BUSINESS PLAN OF THE YEAR 2017

Transcription

1 BUSINESS PLAN OF THE YEAR 2017 Ho Chi Minh City, April 2017

2 CONTENTS PART 1- PART 1-EXECUTIVE SUMMARY 2 EXECUTIVE SUMMARY 3 I. FORECAST ON GLOBAL AND VIETNAM ECONOMY IN II. FORECAST ON VIETNAM FINANCE AND BANKING MARKET DETAILED PLAN 8 I. FINANCIAL TARGETS 8 II. TARGETS ON CUSTOMER EXTERNAL ACTIVITIES 9 1. Consumer banking Corporate banking SMEs Financial investment and inter-bank activities Network development and marketing activities...14 III. TARGETS ON OPERATION AND ORGANIZATION Credit management Workout activity Risk management Operation management Implementation status of 5 strategic objectives and initiatives IT Management...20 IV. TARGETS ON HUMAN RESOURCE TRAINING AND DEVELOPMENT Development orientation of Main activities of This report had been approved by the General Shareholdes Meeting on the 27 th April 2017

3 EXECUTIVE SUMMARY I. FORECAST ON GLOBAL AND VIETNAM ECONOMY IN Global economy The Global Economy in 2017 is forecasted to be more positive than Accordingly, International Monetary Funds (IMF) anticipates that the global economic growth in 2017 will reach 3.4%. Besides, the US economy is expected to grow significantly due to the new policy of the new US president Donald Trump and the dollar rise, expected to reach 3.0%. EU will continue to grow slowly at about 1.5%, lower than 1.7% in 2016 (IMF). Economic growth of Japan will be stagnant, expected to reach 0.6% in Meanwhile, the Chinese economy will continue to decelerate and the negatively impact to Asia economic outlook, China's GDP is expected to grow only 6.2% in 2017 (IMF). 2. Vietnam economy The GDP growth rate reached 6.21% in 2016, down from 2015 (6.7%) mainly due to the decline in the total supply of agriculture and mining. In the more positive macroeconomic context in 2016, economic growth in 2017 was expected by National Assembly Standing Committee to be more positive with the growth target of 6.7%. Besides, the world commodity prices will recover in 2017, with the continuous adjust or switch series of public service fees to pricing mechanisms will create pressure on inflation, making it difficult to control inflation below the target of 4%. Overall in 2017, Vietnam economic growth will be more favorable thanks to improving economic growth, potential growth in the momentum of improvement. But the economy will also face many difficulties due to uncertain world environment, manufacturing and business have many difficulties, slow restructuring process and high public debt. II. FORECAST ON VIETNAM FINANCE AND BANKING MARKET Interest rate In the year of 2016, the State Bank of Viet Nam advocated stable monetary policy to support the economy. As a result, interest rates only increased slightly compared to Y2015. By the end of 2016, VND short-term interest rates were from about 4.3% to 5.5% per annum (under 6-month tenor), from 5.3% - 7% (6 to 12-month tenor), and from 6.5% - 8% (from 12-month tenor). USD interest rate has been stable at 0% per annum. 3 This report had been approved by the General Shareholdes Meeting on the 27 th April 2017

4 VND interest rate is currently quite low and unlikely to fall further within Y2017. Besides, the credit growth in 2017 would face difficulties because of SBV s tighter capital adequacy requirements while Banks have disbursed large amounts of medium-term loan in real estate and related fields in last year. Moreover, Banks should face liquidity difficulties because of the pressure on resolving non-performing loans, the, push interest rates. Therefore, it would have little chances to cut interest rates further. The regulation to reduce the proportion of short-term capital for medium and long term loans will force banks to increase the mobilization and put the pressure of mobilization on them. - Exchange rate In 2016, the foreign exchange rate had a slightly increase due to stable monetary policy implemented by the Government. The central rate of VND versus USD only increased 1.2% compared to 2015; the foreign currency liquidity is stable. However, the foreign exchange rate in 2017 is forecasted to face pressures, because of: o Higher demands for USD while supplies are limited. o Hiked USD interest rate by FED (FED would have another 03 times of rate hike next year). o Dip overseas remittances to Vietnam in 2017 (due to higher Vietnamese real estate price, higher USD interest rate, low VND interest rate and the slowly improvement of business environment in Vietnam) Foreign exchange rate is forecasted to be higher in 2017, around 3% to 5%. - Credit growth Facing the more challenged economic pressures which were forecasted in 2017, especially the unpredictable trends of global economy, SBV expected a 18% credit growth this year. - NPL & VAMC Although the NPL ratio has been brought below the 3% level, but bad debts were still high in 2016 and affected business results. In 2017, VAMC is expected to buy about 25,000 billion dong of bad debt by special bonds and concentrate on processing 33,000 billion dong. Among them, VAMC will focus on debt restructuring, handling and classifying assets for sales and collecting debts. - Business performance of other banks These more positive signs from the macroeconomic environment improvement, stable exchange rate and controlled inflation will help to overcome the weaknesses in the structure and support a stable outlook for the banking sector in However, the 4 This report had been approved by the General Shareholdes Meeting on the 27 th April 2017

5 burden of risk provisions for bad debts and VAMC bonds will continue to impact negatively on the banks profits, as well as the Basel II implementing process will make a high pressure on the the banks capital structure in the system. III. STRATEGIC PRIORITIES OF THE YEAR Continue to participate in and maintain a high credit rating in the banking market In 2016, Moody's upgraded Baseline credit assessment of ABBANK (BCA) from B3 to B2, continue to be in the leading group of ranked joint-stock commercial banks in Vietnam. In 2017, ABBANK continues to be rated by one of the three most prestigious credit rating agencies in the world - Moodys with the expectation of bringing positive results, continue to be in the leading group, confirming the safe and sustainable development of the bank and promote ABBANK s reputation of safe and sustainable operations Vietnam's banking market, particularly contribute to the reputation and attract customers and partners using the ABBANK s services. 2. Develop financial reports under IFRS standards In the trend of global economic integration, the preparation of financial report according to International Financial Reporting Standard (IFRS) is becoming the trend and the general measure of accounting and finance activities. Therefore, developing financial report according to IFRS will enhance publicity and transparency in the provision of accurate and high quality information. In addition, developing financial reports according to IFRS not only enhances the bank s reputation but also contributes to improve the business management and operating efficiency in ABBANK, and attracts foreign capital. 3. Boost positioning ABBANK s brand in the market In 2017, ABBANK continue to boost the process of positioning ABBANK s brand in the market to become one of the top joint-stock commercial retail banks in Vietnam, associating with the image of a retail bank that is friendly, prestigious, closed to customers, generates confidence and attracts customers attention, therefore develop a positive imageof the brand and the products, services of the bank for customers. 4. Invest in and develop technology is the fundamental for creating breakthroughs in competitive products of consumer banking and SME segments, improving capacity of risk and technology management. In the competitive market in the retail segment, ABBANK will make the difference by investing, developing applying modern technology, create the basic foundation for the breakthroughs about diversified products development and increase high-tech contents in consumer banking and SME segment in order to meet the increasing demands and create the most conveniences for customers. This is also an effective step towards the 5 This report had been approved by the General Shareholdes Meeting on the 27 th April 2017

6 implementation of strategic goals: increasing service income rate contribute to the stability of the bank income structure. 5. Complete the strategic initiatives The process of construction and strengthening the foundation for ABBANK s sustainable development stage is going to finish as timeline. From 2014 to December 31, 2016, ABBANK implemented 20 projects, and as at December 31, 2016, there are %-completed projects. All 05 remaining projects are expected to be completed by the end of The implemented projects has brought practical benefits to ABBANK and has contributed to the image of a more efficient, professional and modern ABBANK. 6. Complete the listing of ABBANK on the stock market 7. Increase service income share in the income structure, includes income from traditional bank services and new services. Summary of financial targets of the year 2017 Unit: VND bn Compared to 2016 Compared to 2016 Plan Result Plan Item result plan /- % +/- % Total asset 80,600 74,432 70,000 6, % 10, % Loans 56,666 49,555 45,632 7, % 11, % - Market 1 51,262 40,141 40,195 11, % 11, % - Market 2 5,404 9,414 5,437 (4,010) 57% (34) 99% Deposits 73,353 65,333 58,305 8, % 15, % - Market 1 64,669 52,228 52,305 12, % 12, % - Market 2 8,684 13,105 6,000 (4,421) 66% 2, % NPL group , (30) NPL/Total outstanding loans 1.68% 1.95% 1.78% -0.27% -0.10% - NPL/Outstanding loans on Market % 2.54% 2.02% -0.61% -0.09% Earning before Credit Provision Expense 1, % % Total provision expense (63.3) 90% (127.4) 82% EBT % % 6 This report had been approved by the General Shareholdes Meeting on the 27 th April 2017

7 Summary of key financial indicators 2017 Item Plan Result Plan Unit ROaE 6.3% 5.0% 3.7% %/year ROaA 0.5% 0.4% 0.3% %/year EBT/Income 7.8% 5.4% 4.8% % Operating expenses/net income (CIR) 59.9% 55.2% 55.5% % CAR >9% 13.5% >=9% % Total asset/equity Times Debt/Equity (D/A) Times Equity/Total asset 7.3% 7.8% 8.3% % Debt/Total asset 92.7% 92.2% 91.7% % Loans (2 markets)/total asset (LAR) 72.4% 70.1% 65.2% % Loans (2 markets)/deposits market 1 (LDR) 79.3% 76.9% 76.8% % Earning before Credit Provision Expense/Staff mil/year Operating expenses/staff mil/year Details of year 2017 s business plan are specified in the attached file, kindly submitting the plan to the Annual General Meeting for your approval. Respectfully, An Binh Commercial Joint Stock Bank Chief Executive Officer CU ANH TUAN 7 This report had been approved by the General Shareholdes Meeting on the 27 th April 2017

8 DETAILED PLAN I. FINANCIAL TARGETS Analysis of the 2017 plan: Total asset budget increase VND 10,600 bil (15%) compared with the plan of 2016 and VND 6,168 bil compared to 2016 result. Earning before provision cost of the 2017 plan reaches VND 1,025.9 bil, increases by VND bil (12%) compared to 2016 and VND 98.2 bil compared to 2016 result. In that, - The total income of the plan is up VND bil (21%) compared to the plan of 2016 and up VND bil (20%) compared to result of 2016, included: 8 This report had been approved by the General Shareholdes Meeting on the 27 th April 2017

9 The net interest income of the plan increases by VND bil (equivalent to 21%) compared to the plan of last year and increases VND bil (27%) compared to result of Net income from services of the plan increases by VND 68.1 bil (equivalent to 62%) compared to the plan of 2016, increases VND 55.4 bil (45%) compared to the result of Other incomes of the plan decreases by VND 6.9 bil (equivalent to 3%) compared to the plan of 2016, decreases VND 96.8 bil (31%) compared to the result of Operating expense of the plan increases by VND bil (equivalent to 27%) compared to the plan of Provision of the plan reaches 576 bil, decreases VND bil (18%) compared with the plan of 2016, decreases VND 63.3 bil (10%) compared to the result of II. TARGETS ON CUSTOMER EXTERNAL ACTIVITIES 1. Consumer banking 1.1 Vision and strategic objectives of Expand the sectors of Account and Services for individual customers - Develop new business sector: insurance - Promote the sales of ABBANK products, services through partner channels - Carry out the policy of decentralized salary and business promoting programs - Enhance and extend the service features to provide more convenience for customers, develop new products in order to increase competitiveness. - Outstanding loans growth rate: 28%, service fees revenue growth rate: 60% and develop partners to mass sell services. 1.2 Business targets 2017 Unit: VND bn Items Compared to Compared to plan Plan Result Plan result (+/-) % (+/-) % Deposits 29,640 24,948 23,000 4, % 6, % Loans 19,155 15,024 14,341 4, % 4, % No. of individual customers 719, , ,890 55, % 20, % Number of ATMS (accumulated) % 8 104% 9 This report had been approved by the General Shareholdes Meeting on the 27 th April 2017

10 Number of POS (accumulated) 1,600 1,248 1, % % Fee income % % 1.3 Business solutions of Product / service development In 2017, with retailing banking orientation focusing on individual products/services, ABBANK shall continue to make innovation to current main products, develop new products, diversify products to introduce to customers. In addition, ABBANK intend to push financial products/ services to increase fees and charges, develop lending and mobilization, increase utility of ABBANK s cards with the following content: Services o o o Continue to carry out new products: ABBANKmobile, Online Banking new version, automatically paying electricity bills, water bills. Cooperate with partners to push and diversify ABBANK s payment channels. Carry out collection service for potential partners. Credit products o o Improve current main products. Develop new products. Deposit mobilization products: o Develop savings mobilization based on stability, safety, compliance with SBV s regulations. Developing policies to take care of and cross-sell current groups of customers to maintain and develop more new products/ services as well as develop new customers. Card products: develop new functions and new card products to diversify ABBANK s card lines: - Relationship development Promote the cooperation with companies/car dealers, projects, real estate companies, preferential points for cardholders, broker channels to introduce customers to bank and non-life insurance partners. Perform FWD insurance business throughout the system and complete the policies that related to the insurance cooperation (commissions, reports and processes). Develop the cooperation programs with preferential policies, emulation program, participation programs of partners. 10 This report had been approved by the General Shareholdes Meeting on the 27 th April 2017

11 Develop business through channel partners in internal emulation programs, access and take care partners, to organize training courses on the product / process development partners, and noted the comments from them. - Developing alternative business channels Continue to develop individual customers via the cooperation with EVN in the whole system Continue to approach and cooperate with essential supply partners such as: water, cable TV, Internet. Carry out survey, connect with partners to increase number of customer by bulk, formulate programs and policies to attract business units, major clients, develop ABBANK personal account: University - College, large companies, state-owned enterprises and agencies,... Research and implement the payment form through MPOS card, serving POS business and connecting FWD insurance. Promote Electronic Banking Services business: Online Banking, ABBANKmobile with focus on cities, towns, Corporate banking 2.1 Strategic Directions and Targets Build, manage and improve products, services for the customer segments, the high tech products (E-Banking, customs tax collections, electronic tax, trade payments..) - Complete a new Online Banking system to add new features for the corporates uses with high security. - Co-operate with EVN to finance successfully for EVN s projects. - Maintain business scope of EVN and its subsidiaries performed via ABBANK. - Develop and increase the corporate deposits beside EVN s. 2.2 Business targets in 2017 Items 2.3 Action plan for meeting business target year Developing products/services Plan 2017 Result 2016 Plan 2016 Compared with result This report had been approved by the General Shareholdes Meeting on the 27 th April 2017 Unit: VND bn Compared with plan 2016 (+/-) % (+/-) % Loans 19,858 17,014 16,883 2, % 2, % Deposits 30,039 24,000 26,805 6, % 3, % No. of Customers 2,220 2,036 1, % %

12 Build, manage and improve products/services specialised for each market segments such as corporate customers, strategic customers to enhance the efficiency and its competitiveness. Promote and utilise maximum credit limit of low cost of fund granted by SBV, by the Fis, prioritize using this fund for the bank target segments. - Supporting and developing business Strengthen connections with branches. Improve and update KPI program based on profits, to assess the performance of each RM. Early notifying the business conditions, results as well as productivity of each RM and branches. - Developing partners relationships Continue to expand networks of correspondence bank to meet the entire demand of customers as well as to exploit the cross sale potential of product and services via this channel. The main objectives in 2017 are as follows: Manage total credit limits granted by domestic and foreign financial institutions. To coordinate with them to use the limits in the optimal way to get the benefits of ABBANK and to maintain long term relationships with partners. Strengthen the cooperation, implement and prioritize to use services of the long term relationship partners and those strongly supporting international trade. To perform RDFII loan program, VNSAT loan with aim of fully using 100% credit limit with preferential loan rates. To co-operate with FIs to perform collection/payment services and FI guarantee to increase the fees to the bank. 3. SMEs 3.1 Business Direction and Key focus in Key Direction Complete the development of Target Operating Model(s) for sub-segment within SME, including the very small businesses (Micro SME) and the small and medium busineses (medium & small SME); Consolidate the current sales channel at branches, to put into place new channels including dedicated SME Centers, Partnership and Online as new sales channels; Focus on market research, customer needs, business units and competitors to align and improve our products; 12 This report had been approved by the General Shareholdes Meeting on the 27 th April 2017

13 Issue complete product tree and its roadmap; to pilot new products and monitor for improvement. 3.2 Business targets 2017 Unit: VND bn Compared to Compared to Plan Result Plan Item Result 2016 Plan (+/-) % (+/-) % Loans 12,249 8,104 8,970 4, % 3, % Deposit 4,590 2,879 2,500 1, % 2, % Number of customers 24,640 19,871 24,000 4, % % 3.3 Proposed groups of action plans to grow business in Develop products and services For lending products: Develop new ones for SME customers. For deposit products: Shifting the direction of mobilizing from SMEs customers to retail ones to create a sustainable source of income. For Trade Finance and Guarantee products: build and promote a total new product line beside existing retail banking products and enhancement of ABBANK's guarantee products. For Cash Flow Management products: promote Cash Flow Management products with high technology content. - Business support and development Develop people and increase sales productivity Support business units at branches and sub branches Deploy sales programs and sales policies Develop the identification, develop the customer policy and improvement of service quality - Fee income enhancement In 2017 the Division will focus on growing net fee income by strongly pushing fee opportunities and growing CASA. 4. Financial investment and inter-bank activities 4.1 Business solutions of Liquidity and treasury activities Guarantee the reasonable liquid assets ratio. Pay attention to terms and cash flow balance control, ensure the respect of SBV s regulations. 13 This report had been approved by the General Shareholdes Meeting on the 27 th April 2017

14 Adjust timely FTP rates which ensure the compliance with market rates and with the orientation of ABBANK. - Financial Investment activities Seek for potential opportunities to invest both replacement and additionally VND 300 billion in corporate bonds. Besides that, to diversify various types of products in order to enhance consulting fees for ABBANK. Strictly monitor and manage operation of companies issued corporate bond held by ABBANK to reduce risks. - Money market activities Ensure liquidity for ABBank. Continue trading strategy like match tenor trading, GAP trading for both VND and USD from 3 months to 6 months tenor and within allowed limits. Find lending chances on taking advantage of trade loan sources from IFC, Wells Fargo, JP. Chase when having favorable opportunities. Promote repo and swap transactions in order to diversify business types. - Bond investment and trading activities Credit Institutions Bonds: continues to invest (both replacement and new investment). Government bond trading activities: Monitor closely the market situation in order to make timely purchasing decisions. - FX trading activities Support branches and establishing currency exchange supporters. Reinforcing supervision and currency exchange management activities of all branches. Review and re-examine interbank partners which don t have transaction limit to expand interbank activities. - Other Activities: In 2017, ABBANK will implement the Valuable papers on Core Banking system which manage valuable papers information in timely, clear and support business decision. 5. Network development and marketing activities 5.1 Network development plan Network development activities implemented in 2017 Relocate 26 locations; Build and renovate 3 purchased houses; Renovate 59 existing rental housing offices; Extend 32 existing houses rental contracts; Negotiate with 14 This report had been approved by the General Shareholdes Meeting on the 27 th April 2017

15 landlords to adjust leasing contracts; Support building, renovating ATM booths; Support construction & investment for HO. - Other activities Complete the processes and criteria for network operation; Develop the standards of materials and unit prices for renovation. 5.2 Branding and marketing activities - Branding development and communication Adjust and standardize CI on products, publications, transaction units. Encoding CI systems such as logo, signs, banners, standees, posters, table tent cards at branches/sub-branches. Continue to nominate in well-known domestic/international awards. Promote community activities. Maintain and develop ABBANK website, fanpage, Zalo. Build up ABBANK account on Youtube with interesting contents. - Product & service advertisement Have advertising programs on all communication channels, especially online channels. Build up the new logo, slogan and action plan for SMEs, promote products and services for SMEs. - Supporting branches s advertising activities Maintain and improve roadshow activities, workshops strategic partners, exhibition booths, sponsor development programs in local business... Based on the specific economic and cultural to advise media channels bring high efficiency. Manage and evaluate the effectiveness of billboard advertising the business units and strategic communications positions in the areas of central provinces. - Market research Research and access the customers satisfaction about ABBANK product and service. - Internal activities Continue launching many internal programs to align nationwide staffs of ABBANK. Apply the 5S campaign in the whole bank. III. TARGETS ON OPERATION AND ORGANIZATION 15 This report had been approved by the General Shareholdes Meeting on the 27 th April 2017

16 1. Credit management - Credit appraisal activity Building Regulation / Process recordkeeping in the Appraisal Center Building Regulation / process of vouchers transfer between BU and the Appraisal Center. - Credit management activity Credit data reporting activities: o Manage credit data of bank, report to SBV and internal bank. o Implement and support branchs after credit audit, inspection Credit policy activities: o Review, correct credit policy by function, according to legal and SBV regulation (credit granting process, collateral management) o Write the guideline document for report keeping and management by reports management software. - Credit monitoring activity Direct Monitoring: Carry out the field works according to the approved plan The Monitoring from distance: Continue to identify and review the problem debts from early stage; review the high risk products according to risk matrix. Review independently to ensure the safety norms under Circular 36, Circular 06 of the State Bank 2. Workout activity - Deal with and ensure the ratio of bad debt/total market debt on Market 1 below 3%. - Review and replace no longer appropriate documents relating to bad debt handling. 3. Risk management 3.1 Credit risk management - Review and issue credit policies in line with amendment on regulation of SBV and to issue regulation on receiving and managing collateral. - Conduct regulation on credit policy in order to replace existing regulation after SBV issues Circular 36 to replace existing Credit policy No Amend and issue credit risk policy based on Deloitte s recommendations in the Gap analysis report. - Regularly report to BOD, BOM, Supervisory Board, RMC, ERC, Maybank and IFC. Report on 2017 industry outlook. 16 This report had been approved by the General Shareholdes Meeting on the 27 th April 2017

17 - Issue Risk appetite in 2017, credit orientation in 2017 and to control loan portfolio in line with credit orientation and credit risk threshold in 2017; control ratios of waiver request from IFC and ratios under Circular 36; - Continue to improve/upgrade credit rating system to generate precise score, to enhance risk control, and to support business units for using credit rating system. - Complete Gap Analysis project in quarter 1/2017 and report recommendations to BOD/BOM. These results are the cornerstone for proposing many projects implemented under Basel II and other projects. - Coordinate with vendors for implementing Credit rating projects for corporate, retail and FI segment; RWA project and limit and collateral management project in line with Basel II implementation roadmap. 3.2 Market risk management - Give independent reporting/warnings/recommendations/related to market risk management, liquidity management. - Contruct/review/amend documents on liquidity/market risk management policies/procedures such as liquidity risk management procedures, liquidity stress testing procedures, and other documents aligned with the actual ABBANK s situations and requirements of the SBV. - Review/ amend (is any) market risk limits, liquidity limits so that they are aligned with the actual ABBANK s situations and requirements of the State Bank. - Construct automatic reports on T24 System such asliquidity reports, liquidity stress testing reports and other customer behavioral reports. - Actively deploy Basel II project Operational Risk Management - Orientations in 2017 Impulse the role of risk officer at units (RO) to implement operational risk management solutions efficiently over bank-wide. Roll out the integrated solution to combine IT system into risk management and report through completing operational risk status management software. Enhance risk awareness and culture over the bank Build up and complete policies regarding Business Continuity Plan (BCP) Implement Basel II project on operational risk management effectively in order to standardize ABBANK s operational risk management methodology and tools in line with the best practice. - Implemented solutions: Collect risk information over bank-wide Build up operational risk status management software Motivate risk culture over bank-wide 17 This report had been approved by the General Shareholdes Meeting on the 27 th April 2017

18 Implement and improve BCP Carry out Basel II project 4. Operation management 4.1. Credit Administration - Enhance automation capacity of CA internal document circulation system and Corebanking. - Separate routes for different segments of clients at request of Corporate Banking Division, Consumer Banking Division and SMEs Division. - Rate of documents within SLA: 95%, reduce SLA by 5%. - Lean CA operation procedures. - Continuously manage/update website of CA documents so that all CA executives in the bank can access. - Increase productivity and efficiency by at least 10%. - Develop 5 unitilities in Limit, Collateral, LD Loans and Guarantee Menu in T24 and CA internal document circulation system Domestic Payment - Deploy the project of improving automation capability of payment through interbank system. - Standardize the procedure of payment in the interbank system; - Standardize the procedure of inputting the customers information on the corebanking system at all branches; - Develop IT utilities to cut down the mediate process, increasing in the automation in inputting and authorizing process; - Improve the quality of service, set up the standard of the service through all the concerned departments Trade Operation - Execute all export documents negotiation transactions to cut down processing time and increase competitive capacity. - Launch the Remittance Transaction in CNY service that ABB will deal with a Chinese bank directly. - Rate of documents within SLA: 98%; STP rate is 95%, - Upgrade report systems, using data from Corebanking systems for each management and business purpose, building the history enquiry function for export transactions of each customer. 18 This report had been approved by the General Shareholdes Meeting on the 27 th April 2017

19 - Implement AML system and apply for all international payment transactions. - Build the operation procedure and structure for cross-border payment Card Operating - Improve safety and security for card transactions with key projects: Implement projects of 3D Secure authentication for online transactions; deploy EMV chip card project for domestic cards under direction of The State bank; implement alarms and surveillance cameras for ATMs; Maintain PCI DSS for the system. - Develop products, utilities and facilities for individual / corporate clients. - Improve prevention systems: upgrade card system, study plans to build DR; - Improve risk management capabilities: complete policy and tools to manage risk; in collaboration with the Risk Management Division in controlling risks related to the card operation; standardize, review and build business processes to control risks. - Maintain system operation, supervise systems connected to external organizations to ensure stable operations. Monitor the proportion of transaction errors, system downtime, time to upgrade / update / edit as SLA Customer Service - Restructure Customer Service Center towards orientations of the bank to develop retail banking by supplementing telesales and credit card loan reminding fuctions. - Develop new online channels to support and advice customers in line with new trends such as webchat, zalo - Maintain customer service hotline 24/7 in the weekdays, weekends and holidays. 5. Implementation status of 5 strategic objectives and initiatives No Item Plan 2017 Result as at Dec 31, Top 5 ROE among privately owned commercial banks 2 Income from Retail (including consumer and SME) accounts for at least 70% of total operating income, and income from service fees (including guarantee fees) accounts for at least 20% of total operating income. - Income from SME and consumer/ total income: 45% 5.20% 4.08% -Income from service fees (including guarantee fees)/ net income: 12.97% - Income from SME and consumer/ total income: 38.3% - Income from service fees (including guarantee fees)/ net income: 10.96% 19 This report had been approved by the General Shareholdes Meeting on the 27 th April 2017

20 No Item Plan 2017 Result as at Dec 31, Top 10 brands in the Vietnam banking system 4 Build a friendly and professional work culture and environment, capable of attracting employees measured by satisfaction rate bank-wide. 5 Build professional and effective corporate governance following international best practices will be measured in % 95.6% IFC s Corporate Governance Framework, Moody s Credit Rating, IFRS Financial Statements, Basel II 6. IT Management 6.1 Infrastructure - Accelerate the optimization of existing infrastructure, ensure sufficient infrastructure to provide - Improve security and safety for the IT system, enhance customer confidence when using the service, improve value of bank s brand. - Improve the availability of IT infrastructure through enhancing governance and monitoring resources associated with the deployment of tool supports operational governance. 6.2 Applications development and management (Core banking) - Complete the system processes and regulations related to applications development and management. - Continue to invest in upgrading core banking systems and IT applications development associated with long-term orientation of the bank. IV. TARGETS ON HUMAN RESOURCE TRAINING AND DEVELOPMENT 1. Development orientation of Attract and retain key personnel and potential - Improve labor productivity - Develop a positive working environment 2. Main activities of This report had been approved by the General Shareholdes Meeting on the 27 th April 2017

21 a. Salary and Compensations - Activities/ Programs: Complete salary payment mechanism upon RM grading system and supervise actual business target implementation. Conduct market survey, assessment and salary reviews for employees so as to enhance ABBANK s competitiveness in labor market in general and in commercial banking system in particular. Implement ABBANK CARE 2017 program with the diversity of compensation programs, especially focus on potential talents and key positions of ABBANK. Complete the report on market salary survey and make proposal for employee compensation improvement, so as to increase employee commitment to ABBANK. Complete salary calculation software and promulgate new regulations that contribute to the better salary management such as: regulation on timekeeping, issuance and return of insurance book, costume provision b. Personnel management - Involve in programs/projects for enhancing working productivity: Continue KPIs project with working productivity management Team by KPIs. E-HR program: implement HR document transference by software and aim at data electronics management and solutions. Build succession plan for Head of Units and Key Branch Directors. Conduct survey on employee s satisfaction while working at ABBANK by personnel survey programs. Implement pilot program for mobile/temporary branch directors. - Implement programs for employee s Commitments. c. Training - Develop the yearly Training plan and tentatively organize around 500 courses.. - Continue the implementation of activities for learning community development in ABBANK in 2017 (including program for HR Division competence development and activities for Talent pool group, or successor branch director group). - Conduct training and development activity for employees in Talent Pool 2017 group. - Establish Practical Training Center in HCM City and soon take into operation. - Standardize training documents with knowledge module in Title training programs. - Continue upgrading and completing E-learning system. d. Recruitment 21 This report had been approved by the General Shareholdes Meeting on the 27 th April 2017

22 - Conduct the recruitment market survey to make recruitment plan in 2017 in line with the recruitment orientation of ABBANK and the general market of the banking industry in Vietnam. - Focus on building image and branding of ABBANK recruiter by enhancing tools and means that serve effectively for recruitment activities such as completion of recruitment website, promoting recruitment effectiveness through ABBANK s fanpage channel. 22 This report had been approved by the General Shareholdes Meeting on the 27 th April 2017