FIRE PROVES GOLD ADVERSITY PROVES MEN

Transcription

1 annual report 2012

2 FIRE PROVES GOLD ADVERSITY PROVES MEN

3 04. MESSAGE FROM THE CHAIRMAN SIGNIFICANT EVENTS IN ESTABLISHMENT & DEVELOPMENT PROCESS 16. VISION, STRATEGY, CORE VALUES 18. BUSINESS GOALS & DEVELOPMENT STRATEGY FOR ORGANIZATIONAL STRUCTURE IN THE PERIOD OF MEMBERS OF THE BOARD OF DIRECTORS & SUPERVISORY BOARD 30. MEMBERS OF THE BOARD OF MANAGEMENT s ANNUAL REPORT 2012

4 CONTENT 36. REPORT OF THE BOARD OF MANAGEMENT 48. REPORT OF THE BOARD OF DIRECTORS 52. CORPORATE GOVERNANCE 58. ACHIEVEMENTS & AWARDS 64. HUMAN RESOURCES POLICIES 68. MB & THE COMMUNITY 70. BRANCH NETWORK 74. SUBSIDIARIES 80. FINANCIAL REPORT 62. HUMAN RESOURCES STATISTICS s ANNUAL REPORT 2012

5 MESSAGE FROM THE CHAIRMAN OF THE BOARD Dear shareholders, The 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 3,090 billion. Total loans grew by over 26%, nearly three times faster than the industry average; total deposits stood at 152,358 billion, up 26% against the beginning of the year and non-performing loans was maintained 4 s ANNUAL REPORT 2012

6 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 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 ( ) 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 MB s vision is to be among the top 3 jointstock commercial banks in terms of total assets, market share and earnings in 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 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 s ANNUAL REPORT

7 Significant events in 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 s ANNUAL REPORT 2012

8 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 175,000 billion, the charter capital reaching 10,000 billion, profit standing at billion. 03 Restructuring, strengthening overall capabilities of 5 subsidiaries 04 Successfully implementating of major business projects: 10,000 billion export incentives; 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. s ANNUAL REPORT

9 significant events in 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 MB Phnompenh - Cambodia reaping profits after 6 months of operation: This is the second MB overseas branch operating in 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. 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 s ANNUAL REPORT 2012

10 08 Successfully switching to a new organizational model embracing the 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 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. s ANNUAL REPORT

11 10 s ANNUAL REPORT 2012

12 GENERAL INFORMATION: Establishment & Development Process Vision, Strategy, Core Values Business Goals & Development Strategy for Organizational Structure during Members of the BODs & Supervisory Board Members of the Board of Management s ANNUAL REPORT

13 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 20 billion and 25 employees MB successfully shifted its organizational model following the Development Strategy for and finished moving the Head Office from No. 3 Lieu Giai Street to No. 21 Cat Linh Street, Hanoi. With pre-tax profit of 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 s ANNUAL REPORT 2012

14 1994 With the initial charter capital of 20 billion, MB was established for the purpose of financing military enterprises 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 After 7 years of effective operation ( ), 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 strategy with a vision towards MB became the first commercial joint stock bank to offer its shares via public bidding with total par value of 20 billion 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. 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). MB started the process of organizational restructuring, improving and implementing the personnel strategy under the organizational model of the period Viettel Group became a strategic shareholder and MB increased its share capital to 3,400 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 5,300 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 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 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 , 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. s ANNUAL REPORT

15 ESTABLISHMENT AND DEVELOPMENT PROCESS TOTAL ASSETS Total assets ( billion) capital mobilising Deposits of economic organizations & individuals ( billion) 14 s ANNUAL REPORT 2012

16 TOTal outstanding loans Total outstanding ( billion ) Profit before tax Profit before tax ( billion) s ANNUAL REPORT

17 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 s ANNUAL REPORT 2012

18 Motto for growth Fast Different Sustainable Efficient Creative Professional Performance - driven s ANNUAL REPORT

19 Business goals and development strategy for s ANNUAL REPORT 2012

20 OVERVIEW OF BUSINESS ENVIRONMENT and MB S POSITION 2012 Business environment overview In 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 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. MB s current position With 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. This can be seen clearly through a number of MB s performance indicators in 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. s ANNUAL REPORT

21 MB s strategic goals period Target of growth for the period Top 3 Commercial joint stock banks in Viet Nam Annual Growth rate times higher than domestic banking industry s average growth rate 20 s ANNUAL REPORT 2012

22 Vision for the period 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 s ANNUAL REPORT

23 ORGANIZATIONAL STRUCTURE IN THE PERIOD OF 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

24 BOARD OF DIRECTORS BOARD OF DIRECTORS OFFICE CEO ALCO HR DIVISION CEO OFFICE STRATEGY DEPLOYMENT DIVISION INVESTMENT BOARD FUNDAMENTAL CONSTRUCTION BOARD TREASURY DIVISION NETWORK & DISTRIBUTION DIVISION OPERATION DIVISION IT DIVISION BRANCHES Branches & Transactions Branches & Transactions Branches & Transactions Branches & Transactions Branches & Transactions s ANNUAL REPORT

25 Members of the board of directors Mr. Le Huu Duc Chairman of the Board of directors Mr. Le Van Be 1 st Vice Chairman of the Board of directors Mr. Nguyen Manh Hung Vice Chairman of the Board of directors Mr. Ha Tien Dung Member of Board of directors Mr. Dau Quang Lanh Member of Board of directors Mr. Nguyen Dang Nghiem Member of Board of directors Ms. Tran Thi Kim Thanh Member of Board of directors 24 s ANNUAL REPORT 2012

26 Mr. Le Huu Duc Chairman Ông Lê Hữu Đức Chủ tịch HĐQT 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, 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 First Vice Ông Chairman Lê Văn Bé Phó Chủ tịch thứ nhất HĐQT 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. Mr. Nguyen Manh Hung Vice Chairman Ông Nguyễn Mạnh Hùng Phó Chủ tịch HĐQT 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. s ANNUAL REPORT

27 Members of the Board of directors Mr. Ông Dau Đậu Quang Lanh Lành Member Thành viên HĐQT 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. Mr. Ông Ha Hà Tien Tiến Dung Dũng Member Thành viên HĐQT 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 s ANNUAL REPORT 2012

28 Ms. Bà Tran Trần Thi Thị Kim Thanh Member Thành viên HĐQT 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. Mr. Ông Nguyen Nguyễn Dang Đăng Nghiem Nghiêm Member Thành viên HĐQT 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. s ANNUAL REPORT

29 Members of the Supervisory Board Ms. Pham Thi Ty Head 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. Mr. Le Cong Soa Member of 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 s ANNUAL REPORT 2012

30 Ms. Nguyen Thanh Binh Member of Supervisory Board 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. Mr. Nguyen Xuan Truong Member of Supervisory Board 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 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. s ANNUAL REPORT

31 Members of the Board of Management Mr. Le Cong Chief Executive Officer (CEO) Ms. Nguyen Minh Chau vice ceo Ms. Pham Thi Trung Ha vice ceo Mr. Dang Quoc Tien Vice CEO Mr. Hoang The Hung Vice CEO MS. NGUYEN THI AN BINH vice ceo MS. VU THI HAI PHUONG vice ceo MR. DO VAN HUNG vice ceo MS. CAO THUY NGA vice ceo MS. LE THI LOI CFO 30 s ANNUAL REPORT 2012

32 Mr. Le Cong Chief Executive Officer (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, He is an enthusiastic and drastic leader in executing MB s strategy during the period of MR. DO VAN HUNG Vice ceo 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 Ms. Pham Thi Trung Ha vice ceo 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 Vice CEO Mr. Dang Quoc Tien was born on 15th of July 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. s ANNUAL REPORT

33 Members of the Board of Management On 15th November 2012, Mr. Hoang The Hung was appointed Vice CEO in charge of Information Technology under the Decision No.708/QD- HDQT signed by MB s Chairman. Mr. Hoang The Hung 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 He is expected to promote the development of MB s hitech banking products in the coming years. Ms. Nguyen Thi An Binh vice ceo 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 Ms. Binh is now in charge of Operation Division. Ms. Vu Thi Hai Phuong vice ceo 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 s ANNUAL REPORT 2012

34 Ms. Nguyen Minh Chau 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. s ANNUAL REPORT

35 34 s ANNUAL REPORT 2012

36 REPORT OF THE BOARD OF MANAGEMENT Overview 2012 s Operational Results 2013 Plans s ANNUAL REPORT

37 Report of the Board OF MANAGEMENT MB S PERFORMANCE IN 2012 AND PLANS FOR 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 s ANNUAL REPORT 2012

38 Table of key indicators Indicators % change Total assets 138, , % Chartered capital 7,300 10, % Total mobilized capital 120, , % Total loans and investments (*) 60,706 76, % Total loans 59,045 74, % Non-performing loan ratio 1.59% 1.84% 116% Pre tax profit 2,625 3, % (*)Includes: total loans and investments in corporate bonds, exclusive of financial institution bonds as regulated in Directive No. 674/NHNN- CSTT). 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 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 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 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 733 billion, up by 14% compared to 2011, accounting for 9.38% of the total operating income. s ANNUAL REPORT

39 Report of the Board OF MANAGEMENT Business strategy execution MB has implemented development strategies for the 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 s ANNUAL REPORT 2012

40 Improving service quality Service 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 The 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 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, 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. s ANNUAL REPORT

41 Report of the Board OF MANAGEMENT Profitability With 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, an increase of 18% compared to 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) 26.61% 29.02% 28.34% 27.46% Pre-tax profit/average total assets (ROA) 2.66% 2.56% 2.11% 1.97% Liquidity In 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) 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 s ANNUAL REPORT 2012

42 Statement Báo cáo tình of hình Financial tài chính position Chỉ số TÀI CHÍNH NỔI BẬT 2012 s ANNUAL REPORT

43 audited consolidated figures Total assets 175,610 bilion 26% compared with the figure of Profit before tax 3,090 bilion 18% compared with the figure of Total outstanding 74,479 bilion 26% compared with the figure of Total capital mobilization EPS 152,358 bilion 26% compared with the figure of ,457/share ROA ROE 1.97% 27.46% 42 s ANNUAL REPORT 2012

44 Some of financial indicators in the last five years Indicators Total assets (Billion dong) 44,346 69, , , ,610 Owner s Equity (Billion dong) 4,424 6,888 8,882 9,642 12,864 Of which: Chartered capital (Billion dong) Deposits from institutions and individuals (Billion dong) 3,400 5,300 7,300 7,300 10,000 27,163 39,978 65,741 89, ,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 Non interest income (Billion dong) ,211 Total operating income (Billion dong) 1,638 2,654 4,088 5,147 7,813 Total operating costs (Billion dong) ,254 1,881 2,697 Operating profit before provisions for credit losses (Billion dong) 1,083 1,869 2,834 3,266 5,117 Provisions for credit losses (Billion dong) ,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% Net income/total assets (ROA) (%) 2.33% 2.66% 2.56% 2.11% 1.97% Number of transaction offices 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 s ANNUAL REPORT

45 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 s ANNUAL REPORT 2012

46 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: No. Indicators Result 2012 Plan 2013 % compare with Total assets 175, , % 2 Chartered capital 10,000 15, % 3 Total mobilized capital 152, , % 4 Total loans and investments (*) 76,314 83, % 5 Total loans 74,479 83, % 6 Non-performing loan ratio 1.84% <2.5% 7 Pre tax profit 3,090 3, % (*)Includes: total loans and investments in corporate bonds, excluding financial institution bonds as regulated in Directive No. 674/NHNN-CSTT). s ANNUAL REPORT

47 46 s ANNUAL REPORT 2012

48 REPORT OF THE BOARD OF DIRECTORS Notable Achievements Outlook & Plans for Future Development CORPORATE GOVERNANCE Activities of the BOD & Supervisory Board Shareholders policy s ANNUAL REPORT

49 báo report cáo of của the hội board đồng of quản directors trị NOTABLE ACHIEVEMENTS IN 2012 In 2012, MB recorded encouraging achievements during the implementation of the 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 s ANNUAL REPORT 2012

50 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 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. s ANNUAL REPORT

51 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 ( ) 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 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 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 s ANNUAL REPORT 2012

52 s ANNUAL REPORT

53 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, 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: or directly contact Shareholders Management Office (Address: 3rd Floor No. 3 Lieu Giai - Ba Dinh - Hanoi. Tel: ) 52 s ANNUAL REPORT 2012

54 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 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 s ANNUAL REPORT

55 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 % Equity Owned as at December 31, 2011 % Equity Owned as at December 31, Le Huu Duc - 0% 0.003% 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 s ANNUAL REPORT 2012

56 Major shareholders (Equity owned >=5%) No. Shareholders Names Address Bank for Foreign Trade of Vietnam (Vietcombank) Vietnam Military Telecom Corporation (Viettel) Vietnam Maritime Commercial Joint Stock Bank 4 Vietnam Helicopter Corporation No. 198 Tran Quang Khai Street, Hanoi City No. 01 Giang Van Minh Street, Hanoi City No. 88 Lang Ha Street, Dong Da district, Hanoi City No. 172 Truong Chinh Street, Hanoi City Principal business activities As at December 31, 2012 Number of shares owned % Equity owned Banking 97,900, % Telecommunication 150,000, % Banking 94,114, % Air service 52,882, % Shareholder Structure No. Classification of shareholders Number of shareholders Number of shares owned % Equity Owned 1 Institutional shareholders ,904, % A Domestic ,399, % B Foreign 63 85,504, % 2 Individual shareholders 14, ,095, % A Domestic 14, ,154, % B Foreign , % Total 15,073 1,000,000, % s ANNUAL REPORT

57 56 s ANNUAL REPORT 2012

58 Achievements & Awards Human Resource Community Activities Branch Network Subsidiaries s ANNUAL REPORT

59 MB significant achievements and awards in 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 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 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 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. 05 CERTIFICATE OF MERIT GRANTED BY PRIME MINISTER Mr Le Cong MB s CEO was awarded for his outstanding achievements during , contributing to the cause of building socialism and defending nation. 58 s ANNUAL REPORT 2012

60 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 RECOGNITION FLAG GRANTED BY HANOI PEOPLE S COMMITTEE This is granted to entities with significant contributions to the development of the city. s ANNUAL REPORT

61 60 s ANNUAL REPORT 2012

62 Human Resources Statistics Policies for Employees s ANNUAL REPORT

63 General statistics of HR* * MB Bank alone average before tax/ person in 2012 Million number of employees till 31/12/2012 average age 5,221 people 28 year-old average profit before tax/person million dong/ person 62 s ANNUAL REPORT 2012

64 educational qualification by 2012 post-graduate & university degree college degree 4, people people vocational secondary education certificate or equivalents 288 people s ANNUAL REPORT

65 policies for employees 64 s ANNUAL REPORT 2012

66 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 Apart 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. s ANNUAL REPORT

67 66 s ANNUAL REPORT 2012

68 MB s Social Activities in 2012 s ANNUAL REPORT

69 community activities 68 s ANNUAL REPORT 2012

70 Living the spirit of solidarity and mutual assistance, the MB soldiers on the economic front are also committed enthusiasts of meaningful community activities. Apart 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 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. s ANNUAL REPORT

71 Branch Network 70 s ANNUAL REPORT 2012

72 Branches in Vietnam Number of transaction points An Giang 1 Bac Ninh 2 Binh Dinh 3 Binh Duong 2 Can Tho 3 Da Nang 6 Dak Lak 3 Dong Nai 4 Dong Thap 1 Gia Lai 1 Ha Noi 60 Hai Duong 1 Hai Phong 13 Ho Chi Minh 37 Hue 4 Hung Yen 2 Khanh Hoa 3 Kien Giang 1 Lao Cai 1 Long An 1 Nghe An 3 Ninh Binh 3 Quang Nam 2 Quang Ngai 2 Quang Ninh 5 Quang Tri 1 Tay Ninh 1 Thai Nguyen 2 Thanh Hoa 3 Viet Tri 5 Vinh Phuc 1 Vung Tau 3 Overseas Branches Number of branches Cambodia 1 Laos 1 s ANNUAL REPORT

73 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 s ANNUAL REPORT 2012

74 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. s ANNUAL REPORT

75 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: -Tel: MB Capital Fund Management Joint Stock Company (MB Capital) -Add: 8th floor, MB Building, Lieu Giai street, Ba Dinh, Hanoi. -Website: -Tel: Military Commercial Joint Stock Bank- Asset managentment company limited (MB AMC) -Add: 4th floor, No.195, Kham Thien street, Dong Da, Hanoi. -Website: -Tel: COÂNG TY COÅ PHAÀN ÑÒA OÁC MB MB Land Joint Stock Company (MB Land) -Add: No. 6-8, Chua Boc street, Dong Da, Hanoi. -Website: -Tel: Viet REMAX Joint Stock Company -Add: No. 259 Tran Hung Dao street, Co Giang, District 1, HCM city. -Website: -Tel: s ANNUAL REPORT 2012

76 Business Registration Certificate Business activities Charter capital ( 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, % 07/UBCK-GPHĐQLQ issued by the State Security Commission on 29 September 2006 Funds management 100, % dated 11 September 2002 issued by Hanoi Department of Planning and Investment Liabilities and asets management 582,6 100% dated 25 January 2008 issued by Hanoi Department of Planning and Investment Real estate investment and trading 653, % issued by Ho Chi Minh Department of Planning and Investment on 02 February 2010 Invest in development of and trading office for lease 100, % s ANNUAL REPORT

77 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 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 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 s ANNUAL REPORT 2012

78 MB Land Joint Stock Company (MB Land) COÂNG TY COÅ PHAÀN ÑÒA OÁC MB MB Land was founded by 6 legal entities in It increased the chartered capital from 475 billion to 654 billion with its total assets of over 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. s ANNUAL REPORT

79 78

80 financial report general information REPORT OF THE BOARD OF MANAGEMENT AUDITED CONSOLIDATED FINANCIAL STATEMENTS Independent auditors report Consolidated balance sheet Consolidated income statement Consolidated cash flow statement Notes to the consolidated financial statements

81 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 /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 Business License No. Industry % OWNED BY THE BANK 01 MB Asset Management Company Limited ( MB AMC ) dated 11 December 2012 granted by Hanoi s Department of Planning and Investment Debt and asset management 100% 02 07/GPĐC-UBCK dated 14 January 2013 granted by Hanoi s MB Securities Joint Stock Company (the original name was Thang Long Department of Planning and Securities Joint Stock Company) MBS Investment Securities investment and trading % 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 Department of Planning and Investment Fund management % 04 Military Bank Land Joint Stock Company (MB Land) (*) dated 25 October 2012 granted by Hanoi s Department of Planning and Investment Property trading 65.88% 05 Viet Remax Joint Stock Company (*) dated 8 February 2010 granted by Ho Chi Minh city s Department of Planning and Investment Office buildings and residential construction 78.09% (*): Indirect ownership through subsidiaries. 80

82 GENERAL INFORMATION (continued) ASSOCIATES As at 31 December 2012, the Bank had three (03) associates as follows: No Name Business License No. Industry % OWNED BY THE BANK 01 Vietasset Investment Joint Stock Company (*) dated 27 May 2010 granted by Hanoi s Department of Planning and Investment Construction investment 45.00% 02 Long Thuan Loc Joint Stock Company (*) dated 19 May 2008 granted by Dongnai province s Department of Planning and Investment. Construction 29.65% 03 Military Insurance Joint Stock Company ( MIC ) 43GP/KDBH granted by the Ministry of Finance on 8 October 2007 Non-life insurance 49.76% (*): Indirect ownership through subsidiaries. 81

83 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 Appointed on 28 April 2011 Mr. Le Van Be Vice Chairman Re-appointed on 29 July 2009 Mr. Nguyen Manh Hung Vice Chairman Appointed on 29 July 2009 Mr. Ha Tien Dung Member Appointed on 29 July 2009 Mr. Dau Quang Lanh Member Re-appointed on 29 July 2009 Mr. Nguyen Dang Nghiem Member Appointed on 29 July 2009 Ms. Tran Thi Kim Thanh 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 Date of appointment/re-appointment Ms. Pham Thi Ty Chief Appointed on 29 July 2009 Ms. Nguyen Thanh Binh Member Appointed on 29 July 2009 Mr. Nguyen Xuan Truong Member Re-appointed on 29 July 2009 Mr. Le Cong Soa Member Appointed on 29 July

84 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 Appointed on 5 January 2010 Mr. Dang Quoc Tien Deputy General Director Appointed on 7 May 2002 Mr. Do Van Hung Deputy General Director Appointed on 18 October 2005 Ms. Cao Thi Thuy Nga Deputy General Director Appointed on 1 January 2006 Ms. Vu Thi Hai Phuong Deputy General Director Appointed on 11 June 2007 Mr. Luu Trung Thai (*) Deputy General Director Appointed on 15 April 2008 Ms. Nguyen Thi An Binh Deputy General Director Appointed on 23 November 2009 Ms. Nguyen Minh Chau Deputy General Director Appointed on 23 November 2009 Ms. Pham Thi Trung Ha Deputy General Director Appointed on 27 April 2011 Mr. Hoang Le Hung Deputy General Director Appointed on 15 November 2012 Ms. Le Thi Loi Chief Finance Officer Appointed on 23 November 2009 (*): 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

85 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 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 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 Chief Executive Officer Hanoi, Viet Nam - 28th February,

86 INDEPENDENT AUDITORS REPORT Refference: / To: 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 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. 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 Deputy General Director Certificate No. 0452/KTV Hoang Thi Hong Minh Auditor in-charge Certificate No. 0761/KTV Hanoi, Viet Nam 28th February,

87 CONSOLIDATED BALANCE SHEET as at 31 December 2012 Notes 31 December December 2011 ASSETS Cash and cash equivalents on hand 5 864,942,781, ,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 Placements with other banks 18,345,651,101,518 41,056,573,671,267 Loans to other banks 24,759,337,400, ,190,000,000 Provision for loans to other banks (162,605,571,688) - Trading securities 8 229,737,919, ,196,437,581 Trading securities 8 490,923,128,122 1,194,306,537,316 Provision for impairment of trading securities 13.1 (261,185,208,167) (368,110,099,735) Loans and advances to customers 73,165,823,165,254 57,952,296,461,413 Loans and advances to customers 9 74,478,564,337,372 59,044,836,949,430 Provision for loans and advances to customers 10 (1,312,741,172,118) (1,092,540,488,017) Investment securities 41,387,495,927,337 19,412,920,211,865 Available-for-sale investment securities ,946,378,139,035 14,868,663,336,722 Held-to-maturity investment securities ,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) Long-term investments 12 1,602,316,167,085 1,781,279,481,134 Investments in associates ,693,018, ,575,056,628 Other long-term investments ,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) Fixed assets 1,497,636,387,392 1,551,406,310,100 Tangible fixed assets ,117,268, ,820,208,461 Cost 1,023,197,001, ,936,819,824 Accumulated depreciation (572,079,732,552) (416,116,611,363) Intangible assets ,046,519,118,403 1,080,586,101,639 86

88 CONSOLIDATED BALANCE SHEET (CONTINUED) as at 31 December 2012 Notes 31 December December 2011 Cost 1,245,130,490,277 1,203,436,820,745 Accumulated amortization (198,611,371,874) (122,850,719,106) Investment properties ,733,579, ,138,579,986 Cost 151,733,579, ,138,579,986 Accumulated depreciation - - Other assets 7,528,836,962,401 8,546,980,659,779 Interest and fee receivables 2,938,446,858,997 1,618,383,424,772 Deferred tax asset ,028,682,000 8,493,526,750 Accounts receivable 16 4,077,969,153,309 5,031,389,882,639 Other assets ,905,162,704 2,165,074,242,641 Provision for other assets 18 (145,512,894,609) (276,360,417,023) TOTAL ASSETS 175,609,964,065, ,831,492,308,446 87

89 CONSOLIDATED BALANCE SHEET (CONTINUED) as at 31 December 2012 Note 31 December December 2011 LIABILITIES Borrowings from the Government and the State Bank of Vietnam ,477,289,152 - Due to banks 20 30,512,107,135,831 26,672,484,256,550 Due to customers ,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 ,591,782, ,504,544,500 Valuable papers issued 24 3,420,068,393,288 4,531,631,630,177 Other liabilities 9,696,283,312,392 7,556,762,013,844 Interest and fee payables 1,389,257,024,034 1,045,738,735,038 Tax payables 27 78,271,141, ,138,357,091 Other payables 25 8,021,365,893,465 5,984,963,488,180 Provision for off-balance sheet commitments ,389,253, ,921,433,535 TOTAL LIABILITIES 162,080,117,670, ,533,692,862,364 OWNERS EQUITY Capital and reserves Capital 28 10,320,233,376,265 7,547,587,039,063 Chartered capital 10,000,000,000,000 7,300,000,000,000 Share premium 338,420,864, ,764,812,500 Other capital (18,187,488,555) (6,177,773,437) Reserves 28 1,037,991,429, ,821,944,174 Undistributed earnings 28 1,505,681,017,687 1,249,734,068,530 TOTAL OWNERS EQUITY 12,863,905,823,645 9,642,143,051,767 MINORITY INTERESTS ,940,571, ,656,394,315 TOTAL LIABILITIES AND OWNERS EQUITY AND MINORITY INTERESTS 175,609,964,065, ,831,492,308,446 88

90 CONSOLIDATED BALANCE SHEET (CONTINUED) as at 31 December 2012 CONSOLIDATED OFF-BALANCE SHEET ITEMS Note 31 December December 2011 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, ,285,911,892,096 75,794,709,765,988 Prepared by: Approved by: Approved by: Ms. Ngo Bich Ngoc Head of Accounting Department Ms. Le Thi Loi Chief Finance Officer Mr. Le Cong Chief Executive Officer Hanoi, Vietnam 28 February

91 CONSOLIDATED INCOME STATEMENTS for the year then ended 31 December 2012 Note 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) Net interest and similar income 6,602,558,576,006 5,222,398,308,688 Fees and commission income ,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 ,709,326, ,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 ,070,177,185 (655,427,623,253) Dividend income 36 67,869,769,645 79,404,721,958 Net gain from other operating activities ,343,900,137 56,641,237,000 TOTAL OPERATING INCOME 7,813,370,090,489 5,147,129,737,696 Personnel expenses (1,426,502,072,238) (824,090,012,976) 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) TOTAL OPERATING EXPENSES (2,696,658,577,148) (1,880,659,769,345) Profit before provision for credit losses 5,116,711,513,341 3,266,469,968,351 Provision for loans to banks 7 (162,605,571,688) - Provision for loans and advances to customers 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) 90

92 CONSOLIDATED INCOME STATEMENTS (continued) for the year then ended 31 December 2012 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) - PROFIT AFTER TAX FOR THE YEAR 2,320,035,899,881 1,915,335,542,693 Minority interests ,156,955,819 (211,373,915,862) NET PROFIT ATTRIBUTABLE TO THE BANK 2,305,878,944,062 2,126,709,458,555 Basic earnings per share ,457 2,913 Prepared by: Approved by: Approved by: Ms. Ngo Bich Ngoc Head of Accounting Department Ms. Le Thi Loi Chief Finance Officer Mr. Le Cong Chief Executive Officer Hanoi, Vietnam 28 February