BIDV Review 05

A Newsletter of Bank for Investment and Development of Vietnam JSC

BMF & BIC Rep Office in Myanmar

Bold new strides

The AEC

Opportunities and challenges for Vietnamese enterprises

VIETNAM BANKING SECTOR Positive movements

Issue No. 5

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Jun 2015

EXECUTIVE PRODUCER QUACH HUNG HIEP Bank for Investment and Development of Vietnam JSC

Senior Executive Vice President EDITORIAL BOARD BRANDING AND PUBLIC RELATIONS TRANSLATORS NGUYEN TRAN TRANG TRINH HEAD OFFICE

18th Floor, BIDV Tower, 35 Hang Voi str., Hoan Kiem dist., Hanoi, Vietnam Tel: (+84) 4 22200484 Fax: (+84) 4 22225316 Email: bidvreview@bidv.com.vn License No. 14/GP-XBBT dated 11 February 2015 by the Ministry of Information and Communications Printed at Vietnam Book Printing Joint Stock Company

Editor’s Letter

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Dear readers, une has come and BIDV has been busy with many international investments and activities in foreign countries. BIDV was honored to receive Vietnamese State President Truong Tran Sang, Prime Minister Nguyen Tan Dung and Permanent Member of the Party Center Committee’s Secretariat Le Hong Anh to its presences in Myanmar, Laos and Cambodia.

BIDV marked a new footprint in Myanmar market with the establishment of the BIDV Myanmar Finance Company Limited (BMF) and the representative office of BIDV Insurance Corporation (BIC) in Yangon, Myanmar. This lays a solid foundation for BIDV to have further steps forward in the financial-banking market in Myanmar.

The Association of Vietnamese Investors in Myanmar (AVIM) with BIDV being the chair and Hoang Anh Gia Lai (HAGL) Group an active member reported to the leaders of the two countries on the completion of phase 1 of the Hoang Anh Gia Lai Myanmar Center in Yangon. With positive achievements gained, AVIM demonstrated its key role in implementing the joint statement made by Vietnam and Myanmar.

In Laos, BIDV and HAGL joined efforts to fund the restoration of the Watthat Temple in Attapeu, Laos. In addition, BIDV also handed over IT development program to the Lao government.

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In Cambodia, BIDV’s commercial presences were honored to receive Mr. Le Hong Anh, Vietnam’s Politburo member, Permanent Member of the Party Center Committee’s Secretariat in June. BIDC, a prominent member among BIDV’s commercial presences leveraged its strength to operate efficiently, gain trust and contribute to the business and investment promotion in Cambodia.

To welcome the introduction of the ASEAN Economic Community (AEC) at the end of this year, BIDV held an international conference this month on the opportunities and challenges to Vietnamese enterprises. It showed BIDV’s readiness for integration as well as willing support for other Vietnamese businesses in the integration process.

June also marks the end of the second quarter with key macro-economic highlights such as strongly recovered GDP growth, controlled inflation and increased FDI disbursement. Especially banking sector continued to report positive results, contributing to the macro-economic stability.

Within June’s BIDV Review, readers can find information on all of BIDV’s various products and services, as well as on other credit agreements to be signed.

We hope that you can find interesting and meaningful information to help you make the best investment and product choices.

contents

14. BIDV and HAGL fund monument restoration in Laos

international investment 4. AVIM leads cooperative development

15. BIDV upgrades Lao IT 16. Cambodia cooperation reaches new heights

6. AVIM reinforces bileteral investment 8. HAGL project symbolizes cooperation

BIDV HIGHLIGHTS 18. BIDV aids healthcare finance 10. Bold new strides 12. Preparation for investment expansion

20. IT evolution 22. BIDV-MIS offers 360o view 23. The uptrend of retail banking 24. Sights set on SMEs

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contents

26. BIC named among most performing 27. Green credit to private sector

PRODUCTS & SERVICES 40. Auto market continues to rise

MARKET MOVEMENTS 28. BIDV hosts AEC conference

42. Remittance flows crest 43. Product news 46. The value of active listening

30. Readiness for the AEC 32. EEU’s door opened to Vietnam’s farm produce

LIFESTYLE 48. The marble mountain

34. Banking sector highlights 36. Credit on the rise 37. World Bank’s positive outlook on EAP

CSR 50. Swimming foundation makes waves

38. Banking stocks rally

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international investment

Phan Anh

AVIM leads cooperative development Six years after the Joint Statement between Vietnamese Prime Minister Nguyen Tan Dung and Myanmar President Thein Sein was implemented, economic cooperation between Vietnam and Myanmar has met significant progress. Contributing to this result is the effort of the Association of Vietnamese investors in Myanmar (AVIM) led by BIDV as the chairman.

An active AVIM Vietnam and Myanmar traditionally have cooperative relations and have had official diplomatic relations since 1975. However, prior to 2010, economic cooperation between the countries was limited, and did not reach the potential and desire of the two governments. That is, until the breakthrough of the Joint Statement made in 2010. The statement focuses on 12 priority areas of economic cooperation, including investment, finance, banking and harkened a new era of relations between the two countries.

Yangon Street

In order to promote the economic ties made in the statement, BIDV was entrusted with establishing the Association of Vietnamese Investors in Myanmar (AVIM). Now, after five years of operation, with the guidance of BIDV and participation of members such as HAGL and Viettel, AVIM has continued to grow, attracting almost 100 members including many of the largest enterprises in Vietnam.

connecting, and guiding members in achieving the vision held by the two nation’s leaders in investment promotion. AVIM collaborated closely with relevant Vietnamese and Myanmar ministries to support enterprises in investment, trade, and tourism in Myanmar. AVIM continually made effort to encourage prestigious and healthy businesses to invest in Myanmar to improve their cooperation.

With concerted effort, the association has played an important role in

2014 was a year of collaboration between AVIM and local authorities

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international investment

Ribbon-cutting ceremony on handover of phase 1 of HAGL Myanmar Center in Yangon

in organizing many important events such as the meeting between Prime Minister Nguyen Tan Dung and Vietnamese enterprises investing in Myanmar, the working visit of the Chairman of the National Assembly of Myanmar with BIDV and AVIM, and many other significant meetings with the goal of furthering the economic ties between the two nations.

Economic cooperation highlights With support from the two governments, ministries, related agencies and AVIM, investment and trade relations between the two nations have developed strongly. In terms of investment, the period from the end of 2009, until May 5 this year saw 73 businesses which were licensed to do business in Myanmar, all operating in important sectors such as industry, trade, tourism, and telecommunications.

There are eight projects in particular with total FDI of USD688.5 million, making Vietnam the 8th largest foreign investor in Myanmar. The number of such projects increased 4-fold and the value of the projects increased 30-fold since 2009. In the first five months of 2015, six enterprises were allowed to open company branches in Myanmar which resulted in an additional registered capital of USD10.2 million From 2010 to 2014 the bilateral trade between the countries grew an average of 31 percent per annum, and in 2014, the total import-export turnover between them reached USD480.5 million, a 36.4 percent increase year on year. During this period, Vietnam imported USD134.7 million worth of goods, up 9 percent year on year, and mainly consisting of wood and wood products (USD46.3 million), fruits and vegetables (USD57.9 million) and aquaculture products (USD5 million).

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Exports from Vietnam to Myanmar also accelerated to USD345.8 million, up 51.7 percent year on year, and mainly including steel and metal products (USD102.7 million), machinery and equipment (USD30.9 million) and plastics (USD15.8 million USD). To put it all in perspective, the first five months of this saw two-way trading reach USD183.6 million.

“AVIM should continue supporting Vietnamese investors in Myanmar, especially in the 12 priority areas mentioned by the two countries in the Joint Statement. The association should also coordinate with the related ministries of the two countries to point out and propose solutions to obstacles in the implementation of the Vietnam – Myanmar bilateral cooperation and agreement” said Vietnamese Prime Minister Nguyen Tan Dung.

international investment

Q u ang Die u

AVIM reinforces bilateral investment Successful trade and investment between Vietnam and Myanmar throughout 2014 has confirmed the active role of the Association of Vietnamese Investors in Myanmar (AVIM) in promoting investment between the two countries. In 2015, the association will continue to support Vietnamese enterprises and foster friendly relationships between the two countries.

Shwedagon Pagoda from afar in Yangon, Myanmar

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Goals set 2015 promises to be a year of remarkable events and activities in Myanmar in general, and for VietnamMyanmar relations in particular.

Specifically, in 2015, Myanmar will hold elections for a new national assembly.

This is a very important event as the election results will determine Myanmar's developmental direction and future relations with Vietnam.

Indeed, 2015 is the year Myanmar celebrated the 40th anniversary of Vietnam-Myanmar diplomatic relations (1975 – 2015). This is also an important year for AVIM and BIDV as it marks the 5th year since BIDV joined Myanmar’s market and the 5th anniversary of AVIM. AVIM’s commission is to continue supporting Vietnamese enterprises in Myanmar as well as to promote trade and investment, supporting Vietnam in achieving its commercial targets in the country.

international investment

A window of Myanmar

In 2015, Vietnam intends to be one of the top 5 countries investing in Myanmar. The registered FDI from Vietnam to Myanmar is expected to reach USD1.2-1.5 billion in 2015 (in which the disbursed capital is USD400 -500 million) and to USD2 billion in 2020. The countries’ bilateral importexport is set to hit USD650-700 million in 2015 and USD1.5-1.7 billion in 2020.

The number of Vietnamese tourists to Myanmar is also expected to surge by 30 percent annually to 35,000.

Action plan Recognizing the direction of Myanmar, AVIM will continue to connect Vietnamese enterprises with Myanmar’s partners, and to link the relevant agencies of the two countries to promote trade, investment and tourism.

Specifically, AVIM will coordinate with the relevant authorities of both countries to review and assess project

implementation in 12 priority sectors (which are stated in a Joint Statement of the two governments). Then, the association will produce reports on the real investment situation in Myanmar to solve problems and facilitate further investment.

Pursuant to Vietnam's socio-economic development strategy and Myanmar’s innovative and open direction, the association will continue to evaluate potential investment areas whilst creating a roadmap to support businesses more effectively. The association’s focus is to promote major industries including banking, aviation, telecommunications, oil, and gas. Attention will also be given to other key areas such as agriculture, pharmaceuticals, property, industrial crops, and aquaculture.

The association will continue to watch movements within the market and collect information. It will closely collaborate with the Vietnamese

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Embassy in Myanmar to support potential projects, deliver early warnings about unfeasible or risky investments, and to maintain the prestige and image of Vietnamese investors in Myanmar.

In addition, the association will inform Vietnamese enterprises regarding changes in Myanmar’s laws and policies, and help them to grasp investment opportunities.

AVIM is expected to hold a number of events, workshops, conferences, and seminars concerning investment. The program has already begun, and the inauguration of projects licensed in Myanmar was attended by leaders of the two countries in 2014.

Finally, AVIM will call for the participation of Vietnamese enterprises in social welfare programs so that the image of AVIM and Vietnamese businesses will continue to improve, as a force for positive changes in Myanmar.

international investment

co ng chung

HAGL

project symbolizes cooperation

After 2 years of construction, Hoang Anh Gia Lai Myanmar Center has finished Phase 1 and put a number of the project’s facilities into operation, meeting increasing demands from enterprises and Yangon people. The project is seen as a symbol of Vietnam – Myanmar economic cooperation, and a testament to the success of the Association of Vietnamese Investors in Myanmar (AVIM).

The largest property project in terms of foreign investment HAGL Myanmar Center, developed

by Hoang Anh Gia Lai Group (HAGL) received capital in part from BIDV, Eximbank, and Sacombank. This BOT project has a 70 year term and is the largest property project in the golden area of Yangon in terms of foreign investment with a total investment value of USD440 million, and a total area of 73.358 square meters.

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international investment

Hoang Anh Gia Lai Myanmar Center in Yangon, Myanmar

The project’s phase 1 was completed when several buildings were put into operation including a commercial center, two Class A office blocks totaling 161,000 square meters, and a Melia Yangon five star hotel comprised of 23 floors and 429 deluxe rooms. According to Doan Nguyen Duc, Chairman of HAGL, “the project will help increase the high-class property supply in Yangon, meeting the increasing demand of international enterprises doing business in Myanmar”.

The second phase is set to begin this month and last until February, 2017.

During this time, the developer will construct four 28 floor buildings with a total of 1,800 apartments and office spaces for rent, an impressive 63,800 square meters. Completion of phase two will yield a new architectural landmark for Yangon, and the cultural-

economic center will be an incredible symbol of cooperation between Vietnam and Myanmar.

Exciting Transaction Office rent is in high demand according to HAGL’s representative.

Supporting the point, the company recently signed contracts to rent 70 percent of the total area in 2 office blocks with an average rent of USD67 per square meter a month.

BIDV, Petronas (Malaysia), the Australian Embassy and Thai Airways (Thailand National Airlines) are all major customers of HAGL. The company has also signed to rent almost all the areas of their commercial center with the average fee of USD45-50/m2 per month.

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Regarding the five star hotel, HAGL signed a hotel management contract with Melia Group, making the hotel one of the Melia Group’s 350 five-star hotels across the world. The hotel, officially named Melia Yangon, is located in a convenient area with 429 international standard rooms to meet the demands of international tourists to Myanmar.

HAGL Myanmar Ltd. Co also just inaugurated the Lake Suites apartments for VIP customer. The ceremony attracted nearly 200 domestic and international individual and corporate customers in Myanmar.

The apartment market in this country has a lot of potential with 60 million residents. The apartment rent in Yangon is fluctuating between USD2,300 and USD12,500 per apartment per month.

international investment

Chu ng Anh

Bold new strides After 5 years operating in Myanmar, BIDV has taken the next step by establishing BIDV Myanmar Finance Company Limited (BMF) and the representative office of BIDV Insurance Corporation (BIC). This milestone further illustrates how BIDV has become an impressive and popular brand in this burgeoning market.

BIDV Myanmar Finance Company Limited (BMF) is owned by BIDV, the leading and longest-established bank in Vietnam, and Mahar Bawaga, a Myanmar’s consumer microfinance company. BMF has initial charter capital of USD5 million, 70 percent of which is contributed by the Vietnamese partner. BIDV also provides technical support, human resources, technology, and experience in lending and retail banking development.

BMF was founded with a mission to contribute to the improvement of living standards for the people of Myanmar through concessional loans, and to provide advisory services to the people on production techniques and financial management. Initially, BMF will focus on providing microcredit to a large community of people in Myanmar, contributing to poverty reduction and the development of local industries.

Mr. Phan Duc Tu, BIDV CEO (L) and Mr. U Aung Myint, Managing Director of Global Treasure Bank signed MOU on cooperation in Yangon, Myanmar

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n June 23, 2015, the Prime Minister of Vietnam Nguyen Tan Dung; the Vice President of Myanmar Dr. Sai Mauk Kham; high-ranking delegations of the Socialist Republic of Vietnam and the Republic of the Union of Myanmar; and representatives from around 400 businesses of the two countries attended important economic events of Vietnamese businesses in Yangon, Myanmar. These included the completion of phase 1 of HAGL

Myanmar Center; the inauguration of BIDV Myanmar Finance Company Limited (BMF) and the Representative Office of BIDV Insurance Corporation (BIC) in Myanmar; the signing of a memorandum of understanding on cooperation between BIDV and Global Treasure Bank; and the signing of a premise lease contracts between HAGL and partners.

BMF - a new step for BIDV in Myanmar’s market

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On the same day, BIDV Insurance Corporation (BIC) opened its representative office in Myanmar, expanding to seek opportunities for cooperation with local insurers and involvement in Myanmar's insurance market.

With the introduction of two more commercial presences in Myanmar, BIDV is ready to provide a full range of financial, banking and insurance packages, demonstrating its commitment to doing long-term business in Myanmar’s market.

international investment

Vietnam's PM Nguyen Tan Dung (L) and Myanmar's Vice President Sai Mauk Kham opened the banners of BMF and BIC Rep Office in Yangon, Myanmar

BIDV and Global Treasure Bank - extensive cooperation between Vietnam’s and Myanmar’s banking systems To build a sustainable partnership in Myanmar, BIDV has proactively established channels to communicate regularly with its financial institutions, including the signing of a comprehensive cooperation agreement with Global Treasure Bank - one of the five largest private banks in Myanmar.

Under the agreement, the two parties will cooperate on the exchange of information, the provision of banking services and products, the introduction of customers, and on financing in the areas of plantation and livestock, aquaculture, professional support, and information technology.

Mr. Tran Bac Ha, Chairman of BIDV and Chairman of the Association of Vietnamese Investors in Myanmar

asserted: “Among the Vietnamese enterprises investing in Myanmar, Hoang Anh Gia Lai and BIDV are the first to invest in Myanmar in a determined and professional manner.

I am delighted and proud that the serious and professional investment

by HAGL and BIDV, in combination with the interest and support of the governments and ministries of the two countries, has been translated into good results. The AVIM is committed to continually support and promote the investment and cooperation of Vietnamese enterprises in Myanmar in order to help promote economic ties between the two countries. As chairman of AVIM, we have made a commitment to the governments and ministries of both countries that we will continue to promote the activities of the association to contribute to the promotion of economic relations between the two nations”.

Addressing the event, the Prime

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Minister of Vietnam Nguyen Tan Dung lauded the efforts and performance of AVIM, BIDV, HAGL and the Vietnamese business community in Myanmar.

The Prime Minister stressed: “The achievements of AVIM, BIDV, and HAGL not only contribute to promoting and supporting Vietnamese enterprises doing business in Myanmar, but also significantly aid the socioeconomic development of Myanmar, strengthening the good relations between the two countries”.

The Prime Minister willed AVIM, BIDV, HAGL and the Vietnamese business community in Myanmar to continue investing and doing business efficiently. In particular, for licensed projects, he implored businesses to deliver their commitments and ensure progress and quality. He also requested businesses to continue participating in social security activities, contributing to the improvement of living standards for the people of Myanmar.

international investment

Tra ng Tr inh

Preparation for investment expansion As an active investor in overseas market, BIDV already realized the potential in Myanmar- “the last golden land of Asia�. In 2010, the bank opened a representative office there to prepare for a further step into the finance, banking, and insurance markets.

An essential preparation After the joint statement between the governments of Vietnam and Myanmar on 12 key areas of economic cooperation, including the financial and banking sectors, BIDV established its representative office in Myanmar in April 2010 with an eye to studying the business environment and banking market in Myanmar. This would allow BIDV to seek investment opportunities, establish relationships with local financial institutions, and look forward to opening a bank in Myanmar once permitted by local law.

Currently, the representative office in Myanmar is a channel for BIDV to exchange information regularly with financial institutions in Myanmar.

Also, BIDV has become a reliable

source of information and advice to Vietnamese enterprises doing business in Myanmar.

Besides the representative office, the bank established the Association of Vietnamese Investors in Myanmar (AVIM) in March 2010 in order to help shape, promote and support Vietnamese investors in Myanmar.

BIDV acts as the chairman of the association.

AVIM has actively contributed to the promotion of investment from

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Vietnamese businesses in Myanmar via supporting, and introducing partners to Vietnamese enterprises to seek trade and investment opportunities in Myanmar, coordinating with the Vietnamese Embassy in Myanmar to arrange meetings with ministries and agencies of Myanmar, and many other services. BIDV Insurance Corporation (BIC) also established a representative office in Myanmar to promote cooperation with local insurance companies as well with a view toward participating in Myanmar’s insurance market.

international investment

BIDV Myanmar Finance Co., Ltd in Yangon, Myanmar

The fruitful achievements With contributions from almost 80 AVIM members, Vietnam ranks 8th among foreign investors in Myanmar with a total licensed capital worth USD688 million. Bilateral trade reached USD480 million in 2014, up 36 percent year-on-year and enjoyed an average growth rate of nearly 40 percent annually between 2010 and 2014 with BIDV and AVIM providing reliable information and consultancy all along the way. Furthermore, the bank has just inaugurated BIDV Myanmar Finance Company Limited(BMF), located in Yangon, Myanmar.

BMF was licensed in December 2014 and began operations in June this year. It’s currently a joint venture between BIDV and Myanmar’s Bagawa Company. BMF operates in the microfinance sector with a mission to improve the living standards of Myanmar people via providing concessional loans.

In addition, BIDV is actively preparing for the establishment of a branch in Myanmar as early as 2015 with officers already sent to Myanmar to work and attend official Burmese language courses as well as prepare customer base, infrastructure, and IT systems to ensure the new branch will operate stably and efficiently.

The establishment of BIDV branch in Myanmar is important in supporting Vietnam’s economic activities, investment, trade, and tourism through trade financing, banking services, and payment systems. As a result, the branch will help promote Vietnam’s investment in Myanmar in accordance with the Vietnamese government’s directives. At the same time, with experience in credit, international investment, and being the leading commercial bank in Vietnam, BIDV has the ability to effectively support the branch’s operation in Myanmar, especially in the payment process given there are still embargoes

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levied against the country.

In 2014, Myanmar licensed only nine banks to establish branches in Myanmar, including Japan, Singapore, China, and Australia, among others.

Currently, both Vietnam and Myanmar are making their best efforts to support the establishment of BIDV branch in Myanmar as soon as 2015.

After 58 years of development, BIDV is the largest-scale commercial bank in Vietnam and is among the top 30 biggest banks in Southeast Asia by assets.The bank is also a member of the top 1000 best banks in the world as polled by The Banker magazine. To date BIDV’s total assets account for more than USD32.2 billion, its owners’ equity has increased to nearly USD1.7 billion and it has a network of 980 transaction points nationwide (182 branches and 798 transaction offices) with a total workforce of 24,000 employees.

international investment

Ribbon-cutting on the completion of phase 1 of Watthat temple restoration project in Attapeu, Laos

BIDV and HAGL fund monument restoration in Laos

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n May 30, 2015, during the visit of Vietnamese President Truong Tan Sang, the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) and Hoang Anh Gia Lai group (HAGL) celebrated the completion of phase 1 of the Watthat temple restoration project in Attapeu, Laos. BIDV and HAGL co-funded USD2.1 million for the restoration of the monument.

Also attending the event were Mr. Choummaly Sayasone - Party Chief and President of the Lao PDR, Mr. Truong Tan Sang – Politburo member, and government leaders, ministries, and agencies of the two countries.

Additional attendees included Attapeu leaders, Vietnamese business interests, and investors in Laos.

The Watthat temple is best known as the place of worship of King Xayxettha,

regarded as one of the greatest leaders in the history of Laos. He is remembered as a wise king and a great leader who left behind not only booming development and prosperity in Laos, but also spiritual and cultural legacies that still exist to this day.

Addressing the ceremony, BIDV CEO Mr. Phan Duc Tu affirmed “The completion of phase 1 of the Watthat temple project is of great significance to Attapeu province as well as the people of Laos, demonstrating the responsibility of the Vietnamese business community in Laos in general, and of BIDV and HAGL in particular for preserving the cultural values of the Lao people, effectively contributing to the socio-economic development of Laos and special relations between the two countries.”

As the first Vietnamese bank operating

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in Laos, over the past 16 years BIDV has successfully played its role as a bridge connecting the two economies.

During this time it has become a familiar brand to the Laotian people with three commercial presences in Laos, including Lao-Viet Joint Venture Bank (LaoVietBank), Lao-Viet Insurance Joint Venture Company (LVI) and a BIDV Representative Office.

Hoang Anh Gia Lai Group (HOSE: HAG) is a diversified company headquartered in Pleiku, central Vietnam. The group was Vietnam's largest property developer in 2010 and the second largest in 2011 (behind Vingroup). It has also grown significantly outside of Vietnam, with investments of around USD1 billion in Laos, hundreds of millions of US dollars in Myanmar, USD100 million in Cambodia and tens of millions of dollars in Thailand.

international investment

Q u y nh Chi

BIDV upgrades Lao IT On June 18, in Vientiane, Laos, BIDV held a ceremony to hand over an IT development program to the Lao Government Office.

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he program includes training for IT staff, IT equipment, and an internal email system for the office. The program started in February this year and was completed in June with total sponsored funds of USD83,000.

Mr. Tran Bac Ha, Chairman of BIDV, said the project was of great importance to the Lao government, improving labor productivity whilst reducing time and costs in processing administrative documents. Most importantly, the safety and security of vital information is now ensured, and BIDV will continue cooperating with the Lao government office to ensure the smooth operation of the system.

Based on the recommendations of the Lao government, BIDV may provide IT support for phase 2 of the project in the near future. Their sponsorship would include IT training sessions for Laotian officials in Vietnam, construction of an e-governance system and e-government portal, and an online management system between

BIDV provides IT support to the Lao government

the main and local offices.

Mr. Sonexay Siphandone, minister and head of the government's office, highly appreciated the contribution of BIDV to the modernization of the office’s administration system. Mr. Siphandone expects the company to assist the Lao government in other modernization projects, raising the quality of IT applications across the board.

On this occasion, the Prime Minister of Laos awarded certificates of merit to BIDV in recognition and appreciation

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of the bank’s active and effective support of his government.

As the first Vietnamese bank operating in Laos, after 16 years of operation BIDV has become a familiar brand to the Laotian people through Lao-Viet Joint Venture Bank (LaoVietBank), LaoViet Insurance Joint Venture Company (LVI) and BIDV’s representative office in Laos. During this time, BIDV has successfully performed its role as a bridge between the two economies, fostering friendly relations between the two nations.

international investment

Phan Anh

Cambodia cooperation reaches new heights On June 9, 2015, during an official visit to the Kingdom of Cambodia, a delegation headed by General Le Hong Anh, Politburo member and Permanent Member of the Party Central Committee's Secretariat, paid visits to the Bank for the Investment and Development of Cambodia Plc. (BIDC), to BIDV’s presences in Cambodia, and to the Association of Vietnamese Investors in Cambodia (AVIC).

amount of nearly USD6 million.

BIDC’s and BIDV’s CSR activities in Cambodia have helped improve the living standard of both Cambodian and Vietnamese people, and the governments of both countries have expressed appreciation for the work done by the Vietnamese business community in Cambodia.

Strong impressions

BIDC – the firm bridge

Mr. Le Dao Nguyen, BIDV Board member and Chairman of BIDC, said that after nearly six years in Cambodia, BIDV’s commercial presences have been operating well, building trust, and making great contributions to the promotion of investment projects and the business activities of Vietnam in Cambodia.

BIDC gained its position in the banking and financial markets of Cambodia with efficient and sustainable growth.

At present, the total assets of BIDC have reached nearly USD630 million, more than a 3-fold increase against 2009, and account for 6 percent of the total assets in Cambodia’s banking system. Outstanding loans stand at nearly USD500 million, a five-fold increase compared to 2009, and accounting for 7 percent of Cambodia’s credit market. Since its establishment, the accumulated profit before tax

has reached over USD30 million. In addition, BIDC was awarded the title of Most Outstanding and Promising Bank in Cambodia.

BIDC has played a key role within the Vietnamese business community in Cambodia, connecting the two markets and helping enhance the image and prestige of Vietnamese businesses.

BIDC is a focal point when arranging and directly financing key investment projects for Vietnamese businesses, especially in the fields of agriculture, public health, and rubber tree plantation. Total credit lines provided

by BIDC and BIDV to Vietnamese projects in Cambodia reached more than USD160 million, contributing to Vietnam’s position as the 5th largest FDI contributor to Cambodia.

In addition to business activities, BIDC has actively collaborated with BIDV’s commercial presences to implement social security initiatives with total

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Speaking at the meeting, Mr. Le Hong Anh lauded the leaders and staff of BIDC for their efforts and business performance after almost 6 years of progress, claiming that BIDC epitomizes effective cooperation between Vietnam and Cambodia.

Mr. Le Hong Anh stressed: “BIDC not only contributes positively to Vietnamese enterprises in their investment, production, and business in Cambodia, but also performs CSR activities well, contributing to the socio-economic development of Cambodia, strengthening the good relations, traditional friendship, and comprehensive cooperation between Vietnam and Cambodia, and gaining the trust and support of leaders of the two countries”.

Looking forward, Mr. Le Hong Anh willed BIDC to continue doing business efficiently, performing well as a bridge

international investment

Mr. Le Hong Anh, Politburo member and Permanent Member of the Party Central Committee's Secretariat (front, third, L-R) and BIDC team

to help Vietnamese and Cambodian businesses implement projects effectively.

Regarding AVIC’s operations, Mr. Le Hong Anh also asked Vietnamese enterprises doing business in Cambodia to respect and strictly abide by the laws of the host country.

For licensed projects, businesses must deliver their commitments, ensuring progress and quality, and avoiding pending projects. Mr. Le Hong Anh also noted that the leaders of the two countries have been directing relevant agencies to remove difficulties and obstacles in order to facilitate enterprises in their business operations. He requested that businesses continue participating in social security activities in order to improve living standards for the Cambodian people.

Mr. Le Hong Anh also paid a visit to a Community house of VietnameseCambodian people in Siem Riep province (invested in by BIDV). He met and gave gifts to the VietnameseCambodian people, teachers, and students studying at the Community house.

FDI on the rise

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he Association of Vietnamese Investors in Cambodia (AVIC), whose key members include Vietnam’s major corporations and groups, has been deemed effective in its role as a bridge to connect the business communities of the two countries, contributing positively to promoting investment, trade, and tourism between Vietnam and Cambodia.

Regarding investment, in the first five months of 2015, there were five licensed Vietnamese projects with a total registered FDI of USD44.3 million.

This brings the total number of Vietnam’s investment projects to 172, with total FDI reaching USD3.613 billion. To date, more than 50 Vietnamese projects, including many in key areas in Cambodia, were completed and put into operation, contributing significantly towards socio-economic development and job creation for the Cambodian people.

In trade, total export and import turnover between Vietnam and Cambodia reached USD3.31 billion in 2014. Vietnam ranked 3rd out of 140 countries and territories that have trade relations with Cambodia. In the first five months of 2015, the total import and export turnovers of the two countries reached USD1.24 billion, of which exports from Vietnam to Cambodia made up USD807.7 million and exports from Cambodia to Vietnam 427.3 million.

For tourism, in 2014 two-way arrivals reached 1,250,000, and the number of tourists travelling from Vietnam to Cambodia totalled 840,000. In the first quarter of this year the number of Vietnamese tourists visiting Cambodia reached 225,600 visits, up 18.9 percent over the same period in 2014.

In 2015, AVIC predicted that Vietnam’s FDI in Cambodia will reach USD44.2 billion with a disbursement of over USD2.8 billion. It forecast a bilateral import and export turnover of over 50 percent, reaching USD5 billion, and a tourism growth of 30 percent annually, estimated at 1.6 million visits.

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bidv highlights

t rinh viet

Mr. Phan Duc Tu, CEO of BIDV (L) and Mr. Pham Le Tuan, Deputy Minister of Health sign agreement

BIDV aids healthcare finance In Hanoi on June 15, 2015, BIDV launched a credit program for central and local hospitals and signed a cooperation agreement with Vietnam’s Ministry of Health.

Urgent needs Although the health sector has recently increased numbers of beds, diversified outpatient treatment types, deployed new service models, and improved administrative procedures, many hospitals are still overloaded with patients.

According to a report by the Vietnamese Ministry of Health, the number of hospital beds per one thousand people is one of the lowest in the ASEAN region, at 28 beds despite

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WHO recommendations of 39 beds per thousand. This rate is especially worrying when contrasted with more developed nations such as South Korea (80 beds) and Japan (140 beds), indicating that hospitals in Vietnam, and especially central ones, are facing a serious hospital bed crisis.

Hospital overload can be attributed to poor infrastructure, limited capacity and services, as well as people’s preference for large central hospitals.

According to Minister of Health Nguyen Thi Kim Tien, Vietnam does

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not have any hospital on par with the average regional level.

Significant actions Given the urgency in reducing hospital overload, BIDV, as Vietnam’s leading primarily state-run financial institution, proactively worked with the Ministry of Health to design a credit program which enabled the health sector to upgrade and buy new medical equipment. Priority projects include: procurement of modern medical equipment/machinery for advanced medical examinations; new investment in, renovation, expansion and modernization of medical facilities and hospitals; and reduction in the hospital bed occupancy rate from the high level of >120 percent at central hospitals in Hanoi and Ho Chi Minh City to below 100 percent.

The credit program began on June 15, 2015, and will end on May 31, 2022.

The program offers a credit limit of USD917.2 million with a preferential interest rate and tenor of up to 20 years. Additionally, BIDV will provide USD9.17 million with a preferential interest rate for the intensive training of doctors in foreign countries.

Mr. Tran Bac Ha, BIDV Chairman, believes that following BIDV’s pioneering move in the health sector, other commercial banks in Vietnam will quickly join to help reduce the hospital overload. It is hoped this will ease difficulties for hospitals and patients, contribute to the improvement of conditions and the upgrade of medical equipment, and support doctors in improving their knowledge and medical skills.

BIDV loans breathe life into local hospitals Following the creation of a credit program for central and local hospitals, BIDV branches have signed agreements with many hospitals in the North and South of Vietnam to deploy the program nationwide.

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pecifically, BIDV Thang Long Branch and the National Hospital of Pediatrics signed a loan worth USD45.9 million to construct the latter’s International Center in Hanoi.

BIDV Tay Ho and Saint Paul Hospital signed an agreement to fund investment projects upgrading medical machines and equipment.

In addition, BIDV Phu Tho branch agreed to arrange funds for the Obstetrical Center project at the General Hospital of Phu Tho Province. The project encompasses 700 patient beds and a total loan of USD45.9 million.

BIDV Tan Binh Branch also signed a credit agreement with Ho Chi Minh City-based Xuyen A General Hospital to invest in infrastructure and facilities.

These agreements are the basis on which to effectively upgrade overloaded hospitals nationwide, providing modern medical equipment and facilities for all who need them.

Speaking at the ceremony, Minister of Health Nguyen Thi Kim Tien said that BIDV’s credit package is of great significance and will immediately help to meet hospital development needs. The Minister appreciated BIDV’s support and attention to the health sector’s workforce, and affirmed that the Ministry of Health will be a solid bridge connecting banks and borrowers.

Credit agreement signing between BIDV and hopitals

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Tra ng Tr inh

IT evolution Information Technology (IT) is a key factor contributing to the success of every bank, including BIDV. After becoming a commercial bank in 1995, BIDV has made steady progress in IT renovation and gradually emerged as a high-tech banking institution.

The beginning – just a few computers In July, 1991, the computerization team in the Statistics - Informatics Division was established with 3 members and 2 Fujikama computers.

These computers were used mainly to support accounting with data importation, and to collect reports.

The distribution of computers was limited to large branches, it was not until 1992 that computers were used to synthesize data and calculate the daily balance at the bank’s Transaction Center 1. The acknowledgement of computer usage was limited, and therefore few people cared about the application of IT in daily operations.

the Society for Worldwide Interbank Financial Telecommunication (SWIFT). Between 1995 and 2000, BIDV automatized almost all banking operations such as accounting, credit, deposits, and international payments through IBM’s automated software development.

2000 was the year that BIDV took part in the Vietnamese securities market as a nominated paying bank, a securities company, and a bank with stock market products. This participation showed that BIDV’s IT system met the stock market’s requirement of a strong IT platform, which had previously been a weakness of BIDV.

Becoming an IT pioneer In 1995, BIDV officially became a commercial bank and invested more of its resources in IT. The bank’s computers were connected to a LAN and, for the first time, accounting activities were conducted immediately within each branch.

Following that, BIDV made further steps into the IT era. With IT support, BIDV became one of the first four Vietnamese banks to join

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Recognizing the increasing importance of IT, BIDV started to focus more on human resources and, in 2011, the IT Center was established. The Center played an important role in implementing the bank system modernization project with support from the World Bank (2003).

Thanks to the project, BIDV became the first bank to successfully launch

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a product which allowed customers’ accounts to be opened at one place and transactions completed elsewhere.

Two years later, BIDV was also the first bank to complete Phase 1 of the World Bank’s modernization project. The success of the project made BIDV’s system centralized and united: customers’ transactions could be conducted 24/7 nationwide and productivity was enhanced exponentially.

The success of the project also changed the bank’s IT base in terms of management as well as the number of new products with IT applications, which expanded over the years and made up an ever-increasing proportion of BIDV’s total products.

One of the greatest successes for BIDV in the 2006-2010 periods was the implementation of a retail banking software system by Silverlake. The

system helped connect thousands of transaction spots and ATM+POS into Corebanking, raising the number of customers to 3.9 million and the number of accounts to 8.8 million. During this time the average online trading volume hit nearly 3 million per day.

The number of servers has reached 1,200, hosting the system’s IT applications and centralized IT management.

It must be noted that before transforming into a commercial bank in 1995, BIDV was a bank providing loans to State projects. Therefore, the development of an IT platform for retail banking played a historical role in BIDV’s retail business.

According to Nguyen Xuan Hoa, Head of BIDV IT Center, BIDV’s payment system is also highly appreciated by domestic and international organizations. BIDV has connected thoroughly with many domestic and global payment systems, connecting with 20 domestic commercial banks, and today all kinds of foreign currencies can be processed through its payment channels.

To this day, BIDV has continued to build and develop IT infrastructure, meeting the demand for more modern IT systems and serving the bank’s business goals. BIDV’s IT system is operating stably and safely with 3-5 million transactions processed per day.

The bank’s members nationwide are connected to WAN and LAN systems.

In the 20 years of investment and development since becoming a commercial bank, the development of BIDV’s IT system reflects over 7,000 days of hard work by its IT team. They have transformed BIDV from a bank with very little knowledge of IT into a modern institution which is a potent symbol of technological improvement.

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t ra n van

BIDV-MIS offers 360o view

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n Hanoi on May 28, 2015, documents for the continued operation of the BIDV-MIS system were officially handed over. Attending the ceremony were Mr. Le Dao Nguyen - board member, Mr. Nguyen Xuan Hoang, Senior Executive Vice President, Mr. Tran Phuong, Senior Executive Vice President and head of the Project Steering Committee, and other relevant representatives.

The management information system (MIS) is a hugely important IT system, providing inputs that help make quality and effective business decisions. Given the growing trend in bank governance, in 2012 BIDV’s IT Center and Management Information System and ALCO Department (MIS. ALCO) studied and proposed a project titled “Developing infrastructure for a centralized statistical reporting system” - (MIS project - phase 1) that kicked off in October 2013. The system includes a data warehouse full of information and special problem

analysis (including 700 indicators and 160 data dimensions divided into 3 key components: strategic planning, deposits-loans, customer analysis, and 105 static reports).

The MIS system gathers customer information from all available BIDV databases to provide a holistic view of customers and products. It enables the organization to adjust, improve, and develop products and services to ensure suitability with the market and increase benefits for the bank and its customers. In particular, reports will be moved from passive form (templates) to proactive form (users decide what information they need) as a prerequisite for building a new data analysis system, including forecasts and in-depth analysis to meet governance needs.

Addressing the event, Mr. Tran Phuong said that the "MIS is a project of great importance given the current business context, focusing on customers,

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using information and data as a basic foundation for the analysis to make management decisions, including corporate governance as well as customer analysis to serve the strategic objectives of BIDV in increasing market share and selling tailor-made products to our customers.”

With the MIS built on an entirely new IT platform, BIDV became the first and only bank in Vietnam to successfully deploy IBM’s synchronous data warehouse - a solution that is highly recognized by the world's leading organizations for its sufficiency and synchronization in accordance with international standards.

“With just one click, a retail banking officer or relationship manager can know how customers are banking with BIDV and what services and products they are not using.” Tran Phuong, Senior Executive Vice President of BIDV.

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Tu e Minh

The uptrend of retail banking Retail banking continued to be a diverse service in Vietnam promising potential opportunities for banks A big cake Vietnam’s banking sector has taken note of the recent boom in retail banking. 90 percent of businesses in Vietnam are either small or medium-sized, thus optimally compatible with the products and services of retail banking. In addition, Vietnam has a population of 90 million people, more than 50 percent of whom are of working age, thus promising opportunities for consumption in large retail markets. Consumption trends have a clear shape, and people have many options for smart consumption with a plethora of personal financial service solutions.

competition from both domestic and foreign banks. Most foreign banks have decades of experience and supply professional services and system securities that many VIP clients seek.

Furthermore, financial companies create additional competition. On the small scale, financial companies have a large advantage given they’re flexible, mobile, and can adapt by making strategic adjustments quickly to fit the needs of target customers.

World leaders in banking such as Citigroup and HSBC realized how retail banking is a key strategy to success. Retail banking can provide high, stable revenue with less risk than wholesale banking. The added facet of diversification comes as a boon of cross-selling products and services to individuals and small businesses.

Banks hope that retail banking will make up a higher portion of their total revenues in the time to come.

Information technology is vital in retail banks’ operations. According to a report by We Are Social (Singapore), Vietnam had about 39.8 million internet subscribers as of early this year, of which 32.4 million were accessing the web via mobile phone.

Clearly this is justification for banks to beef up their high-tech applications to electronic banking services.

Retail banking, with its lucrative nature, makes many new opportunities available, but also poses potential challenges to Vietnam’s commercial banks. In short, there’s strong

Mobile banking – a key channel

Currently, the distribution channels for banks are branches, ATM/POS, and call centers. However, given the advances of technology, distribution will shift to internet banking, mobile banking, and social media.

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BIDV is renowned for its leading IT platforms in Vietnam and is constantly improving the quality of its services, typically the e-banking service they launched in 2012. This step forward in connecting banks and customers has brought customers convenience and helps save time. The bank also launched its 24/7 contact centers and BIDV Social Media Command Center (SMCC) to better listen and respond to customer feedback so as to increase the interaction between the bank and customers. This is BIDV’s strategic move to bring new experiences with friendly and modern retail products and services to customers.

The potential in Vietnam’s retail banking market is huge. However, banks are required to meet management and technology requirements to operate a true retail banking model. When in retail banking, the brand and differentiated service quality will determine a company’s success.

On March 19, 2015 in Singapore, BIDV was named the Best Retail Bank in Vietnam 2015 by The Asian Banker magazine. The award honors outstanding retail banks which rendered great efforts and made achievements in the provision of banking products and services to individual customers, attain positions in banking and financial markets, and have strategies for impressive retail development during the year.

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Sights set on SMEs In June, BIDV established its Small and Medium Enterprise Department (SME Banking).

This marks an important milestone as BIDV joins the ranks of other modern banks around the world.

A bright future Contributing over 40 percent of the country’s GDP and 30 percent of the state budget income whilst also generating jobs for approximately 50 percent of the labor force, small and medium enterprises (SMEs) play a very important role in the Vietnamese economy.

Despite this, SMEs are having difficulties in accessing financial products. Many banks are afraid of the SME market, mainly due to a lack of information and concerns over low incomes, high costs, and big risks. However, according to banking specialist Neil Ramsden, as the banking market share shrinks from increasing financial constraints, banks have started to see the potential in and are on the outlook for SME customers.

First, while the largest businesses and giant economic corporations often have

relationships with many banks, SMEs often cooperate with only 1-2 banks.

Therefore, besides credit products, BIDV can introduce and provide different financial services to these SMEs, raising revenue and contributing to the bank’s sustainable development.

Second, revenue attributed to SMEs might not be high, but the large number of customers (accounting for 90 percent of total businesses nationwide) will bring considerable benefits to BIDV, helping the bank raise non-credit revenue and balance its revenue structure.

Finally, providing products and services to a variety of corporate customers will increase the bank’s branding recognition as well as the prestige of BIDV in the market.

These are the motivations inspiring BIDV to make this bold transition and establish a unit specializing in SMEs, a planned strategy for the bank in the coming time.

Learning lessons from current SME services SME banking is a young and developing segment. To be successful in this business, banks are required to

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construct a specific strategy and fully utilize all advantages. Banks should understand each company’s individual business model and their unique characteristics – they must identify the target segment to gain more revenue based on market opportunities.

In addition, banks should provide more non-credit products and services.

Indeed, loans are not the main factors contributing to a bank’s revenue from this sector, but are considered

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SMEs have a great demand for microfinance products. However, they are too small to use bank products that are aimed at large corporate customers.

tools for attracting and maintaining relationships with customers. Products and services with IT applications, such as e-banking, online cash flow management, online payments, and

e-payrolls - these are the services that offer convenience to customers, reduce short-term costs of the bank, and help bring SMEs and banks closer.

quality acceleration, and making a big impression on BIDV’s wholesale banking development.

With valuable experiences learned from successful banks, BIDV established its SME Banking department in 2015.

The future ahead is promising, but also holds many challenges. However, BIDV strongly believes it has the potential to break into the market, contributing to the bank’s scale and

Currently, there are 700,000 SME enterprises officially registered in the country. However, there are many un-registered enterprises as well as numerous household businesses.

Therefore, this segment has the potential for exponential growth.

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Mi nh Hai

BIC named among most performing

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n June 19, BIDV Insurance Corporation (BIC) was honored as one of the 50 most performing companies in Vietnam in 2015.

Vietnam’s Top 50 Most Performing Companies 2015 is an award that Nhip cau Dau tu magazine has been giving out for four years. Selection of the winner is done through thorough examination of 668 listed companies via international standard specific measures based on criteria such as revenue, profit, return on equity (ROE) and return on capital (ROC) for, on average, 3 consecutive years before the surveyed year so as to evaluate strength and weakness in business scale, management method, and vision of corporate governance.

Mr. Tran Hoai An, CEO of BIC (R) receives the award

The criteria for becoming a listed company are strict. A potential entrant must have seen a value increase of USD22.9 million or higher and is to be determined up to the last fiscal year.

The revenue and profit in the last 3 fiscal years should be from USD9.17 million and USD20 billion per year, and each year must show improvement.

From 2012 to 2014, the economy, and the non-life insurance market in particular, continued to face challenges with an average growth

under 10 percent per year. However, BIC’s income has continued to expand with profit consistently at a high level.

In particular, the direct insurance premium of three previous years achieved an average revenue growth of 21.7 percent, twice higher than the average figure recorded by the non-life insurance market. Meanwhile, profit grew nearly 10 percent per year, while ROE saw a 12.2 percent growth on average.

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Early in 2015, BIC was ranked in the top 50 most excellent growing companies in Vietnam from 2009 to 2014, and near the top of 500 enterprises with the highest growth rate. It was also named in the top 1,000 companies paying the highest taxes in Vietnam during 2012 until 2014 by Vietnam Report. It was further recognized as having the highest leverage ratio of Vietnam’s insurance industry in 2014 by Dien dan Doanh nghiep magazine and the Vietnam Young Entrepreneurs

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Ki m Dung

Danish Ambassador John Nielsen (L) and Le Ngoc Lam, BIDV Senior Executive Vice President signed agreement to support energy efficiency investments in Vietnam

Green credit to private sector

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n June 25, BIDV signed agreement with Embassy of Denmark to support efficiency initiatives in the private sector.

The Embassy also signed with Vietnam Technological and Joint Stock Commercial Bank (Techcombank) and Saigon Commercial Bank (SCB).

The three banks are committed to support small and medium enterprises (SMEs) with loans for energy efficiency investments under support of the Danish Green Investment Facility (GIF).

According to the agreement, SMEs can access loan from the above designated banks whereby they can receive 50 percent financial support via bank guarantee for energy saving investment projects.

A special attribute of this mechanism is the energy savings awarding scheme.

Companies investing in energy solutions can earn rebates from 10 percent up to 30 percent of their total investment cost on achievement of the

total energy savings. Total fund set aside this support is USD6.5 million.

According to Danish Ambassador John Nielsen, rapid economic development and industrialization have made Vietnam under high pressure of energy demand. Vietnam’s energy consumption rate grows by 10 percent reach year, mainly driven by the industrial sector, in which SMEs account for 40 percent.

John expects that Denmark via the GIF will support 100-130 projects before the end of 2016.

According to Le Ngoc Lam, BIDV Senior Executive Vice President, the support is offered to SMEs in three industrial sector including brick, ceramic and food processing. SMEs who apply for energy efficiency technology will be eligible for the program.

What commercial banks are conducting based on the program is in line with the Government’s policies as SMEs

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are the priority sector of Vietnam Government. Moreover, State Bank of Vietnam also encourages the green credit to companies applying new technology for energy saving.

“This is a win-win mechanism. SMEs in this program can be benefit from 50percent guarantee from Danish Embassy and the awards can be used to pay back debts. Commercial banks will apply normal credit mechanism and the lending rate will depend on specific projects/companies,” said Mr. Lam.

An example of an energy efficiency project in GIF’s pipeline is the ceramic producer Son Ha Ceramic Facility in Gia Lam District. By replacing an old coal fired ceramic kiln with a modern LPG one, the company is able to reduce energy consumption by 75 percent and CO2 emissions by almost 85%. At the same time, product quality, style and productivity are improved.

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Phuong Thao & An n hie n

BIDV hosts AEC conference

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ooking ahead to the introduction of the AEC, on June 10, 2015, BIDV held an international conference with the theme “The ASEAN Economic Community (AEC) - opportunities and challenges for Vietnamese enterprises”. The objective was to provide information and raise business awareness of this regional shift.

Over 200 participants from the embassies of ASEAN countries in Vietnam, state regulators, businesses (including BIDV’s corporate customers), financial institutions, institutes, universities and associations attended the conference.

Presentations and speeches at the conference revealed the significant volume of work to be done by businesses as the AEC takes effect.

At the conference, BIDV proposed that financial institutions should support businesses upon AEC integration. The bank offered preferential policies, products and services for Vietnamese enterprises in sectors which are subject to significant impact when the AEC comes into existence, especially textiles,

agriculture, and fisheries.

As a leading financial institution in Vietnam, BIDV has been at the forefront of implementing the policies and guidelines of the government and central bank, and in taking measures to support businesses. Given Vietnam’s profound integration with the global economy, BIDV continues its strong innovation, preparing resources for customers and partners in all sectors, and contributing to the improvement of competitiveness for sustainable development.

A lot of commercial banks from ASEAN countries (Bangkok Bank, UOB, DBS, Maybank, and Public Bank for example) have set up representative offices, branches and joint-ventures in Vietnam.

Not only banks, but also many insurance and securities corporations and firms are expected to enter Vietnam’s market. Likewise, some large Vietnamese banks have opened their representative offices and subsidiaries and branches in other ASEAN countries in an effort to expand investment and trade. Such a trend is expected to rise when the AEC comes into existence.

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Mr. Phan Duc Tu

Chief Executive Officer of BIDV International economic integration is an inevitable trend and expected to have large and profound impact.

Promising economic benefits, integration helps to expand the market, boost trade turnover, and serves as a magnet for FDI inflows. However, Vietnam’s economic and business community will be subject to greater competitive pressure; huge FDI inflows may result in macroeconomic imbalances unless proper regulation is put in place; and certain risks associated with integration may occur, such as HR challenges (like brain drain), trade and investment disputes, and intellectual property issues.

Mr. Jeffrey Pirie

Executive Director at Deloitte Singapore We have analyzed the implications of the AEC for businesses. These included an ever more connected economy for goods in Southeast Asia; a single market in goods integrated into the global supply chain; increasingly distributed marketing & production networks in place of the narrower and more integrated models of the past; and a very strong overall growth in trade volumes.

According to Deloitte’s surveys, Indonesia, Thailand and Vietnam are set to benefit most from the AEC. Vietnamese enterprises will do particularly well in several industries including consumer business, healthcare, manufacturing, real estate, technology, media, and telecommunications.

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Delegates at the conference on ASEAN Economic Community (AEC) - opportunities and challenges for Vietnamese enterprises

Mr. Pham Dinh Doan

Vice Chairman of the Vietnam Retailers Association, Chairman of Phu Thai Group In the ASEAN Economic Community (AEC), there are numerous sector-specific opportunities open to Vietnam in the retail industry, such as the removal of Economic Needs Test (ENT) restrictions, and the opening of retail markets. In fact, the retail industry is being reshaped through the integration of FDI businesses through the rapid spread of new sales models and a greater variety of value added services offered via Vietnam’s retail industry.

Accordingly, Vietnamese retailers should focus their efforts accordingly to accommodate the competition and improve service quality, technology and professionalism, or enter into joint ventures with - or even sell their businesses to, foreigners. The results would be that customers can enjoy greater profit and better products and services.

Dr. Can Van Luc

Senior Executive Vice President of BIDV By the end of 2015 Vietnam is scheduled to open the market and remove restrictions in the banking, insurance, and capital market sectors. Currently, foreign ownership is capped at 30 percent in the banking sector, and 49 percent in the insurance and securities sector. However, according to commitments in liberalization of services, by the end of this year, members of the FTA will have to open all service sectors, allowing at least 70 percent of foreign equity.

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Dr. Vo Tri Thanh

Vice President of Central Institute for Economic Management (CIEM) Stronger integration is expected to yield a boon of positive effects on Vietnam’s economy. For instance, when Vietnam involves in the Trans-Pacific Partnership (TPP), export and Vietnam’s GDP could increase by USD68 billion and USD36 billion respectively, up 28.4 percent and 10.5 percent compared to Vietnam’s projected figures without the TPP, and all as early as 2025. The reasons for this are that many Vietnamese products, such as textiles, footwear, and agricultural products, have competitive advantages.

Accordingly, Vietnam could expand its market for these products as well as enhance exports. Secondly, growing FDI flow will help enhance the country’s business IT base and management skills.

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Q u ang Son

Readiness for the AEC The ASEAN Economic Community (AEC) is planned to establish in late 2015 and strengthen economic ties between ASEAN countries. As the clock ticks closer, Vietnamese enterprises are also preparing for the final step towards a historical integration. However, a proper integration will need the support of financial institutions in order to be successful.

ASEAN market,” the report indicated.

Therefore, Son emphasizes the importance of joint efforts by all stakeholders, from central government officials to local managers and businesses, to elevate Vietnam’s readiness for AEC integration.

Are they ready?

Another survey by Deloitte also revealed a similar result with only 1 in 5 businesses having made plans and/ or changes in anticipation of the AEC.

To analyze the readiness of Vietnamese enterprises, research has been conducted by Vietnam National University (VNU). The research centered on 681 businesses in 5 provinces and the central cities of Hanoi, Haiphong, Ho Chi Minh City, Danang and Can Tho. Amongst these organizations, 146 exported to and 108 imported from ASEAN countries.

The survey showed that only 48.9 percent of businesses knew when the AEC would be established.

Furthermore, 80 percent of Vietnamese enterprises did not know about the AEC Scorecard, just 40 percent knew about the 4 pillars of the AEC, and only 12.78 percent were aware that Vietnam is the AEC’s logistical coordinator.

The readiness among Vietnamese businesses remains low. According to Nguyen Hong Son, Rector of the University of Economics and Business at VNU, the business community’s

understanding of the AEC is limited, and many businesses find themselves passive in the face of upcoming integration.

“The causes of such passiveness and lack of interest among the business community are multiple, including the special features of the ASEAN market, the issues of Vietnam’s economy in the recent period, the ineffective communication about the AEC, and the lack of interest of the businesses in understanding the

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Specifically, 48 percent feel that their awareness of the AEC is somewhat lacking or insufficient. 62 percent feel that the AEC measures to-date have had limited or no impact. A majority of 51 percent feel that the potential impact will be significant, but only 3 percent have analyzed potential impacts in detail. 48 percent haven’t yet engaged stakeholders but are planning to do so, and 47 percent haven’t incorporated the impact into their plans as yet

BIDV ready to support businesses Currently, financial institutions are supporting enterprises in terms of international payment, trade finance, interest rates and exchange rate hedging. They also offer information and advice on areas such as local laws,

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Singapore

customs, practices and markets of the countries in which they have a presence.

Hanoi Bank each have one branch in Laos and one branch in Cambodia

Among enterprises in general, and financial institutions in particular, BIDV is especially ready for AEC integration as the bank already has a long-term history of international investment.

In addition, as the chairman of AVIC, AVIL, and AVIM, BIDV has an overview of these markets as well as opportunities inside them. BIDV is already supporting many enterprises which do business in ASEAN countries such as Hoang Anh Gia Lai and Nam Sao Group.

Currently, BIDV is the Vietnamese bank with the most representative offices and subsidiaries/branches in other ASEAN countries. BIDV now has representative offices in Laos, Myanmar and Cambodia. LaoVietBank has firmly established itself with five branches in Laos, while BIDC, Cambodia Vietnam Insurance Plc, Cambodia Vietnam Securities Plc, and Lao Viet Insurance Company all have a strong presence in the region.

While the competition have few commercial activities in ASEAN countries, Vietcombank has one representative office in Singapore, Vietinbank has one branch in Laos and Sacombank, Military Bank, and Saigon-

BIDV is also developing many products and services in the context of international integration such as credit, treasury management, international payment and trade finance, e-banking, forex, and trade and investment promotion at home and via associations such as AVIC, AVIM, AVIL. BIDV has committed to the continuous improvement of its products and services to support enterprises more effectively. Specifically, the bank will simplify procedures, enhance the quality of service, and reduce the quality gap with leading banks in other

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regions of the world. Simultaneously, BIDV will increase its IT platform and capability for integration, expand regional coverage, strengthen networks with foreign financial institutions, and conduct in-depth studies of FTA impacts in order to advise businesses on their trade and investment promotion.

Can Van Luc, SEVP of BIDV said that in the coming time, to proactively integrate into the AEC community, businesses and financial institutions should prepare for six “necessities" including human resources, finance, technology, processes, products and cooperation/collaboration.

ASEAN, with a combined GDP set to reach USD4 trillion by 2020 and an OECD-forecasted economic growth of 5.6 percent over the next 4 years, is predicted to be the world’s 4th largest economy. Currently, the grouping taken together is the 7th largest economy worldwide.

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Tha nh Dat

EEU’s door opened to Vietnam’s farm produce Enterprises in Vietnam will have more chances to boost export of their agro-forestry-aquatic products to the Eurasian Economic Union off the back of the historic free trade agreement between the country and this union.

A historic deal On May 29, 2015, during the Eurasian Intergovernmental Council meeting in Kazakhstan, the Eurasian Economic Union (EEU) signed a free trade agreement (FTA) with Vietnam, the first such deal struck by Russia-led union with a third party as it seeks to boost its presence in Asian markets.

Vietnam’s government considers this FTA as a historic deal as it will help Vietnam expand its exports to a gigantic market of a combined population of 181 million and gross domestic product of over USD4 trillion, and total trade value of nearly USD1 trillion.

Minister of Planning and Investment Bui Quang Vinh said that “the EUU is opening its door to Vietnamese products, because they highly values the Vietnamese market which is expected to see strong growth and has a very important position in Southeast

Asia and Asia. That’s why they have inked this FTA.” Upon the implementation of the FTA, the two sides’ bilateral trade turnover could rise from over USD4 billion in 2014 to over USD10-USD12 billion within the coming years. Vietnam’s annual exports to Russia, Belarus and Kazakhstan will each likely increase 18-20 percent.

“The union will impose a zero percent import tax rate on all of Vietnam’s aquatic and footwear products, most garment products and some products like furniture, coffee and tea, if we can meet their requirements,” said Vietnam’s Minister of Industry and Trade (MoIT) Vu Huy Hoang.

A golden opportunity for Vietnam’s farm produce Hoang re-stressed that under the FTA’s commitments, the EEU promised that in the first year of implementing the

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FTA, import tariffs will be all reduced to zero percent to all Vietnam’s aquatic products, instead of the existing average rate of 18-25 percent.

Additionally, the EEU would also maximize the tariff reductions for packaged coffee products of less than three kilograms, and for tea and wooden products as well, he said.

One of the reasons behind such a priority is that the EEU’s member states are in need of agricultural products which will meet their local demand, with some used for export.

“The FTA offers a golden opportunity for enterprises in Vietnam to boost exports of its agro-forestry-aquatic products to the EEU market. Many EEU firms are also seeking Vietnamese suppliers of agro-forestry-aquatic products,” Hoang stressed.

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equivalent to 86 percent of the package.

For example, Russia’s DILAN Company said it wanted to import Vietnam’s agro-forestry-aquatic products like fish, rice, sugar, tea, peanut, cashew and assorted vegetables, and garment and wood products as well.

Vietnam’s consulate in Russia’s Vladivostok said Russian firms like DILAN wanting to do business with Vietnam was of great number.

However, the problem was how Vietnamese companies could meet their requirements.

Meanwhile, some local firms are seeing the FTA as a big opportunity for them to expand markets.

“Currently Vietnam has 400 aquatic product firms that export to the EEU, but only about 30 can export to the EEU. This FTA will help increase the number of Vietnamese exporters to the

EEU. Vietnamese exporters currently stand ready to boost exports to the EEU market as they already have some partners there,” said Vietnam Association of Seafood Exporters and Producers’ vice chairman Nguyen Huu Dung.

BIDV in favor of agroforestry-aquatic industries BIDV is said to be one of the first banks to grasp the potential opportunities from the EEU, and has been an active force in lending to develop agro-forestry-aquatic industries.

For instance, the bank is currently offering a credit package worth USD321 million to aquatic firms. The program is due to finish at the end of this year.

By the end of May the bank had already lent USD275.2 million to 70 customers,

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BIDV also launched other credit packages to develop aquatic industries, such as USD229.3 million to improve the infrastructure of aquaculture areas and land clearance compensation.

Additionally the bank offered a short-term USD91.7 million package to construct /upgrade vessels and USD160.5 million for seafood breeding, purchase, and processing in Binh Dinh, Phu Yen, Khanh Hoa, and Da Nang.

Concerning the rice market, BIDV continues to meet the demands of rice businesses. This year, the bank expects to be the commercial bank with the largest credit market share, and to have relationships with all rice exporters in Vietnam.

BIDV is also the first bank in Vietnam to establish a work group which aims to promote investment and trade between Vietnam and Russia.

The group will represent the bank in supporting Vietnamese enterprises in investment and export to Russia.

With the conclusion of EEU, BIDV is believed to provide a valuable service to Vietnam’s exporters to the EEU, and to Russia in particular.

market movements

Va n Nguye n

Banking sector highlights In the first half of 2015, banking sector achieved positive results, laying a solid foundation to fulfill the targets set for 2015, and contributing to the sustainable growth and development of the macroeconomy.

Positive movements At a conference on banking performance review, State Bank Governor Nguyen Van Binh said that with proactive and flexible implementation of the monetary policy, the banking sector has contributed significantly to the macroeconomic stability. Monetary policy was closely aligned with other macro-economic policies to ensure inflation curbing target, macroeconomic stability and economic growth.

According to the Governor, interest rate was at reasonable level. The deposit rates of over 6-month terms declined by 0.2 – 0.5 percent p.a., facilitating commercial banks to reduce long and medium-term lending rates.

The lending rates generally decreased by 0.2 - 0.3 percent p.a., in which the

medium and long-term lending rates dropped by 0.3 percent.

Regarding exchange rate, in the first 6 months of 2015, the State Bank adjusted the VND/USD exchange rate up 2 percent in accordance with 2015 direction. Currently, Vietnam reports a trade deficit (though not big) but other sources of foreign currencies to Vietnam are still optimistic. Basically, the country still has a surplus in balance of payments with increased foreign reserves.

Vietnam credit had a good signal from right from the start of the year with growth of over 6 percent against the end of the previous year.

During the past 6 months, credit institutions speeded up their restructuring following the state bank’s restructuring scheme. The State Bank imposed strict sanctions on weak credit institutions in order to ensure the system security, monetary market stability and depositors. In addition, the State Bank also speeded up the merger and acquisition of credit institutions.

Concerted efforts Given the first 6-month performance,

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SBV Governor Nguyen Van Binh requested the banking sector to continue efforts, take advantage of favorable conditions and proactively overcome difficulties to fulfill the mission of the banking sector set for 2015. Two priorities are to handle bad debts and restructure credit institutions.

In the second half of 2015, SBV will continue proactive and flexible monetary policy and fiscal policy to curb inflation, stabilize the macroeconomy, support economic growth and ensure the liquidity of credit institutions and the economy. Main directions include: Flexibly manage the open market operations and interest rates in line with macroeconomic objectives, monetary policy; Continue to stabilize exchange rate within the range set at the start of the year; Flexibly manage credit solutions,

market movements

Some key economic indicators in the first half of 2015

W

ith the efforts of the Government, ministries and the business community, the key economic indicators in the first 6 months of 2015 were stable and positive, specifically: l GDP

growth continued strong recovery trend (6.28%, higher than the 5.18% of the same period last year);

l Inflation

SBV's banking sector mid-year review

continued to remain low (CPI in June rose by 1% compared to the same period last year);

l Exports

continued good growth (9.3% year on year);

ensure the supply of capital for the economy, and create favorable conditions for access to bank loans; Continue to implement measures consistently to closely and effectively manage foreign currency market; Focus on taking solutions to achieve the credit targets set for the entire year; Continue to speed up the restructuring of credit institutions, and handling of non-performing loans (NPL) and reduce NPL ratio of the banking sector to below 3% by the end of 2015.

Regarding handling of the NPL, banks have to classify the bad debts in accordance with regulations, make full provisions, and proactively sell bad debts to Vietnam Asset Management Company (VAMC). By the end of Q3/2015, NPL ratio is expected to fell to below 3%. SBV will adopt measures to incentivize banks which handle the NPL well the bad debts and sanction

those who do not actively do. l FDI

In addition, the banking sector will strive to stabilize deposit rates, reduce lending rates, particularly medium and long term lending rate by 1.0 - 1.5% per annum. The State Bank expects that by the end of 2015 credit growth will hit the target at 13-15%. SBV may adjust it to 17% to boost economic growth.

“In the first 6 months of the year, the whole sector did a good job in connecting banks and enterprises, in credit program for hunger elimination and poverty reduction, and in communication, thus gaining consensus and trust of the people in the banking activities�.

Nguyen Van Binh, Governor, State Bank of Vietnam.

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disbursement increased steadily (9.6% year on year);

l The

money market was stable, credit growth was optimistic (as of June 18, 2015, credit increased by 6.09% against end-2014, much higher than the 1.5% of the same period last year), interest rates remained low;

l The

foreign exchange market was stable in contrast to much volatility of the world;

l Stock

market was stable and the real estate market continued good trend.

Source: BIDV Research Center (as of 26 June 2015)

market movements

Ngu y en Quang

Credit on the rise

A

s of June 15, 2015, Vietnam’s credit growth reached 5.78 percent, up 18.98 percent yearon-year.

The information was released at a press conference on banking activities in the first 6 months of 2015. Attending the conference, Mr. Bui Quoc Dung, Director of the Monetary Policy Department of the State Bank of Vietnam (SBV), revealed that M2 rose 4.88 percent, while deposits have climbed 4.74 percent since the end 2014. The system’s liquidity is stable, and even on the rise.

Credit in the economy increased 5.78 percent from the end of 2014 and 18.98 percent year-on-year. Notably, as of June 30, outstanding loans to agricultural and rural areas jumped 7.71 percent from the end of 2014.

The credit growth rates for the remaining four priority sectors, namely exports, small and medium enterprises (SMEs), supporting industries, and hitech businesses, were at 3.9 percent, 1.88 percent, 0.2 percent and 24.02 percent, respectively.

As of June 25, credit to the real estate market increased 10.89 percent compared to the end of last year, accounting for 8.3 percent of total outstanding loans, and increased 7.9 percent year-on-year

“These loans only went into housing construction and houses for rent, meaning that credit does not flow into the real estate business. This credit also stimulates consumption for construction materials,” said SBV Deputy Governor Nguyen Thi Hong.

Hong also reaffirmed that the State Bank always encouraged credit flow to priority areas.

Interest rates in the first 6 months continued to decline by 0.2-0.5 percent per annum since the end of last year.

In addition, according to SBV, since

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its establishment the Vietnam Asset Management Company (VAMC) has bought USD6.6 billion worth of bad loans from credit institutions.

In the first 6 months of 2015, VAMC continued to buy and settle nonperforming loans (NPLs) from banks.

As of June 15, 2015, VAMC was approved to buy USD1.3 billion worth of bad loans. In the first 6 months of this year, the banking industry continued to restructure and accelerate the handling of NPLs, striving to bring the NPL ratio to less than 3 percent at the end of the year.

market movements

Anh Tuan

World Bank’s positive outlook on EAP

A

lthough the East Asia and Pacific (EAP) growth is expected to ease further to 6.7 percent in 2015, the downward trend was stopped and the growth remained flat thereafter.

This reflects a continued slowdown in China that is offset by a pickup in the rest of the region, including Vietnam, Malaysia, Thailand, Indonesia, etc.

According to World Bank’s latest report on global economic prospects published in June, despite the slowdown in China, economic activity elsewhere in the region accelerated sharply in the last quarter of 2014,

partly helped by lower fuel prices and more accommodative policies.

intensity of production, and the share of oil and gas in energy consumption.

And in 2015, the rest of the region could witness a growth, which is benefiting from the strengthening recovery in advanced countries, low energy prices, improved political stability, and ample liquidity in global financial markets (despite an expected gradual tightening in the United States).

In the region excluding China, the forecast is for growth to reach 4.9 percent in 2015 and 5.4 percent in 2017, driven by the large ASEAN economies.

EAP countries will mostly benefit from low fuel prices, but the impact will vary across countries, reflecting the magnitude of net fuel imports, energy

GDP forecast for some EAP countries 00-10*

2011

2012

2013

2014e

2015f

2016f

2017f

Cambodia

8.0

7.1

7.3

7.4

7.0

6.9

6.9

6.8

Indonesia

5.3

6.2

6.0

5.6

5.0

4.7

5.5

5.5

Malaysia

4.4

5.3

5.5

4.7

6.0

4.7

5.0

5.1

Myanmar

10.3

5.9

7.3

8.3

8.5

8.5

8.2

8.0

Philippines

4.8

3.7

6.8

7.2

6.1

6.5

6.5

6.3

Thailand

4.5

0.8

7.3

2.8

0.9

3.5

4.0

4.0

*GDP growth rates over intervals are compound average; current account balance shares are simple averages over the period.

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In Vietnam, GDP growth is forecast at 6 percent in 2015, rising gradually to 6.5 percent in 2017 on the back of continued strong performance of the manufacturing sector, exports, and foreign investment.

In Indonesia, which continues to adjust to lower commodity prices, growth will moderate further to 4.7 percent in 2015 before picking up to 5.5 percent in 2016-17, supported by a recovery of investment and stronger exports.

In Malaysia, growth will likely to slow to 4.7 percent in 2015, as low oil prices dampen investment in the oil and gas sector and credit growth continues to slow. In addition, private consumption will moderate as a result of the introduction of the goods and services taxin April 2015.

market movements

Tra n Duc

Banking stocks rally Since the start of the year, the market saw 2 bullish waves of banking stocks.

Among them, BIDV’s shares (BID), Vietinbank’s (CTG) and Vietcombank’s (VCB) had significant growth. However, their gains have not fully reflected the potential of the stock group.

Banking stocks rebound Since 2006, Vietnam’s stock market experienced strong growth until the recession from 2008 to 2012.

During this time, many banks listed their stocks though eventually prices dropped and couldn’t bounce back.

In 2021, GAS was listed, attracting many investors and gradually became a market pillar resulting in banking stocks losing their position in investor’s portfolios. After the damage was done to Vietnam’s banking businesses, many banks implemented prudent business strategies, restructuring and using funds for loan loss provision.

year, banking stocks have been on the rise. GAS lost half of its market capitalization value while VIC and VNM lost 10 percent since August 2014.

Conversely, banking stocks’ market capitalization reached USD54.1 billion with improvements attributed to BID, CTG, and VCB. In the first trading session of June, VCB surpassed GAS to capitalize on the market the most while CFG and BID also accelerated with high liquidity. While the 2014 transaction value of banking stocks fell to less than USD1 million per month, 2015 witnessed up to five commercial banks achieve transaction values exceeding USD1 million/month, making the transformation of the banking system evident.

The current Price-Earnings Ratio (P/E) and Price-To-Book Ratio (P/B) of

As market pillars like GAS VIC and VNM have begun to collapse this

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banks’ stocks are lower than market’s of 1.4 percent and 2.5 percent, respectively. Moreover, many banks posted positive business result in the first quarter, and are expected to do so again in the second quarter of this year with expectations of higher cash flows. Likewise, the Vietnam National Financial Supervision Commission (NFSC) stated that credit institutions’ business has improved in the first quarter this year with a 19.1 percent increase in net interest income and a 21.5 percent increase in profit prior to loan loss provision.

According to experts, banks’ profit recorded in the recent period has not yet fully reflected this sector’s growth potential in the coming years; especially in 2016- 2017, banks’ bad debts are expected to decline thanks to economic recovery.

market movements

BID – the sector’s highlight Among banking stocks, BID is said to have the most potential. After the merger of MHB into BIDV, the bank is the second largest commercial bank in term of total assets (after Agribank which has not listed yet). Moreover, compared to CTG and VCB, BID has not sold stakes to foreign strategic partners. Therefore, the bank has much room left to increase charter capital, scale, corporate governance as well as technology systems.

BIDV’s current Compound Annual Growth Rate (CAGR) hit 15.1 percent, higher than the industry average of 11.6 percent. The bank also has a lot of potential in the retail market while remaining strong in their wholesale

banking operations. With imminent economic development, enterprises’ operations are expected to recover and excel, positively influencing BIDV’s profit.

The end of May merger of MHB and BIDV helped raise the bank’s total assets to over USD32 billion with charter capital over USD1.6 billion and likewise boosted the bank’s nationwide network to 182 branches and 798 transaction offices, especially in the Mekong Delta region according to Tran Thang Long, head of BSC’s research department. It would have taken BIDV seven years to construct such a network otherwise, and moreover, the merger will help BIDV develop in the high potential market of retail banking.

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BIDV has been a hot option for many foreign investors of late. The past 20 trading sessions resulted in foreign investors as net buyers with transactions totaling USD640 billion.

With the ascent of BIDV, even more institutional investors and ExchangeTraded Funds (ETF) have been pining to add BID to their portfolio.

These positive signals have been partly reflected in the strong price growth of BID since early this year.

The ticker’s closing price on June 12 was VND21,200 (USD1) per share, up 74 percent compared to the first trading day of 2015. However, the price increase reflected only moderate growth prospects for investment in BID.

products & services

Viet Dung

Auto market continues to rise The market for new vehicles in Vietnam has continued to grow strongly since the beginning of this year in terms of sales revenue and volume.

High potential According to the General Statistics Office of Vietnam, Vietnam’s retail revenue in the first 5 months of this year rose to VND996.9 trillion, a 10.2 percent year-on-year. During the same timeframe revenue from the automotive market jumped by almost twice as much, increasing 20 percent.

Figures from the Vietnam Automobile Manufacturers’ Association (VAMA) showed that sales revenue of VAMA members in May hit 16,946 units, an increase of 72 percent year-on-year (9,855 units). The gain was attributed to a significant acceleration in economic growth boosted by rising domestic consumption, exports and investment.

Truong Hai (Thaco) group, which has a portfolio including Kia, Mazda, and Peugeot, was the leading brand over the five-month period. The group posted a sales volume of 27,927 units, and accounted for a 37.5 percent proportion of VAMA members.

Ford's sales were up by 87 percent at

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1,747 units in May, while Honda's sales rose by 7 percent to 2,425 units.

Vichai Jirathiyut, president of the Thailand Automotive Institute, predicted that Vietnam’s automotive industry would enjoy the fastest growth in Southeast Asia for the next 20 years because of rising demand and help from the government.

Vietnam recorded a growth in automotive sales of 37.6 percent in 2014. However, according to a report

by BMI research, the country can expect further growth of 19.9 percent in 2015.

Automotive sales experienced a strong surge after July 2014, and continued expanding at double-digit growth rates for the remaining months of the year.

“Loosening credit and a positive economic backdrop will be driving growth in Vietnam. In 2015, we expect the buoyant automotive market to continue exhibiting strong growth,” stated BMI research.

Besides sales revenue, production volume in the first five months of this year also increased significantly

products & services

The agreement is expected to further contribute to the development of the automotive market, with the introduction of preferential product packages for the benefit of customers.

to 72,400 units, up 62.3 percent. The number of imported units (under nine seats) also climbed 62.8 percent year-on-year. With a population of 90 million people and increasing income per capita, Vietnam’s automotive market is expected to undergo a rapid expansion in coming times.

customers bring home a new car.

BIDV lends support

Under the agreement, BIDV Trang An will offer Toyota My Dinh, as well as its own customers, the best financial products and services such as deposits and current accounts. Accordingly, Toyota My Dinh will prioritize the use of the branch’s products and services.

Toyota My Dinh is one of the largest authorized agencies of Toyota Vietnam.

The total sales volume of this agency has been increased over the years, reaching 3,000 cars at the end of 2014. The company has the largest showroom in Vietnam with a total area of 6,500m2 and a large amount of modern equipment.

BIDV Trang An will also advise its customers on Toyota My Dinh’s products and services. The two sides will design product packages with competitive features for their mutual customers, using both organizations’ products.

BIDV Trang An is a large branch of BIDV with 6 transaction offices in Hanoi and total assets of USD128 million.

The branch is among the top 10 BIDV branches with the highest growth.

The development of Vietnam’s automotive market was largely attributed to banks’ credit policies and packages.

For instance, last month BIDV launched an attractive auto-loan package with a competitive interest rate of only 6 percent. The package is worth USD930 million with a loan tenure of up to 7 years and flexible options for borrowers. The package was created to encourage demand, and to enable more

In May, BIDV’s Trang An Branch (BIDV Trang An) also signed a comprehensive cooperation agreement with Toyota My Dinh to provide the best product packages for customers, supporting the growth in sales.

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products & services

Q u y nh Chi

Remittance flows crest Giant remittances flows into Vietnam are expected to continue contributing to the country’s foreign exchange reserves and bring more benefits to BIDV through related products and services.

A

ccording to Recent Developments and Outlook, the World Bank’s migration and remittances report, the top remittance recipient countries in 2014 were India (USD70 billion), China (USD64 billion), the Philippines (USD28 billion), Mexico (USD25 billion), Nigeria (USD21 billion), Egypt (USD20 billion) and Pakistan (USD17 billion). Other large remittance recipients were Vietnam (USD12 billion) and Lebanon (USD9 billion).

markets, which provides favorable conditions to attract capital to Vietnam. “We have reasons to believe the forecast that inward remittances will increase by 12-15 percent this year,” Mr. Nguyen stated.

The first five months of this year bore witness to remittances transferred through banking systems in Saigon amounting to USD 1.7 billion, up 18 percent year-on-year, and it is possible that sum might increase to USD5.3-5.5 billion this year. Remittances to Saigon often account for nearly half of all remittances to Vietnam. Most of this significant sum is invested in the real estate market as well as kept in banks’ savings accounts, which, in turn, brings

Vietnam’s remittances were up from USD11 billion in 2014, the highest to that date. In total, from 1991 until now, Vietnam has received over USD90 billion in remittances. Cash flows from overseas Vietnamese remain a key part of the country's economy, equivalent to about 8 percent of GDP. More than half of this capital comes from the United States. It was forecasted that Vietnam’s remittances would likely reach USD13-14 billion this year.

According to Nguyen Hoang Minh, Deputy Director of the State Bank of Vietnam’s Saigon branch, incoming capital volumes greatly depend on the macroeconomic situations in both Vietnam and foreign host countries.

Both the global economy and domestic market have shown signs of a rebound, especially the property and securities

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B id v R e v ie w

benefit to banks in terms of service charges as well as a source for banks’ foreign reserves.

BIDV has just launched a promotion program for money recipients and improved remittance service. The program started at the beginning of June and will end on August 19. With each transaction (minimum value USD200) though BIDV’s banking channel or through Western Union at the bank’s transaction office and agents, remittance sender/receiver can win up to USD25. Total value of the program is USD28,700.

products & services

Product news

$321 million available for personal financing in the Central Highlands in 2015

T

o support individual customers and households in their personal and business endeavors, BIDV has launched a credit initiative with a preferential interest rate of 6.5 percent per annum for customers in the Central Highlands. The program will last until the end of this year.

Specifically, short-term loans of less than 6 months, and from 6-12 months, will bear interest rates of 6.5 percent and 7.5 percent per annum respectively. In addition, customers will receive another promotion such as a free year of BIDV mobile use, a month free from BSMS fees, or an additional 0.1 percent on deposit rates through BIDV online.

BIDV’s branches in the Central Highlands No.

Branch

Address

Tel. number

1

Kon Tum

1A Tran Phu, Kon Tum City, Kon Tum Province

(060) 3.862164

2

Gia Lai

112 Le Loi, Hoa Lu Ward, Pleiku City, Gia Lai Province

(059) 3.824034

3

Dak Lak

17 Nguyen Tat Thanh, Buon Me Thuot City, Dak Lak Province

(0500) 3.952756

4

North Dak Lak

170 Hùng Vương (QL 14), An Binh (0500) 3.570727 Ward, Buon Ho Town, Dak Lak Province

5

East Dak Lak

55 Nguyen Tat Thanh, Eakar Town, EaKar Province

(0500) 3.625440

6

Ban Me

29 No Trang Long, Tan Tien Ward, Buon Me Thuot City, Dak Lak Province

(0500) 3.839309 (0500) 3.839308

7

Dak Nong

23/3 Street, Gia Nghia Town, Dak Nong Province

(0501) 3.696969

8

South Gia Lai

117 Tran Phu, Pleiku City, Gia Lai Province

(059) 3.646789

9

Pho Nui

242 Nguyen Tat Thanh, Phu Dong Ward, Pleiku City, Gia Lai Province

(059) 3.824533

10

Lam Dong

30 Tran Phu, Da Lat, Lam Dong Province

(063) 3.821171

11

Bao Loc

52 Le Thi Pha, Ward 1, Bao Loc City, Lam Dong Province

(063) 3.866802

12

Da Lat

28 Hoa Binh area, Ward 1, Da Lat City, Lam Dong Province

(063) 3.82 3993

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Congratulations to our customers on winning an iPhone 6!

F

our of our lucky customers have just won an IPhone 6. The prize draw was entered when customers registered for BIDV e-banking as part of a promotion this summer.

To celebrate 3 years since BIDV e-Banking was launched and to welcome the summer, BIDV started the program “Happy summer with BIDV e-Banking”. Lucky customers who register for BIDV e-banking can receive cash, an IPhone 6, or tours of Korea and Southeast Asia.

The promotion is still running and there are many gifts left for customers who sign up to BIDV e-banking before July 25, 2015.

Customers who have an existing account at BIDV can sign-up at https:// ebank.bidv.com.vn/DKNHDT/ and new customers can register at a BIDV branch near them.

products & services

News

The companion I choose

F

rom May 22, 2015 until the end of August 20, 2015, BIDV is scheduled to launch “The companion I choose” program worth more than USD16,000 for new individual customers applying for account packages. The program offers account packages tailored to different kinds of customers. The basic package comes with a “harmony” credit card for eligible customers, SMS (BSMS), and BIDV online financial or non-financial service packages. The modern package comes with a BIDV MU debit or credit card for eligible customers, BSMS, BIDV online financial service, and bill payment service.

New customers using the basic account package will be entitled to an issuance fee waiver, a first-year card annual fee waiver and two free months of BSMS. Those with the modern package with receive an SMS token for BIDV online, and a reduction of 0.1 percent per annum of lending rate.

The first 5,000 new customers who successfully apply for the above services are expected to receive a credit of USD2.3 to their accounts.

However, this is not applicable to new customers who open payroll accounts, or student-linked cards. Additionally, there are 100 opportunities to receive USD46 credited to one’s account if a customer maintains an average balance of at least USD46 the the third quarter of this year.

Savings program with super promotion in 2015

B

IDV will hold a savings program titled “quick deposits, instant gifts” from May 27, 2015 until July 27, 2015 which is expected to provide more than VND10 billion in value through select BIDV branches. With a deposit of USD1,150 or more, customers will be entitled to a gift from BIDV. The more deposits customers make with the bank, the more valuable their gifts scheduled to be, ranging from USD4.5 all the way up to USD915. Depositors at BIDV can choose from a range of tenors and enjoy a fixed deposit interest rate throughout the duration of the deposit tenor. Terms are applicable to VNDdenominated deposits only.

BIDV launches ManU card

B

IDV is offering a special incentive for customers who love The Red Devils, more commonly known as Manchester United FC, by giving them a chance to own a very special gift. Rather than just another signature, flag or shirt, Manchester United fans can now express their love for the team with a co-branded BIDV Manchester United card.

Colored red to represent the team, their passion, and desire to win, the co-branded BIDV Manchester United card is not

44

only a method of payment, but also a high-class symbol displaying the intense love and dedication of true fans.

From now until August 2, 2015, BIDV is offering many incentives for new cardholders such as annual fee waiver for the first year, and chances to win USD70 (for credit cards) and USD35 (for debit cards). In addition to the cash bonus, customers also have the opportunity to own special gifts such as flags and autographed jerseys from Manchester United players.

B id v R e v ie w

products & services

News

Experience our VIP services, enjoy your life

​F

rom July 1 to September 30, 2015, BIDV is offering a preferential program for VIP customers. Accordingly, customers who become BIDV’s VIP members will receive a BIDV Premier credit card as a special gift from the bank.

LaoVietBank opens new transaction office

O

n May 4, 2015, in Vientiane, Laos, Lao-Viet Joint Venture Bank (LaoVietBank) held an opening ceremony for the new Don Nun transaction office.

Addressing the ceremony, Mr. Bouavanh Simalyvong - Deputy General Director of LaoVietBank stated, “Over 15 years of operation and development, LaoVietBank has become one of the leading commercial banks in Laos with total assets of over USD700 million, total outstanding loans of USD512 million, deposits of nearly USD600 million and an increasing network in Laos”.

Earlier, in March this year, LaoVietBank opened its Dongdok transaction office. Currently, the bank has 06 branches and 08 transaction offices in key economic areas including Vientiane, Champasak, Luangprabang, Savannakhet, Xieng Khouang, Attapeu, Kham Muon and Oudomxay. According to the bank’s strategy for the 2013-2017 period, LaoVietBank will continue opening new branches and transaction offices nationwide, contributing to the supply of banking products and services on a convenient and timely basis.

The opening of the Don Nun transaction office marks a new milestone in the bank’s development, demonstrating the strong commitment of LaoVietBank in providing financial products and services to the Laotian people and business community..

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With BIDV Premier, customers can make online payments, plus go shopping and receive up to VND1 million (USD46) cash back within 45 days of the program’s end. The program is for customers who use their BIDV Premier credit card through BIDV’s POS or other banks accepting BIDV cards, and for customers who are making online payments for the first time since the card was issued.

products & services

Tha o Dao

The value of active listening On April 8, 2015 BIDV officially launched its Social Media Command Center (SMCC) for Vietnam’s banking sector. Using state-of-the-art social listening technology system SMCC staff can easily and quickly identify and gather customer comments about BIDV across a number of social media platforms and generally on the internet. This will allow BIDV to quickly support customers both through BIDV’s official pages (Facebook, LinkedIn, YouTube) and other social sites.

Customer Care on Social media – Current trend and beyond This move is indicative of BIDV’s pioneering spirit and efforts to keep pace with the rapid growth of internet technology and social media. It also will help BIDV to adapt to changes in how people communicate and the interactions between customers and banks. Every day on social media, at any hour, customers might possibly post their status or comment on any topic related to BIDV, such as their feelings about service quality or their questions about specific products.

By using this SMCC, provided by Boomerang, BIDV will be able to “listen’’ in real time to what customers post and provide immediate feedback.

This will help BIDV close the gap between the bank and customers and is an innovative way to better serve them.

Respect customer’s privacy on social media A young man – Nguyen Chien Thang found a lost BIDV card at a restaurant and posted on a public forum. SMCC helped connect Thang and the card owner only after a few hours.

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BIDV’s official social presences have

products & services

seen attention from more and more fans and followers who have liked or subscribed to pages and groups.

Those presences have increasingly seen a raft of questions regarding products and services, as well as feedback. The SMCC helps to monitor and collect information from other social sites based on customizable key words and/or topics. However, only public information is gleaned from the system, which helps to protect customers’ privacy and security.

Upon receiving information, SMCC’s customer response agents will promptly support by providing feedback in a professional and helpful way. If customers are angry or have complaints about BIDV, the SMCC’s staffers will make every effort to help them resolve the issue and put them at ease. In specific cases the SMCC can transfer information to the Contact Center or other particular departments for follow up.

How customer react on BIDV’s change

Since starting, the SMCC has monitored and filtered 7,463 mentions about BIDV as well as received and processed more than 400 cases requiring customer support. These customers have been astonished at the prompt and professional customer service being provided thanks to this system.

The following is a real example of how the active listening platform helps satisfy customer needs: Recently a young man, Nguyen Chien Thang, found a lost BIDV card at a restaurant. He then posted a picture of the card to the “Otofun” forum and asked members to help find the card owner. “That’s really the power of social networking, that only after a few hours BIDV’s Contact Center called and informed me that they had already identified and contacted the card owner. They also asked for my permission to provide my phone number to the owner. Immediately after, the card owner phoned me and I was able to give her back the card.

She thanked me by giving me a New

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Year Hong Bao. It was flattering and amazing that a state-run bank like BIDV has done such wonderful things for their customers. Tomorrow I will open an account,” Thang shared with BIDV Review. As a result, BIDV has provided security to one customer by getting her card back, and gained another for its incredible service.

With the tremendous growth of the internet, customer issues no longer require a phone call or letter, but just a few lines on a social media site can start a much bigger ball rolling.

Customers can be fully assured that BIDV’s social media customer support is always ready and willing to listen and provide timely support. Even when customers are dissatisfied, BIDV wants to know, listen and do its best to solve their problems. This is the meaning of going the extra mile for every customer.

Let’s connect with BIDV’s SMCC via

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DUng chi

The marble mountain Enjoying a vacation in Da Nang on a sunny day in June, we spent a morning in the old marble village of Non Nuoc, at the foot of Ngu Hanh Son Mountains, to experience the ancient art of marble sculpture.

T

he Non Nuoc craft village was founded in the 18th century.

It is located in Hoa Hai Ward, Ngu Hanh Son District, and is the place where generations of artisans and craftsmen labor day and night to create sculptural works of art.

A long time ago, the first craftspeople in the area used marble to make mortar, millstones, and tombs.

However, in more recent years the rapid development of tourism led to a boom in the marble business in

the village. Now there are more than 3,000 artists and craftsmen in the area, however only people with many years of experience, skill, and passion can create and instill life into the marble sculptures.

We had a chance to visit the three biggest marble shops in the village: Ut Lan, Nhut Manh and Nguyen Hung, and all of us were impressed by their appealing and fascinating artworks.

Here they provided ranges of marble products in all shapes and sizes that will satisfy any customer’s demand.

Non Nuoc pagoda in Da Nang city, Vietnam

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The products varied from small items such as necklaces and bracelets to the bigger and more valuable including furniture and statues. The most popular styles of statue were Buddhas, Vietnamese women, dragons, and lions; although besides these they also

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Tran Thi Ly Bridge in Da Nang

produce European-style statues to meet the demand from foreigners and for exportation.

According to 50-year-old shop owner Nhut Manh, raw materials are no longer sourced from Marble Mountain itself since the local government’s prohibition of marble exploitation in 1983. To maintain jobs and to preserve the precious traditions of the village, the handicraft workers import stones mostly from other Northern provinces such as Thanh Hoa, Thai Nguyen, and Ninh Binh. Additionally, over the past 6 years, marble from India and Pakistan has also been used as a supplementary source.

“Many customers come to our shop as all of our products are made from monolithic marble,” Nhut Manh explained.

Many of the products sold on the market nowadays are made from marble powder. Normally, the rock is ground into a fine powder, mixed with glue, and then pressed at high pressure. The products made from marble powder all look the same, and have a smooth touch.

“In reality we rarely have a perfect monolithic marble block, so using marble powder will make the products shinier. However products made from powder are not sophisticated, easily broken, and do not have the same feng shui effect. Some customers buy marble based on colors which they believe will bring good luck to them.

However, in the traditional Vietnamese conception, only monolithic marbles are believed to bring this effect”, he added.

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Midday was approaching, the sun was shining heavily, and the stones outside the shops turned to glitter under its rays. We decided to leave the craft village, promising our new friends we would return another day. Each of us brought back some small marble accessories as souvenirs for family and friends. We will long remember the sounds of craftsmen echoing from marble workshops at the base of the mountains, mixed with the call of the wind and the waves from the faraway ocean.

Customers in Da Nang can contact BIDV Da Nang Branch for banking products and services Address: 90 Nguyen Chi Thanh Street, Hai Chau I Ward, Hai Chau District, Da Nang City

CSR

Ngu y en Tr ang

Nguyen Thi Anh Vien, Vietnam's No.1 female swimmer won 8 golds at SEA Games 28 in Singapore

Swimming foundation makes waves

O

n June 12, BIDV collaborated with the Ministry of Culture, Sports and Tourism to discuss the establishment of Anh Vien young swimming talents foundation with the objective of motivating talented young Vietnamese swimmers. Accordingly, BIDV and its staff donated USD23,000 to the foundation with hopes of providing opportunities to aspiring athletes who might, one day, grow up to be as much a source of national pride as miss Nguyen Thi Anh Vien, a winner of 8 gold, 1 silver, and 1 bronze medal from this year’s SEA Games.

According to Mr. Tran Bac Ha, Chairman of BIDV, the company proposed to establish the foundation with a view to involving local and foreign donors in the development of Vietnam’s swimming competitiveness.

BIDV made its donation with the wish to help nurture Vietnam’s young generation. The bank expected social contributions to the foundation to reach USD321-459 million this year.

In addition to supporting young talents to achieve high performance on the international stage, BIDV hopes the Ministry of Education and Training will help to popularize swimming at schools to help students, children and the entire society improve their physical health and reduce drowning risks. According to the Ministry of Labor, Invalids and Social Affairs, Vietnam records 3,500-4,000 drowning deaths among children each year, ten times higher than that of developed countries.

Mr. Vuong Bich Thang, Director of the General Department of Sports, appreciated the significance of the foundation to the sports sector and the entire society. He stated that the foundation was an important resource for the development of sports talent in Vietnam given the limited allocated funds. The contributions by organizations, individuals, and the entire society to the development of Vietnam’s sports can help find young

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talents and give them opportunities they might otherwise miss.

Mr. Le Khanh Hai, Deputy Minister of Culture, Sports and Tourism stressed that swimming training at school was of great significance to the physical development of the whole society. “I believe that the foundation will involve many participants and help realize young talents’ dreams” he said.

In recent years, BIDV has always been interested in supporting cultural and sports activities, significantly contributing to the development of the country’s athletics. BIDV sponsored Vietnam sports at SEA Games 2007, 2009, 2011 and 2013 with amounts of USD5,000, USD15,100, and USD25,200 respectively.

In 2014 BIDV officially sponsored Vietnam women’s national football team for the 2014–2016 period with USD458,400 each year.

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