BIDV Review 63 - August 2020

A Newsletter of Bank for Investment and Development of Vietnam JSC • Issue No.63 | Aug 2020

Moving customers

to digital BIDV receives Best Merchant Service award

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BIDV headquarters seen from Hoan Kiem Lake, Hanoi

ABOUT BIDV Founded in 1957, BIDV is the largest commercial bank in Vietnam by assets and charter capital. The bank boasts subsidiaries in finance, banking, securities and insurance. It has a wide network of more than 1,060 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 Communication 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.15/GP-XBBT dated 27 February 2020 by the Ministry of Information and Communications Printed at Vietnam Book Printing Joint Stock Company

Editor’s Letter

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Dear readers, n August, BIDV kicked off a campaign on digitally transforming customer base in order to improve customer experience. This marks a bold step from the bank in endeavoring for digital transformation. BIDV boasts potential for moving customers online with 50 percent of its individual customers being 35 years and under. The bank is aiming for 80 percent of its customers to access and use its products and services via digital channels by 2025.

In the month BIDV was also honoured with “Best Merchant Service in Vietnam” award from The Asian Banker. Over the past three years BIDV has been among the pioneering banks to offer breakthrough and marketleading card payment acceptance services by applying advanced technology, providing a different user experience.

BIDV released its financial report for Q2-2020.

The bank’s business performance remained stable despite the turbulent business climate resulting from the Covid-19 pandemic. Over the first six months of 2020, due to the impact

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of the Covid-19 pandemic and other cyclical factors, BIDV’s deposits and outstanding loans increased slightly compared to the beginning of the year. Of particular note, BIDV made sufficient provision for VAMC bonds in accordance with regulations and bought back all VAMC bonds in the first quarter of 2020.

In policy update column, we introduce the government’s Decree 81, which comes into effect on 1 September 2020. The decree raises standards in the corporate bond market as well as removing low-quality issuers in order to better protect investors. The decree aims to amend a number of articles of Decree 163 regarding private placement of bonds to make the market more sound and control risks.

The last pages feature an ancient monastery in Sa Pa which is becoming a popular spot amongst visitors to the town. Nowadays, the monastery is a ruined, desolate building often shrouded in fog. The beauty of the ruined monastery lies in its period architecture, nostalgia and mystery.

contents

BIDV HIGHLIGHTS

POLICY UPDATE

3. BIDV receives Best Merchant Service award for second year running

16. Decree raises standards for corporate bond market

4. Sustaining stable business performance amid Covid-19 06. Moving customers to digital

08. Driving digital transformation in the banking sector

18. State Bank extends roadmap for ratio of short-term funds for long-term loans

MARKET MOVEMENTS

10. Vietnam aims to become a digital nation by 2030 11. Banks rush for digital transformation 12. Vietnam needs new drivers of growth to consolidate

PRODUCTS & SERVICES

19. VND30 trillion loan at introductory rate of 6 percent p.a.

post-Covid-19 recovery

LIFESTYLE

20. Magical beauty of Ta Phin monastery

Partners 14. Hana – BIDV partnership

22. Bau Trang, a desert in a tropical land CSR

24. Giving wings to children’s dreams

15. LVI partners for improving digital experience

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BIDV Highlights

Ho ng Hanh

BIDV receives Best Merchant Service award for second year running cash flow as well as optimising costs and minimising the risk of counterfeit money and virus transmission during the pandemic. The bank has invested in research to develop solutions on the basis of digitising and maximising digital technology, improving its competitiveness in the Vietnamese market and helping to attract more potential clients.

Mrs. Nguyen Thi Le Thuy, deputy director of BIDV Card Centre, commented: “BIDV is committed to continuing to launch hi-tech services and applications towards sustainable development, bringing maximum benefits to consumers, businesses and society as a whole.”

Mrs. Nguyen Thi Quynh Giao, Senior EVP (second from right), and leaders of BIDV Card Center hold the Best Merchant Service award plague

On 12 August, BIDV was honoured to once again receive the “Best Merchant Service in Vietnam” from The Asian Banker.

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he Asian Banker spoke highly of the value of BIDV’s payment solutions. Over the past three years BIDV has been among the pioneering banks to offer breakthrough and market-leading card payment acceptance services by applying advanced technology. The bank developed a variety of products in order to meet the demands of multi-channel payments including POS/mPOS payment service, e-Merchant service, QR payment and non-cash hospital fee payment.

All of these provide a different user experience and are tailored to different types of businesses.

BIDV also provides cashless payment solutions in line with market trends, helping customers better manage their

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Since its establishment over 60 years ago, BIDV has grown into one of the country’s leading financial institutions, maintaining its position as the largest commercial bank by assets and amongst the top four banks with the largest card payment volume. The bank has received the prestigious "Best Merchant Service in Vietnam” award for two consecutive years, affirming the effort put into researching and launching advanced solutions to meet the diverse needs of businesses.

The Asian Banker, based in Singapore, is the region’s most authoritative provider of strategic business intelligence to the financial services community. Its business revolves around three core business lines: publications, research services and forums.

BIDV Highlights

M anh Hai

Sustaining stable business performance amid Covid-19 The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) has released its financial report for Q22020. The bank’s business performance remained stable despite the turbulent business climate resulting from the Covid-19 pandemic.

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ver the first six months of 2020, due to the impact of the Covid-19 pandemic and other cyclical factors, BIDV’s deposits and outstanding loans increased slightly compared to the beginning of the year. Off-balance sheet debt collection faced difficulties and profit before tax decreased over the same period. However, net service incomes and differences between revenue and expenditure were ensured.

Of particular note, BIDV made sufficient provision for VAMC bonds in accordance with regulations and bought back all VAMC bonds in the first quarter of 2020.

As of 30 June, BIDV posted total consolidated assets that reached over VND1,446 trillion (USD62.3 billion), down 2.93 percent compared to the beginning of the year. Loans to customers of the commercial banking sector alone reached nearly VND1,104,484 billion (USD47.6 billion), an increase of over VND22,927 billion (USD988 million) or 2.12 percent year to date. The slow increase in outstanding loans at BIDV as well as at a number of other banks was mainly due to the impact of the Covid-19 pandemic.

Credit packages designed to support customers affected by the pandemic need time to be effective as well as to

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reach market absorption capacity.

The non-performing loan ratio of the commercial banking sector alone was controlled at 1.89 percent. BIDV conducted an overall review of its customer base (financial position, solvency and level of damage of each customer) to take appropriate measures, ensuring safe and effective credit growth and controlling the NPL ratio.

Deposits by customers within commercial banking alone reached over VND1,111,400 billion (USD48 billion), up 1.52 percent compared to the beginning of the year. Deposits decreased in the first quarter of the year before stabilising again in the second quarter.

Consolidated figures as of 30 June showed that net service income (excluding guarantee fees) hit over VND2,264 billion (USD97.6 million), up VND296 billion year-on-year (equivalent to 15 percent). Income from forex trading reached VND832 billion (USD35.9 million), an increase of VND97.4 billion (equivalent to 13.3 percent) year-on-year. Income from trading securities and investment securities reached VND421 billion (USD18 million) and VND 669 billion

BIDV Highlights

(USD28.8 million) respectively, with a net increase of VND333 billion and VND932 billion year-on-year, respectively.

Consolidated difference between revenue and expenditure reached more than VND14,596 billion (USD629 million) and profit before tax was VND4,454 billion (USD192 million).

BIDV has made full provision for risks according to loan classification and operational safety indicators were ensured according to regulations.

BIDV said it would focus on closely monitoring the system situation, reviewing the impact of the pandemic towards increasing non-interest income, strengthening e-banking services, maximising income sources and controlling costs.

BIDV continues to be one of the pioneers in supporting communities affected by the Covid-19 pandemic.

The bank has rendered timely efforts to support businesses and local people through banking operations and direct social security programs, contributing to stabilising daily living, production and business activities. BIDV plans to use VND3,500 -4,500 billion (USD172 million) in 2020 to support customers to overcome the impact of Covid-19.

A teller wearing face mask at a BIDV transaction office

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BIDV Highlights

K ieu Oanh

Moving customers to digital

BIDV is speeding up its digital transformation in order to improve customer experience.

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n 12 August, BIDV kicked off a campaign themed “BIDV Digi Up – Change to lead”. This marks a bold step from the bank in endeavoring to digitally transform its banking business with the aim of better serving its customers.

Following the main event, BIDV held a talk show entitled “Engage customers with the BIDV ecosystem and digital platforms”. Guest speakers including representatives of the Payment Department under the State Bank of Vietnam, BIDV management and Ernst & Young and Vietnam Payment Solution Company (VNPAY) delivered and exchanged solutions for BIDV to build an ecosystem of consumer

finance and payment facilities for customers.

and under. With this great advantage in terms of customer base, IT application capacity and determination to lead change, BIDV is aiming for 80 percent of its customers to access and use its products and services via digital channels by 2025.

Mr. Le Ngoc Lam, senior executive vice president in charge of the BIDV Board of Management, stressed: “Digital transformation at BIDV does not stop at data digitisation but goes beyond that, focusing on improving the customer experience. By putting itself in its customer's shoes, BIDV has understood their needs and is striving to provide a superior digital experience.

Customers are at the centre of BIDV’s digital transformation decisions.”

According to Mr. Tran Phuong, BIDV's senior executive vice president, between 2015 and 2019, total budget BIDV invested in information technology projects was over VND1,200 billion (USD51.7 million), with digitization projects accounting for 2/3 of the total budget. In the next phase, 27 projects with expected budget of over VND1,400 billion (USD60.3 million) will continue to be deployed to serve the digital transformation and customer engagement.

BIDV boasts potential for moving customers online with 50 percent of its individual customers being 35 years

According to statistics, in 2019 there were 154 Fintech companies, twothirds of which provide consumers

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BIDV Highlights

Leadership of BIDV with their signatures at the digital transformation campaign in Hanoi

with online payment tools, money transfers and peer-to-peer loans.

Vietnam now has 70 credit institutions and payment intermediaries such as e-wallets providing payment services online and through phone apps.

in Vietnam. This is the biggest barrier to digital banking development and according to Pham Tien Dung, director of the State Bank of Vietnam’s Payment Department, there is a need to change people's mindsets.

Mr. Tran Tri Manh, the leader at VnPay - the number 1 payment intermediary firm in Vietnam, affirmed: “It is impossible to embed technology in an old model. Digital platform should be accompanied by a diverse ecosystem, operating in a new way. Banks have the advantage of their products and services but they also need to cooperate with companies or fintech with large ecosystems and large customer base.

Mrs. Nguyen Thuy Duong, president of EY Vietnam, said besides the changes in technology and working culture, the main pillar for BIDV to achieve the goal of the best bank with digital platform is the smooth and balanced combination between business goals and technological solutions, providing customers the fastest and most flexible experience.

With a customer base of 11 million individuals and 321,000 corporates, BIDV has a greater advantage in customer data than other banks and Fintech companies in the market.

The effective exploitation of this data source is of great significance, enabling BIDV to transform digitally and improve its competitiveness, potentially creating more breakthroughs.

However, obstacles remain such as the deeply entrenched habit of using cash that exists

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BIDV Highlights

Ngu y en Tran

Driving digital transformation in the banking sector BIDV has defined technology and digital banking as one of the pillars in its development strategy to 2025, with a vision to 2030.

Taking the lead Vietnam is witnessing the strong impact of Industry 4.0 which has comprehensively changed the way products and services are supplied.

Against that background, transforming into a digital-based business model is inevitable, helping banks overcome challenges, create competitive advantages, and proactively adapt and develop sustainably.

Digital transformation is challenging, but an irreversible process. Mr. Phan Duc Tu, the board chairman at BIDV emphasised: “Digital transformation is no longer a concept, but a specific action, which decides the survival of any organisation, including banks. Digital transformation requires strong will and relentless determination as well as courage of the whole system in discarding the old and creating the new. BIDV defines efficiency as the first goal and modern technology as a breakthrough, with customers as the centre of business and human resources as the core.”

Catching up with the development trend, in March last year BIDV officially launched its Digital Banking Centre, marking an important step in the bank’s development strategy and

BIDV is one of the pioneers in establishing a Digital Banking Center

Customer using BIDV SmartBanking

vision to 2030. The establishment shows the bank’s efforts and focus in digital transformation beyond the general strategy. The centre aims to be an innovative hub of BIDV, producing advanced and modern customer-centric products as well as experimenting with new technology-based business models.

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BIDV has focused resources on speeding up digital transformation and synchronously developing modern distribution channels such as internet banking, mobile banking, SMS banking, web chat, Facebook and Youtube. The bank has also built self-service channels (e-Zones) at its transaction offices and cooperated to launch innovative products including Samsung Pay, QR Pay, Chat-bot on Mobile banking applications, Swift GPI, and ATM withdrawal via mobile phones. As well as these, the bank has developed its BIDV Home app, applying Blockchain, new technology in Robotics and artificial intelligence; deploying and building big data exploitation models and unstructured data, and applying analytical models for assessing customer lifecycle value, marketing, and cross-selling.

BIDV Highlights

are as follows: first, digital finance and banking, including non-cash payment, electronic money, and digital money; second, increasingly fierce competition between commercial banks with Fintech and Bigtech. The banking system should continue to restructure and establish a better financial ecosystem for customers. Third, moving towards standards (such as Basel II, III); forth, increasing integration; and fifth, developing green finance.

Previously, BIDV had implemented a number of strategies to realise the digital transformation strategy such as allying with strategic investor Hana Bank to enhance financial strength and learn the most advanced technologies; contracting with Ernst & Young to build a digital transformation strategy; launching high-tech banking products and services; and cooperating with Fintech/Big Tech companies to diversify and expand the ecosystem to gain customer loyalty.

Currently, BIDV has connected with 24 Fintech companies and 756 service suppliers to provide more than 1,500 payment services to customers.

Moving forward Through applying proactive measures, BIDV has achieved positive results in digital transformation. These include converting a significant number of transactions to digital channels and promoting non-cash payments. These results are of great significance in the current period, while social distancing measures are in place to prevent the transmission of Covid-19.

As of the end of the second quarter of 2020, the number of individual

customers registering for e-banking services at BIDV had reached 5.12 million. The proportion of customers using e-banking services to the total number of existing customers had increased to 42.4 percent from 32.4 percent in 2018. By the end of the second quarter, the number of e-transactions had reached 88.4 million, accounting for 50 percent of the total number of transactions compared to 38 percent in the same period last year.

Transaction volume in the first quarter of 2020 reached VND1.34 quadrillion (USD57.8 billion), equal to 67.1 percent of the whole of last year. Although the transaction values via digital channels accounted for a small proportion of about 9 percent, the trend is increasing with bill payment transaction volume as of the second quarter of the year 50 percent higher than that of 2019. 24/7 money transfer transactions increased sharply - in the second quarter of 2020 alone they were higher than those of the whole of 2018 and equal to 75 percent of 2019.

The banking sector needs to strongly restructure in order to keep up with the five main trends in the context of Industry 4.0 and post-Covid-19. These

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With bank wide digital transformation being defined as an indispensable requirement, BIDV has shaped solutions to promote the development of digital banking, specifically: strengthening capacity, standardising IT infrastructure and information security measures; standardising and automating banking operations based on a technological platform; developing digital banking products and services to boost business operations, striving to successfully deploy digital banking model by 2025; integrating distribution channels to create the easiest conditions for customers to access and connect with the bank; and building a financial services ecosystem with the most preeminent digital platforms.

With strength in facilities and people; the solidarity and unanimity of more than 25,000 employees, and building on the achievements of Industry 4.0, BIDV is confident it will achieve more successes on the journey towards digital transformation, creating solid foundations to realise its vision of becoming the leading financial institution in Southeast Asia with the best digital platform in Vietnam, as well as striving to be among the Top 100 largest banks in Asia.

market movements

Tr o ng Khoi

Vietnam aims to become a digital nation by 2030 and accessible from localities across Vietnam. A database of public agencies will be created, allowing each Vietnamese citizen or company to fill out registration forms just once for all services.

In the report "Vietnam's future digital economy towards 2030 and 2045" published by the Ministry of Science and Technology of Vietnam and the Commonwealth Scientific and Industrial Research Organisation (CSIRO) of Australia, the trends affecting the development in Vietnam’s digital economy have also analyzed and presented.

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he Prime Minister’s Decision No.749/QD-TTg approving the “National Digital Transformation Programme by 2025 with a vision to 2030”, aiming to realise the dual goals of forming a digital government, a digital economy, and a digital society, while establishing digital businesses that have a global competitive capacity.

Most notably, the digital economy is projected to make up some 20 percent of the country’s GDP in the future, with the proportion of the digital economy in each economic sector reaching at least 10 percent, whilst annual labour productivity will likely increase by at least 7 percent.

In addition to this economic transformation, Vietnam is set to be among the top 50 countries in terms of the information and communication

technology development index (IDI) within the next five years, among the top 50 countries in terms of the global competitiveness index (GCI), and in the top 35 countries in terms of the global innovation index (GII).

To develop a digital society, the digital gap must be narrowed, with the schedule for change ahead to 2025 outlining that the fibre optic network infrastructure will reach out to more than 80 percent of households and 100 percent of communes nationwide.

By 2025, 80 percent of online administrative procedures should be available on smart phones and other devices. A national database which makes up the foundation of e-government, including Population, Land, Business Registration, Finance, and Insurance, will be completed

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According to the report, the next wave of digital technologies – artificial intelligence, blockchain, the Internet of Things, and platforms and cloudbased services – has the potential to transform Vietnam into Asia’s next high-performing economy, and to bring up the living standards of all of Vietnam’s citizens over the coming decades.

E-commerce is one of the fastestgrowing segments of Vietnam’s digital economy. According to the Vietnam E-commerce and Information Technology Agency (VECITA), the nation’s e-commerce market is growing by 35 percent per year – 2.5 times faster, for example, than Japan.

Vietnam’s online retail revenue reached USD6.2 billion in 2017, over double that of 2014. By 2020, VECITA predicts the number of online shoppers will increase by 52 percent, while the Vietnam E-Commerce Association (VECOM) predicts online revenue will reach USD10 billion.

market movements

Vu Hoa

Banks rush for digital transformation

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he trend of integrating modern technologies in the banking industry has been indispensable to meet customers’ requirements for convenience in the Fourth Industrial Revolution era, especially in the context of the re-outbreak of the COVID-19 pandemic.

According to statistics, Vietnam currently has 88.5 million bank accounts. Only 63.7 percent of Vietnamese adults have a bank account. Meanwhile, the rate of using smartphones in Vietnam is very high.

In the past year, the race to launch digital banking and upgrade apps to super apps is getting hotter. Many banks said that 2020 is the year of digital transformation, focusing on investment in technology.

Since the beginning of the year, a series of banks have launched digital banking experience services to customers such as VPBank, BIDV, Vietcombank, HDBank and Vietinbank.

VPBank is the first bank in Vietnam to deploy e-KYC. The bank uses four technologies at the same time for opening online accounts including artificial intelligence (AI); OCR technology separating and comparing information on identity cards; biometrics technology to compare whether a photo is being taken with an identity card or not; and e-signature.

Mr. Nguyen Chien Thang, head of BIDV Digital Banking Center, said that digital banking is one of the three pillars of BIDV's development strategy to 2025 and vision to 2030. Accordingly, BIDV will focus on digitizing distribution channels, transaction systems, customer interaction to move towards comprehensive digitalisation.

Many other banks have been racing to develop digital banking. In fact, each bank has a different orientation to digital banking, depending on its customers. If Timo Digital Bank under VPBank is at the forefront of the digital

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banking revolution with the policy of fewer branches and transaction offices, TPBank has a strategy of density coverage with automatic ATMs (LiveBank). Maritime Bank (MSB) selected Mambu and its cloud-based banking platform to sit at the heart of its digital transformation project.

Vietcombank recently launched its new digital bank service - VCB Digibank, integrating its online trading platforms. The service has been developed based on a combination of internet and mobile banking platforms to provide a unified experience for customers.

Nam A Bank launched Vietnam’s first banking robot. Robot OPBA, as it is called in the bank, stands at the bank counters to welcome customers. In June, VietinBank piloted “Smart Digital Branch”, a disruption in applying biometric technology to the bank’s operations.

market movements

Vietnam needs new drivers of growth to consolidate post-Covid-19 recovery While Vietnam’s economy has been seriously impacted by Covid-19, it remains resilient and is poised to bounce back, according to a new World Bank report.

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ccording to the latest Taking Stock report, titled “What will be the new normal for Vietnam?

The economic impact of Covid-19”, released on 30 July 2020, although the Vietnamese economy suffered from Covid-19 in the first half of 2020, prospects remain positive for both the short and medium term. If the world situation gradually improves, economic activity should rebound in the second semester of 2020 so that the economy will grow at around 2.8 percent for the entire year, and by 6.8 percent in 2021.

With less favorable external conditions, the economy will expand by only 1.5 percent in 2020 and 4.5 percent in 2021.

The main challenge for Vietnam will be finding new drivers of growth to consolidate the expected recovery.

The country’s traditional sources of growth–foreign demand and private consumption–are unlikely to return to their pre-crisis levels soon, amid continued uncertainties both at home and abroad. Covid-19 has also caused a surge in inequality as the pandemic affects businesses and people differently as, for example, workers in the service sector has seen a bigger decline in their income than farmers.

“To adapt to the new normal, policymakers must find new ways to compensate for the weakening of the traditional drivers of growth while managing rising inequality,” said Stefanie Stallmeister, World Bank Acting Country Director for Vietnam.

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“However, by being ahead of the curve of the Covid-19 crisis, Vietnam has the unique opportunity to increase its footprint on the global economy and become a leader in tomorrow’s digital world.”

market movements

investments. The second measure is to accelerate the execution of the existing public investment program to enhance domestic demand. However, the effective implementation of this action will require significant improvements in the allocation of resources and financial management. Indeed, the authorities will need to ensure that their resources are directed to the projects with the biggest positive impact on the economy and jobs, while minimizing technical and financial losses during implementation. Third, it should provide targeted support to the private sector, particularly to the hardest-hit industries such as tourism and manufacturing exports, through a combination of financial assistance and smart incentives.

The report suggests three complementary measures for the government to act today so that the country can avoid the Covid-19 economic trap and return to its historical trajectory of rapid and

inclusive growth. First, it should consider removing mobility restrictions on international travel, gradually and carefully to balance with safety concerns, as Vietnam’s economy is dependent on foreign visitors and

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Vietnam can also exploit several global trends, which have been accelerated

by Covid-19, to push ahead its domestic agenda. For example, in a new global trading system, Vietnam can consolidate its existing footprint by developing strategic alliances with countries that have also low rate of Covid-19-infections and boosting promotion efforts to attract companies planning to diversify their supply chains. Similarly, Covid-19 presents a unique opportunity to move toward a more “contact-free� economy by promoting digital payments, e-learning, telemedicine and digital data sharing and, by so doing, help respond to the fast-expanding demand for quality services by the middle-class in the country.

partners

Q u y nh Nguye n

Hana – BIDV partnership The strategic partnership with Hana Financial Group, Hana Bank is of great significance to BIDV, marking a milestone in BIDV’s development and international integration.

capital. This is the biggest M&A deal with a strategic investor in Vietnam's banking industry The strategic partnership with Hana Financial Group, Hana Bank is of great significance to BIDV. Through the partnership, BIDV receives a long-term technical assistance from Hana Financial Group and Hana Bank, including but not limited to 6 areas: strategic corporate governance; technology and digital banking; retail banking development; diversified asset portfolios; risk management; human resources training and development.

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ana Financial Group is one of the leading groups in Korea, ranking 81st globally. The group continues to improve its professional, distinctive global financial services through the expansion of its global presence. Moving beyond the Korean market, Hana Financial Group is now in a position to become a world-class financial group with an extensive scope of operations, and to possess the largest global network in the Korean financial industry. As of May 2020, Hana Financial Group had had 216 entities and branches in 24 countries around the globe.

KEB Hana Bank (through the merger of Korea Exchange Bank and Hana Bank) is a member of Hana Financial Group. The bank is the third largest bank in Korea by total assets (over KRW383,113 billion, equivalent to USD325 billion as of 31 March 2020).

In February 2020, KEB Hana Bank has changed its brand name to Hana Bank for two goals: increasing customer convenience and enhancing brand value by unifying HFG’s brand name as “Hana”. Hana Bank has 705 branches in Korea, 198 branches in 24 countries, is the best retail bank, the most preferred brand, and the leading bank in foreign

After the partnership, the two sides quickly established a strategic cooperation committee to promote cooperation activities. Hana sent experts to directly participate in BIDV’s governance and management activities. Particularly, Hana Bank headquarters Specifically, the bank sent 01 representative to join the Board of Directors, 01 to the Board exchange and trade finance in Korea. of Management and 10 to work at 11 departments and centers at BIDV Hana Bank has officially become headquarters. This demonstrates BIDV’s strategic shareholder since Hana leadership’s commitment November 2019, owning 15 percent and determination to providing of the Vietnamese lender’s charter comprehensive support in all aspects of operations of BIDV.

BIDV and Hana Bank partner on credit cards for businesses

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Hana bank is the first leading bank in Korea to become a strategic shareholder at a Vietnam commercial bank. The cooperation between Hana Bank and BIDV is the strategic relationship between the two leading financial institutions of the two countries in an effort to further promote economic and diplomatic relations between the two countries.

partners

M anh Hai

LVI partners for improving digital experience the company’s business activities in particular and the Laos’ insurance market in general. He also proposed the Traffic Department of the Laos Security Ministry to popularize the use of e-certificate for vehicle insurance across the country to facilitate people.

BCEL is the largest bank in Laos and a founding shareholder of LVI in addition to BIDV Insurance Corporation (BIC). LVI ranks second by market share in Laos.

LVI and BCEL sign a cooperation agreement on insurance products

On 5 August 2020, Banque Pour Le Commerce Exterieur Lao (BCEL) and Lao-Viet Insurance Joint Venture Company (LVI) signed a cooperation agreement and launched electronic insurance certificate and insurance service payment via BCEL One and BCEL i-bank apps.

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ccording to the agreement, customers can buy new, renew and pay for LVI's motor vehicle insurance and health care products through the BCEL One, BCEL i-bank.

LVI is the first insurance company licensed by the Laos Finance Ministry to deploy electronic insurance certificates to customers through applications of banks and telecommunications companies.

Customers buying LVI's insurance through the applications will receive an electronic insurance certificate on their mobile phone as replacement for the hardcopy certificate.

Mr. Nguyen Viet Hai, Chief Executive Officer of LVI, proposed state regulators to continue supporting

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Previously, LVI implemented this service via U-Money, a mobile payment app developed by Unitel (a member of Viettel Global in Laos). The company is the first in Laos to implement new insurance selling channel via Mobile Money, Internet Banking and e-insurance certificate. LVI said it would continue to work with other banks and telecom companies to universalize this type of issuing insurance to optimize customer convenience and business efficiency.

LVI, established and officially launched in June 2008 in Laos, is a joint venture between BIDV Insurance Joint Stock Corporation and Banque Pour Le Commerce Exterieur Lao and Lao-Viet Joint Venture Bank. The company's main business lines include non-life insurance, reinsurance and financial investment services. As of 31 December 2019, total assets of the company hit USD16 million.

Policy update

Tu an Linh

Decree raises standards for corporate bond market

six months of 2020, 130 enterprises issued bonds, mobilising a total of over VND156,000 billion (USD6.7 billion) through 818 issuance batches (up 50 percent year-on-year). The size of the corporate bond market grew at an average rate of 45 percent per year from 2017 to June 2020.

The government’s Decree 81, which comes into effect on 1 September 2020, will help raise standards in the corporate bond market as well as removing low-quality issuers in order to better protect investors.

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report released by the BIDV Training and Research Institute said that since the end of 2018 when Decree 163 was promulgated, the corporate bond market has made great leaps. Market capitalisation in 2018 was only 9.01 percent of the country’s GDP, but increased to 10.85 percent in 2019, equivalent to about VND640,000 billion (USD27.6 billion).

Volume of corporate bonds issued in 2019 reached over VND332,000 billion (USD14.3 billion). In the first

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According to experts from BIDV Research and Training Institute, although this is a good signal for the economy and the financial system, it shows signs of "hot" growth. Except for institutional and professional investors, the increased investment by individual investors (including those who do not have the ability to analyse and evaluate, but are only interested in interest rates) will pose risks to investors, issuers and market stability.

Risks are also persistent as some companies have issued bonds with total values beating their equity capital by many times.

Policy update

before the issuance is shortened to at least three working days from at least 10 working days.

Decree 81 promulgated on 10 July 2020 aimed to amend and supplement a number of articles of Decree 163 regarding private placement of bonds to make the market more sound and control risks. Following are some new provisions of Decree 81.

First, limiting the size of private issuance based on capital of the business: Decree 81 requires enterprises to meet financial safety ratios according to specialised laws.

In particular, outstanding balance of private placements at the time of issuance must not exceed its owner’s equity by three times according to the latest quarterly financial statements.

At the same time, the outstanding balance of bonds (including the volume expected to be issued) and outstanding balance of private placements must not exceed owner’s equity by more than five times (not applicable to credit institutions).

Second, limiting the division of private placements into smaller groups or different batches to increase capital mobilised from individual investors.

Decree 81 reduces the number of times for bonds issued by enterprises, regulating that the gap between two issuance batches must be at least six months and each issuance must be completed within 90 days from the date of disclosure.

Third, specifying the purpose of capital use in the private placement documents: businesses must specify the purpose of bond issuance in the issuance documents. For credit institutions, the purpose of the issuance is to increase tier 2 capital and/or to lend, invest or for other purposes.

Such information must be clearly disclosed through the commitment by investors that they have fully accessed the disclosed information prior to the issuance and understood the potential risks. Time for information disclosure

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Fourth, enhancing the professionalism of and supervision over private issuance by businesses. Decree 81 requires issuers to sign a consulting contract with an issue advisory firm, unless the issuer is an organisation permitted to provide an issue advisory service. Accordingly, the issue advisory company must be responsible for reviewing the meeting of conditions on issuance and documents as specified in Decree 81 as well as other relevant legal regulations. In addition, Decree 81 also regulates sanctions for violations of private issuance.

Last but not least, the decree requires clearer information disclosure and synthesis, with businesses required to make full information disclosure according to guidance from the Ministry of Finance. Issue advisory organisations shall report periodically on the issue advisory. Stock Exchanges shall be responsible for synthesising information on corporate bonds and making reports on a monthly, quarterly and annual basis. Such amendments are expected to have positive impacts on information disclosure, helping competent authorities promptly regulate the development of the market.

Policy update

M inh An

State Bank extends roadmap for ratio of short-term funds for long-term loans

T

he governor of the State Bank of Vietnam (SBV) recently issued Circular 08/2020/TTNHNN amending and supplementing a number of articles of Circular 22/2019/TT-NHNN dated 15 November 2019, primarily by stipulating the prudent limits and ratios in the operations of banks and foreign banks’ branches. The new circular will take effect from 01 October 2020.

Accordingly, banks and foreign banks’ branches are required to comply with regulations on the maximum ratio of short-term capital resources utilised for providing medium and long term loans. Specifically, these are set at 40 percent from 01 January 2020 until 30 September 2021; 37 percent from 01 October 2021 until 30 September 2022; 34 percent from 01 October 2020 until 30 September 2023; and 30 percent from 01 October 2023.

With the new circular, the State Bank of Vietnam has extended the roadmap of dropping off the short term capital proportion for medium and long term loans for a further year.

According to the circular drafting team, banks need to continue maintaining the proportion of short term capital in the capital mobilisation structure to reduce costs, enabling them to offer preferential interest rates for customers. Reducing the maximum proportion of short term capital used

for medium and long term loans in the first instance from 40 percent to 37 percent as stated in the new circular may lead to difficulties for banks’ in terms of their capital structure plan.

With the impact on production and business activities resulting from the pandemic, customers’ deposits at banks are expected to decrease. Therefore, in order to keep implementing preferential interest rate policies and maintain a stable medium- and long-term debt for customers, the SBV is considering delaying the roadmap for reducing the ratio short-term capital used for medium- and long-term loans.

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The delay of the roadmap of tightening the ratio of short-term capital sources used for medium and long-term lending is necessary to help credit institutions better support customers restoring their businesses after the pandemic.

The SBV has made amendments on the maximum ratio of short-term capital used for medium and long-term loans. Circular 36/2014 tightened the ratio to 60 percent, which has since been tightened to 45 percent before the most recent tightening to 40 percent as stated in Circular 22/2020.

products & services

Ho ng Vu

VND30,000 billion loan at introductory rate of 6 percent p.a.

Aiming to continue to support individual customers to maintain business activities during the Covid-19 pandemic, from 27 July to 30 September 2020 BIDV is implementing a new business loan package titled “Connecting to reach further” with a total value of VND30,000 billion (USD1.3 billion).

T

he new package is a continuation of the previous one of total value VND50,000 billion (USD2.16 billion), launched on 5 June this year.

With the new package, customers are able to choose different loan packages and enjoy attractive interest rates, specifically from 6 percent p.a. for loans with terms of less than six months and from 6.5 percent p.a. for terms from 6 to 12 months.

l Additional 0.5 percent interest rate p.a. for online savings.

l Reduction of up to 70 percent interbank transfer fees.

l 100 percent value of top-up mobile amount (up to VND100,000 (USD4.3)/ customer) refunded when registering for BIDV SmartBanking and conducting a top-up mobile transaction via the app.

l Special offer on credit insurance and credit cards from time to time.

Since the beginning of the year, BIDV has disbursed more than VND80,000 billion (USD3.45 billion) at low-cost interest rates in order to support

The program applies to new loan disbursements from27 July 2020.

Introductory rate

6%

/p.a.

Customers applying for production and business loans during this time will also be offered many promotions from other products and services such as e-banking and insurance amongst others, to effectively manage their personal accounts, such as: l Waiver of e-banking service maintenance fee.

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individual customers with their business and production needs. Such loan packages have been well received by customers and fully disbursed before the expected schedule.

BIDV is proud to be the first and only bank to receive the “Vietnam Outstanding Retail Bank” award from the Vietnam Banks Association (VNBA) and the International Data Group (IDG) for four consecutive years (2016 – 2019) and the only bank to be honoured with “Best Retail Bank Vietnam” award for five consecutive years (2015 - 2019) by The Asian Banker.

lifestyle

Magical beauty of Ta Phin monastery Travelling to Sa Pa town in Lao Cai province is always a rewarding journey full of special experiences and Ta Phin monastery is becoming a popular spot amongst visitors to the town.

L

ocated in Ta Phin village, about 12 kilometres away from Sa Pa town, Ta Phin monastery is easily recognised due to its colonial French architecture.

The monastery was constructed in October 1942, however just three years later the nuns who had been residing in it left for Hanoi and the building fell into disrepair.

Red Dao people have extensive knowledge and experience of medicinal (left)

Nowadays, Ta Phin monastery is a ruined, desolate building often shrouded in fog. Surrounded by dense trees, it reminds one of scenes from fairy tales. The beauty of the

ruined monastery lies in its period architecture, nostalgia and mystery.

The part that has not been lost to the ravages of time captures the imagination of visitors to the former religious building, with architectural features in the old European style.

The gate of the monastery is built of stellar stone with an arched gate in the French style. The outer wall is a laterite layer. Going deep inside, visitors will see the walls and mossy windows in several layers that are still solid and firm. Each wall is imprinted with time.

The monastery has three floors including an underground basement and a west-facing horizontal house with five chambers and a staircase.

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lifestyle

the brocades are mainly produced for shops in Hanoi and Ho Chi Minh City as well as for export.

Due to their lifestyle of inhabiting valleys at the foot of high mountains, the Red Dao have extensive knowledge and experience of plants. The people

In addition, the right side of the monastery has a vertical house connected to the horizontal house.

Here, food and other items were stored and the monastery kitchen was housed.

Today, the entire roof has gone and only the old moss-covered walls remain.

In front of the monastery, there is a large and long corridor in partial ruins.

Although it has been abandoned for over half a century, the architectural features and serene ambience of the monastery are a major attraction. It seems that at any angle and in any location throughout the monastery, visitors can create a unique scene.

Opportunities abound for photography enthusiasts, who render images of faded colours mixed with the wilderness of time and a dash of nostalgia.

Ta Phin village itself attracts visitors with the unique cultural characteristics of the Red Dao ethnic people. Unlike the Mong and Giay people, the Red Dao have a very small population and are less well known. Their villages are often located in remote valleys and on mountain slopes.

Many villages in Sa Pa today have been

modernised but Ta Phin village is different and is one of the few villages in Sa Pa that still retains its cultural identity.

The road leading to Ta Phin village winds through mountain scenery, magnificent clouds and the splendid colours of terraced fields. The locals here are friendly and often invite visitors into their homes.

Ta Phin is a brocade village where visitors can find brocades made by ethnic minority people. These days

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are known for their bath remedies made from hundreds of different plants. Among them are 10 principal and most important medicinal plants used for creating valuable medicines of the Red Dao people in Ta Phin.

Today, Red Dao herbal baths - a cultural and unique identity of every family in the Dao ethnic community - have become famous throughout the country as a trusted remedy from the Red Dao. Experiencing a Red Dao herbal bath is a great reason to go to Ta Phin village the source of the unique remedies.

lifestyle

Q u y nh Chi

Bau Trang,

A desert in a tropical land

B

au Trang (or White Lake), also known as Bach Ho, Bau Cat and Bau Sen, is located 60km from Phan Thiet city. Bau Trang offers visitors a magnificent view of a vast ​​lake surrounded by majestic sand dunes, much like a mini Sahara in Vietnam.

The road around Bau Trang is considered the most beautiful of all lakeside roads in Vietnam. It winds gracefully around the lake, offering romantic views of the clear water backed by widely-stretched sand dunes. A wander along the road affords visitors plenty of chances to admire the immense sand dunes stretching out to the horizon. As the dunes undulate across the landscape their colours turn softly from yellow

to red and then white. The natural wonder stretching from both sides of the road will continually surprise and dazzle throughout the journey.

Motor-gliding and Jeep car riding are the most popular activities at Bau Trang with tourists, who like to take their time exploring the sand dunes. Those who embark upon the hot climb up the sand dunes are rewarded with the sight of a sparkling silver lake in the brilliant sunlight and pink lotuses flickering behind the verdant green leaves.

Bau Trang was for a long time a huge lake, before local people filled part of it with sand. As a result, a road appeared, crossing through the lake. The road separates Bau Trang into two parts -

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Bau Ong (Mister Lake) and Bau Ba (Lady Lake). Bau Ba stretches across an area of 70 hectares. In lotus season, the whole lake is carpeted in lotus flowers.

lifestyle

can gain a closer look at the blooming lotuses.

A more tranquil and relaxing activity in Bau Trang is to take a ride in a small boat. The boat will take you to the middle of the vast lake, where you

The water in the lake is sweet and clear and fish can be seen darting around under the surface of the water. The lotus blossoms give a sweet fragrance to the peaceful atmosphere.

Next to Bau Trang is a cool poplar forest, where one can grab a hammock and take

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a leisurely rest in the shade of the foliage.

Amid the vast sandy desert, bright white sand and clear blue sky, the orange of Bau Trang’s Journey car is so vivid that you can’t help but take a picture with it. The Journey car sells snacks and drinks from bottled water to coconuts and fruit juice. Its design makes one feel as though they have travelled to Texas, America.

CSR

Ti en D at

Trung Hoa Kindergarten funded by BIDV provides better facilities for local teachers and children

Giving wings to children’s dreams On 1 August BIDV held a handover ceremony with representatives in Hung Yen province for the new Trung Hoa Kindergarten 2 in Thien Loc Hamlet, Hung Yen Province.

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rung Hoa Kindergarten was constructed at a total cost of VND5 billion, 100 percent of which was funded by BIDV. The work consisted of three classrooms, restrooms, a spacious dining room and a large, tree-filled yard surrounded by a fence. The construction started in June 2019 and was completed as planned by July 2020.

Excitement for the newly-built school extended from the teachers and children to the locals of Thien Loc village. One parent commented: “We are very happy to have received this support and attention from the local authorities, the board of management of Trung Hoa Kindergarten and BIDV. From now on our children will have a spacious, clean and safe place for studying.”

Mr. Do Trong Hoach, chairman of the People's Committee of Trung Hoa Commune said: “Trung Hoa commune is located in the south of Yen My district, with a population of 14,000 people. It is still a purely agricultural commune and facilities for preschool education are limited. The support from

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BIDV in general and BIDV Bac Hung Yen branch in particular has helped the Thien Loc villagers, giving them a practical construction for education.”

Currently, Trung Hoa commune has only one kindergarten and six schools amongst all of its villages. Some schools admit students from two or three different villages and the facilities can’t meet the needs of all school-age children in the locality. One preschool teacher commented: “Since the schools are far away, some children had to study at Thien Loc village’s communal house, which was not equipped with classroom’s facilities. We used to wish for a standard classroom so we could take better care of the children. Now, they have been provided with spacious classrooms with environment-friendly decoration full of useful equipment.

Our dream has come true.”

This September, entering a new school year, the children in Thien Loc commune will be given wings to their dreams right in this school. BIDV is proud to have been able to support them on their paths to the future.

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U

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