Company Profile and Recent Significant Developments June 30 th, 2013 This document is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from LienVietPostBank. This material was used by LienVietPostBank during an oral presentation; it is not a complete record of the discussion.
As of June 30 th, 2013 LIENVIETPOSTBANK AT A GLANCE Chartered capital: USD ~ 310 million Total assets: USD ~ 3,752 million Profit after tax: USD ~ 9.7 million CAR: 16.22% ROAA: 0.75% ROAE: 7.45% NPL: 2.77% (Exchange rate: 1 USD = 20,828 VND) Full name: Lien Viet Post Joint-Stock Commercial Bank (LienVietPostBank) LienVietPostBank operates under the banking License No.91/GP-NHNN dated March 28 th, 2008 signed by the Governor of the State Bank of Vietnam. Ranked 39 th in the TOP 500 Vietnam s biggest private enterprises according to VNR500 in 2012 2 LienVietPostBankProfile
52.69% 47.31% Individual Shareholders (3,003 Shareholders) Institutional Shareholders (24 Shareholders) LienVietPostBankProfile 3
MAJOR SHAREHOLDERS VNPOST (12.54%) Vietnam Post Corporation HIM LAM (10.44%) Him Lam Corporation Chartered Capital USD 390 million Business line Post Postal financial services Communication and Distribution Headquarter Hanoi Became LPB s shareholder since July 1 st, 2011 Chartered Capital USD 312 million Business line Real estate Headquarter Ho Chi Minh City Ranked in the top 500 Vietnam s biggest private enterprises according to VNR500-2012 Ranked 6 th in the top Vietnam s biggest real estate private enterprises. 4 LienVietPostBankProfile
ORGANIZATIONAL STRUCTURE SHAREHOLDER MEETING Board of Supervisors Board of Directors Strategy, Technology, Business & International Relations Committee Human Resources, Credit & Cost Management Committee ALCO, Legislation, Risk Management & AML Committee Banking Postal Services Co-ordination Council Strategy & International Relations Council Business Council Technology Council HR Council Headquarters Credit Council Cost Management Council ALCO, Legislation, Risk Management & AML Council Risk and Debt Handling Council Northern Credit Council Southern Credit Council Board of Management Branch Credit Board Branch Credit Board Business Development Section Consulting Section Back office Section Supervision Section Card & E-banking Big Corporate & Private Banking Treasury International Relations & Global Capital Markets Legislation, Risk Product Management & AML Credit Review PTO Management Network Development & Organizational Management HR Finance IT Trade Service Administration Northern Representative Office Southern Representative Office Internal Audit LienVietPostBankProfile 5
VISION AND STRATEGY Expand network coverage to target the untapped rural area and small and medium enterprise market segments. Approach customers through advanced, user-friendly, and cost effective technologies such as Phone banking, Mobile banking, Internet banking and Mobile money (Vi Viet) Design products based on the needs of customers and following standards of Simplicity, Comprehensibility, Cost effectiveness. Place transaction points at convenient locations and in a simple and friendly arrangement manner. Build corporate culture on 3 core values: Discipline, Creativity and Humanity. 6 LienVietPostBankProfile
PRODUCTS AND SERVICES Capital mobilization products Credit products Services Electronic banking products LPB provides various term deposit products with competitive interest rates. Some typical products are: term saving deposits with flexible principle withdrawal, floating rate deposits, step-up deposits, automatic investment accounts, studying abroad saving deposits, high interest-rate deposits. As of June 30th, 2013, LPB mobilizes its capital from nearly 620 thousand client accounts, compared to 513 thousand ones at end of 2012. Retail banking products: Flagship products include car loans, real-estate loans, consumer loans, mortgage loans, study overseas loans, agricultural loans and home loans. Corporate banking products: Leading products include short-term credit line, export financing with competitive interest rate, LPB guarantee product packages, foreign bill purchase and agricultural loans. LPB finances small enterprises with business in manufacturing sector and this contributes significantly to the bank s performing loans and profit. As from June 2013, VNPost, the strategic partner of LPB, was selected as the sole entity to distribute and service 3 millions of pension accounts throughout the country. This opens up a huge opportunity for LPB to realize its financial inclusion strategy. LPB provides full range of services from domestic payment, international settlement and cash management to financial consultancy and property keeping services. In 2012, LPB has successfully developed and launched two breakthrough services which are Green banking (including products and services with environment-protecting covenants and non-cash transaction services) and New Generation Bank (including products and services targeting at children and parents with assistance in educating personal finance management). Besides, LPB is also eligible for providing State budget collection service, electricity bill collection service and completing procedure to launch telephone bill collection service for Viettel Telecom Group and Vietnam computerized lottery company. Internet Banking, SMS Banking, Mobile Banking. Vi Viet E-wallet (mobile money) is a potential product which helps LPB to reach the un-banked segment and the mass market. ATM, Master card. LienVietPostBankProfile 7
INTERNATIONAL PAYMENT ACTIVITIES With the advantages of our brand, products and highly qualified staffs, international payment activities of LienVietPostBank managed to maintain its encouraging growth, gaining firm confidence from its customers and correspondent banks. Our international payment activities were made in the U.S, Japan, Europe, Taiwan, Hong Kong, Singapore, South Korea, China etc. The results of 30/6/2013 were indicated as follows: Import volume through LienVietPostBank reached USD 163 million and 1,379 transactions whereas Export volume amounted to USD 71 million and 851 transactions. Correspondent banking relationship was established with over 500 banks (in which 281 are top banks) in 46 countries. LienVietPostbank has won Wells Fargo Bank s Recognition Award for achieving a High Straight - Through Payment (STP) Rate of 90% in the first six months of year 2013. LienVietPostBank has been honoured by JP Morgan Chase Bank for being One of the most active Vietnamese bank in terms of standardizing the payment format. STP rate in June 2013 achieved the highest rate in comparison with the previous years. 8 LienVietPostBankProfile
TECHNOLOGY Oracle Form LPB s Core Banking system utilizes Oracle Form & Report to support the full spectrum of banking operations. GPS - To provide higher safety and security, LienVietPostBank s IT system uses the Global Positioning System (GPS) which monitors the network operations, enhances cashflow management and onsite collection services. Daily reports & Post Office Transactions LPB s IT team has developed its own core system for the Postal Transaction Office System which fully serve the needs of more than 10,000 transaction points of VNPost to connect and integrate with the current core banking system of LPB, allowing efficient network management of more than10,000 postal transaction offices across 63 provinces nationwide. Recognitions - IT Head of LienVietPostBank received the CSO award which reflects the Bank s remarkable effort in providing a more secured information technology system. LienVietPostBankProfile 9
LPB NETWORK Network system: 67 own transaction points; 1,031 postal transaction offices (PTOs) and more than 10,000 post offices which can be upgraded to postal transaction offices. Network Coverage: presented in 27 cities and provinces in Vietnam Northern Vietnam: Hanoi, Bac Giang, Bac Ninh, Hai Phong, Lang Son, Ninh Binh, Quang Ninh and Bac Kan. Central Vietnam: Da Nang, Hue, Khanh Hoa, Nghe An, Quang Ngai, Thanh Hoa. Dac Lak and Gia Lai. Southern Vietnam: Ho Chi Minh City, An Giang, Binh Duong, Ca Mau, Can Tho, Dong Nai, Hau Giang, Kien Giang, Soc Trang, Vung Tau and Long An. LPB will probably present in 54 cities and provinces in Vietnam by the end of 2013.
CORPORATE SOCIAL RESPONSIBILITY In 2013, LPB committed to contribute nearly USD 5 billion donation in the following areas: Education - Sponsor for construction of schools, bridges, public healthcare stations, historical and cultural memorials, granting education and training equipment. LPB has funded various schools in over 20 provinces in Vietnam. - Fund for Intellectual Talent Encouragement via scholarship programs and education promotion funds in coordination with universities and localities. Culture - Fund for the 5 th Quang Nam Heritage Festival 2013 - Sponsor for Elderly Association in Phu Tho Province - Other programs to reduce poverty Xin Man Development Company (established in 2010 and 44% of its capital was contributed by LPB) has donated nearly USD 4 billion in developing public transportation infrastructure, healthcare, education, plantation farming and infrastructure construction in order to help the people earn their living and reduce poverty in Xin Man district, Ha Giang province, one of the 62 poorest districts in the country. LienVietPostBankProfile 11
HISTORICAL HIGHLIGHTS OUR HISTORY OF GROWTH 12 LienVietPostBankProfile Mar 2008: Oct 2009: Jul 2010: May 2011: Jul 2011: Sep 2011: Nov 2011: Jan 2012: May 2012: Jan 2013: Received operation license from the SBV (formerly known as Lien Viet Jointstock Commercial Bank) Increased chartered capital to USD 193 million. Signed cooperation agreement with Wells Fargo in Washington DC. Officially formed relationship with IFC through the GTFP with an initial trade line of USD 5 million. - Merged with Vietnam Postal Savings Company (VPSC), and changed name to LienVietPostBank. - Became a member of the World Savings Banks Institute (WSBI). Successfully participated in SMEs financing via Japan International Corporation Agency (JICA) loans. Successfully called for support from WSBI & IFC in consulting microfinance development strategy & competitiveness improvement. On January 16 th, 2012, the LPB s GTFP trade line was increased to US 20 million by IFC, allowing LPB to further help SMEs sustain import and export activities. Successfully participated in the third Rural Finance Program built by the World Bank to support end-borrowers which are individuals, households and SMEs in rural areas. Ranked 39 th in the TOP 500 biggest private enterprises in Vietnam according to VNR500.
LIENVIETBANK AND VPSC MERGER Vietnam Post Saving Company (VPSC) is a subsidiary of Vietnam Post Corporation (VNPost), which is a member of Vietnam Post and Telecommunications Group (VNPT). Since 1999, through VNPost s network, VPSC has been offering saving products and services such as remittance, collectives to customers mainly in rural areas. LienVietBank and VNPost signed a 50-year-co-operation agreement which allows LPB to be an exclusive bank in providing postal saving services and other banking services through out the network of more than 10,000 transaction points of VNPost. On July 29 th, 2011, LienVietBank declared the merger and changed the name to LienVietPostBank. As of December 31 st 2012, VNPost increased their holding to 12.54% stakes in LPB. This gives LPB the opportunity to be present in 63 cities and provinces with 90% coverage at communal level around the country. Additionally, the huge client base of more than 400,000 individual clients and strong relationship with the World Saving Bank Institution(WSBI) are great advantages that LPB acquired through the merger. In the next 10 years, it is expected that the Bank can meet its goal of expanding full banking services to at least 80% of more than 10,000 post offices throughout Vietnam, including mobile wallets/cards, mobile micro-finance services, banking transaction and other banking products and services. LienVietPostBankProfile 13
ASSET GROWTH USD million TOTAL ASSETS 4,000 3,752 3,500 3,000 2,500 2,695 3,189 2,000 1,848 1,500 1,000 968 500 439 2008 2009 2010 2011 2012 Q2.2013 Source: LienVietPostBank s 2008 Q2.2013 financial reports audited by Deloitte 14 LienVietPostBankProfile
CAPITAL MOBILIZATION, LOANS & ADVANCES DEPOSITS FROM CUSTOMERS TOTAL LOANS AND ADVANCES USD million USD million 3,000 2,500 2,670 3,000 2,500 2,000 1,985 2,000 1,500 1,000 500 1,500 1,232 1,000 650 407 500 168 142 301 515 607 1,085 1,552 2008 2009 2010 2011 2012 Q2.2013 2008 2009 2010 2011 2012 Q2.2013 Source: LienVietPostBank s 2008 Q2.2013 financial reports audited by Deloitte LienVietPostBankProfile 15
FINANCIAL OVERVIEW BALANCE SHEET 2010 2011 2012 Q2.2013 Total assets 1,847,915 2,695,042 3,188,611 3,752,315 Cash 4,698 7,876 8,776 10,286 Balances with the State Bank of Vietnam 21,145 66,751 154,408 44,763 Balances with and loans to credit institutions 292,776 952,500 739,364 565,951 Loans and advances to customers 515,287 606,874 1,084,516 1,552,497 Securities 844,912 808,731 746,136 1,023,582 Fixed assets 18,800 28,867 35,888 36,693 Other assets 150,296 223,442 419,523 518,543 Liabilities 1,631,104 2,378,449 2,833,752 3,411,372 Deposits and borrowings from credit institutions 791,392 1,031,550 781,969 683,670 Deposits from customers 650,440 1,231,879 1,984,669 2,669,799 Valuable papers issued 162,929 48,243 14 14 Other borrowed and entrusted funds 2,113 0 188 859 Other liabilities 24,230 66,777 66,912 57,031 Owners equity 216,810 316,593 354,859 343,621 Chartered capital 192,795 288,554 310,159 310,159 Share premium 3,345 3,041 3,041 3,041 Reserves & retained profit 20,670 24,999 41,659 27,743 Source: LienVietPostBank s 2008 Q2.2013 financial reports audited by Deloitte 16 LienVietPostBankProfile
FINANCIAL OVERVIEW INCOME STATEMENT 2010 2011 2012 Q2.2013 Interest and similar income 131,471 249,328 304,450 140,054 Interest and similar expenses (66,818) (150,519) (186,642) (93,081) Net interest income 64,652 98,809 117,808 46,973 Net fee and commission income 1,729 747 685 865 Commission paid to VNPost (2,689) (7,610) (5,051) Net gain from dealing in foreign currencies 2,641 4,945 1,524 (47) Net gain from trading of securities (*) 0 0 0 148 Net gain from investment securities 898 (1,104) (682) (396) Operating expense (26,998) (45,132) (49,763) (24,191) Salaries and related expenses (8,827) (17,423) (18,210) (10,215) Rental & depreciation expenses (5,282) (9,554) (9,755) (6,923) Other operating expenses (12,888) (18,154) (21,798) (7,053) Allowance and provision expenses (3,064) (3,601) (14,738) (6,047) Other income 211 192 (762) (891) Profit before tax 40,070 52,141 46,461 11,363 Income tax expenses (4,014) (5,233) (4,801) (1,648) Net profit after tax 36,056 46,908 41,660 9,716 ROA 2.61% 2.14% 1.89% 0.75% ROE 11.21% 18.26% 16.55% 7.45% NPL 0.42% 2.14% 2.71% 2.77% (*) Mostly included provision for trading securities Source: LienVietPostBank s 2008 Q2.2013 financial reports audited by Deloitte LienVietPostBankProfile 17
LIENVIETPOSTBANK COMPETITIVE LANDSCAPE
ASSETS & EQUITY (31/12/2012) Total Assets Equity CTG BIDV VCB TCB ACB EIB STB SHB VPBank LPB VIB HDBank Bắc Á Ocean Bank OCB Bản Việt Nam Á Bảo Việt VID VCB CTG BIDV STB TCB ACB EIB SHB VIB LPB VPBank HDBank Ocean Bank OCB Nam Á Bản Việt Bắc Á Bảo Việt VID USD million Lào Việt USD million 5,000 10,000 15,000 20,000 25,000 500 1,000 1,500 2,000 LienVietPostBankProfile 19
ROAE & ROAA (31/12/ 2012) ROAA 2.00% 1.50% 1.00% 0.50% 0.00% 25% 20% 15% 10% ROAE 5% 0% Source: Vietnam commercial banks s audited financial reports 2012 20 LienVietPostBankProfile
Network 31/12/2012 Transaction points 1,200 1,000 800 600 400 200 0 Source: Commercial banks websites LienVietPostBankProfile 21
Contact name Ms. Nguyen Thi Thanh Son Deputy CEO Head of International Relations and Global Capital Markets Email: sonntt@lienvietpostbank.com.vn www.lienvietpostbank.com.vn