Annual Report 2012
1 2 3 CONTENTS
Message from the Chairman 6 Message from the Chief Executive Officer 8 Overview 10 Financial Highlights 12 Mission and Vision 14 Organizational structure 16 Operating Report 2012 20 Operating Report 22 Awards and Social Recognitions 30 Charitable and Social Activities 32 10 Outstanding Events 34 Business Plan 2013 40 Network 46 Audited Financial Statements 50
4 Annual Report 2012
5 MESSAGE FROM THE CHAIRMAN
Dear valued shareholders and customers,
was a year full of In 2012, the OceanBank Board of Directors (BoD) challenges for the continued to direct the implementations of 2012 commercial banks sustaining and upholding operations to achieve due to the fact that both domestic and safe and prudent targets. Comprehending the international socio-economic context remained Resolution No. 02 of the Government, OceanBank unfavorable. The current difficult economic has focused on giving a priority lending regime situations have negatively impacted on the to four preferential sectors including agriculture enterprise customers. In addition, the decline and rural development, manufacturing and in savings rate and in purchasing power exporting, supporting industries and small of people also affected the retail banking and medium enterprises (SMEs); especially operations. However, OceanBank has achieved providing working capital for enterprises in these remarkable accomplishments in strengthening sectors. The BoD always closely supervised the the organization and promoting the brand operations of OceanBank and analyzed the of the Bank, paving the way for business performance indicators to assure that the assets development in following years. and funds of the Bank had been consistently
6 maintained at secure levels; to mitigate implicit Based on the forecasts of the business difficulties in the future; and to firmly abide by environment and the judgments on the the regulations of the State Bank of Vietnam challenges and complex upheavals of the regarding safety ratios in operations of credit market, the BoD of OceanBank will accordingly institutions as well as to respond flexibly to the develop appropriate business targets, ensuring macroeconomic situations. the soundness of the Bank’s operations and further enhance the value of shareholders’ Enhancing the stability, sustainability and assets. OceanBank will steadily pursue the liquidity is one of the most important objectives following objectives: Safety in all operations of of OceanBank in the period of 2013 - 2015. To OceanBank; Professionalism in management, achieve this objective, the BoD has proposed enhancing staff qualifications to reach high levels the solutions which have been effectively in developed countries; Focus on the customers’ implemented, such as: expanding and satisfaction through experiencing excellent strengthening the retail banking network to services and diversified products; Improving improve the stability of the funds and enlarge the business processes towards the best customer customer base; formulating the strategies and service and diversified distribution system; Strive action plans to tackle bad debts; restructuring the to become a desirable organization which Bank’s governance system towards intensifying employees would love to work for as they are management competences, improving business always provided with good conditions and processes and risk management processes as support for learning and improving themselves. well as implementing the project of reforming the brand identity system. Thank you very much for your trust and cooperation! Since August 2012, OceanBank has corporated with European leading consultants from the United Kingdom (UK) to participate in the Chairman project of reforming the brand of OceanBank. Accordingly, OceanBank has reformed the entire brand identity systems, focusing on the operational facilities development, Mr. Ha Van Tham appearances of branches and transaction offices, and business process improvements in order to bring the perfect experience to OceanBank’s customers.
7 MESSAGE FROM THE CHIEF EXECUTIVE OFFICER
Dear valued shareholders and customers,
he year 2012 has ended and we In 2012, by successfully overcoming difficulties enter 2013 with very few optimistic and firmly asserting OceanBank’s position in the forecasts and premonitions about the banking and financial markets, OceanBank was domestic and global economies. 2012 awarded Fastest Growing Retail Bank Vietnam was a year full of challenges not only 2012 by Global Banking & Finance Review (UK). Tfor OceanBank but also for the financial and In addition, OceanBank continuously promoted banking sector. In this complicated context, its rankings in the Top 500 Vietnamese largest more than 2,000 employees of OceanBank have enterprises and was honored to be placed in unanimously implemented the solutions of the the list of Top 200 Enterprises of tax contribution BoD and the Board of Management (BoM) in in Vietnam... Through combining product order to minimize the risks that affect the safety research and development with service quality and thriving of the system, and to strive for improvement and expansion of domestic and OceanBank’s sustainability and prosperity. international cooperation…OceanBank has
8 gained the trust from its customers, partners and shareholders.
To cope with the intrinsic difficulties of the domestic economy that is able to directly impact on enterprises and banks, the OceanBank BoM determined that the target of the Bank is to maintain the stability and sustainability of OceanBank’s operations. A top priority task for OceanBank is to assure the quality of its assets. Making profit is as important as improving the quality of system management and risk credit portfolio through analyzing credit risk by management. Therefore, in recent years, some industry and related consumer groups. financial ratios regarding profitability appeared In 2013, OceanBank will focus on brand strategy in a downward tendency, but growth in total and core product strategy, aiming at creating assets and funds of OceanBank have increased the differentiation and competitive advantages steadily. The capital adequacy ratio and for retail operations. Developing and training liquidity of OceanBank have always been skilled and professional personnel is another maintained at safe levels. priority objective. In addition, the Bank will pay To realize the strategies and policies of the BoD, due attention to strengthening cooperation the OceanBank’s BoM focused on directing and alliance with its customers and partners to and implementing the debt restructuring and efficiently promote the resources and potentials formulating the plans and detailed schedules of OceanBank. for tackling bad debts. The BoM of OceanBank In closing, I would like to thank you, our also delegated specific targets to every shareholders, and customers for your continued business unit where individual tasks cemented support. with the responsibilities of the team to improve the work efficiency. OceanBank has paid due attention to improving the risk management, Chief Executive Officer assuring the safety ratios at prudent levels prescribed by the State Bank of Vietnam. OceanBank has consistently improved the efficiency of credit risk management as well as Mrs. Nguyen Minh Thu a rescreened and restructured loan portfolio, focused towards eligible customer groups. The Bank also improved the management of their
9 OCEANBANK Founded in 1993 and transformed its operational model into Joint Stock Commercial Bank since 2007, Ocean Joint Stock Commercial Bank (OceanBank) is proud to be a versatile and modern bank with breakthroughs in revenue, total assets and charter capital year on year.
10 OVERVIEW
ounded in 1993 and transformed its operational country, providing financial aid for construction of schools model into Joint Stock Commercial Bank since and medical stations and charitable funding for surgery of 2007, Ocean Joint Stock Commercial Bank Tran Danh Tung, the child affected with Apert syndrome, (OceanBank) is proud to be a versatile and giving gifts to children in poor families… modern bank with breakthroughs in revenue, With dedicated contributions to OceanBank’s customers, Ftotal assets and charter capital year on year. In 2012, shareholders and to the society, in 2012, OceanBank OceanBank’s chartered capital rose to VND4,000 billion, was honored to be the recipient of many domestic and and the Bank successfully established agency banking international prestigious awards and certificates of merit relationships with more than 300 major banks worldwide. such as Fastest Growing Retail Bank Vietnam 2012 by Currently, OceanBank is considered among the group Global Banking & Finance Review; The Straight – Through of leading commercial banks with the most secure – Processing Award (STP Award) granted by Wells Fargo financial structure. In 2012, Hermes Capital (based in for high standards in conducting international payments; UK) with profound international experience in consulting Being placed in the Top 500 Vietnamese largest enterprises and financial investment officially became the foreign (VNR500); Being honored in the list of Top 200 Enterprises of shareholder of OceanBank. tax contribution in Vietnam (V1000); Fastest Growing Retail With an extensive business network including 21 branches Bank Vietnam (FAST 500)... and over 100 transaction offices across the country These outstanding achievements of OceanBank are the and more than 2,000 employees, OceanBank offers its outcome of the consistent planning and developing customers a wide range of diversified, modern and efficient strategies as well as in implementing action plans; and banking products and financial services in accordance the determination to pursue the sustainable growth in with demands and socioeconomic characteristics of doing business; as well as the proactiveness in corporate each region. Besides providing traditional banking governance and the solidarity of all OceanBank services, OceanBank has quickly promoted electronic employees. Last but not least, OceanBank certainly banking services through developing many advanced could not achieve its current solid position without the hi-tech products, assuring security for individual and contribution and cooperation of valuable shareholders, enterprise customers. These advancements are solid investors and customers. steps of OceanBank in order to accomplish the goal of being placed among the Top five leading banks in In order to consistently pursue the Bank’s objectives, Vietnam who have the largest number of customers using OceanBank will continuously strive to become the most electronic banking services and the highest proportion of innovative and best managed bank which is positioned in sales through e-banking channels in the future as well as the customers’ perception as a leading customer-oriented utilize leading-edge technology solutions for finance and bank in the industry through improving quality of its banking. products and services, strengthening the cooperation with leading corporations of Vietnam and of the world, actively OceanBank determines that contributing to the accompanying the enterprises, focusing on human community and sharing benefits with the society are resource development and training, and incessantly important missions for the Bank. OceanBank actively applying new technologies and developing information participates in social activities such as running a long-term system to ensure the stability and safety of the system … charitable program named “Light Source”, which provides free-of-charge surgical treatment for eye diseases that can cause blindness for the underprivileged across the
11 FINANCIAL HIGHLIGHTS
Chartered Capital (Billion VND) Total Assets (Billion VND) 64,462 4,000 4,000 62,639 60,000 4,000 3,500 55,139 50,000 3,000 40,000 33,785 2,000 2,000 30,000
20,000 1,000 10,000
0,000 0,000 2009 2010 2011 2012 2009 2010 2011 2012
ROA (%) ROE (%) 1.55 21.8 1.5 1.3 20.0 18.1
1.09 15.0 1.0 14.74
10.0 0.50 0.5 6.75 5.0
0.0 0.0 2009 2010 2011 2012 2009 2010 2011 2012
Profit after Tax (Billion VND) Mobilization (Billion VND) 520 59,398 500 488 60,000 57,378 50,427 50,000 400 40,000 300 31,190 227 243 30,000 200 20,000
100 10,000
0 0,000 2009 2010 2011 2012 2009 2010 2011 2012
12 Financial Highlights
(Unit: VND)
2010 2011 2012
Total assets 55,138,903,221,015 62,639,316,877,051 64,462,099,428,517
Equity 4,087,343,965,413 4,644,050,596,895 4,484,814,066,103
Chartered capital 3,500,000,000,000 4,000,000,000,000 4,000,000,000,000
Raised fund 50,427,115,648,434 57,377,665,223,615 59,398,157,365,498
Loan Balance (Primary market) 17,630,960,647,261 19,187,065,606,171 26,240,060,649,543
Total revenue 4,499,063,309,038 6,694,081,795,108 6,703,916,749,133
Profit before tax 690,953,836,860 643,393,959,302 310,210,643,641
Profit after tax 520,421,808,375 487,931,115,362 243,214,308,879
Capital adequacy ratio (CAR) 9.48 11.74 10.36
Loan Balance (Primary market)/Total assets (%) 31.98 30.63 42.95
Loan Balance (Primary market)/Raised Fund (%) 34.96 33.44 44.18
Bad debt ratio/Total Loan Balance (%) 1.67 2.08 2.89
ROE (%) 21.8 14.74 6.75
ROA (%) 1.55 1.09 0.50
13 VISION
”To make Ocean Bank the bank of choice for customers and staff in Vietnam”
What we aspire to be:
- A bank that earns the trust and confidence of customers through the customer focused people, processes, products and business culture that it offers.
- A preferred place of employment through the culture and environment of learning, development and growth it engenders for staff in its business culture and practices.
- A bank that works through its people to provide is customers with appropriate financial solutions.
MISSION
Achieving our Vision We work to become:
1. The most innovative and banking service leader for our customers and the best “customer- focused” bank in our industry - as judged by our customers
2. The best-managed company as defined by functional competencies, alignment around goals and behaviours, business integrity, teamwork, productivity and cost- consciousness.
3. The most improved and trusted Bank in our industry and ultimately by our key stakeholders.
4. Known for our leadership edge achieved by our passion for excellence and business growth.
14 Vision - Mission
15 BOARD OF DIRECTORS
Mr. HA VAN THAM Chairman
Mrs. VU THI THANH HUONG Mrs. NGUYEN MINH THU Mrs. LE THI THU THUY Vice Chairman Member Member
Mr. DANG THE TRUYEN Mr. DOAN PHUNG Independent Member Member
16 Organizational Structure
BOARD OF SUPERVISORS
Mr. BUI VAN HAI Mrs. LE THI MINH NGUYET Head of the Board of Supervisors Member
Mrs. NGUYEN THI PHUONG Member
17 BOARD OF MANAGEMENT
Mrs. NGUYEN MINH THU Chief Executive Officer
Mr. LE TUAN ANH Mr. NGUYEN MANH HA Vice-CEO Vice-CEO
Mr. NGUYEN VAN HOAN Vice-CEO
18 Organizational Structure
Mrs. NGUYEN THI MAI HUONG Mrs. NGUYEN THI KIEU LIEN Vice-CEO Vice-CEO
Mrs. NGUYEN THI MINH PHUONG Mr. TRAN THANH QUANG Vice-CEO Vice-CEO
Mrs. LE THI THU THUY Mr. VO VIET TRUNG Vice-CEO Vice-CEO 19 OPERATING REPORT 2012
20 21 OPERATING REPORT
was considered as one of the most 2012 challenging years for the Joint Stock Commercial Banks, as both domestic and global socio-economic context remained unfavorable. Specifically, in the world, economic growth rates declined in all countries, the unemployment rate rose and purchasing power declined while public debts increased. The global financial market was dampened by implicit threats of another public debt crisis. In the domestic market, although the policies of Government have effectively stabilized the macro economy, the domestic economic growth rate was at a low level. Both the real estate market and stock market remained in the aside full provisions for loan losses in 2012 from doldrums while the enterprise had to cope with distributing the profit or paying dividends to their many obstacles. The Joint Stock Commercial shareholders... Banks had to flexibly overcome the challenges In this circumstance, OceanBank has achieved of the economy, and at the same time, had remarkable results in solidifying its organization, to adapt to the alterations in policies of the promoting the brand, paving the way for Government and State Bank of Vietnam such business development in following years. as adjustments to the deposit rate ceiling and The performances of OceanBank in 2012 are lending rate, and the regulation preventing declared in detail as follows: whichever credit institutions who fail to set
1. Actual performance in 2012 compared with planned business targets:
- Total assets: VND64,462 billion, reaching 95% of the plan, representing an increase of VND1,823 billion compared to 2011;
- Total funds raised: VND59,398 billion, reaching 97% of the plan, representing an increase of VND2,020 billion compared to 2011;
- Loan Balance: VND26,240 billion, equivalent to 117% of plan, representing an increase of VND7,053 billion over 2011;
- Profit before tax: VND310 billion, reaching 94% of the plan in 2012 ;
- Revenue from providing services: VND43.4 billion, reaching 72% of the plan, representing a decrease of VND2.6 billion compared to 2011;
- Bad debt ratio: 2.89%, increase of 0.81% over 2011.
22 Operating Report
Unit: VND billion
Actuals Targets Actuals % Actuals/ Increase/ Increase / 2011 2012 2012 Targets Decrease Decrease Compared Compared No. Items with Targets to 2011 1 Total assets 62,639 68,000 64,462 95% (3,538) 1,823
2 Total Funds raised 57,378 61,300 59,398 97% (1,902) 2,020
2.1 Funds raised from primary market 38,590 43,000 43,240 101% 240 4,650
- From the population 6,921 12,000 10,906 91% (1,094) 3,985
- From enterprises and businesses 31,669 29,000 32,334 111% 3,334 665
- From issuance of valuable papers 0 2,000 0 0% (2,000) 0
2.2 Funds raised from secondary market 18,788 18,300 16,158 88% (2,142) (2,630)
3 Loan Balance 19,187 22,500 26,240 117% 3,740 7,053
- Short-term 8,282 12,480 12,086 97% (394) 3,804
- Medium and long-term 10,905 10,020 14,154 141% 4,134 3,249
4 Accumulated Profit 643 330 310 94% (20) (-333)
5 Revenue from providing services 46 60 43.4 72% (16.6) (2.6)
6 Net profit / loss from providing services 15.4 30 15.8 53% (14) 0.4
7 Operating expenses 615 820 694 85% (126) 79
8 Bad debt ratio 2.08% 2.89% 0.81%
23 2. Performance of OceanBank’s core business operations
2.1 Fundraising and Management:
In 2012, OceanBank developed a variety of funds raised from enterprises and businesses products and favorable fundraising policies to reached VND32,334 billion, equivalent to 111% of attract customers; therefore, the funds raised the plan, an increase of VND665 billion compared from the primary market have been increased to 2011). Funds raised from the secondary market constantly. By the end of 2012, total funds raised by reached VND16,158 billion, equivalent to 88% of OceanBank reached VND59,398 billion, equivalent the plan, representing a decrease of VND2,630 to 97% of the plan, representing an increase of billion compared to 2011. VND2,020 billion compared to 2011; Funds raised OceanBank has also paid due attention to fund from the primary market reached VND43,240 management and liquidity management. At the billion, equivalent to 101% of the plan, an increase end of 2012, the Capital Adequacy Ratio (CAR) of VND4,650 billion over 2011 (in which funds of OceanBank was 10.36%, and other safety ratios raised from the population reached VND10,906 and liquidity management ratios have been billion, reaching 91% of the plan, representing an assured in accordance with the regulations of the increase of VND3,985 billion compared to 2011; State Bank of Vietnam.
2.2. Credit Management:
In 2012, OceanBank developed the software to a customer/group of customers and related for managing the credit granting process for people. enterprises and home-based businesses; reviewed In addition, OceanBank strengthened credit information of outstanding loans and supported risk management, and assured the process of the whole bank system to correct and update the valuating and credit granting in accordance consumer credit database to the CoreBanking with the processes and criteria prescribed by the system; continuously improved regulations and State Bank of Vietnam. Credit structure has been processes on OceanBank’s CoreBanking system to reformed positively, focusing on the preferential identify and manage customers and their related sectors in accordance with policies of the people, developed the procedures and tools to Government, gradually reducing the portion of prevent/restrict the over credit limit disbursement loan balance for non-preferential sectors.
Breakdown of funding in 2012 by funding Breakdown of funding in 2012 by sources: currency unit:
27% 14% 73% 86%
From Credit institutions: 27% Funds raised in US$: 14% From Customers: 73% Funds raised in VND: 86% From Trust funds: 0%
24 Operating Report
Performance of OceanBank’s Credit operations Breakdown of total loan as of 31 December 2012 as follows: balance by term:
Total loan balance: VND26,240 billion, reaching 117% of the plan, representing 46% an increase of VND7,053 billion compared 54% to 2011 (in which, short term loan balance: VND12,086 billion, reaching 97% of the plan, an increase of 3,804 billion over 2011; medi- um and long term loans: 14,154 billion, 141% Short term: VND12,086 billion of the plan, up 3,249 billion versus 2011). Medium and Long term: VND14,154 billion
2.3 Investment operation:
In 2012, OceanBank focused on recovering the Due to economic difficulties, investments in the deferred trust investment, restructuring and secondary market were very tough in 2012. transferring the non performing investments However, in order to achieve the objectives of to preserve the Bank’s capital and mitigating ensuring capital adequacy and making profit, operation risks as well as preventing asset losses. OceanBank has promoted investment in bonds with high adequacy and good liquidity. As the result of vigorous growth in bond investment in 2012, the revenue from bond investments increased by 38% over the plan (equivalent to an increase of VND103 billion compared to the plan). In terms of long-term investments and securities investment, income from these investments has successfully exceeded the plan by nearly VND22 billion.
25 2.4 Retail Operations:
2012 was the year with breakthrough with the Onepay, Ngan Luong and Smartlink developments for OceanBank’s retail banking. payment gateways, upgraded the card The Bank actively applied modern technologies management system and offered Visa Credit in its retail operations via electronic banking Cards. (online banking) with a variety of products Thanks to these innovative products and such as Easy Online Banking, Mobile Banking services, OceanBank’s retail banking has been Easy, Easy M-Plus Banking, and Easy Corporate constantly attracting individual customers. As Banking. These products have integrated many of 31 December 2012, the number of individual advanced features to optimally satisfy customer customers of OceanBank reached over 318,000 needs. an increase of more than 150,000 customers OceanBank has won customers thanks to its compared to the same period of 2011. advanced and creative retail banking products Especially, with the efforts and achievements and services such as: Open bank account with of the retail banking operation, OceanBank was one SMS message, inter-bank transfers to card honored to receive the Award “Fastest Growing number via Easy M-Plus Banking, Super Speed Retail Bank Vietnam 2012” by Global Banking & Consumer Loan, and Super Quick Card Issue in Finance Review (UK). 5 seconds... OceanBank successfully connected
26 Operating Report
3. Performance of other operations: Development of Workforce 3.1 The Risk Management:
In 2012, OceanBank gradually standardized the 2,169 2,000 1,848 structure of the Risk Management Division to enhance its practicality and feasibility. The Risk 1,500 1,359 Management Division was responsible for the 1,000 895 following tasks: Market risk management to play a consulting role in developing business decisions 500 in accordance with market movements and to 0,000 assist business units to implement their operations 2009 2010 2011 2012 safely and efficiently; Credit risk management to rescreen and restructure loan portfolios, as well as to focus on eligible customer groups, ORACLE), and Reforming Project (with HERMES). to manage credit portfolios and analyze In addition, in order to improve the efficiency credit risk by industry and related consumer of performance management and evaluation, groups. In addition, OceanBank is conducting OceanBank has initiated the Performance the framework for managing operational risk Management and Appraisal Software Project. management, building practical and scientific These projects are expected to provide processes for risk reporting in accordance with OceanBank’s management with an approach to 10 golden rules for operational risk management understanding their employees thoroughly and recommended by the Basel Committee to enhance the human resource management (including the process of signal risk reporting, in order to improve the ability of staff and the procedures of operational risk reporting and the operational efficiency of the Bank’s system. process of reporting doubtful transactions).
3.2 Human Resource Development:
As of 31 December 2012, OceanBank has 2,169 employees in the entire system of the Bank, an increase of 321 people, equivalent to a growth rate of 17.4% compared to 2011. In 2012, OceanBank comprehensively deployed the human resource development projects such as Remuneration Project (with HAY GROUP), KPIs Development Project (with HERMES &
27 3.3 Reforming and Promoting OceanBank’s brand:
In the strategy of restructuring OceanBank, the brand is one of the most important issues to be studied, reformed and developed. As new economic context brings both challenges and opportunities, OceanBank decides to restructure its brand based on repositioning to enhance its current and future operational performances in a volatile market. The vital principle of OceanBank’s brand restructuring is to create core values for customers, partners, shareholders, employees and society.
In 2012, OceanBank worked closely with an international consulting company to redesign the brand identity of the Bank. OceanBank decided to reform its brand identity towards being more harmonious and modern, as well
as successfully manifesting and propagating efficiency in money transfer and payments the Bank’s image and its customer experience. between PetroVietnam and its customers On one hand, brand innovating is the intrinsic as well as PetroVietnam’s subsidiaries and demand of OceanBank to adapt itself to new associates. In addition, OceanBank expanded socio-economic context. On the other hand, its customer base to the members and agents brand restructuring is an extension of the of PVFCCo, Petec, Project Management development history of OceanBank, so that Unit of PetroVietnam Power Thai Binh 2 OceanBank’s brand will continue to penetrate and PetroVietnam Construction Joint Stock the market and gain social recognition. Corporation… The Bank also expanded products Currently, the development of the new brand and services provided for major customers such identity is complete and OceanBank plans to as Viglacera, Vietnam Airlines ... publicly launch the new brand identity in 2013. Accordingly, a series of transaction offices designed in accordance with this new brand 3.5 Payment Services identity will be officially put into operation. Continuing the achievements in recent years, OceanBank incessantly upgraded the software systems. As a result, 100% of the payment 3.4 Nurturing and expanding transactions of OceanBank were conducted cooperation with major partners safely and accurately. OceanBank was In 2012, OceanBank continued to maintain honored to be recipient of the Straight – Through excellent relationships and implemented – Processing Award (STP Award) granted by comprehensive cooperation agreements with Wells Fargo for high standards in conducting PetroVietnam’s subsidiaries and associates. international payments in three consecutive As a result, OceanBank has enhanced the years from 2010 to 2012.
28 Operating Report
In 2012, OceanBank continued to expand number of cards issued by OceanBank reached its global agency banking system (as of 31 179,112 in total, including 152,801 domestic December 2012, OceanBank established debit cards, 4,443 international debit cards, and agency banking relationships with 328 banks 21,868 prepaid cards. worldwide), in order to effectively support the transaction processing and to promote OceanBank’s brand to the world. 3.7 Develop a friendly and community- oriented image
In 2012, OceanBank provided financial aid 3.6 Business Network Development for developing social security programs such Implementing the plan of business network as building medical stations, schools, houses development in 2012, OceanBank has for the underprivileged and a playground for proactively applied for permits for establishing children... In parallel with these contributions, new branches in Ninh Binh, Ha Nam, Hung Yen, OceanBank spent a substantial funding to Lang Son, Vinh Phuc, Thai Nguyen and Nam Dinh conduct charitable programs in the medical Provinces and prepared for operational facility field. The highlights of OceanBank’s community development for new-established branches. activities included the charitable program At present, applications of OceanBank have named “Light Source”, which provides free-of- been approved by provincial governments and charge surgical treatment for eye diseases that the State Bank of Vietnam – the branch in Hai can cause blindness for the poor across the Duong, and OceanBank is waiting for approval country, giving gifts to children in Centers for from the State Bank of Vietnam for their Social Protection, charitable funding of more application. Besides, OceanBank has moved than VND1 billion for medical treatment in Korea 10 branches/transaction offices to operate at for Tran Danh Tung, the child affected with Apert new locations. The branches of OceanBank syndrome, providing financial aid for medical have been established in accordance with a stations construction… Through these practical long-term strategy of the Bank to develop a contributions to the community of OceanBank’s coherent, effective and convenient business head office and its branches, OceanBank has network in order to provide complete services demonstrated its responsibility and care for the and products and to bring the highest benefits community. These activities have also helped to various customer groups of OceanBank in the OceanBank brand become friendlier in the each region. customers’ perceptions.
At present, the OceanBank system comprises of 21 branches and 101 transaction offices. Besides traditional trading channels, OceanBank focused on expanding and improving the system of ATM and POS. In 2012, OceanBank installed 24 new POS and 18 ATM. Therefore, the total number of card acceptance devices of OceanBank by the end of 2012 increased to 383 POS and 124 ATM.
As of 31 December 2012, the accumulated
29 AWARDS AND SOCIAL RECOGNITIONS
30 Awards and Social Recognitions
The award “Fastest Growing Retail Bank Vietnam 2012” granted by Global Banking & Finance Review (UK)
The Award STP (Straight - Through - Processing) for the banks with high standards in conducting international payments by Wells Fargo
Placed among Top 500 Vietnamese largest enterprises 2012 (VNR500) ranked by VietnamReport JSC.
Placed among Top 100 Vietnamese largest private enterprises 2012 ranked by VietnamReport JSC and Vietnamnet online newspaper.
Placed among Top 1000 Enterprises of tax contribution in Vietnam (V1000) ranked by VietnamReport JSC and Vietnamnet online newspaper in association with Tax Magazine of Vietnam
Placed among Top 200 Fastest Growing Enterprise Vietnam 2012- FAST 500 ranked by VietnamReport JSC and Vietnamnet online newspaper
The Certificate of Merit for complying with taxation regulations and policies awarded by the Minister of Finance pursuant to the Decision No.1201/QD-BTC dated 16 May 2012
The Award “Outstanding Vietnamese Woman” for Mrs. Nguyen Minh Thu, CEO of OceanBank granted by Vietnam Red Cross Society.
The Insignia “For the Development of Vietnam Banking Industry” awarded to Mr. Bui Van Hai – Head of Board of Supervisors of OceanBank and Mrs. Nguyen Thi Mai Huong - Vice CEO of OceanBank by State Bank of Vietnam
The Titles “Young Entrepreneur” and “Typical Young Leaders of Petroleum Industry 2012” awarded to Mrs. Nguyen Thi Minh Phuong, Vice CEO of OceanBank by PetroVietnam.
31 CHARITABLE AND SOCIAL ACTIVITIES
Besides conducting business activities, OceanBank defined one important mission of the Bank is contributing to the development of the community and society through social and charitable activities. In 2012, aiming at developing a friendly and community-oriented image for OceanBank, the Bank actively implemented numerous social programs to help the underprivileged and provided financial aid for many social security projects.
1. Financing for the construction surgery for the patient Nguyen Thanh Tam at Ho of social security projects: Chi Minh City Hospital. - In January 2012, OceanBank began the - In December 2012, OceanBank gave charitable construction of Duc La Culture House in Duc funding of US$40,000 (equivalent to VND834.4 Tho commune, Ha Tinh Province. This project million) for the cranial surgery in Korea of Tran was sponsored by OceanBank with a total Danh Tung, the child who was unluckily affected investment of more than VND1.7 billion. The by Apert Syndrome. project was completed and put into use in 2012. - In 2012, OceanBank sponsored VND3 billion 2. Participation in coordinated to the project of renovating Truong Bon relic in charitable programs with other Nghe An Province. organizations - Continuously upholding the “Light Source” - In January 2012, coordinating with Vietnam program, in 2012, OceanBank financed eye Fatherland Front in Bac Giang Province, OceanBank donated 1000 presents (total value of VND300 million) to the poor in Bac Giang Province in response to an appeal of the charity program “Tet for the poor” launched by the Central Committee of Vietnam Fatherland Front. - In April 2012: OceanBank and the Sao Mai Trio organized the concert “Unwind Day” to fund Mothers with difficult situations in Bac Giang Province. Through this program, OceanBank gave 10 savings books (total value of VND10 million) to Vietnamese Heroic Mothers in Bac Giang Province. - In July 2012: Coordinating with the Vietnam Law Newspaper, OceanBank gave 30 presents (total value of VND30 million) to the Volunteer Youth, Agent Orange victims and explosion survivors in Khe Sanh Town, Huong Hoa District, Quang Tri Province.
32 Charitable and Social Activities
3. Meaningful contributions to - In July 2012, through the Gratitude Program, Charitable Foundations: the Labor Union and Youth Union of OceanBank campaigned for collecting donations and - Donation to Vietnam Association of Victims of giving presents to families under the preferential Agent Orange/Dioxin treatment policy and wounded soldiers’ families - Donation to Fund for the Poor in Ca Mau in many provinces of the country. OceanBank’s Province Youth Union also organized “Green Summer - Financial sponsorship for the Fund “Hepatitis B” Volunteer Campaign” in Bac Giang Province of Hanoi Medical University Hospital. with many practical and meaningful activities. - Financial sponsorship for the scholarship fund - In 2012, OceanBank also implemented many “Light up the belief”. charitable activities such as: Supporting Ha Tinh - Donation to Fund for the Poor in Hai Duong Province Province in the rural development program; - Contributions to the Fund of National Defense Giving scholarships to students of PetroVietnam and Security in Ward 1 - Vung Tau City. University; Supporting small traders who sustained losses in the fire of Quang Ngai Market; Donating to people affected by inundation 4. Actively implementing in Nong Cong (Ha Tinh Province); Supporting the volunteer and charitable the soldiers in Truong Sa Island; Financing for activities: flood prevention and construction of Houses of - In June 2012, on the occasion of Mid-Autumn Gratitude in Ha Tinh Province … Festival, OceanBank’s Youth Union organized charitable programs for pediatric patients at the National Hospital of Pediatrics and Cancer Hospital. The Youth Union in numerous branches of OceanBank also organized visits and gifts giving to underprivileged children at Centers for Social Protection.
33 10 OUTSTANDING EVENTS
Along with the difficulties in the general domestic and global economic context, OceanBank has experienced a hard year in 2012. However, the strong commitment and efforts of the management and all staff of OceanBank have built a firm position for OceanBank in the system of Vietnamese credit institutions. The outstanding achievements of OceanBank in 2012 have marked a significant development of the Bank as well as generated the foundation and optimistic signals for new advancements of OceanBank in 2013.
34 10 Outstanding Events
1 Comprehensive reforming One of the most important action plans of OceanBank for the whole year 2012 was to collaborate with Hermes Capital UK in executing the reforming projects which will be implemented until 2015. In 2012, OceanBank accomplished key parts of the project including organizational and corporate governance restructuring, thus creating a foundation for sustainable development of the Bank.
OceanBank also promptly implemented a series of vital changes from brand identity to sales culture revamping... OceanBank decided to reform its brand identity in order to solidify and synchronize its brand with the Bank’s restructuring process, to build up competitive advantages for OceanBank in the domestic financial market and to create momentum for OceanBank in integrating and penetrating Asian and global financial markets.
Organizational restructuring in line 2 with strategic directions
In order to realize the strategy of promoting OceanBank from 2012 to 2015 to become one of the leading banks in Vietnam, and to keep the No.1 position in several operations and enter the global markets, in 2012, OceanBank altered its organizational and governance structures. The new structure includes: General Shareholders’ Meeting, Board of Directors, Board of Supervisors and Chief Executive Officer (Board of Management). The BoD has established 6 Functional Committees to assist and advise the BoD. The Office of BoD was continuously retained. The BoD will directly administrate the operations of the Bank through the BoM and 6 Functional Committees. The Board of Supervisors has assigned staff in charge of the internal audit. In addition, OceanBank has established 19 Business Units and Departments directly under the BoM to implement business plans and support the operations of the Bank. The BoM directly administrate the branches and transaction offices through these 19 Business Units and Departments.
35 3 Promoting the cooperation with major domestic and international corporations
In 2012, OceanBank continued to maintain excellent relationships and provide products and services for major customers such as Viglacera, Vietnam Airlines, Vinalines, SCTV, Vietnam Railway… Also, OceanBank expanded the implementation of comprehensive cooperation agreements with PetroVietnam’s subsidiaries and associates. In parallel with upholding the cooperation with major domestic corporations, in 2012, OceanBank had the honor of greeting another foreign shareholder, Hermes Capital, a reputable investment corporation from United Kingdom. The strategic cooperation between OceanBank and foreign partners is expected to help the Bank strengthen its financial competence, enhance the governance capability, innovate OceanBank’s brand image, and diversify the service quality.
4 Breakthrough in retail banking products development 2012 was a remarkable year for OceanBank regarding focusing on retail banking with outstanding advancements in electronic banking. OceanBank has successfully implemented the package of electronic banking services and products named Easy which integrated many advanced features to optimally satisfy customers’ needs.
OceanBank has implemented a series of high-tech and user-friendly services and products which successfully won the customers, such as: Open bank account with one SMS, the inter-bank money transfer via card number, smooth connections with the Onepay, Ngan Luong and Smartlink payment gateways, Visa Credit Card issue... OceanBank also offered a range of innovative products such as Super Speed Consumer Loan, Super Quick Card Issue in 5 seconds...... These products and services are all available with electronic transactions, thus making them the most simple and convenient for customers’ utilizations.
Aiming at becoming a trusted partner and a bank of choice for customers, OceanBank have brought its valued customer the beneficial experiences through advanced and convenient services, customer-oriented process, innovative products, diversified distribution channels as well as the dedicated customer care policy.
36 10 Outstanding Events
Honorably 6 receiving many prestigious awards Appreciating outstanding achie-vements of OceanBank and the remarkable contribution of the Bank to the development of the banking sector, in 2012, many reputable domestic and international organizations have selected and granted prestigious awards to OceanBank. These prestigious awards and titles included the award “Fastest Growing Retail Bank Vietnam 2012” granted by the magazine Global Banking & Finance Review; the award Accompanying Enterprises “Straight - Through – Processing” by Wells Fargo (United States of 5 From the beginning of 2012, the OceanBank BoM America) for high standards in determined to focus on improving credit quality and conducting international payments; management capacity of the Bank’s system. OceanBank the title “Top 500 Vietnamese largest has focused on giving a priority lending regime to high performance enterprises in 2012”; the title “Top industries and the four preferential sectors in accordance with the 1000 Enterprises of tax contribution Government’s directions. To deal with the forecast of declining interest in Vietnam”. In this year, OceanBank rates, OceanBank promptly accompanied the enterprises by providing was also honored to be ranked in the preferential programs such as the preferential lending program for Group I of domestic banking systems enterprises in four preferential sectors including small and medium by the State Bank of Vietnam. enterprises (SMEs), cooperatives, and home-based businesses ... to support the business development of these enterprises. The leaders of OceanBank were also honored to be recipients of OceanBank also offered a special lending program to the enterprises numerous prestigious awards such as: in need of additional working capital. Especially, enterprises in the Chairman of OceanBank, Mr. Ha Van preferential sectors in accordance with directions of Government and Tham was granted the certificate of the State Bank of Vietnam can borrow from OceanBank at the super merit “Excellent Entrepreneur”, CEO low interest rate of 6.8% per annum. At the same time, OceanBank of OceanBank, Mrs. Nguyen Minh Thu continued to implement preferential programs regarding interest received the Award “Outstanding rates and banking service fees for account payment, international Vietnamese Woman”... payments, bank guarantees...
37 7 Enhancing management capability and human resources development and training As of 31 December 2012, OceanBank has 2,169 employees in the entire system of the Bank, an increase of 321 people, compared to 2011. In 2012, OceanBank comprehensively developed and deployed the human resources projects such as the Remuneration Project, KPIs Development Project, Reforming Project and Performance Management and Appraisal Software Project. In addition, in order to improve the efficiency of performance management and evaluation, the Human Resources and Training Division coordinated with the Human Resources Committee to develop a human resources development and management plan to implement three major tasks: Developing and improving human resources policies, Enhancing human resources management, Expanding applicant network and active recruitment. As OceanBank is striving to become the leading retail bank of Vietnam by 2015 and actively entering the global market, OceanBank have paid due attention to training and re-training the professional skills for OceanBank’s workforce; therefore most of the employees of OceanBank have opportunities to promote their competences, professional skills and foreign language, to adapt themselves to modern banking products and services… Especially in 2012, the Human Resources and Training Division also focused on personnel development for new-established transaction offices in accordance with the new brand identity system. Besides providing training courses of basic knowledge and professional skills to all staff of transaction offices, OceanBank also offered specialized advanced courses for every working position in three new-established transaction offices (No.18 Ngo Quyen, StarCity Le Van Luong and Trung Yen Plaza). Therefore, all staff of these offices were qualified prior to the opening day.
8 Actively participating in charitable activities
Along with financing for the development of social security projects, in 2012, OceanBank provided significant funding to implement medical charitable programs. Continuously upholding the “Light Source” program initiated in 2011, in 2012, OceanBank financed eye surgery for the patient Nguyen Thanh Tam at Ho Chi Minh City Hospital. Especially, OceanBank gave remarkable charitable funding of US$40,000 (equivalent to VND834.4 million) for the cranial surgery in Korea of Tran Danh Tung, the child who was unluckily affected by Apert syndrome. OceanBank also actively implemented meaningful charitable programs such as: visiting and giving presents to pediatric patients at National Hospital of Pediatrics; giving gifts to underprivileged children at Centers for Social Protection as well as to the Volunteer Youth and Agent Orange victims… Through these practical contributions to the community of OceanBank’s head office and its branches, the Bank has demonstrated its responsibility and care for the community.
38 10 Outstanding Events
9 Organizing many interesting movement activities
In 2012, in order to create the active working environment in the whole system, OceanBank promoted numerous meaningful Party- Union activities and programs such as “Bonus for Customer Referral”, “Savings Account Customer Referral”… Besides the emulation movements regarding banking business, OceanBank successfully organized interesting art, sports and cultural activities which attract the employees and uphold the solidarity strength of OceanBank. The Art Performing Team of OceanBank actively participated in many events of the Bank including: Hoi An Conference, Spring Aspiration Gala and other activities organized by OceanBank’s Youth Union…; the football team of OceanBank joined numerous movement tournaments and attained significant achievements. OceanBank’s Youth Union also campaigned for many meaningful charitable activities nationwide. Especially, in 2012, OceanBank successfully organized the 1st Congress of Ho Chi Minh Communist Youth Union (term of 2012- 2014), and the 7th Congress of Labor Union (term of 2012-2014), paving the way for new developments of OceanBank in general, and for Labor Union and Youth Union of the Bank in particular.
Information Technology 10 In 2012, the communication and information technology infrastructure of OceanBank was developed and upgraded unceasingly to ensure the stability and safety of the system. Almost 100% of business transactions of OceanBank have been computerized at different levels. OceanBank continues to develop and apply modern technologies to its operations in order to increase the value of services, and to expand connections to all customers. With the solid and reliable information technology infrastructure, OceanBank is able to implement in- depth business processes, develop new services and products as well as effectively supporting the risk management. Noticeably enough, most of these applications are self-developed by the Application and Development Division of OceanBank. Besides investing in high quality equipment and software from reputable security providers such as Cisco, Checkpoint, IBM and Juniper to enhance the security of the system, OceanBank also plans to develop and deploy a security information management system in accordance with international standards. OceanBank has signed a consulting contract for implementing a security information system for card transactions according to PCI-DSS standard and OceanBank expects to receive certification in the first quarter of 2013. OceanBank also plans to develop a security information system according to ISO 27001 standard in 2013.
39 BUSSINESS PLAN 2013
40 41 BUSINESS PLAN 2013
t is forecasted that, 2013 will still be a year - Tackle outstanding bad debts, reduce full of difficulties and challenges for the nonperforming debts in credit operations global economy in general and for Asian in accordance with the macro solutions economies including Vietnam in particular. prescribed by the State Bank of Vietnam and The global economy is currently impacted the Government, as well as apply the creative Iby a series of negative factors such as a debt solutions of OceanBank to gradually improve restructuring process in Europe, China’s slowing the quality of credit operations of every business economy and financial issues of the United unit and the whole system of OceanBank. States of America. - Unceasingly improve the organizational In this general circumstance, Vietnam’s structure towards divisional structure in order economy is facing some serious inevitable to enhance the vertical management roles of difficulties and challenges such as upheavals in every Division, especially the Business divisions. macro-economy, inflation pressure to remain at a high level, slowing domestic economic growth rate due to the implementation of Government policies to stabilize the macro-economy.
In 2013, domestic financial markets in general and the banking sector in particular are forecasted to still be in the doldrums as the bad debt situation has been showing no signs of improvement, domestic banks have to compete fiercely to maintain and develop customer base in order to achieve the planned revenue and income in 2013. However, the BoD of OceanBank determined these challenges as opportunities to continuously assert OceanBank’s position in the banking and financial market of Vietnam.
1. Strategic directions and objectives in 2013:
- Reform and develop OceanBank’s brand identity, position OceanBank as a modern and professional retail bank.
42 Business Plan 2013
- Continuously focus on deploying the business - Continuously develop and standardize the initiatives on a large scale to improve the sales core products for each customer group and and expand the customer base, in order to each target market. assure the objectives of sustainable and efficient - Improve the efficiency and quality of the developments. distribution network for target market segments. - Review and develop new products and services At the same time, create major breakthroughs with service fee revenue in order to increase the in electronic distribution channels in order portion of revenue from service fees in the total to improve the competitive advantages of revenue of the Bank. OceanBank.
- Develop specialized banking services and - Develop and implement remuneration policies products with high-tech features and added for employees according to their contributions value for customers. Especially, apply modern to the accomplishment of their business unit and technologies in retail operations in order to of OceanBank. Remuneration at OceanBank improve the quality of products and services, will be assured at the comparative level of increase the brand value of OceanBank and the industry and other Joint Stock Commercial enrich the customer experience. Banks.
2. The business targets in 2013:
- Total assets by the end of 2013 reach VND65,270 billion
- Funds raised from customers by the end of 2013 to reach VND45,540 billion
- Loan Balance: VND37,522 billion
- Profit before tax: VND216 billion
- Net revenue from service fee/ Total net operating revenue: 2%
- Chartered Capital: VND5,350 billion
- Dividend per share: 2.44%
- Debt Type 3-5: <3%, Capital Adequacy Ratio CAR> 9%
- The total provision for 2013 is estimated at VND742 billion
- Open 19 new branches and transaction offices in target regions.
- The total number of individual customers to reach approximately 500,000 people (an increase of about 190,000 customers)
43 In brief, comparing to 2012, OceanBank’s business plan in 2013 represents a slight growth in the main targets, as follows:
Unit: VND billion
Actuals Plans in Difference Growth No. Items 2012 2013 Rate
I Total assets 64,462 65,270 808 1%
II Total funds raised 59,398 58,790 -608 -1%
2.1 Funds raised from primary market 43,240 45,540 2,300 5%
- From the population 10,906 14,500 3,594 33%
- From enterprises and businesses 3,312 6,750 3,438 104%
- From major customers and strategic partners 29,022 24,290 -4,732 -16
2.2 Funds raised from secondary market 16,158 13,250 -2,908 -18
III Loan Balance 33,502 37,522 4,020 12
IV Pre-Provision Operating Profit 778 958 180 23%
V Provision Expense 468 742 274 59%
VI Operating Profit before tax and after provision 310 216 -94 -30%
The detailed operating plans: with new partners in the Petroleum Industry, especially with high performing companies - Fundraising: through developing a wide variety such as BSR, PVEP, PVI ... in order to develop and of products, services and policies to compete solidify the prestigious and professional brand with other banks and providing smart promotion and image of OceanBank in the relationship with programs to attract the savings from people, the Bank’s strategic partners. OceanBank continues to promote fund raising activities in order to ensure the stability of the - Investment activities: Strengthening the funds and create momentum for development investment management monitoring, of total assets and new services of the Bank. restructuring the investment portfolio towards reducing short-term investments - Credit operation: Focus on improving the and underperforming investments, liquidate quality of credit operation, implementing credit unprofitable and high-risk investments; Limiting disbursement in accordance with OceanBank’s investments in non-core businesses which do capital and funds as well as the commitment not contribute to the long-term benefit of to customers, restructuring credit terms, credit OceanBank and remain vulnerable to macro- categorizing, making provisions in accordance economic conditions; Seeking investment with regulations of the State Bank of Vietnam, opportunities in high performance projects in unceasingly strengthening close partnerships the petroleum industry. with current partners, promoting partnership - Focusing on Retail Banking services for individual
44 Business Plan 2013
customers, increasing portion of revenue from - Business network and Distribution channel services in total revenue of OceanBank through development: Continuously implementing the providing advanced services with the most plan of network expansion initiated in 2012. From convenient features. the beginning of 2013, OceanBank actively plans to establish 19 new branches in key cities, - Human resource development and organization: provinces and major economic regions. Improving the quality of the recruitment process, human resources management and allocation in accordance with the human resource strategy; Developing process to quarterly valuate and review the performance of management and executives so that OceanBank can timely revise remuneration for excellent staff and promote them to suitable positions; Developing the process to allocate remuneration budget to each business unit so that each business unit can actively remunerate its personnel precisely in accordance with normal practices of the banking industry.
45 NETWORK
HA NOI Minh Khai Transaction office Thang Long Branch No.308D, Minh Khai, Hai Ba Trung No.18 Lang Ha, Dong Da, Ha noi Ha Noi Branch Tel:04.36321016 Fax:04.36321017 Tel:04.37726000 Fax:04.37725967 No.48 Tran Nhan Tong, Hai Ba Trung Tel:04.39366868 Fax:04.39365929 Trang Tien Transaction office Dong Do Transaction office No.35 Trang Tien, Hoan Kiem No.239 Xuan Thuy, Cau Giay Ba Dinh Transaction office Tel:04.39369004 Fax:04.39368967 Tel:04.37868958 Fax:04.37868957 No.63A Hang Bun, Ba Dinh Tel:04.37346617 Fax:04.37346582 Giai Phong Transaction office Nguyen Chi Thanh Transaction office No.1111 Giai Phong, Hoang Mai No.18 Nguyen Chi Thanh, Ba Dinh Hoan Kiem Transaction office Tel:04.36649985 Fax:04.36649985 Tel:04.37247100 Fax:04.37247101 No.18 Ngô Quyen street Tel:04.39429907 Fax:04.39429910 Linh Dam Transaction office Pham Ngoc Thach Transaction office No. 9 - Lot BT1 Nguyen Huu Tho, No.2B Pham Ngoc Thach, Dong Da Thuy Khue Transaction office Hoang Mai Tel:04.35746652 Fax:04.35746653 No.235 Lac Long Quan street, Tel:04.35401576 Fax:04.35401577 Nghia Do, Cau Giay Trung Yen Transaction office Tel:04.37593242 Fax:04.37593243 Bach Mai Transaction office No.1 Trung Hoa, Trung Yen, Cau Giay No.23 Lac Trung, Hai Ba Trung Tel:04.37726946 Fax:04.37727976 Thanh Nhan Transaction office Tel:04.36276057 Fax:04.36276058 No.176-178 Kim Nguu street, Lac Long Quan Transaction office Hai Ba Trung Le Duan Transaction office No.395 Lac Long Quan, Tay Ho Tel:04.39725795 Fax:04.39725794 No.269 Le Duan, Hai Ba Trung Tel:04.37592102 Fax:04.37592103 Tel:04.39410955 Fax:04.39410956 Hai Ba Trung Transaction office Doi Can Transaction office No.125C Lo Duc street, Hai Ba Trung Quoc Tu Giam Transaction office No.195B Doi Can, Ba Dinh, Hanoi Tel:04.39725793 Fax:04.39725792 No.13A Quoc Tu Giam, Dong Da Tel:04.37347716 Fax:04.37347717 Tel:04.37326000 Fax:04.37326001 Au Co Transaction office Dao Tan Transaction office No.33 Au Co street, Tay Ho district Hoang Mai Transaction office No.11 Dao Tan, Ba Dinh Tel:04.37186982 Fax:04.37185476 No. 311 Den Lu street, Hoang Mai Tel:04.37668391 Fax:04.37668392 Tel:04 36342923 Fax:04 3634 2924 Tay Ho Transaction office Dong Da Transaction office No.16 Yen Phu, Tay Ho district Kham Thien Transaction office No.120M2 Huynh Thuc Khang, Dong Da Tel:04.37152156 Fax:04.37152123 No.91 Kham Thien, Dong Da Tel:04.37730860 Fax:04.37730859 Tel:04.35161940 Fax:04.35161941 Long Bien Transaction office Hoang Quoc Viet Transaction office No.73 Nguyen Son, Long Bien Le Van Huu Transaction office No.135 Hoang Quoc Viet, Cau Giay Tel:04.38726932 Fax:04.38726933 No.76A Le Van Huu, Hai Ba Trung Tel:04.37931457 Fax:04.37931458 Tel:04.9447853 Fax:04.9447854 Dao Duy Anh Transaction office Thai Thinh Transaction office No.1 Dao Duy Anh, Dong Da Bat Trang Transaction office No.55, Thai Thinh II, Thai Thinh Street Tel:04.3574.6638 Fax:04.3577.2025 Unit 3, Bat Trang Village, Bat Trang Tel:04.35666125 Fax:04.35666124 Sub-District, Gia Lam Tel:04.36715125 Fax:04 36715126
46 Ha Dong Transaction office No.415 Quang Trung, Ha Dong Tel: 04.33512220 Fax:04.33512230
Ly Thuong Kiet Transaction office Ha Noi Tourist Building, Pham Su Manh Tel:04.39387376 Fax:04.39387377
Dau khi Transaction Office No.173 Trung Kinh, Cau Giay Tel:04 37823389 Fax:04 37823390
Truong Dinh Transaction office No.339 Truong Dinh, Tuong Mai, Hoang Mai Tel:04.36629016 Fax:04.36629015
My Dinh Transaction office No.20, Song Da Bulding, Tu Liem Tel:04.37877925 Fax:04.37877923
HAI DUONG Nguyen Trai Transaction office Da Nang Transaction office No.2 Hoang Hoa Tham, Nguyen Trai, No.213 Da Nang Street, Cau Tre Sub- Hai Duong Branch Hai Duong City District, Ngo Quyen No.199 Nguyen Luong Bang, Tel:0320.3844319 Fax:0320.3844319 Tel:031.3565696 Fax:031.3565279 Hai Duong City Tel:0320.3892146 Fax:0320.3894369 Tu Ky Transaction office Lach Tray Transaction office 1st Floor, Tu Ky Telecommunication No.219 C Lach Tray Street, Dong Tran Phu Transaction office Center, Tu Ky Quoc Binh Sub-District, Ngo Quyen No.109 Tran Phu, Hai Duong City Tel:0320.3747196 Fax:0320.3747196 Tel:031.326 1998 Fax:031.326 1629 Tel:0320.3858849 Fax:0320.3858849 Ninh Giang Transaction office QUANG NINH Quang Trung Transaction office No.93, Ninh Giang Town, Ninh Giang No.51 Quang Trung, Hai Duong City Tel:0320.3767059 Fax:0320.3767059 Quang Ninh Branch Tel:0320.3845373 Fax:0320.3845373 Unit 66, Ward 3, Hong Gai Sub-district, Binh Giang Transaction office Ha Long City Chi Linh Transaction office No.160 Tran Hung Dao, Ke Sat Town, Tel:033.3518890 Fax:033.3518900 No.132, Nguyen Trai, Sao Do Town, Binh Giang Chi Linh Tel:0320.3775778 Fax:0320.3775778 Uong Bi Transaction office Tel:0320.3589300 Fax:0320.3586603 Group 43, ward 12, Quang Trung, Cau Ram Transaction office Uong Bi City Gia Loc Transaction office Cau Ram Post Office, Tan Huong, Tel:033.3565958 Fax:033.3565956 Gia Loc Town, Gia Loc Ninh Giang Tel:0320.3716349 Fax:0320.3716349 Tel:0320.3549600 Fax:0320.3549601 Cam Pha Transaction office No.48, To Hieu Street, Cam Trung, Thanh Mien Transaction office HAI PHONG Cam Pha City No.26 Le Binh Street, Thanh Mien Tel:033.3939588 Fax:033.3939890 Town, Thanh Mien Hai Phong Branch Tel:0320.3731668 Fax:0320.3731668 No.418-418A-420 To Hieu Street, Tran Mao Khe Transaction office Nguyen Han Sub-District, Le Chan No.46- 48 Vinh Thong, Mao Khe Town, Pham Ngu Lao Transaction office Tel:0313715555 Fax:0313786878 Dong Trieu No.1A Pham Ngu Lao Tel:033.3586 465 Fax:033.3586469 Tel:0320.3855761 Fax:0320.3859735
47 NETWORK
BAC GIANG Dau Khi Transaction office Hoang Van Thu Transaction office PVFC Bulding, 30/4 road, Hai Chau No.298 Hoang Van Thu, Tan Binh Town Bac Giang Branch Town, Da Nang City Tel:08.39484498 Fax:08.39484497 No.151 Hung Vuong Street, Tel:0511.3780767 Fax:0511.3780666 Bac Giang City Truong Dinh Transaction office Tel:0240.3822999 Fax:0240.3523689 Cam Le Transaction office No.149B Truong Dinh, Sub-District 9, No.60 Ong Ich Duong, Cam Le Town, District 3 Nguyen Thi Luu Transaction office Da Nang City Tel:08.35262222 Fax:08.35262000 No.02 Nguyen Thi Luu, Bac Giang City Tel:05113695445 Fax:05113695444 Tel:0240.3822688 Fax:0240.3720068 Le Duan Transaction office Son Tra Transaction office No.1-5 Le Duan, Ben Nghe, District 1 NGHE AN No.150 Nguyen Cong Tru, Son Tra, Da Tel:08.39110251 Fax:08.39100792 Nang City Vinh Branch Tel:0511. 3815347 Fax:0511. 3815345 Tran Nao Transaction office No.19, Quang Trung, Vinh City No.67 Tran Nao, Binh An, Dist.2 Tel:038.8600288 Fax:038.8600388 QUANG NGAI Tel:08.37407739Fax:08.37407707
Phuong Dong Transaction Office Quang Ngai Branch Ly Thai To Transaction office No.218 Le Duan, Truong Thi, Vinh City No.55 - 57 Hung Vuong Avenue, Tran No.506 - 508 Ly Thai To, Sub-District 10, Tel:038.8600599 Fax:038.8600799 Hung Dao Sub-district District 10 Tel:055.3715888 Fax:055.3715886 Tel:08.39270779 Fax:08.39274889 Le Hong Phong Transaction Office No.93, Le Hong Phong, Vinh City Hung Vuong Transaction office Ho Chi Minh City Branch Tel:038.8600489 Fax:038.8600589 Petrosetco Tower, Dong Lo, Binh No.117-119-121 Nguyen Du Street, Thuan, Binh Son Town Ben Thanh, District 1 Nguyen Trai Transaction Office Tel:055.3714946 Fax:055.3714945 Tel:08.35210300 Fax:08.35210301 No.223 Nguyen Trai, Quan Bau, Vinh City Dung Quat Transaction office District 7 Transaction office Tel:038.3512599 Fax:038.3513799 Petrosetco Tower, Dong Lo, Binh No. 47-49 Nguyen Thi Thap, Tan Hung, Thuan, Binh Son Town District 7 Ben Thuy Transaction Office Tel:055.3614888 Fax:055.3614887 Tel:08.62983719 Fax:08.62983725 No.9, Nguyen Van Troi, Vinh City Tel:038.8688599 Fax:038.8688799 HO CHI MINH CITY Tan Phu Transaction office No. 475D Le Trong Tan, Son Ky Sub- DA NANG Sai Gon Branch District, Tan Phu District No.185 - 187 Nguyen Thai Hoc, Dist.1 Tel:08.38160320 Fax:08.38160420 Da Nang Branch Tel:08.62913299 Fax:08.62913298 No.80-82 Ham Nghi, Thac Gian, Thanh August Revolution Transaction office Khe Town, Da Nang City Ben Nghe Transaction office No.739 August Revolution, Sub-District Tel:0511.3898787 Fax:0511.3898784 No.68 Ngo Duc Ke, District 1 6, Tan Binh District Tel:08.39151845 Fax:08.39151830 Tel:08.39771662 Fax:08.39771663 Ong Ich Khiem Transaction office No.106 Ong Ich Khiem, Tam Thuan, Nguyen Van Troi Transaction office Tan Binh Transaction office Thanh Khe, Da Nang City No.144 Nguyen Van Troi, Sub-District No.72 Cong Hoa Street, Sub-District 4, Tel:0511.3531935 Fax:0511.3531936 8, Phu Nhuan District Tan Binh District Tel:08.38475678 Fax:08.38424554 Tel:08.38118596 Fax:08.38118595
48 BINH DUONG
Binh Duong Branch No.339, Binh Duong Street, Chanh Nghia Ward, Thu Dau Mot Town, Binh Duong City Tel:0650.3857888 Fax:0650.3857688
THANH HOA
Thanh Hoa Branch No.103 -105, Le Loi, Lam Son Sub- District, Thanh Hoa City Tel:0373.915388 Fax:0373.915008
KHANH HOA
Nha Trang Branch No. 53 Yersin, Nha Trang City Tel:058.3822288 Fax:058.3811177
DONG NAI Mac Dinh Chi Transation Office No.43 Mac Dinh Chi, Da Kao Sub- CA MAU Dong Nai Branch District, District 1 No. 229-231 Dong Khoi, Bien Hoa City Tel:08.35218453 Fax:08.35218452 Ca Mau Branch Tel:061.8871111 Fax: 061.8877111 No.13A Hung Vuong Street, Sub- Phu My Hung Transaction office District 7, Ca Mau City BINH DINH Petroland Building, No. 12 Tan Trao, Tel:0780.3540072 Fax:0780.3540035 Tan Phu District Quy Nhon Branch Tel:08.54160670 Fax:08.54160671 CAN THO No.70 Le Duan, Quy Nhon City, Binh Dinh BA RIA VUNG TAU Can Tho Branch Tel:056.3522688 Fax:056.3522689 No. 6 Hoa Binh, An Cu, Ninh Kieu, Can Vung Tau Branch Tho City THAI BINH No.29 Tran Hung Dao, Sub-District 1, Tel:0710.3735835 Fax:0710.3735830 Vung Tau City Thai Binh Branch Tel:064.3515599 Fax:064.3515566 HA TINH No.134 Tran Thai Tong, Bo Xuyen, Thai Binh City Nguyen Thai Hoc Transaction office Ha Tinh Branch Tel:036.3658888 Fax:036.3848222 No.08-G3 Nguyen Thai Hoc, Sub- BMC Building, No.2 Phan Dinh Phung, District 7, Vung Tau City Nam Ha Ward, Ha Tinh City Tel:064.3597938 Fax:064.3597929 Tel:039. 3777729 Fax:039. 3777792
Nam Ky Khoi Nghia Transaction office Ky Anh Transaction office No.238 Nam Ky Khoi Nghia, Thang Hung Hoa Quarter, Ky Anh, Ha Tinh Tam District, Vung Tau City City Tel:064.3513189 Fax:064.3513188 Tel:0393 721668 Fax:0393 721667
Rach Dua Transaction office Nguyen Chi Thanh Transaction office No. 430 , 30/4 street, Rach Dua, Vung No.73 Nguyen Chi Thanh, Ha Tinh City Tau City Tel:0393.777656 Fax:0393.777676 Tel:064.3627757 Fax:064.3627759
49 AUDITED FINANCIAL STATEMENTS 2012
50 Audited Financial Statements 2012
STATEMENT OF THE BOARD OF DIRECTORS
The Board of Directors of Ocean Commercial Joint Stock Bank (“the Bank”) presents this report together with the Bank’s financial statements for the year ended 31 December 2012.
THE BOARDS OF MANAGEMENT AND DIRECTORS
The members of the Boards of Management and Directors of the Bank who held office during the year and to the date of this report are as follows:
Board of Management Mr. Ha Van Tham Chairman Ms. Vu Thi Thanh Huong Vice Chairman Mr. Doan Phung Member Ms. Nguyen Minh Thu Member Mr. Mai Van Cuong Member (resigned on 16 April 2012) Mr. Dang The Truyen Independent Member (appointed on 19 May 2012) Ms. Le Thi Thu Thuy Member (appointed on 19 May 2012)
Board of Directors Ms. Nguyen Minh Thu General Director Mr. Tran Thanh Quang Deputy General Director Mr. Nguyen Manh Ha Deputy General Director Ms. Le Thi Thu Thuy Deputy General Director Mr. Nguyen Van Hoan Deputy General Director Mr. Vo Viet Trung Deputy General Director Ms. Nguyen Thi Mai Huong Deputy General Director Ms. Nguyen Thi Kieu Lien Deputy General Director Mr. Le Tuan Anh Deputy General Director Ms. Nguyen Thi Minh Phuong Deputy General Director (appointed on 15 August 2012)
51 BOARD OF DIRECTORS’ STATEMENT OF RESPONSIBILITY
The Board of Directors of the Bank is responsible for preparing the financial statements of each year, which give a true and fair view of the financial position of the Bank and of its results and cash flows for the year. In preparing these financial statements, the Board of Directors is required to:
Select suitable accounting policies and then apply them consistently;
Make judgments and estimates reasonably and prudently;
State whether applicable accounting principles have been followed, subject to any material departures disclosed and explained in the financial statements;
Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Bank will continue in business; and
Design and implement an effective internal control system for the purpose of properly preparing and presenting the financial statements so as to minimize errors and frauds.
The Board of Directors is responsible for ensuring that proper accounting records are kept, which disclose, with reasonable accuracy at any time, the financial position of the Bank and to ensure that the financial statements comply with Vietnamese Accounting Standards, Vietnamese Accounting System applicable to credit institutions in Vietnam and prevailing relevant regulations in Vietnam. The Board of Directors is also responsible for safeguarding the assets of the Bank and hence for taking reasonable steps for the prevention and detection of frauds and other irregularities.
The Board of Directors confirms that the Bank has complied with the above requirements in preparing these financial statements.
For and on behalf of the Board of Directors,
Nguyen Minh Thu General Director
Hai Duong, 18 March 2013
52 Audited Financial Statements 2012
No.: Soá 649/ Delloite - AUDHN - RE
INDEPENDENT AUDITORS’ REPORT
To: Shareholders The Boards of Management and Directors Ocean Commercial Joint Stock Bank
We have audited the accompanying balance sheet of Ocean Commercial Joint Stock Bank (“the Bank”) as at 31 December 2012, the related statements of income and cash flows for the year then ended, and the notes thereto (collectively referred to as “the financial statements”) prepared on 18 March 2013. The accompanying financial statements are not intended to present the financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Vietnam..
Respective Responsibilities of the Board of Directors and Auditors
As stated in the Statement of the Board of Directors, these financial statements are the responsibility of the Bank’s Board of Directors. Our responsibility is to express an opinion on these financial statements based on our audit.
Basis of Opinion
We have conducted our audit in accordance with Vietnamese Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
Opinion
In our opinion, the accompanying financial statements give a true and fair view of, in all material respects, the financial position of the Bank as at 31 December 2012 and the results of its operations and its cash flows for the year then ended in accordance with Vietnamese Accounting Standards, Vietnamese Accounting System applicable to credit institutions in Vietnam and prevailing relevant regulations in Vietnam.
53 We draw attention to Note 7, Note 8 and Note 11 of the Notes to the financial statements. As at 31 December 2012, the Bank has deposits, loans and bond investments of the Bank in Vietnam Shipbuilding Industry Group (“Vinashin”) and some subsidiaries of Vinashin which were overdue. However, in 2012, based on guidelines of Government agencies on identifying and restructuring loans of Vietnam Shipbuilding Industry Group and allowing credit institutions to set appropriate provision in accordance with the credit institutions’ financial ability, the Bank followed the guidelines, maintained the status quo, wrote off accrued interest income and made provisions for the above mentioned loans and receivables in accordance with the Bank’s financial ability.
Truong Anh Hung Nguyen Tuan Anh Deputy General Director Auditor C.P.A Certificate No D.0029/KTV C.P.A Certificate No N.1291/KTV
For and on behalf of DELOITTE VIETNAM COMPANY LIMITED
18 March 2013 Hanoi, S.R. Vietnam
54 Audited Financial Statements 2012
BALANCE SHEET As at 31 December 2012 Unit: VND
NO. ITEMS Notes 2012 2011 A. ASSETS I. Cash 5 183,872,462,000 291,556,406,039 II. Balances with the State Bank of Vietnam 6 3,573,424,096,537 586,334,746,836 III. Placements with and loans to 7 15,330,212,257,263 24,217,086,225,731 other credit institutions 1. Placements with other credit institutions 13,892,737,288,513 24,217,086,225,731 2. Loans to other credit institutions 1,448,337,500,000 - 3. Provision for credit losses of loans to other (10,862,531,250) - credit institutions IV. Trading securities 10 32,066,239,276 137,664,743,722 1. Trading securities 52,142,851,259 240,603,305,143 2. Provisions for diminution in value of trading 12 (20,076,611,983) (102,938,561,421) securities V. Loans to customers 25,564,979,455,018 18,955,669,015,033 1. Loans to customers 8 26,240,060,649,543 19,187,065,606,171 2. Provisions for credit losses of loans to 9 (675,081,194,525) (231,396,591,138) customers VI. Investment securities 11 14,489,073,858,888 10,990,739,774,742 1. Available-for-sale investment securities 13,766,965,197,931 10,210,638,628,359 2. Held-to-maturity investment securities 892,939,510,957 939,162,906,203 3. Provisions for diminution in value of 12 (170,830,850,000) (159,061,759,820) investment securities VII. Long-term investments 13 568,263,069,537 576,896,734,855 1. Investments in joint-ventures 68,756,767,146 68,756,767,146 2. Other long-term investments 520,973,301,042 508,139,967,709 3. Provisions for diminution in value of longterm (21,466,998,651) - investments VIII. Fixed assets 231,609,311,367 232,216,611,827 1. Tangible fixed assets 14 130,014,535,188 129,765,465,445 a. Cost 208,365,929,841 180,237,176,586 b. Accumulated depreciation (78,351,394,653) (50,471,711,141) 2. Intangible fixed assets 15 101,594,776,179 102,451,146,382 a. Cost 126,097,988,306 117,748,349,916 b. Accumulated amortisation (24,503,212,127) (15,297,203,534) IX. Other assets 4,488,598,678,631 6,651,152,618,266 1. Other receivables 16 1,914,438,648,011 3,854,291,001,433 2. Interest and fee receivables 2,389,901,075,406 1,966,477,779,987 3. Other assets 17 230,446,021,609 893,516,124,318 4. Provisions for diminution in value 18 (46,187,066,395) (63,132,287,472) of other assets TOTAL ASSETS 64,462,099,428,517 62,639,316,877,051
55 NO. ITEMS Notes 2012 2011 B. LIABILITIES AND OWNERS’ EQUITY I. Discount of valuable papers with 2,921,284,795,929 967,489,581,219 the State Bank of Vietnam II. Deposits and borrowings from other 19 13,237,016,579,735 17,520,283,017,018 credit institutions 1. Deposits from other credit institutions 9,737,876,579,735 17,520,283,017,018 2. Borrowings from other credit institutions 3,499,140,000,000 - III. Deposits from customers 20 43,239,855,989,834 38,589,892,625,378 IV. Derivative financial instruments - 4,933,280,000 and other financial liabilities V. Grants, trusted funds and borrowings at - 300,000,000,000 risk of credit institution VI. Other liabilities 21 579,127,996,916 612,667,776,541 1. Accrued fee and interest expenses 488,172,257,404 478,353,042,119 2. Other payables and liabilities 64,197,084,687 113,429,603,490 3. Other provisions 9 26,758,654,825 20,885,130,932 TOTAL LIABILITIES 59,977,285,362,414 57,995,266,280,156 VII. Capital and reserves 22 4,484,814,066,103 4,644,050,596,895 1. Capital 4,002,955,516,400 4,002,955,516,400 a. Charter capital 4,000,000,000,000 4,000,000,000,000 b. Share premium 2,916,370,000 2,916,370,000 c. Other capital 39,146,400 39,146,400 2. Reserves 236,096,841,462 150,616,565,770 3. Retained earnings 245,761,708,241 490,478,514,725 TOTAL LIABILITIES AND OWNERS’ EQUITY 64,462,099,428,517 62,639,316,877,051
OFF BALANCE SHEET ITEMS
NO. ITEMS 2012 2011 VND VND I. Contigent liabilities 2,388,072,691,615 2,789,617,404,019 1. Loan guarantees 15,000,000,000 25,000,000,000 2. L/C guarantees 924,175,097,689 1,505,108,092,573 3. Foreign exchange commitments - 4,933,280,000 4. Other guarantees 1,448,897,593,926 1,254,576,031,446
Nguyen Minh Thu Nguyen Thi Nga Le Thi Thanh Hien General Director Chief Accountant Preparer
18 march 2013 56 Audited Financial Statements 2012
INCOME STATEMENT For the year ended 31 December 2012
Unit: VND NO. ITEMS Notes 2012 2011 1. Interest and similar income 23 6,404,273,557,690 6,428,069,375,641 2. Interest and similar expenses 24 4,783,911,029,098 4,833,514,862,029 I. Net interest income 1,620,362,528,592 1,594,554,513,612 3. Income from services 43,401,907,143 46,048,215,063 4. Expenses on services 27,554,530,957 30,633,448,416 II. Net profit from services 25 15,847,376,186 15,414,766,647 III. Net gain/(loss) from foreign 26 30,142,995,938 (48,487,740,531) exchange activities IV. Net gain/(loss) from trading securities 27 36,338,111,001 (73,740,294,199) and foreign exchange rate translation V. Net (loss) from trading investment securities 27 (18,289,775,588) (50,717,788,110) 5. Other operating income 28 70,565,768,945 77,664,228,009 6. Other operating expense 29 331,139,187,315 91,587,284,085 VI. Net (losses) from other activities (260,573,418,370) (13,923,056,076) VII. Dividends and share of profit 48,582,382,980 22,991,435,769 of joint ventures, associates VIII. Operating expenses 30 694,346,637,740 614,699,977,392 IX. Profit before tax and credit provision expenses 778,063,562,999 831,391,859,720 X. Credit provision expenses 9 467,852,919,358 187,997,900,418 XI. Profit before taxes 310,210,643,641 643,393,959,302 7. Current tax expenses 31 66,996,334,762 155,462,843,940 XII. Corporate income tax expenses 66,996,334,762 155,462,843,940 XIII. Profit after corporate income tax 243,214,308,879 487,931,115,362 XIV. Earnings per share 32 608 1,286
Nguyen Minh Thu Nguyen Thi Nga Le Thi Thanh Hien General Director Chief Accountant Preparer
18 march 2013
57 CASH FLOW STATEMENT For the year ended 31 December 2012 Unit: VND NO. ITEMS 2012 2011ø CASH FLOWS FROM OPERATING ACTIVITIES 01. Interest and similar incomes 5,675,327,329,092 5,556,150,145,340 02. Interest and similar expenses (4,774,091,813,813) (4,791,827,290,758) 03. Income from services 15,847,376,186 15,414,766,647 04. Net cash receipt from dealings in foreign currencies, 73,024,070,609 (112,771,065) gold and trading securities 05. Other income 34,170,471,443 57,478,887,797 06. Receipts from debts written-off or paid off 10,779,043,366 41,183,431,937 by risk fund 07. Payroll, administration and public services expense (636,172,270,823) (813,517,284,171) 08. Corporate income tax paid (122,521,726,627) (180,173,488,409) Operating profit/(loss) before movements in assets 276,362,479,433 (115,403,602,682) and working capital Movement in operating assets (13,626,099,355,983) (7,230,943,404,197) 09. (Increase) in deposits at and loans to (6,142,532,058,804) (6,263,872,451,613) other credit institutions 10. (Increase) in trading securities (2,695,975,381,692) (1,408,959,574,609) 11. (Increase) in loans to customers (7,052,995,043,372) (1,556,104,958,910) 12. (Decrease)/Increase of the provision source (119,924,756,582) 59,408,490,030 for making up losses 13. Decrease in other operating assets 2,385,327,884,467 1,938,585,090,905 Movement in operating liabilities 1,953,720,917,343 6,929,013,728,344 14. Increase/(Decrease) in borrowings from 1,953,795,214,710 (95,026,114,406) Government and State Bank of Vietnam 15. (Increase)/Decrease in deposits and borrowings (4,283,266,437,283) 11,437,100,389,332 from credit institutions 16. Increase/(Decrease) in deposits from customers 4,649,963,364,456 (3,747,932,699,745) (including State Treasury) 17. (Decrease) in grants, trusted funds and borrowings (300,000,000,000) (643,592,000,000) at risk of credit institutions 18. (Decrease)/Increase in derivatives and other (4,933,280,000) 4,933,280,000 financial liabilities 19. (Decrease) in other operating liabilities (34,389,498,551) (5,244,642,958) 20. Cash outflows from funds of credit institutions (27,448,445,989) (21,224,483,879) I. Net cash (from) operating activities (11,396,015,959,207) (417,333,278,535)
58 Audited Financial Statements 2012
NO. ITEMS 2012 2011 CASH FLOWS FROM INVESTING ACTIVITIES 01. Acquisition of fixed assets (36,478,391,645) (76,411,545,165) 02. Investments in other entities (12,833,333,333) (145,239,659,698) 03. Cash recovered from investments in other entities - 400,000,000 04. Dividends received from long-term investments 48,582,382,980 22,991,435,769 and capital contribution II. Net cash from/(used in) investing activities 82,545,207,597 (198,259,769,094) CASH FLOWS FROM FINANCING ACTIVITIES 01. Proceeds from receiving capital from shareholders - 500,000,000,000 and/or issuing stocks 02. Dividends and profit paid to shareholders (200,000,000,000) (385,000,000,000) III. Net cash from financing activities (200,000,000,000) 115,000,000,000 IV. Net (decrease) in cash (11,513,470,751,610) (500,593,047,629) V. Cash and cash equivalents at the beginning 17,536,638,187,410 18,037,231,235,039 of the year VI. Cash and cash equivalents at the end of the year 6,023,167,435,800 17,536,638,187,410
Details of cash and cash equivalents
ITEMS 2012 2011 VND VND Cash and cash equivalents on hand (*) 183,872,462,000 291,556,406,039 Deposits at the State Bank of Vietnam (*) 3,573,424,096,537 586,334,746,836 Deposits at other credit institutions (**) 1,640,203,538,513 16,658,747,034,535 Securities issued by other credit institutions (***) 6 25,667,338,750 -
6,023,167,435,800 17,536,638,187,410
(*) Cash on hand and deposits at the State Bank of Vietnam are presented in Note 5 and Note 6 of the Notes to the financial statements. (**) Deposits at other credit institutions are demand deposits and term deposits with maturity less than 3 months. (***) Securities issued by credit institutions are certificates of deposits with recovery period or maturity of 3 months at the maximum from the purchasing date.
Nguyen Minh Thu Nguyen Thi Nga Le Thi Thanh Hien General Director Chief Accountant Preparer
18 march 2013
59 NOTES TO THE FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Ocean Commercial Joint Stock Bank (“the Bank”) Vietnam); is a commercial joint stock bank established in - To provide fast payment services for customers; Social Republic of Vietnam under Decision No. 257/QD/NH5 dated 30 December 1993 by the - To entrust funds and to be entrusted for lending State Bank of Vietnam with the operation period purposes;
of 50 years. According to Business Registration - Other services under approval of the State Bank; Certificate No.0800006089 dated 30 May 2011 - To act as foreign exchange agency servicing issued by Hai Duong Department of Planning other credit institutions; and Investment, the total chartered capital of the Bank is VND 4,000 billion. - To trade on gold under laws and regulations;
The Bank’s Head Office is located at 199 Nguyen - To provide foreign exchange services (to Luong Bang, Hai Duong Province, Vietnam. provide international payment services, to perform foreign currency purchases and sales in Principal activities include: international markets). - Treasuries and mobilise funds for lending The number of employees of the Bank as at 31 purposes; December 2012 was 2,169 (31 December 2011: - To trade gold, silver and precious stones, foreign 1,848). currencies (when approved by the State Bank of
2. ACCOUNTING CONVENTION AND ACCOUNTING PERIOD
Accounting convention credit institutions in Vietnam and other prevailing relevant regulations inVietnam. The accompanying financial statements, expressed in Vietnam Dong (VND), are prepared Accounting period under the historical cost convention and in The Bank’s financial year begins on 1 January accordance with Vietnamese Accounting and ends on 31 December. Standards, Accounting System applicable for
3. APPLICATION OF NEW ACCOUNTING POLICY GUIDANCE
On 21 January 2013, the State Bank of Vietnam This Circular replaces Directive 05/2005/CT-NHNN (SBV) issued Circular 02/2013/TT-NHNN stipulating dated 26 April 2005 issued by the Governor of the on asset classification, rate, provisioning SBV on the implementation of debts classification approach for risk prevention and the use of and setting up risk provisions in accordance with reserves for risk management in the operation Decision No.493/2005/QD-NHNN dated 22 April of credit institutions and foreign bank branches. 2005 of the Governor of the SBV, Decision 780/
60 Audited Financial Statements 2012
QD-NHNN dated 23 April 2012 of the Governor of classification of debt, establishment and use the SBV on the classification of the rescheduling of reserves to deal with credit risks in banking and extending debts, Decision No. 493/2005/ operations by credit institutions, issued with QD-NHNN by the SBV dated 22 April 2005, on the Decision No. 493/2005/QD-NHNN dated 22 April issuance of regulation on the debts classification, 2005. Circular 02/2013/TT-NHNN will take effect provisioning and use of provisions against credit from 1 June 2013. Board of Directors of the Bank is risks in the banking activity of credit institutions, currently assessing the impact of the application Decision No.18/2007/QD-NHNN dated 25 April of this Circular to the financial statements of the 2007 on amendment of and supplementation Bank in the future. to a number of articles of the regulations on the
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies, which have Financial assets of the Bank comprise of cash on been adopted by the Bank in the preparation of hand, cash in banks, deposits and loans at other these financial statements, are as follows: credit institutions, loans to customers, trading securities, investment securities, receivables, accrued interest and fee receivables, financial Estimates derivative instruments and other assets.
The preparation of financial statements in Financial liabilities conformity with Vietnamese Accounting At the day of initial recognition, financial Standards, Accounting System applicable liabilities are recorded at their historical costs for credit institutions in Vietnam, prevailing less transaction fees which directly relate to the regulations by the State Bank of Vietnam issuance of the liabilities. requires management to make estimates and assumptions that affect the reported amounts Financial liabilities of the Bank comprise of of assets, liabilities and disclosures of contingent discounts of valuable papers with the State assets and liabilities at the date of the financial Bank, deposits and borrowings from other credit statements and the reported amounts of institutions, entrusted funds, risk-bearing loans revenues and expenses during the fiscal year. from other credit institutions, financial derivative Although these accounting estimates are based instruments, accrued interest and fee payables on the management’s best knowledge, actual and other payables. results may differ from those estimates.
Initial recognition
Financial assets
At the day of initial recognition, financial assets are recorded at their historical costs plus transaction fees which directly relate to the purchases of the assets.
61 Re-measurement after initial Bank collected direct quotations from three recognition securities companies with their chartered capital of more than VND 300 billion each at the end of Currently, there is no regulation on re- the accounting period to determine the value of measurement of financial instruments after initial the investments. When market price increases, recognition. profit will be offset against, but not exceeding the provision made previously. The difference is not Cash and cash equivalents recorded as income until the securities are sold.
Cash and cash equivalents comprise of cash on hand, demand deposits and short-term, highly Long-term investments liquid investments that are readily convertible to Long-term investments include equity securities known amounts of cash and which are subject to and investments in projects with the holding, an insignificant risk of changes in value. recovery or payment period of more than 1 year. Long-term investments are stated at cost. Provision Investments for diminution in value of these investments is established in accordance with Circular No. Trading securities and investment 228/2009/TTBTC dated 7 December 2009 issued securities by the Ministry of Finance when the Bank is able Trading securities and investment securities to evaluate the possible losses of the investments. include equity securities held not for enterprise- Accordingly, for investments that have impairment controlling purpose and debt securities issued indicators, the Bank collects financial information by the Government, other credit institutions and of the investments to the issuance date of these economic entities. Securities held by the Bank for financial statements and computes the net value the purpose of earning profit and for a period of of assets of the investments in proportion to the 1 year or less are classified as trading securities; capital contribution made by the Bank made to held-to-maturity securities are those the Bank such investments, as well as estimates and assesses has intention and ability to hold to maturity. potential losses to the end of the financial year to Other securities are classified as available-for-sale determine the provision for diminution in value of securities. such investments. In such cases that no financial information about such investments is available Trading securities and investment securities are to the date of the financial statements, the Bank classified according to Official Letter No. 2601/ uses latest information that can be collected NHNNTCKT dated 14 April 2009 issued by the State for provision making at the date of the financial Bank of Vietnam and are stated at cost. Provision statements. for diminution in value of these securities is made according to the above-mentioned Official
Letter and Circular No. 228/2009/TT-BTC dated 7 Recognition December 2009 issued by the Ministry of Finance. The Bank recorded investment securities and Accordingly, for listed equity securities, the Bank other investments at the date when contracts are determined the value of the investments using signed and effective (transaction-date based closing prices at the date of preparing financial policy). statements; for unlisted equity securities, the
62 Audited Financial Statements 2012
Measurement to the Bank. Deferred payment on entrusted investments is stated as other receivables on the Investment securities are recorded at cost. After Bank’s balance sheet. that, investment securities are recorded at the lower of carrying amount or market value. Premiums or discounts occurred from the trading Loans of investment securities are amortised into the Loans are stated at their outstanding principal income statement under the straight-line method amounts less any written-offs and provisions for starting from the date of acquiring the securities doubtful debts. to the date of maturity.
Investments are recorded at cost less provisions for diminution in value. Cost is calculated by Provision for doubtful debts, weighted average method. guarantees
In accordance with Law on Credit Institutions
Derecognition No. 47/2010/QH12 effective from 01 January 2011, Decision No. 1627/2011/QD-NHNN dated 31 Investments in securities are derecognised December 2001 of the Governor of State Bank on when the rights to receive cash flows from the lending regulations of credit institutions, Decision investments are ended or when the Bank has No. 127/2005/QD-NHNN dated 03 February 2005 transferred significant risks and benefits attached amending and supplementing to a number to the ownership of the investments. of lending regulations under Decision No. 1627/2001/QDNHNN, Decision No. 493/2005/QD- NHNN (“Decision 493”) dated 22 April 2005 and Entrustment activities and Decision No.18/2007/QD-NHNN dated 25 April entrusted funds 2007 (“Decision 18”) issued by the State Bank of The Bank’s entrustment activities include full Vietnam on loan classification and appropriation, entrustment and designated entrustment. The setting up and use of reserves for handling credit value of entrustments and entrustment funds risks in Banking operations by credit institutions received are recorded as the entrustment and Decision No. 780/QD-NHNN dated 23 April contracts have been signed and entrustment 2012 on classification of the rescheduling and funds have been realized. Rights and obligations extending debts (“Decision 780”), credit institution of the trustor and trustee relating to profit and is required to classify loans and make provisions profit sharing, entrustment fee, other rights and for credit losses. Accordingly, loans are graded obligations are in compliance with the terms of using the following risk classifications: Current, the contracts. Special-mentioned, Sub-standard, Doubtful and Loss based on the overdue status and other qualitative factors. Deferred payment on entrustment activities
This content reflects deferred payment amount in entrustment contracts. Accordingly, deferred payment is allowed when customers purchase stocks, in exchange, stocks must be entrusted
63 Credit risk of loans to customers is calculated by Provision for off-balance-sheet subtracting from the loan balance the related commitments determined value of collateral which is subject to Pursuant to Decision 493 and Decision 18 issued certain accepted discount rates in accordance by the SBV, credit institutions classify guarantees, with Decision 493 and Decision 18. acceptances of payment and unconditional, Specific provision is established based on the net irrevocable loan commitments with specific loan and advance exposure for each individual effective date (collectively referred to as “off- customer using the prescribed provision rates balance-sheet commitments”) as stipulated in applicable to that loan classification as follows: Articles 6 and 7 of Decision 493. Accordingly, off-balance-sheet commitments are classified Group Status of loans Provision rates from Group 1 to Group 5 with corresponding risk
1 Current loans 0% as: Current, Special-mentioned, Sub-standard, Doubtful and Loss based on overdue status and 2 Special mentioned loans 5% other quantitative factors. 3 Sub-standard loans 20% General provision is made at 0.75% of total of 4 Doubtful loans 50% guarantees, acceptances of payment and unconditional, irrevocable loan commitments 5 Loss 100% with specific effective date that are classified from Group 1 to Group 4 at the end of the In accordance with Decision 493, loan accounting period. Specific provision for off- classification is to be made at the end of each balance-sheet commitments is calculated using quarter for the first three quarters and on 30 the same method for loans to customers as November for the last quarter of each year. prescribed above. Provision expense is charged In accordance with Decision 493, general into “Provision expense for credit losses” in the provision is made for credit losses which are yet separate income statement and provision to be identified during the loan classification and balance is recorded as “Other liabilities” on the specific provision making process as well as in separate balance sheet. case of the Bank’s potential financial difficulty due to deterioration in loan quality. Accordingly, the Bank is required to fully make and maintain Tangible fixed assets and a general provision at 0.75% of total of loans that depreciation are classified in groups 1 to 4. Tangible fixed assets are stated at cost less These provisions are recorded in the income accumulated depreciation. The cost of statement as an expense that will be used to purchased tangible fixed assets comprises its write off any credit losses incurred. According purchase price and any directly attributable to Decision 493, the Bank sets up Risk Settlement costs of bringing the assets to its working condition Committee in order to write off loans if they and location for its intended use. Expenditure are classified under Group 5 or if the borrowers incurred after the tangible fixed assets have been being legal entities have been liquidated or go put into operation such as repairs, maintenance bankrupt, or if individual borrowers pass away or and overhaul costs is charged to the income are missing. statement as incurred. In situations where it can be clearly demonstrated that the expenditure
64 Audited Financial Statements 2012
has resulted in an increase in the future economic been in use and are considered to bring future benefits expected to be obtained from the use economic benefits for the Bank. These expenses of an item of tangible fixed assets beyond its are capitalised as prepayments and are charged originally assessed standard of performance, the in the income statement, using the straight- expenditure is capitalised as an additional cost of line method over the period from 6 months tangible fixed assets. to 36 months in accordance with prevailing accounting regulations. Tangible fixed assets are depreciated using the straight-line method over the following estimated usefullives: Provision for overdue receivables
Provision for overdue receivables (Deferred Assets Estimated useful lives payment for entrusted investments, Deposits at (Years) other credit institutions, Entrusted investments, Buildings and structures 10 - 20 Bonds investments, Receivables from forward Machinery and equipment 03 - 08 selling contracts, Advances, and so on) is made according to Circular No. 228/2009/TT-BTC dated Motor, vehicles 06 -10 7 December 2009. Office equipment 03 - 05 Accordingly, provisions for overdue receivables Others 05 at year end are made based on the following provision rates applied to receivables as at the Intangible fixed assets and closing date of the accounting period after amortisation deducting the value of evaluated collaterals. which are stated at cost less accumulated Length of overdue Rate amortisation. Land use rights granted with indefinite term are not amortised; computer From 6 months to below 1 year 30% software is amortised using the straight-line From 1 year to below 2 years 50% method over the period of 08 years; other From 2 years to below 3 years 70% intangible fixed assets are amortised using the straight-line method over the period of 03 years. From 3 years and above 100%
Prepayments
Prepayments comprise of prepaid expenses for office rental and other prepaid expenses.
Office rental expense states the amount which has been prepaid to lease the office. Prepaid expense for office rental is amortised in the income statement using the straight-line method over the period of rental.
Other prepayments include repair, maintenance cost for assets, tools and equipment which have
65 Employee benefits Treasury shares
According to the Vietnam Labour Law, when When issued stocks are repurchased, the employees work for more than 12 months aggregate amount paid, including expenses (“eligible employees”) and terminate their labour that directly relate to the repurchase of stocks, contract, the employer must pay severance after deducting taxes, is deducted from owners’ allowance based on years of service and salary equity. Repurchased stocks are recorded as at the time of termination of employment of the treasury stocks and are stated as a deduction employee. Provision for severance allowance from owners’ equity. shall be made on the basis of 3% of the salary of Reserves the Bank’s social insurance premiums in the year. Reserves are used for specific purposes and are According to the Law on Social Insurance, since made up from after-tax profit of the Bank based 01 January 2009, the Bank and the employees on the following regulated ratios: are required to contribute to the unemployment - Chartered capital supplement fund: 5% of after- insurance fund managed by the Vietnam tax profit, not exceeding chartered capital of the Social Insurance. The contribution to be paid Bank. by each party is calculated at 1% of the lower of the employee’s basic salary or 20 times the - Financial reserve fund: 10% of after-tax profit, minimum wage prescribed by the Government not exceeding 25% of chartered capital of the from time to time. Applied the unemployment Bank. insurance regime, the Bank is not required to - Investment and development fund, bonus and make provision for allowance for the employees welfare fund and other funds: are appropriated work after 01 January 2009. However, allowance in accordance with decision of the General must be paid to the eligible employees will be Shareholders’ Meeting of the Bank. Appropriation determined based on the number of years of ratios of these funds are determined by the service of employees as of 31 December 2008 General Shareholders’ Meeting of the Bank, in and their average salary in the past six months compliance with laws and regulations. before the time of termination. These reserve funds are appropriated at the closing date of the accounting period. Capital and reserves The remaining profit after deducting the above Common stocks funds and paying dividends is recognised as retained earnings of the Bank. Common stocks are classified as owner’s capital. Incurred expenses that directly relate to the issuance of common stocks are recognised as a Foreign currencies deduction from owner’s capital. Transactions arising in currencies other than VND Share premium are translated into VND at the exchange rates When capital is received from shareholders, the ruling at the transaction date. Foreign exchange difference between selling price and par value differences arising from these transactions are is recorded as share premium in owners’ equity. recognised in the income statement.
Monetary assets and liabilities denominated in
66 Audited Financial Statements 2012
currencies other than VND are retranslated into (a) The amount of revenue can be measured VND at the rates of exchange prevailing on reliably; the balance sheet date. Exchange differences (b) It is probable that the economic benefits arising from the translation of these accounts are associated with the transaction will flow to the recorded in the “Foreign exchange reserve” in Bank; Shareholders’ equity on the balance sheet. At year end, the difference is posted to the income (c) The percentage of completion of the statement. transaction at the balance sheet date can be measured reliably;
and Revenue (d) The costs incurred for the transaction and Interest income the costs to complete the transaction can be Income from interest is recorded on accrual basis measuredreliably. for the loans which are identified as being able Dividends recognition to claim both principals and interests on time and the Bank shall not appropriate provisions Cash dividends received from investment according to prevailing regulations. The interest activities are recorded into the income statement amounts which have been recorded as income, when the receiving rights of the Bank are in the event that the customer could not pay confirmed. For stock dividends, stocks that are on the maturity date, would be charged into distributed from profits of joint-stock companies operating expenses and credit institutions shall shall not be recognised in the financial statements track off-balance sheet to urge the collection according to Circular No.244/2009/TT-BTC dated of those loans. When collected, interests are 31 December 2009. recorded as income from operating activities.
Interest receivables from overdue loans arose Borrowing costs during year shall not be recognised as income. Borrowing costs are recognised as expenses in Credit institutions shall track off-balance sheet to the period as incurred and are recorded in the urge the collection, when collected, interests are income statement on accrual basis. recorded as income from operating activities.
Income from services Operating lease Revenue of a transaction involving the rendering of services is recognised when the outcome of Leases where substantially all the rewards and such transactions can be measured reliably. risks of ownership of assets remain with the leasing Where a transaction involving the rendering of company are accounted for as operating leases. services is attributable to several periods, revenue Rental charges applicable to such operating is recognised in each period by reference to the leases are charged to income statement as percentage of completion of the transaction incurred over the lease term.. at the balance sheet date of that period. The outcome of a transaction can be measured reliably when all four (4) following conditions are satisfied:
67 Taxation there is a legally enforceable right to set off current tax assets against current tax liabilities Income tax expense represents the sum of the tax and when they relate to income taxes levied by currently payable and deferred tax. the same tax authority and the Bank intends to The tax currently payable is based on taxable settle its current tax assets and liabilities on a net profit for the year. Taxable profit differs from basis. net profit as reported in the income statement The determination of the tax currently payable because it excludes items of income or expense is based on the current interpretation of tax that are taxable or deductible in other years regulations. (including loss carried forward, if any) and it further excludes items that are never taxable or However, these regulations are subject to periodic deductible. variation and their ultimate determination depends on the results of the tax authorities’ Deferred tax is recognised on significant examinations. differences between carrying amounts of assets and liabilities in the financial statements Other taxes are paid in accordance with the and the corresponding tax bases used in the prevailing tax laws in Vietnam. computation of taxable profit and is accounted for using balance sheet liability method. Deferred Off-balance sheet commitments tax liabilities are generally recognised for all and guarantees temporary differences and deferred tax assets are recognised to the extent that it is probable At any time during the course of business, the that taxable profit will be available against Bank always has outstanding commitments. which deductible temporary differences can be These commitments are in the form of approved utilised. loans and overdraft facilities. The Bank also provides financial guarantee services to Deferred tax is calculated at the tax rates that guarantee the contract performance of are expected to apply in the period when the customers to third parties. These transactions liability is settled or the asset realised. Deferred are recorded in the financial statements when tax is charged or credited to profit or loss, except performed or when related expenses are when it relates to items charged or credited incurred or received. directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when
68 Audited Financial Statements 2012
5. CASH ON HAND
31/12/2012 31/12/2011
VND VND
Cash in VND 160,863,249,700 251,938,842,399
Cash in foreign currencies 23,009,212,300 39,617,563,640
183,872,462,000 291,556,406,039
6. DEPOSIT AT THE STATE BANK OF VIETNAM
31/12/2012 31/12/2011
VND VND
Current account at the State Bank of Vietnam in VND 2,966,776,058,411 276,705,072,955
Current account at the State Bank of Vietnam 606,648,038,126 309,629,673,881 in foreign currencies
3,573,424,096,537 586,334,746,836
Deposit at the State Bank of Vietnam consists of Compulsory reserve balances for deposits in compulsory reserves for deposits and current foreign currencies applicable to credit institutions accounts. Pursuant to regulations by the State as at 31 December 2012 are as follows: Bank of Vietnam on compulsory reserve, part of - Compulsory reserve balance is 8% (31 the banks’ compulsory reserve can be floating December 2011: 8%) of the preceding month’s balance. In details, according to Decision No. 379/ average balance for demand deposits and QD-NHNN dated 24 February 2011, Decision No. time deposits with terms of less than 12 months in 1209/QD-NHNN dated 1 June 2011 and Decision foreign currencies; No. 1972/QDNHNN dated 31 August 2011: - Compulsory reserve balance is 6% (31 December Compulsory reserve balances for VND deposits 2011: 6%) of the preceding month’s average applicable to credit institutions as at 31 December balance for deposits in foreign currencies with 2012 are as follows: terms of more than 12 months. - Compulsory reserve balance is 3% (31 - Compulsory reserve balance is 1% of the December 2011: 3%) of the preceding month’s balance for deposits in foreign currencies from average balance for demand deposits and term overseas credit institutions. deposits with terms of less than 12 months in VND;
- Compulsory reserve balance is 1% (31 December 2011: 1%) of the preceding month’s average balance for deposits in VND with terms of more than 12 months.
69 7. BALANCES DUE AND LOANS TO OTHER CREDIT INSTITUTIONS
31/12/2012 31/12/2011
VND VND
Deposits at credit institutions
Demand deposits 560,113,010,513 258,345,829,092
- In VND 86,290,741,494 56,841,988,176
- In foreign currencies 473,822,269,019 201,503,840,916
Term deposits 13,332,624,278,000 23,958,740,396,639
- In VND 11,165,970,750,000 21,649,889,858,336
- In foreign currencies 2,166,653,528,000 2,308,850,538,303
Total 13,892,737,288,513 24,217,086,225,731
Loans to credit institutions
Loans in VND 1,448,337,500,000 -
Provisions for loan losses (10,862,531,250) -
1,437,474,968,750 -
15,330,212,257,263 24,217,086,225,731
Interest rates applicable to term deposits at credit institutions are 8.5% - 15% per annum for VND and 2% - 8% per annum for USD.
8. LOANS
31/12/2012 31/12/2011
VND VND
Loans to domestic economic organisations 26,226,753,989,605 19,180,315,998,663 and individuals
Discounted commercial bills and other 13,306,659,938 6,749,607,508 valuable papers
26,240,060,649,543 19,187,065,606,171
70 Audited Financial Statements 2012
Loan quality:
31/12/2012 31/12/2011
VND VND
Current loans 24,027,557,133,087 17,640,660,039,990
Special-mentioned loans 1,288,742,644,445 1,146,945,632,952
Sub-standard loans 64,643,659,092 153,768,640,248
Doubtful loans 164,893,869,473 43,905,964,832
Loss 694,223,343,446 201,785,328,149
26,240,060,649,543 19,187,065,606,171
Loan balances by terms:
31/12/2012 31/12/2011
VND VND
Short-term loans 12,085,805,956,475 8,282,516,943,698
Medium-term loans 6,570,937,727,568 4,686,795,098,068
Long-term loans 7,583,316,965,500 6,217,753,564,405
26,240,060,649,543 19,187,065,606,171
Short-term, medium-term and long-term loans have initial terms of less than 1 year, from 1 year to 5 years and more than 5 years, respectively.
Loan balances by customers:
31/12/2012 31/12/2011
VND VND
Loans to economic enterprises
- State-owned enterprises 2,936,799,998,904 2,381,865,371,588
- Other domestic enterprises 20,569,172,149,269 14,597,746,656,446
- Foreign-invested enterprises 251,804,988,834 175,686,724,854
Loans to individuals and business households 2,482,283,512,536 2,031,766,853,283
26,240,060,649,543 19,187,065,606,171
71 Loan balances by sections:
31/12/2012 31/12/2011
VND VND
Processing and manufacturing industry 5,523,081,442,209 4,735,656,273,646
Construction 4,450,436,845,829 3,542,488,656,974
Logistics 2,361,453,960,231 1,961,737,046,728
Hospitality and beverage 1,158,296,422,016 1,565,175,961,330
Retail and wholesale of cars, motors and other 1,647,245,028,254 1,281,799,949,031 engined vehicles
Agriculture, forestry and fishery 339,982,106,995 1,077,887,798,856
Mining 703,316,785,893 1,019,734,385,356
Administrative activities and support services 441,737,183,566 832,116,732,501
Manufacturing and distribution of electricity, 920,606,252,853 600,732,335,153 gas, steam and air conditioners...
Other services and activities 986,429,793,287 493,020,627,939
Finance, banking and insurance activities 1,440,126,019,010 405,874,757,500
Activities of international organisations and bodies 1,041,659,764,490 341,656,566,345
Medical and social activities 120,775,451,980 111,396,664,031
Education and training 59,826,993,572 73,859,965,427
Science and technology activities 70,629,140,607 36,394,797,901
Employment in households business,self-consuming 749,934,000 25,498,147,805 products and services manufacturing activities
Arts and entertainments 958,889,253,515 10,767,110,913
Real estate 3,180,837,498,198 1,068,696,634,287
Others 833,980,773,039 2,571,194,448
26,240,060,649,543 19,187,065,606,171
72 Audited Financial Statements 2012
Loan balances by currency:
31/12/2012 31/12/2011
VND VND
Loans in VND 22,631,299,201,955 15,450,425,107,960
Loans in foreign currencies 3,608,761,447,588 3,736,640,498,211
26,240,060,649,543 19,187,065,606,171
Interests applied as at 31 December 2012 are from 3.5% to 26% per annum for loans denominated in VND and from 3.6% to 8.0% per annum for loans denominated in USD.
9. PROVISIONS FOR CREDIT LOSSES AND OFF-BALANCE SHEET COMMITMENTS
9.1 Details of provision for credit losses and off-balance sheet commitments:
31/12/2012 31/12/2011
VND VND
Provision for loans to other credit institutions 10,862,531,250 -
Provision for loans to customers 675,081,194,525 231,396,591,138
Provision for off-balance sheet commitments 26,758,654,825 20,885,130,932 (See Note 21)
712,702,380,600 252,281,722,070
9.2 Movement in provision for credit losses and off-balance sheet commitments:
General provisions Specific provisions Total
VND VND VND
As at 01/01/2012 163,274,733,023 89,006,989,047 252,281,722,070
Addition 56,596,354,758 411,256,564,600 467,852,919,358
Utilised for the year - (7,432,260,828) (7,432,260,828)
As at 31/12/2012 219,871,087,781 492,831,292,819 712,702,380,600
73 10. TRADING SECURITIES
31/12/2012 31/12/2011
VND VND
Equity Securities
Equity securities issued by other domestic credit institutions - 62,559,265,586
Equity securities issued by domestic economic entities 52,142,851,259 178,044,039,557
Provision for diminution in value of trading securities (20,076,611,983) (102,938,561,421)
32,066,239,276 137,664,743,722
11. INVESTMENT SECURITIES Available-for-sale investment securities:
31/12/2012 31/12/2011
VND VND
Debt securities 13,227,648,273,931 9,729,286,932,359
- Debt securities issued by Government 6,909,930,603,326 2,711,943,039,036
- Debt securities issued by other domestic credit institutions 1,493,314,009,406 2,715,018,322,269
- Debt securities issued by domestic economic entities 4,824,403,661,199 4,302,325,571,054
Equity securities 539,316,924,000 481,351,696,000
- Equity securities issued by other domestic credit institutions 21,351,990,000 21,351,990,000
- Equity securities issued by domestic economic entities 517,964,934,000 459,999,706,000
13,766,965,197,931 10,210,638,628,359
Provisions for diminution in value of available-forsale (168,655,850,000) (159,061,759,820) investment securities
13,598,309,347,931 10,051,576,868,539
Held-to-maturity investment securities:
31/12/2012 31/12/2011
VND VND
Debt securities - bonds issued by other domestic credit institutions - -
Debt securities - bonds issued by domestic 892,939,510,957 939,162,906,203 economic entities (*)
Provisions for diminution in value of held-tomaturity (2,175,000,000) - investment securities
890,764,510,957 939,162,906,203
(*) The balance of held-to-maturity investment securities as at 31 December 2011 included bonds of VND 500,000,000,000 issued by an economic entity. This investment is reclassified from “Debt securities - bonds issued by other domestic credit institutions” to “Debt securities - bonds issued by domestic economic entities”.
74 Audited Financial Statements 2012
12. PROVISION FOR DIMINUTION IN VALUE OF SECURITIES
12.1 Balances of provision for diminution in value of securities:
31/12/2012 31/12/2011
VND VND
Provision for diminution in value of trading securities 20,076,611,983 102,938,561,421 (See Note 10)
Provision for diminution in value of available-forsale 168,655,850,000 159,061,759,820 securities (See Note 11)
Provision for diminution in value of held-tomaturity 2,175,000,000 - securities (See Note 11)
190,907,461,983 262,000,321,241
12.2 Movement in provision for diminution in value of securities:
Provision for Provision for trading securities investment securities Total
VND VND VND
As at 01/01/2012 102,938,561,421 159,061,759,820 262,000,321,241
Provision appropriated in the year - 56,659,490,180 56,659,490,180 (See Note 27)
Utilised for the year (51,035,198,516) (44,890,400,000) (95,925,598,516)
Provision reversed (31,826,750,922) - (31,826,750,922) (See Note 27)
As at 31/12/2012 20,076,611,983 170,830,850,000 190,907,461,983
13. LONG-TERM INVESTMENTS AND CAPITAL CONTRIBUTION
31/12/2012 31/12/2011
VND VND
Investments in joint-ventures 68,756,767,146 68,756,767,146
Other long-term investments 520,973,301,042 508,139,967,709
589,730,068,188 576,896,734,855
Provision for diminution in value of investments (21,466,998,651) -
568,263,069,537 576,896,734,855
75 14. TANGIBLE FIXED ASSETS - Total VND (21,560,260) 493,860,946 Others VND - 35,956,492,411 (6,763,285,877) - - (8,321,600,102) - Office VND equipment 12,806,805,526 18,023,128,466 18,235,099 50,471,711,141 10,279,349,320 23,672,884 34,664,529,649 (3,249,428,312) (4,036,718,446) (12,117,185)
VND 69,286 (2,902,331) (933,947) Motors, vehicle 11,364,221,080 18,281,120 29,249,789 (49,533,000) 19,417,490,769 13,395,669,606 (493,964,325) (670,064,295) 86,846,274,614 60,810,487,094 72,793,922 208,365,929,841 32,319,265,336 25,050,147,143 40,974,036 78,351,394,653 54,527,009,278 35,760,339,951 31,819,886 130,014,535,188
VND equipment 8,841,518,453 21,803,000 (3,230,762,300) 9,132,238,083 8,551,651,963 (2,861,936,377) 2,007,641 45,471,093,087 14,823,961,310 30,647,131,777 (46,313,349) 552,291,480 Machinery and VND - structures Building and (384,055,061) (19,800,909) (19,800,909) 9,048,234,296 8,744,571,018 30,752,609,200 56,164,054,460 34,000,138,944 104,091,823 129,765,465,445 6,117,046,828 15,165,281,124 12,625,189,742 39,884,847,283 75,581,545,229 52,023,267,410 122,326,922 180,23 7,176,586 2,943,947,352 3,880,618,724 2,414,185,876 (157,956,863)
Cost As at 01/01/2012 Additions Reclassification Disposals Others As at 31/12/2012 Accumulated depreciation As at 01/01/2012 Increase Disposals Others As at 31/12/2012 Net book value As at 31/12/2012 As at 31/12/2011
76 Audited Financial Statements 2012
15. INTANGIBLE FIXED ASSETS Land-use rights Software Others Total VND VND VND VND Cost As at 01/01/2012 77,405,900,000 38,694,002,916 1,648,447,000 117,748,349,916 Additions - 10,945,797,443 169,406,667 11,115,204,110 Disposals - (2,751,565,720) - (2,751,565,720) Others - (14,000,000) - (14,000,000) As at 31/12/2012 77,405,900,000 46,874,234,639 1,817,853,667 126,097,988,306 Accumulated amortisation As at 01/01/2012 - 14,509,418,186 787,785,348 15,297,203,534 Increase - 11,411,454,891 560,119,422 11,971,574,313 Disposals - (2,751,565,720) - (2,751,565,720) Others - (14,000,000) - (14,000,000) As at 31/12/2012 - 23,155,307,357 1,347,904,770 24,503,212,127 Net book value As at 31/12/2012 77,405,900,000 23,718,927,282 469,948,897 101,594,776,179 As at 31/12/2011 77,405,900,000 24,184,584,730 860,661,652 102,451,146,382
16. RECEIVABLES
31/12/2012 31/12/2011 VND VND Construction in progress (16.1) 783,993,683,320 852,268,232,915 External receivables (16.2) 768,527,693,220 2,850,290,611,785 Internal receivables (16.3)ä 361,917,271,471 151,732,156,733 1,914,438,648,011 3,854,291,001,433
17. OTHER ASSETS 31/12/2012 31/12/2011 VND VND Tools and spares in use 3,181,225,502 2,587,561,692 Materials 4,021,309,901 5,023,311,267 Entrusted investment and loans in VND (i) 151,501,000,000 836,701,459,728 Prepaid expenses (ii) 71,742,486,206 49,203,791,631 230,446,021,609 893,516,124,318
(i) At 31 December, 2012, the Bank entrusted an amount of VND 139,001,000,000 for a capital management company for the Bank for a specific period of time. Based on the reported value of the portfolio, the Bank recorded the increase/decrease of the portfolio to profit/loss of the year.
(ii) This amount mainly comprises prepayment for office rental at the Bank’s head office and branches.
77 18. PROVISIONS FOR DIMINUTION IN VALUE OF OTHER ASSETS
Provision/ (Reversal) Settled by during the Provisions for 31/12/2012 31/12/2011 provision year (i) VND VND VND VND
Other receivables
Provisions for receivables relate to 11,925,128,549 16,290,371,585 16,115,590,719 11,750,347,683 deferred payment in entrusted investments
Provisions for receivables relate to - 21,900,765,780 451,306,519 (21,449,459,261) forward sales of equity securities
Other receivables 34,261,937,846 24,941,150,107 - 9,320,787,739
46,187,066,395 63,132,287,472 16,566,897,238 (378,323,839)
(i) Provision reversal for diminution in value of other assets are recognised in “Income from other activities” (See Note 28). Provision expense for diminution in value of other assets are recognised in “Operating expense” (See note 30).
19. DEPOSITS AND BORROWINGS FROM OTHER CREDIT INSTITUTIONS
31/12/2012 31/12/2011
VND VND
Demand deposits from other credit institutions
- In VND 31,289,939,100 67,384,989,973
- In foreign currencies 244,300,853,954 644,277,315
275,590,793,054 68,029,267,288
Term deposits from other credit institutions
- In VND 7,796,045,786,681 16,098,433,749,730
- In gold, foreign currencies 1,666,240,000,000 1,353,820,000,000
9,462,285,786,681 17,452,253,749,730
Term deposits from other credit institutions
- In VND 2,874,300,000,000 -
- In gold, foreign currencies 624,840,000,000 -
3,499,140,000,000 -
13,237,016,579,735 17,520,283,017,018
Interests payable for term deposits and borrowings from other credit institutions are 3% - 13.5% per annum for VND and 1.8% - 4% per annum for USD.
78 Audited Financial Statements 2012
20. DEPOSITS FROM CUSTOMERS
31/12/2012 31/12/2011 VND VND Demand deposits 11,037,170,421,436 6,488,167,959,891 - In VND 8,205,920,839,371 4,474,812,790,693 - In gold and foreign currencies 2,831,249,582,065 2,013,355,169,198 Term deposits 31,904,595,855,017 31,892,680,695,612 - In VND 29,237,174,714,690 28,171,292,819,640 - In foreign currencies 2,667,421,140,327 3,721,387,875,972 Deposits for specific purposes 248,867,361,779 44,221,688,988 Margin deposits 49,222,351,602 164,822,280,887 - In VND 25,280,466,995 38,688,496,780 - In foreign currencies 23,941,884,607 126,133,784,107 43,239,855,989,834 38,589,892,625,378
Interest rates applicable to term deposits for enterprises denominated in VND are 8%-13.5% per annum, in USD are 0.4%-0.5% per annum and for individuals are 7.4% - 16% in VND and 1.95%-8.4% in USD per annum. 21. OTHER LIABILITIES 31/12/2012 31/12/2011 VND VND Accrued interest, fees payable 488,172,257,404 478,353,042,119 Internal payables (21.1) 19,176,626,042 16,488,675,903 External payables (21.2) 44,692,505,640 84,898,922,916 Unearned revenue 327,953,005 12,042,004,671 Provisions for unused commitments 26,758,654,825 20,885,130,932 579,127,996,916 612,667,776,541
21.1 Details of internal payables 31/12/2012 31/12/2011 VND VND Payables to employees 19,175,076,042 16,485,675,903 Others 1,550,000 3,000,000 19,176,626,042 16,488,675,903
21.2 Details of external payables 31/12/2012 31/12/2011 VND VND Corporate income tax - 14,845,413,934 Value added tax 128,309,859 2,222,196 Pending for remittance 53,653,000 20,899,250,775 Visa, Banknet, Western Union payables 6,970,145,150 11,592,930,888 Deposits for sales of securities 17,500,000,000 17,500,000,000 Others 20,040,397,631 20,059,105,123 44,692,505,640 84,898,922,916 79 Total - - VND (2,393,681) Other equity - (410,000,000,000) - - 500,000,000,000 487,931,115,362 - (27,448,445,989) - - - owners’
- earnings Retained VND - -
fund - (410,000,000,000) - (410,000,000,000) - 243,214,308,879 - 243,214,308,879 - welfare Bonus and VND - 487,931,115,362 - - (375,000,000,000) - (375,000,000,000)
VND - - - - ( 21,224,483,880) - - (21,224,483,880) - - - 21,224,483,880) ( - (33,000,000,000) - 33,000,000,000 - (27,448,445,989) - - supplement owner’s equity Reserve fund for
Financial - - - VND - - - - - reserve fund
------(112,931,115,362) 42,181,103,635 24,396,555,768 - 46,353,455,959 - - (2,393,681) and deve- Investment lopment fund
Share premium VND ------
------capital Chartered VND - -
As at 01/01/2011 3,500,000,000,000 2,916,370,000 14,896,758 85,588,265,776 45,024,495,213 8,213,391,903 445,547,399,363 39,146,400 4,087,343,965,413 Capital increase 500,000,000,000 Profit in the year Dividend Fund allocation Fund deduction As at 31/12/2011 4,000,000,000,000 2,916,370,000 14,896,758 85,588,265,776 45,024,495,213 19,9 88,908,023 490,478,514,725 39,146,400 4,644,050,596,895 Profit in the year Dividends payment (i) Fund allocation (i) Fund deduction Other deduction As at 31/12/2012 4,000,000,000,000 2,916,370,000 14,896,758 131,939,328,054 69,421,050,981 34,721,565,669 245,761,708,241 39,146,400 4,484,814,066,103 22. EQUITY AND MOVEMENTS IN SHAREHOLDERS’ Movement of main items Shareholders’ equity: (i) Dividends payment (VND 200,000,000,000) and funds allocation in the year were made according to General Shareholders’ Meeti ng Resolution 2012 No. 01/2012/NQ-DHDCD dated 19 May 2012. In 2011, the Bank advanced dividends for results of 2011 with total amount VND 1 75 billion according to Announcement No. 135A/2011/TB- OceanBank dated 20 April 2011 and recognised the amount as other receivables on balance s heet (See Note 16.2). After the official decision on dividends payment of 2011 had been finalised, Bank deducted this amount from retained earnings.
80 Audited Financial Statements 2012
Shares
31/12/2012 31/12/2011
VND VND
Number of stocks issued to public 400,000,000 400,000,000
+ Common stocks 400,000,000 400,000,000
+ Preferred stocks - -
- Number of treasury stocks - -
+ Common stocks - -
+ Preferred stocks - -
- Number of outstanding stocks 400,000,000 400,000,000
+ Common stocks 400,000,000 400,000,000
+ Preferred stocks - -
Common shares have par value of 10,000 VND per share.
23. INTEREST AND SIMILAR INCOME
2012 2011
VND VND
Interest from deposits 1,621,439,041,395 1,830,231,447,415
Interest from loans to customers 3,198,891,540,326 2,783,730,379,884
Interest from debt securities 1,343,428,655,409 1,297,171,988,728
Other income from credit activities 240,514,320,560 516,935,559,614
6,404,273,557,690 6,428,069,375,641
24. INTEREST EXPENSES AND SIMILAR EXPENSES
2012 2011
VND VND
Interest expense on deposits 4,668,373,564,273 4,692,034,995,736
Interest expense on borrowings 35,014,422,484 63,156,486,734
Expense on other credit activities 80,523,042,341 78,323,379,559
4,783,911,029,098 4,833,514,862,029
81 25. NET PROFIT FROM SERVICES
2012 2011
VND VND
Income from services 43,401,907,143 46,048,215,063
Income from payment services 17,780,878,589 21,421,338,783
Income from guarantee services 17,220,434,529 15,085,555,316
Income from entrustment and agency services 2,991,508,876 5,853,664,733
Income from consulting services - 157,278,254
Others 5,409,085,149 3,530,377,977
Expense on services 27,554,530,957 30,633,448,416
Expenses on payment services 23,585,955,158 21,672,714,477
Expense on entrustment and agency services 2,505,931,795 8,170,099,208
Expense on consulting services 1,344,491,004 790,602,731
Expense on brokerage commission 118,153,000 32,000
Net profit from services 15,847,376,186 15,414,766,647
26. NET GAIN/(LOSS) FROM FOREIGN EXCHANGE ACTIVITIES AND EXCHANGE RATE EVALUATION
2012 2011
VND VND
Gain from foreign exchange trading 58,763,984,264 61,111,057,303
- Gain from spot trading 53,056,196,648 57,945,057,303
- Unrealised foreign exchange gain 2,690,519,316 2,966,000,000
- Gain from monetary derivatives 3,017,268,300 200,000,000
Loss on foreign exchange trading 28,620,988,326 109,598,797,834
- Loss on spot trading 24,548,396,587 51,415,465,498
- Unrealised foreign exchange loss - 664,617,765
- Loss from gold trading - 492,000,000
- Loss from monetary derivatives 4,072,591,739 57,026,714,571
Net gain/(loss) from foreign exchange trading 30,142,995,938 (48,487,740,531)
82 Audited Financial Statements 2012
27. NET GAIN/(LOSS) FROM TRADING SECURITIES
Trading securities
2012 2011
VND VND
Gain from securities trading 7,958,234,331 58,189,210,237
Loss on securities trading (3,446,874,252) (904,053,040)
Reversal of provision/(Provision) for diminution in 31,826,750,922 (131,025,451,396) value of trading securities (See Note 12.2)
36,338,111,001 (73,740,294,199)
Investment securities
2012 2011
VND VND
Gain from investment securities 38,544,162,858 8,273,086
Loss on investment securities (174,448,266) (1,376)
Provisions for diminution in value of investment (56,659,490,180) (50,726,059,820) securities (See Note 12.2)
(18,289,775,588) (50,717,788,110)
28. OTHER OPERATING INCOME
2012 2011
VND VND
Gain from entrusted investment contracts 16,802,986,528 56,400,796,843
Income from provision reversal of other assets 28,660,870,061 - (See Note 18)
Income from written-off debts 10,779,043,366 10,244,587,475
Other income 14,322,868,990 11,018,843,691
70,565,768,945 77,664,228,009
83 29. OTHER OPERATING EXPENSES
2012 2011
VND VND
Deduction of accrued interest income (i) 322,325,919,707 78,220,882,051
Other expenses 8,813,267,608 13,366,402,034
331,139,187,315 91,587,284,085
(i) Deduction of accrued interest income in 2012 included VND 216,870,371,868 accrued interest income written off of deposits, debt bonds and loans to Vietnam Ship Building Industry Group (Vinashin).
30. OPERATING EXPENSES
2012 2011
VND VND
Taxes and fees 1,171,674,866 5,320,373,425
Staff cost 255,548,288,468 203,148,661,005
In which
- Salaries and allowances 216,385,870,737 179,310,629,757
- Salary-based expenses 17,083,574,910 11,771,699,996
- Other benefits 6,512,000 25,983,750
- Social activities expense - -
Expenses for fixed assets 177,119,783,966 156,438,360,433
In which:
- Depreciation and amortisation expense 46,631,186,656 32,260,638,925
Expenses for operating management 199,485,567,881 175,356,363,514
In which
- Perdiem 9,737,133,413 7,839,041,140
- Expense for union activities 400,287,441 717,339,663
Insurance premium for customers’ deposit 11,271,777,686 11,303,931,543
Provision expense for diminution in value of 21,466,998,651 - longterm investments
Provision expense for diminution in value of 28,282,546,222 63,132,287,472 other assets (See Note 18)
694,346,637,740 614,699,977,392
84 Audited Financial Statements 2012
31. CORPORATE INCOME TAX EXPENSE
2012 2011
VND VND
Profit before tax 310,210,643,641 643,393,959,302
Adjustments for:
- Dividends income (48,582,382,980) (22,841,435,769)
- Non-deductible expenses 2,812,015,007 1,298,852,225
- Adjustment according to the Tax Finalization 3,545,063,378 - Minute in 2010 and 2011
Taxable profit 267,985,339,046 621,851,375,758
Corporate income tax rate 25% 25%
Current corporate income tax expense 66,996,334,762 155,462,843,940
32. EARNINGS PER SHARE
Ñôn vò 2012 2011
Earnings for the purpose of calculating VND 243,214,308,879 487,931,115,362 basic earnings per share
Issued ordinary shares at beginning of the year Share 400,000,000 350,000,000
Issued ordinary shares during the year Share - 50,000,000
Weighted average number of ordinary shares Share 400,000,000 379,315,068 (WANOS) for the year
Earnings per share (EPS) VND 608 1,286
33. OPERATING COMMITMENTS As at the balance sheet date, the Bank had irrevocable operating lease commitments with payment schedule as follows:
31/12/2012 31/12/2011
VND VND
Within 1 year 95,004,548,780 45,189,533,338
In the second to the fifth year inclusive 164,958,948,184 107,899,199,534
After 5 years 56,858,880,825 45,437,479,827
316,822,377,788 198,526,212,699
Operating lease commitments represent office rentals of the Bank.
85 34. ASSETS, LIABILITIES AND OFF-BALANCE SHEET ITEMS DENSITY BY GEOGRAPHIC REGIONS
As at 31 December 2012, a majority of credit 392,030,834,855 (31 December 2011: VND balances, deposits, credit commitments, 48,561,822,097) and off-balance sheet items in derivatives and securities investments are letter of credit to overseas customers with the domestic except for deposits at overseas amount of VND 924,175,097,689 (31 December credit institutions with the amount of VND 2011: VND 1,505,108,092,573).
35. CURRENCY RISK
The Bank executes some transactions ALCO is responsible for adjusting the currency denominated in foreign currencies; thus the position limit in each period. In addition, the Bank is exposed to exchange rate fluctuations. ALCO also give warnings about the volatility of The Bank hedges against this risk by setting the market to timely make the optimal profit currency position limit for all foreign currencies, and minimize risk. managing currency position limit on a daily Carrying amounts of assets and liabilities basis and ensuring that the currency position is denominated in foreign currencies at the end of maintained within established limits of State Bank the period are as follows: and internal risk management purposes. The
31/12/2012 EUR USD Other currencies equivalent equivalent equivalent Total
million VND million VND million VND million VND
Assets
I- Cash, gold, precious stones - 23,009 - 23,009
II- Deposit at the State Bank of Vietnam - 606,648 - 606,648
III- Balances due and loans to other credit 64,429 3,374,027 243,420 3,681,876 institutions
IV-Loans to customers - 3,608,761 - 3,608,761
V- Other assets - 61,611 - 61,611
Total assets 64,429 7,674,056 243,420 7,981,905
Liabilities and equity
I- Deposits and borrowings from the State Bank - 2,295,751 239,630 2,535,381 of Vietnam and other credit institutions
II-Deposits from customers 65,010 5,505,264 1,538 5,571,812
III- Other liabilities 1 25,300 - 25,301
Total liabilities and equity 65,011 7,826,315 1,538 8,132,494
On-balance-sheet FX position (582) (152,259) 241,882 (150,589)
Off-balance-sheet FX position - - - -
On- and off-balance-sheet FX position (582) (152,259) 241,882 (150,589)
86 Audited Financial Statements 2012
36. INTEREST RATE RISK
- Total years Over 5 - 52,143 - 552,369 1-5 years ------3-12 months
1-3 months - -
month - - Within 1 - bearing - 7,926,015 1,562,420 6,292,383 342,507 34,976 16,158,301 2,564,740 16,043 - 43,239,856 - 27,098,666 13,560,407 552,369 Non-interest - 183,872 - 3,573,424 - 52,143 - 589,730 - - - - - 589,730 - 231,609 - - - 8,857,123 358,550 34,976 59,950,526 - 552,369 35,024,681 15,122,827 - Overdue
1,575,560 - 1,886,902 13,785,079 7,142,506 1,746,702 103,312 26,240,061 13,785,079 1,575,560 - 1,886,902 150,000 539,317 705,599 300,000 4,171,995 8,623,042 169,952 14,65 9,905 144,296 3,918,924 359.641 - 50,734 61,191 4,534,786 million VND 19,829,055 10,430,935 273,264 65,406,605 2,949,947 5,515,595 10,553,372 15,854,437 (*) Provision is excluded As at 31 December 2012, the Bank has negative difference between assets and liabilities bearing interest within 1 month. However, the Bank believes that market interest rate is stable within next year. Therefore, this negative difference is under control of the Bank.
31/12/2012 Assets I- Cash, gold and precious stones II- Deposit at the State Bank of Vietnam 1,080,091(*) institutions credit other to loans and due Balances - III- 4,027,806 1,769,358 8,463,820 - - 15,341,075 IV- Trading securities (*) V-Loans to customers (*) VI- Investment securities (*) contribution capital and investments Long-term VII- VIII- Fixed assets and investment properties IX- Other assets (*) Total assets Liabilities Bank State the from borrowings and Deposits I- credit institutions Vietnam other of II-Deposits from customers III- Other liabilities Total liabilities 2,949,947 4,963,226 (24,471,309) 731,610 10,971,932 10,072,385 238,288 5,456,079 difference interest-sensitivity sheet On-balance interest affecting commitments sheet Off-balance 2,949,947 4,963,226 (24,471,309) 731,610 10,971,932 10,072,385 238,288 5,456,079 sensitivity of Assets and Liabilities difference interest-sensitivity sheet off-balance and On- The Bank has significant interest rate risks arising from deposits and loans to credit institutions and customers, entrusted funds and entrusted and funds entrusted customers, and institutions credit to loans and deposits from arising risks rate interest significant has Bank The investment to partners, deposits and loans from other credit institutions, of the customers, interest-bearing entruste d funds specified in signed contracts. The Bank is exposed to interest rate risk when the mobilises funds with fixed and invests floating rate. This risk is controlled by the Bank through maintaining a reasonable difference between interest-sensitive assets and lia bilities.
87 37. CREDIT RISK
Credit risk is the risk that results in the Bank’s loss Credit risk policy in the past year was continued because its customers or counterparties default to be reviewed and updated on the market on their contractual obligations or fail to fulfil situation, improvements and issued a series of their committed obligations. important documents: Credit policies, Lending regulations, Underwriting regulation, the The Bank completes focused credit approval Regulation on credit approval... and a number model by establishing Credit and Financial of directives to control credit risk. In addition, the Investment Committee. The credit approval Bank also focused on risk management through for centralised model with multiple levels of the credit limit for each customer group, the approval diversion approved credit file from the group of non-manufacturing industries. branch levels, to the function block and Credit and Financial Investment Committee. Balances with partners by types have been presented in Notes related to the Bank’s assets. This model has helped the bank to control customers’ risk and maintain low bad debt ratio.
38. LIQUIDITY RISK
The purpose of managing liquidity risk is aim sufficient cash, loans reserve and capital that to ensure sufficient capital to fulfil current and shareholders commit to contribute to meet future financial obligations. Liquidity is also the requirements on short-term and long-term managed to ensure that the difference amount liquidity. of due liabilities exceeding due assets is under The Board of Directors believes that the Bank control by the capital that the Bank believes it would mobilise sufficient cash flows to satisfy could be produced in the period. The policy financial obligations as due. of the Bank is to regularly follow current and future liquidity requirements in order to ensure
88 Audited Financial Statements 2012 Over 5 - 3,573,424 - 52,143 589,730 589,730 - 231,609 - 52,143 - 231,609 From 1 to 5 - - - - Within due From 3 to 12 - 183,872 - - - - From 1 to 3 - - - Within 1 - 183,872 - 3,573,424 - - - - 7,926,015 1,562,420 6,292,383 342,507 34,976 16,158,301 - 18,298,666 22,360,407 2,564,740 16,043 43,239,856 - 26,437,296 24,005,911 9,077,050 395,233 35,036 59,950,526 - 4,027,806 1,769,358 8,463,820 - - 15,341,075 - 212,615 83,084 219,927 36,683 60 552,369 Within 3 Overdue Over 3 - - - 14,659,905 2,035,321 11,278,963 190,022 300,000 705,599 150,000 ------943,798 631,762 1,819,216 2,929,552 8,725,077 8,577,692 2,612,964 26,240,0 61 86,552 57,744 567,365 302,818 2,092,082 639,436 788,789 4,534,786 2,110,441 839,506 (15,560,014) (18,704,183) 12,239,250 20,384,610 4,146,469 5,456,079 million VND million VND million VND million VND million VND million VND million VND million VND VND million VND million VND million VND million VND million VND million VND million million 2,110,441 839,506 10,877,282 5,301,728 21,316,300 20,779,843 4,181,505 65,406,605
(*) Provision is excluded The above figure shows in detail the remaining maturities by contracts of assets and liabilities agreed due date. that date earliest the to according liabilities and assets of flows cash undiscounted on based presented is table The the Bank would have to fulfil. Due dates on contracts are based earliest date that has collect or pay, except for investments on capital contribution of which maturities are considered as above 5 years due to undetermined maturities. In fact, assets and liabilities of the Bank could be revolved maintained in a longer period.
31/12/2012 months years Total Assets I- Cash, gold, precious stones II- Deposit at the State Bank of Vietnam (*) 1.080.091institutions credit other from loans and due Balances III- IV- Trading securities (*) V-Loans to customers (*) VI- Investment securities (*) (*) contribution capital and investments Long-term VII- VIII- Fixed assets and investment property IX- Other assets (*) Total assets Liabilities I- Deposits and borrowings from the State Bank of Vietnam and other credit institutions II-Deposits from customers III- Other liabilities Total liabilities Net liquidity gaps
89 39. NON-RISK BEARING LOAN ENTRUSTMENT
31/12/2012 31/12/2011
VND VND
Non-risk bearing loan entrustment
In VND 1,544,764,085,217 2,385,179,281,746
In USD 163,794,863,403 645,595,175,939
1,708,558,948,620 3,030,774,457,685
40. COMPARATIVE FIGURES
Comparative figures are figures of the audited financial statements for the year ended 31 December 2011. Some figures in the income statement have been reclassified as follows:
Restated Financial in financial statements for statements for the the year ended year ended Items Note 31/12/2011 Changes 31/12/2012
VND VND VND
Provision for credit (i) 290,849,076,228 (102,851,175,810) 187,997,900,418 losses
(Loss)/Gain from other (i) 88,928,119,734 (102,851,175,810) (13,923,056,076) activities
(i) The reclassification amount represents the reversal of provision for credit losses are recognised in the item “(Loss) / Net gain from other operations”. According to Circular No. 228/2009/TT-BTC dated 7 December 2009, the reversal amount is recorded as a cost reduction of credit risk provisions.
Nguyen Minh Thu Nguyen Thi Nga Le Thi Thanh Hien General Director Chief Accountant Preparer
18 march 2013
90 Audited Financial Statements 2012
91 OCEAN COMMERCIAL JOINT STOCK BANK www.oceanbank.vn
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