BIDV Review 50 - June 2019

A Newsletter of Bank for Investment and Development of Vietnam JSC • Issue No.50 | June 2019

Towards a cashless society Shaping a big bank in Laos

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 COMMUNICATION AND BRANDING 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

I

Dear readers, he year 2019 is more than halfway through and BIDV is still on track to deliver the targets set. As usual, the bank had a vigorous month.

On June 18, in an official visit to the Republic of the Union of Myanmar, Vietnam’s Deputy Prime Minister Vuong Dinh Hue paid a visit to BIDV Yangon - Vietnam’s first bank branch to receive a license for banking in Myanmar. The Deputy Prime Minister spoke highly of BIDV Yangon’s achievements as well as its efforts in connecting Myanmar with international markets and promoting economic, trade and investment cooperation relations between Vietnam and Myanmar. The Deputy Prime Minister expressed his hope that BIDV in general and BIDV Yangon in particular, with its own particular strengths, will continue to be an effective bridge to promote trade, tourism and investment cooperation between the two countries.

LaoVietBank, a joint venture between BIDV and the Banque Pour Le Commerce Exterieur Lao Public (BCEL), recently celebrated its 20th anniversary. Over the twenty years, LaoVietBank has become one of the largest banks in Laos, contributing greatly to the comprehensive cooperation between the two countries. The bank was first among commercial banks in Laos to engage in an

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international transaction through successful borrowing from Cathay United Bank.

In this publication, we provide an insight into cashless payment - a growing and inevitable trend in the digital era. In Vietnam, cashless payment holds great potential in light of Industry 4.0. A number of experts also give their opinion on cashless payment as part of this feature. The date 16 June has been chosen as 'cashless day' in Vietnam.

The State Bank of Vietnam is seeking input on a draft circular that will replace Circular 36 dated 20 November 2014 on safety limits and ratios for transactions performed by credit institutions and foreign bank branches. The draft circular consists of 15 amendments including two key points relating to reducing the ratio of short-term funds for medium and long-term loans to 30 percent and the application of a risk ratio of 50 – 150 percent for personal loans.

In our lifestyle columns, we offer a glance at Pu Luong Nature Reserve, a place of outstanding natural beauty just 150km from Hanoi. As with Pu Luong, Ly Son, an island formed from volcanoes and coral reefs, lures travel lovers with its pristine and natural beauty.

CONTENTS

4. Vietnamese Deputy Prime Minister visits BIDV Yangon

12. What experts say on cashless payments 14. Vietnam banks face significant capital burden despite

6. Shaping a major bank in Laos

16. Mid-year banking overview

BIDV HIGHLIGHTS

dividend plan

INSIGHTS

MARKET MOVEMENTS

8. Towards a cashless society

18. Vietnam forecast to receive large FDI inflows

10. Raising awareness on cashless payment

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CONTENTS

19. Government bond futures contracts set to launch

LIFESTYLE

24. Tranquil summer getaway in Pu Luong

20. Emerging East Asia bond market expands amidst concerns

26. Ly Son –pristine paradise

21. Covered warrants expected to attract many investors

CSR

28. A mother’s happiness

POLICY UPDATE

22. Key points in draft to amend Circular 36

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BIDV HIGHLIGHTS

DUC D IE P

Vietnamese Deputy Prime Minister visits BIDV Yangon highly of BIDV Yangon’s achievements as well as its efforts in connecting Myanmar with international markets and promoting economic, trade and investment cooperation relations between Vietnam and Myanmar. The Deputy Prime Minister expressed his hope that BIDV in general and BIDV Yangon in particular, with its own particular strengths, will continue to be an effective bridge to promote trade, tourism and investment cooperation between the two countries.

n 18 June 2019, in an official visit to the Republic of the Union of Myanmar, Vietnam’s Deputy Prime Minister Vuong Dinh Hue paid a visit to BIDV Yangon - Vietnam’s first bank branch to receive a license for banking in Myanmar.

Reporting to the Deputy Prime Minister, chairman of BIDV's Board of Directors Mr. Phan Duc Tu committed to further promoting the branch's operations, implementing professional and long-term business activities in compliance with Myanmar laws. The chairman said BIDV wished to receive continued support and direction from the Party and Government of Vietnam in order to make more effective and practical contributions to investment and trade as well as the business operations of the two countries.

The Deputy Prime Minister spoke

Having launched in mid-2016, BIDV

BIDV Yangon Branch in Yangon, Myanmar

On a recent visit Deputy Prime Minister Vuong Dinh Hue spoke highly of BIDV Yangon’s achievements as well as its efforts in connecting Myanmar with international markets.

O

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BIDV HIGHLIGHTS

Mr. Phan Duc Tu, chairman of the Board of Directors (standing), BIDV briefs the Deputy Prime Minister on the Yangon branch's performance

Yangon, Vietnam’s first bank branch to open in the country and one of 13 foreign banks in Myanmar licensed to conduct banking operations in Myanmar, provides a wide range of banking products for businesses of Vietnam and Myanmar. As of 31 May 2019, the branch had total assets of more than USD130 million with mobilised capital reaching USD46.5 million and loan balance averaging USD20 million. The branch’s corporate customers increased by 27 percent compared to the end of 2018.

In addition to credit and payment products, BIDV Yangon has worked with local banks to implement products such as collection and cash deposit and withdrawal. Notably, the branch successfully offered collection products for many Vietnam-invested projects. Such activities not only facilitate Vietnamese businesses and provide banking and financial services for the Myanmar market, but also contribute to promoting economic, trade and investment relations between the two countries.

In August 2017, Vietnam and Myanmar issued an 18-point Joint Statement on the comprehensive cooperative partnership during the State visit of Mr. Nguyen Phu Trong, General Secretary of the Central Committee of the Communist Party of Vietnam to the Republic of the Union of Myanmar. The Joint Statement read: 'The two sides welcomed the opening of the Joint Stock Commercial Bank of Investment and Development of Vietnam (BIDV) branch office in Yangon to boost bilateral trade and investment. The Myanmar side took note of the request for permission for BIDV to have direct transactions with Myanmarese clients and businesses.'

The economic diplomacy, trade support and economic relations of Vietnam and Myanmar have become increasingly vigorous. Two-way trade turnover in 2018 reached nearly USD860 million, of which Vietnam saw a trade surplus of over USD544 million. Vietnam is the seventh largest foreign investor among 49 countries and territories investing in Myanmar with total committed capital to date reaching nearly USD2.2

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billion, representing 2.8 percent of the total investment in Myanmar. More than 200 Vietnamese enterprises have established their commercial presence and conducted investment in the country.

BIDV Yangon is headquartered at Hoang Anh Gia Lai Myanmar Centre Tower, 192 KabarAye Pagoda Rd, Bahan, Yangon, Republic of the Union of Myanmar.

The branch has charter capital of USD85,000,000 and serves Vietnamese and foreign enterprises in Myanmar; local and foreign banks in Myanmar and local businesses.

BIDV Yangon provides diverse products and services including deposits, loans and guarantees; payments (domestic and international), cash management, trade finance, currency trading and business advisory among others; as well as a number of other banking products and services.

BIDV HIGHLIGHTS

PHAN ANH

Shaping a major bank in Laos Officially launched in June 1999, LaoViet Joint Venture Bank (LaoVietBank) has excelled in its mission, contributing greatly to the comprehensive cooperation between Vietnam and Laos.

bank, aiming at promoting the economic cooperation of the two countries.

After being approved by the Government of Vietnam, on 6 March 1999 BIDV and BCEL signed a memorandum of understanding on cooperation to establish a joint venture in Vientiane, Laos. Two months later in Hanoi, Vietnam, the two banks signed a joint venture contract to establish LaoVietBank. LaoVietBank was the first joint venture bank in Vietnam operating in the banking field abroad while for BCEL, this was the trigger for the bank’s foreign cooperation.

Notably, LaoVietBank was Vietnam’s first foreign joint venture to be established just one month after the government’s Decree 22/1999 on overseas investment was issued.

BUILT TO LAST In December 1998, a cooperation and payment agreement was signed between the central banks of Vietnam and Laos, laying foundations for the establishment of a joint venture bank.

In January 1999, an economic, cultural, scientific and technical cooperation agreement was signed in Hanoi between Vietnam and Laos, stating: “Assigning the banking sectors of the two countries to select partners to study the project of establishing a joint-venture bank in each country”. Under the direction of the Prime Ministers and the central

banks of the two countries, the Bank for Investment and Development of Vietnam (BIDV) and the Banque Pour Le Commerce Exterieur Lao Public (BCEL) were honoured to take on the task of establishing a joint venture

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On 22 June 1999 in Vientiane, the opening ceremony of LaoVietBank took place in the presence of Vietnam’s Standing Deputy Prime Minister Mr. Nguyen Tan Dung, and Laos’s Deputy Prime Minister Somsavat Lengsavad as well as representatives of the central

BIDV HIGHLIGHTS

H. E. Pany Yathotou, Chairwoman of the Lao National Assembly, attends the 20th anniversary of LaoVietBank

banks and ministries of the two countries. LaoVietBank was tasked by the two governments to act as a bridge for payment and conversion of the two countries' currencies (Vietnamese dong and Lao kip), serving economic, trade and investment relations between the governments, businesses and people of the two countries.

The founding of LaoVietBank was a historical milestone that marked a new era of economic development between the nations of Vietnam and Laos.

completed its role as a correspondent bank to disburse capital to projects under the cooperation agreement signed between the two governments worth hundreds of million US dollars, significantly contributing to the implementation of the Vietnamese government’s policy on calling for foreign investment and contributing to the rapid development of the national economy of Laos. LaoVietBank was the first bank among commercial banks in Laos to engage in an international transaction through the successful borrowings from Cathay United Bank.

leading banks in Laos. The bank saw solid growth in terms of total assets, standing at about USD1.12 billion, ranking third among the largest banks in Laos. The charter capital of LaoVietBank increased from USD10 million at the outset to reach USD100 million, making the bank the largest in Laos by charter capital. Total mobilised capital reached about USD1 billion, taking third place in terms of market share while total outstanding loans reached close to USD800 million, ranking second by market share in the country.

In 2018, LaoVietBank’s profit before tax reached USD9.5 million with the number of employees reaching nearly 400. LaoVietBank had its headquarters, seven branches and 17 transaction offices in eight out of 18 provinces and key economic areas of the country including Vientiane, Attapeu, Champasak, Savanakhet, Kham Muon, Xieng Khouang, Luangprabang and Udomxay.

The bank says it is striving to rise to the second position in all operating areas, actively contributing to the implementation of monetary policy as well as the development of Laos.

RESILIENT GROWTH Over the twenty years of holding this special role, LaoVietBank has left impressive footprints in Laos.

The bank has successfully played the role of payment centre, helping solve difficulties for businesses in VietnamLaos bilateral payment activities. Total two-way payment turnover between the two countries made through LaoVietBank over the past 20 years was equivalent to USD2.8 billion.

The joint venture bank successfully

To date, LaoVietBank has seen strong developments and become one of the

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Along with its business mission, LaoVietBank has taken a pioneering role in supporting social security in Laos, donating millions of US dollars with a focus on key areas such as healthcare, education and training and providing financial assistance.

INSIGHTS

P HUONG LINH

BIDV SmartBanking, an outstanding banking platform developed by BIDV, provides great convenience to customers.

Towards a cashless society Cashless payments are growing in popularity and are an inevitable trend in the digital era. In Vietnam, cashless payment holds great potential in the context of Industry 4.0.

mining electronic data; improve operational efficiency and minimise risks and costs for cash storage, rotation, and handling. Governments also benefit from the process of shifting to electronic payment through the increased transparency of the economy; narrowing underground economic activities; as well as expanding people’s ability to access and use banking and financial services.

AN INDISPENSABLE TREND Electronic payment methods contribute to enhancing the transparency of the economy and expanding banking and financial services for the population.

For consumers, electronic payments offer benefits including saving time and cost and higher safety. For goods and service providers, electronic payment methods enable them to provide services quickly; classify and expand their customer base through

Promoting electronic payments towards a non-cash society is an inevitable development trend in the context of the industrial revolution 4.0, creating double impacts which both promote economic growth and support the implementation of an inclusive financial strategy.

However, there are a number of drawbacks and potential risks to operating a cashless society including

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concerns about the potential risks of breach of confidentiality, data safety and network security. Vietnamese regulators must pay attention to these in the process of planning and implementing policies towards becoming a cashless society.

Mobile apps have grown in popularity in Vietnam. About 48 million Vietnamese people have access to the internet while 35 million use smart mobile devices of which 45 percent use mobile phones to search for and buy goods online - a considerable number which contributes to the development of e-commerce.

According to a survey by PayPal Asia Research on Digital Payments in 2017, familiarity with e-wallets/mobile wallets in Asia is around 49 percent, with the highest awareness being in China (around 83 percent). The success of mobile wallets acceptance in China

INSIGHTS

is driven by its mobile-first consumer mindset, innovative social commerce model, and a robust and trusted digital payments infrastructure.

As for ASEAN, its digital economy currently generates approximately USD150 billion in annual revenue and is expected to become one of the world’s top-five digital economies by 2025. Its internet penetration rate is 58 percent, of which more than 90 percent of access comes through mobile devices. This trend underscores the increasing competition from mobile wallets to replace traditional payment methods in the region.

STRONG DEVELOPMENT Nguyen Kim Anh, deputy governor of the State Bank of Vietnam, said that with the government’s strong direction, cashless payment transactions increased significantly last year.

In 2018, the inter-bank electronic payment system safely handled 137.6 million transactions worth a total of VND73 quadrillion (USD3.13 trillion), equal to 13 times the country’s GDP, up 25 percent from 2017. Payments made via mobile devices increased by 169.5 percent in terms of value compared to 2017.

According to Mr. Pham Tien Dung, director of the Payment Department under the SBV, the total inter-bank electronic transaction value in the first five months of 2019 increased by 23.23 percent in the number of transactions and 17.63 percent in transaction value compared to the same period last year. In addition, payment services have seen strong development, especially payment facilities, and app-based payment services. Payment via the Internet and mobile phones also grew.

As of 31 March 2019, the number of online financial transactions increased by about 66 percent while the average transaction value increased by 14 percent compared to the same period in 2018. The number of financial transactions via mobile phones increased by about 98 percent and the transaction value increased by 232.3 percent year-on-year.

In addition, payment for public services through banks has been promoted. Currently, about 50 banks have signed agreements with tax and customs authorities for e-tax collection in all 63 provinces and cities across the country. 95 percent of customs payments are made through banks and 99 percent of enterprises register to pay tax online.

There are currently around 20 e-wallets apps in Vietnam. According to the State Bank of Vietnam, the value of e-wallets transactions in 2017 exceeded VND53 trillion (USD2.2 billion), an increase of 64 percent from the previous year. With the non-cash payments initiative aimed at reducing

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the cash transactions ratio to under 10 percent during the 2016–2020 period, e-wallet payments are expected to gain more traction. Many foreign operators, such as Samsung Pay, Alipay, and Amazon, have also entered the local market to tap this growing potential.

According to a report released by Nikkei Asian Review in April 2019, 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.

BIDV, the largest lender in Vietnam, has paid strong attention to cashless payment methods. The bank’s outstanding apps BIDV SmartBanking, BIDV Pay+, and QR Code are all operating to provide great convenience to customers.

INSIGHTS

NGU Y EN QUANG

Raising awareness on cashless payment the public, thereby improving access to banking products and services and encouraging the use of noncash payment methods. The SBV has proactively formulated the contents and coordinated the implementation of financial education programs that have been well received by the public such as "Smart Money", "Smart kids" and "Wise money" as well as a contest entitled "Understanding about Money".

On 11 June within the framework of a program themed “Cashless Day”, the State Bank of Vietnam (SBV) organised a conference with the theme “Cashless society: Policy and practical situations in Vietnam” to raise awareness and promote the use of non-cash payments.

BENEFITS OF NON-CASH PAYMENT Implementing the government's direction of developing non-cash payment, in addition to improving the legal framework and the policies on payment activities, the SBV has conducted comprehensive measures and directed credit institutions to continue to invest and develop payment infrastructures, enhance security and ensure customers' benefits, by applying the achievements of the Industrial Revolution 4.0 to payment services.

At the same time, the SBV has also enhanced its communication task to disseminate knowledge and improve awareness in an attempt to change the behaviour and payment methods of

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BIDV REVIEW

Mrs. Le Thi Thuy Sen, Deputy Director General of the SBV Communication Department, said that in recent years, the SBV has collaborated with many media agencies to promote non-cash payments in Vietnam and to raise people's awareness. This is a very important element in promoting noncash payments. In the coming time, the SBV will carry out communication in accordance with various age groups, from primary school students and high school students to people in remote areas who have less access to banking services, in order to communicate to them the utilities of non-cash payments, as well as how to ensure safety and security in noncash payments, thereby encouraging and supporting people in accessing and effectively using online banking services, raising awareness and minimising the risks for customers when using financial and banking products and services.

TASKS TO DO One of the key tasks Deputy Prime Minister Vuong Dinh Hue requested

INSIGHTS

A conference on cashless payment held in Ho Chi Minh City in June 2019

the SBV and related ministries to continue to implement is financial inclusion. These tasks include urgently finalising the development and starting to implement the National Financial Inclusion Strategy, thereby enhancing accessibility and the utility of financial services, and improving the financial knowledge and skills of consumers, to ensure no-one is left behind when it comes to accessing financial products and services.

In addition, the Deputy Prime Minister also requested ministries and agencies to continue to improve the legal framework for payment activities to meet new and emerging practical requirements, especially with regards to the application of new technologies and payment models, as a basis for building and implementing professional processes.

This includes renewing business models in the direction of technology application; continuing to effectively

implement the Scheme on Non-Cash Payment Development in Vietnam for the period 2016-2020 and the Scheme on promoting payments via banks for public services such as taxes, electricity, water, education fees, healthcare and payments for social security programs; successfully deploying the assigned tasks outlined in Resolution 02, which assigns the banking sector to provide modern infrastructure and electronic payment services to integrate and process payments for services in the economy; and coordinating with the Ministry of Information and Communications to report to the government on the plan to use telecommunication accounts to pay for low-value services (MobileMoney service). Ministries, agencies and service providers must develop their IT systems to allow them to manage in a centralised and capable way connecting and integrating with the payment infrastructure of the banking sector.

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The Deputy Prime Minister hoped that, with the results achieved at the conference, Vietnam's non-cash payment will make a giant leap forward; helping to raise the awareness of the people, the businesses and the whole of society about the benefits of using electronic payment methods and becoming a cashless society; thereby helping to change consumer behaviour in a positive and beneficial way for social development.

16 June has been chosen as “Cashless payment day� in Vietnam. Aiming at a non-cash payment society, many attractive promotions are offered to create a habit of not using cash for Vietnamese people. Customers will have chances to win a Mazda CX-5 and numerous valuable gifts for taking part in BIDV's promotions. Visit www.bidv.com.vn for more information.

INSIGHTS

PHAN NGUYE N

What experts say on cashless payments MORE NEW POLICIES WILL BE PUT IN PLACE According to Mr. Nguyen Kim Anh, Deputy Governor of the State Bank of Vietnam (SBV), electronic payment channels via the internet and mobile phones are becoming increasingly popular in Vietnam thanks to the convenience they offer. To promote non-cash payments, the State Bank of Vietnam will continue to direct commercial banks and payment service providers to apply modern technology in payments, taking mobile application services as the primary target and integrating their information technology systems with the banking system's payment system portals.

Mr. Nguyen Kim Anh, Deputy Governor, State Bank of Vietnam

In 2019, the SBV will actively implement a number of major tasks and solutions to promote non-cash payments. These include building a new decree to replace the existing Decree 101/2012 on non-cash payments; submitting a plan to the Prime Minister on implementing a comprehensive national financial strategy; developing a controlled testing mechanism; promoting the uniform application of basic standards "Technical description of QR Code displayed from merchants in Vietnam"; and reporting to the Prime Minister regarding the pilot implementation of telecommunications accounts for payments within other low-value services (including mobile-money services).

MOBILE MONEY IS THE SOLUTION TO PROMOTE NON-CASH PAYMENTS According to Mr. Nguyen Duc Trung, Director of Telecommunications Department under the Ministry of Information and Communications, mobile money via mobiles is the way forward for promoting non-cash payments for public services. Mobile money is aimed at those who do not have bank accounts and provided via mobile devices. Customers can use functions such as money transfer, money storage and payment services to pay for hospital fees, tuition fees, social security, utility and environmental services.

Mr. Nguyen Duc Trung, Ministry of Information and Communications

The introduction of mobile money is expected to contribute positively to the field of electronic payments. Currently the Ministry of Information and Communications is working with the State Bank of Vietnam and related ministries to propose a pilot policy on mobile money. In the early phase, mobile network operators will implement the pilot service while ensuring customer identification requirements are met via SIM registration, especially with regards to security requirements. In addition, these operators will have to manage their agency network to ensure the liquidity of agents.

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INSIGHTS

THE UNDERSTANDING OF THE MAJORITY OF PEOPLE IS STILL UNCLEAR According to Mr. Duc, the current proportion of customers regularly making noncash payments is still very low. Many customers claim that non-cash payment is not convenient. These customers perceive cashless payment as swiping cards, while in fact there are many other forms of non-cash payment such as scanning QR codes and electronic wallets. Currently, about 80 percent of customers are not aware of all the types of non-cash payments, meaning their understanding of this payment type is unclear.

Mr. Nguyen Anh Duc, Acting CEO of Saigon Co.op

NON-CASH PAYMENT IS NOT CONVENIENT Acting CEO of Shopee Mr. Tran Tuan Anh said that out of the seven countries that Shoppe is operating in, Vietnam has the highest non-cash payment proportion. Orders are placed online; however, the most important step - payment - is still made by cash.

This is in part due to customers’ habits, as well as the fact that online payment is not as convenient as using cash in Vietnam. In addition, there are many barriers in the e-wallets building process which challenges the patience of customers in general.

Mr. Tran Tuan Anh, Acting CEO of Shopee

Dr. Nguyen Minh Sang, Banking University of Ho Chi Minh City

Mr. Nguyen Thanh Chung, Ho Chi Minh City Department of Industry and Trade

UNDERSTANDING THE BENEFITS, PEOPLE WILL MOVE AWAY FROM USING CASH

REDUCE PROCEDURE TIMES

BY HALF

According to Mr. Nguyen Minh Sang, Banking University of Ho Chi Minh City, Vietnam has a significant cashless market; however, to push its development further, intermediary payment organisations must enhance their communication and connection.

These organisations can choose to diversify the forms of payment authentication they employ, such as password ID, fingerprints or face recognition. It is expected that once people become more familiar with electronic payments and acknowledge the convenience and security of these methods, we will see a gradual shift with non-cash payment becoming the norm.

Mr. Nguyen Thanh Trung, Chief of Office of Ho Chi Minh City Department of Industry and Trade, said that recently, many applications related to industrial production and trade activities have been applied to online public services by Ho Chi Minh City Department of Industry and Trade, which allows paying costs online and sending and receiving results via post or online to speed up administrative procedures. The Department is also cooperating with Payoo to provide online payment services, thereby shortening business and personal application processing times at the department by nearly a half.

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INSIGHTS

T HA O NGAN

Vietnam banks face significant capital burden despite dividend plan A plan to allow large Vietnamese state-owned commercial banks to pay dividends in shares or retain dividends aims to help them accumulate capital and meet regulatory minimum capital thresholds.

A

long with Vietcombank, Vietinbank, and Agribank, BIDV is amongst the four state-run commercial banks with urgent need to raise its capital to follow the guidelines and policy of the Party and the State, including capital provision for economic growth.

An analyst from Fitch ratings agency said in a recent report, “We estimate that the positive capital impact for Fitch-rated state-owned banks (Vietcombank and Vietinbank) will be up to 30bps, which is small relative to our estimated potential capital shortfall of up to 200bps, assuming they target an 8 percent Tier-1 capital ratio,” adding that Vietnamese banks, and state-owned banks in particular, are facing substantial capital needs in the run-up to the implementation of Basel II. These standards will increase banks' risk-weighted assets due to changes to credit risk-weights and the introduction of capital charges for operational and market risks.

According to Fitch’s analysis conducted late last year, Fitch-rated Vietnamese banks are estimated to need USD4.1 billion of additional capital, of which 90 percent is

BIDV is seeking the State’s permission for the bank to retain its

accounted for by the state-owned banks. These banks' much larger capital shortfall reflects their lower capital positions and weaker profitability relative to private banks.

The total amount of capital required could be even higher if banks raise their allowance coverage to 5.0 percent of gross loans and Vietnam Asset Management Company special bonds, compared with 1.6 percent at year-end 2018, in order to address underreported NPLs and Vietnam

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BIDV REVIEW

Asset Management Company special bonds.

The prime minister’s Decision 986/ QD-TTg dated 8 August 2018 on approving the “Development strategy of Vietnam’s banking sector to 2025, with orientations to 2030”, requested that, until 2020, commercial banks with over 50 percent of charter capital held by the State must have sufficient capital as per CAR under Basel II.

INSIGHTS

support in implementing their charter capital raising plan.

annual income or pay dividends in stocks to increase capital

At this time, the average CAR of the four state-run commercial banks (Vietcombank, Vietinbank, Agribank and BIDV) has reached 9.4 percent, a figure that is very close to the minimum requirement under Basel I, and lower than the average ratio of the overall system of credit institutions in Vietnam, at 13 percent. To follow the guidelines and goals set by the government and for the operating safety of the system, the four banks are in a strong need of the State’s

According to the Vietnam Banks Association (VNBA), total assets and outstanding loans of the four staterun commercial banks account for around 50 percent of those of the entire banking system. In recent years, though they have not been provided with additional capital by the State, the banks have concentrated their efforts into credit expansion to meet the economy’s capital demand; gaining high growth and making a significant contribution to the State budget as dominant and pioneering banks of Vietnam. If the effort to raise their charter capital fails, these banks will be forced to slow down their credit growth, which may adversely impact their ability to provide capital for the economy, thus affecting economic growth and reducing the state budget

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collection of tax, as well as posing a threat to the banks’ international credit ratings and market reputation.

Sharing its concerns and expectations with the three other state commercial banks, BIDV is seeking the State’s permission for the bank to retain its annual income or pay dividends in stocks. This will help the bank increase capital and partly solve current impediments and constraints.

Vietnam maintains a 30 percent blanket foreign-ownership limit for banks and 20 percent limit for a foreign investor deemed to have a strategic interest. Foreign ownership at Vietinbank is already at the 30 percent cap, while for Vietcombank it is 23 percent. Unless the cap is lifted, it can be expected that banks will issue Tier-2 debt to help meet minimum regulatory capital ratios.

INSIGHTS

T HA NH THAO

Mid-year banking overview Thanks to decisive and consistent measures, the banking sector promptly met the capital demands for production and business operations, as well as the legitimate demands of private customers. By 10 June 2019, outstanding loans provided to the economy had increased by 5.75 percent compared to the end of 2018. Credit continued to focus on production, business and the priority fields.

Headquarters of the State Bank of Vietnam in Hanoi

The State Bank of Vietnam (SBV) has managed the monetary policy in a proactive, flexible and prudent manner in line with fiscal and the macroeconomic policies.

SPECIFIC RESULTS Deputy Governor of the State Bank of Vietnam Ms. Nguyen Thi Hong hosted a meeting on the banking performance in the first six months of 2019, stressing: “The market is relatively stable, the exchange rate closely follows market conditions, liquidity is guaranteed, forex transactions are smooth and legitimate demand for foreign currency is timely met.�

Of particular note, total means of payment until June 10 this year increased by 5.17 percent against the

end of 2018. The central bank targets a 13 percent increase of total means of payment and credit growth of 14 percent this year, however there is room for adjustments to be made.

The SBV has managed the common interest rates in line with macroeconomic and market developments. Common interest rates have been basically stable; with lending rates commonly at 6-9 percent p.a for short-term loans and 9-11 percent p.a for medium and long-term loans.

The SBV has also put a lot of effort into administration reforms.

According to the results of the Public Administrative Reform (PAR) Index in 2018, the SBV achieved the highest score of 90.57/100 points and continued to take first position in the rankings. This is the fourth consecutive year that the SBV has taken the top rank in administrative reform among ministries and ministerial-level agencies.

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The restructuring plan of credit institutions has continued to be strengthened. The resolution of NPLs has been implemented synchronously with the control and prevention of new NPLs. In 2018, the whole banking sector managed to resolve VND163.14 trillion (USD7 billion) of bad debts, with the ratio of bad debts on the balance sheets by end of March 2019 at 2.02 percent.

The SBV has synchronously implemented methods to accelerate noncash payments. In the first five months of 2019, the total number of payment transactions via the Interbank Electronic Payment System reached 64,160,000, with the total transaction amount over VND35,728 trillion (USD1,533 billion), an increase of 23.23 percent in the number of transactions and 17.63 percent in the transaction amount as compared to the same period of 2018 .

By 31 March 2019, the number of domestic transactions via bank cards reached 65 million, an increase of 18.45 percent as compared to the same period last year, with a total transaction amount of over VND171 trillion (USD7.3 billion). The number of online financial transactions reached 101 million, an increase of 66 percent, with the total transaction amount over VND4,581 trillion (USD197 billion).

INSIGHTS

Customers are making transactions at a BIDV branch in Hanoi

ACTIONS FOR THE REMAINING YEAR The SBV said it would operate open market operations (OMO) and regulate the liquidity of the credit institutions at a reasonable level while stabilising the monetary market in order to contribute to the successful attainment of the monetary policy targets.

Credit management shall be conducted in line with the targets, along with directing credit institutions to improve their credit quality; focusing their credit on production and business, especially on priority fields under the guidance of the government; thereby creating favorable conditions for enterprises and individuals to access bank loans.

The SBV will strictly control the credit flow into potentially risky areas, such as real estate and securities; enhancing the risk management for the BOT, BT transport projects and consumer credit; administering the lendings in foreign currencies, as well as having an appropriate roadmap to gradually reduce foreign currency lending.

The SBV will continue to accelerate the implementation of the plan of restructuring the credit institutions in association with NPL handling until 2020, focusing on resolving weak credit institutions and striving to reduce the NPL ratio to below 2 percent.

Non-cash payments will be boosted; enhancing safety and security in electronic payment transactions; formulating a legal framework for Fintech enterprises; and deploying new payment models in rural and remote areas in association with the development and implementation of the National Financial Inclusion Strategy in Vietnam.

The central bank will further reform administrative procedures in the areas of banking operations in order to assist organisations and individuals coming into administrative transactions with the SBV and credit institutions; contributing to improving the business environment in the monetary and banking sectors.

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At the same time, the central bank will also regulate the interest rate and USD/VND exchange rate policies in line with the government’s targets and market movements, adding that it would take intervention measures when necessary in order to stabilise the local foreign currency market.

According to the State Bank of Vietnam, total assets of the banking system as of end-April 2019 reached over VND11.2 quadrillion (USD472 billion), up VND150 trillion compared to end-2018. In the first four months of 2019, the banking system’s charter capital increased by 1.05 percent hitting VND582,379 billion (USD25 billion), of which state-owned banks account for VND149,001 billion (USD6.4 billion) (up 0.75 percent) and private banks making up VND268,872 billion (up 0.61 percent), while joint venture and foreign banks account for VND117 trillion (USD5 billion), up 2.76 percent.

MARKET MOVEMENTS

K HANH LY

Vietnam forecast to receive large FDI inflows At the ‘Fitch on Vietnam’ conference held in Hanoi on 11 June, Fitch shared their predictions for Vietnam to continue to receive large FDI inflows into the manufacturing sector, primarily in the electronics segment.

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epresentatives from the US-based Fitch rating agency outlined the factors that prompted the organisation to upgrade its outlook on Vietnam's credit rating to 'positive' from 'stable' and affirm the country's long-term foreign-currency issuer default rating at 'bb'.

According to Fitch, the Vietnamese government has continued to adhere to its commitment to consolidate its finance sector and control public debt, successfully reducing government debt from 53 percent of GDP in 2016 to about 50.5 percent of GDP at end2018. The organisation forecasts that Vietnam's public debt will continue to be reduced, reaching about 46 percent of GDP by 2020.

Fitch predicts that Vietnam will continue to receive a large amount of foreign direct investment inflows (FDI) into the manufacturing sector, mainly in the electronics segment thanks to its advantage of low cost and supply chain linkages.

These positive trends should support steady economic expansion in the

near-term, although the weaker external environment and Vietnam’s high degree of trade dependence are likely to weigh somewhat on growth in 2019 and 2020.

As a result, Fitch expects Vietnam’s growth to slow modestly in 2019 and 2020 to 6.7 percent. However, this still remains within the National Assembly’s target of between 6.6-6.8 percent, and Vietnam should remain one of the fastest-growing countries in the Asia-Pacific region.

In addition, anecdotal evidence suggests that trade tensions between the US and China is leading to trade diversion and shifting of some production facilities to Vietnam.

However, according to Fitch any large scale relocation of factories from

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BIDV REVIEW

China to Vietnam could take some time to materialise.

Mr. Vo Huu Hien, deputy director of the Finance Ministry's Department of Debt Management and External Finance, said the prospects of Vietnam's economy in 2019 and 2020 will remain positive, with macroeconomic stability, and confidence in investment and business environment continuing to be strengthened.

Hien also expressed his hope that Vietnam's credit rating will continue to improve in the coming time, thus further lifting the national prestige, reducing the cost of raising capital, and facilitating market access through strengthening the ability to attract investors.

MARKET MOVEMENTS

HO A I SANG

Government bond futures contracts set to launch According to the State Securities Commission (SSC), government bond futures contract, a new product in the derivatives market, will begin being traded on the Hanoi Stock Exchange (HSX) from 4 July.

S

SC confirmed that preparations for the launch of the five-year government bond futures contract have been completed. It is expected that building a derivatives market will improve Vietnam's ability to monitor and manage market risks.

According to the SSC, at the time of the launch of the derivatives market in August 2017, the Ministry of Finance submitted a plan to Prime Minister Nguyen Xuan Phuc to launch two products, namely VN30-Index futures and five-year government bond futures.

In Vietnam, the five-year term government bond futures contract has underlying assets of a hypothetical bond with similar characteristics to a government bond and par value of VND100,000 (USD4.3), term of five years and a nominal interest rate of 5 percent per year paid periodically every 12 months, with the principal paid at maturity.

The contract size of VND1 billion (USD43,500) was considered after consulting market members and in accordance with the conditions of Vietnam’s derivative stock market in the early stage of development with limited number of investors and limited liquidity. It is explained that if the size of the contract is too large, it will reduce the number of investors who are able to participate in transactions and limit liquidity, as well as easily manipulating prices, resulting

The VN30-Index futures were launched first, with trading beginning on 10 August 2017. The five-year government bonds were expected to be launched within two years of this date. For this reason, the legal framework and technological system for the trading government bond futures contracts have been ready since the launch of the derivatives market. The SSC has also disseminated information about the new securities product to investors in order to prepare them for the launch.

in strong fluctuations.

The five-year term government bonds in Vietnam are issued with large proportion and relatively good liquidity in the spot market. In recent years, Vietnam’s government bond market has developed strongly both in size and depth. The average growth rate reached 15 percent per year, equivalent to about 20 percent of GDP; and the market liquidity averaged at VND8.72 trillion (USD380 million) in 2018. The proportion of repo transactions increased sharply, accounting for 53.6 percent of the total market trading value.

The deployment of the five-year term government bond futures contract product is expected to meet investors' risk hedging requirements as well as the development of the government bond market.

Government bond futures contract will begin being traded on the Hanoi Stock Exchange from 4 July 2019.

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JUNE 2019

MARKET MOVEMENTS

T IEN MINH

Emerging East Asia bond market expands amidst concerns global growth momentum. The rapid buildup in private debt during the past decade could also damage economies and financial stability in the region.”

The wave of financial volatility that unsettled emerging markets last year has subsided in recent months.

Vulnerable markets such as Argentina and Turkey are showing signs of stability. A major factor behind the stabilisation of emerging markets in Asia and elsewhere, evident in stabilisation of their exchange rates, is the expected moderation in the pace of interest rate hikes by the US Federal Reserve. Notwithstanding such positive developments, ongoing global trade tensions and other major downside risks mean that global uncertainty remains elevated.

Investor sentiment toward emerging East Asia’s local currency bond markets has improved but concerns around the region's financial stability remain, including the ongoing trade conflicts.

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ccording to the Asian Development Bank’s (ADB) issue of the quarterly Asia Bond Monitor, at the end of 2018, emerging East Asia had outstanding bonds to the value of USD13.1 trillion, 2.4 percent more than at the end of September 2018 and 11.9 percent more than at the end of 2017.

Yields have fallen while foreign

holdings have increased in most markets. However, overseas investment in local currency bonds in the People’s Republic of China (PRC) bucked the regional trend. The share of foreign holdings in the PRC market fell to 5.0 percent at the end of December 2018 from 5.1 percent at the end of September, reversing a rising trend seen since 2016, as the pace of US interest rate hikes looked set to slow and amid a depreciation in the Chinese yuan.

“Risks to financial stability in emerging East Asia have receded somewhat recently,” said ADB Chief Economist Mr. Yasuyuki Sawada. “However, some uncertainties persist, notably from the unresolved trade conflict between the PRC and the US, a potentially disorderly exit of the UK from the European Union, and slowdown of

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BIDV REVIEW

The PRC still had the largest local currency bond market in emerging East Asia at the end of 2018 with USD9.453 trillion in bonds outstanding, 72.2 percent of the region’s total. Looking at the whole of Asia, only Japan’s is bigger at an estimated USD10.668 trillion.

Vietnam's bond market has shown positive development recently. The value of government bonds reached 45 percent of GDP and the share of corporate bonds is> 7 percent of GDP. The market has gained investor confidence thanks to the country’s macroeconomic stability.

Emerging East Asia comprises the PRC; Hong Kong, China; Indonesia; the Republic of Korea; Malaysia; the Philippines; Singapore; Thailand; and Vietnam.

MARKET MOVEMENTS

HO A NG VIET

Covered warrants expected to attract many investors Covered warrants, which will be traded on the Ho Chi Minh Stock Exchange from June, are expected to attract a large number of investors since they have lower investment costs and have more potential to be leveraged than conventional financial products.

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covered warrant is a security that gives the holder the right, but not obligation, to buy or sell an underlying asset at a specified price on or before a specified date.

Such underlying assets include single stocks, baskets of stocks (e.g. sectors or themes), indexes, commodities and currencies. Covered warrants are listed on major stock exchanges and can help diversify asset classes and hedge risks in the context of market volatility.

Markets that have developed covered warrants such as Taiwan, Thailand, Hong Kong, and South Korea and Vietnam's securities market have many similarities, including having a high rate of individual investors, short-term trading accounting for a majority and large demand for using leverage.

To issue covered warrants, securities companies must meet certain financial

norms and obtain a permit from the State Securities Commission of Vietnam. Currently about 12 securities companies among 70 are qualified to issue them.

BIDV Securities Company (BSC), a subsidiary of BIDV, received License 27/GCN dated 7 June 2019 from the State Securities Commission of Vietnam, enabling the company to issue covered warrants. BSC becomes one of the first securities companies in Vietnam to issue covered warrants.

The product is new to the Vietnamese market and is expected to offer investment opportunities to investors.

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JUNE 2019

In the first issue batch, BSC announced it would issue covered warrants that underline the shares of Mobile World Investment Group (MWG) – the No.1 Retailer in Vietnam at a quantity of 1,000,000 covered warrants priced at VND2,000 each.

With a modern IT platform provided by a foreign partner and well trained staff, BSC is confident it can provide customers with diverse products that meet the needs of investors.

Recently BSC launched a smart online investment platform, BSC I-Invest, aiming to help its customers become smart investors in the market.

POLICY UPDATE

VA N ANH

Key points in draft to amend Circular 36 The draft also provides two options for adjustments. Option 1 decreases the ratio by 5 percent each year.

Through this option, the maximum ratio by 30 June 2020 will be 40 percent, reduced to 35 percent by 30 June 2021, and 30 percent from 01 July 2021. Option 2 decreases the ratio by 3 percent each year. Through option 2 the maximum ratio by 30 June 2020 would be 40 percent, reduced to 37 percent by 30 June 2021, 34 percent by 30 June 2022, and 30 percent from 01 July 2022.

The State Bank of Vietnam is seeking input on a draft circular that will replace Circular 36/2014/TTNHNN (Circular 36) dated 20 November 2014 on safety limits and ratios for transactions performed by credit institutions and foreign bank branches.

The reduction of the ratio of funds for medium and long-term loans is seen as a driving force for Vietnam to strongly develop its capital market, motivating businesses to seek capital sources on the stock market.

T

he draft circular consists of 15 amendments including two key points relating to reducing the ratio of short-term funds for medium and long-term loans to 30 percent and the application of a risk ratio of 50 – 150 percent for personal loans.

REDUCING RATIOS According to the latest figures published by the State Bank of Vietnam, the ratio of funds used for medium and long-term loans by end-February 2019 by state-owned commercial banks was 31.12 percent while that of private commercial banks was 32.4 percent - quite far from the current ceiling level of 40 percent.

Therefore, the target of reducing the ratio to 30 percent in the next two to three years is possible.

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BIDV REVIEW

Currently, the banking system accounts for 68 percent of total assets of the financial system and is taking the key role in providing medium and long-term capital for the economy (the function that should belong to the capital market), with the proportion of medium and long-term credit provided by credit institutions remaining at 50.6 percent (at the end of 2018).

Meanwhile, Vietnam's corporate bond sector is still small with market capitalisation at end-2018 reaching only 8.57 percent of the country’s GDP, much lower than that of Thailand at 21.33 percent, and Malaysia at 46.3 percent. This imbalance caused the Vietnamese financial system to be underestimated by international institutions such as the IMF and the WB in terms of soundness and potential

POLICY UPDATE

risks related to banking liquidity.

The restriction on bank credit will be a driving force for businesses to seek capital on the stock market and from the private sector. On the one hand, it will boost the development of the stock market and on the other hand, it will reduce risks for the banking sector.

APPLYING RISK RATIO OF 150 PERCENT TO PERSONAL LOANS OF OVER VND3 BILLION The current Circular 36 regulates the risk ratio applicable to all property loans (including home loans) at 200 percent, with the exception of consumer loans. As a result, loans for buying, rennovating and repairing houses for sale and rent with the purpose of making profit are put into the category of consumer loans by commercial banks, which does not correctly reflect the nature of its risks and distorts consumer credit policies.

In contrast, the draft amending Circular 36 regulates the risk ratio of 50 percent to personal loans with total outstanding principal of less than VND1.5 billion (USD65,000) and 100 percent to loans with principal of between VND1.5 billion and VND3 billion.

In principle, banks can only provide loans for buying houses at a maximum rate of 70 percent of the value of the property purchase contract. With a loan principal threshold of VND3 billion (USD130,000), the house value

will be between VND 4.2-4.5 billion (USD195,000). This is a reasonable figure relative to the current average house price in Vietnam, and the average income of Vietnamese people and of such property buyers.

loan use purpose. The ratio will also help the central bank better control the liquidity and risk level of the banking system.

From 2020, credit institutions and foreign bank branches will apply the provisions on capital adequacy ratio as stipulated in Circular 41 (Circular 41 dated 30 December 2016 by the State Bank of Vietnam which prescribes the capital adequacy ratio for the operation of banks and foreign bank branches. The risk ratio of loans against property and home mortgage loans will accurately reflect the level of risk of the loans depending on the characteristics and structure of the loans such as loan to value ratio (LTV), debt service coverage ratio (DSC), and

Circular 36, effective since 1 February 2015 and first amended in May 2016 and again in December 2017 and July 2018, provides for capital adequacy ratio except for that applicable to foreign bank branches under the central bank’s specific regulations; credit extension limit; debt service coverage ratio; maximum ratio of short-term funds for medium and long-term loans; ratio of purchasing and investing in government bond and government-guaranteed bonds; limit on capital contribution and stock purchase; and loan to deposit ratio.

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LIFESTYLE

T HA NH NGAN

Tranquil summer getaway in Pu Luong Gazing out over a panorama of verdant rice paddies, majestic mountains and pretty, traditional stilt houses, it’s not difficult to understand why the ethnic Thai people of Pu Luong Nature Reserve made this enchanting valley their home long ago.

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u Luong is located in Thanh Hoa province, about 150 kilometres from Hanoi, and takes approximately four and half hours to reach by car. Travellers can hire private shuttles from Hanoi, with a stop in Mai Chau along the way.

There are no direct public buses from Hanoi but buses travel to Mai Chau from My Dinh bus station, where you can take a taxi for the remaining 90-minute drive to Pu Luong.

The best times of the year to explore Pu Luong are from late May to early June, when a new cultivation of rice starts, and during the harvest season between September and October.

Pu Luong is one of the largest nature reserves in Vietnam’s northern region and has been bestowed by Mother Nature with diverse types of forests, interlaced spring and river systems, and assorted fauna and flora. There are a number of activities to enjoy to ensure you make the most of

the communities in the reserve are Thai people, an ethnic group with two local branches, White Thai and Black Thai. The Thai people are highly skilled at wet rice cultivation and their homes are built in a raised stilt style. Staying at one of these homestays is a fantastic way to experience local customs and see what life is like for this Vietnamese minority group. your time in this beautiful destination.

Pu Luong is dotted with quaint hamlets and villages throughout the park, each with its own unique history. Most of

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BIDV REVIEW

The Thai people have kept the habits of their ancestors as an important part of their culture and community. Weaving, embroidery, basket making and bamboo furniture are all key skills for

LIFESTYLE

the Thai people. Take the opportunity to learn about any of these traditions with a craft workshop during your stay.

You’ll not only learn something new but also support local enterprises and help preserve these timeless traditions.

Trekking is the best way to soak up the natural splendour of Pu Luong. Access to maps and marked trails are limited throughout the park, so hiring a local guide will save you time and help you plot the perfect route. You may like to hike to the summit of Mt. Pu Luong, or do a multi-day trek through the entire reserve.

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JUNE 2019

LIFESTYLE

Q U Y NH CHI

Ly Son –pristine paradise Ly Son, an island town lying 30km from the mainland of Quang Ngai province, still retains its pristine and natural beauty.

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s an island formed from volcanoes and coral reefs, Ly Son is blessed with a host of intriguing caves and beautiful beaches that are perfect for exploring.

TO VO GATE To Vo gate is an arch formed by volcanic lava, resulting from the action of volcanoes millions of years ago. The stone has created a gate-like gap which appeals to tourists, especially in the early morning or late afternoon when the sun starts to come down. The gate is surrounded by shining black rippled rocks of strange shapes, creating a spectacular, pristine scene.

THOI LOI MOUNTAIN PEAK Ly Son island is also famous for Thoi Loi mountain peak - the highest peak

of Ly Son which was once an active volcano. From the peak, visitors can enjoy a panoramic view of the island with its bright blue sea, cloudy sky, green fields of garlic and rice paddies, small houses nestled close together and boats anchored out at sea.

CAU CAVE At the foot of Thoi Loi mountain is Cau cave with its magnificent natural scenery.

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BIDV REVIEW

LIFESTYLE

With a beautiful beach of white sand and clear seawater, visitors can participate in activities such as snorkelling to see coral, swimming, teambuilding or kayaking.

Cau cave was formed thousands of years ago from lava and the abrasion of waves and sea winds carving deep into the mountain. It’s a sight to behold, with many incredible slits in the rock like ditches in the mountain. The erosion has formed a large cave near the sea that is shady and cool inside, creating a pleasant feeling. After millions of years of geological change and volcanic eruptions, the cave has become a fascinating scene that is much admired today.

LY SON FOOD Ly Son’s main industry is fishing and growing garlic, shallots and onion, with the most famous being black garlic which is small and rather mild, and is believed to have all sorts of good medicinal qualities. Ly Son’s seaweed and seafood are popular with tourists.

Salads such as seaweed salad, garlic salad and raw fish salad are among the

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favourite dishes for tourists visiting local restaurants. Huynh De sea crab is one of the most famous local specialties because of its unique shape and delicious sweet flavour. Another speciality seafood found in Ly Son is sea urchin, which can be eaten raw with mustard, cooked with eggs or used as the main ingredient of rice porridge.

If tourists want to experience local life, they can choose to enjoy fresh seafood at the market, where the food is seasoned and cooked with indigenous ingredients produced by the local people.

CSR

T HU HIEN

A mother’s happiness

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Chien’s mother couldn’t disguise her pride in her son. “He makes others realise how lucky they are.

Looking at him and his daily struggles, people see that their problems are somehow less significant.” Despite his disability, Manh Chien brings a beautiful message to everyone - and none more than his courageous mother - which is to treasure every moment you have in this life and never give up.

n 1 June BIDV Union visited the families of employees who have children suffering from illness. The story of one such child, a young boy called Manh Chien whose mother Ms. Doan Minh Trang works in BIDV’s Accounting Department, shows that facing adversity can bring greater meaning to your life.

To Minh Trang, her son is a priceless gift and a true warrior. Manh Chien was born on 31 July 2015 with pneumonia. During the first month of his life, he couldn’t leave the hospital without regular injections of strong antibiotics. At four months old, he was diagnosed with West Syndrome – a rare type of epileptic encephalopathy, and later, with Lissencephaly - another rare brain disorder.

Most children with these disorders only live to around 10 years.

Now aged 4, though Manh Chien can’t talk, sit up by himself or move his own hands, he has never succumbed to a convulsion. He keeps smiling, and this smile is what motivates his mother to keep fighting for him.

The story of Chien shows that even the most difficult situation can bring meaning to your life. When things don't turn out like you hoped or expected, it’s up to you to be positive and hopeful and to find happiness in small blessings.

Manh Chien in this story

exquisite happiness,” Minh Trang said, “I feel blessed by his simply turning his body, or trying to open his hand to touch my face. Raising him has taught me not only how to be a mother, but to be a warrior mother. Thanks to my little angel, I’m able to do things that I could never have done before.”

“He turns ordinary days into ones of

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BIDV REVIEW

On International Children’s Day, BIDV Trade Union visited staff with disabled children to show their support. The Trade Union also regularly organises other activities to motivate employees to overcome difficulties in work and life.

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