2
CONTENTS
I. FINANCIAL PLANNING 10
II. BUSINESS PLANNING 12
1. Retail banking 12
2. Corporate banking 13
3. SME banking 14
4. Investment and interbank 15
5. Debt collection planning 15
III. OPERATION – ORGANIZATION PLANNING 15
APPENDIX 01: BALANCE SHEET 2020 18
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EXECUTIVE SUMMARY
1. World economy forcast 2020
The world economy in the first 4 months of 2020 encountered many
difficulties, the growth of major economies such as the US, China, Japan and
Europe all declined; outbreaks of acute respiratory infections due to a new strain of
Corona virus (Covid-19) worldwide have had a negative impact on the economies
of countries around the world.
Countries around the world have used a range of solutions from monetary
policy, fiscal policy to support packages to help the economy, businesses and people
cope with the Covid-19 pandemic. The US Federal Reserve (Fed) announced a
financial package worth 2.300 billion USD and the supporting package included,
reducing 1% interest rate point, to 0-0.25%, the lowest since 2015. .
In Europe, the EU Ministers of Finance agreed to mobilize a huge bailout
package of 500 billion euros to help the member economies devastated by the
COVID-19 pandemic.
The IMF forecasts that global GDP growth will fall by 3% if the Covid-19
pandemic lasts for the end of the third quarter, down from the January forecast of
3.3% growth in 2020. The IMF raises its economic growth forecast. in global 2021
from 3.4% in January to 5.8%. Asia will be at the forefront of this trend with
Vietnam's GDP growth in 2021, 7%, China 9.2%, and ASEAN 7.8%.
2. Vietnam ecomony forcast 2020
Vietnam's economic outlook is forecasted by the IMF to increase Vietnam's
GDP growth in 2020 to 2.7%, but is expected to recover to 7% by 2021.
Vietnam's economy in April showed many indicators of decrease and
instability:
- CPI in April increased by 4.90% over the same period;
4
- The index of industrial production (IIP) decreased by 10.5% over the same period
last year;
- Registered FDI capital in the first 4 months was approximately US $ 12.3 billion,
down 15.5% over the same period last year;
- The trade balance of goods in the first 4 months of 2020 was estimated to have a
trade surplus of US $ 3 billion, of which, import turnover of goods was US $ 79.89
billion, export turnover of goods was estimated at US $ 82.94 billion;
- The total state budget revenue in April is estimated at 89 trillion dong,
accumulated revenue in 4 months is 491.38 trillion dong, equivalent to 32.5% of
the estimate, down 5.9% against the same period. 2019 period;
- Total state budget expenditure in April was estimated at 128.1 trillion dong, that
of 4 months was 472.1 trillion dong, equaling 27% of the estimate, up 9.8% over
the same period last year. 2019;
- Investment capital from the state budget reached VND 83.7 trillion, equaling
18.1% of the yearly plan (the same period in 2019 was 19.3%);
- There were 37.6 thousand enterprises registered for new establishment, down
13.2% as compared to the same period last year, while the total number of
enterprises suspended from business, dissolved and awaited dissolution was 41.8
thousand. The number of enterprises returning to operation was 3,810, up 11.3%
over the previous month and up 40.4% over the same period in 2019.
Government support solutions to respond to epidemics:
The Prime Minister's Directive No. 11 / CT-TTg at the beginning of March
202020 shows the cooperation between credit institutions and the
Government in efforts to minimize negative impacts from epidemics.
Specifically, 10 commercial banks committed to offer a credit package worth
VND 250,000 billion with preferential conditions for businesses affected by
Covid-19 epidemic..
5
The State Bank issued Circular No. 01/2020 / TT-NHNN dated 13 March
2020 providing for credit institutions and foreign bank branches to restructure
loan repayment, exemption and reduction of interest and fees, remain in debt
group to support customers affected by Covid epidemic - 19.
At the regular online Government meeting in March 2020, the Governor of
the State Bank said that on March 31, the SBV met with 20 credit institutions
(accounting for about 75% of total outstanding loans to the economy). , all of
these organizations have a very high consensus of reducing at least 2% of the
loan interest rate compared to the time before the outbreak.
3. Impact on the business results of commercial banks:
The banking system is indirectly affected mainly by the narrowing of
production and business activities of enterprises, customers and the banks
themselves, especially reducing credit demand reduction, increasing bad debts and
reduce direct transactions at the counter, specifically:
- According to Moody's, the outlook of the 5 largest banks in Vietnam has
changed from Positive to Stable, banks from Stable to Negative;
- According to experts, the Covid-19 epidemic caused the global economic
recession, the Bank is one of the 15 industries most affected;
- Due to epidemics leading to stagnant production, businesses narrowed
production, difficulties in debt repayment and reduced loan demand. It is
estimated that the outstanding debt affected by Covid-19 is about VND 2
million, accounting for 25% of the total outstanding loans of the whole system;
- Banks want to lend money to reduce lending rates (do not lower lending
standards) to find good customers while the mobilizing interest rates do not
decrease because of liquidity. Therefore, profits in 2020 are likely to decrease;
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- Expected revenue of the banking system this year will be reduced from VND
30 trillion to VND 34 trillion. Bank profits are expected to decrease from 10%
to 25%. A number of state-owned banks have announced to reduce their planned
profit in 2020 (VCB decreased by VND 2,200 billion, SHB decreased VND
1,000 billion);
- Many banks have had to cut down on salaries and unnecessary expenses;
- Approximately 20,000 businesses stop trading. NPLs are likely to rise again due
to the impact of cash inflow of borrowing enterprises. Currently, 10 banks have
announced that the bad debt result has increased in Q1, many banks have bad
debt ratio exceeding 3% and close to 4%. This is a burden forcing many banks
to increase the provision: VCB increased by 43%, Saigonbank increased by
51%, Kien Long increased by 37 times, TPBank increased by 19% compared to
the end of 2019;
- Experts forecast that if the disease is controlled in the second quarter, the bad
debt at the end of 2020 will be at 3.7% to 4%..
4. Key tasks in 2020
- Focusing on profit growth towards TOP 10 ROE targets of joint stock
commercial banks.
- Focus resources to increase revenue from retail activities in total income and
develop the retail sector.
- Increase the proportion of service income under traditional banks such as cards,
insurance, guarantees, money transfers…
- Strengthen the organizational structure of Business Units to improve sales capacity
- Set up a salary system based on labor productivity
- Application of Information Technology to improve sales capacity
- Centralize a number of banking activities to improve labor productivity
- Maintain and improve the credit rating of ABBANK
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Summary of financial targets 2020
Unit: bn VND
Item Plan 2020 Result 2019
Compared to 2019
result
+/- %
Total asset
110,918
102,487
8,431 108.2%
Loan
69,646
63,028
6,618 110.5%
- Loan to customer
64,496
56,956
7,540 113.2%
- Corporate bonds
5,150
6,072
(922) 84.8%
Deposit
86,692
78,261
8,431 110.8%
- Deposit from customer
81,052
74,786
6,266 108.4%
- Funds from international
financial institutes
5,640
3,475
2,165 162.3%
Income from services
4,259.4
3,618.3
641.1 117.7%
Operating expenses
2,064.2
1,895.3
168.9 108.9%
Profit before credit risk
provision
2,195.2
1,723.0
472.2 127.4%
Credit risk provision
836.8
494.0
342.8 169.4%
Profit before tax
1,358.4
1,229.0
129.4 110.5%
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Summary of key financial indicators 2020
Item Plan 2020 Result 2019 Unit
Return on average Equity (RoaE) 16.1% 17.1% %/y
Return on average Asset (ROaA) 1.3% 1.4% %/y
Profit before tax / revenue 31.9% 33.9% %
Cost income ratio (CIR) 48.5% 52.0% %
Capital Adequacy Ratio (CAR)
(According Circular 41/2016/TT-
NHNN)
>= 8% 10.5% %
Asset Equity Ratio (A/E)
12.1
13.2 Times
Debt Equity Ratio (D/E)
11.1
12.2 Times
Equity Asset Ratio (E/A) 8.2% 7.6% %
Debt Asset Ratio (D/A) 91.8% 92.4% %
Loans Asset Ratio (LAR- credit risk
factor) 58.1% 55.6% %
Loans Deposit Ratio (LDR) (market
1) 79.6% 76.2% %
Profit before tax/staff
342
310
VND
mil/y
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Details of ABBANK's work plan for 2020 are specified in the attached detail
content. Submit to the Board of Directors for review and approval.
Respectfully,
An Binh Commercial Joint Stock Bank
Acting Chief Executive Officer
(signed)
Le Hai
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DETAIL REPORT
I. FINANCIAL PLANNING
Annual business banking targets 2020
UNIT: bn vnd
Item Plan
2020
Result
2019
Compared to
2019 result
2020 2019 +/- %
Total assets 110,918 102,487 8,431 108.2%
Loan
Total loans 69,646 63,028 6,618 110.5%
Consumer banking 29,883 25,122 4,762 119.0%
SME 14,632 12,425 2,207 117.8%
Corporate banking 24,980 25,331 (351) 98.6%
Customer loans 19,980 19,410 571 102.9%
Corporate bond 5,000 5,922 (922) 84.4%
DATC bond 150 150 - 100.0%
Deposit
Total deposits 86,692 78,261 8,431 110.8%
Consumer banking 38,739 35,554 3,185 109.0%
SME 4,350 3,735 615 116.5%
Corporate banking 43,603 38,973 4,630 111.9%
Including: IFC+ADB 5,640 3,475 2,165 162.3%
Investment
Government bond 20,217 7,769 12,449 260.2%
CIs bond 2,700 1,937 763 139.4%
Corporate bond
(including VAMC) 5,909 7,161 (1,252) 82.5%
Share - 2 (2) 0.0%
Long-term investment
and capital contribution 529 529 - 100.0%
Total 29,355 17,397 11,958 168.7%
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Item Plan
2020
Result
2019
Compared to
2019 result
2020 2019 +/- %
Business
result
Net interest income 2,789.0 2,437.3 351.6 114.4%
Net service income 427.2 198.4 228.8 215.3%
Other income 1,043.2 982.5 60.7 106.2%
Total operating
income 4,259.4 3,618.3 641.1 117.7%
Operating expenses 2,064.2 1,895.3 168.9 108.9%
Profit before
provision 2,195.2 1,723.0 472.2 127.4%
Total provision for
credit risks 836.8 494.0 342.8 169.4%
Profit before tax 1,358.4 1,229.0 129.4 110.5%
Profit plan analysis in 2020
Total planned assets in 2020 are targeted to increase VND 8,431 billion
compared to implemented in 2019 (equivalent to an increase of 8%).
Under the impact of the Covid-19 epidemic on the global and Vietnamese
economic situation in general, the business operations of enterprises and the
banking system in particular, implementing the guidance of the State Bank of
Vietnam. In Circular 01/2020 / TT-NHNN and Directive 02 / CT-NHNN,
ABBANK has been implementing synchronous solutions to support customers in
solving difficulties caused by the Covid-19 epidemic but at the same time. Still
ensure safety in banking business activities. Therefore, ABBANK's planned profit
before tax in 2020 is VND 1,358.4 billion, an increase of 129.4 billion (equivalent
to an increase of 11%) compared to the implementation in 2019. In which:
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- Total income increased by VND 641.1 billion (equivalent to an increase of
18%), including:
Net interest income increased by VND 351.6 billion (equivalent to an
increase of 14%)
Income from service activities increased by VND 228.8 billion (equivalent
to an increase of 115%)
Other income increased by VND 60.7 billion (equivalent to 6%)
- Planned operating expenses increase by 168.9 billion VND, up 9% compared
to 2019
- Total provision for credit risk and bond provision of VAMC is about VND
836.8 billion in 2020, about VND 342.8 billion higher than in 2019.
II. BUSINESS PLANNING
1. Retail banking
1.1 Orientation and business target 2020
Unit: bn VND
Item Plan 2020 Result 2019 Compared to 2019 result
(+/-) %
Deposits 38,739 35,554 3,185 109%
Loans 29,883 25,122 4,762 119%
No of customers 1,070,085 970,085 100,000 110%
Card 112,073 79,295 32,778 141%
ATM (accumulated) 233 217 16 107%
POS (increase) 440 580 (140) 76%
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1.2 Proposed activities / solutions 2020
With Retail Banking, business solutions focus on the needs of 3 customer
segments to build product requirements.:
- Consumer segment
- Average Customer Segment Fair
- Customer segment Pretty - Rich
ABBANK's solution focused on work:
- Increase revenue from services of card products, money transfers, insurance ...
- Optimize processes by technology (LOS system, automatic scoring, Digital
Banking ...)
- Attach the compensation system to the sales performance of each salesperson.
2. Corporate banking
2.1 Orientation and annual business targets 2020
Unit: bn VND
2.2 Activities / solutions expected to be implemented 2020
- Deeply exploiting target groups and sectors (for example, EVN, contractors of
the Ministry of Public Security, Ministry of Defense, food, beverage, logistics,
Item Plan 2020 Result 2019 Compared to 2019 result
(+/-) %
Deposits 43,603 38,973 4,630 112%
Loans 24,980 25,331 (351) 99%
Customer loans 19,980 19,410 571 3%
Corporate bond 5,000 5,922 (922) -16%
No of customers 3,190 3,132 58 102%
Service fee revenue
(incl. guarantee fees) 159 118 42 135%
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pharmaceuticals, healthcare, etc.), further orienting industries according to
annual development trends, top 10 and 20 industries.
- Continuing to develop traditional banking products along with structural
products (stocks, bonds) and electronic products.
- Deploying sales chains from corporate customers.
3. SME banking
3.1 Orientation 2020 and business target in 2020
Unit: Bn vnd
3.2 Activities / solutions expected to be implemented 2020
- Clearly separating 2 customer segments Micro SME and SME.
- Developing customers from the chain of corporate customers and at the
residence of business units.
- Building the image of local SME customers according to the specific
characteristics of the business, in order to offer solutions that meet the
requirements of customers.
- Building products in accordance with the requirements related to risk control,
optimizing processes and applying information technology to ensure customer
service.
- Attach the compensation system to the sales performance of each salesperson.
Item Plan 2020 Result 2019 Compared to 2019 result
(+/-) %
Deposits 4,350 3,735 615 116%
Loans 14,632 12,425 2,207 118%
No of customers 30,190 27,400 2,790 110%
Service fee revenue
(incl. guarantee fees) 162 97 65 167%
Trade service revenue
(USD million) 450 389 61 116%
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4. Investment and interbank
- Liquidity management: Ensure liquidity safety for the Bank with a reasonable
ratio of liquid assets. Ensuring compliance with liquidity reserve ratio, 30-day
solvency ratio, USD in accordance with Circular 22/2019 / TT-NHNN
- Continue to promote activities of currency trading, trading government bonds
and other valuable papers; Diversifying business forms, expanding market
activities 2.
- Promote the implementation of World Bank loan projects such as Rural Finance
Project II (RDFII), Sustainable Agricultural Transformation (VNSAT)
5. Debt collection planning
- The whole bank focused on dealing with and recovering bad debts / problematic
debts through cash collection, asset collection, other ...
- Control the NPL ratio below 3% under the SBV's regulations
III. OPERATION – ORGANIZATION PLANNING
1. Risk management
- Comply with Circular 13/2018 / TT-NHNN and move towards Basel II
standard:
Focus on implementing the Internal Funding Review (ICAAP) project.
Review policies on market risk, credit risk, liquidity risk, interest rate risk
on bank books, etc.
- Establish a social environmental risk management system in credit operations
(ESMS), and a set of social environment risk assessment tools by industry and
business
2. Credit appraisal and operation
- LOS Project: Golive individual customer segment and perform additional
development of additional functions for the system during operation; continue
researching and implementing the system for the SME segment.
- Centralizing credit appraisal and approval.
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- Coordinate with Banking Technology Division to develop utilities on T24, new
applications, operating systems, ... to ensure
Operate credit quickly and safely.
Upgrading and diversifying interbank payment channel
Upgrading and ensuring safety for international payment transactions
Minimize transaction risks at the counter and treasury management risks
Continuously update the prevention of money laundering
3. Banking Technology
- Making a difference with banking products and services on the Digital business
platform.
- Application of intelligent IT in all management and administration activities of
the Bank.
- Ensuring safe and flexible IT infrastructure to meet business activities
continuously.
- Implement projects that support business strategies and comply with
international standards:
Technology of key business processes (credit, fund management ...)
Investing in upgrading core banking applications, upgrading infrastructure
and information technology security;
Implementing the solution and meeting the requirements of the State Bank
and international standards such as PCI DSS and ISO27001;
Disaster prevention drills (DRP) twice a year with key systems.
4. Network development
- Network development plan in 2020: In 2020, ABBANK submits to the State
Bank for approval to open 8 new transaction points (04 branches and 04
transaction offices).
5. Human resource governance
- Improve labor productivity 10%.
- The project to improve the salary regime based on labor productivity.
- Enacting new Labor Rules; Promulgate disciplined processes and regulations;
Code of professional ethics.
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- Completing and implementing the program of Adjacent Directors, Mobile
Directors.
- Increasing the sending of employees to participate in study and abroad training
programs (including in Europe and Asia).
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APPENDIX 01: BALANCE SHEET 2020
Item Plan 2020 Result
2019 Compared 2019 result
(+/-) %
Total asset 110,918 102,487 8,431 108.2%
Cash 1,190 757 433 157.2%
Balance at SBV 1,589 6,803 (5,214) 23.4%
Placement with other credit
institute 10,356 17,776 (7,421) 58.3%
Investment Securities 28,522 16,463 12,059 173.2%
Loan 63,497 56,222 7,276 112.9%
Loans 64,496 56,956 7,540 113.2%
Provision (998) (734) (264) 136.0%
Long-term investment/Equity
contribution 529 529 - 100.0%
Fixed assets 1,440 950 489 151.5%
Derivatives and other
financial assets - 50 (50) 0.0%
Other assets 3,796 2,937 859 129.2%
Liabilities and owner’
equity 110,918 102,487 8,431 108.2%
Due to Government and SBV - - - -
Due to other credit institutes 15,421 16,735 (1,314) 92.1%
Funding from other credit
institutes 3,055 1,162 1,893 262.9%
Derivatives - - - -
Due to customers 81,052 69,595 11,457 116.5%
Valuable papers - 5,191 (5,191) 0.0%
Other liabilities 2,250 2,036 214 110.5%