Business Results for the Period 2009-June 30, 2012 According to Consolidated Financial Statements According to Vietnamese Accounting Standards.

stress.. Despite being affected by adverse impacts due to fluctuations in the business environment, with the outstanding efforts of the staff of the entire system, BIDV has transformed into a joint stock model. In terms of total assets, it has surpassed the 400,000 billion VND mark. Total assets at the end of the period reached 484,695 billion VND on December 31, 2012, an increase of 11% and ranked 3rd in the market.

Table 3: Business results for the period 2009-June 30, 2012 according to consolidated financial statements according to Vietnamese accounting standards.

Unit: Billion VND

Target

2009	2010	2011	June 30, 2012
Total assets	296,432	366,268	405,755	444,636
Net interest income	6,974	9,191	12,639	6,735
Net profit/(loss) from service activities	1,404	1,777	2,157	1.112
Net profit/(loss) from operating activities foreign exchange business	209	289	314	149
Net profit/(loss) from trading activities stock	722	(291)	(418)	182
Net profit/(loss) from other activities	611	387	607	294
Dividend income and profit and loss sharing based on p2 equity of investments into joint ventures and affiliated companies	234	135	115	127
Total operating income	10,154	11,488	15,414	8,599
Total operating costs	(4,536)	(5,546)	(6,652)	(3,342)
Net operating profit before risk provision expenses credit	5.168	5,942	8,762	5,257
Total profit before tax	3,605	4,626	4,220	2,345
Corporate income tax expense	(788)	(865)	(1,020)	(553)
Total profit after tax	2,817	3,761	3.209	1,779
Total net profit of the Owner have	2,817	3,761	3.209	1,779

Maybe you are interested!

Source: BIDV

Table 4: Financial performance in the period 2009- June 30, 2012

Unit: Billion VND

Target

2009	2010	2011	June 30, 2012
1. Scale
Charter capital	10,499	14,600	12,948	23,012
Total assets	296,431	366,267	405,755	444,636
Capital Adequacy Ratio (CAR)	9.53%	9.32%	11.07%	10.08%
2. Business performance
Deposit mobilization turnover	NA	5,392,141	6,283,273	3,639,905
Total mobilized capital	245,518	301,478	330,578	360,211
Loan Sales	NA	407,686	476,238	289,407
Debt collection turnover	NA	359,787	437,057	259,717
Outstanding credit (including loans) by ODA and entrusted sources)	206,402	254,192	293,937	325,756
Bad debt	5,534	6,424	8,122	9,984
Capital utilization ratio
+ Profit margin/Equity (ROE)	18.11%	17.95%	13.16%	N/A
+ Profit margin/Total assets (ROA)	1.04%	1.13%	0.83%	N/A
+Guarantee rate belongs to group 3,4,5/ Total guarantee balance	0.36%	0.26%	0.53%	0.67%
Bad debt ratio/total outstanding debt	2.80%	2.72%	2.96%	3.29%
3. Liquidity
Assets with immediate payment on debt payable	N/A	20.44%	18.55%	15.67%
Short-term funds are used to medium and long term loans	25.5%	25.7%	25.6%	23.3%

Source: BIDV

Although adversely affected by the economy, production and business activities of enterprises encountered many difficulties affecting the ability to repay debts as well as the credit quality of the Bank, but with the synchronous implementation of drastic solutions to control risks such as establishing inspection teams, promoting bad debt collection, handling bad debt flexibly and effectively. In the period of 2009 - 2011, BIDV had growth in scale and business performance, specifically:

- Scale Total assets grew well with improved quality: Total assets increased 1.4 times in the period 2009 - 2011 with an average growth rate of 17%/year. By June 30, 2012, BIDV's total assets reached 444,636 billion VND, an increase of 9.6% compared to December 31, 2011. Outstanding credit as of June 30, 2012 was 325,756 billion VND, an increase of 10.8% compared to 2011. The ratio of medium and long-term outstanding debt/Total outstanding debt remained stable (44.9% in 2011, 44.5% as of June 30, 2012). The credit structure has shifted in a more positive direction, reducing the proportion of loans to state-owned enterprises and non-production sectors (especially real estate and construction), increasing the proportion of retail credit. The total mobilized capital in 2011 was 330,578 billion VND, an increase of 9.6% compared to 2010. In the first 6 months of 2012, the total mobilized capital increased by 8.96% compared to December 31, 2011, reaching 360,211 billion VND. The capital mobilization structure has shifted in a more stable direction, through increasing the proportion of term deposits and specialized capital deposits. Customer deposits, especially individual customers, also accounted for an increased proportion of the total mobilized capital.

2.2. Analysis of credit activities in the period 2009-June 30, 2012 and credit quality of Vietnam Investment and Development Bank BIDV

2.2.1. General assessment of BIDV Bank's credit activities.

- Operating capital of BIDV Bank

Any business that wants to operate effectively and develop must have good capital. For BIDV Bank, the operating capital consists of two parts: Deposits and loans from the State Bank and the Ministry of Finance, Deposits and loans from other credit institutions, Customer deposits, Issuance of valuable papers, issuance of bonds to increase capital. Since 2010, due to the impact of the global financial crisis, the financial market in general and the capital market in particular have had many complex fluctuations, especially interest rates. High inflation and competition between domestic credit institutions in capital mobilization have affected the capital mobilization activities of commercial banks in general and BIDV in particular. However, with the determination that capital mobilization is always the core task of

To meet the demand for credit growth, BIDV has maintained a stable scale of mobilized capital, focusing on ensuring liquidity safety and complying with the regulations of the State Bank. The total mobilized capital as of December 31, 2011 and June 30, 2012 was VND 330,578 billion and VND 360,211 billion, respectively. This result was achieved thanks to BIDV's synchronous application of appropriate capital mobilization measures, suitable for each period, in compliance with the regulations of the State Bank. BIDV's mobilized capital includes: Deposits and loans from the State Bank and the Ministry of Finance

Deposits and loans from other credit institutions

Customer deposits. Issuance of valuable papers, issuance of bonds to increase capital. Social insurance loans (Capital increase bonds - valuable papers with a term of over 10 years, Social insurance loans are quite stable sources of capital mobilization for BIDV)

Table 5: Mobilization situation in the period 2009-June 30, 2012

Unit: Billion VND, %

Target

Year 2009		2010		2011		June 30, 2012
Balance	Ratio weight (%)	Balance	Ratio weight (%)	Balance	Ratio weight (%)	Balance	Ratio weight (%)
Deposits and loans from the Government and State Bank of Vietnam	22,931	9%	16,665	6%	26,799	8%	14,234	4%
Deposits and loans other credit institutions	14,542	6%	28,282	9%	35,704	10%	33,374	9%
Deposit of client	187,280	76%	244,700	81%	240,507	73%	282,396	79%
Issue documents valuable, capital raising bonds	20,541	8%	11,831	4%	8,938	3%	8,668	2%
Loan guarantee social insurance	225	1%	-		18,630	6%	21,530	6%
Total	245,519	100%	301,478	100%	330,578	100%	360,211	100%

Source: BIDV As of December 31, 2011, BIDV's total mobilized capital reached 330,578 billion VND, an increase of 9.65% compared to 2010. The rate of capital mobilization growth decreased compared to 2010.

22.79%. This is also the general trend of the entire banking industry in 2011. From January 2011 to the end of October 2011, capital mobilization of the entire banking industry only increased by an average of 0.84% per month, while this rate in 2010 was 3.1% (According to the State Bank's Report). With the effort to increase capital through appropriate marketing measures, product and customer strategies of BIDV, the growth of total mobilized capital in the first 6 months of 2012 was quite good, reaching 8.96% compared to the end of 2011.

Figure 4: Capital mobilization situation in the period 2009-June 30, 2012

Customer deposits always account for the largest proportion of total mobilized capital, averaging 76.3% in the period 2009 - June 30, 2012, maintaining a stable annual growth rate.

* Lending situation in the period 2009-2012:

Table 6: BIDV Bank's lending situation in the period 2009-2012

Unit: Billion VND, %

Target

2009		2010		2011		June 30, 2012
Value	Proportion	Value	Proportion	Value	Proportion	Value	Proportion
Short-term debt	110,271	53.4%	133,583	52.5%	161,960	55.1%	180,890	55.5%
Medium term debt	33,426	16.2%	39,575	15.6%	35,673	35,673	38,364	11.8%
Long-term debt	62,705	30.4%	81,034	31.9%	96,304	32.8%	106,502	32.7%
Total	206,402	100%	254,192	100%	293,937	100%	325,756	100%

(Source: BIDV's business results report 2009 - June 30, 2012) Currently, BIDV Bank provides commercial loans including short-term, medium-term and long-term loans, including loans in which the Bank acts as the focal point or participates as a member bank, in VND and foreign currencies.

* Efficiency of credit activities in the period 2009-June 30, 2012

Capital efficiency

Table 7: Capital utilization efficiency of BIDV in the period 2009-June 30, 2012

Unit: Billion VND, %

2009	2010	2011	June 30, 2012
Target	Amount	Amount	Amount	Amount
Total outstanding debt	206,402	254,192	293,937	325,756
Total operating capital	245,519	301,478	330,578	360,211
Capital efficiency	84.06%	84.31%	88.91%	90.43%

(Source: BIDV's business performance report 2009 - June 30, 2012) Based on the above data table, BIDV Bank's efficiency achieved high results in the period 2009 - June 30, 2012, increasing in the following years: 2009: 84.06%, 2010: 84.31%, 2011: 88.91%, June 30, 2012: 90.4%. Showing efficiency

BIDV's credit activities have achieved high results. Effective use of resources

capital into business activities including credit activities of the Bank.

2.2.2. Current status of BIDV's capital mobilization in the period 2009-June 30, 2012

* Evaluate the growth rate of savings deposit balance based on the current capital mobilization status of BIDV in the period 2009-June 30, 2012:

- With the efforts of all BIDV branches nationwide, BIDV has achieved high results in capital mobilization.

- As of December 31, 2011, BIDV is the bank with the third largest total assets and the fourth largest equity in the system of Vietnamese commercial banks. With a charter capital of VND 23,012 billion according to Decision No. 278/QD-TTg of the Prime Minister dated March 7, 2012, BIDV has become the bank with the third largest charter capital. In 2012, BIDV's capital mobilization faced many difficulties. However, by synchronously applying reasonable policies, implementing many competitive capital mobilization products, building and implementing incentive mechanisms in capital mobilization... up to June 30, 2012, the structure of mobilization by term also changed in a more positive direction, increasing the proportion of medium and long-term deposits and reducing the proportion of short-term deposits. Since 2010, due to the impact of the global financial crisis, the financial market in general and the capital market in particular have had many complex fluctuations, especially interest rates. High inflation and competition among domestic credit institutions in capital mobilization have affected the capital mobilization activities of commercial banks in general and BIDV in particular. However, with the determination that capital mobilization is always the core task of the Bank to meet the demand for credit growth, BIDV has maintained a stable scale of mobilized capital, focusing on ensuring liquidity safety and complying with the regulations of the State Bank. Total mobilized capital as of December 31, 2011 and June 30, 2012 were VND 330,578 billion and VND 360,211 billion, respectively. Factors affecting BIDV's capital mobilization situation:

+ BIDV's capital mobilization strategies are as follows:

- Diversify mobilized capital sources, gradually increase the proportion of residential deposits and diversify institutional customers, gradually reduce the proportion of deposits focusing on large customers, gradually increase the stability of mobilized capital sources.

- Actively promote long-term capital mobilization channels such as: Issuing long-term valuable papers, commercial loans from foreign financial institutions, loans through framework agreements, and medium- and long-term capital structure loans by corresponding short-term deposits.

- Strengthen cooperation with international financial institutions and government ministries to receive ODA capital sources and commercial loans from the government to international financial institutions and enhance access to capital sources in the international financial market.

- Flexible interest rate policy management, suitable to the market, in compliance with regulations

of the State Bank from time to time.

- Develop diverse mobilization products, flexible in terms of time and interest rates to meet the needs of each individual customer and business organization based on analysis of market needs and scale, coordinate with other departments to develop card products and services to enhance capital mobilization capacity.

- Actively improve the product and service system towards standardization, increasing convenience, diversifying according to the industry and business location of customers associated with Risk Management. Diversify capital trading products on the market.

Although the mobilized capital in recent years has been greatly affected by the economy and the monetary policy of the State Bank, BIDV Bank has still mobilized a large amount of capital. The basic factor that directly affects the mobilized capital of BIDV Bank is the impact of fluctuations in bank interest rates:

- Due to the impact of world economic fluctuations, gold prices have increased continuously.

- To mobilize capital in 2011, banks had to pay an effective mobilization interest rate of up to 19-20%/year, some banks even had to pay an mobilization interest rate of 20.5%/year, which is nearly one and a half times the ceiling rate of 14% when customers have idle money of up to several billion VND (the difference compared to the ceiling of 14% is paid in many different forms that are not shown in the report). In 2011, to mobilize capital, banks had to compete with high mobilization interest rates, leading to a decrease in customer deposit mobilization compared to 2010 and 2012.

- In the first 6 months of 2011, the State Bank increased the refinancing interest rate four times and the discount rate twice. At the same time, the money supply from the State Bank decreased.

Comment