AR+2017+ENG Com.Pdf

Bằng đam mê xây dựng một định chế tài chính vững mạnh, mang lại giá trị đích thực cho khách hàng, cổ đông, nhân viên và toàn xã hội, Hội đồng quản trị, Ban điều hành và toàn thể cán bộ nhân viên Ngân hàng luôn nỗ lực phát triển vì một TPBank bền vững và hiệu quả. Với tuyên ngôn thương hiệu “Vì chúng tôi hiểu bạn”, TPBank mong muốn lấy nền tảng của “sự thấu hiểu” khách hàng để xây dựng phong cách chất lượng dịch vụ ngân hàng hàng đầu. Dựa trên nền tảng công nghệ tiên tiến và trình độ quản lý chuyên sâu, TPBank là ngân hàng luôn tiên phong trong các xu hướng dịch vụ ngân hàng hiện đại, hướng tới mục tiêu trở thành Ngân hàng số hàng đầu tại Việt Nam. Pioneering in digitalizing banking services & taking customers understanding as the platform for all activities, TPBank has always been aiming to become the number one digital bank of Vietnam. TPBank’s digitalized products and services has been more and more diversified and user – friendly, by which we aim to build a manner of continuous and superior quality services. The Board of Directors, Board of Management and all TPBank staff always work towards the goal of building TPBank into a strong, stable and efficient bank so that we can bring sustainable values to our customers, shareholders and investors. Pioneering in digitalizing banking services & taking customers understanding as the platform for all activities, TPBank has always been aiming to become the number one digital bank of Vietnam. TPBank’s digitalized products and services has been more and more diversified and user – friendly, by which we aim to build a manner of continuous and superior quality services. The Board of Directors, Board of Management and all TPBank staff always work towards the goal of building TPBank into a strong, stable and efficient bank so that we can bring sustainable values to our customers, shareholders and investors. CONTENT

Message from the Chairman 06 - 07

Overview 09 - 23

2017 Activity Report 24 - 35

2017 Financial Statements 38 - 65

2017 Corporate Governance 66 - 73

2018 Business Plan 74 - 81

Branch Network 82 - 83

Correspondent & Agent Banks 84 - 86 CONTENT

Message from the Chairman 06 - 07

Overview 09 - 23

2017 Activity Report 24 - 35

2017 Financial Statements 38 - 65

2017 Corporate Governance 66 - 73

2018 Business Plan 74 - 81

Branch Network 82 - 83

Correspondent & Agent Banks 84 - 86 MESSAGE FROM THE CHAIRMAN

Ladies and Gentemen,

In 2017, the Banking and Finance sector strongly marked with an average profit growth of over 44.5% along with a positive picture of Vietnam economy. In that context, TPBank has achieved a great success exceeding all financial targets assigned by the General Meeting of Shareholders: achieving the growth of 70% and the profit of VND 1,206 billion, joining in the group of trillion-profit banks in Vietnam for the first time. This sweet fruit is the result of not only the work of the Board of Management (BOM), the Board of Directors (BOD) and thousands of hearts and minds with sweat and efforts of TPBank’s employees but also the support of our Shareholders, Customers and Partners. On behalf of BOM and BOD, I would like to send my gratitude to all of you.

In 2017, TPBank has done important work in developing internal resources and welcoming a new shareholder, bringing new strength to the Bank. TPBank accepted an additional foreign investor, PYN Elite Fund, enhancing the power of its foreign capital and presenting its prestige to investors. In the big progress on digital banking, TPBank has continued to build and complete an ecosystem of digitalized and close-linked products and services including mPOS, eBank, LiveBank, QuickPay, Savy as well as dynamic and modern card products, bringing more convenience to customers.

From its inception to the restructuring period and achieving successes as of today, TPBank has taken a long step in its business and operation. For the first time, we are ranked among the top 10 banks in Vietnam, the Top 500 strongest banks in Asia Pacific (AB500) according to the independent evaluation of The Asian Banker, an Asian prestigious financial and banking organization. This is not only an acknowledgment and a challenge, but also a prerequisite for TPBank to get ready for 2018, continuing "Tien Phong outreaching", celebrating two most important events in the path of TPBank development: 10th anniversary and the stock-market-listing.

To inherit and promote the foundation and experience gained in 2017, on the road to build a strong financial institution, TPBank identifies that 2018 will be the year of five key objectives: superior product, adept profession, teamwork, discipline, and efficiency.

I believe that, under the direction of BOD and BOM, the support of Shareholders, Customers, Partners and the persistence of nearly 5.000 employees of TPBank, we will continue to innovate and seize new opportunities to get ready to conquer the peak and reach new heights in the future.

Chairman, Board of Directors Do Minh Phu

6 tpb.vn MESSAGE FROM THE CHAIRMAN

Ladies and Gentlemen,

In 2017, TPBank has done important work in developing internal resources and welcoming a new shareholder, bringing new strength to the Bank. TPBank accepted an additional foreign investor, PYN Elite Fund, enhancing the power of its foreign capital and presenting its prestige to investors. In the big progress on digital banking, TPBank has continued to build and complete an ecosystem of digitalized and close-linked products and services including mPOS, eBank, LiveBank, QuickPa y, Savy as well as dynamic and modern card products, bringing more convenience to customers.

Chairman, Board of Directors Do Minh Phu

ANNUAL REPORT 2017 7 Tien Phong Commercial Joint Stock Bank (TPBank) was founded on May 5 2008 with strategic shareholders that own expertise and financial strength including: Doji Gold and Gems Group FPT Corporation, Vietnam National Reinsurance Corporation (Vinare), SBI Ven. Holdings Pte.Ltd (Singapore), International Finance Corporation - IFC (a member of World Bank) and PYN Elite Fund. With an initial charter capital of over VND 2,000 billion, TPBank has grown steadily, achieved outstanding business results and repeatedly been recognized as a prestigious financial institution as the Best Bank in Vietnam. After 10 years of operation, TPBank’s total assets have exceeded VND124 trillion; It has joined the group of medium-sized banks with the 2017 profit of over VND1.2 trillion.

TPBank always strives to offer the most effective banking and financial solutions and products, targeting young and dynamic segment, aiming at being the pioneer in setting trends in modern banking services and becoming the Leading Digital Bank in Vietnam. With its current technology infrastructure, TPBank has many advantages in applying advanced technology to automatically implement banking services, product development, and high-technology based e-banking services. It provides a digital transaction enviroment with services such as: TPBank eBank, eBank Biz, TPBank QuickPay ...etc. that have been appealed to customers by their convenience, quickness, safety, and efficiency, developing cash-free payment habits for a large number of customers. TPBank is also the first bank in Vietnam that successfully launched model of 24/7 Automatic Bank called TPBank LiveBank, allowing customers to make almost all basic transactions as they can do at a bank counter and especially customers can interact with remote tellers via video call and this model has received many positive feedbacks. In 2017, TPBank also launched TPBank QuickPay - a money transfer mobile app using QR code, bringing a variety of benefits to customers of different ages.

With such efforts, TPBank has received multiple rewards: Certificate of Merit by Hanoi People's Committee, Best Auto-Loan Product in Vietnam, Vietnam Strong Brand Award, Best Internet Bank Vietnam and Best Retail Bank Vietnam ... etc. In 2017, TPBank was ranked as one of the 10 strongest banks in Vietnam by The Asian Banker and among the top 50 most profitable enterprises by Vietnam Report. With the slogan "A deeper understanding", TPBank desires to use the foundation of "understanding” of its customers to build a leading service quality. Understanding to share, understanding to accompany its customers, to create the best and most suitable products and services that bring the highest value added. This is also the compass for a sustainable development that TPBank is aiming for.

8 tpb.vn Tien Phong Commercial Joint Stock Bank (TPBank) was founded on May 5 2008 with strategic shareholders that own expertise and financial strength including: Doji Gold and Gems Group FPT Corporation, Vietnam National Reinsurance Corporation (Vinare), SBI Ven. Holdings Pte.Ltd (Singapore), International Finance Corporation - IFC (a member of World Bank) and PYN Elite Fund. With an initial charter capital of over VND 2,000 billion, TPBank has grown steadily, achieved outstanding business results and repeatedly been recognized as a prestigious financial institution as the Best Bank in Vietnam. After 10 years of operation, TPBank’s total assets have exceeded VND124 trillion; It has joined the group of medium-sized banks with the 2017 profit of over VND1.2 trillion.

ANNUAL REPORT 2017 9 Mr. Vice Chairman Mr. Chairman

Mr. Do Anh Tu was elected as Vice Chairman of TPBank for the term 2013-2018. Mr. Do Minh Phu was elected as Chairman of Tien Phong Commercial Joint Stock Bank (TPBank) for the term Currently, Mr. Tu is also Chief Executive Officer of Diana 2013-2018. Unicharm JSC, a member of Unicharm Corporation, Japan. As one of the leading experts in brand management and Mr Phu is the founder of DOJI Gold & Gems Group – Vietnam’s marketing, Mr. Tu has made enormous contributions in No. 1 private enterprise according to VNR500. Besides, Mr building TPBank brand footprint to the public as of today. Phu is also Vice Chairman of Vietnam Gold Traders Association (VGTA); Member of Vietnam Chamber of In 2013, Mr. Tu was honored to receive the Certificate of Commerce and Industry (VCCI)’s standing committee; Merit from the Governor of the State Bank of Vietnam for Ambassador of the International Colored Gemstone exceptional contributions and achievements in Association (ICA) in Vietnam. implementing the project “Restructuring the system of credit institutions in the period of 2011-2015”; Certificate With his outstanding achievements and contributions to the of Merit from the Governor of the State Bank of Vietnam economy and society, Mr. Do Minh Phu was honored to be for “Outstanding contributions to banking activities in awarded several merits from the Government and senior Vietnam” (in 2014 & 2015). leaders of the states, such as Third-class Labor Medal (2013 & 2014); Certificate of Merit from the Prime Minister for Mr. Tu earned an Associate Ph.D at Czech Technical exceptional contributions and achievements in implementing University in Prague, Czech Republic. the project “Restructuring the system of credit institutions in the period of 2011-2015”; Certificate of Merit from the Governor of the State Bank of Vietnam for “Outstanding contributions to banking activities in Vietnam” (in 2013, 2014 & 2015); Thanh Giong Cup for “Top 100 outstanding entrepreneurs” (2010 & 2016). Mr. Do Minh Phu graduated with Bachelor Degree in Radio & Electronics at Hanoi University of Science & Technology. HỘI ĐỒNG QUẢN TRỊ

Mr. Vice Chairman

Mr. Le Quang Tien was elected as Vice Chairman of TPBank for the term 2013-2018. Currently, Mr. Tien is also a member of FPT Founder Committee. In 2013, Mr. Tien was honored to receive the Certificate of Merit from the Governor of the State Bank of Vietnam for exceptional contributions and achievements in implementing the project “Restructuring the system of credit institutions in the period of 2011-2015”; Certificate of Merit from the Governor of the State Bank of Vietnam for “Outstanding contributions to banking activities in Vietnam” (in 2014 & 2015). Mr. Tien graduated with a Bachelor Degree in Physics, Kishinev State University and earned his Executive MBA at Amos Tuck University (USA).

10 tpb.vn Mr. Do Anh Tu Vice Chairman

Mr. Do Anh Tu was elected as Vice Chairman of TPBank for the term 2013-2018. Currently, Mr. Tu is also Chief Executive OfΩcer of Diana Unicharm JSC, a member of Unicharm Corporation, Japan. As one of the leading experts in brand management and marketing, Mr. Tu has made enormous contributions in building TPBank brand footprint to the public as of today. In 2013, Mr. Tu was honored to receive the CertiΩcate of Merit from the Governor of the State Bank of Vietnam for exceptional contributions and achievements in implementing the project “Restructuring the system of credit institutions in the period of 2011-2015”; CertiΩcate of Merit from the Governor of the State Bank of Vietnam for “Outstanding contributions to banking activities in Vietnam” (in 2014 & 2015). Mr. Tu earned an Associate Ph.D at Czech Technical University in Prague, Czech Republic.

BOARD OF DIRECTORS

Mr. Le Quang Tien Vice Chairman

Mr. Le Quang Tien was elected as Vice Chairman of TPBank for the term 2013-2018. Currently, Mr. Tien is also a member of FPT Founder Committee. In 2013, Mr. Tien was honored to receive the CertiΩcate of Merit from the Governor of the State Bank of Vietnam for exceptional contributions and achievements in implementing the project “Restructuring the system of credit institutions in the period of 2011-2015”; CertiΩcate of Merit from the Governor of the State Bank of Vietnam for “Outstanding contributions to banking activities in Vietnam” (in 2014 & 2015). Mr. Tien graduated with a Bachelor Degree in Physics, Kishinev State University and earned his Executive MBA at Amos Tuck University (USA).

ANNUAL REPORT 2017 11 Ms. guen Thu a Independent Board Member

Ms. Nguyen Thu Ha was appointed as Independent Board Member of TPBank for the term 2013-2018. Currently, Ms. Nguyen Thu Ha is also Independent Board Member of Smartlink Card Services JSC. Ms. Ha used to hold key positions at key Financial institutions like: Deputy CEO of Vietcombank; Chairwoman of Vietcombank Securities; Chairwoman of Vietnam Card Association, a member of Vietnam Bank Association. Ms. Nguyen Thu Ha earned an MBA Degree from Georgetown University, Washington D.C., USA.

Mr. Phan Tuan Anh Board Member

Mr. Phan Tuan Anh was appointed as TPBank’s Board Member for the term 2013-2018. Currently, Mr. Phan Tuan Anh is also Head of Finance, Mobifone Telecommunication BOARD Corporation. MEMBERS Mr. Phan Tuan Anh earned a Master Degree in Economics, National Economics University. Mr. Pha ong Tu Board Member

Mr. Pham Cong Tu has been the TPBank’s Board Member since its establishment. Mr. Tu is a senior expert in finance and insurance sector. Currently, he is also CEO of Vietnam National Reinsurance Corporation (Vinare). Mr. Tu earned his MBA at United Business Institutes, Belgium and Bachelor of Finance (Accounting) at University of Finance and Accountancy, Hanoi.

Mr. huo hiaa Vice Chairman Mr. a ong i Board Member

Mr. Shuzo Shikata was appointed as Vice Chairman of TPBank from 04/2016 for the term 2013-2018. Mr. Ha Hong Sik was appointed as TPBank’s Board Member since April 2015. Currently, Mr. Shuzo Shikata is also Head of Foreign Business Mr. Ha Hong Sik has more than 15 years of experiences in banking and finance sector. Development (Financial Services) at SBI Holdings, Inc. and Board He used to hold key positions at various credit institutions such as: Managing Director Member of FPT Capital. of Phnom Penh Commercial Bank; Chief Executive Officer cum Chief Operation Officer With his rich and advanced management experiences at of SBI Royal Securities. Since October 2010, he has been Advisor of FPT Capital. international banks, Mr. Shuzo Shikata, together with SBI Holdings, Mr. Ha Hong Sik graduated with Master Degree at Manchester Business School, UK and Inc., has been supporting TPBank strongly in building and earned his Bachelor Degree in International Relations at Gyeongsang National deploying the strategic development plan. University, Korea. Mr. Shuzo Shikata graduated with a Bachelor Degree in Economics, Ritsumeikan University, Japan.

12 tpb.vn Ms. Nguyen Thu Ha Independent Board Member

Mr. Phan Tuan Anh Board Member

Mr. Shuzo Shikata Vice Chairman Mr. Ha Hong Sik Board Member

ANNUAL REPORT 2017 13 BOARD OF SUPERVISORS

Mr. ento Tokimoi Non-specialized Member of Board Of Supervisors

Mr. Kento Tokimori was appointed as non-specialized member of Board of Supervisors in April 2016, for the term 2013-2018. Prior to joining TPBank, Mr. Kento Tokimori has been holding various positions at SBI Holdings. He is currently Head of Foreign Business Management at SBI Holdings ( Japan). Mr. Kento Tokimori earned his Bachelor of Laws from Sophia University, Japan.

Ms. Nguyen Thi ao Head of Board Of Supervisors

Ms. Nguyen Thi Bao was elected as Head of Board of Supervisors for the term 2013-2018. Ms. Nguyen Thi Bao has also been a senior advisor to TPBank Board of Directors since April 2012. She used to hold key positions at various financial institutions such as Vice Director of Main Operation Center at Vietcombank; Head of Investment & Stock Appraisal Department at Vietcombank. Ms. Nguyen Thi Bao earned her MBA at Université Libre de Bruxelles (ULB) in Hanoi.

Mr. Thai uy Nghia Member of Board Of Supervisors

Mr. Thai Duy Nghia was appointed as Member of Board Of Supervisors for the term 2013-2018. Mr. Thai Duy Nghia joined TPBank from June 2008 and used to hold various positions, such as: Head of Internal Supervision and Quality Control; Head of Direct Supervision; Deputy Head of Internal Audit. He is currently specialized member of Board of Supervisors. Mr. Thai Duy Nghia graduated from Banking Academy, majoring in Finance and Credit.

14 tpb.vn BOARD OF SUPERVISORS

Mr. Kento Tokimori Non-specialized Member of Board Of Supervisors

Ms. Nguyen Thi Bao Head of Board Of Supervisors

Mr. Thai Duy Nghia Member of Board Of Supervisors

ANNUAL REPORT 2017 15 BOARD OF MANAGEMENT

Mr. Nguyen ung Chief Executive Officer

Mr. Nguyen Hung has nearly 30 years of experience in senior business management in banking and finance sector. He graduated from Banking Academy and earned his MBA, specializing in e-commerce, at North Central University, USA. He was appointed as Chief Executive Officer at Tien Phong Commercial Joint Stock Bank (TPBank) from 04 July 2012. Prior to joining TPBank, Mr. Nguyen Hung used to hold high-ranking management positions such as CEO of Vietnam Prosperity Bank (VPBank) from April 2009 to June 2012; others senior management positions at Vietnam Technological and Commercial Joint Stock Bank (Techcombank) from 2000 to 2009. With his exceptional contributions in building TPBank as one of the most transparent and effective banks in Vietnam, Mr. Nguyen Hung was honored to receive Certificate of Merit from the Governor of the State Bank of Vietnam for excellent achievements in banking activities.

Ms. Bui Thi Thanh uong Deputy CEO cum Head of Strategic Planning

Ms. Bui Thi Thanh Huong joined TPBank from 9/2012 as Chief Financial Officer and was appointed as Deputy CEO cum Chief Financial Officer in September 2014. From July 2017 until now, Ms. Bui Thi Thanh Huong has been Deputy CEO cum Head of Strategic Planning. Previously, Ms. Huong had years of experiences in banking and finance sector. She used to hold key management positions at various financial institutions such as: Deputy Head of Finance Division, Chief Accountant at Southeast Asia Commercial Joint Stock Bank (SeABank); Auditor at Auditing and Accounting Financial Services Company (AASC), Ministry of Finance. Ms. Huong earned her MBA from The French, Vietnamese Center of Management (CFVG); CPA (Australia) and CPA (Vietnam). She graduated from National Economics University majoring in Audit and Accounting.

Mr. ham Dong nh Deputy CEO cum Head of Operations Division

Mr. Pham Dong Anh joined TPBank since 2007. In 2010, Mr. Pham Dong Anh was appointed as Senior Director of Operations Division. In April 2011, he was appointed as Deputy CEO, in charge of Operations Division, Human Resources & Network Development Division. From August 2012 until now, Mr. Pham Dong Anh has been Deputy CEO cum Head of Operations Division. In September 2014, Mr. Pham Dong Anh was honored to receive Certificate of Merit from the Governor of the State Bank of Vietnam for “Outstanding contributions to the completion of banking tasks in 2012-2013”. Graduating from National Economics University, majoring in Banking and Finance; and Hanoi University, majoring in English language, prior to joining TPBank, Mr. Pham Dong Anh had 14 years of experiences working at VID Public Bank with senior management positions such as: Director of VID Public Bank, Hai Phong Branch; Director of Main Operation Center of VID Public Bank, Hanoi.

16 tpb.vn BOARD OF MANAGEMENT

Mr. Nguyen Hung Chief Executive Officer

Ms. Bui Thi Thanh Huong Deputy CEO cum Head of Strategic Planning

Mr. Pham Dong Anh Deputy CEO cum Head of Operations Division

ANNUAL REPORT 2017 17 BOARD OF MANAGEMENT

Mr. Nguyen Hong uan Deputy CEO cum Head of Risk Management Division Mr. Nguyen Huu Thanh Head of Legal and Compliance Mr. Nguyen Hong Quan was appointed as Deputy CEO cum Head of Risk Management Division since 01 February 2012. Prior to Mr. Nguyen Huu Thanh joined TPBank since May 2011 and was appointed as Head of Legal and Compliance in May 2015. joining TPBank, Mr. Quan had 15 years of experiences in Banking Mr. Thanh has 18 years of experiences in banking legal. Prior to joining TPBank, Mr. Thanh used to work at the State Bank and Finance sector and used to hold important positions at of Vietnam; and then became Deputy Head of Legal and Compliance at Techcombank. various commercial banks and investment banks. He used to be Mr. Thanh earned his Master of Laws at the State Institute of Laws, Hanoi and Master of Public Policies at Tsukuba Head of Risk Management, Deputy Head of Internal Compliance University, Japan. & Control Division at Citibank Vietnam; Acting CEO of An Binh Mr. Dinh an hien Securities. Mr. Nguyen ie Anh Deputy CEO cum Head of Retail Banking Mr. Quan earned his Executive MBA at Asian Institute of Technology (AIT). Previously, he earned a Bachelor Degree in Deputy CEO cum Head of Treasury and Capital Market International Trade at Foreign Trade University, Hanoi and Mr. Dinh Van Chien has held the position of Head of Retail Banking Bachelor Degree in Economics at University of Transport and of TPBank sine December 2013. In April 2016, Mr. Chien was Communications. Mr. Nguyen Viet Anh was appointed as Deputy CEO cum Head of Treasury and Capital Market in March 2011. appointed as Deputy CEO cum Head of Retail Banking. Mr. Nguyen Viet Anh earned his MBA from Washington University, USA. Previously, he graduated from Vietnam National University, Hanoi and Diplomatic Academy of Vietnam. Prior to joining TPBank, Mr. Chien had more than 18 years of Prior to joining TPBank, Mr. Viet Anh has more than 10 years of experiences working at Techcombank and held important experience in banking and finance, as well as marketing. He held positions, such as Head of Treasury and Financial Market; CEO of Techcom Capital; Director of Foreign Exchange and various positions at both local and international institutions, such Derivative Products Center; Director of the Commodity Exchange Center; Head of Currency and Forex Trading Division. as Deputy Head of Card Center, Director of Visa & MasterCard Project at Vietcombank; Head of Marketing at Johnson & Johnson Vietnam; Senior Manager at OCBC (Singapore), in charge of Global Personal Financial Services; Director of Product Development Mr. hu an Hoa Center, Retail Banking at VPBank since 2011. Deputy CEO cum Head of Corporate Banking In 2015, Mr. Chien was honored to receive Certificate of Merit from the Governor of the State Bank of Vietnam for “Outstanding Mr. Khuc Van Hoa was appointed as Deputy CEO cum Head of Sales and Distribution in September 2012. From June 2015, contributions to the completion of banking tasks in 2014-2015”. Mr. Hoa was appointed as Deputy CEO cum Head of Corporate Banking. Mr. Chien earned his Bachelor Degree from Foreign Trade Mr. Hoa earned his MBA from The French, Vietnamese Center of Management (CFVG). Prior to joining TPBank, Mr. Hoa University; Master of Banking and Finance at Notre Dame, Indiana, used to hold key management positions at Technological and Commercial Bank (Techcombank) and Military Bank (MB) USA under Fulbright Scholarship Program. such as: Deputy Head of Risk Management; Director of SME Credit Center; Regional Director of Techcombank; Deputy Head of Big Corporations of MB.

18 tpb.vn BOARD OF MANAGEMENT

Mr. Nguyen Hong Quan Deputy CEO cum Head of Risk Management Division Mr. Nguyen Huu Thanh Head of Legal and Compliance Mr. Nguyen Hong Quan was appointed as Deputy CEO cum Head of Risk Management Division since 01 February 2012. Prior to Mr. Nguyen Huu Thanh joined TPBank since May 2011 and was appointed as Head of Legal and Compliance in May 2015. joining TPBank, Mr. Quan had 15 years of experiences in Banking Mr. Thanh has 18 years of experiences in banking legal. Prior to joining TPBank, Mr. Thanh used to work at the State Bank and Finance sector and used to hold important positions at of Vietnam; and then became Deputy Head of Legal and Compliance at Techcombank. various commercial banks and investment banks. He used to be Mr. Thanh earned his Master of Laws at the State Institute of Laws, Hanoi and Master of Public Policies at Tsukuba Head of Risk Management, Deputy Head of Internal Compliance University, Japan. & Control Division at Citibank Vietnam; Acting CEO of An Binh Mr. Dinh Van Chien Securities. Mr. Nguyen Viet Anh Deputy CEO cum Head of Retail Banking Mr. Quan earned his Executive MBA at Asian Institute of Technology (AIT). Previously, he earned a Bachelor Degree in Deputy CEO cum Head of Treasury and Capital Market International Trade at Foreign Trade University, Hanoi and Mr. Dinh Van Chien has held the position of Head of Retail Banking Bachelor Degree in Economics at University of Transport and of TPBank sine December 2013. In April 2016, Mr. Chien was Communications. Mr. Nguyen Viet Anh was appointed as Deputy CEO cum Head of Treasury and Capital Market in March 2011. appointed as Deputy CEO cum Head of Retail Banking. Mr. Nguyen Viet Anh earned his MBA from Washington University, USA. Previously, he graduated from Vietnam National University, Hanoi and Diplomatic Academy of Vietnam. Prior to joining TPBank, Mr. Chien had more than 18 years of Prior to joining TPBank, Mr. Viet Anh has more than 10 years of experiences working at Techcombank and held important experience in banking and finance, as well as marketing. He held positions, such as Head of Treasury and Financial Market; CEO of Techcom Capital; Director of Foreign Exchange and various positions at both local and international institutions, such Derivative Products Center; Director of the Commodity Exchange Center; Head of Currency and Forex Trading Division. as Deputy Head of Card Center, Director of Visa & MasterCard Project at Vietcombank; Head of Marketing at Johnson & Johnson Vietnam; Senior Manager at OCBC (Singapore), in charge of Global Personal Financial Services; Director of Product Development Mr. Khuc Van Hoa Center, Retail Banking at VPBank since 2011. Deputy CEO cum Head of Corporate Banking In 2015, Mr. Chien was honored to receive Certificate of Merit from the Governor of the State Bank of Vietnam for “Outstanding Mr. Khuc Van Hoa was appointed as Deputy CEO cum Head of Sales and Distribution in September 2012. From June 2015, contributions to the completion of banking tasks in 2014-2015”. Mr. Hoa was appointed as Deputy CEO cum Head of Corporate Banking. Mr. Chien earned his Bachelor Degree from Foreign Trade Mr. Hoa earned his MBA from The French, Vietnamese Center of Management (CFVG). Prior to joining TPBank, Mr. Hoa University; Master of Banking and Finance at Notre Dame, Indiana, used to hold key management positions at Technological and Commercial Bank (Techcombank) and Military Bank (MB) USA under Fulbright Scholarship Program. such as: Deputy Head of Risk Management; Director of SME Credit Center; Regional Director of Techcombank; Deputy Head of Big Corporations of MB.

ANNUAL REPORT 2017 19 BOARD OF MANAGEMENT

Mr. Nguyen uan Thanh Head of Human Resource Management Division

Mr. Nguyen Xuan Thanh has joined TPBank since June 2014 as Head of Human Resource Management Division. Previously, Mr. Thanh had more than 14 years of experiences in human resources management at Techcombank and VPBank with senior management positions, such as: Head of Human Resources Management; Head of Training & Development. Most recently, Mr. Thanh was Head of Human Resources Management at Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank). Mr. Thanh earned his Bachelor of Economics at National Economics University.

Mr. Nguyen a Hoang Head of Direct Sales

Mr. Nguyen Lam Hoang was appointed as Head of Direct Sales and Alternative Channels in 04 December 2013. Previously, he had years of experiences in banking and finance sector and held important management positions at Techcombank, such as Head of Planning Department, Sales Director in Northern region, Personal Finance and Services Division; 2 Ms. Tuong Thi Hoang an Mr. e Hong Na SSP Project Manager in the North cum Vice Director of SSE Center, S&D Division; Head of Sales Center, S&D Division. Head of Investment and Big Corporate Banking Deputy CEO cum Chief Credit Officer Mr. Hoang graduated from National Economics University, majoring in Banking and Finance; and earned his MBA from The French, Vietnamese Center of Management (CFVG). Ms. Truong Thi Hoang Lan joined TPBank since February 2011. Mr. Le Hong Nam joined TPBank since 2009 as Director of TPBank After holding several senior management positions at TPBank, Ho Chi Minh Branch. Since March 2012, Mr. Nam was appointed she was appointed as Head of Investment and Custodian as Deputy CEO in charge of Southern region. Later, he was Mr. ui Quang Cuong Banking in May 2015. In December 2016, Ms. Lan was appointed as Deputy CEO cum Chief Credit Officer. Head of Information Technology Division appointed as Head of Investment and Big Corporate Banking. Graduating as Master of Banking and Finance, Mr. Nam has more In September 2014, Ms. Truong Thi Hoang Lan was honored to than 20 years of experience in the field and held important Mr. Bui Quang Cuong joined TPBank since the establishment project’s early phase in May 2007. receive Certificate of Merit from the Governor of the State positions at credit institutions such as: Head of Credit & Mr. Cuong used to hold key positions, such as: Head of Information Technology Center; Acting Director of Card Center and Digital Bank of Vietnam for “Outstanding contributions to the Investment at Head Office, Shinhan Vina Joint Venture Bank; Bank of TPBank. Currently, Mr. Cuong holds the position of Head of Information Technology Division. completion of banking tasks in 2012-2013”. Director of GPBank Ho Chi Minh Branch; Deputy CEO of Mekong In September 2014, Mr. Bui Quang Cuong was honored to receive Certificate of Merit from the Governor of the State Bank of Ms. Lan has more than 12 years of experiences in banking and Development Commercial Joint Stock Bank. Vietnam for “Outstanding contributions to the completion of banking tasks in 2012-2013”. finance sector. Prior to joining TPBank, she used to be CEO of In 2016, Mr. Nam was honored to receive Certificate of Merit Mr. Cuong has 22 years of experiences in banking and IT sectors. Prior to joining TPBank, he used to hold the positions of Director Viet Tin Securities Joint Stock Company. from the Governor of the State Bank of Vietnam for “Outstanding of Software Center, 3C Company; Head of IT Department, VID Public Bank. Ms. Lan graduated with a Bachelor Degree in Management contributions to the completion of banking tasks in 2014-2015”. Mr. Cuong earned his Bachelor of Science at College of Natural Science, Vietnam National University. Science at Thang Long University.

20 tpb.vn BOARD OF MANAGEMENT

Mr. Nguyen Xuan Thanh Head of Human Resource Management Division

Mr. Nguyen Lam Hoang Head of Direct Sales

Mr. Nguyen Lam Hoang was appointed as Head of Direct Sales and Alternative Channels in 04 December 2013. Previously, he had years of experiences in banking and finance sector and held important management positions at Techcombank, such as Head of Planning Department, Sales Director in Northern region, Personal Finance and Services Division; 2 Ms. Truong Thi Hoang Lan Mr. Le Hong Nam SSP Project Manager in the North cum Vice Director of SSE Center, S&D Division; Head of Sales Center, S&D Division. Head of Investment and Big Corporate Banking Deputy CEO cum Chief Credit Officer Mr. Hoang graduated from National Economics University, majoring in Banking and Finance; and earned his MBA from The French, Vietnamese Center of Management (CFVG). Ms. Truong Thi Hoang Lan joined TPBank since February 2011. Mr. Le Hong Nam joined TPBank since 2009 as Director of TPBank After holding several senior management positions at TPBank, Ho Chi Minh Branch. Since March 2012, Mr. Nam was appointed she was appointed as Head of Investment and Custodian as Deputy CEO in charge of Southern region. Later, he was Mr. Bui Quang Cuong Banking in May 2015. In December 2016, Ms. Lan was appointed as Deputy CEO cum Chief Credit Officer. Head of Information Technology Division appointed as Head of Investment and Big Corporate Banking. Graduating as Master of Banking and Finance, Mr. Nam has more In September 2014, Ms. Truong Thi Hoang Lan was honored to than 20 years of experience in the field and held important Mr. Bui Quang Cuong joined TPBank since the establishment project’s early phase in May 2007. receive Certificate of Merit from the Governor of the State positions at credit institutions such as: Head of Credit & Mr. Cuong used to hold key positions, such as: Head of Information Technology Center; Acting Director of Card Center and Digital Bank of Vietnam for “Outstanding contributions to the Investment at Head Office, Shinhan Vina Joint Venture Bank; Bank of TPBank. Currently, Mr. Cuong holds the position of Head of Information Technology Division. completion of banking tasks in 2012-2013”. Director of GPBank Ho Chi Minh Branch; Deputy CEO of Mekong In September 2014, Mr. Bui Quang Cuong was honored to receive Certificate of Merit from the Governor of the State Bank of Ms. Lan has more than 12 years of experiences in banking and Development Commercial Joint Stock Bank. Vietnam for “Outstanding contributions to the completion of banking tasks in 2012-2013”. finance sector. Prior to joining TPBank, she used to be CEO of In 2016, Mr. Nam was honored to receive Certificate of Merit Mr. Cuong has 22 years of experiences in banking and IT sectors. Prior to joining TPBank, he used to hold the positions of Director Viet Tin Securities Joint Stock Company. from the Governor of the State Bank of Vietnam for “Outstanding of Software Center, 3C Company; Head of IT Department, VID Public Bank. Ms. Lan graduated with a Bachelor Degree in Management contributions to the completion of banking tasks in 2014-2015”. Mr. Cuong earned his Bachelor of Science at College of Natural Science, Vietnam National University. Science at Thang Long University.

ANNUAL REPORT 2017 21 ORGANIZATION Annual General Meeting STRUCTURE (AGM)

Board of Supervisors Board of Directors (BOS) (BOD) Operations Human Resources Sound Head Office (OP) (HR) Internal Audit (IA) Chief Excutive Officer Information PR & Marketing Technology (IT) (PRM) (CEO)

Finance & Accounting Risk Management (FA) (RM) Excutive Committee (EXCO)

Credit Legal & Compliance (CR) (LC) Normination & Remuneration Audit and Risk Committee (NORCO) Committee (ARCO)

Assets and Liabilities Credit Committee Committee (ALCO) (CRCO)

Investment Committee (INCO)

Branhe ORGANIZATION Annual General Meeting STRUCTURE (AGM)

Finance & Accounting Risk Management (FA) (RM) Excutive Committee (EXCO)

Credit Legal & Compliance (CR) (LC) Normination & Remuneration Audit and Risk Committee (NORCO) Committee (ARCO)

Assets and Liabilities Credit Committee Committee (ALCO) (CRCO)

Investment Committee (INCO)

Branhe ACTIVITY REPORT ACTIVITY REPORT TOP TEN HIGHLIGHTS OF 2017 TPBank launched the official corporate song "TPBank Rises to the Top" and announced its Codes of Conduct

TPBank joined the group of trillion-profit banks By the end of 2017, TPBank had a successful year as it reached and surpassed all of its 2017 financial targets assigned by the General TPBank pioneered in application Meeting of Shareholders: profit at VND of Fintech, launching a series of 1,205 billion (155% of plan); total breakthrough products such as asset value at VND 124 trillion; NPL Savy, QuickPay, ePIN ratio at 0.92% and was ranked among the best credit quality banks in the market. TPBank entered the top 10 strongest banks in Vietnam; Top 500 strongest banks in Asia Pacific evaluated by The Asian Banker

TPBank brought the Vietnam golf team to victory over teams of other 40 countries in the World Amateur Golf Champion- ship WAGC

Best Digital Banking Award by IDG and Vietnam Banks Association (VNBA)

7. Chairman Do Minh Phu took the stage at Top Leader Talk event in front of thousands of employees, which spread inspiration and trust throughout the Bank. Chairman Do Minh Phu announced to continue leading Launching and deploying the TPBank as Chairman of the Bank most modern 24/7 LiveBank automatic transaction points in Vietnam, the latest in the world and approved to apply eKYC

The PYN Fund Management Launching the artificial spent nearly USD40 million to intelligence chatbot T'Aio acquire 4.99% stake in TPBank, marking TPBank's success in the domestic and international markets 26 tpb.vn TPBank launched the official corporate song "TPBank Rises to the Top" and announced its Codes of Conduct

TPBank pioneered in application of Fintech, launching a series of breakthrough products such as Savy, QuickPay, ePIN

TPBank brought the Vietnam golf team to victory over teams of other 40 countries in the World Amateur Golf Champion- ship WAGC

Launching the artificial intelligence chatbot T'Aio

ANNUAL REPORT 2017 27 II. OPERATING RESULTS AND BUSINESS TARGETS IN 2017 2017 1. KEY FINANCIAL INDICATORS OF 2017 ACTIVITY REPORT Table 1: Key financial indicators Unit: VND billion

Actual/Target Y-O-Y No. Item FY2016 FY2017 2017 Target Growth I. OVERVIEW ABOUT THE ECONOMY AND BANKING SECTOR IN 2017 +/- %

1 Total assets 105.782 124.119 120.000 17,33% 4.119 3,43% 1. ABOUT THE ECONOMY

The world’s economy in 2017 recovered strongly with special thanks to positive growth rate from big countries including United States 2 Charter Capital 5.842 5.842 5.842 0,00% (0) 0,00% of America, China, Japan and European Union. 3 Total Deposits 97.539 114.669 111.068 17,56% 3.601 3,24% Vietnam’s economy has recorded unprecedented high growth in latest 10 years at 7.65%, with GDP increasing at 6.81%, exceeding the Government’s target. Average CPI increased by 3.53% compared to the average of 2016, lower than the Parliament’s target. 3.1 Deposits from customers 55.082 73.780 62.597 33,95% 11.183 17,86% Inﬂation rate was well controlled at under 4%. 3.2 Deposits and loans from of 41.245 38.261 46.834 -7,23% (8.573) -18,5% other credit institutions

2. ABOUT THE BANKING SECTOR 3.3 Trusted funds 1.212 2.628 1.637 116,83% 991 60,54% In 2017, banking sector’s performance saw positive changes, the scale of capital mobilization, assets and credits. By the end of 2017, Outstanding loans and corporate 4 58.523 71.296 69.056 21,83% 2.240 3,24% total liquidity increased by 14.19% compared to the end of 2016, mobilizing capital of credit institutions rose by 14.5%, credit growth bonds of the economy reached 18.17%. Despite the difference between credit and deposit growth, the liquidity of the banking system remained stable. 4.1 Loans to customers 47.326 64.007 58.676 35,25% 5.331 9,09%

The deposit rates were relatively stable through the year. Interest rates in VND were commonly quoted at 0.8% -1% per annum for 4.2 Investment of corporate bonds 11.197 7.289 10.380 -34,90% (3.091) -29,78% demand and term deposits of less than 1 month, 4.3% -5.4% per annum for deposits with term of 1 month to less than 6 months, 5.3% - 6.5% per annum or term deposits from 6 months to less than 12 months, for deposits with a term of over 12 months, the rates 5 Non-performing Loan (NPL) ratio 0,70% 1,08% <2% 0,38% were 6.5% - 7.3% per annum The common lending rates of priority sectors were 6% - 6.5% per annum for short term, 9% - 10% 6 Profit before tax 707 1.206 780 70,54% 426 54,58% per annum for medium and long term. Lending rates for common business sectors were 6.8% - 9% per annum for short term, 9.3% -11% per annum for medium and long term. 7 CAR >9% >9% >9%

On the exchange rate and the forex market, 2017 was a year of “calm waves”. Although there were certain fluctuations at the 8 ROE (*) 12,08% 15,6% 12,5% 29% 3,1% 25% beginning of the year, the foreign currency market and exchange rate were considered to remain stable. In 2017, the new Central rate rose only 1.21% compared to the beginning of the year (at VND 22,426) whilst the USD rate at commercial banks fell slightly by 0.18%, popularly at around VND 22,680 – VND 22,750. Despite FED’s path of interest rate increase, USD strong depreciation against Note (*): ROE = Profit before tax/Equity other major currencies was considered as a positive factor for stability of foreign exchange market.. Total assets of TPBank as on 31 December 2017 reached VND 124,119 billion, equivalent to 103.43% of the year plan. Although total To TPBank, the performance in 2017 was considered as a hinge year as business results surpassing the milestone of VND 1,200 billion, assets increased by only 17.33%, the Bank’s profit increased by over 70% compared to 2016 and exceeded 55% of the plan, showing far exceeding the target set by the General Shareholders’ Meeting, paving the way for the next year’s development. Financial targets an impressive performance of TPBank. Total deposit at the end of 2017 was VND 114,669 trillion, in which the capital portfolio and outgrew planned ones. Operating expenses and bad debts were well controlled compared to the industry average. Mobilization and capital use also had a change in quality when mobilization of Primary Market reached VND 73,780 trillion, increasing by nearly 34% credit growth achieved good results, especially the mobilization target. The operating safety criteria complied with regulations of SBV compared to 2016 and helped reduce lending rates and mobilization of Market 2 from 42% in 2016 to 33% in 2017. Total outstanding as well as requirements of partners. loans (including Corporate Bond) well grew to VND 71,296 billion. In which, loans to customers were VND 64,007 billion. LDR of Primary Market fell to 97% and the overall LDR was only 62%, the ratio of short-term capital used for medium- and long-term loans were 27% at the end of 2017. In addition, the safety indexes and ratios positively improved and complied with the regulations of SBV. Debt quality remained low, NPL ratio is 1.08% at the end of 2017 among which only 0.86% was real, the remaining is due to the reclassification of customers’ NPL at other banks.

Total operating income of TPBank in 2017 was VND 3,610 billion, in which net interest income reached VND 3,172 billion (accounting for 87.9%). Net non-interest income reached VND 417 billion (accounting for 12.1%). Proﬁt before Provisions for credit risk was VND 1,668 billion. In 2017, the Bank reserved a risk provision of VND 462 billion, in which provision for customer loan was VND 307 billion and for VAMC bonds was VND 155 billion.

The Bank’s proﬁt before tax in 2017 was VND 1,206 billion, equivalent to 154.58% of the year target submitted to the General Shareholders’ Meeting.

28 tpb.vn II. OPERATING RESULTS AND BUSINESS TARGETS IN 2017 2017 1. KEY FINANCIAL INDICATORS OF 2017 ACTIVITY REPORT Table 1: Key financial indicators Unit: VND billion

Actual/Target Y-O-Y No. Item FY2016 FY2017 2017 Target Growth I. OVERVIEW ABOUT THE ECONOMY AND BANKING SECTOR IN 2017 +/- %

1 Total assets 105.782 124.119 120.000 17,33% 4.119 3,43% 1. ABOUT THE ECONOMY

The Bank’s proﬁt before tax in 2017 was VND 1,206 billion, equivalent to 154.58% of the year target submitted to the General Shareholders’ Meeting.

ANNUAL REPORT 2017 29 80,000 2,000,000 2.2 Capital utilization activities

70,000 2.2.1 Credit activities

60,000 1,500,000 Credit policies that TPBank closely developed for credit activities in accordance with strategic directions of the Bank showed effectiveness in improving the process of credit granting and asset appraisal recently. 50,000 By the end of 2017, outstanding loans to customers were VND 64,007 billion, within which short-term loans were VND 18,704 billion, 40,000 1,000,000 accounting for 29.22% and medium and long-term loans were VND 45,303 billion, accounting for 70.78% of total outstanding loans of Primary market. 30,000 Regarding Retail Banking segment, in addition to continue developing key lending ﬁelds, Business Divisions captured market 20,000 500,000 opportunities to grow core loans, increasing proﬁtability and the Bank’s market share. In the year 2017, TPBank also launched a number of new products to serve different customers and segments. TPBank successfully deployed cooperation with lots of new 10,000 partners, hence increased revenue. In regard to Car loan, the Bank kept holding the leading position in car loan market.

- 0 The Corporate Banking segment witnessed good lending growth. Along with the car loan products that Corporate Banking successfully 2011 2012 2013 2014 2015 2016 2017 deployed, the instant loan products started to mark their achievements in some specialized industries, creating favorable condition for business units to approach and provide credits to enterprises in these industries.. The Bank also increased off-balance sheet Number Deposit of Outstanding loans credit activities, grew well in non-interest income, focused on building and improving a number of products, including several leading of Customer Primary Market of Primary Market products such as Bank Guarantees; LC/ LC UPAS which were considered highly competitive in the market. Thereby, the segment Figure 1: Trend of Deposit, Outstanding Loan of Primary Market and Number of Customers signiﬁcantly contributed to the enhancement of competitiveness of TPBank.

By the end of 2017, the total assets reached VND 124,129 billion, an increase of VND 18,337 billion compared to the end of 2016, in which: Primary Market’s deposits rose by VND 18,698 billion - equivalent to 33.95%, Primary Market’s loans grew by VND 16,681 10.2% billion or 35.25%. Customer base continued to expand, number of new customers within the year was 197,755 customers, reaching FY 2017 over 1,715,600 customers. This was an important foundation for TPBank to further develop in the coming years. 36.2% Retail banking customers

2. RESULTS OF SPECIFIC ACTIVITIES 53.5% Coporate banking customers

2.1 Capital mobilization activities Coporate bonds

Deposits from customers reached VND 70,299 billion in 2017, 27.63% higher than in 2016, in which: demand deposits from customers were ~ 11,830 billion (accounting for 16.83%); foreign currency deposits were VND 7,844 billion, an increase of VND 1,679 billion (27.23%) compared to the end of last year (accounting for 11.16%). Especially in 2017, TPBank maintained an effective mobilization Figure 4: Lending activities in 2017 orientation and positioned itself as a safe operation bank with term deposit rates at market average.

TPBank launched various new products to meet growing needs of customers with several promotion campaigns.

Efforts in dealing with outstanding NPLs and growing high-quality credits helped improve credit quality, the ratio was of 1.08% at the 70000 end of 2017. 62,455 60000 60000 58,468 2.2.2 Investment, forex and gold trading activities 50000 50000 47,380 48,917 TPBank’s investment portfolio was managed in a way that ensured profitability, liquidity and compliance with the regulations of SBV.

40000 40000 As of 31 December 2017, the total investment in government bonds and other credit institutions’ bonds reached VND 18,328 billion,

30000 30000 aiming at ensuring liquidity of the Bank, as well as diversifying the investment portfolio. Since the beginning of the year, the Capital Market Division developed great strategies as it boldly increased trading limit, maximized trading term, , and achieved good business 20000 20000 results. In 2017, TPBank continued to be a member ranked highly among the primary bidding members of the Ministry of Finance and 7,702 was an actively trading member of government bonds and government guarantee bonds in the secondary market. 10000 7,702 10000 7,844 6,165 Term deposits and loans at other credit institutions reached VND 22,590 billion. Generally in 2017, the liquidity in the interbank market 0 0 was plentiful and average interest rates were low (especially in the third quarter and the fourth quarter of 2017). Consequently, 2016 2017 2016 2017 TPBank effectively used the quotas granted by the domestic and foreign financial institutions. in order to: increases long-term Demand Deposits Term Deposits Foreign Currency VND borrowing and ensure liquidity, increase lending/deposit transactions with a wider base of partnership and raise profitability from Figure 2: Deposit classification by terms Figure 3: Deposit classification by currency interest rate differences. It continued to cooperate closely with financial institution partners to meet the demand for borrowing and interbank lendi. This channel was a significant contributor to net operating income of the Bank in 2017.

30 tpb.vn 80,000 2,000,000 2.2 Capital utilization activities

70,000 2.2.1 Credit activities

2. RESULTS OF SPECIFIC ACTIVITIES 53.5% Coporate banking customers

2.1 Capital mobilization activities Coporate bonds

TPBank launched various new products to meet growing needs of customers with several promotion campaigns.

40000 40000 As of 31 December 2017, the total investment in government bonds and other credit institutions’ bonds reached VND 18,328 billion,

ANNUAL REPORT 2017 31 2.4 Activities of supporting units 2.4.1 Human resources development activities 26.4% FY 2017 As at 31 December 2017, the total number of employees of the Bank was 4,848 people, increasing 40% compared to the end of 2016, mostly from increase of sales force and personnel for new branches. Government bonds 17.7% TPBank promoted its recruiting activities, satisfying personnel demands for both current units in the year and new branches/units 54.4% Other credit institutions bonds opening in 2018.

Trusted funds The bank made an adjustment of staffs’ salaries and welfares in the whole system in order to improve the competitiveness, attract 1.5% and retain personnel. It built and improve the mechanism for sales incentives and indirect titles to encourage working motivation and increase productivity.

In 2017, 551 training courses were conducted for 17,751 staffs, an increase of 221 training courses and 6,971 staffs trained compared Figure 5: Investment portfolio in 2017 to 2016.

The training center coordinated with other Divisions conducting periodical review of the entire training programs, adjusting better content and duration, hence the quality of the trainees was improved, and met work requirements in business units. In 2017, TPBank boosted its performance in gold and foreign exchange businesses, foreign exchange sales continued to grow well, entering the list of the top 20 for 03 times, with a strong increase in forex sales and segment of individual customers. Gold sales 2.4.2 Infomation technology (IT) activities continued to be in the top 3 of the market share. With the aim of affirming the name of Digital Bank of TPBank, in 2017 IT Division deployed and went live a number of big technology 2.2.3 Financial Institution (FI) Activities projects to meet business demand of the Bank; actively researching and applying new technologies and functions to help increase productivity and make difference in operation as well as in the Bank’s products; strengthen information safety and security, investing FI Division extended limits and relations with domestic and foreign financial institutions, especially increased limits with foreign FIs in upgrading security systems; maintaining the system operation stable, safe, cost-saving, and improving the quality of customer and contributed to enhancement of ability to mobilize capital in order to generate profits and liquidity assurance of the Bank. service. In details: It participated in low-cost development funding projects from international organizations to take advantage of the opportunities for technical assistance, funding sources for TPBank. • Successfully deploying eBank Enterprise 3.0 that provided a number of new features and products for customers, especially the integration of digital signature. It successfully conducted commercial loans with large values from foreign financial institutions, hence increased the trade finance limits. • Successfully implementing loan initialization system - LOS phase 1 project, which gradually standardized, automated the approval It met the sudden increase in 2017 Bank’s volume of Trade Finance. of individual customer loans, reduced transaction-processing time.

In 2017, TPBank remained holding B2 for Moody’s credit rating, prospected stability and built a strong and stable image of TPBank in • Launching automatic transaction solution LiveBank (VTM), which gave customers access to a new service, enhancing digital domestic and foreign markets. experience and service 24/7.

2.3 Risk managerment activities • Completing eGold online project that allowed customers to buy and sell gold online, which was fast, convenient, safe and minimizes use of cash. In 2017 TPBank’s risk management system continued to be promoted and strengthened, NPL ratio was below the plan, no operational losses occurred and potential risk events were within acceptable level, safety criteria in operation were maintained and further • Successfully deploying ESB Phase 1 project that standardized connection of TPBank services in terms of design, operation and improved. management, and helped increase reusability, and shorten implementation time of projects.

A number of key issues related to enhancing capabilities of operational risk management were addressed: conducted Basel 2-oriented • Successfully deploying the first ePIN project in Vietnam, which allowed customers to quickly change their PIN in minutes instead operational risk management tools such as Loss Data Collection, Key Risk Indicators, hence identified significant risks and proposed of in days as before, hence saved on printing, delivery and enhanced quality service and customer satisfaction. solutions to address such risks; developed a plan for maintaining business continuity of business units throughout the system; recognized and analyzed business interruptions, recommended and monitored the implementation of corrective solutions to avoid • Implementing 3D-Secure in which TPBank self-built solutions instead of purchasing full package from partner and synchronized repetitive problems at TPBank. It regularly monitored performance of the solutions that fix and prevent risks; and accelerated the authentication methods with eBank instead of only sending SMS like other banks. implementation process. • TPBank has always complied with regulations on capital adequacy of SBV, IFC, ADB and commitments with foreign partners. Successfully self-studying, integrating and deploying the next-generation mPOS 3G device and the new mPOS app, saved up to Specifically, the minimum capital adequacy ratio (CAR) maintained at over 9%. The ratio of total assets to current liabilities and 60% of device costs compared with conventional 3G POS, which supports contactless payment and enables compatibility with total liabilities maintained at over 10% (SBV regulations was not less than 10%); the quick payment rate kept above 12% (stipulated Samsung Pay not less than 10%); the payment rate in the next 30 days of each currency sustained above 50% for VND, over 10% for Foreign • Successfully developing and implementing TPBScan software, which facilitated digitization of documents at the counters fast and currency converted to VND in accordance with the regulations of the State Bank. The proportion of short-term capital for medium and convenient, optimized the use of the transmission line,. long-term loans preserved at a much lower 50%.

• Deployed Qlik and dashboard new technologies that effectively supports with multidimensional management information

• Successfully implementing eCounter project throughout the Bank to give customers new experiences when making transactions with TPBank.

32 tpb.vn 2.4 Activities of supporting units 2.4.1 Human resources development activities 26.4% FY 2017 As at 31 December 2017, the total number of employees of the Bank was 4,848 people, increasing 40% compared to the end of 2016, mostly from increase of sales force and personnel for new branches. Government bonds 17.7% TPBank promoted its recruiting activities, satisfying personnel demands for both current units in the year and new branches/units 54.4% Other credit institutions bonds opening in 2018.

In 2017, 551 training courses were conducted for 17,751 staffs, an increase of 221 training courses and 6,971 staffs trained compared Figure 5: Investment portfolio in 2017 to 2016.

• Deployed Qlik and dashboard new technologies that effectively supports with multidimensional management information

• Successfully implementing eCounter project throughout the Bank to give customers new experiences when making transactions with TPBank.

ANNUAL REPORT 2017 33 • Launched new product QuickPay – QR code payment solution with a number of breakthrough features which were tools to help 2.4.5 Prizes and awards in 2017 fast develop numbers of customers and support for the implementation of non-cash payment as directed by of SBV.

TPBank was the only bank to be honored with “Best Auto Loan Production in Vietnam” from The Jan 2017 • Successfully implementing CIC automatic-search project which was a robotic technology that helped save cost of about 30 Asian Banker personnel, minimized duplication of search and reduced response time.

TPBank received prestigious Vietnam Brand Award from VNEconomy and Vietnam Trade • Rolling out 02 new authentication methods called OTP Push Notiﬁcation and OTP Display Card, in which OTP Display Card was the April 2017 Promotion Bureau under the Ministry of Indutry and Trade. ﬁrst new OTP product in Vietnam.

• Successfully finishing ISO 20000K project and TPBank became the first bank in Vietnam achieving certification of information TPBannk received “Best internet banking product in Vietnam” and “Best retail bank in Vietnam” May 2017 technology service management in accordance with international standards. from Global Financial Market Review (GFM).

• Deploying other projects Mr. Nguyễn Viêt Anh – TPBank Deputy CEO was honord with “Leadership Achievement Award” June 2017 by The Asian Banker 2.4.3 Products and customers development TPBank was honored with Emulation ﬂag and Certiﬁcate of Merit for Excellent Unit in the August 2017 Retail banking activites emulation movement “Good deployment of tax policy 2016” by Hanoi People’s Committee”

• Analyzing existing customer portfolios to identify potential customer segments for cross-selling. Building a set of products to meet 06 groups of customer needs: Account – Transaction, Deposits, Lending, Credit cards, Insurance and Investment. Deploying October 2017 TPBank entered the Vietnam top 50 best proﬁt enterprises by Vietnam Report new and diversiﬁed products to meet evolving demands of customers (Deposits, Loans - especially trust loans, Cash Free Cards, Prepaid Cards, etc.) November 2017 TPBank entered the top 10 strongest banks in Vietnam by The Asian Banker

• Launching new Bancassurance products to increase fee income, meeting more comprehensive needs of customers through TPBank received “Best Digital Banking Award 2017” by and Vietnam banking from International continuous deployment of customer development campaigns, partnerships, promotions and sales accelerating programs. December 2017 Data Group and Vietnam Banks Association (VNBA)

• In regard to card products, adding a number of new features including: 3D Secure, Installments, Digital PIN, Loyalty, etc. Launching new products: Visa Debit Cash Free & Prepaid Virtual Card.

• Developing and introducing digital banking products, application of information technology in accordance with the aim of being a 3. LIMITATIONS, REMAINS TO OVERCOME leading digital bank in Vietnam (QPay, Savy, etc.) as well as a pioneering bank applying Fintech in business. Besides achievements, in 2017 TPBank still has some limitations that need to be improved. In details:

Coporate banking activities 3.1 Business Activity

To closely meet clients’ needs, Corporate Banking Division issued a series of basic, core and competitive products. • Improve ability to exploit customers, identify products that are salable to continue exploiting full potential of customers. Develop stronger and more focusing sales force and sales activities. Sales promotion programs and marketing campaigns for customer development and customer care were intensively adopted. In 2017, TPBank had eBank Biz 3.0 go live with many outstanding new features such as Online International Money Transfer; Credit • Because of policy affection, capital mobilization performance was below expectation due to focusing on effective capital transactions; Guarantee; L/C via eBank; Application of digital signature on eBank to conﬁrm transaction and sign documents. mobilization, prioritizing longer term to maintain good medium – long term capital for lending activities. eBank proceeded to expand its partnerships and provided convenient online payment services such as: 24/7 customs payment; freight payment service; eBank services developed speciﬁcally for big customers; Upgrade on batch transfer (payroll service on • Old debts of loan portfolio increase which possibly make the number of NPL increase accordingly, hence it requires continuous eBank); Upgrade on OTP SMS for eBank BIZ; Implementation of OTP Token Card for eBank BIZ... control to guarantee credit quality.

• Cost of management activities remains high that needs to be improve in following period 2.4.4 Network development activities

As at 31 December 2017, the total number of ATMs+ (LiveBank) operating was 48 in Hanoi, Hochiminh City and some other provinces/ 3.2 Human resources development activities cities. . TPBank opened a representative office in Ho Chi Minh City, 01 branch in Kien Giang; 02 transaction offices in Binh Duong and Dong Nai. As at 31 December 2017, TPBank’s branch network covered all three regions with 64 transaction points. All new business • Recruitment: the bank faces some difficulties in attracting experienced personnel and needs to improve in 2018 units are located in densely populated areas, have strong visibility and perform effectively. • Labor relations: improve internal human resource development for experienced personnel group, increase screening ratio of internal appointment over recruitment from outside

• Training: improve cementation of training activities and internal personnel planning and development

34 tpb.vn • Launched new product QuickPay – QR code payment solution with a number of breakthrough features which were tools to help 2.4.5 Prizes and awards in 2017 fast develop numbers of customers and support for the implementation of non-cash payment as directed by of SBV.

• In regard to card products, adding a number of new features including: 3D Secure, Installments, Digital PIN, Loyalty, etc. Launching new products: Visa Debit Cash Free & Prepaid Virtual Card.

Coporate banking activities 3.1 Business Activity

• Cost of management activities remains high that needs to be improve in following period 2.4.4 Network development activities

• Training: improve cementation of training activities and internal personnel planning and development

ANNUAL REPORT 2017 35

IACIA TATEET IACIA TATEET GENERAL INFORMATION GENERAL INFORMATION (continued)

THE BANK BOARD OF SUPERVISIONS

Tien Phong Commercial Joint Stock Bank (hereinafter referred to as the “Bank” or “TPBank”) is a joint stock commercial bank Name Position Date of appointment/ resignation incorporated in the Socialist Republic of Vietnam. Ms. Nguyen Thi Bao Head of the Board (Appointed on 12 April 2013) The Bank was established in accordance with Banking License No. 123/GP-NHNN issued by the Governor of the State Bank of Vietnam (“the SBV”) on 05 May 2008; which has been subsequently amended and supplemented in accordance with Decision No. Mr. Thai Duy Nghia Specialized Member (Appointed on 12 April 2013) 2132/QD-NHNN dated 27 September 2011 by the Governor of the SBV with the operation duration of 99 years. The Bank’s initial Mr. Tomohiro Yamaguchi Member (Appointed on 21 April 2017) Business Registration Certificate was initially granted on 12 May 2008 and amended for the 23rd on 04 October 2016.

The Bank’s main activities are providing banking services including mobilizing and receiving short-term, medium-term, and long-term deposits from organizations and individuals; making short-term, medium-term, and long-term loans to organizations and individuals based on the nature and capability of the Bank’s sources of capital; conducting foreign exchange transactions, BOARD OF MANAGEMENT AND CHIEF ACCOUNTANT international trade finance services, discounting of commercial papers, bonds and other valuable papers, and providing other banking services as approved by the SBV. Name Position Date of appointment/ resignation

(Appointed on 04 July 2012) Location and Operational network Mr. Nguyen Hung General Director (Reappointed on 03 October 2017) The Bank’s Head Office is located at TPBank Building, 57 Ly Thuong Kiet Street, Hoan Kiem District, Hanoi, Vietnam. As at 31 (Appointed on 08 April 2011) December 2017, the Bank has one (01) Head Office, one (01) representative office in Ho Chi Minh City, thirty (30) branches and Mr. Pham Dong Anh Deputy General Director (Reappointed on 01 July 2017) thirty four (34) transaction offices located in cities and provinces all over the country. (Appointed on 07 March 2011) Mr. Nguyen Viet Anh Deputy General Director (Reappointed on 01 July 2017)

BOARDS OF DIRECTORS AND MANAGEMENT (Appointed on 01 February 2012) Mr. Nguyen Hong Quan Deputy General Director The members of the Boards of Directors and Management of the Bank who held office during the year and to the date of this (Reappointed on 01 July 2017) report are as follows: (Appointed on 02 March 2012) Mr. Le Hong Nam Deputy General Director (Reappointed on 01 July 2017)

Name Position Date of appointment/resignation (Appointed on 15 September 2012) Mr. Khuc Van Hoa Deputy General Director (Reappointed on 01 July 2017)

Mr. Do Minh Phu Chairman (Appointed on 12 April 2013) (Appointed on 09 September 2014) Ms. Bui Thi Thanh Huong Deputy General Director (Reappointed on 01 July 2017)

Mr. Le Quang Tien Vice Chairman (Appointed on 12 April 2013) Mr. Dinh Van Chien Deputy General Director (Appointed on 15 April 2016)

Ms. Le Cam Tu Chief Accountant (Appointed on 26 April 2013) Mr. Do Anh Tu Vice Chairman (Appointed on 12 April 2013)

Mr. Shuzo Shikata Vice Chairman (Appointed on 13 May 2016)

Independent Person authorized to sign the financial statements Ms. Nguyen Thu Ha (Appointed on 12 April 2013) Member (According to Authorization Letter No. 111/2012/QD-TPB.HDQT dated Mr. Pham Cong Tu Member (Appointed on 12 April 2013) Mr. Nguyen Hung General Director 10 August 2012 of the Chairman)

Mr. Phan Tuan Anh Member (Appointed on 12 April 2013)

Mr. Kento Tokimori Member (Appointed on 21 April 2017)

Mr. Ha Hong Sik Member (Resigned on 21 April 2017)

40 tpb.vn GENERAL INFORMATION GENERAL INFORMATION (continued)

THE BANK BOARD OF SUPERVISIONS

Name Position Date of appointment/resignation (Appointed on 15 September 2012) Mr. Khuc Van Hoa Deputy General Director (Reappointed on 01 July 2017)

Mr. Do Minh Phu Chairman (Appointed on 12 April 2013) (Appointed on 09 September 2014) Ms. Bui Thi Thanh Huong Deputy General Director (Reappointed on 01 July 2017)

Mr. Le Quang Tien Vice Chairman (Appointed on 12 April 2013) Mr. Dinh Van Chien Deputy General Director (Appointed on 15 April 2016)

Ms. Le Cam Tu Chief Accountant (Appointed on 26 April 2013) Mr. Do Anh Tu Vice Chairman (Appointed on 12 April 2013)

Mr. Shuzo Shikata Vice Chairman (Appointed on 13 May 2016)

Mr. Phan Tuan Anh Member (Appointed on 12 April 2013)

Mr. Kento Tokimori Member (Appointed on 21 April 2017)

Mr. Ha Hong Sik Member (Resigned on 21 April 2017)

ANNUAL REPORT 2017 41 STATEMENT OF THE BOARD OF MANAGEMENT INDEPENDENT AUDITORS’ REPORT No.: 433/VN1A - HN - BC

The Board of Management of Tien Phong Commercial Joint Stock Bank (the “Bank”) presents this report together with the To: The Shareholders The Boards of Directors and Management Bank’s financial statements for the year ended 31 December 2017. Tien Phong Commercial Joint Stock Bank BOARD OF MANAGEMENT’S STATEMENT OF RESPONSIBILITY We have audited the accompanying financial statements of Tien Phong Commercial Joint Stock Bank (the “Bank”), prepared on 15 January 2018 as set out from page 06 to page 61, which comprise the balance sheet as at 31 December 2017, the income statement, the cash flow statement for the year then ended, and a summary of significant accounting policies and The Board of Management of the Bank is responsible for preparing the financial statements, which give a true and fair view of other explanatory information. the financial position of the Bank as at 31 December 2017 and its financial performance and its cash flows for the year then Management’s Responsibility for the Financial Statements ended, in accordance with Vietnamese Accounting Standards, accounting regime applicable to credit institutions in Vietnam and legal regulations relating to financial reporting. In preparing these financial statements, the Board of Management is Management is responsible for the preparation and fair presentation of these financial statements in accordance with required to: Vietnamese Accounting Standards, accounting regime applicable to credit institutions in Vietnam and legal regulations relating to financial reporting and for such internal control as management determines is necessary to enable the preparation Select suitable accounting policies and then apply them consistently; of financial statements that are free from material misstatement, whether due to fraud or error. Make judgments and estimates that are reasonable and prudent; Auditors’ Responsibility State whether applicable accounting principles have been followed, subject to any material departures disclosed and Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in explained in the financial statements; accordance with Vietnamese Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Bank will misstatement. continue in business; and An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial Design and implement an effective internal control system for the purpose of properly preparing and presenting the statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material financial statements so as to minimize errors and frauds. misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Bank’s preparation and fair presentation of the financial statements in order to The Board of Management of the Bank is responsible for ensuring that proper accounting records are kept, which disclose, design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the with reasonable accuracy at any time, the financial position of the Bank and that the financial statements comply with effectiveness of the Bank’s internal control. An audit also includes evaluating the appropriateness of accounting policies Vietnamese Accounting Standards, accounting regime applicable to credit institutions in Vietnam and legal regulations used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation relating to financial reporting. The Board of Management is also responsible for safeguarding the assets of the Bank and of the financial statements. hence for taking reasonable steps for the prevention and detection of frauds and other irregularities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. The Board of Management confirms that the Bank has complied with the above requirements in preparing these financial Opinion statements. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Bank as at 31 December 2017, and its financial performance and its cash flows for the year then ended in accordance with Vietnamese Accounting Standards, accounting regime applicable to credit institutions in Vietnam and legal regulations relating to financial reporting. Other matter The financial statements of the Bank for the year ended 31 December 2016 were audited by another independent auditor For and on behalf the Board of Management, who expressed an unmodified opinion on those statements dated 13 March 2017.

Mr Nguyen Hung Khuc Thi Lan Anh Do Hong Duong General Director Deputy General Director Hanoi, 15 January 2018 Auditor Audit Practising Registration Audit Practising Registration Certificate Certificate No. 0036-2018-001-1 No 2393 -2015-001-1 DELOITTE VIETNAM COMPANY LIMITED 42 tpb.vn 15 January 2018 Hanoi, S.R. Vietnam STATEMENT OF THE BOARD OF MANAGEMENT INDEPENDENT AUDITORS’ REPORT No.: 433/VN1A - HN - BC

Mr Nguyen Hung Khuc Thi Lan Anh Do Hong Duong General Director Deputy General Director Hanoi, 15 January 2018 Auditor Audit Practising Registration Audit Practising Registration Certificate Certificate No. 0036-2018-001-1 No 2393 -2015-001-1 DELOITTE VIETNAM COMPANY LIMITED 15 January 2018 ANNUAL REPORT 2017 43 Hanoi, S.R. Vietnam BALANCE SHEET BALANCE SHEET (continued) As at 31 December 2017 As at 31 December 2017

Closing balance Opening balance Closing balance Opening balance Notes Notes milion VND milion VND milion VND milion VND

ASSETS Cost 355,912 239,253

Cash, gold and gemstones 2 1,176,978 815,148 Accumulated depreciation (181,020) (138,867)

Balances with the State Bank of Vietnam ("SBV") 3 2,364.130 1,362,317 Intangible assets 75,880 43,988

Placements with and loans to other credit institutions 4 22,589,779 23,784,661 Cost 162,708 103,947

Placements with other credit institutions 22,189,779 19,237,389 Accumulated amortization (86,828) (59,959)

Loans to other credit institutions 400,000 4,547,272 Other assets 8,944,035 3,381,792

Provisions for losses - - Other receivables 6,469,536 1,768,738

Derivative financial instruments and other financial assets - 29,149 Interest and fee receivables 1,271,770 1,310,216

Loans to customers 62,747,997 46,233,626 Other assets 1,239,829 1,191,527

Loans to customers 5 63,422,643 46,642,977 Provisions for impairment of other balance sheet items (37,100) (888,689)

Provisions for credit losses of loans to customers (674,646) (409,351) TOTAL ASSETS 124,118,747 106,311,115

Debts purchased 6 580,054 677,530

Debts purchased 584,605 682,805

Provision for credit losses of debts purchased (4,551) (5,275)

Investment securities 7 25,465,002 29,882,518

Available-for-sale investment securities 24,938,137 29,175,883

Held-to-maturity investment securities 994,187 1,019,638

Provisions for impairment of investment securities (467,322) (313,003)

Fixed assets 250,772 144,374

Tangible fixed assets 174,892 100,386

44 tpb.vn BALANCE SHEET BALANCE SHEET (continued) As at 31 December 2017 As at 31 December 2017