donating 2 houses of gratitude in
Binh Phuoc, Ba Ria, Vung Tau.
In particular, in 2012 MB got involved in
the program “Come Back from Memories”
to seek information on martyrs’ graves
and look for their relatives. After one year
of operation, this meaningful program
received more than 20,000 requests for
seeking martyrs and more than 7,000
pieces of information from veterans and
witnesses were classified and handled. The
program updated names and information
for more than 400 martyrs’ families
and about 216 of them retrieved their
member’s remains; connected many other
families with martyrs’ comrades. Grave
searching was done through information
collection, verification and connection and
DNA testing to ensure correct identity of
the deceased and bring the martyrs back
to their families and hometowns.
Equally important, in 2012, MB financed
the construction of a multi-functional
cultural house on Da Tay B Island,
Truong Sa Archipelago. This is a super
solid construction that could withstand
extreme weather conditions over the
island. The house serves not only as a
common meeting place and the office for
the soldiers on duty all over Truong Sa but
also temporary shelter for fishermen in
distress.
We could say that in 2012, along with
constantly making their best efforts
to realize the
business plan and
continuously
developing
initiatives
to minimize operating expenses, MB
actively performed the corporate social
responsibility as a market leader. Apart
from programs of gratitude, support
programs to promote patriotism, MB
personnel actively organized visits ,
presented gifts and houses of gratitude for
disadvantaged people and families under
preferential treatment policy. Besides,
the 7th “Back to original” program deeply
touched the heart of each and every MB
staff.
69
Branch
Network
70
Branches in Vietnam
Number of transaction points
An Giang1
Bac Ninh2
Binh Dinh3
Binh Duong2
Can Tho3
Da Nang6
Dak Lak3
Dong Nai4
Dong Thap 1
Gia Lai1
Ha Noi60
Hai Duong1
Hai Phong13
Ho Chi Minh37
Hue4
Hung Yen2
Khanh Hoa3
Kien Giang1
Lao Cai1
Long An1
Nghe An3
Ninh Binh3
Quang Nam2
Quang Ngai2
Quang Ninh5
Quang Tri1
Tay Ninh1
Thai Nguyen2
Thanh Hoa3
Viet Tri5
Vinh Phuc1
Vung Tau3
Overseas Branches
Number of branches
Cambodia1
Laos1
71
Branch
Network
With the aim of expanding the network in border areas
helping bolster national security, in 2012, MB opened new
branches in Lao Cai and Tay Ninh, Mong Cai. The number
of transaction offices in the whole system totalled 182
facilities across the system.
72
Strengths in MB’s strategy to promote network
development in 2013 and beyond compared to other
banks are as follows:
- Focusing efforts of network development in key economic areas, urban areas, major cities, densely populated areas with convenient transportation. Images and designs are always standardized and easily recognized through eye-catching positions and large
panels;
- Developing the network featuring national security and sea, island sovereignty;
- Expanding the network coupled with strengthening risk management as well as effective business management;
- Using the Code of Macroeconomic Indicators to measure and compare the attraction among provinces/cities, then accordingly
selecting the most potential areas for network development;
- Following procedures for new network development, significantly shortening time of opening new branches and transaction
offices.
- Based on the analysis of the microeconomic indicators to select locations, and addressing models of transaction facilities (branches/transaction offices) suitable to market size and conditions in a certain place;
- Boosting network development in combination with serving large enterprises’ chains of satellite customers: Customers of agricultural and seafood product exporters, processing companies in the Mekong Delta provinces; customers of coffee, cashew nut exporters in Central Vietnam and in the Central Highlands;
- Stimulating network development with Viettel and other Defence entities.
In 2012, MB put into operation another 6 transaction facilities, increasing the total number to 182, inclusive of 1 Operation Center, 1
branch in Laos, 1 branch in Cambodia, 53 branches, 118 transaction offices, 4 Savings Funds, 4 transaction points in 32 provinces and
cities across the country.
73
subsidiaries
list of subsidiaries as at 31/12/2012
No.
Company name
contact
01
MB Securities
Joint Stock Company (MBS)
-Add: 7th floor, MB Building, Lieu Giai
street, Ba Dinh, Hanoi.
-Website:www.mbs.com.vn
-Tel: +84 4 37262600
02
MB Capital Fund Management
Joint Stock Company
(MB Capital)
-Add: 8th floor, MB Building, Lieu Giai
street, Ba Dinh, Hanoi.
-Website:www.mbcapital.com.vn
-Tel: +84 4 37262808
03
Military Commercial Joint Stock
Bank- Asset managentment
company limited
(MB AMC)
-Add: 4th floor, No.195,
Kham Thien street, Dong Da, Hanoi.
-Website:www.mbamc.com.vn
-Tel: +84 4 35569210
04
MB Land
Joint Stock Company
(MB Land)
-Add: No. 6-8, Chua Boc street, Dong Da,
Hanoi.
-Website:www.mbland.vn
-Tel: +84 4 35738134
Viet REMAX Joint Stock
Company
-Add: No. 259 Tran Hung Dao street,
Co Giang, District 1, HCM city.
-Website:www.vremax.vn
-Tel: +84 8 39256849
05
COÂNG TY COÅ PHAÀN ÑÒA OÁC MB
74
Business
Registration
Certificate
Business activities
Charter capital
(VND billion)
Ownership ratio
by MB
07/GPDC-UBCK issued by the
State Security Commission
on 14 January 2013
Securities trading and investment
brokerage
1,200,00
61.85%
07/UBCK-GPHĐQLQ issued
by the State Security
Commission
on 29 September 2006
Funds management
100,00
61. 78%
0104000066 dated
11 September 2002 issued
by Hanoi Department of
Planning and Investment
Liabilities and asets management
582,6
100%
0103022148 dated
25 January 2008 issued
by Hanoi Department of
Real estate investment and trading
653,73
65.88%
4102082555 issued by
Ho Chi Minh Department of
on 02 February 2010
Invest in development of and trading
office for lease
100,00
78.09%
75
SUBSIDIARIES
MB Securities Joint Stock Company (MBS)
Founded in May 2000, MB Securities was one of the first five securities
companies in Vietnam. Currently, MBS’s chartered capital is VND 1,200 billion
of which MB accounts for 61.85%.
MBS is also one of the leading securities companies in Vietnam, capable of
providing a full range of advanced securities services. When the market was
at its peak, MBS was the market leader when its securities brokerage market
share dwarfed that of the 2nd largest company.
MBS’s development strategy in the coming years is to continue restructuring
its activities in a cost-effective, flexible and efficient manner; train and employ
qualified personnel in order to enhance stability, professionalism and security.
MB Capital Fund Management Joint Stock Company (MB Capital)
Established in 2006, MB Capital’s chartered capital is VND 100 billion, of which
MB owns 61.78%. The company operates mainly in investment, investment
fund management and investment consultation for institutional and individual
clients in the fields of consumer goods, industry, oil and gas, import and export,
pharmacy, finance and banking, and real estate, etc.
MB Capital currently manages 05 investment funds including Hanoi Investment
Fund, Vietnam Tiger Fund, Vietnam Dream Fund, MB Japan Asia Fund (MBEF1),
MB Capital Vietnam Bond Fund (MBBF), 03 of which were founded with capital
contributions from the United Investment Fund Management Company of
Japan Asia Group, Japan.
MB Capital is one of the leading fund management companies in Vietnam that
is highly rated and classified as a highly-active company in the market by the
State Securities Commission. In addition to corporate clients, MB Capital is
targeting domestic and foreign individual investors through the establishment
of MBBF Fund – the first open Bond Investment Fund in Vietnam.
Military commercial joint stock Bank - Asset Management Company Limited
(MB AMC)
Founded in November 20, 2002 as a 1-member limited company owned by
MB, MB AMC operates in debt settlement, asset valuation, asset exploitation.
In addition, it undertakes a number of other tasks authorized by MB including:
managing investment projects, designing and and managing network
development, joint venture participation, capital contribution.
MB AMC aims to build its core values based on trust, professionalism, growth,
effectiveness, continuous innovation, product diversification in response to
market trends and customer needs.
In years to come, it is MB AMC’s ambition that it will develop on a comprehensive
basis within MB Group, with 2-3 branches in the North, Central Vietnam, the
South, and gradually become the most effective debt settler in the commercial
banking system and a professional real-estate investor, developer and
manager.
76
MB Land Joint Stock Company (MB Land)
COÂNG TY COÅ PHAÀN ÑÒA OÁC MB
MB Land was founded by 6 legal entities in 2008. It increased the chartered
capital from VND 475 billion to VND 654 billion with its total assets of over VND
1,000 billion,65% of which are owned by MB. Since then, it has been an active
member within MB Group, continuously growing and successfully establishing
its brand in real estate investment and development in Vietnam. MB Land
always seeks to develop new projects with marketable products making heavy
investments in facilities & information systems; improving human resources
quality, thus enhancing the reputation of MB Land in particular, and the MB
Group as a whole. MB Land has been intended to become the focal point of
development/investment activities strengthening MB’s capabilities. In 2012,
MB Land moved forward with comprehensive restructuring programs designed
to facilitate sustainable operations and business efficiency.
Viet Remax Joint Stock Company
Viet Remax is a joint stock company operating in investment, real-estate trading
and office rental. In 2010, Viet Remax officially became a subsidiary of MB after
AMC and MB Capital held 78.09% of its chartered capital, with the initial goal of
investing and developing the MB Sunny Tower project.
In the near term, Viet Remax will concentrate on the completion of the key
project - MB Sunny Tower and hand it over as scheduled, and at the same
time, restructure its organization, operations to be merged with MB Land as a
subsidiary.
77
78
financial report
general information
80-83
REPORT OF THE BOARD OF MANAGEMENT
84
AUDITED CONSOLIDATED FINANCIAL
STATEMENTS
Independent auditors’ report
85
Consolidated balance sheet
86-89
Consolidated income statement
90-91
Consolidated cash flow statement
92-94
Notes to the consolidated financial
statements
95
‘s annual report 2012
79
GENERAL INFORMATION
THE BANK
Military Commercial Joint Stock Bank (“the Bank”) is a commercial joint stock bank incorporated and registered in the Socialist Republic
of Vietnam.
The Bank was incorporated in accordance with Business License No. 0054/NH-GP issued by the Governor of the State Bank of Vietnam
on 14 September 1994 and Decision No. 00374/GP-UB issued by the Hanoi’s People Committee. The operational duration under the
license is fifty (50) years.
The principal activities of the Bank are to provide banking services including receiving short, medium and long-term deposits from organizations and individuals; making short, medium and long-term loans and advances to organizations and individuals based on the
features and capability of the Bank’s capital sources. The Bank also provides foreign currency exchange services, international trade
finance services, discount of commercial papers, bonds and other valuable papers, and other banking services authorized by the State
Bank of Vietnam.
The Head Office of the Bank is located at No.21 Cat Linh Street, Dong Da District, Hanoi City, Vietnam. As at 31 December 2012, the Bank
has one (01) Head Office, one (01) Operation Center, one (01) branch in the People’s Democratic Republic of Lao, one (01) branch in the
Kingdom of Cambodia, fifty three (53) branches, one hundred and eighteen (118) transaction offices, four (04) saving funds and four (04)
transaction service units located in cities and provinces throughout Vietnam. It also has five (05) subsidiaries and three (03) associates.
SUBSIDIARIES
As at 31 December 2012, the Bank had five (05) subsidiaries as follows:
No.
name
01
MB Asset Management Company
Limited (“MB AMC”)
02
Business License No.
0105281799 dated 11 December 2012 granted by Hanoi’s
Department of Planning and
Investment
07/GPĐC-UBCK dated 14 JaMB Securities Joint Stock Company
nuary 2013 granted by Hanoi’s
(the original name was Thang Long
Securities Joint Stock Company) “MBS”
Investment
% OWNED
BY THE
BANK
Industry
Debt and asset management
100%
Securities investment and trading
61. 85%
03
MB Capital Management Joint Stock
Company (the original name was
Hanoi Fund Management Joint Stock
Company) (“MB Cap”)
53/UBCK-GP dated 6 November 2009 granted by Hanoi’s
Investment
Fund management
61. 78%
04
Military Bank Land Joint Stock Company (MB Land) (*)
0102631822 dated 25 October
2012 granted by Hanoi’s
Investment
Property trading
65.88%
0304136549 dated 8 February
2010 granted by Ho Chi Minh
city’s Department of Planning
and Investment
Office buildings and residential
construction
78.09%
05
Viet Remax Joint Stock Company (*)
(*): Indirect ownership through subsidiaries.
80
GENERAL INFORMATION (continued)
ASSOCIATES
As at 31 December 2012, the Bank had three (03) associates as follows:
% OWNED
BY THE BANK
No
Name
Industry
01
Vietasset Investment Joint
Stock Company (*)
0102749334 dated 27 May 2010 granted by
Hanoi’s Department of Planning and Investment
Construction
investment
45.00%
02
Long Thuan Loc Joint Stock
Company (*)
4703000542 dated 19 May 2008 granted by
Dongnai province’s Department of Planning
and Investment.
Construction
29.65%
Non-life insurance
49.76%
03
Military Insurance Joint Stock 43GP/KDBH granted by the Ministry of FiCompany (“MIC”)
nance on 8 October 2007
81
GENERAL INFORMATION (CONTINUED)
BOARD OF DIRECTORS
The members of the Board of Directors for the year ended 31 December 2012 and at the date of this report are as follows:
Full name
Title
Date of appointment/re-appointment
Mr. Le Huu Duc
Chairman
Mr. Le Van Be
Vice Chairman
Re-appointed on 29 July 2009
Vice Chairman
Appointed on 29 July 2009
Mr. Ha Tien Dung
Member
Mr. Dau Quang Lanh
Member
Member
Member
Appointed on 28 April 2011
BOARD OF SUPERVISION
The members of the Board of Supervision for the year ended 31 December 2012 and at the date of this report are as follows:
Full name
Title
Ms. Pham Thi Ty
Chief
Member
Member
Mr. Le Cong Soa
Member
82
GENERAL INFORMATION (continued)
BOARD OF MANAGEMENT
The members of the Board of Management for the year ended 31 December 2012 and at the date of this report are as follows:
Full name
Title
Date of appointment
Mr. Le Cong
Chief Executive Officer
Mr. Dang Quoc Tien
Deputy General Director
Appointed on 7 May 2002
Mr. Do Van Hung
Appointed on 18 October 2005
Ms. Cao Thi Thuy Nga
Appointed on 1 January 2006
Appointed on 11 June 2007
Mr. Luu Trung Thai (*)
Appointed on 23 November 2009
Mr. Hoang Le Hung
Ms. Le Thi Loi
Chief Finance Officer
(*): Non-executive officer.
LEGAL REPRESENTATIVE
The legal representative of the Bank at the date of this report is Mr. Le Huu Duc - the Chairman.
AUDITORS
The auditors of the Bank are Ernst & Young Vietnam Limited.
83
report of the board of management
The Board of Management of Military Commercial Joint Stock Bank (herein referred to as “the Bank”) is pleased to present this report
and the consolidated financial statements of the Bank and its subsidiaries for the year ended 31 December 2012.
MANAGEMENT’S RESPONSIBILITY IN RESPECT OF THE CONSOLIDATED FINANCIAL
STATEMENTS
The Board of Management of the Bank is responsible for the consolidated financial statements of each financial year which give a true
and fair view of the consolidated state of financial affairs of the Bank and its subsidiaries and of their consolidated results of operations
and consolidated cash flows for the year. In preparing those consolidated financial statements, the Board of Management of the Bank
is required to:
- select appropriate accounting policies, then apply and use them consistently;
- make judgments and estimates that are reasonable and prudent;
- state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the
consolidated financial statements; and
- prepare the consolidated financial statements on the going concern basis unless it is inappropriate to presume that the Bank and its
subsidiaries will continue its business.
The Board of Management of the Bank is responsible for ensuring that proper accounting records are kept which disclose, with reasonable accuracy at any time, the consolidated financial position of the Bank and its subsidiaries and to ensure that the accounting records
comply with the registered accounting system. It is also responsible for safeguarding the assets of the Bank and its subsidiaries and
hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Board of Management of the Bank has confirmed that the Bank has complied with the above requirements in preparing the accompanying consolidated financial statements for the year ended 31 December 2012.
STATEMENT OF THE BOARD OF MANAGEMENT
The Board of Management does hereby state that, in its opinion, the accompanying consolidated financial statements give a true and
fair view of the consolidated financial position of the Bank and its subsidiaries as at 31 December 2012 and of their consolidated results
of operations and their consolidated cash flows for the year then ended in accordance with the Vietnamese Accounting Standards and
Accounting System for Credit Institutions and comply with other relevant regulations by the State Bank of Vietnam.
On behalf of the Board of Management:
Mr. Le Cong
Hanoi, Viet Nam - 28th February, 2013
84
INDEPENDENT AUDITORS’ REPORT
To:
Refference: 60755036/15504053
The Shareholders of
Military Commercial Joint Stock Bank
We have audited the consolidated financial statements of Military Commercial Joint Stock Bank (“the Bank”) and its subsidiaries
as set out on pages 6 to 87 which comprise the consolidated balance sheet as at 31 December 2012, the consolidated income
statement and the consolidated cash flow statement for the year then ended and the notes thereto.
The preparation and presentation of these consolidated financial statements are the responsibility of the Bank’s management.
Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
Basis of Opinion
We conducted our audit in accordance with Vietnamese Standards on Auditing. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Bank’s management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides
a reasonable basis for our opinion.
Opinion
In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of the Bank
and its subsidiaries as at 31 December 2012 and of the consolidated results of their operations and their consolidated cash flows for the
year then ended in accordance with the Vietnamese Accounting Standards and System for Credit Institutions and comply with other
relevant regulations stipulated by the State Bank of Vietnam.
________________________________
Ernst & Young Vietnam Limited
Nguyen Xuan Dai
Certificate No. 0452/KTV
Hoang Thi Hong Minh
Auditor in-charge
Certificate No. 0761/KTV
Hanoi, Viet Nam
28th February, 2013
85
CONSOLIDATED BALANCE SHEET
as at 31 December 2012
Notes
31 December 2012
VND
31 December 2011
VND
Cash and cash equivalents on hand
5
864,942,781,893
917,417,870,812
Balances with the state banks
6
6,239,058,244,702
6,029,092,624,509
Due from banks
7
42,942,382,929,830
41,666,763,671,267
18,345,651,101,518
41,056,573,671,267
24,759,337,400,000
610,190,000,000
(162,605,571,688)
-
ASSETS
Placements with other banks
Loans to other banks
Provision for loans to other banks
Trading securities
8
229,737,919,955
826,196,437,581
Trading securities
8
490,923,128,122
1,194,306,537,316
13.1
(261,185,208,167)
(368,110,099,735)
73,165,823,165,254
57,952,296,461,413
9
74,478,564,337,372
59,044,836,949,430
10
(1,312,741,172,118)
(1,092,540,488,017)
41,387,495,927,337
19,412,920,211,865
Provision for impairment of trading securities
Loans and advances to customers
Provision for loans and advances to customers
Investment securities
Available-for-sale investment securities
11.1
37,946,378,139,035
14,868,663,336,722
Held-to-maturity investment securities
11.2
4,097,809,933,272
5,003,694,000,000
Provision for impairment of investment securities
13.2
(656,692,144,970)
(459,437,124,857)
12
1,602,316,167,085
1,781,279,481,134
Investments in associates
12.1
282,693,018,972
154,575,056,628
Other long-term investments
12.2
1,412,524,547,113
1,732,006,129,236
Provision for impairment of long-term investments
13.3
(92,901,399,000)
(105,301,704,730)
1,497,636,387,392
1,551,406,310,100
451,117,268,989
470,820,208,461
Cost
1,023,197,001,541
886,936,819,824
Accumulated depreciation
(572,079,732,552)
(416,116,611,363)
1,046,519,118,403
1,080,586,101,639
Long-term investments
Fixed assets
Tangible fixed assets
Intangible assets
14.1
14.2
86
CONSOLIDATED BALANCE SHEET (CONTINUED)
31 December 2012
VND
31 December 2011
VND
Cost
1,245,130,490,277
1,203,436,820,745
Accumulated amortization
(198,611,371,874)
(122,850,719,106)
151,733,579,986
147,138,579,986
151,733,579,986
147,138,579,986
-
-
7,528,836,962,401
8,546,980,659,779
2,938,446,858,997
1,618,383,424,772
27.2
6,028,682,000
8,493,526,750
Accounts receivable
16
4,077,969,153,309
5,031,389,882,639
Other assets
17
651,905,162,704
2,165,074,242,641
Provision for other assets
18
(145,512,894,609)
(276,360,417,023)
175,609,964,065,835
138,831,492,308,446
Notes
Investment properties
15
Cost
Accumulated depreciation
Other assets
Interest and fee receivables
Deferred tax asset
TOTAL ASSETS
87
Note
31 December 2012
VND
31 December 2011
VND
Borrowings from the Government and the State Bank of
Vietnam
19
488,477,289,152
-
Due to banks
20
30,512,107,135,831
26,672,484,256,550
Due to customers
21
117,747,416,352,273
89,548,672,963,831
Derivatives and other financial liabilities
22
26,173,405,229
22,637,453,462
Other borrowed funds
23
189,591,782,500
201,504,544,500
Valuable papers issued
24
3,420,068,393,288
4,531,631,630,177
9,696,283,312,392
7,556,762,013,844
1,389,257,024,034
1,045,738,735,038
LIABILITIES
Other liabilities
Interest and fee payables
Tax payables
27
78,271,141,292
381,138,357,091
Other payables
25
8,021,365,893,465
5,984,963,488,180
Provision for off-balance sheet commitments
26
207,389,253,601
144,921,433,535
162,080,117,670,665
128,533,692,862,364
10,320,233,376,265
7,547,587,039,063
10,000,000,000,000
7,300,000,000,000
Share premium
338,420,864,820
253,764,812,500
Other capital
(18,187,488,555)
(6,177,773,437)
TOTAL LIABILITIES
OWNERS’ EQUITY
Capital and reserves
Capital
28
Chartered capital
Reserves
28
1,037,991,429,693
844,821,944,174
Undistributed earnings
28
1,505,681,017,687
1,249,734,068,530
12,863,905,823,645
9,642,143,051,767
665,940,571,525
655,656,394,315
175,609,964,065,835
138,831,492,308,446
TOTAL OWNERS’ EQUITY
MINORITY INTERESTS
TOTAL LIABILITIES AND OWNERS’ EQUITY AND MINORITY
INTERESTS
28
88
CONSOLIDATED OFF-BALANCE SHEET ITEMS
31 December 2012
VND
31 December 2011
VND
Letters of guarantees
21,222,404,800,802
13,058,900,258,774
Letters of credit
52,063,507,091,294
62,735,809,507,214
73,285,911,892,096
75,794,709,765,988
Note
41
Prepared by:
Ms. Ngo Bich Ngoc
Head of Accounting Department
Approved by:
Approved by:
Ms. Le Thi Loi
Mr. Le Cong
Hanoi, Vietnam
28 February 2013
89
CONSOLIDATED INCOME STATEMENTS
for the year then ended 31 December 2012
Note
2012
VND
2011
VND
Interest and similar income
30
15,438,141,721,830
13,820,889,366,942
Interest and similar expenses
31
(8,835,583,145,824)
(8,598,491,058,254)
6,602,558,576,006
5,222,398,308,688
Net interest and similar income
Fees and commission income
32
904,391,254,780
1,190,897,020,145
Fees and commission expenses
32
(171,681,928,761)
(548,245,078,865)
Net fees and commission income
32
732,709,326,019
642,651,941,280
Net gain/(loss) from foreign currencies trading
33
3,656,224,409
(85,325,909,386)
Net loss from trading securities, investment securities and
long-term investments
34
(66,837,882,912)
(113,212,938,591)
Reversal/(provision) for impairment of trading securities,
investment securities and long-term investments
35
197,070,177,185
(655,427,623,253)
Dividend income
36
67,869,769,645
79,404,721,958
Net gain from other operating activities
37
276,343,900,137
56,641,237,000
7,813,370,090,489
5,147,129,737,696
(1,426,502,072,238)
(824,090,012,976)
TOTAL OPERATING INCOME
Personnel expenses
Depreciation and amortization expenses
14
(241,817,655,801)
(199,745,673,924)
Other operating expenses
38
(1,028,338,849,109)
(856,824,082,445)
(2,696,658,577,148)
(1,880,659,769,345)
5,116,711,513,341
3,266,469,968,351
7
(162,605,571,688)
-
10
(1,657,935,017,940)
(525,281,882,313)
Provision for off-balance sheet commitments
26
(62,467,820,066)
(3,864,248,098)
Provision for doubtful receivables
18
(144,152,477,586)
(112,000,000,000)
TOTAL OPERATING EXPENSES
Profit before provision for credit losses
Provision for loans to banks
90
CONSOLIDATED INCOME STATEMENTS (continued)
PROFIT BEFORE TAX
3,089,550,626,061
2,625,323,837,940
Current enterprise income tax expense
27.1
(767,049,881,430)
(709,988,295,247)
Deferred enterprise income tax income
27.2
(2,464,844,750)
-
2,320,035,899,881
1,915,335,542,693
14,156,955,819
(211,373,915,862)
2,305,878,944,062
2,126,709,458,555
2,457
2,913
PROFIT AFTER TAX FOR THE YEAR
Minority interests
28.1
NET PROFIT ATTRIBUTABLE TO THE BANK
Basic earnings per share
Prepared by:
Ms. Ngo Bich Ngoc
28.4
Approved by:
Approved by:
Ms. Le Thi Loi
Mr. Le Cong
Hanoi, Vietnam
28 February 2013
91
CONSOLIDATED CASH FLOW STATEMENTS
2012
VND
2011
VND
14,220,221,622,601
13,571,818,175,233
(8,492,064,856,828)
(8,212,451,931,397)
Fees and commission income receipts
732,709,326,019
642,651,941,280
Receipts/(payments) from foreign currency trading and
investment securities
(63,181,658,503)
(198,538,847,977)
(959,490,051,212)
(842,018,552,980)
41,482,058,248
41,835,707,535
(1,278,408,396,400)
(824,090,012,976)
(1,070,027,250,408)
(654,263,306,067)
3,131,240,793,517
3,524,943,172,651
(Increase)/decrease in due from banks
(25,683,494,370,390)
1,011,307,353,715
Increase in trading securities
(13,037,248,797,629)
(3,039,802,636,479)
Increase in loans and advances to customers
(15,433,727,387,942)
(10,423,192,922,826)
(1,330,809,442,271)
(767,427,623,253)
2,422,578,218,769
(1,444,368,480,247)
488,477,289,152
(8,768,803,309,362)
3,839,622,879,281
9,755,831,792,941
Increase in due to customers
28,198,743,388,442
23,807,834,804,419
Decrease in issuing bonds and valuable papers (except for
issuing bonds and valuable papers for financing activities)
(1,111,563,236,889)
(879,010,809,803)
(11,912,762,000)
84,496,402,500
3,535,951,767
22,637,453,462
Note
CASH FLOWS FROM OPERATING ACTIVITIES
Interest and similar income receipts
Interest and similar expense payments
Payments for other operating activities
Recovery of bad debts written-off
Payments to employees and operating expenses
Enterprise income tax paid in the year
Net cash flows from operating activities before changes in
operating assets and liabilities
27.1
Changes in operating assets
Utilisation of provision for impairment of investment securities and long-term investments
(Increase)/Decrease in other assets
Changes in operating liabilities
Increase/(decrease) in borrowings from the Government
and the SBV
Increase in due to banks
Increase/(decrease) in other borrowed funds
Increase in financial derivatives
92
CONSOLIDATED CASH FLOW STATEMENTS (continued)
Increase in other liabilities
1,770,655,767,089
3,672,750,971,061
Reserves utilized in the year
(326,481,373,371)
(477,349,146,288)
(17,080,383,082,475)
16,079,847,022,491
(189,226,767,500)
(398,910,406,360)
2,135,442,333
-
(Increase)/decrease in equity investments
190,656,657,148
(150,365,604,608)
(Increase)/decrease in investment property
(4,595,000,000)
(16,373,890,954)
71,185,933,189
79,404,721,958
70,156,265,170
(486,245,179,964)
28.1
2,784,656,052,320
26,503,900,000
29
(1,419,000,000,000)
(1,256,372,621,740)
28.1
(12,009,715,118)
(6,177,773,437)
Net cash flows from/(used in) operating activities
INVESTING ACTIVITIES
Fixed assets acquisition
Proceeds from sales of fixed assets
Dividend received in the year
Net cash flows from/(used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in chartered capital in cash
Dividends paid to shareholders
Other decreases
93
CONSOLIDATED CASH FLOW STATEMENTS (continued)
Net cash flows from/(used in) financing activities
Net increase in cash and cash equivalents in the year
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Prepared by:
Ms. Ngo Bich Ngoc
42
1,353,646,337,202
(1,236,046,495,177)
(15,656,580,480,103)
14,357,555,347,350
43,561,486,022,723
29,203,930,675,373
27,904,905,542,620
43,561,486,022,723
Approved by:
Approved by:
Ms. Le Thi Loi
Mr. Le Cong
Hanoi, Vietnam
28 February 2013
94
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at 31 December 2012 and for the year then ended
1. CORPORATE INFORMATION
Military Commercial Joint Stock Bank (“the Bank”) is a commercial joint stock bank incorporated and registered in the Socialist Republic
of Vietnam.
Establishment and Operations
The Bank was incorporated in accordance with Business License No. 0054/NH-GP issued by the Governor of the State Bank of Vietnam
on 14 September 1994 and Decision No. 00374/GP-UB issued by the Hanoi People’s Committee. The operational duration under the
license is fifty (50) years.
The principal activities of the Bank are to provide banking services including receiving short, medium and long-term deposits from
organizations and individuals; making short, medium and long-term loans and advances to organizations and individuals based on the
features and capability of the Bank’s capital sources; provides foreign currency exchange services, international trade finance services,
discount of commercial papers, bonds and other valuable papers, and other banking services authorized by the State Bank of Vietnam.
Charter Capital
As at 31 December 2012, the chartered capital of the Bank is VND 10,000,000,000,000 (at 31 December 2011: VND 7,300,000,000,000).
Board of Directors
The members of the Board of Directors for the year ended 31 December 2012 and at the date of these reports are as follows:
Full name
Title
Mr. Le Huu Duc
Chairman
Mr. Le Van Be
Vice Chairman
Vice Chairman
Mr. Ha Tien Dung
Member
Mr. Dau Quang Lanh
Member
Member
Member
95
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
1. CORPORATE INFORMATION ( continued)
Board of Supervision
The members of the Board of Supervision for the year ended 31 December 2012 and at the date of these reports are as follows:
Full name
Title
Ms. Pham Thi Ty
Chief
Member
Member
Mr. Le Cong Soa
Member
Board of Management
The members of the Board of Management for the year ended 31 December 2012 and at the date of these consolidated financial statements are as follows:
Full name
Title
Date of appointment
Mr. Le Cong
Mr. Dang Quoc Tien
Appointed on 7 May 2002
Mr. Do Van Hung
Appointed on 18 October 2005
Ms. Cao Thi Thuy Nga
Appointed on11 June 2007
Mr. Luu Trung Thai (*)
Appointed on15 April 2008
Mr. Hoang The Hung
Ms. Le Thi Loi
(*) Non-executive officer.
96
1.
CORPORATE INFORMATION (continued)
Location and Operation Network
The Head Office of the Bank is located at No.21 Cat Linh Street, Dong Da District, Hanoi City, Vietnam. As at 31 December 2012, the Bank
has one (01) Head Office, one (01) Operation Center, one (01) branch in the People’s Democratic Republic of Laos, one (01) branch in
the Kingdom of Cambodia, fifty three (53) branches, one hundred and eighteen (118) transaction offices, four (04) saving funds and
four (04) transaction service units located in cities and provinces throughout Vietnam. It also has five (05) subsidiaries and three (03)
associates.
Subsidiaries
As at 31 December 2012, the Bank had five (05) subsidiaries as follows:
No
Name
Industry
% owned by
the Bank
1
MB Asset Management Company Limited
(“MB AMC”)
0105281799 dated 11
December 2012 granted
by Hanoi’s Department of
Debt and asset management
100%
2
07/GPĐC-UBCK dated 14
MB Securities Joint Stock Company (the
Securities investment and
January 2013 granted by
original name was Thang Long Securities Joint
Hanoi’s Department of Plan- trading
Stock Company) (“MBS”)
ning and Investment
61.85%
3
53/UBCK-GP dated 6
MB Capital Management Joint Stock Company
November 2009 granted
(the original name was Hanoi Fund Manageby Hanoi’s Department of
ment Joint Stock Company) (“MB Cap”)
61.78%
4
Military Bank Land Joint Stock Company (MB
Land) (*)
0102631822 dated 25 October 2012 granted by Hanoi’s
Property trading
Investment
65.88%
Viet Remax Joint Stock Company (*)
0304136549 dated 8 February 2010 granted by Ho
Chi Minh city’s Department
of Planning and Investment
78.09%
5
Fund management
Office buildings and residential
construction
97
1.
CORPORATE INFORMATION (continued)
Associates
As at 31 December 2012, the Bank had three (03) associates as follows:
No Name
1
0102749334 dated 27 May
2010 granted by Hanoi’s
Vietasset Investment Joint Stock Company (*)
Investment
2
Long Thuan Loc Joint Stock Company (*)
4703000542 dated 19 May
2008 granted by Dongnai
province’s Department of
Planning and Investment.
3
Military Insurance Joint Stock Company
(“MIC”)
43GP/KDBH granted by the
Ministry of Finance on 8
October 2007
Industry
% owned by
the Bank
Construction investment
45.00%
Construction
29.65%
Non-life insurance
49.76%
Employees
As at 31 December 2012, total employees of the Bank and its subsidiaries were 5,806 persons (as at 31 December 2011: 5,098 persons).
98
2.FISCAL YEAR AND ACCOUNTING CURRENCY
2.1Fiscal year
The Bank’s fiscal year starts on 1 January and ends on 31 December.
2.2Accounting currency
Currency used in the Bank’s accounting system is Vietnam Dong.
3.
BASIS OF PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS
3.1
Statement of compliance with Vietnamese Accounting Standards and System for Credit Institutions
Management states that the accompanying consolidated financial statements have been prepared in accordance with Vietnamese
Accounting Standards and System for Credit Institutions.
3.2Applied accounting standards and regimes
The consolidated financial statements of the Bank and its subsidiaries, which are expressed in Vietnamese Dong (“VND”), are prepared
in accordance with the Accounting System for Credit Institutions required under Decision No. 479/2004/QD-NHNN issued on 29 April
2004 by the Governor of the State Bank of Vietnam which was enacted from 1 January 2005 and decisions on amendment and supplementation of Decision No. 479/2004/QD-NHNN, Decision No. 16/2007/QD-NHNN issued on 18 April 2007 by the Governor of the State
Bank of Vietnam, and Vietnamese Accounting Standards issued by the Ministry of Finance as per:
- Decision No. 149/2001/QD-BTC dated 31 December 2001 on the Issuance and Promulgation of Four Vietnamese Standards on Ac
counting (Series 1);
- Decision No. 165/2002/QD-BTC dated 31 December 2002 on the Issuance and Promulgation of Six Vietnamese Standards on Ac counting (Series 2);
- Decision No. 234/2003/QD-BTC dated 30 December 2003 on the Issuance and Promulgation of Six Vietnamese Standards on Ac
counting (Series 3);
- Decision No. 12/2005/QD-BTC dated 15 February 2005 on the Issuance and Promulgation of Six Vietnamese Standards on Accoun ing (Series 4); and
- Decision No. 100/2005/QD-BTC dated 28 December 2005 on the Issuance and Promulgation of Four Vietnamese Standards on Accounting (Series 5).
The accompanying consolidated financial statements have been prepared using accounting principles, procedures, and reporting practices generally accepted in Vietnam. Accordingly, the accompanying consolidated balance sheet, consolidated income statement, consolidated cash flow statement and notes to the consolidated financial statements, including their utilization are not designed for those
who are not informed about Vietnam’s accounting principles, procedures and practices and furthermore are not intended to present the
consolidated financial position of the Bank and its subsidiaries, the consolidated results of their operations and their consolidated cash
flows in accordance with accounting principles and practices generally accepted in countries other than Vietnam.
99
3.
BASIS OF PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
3.3
Basis of consolidation
The consolidated financial statements comprise of the financial statements of the Bank and its subsidiaries as at and for the year ended
31 December each year. The financial statements of the subsidiaries are prepared using accounting policies those are consistent with
and for the same reporting year as the Bank.
All inter-group balances, transactions, income, expenses and unrealized profits and losses resulting from intra-group transactions are
eliminated in full.
Financial statements of subsidiaries (as disclosed in Note 1) are fully consolidated from the date when control is transferred to the Bank.
The control exists when the Bank has the power to govern either directly or indirectly the financial and operating polices of an entity
to obtain benefits from its activities. The results of subsidiaries acquired or disposed of during the year are included in the consolidated
income statement from the date of acquisition or up to the date of disposal, as appropriate.
Minority interests represent the portion of net results of operations and net assets not owned, either directly or indirectly through subsidiaries, by the Bank and are presented separately in the consolidated income statement and within equity in the consolidated balance
sheet, separately from the Bank’s equity and liabilities.
3.4
Basis of assumptions and uses of estimates
The preparation of the consolidated financial statements requires the Board of Management to make estimates and assumptions that
affect the reported amount of assets, liabilities and disclosure of contingent liabilities. These estimates and assumptions also affect the
income and expenses and the resultant provisions. Such estimates are necessarily based on assumptions involving varying degrees of
subjectivity and uncertainty and actual results may differ resulting in future changes in such provision.
Going concern
The Bank’s Board of Management assessed the Bank’s ability to continue as a going concern and found that the Bank has sufficient
resources to continue its operation in the certain future. Furthermore, the Board of Management did not notice any material uncertainty
which can affect the Bank’s ability to continue as a going concern. Therefore, these consolidated financial statements are prepared on
the going concern basis.
100
4.
SIGNIFICANT ACCOUNTING POLICIES
4.1
Cash and cash equivalents
Cash and cash equivalents comprise cash, gold, jewelries, gemstones, current accounts at the SBV, Government bills and other short-term valuable papers eligible for rediscount with the SBV; current deposits, placements with and loans to other banks and securities
that are within 3 months of maturity when acquired at transaction date, which are readily convertible into known amounts of cash and
subject to an insignificant risk of change in value.
4.2Loans and advances to customers
Loans and advances to customers are presented at the principal amounts outstanding at the end of the financial year.
4.3
Provision for credit losses
4.3.1Loans to customers of the Bank
4.3.1.1
Provision for credit losses in Vietnam’s market
Loans classification
In accordance with the Law on Credit Institutions No. 47/2010/QH12 effective from 1 January 2011, Decision No. 1627/2001/QD-NHNN
dated 31 December 2001 by the Governor of the State Bank of Vietnam on the issuance of lending regulations for Credit institutions, Decision No. 127/2005/QD-NHNN dated 3 February 2005 amending and supplementing a number of lending regulations under Decision
No. 1627/2001/QD-NHNN, Decision No. 493/2005/QD-NHNN dated 22 April 2005 and Decision No. 18/2007/QD-NHNN dated 25 April
2007 issued by the State Bank of Vietnam on loan classification and appropriation, setting up and use of reserves for handling credit
risks, the Bank is required to classify loans and create provisions for credit losses. Accordingly, loans are graded using the following risk
classifications: Current, Special Mention, Substandard, Doubtful and Loss based on the payment arrears status and other qualitative
factors.
Loans in Substandard, Doubtful or Loss group are defined as non-performing loans.
Since 2008, the Bank registered and obtained the approval from the SBV in the Official Letter No. 8738/NHNN-CNH dated 25 September
2008 to apply its internal credit scoring system for loan classification in accordance with Article 7 of Decision No. 493/2005/QD-NHNN.
Accordingly, the Bank’s loans to customers are assessed and classified based on both qualitative and quantitative factors.
101
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.3
Provision for credit losses (continued)
4.3.1Loans to customers of the Bank (continued)
4.3.1.1
Provision for credit losses in Vietnam’s market (continued)
Loans classification (continued)
Accordingly, Loans are classified based on risk levels as follows:
No
Rating
Group
Description
1
AAA
Group 1
Current
2
AA
Group 1
Current
3
A
Group 1
Current
4
BBB
Group 2
Speacial Mention
5
BB
Group 2
Speacial Mention
6
B
Group 3
Substandard
7
CCC
Group 3
Substandard
8
CC
Group 4
Doubtful
9
C
Group 4
Doubtful
10
D
Group 5
Loss
On 23 April 2012, the State Bank of Viet Nam issued the Decision No.780/QD-NHNN regulating the classification for loans which are
rescheduled or extended. Accordingly, the Bank has revised or extent the schedule for customers whose businesses are tending to be
positive and have ability to repay on due after being rescheduled or extended as per the Bank’s assessment. These customers are classified the same as they were previously classified.
102
4.3.1.1
Provision for credit losses in Vietnam’s market (continued)
Specific provision
Net loans and advances exposure for each borrower is calculated by subtracting from the discounted value of collateral from the loan
balances in accordance with Decision No. 493/2005/QD-NHNN and Decision No. 18/2007/QD-NHNN which stipulate specific discount
rates for certain accepted collaterals. Specific provision is created on the net loans and advances exposure of each borrower using fixed
provision rates are as follows:
GroupNameSpecific provision rate
1
Current
0%
2Special Mention5%
3
Substandard
20%
4
Doubtful
50%
5
Loss
100%
General provision
According to Decision No. 493/2005/QD-NHNN, a general provision is made for credit losses which are yet to be identified during the
loan classification and provision process and for the Bank’s potential financial difficulties due to deterioration in loan quality. Accordingly, the Bank is required to fully create and maintain a general provision at 0.75% of total loans those are classified in groups 1 to 4. As
at 31 December 2012, the Bank has fully created a general provision at 0.75% of total loans to customers those are classified in groups
1 to 4.
Use of provisions
The provisions are recorded in the consolidated income statement as an expense and shall be utilized to write off bad debts. According
to Decision No. 493/2005/QD-NHNN, at the discretion of the Bank’s Bad Debt Resolution Committee, the Bank can write off the loans
that are classified in Group 5 or loans that the borrowers are bankrupted or has been liquidated (for corporate entities) or are dead or
missing (for individuals).
In accordance with Decision No. 493/2005/QD-NHNN dated 22 April 2005 issued by the State Bank of Vietnam, the Bank’s general
provision and specific provision for the year ended 31 December 2012 are created based on outstanding loan balances at 30 November
2012.
103
4.
4.3
Provision for credit losses (continued)
4.3.1.2 Provision for credit losses in Lao People’s Democratic republic’s market
In accordance with Decision No. 324/BOL (“BOL324”) issued by the Bank of Lao P.D.R on 19 April 2011, the Bank’s branch in Lao People’s
Democratic Republic (“the Branch”) is required to classify loans and create provision for loans to customers. Accordingly, loans are
classified as to Performing loans or Non-performing loans based on the payment arrears status and other qualitative factors. Loans
classified as either Current, or Special Mention are defined as performing loans. Loans classified as either Substandard or Doubtful or
Loss are defined as Non-performing loans.
According to Decision No. 324/BOL, it is not required to create specific provision for Performing loans. Specific provision for non-performing loans is established by multiplying the outstanding balance of each loan item with the provision rates applicable to each group
as follows:
GroupCategoryProvision rate
3
Substandard
20%
4
Doubtful
50%
5
Loss
100%
In accordance with BOL324, apart from specific provision, a general provision is created for loans which are classified as “Performing
loans”. Accordingly, the Branch is required to create a general provision for loan losses at the rate 3.00% of the total balance of Special
Mention loans as at the consolidated balance sheet date and general provision made for Current loans shall be based on the BOL’s notification for each period. For the year ended 31 December 2012, the general provision rate for Current loans was 0.5% in accordance with
Official letter No. 242/BOL issued by the Bank of the Lao PRD on 2 April 2011 as this Letter is still effective for the year 2012.
104
4.3.1.3 Provision for credit losses in Kingdom of Cambodia’s market
Provision for credit losses are created for specific risks related to loans and advances that are seperatedly reviewed and specifically
classified at risk levels such as: Current, Special Mention, Substandard, Doubtful and Loss. Provision exposure is based on the percentage
of outstanding balance of loans (excluding accrued interest) and advances.
The Bank has classified its loans and created provision in accordance with Prakas No.B7-09-074 dated 25 February 2009 issued by the
National Bank of Cambodia. Accordingly, the Bank divided catagories of loans into five groups. Specific provision rates and catagorizing
loans are as follow:
Name
Overdue days
Rate of provision
Special Mention
from 30 days to under 90 days
3%
Substandard
20%
Doubtful
50%
above 360 days
100%
Loss
The Bank is required to create a general provision for loan losses at the rate of 1.00% of the total balance of Current loans (overdue
under 30 days),
A loan or a part of the unrecoverable loan will be written off after deducting recoverable value of collateral, if any, when the management
decides that loan inrecoverable.
4.3.2Receivables from customers related to securities transactions, financial support, advances to customers of MB Securities
Joint Stock Company (“MBS”), a subsidiary of the Bank
The receivables are subject to review for provision based on overdue period or projected loss that are possibly incurred for in-due
receivables but the debtors are bankrupted or in the process of liquidation (for corporate entities) or are missing, under legal
prosecution, trial or serving sentences or dead (for individuals). The provision rates for doubtful receivables in accordance with Circular
No. 228/2009/TT-BTC dated 7 December 2009 by the Ministry of Finance are as follows:
Overdue status
Provision rate
From six (06) months to less than one (01) year
30%
From one (01) year to less than two (02) years
50%
From two (02) years to less than three (03) years
70%
From three (03) years and above
100%
105
4.
4.4Trading securities
Trading securities include debt, equity and other securities purchased by the Bank and its subsidiaries that are intended to be sold in a
short time to benefit from arbitrage opportunities.
Trading securities are recognized at cost at the transaction date and always reflected at cost subsequently.
Interest income from trading securities is recognized on cash basis in the consolidated income statement.
Trading securities are subject to review for impairment at the consolidated balance sheet date. Provision for impairment of trading
securities is recorded when their market value is lower than their historical cost as stipulated in Circular No. 228/2009/TT-BTC dated
7 December 2009. In case the market values of the securities cannot be determined, no provision is calculated. The provision for
devaluation is recognized in the consolidated statement as “Net gain/(loss) from trading securities, investment securities and longterm investments”.
4.5Investment securities
4.5.1
Held-to-maturity investment securities are debt securities that the Bank purchases for investment purpose in order to gain interest
and the Bank has intention and ability to hold the securities until maturity. Held-to-maturity investment securities have fixed or
determinable payments and fixed maturities. In case the securities are sold before maturity, the remaining portfolio will be reclassified
to trading securities or available-for-sale investment securities.
Held-to-maturity investment securities are initially recognized at par value as at the transaction date. Accumulative interest income
before the purchasing date (for debt securities with interest payment in arrears) or interest income received upfront (for debt securities
with interest payment in advance) are recorded in a separate account. Any discount or surplus which is the difference between par
value and the amount equal to par value plus (+) accumulative interest income before purchasing date (if any) or minus (-) interest
income received upfront waiting for amortization (if any) is also recorded in a separate account.
In subsequent years, held-to-maturity investment securities are recognized at par value and discount or surplus (if any) is amortized in
the consolidated income statement using the straight-line method over the estimated remaining term of securities. Interest payment in
arrears is recorded as follows: accumulative interest income before purchasing date is recorded as a decrease in value of such securities
and the same amount is credited into the accrued interest; accumulative interest income after purchasing date is recognized as the
Bank’s income based on the accumulated method. Interest is accrued and recognized into the consolidated income statement using
the straight-line method.
Periodically, held-to-maturity investment securities are subject to review for impairment at the consolidated balance sheet date.
Provision for impairment of trading securities is recorded when their market value is lower than their historical cost as stipulated in
Circular No. 228/2009/TT-BTC dated 7 December 2009. In case the market values of the securities cannot be determined, no provision
is calculated. The provision for devaluation is recognized in the consolidated income statement as “Net gain/(loss) from trading
securities, investment securities and long-term investments”.
106
4.5Investment securities
4.5.2Available-for-sale investment securities
Available-for-sale investments securities include debt and equity securities that the Bank holds for investment purpose and that are
ready for sale. These securities are not frequently traded but could be sold at any time once they are profitable, and the Bank is neither
the founding shareholder/strategic partner nor capable of controlling, to some extent, the process of initiating and approving financial
and operational policies of the investee by a written agreement on delegating its representatives to take part in the Board of Directors/
Board of Management.
Equity available-for-sale securities are initially recognized at cost and subsequently carried at cost.
Debt available-for-sale securities are initially recognized at par value as at the transaction date. Accumulative interest income before
the purchasing date (for debt securities with interest payment in arrears) or interest income received upfront (for debt securities with
interest payment in advance) are recorded in a separate account. Any discount or surplus which is the difference between par value
and the amount equal to par value plus (+) accumulative interest income before purchasing date (if any) or minus (-) interest income
received upfront waiting for amortization (if any) is also recorded in a separate account.
In subsequent years, debt available-for-sale securities are recognized at par value and discount or surplus (if any) is amortized in the
consolidated income statements using the straight-line method over the estimated remaining term of securities. Interest payment in
arrears is recorded as follows: accumulative interest income before purchasing date is recorded as a decrease in value of such securities and the same amount is credited into the accrued interest; accumulative interest income after purchasing date is recognized as the
Bank’s income based on the accumulated method. Interest is accrued and recognized into consolidated income statement using the
straight-line method.
Periodically, available-for-sale securities are subject to review for impairment at the consolidated balance sheet date. Provision
for impairment of trading securities is recorded when their market value is lower than their historical cost, as stipulated Circular No.
228/2009/TT-BTC dated 7 December 2009. In case the market values of the securities cannot be determined, no provision is calculated. The provision for devaluation is recognized in the consolidated income statement as “Net gain/loss from trading securities,
investment securities and long-term investment”.
4.6Repurchase and reverse repurchase agreements
Securities sold under agreements to repurchase at a specific date in the future are not derecognized from the consolidated financial
statements. The corresponding cash received is recognized in the consolidated balance sheet as a liability. The difference between the
sale price and repurchase price is amortized to the consolidated income statement over the term of the agreement using the interest
rate stipulated in the contract.
Conversely, securities purchased under agreements to resell at a specific date in the future are not recognized in the consolidated
financial statements. The corresponding cash payment is recognized in the consolidated balance sheet as an asset. The difference
between the purchase price and resale price is amortized to the consolidated income statement over the term of the agreement using
the interest rate stipulated in the contract.
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4.
4.7Investments in associates
According to the 2010 Law of Credit Institutions which has been effective since 1 January 2011, an associate of a credit institution is a
company or group in which the credit institution or the credit institution and any related entity owns more than 11% of charter capital or
more than 11% of voting rights, it is not a subsidiary of the credit institution.
Investments in associates are accounted for using the equity method of accounting. An associate is an entity in which the Bank and its
subsidiaries have significant influence and which is neither a subsidiary nor a joint venture.
Under the equity method, the investment is initially recognized at cost and its book value might increase or decrease reflecting the
Bank’s share in net asset of the associate. The loss incurred exceeding investment cost is recorded only when the Bank bears corresponding obligation. The Bank’s share in net profit of the associate is recognized in to the consolidated income statement. Any direct
change in owners’ equity of associate is recognized in the Bank’s consolidated balance sheet at the amount reflecting the Bank’s share
in the changes. Net gain/loss from transactions between the Bank and its associates is net-off based on the capital contributions of
each side.
Financial statements of associates, for consolidated purposes under equity method of accounting, are of the same period and
consistent to the Bank’s accounting policies applied to the same transactions or events in equivalent conditions.
4.8Other long-term investments
Other long-term investments are investments in other entities in which the Bank and its subsidiaries holds less than 11% of voting rights
and the Bank and its subsidiaries are the founding shareholder; or strategic partner; or the Bank and its subsidiaries can have certain
influence on the entity’s financial and operational policies under written agreement on delegating its representatives to take part in the
Board of Directors/Management.
Other long-term investments are carried at cost as at the transaction date, and continuously carried at cost minus (-) amortization (if
any) in the subsequent holding periods.
Other long-term investments are subject to review for impairment. Provision for impairment is recognized in the consolidated income
statement when the market value is lower than carrying value of investment securities and there is objective evidence on long-term
impairment of initial investments.
Other long-term investments are subject to review for impairment at the consolidated financial statement date. Provision is made
when the business entities invested incur losses (unless losses were previously projected in the business plan) in accordance with
Circular No. 228/2009/TT-BTC dated 7 December 2009 issued by the Ministry of Finance. Provision for each investment is calculated as
the difference between the actual contributed capital of all owners in the business entities and the outstanding equity of the business
entities multiplying by (x) the proportion of capital contributed by the Bank and its subsidiary in the business entities.
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4.
4.9Fixed tangible assets
Fixed tangible assets are stated at cost less accumulated depreciation.
The cost of a fixed tangible asset comprises its purchase price plus any directly attributable costs of bringing the asset to working condition for its intended use.
Cost related to additions, improvements and renewals are added directly to the value of the fixed assets while expenditures for maintenance and repairs (if any) are charged to the consolidated income statement.
When tangible assets are sold or liquidated, their cost and accumulated depreciation are deducted from the consolidated balance sheet
item and any gains or losses resulting from their disposal are recorded to the consolidated income statement.
4.10Fixed intangible assets
Fixed intangible assets are stated at cost less accumulated amortization.
The cost of a fixed intangible asset comprises its purchase price the Bank and its subsidiaries expended plus any directly attributable
costs of bringing the asset to working condition for its intended use.
Expenditures for additions, improvements and renewals are capitalized and expenditures for maintenance and repairs are charged to
the consolidated income statement.
When intangible assets are sold or liquidated, their cost and accumulated depreciation are deducted from the consolidated balance
sheet item and any gains or losses resulting from their disposal are recorded to the consolidated income statement.
4.11
Depreciation and amortization
Depreciation and amortization of tangible fixed assets and intangible assets is calculated on a straight-line method over the estimated
useful lives of the assets, which are as follows
Buildings and building improvements
6 - 25 years
Machinery and equipment
3 - 4 years
Means of transportation
6 years
Other tangible fixed assets
4 years
Computer software
3 years
Other intangible fixed assets
3 years
Cost of land use rights is not amortized if it is granted by the Government of Vietnam with indefinite term. Cost of land use rights with
definite term is amortized over the lease term.
109
4.
4.12Investment properties
Investment property is property held by the Bank and its subsidiaries to earn rentals or for capital appreciation or both. An investment
property is initially measured at cost including transaction costs and subsequently is measured at cost less accumulated depreciation.
Depreciation of investment property is recorded to “Other operating expenses” in the consolidated income statement.
Cost of land use rights is not amortized if it is granted by the Government of Vietnam with indefinite term. Cost of land use rights with
definite term is amortized over the lease term.
4.13Recognition of income
4.13.1Recognition of income from banking business activities
Interest income
Interest income is recognized in the consolidated income statement on an accrual basis. The recognition of interest income is suspended when loans and advances become impaired, which occurs when a loan is classified in groups 2 to 5 according to criteria set in
Decision No. 493/2005/QD-NHNN and Decision No. 18/2007/QD-NHNN issued by the State Bank of Vietnam. Accrued interest income
of impaired loans and advances is recorded in off-balance sheet and is only recognized in the consolidated income statement when it
is actually received.
Fees and commissions
Fees and commissions are recognized when the services are completed
4.13.2Recognition of revenues from other activities
Revenue from securities brokerage activities
Where the contract outcome can be reliably measured, revenue is recognised by reference to the stage of completion. Where the
contract outcome cannot be reliably measured, revenue is recognised only to the extent of the expenses recognised which are recoverable.
Revenue from trading of securities
Revenue from trading of securities is determined by the difference between the selling price and the weighted average cost of securities sold.
Revenue from Repo transactions
Revenue is recognised in the income statement according to the time of the repo contract using the straight line method.
Fees from investment portfolio management service
Fees from investment portfolio management service is recognized on an accrual basis upon the conditions and terms of the investment
management contract.
110
4.
4.13Recognition of income (continued)
4.13.2Recognition of revenues from other activities (continued)
Rental income
Rental income arising from operating leases is accounted for in the consolidated income statement on a straight line basis over the
terms of the lease.
Revenue from other services
Where the contract outcome can be reliably measured, revenue is recognised by reference to the stage of completion. Where the
contract outcome cannot be reliably measured, revenue is recognised only to the extent of the expenses recognised which are recoverable.
Dividends
Income is recognised when the Bank and its subsidiaries’ entitlement as an investor to receive the dividend is established, except for
dividend received in shares which only the number of shares is updated.
4.14Foreign currency transactions
The Bank and its subsidiaries maintain its accounting system and record all transactions in original currencies. Monetary assets and
liabilities denominated in foreign currencies at year end are translated into VND using the average interbank rates at the consolidated
balance sheet date (see list of exchange rates of applicable foreign currencies against VND as at 31 December in Note 50). Income and
expenses arising in foreign currencies during the year are converted into VND at rates ruling on the transaction dates. Foreign exchange
differences arising from the translation of monetary assets and liabilities are recognized” in the consolidated income statement.
4.15Enterprise income taxes
Current tax
Current tax assets and liabilities for the current and prior year are measured at the amount expected to be paid to (or recovered from)
the taxation authorities. The tax rates and tax laws are applied and enacted at the consolidated balance sheet date.
Current tax is recognized in the consolidated income statement, except current tax arises from an item that recognized directly in equity, in this case, current tax is recognized directly in equity.
Current tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and the Bank intends to settle its current tax assets and liabilities on a net basis.
The Bank’s tax returns are subject to examination by the tax authorities. Because the applicability of tax laws and regulations too many
types of transactions and susceptible to various interpretation, amounts reported in the consolidated financial statements could be
changed at a later date upon final determination by the tax authorities.
111
4.
4.15Enterprise income taxes (continued)
Deferred tax
Deferred tax is provided on temporary differences between the tax base of assets and liabilities and their carrying amount for financial
reporting purpose at the consolidated balance sheet date.
Deferred tax liabilities are recognized for all taxable temporary differences, except:
- Where the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction affects neither the accounting profit nor taxable profit or loss.
- In respect of taxable temporarily differences associated with investments in subsidiary and associates, and interests in joint
ventures where timing of the reversal of the temporary difference can be controlled and it is positive that the temporary difference will
not reverse in the foreseeable future.
Deferred corporate income tax assets are levied on deductible temporary differences, deductible amounts carried over to subsequent
years of taxable losses, and unutilized tax advantages when it is likely that the corporate makes earnings in foreseeable future to use
deductible temporary differences, taxable losses and tax advantages, except:
- Where the deferred tax asset arises from the initial recognition of an asset or liability in a transaction which at the time of the
transaction affects neither the accounting profit nor taxable profit or loss.
- In respect of deductible temporarily differences associated with investments in subsidiary and associates, and capital investments, deferred tax assets are recognized only to the extent that it is positive that the temporary difference will reverse in the
foreseeable future and taxable profits will be available against which the temporary differences can be utilized.
The carrying amount of deferred income tax assets is reviewed at the end of each accounting year and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Unrecognized deferred
income tax assets are reassessed at each consolidated balance sheet date and are recognized to the extent that it has become probable
that future taxable profit will allow the deferred tax assets to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset realized
or the liability is settled based on tax rates and tax laws that have been enacted at the consolidated balance sheet date.
Deferred tax is charged or credited to the consolidated income statement, except when it relates to items recognized directly to equity,
in which case the deferred tax is also directly recorded in the equity account.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxable entity and the same taxation authority and the Bank intends
to settle its current tax assets and liabilities on a net basis.
112
4.
4.16
Provision for off-balance-sheet commitments
According to SBV’s Decision No. 493/2005/QD-NHNN and SBV’s Decision No. 18/2007/QD-NHNN, credit institutions must classify and
make provision for guarantees, payment acceptances, and non-cancelable loan commitments with specific effective date (generally
called off-balance-sheet commitments) into groups under the Bank’s internal credit rating system. Accordingly, the off-balance-sheet
commitments are grouped into Current, Special Mention, Substandard, Doubtful and Loss based on the overdue status and other qualitative factors, except for letters of credit for national defense purposes. According to Official letter No. 941/NHNN-TTGSNH dated 27
May 2010 issued by the State Bank of Vietnam, commercial letters of credit for national defense purposes or letters of guarantee for
importing equipment for national defense and national security purpose are not subject to the regulations on lending limits and provision issued by the State Bank of Vietnam.
Specific and general provision for off-balance-sheet commitments is calculated similarly to the provision for loans and advances to customers as described in Note 4.3.1.1 Provision expense is recorded as “Provision for off-balance sheet commitments” in the consolidated
income statement and provision balance is recorded in other liabilities in the consolidated balance sheet.
4.17Fiduciary assets
Assets held in a fiduciary capacity are not reported in the consolidated financial statements as they are not assets of the Bank and its
subsidiaries.
4.18Derivatives
Currency forwards and swaps
For currency forwards and swaps, the difference between value in Vietnam Dong of the foreign currencies committed to buy/sell translated at the forward rate and at the spot rate at the effective contract date is initially recognized as an asset - “Derivatives and other
financial assets” if the difference is positive and as a liability - “Derivatives and other financial liabilities” if the difference is negative.
This difference is subsequently amortized on a straight-line basis to “Net gain/(loss) from foreign currencies trading” over the contract
period. Foreign exchange differences arising from the translation of monetary assets and liabilities are recognized to “Foreign currency
translation reserve” in the consolidated balance sheet and shall be recognized to the consolidated income statement at the end of the
fiscal year in accordance with Decision No. 479/2004/QD-NHNN dated 29 April 2004 issued by the State Bank of Vietnam.
4.19Offsetting
Financial assets and financial liabilities are offset and the net amount reported in the consolidated balance sheet if, and only if, there is
a currently enforceable legal right to offset financial assets against financial liabilities or vice-versa, and there is an intention to settle
on a net basis, or to realize the asset and settle the liability simultaneously.
113
4.
4.20Account receivables
Account receivables other than receivables from credit activities of the Bank are initially recorded at cost and always carried
at cost subsequently.
Provision for impairment loss is made based on the overdue status of the receivable or estimated possible loss in case the receivable
is not yet overdue but the debtors are bankrupted or liquidated (for corporate entities) or are dead, missing or under legal claim (for
individual). Provision expense is recorded in “Operating expenses” in the year.
The Bank and its subsidiaries have provided provision for doubtful receivables in accordance with Circular No. 228/2009/TT-BTC dated
7 December 2009 issued by the Ministry of Finance. Accordingly, the provision rates per doubtful receivables are as follows:
Overdue status
Rate of provision
From over six (06) months up to one (01) year
30%
From one (01) year to two (02) years
50%
From two (02) years to three (03) years
70%
From three (03) years and above
100%
114
4.
4.21Employee benefits
4.21.1
Post-employment benefits
Post-employment benefits are paid to retired employees of the Bank by the Social Insurance Agency which belongs to the Ministry
of Labor, Invalids and Social Affairs. The Bank is required to contribute to these post employment benefits by paying social insurance
premium to the Social Insurance Agency at the rate of 17% of an employee’s basic salary on a monthly basis. Besides, the Bank has no
further obligation.
4.21.2
Voluntary resignation and retrenchment benefits
Voluntary resignation benefits: The Bank has the obligation, under Section 42 of the Vietnam Labor Code amended on 2 April 2002, to
pay allowance arising from voluntary resignation of employees, equal to the aggregate amount of one-half month’s salary for each
year of employment plus salary allowances (if any) up to 31 December 2008. From 1 January 2009, the average monthly salary used
to calculate the voluntary resignation benefits would be adjusted at the end of the reporting date based on the average of the salaries
of the previous six consecutive months.
Retrenchment benefits: The Bank has the obligation, under Section 17 of the Vietnam Labor Code, to pay allowance to employees who
are retrenched as a result of organizational restructuring or technological changes. In such case, the Bank shall pay to employees an allowance for loss of work equivalent to the aggregate amount of one month’s salary for each year of employment, but no less than two
months’ salary. Increase or decrease provision balance will be recorded in operating expenses of the year.
While the obligations under Sections 17 and 42 are compulsory, the implementation of these sections is subject to detailed guidance
issued by the Ministry of Finance in implementing circulars. In accordance with Circular No. 64/1999/TT-BTC dated 7 June 1999 and Circular No. 82/2003/TT-BTC dated 14 August 2003 by the Ministry of Finance which superseded the Circular No. 64/1999/TT-BTC, banks
are required to create retrenchment fund equivalent to 3% per annum on the basic salary of the employees. Moreover, the outstanding
balance of the retrenchment fund which equals to 10% of the profit after tax after being deducted by the capital supplementary reserve
fund in accordance with Circular No. 64/1999/TT-BTC has been transferred to the unemployment insurance fund according to Circular
No. 82/2003/TT-BTC. Accordingly, the Bank had provided provision for retrenchment benefits at rates of 1 - 3% up to 31 December
2011.
In 2012, as required by Circular No. 180/2012/TT-BTC dated 24 October 2012, the Bank ceased to make provision for retrenchment
allowance and reversed the remaining balance to other income. The Bank has also made provision for severance allowance in accordance with the Labor Code and based on the actual severance allowance used in the past years.
4.21.3
Unemployment insurance fund
In accordance with Circular No. 04/2009/TT-BLDTBXH providing guidance on implementation of Decree No. 127/2008/ND-CP, effective from 1 January 2009, the Bank has the obligation to contribute to the unemployment insurance fund at the amount equal to 1.00%
of their insured employees’ salaries and remunerations. The Bank withholds 1.00% from the insured employees’ salaries and remunerations to contribute to the Fund.
115
5.
CASH AND CASH EQUIVALENTS ON HAND
Cash on hand in VND
Cash on hand in foreign currencies
6. 31 December 2012
VND
31 December 2011
VND
693,527,303,714
753,773,593,670
171,415,478,179
163,644,277,142
864,942,781,893
917,417,870,812
BALANCES WITH THE STATE BANKS
31 December 2012
VND
31 December 2011
VND
Balances with the State Bank of Vietnam
5,915,702,931,797
5,273,793,351,876
- In VND
5,316,155,663,325
2,581,377,887,300
599,547,268,472
2,692,415,464,576
Balances with the Bank of Lao P.D.R
131,532,704,585
6,574,328,633
Balances with the Bank of the Kingdom of Cambodia
191,822,608,320
748,724,944,000
6,239,058,244,702
6,029,092,624,509
- In foreign currencies
Balances with the State Bank of Vietnam include settlement and compulsory deposits. Compulsory deposits are calculated at the beginning of every month and adjusted monthly based on average balances of demand and term customer deposits of prior month. The
compulsory deposits are computed at 3.00% for demand deposits and deposits with terms of less than 12 months in VND, 8.00% for
demand deposits and deposits with terms of less than 12 months in USD, 1.00% for term deposits over 12 months in VND and 6.00% for
deposits with terms of over 12 months in foreign currencies. Accordingly, total average compulsory deposits (in both VND and foreign
currencies) in December 2012 were amounted to VND 1,765,446,628,600.
In 2012, the Bank has complied with regulations of the State Bank of Vietnam regarding compulsory deposits.
Balances with the Bank of Lao P.D.R (the “BOL”) include the margin deposit of the Bank to establish its branch in Lao People’s Democratic Republic and compulsory deposits maintained in accordance with the BOL’s requirement. The compulsory reserve rate is computed
at 0% for demand deposits and deposits with terms of over 12 months, 5% for demand deposits and deposits with terms of less than 12
months in LAK and 10% for term deposits of less than 12 months in foreign currency. The margin deposit at the BOL is free of interest.
Balances with the Bank of the Kingdom of Cambodia include the margin deposit of the Bank to establish its branch in the Kingdom of
Cambodia and compulsory deposits maintained in accordance with the Bank of the Kingdom of Cambodia’s requirement. The compulsory reserve rate is computed based on daily average deposit balance, at 8% for demand deposits and deposits with terms in Riels and
12% for demand deposits and deposits in foreign currency. Reserve of 8% in Riels is non-interest, 12% of reserve in foreign currency
includes 8% non-interest and the remaining 4% has interest according to the rates ruled by Prakas about recognising interest for term
deposits.
116
7. DUE FROM BANKS
31 December 2012
VND
31 December 2011
VND
18,345,651,101,518
41,056,573,671,267
410,496,087,263
639,847,388,468
17,694,335,400
195,583,425,675
- In foreign currencies and gold
392,801,751,863
444,263,962,793
Term deposits at other banks (*)
17,935,155,014,255
40,416,726,282,799
- In VND
11,063,412,500,000
28,291,888,113,467
6,871,742,514,255
12,124,838,169,332
24,759,337,400,000
610,190,000,000
- In VND
18,535,931,000,000
610,190,000,000
- In foreign currencies, gold
6,223,406,400,000
-
(162,605,571,688)
-
42,942,382,929,830
41,666,763,671,267
Deposits with other banks
In which:
Demand deposits
- In VND
Provision for loans to other banks
(*): Term deposit contracts signed before 1 September 2012.
Breakdown of debt classification as at 30 November 2012 and provisions for loans to other banks according to Decision No.
493/2005/QĐ-NHNN are as follows:
Classification
VND
Specific provision
VND
General provision
VND
Total provision
VND
Current
21,680,742,891,737
-
162,605,571,688
162,605,571,688
Special mention
-
-
-
-
Substandard
-
-
-
-
Doubtful
-
-
-
-
Loss
-
-
-
-
21,680,742,891,737
-
162,605,571,688
162,605,571,688
117
7. DUE FROM BANKS (continued)
Interest rates applied for term deposits with other banks during the year are as follows:
Term deposits at other banks in VND
Term deposits at other banks in foreign currencies
2012
% per annum
2011
% per annum
2.00% - 15.00%
9.00% - 16.00%
0.01% - 5.50%
0.10% - 5.00%
0.01% - 14.00%
14.00% - 20.00%
8.TRADING SECURITIES
Trading securities as at 31 December are as follows:
31 December 2012
VND
31 December 2011
VND
Listed
-
-
Unlisted
-
-
Listed
469,172,162,316
668,157,300,186
Unlisted
21,750,965,806
526,149,237,130
490,923,128,122
1,194,306,537,316
(261,185,208,167)
(368,110,099,735)
229,737,919,955
826,196,437,581
Debt securities
Equity securities
Provision for impairment on trading securities (see Note 13.1)
118
9.
LOANS AND ADVANCES TO CUSTOMERS
31 December 2012
VND
31 December 2011
VND
73,387,872,489,910
57,799,883,657,251
Discounted bills and valuable paper loans
315,587,893,186
106,684,964,156
Trust loans
186,539,704,317
201,504,544,500
22,000,501,304
-
73,912,000,588,717
58,108,073,165,907
566,563,748,655
936,763,783,523
74,478,564,337,372
59,044,836,949,430
Loans to customers of the Bank
Loans to domestic business entities, individuals
Payment for customers
Receivables from customers of MBS
Reverse repo contracts, financial supports and advances to customers
Interest rates applied for loans and advances to customers during the year are as follows:
2012
% per annum
2011
% per annum
11.50% - 15.00%
17.00% - 21.00%
4.00% - 7.00%
6.00% - 8.00%
31 December 2012
VND
31 December 2011
VND
Current
69,511,713,622,359
54,766,210,711,015
Special mention
3,028,648,556,707
2,404,479,643,584
Substandard
299,126,568,876
305,546,028,095
Doubtful
432,905,189,665
111,310,138,603
Loss
639,606,651,110
520,526,644,610
73,912,000,588,717
58,108,073,165,907
Commercial loans and advances in VND
Commercial loans and advances in foreign currencies
9.1
Analysis of loans to customers by quality
119
566,563,748,655
936,763,783,523
74,478,564,337,372
59,044,836,949,430
31 December 2012
VND
31 December 2011
VND
53,084,756,796,292
38,929,021,417,381
Medium-term loans
12,262,555,315,981
11,640,911,718,714
Long-term loans
8,564,688,476,444
7,538,140,029,812
73,912,000,588,717
58,108,073,165,907
566,563,748,655
936,763,783,523
74,478,564,337,372
59,044,836,949,430
9.2
Analysis of loans and advances to customers by original terms
Short-term loans
120
9. LOANS AND ADVANCES TO CUSTOMERS (continued)
9.3 Analysis of loans and advances to customers by ownership and types of customers
31 December 2012
VND
%
31 December 2011
VND
%
63,314,131,935,344
85.02
49,056,249,629,613
83.08
State-owned enterprises
2,453,077,962,975
3.29
2,997,823,194,476
5.08
One-member limited 100% state-owned enterprises
3,517,790,440,836
4.72
2,104,008,581,824
3.56
895,725,214,124
1.20
1,115,430,743,396
1.89
22,190,943,601,223
29.80
16,677,188,030,357
28.24
2,128,349,847,755
2.86
2,054,324,996,678
3.48
30,385,943,197,461
40.80
22,836,360,734,256
38.68
226,500,000
0.00
460,500,000
0.00
1,024,795,003,860
1.38
767,938,359,481
1.30
586,120,792,209
0.79
400,618,633,577
0.68
131,159,374,901
0.18
102,095,855,568
0.17
Individual loans
9,173,114,842,524
12.3
8,066,833,284,790
13.66
Household business, individuals
9,173,114,842,524
12.32
8,066,833,284,790
13.66
Other loans
400,637,927,775
0.54
219,564,264,529
0.37
78,294,579,633
0.11
57,855,978,047
0.10
322,343,348,142
0.43
161,708,286,482
0.27
1,024,115,883,074
1.38
765,425,986,975
1.30
Corporate loans
933,443,681,626
1.25
759,304,868,400
1.29
Individual loans
90,672,201,448
0.12
6,121,118,575
0.01
73,912,000,588,717
99.26
58,108,073,165,907
98.41
566,563,748,655
0.74
936,763,783,523
1.59
74,478,564,337,372
100
59,044,836,949,430
100
Corporate loans
Two or more member limited companies in which the State’s
holding percentage is 50% or more
Other limited companies
Joint stock companies in which the State’s holding percentage is 50% or more
Other joint stock companies
Partnership companies
Private companies
Foreign invested enterprises
Cooperatives, cooperative unions
Administrative units, parties, unions and associations
Others
Loans to customers of the foreign branches
Reverse repo contracts, financial supports and advances to
customers
121
9. LOANS AND ADVANCES TO CUSTOMERS (continued)
9.4Analysis of loans and advances to customers by industrial sectors
31 December 2012
VND
%
4,794,181,415,452
6.44
3,559,256,625,005
6.03
Mining and quarrying
3,439,662,822,956
4.62
2,929,577,969,152
4.96
Manufacturing and processing
16,873,464,766,071
22.66
12,986,414,185,329
21.99
8,614,624,795,351
11.57
5,539,063,311,722
9.38
1,100,000,000
0.00
612,700,000
0.00
Construction
7,035,409,608,734
9.45
4,606,825,475,246
7.80
Wholesale and retail trade; repair of motor vehicles, motor
cycles
16,150,517,176,182
21.68
13,622,447,428,926
23.07
Transport, warehouse
3,470,847,706,571
4.66
3,746,642,127,511
6.35
116,682,589,336
0.16
124,163,862,874
0.21
2,069,284,671,877
2.78
2,169,944,557,960
3.68
225,967,145,623
0.30
257,708,336,158
0.44
5,478,216,338,136
7.36
5,191,135,640,105
8.79
Science and technology
224,722,417,814
0.30
112,684,097,440
0.19
Administrative activities and supporting service
306,822,356,814
0.41
337,859,295,345
0.57
3,947,600,000
0.01
2,668,950,000
0.00
106,899,750,006
0.14
126,708,523,877
0.21
130,532,168,065
0.18
73,150,193,966
0.12
2,966,700,000
0.00
2,839,111,584
0.00
385,801,277,537
0.52
327,278,847,080
0.55
Agricultural, forestry and aquaculture
Electricity, petroleum & hot water
Water supplying and garbage and sewage treatment and
management
Hospitality services
Information and communications
Finance, banking and insurance
Real estates
State management, security and national defense: party,
union, social guarantee
Education and training
Health care and social work
Recreational, culture, sporting activities
Other service activities
31 December 2011
VND
%
122
Households services
International organizations and bodies
Others
4,384,374,415,894
5.89
2,372,277,289,133
4.02
1,755,000,000
0.00
2,090,000,000
0.00
94,219,866,298
0.13
16,724,637,494
0.03
73,912,000,588,717
99.24
58,108,073,165,907
98.41
566,563,748,655
0.76
936,763,783,523
1.59
74,478,564,337,372
100.00
59,044,836,949,430
100.00
Reverse repo contracts, financial supports and advances to
customers
123
10.
PROVISION FOR LOANS AND ADVANCES TO CUSTOMERS
Changes in provision for loans and advances to customers in 2012 are summarized below:
In Vietnam
Specific provision
General provision
Total
Specific provision
Balance as at 1 January 2012
675,194,763,504
413,492,594,578
1,088,687,358,082
-
Net provision charged in the year
1,564,155,658,317
90,329,366,077
1,654,485,024,394
50,123,502
Bad debts written-off up to 30 November 2012
(773,069,499,508)
-
(773,069,499,508)
-
Balance before bad debts written-off
in December 2012
1,466,280,922,313
503,821,960,655
1,970,102,882,968
50,123,502
- Provision for loans of The Bank
1,316,777,826,120
503,821,960,655
1,820,599,786,775
50,123,502
- Provisions for recievables of MBS
149,503,096,193
-
149,503,096,193
-
Bad debts written-off in December
2012
(664,664,834,331)
-
(664,664,834,331)
-
Balance as at 31 December 2012
801,616,087,982
503,821,960,655
1,305,438,048,637
50,123,502
In which:
124
Currency: VND
Foreign Branches
Total
General provision
Total
Specific provision
General provision
Total
3,853,129,935
3,853,129,935
675,194,763,504
417,345,724,513
1,092,540,488,017
3,399,870,044
3,449,993,546
1,564,205,781,819
93,729,236,121
1,657,935,017,940
-
-
(773,069,499,508)
-
(773,069,499,508)
7,252,999,979
7,303,123,481
1,466,331,045,815
511,074,960,634
1,977,406,006,449
7,252,999,979
7,303,123,481
1,316,827,949,622
511,074,960,634
1,827,902,910,256
-
-
149,503,096,193
-
149,503,096,193
-
-
(664,664,834,331)
-
(664,664,834,331)
7,252,999,979
7,303,123,481
801,666,211,484
511,074,960,634
1,312,741,172,118
125
10.
PROVISION FOR LOANS AND ADVANCES TO CUSTOMERS (continued)
Changes in provision for loans and advances to customers in 2011 were summarized below:
In Vietnam
Specific provision
General provision
Total
Specific provision
425,924,555,768
312,411,712,602
738,336,268,370
-
Net provision charged in the year
420,347,870,402
101,080,881,976
521,428,752,378
-
Bad debts written-off up to 30 November 2011
(140,558,347,813)
-
(140,558,347,813)
-
Balance before bad debts written-off
in December 2011
705,714,078,357
413,492,594,578
1,119,206,672,935
-
- Provision for loans of The Bank
648,090,120,263
413,492,594,578
1,061,582,714,841
-
- Provisions for recievables of MBS
57,623,958,094
-
57,623,958,094
-
Bad debts written-off in December
2011
(30,519,314,853)
-
(30,519,314,853)
-
675,194,763,504
413,492,594,578
1,088,687,358,082
-
In which:
126
Foreign Branches
Total
General provision
Total
Specific provision
General provision
Total
-
-
425,924,555,768
312,411,712,602
738,336,268,370
3,853,129,935
3,853,129,935
420,347,870,402
104,934,011,911
525,281,882,313
-
-
(140,558,347,813)
-
(140,558,347,813)
3,853,129,935
3,853,129,935
705,714,078,357
417,345,724,513
1,123,059,802,870
3,853,129,935
3,853,129,935
648,090,120,263
417,345,724,513
1,065,435,844,776
-
-
57,623,958,094
-
57,623,958,094
-
-
(30,519,314,853)
-
(30,519,314,853)
3,853,129,935
3,853,129,935
675,194,763,504
417,345,724,513
1,092,540,488,017
127
10.
The breakdown of loan classification and related provision of the Bank only as at 30 November 2012 in accordance with
Article 7, Decision No. 493/2005/QD-NHNN are as follows:
Loan balance
VND
Specific provision
VND
General provision
VND
Total
VND
63,458,402,257,600
-
475,938,016,932
475,938,016,932
3,160,755,465,532
470,916,523,432
23,705,665,991
494,622,189,423
161,455,527,152
54,787,724,833
1,210,916,454
55,998,641,287
Doubtful
395,648,170,450
103,966,012,995
2,967,361,278
106,933,374,273
Loss
823,922,691,583
687,107,564,860
-
687,107,564,860
68,000,184,112,317
1,316,777,826,120
503,821,960,655
1,820,599,786,775
Classification
Current
Special mention
Substandard
The breakdown of loan classification and related provision of the Branch in Lao P.D.R as at 31 December 2012 in accordance with the
Bank of Lao P. D.R are as follows:
Loan balance
VND
Specific provision
VND
General provision
VND
Total
VND
597,130,539,708
-
2,985,652,720
2,985,652,720
-
-
-
-
250,617,513
50,123,502
-
50,123,502
Doubtful
-
-
-
-
Loss
-
-
-
-
597,381,157,221
50,123,502
2,985,652,720
3,035,776,222
Classification
Current
Special mention
Substandard
128
10.
The breakdown of loan classification and related provision of the Branch in Cambodia as at 31 December 2012 in accordance with the
Bank of Cambodia are as follows:
Loan balance
VND
Specific provision
VND
General provision
VND
Total
VND
426,734,725,853
-
4,267,347,259
4,267,347,259
Special mention
-
-
-
-
Substandard
-
-
-
-
Doubtful
-
-
-
-
Loss
-
-
-
-
426,734,725,853
-
4,267,347,259
4,267,347,259
Classification
Current
129
11.
INVESTMENT SECURITIES
11.1Available-for-sale investment securities
Details of available-for-sale investment securities held by the Bank and its subsidiaries as at 31 December are as follows:
31 December 2012
VND
31 December 2011
VND
Debt securities
Debt securities issued by the Government
(i)
30,987,640,008,012
7,394,787,932,894
Debt securities secured by the Government
(i)
4,763,349,357,534
2,725,000,000,000
Debt securities issued by other credit institutions
(ii)
712,420,000,000
3,251,997,782,033
Debt securities issued by local business entities
(iii)
567,670,083,359
526,132,755,079
Equity securities issued by other credit institutions
106,433,924,800
106,433,966,716
Equity securities issued by local business entities
808,864,765,330
864,310,900,000
37,546,378,139,035
14,868,663,336,722
(100,192,144,971)
(282,687,124,857)
37,446,185,994,064
14,585,976,211,865
Equity securities
Provision for impairment of available-for-sale investment
securities (see Note 13.2)
(i)
Debt securities issued by the Government (including the State Bank’s bills) and Government secured bonds have terms ranging
from 2 to 10 years and bear interest at rates varying from 7.95% to 13.20% per annum (2011: terms ranging from 2 to 5 years and interest at rates ranging from 7.05% to 13.20% per annum). Interest is paid annually.
(ii)
Debt securities issued by other financial institutions are bonds which have terms ranging from 2 to 11 years and bear interest
at rates varying from 9% to 12% per annum (2011: terms ranging from 2 to 10 years and interest at rates ranging from 7.95% to 13.19%
per annum). Interest is paid annually.
(iii)
Debt securities issued by local business entities are bonds which have term ranging from 3 to 10 years and bear interest at
rates varying from 5% to 17% per annum (2011: terms ranging from 2 to 7 years and interest at rates ranging from 9.30% to 18.50% per
annum). Interest is paid annually.
130
11.
INVESTMENT SECURITIES (continued)
11.2
Details of held-to-maturity investment securities of the Bank and its subsidiaries as at 31 December 2012 are as follows:
31 December 2012
VND
31 December 2011
VND
Government bonds
(i)
400,278,270,289
50,000,000,000
Government secured bonds
(i)
350,000,000,000
350,000,000,000
Debt securities issued by other credit institutions
(ii)
2,080,000,000,000
3,468,694,000,000
Debt securities issued by local business entities
(iii)
1,267,531,662,983
1,135,000,000,000
4,097,809,933,272
5,003,694,000,000
(556,499,999,999)
(176,750,000,000)
3,541,309,933,273
4,826,944,000,000
Provision for impairment of held-to-maturity investment securities (see Note 13.2)
(i)
Government bonds and Government secured bonds have terms ranging from 3 to 5 years and bear interest at rates ranging
from 11.90% to 12.60% per annum (2011: terms ranging from 2 to 10 years and interest at rates of 12.30% per annum). Interest is paid
annually.
(ii)
Debt securities issued by other credit institutions have terms ranging from 2 to 11 years and bear interest at rates varying from
4.50% to 14.00% per annum (2011: terms ranging from 3 to 11 years and interest rates ranging from 3.50% to 15.00% per annum). Interest is pre-paid or paid annually.
(iii)
Debt securities issued by local business entities are bonds which have terms ranging from 2 to 10 years and bear interest
at rates varying from 5.00% to 18.02% per annum (2011: terms ranging from 2 to 10 years and interest rates ranging from 9.00% to
19.00% per annum). Interest is pre-paid or paid annually.
131
12.
LONG-TERM INVESTMENTS
31 December 2012
VND
31 December 2011
VND
282,693,018,972
154,575,056,628
Other long-term investments
1,412,524,547,113
1,732,006,129,236
1,695,217,566,085
1,886,581,185,864
(92,901,399,000)
(105,301,704,730)
1,602,316,167,085
1,781,279,481,134
Provision for impairment (see Note 13.3)
12.1
Details of investments in associates as at 31 December 2012 are as follows:
31 December 2012
% owned by
the Bank
Cost
VND
Carrying value per
equity method
VND
Vietasset Investment Joint Stock Company
45.00%
25,000,000,000
25,000,000,000
Long Thuan Loc Joint Stock Company
29.65%
45,000,000,000
48,035,416,377
49.76%
208,824,900,000
209,657,602,595
278,824,900,000
282,693,018,972
Details of investments in associates as at 31 December 2011 were as follows:
31 December 2012
% owned by
the Bank
Cost
VND
Carrying value per
equity method
VND
Vietasset Investment Joint Stock Company
45.00%
25,000,000,000
25,000,000,000
Long Thuan Loc Joint Stock Company
29.65%
45,000,000,000
49,172,987,439
20.00%
80,000,000,000
80,402,069,189
150,000,000,000
154,575,056,628
132
12.
LONG-TERM INVESTMENTS(continued)
12.2Other long-term investments
Details of long-term investments as at 31 December 2012 and 31 December 2011 are as follows:
31 December 2012
VND
31 December 2011
VND
585,453,088,355
523,434,588,355
88,722,356,800
88,000,000,000
Investments in investment funds
217,020,000,000
284,850,000,000
Investments in long-term projects
521,329,101,958
835,721,540,881
1,412,524,547,113
1,732,006,129,236
Investments in business entities
Investments in financial institutions
13.
PROVISION FOR IMPAIRMENT OF SECURITIES AND OTHER LONG-TERM INVESTMENTS
31 December 2012
VND
31 December 2011
VND
Provision for impairment of trading securities
261,185,208,167
368,110,099,735
656,692,144,970
459,437,124,857
92,901,399,000
105,301,704,730
1,010,778,752,137
932,848,929,322
31 December 2012
VND
31 December 2011
VND
254,522,017,249
332,427,185,725
6,663,190,918
35,682,914,010
261,185,208,167
368,110,099,735
Provision for impairment of other long-term investments
13.1 Provision for impairment of trading securities
Trading securities
Listed securities
Unlisted securities
133
13.
PROVISION FOR IMPAIRMENT OF SECURITIES AND OTHER LONG-TERM INVESTMENTS (continued)
13.2
31 December 2012
VND
31 December 2011
VND
100,192,144,971
282,687,124,857
-
14,474,228,000
100,192,144,971
268,212,896,857
556,499,999,999
176,750,000,000
656,692,144,970
459,437,124,857
31 December 2012
VND
31 December 2011
VND
Investments in investment funds
68,213,827,000
105,301,704,730
Unlisted shares issued by local financial institutions and business
entities
24,687,572,000
-
92,901,399,000
105,301,704,730
Available-for-sale investment securities
-
Equity securities
-
Debt securities
13.3
Provision for impairment of other long-term investments
134
13.
PROVISION FOR IMPAIRMENT OF SECURITIES AND OTHER LONG-TERM INVESTMENTS (continued)
13.4
Changes in provision for securities and other long-term investments
Changes in provision for impairment of securities and long-term investments during 2012 are as follows:
Trading securities
VND
VND
Other
VND
Total
VND
368,110,099,735
459,437,124,857
105,301,704,730
932,848,929,322
Provision charged in the year
-
130,881,584,339
-
130,881,584,339
(12,400,305,730)
(327,951,761,524)
Provision reversed in the year
Reclassify from provision for impairment of
other assets to provision for impairment of
held-to-maturity investment securities
(106,924,891,568) (208,626,564,226)
-
275,000,000,000
-
275,000,000,000
261,185,208,167
656,692,144,970
92,901,399,000
1,010,778,752,137
Changes in provision for impairment of securities and long-term investments during 2011 are as follows:
Trading securities
VND
VND
Other
VND
Total
VND
131,400,659,618
138,138,584,000
84,024,918,451
353,564,162,069
236,709,440,117
391,988,330,984
26,729,852,152
655,427,623,253
long-term investment to provision for impairment of available-for-sale securities
-
5,453,065,873
(5,453,065,873)
-
held-to-maturity investment securities to
provision for impairment of other assets
-
(75,000,000,000)
-
(75,000,000,000)
Decrease due to sale of securities in the year
-
(1,142,856,000)
-
(1,142,856,000)
368,110,099,735
459,437,124,857
105,301,704,730
932,848,929,322
135
14.
FIXED ASSETS
14.1
Movements of tangible fixed assets during 2012 are as follows:
Buildings & building
improvements
VND
Machines and
equipment
VND
148,881,820,822
464,013,817,191
Additions
1,051,405,785
78,248,761,220
Disposals
(777,311,868)
(6,452,337,548)
149,155,914,739
535,810,240,863
Openning balance
18,777,689,014
278,761,081,813
Charged for the year
6,669,299,762
104,964,748,995
Decreases
(635,427,429)
(6,391,022,926)
Closing balance
24,811,561,347
377,334,807,882
Opening balance
130,104,131,808
185,252,735,378
Closing balance
124,344,353,392
158,475,432,981
Cost:
Opening balance
Closing balance
Accumulated depreciation:
Net book value:
136
Means of
transportation
VND
Other tangible assets
VND
Total
VND
212,567,186,835
61,473,994,976
886,936,819,824
59,424,094,279
8,798,336,684
147,522,597,968
(2,520,467,129)
(1,512,299,706)
(11,262,416,251)
269,470,813,985
68,760,031,954
1,023,197,001,541
92,555,711,624
26,022,128,912
416,116,611,363
41,643,147,239
12,769,307,037
166,046,503,033
(1,729,094,175)
(1,327,837,314)
(10,083,381,844)
132,469,764,688
37,463,598,635
572,079,732,552
120,011,475,211
35,451,866,064
470,820,208,461
137,001,049,297
31,296,433,319
451,117,268,989
137
14.
FIXED ASSETS ( continued)
14.1
Tangible fixed assets (continued)
Movements of tangible fixed assets during 2011 were as follows:
improvements
VND
Machines and
equipment
VND
Opening balance
73,335,036,631
306,151,641,874
Additions
78,313,469,492
168,955,364,551
Disposals
(2,766,685,301)
(11,093,189,234)
148,881,820,822
464,013,817,191
Openning balance
15,118,938,847
203,013,649,304
5,423,006,524
86,163,705,750
Decreases
(1,764,256,357)
(10,416,273,241)
Closing balance
18,777,689,014
278,761,081,813
Opening balance
58,216,097,784
103,137,992,570
Closing balance
130,104,131,808
185,252,735,378
Cost:
Closing balance
Net book value:
138
Means of
transportation
VND
Other tangible assets
VND
Total
VND
152,032,188,844
29,286,861,920
560,805,729,269
73,555,400,009
33,279,266,861
354,103,500,913
(13,020,402,018)
(1,092,133,805)
(27,972,410,358)
212,567,186,835
61,473,994,976
886,936,819,824
64,786,444,899
14,527,316,093
297,446,349,143
33,142,788,742
13,232,511,222
137,962,012,238
(5,373,522,017)
(1,737,698,403)
(19,291,750,018)
92,555,711,624
26,022,128,912
416,116,611,363
87,245,743,945
14,759,545,827
263,359,380,126
120,011,475,211
35,451,866,064
470,820,208,461
139
14.
FIXED ASSETS (continued)
14.2
Intangible assets
Movements in intangible assets during 2012 are as follows:
Definite land use rights
VND
Computer software
VND
751,028,744,405
175,097,076,340
Additions
2,872,482,907
38,831,686,625
Disposals
-
(10,500,000)
753,901,227,312
213,918,262,965
Openning balance
19,825,866,033
103,024,853,073
16,335,145,450
59.436.007.318
-
(10.500.000)
36,161,011,483
162,450,360,391
Opening balance
731,202,878,372
72,072,223,267
Closing balance
717,740,215,829
51,467,902,574
Cost:
Opening balance
Closing balance
Accumulated amortization:
Decreases
Closing balance
Net book value:
140
Other intangible assets (*)
VND
Total
VND
277,311,000,000
1,203,436,820,745
-
41,704,169,532
-
(10,500,000)
277,311,000,000
1,245,130,490,277
-
122,850,719,106
-
75.771.152.768
-
(10.500.000)
-
198,611,371,874
277,311,000,000
1,080,586,101,639
277,311,000,000
1,046,519,118,403
141
14.
FIXED ASSETS (continued)
14.2
Intangible assets (continued)
Movements in intangible assets during 2011 were as follows:
Definite land use rights
VND
Computer software
VND
653,155,425,512
98,278,176,562
Additions
97,873,318,893
84,570,173,330
Disposals
-
(7,751,273,552)
751,028,744,405
175,097,076,340
4,692,173,240
63,881,575,157
15,133,692,793
46,649,968,893
-
(7,506,690,977)
19,825,866,033
103,024,853,073
Opening balance
648,463,252,272
34,396,601,405
Closing balance
731,202,878,372
72,072,223,267
Cost:
Opening balance
Closing balance
Accumulated amortisation:
Openning balance
Decreases
Closing balance
Net book value:
(*): Other intangible assets represent revaluation amounts associated with ASEAN International Hotel. At present, there is
no specific guidance on appropriate accounting treatment for recognition and amortization of these assets.
Accordingly, the Bank has not recognized any amortization for the year.
142
Other intangible assets (*)
VND
Total
VND
277,311,000,000
1,028,744,602,074
-
182,443,492,223
-
(7,751,273,552)
277,311,000,000
1,203,436,820,745
-
68,573,748,397
-
61,783,661,686
-
(7,506,690,977)
-
122,850,719,106
277,311,000,000
960,170,853,677
277,311,000,000
1,080,586,101,639
143
15.
INVESTMENT PROPERTY
Movements of investment in property during the year ended 31 December 2012 are as follows:
improvements
VND
Cost:
Opening balance
Addition
Disposals
Closing balance
147,138,579,986
4,595,000,000
151,733,579,986
Opening balance
-
-
Decreases
-
Closing balance
-
Net book value:
Opening balance
147,138,579,986
Closing balance
151,733,579,986
144
15.
INVESTMENT PROPERTY (CONTINUED)
Movements of investment in property during the year ended 31 December 2011 was as follows:
improvements
VND
Cost:
Opening balance
130,865,341,716
Addition
18,789,555,447
Disposals
(2,516,317,177)
Closing balance
147,138,579,986
Opening balance
Decreases
Closing balance
100,652,684
(100,652,684)
-
Net book value:
Opening balance
130,764,689,032
Closing balance
147,138,579,986
145
16.ACCOUNT RECEIVABLES
31 December 2012
VND
31 December 2011
VND
Internal receivables
89,152,834,297
581,449,187,791
External receivables
3,988,816,319,012
4,449,940,694,848
4,077,969,153,309
5,031,389,882,639
Details of external receivables as at 31 December 2012 are as follows:
31 December 2012
VND
31 December 2011
VND
- Repo and reverse repo securities contracts
120,500,000,000
2,025,000,000,000
- Receivables from bonds
260,000,000,000
350,000,000,000
- Advances and deposits for construction contract deposits
938,857,502,757
229,269,619,371
- Margin deposits at foreign banks
414,583,804,160
19,272,689,928
- Advanced payments to suppliers
158,941,762,830
79,976,104,843
-
Receivables of subsidiaries
685,779,510,744
6,497,773,973
-
Other recievables
1,410,153,738,521
1,739,924,506,733
3,988,816,319,012
4,449,940,694,848
17. OTHER ASSETS
Details of other assets as at 31 December 2012 are as follows:
31 December 2012
VND
31 December 2011
VND
-
1,432,872,963,889
Prepaid expenses
220,513,896,095
257,081,451,252
Construction in progress
339,577,940,042
174,521,303,976
91,813,326,567
300,598,523,524
651,905,162,704
2,165,074,242,641
Advances for investment activities
Other assets
146
18.
PROVISION FOR OTHER ASSETS
31 December 2012
VND
31 December 2011
VND
276,360,417,023
89,288,606,532
144,152,477,586
112,000,000,000
(275,000,000,000)
75,000,000,000
Other increases
-
71,810,491
Closing balance
145,512,894,609
276,360,417,023
Opening balance
Reclassify provision for other assets to provision for
held-to-maturity investment securities
19.
BORROWINGS FROM THE GOVERNMENT AND THE STATE BANK OF VIETNAM
31 December 2012
VND
31 December 2011
VND
Borrowings from the SBV
488,477,289,152
-
- Mortgages of valuable papers
488,477,289,152
-
Borrowings from the Ministry of Finance
-
-
Other borrowings
-
-
488,477,289,152
-
2012
%/ per annum
2011
%/ per annum
7.00% - 14.00%
-
Borrowing interest rates applied in the year are as follows:
Mortgages of valuable papers with the SBV
147
20.
DUE TO BANKS
31 December 2012
VND
31 December 2012
VND
Demand deposits
86,351,887,102
29,107,343,800
- In VND
77,809,413,888
27,288,051,915
8,542,473,214
1,819,291,885
14,328,690,060,000
24,835,704,306,071
- In VND
9,220,000,000,000
18,764,064,581,071
5,108,690,060,000
6,071,639,725,000
Borrowings from other banks
16,097,065,188,729
1,807,672,606,679
- In VND
10,170,809,504,500
12,809,504,500
5,926,255,684,229
1,794,863,102,179
30,512,107,135,831
26,672,484,256,550
Term deposits(*)
(*): Term deposits signed before 1 September 2012.
Interest rates applied for term deposits from other banks during the year are as follows:
Term deposits from other local banks in VND
Term deposits from other local banks in FC
Term deposits from other overseas banks in VND
Term deposits from other overseas banks in FC
2012
%/per annum
2011
%/per annum
1.00% - 14.00%
13.00% - 16.00%
0.01% - 3.50%
0.10% - 3.00%
1.00% - 10.00%
9.00% - 13.50%
0.01% - 2.50%
0.50% - 3.00%
148
21. DUE TO CUSTOMERS
21.1Analysis by products
31 December 2012
VND
31 December 2011
VND
Demand deposits
35,576,227,350,142
24,546,997,469,521
-
Demand deposits in VND
23,484,621,751,140
15,639,879,404,501
-
Demand saving deposits in VND
76,129,031,276
53,634,349,834
-
Demand deposits in FC
12,014,670,685,868
8,852,328,250,869
-
Demand saving deposits in FC
805,881,858
1,155,464,317
Term deposits
64,919,718,536,197
48,822,591,206,174
-
Term deposits in VND
24,856,818,705,296
18,597,742,837,705
-
Term saving deposits in VND
34,920,337,978,300
24,349,237,047,593
-
Term deposits in FC
1,084,463,680,246
1,224,786,323,761
-
Term saving deposits in FC
4,058,098,172,355
4,650,824,997,115
1,371,083,956,220
8,322,312,226,279
15,880,386,509,714
7,856,772,061,857
Deposits for specific purposes
Margin deposits
-
Margin deposits in VND
7,119,671,369,054
638,156,906,721
-
Margin deposits in FC
8,760,715,140,660
7,218,615,155,136
117,747,416,352,273
89,548,672,963,831
149
21.2
Analysis by customers
31 December 2012
VND
31 December 2011
VND
Deposits from business entities
76,715,757,064,848
59,015,941,823,224
Deposits from individuals
41,031,659,287,425
30,532,731,140,607
117,747,416,352,273
89,548,672,963,831
Mức lãi suất trong năm của các khoản tiền gửi của khách hàng như sau:
2012
% per annum
2011
% per annum
Demand deposits in VND
1.00% - 2.40%
2.40%
Demand saving deposits in VND
1.00% - 2.40%
2.40%
Demand deposits in FC
0.10% - 0.25%
0.25%
Demand saving deposits in FC
0.10% - 0.25%
0.25%
Term deposits in VND
2.00% - 14.00%
6.00% - 14.00%
Term saving deposits in VND
2.00% - 14.00%
6.00% - 14.00%
Term deposits in FC
0.50%
0.50% - 5.20%
Term saving deposits in FC
2.00%
0.50% - 5.20%
In case customers withdraw term saving deposits prior to the maturity date, interest shall be applied depending on the
Bank’s policy for specific period in conformity with the SBV’s regulations.
150
22. DERIVATIVES AND OTHER FINANCIAL LIABILITIES
Total book value
(at exchange rate of reporting date)
Assets
VND
Liabilities
VND
Net value
VND
Currency derivatives
-
(26,173,405,229)
(26,173,405,229)
Forward transactions
-
(24,266,621,000)
(24,266,621,000)
Swap transactions
-
(1,906,784,229)
(1,906,784,229)
Currency derivatives
168,198,738
(22,805,652,200)
(22,637,453,462)
Forward transactions
-
(22,805,652,200)
(22,805,652,200)
168,198,738
-
168,198,738
As at 31 December 2012
As at 31 December 2011
Swap transactions
23.OTHER BORROWED FUNDS
Bank for Investment and Development of Vietnam
Funds received from other institutions
31 December 2012
VND
31 December 2011
VND
65,269,100,000
115,042,432,500
124,322,682,500
86,462,112,000
189,591,782,500
201,504,544,500
Funds received from Bank for Investment and Development of Vietnam represents the funds financed by World Bank (via International
Development Association) to facilitate Rural Development Finance Project Phase II and Phase III according to a Loan Agreement signed
on 9 September 2002 between World Bank and the Ministry of Finance and Bank for Investment and Development of Vietnam (“BIDV”)
is appointed as fund manager. The Bank initially signed a sub-contract with BIDV on 10 May 2004 and subsequently amended on 16 July
2005. Total credit limit granted by BIDV is VND 100 billion and will be revised annually subject to repayment schedule and maturities of
specific or connected loans under particular contracts. Interest is payable at 6-month LIBOR rate plus a margin. Interest will be revised
on a semi-annual basis. Interest rate applied for 2012 is 13.92% per annum.
Funds received by other organizations are the ODA funds from the Bank of Japan International Cooperation (“JBIC”) in VND under their
project on financing toward small and medium enterprises. The framework agreement was signed on 17 March 2010. The loan term is
long and medium with interest rate of 6.50% per annum for the first repayment year. The interest rate shall be revised later throughout the term of the loan on a quarterly basis. The interest rate applied for 2012 is 11.16% per annum.
151
24. VALUABLE PAPERS ISSUED
31 December 2012
VND
31 December 2011
VND
Bonds issued in 2010
(i)
2,420,000,000,000
3,530,000,000,000
Other valuable papers issued
(ii)
1,000,068,393,288
1,001,631,630,177
3,420,068,393,288
4,531,631,630,177
(i)
Bonds issued by the Bank in 5 series in 2010:
Series
Date of Issue
Term
Interest rates
(% per annum)
Series 1
27 August 2010
36 months
12.45%
420,000,000,000
Series 5
28 December 2010
11 years
12.00%
2,000,000,000,000
VND
2,420,000,000,000
(ii)
Other valuable papes comprised of certificates of deposit issued with terms ranging from 1 to 36 months which bear interest
at rates ranging from 9.00% to 13.00% per annum.
152
25. OTHER PAYABLES
31 December 2012
VND
31 December 2011
VND
Internal payables
550,806,963,280
277,580,887,993
External payables
7,470,558,930,185
5,707,382,600,187
8,021,365,893,465
5,984,963,488,180
Details of external payables as at 31 December 2012 are as follows:
31 December 2012
VND
-
Margin deposits of securities investors
-
Payables to customers
-
Dividend payables
-
Payables related to real estate projects
-
Other payables
723,443,718,245
6,207,378,330,054
19,627,510,593
223,730,271,635
296,379,099,658
7,470,558,930,185
153
26. PROVISION FOR OFF-BALANCE SHEET COMMITMENTS
Changes in provision for off-balance sheet commitments in 2012 are as follows:
Specific provision
VND
General provision
VND
Total
VND
-
144,921,433,535
144,921,433,535
Provision charged for the year
-
62,467,820,066
62,467,820,066
-
207,389,253,601
207,389,253,601
Changes in provision for off-balance sheet commitments in 2011 were as follows:
Specific provision
VND
General provision
VND
Total
VND
-
141,057,185,437
141,057,185,437
Reversal in the year
-
3,864,248,098
3,864,248,098
-
144,921,433,535
144,921,433,535
The breakdown of classification as at 30 November 2012 and related provision for off-balance sheet commitments in accordance with
Article7, Decision No.493/2005/QD-NHNN are as follows:
Off-balance sheet commitments balance (*)
VND
Specific provision
VND
General provision
VND
Total
VND
27,651,900,480,100
-
207,389,253,601
207,389,253,601
Special mention
-
-
-
-
Substandard
-
-
-
-
Doubtful
-
-
-
-
Loss
-
-
-
-
27,651,900,480,100
-
207,389,253,601
207,389,253,601
Classification
Current
(*): Balance in Vietnam’s market.
154
27.TAXATION
Movements during the year
Value added tax
Enterprise income tax
“EIT”
Other taxes
31/12/2011
VND
Payable
VND
Paid
VND
3,053,757,534
43,008,583,005
(45,733,285,231)
329,055,308
318,973,561,462
767,049,881,430
(1,070,027,250,408)
15,996,192,484
59,111,038,095
155,776,084,488
(152,941,229,083)
61,945,893,500
381,138,357,091
965,834,548,923
(1,268,701,764,722)
78,271,141,292
31/12/2012
VND
155
27.TAXATION (continued)
27.1
Current enterprise income tax
The Bank has the obligation to pay enterprise income tax based on 25% of taxable profit (2010: 25%). Enterprise income tax for the
year 2012 is calculated as follows:
2012
VND
2011
VND
3,089,550,626,061
2,625,323,837,940
(67,869,769,645)
(44,424,935,390)
(3,784,326,164)
(292,895,278,834)
(76,823,068,137)
499,150,624,528
- Non-deductible expenses
56,655,754,105
-
Taxable income of the Bank
2,997,729,216,220
2,787,154,248,244
Current enterprise income tax expense of
the Bank at rate of 25% (i)
749,432,304,055
696,788,562,061
Current enterprise income tax expense of
the Bank’s foreign branches (ii)
4,510,752,352
-
Current enterprise income tax expenses of
subsidiaries (iii)
13,106,825,023
13,199,733,186
767,049,881,430
709,988,295,247
-
18,685,616
767,049,881,430
710,006,980,863
-
2,298,839,880
767,049,881,430
712,305,820,743
318,973,561,462
260,931,046,786
(1,070,027,250,408)
(654,263,306,067)
15,996,192,484
318,973,561,462
Consolidated profit before tax
Adjustment for:
- Dividend income exempt from tax
- Consolidated adjustments exempt from
tax
- (Profit)/loss before tax of subsidiaries
Current EIT expense (i+ii+iii)
Additional EIT payable as a result of tax
assessment of the subsidiaries
Current enterprise income tax in the year
Tax adjustments for MBS
Current EIT payable incurred in the year
after adjustments
Current EIT payable at the beginning of the
year
Current EIT paid during the year
Current EIT payable at the end of the year
156
27.TAXATION (continued)
27.2
Deferred tax assets
Deferred tax assets at the beginning of the
year
Reversed deferred tax assets recognized
in the previous years
Deferred tax assets at the end of the year
2012
VND
2011
VND
8,493,526,750
8,493,526,750
(2,464,844,750)
-
6,028,682,000
8,493,526,750
157
28.
CAPITAL, RESERVES AND MINORITY INTERESTS
28.1
Statement of changes in capital, reserves of the Bank and its subsidiaries and minority interests
Statement of changes in capital, reserves of the Bank and its subsidiaries and minority interests in 2012 is as follows:
Chartered capital
Share premium
Other capital
Financial risk
reserve
Opening balance
7,300,000,000,000
253,764,812,500
(6,177,773,437)
435,234,418,507
Increase in the year
2,700,000,000,000
84,656,052,320
-
216,720,752,522
-
-
-
-
2,700,000,000,000
84,656,052,320
-
-
Additional appropriation of
reserves for 2011
-
-
-
213,400,000,000
Temporary appropriation of
reserves for 2012
-
-
-
3,290,372,522
Other increase
-
-
-
30,380,000
Decrease in the year
-
-
(12,009,715,118)
(1,231,863,041)
Utilizations in the year
-
-
-
(512,123,382)
Decrease of other equity
during the year
-
-
-
-
Re-purchase reserve shares
-
-
(12,009,715,118)
-
Dividend paid in advance of
previous years
-
-
-
-
Dividend of 2012
-
-
-
-
Re-classify wellfare fund to
payables to employees
-
-
-
-
Additional tax payments as
a result of tax assessments
-
-
-
-
Net off excess profit from
subsidiaries in 2008
-
-
-
-
Other decreases
-
-
-
-
Increase/(decrease) reserves for minority interests
-
-
-
(719,739,659)
10,000,000,000,000
338,420,864,820
(18,187,488,555)
650,723,307,988
Net profit increased for the
year
Public offering
Closing balance
158
Currency: VND
Capital supplementary
reserve
Other reserves
Minority interests
Total
227,902,530,418
181,684,995,249
1,249,734,068,530
655,656,394,315
10,297,799,446,082
107,293,617,916
295,996,716,507
1,679,095,309,012
14,156,955,819
5,097,919,404,096
-
-
2,305,878,944,062
14,156,955,819
2,320,035,899,881
-
-
-
-
2,784,656,052,320
-
-
(213,400,000,000)
-
-
107,293,617,916
295,396,943,964
(413,265,806,097)
-
(7,284,871,695)
-
599,772,543
1,966,909,494
-
2,597,062,037
(226,455,960)
(425,383,282,425)
(1,423,148,359,855)
(3,872,778,609)
(1,865,872,455,008)
-
(325,969,249,989)
-
-
(326,481,373,371)
-
-
-
2,019,515,117
2,019,515,117
-
-
-
-
(12,009,715,118)
-
-
(419,000,000,000)
(2,850,000,000)
(421,850,000,000)
-
-
(1,000,000,000,000)
-
(103,402,521,781)
-
-
(103,402,521,781)
-
-
(2,556,138,137)
-
(2,556,138,137)
-
-
(1,290,000,000)
-
(1,290,000,000)
-
-
(302,221,718)
-
(302,221,718)
(226,455,960)
3,988,489,345
-
(3,042,293,726)
-
334,969,692,374
52,298,429,331
1,505,681,017,687
665,940,571,525
13,529,846,395,170
(1,000,000,000,000)
159
28.
CAPITAL, RESERVES AND MINORITY INTERESTS(continued)
28.1
Statement of changes in capital, reserves of the Bank and its subsidiaries and minority interests (continued)
Statement of changes in capital, reserves of the Bank and its subsidiaries and minority interests in 2011 was as follows:
Chartered capital
Share premium
Other capital
Financial risk reserve
7,300,000,000,000
253,764,812,500
-
272,417,840,996
Increase in the year
-
-
-
170,972,311,681
Net profit for the year
-
-
-
-
Appropriation to reserves
for 2010
-
-
-
165,293,850,355
Temporary appropriation to
reserves for 2011
-
-
-
5,678,461,326
Increase in contributed capital from minority interests
-
-
-
-
Other increases
-
-
-
-
Decrease in the year
-
-
(6,177,773,437)
(8,155,734,170)
Utilization in the year
-
-
-
(12,622,500)
Additional tax payments as
a result of tax assessments
-
-
-
-
Dividends paid in advance
for 2010
-
-
-
-
Increase/(decrease) reserves for minority interests
-
-
-
(8,143,111,670)
Other decreases
-
-
(6,177,773,437)
-
7,300,000,000,000
253,764,812,500
(6,177,773,437 )
435,234,418,507
Opening balance
Closing balance
160
Currency: VND
Capital supplementary
reserve
Other reserves
Minority interests
Total
143,966,555,979
130,857,378,762
781,337,351,316
858,766,957,627
9,741,110,897,180
84,139,353,975
524,740,912,139
1,348,078,735,257
(184,854,043,652)
1,943,077,269,400
-
-
2,126,709,458,555
(211,373,915,862)
1,915,335,542,693
82,761,850,355
271,635,529,825
(519,691,230,535)
-
-
1,377,503,620
253,105,382,314
(260,161,347,260)
-
-
-
-
-
26,503,900,000
26,503,900,000
-
-
1,221,854,497
15,972,210
1,237,826,707
(203,379,536)
(473,913,295,652)
(879,682,018,043)
(18,256,519,660)
(1,386,388,720,498)
-
(477,336,523,789)
-
-
(477,349,146,289)
-
-
(3,682,018,043)
-
(3,682,018,043)
-
-
(876,000,000,000)
(19,357,556,166)
(895,357,556,166)
(203,379,536)
3,423,228,137
-
4,923,263,069
-
-
-
-
(3,822,226,563)
(10,000,000,000)
227,902,530,418
181,684,995,249
1,249,734,068,530
655,656,394,315
10,297,799,446,082
161
28.
28.1
Statement of changes in capital, reserves of the Bank and its subsidiaries and minority interests (continued)
Breakdown of share capital of the Bank in 2012 is as follows:
Amount
VND
Type of issuance
Decision No. 300/NQ-MBDHDCD and Decision No. 532.1/
NQ-MB-HDQT
1,000,000,000,000
Issue to strategic shareholders
Decision No.300/NQ-MBDHDCD
1,700,000,000,000
Public offering
Date of increase
Decree
23 March 2012
29 March 2012
2,700,000,000,000
28.2
Statutory reserves of the Bank
According to Law on Credit Institution No.47/2010/QH12 effective from 1 January 2011, commercial banks are required to make
appropriation of profit after tax to the following reserves:
Basis of calculation
Maximum balance
Capital supplementary reserve
5% profit after tax
100% chartered capital
Financial reserve
10% profit after tax
25% chartered capital
Other reserves are decided by the Bank.
The Bank will appropriate to reserves for the year 2012 based on its operational results and upon the decision made at the General
Shareholders Meetings.
162
28.
28.3
Statutory reserves of subsidiaries
Statutory reserves of MB Securities Joint Stock Company (“MBS”)
According to the Resolution No. 01/2012/TLS/DHCD-NQ made at the Annual Shareholders' Meeting dated 20 April 2012, Investment
and Development Fund balance of VND 5,099,912,818 VND shall be classified as Business Asistance Fund for a usage period of 3 years
and the percentage of use over each year will be decided by the Board of Directors.
During the year, MBS has appropriated 5% of the net profit after tax to capital supplementary reserve and statutory reserves in
accordance with Decision No. 27/2007/QD-BTC.
Other reserves are created under the decisions made at the General Shareholder Meeting.
Appropriations to statutory reserves for other subsidiaries
Other subsidiaries create reserves in accordance with instructions of the Bank. The percentages used to create reserves for other
subsidiaries are normally consistent with those applied for credit institutions in accordance with Decree No. 146/2005/ND-CP issued
on 23 November 2005.
28.4
Details of basic earnings per share of the Bank are as follows:
Net profit for the year
Weighted average number of ordinary
shares (shares)
2012
VND
2011
VND
2,305,878,944,062
2,126,709,458,555
938,547,945
730,000,000
2,457
2,913
29. DIVIDEND PAYMENTS
Dividend for the previous year
Dividend paid in advance for the current year
2012
VND
2011
VND
419,000,000,000
-
1,000,000,000,000
876,000,000,000
1,419,000,000,000
876,000,000,000
163
30. INTEREST AND SIMILAR INCOME
2012
VND
2011
VND
Interest income from deposits
2,935,208,735,301
3,738,453,517,240
Interest income from loans to customers
9,417,027,949,793
8,311,835,873,404
Interest income from securities investments
3,042,286,865,271
1,662,414,286,296
43,618,171,465
108,185,690,002
15,438,141,721,830
13,820,889,366,942
Other interest similar income
31. INTEREST AND SIMILAR EXPENSES
2012
VND
2011
VND
7,489,467,963,952
7,052,327,121,601
Interest expenses for borrowings
657,381,563,790
776,541,750,389
Interest expenses for valuable papers issued
661,705,589,956
749,445,726,519
27,028,028,126
20,176,459,745
8,835,583,145,824
8,598,491,058,254
Interest expenses for customer deposits
Other interest similar expenses
164
32. NET FEE AND COMMISSION INCOME
2012
VND
2011
VND
Guarantee activities
452,280,001,525
373,348,639,278
Settlement services
179,869,399,971
174,278,370,240
Securities services
64,003,242,607
56,845,847,835
Fund management activities
27,287,643,741
42,728,253,353
Revenue from hospitality business activities
24,537,738,022
31,903,050,715
Income from sale, recovery, and valuation of assets
29,785,195,924
425,125,518,467
Management fee from leasing services
53,221,298,994
48,906,608,884
Other services
73,406,733,996
37,760,731,373
904,391,254,780
1,190,897,020,145
Settlement services
(67,668,038,330)
(44,955,523,296)
Expenses for hospitality business activities
(22,498,773,624)
(19,732,119,915)
Expense from sale, recovery, and valuation of assets
(15,604,351,697)
(399,156,953,209)
Expense from leasing services
(40,865,444,622)
(37,739,484,582)
Expense for securities services
(15,396,584,632)
(14,329,672,567)
(9,648,735,856)
(32,331,325,296)
(171,681,928,761)
(548,245,078,865)
732,709,326,019
642,651,941,280
Fee and commission income from
Fee and commission expenses for
Other services
Net fee and commission income
165
33.NET GAIN/(LOSS) FROM FOREIGN CURRENCIES TRADING
2012
VND
2011
VND
Income from spot contracts
203,377,417,600
284,527,589,805
Income from currency derivatives
406,255,502,259
368,580,430,853
-
270,908,130
609,632,919,859
653,378,928,788
(27,944,343,093)
(268,094,729,513)
(578,032,352,357)
(470,610,108,661)
-
-
(605,976,695,450)
(738,704,838,174)
3,656,224,409
(85,325,909,386)
Income from foreign currencies trading
Income from other derivatives
Expenses for foreign currencies trading
Expenses for spot contracts
Expenses for currency derivatives
Expenses for other derivatives
34. NET LOSS FROM TRADING SECURITIES, INVESTMENT SECURITIES AND LONG-TERM INVESTMENTS
2012
VND
2011
VND
Income from trading securities, investment securities
and long-term investments
74,547,793,725
80,862,248,605
Expenses for trading securities, investment securities
and long-term investments
(141,385,676,637)
(194,075,187,196)
(66,837,882,912)
(113,212,938,591)
166
35. REVERSAL/(PROVISION) FOR IMPAIRMENT OF TRADING INVESTMENT SECURITIES AND LONG-TERM INVESTMENTS
2012
VND
2011
VND
106,924,891,568
(236,709,440,117)
Reversal/(provision) for impairment of investment
securities
77,744,979,887
(391,988,330,984)
Reversal/(provision) for impairment of other long-termed investments
12,400,305,730
(26,729,852,152)
197,070,177,185
(655,427,623,253)
2012
VND
2011
VND
Dividend income from long-term investments
29,888,340,039
42,265,962,787
Dividend income from trading securities
19,990,799,086
34,007,551,908
Dividend income from investments in asociates based
on equity contributed
17,990,630,520
3,131,207,263
67,869,769,645
79,404,721,958
2012
VND
2011
VND
Recovery of bad debts written-off
41,482,058,248
41,835,707,535
Income from securities REPO contracts
61,812,944,108
-
Gain from real estate properties trading
25,615,473,612
8,513,253,238
108,937,259,917
3,226,577,214
38,496,164,252
3,065,699,013
276,343,900,137
56,641,237,000
Reversal/(provision) for impairment of trading securities
36.
37.
DIVIDEND INCOME
NET GAIN FROM OTHER OPERATING ACTIVITIES
Income from trust investments
Other income
167
38. OTHER OPERATING EXPENSES
2012
VND
2011
VND
259,788,156,233
199,454,226,230
11,164,035,096
16,767,268,702
Specific administration expenses
39,897,929,033
32,001,853,175
Tools and accessories
69,085,424,670
70,608,667,820
Insurance fees
45,341,453,666
33,008,721,103
Advertisement and communications expenses
222,614,914,531
123,050,366,995
General administration expenses
194,755,376,120
159,212,693,139
Other expenses
185,691,559,760
222,720,285,281
1,028,338,849,109
856,824,082,445
Office rents
Other taxes and fees
39.EMPLOYEES’ INCOME
2012
I.
TOTAL AVERAGE NUMBER OF EMPLOYEES (persons)
II. EMPLOYEES’ INCOME (VND)
1.
Total salary
5,593
739,328,137,893
2.Bonuses
279,247,883,434
3.
Other income
153,085,236,907
4.
Total income (1+2+3) (VND)
5.
Average salary per month (VND)
11,015,676
6.
Average income per month (VND)
17,457,257
1,171,661,258,234
168
40. COLLATERALS AND MORTAGES Book value (VND)
31 December 2012
31 December 2011
Real estate properties
71,583,484,264,458
59,243,697,153,173
Movable assets
67,695,590,977,368
55,712,749,437,832
Valuable papers
8,040,983,567,243
3,850,502,278,945
Other assets
6,165,325,430,756
3,738,625,066,801
153,485,384,239,825
41. 122,545,573,936,751
CONTINGENT LIABILITIES AND COMMITMENTS
In the normal course of business, the Bank is a party to financial instruments which are recorded as consolidated off-balance sheet items. These financial instruments mainly comprise financial guarantees and letters of credit. These instruments involve elements of credit
risk in excess of the amounts recognized in the consolidated balance sheet.
Credit risk for off-balance sheet financial instruments is defined as the possibility of sustaining a loss because any other party to a financial instrument fails to perform in accordance with the terms of the contract.
Financial guarantees are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party
including guarantee for borrowings, settlement, performing contracts and bidding. The credit risk involved in issuing guarantees is essentially the same as that involved in extending facilities to other customers.
Commercial at sight letters of credit represent a financing transaction by the Bank to its customers where the customer is usually the
buyer/importer of goods and the beneficiary is typically the seller/exporter. Credit risk is limited as the merchandise shipped serves as
collateral for the transaction.
Deferred payment letters of credits represent the amounts at risk should the contract be fully drawn upon and the client defaults in
repayment to the beneficiary. Deferred payment letters of credit that were defaulted by clients are recognized by the Bank as granting
of a compulsory loan with a corresponding liability representing the financial obligation of the Bank to pay the beneficiaries and to fulfill
the guarantor obligation.
The Bank requires margin deposits to support credit-related financial instruments when it is deemed necessary. The margin deposit
required varies from nil to 100% of the value of a commitment granted depending on the creditworthiness of clients as assessed by the
Bank.
169
41. CONTINGENT LIABILITIES AND COMMITMENTS (continued)
The outstanding commitments and contingent liabilities as at 31 December are as follows:
31 December 2012
VND
31 December 2011
VND
5,090,625,887,085
2,458,879,524,700
425,428,995,000
24,827,920,000
Bidding guarantees
1,235,913,366,057
605,507,176,045
Settlement guarantees
6,115,880,451,273
4,898,360,357,265
Other guarantees
8,354,556,101,387
5,071,325,280,764
52,063,507,091,294
62,735,809,507,214
73,285,911,892,096
75,794,709,765,988
Contractual performance guarantees
Borrowing guarantees
Letters of credit
42. CASH AND CASH EQUIVALENTS
Cash and cash equivalents included in the consolidated cash flow statement comprise the following balances of the separate balance
sheet:
Cash and cash equivalents on hand
Demand deposits with other banks
Deposits with and loans to other banks with term of
less than three months
Securities with term of less than three months
31 December 2012
VND
31 December 2011
VND
864,942,781,893
917,417,870,812
6,239,058,244,702
6,029,092,624,509
410,496,087,263
639,847,388,468
11,959,209,900,000
35,975,128,138,934
8,431,198,528,762
-
27,904,905,542,620
43,561,486,022,723
170
43. RELATED PARTY TRANSACTIONS
Related party transactions include all transactions undertaken with other entities to which the Bank is related, a party is deemed a
related party to the Bank if:
(a) directly, or indirectly through one or more intermediaries, the party:
- controls, is controlled by, or is under common control with, the Bank (this includes parents and subsidiaries);
- has an interest in the Bank that gives it significant influence over the Bank;
- has joint control over the Bank;
(b) the party is a joint venture in which the Bank is a venturer (see VAS 8 “Interests in Joint Ventures”);
(c) the party is a member of the key management personnel of the Bank or its parent;
(d) the party is a close member of the family of any individual referred to in (a) or (c);
(e) the party is an Bank that is controlled, jointly controlled or significantly influenced by, or for which significant voting power in such
Bank resides with, directly or indirectly, any individual referred to in (c) or (d).
Total due from and due to a some major shareholders (who own 5% of the Bank’s charter capital and above) as at 31 December 2012
are as follows:
Transactions
Deposits
Borrowings from the Bank
Receivable
VND
(Payable)
VND
47,463,609,982
(9,787,061,647,356)
2,790,000,000,000
(2,000,000,000,000)
Total due from and due to some major shareholders (who own 5% of the Bank’s charter capital and above) as at 31 December 2011 are
as follows:
Loại giao dịch
Deposits
Borrowings from the Bank
Receivable
VND
(Payable)
VND
1.047.880.125.828
(5.102.092.989.060)
806.376.741.794
-
171
44. SEGMENT REPORT
44.1
Segment report by geographical area
Segment report by geographical area of the Bank for the year 2012 is as follow:
North
VND
Interest and similar income
10,237,681,364,212
Interest and similar expense
(4,817,241,141,713)
Net interest and similar income
5,420,440,222,499
Fees and commission income
Centre
VND
603,660,970,902
56,565,908,533
(114,283,692,849)
(4,219,143,083)
Net fees and commission income
489,377,278,053
52,346,765,450
(35,824,637,307)
5,039,234,640
195,888,536,521
2,213,527,397
Net Gain/(loss) from other activities
(116,805,239,182)
15,995,535,674
TOTAL OPERATING INCOME
5,953,076,160,584
363,551,029,897
Fees and commission expenses
Net Gain/(loss) from investments
TOTAL OPERATING EXPENSE
(2,116,424,749,390)
Net profit before provision for credit loses
3,836,651,411,194
182,507,554,707
Provision for loans to banks
(162,605,571,688)
-
(865,055,351,114)
(70,618,771,426)
Provision for other impairment
(185,268,828,790)
(5,048,787,167)
PROFIT BEFORE TAX
2,623,721,659,602
106,839,996,114
Current CIT expense
Not applicable
Not applicable
Deferred CIT expense
Not applicable
Not applicable
PROFIT AFTER TAX
Not applicable
Not applicable
172
South
VND
Foreign countries
VND
Total
VND
3,822,539,814,025
83,356,177,003
15,438,141,721,830
(2,980,326,928,414)
(31,406,675,843)
(8,835,583,145,824)
842,212,885,611
51,949,501,160
6,602,558,576,006
240,676,841,314
3,487,534,031
904,391,254,780
(51,559,420,406)
(1,619,672,423)
(171,681,928,761)
189,117,420,908
1,867,861,608
732,709,326,019
32,845,182,256
1,596,444,820
3,656,224,409
-
-
198,102,063,918
372,091,297,712
5,062,305,933
276,343,900,137
1,436,266,786,487
60,476,113,521
7,813,370,090,489
(362,315,376,385)
(36,874,976,183)
(2,696,658,577,148)
1,073,951,410,102
23,601,137,338
5,116,711,513,341
-
-
(162,605,571,688)
(714,828,324,591)
(7,432,570,809)
(1,657,935,017,940)
(16,302,681,695)
-
(206,620,297,652)
342,820,403,816
16,168,566,529
3,089,550,626,061
Not applicable
Not applicable
(767,049,881,430)
Not applicable
Not applicable
(2,464,844,750)
Not applicable
Not applicable
2,320,035,899,881
173
44. SEGMENT REPORT (continued)
44.1
Segment report by geographical area (continued)
Segment report by geographical area of the Bank as at 31 December 2012 is as follow:
North
VND
Centre
VND
South
VND
Foreign
currencies
VND
Total
VND
Addition of
asset expense
137,835,297,738
35,290,952,367
10,322,333,778
5,778,183,617
189,226,767,500
Tangible fixed
assets
96,712,854,910
35,290,952,367
10,295,333,778
5,223,456,913
147,522,597,968
Intangible
fixed assets
41,122,442,828
-
27,000,000
554,726,704
41,704,169,532
TOTAL ASSETS
145,612,540,329,096
5,928,490,509,374
22,154,595,445,784
1,914,337,781,581
175,609,964,065,835
TOTAL LIABILITIES
132,859,049,763,172
5,851,790,345,861
21,466,616,559,265
1,902,661,002,367
162,080,117,670,665
44.2
Segment report by business activities
For management purpose, the Bank is organized into segments based on the following business activities:
Individual and corporate customers:
Services and products provided for individual customers include:
-deposits
-credit;
-
card and money tranfer services;
Services for corporate customers such as credits, guarantees, deposits….
Investments:
Securities investment and real estates
Interbank operations:
Mobilizing, lending and others in interbank market
Assets management:
Investment funds
174
175
44. SEGMENT REPORT (continued)
44.2
Segment report by business activities (continued)
Income, expenses, assets and liabilities by business segment of the Bank for the year ended 31 December 2012 are as follows:
Individuals and
corporate customers
Investments
Interbank
External
2,116,356,955,443
2,578,683,339,233
2,840,810,933,319
Internal
1,067,075,292,113
(656,730,584,722)
(411,780,417,140)
TOTAL OPERATION INCOME
3,183,432,247,556
1,921,952,754,511
2,429,030,516,179
TOTAL OPERATION EXPENSE
(728,064,183,419)
(413,854,506,450)
(523,043,671,633)
2,455,368,064,137
1,508,098,248,061
1,905,986,844,546
Provision for credit losses of loans
to banks
-
-
(162,605,571,688)
Provision for credit losses of loans
to customers
(1,657,935,017,940)
-
-
-
-
-
797,433,046,197
1,508,098,248,061
1,743,381,272,858
Current enterprise income tax
expense
Not applicable
Not applicable
Not applicable
Deferred enterprise income tax
expense
Not applicable
Not applicable
Not applicable
PROFIT/(LOSS) AFTER TAX
Not applicable
Not applicable
Not applicable
Purchase of fixed assets
-
-
-
-
-
-
Intangible fixed assets
-
-
-
73,215,294,657,152
43,221,077,607,229
49,345,994,394,284
118,367,344,049,277
3,988,452,807,023
31,417,294,526,007
Income
Net operation income
Other provision expenses
PROFIT/(LOSS) BEFORE TAX
TOTAL ASSETS
TOTAL LIABILITIES
176
Currency: VND
Assets management
Non-attributable
Total
239,022,698,242
38,496,164,252
7,813,370,090,489
(136,956,025,545)
138,391,735,294
-
102,066,672,697
176,887,899,546
7,813,370,090,489
(21,978,038,928)
(1,009,718,176,718)
(2,696,658,577,148)
80,088,633,769
(832,830,277,172)
5,116,711,513,341
-
-
(162,605,571,688)
-
-
(1,657,935,017,940)
-
(206,620,297,652)
(206,620,297,652)
80,088,633,769
(1,039,450,574,824)
3,089,550,626,061
Not applicable
Not applicable
(767,049,881,430)
Not applicable
Not applicable
(2,464,844,750)
Not applicable
Not applicable
2,320,035,899,881
7,897,529,915
181,329,237,585
189,226,767,500
7,605,829,115
139,916,768,853
147,522,597,968
291,700,800
41,412,468,732
41,704,169,532
2,079,919,391,339
7,747,678,015,831
175,609,964,065,835
1,102,571,652,568
7,204,454,635,790
162,080,117,670,665
177
45.RISK MANAGEMENT POLICIES FOR FINANCIAL INSTRUMENTS
The Bank‘s business goal is to be a multi-purpose financial group. Accordingly, the use of financial instruments including customers’
deposits and investments in highly profitable financial assets is the key to achieve the premium interest difference for the Bank. In
terms of risk management, the Bank is required to maintain a healthy structure for its assets, liabilities and equity (including both
consolidated balance sheet and off-balance sheets items) for safety and risk minimization purpose in the Bank’s operations. In
addion, the Bank has used some of its working capital to invest in trading securities or loans to other banks. Foreign currency risk and
interest rate risk are controlled by limitations to avoid over-concentration and the Bank also involves in diversifying activities with risk
balancing effect in order to minimize the risks. The ownership of highly profitable financial instruments helps smoothing the structure
of the consolidated balance sheet and reducing liquidity risk. Moreover, the Bank engages in hedging activities like currency swaps
for interest rate risk management.
While managing the credit risks, the Bank has made good use of the credit manuals which entails the policies, procedures and guidance to standardize the credit activities of the Bank. Liquidity risk is reduced thanks to cash and cash equivalents on hand in forms
of Nostro accounts, term-deposits at the SBV and other credit institutions. Ratios which take risk into account are also used to keep
control of liquidity risks. The Bank evaluates interest rates on a regular basis, compares local interest rates with international ones for
timing adjustments. In addition, internal audit has become more efficient because of the Centralized Capital Management System and
Centralized Payment System which enables all treasury activities and payments to be conducted by the Head Office. This gives the
Bank closer supervision on the changes in capital to reduce errors and unnecessary procedures.
45.1
Credit risk
Credit risk is the inherent risk incurred in banking activities that the Bank may face when clients do not or cannot fulfill its obligations
as committed.
The Bank has maintained a policy of credit risk management to ensure the following basic principles:
- set up an appropriate credit risk management environment;
- operate in a healthy process for granting credit facilities;
- maintain an appropriate management, measurement and monitoring credit process; and
- ensure adequate controls for credit risk
The approval process for granting credit must go through several management levels to ensure a credit facility is reviewed independently; together with the credit limit applied to each competent level. In addition, the participation of Credit Council in the credit
approval model also helps to ensure a highest quality and concentrated approval process.
The Bank has used internal credit scoring system approved by the SBV as a management tool of credit risk, under which each customer is classified at each level of risk. The classification can be amended and updated regularly. Data and results of customers’ credit
scoring on the system are controlled and centralized at the Head Office. This is the basis for granting, providing services to customers
as well as providing provision for credit losses as regulated.
45.1.1 Financial assets have not been overdue or impaired
Financial assets that have not been overdue or impaired of the Bank and its subsidiaries include current loans classified in accordance
with Decision No. 493/2005/QD-NHNN and Decision No. 18/2007/QD-NHNN; securities, receivables and other financial assets which
are not overdue and not provided for allowance in accordance with Circular No. 228/2009/TT-BTC.
The Bank and its subsidiaries assess that these financial assets can be recovered in full and on due in the future.
178
45.1.2Financial assets overdue but not impaired
Aging of financial assets that are overdue but not impaired is as follows:
Overdue
Within 90 days
VND
91-180 days
VND
181-360 days
VND
Over 360 days
VND
Deposits with other banks
-
-
-
-
-
-
-
-
Trading securities
-
-
-
-
3,032,206,368,110
299,126,568,876
436,294,498,038
918,874,879,195
80,000,000,000
-
171,000,000,000
250,000,000,000
Available-for-sale securities
-
-
-
-
Held-to-maturity securities
80,000,000,000
-
171,000,000,000
250,000,000,000
Other assets
281,725,555,539
-
23,213,753,332
257,000,000,000
Receivables
-
-
-
Interest receivables
-
-
-
-
281,725,555,539
-
23,213,753,332
257,000,000,000
3,393,931,923,649
299,126,568,876
Assets
Due from banks
Loans and advances to
customers
Other assets
Total
630,508,251,370 1,425,874,879,195
Financial assets are overdue but not impaired is due to the fact that the Bank holds enough collaterals to compensate for credit losses
according to current regulations of the State Bank.
The collaterals for these financial assets are real estates, physical assets, valuable papers and others. The Bank has not determined
the fair value of these assets yet due to lack of detail guidance and reliable market information.
179
45.RISK MANAGEMENT POLICIES (continued)
45.2Market risk
45.2.1Interest rate risk
The duration for interest rate to be re-priced represents the remaining period of assets and liabilities as calculated from the consolidated balance sheet date to the latest re-pricing date of interest rate.
The following assumptions and conditions are applied in the analysis of interest rate risk of the Bank’s assets and liabilities:
Cash, gold, jewelry; capital contribution, long-term investments and other assets (including fixed assets and other assets) are classified as non re-pricing items.
Deposits at the state banks are classified as demand deposits and the interest rate re-pricing is within 1 month.
The duration for the interest rate re-pricing of investment securities is calculated based on the maturity date of each kind of securities from the consolidated balance sheet date.
The duration for the interest rate re-pricing of placements with and loans to other banks; loans and advances to customers; deposits of and loans from the SBV and other banks; and customer deposits are determined as follows:
- With fixed interest rate: the duration is calculated from the consolidated balance sheet date to the maturity date.
- With floating interest rate: the duration is calculated from the consolidated balance sheet to the nearest time of the
interest rate re-pricing.
The duration for the interest rate re-pricing of valuable papers is calculated from the consolidated balance sheet date to the maturity date of each kind of valuable papers.
The duration for the interest rate re-pricing of other borrowed funds in which the risks are born by the Bank is calculated based on the maturity date of each fund borrowed and loans at the consolidated balance sheet date.
Other liabilities duration for the interest rate re-pricing is calculated based on the maturity date for each item.
180
181
45.2Market risk (continued)
45.2.1Interest rate risk (continued)
Classification of assets and liabilities based on re-pricing term as at 31 December 2012 is as follow:
Non re-pricing
Up to 1 month
From 1 - 3 months
Cash and cash equivalents on
hand
864,942,781,893
-
-
-
6,239,058,244,702
-
Due from banks
11,783,378,924
13,146,603,368,339
19,083,393,000,007
Trading securities (*)
21,721,569,088
469,201,559,034
-
-
30,024,205,469,449
37,421,174,218,669
119,277,080,000
6,379,880,179,621
3,438,357,804,804
Long-term investments (*)
1,695,217,566,085
-
-
Fixed assets
1,497,636,387,392
-
-
151,733,579,986
-
-
7,670,390,315,363
3,959,541,647
-
12,032,702,658,731
56,262,908,362,792
59,942,925,023,480
Borrowings from the Government and the State Bank of
Vietnam
-
488,477,289,152
-
Due to banks
-
11,325,090,521,785
9,388,660,904,500
Due to customers
-
52,343,970,788,945
33,329,752,162,116
Other financial derivatives and
financial liabilities
-
-
-
-
4,003,000,000
84,000,000
Valuable paper issued
-
58,393,288
1,000,000,000,000
Other liabilities (*)
9,474,008,679,612
14,885,379,179
-
Total liabilities
9,474,008,679,612
64,176,485,372,349
43,718,497,066,616
Net exposure
2,558,693,979,119
(7,913,577,009,557)
16,224,427,956,864
Assets
Loans and advances to customers (*)
Investment securities (*)
Investment property
Other assets (*)
Total assets
Liabilities
(*): Balances of these items do not include provisions.
182
Interest rate is re-priced within
Currency: VND
From 3 - 6 months
From 6 - 12 months
From 1 – 5 years
Over 5 years
Total
-
-
-
-
864,942,781,893
-
-
-
-
6,239,058,244,702
6,730,088,754,248
2,133,120,000,000
-
2,000,000,000,000
43,104,988,501,518
-
-
-
-
490,923,128,122
4,688,381,696,516
637,839,094,486
1,666,678,844,534
40,285,013,718
74,478,564,337,372
4,742,979,511,050
1,313,670,083,359
24,050,023,413,473
2,000,000,000,000
42,044,188,072,307
-
-
-
-
1,695,217,566,085
-
-
-
-
1,497,636,387,392
-
-
-
-
151,733,579,986
-
-
-
-
7,674,349,857,010
16,161,449,961,814
4,084,629,177,845
25,716,702,258,007
4,040,285,013,718
178,241,602,456,387
-
-
-
-
488,477,289,152
5,559,036,854,248
2,239,318,855,298
-
2,000,000,000,000
30,512,107,135,831
12,782,695,372,049
9,124,681,530,262
10,166,316,498,901
-
117,747,416,352,273
-
26,173,405,229
-
-
26,173,405,229
100,500,000
839,812,000
184,564,470,500
-
189,591,782,500
10,000,000
420,000,000,000
-
2,000,000,000,000
3,420,068,393,288
-
-
-
-
9,488,894,058,791
18,341,842,726,297
11,811,013,602,789
10,350,880,969,401
4,000,000,000,000
161,872,728,417,064
(2,180,392,764,483)
(7,726,384,424,944)
15,365,821,288,606
40,285,013,718
16,368,874,039,323
183
45.2 Market risk (continued)
45.2.1Interest rate risk (continued)
Classification of assets and liabilities based re-pricing term as at 31 December 2011 was as follows:
Non re-pricing
Up to 1 month
From 1 - 3 months
917,417,870,812
-
-
Balances with the SBV
-
6,029,092,624,509
-
Due from banks
-
20,494,360,878,772
16,123,096,792,495
1,194,306,537,316
-
-
177,205,063,600
36,297,325,792,325
21,224,114,201,127
1,003,210,768,605
965,637,681,717
1,679,954,467,712
1,886,581,185,864
-
-
Fixed assets
1,551,406,310,100
-
-
147,138,579,986
-
-
3,600,520,678,659
3,197,820,398,143
25,000,000,000
10,477,786,994,942
66,984,237,375,466
39,052,165,461,334
12,809,504,500
12,727,918,414,309
10,186,055,334,565
Due to customers
-
76,365,165,333,257
10,739,925,637,140
-
4,223,000,000
74,000,000
-
1,334,630,177
217,000,000
-
7,261,232,200
15,376,221,262
4,211,758,644,826
1,200,081,935,483
-
Total liabilities
4,224,568,149,326
90,305,984,545,426
20,941,648,192,967
Net exposure
6,253,218,845,616
(23,321,747,169,960)
18,110,517,268,367
Assets
hand
Investment property
Other assets (*)
Total assets
Liabilities
Due to banks
184
Interest rate is re-priced within
Currency: VND
From 3 - 6 months
From 6 - 12 months
From 1 – 5 years
Over 5 years
Total
-
-
-
-
917,417,870,812
-
-
-
-
6,029,092,624,509
5,049,306,000,000
-
-
-
41,666,763,671,267
-
-
-
-
1,194,306,537,316
1,044,543,859,602
122,571,432,000
162,583,170,584
16,493,430,192
59,044,836,949,430
2,783,389,176,016
2,290,695,060,464
8,924,470,182,208
2,225,000,000,000
19,872,357,336,722
-
-
-
-
1,886,581,185,864
-
-
-
-
1,551,406,310,100
-
-
-
-
147,138,579,986
-
-
-
2,000,000,000,000
8,823,341,076,802
8,877,239,035,618
2,413,266,492,464
9,087,053,352,792
4,241,493,430,192
141,133,242,142,808
3,641,561,003,176
104,140,000,000
-
-
26,672,484,256,550
1,521,688,883,760
835,047,218,808
85,501,570,600
1,344,320,266
89,548,672,963,831
108,500,000
8,947,812,000
188,151,232,500
-
201,504,544,500
1,000,010,000,000
1,030,070,000,000
500,000,000,000
2,000,000,000,000
4,531,631,630,177
-
-
-
-
22,637,453,462
-
-
-
2,000,000,000,000
7,411,840,580,309
6,163,368,386,936
1,978,205,030,808
773,652,803,100
4,001,344,320,266
128,388,771,428,829
2,713,870,648,682
435,061,461,656
8,313,400,549,692
240,149,109,926
12,744,470,713,979
185
45.2.2 Currency risk
Currency risk is the risk that the value of a financial instrument fluctuates due to changes of foreign exchange rates.
As the Bank is established and operates in Vietnam, VND is the reporting currency. The major currency, in which the Bank deals in,
is also VND. During the year, exchange rate between VND & USD fluctuated in narrow margin. The Bank’s loans and advances were
mainly denominated in VND with the remainder was mainly in USD. However, some of the Bank’s other assets are in currencies
other than VND and USD. The Bank’s management has set limits on positions by currency. Positions are monitored on a daily basis
and hedging strategies are used to ensure positions are maintained within established limits.
Classification of assets and liabilities in foreign currencies which are converted into VND as at 31 December 2012 is as follows:
Currency: VND
USD as converted
EUR as converted
Other foreign currencies as converted
Total
on hand
128,137,006,091
34,896,071,976
8,382,400,112
171,415,478,179
Balances with the State
Banks
788,072,012,973
-
134,830,568,404
922,902,581,377
Due from banks
13,176,500,963,281
107,480,896,295
203,968,806,542
13,487,950,666,118
customers
17,440,119,865,233
313,612,675,428
153,187,318,625
17,906,919,859,286
312,420,000,000
-
-
312,420,000,000
-
-
113,520,000,000
113,520,000,000
Long-term investments
-
722,356,800
-
722,356,800
4,104,155,317
-
4,824,876,868
8,929,032,185
-
-
-
-
2,906,290,695,456
484,008,315,281
15,554,266,415
3,405,853,277,152
Assets
Trading securities
Fixed assets
Investment property
Other assets
186
Total assets
34,755,644,698,351
940,720,315,780
634,268,236,966
36,330,633,251,097
-
-
-
-
Due to banks
10,887,478,697,929
82,105,305,259
73,904,214,255
11,043,488,217,443
Due to customers
25,221,596,961,364
878,301,138,263
175,100,227,708
26,274,998,327,335
(2,271,362,094,076)
(482,889,464,221)
63,580,800,000
(2,690,670,758,297)
-
-
-
-
Other liabilities
2,793,084,329,478
485,132,440,093
61,944,202,365
3,340,160,971,936
Total liabilities
36,630,797,894,695
962,649,419,394
374,529,444,328
37,967,976,758,417
FX position on-balancesheet
(1,875,153,196,344)
(21,929,103,614)
259,738,792,638
(1,637,343,507,320)
FX position off-balancesheet
1,401,995,164,000
-
-
1,401,995,164,000
FX position on and offbalance-sheet
(473,158,032,344)
(21,929,103,614)
259,738,792,638
(235,348,343,320)
Liabilities
Borrowings from the
Government and the State
Bank of Vietnam
Other financial derivatives
and financial liabilities
187
45.2.2 Currency risk (continued)
Classification of assets and liabilities in foreign currencies which are converted into VND as at 31 December 2011 was as follows:
Currency: VND
USD as converted
EUR as converted
Total
127,916,913,007
31,572,380,411
4,033,737,224
163,523,030,642
Balances with the state
banks
3,316,666,846,674
-
131,047,890,535
3,447,714,737,209
Due from banks
11,667,272,266,951
801,538,086,635
149,380,102,476
12,618,190,456,062
197,866,000,000
-
-
197,866,000,000
13,848,865,497,082
432,438,665,656
253,626,262,196
14,534,930,424,934
218,694,000,000
-
114,400,000,000
333,094,000,000
Fixed assets
1,263,218,200
-
5,072,416,107
6,335,634,307
Other assets
167,184,065,373
2,942,017,337
21,894,461,181
192,020,543,891
Total assets
29,545,728,807,287
1,268,491,150,039
679,454,869,719
31,493,674,827,045
7,562,346,998,915
305,931,635,298
43,484,847
7,868,322,119,060
21,510,840,222,077
957,948,068,121
227,561,365,930
22,696,349,656,128
(743,402,427,538)
-
188,183,600,000
(555,218,827,538)
Assets
on hand
Trading securities
customers
Liabilities
Due to banks
Due to customers
Other financial derivatives
and financial liabilities
188
USD as converted
EUR as converted
Total
-
-
-
-
-
-
-
-
Other liabilities
801,919,151,871
6,391,903,248
2,149,127,490
810,460,182,609
Total liabilities
29,131,703,945,325
1,270,271,606,667
417,937,578,267
30,819,913,130,259
FX position on-balancesheet
414,024,861,962
(1,780,456,628)
261,517,291,452
673,761,696,786
FX position off-balancesheet
1,032,987,570,800
-
-
1,032,987,570,800
FX position on and offbalance-sheet
1,447,012,432,762
(1,780,456,628)
261,517,291,452
1,706,749,267,586
45.2.3Liquidity risk
The maturity term of assets and liabilities represents the remaining period of assets and liabilities as calculated from the
consolidated balance sheet date to the settlement date as stipulated in contracts or issuance terms and conditions.
The following assumptions and conditions are applied in the analysis of overdue status of the Bank’s assets and liabilities:
- Deposits at the state banks are classified as demand deposits which include compulsory deposits. The balance of compulsory deposits depends on the proportion and terms of the Bank’s customer deposits.
- The maturity term of investment securities is calculated based on the maturity date of each kind of securities.
- The maturity term of placements with and loans to other banks; and loans to customers is determined on the maturity date
as stipulated in contracts. The actual maturity term may be altered because loan contracts may be extended.
- The maturity term of equity investments is considered as more than one year because these investments do not have
specific maturity date.
- The maturity term of deposits and borrowings from other banks; and customer’s deposits is determined based on features
of these items or the maturity date as stipulated in contracts. Demand deposits are transacted as required by customers, and
therefore, being classified as current accounts. The maturity term of borrowings and term deposits is determined based on
the maturity date in contracts. In fact, these amounts may be rotated, and therefore, they last beyond the original maturity
date.
- The maturity term of fixed assets is determined on the remaining useful life of assets.
- The maturity of valuable papers issued is determined based on the actual maturity of each type of valuable paper.
- The maturity of other borrowed fund is calculated based on the actual maturity at the reporting date of each borrowed
fund.
- The maturity of other liabilities is determined based on the actual maturity of each item.
189
45.2.3Liquidity risk (continued)
Classification of assets and liabilities based on the maturity as at 31 December 2012 is as follows:
Overdue
Up to 1 month
1 - 3 months
hand
-
864,942,781,893
-
-
6,239,058,244,702
-
Due from banks(*)
-
13,058,547,365,080
19,183,232,382,190
21,721,569,088
469,201,559,034
-
4,400,286,966,358
12,100,949,451,402
22,613,466,493,549
564,111,600,000
4,141,014,308,328
3,238,357,804,804
-
-
-
Fixed assets
-
-
-
Investment property
-
-
-
561,456,816,103
6,327,851,421,474
49,738,541,632
5,547,576,951,549
43,201,565,131,913
45,084,795,222,175
Borrowings from the Government and the SBV
-
488,477,289,152
-
Due to banks
-
11,337,900,026,285
9,375,851,400,000
Due to customers
-
42,787,059,904,031
25,418,018,737,843
-
-
-
-
5,048,000,000
4,692,300,000
-
58,393,288
1,000,000,000,000
461,537,315
2,544,488,555,101
-
Total liabilities
461,537,315
57,163,032,167,857
35,798,562,437,843
5,547,115,414,234
(13,961,467,035,944)
9,286,232,784,332
Assets
Other assets (*)
Total assets
Liabilities
Net exposure
190
Before due date
Currency: VND
3 - 12 months
1 - 5 years
Above 5 years
Total
-
-
-
864,942,781,893
-
-
-
6,239,058,244,702
8,863,208,754,248
-
2,000,000,000,000
43,104,988,501,518
-
-
-
490,923,128,122
22,418,255,519,333
6,315,366,665,477
6,630,239,241,253
74,478,564,337,372
4,642,392,405,805
27,458,311,953,370
2,000,000,000,000
42,044,188,072,307
-
-
1,695,217,566,085
1,695,217,566,085
-
766,859,221,296
730,777,166,096
1,497,636,387,392
-
-
151,733,579,986
151,733,579,986
200,144,505,477
280,438,251,150
254,720,321,174
7,674,349,857,010
36,124,001,184,863
34,820,976,091,293
13,462,687,874,594
178,241,602,456,387
-
-
-
488,477,289,152
7,798,355,709,546
-
2,000,000,000,000
30,512,107,135,831
25,599,519,166,972
21,305,574,069,028
2,637,244,474,399
117,747,416,352,273
26,173,405,229
-
-
26,173,405,229
31,342,900,000
148,508,582,500
-
189,591,782,500
420,010,000,000
-
2,000,000,000,000
3,420,068,393,288
6,943,943,966,375
-
-
9,488,894,058,791
40,819,345,148,122
21,454,082,651,528
6,637,244,474,399
161,872,728,417,064
(4,695,343,963,259)
13,366,893,439,765
6,825,443,400,195
16,368,874,039,323
191
45.2.3Liquidity risk (continued)
Classification of assets and liabilities based on the maturity as at 31 December 2011 was as follows:
Overdue
Up to 1 month
1 - 3 months
hand
-
917,417,870,812
-
-
6,029,092,624,509
-
Due from banks
-
20,466,641,914,680
16,150,815,756,587
-
1,194,306,537,316
-
2,147,671,837,373
7,294,417,029,428
16,842,863,479,479
-
965,637,723,633
1,694,069,479,601
-
-
-
Fixed assets
-
-
55,955,557
Investment properties
-
-
-
411,145,763,294
4,116,940,317,325
773,753,568,323
2,558,817,600,667
40,984,454,017,703
35,461,558,239,547
Due to banks
-
12,720,727,918,809
10,186,055,334,565
Due to customers
-
36,400,618,885,255
16,449,146,558,283
-
4,223,000,000
74,000,000
-
1,334,630,177
217,000,000
Financial derivatives and other
-
7,261,232,200
15,376,221,262
-
527,714,190,957
2,027,576,017,574
Total liabilities
-
49,661,879,857,398
28,678,445,131,684
2,558,817,600,667
(8,677,425,839,695)
6,783,113,107,863
Assets
Other assets (*)
Total assets
Liabilities
Net exposure
(*): Balances of these items do not include provisions
192
Before due date
Currency: VND
3 - 12 months
1 - 5 years
Above 5 years
Total
-
-
-
917,417,870,812
-
-
-
6,029,092,624,509
5,049,306,000,000
-
-
41,666,763,671,267
-
-
-
1,194,306,537,316
19,042,754,949,665
11,912,830,794,087
1,804,298,859,398
59,044,836,949,430
4,630,269,206,025
10,305,900,927,463
2,276,480,000,000
19,872,357,336,722
-
1,602,560,629,236
284,020,556,628
1,886,581,185,864
1,339,535,035
1,270,369,567,541
279,641,251,967
1,551,406,310,100
-
147,138,579,986
-
147,138,579,986
708,134,032,284
622,321,456,380
2,191,045,939,196
8,823,341,076,802
29,431,803,723,009
25,861,121,954,693
6,835,486,607,189
141,133,242,142,808
3,765,701,003,176
-
-
26,672,484,256,550
18,260,994,382,895
16,397,561,345,295
2,040,351,792,103
89,548,672,963,831
9,056,312,000
188,151,232,500
-
201,504,544,500
2,030,080,000,000
500,000,000,000
2,000,000,000,000
4,531,631,630,177
-
-
-
22,637,453,462
2,012,292,244,981
854,528,873,550
1,989,729,253,247
7,411,840,580,309
26,078,123,943,052
17,940,241,451,345
6,030,081,045,350
128,388,771,428,829
3,353,679,779,957
7,920,880,503,348
805,405,561,839
12,744,470,713,979
193
46.OPERATING LEASE COMMITMENTS
31 December 2012
VND
31 December 2011
VND
336,332,880,846
604,995,157,198
- due within one year
28,858,006,666
39,102,506,322
- due from two to five years
166,211,391,617
204,314,713,822
141,263,482,563
361,577,937,054
Non-cancelable operating lease
commitments
In which:
- due after five years
47. ADDITIONAL DISCLOSURES ON FINANCIAL ASSETS AND FINANCIAL LIABILITIES UNDER CIRCULAR 210/2009/TT-BTC
On 6 November 2009, the Ministry of Finance issued Circular No.210/2009/TT-BTC providing guidance for the adoption of the International Financial Reporting Standards on presentation and disclosures of financial instruments (“Circular 210”) with effectiveness from
financial years beginning on or after 1 January 2011.
As Circular 210 only requires the presentation of financial statements and disclosures of financial instruments, the below definitions
of financial assets, financial liabilities and other relating definitions are applied solely for the preparation of Note 47. The Bank’s assets
and liabilities are still recognized and recorded in accordance with Vietnamese Accounting Standards and System for Credit Institutions
and other relevant regulations of the State Bank of Vietnam.
Financial assets
The financial assets of the Bank and its subsidiaries under the scope of Circular 210 including cash, gold, gemstones, balance at the
State Bank of Vietnam and other credit institutions, loans to customer and other credit institutions, trading securities, investment
securities, receivables and other assets arising from currency derivative contracts.
According to Circular 210, financial assets are classified as appropriate, for the purpose of disclosures in the notes to the consolidated
financial statements, into one of the following categories:
Financial assets at fair value through profit or loss:
A financial asset at fair value through profit and loss is the financial asset that meets either of the following conditions
a)
It is classified as held for trading. A financial asset is classified as held for trading if:
- It is acquired or incurred principally for the purpose of selling or repurchasing it in the near term;
- There is evidence of a recent actual pattern of short-term profit-taking; or
- It is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instru
ment).
b)
Upon initial recognition it is designated by the Bank as at fair value through profit or loss.
194
47. ADDITIONAL DISCLOSURES ON FINANCIAL ASSETS AND FINANCIAL LIABILITIES UNDER CIRCULAR 210/2009/TT-BTC (continued)
Financial assets (continued)
a)
b)
c)
Held-to-maturity investments:
Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed matu
rity that the Bank has the positive intention and ability to hold to maturity other than:
Those that the Bank upon initial recognition designates as at fair value through profit or loss;
Those that the Bank designates as available-for-sale;
Those that meet the definition of loans and receivables.
Loans and receivables:
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market other than:
a)
Those that the Bank intends to sell immediately or in the near term, which shall be classified as held for trading, and those that the Bank upon initial recognition designate as at fair value through profit or loss;
b)
Those that the Bank upon initial recognition designate as available-for-sale; or
c)
Those for which the holder may not recover substantially all of its initial investment, other than because of credit deteriora
tion, which shall be classified as available-for-sale.
Availble-for-sale financial assets: Là các tài sản tài chính phi phái sinh được xác định là sẵn sàng để bán hoặc không được phân loại là:
a)
các khoản cho vay và các khoản phải thu;
b)
các khoản đầu tư giữ đến ngày đáo hạn;
c)
các tài sản tài chính ghi nhận theo giá trị hợp lý thông qua Báo cáo kết quả hoạt động kinh doanh.
Financial liabilities
Financial liabilities of the Bank under the scope of Circular No.210/2009/TT-BTC include borrowings from the Government and the
State Bank of Vietnam, deposits and borrowings from other banks, customer deposits, other borrowed funds, valuable papers issued,
other liabilities and liabilities arising from currency derivative contracts.
According to Circular No. 210/2009/TT-BTC, for the purpose of disclosure in the notes to the consolidated financial statements, are
appropriately classified into:
Financial liability at fair value through profit or loss
Financial liability at fair value through profit or loss is a financial liability that meets either of the following conditions:
a)
It is classified as held for trading. A financial liability is classified as held for trading if:
It is acquired or incurred principally for the purpose of selling or repurchasing it in the near term;
There is evidence of a recent actual pattern of short-term profit-taking; or
It is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instru
ment).
b)
Upon initial recognition it is designated by the Bank and its subsidiary as at fair value through profit or loss.
Financial liabilities at amortised cost Financial liabilities that are not classified as at fair value through profit or loss are classified as at amortized cost.
195
47. ADDITIONAL DISCLOSURES ON FINANCIAL ASSETS AND FINANCIAL LIABILITIES UNDER CIRCULAR No. 210/2009/TT-BTC (continued)
47.1
Carrying value and fair value of financial assets and liabilities
The carrying value and fair value of financial assets of the Bank and its subsidiaries as at 31 December 2012 are presented in the following
table:
At fair values
through profit and loss
Held-to-maturity
Loans and receivables
hand
-
-
-
-
-
-
Due from banks
-
-
-
490,923,128,122
-
-
-
-
74,478,564,337,372
Available-for-sale investment
securities
-
-
-
Held-to-maturity investment
securities
-
4,097,809,933,272
-
Other financial assets
-
-
7,016,416,012,306
490,923,128,122
4,097,809,933,272
81,494,980,349,678
Trading securities
(*): The Bank has not yet determined the fair value of these items due to it lacks of detail guidances
from Vietnamese Accounting Standards and System. ‘s annual report 2012
196
Carrying value
Currency: VND
Available-for-sale
Other assets at
amortized cost
Total
Fair value
-
864,942,781,893
864,942,781,893
864,942,781,893
-
6,239,058,244,702
6,239,058,244,702
6,239,058,244,702
-
43,104,988,501,518
43,104,988,501,518
(*)
-
-
490,923,128,122
(*)
-
-
74,478,564,337,372
(*)
37,946,378,139,035
-
37,946,378,139,035
(*)
-
-
4,097,809,933,272
(*)
-
2,347,122,728,789
9,363,538,741,095
(*)
37,946,378,139,035
52,556,112,256,902
176,586,203,807,009
(*)
197
47. ADDITIONAL DISCLOSURES ON FINANCIAL ASSETS AND FINANCIAL LIABILITIES UNDER CIRCULAR 210/2009/TT-BTC (continued)
47.1
Carrying value and fair value of financial assets and liabilities (continued)
The carrying value and fair value of financial liabilities of the Bank and its subsidiaries as at 31 December 2012 are presented in the
following table:
At fair values
through Profit and Loss
Held-to-maturity
Borrowings from the Government and the SBV
-
-
488,477,289,152
Due to banks
-
-
30,512,107,135,831
Due to customers
-
-
-
26,173,405,229
-
-
-
-
189,591,782,500
-
-
-
Other financial liabilities
-
-
-
26,173,405,229
-
31,190,176,207,483
Derivatives and other financial
liabilities
Borrowings and payables
(*): The Bank has not yet determined the fair vaule of these items due to it lacks of detail guidances
from Vietnamese Accounting Standards and System.
198
Carrying value
Currency: VND
Available-for-sale
Other liabilities
at amortized cost
Total
Fair value
-
-
488,477,289,152
(*)
-
-
30,512,107,135,831
(*)
-
117,747,416,352,273
117,747,416,352,273
(*)
-
-
26,173,405,229
(*)
-
-
189,591,782,500
(*)
-
3,420,068,393,288
3,420,068,393,288
(*)
-
9,488,894,058,791
9,488,894,058,791
(*)
-
130,656,378,804,352
161,872,728,417,064
(*)
199
47. ADDITIONAL INFORMATION ON FINANCIAL ASSETS AND LIABILITIES UDER CIRCULAR NO 210/2009/TT – BTC (continued)
47.1
The carrying value and fair value of financial assets of the Bank and its subsidiaries as at 31 December 2011 were presented in this below table:
At fair values
through Profit and Loss
Held-to-maturity
hand
-
-
-
-
-
-
Due from banks
-
-
-
1,194,306,537,316
-
-
Trading securities
Borrowings and payables
Financial derivatives
-
-
-
-
59,044,836,949,430
Available-for-sale investment
securities
-
-
-
Held-to-maturity investment
securities
-
5,003,694,000,000
-
Other financial assets
-
-
-
1,194,306,537,316
5,003,694,000,000
59,044,836,949,430
200
Carrying value
Currency: VND
Available-for-sale
Other liabilities
at amortized cost
Total
Fair value
-
917,417,870,812
917,417,870,812
917,417,870,812
-
6,029,092,624,509
6,029,092,624,509
6,029,092,624,509
-
41,666,763,671,267
41,666,763,671,267
(*)
-
-
1,194,306,537,316
(*)
-
-
-
(*)
-
-
59,044,836,949,430
(*)
14,868,663,336,722
-
14,868,663,336,722
(*)
-
-
5,003,694,000,000
(*)
-
8,764,565,702,659
8,764,565,702,659
(*)
14,868,663,336,722
57,377,839,869,247
137,489,340,692,715
(*)
201
47. ADDITIONAL INFORMATION ON FINANCIAL ASSETS AND LIABILITES UNDER CIRCULAR NO 210/2009/TT – BTC (continued)
47.1
The carrying value and fair value of financial liabilities of the Bank and its subsidiaries as at 31 December 2011 were presented in
the following table:
Trading
Held-to-maturity
Loans and Receivables
Due to banks
-
-
-
Due to customers
-
-
-
22,637,453,462
-
-
-
-
201,504,544,500
-
-
-
Other financial liabilities
-
-
-
22,637,453,462
-
201,504,544,500
Financial derivatives
202
Carrying value
Currency: VND
Available-for-sale
Other assets and
liabilities recorded
at atmortized value
Total
Fair value
-
26,672,484,256,550
26,672,484,256,550
(*)
-
89,548,672,963,831
89,548,672,963,831
(*)
-
-
22,637,453,462
(*)
-
-
201,504,544,500
(*)
-
4,531,631,630,177
4,531,631,630,177
(*)
-
5,984,963,488,180
5,984,963,488,180
(*)
-
126,737,752,338,738
126,961,894,336,700
(*)
203
48.RECLASSIFICATION OF CORRESPONDING FIGURES
The Bank reclassified certain items in the prior year’s consolidated cash flow statement in conformity with the current
year’s presentation as follows:
Notes
31 December 2011
(reported)
VND
Reclassification
VND
31 December 2012
(restated)
VND
Fees and commission
income
48.1
1,190,897,020,145
(1,190,897,020,145)
-
Fees and commission
expenses
48.1
(548,245,078,865)
548,245,078,865
-
Income from service
receipt
48.1
-
642,651,941,280
642,651,941,280
Gain/(loss) from trading
foreign currencies
48.2
(85,325,909,386)
85,325,909,386
-
Income from investments
48.2
(113,212,938,591)
113,212,938,591
-
Receipts/(payments)
from foreign currency
trading and inestment
securities
48.2
-
(198,538,847,977)
(198,538,847,977)
Other income
48.3
14,805,529,465
(14,805,529,465)
-
Other expenses
48.3
(856,824,082,445)
856,824,082,445
-
Payment for other operating activities
48.3
-
(842,018,552,980)
(842,018,552,980)
(Increase)/ decrease in
trading securities
48.4
-
(3,039,802,636,479)
(3,039,802,636,479)
(Increase)/decrease in
other liablities
48.5
2,793,740,161,258
879,010,809,803
3,672,750,971,061
Increase/(decrease) in issuing bonds and valuable
papers (excluding issuing
of valuable papers for
financial activities)
48.5
-
(879,010,809,803)
(879,010,809,803)
CASH FLOW STATEMENT
204
Notes
Net cash flow from/(used
in) operating activities
31 December 2011
(reported)
VND
Reclassification
VND
31 December 2012
(restated)
VND
19,119,649,658,970
(3,039,802,636,479)
16,079,847,022,491
trading securities
48.4
863,592,655,108
(863,592,655,108)
-
investment securities
48.4
(3,903,395,291,587)
3,903,395,291,587
-
Net cash flow/(used in)
from investing activities
(3,526,047,816,443)
3,039,802,636,479
(486,245,179,964)
Net increase in cash and
cash equivalents in the
year
14,357,555,347,350
-
14,357,555,347,350
Cash and cash equivalents at the end of the
year
43,561,486,022,723
-
43,561,486,022,723
48.1 Merge "Fees and commission income" and "Fees and commission expenses" into "Income from service operating receipt”.
48.2 Merge “Gain/(loss) from foreign currencies trading” and “Income from investing activities” into “Receipts/(payments) from foreign currency trading and investment securities”.
48.3
Merge “Other income” and “Other expenses” into “Payment for other operating activities”.
48.4
Reclassify “increase/decrease in trading securities” from “Net cash flow/(used in) investing activities ” to “Cash flows from/(used in) operating activities”.
48.5
Reclassify “increase/(decrease) in issuing bonds and valuable papers (except for issuing bonds and valuable papers for financial activities” from “Increase/(decrease) in other liabilities”.
49. EVENTS SINCE THE CONSOLIDATED BALANCE SHEET DATE
In January 2013, the Bank increased its chartered capital from VND 10,000,000,000,000 to VND 10,625,000,000,000 according to
Resolution 24/NQ-MB-DHDCD dated 26 April 2012 of the Board of members about the option of raising chartered capital that State
Bank of Vietnam and State Securities Commission of Vietnam approved. As of 31 January 2013, the Bank have successfully offered to
public 62,500,000 shares.
Other than the above event there have been no significant events occurring after the separate balance sheet date which would require
adjustments or disclosures to be made in the consolidated financial statements.
205
50.EXCHANGE RATES OF APPLICABLE FOREIGN CURRENCIES AGAINST VIETNAMESE DONG AT YEAR-END
31 December 2012
VND
31 December 2011
VND
USD
20,828
20,828
EUR
27,362
27,313
GBP
33,468
32,474
CHF
22,637
22,366
JPY
241
270
SGD
16,909
16,202
CAD
20,753
20,606
AUD
21,495
21,384
Prepared by:
Ms. Ngo Bich Ngoc
Approved by:
Approved by:
Ms. Le Thi Loi
Mr. Le Cong
Hanoi, Vietnam
28 February 2013
206
Confirmation of legal representative
Person being authorized to disclose information
Mr. Le Cong
Bank’s name
: Military Commercial Joint Stock Bank
Abbreviated name
: MCSB
Stock code
: MBB, listed in Ho Chi minh city Stock Exchange (HOSE) on 1st November 2011
Operation license No.: 0100283873 granted by Hanoi Planning & Investment Department, first registerd on 30/09/1994,
changed for the 32nd on 03/10/2012.
License No.: 0054/NH-GP, granted by State Bank of Vietnam along with Decision No 194/ QD-NH5 on 14/9/1994 of State
Bank of Vietnam.
Charter capital
:VND 10,000,000,000,000
Head office address
: No. 21, Cat Linh Street, Dong Da District, Hanoi, Viet Nam.
Tel
:(+84)4 6277 7222
Fax: (+84)4 6266 1080
Email:[email protected]
Website:www.mbbank.com.vn
Scopes of business:
- Custody;
- Insurance agency and services in accordance with the law;
- Gold operations (sell - buy - process) ;
- Banking business under the regulations by State Bank of Viet Nam;
- To particular business lines with conditions, the bank only operate in accordance with applicable laws;
- Other monetary intermediation operations;

annual report

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