Commercial Bank Profit C Part of the Preferential Rate

Domestic payment activities : Continuously growing over the years, demonstrated by strong growth in both the number and value of transactions.

International Payment Activities : 2019 marked a strong development of LienVietPostBank in international payment activities when the total value of payment transactions and official trade finance exceeded the 1.5 billion USD mark. In addition, cross-border payment activities also achieved positive figures with the growth rate in both value and number of transactions increasing by over 90% compared to 2018. In particular, in 2019, the State Bank of Vietnam approved LienVietPostBank to apply ahead of schedule the Capital Adequacy Ratio Calculation and Management System according to Circular 41, completing pillars 1 & 3 of the Basel II treaty.

Card and Digital Banking activities : LienVietPostBank focuses on investing in building a Digital Banking platform to become an important transaction channel, typically the Vi Viet application providing 24/7 online banking products and services such as: online payment (electricity, water, telecommunications, insurance, service fees, phone top-up, buying airline tickets, train tickets, online shopping...), Banking services (savings deposits, mortgage loans, interbank money transfers, checking payment accounts/loans/savings, transactions); ATM transactions, credit cards and many other utilities. In the near future, LienVietPostBank will launch LienViet24h service, a 24/7 online banking service application that includes 3 main functions: Digital banking, Th (physical and non-physical), E-wallet and at the same time integrates with the ecosystem to support users and businesses in searching for information, trading goods and services, etc.

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2.1.3.4 Profit of Commercial Bank C priority part of the Union

In 2017, LienVietPostBank achieved high pre-tax profit.

record, reaching 1,768 billion VND, up 31% compared to 2016. This is the year that LienVietPostBank has a remarkable development in its network when opening 97 new transaction points nationwide, completing the mission of bringing banking utilities to remote areas, serving people across the country. Although having to use a large amount of capital to invest in equipment, upgrade facilities, open many new branches and transaction offices (PGD), LienVietPostBank's profit in 2017 continued to grow and completed above expectations, exceeding 118% of the plan. This shows that LienVietPostBank has promoted its strength and effectively utilized the advantage of its extensive network. In 2018, LienVietPostBank's pre-tax profit reached 1,213 billion VND, down 31% compared to 2017. However, it still achieved the plan. By 2019, LienVietPostBank's pre-tax profit reached over 2,039 billion, the highest since its establishment. To achieve the above results, the Bank has made efforts to implement the following business solutions:

- Right from the beginning of 2019, LienVietPostBank has flexibly applied many mobilization and credit policies suitable to market reality, thereby improving capital usage efficiency and increasing income month by month.

- LienVietPostBank continues to implement many programs to promote service activities and foreign exchange trading activities, so net revenue from service activities and foreign exchange trading activities both increased significantly compared to the previous year.

Unit: billion VND

2,500

2,000

1,500

Profit before tax

1,000

2,039

1,768

1,213

500

2017 2018 2019

Source: LienVietPost annual report 2017-2019

Chart 2.2: Pre-tax profit of LienVietPostBank in the period 2017-2019

2.2. Current status of lending to corporate customers at LienVietPostBank

2.2.1 Corporate customer lending policy at LienVietPostBank

Currently, lending activities at LienVietPostBank comply with and are regulated by legal regulations of the National Assembly, the Government, the State Bank of Vietnam, LienVietPostBank and other relevant agencies. Specifically as follows:

Legal documents of the National Assembly and the Government: Law No. 47/2010/QH12: Law on credit institutions; Law No. 65/2014/QH13 of the National Assembly: Law on housing;

Decree No. 163/2006/ND-CP dated December 29, 2006: Decree on secured transactions;

Decree No. 11/2012/ND-CP dated February 22, 2012: Decree on amending and supplementing a number of articles of Decree No. 163/2006/ND-CP of the Government on Secured Transactions;

Legal documents of the State Bank of Vietnam:

- Circular 39/2016/TT-NHNN regulating lending activities of credit institutions.

credit institutions, foreign bank branches for customers by the Bank

Vietnam State Bank

- Decision No. 28/2002/QD-NHNN dated January 11, 2002 on amending Article 2 of Decision No. 1627/2001/QD-NHNN dated December 31, 2001 of the Governor of the State Bank on promulgating the Regulations on lending by credit institutions to customers.

- Decision No. 127/2002/QD-NHNN dated February 3, 2005 on amending and supplementing a number of articles of the credit institution's lending regulations to customers.

- Decision No. 783/2005/QD-NHNN dated May 31, 2005 on amending and supplementing Clause 6, Article 1 of Decision No. 127/2002/QD-NHNN dated February 3, 2005 on amending and supplementing a number of articles of the regulations on lending by credit institutions to customers issued under Decision No. 1627/2001/QD-NHNN dated December 31, 2001 of the Governor of the State Bank.

2.2.2 Credit profile for corporate customers at LienVietPostBank

The corporate customer lending process at LienVietPostBank is implemented nationwide and is basically carried out through the following steps:

Step 1: Search, market, guide and check loan applications from customers.

- Guide customers to prepare and complete loan application including:

+ Legal documents

+ Loan profile

+ Loan plan profile

+ Loan guarantee documents

- The bank receives and checks the loan application: checks the authenticity, completeness, reasonableness and validity of the application.

Step 2: Assess borrowers, loan plans, loan security measures and prepare credit assessment report.

- When a customer needs to borrow money from a bank, a credit officer conducts a preliminary interview to understand the customer's credit needs and conditions.

- Based on the documents provided by the customer, based on the actual inspection at the enterprise and the collected information sources... the appraisal officer will conduct the appraisal of the customer, the loan plan, the loan security measures, detect and propose measures to minimize risks and finally determine the loan interest rate.

- The appraisal officer will prepare a report stating clearly the proposed opinion: Loan or no loan, accompanying conditions and sign it for the leader.

Step 3: Loan Approval

- Based on the credit officer's appraisal report attached to the customer's loan application, the competent authority shall consider and approve the loan. In case of loan rejection, the credit officer shall be responsible for notifying the customer in writing of the bank's loan rejection. Conversely, if the loan is approved, the credit officer shall be responsible for notifying the customer of the bank's decision to request the customer to arrange time to sign the contracts and complete the relevant legal procedures.

- In case the loan amount is within the branch's judgment, it will be approved by the branch's Board of Directors or the local Credit Council.

- In case it exceeds the Branch's judgment, the Branch will submit it to the Head Office for consideration.

Step 4: Signing the contract

After having the loan decision of the competent authority, the customer and the enterprise will sign the credit contracts, legal procedures related to collateral and other conditions in the bank's loan decision. Then, it will be submitted to the competent authority to sign the contract.

Perform notarization, registration of secured transactions, procedures for delivery of secured assets and related documents.

Rule 5: Disbursement

Based on the signed credit contract, disbursement documents, invoices, and disbursement requests from customers, credit officers send the disbursement documents to the operations department to freeze and store collateral (if any) and proceed with disbursement to customers.

Rule 6: Check and monitor capital after lending

After disbursement, credit officers are responsible for regularly checking the actual use of loan capital, the purpose of capital use, the current status of collateral, and the financial situation of customers to ensure debt collection ability, and urging customers to repay principal and interest fully and on time. If signs of risk are detected, credit officers must be responsible for reporting to the leadership. Especially if bad debt arises, the bank must adjust the credit when requested by customers and handle and recover debt according to regulations.

Agreement 7: Collection of debt, interest, fees and handling of arising issues

Credit officers must monitor payable debts including: principal, interest, fees... Within 07 working days before the payment due date, credit officers notify

give customers the debt due. When the debt is due, the accounting department will collect the debt according to the correct loan accounting procedures and methods.

For arising issues such as loan adjustment, source structure... affecting the initial appraisal results, appropriate measures will be taken. If it does not affect the initial appraisal results of the loan plan, there can be an official dispatch to amend and supplement the contract, and draft a contract appendix.

Agreement 8: Liquidation of credit contracts, security contracts, release of mortgages

product

Convention 9: Circulation, control, and storage of records.

2.2.3 Loan products for corporate customers at

LienVietPostBank

In recent years, Lien Viet Post Joint Stock Commercial Bank has continuously expanded its lending activities to corporate customers by researching customer needs and regularly designing lending products suitable for different corporate customers. The Bank's current corporate lending products include:

- Short-term credit limit: Includes many component limits: Loan, guarantee, trade finance. Loan term is agreed by the Bank and the customer based on the production and business cycle of the customer granted the limit.

- Discounting export documents: Is a form of credit granting to legal entity export customers under the L/C method or collection with documents by discounting the documents of the export shipment.

- Discounting negotiable instruments and other valuable papers: Receive funding before the maturity of negotiable instruments and other valuable papers to take advantage of business opportunities. The list of negotiable instruments and other valuable papers that LienVietPostBank receives for discount is diverse.

- Rural Financial Support III: Rural Financial Support III is a LienVietPostBank program receiving support capital from the World Bank with the aim of increasing affordable capital for Individuals/Households or Enterprises in rural areas with commitments to environmental protection.

- Preferential loans for businesses importing goods from Taiwan: This is a form of credit for customers who import goods from Taiwan using capital under the Preferential Credit Program for Businesses importing goods from Taiwan of the Export-Import Bank of Taiwan.

- Car loans for Corporate Customers: For businesses that need to borrow capital to buy cars as means of transportation, means of transport to serve production, business and service activities in accordance with business lines according to the provisions of the Law.

- Loans secured by valuable papers: Business customers need to borrow capital with valuable papers secured by valuable papers.

- SMEFP III Program – Low-interest credit source: SMEFP III Program – Low-interest credit source is a joint program between LienVietPostBank and Japan International Cooperation Agency JICA through the State Bank of Vietnam to meet the needs of your business.

- Loans for agricultural and rural development: Meet customers' capital needs in agricultural production.

- Road Maintenance Fund product package: Is a form of credit for Customers who are Construction Contractors/Construction Investment Projects performing maintenance, periodic repairs, emergency repairs, etc. of Road Projects/Constructions with payment source from the Central Road Maintenance Fund.

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