NOW EVERYONE CAN BANK ANNUAL REPORT 2010 LIENVIETBANK’S GENERAL INFORMATION THE CHAIRMAN’S MESSAGE THE CHIEF EXECUTIVE OFFICER’S LETTER MEMORABLE EVENTS IN 2010 AWARDS AND ACHIEVEMENTS IN 2010 ORGANIZATIONAL STRUCTURE OF LIENVIETBANK IN 2010 Organizational Structure of the Head Office Organizational Structure of the Branches THE LEADER’S PROFILE The Board of Directors The Board of Supervisors The Board of Management SHAREHOLDERS’ INFORMATION HUMAN RESOURCES (HR), TRAINING POLICY AND LABOR POLICY HR Training policy Staff assessment and planning Reward and remuneration policy BUSINESS PERFORMANCE IN 2010 SOCIAL AND UNION ACTIVITIES ORIENTATION FOR DEVELOPMENT IN 2011 FINANCIAL STATEMENTS FOR 2010 TRANSACTION NETWORK 3 4 6 8 11 12 12 14 16 16 18 19 20 20 20 21 21 21 22 30 32 36 85 CONTENT Content: General Planning Department Design: PR Derpartment 2 3 Annual Report 2010 Full name in Vietnamese: Ngân hàng Thương mại Cổ phần Liên Việt. Abbreviation in Vietnamese: Ngân hàng Liên Việt. Full name in English: LienViet Joint Stock Commercial Bank. Abbreviation in English: LienVietBank Address of the Head office: No. 32 Nguyen Cong Tru, Ward 1, Vi Thanh town, Hau Giang province Chairman: Mr. Duong Cong Minh Chief Executive Officer: Mr. Le Hong Phong Telephone number: 0711.627 0668 / 04.62 668 668 Fax number: 0711.358 1737 / 04.62 669 669 Website: www.lienvietbank.net Banking License: No. 91/GP-NHNN issued by the Governor of the State Bank of Vietnam on March 28th, 2008. Commenced trading at Hau Giang Transaction Center on May 01st, 2008. Taxation Code: 6300048638. Auditing Firm: KPMG Limited Company. LIENVIETBANK’S GENERAL INFORMATION “Timely and suitable adjustment in organizational structuring in 2010 is the platform for significant develop- ment of LienVietBank in the coming years.” 4 Duong Cong Minh Chairman 5 Annual Report 2010 Dear valued shareholders and investors, LienVietBank was founded in the circumstance that Vietnam was coping with many difficulties and challenges cre- ated by the abnormal and complicated changes of the world economy. This global downturn caused negative impacts on the nation’s economy and as a consequence, effected the business operation of the entire banking industry and LienVietBank was not an exception. However, with consistent effort, LienVietBank enjoyed a roaring success by adopting right business measures and overcoming the difficulties. The 2010 revenue and profit recorded an impressive increase in comparison with the previous year. As of 31/12/2010, LienVietBank’s total capital achieved VND 34,985 billion, profit before tax was VND 795 billion and chartered capital was raised to VND 3,650 billion from VND 3,300 billion. LienVietBank also success- fully issued VND 2,000 billion worth of convertible bond and brought into operation 45 transaction points nationwide. The year 2011 has been foreseen as a difficult and challenging year for the banking operation after the global financial crisis (2008-2010). The global and national economic recovery is expected to remain sluggish, export volume will decline and the local currency may be forced to be devalued. However, there are still positive signs. The national economy has shown signs of gradual recovery which will bring in more investment opportunities and business im- provement. What’s more important is that LienVietBank has reinforced its brand awareness, reputation and influence among clients and on the financial market. This is not only due to its effective business operation but also the com- mitment to sustainable development by fulfilling the social responsibility as a corporate citizen, specifically the credit program for agriculture and rural development. Finally, and perhaps the most importantly, on 21/2/2010, the Prime Minister issued an official letter number 244/TTg- ĐMDN approving the capital contribution of the Vietnam Post Corporation (a member of the Vietnam Post and Tele- communication Group) to LienVietBank by the value of the Vietnam Postal Savings Service Company and additional cash. Thereby, LienVietBank has potential to exploit and utilize more than 10.000 post offices spread across the nation to channel banking services. LienVietBank will then become one among Vietnam’s largest banks in term of network. Endeavoring the strategic choice to become a mass-market retail bank, I believe that 2011 will be a prosperous year which marks a significant transformation of LienVietBank. The road ahead is long and winding. Every success or failure, hardship and challenge that we encounter will definitely be our valuable lessons for our future development. The Board of Directors believe that the clear directions and goals, the consensus of the fellow shareholders, the trust and support of our clients and the determination of LienVietBank staff to overcome difficulty are the momentum of growth for 2011 and subsequent years. There’s no doubt that Lien- VietBank will be increasingly strong and resilient. On behalf of the Board of Directors, I would like to express sincere thanks to our valued shareholders, clients, partners and all the staff. They have always been trusting in and standing by our side, which I suppose, made it possible for the success of our bank today. We are then committed to make every effort in return for your trust and support. We shall fulfill the bank’s mission and put in place proper, fair and transparent policies to pursue the highest effectiveness and finally reshape, then bring LienVietBank to a new level of development. Regards, THE CHAIRMAN’S MESSAGE DUONG CONG MINH Chairman 6 7 Annual Report 2010 Dear shareholders, clients and partners, The year 2010 closed with many changes in the global economy in general and in Vietnam in particular. The high inflation rate in emerging economies, the currency war among developed countries and the Eurozone sovereign debt crisis have caused negative impacts on the Vietnam economy. The fluctuation of interest and exchange rate were irregular and unpre- dictable. The Vietnam banking industry was at the challenge of business expansion and balanced operation since the credit growth rate was nearly at 30% while deposits remained roughly 27% and earnings sometimes recorded a dramatic decline. In the context of unfavorable market conditions, LienVietBank continued to enjoy outstanding results and remained strong in the financial system. One success is commonly the result of the combination of three elements: the right timing, the right place and the right people. Knowing our challenges well enough, we have successfully demonstrated that extensive change certainly opens up major opportunities. What we did was to find out solutions and proper direction to take advantages of timing, look for opportunity in every difficulty and cultivate the internal strength within the organization. In 2010, our sound and effective business operation was driven by 4 principles in management: Human resource: Staff professionalism and self-motivation are key factors for LienVietBank sustainable growth. Promoting self-determination, developing specific personnel policies and training programs, and creating equal development opportu- nities are main priorities. Technology: Continuous investment has been made in the banking technology to meet the demand for the support of banking transaction, product management, MIS, staff and procedure management. The banking system with advanced technology is one of the success factors to the operation of banks in a modern business environment. Product and service quality: As a customer-driven and mass market retail banking oriented bank, LienVietBank has to guar- antee its products and services to be delivered with the highest quality and trust. Sufficient time and resource were directed on the development and improvement of our service quality and products to meet the demand of every customer segment. Risk management: The overall risk management capabilities had approved, non-performing loan ratio was kept at minimum level. Taking risk management as an integral part of everyday operation is the key factor of the bank’s safety, professional- ism, and the shareholders’ long-term and sustainable benefits. In 2011 and subsequent years, the Board of Management commits itself to a concerted effort to deal with market uncer- tainty, conducts business operation in line with the direction of the Board of Directors and the expectation of the sharehold- ers and clients. Reaching VND 60,000 billion in total capital, targeting VND 1.180 billion profit before tax, controlling non- performing loan ratio below 0.6%, expanding network systematically and effectively, and exploiting the business potential through the merger between Vietnam Post Corporation and LienVietBank are the challenging targets for 2011. Backed by the close guidance of the Board of Directors, along with the determination, and the teamwork spirit of all the staff, we believe that those tasks are definitely realistic and feasible. On behalf of the Board of Management, I would like to express my sincere gratitude to our valued shareholders, clients and partners who have always cooperated with LienVietBank. We hope to continue counting on your support in the future and commit to foster sustainable development for the benefits of our shareholders and society. Wish you all good health, happiness and success. Best regards, THE CHIEF EXECUTIVE OFFICER’S LETTER LE HONG PHONG Chief Executive Officer 8 19/01/2010 Together with Him Lam Corporation, Lien- VietBank established Xin Man Development Joint Stock Company in order to support the development of the poor Xin Man District, Ha Giang Province which then con- tribute to the actuallisation of the Resolution 30A/2008/ NQ-CP dated 27/12/2008 of the Government on the sup- port program for fast and sustainable poverty reduction in 62 poor districts all over the country. 06/03/2010 LienVietBank An Giang, LienVietBank’s first branch in 2010, commenced operation in Long Xuyen City, An Giang Province. On the same day, LienVietBank has announced the Agricultural and Rural Finance Pro- gram in Mekong Delta for the period 2010-2013. This project has been implemented in 2010 with the total out- standing loan of VND3,669 billion. 28/03/2010 In Danang, the General Meeting of Share- holders had approved the decision that the Vietnam Post Corporation - VNPost (a member of VNPT) would con- tribute capital to LienVietBank by the value of Vietnam Postal Savings Service Company - VPSC and additional cash. The merger would bring LienVietBank the opportu- nities to become the retail bank with the largest network among the Vietnamese commercial banks. 28/07/2010 In Hanoi, the representative of the Global Compact Network in Vietnam (GCVN) had an official visit to LienVietBank. By joining GCVN, LienVietBank had offi- cially acknowledged its social responsibility in accordance with international standards to improve social conditions and working environment for employees. 23/09/2010 Chairman of the Board had approved the Decision No. 884/2010/QD-HDQT on the organizational structure of the Head Office. This structure helped inten- MEMORABLE EVENTS IN 2010 9 Annual Report 2010 sify the participation of Board members in regular activi- ties of the Bank to specify and stabilize functional depart- ments. 07/10/2010 In Washington - United States, the Memo- randum of Bilateral Cooperation signing ceremony be- tween LienVietBank and Wells Fargo Bank, N.A was held on the occasion of World Bank/IMF Annual Meetings 2010 to establish the long-term relationship between both Parties. Also this year had marked the associations between LienVietBank and other big corporations includ- ing: Great Mountain Joint Stock Insurance Corporation (GMIC), Vinacomin Finance, PTI Insurance. 23/10/2010 LienVietBank’s Relief Group travelled to Nghe An, Ha Tinh, Quang Binh and Quang Tri to support people in central Vietnam. The Group has provided food stuff and cash for flood-stricken people. 22/11/2010 In Ca Mau City, LienVietBank Ca Mau Branch was opened, marking the presence of the Bank in the southernmost area of the country. 11/12/2010 In Hanoi, LienVietBank Sport Event was taken place for the first time with the presence of 60 amateur athletes all over the country. Together with the LienVietBank’s Talent Show held in June 2010, this was one of the outstanding social activities of LienVietBank Union. 31/12/2010 LienVietBank finished the business year with impressive results: total employees for the whole network was 1,400 (nearly doubled that of 2009), total assets reached nearly VND 35,000 billion, profit after tax was about VND 700 billion marking an important step af- ter 3 years of operation. 10 [...]... reached approximately 1,200 people In 03 /2010: LienVietBank’s male soccer team took part in Hanoi Banking Spring Soccer Mini Cup From 04 /2010 to 06 /2010, “LienVietBank’s Talent Show” was organized to improve professional knowledge and encourage emulation movements in LienVietBank network 07 /2010: BaDa pagoda restoring donation campaign was launched upon the Vietnam Banking Union’s movement The amount was... activities of LienVietBank in 2009 30 10 /2010: Staffs’ children were awarded for remarkable achievements in learning LienVietBank participated in the 10th Hanoi Banking Tennis Cup Besides, the Bank made donation of VND 1.5 billion and formed rescue teams to flood-stricken people in the Central of Vietnam (including Nghe An, Ha Tinh and Quang Binh) 12 /2010: LienVietBank Sport Festival was held in CanTho (tennis)... Annual Report 2010 31 ORIENTATION FOR DEVELOPMENT IN 2011 BRAND DEVELOPMENT Taking the advantage of the Vietnam Post Corporation capital contribution to LienVietBank by the value of the Vietnam Postal Saving Company and additional cash, LienVietBank shall be one of the largest banks in terms of branch network only after 3 year of operation The brand name of LienVietBank shall be promoted as the bank for... Bank supported disadvantage unionists (poor family condition, fatal disease, etc.) with the amount of VND 65 million In 2010, LienVietBank was recognized as the Great Corporate Culture Unit by Vietnam Banking Union Social activities “Connecting society and business” is LienVietBank’s long-term operational motto Over 3 years of operation, together with developing its business efficiently, LienVietBank... December 31st, 2010, LienVietBank’s total assets reached VND 34,985 billion, an increase of VND 17,618 billion or 101.45% compared with December 31st, 2009 After 3 year of operation, LienVietBank has been growing up rapidly in scale, net-work expansion, operating activities and diversification of banking activities, products and services 7,453 2008 2009 TOTAL EQUITY IN VND BILLION 2010 LienVietBank was established... services offered by our Bank Tele & Video Conferencing Project allows LienVietBank to reduce costs but increase efficiency and quality of meetings and seminars which then accelerate the process to help LienVietBank be closer to the goal of a leading modern - professional - dynamic Bank in Vietnam ELECTRONIC BANKING SMS - Banking service allows customers to check their account information, bank information... are strategic missions and major concern of The Party and Government of Vietnam On November 28th, 2009, the Prime Minister Nguyen Tan Dung visited LienVietBank and emphasized: “Established in Hau Giang Province, LienVietBank should be the bank for all farmers in Hau Giang, staying along with them as a credit provider” LienVietBank recognized the importance of agriculture and rural area in strategic... Chairman of LienVietBank by Chairmain of the People’s Committee of Ha Giang Province Certificate of Merit for “Outstanding achievement in performing the Resolution 30A/NQ-CP of the Government in Ha Giang Province”, awarded to Mr Nguyen Duc Huong - Vice Chairman of LienVietBank by Chairmain of the People’s Committee of Ha Giang Province Annual Report 2010 11 ORGANIZATIONAL STRUCTURE OF LIENVIETBANK IN 2010. .. Corporate Corporate Individuals Individuals Annual Report 2010 25 BUSINESS PERFORMANCE IN 2010 CAPITAL MOBILIZATION IN 2010 Regarding to the credit activities in 2010, LienVietBank had achieved many remarkable results In the end of 2010, while other banks were facing difficulties in capital for loans and advances, LienVietBank still kept maintaining credit-granting activities This was a great effort in combining... 2009 1 1 8 12 21 2010 1 1 15 29 45 LienVietBank is constantly pursuing the network development strategy By December 31st, 2010, LienVietBank had established a network of 45 transaction points throughout the country, including 01 Head Office, 01 Transaction Center placed in Hau Giang Province, 15 branches and 29 transaction offices A dense network system can bring customers closer to the banking service . Derpartment 2 3 Annual Report 2010 Full name in Vietnamese: Ngân hàng Thương mại Cổ phần Liên Việt. Abbreviation in Vietnamese: Ngân hàng Liên Việt. Full name in English: LienViet Joint Stock Commercial Bank. Abbreviation. the country. 06/03 /2010 LienVietBank An Giang, LienVietBank’s first branch in 2010, commenced operation in Long Xuyen City, An Giang Province. On the same day, LienVietBank has announced. NOW EVERYONE CAN BANK ANNUAL REPORT 2010 LIENVIETBANK’S GENERAL INFORMATION THE CHAIRMAN’S MESSAGE THE CHIEF EXECUTIVE OFFICER’S LETTER MEMORABLE EVENTS IN 2010 AWARDS AND ACHIEVEMENTS IN 2010 ORGANIZATIONAL