BIDV Review 48 - April 2019

A Newsletter of Bank for Investment and Development of Vietnam JSC • Issue No.48 | April 2019

S&P upgrades BIDV’s credit ratings Vietnam outperforms in creating a cashless economy

BIDV headquarters seen from Hoan Kiem Lake

ABOUT BIDV Founded in 1957, BIDV is the largest commercial bank in Vietnam by assets. The bank boasts subsidiaries in finance, banking, securities and insurance. It has a wide network of more than 1000 branches and transaction offices as well as commercial presences in six countries and territories.

BIDV stock (BID) is listed on Ho Chi Minh City Stock Exchange (HOSE). For more information, please visit www.bidv.com.vn.

EXECUTIVE PRODUCER QUACH HUNG HIEP, Ph.D BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM JSC

Senior Executive Vice President EDITORIAL BOARD BRANDING AND PUBLIC RELATIONS DEPARTMENT HEAD OFFICE: BIDV Tower, 35 Hang Voi str., Hoan Kiem dist., Hanoi, Vietnam Tel: (+84) 24 22205544 Fax: (+84) 24 22225316 Contact center: 19009247 Email: bidvreview@bidv.com.vn License No.17/GP-XBBT dated 15 March 2019 by the Ministry of Information and Communications Printed at Vietnam Book Printing Joint Stock Company

Editor’s Letter

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Dear readers, ietnam has received positive assessments from S&P Global Ratings with its rating raised to 'BB' from 'BB-' after nine years. The country’s outlook remains stable. In addition, S&P revised its transfer and convertibility assessment on Vietnam upward to 'BB', from 'BB-'. The upgrade comes as a result of continued improvements in the government's institutional settings, which S&P believes are supporting consistently strong economic growth and development outcomes.

On the sovereign rating upgrade, S&P Global Ratings has also raised BIDV’s long-term issuer credit rating to 'BB-' from 'B+' with stable outlook. The agency affirmed the bank’s short-term issuer credit rating of ‘B’.

The stable outlook on BIDV reflects the firm’s expectation that the bank will maintain its strong franchise and satisfactory profitability while pursuing capital-enhancement measures over the next 12-18 months.

In April, BIDV inked cooperation agreements with big corporates both local and foreign to support its business. The bank signed a memorandum of understanding (MoU) with Norinchukin Bank to support Japanese firms doing business in Vietnam. The two parties will work together to meet the diverse needs of customers for financial and banking products and services. To date, BIDV has

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entered into 35 MoUs with Japanese banks in this area of cooperation. Separately, BIDV and Viettel signed an MoU on comprehensive cooperation, aiming to provide customers with the best benefits when using the products and services of both parties.

With outstanding performance and innovation, BIDV has been named amongst the “Top 10 Vietnamese Excellent Brands 2018” by the Vietnam Economic Times. It was also honoured by Vietnam Software and IT Services Association with a number of prestigious Sao Khue 2019 awards for embedding automation and artificial intelligence in its products, a testament to the bank’s pioneering movements in digital business.

This publication offers a view of the retail market and cashless payment in Vietnam through an assessment of major global newswire and firms as well as introducing some news relating to banks’ credit ratings and use of foreign currency and credit growth cap. This year, the highest credit growth limit of 15 percent was assigned to the banks which met the Basel II’s standards earlier than the central bank’s deadline of 2020.

CONTENTS

BIDV HIGHLIGHTS

PARTNERS

4. S&P upgrades BIDV’s credit ratings

10. Building trusting relationships

5. Comprehensive agreement for better customer service 6. Bolstering ties with Japanese banks 7. BIDV honored with “Vietnamese Excellent Brand” award

12. Growing amid a challenging market

14. BIC shakes hands with SGI to boost guarantee insurance

14. BSL fosters cooperation in finance leasing MARTKET MOVEMENTS

POLICY UPDATES

15. Banks give optimistic growth forecasts

8. New circulars coming into force 9. Highest credit growth capped at 15 percent

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CONTENTS

16. Vietnam ratings raised after nine years

PRODUCTS & SERVICES

29. BIDV wins awards for AI and robotic products

20. Momentum for regional growth 22. Vietnam’s retail market – high appeal for investors LIFESTYLE 30. Modern romance in Da Lat

INSIGHTS

24. Vietnam outperforms in creating a cashless economy 32. The M’nong legend of the elephant

26. Smart investment 28. Policies promote non-cash payment in Vietnam

34. BIDV Smile sees runners hit giant park

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BIDV HIGHLIGHTS

T IEN ANH

S&P upgrades BIDV’s credit ratings due to its size, long operating history, and government ownership.

S&P’s view of BIDV’s stand-alone credit profile (SACP) remains unchanged.

BIDV's 'b' SACP reflects the bank's strong franchise and satisfactory profitability and asset quality relative to peers' in Vietnam. The very weak capitalisation tempers these strengths.

S&P believes BIDV's risk-adjusted capital (RAC) ratio is likely to remain at less than 2 percent over the next 12-18 months. The firm’s RAC calculation reflects the pressure on BIDV's capitalisation stemming from the bank's history of rapid loan growth, peaking at 34 percent in 2015, and high dividend payout averaging 50-60 percent of net income.

S&P Global Ratings has raised BIDV’s long-term issuer credit rating to 'BB-' from 'B+' with stable outlook. At the same time, S&P affirmed the bank’s short-term issuer credit rating of ‘B’.

S

&P ratings agency upgraded BIDV to incorporate a higher degree of government support for the bank since the firm raised the sovereign credit rating on Vietnam to BB/ Stable/B on April 5, 2019. The firm has helped incorporate a two-notch uplift for extraordinary government support into the long-term rating, reflecting BIDV's high systemic importance to Vietnam’s banking system.

BIDV is the largest bank by total assets in Vietnam with a dominant market share of almost 14 percent loans and 13 percent deposits. The bank enjoys a high degree of customer confidence

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The bank’s management has recognised the need for capital conservation to support BIDV's financial profile and meet more stringent Basel II capital standards in 2020. Loan growth moderated to 14 percent in 2018, and the rating firm expects the bank's dividend payout to gradually decline from a high base.

The stable outlook on BIDV reflects the firm’s expectation that the bank will maintain its strong franchise and satisfactory profitability while pursuing capital-enhancement measures over the next 12-18 months.

BIDV HIGHLIGHTS

T HU CHI

Representatives of BIDV and Viettel shake hands after having signed the MOU

Comprehensive agreement for better customer service On 9 April BIDV and Viettel signed an MoU on comprehensive cooperation for the period 2019 – 2023, aiming to provide customers with the best benefits when using the products and services of both parties.

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o ensure comprehensive and effective cooperation, the two sides agreed to immediately implement some of the contents, focusing on their respective strengths.

Under the terms of the agreement, BIDV has committed to provide modern banking and financial products to Viettel and its subsidiaries.

The bank will also support customers who are using Viettel’s services to pay fees through its various distribution

channels including transaction counters, ATMs, internet banking and BUDV SmartBanking. In addition, Viettel will use BIDV ibanking services such as online account inquiry, cash flow management and digital signature documents Meanwhile, as a telecom giant owning the country’s largest and safest data centre, Viettel will provide BIDV with information infrastructure, data storage, and domestic and international data transmission services. Viettel will also coordinate to deploy BIDV services to households and individuals thanks to Viettel's extensive network In particular, BIDV and Viettel will coordinate to provide financial and banking services through ViettelPay –a digital platform developed by Viettel.

BIDV has accompanied Viettel

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throughout its development process, meeting the company's demand for credit, capital and financial services.

The bank has funded a number of important projects for the group, including a deposit for participation in several 3G projects implemented by the Ministry of Information and Communications, GSM and 3G technology mobile network expansion in Cambodia; and projects in Cameroon, Tanzania and Myanmar. In addition, the demand for short-term loans from Viettel and its members has consistently been met by BIDV in a timely manner since 2007.

According to Mr. Phan Duc Tu, BIDV chairman, the MoU signing marks an important step in the strategic cooperation between Viettel and BIDV, affirming the companionship of major businesses in an effort to promote economic development.

BIDV HIGHLIGHTS

T HU TRUONG

Bolstering ties with Japanese banks services to customers regarding Vietnam’s business and investment climate, local laws for foreign investors in the fields of finance and banking as well as business matching.

To date, BIDV has entered into 35 MOUs with Japanese banks in this area of cooperation.

BIDV and Norinchukin Bank recently signed a memorandum of understanding (MoU) on cooperation to support Japanese firms doing business in Vietnam.

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nder the MoU, BIDV and Norinchukin Bank will cooperate to provide banking products and services for Japanese companies who are customers of these banks and doing business in Vietnam. The two parties will work together to meet the diverse needs of customers for financial and banking products and services such as accounts, deposits, credits, guarantees, domestic and international payments and foreign exchange, among others.

The two parties will also collaborate to provide information and advisory

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Norinchukin Bank was established in 1923 and is headquartered in Tokyo, Japan. The bank’s total assets and owner’s equity as of 31 March 2018 were USD987.9 billion and USD64.5 billion, respectively. It is Japan’s eighth largest bank and ranks 41st globally by assets. The bank’s network consists of 36 branches and offices in Japan, three overseas branches in New York, London and Singapore and two representative offices in Beijing, Hong Kong.

As the largest commercial bank in Vietnam by total assets, BIDV has established partnerships with more than 1,100 banks and bank branches in 90 countries and territories. The bank operates in various fields including banking, insurance, securities and investment, with a network of more than 1,000 branches and transaction points across Vietnam, as well as representative offices and commercial presences in foreign countries.

BIDV HIGHLIGHTS

T HI HUONG

BIDV honored with “Vietnamese Excellent Brand” award BIDV has been named amongst the Top 10 excellent Vietnamese brands in 2018” by the Vietnam Economic Times. and encourage enterprises recording outstanding achievements in business. The awards are determined based on production and business activities, service provision, the application of technological solutions for environmental protection, full implementation of tax obligations, employee benefits, and actively participating in social activities.

In February this year, BIDV was among the top three global banks with the largest change in brand strength, ranking 307th among the top 500 global banks with the most valuable brand in Brand Finance’s ranking table.

Mr. Le Trung Thanh, BIDV's senior executive vice president (centre) receives the "Excellent Brand" award from Vietnam Economic Times

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or the past 18 years, the Vietnam Economic Times has announced its list of the Top 100 Vietnamese Excellent Brands. With the theme “New prestige - New opportunity”, the Golden Dragon Awards recognize

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In 2018 BIDV fulfilled all its business goals, improved its asset quality, financial situation, institutional reform and development and ensured the interests of shareholders, customers and employees.

Ten local enterprises received Vietnamese Excellent Brand Awards: BIDV, Vietcombank, Viettel, Sun Group, Vissan, TBS Group, TH Group, FLC, TVP, and Phu Long Real Estate.

POLICY UPDATE

HU Y EN D IE U

New circulars coming into force BIDV Review would like to introduce some new circulars relating to credit ratings and foreign currency.

CRITERIA FOR BANKS’ CREDIT RATINGS One of the important contents of the Circular No.52/2018/TT-NHNN prescribes the credit rating of credit institutions and foreign bank branches.

According to this Circular, the system of criteria intended for the credit rating of credit institutions and foreign bank branches is composed of the following: Capital (C); Asset quality (A); Management and administration (M); Business efficiency (E); Liquidity (L); and Sensitivity to market risk (S).

According to new regulations laid down in the Circular, the criterion (S) is added to the system of credit rating criteria and more entities will be ranked (currently, only joint-stock commercial banks are ranked).

The credit rating regulations shall not apply to the entities prescribed in Clause 2 Article 2 of Circular No. 52/2018/TT-NHNN. Based on the score that a credit institution or foreign bank branch has achieved, it shall be ranked: Excellent (A), Good (B), Average (C), Fair (D) or Poor (E).

Circular 52 will be applied to the credit rating of credit institutions and foreign bank branches as of 2019 and supersedes Decision No.06/2008/QDNHNN dated 12 March 2008.

USE OF FOREIGN CURRENCY IN VIETNAM On 29 March, the State Bank of Vietnam issued Circular 03/2019/TTNHNN amending a number of articles of Circular 32/2013/TT-NHNN on restricting the use of foreign currency in the territory of Vietnam.

Circular 03 supplements certain provisions regarding cases where non-resident aliens are allowed to use foreign currencies within the Vietnamese territory.

Foreign investors are entitled to make a deposit in foreign currency through transfers when participating in an auction in the case of buying shares in state-owned enterprises to be equitised as approved by the Prime Minister.

Foreign investors are also allowed to use foreign currency when purchasing State shares and State

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capital contribution at State-owned enterprises and enterprises with State capital, which will be divested as approved by the Prime Minister.

Foreign investors may also use foreign currency when purchasing shares and capital contributions of State-owned enterprises invested in other enterprises to carry out the divestment of State capital as approved by the Prime Minister.

In the case of winning an auction, foreign investors shall transfer their investment capital according to the provisions of law on foreign exchange to pay for the value of the shares and capital contribution. If they fail at auctions, they are eligible to transfer abroad the amount of deposits or collateral in foreign currencies after subtracting related arising expenses (if any).

The new Circular will take effect from 13 May 2019.

POLICY UPDATE

T HO NG TAN

Highest credit growth capped at 15 percent The State Bank of Vietnam (SBV) has assigned a credit growth limit to each commercial bank in 2019, with priority given to those who met Basel II’s capital safety and risk management standards ahead of schedule.

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ccording to current regulations, the Central Bank must set a credit growth limit for the entire year for each bank – depending on its health – to ensure the credit growth target of the entire banking system during the year. For 2019, this limit is 14 percent.

This year, the highest credit growth limit of 15 percent was assigned to the group of banks which met the Basel II’s standards earlier than the SBV’s deadline of 2020. The remaining banks, meanwhile, were allocated a lower rate of below 12 percent.

Last year, most banks were assigned higher credit growth limits, ranging from 14 to 16 percent.

The credit growth target of the entire banking system and of each bank has tended to slow in the past two years.

Experts attributed the slowdown to the SBV’s policy changes. Previously, due to the underdevelopment of the local stock market, banks, which should act only as intermediaries in the monetary market, had to function to fund medium- and long-term capital for the economy.

However, the SBV has tried to gradually change the role of banks so as to make them fund only short-term capital for the economy through the provision of working capital loans for businesses and households. To make the change, the SBV required banks to lower the ratio of short-term funds for medium and long-term loans from 45 percent in 2018 to 40 percent since early this year.

Experts agreed with the credit growth slowdown, saying it was necessary to improve banks’ credit quality and risk management.

To offset the revenue reduction from lending activities, a number of banks said they plan to increase profits through cutting operating costs and promoting digital services.

Developing digital banking combined with retail banking in a potential

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market of 95 million with a high percentage of young people means commercial banks are quickly accumulating a customer base and large payment needs, Thành said.

The focus on digital banking combined with retail banking has also helped some banks, such as BIDV, Vietcombank and Techcombank, to rapidly increase the number of individual customers in recent years, which has also contributed to raising the banks’ current account savings accounts (CASA) significantly.

Reports showed some banks last year raised CASA to 28-30 percent in the total structure of deposits. The large proportion of low-interest rate deposits has helped banks reduce mobilisation and operating costs, increasing profits and improving marginal interest in lending.

PARTNERS

BI NH PHAN

Building trusting relationships

Workers package products at Sao Thai Duong company

BIDV has increasingly demonstrated its important role in providing loans to businesses, from Stateowned enterprises to larger corporations.

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he market share of small and medium enterprises (SMEs) is increasing and BIDV has received recognition from a number of SMEs for the services it provides.

Through the efforts of the whole system, by the end of 2018 BIDV was serving more than 261,000 SMEs, accounting for nearly 40 percent of

the total number in Vietnam and equal to an on-year increase of 12 percent.

In recent years, BIDV has effectively implemented SME credit orientation, resulting in its lending of VND250 trillion (USD10.8 billion) to the SME segment and enabling it to maintain the leading position in SME credit scale in Vietnam’s banking system.

According to Mr. Tran Van Nam, director of Hanoi Electric Power Transformer Manufacturing Joint Stock Company (MBT), BIDV has provided the company with significant support since the early days of its establishment.

MBT has become one of the leading companies in manufacturing industrial equipment (particularly transformers)

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in Vietnam, providing synchronous solutions for transformers and electric cabinets for large projects, residential areas and industrial zones. In 2018 the company’s revenue reached approximately VND650 billion (USD28 million).

Mr. Tran Van Bac, project deputy director, introduced a new factory which opened in mid-2016 and is located in an area of more than 5,000 m2. Financed with a total investment of VND48 billion (USD2.1 million), with the majority coming from BIDV, MBT had been able to increase the output of its transformer manufacturing to nearly 100 percent featuring the newest modern production line and technology from Italy valued at over VND22 billion. Close to this project, another factory area of nearly 6,000 m2 specialising in industrial electric cabinets assemble has provided

PARTNERS

Besides a transaction office in Hanoi, Sao Thai Duong has a main factory in Dong Van Industrial Park, Ha Nam with floor area of 7,000 m2, factory area of 15,000 m2, and capacity of 23-25 million products annually.

From being completely dependent on the pharmacy distribution chain, the company has developed its own distribution system along with opening thousands of pharmaceutical stores nationwide.

A worker is working at MBT's factory

equipment for significant projects, gaining the trust not only of electricity companies in Vietnam but also FDI enterprises worldwide. The company's distribution network covers 36 cities and provinces.

Reflecting on the cooperation process, MBT managers expressed their appreciation of BIDV for providing a wide range of services and quick procedures to disburse loans, open L/C and guarantee letters. Mr. Bac emphasised: “Thanks to the frequent and active support of BIDV, MBT has achieved a growth rate of 20 - 25 percent revenue regularly over the past years.”

Another long standing SME customer of BIDV is Sao Thai Duong Joint Stock Company, which is famous for its pharmaceutical and medicinal products including Golden Star tiger

balm, mouthwash, toothpaste and shampoo and its modern pharmacy.

According to Mrs. Bui Thi Song Son, deputy general director for production and research of Sao Thai Duong, the company has been closely associated with BIDV since 2008. With 11 years of regular use of banking products, mostly from BIDV, the managers of the company are wholly satisfied with the services provided by BIDV, appreciating their quick procedures, disbursement and L/C opening process. Thanks to BIDV’s continuous support, the company has achieved impressive growth: revenue increased from VND100 billion (USD4.3 million) in 2008 to nearly VND500 billion (USD21.6 million) in 2018; the number of employees increased from 200 to the present number of 600; and production increased from just 5 to more than 100 different products.

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Sao Thai Duong JSC’s recent project involves the construction of a new factory worth up to VND1,000 billion (USD43.2 million) that is five times bigger than the current factory. It promises to apply completely new technologies such as biotechnology and nano in order to meet the export standard required by EU markets.

The company leaders affirmed their strategy to work closely with BIDV, as one of the most reliable financial and banking solution providers.

These are just two examples of the thousands of SME customers who have grown their business with BIDV in the past 62 years of the bank's history.

With the strategy "Accompanying small and medium enterprises", BIDV has been continuing to develop many product mechanisms, incentive programs and effective solutions for SME customers across different businesses and regions.

PARTNERS

HA I DANG

Growing amid a challenging market Despite lower than expected non-life insurance market growth, BIC and its joint venture successfully achieved the business plan targets for 2018.

OVERLOOK OF THE NON-LIFE INSURANCE MARKET In 2018, non-life insurance companies continued to face difficulties. In particular, automobile sales fell short of meeting targeted growth for the year.

According to the Vietnam Automobile Manufacturers’ Association (VAMA), total sales in 2018 across the automobile market increased by just 5.8 percent from 2017. Disbursement of state investment capital was also slower compared to the year plan. According to the Ministry of Finance, the estimated state capital investment in 2018 was only 59.9 percent compared to the National Assembly's plan and 61.6 percent compared to the Prime Minister's plan.

These significantly affected traditional insurance lines which account for a large proportion of the total non-life insurance premium revenue of the market. The growth rate of the non-life insurance market in 2018 was around 11 percent.

Last year, the total direct premium of

the non-life market was estimated to be VND46,000 billion (USD2 billion), up 9.9 percent compared to 2017.

Leading the market in terms of direct premiums was Bao Viet with a 21.3 percent market share (VND9,728 billion), an increase of 20.83 percent compared to 2017. PVI was the second with a 14.9 percent market share and estimated direct premium of VND6,791 billion, up 1.53 percent compared to 2017. BIC’s direct premiums of VND1,778 billion represented the eighth highest market share. ratio was 42.62 percent.

A number of insurers experienced very high growth rates in direct premium such as VBI (growth of 62.94 percent), SGI (58.5 percent) and BSH (43.95 percent).

In terms of business line, motor vehicle insurance accounted for the largest proportion of total direct premiums (VND14,142 billion, accounting for 30.95 percent). This was followed by health insurance (VND14,044 billion, accounting for 30.74 percent), property insurance and casualty insurance (VND6,233 billion, accounting for 13.64 percent), followed by fire insurance (VND4,216 billion, accounting for 9.23 percent) and cargo insurance (VND2,560 billion, accounting for 5.6 percent).

Non-life insurance claim losses in 2018 were estimated at VND19,500 billion (USD8.4 billion) and the direct loss

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POSITIVE BUSINESS PERFORMANCE IN INSURANCE Despite a challenging market, BIC strived to innovate and improve in all aspects including its organisational model, business process, service quality, network and promotion of bancassurance, posting positive figures as a result.

In 2018, the total insurance premium of BIC’s parent company reached VND2,105 billion, up 16.4 percent compared to 2017, fulfilling 101.7 percent of the year plan. The company’s consolidated pre-tax profit reached VND202.5 billion, equal to an on-year increase of 8.6 percent, completing 106.6 percent of the year plan.

BIC’s main business lines in 2018 were motor vehicle insurance, property

PARTNERS

Company (LVI) and Cambodia-Vietnam Insurance Plc. (CVI), both of which have achieved many positive results.

In Laos, LVI’s written premium in 2018 was USD13.3 million, fulfilling 103.6 percent of the year plan. LVI’s pre-tax profit was USD551.4 thousand, meeting 100.3 percent of the 2018 plan.

BIC head office in Hanoi

insurance, and health and personal accident insurance. Property, health and personal accident insurance in particular were the main growth drivers for 2018.

particular, bancassurance growth in 2018 was 50.5 percent, and the average growth rate for the bancassurance channel over the past three years (20152018) was 45 percent.

Bancassurance, online sales, and foreign broking showed impressive growth. In

Currently, BIC has two overseas joint ventures, including Lao-Viet Insurance

Bao Viet, 21.3% Others, 27.1%

PVI, 14.9% BIC, 3.9% MIC, 4.2% PTI, 8.7%

VASS, 5.3% PJICO, 6.0%

Bao Minh, 7.0%

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In 2018, CVI continued to be the leader in the field of aviation insurance in the Cambodian insurance market. CVI is currently the insurer for nine airlines in Cambodia. To achieve this success, CVI maintains good relationships with and receives support from the international reinsurance market. The CVI management teams also foster and maintain good relationships with the Aviation Ministry.

CVI grew to become the third largest non-life insurance company in Cambodia by GWP, steadily improving from number five in 2016 and the fourth ranked general insurer in 2017.

In 2018, CVI continued to maintain revenue growth, increasing by 23.98 percent and outperforming the market growth of 16 percent.

In 2018, A.M. Best upgraded BIC's Financial Strength Rating from B+ to B++ and its Long-Term Issuer Credit Rating from bbbto bbb. The outlook of these Credit Ratings was Stable.

PARTNERS

M ANH HAI

BIC SHAKES HANDS WITH SGI TO BOOST GUARANTEE INSURANCE

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IDV Insurance Corporation (BIC) and Seoul Guarantee Insurance (SGI) signed a memorandum of understanding on developing guarantee insurance products in Vietnam.

potential for guarantee insurance development as the macro economy is forecast to grow stably, leading to an increase in demand for guarantee insurance. “Guarantee insurance will offer another channel ensuring financial safety for customers, and contribute to the growth of the insurance sector and the national economy,� said An. SGI was established in South Korea in 1969. As a comprehensive guarantee service provider, SGI is currently the domestic market leader in the surety and credit insurance industry. The company became the first foreign non-life insurance branch licensed to operate in Vietnam, officially establishing its branch in Hanoi in 2014.

BIC chief executive officer Tran Hoai An said guarantee insurance is a new sector in Vietnam, with few insurance firms offering these services, and legal regulations have yet to be completed.

He however said Vietnam has great

BSL FOSTERS COOPERATION IN FINANCE LEASING

H A I NH U

BIC is among the top 10 leading nonlife insurance companies by direct premium market share and among the top three best performing insurers in the market.

construction machinery market in Japan with super fuel-saving features, easy to replace components, reduced regular maintenance costs, and a super-durable ISUZU engine which can only be produced in Japan, making it an ideal machine for construction projects in Vietnam.

The construction market is forecast to see positive developments in 2019.

Against this backdrop, BSL has actively coordinated with major distributors in Japan to deploy a cooperation plan, facilitating entrepreneurs to approach medium and long-term capital.

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n 9 April, BIDV - SuMi TRUST Leasing Co., (BSL) and VITECHCO Co., Ltd. - the sole authorised agent of Japanese Sakai roller manufacturer - signed a

comprehensive cooperation contract to provide financing for customers buying Sakai rollers in Vietnam.

Sakai rollers are well-known in the

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By using BSL's services, customers buying construction machinery will have more flexible financial resources without the need for bank loans, a flexible leasing period, high financing rate, and streamlined application procedures. BSL can even open letters of credit to import leased assets for customers to support SMEs that cannot perform this operation.

MARKET MOVEMENTS

T U AN HAI

Banks give optimistic growth forecasts demand for banking services will increase, and clients will have the biggest demand for acquiring loans, making deposits and using payment services.

The banks expect a growth rate of 13.74 percent for capital mobilisation and a credit growth rate of 14.51 percent by the end of this year, with faster growth in mobilised capital and credit in Vietnamese dong.

The institutions said the business environment for them was improved in the first quarter and more improvement was expected for the entire year.

Credit institutions are optimistic about growth prospects for 2019

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majority of credit institutions in the country said their business performance in the first quarter of 2019 was better than that of the same period last year, according to the State Bank of Vietnam’s March survey released recently.

Under the business sentiment survey, which covers domestic and foreign commercial banks operating in the country, many banks also expect an upward trend in their business in this quarter and the whole of 2019.

According to the survey, 70.4 percent of credit institutions said their business situation improved in the first quarter of this year, of which 14.3 percent saw ‘significant improvement’.

For the second quarter, 80.6 percent of credit institutions expect a better result, a higher rate than that of the previous survey conducted in December last year.

A total of 88 percent of institutions hoped the situation would continue to get better this year, of which 29 percent anticipated ‘significant improvement’.

A majority of the institutions said the banking system’s liquidity in terms of both Vietnamese dong and foreign currencies remained strong and the positive trend would continue in the coming quarters of the year.

Roughly 80.7 percent predict the

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The survey showed that while 67.01 percent forecast overall risks of all client groups will remain stable in 2019, 14.43 percent said the risks are likely to decrease while 18.56 percent were concerned the risks would increase.

With the risks that are forecast, the institutions expect the rate of nonperforming loans of the banking system’s total outstanding loans would be kept at a low level in 2019 and tend to decline against 2018.

With optimism about growth prospects for 2019, credit institutions also forecast the industry’s labour market will see positive changes in the coming months, with 61.23 percent of them planning to recruit more employees in the second quarter of the year.

MARKET MOVEMENTS

T U E NAM

Vietnam ratings raised after nine years S&P Global Ratings agency expects Vietnam's economy to continue its rapid growth, exemplifying gradual improvements in the policymaking settings in the country and underpinning credit metrics.

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MARKET MOVEMENTS

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n 5 April 2019, S&P Global Ratings raised its long-term sovereign credit rating on Vietnam to 'BB', from the previous rating of 'BB-'. The rating firm also affirmed its short-term rating at 'B'.

The country’s outlook remains stable.

In addition, S&P revised its transfer and convertibility assessment on Vietnam upward to 'BB', from 'BB-'.

The stable outlook reflects S&P’s expectation that Vietnam's economy will continue to expand rapidly,

exemplifying gradual improvements in its policymaking settings and underpinning credit metrics.

The upgrade comes as a result of continued improvements in the government's institutional settings, which S&P believes are supporting consistently strong economic growth and development outcomes. These improvements are weighed against Vietnam's lower middle-income economy, legacy banking sector weaknesses, and limited fiscal

space. Vietnam's external settings, which feature broadly balanced external accounts, strong foreign direct investment (FDI) inflow, and a manageable external debt burden, provide further support to the rating.

According to the rating firm, the Vietnamese government's socioeconomic development plans provide useful policy anchors that have served to improve macroeconomic stability and inflation management over recent years. At the same time, the economy

Nhat Tan bridge, Hanoi

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MARKET MOVEMENTS

has achieved impressive development outcomes, including consistently high real GDP growth. The government has built a strong record of promoting balanced economic growth, with real GDP growth having averaged 6.2 percent annually since 2012.

Importantly, the Vietnam government has delivered strong development outcomes since the global financial crisis and its own domestic banking sector crisis at the beginning of this decade.

The government has developed a track record of regular, peaceful transitions of power, ensuring stable policymaking settings through multiple leadership renewals. S&P believes the government's accession as a founding signatory to the Comprehensive and Progressive Agreement to TransPacific Partnership (CPTPP) in late 2018 reflects its willingness to adopt and implement necessary reforms,

especially in the state sector, over the long term.

According to the World Bank's Worldwide Governance indicators, the Vietnamese government's rankings improved for the following: effectiveness (53rd percentile in 2017 from 47th in 2007), political stability and absence of terrorism (60th percentile in 2017; 52nd in 2007), and rule of law (56th percentile in 2017; 38th in 2007). Meanwhile, Vietnam's ranking in the World Bank's annual Doing Business survey has surged to 69th in the world this year, from 99th in 2013, with strong gains in contract enforcement and regulatory environment. Vietnam's per capita income has increased to an estimated USD2,572 in 2018 from approximately USD1,754 in 2012.

S&P observes the tangible improvements as evidence that Vietnam's institutions are

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strengthening. The agency believes these improvements will support strong and balanced economic growth over the coming years.

Although Vietnam has a lower middleincome economy, with GDP per capita that S&P projects at approximately USD2,695 in 2019, the economy is relatively diversified. Continued improvements in macroeconomic stability have supported a strong performance in the sizable foreign-owned and export-focused manufacturing sector (electronics, mobile phones, and textiles). The robust FDI-oriented economy is fueling stronger domestic activity, particularly through the private consumption channel. Low household leverage provides space for this trend to continue.

Though S&P expects Vietnam's strong economic performance to continue over the next few years, the country faces a variety of domestic

MARKET MOVEMENTS

Ho Chi Minh City, Vietnam

and external risks. On the external front, trade disputes between major economies could undermine export momentum over the short term. Given the extraordinarily large share of trade relative to the size of Vietnam's economy, the country would face additional headwinds in the event of an acute external slowdown.

Domestically, elevated fiscal deficits and public indebtedness mean that new sources of funding will likely be needed to continue to spur strong infrastructure investment. Relatively weak banks in Vietnam, characterised by low levels of capitalisation and poor asset quality, also pose a degree of risk to the economic outlook.

S&P expects the Vietnam Asset Management Company (VAMC) to begin to issue debt for the funding of bad asset purchases in 2019. The rating firm has included this debt in its calculation of general government indebtedness in the forecast years. The

VAMC was empowered by legislation in 2017 to purchase and resolve non-performing assets with cash; the VAMC's previous process relied solely on exchanging special bonds for troubled assets from banks. Over time, this should contribute to the development of more sophisticated bad debt markets in Vietnam, contributing to greater financial market stability.

Vietnam's external metrics are supportive of the rating. Its current account is likely to remain in modest surplus annually to 2022. Robust manufacturing and services (mainly tourism), exports, and large (and rising) remittances will counteract strong growth in the import of capital and consumption goods.

Strong FDI in manufacturing continued in 2018 despite a more challenging external environment; this speaks to the resilience of Vietnam's

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investment environment. The country's competitive unit labour costs, improving educational standards, and constructive demographics imply continued growth in FDI and goods exports. Participation in free trade agreements, including the recently established Comprehensive and Progressive Agreement for TransPacific Partnership (CPTPP), could provide further upside to Vietnam's export earnings. S&P expects Vietnam to continue to pursue enhanced market access via bilateral and multilateral free trade initiatives, including the Regional Comprehensive Economic Partnership.

Vietnam's rating upgrade comes as a result of continued improvements in the government's institutional settings, which S&P believes are supporting consistently strong economic growth and development outcomes.

MARKET MOVEMENTS

VA N HOAI

Momentum for

regional growth Vietnam’s economy is expected to maintain strong growth momentum though moderating amid the weakening global outlook.

SLOWER GLOBAL DEMAND LOWERS DEVELOPING ASIA'S GROWTH PROSPECTS According to ADB, the backdrop of slowing global demand and persistent trade tensions has softened growth within Asia. The latest Asian Development Outlook (ADO) 2019 produced by ADB forecasts that growth in the region will slow to 5.7 percent in 2019 and 5.6 percent in 2020. Developing Asia’s growth in 2018 was 5.9 percent.

“Growth overall remains solid with domestic consumption strong or expanding in most economies around the region. This is softening the impact of slowing exports,” said ADB chief economist Mr. Yasuyuki Sawada.

“Uncertainty clouding the outlook remains elevated.”

Trade conflict between the United States (US) and the People’s Republic of China (PRC) is still the primary risk to the region’s economic outlook with protracted negotiations propelling further global trade uncertainty.

Other risks include a potentially rapid slowdown in advanced economies and the PRC, as well as financial volatility.

South Asia overall will outperform other sub-regions and is forecast to expand 6.8 percent this year and 6.9 percent in 2020.

Growth in the Pacific will also rebound from 0.9 percent in 2018 to 3.5 percent in 2019 as liquefied natural gas production in Papua New Guinea, the sub-region’s largest economy, returns to full capacity following the earthquake of 2018. Growth is expected to be 3.2 percent in 2020.

Lower oil prices, alongside slower growth in the Russian Federation, will weigh on economies in Central Asia.

Growth in the sub-region is forecast to slow to 4.2 percent this year and in 2020.

According to the report inflation remains low, with stable food and fuel prices meaning headline inflation will be steady at 2.5 percent in both 2019 and 2020.

The economic performance in Vietnam reached a sweet spot in 2018, driven by strong exports and domestic demand

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While Asia’s emerging market currencies improved somewhat in late 2018, research prepared for the ADO noted that exchange rate volatility can be problematic, particularly for

MARKET MOVEMENTS

the European Union, may stimulate investment in the near term as foreign enterprises explore the expanding business opportunities that Vietnam offers.

countries that rely on US dollardenominated debt. Suitable monetary and macroprudential policies, regional policy dialogue, and deeper domestic capital markets can mitigate the impact from tighter external funding conditions.

VIETNAM - ANOTHER YEAR OF STRONG GROWTH Despite these trends, ADB forecasts that Vietnam will retain strong growth compared to other countries in the region. The economy experienced another year of strong growth as it accelerated from 6.8 percent in 2017 to 7.1 percent in 2018, the highest growth seen in 11 years. Solid growth in exports of goods and services and continued strength in domestic demand underpinned last year’s expansion. Private consumption, the largest component of GDP, accounted for most of the GDP growth seen last year.

“The economic performance in Vietnam reached a sweet spot in 2018, driven by strong exports and domestic demand,” said ADB country director for Vietnam Eric Sidgwick.

With growth in the global economy and world trade forecast to slow, growth in Vietnam is forecast to moderate but remain strong at 6.8 percent in 2019 and 6.7 percent in 2020. Growth will continue to be broad-based, underpinned by export-oriented manufacturing, inward FDI, and sustained domestic demand.

According to ADB, ongoing reforms to improve the business environment should encourage private investment, as should efforts to forge stronger ties with partners around the world through various trade agreements. Vietnam’s ratification of the Comprehensive and Progressive Agreement for TransPacific Partnership in 2018, and its expected free trade agreement with

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By sector, manufacturing and construction will slow but still maintain solid expansion, with substantial FDI likely to flow into export-oriented manufacturing. The purchasing managers’ index points to rising orders in manufacturing.

Services will benefit in 2019 from continued growth in retail and wholesale trade, and in banking and finance. An expected 16 percent annual increase in tourist arrivals this year and next, though slowing from growth in 2018, should support tourism-related businesses such as hotels, restaurants, and transportation.

Meanwhile, agriculture will likely expand close to the government’s target of 3 percent per year.

Inflation is expected to continue to average 3.5 percent in 2019 but accelerate to 3.8 percent in 2020. The announcement that the US Federal Reserve will no longer raise its policy rate in 2019 is likely to relieve pressure on the Vietnamese dong and inflation, as will lower international oil prices.

However, according to ADB, external risk to the outlook would be a sharper slowdown in the major economies, including the European Union, the US, Japan, and the PRC, Vietnam’s key trade partners. Domestic risks could stem from lackluster progress in reforming state owned enterprises.

INSIGHTS

NGU Y EN QUANG

Vietnam’s retail market – high appeal for investors With the fastest-growing middle class in Southeast Asia, Vietnam has been experiencing phenomenal growth rates in its retail sector, becoming an ideal investment hub for both domestic and foreign investors.

VIETNAM’S GROWTH DRIVER According to a newly released report on Vietnam’s retail market published

by Deloitte, the rise of e-commerce and digital retail channels in Vietnam is one of the top trends to watch, given the country’s relatively young population demographics and robust consumer spending.

also possesses a relatively young population, with 40 percent below the age of 24. With their greater propensity for digital technology, many of these younger consumers are driving the rapid expansion of Vietnam’s e-commerce market, as they spend more time shopping on their digital devices than in physical stores.

Typically hosted on social media platforms such as Facebook, Instagram, and Zalo, these platforms offer buyers the ability to interact directly with their sellers, and to share information, such as photos, reviews or recommendations with one another in real-time.

In recent years, Vietnam has been experiencing rapid retail growth.

From 2013 to 2018, the retail sector recorded a compound annual growth rate (CAGR) of 10.97 percent. Total retail revenue is expected to reach USD180 billion by 2020, an increase of 26.6 percent from 2018. With the influx of investment into the sector, it is poised to witness further growth in the near future.

Vietnam’s retail sector is benefiting from the rise of the fastest-growing middle class in Southeast Asia – the population of which is expected to reach 33 million by 2020, up from 12 million in 2012 – whose growing affluence is driving increasing expenditure.

At the same time, the country

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BIDV REVIEW

Underpinning this rapid growth in e-commerce is the robust spending behaviour of Vietnamese consumers.

In 2018, the average annual spending for an online shopper in Vietnam was USD350, nearly double 2017’s figure of USD186. In addition, online conversion rates, broadly defined as the proportion of visits to online websites that have been converted to sales, are high in Vietnam. According to one survey, Vietnam posted the highest conversion rates amongst six Southeast Asia markets, with a conversion rate that was 30 percent higher than the regional average.

By 2025, Deloitte expects Vietnam’s

INSIGHTS

e-commerce market size to be second only to Indonesia in the Southeast Asia region.

INVESTMENT TREND SUPPORTED BY POLICIES To promote the growth of Vietnam’s retail sector, the government has introduced a number of new regulations to attract investment and enhance links between local enterprises and global markets.

In 2014, a new Law on Investment was introduced to increase the ease of doing business in Vietnam by relaxing certain rules for foreign investors.

The following year, as part of its commitment to the World Trade Organisation, Vietnam officially allowed foreign retailers to establish wholly owned businesses. Decision 1513/QD-TTg was made to approve the scheme promoting Vietnamese enterprises’ direct participation in foreign distribution systems until 2020.

The year 2016 marked a renovation with the release of Decision 1563/ QD-TTg to approve the e-commerce development plan for the 2016-2020 period. As a result, in 2017, 54 out of 63 provinces issued their specific e-commerce development plans for the 2016-2020 period.

In 2018, Decree 09/2018/ND-CP on the Law on Commerce and the Law on Foreign Trade Management was issued to incorporate several favourable changes for retailers establishing or expanding their businesses in areas pertaining to the trading of goods by foreign investors and enterprises.

According to Deloitte, as a result of the favourable investment climate, both local and foreign retailers have been scaling up their operations in Vietnam through the adoption of various expansion strategies, including M&A, franchising, and other partnership models. Local player Vingroup, for example, has been acquiring smaller competitors – including Fivimart and Vien Thong A, in addition to its earlier acquisitions of Ocean Mart, MaxiMark, and Vinatexmart – in a bid to grow its retail revenues, which are expected to contribute up to 50 percent of the conglomerate’s total revenues, up from its current 20 percent.

At the same time, foreign investors have also successfully secured a number of M&A deals to further their expansion plans in the market. Several high-profile transactions include the purchase of a 49 percent stake in Nguyen Kim and the acquisition of Big C Vietnam by Central Group; the acquisition of METRO Cash & Carry Vietnam by TCC Group; and the purchase of a 20 percent stake in Bibo Mart by ACA Investments.

Currently, Vietnam’s retail market is attracting the attention of major foreign market players such as 7-Eleven, AEON (Japan), Big C and B’s Mart from Thailand, Circle K (US) and Lotte (Korea), as well as Singapore’s Guardian and Shop & Go.

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INSIGHTS

Vietnam outperforms in creating a cashless economy

A woman is using her phone to scan QR code via BIDV SmartBanking, a mobile banking app developed by BIDV

Governments across Southeast Asia are pushing ahead with efforts to create cashless economies, with less developed countries such as Vietnam and Thailand leapfrogging richer ones including Singapore and Malaysia in electronic payments.

A

ccording to Nikkei Asian Review, Vietnam and Thailand are experiencing a boom in mobile payments as more people use e-wallets to pay for goods and services without going through an intermediary such as a bank.

Vietnam has been promoting electronic payments since 2008. Only about 40 percent of Vietnam's 95 million people have bank accounts, mostly in urban areas, while there are around 120 million mobile phone subscriptions, and the telecoms network covers the entire country.

Local information technology and telecom companies, including Vietnam Posts and Telecommunications Group, Viettel and FPT, have introduced e-wallets and are encouraging people

to put away their cash. But until recently, none of these companies had made much headway.

Now things are taking off, with the number of people making mobile payments in stores growing faster in Vietnam than elsewhere in Southeast Asia, according to a recent PwC report. The percentage of consumers in Vietnam using mobile payments increased from 37 percent in 2018 to 61 percent in 2019. “Mobile payment services are also gaining widespread acceptance, especially in emerging regions that have leapfrogged past landline-based telephone systems and gone straight to mobile and smartphones,� the report said.

Payment app Momo, one of the

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BIDV REVIEW

most popular e-wallets in Vietnam, registered its 10 millionth customer in November, a tenfold increase compared with just two years ago. The service allows users to pay bills, send money or make purchases at more than 100,000 payment points throughout the country, including Circle K and Ministop shops, two Japanese-owned convenience store chains.

Momo continues to attract funding for its expansion. In January, it held a Series C funding round worth about USD100 million, led by global private equity firm Warburg Pincus.

In 2016, it secured USD28 million from Goldman Sachs and Standard Chartered Private Equity.

INSIGHTS

Bank, Kasikornbank, Siam Commercial Bank and Krung Thai Bank -- reduced fees for account holders conducting internet and mobile transactions at any Thai bank. Some smaller banks followed suit.

These trends are in line with the Thai government's plan to help the country's cash-driven economy become cashless. More digital payments would generate a record of transactions that could help small and midsize businesses access bank loans. They would also discourage bribes and other types of corruption.

More developed countries in the region, such as Singapore and Malaysia, saw lower penetration rates in mobile payments despite government efforts to wean people off cash. Cash and checks still account for 40 percent of Singapore's payments, as the citystate has an extensive ATM network.

In 2017, there were more than 65 ATMs per 100,000 adults in Singapore, according to the World Bank.

Another Vietnamese mobile payments startup, ZaloPay, has grown rapidly since its launch in 2017. It relies on a network of 100 million users registered with its parent company VNG, an online entertainment and social media platform. VNG is considered Vietnam's first unicorn - a term used to describe unlisted companies valued at USD1 billion or more.

Even Singapore's sovereign wealth fund GIC is betting on Vietnam's mobile payments market. It was the lead investor in a round of financing for Hanoi-based VNPay, according to a report published earlier this month by online news website DealStreetAsia.

The report added that the round raised

"upwards of USD50 million�.

In January the Vietnamese government issued a document asking the central bank to come up with new ways to encourage the use of e-wallets, such as allowing people to add money to their wallets without going through a bank account. It also approved a pilot project that enables money transfers and purchases through mobile phone accounts for small transactions.

Thailand has the largest penetration rate in the region at 67 percent. Mobile banking is flourishing among Thais, many of whom do not have credit cards or checkbooks. Last March, the country's four largest banks -- Bangkok

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APRIL 2019

However the government is not giving up. Last year, it announced that it aims to further reduce the use of cash and make Singapore check-free by 2025.

Last year, the Association of Banks in Singapore launched PayNow, a service that allows bank account holders to send one another money using mobile phone numbers instead of account numbers.

BIDV, the largest lender in Vietnam, has paid strong attention to cashless payment. The bank’s outstanding apps BIDV SmartBanking, BIDV Pay+, and QR Code have provided great convenience in payment to customers. Last year, the bank also cooperated with Vietnam Taxi Alliance to provide online payment services by integrating the EMDDI app in BIDV SmartBanking.

INSIGHTS

A NH TRAN

Smart investment In the current investment climate, many investors are speculating rather than investing. BIDV Review discusses how these investors can change their behaviour.

CURRENT TRENDS Vietnam’s stock market has developed constantly in terms of scale, number of participating investors and listed companies since its establishment in 1996, with some of these companies recording impressive growth.

Despite such remarkable progress in the market, how many investors have actually benefited from it? This seems to be a paradox. For nearly 20 years, despite some strong fluctuations, the overall trend of the Vn-Index has been upwards.

Shares of outstanding companies such

as Vinamilk, Hoa Phat and PNJ have increased by 10-15 times compared to 10 years ago. In theory, investors would earn the equivalent increase simply by holding these stocks for years. However, this has not been the case, the main reason being that Vietnamese investors have been speculating, instead of investing in the market.

Speculators buy and sell in the market with little to no understanding about the particular company. To realise an immediate small profit, they may impulsively sell a promising stock which may turn out to be a lucrative

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BIDV REVIEW

investment for years afterwards.

They also tend to put money into the market with no specific financial goal.

Many people invest in the stock market with a vague purpose of making some profit out of it or of getting rich quickly. They have almost no plan for how long to invest and what outcome to expect. In addition, determining risk appetite and balancing between spending and maintaining idle funds for investment are underestimated.

Speculators constantly trade to “buy low, sell high”, however this habit won’t help them to make more money. In the long run, they are likely to waste significant amounts of money on trading fees and also their energy on keeping up with the market every single day.

INSIGHTS

INVESTING, NOT SPECULATING In the long term, speculating on one stock at a time will gradually be replaced by portfolio investment with personalised terms, financial objectives and risk appetite. Clear demands such as: “With VND2 billion (USD87,000), five year term, and risk tolerance of 5 percent, what portfolio is right for me so I will gain a specific amount of money to fund my children’s overseas study?”, or “How can I start investing from now to receive a monthly income of VND10 million (USD430) from my investment after retirement?” will soon be common place.

What matters most to an investor is achieving their financial goal.

Therefore, they often spend less time in front of a price board and make fewer transactions than a speculator.

The question is, how to change

one’s behaviour from speculating to investing? Firstly, one must gain knowledge about firm valuation.

Secondly, one must understand their own needs, set a goal, and determine their risk appetite in order to put money into the right baskets. Last but not least, having a strategy for the investment to prevent emotional involvement is crucial.

Recently BIDV Securities Company (BSC), a subsidiary of BIDV, launched a smart online investment platform, BSC I-Invest, aiming to help its customers become smart investors in the market.

The platform promises to outperform the current costly, time-wasting and ineffective way of investing.

According to the securities company, BSC i-Invest provides specific investment portfolios based on customer’s objectives and strategy, particularly: Thematic investing:

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advising customers to invest in a topic-specific portfolio. This product is designed for investors who are interested in a certain business sector or a certain event. Some examples of topics are banking stocks, state-capital divestment, and trade war, among others; Goal based investing: advising customers to invest in a portfolio based on the amount of capital, term, and level of risk appetite, in order to help them achieve a target amount at a certain date; and Risk based investing: advising customers to invest in a portfolio consistent with their risk appetite.

Customers simply choose one out of the portfolios that BSC has already designed.

The stocks selected are guaranteed market liquidity. BSC offices will track these portfolios closely and make any adjustments as needed. Customers can also create and manage their own portfolio via BSC i-Invest to achieve longterm goals in the future.

INSIGHTS

Policies promote non-cash payment in Vietnam RESOLUTION 02/NQ-CP DATED 01 JANUARY 2019 ON CONTINUING THE EXECUTION OF MAJOR TASKS AND SOLUTIONS FOR IMPROVING THE BUSINESS ENVIRONMENT AND INCREASING NATIONAL COMPETITIVENESS IN 2019 WITH VISION TO 2021 Before the third quarter of 2019, the State Bank of Vietnam has been requested to submit a plan to the government relating to the following areas: allowing cash deposits into electronic wallets without the need for bank account transactions; determining the maximum amount of money allowed for loading onto e-wallets and monthly transaction limits; requesting commercial banks and payment intermediaries to apply a QR code to ensure compatibility between payment solutions on QR code; and coordinating with the Ministry of Finance to list and publicise the list of transactions required to pay via banks and propose to the government to amend regulations to encourage non-cash payments for real estate transactions.

DECISION NO. 637/QĐ-NHNN DATED 31 MARCH 2017 TO PROMULGATE THE PLAN OF IMPLEMENTING DECISION NO. 2545/QĐ-TTG In order to implement the decision promptly and effectively as well as achieve the objectives of the scheme on non-cash payment in Vietnam for the 2016-2020 period, the SBV formulated a plan for implementing the scheme including specified tasks, a roadmap, and time for completion and assigned tasks to each entity and relevant institutions.

DECISION NO. 2545/QĐ-TTG OF THE PRIME MINISTER DATED 30 DECEMBER 2016 ON APPROVING THE SCHEME ON NON-CASH PAYMENT IN VIETNAM FOR THE 2016-2020 PERIOD. The specific objectives include: a) By the end of 2020, the ratio of cash transactions to total transactions is expected to fall below 10 percent; b) Developing payment via point-of-sale terminals; increasing the quantity and value of card transactions via point-of-sale terminal. By 2020, the quantity of point-of-sale terminals is expected to reach 300,000 throughout the market with approximately 200 million transactions per year; c) Promoting electronic payment in electronic commerce; accomplishing the objectives of the Master plan for the development of electronic commerce over the period 2016 – 2020 (100 percent of supermarkets, shopping malls and distribution centres have point-of-sale terminals and allow buyers to use non-cash payment facilities; 70 percent of electricity, water, telecommunications and media service providers accept non-cash payments from users; 50 percent of individuals and households in big cities use non-cash payment facilities in regular shopping; d) Focusing on the development of new payment facilities in rural areas and remote areas to contribute to financial inclusion; improving accessibility to payment services; and increasing the ratio of bank account holders aged 15 and above to at least 70 percent by the end of 2020.

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PRODUCTS & SERVICES

CO NG CHUNG

BIDV wins awards for AI and robotic products In recognition of embedding automation and artificial intelligence in its products, BIDV received several prestigious Sao Khue 2019 awards.

T

he awards came from Vietnam Software and IT Services Association (VINASA) and were presented at an award ceremony in Hanoi, honouring BIDV’s IT products namely Robotic Process Automation (RPA); Remittance Payment for Individual Customers; and Bancassurance System Management (BSM).

The Robotic Process Automation product has been developed using three of the most advanced technologies currently available: robotics, artificial intelligence and optical character recognition. The replacement of manual work with robots has helped BIDV increase labour productivity, save salary costs and promote the automation of its business processes. Robots help save 80 percent of the processing time, and VND2.7 billion in salary costs in this operation every year.

The remittance payment system for individual customers is built based on the open data connection between BIDV and partners across the world, opening an opportunity for users to experience international multi-channel

BIDV receives three Sao Khue awards for its outstanding IT products

services, save costs and shorten turnaround time, and enhance security and the synchronisation of information in BIDV's system. The program was launched in October 2018 and saw the volume of remittance reach VND6.2 trillion at the end of the same year and it is projected to reach VND30 trillion the year following full implementation.

between BIDV and BIC to minimise manual operations and reconciliation, contributing to promoting cross-selling services through the BIDV system, thereby minimising risks. After more than three years since its launch, the program has helped save document management and printing costs in the region of VND3.5 billion.

Bancassurance System Management (BSM) was jointly developed by BIDV and its insurance subsidiary BIC to support digitalisation of the process of issuing insurance, managing customer information and insurance facilities.

The product provides comprehensive financial - insurance solutions for customers. It allows direct connection

Nguyen Thanh Long, director of BIDV IT Centre, said: “The Sao Khue 2019 award is recognition of the continuous efforts of the bank’s employees and IT experts in improving the quality of electronic banking products to meet the increasing needs of users in the digital era”.

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LIFESTYLE

QUY NH CHI

Modern romance in Da Lat Blessed with clement, springlike weather and boasting the imprint of beautiful French architecture, Da Lat has long held high appeal for visitors wishing to escape the hot tropics and enjoy an altogether different atmosphere.

F Lam Vien square

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BIDV REVIEW

amous attractions in Da Lat include Ho Xuan Huong Lake, the Valley of Love and Elephant Falls. However, in recent years, Da Lat has seen a surge of development, with many new attractions opening that are in keeping with the town’s romantic style.

LIFESTYLE

Stairway to heaven

Da Lat train station

DA LAT RAILWAY STATION Da Lat railway station allows tourists to take a 7km route from Da Lat to Trai Mat station. Along the way, visitors can observe the peaceful daily lifestyle of local people, find fresh vegetables and fruits in the local market, and visit Linh Phuoc Pagoda. As the train slowly winds its way along the hillside, visitors are treated to marvellous views of Da Lat from different angles.

LAM VIEN SQUARE Lam Vien Square is located in the middle of flower city, overlooking Xuan Huong lake with a total area of 72,000 m2. The square is adorned

with huge artworks comprising blocks of sunflower shapes and flower buds designed with coloured glass.

The sunflowers are more than 18 metres high, with an area of 1,200 m2, and the interior houses a performing art stage with space to seat 1,500 people. The yellow flower design hugs close to the curved roof, with the pistil design inclined to resemble the sunflower shape. The attraction is proving a popular place for visitors.

STAIRWAY TO HEAVEN Stairway to Heaven is a new attraction at Da Lat’s Sunny Farm. Sunny Farm is a complex comprising a pretty

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homestay and coffee shop which draws many young visitors to the city. Sunny Farm is located in Ward 11, about 7 km from Da Lat City.

The stairway to heaven in Da Lat is made from wood and is painted pure white.

Together with the blue sky, it creates a gorgeous scene bringing another wonderful attraction for visitors.

There are many places to visit in this peaceful, beautiful rural town. Visitors can enjoy the flower valley, strawberry farm, pink heart bridge and hortensia garden. A trip by cable car from Robin Hill to Truc Lam Monastery affords views of the charming city and scenic surrounding landscapes from above.

LIFESTYLE

The M’nong legend of the elephant For the M’nong ethnic people as well as other ethnic groups in Vietnam’s Central Highlands, elephants hold a very important position in their spiritual life.

A

s legend has it, a long time ago there was a large lake located at the peak of Nam Kar mountain, which is home to a wide range of fish, plants and bushes. Out of necessity, a young man residing in the area came and caught fish from the lake for food without knowing that the fish inhabiting the lake were raised by the God of the Mountain.

Upon eating the fish, which had been roasted, the young man felt itchy all over his body and his face and limbs rapidly began to change shape. All of a sudden, his ears spread out as wide as a paper fan. His nose grew up to a metre. His belly grew so big that he could no longer walk on his two feet and he eventually turned into a giant animal, which is now known as the elephant.

The elephant ate so much that the people in the village could not afford to feed it. After much deliberation, the patriarch in the village finally had an idea. Led by him, the villagers made a compound of sticky rice, corn, and cassava which were well cooked and

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then mixed together before being hung on a small bamboo plant. This compound was used to lure the elephant to come and eat.

While the elephant was eating the compound, the patriarch said some magic words to make the elephant

LIFESTYLE

Elephant racing festival in Vietnam's central highlands

think and remember that their food should actually be tree leaves. The elephant then became accustomed to eating leaves and fruit and trekked deep into the jungle to live.

Though living in the wild, the elephant still frequently came back to his old

village to play and protect the villagers from evil powers. When the elephant grew older and eventually passed away, Nguach Ngual, the God that kept control of the elephant, took his tusks and gave them to those who had shown themselves to be good people and were in need.

As the M’nong people believe the elephants have their origins in human beings and are under the control of the God Nguach Ngual, a system of rites has been performed for the elephants since the time they were born or brought back from the jungle to be domesticated. Even when the elephants mature and have long tusks, the cutting of their tusks is done only after their owners or someone with prestige in the village has made offerings to the Gods. The rite of making elephantrelated offerings can be performed in various situations such as before buying and bringing elephants home, admitting them to the villages, naming them and praying for the elephants’ good health.

Nowadays, according to the beliefs and culture of M'nong people, elephants are still considered a symbol of the strength and wealth of the villages. It is customary for M’nong people to tell their offspring about the legend of the elephant as a way of reminding them to avoid causing damage to natural resources and keep maintaining ecological balance.

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LIFESTYLE

PHAN ANH

BIDV employees join the BIDV Smile running competition

BIDV Smile sees runners hit giant park On 6 April in Hanoi’s Yen So Park, the "BIDV Smile" running competition was successfully held with the participation of 1,060 athletes from 43 teams of BIDV.

“B

IDV Smile", the largest running competition for BIDV employees to date, is a practical activity organised to implement the policy of BIDV Service Scheme: "Shift to services, Change to continue leading”.

The run was organised with the aim of raising employees’ awareness of the Service Scheme 2019: "BIDV Smile - Thoughtful, Professional, Efficient".

Through the competition, the whole system is expected to improve its service quality, offering a standardised transaction space, and creating a professional, friendly and responsible image for BIDV. The "BIDV Smile" competition also aims to encourage employees to train to improve their health and fitness, which in turn will help them in their professional life.

Mr. Tran Xuan Hoang, senior executive vice president of BIDV, chairman of BIDV Trade Union, and head of the competition organising board stated: “The competition took place on a track of length 4,400m, which symbolises the target service revenue of VND4,400

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BIDV REVIEW

billion (excluding guarantee fee); the 1,060 participants indicates BIDV’s 1,060 service points; and the number of 27 athletes on each team represents BIDV’s service growth target of 27 percent.”

In addition to the running element, a number of other activities were organised to appeal to a wide range of BIDV staff such as: creating slogans, a photo contest on the BIDV Fanpage to win the "Favourite team" prize; checkingin at the event for the "Most stylish team" prize; and joining a flash mob.

The “BIDV Smile" run proved to be an exciting event. Forty four awards were given to excellent teams and individuals. However, the biggest victory goes to each and every member of the BIDV system, for spreading the message "BIDV Smile - Thoughtful, Professional, Efficient" widely, motivating each staff member to make more effort to further develop BIDV's service activities and bring more benefits from the bank to its customers.

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