Annual Report 2016

ANNUAL REPORT 2016

ANNUAL REPORT BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM JSC

BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM JSC

Head o ce: Address: 35 Hang Voi, Hoan Kiem, Hanoi Tel: (84) 4 2220 5544 Fax: (84) 4 2222 5302

Hotline: 19009247

Visit website: www.investor.bidv.com.vn or scan QR code: Download Apps at: IOS/Android: Type and search keyword "BIDV annual report 2016" Years Founded under the name of Bank for Construction of Vietnam under the Ministry of Finance, BIDV has after 60 years become the largest commercial bank in Vietnam by assets. As of 31 December 2016, BIDV had total assets of over VND1 quadrillion (equivalent to nearly USD50 billion), topping the commercial banks in Vietnam, among Top 30 ASEAN banks and Top 500 banks globally, Top 2000 world’s largest and most powerful listed companies as voted by Forbes Magazine (USA). BIDV is the bank with the most valuable bank brand according to Brand Finance’s report. BIDV’s total operating capital reached nearly VND940 trillion (or nearly USD46 billion) , accounting for about 13% of market share of Vietnam’s banking sector. Total outstanding loans and investments reached nearly VND950 trillion (equivalent to nearly USD47 billion), accounting for 13.6% of market share of Vietnam’s banking sector. BIDV has been among Top 10 Vietnamese enterprises contributing the most to the State Budget for years. 26/04/1957 - 26/04/2017 BIDV’s Annual Report 2016 was prepared in accordance with the Ministry of Finance’s Circular 155/2015/TT-BTC dated 06 October 2015 on information disclosure. BIDV also comprehensively integrated a Sustainable Development Report in the annual report in compliance with guidance of the Global Reporting Initiative on preparing sustainable development report - version G4 issued in 2013.

CONTENT

REPORT FROM THE BOARD OF 2016 MESSAGE 01 2016 CORPORATE PROFILE 02 04 CORPORATE GORVERNANCE 06 MANAGEMENT 02 Message from the Board of Directors 17 General Information 84 The Board of Directors 05 10 highlights in 2016 17 Credit Ratings 66 Business environment and results in 2016 90 Performance of the Supervisory Board in 2016 10 Key performance indicators 18 Formation and Development Milestones 67 Financial Performance 92 Trading transactions, remunerations and bene ts of the Board of Directors and Supervisory Board 12 Awards and recognitions 20 Business sectors and geographical distribution 68 Improvement in organizational structure, corporate governance and management policy 22 Organizational structure 72 2017 business plan 24 Board of Directors 28 Board of Management 32 Supervisory Board EVOLVING EXPANDING 33 Development Orientation for 2016-2020 INNOVATION 35 Risk factors GLOBALLY SHAPING VALUES

OUTSTANDING GROWTH

2016 BUSINESS PERFORMANCE 03 DIRECTORS’ REPORT 05 SUSTAINABLE DEVELOPMENT REPORT

42 2016 Business Operation 76 Operation results in 2016 96 Overview 45 Human resources 80 Board of Management’s performance evaluation 99 Message from the BOD on sustainable development 48 Investments and the performance of projects 80 Board of Directors’ orientation for 2017 100 Sustainable economic growth 62 Financial performance 105 Investment for community development 63 Ownership Structure and Changes in Shareholders’ Equity 116 Contribution to improve the environment 120 Information Announcement under GRI4 SPREADING standards VALUES FINANCIAL REPORTS

HEIGHTENING 127 Financial reports POSITION CONTENT

OUTSTANDING GROWTH

2016 BUSINESS PERFORMANCE 03 DIRECTORS’ REPORT 05 SUSTAINABLE DEVELOPMENT REPORT

HEIGHTENING 127 Financial reports POSITION

EVOLVING INNOVATION 1

2016 MESSAGE

MESSAGE FROM THE BOARD OF DIRECTORS

10 HIGHLIGHTS IN 2016

KEY PERFORMANCE INDICATORS

AWARDS AND RECOGNITIONS

BIDV - ANNUAL REPORT 2016 01 MESSAGE FROM THE BOARD OF DIRECTORS

Dear valued shareholders, customers and partners, The year 2016 has concluded with the economy maintaining its momentum of recovery, successfully overcoming difficulties despite of many challenges due to natural disasters, environmental incident and soaring public debts amid the slow recovery of the world economy. Given these unfavourable economic situations, Vietnam’s banking sector has gained significant successes: securing the liquidity of credit institutions; stabilising interest rates; curbing inflation; achieving positive credit growth; and stabilising exchange rates and the gold market. Taking the pioneering role and proactively contributing to the renovation of the country and the banking sector, and with positive changes in governance, BIDV sustained a safe and effective pace of growth in 2016, ensuring the interests of employees and shareholders were met. At the end of 2016, BIDV became the first joint-stock commercial bank to achieve total assets of more than VND1 quadrillion, up 18.3% against 2015. The bank’s total fundings reached VND940,020 billion, of which deposits mobilised from residents and organisations reached VND797,689 billion, an increase of 21.1% from 2015 and accounting for 12.5% of the sector’s total market share; total outstanding loans to the economy reached VND751,448 billion, up 17.85% against 2015, making up 13.6% of the sector's market share; non-performing loan ratio was controlled at 1.95%; and profit before tax reached VND7,709 billion, up 3.16% from 2015. ROA and ROE were 0.67% and 14.7% respectively; dividend payout ratio is expected to be 7%; and capital adequacy ratio complies with regulator’s requirements. BIDV has expanded its network, currently operating 190 local branches, 01 branch in foreign country (Myanmar) and 815 transaction offices to better serve the needs of customers. Its retail customer base has grown in accordance with the bank’s retail strategy, up 10% compared to 2015, reaching over 8.7 million customers and representing around 9.5% of Vietnam's population. BIDV was voted as the “Best Retail Bank in Vietnam” by the Asian Banker magazine for the third consecutive year and is the only bank in Vietnam to

02 MESSAGE FROM THE BOARD OF DIRECTORS 2016 MESSAGE

be honoured with the “Outstanding Retail Banking award in 2016” at Vietnam Banking Forum 2016. In addition, according to Nielsen Vietnam’s results, the relationship strength index (RSI) of BIDV jumped from “average” in 2015 to “strong” in 2016. BIDV’s joint ventures, affiliates and subsidiaries have seen strong changes in performance with profit meeting and exceeding set targets, delivering the task of preserving and growing capital. In 2016, BIDV successfully sold strategic shares of BIDV Finance Leasing Company to Sumitomo Mitsui Trust Bank; restructured BIDV Vietnam Partners Investment Management Joint Venture Company (BVIM); BIDV Securities Company achieved good results amid market volatility; BIDV Insurance Corporation continued to affirm its position amongst the Top 05 most prestigious insurance companies in Vietnam; and BIDV MetLife's bancassurance channel was successfully deployed across the system, making BIDV the bank with the most comprehensive insurance business in Vietnam. In 2016, BIDV continued to promote and achieve positive results in international business operations, contributing to strengthening economic and friendly relations between Vietnam and other countries. BIDV was the only Vietnamese bank approved to open a branch in Myanmar. The activities of BIDV's commercial presence in Laos, Cambodia, the Czech Republic, Russia and Taiwan (China) continue to be fine-tuned and remain positive. BIDV’s positive business results can be attributed to the successful restructuring of its portfolio of assets; its skilled control and handling of potentially risky assets and bad debts; the accelerated administrative reform; enhanced risk management capacity to meet Basel II standards; and its continued focus on restructuring and improving its governance capacity to meet international standards and practices. BIDV has attached importance to the application of modern information technology to its operations, maintaining the number-one position for the readiness of IT application in Vietnam. As a large commercial bank in the system, ensuring the highest rights and interests for shareholders is the guiding principle in BIDV's corporate governance. The bank has established good relationships with existing shareholders and partners interested in buying shares, strengthening the BIDV brand within the stock market. BIDV’s shares are the most liquid compared to similar peers, with an average of 1.4 million shares traded per session in 2016, higher than the average of listed banks at nearly 780,000 shares per session. In recognition of BIDV’s consistent efforts and achievements, in 2016, the financial community at the country and abroad highly commended the bank. Amongst the numerous awards and accolades received were Top 2000 world’s biggest public companies as voted by Forbes magazine; 11 fixed income awards from Asiamoney magazine; Best Domestic Trade Finance Bank in Vietnam 2017 by Euromoney magazine for the second time; Best Credit Card and Best Card Payment Service POS/ATM by the International Finance Magazine. Furthermore, the bank was recognised as “Vietnam Value” for the fifth consecutive year and named amongst the Top 15 largest companies in Vietnam.

BIDV - ANNUAL REPORT 2016 03 The world economy in 2017 still presents significant challenges, with many emerging economies experiencing slow growth; increased political risks exist following Brexit. In addition, it is predicted that 2017 will continue to be a difficult year for Vietnam’s economy given the uncertain movements of the market, climate change, limited national financial resources, and the requirement for accelerating restructuring in many areas. The country’s financial system is still highly dependent on the banking sector, with the likelihood of a reduction in lending rates remaining limited due to bad debts and inflation. The year 2017 also sees the implementation of the second phase of the financial system restructuring. Given the difficulties and challenges of the economy, BIDV has a strong sense of responsibility and awareness of the steps required. The bank is committed to “Sustainable development on the basis of strengthening financial capacity, improving the structure and quality of the asset portfolio, effectively managing bad debt, shifting the customer base, focusing on retail, small and medium enterprises and FDI companies; diversifying portfolios of products and services and developing all-in-one and high-tech bancassurance packages; continuing to perform tasks to the highest standard to support the country’s socio- economic development; and actively participating in the restructuring of credit institutions in the second phase according to the directions of the Government and the State Bank of Vietnam.” All of these aim to create a solid foundation for BIDV to maintain and affirm its leading role in the banking system, aiming to become a well- positioned bank in the region by delivering the highest international standards, and meeting the expectations of investors, shareholders and customers. The year 2017 is of great significance for BIDV, marking the 60th anniversary of the bank’s development alongside that of Vietnam. Building on previous achievements, the bank has developed and is set to implement the principles of “Discipline - Responsibility – Efficiency”, seizing opportunities, overcoming challenges, and excelling the 2017 business plan, thereby continuing to reaffirm the position, prestige, and image of a leading financial institution in Vietnam, with high competitiveness, reputation and image locally, regionally and globally. On behalf of the Board of Directors, I would like to thank you all for accompanying BIDV over the years. The bank is committed to continuing to provide products and services that better meet the needs of customers and delivering the best long-term value to shareholders. May I wish you continual development and success! Sincerely,

ON BEHALF OF THE BOARD OF DIRECTORS BOARD MEMBER IN CHARGE

TRAN ANH TUAN

04 10 HIGHLIGHTS IN 2016 2016 MESSAGE

CONTINUED STATUS AS THE LARGEST BANK IN VIETNAM, SERVING THE DEVELOPMENT 0101OF THE COUNTRY As of 31 December 2016, BIDV’s total assets reached VND1,006,404 billion, up 18.3 percent compared to 2015, continuing to top commercial banks in Vietnam. Total operating capital was VND940,020 billion of which capital mobilised from economic organisations and individuals was VND797,689 billion, up 21.1 percent, accounting for 12.5 percent of the banking sector’s market share. Total outstanding loans and investments reached nearly VND949,940 billion; of which outstanding loans to the economy were nearly VND751,448 billion, up 17.85 percent, accounting for 13.6 percent of the entire sector’s market share. Profit before tax stood at VND7,709 billion; non- performing loan ratio was 1.95 percent within the regulated rate. BIDV was among the top businesses contributing the highest amounts to the State budget. BIDV has been actively implementing measures to remove difficulties for production and doing business; supporting the market and local economic development. The bank has created favourable conditions for enterprises to access bank loans, particularly for small and medium-sized enterprises and start-up companies through 28 credit packages and credit products. The bank cut lending rates twice at competitive levels compared to the market. BIDV also participated in providing consultancy for local socio-economic development planning; as well as initiating and jointly organising seven investment promotion conferences in the country’s localities. BIDV has been honoured with the “Vietnam Value” award for the fifth year, awarded “Vietnam’s Excellent Brand”; and was named by Forbes as one of the top 2000 world's largest public companies; as well as being recognised by Asian Development Bank (ADB) as “The leading partner bank in Vietnam”.

0202 NETWORK REARRANGEMENT AND EXPANSION TO IMPROVE CUSTOMER SERVICE CAPACITY In 2016, BIDV rearranged and changed the business location of 12 branches, established 08 new branches and 16 transaction offices, increasing its network to 191 branches and 815 transaction offices, thereby ensuring better service to meet the needs of customers. A robust modern distribution channel was developed with 1,823 ATMs and 34,000 POS (an increase of nearly 8,000 POS year to date). Modern services with high-tech content such as internet banking and mobile banking were promoted, connecting payment with more than 1,000 agencies worldwide. BIDV’s customer base numbered 9 million; of which corporate customers reached 210,600 (up 17,900 compared to 2015); SME customers reached 198,000 (up 16,000 or 9% compared to 2015), accounting for 94% of total enterprise customers. FDI customers reached 2,620, up 12 percent against 2015. The bank’s individual customer base grew 10 percent compared to 2015, reaching over 8.7 million and accounting for about 9.5 percent of the country’s population. According to Nielsen Vietnam, Relationship Satisfaction Index (RSI) with BIDV significantly improved from “Average” in 2015 to “Strong” in 2016.

BIDV - ANNUAL REPORT 2016 05 0303 IT’S CONTRIBUTION TO THE STRONG DEVELOPMENT OF BIDV FOR THE PAST 25 YEARS Over the past 25 years, by applying information technology to business operations BIDV has become one of the banks with the strongest technology platform in Vietnam with more than 1,000 servers, 7,000 network devices, and 1,000 LAN networks operated by 700 skilled IT officers. BIDV continues to occupy the number one position in the country for the readiness of IT application. The bank’s IT has gradually met business and management requirements, and has played a key role in the bank’s service business development, improving the competitiveness, innovation and integration of BIDV. In 2016, BIDV received several prestigious awards: Third- class Labour Medal for its IT Centre, Sao Khue award for two products namely Home Banking and IMAP; and Vietnam Domestic Technology and Operations Bank of the Year award as voted by Asian Banking and Finance Magazine.

BEING THE BEST RETAIL BANK IN VIETNAM FOR TWO CONSECUTIVE YEARS; 0404 OUTSTANDING RETAIL BANK FOR 2016

BIDV has been named the Best Retail Bank in Vietnam 2016 by The Asian Banker magazine for two years in a row; Outstanding Retail Bank in 2016 by International Data Group and Vietnam Banks Association, as well as receiving two awards for Best Credit Card, Vietnam 2016 and Best Card Payment Service POS/ATM, Vietnam 2016 as voted by International Finance magazine. BIDV achieved good business results and maintained its leading position among commercial banks in terms of resident deposits, retail credit and cards. Capital mobilised from residents grew nearly 23 percent, reaching over VND395 trillion and accounting for nearly 54 percent of total deposits; retail credit increased by almost 32 percent, reaching VND185 trillion and accounting for over 25 percent of total outstanding loans. Modern retail distribution channels are strengthened towards safety and efficiency; increasing interaction with customers via internet banking, mobile banking, customer contact centre and a social media centre. BIDV currently has more than 100 products to serve individual customers.

06 10 HIGHLIGHTS IN 2016 2016 MESSAGE

0505 TREASURY OPERATION’S SIGNIFICANT CONTRIBUTIONS TO BANK PERFORMANCE Total net income from treasury operations in 2016 reached VND1,469 billion, up 61 percent against 2015, of which net income from currency trading and derivatives was over VND787 billion, and net revenue from self-trading activities was VND632 billion, an increase of 192 percent compared to 2015. BIDV conducted 6,100 transactions with total sales of VND900 trillion. In 2016, BIDV continued to be honoured and recognised by international organisations, receiving nearly 20 prestigious awards for treasury products. The bank received six awards for Best Domestic Provider of FX Services in Vietnam as voted by financial institutions for four consecutive years; three awards for Best FX Products and Services in Vietnam; Best for FX Options in Vietnam; and Best for FX Research & Market Coverage in Vietnam as voted by Corporates for the second consecutive year; the award Best Foreign Exchange Provider in Vietnam as voted by Global Finance.

FURTHER STRENGTHENING INTERNATIONAL BUSINESS, CONTRIBUTING TO FOSTERING THE 0606 ECONOMIC AND FRIENDLY RELATIONSHIPS BETWEEN VIETNAM AND OTHER COUNTRIES

In July 2016, BIDV opened a branch in Yangon, becoming the sole Vietnamese bank to open a branch in Myanmar, demonstrating its sustained and consistent efforts in promoting economic cooperation between Vietnam and Myanmar. The bank’s commercial presences in Laos, Cambodia, the Czech Republic, Russian Federation and Taiwan (China) continued to be fine-tuned and achieve positive results. BIDV initiated and co-organised 13 international economic cooperation programmes in preparation for Vietnam joining FTAs, the ASEAN economic community and connecting markets in Europe and Northeast Asia. The bank successfully co-organised a seminar on “Trade development and cooperation promotion between Vietnam and Russia”, as well as the conference “Four countries – One destination” in Myanmar. To date, BIDV has established relationships with more than 3,500 financial institutions domestically and internationally, providing services to more than 100 foreign banks, and establishing correspondent relationships with over 1,700 major financial institutions in 122 countries and territories.

BIDV - ANNUAL REPORT 2016 07 40 YEARS OF OPERATION AND CONTRIBUTION TO THE SOCIO-ECONOMIC 0707 DEVELOPMENT OF SOUTHERN VIETNAM Following Vietnam’s liberation, under Decision No. 580/TC- VP dated 15 November 1976 by the Ministry of Finance, 21 branches of BIDV were established in the South (from Binh Tri Thien southwards), opening a new chapter for the bank’s business operations. Over the past 40 years of development in the region, BIDV has been striving to grow in terms of both scale and quality. The bank’s network in the region has increased from 21 branches to 106 branches and 380 transaction offices with outstanding loans reaching nearly VND400 trillion to date. BIDV outperformed its roles in (i) providing credit, (ii) connecting businesses and promoting investment; (iii) providing consultancy on socio-economic development, and (iv) promoting social security. The bank has been accompanying and making significant contributions to the strong development of the entire region.

0808 FURTHER STRENGTHENING INSTITUTIONAL AND GOVERNANCE CAPACITY In 2016 four board directors retired, including Mr. Tran Bac Ha who stepped down from the highest position of board chairman from 1 September 2016. In his 35 years of working at the bank, with 13 of those holding the position of chief executive officer and chairman of the board, Mr. Tran Bac Ha made great contributions to the bank’s development. BIDV appointed one new senior executive vice president, 194 branch and department-level leaders and 1,465 division managers. The bank organised over 400 training courses for nearly 25,000 turns of trainees. The bank has focused on improving risk management capabilities in accordance with Basel II standards; continued to promote restructuring and improve governance to meet international best practices and standards. BIDV evaluated and restructured its organisational model and the responsibilities of units at headquarters and member units. BIDV was the first financial institution to issue a full set of capability framework documents to serve human resource development.

08 10 HIGHLIGHTS IN 2016 2016 MESSAGE 0909 RESTRUCTURING AND IMPROVING THE EFFICIENCY OF AFFILIATES AND SUBSIDIARIES BIDV implemented the strategic sale of shares of its financial leasing company to Sumitomo Mitsui Trust Bank and transformed the operating model of the company into a joint venture with the new name BIDV Sumi Trust Financial Leasing Co., Ltd. The bank completed the divestment from VID Public Bank, ensuring the requirements of BIDV’s restructuring scheme and non-core divestment roadmap at the request of the Government. BIDV implemented the restructuring of the BIDV - Vietnam Partners Investment Management JVC (BVIM); and resumed the operation of BIDV Asset Management Company (BAMC). BIDV Securities Company (BSC) achieved positive results despite of market volatility, maintaining its position among the top ten by market share and top three by bond market share. BIDV Insurance Corporation (BIC) continued to strengthen its position, ranking fifth among the top ten most prestigious insurance companies in Vietnam; top eight leading insurance companies by market share; and top five insurers with the highest profitability rates in the market. The bancassurance channel of BIDV MetLife was successfully deployed across the BIDV system, making BIDV the bank with the most comprehensive insurance operations in Vietnam.

CONTINUING FOSTERING CORPORATE CULTURE, RESPONSIBILITY TOWARD EMPLOYEES 1010 AND THE COMMUNITY, LOOKING TOWARDS THE 60TH ANNIVERSARY OF THE BANK

BIDV’s Credit Contest 2016 attracted nearly 1,200 contestants and thousands of supporting employees. The Best Cashier Contest 2016 received the participation of 4,000 employees across the BIDV system. These contests provided motivation for further study and knowledge strengthening as well as scouting talented BIDV employees for career development opportunities. Programmes such as a bank-wide sports festival, and art performances at branch and regional level brought excitement, interest and new experiences for employees; encouraging participation in sport and exercise to improve physical health and nurturing employees’ healthy spiritual lives. Employees across the system become more united, sharing mutual support and love – the spiritual values which are at the core of BIDV. BIDV continued to maintain and foster a professional working environment for the sake of human development; ensuring jobs, income and career opportunities for employees. The bank continued to provide support for the community through social security activities and community development programmes. Total funds committed to social security amounted to about VND300 billion. The bank completed and handed over 64 educational facilities/programmes; 16 clinics; 50 ambulances, and 794 houses for the poor. In addition, BIDV continued gratitude-showing activities, giving Tet gifts to the poor, scholarships to disadvantaged students and free heart surgery to children from poor families. BIDV also actively implemented social security activities in Laos, Cambodia and Myanmar.

BIDV - ANNUAL REPORT 2016 09 KEY PERFORMANCE INDICATORS

TOTAL ASSETS TOTAL OPERATING INCOME

Unit: VND billion Unit: VND billion 1,006,404 30,434

850,670 24,712

21,906 650,340 19,163 548,386 16,677 484,785

2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Average growth in Average growth in the period 2012-2016 20.0% the period 2012-2016 16.2%

OWNERS’ EQUITY LOANS TO CUSTOMERS

Unit: VND billion Unit: VND billion 44,144 7,709 42,335 7,473 6,229 5,901 723,697 6,297 32,039 33,271 598,434 5,290 4,985 26,494 4,325 4,051 445,693 391,035 3,281 339,923

2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Average growth in Average growth in the period 2012-2016 13.6% the period 2012-2016 20.8%

DEPOSITS CONTRIBUTIONS TO STATE BUDGET

Unit: VND billion Unit: VND billion 797,689 2,544 2,433 1.2 25 658,701 1,945 1.0 20 488,860 0.83% 15.50% 407,560 0.79% 15.27% 1,266 1,267 0.74% 0.78% 0.67% 12.90% 13.80% 14.7% 351,456 0.8 15

0.6 10

0.4 5 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Average growth in Average growth in 0 0 the period 2012-2016 22.7% the period 2012-2016 19.0% 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016

10 KEY PERFORMANCE INDICATORS 2016 MESSAGE

1,006,404 30,434

850,670 24,712

21,906 650,340 19,163 548,386 16,677 484,785

2012 2013 2014 2015 2016 2012 2013 2014 2015 2016

PROFIT BEFORE TAX PROFIT AFTER TAX

Unit: VND billion Unit: VND billion 44,144 7,709 42,335 7,473 6,229 5,901 723,697 6,297 32,039 33,271 598,434 5,290 4,985 26,494 4,325 4,051 445,693 391,035 3,281 339,923

2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Average growth in Average growth in the period 2012-2016 15.5% the period 2012-2016 17.4%

ROA ROE

Unit: % Unit: %

797,689 2,544 2,433 1.2 25 658,701 1,945 1.0 20 488,860 0.83% 15.50% 407,560 0.79% 15.27% 1,266 1,267 0.74% 0.78% 0.67% 12.90% 13.80% 14.7% 351,456 0.8 15

0.6 10

0.4 5 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 0 0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016

BIDV - ANNUAL REPORT 2016 11 SELECTED AWARDS AND RECOGNITIONS

BRANDING for the State budget through Year awarded by Asian Banking issuance of government bonds. & Finance Magazine. Vietnam Value awarded by the Ministry of Industry and Trade. CARD CUSTOMER CARE

RETAIL BANKING Best Credit Card, Vietnam Best Social Media Team 2016 awarded by International awarded by CMO Asia. Best Retail Bank in Vietnam Finance Magazine (IFM). Highly commended award: awarded by Asian Banker Best Credit Cards Vietnam 2016 Excellence in Social Media – Magazine. awarded by Global Banking Customer relations & Brand Best Mortgage Product in and Finance Review (GBAF). engagement from Retail Vietnam 2016 awarded by Banker International. Best Card Payment Service Asian Banker Magazine. POS/ATM, Vietnam 2016 Outstanding Retail Bank 2016 awarded by International FINANCIAL INSTITUTIONS awarded by IDG Group. Finance Magazine (IFM). Leading Partner Bank in TREASURY INFORMATION TECHNOLOGY Vietnam awarded by Asian Development Bank. Best Domestic FX Provider Third-class Labor Medal Straight Through Processing in Vietnam awarded by awarded by the President awarded by Wells Fargo. Asiamoney Magazine. of the Socialist Republic of Vietnam. Best Bond House in Vietnam PAYMENT awarded by The Asset Sao Khue Award from Vietnam Magazine. Software and IT Services Sao Khue Award for BIDV’s Association (Vinasa). IMAP product. Certificate of Merit awarded by the Ministry of Finance for the Vietnam Domestic Technology excellence in mobilizing capital and Operations Bank of the

12 2016 MESSAGE 2016 MESSAGE

BIDV - ANNUAL REPORT 2016 13 14 OUTSTANDING GROWTH 2

2016 CORPORATE PROFILE

GENERAL INFORMATION

CREDIT RATINGS

FORMATION AND DEVELOPMENT MILESTONES

BUSINESS SECTORS AND GEOGRAPHICAL DISTRIBUTION

ORGANIZATIONAL STRUCTURE

BOARD OF DIRECTORS

BOARD OF MANAGEMENT

SUPERVISORY BOARD

DEVELOPMENT ORIENTATION FOR 2016-2020

RISK FACTORS

BIDV - ANNUAL REPORT 2016 15 16 GENERAL INFORMATION

GENERAL INFORMATION ABOUT BIDV PROFILE 2016 CORPORATE

Full name: Joint Stock Commercial Bank for Investment and Development of Vietnam International transaction name: Joint Stock Commercial Bank for Investment and Development of Vietnam Abbreviated name: BIDV SWIFT code: BIDVVNVX Charter Capital: VND 34,187,153,340,000 Address: BIDV Tower, 35 Hang Voi street, Hoan Kiem district, Hanoi Member in charge of the BOD: Tran Anh Tuan Chief Executive Officer: Phan Duc Tu Telephone: 84-4-22205544 Fax: 84-4-22200399 Website: www.bidv.com.vn Business registration number: 0100150619 Auditor: Deloitte Vietnam Company Limited Stock code: BID Par value: VND 10,000 Total number of shares: 3,418,715,334

CREDIT RATINGS 2016

MOODY’S STANDARD&POOR’S

Ratings Results Ratings Results

Long-term Deposit ratings - Local Long-term Issuer Credit Ratings B+ Currency/Foreign Currency B1/B2

Long-term Issuer Ratings - Local Short-term Issuer Credit Ratings B Currency/Foreign Currency B1

Outlook Stable Outlook Stable

BIDV - ANNUAL REPORT 2016 17 23/5/2015

24/01/2014

Renamed as Bank for Investment and 01/5/2012 Development of Vietnam (BIDV)

Established as Bank for Renamed as Bank for Investment Construction of Vietnam, under and Construction of Vietnam, Ministry of Finance under State Bank of Vietnam 18/11/1990

26/4/1957 24/6/1981

18 Mekong Housing Bank was merged into BIDV system

23/5/2015

Officially listed on Ho Chi Minh Stock Exchange

24/01/2014

Equitization implemented, officially converted into Joint Stock Commercial Bank for Investment and Development of Vietnam

01/5/2012

18/11/1990

26/4/1957 24/6/1981 FORMATION AND DEVELOPMENT MILESTONES

BIDV - ANNUAL REPORT 2016 19 BUSINESS SECTORS AND GEOGRAPHICAL DISTRIBUTION

MAIN BUSINESS SECTORS

Credit related activities (lending, discount, guarantee, credit card issuance, etc); Fund mobilization (savings deposit, bond, debenture); Trade finance services; Payment services (domestic and international payment); Account services; Bank card services; Other services as per Certificate of Business Registration, etc

Russia

Czech public Myanmar

Taiwan Hong Kong (China) (China) Lao Cambodia

20 BUSINESS SECTORS AND GEOGRAPHICAL DISTRIBUTION 2016 CORPORATE PROFILE 2016 CORPORATE

GEOGRAPHICAL DISTRIBUTION

BIDV HAS WIDELY DEVELOPED TRADITIONAL AND MODERN NETWORK, DISTRIBUTED THROUGHOUT 63 PROVINCES AND CITIES NATIONWIDE. AS OF 31DEC2016, BIDV’S NETWORK CONSISTED OF:

01 Head Office; 190 branches in Vietnam and 01 branch in Myanmar; 815 transaction offices; 02 dependent units (Information Technology Center, BIDV Training School); 03 representative offices in Vietnam (Hochiminh city, Danang and Cantho); 06 representative offices in foreign countries (Cambodia, Myanmar, Laos, Czech, Taiwan, Russian Federation); Subsidiaries (BIDV Financial Leasing Company Ltd-BLC, BIDV Asset Management Company-BAMC, BIDV Securities Joint-Stock Company-BSC, BIDV Insurance Corporation-BIC, BIDV International Holdings Limited –BIDVI, , Bank for Investment and Development of Cambodia Plc – BIDC, Lao – Viet Insurance Joint Venture Company – LVI,..).

Hà Giang Broad operating network helps BIDV access a large customer Cao Lào Cai base nationwide; provide various services for diverse customer

Yên Bái Thái Nguyên V Trì segments from individuals, households to different types of Móng Cái a enterprises and organizations: Hoà Bình ý Ninh Bình

Thanh Hoá Thái Hoà 34 branches in Hanoi

a Lò Vinh

Hà T 36 branches in Hochiminh 18 branches in outside North Power region of Hanoi Tr

a V 6 branches in Red River Delta region n

Tam K i 17 branches in North mountainous region

Pleiku An Khê An Nam 14 branches in North Central Coast region

Tuy Hoà

Buôn Ma t 15 branches in South Central Coast region Ninh Hoà

Nha Trang

Cam Ranh Tr a 13 branches in Central Highland Phan Rang (Khánh Hoà - V Tây Ninh

Phan 18 branches in outside South Power region of Hochiminh c Long Xuyên Tho V Tau Th Trà Vinh 19 branches in Mekong River Delta region Sóc Tr g Cà Mau

Cô o

BIDV - ANNUAL REPORT 2016 21 ORGANIZATIONAL STRUCTURE

ORGANIZATIONAL CHART

BIDV Các Ban/ BIDVC ácMetLife Ban/ Life Các Ban/ Departments/Centers Vietnam Aircraft Financial Leasing Insurance Limited of Head O ce Leasing Company Company Ltd Liability Company

BIDV Asset Branches/Transaction Lao-Viet Management Centers Joint-Venture Bank Company BAMC Representatives Vietnam-Russia BIDV International O ces Joint-Venture Bank Holdings Ltd. in HongKong Information BIDV-Vietnam Các Ban/ Technology Center Partners Investment Management Joint- BIDV Insurance Venture Company BIDV P Corporation Training School BIDV Tower Joint-Venture BIDV Securities Company Joint-Stock Company

Lao-Viet Insurance Joint-Venture Company (*) (*) indirect ownership via subsidiary

Bank for Investment and Development of Cambodia Plc - BIDC

22 ORGANIZATIONAL STRUCTURE

MANAGERIAL CHART

PROFILE 2016 CORPORATE

BIDV Các Ban/ BIDVC ácMetLife Ban/ Life Các Ban/ Departments/Centers Vietnam Aircraft Financial Leasing Insurance Limited of Head O ce Leasing Company Company Ltd Liability Company BIDV Các Ban/ BIDVC ácMetLife Ban/ Life Các Ban/ Departments/Centers Vietnam Aircraft Financial Leasing Insurance Limited of Head O ce Lao-Viet Leasing Company CompanyBIDV Asset Ltd Branches/Transaction Liability Company Management Centers Joint-Venture Bank Company BAMC BIDV Asset Branches/Transaction Lao-Viet Representatives Vietnam-Russia Management Centers Joint-Venture Bank O ces Joint-Venture Bank BIDVCompany International BAMC Holdings Ltd. in HongKong Representatives Vietnam-Russia Information BIDV-Vietnam O ces Joint-VentureCác Ban/ Bank BIDV International Technology Center Partners Investment Holdings Ltd. Management Joint- BIDVin HongKong Insurance Venture Company Information PBIDV-Vietnam Corporation BIDV Các Ban/ Technology Center Partners Investment Training School Management Joint- BIDV Insurance VentureBIDV CompanyTower BIDV PJoint-Venture Corporation BIDV Securities Training School Company Joint-Stock Company BIDV Tower Joint-Venture BIDV Securities Company Joint-Stock Company Lao-Viet Insurance Joint-Venture Company (*) Lao-Viet Insurance (*) indirect ownership via subsidiary Joint-Venture Bank for Investment Company (*) and Development (*) indirect ownership via subsidiary of Cambodia Plc - BIDC Bank for Investment and Development of Cambodia Plc - BIDC ORGANIZATIONAL CHART OF BRANCHES

BIDV - ANNUAL REPORT 2016 23 BOARD OF DIRECTORS

Mr. Tran Anh Tuan Member in charge of operating Born in 1958. the BOD Master of Business Administration. Joined BIDV in 1981. Being appointed as Member of the BOD, CEO of Bank for Investment and Development of Vietnam in January 2008 and elected as Member of the BOD of Joint- stock Commercial Bank for Investment and Development of Vietnam since May 1st, 2012; elected to be in charge of operating the Board of Directors of BIDV since September 01st, 2016. Previously, CEO; SEVP; EVP, Gia Lai - Kon Tum Branch Manager, EVP, Gia Lai Branch Manager.

Mr. Dang Xuan Sinh Member

Born in 1957. Graduated from University of Finance and Accountancy. Being elected as Member of the BOD of the Joint - Stock Commercial Bank for Investment and Development of Vietnam since May 23th, 2015. Previously, Member of the BOD of Mekong Housing Bank.

Board of Directors (BOD) is the highest authority, acting in the name of BIDV in terms of making decisions, exercising rights and obligations of BIDV which are out of jurisdiction of Shareholders’ General Meeting. The BOD also has responsibility of defining business administration plans and making policies relating to business strategies and overall development plans of BIDV.

24 Independent Member To NgocHung Mr. CEO, Member TuDuc Phan Mr.

Previously, Director, Vice Director, Academy. Banking Bank for of Investment andDevelopment Vietnam 17 sinceApril -Stock oftheBODJoint Commercial asMember elected Being People's Teacher, Associate Professor, PhD inEconomics. in 1955. Born Branch Manager. Previously, SEVP;SVP, Head, HumanResources; EVP, QuangNgai BIDV Also, ofthe Chairman Association.Vietnam Bankers 1 since May -Stock Commercial Bankfor of Investment andDevelopment Vietnam oftheBOD, asMember elected Being Joint of ChiefExecutive Officer in1987. BIDV Joined ofBusinessAdministration.Master in1964. Born

st Mr Huynh Nam Dung and Mr Nguyen Phuoc HuynhNam Dung andMr Mr policy. , 2012.

Hoa have beensuspendedfrom thepositionof BOD dismissedto retire undersocialinsurance Member of the BOD since January 29 oftheBODsinceJanuary Member

Ms.Nguyen Thi Kim ofthe Thanh –Member Mr. Le oftheBOD, DaoNguyen –Member Mr. Tran oftheBOD, BacHa–Chairman Mr. Tran Anh Tuan to waselected bein Director in2016: Director charge ofoperatingtheBoard of Directors of BIDV sinceSeptember Directors ofBIDV Changes oftheBoard of 01 st BOARD OFDIRECTORS , 2016. BIDV -ANNUAL 2016 REPORT th , 2016. th , 2015. 25

2016 CORPORATE PROFILE Mr. Nguyen Huy Tua Member Born in 1957. Bachelor of Engineering from Sofia University of Construction and Architecture Bulgaria, Master of Business Administration. Joined BIDV in 1984. Being appointed as Member of the BOD of the Bank for Investment and Development of Vietnam in October 2006 and elected as Member of the BOD of the Joint- Stock Commercial Bank for Investment and Development of Vietnam since May 1st 2012. Previously, EVP, BIDV Transaction Center III Manager; SVP, Head, Credit Management.

Mr. Tran Thanh Van Born in 1961. Member Bachelor of Economics. Joined BIDV since 1983. Being elected as Member of the BOD of the Joint - Stock Commercial Bank for Investment and Development of Vietnam since April 26th 2013. Also, Member of central committee, standing committee of Association of Vietnamese Investors in Cambodia (AVIC), Chairman of the BOD of BIDV Tower Joint Venture Company. Previously, Senior Executive Vice President, Joint Stock Commercial Bank for Investment and Development of Vietnam; EVP, BIDV Da Nang Branch Manager; EVP, BIDV Da Nang Branch Deputy Manager; EVP, Quang Nam-Da Nang Branch Deputy Manager of Bank for Investment and Construction.

Mr. Ngo Van Dung Member Born in 1968. Master of Finance and Banking. Joined BIDV in 1998. Being elected as Member of the BOD of the Joint - Stock Commercial Bank for Investment and Development of Vietnam since June 1st 2015. Also, Vice President of BIDV – Vietnam Partner Investment Management (BVIM). Previously, SVP, Head, Risk Management; EVP, BIDV Hanoi Branch Manager.

26 BOARD OF DIRECTORS

Ms. Le Thi Kim Khuyen Member Born in 1963. 2016 CORPORATE PROFILE 2016 CORPORATE Master of Business Administration. Joined BIDV in 1986. Being elected as Member of the BOD of Joint - Stock Commercial Bank for Investment and Development of Vietnam since May 1st ,2012. Also, Chairman of the BOD of BIDV one-member Limited Liability Financial Leasing Company (BLC), Chairman of the BOD of BIDV one- member Limited Liability Assets Management Company (BAMC) . Previously, EVP, BIDV Transaction Center I Manager; EVP, BIDV Bac Hanoi Manager.

Ms. Phan Thi Chinh Member Born in 1968. Master of Business Administration. Joined BIDV in 1991. Being elected as Member of the BOD of Joint - Stock Commercial Bank for Investment and Development of Vietnam since April 25th , 2014 Also, Member of the BOD of BIDV Tower Joint Venture Company Previously, Senior Executive Vice President, Joint Stock Commercial Bank for Investment and Development of Vietnam; SVP, Head, BIDV Finance.

Mr. Nguyen Van Loc Member

Born in 1959. Master of Economics. Being elected as Member of the BOD of Joint - Stock Commercial Bank for Investment and Development of Vietnam since May 23th, 2015. Previously, Member of the BOD of Mekong Housing Bank.

BIDV - ANNUAL REPORT 2016 27 BOARD OF MANAGEMENT

Mr. Phan Duc Tu CEO Born in 1964. Master of Business Administration. Joined BIDV in 1987. Being elected as Member of the BOD, Chief Executive Officer of Joint -Stock Commercial Bank for Investment and Development of Vietnam since May 1st 2012. Also, Chairman of Vietnam Bankers Association. Previously, SEVP; SVP, Head, Human Resources; EVP, BIDV Quang Ngai Branch Manager.

Mr. Quach Hung Hiep Senior Executive Vice President Born in 1969. PhD in Economics. Joined BIDV in 1991. Being appointed as SEVP in October 2010 and as SEVP of the Joint Stock Commercial Bank for Investment and Development of Vietnam since May 1st 2012. Also, Vice President of Vietnam Bond Market Association. Previously, EVP, BIDV Transaction Center III Manager, SEVP of Lao – Viet Joint Venture Bank; SVP, Head, Treasury; EVP, BIDV Transaction Center Deputy Manager.

Mr. Tran Luc Lang Senior Executive Vice President Born in 1967. Bachelor of Economic. Joined BIDV in 1991. Being appointed as SEVP in June 2011 and as SEVP of the Joint Stock Commercial Bank for Investment and Development of Vietnam since May 1st 2012. Also, Chairman of Lao-Viet Joint Venture Bank (LVB), Chairman of BIDV Insurance Corporation (BIC), Vice President of Golden Lotus Urban Development JSC. Previously, EVP, BIDV Phu Tai Branch, Manager; EVP, BIDV Binh Dinh Branch, Deputy Manager.

28 BOARD OF MANAGEMENT

Changes of BOM in 2016:

Mr. Nguyen Thien Hoang, SPV, Head of Human Resources of JSC. Bank for Investment PROFILE 2016 CORPORATE and Development of Vietnam is appointed to be SEVP of JSC. Bank for Investment and Development of Vietnam. The Decisions takes effect since 01/06/2016.

Mr. Pham Quang Tung, SEVP of JSC. Bank for Investment and Development of Vietnam is appointed to be Chairman of Vietnam Development Bank since 01/06/2016.

Mr. Tran Xuan Hoang Senior Executive Vice President Born in 1965. Master of Economic. Joined BIDV in 1989. Being appointed as SEVP of the Joint Stock Commercial Bank for Investment and Development of Vietnam since May 1st 2012. Also, Chairman of Mekong Housing Building and Realty Corporation (MHBR). Previously, SVP, Head, Human Resources; EVP, BIDV Transaction Center II Deputy Manager; EVP, BIDV Gia Lai Branch Deputy Manager.

Mr. Tran Phuong Senior Executive Vice President

Born in 1973. Master of Business Administration. Joined BIDV in 1997. Being appointed as SEVP of the Joint Stock Commercial Bank for Investment and Development of Vietnam since May 1st 2012. Also, Vice President of Vietnam Aircraft Leasing Company (VALC). Previously, SVP, Head, Corporate Planning; SVP, Head, Equitization Project Management.

BIDV - ANNUAL REPORT 2016 29 Mr. Doan Anh Sang Senior Executive Vice President Born in 1961. Bachelor of Economics (Banking University of Hochiminh City). Joined BIDV in 1983. Being appointed as SEVP of the Joint Stock Commercial Bank for Investment and Development of Vietnam since Jan 15th 2013. Also, Chairman of BIDV Securities Joint Stock Company (BSC). Previously, EVP, BIDV transaction Center II, Manager; EVP, BIDV Binh Dinh Branch, Manager;

Mr. Le Ngoc Lam Senior Executive Vice President Born in 1975. Master of Economics. Joined BIDV in 1997. Being appointed as SEVP of Joint Stock Commercial Bank for Investment and Development of Vietnam since Jan 15th 2015. Also, Member of Central Committee of the Vietnam Chamber of Commerce and Industry. Previously, SVP, Head, Corporate Banking; SVP, Head, Credit Risk Management; EVP, BIDV Transaction No.1 Branch Deputy Manager;

Mr. Nguyen Thien Hoang Senior Executive Vice President

Born in 1973. Master of Business Administration. Joined BIDV in 1994. Being appointed as SEVP of Joint Stock Commercial Bank for Investment and Development of Vietnam since Jun 1st 2016. Previously, SVP, Head, Human Resources; EVP, BIDV Quang Binh Branch Manager.

30 BOARD OF MANAGEMENT

According to BIDV’s charter, Board of management (BOM) has the responsibility for day-to-day operation of BIDV, operated in the supervision of the BOD.

The BOM consists of committees, including Asset and liability

management committee, PROFILE 2016 CORPORATE Credit committee and Off- Balance sheet debt sale committee.

Mr. Le Kim Hoa Senior Executive Vice President Born in 1965. Master of Business Administration. Joined BIDV in 1987. Being appointed as SEVP of the Joint Stock Commercial Bank for Investment and Development of Vietnam since Sep 16th 2013. Also, Chairman of Bank for Investment and Development of Cambodia (BIDC). Previously, EVP, BIDV Hochiminh City Branch Manager; SVP, Head, Credit Risk Management; EVP, BIDV Dak Lak Branch Manager.

Mr. Le Trung Thanh Senior Executive Vice President Born in 1964. Master of Economics. Joined BIDV in 1992. Being appointed as SEVP of Joint Stock Commercial Bank for Investment and Development of Vietnam since July 15st 2014. Also, Chairman of BIDV MetLife Life Insurance Limited Liability Company. Previously, EVP, BIDV Nam Ky Khoi Nghia Branch Manager; EVP, BIDV An Giang Branch Deputy Manager.

Ms. Ta Thi Hanh Chief Accountant

Born in 1972 . Master of Economics. Joined BIDV in 1994. Being appointed as Chief Accountant of Joint Stock Commercial Bank for Investment and Development of Vietnam since May 1st 2012. Also, SVP, Head, Accounting. Previously, SVP, Head, Customer Services; EVP, BIDV Transaction Center I Deputy Manager.

BIDV - ANNUAL REPORT 2016 31 Supervisory Board members are elected by BIDV’s General meeting of shareholders, acting on behalf of shareholders SUPERVISORY to objectively and truly supervise and assess every business operation, BOARD corporate governance and financial status of BIDV. Supervisory Board bears responsibilities to General meeting of shareholders in terms of these obligations.

Ms. Vo Bich Ha Head of Supervisory Board

Born in 1967. Master of Business Management. Joined BIDV in 1991. Being elected as Head of Supervisory Board of Joint Stock Commercial Bank for Investment and Development of Vietnam since April 17th 2015. Previously, VP, Head, BIDV Investment; SVP, Head, BIDV Investment Management.

Ms. Nguyen Thi Tam Member

Born in 1965. Graduated from Maritime University, Master of Economics. Joined BIDV in 1991. Being elected as Member of BIDV Supervisory Board since May 1st 2012. Previously, VP, Head, BIDV Internal Control.

Mr. Cao Cu Tri Member

Born in 1966. Graduated from Hanoi Banking Academy, Master of Economics. Joined BIDV in 2002. Being elected as Member of BIDV Supervisory Board since May 1st 2012. Previously, SVP, Deputy Head, Internal Control; EVP, BIDV Transaction Center III Deputy Manager.

32 DEVELOPMENT ORIENTATION FOR THE PERIOD 2016 - 2020

DEVELOPMENT ORIENTATION FOR THE PERIOD 2016 - 2020 2016 CORPORATE PROFILE 2016 CORPORATE

KEY OBJECTIVES Improving the financial capacity and quality of assets to ensure the compliance with regulated safety ratios by the State Bank of Vietnam and meeting the international standards. Diversifying the ownership structure, gradually reducing the State's ownership ratio in accordance with regulated roadmap. Diversifying the customer base as well as products and services, promoting retail activities; increasing and developing small and medium enterprises, FDI enterprises base. Improving credit structure, controlling risk and improving credit quality, aiming to increase business efficiency essentially at a reasonable cost. Taking initiative, actively integrating deeply into the regional and international financial and banking markets. Complying with Qualified ASEAN Bank Standards (QABs). Applying and operating the international standards and practices in modern banking performance. Governing bank in accordance with recent laws, towards common practices, ensuring the transparency, publicity and efficiency. Organizing banking business according to the modern and advanced banking model. Improving the quality and efficiency of traditional distribution channels, promoting and developing modern distribution channels to keep pace with market trends. Developing and expanding distribution channels, commercial presence in regional and global markets. Enhancing the application of technology in performance to serve customer needs and management requirements; Building up digital banking, focusing on all aspects of operations, processes and operations to meet the trend of modernizing banks according to international standards.

BIDV - ANNUAL REPORT 2016 33 Improving the efficiency of investment activities, focusing on insurance activities, restructuring overseas operations towards narrowing of inefficient units and targeting investment in good prospects; Completing divestment of non-core investment required by the State Bank of Vietnam. Developing a high quality human resources with a comparable labor productivity and qualifications compared to those of major banks in the Asia-Pacific region. Professional working environment contributes to the quality improvement of the Bank’s performance in the trend of integration and globalization. Striving to increase average income of employees. Enhancing BIDV corporate culture and developing BIDV brand to become the leading bank brand in Vietnam, spreading wide recognition to domestic and international markets.

MEDIUM AND LONG TERM DEVELOPMENT STRATEGY Developing the Bank’s organization into modern Banking and Financial Group model with adequate qualifications and capability of synchronous and thorough operating in fully market economy environment with high competitive advantages in Asia and global. This model consists of two main pillars which are commercial bank concentrating on retail banking and insurance (life and non-life insurance) with relatively large scale in region and Asia.

OBJECTIVES TOWARDS THE SOCIAL ENVIRONMENT AND COMMUNITY As the large Financial Institution, besides the important responsibility of implementing the monetary policies, performing business effectively and safely, the community responsibility is one of BIDV’s main missions. BIDV has been evaluated by World Bank as the financial institution that effectively implemented ODA projects to contribute to national sustainable development, especially rural finance project II, III (Series of Rural Finance Project I, II, III which rated by the World Bank as The best global project). In the coming years, BIDV will significantly contribute to the success of the Rural Finance Project III with the responsibility of a lead bank to “secure the safely management of fundings and give loans to right customers”; BIDV also continues to implement preferential credit packages to support customers in Government’s priority areas and actively promote investment in nation-wide cities and provinces to foster potentials of areas and balanced development between area’s economy and national security defense. In addition, BIDV will implement social welfare activities with sharing spirit in national priority areas such as health, education, and disaster relief; support to reduce sustainable poverty, new rural construction, and social welfare; create spillovers in banking sector and community.

34 RISK FACTORS

RISK FACTORS 2016 CORPORATE PROFILE 2016 CORPORATE

BIDV NOTICES SOME FOLLOWING RISK FACTORS THAT MAY AFFECT THE BANK’S BUSINESS PERFORMANCE.

MACRO ENVIRONMENT RISK The world economy is assessed to contain many risks that may have negative impacts on Vietnam's economy in general and BIDV's business in particular: (i) tendency to increase protection in international trade; (ii) the slowing down world economy growth together with the risks of commodity price fluctuations and the risks of geopolitical volatility in many regions; (iii) risks in the international financial system likes the Fed's movement in raising interest rates and possible reactions of the central bank of China, as well as the ECB and central banks of other countries. These risks posed real challenges to Vietnam's economy and need to be monitored closely by BIDV. Vietnam's economy in 2016 has achieved many positive achievements but there are still limitations and challenges that may cause risk to Vietnam’s economy as well as BIDV's business. Firstly, the high budget surplus and public debt that hits the ceiling and narrows the fiscal policy. In the meanwhile, the investment needs for economy development are huge, growth quality and competitiveness of Vietnamese economy are still at low level, macro economy balances are not really stable and unsufficient human resources for the development. Besides, in the banking sector, NPL scale including in and off balance sheet NPLs as well as NPLs sold to VAMC, etc. is still large while NPLs solving yet faces many difficulties. Although trade balance is surplus but it’s not really stable, export growth faces many challenges. Moreover, Vietnam's economy still faces many risks related to natural disasters; epidemics ... which are evolving increasingly complicated and unpredictable.

INTEREST RATE RISK Interest rate risks include Trading Book and Bank Book interest rate risk. They are basic risks that arise due to unfavorable fluctuation in market interest rates, causing losses to net interest income, economic value of BIDV’s equity (in bank book) and trading portfolio value (in trading book). To manage all types of risks, BIDV has fully established most of the interest rate risk management instruments and limitation correspondent to each type of books (Trading Book, Bank Book) in accordance with international practices such as interest sensitive asset gap (Repricing gap), change in net income from interest (ΔNII), duration gap (Dgap), economic value of equity (ΔEVE) (towards bank book interest rate risk), basic point value (BPV), value interest rate risk (VaR), earning affected by interest rate risk (EaR), hypothesis testing (backtest), minimum capital requirements, stop loss limits. Especially, stress test tools using a combination of hypothetical scenarios and historical scenarios was initially conducted to forecast the bank’s losses in market stress condition.

BIDV - ANNUAL REPORT 2016 35 CREDIT RISK Credit risk - the basic risk for most banks including BIDV - arises via lending activity - the main banking business. Credit risk occurs when borrowers, obligators or partners of the bank fail to perform or inability to perform part or all of their obligations under the signed contracts. With strategic target to be the number one bank in system, BIDV has always pioneered in the application of international best practices to govern the bank performance especially credit risk management. In 2016, BIDV completed and put into operation a new internal credit rating system with a debt classification and risk provisioning program to better meet the debt classification requirements and provision provided under Circular 02/2013/TT-NHNN, at the same time, made important steps in gathering the data needed to develop a quantitative credit risk model toward international standard (Basel II). In 2017, BIDV continues to actively implement and complete the LOS project to support the proposal, appraisal and approval of credit system. After project implementing, it will help to centrally manage information, shorten the processing time of credit files, increase the efficiency and quality of document processing, improve the transparency and safety of the banking system, contribute to the implementation of Basel II according to the regulations of the SBV. In addition, in 2016, BIDV has also actively reviewed, updated and issued internal documents, policies and procedures, together with the training of human resources and upgrading of IT systems to better serve the credit risk management at the Bank.

FOREIGN EXCHANGE RISK Foreign exchange risk arising from adverse movements in exchange rates causes a decrease value of the foreign currency position which the Bank holds. BIDV’s foreign exchange, joint ventures and foreign investment operations are directly influenced by the exchange rate fluctuations in the market. In order to manage foreign exchange risk, BIDV has fully enacted policies and internal regulations; established forex trading limit setting system; developed measuring and controlling foreign exchange risk instruments in accordance with international practices, such as stop-loss limit, value at risk (VaR), hypothesis testing (back test), crisis testing (stress test), minimum capital requirements, etc. Besides, monitoring limit compliance for existing indicators, BIDV also regularly conducts research and innovation of measurement and analytical methods to improve the effectiveness of risk management. In 2016, BIDV has firstly applied the coefficient of decline in hypothesis testing, thus improving the accuracy of the VaR valuation model.

36 RISK FACTORS 2016 CORPORATE PROFILE 2016 CORPORATE

LIQUIDITY RISK Liquidity risk is the risk that the Bank is incapable of generating sufficient cash flows at reasonable expense to meet expected and/or unplanned payment obligations. Liquidity risk depends on bank cash flow asymmetry (due date of cash flow and customer behavior). The objective of liquidity risk management is to secure short-term payment obligations and balance medium and long term capital by ensuring liquidity ratios in the short, medium and long term; at the same time, prepare a liquidity reserve plan to prevent the reduction of capital resources. BIDV has set up a regulation system, adequate and internal procedures for liquidity risk management as well as constructed modern management models toward complying with Basel 2 in the near future. At the same time, BIDV manages liquidity in compliance with the regulations of SBV, ensures system’s safety, and increasing investment in high profitability liquidity assets, enhance asset quality.

LEGAL RISK BIDV is now operating in the conditional business area (banking - finance - monetary) under the form of a joint-stock commercial bank, therefore, besides having to complying with the regulations in the Law on Enterprises, BIDV is subject to stringent specialized laws as the Law on Credit Institutions, the Law on the State Bank of Vietnam, etc. Currently, Vietnam has been deeply integrating into the global economy, especially in the field of finance - monetary, thus, Vietnam’s legal system has been constantly developed to put international treaties’ commitments into domestic laws, aiming to accomplish a new comprehensive and more stringent legal framework for Credit Institutions ("CI") in Vietnam, including joint stock commercial banks like BIDV. After equitization and listing on Ho Chi Minh Stock Exchange, BIDV has also been subjected to laws and regulations on securities and securities market (Securities Law and the bylaw enforcing documents). Currently, the laws and bylaws which govern the operation of the stock market are still in the process of modifying, adjusting and supplementing by authority entities. Thus, any such change may affect BIDV’s operation and BIDV’s stock transactions.

BIDV - ANNUAL REPORT 2016 37 INFORMATION TECHNOLOGY SYSTEM RISK Information technology system contains certain risks for banking activities. The risks may arise from using softwares, technological supports, transmission line, systems which are provided by different suppliers; they may also resulted from malfunction, failure to comply with the process of control and supervision, systematic security, or natural disasters, fire, cyber-attacks (hackers), etc. To prevent and restrain information technology system risk, in recent years, along with appropriate human resources development in information technology, BIDV has continuously invested in equipment and developed a complete IT system: setting up firewall, modern IPS/IDS system for WAN/LAN; applying copyrighted anti-virus system which has been updated frequently and system-wide used; equipping NPS system to control LAN access so that improving systematic security; constructing disaster recovery center complying with international standards, storage area network (SAN) as well as policies on system’s security and safety to minimize information technology system risk. BIDV is also one of the first banks in Vietnam to establish a backup center that uses backup main server system and storage technology with the most advanced solutions to secure the Bank’s continuous operation even in case of natural disasters and catastrophes. In 2015, BIDV has been awarded the ISO/IEC 27001: 2013-international standard certification for the new version of the Information Security Management System. The management and operation of BIDV’s IT system are strictly conducted and closely controlled in accordance with processes and regulations, which are periodically reviewed and updated. The plan for handling risk in case of IT incidents has also been built and rehearsed quarterly to help IT system stably and safely operates; BIDV’s IT system has been internationally appreciated. In addition, BIDV has increased its IT readiness at BIDV to cope with the increasing threaten of security risks, adverse externalities, and increasingly stringent compliance requirements in the coming time including the establishment of a special task force to deal with cyber-security situations; set up SOC team to monitor, detect and analyze security issues; collaborate/sign cooperation agreement with CMC, VNCert in security assessment of BIDV's IT system; closely coordinated with the SBV, Vietnam Association of Network Security (VNISA), Ministry of Public Security to better implement the network security alert and supervision of BIDV.

38 RISK FACTORS 2016 CORPORATE PROFILE 2016 CORPORATE

OPERATIONAL RISK Operational risk is the risk that may occur in most of banks’ activities. It is adherent to banking activities but unpredictable. Operational risk may stem from human factors (negligence, fraud), due to loopholes in the operating procedures, weaknesses in information systems, internal control systems; or from changes of unexpected external factors (government policies, natural disasters, sabotage,…). To manage operational risk, BIDV has been synchronizing many tasks from the establishment of organizational structure; the elaboration and promulgation of the full regime documents system; research and implement of the systems, tools and operational risk management reports. BIDV is currently maintaining the Risk Management Division at its Head Office and Branch offices for monitoring, supervision of risk management activities throughout the system. The regime document policy system is built and updated regularly, ensuring the suitability of the operation of the units. BIDV has been promoting some of the most common operational risk management tools: RCSA (Risk Identification and Control), KRI (Key Risk Signs), LDC BCP (Business Continuity Plan), BBB/ECC and D&O Insurance. BIDV has proactively studied the method of calculating the required capital for operational risk under Basel II (BIA, SA) as well as the guidance of the State Bank of Vietnam in Circular No. 41/2016 / TT-NHNN dated 30/12/2016. In addition, BIDV has been building and upgrading software programs to support the collection and processing of operational risk data. Operational risk management culture is also enhanced through training and communication workshops on risk management.

OTHER RISKS In addition to the above risks, BIDV’s operation is also affected by other risks such as fire, natural disasters, strikes, war, and accidents etc., that are force majeure events beyond BIDV’s control, prevention and expectation. These risks, if happen, might cause damages to the business performance of enterprises, including BIDV.

BIDV - ANNUAL REPORT 2016 39 40 HEIGHTENING POSITION 3

2016 BUSINESS PERFORMANCE

HUMAN RESOURCES

INVESTMENTS AND THE PERFORMANCE OF PROJECTS

FINANCIAL PERFORMANCE

OWNERSHIP STRUCTURE AND CHANGES IN SHAREHOLDERS’ EQUITY

BIDV - ANNUAL REPORT 2016 41 2016 BUSINESS PERFORMANCE

ACHIEVEMENTS OF SOME MAIN INDICATORS IN 2016 AS FOLLOWS:

Unit: VND billion

REF. INDICATORS 2016 2015 2014

I SCALE INDICATORS 2016 IS THE INITIAL YEAR OF THE FIVE- 1 Total Assets 1,006,404 850,670 650,340 YEAR BUSINESS PLAN 2 Fund mobilization 797,689 658,701 488,860 2016-2020, INHERITING 3 Loans to customers 723,697 598,434 445,693 ACHIEVEMENTS OF 4 Owner’s Equity 44,144 42,335 33,271 THE PREVIOUS PERIOD, ESPECIALLY INNOVATIONS II ASSET QUALITY IN CORPORATE 5 NPLs ratio 1.95% 1.68% 2.03% GOVERNANCE, BUSINESS III PROFITABILITY ACTIVITIES OF THE ENTIRE 6 Total operating income 30,434 24,712 21,907 BIDV SYSTEM GREW SAFELY AND EFFECTIVELY. 7 Total operating expenses -13,527 -11,087 -8,624 8 Provisions for credit losses -9,199 -5,676 -6,986

9 Profit before Tax 7,709 7,473 6,297

10 Profit after Tax 6,229 5,901 4,986

Data according to BIDV’s Audited Consolidated Financial Statements. Fund mobilization includes: customers deposit, valuable papers issued, deposits from Vietnam Social Insurance, Ministry of Finance.

SCALE, ASSET QUALITY AND PROFITABILITY INDICATORS ASSESSMENT

TOTAL ASSETS REACHED FUND MOBILIZATION REACHED

VND1,006,404 BILLION VND 797,689 BILLION INCREASED BY 18.3% COMPARED TO 2015, EXCEEDING GREW BY 21.1% AGAINST 2015, VND 01 BILLION MILESTONE OF TOTAL ASSETS. COMPLETELY MET THE FUND DEMANDS.

CREDIT GROWTH IN 2016 REACHED 17.85%, CLOSELY CREDIT QUALITY IS CONTROLLED IN FOLLOWED THE TARGETS ASSIGNED BY THE STATE BANK THE RIGHT DIRECTIONS, NPLS RATIO OF VIETNAM, IN CONFORMITY WITH FUND ABSORPTION AND GROUP NO.2 LOAN RATIO ARE CAPACITY OF THE ECONOMY; IN WHICH, LOANS TO 1.95% AND 3.7% RESPECTIVELY. CUSTOMERS REACHED VND 723,697BILLION ROSE BY 20.8% COMPARED TO THE PREVIOUS YEAR.

42 2016 BUSINESS PERFORMANCE

PERFORMANCE ASSESSMENT Fund mobilization 2016 BUSINESS PERFORMANCE Fund mobilization increased faster than the credit growth 900 50% contributing to, safe and effective capital balance. In 2016, 798 the fund mobilization reached VND 797,689 billion, of which: 800 659 40% (i) customer deposit was VND 726,022 billion, increased by 700 35% 35% 600 35% 30% 28.6% compared to the previous year; (ii) valuable papers 489 issued reached VND 66,642 billion, maintaining a stable level 500 25% 400 21% 20% compared to 2015. 20% 300 15% Funding structure positively shifted towards: (i) Vietnam 200 10% Dong customer deposit made up over VND 683,871 billion, 100 5% increased by 32%, accounted for 94% of total customer 0 % deposit; (ii) the proportion of demand deposit was 17.23% of 2014 2015 2016

total customer deposit; (iii) Residential deposit reached VND Fund mobilization Growth 394,647 billion, increased 27.2%, accounted for 54% of total (thousand billion VND) customer deposit, confirming the leading position in terms of scale and proportion of residential deposit in the market. 900 50% Credit 800 724 40% 34% Outstanding loans increased since the beginning of the year, 700 35% closely followed the growth rate of the whole banking system, 600 30% 598 21% in conformity with fund absorption capacity of the economy: 500 446 25% outstanding loans (including loans to corporates, individuals, 400 20% 300 15% investment in corporate bonds and outside financial leasing) 14% reached VND 751,448 billion, of which, loans to customers 200 10% reached VND 723,697 billion, increased 20.9% compared to 100 5% 0 the previous year. % 2014 2015 2016 Credit growth accompanied by safety and quality control, Loan to customers Growth ensuring risk management: NPLs ratio was 1.95%, Group No.2 (thousand billion VND) loan ratio was 3.7%.

BUSINESS PERFORMANCE IS CONSIDERABLY ACHIEVED WITHIN AN INTENSIVELY COMPETITIVE BUSINESS ENVIRONMENT:

TOTAL OPERATING PROFIT BEFORE INCOME REACHED VND 30,434 BILLION TAX REACHED VND7,709 BILLION INCREASED BY 23.2% COMPARED TO 2015; IN WHICH, NET UP 3.16% COMPARED TO 2015, MAKING A INTEREST INCOME IN 2016 GREW BY 21.3% COMPARED SUFFICIENT PROVISION FOR VAMC BONDS AND TO THE PREVIOUS YEAR, CONSTITUTING 77% OF TOTAL LOANS CLASSIFICATION IN COMPLIANCE WITH OPERATING INCOME. REGULATIONS. ROA WAS 0.67%; ROE WAS 14.7%.

ASSURING LIQUIDITY RATIO, INVESTMENT LIMITATION, MAINTAINING CAR ABOVE 9% IN COMPLIANCE WITH THE STATE BANK OF VIETNAM’S REGULATIONS.

BIDV - ANNUAL REPORT 2016 43 Investment Investment scale in 2016 reached nearly VND 227 billion, grew by 10.3% over the previous year, accounted for 22.5% of total assets. Total net income from investment operations made up over VND 2,000 billion, increased 5 times compared to 2015.

Fee-based financial services a. Net fees income achieved VND 2,509 billion, increased 7.4% over 2015. Structure of the services revenue shifted positively when the modern and retail banking services achieved remarkable growth rate; some prominent service lines such as: Payment services grew strongly, leading in providing the comprehensive payment solutions for customers, setting up foundation for business strategy with payment revenue grew 19%, payment services fee income rose 19.4% compared to 2015. 3000 35% 2,337 2,504 BIDV’s import-export payment revenue 2500 30% achieved considerably growth rate at 27.23%, 29.6% 25% made up 6.2% of total import-export quota of 2000 1,803 20% the country, (improved 1% over 2015), number of 1500 trade finance transactions increased 18.83%, trade 15% 1000 15.1% finance fees revenue increased 17.32% compared 10% to last year. In particular, all the trade finance 500 7.1% 5% products reached good growth rate in 2016: L/C 0 0% issuance (increased 20.21% in terms of transactions 2014 2015 2016 volume and increased 16.06% in revenue); Export collection (increased 24.25% in terms of transactions Net income from Growth financial services volume and 17.13% in revenue); especially, the (billion VND) correspondent guarantee products also increased impressively with 54% transactions increased against the previous year.

E-banking services continued to grow strongly with over 20 million transactions (up 80% compared to 2015), number of customers reached 5.7 million (increased 1.9 million new customers), e-banking fees revenue grew 48% over 2015. In 2016, BIDV’s homebanking and IMAP programs were honourably awarded Sao Khue. Card activities improved the market share, ranked top 4 with the total number of cards issued over 10 million cards, charges revenue from card services increased 28% over the previous year. In 2016, card products have been affirmed their brand when receiving 11 consecutive awards from the prestigious international organizations b. Revenue from guarantee fees reached VND 1,346 billion, increased by 5% over the previous year. c. Net income from FX trading reached VND 534 billion, increased 1.8 times over 2015.

44 HUMAN RESOURCES

HUMAN RESOURCES 2016 BUSINESS PERFORMANCE

HUMAN RESOURCES IS THE MOST VALUABLE FACTOR FOR SUCCESS AND DEVELOPMENT OF BIDV. THEREFORE, ONE OF THE MOST IMPORTANT OBJECTIVES OF THE BANK IS TO ENSURE SUFFICIENT QUANTITY AND QUALITY OF HUMAN RESOURCES TO SUCCESSFULLY IMPLEMENT BUSINESS TARGETS AND STRATEGIES.

HUMAN RESOURCES MANAGEMENT POLICY

SUMMARY OF POLICIES AND CHANGES IN training, professional training for employees to POLICY FOR EMPLOYEES improve knowledge, professional skills, foreign languages, soft skills. Developing and applying employment regulations with conditions, requirements, recruitment Developing Employment Evaluation Regulation procedures for each position, title, and job as the and KPIs with specific quantified criteria for each basis of organizing recruitment and selecting job position to evaluate and rank employees qualified workforce, in line with requirements of periodically as the basis for implementing working positions. remuneration and policies for employees.

Organizing training and integrating staffs in order Developing planning regulations, designating, to help new staffs to capture and integrate quickly rotating in order to help employees to orientate with the environment and working culture at BIDV. and strive working for professional development. Developing annual training plan and organizing

BIDV - ANNUAL REPORT 2016 45 2016 2015

2016 Bachelor and above 850 820 College 20 280 Vocational, other 0 800

2016 2015

Board of Directors 0 0 2016 Department Leaders 5 20 Division Managers 28 20 Sta 20 0 At December 31,

2016 2015 2016 the total ≤ 30 years old 00 50

Between 30 & 40 number of BIDV’s 2016 years old 0 20 employees was Between 40 & 50 500 80 years old Above 50 years old 50 550 25,088

Developing salary remuneration policies, Training – Development according to international commensurate reward based on job position, standards, and bringing benefits to its staffs when contribution and work efficiency of employees in they attend CPA courses and take exams to get line with salary trend in labour market. the certificate. During 2016, BIDV held 404 classes with 24,823 trainees respectively. BIDV continued Complying and strictly implementing regulations to successfully implement 4th and 5th Curriculum and policies applicable to employees in Future Banking Leaders with many improvements accordance with law. following trends in modern banking operation. RESULT OF HUMAN RESOURCES Besides internal training, BIDV also sent its MANAGEMENT IN 2016 staff to external courses such as business in banking, knowledge and practice in Basel Recruitment: Following the success from the II, III held by Government Departments… previous years, in 2016, BIDV continued centralized Besides, BIDV organized many survey programs, recruitment on the entire system. BIDV deployed seminars, thematic training under domestic recruitment application and IT on major steps and international operations… Results from the of recruitment process which presented the training helped the staffs to improve professional publicity, transparency, and consistency on the capability, handling skills and consistently applied entire system, and ensured the candidates’ quality in practical work in the units. according to the requirement of each locality. Planning, promotion of staff: Planning of Thereby, BIDV attracted high quality candidates staffs was conducted methodically, based on from all regions, created good impression on the the principle of democratic centralism. An open society in general and on candidates in particular, and adjustable planning is still maintained and contributes to promoting and enhancing brand, implemented well. List of planning has been image of BIDV on the market. supplemented, adjusted on the basis of closely Training: Enhancing cooperation with following the development of staff, removed from prestigious international partners in field of the list who no longer qualified, no prospects, training and human resources development: In and added to the list new prospective factors… 2016, BIDV is one of the first financial institutions Associated with the planning is promoting in Vietnam achieving certificate of Recognized employees. In 2016, BIDV continuously Employer Partner (REP) issued by Certified implemented to strengthen the senior Practicing Accountants Australia (CPA), marking management team, ensuring compliance with the its initially remarkable success in Recruitment – provisions of the law of Credit Institution, and the

46 HUMAN RESOURCES 2016 BUSINESS PERFORMANCE

regulations on organization and operation of join Salary and policy: Regular/irregular salary rising stocks commercial bank. The promotion of leaders for employees in the whole system was carried at all levels is conducted according to regulations out fully and in accordance with regulations. At and procedures. Therefore, staff who is promoted, the same time, BIDV always research and improve is exemplary, has good reputation, typical worker commensurate policy to create motivation for each on the field, after promotion they would elevate position. the role of key staff so enhance both quality and quantity for the team of key personnel at the The regimes and policies for employees have been Headquarter and the whole system. concerned by the board and organizations; which implemented, resolved timely and thoroughly; The rotation and evaluation: In 2016, the assuring the rights of employees such as social rotation and evaluation of staffs conducted insurance, health care insurance, unemployment synchronously, with many reforms in contents and insurance, BIC insurance, Metlife insurance, techniques, brought initial results on some aspects Volunteer pension insurance BIDV-Metlife, sickness, as follows: pregnancy, retirement, vacation, birthday… Staff rotation between Headquarter and branches Emulation and Complimentary work: the was promoted in order to educate and cultivate maintenance and development of emulation staffs, at the same time, contributing in supply activities are closely tied up with professional work, and enhancing professional labour resources from become the driving force for the business activities. Headquarter to support branches. Complimentary/reward work is ensured to reach Rotation for training, cultivation to meet the time target, accuracy, right person, right work, right requirements of management and internal control achievement, to maximize the capabilities and in all units is also implemented regularly and creativity of all employees and officers, striving to constantly; gradually forming common practices, contribute to the overall success of the whole BIDV positive habits for officers and staffs. system. In 2016, BIDV submitted and got rewards for 1,756 collectives and 9,985 individuals, in which, Testing of staffs is expanded in term of size, rewards at the Government level were granted to 6 objectives, and complexity. In 2016, BIDV held collectives and 14 individuals, rewards at the State assessment for 16,000 staffs, includes: test of Bank level were granted for 175 collectives and management capability for leading staffs and 1,216 individuals. professional qualification test for professional staffs.

BIDV - ANNUAL REPORT 2016 47 INVESTMENTS AND THE PERFORMANCE OF PROJECTS

THE PERFORMANCE OF SUBSIDIARIES

Short name: BIC Operation license: No. 11/GPDC16/KDBH dated 06/01/2016 by the Ministry of Finance Business sector: Insurance Chartered Capital (31/12/2016): VND 1,172.7 billion The percentage of ownership held by BIDV: 51%

BIDV INSURANCE CORPORATION (BIC)

BIC has officially operated since January 2006 when BIDV repurchased the shares of QBE at Viet – Uc Insurance Joint-Venture Company and mainly operates in the insurance sector. BIC successfully implemented IPO and has transferred into Joint Stock Company since 01/10/2010, listed on the Ho Chi Minh City Stock Exchange in 2011 and sold strategically to Fairfax Asia Limited, a subsidiary of Fairfax Financial Holdings, the world's leading financial insurance group in 2015. Its Chartered Capital at 31/12/2016 was VND 1,172.7 billion and the percentage of ownership held by BIDV was 51%. In 2016, the Company continued to operate stably and archived optimistic performance with the total commission fee received of VND 1,671 billion, an increase of 13% in comparison with 2015, accounted for 4.1% of the Vietnam market share, ranked 8th in the total 29 insurance companies; consolidated profit after tax was VND 166.5 billion, an increase of 5.5% against 2015. In 2016, BIC is raised the outlook from Stable to Positive by the world's leading credit rating agency - A.M. Best and continues to confirm BIC's financial strength rating B+ (Good), ranking the capacity of the issuer bbb-. Also in 2016, BIC was ranked 5th in the list of 10 most prestigious insurance companies in Vietnam by Vietnam Report Joint Stock Company (Vietnam Report) in collaboration with VietnamNet Newspaper announced.

48 INVESTMENTS AND THE PERFORMANCE OF PROJECTS 2016 BUSINESS PERFORMANCE

Short name: BSC Operation license: No. 111/GP – UBCK dated 31/12/2010 by the State Securities Commission of Vietnam Business sector: Securities and related operation activities Chartered Capital (31/12/2016): VND 865 billion The percentage of ownership held by BIDV: 88.12%

BIDV SECURITIES JOINT-STOCK COMPANY (BSC)

BSC is established on 18/11/1999 and is one of the two securities companies firstly granted operation license in the Vietnam Stock market. BSC provides sufficient services in Vietnam, including brokerage, trading, issuing guarantee and investment consultancy, and securities depository. In 2010, BSC successfully implemented IPO and has transferred into Joint Stock Company since 1/1/2011, the percentage of ownership held by BIDV was 88.12%. Total asset at 31/12/2016 was VND 1,445 billion; brokerage market increased by 4.02%, a well growth of 10% against 2015, ranked the 7th in brokerage markets on Ho Chi Minh Stock Exchange (HSX) and the first in bond brokerage market. Its profit after tax of 2016 was VND 115 billion, a rise of 15% against 2015, respectively ROE reached 11.7%.

BIDV - ANNUAL REPORT 2016 49 Short name: BLC Operation license: No. 0100777569 dated 11/10/2012 by Ho Chi Minh Authority for Planning and Investment Business sector: Financial leasing Chartered Capital (31/12/2016): VND 448 billion The percentage of ownership held by BIDV: 100%

BIDV FINANCIAL LEASING COMPANY, LTD. (BLC)

The Company was established in 1998 in Hanoi with the initial granted chartered capital of VND 55 billion, then raised to VND 200 billion. In 2010, BIDV Financial Leasing Company II in Ho Chi Minh City and BIDV financial leasing Company were merged in order to raise financial capacity and operation efficiency. After the merger, the Company focused on stabilizing the organization and implementing the restructuring plan to improve the quality and effectiveness of the Company. Accordingly, the Company's operation improved: NPL ratio was below 3%, safety ratios were in line with regulations, and profit before tax at 31/12/2016 was over VND 1 billion. Based on the approval of the State Bank of Vietnam, the Company is currently in the process of converting the legal form from one member limited liability company into a limited liability company with three members on the basis of cooperation/ joint ventures between BIDV and Sumitomo Mitsui Trust Bank - SMTB and Sun Corporation to restructure BLC in order to strengthen the financial capacity and efficiency of the Company. The converted company has a chartered capital of VND896 billion and is the first financial leasing company in Vietnam to implement a new business model for chain leasing finance in Vietnam. The company is headquartered in Hanoi and has three branches in Hanoi, Ho Chi Minh City and Da Nang, contributing to boosting the company's business in the coming years.

50 INVESTMENTS AND THE PERFORMANCE OF PROJECTS 2016 BUSINESS PERFORMANCE

Short name: BAMC Operation license: No. 0101196750 dated 12/01/2011 by Hanoi Authority for Planning and Investment Business sector: Receive and settle loans originated by BIDV’s branches Chartered Capital (31/12/2016): VND 30 billion The percentage of ownership held by BIDV: 100%

BIDV ASSET MANAGEMENT COMPANY (BAMC)

Established in 2001, BAMC’s chartered capital as at 31/12/2016 was VND 30 billion. BAMC is responsible for receiving and settling BIDV’s debts incurred prior to 31/12/2000. After 7 years in operations, BAMC basically completed the settlement of the NPLs of BIDV under Decision No. 149/2001/QD-TTg by the Prime Minister, thus contributing to enhancement of BIDV’s debt structure and financial capacity. Accordingly, in 2009, BAMC completely restructured in the direction of maintaining its legal status and narrowing down its business scale and personnel. In 2010, pursuant to Decree No. 25/2010/ND-CP of the Government, BIDV submitted its plan to transform BAMC into an one-member limited company to the Governor of State Bank of Vietnam and it was approved. The total assets as at 31/12/2016 were VND 34 billion, profit after tax was VND 1.2 billion.

BIDV - ANNUAL REPORT 2016 51 Short name: BIDVI Operation license: No. 39283570-000-04- 08-8 dated 17/04/2011 in Hongkong and Investment Certificate No. 111/BKH- ĐTRNN dated 20/03/2008 by the Ministry of Planning and Investment. License has been extended to 17/04/2017.

Business sector: Financial leasing Chartered Capital (31/12/2016): VND 448 billion The percentage of ownership held by BIDV: 100%

BIDV INTERNATIONAL HOLDINGS LTD. (BIDVI)

Established in Hongkong on 20/03/2008, BIDVI’s chartered capital as at 31/12/2016 was USD 1. BIDVI is responsible for raising and managing investment fund, providing financial advisory services for mobilizing funds from the international market to invest in Vietnam.

52 INVESTMENTS AND THE PERFORMANCE OF PROJECTS 2016 BUSINESS PERFORMANCE

Short name: LVI Operation license: 077-08 / DT dated 19 June 2008 issued by the Ministry of Planning and Investment of the Lao PDR and Certificate of Investment Offshore No. 146 / BKH/ĐTRNN dated 19 June 2008 granted by the Ministry of Planning and Investment. Business sector: Finance Chartered Capital (31/12/2016): USD 3 million The percentage of ownership held by BIDV: 33.15%

LAO-VIET INSURANCE JOINT-VENTURE COMPANY (LVI)

Established and officially put into operation in June 2008 in Laos, on the basis of a joint venture between BIDV Insurance Joint Stock Company and Bank of Foreign Trade of Laos and Laos-Vietnam Joint Venture Bank. The company's core business is to provide insurance, reinsurance and financial investment services. By 31/12/2016, total assets of the company were USD 28.8 million, total premium were USD 8.65 million, profit before tax was USD 1.25 million, ranked 2nd on the original premium revenue in Laos insurance market and gradually narrow the gap with the 1st rank.

BIDV - ANNUAL REPORT 2016 53 Short name: BIDC Operation license: B7.09.148 dated 14/8/2009 by State Bank of Cambodia

Business sector: Banking Chartered Capital (31/12/2016): USD 100 million The percentage of ownership held by BIDV: 98.5%

BANK FOR INVESTMENT AND DEVELOPMENT OF CAMBODIA

BIDC was established in 2009 in Cambodia as a subsidiary of IDCC (owns 98.5%). The chartered capital as of 31/12/2016 is USD 100 million. BIDC is a one of the largest banks in Cambodia. Up to 31/12/2016: BIDC ranked 6th in Cambodia market in scale of chartered capital, total assets reached USD 740 million; outstanding loan reached USD 520 million; fund mobilization reached USD 600 million in which residential deposit is USD 225 million. BIDC's network is expanded with 10 branches in key economic areas of Cambodia and Vietnam (Phnom Penh, Siem Reap, Kampong Cham, Hanoi, and Ho Chi Minh City).

54 INVESTMENTS AND THE PERFORMANCE OF PROJECTS 2016 BUSINESS PERFORMANCE

Short name: LVB Operation license: Foreign Investment License No. 985-326/KH/ DT.4 dated 10/06/1999 and the latest revision 004-15/KH-ĐT.4 dated 24/08/2015 by the Ministry of Planning and Investment, Laos P.D.R

Business sector: Banking

Chartered Capital LAK 791,357.56 million (31/12/2016): (equivalent to USD 100 million)

The percentage of ownership held by BIDV: 65%

LAO – VIET JOINT VENTURE BANK (LVB)

Lao – Viet Joint Venture Bank was established in 1999 between BIDV and Banque Pour Le Commerce Exterieur Lao (BCEL) in order to implement the Agreement on Culture, Science and Technology Cooperation between Vietnam and Lao P.D.R and promote economic and commercial activities between the two countries, After nearly 18 years of construction and development, LaoVietBank has developed strongly, become one of the leading commercial banks operating in Laos, playing an active role in implementation of the task of "Payment bridge to contribute boosting the trade and investment relations between Vietnam and Laos”. In 2016, LaoVietBank continues to be one of the leading commercial banks in terms of scale and performance in Laos. The total assets reached USD 1.1 billion, an increase of 18% compared with that of 2015 (ranked 4th in market). Fund mobilization reached USD 976 million, up 19.5% in comparison to 2015 in which residential and corporate fund mobilization is USD 621 million, up 35% in comparison to 2015 (ranked 2nd in market ); Total outstanding loan of the Bank reached USD 884 million, growing 20% over 2015 (ranked 4th in market); Profit before tax reached USD 21.7 million; ROE was 13.51%; The number of employees of the whole Bank reached nearly 387 people, staff's life is improved. With 01 headquarter, 05 branches and 14 transaction offices, LaoVietBank has presence in 08/18 provinces and key economic areas of the country including Vientiane, Attapeu, Champasak Savanakhet, Kham muon, Xieng Khouang, Luangprabang and Udomxay.

BIDV - ANNUAL REPORT 2016 55 THE PERFORMANCE OF JOINT-VENTURES

Short name: VRB Operation license: No. 0102100878 dated 05/08/2013 by Hanoi Authority for Planning and Investment Business sector: Banking Chartered Capital (31/12/2016): VND 3,008 billion The percentage of ownership held by BIDV: 50%

VIETNAM-RUSSIA JOINT-VENTURE BANK (VRB)

VRB Vietnam – Russia Joint Venture bank is the joint venture between BIDV and VTB, established in 2006 with the role of connecting the two commercial banking systems as the basis for promoting the comprehensive cooperation in economic and trade between Vietnam and Russia. Year 2016 marks the 10th anniversary of VRB. Through many difficulties and challenges, with the efforts and support of two parent banks, VRB gradually affirmed its position in the market, building enough potential to develop towards modern bank in the market with some outstanding results such as: i) building and improving the operating and risk management system to operate safely and effectively; ii) growth with total assets of VND 14,238 billion, total outstanding loans of VND 8,545 billion, profit before tax of VND 35 billion, transaction network including 01 Head Office, 06 branches and 10 transaction offices in major cities across the country; iii) well performing the role of payment bridge between the two countries, especially in 2016 VRB has successfully deployed direct bilateral payment channel KFT that helped to boost bilateral payment activities. In addition, VRB actively participate in trade promotion programs and investment between the two countries, serving large projects between the two countries as Vietsopetro... contributing to promote economic cooperation between the two countries.

56 INVESTMENTS AND THE PERFORMANCE OF PROJECTS 2016 BUSINESS PERFORMANCE

Short name: BVIM Operation license: No. 01/GP – QLDT dated 06/01/2006 by the Ministry of Finance and No. 74/UBCK - GP dated 09/08/2010 by the State Securities Commission of Vietnam

Business sector: Fund management Chartered Capital (31/12/2016): VND 25 billion The percentage of ownership held by BIDV: 50%

BIDV-VIETNAM PARTNERS INVESTMENT MANAGEMENT JOINT VENTURE COMPANY (BVIM)

BVIM is a joint venture established in 2006 between BIDV and Vietnam Partners (United State of America) with the contribution of 50% by each party. BVIM’s main business activities include fund management and provision of financial and investment advisory services. BVIM currently manages Vietnam Investment Fund (“VIF”) with the net asset value of VND 1,349.2 billion which is a closed-end fund with 18 investors including large corporations and business group in Vietnam and a number of Japanese investors. In 2016, the Company focused on liquidating the investment portfolio of VIF to refund capital to the investors. As at 31/12/2016, BVIM’s total assets reached more than VND 55.2 billion, profit before tax achieved more than VND 5 billion, returned 86% of initial investment in VIF fund to the investors.

BIDV - ANNUAL REPORT 2016 57 Short name: BIDV Tower JVC Operation license: No. 2523/GP dated 02/11/2005 by the Ministry of Planning and Investment Business sector: Managing and operating BIDV Tower 35 Hang Voi, Hanoi Chartered Capital (31/12/2016): VND 209 billion The percentage of ownership held by BIDV: 55%

BIDV TOWER JOINT-VENTURE COMPANY (BIDV TOWER)

BIDV Tower is a joint-venture established by the end of 2005 between BIDV and Bloomhills Holdings Pte Ltd. (Singapore). From 2006 to 2009, the main business B I DV activity of the Company was constructing BIDV Tower at 35 Hang Voi street, Hanoi. In T O W E R the early 2010, following the completion of the construction, BIDV Tower Joint Venture Company began to operate and manage the utilities and services at BIDV Tower. In 2016, the Company operated stably and achieved positive business results: occupation rate of 97%, higher than the industry average rate and keep the high rents compared to the market average. Accordingly, the Company successfully fulfilled the business targets of 2016: revenue from office leasing reached VND 200 billion (+2% against the business plan) and pre-tax profit reached VND 76.8 billion (+27% against the business plan).

58 INVESTMENTS AND THE PERFORMANCE OF PROJECTS 2016 BUSINESS PERFORMANCE

Short name: BIDV METLIFE Operation license: No. 72/GP – KDBH dated 21/07/2014 Business sector: Life Insurance Chartered Capital (31/12/2016): VND 1,000 billion The percentage of ownership held by BIDV: 37.55%

BIDV - METLIFE LIFE INSURANCE LIMITED LIABILITY COMPANY (BIDV METLIFE)

BIDV Metlife Life Insurance Limited Liability Company (BIDV Metlife) is a Joint Venture among MetLife Limited and Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) and BIDV Insurance Corporation (BIC). The Company has officially started operation since November, 2014. BIDV Metlife provides a wide range of innovative life and health insurance products and services with international quality based on MetLife's financial, technology, product design as well as BIDV’s network and customer base. BIDV Metlife currently has completed its nationwide distribution network to every branch and transaction office of BIDV. In 2016, BIDV Metlife is ongoing market penetration and achieved positive results, total premium reached VND 258 billion, an increase of 2.8 times compared to 2015 and ranked 10/18 companies in terms of new revenue market share in life insurance market.

BIDV - ANNUAL REPORT 2016 59 Short name: VALC Operation license: No. 0102384108 dated 25/02/2014 by Hanoi Authority for Planning and Investment Business sector: Aircraft purchasing and leasing Chartered Capital (31/12/2016): VND 1.318 billion The percentage of ownership held by BIDV: 32.21%

VIETNAM AIRCRAFT LEASING JOINT STOCK COMPANY (VALC)

In order to significantly contribute to the development of the aviation sector of Vietnam, on the basis of proposal of Vietnam airline corporation and BIDV, Aircraft Leasing Company (VALC) was appoved to establish by the Prime Minister. On 8/10/2007, VALC was officially launched into operation. After 10 years in operation, VALC has gradually improved the status in the national and international aircraft leasing market with the successful implementation of two main aircraft purchase and lease projects (5 ATR 72-500 aircrafts and 10 Airbus A321-200 aircrafts projects). In addition, in order to develop the commercial fleet and diversify its business activities, VALC has been researching and successfully developing a number of joint-venture projects for business investment and leasing of business aircraft, helicopters and investment plans for leasing engines and other aviation equipment. In 2016, the performance of VALC was optimistic with the profit before tax of USD 26 million, profit after tax to the charter capital was 32%.

60 INVESTMENTS AND THE PERFORMANCE OF PROJECTS

THE PERFORMANCE OF INVESTMENT PROJECTS 2016 BUSINESS PERFORMANCE

In 2016, BIDV has completed the procedures relating to the acquisition of International Investment and Development Limited Company as a subsidiary of BIDV. At the same time, BIDV promoted divestment, the total value of divestment in 2016 reached VND 602 billion, of which the divestment at VidPublic joint-venture Bank is VND 476 billion. The remaining divestments are financial investments that BIDV has small ownership and that are external parts.

BIDV - ANNUAL REPORT 2016 61 FINANCIAL PERFORMANCE

FINANCIAL PERFORMANCE Unit: VND Billion Financial Performance 2015 2016 Change

Total Assets 850,670 1,006,404 18.31% Total operating income 24,712 30,434 23.15% Tax and Other payables 2,337 2,450 4.84% Profit before tax 7,473 7,709 3.16% Profit after tax 5,901 6,229 5.56%

KEY FINANCIAL INDICATORS

Capital Scale Unit: VND Billion

Capital Scale 2015 2016 Change

Chartered Capital 34,187 34,187 0% Total Assets 850,670 1,006,404 18.3% (CAR)Capital adequacy ratio >9% >9%

Operating Results Unit: VND Billion

Indicators 2014 2015 2016 ĐơnChange vị: Tỷ đồng

Total lending 777,111 1,010,937 1,217,896 20.47% Debt Collection 722,453 860,200 1,092,633 27.02% End-term Outstanding loans 445,693 598,434 723,697 20.93% Non-performing loans Volume 9,056 10,054 14,429 41.01% Ratio 2.03% 1.68% 1.95%

Group No 3,4,5 guarantees/ 0.61% 0.47% 0.46% Total guarantees

OTHER KEY INDICATORS Indicators As regulation 2015 2016 Change

Liquidity coverage within the next 30 days (*) VND ≥ 50% 62.17% 79.56% 17.39% FCY ≥ 10% 63.33% 108.69% 45.35%

Liquidity Reserve Ratio ≥ 10% 11.10% 15.78% 4.68%

Outstanding loans to deposits ratio ≤ 90% 81.90% 80.85% -1.05%

Short-term funding for medium and long-term loans ≤ 60% 37.55% 43.05% 5.5%

Note: These indicators which are reported to SBV are calculated in accordance with Circular No.36/2014/TT-NHNN dated 10 November 2014 regulating prudential ratios in operations of credit institutions.

62 OWNERSHIP STRUCTURE AND CHANGES IN SHAREHOLDERS’ EQUITY AS AT 31/12/2016

OWNERSHIP STRUCTURE AND CHANGES IN SHAREHOLDERS’ EQUITY

SHARE STRUCTURE

TOTAL NUMBER NUMBER OF NUMBER OF TYPE OF SHARES OF SHARES TRANSFERABLE SHARES RESTRICTED SHARES 2016 BUSINESS PERFORMANCE

3,418,715,334 Common share 160,785,470 3,257,602,332

LIST OF SHAREHOLDERS WITH LIMITED NUMBERS OF TRANSFERABLE SHARES

NAME OF NUMBER OF SHARES NUMBER OF TRANSFER RESTRICTION SHAREHOLDERS OWNED RESTRICTED SHARES DURATION State Bank of Vietnam Subject to State (representing State 3,257,324,161 3,257,324,161 regulations Capital) Internal Shareholders 943,242 278,171

Board of Directors 266,036 266,036 During terms of office

Board of Management 665,071 -

Supervisory Board 12,135 12,135 During terms of office

SHAREHOLDER STRUCTURE

NUMBER OF SHARES PERCENTAGE OF NUMBER OF SHAREHOLDERS OWNED OWNERSHIP SHAREHOLDERS

State Bank of Vietnam (representing State 3,257,324,161 95.28% 1 Capital) Other shareholders 161,391,173 4.72% 24,659 Domestic Shareholders 116,620,276 3.41% 24,197 Organizations 17,431,369 0.51% 165 Individuals 99,188,907 2.90% 24,032 Foreign Shareholders 44,770,897 1.31% 219 Organizations 40,510,280 1.18% 54 Individuals 4,260,617 0.12% 165

CHANGE IN THE OWNER’S EQUITY (SPECIFY EQUITY INCREASES FOR THE YEAR INCLUDING PUBLIC OFFERINGS, PRIVATE OFFERINGS, BOND CONVERSIONS, WARRANT CONVERSIONS, ISSUANCE OF BONUS SHARES, SHARES DIVIDEND) In 2016, BIDV did not make any equity increase. TREASURY SHARES TRANSACTION: None OTHER SECURITIES: None

BIDV - ANNUAL REPORT 2016 63 Years

Most valuable bank brand in Vietnam (According to Brand Finance)

64 SHAPING VALUES 4

REPORT FROM THE BOARD OF MANAGEMENT Years

BUSINESS ENVIRONMENT AND RESULTS IN 2016

FINANCIAL PERFORMANCE

IMPROVEMENT IN ORGANIZATIONAL STRUCTURE, CORPORATE GOVERNANCE AND MANAGEMENT POLICY

2017 BUSINESS PLAN

BIDV - ANNUAL REPORT 2016 65 BUSINESS ENVIRONMENT AND RESULTS IN 2016

In 2016, Vietnam faced numerous challenges from economy, maintained the money and foreign both domestic and international markets, unusual exchange market stability; interest rates also were natural disasters such as flood in Central Vietnam, stabilized; credit growth went along with safety soil salinity in Mekong Delta, drought in Western and quality; concentrated on typical production Highlands, marine life disaster,etc, which affect to and business fields. Regarding BIDV, the business both people life and business performance of the performance in 2016 presented the great effort of enterprises. In the context of those challenges, BIDV Management Board and the entire employees: Profit before tax achieved VND 7,709 billion, up Government and authorities have drastically 3.16% over the previous year; Total asset reached directed and executed the major undertakings, over VND 1 quadrillion; customers base achieved policies in order to eliminate the difficulties for 8.7 million customers; maintained safety indicators business, improved the investment environment, within the limits, positively changed credit enhanced the nation’s competitiveness as well structure, strictly controlled non-performing loan; as guaranteed the stability of people’s life and network spread over 1,000 transaction offices, 1,824 social security. Vietnam economy has achieved ATMs and more than 34,000 POS; continuously remarkable signs of prosperity, appreciated by developed, extended the operation and network in international community, GDP growth rate was Myanmar, Russia and Taiwan, enhanced the position 6.21%, inflation rate controlled under 4.74%, as the largest commercial bank in Vietnam. export surplus reached USD 2.68 billion, number of newly registered business increased drastically, International credit rating firms continued to rate administrative reform and business environment BIDV’s outlook as stable and assessed the bank to innovation were considered to be good levels by be among the best in Vietnam .This year was also ASEAN. the first time BIDV brand had been evaluated as the most valuable banking brands in Vietnam, and During 2016, the State Bank of Vietnam has actively became one of Top 500 Global Banking by Brand and flexibly managed the monetary policy, strictly Finance – a global leading brand consultant and cooperated with the economic fiscal policy to valuation; continued to maintain the Best retail control inflation according to the determined banking in Vietnam for 3 consecutive years by The objective; stabilized macroeconomics, supported Asian Banker. BIDV also honored to receive many the reasonable economic growth; guaranteed prestigious award for treasury products, information the liquidity of the Credit Institution and the technology, retail banking products, e-banking, etc....

66 FINANCIAL PERFORMANCE

FINANCIAL PERFORMANCE

BUSINESS PERFORMANCE In 2016, BIDV continued to be the leading financial institution, total deposits from organizations and Inheriting the achievement of the past period, individuals reached VND 797,689 billion, up 21.1%, BIDV business performance in 2016 maintained fulfilled the target set by the AGM, specifically: (i) reasonable and safety growth; guaranteed the Deposits from customers were VND 726,022 billion, benefit of shareholders and employees: Total up 28.6%; (ii) Issued valuable papers achieved VND operating income achieved VND 30,434 billion, 66,642 billion; Funding structure was positively grew by 23.2% compared to 2015YE. Net profit shifted: (i) Deposit in VND was over 683,871 billion, OF MANAGEMENT THE BOARD REPORT FROM from operating activities before provision for credit improved by 32%, accounted for 94% of total losses in 2016 reached VND 16,907 billion, up 24% customer deposit; (ii) Demand deposits accounted over the previous year. Profit before tax was VND for 17.23% of total customer deposits; (iii) Deposits 7,709 billion; paid to the State budget was VND from individuals reached VND 394,647 billion, 2,540 billion; loan classification and provision were increased 27.2%, made up to 54% of total customer strictly followed the regulations. ROA was 0.67%; deposits, ensured BIDV’s leading position in term of ROE achieved 14.7%. Consolidated CAR ratio >9%, deposit volume and proportion from individuals. met the State Bank of Vietnam’s requirement. OWNERS’ EQUITY ASSET SCALE AND QUALITY In 2016, BIDV owners’ equity achieved VND 44,144 By the end of 2016, total assets of BIDV reached billion, increased by 4.3% compared to 2015YE. VND 1,006,404 billion, increased by 18.3% Charter capital was VND 34,187 billion, 1.5 times compared to 2015YE and was 2.08 times over over 2012YE due to equitization’s capital surplus, 2012YE; BIDV was the first joint stock commercial shares issuance for existing shareholders and State bank to achieve VND 1 quadrillion in term of total capital injection. Major items in the owners’ equity assets, continued to maintain the position as the structure were retained earnings (VND 4,971 billion) largest commercial bank in Vietnam. and the Bank’s reserves (VND 3,377 billion). Total outstanding loans and investments achieved VND 949,940 billion; specifically total outstanding loans reached VND 751,448 billion – accounted for 13.6% of the market. Customer loans achieved VND 723,697 billion, up 20.9% over 2015YE and 2.13 times over 2012YE. Credit quality was strictly controlled. Credit growth went along with effective credit quality and risk management. Loan portfolio by industry is strictly supervised, positively moved into increasing retail banking and SMEs banking, agriculture and prioritized sectors. NPL ratio stood at 1.95%; the ratio of Group 2 loans accounted for 3.7%; Loan to deposit ratio (LDR) was 86.73% (within the limit of ≤ 90%); the ratio of short-term funding over long and medium term loans was 44.6% (within the limit of ≤60%).

FUND MOBILIZATION Fund mobilization was in line with credit management, mainly from reasonable sources with appropriate term structures. Fund mobilization growth rate was higher than credit growth rate, maintained the balance effectively and efficiency.

BIDV - ANNUAL REPORT 2016 67 IMPROVEMENT IN ORGANIZATIONAL STRUCTURE, CORPORATE GOVERNANCE AND MANAGEMENT POLICY

CORPORATE GOVERNANCE practical situation of the period, in accordance with 5 years business plan and BIDV's restructuring Under the condition of slow recovering economy scheme. and increasing competition between banks, BIDV determined the quality improvement, continuous Developed the branches, transaction offices innovation and corporate governance development ranking framework with retail banking oriented; was necessary for the business effectiveness. With timely amended Balance Score Card with newly the spirit of constant innovation, BIDV has improved established units; Increased to vertically assign the corporate governance in accordance with business targets to Departments/Units in order to the international practices across all operational measure product’s and customer’s effectiveness. aspects, specifically: Continued to improve, develop Dashboard reporting system to became an effective technical BIDV regularly improved the management of tool that assists business plan management developing strategy management and evaluates throughout BIDV and each area, individual branch the execution of the business plan in accordance and unit at branch, to ensure supervision of Head with international practices: The business plan office able to reach unit level and every BIDV staff. development and assigns were prepared in advance and processed from the beginning of the Drastically managed risk: Considering risk year. The allocation of business plan to branches management is the key criteria in improving has been simplified and focused on the main competitiveness, BIDV drastically applied critical indicators of regions, branch groups, key branches; measure to enhance the risk management ability the evaluation and management of business plan of the system, including credit granting control to are carried out monthly, quarterly and flexible to certain industries and sectors, supervising the credit application and disbursement conditions; strictly followed credit policy, enhanced credit quality supervision, controlled overdue loans, related loans at other financial institution; implemented the new internal credit ranking system along with loan classification in accordance with Circular 02 and completed grading, grouping and assigning credit approval for branches. Besides, BIDV resolutely performed the deployment of Basel II plan, completed 02 priority Projects in the Basel II deployment which is POR 01 - Minimum required capital calculation for operational risk and Project PIRLR01 – Consultation on the improvement of asset and liabilities management ability; comprehensively managed Basel deployment program and actively trained Basel contents throughout the Bank.

68 IMPROVEMENT IN ORGANIZATIONAL STRUCTURE, CORPORATE GOVERNANCE AND MANAGEMENT POLICY REPORT FROM THE BOARD OF MANAGEMENT THE BOARD REPORT FROM Managed capital integratedly, consistently, basement for the development of business activities: adjoining to the safety – effectiveness goal, 100% of operational activities at Head Office and completely renovated the finance and accounting branches has applied IT in daily management and activity. Fund Transfer Price (FTP) policy was operation, increased the proportion of automatic compatible with the market conditions, actively activity in several operations to 90%, 4th consecutive assisted on scale development and term structure years maintained the leading position in the which was suitable with the capital utilization. readiness of IT application in Vietnam. BIDV flexibly managed the payment reserves in ORGANIZATIONAL STRUCTURE AND order to guarantee the liquidity and increase the NETWORK EXPANSION income for the Bank. Promoted new functions in the major information technology projects such as In 2016, BIDV continued to implement the ERP and MPA, BIDV has successfully implemented restructuring of organizational structure towards solutions on changing management scheme a centralized, streamlined and customer oriented according to the automatical and concentrated model: processing information at Head Office in term of At Head Office: BIDV continued to implement accounting activities, increased data supervision and the restructuring of Head Office in accordance productivity, including expenditure management with international practices with the orientations: scheme for domestic non-business units, automatic (i) Centralized the functions of supporting, wages management and accounting, concentrated operating, risk management and important credit provision calculation and extraction, etc. customers to Head Office; (ii) Aimed towards initially implemented business effectiveness vertical business activity management according to measurement according to products and customers. departments; (iii) Continued to develop centralized Actively studied the global and regional management function through the establishment, modern banking management practices for addition of Head Office units’ functions; In order application in managing the Bank appropriate to implement the Board of Directors’ Resolution with the globalization trend; continued to develop on the organizational structure restructuring in the application of information technology into 2016-2020 period, Board of Management has corporate governance, concentrated resources drastically supervised the rearrange of back-office on major information technology project and drastically implemented the digital banking strategy. Considered information technology is a decisive factor for BIDV to become a leading financial institution in the region, in 2016 BIDV continued to implicate 36 strategic IT solutions in order to orient and develop modern banking by 2020, effectively supported wholesale banking, retail banking, treasury and core IT system for subsidiaries; implemented the Core banking system in Yangon Branch. IT has drastically supported and created solid

BIDV - ANNUAL REPORT 2016 69 units, internal controlling units in 2016. Besides, arrange human resources from MHB Head Office. In BIDV established/supplemented functions in 2016, BIDV has actively developed Large Transaction organizational structure: FDI Department come into Office scheme and Financial Supermarket Model operation from 01/02/2016, Can Tho representative at certain branches and received positive feedback office from 01/07/2016, supplemented functions of from market. Investment Management Department, supervised At international market: In 2016, BIDV has the internal industry project appraisal...to guarantee opened BIDV Yangon branch in Myanmar and the effectiveness and efficiency in organizational Representative Office in Russia. At the moment, structure of Head Office. BIDV is the only Commercial Bank in Vietnam that At branch: In 2016, BIDV newly established 08 has a network fully covered the CLMV (Cambodia – Branches and 16 Transaction Offices, that increased Laos – Myanmar – Vietnam) area. BIDV also initiated the number of BIDV domestic transaction network and co-organized 13 international economic to 190 branches and 815 transaction offices, cooperation programs to prepare for entering FTA, maintained the 3rd position in term of network in opening of ASEAN community and connecting the banking industry. Modern distribution channel to EU market, marked the footprint in North East network (ATM, POS) was supported with 1,824 Asia; successfully organized the “4 countries - 1 ATM and over 34,000 POS, maintained the 3rd destination” program in Myanmar and created great position in the market. MHB organizational model reputation in CLMV business community. transformation was completed in 2016, specifically: ADMINISTRATION AND INTERNAL Terminated the operation and merged 12 MHB REGULATION REFORM branches into regional branches in Mekong Delta area; Established 12 new branches in Hanoi, Ho Chi Regarding administration reform: Administration Minh city by transferring legal entity; Established reform was drastically implemented to increase 2 new branches in Ho Chi Minh city to receive, the Bank’s competitiveness. In 2016, BIDV Board

70 IMPROVEMENT IN ORGANIZATIONAL STRUCTURE, CORPORATE GOVERNANCE AND MANAGEMENT POLICY REPORT FROM THE BOARD OF MANAGEMENT THE BOARD REPORT FROM

of Management has issued directive documents concentrated and regularly innovated the human to accelerate the administration reform process; resources management activities. actively reviewed, discarded the unnecessary Recruitment: In 2016, BIDV has recruited 1,422 regulations and procedures. Compared to 2015, staffs. Recruitment always closely followed up BIDV has reduced 30% working process at Head the personnel demand of each unit, the increase Office, business processing time decreased by in number of staff was allocated in accordance between 12% and 65%. According to Nielsen with Board of Management guidance and human Vietnam evaluation, administration reform was one resources development strategy to 2020. of BIDV highest appreciated criteria assessed by customers in 2016. Regimental document: In 2016, salary policy of BIDV continued to implement simultaneously, Regarding internal regulation consolidation: thoroughly in the Bank. Employee income was In 2016, BIDV has amended the Charter on improved compared to the previous years; average organization and operation, Regulation on the employee income grew by 5.9% compared to organization and operation of BOD that related 2015. The regimes, policies with employee has to legal representative; enhanced authorization been concerned, executed and solved timely, from BOD to Board of Management and CEO thoughtfully to secure the employee benefit. through 60 authorizing documents, increased the responsibility of mid-level managers attached Training: Training activity continued to be with authority supervision regime, guaranteed enhanced in the Bank. In 2016, BIDV has organized the comprehensiveness, compactness and 404 training sessions with 24,823 trainees. Besides effectiveness. the internal training, BIDV has actively cooperated HUMAN RESOURCES MANAGEMENT with external agencies to organize training sessions to increase the professional knowledge, managerial Since human resources was the most valuable asset skills to develop high quality human resources, and the core competitive resource, BIDV always satisfy all demands from customers and the market.

BIDV - ANNUAL REPORT 2016 71 2017 BUSINESS PLAN

IN 2017, VIETNAM ECONOMY IS EXPECTED TO CONTINUE GROWING AND RECOVERING WITH THE GDP GOAL OF 6.7%, INFLATION IS CONTROLLED AT 5%. UNDER THE GUIDELINES OF THE GOVERNOR OF THE STATE BANK OF VIETNAM AT THE 2017’S BANKING CONFERENCE, BIDV’S BOARD OF DIRECTORS HAS ISSUED RESOLUTION ON THE APPROVAL OF ORIENTATION, BUSINESS PLAN, MISSION FOR 2016-2018 PERIOD AND FOR THE YEAR 2017, DETERMINED KEY CRITERIA AND MISSIONS AS FOLLOWS:

MAIN TARGETS IN 2017

Indicators 2017 Target

Total fund mobilization Increase by 16.5%

Total outstanding loans Increase by 16%

Profit before tax VND 7,750 billion

NPL ratio < 3%

ROA 0.5 % - 0.6%

ROE ≥13%

Dividend ≥7%; Not lower than 12 month deposit rate in VND

DIRECTION OF 2017 KEY TASKS The year 2017 is an important year in improving the national competitiveness, drastically reforming administration, enhancing the position of Vietnam in ASEAN, renovating the growth model among with sustainable macroeconomics, protecting the environment and social security, striving to reach the basic criteria on business environment equals to ASEAN + 4. Based on the monetary policy guideline of Government and State Bank of Vietnam, BIDV considered 2017 is the year of “Discipline – Responsibility – Effectiveness” with the main targets and key tasks as follow:

72 DIRECTION OF 2017 KEY TASKS

1. Striving to fulfill the business plan; Focusing on effectiveness, concentrating on priority sectors managing the business operation; ensure the including retail, agriculture, export, supporting safety – quality – effectiveness; Defining the industry, SME, high-tech appliance business, FDI vision, mission of BIDV and strictly follow the customer and economical industries that benefit strategy approved by Annual General Meeting from Free Trade Agreement. of Shareholders, Board of Directors to maximize 7. Strictly controlling credit quality; Drastically benefit for shareholders and employees. restructuring credit portfolio, decreasing REPORT FROM THE BOARD OF MANAGEMENT THE BOARD REPORT FROM 2. Affirming the position as the largest commercial the proportion of mid-long term and large bank in Vietnam; Maintaining the role of the customer loans, streamlining credit growth nation’s leading commercial bank in term of with fund mobilization; Continuing to control credit, fund mobilization, investment, retail credit by industry, supervising the appraisal banking...Actively integrating into global finance and disbursement simultaneously with debt and banking market based on utilizing the settlement, and gaining significant improvement internal resources, applying the modern banking in credit quality. management measures in accordance with 8. Creating significant improvement in retail international practices. banking, concentrating on retail market and 3. Drastically implementing the financial increase non-interest income; Developing, enhancement strategy in 2017-2020 period; diversifying product portfolio, increasing the Concentrating on the execution of the chartered proportion of technology and utility in retail capital raising measures, such as strategic and banking product, maximizing cross selling and financial investors selection, private placement insurance service. and employee stock ownership plan (ESOP); 9. Completely renovating human resources Strictly controlling asset quality, appropriate asset management, concentrating on increasing structure, economizing the cost to concentrate productivity with 3 factors: (i) employee skills, the capital for business activity, increase the (ii) organizational structure model, and (iii) operational effectiveness. increasing the application of information 4. Actively renovating the organizational structure, technology throughout the Bank as well as each increase the managerial capability along with unit; Drastically increasing human resources the drastical authorization; Implementing for front office units; enhancing the training, the organizational structure innovating continuing to modify salary regime in accordance measures, striving to complete the changing with supervising the effectiveness and motivation of management concentration model to Head regime as well as renovating the reward policy. Office; Executing the vertical management model 10. Drastically implementing Information Technology with certain operations; Continuing to renovate in each business activity; Concentrating on the organizational structure in branches by increasing execution of major Information Technology front office units. project based on the 2016-2020 IT Strategy; 5. Drastically performing the administration reform; Gradually digitalizing the operational procedures; Supervising the regulation and regime system, Supporting administration reform and increasing minimizing the processing time; Proposing the the productivity. internal regulation reforming scheme, enhancing 11. Carrying out social security activities in line the application of Information Technology in with the 60th anniversary of the Bank; Executing business operation, simplifying the transactional promotion activity, enhance the reputation, documents and approaching the practice of a position and brand value on the occasion of leading financial institution of the region. 60 years glorious of Bank for Investment and 6. Credit growing along with safety, sustainability, Development of Vietnam.

BIDV - ANNUAL REPORT 2016 73 74 SPREADING VALUES 5

DIRECTORS’ REPORT

OPERATION RESULTS IN 2016

BOARD OF MANAGEMENT’S PERFORMANCE EVALUATION

BOARD OF DIRECTORS’ ORIENTATION FOR 2017

BIDV - ANNUAL REPORT 2016 75 OPERATION RESULTS IN 2016

2016 observed moderate global economic recovery and many countries and regions were said to be trapped in a low-growth cycle. Within such global context, Vietnam’s economy has inevitably demonstrated correllated directions. Throughout 2016, Vietnamese government, ministries, industrial bodies and provincial goverment had been determined to implement various restructuring policies to stabilise and overcome difficulties of macroeconomic environment. The goverment also employed 3 initiatives in growth model, strengthen competivitness in order to promote sustainable growth, and to improve business and investment environment. Vietnam’s economy also achieved important successes as follows: (i) strong GDP growth rate at 6.21% continued to expand size of the economy. (ii) an effectively controlled inflation rate helped to stabilised the economy (CPI index in December 2016 was at 4.74% higher than same period in 2015, which is under 5% limit), (iii) investment and trade achieve strong results; (iv) Vietnamese economy continued to intergrate deeper into global market, (v) financial market had been characterised by sufficient institutional liquidity, resilient interbank market and moderate interest level and slightly reduced loan rates compared to previous year. Credit was optimally allocated to priority industries and sectors; (vi) Exchange rate risen roughly 2% for the whole year, despite certain fluctuation due to international market, domestic supply and demand of foreign currency experienced no dramatic pressure. In that context, with great determination and consensus, the Board of Directors has made great efforts, focusing on directing the whole Bank to comprehensively and synchronously complete targets and objectives set out in the Resolution of 2016 Annual General Meeting of Shareholders and successfully completed the restructuring plan of BIDV. The outstanding achieved results are as follows:

76 OPERATION RESULTS IN 2016

OPERATION RESULTS IN 2016 CORPORATE GOVERNANCE The Board of Directors has supervised BIDV to Together with completion of business targets set sychronizely, completely attain the business targets

by 2016 AGM’s Resolution, the BOD has focused on REPORT DIRECTORS’ approved by Annual General Shareholders Meeting directing implementation of other contents such in the Resolution No. 1155/2016/NQ-DHDCD. as organizational models, corporate governance, Specific results of 2016 according to the audited infrastructure, internal regulations, IT systems, financial reports are as follows: etc. that meet operational requirements of the Total assets at 31 Dec 2016 reached VND system and provide foundation for the effective 1,006,404 billion, an increase of 24% compared to and sustainable development of BIDV. Some key that of 2015, accounted for 14% of total assets of the contents were as follows: banking industry in Vietnam. Implementing operation governance of BIDV Fund mobilization (including customer deposits, in compliance with applicable laws, strictly valuable papers, deposits and borrowings are following directions of the Government, SBV, recognized in the mobilization) increased favorably, contributing to effective implementation of meeting the demand for capital and ensuring socio-economic development plan for 2016 liquidity requirements of the Bank. At 31 Dec 2016, and implementing national monetary policies. fund mobilization reached VND 940,020 billion, in Issuing internal decision regarding BIDV’s which fund mobilization from organizations and organizational governance and activity households reached VND 797,689 billion, increased by 21.1% compared to the previous year, meeting Submitting for AGM’s approval on the amendment the targets set by AGM (up 21%-22%). of BIDV’s Charter and Regulation on BOD’s organization and operation in accordance with Total outstanding loans (including loans to changes in 2014 Law on Enterprise; Submitting for organizations and individuals) reached VND 751,448 approval of Extraordinary General Shareholders‘ billion, an increase of 17.85% compared to the Meeting regarding change of legal representative previous year. Credit growth focused on priority in the Charter and the BOD’s Regulation as required sectors. Credit quality was strictly controlled, NPL by SBV. ratio stood at 1.95%, lower than the target set by AGM (<3%). Issuing Resolution on management and governance model for 2016-2020 period; Resolution on decision Profitability grew stably: Profit before tax was making mechanism, Resolution on delegation and VND 7,709 billion, an increase of 3.16% compared authorization to improve BOD’s efficiency. to that of 2015, proactively making provision to ensure financial capacity. Other indicators in term Issuing internal documents on specific of structure and operation safety basically meet activities such as Cooperation Policy between objectives, ROA and ROE achieved 0.67% and 14.7% functional departments and Supervisory Board, respectively. Consolidated CAR ratio exceeds 9%, Admininstration reform in 2016-2018 period, meeting safety indicators of liquidity and investment competency framework for Risk Management limits set by SBV. group...

BIDV - ANNUAL REPORT 2016 77 Directing to strengthen and complete The BOD continued to implement human organisational model reform at Headquarters, resources plan for senior management for 2016- its subsidiaries and also network development: 2018 period, Human Resources Plan for 2016 and direction for Human Resources Plan for 2016-2020 On organizational model: Consolidated BOD’s period, with priority for additional resources for supporting commitees according to guidance direct business activities, retail banking and network from SBV and market best practices, completed development and employment of IT in human organizational model at Headquarters, including resources management. establishing FDI Banking Department, consolidated retail banking activities at branch level, directed Stipulating and supervising risk management development and consolidation of organizational policies model for overseas branch in Myanmar and Representative office in Russia... Focus on directing risk management policies, supervising the authorization in market risk On network development: during 2016, BOD management, interest rate risk in the banking has directed opening of 22 new branches and book, liqudity risk, operational risk, ISO, anti-money 16 transaction offices (in which 12 new branches laundering, FATCA, Basel implementation; apply were established on the basis of reorganised and maintain the information management system, network from MHB) in Hanoi, Hochiminh City and quality control system; amend accountability Quang Ngai, BIDV’s network now consists of of policy in operational activities, policies on services 190 branches and 815 transaction offices, 1,824 provider evalulation, risk management policy for ATMs and over 34,000 POS. Futhermore, BOD also directed on revision and reorganisation of BIDV’s overseas branches; with more attention to transaction office network to improve efficiency. internal audit, monitoring and supervision.. On human resources management Directing on investment activities and accelerating divestment from none-core In Sepember 2016, following the Chairman of activities BIDV’s official retirement, the BOD has prepared for the transfer of duties according to relevant Progress on BIDV’s withdrawal from none-core regulations, delagated a Board member to take investments includes: completing divestment at charge the Board’s activities, and also oganized VID Public Bank, implementing procedures to sell an extraordinary general shareholders‘ meeting 49% of shares at BIDV Financial Leasing Company to approve the revised Charter and amend legal to Sumitomo Mitsui Trust Bank to establish BIDV- represtative, to ensure smooth continuation of SumiTrust Leasing Company Joint Venture; directing managment. on devepment and implementation of reform The BOD also appointed a new Deputy General proposal for subsidiaries and joint ventures to focus Director, reappointed the Chief Accountant; and on core business and products with competitive also finalised plans for senior management from MHB. advantages and favourable areas.

78 OPERATION RESULTS IN 2016

Directing implementation of capital management, other risk management and system expenditure: asset purchases, capital safety practices in accordance with Resolutions construction, IT system approved by the BOD. DIRECTORS’ REPORT DIRECTORS’ Directing revision of all projects on asset purchases, Directing implementation of financial capital construction, IT system investment; enhancement solutions, preparation of terminated inefficient projects to focus on core international bond issuance projects in order to improve infrastructure, expand In 2016, BOD has proactively directed oprerating capacity and network. implementation of raising capital plan including: (i) Speeding up progress on core projects, namely Propose to the Prime Minister, Ministry of Finance core banking project, Basel application, Loan and SBV regarding difficulties and solutions in Management solution LOS. raising capital for BIDV; SBV has reported to the Government on capital raising plans for commercial Directing revision, completion of credit banks. (ii) Approach and work with potential procedures and policies for clients; directly partners in order to sell shares to financial/strategic approve credit within BOD’s designated investors. authority Directing implementation of the following In 2016, BOD had cooperated closely with Board contents approved by AGM in 2016 as follows: of Management to directly supervise credit risk Completing 2016’s dividend payment in cash at the rate of 8.5% under the plan approved by regulatory bodies (instead of shares dividend). Actively researching for solutions to: raise charter capital, establish subsidary in investment management industry through buying shares of BIDV Partners company, provide payment services for derivatives transactions; however, the Bank has not produced specific results Directing to ensure quality and completion of a series of celebration events for BIDV’s 60th anniverary, including corporate book, documentary, photo album, memoirs on history and development of BIDV and other celebration events.

BIDV - ANNUAL REPORT 2016 79 BOARD OF MANAGEMENT’S PERFORMANCE EVALUATION

Through the year 2016, the Board of Directors Management. Upon the Board of Directors’ request, focused on supervising the compliance with its the Board of Management has drafted specific plans guidances and directions, assuring that all the and goals for each business unit and each Board of Resolutions, Decisions, and instructions from Board of Management’s member in each period, and reported Directors and the Chairman have been implemented not only results but also difficulties to the Board of timely and frequently with clear responsibilities. Directors for necessary solutions and amendments. The Board of Directors has supervised the Board of Board of Directors and the Board of Management Management in accordance with BIDV’s Charter, have closely coordinated and timely directed the the Board of Directors’ Regulation on organization Bank’s operation, accordingly the Board of Directors and operation, BIDV’s Regulation on Governance, regularly assess BIDV’s performance to promptly and and relevant authorization of the Board of Directors effectively deal with arising problems. and the Legal Representative to the Board of

BOARD OF DIRECTORS’ ORIENTATION FOR 2017

The global economy in 2017 is forecasted to to export-import activities; (ii) good signs of FTA remain the growth momentum but slowly as a being negotiated and improvements in business result of expectation for a healthy US economy environment; (iii) improved consumers’ confidence; and steady growth of emerging and developing (iv) credit rate remains increased. The goals in 2017, countries. However, global economy is still facing therefore, are 7% GDP growth and 4% inflation. In with huge challenges: (i) emerging and developing terms of finance-banking market, the State bank economies (especially Brazil, China … ) are slowing of Vietnam continues to operate the monetary down the growth pace; (ii) Europe, particularly policy actively, flexibly and in accordance with fiscal Eurozone, is facing a slow economic recovery, policy and other macroeconomic policies to secure systemic risk of banking finance sector in Italia macroeconomic balance, low inflation rate and and political risk from Brexit; (iii) the possibility support for economic growth at reasonable rate. of US rate hike pressures interest and exchange rate to many countries including Vietnam; (iv) the On the basis of above forecasts together with unpredictability in relationship between powerful awareness of difficulties and challenges from countries/ regions under Trump’s government. macroeconomic environment, based on the orientation of government in restructuring Vietnam economy in 2017 will be challenged economy and SBV’s direction of implementing a by complicated global economy, unusual restructuring financial institutions project, as well as weather conditions, climate changes and internal recognition of responsibility assigned by the AGM, shortcoming of economy itself. Nevertheless, there the BIDV’s BOD defines the focus of direction and are motivations for economic growth such as (i) execution in 2017 as follows: FTA agreements were fulfilled and kept spreading

market leaderofcustomer satisfaction. market to striveto become with hightechnology; andenriched products whichare self-contained andinsurance developing all-inbanking andproducts, ofservices diversifying portfolio customers,changing mindsetto serve non-interest income/total incomeby strongly of incomeandproportion increase service To focus onstructureofincomesources, and sustainability ofthewholeBank’sand sustainability group. heading to goalsofstability, safety, efficiency of institutionalrestructure inthesecondstage, To continuebuildingandcompletingproject affirm the topaffirm retailbankin Vietnam. tocategorized andbigenterprises; by industries andlowering creditenterprises concentration of focusing onretail customers, SME,FDI To restructure customer basewithdirection standardized indicesofoperational safety. as well asunrealized interest andgradually asset portfolio, fierce tosolve effort baddebt ability, improved of structure andquality To grow solidlybasedontheenhancedfinancial

to reach “ QualifiedASEANBanks” standard. To follow theroadmap to improve credit rating growth. of2017-2020to ensureperiod sustainable members ofBoard inthenext ofManagement To consolidate seniorstaff, membersofBOD, the wholesystem. offices toimprovetransaction of productivity ofbranchesand network framework, To organize andcomplete operational for foreignservices anddomesticcustomers. information technology to offer thebest To becomethetop bankin Vietnam inapplying responsibility to community. tocontribute socialwelfare, showing BIDV’s thebestvaluestoto shareholders; bring to To ensure employee’s incomeandcommit management andrestructuring. units onthebasisofreinforcement of subsidiaries, jointventures, overseas business To improve of operationalefficiency ORIENTATION FOR2017 BOARD OFDIRECTORS’ BIDV -ANNUAL 2016 REPORT

DIRECTORS’ REPORT 82 EXPANDING GLOBALLY 6

CORPORATE GOVERNANCE

THE BOARD OF DIRECTORS

PERFORMANCE OF THE SUPERVISORY BOARD IN 2016

TRADING TRANSACTIONS, REMUNERATIONS AND BENEFITS

OF THE BOARD OF DIRECTORS AND SUPERVISORY BOARD

BIDV - ANNUAL REPORT 2016 83 BOARD OF DIRECTORS

THE BOD’S OPERATIONS IN 2016 IN 2016, THE BOARD OF DIRECTORS (THE BOD) OF BIDV ORGANIZED PLENARY MEETINGS AND PERMANENTLY COLLECTED WRITTEN OPINIONS ON ISSUES WITHIN THE AUTHORITY OF THE BOD TO ENSURE A COMPREHENSIVE VIEW OF ALL BUSINESS OPERATIONS, MAKING TIMELY DECISIONS ON CRITICAL ISSUES OF THE BANK, AS WELL AS OVERSEEING THE OPERATIONS OF THE BOARD OF MANAGEMENT. OPERATIONAL RESULTS OF THE BOD IN 2016 ARE PRESENTED IN DIRECTORS’ REPORT.

THE BOD’S OPERATIONS

Operations of the BOD’s members The BOD members have fully exercised their rights voting on all issues within the session contents; being and duties in accordance with the Bank’s Charter and personally responsible by law to the AGM and the BOD authorized by the AGM, including: on his/her decision. • Exercising the BOD’s tasks and rights in accordance • Implementing resolutions and decisions of the with the Regulation on Organization and Operations AGM and the BOD in line with the Bank's Charter and of the BOD and assignments from the Chairman/ applicable laws. Member in charge of the BOD for benefits of BIDV and Requesting the CEO, SEVPs and directors of its shareholders. • departments to provide information and documents • Reviewing and appraising the Bank operation on finance and operations of BIDV and/or of each performance and contributing to the development of department for exercising his/her duties; strategy and business plan from time to time. • Being personally responsible to the AGM and the • Attending all meetings of the BOD; discussing and BOD on his/her activities, as well as disclosing all related benefits according to applicable laws.

84 BOARD OF DIRECTORS

Meetings of the BOD In 2016, BIDV’s BOD held 6 meetings – of which 4 regular meetings on 11 March 2016, 07 Jun 2016, 21 Oct 2016, 20 Dec 2016 and 2 extraordinary meetings on 1 Sept 2016, 16 Sept 2016.

Starting/ No. of ending date Attendance No. Member of the BOD Position meetings Reasons for absence of member rate attended of the BOD

- Absence for business trip. Authorized

member of the BOD GORVERNANCE CORPORATE 1 Sept 2016 1 Mr. Tran Bac Ha Chairman 1/6 17% Tran Anh Tuan to chair (ending) the meeting. - Retired from 01 Sept 2016

2 Mr. Phan Duc Tu Member – CEO 6/6 100% 3 Mr. Nguyen Huy Tua Member 6/6 100% 4 Mr. Tran Anh Tuan Member 6/6 100% 1 May 2016 Retired from 01 May 5 Mr. Le Dao Nguyen Member 1/6 17% (ending) 2016 - On leave

6 Mr. Tran Thanh Van Member 5/6 83% - Authorized member of the BOD Phan Duc Tu to attend the meeting. 7 Mrs. Le Thi Kim Khuyen Member 6/6 100% 8 Mrs. Phan Thi Chinh Member 6/6 100% 9 Mr. Ngo Van Dung Member 6/6 100% Mrs. Nguyen Thi Kim 1 Apr 2016 Retired from 01 Apr 10 Member 1/6 17% Thanh (ending) 2016 Independent 11 Mr. To Ngoc Hung 5/6 83% On leave Member 12 Mr. Nguyen Van Loc Member 6/6 100% 13 Mr. Dang Xuan Sinh Member 6/6 100%

BIDV - ANNUAL REPORT 2016 85 Activities of the Independent Board • Participating in review of financial reports members audited by an independent auditor, giving comments or requesting the Bank’s directors, BOD’s independent members also fully exercise managers, independent auditors and internal their tasks and duties which are defined as auditors to clarify related issues in the reports; follows: • Participating in approval of the BOD’s • Participating in approval of issuing internal programs and working plan and the AGM’s regulations on organization, governance and programs, contents and documents; convening operations of BIDV under the jurisdiction of the AGM or collecting shareholders’ written the BOD in accordance with the Law on Credit opinions to approve resolutions and decisions Institutions and related laws. of the AGM. • Assigned by the BOD, participating in • Participating in review and approval of BIDV’s approval of issuing policies and strategies annual report. under the authority of the BOD; participating in • Performing other duties assigned by the supervising the implementation of policies and Chairman in each period consistent with strategies approved by the BOD. regulations of authorities.

LIST OF THE BOD’S MEMBERS HAVING BUSINESS MANAGEMENT CERTIFICATES; LIST OF THE BOD’S MEMBERS PARTICIPATING IN BUSINESS MANAGEMENT PROGRAMS DURING THE YEAR All BOD’s member have certificate on business management. Training programs related to business management that the BOD’s members, members of the Supervisory Board, CEO, Board of Management (BOM) and Secretaries attended according to regulations as follows:

No. Training program/Conference Time Participants

TPP Conference- Opportunities, 2 BOD’s members and 3 members 1 threats and solutions for Vietnamese 12 May 2016 of the Supervisory Board businesses

06 Jun-18 Nov 2 Future banking leaders 1 secretary of the BOM 2016

Vietnam international conference in 3 09-10 Jun 2016 1 BOM’s member finance 2016

Building effective Board of Directors 2 members of Directors’ Secretariat 4 in Bank (IFC, Hanoi National University, 05 Oct 2016 and 2 members of Internal audit Banking Association) (the Supervisory Board) Supervisory environment and 2 members of Directors’ Secretariat 5 information disclosure (IFC, Hanoi 06 Oct 2016 and 2 members of Internal audit National University, Banking Association) (the Supervisory Board) Business Finance Management: 1 member of the Supervisory 6 Challenges and new opportunities 25 Oct 2016 Board (CPA Australia)

Rules for risk management (PWC 3 members of the Supervisory 7 06-08 Dec 2016 Vietnam) Board

Conference on Listing regulations and 8 Information disclosure regulations on 29 Dec 2016 2 members of Directors’ Secretariat Ho Chi Minh Stock Exchange

86 BOARD OF DIRECTORS

OPERATIONS OF THE BOD’S 6. Director of Corporate Banking Dept. COMMITTEES 7. Director of Credit Management Dept. BIDV has four committees under the BOD, 8. Director of Market and Operational Risk namely Risk Management Committee, Management Dept. Human Resources Committee, Strategy and Organization Committee and Information 9. Director of Legal Affairs. Technology Committee. The BOD promulgated 10. Vice-Director of Credit Management Dept. separate organizational and operational regulations for each committee. • Full-time, standing members: Managers of Assistance for Risk Management Committee. Risk Management Committee In 2016, Risk Management Committee has In order to strengthen the management responsibility of capacity of the BOD, this committee has been established under the direction of the BOD with Advising and consulting the BOD on risk GORVERNANCE CORPORATE objectives to consult, advise and assist the BOD management strategies and policies; measures in settlement of the Bank’s risk management to prevent and control risks on main activities issues, as well as to approve credits as being such as credit, investments; market, operational authorized by the BOD. and liquidity risk management. The committee consists of two sub-committees, Advising the BOD in planning policies and including one in charge of managing credit and mechanisms for risk management throughout investment risks and the other in market and the system such as: Implementing the Overall operational risks. The former’s role is to advise Risk Management Framework complied with and consult the Committee in the course of international practices and SBV’s regulations; performing duties related to credit, investment Issuing risk appetite statements of BIDV in 2016; and make judgments about credit and Implementing the projects of risk management investment. The latter is in charge of advising in compliance with Basel II, III in BIDV. and consulting the Committee on issues related Implementing the direction of the BOD on to market and operational risk; approving enhancing and completing BIDV’s institutional transaction limits on market, operational and development, improving risk management liquidity risks. The committee’s meetings are capacity according to international practices. held on quarterly basis or ad-hoc basis as needed. Participating in credit and investment approval as being authorized. • Chairman of the Committee: Mr. Ngo Van Dung – Member of the BOD. Approving the method of determining risk tolerance, market and liquidity risk limits. • Members: Human Resources Committee 1. Mr. To Ngoc Hung – Member of the BOD The human resources committee is the 2. Mr. Tran Luc Lang – Senior Executive Vice consulting and assisting body for the BOD President. in implementing the Board’s rights and 3. Mr. Quach Hung Hiep – Senior Executive Vice obligations on human resources management, President. development, compensations, bonuses, policies as well as other HR-related issues. 4. Mr. Le Ngoc Lam – Senior Executive Vice President. The committee’s meetings are held on quarterly basis or ad-hoc basis when needed. In case of 5. Mr. Can Van Luc – Director of BIDV Training not holding a meeting, the Secretariat body of School the Committee may send reports and collect

BIDV - ANNUAL REPORT 2016 87 written opinions from the Committee members to strategic management and organizational on relevant issues as authorized. structure of the Bank. BIDV is among the first banks that set up Strategy and Organization Chairman of the Committee: Mr. Phan Duc Tu • Committee in accordance with international - Member of the BOD-CEO. practice, paving for a development of an • Members: advanced and modern bank. With the function of consulting and assisting the BOD 1. Mr. Tran Thanh Van - Member of the BOD. on issues relating to strategic management 2. Mrs. Le Thi Kim Khuyen – Member of the BOD. and organizational structure of the Bank, the committee’s meetings are held on quarterly 3. Mrs. Phan Thi Chinh – Member of the BOD. basis. 4. Mr. Nguyen Thien Hoang - Senior Executive Chairman of the Committee: Mr. Tran Anh Vice President. • Tuan - Member of the BOD. 5. Director of Finance Dept. • Members: 6. Director of Human Resources Dept. 1. Mr. Phan Duc Tu - Member of the BOD - CEO. 7. Secretary: Vice-Director of Human Resources Dept. 2. Mr. Ngo Van Dung - Member of the BOD. In 2016, Human Resources Committee 3. Mr. Tran Phuong – Senior Executive Vice consulted the BOD on President. Providing consultancy on amendments and 4. Mr. Le Kim Hoa – Senior Executive Vice supplements to the process and regulations on President. planning and appointment of staff. 5. Mr. Can Van Luc – Director of BIDV Training Giving comments on wage policies, bonuses School and other regimes for employees. 6. Director of Human Resources Dept. Participating to direct the work of reviewing, renewing and improving policies and strategic 7. Member cum Secretary: Director of Strategy solutions for managing and developing human and Corporate Planning Dept. resources of BIDV. In 2016, Strategy and Organization Strategy and Organization Committee Committee successfully completed the tasks of consulting and assisting the BOD In addition to Risk Management Committee in matters with broad influence throughout and Human Resource Committee, Strategy the Bank, relating to development and Organization Committee was established strategy, business plan and organizational to consult, assist the BOD in matters relating structure, including:

88 BOARD OF DIRECTORS

Consulting on report for cluster of branch 5. Director of Finance Dept. restructuring and regional management model. 6. Director of Premises and Facility Management. Advising on transforming BIDV’s organizational Permanent member: Mr. Dang Manh Pho – model according to TA2 recommendations and • Former Director of Information Technology international practices. GORVERNANCE CORPORATE Center Giving opinions on BIDV’s business plan 2017. • Independent members. Consulting on report for completing In 2016, Information Technology Committee overnance model according to consultant’s directed information technology activities recommendations and international practices. and deployed BIDV’s key information Advising on: (i) Project for setting up technology projects, such as: Representative office in Can Tho; (ii) Vietnam 2035 Participating in development and Report - Assessment of the impact on banking implementation of the Strategy for Information sector and the proposed behaviors of BIDV. Technology Development for the period of 2015- Information Technology Committee 2020, vision to 2030 approved by the BOD and concretized by action programs during this time. Under the direction of the BOD, Information Technology Committee is established and Participating, directing to build and deploy authorized to decide IT related issues. The information technology plan for 2016, as well committee’s meetings are held on quarterly basis as supervising and strictly implementing in or upon request by Committee Chairman or Vice- accordance with the approved schedule. Chairman as empowered by Chairman. Participating in directing the implementation, • Chairman of the Committee: Mrs. Phan Thi solving difficulties and speeding up the Chinh – Member of the BOD in charge of IT. implementation of major IT projects in 2016 (Core banking conversion project, LOS, Data center, etc.) • Members: Participating in directing the appraisal council of 1. Mr. Tran Phuong – Senior Executive Vice IT projects to appraise and submit for approval President. of procurement stages and implementation of IT 2. Mr. Le Kim Hoa – Senior Executive Vice projects. President. Advising and directing the project to implement 3. Director of Technology Department core banking system for BIDV’s branch in Myanmar. 4. Director of Information Technology Center

BIDV - ANNUAL REPORT 2016 89 PERFORMANCE OF THE SUPERVISORY BOARD IN 2016

PERFORMANCE OF THE Improved the internal regulations of the SUPERVISORY BOARD IN 2016 Supervisory Board and internal audit department; Strictly followed the functions stipulated Directed to audit and assess the internal in Laws, Bank’s Charter, Regulations on control system on some key business areas the organization and operations of BIDV’s (credit, customer transactions, cards, risk Supervisory Board. In 2016, the Supervisory management, anti money-laundering) and Board carried out and completed key activities audit the performance of 1 subsidiary; made as highlighted below: recommendations to improve and enhance the effectiveness, efficiency of internal control Supervised the compliance with Laws, Bank’s system; building the internal audit plan in 2017; Charter and Resolutions of General Meeting of shareholders; Supervised the corporate Coordinated with and supervised governance and cooperation of the BOD and independent audit firm in auditing of financial Board of Management; statements, evaluation of the internal control system of BIDV; Reviewed and assessed performance of internal audit, supplemented and consolidated Assessed consolidated financial statements human resources for internal audit. Organized 2015 and first half financial statements 2016, training for members of the Supervisory Board reviewed the results of financial statements of and internal auditors; the first and third quarter 2016; Directed to choose consultant for capability Updated the lists of related persons of the improvement, efficiency enhancing of internal BOD’s members, CEO, Supervisory Board’s audit in accordance with international practices; members and major shareholders.

90 PERFORMANCE OF THE SUPERVISORY BOARD IN 2016

MEETINGS OF THE SUPERVISORY BOARD IN 2016 In 2016, the Supervisory Board organized 04 quarterly meetings with the completed attendance of 03 Supervisory Board’s members, regularly took the written opinions, discussed and approved proposals in assigned functions and tasks, concretely:

No of Attendance No Members Title Member since meetings rate attended CORPORATE GORVERNANCE CORPORATE

Head of 1 Vo Bich Ha Supervisory 17/4/2015 04/04 100% Board

2 Cao Cu Tri Member 08/3/2012 04/04 100%

3 Nguyen Thi Tam Member 08/3/2012 04/04 100%

REVIEW OF THE SUPERVISORY BOARD ON THE OPERATIONS OF THE BOARD OF DIRECTORS, BOARD OF MANAGEMENT The Supervisory Board supervised the activities of the Board of Directors, the Board of Management in accordance with BIDV’s Charter; Regulation on the organization and operation of the BOD; BIDV Governance Regulation; CEO's Management Regulation; Decentralization and Authorization Regulation of BOD, Chairman and CEO. Accordingly, the Board of Directors has instructed to fully, promptly and effectively implement the resolutions of the General Meeting of Shareholders, the direction of Government and SBV in the implementation of the socio-economic development plan and national moneytary policy. The Board of Directors has issued instructions, resolutions and decisions according to its competence to direct and ensure the smooth operation of BIDV system in accordance with orientation, strategy and plan as well as to continue to strengthen the organizational model and network. The Board of Management has planned, developed and implemented plans and tasks according to directions of the Board of Directors.

SUPERVISORY BOARD ORIENTATION FOR 2017 In 2017, the Supervisory Board will continue to strengthen the supervision activities; consolidate human resources for internal audit, focus on completing capacity and effectiveness improvement project of internal audit department to adapt with international practices; direct the internal audit department to implement and complete the audit plan 2017, study the application of tools and information technology to support internal audit activities; direct the establishment and approval of the internal audit plan 2018; direct the selection of an independent auditor in 2018 and coordinate with an independent audit firm during the auditing process at BIDV; continue to improve legal materials serving the activities of the Supervisory Board and Internal Audit Department.

BIDV - ANNUAL REPORT 2016 91 TRADING TRANSACTIONS, REMUNERATIONS AND BENEFITS OF THE BOARD OF DIRECTORS AND SUPERVISORY BOARD

SALARIES, REMUNERATIONS AND BENEFITS OF THE BOARD OF DIRECTORS AND SUPERVISORY BOARD The Board of Directors, the Board of Management and the Supervisory Board were entitled to remuneration and other benefits according to the current regulations of BIDV. In particular, the remuneration of the members of the Board of Directors, the Board of Management and the the Supervisory Board was within the general salary expense of BIDV and be paid according to the position and title of the work attached to the level of job performance. In 2016, the actual remuneration of the Board of Directors and the Supervisory Board was 0.44% of profit after tax (in proportion approved by the General Meeting of Shareholders). INTERNAL TRANSACTIONS

Number Reason for Relationship of shares Number of shares increase/ No Name with internal owned at the owned at the end decrease shareholder beginning of of the period (selling/ the period buying, converse, No of No of Rate Rate reward…) shares shares

Sister – Independent 1 To Thi Bich Nga member of the BOD 0 0% 1,000 0.000029% Buying To Quoc Hung

THE IMPLEMENTATION OF CORPORATE GOVERNANCE REGULATIONS BIDV's corporate governance is in line with the corporate governance regulations applicable to large- scale and listed public companies such as the Credit Institutions Law, Enterprise Law, Securities Law, Decree 121/2012/TT-BTC on corporate governance applicable to public companies, Circular 155/2015/ TT-BTC on Guidance on the Disclosure of Information in the Stock Market and other circulars and regulations. In 2016, BIDV submitted to the General Meeting of Shareholders to amend the Bank’s Charter and the Regulation on the organization and operation of the Board of Directors in accordance with the changes of the Enterprise Law 2014. BIDV also submited to Extraordinary Meeting of Shareholders to amend the terms related to the legal representative in the Charter and Regulations on the organization and operation of the Board of Directors at the request of the State Bank. In the coming time, BIDV will continue to innovate and improve on corporate governance regulations as well as develop sustainably and sensitively to the market demand to timely adjust the regulations in accordance with the Law, BIDV's operational requirements and international best practices. These will gradually make BIDV a modern Bank with high business efficiency and meet the requirements of development and deep integration into the regional and global financial systems.

92 TRADING TRANSACTIONS, REMUNERATIONS AND BENEFITS

CONTRACTS OR TRANSACTIONS WITH INTERNAL SHAREHOLDERS

Amount No Related parties Relationship Transations (VND million)

1 State Bank of Vietnam (SBV) Direct management Deposits in SBV 34,067,385 2 State Bank of Vietnam (SBV) Direct management Loans from SBV 9,519,971 3 State Treasury Direct management Deposits of State Treasury 28,847,030 4 Ministry of Finance (MOF) Direct ownership Deposits of MOF in BIDV 5,024,934 BIDV Asset Management Company Demand deposits 779 5 Subsidiary (BAMC) Time deposits 32,500 Demand deposits 42 6 BIDV Insurance Corporation (BIC) Subsidiary Time deposits 1,941,538 Demand deposits 184 BIDV Financial Leasing Company 7 Subsidiary Loans 1,210,326 (BLC) Internal financial leasing loans 185

BIDV Securities Joint Stock Demand deposits 117 GORVERNANCE CORPORATE 8 Subsidiary Company (BSC) Time deposits 150 Mekong Housing Bank Stock 9 Subsidiary Demand deposits 22 Company BIDV - Vietnam Partners Investment Demand deposits 968 10 Management Joint Venture Joint Venture Company (BVIM) Time deposits 53 Demand deposits 1 BIDV Tower Joint Venture Company 11 Joint Venture Time deposits 26 (BIDV Tower) Loans 212 Demand deposits in BIDV 4,080 12 Lao – Viet Joint Venture Bank (LVB) Joint Venture Demand deposits of BIDV in LVB 100 Time deposits of BIDV in LVB 6,082,930 Demand deposits in BIDV 126 Vietnam-Russia Joint Venture Bank 13 Joint Venture Time deposits in BIDV 554 (VRB) Demand deposits of BIDV in VRB 627 BIDV-Metlife Life Insurance Limited Demand deposits 42 14 Joint Venture Liability Company (BIDV Metlife) Time deposits 488,000 Demand deposits 369 Vietnam Aircraft Leasing Joint Stock Associated 15 Time deposits 932 Company (VALC) company Loans 1,013,109 Demand deposits in BIDV 290 Bank for Investment and 16 Subsidiary Demand deposits of BIDV in BIDC 2,781,106 Development of Cambodia (BIDC) Time deposits of BIDV in BIDC 2,998,113 International Investment and 17 Development Company Limited Subsidiary Demand deposits in BIDV 8 (IIDC) (Arccording to BIDV's 2016 Audited Consolidated Financial Statement )

BIDV - ANNUAL REPORT 2016 93 94 SUSTAINABLE DEVELOPMENT REPORT

OVERVIEW

MESSAGE FROM THE BOD ON SUSTAINABLE DEVELOPMENT

SUSTAINABLE ECONOMIC GROWTH

INVESTMENT FOR COMMUNITY DEVELOPMENT

CONTRIBUTION TO IMPROVE THE ENVIRONMENT

INFORMATION ANNOUNCEMENT UNDER GRI4 STANDARDS

BIDV - ANNUAL REPORT 2016 95 OVERVIEW

2016 IS THE FIRST YEAR BIDV PERFORMED SUSTAINABLE REPORT UNDER THE COMPREHENSIVE PLAN IN ACCORDANCE WITH VERSION G4 OF GRI GUIDELINE, THE MAIN CONTENTS OF THE REPORT INCLUDE:

CONTENTS OF THE REPORT The report noted entire critical activities of BIDV related to the Sustainable Development’s issues in 2016. The report includes information disclosure according to the criteria sustainable development of GRI, version G4 for Finance of Global Reporting Index. Sustainable Development Report 2016 was already informed to the shareholders and stakeholders of BIDV. The Report includes: 1. Overview of the Sustainable Development Report. 2. Message from the Board of Director. 3. Sustainable Business Growth. 4. Community Investment. 5. Contribution to the Environmental Improvement. SCOPE OF THE REPORT This report will be performed annually and presented in the Annual Report, information and data are updated from 01/01/2016 to 31/12/2016 along with several indicators that have shown growth/ development compared to the past.

96 SUSTAINABLE DEVELOPMENT REPORT

HOW TO DEFINE MAIN CONTENT AND KEY AREA COOPERATION WITH THE STAKEHOLDERS Organizations and individuals are considered to be stakeholders include clients, employees, shareholders, investors, partners, service providers, industries association, agencies, and community. We are actively consulted by the related parties and cooperate in order to ensure the harmony interest among the participants. To each group, BIDV applies different methods to approach for information. We carefully consider all the feedback; research and apply to our bank’s policies and activities. BIDV identifies stakeholders based on their roles and the level of influence. In 2016, BIDV continues to engage to related parties through multidimensional channels where sustainable development issues are further addressed by BIDV in order to listen to the opinions about enterprises’ activities related to Economic-Society-Environment. Base on the surveyREGULATOR and comments from related parties help BIDV understands their concerns and expectations.AUTHORITIES

REGULATOR AUTHORITIES

EMPLOYEES CLIENTS SUSTAINABLE DEVELOPMENT REPORT DEVELOPMENT SUSTAINABLE

MEDIA PARTNERS, AGENCIES PROVIDERS

COMMUNITY

BIDV - ANNUAL REPORT 2016 97 IDENTIFY THE MAIN CONTENT OF THE REPORT, CRITICAL AREAS The GRI guideline of Sustainable Development report is the most widely used Sustainable development report in the world. Referencing to GRI G4 standard is a fundamental framework that helps BIDV to have a holistic and comprehensive vision of our sustainable development activities while focusing on the key issues of business enterprises and related parties. Base on this, BIDV identifies the main contents and key issues according to the combination of (i) BIDV’s point of view in what is the most matter and relevant, and (ii) concern of stakeholders. Identifying critical area assists BIDV in focusing on truly important issues in order to achieve our goals and manage the impact on society, ensure the harmony interest of stakeholders.

Shareholder/ Investor Management Agency

Shareholder meeting . Maintain regular dialogue mechanism. Update information regularly through Meet up for discussion at participated forums. IR Website, directly, phone, email. Contribution to draught and policy. Meet up with the analysts.

Employees Customer

Satisfaction survey. Direct Interview. Annual Employee Conference. Customer service and hotline 24/7. Internal Publication: Intranet channel, Internal News. Satisfaction Survey. Communicate to the Local Union. Social media and Newsletter tracking feedback on Social media. Connecting and Educational Environment.

Service provider Media agency

Direct meeting, and supplementation in the procurement regulations and cooperation with suppliers. Meeting with the media. Maintain competitiveness. Press release/ periodic report on performance. Ensure transparency in offer. Quality service, Clear origin of good.

Community

Coordinate with the local authorities. Contact to inquire the aspiration of the local citizen. Social security event to join hands with local authority.

98 MESSAGE FROM THE BOARD OF DIRECTORS ON SUSTAINABLE DEVELOPMENT

MESSAGE FROM THE BOARD OF DIRECTORS ON SUSTAINABLE DEVELOPMENT

Sustainable development on all three factors stable human resources, retail-oriented Economics - Society – Environment is not only development, digital services and extensive an essential and urgent requirement for Vietnam business network together with the Customer- nowadays but also a tremendous challenge in Centric business model. the context of economic integration. It is an INVESTMENT ON COMMUNITY common obligation that needs comprehensive coordination and further efforts from all DEVELOPMENT economic sectors, regulators, and community BIDV’s effective business operation is not only organizations... The banking sector with the role creating financial outcomes for the Bank itself as an important capital channel of the economy but also focusing on valules offered to the contributes to the steady development of customers, ensuring equitable benefits for the country. An effective and sustainable the shareholders, employees-officers, bankers development banking system bring plentiful and other related beneficiaries. BIDV also benefits to the economy; which declines the conducts surveys to measure satisfaction of negativity to society and environment. customers and staffs, listens to the shareholder’s As a leading bank of Vietnam, BIDV determines feedback,etc. At the same time, focusing on its missions are: Consistently companion, sharing supporting the economy to be shifted into a and providing the best financial and modern rational economic structure, demonstrating banking services for customers; committing reponsibility to the community, contributing in to bring the finest value to the shareholders; poverty reduction along with implementation of create a professional and friendly working the social security. environment, career development opportunity and rewarding benefits for all employees; and CONTRIBUTION TO being the outstanding bank in community ENVIRONMENTAL IMPROVEMENT development. Hamonization of interests among For the banking sector, sustainability related parties: shareholders, employees, development related to environment can be REPORT DEVELOPMENT SUSTAINABLE customers and community is the long-term considered in the context of the Bank putting survival for the bank itself, promoting growth environmental assurance criteria into credit comprehensively and steadily in long duration, granting process, promoting green credit bringing benefits for the national economy and growth, and managing social and environmental the whole society. risks in granting credit. The environmental This solid point of view has been instilled to protection results of the Rural Finance Project the entire organization, from the Board of sponsored by the World Bank and led by BIDV Directors to every employee, from strategy to as the wholesale-bank are highly appreciated implementation of every business segment, by the international community and should products and services, and network, market. It be replicated. In our operation, BIDV has is expressed through the three core sustainable already promoted propaganda activities to development gravities: raise employee awareness about saving and protecting environment, also supported the SUSTAINABLE BUSINESS GROWTH environmental programs. For the banking sector, when it comes to All the above, in 2016, even though Vietnam sustainability, the first factor must be financial had to suffer negative external impacts, sustainability in order to survive, develop in the espesically drought, natural disaster and the long run, balance between short and long term, global economic increase slower than the balance between expected returns and risk forcast; unstable oil price; demand and price tolerance. The stability of a huge commercial of agricultural products sinked sharply, etc, bank such as BIDV makes an important BIDV has continued to promote its role of a contribution to ensuring safe and sound leading financial institution which has actively operation of the entire banking system and acompanied, took on and contributed to the steady development of the economy. The the innovative achievements of the country, measure for sustainability of BIDV is expressed the banking sector, the sustainable business through the solid business performance over operation, expressing responsibility to the the years, conventional risk management, community and environmental protection for a strategic investment in information technology, sustainable and integrated Vietnam.

BIDV - ANNUAL REPORT 2016 99 SUSTAINABLE ECONOMIC GROWTH

SUSTAINABLE BUSINESS PERFORMANCE OVER THE YEARS

In the last 5 years, with comprehensive breakthrough efforts, BIDV has affirmed its position in the financial market, taken the leading position among the commercial banks in terms of scale, being the first commercial bank in Vietnam with total assets exceeding VND 1,000 trillion, other business performance indicators increased considerately, sustainably, and performance improved increasingly:

Total assets has grown continuously over Fund mobilization from organizations and the years, as at 31 December 2016, it individuals in 2016 reached approximately reached over VND 798 TRILLION VND 1,000 TRILLION with an average growth of 25% per year. increasing 2.08 times compared to 2012, with an average growth of 20% per year.

Loans to customers in 2016 reached Profit before tax reached

VND 724 TRILLION VND 7,709 BILLION increasing 2.13 times compared to 2011, with an average growth of 18.5% per year, with an average growth of 20.08% per year. increasing 1.97 times compared to 2012.

Chartered capital has increased 1.5 times in the period of 2012-2016 (as at the end of 2015, reached over VND 34 TRILLION, increasing by VND 19.9 trillion compared to the beginning of 2012) through capital surplus from equitization, shares issued to the existing shareholders, the MHB merger (VND 3,369 billion) and USD100 million receiving from an investment trust. In addition, BIDV successfully issued nearly VND 20 trillion of subordinated bonds, improving capability of equity capital, contributing to ensure the capital adequacy ratio.

100 SUSTAINABLE ECONOMIC GROWTH

INTERNATIONAL AUDIT & CREDIT degree and above accounts for a high portion, RATINGS PERFORMED BY REPUTABLE up to 89.4% out of the BIDV’s employees in INSTITUTIONS 2016; Since 1996, BIDV's financial statements have • Number of employees having more than been periodically reviewed / audited by a 3-year working experience in BIDV accounted leading international independent auditing for 67.42%, out of which 11.01% working from firm. Since 2011, in addition to auditing and over 03 years - 05 years, 27.94% working from disclosure of financial statements for the over 05 years - 10 years, 28.48% working from year, BIDV has also reviewed and disclosed over 10 years. semi-annual financial statements. The audited The above statistics demonstrated that BIDV financial statements have been prepared in has been interested, focused and consistently accordance with both Vietnamese Accounting Standards (VAS) and International Financial performed its attracting and managing talent Reporting Standards (IFRS), which contribute policy in the long period. The policy includes impertantly to the management and operation professional and reputable recruitment in the of the Bank, follow international standards and labor market; remuneration policies based on practices, also it is the main information channel contribution of employees through competitive to satisfy the domestic and international salary and bonus systems; promotion market's interest in financial capacity and opportunities for professional development business performance of the Bank. of employees; various training in professional knowledge, operational management, foreign In 2006, BIDV signed a credit rating contract languages and soft skills, etc.; consistent with Moody’s - the international credit rating corporate culture, advanced and professional organization. With that event, BIDV was the working environment. first enterprise in Vietnam implemented the independent credit rating by the world BIDV is deploying its strategic plans in reputable organization, which afirmed improving human resources quality to meet BIDV’s pioneer position in transparency and requirements of international economic application of international standards. Since integration, focusing on the following solutions: 2010, BIDV has continued to invite the Standard • Firstly, attracting and utilizing high-quality and Poor's (S&P) as the second credit rating human resources, forming teams of experts on organization to provide credit rating to BIDV, in

the key areas of expertise. REPORT DEVELOPMENT SUSTAINABLE accordance with the international practices as every organization should be credit-rated by at • Secondly, completing the Competency least two organizations. Framework System, re-innovating and supplementing the KPIs (key performance The remarkable high credit rating of BIDV indicators) system for individual assessment and being maintained from year to year has shown comprehensively officer assessment in order to remarkably high appraisal from the Credit provide a solid foundation for personnel and Rating Organizations in terms of BIDV’s position, organization activities. brand and networks in Vietnam, as well as corporate governance and risk management, • Thirdly, improving processes, regulations on which have been notably improved at personnel and organization activities associated BIDV. Additionally, BIDV highly appreciates with the General Competency Framework, methodology and evaluating criteria applied Management Framework and Professional by the Credit Rating Organizations and the Framework for each position. recommendations given by the Organizations are well taken into consideration in developing • Fourthly, accelerating application of measures and policies to improve governance information technology in work thereby capacity as well as overall financial capacity of increases labor productivity and efficiency. BIDV. • Fifthly, building Training Framework by group STABLE AND PROFESSIONAL HUMAN of positions associated with the Competency RESOURCES Framework and job descriptions for each position, group of positions; expanding BIDV has high quality human resources in and improving efficiency of international comparison with other commercial banks in cooperation in human resource training, Vietnam, depicted in the 02 main points as thereby taking maximum advantages of follows: financial support, training programs, training • Number of employees holding bachelor’s contents, lecturers and training methods.

BIDV - ANNUAL REPORT 2016 101 STRATEGIC INVESTMENT IN INFORMATION TECHNOLOGY

The IT development strategy at BIDV is continuously updated with the latest technology, professionally organized through internationally ensuring continuous operation, safety and stability, reputable and experienced consultants in meeting operation demands of BIDV; consistently developing IT development strategies in the ranked 1st in terms of readiness for ICT application banking industry such as IBM and PwC in line and development among the commercial banks with international practices, business strategy, in Vietnam. banking strategy, IT development trend and is an The IT application software system is modern, indispensable part of BIDV's business strategy and • synchronous, interconnected, covering all business development. activities, making a difference, improving the By the end of 2016, IT has really transformed quality, utility and technological content of the image, contributing to improving the BIDV's products and services, help to serve competitiveness of BIDV in Vietnam as well as in customer better, improve competitiveness of the region; ranked by domestic and international BIDV. organizations as one of the banks with the The equipped E-Banking system is modern, largest and most modern IT systems in Vietnam, • comprising all sufficient functions (on both ensuring the demand for business continuity, Internet and Mobile systems), offering varieties sustainability and competitiveness with domestic of modern banking products and services and international banks. IT activities have met such as: BSMS, BIDV online, BIDV mobile, BIDV management and business requirements; played a Business Online, Smart banking, Bankplus, Bill leading role, as a tool to reduce costs and support payment, Fast money transfer 24/7. operations, being an important factor to generate profit, a key factor for business development, • The ATM system covered the whole country competitiveness, growth, and reform of BIDV's with over 1,823 ATMs and over 31,390 POS operation model during international integration connected to all banking systems in Vietnam of Vietnam. and some countries in the region through the BanknetVN system, accepted payment for card The overall picture of modern and synchronous products and services such as VISA, MasterCard, IT system of BIDV is shown through the following JCB, and CUP, etc. main features: The payment system has been recognized IT infrastructure system has been adequately • • as the best system in Vietnam by domestic/ equipped in accordance with advanced foreign organizations: Connect with nearly 700 international standards, with high performance, financial institutions in all popular domestic and international payment systems (IBPS, clearing, VCB Money, SWIFT,…); Provide bilateral, multilateral payment, connection with organizations such as State Treasury, Taxation and most of domestic banks. • Advanced IT management model in line with international practices and BIDV's development scale; IT staffs are skilful and constantly developing, with about 700 staffs who have been trained professionally, with high qualifications, devotedly loyal to BIDV and affirmed the brand of BIDV IT staff to manage, develop and operate a large scale IT system.

102 SUSTAINABLE ECONOMIC GROWTH

MORE SUSTAINABLE GROWTH BIDV also pays attention to the development WITH DRIVING FORCE FROM THE of the network following the modern trend, RETAIL AND DIGITAL SERVICES which put into operation 22 standard retail transaction offices, deploying transaction offices For 60 years of establishment and development, with financial supermarket model and modern BIDV was known as a specialized bank for E-zone banking experience to ensure better investment and development with wholesale customer needs; Develop modern distribution activities. Being aware of the international channels with 1,824 ATMs and 34,000 POS and regional integration trend, BIDV has (increased nearly 8,000 POS compared to the been strongly transforming its business in beginning of the year); Promote high-tech direction of retail since 2006 with a focus on retail banking by many reform, innovation and services such as internet banking, mobile creativity activities. With the expansion of the banking, payment connections with more than network of transaction offices nationwide to 1,000 agents around the world. more than 1,000 transaction offices / points, Identifying customers as a key and throughout including many top international standard task. BIDV's customer base in 2016 reached 9 retail outlets and modern financial services million: the number of individual customers experiences in Vietnam, over 32,000 ATM/POS reached 8.7 million, grew by 10% compared to connection points, 1,000 agents worldwide, 2015; the number of SME customers is 198,000, numerous bilateral agreements with large banks an increase of 9% compared to 2015; FDI in countries such as Russia, Czech Republic, customers reached 2,620, an increase of 12% Taiwan, Korea, Malaysia, Cambodia, Japan, Laos, Myanmar, etc., BIDV not only asserted the over 2015. position of a leading bank in Vietnam, but also At the same time, BIDV always focus on expressed the desire to reach out to the region reviewing and adjusting the organizational and the world. model to ensure the development orientation Since 2013, BIDV has always achieved excellent towards customers, specifically: SUSTAINABLE DEVELOPMENT REPORT DEVELOPMENT SUSTAINABLE business results and consistently holds the Constantly aiming to transform the position of No.1 among joint stock commercial • organizational model towards centralized banks in Vietnam in terms of scale of fund management in the Head Office and running mobilization, retail credit growth rate , with business vertically of a modern, advanced, the average annual growth rate for 2013-2016 is 30% and 50% per year respectively. The modern customer oriented banking model. distribution channels are also promoted safely • Restructuring organizational model and effectively, while increasing interaction with towards customer in the Head Office and customers through internet banking, mobile affiliates. Accordingly, (i) At the Head Office, banking, 24/7 customer care center and the there are several new departments which Social media command center. This is a strategic were established to serve the specialized step taken by BIDV to provide customers with customers such as: Small and Medium a modern, friendly retail experience. In parallel Enterprise Department, International Entrusted with research in order to improve the quality Fund Department, Foreign Direct Investment of service products through comprehensive Department; (ii) At the branch, adjusting the investment, from technology systems, risk management processes to simplifying policies, branch model in the direction of reducing procedures and training of professional human supporting parts, rearranging post-audit resources. Retail banking activities of BIDV have department, internal management to ensure achieved remarkable progress in terms of scale, that the branch focuses on direct business with efficiency and quality. customers. DEVELOPMENT OF CUSTOMER- • Consolidating the model of business ORIENTED MODEL AND NETWORK organization in retail activities, raising the competitiveness of transaction office in the Traditional network over the past 5 years has direction of perfecting the model of retail been developing in both quantity and quality: branch and standard modern retail transaction up to 191 branches and 815 transaction offices, offices specialized in serving retail customers to total network locations increased 1.56 times in create example in BIDV’s retail operation. comparison to 2011.

BIDV - ANNUAL REPORT 2016 103 REGULAR RISK MANAGEMENT meet the requirement of the State Bank of Vietnam, focusing on: (i) Continuing to develop With the position as one of the leading banks and improve the unified risk management in Vietnam, BIDV considered the pre-requisite system applied for organizational structure, legal criterion for BIDV to affirm its position, qualification documentation system, tools, risk management during process of integration, sustainable reports in accordance with the good practices; development and expansion of the international (ii) Successfully implementing the chain of Basel network is meeting the world standards and projects, to comply with the requirements of the good practices in risk management. Based on the State Bank of Vietnam in Circular No. 41/2016/TT- direction of the State Bank of Vietnam, as well as NHNN and relevant documents. from the internal demand, by the end of 2014, BIDV set up a Basel organizational structure. Up to date, CORPORATE CULTURE TOWARDS BIDV has completed the Consulting Project of gap SUSTAINABLE DEVELOPMENT analysis (GAP) and developed the implementation plan (Master Plan Basel), building a relative In the general development direction of the bank, completed risk management system in accordance BIDV's Board of Directors always determines that with the practices with 03 rounds of control, corporate culture is an integral part of brand Issuing risk appetite statements of BIDV in 2015; development with BIDV's long-term sustainability. Setting up a system of documents on the regime Since 2006, BIDV has developed a proposal for of market risk management and synchronous "Building and Promoting the Culture of Bank for operation in line with the reality of operation at Development and Investment of Vietnam, JSC" BIDV; Implementing routine risk management tools in order to have a basis and method to build and such as: (i) value interest rate risk (VaR), hypothesis promote BIDV's unique cultural values in the testing (backtest), stress test, etc. (ii) the tools context of BIDV in integration period. By 2010, BIDV of risk management activities routinely include: has also issued two sets of codes, including the Risk Control Self-Assessment (RCSA), Key Risk "Code of Ethics for Professional Staff of the Bank Indicator (KRI), Collect and analyzed operational for Investment and Development of Vietnam, JSC" risk data (LDC) Business Continuity Plan (BCP), and "Code of Conduct for Officials of the Bank BBB/ECC and D&O Insurance; invested, developed for Investment and Development of Vietnam, and implemented several technology solutions JSC". In the Code of Conduct, there are rules for managing risks of significant types. BIDV has about personal communication with colleagues; performed periodic, flexible, comprehensive Superiors to subordinates; internal and external; and on-time reporting mechanism for Board of Business etiquette; Meetings ... In the Code of Management. ethic, BIDV has introduced a system of provisions as a basis reference for BIDV staffs to perform their professional work, ensuring compliance with the general provisions of law, and internal regulations of BIDV. In 2012, BIDV promulgated the Regulations on style and workspace to establish the framework and standards of style and workspace at BIDV. Next, BIDV has implemented many forms of direct and indirect internal monitoring and control to manage the compliance situation at the units. In 2016, BIDV outsourced the implementation of the secret customer program, deploying style assessment and work space at all BIDV's transaction points in the whole system with the frequency of 02 waves. This is an effective channel, reflecting objectively, honestly about the workspace and In addition, BIDV continues to dessiminate, style of transaction at BIDV. The results show that organize to implement documents, guideline the quality of work space and style at BIDV has and direction of the authorized State agency on been significantly improved by the network of Basel implentation, Basel Treaty and good banking transaction centres, nationwide ATM network, risk management in various forms, contributes brand identity are synchronous in colour, display, to improve knowledge, awareness and risk easy recognition; The quality of staff's work style management capacity of staffs in the whole system. has gradually been standardized in the direction of friendly, professional, towards customer In the next period, BIDV will continue to satisfaction. implement and strive to complete Basel Roadmap,

104 INVESTMENT FOR COMMUNITY DEVELOPMENT

INVESTMENT FOR COMMUNITY DEVELOPMENT

RESPONSIBILITY TO EMPLOYEES BIDV HAS ALWAYS CONSIDERED HUMAN RESOURCES AS THE MOST VALUABLE ASSET OF THE BANK. THEREFORE, HUMAN RESOURCES IS ONE OF THE TOP RESOURCES THAT BIDV PRIORITIZED TO INVEST THROUGH COMPENSATION, REMUNERATION, TRAINING, APPOINTMENT, DEMOCRACY REGULATION, PHYSICAL AND SPIRITUAL CARE AND BUSINESS CULTURAL ENHANCEMENT IN ORDER TO ASSOCIATE ALL EMPLOYEES.

Deserved compensation policies and Creating professional development benefits for employees opportunities for all employees Since IPO, BIDV has actively improved salary BIDV has developed regulations on promotion, policy correlating salaries with working appointment and circulation to help employees performance of employees and business orient and strive for professional development. The performance, in line with labor market trend. In BOM were particularly interested in and directed

2015, the average salary increased to VND21.98 the implementation of promotion, appointment REPORT DEVELOPMENT SUSTAINABLE million per employee. Besides salary policy, BIDV and reappointment in order to ensure democracy, also had motivation reward policy for employees openness, transparency in due diligence process associated with the business performance, from promotion step, training after promotion, outstanding or extraordinary achievements appointment, circulation and rotation. BIDV in right time, to right person, maximizing also forcibly assigned tasks to young staff so capabilities and creativity of all employees. With far our leaders at all levels met requirements in both quantity and quality for management and this reward policy, BIDV has extended deserved operation within the system. reward for employees’ contributions to overall success of the Bank. In addition, BIDV employees Encouraging study movement, promoting were also facilitated with staff loans, overdrafts initiatives in the entire system and other benefits such as stock options. Emulation movements associated with Focusing on employee training and professional activities have become a driving professional enhancement force for business activities of BIDV's units and the entire system, which included movements In 2016, BIDV has organized 404 classes for of skilled labors, administrative procedure nearly 25 thousand employees participating in reform, deposit mobilization and scientific training courses. On average, each employee research, etc. The professional contests from has opportunity of training in 2.7 days. BIDV branches to regions and the whole system such also encouraged employees for self-training by as outstanding tellers, note checkers and credit supporting study time and crediting training funds. contest has attracted thousands of customer At the same time, BIDV also organized numerous relationship managers, credit managers, credit survey programs, seminars, professional training administrators, tellers and note checkers, etc courses in both domestic and oversea. The training to actively participate in learning, rehearsal contents were comprehensive and productive in and competition. The movement to promote order to enhance knowledge, professional skills, innovations and improve business processes foreign languages, soft skills, and integration skills, continued to be strengthened. In 2016, the whole etc. for employees. system has 405 initiatives, of which 58 topics and 6 innovations were accepted and rewarded.

BIDV - ANNUAL REPORT 2016 105 Improving gender equality, position and develop appropriate solutions to improve capacity of women staff the level of staffs satisfaction, contributing to improved labor productivity and the With the average age of 33, the total number attachment and loyalty of the staffs to BIDV. of women staff of BIDV by the end of 2016 was 13,640, accounted for 57.8% of total Ensuring benefits for workers employees of BIDV, which confirmed the fact In addition to ensuring legal rights and benefits that women staffs had become an important for employees such as periodical health workforce of BIDV. BIDV has always tried to checkups, out-time working hour reduction and ensure equity environment and paid attention working condition improvement, BIDV provides to material and spiritual lives of women staffs, annual insurance programs for the employees as well as created conditions for women under the BIDV Care in order to increase welfare staffs to participate in professional operation, and income for employees at retirement age, promotion and appointment. BIDV Trade Union as well as long-term commitment to BIDV. The has timely glorified woman individuals and Trade Union often timely visited members, woman groups with outstanding achievements laborers and relatives in difficult circumstances, in the movement of “Good women at work sickness and accidents using Trade Union and in family”. Along with the Trade Unions, funds, gratitude funds and welfare funds. In the Committee for Advancement of Women 2016, the Trade Union at all levels has visited also did inspection and supervision of the and supported for 2,914 trade union members, implementation of policies of the government, employees, with the amount of VND4.1 billion. banking sector and BIDV for women staffs, BIDV also implemented the regulation on especially health insurance, social insurance, study promotion for BIDV staff’s children who salaries, bonuses policies for women staffs. had achieved excellent results in the school Promoting democracy of employees year of 2015 - 2016 by applying BIDV's welfare regulations. BIDV has created favorable conditions for employees to promote democracy through Taking care of the spiritual life of the worker congresses and employee/worker workers meetings, collative working agreements, BIDV Trade Union coordinated with the democratic regulations, worker conference management to organize vacations at home regulation, dialogue regulation, etc. The unit country and abroad, birthday celebrations for trade union has developed and promulgated staffs, entertainment activities for employees’ schedule and rules to meet employees. All employees’ complains were solved promptly by children on International Children's Day of June the BOM and Trade Union. 1. BIDV Trade Union also organized for high- ranking officials in the credit contest (regional Measuring employees’ satisfaction and whole system) to visit and study in Korea Employee satisfaction measurement is and Taiwan. Some branches’ Trade Unions organized annually to help BIDV's leaders to maintained kitchens for members, laborers (in understand the aspirations of the staffs. The South Hanoi, West Hanoi, Quang Minh, Hanoi, Employee Satisfaction Survey in 2016 has Tu Liem branches). Trade Unions have well attracted a large number of employees, most organized cultural and sports activities and of them were satisfied and looked forward to maintained sport clubs to improve spiritual life working with BIDV over the next five years. and physical training of unionists and laborers. BIDV employees were very confident about With its efforts to create a professional their ability to meet the requirements of work, working environment, career development and said they felt proud to talk about BIDV with worthy opportunities and benefits for all relatives and friends. employees, BIDV has created for itself a In addition, the staffs also contributed some stable and professional human resource with ideas to improve the level of satisfaction related more than 25 thousands of employees who to issues of training, promotion, cultural and peacefully stick with, promote their capacity working environment changes. Theses valuable and continuous dedicate to the development contributions helped units to research and and integration BIDV.

106 INVESTMENT FOR COMMUNITY DEVELOPMENT

RESPONSIBILITY TO INVESTORS ENSURING THE HIGHEST RIGHTS AND BENEFITS FOR SHAREHOLDERS IS THE GUIDELINE IN BIDV CORPORATE GOVERNANCE. INVESTOR RELATION HAS BEEN MAINTAINING AND CONNECTING TO CONVEY TIMELY MESSAGES OF BIDV TO MORE THAN 24,000 SHAREHOLDERS, BUILDING A TRANSPARENT AND OPENED BIDV IMAGE WITH INVESTOR DOMESTICALLY AND INTERNATIONALLY. BY OUR EFFORTS, BIDV HAS CREATED A GOOD RELATIONSHIP WITH EXISTING SHAREHOLDERS, APPROACHING POTENTIAL INVESTORS, CONTRIBUTING TO CONSOLIDATE BIDV BRAND IN THE STOCK MARKET.

Date Events

March 24 Last registration date for exercising the right to attend the 2016 AGM

April 24 2016 AGM

Last registration date for exercising the right to attend the 2016 Extraordinary September 22 General Meeting of Shareholders

October 22 Extraordinary General Meeting of Shareholders

November 4 Last registration date for 2015 dividend payment

November 21 2015 dividend payment date

Investor Calendar in 2016 REPORT DEVELOPMENT SUSTAINABLE

MAINTAINING INTERACTION, ENSURING investors through interactive channels such as SHAREHOLDER RIGHTS phone, email, website, coordinated with the Depository Center to perform the correction BIDV always focused on maintaining interaction, of information requested by shareholders, to ensuring equity and shareholder rights. BIDV re-issue the books of shareholders and to certify also created the best conditions for shareholders information on securities ownership. With our to attend and vote at the General Meeting of efforts, BIDV is committed to provide shareholders Shareholders and encouraged shareholders to and investors with timely and accurate information exercise their rights. BIDV shareholders were on business performance and development informed clearly about the rules and procedures strategies. of voting at the AGM. Meeting documents are posted ahead of the meeting so shareholders In addition, in the past few years, BIDV has always have time to research related issues for maintained a dividend payout ratio in line with decision-making. At the same time, at the AGM, our desire to ensure a stable source of income shareholders were encouraged to ask questions for shareholders. BIDV efficient business growth or recommend issues. Questions and answers has ensured our ability to pay full dividends were also recorded in the minutes of the General and was among the top listed banks with the Meeting of Shareholders. highest dividend payout ratio (in 2016, BIDV paid dividends in cash to shareholders with 8.5% With a large number of shareholders, diversified payout ratio). BIDV also improved the efficiency of shareholder structure, BIDV's shareholder paying dividends through the use of third-party management requires professionalism to ensure services to enable depositors to receive cash the interests of investors. Investor Relation has directly or receive money transfer through simple actively supported and responded to inquiries procedures. and requests from investors, especially individual

BIDV - ANNUAL REPORT 2016 107 Information Transparency increase transparency, BIDV has strengthened its activities in the past year to connect As a leading joint-stock commercial bank and a listing organization, BIDV always attached with the investor community, especially great importance to the transparency of its institutional investors. Specifically in 2016, operations. In order to ensure transparency in addition to direct dialogue with a large in information disclosure to investors, BIDV number of investors at the General Meeting of has developed a complete, accurate and Shareholders, BIDV held 25 direct sessions and timely disclosure process for all important provided information to more than 30 partners, issues affecting the share price and investors' namely securities companies, domestic and decisions, complying with Circular No.155/2015/ foreign investment funds (from the United TT-BTC of the Ministry of Finance guiding the States, Hong Kong, Singapore, Korea, Japan, disclosure of information on the stock market. ect.), to exchange information, learn about Documents to investors, newsletters and development strategies, business operations, financial statements of BIDV in both Vietnamese investment as well as other economic-financial and English were constantly updated and can information. be viewed and downloaded from BIDV website. Through contacts, investors were updated Investor Relation always took the initiative to timely about the macroeconomic and banking timely synthesize and update the business industry, the status of operations as well as performance of the bank on a quarterly basis, development of BIDV. Raising the interest of explained factors affecting the turnover/profit investors was especially important during the in the period, performance of each business period that BIDV is promoting the sale of shares operation, changes in the organizational model, to foreign investors. management strategy, operation policy of BIDV, in order to help investors make accurate Looking to professionalism in the activities assessment of BIDV situation and have proper with investors, Investor Relation will continue investment decision. to maintain and promote the activities The annual report was published annually carried out in previous years to bring the by BIDV, providing a comprehensive view image of BIDV to the investor community of the bank's operational strategy, financial in increasingly transparent and reliable position, business performance, governance manner. In addition, we will always endeavor and sustainability development. BIDV's Annual to maintain a two-way communication Report is consistently on the top of the Best channel between BIDV and the Investor, Annual Reports in prestigious voting. in order to answer satisfactorily questions about strategy and business conditions to Connecting future investors help investors make right judgments and Not only active in information disclosure to decisions.

STT Categories Amount

1 Total sessions 251 sessions

2 Total matched volume 372,416,840

3 Total matched value VND6,267 billion

4 Average volume of matching order per sessions 1,421,850 stocks per session

5 The largest transaction volume 5,657,540 stocks per session

6 Highest price/Lowest price VND19,200/14,200 per share

108 INVESTMENT FOR COMMUNITY DEVELOPMENT

RESPONSIBILITY TO CUSTOMERS quality and strengthen customer relationships. The switchboard has also been bringing more Actively answering and supporting customer convenience to customers by supporting direct With the guideline of customer orientation registration of services, expanding the scope together with the desire to bring experiences of customer support to bring products and of professional, friendly and modern financial services to customers quickly, conveniently and and banking services to the customers, from economically. June 2013, BIDV Contact Center officially After nearly two years of establishment, the came into operation. This event expressed Social Media Command Center of BIDV (SMCC) BIDV determination to constantly improve under the supervision of BIDV Contact Center satisfaction for each customer and positively has gradually become a professional consulting, contributed to affirm BIDV as one of the most supporting and sales channel, contributing to friendly and modern banks in Vietnam. After the overall success of retail banking operations. more than 3 years of operation, BIDV Contact Retail banking was highly appreciated by Center has continually strived to expand its prestigious institutions through the second scope of operations, expand the scope of its consecutive year of receiving the Best Retail customer care and supporting. Bank in Vietnam. As a convenience, simple, low The number of supporting calls through cost distribution channel, since its launch, BIDV the 19009247 switchboard at the Contact SMCC has attracted many customers to come Center has been increasing steadily. BIDV for support. Specifically, in 2016, SMCC has hot line has become a reliable address for successfully supported over 22,000 customers customers to exchange ideas when they who need help through social network, most have issues needed supporting. In 2016, of whom were satisfied with our supports. BIDV the Contact Center received nearly 850,000 also recorded nearly 7,000 customers presenting inquiries, comments from customers through potential demand on BIDV's Facebook page. phone, email and social networking. The Fan community also grew strongly, reaching Contact Center considered comments as an 330,000 fans, 3 times higher than that of 2015 SUSTAINABLE DEVELOPMENT REPORT DEVELOPMENT SUSTAINABLE opportunity for banks to improve product and ranked the 3rd in the banking industry.

BIDV - ANNUAL REPORT 2016 109 Measurement of customer satisfaction individual and corporate customers. Besides, BIDV continued to be appreciated by customers In 2016, BIDV continues to outsource its for its image/prestige/facilities. The percentage customer satisfaction measurement program of satisfied customers has increased in the to identify BIDV's market position in terms of groups of factors such as product features, satisfaction, evaluate weaknesses/strengths procedures, interest rates/fees, customer in products, services, processes, procedures, relationship managers, in which the highest quality of customer service and facilities in order satisfaction rate belongs to the procedural to improve the level of customer satisfaction elements. and customer loyalty to BIDV. The comments of customers were seriously The results showed that customer satisfaction absorbed by BIDV to research and implemente and engagement with BIDV had improved improvement measures to meet the needs and remarkably from 2015, rising from the average to improve the level of satisfaction of customers. level of 2015 to the strong level in 2016 for both

110 INVESTMENT FOR COMMUNITY DEVELOPMENT

AS A PUBLIC COMPANY, BIDV HAS MADE A STATEMENT ABOUT THE CORE VALUES THAT UNDERLIE ITS DEVELOPMENT, INCLUDING: (I) CUSTOMER ORIENTATION; (II) SOCIAL RESPONSIBILITY, (III) CREATIVE PROFESSION; (IV) INNOVATIVE DEVELOPMENT. IN PARTICULAR, SOCIAL RESPONSIBILITY IS ONE OF THE FOUR CORE VALUES THAT BIDV CONTINUES TO BUILD THROUGH ITS PROFESSIONAL OPERATIONS (LENDING, PROVIDING BANKING PRODUCTS AND SERVICES TOWARDS GOALS OF COMMUNITY DEVELOPMENT) AND DIRECT CHARITABLE ACTIVITIES.

RESPONSIBILITY TO SOCIETY products with preferential interest rates for good customers, priority sectors (start-up enterprises,

SOCIAL RESPONSIBILITY THROUGH micro enterprises, SMEs, FDI), especially in REPORT DEVELOPMENT SUSTAINABLE PROFESSIONAL ACTIVITIES supporting industry development, agricultural Development of industries and local and rural. BIDV's projects have contributed to economies local employment, natural disaster recovery such as the flood control in HCM City. BIDV built the portfolio by sectors, rational areas and balanced between risk and profit to ensure • In 2016, BIDV successfully organized the principles of risk diversification and control programs, seminars and external events in some sectors in the scope and limits of SBV in provinces/cities from the North to the South each period. BIDV continues to prioritize capital such as Investment and Tourism Promotion investment in key sectors and industries of Conference in Quang Tri, Lai Chau, Lao Cai, Ha the economy, promoting exports, agriculture, Nam, Thua Thien Hue, Binh Dinh provinces, rural areas, manufacturing, small and medium Economic Development Workshops such as: enterprises in line with Viet Nam's development Scientific Conference on North-South-Central strategy and comparative advantage, sectors Tourism in Nghe An; Seminar on breeding benefit from international economic integration and strengthening application of science and and promoted retail credit. technology in agriculture in the Mekong Delta; Seminar on beef cattle breeding in Quang Tri; At the same time, BIDV always goes along with The cattle industry development seminar in Ha the local economic development, promoting Tinh, etc. contributing to promote investment, the role of consulting and connecting domestic tourism and stimulate the potential of Vietnamese enterprises in the country and in the localities. international markets, connecting banks with customers: • BIDV also actively participated in consultancy • Focusing on local priority areas, creating on socio-economic development orientations favorable conditions for enterprises to access and plans in localities and regions such as the bank capital, remove difficulties for business North Central Region Association Development and production, and supporting the market by Plan; Tourism planning of Nghe An province; deploying diversified credit packages/credit Master plan for socio-economic development of Binh Dinh province to 2030 with a vision to 2045, etc.

BIDV - ANNUAL REPORT 2016 111 Foreign Trust Fund Operations USD320 million funded by ADB, the Mekong Delta Integrated Climate Resilience and Being one of the first commercial banks in Sustainable Livelihoods Project worth USD310 the banking system to participate in the million funded by the World Bank, Trung Son mobilization and management of foreign Hydropower Project worth USD330 million fiduciary capital, with strengths and experience funded by World Bank, Electricity Transmission in the field of investment credit, branch Improvement Project worth USD500 million network, transaction offices throughout funded by World Bank, the First Power Sector the provinces and cities, BIDV is mobilizing Reform Development Policy Operation Project and managing more than 200 programs / worth USD312 million funded by World Bank, etc. projects with total value of USD17,400 million, equivalent to VND 390,000 billion from foreign Programs and projects spreading across governments of Germany, Switzerland, the country not only contributed to the Russia and France and international financial development of essential areas of the institutions such as WB, ADB, JBIC, NIB, EIB, country such as transportation, energy, etc. BIDV's foreign entrusted funds are highly health education, agriculture and rural appreciated by donors, governments and development, environment, etc., to poverty ministries for important contributions to the reduction, improvement of people's living successful implementation of programs/ standard and improvement of the socio- projects. economic development of the country but also contributed to the overall success of Toward a modern, professional and effective BIDV system, affirming BIDV's prestige and management model, BIDV has a specialized position in the national financial system, and department under its Head Office in mobilizing its relationship with the international donor and managing the foreign fiduciary fund community. programs/projects of the government. By 31 Dec 2016, the outstanding loans of BIDV's Rural Finance Projects foreign fiduciary programs and projects reached Since 2002, through Transaction Center 3 Branch, VND 52,000 billion, continuing to affirm its BIDV has been assigned by the Government to leading banks in the commercial bank system in function as the Wholesale Bank of Rural Finance management of foreign entrusted projects. Projects I, II & III (RF Projects), disbursed through Some typical programs/projects in which commercial banks (Participating Financial BIDV served as lending/re-lending banks Institution - PFI) and subjected to credit risk such as Corporate Governance Reform and in lending to PFIs. These were major projects Corporate Governance Support Program worth funded by the World Bank and aimed to support

112 economic development and poverty reduction. economic development andpoverty positivelycontributed to theachievement ofrural investing areas,By inthesekey theproject has ofthepoor,highest density accountingfor 22%. mountainousregion -the Region Northern the country, accountingfor 25%,andtheCentral -thecenter Delta ofagricultural productionof areas, River concentrated key intwo theMekong total financial resources oftheRFprojects were areas. According to geographic area, 47%ofthe households andlow incomehouseholdsinrural including 600thousandsmallloansfor poor million loansfrom householdsandbusinesses, the project,RFprojectsfinanced over 1.2 People's Credit Funds in to selected participate Through of25banksand9 thebranchnetwork over 90%were projects. mediumandlongterm to ruraldevelopment investments, ofwhich added more than (USD2.5billion) VND 56trillion theendofyear,billion. By theRFprojects loans attheendof2015reached VND 7,316 development. For allthree projects, outstanding to improveefforts access to finance forrural projects have effectively supported Vietnam's Throughout theimplementationperiod, theRF the owner ofODA projects. which isassigned as by to theGovernment act system in in thecommercial banking Vietnam Rural Finance program andbeentheonlybank the only World Bank’s in partner Vietnam inthe far,capital ofUSD548million.So hasbeen BIDV three projects, currently manages BIDV WB's reduction.Forrural agriculture andpoverty all Sustainable Poverty Reduction. Programs for and RuralConstruction New to theimplementationofNational Targeted inruralareas, and reduced contributing poverty created jobsandraisedthestandard ofliving the development ofagriculture andruralareas, project continuedto effectively contribute to until2033,together withthe period VnSAT The RuralFinance Projects withloan revolving to 2040. willbelentrevolving loanportfolio 2020, BIDV's of thecapitalwithdrawal phaseby theendof of2016. theend After phase from thefirstquarter million andhascommenceditsimplementation project hasatotal loanfrom IDA of USD238 added valueandsustainabledevelopment. The towards Scheme enhancing Restructuring Sector effective implementationofthe Agriculture the This projectthataimsto isanew support Agriculture Transformation Project (VnSAT). Wholesale Credit Fund oftheSustainable Government of Vietnam to becomethe was entrusted by the World Bankandthe ofruralfinanceprojects,series in2015,BIDV From thesuccessfulimplementationof Project in Vietnam (VnSAT) Agriculture TransformationSustainable onruralareas.impacts andsocio-economic in investment efficiency management andimplementationaswell as successful, inimplementationpatterns, as very The RFhasbeenassessedby the World Bank INVESTMENT FOR COMMUNITY DEVELOPMENTINVESTMENT FORCOMMUNITY BIDV -ANNUAL 2016 REPORT 113

SUSTAINABLE DEVELOPMENT REPORT SOCIAL RESPONSIBILITY THROUGH SOCIAL SECURITY ACTIVITIES IN 2016, BIDV CONTINUED TO IMPLEMENT MANY EFFECTIVE SOCIAL ACTIVITIES DIRECTLY AND EFFICIENTLY THROUGHOUT THE COUNTRY AND ABROAD. THESE ACTIVITIES FOCUS MAINLY ON EDUCATION, HEALTH, BUILDING SOLIDARITY HOUSES AND NATURAL DISASTER RELIEF.

PRIORITY TARGET PROGRAMS • Priority areas of support: education, health, replacing temporary housing with sustainable housing for the poor; preventing and overcoming of the consequences of natural disaster, gratitude; building the bridge of people; support poor pronvinces under the priority programs of the Government. (These are areas that the Government encourages and facilitates enterprises to do). • Areas of implementation: remote areas where there are low-living conditions, high concentration of poor people and communes with special difficulties; areas that have many units in the field of health, school ... • Method of support: give direct support to beneficiaries

SPECIFIC OUTCOMES supported 24 construction projects of schools and classrooms for many pronvinces, funded Outcome of the activities throughout the study encouragement funds with hundreds of country scholarships to encourage students to study in Health Sector: In 2016, with a aim to the country; sponsoring equipment, learning contribute to improve the quality of life through tools, regular trainings and activities for schools. health services for people, BIDV has prioritized the implementation of sponsorship for medial Financing disaster relief project: In 2016, activities. The total value of funding in the BIDV regularly provided timely relief to people health sector is VND97.6 billion. Typical results: affected by natural calamities, with a total value BIDV financed the construction and upgrading of VND43.4 billion. of 10 medical stations; dedicated 6 ambulances Build solidarity houses and houses of to hospitals; committed to fund 46 ambulances gratitude: BIDV sponsored to build 561 houses for hospitals; financing for procurement of of gratitude and solidarity for the poor. The total medical equipment for medical establishments, value of projects is VND38.3 billion. sponsor medical expenses for patients. Support social cultural works, bridges, Education Sector: In 2016, education roads, policy beneficiaries with the total value continued to be a priority field in BIDV's of about VND11.1 billion; Support scientific social security activities. The total value of sponsorship in the field of education is research activities and activities of applied VND82.4 billion. Outstanding results: BIDV mathematics in the field of economics.

114 INVESTMENT FOR COMMUNITY DEVELOPMENT

Give Tet gifts to the poor: Continuing the many medical examination and treatment program of giving Tet presents to the poor equipment and facilities for central and local started in 2009, so far, BIDV has donated 40,050 medical establishments (medical equipment, Tet gifts to the poor with a total value of VND12 ambulances, etc.) billion. • Brought thousands of beautiful shelters to Overseas social security sponsorship the poor to "settle down", help solve the most basic needs in the lives of poor people so they Overseas social security sponsorship: promoting could have a stable house to focus on working. the brand to the Government, local people to create favorable conditions for BIDV's operations Contributed to improving rural traffic in countries with that have BIDV commercial conditions, minimizing risks while promoting representative. In 2016, BIDV carried out social economic trade in poor, remote and isolated SUSTAINABLE DEVELOPMENT REPORT DEVELOPMENT SUSTAINABLE security activities in many countries such as areas. Laos, Cambodia, Myanmar. The main sponsors Effectively contributed to the renovation and in the areas include: funding for building school preservation of historical and cultural relics, facilities, computers, scholarships, funding the preserved the cultural traditions of the people, purchase of medical equipment as well as other and at the same time made an important modern working equipment, funding disaster contribution to the development of the cultural relief projects. tourism economy. BIDV’S PROGRAM OUTCOME These ssocial security activities continue to Continuing the results achieved in previous confirm BIDV's role in the social community. years, BIDV's social security sponsorship Social security programs have contributed to continued to have positive effects on BIDV's building and consolidating BIDV brand as business operations, BIDV brand reputation, “a brand for the community”. Prestige brand the major policy of the Party and Government and social responsibility of BIDV is recognized on sustainable poverty reduction, economic, by the people's community. cultural and social development; national target The effectiveness of BIDV's social security programs in education, health care, housing programs over the past three years has for the poor, improving quality of life for the received positive recognition from the people. community, including management agencies, • For poor and remote areas: built new and local authorities, social organizations and upgraded many educational and medical beneficiaries. through many award: Enterprise establishments, improved backwardness For Community, Enterprise For Poverty and underdevelopment on education. For Alleviation; Enterprises for the cause of more developed regions and pronvinces, education; Enterprises for the development BIDV has contributed to the modernization of ethnic minorities in Vietnam... and many of educational facilities for school facilities certificates of merit of the Government, (computers, projectors, etc.), provided ministries, provinces, cities.

BIDV - ANNUAL REPORT 2016 115 CONTRIBUTION TO IMPROVE THE ENVIRONMENT

COMPLIANCE WITH ENVIRONMENTAL • BIDV has issued and guided the whole REGULATIONS AND COMMUNICATION TO system to synchronize various measures to RAISE AWARENESS save and avoid wastefulnes, which were listed in detailed to each item of capital and banking Compliance with environmental assets: staff expenses, assets, building of offices, regulations and communication to raise vehicles Cars, working-trip allowances, etc., and awareness have specific regulations on quota, conditions, Implementing the Prime Minister's Directive payers and responsible authorities. No. 30 / CT-TTg dated November 27, 2015 The supervision and inspection of saving on enhancing control over investment • practice and avoiding wastefulness are projects using large amounts energy and conducted indirectly (through reporting and resources that may pollute the environment, warning) and also directly through regular BIDV has proactively and promptly issued supervision at grassroot levels. guiding documents throughout the system. Accordingly, when appraising and deciding • Annually, BIDV has reviewed and strictly on loans for investment projects, BIDV strictly applied the penalty to groups and individuals complies with the Government's guideline in who have achievements or violated regulations Directive 30, guiding documents of related on saving practice and avoiding waste. ministries and related agencies (if available). This With the above synchronized solutions, BIDV ensure that the provision of loans is in line with saves VND300-500 billion in annual business the policy on economical use, energy efficiency, management expenses ,contributing to the natural resources and environmental protection completion of the business plan of the whole Implementation of saving measures system. Practicing saving measures and avoiding Creating a scientific and effective working wastefulness is always one of the key solutions environment contributing to improving the financial capacity In developing IT systems for business and of BIDV, which is implemented comprehensively management of internal activities, BIDV not only in all activities, namely: focuses on investing and developing modern • The direction, management and organization IT systems to increase labor productivity of savings practice at BIDV always comply with and competitiveness, the ability to meet the the Law on economical practice and avoiding business and management requirements,etc., wastefulness and the specific direction and but also focus on the development of action program of the Government and the SBV environmentally friendly, energy-saving systems in 2016 on Save against waste. such as:

116 CONTRIBUTION TO IMPROVE THE ENVIRONMENT

IN THE COURSE OF ITS OPERATIONS, ALONG WITH THE DEVELOPMENT OF BUSINESS OPERATIONS, EXPANSION OF THE NETWORK AND IMPROVEMENT OF SERVICE QUALITY, BIDV HAS ALWAYS PAID ATTENTION TO THE RESPONSIBILITY OF PROTECTING THE ENVIRONMENT, COMPLYING WITH ENVIRONMENT LAWS AND REGULATION, RAISING AWARENESS THROUGH PRACTICAL ENVIRONMENTAL PROTECTION ACTIVITY, GROWING GREEN CREDIT AND FINANCING ENVIRONMENTAL PROJECTS.

• Investing in the construction and The results of environmental protection within implementation of environmentally friendly IT the scope of the Rural Finance Project and systems (using green technology, saving energy, further expansion within the framework of the reducing the emission of harmful fumes etc.); Vietnam Sustainable Agricultural Conversion Project (VNSAT) funded by the World Bank Investing in the construction and • in Vietnam is one of the most noticable implementation of electronic office system achievement in the effort of promoting green (Office One); issuing the Regulation on the REPORT DEVELOPMENT SUSTAINABLE credit growth and managing environmental management and handling of work in the and social risks in credit operations. form of electronic mail; issuing the Regulation on management and use of e-mail system The Rural Finance Project including the Rural to circulate documents throughout the BIDV Finance Project I (1997-2002), the Rural Finance system through the intranet system, which helps Project II (2002-2009) and the Rural Finance saving printing, paper and postal expenses. Project III (2009-2014) with a total loan of up to USD 520 million issued by the World Bank (WB) Investing in the construction and • has been implemented continuously from 1997 implementation of the Video Conference system to 2017. The main objective of the project is to and E-learnning system, ect to quickly and support the Government of Vietnam in its efforts conveniently organize and hold meetings in the to develop the economy and improve living whole system, which reduces time as well as conditions in rural areas. Besides funding, the travel and accommodation costs. project also aims to protect the environment. • Investing in the development of e-banking In particular, the project requires that financial systems and transaction channels (Internet institutions (including commercial banks and Banking, Mobile Banking, Smart Banking, BSMS, PCFs) and subprojects ownerns participating in HomeBanking, ATM / POS, etc.); Electronic the project must comply with the regulations payment or collection services (payment for on environmental protection of Vietnam, not to electricity, water, telecommunications, television; finance sub-projects that have negative impact collection servive for State Treasury, the on the environment or projects in areas which General Department of Taxation, etc.). This helps are prohibited by the Law on Environmental customers to use Banking anywhere, anytime Protection. without having to go to traditional banking With the determination to deliver its commiment transaction points. to implement environmental protection within PROMOTING GREEN CREDIT GROWTH AND the Rual Finance Projects by Government of MANAGING ENVIRONMENTAL AND SOCIAL Vietnam and World Bank projects, over the past RISKS IN CREDIT OPERATIONS 20 years, BIDV, as a wholesale bank along with 37 financial institutions participating in the

BIDV - ANNUAL REPORT 2016 117 project, have always achieved many successes date shows that: at the audit time as well as in terms of environmental protection, namely: (i) at the time of inspection, out of total more 1 legal normative documents on environmental million loans (subproject), no subproject has protection have been developed and issued for serious impact on the environment; some sub Rural Finance projects and commercial banks projects only ave moderate, mild, impact, and that participate in the projects, (ii) Continuously on the other hand, hundreds of subprojects organized dozens of domestic and foreign have a positive impact to Environment due training courses within the framework of to reforestation, planting of clean vegetables, each project on environmental protection application of clean technologies to for hundreds of credit officers of commercial production, etc. This is a great achivement and banks and PCFs. (iii) thereby constantly raising contribution of the project chain to the effort awareness of environmental protection of environmental protection in Vietnam over work among hundreds of creditors of the the past years. This has been highly acclaimed participating financial institution and millions by the Ministry of Natural Resources and of borrowers nationwide, (iv) the project has Environment, MPI, the State Bank of Vietnam, created a System linkages within the banking the Ministry of Finance, and The World Bank industry from the wholesale bank level (IDV) to at the workshops announcing the results of the retail banks (37 financial institutions ) along environmental audits, as well as in the World with the network of thousands of affiliated Bank periodic monitoring reports. agencies in the coordination of evaluation, At the report of reviewing Rural Finance Project inspection and supervision Subproject in 2014 of the 2 units of consultancy (Institute owners in strictly adhering to regulations on for Environment and Development Science environmental protection of WB and VN. and Mekong Economics) which are selected So far, 100% of credit officers of commercial by the World Bank evaluated the completion banks participating in the project have of the Rural Finance project, as follows: thoroughly grasp the process of integrating "Changing the environmental awareness of the economic and financial appraisal process PFIs lending is one of the greatest successes with the environmental appraisal process of the Rural Finance Project. Most PFIs before making decision on lending. 100% assert that participation in IFP helped of the borrowers when approaching the them change their perceptions about the capital source of the World Bank Rural Finance role of environmental commitments when Project have signed "Environmental protection lending, changing the perception of leaders, commitments", also, "Environmental impact bankers and bank customers on ensuring assessment reports" are approved” during the environmental conditions when lending”. As implementation of many subprojects. a result, at the end of the Rural Finance Projects chain, 100% of loan sub-projects have fully Noticeably, the 4 rounds of "Environmental complied with Vietnam's VMT regulations and auditing" of the Rural finance project: including WB's environmental safeguard policies and are Rural finance project II in 2006 and 2007 and highly appreciated by the World Bank and the Rural finance project III in 2012 and 2013, as international community. This is considered well as a series of WB’s periodic and unexpected a model that needs to be scaled out in the supervision trip by World Bank with Project coming decades. Management Unit (Transaction Center III - BIDV) since the implementation of the project to It is the successes in environmental protection

118 CONTRIBUTION TO IMPROVE THE ENVIRONMENT

of the Rural Finance Project series that by the WB within the framework of the VNSAT persuaded WB continues to replicate and project for the period 2015-2020. This success is apply the environmental protection standards not only inherited, but it also demonstrates the implemented by BIDV and other financial determination and pioneering of BIDV in step institutions within the framework of the Rural by step putting environmental standards into Finance Project projects series in the process the process of lending the banking system in of implementing the project “Sustainable general, BIDV in particular. agricultural conversion in Vietnam "(VNSAT). This PARTICIPATING IN SPONSORING AND is a new ODA project, with a total capital of up to SUPPORTING ENVIRONMENTAL PROJECTS USD237 million has just been officially signed by the Government of Vietnam and the World Bank Paying significant attention to environmental in late 2015, of which the project mainly funding projects, in December 2015, BIDV signed two areas: Production and processing of rice and a USD148 million preferential credit loan re-cultivation of coffee. In 2016, the project has to support Phase 1 of the Long An Green begun disbursing credit capital (USD105 million / Environment Technology Complex Project in

USD237 million) through five commercial banks Long An province. This project is contracted by REPORT DEVELOPMENT SUSTAINABLE selected for the VNSAT project. In which BIDV Vietnam Waste Treatment Joint Stock Company continues to be selected by the WB, acting as a - Long An. wholesale bank, is responsible for coordinating Green Environmental Technology Complex all disbursement, environmental and social is located in Tan Lap commune, Thu Thua protection activities for the credit component. district, Long An province and applies the most (USD105 million). With that role, BIDV once advanced waste treatment technologies in the again researched and successfully issued world such as renewable energy from waste and the "framework for environmental and social gasification technology, gasification, recycling management" in the framework of the VNSAT processes, material recycling, etc. The project is project, which applies to all commercial banks designed to be flexible and expandable to meet and final borrowers participating in the project. future interregional waste management needs. Particularly, the regulations on environmental protection issued and issued by BIDV within the This is the largest waste treatment project in our framework of the IP will continue to be used country, helping solve the complicated problems of environmental pollution, creating a healthy environment and improving living conditions for people. The project is a bright spot for sustainable development and environmental safety. In addition, BIDV has sponsored a number of green credit projects such as: the Huong Linh 2 Wind Power Plant Project of Tan Hoan Cau Corporation (with the oustanding loan of VND481 billion); Garbage Treatment Project of Thanh Quang Investment JSC (with the outstanding loans of VND459 billion); Investment project to build, produce fuel tablets of Phuc Khoa One Member Limited Company (with the The Long An Green Environment Technology Complex Project outstanding loans of VND32 billion).

BIDV - ANNUAL REPORT 2016 119 INFORMATION ANNOUNCEMENT UNDER GRI4 STANDARDS

INFORMATION UNDER G4 SPECIFIC STANDARDS

No GRI Information Announcement Detailed contend I Strategy and Analysis G4-1 Provide a statement from the most senior decision-maker of Message from the Chairman the organization G4-2 Provide a description of key impacts, risks, and opportunities. Section Risk factors II Organization Profile G4-3 Report the name of the organization 2016 corporate profile G4-4 Report the primary brands, products, and services G4-5 Report the location of the organization’s headquarters G4-6 Report the number of countries where the organization Geographical Distribution operates, and names of countries where either the organization has significant operations or that are specifically relevant to the sustainability topics covered in the report G4-7 Report the nature of ownership and legal form Formation and Development Milestones G4-8 Report the markets served (including geographic breakdown, 2016 corporate profile sectors served, and types of customers and beneficiaries). G4-9 Organizational scale: total employees, total branches, sales BIDV’s profile from financial indicators and non- revenue, total capital, liabilities, shareholder’s equity and financial indicators number of products and services G4-10 Report of total employees Employees are classified by (i) Position, (ii) Education, iii) Age (in reference to Section Responsibilities to employees) G4-11 Percentage of employees is mentioned in the Labor 100% employees sign in the Labor Collective Collective Agreement Agreement (in reference to Section Responsibilities to employees - Promoting democracy of employess) G4-12 Description of the supply chain Fields of operation and business area G4-13 Report any significant changes during the reporting period Content relating to the Board of Directors, regarding the organization’s size, structure, ownership, or its the Board of Supervisors and the Board of supply chain Management and Shareholder structure G4-14 Report whether and how the precautionary approach or principle is Risk factors addressed by the organization G4-15 Listing of economic, environmental and social rules and * Risk management following the best practice articles developed outside the organization or other (Basel) (Section Risk management following the initiatives that the organization agrees/supports. best practice) * Using the blueprint of the Project Blue (provided by PwC to identify mega-trends that have a dominant influence on the world macroeconomic environment) in identifying and implementation of BIDV IT Development Strategy for 2015-2020 with a vision to 2030 (Section Strategic Investment in Information Technology) * Using social business processes in banking operations in Contact Center, Social Network Center…(Section More sustainable growth with a driver from retail banking) * Using cloud computing technology and mobile banking applications (Section Strategic Investment in Information Technology) G4-16 List memberships of associations (such as industry Vietnam Banking Association (VNBA), Vietnam associations) and national or international Bond Market Assocation (VBMA), Association of advocacyorganizations Vietnamese Investors in Myanmar (AVIM), Association of Vietnamese Investors in Campuchia (AVIC), Association of Vietnamese Investors in Laos (AVIL)…

120 INFORMATION ANNOUNCEMENT UNDER GRI4 STANDARDS

INFORMATION UNDER G4 SPECIFIC STANDARDS

No GRI Information Announcement Detailed contend III Identified Material Aspects and Boundaries G4-17 Listing of units mentioned or not mentioned in the consolidated The performance of subsidiaries, joint- financial statement. venture and affiliates Explain the process for defining the report content and the Aspect Boundaries G4-18 Explain how the organization has implemented the Reporting Principles for Defining Report Content List all the material Aspects identified in the process for defining G4-19 report content Report Overview For each material Aspect, report the Aspect Boundary within the G4-20 organization For each material Aspect, report the Aspect Boundary outside the G4-21 organization Report the effect of any restatements of information provided in No change in the report from 1 January G4-22 previous reports, and the reasons for such restatements 2015 to 31 December 2015. Report significant changes from previous reporting periods in the Report 2016 has no significant change G4-23 Scope and Aspect Boundaries from 2015 report IV The consultancy of relevant parties - Customers - Employees - Shareholders, investors G4-24 Provide a list of stakeholder groups engaged by the organization - Service suppliers - Government agencies - Press agencies - The community Report the basis for identification and selection of stakeholders with G4-25 whom to engage G4-26 Report the organization’s approach to stakeholder engagement The consultancy of relevant parties Report key topics and concerns that have been raised through

G4-27 REPORT DEVELOPMENT SUSTAINABLE stakeholder engagement V Report Profile Reporting period (such as fiscal or calendar year) for information Report for the period from 1 January G4-28 provided. 2016 to 31December 2016 In 2017 (Preparing Sustainable G4-29 The latest reporting day. Development Report 2016) G4-30 Reporting cycle (such as annual, biennial) Annual Email: [email protected] G4-31 Provide the contact point for questions regarding the report or its contents Hotline: 04 22201099 Report on “appropriate” solutions that the organization chooses and G4-32 prepares the guidelines for GRI appendix Application of GRI G4 guidelines G4-33 Report on external policy and practices VI Corporate Governance Report the governance structure of the organization, including G4-34 Activities of BOD and Committees committees of the highest governance body Report the process for delegating authority for economic, G4-35 environmental and social topics from the highest governance body to senior executives and other employees According to BIDV's decentralization and Report whether the organization has appointed an executive-level authorization regulations position or positions with responsibility for economic, environmental G4-36 and social topics, and whether post holders report directly to the highestgovernance body. Report processes for consultation between stakeholders and the highest G4-37 The consultancy of relevant parties governance body on economic, environmental and social topics Introduction on the Board of Directors, The senior management team: independence, term, commitment, G4-38 the Board of Management and the Board capacity, representation of relevant parties of Supervisors.

BIDV - ANNUAL REPORT 2016 121 INFORMATION UNDER G4 SPECIFIC STANDARDS

No GRI Information Announcement Detailed contend Description of the Board of Directors, the G4-39 The separation or plurality of Chairman and CEO committees under BOD

Process of assigning the senior management team and G4-40 committees, criteria in choosing the members

Process for the senior management team to avoid and G4-41 control the interest conflicts According to BIDV's charter and complied to the guidelines of the State Bank Role of the Board of Directors and CEO in building and G4-42 approving the economic, environmental and social objectives and policy.

Participate in Corporate Governance training courses (List of BODs participating in corporate governance programs during the year). The Report the measures taken to develop and enhance the BOD's Committees under the Board of Directors, G4-43 highest governance body’s collective knowledge of functional units/departments propose on economic, environmental and social topics. measures to manage risk. Research center and some professional departments provide Macroeconomic Bulletin, Legal Newsletters, Market Risk and Market Risk Bulletin.

Report of the Board of Directors on 2016 activities Report on the process of evaluating the performance and G4-44 and results, main duties in 2017 (Section BOD's action plan of the Board of Directors. report)

Role of the Board of Directors in defining and managing the G4-45 relevant impact and risks including consultancy activities of relevant parties. The Board of Directors set up Risk Management Committee to consult, advise and assist the Role of the Board of Directors in reviewing effective risk BOD in Risk identification and management, G4-46 management process and assessment of the effectiveness of the risk management process. The committee's meetings are held on quanterly basis or ad-hoc basic as needed. G4-47 Report of the frequency of review on risk impact.

Report the highest committee or position that formally Branding and PR department and BOD's reviews and approves the organization’s G4-48 secretariat review and submit to the Board of sustainability report and ensures that all material Aspects are Management for approval covered.

Report the process for communicating critical concerns to G4-49 BOD Description of the Board of Directors, the Report the nature and total number of critical concerns that committees under BOD G4-50 were communicated to t BOD and the mechanism(s) used to address and resolve them.

G4-51 Report the remuneration policies for the BOD and BOM Remunerations and Benefits of the BOD and BOM

Describe the organization’s values, principles, standards and G4-56 norms of behavior such as codes of conduct and codes of ethics. Code of Conduct and Code of Ethics (Section Business Culture toward sustainable development) Internal and external regulations for behavior and legal G4-57 compliance.

122 INFORMATION ANNOUNCEMENT UNDER GRI4 STANDARDS

INFORMATION UNDER G4 SPECIFIC STANDARDS

A. INFORMATION ON CORPORATE GOVERNANCE APPROACH The corporate governance manner in key field and G4 DMA Corporate Governance (Pg.83) approaches to evaluate corporate governance manner. B. INDICATORS ON SECTOR PERFORMANCE I. Economic category

Sustainable business performance (Section G4-EC1 Direct economic value generated and distributed Sustainable Economic Growth)

Financial implications and other risks and opportunities G4-EC2 None for the organization's activities due to climate change

Development and impact of infrastructure investments Through professional activities, BIDV supports the G4-EC7 and services supported development of economic and local economic sectors. Implement social security activities, actively contribute to poverty alleviation, improve the Significant indirect economic impacts, including the G4-EC8 quality of people's life (Section Social responsibility- extend of impacts Pg.111) II. Environmental Category Implementation of saving measures, effective G4 EN3 Energy consumption within the organization energy usage (Section 5.Contribution to improve the environment - Pg.116)

Bank offices and branches are located near residential area, comfortable for people to do Operational sites owned, leased, managed in, or adjacent transaction. The Bank does not construct the G4 EN11 to, protected areas and areas of high biodiversity value offices in the locations that may expose the outside projected areas. risks of polluting the ecological system and biological diversity to be protected. With the success of the environmental protection SUSTAINABLE DEVELOPMENT REPORT DEVELOPMENT SUSTAINABLE program of the Rural Finance Projects, World Bank continues to replicate and apply environmental standards conducted by BIDV and other financial Extent of impact mitigation of evironmental impacts of G4-EN27 institutions within the Rural Finance framework in products and services. implement the Sustainable Agriculture Conversion Project in Vietnam (Section Promoting Green Credit Growth and Managing Environmental and Social Credit Risk in Credit Operations - Pg.117) Monetary value of significant fines and total number G4-EN29 of non-monetary sanctions for non-compliance with None evironmental laws and regulations. BIDV uses environment - friendly IT infrastructure (green technology, save energy, reduce Significant evironmental impacts of transporting environmental impact, etc.); invests in the products and others goods and materials for the construction and implementation of the Video G4-EN30 organization's operations, and transporting members of Conference system, E-learning system to reduce the workforce. time and travel expenses of the workforce, etc (Section Building professional and effective working environment - Pg.116) BIDV continues to implement saving measures G4-EN31 Total cost and investment for environmental protection. (Section Implementation of saving measures - Pg.116)

Significant actual and potential negative environmental G4-EN33 None impacts in the supply chain and actions taken

G4-EN34 Number of grievances about enviromental impacts None filed, addressed, and resolved through formal grievance mechanisms.

BIDV - ANNUAL REPORT 2016 123 INFORMATION UNDER G4 SPECIFIC STANDARDS

III. Social category 1. Treatment with employees and sustainable works a. Employment Benefits provided to full-time employees that are Ensuring employees' benefit (Section G4-LA2 not provided to temporary or partime employees, by Responsibility to employees). significant locations of operation. Return to work and retention rates after parental leave, 100% female employees back to work after G4-LA3 by gender. maternity leave. b. Labor/Management Relations

Minimum notice periods regarding operational changes Promoting democracy of employees. Through the G4-LA4 including whether these are specified in collective labor unions, employees are informed of business agreements. activities and results of the Bank.

c. Occupational Health and Safety

Percentage of total workforce represented in formal joint At BIDV, the Labor Union is the representative management - worker health and safety committees G4-LA5 for employees to participate in periodical health that help monitor and advise on occupational health and check. safety programs.

Type of injury and rates of injury, occupational diseases, No employees quit due to the work-related health G4-LA6 lost days, and absenteeism, and total number of work- problems. related fatalities, by region and by gender.

Workers with high incidence or high risk of diseases G4-LA7 No employees get the work-related diseases. related to their occupation.

Health and safety topics covered in formal agreements Ensuring employees' benefit (Section G4-LA8 with trade unions. Responsibility to employees - Pg.105) d. Training and Education Average hours of training per year per employee by G4-LA9 gender, and by employee category. Focus on employees'training and improving Programs for skills management and lifelong learning workforce's quality, (Section Responsibility to G4-LA10 that support continued employability of employees and employees - Pg.105) assist them in managing career endings. Building effective salary and bonus based on Percentage of employees receiving regular performance the work efficiency with 100% employees to be G4-LA11 and career development reviews, by gender and by appraised on capacity and promotion perspectives. employee category. (Section Responsibility to employees - Pg.105) e. Diversity and Equal Opportunity Composition of governance bodies and breakdown of employees per employee category according to gender, G4-LA12 Employee structure (Section Human Resources - age group, minority group membership, and other Pg.45) indicators of diversity. f. Equal Remuneration for Women and Men Ratio of basic salary and remuneration of women to Basic salary and remuneration is not different for G4-LA13 men by employee category, by significant locations of Women and Men, based on the work efficiency. operation. g. Labor Practices Grievance Mechanisms Number of grievance about labour practices filed, G4-LA16 addressed and resolved through formal grievance None mechanisms.

124 INFORMATION ANNOUNCEMENT UNDER GRI4 STANDARDS

INFORMATION UNDER G4 SPECIFIC STANDARDS

2. Human rights Total and rate of key investment agreements with the term G4-HR1 The Bank is considering to quantify. of human rights. Total number of incidents of discrimination and corrective G4-HR3 None actions taken. Operations and suppliers identified as having significant The Bank does not use children under in any G4-HR5 risk for incidents of child labor, and measures taken to operations. contribute to the effective abolition of child labor. Operations and suppliers indentified as having significant risk for incidents of forced or compulsory labor, and measures G4-HR6 None to contribute to the elimination of all forms of forced or compulsory labor. Total number of incidents of violations involving rights of G4-HR8 None indigenous people and actions taken. BIDV always treats people as the bank's most valuable assets. Hence, human resources are one Total number and percentage of operations that of the most important resources for the bank G4-HR9 have been subject to human rights reviews or impact to be prioritized development, ensure workers' assessments. rights, gender equality, democracy, etc (Section Responsibilities to employees - Pg.105) Significant actual and potential negative human rights BIDV has not calculated sufficient human right G4-HR11 impacts in the supply chain and actions takens. violations and its impact to the Bank. Number for grievances about human rights impacts G4-HR12 filed, addressed, and resolved thorugh formal grievance None mechanisms. 3. Society Percentage of operations with implemented local SUSTAINABLE DEVELOPMENT REPORT DEVELOPMENT SUSTAINABLE G4-SO1 community engagement, impact assessments, and Corporate social responsibility - Pg.111. development programs. Operations with significant actual and potential negative The Bank is considering to quantify the huge G4-SO2 impacts on local communities. impact on local community. Through BIDV's business of banking or social Access points in low-populated or economically FS13 security activities (Section Social Responsibility - disadvantaged areas by type. Pg.111) Assisting in the development of economic Total value of political contributions by country and industries in line with the Government's policy, G4-SO6 recipient/benificiary. reducing lending interest rates, etc (Section Community Responsibility - Pg.105)

Total number of legal actions for anti-competitive behavior, G4-SO7 None anti-trust, and monopoly practices and their outcomes.

Monetary value of significant fines and total number of G4-SO8 non-monetary sanctions for non-compliance with laws None and regulations

Percentage of new suppliers that were screened using G4-SO9 The Bank is considering to quantify criteria for impacts on society

The Bank is considering to quantify by defining Significant actual and potential negative impacts on society in G4-SO10 vendor criteria regarding the impact on society in the supply chain and actions taken. the supply chain. Number of grievances about impacts on society filed, G4-SO11 addressed, and resolved through formal grievance None mechanisms

BIDV - ANNUAL REPORT 2016 125 INFORMATION UNDER G4 SPECIFIC STANDARDS

4. Product Responsibility

a. Customer Health and Safety

Percentage of significant product and service categories Health insurance products (incurable diseases, G4-PR1 for which health and safety impacts are assessed for serious diseases) improvement

Total number of incidents of non-compliance with regulations and voluntary codes concerning the health G4-PR2 None and safety impacts of products and services during their life cycle, by type of outcomes.

b. Product and Service Labeling Type of product and service information required by BIDV always provide full and honest information the organization's procedures for product and service about retail products/services through channels G4-PR3 information and labelling, and percentage of significant such as counters, internet channels, telesales product and service categories subject to such channels and ATM channels (Section Responsibilities information requirements. to Customer - Pg.109)

Total cases not mentioning product/service information G4-PR4 None and label.

With the aim to sustainable development, enhance competitiveness and service quality of BIDV, the Bank measures external customer satisfaction once a year; hires reputed independent partners to independently measure G4-PR5 Result of surveys measuring customer satisfaction. external customer satisfaction; measures internal customer (between BIDV internal units) twice a year; makes quarterly staff surveys on different topics (Section Responsibilities to Customer, Responsibilities to employees - Pg.105-109)

Advice and provide full and clear information to all customers about the conditions as well Fair policies of developing and selling financial products FS15 as product benefits.Taking full responsibility to and services. customers according to commitment (Section Responsibilities to Customer - Pg.109)

Through activities of Customer Contact and Lead the promotion of financial literacy by type of FS16 Social Network Center (Section Responsibilities to beneficiary. Customer - Pg.109)

c. Marketing Communications

G4-PR6 Sale of banned or disputed products. None

G4-PR7 Violation of communications and marketing rules. None

d. Customer Privacy

G4-PR8 Total claims on breach of customer privacy None

e. Compliance

Monetary value of the penalties from violations of law G4-PR9 None and regulations.

126 FINANCIAL STATEMENT

BIDV - ANNUAL REPORT 2016 127 Deloitte Vietnam Company Ltd. 12A Floor, Vinaconex Tower 34 Lang Ha Street, Dong Da District Hanoi, Vietnam Tel : +844 6288 3568 Fax : +844 6288 5678 No.: /VN1A-HN-BC www.deloitte.com/vn

INDEPENDENT AUDITORS’ REPORT

To: The Shareholders The Board of Directors and the Board of Management Joint Stock Commercial Bank for Investment and Development of Vietnam

We have audited the accompanying consolidated nancial statements of Joint Stock Commercial Bank for Investment and Development of Vietnam (the “Bank”), prepared on 24 March 2017 as set out from page 05 to page 60, which comprise the consolidated balance sheet as at 31 December 2016, the consolidated income statement and the consolidated cash ow statement for the year then ended, and a summary of signi cant accounting policies and other explanatory information. Board of Management’s Responsibility The Bank’s Board of Management is responsible for the preparation and fair presentation of these consolidated nancial statements in accordance with Vietnamese Accounting Standards, accounting regime applicable to credit institutions in Vietnam and legal regulations relating to consolidated nancial reporting and for such internal control as the Board of Management determines is necessary to enable the preparation of consolidated nancial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated nancial statements based on our audit. We conducted our audit in 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 consolidated nancial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated nancial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated nancial 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 consolidated nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the eectiveness of the Bank’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Management, as well as evaluating the overall presentation of the consolidated nancial statements. We believe that the audit evidence we have obtained is sucient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated nancial statements present fairly, in all material respects, the consolidated nancial position of the Bank and its subsidiaries as at 31 December 2016, and their consolidated nancial performance and their consolidated cash ows for the year then ended in accordance with Vietnamese Accounting Standards, accounting regime applicable to credit institutions in Vietnam and legal regulations relating to consolidated nancial reporting.

Nguyen Tuan Anh Do Hong Duong Audit Director Auditor Audit Practising Registration Certi cate Audit Practising Registration Certi cate No. 1291-2013-001-1 No. 2393-2015-001-1

For and on behalf of DELOITTE VIETNAM COMPANY LIMITED

24 March 2017 Hanoi, S.R. Vietnam

FINANCIAL STATEMENT

Deloitte Vietnam Company Ltd. 12A Floor, Vinaconex Tower 34 Lang Ha Street, Dong Da District Hanoi, Vietnam Tel : +844 6288 3568 CONSOLIDATED BALANCE SHEET FORM B 02/TCTD-HN Fax : +844 6288 5678 As at 31 December 2016 Unit: VND million No.: /VN1A-HN-BC www.deloitte.com/vn

INDEPENDENT AUDITORS’ REPORT NO. ITEMS Notes Closing balance Opening balance A ASSETS To: The Shareholders The Board of Directors and the Board of Management I. CASH, GOLD AND GEMSTONES 6 7,106,546 6,588,849 Joint Stock Commercial Bank for Investment and Development of Vietnam II. BALANCES WITH CENTRAL BANKS 7 36,710,770 21,718,717 We have audited the accompanying consolidated nancial statements of Joint Stock Commercial Bank for III. PLACEMENTS WITH AND LOANS TO OTHER CREDIT INSTITUTIONS 8 61,865,173 67,097,936 Investment and Development of Vietnam (the “Bank”), prepared on 24 March 2017 as set out from page 05 to page 60, which comprise the consolidated balance sheet as at 31 December 2016, the consolidated income 1. Placements with other credit institutions 39,849,011 47,523,973 statement and the consolidated cash ow statement for the year then ended, and a summary of signi cant 2. Loans to other credit institutions 22,076,457 19,574,966 accounting policies and other explanatory information. Provision for credit losses of placements with and loans to other 3. 9 (60,295) (1,003) Board of Management’s Responsibility credit institutions The Bank’s Board of Management is responsible for the preparation and fair presentation of these IV. TRADING SECURITIES 10 10,016,115 8,872,709 consolidated nancial statements in accordance with Vietnamese Accounting Standards, accounting regime applicable to credit institutions in Vietnam and legal regulations relating to consolidated nancial reporting 1. Trading securities 10,086,026 8,903,682 and for such internal control as the Board of Management determines is necessary to enable the preparation of consolidated nancial statements that are free from material misstatement, whether due to fraud or error. 2. Provision for impairment on trading securities (69,911) (30,973) Auditors’ Responsibility V. DERIVATIVES AND OTHER FINANCIAL ASSETS 11 - 101,882 Our responsibility is to express an opinion on these consolidated nancial statements based on our audit. We VI. LOANS TO CUSTOMERS 713,633,464 590,917,428 conducted our audit in accordance with Vietnamese Standards on Auditing. Those standards require that we 1. Loans to customers 12 723,697,408 598,434,475 comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated nancial statements are free from material misstatement. 2. Provision for credit losses on loans to customers 13 (10,063,944) (7,517,047) An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the VII. INVESTMENT SECURITIES 14 144,412,972 121,564,774 consolidated nancial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated nancial statements, whether due to 1. Available-for-sale investment securities 113,657,155 87,421,277 fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Bank’s 2. Held-to-maturity investment securities 36,823,521 36,848,571 preparation and fair presentation of the consolidated nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the 3. Provision for credit losses on investment securities (6,067,704) (2,705,074) eectiveness of the Bank’s internal control. An audit also includes evaluating the appropriateness of VIII. LONG-TERM INVESTMENTS 4,329,801 5,250,679 accounting policies used and the reasonableness of accounting estimates made by the Board of

Management, as well as evaluating the overall presentation of the consolidated nancial statements. 1. Investments in joint-ventures 15.1 3,297,900 4,302,995 FINANCIAL STATEMENT We believe that the audit evidence we have obtained is sucient and appropriate to provide a basis for our 2. Investments in associates 15.2 696,220 568,171 audit opinion. 3. Other long-term investments 457,466 539,162 Opinion 4. Provision for impairment of long-term investments (121,785) (159,649) In our opinion, the consolidated nancial statements present fairly, in all material respects, the consolidated nancial position of the Bank and its subsidiaries as at 31 December 2016, and their consolidated nancial IX. FIXED ASSETS 16 9,721,944 8,535,310 performance and their consolidated cash ows for the year then ended in accordance with Vietnamese 1. Tangible assets 16.1 5,373,497 4,554,885 Accounting Standards, accounting regime applicable to credit institutions in Vietnam and legal regulations relating to consolidated nancial reporting. a. Cost 9,605,942 8,129,132 b. Accumulated depreciation (4,232,445) (3,574,247) 2. Intangible assets 16.2 4,348,447 3,980,425 a. Cost 5,283,678 4,681,424 b. Accumulated amortisation (935,231) (700,999)

Nguyen Tuan Anh Do Hong Duong X. OTHER ASSETS 17 18,607,365 19,858,656 Auditor Audit Director 1. Other receivables 5,784,931 5,132,165 Audit Practising Registration Certi cate Audit Practising Registration Certi cate No. 1291-2013-001-1 No. 2393-2015-001-1 2. Interest and fee receivables 9,229,160 9,386,292

For and on behalf of 3. Deferred Corporate income tax assets 7,467 - DELOITTE VIETNAM COMPANY LIMITED 4. Other assets 3,739,195 5,489,966

24 March 2017 5. Provisions for impairment of other assets (153,388) (149,767) Hanoi, S.R. Vietnam TOTAL ASSETS 1,006,404,150 850,506,940

BIDV - ANNUAL REPORT 2016 129 Unit: VND million

NO. ITEMS Notes Closing balance Opening balance

B. LIABILITIES AND OWNERS' EQUITY I. BORROWINGS FROM THE GOVERNMENT AND THE SBV 18 43,392,135 45,401,599 II. DEPOSITS AND BORROWINGS FROM OTHER CREDIT INSTITUTIONS 19 92,499,222 79,758,318 1. Deposits from other credit institutions 33,146,730 21,546,428 2. Borrowings from other credit institutions 59,352,492 58,211,890 III. DEPOSITS FROM CUSTOMERS 20 726,021,696 564,692,853 GRANTS, TRUSTED FUNDS AND BORROWINGS AT RISK OF THE IV. 21 11,361,960 35,295,248 CREDIT INSTITUTION V. VALUABLE PAPERS ISSUED 22 66,642,041 65,542,240 VI. DERIVATIVES AND OTHER FINANCIAL LIABILITIES 11 103,320 - VII. OTHER LIABILITIES 23 22,239,527 17,481,222 1. Interest and fee payables 13,397,161 9,434,349 2. Other payables and liabilities 8,793,168 8,041,398 3. Deferred corporate income tax payable 49,198 5,475 TOTAL LIABILITIES 962,259,901 808,171,480 VIII. CAPITAL AND RESERVES 1. The Bank's capital 25 34,304,553 34,271,776 a. Charter capital 34,187,153 34,187,153 b. Share premium 30,306 30,306 c. Other capital 87,094 54,317 2. The Bank's reserves 25 3,376,582 2,464,088 3. Foreign exchange reserve 25 (111,569) (42,645) 4. Retained earnings 25 4,970,931 4,256,503 5. Non-controlling interests 25 1,603,752 1,385,738 TOTAL OWNERS' EQUITY 44,144,249 42,335,460 TOTAL LIABILITIES, OWNERS' EQUITY AND NON-CONTROLLING 1,006,404,150 850,506,940 INTERESTS

OFF-BALANCE-SHEET ITEMS As at 31 December 2016 Unit: VND Million

NO. ITEMS Notes Closing balance Opening balance

1. Credit guarantees 39 1,004,168 821,624 2. Foreign exchange commitments 1,613,485 584,034 a. Foreign currency purchase commitments 1,415,531 365,191 b. Foreign currency sale commitments 197,954 218,843 3. Letters of credit commitments 39 59,046,088 45,091,001 4. Other guarantees 39 111,567,973 88,658,341 5. Other commitments 39 11,642,916 18,225,670

130 FINANCIAL STATEMENT

CONSOLIDATED INCOME STATEMENT For the year ended 31 December 2016 Unit: VND million

NO. ITEMS Notes Current year Prior year 1. Interest and similar income 26 62,600,277 49,005,228 2. Interest and similar expenses 27 (39,165,682) (29,690,259) I NET INTEREST INCOME 23,434,595 19,314,969 3. Income from services 4,490,151 3,962,354 4. Expenses on services (1,981,011) (1,625,823) II NET PROFIT FROM SERVICES 28 2,509,140 2,336,531

III NET GAIN FROM TRADING GOLD AND FOREIGN CURRENCIES 29 534,468 293,971

IV NET GAIN/(LOSS) FROM TRADING SECURITIES 30.1 455,425 (62,986)

NET GAIN FROM INVESTMENT SECURITIES 30.2 402,957 11,294 V NET GAIN/(LOSS) FROM INVESTMENT AND TRADING SECURITIES 858,382 (51,692) 5. Income from other activities 3,785,164 3,537,553 6. Expense from other activities (1,902,181) (1,168,160) VI NET PROFIT FROM OTHER ACTIVITIES 31 1,882,983 2,369,393

INCOME FROM CAPITAL CONTRIBUTION, EQUITY VII 32 1,214,488 448,992 INVESTMENTS Total operating income 30,434,056 24,712,164 7. Staff costs (7,428,666) (6,255,652) 8. Depreciation and amortisation expenses (852,536) (611,532) FINANCIAL STATEMENT FINANCIAL STATEMENT 9. Other operating expenses (5,245,419) (4,219,992) VIII TOTAL OPERATING EXPENSES 33 (13,526,621) (11,087,176)

NET PROFIT FROM OPERATING ACTIVITIES BEFORE PROVISION IX 16,907,435 13,624,988 FOR CREDIT LOSSES

X PROVISION FOR CREDIT LOSSES 9, 13, 14.6 (9,198,824) (5,676,332)

XI PROFIT BEFORE TAX 7,708,611 7,948,656 10. Current Corporate income tax expense 34.1 (1,496,525) (1,566,497) 11. Deferred Corporate income tax income/(expense) 34.2 16,770 (5,403) XII CORPORATE INCOME TAX EXPENSE (1,479,755) (1,571,900)

XIII PROFIT AFTER TAX 6,228,856 6,376,756 Non-controlling interests (91,305) (78,675) Net profit attributable to the equity holders of the Bank 6,137,551 6,298,081 ACCUMULATED LOSSES CARRIED FORWARD FROM MHB XIV - (475,818) MERGER

NET PROFIT ATTRIBUTABLE TO THE EQUITY HOLDERS 6,137,551 5,822,263

Basic earnings per share (VND/share) 35 1,354 1,427

BIDV - ANNUAL REPORT 2016 131 CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 December 2016 Unit: VND million

ITEM Notes Current year Perior year

CASH FLOW FROM OPERATING ACTIVITIES Interest and similar income received 62,945,978 48,226,900 Interest and similar expenses paid (35,306,195) (27,936,388) Income received from services 2,509,140 2,336.531 Net cash from dealing in foreign currencies, gold and trading securities 1,268,537 139,093 Other (expenses)/incomes (808,661) 165,068 Cash recovered from bad debts written off or compensated by provision 2,689,902 2,184,281 for credit losses Payments to employees and for operating management (12,386,934) (9,964,510) Corporate income tax paid for the year 34.1 (1,604,553) (1,732,575) NET CASH FLOW FROM OPERATING ACTIVITIES BEFORE MOVEMENTS IN FIXED 19,307,214 13,418,400 ASSETS AND WORKING CAPITAL Changes in operating assets Decrease/(Increase) in placements with and loans to other credit institutions 211,948 (8,638,139) (Increase) in trading securities (27,338,431) (27,842,627) Decrease/(Increase) in derivatives and other financial assets/liabilities 205,202 (176.642) (Increase) in loans to customers (113,968,232) (123,334,456) (Decrease) in provision for credit losses on bad debts 13, 14.5, 14.6 (3,228,372) (3,906,999) Decrease in provision for debts sold to VAMC 13 (141,194) (1,029,827) Decrease in other operating assets 1,654,625 5,570,172 Changes in operating liabilities (Decrease)/Increase in borrowings from the Government and the (23,992,602) 31,409,689 State Bank of Vietnam Increase/(Decrease) in deposits and borrowings from other credit institutions 4,551,489 (13,490,098) Increase in deposits from customers (including the State Treasury) 178,611,747 90,622,936 Increase in valuable papers (excluding valuable papers charged into financial 1,099,801 45,465,209 activities) (Decrease) in grants, trusted funds and borrowings at risk of the credit institution (23,933,288) (150,019) (Decrease) in other liabilities (2,384,998) (1,201,681) Payment from the credit institution's reserves 25 (440) (514) NET CASH GENERATED BY OPERATING ACTIVITIES 10,654,469 6,715,404

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of fixed assets (2,298,616) (1,079,974) Proceeds from sales, disposal of fixed assets 10,192 22,387 Expenses on sales, disposal of fixed assets (3,981) (2,343) Cash recovered from investments in other entities 955,650 286,323 Cash paid for investments in other entitites - (393,721)

132 FINANCIAL REPORTSFINANCIAL STATEMENT

Unit: VND million

Dividends and profit received from long-term investments and capital contribution 32 334,302 277,913

NET CASH (USED IN) INVESTING ACTIVITIES (1,002,453) (889,415)

CASH FLOWS FROM FINANCING ACTIVITIES Proceed from share issue and owners' contributed capital 25 - 1,187,248 Dividends paid to shareholders, profit distributed (2,940,383) (2,883,908) NET CASH (USED IN) FINANCING ACTIVITIES (2,940,383) (1,696,660) NET INCREASE IN CASH 6,711,633 4,129,329 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 55,806,145 50,199,476 CASH AND CASH EQUIVALENTS RECEIVED FROM MHB MERGER - 1,477,340 CASH AND CASH EQUIVALENTS RECEIVED FROM CONSOLIDATION OF IIDC AND SUBSIDIARIES 3,004,011 - CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 36 65,521,789 55,806,145

Note: Full version of BIDV Audited Financial Statements is available at www.bidv.com.vn

ACCOUNTING CONVENTION The accompanying consolidated financial statements, expressed in Vietnam Dong (VND), are prepared under the historical cost convention and in accordance with accounting standards, accounting regime applicable to credit institutions in Vietnam and legal regulations relating to consolidated financial reporting. However, due to the Bank’s large scale of operations, for the purpose of preparing these consolidated financial statements, the figures are rounded to and presented in millions of Vietnam Dong (VND million). This presentation does not materially impact the consolidated financial statements in terms of the consolidated financial position, the consolidated results of operations and the consolidated cash flows of the Bank and its subsidiaries. With regard to the number of shares and basic earnings per share, the Bank presented the items in unit.

The accompanying consolidated financial statements are not intended to present the consolidated financial position, FINANCIAL STATEMENT consolidated results of operations and consolidated cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Vietnam. ADOPTION OF NEW GUIDANCE On 30 December 2014, the Ministry of Finance issued Circular No. 210/2014/TT-BTC ("Circular 210") guiding the accounting regime applicable to securities companies. This Circular replaces Circular No. 95/2008/TT-BTC dated 24 October 2008 of the Ministry of Finance guiding the accounting applicable to securities companies and Circular No. 162/2010/TT-BTC dated 20 October 2010 amending and supplementing Circular No. 95/2008/TT-BTC dated 24 October 2008 of the Ministry of Finance. On 27 December 2016, the Ministry of Finance issued Circular No. 334/2016/TT-BTC amending and supplementing Annexes 02 and 04 of Circular No. 210/2014/TT-BTC dated 30 December 2016 ("Circular 334"). Circular 210 and Circular 334 are effective for financial years beginning on or after 01 January 2016. This circular sets out regulations relating to accounting vouchers, accounting account systems as well as methods of preparing and presenting financial statements of securities companies. The Bank has applied Circular 210 and Circular 334 in the preparation and presentation of the consolidated financial statements for the year ended 31 December 2016. Accordingly, to ensure the comparability of information, the Bank has restated the corresponding figures of the prior year for some items materially affected by the application of Circular 210 and Circular 334. BASIS OF CONSOLIDATION The consolidated financial statements incorporate the financial statements of the Bank and enterprises controlled by the Bank (its subsidiaries). The control is achieved where the Bank has the power to govern the financial and operating policies of investee enterprises so as to obtain benefits from the activities. The business results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition and up to the effective date of disposal. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by the Bank. All internal transactions and balances between the Bank and its subsidiaries and among subsidiaries are eliminated on consolidation.

BIDV - ANNUAL REPORT 2016 133 PROVISION FOR CREDIT LOSSES Classification of loans and provision for credit losses Classification of loans and provision for credit losses in Vietnamese market In accordance with Circular 02 and Circular 09, credit institutions should implement loan classification and credit loss provisioning. Loan classification and credit risk provisioning in compliance with Circular 02 and Circular 09 are applied to Assets (hereinafter referred to as “debts”) including: Loans; Financial leases; Discounts, rediscounts of negotiable instruments and other valuable papers; Factoring; Credit facilities in the form of credit card issuance; Payments on behalf under off-balance sheet commitments; Amounts for purchase and entrustment of purchase of corporate bonds unlisted on the stock market or unregistered to be traded in the Unlisted Public Company Market (UPCoM) (hereinafter referred to as unlisted bonds), excluding entrusted capital sources for purchase of unlisted bonds whereby the entrusting parties bear risks; Credit extension entrustment; Deposits (excluding current accounts) at domestic credit institutions, foreign banks’ branches in Vietnam as prescribed by law and deposits at foreign credit institutions. Accordingly, customers’ loans are in the more risky group when being classified under Article 10 and Article 11 of Circular 02 and customers’ debt group provided at the time of loan classification by the Credit Information Center ("CIC") of the State Bank of Vietnam. Loans are classified by risk level into: Current. Special mention. Substandard. Doubtful and Loss. Loans classified as either Substandard, Doubtful or Loss are considered as bad debts. Loan classification will be made at the end of each quarter for the first three quarters and on 30 November for the fourth quarter of the financial year. Net loan exposure for each customer is calculated by subtracting from the loan balance the discounted value of collateral which is subject to discount rates in accordance with Circular 02. Specific provision is made based on the net loan exposure of each customer using the prescribed provision rates as follows:

Group Category Provision rate 1 Current 0% 2 Special mention 5% 3 Sub-standard 20% 4 Doubtful 50% 5 Loss 100%

In accordance with Circular 02, a general provision is made for credit losses which are yet to be identified during the loan classification and specific provision process as well as in case of the Bank’s potential financial difficulty due to the deterioration in loan quality. Accordingly, the Bank is required to fully make and maintain a general provision at 0.75% of total of loans which are classified in groups 1 to 4 excluding deposits and loans, repurchase and reverse repurchase agreements of valuable papers with credit institutions, branches of foreign banks in Vietnam and deposits at foreign credit institutions. Classification of loans and provision for credit losses in Cambodian market According to Prakas Direction No. B7-09-074 dated 25 February 2009 issued by the National Bank of Cambodia on loan classification and making provisions, the Bank must conduct a credit portfolio review to make provisions in five (05) groups of debt, including: Current, Special mention, Substandard, Doubtful and Loss. Accordingly, general and specific provisions should be made based on total outstanding loans of each debt group with the prescribed provision rates as follows:

134 unemployment insurance and the working period thatemployees period receiveunemployment insuranceand theworking resignation allowance from employers. usedfor period calculation ofresignationThe working allowance excludes thatemployees theperiod benefitsfrom employees whohave regularly for year. allowance worked for 12monthsormore, eachworking half-monthsalary According 48ofLabourCode dated 18June2012,theBankisresponsible to to Article pay resignation allowance for Resignation allowance uses its Welfare Fund retirement to pay benefits one-time to employees undertheBankoritssubsidiaries’ regulations. at therate of18%theemployee’s addition,theBankalso period. In onamonthlybasisfor theirworking basicsalary to benefits to contribute by paying these post-employment Insurance socialinsurance premiumAgency Social to the ofLabour,Agency, Affairs. whichbelongsto andSocial Invalids theMinistry are The Bankanditssubsidiaries required Post-employment benefitsare paid to retiredInsurance employees Social by the oftheBankanditssubsidiaries Post-employment benefits EMPLOYEE BENEFITS statements according to Circular No. ofFinance. 200/2014/TT-BTC dated2014issuedby theMinistry 22December dividends, whichare from distributed profits ofjointstock companies, are not recognized intheconsolidated financial consolidated incomestatement whentheBank’s to receive right dividendsandprofits hasbeenestablished. Share Cash dividendsandprofits received from are investment andcapitalcontributions activities recorded inthe profitsreceived and Dividends off-balance sheetitem andisonly recognized intheconsolidated incomestatement whenitisactually received. income ofoverdue isnotrecognized securities intheconsolidated incomestatement for theyear andisrecorded as andexpensesfrom interestIncome oninvestments are insecurities recorded ontheaccrualbasis. Accrued interest received.when itisactually interest item onsuchloansisrecorded andis recognized asoff-balance-sheet intheconsolidated incomestatement the loansthatare classifiedfrom group 2 to group 5isnot recognized intheconsolidated incomestatement. Accrued (“CircularNHNN dated 18March 09”)amendingCircular 2014oftheSBV 02,theaccruedinterest from incomearising institutions, foreign banks’ branchesissuedby theGovernor oftheState Bankof Vietnam andCircular No. 09/2014/TT- on credit assetsclassification,provision rate, provisionrisk provisions methodandtheuseof intheoperationofcredit According to regarding Circular 2013(“Circular No, 02”)oftheSBV theregulation dated 02/2013/TT-NHNN 21January from interestIncome andinterest expenseare recognized intheconsolidated incomestatement onanaccrualbasis. Interest income interest and expense Revenue andexpenses on overdue statusandotherqualitative indicators. commitments arerisk levels classified as by follows: Current, mention,Substandard, Special andLoss Doubtful , based 11ofCircular 02.Accordingly, 10orArticles sheet commitments”) 9,Articles off-balance-sheet asstipulated inArticles unconditional, irrevocable loancommitmentswithspecificeffective date (collectively referred toas “off-balance- accordance withCircularIn 02oftheSBV, credit institutionsshouldclassifyguarantees, acceptancesofpayment and Classification commitments ofoff-balance-sheet are missing. into Group 5oriftheborrowers are legalentities, liquidated orifindividualborrowers orbankrupted have deceasedor According to Committee CircularSettlement to are 02,theBankmustsetupRisk offbaddebtsifthey write classified The provision isrecorded intheconsolidated incomestatement asanexpenseandwillbeusedto offbaddebts. write Use ofprovision Group 5 4 3 2 1 Loss Doubtful Substandard Special mention Current Category From 360days onwards From 180to below 360days From 90days to below 180days From 30days to below 90days Under 30days Number ofdaysNumber overdue provision rate General BIDV -ANNUAL 2016 REPORT 0% 0% 0% 0% 1% FINANCIAL STATEMENT provision rate Specific 100% 50% 20% 3% 0% 135

FINANCIAL STATEMENT Retrenchment benefits According to Article 49 of Labour Code, the Bank is responsible to pay retrenchment benefits for employees who have worked regularly for 12 months or more but are retrenched from their jobs as a result of organisational restructuring, technological changes, economic reasons, mergence, consolidation and splitting. For each year of employment, the employee is entitled to one-month salary but no less than two months’ salary. The working period used for calculation of retrenchment benefits excludes the period that employees benefit from unemployment insurance and the working period that employees receive retrenchment allowance from employers. Unemployment insurance According to the Law on Employment No. 38/2013/QH13 dated 16 November 2013, the Bank has the obligation to contribute to the Unemployment Insurance Fund with an amount equal to 1% of their employees’ insured salaries and wages.

TRADING SECURITIES Unit: VND million

ITEM Closing balance Opening balance

DEBT SECURITIES 9,775,928 8,589,409 Securities issued by the Government 9,775,928 8,178,398 Securities issued by the economic entities - 411,011 EQUITY SECURITIES 310,098 314,273 Equity securities issued by local credit institutions 7,894 41,392 Equity securities issued by local economic entities 302,204 272,881 PROVISION FOR IMPAIRMENT OF TRADING SECURITIES (69,911) (30,973) 10,016,115 8,872,709

LOANS TO CUSTOMERS Unit: VND million

ITEM Closing balance Opening balance

Loans to local economic entities and individuals 711,467,031 588,368,916 Discounted commercial bills and valuable papers 5,591 20,000 Receivables from finance leases 1,148,928 1,264,563 Amounts paid due to commitments to other parties on behalf of customers 30,435 25,515 Government-directed loans 28,147 51,732 Loans to foreign entities and individuals 11,017,276 8,703,749 723,697,408 598,434,475

ANALYSIS OF LOAN PORTFOLIO BY QUALITY Unit: VND Million

ITEM Closing balance % Opening balance %

Current 682,185,112 94.26 570,845,421 95.39 Special mention 27,083,337 3.75 17,535,374 2.93 Substandard 6,481,930 0.90 3,975,637 0.66 Doubtful 1,035,811 0.14 887,764 0.15 Loss 6,911,218 0.95 5,190,279 0.87 723,697,408 100 598,434,475 100

136 FINANCIAL STATEMENT

MOVEMENTS IN PROVISION FOR CREDIT LOSSES ON LOANS TO CUSTOMERS FOR THE YEAR ENDED 31 DECEMBER 2016 WERE AS FOLLOWS:

Unit: VND million

ITEM Specific provision General provision Total

OPENING BALANCE 3,276,160 4,240,887 7,517,047

Provision made during the year 4,041,181 896,062 4,937,243

Decrease in the provision due to the debt sold to VAMC (141,194) - (141,194)

Bad debts written off by provision in the year (2,547,205) - (2,547,205)

Other increase 209,164 88,889 298,053

CLOSING BALANCE 4,838,106 5,225,838 10,063,944

LONG-TERM INVESTMENTS Unit: VND million

ITEM Closing balance Opening balance

Investments in joint-ventures 3,297,900 4,302,995

Investments in associates 696,220 568,171

Other long-term investments 457,466 539,162

Provision for impairment of long-term investments (121,785) (159,649)

4,329,801 5,250,679 FINANCIAL STATEMENT FINANCIAL STATEMENT

DEPOSITS FROM CUSTOMERS (by types of deposits) Unit: VND million

ITEM Closing balance Opening balance

DEMAND DEPOSITS 124,926,847 104,317,083

Demand deposits in VND 111,640,036 93,976,316

Demand deposits in gold and foreign currencies 13,286,811 10,340,767

TERM DEPOSITS 596,173,612 456,657,948

Term deposits in VND 568,868,683 422,112,575

Term deposits in foreign currencies 27,304,929 34,545,373

DEPOSITS FOR SPECIFIC PURPOSES 4,921,237 3,717,822

Deposits for specific purposes in VND 3,361,940 2,400,312

Deposits for specific purposes in foreign currencies 1,559,297 1,317,510

726,021,696 564,692,853

BIDV - ANNUAL REPORT 2016 137 DEPOSITS FROM CUSTOMERS (by types of customers and types of businesses) Unit: VND million

ITEM Closing balance % Opening balance %

State-owned companies 27,013,648 3.72 23,856,562 4.22 Foreign-invested companies 21,157,102 2.91 13,925,047 2.47 Joint-stock companies, limited companies, private enterprises 177,037,388 24.38 151,559,827 26.84 Household businesses 394,647,471 54.36 310,233,970 54.94 Others 106,166,087 14.63 65,117,447 11.53 726,021,696 100 564,692,853 100

VALUABLE PAPERS ISSUED Unit: VND million

ITEM Closing balance Opening balance

CERTIFICATES OF DEPOSITS 47,141,004 44,850,571 Terms under 12 months 16,293,349 28,569,499 Terms from 12 months to under 05 years 29,845,417 16,278,861 Terms from 05 years onwards 1,002,238 2,211 BILLS 608 736 Terms under 12 months 290 354 Terms from 12 months to under 05 years 318 382 BONDS 367 1,000,366 Terms from 12 months to under 05 years 61 1,000,060 Terms from 05 years onwards 306 306

BIDV'S SUBORDINATED BONDS ISSUED 19,500,062 19,690,567

66,642,041 65,542,240

INTEREST AND SIMILAR INCOME Unit: VND million

ITEM Current year Prior year

Interest income from deposits 1,412,658 1,346,217 Interest income from loans to customers 51,120,479 39,135,703 Interest income from debt securities 8,493,985 7,022,124 - Interest income from trading securities 185,180 451,432 - Interest income from investment securities 8,308,805 6,570,692 Guarantee income 1,346,098 1,283,264 Interest income from finance leases 20,412 104,755 Other incomes from credit activities 206,645 113,165 62,600,277 49,005,228

138 FINANCIAL STATEMENT

INTEREST AND SIMILAR EXPENSES Unit: VND million

ITEM Current year Prior year

Deposit interest expenses 32,213,548 23,844,797 Loan interest expenses 3,277,762 3,611,037 Interest expenses for issuance of valuable papers 3,439,697 2,207,769 Expenses for other credit activities 234,675 26,656 39,165,682 29,690,259

NET PROFIT FROM SERVICES Unit: VND million

ITEM Current year Prior year

INCOME FROM SERVICES 4,490,151 3,962,354 Settlement services 1,760,830 1,462,284 Treasury activities 51,668 37,212 Agency services 125,048 151,898 Insurance activities 1,181,251 978,461 Other services 1,371,354 1,332,499 EXPENSES FOR SERVICES (1,981,011) (1,625,823) Settlement services (166,367) (141,630) Treasury activities (148,734) (120,312) Post and telecommunications (117,744) (91,937) FINANCIAL STATEMENT FINANCIAL STATEMENT Agency services (3,949) (646) Insurance activities (944,326) (797,752) Other services (599,891) (473,546) NET PROFIT FROM SERVICES 2,509,140 2,336,531

NET GAIN FROM TRADING GOLD AND FOREIGN CURRENCIES Unit: VND million

ITEM Current year Prior year

INCOME FROM TRADING GOLD AND FOREIGN CURRRENCIES 1,193,026 1,218,939 Income from foreign currency spot transactions 693,080 789,532 Income from trading gold 1,313 1,725 Income from monetary derivative financial instruments 498,633 427,682 EXPENSES FOR TRADING GOLD AND FOREIGN CURRRENCIES (658,558) (924,968) Expenses for foreign currency spot transactions (217,098) (516,855) Expense for trading gold (498) (1,270) Expenses for monetary derivative financial instruments (440,962) (406,843) NET GAIN FROM TRADING GOLD AND FOREIGN CURRRENCIES 534,468 293,971

BIDV - ANNUAL REPORT 2016 139 NET GAIN/(LOSS) FROM TRADING SECURITIES Unit: VND million

ITEM Current year Prior year

Income from trading securities 725,315 333,256 Expenses for trading securities (493,484) (404,439) Reversal of provision for impairment of trading securities 223,594 8,197 455,425 (62,986)

NET GAIN FROM INVESTMENT SECURITIES Unit: VND million

ITEM Current year Prior year

Income from available-for-sale securities 506,525 106,114 Expenses for available-for-sale securities (4,297) (189,834) Provision (made)/reversed for impairment of investment securities (99,271) 95,014 excluding special bonds (See Note 14.5) 402,957 11,294

COMPARATIVE FIGURES COMPARATIVE FIGURES ARE FIGURES OF THE BANK’S AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015. TO ENSURE THE COMPARABILITY OF INFORMATION, AS AT 31 DECEMBER 2016, THE BANK RESTATED THE OPENING BALANCE/PRIOR YEAR’S FIGURES OF THE CONSOLIDATED FINANCIAL STATEMENT ITEMS ACCORDING TO MATERIAL EFFECTS ARISING FROM THE ADJUSTMENTS OF THE OPENING BALANCES/PRIOR YEAR’S FIGURES OF THE SUBSIDIARIES WHICH ARE SECURITIES COMPANIES WHEN CIRCULAR 210 AND CIRCULAR 334 ISSUED BY THE MINISTRY OF FINANCE WERE APPLIED, AS WELL AS THE REALLOCATION OF BUSINESS SEGMENTS BY GEOGRAPHICAL AREA. DETAILS ARE AS FOLLOWS: Unit: VND million

Opening balance/Prior year

Figures before Figures after ITEMS Adjustment adjustment adjustment CONSOLIDATED BALANCE SHEET Deposits in other credit institutions 47,686,682 (162,709) 47,523,973 TOTAL ASSETS 850,669,649 (162,709) 850,506,940 Deposits of customers 564,583,061 109,792 564,692,853 Other payables and liabilities 8,313,899 (272,501) 8,041,398 TOTAL LIABILITIES 808,334,189 (162,709) 808,171,480 TOTAL SHAREHOLDER'S EQUITY AND LIABILITIES 850,669,649 (162,709) 850,506,940

140 FINANCIAL STATEMENT

Unit: VND million

Opening balance/Prior year

Figures before Figures after ITEMS Adjustment adjustment adjustment

SEGMENT REPORT BY GEOGRAPHICAL AREA

Northern area

Net income from external transactions 3,149,646 (107,427) 3,042,219

Total assets as at 31 December 2015 506,037,426 (103,384) 505,934,042

Oversea

Net income from external transactions (76,286) 107,427 31,141

Total assets as at 31 December 2015 839,074 (59,325) 779,749

Total

Total assets as at 31 December 2015 850,669,649 (162,709) 850,506,940

CONSOLIDATED CASH FLOW STATEMENT

Increase deposits of customers (including State Treasury) 90,644,160 (21,224) 90,622,936

Other (decrease) in operating liabilities (1,063,428) (138,253) (1,201,681)

Net cash generated by operating activities 6,874,881 (159,477) 6,715,404 FINANCIAL STATEMENT

Net increase in cash 4,288,806 (159,477) 4,129,329

Cash and cash equivalents at the beginning 50,202,708 (3,232) 50,199,476 of the year

BIDV - ANNUAL REPORT 2016 141 BRANCHES AND SUBSIDIARIES NETWORK BRANCHES

HANOI REGION Transaction Center 3 Branch Bac Hung Yen Branch Hoan Kiem District, Hanoi Yen My District Transaction Center 1 Branch Hung Yen Branch Hai Ba Trung District, Hanoi Tu Liem Branch Nam Tu Liem District, Hanoi Hung Yen City Hong Ha Branch Hai Phong Branch Quang Minh Branch Hai Ba Trung District, Hanoi Hong Bang District Quang Minh District, Hanoi Hoan Kiem Branch Dong Hai Phong Branch Hoan Kiem District, Hanoi Ha Tay Branch Ngo Quyen District Ha Dong District, Hanoi Hai Ba Trung Branch Lach Tray Branch Dong Da District, Hanoi Son Tay Branch Le Chan District Son Tay Town, Hanoi Quang Ninh Branch Quang Trung Branch Ha Long City Hai Ba Trung District, Hanoi Thach That Branch Thach That District, Hanoi Tay Nam Quang Ninh Branch Ba Dinh Branch Uong Bi City Ba Dinh District, Hanoi Dai La Branch Hai Ba Trung District, Hanoi Mong Cai Branch Ha Noi Branch Mong Cai City Hoan Kiem District, Hanoi Thai Ha Branch Dong Da District, Hanoi Cam Pha Branch Dong Da Branch Cam Pha City Dong Da District, Hanoi Gia Lam Branch Gia Lam District, Hanoi Ha Long Branch Ha Long City Tay Ho Branch Ba Dinh District, Hanoi Thanh Tri Branch Thanh Tri District, Hanoi RED RIVER DELTA Nam Ha Noi Branch Hoai Duc Branch Hoang Mai District, Hanoi Thai Binh Branch Dan Phuong District, Hanoi Thai Binh City Dong Ha Noi Branch Dong Anh Town, Hanoi Ngoc Khanh Ha Noi Branch Ha Nam Branch Dong Da District, Hanoi Phu Ly City Thang Long Branch Nam Tu Liem District, Hanoi Bac Ha Branch Nam Dinh Branch Cau Giay District, Hanoi Nam Dinh City Tay Ha Noi Branch OUTSIDE HANOI REGION Thanh Nam Branch Nam Tu Liem District, Ha Noi Nam Dinh City Bac Ha Noi Branch Vinh Phuc Branch Ninh Binh Branch Long Bien District, Hanoi Vinh Yen City Ninh Binh City Thanh Do Branch Phuc Yen Branch Tam Diep Branch Long Bien District, Hanoi Phuc Yen Town Tam Diep Town Bac Ninh Branch Ha Thanh Branch NORTH CENTRAL COAST REGION Hoan Kiem District, Hanoi Bac Ninh City Trang An Branch Tu Son Branch Thanh Hoa Branch Ba Dinh District, Hanoi Tu Son Town Thanh Hoa City Kinh Bac Branch Bim Son Branch Thanh Xuan Branch Bim Son Town Thanh Xuan District, Hanoi Bac Ninh City Lam Son Branch Hai Duong Branch Dong Do Branch Thanh Hoa City Cau Giay District, Hanoi Hai Duong City Nghe An Branch Cau Giay Branch Bac Hai Duong Branch Vinh City Chi Linh Town Cau Giay District, Hanoi Phu Quy Branch Chuong Duong Branch Thanh Dong Branch Thai Hoa Town Hai Duong City Hoan Kiem District, Hanoi Phu Dien Branch Dien Chau District

142 BRANCHES AND SUBSIDIARIES NETWORK

To contact with BIDV's branches, please visit: www.bidv.com.vn/ chinhanh/bando

Thanh Vinh Branch Dung Quat Branch Da Lat Branch Vinh City Binh Son District Da Lat City

Ha Tinh Branch NORTH MOUNTAINOUS Dak Lak Branch Ha Tinh City REGION Buon Ma Thuot City Quang Binh Branch Dong Dak Lak Branch Dong Hoi City Bac Giang Branch Bac Giang City EaKar Town Bac Quang Binh Branch Ba Don Town Cao Bang Branch Bac Dak Lak Branch Cao Bang City Buon Ho Town Quang Tri Branch Dong Ha City Dien Bien Branch Ban Me Branch Dien Bien Phu City Buon Ma Thuot City Thua Thien Hue Branch Hue City Ha Giang Branch Dak Nong Branch Ha Giang City Phu Xuan Branch Gia Nghia Town Hue City Hoa Binh Branch Hoa Binh City Binh Phuoc Branch Ky Anh Branch Dong Xoai Town Ky An Town Lai Chau Branch Lai Chau City Gia Lai Branch Pleiku City SOUTH CENTRAL COAST Lang Son Branch REGION Lang Son City Nam Gia Lai Branch Pleiku City Da Nang Branch Lao Cai Branch Hai Chau District Lao Cai City Pho Nui Branch Pleiku City Hai Van Branch Sa Pa Branch Lien Chieu District Sapa District MEKONG DELTA REGION Song Han Branch Phu Tho Branch Hai Chau District Viet Tri City An Giang Branch Long Xuyen City Quang Nam Branch Hung Vuong Branch Tam Ky City Viet Tri City Bac An Giang Branch Chau Doc City Hoi An Branch Son La Branch Hoi An City Son La City Long Xuyen Branch Long Xuyen City Quang Ngai Branch Bac Kan Branch Quang Ngai City Bac Kan City Bac Lieu Branch Binh Dinh Branch Thai Nguyen Branch Bac Lieu City Quy Nhon City Thai Nguyen City Ben Tre Branch Phu Tai Branch Nam Thai Nguyen Branch Ben Tre City Quy Nhon City Pho Yen Town Dong Khoi Branch Tay Son Branch Tuyen Quang Branch Ben Tre City Quy Nhon City Tuyen Quang City Ca Mau Branch Phu Yen Branch Yen Bai Branch Ca Mau City Tuy Hoa City Yen Bai City Khanh Hoa Branch Dat Mui Branch Nha Trang City CENTRAL HIGHLAND REGION Ca Mau City Nha Trang Branch Kon Tum Branch Can Tho Branch Nha Trang City Kon Tum City Ninh Kieu District Ninh Thuan Branch Lam Dong Branch Tay Nam Branch Phan Rang -Thap Cham City Da Lat City Ninh Kieu District Binh Thuan Branch Bao Loc Branch Tay Do Branch Phan Thiet City Bao Loc City Ninh Kieu District

BIDV - ANNUAL REPORT 2016 143 Dong Thap Branch Tay Sai Gon Branch Thu Thiem Branch Cao Lanh City District 11, Ho Chi Minh City District 2, Ho Chi Minh City

Sa Dec Branch Ben Nghe Branch OUTSIDE HO CHI MINH CITY Sa Dec City District 3, Ho Chi Minh City REGION Hau Giang Branch Binh Chanh Branch Vi Thanh City Binh Chanh District, Ho Chi Minh City Ba Ria - Vung Tau Branch Vung Tau City Kien Giang Branch Hoc Mon Branch Rach Gia City Hoc Mon District, Ho Chi Minh City Ba Ria Branch Ba Ria City Phu Quoc Branch Phu My Hung Branch Phu Quoc District Nha Be District, Ho Chi Minh City Phu My Branch Tan Thanh District Soc Trang Branch Cu Chi Branch Soc Trang City Cu Chi District, Ho Chi Minh City Vung Tau -Con Dao Branch Vung Tau City Tra Vinh Branch Ky Hoa Branch Tra Vinh City District 5, Ho Chi Minh City Binh Duong Branch Thu Dau Mot City Vinh Long Branch Truong Son Branch Vinh Long City Go Vap District, Ho Chi Minh City Thu Dau Mot Branch Thu Dau Mot City HO CHI MINH CITY REGION Ham Nghi Branch District 1, Ho Chi Minh City My Phuoc Branch Transaction Center 2 Branch Ben Cat Town District 1, Ho Chi Minh City Ba Chieu Branch District 3, Ho Chi Minh City Nam Binh Duong Branch Nam Sai Gon Branch Thuan An Town District 4, Ho Chi Minh City Binh Hung Branch Binh Chanh District, Ho Chi Minh City Song Be Branch Gia Dinh Branch Thu Dau Mot City Binh Thanh District, Ho Chi Minh City Nha Be Branch Nha Be District, Ho Chi Minh City Dong Nai Branch Ben Thanh Branch Bien Hoa City District 1, Ho Chi Minh City Thong Nhat Branch District 1, Ho Chi Minh City Nam Dong Nai Branch Ho Chi Minh City Branch Bien Hoa City District 1, Ho Chi Minh City 30/4 Branch District 3, Ho Chi Minh City Dong Dong Nai Branch Phu Nhuan Branch Long Thanh Town Phu Nhuan District, Ho Chi Minh City Hiep Phu Sai Gon Branch District 7, Ho Chi Minh City Bien Hoa Branch Bac Sai Gon Branch Bien Hoa City District 3, Ho Chi Minh City Binh Thanh Branch Binh Thanh District, Ho Chi Minh City Tay Ninh Branch Tan Binh Branch Tay Ninh City Tan Binh District, Ho Chi Minh City Binh Dien Sai Gon Branch District 8, Ho Chi Minh City Long An Branch Dong Sai Gon Branch Tan An City Thu Duc District, Ho Chi Minh City Chau Thanh Sai Gon Branch District 3, Ho Chi Minh City Moc Hoa Branch Nam Ky Khoi Nghia Branch Kien Tuong Town District 1, Ho Chi Minh City Cat Lai Sai Gon Branch District 9, Ho Chi Minh City Tien Giang Branch Sai Gon Branch My Tho City District 5, Ho Chi Minh City Binh Tan Branch Binh Tan District, Ho Chi Minh City My Tho Branch 3/2 Branch My Tho City District 10, Ho Chi Minh City Thu Duc Branch Thu Duc District, Ho Chi Minh City Cho Lon Branch District 6, Ho Chi Minh City Binh Tay Sai Gon Branch District 5, Ho Chi Minh City

144 BRANCHES AND SUBSIDIARIES NETWORK

SUBSIDIARIES

BIDV Securities Joint Stock Vietnam Aircraft Leasing BIDV’s representative office Company (“BSC”) Company (“VALC”) in Taiwan 10 – 11th Floor, BIDV Tower, 14th Floor, Vincom Tower A, Room 5, F3, No.3, Song Chiang 35 Hang Voi, Hanoi 191 Ba Trieu, Hanoi Road, Zhong Shan District,Taipei Tel: (04) 2. 2200668 Tel: (04) 3. 577 2225 104, Taiwan Tel: +886 2 25039859 BIDV one-member Limited BIDV Metlife Liability Financial Leasing Life Insurance Limited Lao-Viet Joint-Venture Bank Company (“BLC”) Liability Co. (BIDV Metlife) (“LVB”) 472 - 472A -472C Nguyen Thi 10th Floor, Vincom Tower A, LVB Tower, No 44 Lane Xang Minh Khai, Hochiminh City 191 Ba Trieu, Hanoi. Blvd, Tel: (08) 3. 835.6666 Tel: (04) 6.2820808 Vientiane, Lao P.D.R Tel: +856 21 251 418 BIDV Insurance Joint Stock Corporation (“BIC”) JOINT-VENTURES Lao-Viet Insurance Joint- 16th Floor, Vincom Tower A, AND COMMERCIAL Venture Co. (LVI) 191 Ba Trieu, Hanoi. REPRESENTATIVE OFFICES 3rd Floor LVB Tower, No 44, Tel: (04) 2. 2200282 ABROAD Lanexang Avenue, Vientiane, Lao P.D.R. BIDV Asset management BIDV’s representative office Tel: +85621 264972 Company Ltd. (“BAMC”) in Laos 20th Floor, Vincom Tower A, LVB Tower, No 44 Lane Xang Bank for Investment and 191 Ba Trieu, Hanoi. Blvd, Vientiane, Lao PDR Development of Cambodia Tel: (04) 3. 9745922 Tel: +856 21 251 418 (BIDC) No. 370, Preah Monivong Blvd., BIDV International Holdings BIDV’s representative office in Boeng Keng Kang I, Khan Ltd in Hong Kong (“BIDVI”) Cambodia Thmey 2, Daun Penh, 16-19/F, Prince’s Building, 10 27 Preah Suramarit Blvd, Sangkat PhnomPenh,Cambodia Chater Road, Chaktomuk, Khan Daun Penh, Tel: +855 236 716 870 Central, Hong Kong. PhnomPenh, Cambodia Tel: +855 23 220 921 Cambodia – Vietnam JOINT-VENTURES AND Insurance Co. (CVI) AFFILIATES BIDV’s representative office in No. 99, Norodom Blvd., Sangkat Myanmar Boeung Raing, Khan Daun Penh, BIDV Tower Joint-Venture 36 Garden Street (Ou Yin Street), Phnom Penh, Cambodia Company (BIDV Tower) Bahan Township,Yangon, Tel : +855 23 212 000 13rd Floor, BIDV Tower, Myanmar 35 Hang Voi, Hanoi Tel: +95 1 503 603 Cambodia – Vietnam Tel: (04) 2. 2205539 Securities Joint-Stock Co (CVS) BIDV Yangon Branch No. 99, Norodom Blvd., Sangkat BIDV-Vietnam Partners Myanmar Central Tower Boeung Raing, Khan Daun Penh, Investment Management Hoang Anh Gia Lai, Phnom Penh, Cambodia Joint-Venture Company 192 Kabaraye Pagoda Street, Tel : + 855 23 723 899 (“BVIM”) Bahan Township, Yangon, 12Ath Floor, Vincom Tower A, Myanmar Europe Finance Joint-Stock 191 Ba Trieu, Hanoi. Tel: +95-19-345179 Co.(IDCE) Tel: (04) 3.6332075 Vluzich 735/6, Praha 4, BIDV’s representative office Czech republic Vietnam-Russia Joint-Venture in Czech Tel: +420 246 090 777 Bank (“VRB”) Vinohradská 707/86 No. 1, Yet Kieu,Hoan Kiem, Hanoi Praha 3, Czech Republic Tel: (04) 3.9426668 Tel: +420 607 748 888

BIDV - ANNUAL REPORT 2016 145 ANNUAL REPORT 2016

ANNUAL REPORT BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM JSC

BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM JSC

Head o ce: Address: 35 Hang Voi, Hoan Kiem, Hanoi Tel: (84) 4 2220 5544 Fax: (84) 4 2222 5302

Hotline: 19009247

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