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Profit Before Tax by Business Line at NHCT in the Period 2010-2014


Table 2.8: Payment turnover in the period 2010 - 2014

Unit: billion VND


Target

Year

2010

Year

2011

Year

2012

Year

2013

Year

2014

Bar Sales

foreign currency


254,952


403,674


743,610


807,348


839,586

Bar Sales

domestic math


1,987,778


2,186,555


2,623,866


3,122,401


3,566,579

Add:


2,242,730


2,590,229


3,367,476


3,929,749


4,406,165

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Profit Before Tax by Business Line at NHCT in the Period 2010-2014

(Source - Annual Report of NHCT 2010-2014)

Payment services include many service products:

Domestic money transfer: Money transfer service; Open one account to transact in many places; Value added tax refund; Manage and connect specialized accounts and securities accounts of investors; Collect state budget; Road maintenance fee collection service; Collect electricity, water, telephone bills, etc.

Foreign currency remittance: International payment and trade finance; Overseas study remittance; Overseas medical treatment remittance; Settlement remittance; Remittance to relatives; Capital and profit remittance back home... In addition, NHCT has cooperated with the Industrial and Commercial Bank of China and the Agricultural Bank of China to provide cross-border payment services via the Internet. Payment turnover has grown relatively steadily and in 2012, it increased by 30% compared to 2011, the highest growth year. However, foreign currency payment turnover in 2014 only reached 70% of the plan set by the Executive Board.

- Remittance services:

NHCT has established more direct money transfer channels to Vietnam, especially from countries with many overseas Vietnamese and Vietnamese workers such as Malaysia, Korea, Taiwan, Middle East, USA, Australia... with the online remittance product Vietin-Bank eRemit. NHCT has also signed a contract


directly and became an official agent of Western Union, greatly increasing sales and the amount of foreign currency purchased from this service and implementing remittance services in cooperation with Wells-Fargo Bank.

The result in 2011 reached 1.3 billion USD, an increase of 8.3% compared to 2010 and in 2012 - NHCT Global Money Transfer Company (formerly the Remittance Service Department of TSC) officially came into operation on February 10, 2012 - reaching 1.4 billion USD, an increase of 10% compared to 2011. 2013 was a year of continued growth in remittance services reaching 1.68 billion USD, an increase of 20% compared to 2012 and in 2014, a strong increase of 2.9 billion USD, nearly double that of 2013, accounting for over 15% of the market share of Remittances transferred to Vietnam and exceeding 400 million USD compared to the plan assigned by the Executive Board.

- Card services:

NHCT currently provides customers with two types of cards: domestic debit cards and international credit cards. With diverse and modern product lines, suitable for many ages and interests, and payment via a network of ATMs and POS machines spread across the country, NHCT's card products have been chosen by consumers. The number of cards issued has been constantly increasing over the years. In 2010, the number of domestic debit cards increased by nearly 65% ​​to 5,300 thousand cards compared to 2009. In 2011, the number of domestic debit cards issued by NHCT reached nearly 7,100 thousand cards, an increase of 34% compared to 2010. In 2012, the number of cards reached 11 million cards, an increase of 55% compared to 2011 and an increase of 243% compared to 2010. In 2013, NHCT issued 12,150 thousand domestic debit cards, accounting for 23.5% of the market share.


Table 2.9: Number of NHCT cards issued in the period 2010-2014

Unit: thousand cards



Year

Target


2010


2011


2012


2013


2014

Number of domestic debit cards issued

5,300

7,100

11,000

12,150

12,600

Number of QT credit cards issued

120

211

400

480

530

(Source - NHCT Annual Report 2010-2014)

Although the number of international credit cards is not high compared to the number of domestic debit cards, the growth rate over the years is also very fast, accounting for 9.5% of the market share. In 2010, the growth rate was 400%, in 2011 it was 34%. The number of international credit cards issued by NHCT in 2012 reached 400 thousand cards, an increase of 55% compared to 2011. In 2013, 480 thousand cards were issued, an increase of 20% compared to 2012. In 2014, growth continued but the growth rate was only 10% compared to 2013.

The focus of the NHCT card system is the corporate market with collective card issuance services, card payments, corporate salary payments... the individual market with international credit cards Cremium Visa & MasterCard, E-partner G-Card, E-Partner PinkCar, E-partner S-Card, E-partner C-Card, E-Partner 12 Zodiacs... NHCT provides many services to help cardholders perform many types of transactions from ATMs, Mobile phones to the Internet. In addition, NHCT has also successfully connected with many telecommunications and financial organizations to provide services such as bill payment, train and plane ticket sales, state budget collection at banks, tax collection services via the Internet, etc. Online ATM account inquiry service, VNTopup service (a service that allows E-Partner cardholders to withdraw money from their ATM accounts to directly top up their prepaid mobile phone accounts and pay for postpaid subscribers without using scratch cards or top-up codes), SMS Banking service, Receiving remittances via E-Partner cards, Savings deposit service with


Term deposit at ATM, Online bill payment service at ATM, VnMart service; Prepaid card purchase service at ATM; NHCT iPay and Mobile Banking service allows customers to perform banking financial transactions via internet-connected computers and mobile phones quickly, simply, safely, conveniently and securely when querying account and bank information; transferring money; depositing savings; borrowing capital, repaying loans via the internet. (USA), Cathay United Bank (Taiwan), Kookmin Bank (Korea) ...

- Electronic banking services:

NHCT identifies that in the transformation of the retail business model towards a more modern direction, the development of e-banking is expected to be an effective distribution channel of the future.

The electronic banking service of NHCT in recent times has shown initial effectiveness when the number of users has increased rapidly, mainly in transactions of balance notification (up 400% compared to 2010); transaction history inquiry (up 280% compared to 2011); strong increase in money transfer... In April 2011, NHCT was honored by Western Union Company as "the bank with the fastest and most effective network development in the Asia Pacific region". At the same time, the transaction point of NHCT - Cua Lo Branch (Nghe An) was awarded the award "The transaction point leading in payment transaction growth in Vietnam". NHCT cooperated with Western Union Company to deploy remittance services. Realizing that this is a service with high development potential, NHCT has actively upgraded technology, money transfer software, and expanded the transaction network, thanks to which the growth rate of Western Union payment service via NHCT in 2013 reached more than 50% compared to the previous year.

In addition, the categories of electronic banking products and services have had significant changes. Some new products are being deployed.


such as: State budget collection service online, non-stop toll collection service, petrol payment service via card, payment service via e-wallet, money transfer via SMS and payment via iPay network for new individual customers "Customer decides interest rate" exclusively for customers who are export enterprises. The product is deployed to support and create the greatest incentives for export customers, meeting customers' working capital loan needs for a maximum period of 04 months. With this product, customers can proactively decide the interest rate applied to short-term VND loans and can sell foreign currency to the State Bank of Vietnam at a higher exchange rate than the spot exchange rate.

With the orientation of developing modern banking services, NHCT has focused on investing in technology development, introducing many modern banking products, enhancing product utilities, bringing consumers many high-tech products. Through IPAY, VBH, SMS banking, Bankplus services... now customers can perform many transactions with the bank with simple operations via the Internet, mobile phones without having to spend time going to the bank, the number of customers registering to use electronic banking services has increased with nearly 2.6 million customers, cumulatively reaching more than 7 million.

To promote product development, NHCT has cooperated with a number of foreign partners such as: cooperating with Standard Chartered to develop payment services, investment products, capital markets, foreign exchange trading, derivative products, etc. with an initial cooperation scale of about 600 million USD;

In summary, the research and development of NHBL products and services at NHCT has been based on customer needs and future trends. NHCT is constantly researching and introducing new products to better meet the needs of customers. These products can be


New products and services can be familiar products but with easier and more attractive forms and utilities.

c. NHBL service operating profit

Pre-tax profit of NHCT:

Table 2.10: Pre-tax profit by business segment at NHCT in the period 2010-2014

Unit: billion VND


Year

Target

2010

2011

2012

2013

2014

Profit from credit activities

and investment

3,553

5,261

5,229

4,795

4,234

Compared to total profit (%)

76.61

62.69

64.02

61.86

58.16

Service operating profit

938

1,796

1,989

2,097

2,255

Compared to total profit (%)

20.22

21.40

24.35

27.05

30.98

Profit of Subsidiaries

92

268

256

333

352

Compared to total profit (%)

1.98

3.19

3.13

4.30

4.83

Profit from foreign exchange trading

and other income

55

621

548

526

439

Compared to total profit (%)

1.19

7.40

6.71

6.79

6.03

Total profit

4,638

8,392

8,168

7,751

7,280

(Source: Annual report of NHCT from 2010-2014)

Comment: pre-tax profit in 2011 of NHCT grew strongly compared to previous years and in 2012, in the economic situation with a tendency to stagnate and gradually decrease, pre-tax profit in 2012 was about 176 billion VND less than in 2011, but it was still the bank with the highest profit and was awarded the title of No. 1 Commercial Bank in Vietnam in 2012 by the State Bank. In 2013 and 2014, the total demand of the economy was still weak, many businesses were still facing difficulties, along with macroeconomic policies gradually taking effect, NHCT proactively


sharply reduce costs, continuously reduce lending interest rates to support economic recovery. Therefore, pre-tax profit in 2013 of NHCT decreased compared to 2012, but still achieved the target set by the Shareholders' Meeting and continued to maintain safe and effective growth momentum.

Revenue from service activities is the least risky but most effective income and this indicator is an important indicator to evaluate the NHBL service. Through table 2.9, it can be seen that the total service fee revenue has increased gradually over the years, especially in 2011, it increased sharply by 858 billion VND, equivalent to 91.47% compared to 2010. In 2013, the proportion of service fee revenue accounted for 27.05% of total income and in 2014, it reached 2,255 billion VND, accounting for more than 30% of total pre-tax income, this is the highest increase ever, this proves that the quality of NHBL products and services of NHCT has been significantly improved.

Profits from the operations of Fund Management Companies, Global Money Transfer Companies, Financial Leasing Companies, Securities Companies, Gold and Gemstone Companies, NHCT Insurance Companies, Debt Management and Asset Exploitation Companies have had many positive changes and their business results, although accounting for a small proportion, have also contributed to the overall business results of NHCT.

Profit from foreign exchange trading and other revenues: NHCT prioritizes and meets the maximum demand for foreign currency to import essential goods according to Government regulations such as gasoline, fertilizers, pharmaceuticals, pesticides (accounting for nearly 90% of total foreign currency sales of NHCT). In 2013, the market share of foreign currency trading increased from 8.6% at the beginning of the year to 11% at the end of the year. This affirms that the position of NHCT's foreign exchange trading activities continues to be enhanced in the market, so the revenue from foreign currency trading has had significant results. Other revenues are revenues from bad debt settlement, asset liquidation, other extraordinary revenues (bonuses from banks that NHCT has contributed capital to)... Profit


Profits from foreign exchange trading and other revenues have contributed significantly to the profits of NHCT.

- Profit from credit and investment activities always accounts for the highest proportion of the bank's total profit.

Table 2.11: Profit from lending and investment of NHCT in the period 2010-2014

Unit: billion VND


Year


Target


2010


2011


2012


2013


2014

Profits from personal loans and


DNVVN

781

1,059

1,189

1,397

1,288

Compared to total revenue (%)

21.98

20.13

22.74

29.13

30.42

Profit from customer loans


Large and Investment

2,772

4,202

4,040

3,398

2,946

Compared to total revenue (%)

78.02

79.87

77.26

70.87

69.58

Add:

3,553

5,261

5,229

4,795

4,234

(Source: Annual report of NHCT from 2010-2014)

Through the table above, we can see that the proportion of profit from lending to individuals and SMEs increased steadily over the years 2010, 2011, 2012, accounting for an average of 21% and in 2013, 2014, accounting for an average of nearly 30% of total profit. This proves that the NHBL service on capital use has changed and grown, but has not met the requirements of the plan set by the Executive Board in 2014, specifically, the rate of profit from lending activities must reach 40%.

- Profit from service activities:

Table 2.12: Profit from NHCT service activities in the period 2010-2014

Unit: billion VND

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