VRB: 15 years a symbol of effective cooperation

BIcH ngoc

VRB leadership receives emulation flag from BIDV at the bank's 15th anniversary ceremony

With the mission of becoming a symbol of effective and comprehensive cooperation between Vietnam and the Russian Federation, after 15 years of establishment and development, Vietnam Russia Joint Venture Bank (VRB) has transformed strongly, acting as a bridge to promote economic, trade and investment cooperation between the two countries.

A SYMBOL OF COOPERATION

VRB was launched on 19 November 2006 in Hanoi under the presence of high-ranking leaders of the two countries, expressing the goodwill of the Government and the central banks of the two countries in promoting bilateral cooperation to new heights. The bank’s shareholding structure includes the Bank for Investment and Development of Vietnam (BIDV) and Bank for Foreign Trade of Russia (VTB), with an initial charter capital of USD10 million. VRB was expected to become a bridge that provides financial and banking services to support cooperation in the fields of trade and investment, and a symbol of effective and comprehensive cooperation between the two countries.

In the post-global economic and financial crisis at the end-2011, VRB's business activities faced great difficulties. Especially since 2014, VRB has faced difficulties due to the embargo imposed by the US and Western countries on the Russian Federation and related entities. Such embargos have been impacting VRB's activities in the current period. With the comprehensive support from BIDV in terms of mobilized capital, profitable asset portfolio, bad debt settlement, and governance capacity improvement, VRB has focused on implementing comprehensive restructuring to overcome the crisis.

At the end of the restructuring period, VRB was lauded by the State Bank of Vietnam as one of the few banks that basically fulfilled the objectives set out in the restructuring period. In 2016, VRB launched a bilateral payment system between Vietnam and the Russian Federation, marking an important milestone of efforts in developing a local currency payment channel between the two countries, serving payment, economic and trade cooperation activities between the two countries.

In the period of 2017-2021, with the determination to "promote the spirit of self-reliance, change for development", VRB actively reduced its dependence on the parent bank - BIDV, and implemented a sustainable development strategy. With relentless efforts, VRB achieved remarkable results at the end of the period, particularly:

Business performance has improved over the years. In 2018, VRB offset all accumulated losses, meeting the requirements on charter capital; the capital adequacy ratio (CAR) was at a high level of over 20 percent. VRB paid dividends in two fiscal years 2019 and 2020.

Total assets were expanded to VND21,500 billion (USD947 million), an increase of 1.6 times, mobilized capital increased by 1.6 times; loan balance increased by 1.7 times compared to 2015. The loan structure developed sustainably with a focus on retail and SME customers. By the end of 2020, VRB had achieved its target of increasing the ratio of retail and SME loans to total outstanding loans to 75 percent (higher than the target of 66 percent), helping drive the development and business performance of the bank. Credit quality has strictly been controlled with an NPL ratio of less than 2 percent.

STRONG MOVE TO THE FUTURE

VRB has progressively transformed its business operations towards a multiservice business. The bank's products and services have constantly been innovated and fine-tuned to meet the comprehensive needs of customers.

The joint venture has been a solid and reliable economic bridge that connects businesses of the two countries, becoming a symbol of economic, trade, banking, finance and investment cooperation, contributing to promoting the economic development of Vietnam and the Russian Federation. Up to now, besides the traditional payment channels such as Swift, CITAD, VRB has completed four service platforms: bilateral payment channel, MIR card, MOEX exchange, SPFS payment system, in order to increase utilities and support payment transactions of businesses of the Russian and Vietnamese businesses.

The bank has actively restructured, comprehensively and uniformly transformed into a modern, multifunctional retail banking model, building a risk management culture according to international standards, identifying customers as the center of business, technology and human resources as key to the bank's development. Currently VRB has a staff force of 500 employees and presence in six major cities including Hanoi, Ho Chi Minh City, Da Nang, Vung Tau, Khanh Hoa and Hai Phong.

Currently, VRB has a customer base with more than 50 percent being individuals, more than 30 percent being SMEs and FDI. Together with business scale expansion, VRB has persistently built a culture of customercentricity, compliance, transparency, and operational risk control. Thanks to the stability in operations and business development, in 2020 VRB was rated B2 - equivalent to that of major banks - by the world's prestigious rating firm Moody's.

Looking ahead, VRB focuses on implementing the strategy for the 2021-2025 period with a vision to 2030. Accordingly, VRB will continue to pursue the goal of "effective and sustainable development", becoming a bank leading in the digital platform, and one of the leading banks in terms of profitability among peers. VRB is set to fulfill all tasks, contributing to the socio-economic development of Vietnam, and upholding the role of being a bridge, a symbol of economic, commerce, banking, finance and investment cooperation between Vietnam and the Russian Federation.

On 19 November 2006, VRB was officially opened in Hanoi under the presence of the Vietnamese President Nguyen Minh Triet and Russian President Vladimir Putin. On the occasion of its 15th anniversary, VRB was honored to receive a Congratulation Letter from the Deputy Prime Minister of the Russian Federation and Emulation Flag from BIDV.