Performance Results of Vietnam Development Bank in the Period 2011 - 2015

• Borrow re-capitalization from the State Bank of Vietnam according to the provisions of law and

guidance of the State Bank of Vietnam;

• Receive entrusted deposits from domestic and foreign organizations;

• Mobilize other sources of capital in accordance with the provisions of law.

● Credit activities

• Implement the State's development investment credit (TDĐTPT) and export credit (TDXK) policies according to Government regulations.

This is the most important function and task of the Vietnam Development Bank. Through the implementation of this function and task, it contributes to effectively implementing the State's credit policy in the economy.

The TDĐTPT policy is implemented with 3 operations: Development investment loans; Post-investment support; Investment credit guarantee;

The State's export-import policy is implemented with 5 operations:

Loans to Vietnamese exporters; Loans to foreign importers; Export credit guarantees; Bid guarantees and export contract performance guarantees.

• Receive entrustment to manage ODA capital and other sources

Receive ODA capital entrustment re-lent by the Government;

Receive entrustment, issue investment loans and collect debts from customers from domestic and foreign organizations through entrustment contracts between Vietnam Development Bank and entrusting organizations.

• Entrust financial and credit institutions to carry out credit operations of Vietnam Development Bank

● Provide payment services to customers

Vietnam Development Bank provides payment services and participates in domestic and international payment systems to serve the activities of Vietnam Development Bank in accordance with the provisions of law.

● Carry out international cooperation tasks in the field of development investment credit and export credit and a number of other tasks assigned by the Prime Minister .

2.1.6. Performance results of Vietnam Development Bank in the period 2011 - 2015

2.1.6.1. For the socio-economic background

As a financial instrument of the Government, VDB has contributed to the following successes:

Firstly, it has contributed to creating a large amount of supporting assets for the economy.

• By the end of 2015, the Vietnam Development Bank had managed and lent nearly 2,600 projects with a capital under credit contracts of over VND 220,000 billion, of which outstanding loans from domestic projects accounted for about 50% of total outstanding loans. State investment capital grew quite well, with an average rate of about 15-16%/year.

• State credit capital is deployed to implement the Government's economic programs such as: Canal consolidation program; Flood-proof foundation raising program and infrastructure for residential clusters in the Mekong Delta region.

• Re-lent over 480 projects with capital of over 16 billion USD;

• TDXK capital lending turnover from 2010-2015 reached nearly 100,000 billion VND, average outstanding debt

military this period over 11,000 billion VND;

• Underwrote over 360 projects and over 1,700 production and business plans with capital up to nearly 18,000 billion VND;

• Provided post-investment support for more than 3,200 projects with a total contract support capital for the entire project of over VND 4,200 billion. The total supported investment capital is over VND 168,000 billion, accounting for the post-investment support / total investment capital ratio of about 2.5%, contributing to quickly putting investment projects into effective exploitation and use.

• Support the management of allocation and payment of projects belonging to Son La Hydropower;

• Loans for investment in National Highway 78 to Cambodia, Road 2E to Laos, investment projects

rubber plantation, power plant in Laos, Hanoi-Hai Phong Expressway etc.

Second, it is a financial lever to attract other capital sources in the economy. Thanks to state investment capital through investment credit activities and state export credit for investment projects and enterprises, it has created momentum to access and attract other capital sources from commercial banks, financial institutions and other capital sources in society to participate in investment in development projects.

With this capital source, over the past 5 years, it has contributed to promoting the mobilization of social resources of about 450,000 billion VND to invest in nearly 2,200 projects in priority areas encouraged by the State. Indirect support activities of the Vietnam Development Bank have also actively contributed to mobilizing social resources for development investment, promoting production and business, helping enterprises access capital from credit institutions with capital of hundreds of thousands of billion VND to develop production and business.

Third, forming a new capital mobilization channel for economic growth, contributing to promoting

promote the development of Vietnam's financial market.

In the past 10 years, the Vietnam Development Bank has issued NHPTVN bonds, which are important debt instruments, not only helping the Vietnam Development Bank stabilize and expand its operating capital but also contributing to consolidating and stabilizing the financial market of Vietnam, because the bonds of the Vietnam Development Bank are all issued through the Hanoi Stock Exchange and listed on the Hanoi Stock Exchange. The bonds of the Vietnam Development Bank account for a fairly large proportion in the bond market with an average proportion of 25% - 27% of the total listed value of the entire market. This contributes to diversifying debt instruments and increasing the amount of goods on the stock market, increasing financial accumulation, promoting the development of the capital market.

Fourth, state investment credit contributes to promoting economic growth.

State investment credit for key programs and projects such as: Son La Hydropower Plant and electricity projects. Dung Quat Oil Refinery; Key cement, steel, and mechanical factories; Vinasat satellite system; Hai Phong DAP Fertilizer, Ninh Binh Nitrogen Fertilizer, Ha Bac Nitrogen Fertilizer, Lao Cai Apatite...

Investment projects and programs implemented by state investment credit have contributed to strengthening the economic infrastructure for the economy. With over 150 power source and grid projects, contributing to increasing the power generation capacity by 8,000 MW; newly building over 1,200 km of 500 KV lines, nearly 3,000 km of 220 KV and 110 KV lines; hundreds of transformer stations of various capacities have been put into use synchronously with power source and grid projects. Investing in production of 32 cement factory investment projects, over 120 investment projects in new shipbuilding, ship repair, and ship purchase facilities, supporting investment in improving

Creating, upgrading, expanding shipbuilding facilities and investing in new product manufacturing projects to meet the needs of Vietnam's shipbuilding industry, investment projects to build new railway cars, 18 major chemical projects, 86 processing industry projects... Investment from state credit capital during this period contributed to the economic restructuring, demonstrating the leadership and positive impact of state credit capital.

Fifth, it has contributed to the development of rural agriculture, ensuring social security, regional development and environmental protection.

State credit loan projects in a number of industries and sectors have had positive effects:

Projects on planting raw material forests and long-term industrial trees, fruit trees, animal husbandry, aquaculture and processing of agricultural products, industrial tree products, forestry products, aquatic products; Projects on processing animal feed and shrimp feed; Production and processing of industrial salt and edible salt; Investment in equipment serving agriculture and agricultural mechanics.

The lending results have contributed to the investment in the construction of over 100,000 km of new canals, over hundreds of thousands of km of concreted rural roads, the construction of infrastructure for over 900 residential clusters; the planting, care, management and protection of nearly 300,000 hectares of forests; the planting of perennial industrial trees and fruit trees on nearly 50,000 hectares. In addition to the important significance for local socio-economic development, the rubber planting projects of Army Corps 15, high-tech telecommunications projects, and the afforestation and industrial tree planting projects along the Vietnam - Laos - Cambodia border are also significant in ensuring national security and defense. Social security projects with nearly 180 key projects have contributed positively to economic growth, improving health and living environment.

In summary, the contributions of state credit capital to assets are considered to be very large and positive in creating the infrastructure of the economy, as well as creating conditions to promote economic development. However, if the total value of assets and outstanding debts from state credit capital is compared to the total assets and outstanding debts of the entire banking system, it is still modest, not showing the importance of state investment credit capital.

2.1.6.2. For the existence and development of Vietnam Development Bank

• VDB's scale of operations is increasing.

Total assets of VDB by the end of 2015 reached 359,799 billion VND. After 5 years of operation, total assets of VDB have had a relatively high growth. In which total assets increased by an average of 11.09% per year (Table 2.1). In which assets in business activities (including medium and long-term loans for investment; export credit; ODA capital re-lending; Guarantees, re-BL) accounted for a fairly large proportion (about 84%) with an average annual growth rate of over 13.13%. However, total assets in general and assets in business activities in 2012 and 2013 increased, but at an unstable growth rate, in 2014 the growth rate was the lowest in 5 years. By 2015, the growth rate of total assets increased by 14.23% and assets of the Board of Directors increased by 12.96%. Thus, although there was unstable growth, by 2015 there was a relative breakthrough, demonstrating VDB's improvement and efforts in business operations.

Table 2.1. Asset structure of VDB from 2011 - 2015

Unit: Million VND

INDICATORS

December 31, 2011	December 31, 2012	December 31, 2013	December 31, 2014	December 31, 2015
1. Total assets	274,708,123	291,700,892	298,986,367	324,526,866	359,799,901
% growth	32.39%	6.19%	2.50%	8.54%	10.87%
2.TS HĐNV	226,932,798	242,990,839	257,489,601	274,326,337	310,275,735
Proportion	82.61%	83.30%	86.12%	84.53%	86.24%
% growth	32.64 %	7.08%	5.97%	6.54%	13.10%
2. Other assets	47,775,325	48,710,053	41,496,766	50,200,529	49,504,166
Proportion	17.39%	16.70%	13.88%	15.47%	13.76%
% growth	32.05 %	1.96%	(14.81%)	20.97%	(1.39%)

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• Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015 zt2i3t4l5ee zt2a3gsnon-credit services, joint stock commercial bank zt2a3ge zc2o3n4t5e6n7ts At that time, the Branch had to set aside a provision for credit risks, which reduced the Branch's income. Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015 Unit: Billion VND 140 120 100 80 60 40 20 0 63.3 80.34 89.29 110.08 131.99 2011 2012 2013 2014 2015 Profit before tax (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) However, through chart 2.2, it can be seen that BIDV Tien Giang's profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project "Restructuring the system of credit institutions in the period 2011-2015" approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: "Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services". 2.2. Current status of non-credit service development at BIDV Tien Giang. 2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times. Along with the development of the Head Office, BIDV Tien Giang's products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,... 2.2.1.1. Payment services: In accordance with the Prime Minister's Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers' cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc. Chart 2.3. Net income from payment services in the period 2011-2015 Unit: Million VND 6000 5000 4000 3000 2000 1000 0 3922 4065 4720 5084 5324 2011 2012 2013 2014 2015 Net income from payment services (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment. 2.2.1.2. Treasury services: BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giang's treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17]. Chart 2.4. Net income from treasury services in the period 2011-2015 Unit: Million VND 350 300 250 200 150 100 50 0 105 122 309 289 279 2011 2012 2013 2014 2015 Net income from treasury services (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services. 2.2.1.3. Guarantee and trade finance services: BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance. Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015 Unit: Million VND 14000 12000 10000 8000 6000 4000 2000 0 5193 5695 2742 3420 8889 3992 11604 12206 5143 5312 2011 2012 2013 2014 2015 Net income from guarantee services Net income from Trade Finance (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) Through chart 2.5, we can see that BIDV Tien Giang's income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giang's corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area. are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future. 2.2.1.4. Card and POS services: As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services. In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system. Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments. Chart 2.6. Net income from card services in the period 2011-2015 Unit: Million VND 3500 3000 2500 2000 1500 1000 500 0 687 1023 1547 2267 3104 2011 2012 2013 2014 2015 Net income from card services (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) Through chart 2.6, it can be seen that BIDV Tien Giang's card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25]. Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area. Unit: Machine STT Bank name Number of ATMs Cumulative number of ATM cards POS machine 1 BIDV Tien Giang 23 97,095 22 2 BIDV My Tho 7 21,325 0 3 Agribank Tien Giang 29 115,743 77 4 Vietinbank Tien Giang 16 100,052 54 5 Dong A Tien Giang 26 97,536 11 6 Sacombank Tien Giang 24 88,513 27 7 Vietcombank Tien Giang 15 61,607 96 8 Vietinbank - Tay Tien Giang Branch 6 46,042 38 (Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21]) Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6). div.maincontent .content_head3 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: bold; text-decoration: none; font-size: 14pt; } div.maincontent .p { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; margin:0pt; } div.maincontent p { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; margin:0pt; } div.maincontent .s1 { color: black; font-family:"Courier New", monospace; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; } div.maincontent .s2 { color: black; font-family:"Times New Roman", serif; font-style: italic; font-weight: normal; 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font-family:"Times New Roman", serif; font-style: normal; fo
• Evaluation of Land Use Rights Mortgage Results at Vietnam Bank for Agriculture and Rural Development, Dien Bien Province Branch
• Experience in Improving Export Credit Quality and Lessons Learned for Vietnam Bank for Agriculture and Rural Development
• Current Business Performance of Vietnam Joint Stock Commercial Bank for Investment and Development
• Assessment of the State's Export Development Situation at the Vietnam Development Bank

Source: Thesis research data and author's calculations

400000000

350000000

300000000

250000000

200000000

150000000

Total TS

TS in the Board of Directors

Other TS

100000000

50000000

0

2011

2012

2013

2014

2015

Chart 2.1 VDB's asset structure from 2011 -2015

Source: Thesis research data and author's calculations

The scale of VDB's total assets in relation to the total assets of the entire Vietnamese credit institution system is shown in Table 2.2, showing that this ratio accounts for an average of about 5.39%.

%, but with VDB's more than 10 years of existence, this is a very significant number.

encourage

Table 2.2. Total assets of the entire system of credit institutions and VDB from 2011-2015.

Unit: Billion VND

Target

2011	2012	2013	2014	2015
A. Total assets (*) Growth rate	4,317,301 12.39%	5,085,780 17.79%	6,022,803 18.42%	6,514,900 12.20%	7,319,317 12.35%
1 State Commercial Bank	1,880,309	2,201,660	2,719,392	2,876,174	3,303,995
2. Joint Stock Commercial Bank	1,832,126	2,159,363	2,458,865	2,780,976	2,928,146
3 NHLD & NN	484.103	575,414	704,946	701,986	755,581
4. Non-bank credit institutions	47,079	55,365	65,440	68,673	87,841
5.Cooperative Credit Union	61,581	66,447	72,160	87,090	99,551
B. Total assets of VDB Proportion to A	274,708 6.36%	291,701 5.73%	298,986 4.96%	324,527 4.98 %	359,799 4.92%

Source: Source: Thesis research data and author's calculations

. (*) The entire banking industry (excluding VDB)

Comparing the ratio between VDB's operating assets and total credit and investment of the entire Vietnamese credit institution system shows that VDB's operating assets account for an average of about 7.43% of the entire Vietnamese credit institution system, demonstrating that VDB's operating assets have a fairly important position in the economy. However, VDB's operating assets are mainly investment credit and ODA re-lending, export credit accounts for only an average of about 4.89% of VDB's total operating assets, which shows that export credit at VDB is not yet commensurate in scale. This requires VDB to strive harder to expand the scale of export credit in the coming time.

Table 2.3. Total investment and development of the entire credit institution system and VDB's operating assets from 2011 to 2015

Unit: Billion VND

Target

2011	2012	2013	2014	2015
A. Total GDP(*) Growth rate	2,839,193 14.69%	3,090,904 8.86%	3,477,981 12.52%	3,970,550 14.16%	4,655,890 17.26%
1.State Commercial Bank	1,245,121	1,573,579	1,777,248	2,021,804	2,373,554
2 Joint Stock Commercial Banks	1,203,236	1,205,453	1,320,335	1,552,485	1,846,179
3.NHLD&NN	301,221	249,182	306,352	333,702	375,915
4. Non-bank credit institutions	85,460	58,100	67,121	83,891	90.102
5.Cooperative Credit Union	7,926	6,590	7.205	7,988	9,428
2.TS HĐNV.VDB Proportion to A	226,933 7.99%	242,991 7.86%	257,489 7.40%	274,326 6.91%	310,276 6.66%

Source: Thesis research data and author's calculations (*) Whole Banking industry

• On VDB's capital structure

Liabilities: VDB's liabilities include capital issued for GTCG; investment trust capital; budget loans, loans from financial institutions; other capital. This is the capital source that VDB uses in its business activities and must be responsible for unconditionally repaying the owners. Liabilities are the main source of capital for VDB, this source of capital accounts for a very large proportion of VDB's total capital (91.95% in 2010; 94.84% in 2011; 94.88% in 2012 and 94.70% in 2013, 2014 is

94.46%). In VDB's liabilities, capital issued for GTCG and investment trust capital have

high proportion. In which, the issued capital of GTCG always accounts for the highest proportion in the total.

capital (over 43%), and at the same time accounts for the largest proportion of liabilities. VDB's investment trust capital also accounts for a fairly high proportion of total capital (about 40%). Budget loans and loans from financial institutions account for about 5%.

Owner's Capital (Capital & Fund) Owner's capital is the capital source initially provided by the state budget when VDB was established and is additionally provided when needed to expand the scale of operations. Although it does not account for a large proportion, owner's capital is a stable source of capital and is the main source for investing in infrastructure and modern technology to serve VDB's operations in the new stage of the economy.

Table 2.4. VDB's capital structure from 2011-2015

Unit: Million VND

INDICATORS

December 31, 2011	December 31, 2012	December 31, 2013	December 31, 2014	December 31, 2015
Total capital % growth	274,708,123 32.39%	291,700,892 6.19%	298,986,367 2.49 %	324,526,866 8.54 %	359,799,901 10.87%
1. Liabilities Proportion	260,530,975 94.84 %	276,779,437 94.88 %	283,145,853 94.22 %	307,949,061 94.89 %	339.011.701 93.17%
2. Capital & Fund Proportion	14,117,505 5.16 %	14,921,455 5.12 %	16,112,043 5.38%	16,577,805 5.11 %	20,788,200 6.83%

Source: Thesis research data and author's calculations

400000000

350000000

300000000

250000000

200000000

150000000

Total source

Liabilities Capital & Funds

100000000

50000000

0

2011

2012

2013

2014

2015

Chart 2.2. VDB's capital structure from 2011 - 2015

Source: Thesis research data and author's calculations