ANNUAL

REPORT I 2017
LETTER FROM THE EDITOR

2017 is an unforgotten milestone in 26 years of establishment and development of

Sacombank. The milestone recognized new leadership, new energy along with new ideas
to promote the existing Sacombank’s identity. From those factors, Sacombank will start our
restructuring journey synchronously and effectively. Sacombank will become stronger and
steadier and be ready to overcome the challenges to continue to reach the sea.

2017 is the year we consolidated and promoted the motto leading forward. Leading is one
of our core values to pave new roads heading to success. 2017 is the first year Sacombank
restructures after the merge according to the policy of the Government and the State Bank
of Vietnam given many difficulties. Effortfulness yield customers - we stabilized operations
and collected the first outcome on the basic of sustainable development strategies and
maximally meeting the needs of customers.

The year 2018 is coming with more challenges. However, with steady foundation, intensive
experiences along with new energies, Sacombank has planned out a new business strategy
to catch up the development trend of the banking sector and to be more flexible and
active enough to turn challenges into opportunities. Along with restructuring activities,
more than 18,500 employees of Sacombank all are ready to promote intellectual force and
collective strength in order to bring added value to customers, partners, and shareholders,
as well as contribute to the community development and society. We continue to create
footprints not only in Vietnam, Laos and Cambodia with the breakthrough steps to strong
and sustainable development with the motto Lead Forward.

THE EDITORS OF ANNUAL REPORT 2017

 ANNUAL REPORT 2017

CONTENTS ANNUAL REPORT 2017 06 Chairman’s message

SACOMBANK INTRODUCTION BUSINESS PERFORMANCE 2017, CORPORATE GOVERNANCE CORPORATE RESPONSIBILITY REPORT 2017 FINANCIAL STATEMENTS
BUSINESS PLAN 2018

GENERAL INFORMATION 10 BUSINESS RESULTS 2017 34 ACHIEVEMENT OF AGM RESOLUTIONS AND 62 CORPORATE RESPONSIBILITY REPORT 2017 94 SEPARATE FINANCIAL STATEMENTS 134
SOME KEY ACTIVITIES IN 2017
VISION, MISSION AND CORE VALUES 12 BUSINESS RESULTS OF PERSONAL BANKING, 42 ASSOCIATE THE WORLD’S SUSTAINABLE 96 CONSOLIDATED FINANCIAL STATEMENTS 148
CORPORATE BANKING, CREDIT AND ASSESSMENT ON BOD’S PERFORMANCE 64 DEVELOPMENT GOALS WITH SACOMBANK’S
MILESTONES 14 CURRENCY DIVISIONS ACTIVITIES AND GRI STANDARDS NOTES TO THE CONSOLIDATED FINANCIAL 162
ACTIVITIES OF BOD 65 STATEMENTS
HIGHLIGHTS 2017 16 FINANCIAL POSITION 46 GENERAL INFORMATION 98
BOD’S ASSESSMENT ON THE BANK’S 66
OUTSTANDING AWARDS 2017 18 OPERATION OF SUBSIDIARIES & SUBSIDIARY 47 PERFORMANCE CEO’S MESSAGE ON SUSTAINABLE 99
BANKS DEVELOPMENT
NETWORK DEVELOPMENT 20 BOD’S ASSESSMENT ON BOM’S 66
DEPLOYING BASEL II AT SACOMBANK 52 PERFORMANCE OPPORTUNITIES AND CHALLENGES FOR 100
ORGANIZATIONAL STRUCTURE 22 SACOMBANK
REPORT ON SACOMBANK RESTRUCTURING 54 SUB-COMMITTEES UNDER BOD 66
BOARD OF DIRECTORS 24 PLAN PROFESSIONAL ETHICS 102
OPERATIONAL STRUCTURE OF 67
BOARD OF SUPERVISORS 25 DEVELOPMENT PLAN 2018 55 13 COMMITTEES AND 12 COUNCILS SUSTAINABLE DEVELOPMENT 104
MANAGEMENT
BOARD OF MANAGEMENT 26 KEY DUTIES IN 2018 56 LIST OF SUB-COMMITTEES UNDER BOD 68
STAKEHOLDER ENGAGEMENT 106
DEVELOPMENT STRATEGY BY 2025 30 BOD’S STRATEGIC ORIENTATION FOR 82
SACOMBANK’S OPERATIONS IN 2018 AND MATERIAL ISSUES 108
THE NEXT YEARS
ECONOMIC STANDARDS 110
ACTIVITIES OF BOS 84
ENVIRONMENTAL STANDARDS 114
CONTENTS RELATED TO BOD, BOS AND BOM 88
SOCIAL STANDARDS 116
INFORMATION FOR SHAREHOLDERS 89
STATEMENT OF CONFORMITY WITH GRI 124
STANDARDS
BOARD OF EDITORS

Head Deputy Head Members Secretary

Ms. Nguyen Duc Thach Diem Mr. Ha Van Trung Mr. Do Duc Hung - Planning Manager Ms. Luu Thi Minh Ngoc - Communications Specialist
Chief Executive Officer Deputy CEO cum Chief Financial Officer Mr. Ho Viet Phuoc - Manager of Risk Management Department
Mr. Bui Anh Tu - Director of Financial Institution Design & Printing by
Ms. Tran Thi Binh - Director of Communication and Marketing Lapphuong Design Co., Ltd.
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 CHAIRMAN’S MESSAGE ANNUAL REPORT 2017

CHAIRMAN’S MESSAGE
SACOMBANK HAS DETERMINED ITS MOTTO OF “LEAD FORWARD”, WHICH MEANS “DARE TO THINK - DARE
TO DO - DARE TO CHANGE, DARE TO ACCEPT CHALLENGES”. THESE WILL HELP TO OVERCOME FAILURE
AND PAVE THE WAY TO SUCCESS.

Upholding sense of responsibility, the leadership team platform, the large network and modern technology;
together with more than 18,000 employees have the support of the State management agencies and
to bring a positive business outcome in 2017: profit media agencies, the cooperation of partners and
before tax reached more than VND1,492 billion, 9.6 times investors, and, especially from the trust and companion
higher than 2016. Total assets was nearly VND368,000 of shareholders and of more than 4 million customers.
billion, increasing by 11% from early 2017. Assets
structure showed positive changes. Total deposits With the achievements and the valuable lessons
from economic organizations and individuals reached learned, in 2018 Sacombank will continue
more than VND325,000 billion, up 11.5%; loans to standardizing in corporate governance as well
customers valued at nearly VND223,000 billion, up 12.1%; as focusing on speeding up Restructuring Plan,
credit structure improved in the direction of decreasing in which prioritizing settlement of bad debts to
medium and long term loans; and total revenues gained enhance asset quality. The key goal is sustainable
VND8,650 billion, up 32.4% from 2016, in which revenue development, customer-centric practice, promoting
from personal banking accounted for nearly two thirds, retail banking, increasing revenue from services
creating financial resources to handle outstanding issues. to positively contribute to the Bank’s profitability.
Moreover, the Bank increases competitiveness by
Besides, Sacombank solved more than VND19,665 differentiation strategy in combination with cost
billion of bad debts and outstanding assets in 2017, optimization strategy and cooperation. Sacombank
included more than VND15,365 billion of Restructuring also strives to strengthen digital banking as well as
Plan. Beginning 2017 bad debt was at 6.68% of total heading to leading role in all areas in order to bring a
debts, closing 2017 was about 4.59% and is expected to breakthrough for the Bank.
reduce to 3% in 2018.
To reach these goals, besides our best effort, we hope
In addition, Sacombank completed building and to receive the valuable support, cooperation, trust
applying the corporate governance model suitable and engagement from Shareholders, Customers, and
to new development period. Accordingly, publicity - Investors in the next chapter of Sacombank.
transparency is the guideline and motto for all the
Bank’s activities, from debt settlement to investment, On behalf of Board of Directors, I extend my warmest
procurement, from recruitment - promotion to appreciation and wish you the best of health, happiness
assignment, emulation and reward, and so on. To do and success.
so, it is required not only to change in mindset but also to
pay high attention to completing regulatory document Best regards,
Dear Esteemed Shareholders, Investors,
system and rebuild the Bank’s policies, standards -
Customers and Partners,
specifications. In this regard, BOD has directed and
coordinated with BOM to build a legal framework and
In 2017, Vietnam’s economy showed gradual recovery Regardless of favorable conditions of economy and Chairman
banking governance towards democracy - publicity
and achieved GDP growth of 6.81%, exceeding the banking industry in Vietnam, Sacombank still faces - transparency, creating coordination mechanism of
target thanks to reformed business environment. pressures and challenges from the progress of carrying governance - management - supervision to ensure safe,
out Restructuring Plan. To soon regain its position as a efficient and sustainable operations of the Bank.
The State Bank of Vietnam also had a successful year leading commercial bank, Sacombank has determined
in managing monetary policy, stabilizing system. its motto of “LEAD FORWARD”, which means “dare It can be said that, the achievements of Sacombank
Exchange rate policy was kept stably; settlement of to think - dare to do - dare to change, dare to accept are resulted from the belief and enthusiasm of all
bad debt initially collected positive signal; capital challenges”. These will help to overcome failure and managers and employees, the corporate culture Duong Cong Minh
flows into the key industries. Particularly, restructuring pave the way to success.
process strongly implemented and brought positive
changes.

6 7
 GIỚI THIỆU SACOMBANK ANNUAL REPORT 2017

New path
FROM INNER STRENGTH
In 2017, given strength from branding network, human
resources, brand recognition, product/ service, and business
strategy, Sacombank set out specific targets and action plans
to promote business activities, prevent risks, etc.
and enhancing customer service quality and offering added
values to stakeholders.

8 9
 SACOMBANK INTRODUCTION ANNUAL REPORT 2017

GENERAL INFORMATION BANKING OPERATIONS

Banking services:

Deposit Taking Remittances

Loan Giving Foreign Exchange

International Payment Safe Deposit Box

Export and Import Finance Factoring and Forfaiting

Bank Account Services Insurance and Investment

Card Services Forex trading

EBanking Services Other authorized services by the State

Bank of Vietnam

Express Money Transfer

Vietnamese name: Certificate of Business Registration of Joint Established: 21 December 1991 Head Office: 266-268 Nam Ky Khoi Nghia Street,
Ngân hàng Thương mại Cổ phần Sài Gòn Thương Tín Stock Enterprises: Charter capital: VND18,852,157,160,000 Ward 8, District 3, HCMC
• Business Code: 0301103908
(as at 31 December 2017) Tel: (+84-28) 39 320 420
English name: • Registered on 03 January 1992, No. 059002 at
Saigon Thuong Tin Commercial Joint Stock Bank Listed on: 02 June 2006 Fax: (+84-28) 39 320 424
Business Registration Office, Department of
Planning and Investment, HCMC. SWIFT code: SGTTVNVX Email: [email protected]
Trade name: Sacombank Website: www.sacombank.com.vn
• The 39th revision was made on 26 January 2018.
Certificate of Establishment and Operation No.
006/NH-GP issued by the State Bank of Vietnam on
05 December 1991.

10 11
 SACOMBANK INTRODUCTION ANNUAL REPORT 2017

VISION, MISSION AND CORE VALUES

VISION
Sacombank - A regional leader in modern
retail banking.

MISSION
• Providing best-in-class multipurpose financial solutions for
customers;

• Strengthening the banking industry and protecting staff

wellbeing;

• Maximizing added-value to partners, investors and

shareholders;

• Social responsibilities.

CORE VALUES
• Overcoming challenges towards success;

• Providing innovative approaches for sustainable development;

• Creating differentiation with innovations in business and oper-

ations;

• Committing to strong partnerships with integrity;

• Strengthening community and social responsibility.

12 13
 SACOMBANK INTRODUCTION ANNUAL REPORT 2017

MILESTONES

1991 1997 2002 2008 2013 2016

SACOMBANK WAS A FIRST SACOMBANK WAS THE THE DIVERSIFICATION OF LAUNCHED OPERATION IN LAOS, A NEW VERSION OF INTERNET SACOMBANK OBTAINED
BANK ESTABLISHING FIRST BANK TO OPEN RURAL SACOMBANK’S FINANCIAL STEP BY STEP CONQUERED BANKING SYSTEM WAS ISO 9001:2015
in Ho Chi Minh City, with 100 BRANCHES (where there was no SERVICES AND PRODUCTS began with INDOCHINA MARKET. Sacombank IMPLEMENTED with upgrade CERTIFICATION for quality
staff and a charter capital Sacombank’s branch) to provide the incorporation of Sacombank Asset is the first Vietnamese Commercial features and outstanding management.
of VND 3 billion. access to financial needs for Management Company (Sacombank-SBA). Joint Stock Bank opening branch in functions.
rural communities. Sacombank This was followed by the incorporation of Laos, contributing to promoting trade
contributed to improve living other companies specializing in the and investment cooperation between
conditions of farming money transfer (Sacombank-SBR) and Vietnam and Laos. In 2009, Sacombank
households and reduce usury financial leasing (Sacombank-SBL) continued to open branch in
in the economy. in 2006, and the gemstones and jewelry Cambodia, marking the completion of
(Sacombank-SBJ) in 2008 to meet the strategy to expand market in Indochina.
increasing demands of customers. In 2011, Sacombank transformed 2014 2017
the branch in Cambodia into a 100%
foreign-invested bank in this country. In SACOMBANK ENHANCED RESTRUCTURING.
2015, the Bank continued to transform COLLABORATION WITH This is the first year Sacombank
the branch in Laos into a 100% foreign PARTNERS IN VARIOUS officially carried out the Plan of
1993 2001 2006 invested bank in Laos. SECTORS such as real estate,
telecommunications, education,
Restructuring after the merger
which was approved by the State
automobile, food and health… Bank of Vietnam. In addition,
SACOMBANK OPENED ITS SACOMBANK WAS THE SACOMBANK WAS THE FIRST
to deploy the potential market Sacombank has completed
HANOI BRANCH and FIRST BANK TO RECEIVE COMMERCIAL JOINT STOCK BANK
in Vietnam. building and applying corporate
became the first Bank to
provide express money transfer
INVESTMENT CAPITAL FROM
FOREIGN SHAREHOLDERS,
OF VIETNAM TO LIST ON HO CHI
MINH CITY STOCK EXCHANGE with 2009 governance model in conformity
with a new development period.
services between Hanoi and including Dragon Financial stock code STB, and total capital as
Ho Chi Minh City, reducing the Holding, IFC, ANZ. the listing date was VND1,900 billion. UPGRADING BANKING SYSTEM
use of cash between the two The join of STB in HOSE showed the FROM SMARTBANK TO T24, MODERN
biggest economic hubs. Bank’s commitment on operational VERSION R8, contributing
significantly to the modernization
2015
principles and transparency for safe
and sustainable development process of banking technology, helping
of Sacombank. to handle professional transactions SACOMBANK MERGED WITH
quickly, diversifying multiple products SOUTHERN BANK and became
and services, supporting management
1996 activities... The system has now
one of the 5 biggest commercial
banks in Vietnam in term of total
been upgraded to R11. asset, chartered capital and
SACOMBANK WAS THE FIRST
operation network.
BANK TO ISSUE PUBLIC SHARES
at a par value of VND 200,000 per
share to raise capital.

14 15
 SACOMBANK INTRODUCTION ANNUAL REPORT 2017

HIGHLIGHTS 2017

30 Successfully organized Annual General

6 Meeting of Shareholders for fiscal years 2015

and 2016

The Meeting has elected the Board of Directors

and the Board of Supervisors for the term
2017 - 2021. In which, Mr. Duong Cong Minh
undertaking the position of Chairman will
The leader of the State Bank of Vietnam congratulated lead Sacombank to the new development
the Board of Directors and the Board of Supervisors of period which focuses on implementing the

06 25 27
Sacombank in the term 2017 – 2021.
Restructuring Plan.

Added new function of QR codes

9 Cooperated with Dai-ichi Life Vietnam 12 Mr. Kimihisa Imada – JCB CEO (right) and Mr. Nguyen
Minh Tam – Deputy CEO of Sacombank officially launched
12 (Sacombank QR cash) to mCard
application
Sacombank JCB Ultimate Card in Vietnam.
Both parties signed exclusive insurance agency Without ATM card, Sacombank
contract with 20-year term. This is the longest cardholders now can withdraw cash
insurance term in the field of Bancassurance in Launched highest JCB Ultimate Credit from ATM machine by free installing
Vietnam, currently. Revenue from commission Card in Vietnam mCard to withdraw cash in convenient,
of insurance premium is expected to contribute quick and safe way. Sacombank is the
by 12%-15% of Sacombank’s total revenue from Sacombank cooperated with JCB (Japan) first bank deploying this service in
Representative of Sacombank, Ms. Nguyen Duc Thach Diem services. to launch the first Sacombank JCB Vietnam.
– CEO (left side) and representative of Dai-ichi Life Vietnam,
Mr. Tran Dinh Quan – CEO signed cooperation contract. Ultimate Credit Card in Vietnam. This is

13
the premium line of JCB for individual Also in 2017, Sacombank launched
customers who have income from a range of new products, services
VND80 million per month with special and applications such as Sacombank
10 Sacombank provided quick payments via QR
codes
promotion and premium privileges to
bring the experience of luxury life.
Contactless payment, POS NFC, Samsung
Pay, mCard – QR quick payment, etc.
to diversify mobile payments, meeting
Sacombank QR Pay is accepted all over the world the need of customers in cashless
and supports card-accepted outlets in payment transactions.
channel network, increasing transaction volume
and enhancing service quality.

16 17
 SACOMBANK INTRODUCTION ANNUAL REPORT 2017

OUTSTANDING AWARDS 2017

Bank with most effective

card-accepting unit in 2017 (in
Vietnam’s typical retail banking value chain in
2017) voted by International Data Group (IDG)
Strong Brand Award co-organized by and Vietnam Bank Association.
Vietnam Economic Times and Trade Promotion
Agency (Ministry of Industry and Trade).

Top 40
Most Value
Brands voted
by Forbes

Top 50
Vietnam’s Largest
Private Enterprises Leading bank in deploying payment via QR code
presented by VISA
co-organized by Vietnam Assessment
Report Joint Stock Company and
VietnamNet at VNR500
Top 3 with highest card transaction
volume presented by VISA.
Banks

Leading bank in deploying touchtech payment

presented by VISA
Leading licensee in spending
volume per card presented by JCB.

Leading licensee in total spending

Top 3 with highest volume of card
transactions in Vietnam presented by VISA
volume presented by JCB. Banks

18 19
 SACOMBANK INTRODUCTION ANNUAL REPORT 2017

NETWORK DEVELOPMENT
LAOS

5 1 BANK 4 BRANCHES

HANOI

61 12 BRANCHES 49 TRANSACTION
OFFICES

LAOS NORTHERN Whole

38 28 TRANSACTION system has

566
10 BRANCHES
OFFICES

TRANSACTION POINTS

NORTHERN CENTRAL

47
38 TRANSACTION
9 BRANCHES OFFICES

Vietnam has 552 transaction

points

HOANG SA ISLANDS SOUTH CENTRAL

THAILAND & HIGHLANDS
Laos has 5 transaction
points

52 11 BRANCHES
41 TRANSACTION
OFFICES

Cambodia has 9 transaction

points

SOUTHEAST Operational network

59 11 BRANCHES 48 TRANSACTION
OFFICES
Money transfer units

CAMBODIA
HCMC

182 30 BRANCHES 152 TRANSACTION

OFFICES

TRUONG SA ISLANDS

SOUTHWEST

113 26 BRANCHES 87 TRANSACTION

OFFICES

CAMBODIA

9 1 BANK 8 BRANCHES

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 SACOMBANK INTRODUCTION ANNUAL REPORT 2017

ORGANIZATIONAL STRUCTURE

SHAREHOLDERS COMMITTEE

Management
and BOARD OF SUPERVISORS BOARD OF DIRECTORS
Supervision
Board of Directors’ Office

Internal Audit COMMITTEES

CEO
Executive Secretary
Board of Managers -
Compliance Supporting Office

HUMAN
PERSONAL CORPORATE DEBT INFORMATION RISK
TREASURY CREDIT OPERATION FINANCE SUPPORTING RESOURCES
BANKING BANKING MANAGEMENT TECHNOLOGY MANAGEMENT
MANAGEMENT

Personal Banking Corporate & FDI FX & Derivatives Debt Management Domestic Payment Planning Administration Human Resources IT Infrastructure Risk Management
Department Banking Markets Centre Centre Credit Centre Centre Department Department Department Department Department
Department

eBanking SME Banking Capital Market Special Debt Valuation International Accounting Construction Core banking
Department Department Department Department Department Payment Centre Department Department Training Centre Operations Legal Department
Department

Bancassurance Financial Investment Customer Services Communications & Quality Software

Centre Institutions Department Centre ALM Department Marketing Management Development
Department Department Department Department

Telesales Cashiering Payment

Centre Department Technology
Department

Operations IT Security
Card Centre Appraisal Unit Department

Business Regional Office REGIONS SUBSIDIARIES SUBSIDIARIES

Development Unit

Internal Control
Unit
Corporate Banking Sacombank Sacombank Sacombank-SBL Sacombank-SBR Sacombank-SBA Sacombank-SBJ
Department Cambodia PLC Laos
Business Department
Personal Banking
Department
Branches
Accounting & Cash
Department
Risk Control
Department

Transaction Transaction
Offices Offices

Business Unit Accounting Risk Control Business Unit Accounting

& Cash Unit Unit & Cash Unit

22 23
 SACOMBANK INTRODUCTION ANNUAL REPORT 2017

BOARD OF DIRECTORS BOARD OF SUPERVISORS

Mr. DUONG CONG MINH

Chairman of BOD

• Having 32 years of experience in

Economics - Finance – Banking.
• Bachelor of Economics.

Mr. KIEU HUU DUNG Mr. PHAM VAN PHONG Mr. TRAN MINH TRIET
Standing Vice Chairman of BOD Vice Chairman of BOD Chief Supervisor
(Resigned from 22 March 2018) • Having 16 years of experience in
• Having 37 years of experience in
Economics - Finance - Banking.
• Having 26 years of experience in Economics - Finance - Banking.
Economics - Finance - Banking. • Bachelor of Economics, Bachelor • Master of Business Administration.
• Bachelor of International Relations, of Politics, Master of Business
Master of Economics – Financial Administration.
Development, Graduate Diploma of
Politics (Advanced).

Mr. NGUYEN MIEN TUAN Ms. NGUYEN THI THANH MAI Mr. LE VAN TONG
Member of BOD Member Member
• Having 20 years of experience in
•
Economics - Finance - Banking.
• Having 24 years of experience in Having 29 years of experience in
Economics - Finance - Banking. Economics - Finance - Banking.
• Bachelor of Arts (English Literature),
•
Master of Economics.
• Bachelor of Business Administration. Bachelor of Science.

Mr. NGUYEN XUAN VU Ms. LE THI HOA Mr. HA TON TRUNG HANH
Member of BOD Independent member Member

• Having 11 years of experience in • Having 34 years of experience in • Having 34 years of experience in

Economics - Finance - Banking. Economics - Finance - Banking. Economics - Finance - Banking.
• Bachelor of Economics, • Bachelor of Finance - Banking, • Bachelor of Banking, Master of
Master of Finance - Banking. Bachelor of English, Economics - Finance - Banking.
Master of French - Vietnamese
Economics.

24 25
 SACOMBANK INTRODUCTION ANNUAL REPORT 2017

BOARD OF MANAGEMENT

Ms. NGUYEN DUC THACH DIEM Ms. NGUYEN NGOC QUE CHI Ms. QUACH THANH NGOC THUY
Chief Executive Officer Deputy CEO Deputy CEO

• Having 18 years of experience in • Having 23 years of experience in • Having 26 years of experience in

Economics - Finance - Banking. Economics - Finance - Banking. Economics - Finance - Banking.
• Master of Business Administration. • Master of Economics. • Bachelor of Business Administration.

Responsible for general management Responsible for Corporate Banking and Responsible for Operation Division.
to all activities of Sacombank. Currency Divisions.

Mr. HA VAN TRUNG Mr. NGUYEN MINH TAM Mr. BUI VAN DUNG
Deputy CEO cum Deputy CEO Deputy CEO
Chief Financial Officer (CFO)
• Having 23 years of experience in • Having 29 years of experience in
• Having 21 years of experience in Economics - Finance - Banking. Economics - Finance - Banking.
Economics - Finance - Banking. • Master of Economics. • Bachelor of Mathematics and
• Master of Finance and Banking. Economic Cybernetics.

Responsible for Personal Banking. Responsible for Information

Responsible for Finance and Technology Division.
Supporting Divisions.

Mr. PHAN DINH TUE Mr. LE VAN RON Ms. NGUYEN THI LE AN
Deputy CEO Deputy CEO Deputy CEO

• Having 34 years of experience in • Having 27 years of experience in • Having 14 years of experience in

Economics - Finance - Banking. Economics - Finance - Banking. Economics - Finance - Banking.
• Bachelor of Business Administration • Master of Business Administration. • Bachelor in Finance, Currency and
- Foreign Trade. Credit.

Responsible for Risk Management Responsible for Human Resource

Responsible for Credit Division. Division. Management Division.

26 27
 SACOMBANK INTRODUCTION ANNUAL REPORT 2017

BOARD OF MANAGEMENT (continued)

Mr. HO DOAN CUONG

Mr. TRINH VAN TY Mr. VO ANH NHUE
Mr. LE DUC THINH Deputy CEO
Deputy CEO Deputy CEO
Deputy CEO • Having 22 years of experience in
• Having 13 years of experience in
Economics - Finance - Banking. • Having 24 years of experience in
• Having 22 years of experience in Economics - Finance - Banking.
• Bachelor of Business Administration. Economics - Finance - Banking.
Economics - Finance - Banking. • Bachelor of Business Administration. • Master of Finance.
• Bachelor of Economics.
Responsible for business operation
Responsible for Sacombank-SBA, (Southeast Region). Responsible for business operation
Responsible for Debt Sacombank-SBL, Sacombank Cambodia PLC (Southwest Region).
Management Division. and Sacombank Laos.

Mr. DAO NGUYEN VU Ms. HA QUYNH ANH

Deputy CEO Deputy CEO

• Having 26 years of experience in • Having 25 years of experience in

Economics - Finance - Banking. Economics - Finance - Banking.
• Bachelor of Banking. • Bachelor of Economics and Law.

Responsible for business operation Responsible for business operation

(East HCMC). (Hanoi City).

Mr. PHAN QUOC HUYNH Mr. NGUYEN BA TRI Mr. HOANG THANH HAI Mr. HUYNH THANH GIANG
Deputy CEO Deputy CEO Chief Accountant
Deputy CEO

• Having 25 years of experience in • Having 24 years of experience in • Having 21 years of experience in • Having 23 years of experience in
Economics - Finance - Banking. Economics - Finance - Banking. Economics - Finance - Banking.
Economics - Finance - Banking.
• Bachelor of Laws. • Bachelor of Economics. • Bachelor of Economics. • Master of Economics.

Responsible for Sacombank-SBJ and Responsible for business operation Responsible for business operation
Sacombank-SBR. (West HCMC). (North Region).

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 SACOMBANK INTRODUCTION ANNUAL REPORT 2017

DEVELOPMENT STRATEGY BY 2025

4
SACOMBANK IS CONSISTENT WITH RETAIL BANKING DEVELOPMENT STRATEGY AIMING TO
MOVE FROM “QUANTITY” TO “QUALITY” AND DETERMINES THAT EFFECTIVE BUSINESS - SAFE Focusing on retail market and move from FAST development
OPERATION - SUSTAINABLE GROWTH IS THE KEY ORIENTATION IN NEW DEVELOPMENT PERIOD. (quantity) into SUSTAINABLE development (quality):
IN WHICH, (I) CONSOLIDATING HUMAN RESOURCES, (II) RESTRUCTURING TRANSACTION POINTS, • Focusing on mass customers, increasing retail lending and pushing
(III) SOLVING OUTSTANDING ISSUES AFTER THE MERGE AND (IV) CONSOLIDATING OPERATIONAL decentralized lending;
MODEL ARE THE KEY GOALS. TO BE SPECIFIC: • Paying attention to credit quality and intensifying risk management;
• Focusing on product development and enhancing service quality
to create competitive advantages.

1 Deploying new governance model in the direction of transparency -

efficiency - modernization:
• Boosting corporate governance restructuring towards simplicity and
minimizing intermediate steps;
5 Investing and exploiting modern technology to serve business and
governance strategy of the Bank. Increasingly searching and applying
advanced technologies, considering modernization as a key task for
improving productivity, exploiting modern sales channels and
• Standardizing the process of building and managing of business plan in transaction points.
line with international models (ISO, BSC);
• Focusing on sales force, improving working environment to stimulate
creativity of all employees in order to promote collective strength;
• Reviewing business model and operational process to support and

6
maximizing the retail strategy;
• Building/improving risk management model according to international Taking advantages of network to enhance competition capability,
standards for all activities of the Bank; ensuring effective - safe - sustainable growth:
• Optimizing effectiveness and advantages of internal control system of • Changing from short - term development into long - term
the Bank. development;
• Expanding business scale and intensifying effectiveness of each
transaction point.

2 Completing and implementing human resource policy synchronously

and consistently, especially KPIs system to increasingly enhance the quality
and productivity of human resources, improve and create an environment,
where talented people are offered with transparent remuneration policy, 7 Developing modern financial products and services based on
advanced technology to add more product and service utilities for
attracting customers and increasing the contribution of digital banking
equal opportunity and spirit of solidarity - friendliness - discipline to jointly products and services into the Bank’s revenue.
dedicate and develop.

3 Growing total assets and strongly restructuring Liabilities and Assets

• Enhancing quality of earning assets and capital efficiency;
• Increasing capital on the basic of optimizing secondary capital source
to improve financial ratios, contributing to bring added values for
8 Trying to maintain operational efficiency higher than that of
banking industry, diversifying income sources, focusing on stable
income streams and gradually reducing the dependence on credit
income.
shareholders.

30 31
New opportunities
FROM INCREASING CHALLENGES
Challenging economic conditions can be opportunities
for Sacombank to affirm its position as one of the leading
commercial banks in Vietnam. The practical results and the
trust from Customers, Shareholders, Partners, international
community, etc. are the visible evidences for this.
 BUSINESS PERFORMANCE 2017, BUSINESS PLAN 2018 ANNUAL REPORT 2017

BUSINESS RESULTS 2017

(According to the Consolidated Financial Statements)

BUSINESS TARGETS FACTOR

TOTAL ASSETS REACHED TOTAL NET REVENUES

Others
1% 3.6%

368,469
Trading/investment in securities

8,645
13.2% 4% FX trading

VND billion
VND billion
38.9%
11%
86.8% 61.1% 30.3% Services
32.4%
DEPOSITS FROM ECONOMIC
ORGANIZATIONS AND INDIVIDUALS

325,461
VND billion
Deposits structure from economic
organizations and individuals
Structure of Net Revenues
Interest Revenue
Enterprises Non-Interest Revenue
Individuals
11.6%
EFFICIENCY FACTOR
LENDING PROFIT BEFORE TAX

NIM 2.18% 0.36%

1,492
222,947
VND billion
VND billion
ROA 0.34% 0.31%
was 9.6 times higher
ROE 5.2%
41.3%
58.7% 12.1% than that of 2016 4.8%

SAFETY FACTOR

Lending structure RATE OF SHORT-TERM CAPITAL

CAPITAL ADEQUACY USED FOR MEDIUM-TERM AND
Enterprises RATIO (CAR) LONG-TERM LENDING RATE OF BAD DEBTS
Individuals

11.3 % 0.48% 39.44% 8.23% 4.59% 2.22%

34 35
 BUSINESS PERFORMANCE 2017, BUSINESS PLAN 2018 ANNUAL REPORT 2017

BUSINESS RESULTS 2017 (continued)

TOTAL ASSETS REACHED

Increasing total assets and restructuring
asset portfolio in a positive way
368,469
VND billion
As at 31 December 2017, total assets reached
VND368,469 billion, increasing by VND36,446 billion
(more than 11%) from early 2017. This has shown the
DEPOSITS FROM ECONOMIC
ORGANIZATIONS AND INDIVIDUALS increasing efforts of Sacombank in restructuring period.

During the year, Sacombank has actively restructured

325,461
asset portfolio, strictly collected bad debts and
outstanding assets, allocating and using liabilities and
VND billion assets appropriately to ensure operational safety.
Earning assets increased by 12.3%; earning assets to total
CREDIT REACHED
assets ratio increased by 0.8% from early 2017. Capital
reached VND29,113 billion, increasing by 31.1% from

225,595
VND billion
early 2017. Owner’s equity valued at VND23,236 billion,
increasing by 4.7% from early 2017, contributing to
enhance the Bank’s financial capability.

Restructuring deposits to meet the need of Growing credit in line with the direction of Enhancing credit quality, accelerating Fostering modern services, promoting
capital use and ensure safety factors retail banking, focusing on priority areas: treatment of bad debts and outstanding advantages of payment technology, growing
assets: income:
• Measure: Applying flexible solutions, promoting Credit mechanism: Creating a flexible credit
sales activities and customer care as well as setting mechanism, increasing autonomy, focusing on safety To implement the major task of strictly dealing with Sacombank always pays high attention to applying digital
up internal KPIs to grow deposits. factors and ensuring to satisfy the limits allowed by the bad debts, Sacombank has simultaneously deployed a technology, enhancing service quality, launching products
State Bank. variety of measures to control and prevent arisen bad with accessibly high security, providing quick payment
• Result: Retaining the existing customers and debts and has mobilized all resources to complete the solutions, connection technology among sectors,
The loan portfolio was diversified (at the proportion
attracting more 744.3 thousand customers, by objectives. customizing services. With more than 250 products of
≤ 5% for one sector/industry), focusing on priority
21.3%. Deposits from economic organizations deposit, loan, payment service, currency, card, digital bank,
areas, low-risk industries, reducing the proportion of
and individuals reached VND325,461 billion, The Resolution No.42/2017/QH14 on piloting the and insurance together with combo packages designed
medium and long term loans. The increase in average
increasing by 33,807 billion (more than 11.6%) settlement of bad debts has created a legal framework for corporate and personnel customers, Sacombank has
loan interest and earning assets have contributed to
from early 2017, reaching 92.6% of the plan and convenient conditions for Sacombank to accelerate offered attractive experiences, meeting the demands of
improving Net Interest Margin (NIM).
assigned by Shareholders Meeting. Liquidity was recovery/settlement of bad debts and offsetting assets. customers.
flexibly driven to meet the demand of using Credit balance gained VND225,595 billion, increasing by As a result, the Bank recovered VND19,665 billion
capital. Source of capital changed positively, VND24,978 billion (more than 12.5%) from early 2017, (including liquidating VND2,786 billion of collaterals, Besides from the traditional products, Sacombank has
ensuring safety factors. if excluding the increase of 19.2% from selling debts selling VND2,608 billion of debts according to market exploited insurance field and has officially become the
to VAMC. This was suitable to the credit growth rate as price, collecting VND14,271 billion of bad debts, exclusive insurance agent of Dai-ichi Life Vietnam in 20
• Deposits: from both individuals and enterprises approved in the Restructuring Plan. Lending valued at principals and interests from accounts sold to VAMC years. This cooperation contributed to diversify the Bank’s
were increased by 11.1% and 15.1%, respectively. VND222,947 billion, increasing by VND24,087 billion and receivables). products and service as well as making a remarkable
This increase was suitable to the Bank’s (more than 12.1%). Excluding the debt sold to VAMC, proportion to the Bank’s income.
diversification strategy with 86.8% of deposits the loans given in VND made a good growth rate (by As at 31 December 2017, Sacombank’s outstanding
from individuals. Long-term and medium-term more than 19.6%); the loans given in foreign currencies debts decreased by VND5,036 billion (less than 30.8%). Revenue from services in 2017 reached VND2,624 billion,
deposits increased by 269.3% from early 2017, were higher compared to the previous year (by more The proportion of outstanding debts decreased from in which revenue from traditional services increased by
accounting for 19.3% of total deposits, increasing than 9.2%), mainly for exportation. The Bank has 8.09% to 4.99%. Bad debts decreased by VND3,340 27.5% from 2016, making up 30.3% (increasing by 8.5%
by 13.5% in term of proportion. This has proven intensified the supervision on high-risk areas and billion (less than 24.3%). The proportion of bad debts from early 2017), gradually reducing the dependence on
the increasing trust of customers for Sacombank. increased loans to serve agricultural production (by decreased from 6.81% to 4.59%. credit operation.
more than 36.8%), industry (by more than 115.9%) and
consumer (by more than 36.9%).
36 37
 BUSINESS PERFORMANCE 2017, BUSINESS PLAN 2018 ANNUAL REPORT 2017

BUSINESS RESULTS 2017 (continued)

E-Banking services: Insurance operation:
• Number of individual customers using Internet banking Launching from September 2017 insurance operation
Card operations: increased by 29.9% (equal to 120.2% of the plan). has brought a good outcome with 2,973 life insurance
• Existing customers numbered at 3.95 million customers, 18.3% higher than from early 2017. Number • Number of automatic bill pays increased by 49.2% policies successfully signed and total first year premium
of cardholders increased by more than 610 thousand of customers, reaching 124.6% of the plan. ATM (equal to 116.6% of the plan). (FYP) valued at VND45.5 billion (equal to 110.2% of the
network continuously expanded with 1,033 machines, 84 machines higher than from early 2017. • Revenue from e-banking service valued at VND115 plan), bringing a core collection of VND75 billion. In
Number of POS in use reached 7,070 machines, 105 machines higher than from early 2017. billion, up 46.7% from 2016 and reaching 117.9% of the addition, Sacombank received a large amount of first aid
• Card payment volume hit VND18,730 billion, increasing by 46.2%; POS transaction volume reached plan. from the partner.
VND11,660 billion, increasing by 29.1%; ATM transaction volume reached VND196,301 billion, up 29.2%
from 2016. Domestic payment: Investment activities:
• Total revenue from card service increased by 30.4%, completing 105.3% of the plan. In which, card • Transaction volume hit VND9.7 trillion, up 23.4% from Total revenue from securities investment was VND411.43
service created VND510 billion of revenue, increasing by 29% and accounting for 58.7% of total revenue 2016, reaching 109.3% of the plan. billion, including VND258.84 billion from debt securities
from card service, making up 105.3% of the plan. Revenue from card valued at VND356 billion, increasing • Domestic payment fee valued at VND559 billion, (corporate bonds) VND152.59 billion from equity securities.
by 32.5% and reaching 104.8% of the plan. increasing by 23.3% from 2016 and reaching 110.1% of
the plan.

International payment:
• Volume of international payment in Vietnam reached
USD8.7 billion, up 11.2% from 2016, reaching 103% of
the plan.
EXISTING CUSTOMERS NUMBER OF CARDHOLDERS • International payment fee reached VND386 billion, up

3.95 MILLION
5.2% from 2016, nearly completing the plan.
of customers
more
than 610 THOUSAND
of customers REVENUE FROM
VOLUME OF
INTERNATIONAL PAYMENT
E-BANKING SERVICE

CARD PAYMENT VOLUME NUMBER OF POS IN USE

115 VND billion 8.7 USD billion

up 46.7% from 2016 up 11.2% from 2016

18,730 VND billion 7,070 machines

TRANSACTION VOLUME OF
2,973 LIFE
INSURANCE POLICIES
DOMESTIC PAYMENT SERVICE SUCCESSFULLY SIGNED AND TOTAL

9.7
FIRST YEAR PREMIUM (FYP)

REVENUE FROM CARD POS TRANSACTION VOLUME

VND trillion 45.5 VND billion
up 23.4% from 2016 equal to 110.2% of the plan
356 VND billion 11,660 VND billion

CORPORATE BONDS

TOTAL REVENUE FROM

SECURITIES INVESTMENT 258.84 VND billion

ATM NETWORK EXPANDED WITH ATM TRANSACTION VOLUME

411.43 VND billion including EQUITY SECURITIES

1,033 machines 196,301 VND billion

152.59 VND billion

38 39
 BUSINESS PERFORMANCE 2017, BUSINESS PLAN 2018 ANNUAL REPORT 2017

As of 31
BUSINESS RESULTS 2017 (continued) No. Items Regulated December Completing regulatory documents to create a safe legal
2017 framework in all activities
Capital adequacy ratio Amending and supplementing more than 278 important
1 ≥9% 11.30% regulatory documents to create a safe legal framework
(consolidated)
Meeting expectation in forex trading: for all activities in line with the new situation; improving
Short-term capital to
2 medium-term and long-term ≤50% 39.44% interface of S-office application, progressing online
Despite the inconvenience of forex trading market in 2017, revenue from forex trading reached VND344 loan ratio of regulatory documents, increasing access speed;
billion, up 29.8% from 2016, reaching 100.9% of the plan thanks to effectively exploiting international authorizing extraction of documentary list/form to enable
market and CNY cross-border trade. As for remittance service, Sacombank has become a leader in Capital contribution ratio and
3 ≤40% 18.05% the entities to be convenient and proactive in using
integrated payment technology linked with the global partners, remitting money just after 2 minutes. Share purchase
documents as well as more strict controlling the use of
Revenue from remittance service reached USD1.07 billion, up 9% from 2016, accounting for 11.2% of 4 Fixed-asset investment ratio ≤50% 41.05% regulatory documents
remittance market in Vietnam (valued at USD9.5 billion, approximately) and built Sacombank’s prestige
5 Loan to deposit ≤80% 65.78%
in cross-border trade. Building suitable human resource mechanism and
Government bond investment on policy
6 ≤35% 10.49%
short-term capital Adjusting/supplementing and completing human
Optimizing and minimizing expenses:
7 Liquidity reserve ratio ≥10% 12.68% resource mechanism and policy, increasing welfare
Sacombank has frequently reviewed, evaluated solutions to reduce and compensation; implementing programs to attract
8 Rate of 30-day coverage ratio talented people and developing human resources;
cost, strictly controlling administrative overheads, prioritizing
investment in business development in combination with operational + VND ≥50% 54.67% surveying employees satisfaction and giving out solutions
efficiency and enhancement of performance efficiency. In addition, to increase their engagement to the Bank; building career
+ Other currency (in VND) ≥10% 75.46% promotion roadmap for at; surveying capability of
to ensure effective restructuring, Sacombank has evaluated
productivity, human resource planning and salary reform. The Bank management level with objective and multidimensional
has also established database to review, measure and evaluate labor
Successfully deploying some key activities: information; rearranging human resources according to
productivity of each position. As a result, cost-effectiveness was capability and skill to enhance performance efficiency;
Improving corporate governance: promoting compliance culture based on a consistent,
improved remarkably. Administrative overheads to total net revenues
Completing downstream management structure from simultaneous and comprehensive standards.
ratio decreased from 78.3% to 72.3%.
Head Office to branches; applying corporate governance
model; arranging human resources in conformity Urgently rearranging operational network
PROFIT BEFORE Improving profitability ratio, increasing profit before with professional qualifications and skills to enhance Reviewing and building Overall Restructuring
TAX REACHED tax: performance efficiency; building legal framework Plan for operational network by 2022 which was

1,492 VND billion

The Bank’s revenues in 2017 were more and more stable, reaching
VND8,645 billion, increasing by 32.4% from 2016, in which, net profit has
transparently and clearly; deploying coordination
mechanism effectively; paying attention to business
driver; changing mindset in the direction of transparency
approved by Shareholders Committee in Resolution
No. 244/2017/NQ-HĐQT dated 22 November 2017

recovered after restructuring lending portfolio and strong settlement in business and governance - management to ensure Developing brand and enhancing social activities
255% of the plan assigned
of bad debts, reaching VND5,278 billion, increasing by 31.3%. NIM complying with development orientation; modifying Winning 12 awards (Top 40 most value brands by Forbes,
by Shareholders Committee
increased to 2.18% from 1.82% of 2016. Besides, Sacombank has branch/transaction office ranking criteria; and focusing Top 50 Vietnam’s largest private enterprises, the Bank
made provision and allocation of profit more than those required in on improving staff productivity. with effective ATM network 2017, Top 3 Visa issuance
the Restructuring Plan (reaching 135.7%). Consolidated profit before banks with highest transaction volume in Vietnam, etc.);
tax reached VND1,492 billion (equal to 255% of the plan assigned Maintaining advantages in technology, intensifying implementing society giving back (Sacombank - Sharing
by Shareholders Committee). Profitability ratio was improved security and creating firm foundation to develop new from the heart, Sacombank - Foster a dream and
considerably; ROE made up 5.2% (up 4.80%). products Sacombank Marathon for community health);
Upgrading Core T24, Data Mining, website, card, etc. organizing PR activities for branding activities,
systems, giving a comprehensive support to subsidiary consolidating behavior and discipline to maintain
Ensuring safety factors, enhancing transparency of bank, applying information technology into products and Sacombank’s culture, deliver messages, orientations
banking information: services, integrating new functions, providing premium and images of Sacombank in a positive way.
products, flexible, modern and safe utilities for customers
Safety factors continued to be improved considerably, approaching (launching QR code, Samsung pay, Omni card, Platinum Accelerating joint venture and association activities
standards, reflecting the essence and complying with the regulations Cashback, etc.). E-Banking Project – Phase 4 is being carried Signing 20-year-term exclusive insurance collaboration
of the State Bank. Especially, capital adequacy ratio (CAR) increased out, improving 28 functions, updating IB platform and contract with Dai-ichi Life Vietnam since September
from 10.82% to 11.30%; the proportion of short-term capital new version of MB system. Building and implementing 2017, in which the first year premium reached 110.2% of
used for medium and long term loans decreased from 47.67% to project of modernizing loan original system (LOS). the plan.
39.44%; and the liquidity ratio in VND within 30 days increased
from 51.77% to 54.67%.

40 41
 BUSINESS PERFORMANCE 2017, BUSINESS PLAN 2018 ANNUAL REPORT 2017

BUSINESS RESULTS OF PERSONAL BANKING, CORPORATE

BANKING, CREDIT AND CURRENCY DIVISIONS

DURING THE YEAR, SACOMBANK HAS SUCCESSFULLY RESTRUCTURED AND TRANSFORMED

INTO A NEW ORGANIZATIONAL MODEL TOWARD SIMPLICITY AND PROFESSIONALIZATION
OF NECESSARY AREAS, SUPPORTING TO BUSINESS DIVISIONS, ENHANCING OPERATIONAL
QUALITY AND EFFICIENCY.

INDIVIDUAL CUSTOMERS ENTERPRISE CUSTOMERS DEPOSITS REACHED

NUMBERED AT DEPOSITS REACHED NUMBERED AT

more than

4.2 MILLION
of customers 282,634 VND billion
126 THOUSAND
of customers 42,827 VND billion
up 20.6% from early 2017 up 11.1% from early 2017 up 19.1% from early 2017 up 15.1% from early 2017

LOANS GIVEN TO INDIVIDUAL REVENUE FROM PERSONAL LOANS GIVEN TO ENTERPRISE REVENUE FROM CORPORATE
CUSTOMERS REACHED BANKING SERVICES HIT CUSTOMERS REACHED BANKING SERVICES REACHED

130,894 VND billion

1,981 VND billion
92,053 VND billion
643VND billion

up 25.8% from early 2017 up 36.1% from 2016 up 6.6% from early 2017 up 14.3% from 2016

Personal banking: Corporate banking:

• Individual customers numbered at 4.2 million of customers, up 20.6% from early 2017. • Enterprise customers numbered at more than 126 thousand of customers, up 19.1% from
• Deposit balance valued at VND282,634 billion, increasing by 11.1% from early 2017. early 2017. In which, the Bank attracted 1,600 new customers opening payment accounts and
Sacombank successfully launched 2 products: flexible term deposit and multi-benefit introduced services to more than 530 enterprise customers in 3 countries in Indochina. Deposits
term deposit which have attracted more than 8,000 attendants with the deposit value up from enterprises reached VND42,827 billion, increasing by 15.1% from early 2017, in which the
to VND36,000 billion and helped increase medium and long term deposits. Online deposit deposits from FDI customers increased by 10.5%.
increased by 33.5%. • Sacombank also introduced 11 incentive lending packages (connecting enterprise customers,
• Loans given to individual customers reached VND130,894 billion, up 25.8% from early 2017, stabilizing market, VIP customers, new customers, etc.) which were valued at VND14,250 billion.
in which, consumer lending was encouraged through the incentive packages: VND10,000 As a result, loans given to enterprise customers reached VND92,053 billion, up 6.6% from early
billion of lending for serving household consuming and VND1,000 billion of lending for rural 2017 (excluding debts sold to VAMC), making up 41.3% of total loans.
development. • Approaching and developing products with new and advanced technology (MT940, credit
• Revenue from personal banking services hit VND1,981 billion, up 36.1% from 2016 solution of Trade Card (GT Nexus), cash collection machine of G4S, Swift for Corporate, Home
(accounting for 64.8% of total revenue from services). In which, revenue from card services and Banking); strengthening payment activities in Indochina; implementing electronic invoicing
e-Banking services increased by 29% and 46.7%, respectively, thanks to new applications such solution; promoting online tax payment; successfully introducing 09 connection programs to
as QR code, Samsung pay, Omi Card, Platinum Cashback - refunding to customer’s accounts, support large distributors/agents in the market. The Bank also developed 2 logistics connections
mSign, e-Banking - Phase 5; development, expanding affiliate partnership, etc. to provide for managing mortgaged assets. As a result, revenue from corporate banking services reached
more utilities and safety to the customers. VND643 billion, increasing by 14.3% from 2016, accounting for 35.2% of total revenue from
services.

42 43
 BUSINESS PERFORMANCE 2017, BUSINESS PLAN 2018 ANNUAL REPORT 2017

BUSINESS RESULTS OF PERSONAL BANKING, CORPORATE

BANKING, CREDIT AND CURRENCY DIVISIONS (continued)

Credit:
Credit is the key contribution to the Bank’s revenue in
restructuring period. Therefore, in order to ensure stable
and sustainable growth of credit in line with the objectives
and enhance quality of lending, Sacombank has intensified
management and carried out solution/mechanism to control
GROWTH OF BORROWERS
and develop credit operation in each specific area:

more than
12
• Reviewing and checking the compliance of all credit
THOUSAND application of branches/transaction offices, timely
of customers instructing and rectifying possible mistakes to minimize
risks and enhance safety in lending activities. Besides
up 3.5% from early 2017 checking documents, Sacombank frequently conducted
site visiting to the borrowers.

• Credit mechanism has been amended and improved to make it more flexible and easier and increase the
autonomy of the entities (making their own decision on collateral assessment, credit term and credit
line, credit/total assets ratio, etc.). However, the operational safety is still hedged by a credit limit which
is set out based on governance - management capability of each entity.
• Frequently updating, adjusting and building documents, satisfying the demand on credit issuance in
timely and consistent manners in the whole system.
• Setting up Evaluation Department, conducting centralized reappraisal for collateral assets to shorten
time and to be more professional in appraising process and risk prevention.
• Continuing to implement the project of modernizing Credit granting process (LOS) according to
progress. The project is expected to complete the phase of development and start the phase of trial
operation (UAT) in 2018.
• Effectively controlling outstanding debts and proactively settling bad debts.

As a result, credit growth closely followed the Bank’s plan (increasing 19.2% from early 2017, excluding
debts sold to VAMC). Loan customers increased by more than 12,000 customers (up 3.5%), mainly including
customers borrowing under VND5 billion (increasing by 11 thousand customers (+3.3%), occupying 99%
of total customers). Lending portfolio was restructured, stabilizing interest income source (increasing by
31.3%). NIM was improved (increasing by 0.36%).

Currency:
Thanks to flexible solutions and collaboration with local and overseas banking agents, Sacombank has
retained optimal liquidity and maintained trade finance limit to timely meet the demand of payment,
enabled payment activities of all transaction points and business areas to be stable and smooth. In
addition, due to exploit international market and strongly promote CNY cross-border, Sacombank gained
VND344 billion from forex trading, increasing by 29.8% from 2016.

44 45
 BUSINESS PERFORMANCE 2017, BUSINESS PLAN 2018 ANNUAL REPORT 2017

FINANCIAL POSITION OPERATION OF SUBSIDIARIES

& SUBSIDIARY BANKS
Assets:
IN 2017, SUBSIDIARIES/SUBSIDIARY BANK CONTINUED TO FOCUS ON PROMOTING OF KEY
Sacombank has concentrated all resources to thoroughly
BUSINESS OPERATIONS, CONTROLLING RISKS, STRENGTHENING CROSS-SALES AND SUPPORTING
handle outstanding issues, supporting continuous
CHARTERED CAPITAL growth in scale in association with safe and sustainable
PARENT BANK IN RELEVANT AREAS. THANKS TO THOSE FACTORS, MOST OF ENTITIES IMPROVED

18,852
THEIR OPERATION SCALE AND BUSINESS RESULTS AND REACHED THE PLANNED TARGETS.
growth of asset structure, ensuring prudence and
efficiency, gradually approaching current international
governance practices.

VND billion Total assets in 2017 increased by 11% from early 2017, Business results 2017
in which earning assets (excluding bad debts and VAMC
Sacombank remained its position bonds) increased by 12.3% (up 0.8% in proportion from
in Top 5 commercial joint stock early 2017).
banks with highest chartered SACOMBANK-SBA SACOMBANK-SBL SACOMBANK-SBR
capital in Vietnam • Lending (excluding bad debts) increased by 14.8%
from early 2017, accounting for 83% of earning assets.
PROFIT PROFIT PROFIT
BEFORE TAX BEFORE TAX BEFORE TAX
• Investment securities increased by 8.2% from early
In addition, Sacombank frequently monitored and
evaluated debt recovery ability, taking the advantages
2017, occupying 12.5% of earning assets, mainly
from investment in government bonds (increasing
98.3 VND
billion 76.4 VND
billion 8.7 VND
billion

of the Government’s support, implementing effective by 6%), ensuring high rate of liquidity. 109.2% 103.4% 118.4%
of the plan of the plan of the plan
measures to recreate capital for business. As a result,
the proportion of bad debts and VAMC bonds in total
assets decreased by 0.8%.

Liabilities:
CHARTER
CAPITAL 800 VND
billion
CHARTER
CAPITAL 300 VND
billion
CHARTER
CAPITAL 15 VND
billion
Total liabilities of Sacombank valued at VND345,233
billion, increasing by 11.4% from early 2017. Liability
structure was stable while deposits from economic
organizations and individuals occupied a remarkable
proportion (of 94.3%, increasing by 0.1%).

• Deposits from economic organizations and SACOMBANK

individuals increased by 11.6% from early 2017. In CAMBODIA PLC SACOMBANK LAOS SACOMBANK-SBJ
which, long-term deposits increased by 269.3%,
contributing to improving safety factors.
PROFIT PROFIT PROFIT
BEFORE TAX BEFORE TAX BEFORE TAX
• Deposits on the secondary market made up a
low proportion (at 3.8%, decreasing by 0.5% from
2016 thanks to stable liquidity of deposits from
39 VND
billion 31 VND
billion -3.8 VND
billion

economic organizations and individuals).

102.8% 101.2%
of the plan of the plan

• Foreign exchange gap decreased by VND20

billion from 2016.

Owner’s equity reached VND23,236 billion, increasing

CHARTER
CAPITAL 783 VND
billion
CHARTER
CAPITAL 819 VND
billion
CHARTER
CAPITAL 250 VND
billion
by 4.7% from 2016. The chartered capital of
VND18,852 billion, Sacombank remained its position
in Top 5 commercial joint stock banks with highest
chartered capital in Vietnam.

46 47
 BUSINESS PERFORMANCE 2017, BUSINESS PLAN 2018 ANNUAL REPORT 2017

OPERATION OF SUBSIDIARIES & SUBSIDIARY BANKS (continued)

18.7
259%

Sacombank Asset Exploitation & Sacombank Overseas Remittance 15

Debt Management Co., Ltd. Service Company (Sacombank-SBR):
415%
98.3 (Sacombank-SBA):
87.2 Remittance services faced fierce competition 34.7%
75.9 Sacombank-SBA reached 100% of capacity from existing new remittance companies with 24.1% 8.7
69.2 67.5 larger scale. Given that, Sacombank-SBR has -33.4%
of leasing warehouse and yard, earned a good
revenue growth and contributing nearly actively searched new customers to increase -80.6%
79% of total revenues of this Company. transaction volume. Accumulated Remittance
14.9% 45.7%
The Company also stably maintained the volume in 2017 valued at USD562.6 million, 3.6
9.6%
-22.6% activities of managing collaterals and increasing by 11.6% from 2016, contributing to 2.4
appraising assets with good revenue, increasing the Company’s profit. Profit before
contributing to increasing profit. In 2017, tax reached VND8.7 billion, increasing by VND6.3
Sacombank-SBA’s profit before tax amounted billion from 2016.
2013 2014 2015 2016 2017 to VND98.3 billion, increasing by 45.7% from 2013 2014 2015 2016 2017
2016.
Profit before tax of Sacombank-SBA in 2013 – 2017 period Profit before tax of Sacombank-SBR in 2013 – 2017 period

Profit before tax (VND billion) % growth Profit before tax (VND billion) % growth

79.5 Sacombank Leasing Company Ltd. Sacombank Jewelry Co., Ltd.

(Sacombank-SBL): (Sacombank-SBJ):
78.1
6.0% In spite of fierce competition in financial lease In 2017, Sacombank-SBJ focused on business in TOTAL REVENUES REACHED
4.6% 76.4
76 market, Sacombank-SBL has strengthened enterprise and associate channels. Accumulated
marketing and restructured portfolio with total revenues in 2017 reached VND90.5 billion,
73.7 many flexible solutions and reasonable prices. increasing by VND13 billion (up 16.8% from 2016),
-2.7%
-3.9% As a result, financial lease balance hit VND1,591 in which nearly 50% of total was come from

90.5
billion, 0.7% higher than that from early 2017. enterprise & associate channels and stores.
VND
-9.8% Risk management was always focused from Sacombank-SBJ recorded negative profit of billion
customer development; therefore, bad debts VND3.8 billion (due to high cost of goods sold
only accounted for 1.18% of total liabilities. and expenses for machinery and equipment).
Sacombank-SBL was recognized as the best However, the situation was much better than the up 16.8% from 2016
2013 2014 2015 2016 2017 entity in debt control among of financial lease previous years. The profit in the last few months
Profit before tax of Sacombank-SBL in 2013 – 2017 period industry. Profit before tax of this company of 2017 showed positive number.
reached VND76.4 billion.
Profit before tax (VND billion) % growth

48 49
 BUSINESS PERFORMANCE 2017, BUSINESS PLAN 2018 ANNUAL REPORT 2017

OPERATION OF SUBSIDIARIES & SUBSIDIARY BANKS (continued)

Sacombank Cambodia PLC:

In 2017, the favorable conditions of Cambodia’s markets
(with economic growth rate at 6.9%, deposit increase
149.1% by 20.4 % and credit increase by 23.4 %) have enabled
1,740 Sacombank Cambodia PLC to expand business and
1,865 1,845 restructure assets and sources of capital with more
1,715
safety. Total assets valued at USD171.2 million, slightly
down 0.6% from early 2017. Total deposits amounted
-8.7% to USD125.3 million, of which the deposits from
-5.7%
-1.0%
economic organizations and individuals reached
-54.3% USD90.3 million, up 33.3%. Loans to customers hit
688 USD119.4 million, up 3.7%, lending and retail lending
continued to increase (by 21.7%). The sources of
income were improved remarkably (up 9.5%). However,
due to supplementally recording a large number for
tax payment as remittance (USD690 thousand), profit
before tax reach USD1.74 million, decreasing by 5.7%
2013 2014 2015 2016 2017 from 2016, completing 102.8% of the plan. In addition,
Profit before tax of Sacombank Cambodia PLC in 2013 – 2017 period Sacombank Cambodia PLC has set up a new branch in
Siem Reap, increasing its total number of transaction
Profit before tax (USD thousand) % growth
points to 9 units.

Sacombank Laos:
Although Laos economy in 2017 has many difficulties
(GDP was weaker than expected because budget deficit
was not improved and public investment was limited)
however the competition is there, the business
operation of Sacombank Laos during the year recorded
a good outcome in both business scale and efficiency.
53.3% Total assets amounted to USD151.3 million, 14.9%
26.0% higher than from early 2017. Total deposits reached
USD104.3 million, 22.6% higher than 2016. In particular,
2,607 -13.1% deposits from economic organizations and individuals
-22.7%
reached USD33.1 million, up 12.2% (if including
2,014
the deposits from securities companies, insurance
1,751 -48.9% companies, deposit insurance fund, etc. according to
1,370
Vietnam’s regulations, this number would be USD69.5
million, up 20.7%). Loans to customers reached USD87.6
million, up 21.3% (up 32.5%). Total revenues increased
894
by 18.9%, in which interest income increased by
14.8% and income from credit fee increased by 36.3%.
During the year, Sacombank Laos continued to invest
in technology development (upgrading core banking
T24) and expanding network (operating new branch
2013 2014 2015 2016 2017 in Savannakhet and upgrading transaction office into
That Luang branch) but ensured business efficiency.
Profit before tax of Sacombank Laos in 2013 – 2017 period
Profit before tax reached USD1.37 million, up 53.3%
Profit before tax (USD thousand) % growth from the previous year, achieving 101.2% of the plan.
By the end of 2017, the network of Sacombank Laos
consists of 01 Head Office and 04 branches.

50 51
 BUSINESS PERFORMANCE 2017, BUSINESS PLAN 2018 ANNUAL REPORT 2017

DEPLOYING BASEL II AT SACOMBANK

After reviewing many relevant factors of local financial institutions,

the State Bank of Vietnam (SBV) has selected Sacombank as one of
the first ten financial institutions for pilot implementation of Basel
4 The establishment of Secretary Unit for Basel II project to give advices on the matter related to
Basel II, make plan, supervise and support the entities in the implementation progress.

II. This is both an honor and a challenge for Sacombank because

“there is no road of flowers leading to glory” (La Fontaine). Sacombank
has determined to successfully implement Basel II, not only for the
compliance purpose but, more importantly, to help the Bank operate
5 The strong support from BOD, BOS and BOM in the implementation progress of the project.
On 30 August 2017, BOD released a resolution approving to deploy 35 projects in line with
the timelines planned by Steering Committee and the proposals regarding human resources,
safely and sustainably on the basis of solid risk management also. expenses, and organizational structure. Right after that, Steering Committee, Secretary Unit,
Divisions and Department studied and deployed the project synchronously.
Since the beginning, Sacombank has implemented Basel II strictly
with the motto “working while studying, studying while working”.
Key activities include:
6 Steering Committee including experienced members has directed and instructed the divisions
to focus on the following key objectives:

1
• Completing database framework related to risk management.
Organizing seminars with the support from SBV, local and • Upgrading and building risk measurement models in main business activities.
foreign consultants; • Upgrading and completing framework and internal control system.

Steering Committee also made important decisions to shorten implementation time and

2 Together with the consultants, Sacombank makes

comprehensive assessment on the Company’s corporate
governance, supervision, database and information
reduce costs for the Bank, for instances:

• Upgrading human resources, prioritizing the persons having experience and quantitative
technology to measure how far the implementation of knowledge - the factor playing a key role in the projects’ success.
Basel II into Sacombank. The results showed the Bank’s • Consolidating the minor projects into a master project to create synchronization and
partly meet Basel II standards and pointed out the increase economic benefits.
defectives needed to be improved and more importantly, • Hiring consultant to deploy projects requiring intensive profession and high technology,
determined the timelines and improvement solutions. deploying some minor projects.
• Training and pushing communication to intensify knowledge and determination in
implementing Basel II.

3 New leadership from BOD, BOS and BOM in 2017 brought

the determination and standardization in governance
and management to a new level, starting with the
With the determination, the experience and the close instruction from Steering Committee,
Sacombank is synchronously deploying Basel II in scientific and effective manner to ensure:
establishment of Steering Committee for Basel II
implementation under the management of members Complying with the roadmap set by SBV as one of ten banks conducting pilot implementation
of BOD, BOS and BOM in charge of planning policies, of Basel II.
building strategies and developing Basel II project in
conformity with the policies, development objectives Enhancing capabilities of governance and risk management for Sacombank.
of Sacombank and the SBV’s regulations.
Meeting the expectations of partners, investors, shareholders and customers.

52 53
 BUSINESS PERFORMANCE 2017, BUSINESS PLAN 2018 ANNUAL REPORT 2017

REPORT ON SACOMBANK RESTRUCTURING PLAN DEVELOPMENT PLAN 2018

(According to the Separate Financial Statements)

GIVEN MANY DIFFICULTIES AND CHALLENGES IN OPERATIONS; HOWEVER, THANKS TO CLOSELY

FOLLOWING POST-MERGER RESTRUCTURING PLAN, MAKING EFFORTS TO DEPLOY, OPERATING
STABLY AND CONCENTRATING ON THE OUTSTANDING ISSUES, AFTER MORE THAN 7 MONTHS
SINCE SACOMBANK RESTRUCTURING PLAN WAS APPROVED, SACOMBANK HAS ACHIEVED
ENCOURAGING RESULTS IN RECOVERING AND HANDLING BAD DEBTS, ENHANCING CREDIT QUALITY,
ASSET QUALITY AND INCREASING PROFIT, MEETING THE CONTENTS OF THE PLAN, TO BE SPECIFIC:

• Completing the restructuring of operational debts according to market price, collecting/settling

apparatus toward centralized management, VND14,271 billion of bad debts, principal and interest
decentralized execution and apparatus simplification. of debts sold to VAMC, and receivables.
Building governance tool with new model, creating
• Making provision and allocating accrued interest
legal framework toward democracy, publicity and
exceeding the Restructure plan (equal to 135.1% of
transparency, creating an effective coordination
objectives);
mechanism between governance, execution and
supervision for the Bank’s activities as well as creating • Focusing on reviewing and rearranging network
a friendly working environment for employees; according to the plan approved by the SBV; upgrading
11 savings funds into transaction offices, moving,
• Maintaining and developing business operations, renaming and transferring management of 86 PERSPECTIVES ACTION MOTTO VIEWPOINT
operating the system safely and smoothly, focusing transaction points; launching and bringing 2 new
on improving productivity and efficiency, assigning branches into operation i.e. Siem Reap – Cambodia
specific KPIs to each employee in combination and Savannakhet – Laos; upgrading Thatluang Counter
with control mechanism. As the results: Total assets into a branch in Laos. In addition, to enhance
increased by 10.6% from 2016, fulfilling 97.9% of the governance and improve operational efficiency,
plan. Deposits increased by 11.4%, equal to 97.7% ensuring to speed up restructuring progress,
RESTRUCTURING
of the plan. Credit growth was ensured in the right in the direction of SAFETY PUBLICITY
Sacombank has reviewed and built Master plan
direction (up 12.6%). Income sources remained
its stability, in which interest income from credit
for network restructuring up to 2022 and towards CREATING A FIRM
LEAD
2025 which was approved by BOD in Resolution No. FOUNDATION FORWARD TRANSPARENCY
activities recovered (increasing by 32.3%), especially, 244/2017/NQ-HĐQT dated 22 November 2017. to promote business
gain from traditional services increased dramatically operations
(up 29.6%). Profit before tax exceeded the target, • Decreasing ownership of major shareholders in
reaching VND1,484 billion (equal to 359.1% of the compliance with the Law on Credit Institutions and
plan); Circular 36.
• Actively restructuring the portfolio of assets,
improving risk management capacity and controlling However, there are still some points that need to be
credit quality; increasing capital and controlling safety addressed to have timely solutions, contributing to
ratios within the limits set by the State Bank; progress of post-merger restructuring.
• Strengthening joint ventures and business affiliates
by officially signing 20-year exclusive insurance
agency contract with Dai-ichi Life Vietnam on 06
• Portfolio of bad debts and outstanding assets is
still high. It is necessary to carry out more drastic
measures to reduce bad debt ratio to below 3% and
17% 4% 18% 21%
DEPOSITS FROM ECONOMIC
September 2017; shorten bad debt recovery roadmap by a half of the TOTAL ASSETS OWNER’S EQUITY TOTAL DEPOSITS
ORGANIZATIONS AND INDIVIDUALS
road of implementing the Plan approved by the SBV;
• Strictly handling bad debts and outstanding assets,
positively reviewing and re-evaluating all foreclosed • Completely resolving lawful investments according to

13% 13% < 3% 19% 23%

assets, liquidating or quickly divesting to put the capital the Plan progress, ensuring publicity and transparency;
into profitable operation as soon as possible and at
• Continuing to seek strategic partners to increase
the same time, signing cooperation agreement with
chartered capital as planned to improve financial
VAMC on bad debt and outstanding asset settlement CREDIT LENDING RATE OF BAD DEBTS SERVICE REVENUES PROFIT BEFORE TAX
capacity;
in compliance with the law. As results, Sacombank
has recovered/settled VND19,665 billion of bad debts • Restructuring network to consolidate post-merger
and outstanding assets (including VND15,365 billion network, enhancing operational efficiency, creating
under the Plan), to be specific: liquidating VND2,786 profit and bringing best business results to shorten the
billion of collaterals, selling VND2,608 billion of completion time of Post-merger Restructuring Plan.

54 55
 BUSINESS PERFORMANCE 2017, BUSINESS PLAN 2018 ANNUAL REPORT 2017

KEY DUTIES IN 2018

Closely follow Post-merger Restructuring Plan,

strongly implementing restructuring options 1
7 Enhancing technology investment, focusing
on digital banking and high-tech products & services
Continuing to consolidate the organization, creating pioneering,
dynamic, flexibility and creativeness in business 2
8 Strengthening risk management and
operational supervision
Improving labor productivity, enhancing the quality of
human resources 3
9 Managing costs effectively, prioritizing to the costs
associated with efficiency gained
Increasingly growing operational scale quickly 4
10 Quickly restructuring network, promoting comprehensive
development at subsidiaries/subsidiary banks
Continuing to prevent and handle bad debts 5
11 Strengthening communication and promoting
external relations
Building different corporate culture with good impression 6
• Promoting technology in working environment, risk management, customer management, etc.;
1 Closely follow Post-merger Restructuring Plan, strongly implementing • Strengthening staff training, promoting E-learning, standardizing training model in terms of
restructuring options to achieve the planned targets; capability, outsourcing training for new hires;
• Stimulating employee motivation, improving performance management system, completing
compensation based on KPIs, enhancing the quality of leadership.

Continuing to consolidate the organization, creating pioneering, dynamic,

2 flexibility and creativeness in business 4 Increasingly growing operational scale quickly

• Continuing to increase scale of deposit and lending to maintain position; growing medium and
• Continuing to consolidate organizational structure and operation of Sacombank in a new long term deposits and ensuring reasonable interest, focusing on demand deposit to increase
model, promoting pioneering, dynamic and creativeness to be ready for development strategy efficiency; ensuring liquidity as a firm foundation for business operation;
in a new phase i.e. digital banking and payment technology strategy; • Rebuilding and building relationships with financial institutions, especially in Asia (China,
• Enhancing governance and administration focusing on transparency, democracy and Taiwan, Malaysia, etc.), expanding target financial institutions to increase capital limit, exploiting
compliance; Developing an advanced banking management model, step by step applying Tier 2 capital, creating favorable conditions for business development at home and abroad, etc.;
international standards (Basel II) to retail banking model; Completing process, regulations to • Continuing to grow credit on a safe and sustainable basis to generate stable core income,
hedge operational risk in transactions. prioritizing production lending and lending to low-risk industries; Specializing consuming loan
• Taking initiative in seizing market opportunities, running business in a flexible way, creating a and retail loans to specialized departments; Controlling medium and long-term loans, giving
system of products and services with utilities, creating a breakthrough in business. priority to the loans associated with service growth;
• Orienting and developing key products and services, suitable to the needs of customers and
3 Improving labor productivity, enhancing the quality of human resources the market trends, with regional characteristics and high competition. Strongly promoting and
creating breakthrough in scale and efficiency throughout the system. Building competitive
• Improving labor productivity, enhancing the quality of human resources programs to stimulate the spirit of completing/exceeding the plan of the entities.
• Reassessing human resources for appropriate rearrangement in order to restructure and
simplify operational apparatus; assigning specific KPIs to all employees in the whole system.

56 57
 BUSINESS PERFORMANCE 2017, BUSINESS PLAN 2018 ANNUAL REPORT 2017

KEY DUTIES IN 2018 (continued)

5 Continuing to prevent and handle bad debts 8 Strengthening risk management and operational supervision

• Closely following Post-merger Restructuring Plan, completing regulatory documents • Strengthening risk management and operational supervision, building alarm system for
related to debt and outstanding asset settlement and establishing a specialized operational risks of the Bank as well as making long-term strategy for all safety factors in
committee to push settlement of bad debts of the Bank. Making a detailed plan to line with the SBV’s regulations and meeting international standards; studying to apply
recover non-performing loans/bad debts, debts sold to VAMC and outstanding assets. new auditing standards (IFRS) in the disclosure of financial statements for fiscal year 2018;
• Increase awareness of handling existing non-performing loans in each entity; focusing on • Strengthening training, improving compliance with regulations/procedures at the entities;
controlling CIC debts and outstanding debts; preventing non-performing loans arisen, enhancing professional ethics; broadening delegation and authorization to increase
ensuring to keep rate of bad debts ≤ 3%; autonomy and flexibility, but being associated with specific responsibilities.
• Re-evaluating offsetting assets appropriately to speed up the settlement progress to
soon put capital into business operation.
9 Managing costs effectively, prioritizing to the costs associated with
efficiency gained
6 Building different corporate culture with good impression
• Focusing on profitability, reducing management costs, procurement costs, and
• Changing management viewpoint aiming at development of community culture, construction cost, creating conditions for making provision for risks, extracting welfare,
ensuring fairness throughout the system, changing the thinking towards transparency and accumulating Sacombank shares;
in all respects of business operations, management and governance; creating a friendly • Reviewing the use of assets owned by Sacombank, appropriately exploiting (leasing,
working environment for all employees. selling/disposing of unused assets, etc.) to increase financial resources;
• Reinforcing customer care in combination with appropriate reward/discipline; making • Improving the quality of bidding, ensuring publicity, transparency to minimize costs and
a specific customer care and marketing plan; shortening customer serving time and increase revenues.
supervising service quality, contributing to improve customer satisfaction; developing
high-class banking services, applying financial consultancy model for all customer
segments in real estate, insurance, currency, etc.; 10 Quickly restructuring network, promoting comprehensive development
at subsidiaries/subsidiary banks
7 Enhancing technology investment, focusing on digital banking and
• Quickly restructuring network, promoting network expansion in the North in order to
high-tech products & services
develop business and complete the Plan;
• Modernizing solutions - optimizing objectives, utilizing and exploiting the existing • Strongly restructuring subsidiaries and subsidiary banks, growing scale, increasing market
technology, promoting digital banking, becoming the pioneer in launching modern share, and ensuring transparency in operation and risk management.
products and services such as cards, electronic banking, electronic wallets, etc. in line
with mobile payment trend in card, electronic banking, electronic wallet, etc. Sacombank 11 Strengthening communication and promoting external relations
has just upgraded Internet banking and Mobile banking based on Omni channel, already
applied biometrics on online transactions; continued to develop payment via QR code; • Organizing communication activities towards the digital trend and prioritizing
and deployed of e-wallet Sacombank. communication with strategic orientation of publicity and transparency to reinforce the
• Customer Relationship Management (CRM), Loan Origination System (LOS), and process trust of shareholders, customers and partners.
digitization are components of the banking system that need to be completed. Since • Branding associated with high-tech products and services and organizing
2017, Sacombank has officially launched these projects. To help Sacombank manage its approaching channels professionally and diversely via modern media. Strengthening
customers to provide products and services in the trend of personalization of the needs internal communication, consolidating and promoting Sacombank’s culture, completing
in a timely manner. Sacombank’s brand identity.
• Strongly implementing external relations to enhance position, increase market share and
credit rating of Sacombank; actively implementing the State policies and participating in
the programs serving the development of economy and society.

58 59
New momentum
FROM STRATEGIC VISION
In 2017, a part from focusing on system stabilization,
Sacombank continued to promote business. Together with
the strategies already planned, Sacombank’s development
vision in future will be led by the experienced leadership.
This is also a new momentum for Sacombank to solidify its
position in the market.
 CORPORATE GOVERNANCE ANNUAL REPORT 2017

ACHIEVEMENT OF AGM RESOLUTIONS

AND SOME KEY ACTIVITIES IN 2017

TOTAL ASSETS

IN 2017, SACOMBANK’S BOD FOCUSED

ON INSTRUCTING BOM AND THE
WHOLE SYSTEM TO PROMOTE INTERNAL
STRENGTHS, TRANSFERRING FROM
QUANTITY DEVELOPMENT TO QUALITY
368,469 VND billion DEVELOPMENT AND MAKING EFFORT TO
reaching 95.8% of the plan COMPLETE ALMOST THE 2017 BUSINESS
TARGETS. THE PERFORMANCE OF THE AGM’S
TOTAL DEPOSITS KEY OBJECTIVES IN 2017 IS AS FOLLOWS:

Recording profit distribution for 2015 and

2016
Completing the record of profit distribution for fiscal
years (2015 and 2016) according to the AGM resolution.

338,432 VND billion

Implementing business plan for 2017 as
reaching 95% of the plan
assigned by AGM
As at 31 December 2017, total assets of Sacombank
TOTAL CREDIT BALANCE
valued at VND368,469 billion (reaching 95.8% of
the plan); total deposits grew to VND338,432 billion
(reaching 95% of the plan); total credit balance reached be specific: (i) fixed asset investment of VND288 billion Proceeding procedures to modify business
VND225,595 billion (completing 100.2% of the plan) and (80.9% of the plan); (ii) remained capital of VND13,206 registration certificate of Sacombank:
profit before tax hit VND1,492 billion (reaching 255% of billion (110.6% of the plan) was put into profitable In term of business nature, Sacombank is completing
the plan). Sacombank strictly complied with prudential business activities. internal regulations to revise documents and submit to

225,595
ratios required by the State Bank’s regulations. the SBV.
VND billion Selecting an auditing firm to audit the
Bank’s operations in fiscal year 2017: Taking necessary action to amend and
completing 100.2% of the plan Owner’s equity Ernst & Young Vietnam Limited. supplement Sacombank’s Charter: At present,
As at 31 December 2017, owner’s equity of Sacombank the Charter has been approved by the SBV according to
PROFIT BEFORE TAX was VND23,236 billion (reaching 103.1% of the plan). In Studying and developing an operational official announcement No.6006/NHNN-TTGSNH dated
which, chartered capital amounted to VND18,852 billion plan and related issues, implementing 31 July 2017.
(no change according to the plan); share premium and
treasury shares reached VND687 billion (no change necessary procedures to apply for the
permission of SBV and other authorities in Remuneration of BOD and BOS in 2017:
according to the plan); reserves for supplementing
In 2017, the remuneration of BOD and BOS under the
chartered capital valued at VND900 billion (reaching establishing affiliates and joint ventures AGM resolution was VND18 billion and the Bank paid
103.4% of the plan); other funds valued at VND1,885 for 2017 - 2020: BOD is reviewing on the feasibility VND16.9 billion.
1,492 VND billion
billion (reaching 119.1% of the plan); and retained
earnings hit VND2,286 billion (equivalent to 118.9% of
and building a roadmap in conformity with the
situation and actual capacity of Sacombank.
the plan). In 2017, the used owner’s equity recorded at
reaching 255% of the plan
VND13,494 billion (equivalent to 105.4% of the plan), to

62 63
 CORPORATE GOVERNANCE ANNUAL REPORT 2017

ASSESSMENT ON BOD’S PERFORMANCE ACTIVITIES OF BOD

In addition to implementing AGM resolutions, BOD has given instructions in the following
key duties:

From 01 January 2017 to 30 June 2017:

BOD held 106 monthly/quarterly and extraordinary meetings. Accordingly, BOD gave instructions to
•
C onsolidating the Bank’s operations after the merger, improving organizational
structure and standardizing the merged entities. Making a detailed plan to successfully
implement Restructuring Plan as approved by the SBV. Effectively dealing with the legacy
stabilize operations in its regulations, charters and resolutions/decisions relating to credit issuance,
issues, restructuring assets and liabilities to reduce receivables, increasing earning assets
debt settlement and other administrative activities.
by liquidating collaterals and gradually reducing accrued interests. Effectively monitoring
and preventing non-performing loans, strictly handling bad debts and structured
debts to quickly recover liability inflows, increase earning assets and improve the Bank’s
From 01 July 2017 to 31 December 2017: business efficiency.

D
New BOD has directed, led and co-operated with BOM during the implementation of the planned • eploying diversified solutions to enhance financial capabilities and risk management
targets, through 27 monthly/quarterly and extraordinary meetings hosted by Chairman. In particular, to comply with the SBV’s prudential ratios and internal requirements. Strengthening
BOD has demonstrated leadership experience in making the Bank’s important decisions, including: risk control and effectively deploying the early warning system to promptly detect, prevent
and apply remedies to mitigate the risks. Applying Basel II requirements as directed by the
SBV, raising the operational standards of Sacombank, approaching the modern international
banking practices.
1 Focusing on stabilizing operations in the model of restructuring the banking
system; •
C ompleting and implementing human resource policies in a consistent manner;
rearranging and allocating workforce appropriately, especially at the merged entities.
2 Continuing modern, retail banking services; Promoting the development and the implementation of KPIs.

3 Being strict in dealing with and handling bad debts;

•
C ontinuing to promote corporate governance toward the transparency, compliance
with law, professionalism, efficiency and sustainability in order to maximize benefits to
shareholders, employees and customers.

4 Continuing to promote business development in combination with effective cost

management;
•
Improving the quality of services and customer care, applying Standard Model Unit for
entire system. Enhancing competitiveness, brand awareness and unique corporate culture
of Sacombank via standardization and differentiation.
5 Continuing to consolidate and promote media communication and public
relations; •
P romoting business activities comprehensively, focusing on retail banking activities;
increasing fee-based income; improving sales quality, implementing synchronous
6 Enhancing risk management and financial capacity; solutions for revenue growth; improving efficiency of corporate banking; improving the
business performance of subsidiaries/subsidiary banks to gain profit for the Bank.

7 Rearranging the entire branch network; •

C ontinuing to expand market and develop business through promoting the advantages
in network, branding and positioning as one of the leaders in Vietnam banking sector;
studying, developing and deploying projects to establish affiliates and joint ventures,
8 Monitoring and supporting the operational orientation of subsidiaries/
subsidiary banks;
including Sacombank Finance Company, life insurance companies and non-life insurance
companies to maximize the Bank’s benefit.

9 Facilitating BOM to focus on implementing the key duties to speed up

Sacombank Restructuring Plan approved by the SBV, particularly, the
•
M anaging operating costs efficiently and effectively.

settlement of bad debts.

64
 CORPORATE GOVERNANCE ANNUAL REPORT 2017

BOD’S ASSESSMENT ON THE BANK’S PERFORMANCE OPERATIONAL STRUCTURE OF 13 COMMITTEES AND 12 COUNCILS

2017 was a challenging year of Sacombank when the Bank encountered internal issues. Given that situation,

1
Sacombank has focused on comprehensive restructuring, stable operational apparatus and implemented BUSINESS DEVELOPMENT COUNCIL
Post-merger Restructuring Plan under the strict supervision of SBV. In addition, 2017 was a meaningful year STRATEGY
for Sacombank when new BOD and BOS (2017 – 2021) were expected to help the Bank soon complete NETWORK DEVELOPMENT COUNCIL COMMITTEE
restructuring plan.

BOD has given a positive assessment on the Bank’s performance in 2017. The Bank has achieved and
CRISIS MANAGEMENT COUNCIL 2 EXTERNAL
RELATIONS
exceeded the targets assigned by the AGM and has contributed to the success of restructuring plan. ASSET-LIABILITY MANAGEMENT COMMITTEE
COUNCIL (ALCO COUNCIL)
COMMITTEE
OF CREDIT AND 3
HEAD OFFICE CREDIT COUNCIL FINANCIAL
INVESTMENT
BOD’S ASSESSMENT ON BOM’S PERFORMANCE 4 COMMITTEE OF
ANTI - CORRUPTION, COUNCIL OF ANTI-MONEY
CRIME AND MONEY
LAUNDERING LAUNDERING

BOD highly appreciated and acknowledged the efforts of BOM in the current challenging time. In spite of
RISK
MANAGEMENT
5
high employee turnover in 2017, BOM has completed and exceeded the planned targets. The BOD believes COUNCIL OF LOSS RISK HANDLING COMMITTEE
that, with the solidarity, responsibility and determination of BOM, under the direction of CEO, Sacombank
will reaffirm its strength and solidify position within a short time. 6 HUMAN
RESOURCE
COMPENSATION AND
BENEFIT COUNCIL
COMMITTEE COUNCIL OF HIGH-LEVEL

7
REWARD AND DISCIPLINE
BANKING
TECHNOLOGY
COMMITTEE
SUB-COMMITTEES UNDER BOD’S PERFORMANCE
8 COST
MANAGEMENT
COUNCIL OF ASSET AND
CONSTRUCTION ACCEPTANCE
COMMITTEE

Sub-committees held the highest responsible for advising BOD over the policies of business and risk
management of the Bank as well as assisting BOD to perform rights and obligations on the principle
STEERING
COMMITTEE FOR
IMPLEMENTING
9 COST MANAGEMENT COUNCIL

POST-MERGER
of decentralization and authorization so as to manage the operations comprehensively; ensuring the RESTRUCTURING
compliance and the implementation of guidelines, strategies and directions of AGM and BOD.
PLAN
10 COMMITTEE OF
PREVENTING &
HANDLING NON-
In 2017, BOD restructured and established its subordinate committees and councils, including 13 PERFORMING LOANS COUNCIL OF PREVENTING AND
AND DEPLOYING
11
HANDLING NON-PERFORMING LOANS
committees and 12 councils specializing in specific areas according to law. The subordinate committees and RESOLUTION 42
BANKING-
councils have worked actively and effectively during the past years, fulfilling their responsibility for advising INSURANCE
BOD in making decisions/policies to support BOM in business operation and risk management, helping COOPERATION
BOD perform its rights and duties on the principle of decentralization and authorization. The activities COMMITTEE
of subordinate committees and councils are based on specific regulations and are publicly disclosed at
Sacombank to ensure transparency. Besides, the subordinate committees and councils continued to review,
12 AUDIT
COMMITTEE
monitor, check and perfect the regulations and regulatory documents within their scope of work to ensure
the separation between the governance and supervision functions of BOD and the function of business
management of BOM.
STEERING
COMMITTEE FOR
13
BASEL II
IMPLEMENTATION

66 67
 CORPORATE GOVERNANCE ANNUAL REPORT 2017

LIST OF SUB-COMMITTEES UNDER BOD

STRATEGY COMMITTEE Network Development Council

Advising BOD on making Advising Strategy Committee

policy, building development Members of Committee on the arrangement and the Members of Committee
strategy and restructuring management of Sacombank’s
the Bank in each period in Mr. Duong Cong Minh Chairman network and subsidiaries/ Mr. Duong Cong Minh Chairman
conformity with the policy subsidiary bank according to
Mr. Kieu Huu Dung Vice Chairman Mr. Nguyen Xuan Vu Vice Chairman
and the development goal the demand of the Bank in
of Sacombank. Monitoring, Mr. Nguyen Mien Tuan Member each period; building plan to Ms. Nguyen Duc Thach Diem Member
supervising and assisting BOM develop network, etc.
in planning and developing Ms. Nguyen Duc Thach Diem Member Deputy CEO in charge of Finance Division; or
measures and implementation Deputy CEOs/Directors of relevant regions; or Member
Deputy CEO in charge of Finance Division Member
according to plan, etc. Chairmen of subsidiaries/subsidiary Banks
Planning Manager Secretary
Planning Manager Secretary

Business Development Council Crisis Management Council

Advising Strategy Committee Building regulations and plans

on planning and developing Members of Committee to prevent and response to Members of Committee
policy and business strategy crisis; preparing measures
for Sacombank; assessing the Mr. Kieu Huu Dung Chairman and action plans in case of Mr. Duong Cong Minh Chairman
implementation results of crisis; assessing situation,
Ms. Nguyen Duc Thach Diem Vice Chairman Mr. Kieu Huu Dung Vice Chairman
development strategy and determining degree and
business strategy; proposing instructing to handle crisis, etc. Ms. Nguyen Duc Thach Diem Member
Deputy CEOs in charge of relevant Corporate
changes and promoting to the Member
Banking/Personal Banking/Currency Divisions
implementation of the Bank’s Deputy CEOs in charge of relevant
Member
business strategy, building Personnel appointed by the Chairman divisions
strategy to develop digital bank Secretary
of Council Deputy CEOs/Directors in charge of
at Sacombank, etc. Member
relevant regions

Chief of BOD office Member

Manager of Risk Management

Secretary
Department

68 69
 CORPORATE GOVERNANCE ANNUAL REPORT 2017

LIST OF SUB-COMMITTEES UNDER BOD (continued)

Assets – Liabilities COMMITTEE OF CREDIT AND FINANCIAL INVESTMENT

Management Council (ALCO) Members of Committee
Voting members Advising BOD in releasing
Advising Strategic Ms. Nguyen Duc Thach Diem instructions and policies Members of Committee
Committee/BOD on - Chairman
related to credit issuance,
the issues related to the Deputy CEO in charge of Risk Management debt purchasing/selling, Mr. Nguyen Mien Tuan Chairman
Voting members
management of assets and Division financial investment and Ms. Nguyen Duc Thach Diem Vice Chairman
liabilities as assigned by granting limits for other
BOD and/or beyond ALCO’s Deputy CEO in charge of Currency Division Voting members credit institutions, foreign Member (Credit/debit
Deputy CEO in charge of Credit Division
competence to ensure currency exchange and purchasing records)
safety and effectiveness in Deputy CEOs in charge of Corporate valuable papers trading;
Voting members Deputy CEOs/Directors of Regions/Deputy
conformity with the law Banking Division providing measures to CEOs in charge of relevant Corporate Member (Relevant Credit/
and business development improve credit quality and Banking/Personal Banking/Subsidiaries/ debit purchasing records)
strategy of the Bank. Deputy CEO in charge of Personal Banking efficiency in the whole Subsidiary Banks
Voting members
Division system.
Member (Interbank limit
Deputy CEO in charge of Finance Division Voting members Deputy CEO in charge of Currency Division
approval records)

Manager of Capital Management Member (Financial

Non-voting members Deputy CEO in charge of Finance Division
Department investment records)
Secretary (Credit/debit
Accounting Manager Non-voting members Director of Credit Center
purchasing records)
Secretary (Interbank limit
Planning Manager Non-voting members Director of Financial Institution
approval records)

Manager of Risk Management Department Non-voting members Secretary (Financial

Head of Investment Department
investment records)
AML Specialist - Capital Management
Secretary
Department

AUDIT COMMITTEE Head Office Credit Council

Advising BOD on the

matters relating to financial Appraising and
management of Sacombank Members of Committee approving credit limits Members of Committee
and its subsidiaries (of which within the competencies
Mr. Tran Minh Triet Chairman authorized by BOD. Ms. Nguyen Duc Thach Diem Chairman
fully owned by Sacombank).
To be representative Ms. Le Thi Hoa Vice Chairman Deputy CEO in charge of Credit Division Vice Chairman
of Sacombank in the Mr. Nguyen Xuan Vu Member Deputy CEOs/Directors in charge of relevant
relation with Government Member
Head of Internal Audit Member cum Secretary regions
Inspectorate, Industry
Inspectorate and auditing Deputy CEOs in charge of Corporate Banking/
firms. Advising BOD on Member
Personal Banking/Subsidiaries/Subsidiary Banks
the matters relating to
implementation result of Director of Credit Center Member cum Secretary
Restructuring Plan within the
scope of competencies as
assigned by BOD, etc.

70 71
 CORPORATE GOVERNANCE ANNUAL REPORT 2017

LIST OF SUB-COMMITTEES UNDER BOD (continued)

COMMITTEE OF ANTI-CORRUPTION, CRIME AND MONEY LAUNDERING RISK MANAGEMENT COMMITTEE

Determining strategic Advising BOD in releasing risk

goals, building programs, Members of Committee management policy, processes Members of Committee
plans and solutions to and regulations under the
prevent corruption, crime Mr. Duong Cong Minh Chairman competencies relating to Mr. Pham Van Phong Chairman
and money laundering. Mr. Pham Van Phong Vice Chairman operational risk management Ms. Le Thi Hoa Vice Chairman
Inspecting and supervising of Sacombank; determining
on how to prevent crime Mr. Tran Minh Triet Vice Chairman risk appetite, risk limitation and Deputy CEO in charge of Risk Management
Member
and money laundering Deputy CEO in charge of Human Resource assisting BOD in supervising Division
Member
performed at Sacombank; Management Division the compliance with these
Head of Internal Audit Member
studying, proposing, Deputy CEO in charge of Finance Division Member risk limitations. Supervising
advising and report to BOD and accelerating the Chief of Internal Audit Member
in corruption treatment as Deputy CEO in charge of Operation Division Member implementation of roadmap Head of Legal Department Member
well as solutions to against Deputy CEO in charge of Debt Settlement and projects to enhance
corruption and crime Member governance competence of the Member cum
Division Manager of Risk Management Department
relating to Sacombank’s Bank, including Basel II project, Secretary
activities. Deputy CEO in charge of Risk Management etc.
Member
Division
Chairman of Trade Union Member
Head of Internal Audit Member
Chief of Internal Audit Secretary

Council of anti-money laundering Council of Loss Risk Handling

Building programs, plans Approving general report of

and solutions for anti-money Members of Committee entire system on the recovery Members of Committee
laundering. Considering and of the debts of which risk
evaluating the conformity Mr. Tran Minh Triet Chairman provision has been already Mr. Pham Van Phong Chairman
and efficiency of prevailing made, including the settlement Ms. Nguyen Duc Thach Diem Vice Chairman
regulations on preventing Deputy CEO cum Director of Operation Division Vice Chairman of collaterals and determining
and combating money the basis of approval. Deputy CEO in charge of Risk Management
Deputy CEO cum Director of Debt Settlement Member
laundering as well as Vice Chairman Deciding or approving debt Division
Division
advising, proposing and classification, off-balance sheet Deputy CEO in charge of Finance Division Member
consulting the relevant Head of Internal Audit Member commitments, provisions, using
authorities about changes. International Payment Center Director Member provision for risk management Deputy CEOs/Directors in charge of relevant
Member
in the whole system, etc. regions
Domestic Payment Center Director Member
Accounting Manager Member
Application Development Manager Member
Member cum
Head of Legal Department Member Manager of Risk Management Department
Secretary
Member cum
Chief of Internal Audit
Secretary

72 73
 CORPORATE GOVERNANCE ANNUAL REPORT 2017

LIST OF SUB-COMMITTEES UNDER BOD (continued)

Council of High-Level
Reward and Discipline
HUMAN RESOURCE COMMITTEE
Appointing and dismissing Reviewing and approving
the positions decentralized/ Members of Committee annual emulation results Members of Committee
authorized by BOD in each of the units, executives
period. Annually, Human Mr. Duong Cong Minh Chairman and individuals under the Mr. Kieu Huu Dung Chairman
Resource Committee is authority of BOD and other Ms. Nguyen Duc Thach Diem Vice Chairman
Mr. Kieu Huu Dung Vice Chairman
responsible for assessing and the cases if necessary. Holding
performance of Senior Executive meetings to penalize the Deputy CEO in charge of Human Resource
Ms. Nguyen Duc Thach Diem Member Member
Officers of Sacombank and Labor Law violations of Management Division
its subsidiaries and/or before Deputy CEO in charge of Human executives and individuals
Member Chief of BOD office Member
ending appointment term to Resource Management Division under the authority of
advise BOD on matters related to BOD and other cases when Head of Internal Audit Member
Human Resource Director Secretary
personnel management, etc. necessary at the Bank. Chairman of Trade Union Member
Human Resource Director Secretary

BANKING – INSURANCE
Compensation and benefit council COOPERATION COMMITTEE
Advising BOD on the criteria, Advising BOD on
salary, bonus and remuneration Members of Committee partnership strategy in Members of Committee
schemes for the Bank’s executives term of bancassurance
and subsidiaries/subsidiary Mr. Kieu Huu Dung Chairman business. Advising BOD Mr. Nguyen Mien Tuan Chairman
banks; proposing remuneration on the Cooperation upon Ms. Nguyen Duc Thach Diem Vice Chairman
Ms. Nguyen Duc Thach Diem Vice Chairman
policies for the Bank’s employees agreement between
and subsidiaries/subsidiary Deputy CEO in charge of Human Sacombank and Insurance Deputy CEO in charge of Finance Division Member
Member
banks. Resource Management Division Company. Deputy CEOs in charge of relevant Corporate
Member
Banking/Personal Banking Divisions
Human Resource Director Secretary
Director of Insurance Center Secretary

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 CORPORATE GOVERNANCE ANNUAL REPORT 2017

LIST OF SUB-COMMITTEES UNDER BOD (continued)

COST MANAGEMENT COMMITTEE Cost Management Council

Advising BOD over For and on behalf of the

matters related to cost Members of Committee investor - Sacombank Members of Committee
management. On behalf organize asset procurement
of BOD, monitoring the Mr. Duong Cong Minh Chairman and make decision on issues Ms. Nguyen Duc Thach Diem Chairman
implementation of guidelines, Mr. Nguyen Xuan Vu Vice Chairman related to construction as Deputy CEO cum Director of Finance Division Vice Chairman
policies and regulations assigned. Approving costs
Ms. Nguyen Duc Thach Diem Member Deputy CEO cum Director of Supporting
in cost management. related to investment, Member
Division
Approving expenses related Deputy CEO in charge of Finance Division Member procurement, and
to investment, procurement, construction within the Deputy CEOs/Directors of Divisions/Directors
Deputy CEO in charge of Supporting Division Member Member
construction or asset competencies and limits in charge of relevant regions
liquidation within the Accounting Manager Member approved by BOD in each Accounting Manager Member
competence and provided Member cum period; organizing the
Chief Administrative Officer liquidation of the Bank’s fixed Member cum
limit prescribed by BOD in Secretary Chief Administrative/ Construction Officer
assets. Secretary
each period.

Council of assets and EXTERNAL RELATIONS

construction acceptance COMMITTEE
Inspecting assets (including Advising BOD on making
leased IT equipment) and Members of Committee policies and planning external Members of Committee
construction works (quality, relations activities. Developing
quantity, architecture and Mr. Nguyen Xuan Vu Chairman contents and expanding Mr. Kieu Huu Dung Chairman
aesthetics of works, reviewing Deputy CEO in charge of Finance Division Vice Chairman relationships with the SBV, Ms. Nguyen Duc Thach Diem Vice Chairman
legal documents of property, financial institutions and
etc.) before the assets and Deputy CEO in charge of Supporting Division Vice Chairman strategic partners. Establishing Deputy CEO in charge of Supporting Division Member
construction works are put Deputy CEOs/Directors in charge of relevant the mechanisms of sharing Deputy CEOs in charge of relevant divisions Member
Member
into use in accordance with regions information, maintaining
Chief of BOD office Member
the applicable laws and the relationships between
Accounting Manager/ Deputy Manager Member
Sacombank’s regulations on Sacombank and the press Director of Communication and Marketing Secretary
asset procurement. Member cum agencies.
Chief Administrative/ Construction Officer
Secretary

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 CORPORATE GOVERNANCE ANNUAL REPORT 2017

LIST OF SUB-COMMITTEES UNDER BOD (continued)

COMMITTEE OF PREVENTING & BANKING TECHNOLOGY COMMITTEE

HANDLING NON-PERFORMING LOANS
AND DEPLOYING RESOLUTION 42

Directing the prevention and Advising BOD on making

settlement of non-performing Members of Committee policies and strategy for the Members of Committee
loans, promoting effective Bank’s information technology
solutions to handle lending Mr. Duong Cong Minh Chairman development. Reviewing and Mr. Nguyen Xuan Vu Chairman
activities and prevent Mr. Pham Van Phong Vice Chairman verifying the plans and Mr. Nguyen Mien Tuan Vice Chairman
non-performing loans. Advising projects of banking technology
BOD to implement debt frozen, Ms. Nguyen Duc Thach Diem Member modernization proposed by Ms. Nguyen Duc Thach Diem Member
buying and selling overdue Deputy CEO cum Risk Management Division BOM for approval in each Deputy CEO in charge of Information
Member Member
debts; debt to equity swaps and Director period and, at the same time, Technology Division
other methods. Deputy CEO cum Director of Debt Settlement monitoring, supervising and
Member supporting BOM in the Deputy CEO in charge of Supporting Division Member
Division
development and the Deputy Director of Information Technology Secretary
Deputy CEO cum Director of Credit Division Member implementation of Sacombank
Head of Internal Audit Member modernization projects until
the completion.
Head of Legal Department Member
Manager of Risk Management Department Member
Director of Debt Settlement Center/Head of Member cum
Specialized Debt Management (for the records Secretary
in charge by Specialized Debt Department)

STEERING COMMITTEE FOR

Council of preventing and
handling non-performing loans BASEL II IMPLEMENTATION

Supervising and assisting Planning policies, building

BOM to prevent and handle Members of Committee strategies and developing Members of Committee
non-performing loans Basel II project in each stage
and advising Committee Ms. Nguyen Duc Thach Diem Chairman in conformity with the policy Ms. Le Thi Hoa Chairman
of preventing & handling Deputy CEO cum Director of Debt Settlement and development objective of Mr. Nguyen Mien Tuan Vice Chairman
non-performing loans and Vice Chairman
Division Sacombank and the regulations
deploying Resolution 42 and of the State Bank of Vietnam. Mr. Nguyen Xuan Vu Vice Chairman
Deputy CEO cum Director of Credit Division Member
BOD on solutions to efficiently Approving and directing the Mr. Ha Ton Trung Hanh Member
handle lending activities and Deputy CEO cum Risk Management Division implementation of action
Member Deputy CEO in charge of Risk Management Member
prevent non-performing loans. Director
plans in to meet the expected
Approving solutions to settle Director of Credit Center Member deadlines. Relevant Deputy CEOs (at Head Office) Member
overdue debts within the
Manager of Risk Management Department Member Head of Internal Audit Member
functions and tasks assigned
by BOD, etc. Director of Debt Settlement Center/Head of Deputy Chief of BOD Office Member
Specialized Debt Management (for the records Member Member cum
in charge by Specialized Debt Department) Manager of Risk Management Department
Secretary
Head of Investment Department (for the
Member
records of which collaterals are stocks)
Head/Deputy Head of Legal and Compliance
Secretary
Department - Debt Settlement Center

78 79
 CORPORATE GOVERNANCE

LIST OF SUB-COMMITTEES UNDER BOD (continued)

STEERING COMMITTEE FOR IMPLEMENTING

POST-MERGER RESTRUCTURING PLAN

Reviewing and assessing overall

operations of the Bank and Members of Committee
outstanding issues needed to be
solved; proposing feasible and Mr. Duong Cong Minh Chairman
appropriate measures to ensure
safe and efficient operation in Mr. Kieu Huu Dung Vice Chairman
line with prudential ratios and
local accounting - auditing Mr. Pham Van Phong Member
standards. Directing, deploying,
implementing and assigning Mr. Nguyen Mien Tuan Member
personnel and related units
to develop detailed solutions Ms. Le Thi Hoa Member
and appropriate roadmap to
Mr. Tran Minh Triet Member
achieving the objectives and
solutions as set out in the Plan. Ms. Nguyen Duc Thach Diem Deputy Head

Deputy CEO in charge of Finance Division Member

Deputy CEO in charge of Credit Division Member

Deputy CEO in charge of Debt Settlement

Member
Division

Chief of BOD office Member

Planning Manager Secretary

80
 CORPORATE GOVERNANCE ANNUAL REPORT 2017

BOD’S STRATEGIC ORIENTATION FOR SACOMBANK’S OPERATIONS

IN 2018 AND THE NEXT YEARS

1
Executive principles: The Bank’s management and execution after the merger are
based on the following principles: (i) Ensuring transparency and professional in management;
(ii) Absolutely complying with the law; (iii) Having close support and supervision of the SBV; (iv)
Respecting the autonomy of the enterprises, rights and obligations of related parties to create

6
favorable conditions for the Bank to operate effectively and thoroughly tackle problems.

SUBSIDIARIES/
SUBSIDIARY BANKS
2 Management - Execution: Developing an operational model in line with international
standards as well as orientation plan of unifying organizational structure, focusing on
management, decentralization in execution, especially, simplicity in organizational structure

5 1
and ensuring 03 lines: Business - Support - Supervision, speeding up restructuring progress
according to modern management framework.

TECHNOLOGY N EXECUTIVE

3
PRINCIPLES Finance: Restructuring assets and liabilities in safe, effective and sustainable manner,
cutting receivables and increase earning assets by speeding up progress of collateral
liquidation and gradually reducing the accrued interest. Continuing to enhance financial
E transparency and strictly handling the legacy issues. Make a balance between business
W
efficiency and toxic asset liquidation to ensure both interests of shareholders and
compliance with financial standards.

4 2
4
S
Market: Relocating transaction points to enhance competitiveness of the large franchise
MARKET MANAGEMENT network, prioritizing the quality, the operational scale and the efficiency of each transaction
EXECUTION point; creating sustainable development of retail banking market, focusing on mass retail
customers, increasing retail funds diversified loans; expanding modern transaction channels
(ATM/POS/Kiosk banking/Electronic banking).
FINANCE

3
5
Technology: Promoting to diversify products and services with multiple functionalities,
enhancing productivity, taking advantages of Core banking system, Data warehouse
and Management Information System (MIS) to support the implementation of business
strategies, enhancing operational efficiency and risk control capabilities in the whole
organization; rapidly developing modern financial products and services such as e-banking
and internet banking on the basis of advanced technologies to increase the Bank’s revenue.

TO IMPLEMENT POST-MERGER RESTRUCTURING PLAN SUCCESSFULLY, THE DIRECTIONS,

GOALS AND DUTIES IN THE PERIOD 2017 – 2021 ARE BECOMING THE REGIONAL LEADER

6
IN MODERN RETAIL BANKING, DETERMINING SUSTAINABLE GROWTH AS THE KEY Subsidiaries/subsidiary banks: Continuing to restructure operations in the
ORIENTATION, CONSOLIDATING WORKFORCE, REALLOCATING TRANSACTION POINTS, direction of specialty, cross-sales enhancement among the business units in the Bank, and
RESOLVING POST-MERGER LEGACY ISSUES, AND STRENGTHENING OPERATIONAL MODEL. putting safety and efficiency to a higher level.
TO BE SPECIFIC:

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 CORPORATE GOVERNANCE ANNUAL REPORT 2017

ACTIVITIES OF BOS

93 BRANCHES

INTERNAL AUDIT CONDUCTED

PERIODIC AND EXTRAORDINARY
AUDIT AT

370 TRANSACTION
OFFICES
4 SUBSIDIARIES

6 DEPARTMENTS
The periodic meeting in the 1st quarter of 2018

remote supervision according to the supervision criteria approved by BOS. Remote supervision
IN 2017, BOS HELD 10 MEETINGS TO EVALUATE AND DIRECT INTERNAL AUDIT, ASSESS AND
criteria is regularly improved and supplemented to widen the scope of supervision.
REVIEW INTERNAL AUDIT RESULTS; APPROVING AND ISSUING REGULATORY DOCUMENTS ON
SUPERVISION WORK, INTERNAL AUDIT, AND APPROVING THE INTERNAL AUDIT PLAN IN 2018.
As for training and improvement of regulatory documents: In 2017, BOS approved training courses
to improve professional skills for internal auditors. In order to consolidate the system of internal
control and audit documents, BOS instructed Internal Audit to review, amend and supplement the
Representative of BOS attended in the meetings of BOD and Sub-committees under BOD to learn of current documents. Accordingly, Sacombank has issued new regulations on the organization and
situation and had recommendations to improve efficiency and safety for the Bank. Supervising the operation of BOS and Internal Audit as well as Internal Audit Policy.
implementation of Resolution No. 01/2017/NQ-ĐHĐCĐ dated 30 June 2017 of AGM in fiscal year 2015;
2016 and Resolution No. 02/2017/NQ-ĐHĐCĐ dated 28 November 2017 of AGM.
Evaluation on the Bank’s operations
In addition, BOS supervised the Bank’s activities heading in right direction of Post-merger Restructuring Based on the supervision results in 2017, BOS evaluated the Bank’s operations according to the
Plan approved by the SBV and closely coordinated with BOD and BOM to carry out the duties to achieve following activities:
the supervisory objectives.
Activities of BOD
Besides, BOS also monitored, instructed Internal Audit to review and assess compliance and performance In general, in 2017, BOD and BOM have directed and executed the Bank’s operations in accordance
of entities according to the approval plan. In 2017, Internal Audit conducted periodic and extraordinary with the AGM approved business plan for 2017, the law and Sacombank’s Charter on management
audit at 93 branches and 370 transaction offices, 6 departments and 4 ad hoc tasks at Head Office, 4 and execution, strictly following the approved restructuring plan.
subsidiaries.
At the same time, the bad debt settlement solutions have been implemented and a part of funding
Almost after each term of auditing, internal control system held a meeting to approve the report. inflows have returned, improving the credit, assets quality and increasing profits for the Bank as the
On the basis of discussion between the audit team and the audited entity, BOS is well aware of basis for shortening the completion time of Post-Merger Restructuring Plan.
business performance and risk control of the audited units to guide the corrective action according
to recommendations of the auditor. At the same time, BOS fulfiled its role and responsibility in
self-inspection. In addition to internal audit carried out directly at each entity, Internal Audit also conducts

84 85
 CORPORATE GOVERNANCE ANNUAL REPORT 2017

ACTIVITIES OF BOS (continued)

BOD has completed implication of new corporate governance framework for upcoming development
stage. Accordingly, BOD navigated together with BOS and BOM constructing a legal framework for
banking management on the understanding of democracy, openness and transparent, creating
smooth and effective coordination mechanisms among management - execution - supervision to
ensure promote the highest efficiency of the Bank’s operation.

In 2017, BOD held regular meetings with BOS and CEO to evaluate performance and discuss the
next action plan. Accordingly, BOD has promoted its managerial role and has timely supported and
directed BOM in execution work as well as closely combining with BOS in inspecting and supervising
the operations at the Bank and its subsidiaries/subsidiary banks.

Activities of BOM

Apart from restructuring the post-merger Bank, BOM has made great efforts in all business operations,
strictly implementing the instructions and orientations of BOD, developing stably and creating
foundation for further development. BOM has implemented key programs/projects to improve the
quality of banking operations.

BOM has closely coordinated with BOS in inspecting and supervising the activities in the whole
organization, sufficiently providing information and relevant data so that BOS can carry out their
duties. BOM has been deploying effectively the appointment of mobile branch managers and mobile
transaction office managers. Thanks to that, BOM verified and assessed the branch-level operations
and execution ability of the Branch Directors.
Direction of BOS in 2018
With those achievements, in 2017, Sacombank gained positive results in business activities and
handling bad debts as a basis for further development in the next years. Given the performance of supervisory and inspection in 2018, the BOS shall:

Issues to consider in management and administration • Implementing functions and duties of BOS according to the regulations of SBV and
Sacombank.
Implementing the Post-merger Restructuring Plan approved by SBV is one of the key tasks of • Focusing on reviewing and assessing to pick potential risks out in the Bank’s activities
Sacombank in the coming years. Therefore, BOD and BOM should pay attention to the economic to help BOD and BOM to mitigate them;
conditions as well as the potential risk-related issues to make plan and take measures to speed up debt • Continuing to supervise banking activities under the approved Post-merger
recovery and improve asset quality and liability efficiency, ensuring safety for the Bank’s operations Restructuring Plan and Resolutions of the AGM;
and following the roadmap of Post-merger Restructuring Plan. • Continuing to promote and improve audit efficiency and remote supervision through
management, supervision, training and use of information technology into remote
In addition, it is necessary to intensify internal control system, ensuring to comply with the regulations, audit and supervision;
directions and instructions of the SBV and Sacombank’s BOD; It also complies with prudential • Strengthening coordination with 02 management - execution bodies to achieve the
requirements, restructuring loans and classifying loans, making provision, controlling non-performing planned supervisory objectives.
loans, enhancing credit quality, growing credit portfolio effectively; controlling and ensuring liquidity
conditions in daily activities; ensuring safety and quality of ATM machines.

86 87
 CORPORATE GOVERNANCE ANNUAL REPORT 2017

CONTENTS RELATED TO BOD, BOS AND BOM INFORMATION FOR SHAREHOLDERS

Changes in members of BOD, BOS and BOM in 2017 Number of STB stocks

On 30 June 2017, Sacombank successfully held the Annual General Meeting of Shareholders Charter capital
for fiscal year of 2015 and 2016 and elected BOD and BOS for the term 2017-2021. At present, Unit: VND billion
Sacombank’s BOD consists of 06 members, including one independent member. Structure of
19,000
BOD includes 01 Chairman, 02 Vice Chairmen and 03 Members, in which Mr. Duong Cong Minh
holds the position of Chairman. 18,000

The AGM also elected four members of BOS, in which Mr. Tran Minh Triet is the Chief Supervisor. 17,000

16,000
For BOM, from 03 July 2017, Ms. Nguyen Duc Thach Diem was appointed CEO of Sacombank.
At present, BOM has 18 members including 01 CEO, 17 Deputy CEOs of operations and regions. 15,000

14,000

Shareholder structure - Changes in Ownership 13,000

12,000
Data as at 31 December 2017
11,000
Share ownership/Charter capital
Number of
Shareholder structure 10,000
shareholders 0.52%
Individual shareholders 8.84%
62,840
(domestic) 2012 2013 2014 2015 2016 2017
Organizational shareholders 21.24%
219
(domestic) 69.4%
Shareholder capital
Individual shareholders Unit: VND billion
730
(foreign) 1.9

1.8
Organizational shareholders
75
(foreign) Individual shareholders (domestic)
1.7
Organizational shareholders (domestic)
Total 63,864 Individual shareholders (foreign) 1.6
Organizational shareholders (foreign)
1.5

Major shareholders (ownership > 5% of charter capital) 1.4

1.3
VIETNAM EXPORT
AND IMPORT 1.2
COMMERCIAL JOINT Changes in shareholders’ capital:
STOCK BANK (EXIMBANK) 1.1
• Change of shareholder capital: No
RATE OF
OWNERSHIP 6.84% • Treasury share transaction: No
• Other securities: No
1.0

2012 2013 2014 2015 2016 2017

Treasury shares: 81,562,287 treasury shares,
making up 4.33% of charter capital. In which, total number of voting shares is 1,803,653,429, equivalent to 95.67% of total equity (excluding 81,562,287 treasury shares).

88 89
 CORPORATE GOVERNANCE ANNUAL REPORT 2017

INFORMATION FOR SHAREHOLDERS (continued) Shareholders who are members of BOD, BOS, BOM & Chief Accountant as at 31/12/2017

Common
Profit distribution in 2017 No. Name Current positions at the Bank share Note
ownership (%)
BOARD OF DIRECTORS
No. Items Rate Description Amount
1 DUONG CONG MINH Chairman of BOD 3.31
2 KIEU HUU DUNG Standing Vice Chairman of BOD 0.01
1 Profit before tax 1,491,804
3 PHAM VAN PHONG Vice Chairman of BOD 0.001
4 NGUYEN MIEN TUAN Member of BOD 0.007
2 Corporate income tax 2017 310,244
5 NGUYEN XUAN VU Member of BOD 0.00 833 shares

- Current corporate income tax 20% 278,137 6 LE THI HOA Independent member of BOD 0.00 1 share
BOARD OF SUPERVISORS
- Deferred corporate income tax 32,107 7 TRAN MINH TRIET Chief Supervisor 0
8 LE VAN TONG BOS Member 0.056
A Retained earnings (1) - (2) 1,181,560 9 NGUYEN THI THANH MAI BOS Member 0.014

Reserve fund for charter capital 10 HA TON TRUNG HANH BOS Member 0
B 5% ( A ) * Rate 59,078
supplement BOARD OF MANAGEMENT

C Financial reserve fund 10% (A - B) * Rate 112,248 11 NGUYEN DUC THACH DIEM Chief Executive Officer 0.004
12 PHAN DINH TUE Deputy CEO 0.008
Profit after tax and extraction 13 NGUYEN MINH TAM Deputy CEO 0.001
D (A-B-C) 1,010,234
for mandatory funds
14 QUACH THANH NGOC THUY Deputy CEO 0.00001
Business investment and 15 DAO NGUYEN VU Deputy CEO 0.003
E 0% -
development fund
16 LE VAN RON Deputy CEO 0
F Bonus and welfare funds 202,046 17 HA QUYNH ANH Deputy CEO 0.0003
18 BUI VAN DUNG Deputy CEO 0.007
F1 Bonus fund 10% (D) * Rate 101,023 19 NGUYEN BA TRI Deputy CEO 0.000 7 shares
20 HA VAN TRUNG Deputy CEO 0.014
F2 Welfare fund 10% (D) * Rate 101,023
21 VO ANH NHUE Deputy CEO 0.000 3 shares
Bonus for exceeding annual 22 HO DOAN CUONG Deputy CEO 0.0004
G business targets in line with 20% 181,361
23 PHAN QUOC HUYNH Deputy CEO 0
the AGM resolution.
24 NGUYEN NGOC QUE CHI Deputy CEO 0
Retained profit after tax
H (A) - (B) - (C) - (F) - (G) 626,827 25 NGUYEN THI LE AN Deputy CEO 0.001
of 2017
26 HOANG THANH HAI Deputy CEO 0.004
Retained profit after tax of the
I 1,030,562 27 LE DUC THINH Deputy CEO 0
previous year
28 TRINH VAN TY Deputy CEO 0
Accumulated retained profit
J ( H ) + (I) 1,657,389 29 HUYNH THANH GIANG Chief Accountant 0.003
after tax
Information on STB stock transactions of the members of BOD, BOS, BOM and other persons of interest as at 31st December 2017 included: 4 buying orders, nil selling order.

90 91
 New step
FROM THE STRONG BELIEF
Being one of the top commercial joint stock banks in Vietnam
having the largest franchise network with good retail banking
products and solid risk management system, Sacombank will be
able to stabilize human resources, strengthening restructuring
process to create new steps for the coming development stages
bringing prosperity to all stakeholders.
 CORPORATE RESPONSIBILITY REPORT 2017 ANNUAL REPORT 2017

CORPORATE RESPONSIBILITY REPORT 2017

GRI STANDARDS SUSTAINABILITY

PREFACE REPORTING STANDARDS

The term “Sustainable Development” was definited in Brundtland In 1987, the World Commission on Environment and Development set
Commission by United Nations since 1987 and then, in 2012 the United out expectations for sustainable development and described sustainable
Nations Conference on Sustainable Development RIO+20 decided to development is “the development that meets the needs of the present
establish the Intergovernmental High-Level Political Forum on Sustainable without compromising the ability of future generations to meet their own
Development. needs”.

Up to now, sustainable development has become more and more popular Since 2000, GRI sustainability reporting framework have been applied by
in the global business community as well as being integrated into operation thousands of organizations in the world to make report on impact of their
and management of many large international organizations such as the business to the economy, environment and society.
World Bank, International Monetary Fund, World Trade Organization, etc.
In October 2016, GRI disclosed the first global sustainability reporting
In Vietnam, sustainable development has become a key guiding principle standards - GRI Standards which are designed in compatibility with the global
of the Government with a number of policies which have been released standards for disclosing information about sustainable development and,
such as Directive No.36/CT-TW dated 25 June 1998 of the Political accordingly, facilitating the transparency of economic, environmental and
Bureau on enhancing environmental protection in the period of national social impacts. Applying global standards is also to unify the communication
industrialization and modernization, Strategic Orientation for Sustainable way of businesses. Thanks to that, stakeholders will have an objective
Development in (Agenda 21), Vietnam Sustainable Development Strategy overview on the impacts.
for 2011 – 2020, etc. Accordingly, Sustainable Development is getting more
and more support from the business community in Vietnam.

In 2017, with the inner strength of a leading bank in Vietnam, Sacombank PREPARED IN ACCORDANCE WITH

THE GRI STANDARDS

continued to orient business development in association with sustainable
development. Accordingly, the Bank not only create stability in its own
banking operations but also joining hands with the State and local
governments in contributing to the sustainable development of the SUSTAINABILITY
society. REPORTING GUIDELINES
BY GLOBAL REPORTING INITIATIVE

94 95
 CORPORATE RESPONSIBILITY REPORT 2017 ANNUAL REPORT 2017

17 Corporate to make
the goals come true
1 Poverty deletion
16 Peace, equality
and strong legality
2 Hunger deletion
ASSOCIATE THE WORLD’S
SUSTAINABLE DEVELOPMENT
GOALS WITH SACOMBANK’S 3 Healthy life
ACTIVITIES AND 15
GRI STANDARDS Soil resource
Based on the contents described in 17
sustainable development goals of
United Nations which were approved by
the leadership of 154 member countries
(including Vietnam), Sacombank has
analyzed and selected the sustainable 14 4 Educational COMPONENTS OF GRI STANDARDS
development goals which are suitable Water resource
to the sustainable development
quality
3 basic standards applicable to all enterprises
strategies for 2017 - 2021 period and 33 standards in specific topics
the Bank’s activities in 2017 according about economy, environment and society.
to GRI Standards as follows:

GENERAL
Economy STANDARDS
- GRI 201: Economic performance 13 Responding
actions to climate 5 Gender equality
- GRI 202: Market presence
changes
- GRI 203: Indirect economic impacts

- GRI 205: Anti - corruption

SPECIFIC
Environment STANDARDS
- GRI 302: Energy 12 Responsible
- GRI 307: Environmental consuming and 6 Clean water Corporate Responsibility Report 2017 of Sacombank
compliance producing and sanitation is made based on the standards in three topics about
economy, environment and society.

Society
- GRI 401: Employment
- GRI 403: Occupational health 11 Sustainable
and safety urban and community
- GRI 404: Training and education
7 Clean and
- GRI 413: Local community
- GRI 405: Diversity and equal
sustainable energy
opportunity
10 Inequality
reduction
8 Stable employment
9 Industry, renovation and economic growth
and infrastructure

96 97
 CORPORATE RESPONSIBILITY REPORT 2017 ANNUAL REPORT 2017

CEO’S MESSAGE
GENERAL INFORMATION ON SUSTAINABLE
DEVELOPMENT
Overview
This report is considered an overall picture of Sacombank’s sustainable development
As one of the leading banks in Vietnam, Sacombank
practices under GRI Sustainability Reporting Standards. The sustainable development
raised awareness of its role as a pioneer in
contents are shared to stakeholders faithfully and objectively for their accurate
finance - banking sector and its contribution to
recognition on major issues. These issues will be analyzed and assessed by Sacombank
environmental protection and social development.
in term of its operation and development strategy. The key issues will be identified to
Therefore, apart from planning effective business
further review, improved and presented in Corporate Responsibility Report 2017.
strategy for each period, Sacombank always pays
attention to integrating economic objectives with
Scope of corporate responsibility report
environmental and social objectives in order to
The report reflects performance indicators of Sacombank and its subsidiaries/subsidiary
harmonize all stakeholder interests. Sustainable
banks.
development is always a key goal in Sacombank’s
business development strategy.
Period of reporting
From 1 January 2017 to 31 December 2017
Accordingly, Sacombank determines 3 key factors
i.e. economic growth, environmental protection
and social responsibilities. In which, economic
growth plays the most important role as its
prerequisite for the remained factors.

To implement those objectives, Sacombank

brings an opened, fair and professional working
environment, etc. to maximize capabilities of each
employee as well as building a good corporate In 2018, Sacombank pursues sustainable
culture. development strategy. We always keep in mind that
the companionship for benefits of shareholders,
It can be said that, Sacombank is making every investors, customers, partners, employees and
effort on each step of both business strategy and community are the motivation for Sacombank’s
human resource strategy. The Bank increasingly sustainable development. Therefore, Sacombank
consolidates operational structure, organizational increasingly expands operation nationwide to
structure and training scheme to build a highly provide financial solution to every economic sector,
professional and dedicated team with both offering sources of capital for local economic
qualification and ethic, who will contribute to development and strictly complying all principles
build up a professional and effective management and standards of sustainable development.
- governance system, step by step improve Sacombank also makes every effort to promote
brand value of Sacombank in Vietnam’s financial its role of a pioneer and make its dream of a
market, bringing added values to the enterprises, “Modern - Normative - Sustainable” bank come true.
organizations, shareholders and partners as well as
making contributions to the society.

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 CORPORATE RESPONSIBILITY REPORT 2017 ANNUAL REPORT 2017

OPPORTUNITIES AND CHALLENGES FOR SACOMBANK

OPPORTUNITIES CHALLENGES

Increasing competition with foreign banks.

Especially, the foreign banks merging with
local banks will earn their competitive
INTENSIVE advantages thanks to their high quality
COMPETITION products and services, professional
experience, good governance capacity
Approaching modern Strong development Developing products and global network but having local
products and services, in the need of financial and services integrated knowledge;
learning experience, management and with digital technology
receiving technologies, consulting services in a young population
applying governance (included payment); market;
skills, etc. in the world;

The demand and requirement of

THE DEMAND customers is getting higher and higher.
AND REQUIREMENT Thus, the Bank has to continuously improve
OF CUSTOMERS IS products and services, enhancing service
GETTING HIGHER quality, simplifying process/procedure and
AND HIGHER heading to quality in business.

Strong development of small and Diversifying retail banking products

medium enterprises (SMEs) and and services in the trend of Industry
the trend of rural finance and 4.0 thanks to available technologies
micro finance is an opportunity for of digital banking.
Sacombank to continue to grasp
market share thanks to its experience
and long-term relationships in this
market segment and this field.

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 CORPORATE RESPONSIBILITY REPORT 2017 ANNUAL REPORT 2017

PROFESSIONAL ETHICS

2 TO COLLEAGUES 4 TO SOCIETY

I COLLABORATE I HAVE
• Require: solidarity,
SENSE OF
5 TO SACOMBANK
1
collaboration, support, RESPONSIBILITY
fair treatment, etc.
• Avoid: interest conflict,
TO THE LAW corruption, self-interest,
Responsibility to
environment I HAVE
etc. and society.
SENSE OF
I COMPLY WITH TRANSPARENCY
Comply with the laws
and Sacombank’s
regulations.
3
TO CUSTOMERS
Reporting, transparency
and confidentiality in
information.

I AM
DEDICATED
Responsibility to
customers.

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 CORPORATE RESPONSIBILITY REPORT 2017 ANNUAL REPORT 2017

SUSTAINABLE DEVELOPMENT MANAGEMENT

1 Management methods

Aiming to build a sustainable management system in compliance with Vietnamese law and
apply international practices on corporate governance, Sacombank has systematized its
3 Risk management and Internal audit orient to sustainable development

In 2017, Risk management and Internal audit continued to play the roles of Second Line of Defense and Third
Line of Defense, respectively, helping the Bank ensure efficiency and strictly control business processes.
corporate governance principles and the reality to present in its Corporate Governance
Handbook - this is a guide to the Sacombank’s Heads for their creative and flexible
application in governance.

2
• Determining, evaluating, reporting and
monitoring arisen risks in business operations
Environmental and social impacts on Sacombank
and others;

Making independent assessment and

controlling efficiency of Business line
With a network of hundreds of branches and transaction offices nationwide and customers • Self-assessing risk and controlling effectiveness.
operating many sectors, the risks from environment and society have direct impacts on
Sacombank’s business operations.
BUSINESS LINE
In response to climate change and global warming - one of the reasons for natural disasters • Setting up risk appetite/lending policy;
and flooding during the last time, Sacombank has paid attention to minimizing the credit • Developing credit and lending process/guidelines.
for the sectors with environmental and social risks. At the same time, in order to achieve
the objectives of environmental and social management risks, Sacombank has continued to • Efforts to deploy Basel II
implement and strengthen environmental and social management system (ESMS) in credit • Establishing Steering Committee for project
issuance with effective management model. implementation;
• Establishing project management team;
• Successfully selecting partner to implement
BOARD OF DIRECTORS Loan Origination System (LOS) project;
Building up the long-term sustainable development vision for Sacombank, defining the • Bid opening for key projects in 2018.
risk appetite for ESMS, approving the environmental and social policy
• Monitoring internal control and compliance
RISK MANAGEMENT LINE programs;
BOARD OF MANAGEMENT
• Strengthening environmental and social
Approving the process of assessing the environmental and social impacts in the Bank
management system (ESMS) in credit issuance.

ESMS Group The Legal Compliance

• Assessing the 1st line of defense, the 2nd line of
Drafting and supervising the implementation of environmental and Supplementing commitments of
social policies and process; giving opinion on transactions with customers on environment and defense and the possible risks in independent
medium/high risk of environment and society; making relevant reports society in credit agreement and objective manners;
• Conducting internal audit for fiscal year 2017
1st line of defense 2nd line of defense 3rd line of defense
in 93 branches and 370 transaction offices as
Customer Care Executive, Competent authorities make Internal Audit scheduled;
Loan Assessment Executive decision on credit issuance • Conducting audit for 04 banking entities at
INTERNAL AUDIT LINE Head Office, 03 subsidiaries, 02 subsidiary banks
and 02 projects;
• Conducting IT audit.

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STAKEHOLDER ENGAGEMENT

• Customer policy, VIP

customers, loyal customers;
• Team of consultants and tellers
directly working with customers;
• Community activities • Customer service center and 24/7
• Attaching and listening to the expectations hotline;
and desires of local people. • Response to customers on website;
• Customer conference.

Y CUS
UNIT TO
M M
M E

CO

RS
• Attending in conferences and

G OVERN MENT
seminars held by the Government
• Direct meeting;

S U P PLIE R S

AG E N C I E S
and the Ministries/Divisions/
• Transparency in bidding,
Departments;
negotiating
• Making discussion with the State
• Commitment to service
agencies to contribute ideas for
quality, origin of product,
improving seminars and policies;
etc.
• Joining organizations, associations,
economic forums, etc.

IN
ES

ES
V TO E
R LOY
S P
EM

In 2017, stakeholder engagement continued Sacombank considers stakeholders as

to focus of Sacombank through a lot of • Promotion chart, KPIs; important partners. Their opinions are
multiple and objective communication • Annual General Meeting of Shareholders; valuable resources, addressing material
• Reward and welfare;
channels. Therefore, Sacombank received • Direct meeting with investors; issues for the Bank’s business operation.
• Assessment of happiness index;
more opinions from stakeholders in regard of • Website Sacombank;
• Cultural activities;
economic - environmental - social issues. • Symposium.
• Internal information pages;
• Training programs.

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 ANNUAL REPORT 2017
CORPORATE RESPONSIBILITY REPORT 2017

MATERIAL ISSUES
Human resource development

Significant impact on Sacombank

when employees are valuable asset
Internal impact
of every enterprise and contribute
SACOMBANK’S MATERIAL ISSUES ARE DETERMINED ON THE PRINCIPLE OF to profit.
Training and education
INTEGRATING KEY CONCERNS OF STAKEHOLDERS AND THOSE OF SACOMBANK’S
POLICIES IN ASSOCIATION WITH THREE AREAS I.E. ECONOMY - ENVIRONMENT Customers can enjoy good services
- SOCIETY. ACCURATELY IDENTIFYING AND EVALUATING THE MATERIAL ISSUES when the employees are trained External impact
ENABLES THE BANK TO ALLOCATE RESOURCES REASONABLY TO ENSURE professionally.
SUSTAINABLE DEVELOPMENT GOALS, MEETING THE EXPECTATIONS OF
STAKEHOLDERS. Occupational health and safety
Direct impact on Sacombank’s
Internal impact
employees
Diversity and equal opportunity

Risk management
MATERIAL AREA IMPACT DEGREE SCOPE OF IMPACT
Impact to profit, interest of Internal and External
Effort aiming to deploy Basel II
shareholders and investors. impact
Economic performance

Apply Basel II to risk management Impact on profit and brand of Internal and External
system to strengthen risk control Sacombank. impact
Impact on Sacombank’s profit. Internal impact
Maintaining sustainable
development goals is the Bank’s
Contribute and develop sustainable community
top priority.
Impact on the relationships with
External impact
shareholders and investors. Impact on the customer’s demand
Show responsibility to the
on using product (external External impact
community.
Sacombank)
Stimulate economic development
Promote creativity and enrich
Impact on Sacombank’s employees
community awareness on social External impact
and community.
issues
Impact on profit and brand of
Sacombank sets the goal to Internal impact
Sacombank.
become a regional leader in Contribute to environmental improvement
modern retail banking which
provides modern financial
Environmental compliance Impact on environment. External impact
products and services.
Impact on customer relationship. External impact
Impact on environment and
Reduce energy consumption External impact
society.

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 CORPORATE RESPONSIBILITY REPORT 2017 ANNUAL REPORT 2017

ECONOMIC STANDARDS

1 Economic
PERFORMANCE
(According to the Consolidated Financial Statements)
2 CONTRIBUTION TO
the State budget
(According to the Consolidated Financial Statements)
3 MARKET
PRESENCE
Sacombank offers compensations and
benefits to employees with fairness,
TOTAL ASSETS REVENUES gender equality based on 3P criteria:
position, productivity and performance.
2017 677
368,469 Annually, based on business results
53.9% 332,023 25,725
292,033 22.1% and performance efficiency of each
21,071 individual, Sacombank assesses and
18,196 2016 509 reviews salary in order to enhance the
15.8% engagement of employees, motivate
13.7% and stimulate labor productivity as well
0 100 200 300 400 500 600 700 as showing the Bank’s appreciation to
11.0%
4.4% the contributions of employees.
Amount (VND billion)

2015 2016 2017 2015 2016 2017

Total assets (VND billion) % growth Revenues (VND billion) % growth Sacombank’s principle for salary payment is not based on regional minimum salary. All employees of the Bank
receive a higher rate than regional minimum salary (at least 7% higher than minimum salary applied to Region
1). Salary for other laborers (who are not Sacombank’s employees) is paid on the basis of negotiation between
the Bank and those laborers, ensuring minimum salary applied to Region 1.

OWNER’S EQUITY PROFIT BEFORE TAX

1,492 REGIONAL MINIMUM SALARY

22.2% 23,236
858.8% 5,000,000
4,260,000
878 3,750,000
22,192 4,000,000
22,080 3,320,000
2,900,000 2,580,000
0.5% 4.7% 3,000,000
-68.9% 156 -82.3%

2015 2016 2017 2015 2016 2017 2,000,000

Owner’s equity (VND billion) % growth Profit before tax (VND billion) % growth
1,000,000

Region 1 Region 2 Region 3 Region 4 Sacombank

TO BE ONE OF THE LEADING COMMERCIAL BANKS IN VIETNAM, SACOMBANK UNDERSTANDS
THAT SUSTAINABLE DEVELOPMENT PLAN IS SUCCESSFULLY IMPLEMENTED ONLY IF ECONOMIC Basic salary (VND)
OBJECTIVES ARE ACHIEVED. THE BANK ALSO CANNOT BRING SUSTAINABLE BENEFITS TO
CUSTOMERS, INVESTORS AND COMMUNITY UNLESS BUILDING A SOLID ECONOMIC FOUNDATION. (Source: Pursuant to Decree No.153/2016/NĐ-CP dated 14 November 2016 stipulating regional minimum salary for
employees working under labor contract)

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 CORPORATE RESPONSIBILITY REPORT 2017 ANNUAL REPORT 2017

ECONOMIC STANDARDS (continued)

4 PROMOTING
economic development

Pioneering and particular financial services

• The technology directly connected system in 2018, which is a strong verification
with partner system (API - Application method and is protected by Vietnamese law.
Programming Interface): helps conduct • Fraud Prevention for IB/MB: Quickly detects
payment order immediately (24/7). Thanks and prevents risk and fraud, alerts and blocks
to this technology, right after a customer at many protection levels such as changing
completes overseas remittance procedures, geographical location, analyzing behaviors
the money will be added to account in and habits of customers to give warnings,
Vietnam. If the recipient wants to receive detecting malicious code, etc.
money at the counter of Sacombank’s • Implementing new payment technologies
transaction point, it takes two minutes only with a number of high technology products
(after the recipient fully provides information). such as Msign Token, Mcard, Sacombank
This technology enables the management of contactless, quick payment via QR code, etc.
at-home payment records to be ease and
quick, reducing workload for staff in charge Diversifying types of distribution channel
and having feedback right after success
In 2017, in addition to upgrading 11 Savings
payment.
Funds into transaction offices, relocating 86
• Remittance service via ATM: The recipient
transaction points in the country, launching
can receive money remitted from overseas
two branches in Laos and Cambodia, etc.,
at more than 1,000 ATM across the country
Sacombank reviewed and prepared Master
with one guiding message only.
plan to restructure operation network up to
• Collaboration with Dai-ichi Life Vietnam:
2022 - reallocating undeveloped transaction
To distribute all life insurance products
points to densely populated places and towards
and the best supporting benefits upon the Procurement practices have a roadmap to incorporate the environmental
the outskirts in order to gain market share as
demand of each Sacombank’s customer via factors and social risk when assessing supplier quality,
well as facilitating customers in rural areas to As a financial service provider, Sacombank had
network nationwide. including the supplier’s commitment in using input
quickly approach modern banking products 221 suppliers of machinery, equipment and
material and waste treatment in business operations,
and services, thereby creating a foundation for services and 87 suppliers of basic construction in
Financial service towards customers responsibility to employees, using child labor and
enhancing management capacity and increasing 2017. Sacombank’s criteria in supplier selection
forced labor, etc.
• Upgrading Mobile Banking (MB) and operational efficiency of the whole system. include legal status, financial capacity, experience,
Internet banking (IB) services to the latest technology, quality, price, payment, etc. and other
Anti-corruption activities
platform of IBM and Infosys: to deal with In addition to the traditional distribution related criteria of each specific product and project.
new detected vulnerabilities and to double channels, Mobile banking and Internet banking In particular, quality is always the first criterion of Sacombank strictly generalize the Law on corruption
product development speed. are two main channels to distribute products Sacombank. prevention to the Heads of entities in regular
• Biometric security: is the most advanced and services to customers. At present, 90% of meetings between the leadership of regions and
security mechanism associated with each the insight products are provided via these two Annually, Sacombank conducts supplier quality the branches. After that, the Heads continue to train
individual, giving customers’ mind a rest in channels. In the coming time, Sacombank plans assessment (quality, supply capacity, delivery time, all staffs at the entities and plan to implement the
transaction and transaction verification. to develop new hi-tech channels to meet the warranty, etc.) to select the best supplier. In addition national strategy on corruption prevention by 2020
• Integrating Electronic Signatures: increasing demands of customers. to the deployment of environmental and social risk through the meetings between the leadership and
Electronic signatures will be integrated into IB assessment system in credit issuance, Sacombank will employees of the entity.

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 CORPORATE RESPONSIBILITY REPORT 2017 ANNUAL REPORT 2017

ENVIRONMENTAL STANDARDS

ENVIRONMENT ENERGY

In 2017, there were no Sacombank’s violations against the law and legal regulations During its operation, Sacombank is highly aware of controlling, reducing and balancing the
on environmental protection. This is resulted from the Sacombank’s building sources of energy directly and indirectly consumed by the Bank. This is a practical action to
and application of ESMS under the consultancy of PwC, based on international minimize environmental impact.
practices such as Finance Initiative in United Nations Environment Program,
Equator Principles and IFC standards to all credit issuance operations. Based on the Sacombank also closely control power consumption in its office buildings through the
questions described in Appraisal Toolkit, credit officers will evaluate and classify supervision and examination of Security team, Technical staff, Accounting Dept. (at branches),
environmental and social risks arisen from the customer’s business operations Construction Dept. and Administrative Dept. (at Head Office). Thanks to that, Sacombank
before deciding to issue credit. always well manage the energy consumption situation to make timely monitor.

In addition to management work, Sacombank intensifies internal communication to enhance

employee’s awareness of environmental protection through energy saving. Therefore, in 2017,
the actual expenditure for energy consumption of Sacombank was controlled lower than the
target, showing the Bank’s determination in saving energy.

ENERGY
CONSUMPTION Unit: VND million
COST 150.00 144.35
134.709

SACOMBANK BELIEVES THAT OUR

100.00
EFFORTS IN ENVIRONMENTAL 83.863 74.184
OBJECTIVES WILL BE RECOGNIZED
BY STAKEHOLDERS, JOINTLY 50.00 45.294 45.183 53.521 53.074
SAVING ENERGY AND ENHANCING
AWARENESS OF ENVIRONMENTAL
PROTECTION IN BUSINESS
OPERATION. 0.00

Power Petrol Paper printing Labor tools

consumption
Plan Actual

114 115
 CORPORATE RESPONSIBILITY REPORT 2017 ANNUAL REPORT 2017

SOCIAL STANDARDS

Employee situation of Sacombank

Employee structure

EMPLOYEE STRUCTURE RECRUITMENT STRUCTURE

EMPLOYEE STRUCTURE ACCORDING TO ACCORDING TO AGE ACCORDING TO REGION
QUALIFICATION AND GENDER
2%

Others 1,244
3,245
17%
College 902
621
50% 48% 12%
Graduate 6,197
4,962 71%
Postgraduate 136
134
1,000 2,000 3,000 4,000 5,000 6,000 7,000

Female Male From 31 to 50 years of age Under 30 years of age In the South In the North In the Central
From 51 years of age

NUMBER OF EMPLOYEES
RECRUITMENT STRUCTURE RECRUITMENT STRUCTURE
ACCORDING TO AGE ACCORDING TO GENDER
17,441
15,505 16,028
10,645 11,672

14%

41%
59%
86%

2013 2014 2015 2016 2017

Number of employees
Under 30 years of age From 31 to 50 years of age Female Male

(According to the Separate Financial Statements)

116 117
 CORPORATE RESPONSIBILITY REPORT 2017 ANNUAL REPORT 2017

SOCIAL STANDARDS (continued)

Recruitment and talent attraction

In 2017, Sacombank employed

3,354
Putting human-centered values into the Bank’s restructure and sustainable development, Sacombank
constantly strives to revise policy and strengthen financial resources to enhance the quality of human
resources, improving income and increasing benefit and welfare for employees to promote performance
people with the recruitment efficiency and consolidate employee engagement. In 2017, Sacombank employed 3,354 people with
structure completely consistent the recruitment structure completely consistent with the Bank’s policy and employment policy.
with the Bank’s policy and
employment policy. As one of the top employers in Vietnam, Sacombank has continuously improved its incentive policies
to attract talents through its strategic partnerships with universities such as: “Potential Trainees” and
“Sacombank Semesters” programs to discover and train the individuals having potential qualities to
become the Bank’s employees in the future.

Diversity and opportunity equality

In 2017, the number of managers of Sacombank was 2,720 in which 49% was female and 51% was
male. This showed the Bank’s attention to gender equality. In term of age, senior staff and staff with
professional qualification aged from 31 to 50 made up the majority since the staff holding important
positions were experts with high professional qualification and intensive experience in governance and
management.

STRUCTURE OF LEADERSHIP STRUCTURE OF LEADERSHIP

ACCORDING TO AGE ACCORDING TO GENDER
“Potential Trainees”
and “Sacombank Semesters” 2%

6%

49% 51%

92%

From 31 to 50 years of age Under 30 years of age Female Male

From 51 years of age

118 119
 CORPORATE RESPONSIBILITY REPORT 2017 ANNUAL REPORT 2017

SOCIAL STANDARDS (continued)

Occupational health and safety Training and education

In 2017, Sacombank continued to pay attention to safety and health for employees through a lot of
practical activities, to be specific: NUMBER OF EMPLOYEES NUMBER OF
TRAINED AND CERTIFIED TRAINING COURSES

6
Organizing annual health examination 2,730
for all employees in the whole system. 14

Organizing clinic room and monthly 14,726 29

supplying medicine to care for
employees at workplace.

Making occupational safety plan and Staff Managers Profession Skill Managers
measure, improving working condition,
fully providing personal equipment and
implementing other schemes in term Clearly determining the role of human resources, in 2017 Sacombank continued to promote
of safety, hygiene and environmental training to improve professional skills and soft skills for employees through training courses at the
protection. Bank’s Training Center and external organizations.

The training programs are designed in high practice, diverse contents and forms, and close to
Employees are entitled to annual the employee’s works. Therefore, the quality of human resources of Sacombank continued to
vacation according to the Bank’s improve in the past year, meeting the increasingly stringent requirements of the market. In 2017,
expenditure which is provided equally Sacombank held 49 courses, including training courses for managers and professional and skill
for all employees regardless of their training for staff with totally 102,640 hours and 17,456 participants.
types of labor contracts (probation,
official working or training). In the implementation of restructuring plan, it can be said that managers are the “navigators”
to Sacombank to sail towards. Therefore, Sacombank has hold intensive training courses for the
management levels meeting the Bank’s requirements in the current period, to be specific, training
Supporting treatment expenses for courses on “Sharing risk management skills in banking sector”, “Enhancing Customer Focus” and
employees when they are sick or they “Building professional image”.
are injured on the way to work.

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SOCIAL STANDARDS (continued)

FIGURES
AND EVENTS 19 FREE PUBLIC
TOILETS

3,354 NEW
HIRES
in Ho Chi Minh City, Da
Nang, Da Lat, Vung Tau,
in 2017
NEARLY
1,000 Vinh Long, Cao Lanh
and Phu Quoc.
1,000 POTENTIAL EMPLOYEES
INTERNS participating in
received in 2017 community

12 VND
BILLION
activities

14,250 VND
to support the flood victims;

16
BILLION
building houses of gratitude and PROVINCES/
of preferential loans for
corporate customers
2,840 SCHOLARSHIPS schools; contributing to “For the poor”
fund; sponsoring artistic activities,
CITIES
organized a marathon contest
to support pupils preservation of cultural heritage; titled “Running together
and students in the supporting social security for with Sacombank for the
program “Sacombank - poor people, etc. community’s health”.
Nurturing dreams”

1,500 UNITS OF
BLOOD

102,640 17,456 are received in the program

“Sacombank - Share from the
HOURS

of professional training
TRAININGS
for staff
4.7 VND
BILLION heart” in 2017
to hold the spring charity
date 2018

122 123
 CORPORATE RESPONSIBILITY REPORT 2017 ANNUAL REPORT 2017

STATEMENT OF CONFORMITY WITH GRI STANDARDS

GRI INFORMATION CONTENTS OF
STANDARDS DISCLOSURE PAGE
THE REPORT
THIS STATEMENT INCLUDES INFORMATION DISCLOSURE IN CONFORMITY WITH
GENERAL STANDARDS AND SUPPLEMENTAL DISCLOSURE BASED ON GRI STANDARDS STRATEGY
GUIDELINE FOR THE FINANCIAL SECTOR.
Declaration of senior decision CEO’s message on
102-14 99
THE GUIDELINE GRI SUSTAINABILITY REPORTING STANDARDS IS THE LATEST maker sustainable development
COMPREHENSIVE ASSESSMENT OF BUSINESS SUSTAINABILITY AND PROVIDES MORE
Development strategy by
DETAILED INFORMATION ON THREE MAIN AREAS OF ECONOMY - ENVIRONMENT 30-31
2025
- SOCIETY. SACOMBANK HAS SELECTED AND APPLIED THESE STANDARDS TO Major impacts, risks and
102-15
IMPLEMENT ITS CORPORATE RESPONSIBILITY REPORT 2017. opportunities
Opportunities and
100-101
challenges for Sacombank

GRI INFORMATION CONTENTS OF GOVERNANCE

STANDARDS DISCLOSURE PAGE
THE REPORT
Network & organizational
GRI 100: DISCLOSE INFORMATION IN CONFORMITY WITH GENERAL 102-18 Governance structure 20-23
structure
STANDARDS 2017
102-19 Authorization of competencies
CORPORATE INFORMATION
Professional ethics 102-103
Responsibility of the executive
102-20 levels to economic, environmental
102-1 Name of organization 10 and social topics

Business operations, brands, Stakeholder consultation on

102-2 11 102-21 economic, environmental and Stakeholder engagement 106-107
products and services
social topics

102-3 Address of Head Office 10-11 Remuneration of BOD and

102-25 Conflict of interest 63
BOS in 2017
Introduction of Sacombank
102-4 Operating locations 20-21 Effectiveness of risk management
102-30
process
Sustainable development
104-105
10-11, 14-15, management
102-5 Ownership and legal form Review of economic, environmental
22-23 102-31
and social topics

102-6 Serving markets 20-21

PARTICIPATION OF STAKEHOLDERS
Network development 20-21
Organizational structure 22-23 102-40 List of stakeholders
102-7 Scale of organization
Economic standards 110
Number of employees 116 Identification and selection of
102-42 Stakeholder engagement 106-107
stakeholders
Sustainable development
102-11 Methods or principles of prevention 104-105
management Approach for stakeholder
102-43
participation

124 125
 CORPORATE RESPONSIBILITY REPORT 2017 ANNUAL REPORT 2017

STATEMENT OF CONFORMITY WITH GRI STANDARDS (continued)

GRI INFORMATION CONTENTS OF GRI INFORMATION CONTENTS OF

STANDARDS DISCLOSURE PAGE STANDARDS DISCLOSURE PAGE
THE REPORT THE REPORT

REPORTING STATEMENT GRI 202: MARKET PRESENCE

Units included in consolidated Ratios of standard entry level wage

102-45 202-1 by gender compared to local Market presence 111
financial statements
minimum wage
Determine reporting contents and
102-46
scope of topics GRI 203: INDIRECT ECONOMIC IMPACTS

102-47 List of key topics Significant indirect economic Promoting economic

203-2 112-113
impacts development

102-48 Information re-presentation

GRI 204: PROCUREMENT PRACTICES

102-49 Changes in the report

204-1 Sustainable value chain
Overview 98
102-50 Reporting period Environmental, social and
204-2 corporate governance standards in Procurement practices 112
investment projects
102-51 Date of the latest report
Environmental, social and corporate
204-3 governance standards in supply
102-52 Reporting period chain and supplier selection

Contact points for inquiries about

GRI 205: ANTI - CORRUPTION
102-53
the report
Communication and training
Statement on making report in 205-2 about anti-corruption policies and Anti-corruption activities 113
102-54
compliance with GRI Standards procedures

GRI 200: ECONOMIC STANDARD DISCLOSURES GRI 300: ENVIRONMENTAL DISCLOSURES

GRI 201: ECONOMIC PERFORMANCE GRI 302: ENERGY

Economic performance 110 Energy consumption in the

302-1
Direct economic value generated organization
201-1 Energy 115
and distributed Contribution to the State
111
budget 302-4 Reduce energy consumption

126 127
 CORPORATE RESPONSIBILITY REPORT 2017 ANNUAL REPORT 2017

STATEMENT OF CONFORMITY WITH GRI STANDARDS (continued)

GRI INFORMATION CONTENTS OF GRI INFORMATION CONTENTS OF

STANDARDS DISCLOSURE PAGE STANDARDS DISCLOSURE PAGE
THE REPORT THE REPORT

GRI 307: ENVIRONMENTAL COMPLIANCE GRI 404: TRAINING AND EDUCATION

Non-compliance with Average hours of training per year

307-1 Environment 114 404-1
environmental laws and regulations per employee
Training and education 121
GRI 400: SOCIAL DISCLOSURES Skill development programs for
404-2 staff and transitional support
programs
GRI 401: EMPLOYMENT
GRI 405: DIVERSITY AND EQUAL OPPORTUNITY
Number of new hires and Recruitment and talent
401-1 118-119
resignation rate attraction
405-1 Diversity of management and staff
Benefits for full-time employees, Diversity and
119
401-2 not for seasonal or part-time Market presence 111 Ratios of basic salary and equality opportunity
employees 405-2 remuneration for female compared
to male

GRI 403: OCCUPATIONAL HEALTH AND SAFETY GRI 406: NON-DISCRIMINATION

Discrimination cases and corrective

406-1 None
Employee representatives in official Sacombank’s Trade Union represents actions already taken
occupational health and safety the employees in official occupational
403-1
committees between management health and safety committees between GRI 407: FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING
team and employees management team and employees

Activities and suppliers where

Sacombank records no case of not
Injury and injury rate, occupational freedom of association/Trade Union
407-1 implementing right to participate in Trade
403-2 disease, lost workdays, absence and and collective bargaining may be
Union and collective bargaining.
work-related fatality at risk.
None

Employees at high rate for high risk

403-3 GRI 408: CHILD LABOR
for occupational diseases

Health and safety topics mentioned

Occupational health and
403-4 in the collective bargaining 120
safety Operations and suppliers at Sacombank absolutely does not use child
agreement 408-1
significant risk for child labor. labor in all business activities.

128 129
 CORPORATE RESPONSIBILITY REPORT 2017 ANNUAL REPORT 2017

STATEMENT OF CONFORMITY WITH GRI STANDARDS (continued)

GRI INFORMATION CONTENTS OF GRI INFORMATION CONTENTS OF

STANDARDS DISCLOSURE PAGE STANDARDS DISCLOSURE PAGE
THE REPORT THE REPORT

GRI 409: FORCED LABOR GRI 417: MARKETING AND LABELING

Operations and suppliers at Requirements for trademark,

417-1
409-1 significant risk for incidents of None products and services
forced or compulsory labor.
Non-compliance cases involved
417-2 in trademark, product and service None
GRI 411: RIGHTS OF INDIGENOUS PEOPLE information

Operations and suppliers at Non-compliance cases involved in

417-3
significant risk for incidents of marketing and communication
411-1 forced or compulsory labor. None
Violations related to rights of
indigenous people.

GRI 409: FORCED LABOR

Operations and suppliers at

409-1 significant risk for incidents of None
forced or compulsory labor.

GRI 413: LOCAL COMMUNITY

Operations, which local

communities participate in, to
413-1 Figures and events 122-123
assess impacts and development
programs.

GRI 416: CUSTOMER’S HEALTH AND SAFETY

Assess health and safety impacts of

416-1
product or service classification
None
Non-compliance cases involved
416-2 in health and safety impacts of
products and services

130 131
 New success
FROM PIONEERING STRENGTH
Sacombank has been striving to achieve new successes,
contributing more to socio-economic development of the
country. That is the pioneering strength of one of the leading
commercial banks in the financial market in Vietnam.
 WWW.SACOMBANK.COM.VN GENERAL INFORMATION

THE BANK

Saigon Thuong Tin Commercial Joint Stock Bank (“the Bank”) is a commercial joint stock bank incorporated in the
Socialist Republic of Vietnam.

The Bank was established and operates in accordance with Banking License No. 0006/NH-GP issued by the State Bank
of Vietnam on 5 December 1991, Business Registration Certificate No. 0301103908 dated 13 January 1992 and other
amendments issued by Ho Chi Minh City Department of Planning and Investment. The Bank’s operation period is 100
SAIGON THUONG TIN COMMERCIAL JOINT STOCK BANK years from 21 December 1991.

As at 1 October 2015, Southern Commercial Joint Stock Bank was officially merged into Saigon Thuong Tin Commercial
Separate financial statements Joint Stock Bank according to Decision No. 1844/QD-NHNN dated 14 September 2015 issued by the State Bank of
Vietnam. Accordingly, Saigon Thuong Tin Commercial Joint Stock Bank has received and inherited all assets and
31 December 2017 obligations of Southern Commercial Joint Stock Bank since the date of merger.

The Bank is allowed to carry out full range of banking services including mobilizing and receiving short, medium and
long-term deposits from organizations and individuals; providing short, medium and long-term loans to organizations
and individuals based on the Bank’s nature and capacity of the capital resources; foreign exchange trading; international
trade financing services; discount of commercial papers, bonds and other valuable papers; providing settlement services;
TABLE OF CONTENTS operating in monetary market; banking and financial consultancy; trading in government and corporate bonds; gold
trading; cash management services, asset preservation, cabin and safer renting; entrustment and trusteeship services;
Pages insurance agent; brokerage and other banking services as allowed by the State Bank of Vietnam.

General information 135 - 138 The Bank’s head office is located at 266 - 268 Nam Ky Khoi Nghia Street, District 3, Ho Chi Minh City. As at 31 December
2017, the Bank had one (1) Head Office, one hundred and nine (109) branches located in cities and provinces in Vietnam,
Report of the Board of Management 139 four hundred and forty three (443) domestic transaction offices.

BOARD OF DIRECTORS
Independent auditors’ report 140-141
The members of the Bank’s Board of Directors for the financial year ended 31 December 2017 and at the date of these
Separate balance sheet 142 - 144 separate financial statements are as follows:

Separate income statement 145 Date of joining the

Name Board of Directors Position Date of appointment/ reappointment/resignation
Separate cash flow statement 146-147
Mr. Duong Cong Minh 30 June 2017 Chairman Appointed on 30 June 2017

Standing Vice Reappointed on 30 June 2017

Mr. Kieu Huu Dung 26 May 2012
Chairman Resigning on 22 March 2018 and pending for approval

Mr. Pham Van Phong 30 June 2017 Vice Chairman Appointed on 30 June 2017

Mr. Nguyen Mien Tuan 26 May 2012 Member Reappointed on 30 June 2017

Mr. Nguyen Xuan Vu 30 June 2017 Member Appointed on 30 June 2017

Independent
Ms. Le Thi Hoa 30 June 2017 Appointed on 30 June 2017
Member

The separate financial statements of Saigon Thuong Tin Commercial Joint Stock Bank as at 31 December 2017 audited by
Ernst & Young Vietnam Limited are fully disclosed at www.sacombank.com.vn.

134 135
 GENERAL INFORMATION (CONTINUED) GENERAL INFORMATION (CONTINUED)

BOARD OF DIRECTORS (CONTINUED) BOARD OF MANAGEMENT AND CHIEF ACCOUNTANT

The members of the Board of Management and Chief Accountant for the financial year ended 31 December 2017 and
The members of the Bank’s Board of Directors for the financial year ended 31 December 2017 and at the date of these
at the date of these separate financial statements are as follows:
separate financial statements are as follows (continued):
Name Position Date of appointment/resignation
Date of joining the Date of appointment/ Ms. Nguyen Duc Thach Diem General Director Appointed on 25 July 2017
Name Board of Directors Position reappointment/resignation
Mr. Nguyen Minh Tam Deputy General Director Appointed on 21 May 2007
Vice Chairman cum Mr. Dao Nguyen Vu Deputy General Director Appointed on 27 June 2007
Mr. Phan Huy Khang 26 May 2012 Resigned on 30 June 2017
General Director
Ms. Quach Thanh Ngoc Thuy Deputy General Director Appointed on 5 February 2010
Mr. Tram Be 26 May 2012 Member Resigned on 23 February 2017 Mr. Bui Van Dung Deputy General Director Appointed on 29 March 2012

Mr. Tram Khai Hoa 26 May 2012 Member Resigned on 23 February 2017 Mr. Phan Dinh Tue Deputy General Director Appointed on 14 June 2012
Ms. Ha Quynh Anh Deputy General Director Appointed on 28 June 2012
Mr. Nguyen Gia Dinh 25 April 2013 Member Resigned on 30 June 2017 Ms. Nguyen Thi Le An Deputy General Director Appointed on 24 July 2012
Ms. Nguyen Thi Le An 25 April 2013 Member Resigned on 30 June 2017 Mr. Nguyen Ba Tri Deputy General Director Appointed on 26 July 2012
Mr. Ho Doan Cuong Deputy General Director Appointed on 1 October 2012
Ms. Duong Hoang Quynh Nhu 26 May 2012 Member Resigned on 30 June 2017 Mr. Vo Anh Nhue Deputy General Director Appointed on 1 October 2012
Mr. Nguyen Van Cuu 25 April 2013 Independent member Resigned on 30 June 2017 Mr. Ha Van Trung Deputy General Director Appointed in 10 October 2012
Mr. Hoang Thanh Hai Deputy General Director Appointed on 7 April 2014
BOARD OF SUPERVISION Mr. Trinh Van Ty Deputy General Director Appointed on 1 October 2015
Mr. Le Van Ron Deputy General Director Appointed on 11 July 2017
The members of the Bank’s Board of Supervision for the financial year ended 31 December 2017 and at the date of
Mr. Phan Quoc Huynh Deputy General Director Appointed on 25 July 2017
these separate financial statements are as follows:
Ms. Nguyen Ngoc Que Chi Deputy General Director Appointed on 5 September 2017
Date of joining the Date of appointment/ Mr. Le Duc Thinh Deputy General Director Appointed on 15 September 2017
Name Board of Supervision Position reappointment/resignation Mr. Phan Huy Khang General Director Resigned on 3 July 2017
Mr. Tran Minh Triet 30 June 2017 Chief Supervisor Appointed on 30 June 2017 Standing Deputy General
Mr. Nguyen Van Nhan Resigned on 28 July 2017
Director
Mr. Nguyen Van Ly 26 May 2012 Chief Supervisor Resigned on 30 June 2017
Mr. Le Trong Tri Deputy General Director Resigned on 4 April 2017
Mr. Ha Ton Trung Hanh 30 June 2017 Member Appointed on 30 June 2017 Mr. Ha Ton Trung Hanh Deputy General Director Resigned on 30 June 2017
Ms. Nguyen Thi Thanh Mai 2 April 2011 Member Reappointed on 30 June 2017 Mr. Nguyen Xuan Vu Deputy General Director Resigned on 6 July 2017
Mr. Le Van Tong 2 April 2011 Member Reappointed on 30 June 2017 Resigned on 25 July 2017, Appointed as Deputy
Ms. Duong Hoang Quynh Nhu Deputy General Director
Operations Director
Resigned on 15 September 2017, Appointed as Head of
Mr. Tran Minh Khoa Deputy General Director
Internal Audit
Mr. Ly Hoai Van Deputy General Director Resigned on 16 October 2017
Mr. Huynh Thanh Giang Chief Accountant Appointed on 1 June 2012

LEGAL REPRESENTATIVE
The legal representative of the Bank was Mr. Phan Huy Khang - General Director, from 1 January 2017 to 2 July 2017.
The legal representative of the Bank is Ms. Nguyen Duc Thach Diem - General Director (acting as General Director from
3 July 2017 to 24 July 2017) from 3 July 2017 to the date of these separate financial statements.
AUDITOR
The auditor of the Bank is Ernst & Young Vietnam Limited.

136 137
 GENERAL INFORMATION (CONTINUED) REPORT OF THE BOARD OF MANAGEMENT

SIGNIFICANT EVENT DURING THE YEAR AND AT THE DATE OF THESE SEPARATE FINANCIAL STATEMENTS The Board of Management of Saigon Thuong Tin Commercial Joint Stock Bank (“the Bank”) is pleased to present its
report and the separate financial statements of the Bank as at and for the year ended 31 December 2017.
On 22 May 2017, the Post-merger Restructuring Plan of Saigon Thuong Tin Commercial Joint Stock Bank for the period
up to 2025 and the Bank’s proposals for financial regimes and resolutions in the Restructuring Plan in relation to THE BOARD OF MANAGEMENT’S RESPONSIBILITY FOR THE SEPARATE FINANCIAL STATEMENTS
accrued interest receivables, VAMC’s special bonds, bad debts, doubtful assets and investment securities during the
restructuring period was approved by the State Bank of Vietnam according to Decision No. 34/QD-NHNN.Tym and The Board of Management is responsible for the separate financial statements of each year which give a true and fair
Official Letter No. 426/NHNN-TTGSNH.Tym. view of the separate financial position of the Bank and of the separate results of its operations and its separate cash
flows for the year. In preparing those separate financial statements, the Board of Management is required to:
On 22 March 2016, the NBC issued Prakas No. B7-016-117 on Minimum Registered Capital of Banking and Financial
Institutions (“the Prakas”). The Prakas requires commercial bank locally incorporated as foreign subsidiary shall have »» s elect suitable accounting policies and apply them consistently;
minimum registered capital of at least KHR’000 300,000,000 (approximately US$75 million). Duration of implementation »» make judgments and estimates that are reasonable and prudent;
is within 2 years from the date of the Prakas. Up to the date of these separate financial statements, the charter capital
»» state whether applicable accounting standards have been followed, subject to any material departures disclosed
of Sacombank Cambodia Plc. is US$38 million. On 2 October 2017, the Board of Managament issued Resolution No.
and explained in the separate financial statements; and
195/2017/NQ-HĐQT regarding to the approval of capital contribution to Sacombank Cambodia Plc. in compliance
with the Prakas. The Bank is preparing necessary documentations relating to regulatory requirements of the Ministry of »» prepare the separate financial statements on the going concern basis unless it is inappropriate to presume that the
Planning and Investment of Vietnam and the State Bank of Vietnam. Bank will continue in business.

The Board of Management is responsible for ensuring that proper accounting records are kept which disclose, with
reasonable accuracy at any time, the separate financial position of the Bank and to ensure that the accounting records
comply with the applied accounting system. It is also responsible for safeguarding the assets of the Bank and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Board of Management confirmed that it has complied with the above requirements in preparing the accompanying
separate financial statements for the year ended 31 December 2017.

STATEMENT BY THE BOARD OF MANAGEMENT

The Board of Management does hereby state that, in its opinion, the accompanying separate financial statements give
a true and fair view of the separate financial position of the Bank as at 31 December 2017, of the separate results of its
operations and its separate cash flows for the year then ended in accordance with Vietnamese Accounting Standards,
Vietnamese Accounting System for Credit Institutions, the official approvals of the State Bank of Vietnam for the Post-
merger Restructuring Plan and the Bank’s proposals for financial regimes and resolutions in the Restructuring Plan in
relation to accrued interest receivables, VAMC’s special bonds, bad debts, doubtful assets and investment securities
during restructuring period and statutory requirements relevant to preparation and presentation of the separate
financial statements.

On behalf of the Board of Management:

Ms. Nguyen Duc Thach Diem

General Director

Ho Chi Minh City, Vietnam

30 March 2018

138 139
 Reference: 60857352/19486298
INDEPENDENT AUDITORS’ REPORT

TO: THE SHAREHOLDERS OF SAIGON THUONG TIN COMMERCIAL JOINT STOCK BANK OPINION

We have audited the accompanying separate financial statements of Saigon Thuong Tin Commercial Joint Stock Bank In our opinion, the separate financial statements give a true and fair view, in all material respects, of the separate
(“the Bank”) as prepared on 30 March 2018 and set out on pages 142 to 147, which comprise the separate balance sheet financial position of the Bank as at 31 December 2017, of the separate results of its operations and its separate cash
as at 31 December 2017, the separate income statement and the separate cash flow statement for the year then ended flows for the year then ended in accordance with Vietnamese Accounting Standards, Vietnamese Accounting System
and the notes thereto. for Credit Institutions, the official approvals of the State Bank of Vietnam for the Post-merger Restructuring Plan and
the Bank’s proposals for financial regimes and resolutions in the Restructuring Plan in relation to accrued interest
THE BOARD OF MANAGEMENT’S RESPONSIBILITY receivables, VAMC’s special bonds, bad debts, doubtful assets and investment securities during the restructuring
period and statutory requirements relevant to preparation and presentation of the separate financial statements.
The Bank’s Board of Management is responsible for the preparation and fair presentation of these separate financial
statements in accordance with Vietnamese Accounting Standards, Vietnamese Accounting System for Credit EMPHASIS OF MATTERS
Institutions, the official approvals of the State Bank of Vietnam for the Post-merger Restructuring Plan and the Bank’s
proposal for financial regimes and resolutions in the Restructuring Plan in relation to accrued interest receivables, As presented in Note 3.3, on 22 May 2017, the Post-merger Restructuring Plan of Saigon Thuong Tin Commercial
VAMC’s special bonds, bad debts, doubtful assets and investment securities during the restructuring period and Joint Stock Bank and the Bank’s proposals for financial regimes and resolutions in the Restructuring Plan in relation
statutory requirements relevant to preparation and presentation of the separate financial statements, and for such to accrued interest receivables, VAMC’s special bonds, bad debts, doubtful assets and investment securities during
internal control as the Board of Management determines is necessary to enable the preparation and presentation of the restructuring period was approved by the State Bank of Vietnam according to Decision No. 34/QD-NHNN.Tym
the separate financial statements that are free from material misstatement, whether due to fraud or error. and Official Letter No. 426/NHNN-TTGSNH.Tym. Accordingly, the basis for recognition, measurement and presentation
of these items in the separate financial statements was made according to the official approvals of the State Bank of
AUDITORS’ RESPONSIBILITY Vietnam for the Post-merger Restructuring Plan and the Bank’s proposals in the Restructuring Plan which are presented
in relevant notes to the separate financial statements.
Our responsibility is to express an opinion on these separate financial statements based on our audit. We conducted
our audit in accordance with Vietnamese Standards on Auditing. Those standards require that we comply with ethical We draw attention to Note 48 - “Contingent liabilities”. On 8 January 2018, a case of deliberately violation of
requirements and plan and perform the audit to obtain reasonable assurance about whether the separate financial government regulations on economic management with serious consequences relating to Vietnam Construction
statements are free from material misstatement. Joint Stock Bank (currently known as One Member Limited Liability Vietnam Construction Bank) was heard at first
instance by Ho Chi Minh City People’s Court. The Bank is a party relating to this case because of the credit granted
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the separate to six borrowers with the amount of VND1,800,000 million, for which the collaterals were the deposits of Vietnam
financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the Construction Joint Stock Bank with the amount of VND1,854,000 million. At contract maturity date, the Bank used
risks of material misstatement of the separate financial statements, whether due to fraud or error. In making those the Vietnam Construction Joint Stock Bank’s deposits to settle for the loans in accordance with the terms of the
risk assessments, the auditor considers internal control relevant to the Bank’s preparation and fair presentation of the loan agreements and signed guarantee contracts. On 7 February 2018, the Trial Panel announced the return of the
separate financial statements in order to design audit procedures that are appropriate in the circumstances, but not documents to the Procuracy for further investigation. Up to the date of these separate financial statements, the case
for the purpose of expressing an opinion on the effectiveness of the Bank’s internal control. An audit also includes has been still under investigation, hence, the outcome of this case has not been determined yet.
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by
the Board of Management, as well as evaluating the overall presentation of the separate financial statements. Our opinion is not modified in respect of these matters.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit ERNST & YOUNG VIETNAM LIMITED
opinion.

Nguyen Thuy Duong Nguyen Quoc Tuan
Deputy General Director Auditor
Audit Practicing Registration Audit Practicing Registration
Certificate No. 0893-2018-004-01 Certificate No. 1841-2018-004-1

Ho Chi Minh City, Vietnam

30 March 2018

140 141
 SEPARATE BALANCE SHEET B02/TCTD SEPARATE BALANCE SHEET B02/TCTD
as at 31 December 2017 as at 31 December 2017 (continued)

Ending balance Beginning balance Ending balance Beginning balance

Notes VND million VND million Notes VND million VND million
ASSETS
LIABILITIES
Cash and gold 5 5,906,775 5,459,219
Balances with the State Bank of Vietnam 6 1,965,587 7,994,257 Borrowings from the State Bank of Vietnam 17 231,484 3,774,694
Due from and loans to other credit institutions 8,170,876 4,577,605
Due to and borrowings from other credit institutions 11,856,331 8,216,042
Due from other credit institutions 7.1 6,924,232 3,368,969
Loans to other credit institutions 7.2 1,247,196 1,209,188 Due to other credit institutions 18.1 6,817,685 3,448,216
Provision for credit losses (552) (552)
Borrowings from other credit institutions 18.2 5,038,646 4,767,826
Held-for-trading securities 8 63,250 89,891
Held-for-trading securities 63,250 105,624 Due to customers 19 316,905,245 289,455,981
Provision for held-for-trading securities - (15,733)
Grants, entrusted funds and loans exposed to risks 20 1,415 1,358,433
Derivatives and other financial assets 9 20,251 15,422
Loans to customers 214,164,522 190,768,474 Valuable papers issued 21 5,601,386 600
Loans to customers 10 216,710,219 193,098,213
Other liabilities 6,544,602 4,629,893
Provision for credit losses on loans to customers 12.1 (2,545,697) (2,329,739)
Purchased debts 11 643,784 751,748 Interest and fees payables 4,399,386 3,493,780

Purchased debts 648,763 757,528

Other liabilities 22 2,145,216 1,136,113
Provision for credit losses on purchased debts (4,979) (5,780)
Investment securities 13 73,188,019 65,032,587 TOTAL LIABILITIES 341,140,463 307,435,643

Available-for-sale securities 13.1 30,006,875 27,588,607 OWNERS’ EQUITY

Held-to-maturity securities 13.2 45,266,699 39,292,300
Provision for investment securities 13.4 (2,085,555) (1,848,320) Capital 18,166,632 18,166,632

Long-term investments 3,007,720 3,364,076 Charter capital 18,852,157 18,852,157

Investment in subsidiaries 14.1 2,967,294 2,967,294
Other long-term investments 14.2 279,727 839,368 Fund for capital expenditure 1,121 1,121

Provision for long-term investments 14.3 (239,301) (442,586) Share premium 63,612 63,612
Fixed assets 7,554,249 7,340,690
Treasury shares (750,911) (750,911)
Tangible fixed assets 15.1 4,082,727 4,044,626
Cost 6,079,357 5,806,663 Other capital 653 653
Accumulated depreciation (1,996,630) (1,762,037)
Reserves 2,331,711 2,242,765
Intangible fixed assets 15.2 3,471,522 3,296,064
Cost 4,263,562 4,005,321 Foreign currency translation reserve 118,046 118,046
Accumulated amortization (792,040) (709,257)
Retained earnings 2,259,441 1,224,405
Other assets 49,331,260 43,793,522
Receivables 16.1 23,835,706 16,880,335 TOTAL OWNERS’ EQUITY 24.1 22,875,830 21,751,848
Interest and fees receivable 16.2 24,698,384 25,299,053
TOTAL LIABILITIES AND OWNERS’ EQUITY 364,016,293 329,187,491
Deferred tax assets 23 59,915 95,580
Other assets 16.3 1,242,404 2,147,735
Provision for other assets 16.4 (505,149) (629,181)
TOTAL ASSETS 364,016,293 329,187,491

142 143
 SEPARATE BALANCE SHEET B02/TCTD SEPARATE INCOME STATEMENT B03/TCTD
as at 31 December 2017 (continued) for the year ended 31 December 2017

OFF BALANCE SHEET ITEMS

Current year Previous year
Notes VND million VND million
Ending balance Beginning balance Interest and similar income 25 21,023,316 17,446,566
Notes VND million VND million
Interest and similar expenses 26 (16,088,687) (13,715,943)
Guarantees for borrowings 17,766 34,126
Net interest and similar income 4,934,629 3,730,623
Commitments on foreign exchange transactions 14,441,368 12,049,416 Fee and commission income 3,133,097 1,819,274
»» Commitments on buying foreign currencies 1,105,091 282,991 Fee and commission expenses (737,660) (588,071)

»» Commitments on selling foreign currencies 842,824 521,615 Net fee and commission income 27 2,395,437 1,231,203
Net gain from foreign currencies and gold trading 28 332,893 253,017
»» Commitments on swap transactions 12,493,453 11,244,810
Net gain/(loss) from dealing of held-for-trading securities 29 13,965 (753)
Letters of credit 7,415,440 9,047,649
Net gain from dealing of investment securities 30 157,524 45,835
Other guarantees 8,302,200 4,518,352 Other operating income 352,390 775,357
37 30,176,774 25,649,543 Other operating expenses (7,995) (7,812)
Net gain from other operating activities 31 344,395 767,545
Prepared by: Reviewed by: Approved by: Income from long-term investments 32 16,831 133,127
TOTAL OPERATING INCOME 8,195,674 6,160,597
Personnel expenses (3,887,306) (2,927,015)
Depreciation and amortization charges (379,602) (361,249)
Other operating expenses (1,729,213) (2,110,410)
TOTAL OPERATING EXPENSES 33 (5,996,121) (5,398,674)
Net operating profit before credit loss expenses 2,199,553 761,923
Credit loss expenses 12 (715,933) (664,664)

Mr. Luu Van Hoa Mr. Huynh Thanh Giang Ms. Nguyen Duc Thach Diem PROFIT BEFORE TAX 1,483,620 97,259
Accountant Chief Accountant General Director Current corporate income tax expenses 23 (219,086) (21,265)
Deferred corporate income tax (expenses)/income 23 (35,665) 992
Ho Chi Minh City, Vietnam Total corporate income tax expenses (254,751) (20,273)

30 March 2018 PROFIT AFTER TAX 1,228,869 76,986

Prepared by: Reviewed by: Approved by:

Mr. Luu Van Hoa Mr. Huynh Thanh Giang Ms. Nguyen Duc Thach Diem
Accountant Chief Accountant General Director

Ho Chi Minh City, Vietnam

30 March 2018

144 145
 SEPARATE CASH FLOW STATEMENT B04/TCTD SEPARATE CASH FLOW STATEMENT B04/TCTD
for the year ended 31 December 2017 for the year ended 31 December 2017 (continued)

Current year Previous year Current year Previous year

Notes VND million VND million Notes VND million VND million
CASH FLOWS FROM OPERATING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITY
Interest and similar receipts 21,515,803 17,385,567
Dividends distributed to shareholders 24.3 (650) (575)
Interest and similar payments (15,183,200) (13,240,931)
Net fee and commission receipts 2,332,937 1,231,203 Cash used in financing activity (650) (575)

Net receipts from trading of securities, gold and foreign currencies 427,555 286,783 Net cash flows during the year (2,025,851) (13,512)
Receipts from other activities 287,525 145,106
Cash and cash equivalents at beginning of year 16,822,445 16,835,957
Recoveries from bad debts previously written-off 50,943 56,751
Payments for operations and salary expenses (5,865,783) (5,151,071) Cash and cash equivalents at end of year 34 14,796,594 16,822,445

Corporate income tax paid during the year 23 (16,655) (4,258)

Net cash from operating activities before changes in operating
3,549,125 709,150 Prepared by: Reviewed by: Approved by:
assets and liabilities
Changes in operating assets (37,325,004) (38,866,455)
Increase in due from and loans to other credit institutions (38,008) (225,107)
Increase in investment securities (718,306) (2,299,326)
Increase in derivatives and other financial assets (4,829) (15,422)
Increase in loans to customers (37,857,152) (36,943,002)
Decrease in provision used for compensation of losses (14,907) (14,444)
Decrease in other operating assets 1,308,198 630,846 Mr. Luu Van Hoa Mr. Huynh Thanh Giang Ms. Nguyen Duc Thach Diem
Changes in operating liabilities 31,639,235 38,252,910 Accountant Chief Accountant General Director
(Decrease)/increase in borrowings from the State Bank (3,774,694) 3,774,694
Increase in due to and borrowings from other credit institutions 2,698,439 4,542,994 Ho Chi Minh City, Vietnam
Increase in due to customers 26,903,045 30,028,244 30 March 2018
Increase in valuable papers issued 5,600,786 -
Decrease in other borrowed and entrusted funds (183,684) (303,461)
Decrease in derivatives and other financial liabilities - (22,853)
Increase in other operating liabilities 413,033 289,210
Utilizations of reserves during the year (17,690) (55,918)
Net cash (used in)/from operating activities (2,136,644) 95,605
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets (576,396) (428,026)
Proceeds from disposals of fixed assets 185,378 186,198
Payments for investing in other entities - (592)
Proceeds from disposal of investments in other entities 382,026 941
Dividends received and profit from long-term investments 32 120,435 132,937
Net cash from/(used in) investing activities 111,443 (108,542)

146 147
 WWW.SACOMBANK.COM.VN GENERAL INFORMATION

THE BANK
SAIGON THUONG TIN COMMERCIAL JOINT STOCK BANK
Saigon Thuong Tin Commercial Joint Stock Bank (“the Bank”) is a commercial joint stock bank incorporated in the
Consolidated financial statements Socialist Republic of Vietnam.

The Bank was established and operates in accordance with Banking License No. 0006/NH-GP issued by the State Bank
31 December 2017 of Vietnam on 5 December 1991, Business Registration Certificate No. 0301103908 dated 13 January 1992 and other
amendments issued by Ho Chi Minh City Department of Planning and Investment. The Bank’s operation period is 100
years from 21 December 1991.
TABLE OF CONTENTS
As at 1 October 2015, Southern Commercial Joint Stock Bank was officially merged into Saigon Thuong Tin Commercial
Joint Stock Bank according to Decision No. 1844/QD-NHNN dated 14 September 2015 issued by the State Bank of
Pages Vietnam. Accordingly, Saigon Thuong Tin Commercial Joint Stock Bank has received and inherited all assets and
obligations of Southern Commercial Joint Stock Bank since the date of merger.
General information 149 - 152
The Bank is allowed to carry out full range of banking services including mobilizing and receiving short, medium and
long-term deposits from organizations and individuals; providing short, medium and long-term loans to organizations
Report of the Board of Management 153 and individuals based on the Bank’s nature and capacity of the capital resources; foreign exchange trading; international
trade financing services; discount of commercial papers, bonds and other valuable papers; providing settlement services;
Independent auditors’ report 154 - 155 operating in monetary market; banking and financial consultancy; trading in government and corporate bonds; gold
trading; cash management services, asset preservation, cabin and safer renting; entrustment and trusteeship services;
insurance agent; brokerage and other banking services as allowed by the State Bank of Vietnam.
Consolidated balance sheet 156 - 158
The Bank’s head office is located at 266 - 268 Nam Ky Khoi Nghia Street, District 3, Ho Chi Minh City. As at 31 December
Consolidated income statement 159 2017, the Bank had one (1) Head Office, one hundred and nine (109) branches located in cities and provinces in Vietnam,
four hundred fourty three (443) domestic transaction offices.

Consolidated cash flow statement 160-161 BOARD OF DIRECTORS

The members of the Bank’s Board of Directors for the financial year ended 31 December 2017 and at the date of these
Notes to the consolidated financial statements 162 - 249 consolidated financial statements are as follows:

Date of joining the Current Date of appointment/ reappointment/

Name Board of Directors position resignation

Mr. Duong Cong Minh 30 June 2017 Chairman Appointed on 30 June 2017

Standing Vice Reappointed on 30 June 2017

Mr. Kieu Huu Dung 26 May 2012
Chairman Resigning 22 March 2018 and pending for approval

Mr. Pham Van Phong 30 June 2017 Vice Chairman Appointed on 30 June 2017

Mr. Nguyen Mien Tuan 26 May 2012 Member Reappointed on 30 June 2017

Mr. Nguyen Xuan Vu 30 June 2017 Member Appointed on 30 June 2017

Independent
Ms. Le Thi Hoa 30 June 2017 Appointed on 30 June 2017
member

148 149
 GENERAL INFORMATION (CONTINUED) GENERAL INFORMATION (CONTINUED)

BOARD OF DIRECTORS (CONTINUED) BOARD OF MANAGEMENT AND CHIEF ACCOUNTANT

The members of the Bank’s Board of Directors for the financial year ended 31 December 2017 and at the date of these The members of the Board of Management and Chief Accountant for the financial year ended 31 December 2017 and
consolidated financial statements are as follows (continued): at the date of these consolidated financial statements are as follows:

Name Position Date of appointment/resignation

Date of joining the Date of appointment/ Ms. Nguyen Duc Thach Diem General Director Appointed on 25 July 2017
Name Board of Directors Current Position reappointment/resignation
Mr. Nguyen Minh Tam Deputy General Director Appointed on 21 May 2007
Vice Chairman cum Mr. Dao Nguyen Vu Deputy General Director Appointed on 27 June 2007
Mr. Phan Huy Khang 26 May 2012 Resigned on 30 June 2017
General Director
Ms. Quach Thanh Ngoc Thuy Deputy General Director Appointed on 5 February 2010
Mr. Tram Be 26 May 2012 Member Resigned on 23 February 2017 Mr. Bui Van Dung Deputy General Director Appointed on 29 March 2012
Mr. Phan Dinh Tue Deputy General Director Appointed on 14 June 2012
Mr. Tram Khai Hoa 26 May 2012 Member Resigned on 23 February 2017
Ms. Ha Quynh Anh Deputy General Director Appointed on 28 June 2012
Mr. Nguyen Gia Dinh 25 April 2013 Member Resigned on 30 June 2017 Ms. Nguyen Thi Le An Deputy General Director Appointed on 24 July 2012
Mr. Nguyen Ba Tri Deputy General Director Appointed on 26 July 2012
Ms. Nguyen Thi Le An 25 April 2013 Member Resigned on 30 June 2017
Mr. Ho Doan Cuong Deputy General Director Appointed on 1 October 2012
Ms. Duong Hoang Quynh Nhu 26 May 2012 Member Resigned on 30 June 2017 Mr. Vo Anh Nhue Deputy General Director Appointed on 1 October 2012
Mr. Ha Van Trung Deputy General Director Appointed in 10 October 2012
Independent
Mr. Nguyen Van Cuu 25 April 2013 Resigned on 30 June 2017 Mr. Hoang Thanh Hai Deputy General Director Appointed on 7 April 2014
Member
Mr. Trinh Van Ty Deputy General Director Appointed on 1 October 2015
BOARD OF SUPERVISION Mr. Le Van Ron Deputy General Director Appointed on 11 July 2017
Mr. Phan Quoc Huynh Deputy General Director Appointed on 25 July 2017
The members of the Bank’s Board of Supervision for the financial year ended 31 December 2017 and at the date of
Ms. Nguyen Ngoc Que Chi Deputy General Director Appointed on 5 September 2017
these consolidated financial statements are as follows:
Mr. Le Duc Thinh Deputy General Director Appointed on 15 September 2017
Date of joiningthe Current Date of appointment/ Mr. Phan Huy Khang General Director Resigned on 3 July 2017
Name Board of Supervision Position reappointment/resignation Standing Deputy
Mr. Nguyen Van Nhan Resigned on 28 July 2017
General Director
Mr. Tran Minh Triet 30 June 2017 Chief Supervisor Appointed on 30 June 2017
Mr. Le Trong Tri Deputy General Director Resigned on 4 April 2017
Mr. Nguyen Van Ly 26 May 2012 Chief Supervisor Resigned on 30 June 2017 Mr. Ha Ton Trung Hanh Deputy General Director Resigned on 30 June 2017
Mr. Nguyen Xuan Vu Deputy General Director Resigned on 6 July 2017
Mr. Ha Ton Trung Hanh 30 June 2017 Member Appointed on 30 June 2017
Resigned on 25 July 2017, appointed as Deputy
Mr. Duong Hoang Quynh Nhu Deputy General Director
Ms. Nguyen Thi Thanh Mai 2 April 2011 Member Reappointed on 30 June 2017 Operations Director
Resigned on 15 September 2017, appointed as
Mr. Le Van Tong 2 April 2011 Member Reappointed on 30 June 2017 Mr. Tran Minh Khoa Deputy General Director
Head of Internal Audit
Mr. Ly Hoai Van Deputy General Director Resigned on 16 October 2017
Mr. Huynh Thanh Giang Chief Accountant Appointed on 1 June 2012
LEGAL REPRESENTATIVE
The legal representative of the Bank was Mr. Phan Huy Khang - General Director, from 1 January 2017 to 2 July 2017.
The legal representative of the Bank is Ms. Nguyen Duc Thach Diem - General Director (acting as General Director from
3 July 2017 to 24 July 2017) from 3 July 2017 to the date of these consolidated financial statements.
AUDITOR
The auditor of the Bank and its subsidiaries is Ernst & Young Vietnam Limited.

150 151
 GENERAL INFORMATION (CONTINUED) REPORT OF THE BOARD OF MANAGEMENT

SIGNIFICANT EVENTS DURING THE YEAR AND AT THE DATE OF THESE CONSOLIDATED FINANCIAL The Board of Management of Saigon Thuong Tin Commercial Joint Stock Bank (“the Bank”) is pleased to present its
STATEMENTS report and the consolidated financial statements of the Bank and its subsidiaries as at and for the year ended 31
December 2017.
On 22 May 2017, the Post-merger Restructuring Plan of Saigon Thuong Tin Commercial Joint Stock Bank for the period
up to 2025 and the Bank’s proposals for financial regimes and resolutions in the Restructuring Plan in relation to THE BOARD OF MANAGEMENT’S RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS
accrued interest receivables, VAMC’s special bonds, bad debts, doubtful assets and investment securities during the The Board of Management is responsible for the consolidated financial statements of each year which give a true
restructuring period was approved by the State Bank of Vietnam according to Decision No. 34/QD-NHNN.Tym and and fair view of the consolidated financial position of the Bank and its subsidiaries, and of the consolidated results of
Official Letter No. 426/NHNN-TTGSNH.Tym. operations and its consolidated cash flows for the year. In preparing these consolidated financial statements, the Board
of Management is required to:
On 22 March 2016, the NBC issued Prakas No. B7-016-117 on Minimum Registered Capital of Banking and Financial
Institutions (“the Prakas”). The Prakas requires commercial bank locally incorporated as foreign subsidiary shall have »» select suitable accounting policies and apply them consistently;
minimum registered capital of at least KHR’000 300,000,000 (approximately US$75 million). Duration of implementation »» make judgments and estimates that are reasonable and prudent;
is within 2 years from the date of the Prakas. Up to the date of these consolidated financial statements, the charter
capital of Sacombank Cambodia Plc. is US$38 million. On 2 October 2017, the Board of Managament issued Resolution »» s tate whether applicable accounting standards have been followed, subject to any material departures disclosed
No. 195/2017/NQ-HĐQT regarding to the approval of capital contribution to Sacombank Cambodia Plc. in compliance and explained in the consolidated financial statements; and
with the Prakas. The Bank is preparing necessary documentations relating to regulatory requirements of the Ministry of
»» repare the consolidated financial statements on going concern basis unless it is inappropriate to presume that
p
Planning and Investment of Vietnam and the State Bank of Vietnam.
the Bank and its subsidiaries will continue their business.
The Board of Management is responsible for ensuring that proper accounting records are kept which disclose, with
reasonable accuracy at any time, the consolidated financial position of the Bank and its subsidiaries and to ensure that
the accounting records comply with the applied accounting system. It is also responsible for safeguarding the assets
of the Bank and its subsidiaries and hence for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
The Board of Management confirmed that it has complied with the above requirements in preparing the accompanying
consolidated financial statements for the year ended 31 December 2017.
STATEMENT BY THE BOARD OF MANAGEMENT
The Board of Management does hereby state that, in its opinion, the accompanying consolidated financial statements
give a true and fair view of the consolidated financial position of the Bank and its subsidiaries as at 31 December
2017, of the consolidated results of their operations and their consolidated cash flows for the year then ended in
accordance with Vietnamese Accounting Standards, Vietnamese Accounting System for Credit Institutions, the official
approvals of the State Bank of Vietnam for the Post-merger Restructuring Plan and the Bank’s proposals for financial
regimes and resolutions in the Restructuring Plan in relation to accrued interest receivables, VAMC’s special bonds, bad
debts, doubtful assets and investment securities during the restructuring period and statutory requirements relevant
to preparation and presentation of the consolidated financial statements.
On behalf of the Board of Management:

Ms. Nguyen Duc Thach Diem
General Director

Ho Chi Minh City, Vietnam

30 March 2018

152 153
 INDEPENDENT AUDITORS’ REPORT
Reference: 60857352/19486298-HN

TO: THE SHAREHOLDERS OF SAIGON THUONG TIN COMMERCIAL JOINT STOCK BANK OPINION

We have audited the accompanying consolidated financial statements of Saigon Thuong Tin Commercial Joint Stock In our opinion, the consolidated financial statements give a true and fair view, in all material respects, of the
Bank (“the Bank”) and its subsidiaries as prepared on 30 March 2018 and set out on pages 156 to 249, which comprise consolidated financial position of the Bank and its subsidiaries as at 31 December 2017, of the consolidated results of
the consolidated balance sheet as at 31 December 2017, the consolidated income statement and the consolidated their operations and their consolidated cash flows for the year then ended in accordance with Vietnamese Accounting
Standards, Vietnamese Accounting System for Credit Institutions, the official approvals of the State Bank of Vietnam for
cash flow statement for the year then ended and the notes thereto.
the Post-merger Restructuring Plan and the Bank’s proposals for financial regimes and resolutions in the Restructuring
Plan in relation to accrued interest receivables, VAMC’s special bonds, bad debts, doubtful assets and investment
THE BOARD OF MANAGEMENT’S RESPONSIBILITY securities during the restructuring period and statutory requirements relevant to preparation and presentation of the
consolidated financial statements.
The Bank’s Board of Management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with Vietnamese Accounting Standards, Vietnamese Accounting System for Credit EMPHASIS OF MATTERS
Institutions, the official approvals of the State Bank of Vietnam for the Post-merger Restructuring Plan and the Bank’s
proposal for financial regimes and resolutions in the Restructuring Plan in relation to accrued interest receivables, As presented in Note 3.4, on 22 May 2017, the Post-merger Restructuring Plan of Saigon Thuong Tin Commercial
VAMC’s special bonds, bad debts, doubtful assets and investment securities during the restructuring period and Joint Stock Bank and the Bank’s proposals for financial regimes and resolutions in the Restructuring Plan in relation to
statutory requirements relevant to preparation and presentation of the consolidated financial statements, and for such accrued interest receivables, VAMC’s special bonds, bad debts, doubtful assets and investment securities during the
internal control as the Board of Management determines is necessary to enable the preparation and presentation of restructuring period was approved by the State Bank of Vietnam according to Decision No. 34/QD-NHNN.Tym and
the consolidated financial statements that are free from material misstatement, whether due to fraud or error. Official Letter No. 426/NHNN-TTGSNH.Tym. Accordingly, the basis for recognition, measurement and presentation of
these items in the consolidated financial statements was made according to the official approvals of the State Bank of
Vietnam for the Post-merger Restructuring Plan and the Bank’s proposals in the Restructuring Plan which are presented
AUDITORS’ RESPONSIBILITY
in relevant notes to the consolidated financial statements.

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted We draw attention to Note 49 - “Contingent liabilities”. On 8 January 2018, a case of deliberately violation of government
our audit in accordance with Vietnamese Standards on Auditing. Those standards require that we comply with ethical regulations on economic management with serious consequences relating to Vietnam Construction Joint Stock Bank
requirements, plan and perform the audit to obtain reasonable assurance about whether the consolidated financial (currently known as One Member Limited Liability Vietnam Construction Bank) was heard at first instance by Ho Chi
statements are free from material misstatement. Minh City People’s Court. The Bank is a party relating to this case because of the credit granted to six borrowers with the
amount of VND1,800,000 million, for which the collaterals were the deposits of Vietnam Construction Joint Stock Bank
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the with the amount of VND1,854,000 million. At contract maturity date, the Bank used the Vietnam Construction Joint
consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the Stock Bank’s deposits to settle for the loans in accordance with the terms of the loan agreements and signed guarantee
assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or contracts. On 7 February 2018, the Trial Panel announced the return of the documents to the Procuracy for further
error. In making those risk assessments, the auditor considers internal control relevant to the Bank and its subsidiaries’ investigation. Up to the date of these consolidated financial statements, the case has been still under investigation,
hence, the outcome of this case has not been determined yet.
preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Bank
Our opinion is not modified in respect of these matters.
and its subsidiaries’ internal control. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made by the Board of Management, as well as evaluating the overall ERNST & YOUNG VIETNAM LIMITED
presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Nguyen Thuy Duong Nguyen Quoc Tuan
Deputy General Director Auditor
Audit Practicing Registration Audit Practicing Registration
Certificate No. 0893-2018-004-01 Certificate No. 1841-2018-004-1

Ho Chi Minh City, Vietnam

30 March 2018

154 155
 CONSOLIDATED BALANCE SHEET B02/TCTD-HN B02/TCTD-HN
as at 31 December 2017 CONSOLIDATED BALANCE SHEET
as at 31 December 2017 (continued)

Ending balance Beginning balance Ending balance Beginning balance

Notes VND million VND million Notes VND million VND million
ASSETS LIABILITIES
Cash, gold and precious stones 5 6,212,662 5,872,975
Borrowings from the State Bank of Vietnam 17 231,484 3,774,694
Balances with central banks 6 3,002,395 8,954,312
Due from and loans to other credit institutions 7,372,820 2,484,336 Due to and borrowings from other credit institutions 12,649,006 8,109,652
Due from other credit institutions 7.1 6,928,778 2,372,080
Due to other credit institutions 18.1 7,131,126 3,341,826
Loans to other credit institutions 7.2 444,594 112,808
Provision for credit losses (552) (552) Borrowings from other credit institutions 18.2 5,517,880 4,767,826
Held-for-trading securities 8 63,250 89,891
Due to customers 19 319,859,587 291,653,101
Held-for-trading securities 63,250 105,624
Provision for held-for-trading securities - (15,733) Grants, entrusted funds and loans exposed to risks 20 90,975 1,404,155
Derivatives and other financial assets 9 20,251 15,422
Valuable papers issued 21 5,601,386 600
Loans and finance leases to customers 220,197,752 196,428,077
Loans and finance leases to customers 10 222,946,630 198,859,665 Other liabilities 6,800,110 4,888,907
Provision for credit losses on loans and finance leases to customers 12.1 (2,748,878) (2,431,588)
Interest and fees payables 4,463,753 3,554,231
Purchased debts 11 643,784 751,748
Purchased debts 648,763 757,528 Deferred tax liabilities 23 23,370 23,419
Provision for credit losses on purchased debts (4,979) (5,780)
Other liabilities 22 2,312,987 1,311,257
Investment securities 13 73,188,580 65,033,141
Available-for-sale securities 13.1 30,007,436 27,589,161 TOTAL LIABILITIES 345,232,548 309,831,109
Held-to-maturity securities 13.2 45,266,699 39,292,300
OWNERS’ EQUITY
Provision for investment securities 13.4 (2,085,555) (1,848,320)
Long-term investments 14 164,184 520,339 Capital 18,166,632 18,166,632
Other long-term investments 14.1 320,934 880,575
Charter capital 18,852,157 18,852,157
Provision for long-term investments 14.2 (156,750) (360,236)
Fixed assets 8,100,996 7,949,366 Fund for capital expenditure 1,121 1,121

Tangible fixed assets 15.1 4,474,616 4,503,810 Share premium 63,612 63,612
Cost 6,720,940 6,856,959
Accumulated depreciation (2,246,324) (2,353,149) Treasury shares (750,911) (750,911)

Intangible fixed assets 15.2 3,626,380 3,445,556 Other capital 653 653
Cost 4,465,775 4,196,740
Accumulated amortization (839,395) (751,184) Reserves 2,549,642 2,430,405

Other assets 49,502,166 43,923,436 Foreign currency translation reserve 233,900 253,985
Receivables 16.1 23,892,436 16,943,694
Interest and fees receivable 16.2 24,742,217 25,336,472 Retained earnings 2,286,118 1,340,912

Deferred tax assets 23 74,226 106,316 TOTAL OWNERS’ EQUITY 24.1 23,236,292 22,191,934
Other assets 16.3 1,306,640 2,171,888
TOTAL LIABILITIES AND OWNERS’ EQUITY 368,468,840 332,023,043
Provision for other assets 16.4 (513,353) (634,934)
TOTAL ASSETS 368,468,840 332,023,043

156 157
 CONSOLIDATED BALANCE SHEET B02/TCTD-HN CONSOLIDATED INCOME STATEMENT B03/TCTD-HN
as at 31 December 2017 (continued) for the year ended 31 December 2017

OFF-BALANCE SHEET ITEMS Current year Previous year

Notes VND million VND million
Ending balance Beginning balance Interest and similar income 26 21,534,204 17,868,402
Notes VND million VND million Interest and similar expenses 27 (16,256,169) (13,847,705)
Guarantees for borrowings 17,766 34,126 Net interest income 5,278,035 4,020,697
Fee and commission income 3,439,285 2,112,833
Commitments on foreign exchange transactions 14,441,368 12,049,416
Fee and commission expenses (815,454) (682,789)
»» Commitments on buying foreign currencies 1,105,091 282,991 Net fee and commission income 28 2,623,831 1,430,044
Net gain from foreign currencies and gold trading 29 343,879 265,028
»» Commitments on selling foreign currencies 842,824 521,615
Net gain/(loss) from dealing of held-for-trading securities 30 13,965 (753)
»» Commitments on swap transactions 12,493,453 11,244,810 Net gain from dealing of investment securities 31 157,524 45,835
Other operating income 323,744 747,616
Letters of credit 7,415,440 9,049,479
Other operating expenses (8,537) (10,652)
Other guarantees 8,314,266 4,543,363 Net gain from other operating activities 32 315,207 736,964
(Loss)/gain from long-term investments 33 (87,155) 32,342
38 30,188,840 25,676,384 TOTAL OPERATING INCOME 8,645,286 6,530,157
Employee expenses (4,108,589) (3,110,710)
Prepared by: Reviewed by: Approved by: Depreciation and amortization charges (414,785) (392,455)
Other operating expenses (1,813,519) (2,175,158)
TOTAL OPERATING EXPENSES 34 (6,336,893) (5,678,323)
Net operating profit before credit loss expenses 2,308,393 851,834
Credit loss expenses 12 (816,589) (696,243)
PROFIT BEFORE TAX 1,491,804 155,591
Current corporate income tax expenses 23 (278,137) (75,531)
Deferred income tax income 23 (32,107) 8,549
Total corporate income tax expenses (310,244) (66,982)
Mr. Luu Van Hoa Mr. Huynh Thanh Giang Ms. Nguyen Duc Thach Diem PROFIT AFTER TAX 1,181,560 88,609
Accountant Chief Accountant General Director Attributable to:
Common shareholders of the Bank 1,000,199 63,213
Ho Chi Minh City, Vietnam Basic earnings per share (VND) 25 555 35
30 March 2018
Prepared by: Reviewed by: Approved by:

Mr. Luu Van Hoa Mr. Huynh Thanh Giang Ms. Nguyen Duc Thach Diem
Accountant Chief Accountant General Director

Ho Chi Minh City, Vietnam

30 March 2018
158 159
 CONSOLIDATED CASH FLOW STATEMENT B04/TCTD-HN CONSOLIDATED CASH FLOW STATEMENT B04/TCTD-HN
for the year ended 31 December 2017 for the year ended 31 December 2017 (continued)

Current year Previous year Current year Previous year

Notes VND million VND million Notes VND million VND million

CASH FLOWS FROM OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES

Interest and similar receipts 22,018,480 17,850,649 Purchase of fixed assets (618,242) (461,400)
Interest and similar payments (15,346,766) (13,362,601)
Proceeds from disposals of fixed assets 186,109 186,373
Net fee and commission receipts 2,593,963 1,477,989
Payments for investing in other entities - (592)
Net receipts from trading of securities, gold and foreign currencies 439,471 299,394
Proceeds from disposal of investments in other entities 382,026 940
Receipts from other activities 257,946 114,618

Recoveries from bad debts written-off previously 50,943 56,751 Dividends received and profit from long-term investments 33 16,449 32,152

Payments to employees and other operating expenses (6,171,859) (5,375,509) Net cash used in investing activities (33,658) (242,527)

Corporate income tax paid during the year 23 (73,348) (38,545) CASH FLOWS FROM FINANCING ACTIVITY
Net cash from operating activities before changes in operating
3,768,830 1,022,746 Dividends distributed to shareholders 24.4 (650) (575)
assets and liabilities
Changes in operating assets (38,097,959) (39,261,903) Cash used in financing activities (650) (575)

Increase in due from and loans to other credit institutions (331,786) (112,256) Net cash flows during the year (1,045,133) 882,846
Increase in investment securities (718,313) (2,299,333)
Cash and cash equivalents at beginning of year 35 17,199,367 16,291,613
Increase in derivatives and other financial assets (4,829) (15,422)
Foreign exchange difference (10,399) 24,908
Increase in loans and finance leases to customers (38,332,111) (37,380,211)
Cash and cash equivalents at end of year 35 16,143,835 17,199,367
Decrease in provision used for compensation of losses (14,907) (36,990)

Decrease in other operating assets 1,303,987 582,309 Prepared by: Reviewed by: Approved by:

Changes in operating liabilities 33,318,304 39,365,105

(Decrease)/increase in borrowings from the central bank (3,774,694) 3,774,694

Increase in due to and borrowings from other credit institutions 3,597,504 5,155,579

Increase in due to customers 27,660,267 30,658,356

Increase in value papers issued 5,600,786 -

Decrease in grants, entrusted funds and loans exposed to risks (139,846) (389,079)
Mr. Luu Van Hoa Mr. Huynh Thanh Giang Ms. Nguyen Duc Thach Diem
Decrease in derivatives and other financial liabilities - (22,853) Accountant Chief Accountant General Director
Increase in other operating liabilities 407,591 259,577

Utilizations of reserves during the year (33,304) (71,169)

Ho Chi Minh City, Vietnam
30 March 2018
Net cash (used in)/from operating activities (1,010,825) 1,125,948

160 161
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

1. BANK INFORMATION 1. BANK INFORMATION (CONTINUED)

Saigon Thuong Tin Commercial Joint Stock Bank (“the Bank”) is a commercial joint stock bank incorporated in Subsidiaries
the Socialist Republic of Vietnam.
As at 31 December 2017, the Bank has six (6) subsidiaries as follows:
Establishment and operation
Operating
The Bank was established and operates in accordance with Banking License No. 0006/NH-GP issued by the Subsidiary License No. Nature of Business Ownership
State Bank of Vietnam on 5 December 1991, Business Registration Certificate No. 0301103908 dated 13 January
1992 and other amendments issued by Ho Chi Minh City Department of Planning and Investment. The Bank’s Sacombank Asset Management Co., Ltd 4104000053 Asset management 100%
operation period is 100 years from 21 December 1991.
Sacombank Leasing Company 04/GP-NHNN Mobilizing capital and leasing activities 100%
On 1 October 2015, Southern Commercial Joint Stock Bank was officially merged into Saigon Thuong Tin
Foreign currency remittance service
Commercial Joint Stock Bank according to Decision No. 1844/QD-NHNN dated 14 September 2015 issued Sacombank Remittance Express Co., Ltd. 90/QĐ-NHNN 100%
and foreign exchange agent
by the State Bank of Vietnam. Accordingly, Saigon Thuong Tin Commercial Joint Stock Bank has received and
inherited all assets and obligations of Southern Commercial Joint Stock Bank since the date of merger. Retailing gold, silver and precious
stones, jewelry; commercial
Sacombank Jewelry Company Limited 4104003812 100%
The Bank is allowed to carry out full range of banking services including mobilizing and receiving short, inspection; gold trading,
medium and long-term deposits from organizations and individuals; providing short, medium and long- manufacturing gold and jewelry
term loans to organizations and individuals based on the Bank’s nature and capacity of the capital resources;
foreign exchange trading; international trade financing services; discount of commercial papers, bonds and Sacombank (Cambodia) Plc. N.27 Banking business 100%
other valuable papers; providing settlement services; operating in monetary market; banking and financial
consultancy; trading in government and corporate bonds; gold trading; cash management services, asset 1858/NHNN-
Sacombank (Lao) Plc. Banking business 100%
preservation, cabin and safer renting; entrustment and trusteeship services; insurance agent; brokerage and TTGSNH
other banking services as allowed by the State Bank of Vietnam.
In addition, Sacombank Jewelry Company Limited owns a below subsidiary:
Charter capital
Operating
The charter capital of the Bank as at 31 December 2017 amounted to VND18,852,157 million (31 December Subsidiary License No. Nature of Business Ownership
2016: VND18,852,157 million).
Trading in machinery and
Network Hypertek Company Limited 0309998954 equipment, providing IT solutions 100%
and services
The Bank’s head office is located at 266 - 268 Nam Ky Khoi Nghia Street, District 3, Ho Chi Minh City. As at 31
December 2017, the Bank had one (1) Head Office, one hundred and nine (109) branches located in cities and Pursuant to Resolution No. 234/2017/NQ-HDQT of Saigon Thuong Tin Commercial Joint Stock Bank (the Owner),
provinces in Vietnam, four hundred fourty three (443) domestic transaction offices. on 29 December 2017, Sacombank Jewelry Co., Ltd’s General Director issued Decision No. 138/2017/QD-TGD
to dissolve Hypertek Company Limited due to ineffective operation. Up to the date of these consolidated
financial statements, Hypertek Company Limited has been under procedures to complete its dissolution with
taxation authorities and other authorities.

Employees

The Bank and its subsidiaries have 18,535 employees as at 31 December 2017 (31 December 2016: 17,079
employees).

162 163
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

2. FISCAL YEAR AND ACCOUNTING CURRENCY 3. APPLIED ACCOUNTING STANDARDS AND SYSTEM (CONTINUED)

2.1 Fiscal year 3.2 Basis of preparation (continued)

The Bank and its subsidiaries’ fiscal year starts on 1 January and ends on 31 December. The accompanying consolidated financial statements have been prepared using accounting principles,
procedures and reporting practices generally accepted in Vietnam. Accordingly, the accompanying
2.2 Currency unit used in accounting consolidated balance sheet, the consolidated income statement, the consolidated cash flow statement and
the notes to the consolidated financial statements and their utilization are not designed for those who are not
The currency used in preparing financial statements of the Bank and its subsidiaries is Vietnam dong (“VND”).
According to Circular No. 49/2014/TT-NHNN, for the purpose of preparing these consolidated financial informed about Vietnam’s accounting principles, procedures and practices and furthermore are not intended
statements, the data is rounded to millions and expressed in millions of Vietnam dong (“VND million”). to present the consolidated financial position and results of consolidated operations and consolidated cash
flows in accordance with accounting principles and practices generally accepted in countries other than
3. APPLIED ACCOUNTING STANDARDS AND SYSTEM Vietnam.

3.1 Statement of compliance Items which are not presented in the consolidated financial statements in accordance with Decision No.
16/2007/QĐ-NHNN dated 18 April 2007 and Circular No. 49/2014/TT-NHNN dated 31 December 2014 issued
The Board of Management confirms that the accompanying consolidated financial statements have been by the State Bank of Vietnam indicate nil balance.
prepared in accordance with Vietnamese Accounting Standards, Vietnamese Accounting System for Credit
Institutions, the official approvals of the State Bank of Vietnam for the Post-merger Restructuring Plan and
3.3 Basis of consolidation
the Bank’s proposals for financial regimes and resolutions in the Restructuring Plan in relation to accrued
interest receivables, VAMC’s special bonds, bad debts, doubtful assets and investment securities during the
The consolidated financial statements include the financial statements of the Bank and of its subsidiaries as at
restructuring period and statutory requirements relevant to preparation and presentation of the consolidated
financial statements. 31 December 2017. The financial statements of subsidiaries are fully consolidated from the date of acquisition,
being the date on which the Bank obtains control and continue to be consolidated until the date that control
3.2 Accounting standards and system ceases. The control exists when the Bank has the power, directly or indirectly, to govern the financial and
operating policies of an entity so as to obtain benefits from its.
The consolidated financial statements of the Bank and its subsidiaries have been prepared in accordance
with the Accounting System applicable to credit institutions required under Decision No. 479/2004/QD-NHNN The financial statements of the subsidiaries are prepared for the same reporting period as the Bank, using
issued on 29 April 2004 and Circular No. 10/2014/TT-NHNN dated 20 March 2014 amending and supplementing consistent accounting policies.
Decision No. 479/2004/QD-NHNN; the financial reporting regime applicable to credit institutions required
under Decision No. 16/2007/QD-NHNN dated 18 April 2007 and Circular No. 49/2014/TT-NHNN amending All intra-group balances, income and expenses and unrealized gains or losses resulting from intra-group
and supplementing a number of articles of Decision No. 16/2007/QD-NHNN, the official approvals of the State transactions are eliminated in full.
Bank of Vietnam for the Post-merger Restructuring Plan and the Bank’s proposals for financial regimes and
resolutions in the Restructuring Plan in relation to accrued interest receivables, VAMC’s special bonds, bad Non-controlling interests represent the portion of profit or loss and net assets of the subsidiaries not held
debts, doubtful assets and investment securities during the restructuring period as presented at Note 3.4 and by the Bank and are presented separately in the consolidated income statement and within equity in the
Vietnamese Accounting Standards issued by the Ministry of Finance as per: consolidated balance sheet, separately from parent shareholders’ equity.

»» ecision No. 149/2001/QD-BTC dated 31 December 2001 on the Issuance and Promulgation of Four
D The effect of changes in the ownership in a subsidiary without losing control is accounted for in the
Vietnamese Standards on Accounting (series 1); undistributed profit after tax/accumulated loss.
»» Decision No. 165/2002/QD-BTC dated 31 December 2002 on the Issuance and Promulgation of Six
Vietnamese Standards on Accounting (series 2);
»» Decision No. 234/2003/QD-BTC dated 30 December 2003 on the Issuance and Promulgation of Six
Vietnamese Standards on Accounting (series 3);
»» Decision No. 12/2005/QD-BTC dated 15 February 2005 on the Issuance and Promulgation of Six Vietnamese
Standards on Accounting (series 4); and
»» Decision No. 100/2005/QD-BTC dated 28 December 2005 on the Issuance and Promulgation of Four
Vietnamese Standards on Accounting (series 5).

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3. APPLIED ACCOUNTING STANDARDS AND SYSTEM (CONTINUED) 3. APPLIED ACCOUNTING STANDARDS AND SYSTEM (CONTINUED)

3.4 Main contents of the Post-merger Restructuring Plan as approved by the State Bank of Vietnam 3.7 Changes in accounting policies and disclosures

The accounting policies used by the Bank and its subsidiaries in preparing these consolidated financial
On 22 May 2017, the Post-merger Restructuring Plan of Saigon Thuong Tin Commercial Joint Stock Bank for statements are consistent with those used in preparing the consolidated financial statements for the year
the period up to 2025 and the Bank’s proposals for financial regimes and resolutions in the Restructuring Plan ended 31 December 2016, except for the following changes in the accounting policies.
in relation to accrued interest receivables, VAMC’s special bonds, bad debts, doubtful assets and investment
securities during the restructuring period was approved by the State Bank of Vietnam according to Decision Decree No. 93/2017/ND-CP on financial regime applicable to credit institutions, foreign bank branches and financial
No. 34/QD-NHNN.Tym and Official Letter No. 426/NHNN-TTGSNH.Tym. These proposals are summarized as supervision and evaluation of efficiency of State capital investment at credit institutions with State owning 100% of
follows: charter capital and State-owned credit institutions.

»» ccrued interest receivables: The Bank is permitted to block some accrued interest receivables of bad
A On 7 August 2017, the Government promulgated Decree No. 93/2017/ND-CP on the financial regime
debts and doubtful assets in its consolidated financial statements as at 31 December 2015 and make an applicable to credit institutions, foreign bank branches, and financial supervision and efficiency evaluation
annual amortization of such blocked interest into the profit and loss based on its financial capacity within of State capital investment in credit institutions with State owning 100% of charter capital and State-owned
a maximum period of 10 years according to its Restructuring Plan (Note 16.2). credit institutions (“Decree 93”). Decree 93 replaces Decree No. 57/2012/ND-CP dated 20 July 2012 of the
Government, and takes effect on 25 September 2017, except for regulations on the efficiency evaluation of
»» rovision for credit losses: The Bank is permitted to make and allocate provision for credit losses based on
P State investment in joint-stock credit institutions with State owning over 50% of charter capital.
its financial capacity during the restructuring period (Note 10.1 and Note 12).
Decree 93 supplements the regulations on capital adequacy, income, expenses, accounting currency and the
»» S pecial bonds issued by VAMC: The Bank is permitted to make and allocate provision for VAMC’s special distribution order of profit after corporate income tax.
bonds based on its financial capacity during the term of the bonds (Note 12).
3.8 Issued accounting policies which have not been yet effective
»» oubtful assets: The Bank is required to set up specific processes and schedules to implement the fast
D
resolutions of foreclosed assets for debt recoveries in order to recover its capital. It is allowed to sell its On 29 December 2017, the SBV issued Circular No. 22/2017/TT-NHNN amending and supplementing a number
bad debts and doubtful assets to organizations and individuals at market prices and make an annual of articles of chart of account system applicable to credit institutions issued in connection with Decision No.
amortization of losses arising from sales of these debts into its profit and loss based on its financial capacity 479/2004/QD-NHNN dated 29 April 2004 and the financial reporting regime applicable to credit institutions
within a maximum period of 5 years from the selling date (Note 16). required under Decision No. 16/2007/QD-NHNN dated 18 April 2007 by the Governor of the SBV (“Circular 22”).

»» S ecurities investments in excess of 11% of the investee’s charter capital and cross ownership: The Bank’s is Circular 22 includes the following amendments:
approved to apply the proposed schedule in the Restructuring Plan for resolution of these investments to
»» mending and supplementing the guidances on the accounting treatment for foreign exchange and
A
comply with current regulations (Note 13).
gold transactions;

3.5 Accounting estimates and assumptions »» Amending a few accounts in the chart of account system applicable to credit institutions;

The preparation of the consolidated financial statements requires the Board of Management makes estimates »» mending the guidances on the accounting treatment for some accounts in the chart of account system
A
and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities. applicable to credit institutions; and
These estimates and assumptions also affect the income, the expenses and provisions. Such estimates are
»» mending and supplementing the guidances on the financial reporting regime applicable to credit
A
based on assumptions involving varying degrees of subjectivity and uncertainty. Therefore, actual results may
institutions.
differ from estimates, resulting in future changes to such items.
Circular 22 will take effect on 1 April 2018.
3.6 Going concern
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Board of Management has taken all necessary measures to maintain the Bank and its subsidiaries’ operation
4.1 Cash and cash equivalents
continuity, including the recovery of matured debts and bad debts, maintenance of existing customer
deposits and finding new customers, strict control of operating expenses, etc. Simultaneously, the Board of Cash and cash equivalents comprise cash on hand, gold, precious stones, balance with the State Bank of
Management has also implemented the bad debt recovery and restructuring according to the Merger Plan Vietnam (“the SBV”), treasury notes and short-term valuable papers which can be discounted with the SBV, due
and the Restructuring Plan as approved by the State Bank of Vietnam. The Board of Management believes that from and loans to other credit institutions on demand or with an original maturity of less than three months
with the implementation of the above measures, the Bank and its subsidiaries will continue to operate in the from the transaction date and securities investments with maturity of less than three months from purchase
definite future. As a result, these consolidated financial statements have been prepared on the going concern dates which are readily convertible into certain amounts of cash and subject to insignificant risks of change in
assumption basis value since the purchase date.

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4.2 Balances with and loans to other credit institutions 4.5 Provision for credit losses

Balances with and loans to other credit institutions are presented at the principal amounts. The classification Provision for due from and loans to other credit institutions, purchased and entrusted unlisted corporate
of credit risks for balances with and loans to other credit institutions and the corresponding provision are bonds, originated and entrusted loans and finance leases to customers (collectively referred as “debts”) is
made in accordance with Circular No. 02/2013/TT-NHNN issued by the SBV on 21 January 2013 on asset made in compliance with the official approvals of the State Bank of Vietnam for the Post-merger Restructuring
classification, risk provisioning and use of provision against credit risks by credit institutions and foreign bank Plan of Saigon Thuong Tin Commercial Joint Stock Bank and the Bank’s proposals for financial regimes and
branches (“Circular 02”) and Circular No. 09/2014/TT-NHNN issued by the SBV on 18 March 2014 amending and resolutions in the Restructuring Plan in relation to accrued interest receivables, VAMC’s special bonds, bad
supplementing a number of articles of Circular 02 (“Circular 09”). debts, doubtful assets and investment securities during the restructuring period (Note 3.4).

Accordingly, the Bank and its subsidiaries make specific provision for balances with and loans to other credit The classification of due from and loans to other credit institutions, purchased and entrusted unlisted
institutions (except for demand deposits) in accordance with accounting policies presented in Note 4.5. corporate bonds, originated and entrusted loans and finance leases to customers is made in accordance with
the quantitative method prescribed in Article 10 of Circular 02/2013/TT-NHNN (“Circular 02”) and Circular
According to Circular 02, the Bank its subsidiaries are not required to make general provision for balance with 09/2014/TT-NHNN amended and supplemented some articles of Circular 02 (“Circular 09”) which is presented
and loans to other credit institutions. as follows:

4.3 Purchased debts

Group Description
Purchased debts are recognized at the amount which has been paid for debts purchased and classified 1 Current (a) Current debts are assessed as fully and timely recoverable for both principals and
into the group of risk which is not lower than the group of debts classified before purchase. Interest receipt interests; or
including the interest incurred before the purchase is recognized using the following principle: (i) reduce
the value of purchased debts by the amount of interest incurred before the purchase date, (ii) recognize the (b) Debts are overdue for a period of less than 10 days and assessed as fully recoverable
interest income in the period by the amount incurred after the purchase date. for both overdue principals and interests, and fully and timely recoverable for both
remaining principals and interests.
The Bank and its subsidiaries classify loan group and makes provision against credit risks for purchased debts in
accordance with regulations on setting up risk provisions and using of provisions against credit risks presented 2 Special (a) Debts are overdue for a period of between 10 days and 90 days; or
in Note 4.5. Mention
(b) Debts which the repayment terms are restructured for the first time.
4.4 Loans and finance leases to customers
3 Sub- (a) Debts are overdue for a period of between 91 days and 180 days; or
Loans, advances and finance leases to customers are disclosed and presented at the principal amounts standard
outstanding at the end of the financial year. (b) Debts which the repayment terms are extended for the first time; or

(c) Debts which interests are exempted or reduced because customers do not have
sufficient capability to repay all interests under credit contracts; or

(d) Debts under one of the following cases which have not been recovered in less
than 30 days from the date of the recovery decision:

»» ebts made incompliance with Clause 1, 3, 4, 5, 6 under Article 126 of Law on

D
Credit Institutions; or

»» ebts made incompliance with Clause 1, 2, 3, 4 under Article 127 of Law on

D
Credit Institutions; or

»» ebts made incompliance with Clauses 1, 2 and 5 under Article 128 of Law on
D
Credit Institutions.

(e) Debts are required to be recovered according to regulatory inspection conclusions.

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

4.5 Provision for credit losses (continued) 4.6 Loans sold to Vietnam Asset Management Company (“VAMC”)

The Bank and its subsidiaries sell loans to VAMC at the carrying amount in accordance with Decree No. 53/2013/
Group Description
ND-CP effective from 9 July 2013 on “Establishment, structure and operations of Vietnam Asset Management
4 Doubtful (a) Debts are overdue for a period of between 181 days and 360 days; or Company”, Circular No. 19/2013/TT-NHNN “Regulations on selling, purchasing and writing-off of bad debts
of Vietnam Asset Management Company”, Circular No. 14/2015/TT-NHNN and Circular No. 08/2016/TT-
(b) Debts which the repayment terms are restructured for the first time but still overdue NHNN amending and supplementing Circular 19/2013/TT-NHNN and Official Letter No. 8499/NHNN-TCKT on
for a period of less than 90 days under that restructured repayment term; or “Accounting guidance on selling and purchasing of loan transactions between VAMC and credit institutions”.
Accordingly, the selling price is the outstanding loan balance minus (-) unused balance of specific provision
(c) Debts which the repayment terms are restructured for the second time; and is received in the form of special bonds issued by VAMC.

(d) Debts are specified in point (d) of Loan group 3 and overdue for a period of between Upon the sale of loans to VAMC, the Bank and its subsidiaries write off loan balances and corresponding
30 days and 60 days after decisions of recovery have been issued; or specific provisions and recognizes special bonds issued by VAMC at par value determined as the difference
between the loan balance sold and corresponding specific provision. When receiving back loans previously
(e) Debts are required to be recovered according to regulatory inspection conclusions sold to VAMC, the Bank and its subsidiaries use annual specific provisions for special bonds to write-off such
but still outstanding with an overdue period up to 60 days since the recovery date as bad debts. The difference between provision for VAMC bonds and the remaining outstanding balance of loan/
required by regulatory inspection conclusions. bond will be recognized as in “Other income” in the consolidated income statement.

5 Loss (a) Debts are overdue for a period of more than 360 days; or 4.7 Held-for-trading securities

(b) Debts which the repayment terms are restructured for the first time but still overdue Held-for-trading securities include debt, equity and other securities acquired by the Bank and its subsidiaries
for a period of 90 days or more under that first restructured repayment term; or for resale in the short-term period for benefits from price variance.

(c) Debts which the repayment terms are restructured for the second time but still Held-for-trading securities are initially recognized at cost and presented at cost minus provision for held-for-
overdue under that second restructured repayment term; or trading securities in subsequent periods. Gains or losses from the disposal of held-for-trading securities are
recognized in the consolidated income statement.
(d) Debts which the repayment terms are restructured for the third time or more,
regardless of being overdue or not; or Interest earned and dividends received during the holding period of held-for-trading securities are recognized
in the consolidated income statements on a cash basis.
(e) Debts are specified in point (d) of Loan group 3 and overdue for a period of more than
60 days after decisions on recovery have been issued; or Held-for-trading securities are provisioned for impairment when the carrying amount is higher than the market value
determined in accordance with Circular No. 228/2009/TT-BTC dated 7 December 2009 (“Circular 228”) and Circular
(f) Debts are required to be recovered under regulatory inspection conclusions but still 89/2013/TT-BTC dated 28 June 2013 (“Circular 89”) amended and supplemented some articles of Circular 228.
outstanding with an overdue period of more than 60 days since the recovery date as
required by regulatory inspection conclusions; or »» T he market values of listed securities are determined based on the quoted prices on the stock markets
(which are closing prices on the stock exchange) as at the financial year-end date.
(g) Debts of credit institutions under special control as announced by the SBV, or debts of »» T he market values of unlisted shares which have been registered on the unlisted public companies market
foreign bank branches which capital and assets are blocked. (UPCoM) are the average prices traded on the system as at the financial year-end date.
»» T he market values of unlisted shares which have not been registered on the unlisted public companies
market (UPCoM) are the average public price quotations obtained from at least three (3) reputable and
large securities companies in the market.
If a customer has more than one debt at the Bank and its subsidiaries among which outstanding debts is
classified into a higher risk group, the entire remaining debts shall be classified into the higher risk group. »» Other securities that have no quoted prices are carried at cost.

When the Bank and its subsidiaries participate in a syndicated loan as a participant, they classify such loans Provision for held-for-trading securities is recognized in the “Net gain/(loss) from dealing of held-for-trading
(including syndicated loans) into a higher risk group between the Bank and its subsidiaries and the leading securities” in the consolidated income statement.
bank’s assessment.
For corporate bonds that have not been listed on the stock exchange or have not been registered for trading
on the trading market of unlisted public companies, the provision is calculated as described in Note 4.5.

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

4.8 Investment securities 4.8 Investment securities (continued)

4.8.1 Held-to-maturity securities (continued)
4.8.1 Held-to-maturity securities
(ii) Other held-to-maturity securities
(i) Special bonds issued by VAMC
Other held-to-maturity investments include debt securities acquired by the Bank and its subsidiaries
Special bonds issued by VAMC are valuable papers with specific terms issued by VAMC to purchase bad for earning interest and which the Bank and its subsidiaries have the intention and ability to hold to
debts from the Bank. Special bonds are recognized at par value at the transaction date and continuously maturity. Held-to-maturity investments have fixed or determinable payments and maturity date. In case
recorded at par value in subsequent periods. Par value of special bonds relating to the bad debts sold is these securities are sold before maturity, they will be reclassified to trading securities or available-for-sale
the difference between the outstanding loan balance and unused balance of specific provision of loan. securities.

Specific provision for VAMC special bonds is calculated annually in accordance with Circular No. 19/2013/ Debt securities are initially recognized at par value at the purchase date. The accrued interest income
TT-NHNN regulating the purchase, sale and settlement of bad debts with VAMC, Circular No. 14/2015/ (for debt securities with interest payment in arrears) or deferred interest income (for debt securities
TT-NHNN dated 28 August 2015 and Circular No. 08/2016/TT-NHNN dated 16 June 2016 amending and with interest payment in advance) is recognized in a separate account. Discount/premium which is the
supplementing some clauses of Circular No. 19/2013/TT-NHNN. difference between the cost and the amount including par value plus (+) accrued interest income (if any)
or minus (-) deferred interest income (if any) is also recorded in a separate account.
In accordance with Circular No. 14/2015/TT-NHNN and Circular No. 08/2016/TT-NHNN, each year within 5
consecutive working days prior to the date of special bonds, credit institutions which have bad debts sold In subsequent periods, these securities are continuously stated at par value. The discount/premium (if
to VAMC are obliged to fully make a minimum specific provision of the mentioned year for each special any) is amortized to the consolidated income statement on the straight-line basis over the remaining
bond using the below formula: term of securities. Interest received in arrears is recognized as a deduction in the value of such securities
and the corresponding accrued interest receivable for the portion incurred prior to the purchase date and
recognized into the income of the Bank and its subsidiaries under the cumulative method for the portion
X(m)= Y x m – (Zm + Xm-1) incurred after the purchase date. Interest received in advance is amortized to the interest income from
n investment securities on a straight-line basis over the term of investment securities.
In which:
Periodically, these securities are subject to review for impairment. For corporate bonds that have not been
- X(m) is the minimum provision for special bonds in the m year; th listed on the stock exchange or have not been registered for trading on the trading market of unlisted public
companies, provision is made as described in Note 4.5. For other held-to-maturity securities, provision is
- Xm-1 is the accumulated specific provision for special bonds in the m-1th year; made when there is certain evidence of impairment. In case the market value cannot be determined, no
- Y is the par value of special bonds; provision is calculated. Provision for impairment is recognized into the consolidated income statement in
“Net gain/(loss) from dealing of investment securities”.
- n is the term of special bonds (years);
- m is the number of years from the bond issuance date to the provision date; 4.8.2 Available-for-sale securities

- Zm is the accumulated bad debt recoveries at the provision date (mth year). Credit institutions should Available-for-sale securities include debt and equity securities, which are held by the Bank and its
co-operate with VAMC to determine the recovery of the bad debts. subsidiaries for the purpose of investment and available-for-sale, not regularly traded but can be sold when
there is a benefit. For equity securities, the Bank and its subsidiaries are neither the founder shareholder
At the date the special bond is settled, the interest receipt from recovery of the debt is recorded in “Interest nor strategic partner and do not have the ability to place certain influence in establishing and making the
and similar income”. financial and operating policies of the investees through a written agreement on assignment of its officers
to the Board of Directors/Management.
If (Zm + Xm-1) ≥ (Y/n x m), the specific provision (X(m)) will be zero (0).
Available-for-sale equity securities are initially recognized at cost at the purchase date and continuously
presented at cost in subsequent periods. Periodically, available-for-sale investments are subject to review
Specific provision for each special bond is recognized in the consolidated income statement in “Provision
for impairment. Provision for impairment of securities is made when carrying value is higher than market
expenses for credit losses”. General provision is not required for the special bonds.
value in compliance with Circular 228 and Circular 89. In case market prices of securities are not available
or cannot be determined reliably, no provision is calculated. Provision for impairment is recognized into
Provision for VAMC special bonds is made in compliance with the official approvals of the State Bank of
the consolidated income statement in “Net gain/(loss) from dealing of investment securities”.
Vietnam for the Post-merger Restructuring Plan of Saigon Thuong Tin Commercial Joint Stock Bank for
the period up to 2025 and the Bank’s proposals for financial regimes and resolutions in the Restructuring Available-for-sale debt securities are recognized, measured, reviewed for impairment loss and made
Plan in relation to accrued interest receivables, VAMC’s special bonds, bad debts, doubtful assets and provision similarly to held-to-maturity securities as presented in Note 4.8.1 (ii).
investment securities during the restructuring period (Note 3.4).

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4.9 Repurchase and reverse repurchase agreements 4.12 Intangible fixed assets

Intangible fixed assets are stated at cost less accumulated amortization.

Securities sold under agreements to repurchase at a specific date in the future are recognized in the
consolidated financial statements. The corresponding cash payment is recognized as a borrowing in the The cost of an intangible fixed asset comprises any directly attributable costs of bringing the asset to working
consolidated balance sheet and the difference between the purchase price and resale price is amortized on a condition for its intended use.
straight line basis to the separate income statement over the term of the agreement.
Expenditures for additions, improvements and renewals are added to the carrying amount of the assets and
Securities purchased under agreements to resell at a specific date in the future are recognized in the other expenditures are charged to the consolidated income statement as incurred.
consolidated financial statements. The corresponding cash payment is recognized as an investment in the
When intangible fixed assets are sold or retired, any gain or loss resulting from their disposal (the difference
consolidated balance sheet and the difference between the purchase price and resale price is amortized on a
between the net disposal proceeds and the carrying amount) is included in the consolidated income statement.
straight line basis to the consolidated income statement over the term of the agreement.
4.13 Leases
Provision for securities purchased with commitment for resale in the future is made in compliance with
the official approvals of the State Bank of Vietnam for the Post-merger Restructuring Plan of Saigon The determination of whether an arrangement is, or contains a lease is based on the substance of the
Thuong Tin Commercial Joint Stock Bank and the Bank’s proposals for financial regimes and resolutions arrangement at inception date and requires an assessment of whether the fulfilment of the arrangement is
in the Restructuring Plan in relation to accrued interest receivables, VAMC’s special bonds, bad debts, dependent on the use of a specific asset and the arrangement conveys a right to use the asset.
doubtful assets and investment securities during the restructuring period (Note 3.4).
A lease is classified as a finance lease whenever the terms of the lease transfer substantially all the risks and
4.10 Long-term investments rewards of ownership of the asset to the lessee. All other leases are classified as operating leases.

4.13.1 The Bank and its subsidiaries as the lessees

Other long-term investments represent investments in other entities which have maturity over 1 year. These
investments are initially recorded at cost at the investment date and at cost less provision for diminution in Rentals under operating leases are charged to the consolidated income statement on a straight-line basis over
value of investments in subsequent. the term of the lease.

Provision for long-term investments is made when the investees incur net loss unless losses have been 4.13.2 The Bank and its subsidiaries as the lessors
previously projected in the initial business plan prior to the investment is made. For an investment in a listed
The Bank and its subsidiaries recognize the value of financial lease assets as receivables in the consolidated
share or a fair value of an investment can be reliably determined, provision is made based on the market value
balance sheet using the net investment value in the finance lease contract. Receivables from finance leases
(similar to the provision for trading securities).
are recognized as principal receivables and financial income from the lessor’s investments and services. The
Bank and its subsidiaries allocate financial income over the lease term based on the fixed rate of interest and
For long-term investments which cannot be determined at the financial year-end date, provision for
the net finance lease investment.
impairment is calculated as total invested amount of all the parties in the entity (at par value) minus (-) owner’s
equity multiplied (x) with the Bank and its subsidiaries’ ownership (at par value) at the investee according to The Bank and its subsidiaries recognize operating lease assets on the consolidated balance sheet. Revenue
Circular 228 and Circular 89. from operating leases is recognized on a straight-line basis over the lease term, regardless of the payment
method. Operating lease expenses, including depreciation of lease property, are recognized as an expense
Provision is reversed when the recoverable amount of the investment increases after the provision is made. when incurred.
Provision is reversed to the extent that the carrying amount of the investments does not exceed the carrying
amount of the investment when no provision is recognized. 4.14 Depreciation and amortization

4.11 Tangible fixed assets Depreciation and amortization of tangible and intangible fixed assets is calculated on a straight-line basis over
the estimated useful life of the assets as follows:
Tangible fixed assets are stated at cost less accumulated depreciation. Buildings and structure 5 - 50 years
Machines and equipment 3 - 15 years
The cost of a tangible fixed asset comprises any directly attributable costs of bringing the fixed asset to working Transportation vehicles 6 - 10 years
condition for its intended use. Other tangible assets 4 - 25 years
Land use rights with definite term 11 - 61 years
Expenditures for additions, improvements and renewals are added to the carrying amount of the assets and Computer software 3 - 5 years
other expenditures are charged to the consolidated income statement as incurred.
Infinite land use rights granted by the government are not amortized. Definite term land use rights are
When tangible fixed assets are sold or retired, any gain or loss resulting from their disposal (the difference amortized over the term of use.
between the net disposal proceeds and the carrying amount) is included in the consolidated income statement.

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

4.15 Receivables 4.20 Equity

4.15.1 Receivables classified as credit risk bearing assets
Charter capital
Receivables classified as credit risk bearing assets are recognized at cost. Classification and provision for
doubtful receivables are made by the Bank and its subsidiaries as presented in Note 4.5. Contributed capital from issuance of shares is recorded into to charter capital account at par value.

4.15.2 Other receivables Share premium

Receivables other than receivables classified as credit risk bearing assets are initially recognized at cost.
The Bank and its subsidiaries record the difference between the par value and issue price of shares if the issue
Provision for receivables is set up based on the aging schedule of overdue receivables or expected losses price is higher than par value, and the difference the between price of repurchasing of treasury stocks and the
which may occur in case where the receivables has not been due for payment but an economic organization re-issue price of treasury stocks into the share premium account.
is bankrupted or liquidated; or individual debtor is missing, run away, being prosecuted, under a trial or serving
sentences or dead. Provision expense occurred will be recognized into “Operating expenses” during the year. Treasury shares

For overdue receivables, the Bank and its subsidiaries make provision in compliance with Circular 228 and Own equity instruments which are reacquired (treasury shares) are recognized at cost and deducted from
Circular 89 as follows: equity. No gain or loss is recognized in profit or loss upon purchase, sale, issue or cancellation of the Bank’s
own equity instruments.
Overdue age Provision rate
4.21 Income and expense recognition
From over six months up to less than one year 30%
From one year up to less than two years 50% Interest income and expenses are recognized in the consolidated income statement on an accrual basis. The
From two years up to less than three years 70% recognition of accrued interest income is suspended when a loan is classified in groups 2 to 5 according to
Circular 02 and Circular 09 except for some accrued interest receivables as approved in the official approvals of
From three years and above 100%
the State Bank of Vietnam for the Post-merger Restructuring Plan and the Bank’s proposals for financial regimes
and resolutions in the Restructuring Plan in relation to accrued interest receivables, VAMC’s special bonds, bad
4.16 Prepaid expenses debts, doubtful assets and investment securities during the restructuring period (Note 3.4). Suspended interest
Prepaid expenses are reported as short-term or long-term prepaid expenses on the consolidated balance income is reversed and monitored off-balance-sheet and recognized in the consolidated income statement
sheet and amortized over the period for which the amount are paid or the period in which economic benefit upon actual receipt.
are generated in relation to these expenses.
Fees and commissions are recognized in the consolidated income statement when services are provided.
4.17 Due to other credit institutions, due to customers and valuable papers issued
Revenue from investments in securities is determined based on the difference between the selling price and
Due to other credit institutions, due to customers and value papers issued are disclosed at the principal the average cost of securities sold.
amounts outstanding at the date financial year-end date.
Cash dividends from equity investments are recognized in the consolidated income statement when the right
4.18 Payables and accruals
to receive the payment is established. For stock dividends and bonus shares, only the number of shares is
Payables and accruals are recognized for amounts to be paid in the future for goods and services received, updated and no dividend income is recognized in the consolidated income statement.
whether or not billed to the Bank and its subsidiaries.
Income and expenses from the sale of debts are recognized in accordance with Circular No. 09/2015/TT-NHNN issued
4.19 Science and Technology Development Funds by the SBV providing guidance on the purchase and sale of debts of credit institutions and foreign bank branches.
According to relevant regulations and Official Letter No. 10186/NHNN-TCKKT dated 24 December 2009 of
the State Bank of Vietnam, the Science and Technology Development Funds is recognized immediately
in management expenses when the fund is set up and credited to a separate account in other payables.
Subsequently, the Fund will be used for fixed asset or operating expenses that this expense is allowed to use
the fund to offset.

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as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

4.22 Foreign currency transactions 4.23 Corporate income tax (“CIT”) (continued)

In accordance with the accounting system of the Bank, all transactions are recorded in original currencies. 4.23.2 Deferred tax
Monetary assets and liabilities denominated in foreign currencies at year-end are translated into VND using
exchange rates ruling at the balance sheet date (see list of exchange rates of applicable foreign currencies Deferred tax is provided for temporary differences at the consolidated balance sheet date between the tax
against VND as at 31 December 2017 in Note 50). Income and expenses arising in foreign currencies during the base of assets and liabilities and their carrying amount recorded in financial reporting purposes.
year are converted into VND at real rates ruling at the transaction dates. Unrealized foreign exchange differences
arising from the translation of monetary assets and liabilities at the balance sheet date are recognized in the Deferred tax liabilities are recognized for all taxable temporary differences, except:
consolidated income statement.
»» here the deferred tax liability arises from the initial recognition of an asset or liability in a transaction
W
The currency used in separate financial statements of foreign subsidiaries (including Sacombank (Cambodia) which at the time of the related transaction affects neither the accounting profit nor taxable profit or loss;
Plc. and Sacombank (Lao) Plc.) are US dollar and Lao KIP. The separate financial statements of these overseas
subsidiaries are converted based on the principles to be consolidated in the group as follows: »» I n respect of taxable temporarily differences associated with investments in subsidiaries and associates,
and interests in joint ventures where timing of the reversal of the temporary difference can be controlled
a. Assets and liabilities (both monetary and non-monetary items) of foreign subsidiaries are translated using and it is probable that the temporary difference will not reverse in the foreseeable future.
exchange rates ruling at the balance sheet date;
Deferred tax assets are recognized for all deductible temporary differences, carried forward unused tax credit
b. Revenues, other incomes and expenses of foreign subsidiaries are translated at the average exchange and unused tax losses, to the extent that it is probable that taxable profit will be available against deductible
rate; temporary differences, carried forward unused tax credit and unused tax losses can be recognized, except:
c. Foreign exchange differences arising from the translation of financial statements are recognized in the
foreign exchange differences in the owners’ equity. »» here the deferred tax asset in respect of deductible temporary difference which arises from the
W
initial recognition of an asset or liability which at the time of the related transaction, affects neither the
4.23 Corporate income tax (“CIT”) accounting profit nor taxable profit or loss;

»» I n respect of deductible temporarily differences associated with investments in subsidiaries, associates,

4.23.1 Current income tax
and interests in joint ventures, deferred tax assets are recognized only to the extent that it is probable that
the temporary differences will reverse in the foreseeable future and taxable profit will be available against
Current income tax assets and liabilities for the current and prior years are measured at the amount expected
which the temporary differences can be utilized.
to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the
amount are those that are effective as at the consolidated balance sheet date.
The carrying amount of deferred income tax assets is reviewed at each separate balance sheet date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or
Current income tax is charged or credited to the consolidated income statement, except when it relates to
part of the deferred income tax asset to be utilized. Previously unrecognized deferred income tax assets are
items recognized directly to equity, in which case the current income tax is also dealt with in equity.
re-assessed at each separate balance sheet date and are recognized to the extent that it has become probable
that future taxable profit will allow the deferred tax assets to be recovered.
Current income tax assets and liabilities are offset when there is a legally enforceable right for the Bank and
its subsidiaries to set off current tax assets against current tax liabilities and when the Bank and its subsidiaries
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when
intend to settle its current tax assets and liabilities on a net basis.
the asset is realized or the liability is settled based on tax rates and tax laws that have been enacted at the
consolidated balance sheet date.
The Bank and its subsidiaries’ tax returns are subject to examination by the tax authorities. Since the application
of tax laws and regulations to many types of transactions are susceptible to varying interpretations, amounts Deferred tax is charged or credited to the consolidated income statement, except when it relates to items
reported in the consolidated financial statements could be changed at a later date upon final determination recognized directly to equity, in which case the deferred tax is also dealt with in the equity account.
by the taxation authorities.

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as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

4.23 Corporate income tax (“CIT”) (continued) 4.26 Derivatives (continued)

4.23.2 Deferred tax (continued) Currency option contracts

The Bank and its subsidiaries are only allowed to offset deferred income tax assets and deferred income tax Contracts in foreign currency options are monitored off-balance sheet and the difference between the market
payable when the Bank and its subsidiaries have a legally enforceable right to offset current income tax assets price and the expected price of the contract is recognized at each revaluation as an asset item – “Interest
with current income tax payable and deferred income tax assets and deferred income tax liabilities related to receivables from option transactions” or liability item - ”Interest payable for option transactions”.
corporate income tax managed by the same tax authority for the same entity or the Bank and its subsidiaries
intend to settle its current tax liabilities and assets on a net basis. Cross currency interest rate swap contracts

4.24 Fiduciary assets For cross currency interest rate swap contracts, the interest difference between the VND value and swap
foreign currencies are recognized in the consolidated income statement.
Entrusted operations that the Bank and its subsidiaries bear no risks
4.27 Offsetting
The Bank and its subsidiaries provide services of holding assets in trust or in a fiduciary capacity. Assets held
in trust or in a fiduciary capacity are not reported in the consolidated financial statements since they are not Financial assets and financial liabilities are offset and reported at the net amount in the consolidated balance
assets of the Bank and its subsidiaries. sheet if, and only if, the Bank and its subsidiaries have an enforceable legal right to offset financial assets
against financial liabilities and the Bank and its subsidiaries have intention to settle on a net basis, or the
Entrusted operations that the Bank and its subsidiaries bear all risks realization of the assets and settlement of liabilities is made simultaneously.

The Bank and its subsidiaries receive entrusted funds from the trustor in order to grant loans to borrowers. 4.28 Employee benefits
The Bank and its subsidiaries record loan balance granted from entrusted funds in the loans to customers
account. The accounting policy for loans granted to customers is in accordance with regulations of the SBV 4.28.1 Post-employment benefits
and presented in Note 4.4 and Note 4.5.
Post-employment benefits are paid to retired employees of the Bank and its subsidiaries by the Social Insurance
4.25 Off-balance-sheet commitments Agency, which belongs to the Ministry of Labour, Invalids and Social Affairs. The Bank and its subsidiaries
are required to contribute to these post-employment benefits by paying social insurance premium to the
According to Circular 02 and Circular 09, the Bank and its subsidiaries classify guarantees, acceptances for Social Insurance Agency at the rate of 18.00% of an employee’s basic salary on a monthly basis. According to
payment and irrevocable loan commitments with specific effective date (generally called “off-balance-sheet Decision No. 595/2017/QĐ-BHXH, the rate of social insurance premium from 1 June 2017 is 17.50%. Besides,
commitments”) into different groups as regulated in Article 10, Circular 02 to control and monitor credit quality. the Bank and its subsidiaries have no further obligation.
Accordingly, off-balance-sheet commitments are classified into groups such as Current, Special mention,
Sub-standard, Doubtful and Loss based on the overdue status and other qualitative factors. 4.28.2 Voluntary resignation benefits

4.26 Derivatives The Bank and its subsidiaries have the obligation, under Labour Code, to pay allowance arising from voluntary
resignation of employees, equal to one-half month’s salary for each year of employment up to 31 December
Currency forward and swap contracts 2008 plus salary allowances (if any). From 1 January 2009, the average monthly salary used in this calculation is
the average monthly salary of the latest six-month period up to the resignation date.
The Bank and its subsidiaries enter foreign exchange forward and swap contracts which enable customers to
transfer, modify or reduce their foreign exchange risk or other market risks and also are used for the Bank and 4.28.3 Unemployment insurance
its subsidiaries’ business purpose.
According to current regulations on unemployment insurance, the Bank and its subsidiaries are is obliged to
Forward contracts are commitments to either purchase or sell a designated currency at a specific future pay unemployment insurance at 1% of its salary fund used to pay for unemployment insurance and deduct 1%
date for a specific exchange rate and cash settlement. Forward contracts are recorded at nominal values at of salary of each employee to pay simultaneously to the Unemployment Insurance Fund.
transaction dates, and are subsequently revaluated at the end of the accounting period. The difference on
revaluation is recognized under “Foreign exchange differences” in the equity section and is recorded in the
consolidated income statement at the end of the financial year.

Swap contracts are commitments to settle in cash at a future date based on differences between specified
exchange rates, calculated on the notional principal amount. Swap contracts are subsequently revaluated at the
end of the accounting period and the difference on revaluation is recognized under “Foreign exchange differences”
in the equity section and is recorded in the consolidated income statement at the end of the financial year.

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as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
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5. CASH, GOLD AND PRECIOUS STONES 6. BALANCES WITH CENTRAL BANKS (CONTINUED)
The actual interest rates on deposits with the SBV are as follows:
Ending balance Beginning balance
VND million VND million
Ending balance Beginning balance
Cash on hand in VND 4,118,753 3,898,711 Within the limit of compulsory deposits in VND 1.20% 1.20%
Cash on hand in foreign currencies 1,929,142 1,764,084 Within the limit of compulsory deposits in USD 0.00% 0.00%

Gold 100,196 161,974 Exceeding the limit of compulsory deposits in VND 0.00% 0.00%
Exceeding the limit of compulsory deposits in USD 0.05% 0.05%
Jewelry 54,018 36,922

Other precious metal and stones 10,553 11,232

During the year, the Bank and its subsidiaries fully complied with the compulsory reserve according to current
regulations.
Valuable papers in foreign currencies - 52
7. DUE FROM AND LOANS TO OTHER CREDIT INSTITUTIONS
6,212,662 5,872,975
7.1 Due from other credit institutions
6. BALANCES WITH CENTRAL BANKS
Ending balance Beginning balance
VND million VND million
Ending balance Beginning balance
VND million VND million Demand deposits 6,333,779 1,179,276
In VND 5,029,363 181,517
Balances with the SBV
In foreign currencies 1,304,416 997,759
- In VND 1,240,013 7,267,614
Term deposits 594,999 1,192,804
- In foreign currencies 725,576 726,644 In VND 500,000 1,050,000
Balance with the National Bank of Cambodia (“NBC”) 644,460 667,685 In foreign currencies 94,999 142,804
Balances with the Bank of Laos (“BOL”) 392,346 292,369 6,928,778 2,372,080

3,002,395 8,954,312 7.2 Loans to other credit institutions

Balances with the SBV include settlement and compulsory deposits. The average balance of settlement deposits Ending balance Beginning balance
of the Bank at the SBV is not less than the compulsory deposits in the month. The compulsory deposits are VND million VND million
calculated by multiplying previous month average deposit balances and compulsory deposit rates. Loans to other credit institutions 444,594 112,808

According to Decision No.120/QĐ-NHNN.m issued by the SBV dated 12 December 2017, “Decrease in In VND 552 552
compulsory deposit rates applicable to the Bank to enforce the Restructuring Plan”, the Bank is allowed to In foreign currencies 444,042 112,256
decrease 50% of its compulsory deposit rates applied to customers’ demand deposits and term deposits with Provision for credit loss (552) (552)
maturity term less than 12 months in VND from December 2017 to the end of February 2018.
444,042 112,256
The compulsory deposit rates at the year-end are as follows: 7.3 Term deposits with and loans to other credit institutions by quality

Ending balance Beginning balance Ending balance Beginning balance

VND million VND million
Customer demand deposits and term deposits with maturity term less
than 12 months in VND 1.50% 3.00% Current 1,039,041 1,305,060
Term deposits 594,999 1,192,804
Customer term deposits with maturity term from 12 months and above in VND 1.00% 1.00%
Loans to other credit institutions 444,042 112,256
Customer demand deposits and term deposits with maturity term less
than 12 months in foreign currencies 8.00% 8.00% Loss 552 552
Loan to other credit institution 552 552
Customer term deposits with maturity term from 12 months and above
in foreign currencies 6.00% 6.00% 1,039,593 1,305,612

The loss loan represents a loan provided to a People’s Credit Fund incurred in 2012. Currently, the fund has
been liquidated and the Bank has made a full provision for this loan.

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as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
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8. HELD-FOR-TRADING SECURITIES 9. DERIVATIVES AND OTHER FINANCIAL ASSETS

Ending balance Beginning balance Carrying value

VND million VND million Nominal amount (using the exchange rate
(using the at the balance sheet date)
Equity securities exchange rate at
the effective date) Assets Liabilities
Issued by local economic entities 63,250 105,624 VND million VND million VND million
Currency derivative financial instruments
Provision for trading securities as at 31 December 2017

Provision for diminution in value - (15,733) Forward 914,534 - 8,333

Swap 5,938,541 28,584 -

63,250 89,891
6,853,075 28,584 8,333
The listing status of trading securities is as follows:
Net value 20,251

Ending balance Beginning balance Option transactions

VND million VND million
Buying option 11,583 - 417
Equity securities
Selling option 49,009 573 -
Listed - 42,374 60,592 573 417

Unlisted 63,250 63,250 Net value 156

Currency derivative financial instruments
63,250 105,624
as at 31 December 2016
Forward 1,295,812 4,265 -
Movements of provision for trading securities during the year are as follows:
Swap 5,577,306 11,157 -
Ending balance Beginning balance
6,873,118 15,422 -
VND million VND million
Net value 15,422
Beginning balance 15,733 29,507

Reversal during the year (Note 30) (15,733) (13,774) 10. LOANS AND FINANCE LEASES TO CUSTOMERS

Ending balance - 15,733

Ending balance Beginning balance
VND million VND million

Loans to domestic economic entities and individuals 216,608,720 191,182,625

Loans to foreign economic entities and individuals 4,656,261 4,208,122

Finance leases 1,580,150 1,553,330

Loans by discount of commercial and valuable papers 97,084 60,010

Loans financed by entrusted funds 1,415 1,845,166

Other loans 3,000 10,412

222,946,630 198,859,665

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as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
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10. LOANS AND FINANCE LEASES TO CUSTOMERS (CONTINUED) 10. LOANS AND FINANCE LEASES TO CUSTOMERS (CONTINUED)

10.1 Analysis of loans and financial lease by quality 10.3 Analysis of loans and financial lease by type of customer and ownership

Ending balance Beginning balance Ending balance Beginning balance

VND million VND million
VND million % VND million %
Current 211,642,701 182,519,558
Corporate loans 92,082,328 41.30 94,809,681 47.68
Special mention 899,241 2,594,763
Other private limited companies 47,674,168 21.38 43,300,580 21.77
Sub-standard 1,474,519 2,613,243
Other joint stock companies 35,408,316 15.88 42,016,419 21.13
Doubtful 627,133 2,621,783
Private companies 4,257,355 1.91 4,954,130 2.49
Loss 8,303,036 8,510,318
Foreign invested companies 1,910,757 0.86 1,357,465 0.68
222,946,630 198,859,665
State-owned companies 961,760 0.43 646,741 0.33

Included in the outstanding loans as at 31 December 2017 were some loans amounting to VND7,613,308 One member limited liability companies of which 100%
663,221 0.30 789,786 0.40
million which will be resolved in accordance with the proposals in the Restructuring Plan as approved by the charter capital is held by the State
SBV. Provision for loans to customers is made based on the Bank and its subsidiaries’ financial capacity during Limited liability companies with two or more members
the restructuring period (Note 3.4). of which more than 50% of the charter capital is held or 169,521 0.08 113,028 0.06
coordinated by the State
10.2 Analysis of loans and financial lease by original term
The joint stock company of which over 50% of share
capital or the total voting share capital is held or 93,254 0.04 959,847 0.48
Ending balance Beginning balance coordinated by the State under the company’s charter
VND million VND million
Cooperatives and inter-cooperatives 75,562 0.03 113,426 0.06
Short-term loans 99,520,632 78,542,526
Business households and individuals 29,746 0.01 25,100 0.01
Medium-term loans 61,215,104 74,032,192
Partnerships 651 0.00 572 0.00
Long-term loans 62,210,894 46,284,947
Others 838,017 0.38 532,587 0.27
222,946,630 198,859,665
Loans to individuals 130,864,302 58.70 104,049,984 52.32

222,946,630 100.00 198,859,665 100.00

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as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
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10. LOANS AND FINANCE LEASES TO CUSTOMERS (CONTINUED) 11. PURCHASED DEBTS

10.4 Analysis of loans and financial lease by economic sectors Ending balance Beginning balance
VND million VND million
Ending balance Beginning balance
Purchased debts by foreign currencies 648,763 757,528
VND million % VND million %
Real estate trading and consulting services 39,273,974 17.62 42,017,143 21.13 Provision for purchased debts (4,979) (5,780)
Activities of households as employers, undifferentiated
goods and services producing activities of households 35,349,889 15.86 24,287,126 12.21 643,784 751,748
for own use
Results of the loan classification as at 30 November 2017 and corresponding provision for purchased debts
Manufacturing and processing 24,881,601 11.16 21,499,538 10.81
made by the Bank and its subsidiaries are as follows:
Agriculture, forestry and fisheries 24,409,019 10.95 18,734,648 9.42
Trading, repair of motor vehicles, motorcycles and other Outstanding Specific General
23,638,515 10.60 23,648,175 11.89
vehicles balance provision provision Total
Administrative activities and supporting service 20,981,229 9.41 10,082,918 5.07 Classification VND million VND million VND million VND million

Construction 16,872,685 7.57 23,406,963 11.77 Current 663,802 - (4,979) (4,979)

Education and training 5,186,458 2.33 4,538,212 2.28
Transportation, warehousing and communication 3,974,147 1.78 3,732,629 1.88 Movements in the provision for debts purchased for the year ended 31 December 2017 are as follows:
Electricity, gas, steam and air conditioning supply 2,735,921 1.23 1,838,419 0.92
Specific General
Hotel and accommodation services 2,479,518 1.11 2,072,769 1.04 provision provision Total
Financial services, banking and insurance activities 2,040,851 0.92 1,903,493 0.96 VND million VND million VND million

Health and social support activities 1,645,673 0.74 1,973,137 0.99 Beginning balance - 5,780 5,780
Mining exploration 1,482,217 0.66 1,622,798 0.82
Provision reversed during the year (Note 12) - (801) (801)
Activities of Communist Party, socio-political organization,
830,481 0.37 704,231 0.35
public administration and defense; compulsory security Ending balance - 4,979 4,979
Arts, entertainment and recreation 388,512 0.17 398,816 0.20
Information and communication 110,662 0.05 82,166 0.04
Science and technology activities 95,133 0.04 91,416 0.05
Water supply; sewerage, waste management and
42,716 0.02 53,533 0.03
remediation activities
Others 16,527,429 7.41 16,171,535 8.13
222,946,630 100.00 198,859,665 100.00

10.5 Analysis of loans and financial lease by currency

Ending balance Beginning balance

VND million % VND million %

In VND 209,407,398 93.93 186,461,228 93.77

In foreign currencies and gold 13,539,232 6.07 12,398,437 6.23

222,946,630 100.00 198,859,665 100.00

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as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
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12. PROVISION FOR CREDIT LOSSES 12. PROVISION FOR CREDIT LOSSES (CONTINUED)

The Bank and its subsidiaries classify their debts in accordance with Article 10, Circular 02 and Circular 09 and 12.1 Provision for loans and finance leases to customers
according to its own policy on debt classification. According to the Restructuring Plan approved by the SBV
(Note 3.4), the Bank and its subsidiaries are allowed to make provision for credit losses based on their financial Results of the loan classification as at 30 November 2017 and the corresponding provision for credit losses of
capacity during the restructuring period. loans and finance leases to customers made by the Bank and its subsidiaries are as follows:

Provision for credit losses at the year-end comprised of: Specific General
Balance provision provision Total
Ending balance Beginning balance Classification VND million VND million VND million VND million
Note VND million VND million
Current 210,383,726 - 1,579,964 1,579,964
Provision for due from and loans to other credit institutions 552 552
Special mention 2,052,960 37,165 14,513 51,678
Provision for purchased debts 11 4,979 5,780
Sub-standard 829,739 18,659 6,038 24,697
Provision for loans and finance leases to customers 12.1 2,748,878 2,431,588
Doubtful 850,456 63,032 6,245 69,277
Provision for special bonds issued by VAMC 12.2 1,949,320 1,649,681
Loss 9,144,722 921,028 - 921,028
Provision for held-to-maturity securities 13.4 15,000 7,500
223,261,603 1,039,884 1,606,760 2,646,644
Provision for other assets 16.4 237,594 143,007
Changes in provision for credit losses during the current year are as follows:
4,956,323 4,238,108

Specific General
Provision expenses for the year comprised of: provision provision Total
VND million VND million VND million
Current year Previous year Beginning balance 915,954 1,515,634 2,431,588
Note VND million VND million
Provision charged during the period 200,919 91,032 291,951
Provision (reversed)/charged for purchased debts 11 (801) 5,480
Provision used to resolve debts sold to VAMC from January to (77,371) - (77,371)
Provision charged for loans and finance leases to customers 12.1 400,757 419,349
November (Note 13.(v))
Provision charged for special bonds issued by VAMC 12.2 314,546 271,414 Foreign exchange differences 382 94 476

Provision charged for held-to-maturity securities 13.4 7,500 - Balance as at 30 November 2017 1,039,884 1,606,760 2,646,644

Provision charged for other assets 16.4 94,587 - Provision charged/(reversed) in December 118,500 (9,694) 108,806

816,589 696,243 Provision used to resolve debts sold to VAMC in December (6,772) - (6,772)
(Note 13.(v))
During the year, the Bank and its subsidiaries have made provision for credit losses in accordance with the Foreign exchange differences 225 (25) 200
schedule of the Restructuring Plan approved by the SBV.
Ending balance 1,151,837 1,597,041 2,748,878

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as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
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12. PROVISION FOR CREDIT LOSSES (CONTINUED) 13. INVESTMENT SECURITIES

12.1 Provision for loans and finance leases to customers (continued) Ending balance Beginning balance
VND million VND million
Changes in provision for credit losses during the previous year are as follows:
Available-for-sale securities 30,007,436 27,589,161

Specific General Debt securities 29,760,378 27,221,580

provision provision Total
VND million VND million VND million »» Issued by the Government (i) 29,709,768 27,045,792

Beginning balance 883,833 1,372,959 2,256,792 »» Issued by domestic credit institutions (ii) 50,610 175,788

Provision charged during the period 272,637 141,029 413,666 Equity securities 247,058 367,581

Provision used to resolve debts sold to VAMC from January to »» Issued by domestic credit institutions (iii) 163,690 264,832
(209,012) - (209,012)
November
»» Issued by domestic economic entities 82,807 102,195
Foreign exchange differences 561 299 860
»» Issued by foreign economic entities 561 554
Balance as at 30 November 2016 948,019 1,514,287 2,462,306 Held-to-maturity securities 45,266,699 39,292,300

Provision charged in December 4,069 1,614 5,683 Bonds issued by domestic economic entities (iv) 2,000,000 1,000,000

Provision used to resolve debts in December (36,346) (366) (36,712) Special bonds issued by VAMC (v) 43,266,699 37,300,913

Foreign exchange differences 212 99 311 Government bonds - 991,387

Provision for investment securities (2,085,555) (1,848,320)

Ending balance 915,954 1,515,634 2,431,588
Available-for-sale securities (121,235) (191,139)
12.2 Provision for special bonds issued by VAMC Special bonds issued by VAMC (1,949,320) (1,649,681)

Movements of provision for special bonds issued by VAMC during the year following to the Restructuring Plan Held-to-maturity securities (15,000) (7,500)
approved by the SBV (Note 3.4) are as follows:
73,188,580 65,033,141

Current year Previous year

VND million VND million (i) Government bonds have terms from 3 to 10 years and bear interest at rates from 4.40% to 11.10% p.a.
Interest is paid annually. Some bonds amounting to VND8,919,232 million have been pledged to borrow
Beginning balance 1,649,681 1,378,545 from other credit institutions and for the limits granted on transactions with the SBV (Note 37.2). As at 31
December 2017, total borrowings from other credit institutions which have been pledged by government
Provision charged during the year 314,546 271,414 bonds amounted to VND2,335,123 million (Note 18.2).

Provision used to resolve debts during the year (14,907) (278) (ii) Bonds issued by Vietnam Development Bank have term of 15 years and bear interest rate at 9.00% p.a.
Interest is paid annually. Those bonds have been pledged for the limit granted on transactions with the
Ending balance 1,949,320 1,649,681 SBV (Note 37.2).

(iii) These represent the shares of one (1) domestic credit institution transferred from Southern Commercial
Joint Stock Bank after the merger and the Bank is currently making resolution of these investments
according to the Restructuring Plan as approved by the SBV (Note 3.4).

(iv) This represents a 3-year corporate bond which bears interest rate of 10.00% p.a. and will mature on 24
December 2019.

192 193
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

13. INVESTMENT SECURITIES (CONTINUED) 13. INVESTMENT SECURITIES (CONTINUED)

(v) These are special bonds issued by VAMC to buy bad debts of the Bank which have term of ten (10) years 13.3 Analysis of securities classified as credit risk assets by quality
and bear interest at rate of 0%. Changes in special bonds issued by VAMC in the year are as follows:
Ending balance Beginning balance
Current year Previous year Classification VND million VND million
VND million VND million
Bonds issued by domestic economic entities
Beginning balance 37,300,913 14,142,479
Increase from selling debts to VAMC during the year 13,482,923 23,471,119 Current 2,000,000 1,000,000

Decrease during the year (7,517,137) (312,685)

13.4 Provision for investment securities
Ending balance 43,266,699 37,300,913
Changes in provision for investment securities in the year are as follows:
During the year, the Bank has sold some debts to VAMC amounting to VND13,567,066 million and used a
corresponding provision for credit losses of VND84,143 million (Note 12.1) in exchange for special bonds
issued by VAMC amounting to VND13,482,923 million. Included in the balance of special bonds issued Current year Previous year
by VAMC as at 31 December 2017 are loans amounting to VND26,740,726 million, which were resolved VND million VND million
following to the Restructuring Plan as approved by the SBV. Beginning balance

13.1 Listing status of available-for-sale securities »» Available-for-sale securities 191,139 193,355

»» Special bonds issued by VAMC (Note 12.2) 1,649,681 1,378,545

Ending balance Beginning balance
VND million VND million »» Other held-to-maturity securities (excluded special bonds issued by
7,500 7,500
VAMC) (Note 12)
Debt securities 29,760,378 27,221,580
1,848,320 1,579,400
Listed 29,760,378 27,221,580
Charged/(reversed) in the year
Equity securities 247,058 367,581
»» Available-for-sale securities (Note 31) (69,904) (2,216)
Listed 16,715 65,198
»» Special bonds issued by VAMC (charged to provision expenses for
314,546 271,414
Unlisted 230,343 302,383 credit losses) (Note 12.2)
»» Other held-to-maturity securities (excluded special bonds issued by
30,007,436 27,589,161 7,500 -
VAMC) (Note 12)
Used in the year
Included in unlisted equity securities was an investment in Saigon Aquatic Products Trading Joint Stock
Company amounting to VND32,397 million which was made by Southern Commercial Joint Stock Bank prior »» Special bonds issued by VAMC (Note 12.2) (14,907) (278)
to the merger and was authorized to an individual to own the shares. The Bank has made a full provision
for this investment and is in the process to resolve the investment according to the Restructuring Plan as 237,235 268,920
approved by the SBV (Note 3.4).
Ending balance

13.2 Listing status of held-to-maturity securities »» Available-for-sale securities 121,235 191,139

»» Special bonds issued by VAMC (Note 12.2) 1,949,320 1,649,681

Ending balance Beginning balance
VND million VND million »» Other held-to-maturity securities (excluded special bonds issued by
15,000 7,500
VAMC) (Note 12)
Debt securities
2,085,555 1,848,320
Listed - 991,387

Unlisted 45,266,699 38,300,913

45,266,699 39,292,300

194 195
196
14.

14.1

14.2
Listed

Unlisted
Unlisted

Ending balance
Beginning balance
Long-term investments

Long-term investments

Total other long-term investments

LONG-TERM INVESTMENTS

Investments in economic entities

Provision for long-term investments

Provision for long-term investments

Investments in other credit institutions

Provision (reversed)/charged during the year (Note 34)

Provision for impairment of long-term investments
as at and for the year ended 31 December 2017 (continued)

Movements in provision for long-term investments in the year are as follows:

156,750
(203,486)
360,236
VND million
Current year
164,184
(156,750)
320,934
319,300
-
1,634
VND million
Ending balance
164,184
(156,750)
320,934
VND million
Ending balance
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

360,236
56,935
303,301
VND million
Previous year
520,339
(360,236)
880,575
440,288
438,653
1,634
VND million
Beginning balance
520,339
(360,236)
880,575
VND million
Beginning balance
B05/TCTD-HN

15. FIXED ASSETS

15.1 Tangible fixed assets

Buildings and Machines and Transportation Other

structure equipment vehicles tangible assets Total
VND million VND million VND million VND million VND million
Cost
Beginning balance 4,180,448 1,922,004 565,808 188,699 6,856,959
New purchases and upgrading 8,179 72,593 121,854 69,829 272,455
Transfer from construction in progress and advances for
15,152 117,206 - 1,665 134,023
purchases of fixed assets (Note 16.1)
Transfer from foreclosed assets 17,459 - - - 17,459
Other increases - 560 - 40 600
Disposals (25,469) (466,130) (50,906) (7,856) (550,361)
Foreign exchange differences (9,915) 458 (93) (645) (10,195)
as at and for the year ended 31 December 2017 (continued)

Ending balance 4,185,854 1,646,691 636,663 251,732 6,720,940

Accumulated depreciation
Beginning balance 708,612 1,254,768 300,300 89,469 2,353,149
Depreciation charges 116,640 170,260 47,061 20,662 354,623
Depreciation charges to Science and Technology
- 3,894 - - 3,894
Development Fund
Disposals (4,323) (430,482) (22,327) (6,433) (463,565)
Other increases - 560 - 40 600
Foreign exchange differences (2,109) 260 (49) (479) (2,377)
Ending balance 818,820 999,260 324,985 103,259 2,246,324
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Net book value

Beginning balance 3,471,836 667,236 265,508 99,230 4,503,810
Ending balance 3,367,034 647,431 311,678 148,473 4,474,616
197
B05/TCTD-HN
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

15. FIXED ASSETS (CONTINUED) 16. OTHER ASSETS

15.1 Tangible fixed assets (continued) 16.1 Receivables

Included in the machines and equipment balance are the assets financed by Science and Technology
Development Fund with historical cost of VND53,012 million. The accounting policy applied for these assets Ending balance Beginning balance
differs from other similar assets not financed by Science and Technology Development Fund. Accordingly, the VND million VND million
depreciation of these assets is funded by the Science and Technology Development Fund. Constructions in progress and advances for purchases of fixed assets (a) 548,606 439,535
Other information on tangible fixed assets: Other receivables (b) 23,343,830 16,504,159
23,892,436 16,943,694
Ending balance Beginning balance
VND million VND million
(a) This account presents constructions in progress and advances for purchases of fixed assets of branches
- Net carrying value of tangible fixed assets that are temporarily and transaction offices. Movements of this account in the year are as follows:
77,497 93,283
not in use
- Fully depreciated tangible fixed assets that are still in use 270,675 549,699 Current year Previous year
VND million VND million
15.2 Intangible fixed assets
Beginning balance 439,535 426,051
Land use Computer Other intangible Increase during the year 367,010 362,019
rights software fixed assets Total
VND million VND million VND million VND million Transfer to tangible assets (Note 15.1) (134,023) (227,428)

Cost Transfer to intangible assets (Note 15.2) (111,888) (98,435)

Beginning balance 3,394,954 801,302 484 4,196,740 Transfer to deferred expenses and other operating expenses (12,028) (22,069)
New purchases and upgrading - 12,271 - 12,271 Other decreases - (603)
Transfer from construction in progress and Ending balance 548,606 439,535
60,519 51,369 - 111,888
advances for purchases of fixed assets (Note 16.1)
Transfer from foreclosed assets 278,070 - - 278,070 Constructions in progress and advances for purchases of fixed assets comprised of:
Disposals (126,669) (5,242) - (131,911)
Foreign exchange differences (1,257) (26) - (1,283) Ending balance Beginning balance
Ending balance 3,605,617 859,674 484 4,465,775 VND million VND million
Accumulated amortization Ground at 306 - 308 Vuon Lai Street 87,029 87,029
Beginning balance 142,641 608,136 407 751,184 Office building in Tay Ninh province 71,062 71,062
Amortization charges 26,833 66,977 52 93,862 House 47 Hoa Binh, Tan Thoi Hoa Ward, Tan Phu District, HCMC 37,418 37,418
Disposals (318) (5,242) - (5,560)
Software for the merged entity 43,205 43,205
Foreign exchange differences - (91) - (91)
Upgrading Cardpro system 34,163 33,589
Ending balance 169,156 669,780 459 839,395
Other constructions in progress 275,729 167,232
Net book value
548,606 439,535
Beginning balance 3,252,313 193,166 77 3,445,556
Ending balance 3,436,461 189,894 25 3,626,380
The Bank and its subsidiaries have entered into agreements to purchase assets and made partial or full
Other information of intangible fixed assets: payments. As at 31 December 2017, the Bank and its subsidiaries are still under pending implementation
of necessary procedures to complete the transfer of ownership in accordance with the current regulations.
Ending balance Beginning balance
VND million VND million
- Net carrying value of intangible fixed assets that are temporarily not in use 897,168 1,030,837
- Fully depreciated intangible fixed assets that are still in use 524,566 438,349

198 199
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

16. OTHER ASSETS (CONTINUED) 16. OTHER ASSETS (CONTINUED)

16.1 Receivables (continued) 16.1 Receivables (continued)

(b) Other receivables comprised of:
External receivables include:
Ending
Receivables which are resolved according to the official approvals of the Post-merger Restructuring Plan
balance Beginning balance
VND million VND million of the SBV (Note 3.4) include the following items:
Internal receivables 2,116,849 1,475,222
(iv) These represent assets that the Bank is in the process of transferring the ownership or finding resolutions
Advances for operations (i) 1,472,436 1,037,501 to recover debts, which include some foreclosed assets amounting to VND5,679,275 million transferred
Advance for Bonus and Welfare Fund (ii) 402,734 195,659 from Southern Commercial Joint Stock Bank as at 31 December 2017.
Advance for construction of FICO building (iii) 216,693 216,693
(v) These represent receivables relating to purchases and commitment to resale of securities which were
Others 24,986 25,369
received from Southern Commercial Joint Stock Bank upon merger. These receivables are secured by
External receivables 21,226,981 15,028,937 shares. Some receivables amounting to VND1,106,039 million have been made provision based on the
Receivables from selling foreclosed assets (vii) 8,280,000 - Bank’s financial capacity during the restructuring period.
Foreclosed assets (iv) 6,209,569 7,984,189
(vi) These represent receivables relating to the gold trading between Southern Jewelry Joint Stock Company
Receivables from purchase and sale of securities (v) 2,039,729 4,512,308
and Southern Commercial Joint Stock Bank before the merger. These receivables are secured by shares
Receivables from selling debts (viii) 1,607,800 - amounting to VND681,145 million. The Bank has made provision for these receivables based on its
Receivables from card organizations 542,784 310,241 financial capacity during the restructuring period.
Receivables from Southern Jewelry Joint Stock Company (vi) 503,639 503,639
Other external receivables include the following items:
Receivables from intermediary and electronic support payment services 467,970 2,916
Receivables from disposal of trading securities (ix) 466,771 762,630 (vii) These represent receivables relating to resolving the loans’ collaterals in Duc Hoa III Industrial Park,
Deposit and pledged 212,922 110 Long An Province which were successfully bid by the Bank and entered into contracts with partners on
Receivables from sale of partial FICO building (x) 158,204 158,204 29 December 2017. The total value of the contract is VND9,200,000 million and the Bank has received
a full deposit of VND920,000 million at the contract date. The remaining amount of VND8,280,000
Receivables from deposits for office rent 134,830 128,777
million will be paid within 7 years from the contract date, the grace period is 2 years, and the deferred
Receivables from foreign exchange settlements 84,180 83,772 payment fee is 7.5% per annum.
Margin deposits for commodity future contracts 66,093 35,571
Receivables from investment in Southern Jewelry Joint Stock Company (xi) 64,800 64,800 (viii) This represents a receivable relating to the selling of debts at market price to the Vietnam Asset
Tax advances (Note 23) 51,811 242,188 Management Company (“VAMC”) amounting to VND2,607,800 million. The Bank has received the first
payment amounting to VND1,000,000 million. The remaining amount VND1,607,800 million is due
Receivables from disposal of convertible bonds of Sacombank Securities Company 41,000 41,000
within 6 months. The deferred payment fee is 5.275% per annum.
Receivables from the State Budget relating to interest subsidy program 27,535 27,535
Others 267,344 171,057 (ix) These represent the remaining receivables from selling securities on credit to customers. The customers
23,343,830 16,504,159 did either deposit or make partial payment.

Internal receivables include: (x) This represents a receivable incurred in connection with a sale of a part of FICO building at No. 927
Tran Hung Dao, District 5, Ho Chi Minh City by Southern Commercial Joint Stock Bank to a partner for
(i) Included in advances for operation are advances for cash supply in ATMs for the New Year amounting using as head office. Currently, the Bank is completing procedures for transferring the ownership to the
to VND1,313,349 million. These advances have been cleared by branches in early 2018. partner in accordance with the current regulations.
(ii) These represent advances for employees in year 2015 and 2016 under Announcement No. 327/2016/ (xi) This represents an advance to invest in Southern Jewelry Joint Stock Company by Southern Commercial
TB-NS dated 1 February 2016 and Announcement No. 332/2017/TB-NS dated 14 January 2017 by the Joint Stock Company before the merger and was authorized to an individual to own the shares. The
General Director. In the year, the Bank used VND109,949 million from the Bonus and Welfare Funds to Bank has made a full provision for this advance and is in process of resolving in accordance with the
settle a partial of the advance. The remaining advance will be settled after getting approval from the regulations of the SBV.
shareholders at the Bank’s Annual General Meeting.

(iii) These operational advances were used to purchase a part of FICO building at 927 Tran Hung Dao,
District 5, Ho Chi Minh City. Currently, the Bank is implementing necessary procedures to receive the
building ownership.

200 201
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

16. OTHER ASSETS (CONTINUED) 16. OTHER ASSETS (CONTINUED)

16.2 Interest and fees receivable 16.3 Other assets (continued)

Ending balance Beginning balance (i) These represent collaterals of loans to customers which were foreclosed to the Bank and its subsidiaries
VND million VND million
upon writing-off of bad debts including loans and other receivables. The Bank has completed procedures
Interest receivable from loans to customers (i) 22,399,323 22,922,786 to receive the ownership of these assets and is in progress to resolve these foreclosed assets in accordance
Interest receivable from investments (ii) 2,265,022 2,321,573 with regulations stipulated by the SBV.
Interest receivable from trust investment (iii) 51,612 51,612 (ii) Prepaid expenses comprise of prepaid services, assets rental, assets maintenance and repairing expenses,
Interest receivable from due from and loans to other credit institutions 13,765 9,847 option premium fee and interest paid in advance which are being amortized for a period from 1 to 50
years. Included in prepaid expenses are VND52,949 million of loss from selling foreclosed assets which are
Interest receivable from finance leases 6,011 9,795
allowed to allocate in 5 years according to the Restructuring Plan as approved by the SBV (Note 3.4).
Interest receivable from purchased debts 3,235 3,551
(iii) This represents an entrustment of Southern Commercial Joint Stock Bank to a company before the merger.
Receivables from forward contracts 2,734 3,493
This entrustment is under process of resolutions according to the Restructuring Plan as approved by the
Receivables from swap contracts 407 13,815 SBV (Note 3.4).
Receivables from option contracts 108 -
24,742,217 25,336,472
16.4 Provision for other assets

(i) Included in interest receivable from loans to customers as at 31 December 2017 are some interests Results of the receivables classified as credit risk bearing assets are as follows:
amounting to VND19,800,912 million. The Bank is allowed to block these interest and make an annual
amortization of such blocked interest into the profit and loss based on its financial capacity within a Ending balance Beginning balance
maximum period of 10 years according to the Restructuring Plan (Note 3.4). VND million VND million

(ii) Included in interest receivable from investments as at 31 December 2017 are some interest on agreements Loss
of purchase and resale of securities (Note 16.1.(v)) and on some bonds amounting to VND912,556 million Receivables from purchase and sale of securities 2,039,729 4,512,308
and VND224,537 million, respectively, which were received from Southern Commercial Joint Stock Bank
upon merger. The Bank is allowed to block these interest and make an annual amortization of such Receivables from an entrustment 89,400 90,000
blocked interest into the profit and loss based on its financial capacity within a maximum period of 10
2,129,129 4,602,308
years according to the Restructuring Plan (Note 3.4).

(iii) This represents an interest receivable related to an entrustment in a company (Note 16.3) received from Included in loss debts are some receivables amounting to VND1,195,439 million from receivables from
Southern Commercial Joint Stock Bank upon merger. The Bank is allowed to block this interest and make purchase and sale of securities and an entrustment which have been made provision by the Bank and its
an annual amortization of such interest into the profit and loss based on its financial capacity within a subsidiaries based on their financial capacity and are under pending resolution according to the Restructuring
maximum period of 10 years according to the Restructuring Plan (Note 3.4). Plan as approved by the SBV (Note 3.4).
16.3 Other assets
Provision for other assets comprises of:

Ending balance Beginning balance

Ending balance Beginning balance
VND million VND million
VND million VND million
Foreclosed assets (i) 419,030 1,437,065
In which: Provision for credit losses
- Real estate 377,996 700,522 - Specific provision (Note 12) 237,594 143,007
- Securities 41,034 730,634
- Others - 5,909 Provision for receivables and other assets
Prepaid expenses (ii) 728,150 575,626
- Provision for foreclosed assets 26,765 240,126
Receivables from an entrustment (iii) 89,400 90,000
Payment between credit institutions 29,126 18,385 - Provision for receivables from securities trading - 57,850
Investments in financial lease equipment 10,399 26,356
Other assets 30,535 24,456 - Provision for other assets 248,994 193,951
1,306,640 2,171,888 513,353 634,934

202 203
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

16. OTHER ASSETS (CONTINUED) 18. DUE TO AND BORROWINGS FROM OTHER CREDIT INSTITUTIONS (CONTINUED)

16.4 Provision for other assets (continued) 18.2 Borrowings from other credit institutions

Changes in provision for other assets in the year are as follows: Ending balance Beginning balance
VND million VND million
Current year Previous year Borrowings from other domestic credit institutions in VND 2,970,557 3,076,502
VND million VND million
Borrowings from other foreign and domestic credit institutions
2,547,323 1,691,324
Beginning balance 634,934 585,804 in foreign currencies
Provision for credit losses during the year (Note 12) 94,587 - In which: Pledged loans (Note 13.(i)) 2,335,123 1,985,000
Provision (reversed)/charged for receivables and other assets during the 5,517,880 4,767,826
year (Note 34) (216,168) 49,130
Ending balance 513,353 634,934 19. DUE TO CUSTOMERS

17. BORROWINGS FROM THE STATE BANK OF VIETNAM 19.1 Breakdown by type of deposits

Ending balance Beginning balance Ending balance Beginning balance

VND million VND million VND million VND million
Borrowings to finance credit contracts 231,484 - Demand deposits 44,370,773 38,584,839
Borrowings through discount, rediscount of valuable papers - 3,774,694 Demand deposits in VND 41,073,921 34,710,912
231,484 3,774,694
Demand deposits in foreign currencies 2,761,423 3,177,378

18. DUE TO AND BORROWINGS FROM OTHER CREDIT INSTITUTIONS Demand savings in VND 141,622 153,101
Demand savings in foreign currencies 393,807 543,448
Ending balance Beginning balance
Term deposits 274,534,076 252,335,223
VND million VND million
Due to other credit institutions 7,131,126 3,341,826 Term deposits in VND 22,924,187 18,922,954

Borrowings from other credit institutions 5,517,880 4,767,826 Term deposits in foreign currencies 3,361,783 2,508,109
12,649,006 8,109,652 Term savings in VND 242,185,613 225,972,376
Term savings in foreign currencies 6,062,493 4,931,784
18.1 Due to other credit institutions
Margin deposits 453,908 434,250
Ending balance Beginning balance Margin deposits in VND 359,107 371,473
VND million VND million
Margin deposits in foreign currencies 94,801 62,777
Demand deposits 858,878 173,280
Deposits for specific purposes 275,860 104,550
In VND 850,571 160,019
Deposits for specific purposes in VND 38,881 13,074
In foreign currencies 8,307 13,261
Term deposits 6,272,248 3,168,546 Deposits for specific purposes in foreign currencies 236,979 91,476

In VND 5,550,000 2,200,000 Margin deposits for other settlement services 224,970 194,239
In foreign currencies 722,248 968,546 Margin deposits for other settlement services in VND 212,792 188,626
7,131,126 3,341,826 Margin deposits for other settlement services in foreign currencies 12,178 5,613
319,859,587 291,653,101

204 205
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

19. DUE TO CUSTOMERS (CONTINUED) 21. VALUABLE PAPERS ISSUED

19.2 Breakdown by customer and type of business Valuable papers include certificates of deposits and promissory notes with terms as follows:

Ending balance Beginning balance Ending balance Beginning balance

VND million VND million VND million VND million
Deposits from economic entities 42,462,526 37,094,758 Under 12 months 600 600
From 5 years and above 5,600,786 -
Other private limited companies 13,181,234 11,167,909
5,601,386 600
Other joint stock companies 10,007,002 9,077,391
22. OTHER LIABILITIES
Foreign invested companies 9,204,266 5,734,021
One member limited liability companies of which 100% charter capital is Ending balance Beginning balance
3,011,827 3,745,953
held by the State VND million VND million
The joint stock company of which over 50% of share capital or the Payables for internal activities 516,925 44,909
total voting share capital is held or coordinated by the State under the 2,425,271 3,146,866
company’s charter Payables to employees 487,580 653
Bonus and Welfare fund 1,481 25,790
State-owned companies 1,761,329 1,668,540
Other payables 27,864 18,466
Public administrative units, agencies of the Communist Party, unions and
417,655 338,182 Payables for external activities 1,796,062 1,266,348
associations
Payables for card operations 565,805 457,527
Private companies 368,282 488,310
Payables to intermediary and electronic support payment services 353,686 283
Cooperatives and inter-cooperatives 198,795 107,370
Payables in collecting bad debts 147,377 -
Business households, individuals 110,754 107,180 Payables to customers 136,011 124,222
Limited liability companies with two or more members of which more Tax and other payables to Government budget (Note 23) 94,980 85,281
38,867 44,200
than 50% of the charter capital is held or coordinated by the State Payables to foreign remittance companies 93,949 103,070
Partnerships 7,691 18,497 Deposits for purchase of foreclosed assets 83,751 129,921
Unearned income 57,691 42,023
Others 1,729,553 1,450,339
Payables pending for payment 19,442 24,100
Deposits from individuals 276,925,102 254,328,021
Science and Technology Development Fund 11,836 15,731
Deposits from other entities 471,959 230,322 Dividend payables (Note 24.4) 9,549 10,199

319,859,587 291,653,101 Others 221,985 273,991

2,312,987 1,311,257
20. GRANTS, ENTRUSTED FUNDS AND LOANS EXPOSED TO RISKS
Movements of the Bonus and Welfare Fund during the year are as follows:
Ending balance Beginning balance
VND million VND million Current year Previous year
VND million VND million
Grants, entrusted funds and loans exposed to risks in VND (*) 1,415 250,483
Beginning balance 25,790 77,637
Grants, entrusted funds and loans exposed to risks in foreign currencies (*) 89,560 1,153,672
Profit appropriation to the fund during the year (Note 24.1) 117,126 14,428
90,975 1,404,155 Others - 2
Utilization (141,435) (66,277)
(*) In 2017, the Bank reclassified some grants, entrusted funds and loans exposed to risks in accordance with Ending balance 1,481 25,790
their nature and current regulations of the SBV.

206 207
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

23. STATUTORY OBLIGATIONS 23. STATUTORY OBLIGATIONS (CONTINUED)

Corporate income tax (“CIT”) (continued)

Movements during the year

Beginning Ending Corporate income tax expenses comprised of:

balance Payables Paid Adjustment balance
VND million VND million VND million VND million VND million
Current year Previous year
VND million VND million
Value added tax 25,013 363,634 (354,572) - 34,075
Current tax expenses 278,062 74,744
Corporate income tax (219,647) 278,137 (73,348) (13,758) (28,616)
Adjustment for under accrual of tax from prior years 75 787
Other tax 37,727 249,340 (249,357) - 37,710 Deferred expenses/(income) tax 32,107 (8,549)

(156,907) 891,111 (677,277) (13,758) 43,169 310,244 66,982

In which: Current corporate income tax

Tax advance (Note 16.1) (242,188) (51,811)

The current tax payable is based on taxable profit for the year. Taxable income differs from profit as reported
in the consolidated income statement since it excludes taxable income or deductible expenses in prior years
Tax and other payables to due to the differences between the Bank and its subsidiaries’ accounting policies and the current income tax
85,281 94,980 policies, and also excludes non-taxable income or non-deductible expenses. The current CIT payables are
Government budget (Note 22)
calculated based on the statutory tax rates applicable at the consolidated balance sheet date.

Corporate income tax (“CIT”) expenses

The Bank and its subsidiaries have the obligation to pay corporate income tax at the rate of 20% of taxable
profit for the current year. Sacombank (Cambodia) Plc. have the obligation to pay corporate income tax at the
rate of 20% of taxable profit occurred in Cambodia. Sacombank (Lao) Plc. have the obligation to pay corporate
income tax at the rate of 24% of taxable profit occurred in Lao.

The Bank and its subsidiaries’ tax returns are separately prepared, submitted and settled with the local tax
authorities. Since the application of tax laws and regulations to many types of transactions are susceptible to
varying interpretations, amounts reported in the consolidated financial statements could be changed at a later
date upon final determination by the taxation authorities.

208 209
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

23. STATUTORY OBLIGATIONS (CONTINUED) 23. STATUTORY OBLIGATIONS (CONTINUED)

Corporate income tax (“CIT”) (continued) Corporate income tax (“CIT”) (continued)

Current corporate income tax (continued) Deferred corporate income tax

Reconciliation between CIT expense and the accounting profit multiplied by CIT rate is presented below: Changes in deferred tax assets and effects on the consolidated income statement of the Bank and its
subsidiaries are as follows:
Current year Previous year
VND million VND million
The consolidated The consolidated income
Accounting profit before tax 1,491,804 155,591 balance sheet statement

Adjustments for consolidation of financial statements 250,797 142,876 Beginning

Ending balance balance Current year Previous year
Accounting profit before tax before adjustments for consolidation of
1,742,601 298,467 VND million VND million VND million VND million
financial statements
In which: Deferred tax assets

The Bank 1,483,620 97,259

Provision for investments and others assets 74,226 106,316 (32,160) 10,605
Subsidiaries 258,981 201,208
Deferred tax payables
CIT at applied CIT rate
Depreciation differences (310) (399) 93 (395)
In which:

The Bank 296,724 19,452 Accumulated loss from subsidiaries and other
(23,060) (23,020) (40) (1,661)
assets
Subsidiaries 53,782 42,664
(23,370) (23,419)
Adjustments to increase:

Unrealized foreign exchange loss for the current year 11,756 40,301 Net deferred tax (expenses)/income charged
(32,107) 8,549
to the consolidated income statement
Other non-deductible expenses 16,383 6,742

Provision expense for other assets and investments - 6,402

Non-deductible from subsidiaries 3,446 5,157

Adjustments to decrease:

Other exempt income (78,137) (34,336)

Realized foreign exchange loss of the previous year (39,949) (14,874)

Tax deduction from Southern Commercial Joint Stock Bank - (1,379)

Prior year loss transfer from subsidiaries (1,920) -

Estimate CIT expenses in the year 262,085 70,129

Tax expense for land use rights transfer 15,977 4,615

278,062 74,744

Additional tax paid from 2013 and 2014 75 787

Current CIT expenses for the year 278,137 75,531

210 211
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

24. OWNERS’ EQUITY

24.1 Statement of changes in owners’ equity

Development Capital Foreign

Fund for and supplem- currency
Charter capital Share Treasury investment Financial entary Other translation Retained
capital expenditure premium shares Other capital reserve reserve reserve reserves reserve earnings Total
VND million VNDmillion VND million VND million VND million VND million VND million VND million VND million VND million VND million VND million

Beginning balance 18,852,157 1,121 63,612 (750,911) 653 118,539 1,448,461 863,405 - 253,985 1,340,912 22,191,934

Net profit for the year - - - - - - - - - - 1,181,560 1,181,560

Appropriation to reserves - - - - - - 71,658 36,474 11,105 - (119,237) -

Foreign currency translation reserve - - - - - - - - - (20,085) - (20,085)

Appropriation to Bonus and Welfare Fund - - - - - - - - - - (117,126) (117,126)

(Note 22)

Others - - - - - - - - - - 9 9

Ending balance 18,852,157 1,121 63,612 (750,911) 653 118,539 1,520,119 899,879 11,105 233,900 2,286,118 23,236,292

212 213
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

24. OWNERS’ EQUITY (CONTINUED) 24. OWNERS’ EQUITY (CONTINUED)

24.1 Statement of changes in owners’ equity (continued) 24.4 Dividends

Details of shares issued by the Bank are as follows: Current year Previous year
VND million VND million
Ending balance Beginning balance
Beginning balance 10,199 10,774
Unit Unit
Dividend paid during the year (650) (575)
Number of authorized shares 1,885,215,716 1,885,215,716
Ending balance 9,549 10,199
Number of issued shares 1,885,215,716 1,885,215,716

Ordinary shares 1,885,215,716 1,885,215,716 25. BASIC EARNINGS PER SHARE

Number of treasury shares (81,562,287) (81,562,287) Basic earnings per share are calculated by dividing net profit or loss after tax for the year attributable to ordinary
shareholders of the Bank (after the appropriation of Bonus and Welfare Funds) of by the weighted average
Ordinary shares (81,562,287) (81,562,287) number of ordinary shares outstanding during the year.

Number of outstanding shares 1,803,653,429 1,803,653,429 Diluted earnings per share are calculated by dividing the net profit attributable to the ordinary shareholders of
the Bank (after adjustment for dividends to convertible preference shares) by the weighted average number of
Ordinary shares 1,803,653,429 1,803,653,429 ordinary shares outstanding during the year and the weighted average number of ordinary shares to be issued
in the case that all potential ordinary shares, which diluted, are converted into ordinary shares.
24.2 Reserves of the Bank
Data used in computation of basic earnings per share of the Bank is as follows:
According to Decree No. 93/2017/ND-CP dated 7 August 2017, commercial joint stock banks are required to
appropriate the statutory reserves based on the percentage of net profit after tax as below: Previous year
Current year Restated

Basis for calculation Maximum balance Net profit after tax (VND million) 1,181,560 88,609

Supplementary capital reserve 5% of profit after tax 100% of charter capital Distribution to Bonus and Welfare Fund (VND million) (*) - (25,396)

Decrease of expected bonus for employees approved in the Annual

Financial reserve 10% of profit after tax Not defined General Meeting (181,361) -

Subject to resolution of the Annual general meeting of Net profit after tax attributable to ordinary shareholders (VND million) 1,000,199 63,213
Other reserves Not defined
shareholders
Weighted average number of outstanding ordinary shares in the year (shares) 1,803,653,429 1,803,653,429

The Bank has not yet made statutory reserves from net profit after tax for 2017. Such reserves will be made in Basic earnings per share (VND) 555 35
2018 after getting approval of the shareholders at the Annual General Meeting and the SBV.
(*) Profit used to compute earnings per share for the year 2016 as presented in the financial statements for the
24.3 Subsidiaries’ reserves year 2016 was restated to reflect the actual allocation to Bonus and Welfare Fund from 2016 retained earnings
following the Resolution No. 01/2017/NQ-DHCD dated 30 June 2017 of the Annual General Meeting. Profit
The appropriation of reserves at subsidiaries are made according to the Bank’s decision in each period and in used to compute earnings per share for the year 2017 was not adjusted for the allocation to Bonus and Welfare
accordance with the regulations in Vietnam and the countries in which the Bank’s subsidiaries are operating. Fund from 2017 profit as Resolution of the Annual General Meeting on the distribution of the profit after tax
of the current year is not yet available.
Sacombank (Cambodia) Plc. does not make any reserve in accordance with law in the country where it is operating.
No diluted earnings per share are computed as there is no event or condition which have effect on the dilution
of earnings per share.

214 215
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

26. INTEREST AND SIMILAR INCOME 29. NET GAIN FROM FOREIGN EXCHANGE AND GOLD TRADING

Current year Previous year Current year Previous year

VND million VND million VND million VND million
Interest income from loans to customers and other credit institutions 18,675,132 15,300,182 Income from foreign exchange 496,034 676,034
Interest income from investments in debt securities 2,004,140 1,853,310
- Interest income from trading securities - 26,617 Income from spot foreign exchange 401,905 357,785
- Interest income from investments securities 2,004,140 1,826,693
Income from gold trading 37,180 226,737
Interest income from deposits 128,881 161,296
Income from guarantee services 181,597 177,157 Income from currency derivatives 56,949 91,512
Income from finance leases 151,953 150,192
Income from purshased debts 57,901 14,653 Expenses from foreign exchange (152,155) (411,006)
Income from other credit activities 334,600 211,612
Expenses from spot foreign exchange (28,834) (42,570)
21,534,204 17,868,402
Expenses from gold trading (13,180) (17,858)
27. INTEREST AND SIMILAR EXPENSES
Expenses from currency derivatives (51,268) (152,298)
Current year Previous year Loss from revaluation of foreign currencies, gold and derivative financial
VND million VND million (58,873) (198,280)
instruments
Interest expense on deposits 15,531,009 13,459,009
343,879 265,028
Interest expense on borrowings 291,286 179,981
Interest expense on valuable papers 279,928 2
30. NET GAIN/(LOSS) FROM DEALING OF HELD-FOR-TRADING SECURITIES
Interest expense from other activities 153,946 208,713
16,256,169 13,847,705
Current year Previous year
VND million VND million
28. NET FEE AND COMMISSION INCOME
Income from dealing of held-for-trading securities 6,109 -
Current year Previous year
VND million VND million Expense from dealing of held-for-trading securities (7,877) (14,527)
Fee and commission income 3,439,285 2,112,833
Provision reversal for held-for-trading securities (Note 8) 15,733 13,774
Income from trustee and agency services 963,399 129,932
Income from settlement services 799,748 658,984 13,965 (753)
Income from treasury services 373,364 309,038
Income from warehouse leases 198,323 198,580 31. NET GAIN FROM DEALING OF INVESTMENT SECURITIES
Income from insurance services 74,740 -
Income from remittance services 46,649 39,344 Current year Previous year
Income from other services 983,062 776,955 VND million VND million

Fee and commission expenses (815,454) (682,789) Income from dealing of investment securities 102,548 59,848
Expenses from settlement services (397,135) (294,370)
Expense from dealing of investment securities (14,928) (16,229)
Expenses from postal and communication (209,326) (155,151)
Expenses from brokerage services (68,609) (64,504) Provision reversed for investment securities (Note 13.4) 69,904 2,216
Expenses from treasury services (37,883) (30,635)
Depreciation expenses (32,632) (47,945) 157,524 45,835
Expenses from other services (69,869) (90,184)
2,623,831 1,430,044

216 217
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

32. OTHER INCOME FROM OTHER OPERATING ACTIVITIES 34. OPERATING EXPENSES

Current year Previous year Current year Previous year

VND million VND million VND million VND million

Other operating income 323,744 747,616 Taxes and other fees 110,317 113,317

Personnel expenses 4,108,589 3,110,710

Income from disposal of foreclosed assets 123,567 15,748
In which
Income from recovery of written-off bad debts and special bonds issued
50,943 602,999
by VAMC - Salary and allowances 3,683,736 2,747,354

Income from disposals of fixed assets 6,456 19,614 - Salary-related allowances 295,993 270,162

- Allowances 103,156 69,375

Income from selling securities on credit 83,290 -
- Uniform allowances 25,704 23,819
Dividends from foreclosed securities 2,083 12,696
Asset expenditures 1,273,795 1,210,993
Other income 57,405 96,559 In which:

Other operating expenses (8,537) (10,652) - Depreciation and amortization charges 414,785 392,455

Other operating expense 871,298 792,697

Expenses from disposal of fixed assets - (128)
In which:
Other expenses (8,537) (10,524)
- Business trip expense 30,267 24,861
Other income from other operating activities 315,207 736,964 Insurance expenses for customer deposits 392,548 344,541

(Reversal)/provision expenses for long-term investment (Note 14.2) (203,486) 56,935

33. (LOSS)/GAIN FROM LONG-TERM INVESTMENTS
(Reversal)/provision expenses for other assets (Note 16.4) (216,168) 49,130
Current year Previous year 6,336,893 5,678,323
VND million VND million

Dividends and profit received during the year 16,449 32,152 35. CASH AND CASH EQUIVALENTS

- From trading securities 280 1,303 Cash and cash equivalents included in the consolidated cash flow statement comprise of the following
amounts on the consolidated balance sheet:
- From investment securities 3,077 10,747

Ending balance Beginning balance

- From other long-term investments 13,092 20,102
VND million VND million
Income from disposal of long-term investments 39,838 190 Cash, gold and precious stones 6,212,662 5,872,975

Loss from disposal of long-term investments (143,442) - Balances with central banks 3,002,395 8,954,312

Demand deposits with other credit institutions 6,333,779 1,179,276

(87,155) 32,342
Due from and loans to other credit institutions with term under three months 594,999 1,192,804

16,143,835 17,199,367

218 219
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

36. EMPLOYEES’ INCOME 38. CONTINGENT LIABILITIES AND COMMITMENTS

Current year Previous year

In the normal course of business, the Bank and its subsidiaries are parties to financial instruments which are
recorded as off-balance sheet items. These financial instruments mainly comprise guarantee commitments
I. Total average number of employees (persons) 17,988 16,872 and commercial letters of credit. These instruments involve elements of credit risk out of the items recognized
in the consolidated balance sheet.
II. Employees’ income (VND million)

1. Total salary and advances 3,068,143 2,752,931 Credit risk for off-balance sheet financial instruments is defined as the possibility of sustaining a loss because
any other party to a financial instrument fails to perform in accordance with the terms of the contract.
2. Bonus 515,219 250,560

3. Total income (1+2) 3,583,362 3,003,491 Financial guarantees are conditional commitments issued by the Bank and its subsidiaries to guarantee the
performance of a customer to a third party including guarantee for borrowings, settlement, performing
4. Average salary per month (VND/person) 14,213,842 13,597,138 contracts and bidding. The credit risk involved in issuing guarantees is essentially the same as that involved in
extending loans and finance leases to other customers.
5. Average income per month (VND/person) 16,600,706 14,834,692

Commercial at sight letters of credit represent a financing transaction by the Bank and its subsidiaries to
37. COLLATERALS AND MORTGAGES their customer who is usually the buyer/importer of goods and the beneficiary is typically the seller/exporter.
Credit risk from this type of letters of credit is limited as the merchandise shipped serves as collateral for the
37.1 Assets and valuable papers of customers and other credit institutions pledged, discounted and re-discounted transaction.
Types and book value of collaterals of customers at the year-end are as follows:
Deferred payment letters of credits represent the amounts at risk should the contract be fully effected but the
client defaults in repayment to the beneficiary. Deferred payment letters of credit that defaulted by clients are
Ending balance Beginning balance recognized by the Bank and its subsidiaries as granting of a compulsory loan with a corresponding liability
VND million VND million representing the financial obligation of the Bank and its subsidiaries to pay the beneficiaries and to fulfil the
Real estate properties 306,001,481 272,861,101 guarantor obligation.

Valuable papers 33,349,823 31,007,741 Guarantee commitment is the commitment issued by the Bank and its subsidiaries to guarantee the
performance of the customers to a third party including guarantee for borrowings, settlement, performing
Transportation vehicles 23,019,445 20,224,815
contracts and bidding. Credit risk of the borrowing guarantee, settlement guarantee in general is essentially
Inventories 6,274,860 5,148,331 the same as that involved in extending loans and finance leases to other customers, while other guarantees,
the risk is lower.
Machines and equipment 5,480,834 5,101,618

Other assets 42,020,883 37,723,286 Risk of the letter of credit is usually lower, in condition that the Bank and its subsidiaries can control goods.
Deferred letter of credit may have contingent risk higher than at sight letter of credit. Deferred payment
416,147,326 372,066,892 letters of credit that were defaulted by clients are recognized by the Bank and its subsidiaries as granting
of a compulsory loan with a corresponding liability representing the financial obligation of the Bank and its
37.2 Assets and valuable papers pledged, discounted and re-discounted at other credit institutions subsidiaries to pay the benificiaries and to fulfill the guarantor obligation.

Details of assets and valuable papers of the Bank and its subsidiaries pledged, discounted and re-discounted
at other credit institutions at the year-end are as follows:

Ending balance Beginning balance

VND million VND million

Government bonds (Note 13) 8,919,232 9,636,738

Bonds issued by domestic credit institutions (Note 13) 50,610 160,785

8,969,842 9,797,523

220 221
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

38. CONTINGENT LIABILITIES AND COMMITMENTS (CONTINUED) 39. RELATED PARTY TRANSACTIONS

The Bank and its subsidiaries require margin deposits to support credit-related financial instruments when Related party transactions include all transactions undertaken with other entities to which the Bank and its
it is deemed necessary. The margin deposit required varies from nil to 100% of the value of a commitment subsidiaries are related. Parties are considered as related parties if one party is able to control over or significantly
granted, depending on the creditworthiness of clients as assessed by the Bank and its subsidiaries. influence the other party in making decision of financial and operational policies. A party is deemed to be
related to the Bank and its subsidiaries if:
The currency trading commitments are commitments to purchase, sell at spot and currency swap
commitments. Commitments to purchase, sell at spot are commitments to purchase, sell currency according (a) Directly, or indirectly through one or more intermediaries, the party:
to exchange rate dealt and payment within 2 (two) days since transaction date. Currency swap commitments
are commitments to purchase and sell with the same notional principal amount (only two currencies used for »» control or is controlled by or is under common control with the Bank (including parents and subsidiaries);
transaction) to one client, including one transaction for term payment at spot and one transaction for term
»» as an interest (owning 5% or more of the charter capital or voting share capital) in the Bank and its
h
payment in the future with the exchange rate of both transactions determined at spot transaction date.
subsidiaries that gives it significant influence over the Bank and its subsidiaries;
Details of outstanding commitments and contingent liabilities are as follows: »» has joint control over the Bank and its subsidiaries;

(b) The party is a joint venture in which the Bank and its subsidiaries are a venture or an associate (owning over
Ending balance Beginning balance
VND million VND million 11% of the charter capital or voting share capital, but is not a subsidiary of the Bank);

Letters of credit 7,636,582 9,281,484 (c) The party is a member of the key management personnel of the Bank and its subsidiaries;
Commitments for foreign exchange contracts 14,441,368 12,049,416
(d) The party is a close member of the family of any individual referred to in (a) or (c); or
- Commitments on buying foreign currencies 1,105,091 282,991
(e) The party is an entity that is, directly or indirectly, controlled, jointly controlled or significantly influenced by,
- Commitments on selling foreign currencies 842,824 521,615 or of which, significant voting power in such entity resides with any individual referred to in (c) or (d).
- Commitments on swap 12,493,453 11,244,810
Significant transactions with related parties for the year are as follows:
Guarantees for borrowings 17,766 34,126
Current year Previous year
Other guarantees 8,415,947 4,606,175 Related party Transactions VND million VND million
30,511,663 25,971,201 Key management Interest income from loans 1,920 2,176

Less: Margin deposits (322,823) (294,817) Interest expenses on deposits (5,556) (4,965)

Contingent liabilities and commitments 30,188,840 25,676,384 Fee and commission income 58 48

Post-tax remuneration of members of the (25,952) (15,554)

Results of the loan classification as required by Circular 02, Circular 09 and the Bank and its subsidiaries’ policy Board of Director and Board of Supervisors
on loan classification and provision are as follows: Post-tax income of members of the Board of (81,026) (89,483)
Management
Ending balance Beginning balance Related parties of key Interest income from loans 59,085 1,907
VND million VND million management
Interest expenses on deposits (5,960) (6,595)
Current loans 16,070,295 13,921,785
Fee and commission income 80 53
In which:
Interest expenses on borrowings (341) (202)
- Letters of credit 7,636,582 9,281,484 Main shareholders (own
more than 5% of the Gain from foreign currecy trading 424 546
- Guarantees for borrowings 17,766 34,126 Bank’s charter capital) Loss from foreign currecy trading (285) (15,854)
- Other guarantees 8,415,947 4,606,175 Related parties to main Interest expenses on deposits (70) (1,197)
shareholders
Fee and commission income 30 14

222 223
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

39. RELATED PARTY TRANSACTIONS (CONTINUED) 40. CONCENTRATION OF ASSETS, LIABILITIES AND OFF-BALANCE-SHEET ITEMS BY
GEOGRAPHICAL REGIONS
Receivables and payables with related parties as at the year-end are as follows:
Domestic Overseas Total
Ending balance Beginning balance VND million VND million VND million
Related party Transactions VND million VND million
Assets as at 31 December 2017
Key management Loans 22,006 419,002
Due from and loans to other credit institutions - gross 5,612,208 1,761,164 7,373,372
Deposits (102,230) (115,680)
Derivatives and other financial assets (Nominal amount) 6,423,674 429,401 6,853,075
Certificate of deposits (3,556) -
Loans and finance leases to customers - gross 218,290,369 4,656,261 222,946,630
Other receivables 305 238,086
Purchased debts - gross 648,763 - 648,763
Other payables (1,223) (824)
Trading and investment securities - gross 75,336,824 561 75,337,385
Related parties of key management Loans 27,964 26,634
Long-term investments - gross 320,934 - 320,934

Deposits (116,381) (120,271) Liabilities as at 31 December 2017

Certificate of deposits (12,050) - Borrowings from the SBV 231,484 - 231,484

Other receivables 125 112 Due to and borrowings from other credit institutions 10,512,240 2,136,766 12,649,006

Other payables (1,588) (1,480) Due to customers 315,599,285 4,260,302 319,859,587

Related parties to main shareholders Deposits (13,155) (9,959) Grants, entrusted funds and loans exposed to risks - 90,975 90,975

Valuable papers issued 5,601,386 - 5,601,386

Off-balance-sheet commitments as at 31 December 2017 27,825,868 2,685,795 30,511,663

224 225
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

41. SEGMENT REPORT

41.1 Main segment report: by geographical region

Information on income, expenses, assets and liabilities by geographical region of the Bank and its subsidiaries as
at 31 December 2017 is as follows:

Total segment
South North Central Laos Cambodia reported Eliminations Total
VND million VND million VND million VND million VND million VND million VND million VND million

Interest and similar income 23,522,298 4,152,490 3,970,019 220,517 214,357 32,079,681 (10,545,477) 21,534,204

Interest and similar expenses (21,221,660) (2,939,605) (2,453,110) (104,072) (83,199) (26,801,646) 10,545,477 (16,256,169)

Net interest and similar income 2,300,638 1,212,885 1,516,909 116,445 131,158 5,278,035 - 5,278,035

Non-interest income 2,972,333 201,591 142,054 16,720 34,553 3,367,251 - 3,367,251

TOTAL OPERATING INCOME 5,272,971 1,414,476 1,658,963 133,165 165,711 8,645,286 - 8,645,286

TOTAL OPERATING EXPENSES (4,810,028) (679,269) (620,406) (96,354) (130,836) (6,336,893) - (6,336,893)

Profit before credit loss expenses 462,943 735,207 1,038,557 36,811 34,875 2,308,393 - 2,308,393

Credit loss expenses (719,896) - - (5,867) (90,826) (816,589) - (816,589)

PROFIT BEFORE TAX (256,953) 735,207 1,038,557 30,944 (55,951) 1,491,804 - 1,491,804

Corporate income tax expenses (291,514) - - (7,427) (11,303) (310,244) - (310,244)

PROFIT AFTER TAX (548,467) 735,207 1,038,557 23,517 (67,254) 1,181,560 - 1,181,560

ASSETS

Cash and gold 4,159,073 972,490 844,228 67,300 169,571 6,212,662 - 6,212,662

Balances with central banks 1,727,277 64,298 174,013 392,347 644,460 3,002,395 - 3,002,395

Due from and loans to other credit institutions 6,600,580 2,467 1,890 537,699 230,184 7,372,820 - 7,372,820

Loans and finance leases to customers 150,963,280 28,677,540 36,082,891 1,961,022 2,513,019 220,197,752 - 220,197,752

Purchased debts 643,784 - - - - 643,784 - 643,784

Investments 73,415,453 - - - 561 73,416,014 - 73,416,014

Other assets 56,155,923 677,773 835,019 358,351 158,265 58,185,331 (561,918) 57,623,413

TOTAL ASSETS 293,665,370 30,394,568 37,938,041 3,316,719 3,716,060 369,030,758 (561,918) 368,468,840

LIABILITIES

Borrowings from the SBV 231,484 - - - - 231,484 - 231,484

Due to and borrowings from other credit institutions 10,779,152 703,053 10,088 460,287 696,426 12,649,006 - 12,649,006

Due to customers 224,437,231 55,262,722 36,563,557 1,570,854 2,025,223 319,859,587 - 319,859,587

Other liabilities 8,016,998 3,088,041 1,765,241 128,550 55,559 13,054,389 (561,918) 12,492,471

TOTAL LIABILITIES 243,464,865 59,053,816 38,338,886 2,159,691 2,777,208 345,794,466 (561,918) 345,232,548

226 227
228
41.

41.2

Interbank:
customers:

Investments:
Individual customers and corporate
SEGMENT REPORT (CONTINUED)

»»
»»
»»
Secondary segment report: by business sector

clients include:
as at and for the year ended 31 December 2017 (continued)

customer deposits;
loans and advances to customers;

activities with other credit institutions.

card services and remittance services.

Securities investments and other long-term investments.

The products and services provided to individual and corporate
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For management purposes, the Bank and its subsidiaries are organized into sectors based on the followings:

Placements from and to; borrowings, lending and other interbank

B05/TCTD-HN

41. SEGMENT REPORT (CONTINUED)

41.2 Secondary segment report: by business sector (continued)

Information on assets and liabilities of the business sectors of the Bank and its subsidiaries as at 31 December 2017 is as follows:

Individual and
corporate Un-allocated
customers Investments Interbank general activities Total
VND million VND Million VND Million VND million VND Million
ASSETS
Cash, gold and precious stones - - - 6,212,662 6,212,662
Balances with central banks - - 3,002,395 - 3,002,395
Due from and loans to other credit institutions - - 7,372,820 - 7,372,820
Trading securities - 63,250 - - 63,250
Derivatives and other financial assets - - 20,251 - 20,251
Loans and finance leases to customers 220,197,752 - - - 220,197,752
Purchased debts 643,784 - - - 643,784
as at and for the year ended 31 December 2017 (continued)

Investment securities - 73,188,580 - - 73,188,580

Long-term investments - 164,184 - - 164,184
Fixed assets - - - 8,100,996 8,100,996
Other assets 37,279,367 2,296,922 43,299 9,882,578 49,502,166
TOTAL ASSETS 258,120,903 75,712,936 10,438,765 24,196,236 368,468,840
LIABILITIES
Borrowings from the SBV - - 231,484 - 231,484
Due to and borrowings from other credit institutions - - 12,649,006 - 12,649,006
Due to customers 319,859,587 - - - 319,859,587
Grants, entrusted funds and loans exposed to risks - - 90,975 - 90,975
Valuable papers issued 5,601,386 - - - 5,601,386
Other liabilities 6,051,818 - 41,645 706,647 6,800,110
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

TOTAL LIABILITIES 331,512,791 - 13,013,110 706,647 345,232,548

Segmental information on income and expenses is not presented as the Bank and its subsidiaries has not established management information
system to collect these information.
229
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 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

42. RISK MANAGEMENT POLICY FOR FINANCIAL INSTRUMENTS 42. RISK MANAGEMENT POLICY FOR FINANCIAL INSTRUMENTS (CONTINUED)

Risk is inherent in the Bank and its subsidiaries’ activities and is managed through a process of ongoing (vi) Risk measurement and reporting systems (continued)
identification, measurement and monitoring, subject to risk limits and other controls. This process of risk
management is critical to the Bank and its subsidiaries’ continuing profitability and each individual within the Information compiled from all business activities is examined and processed in order to analyze, control
Bank and its subsidiaries is accountable for the risk prevention within their responsibilities. The Bank and its and early identify risks. This information is presented and explained to the Board of Management, Board
subsidiaries are exposed to credit risk, liquidity risk and market risk (then being subdivided into trading and of Directors, and the department heads. The report includes aggregate credit exposure, credit metric
non-trading risks). It is also subject to various operational risks. forecasts, limit exceptions, liquidity ratios and risk profile changes. The Board of Directors assesses the
appropriateness of the allowance for credit losses on a quarterly basis. The Board of Directors receives a
The independent risk control process does not include business risks such as changes in the environment,
comprehensive risk report quarterly which is designed to provide all the necessary information to assess
technology and industry. The Bank’s policy is to monitor those business risks through the Bank and its
and conclude on the risks of the Bank and its subsidiaries.
subsidiaries’ strategic planning process.

(i) Risk management structure For all levels throughout the Bank and its subsidiaries, specifically tailored risk reports are prepared and
distributed in order to ensure that all business departments have access to extensive, necessary and up-
The Board of Management is ultimately responsible for identifying and controlling risks. However, each to-date information.
separate member shall be responsible for managing and monitoring risks.
(vii) Risk mitigation
(ii) Board of Management
The Bank and its subsidiaries actively use collaterals to reduce its credit risks.
The Board of Management is responsible for monitoring the overall risk management process within the
Bank and its subsidiaries. (viii) Excessive risk concentration
(iii) Risk Management Committee
Concentrations arise when a number of counterparties are engaged in similar business activities, or
Risk Management Committee advises the Board of Management in the promulgation of procedures and activities in the same geographic region, or have similar economic features that would affect the group
policies under their jurisdiction relating to risk management in the Bank and its subsidiaries’ activities. of customers’ payment obligations or payment receipt rights when due under changes in economic,
political or other conditions.
Risk Management Committee analyses and provides warnings on the potential risks that may affect the
Bank and its subsidiaries’ operation and preventive measures in the short term as well as long term. These above concentrations indicate the relative sensitivity of the Bank and its subsidiaries’ performance
to the development of a particular industry or geographic allocation.
Risk Management Committee reviews and evaluates the appropriateness and effectiveness of the risk
management of procedures and policies of the Bank and its subsidiaries to make recommendations to the In order to avoid excessive concentrations of risk, the Bank and its subsidiaries’ policies and procedures
Board of Management on the improvement of procedures, policies and operational strategies. include specific guidelines to focus on maintaining a diversified portfolio. Identified concentrations of
(iv) Board of Supervisors credit risk are controlled and managed accordingly. Selective hedging is used within the Bank and its
subsidiaries in respect of the industries and other related factors.
The Board of Supervisors has the responsibility to control the overall risk management process within the
Bank and its subsidiaries. 43. CREDIT RISK

(v) Internal Audit Credit risk is the risk that the Bank and its subsidiaries will incur a loss because its customers or counterparties
fail to discharge their contractual obligations.
According to the annual internal audit plan, business processes throughout the Bank and its subsidiaries
are audited annually by the internal audit function, which examines both the adequacy of the procedures
The Bank and its subsidiaries manage and control credit risk by setting limits on the amount of risk it is willing
and compliance with procedures. Internal Audit discusses the results of all assessments with the Board of
to accept for individual counterparties and for geographical and industry concentrations, and by monitoring
Directors, and reports its findings and recommendations to the Board of Supervisors.
exposures in relation to such limits.
(vi) Risk measurement and reporting systems
The Bank and its subsidiaries have established a credit quality review process to provide early identification
The Bank and its subsidiaries’ risks are measured using a method which reflects both the expected loss of possible changes in the financial position and creditworthiness of counterparties based on qualitative and
likely to arise in normal circumstances and unexpected losses, which are an estimate of the ultimate actual quantitative indicators. Counterparty’s limits are established by the use of a credit rating system, which assigns
loss based on statistical models. each counterparty a risk rating. Risk ratings are subject to regular revision.

Monitoring and controlling of risks is primarily performed based on limits established by the Bank and its
subsidiaries in compliance with the SBV’s regulations. These limits reflect the business strategy and market
environment of the Bank and its subsidiaries as well as the level of risk that the Bank and its subsidiaries is
willing to accept.

230 231
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

43. CREDIT RISK (CONTINUED) 43. CREDIT RISK (CONTINUED)

43.1 Maximum exposure to credit risk before collateral held or other credit enhancements 43.3 Financial assets past due but not impaired (continued)

The maximum exposures to credit risk relating to each group of financial assets, which are equivalent to their Loans and finance leases to customers past due but not impaired are loans which are overdue but no
book values on the consolidated balance sheet, are listed below: provision is required as these loans are secured adequately by collaterals under the form of deposits, real
estates, movable assets, valuable papers and other assets.
Ending balance Beginning balance
Receivables past due but not impaired are the receivables which are overdue under six (6) months and no
VND million VND million
provision is required in accordance with Circular 228 and Circular 89.
Credit risk exposures of balance sheet items
Due from and loans to other credit institutions 7,373,372 2,484,888 44. MARKET RISKS
Derivatives financial instruments 20,251 15,422
Loans and finance leases to customers 44.1 Interest rate risk
- Individuals 130,864,302 104,049,984
- Coporates 92,082,328 94,809,681 Interest rate risk arises from the possibility that changes in interest rates will affect the fair values of financial
Purchased debts 648,763 757,528 instruments. The Bank and its subsidiaries are exposed to interest rate risk as a result of mismatches of maturity
Investment securities dates or dates of interest rate re-pricing in respect of assets, liabilities and off-balance sheet instruments over a
- Debt securities – available-for-sale 50,610 175,788 certain period. The Bank and its subsidiaries manage this risk by matching the dates of interest rate re-pricing
- Debt securities – held-to-maturity 45,266,699 38,300,913 of assets and liabilities through risk management strategies.
Other financial assets 39,640,864 32,269,515
Credit risk exposures of off-balance sheet items Analysis of assets and liabilities based on interest rate re-pricing date
Financial guarantees 8,433,713 4,640,301
Re-pricing term of the effective interest rate is the remaining period from the date of the consolidated financial
Letter of credit 7,636,582 9,281,484
statements to the nearest re-pricing date of interest rate applicable to assets and equity.
This table presents the worst scenario which the Bank and its subsidiaries will incur the maximum credit The following assumptions and conditions are used in analysis of the re-pricing period of interest rates of the
exposures as at 31 December 2017 and 2016, without taking into account of any collateral held or their credit Bank’s assets and liabilities:
enhancements.
»» ash, gold and precious stones; investment in equity securities; long-term investment and other assets
C
43.2 Financial assets neither past due nor impaired (including fixed assets, investment properties and other assets) are classified as non-interest bearing items.
The Bank and its subsidiaries’ financial assets which are neither past due nor impaired include loans and finance »» The re-pricing term of balances with the SBV is considered as up to 1-month.
leases to customers classified as Group 1 (Current) in accordance with Circular 02 and Circular 09; securities, »» T he re-pricing term of investment securities and trading securities is calculated based on the time to
receivables and other financial assets which are not past due and no provision is required in accordance maturity from the balance sheet date for each type of securities.
with Circular 228 and Circular 89 except for some accrued interest receivables are allowed to be blocked and
gradually allocated to the consolidated operating expenses (Note 16.2) according to the Restructuring Plan. »» T he re-pricing term of placements with other banks and loans to other banks; loans and finance leases
to customers; borrowings from the Government and SBV; placements from other credit institutions and
43.3 Financial assets past due but not impaired borrowings from other credit institutions; customer deposits and grants, entrusted funds and loans
exposed to risks are determined as follows:
The age of financial assets past due but not impaired as at 31 December 2017 is presented below:
- Items which bear fixed interest rate during the contractual term: The re-pricing term is determined
based on the time to maturity from the balance sheet date.
Overdue

Less From 91 From 181 to Over - Items which bear floating interest rate: The re-pricing term is determined based on the time to the
than 90 days to 180 days 360 days 360 days Total nearest interest rate re-pricing date from the balance sheet date.
VND million VND million VND million VND million VND million
»» T he re-pricing term of valuable papers is determined based on the time to the nearest interest rate re-
Loans and finance leases to pricing date from the balance sheet date.
135,457 22,120 24,674 181,016 363,267
customers

Receivables 2,169 25 - - 2,194 The following table presents the interest re-pricing period of the Bank and its subsidiaries’ assets and liabilities
as at 31 December 2017.
137,626 22,145 24,674 181,016 365,461

232 233
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

44. MARKET RISKS (CONTINUED)

44.1 Interest rate risk (continued)

Interest re-pricing period

Non-interest Up to From 1 to From 3 to From 6 to From 1 to Over

Overdue bearing 1 month 3 months 6 months 12 months 5 years 5 years Total
VND million VND million VND million VND million VND million VND million VND million VND million VND million

Assets

Cash, gold and precious stones - 6,212,662 - - - - - - 6,212,662

Balances with central banks - 392,347 2,610,048 - - - - - 3,002,395

Due from and loans to other credit institutions - gross 552 - 7,050,974 248,489 - 73,357 - - 7,373,372

Trading securities - gross - 63,250 - - - - - - 63,250

Derivatives and financial assets - 20,251 - - - - - - 20,251

Loans and finance leases to customers - gross 11,303,929 - 75,157,364 129,492,389 753,145 1,104,881 3,455,498 1,679,424 222,946,630

Purchased debts - gross - - - 648,763 - - - - 648,763

Investment securities - gross - 43,513,757 600,143 853,076 152,051 3,304,149 26,790,998 59,961 75,274,135

Long-term investments - gross - 320,934 - - - - - - 320,934

Fixed assets - 8,100,996 - - - - - - 8,100,996

Other assets - gross 1,195,135 40,529,984 - 1,220 4,485 4,695 8,280,000 - 50,015,519

Total assets 12,499,616 99,154,181 85,418,529 131,243,937 909,681 4,487,082 38,526,496 1,739,385 373,978,907

Liabilities

Borrowings from the SBV - - 6,257 225,227 - - - - 231,484

Due to and borrowings from other credit institutions - - 4,671,473 7,516,502 388,767 72,264 - - 12,649,006

Due to customers - 705,145 125,889,391 62,115,936 45,256,843 43,875,257 41,956,929 60,086 319,859,587

Grants, entrusted funds and loans exposed to risks - - - - - 90,975 - - 90,975

Valuable papers issued - 600 - 2,737,590 - 2,863,196 - - 5,601,386

Other liabilities - 6,800,110 - - - - - - 6,800,110

Total liabilities - 7,505,855 130,567,121 72,595,255 45,645,610 46,901,692 41,956,929 60,086 345,232,548

Interest sensitivity gap 12,499,616 91,648,326 (45,148,592) 58,648,682 (44,735,929) (42,414,610) (3,430,433) 1,679,299 28,746,359

Interest rate sensitivity

No analysis on interest rate sensitivity was performed at 31 December 2017 due to unavailability of sufficient
data and technology.

234 235
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

44. MARKET RISKS (CONTINUED)

44.2 Currency risk

Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates.

The Bank and its subsidiaries are incorporated and operating in Vietnam with reporting currency as VND. The
major currency of its transaction is also VND, some transactions are denominated in gold, USD, EUR and other
foreign currencies, except for Sacombank (Lao) Plc. with LAK as trading currency and Sacombank (Cambodian)
Plc. with US dollar as principal currency. The Bank and its subsidiaries has set limits to control the positions of
the currencies. Positions are monitored on a daily basis and hedging strategies are used to ensure positions of
the currencies to be maintained within the established limits.

The following table presents assets and liabilities in foreign currencies translated into VND as at 31 December 2017:

Other foreign
EUR USD Gold currencies
equivalent to equivalent to equivalent to equivalent to Total
VND million VND million VND million VND million VND million
Assets
Cash, gold and precious stones 202,332 1,094,168 100,196 697,213 2,093,909
Balances with central banks - 1,468,555 - 293,827 1,762,382
Due from and loans to other credit institutions - gross 22,429 1,333,120 - 487,908 1,843,457
Derivatives and financial assets 48,836 - - 43,859 92,695
Loans and finance leases to customers - gross 13,697 11,265,850 405,295 1,854,390 13,539,232
Purchase debts - gross - 648,763 - - 648,763
Investment securities - gross - 561 - - 561
Fixed assets - 42,625 - 302,439 345,064
Other assets - gross 248 435,941 32 47,640 483,861
Total assets 287,542 16,289,583 505,523 3,727,276 20,809,924
Liabilities
Due to and borrowings from other credit institutions 8 2,907,989 - 369,881 3,277,878
Due to customers 243,255 11,148,409 6,431 1,525,369 12,923,464
Derivatives and financial liabilities - 1,096,282 - 335,925 1,432,207
Grants, entrusted funds and loans exposed to risks - - - 89,560 89,560
Valuable papers issued - 4 - - 4
Other liabilities 6,100 337,045 - 37,453 380,598
Total liabilities 249,363 15,489,729 6,431 2,358,188 18,103,711
Foreign exchange position on-balance sheet 38,179 799,854 499,092 1,369,088 2,706,213
Foreign exchange position off-balance sheet (51,522) 663,254 (69,767) (279,497) 262,468
Foreign exchange position on and off - balance sheet (13,343) 1,463,108 429,325 1,089,591 2,968,681

236 237
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

44. MARKET RISK (CONTINUED) 44. MARKET RISK (CONTINUED)

44.2 Currency risk (continued) 44.3 Liquidity risk (continued)

Foreign currency sensitivity The following assumptions and conditions are applied in the analysis of maturity of the Bank and its subsidiaries’
assets and liabilities:
No analysis on foreign currency sensitivity was performed as at 31 December 2017 due to unavailability of
sufficient data and technology. »» Balances with the central banks are classified as demand deposits which include compulsory deposits;

»» T he maturity term of investment securities is calculated based on the maturity date of each kind of
44.3 Liquidity risk securities; except for the maturity term of investments in Government bonds and bonds issued by the
Vietnam Development Bank is considered within one month because of their high liquidity;
Liquidity risk is the risk which the Bank and its subsidiaries have difficulties in meeting the obligations of financial
liabilities. Liquidity risk occurs when the Bank and its subsidiaries cannot afford to settle debt obligations at »» T he maturity term of due from and loans to other credit institutions, loans and finance leases to customers
the due dates in the normal or stress conditions. To manage the liquidity risk exposure, the Bank and its is determined based on the maturity date as stipulated in contracts. The actual maturity term may be
subsidiaries have diversified the mobilization of deposits from various sources in addition to its basic capital altered because loan contracts may be extended;
resources. In addition, the Bank has established policy for control of liquidity assets flexibly; monitor the future
cash flows and daily liquidity. The Bank and its subsidiaries have also evaluated the estimated cash flows and »» T he maturity term of bad debts will be resolved following to the Restructuring Plan as approved by the
the availability of current collateral assets in case of obtaining more deposits. SBV is determined from 1 to 5 years;

»» T he maturity term of long-term investments is considered as more than one year because these
The maturity term of assets and liabilities is the remaining period of assets and liabilities as calculated from the
investments do not have specific maturity date;
balance sheet date to the settlement date in accordance with contractual terms and conditions.
»» T he maturity term of due to and borrowings from other credit institutions, customer deposits are
determined based on features of these items or the maturity date as stipulated in contracts. Vostro
account and demand deposits are transacted as required by customers, and therefore, classified as current
accounts. The maturity term of borrowings and term deposits is determined based on the maturity date in
contracts. In practice, these amounts may be rolled over, and therefore, they may last beyond the original
maturity date;

»» The maturity term of fixed assets is determined based on the remaining useful life of assets.

238 239
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

44. MARKET RISK (CONTINUED)

44.3 Liquidity risk (continued)

The following table presents the Bank and its subsidiaries’ assets and liabilities by relevant maturity based
on the remaining period calculated as at 31 December 2017. In fact, these amounts may be rotated, and
therefore, they last beyond the original maturity date.

Overdue Current

Above Up to Up to From 1 to 3 From 3 to 12 From 1 to 5 Above

3 months 3 months 1 month months months years 5 years Total
VND million VND million VND million VND million VND million VND million VND million VND million

Assets

Cash, gold and precious stones - - 6,212,662 - - - - 6,212,662

Balances with central banks - - 3,002,395 - - - - 3,002,395

Due from and loans to other credit institutions - gross 552 - 7,050,974 248,489 73,357 - - 7,373,372

Trading securities - gross - - - 63,250 - - - 63,250

Derivatives and financial assets - - 20,251 - - - - 20,251

Loans and finance leases to customers - gross 2,791,380 899,241 11,767,796 22,748,313 62,249,648 67,521,652 54,968,600 222,946,630

Purchased debts - gross - - - - - - 648,763 648,763

Investment securities - gross - - 29,460,378 246,497 - 2,300,000 43,267,260 75,274,135

Long-term investments - gross - - - - - - 320,934 320,934

Fixed assets - - 18,180 956 8,847 540,627 7,532,386 8,100,996

Other assets - gross 1,195,135 - 5,451,456 643,081 3,596,913 14,717,412 24,411,522 50,015,519

Total assets 3,987,067 899,241 62,984,092 23,950,586 65,928,765 85,079,691 131,149,465 373,978,907

Liabilities

Borrowings from the SBV - - 6,257 24,009 80,251 120,220 747 231,484

Due to and borrowings from other credit institutions - - 4,045,304 6,696,743 904,754 998,869 3,336 12,649,006

Due to customers - - 126,465,136 62,117,388 89,149,431 42,067,548 60,084 319,859,587

Grants, entrusted funds and loans exposed to risks - - - - 90,267 708 - 90,975

Valuable papers issued - - 600 - - 439,770 5,161,016 5,601,386

Other liabilities - gross - - 2,855,241 1,622,265 1,933,604 379,461 9,539 6,800,110

Total liabilities - - 133,372,538 70,460,405 92,158,307 44,006,576 5,234,722 345,232,548

Net liquidity gap 3,987,067 899,241 (70,388,446) (46,509,819) (26,229,542) 41,073,115 125,914,743 28,746,359

240 241
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

44. MARKET RISK (CONTINUED) 46. SUPPLEMENTAL NOTES ON FINANCIAL ASSETS AND FINANCIAL LIABILITIES ACCORDING TO
CIRCULAR NO. 210/2009/TT-BTC (CONTINUED)
44.4 Other market risks
Financial assets
Except for the assets and liabilities presented above, the Bank and its subsidiaries has no other market price
Financial assets of the Bank and its subsidiaries within the scope of Circular 210 comprise cash, gold, precious
risks which have risk level accounting for 5% or more of net profit or the value of assets, liabilities accounting
stones, balances with State Bank, due from other credit institutions, loans and finance leases to customers
for 5% or more of total assets.
and other credit institutions, trading and investment securities, receivables and other assets under currency
45. EXPENDITURE, OPERATING LEASE COMMITMENTS AND FIDUCIARY ASSETS derivative contracts.
According to Circular 210, financial assets are classified appropriately, for the purpose of disclosure in these
45.1 Expenditure commitments
consolidated financial statements, into one of the following categories:

Ending balance Beginning balance »» A financial asset at fair value through profit or loss:
VND million VND million
Is a financial asset that meets either of the following conditions:
Construction costs and office equipment acquisition 165,654 88,105
(a) It is classified as held-for-trading. A financial asset is classified as held-for-trading if:

45.2 Operating lease commitments - It is acquired or incurred principally for the purpose of selling or repurchasing it in the near term; or
- There is evidence of a recent actual pattern of short-term profit-taking; or
Ending balance Beginning balance
VND million VND million - It is a derivative (except for a derivative that is a financial guarantee contract or a designated and
effective hedging instrument).
Irrevocable operating lease commitments 2,789,427 2,381,838
(b) Upon initial recognition, it is designated by the Bank and its subsidiaries as at fair value through profit or loss.
In which:
»» Held-to-maturity investments:
- Due within one year 388,645 343,942
Are non-derivative financial assets with fixed or determinable payments and fixed maturity that the Bank
- Due from one to five years 1,149,905 944,700 and its subsidiaries has the positive intention and ability to hold to maturity other than:
- Due after five years 1,250,877 1,093,196 (a) Those that the Bank and its subsidiaries upon initial recognition designated as at fair value through
profit or loss;
45.3 Fiduciary assets
(b) Those that the Bank and its subsidiaries designates as available for sale;

Ending balance Beginning balance (c) Those that meet the definitions of loans and receivables.
VND million VND million
»» Loans and finance leases to customers and receivables:
Gold kept on behalf of customers 249,575 882,250
Are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market other than:
46. SUPPLEMENTAL NOTES ON FINANCIAL ASSETS AND FINANCIAL LIABILITIES ACCORDING TO
CIRCULAR NO. 210/2009/TT-BTC (a) Those that the Bank and its subsidiaries intends to sell immediately or in the near term, which shall
be classified as held-for-trading, and those that the Bank and its subsidiaries upon initial recognition
On 6 November 2009, the Ministry of Finance issued Circular No. 210/2009/TT-BTC providing guidance for the designated as at fair value through profit or loss;
adoption in Vietnam of the International Financial Reporting Standards on presentation and disclosures of
financial instruments (“Circular 210”) which is effective for financial years beginning on or after 1 January 2011. (b) Those that the Bank and its subsidiaries upon initial recognition designated as available-for-sale; or
(c) Those for which the Bank and its subsidiaries may not recover substantially all of its initial investment,
The Circular 210 only provides for the presentation and disclosures of financial instruments; therefore, the other than because of credit deterioration, which shall be classified as available for sale.
concepts of financial assets, financial liabilities and related concepts are applied solely for the supplemental
presentation. Assets, liabilities and equity of the Bank and its subsidiaries have been recognized and measured »» Available-for-sale assets:
in accordance with the Vietnamese Accounting Standards, Vietnamese Accounting System for Credit
Are non-derivative financial assets that are designated as available-for-sale or are not classified as:
Institutions, the official approvals for the Post-merger Restructuring Plan of the State Bank of Vietnam and the
Bank’s proposals in the Restructuring Plan in relation to accrued interest receivables, VAMC’s special bonds, (a) Loans and receivables;
bad debts, doubtful assets and equity investments during the restructuring period and statutory requirements
relevant to preparation and presentation of the consolidated financial statements. b) Held-to-maturity investments;
c) Financial assets at fair value through profit or loss.

242 243
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

46. SUPPLEMENTAL NOTES ON FINANCIAL ASSETS AND FINANCIAL LIABILITIES ACCORDING TO 46. SUPPLEMENTAL NOTES ON FINANCIAL ASSETS AND FINANCIAL LIABILITIES ACCORDING TO
CIRCULAR NO. 210/2009/TT-BTC (CONTINUED) CIRCULAR NO. 210/2009/TT-BTC (CONTINUED)

Financial liabilities »» Financial liabilities at amortized cost:

Financial liabilities which are not categorised as at fair value through profit or loss will be classified as
Financial liabilities of the Bank and its subsidiaries within the scope of Circular 210 consist of borrowings from financial liabilities at amortised cost.
the Government and the State Bank, due to and borrowings from other credit institutions, due to customers,
grants, entrusted funds and loans exposed to risks, valuable papers issued, payables and other liabilities under Offsetting financial assets and liabilities
currency derivative contracts.
Financial assets and financial liabilities are offset and reported at the net amount in the consolidated balance
According to Circular 210, financial liabilities are classified appropriately, for the purpose of disclosure in these sheet, if and only if, the Bank and its subsidiaries have an enforceable legal right to offset financial assets
consolidated financial statements, into one of the following categories: against financial liabilities and the Bank and its subsidiaries have intention to settle on a net basis, or the
realization of the assets and settlement of liabilities is made simultaneously.
»» A financial liability at fair value through profit or loss:
Is a financial liability that meets either of the following conditions: Fair value of financial instruments

a) It is classified as held-for-trading. A financial liability is classified as held-for-trading if: The fair value of cash and short term deposits approximate to their carrying value due to their short term
- It is acquired or incurred principally for the purpose of selling or repurchasing it in the near term; or maturity.

- There is evidence of a recent actual pattern of short-term profit-taking; or

- It is a derivative (except for a derivative that is a financial guarantee contract or a designated and
effective hedging instrument).
b) Upon initial recognition it is designated by the Bank and its subsidiaries as at fair value through profit or loss.

244 245
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

46. SUPPLEMENTAL NOTES ON FINANCIAL ASSETS AND FINANCIAL LIABILITIES ACCORDING TO

CIRCULAR NO. 210/2009/TT-BTC (CONTINUED)

Carrying amount and fair value of finanical assets and financial liabilities

The carrying amount and fair value of the Bank and its subsidiaries’ financial instruments as at 31 December
2017 are presented as below:

Carrying amount

Other assets and

Loans and Available liabilities at
Trading Held to maturity receivables for sale amortized cost Total Fair value
VND million VND million VND million VND million VND million VND million VND million

Cash, gold and precious stones - - - - 6,212,662 6,212,662 6,212,662

Balances with central banks - - - - 3,002,395 3,002,395 3,002,395

Due from and loans to other credit institutions - - 444,042 - 6,928,778 7,372,820 (*)

Trading securities 63,250 - - - - 63,250 (*)

Derivatives and financial assets 20,251 - - - - 20,251 (*)

Loans and finance leases to customers - - 220,197,752 - - 220,197,752 (*)

Purchased debts - - 643,784 - - 643,784 (*)

Available-for-sale securities - - - 29,886,201 - 29,886,201 (*)

Held-to-maturity securities - 43,302,379 - - - 43,302,379 (*)

Other long-term investments - - - 164,184 - 164,184 (*)

Other assets - - - - 39,176,088 39,176,088 (*)

83,501 43,302,379 221,285,578 30,050,385 55,319,923 350,041,766

Borrowings from the SBV - - - - 231,484 231,484 (*)

Due to and borrowings from other credit institutions - - - - 12,649,006 12,649,006 (*)

Due to customers - - - - 319,859,587 319,859,587 (*)

Grants, entrusted funds and loans exposed to risks - - - - 90,975 90,975 (*)

Valuable papers issued - - - - 5,601,386 5,601,386 (*)

Other liabilities - - - - 6,093,490 6,093,490 (*)

- - - - 344,525,928 344,525,928

(*) Because the Vietnamese Accounting Standards and Accounting System do not have specific guidance on
the fair value determination, the fair value of these items cannot be determined.

246 247
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued) as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN B05/TCTD-HN

47. HEDGING OPERATION 50. EXCHANGE RATES OF APPLICABLE FOREIGN CURRENCIES AGAINST VND

For assets and liabilities management, the Bank and its subsidiaries have used hedging derivatives to mitigate 31 December 2017 VND 31 December 2016 VND
credit risk and market risk. Hedging is applied to a specific financial instrument, a portfolio of financial
instruments having fixed interest rate as well as total financial position. SJC gold 3,647,000 3,550,000

SBJ gold 3,370,000 3,100,000

The Bank and its subsidiaries have used fair value hedging to mitigate the risk from the fluctuation of assets
and liabilities’ fair value caused by the changes in interest rate and foreign exchange rate. For interest hedging, USD 22,425 22,159
hedged financial instruments include loans and advances to customers, available-for-sale debt securities and
valuable papers issued. For currency hedging, the Bank and its subsidiaries have used swap contracts. EUR 27,131 23,917

GBP 30,572 27,874

48. EVENTS AFTER THE BALANCE SHEET DATE
CHF 23,196 22,258
On 22 March 2016, the NBC issued Prakas No. B7-016-117 on Minimum Registered Capital of Banking and
Financial Institutions (“the Prakas”). The Prakas requires commercial bank locally incorporated as foreign JPY 200,42 193,64
subsidiary shall have minimum registered capital of at least KHR’000 300,000,000 (approximately US$75
SGD 16,869 15,676
million). Duration of implementation is within 2 years from the date of the Prakas. Up to the date of these
consolidated financial statements, the charter capital of Sacombank Cambodia Plc. is US$38 million. On 2 CAD 17,943 16,807
October 2017, the Board of Managament issued Resolution No. 195/2017/NQ-HĐQT regarding to the approval
of capital contribution to Sacombank Cambodia Plc. in compliance with the Prakas. The Bank is preparing AUD 17,608 16,320
necessary documentations relating to regulatory requirements of the Ministry of Planning and Investment of
LAK 2,720 2,806
Vietnam and the State Bank of Vietnam.
THB 677 610
Except for the above event and other information disclosed in relevant notes to the consolidated financial
statements, there have been no other significant events occurring after the balance sheet date which would NZD 15,985 15,629
require adjustments or disclosures to be made in the consolidated financial statements.

49. CONTINGENT LIABILITIES Prepared by: Reviewed by: Approved by:

On 8 January 2018, a case of deliberately violation of government regulations on economic management with
serious consequences relating to Vietnam Construction Joint Stock Bank (currently known as One Member
Limited Liability Vietnam Construction Bank) was heard at first instance by Ho Chi Minh City People’s Court.
The Bank is a party relating to this case because of the credit granted to six borrowers with the amount of
VND1,800,000 million, for which the collaterals were the deposits of Vietnam Construction Joint Stock Bank
with the amount of VND1,854,000 million. At contract maturity date, the Bank used the Vietnam Construction
Joint Stock Bank’s deposits to settle for the loans in accordance with the terms of the loan agreements and
signed guarantee contracts. On 7 February 2018, the Trial Panel announced the return of the documents to
the Procuracy for further investigation. Up to the date of these consolidated financial statements, the case has Mr. Luu Van Hoa Mr. Huynh Thanh Giang Ms. Nguyen Duc Thach Diem
been still under investigation, hence, the outcome of this case has not been determined yet. Accountant Chief Accountant General Director

Ho Chi Minh City, Vietnam

30 March 2018

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 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at and for the year ended 31 December 2017 (continued)
B05/TCTD-HN

Address: 266 - 268 Nam Ky Khoi Nghia, Ward 8, District 3, HCMC

Hotline: 1900 5555 88 Fax: (+84-28) 39 320 424
Email: [email protected] Swift Code: SGTTVNVX Website: www.sacombank.com.vn