Growth potential of a young joint venture

Xuan Hoa

4 years is not a long time for an enterprise, but a meaningful period for BIDV - SuMi TRUST Leasing Co., Ltd (BSL). The company has overcome numerous difficulties and challenges in a volatile market to grow strongly.

BUILDING THE FOUNDATION

On 12 April 2017, BSL was established through the conversion of BIDV Finance Leasing Company (BLC, a wholly-owned subsidiary of BIDV) into a joint venture with BIDV owning 50 percent and Sumitomo Mitsui Trust Bank (Japan) owning 49 percent. BSL is the first finance leasing company in Vietnam to apply the joint venture model between a domestic commercial bank and a foreign financial institution.

In the period 2017 - 2019, BSL focused on building business strategies and tactics while continuously building and improving models, processes and regulations. Taking advantage of technology, know-how and international experience in developing financial leasing products from Japan, along with local experience in the financial leasing field in Vietnam, BSL has been finalising the risk monitoring and internal control system according to international standards to ensure that material risks are identified, detected and promptly responded to.

In 2020, economies in Vietnam and the world experienced significant fluctuations. The Covid-19 pandemic has brought production and services to a halt; businesses of all sizes faced serious difficulties. Against that backdrop, BSL's leadership gave timely and drastic directions and decisions to help the company overcome adversity and grow strongly, successfully meeting the 2020 goals.

BSL has uniformly deployed key solutions such as focusing on infrastructure developing customers and manufacturing customers in industrial parks, widely implementing sales and sublease programs to good customer segments, closely working with BIDV branches to support customers and diversify leasing products.

By the end of 2020, BSL's credit balance reached VND2,112 billion (USD91.8 million); profit after tax reached over VND32 billion (USD1.4 million), fulfilling 167 percent of the business plan.

Leaders and employees of BIDV - SuMi TRUST Leasing in a family photo

In early 2021, in response to the call from the Government and the State Bank of Vietnam, BSL has deployed a flexible financial leasing product package with preferential conditions to support businesses to overcome financial difficulties and stabilize their production and business.

FOSTERING CORPORATE CULTURE

As with business, BSL gives priority to fostering its culture. One of the highlights in the past 4 years is success in building a professional and proactive working culture. Along with that is building a culture of sharing and continuous learning to move towards best practices in management and business.

Operating in a joint venture environment, the cohesion between members from two countries is an important cause for the development of the company. Takahashi Satoshi, Deputy General Director of BSL, shared: “Through collective activities and exchanges, Vietnamese and Japanese employees strengthen cohesion, and deepen friendly cooperation, thereby promoting teamwork efficiency”.

MOVING FORwARD

Entering the 3-year period 20212023, BSL is determined to complete two important tasks: (i) Becoming a leading financial leasing company in terms of prestige and service quality; (ii) Developing sustainably, growing safely and being a socially responsible company.

Mr. Nguyen Thieu Son, General Director of BSL, affirmed: “Towards the goal of becoming a leading financial leasing company in Vietnam, BSL has a lot of work to do. In the immediate future, we need to face big challenges in 2021 as the pandemic continues, seriously affecting the production and business activities of most businesses, along with increasing competitive pressure in the market”.

“However, this is also an opportunity for BSL to continue to improve itself, listen to customers' needs and make products tailored to the needs of customers. Above all, the decisive factor for success is that BSL must always innovate, be creative and unite”, said Mr. Son.

Given the solid foundation established, with a new mindset, new spirit, each BSL officer is determined to fulfill the assigned tasks, putting customers at the center of business activities. Customers’ trust and satisfaction are the motivation for each individual to put more effort into the work.

BSL’s highlights after 4 years of operation

• Average loan growth: 110 percent/year; • Officially profitable at the end of 2019; • Granted credit lines by financial institutions including foreign banks; • Operational safety indicators and risk management limits are secured according to regulations of the State Bank and approval of the two parent banks.