Scb's Key Financial Indicators for the 2015-2019 Period

Tasks of each department in the management system:

- General meeting of shareholders: includes all shareholders with voting rights. This is the highest decision-making body in the entire banking system in deciding on the bank's development strategy, electing management agencies and the board of directors.

- Board of Directors: This is the bank's management body. The Board of Directors has full authority to decide on all matters relating to the bank's interests on behalf of the bank, except for the scope of the Shareholders' Meeting. The term of the Board of Directors is 4 years.

- Board of Supervisors: has the authority to inspect the legality and validity of the bank's management and business operations, accounting books and financial reports, to appraise the bank's annual financial reports, and to report to the Board of Directors on the results of operations.

- Executive Board: includes the General Director responsible for general operations and Deputy General Directors assisting the General Director. The Executive Board has the function of directly managing all Bank activities as well as concretizing the overall strategy and goals set by the Board of Directors through business plans, advising the Board of Directors on strategic and policy issues.

- Internal audit: ensures that the bank's operations comply with legal regulations, business ethics and the bank's operating regulations. Internal audit is responsible for detecting errors in the bank's business operations, acting as an advisor and orienting the executive board, supervisory board and board of directors on risk control, helping the bank operate safely, effectively and legally.

- Business Block: includes departments in charge of economic operations as well as issuing transaction procedures, regulations, and policies on deposits and loans for institutional customers; at the same time, supporting units in consulting and serving institutional customers.

- Banking and personal finance services: develop and implement retail operation plans: programs, personal deposit products, policies and customer care programs, etc. in the SCB banking system; at the same time, evaluate the implementation of business targets of the retail banking sector. From there, propose solutions and products to increasingly improve retail operations at SCB.

- Currency trading block: includes Foreign Exchange Trading Department, Currency Trading Department, Financial Institutions Department, Currency Trading Analysis and Supervision Department. The Currency Trading Block has the function of building, developing and managing foreign exchange, gold and derivative products trading activities in the entire system; conducting foreign exchange, gold and foreign exchange derivative products trading in accordance with regulations to bring profit and ensure liquidity for the bank...

- Business support & asset exploitation block: includes Direct Valuation Department, Valuation Policy & Monitoring Department, Headquarter Business Support Department. Each department has its own functions and tasks, aiming to support the development of policies related to valuation in the SCB system and organize direct valuation of valuation records in the entire system and other valuation records as assigned by competent authorities.

- Financial and capital management block: includes the Finance and Planning Department, Capital Management Department, ALCO Support Department, and Management Information System Department. The Financial and Capital Management Block is responsible for developing and perfecting policies and tools for financial and planning management; at the same time, coordinating and implementing the development and adjustment of the bank's development strategy; managing the entire bank's capital; managing the bank's Debt - Credit asset structure in accordance with the bank's business strategy, ...

- Accounting block: Departments and divisions of the accounting block have the function of organizing, managing and supervising the implementation of accounting work in the entire SCB system, and are the focal point for financial reporting, reporting to the Department of Statistics and the State Bank.

- Risk management block: includes Credit Risk Management Department, Market Risk Management Department. Operational Risk Management Department performs the function of checking and supervising compliance with SCB's internal regulations and procedures; monitoring and measuring

Measure, evaluate and control risks, and provide early warnings of risks in banking operations. The risk management department directly reports to the General Director and also reports to the Risk Management Committee under the Board of Directors, the Supervisory Board and internal audit.

- Legal and compliance block: includes the Legal Department which performs the function of developing, checking, supervising, supporting the implementation of regulations, rules, procedures, guidelines and legal policies and activities, and at the same time controlling legal compliance throughout the system to ensure that SCB's operations always comply with the provisions of law.

- Regional office: performs the functions of management, supervision, inspection, control and risk prevention in the operations of branches in the region.

- Area: includes branches and transaction offices, which are direct business units, directly selling bank products and services to customers transacting at the counter, ensuring compliance with the provisions of law and SCB.

3.1.4. Business performance

Table 3.1. SCB's main financial indicators for the period 2015-2019

Unit: billion VND, %

Criteria

2015

2016

2017

2018

2019

Growth rate (%)

2016/

2015

2017/

2016

2018/

2017

2019/

2018

Total TS

311,514

361,682

444,032

508,954

567,913

50,168

16.10

58,959

11.58

VCSH

15,240

15,461

15,530

16,578

16,648

221

1.45

0.42

Charter capital

14,295

15,232

0.00

Profit before tax

111

134

164

229

220

20.72

-9.00

-3.93

ROE

0.54

0.49

0.78

1.38

1.32

-0.05

-9.26

-0.06

-4.35

ROA

0.03

0.02

0.03

0.04

-0.01

33.33

0.00

Capital Adequacy Ratio (CAR)

9.95

9.86

9.67

9.69

9.70

-0.09

-0.90

0.01

0.10

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Source: SCB Consolidated Financial Report 2015-2019 and author's synthesis

3.1.3.1. Some main results

- Total assets index

Unit: billion VND

Figure 3.1. Total assets of Saigon Commercial Joint Stock Bank (2015 - 2019)

Source: SCB Consolidated Annual Report 2015-2019 SCB's total assets grew steadily during the period 2015-2019. In 2016, total assets increased by VND 50,168 billion compared to 2015, equivalent to an increase of 16.1% compared to 2015.

with last year.

As of December 31, 2019, SCB's total assets reached VND 567,913 billion with a growth rate of 11.58%. SCB maintains its leading position in total assets among private joint stock banks. Not only striving to increase asset value, asset quality is always a factor that SCB puts first.

The average growth rate of total assets in the period 2015-2019 reached 16.57%. The average growth rate of equity reached 6.06%. Charter capital growth allows SCB to increase its assets. This means that SCB will be able to push higher credit growth and have the opportunity to expand investment.

- Profit target

In the period 2015-2019, SCB's pre-tax profit increased gradually over the years. In 2019, pre-tax profit decreased slightly compared to 2018. The business results in 2019 recorded SCB's pre-tax profit reaching 220 billion VND. SCB's profit was somewhat modest compared to the size of the bank because in 2018,

SCB has balanced resources to set aside VND2,162 billion for credit risk provisions according to the bank restructuring project for the 2015-2018 period approved by the State Bank, as well as investing in information technology and upgrading system safety.

Besides, the performance indicators ROA and ROE also achieved many significant results.

ROA or return on total assets is an index measuring the efficiency of a business's use of assets.

Profit after tax

ROA= × 100%

Average total assets

ROE or return on equity is an indicator that measures the efficiency of using equity capital in a business. The ROE index reflects both the profit index, shown on the Income Statement (P&L) and the average equity index, on the Balance Sheet.

Profit after tax

ROE = × 100%

Average equity

According to international standards: ROE > 15% is considered a financially capable company, when ROA > 7.5%. At SCB, the ROA and ROE indexes are quite low, demonstrating that the efficiency of using equity and assets is not high.

SCB's operations in recent years show that the bank pays great attention to ensuring operational safety indicators as well as investing in IT to research and launch retail products, reduce dependence on credit activities and increase income from non-credit service activities, aiming to develop towards a modern retail bank.

- Minimum capital adequacy ratio

The minimum capital adequacy ratio (CAR) of credit institutions is a major issue that many financial experts have mentioned. According to Circular No. 36/2014/TT-NHNN dated November 20, 2014, the minimum capital adequacy ratio of commercial banks must reach over 9%. In 2017, credit growth was much faster than the growth rate of equity, causing the minimum capital adequacy ratio (CAR) of commercial banks to decline.

rapidly, leading to banks having difficulty expanding lending.

However, thanks to the growth of equity capital in recent years, SCB's minimum capital adequacy ratio has always met the regulations of the State Bank. With efforts in resource management and resource use, over the past year, all of SCB's operational safety ratios have been significantly improved and complied with the regulations of the State Bank. The minimum capital adequacy ratio (CAR) has always been maintained at over 9%. In 2018, SCB's CAR was 9.69%. As of December 31, 2019, the CAR ratio reached 9.7%.

- Capital mobilization activities

Table 3.2: Mobilization structure by customer of SCB in the period 2015-2019

Unit: billion VND

Criteria

2015	2016	2017	2018	2019	Growth rate (%)
2015	2016	2017	2018	2019	2016/ 2015	2017/ 2016	2018/ 2017	2019/ 2018
Organization	21,240	22,678	37,144	51,220	58,195	6.77	63.79	37.90	13.62
Individual	236,180	278,384	316,183	367.119	429,896	17.87	13.58	16.11	17.10
Total mobilization	257,420	301,062	353,327	418,339	488,091	16.95	17.36	18.40	16.67

Source: SCB Consolidated Financial Statements 2015-2019 & Author's calculations Mobilization products have always been one of SCB's strengths. In 2019, SCB's capital mobilization increased by VND 69,752 billion, equivalent to a growth rate of 16.67%. SCB's total mobilized balance as of December 31, 2019 amounted to

488,091 billion VND. With flexible product lines in terms of terms, types, and attractive interest rates, SCB not only attracts individual customers but also has impressive growth in mobilizing institutional customers. In 2019, mobilizing institutional customers increased by 13.62%, mobilizing individual customers increased by 17.1% compared to the beginning of the year.

The steady growth in deposits over the years shows that SCB has maintained the trust of its customers. In addition, the growth rate of deposits from institutional customers has shown positive signs. This shows that SCB has increased the trust and confidence of institutional customers - one of the factors

success factors of large commercial banks.

- Credit activities

In recent years, with the orientation of becoming a modern multi-functional Retail Bank, SCB continues to diversify its credit products, meeting the constantly changing needs of customers. The lending products and customers that SCB targets are in many different fields such as agriculture, forestry, aquaculture; accommodation and catering services; wholesale and retail; arts, entertainment; construction; warehouses, etc.

With a diverse customer segment, loan products suitable for the business cycle and borrowing needs of customers, the quality of SCB's lending activities is increasingly improved. At the end of 2019, SCB's outstanding customer loans reached VND 333,879 billion, an increase of VND 31,987 billion, an increase of 10.6% over the previous year. In addition to developing lending activities, SCB always controls credit quality well by continuing to improve standards and regulations in risk prevention and control; improving appraisal quality, strictly implementing credit granting procedures; and promoting recovery of overdue debts and bad debts. Thanks to that, SCB maintained the bad debt and overdue debt ratio at low levels, reaching 0.49% and 0.90% respectively at the end of 2019.

Table 3.3: SCB's loan structure in the period 2015 - 2019

Unit: billion VND

Criteria

2015	2016	2017	2018	2019	Growth rate (%)
2015	2016	2017	2018	2019	2016/ 2015	2017/ 2016	2018/ 2017	2019/ 2018
Short term loans	34,825	65,911	109,438	100,689	106,568	89.26	66.04	-7.99	5.84
Medium term loans	52,184	66,915	75,384	116,426	139,679	28.23	12.66	54.44	19.97
Long term loans	83,453	89,357	81,679	84,778	87,632	7.07	-8.59	3.79	3.37
Total Loans	170,462	222,183	266,501	301,892	333,879	30.34	19.95	13.28	10.60

Source: SCB Consolidated Financial Report 2015-2019 & author's calculation Retail orientation was concretized in 2016 with strong growth of the credit segment for individual customers and businesses.

small and medium enterprises. Accordingly, SCB's outstanding loans at the end of 2016 reached VND222,183 billion, an increase of VND51,721 billion, an increase of 30.34% compared to the beginning of the year. In 2016, SCB maintained the ratio of overdue debt and bad debt at a very low level compared to regulations, only 0.79% and 0.68% of total outstanding loans, respectively.

At the end of 2019, SCB's outstanding loans to customers reached VND333,879 billion, an increase of VND31,987 billion, an increase of 10.6% over the previous year. In addition to developing lending activities, SCB always controls credit quality well, ensuring that SCB's bad debt and overdue debt ratios are both low, reaching 0.49% and 0.90% respectively at the end of 2019.

In recent years, SCB's lending structure has been gradually changing in a positive direction, increasing the proportion of short-term loans from 20.4% in 2015 to 31.9% in 2019 and reducing the proportion of medium and long-term loans from 79.6% in 2015 to 68.1% in 2019. This change will help SCB control risks, ensure capital safety while cash flows are circulated more, bringing higher profit efficiency to the bank.

3.1.3.2 Business performance

Table 3.4: SCB's business performance in the period 2015-2019

Unit: billion VND

Criteria

2015	2016	2017	2018	2019	Growth rate (%)
2015	2016	2017	2018	2019	2016/ 2015	2017/ 2016	2018/ 2017	2019/ 2018
Total income work	5.008	4,041	4,536	6,532	6,583	-19.31	12.25	44.00	0.78
Net profit	4,509	2,935	1,891	2,907	4,029	-34.91	-35.57	53.73	38.60
Operating costs	2,619	2,440	3.343	4.141	4,538	-6.83	37.01	23.87	9.59
Net profit from operations service	338	567	871	1,064	1,420	67.75	53.62	22.16	33.46
Net profit before CP reserve RRTD	2,390	1,601	1,054	2,309	2,593	-33.01	-34.17	119.07	12.30
Contingency costs RRTD	2,279	1,465	890	2,162	2,373	-35.72	-39.25	142.92	9.76
Profit before tax	111	136	164	227	220	22.52	20.59	38.41	-3.08

Source: SCB Annual Report 2015 – 2019 & author's calculation

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