FINANCE. finance & business news. Reference exchange rate down 5 VND

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1 finance & business news 7 March Reference exchange rate down 5 VND 1 Vietnam's foreign reserves hit largest scale ever 2 SBV withdraws money at record high level 2 G-bond market hits new records in Jan-Feb 3 Government strongly urges non-cash transactions 4 Asset quality, profitability of Vietnam banks improved: Moody's 4 Major difference in interest rates among banks 5 Following fraud, wary banks allow customers to check accounts online 6 Good information expected from upcoming banks' AGM 7 PM lauds Nat'l Financial Supervisory group 8 Banks report huge profits, bank shares' golden days return 9 Life insurers busy with agent recruitment plan 9 SAP to install customer relationship software for Sacombank 10 HDBank's profit may increase 64pct in Minister: CPTPP vital to sustainable development in Vietnam Pacific trade pact countries go it alone without US 12 Breakthrough reforms needed to keep CPTPP benefits 14 Global powerhouses to back circular economy 15 Rethinking business for a future in Industry HCM City anticipates increasing foreign capital inflows 19 Association to protect steel firms from import restrictions 20 Vietnam urged to streamline procedures in ODA management 21 Tax authorities fight bad debts 22 Expert: Businesses need better awareness of sustainable development 23 Food association drafts action plans 24 VFA urged to increase high-quality rice production 24 Sugar inventory recurs in Mekong Delta 25 Mechanisms needed for stable property market 26 Ba Ria-Vung Tau seeks to tackle investment hindrances 27 HCM City boasts highest salaries in Vietnam 27 Vietnam beer market one of the hottest in the world 28 Domestic fashion brands too small in $3.5b market 28 Dong Nai works to sharpen competitive edge for businesses 30 Reference exchange rate down 5 VND VN second-largest partner of Japan in software outsourcing 30 President urges firms of Vietnam, Bangladesh to create impetus for trade ties 31 BIZ NEWS Business Briefs 07 March, VN shares rebound on bottom-fishing 33 March 6: All indexes gain ground 34 HOSE announces new rules on covered warrants 34 Hanoi People's Committee to offload entire stake in Vinawind 35 PV Power starts trading shares on UPCoM 36 Social housing to be purchased online in Hanoi 37 WIPO helps Vietnamese firms in IP protection 37 Blow for food safety in Vietnam 38 Ben Thanh market to apply safe-food model next month 38 Bac Lieu says no to thermal plant 39 Binh Dinh works on hi-tech shrimp farming to raise export value 40 MWG's January online revenue up 119pct 41 MWG pours VND3 trillion into Bach Hoa Xanh chain 41 Tran Anh reports first improvement after MWG merger 41 Japanese Group launches five-star resort 42 US major project marks good start in 2018 for footwear industry 42 Local firms inject 53mln USD into ginseng projects 43 Two ROK retail groups seek trade opportunity in Vietnam 43 Korean food firm Jooan Holdings sets foot in Vietnam 44 Vingroup enters higher education space with new private university 45 Vietnamese workers abandoned by Korean employer promised new jobs 45 Vietnam's billionaire count doubles to 4 on Forbes' rich list 46 Fines of USD22,400 for illegal mining 47 Vietnam joins Foodex 2018 in Japan 47 Hoi An International Food Festival to feature 12 famous chefs 47 Can Tho kicks off Women Startup Day 48 Fair showcases high-quality Vietnamese products in An Giang 48 07/MAR/2018 INTELLASIA VNA The State Bank of Vietnam set the daily reference exchange rate at 22,453 VND/USD on March 7, down 5 VND from the previous day. With the current trading band of/-3 percent, the ceiling rate applied to commercial banks during the day is 23,126 VND/USD and the floor rate 21,782 VND/USD. The opening hour rates at major commercial banks saw slight fluctuations. Vietcombank maintained the same rates as on March 6, at 22,725 VND/USD (buying) and 22,795 VND/USD (selling). BIDV added 3 VND to both rates, listing the buying rate at 22,728 VND/USD and the selling rate at 22,798 VND/USD. Meanwhile, the rates listed at Vietinbank went up 49 VND to 22,725 VND/USD (buying) Intellasia No. 21, lane 173/63/17, Ngoc Ha Ward, Ba Dinh Dist, Hanoi All Rights Reserved Tel: Fax: Office@intellasia.com Websites:

2 Vietnam's foreign reserves hit largest scale ever and 22,795 VND/USD (selling). 07/MAR/2018 INTELLASIA VIR Over the span of 2017 and the first two months of 2018, Vietnam's foreign reserves stood at $57.5 billion, six times higher than in 2015, officially attaining the largest scale in the history of the country's foreign exchange reserves. Previously in 2015, Vietnam's foreign exchange reserves ranked sixth among Southeast Asian countries and 19th in the world. Particularly, over the stretch of , the reserves roughly tripled at the average growth rate of 12.1 per cent per year. By the end of 2016, the reserves expanded by 38.1 per cent, then 28.2 per cent in 2017, and 15 per cent over the first 40 days of On February 10, the reserves were reported to swell by 6.4 times in comparison to Explaining the rapid growth of the country's foreign exchange reserves, a Vietnamese economist listed several causes behind this overwhelming development in size and pace of growth: the surplus of the country's international payment balance mounting to $5.5 billion; the trade balance remaining positive due to a $2.92 billion trade surplus; foreign direct investment (FDI) totalling at $17.5 billion and foreign indirect investment at $6 billion; ODA disbursement hitting over $2 billion; foreign visitors' spending in Vietnam reaching $8.99 billion; and foreign remittance recovering its initial growth rate, exceeding $10 billion. Additionally, the State Bank of Vietnam (SBV) purchased around $6 billion in foreign currency from Vietnamese citizens thanks to tightly controlled inflation and the VND/ USD foreign exchange rate being kept in check. The Vietnamese economist further added that the expansion of foreign exchange reserves could enhance financial safety and the country's liquidity. In particular, the massive foreign exchange reserves could assure the repayment of foreign debts and interest, as foreign debts constituted 45 per cent of the gross domestic product (GDP), and set the groundwork for the country's financial-monetary market, enabling Vietnam to issue bonds in foreign markets. SBV withdraws money at record high level 07/MAR/2018 INTELLASIA VNECONOMY According to the bulletin of VPBank Securities Company (VPBS) updated yesterday afternoon (March 5), the State Bank of Vietnam (SBV) net withdrew as much as 50.5 trillion dong on the open market operation (OMO). The withdrawal tool was mainly through the issuance of Treasury bills (T-bills) with frequency and scale maintaining high since the Lunar New Year (Tet) holiday. Specifically, after Tet, the State Bank continuously issued T-bills with the auction scale of 20 trillion dong in many sessions. The term from 14 days was also extended to 28 days, with the respective interest rates of 0.6 percent/annum and 0.9 percent/annum According to aggregated data from a member in the interbank market, yesterday (March 5), the State Bank continued to offer for bid 10 trillion dong T-bills with 28-day term. Credit organisations absorbed eight trillion dong with the interest rate remaining unchanged at 0.9 percent. Accordingly, with the amount of T-bills in circulation, corresponding to the money withdrawal scale through this channel, increased to 92.1 trillion dong an unprecedented scale over the last many years. The aforementioned frequency and scale of withdrawing money took place after SBV continuously net purchased a large amount of foreign currency at the end of 2017 and beginning of T-bills still remained the major tool in this profession, which was short-term and associated with interest rate costs after withdrawing. In spite of urgently withdrawing money as aforementioned, the interest rate in dong Intellasia 7 March / 48

3 in the interbank market has continuously decreased strongly and fast, the dong-us dollar interest rate swap has accordingly returned to negative status, after being positive before Tet. The US dollar price on the interbank market has also continuously increased over recent sessions. Specifically, as of March 5, the average interbank interest rates in dong continued to decrease percentage points in almost all terms compared to the session at the end of last week, while the 2-week term slightly increased by 0.01 percent. On this market, the interest rate in dong for overnight term fell deeply to 1.16 percent/ annum from more than four percent before Tet. The one-week term remained at 1.34 percent, compared with 1.66 percent for two-week term and 2.40 percent for onemonth term. Meanwhile, the average US dollar interest rate was significantly higher with 1.58 percent for overnight term; 1.73 percent for one-week term, 1.87 percent for two-week term and 2.07 percent for one-month term. The negative dong-us dollar interest rate swap was one of the factors affecting US dollar/dong exchange rate. On the interbank market, the US dollar price has continuously increased over the last sessions, traded at 22,769 dong on March 5, much higher than 22,700 dong that SBV has bought since before the Lunar New Year. G-bond market hits new records in Jan-Feb 07/MAR/2018 INTELLASIA THE SAIGON TIMES The value of government bonds (G-bonds) traded in the first two months of 2018 reached VND10.5 trillion (US$461.4 million) per session on average, according to data of the Hanoi Stock Exchange (HNX). As of late February, the total market value of G-bonds reached more than VND1,000 trillion, equivalent to 20 percent of 2017's gross domestic product (GDP), a 6.3-fold increase compared to late Repo trading value accounted for 53 percent of the total, meaning that the G-bond market had seen ample liquidity. With an aim to restructure the G-bond market, the average term of G-bonds has been extended. The proportion of G-bonds with a term of more than 15 years increased from 20 percent in 2016 to 45 percent in 2017, and in the first two months of 2018, G-bonds with a term of 10 and 15 years had the highest proportions, with 32.1 percent and 21.4 percent respectively. The winning coupons declined gradually, percentage points lower than banks' annual interest rates. The average winning coupon in February 2018 slipped in all terms compared to late In 2017, there were dozens of sessions that had trading value exceeding VND10 trillion. Repo trading accounted for percent of total trading value. The G-bond market reflects the status of public debt. If the average term of G-bonds extends and the coupons fall, the G-bond issuance is deemed more secure. According to Phung Quoc Hien, vice chair of the National Assembly, the government has gained significant success in restructuring public debt, especially G-bonds. Shortterm debts make up a smaller proportion and the coupons slide. State Treasury to issue VND200 trillion worth of bonds The State Treasury of Vietnam has plans to issue government bonds worth VND200 trillion (US$8.8 billion) in 2018, a much higher value than last year, according to Nhan Dan newspaper. Seven-year bonds will be worth VND36 trillion, while issues of the 10, 15, 20 and 30- year bonds are estimated at VND37 trillion, VND32 trillion, VND20 trillion and VND25 trillion respectively. However, in the issuance process, the State Treasury may adjust the volume of bonds and their terms in line with market conditions. In 2017, the Treasury had to cut its issuance plan twice, from VND183 trillion to VND169 trillion. The total value of successfully issued bonds was approximately VND159.9 trillion, or only 87.4 percent of the initial plan. english.thesaigontimes.vn/58614/g-bond-market-hits-new-records-in-jan-februaryhtml Intellasia 7 March / 48

4 Government strongly urges non-cash transactions 07/MAR/2018 INTELLASIA THE SAIGON TIMES The government is aiming high for non-cash transactions, demanding that payments for public services be made for the most part via banks by The prime minister has approved a plan to promote payments for public services such as taxes, electricity and water bills, school and hospital fees and social welfares via banks. The plan will help promote non-cash payments in many areas including public services, contributing to developing the e-government and enhancing the use of banking services. All universities and colleges will have to accept tuition fee payments via banks by 2020 and 80 percent of students of universities and colleges should pay their fees via bank accounts. By 2020, some 80 percent of tax payments in cities are to be made via banks, so are all payments at State treasuries of centrally-governed cities and provinces as well as cities, towns and districts of centrally-governed provinces for State budget revenue collection. In addition, 70 percent of energy companies will accept power bill payments via banks and the same rate is also scheduled for water suppliers. Up to 50 percent of individuals and households in large cities will also pay water bills via banks. Meanwhile, half of hospitals in large cities will accept payments for medical services via banks by According to the State Bank of Vietnam's website, HCM City has piloted online payment solutions at the municipal Departments of Health, Planning-Investment and Natural Resources-Environment since early this year. Such solutions have been integrated on the websites of the foresaid departments and the city's public services portal at english.thesaigontimes.vn/58616/government-strongly-urges-non-cash-transactions.html Asset quality, profitability of Vietnam banks improved: Moody's 07/MAR/2018 INTELLASIA VNS The asset quality and profitability of 14 Vietnamese banks rated by Moody's improved moderately year-over-year, driven by robust macroeconomic conditions and growth in core income, Moody's Investors Service said on Tuesday. However, the banks' capitalisation deteriorated because of rapid asset growth and cash dividends, Moody's said in the "BanksVietnam: 2017 results show widening divergence in asset quality and profitability performance" report, adding that the banks' funding profiles weakened mildly, as they increased their reliance on market-sensitive liabilities mainly borrowings from other banks to fund loan growth with cheap shortterm funding sources. "In 2018, we expect the banks will continue to improve their asset quality and profitability, while capitalisation will weaken," said Eugene Tarzimanov, a vice president and senior credit officer at Moody's. "However, the credit profiles of banks with stronger capital buffers and lower asset risks will be further distanced from the other banks," said Rebaca Tan, a Moody's analyst. On asset quality in particular, Moody's said that the improvement in 2017 versus 2016 was helped by problem asset recoveries and write-offs, as well as credit growth. The asset weighted-average problem loans ratio at the 14 rated banks fell to 5.7 per cent at the end of 2017 from 6.7 per cent the year before. Notably, four banks fully wrote off the bonds of Vietnam Asset Management Company that they had received in exchange for problem assets, and Moody's expects more such write-offs in The problem loan coverage ratios also improved, although they are still at levels which are weak by international standards. Moody's said the banks' asset quality will improve further in 2018, due to recoveries, but rapid credit growth could mask asset risks. With profitability, Moody's points out that the banks' asset weighted-average return Intellasia 7 March / 48

5 on assets rose to 0.9 per cent in 2017 from 0.7 per cent in Profitability will continue to improve in 2018, on the back of the same factors that drove up profitability in the prior year; in particular, robust macroeconomic conditions and growth in core income. As for capitalisation, the asset weighted-average ratio of tangible common equity to total assets for the banks slipped to 5.5 per cent in 2017 from 5.7 per cent in 2016, pressured by declines at government-owned banks in particular. Nevertheless, some banks, such as Vietnam Prosperity JSC Bank (B2 stable, b3), Vietnam Technological and Commercial Joint Stock Bank (B2 stable, b2), and HCM City Development JSC Bank (B2 stable, b3), strengthened their capital bases through the sale of new shares. Moody's expects that more Vietnamese banks will increase capital by issuing new shares in However, the overall capitalisation levels will remain under pressure over the next 12 months from credit growth and dividend payments. Moody's explains that in terms of funding, the banks' funding profiles weakened moderately, as seen by the system-wide asset weighted-average loans-to-deposits climbing to 86 per cent in 2017 from 85 per cent in This trend could continue in 2018, because loan growth remains rapid. bizhub.vn/banking/asset-quality-profitability-of-vietnam-banks-improvedmoodys_ html Major difference in interest rates among banks 07/MAR/2018 INTELLASIA VNECONOMY In late 2017, a large commercial bank reduced deposit rates. The decision came after the bank's deposits strongly rose, the Incremental Capital Output Ratio was fairly low and it had to balance the expenses. Talking to the press at that time, leader of the bank said that despite applying the lowest deposit rates on the market, and had even lower the rates, its deposits still grew sharply, higher than the average level of the industry. There is a fact in that case. In 2017, many risks involved deposits occurred, the flow of deposits tended to focus more on large commercial banks instead of being attracted by high interest rates as before. Leader of the above bank further explained that "the strong deposit inflow despite the low interest rates shows that the bank's reputation is being confirmed on the market". It points out a clear difference in interest rates within the same system. The difference between the highest deposit rates among large and small banks now stands at up to percent per annum. In previous years, this difference was less than 2 percent per annum. There are some reasons leading to this situation Firstly, there is an unevenness in competition, position and prestige in attracting deposits in the system, and in competitive advantage, especially with the large and outstanding source in 2017 the budgetary deposits, which were considered the privilege of the group of state-owned banks. Secondly, state-owned banks reached the credit growth limits, while they themselves could not improve sustainably the Capital Adequacy Ratio (CAR) as they were almost unable to increase charter capital. Accordingly, restructuring output source through asset shifts, and reconsidering input source via lowering competition in deposit rates to minimise expenses are the short-term solutions. Meanwhile, at some joint stock banks, the deposit rates still directly or indirectly increased. If in 2017, the highest deposit rate in dong of 8 percent per annum was only seen in some members, it is now found in more banks. Along with that, some other bonus rates of percent per annum are added to deposit rates without being included on the official deposit rate list. A local capital backlog In a recent report, the National Financial Supervisory Commission (NFSC) said that the dong interbank rates have been very low in recent time, but not all banks could have easy access. Intellasia 7 March / 48

6 The rates of percent per annum on the interbank market were not for members which are in difficulty or lack of secured assets. Thus, these members still have to compete in mobilising capital from the public and other organisations. This is also one of the reasons that the low interbank rates could not create a stability on the normal deposit rate lists of many banks. Although the two markets differ in characteristics, the difference has become clearer between the rates on interbank market (market 2) and rates offered to the public and normal economic organisations (market 1). The State Bank of Vietnam (SBV) mainly regulates indirectly via market 2, via open market operations (OMO) and via other instruments, but the clearer difference in the system and among the markets shows that the regulation of SBV has not really been effective to the ultimate beneficiaries which are the people and borrowing businesses. That is perhaps one of the reasons the prime minister once again emphasized the acceleration of lending rate reduction at the February regular meeting. This guidance was given when the Vietnamese banking system was showing signs of partial capital backlog. The difference is also seen clearly here, as some members have to apply high interest rates to find capital on market 1, while a large number of banks are urgently attract capital by low interest rates. In the last week, after the peak season of the Lunar New Year, SBV has issued bills to partly withdraw capital by a series of sessions worth 20 trillion dong, with terms expanded from seven days to 14 days and then 28 days. This temporary capital backlog is now very large, as in the last week, the total bills in circulation reached a rare high level in the past decade over 80 trillion dong. The dong interbank rates have become very low from just 1.28 percent to less than 2.5 percent per annum on short terms. Following fraud, wary banks allow customers to check accounts online 07/MAR/2018 INTELLASIA VNS Following the alleged misappropriation of VND245 billion (US$10.78 million) from an Eximbank customer's account, many banks are now enabling their customers to check their accounts online. Eximbank is offering an SMS notification service that keeps customers informed about their balance and transactions. Maritime Bank, VietinBank and Sacombank allow customers to check their saving accounts online without having to sign up for internet banking. Some banks already had measures in place to help customers monitor their accounts online. For instance, TPBank prints a QR code on the passbook that can be scanned using the bank's app. "Criminals can forge signatures or stamps or alter information on a stolen passbook, but a QR code cannot be tampered with," Nguyen Hung, the director of TPBank, said. Can Van Luc, director of the Bank for Investment and Development of Vietnam Training School, advised customers to use SMS notification services or bank apps to frequently check their accounts and both customers and bank staff to carefully follow procedures when depositing money. But another insider said banks should carefully review their systems and procedures to eliminate frauds and reassure customers rather than make them check their accounts all the time. Last year Le Nguyen Hung, a former deputy director of Eximbank, allegedly forged documents to steal VND245 billion from Chu Thi Binh's savings account, resigned his job and went abroad. Eximbank is working with the police and Binh to resolve the problem. Intellasia 7 March / 48

7 Good information expected from upcoming banks' AGM 07/MAR/2018 INTELLASIA DTCK In March and April, a series of banks will organise annual general meeting (AGM), officially announcing plans, targets of operation in 2018, along with important information related to personnel, management, bad debt settlement process, dividend payment, etc. Experts assess that the issue that investors are most interested in this year's AGM season is capital increase and listing of banks because this information has strong impact on King stocks, especially when this group of shares had a year with impressive growth. Accordingly, last year, shares of listing banks rose about 40 percent, except for EIB, STB-coded shares. Catching the trend, some banks quickly listed shares on the stock exchange at the end of 2017 and the beginning of 2018 such as HDBank, VPBank and share prices of these two banks have grown spectacularly at more than 40 percent. Currently, TPBank has submitted application and planned to list in Q2/2018. Earlier, TPBank shareholders approved the chartered capital increase plan by separately issuing more than 87.6 million shares and listing shares on Hochiminh city Stock Exchange (STC). Leaders of OCB said they will promote the plan to list on STC when there are appropriate market conditions which can be at the end of 2018 or beginning of Apart from the aforementioned banks, in the near future, many other banks also plan to officially list on the stock exchange such as VIB, Techcombank, etc. or on Upcom such as Bac A Bank, VietBank. Currently, share prices of some banks on OCT are high such as Techcombank's shares at about 50,000 dong per share. In this context, some people worry that share prices will suffer from pressure as supplies surge, not to mention the capital increase pressure to meet the implementation of Basel II standards. In this regard, Dr Nguyen Van Thuan said the large supply of bank shares in this year threatens to overwhelm demand, so the influence on price is unavoidable. However, the good news is that according to a recently released survey of Vietnam Report, not real estate construction or consumption but finance and banking is the group of shares that is worth investing in the most in Specifically, more than 45 percent of respondents chose shares of finance and banking sector with high expectation on the growth and profitability of this group, while the proportion in the real estate-construction and consumption is 29.2 percent and 20.8 percent respectively. According to financial experts, besides the economy that is forecasted to continue maintaining the stability, the factor that makes investors target at King shares is because the internal health of banks is gradually improving in the positive direction, especially after issuance of the Resolution No.42/2017 on bad debt settlement. This is the factor causing bank share prices to grow stably, contributing to the strong growth momentum of the stock market over the last period. Besides the listing, dividend has always been the matter of concerns by investors. Especially, last year, profits of most banks have increased, of which, some banks plan to make dividend payment at percent by shares and cash such as HDBank. Noticeably, this year's AGM season is forecasted to have significant fluctuations in senior personnel of banks. Specifically, Kienlongbank will appoint CEO, Sacombank will elect two additional board members for term including one independent board member; Eximbank also plans to appoint two board members at the AGM meeting on April 27. In addition, the profit target for this year of banks is also paid attention to by share investors. In spite of having no official figure, many banks have initially set positive plans for At Vietcombank (VCB), after setting record on total assets and profits in 2017, this bank set modest growth targets with the credit to improve about 16 percent, mobilisation to swell 17 percent, total assets to inch up about 14 percent and pre-tax profit target at 12 trillion dong compared to more than 11 trillion dong last year. Intellasia 7 March / 48

8 PM lauds Nat'l Financial Supervisory group Meanwhile, Vietinbank targets to raise the total assets by about percent, the capital mobilisation by percent; credit by percent. BIDV targets the maximum credit growth target in 2018 at about 17 percent, and the capital mobilisation growth at 17 percent. The common point in these three banks is the limited increase in chartered capital over the last three years, causing the Capital Adequacy Ratio (CAR) to be close to the minimum level following the regulation of the State Bank. Therefore, growth criteria are mostly less than 20 percent. 07/MAR/2018 INTELLASIA VNS Prime minister Nguyen Xuan Phuc has asked the National Financial Supervisory Commission (NFS) to enhance the quality of analysis, assessment and forecast of macroeconomic developments and financial markets to complete its task of counselling the prime minister. The PM made this request on his visit to NFS on the occasion of the 10th anniversary of the financial supervisory commission yesterday. NFS was established in 2008 in the back of the global financial crisis which put Vietnam at risk of a macroeconomic crisis. It supported and provided advice and consultation to the prime minister in the co-ordination of the supervisory activities in the banking, securities and insurance areas, which are considered the lifeblood of the economy. PM Phuc said the commission should focus on analysing and evaluating the situation, especially the potential risks of the financial markets, activities on the banking, securities, insurance and real estate sectors, to have timely and appropriate policy proposal, including risk-detecting tools and criteria for assessing the safety of the financial system in accordance with international standards and practices. "I have heard that many countries in the region are employing early warning systems for the macroeconomy and financial markets which operate rather effectively. I suggest members study and report specific proposals to the prime minister," PM Phuc said. He emphasized the importance of the proactive spirit and timely advising on solutions to stabilise the financial and monetary system, restructure credit institutions in line with bad debt settlement, regularly update and analyse the international and domestic financial developments. This was especially important in the context of unpredictable developments in the global and domestic economies, he said. "It's too late to lock the stable door after the horse is stolen", he added. Closer collaboration Financial and monetary markets needed to be reinforced, improved and made more efficient and safer, providing a solid foundation for rapid and sustainable development. Thus, the prime minister said NFS should be more active in coordinating with relevant ministries, agencies, especially the State Bank of Vietnam (SBV) and the Ministry of Finance (MOF), to counsel and propose to the government and the prime minister policies on important issues in the economy and financial market supervision. The prime minister assigned the commission in collaboration with relevant authorities to report and propose to the prime minister the coordinating mechanism among ministries and functional agencies in performing the function of general supervision and supervision of the financial market. The commission should proactively cooperate with specialised supervisory ministries and agencies in reviewing, building and completing legal framework for financial and banking groups and the managing mechanism of these corporations. Especially, it needed to focus on studying and proposing organisational models towards streamlining staff and becoming more effective. Phuc emphasized the excellence of human resources which will determine the counselling quality. Truong Van Phuoc, acting chair of the National Financial Supervisory Commission, Intellasia 7 March / 48

9 Banks report huge profits, bank shares' golden days return suggested the prime minister strengthen the legal status of the commission in order to facilitate its performance as it helps the commission have timely and sufficient access to database and objects under supervision in many aspects. Phuoc also said the commission would soon apply and publish early warning models, scientific and practical forecasts, contributing to maintaining the confidence of the market, investors and depositors. At the ceremony, on behalf of the Party and State leaders, prime minister Nguyen Xuan Phuc awarded the Third-class Labour Order to the commission. 07/MAR/2018 INTELLASIA VNS Investors, impressed by banks' high profits, have been rushing to buy bank shares, pushing prices up. In 2017 Vietnam commercial banks reported huge profits of trillions of dong. As expected, with advantage in huge assets, three state-owned banks were the most profitable banks in Of these, Vietcombank was the most profitable with pre-tax profit of VND11.3 trillion, an increase of 32 percent compared with the same period in The second position belonged to VietinBank which reported profit of VND9.206 trillion, an increase of 8.9 percent. With profit of VND8.8 trillion, which means a 14 percent increase, BIDV is in the third position in the entire banking system. Sacombank made the biggest leap in 2017 with profit increasing by 9.5 times to VND1.488 trillion. As banks all have reported big profits, the bank share price increase was expected. The average price of the shares of 13 banks being traded at the Hanoi & HCM City Stock Exchanges and UpCom (not including Bac A Bank which put its shares into transactions on December 28, 2017) has increased by 60 percent. Even NVB, the shares of National Citizen Bank, which were traded at prices below nominal value for many years, also saw strong rise with prices hitting ceiling levels at many trading sessions. NVB price exceeded the VND10,000 threshold in mid-june. The price of the share later went down for some time in 2017, but it still increased sharply by 58 percent by the end of Similarly, SHB of the Saigon Hanoi Bank also sees steady rise. It had a bad beginning in 2017 when its price stayed at VND4,000 per share. However, the price had soared to VND9,300 per share by the end of 2017, or 97 percent within a year. Other banks, Military Bank and Asia Commercial Bank, also saw impressive share price increases of 84 percent and 71 percent, respectively. Can Van Luc, a renowned banking expert, commented that investors have realised the great growth potential of the banking sector and are trying to pour money into bank shares. "The stock market is growing well, the restructuring of banks and bad debt settlement accelerated after the release of new resolutions," he explained. Le Xuan Nghia, an economist, also thinks the banking system now has opportunities for recovering. In 2016, the ROE of the whole banking system was at around 7 percent, while the figure rose to 11 percent in At some banks, the ROE is 20 percent. US$1=VND22, html Life insurers busy with agent recruitment plan 07/MAR/2018 INTELLASIA DTCK Recruiting and training insurance agents is a regular job of life insurance companies because this recruitment is based on the number of agents and the expansion plan of the company's network. However, this year the market may witness many different re- Intellasia 7 March / 48

10 cruitment strategies from traditional ones. According to statistics of the Vietnam Insurance Association (VIA), the number of newly recruited agents of insurers annually increases by over 20 percent. Insurers with high numbers of agents recruited are the top ones in market share such as Bao Viet, Prudential, Manulife, and Dai-ichi Life Vietnam. In the recent time, some insurance companies in the lower top, since having market expansion plans, have started to accelerate the recruitment of agents, such as Hanwha Life Vietnam, generali, and Sun Life. Data of the VIA showed that the total number of agents present at the market by the end of September 2017 is over 570,000 agents, up by over 20 percent compared to the end of "This number continues to increase according to the development of insurance companies as well as the growth of the market. In addition, small insurers which have newly entered the market or insurance joint ventures are having new recruitment strategies", said a representative of an insurer. He believed that the insurance companies mainly selling products via specialised distribution channels in the past such as banks now will have to adopt unique strategies in order to recruit new agents. The development of insurance agents in the current traditional way will make it fairly difficult for these insurers, because they will have to spend a lot if they want to recruit good agents who can immediately generate revenue; while the traditional recruitment consumes a lot of time with unsure efficiency. "In addition to further cooperating with banks in selling insurance products, we will continue to exploit our existing partnership to develop an approach to find customers. Along with these methods, to expand the market and find more customers, we will also develop some new insurance selling channels. This perhaps will be different compared to the current insurance companies", said a leader of an insurance company which mainly sells products via banking channel. Previously, in late 2017, talking to reporter of Dau tu Chung khoan newspaper, general director of an insurance joint venture shared that his company is looking for a direction to develop agent model. Currently, the company has made a shift in recruiting and training sales staff in a different way. Leader of the joint venture said that the company will soon announce the recruitment of new agents, possibly in this March. Concerning the development of human resource, in mid-2017, Samsung Life Insurance Company (SLI from South Korea) has signed a memorandum of cooperation with Insurance Research and Training centre under the Management Department with the aim to share experience in administrative management and human resource training and development, exchanging insurance expertise, and cooperating and exchanging in insurance in general and management of agents in particular between Vietnam and South Korea. SLI has not yet established a life insurance business entity in Vietnam but its representative office has been operating for many years. The cooperation in the development of insurance human resource with Vietnamese market may be one of the next steps to penetrate the market of SLI, but may be mere exchange of expertise. Nevertheless, according to experts in the industry, in addition to capital, experience and investment in technology, the preparation of skilled human resource, including the sales force, is always an important factor, and even the survival factor for insurance companies which have just entered the insurance market of Vietnam. SAP to install customer relationship software for Sacombank 07/MAR/2018 INTELLASIA VNS Saigon Thuong Tin Commercial Bank (Sacombank) has hired SAP, a global leader in enterprise application software, for its customer relationship management (CRM) project, which consists of functions like sales, service, marketing, and integrated database analysis. BJ Burlingame, head of digital business services for SAP Southeast Asia, said "Banking is essentially about data to gain insights into customers' behaviours and preferences, and essentially improving customer conversion rates, wallet share and customer loy- Intellasia 7 March / 48

11 alty." SAP's CRM application would enable organisations to "uncover insights that can simplify their sales processes with better customer engagement, accurate forecasting, and real-time pipeline management," she said, adding that "This will allow them to deliver contextual and personalised experience for their customers." With an increase in internet use in Vietnam, it is essential for businesses to invest in digital technology if they want to succeed, she said. Nguyen Minh Tam, deputy CEO of Sacombank, said: "The specific goal we have from this project is to take advantage of 360-degree customer views from CRM analytics to have better understanding of the needs and behaviours of existing and potential customers. "We consider the completion of CRM an essential factor in making Sacombank stand out from its competitors in the market." The bank, without divulging the cost of the project, said merely it cost a "large amount of money." It is expected to be ready in March next year. HDBank's profit may increase 64pct in 2018 Minister: CPTPP vital to sustainable development in Vietnam 07/MAR/2018 INTELLASIA NDH Hochiminh City Joint Stock Commercial Bank (HDBank, coded HDB) is among Vietnam's top eight joint stock commercial banks and top three consumer finance companies. Hochiminh city Securities Company (HSC) also pays attention to HDBank's growth potential from the unique customer ecosystem combined with Vietjet Air. The bank's strategy is to focus mainly on expanding network at rural area, targeting at individual customers and small and medium businesses. Meanwhile, HDBank is also the only shares of joint stock commercial banks on the bourse to have room for foreign investors. In 2018, HSC has positive assessments about HDBank's business operations. This unit forecasts that HDBank's customer loans will grow 25 percent, reaching trillion dong. HSC expects that HDBank and HD Saison will achieve the lending growth of 25 percent, touching trillion dong and trillion dong respectively. Customers' deposits grow 20 percent, hitting 144 trillion dong. The increase in customers' deposits only focused on the parent bank. HSC predicts that HDBank's NIM will increase to 4.6 percent from 4.06 percent in Of which, HDBank's NIM will improve from 2.43 percent in 2017 to 3.02 percent in HDSaison's NIM will be stable at percent in 2018 when the company launches the majority of new products to the market in Consolidated net interest income increased 40.5 percent to trillion dong. Of which, HD Saison's consolidated net interest income grew 25.1 percent, reaching trillion dong. HDB's consolidated non-interest income is estimated to swell 11.5 percent, touching trillion dong. HSC assumes that HDBank's income from service will grow strongly in 2018 after the bank applies higher fees to all of its customers (HSC forecasts the net interest for HD- Bank's service operation will grow percent, hitting 429 billion dong). On the other hand, HSC also estimates that the income from business/securities investment will drop 40 percent to 290 billion dong and has not included in its forecasted model the potential profit that may arise if HDBank sells VJC shares. Accordingly, after deducting fees, HSC estimates that HDBank's consolidated pre-tax profits may reach trillion dong, growing nearly 64 percent from the previous year. 07/MAR/2018 INTELLASIA VNA The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) Agreement would be a vital deal in utilising free trade and ensuring sustainable development in Vietnam, said minister of Industry and Trade Tran Tuan Anh. Therefore, economic sectors should prepare and take the initiative in economic re- Intellasia 7 March / 48

12 structuring in order to maximise the pact, which is scheduled to be inked in Chile on March 8 (local time) by ministers from its 11 member countries, Anh told the Vietnam News Agency (VNA). The minister said such sectors as garment-textiles, footwear, food processing, beverage, confectionery, tobacco, wine and beer will benefit most from the deal. He cited a research jointly conducted by the World Bank (WB) and the research institute under the Ministry of Planning and Investment as saying that Vietnam's GDP would be 1.1 percent higher in 2030 thanks to the CPTPP. Like other member countries, Vietnam has committed to market opening and trade facilitation and liberalisation towards lifting non-tariff barriers, the minister said. At the same time, the country will continue to streamline State management of market development, he said, stressing that through the agreement, competitiveness of the national economy as well as businesses will be likely improved. Citing 36 billion USD in foreign direct investment (FDI) poured into Vietnam in 2017, Anh said the pact would lead to breakthroughs in the flow of investment into the country. Domestic businesses, therefore, will have more resources to develop further and access technologies as well as quality human resources, the minister emphasized. However, apart from opportunities, the agreement would pose challenges to both the business circle and people if less attention was paid to fulfilling integration commitments, the minister warned. He cited lessons withdrawn from Vietnam's joining the World Trade Organisation (WTO) and signing of the Bilateral Trade Agreement (BTA) with the US to clarify his views. The official said a number of fields in the agriculture sector like sugarcane exploitation and sugar industry have remained slow in restructuring, as compared with other sectors like telecommunications, e-commerce, garments-textiles and footwear. According to him, the Ministry of Industry and Trade has designed specific communications projects in order to help businesses and people grasp opportunities generated by the agreement. The ministry will also submit an overall action plan to the government in preparation for the implementation of Vietnam's integration commitments while reviewing its legal framework. The CPTPP is set to take effect in early 2019 after it is ratified by at least six member countries. Its member economies make up about 13 percent of the global GDP. After the US withdrew from the Trans-Pacific Partnership (TPP), the predecessor of the CPTPP, in 2017, the remaining 11 countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam) agreed to maintain the deal and rename it CPTPP. They agreed on the revised content of the agreement on January 23, On February 21, the full text of the CPTPP was announced, which is considered a sign showing that the 11 countries are ready to sign the agreement. According to Reuters, more than 20 provisions of the CPTPP were suspended or changed compared to the TPP. Earlier, US President Donald Trump said his country would consider re-entering the CPTPP if the US could get a better deal Pacific trade pact countries go it alone without US 07/MAR/2018 INTELLASIA DTI NEWS A year after an abrupt US withdrawal left a fledgling 12-nation Pacific trade pact for dead, the 11 remaining states will sign a re-vamped deal Thursday aimed at slashing tariffs. The agreementrebranded as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)has been championed as an antidote to growing US protectionism under President Donald Trump. Intellasia 7 March / 48

13 "We are not going to be derailed by Trump's decision" to withdraw the US, said Felipe Lopeandia, Chile's top trade negotiator, ahead of the ratification ceremony in Santiago. After years of negotiations, the original dealthe Trans-Pacific Partnership, or TPPwas signed in February 2016 by 12 countries that border the Pacific Ocean. But it fell victim to Trump's "America First" policy, when he removed the pact's major linchpin before the deal could get under way. The CPTPP aims to slash tariffs between the 11 members and foster trade to boost growth. It will "send a political signal to the world and to the United States itself, that this is a global agreement," said Lopeandia. - Blow against protectionism - Coming in the same week that Trump risked a trade war over his decision to introduce tariffs on imported steel and aluminum, the deal is seen by some members as striking a blow against protectionism. Washington's exit meant a drastic downsizing of the original agreementwhich with US involvement represented 40 percent of the global economy. But the pactthough a diminished one involving 13.5 percent of global GDPremains hugely significant, according to Ignacio Bartesaghi of the Catholic University of Uruguay's business school. "There is no trade agreement involving that number of countries, and one that has 30 chapters which deal with all the most modern topics of international trade," Bartesaghi told AFP. Last month, Trump told the World Economic Forum in Davos that the US might return if it got a better deal. "Little by little, his advisors have managed to make Trump realise the role that the United States plays in Asia Pacific and the role played by the TPP in that region, not only in economic and trade terms, but in geopolitical terms," said Bartesaghi. But Japan, a key driver behind the revised pact, is skeptical. "If the United States returns to a more positive attitude toward the TPP, it is something we will welcome (but) it would not be so easy" to change the agreement again, said Tokyo's chief negotiator Kazuyoshi Umemoto. - More balanced - More than 20 provisions were suspended or changed in the new agreement, mostly rules over intellectual property originally inserted at the demand of US negotiators. Analysts noted these provisions were not canceled, however, with some suggesting the door is being left ajar for the US. Chilean authorities say the new chapter on intellectual property protection is now "more balanced." "The CPTPP will establish a new standard for other regional economic integration agreements, and even for future negotiations in the WTO (World Trade Organisation) and in Apec (Asia-Pacific Economic Cooperation)," said Chile's foreign ministry, which is hosting Thursday's landmark signing. Chile said membership of the new pact will improve access to markets currently responsible for 17 percent of its total exports. The other two Latin American countries, Mexico and Peru, will also improve their access to countries on the other side of the Pacific, such as Vietnam and Malaysia. "It means an increase in our potential market and the possibility that our people can access more products," said Mario Mongilardi, head of Lima's chamber of commerce. The 11 states represent a market of 500 million people, greater than that of the European Union's single market. The pact will come into force 60 days after it is fully ratified by six of the 11 members. The 11 TPP countries are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Intellasia 7 March / 48