TECHCOMBANK - ANNUAL REPORT 2017

VIETNAM TECHNOLOGICAL AND COMMERCIAL

JOINT STOCK BANK
enabling
| Techcombank Tower, 191 Ba Trieu,
Hai Ba Trung District, Ha Noi
| (84 24) 3944 6368
FINANCIAL
SUCCESS AND SECURITY
| (84 24) 3944 6395
| www.techcombank.com.vn

2017 ANNUAL
REPORT
 Table of Contents
04 Chairman’s Message 2018

07 THE STRENGTH TO SUCCEED

08 The CEO’s Narrative

15 MANAGEMENT EXCELLENCE
16 Corporate Governance
22 Our Board of Directors
24 Our Supervisory Board
25 Our Board of Management
32 Effective Business Model
34 Standard Operation

37 COMPREHENSIVE SOLUTIONS
38 Optimal Choice
46 The Bank of Choice for Businesses
48 Outstanding Solutions for Large
Enterprises
49 Creating Distinct Value for SMEs

51 ONE VISION
53 Transforming Corporate Culture
65 “Growing” Techcomers

75 VALUE OF SUSTAINABILITY
76 Risk Management
82 Outstanding Performance
86 Sustainable Development to Ensure
SINCE ITS ESTABLISHMENT 24 YEARS AGO, Financial Security for Customers
TECHCOMBANK HAS NURTURED ITS AMBITION TO
BECOME A WORLD-CLASS VIETNAMESE ENTERPRISE 99 FOR THE LOVE OF VIETNAM

THAT MAKES VALUABLE CONTRIBUTIONS TO THE 107 PLAN FOR THE FUTURE
DEVELOPMENT OF SOCIETY. TODAY, THE BANK IS
113 FINANCIAL REPORT
MAKING REMARKABLE PROGRESS IN ITS JOURNEY
TO BECOMING THE BEST BANK IN VIETNAM, AS WELL 202 OPERATION NETWORK
AS A LEADING BANK IN THE REGION, BY 2020.

ENABLING FINANCIAL SUCCESS & SECURITY 3

CHAIRMAN’S MESSAGE 2018

THE IMPLEMENTATION OF OUR TRANSFORMATION
PROGRAM BACKED BY THE STRONG CONFIDENCE FROM
OUR CUSTOMERS, SHAREHOLDERS AND INVESTORS, IS
LEADING US EVER CLOSER TO ACHIEVING OUR MISSION
OF BECOMING A VIETNAMESE COMPANY OF THE HIGHEST
STANDARD, PROUDLY CONVEYING VIETNAMESE VALUES​​
ACROSS THE REGION AND AROUND THE WORLD.
Dear Valued Shareholders, Clients and Techcomers,
Looking further into 2018, Techcombank has an ambitious goal –
to be on a par with its regional and global peers, and in alignment
with international best practices. We aim to realize our ambitions
by implementing Phase II of our Transformation Program, which
focuses on consolidating and improving the Bank’s organizational
structure, while at the same time developing and upgrading
our core systems. To this end, the Board has approved a large-
scale investment to transform Techcombank into a pioneering
technology-driven credit institution. This will not only create the
best experience for our customers, but also support their ability to
make decisions and provide a sustainable, transparent and flexible
banking platform to meet their financial needs.

2017 was a significant year for

Techcombank, as the Bank
achieved a breakthrough
consolidated pre-tax profit of VND8,036 billion, double that
recorded in 2016. Return on equity (ROE) increased sharply,
reaching 23.84%, and return on assets (ROA) increased to 2.09%.
The implementation of our Transformation Program, backed by the
strong confidence from our customers, shareholders and investors,
is leading us ever closer to achieving our mission of becoming a
Vietnamese company of the highest standard, proudly conveying
Vietnamese values across the region and around the world.

Numerous achievements allowed us to capitalize on strong

growth momentum. Techcombank is the sector leader
for Visa credit card payments, our free-of-charge online Sincerely,
transactions through the “Zero Fee” program and the
bancassurance scheme continue to break new milestones,
and bad debt that we were holding has been dealt with in a
thorough and transparent manner.

These results prove that our decision to prioritize high-value

and less risky customer segments, while optimizing operational HO HUNG ANH
expenses and contingencies, was the right move for the Bank Chairman
to take. As a result, S&P upgraded Techcombank’s credit
rating in line with Vietnam’s sovereign rating, while The Asian
Banker, a prestigious regional banking sector magazine, voted
Techcombank among the top two banks in Vietnam, with the
highest profitability from their core business operations.

(*) On the monthly basis, excluding the bancassurance agency supporting fee and gain
4 ANNUAL REPORT 2017 from selling Vietnam Airlines shares in 2017 ENABLING FINANCIAL SUCCESS & SECURITY 5
 The strength
TO SUCCEED
THE PINNACLE OF TECHCOMBANK’S SUCCESS
STORY IN 2017 WAS OUR STABILITY, WHICH
AFFORDED US THE RESILIENCE TO ENDURE
DIFFICULT MARKET CONDITIONS, CHALLENGES
FROM THE GLOBAL ECONOMY AND INTRINSIC
VIETNAMESE ECONOMIC ISSUES.

6 ANNUAL REPORT 2017 Mr. NGUYEN LE QUOC ANH ENABLING FINANCIAL SUCCESS & SECURITY 7
CEO
THE STRENGTH TO SUCCEED
THE CEO’S NARRATIVE
Dear Valued Shareholders,
Clients and Techcomers,
2017 was a positive year for our Nation’s
economy, creating ideal conditions
for the success and development of
both Vietnamese businesses and the
Vietnamese people.
A SIMPLE YET PRESSING
QUESTION WE MUST
ASK OURSELVES - HOW
HAVE WE, AS PART OF
VIETNAM’S BANKING
SECTOR, CONTRIBUTED TO
THIS SUCCESS?
The banking system is the lifeblood
of the economy. It plays the role
of financial intermediary for many
people and organizations. When
banks allocate financial resources
to sectors with more growth
opportunities, consequently the
economy and the banks themselves
grow. By contrast, when banks direct
resources towards problematic
sectors, bad debts arise and banks
are not contributors, but rather
disruptors of growth.
8 ANNUAL REPORT 2017
Choosing the right direction
A
s one of the major banks in Vietnam, CHOOSING THE RIGHT DIRECTION ENABLES
Techcombank closely follows the
.policies set by the Government and TECHCOMBANK TO FOCUS ITS RESOURCES
the directions set by the State Bank to allocate ON APPROPRIATE CUSTOMER SEGMENTS,
capital and provide financial services. What sets
Techcombank apart from it peers is that we select EFFECTIVELY MANAGE RISK AND EXTEND
our customers based on a thorough review of THE TECHCOMBANK VALUES TO OUR
their backgrounds and stringent risk assessment
processes, to ensure that we can successfully CUSTOMERS.
accompany the development and growth of their
companies throughout the business cycle.
TECHCOMBANK HAS A CLEAR STRATEGY. FOR US,
THE MOST IMPORTANT THING IS TO BE CONSISTENT
WITH THE GOALS WE HAVE SET, PURSUING THEM
TO THE END.
In 2017, the Vietnamese Government
and the State Bank of Vietnam (SBV)
made important policy decisions
which decided the direction of
Vietnam’s economic development
– they directed the credit flow
towards sectors with high growth
potential, such as the private sector,
start-ups, manufacturing, import-
export, and hi-tech agriculture.
Generally speaking, this policy has
been successfully implemented
and banks thus made a significant
contribution to Vietnam’s economy
last year.
ENABLING FINANCIAL SUCCESS & SECURITY 9
 THE STRENGTH TO SUCCEED
THE CEO’S NARRATIVE (continued)
Understanding
our customers
I
n the last five years, and particularly in 2017,
one of Techcombank’s greatest achievements
. was to define a clear, customer-centric
strategy. Techcombank has always held the view
that when its customers succeed, Techcombank
and its employees succeed. It is this success
that allows Techcombank to achieve its higher
objectives of providing support for the important
financial decisions members of the Vietnamese
public will make during their lifetimes.
To achieve this, requires that each Techcomer be
guided by a clear and consistent goal: not only to
understand Techcombank’s customers, but also
OVER
5,000,000
RETAIL CUSTOMERS
114,000
OVER
CORPORATE CUSTOMERS
OF THESE ALMOST 1,000 ARE
LARGE ENTERPRISES
10 ANNUAL REPORT 2017
to understand our customers' customers; that is to understand the entire
ecosystem. This is how we choose the customers who ultimately bring value
to the end-users.
For our customers, Techcombank does not simply provide financing, but
rather delivers comprehensive solutions.
Over the past year, we have many examples that demonstrate how we were
able to succeed in realizing this goal, and the proof lies within our numbers
– Techcombank service users increased significantly in 2017 to over 5 million
retail customers and over 114,000 corporate customers, of which almost 1,000
are large enterprises.
In addition, Techcombank saw a major increase in the number of transactions
it processed. The current account balance of large corporate clients increased
by an average annual rate of 20% over the past 3 years. Many customers have
also moved 70-80% of their banking transactions to Techcombank. Moreover,
our SME and Upper SME clients conducted about 63,000 transactions, making
up approximately 15% of the total market transactions in 2017.
TECHCOMBANK IS PROUD OF ITS STRONG
PERFORMANCE. AS FOR OUR FINANCIAL
RESULTS, WHILE NOT THE LARGEST IN SCALE,
OUR OUTSTANDING FINANCIAL INDICATORS
ARE FAR ABOVE SECTOR AVERAGES.
ENABLING FINANCIAL SUCCESS & SECURITY 11
THE STRENGTH TO SUCCEED
THE CEO’S NARRATIVE (continued)
Successful transformation
IN JULY 2017, TECHCOMBANK ENTERED THE
SECOND PHASE OF ITS TRANSFORMATION
I
PROGRAM. OVER THE PREVIOUS TWO
YEARS, PHASE 1 OF OUR TRANSFORMATION
PROGRAM ACHIEVED MANY
MPORTANT
ACCOMPLISHMENTS
Firstly, all employees have taken on board and executed
Techcombank’s customer-centric strategy. Secondly, we
have established a strong culture, whereby Techcomers
are guided by the same goals, the same code of
conduct, and the same core values. Thirdly, we have
ensured that all Techcomers have built solid bases of
technical knowledge, and that all senior executives
have undertaken new means of doing business and are
making decisions based on clear analysis.
12 ANNUAL REPORT 2017
A number of innovative ideas have been implemented
to improve the Techcombank customer experience.
This is already apparent in our results. In 2017, our profit
before tax was double that of the previous year, the
number of non-performing loans reduced noticeably,
and the number of transactions and our share of
customers increased considerably.
Another outcome of the 2017 Transformation Program that
deserves mentioning is our improved internal coordination
– not just between individuals in teams, but between units
across the entire organization. Techcombank understands
that customers are only satisfied when their demands
are met in the fastest, most convenient way. This requires
cooperation across departments, branches and the head
office. In 2017, Techcombank set up more than ten working
groups with representatives from different departments to
deliver optimal solutions for our customers.
One challenge was to change pre-existing mindsets.
The Bank achieved this through specially designed
communication initiatives, group discussions, training and
talks which took place at all levels from headquarters to
branches and from newly recruited empoyees to those who
have been with the Bank long-term. All this has improved
awareness across the Bank on how we move together to
create the best value for our customers. will need to show perseverance and consistency.
We conducted two surveys in 2017 – one among 1,000 of
our senior employees and the other among all Techcomers.
The results of the survey, which had a 97% response rate,
were highly consistent and we are pleased to see that
Techcomers displayed a strong sense of unity and harmony.
Economic integration is
not only an opportunity
I
n 2017, Vietnam's economy delivered a strong performance - a
stable macroeconomic base, GDP growth of 6.81% which was
higher than expected, most businesses achieved good results,
Phase 2 of our Transformation Program, which the exchange rate was stable and interest rates were favorable.
rolls out in 2018, we see us continue to solidify
the platforms that serve our customers. This year
Techcombank will also make large investments in
technology, data, operations and risk management. THESE FACTORS CREATE A SUPPORTIVE
FOUNDATION FOR A SUCCESSFUL 2018
In addition, we will continue to strengthen our
customer service team through recruitment, as FOR VIETNAM’S BANKING SECTOR, AND
well as theoretical and on-the-job training. Our SPECIFICALLY FOR TECHCOMBANK.
goal is to transform each relationship manager
into an excellent personal finance consultant
(for retail customers) and an excellent CFO (for
In 2018, and into the future, the Vietnamese economy will see a
corporate clients).
stronger and more substantive integration. Techcombank, like
other Vietnamese banks, will find itself part of a larger playing
At the same time, we plan to continue to enhance
field, facing bigger challenges. Past success is a prerequisite, but, if
our processes to connect better with the businesses
need be, we must “forget” what has already been accomplished in
of our customers, rather than merely focus on fine-
order to focus fully on the next phase of our development, in a new
tuning our internal processes.
context and with our new aspirations.
A big ship takes more time to maneuver and a
skilled crew to steer it. As a large organization
aiming to make a breakthrough, we want to nurture
the unifying strength of our workforce, from the
highest level down to each frontline employee. The
challenges that lie ahead for Techcombank are still
large, and in order to succeed, every Techcomer
Through doing this, Techcombank will rise,
overcome challenges and reach its destination.
ENABLING FINANCIAL SUCCESS & SECURITY 13
 management
EXCELLENCE
GOOD COPORATE GOVERNANCE
IS REGARDED AS FUNDAMENTAL
TO THE CREATION, PROTECTION
AND ENHANCEMENT OF THE
BANK’S VALUE AS WELL AS THE
SUSTAINABLE DEVELOPMENT OF
THESE VALUES.

14 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 15

MANAGEMENT EXCELLENCE

CORPORATE GOVERNANCE

TECHCOMBANK CHAIRMAN’S STATEMENT TECHCOMBANK CEO’S STATEMENT

ON CORPORATE GOVERNANCE ON CORPORATE GOVERNANCE

AT THE GOVERNANCE LEVEL, WE ARE COMMITTED

TO ENSURING PRUDENT MANAGEMENT AND
ACCOUNTABILITY WITHIN THE BANK, AND
FAIRNESS TO OUR CUSTOMERS, EMPLOYEES AT MANAGEMENT LEVEL, WE ARE
AND SHAREHOLDERS. DURING OUR COMMITTED TO ENSURING THE GROWTH AND
TRANSFORMATIONAL PERIODS, WE REMAIN SUSTAINABILITY OF THE ORGANIZATION.
COMMITTED TO SAFEGUARDING BUSINESS
CONTINUITY AND THE HIGHEST LEVELS OF
PERFORMANCE.

Implemented in 2010, Techcombank’s
corporate governance structure was
designed with support from leading
consulting firm, McKinsey & Company,
and HSBC. This robust structure has
led the Bank through one of the most
challenging chapters in the history of
the Vietnamese economy and the last six
years of evolution in the banking sector.
Since 2017, in anticipation of the draft
amendments to the Law on Credit
Institutions - which became effective
on 15/01/2018 - and to ensure we
adopt the highest level of international
best practice, Techcombank has
identified Corporate Governance as
one of its Key Strategic Initiatives to be
implemented, reviewed and refreshed
in response to the challenges posed
by rapid changes in the national and
regional economic conditions.
A transparent and effective corporate
governance structure, that defines a
clear separation between governance
and management layers, is a must
to instill confidence among investors
and relevant stakeholders, and
for Techcombank to become a
highly-valued organization. In 2018,
Techcombank will continue to protect
shareholders’ interests, to enhance
effectiveness amongst its Board of
Directors and Board Committees, and
to implement the new governance
structure. Other initiatives will also be
deployed with the aim to strengthen the
Bank’s governance structure.
In 2017, we redesigned and
redeveloped our Corporate
Governance model to comply with
the current laws in Vietnam and
regulations of the governing bodies
for credit institutions that are public
companies. We also reviewed leading
Corporate Governance practices
around the world and ensured
compliance with the followings :
1. Laws on Credit Institutions in Vietnam;
2. Enterprise Laws in Vietnam;
3. Listing regulations in Vietnam;
4. Corporate governance principles for
G20/OECD; and
5. Corporate governance principles for
banks by the Basel Committee on
Banking Supervision.
In order to meet the requirements
for the expected growth set out in
Techcombank’s strategy and vision,
our refreshed Corporate Governance
structure aims to improve our status
from a leading local bank to the one
that competes in the regional market.
In 2018, we will continue to implement
our new Corporate Governance
model, which will see the Board of
Management and its Committees
further improve the Bank's efficiency,
ensure the delivery of solid business
results, as well as optimize the Bank’s
allocation of resources.

16 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 17

MANAGEMENT EXCELLENCE
CORPORATE GOVERNANCE (continued)
TARGETED CORPORATE
GOVERNANCE MODEL FROM 2018
Techcombank’s targeted Corporate Governance
model will allow for comprehensive and transparent
separation between:
MANAGEMENT
GOVERNANCE
AND DIRECTION
LEVEL
The Board of Directors
and Board Committees
which function to ensure Management Committees
the existence of the which function to ensure
Bank, and the fairness the sustainability and
to our customers, development of the Bank.
employees and
shareholders.
18 ANNUAL REPORT 2017
The main functions at the Board level are:
»» bank governance, oversight of strategies of the Bank’s management activities;
BOARD »» appointing the Chief Executive Officer, Board of Management personnel and other
senior management positions;
LEVEL
»» holding the Annual General Shareholder’s Meeting; managing the charter capital
and assets of the Bank; and
»» managing the disclosure and transparency of the information.
GENERAL ASSEMBLY
BOARD AUDIT COMMITTEE BOARD NOMINATION COMMITTEE
OF SHAREHOLDERS The Board Nomination Committee’s main responsibilities
The Board Audit Committee’s main areas of
supervision include: include:
»» financial statements, disclosure of financial »» establishing criteria and policies in regard to the selection,
information; appointment, dismissal of members of the Board of
»» maintaining the quality, suitability and scope of Directors, CEO and members of the Board of Management;
work for External Audit; »» ensuring the independence, diversity and experience of
SUPERVISORY BOARD »» ensuring the adequacy and effectiveness of the Board of Directors;
internal control systems and the internal audit »» overseeing selection, dismissal, and succession plans for
function; and members of Board of Directors, Commitees under the
»» reviewing and implementing policies for Board, CEO and Board of Management; and
accounting, external audit and internal audit »» performance evaluation and producing necessary
within the Bank. education-development plans for members of the Board
and Board of Management.
AND BOARD OF DIRECTORS
Internal Audit BOARD RISK MANAGEMENT
EXECUTIVE BOARD REMUNERATION COMMITTEE
COMMITTEE
LEVEL
The Board Risk Management committee is responsible for
The Board Remuneration committee’s main areas of
establishing, monitoring and approving these key functions:
oversight include:
MANAGEMENT »» the Bank’s Risk Management Framework;
»» establishing remuneration policies bankwide;
»» risk management practices and policies including
LEVEL Credit risk, Operational risk, Liquidity risk and
»» establishing and maintaining the remuneration
mechanism which aligns the band/position and
Market risk;
performance of Directors, members of Board of
»» risk appetite, the risk monitoring model and
Management and other key positions;
parameters;
CHIEF EXECUTIVE OFFICER/ »» directing and approving the human capital
The Board of »» reviewing the Bank’s risk profile;
management strategy for the Bank; and
Management and BOARD OF MANAGEMENT »» an effective reporting system and early risk warning
»» directing and approving talent attraction/retention,
system; and
»» proposing the selection and/or dismissal of
development - education policies.
Management level operates the CRO.
at the direction of the Board
of Directors and other Board BOARD CREDIT COMMITTEE * BOARD STRATEGY COMMITTEE
Committees. The Management
Committees are established COMMITTEES – MANAGEMENT LEVEL
by the Board of Directors and The Board Strategty Committee’s main areas of
The Board Credit Committee’s main areas of
are headed by members of oversight include: oversight include:
the Board of Management. »» the credit quality of the Bank; »» assisting the Board in directing the Bank’s strategy as
The Management Committees »» credit limit and approval process of credit well as monitoring the execution of the approved plans;
Subsidiaries »» producing recommendations and proposals in regard to
assist the CEO and the approval units; and
»» monitoring and approving special credit matters the Bank’s annual business plan;
Board of Management in
(the Board’s stakeholders, key clients, special »» monitoring the Board of Management’s proposed
operating the Bank and to medium- and long-term objectives; and
execute the respective Board industry).
»» monitoring the effectiveness of the Bank’s financial and
Committee’s directions. These Business Divisions operational activities.
committees help the Bank ensure
smooth operations, increase
management effectiveness, and To be implemented.
allow management to implement Recently Techcombank has been implementing the necessary initiatives to transform the Corporate Governance model above into practicality
Supporting Divisions applicable for the Bank’s governance operation.
relevant policies and strategies.
(*) The Board Credit Committee is established with the purpose of enhancing the credit function of the Bank in medium-term. In long-term,
Board Credit Committee will be integrated as a function of Board Risk Management Committee.
ENABLING FINANCIAL SUCCESS & SECURITY 19
 MANAGEMENT EXCELLENCE

OUR BOARD OF DIRECTORS

Mr. HO HUNG ANH Mr. DO TUAN ANH

Vice Chairman cum Deputy CEO
Chairman
Mr. Do Tuan Anh has been Vice Chairman of the Board
Mr. Ho Hung Anh has been the Chairman of of Directors and Deputy CEO of Techcombank since
Techcombank’s Board of Directors since May June 2015 and served as a member of Techcombank’s
2008. Prior to his appointment as Chairman, Board of Directors since December 2012. Prior to
Mr. Ho Hung Anh served as a member of his appointment to the Board of Directors, Mr. Do
Techcombank’s Board of Directors from 2004. His Tuan Anh held various management positions
professional career also includes several years of at the State Bank of Vietnam and Techcombank,
executive-level experience at large organizations, including Deputy Director of the General International
including Masan. Cooperation Department and Director of the Banking
Supervision Agency, Senior Assistant to the Board of
Directors and Head of the Strategy and Corporate
Mr. Ho Hung Anh holds a degree in electrical Development Division. He holds a Master’s degree in
engineering from the Kiev Polytechnic Institute Wealth Management from Singapore Management
in the Ukraine. University (Singapore).

Mr. NGUYEN DANG QUANG Mr. LEE BOON HUAT

1 Independent Directors
5 Non-executive Directors
1 Executive Directors
AGE GROUP
OF OUR DIRECTORS
28%
29%
Under 50 years old 28%
51 - 60 years old 43%
43%
61 - 70 years old 29%
TENURE
14% OF OUR DIRECTORS
Under 5 years 14%
29%
57%
5 - 7 years 29%
Above 7 years 57%
The First Vice Chairman
Mr. Nguyen Dang Quang has served as First Vice
Chairman of Techcombank’s Board of Directors
since April 2016. Previously, he was a member of
Techcombank’s Board of Directors from May 2014
to March 2016 and was First Vice Chairman of the
Bank from May 2008 to April 2014. Before becoming
a Director of Techcombank, Mr. Nguyen Dang Quang
had more than 20 years’ of executive experience,
including membership on the Board of Directors
of Masan and key management positions at
Techcombank since 1995.
Mr. Nguyen Dang Quang holds a PhD from the
National Academy of Sciences of Belarus and an MBA
from the Plekhanov Russian University of Economics
Mr. NGUYEN THIEU QUANG
Vice Chairman
Mr. Nguyen Thieu Quang has been a member
of Techcombank’s Board of Directors since 1999
and became Vice Chairman of Techcombank’s
Board of Directors in May 2008. Mr. Nguyen
Thieu Quang has significant executive
experience including various key positions at
Masan, Vinaconex, and Senco.
Mr. Nguyen Thieu Quang holds a degree in civil
engineering from Donetsk Polytechnic Institute
in the Ukraine (now Donetsk National Technical
University).
Board Member
Mr. Lee Boon Huat has been a member of
Techcombank’s Board of Directors since May 2014,
prior to that, he was an Independent Director of
the Board of Directors from December 2012 to
April 2014. Before joining Techcombank, Mr. Lee
Boon Huat worked with several international
organizations, including the Monetary Authority
of Singapore, HSBC, Canadian Imperial Bank
of Commerce, Chemical Bank, and Standard
Chartered Bank.
Mr. Lee Boon Huat holds a Bachelor’s degree in
business accounting from the Western Australian
Institute of Technology (now Curtin University).
Mr. NGUYEN DOAN HUNG
Mr. NGUYEN CANH SON Independent Board Member
Vice Chairman, Non Executive Director
Mr. Nguyen Doan Hung has been an Independent Director
Mr. Nguyen Canh Son has served on the Board of the Board of Directors of Techcombank since May 2014.
of Directors since May 2008 and has been the He has extensive management experience with the State
Vice Chairman of Techcombank’s Board of Bank of Vietnam, having held positions including Head of
Directors since April 2009. Mr. Nguyen Canh the Capital Market Research and Development Department,
Son has more than 20 years of experience Head of the Governor’s Office, and Head of the Foreign
including positions as the Chairman at Exchange Management Department. He also served as
Eurowindow Holding and Board member at the Deputy Executive Director of the World Bank and Vice
for T&M Invest Vietnam. He holds a degree in Chairman of the State Securities Commission of Vietnam.
civil engineering from the Moscow Institute of
Civil Engineering in Russia (now Moscow State Mr. Nguyen Doan Hung holds a Bachelor’s degree in English
University of Civil Engineering). language from Hanoi University (Vietnam) and a Master’s
degree in financial management from the University of
London (England).

20 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 21

MANAGEMENT EXCELLENCE

OUR BOARD OF DIRECTORS (continued)

EXPERTISE AND EXPERIENCE

An independent director has to meet the requirements and conditions below:
»» does not currently work for the credit institution or its subsidiaries and hasn't worked for the OF BOARD OF DIRECTORS
credit institution or its subsidiaries in the three preceding years;
»» does not enjoy a salary or regular pay from the credit institution other than allowances for
members of the Board of Directors under regulations;
»» has no spouse, parent, child, sibling, or spouse thereof, who is a major shareholder, manager or
member of the Supervisory Board of the credit institution or its subsidiaries;
Regulatory, Law & Compliance
INDEPENDENT »» does not directly or indirectly own or represent ownership of 1% or more of the charter capital
DIRECTOR (1) or voting share capital of the credit institution; together with his/her related persons not owning
5% or more of the charter capital or voting share capital of the credit institution; and
Community Affairs, Governmental Relations,
»» is not a manager or member of the Supervisory Board of the credit institution nor has been at
Social Responsibility and Public Policies
any time in the five preceding years.

The Independent Director also could be considered an Independent Non-Executive Director

according to international practices. EXPERTISE Operation & Technology

Human Capital and Banking

»» The Non-Executive Director is a member of the Board of Directors who is not a director (general Management
director) or deputy director (general deputy director), chief accountant, and executive of other
NON EXECUTIVE enterprises as specified in the company's charter.
DIRECTOR (2) Risk Management
The Non-Executive Director also could be considered a Non-Independent Non-Executive Director
(“NINED”) according to international practices.

Banking and Financial Services

EXPERIENCE
Management or Other
»» A member of the Board of Directors and holds a position in the Board of Management of
EXECUTIVE Leadership Experience
the organization.
DIRECTOR (3)
»» The Executive Director cannot be an Independent Board member.

Remark: Number of Directors 0 1 2 3 4 5 6 7

Point (1) and (2) were made pursuant to the Law on Credit Institution no. 47/2010/QH12 and Decree no. 71/2017/ND-CP
guiding on the corporate governance of public companies.
Point (3) was referred to leading international practices such as Guidelines on Corporate governance principles for
banks by Basel Committee on Banking Supervision (BCBS 328) and The Vietnamese Corporate Governance Manual by
the International Finance Corporation (IFC).

22 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 23

MANAGEMENT EXCELLENCE
OUR SUPERVISORY BOARD
Mr. HOANG HUY TRUNG
Head of Supervisory Board
cum Member in Charge
Mr. Hoang Huy Trung has many
years of experience in the
banking industry and has held
various management positions
at the State Bank of Vietnam and
Techcombank. He has been the
Head and a Member in Charge of
the Techcombank Supervisory
Board since December 2012.
Mr. Hoang Huy Trung graduated
with a Master’s degree in
Economics, specializing in
banking from the National
Economics University in Hanoi
and a Bachelor in Economics,
majoring in banking-finance from
the Academy of Finance, Vietnam.
24 ANNUAL REPORT 2017
Ms. NGUYEN THU HIEN
Member in Charge
Ms. Nguyen Thu Hien has been
active in Techcombank’s accounting
and control activities since 1999.
She served as Head of Supervisory
Board cum Member in charge from
April 2010 to December 2012. She
has been a Member in Charge of the
Techcombank Supervisory Board
since December 2012.
Ms. Nguyen Thu Hien holds a
Bachelor’s degree in Credit Finance
in Russia.
Ms. BUI THI HONG MAI
Member
Ms Bui Thi Hong Mai has many
years of experience in accounting
and finance. From April 2010
to December 2012, she was
a Member in charge of the
Techcombank Supervisory Board.
She has been a member of the
Techcombank Supervisory Board
since December 2012.
Ms. Bui Thi Hong Mai holds a
Bachelor’s degree in Accounting
and Finance
MANAGEMENT EXCELLENCE
OUR BOARD OF MANAGEMENT
Mr. MAG REC SOC OEC
ROMAUCH HANNES
Member
Mr. Mag Rec Soc Oec Romauch Mr. NGUYEN LE QUOC ANH Mr. DO TUAN ANH Mr. LE BA DUNG
Chief Executive Officer Vice Chairman of the Board of Directors Chief Risk Officer
Hannes has many years of
cum Deputy CEO
experience in banking finance,
and has held many important
management positions such as
Mr. Nguyen Le Quoc Anh was appointed Mr. Do Tuan Anh has served as a member of the Mr. Le Ba Dung was appointed Chief Risk Officer
in the Corporate Banking Unit
Chief Executive Director of Techcombank in Board of Directors since December 2012 and in September 2015. He has more than 20 years
at Carinthia State Bank; Risk
September 2016. Prior to this, he was Head of became Vice Chairman of the Board of Directors of experience in finance and banking risk
Administration Unit at Carinthia
Strategy and Corporate Development from and Deputy CEO of Techcombank in June 2015. He management. Prior to joining Techcombank,
and Styria Bank; Risk analysis/
May 2015 and Deputy Chief Executive Officer has 22 years of experience in banking. Previously, he served in senior executive risk management
management/consulting at he was Unit Deputy Head of the International
from January 2016. He has more than 25 years positions at Asia Commercial Bank (Vietnam),
Carinthia and Styria Bank;
of experience, including a variety of senior Cooperation Department and Department Head Standard Chartered Bank (Singapore), and GE
Marketing Director at Vietnam
management positions in banking, financial of the Banking Supervision Agency at the State Capital Asia-Pacific (Hong Kong, South Korea,
T&M limited company; and
services, telecommunications and advisory Bank of Vietnam, Senior Assistant to the Board of and China).
Deputy Director of CB Richard Directors and Head of the Strategy and Corporate
firms including Wells Fargo, Fortress Investment
Ellis Hanoi – Asset Management. Development Division.
Group, T-Mobile, and McKinsey & Company. He holds a Master’s degree in International
He has been a member of the
Affairs from Georgetown (USA) and a Master’s
Techcombank Supervisory Board He holds a Master’s degree in Wealth
He holds a Ph.D. in Nuclear Engineering degree in Electrical Engineering from the State
since December 2012. Management from Singapore Management
from Purdue University (USA) and a Master’s University of New York (USA).
degree in Econometrics from California State University (Singapore).
Mr. Mag Rec Soc Oec Romauch
University (USA).
Hannes holds a Master’s degree
in Business Administration,
majoring in Finance, Banking
and Marketing from Klagenfurt
University, Austria.
* Information on the Board of Management was updated as at 01/03/2018. ENABLING FINANCIAL SUCCESS & SECURITY 25
MANAGEMENT EXCELLENCE
OUR BOARD OF MANAGEMENT (continued)
Mr. PHUNG QUANG HUNG
Head of Sales and Distribution
Mr. Phung Quang Hung was appointed Head of
the Sales and Distribution Division in November
2014. Prior to this, he was Techcombank’s
Chief Technology and Operations Officer from
September 2010. He has more than 20 years of
management experience at international banks,
including previous positions as Head of IT and
Operations at ABN AMRO (Vietnam) and Business
Partner at National Australia Bank (London).
He holds a Master’s degree in International
Business from Washington State University (USA).
26 ANNUAL REPORT 2017
Ms. TRAN THI MINH LAN
Head of Strategy and Corporate Development
Ms. Tran Thi Minh Lan was appointed Head of
Strategy and Corporate Development in August
2017. Before this, she was Techcombank’s Head
of Transformation Program and the Deputy
Head of Strategy and Corporate Development,
from December 2015, responsible for building
and implementing the Bank’s overall strategy.
She has more than 15 years of experience in
banking strategy and risk management. She
has held several senior positions such as the
Deputy Head of the Risk Management Division
at Techcombank.
Ms. Tran Thi Minh Lan holds a Master’s degree
in Financial and Accounting Management
from the University of Berlin (Germany). She
participated in the Executive Development
Program at the Wharton School, the University
of Pennsylvania (USA).
Mr. TRINH BANG
Chief Financial Officer
Mr. Trinh Bang was appointed Chief Financial
Officer in January 2018. He has more than 23
years of global banking and finance experience
– including 18 years with Morgan Stanley in New
York, Singapore, and most recently as Senior
Advisor and Managing Director/Country Head
for Vietnam and the Philippines.
He holds a Bachelor’s degree in Systems
Engineering from the University of Virginia (USA).
Mr. CHESTER GORSKI
Chief Technology Operation Officer
Mr. Chester Gorski was appointed Chief
Technology Operation Officer in February
2016. He has more than 25 years of
experience, including senior leadership roles
in banking, insurance and financial services
at firms including Wells Fargo, Wachovia,
Aon, as well as advisory firms including PwC
and McKinsey & Company.
He holds an MBA from the University of
Chicago (USA).
* Information on the Board of Management was updated as at 01/03/2018.
Ms. NGUYEN THI VAN ANH
Head of Marketing
Ms. Nguyen Thi Van Anh joined Techcombank
in November 2014 and was appointed
Techcombank’s Head of Marketing in June
2016. Prior to joining Techcombank, she had
more than 20 years of experience as Head of
Brand and Head of Marketing at major national
and multi-national companies including
Vingroup, British Petroleum, and British
American Tobacco (BAT).
She holds an MBA from University of
Westminster (UK) and a Master’s degree
in Marketing from Swinburne University of
Technology (Australia).
Mr. PHAN THANH SON
Transformation Director of
Transaction Banking
Mr. Phan Thanh Son was appointed
Transformation Director of Transaction Banking
in July 2017. Prior to this, he was Head of the
Treasury and Financial Markets Division from
January 2011. He has more than 20 years
of experience in local financial markets and
played an important role in developing local
fixed income markets. He was the Deputy
Chief Executive Officer at TienPhong Bank.
He has held various positions in the Global
Markets Divisions at Standard Chartered Bank
(Vietnam), Citibank (Vietnam), and Citigroup
Global Markets Ltd. (Hong Kong).
He holds a Master’s degree in Economics from the
National Economics University, Hanoi (Vietnam).
ENABLING FINANCIAL SUCCESS & SECURITY 27
MANAGEMENT EXCELLENCE
OUR BOARD OF MANAGEMENT (continued)
Mr. CHUNG BA PHUONG
Head of Insurance
Mr. Chung Ba Phuong was appointed Head of
Insurance in August 2017. He has more than
24 years of experience in developing and
growing insurance businesses for renowned
insurance groups such as Generali (Europe),
Manulife (Canada), American International
Group (USA) and consultant Towers Perrin
(Willis Towers Watson). Directly prior to
joining TCB he led Generali Hong Kong as the
CEO and General Manager.
He holds a Bachelor of Commerce (Honors)
from the University of Manitoba (Canada),
and is a member of the Fellow Society of
Actuaries (USA).
28 ANNUAL REPORT 2017
Ms. LE THI BICH PHUONG
Head of Personal Financial Services
Ms. Le Thi Bich Phuong was appointed
Techcombank’s Head of Personal Financial
Services in June 2016. She has more than
15 years of experience in banking, holding
executive sales and distribution positions
including Head of Area, Head of Region, and
Head of S&D South.
She holds a Bachelor’s degree in Economics
and International Business from the Hanoi
University of Social and Human Sciences
(Vietnam).
Mr. NGUYEN XUAN MINH
Head of Investment Banking
Mr. Nguyen Xuan Minh was appointed Head
of Investment Banking Division – Chairman of
the Board of Directors of Techcom Securities
Company Limited in October 2013. He has
more than 20 years of experience in fund
management and investment banking,
including in previous positions such as CEO
of Vietnam Asset Management Ltd. (VAM) and
Senior Vice President of Franklin Templeton
Investments under Mark Mobius in Singapore.
He holds a Master’s degree in Applied Finance &
Investment from Securities Institute of Australia
(FINSIA), and an M.S. in Science, Oil & Gas –
Mechanical Engineering from Gubkin Russian
State University of Oil and Gas (Russia). He is a
CFA Charterholder.
Mr. PHAM QUANG THANG
Deputy Chief Executive Officer cum Head of
Compliance and Legal
Mr. Pham Quang Thang was appointed Deputy
Chief Executive Officer and Head of Compliance
and Legal in January 2014. He has more than 20
years of experience in banking, including several
senior positions such as Chief Accountant, Head
of Treasury and Transactions Management
Center, Deputy Chief Executive Officer in charge
of Finance, Planning and Strategy, Head of the
Commercial Banking Division, and Head of the
Credit Approval Division.
He holds a Master’s degree from Swinburne
Technology University (Australia).
* Information on the Board of Management was updated as at 01/03/2018.
Mr. VISHAL SHAH
Head of Business Banking
Mr. Vishal Shah was appointed Head of Business
Banking in March 2018. He has more than 20
years of experience in leading companies with
strong expertise in commercial banking, retail
banking and financial advisory services. He
has held key leadership positions at Standard
Chartered Bank in Singapore, India, and the
UAE. He has also held advisory roles at Ernst &
Young and KPMG.
Mr. Vishal Shah is a Qualified Chartered
Accountant (ACA) and Cost and Works Accountant
(Grad CWA). He holds a Bachelor’s degree in
Commerce from HR College of Commerce and
Economics, Mumbai University (India).
Mr. ASHISH SHARMA
Head of the Transformation Office
Mr. Ashish Sharma was appointed Head of
Transformation Office in June 2017. He has 20
years of experience in establishing and running
business banking platforms and banking
strategy in leadership roles. He has held Director
and Executive Director roles at large corporate
and financial institutions such as Standard
Chartered Bank, McKinsey & Company, The
Goldman Sachs Group, and INC, among others.
He holds an MBA in Finance from New York
University (USA) and a Master’s degree in
Computer Sciences from MIT (USA).
ENABLING FINANCIAL SUCCESS & SECURITY 29
MANAGEMENT EXCELLENCE
OUR BOARD OF MANAGEMENT (continued)
Ms. PHAM VU MINH DAN (ALEXIS)
Chief Human Resource Officer
Ms. Pham Vu Minh Dan (Alexis) was appointed
Head of the Human Resources Division at
Techcombank in January 2015. Prior to this,
she gained more than 14 years of experience
in human resource management at British
American Tobacco Group (BAT). During her
tenure with BAT, she was appointed to various
senior HR roles in Vietnam,Malaysia, the United
Kingdom and the Asia-Pacific region. Her last
role with BAT was Regional Head of Talent for
the Asia-Pacific region.
She holds a Bachelor’s degree in Business
Management from Nanyang Technological
University (Singapore).
30 ANNUAL REPORT 2017
Mr. VU MINH TRUONG
Head of Treasury and Financial Markets
Mr. Vu Minh Truong was appointed Head of
Treasury and Financial Markets in January
2017. He has more than 20 years of experience,
including senior management positions in
major international banks such as ABN AMRO,
HSBC, ANZ and Standard Chartered. In more
recent years, he worked in VPBank and TPBank
as Deputy CEO.
He holds a Bachelor’s degree in Business
Administration from the Technical University of
Berlin (Germany).
Ms. NGUYEN HUONG GIANG
Head of Transaction Banking
Ms. Nguyen Huong Giang joined Techcombank
as Head of Transaction Banking in July 2017. She
has 25 years of experience working at leading
global banks including ANZ and Citibank. She
has held senior roles such as Head of Client
Delivery & Implementation, Head of Sales and
Product Development of the Transaction Banking
Division, and Director - ASEAN Channel Product.
She holds a Bachelor’s degree in Linguistic
Education from National University, Hanoi
(Vietnam).
Mr. CHAN JONATHAN CHUNG MING
Transformation Director of Personal
Financial Services
Mr. Jonathan Chan joined Techcombank as
Transformation Director of Personal Financial
Services in December 2017. He has more than
30 years of experience in finance and corporate
banking in both Asia and the USA. His most
recent experience includes Managing Director
positions at Fu An Investments, QBE Mortgage
Insurance, and PMI Mortgage Insurance (Hong
Kong). He has also held key risk and finance
positions at GE Commercial Finance and GE
Capital.
He holds a Bachelor’s degree in Economics from
the University of California, Los Angeles (USA).
* Information on the Board of Management was updated as at 01/03/2018.
Ms. PHAN THI THANH BINH
Transformation Director of
Wholesale Banking
Ms. Phan Thi Thanh Binh was appointed
Transformation Director of Wholesale Banking
at Techcombank in July 2017. She has more
than 20 years of experience with ANZ in various
positions including Head of Markets Vietnam,
acting CEO of ANZ (Vietnam), Member of the
Board of Directors at ANZ (Vietnam, Cambodia,
and Laos) and Chairwoman of ANZ (Laos).
She holds a Master’s degree from University
Libre de Bruxelle (Belgium).
Ms. PHAN THI HAI YEN
Deputy Head of Wholesale Banking
Ms. Phan Thi Hai Yen was appointed Deputy
Head of Wholesale Banking in March 2017. She
has more than 20 years of experience in the
banking industry, holding various executive
positions at Techcombank, including Head of
Product development, Head of VVIP North.
She holds a degree from the University of
Language and International studies, Vietnam
National University (Vietnam).
ENABLING FINANCIAL SUCCESS & SECURITY 31
MANAGEMENT EXCELLENCE

Effective
business model

EACH TECHCOMER NOW HAS A SPECIFIC

FOCUS: TO INCREASE THE VALUE THEY
CAN BRING TO THEIR CUSTOMERS, TO
UNDERSTAND THEIR CUSTOMERS’ NEEDS
AND HOW THEY CAN HELP THEM MEET THOSE
NEEDS AND ACHIEVE THEIR GOALS.

FROM 2016 TO 2020

7
TECHCOMBANK SET ITSELF
AN OBJECTIVE TO SHAPE ITS
BUSINESS MODEL BASED ON

I
n 2017, while many banks pushed for growth in size, Tech-
combank focused on the quality of its growth. The Bank
prioritised developing a sustainable and effective business
model and optimized its return on investment, while using state-
of-the-art technological solutions to provide customers with out-
standing service and experience.
In order to fully execute its business model, Techcombank
has perfected the ability to understand customers’ needs and
develop solutions, through an optimal sales structure and
internal organization. This also means that Techcombank is able
to offer customers not just individual products but packages of
comprehensive solutions.
Techcombank will continue, through its Transformation Program,
to further enhance its understanding of customers’ needs and build
capacity in technology, human resources, and risk management.
These inititives are designed to position Techcombank as the
leading bank in Vietnam by 2020, and one in which customers can
put their trust.

KEY COMPONENTS. OF WHICH, Thanks to the remarkable success of Phase 1 of the Transforma- Armed with a better understanding of the customers’ needs,
CUSTOMERS ARE THE MOST tion Program, each Techcomer is now focused on increasing the Techcombank aims to further strengthen its risk management
IMPORTANT FOCUS, ALONG value they are able to deliver to customers. They understand their capabilities, to help customers control risk and direct their business
WITH SIX OTHER CORE customers’ unique needs and work towards meeting those needs to areas that have strong growth potential. This level of shared DATA PEOPLE RISK MANAGEMENT
COMPETENCIES ALL DESIGNED – overcoming challenges and celebrating success along the way. success and client satisfaction will in turn increase the attractiveness EXCELLENCE EXCELLENCE EXCELLENCE
TO HELP THE BANK MEET and thus the use of Techcombank’s products and services.
CUSTOMERS’ FINANCIAL
NEEDS IN THE MOST
COMPREHENSIVE MANNER.

32 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 33

MANAGEMENT EXCELLENCE

STANDARD OPERATION

The Bank strives to ensure that customers

can entrust the Bank with their finances,
and with absolute peace of mind. Utmost
attention is given to compliance. Business
units continuously develop and deploy
management and control tools and at the
same time, training programs are put in
place to improve employees' awareness,
THE KEY TO CREATING THE
compliance capability and professional TECHCOMERS DEVOTE THEIR EVERY EFFORT TO MEETING
ethics. At Techcombank, customer-
BEST EXPERIENCE FOR CUSTOMERS’ NEEDS, SO THAT ALL FEEDBACK BECOMES AN
centric solutions are designed based on
CUSTOMERS IS A CULTURE OF synergies between the business units, risk OPPORTUNITY FOR IMPROVEMENT AND TO BRING AN EVEN
management, control and compliance, to BETTER EXPERIENCE TO CUSTOMERS.

COMPLIANCE
meet the unique demands of each customer
segment. For example, the Bank has
been helping clients deal with fraudulent
transactions, and providing timely support
AND A COMMITMENT TO QUALITY THAT IS by responding to complaints and inquiries.
UPHELD BY EVERY EMPLOYEE.
The highest priority for every Techcombank
employee is to ensure that customers
benefit and see the value in the Bank.

A
s one of the leaders in the finance and
banking sector in Vietnam, Techcombank
has for many years been guided by the
principles of compliance, responsibility, and high
standards. This is how Techcombank creates trust with
its customers and investors. For the Bank, the key to
providing the best experience for customers is a strong
compliance culture and a commitment to quality that
is upheld by every employee.
Techcombank strives for all employees’,
through their words and actions, to convey
reliability, proactiveness, and readiness
to serve. Head office departments and
frontline business units are always in
communication to constantly improve the
quality of customer service and experience.
To this end, the Bank implements activities
such as refresher training of behavioral
standards, internal competitions, customer
feedback, and on the job training, specifically
designed to maintain a high level of quality
and relevance.

34 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 35

 Comprehensive
SOLUTIONS
TECHCOMBANK IS PROUD TO BE THE BANK OF
CHOICE FOR MANY HIGH-INCOME CUSTOMERS
AND APPRECIATES THAT DEMAND CANNOT
BE MET WITH A SINGLE PRODUCT BUT
RATHER WITH A COMPREHENSIVE PACKAGE
OF SERVICES THAT FULLY ADDRESS THEIR
FINANCIAL NEEDS.

36 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 37

COMPREHENSIVE SOLUTIONS

OPTIMAL CHOICE

A
s Vietnam’s economy grows, the demand for banking
and financial services becomes more sophisticated.
Customers who come to Techcombank, and other
commercial banks, increasingly demand high quality products and
services. Techcombank acknowledges this change in customer
behavior and is intent on meeting these demands and improving
customer experience.

According to market surveys, 69% of retail customers in Vietnam are TECHCOMBANK STRIVES TO CREATE
reluctant to transact with banks for a variety of reasons, including
the perception that banking procedures are cumbersome, SOLUTIONS THAT EQUIP CUSTOMERS ON
transactions are lengthy and bank employees do not have sufficient THEIR JOURNEY OF FINANCIAL GROWTH.
knowledge of their products to advise customers. The only way to
change these perceptions is for banks to provide solutions that
address customers’ financial needs efficiently and effectively.

38 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 39

COMPREHENSIVE SOLUTIONS

OPTIMAL CHOICE (continued)

Remarkable products CREDIT CARDS

and services According to VISA, Techcombank has the

IN 2017, TECHCOMBANK LAUNCHED
A VARIETY OF FINANCIAL
SOLUTIONS TO MEET THE
INCREASING FINANCIAL DEMAND
FROM CUSTOMERS AND THE ONE TOUCH
DIVERSITY OF REQUIREMENTS
FROM CLIENTS IN STRATEGIC
SEGMENTS.
RECEIVE YOUR CAR AFTER
ONE MEETING
‘One Touch’, launched in July 2017,
received the Trademark Registration
Certificate from the Intellectual Property
Department.
Exclusive to Techcombank’s existing
customers, this program offers “pre-
approval” packages based on an
analysis of customers’ behavior and
understanding of their needs. The
procedure only takes one meeting to
finalise. At present, One Touch applies
only to auto loans but will soon be
extended to mortgages and credit cards.
PERSONAL PAYMENT
ACCOUNT: FREE OF CHARGE,
FULL ENJOYMENT
In 2017, Techcombank continued
to offer its personal payment
account service, which comes
with a number of benefits for
customers, one of which is
‘Zero Fee’ – the free-of-charge
transaction service designed
to encourage customers to
use Ebanking. This is a special
feature offered by Techcombank
and only a few other banks in
Vietnam. This is part of an effort
to move transactions online,
reducing pressure on branches
while significantly helping
customers save time and effort.
highest Visa card transaction volume
in Vietnam. This is the direct result of
customers’ appreciation of Techcombank MORTGAGES IN ADDITION TO PROVIDING
products, which come with many practical CUSTOMERS WITH OPTIMAL
incentive packages such as “Smile” and
“Xsmile”, which was introduced in 2017. FINANCIAL SOLUTIONS,
Techcombank’s mortgage product
is another success story. Thanks TECHCOMBANK STRIVES
In addition to Visa and JCB, Techcombank
is preparing to launch the MasterCard
to the association with leading TO CREATE A CULTURAL
real estate developers such as
World credit card, which will be available to SHIFT IN THE DAILY
Vingroup, Thao Dien Masteri
customers making regular large payments.
and Sungroup, Techcombank’s LIVES OF VIETNAMESE
This addition will expand the selection of
mortgages are not only simple
Techcombank card products, enabling the PEOPLE - AWAY FROM
cash loans but can also be bundled
Bank to confidently compete in domestic
with other investment products, THE CASH-BASED SOCIETY
as well as foreign markets.
such as bonds and savings, to
optimize customer benefits. TO A MORE MODERN
At the same time, Techcombank is
BANKING SYSTEM WHERE
restructuring its product offering model
for credit cards and payment cards in an TRANSACTIONS ARE MADE
effort to serve customers in each specific
WITH CARDS. THIS WAY,
segment better.
CUSTOMERS’ INTERESTS
ARE FURTHERED THROUGH
THE EFFECTIVE USE OF
IDLE FUNDS AND THE RISKS
ASSOCIATED WITH HOLDING
LARGE AMOUNTS OF CASH
ARE ELIMINATED.

40 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 41

COMPREHENSIVE SOLUTIONS

OPTIMAL CHOICE (continued)

Absolute security Pioneering insurance products

IN VIETNAM,
TECHCOMBANK HOLDS

AROUND THE
BANKS ARE INCREASINGLY
WORLD,
THE LARGEST
GOING DIGITAL. IN VIETNAM, SHARE OF THE
TECHCOMBANK IS PROUD BANCASSURANCE MARKET.
TO BE A PIONEER IN THIS
FIELD. IN 2017, TECHCOMBANK
CONTINUED TO OFFER MORE
2017 marked the signing of a landmark 15-
COMPLETE SOLUTIONS TO year exclusive partnership agreement with
FINE-TUNE AND AUTOMATE the Multinational Insurance Group of Manulife
(Canada).
VARIOUS PROCESSES TOWARDS
GREATER SECURITY FOR As of 2017, it was estimated that less than 7%
ONLINE TRANSACTIONS. of Vietnamese people had life insurance. This
figure is much lower than other countries in
the region, such as Indonesia, Malaysia or The signing of the strategic partnership agreement between
Singapore, where the proportion of insured Techcombank and Manulife.
In the age of digitalisation, security is a top priority. Techcombank has utilized the
PCI DSS international security standard since 2013. Techcombank has been and will people is over 50% of the population.
continue improving its systems and products to ensure full compliance with legal
In developed countries like the US, the UK, to introduce insurance products to more consumers. Thanks to a team of
regulations and to stay up to date with international developments, while providing a
France and Spain, bancassurance accounts for experienced and knowledgeable financial consultants and a nationwide
user- friendly experience.
up to 70% of total insurance premium income, network of branches, Techcombank has been able to deliver optimal insurance
while in developed Asian markets such as solutions to customers through its professional advisory services and easy,
The Bank will continue to invest in digital and online platforms with the help of the latest
Malaysia, Korea and Singapore, this figure is time-saving procedures. Techcombank has been successful at establishing trust
technology of the industrial revolution 4.0, including contactless payment (QR Code,
about 30-40%. with customers, thereby giving them peace of mind when using Techcombank
Contactless, etc) and modern identification tools (PIN, OTP, fingerprint, etc.) for payment
bancassurance products
services in partnership with Visa, MasterCard, JCB, Napas, etc.
With a view to bringing the social security
of Vietnamese people on a par with the rest In 2017 alone, Techcombank’s total annual premium equivalent (APE) reached
of the region, the Bank is working tirelessly nearly VND649 billion (+44% y / y).

42 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 43

COMPREHENSIVE SOLUTIONS

OPTIMAL CHOICE (continued)

LEADING IN SELECTED FOCUS

SEGMENTS - BY NUMBERS

Leading the Vietnamese Techcombank’s Visa Credit Promoting the Healthy credit growth
bancassurance market card topped the market online channel
in sales in transaction volume

THE NUMBER OF ONLINE

APE FOR THE YEAR TRANSACTIONS FOR THE YEAR TECHCOMBANK’S CREDIT
INCREASED BY

400% 181,002
INCREASED BY OVER BALANCE IN 2017 REACHED

44% 13.9% VND billion

FROM 2016 AND
TRIPLED THAT OF 2015
of the Visa credit card transactions
market share. Techcombank’s Visa
from 2015 and more than 2.8 times
the number in 2016, reaching nearly
an increase of
from 2016 15.96%
Credit card has held the number one
position among all banks in Vietnam
since October 2017.
2,800,000
transactions per month.

44 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 45

COMPREHENSIVE SOLUTIONS

THE BANK OF CHOICE

FOR BUSINESSES

WITH THE GUIDING PRINCIPLE

THAT TECHCOMBANK DOES
NOT SIMPLY SELL FINANCIAL
PRODUCTS BUT

COMPREHENSIVE
SOLUTIONS
TO CUSTOMERS, EACH MEMBER
OF THE SALES TEAM ACTS AS A
FINANCIAL CONSULTANT WITH A TRUE
UNDERSTANDING OF THEIR CUSTOMERS,
THEREBY DELIVERING REAL ADDED
VALUE TO THEIR BUSINESSES.

46 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 47

COMPREHENSIVE SOLUTIONS
Outstanding solutions
for large enterprises
WHAT SETS TECHCOMBANK APART FROM OTHER
BANKS IS THAT WE FOCUS ON LARGE CORPORATE
CLIENTS WITH STRONG FINANCIAL FOUNDATIONS
AND HIGH GROWTH POTENTIAL, WHO HAVE THEIR
OWN ECOSYSTEMS AND OPERATE IN KEY ECONOMIC
SECTORS IN WHICH TECHCOMBANK HAS EXPERTISE.
48 ANNUAL REPORT 2017
L
arge corporate clients have complex
financial demands and expect high
.quality products and services as well
as timely delivery. In order to satisfy their
needs and make a difference, Techcombank
has developed comprehensive solutions that,
within the customer’s ecosystem, provide full-
circle financial services, from input to output,
throughout their production and business
cycle. The goal is to bring maximum value and
effectively manage risk for both the clients and
the Bank, which in turn makes Techcombank the
Bank of choice for customers.
For example, for real estate developers,
Techcombank’s solutions go beyond financing
the project. Techcombank offers comprehensive
solutions which address many problems that
our customers face. These may include: how to
sell the products, as well as ensure timely and
optimal cash flow; how to build and promote a
brand; how to effectively manage risks; and how
to apply a successful model to other projects.
Techcombank’s financial solutions are offered
not only to developers but also to homebuyers,
and other constituents of the customers’ value
chain, including suppliers, contractors and
insurance providers.
With the guiding principle that Techcombank
does not simply sell financial products but
comprehensive solutions to customers, each
member of the sales team at Techcombank
acts as a financial consultant with a true
understanding of their customers, thereby
delivering real added value to their businesses.
Creating distinct value
for SMEs
T
echcombank targets small
and medium enterprise (SME)
.customers in the ecosystems of
larger corporate clients, or in high-growth
niche segments, within the serviceability
and risk appetite of the Bank.
This segment of customers requires
secure capital to maintain and expand
their business operation, especially during
peak seasons. They also need convenient
and user-friendly solutions to conduct
transactions and advice on how to enhance
their business efficiency.
To best meet these demands, and ensure
that policies on fees, interest rates,
security assets, and transaction processing
times are optimized for each customer,
Techcombank offers differentiated value
for each focus customer segment. Based on
the nature of their businesses and financial
behavior, Techcombank provides the right
solutions at the right time, leveraging the
Bank’s best service capabilities.
On that basis, Techcombank has successfully
built innovative business programs for each
focus customer segment, delivering the
highest value to customers. The Bank's
solutions have started to yield quantifiable
results. Our customers saw increase in
projected revenue and profit based on
estimated cost and cash flow. Similarly,
their financial and management expenses
were reduced.
Techcombank has initiated a specialized
service model for the key customer sub-
segments through specialized business
banking centers, set up to serve specific key
sub-segments. At these centers, customers
will be served by relationship managers
with specialized training, strong knowledge
of the sub-segments as well as deep
understanding of the customers’ business
models. They will be the best advisors to
help customers choose the solution most
suited to their financial needs. Policies
and procedures are being continuously
developed and improved to meet the
specific needs of each key sub-segment.
This is the key to Techcombank's outstanding
position in the financial-banking market:
it strives to attract the most demanding,
highest-value clients while delivering
outstanding value.
ENABLING FINANCIAL SUCCESS & SECURITY 49
 ONE VISION
ONLY WHEN EVERYBODY
SHARES THE SAME VISION
CAN THE MACHINE RUN
SMOOTHLY WITHOUT ANY
INTERNAL FRICTION.

50 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 51

ONE VISION

TRANSFORMING
CORPORATE CULTURE

TECHCOMBANK’S

5
CORPORATE CULTURE
IS BASED ON

core
values
1 CUSTOMER FIRST

2 INNOVATION

3 TEAMWORK

4 PEOPLE DEVELOPMENT

5 ACCOUNTABILITY

At Techcombank, “Corporate Culture” is defined as the organization’s DNA:

the Bank's shared beliefs, values, and behavior. This corporate culture, which
is strengthened every day and every hour, will transform Techcombank into
a bank with its own personality, creating outstanding banking products,
and contributing to the development of the country’s economy, the Bank’s
customers and Techcombank itself.

52 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 53

ONE VISION

TRANSFORMING CORPORATE CULTURE (continued)

NOT ONLY DID TECHCOMBANK INTRODUCE THE DEFINITIONS, THE BANK ALSO
DEVELOPED A SPECIFIC BEHAVIORAL FRAMEWORK FOR EACH CORE VALUE.
CORPORATE
CULTURE

TECHCOMBANK’S TOWER OF ORGANIZATIONAL

Techcombank services
DEVELOPMENT MODEL, DEVISED IN 2014, CUSTOMER only matter if they bring 1. Customers’ interests – first priority
IN CONSULTATION WITH THE MANAGEMENT FIRST value to customers and 2. Understanding customers,
MANAGEMENT
colleagues overcoming challenges
SYSTEM SYSTEM CONSULTING CORPORATION, NOT ONLY
CLEARLY INDICATES THAT CORPORATE CULTURE
IS ONE OF THE SIX KEY COMPONENTS THAT
1. Breakthrough innovation,

FIVE CORE VALUES

OPERATIONAL SYSTEM ENSURES THE SUSTAINABLE SUCCESS OF THE Always stay in
INNOVATION outstanding achievements
BANK, BUT ALSO INSPIRES A TECHCOMBANK leading position 2. Immediate actions, effective daily
IDENTITY WHICH EACH TECHCOMER EMBODIES
RESOURCES
IN THEIR DAILY PROFESSIONAL ACTIVITIES.
SITTING ATOP THE TOWER OF ORGANIZATIONAL
DEVELOPMENT, CORPORATE CULTURE SERVES At Techcombank, success 1. Understanding brings people closer
TEAMWORK
AS A POINT OF REFERENCE FOR MEASURING comes from cooperation 2. Fewer emails, more in-person discussions
PRODUCTS & SERVICES
THE SCALE, THE FOUNDATION AND CAPACITY TO
GROW OF THE ORGANIZATION, WHICH IS VITAL
FOR CREATING A COHESIVE ORGANIZATION, Capable people bring
1. Building development path, coaching
MARKET PEOPLE competitive advantages
COMMITTED TO ACHIEVING LONG-TERM, and training programs
DEVELOPMENT and outstanding success to
SUSTAINABLE SUCCESS. 2. Everyone is a student and a teacher
the organization

Fully aware of the role of corporate culture in its overall operations, Techcombank has invested not only financially 1. Always follow through and
but also considerable time and intellectual resources, into building a corporate culture based on five core values: ACCOUNTABILITY Overcoming challenges to overcome challenges
Customer First, Innovation, Teamwork, People Development, and Accountability. achieve great success 2. Personal interests come after
commitment to the organization

54 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 55

ONE VISION
TRANSFORMING CORPORATE CULTURE (continued)
UNDERSTANDING CUSTOMERS, TAKING TIMELY ACTION, AND
MAKING EVERY EFFORT TO MEET CUSTOMERS' NEEDS HAS
BECOME A PRIORITY OF EVERY TECHCOMER.
56 ANNUAL REPORT 2017
Customer
First
A
t Techcombank, the “customer first”
culture guides the day-to-day business
.operations as well as the Bank’s long-term
strategy. Given the nature of the financial services
sector, in order to gain customers’ trust and loyalty
the Bank must provide superior quality products
and services.
The pressing question at the forefront of every
Techcomer’s mind is: “How do we deliver the best
value to our customers?” All products and services
of Techcombank are results of thorough research
and deep understanding of the customers’ needs.
Understanding customers, taking timely action and
making every effort to meet customer needs has
become a priority of every Techcomer, so much so that
every reflection on the services provided becomes an
opportunity to deliver positive customer experience
and win lasting appreciation from customers.
AT TECHCOMBANK, INNOVATION AND IMPROVEMENT ARE
NEVER ONE-OFF INITIATIVES. RATHER, THEY REPRESENT A
MINDSET PRESENT AT EVERY LEVEL OF THE ORGANIZATION
AND IN EVERY ACTION.
Innovation
W
hat can we do differently today than
we did yesterday? and What ideas
.for tomorrow can we apply to our
work today? are questions all Techcomers have to
consider daily. They are empowered to challenge the
status quo and in 2017 alone, hundreds of procedural
innovations suggested by employees were applied to
the Bank’s systems.
In order to achieve the strategic goals and solidify the
Bank’s leading position in the sector, Techcombank
promotes outside-of-the-box ideas and encourages
innovative thinking, all the while ensuring that the
Bank is well-positioned in the market, and fully
complies with regulatory requirements.
The spirit of “Innovation” will help Techcombank
identify and develop appropriate business models
and transform Techcombank into a technology-
based business organization, strengthening the
workforce and corporate culture.
ENABLING FINANCIAL SUCCESS & SECURITY 57
ONE VISION
TRANSFORMING CORPORATE CULTURE (continued)
HARMONY IN CORPORATE CULTURE IS CRUCIAL FOR
ENABLING EMPLOYEES TO ACHIEVE THEIR GOALS.
58 ANNUAL REPORT 2017
Teamwork
E
ach unit of Techcombank, from branches
to Head Office departments, was set up for
.a specific function and each Techcomer
works towards their own performance indicators to
achieve this function. All Techcombank employees,
from the veterans to the new recruits, share the
same goal and vision.
At Techcombank, all employees understand that
success is a result of their own effort combined
with the support they receive from the system. The
harmony in corporate culture is crucial for enabling
employees to achieve their goals. Conversely,
when the employees are in tune with the corporate
culture and understand Techcombank’s vision,
success will follow.
I
f the guiding principle of our banking services is
"customer centricity," internally, it is "employee
.centricity." Investment in our employees to help them
enhance their knowledge and capability is an integral part
of the Bank's strategy.
In preparation for the future, Techcombank allocates more
of its resources to recruiting and training programs than
most other banks in the industry. The Bank recognizes
TECHCOMBANK’S COMMITMENT TO
PROMOTING EMPLOYEE TRAINING
DEMONSTRATES HOW MUCH THE
BANK VALUES "PEOPLE EXCELLENCE."
Human resource
development
that its most valuable asset is human capital, so the
budget for training is ring-fenced.
Techcombank's commitment to promoting
employee training demonstrates how much the Bank
values "People Excellence." This uncompromising
emphasis on training has contributed to high
levels of employee dedication and motivation, and
underpins the Bank’s success. Employees can clearly
see the connection between the Bank’s success and
their own contribution. The success of Techcombank
in turn translates to added value to its customers and
shareholders. This further embeds a commitment
to high professional standards and ethics, and
ultimately leads to stronger customer relationships
based on trust.
ENABLING FINANCIAL SUCCESS & SECURITY 59
ONE VISION
TRANSFORMING CORPORATE CULTURE (continued)
Accountability
T
he State’s legal system,
together with Techcombank’s
internal policies, regulations
and corporate culture, have clearly
stipulated the responsibilities of each
of the over 8,000 employees in the
Bank. Employees are committed to
internal compliance, taking initiative
and employing continuous innovation,
while management is responsilbe for
the implementation of strategy and
connecting individual efforts to produce
a smoothly-functioning organization that
can advance the entire system.
Compliance has always been a core
principle by which Techcombank builds
trust, safety and business sustainability.
Compliance with the Bank’s internal policies
and legal regulations as well as commitment
to quality have always underpinned
Techcombank’s success.
60 ANNUAL REPORT 2017
EMPLOYEES ARE COMMITTED TO INTERNAL COMPLIANCE,
TAKING INITIATIVE AND EMPLOYING CONTINUOUS
INNOVATION, WHILE MANAGEMENT IS RESPONSILBE
FOR THE IMPLEMENTATION OF STRATEGY AND
CONNECTING INDIVIDUAL EFFORTS TO PRODUCE A
SMOOTHLY-FUNCTIONING ORGANIZATION THAT CAN
ADVANCE THE ENTIRE SYSTEM.
4 factor for employees. This Award recognizes
DETERMINING
FACTORS
MODEL(*)
ENHANCING IMPROVING
SKILLS AND TALENT
UNDERSTANDING AND THROUGH OFFICIAL
SETTING
DEVELOPMENT EXAMPLES
PERSUASIVENESS MECHANISMS
(*): Recommendation Model developed by McKinsey
The five core values, defined by the Bank example, they are printed on items such
with the help of McKinsey’s recommended as calendars and posters (Enhancing
4 Determining Factors model, have been Understanding and Persuasiveness).
incorporated into daily operations and Competency in corporate culture
delivered through a new employee training management (Improving through Official
program, Talent Pool Talent Development Mechanism) also forms 10% of the Board
(Skills and Talent Development). The of Management members performance
key messages of this training program assessment (Setting Examples) – this will
are reiterated throughout the Bank, for rise to 20% in 2018.
IN ORDER TO RECOGNIZE AND REWARD
POSITIVE PRACTICES OF THE FIVE CORE
VALUES, TECHCOMBANK LAUNCHED AND IS
IMPLEMENTING THE
CULTURE
JOURNEY
PROGRAM
THIS PROGRAM HAS SUCCESSFULLY BRIDGED
THE GAP BETWEEN HEAD OFFICE AND BRANCH
EMPLOYEES. THE PROGRAM HAS BEEN WELL
RECEIVED WITH HIGH PARTICIPATION LEVELS.
TCB
In addition, the Bank has introduced The
Honors Techcomers Award. The winner
is personally selected by the Chairman of
the Board of Directors, a highly motivating
employees who put the five core values into
practice: they always strive for excellence,
always do the right thing (professional
ethics), and always align personal interests
with the great and long-term success of the
organization.
Corporate culture helps create a unique
identity for Techcombank, allowing it to
provide superior products and services that
foster the development of the economy,
Techcombank as well as its customers
In order to realize the Bank’s 2016-2020
strategy and to deliver a successful and
sustainable transformation, Techcombank’s
Board of Directors decided to establish
the Organizational Culture Transformation
Strategic Initiative in the fourth quarter of
2017, with direct leadership of the Board of
Directors and implemented by the Executive
Board, with the aim of building a strong and
impactful culture.
ENABLING FINANCIAL SUCCESS & SECURITY 61
ONE VISION

TRANSFORMING CORPORATE CULTURE (continued)

LEVEL OF MANAGEMENT CORRESPONDING LEVELS THE ORGANIZATIONAL CULTURE In 2017, according to the EES, the level of practice of the five core values at 5 core values
SKILLS AND CORRESPONDING OF RESPONSIBILITIES STRATEGIC INITIATIVE FOCUSES Techcombank reached over 80% on average, following constant improvement over
MANAGEMENT POSITION previous years. Techcomers’ engagement is crucial for Techcombank to translate
ON BUILDING THE MANAGEMENT
REQUIRING THE SKILLS the principles of corporate culture into daily operations. To do so, the Bank will: Customer Techcombank 85%
ABILITY OF SENIOR MANAGERS. First Techcomer 87%

THE TOWER MODEL, DEVELOPED

FOR TECHCOMBANK BASED 1 APPLY AND PRACTICE ITS CORE VALUES THROUGH THE ANNUAL CULTURE
JOURNEY PROGRAM;
Innovation
Techcombank
Techcomer
87%
84,5%
ON CONSULTATION WITH
V.
CEO, COO, Chairman
Transition
Management Skills
Develop long term vision
THE MANAGEMENT
CONSULTING
SYSTEM
CORPORATION,
2 DEVELOP COMPLETE GUIDELINES FOR BEHAVIORAL STANDARDS WITH SPECIFIC
AND CLEAR DETAILS ON EACH CORE VALUE AND A SEPARATE CORPORATE
CULTURE GUIDELINE FOR EACH BUSINESS COMPONENT OF EACH DIVISION;
People
Development
Techcombank
Techcomer
78%
79%

Plan transition to next stage of growth

NOT ONLY ENSURES THAT THE
3
Techcombank 79%
IMPLEMENT A VARIETY OF INITIATIVES TO PROMOTE EMPLOYEE KNOWLEDGE, Teamwork
IV. Develop and monitor strategic plans
SYSTEMATIC DEVELOPMENT UNDERSTANDING AND TRUST AS WELL AS TO ENCOURAGE CHANGE WITH THE HELP Techcomer 82%
Organizational OF EXAMPLES SET BY THE BOARD OF MANAGEMENT, MIDDLE MANAGEMENT AND
Senior Managers Development Skills Manage day-to-day operation OF CORPORATE CULTURE THE NEXT GENERATION OF LEADERS FROM THE TALENT POOL.; AND
Techcombank 80,25%
»» Strategic Planning »» Organizational Planning
Accountability
»» Strategic Leadership »» Cultural Management MANAGEMENT IS BUILT INTO
4
Techcomer 84%

ITS VERY FOUNDATION, BUT DEVELOP A ROBUST AND OBJECTIVE PERFORMANCE MEASUREMENT SYSTEM FOR
THE 5 CORE VALUES, BENCHMARKING AGAINST INTERNATIONAL ORGANIZATIONS.
III. Organizational Management Skills Coordinate work among ALSO HELPS THE BANK SET 50% 60% 70% 80% 90% 100%
Middle Managers function units and provide
OUT A CLEAR LEARNING PATH
»» Planning »» Financial Management
»» Management Development »» Performance Management / Control direct reports
»» Organization »» Team building
»» Conflict Management
FOR EACH LEVEL OF EMPLOYEE, OVER THE COURSE OF ITS 24 YEARS, TECHCOMBANK HAS GROWN
WITH A PARTICULAR EMPHASIS FROM A SMALL-SCALE OPERATION TO A LEADING NATIONAL BANK WITH
II. Operational Management Skills Oversee
First Line »» Recruiting & selection »» Day-to-day supervision
work ON DEVELOPING THE NEXT ASPIRATIONS TO PURSUE INTERNATIONAL STANDARDS AND BRING EVEN
Supervisors
»» Training / Coaching
»» Motivation
»» Management of Meetings
»» Performance Appraisal GENERATION OF LEADERS. GREATER BENEFITS TO THE COMMUNITY AND SOCIETY. Vision / Meaning

HAPPINESS
I. Core Management Skills Transforming corporate culture has Connectedness

All of the Above »» Communication »» Operational Leadership Effectiveness

become one of many strategic bank-wide As Tony Hsieh said in his bestselling book “Delivering Happiness,” an organization
»» Interpersonal Effectiveness
»» Time Management
»» Delegation Effectiveness
»» Problem Solving and Decision Making
initiatives. Techcombank is committed whose goals and vision reach beyond mere profitability is an organization
to raising the corporate culture index, with exceptional potential (from a long-term financial efficiency perspective). Perceived progress

improving employee satisfaction and the
Role Concept working environment (as measured by the
Making the Transition to Successively Higher Levels of Management Organizational Health Index (OHI) and the
Responsibilities Employee Effectiveness Survey (EES)) and
heightening the Bank’s ranking among the
Techcombank’s transformation journey with its emphasis on improving the
corporate culture management capacity of senior management and that of the next Perceived control
generation of leaders, is certainly a crucial foundation supporting Techcombank’s
ultimate goal of becoming the number one bank in Vietnam.
TIME

best workplaces in Vietnam.

62 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 63

ONE VISION

“GROWING”
TECHCOMERS

IT IS IMPORTANT TO
TECHCOMBANK TO HIRE
EMPLOYEES THAT ARE

THE BEST FIT

FOR THE ORGANIZATION AS A WHOLE. ONLY
WHEN EVERYBODY SHARES THE SAME VISION
CAN THE MACHINE RUN SMOOTHLY WITHOUT
ANY INTERNAL FRICTION.

CEO Nguyen Le Quoc Anh

2017 was a year of strong development

for the Vietnamese economy and its
banking sector. This success was the
result of financial institutions across the country overcoming
a turbulent year in terms of maintaining and expanding
their high-quality workforce to meet customers' increasingly
complex demands.

64 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 65

ONE VISION
“GROWING” TECHCOMERS
Techcombank is proud to enjoy a low
employee turnover rate. Techcombank
employees on average stay with Bank for
the longest time across the sector, this
is particularly true for middle and senior
executives. This confirms that the Bank
has a strong human resources strategy,
aimed at creating an environment where
employees have opportunities to maximize
their capabilities, receive recognition, and
follow a clear career path, while receiving
competitive benefits.
Techcombank understand that "people
excellence" is fundamental to the
sustainable development of any
66 ANNUAL REPORT 2017
Affirmation: “quantity”
1 2
In 2017, Techcombank The number of highly
recruited nearly qualified employees has
2,000
increased. As at 2017
employees to expand in line
with the business plans. All new
employees attended training
92%
of Techcombank’s
and orientation sessions to learn
employees are educated to
and adapt to the Bank's culture.
undergraduate degree level,
or higher.
organization. That is why from the very AT TECHCOMBANK,
beginning, the Bank has spared no effort The average length of employment at the Bank is 4.7 years. This is
in recruiting, training, retaining and
EMPLOYEES CAN FIND THE substantially higher than both the service industry's 3-year average and
developing talents to align with the Bank’s WORKING ENVIRONMENT the average of the country's finance-banking industry. Not only does this
development goals. Only when sufficient WHERE THEY CAN SUCCEED number demonstrate Techcombank employees' high level of engagement,
resources are available can the Bank it serves as evidence that the Bank is making progress in providing
respond to the needs and the deployment AND REALIZE THEIR FULL employees with a good working environment.
of the chosen business strategy and model. POTENTIAL. THEY ARE ENABLED
The human resources strategy reflects TO OVERCOME CHALLENGES
the Bank’s thinking: “It is important for AND SEIZE OPPORTUNITIES
Techcombank to select employees that are
TO BECOME THE "BETTER
the best fit for the organization as a whole.
Only when everybody shares the same vision VERSION" OF THEMSELVES
can the machine run smoothly without any WHILE HELPING TECHCOMBANK
internal friction “ (CEO Nguyen Le Quoc Anh)
PURSUE ITS VISION OF
BECOMING THE NUMBER ONE
BANK IN THE COUNTRY.
ENABLING FINANCIAL SUCCESS & SECURITY 67
ONE VISION

“GROWING” TECHCOMERS (continued)

THOROUGH SELECTION FROM ENTRY LEVEL

Raising the quality level

Recruitment is a long-term process that starts by
identifying the human capital requirement for
each division based on the business plans and
objectives for the next five years. The recruitment
team is specialized to identify, evaluate and select
candidates most suited to the Bank's business
direction.
The recruitment process ensures that the pool of
candidates is sufficiently large and that candidates
receive appropriate feedback. The process
continues to ensure post-recruitment quality,
beyond the probationary period. The results of
the survey of human resource processes in 2017
showed a 82.59% satisfaction rate (an increase of
2% in comparison to 2016).
A
t Techcombank, it is believed that investing “tailored” for specialized groups and has received
in training and development is the right positive feedback from trainees.
.strategy. Therefore, even when the budget is
tight, c ommitment to training is never c ompromised. Techcombank’s Internal Training team is very
qualified and highly skilled at incorporating practical
case studies, group competitions, and other
PROPER PROFESSIONAL TRAINING IS ALWAYS
techniques in training sessions, in order to ensure
CONSIDERED TO BE THE KEY TO REINFORCE concentration and enthusiasm from attendees.
"PEOPLE EXCELLENCE."
Training sessions and activities are not confined
to the classroom, they can be incorporated into
Techcombank recognizes the importance of daily work. This ensures that teams are built with
“quantity” as well as “quality.” This is evidenced by the Techcombank DNA – aspirations, high morale,
the range of training courses which include soft skills transparency, strong professional ethics and
and e-learning training. Each training session was professionalism - embedded from the start.

OUTSTANDING TRAINING QUALITY

Techcombank sets clear developmental
milestones for each position to help new
employees adapt to the environment
and ensure that they continue to
develop. Techcombank understands
that the integration and comfort of
employees from the beginning plays a
decisive role in their ability to engage
with the organization.
courses and exams for 91,967 trainees.
The number of in-house lecturers has
also increased over the years, reaching
278 employees (excluding faculty
members) in 2017. These impressive
numbers highlight a successful year for
Techcombank's training programs.

Thanks to the improvements in quality

of training, Techcombank scored very
231 COURSES

This is why in 2017, Techcombank
continued to improve its core training
programs, by setting up a standard
capacity framework for the sales team
and continuing to organize specific
training programs for managers
(TechcomLead). The Bank ran 231
91,967
high in the Employee Efficiency Survey
(EES) in 2017 – Techcombank employees
scored 66%, the highest score since 2011.
For the first time this figure exceeded
all comparative groups, confirming the TRAINEES
remarkable progress in the quality and
cohesion of the Bank’s employees.

68 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 69

ONE VISION

“GROWING” TECHCOMERS (continued)

Create
“People Excellence”
THE “PEOPLE EXCELLENCE” STRATEGY, WHICH WAS
FIRST IMPLEMENTED IN 2016, WILL CONTINUE INTO
2018 WITH TECHCOMBANK INVESTING IN EMPLOYEE
TRAINING TO IMPROVE EMPLOYEES' ABILITY TO
DELIVER HIGH QUALITY CUSTOMER SERVICE.

The Bank offers comprehensive career opportunities through its

compensation policies, thorough training, positive development
and institutional culture. Techcombank continuously improves
its benefit program to adapt to the needs of employees and to
show the Bank’s recognition of their efforts and contributions to
the overall success of the organization.

70 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 71

ONE VISION

“GROWING” TECHCOMERS (continued)

Program Program
TECHCOMBANK CARE LOANS FOR EMPLOYEES

83.35%
IN ORDER TO CONTINUOUSLY IMPROVE
AND ENHANCE SERVICE QUALITY, EVERY
YEAR TECHCOMBANK CONDUCTS A SURVEY
MEASURING SATISFACTION OF INTERNAL
CUSTOMERS. IN 2017, THE AVERAGE AN INCREASE OF 2.13% FROM 2016,
LEVEL OF SATISFACTION FOR THE WHOLE SHOWING THE IMPROVING QUALITY OF
SYSTEM WAS TECHCOMBANK’S INTERNAL SERVICES.

ELIGIBLE PEOPLE ELIGIBLE PEOPLE IN 2017, TECHCOMBANK WAS THE ONLY

All employees and their families and relatives.
THE PURPOSE AND BENEFITS OF THE PROGRAM
Launched in 2009, Techcombank Care provides employees and
their relatives with a comprehensive benefit program to provide
financial support in case of accidents, illness, or during maternity.
In 2017, the program upgraded the insurance benefits for VP (Vice-
president), O (Officer) and C (Clerk) level employees.
Employees who have been with the Bank for over one year and
with a performance rating of A3 or above.
THE PURPOSE AND BENEFITS OF THE PROGRAM
Designed to meet the needs of employees, the program gives
employees the opportunity to realize their dreams as quickly
as possible. The program reflects the Bank’s commitment to
accompany employees in creating better lives for themselves and
their families.
JOINT-STOCK COMMERCIAL BANK IN THE TOP
2 BEST PLACES TO WORK IN THE BANKING
SECTOR IN VIETNAM, AND THE BANK IS
RANKED 18TH OVERALL IN THE TOP 100 BEST
PLACES TO WORK IN VIETNAM, UP BY TWO
PLACES FROM 2015 (ACCORDING TO RESULTS
PUBLISHED BY AC NIELSEN AND ANPHABE IN
THE SURVEY “BEST WORKPLACE IN VIETNAM
2016”). THESE AWARDS ARE TESTAMENTS TO
TECHCOMBANK’S EFFORTS IN DEVELOPING
HUMAN RESOURCES THROUGH BUILDING
A POSITIVE WORKING ENVIRONMENT AND
INSPIRING ITS EMPLOYEES.

72 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 73

 The Value of
SUSTAINABILITY
TECHCOMBANK IS ONE OF THE FEW
BANKS IN VIETNAM TO INVEST
EARNESTLY IN RISK MANAGEMENT
AND THE IMPLEMENTATION HAS BEEN
HIGHLY EFFECTIVE.

74 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 75

VALUE OF SUSTAINABILITY

RISK MANAGEMENT

When risk management

TECHCOMBANK IS ONE
OF THE FEW BANKS IN
VIETNAM TO
becomes a necessity
A
fter a turbulent period in the The Risk Management Policy requires that all business operations reflect the
financial market, the State Bank of following principles:
.Vietnam (SBV) has taken a cautious
stance by regulating the flow of credit 1 3 5
capital to the manufacturing and other
priority sectors. The risk reserve ratio for The supervisory
Risk management
role of the Board of Responsibilities
non-priority loans has been raised and the Directors and the
must be supported
related to risk
proportion of short-term capital to medium by effective
Board of Management management must
measurement and
and long term loans has been gradually must be highly be clearly defined
stress - testing tools;
effective;
reduced. This is one of the bases of a healthy
and sustainable financial market.
Risk management
Risk management
However, for Techcombank, risk must be implemented
and decision making
must be based
management is not just a matter of and administered on independent
compliance with the authority’s regulations, comprehensively; and objective
assessments;
but a necessity. It is a standard procedure
that flows from inbuilt principles and
2 4
the fact that risk management plays
a very important role in the operation
of a commercial bank. Techcombank
These principles are reflected throughout the components of
has developed a comprehensive Risk
Management Framework to help the Risk Management, including:

INVEST
Bank achieve its strategic objectives while
ensuring sustainable development.
1 2 3 4

EARNESTLY Management
framework and
Organizational System tools Risk Culture
IN RISK MANAGEMENT AND THE risk appetite
structure
IMPLEMENTATION HAS BEEN
HIGHLY EFFECTIVE.

76 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 77

VALUE OF SUSTAINABILITY

RISK MANAGEMENT (continued)

Advanced risk
Techcombank manages risk through customer understanding, compliance culture and continuous
improvements, as demonstrated by the following:
management system
1 2 3

Techcombank understands its
customers and manages risk
sustainably using a specific risk
management model. The model is
developed for each client segment
according to each segment’s size
and characteristics, and is guided by
the principle that risk management
should be closer to the customers and
be based on a deeper understanding
of their businesses. This has helped
Techcombank to manage risk more
effectively, understand customers
better, and identify risks early on –
Techcombank has developed flexible
tools for risk management and robust
risk reserve plans, enabling capital
management and convenient business
operations. As a result, the solutions
and services offered to customers
provide a wider range of options to
meet different financial situations.
Compliance culture enables Techcombank
to pursue its strategic mission to become
the number one bank in Vietnam. The
Bank has always pioneered the best
international practices in business
management operations, especially
in risk management. Thanks to its
full compliance with the laws as well
as international standards, and the
consistent bank-wide application of
these standards, Techcombank aims
to build a reliable and transparent
system for stakeholders.
WITH THE OBJECTIVE OF ENABLING
EFFECTIVE, EFFICIENT AND
TRANSPARENT RISK MANAGEMENT
OF INTERNATIONAL STANDARDS,
TECHCOMBANK'S GOVERNANCE
MODEL IS SET UP SO THAT
BUSINESS OPERATION AND RISK
ASSESSMENT AND ACCEPTANCE
ARE CLEARLY SEPARATED.
ACCORDINGLY, EACH UNIT
FUNCTIONS INDEPENDENTLY.
the Bank. Accordingly, risk management
activities and decisions are transparent,
independent and fully evaluated.
Techcombank is one of the few banks
in Vietnam to invest earnestly in risk
management, and the implementation has
been highly effective. Rather than passive
management that only responds to risk,
the centralized risk management system is
designed to identify risks early and actively
mitigate them. All business plans are
developed in alignment with the Bank's risk
appetite. This is how the Bank determines
its customer selection, credit structures,
and risk mitigation options. In parallel,
The risk management strategy is not
limited to reducing risk for the Bank,
but also focuses on risk management
solutions for clients. Establishing strong
relationships with customers is a key
objective for Techcombank. Meaningful
partnerships with customers allow the
Bank to grow its business and effectively
manage risks.
Techcombank’s focus on risk management
brings peace of mind to customers -
they can be confident when dealing
with the Bank because this culture of
risk management is embraced at all
levels, from top management through to

T
ultimately helping to make better he Board of Directors holds the
decisions and enhance the quality of
ultimate responsibility for risk
risk management. .managment. Through the Audit
and Risk Committee (ARCO), the risk
management framework, risk appetite
and other risk management policies are
approved periodically to guide the risk
management as well as the business
operations of the Bank.
The roles and functions of the committees
responsible for risk management under
the Board of Management are being
developed and refined. These committees
will be responsible for risk acceptance
decision-making.
COMPLIANCE CULTURE IS PROMOTED AND APPRECIATED AT
TECHCOMBANK. ALL TECHCOMBANK EMPLOYEES VALUE THE In particular, the risk management division
IMPORTANCE OF COMPLIANCE AND ADHERE TO PROFESSIONAL is independent from the business units,
under the direct management of the ARCO,
ETHICS, BY SHOWING ZERO TOLERANCE TOWARDS THE COVER UP
with the role to supervise all activities of
OF ANY VIOLATIONS.
Techcombank has established channels
frontline employees.
for regular monitoring, early identification
of risks, and proactive solutions for all
market conditions.
Just as customer understanding lies at the
core of Techcombank, risk management
serves as its pillar. The Bank with its unique
risk management culture is able to manage
all types of risk, including; credit risk,
which is most prominent in the business
environment for Vietnam and the banking
sector in particular; operational risk; risk
of financial fraud, a frequent type of risk;
and each are monitored at all levels, using
a broad range of tools. Looking forward,
Techcombank will continue to consolidate
the risk management framework to ensure
strong and sustainable growth in line with
the Bank’s overarching strategy.

78 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 79

VALUE OF SUSTAINABILITY

RISK MANAGEMENT (continued)

Improving capacity for

effective protection

I
n 2017, Techcombank reached the and systems as well as internal policies laid out the plans and roadmap for the
capital adequacy ratio required by related to automation in preparation for preparatory work for compliance with the
.the SBV and the Basel Committee to early compliance with the SBV’s capital SBV's circular on internal audit control and
standardize operational safety regulations adequacy regulations stipulated in Circular ICAAP (Basel II second Pillar), which is in its
under the Basel II framework. To calculate 41/2016 / TT-NHNN. Techcombank has also drafting stage.
and apply it to management and to optimize
the Bank’s capital, Techcombank also
standardized its procedures, systemized its
IN ADDITION TO COMPLYING WITH THE SBV'S REGULATIONS,
data warehouse, collected additional data,
and automated reporting. TECHCOMBANK HAS SET HIGHER TARGETS, AND IN ORDER TO COMPLY
WITH BASEL II IN A MORE ADVANCED WAY, THE BANK HAS VOWED
In order to manage credit risk effectively, TO MEET INTERNATIONAL STANDARDS FOR RISK MANAGEMENT.
Techcombank also developed an efficient THIS IS AN AMBITIOUS BUT FEASIBLE GOAL THAT LIES WITHIN THE
personal customer rating model. The model CAPABILITIES OF TECHCOMBANK.
has made great strides in moving from credit
product evaluation to customer rating. This
transformation helps Techcombank build
effective cross-sale, up-sale, pre-approval
programs, and maintain relationships with
long-term customers.

In addition, Techcombank continues to

build and develop a model to assess losses
Last year, the Risk Data Mart Project was
when customers lose their ability to pay
launched to standardize risk data, create
- Loss Given Default (LGD), specifically for IN 2018, TECHCOMBANK WILL CONTINUE TO REFINE THE CORPORATE
a reliable and consistent source of data,
individual and corporate customers. The
provide automated tools for the risk CUSTOMER RATING MODEL BY INVESTING IN AN INTEGRATED CREDIT
LGD model is constructed on the basis of
management reports system, and strengthen APPROVAL SYSTEM, USING CLIENT RISK ASSESSMENT MODELS IN
the net realizable value of the collateral,
the valuation of capital and assets. This has
rather than the market value, to minimize THE END-TO-END CREDIT PROCESS. IN THE NEAR FUTURE, THE FOCUS
helped Techcombank make effective and
the risk of market volatility. WILL BE ON ENHANCING RISK MANAGEMENT CAPACITY, THEREBY
proactive management decisions in risk
management. In the near future, the focus will PROTECTING THE BANK'S BUSINESS.
Techcombank will continue to roll out
be on enhancing risk management capacity,
mini projects to enhance its technological
thereby protecting the Bank's business.
system and databases, business processes

80 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 81

VALUE OF SUSTAINABILITY

OUTSTANDING PERFORMANCE

IN 2017, TECHCOMBANK
Indicators Units 2017
ACHIEVED IMPRESSIVE
RESULTS WITH Total assets VND billion 269,392 IN 2017,
TECHCOMBANK TOTAL ASSETS CREDIT GROWTH
PROFITABILITY INDICES (VND BILLION) (%)
Credit growth % 15.96 ACHIEVED
INDICATING HIGH GROWTH. IMPRESSIVE
RESULTS WITH

269,392 15.96
IN PARTICULAR, THE Pre-tax profit VND billion 8,036
PROFITABILITY
BANK’S PROFIT BEFORE
Pre-tax profit growth Doubled INDICES INDICATING
TAX APPROXIMATELY HIGH GROWTH
DOUBLED OVER TWO ROE (*) % 23.84
CONSECUTIVE YEARS.
ROA (*) % 2.09 PROFIT BEFORE TAX ROE

G
oing into the second year of (VND BILLION) (%)
the customer-centric strategy, Demand Deposit Ratio % 23.51
.Techcombank understands that

8,036 23.84
the peace of mind and success of customers Non-interest income % 45.36
is the Bank’s own path to success. Therefore,
the foremost purpose of all Techcombank’s Number of Customers Over 5 million customers
products and services is to support the long
term financial success of its customers.
Number of employees Person 8,766
Techcombank provides customers with
comprehensive packages to better meet
Revenue per employee VND billion 1.86 REVENUE COUNTED PER EMPLOYEE ROA
their financial needs. In evidence of this in
(VND BILLION) (%)
2017, Techcombank achieved impressive
results with the profitability index indicating Number of branches Branch 315

1.86 2.09
high growth. In particular, the Bank’s pre-
tax profit doubled in two consecutive years. Number of ATM Machine 1,117

Cost / Income % 28.75

(*) On a monthly basis, excluding the bancassurance agency supporting fee and gain
from selling Vietnam Airlines shares in 2017

82 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 83

VALUE OF SUSTAINABILITY

OUTSTANDING PERFORMANCE (continued)

GOING INTO THE TOTAL ASSETS CREDIT GROWTH PROFIT BEFORE TAX RETURN ON EQUITY (ROE) (*) RETURN ON ASSETS (ROA) (*)
(VND BILLION ) (VND BILLION ) (VND BILLION ) (%) (%)
SECOND YEAR OF
THE CUSTOMER-
CENTRIC STRATEGY, +14% 269,392 +18% 181,002 +74%
8,036 23.84 2.09

TECHCOMBANK 235,363 +14%

156,088
+101%
+50%
17.50
+52%
1.50
191,994 124,032
175,902

UNDERSTANDS 158,897
92,752
94,894 3,997
9.73 0.86

THAT THE PEACE

7.40 0.63
2,037
4.77
1,417 0.39
878

OF MIND AND
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017

SUCCESS OF
* (exclude VAMC bond)
CUSTOMERS IS THE
TOTAL ASSETS OF TECHCOMBANK AS AT 31/12/2017, TECHCOMBANK’S PROFIT BEFORE TAX IN 2017 THANKS TO IMPRESSIVE EARNINGS, IN 2017, TECHCOMBANK'S ROA
BANK’S OWN PATH AS AT 31/12/2017 STOOD AT VND CREDIT GROWTH REACHED ITS REACHED VND8,036 BILLION, ROE CONTINUED TO SHOW STRONG ACHIEVED IMPRESSIVE GROWTH
269,392 BILLION, AN INCREASE OF TARGET OF 15.96%, WITHIN THE LIMIT EXCEEDING THE TARGET BY 60%, GROWTH, FROM 17.5% IN 2016 TO RATE, REACHING 2.09%.
TO SUCCESS. 14.5% COMPARED TO THAT OF 2016 GRANTED BY THE SBV. APPROXIMATELY DOUBLING FOR 23.84% IN 2017.
YEAR END, THEREBY INCREASING THE SECOND CONSECUTIVE YEAR
THE CAGR FOR THE 2013 - 2017 AND GROWING AT AN AVERAGE
PERIOD TO 14.1%. ANNUAL RATE OF 73.9% OVER THE
PAST 4 YEARS.

(*) On a monthly basis, excluding the bancassurance agency supporting fee and gain from selling Vietnam Airlines shares in 2017

84 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 85

VALUE OF SUSTAINABILITY

SUSTAINABLE DEVELOPMENT TO ENSURE FINANCIAL SECURITY

FOR CUSTOMERS

THE MOST IMPORTANT CRITERIA

FOR RETAIL AS WELL AS CORPORATE Improve the balance
sheet efficiency
CUSTOMERS WHEN CHOOSING
A BANK IS

STABILITY, FOLLOWED BY IN 2017, TECHCOMBANK MADE POSITIVE CHANGES TO IMPROVE THE EFFICIENCY OF THE BANK’S

SUSTAINABILITY
BALANCE SHEET.

AS AT YEAR END 2017,

TOTAL ASSETS REACHED CAPITAL RAISED MARKET 1’S LOANS 2017’S PROFIT BEFORE
of service. Safety and stability are paramount. a commitment to develop high quality and easily INCREASED BY INCREASED BY TAX INCREASED BY
Customers need to trust that their financial partner
is best placed to support and grow their business,
accessible products and services, Techcombank
has been constantly strengthening procedures for 269,392 2.6 12.8 101.1
as any instability or uncertainty will negatively control and risk management, as well as balance
impact not only their own prospects, but that of sheet quality management, and ensuring stability VND BILLION % % %
the macro economy in general. Imbued with a and security of financial activities. In this way, the Ý VND34,029 COMPARED TO COMPARED TO THAT COMPARED TO THAT
deep understanding of this need, combined with Bank offers customers peace of mind. BILLION COMPARED THAT OF 2016. OF 2016. OF 2016.
TO THAT OF YEAR
END 2016.

Indicator (VND billion ) 31/12/2017 31/12/2016 Growth

Loans to customers 160,849 142,616 18,233 12.78%

Deposits from customers and valuable papers issued 188,611 183,864 4,747 2.58%

Deposits from customers 170,971 173,449 -2,478 -1.43%

TECHCOMBANK’S EFFORTS WERE
RECOGNIZED BY THE ASIAN BANKER, Valuable papers issued 17,640 10,415 7,225 69.37%

WHICH PLACED IT AMONG THE LEADING

Profit before Tax 8,036 3,997 4,039 101.05%
VIETNAMESE BANKS IN THE TOP 500
ASIA PACIFIC STRONGEST BANKS BY
BALANCE SHEET IN 2017.

86 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 87

VALUE OF SUSTAINABILITY

SUSTAINABLE DEVELOPMENT TO ENSURE FINANCIAL SECURITY

FOR CUSTOMERS (continued)

Maintaining a high Controlling

capital adequacy ratio liquidity risk
AS OF 31 DECEMBER 2017. THE CAPITAL
ADEQUACY RATIO (CAR) WAS 12.68% WHICH IS 3.68% HIGHER THAN THE
LEVEL SET BY THE SBV.
TECHCOMBANK HAS ESTABLISHED INTERNAL
LIQUIDITY MANAGEMENT POLICIES AND
PROCEDURES, INCLUDING SYSTEMS FOR
Over the past five years, Techcombank has maintained a high years; until 2016, profit after tax was invested back into the
MANAGING, MEASURING, MONITORING AND
CAR (Capital Adequacy Ratio), despite its assets growing at a Bank to allow future growth. Further, Techcombank is ready to
compound annual growth rate (CAGR) of 14%. This is due to implement and apply Basel II capital adequacy ratio standard FORECASTING LIQUIDITY RISK.
the Bank’s policy of not paying dividends for five consecutive according to the SBV’s roadmap.

The Audit and Risk Committee (ARCO) is the unit that

establishes the bank-wide risk appetite framework. The Asset
Liability Management Committee (ALCO) is the unit that
executes and monitors the implementation of liquidity risk
management, ensuring compliance with risk appetite and
warning limit threshold set by the ARCO.

In addition, liquidity stress tests are conducted under

hypothetical industry-wide scenarios as well as
Techcombank-specific scenarios.

Liquidity stress tests are conducted monthly to forecast the

cash flow for a given period, assuming that the Bank faces a
number of stress scenarios such as high deposit withdrawal
rate or limited access to interbank capital. Based on these
scenarios, Techcombank has developed a liquidity reserve
plan (LCP) to respond quickly to stress scenarios and help
prevent liquidity crises.

Techcombank’s liquidity ratios always meet the requirements

stipulated in the Circular 36/2014 / TT-NHNN, amended by
Circular 06/2016 / TT-NHNN of the SBV.

88 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 89

VALUE OF SUSTAINABILITY

SUSTAINABLE DEVELOPMENT TO ENSURE FINANCIAL SECURITY

FOR CUSTOMERS (continued)

DEPOSIT COLLECTION IS COORDINATED IN ALIGNMENT

Business development - efficient WITH LENDING ACTIVITIES
and sustainable lending To maintain an effective and reliable loan-to-deposit
ratio (LDR), Techcombank actively managed the increase
in customer deposits in different stages throughout the

A
s of 31 December 2017, Techcombank’s credit year. For the year ended 31 December 2107, customers'
balance reached VND181,002 billion, an OUTSTANDING LOANS COMPOSITION CUSTOMER DEPOSIT COMPOSITION deposits reached VND175,435 billion (including VND4,464
.increase of 15.95% compared to that of 2016, BY CUSTOMER SEGMENT (VND BILLION) billion of certificate of deposits), of which personal
of which outstanding loans to customers increased by (VND BILLION) deposits saw a sharp increase, subsequently making up
12.78% to VND160,849 billion. 13%
+1% 72% of total deposits.
160,849 173.537 175.435
Although the deposit balance did not increase
142,616
significantly in 2017, the ratio of non-term deposits and
WITH A FOCUS ON SAFE AND SUSTAINABLE DEVELOPMENT, term deposits showed positive adjustment. While term
40% 72%
TECHCOMBANK’S POLICY IS NOT TO GROW ITS OUTSTANDING Personal 43% Personal 64% deposits maintained at the same level as last year, non-
LOAN BALANCE BUT TO SHIFT ITS PRIORITY TO SERVING term deposits grew, resulting in an increase in the share of
14%
CLIENTS WITH GOOD BUSINESS PRACTICES, THEREBY REDUCING non-term deposits in total deposits from 22.7% in 2016 to
SMEs 13%
23.51% in 2017.
INEFFECTIVE LENDING AND PREVENTING DEFAULTS.
46% 28%
Large corporate 44% Institutional 36% This helped the Bank reduce the pressure on funding cost,
contributing to maintaining the net interest margin (NIM) at
In 2017, outstanding loans for small and medium enterprises increased by 20%,
3.90%, which is higher than the average level of the banking
thereby increasing their share in the Bank’s total loan balance from 13% in 2016 to 2016 2017 2016 2017
sector in Vietnam.
14% as at the end of 2017 (see table).

Shifting its focus to providing short-term loans to corporate customers helped

Techcombank grow its short-term loan balance by almost twofold. Short-term loans, 31/12/2017 31/12/2016
subsequently, accounted for 39% of the total loan balance, bringing down the share Structure of customers deposits
VND billion Proportion VND billion Proportion
of medium to long-term loans to 61%.
Term deposits 134,192 76.49% 134,142 77.30%

31/12/2017 31/12/2016 Current accounts 38,235 21.79% 35,827 20.65%

Structure of outstanding loans based on loan term
VND billion Proportion VND billion Proportion
Marginal deposits 3,008 1.71% 3,569 2.06%
Short-term 63,413 39% 35,884 25%
Medium-term 42,897 27% 62,493 44% Total deposits (*) 175,435 100% 173,537 100%
Long-term 54,540 34% 44,239 31%
(*) including certificated of deposits.
Total outstanding loans 160,849 100% 142,616 100%

90 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 91

VALUE OF SUSTAINABILITY

SUSTAINABLE DEVELOPMENT TO ENSURE FINANCIAL SECURITY

FOR CUSTOMERS (continued)

Proactively identify risks and Optimize & improve

manage credit quality cost efficiency
31/12/2017 31/12/2016 Increase / Decrease

O
VND billion Proportion VND billion Proportion VND billion %
ver the 2007 - 2012 period, while level of 1.61% by the end of 2017, placing
the Vietnamese banking system Techcombank among the banks with very Salaries and related expenses 2,595 55.23% 2,230 53.41% 365 16.35%
.saw a sharp increase in bad low credit risk in Vietnam. Office rental cost, assets, tools, facilities and asset
debts, Techcombank refocused early on 993 21.14% 963 23.06% 30 3.16%
amortization
by investing in credit risk management, The coverage ratio on Techcombank
Publication, marketing and promotion 263 5.61% 253 6.06% 10 3.95%
moving from passive management to group 3-5 outstanding loans has increased
active risk identification and mitigation. from 67% in 2016 to 73% in 2017, thereby Expenditure on payment of insurance premium for
166 3.54% 135 3.23% 31 22.96%
customers’ deposits
As a result, the debt ratios of groups 3-5 minimizing the Bank’s exposure to credit risk.
(see table below) were maintained at a low Per diem expenses 71 1.52% 60 1.44% 11 18.60%
Training and education expenses 29 0.63% 29 0.68% 1 3.25%
Conference expenses 42 0.89% 41 0.98% 1 2.07%
Other expenses 538 11.45% 464 11.12% 73 15.78%
IN JUNE 2017, TECHCOMBANK BECAME THE SECOND COMMERCIAL BANK
Total cost 4,698 100% 4,175 100% 523 12.52%
IN VIETNAM TO COMPLETE THE RECOVERY AND SETTLEMENT OF OVERDUE
Average number of employees (person) 8,766 - 7,787 - 979 12.57%
DEBTS SOLD TO VIETNAM ASSET MANAGEMENT COMPANY (VAMC) WITH
Revenue/employee/year 1.86 - 1.52 - 0.34 22.69%
FULL PAYMENT BEFORE MATURITY OF VAMC SPECIAL BONDS.
Cost/employee/year 0.54 - 0.54 - 0.00 -0.04%
Cost to Income ratio (CIR) (%) 28.75% - 35.29% - - -6.54%

A
long with improving service quality for customers,
31/12/2017 31/12/2016 Techcombank continuously improves and enhances
financial management and cost control to optimize THESE RESULTS WERE ACHIEVED THANKS TO A
VND billion Proportion VND billion Proportion
the use of input resources. REASONABLE COST STRUCTURE ASSOCIATED WITH
Group 1 – Current debt 155,932 96.94% 138,204 96.91%
THE BANK’S FIVE-YEAR STRATEGY. TOP PRIORITY IS
Group 2 - Special mentioned debt 2,333 1.45% 2,166 1.52% In 2017, Techcombank’s total operating expenses increased by
12.52% from 2016, equal to just one third of revenue growth. GIVEN TO THE LONG-TERM INVESTMENT COSTS OF
Group 3 - Sub-standard debt 575 0.36% 397 0.28%
As a result, the Bank’s cost to income ratio in 2017 dropped THE FOUNDATION SYSTEM, STRATEGIC INITIATIVES
Group 4 – Doubtful debt 456 0.28% 475 0.33% to 28.75%, the lowest rate in Techcombank’s 25 years of AND HUMAN RESOURCES.
Group 5 – Bad debt 1,553 0.97% 1,375 0.96% operation, and lowest among joint-stock commercial banks.
VAMC bonds 0 2,922

92 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 93

VALUE OF SUSTAINABILITY
SUSTAINABLE DEVELOPMENT TO ENSURE FINANCIAL SECURITY
FOR CUSTOMERS (continued)
Human resource costs increased by
16% from 2016, increasing to 55% of
the Bank’s total operating expenses.
The number of employees in 2017
increased by 979, equivalent to an
increase of 12.57%. Productivity per
employee (calcuated as revenue/
no. of employees) increased by
22.69% compared to 2016, marking
the third consecutive year of 20%+
growth rate, placing Techcombank
as a leader among joint-stock
commercial banks in Vietnam, in
terms of the quality and efficiency of
its human resources. Techcombank’s
development of human resources, to
retain talents, provide professional
training, build corporate culture, and
ensure employee engagement over
the years has helped these pleasing
results. In addition, the average
operating cost per employee in
2017 remained constant while the
average employee salary stayed
at a high level thanks to effective
management of other variable costs.
Rental (offices, tools and
equipments) and asset depreciation
expenses increased by 3% from
2016, accounting for 21% of
total operating expenses. This
figure closely follows the Bank’s
long-term strategy of investing
in technology and automation,
94 ANNUAL REPORT 2017
Diversification of
non-interest income
facilitating the realization of its TECHCOMBANK UNDERSTANDS THAT THE FINANCIAL NEEDS OF ITS This approach has enabled the Bank to
long-term goal in 2020. CUSTOMERS ARE EXTREMELY DIVERSE. THEREFORE, THE BANK DOES diversify non-interest income sources and
NOT LIMIT ITS BUSINESS TO LENDING PRODUCTS. IN 2017, THE BANK reduce the proportion of interest income
Marketing and promotion costs to total operating income, which is a
DIVERSIFIED AND IMPROVED THE QUALITY OF ITS PRODUCTS AND
remain constant at 5.6% of total common trend among commercial banks
SERVICES TO MAKE TRANSACTIONS FASTER AND MORE CONVENIENT in developed countries.
operating costs. Marketing activities
in 2017 include new incentive AND THUS IMPROVE CUSTOMERS’ SATSIFACTION, ENCOURAGE THEM TO
programs, new products, new service USE TECHCOMBANK PRODUCTS AND INCREASE TRANSACTION VOLUME. In 2017, the structure of the whole Bank’s
experience for customers, and operating income continued to show a
brand communication programs. positive change as the proportion of net
The 2017 HCMC - Techcombank interest income declined from 69% to 55%,
International Marathon sponsored while the proportion of non-interest income
by Techcombank, for example, 13% increased substantially. In particular, net
successfully promoted the interest income from services grew by
7%
Techcombank’s brand to customers 7% Net interest income 9% an impressive 95% year-on-year, due to
and investors. Net fee income the one-time agent fee associated with
17% 2016 Income from foreign 2017 bancassurance products. Excluding this
69% 55%
exchange trading agent fee, Techcombank’s core fee incomes
Other normal operating expenses and securities
were controlled at a stable level 23% grew at over 20% in 2017 thanks to a
Other income
compared to 2016. number of core fee products (see table).
In 2017, operating expenses were
entirely within Techcombank’s
projection, due to effective budget
preparation, control and accurate
periodic forecasts. This supported 2017 2016
the Board of Management in making Gross revenue structure from services
Billion VND Proportion Billion VND Proportion
effective decisions throughout the
year. Budget control has eliminated Settlement & cash services 1,466 32.43% 1,270 49.64%
inefficient costs, focusing resources Trustee & agency services 1,543 34.15% 61 2.39%
on long-term investment in the
Insurance commission services 513 11.35% 337 13.17%
Bank’s systems and on human
resources, ensuring improved labor Securities trading brokerage 375 8.29% 337 13.15%
productivity for the entire Bank. Other services 623 13.79% 554 21.65%
Total 4,520 100% 2,559 100%
ENABLING FINANCIAL SUCCESS & SECURITY 95
VALUE OF SUSTAINABILITY

SUSTAINABLE DEVELOPMENT TO ENSURE FINANCIAL SECURITY

FOR CUSTOMERS (continued)

LEADING IN BOND
BROKERAGE PROMOTING FEE INCOME FROM
TRANSACTION FEES AND CASH SERVICES
In addition to granting medium- and
long-term loans to corporate clients,
Techcombank has boosted the issuance Card payments are common worldwide
of bonds to clients, as a way to raise and have become popular with a large FEE FROM PAYMENT
capital that offers more advantages than number of the Vietnamese population, AND CASH SERVICES
bank loans. gradually replacing cash. (VND BILLION)

In 2017, the volume of advisory services To leverage upon the trend, Techcombank CAGR: 14%
IN 2017, TECHCOMBANK pioneered a payment infrastructure, and
issued by Techcombank increased by 33%
BECAME THE LEADING BANK
from 2016, maintaining the Bank’s leading
IN VIETNAM IN TERMS OF VISA
continuously improved its e-banking
facilities, to provide clients with the
1,466
position in the bond brokerage market,
which in turn raised fees from securities CARD TRANSACTION VOLUME convenience this service affords.
+15%
underwriting and brokerage services to Techcombank’s strategic goal is to raise 1,270

11% higher than the previous year and transaction volume on every customers’ 1,126 +13%

accounted for 8% of the total gross fees. card in order to create a competitive
advantage over other banks.

REVENUE FROM PAYMENT AND This strategy brought positive results in

2015 2016 2017

PREMIUM AS A LARGE SOURCE CASH SERVICES INCREASED BY 2017, when Techcombank became the
leading Bank in Vietnam in terms of VISA
OF REVENUE card transaction volume. Revenue from

+15%
payment and cash services increased by
15%, higher than the 13% growth rate
Techcombank focuses on reducing share of insurance premium income in total recorded in 2016. As a result, the CAGR for THANKS TO ITS UNCEASING EFFORT
PREMIUM INCOME risks for customers as well as internal fee incomes from 13% in 2016 to 19%. the period from 2015 to 2017 rose to 14%. IN 2017, TECHCOMBANK ACHIEVED
(VND BILLION) risk management. Techcombank’s IMPRESSIVE RESULTS BOTH IN
649 bancassurance products offer a full range * Excluding agency supporting fee Revenue from payment and cash services TERMS OF QUALITY AND QUANTITY.
of financial packages to customers to HIGHER THAN THE 13% still accounted for the highest proportion
574 THIS REAFFIRMS THE BANK’S
assist with current and future financial GROWTH RATE RECORDED IN of the Bank’s total fee income, but the
plans and meet their long-term needs in a proportion has been declining in favor of STRATEGIC DIRECTION FOR 2016-
450 2016. AS A RESULT, THE CAGR
+70%
sustainable way. FOR THE PERIOD FROM 2015 premium income. 2020 IS ON THE RIGHT PATH.
337
Revenue from exploitation TO 2017 ROSE TO 14%.
of new contracts
211 Bancassurance is one of the key products in
the Bank's five year strategy. In 2017, revenue
Fee income from insurance contracts increased sharply
38 by 44%. As a result, insurance delivered
the highest revenue growth among all fee
2015 2016 2017
products in 2017, at 70%, thus raising the

96 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 97

 FOR THE LOVE
OF VIETNAM
TECHCOMBANK AIMS TO
CREATE OPPORTUNITIES
FOR ALL VIETNAMESE
PEOPLE TO HELP IMPROVE
THEIR LIVES AND FULFILL
THEIR PERSONAL DREAMS
AND ASPIRATIONS.

98 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 99

FOR THE LOVE OF VIETNAM

TECHCOMBANK BELIEVES THAT CORPORATE SOCIAL

RESPONSIBILITY (CSR) IS ABOUT NOT ONLY OUTWARD AT TECHCOMBANK, WE HAVE THE
SOCIAL ACTIONS, BUT ALSO STRENGTHENING INTERNAL AMBITION TO FOSTER OPPORTUNITY
FOR EVERYBODY IN VIETNAM, TO
BANK-WIDE BONDS, TO ENSURE THAT EACH AND EVERY
BETTER THEIR LIVES AND REALIZE
EMPLOYEE, AS WELL AS THE BANK AS A WHOLE, UPHOLDS THEIR AMBITIONS.
THE VALUES AND CULTURE PRESENTED IN OUR STRATEGY
AND ACTIONS.

T
echcombank understands that its business success sits within the context
of the wider community and society in general. Guidance from the Board of
.Directors and the Board of Management combined with the efforts and co-
operation of the Bank’s employees do not paint the complete picture. The Bank must
also recognize the great contribution of its customers and society in general. For
this reason, Techcombank considers “Corporate Social Responsibility” integral to its
strategic planning and daily operations.

Techcombank demonstrates its commitment to social responsibility in its own way.

To Techcombank, community activities are a necessity, crucial to the shaping and
nurturing of corporate culture in the Bank as well as in each and every Techcomer.
Thanks to a series of corporate social programs, Techcombank’s employees had
the opportunities to travel to remote areas and offer support to less fortunate
communities in difficult circumstances. The experience allowed Techcomers to become
more understanding, more compassionate and more willing to deliver the best support
to colleagues, customers and business partners.

100 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 101
FOR THE LOVE OF VIETNAM (continued)
OUR
COMMITMENT
IS TRANSLATED
THROUGH TWO
ACTIONS:
Supporting local people in poorer provincial
areas through voluntary CSR programs
(CSR - Charity).
Every year and particularly in 2017, the
Bank has sponsored many local projects
including construction of highland schools,
upgrading or building new medical
facilities, donating houses, digging rural
roads and providing scholarships.
102 ANNUAL REPORT 2017
Connecting communities and promoting
positive values through sponsorship of
large-scale activities. An example of this
is the Bank's long-term commitment to
support the international marathon in
Ho Chi Minh City. One of the goals of this
popular event is to inspire young people
to prepare themselves for an increasingly
international world full of opportunities.
(CSR - Community Development).
COMMUNITY DEVELOPMENT
HAS BEEN AND WILL CONTINUE
TO BE A CORNERSTONE OF
TECHCOMBANK’S CSR PROGRAM.
TECHCOMBANK’S MANAGEMENT
BELIEVES THAT HAVING AN
EFFECTIVE AND MEANINGFUL
CSR STRATEGY DELIVERS
TREMENDOUS VALUE NOT ONLY
TO THE BANK, BUT ALSO TO BECAUSE
SHARING
SOCIETY AT LARGE. IN ORDER
TO ACCOMPLISH THIS MISSION,
TECHCOMBANK ADOPTED CSR-
PARTNERING, WHICH SITS WITHIN
BRINGS HOPES AND CONFIDENCE TO
THE REMIT OF ALL TECHCOMBANK
PATIENTS IN TIMES OF NEED,
EMPLOYEES
IN 2017, CSR PARTNERING PUT
TOGETHER 2 REMARKABLE Over 500 Techcombank employees
EVENTS: THE BLOOD BANK participated in this community blood
DONATION DAY - PART OF THE donation program, held on July 5, 2017
“RED JOURNEY” PROGRAM - AND in Ho Chi Minh City and on July 8, 2017
THE 2017 HCMC-TECHCOMBANK in Hanoi. In total, 407 units of blood were
successfully donated to the national blood
INTERNATIONAL MARATHON.
bank. The program was a meaningful
contribution from Techcombank to those in
need of medical support across the country.
ENABLING FINANCIAL SUCCESS & SECURITY 103
FOR THE LOVE OF VIETNAM (continued)

"Everyone needs to live with

dreams. The only limit to what
you can do is your acceptance.
However, the limit is personal
and the success comes only
when individuals overcome their
limits to live a more meaningful
life." - Miles Hilton Barber

The 2017 HCMC-Techcombank International Marathon
is another highlight of our program. Over 5,000 athletes
from 44 countries, including over 600 Techcombank
employees, participated in the 10km, half-marathon
(21km) and marathon (42km) categories. The event was
an overwhelming success. Additionally, over 300 child
athletes participated in the Kids Run event one day prior
to the Marathon (25 November 2017).
One particular athlete participating in the 2017 HCMC-Techcombank International
Marathon, Miles Hilton Barber, is an inspiration to all. He is not only visually
impaired, but a world-famous inspirational speaker. At the age of 69, Miles has
never stopped challenging his personal limits to realize his seemingly impossible
goals. Despite his impaired vision, Miles has completed many physically
demanding challenges, including running 241km through the Sahara, pulling
sleds across more than 400km in Antarctica, and successfully conquering the
summits of Mount Kilimanjaro (the highest mountain in Africa) and of Mont Blanc
(the highest mountain in Europe).
A day before the Marathon, Miles spoke for over
an hour in the Empire City urban development
of Thu Thiem, District 2, HCMC, to share
his aspirations with participating runners
and their families and friends. Miles said:
“Everyone needs to live with dreams. The only
limit to what you can do is your acceptance.
However, the limit is personal and the success
comes only when individuals overcome their
limits to live a more meaningful life. “

“Every person, every organization should

always try to overcome their limits” is also the
reason why Techcombank wants to highlight
the annual Ho Chi Minh City- Techcombank
International Marathon as a valuable spiritual
asset of the HCMC people and sports lovers for
many years to come. Because, the marathon
is not just a running track, but a place to
THROUGH THE HCMC MARATHON,
challenge yourself, pushing you forward.
TECHCOMBANK WISHES TO CONVEY THE
CORE VALUES THAT ARE WOVEN INTO Conquering long distances requires training,
THE DNA OF THE BANK TO THE PEOPLE planning and persistence. The same is
required from Techcombank in its journey
OF VIETNAM: PERSISTENCE, PHYSICAL
to becoming number one in the banking
EXCELLENCE, OPTIMISM, AND THE WILL TO industry in Vietnam.
BREAK BOUNDARIES.

104 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 105
 Plan for
THE FUTURE
TECHCOMBANK IS PUTTING GREAT EMPHASIS
ON TECHNOLOGY FOR THE FUTURE. OVER THE
COMING YEARS, THE BANK PLANS TO STRENGTHEN
ITS DIGITAL ASSETS, ENHANCE SECURITY
AND OPTIMIZE OPERATIONS. TECHCOMBANK
WANTS TO CREATE A MODERN TECHNOLOGY
INFRASTRUCTURE, WHILE ENSURING THE
SUSTAINABILITY OF THE SYSTEM AND
MAINTAINING THE TRUST OF CUSTOMERS.

106 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 107
PLAN FOR THE FUTURE

2018
and the legal framework for dealing with bad
debts and collateralized assets is becoming more
supportive. These are favorable conditions required

expectations for the development of banks in general, and

Techcombank in particular. In addition, competition
will also increase, not only from traditional rivals at
home and abroad, but also digital banks and new
TECHCOMBANK WILL DEEPEN ITS financial technology (fintech) businesses. This poses
UNDERSTANDING OF CUSTOMERS a significant challenge for Techcombank in 2018.

AND OPTIMIZE PRODUCTS In that context, Techcombank will continue to focus

on quality development to overcome challenges
AND SERVICES IN LINE WITH and take advantage of opportunities in 2018.
THEIR NEEDS. THE BANK WILL Techcombank will focus resources to implement
Phase 2 of the Transformation Program aimed at
UPHOLD ITS COMMITMENT TO consolidating and improving the Bank, improving
team capacity, optimizing key processes, and
DELIVER EXCEPTIONAL CUSTOMER building and improving core systems.
EXPERIENCE AND VALUE TO ITS
These initiatives will help Techcombank identify
MILLIONS OF CUSTOMERS AND and develop appropriate business models for
customers along the value chain and across the
BRING OUTSTANDING BENEFITS ecosystem, thereby providing superior banking
TO SHAREHOLDERS. solutions to become a trusted partner of the leaders
2018 IS AN IMPORTANT YEAR FOR TECHCOMBANK. and chief financial officers of corporate customers.

2018
THE BANK IS HALFWAY THROUGH IMPLEMENTING Techcombank will become a technology-based

1
ITS 2016-2020 STRATEGY WHICH SEEKS TO
EXECUTE MEANINGFUL TRANSFORMATION, DELIVER
BREAKTHROUGH IN BUILDING CAPACITY AND
is an important year organization, transforming the workforce and
for Techcombank. The strengthening corporate culture.
Bank is halfway through
implementing its 2016-2020 strategy which seeks With these resolutions, Techcombank expects 2018

POSITION
BUSINESS DEVELOPMENT AND to execute meaningful transformation, deliver to be another successful year, with revenue and
breakthrough in building capacity and business profit growth maintaining at a high level, and cost to
development and position techcombank as the income ratio (CIR) and provision expense continuing

TECHCOMBANK number 1 bank in Vietnam.

The future looks good. Based on promising

to improve. More importantly, Techcombank will
deepen its understanding of customers and optimize

AS THE NUMBER
products and services in line with their needs. The
macroeconomic indicators and Government Bank will continue to improve working conditions

VIETNAM
incentive policies that will continue to stimulate the and boost the performance of the thousands of its
BANK
economy, Techcombank’s operations have a strong loyal employees while upholding its commitment to
foundation for growth. deliver exceptional customer experience and value
IN GDP is in a high growth cycle and improved business
to its millions of customers and bring outstanding
benefits to shareholders.
conditions lead to higher incomes and a rising
number of enterprises. Accordingly, the demand
for banking products and services will continue
to increase. The exchange rate remains stable,

108 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 109
PLAN FOR THE FUTURE
Digital banking:
Reality today, not tomorrow
A
ccording to Nielsen's 2017 Vietnam
Smartphone Insights Report, the
.percentage of smartphone users
in Vietnam in 2017 was 84%, an increase of
6% from the previous year. More notably, in
rural areas, 68% of the population now use
smartphones.
The above figures show an impressive
trend – the ubiquity of smartphones and
tablets. Habits and behaviors of people
in all regions, of all classes and ages are
changing. Online services, whether for
shopping, making friends, exchanging
information, or dating, are becoming more
popular. The Banking sector is no different.
Users expect to be able to access and use
banking services at any time, anywhere and
on any device.
110 ANNUAL REPORT 2017
Each bank has its own approach to digital
banking, which focuses on the customer
experience or the ability to provide online
services. However, these options can
only be successful when delivering the
best value to the customer. Right from
the start, Techcombank has focused on
technology, believing it to be the best
way to serve customers and promote
business development. During 24 years of
operation, Techcombank has continuously
strengthened its systems and capacity
to best meet the needs of customers. In
recent years, Techcombank’s application
of technology has delivered remarkable
progress, creating breakthroughs to
improve operational efficiency and
customer satisfaction.
Identifying “Data Excellence” and
“Operation Excellence” as the key
foundations of the “Customer-centric”
strategy, the Bank has implemented a
number of projects to automate processes,
develop online transaction channels,
and improve the quality of products and
services to focus on customer experience
and ensure data security. In 2017,
Techcombank focused on upgrading
its data and analytical capabilities. This
equips the Bank to understand customers
and to make accurate, quick, and safer loan
decisions.
In addition to this, the Bank’s integrated
mobile and internet banking platform is
highly valued by customers for its user-
friendly interface – winning awards in
electronic banking. Techcombank’s digital
banking system allows customers to
use 24/7 banking facilities, support their
financial needs anytime and anywhere,
saving their time and energy. It also allows
employees to focus on providing customers
with more complex, valuable services that
improve their lives.
IN 2017, THE NUMBER OF
E-BANKING CUSTOMERS
INCREASED BY 73.2%
AND THE VOLUME OF
TRANSACTIONS VIA
ELECTRONIC CHANNELS
INCREASED BY 128%,
REFLECTING CUSTOMERS’
POSITIVE EXPERIENCES
WHEN USING THE BANK’S
DIGITAL SERVICES.
ENABLING FINANCIAL SUCCESS & SECURITY 111
PLAN FOR THE FUTURE

DIGITAL BANKING: REALITY TODAY, NOT TOMORROW (continued)

In addition, Techcombank applied

international standards for information
security, which meant synchronized
information security measures for
people, equipment, systems, policies and
technology solutions. The Bank is capable
of immediately detecting system attacks
as well as data breaches and is able to
respond promptly. Human resources
have been equipped with knowledge and
training in accordance with international
best-practice standards and with the

FINANCIAL REPORT
support of international advisors. This
timely investment allowed Techcombank
to continue to be a pioneering bank in
Vietnam for 2017, while maintaining two
of the world’s leading IS certifications,
ISO27001: 2013 and PCI DSS 3.2.

As technology affects every aspect

of life, the development of artificial
intelligence, big data, and the growing
competition from financial technology
(fintech) companies, the supply of
banking products and services will have
to undergo major changes and banks will
be required to continually innovate and
update their technology to stay abreast
with trends. Techcombank not only
chooses to “accept” the need to advance
technology, but strives to be a leader,
setting the standards for digital banking in
Vietnam. In fact, the Bank has introduced
new technology applications into banking operations, Techcombank aims to create
activities, such as approving credit based a modern technology infrastructure, while
on big data, checking data automatically ensuring the sustainability of the system
and so on. and creating trust with customers.
With a large-scale investment in its
technology platform and a focus on
strengthening digital assets as well as
enhancing security and optimizing

112 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 113
GENERAL INFORMATION

BOARD OF MANAGEMENT

Members of the Board of Management of the Bank for the year ended 31 December 2017 and until the date of these consolidated financial
THE BANK statements are as follows:
Vietnam Technological and Commercial Joint Stock Bank (“the Bank”) is a commercial joint stock bank registered and incorporated in the
Socialist Republic of Vietnam. Name Position

The Bank was incorporated pursuant to Business License No. 0040/NH-GP issued by the Governor of the State Bank of Vietnam (“the SBV”) Chief Executive Officer
Mr. Nguyen Le Quoc Anh
on 6 August 1993 and Business Registration Certificate No. 0100230800 issued by the Hanoi Department of Planning and Investment on 28 Head of Strategy and Corporate Development (until 12 August 2017)
December 2017. The operating duration was extended to 99 years under Decision No. 330/QD-NH5 issued by the SBV on 8 October 1997. Mr. Do Tuan Anh Deputy Chief Executive Officer
Mr. Trinh Bang Group Chief Finance Officer (from 25 January 2018)
The principal activities of the Bank are mobilizing and receiving short-, medium- and long-term deposit funds from organizations and Mr. Pham Quang Thang Deputy Chief Executive Officer cum Head of COM and Legal Division
individuals, lending on short-, medium- and long-term bases up to the nature and ability of the Bank’s capital resources, conducting
Mr. Le Ba Dung Head of Risk Management
settlement and cash services and other banking services as approved by the SBV, conducting investments in subsidiaries, associates, joint-
ventures, bonds and other companies and dealing in foreign exchange in accordance with applicable regulations. Deputy Chief Executive Officer (from 1 March 2017 to 19 May 2017)
Mr. Nguyen Canh Vinh
Head of Wholesale Banking (until 28 February 2017)
BOARD OF DIRECTORS Ms. Tran Thi Minh Lan Head of Strategy and Corporate Development (from 14 August 2017)
Mr. Chester Gorski Head of IT and Operations
Members of the Board of Directors of the Bank for the year ended 31 December 2017 and until the date of these consolidated financial Ms. Nguyen Huong Giang Head of Transaction Banking (from 3 July 2017)
statements are as follows:
Mr. Vu Minh Truong Head of Treasury and Financial Markets
Mr. Phung Quang Hung Head of Sales and Distribution
Name Position Ms. Pham Vu Minh Dan Head of Human Resources
Mr. Ho Hung Anh Chairman Ms. Le Thi Bich Phuong Head of Personal Financial Services
Ms. Nguyen Thi Van Anh Head of Marketing and Branding
Mr. Nguyen Dang Quang The first Vice Chairman
Mr. Chung Ba Phuong Head of Insurance Division (from 7 August 2017)
Mr. Nguyen Thieu Quang Vice Chairman
Mr. Ashish Sharma Transformation Director – Transformation Office (from 19 June 2017)
Mr. Nguyen Canh Son Vice Chairman Transformation Director – Transaction Banking (from 3 July 2017)
Mr. Phan Thanh Son
Mr. Do Tuan Anh Vice Chairman Head of Transaction Banking (until 2 July 2017)
Mr. Lee Boon Huat Member Ms. Phan Thi Thanh Binh Transformation Director – Wholesale Banking (from 26 July 2017)
Mr. Nguyen Doan Hung Independent Member Mr. Chan Jonathan Chung Ming Transformation Director – Personal Financial Services (from 1 December 2017)

BOARD OF SUPERVISION LEGAL REPRESENTATIVE

Members of the Board of Supervision of the Bank for the year ended 31 December 2017 and until the date of these consolidated financial The legal representative of the Bank for the year ended 31 December 2017 and until the date of these consolidated financial statements is
statements are as follows: Mr. Ho Hung Anh, the Chairman.

Mr. Nguyen Le Quoc Anh is authorized by Mr. Ho Hung Anh to sign off on reports/documents related to managing the operation of the Bank
Name Position which comprise the accompanying consolidated financial statements for the year ended 31 December 2017 in accordance with Decision No.
0312/UQ-HDQT dated 25 February 2016.
Mr. Hoang Huy Trung Head of Board of Supervision cum Member in charge
Mr. Mag Rec Soc Oec Romauch Hannes Member AUDITORS
Ms. Nguyen Thu Hien Member in charge
The auditor of the Bank is Ernst & Young Vietnam Limited.
Ms. Bui Thi Hong Mai Member

114 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 115
 REPORT OF THE BOARD OF MANAGEMENT Reference: 60899747/19428498-HN
INDEPENDENT AUDITORS’ REPORT

The Board of Management of Vietnam Technological and Commercial Joint Stock Bank (“the Bank”) is pleased to present its report and the
consolidated financial statements of the Bank and its subsidiaries for the year ended 31 December 2017.
To: The Shareholders of
MANAGEMENT’S RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS Vietnam Technological and Commercial Joint Stock Bank

The Board of Management of the Bank is responsible for the consolidated financial statements of each financial year which give a true and
fair view of the consolidated financial position of the Bank and its subsidiaries and of the consolidated results of their operations and their
consolidated cash flows for the year. In preparing those consolidated financial statements, the Board of Management is required to:
»» select suitable accounting policies and then apply them consistently;
»» make judgments and estimates that are reasonable and prudent;
»» state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the
consolidated financial statements; and
»» prepare the consolidated financial statements on the going concern basis unless it is inappropriate to presume that the Bank and its
subsidiaries will continue its business.
The Board of Management of the Bank is responsible for ensuring that proper accounting records are kept which disclose, with reasonable
accuracy at any time, the consolidated financial position of the Bank and ensuring that the accounting records comply with the applied
accounting system. It is also responsible for safeguarding the assets of the Bank and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The Board of Management of the Bank confirmed that it has complied with the above requirements in preparing the accompanying
consolidated financial statements.
We have audited the accompanying consolidated financial statements of Vietnam Technological and Commercial Joint Stock Bank (“the
Bank”) and its subsidiaries, as prepared on 9 February 2018 and set out on pages 119 to 201 which comprise the consolidated balance sheet
as at 31 December 2017, and the consolidated income statement and the consolidated cash flow statement for the year then ended and the
notes thereto.
MANAGEMENT’S RESPONSIBILITY
The Bank’s Board of Management is responsible for the preparation and fair presentation of these consolidated financial statements in
accordance with Vietnamese Accounting Standards, Vietnamese Accounting System for Credit Institutions, regulations stipulated by the
State Bank of Vietnam and the statutory requirements relevant to the preparation and presentation of the consolidated financial statements,
and for such internal control as the Board of Management determines is necessary to enable the preparation and presentation of the
consolidated financial 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 financial 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 financial statements are free from material misstatement.

STATEMENT BY THE BOARD OF MANAGEMENT
The Board of Management does hereby state that, in its opinion, the accompanying consolidated financial statements give a true and fair
view of the consolidated financial position of the Bank and its subsidiaries as of 31 December 2017, and of the consolidated results of their
operations and their consolidated cash flows for the year then ended in accordance with Vietnamese Accounting Standards, Vietnamese
Accounting System for Credit Institutions, regulations stipulated by the State Bank of Vietnam and statutory requirements relevant to
preparation and presentation of consolidated financial statements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement
of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal
control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by management, as well as evaluating the overall presentation of the consolidated financial statements.

For and on behalf of the Board of Management: We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Mr. NGUYEN LE QUOC ANH

Chief Executive Officer
Hanoi, Vietnam, 9 February 2018

116 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 117
Reference: 60899747/19428498-HN
INDEPENDENT AUDITORS’ REPORT (continued) CONSOLIDATED BALANCE SHEET
as at 31 December 2017 B02/TCTD-HN

31 December 2017 31 December 2016

Notes
OPINION VND million VND million
ASSETS
In our opinion, the consolidated financial statements give a true and fair view, in all material respects, of the consolidated financial position
of the Bank and its subsidiaries as at 31 December 2017, and of the consolidated results of their operations and their consolidated cash Cash and gold 5 2,344,362 2,956,708
flows for the year then ended in accordance with Vietnamese Accounting Standards, Vietnamese Accounting System for Credit Institutions, Balances with the State Bank of Vietnam 6 4,279,431 2,533,875
regulations stipulated by the State Bank of Vietnam and statutory requirements relevant to preparation and presentation of the consolidated
Balances with and loans to other credit institutions 7 30,155,807 21,598,874
financial statements.
Balances with other credit institutions 7.1 16,243,054 9,058,942
Ernst & Young Vietnam Limited Loans to other credit institutions 7.2 13,912,753 12,539,932
Securities held-for-trading 8 6,758,094 8,024,620
Securities held-for-trading 6,775,118 8,035,905
Provision for securities held-for-trading (17,024) (11,285)
Derivatives and other financial assets 20 36,292 -
Loans to customers 158,964,456 141,120,529
Loans to customers 9 160,849,037 142,616,004
Provision for loans to customers 10 (1,884,581) (1,495,475)
Debts purchased 11 10,332 18,493
DANG PHUONG HA TRAN THI THU HIEN
Deputy General Director Auditor Debts purchased 12,092 19,466
Audit Practising Registration Audit Practising Registration Provision for debts purchased (1,760) (973)
Certificate No. 2400-2018-004-1 Certificate No. 2487-2018-004-1 Investment securities 12 51,542,484 45,674,924
Hanoi, Vietnam, 9 February 2018
Available-for-sale securities 46,018,398 38,575,369
Held-to-maturity securities 5,715,484 8,560,113
Provision for investment securities (191,398) (1,460,558)
Long-term investments 13 9,683 577,746
Other long-term investments 12,084 582,672
Provision for long-term investments (2,401) (4,926)

118 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 119
CONSOLIDATED BALANCE SHEET (continued)
as at 31 December 2017

31 December 2017 31 December 2016 31 December 2017 31 December 2016

Notes Notes
VND million VND million VND million VND million
Fixed assets 14 1,511,446 1,582,722 LIABILITIES
Tangible fixed assets 14.1 569,789 576,836 Borrowings from the Government and the State Bank of Vietnam 17 1,000,000 1,447,970
Cost 1,602,956 1,518,287 Deposits and borrowings from other credit institutions 18 46,323,825 25,473,509
Accumulated depreciation (1,033,167) (941,451) Deposits from other credit institutions 18.1 21,274,375 15,114,917
Intangible fixed assets 14.2 941,657 1,005,886 Borrowings from other credit institutions 18.2 25,049,450 10,358,592
Cost 1,449,616 1,423,050 Deposits from customers 19 170,970,833 173,448,929
Accumulated amortization (507,959) (417,164) Derivatives and other financial liabilities 20 - 67,892
Investment property 15 1,238,030 1,278,536 Valuable papers issued 21 17,639,970 10,414,842
Cost 1,442,827 1,447,256 Other liabilities 22 6,527,007 4,923,518
Accumulated amortization (204,797) (168,720) Accrued interest and fees payable 2,764,162 2,195,582
Other assets 16 12,541,963 9,996,109 Other liabilities 3,762,845 2,727,936
Receivables 9,417,589 6,829,557 TOTAL LIABILITIES 242,461,635 215,776,660
Accrued interest and fees receivable 3,876,528 3,992,328
Deferred tax assets 1,773 27,659
Other assets 557,642 650,888 SHAREHOLDERS’ EQUITY
In which: Goodwill 19,765 29,647
Share capital 9,777,116 8,878,079
Provision for other assets (1,311,569) (1,504,323)
Charter capital 11,655,307 8,878,079
TOTAL ASSETS 269,392,380 235,363,136
Share premium 2,165,058 -
Treasury shares (4,043,249) -
Reserves 6,156,928 5,219,182
Retained earnings 10,996,701 5,489,215
TOTAL SHAREHOLDERS’ EQUITY 24 26,930,745 19,586,476
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 269,392,380 235,363,136

120 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 121
CONSOLIDATED BALANCE SHEET (continued) CONSOLIDATED INCOME STATEMENT
as at 31 December 2017 for the year ended 31 December 2017 B03/TCTD-HN

2017 2016
CONSOLIDATED OFF-BALANCE SHEET ITEMS Notes
VND million VND million
Interest and similar income 25 17,594,504 15,736,077
31 December 2017 31 December 2016 Interest and similar expenses 26 (8,664,092) (7,593,856)
Notes
VND million VND million Net interest and similar income 8,930,412 8,142,221
Contingent liabilities Fees and commission income 4,519,685 2,558,990
Guarantees for borrowings 8,558 6,547 Fees and commission expenses (707,783) (603,226)
Commitments for currencies contracts 121,109,669 55,015,026 Net fees and commission income 27 3,811,902 1,955,764
- Commitments to buy foreign currencies 2,911,065 1,895,364 Net gain from trading foreign currencies 28 278,585 240,201
Net gain from securities held-for-trading 29 396,730 124,780
- Commitments to sell foreign currencies 5,440,635 598,543
Net gain from investment securities 30 855,760 481,457
- Commitments for currency swap contracts 20 112,757,969 52,521,119
Other income 1,963,425 1,567,677
Letters of Credit 9,366,321 9,651,241
Other expenses (248,534) (679,417)
Other guarantees 16,001,135 11,731,082 Net gain from other operating activities 31 1,714,891 888,260
Valuable papers forward commitments 9,638,324 14,303,477 Income from investments in other entities 32 355,526 470
Other commitments 23,045,517 9,545,202 Total operating income 16,343,806 11,833,153
179,169,524 100,252,575 Operating expenses 33 (4,698,283) (4,175,422)
Profit before provision for credit losses 11,645,523 7,657,731
Provision expenses for credit losses 34 (3,609,226) (3,661,091)
Profit before tax 8,036,297 3,996,640
Prepared by: Approved by: Approved by: Current corporate income tax expenses 23.1 (1,564,816) (872,808)
Deferred corporate income tax benefit/(expenses) 23.3 (25,886) 25,014
Corporate income tax expenses (1,590,702) (847,794)
Profit after tax 6,445,595 3,148,846
Basic earnings per share (VND/share) 35 7,719 3,525
Diluted earnings per share (VND/share) 35 (*) 2,929
(*) As at 31 December 2017, basic earnings per share of the Bank are not affected by dilution factors.

Ms. BUI THI KHANH VAN Ms. THAI HA LINH Mr. NGUYEN LE QUOC ANH Prepared by: Approved by: Approved by:
Chief Accountant Director of Accounting, Chief Executive Officer
Financial Policy and Tax,
Finance and Planning Division
Hanoi, Vietnam, 9 February 2018

Ms. BUI THI KHANH VAN Ms. THAI HA LINH Mr. NGUYEN LE QUOC ANH
Chief Accountant Director of Accounting, Chief Executive Officer
Financial Policy and Tax,
Hanoi, Vietnam, 9 February 2018 Finance and Planning Division
122 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 123
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2017 B04/TCTD-HN

2017 2016 2017 2016

Notes Notes
VND million VND million VND million VND million

CASH FLOWS FROM OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES
Interest and similar receipts 17,710,304 14,790,288 Payments for purchases of fixed assets (175,815) (941,512)
Interest and similar payments (8,095,512) (7,484,939) Proceeds from disposals of fixed assets 5,795 2,303
Net fees and commission receipts 3,747,154 1,955,764 Payments for disposals of fixed assets (717) (1,189)
Net receipts from trading activities (foreign currencies and securities) 1,635,194 834,851 Proceeds from investments in other entities 925,780 18,558
Other income receipts 598,071 484,065 Dividends received from long-term investments 334 470
Recoveries from loans written off previously 31 1,116,820 404,195 Net cash flows from/(used in) investing activities 755,377 (921,370)
Operating and salary expenses payments (4,168,108) (3,407,938)
Current income taxation paid for the year 23.1 (1,034,529) (721,092)
Net cash flows from operating activities before changes in operating assets 2017 2016
11,509,394 6,855,194 Notes
and liabilities VND million VND million
Changes in operating assets CASH FLOWS FROM FINANCING ACTIVITIES
Increase in balance with and loans to other credit institutions (1,202,041) (5,459,376) Increase of capital from issuance of shares 2,099,999 -
Increase in securities held-for-trading (3,337,613) (7,140,332) Proceeds from long-term valuable papers issued classified into owner’s
2,708,164 2,127
equity and other long-term loans
Increase derivatives instrument and other financial assets (36,292) -
Payments for treasury shares (4,043,249) -
Increase in loans to customers (18,233,033) (30,436,115)
Net cash flows from financing activities 764,914 2,127
Use of provision to write off loans, securities, long-term investments, receivables (4,779,696) (4,108,625)
Net cash flows for the year 8,488,102 1,435,927
(Increase)/decrease in other operating assets (2,472,881) 3,134,746
Cash and cash equivalents at the beginning of the year 14,193,097 12,757,170
Changes in operating liabilities
Increase/(decrease) in borrowings from the Government and the Cash and cash equivalents at the end of the year 36 22,681,199 14,193,097
(447,970) 1,447,970
State Bank of Vietnam
Increase in deposits and borrowings from other credit institutions 20,850,316 4,391,098 Prepared by: Approved by: Approved by:

Increase/(decrease) in deposits from customers (2,478,096) 31,209,383

Increase in valuable papers issued (excluding valuable paper issued classified
7,359,251 2,278,819
into financing activities)
Decrease in derivatives and other financial liabilities (67,892) (17,999)
Increase in other liabilities 304,627 200,534
Payments from reserves (263) (127)
Net cash flows from operating activities 6,967,811 2,355,170
Ms. BUI THI KHANH VAN Ms. THAI HA LINH Mr. NGUYEN LE QUOC ANH
Chief Accountant Director of Accounting, Chief Executive Officer
Financial Policy and Tax,
Hanoi, Vietnam, 9 February 2018 Finance and Planning Division

124 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 125
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as at 31 December 2017 and for the year then ended B05/TCTD-HN
Employees

1. GENERAL INFORMATION As of 31 December 2017, the Bank has 8,766 employees (31 December 2016: 7,787 employees).

Vietnam Technological and Commercial Joint Stock Bank (“the Bank”) is a commercial joint stock bank registered and incorporated 2. ACCOUNTING PERIOD AND CURRENCY
in the Socialist Republic of Vietnam.
2.1 Accounting period
Establishment and Operations
The annual accounting period of the Bank starts on 1 January and ends on 31 December.
The Bank was incorporated pursuant to Business License No. 0040/NH-GP issued by the Governor of the State Bank of Vietnam
(“SBV”) on 6 August 1993 and Business Registration Certificate No. 0100230800 issued by the Hanoi Department of Planning and 2.2 Accounting currency
Investment on 28 December 2017. The operating duration was extended to 99 years under the Decision No. 330/QD-NH5 issued by
the SBV on 8 October 1997. Currency used in accounting of the Bank is Vietnam dong (“VND”) and is rounded to the nearest VND million for presentation of
consolidated financial statements.
The principal activities of the Bank are mobilizing and receiving short-, medium- and long-term deposit funds from organizations and
individuals, lending on short-, medium- and long-term bases up to the nature and ability of the Bank’s capital resources, conducting 3. APPLIED ACCOUNTING STANDARDS AND SYSTEM
settlement and cash services and other banking services as approved by the SBV, conducting investments in subsidiaries, associates,
joint-ventures, bonds and other companies and dealing in foreign exchange in accordance with applicable regulations. 3.1 Statement of compliance

Charter capital The Board of Management of the Bank confirmed that it has complied with Vietnamese Accounting Standards, Vietnamese
Accounting System for Credit Institutions, regulations stipulated by the State Bank of Vietnam and statutory requirements relevant
As of 31 December 2017, the charter capital of the Bank is VND 11,655,307,200,000 (31 December 2016: VND 8,878,078,710,000). to preparation and presentation of consolidated financial statements.

Network Accordingly, the accompanying consolidated balance sheet, the consolidated income statement, the consolidated cash flow
statement and notes to the consolidated financial statements, including their utilization are not designed for those who are not
The Bank’s Head Office is located at 191 Ba Trieu, Hai Ba Trung District, Hanoi. As at 31 December 2017, the Bank has one (1) Head informed about Vietnam’s accounting principles, procedures and practices and furthermore are not intended to present the
Office, two (2) representative offices, three hundred and twelve (312) transaction offices nationwide and four (4) subsidiaries. consolidated financial position of the Bank and its subsidiaries, the consolidated result of their operations and their consolidated
cash flows in accordance with accounting principles and practices generally accepted in countries other than Vietnam.
Subsidiaries
3.2 Basis of preparation
As of 31 December 2017, the Bank has four (4) subsidiaries as follows:
The consolidated financial statements are prepared in accordance with the Accounting System for Credit Institutions
% owned by required under Decision No. 479/2004/QD-NHNN issued on 29 April 2004 by the SBV Governor which was enacted from
No. Name Business License No. Industry 1 January 2005 and Circular No. 10/2014/TT-NHNN dated 20 March 2014 supplementing and amending Decision No.
the Bank
479/2004/QD-NHNN, Decision No. 16/2007/QD-NHNN issued on 18 April 2007, Circular No. 49/2014/TT-NHNN on amending
98/UBCK-GP, dated 18 September and supplementing some articles regarding the financial reporting regime for credit institutions issued accompanying
1 Techcom Securities Company Limited 2008 granted by the State Securities Securities activities 100% Decision No. 16/2007/QD-NHNN, and Vietnamese Accounting Standards issued by the Ministry of Finance as per:
Commission
Vietnam Technological and 0104003519 dated 18 June 2008 »» Decision No.149/2001/QD-BTC dated 31 December 2001 on the Issuance and Promulgation of Four Vietnamese Standards on
Debt and asset
2 Commercial Joint Stock Bank – Asset granted by the Hanoi Department of 100% Accounting (series 1);
management
Management Company Limited Planning and Investment »» Decision No.165/2002/QD-BTC dated 31 December 2002 on the Issuance and Promulgation of Six Vietnamese Standards on
40/UBCK-GP dated 21 October 2008 Accounting (series 2);
Techcom Capital Management »» Decision No. 234/2003/QD-BTC dated 30 December 2003 on the Issuance and Promulgation of Six Vietnamese Standards on
3 granted by the State Securities Fund management 100%
Company Limited Accounting (series 3);
Commission
»» Decision No.12/2005/QD-BTC dated 15 February 2005 on the Issuance and Promulgation of Six Vietnamese Standards on
Technological and Commercial 340/GP-NHNN by the State Bank of Accounting (series 4); and
4 Finance – Credit 100%
Finance Company Limited Vietnam dated 29 December 2008 »» Decision No.100/2005/QD-BTC dated 28 December 2005 on the Issuance and Promulgation of Four Vietnamese Standards on
Accounting (series 5).
126 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 127
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN
3. APPLIED ACCOUNTING STANDARDS AND SYSTEM (continued)
3.3 Basic of consolidation
The consolidated financial statements comprise the financial statements of the Bank and its subsidiaries for the year ended 31
December 2017. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Bank obtains control,
and continued to be consolidated until the date that such control ceases.
The financial statements of subsidiaries are prepared for the same reporting year as the parent company, using consistent
accounting policies.
All intra-company balances, income and expenses and unrealized gains or losses resulting from intra-company transactions are
eliminated in full.
3.4 Basis of assumptions and uses of estimates
The preparation of the consolidated financial statements requires the Board of Management to make estimates and assumptions
that affect the reported amount of assets and liabilities and disclosure of contingent liabilities. These estimates and assumptions
also affect the income, expenses and the resultant provisions. Therefore, such estimates are necessarily based on assumptions
involving varying degrees of subjectivity and uncertainty and actual results may differ resulting in future changes in such provision.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
4.1 Change in accounting policies and disclosures
4.1.1 Changes in accounting policies for the year
The accounting policies adopted by the Bank in preparation of the consolidated financial statements are consistent with those
followed in the preparation of the Bank’s consolidated financial statements for the year ended 31 December 2016, except for the
following changes in the accounting policies.
Decree No. 93/2017/ND-CP on financial regime applicable to credit institutions, foreign bank branches and financial supervision and
evaluation of efficiency of State capital investment at credit institutions with State owning 100% of charter capital and State-owned
credit institutions.
On 7 August 2017, the Government promulgated Decree No. 93/2017/ND-CP on the financial regime applicable to credit institutions,
foreign bank branches, and financial supervision and efficiency evaluation of State capital investment in credit institutions with
State owning 100% of charter capital and State-owned credit institutions (“Decree 93”). Decree 93 replaces Decree No. 57/2012/
ND-CP dated 20 July 2012 of the Government, and takes effect on 25 September 2017, except for regulations on the efficiency
evaluation of State investment in joint-stock credit institutions with State owning over 50% of charter capital.
Decree 93 supplements the regulations on capital adequacy, income, expenses, accounting currency and the distribution order of
profit after corporate income tax.
128 ANNUAL REPORT 2017
Circular No. 39/2016/TT-NHNN on lending activities to customers of credit institutions and foreign bank branches
On 30 December 2016, the State Bank of Vietnam (“SBV”) issued Circular No. 39/2016/TT-NHNN on lending activities to customers
of credit institutions and foreign bank branches, which has taken effect from 15 March 2017.
4.1.2 Accounting policies issued but not effective
On 29 December 2017, the SBV issued Circular No. 22/2017/TT-NHNN amending and supplementing a number of articles of chart
of account system applicable to credit institutions issued in connection with Decision No. 479/2004/QD-NHNN dated 29 April 2004
and the financial reporting regime applicable to credit institutions required under Decision No. 16/2007/QD-NHNN dated 18 April
2007 by the Governor of the SBV (“Circular 22”).
Circular 22 includes the following amendments:
»» Amending and supplementing the guidances on the accounting treatment for foreign exchange and gold transactions;
»» Amending a few accounts in the chart of account system applicable to credit institutions;
»» Amending the guidances on the accounting treatment for some accounts in the chart of account system applicable to credit
institutions; and
»» Amending and supplementing the guidances on the financial reporting regime applicable to credit institutions.
Circular 22 will take effect on 1 April 2018.
4.2 Cash and cash equivalents
Cash and cash equivalents comprise cash, gold, balances with the SBV, Treasury bills and other short-term valuable papers eligible
for rediscount with the SBV; balances with other credit institutions that have maturity of three months or less from the transaction
date and securities with recovery or maturity of three months or less from date of purchase.
4.3 Balances with and loans to other credit institutions
Deposits and loans to other credit institutions are stated at historical cost. The classification of credit risks for balances with and
loans to other credit institutions and the corresponding provision are made in accordance with Circular No. 02/2013/TT-NHNN
issued by the SBV on 21 January 2013 on asset classification, risk provisioning and use of provision against credit risks by credit
institutions and foreign bank branches (“Circular 02”) and Circular No. 09/2014/TT-NHNN issued by the SBV on 18 March 2014
amending and supplementing a number of articles of Circular 02 (“Circular 09”).
Accordingly, the Bank is required to make specific provision for balances with (except for current accounts) and loans to other
credit institutions as described in Note 4.6.
According to Circular 02, the Bank is not required to make general provision for balances with and loans to other credit institutions.
ENABLING FINANCIAL SUCCESS & SECURITY 129
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 4.6 Asset classification and provisioning rate, risk provisioning for balances with and loans to other credit institutions, investments
and trusted investments in non-listed corporate bonds, loans to customers and entrustments for credit granting
4.4 Securities held for trading
Asset classification for balances with and loans to other credit institutions, investments and trusted investments in non-listed
4.4.1 Classification and recognition corporate bonds, loans to customers and entrustments for credit granting (here refer as “debts”) is made by the quantitative
method as regulated under Article 10 of Circular 02.
Securities held for trading include debt securities acquired and held for resale. Securities held for trading are initially recognized at cost.
Specific provision as at 31 December is made based on the outstanding principal balance less discounted value of collateral
4.4.2 Measurement multiplied by provision rates which are determined based on the loan classifications as at 30 November. The basis to determine
the value and discounted value for each type of collateral is specified in Circular 02.
Listed debt securities held-for-trading are stated at cost less provision for impairment in the value by reference to the yield curve
listed at the Hanoi Stock Exchange at reporting date. Loans classification and rates for specific provision for each group are presented as follows:

Debt securities held-for-trading which are unlisted corporate bonds are stated at cost less provision for credit risk as stipulated in
Group Description Provision rate
Circular 02 and Circular 09 as described in Note 4.6.
(a) Current debts that being assessed as fully and timely recoverable, both
Provision for impairment of securities held-for-trading as described above is reversed when the subsequent increase in the principals and interests; or
recoverable value of the securities is due to the objective events occurring after the provision is made. The maximum amount to be 1 Current 0%
(b) Debts which are overdue for a period of less than 10 days and being
reversed cannot exceed book value of the securities before making provision.
assessed as fully recoverable, both overdue principals and interests, and
fully and timely recoverable both remaining principals and interests.
Gains or losses from the sales of securities held-for-trading are recognized in the consolidated income statement.
(a) Debts which are overdue for a period of between 10 days and 90 days; or
2 Special mention 5%
4.4.3 De-recognition (b) Debts which have repayment term restructured for the first time.
(a) Debts which are overdue for a period of between 91 days and 180 days; or
Trading securities are derecognized when the rights to receive cash flows from these securities are terminated or the Bank transfers
substantially all the risks and rewards of ownership of these securities. (b) Debts which have repayment term extended for the first time; or
(c) Debts which are exempted or reduced interest because customers do not
4.5 Loans to customers
have sufficient capability to pay all interests under credit contracts; or
Loans to customers are stated at the amount of the outstanding principal less any provision for loans to customers. (d) Debts in one of the following cases have not been recovered in less than 30
days from the date of the decision to collect:
Short-term loans are those with a repayment date within one year of the loan disbursement date. Medium-term loans are those 3 Sub-standard
20%
with repayment date between one to five years of the loan disbursement date. Long-term loans are those with a repayment date »» Debts violating Clause 1, 3, 4, 5, 6 under Article 126 of Law on Credit
of more than five years from the loan disbursement date. Institutions ;
»» Debts violating Clause 1, 2, 3, 4 under Article 127 of Law on Credit
The classification of loans and provision for credit losses are carried out in accordance with Circular 02 and Circular 09 as described Institutions ; or
in Note 4.6. »» Debts violating Clauses 1, 2 and 5 under Article 128 of Law on Credit
Institutions.
(e) Debts which are recovered under inspection conclusions.

130 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 131
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4.6 Asset classification and provisioning rate, risk provisioning for balances with and loans to other credit institutions, investments
and trusted investments in non-listed corporate bonds, loans to customers and entrustments for credit granting (continued)
Group Description
(a) Debts which are overdue for a period of between 181 days and 360 days; or
(b) Debts, which have repayment term restructured for the first time, but still overdue
for a period of less than 90 days under that restructured repayment term; or
(c) Debts which have repayment term restructured for the second time; or
4 Doubtful
(d) Debts which are specified in point (d) of Group 3 that have not been recovered for
a period of between 30 days and 60 days after decisions on recovery have been
issued; or
(e) Debts which must be recovered under inspection conclusions but fail to be repaid
although the recovery term was overdue from 60 days ago.
(a) Debts which are overdue more than 360 days; or
(b) Debts, which have repayment term restructured for the first time, but still overdue
for a period of 90 days or more than under that first restructured repayment term;
or
(c) Debts, which have repayment term restructured for the second time, but still
overdue under that second restructured repayment term; or
(d) Debts, which have repayment term restructured for the third time or whether
5 Loss debts are overdue or not; or
(e) Debts which are specified in point (d) Group 3 that have not been recovered for a
period of more than 60 days after decisions on recovery have been issued; or
(f) Debts which must recovered under inspection conclusions but fail to be repaid
although the recovery term was overdue for more than 60 days; or
(g) Debts of customers being credit institutions which are announced by the State
Bank of Vietnam to place in special control status as announced, or foreign banks’
branches of which capital and assets are blockaded.
Where a customer has more than one debt with the Bank and one of outstanding debts is classified into a higher risk group, the
Bank is required to classify all the remaining debt of such a customer into the higher risk group.
132 ANNUAL REPORT 2017
B05/TCTD-HN
When participating in a syndicated loan as a participant, the Bank classifies loans (including syndicated loans) of the customer into
a higher risk group between the assessment of the leading banks and its own assessment.
In accordance with the requirements of Circular 02, as of 31 December the Bank is also required to make a general provision of
0.75% of total outstanding loans excluding balance with and loans to other credit institutions and excluding any loans classified
into loss loan group as at 30 November.
Provision rate
4.7 Investment securities
4.7.1 Classification
Investment securities include available-for-sale investment securities and held-to-maturity investment securities. The Bank
50% initially recognizes investment securities at cost. The Bank classifies investment securities at purchase date. According to Official
Letter No. 2601/NHNN-TCKT by the SBV dated 14 April 2009 for investment securities, the Bank is allowed to reclassify maximum
only once after purchase.
Held-to-maturity investment securities
Held-to-maturity investment securities are debt securities with fixed maturities and fixed or determinable payments, where the
Bank has the positive intention and ability to hold until maturity.
Available-for-sale investment securities
Available-for-sale investment securities are debt or equity securities which are held for an indefinite period and may be sold at any time.
4.7.2 Recognition
100% The Bank recognizes investment securities on the date that it acquires substantially all the risks and rewards of owning these securities.
4.7.3 Measurement
Equity securities
Listed available-for-sale equity securities are recorded at cost less provision for diminution in value of securities determined on
closing prices of securities from the Ho Chi Minh City Stock Exchange and from the Hanoi Stock Exchange as of the consolidated
balance sheet date.
For unlisted available-for-sale equity securities which are actively traded on the unlisted public company market (“Upcom”),
provision for diminution in value is determined by the average trading price in the market on the reporting date.
ENABLING FINANCIAL SUCCESS & SECURITY 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4.7 Investment securities (continued)
4.7.3 Measurement (continued)
For unlisted available-for-sale equity securities which are not registered on the Upcom, provision for diminution in value is
calculated based on the average quoted prices of three securities companies with their share capital of above VND 300 billions. In
case the quoted prices of three securities companies cannot be obtained, these securities are recorded at cost.
Debt securities
Debt securities are initially stated at cost, including transaction costs and other directly attributable costs. They are subsequently
recognized at amortized cost (affected by premium/discount amortization) less provision for impairment value. Premium and
discounts arising from purchases of debt securities are amortized to the consolidated income statement on a straight-line basis
over the period from the acquisition date to the maturity date.
Post-acquisition interest income of available-for-sale debt securities and held-to-maturity investment securities is recognized in
the consolidated income statement on an accrual basis.
Listed available-for-sale debt securities and held-to-maturity investment securities are measured at cost less provision for
impairment which is determined by reference to the yield curve quoted on Hanoi Stock Exchange at the consolidated balance
sheet date.
For unlisted corporate debt securities, provision for credit risk is determined in accordance with Circular 02 as described in Note 4.6.
For other available-for-sale corporate debt securities and held-to-maturity debt securities: provision for credit risk is determined in
accordance with regulations stipulated in Circular 228/2009/TT-BTC dated 7 December 2009 and Circular N89/2013/TT-BTC dated
28 June 2013.
4.8 Special bonds issued by VAMC
Special bonds issued by VAMC are term valuable papers, which aim to purchase bad debts of the Bank. Special bonds are classified
as held-to-maturity securities and are initially recorded at cost at transaction date and subsequently carried at par value less
provision. Par value of special bonds is equivalent to the value of bad debts sold which is the principal balance net of specific
provision made but not utilized for those debts.
During the period holding special bonds, the Bank is required to make specific provision for special bonds annually in accordance
with requirements of Circular No. 14/2015/TT-NHNN dated 28 August 2015 by SBV amending Circular No. 19/2013/TT-NHNN on the
purchase, sales and resolution of bad debts of VAMC.
Specific provision for each special bond is recognized in the consolidated income statement in “Provision expenses for credit losses”.
General provision is not required for the special bonds.
134 ANNUAL REPORT 2017
4.9 Repurchase and reverse repurchase agreements
Securities sold under agreements to repurchase at a specific date in the future are not derecognized from the consolidated financial
statements. The corresponding cash received is recognized as a borrowing in the consolidated balance sheet. The difference
between the sale price and repurchase price is amortized on a straight line basis to the consolidated income statement over the
term of the agreement.
Conversely, securities purchased under agreements to resell at a specific date in the future are not recognized in the consolidated
financial statements. The corresponding cash payment is recognized as an investment in the consolidated balance sheet and the
difference between the purchase price and resale price is amortized on a straight line basis to the consolidated income statement
over the term of the agreement.
4.10 Long-term investments
4.10.1 Other long-term investments
Other long-term investments are investments in the equity of companies without having control or significant influence over the
investees. These investments are initially stated at cost.
4.10.2 Provision for impairment of long-term investments
Other long-term investments are investments in unlisted shares and their fair value was not able to be determined reliably as at
the reporting date. Therefore, provision for impairment is required for long-term investments when the investee companies suffer
losses, except when the loss was anticipated in their business plan before the date of the investment. Provision for impairment is
determined as the total actual contributed capital of parties to the investee company (par value) less (-) the actual owner’s equity
multiplied (x) by the Bank’s ownership percentage (par value) in the investee company. A provision is reversed only to the extent
that the investment’s carrying amount does not exceed the carrying amount that would have been determined if no provision had
been recognized.
4.11 Tangible fixed assets
4.11.1 Cost
Tangible fixed assets are stated at cost less accumulated depreciation. The initial cost of a tangible fixed asset comprises its
purchase price, including import duties and non-refundable purchase taxes and any directly attributable costs of bringing the
asset to its working condition and location for its intended use, and the cost of dismantling and removing the asset and restoring
the site on which they are located. Expenditure incurred after the tangible fixed assets have been put into operation, such as
repairs and maintenance and overhaul costs, is normally charged to the consolidated income statement for the year in which the
costs are incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future
economic benefits expected to be obtained from the use of an item of tangible fixed assets beyond its originally assessed standard
of performance, the expenditure is capitalized as an additional cost of tangible fixed assets.
ENABLING FINANCIAL SUCCESS & SECURITY 135
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 4.12.3 Other intangible fixed assets

4.11 Tangible fixed assets (continued) Other intangible fixed assets are stated at cost less accumulated amortization. Amortization is computed on a straight line basis
from 4 to 8 years.
4.11.1 Cost (continued)
4.13 Investment property
In case of rental period is 90% and over of the useful life of the assets, the Bank could record renting expense as fixed assets if all
of the following conditions are met simultaneously: 4.13.1 Cost

»» The lessee is not entitled to cancel the lease contract and the lessor has no obligation to repay the amount received in advance Investment property is stated at cost less accumulated depreciation. The initial cost of an investment property comprises its
in all cases and in all forms; purchase price, cost of land use rights and any directly attributable expenditures of bringing the property to the condition necessary
for it to be capable of operating. Expenditure incurred after investment property has been put into operation, such as repairs and
»» The amount received by the lessor in advance is not less than 90% of the total value of renting contract and the lessee must pay
maintenance, is charged to the income statement for the year in which the expenditure is incurred. In situations where it can be
the remaining amount within 12 months from the beginning of the lease;
clearly demonstrated that the expenditure has resulted in future economic benefits in excess of the originally assessed standard
»» Almost all the risks and benefits associated with ownership of the leased asset are transferred to the lessee; of performance of the existing investment property, the expenditure is capitalized as an additional cost of investment property.
»» The lessor must estimate relatively the full cost of the lease.
4.13.2 Depreciation
4.11.2 Depreciation
Depreciation of investment property is computed on a straight-line basis over the estimated useful life of investment property
Depreciation of fixed assets is computed on a straight-line basis over the estimated useful lives of tangible fixed assets which which is as follows:
are as follows: »» Building 10 - 40 years

»» Buildings and building improvements 8 - 50 years 4.14 Operating lease payments

»» Machines and equipment 3 - 10 years
»» Vehicles 6 - 10 years Payments made under operating leases are recognized in the consolidated income statement on a straight-line basis over the
»» Other fixed assets 4 - 10 years term of the lease. Lease incentives received are recognized in the consolidated income statement as an integral part of the total
lease expense.
4.12 Intangible fixed assets
4.15 Other receivables
4.12.1 Computer software
Accounts receivable other than receivables from credit activities of the Bank are initially recognized at cost and subsequently
The cost of acquiring new software, which is not an integral part of the related hardware, is capitalized and treated as an intangible presented at cost less provision.
asset. Software costs are amortized on a straight-line basis from 4 to 8 years.
Receivables are subject to review for impairment based on overdue period from the original maturity date of receivables or
4.12.2 Land use rights estimated loss arising from undue debts which the indebted economic organizations fall bankrupt or are undergoing dissolution
procedures; debtors are missing, have fled, are prosecuted, detained or tried by law enforcement bodies, are serving sentences or
Land use rights comprise: have deceased. Provision expense is recorded in operating expenses for the year.
»» Those acquired in a legitimate transfer; and
»» Rights to use leased land obtained before the effective date of Land Law (2003) for which payments have been made in advance For overdue receivables, the Bank uses provision rates based on the overdue days in accordance with Circular 228 and Circular 89
as below:
for more than 5 years and supported by land use right certificates issued by a competent authority.
Land use rights are stated at cost less accumulated amortization. The initial cost of land use rights comprises its purchase price
and any directly attributable costs incurred in conjunction with securing the land right. Amortization is computed on a straight-line
basis over the leasing period.

136 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 137
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 4.18 Share capital

4.15 Other receivables (continued) 4.18.1 Ordinary shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognized as a
Status of aging Provision rate
deduction from equity.
From six (06) months up to under one (01) year 30%
From one (01) year up to under two (02) years 50% 4.18.2 Share premium
From two (02) years up to under three (03) years 70% On receipt of capital from shareholders, the difference between the issue price and the par value of the shares is credited to share
From three (03) years and above 100% premium account in equity.

Classification and provisioning for debts which have been sold but not yet collected 4.18.3 Treasury shares

The Bank reclassifies and makes provision for the debts which have been sold but not yet collected, using the loan classification Own equity instruments which are reacquired (treasury shares) are recognized at cost and deducted from equity. No gain or loss is
and collateral value as before the selling date in accordance with Circular 02 and Circular 09. recognized in profit or loss upon purchase, sale, issue or cancellation of the Bank’s own equity instruments

4.16 Business combination and goodwill 4.18.4 Reserves and funds

Business combinations are accounted for using the purchase method. The cost of a business combination is measured as the Reserves and funds of the Bank:
fair value of assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange plus any costs
directly attributable to the business combination. Identifiable assets and liabilities and contingent liabilities assumed in a business The Bank is required to make the following allocations before distribution of profits in accordance with Law on Credit Institutions
combination are measured initially at fair values at the date of business combination. No. 47/2010/QH12 and Resolution No. 93/2017/ND-CP and Charter of the Bank:

Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business combination
Percentage of profit after tax Maximum balance
over the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities. If the cost of
a business combination is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly Supplement charter capital reserve 5% of profit after tax 100% charter capital
in the consolidated income statement. After initial recognition, goodwill is measured at cost less any accumulated amortization.
Financial reserve 10% of profit after tax Not regulated
Goodwill is amortized over five-year period on a straight-line basis.

Other equity funds are allocated from profit after tax. The allocation from profit after tax and utilization of the other equity funds are
4.17 Convertible bonds
approved by the shareholders in the Annual General Meeting. These funds are not required by law and are fully distributable.
Convertible bonds issued by the Bank entitle bondholders to convert their bonds into a fixed number of shares of the Bank at the
Reserves and funds of subsidiaries:
time of issuance. Therefore, the issuance of bonus shares or dividends after the issuance date of the convertible bonds will impact
the conversion rate and the number of shares that can be converted at the maturity date of the convertible bonds due to the anti-
Vietnam Technological and Commercial Joint Stock Bank - Asset Management Company Limited:
dilution term of the bonds.

According to Circular No. 27/2002/TT-BTC dated 22 March 2002 issued by the Ministry of Finance, the creation of reserves is made
The Bank classifies convertible bonds as financial liabilities. There are two types of convertible bonds including: (1) mandatory
as the same as the Bank.
convertible bonds where the bondholders have entered into a commitment to convert their bonds to shares at maturity and (2)
normal convertible bonds where the bondholders have the option to convert at maturity. Both types of convertible bonds are
classified as financial liabilities in the consolidated balance sheet.

For the presentation of the consolidated financial statements as required by Circular No. 49/2014/TT-NHNN, the equity and debt
components of convertible bonds are determined and presented in Note 24.3.

138 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 139
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

4.19.4 Income and expenses from the sale of debts

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Income and expenses from the sale of debts are recognized in accordance with Decision No. 59/2006/QD-NHNN issued by the
4.18 Share capital (continued) SBV promulgating regulations on sale and purchase of debts by credit institutions. From 1 September 2015, income and expenses
arising from purchase and sale of debts are recognized following SBV Circular No. 09/2015/TT-NHNN providing guidance on the sale
4.18.4 Reserves and funds (continued) of debts of credit institutions and foreign bank branches.

Techcom Securities Company Limited and Techcom Capital Management Company Limited: According to Decision No. 59/2006/QD-NHNN and Circular No. 09/2015/TT-NHNN, the difference between the prices of debts
purchased or sold and their book value are recorded as follows:
According to Circular No. 146/TT/2014/TT-BTC issued by the Ministry of Finance issued on 6 October 2014 guiding the financial regime
for securities, fund management companies, from 2014 onwards, realized profit of the Company shall be distributed as follows: »» For debts recorded in the consolidated balance sheet:
• If the sale price is higher than the book value of the debt, the difference shall be recorded as income of the Bank in the year.
• If the purchase or sale price is lower than the book value of the debt, the difference shall be used to offset against the
Percentage of profit after tax Maximum
indemnity paid by an individual or guarantor (in case such individual or guarantor is determined to be responsible for
Supplement charter capital reserve 5% of profit after tax 10% charter capital the damage and obliged to make indemnity under prevailing regulations), or the compensation paid by the insurer, or
Financial reserve 5% of profit after tax 10% charter capital use of outstanding provision recognized as expense previously. The remaining balance (if any) shall be recognized as an
operating expense of the Bank for the year.
Financial reserve is used to compensate for losses in business activities. These legal reserves are made at the year end, and not »» For debts written off and monitored off-balance sheet, the proceeds from sale of debts shall be recognized as other income
allowed to be distributed and transferred into shareholder’s capital. of the Bank.

Technological and Commercial Finance Company Limited: Book value of debts sold is the book value of the principal, interest and related financial obligations (if any) of debts recorded in the
balance sheet or off balance sheet at the date of debts sold; or the book value at the date of writing-off of debts; or the book value
According to Circular No. 93/2017/ND-CP dated 7 August 2017, the creation of reserves is made as the same as the Bank. of debts written off previously at the date of debts sold.

4.19 Revenue and expense recognition Price of debts sold is the sum of consideration to be paid by a debt buyer to a debts seller under a debts purchase and sale contract.

4.19.1 Interest income 4.19.5 Interest expenses

Interest income is recognized in the consolidated income statement on an accrual basis, except for interest on debts classified in Interest expenses are recognized in the consolidated income statement on an accrual basis.
Group 2 to Group 5 as regulated which is recognized upon receipt.
4.20 Foreign currency transactions
4.19.2 Fees and commission income
The Bank maintains its accounting system and records all transactions in original currencies. Monetary assets and liabilities
Fees and commission are recognized in the consolidated income statement on an accrual basis. denominated in foreign currencies are translated into VND using average interbank rates at the consolidated balance sheet date.
Income and expenses arising in foreign currencies during the year are converted into VND at rates ruling on the transaction dates.
4.19.3 Dividend income Foreign exchange differences arising from the translation of monetary assets and liabilities into VND in the year are recognized
and followed in the “Foreign exchange differences” under “Shareholders’ equity” in the consolidated balance sheet and will be
Dividends receivable in cash are recognized in the consolidated income statement when the Bank’s right to receive payment is transferred to the consolidated income statement at the end of the financial year.
established.
4.21 Taxation
In accordance with Circular No. 244/TT-BTC dated 31 December 2009 issued by the Ministry of Finance, dividends received in
the form of shares, bonus shares and rights to purchase shares of the existing shareholders, shares distributed from retained Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognized in the consolidated
earnings are not recognized as an increase in the value of the investment and income is not recognized in the consolidated income income statement.
statement. Instead only changes in number of shares held by the Bank are updated and monitored.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the
balance sheet date, and any adjustment to tax payable in respect of previous year.

140 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 141
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4.21 Taxation (continued)
Deferred tax is provided using the balance sheet method, providing for temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax
provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities using tax
rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the
asset can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be
realized.
4.22 Fiduciary assets
Assets held in a fiduciary capacity are not reported in the consolidated financial statements as they are not assets of the Bank.
4.23 Commitments and contingent liabilities
At any time, the Bank has outstanding commitments to extend credit. These commitments take the form of approved loans and
overdraft facilities. The Bank also provides financial guarantees and letters of credit to guarantee the performance of customers to
third parties. Many of the contingent liabilities and commitments will expire without being advanced in whole or in part. Therefore
the amounts do not represent firm commitment of future cash flows.
Off balance sheet commitments include guarantees, payment acceptances and irrevocable unconditional loan commitments with
specific implementing time.
The classification of off-balance sheet commitments are made only for the purpose of managing and monitoring the credit quality
under the policy applied to debt classification as described in Note 4.6.
In accordance with Circular 02, no provision is required for off-balance sheet commitments.
4.24 Derivative financial instruments
4.24.1 Foreign exchange contracts
The Bank involves in currency forward contracts and currency swap contracts to facilitate customers to transfer, modify or
minimize foreign exchange risk or other market risks, and also for the business purpose of the Bank.
The currency forward contracts are commitments to settle in cash on a pre-determined future date based on the difference
between pre-determined exchange rates, calculated on the notional amount. The currency forward contracts are recognized at
nominal value at the transaction date and are revalued for the reporting purpose at the exchange rate at the reporting date. Gains
or losses realized or unrealized are recognized in the consolidated income statement.
142 ANNUAL REPORT 2017
The currency swap contracts are commitments to settle in cash on a pre-determined future date based on the difference between
pre-determined exchange rates, calculated on the notional principal amount. The discount or premium arising from difference
between spot exchange rate at the effective date of the contract and the forward rate is recognized at the effective date of the
contract as an asset if positive or a liability if negative in the consolidated balance sheet. This difference will be amortized on a
straight line basis to the consolidated income statement over the term on the contract.
4.24.2 Interest rate swap contracts
Commitment value in interest rate swap contracts is not recognized in the consolidated balance sheet. Differences in interest rate
swaps are recognized in the consolidated income statement on an accrual basis.
4.24.3 Commodity futures contracts
The Bank provides brokerage services for clients enter into the commodity future contracts, and accordingly the value of those
contracts is not recognized in the consolidated balance sheet. Income arising from the brokerage transactions is recognized in the
consolidated income statement.
4.25 Offsetting
Financial assets and financial liabilities are offset and the net amount reported in the consolidated balance sheet if, and only
if, there is a currently enforceable legal right to offset financial assets against financial liabilities or vice-versa, and there is an
intention to settle on a net basis, or to realize the asset and settle the liability simultaneously.
4.26 Employee benefits
4.26.1 Post-employment benefits
Post-employment benefits are paid to retired employees of the Bank by the Social Insurance Agency which belongs to the Ministry
of Labor, Invalids and Social Affairs. The Bank is required to contribute to these post-employment benefits by paying social
insurance premium to the Social Insurance Agency at the rate of 18% of an employee’s basic salary on a monthly basis. Since 1
June 2017, the rate has changed to 17.5% of employee’s basic salary plus other allowances. The Bank has no further obligation.
4.26.2 Voluntary resignation
Under Article 48 of the Labor Code No. 10/2012/QH13 effective from 1 May 2013, the Bank has the obligation to pay voluntary
resignation benefits by a half of monthly salary plus other allowances (if any) for each working year up to 31 December 2008 for
voluntary resigns. Since 1 January 2009, average monthly salary to compute voluntary resignation allowances is adjusted at the
end of reporting period according to the average salary of the six latest months up to the resignation date.
4.26.3 Unemployment allowance
According to Circular No. 32/2010/TT-BLĐTBXH providing guidance for Decree No. 127/2008/ND-CP on unemployment insurance,
from 1 January 2009, the Bank is required to contribute to unemployment insurance at the rate of 1% of salary and wage budget
of unemployment insurance joiners and appropriate 1% of monthly salary and wage of each employee to pay for unemployment
insurance fund at the same time.
ENABLING FINANCIAL SUCCESS & SECURITY 143
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Available-for-sale investments

4.27 Financial instruments Available-for-sale assets are non-derivative financial assets that are designated as available-for-sale or are not classified as:

Solely for the purpose of providing disclosures about the significance of financial instruments to the consolidated financial position, »» Financial assets at fair value through profit or loss;
consolidated results of operations and the nature and extent of risk arising from financial instruments in compliance with Circular »» Held-to-maturity investments; or
No.210/2009/TT-BTC, the Bank classifies its financial instruments as follows: »» Loans and receivables.

4.27.1 Financial assets 4.27.2 Financial liabilities

Financial assets recognized at fair value through profit or loss: Financial liabilities at fair value through profit or loss

A financial asset at fair value through profit or loss is a financial asset that meets either of the following conditions: A financial liability at fair value through profit or loss is a financial liability that meets either of the following conditions:
»» It is considered by management as held-for-trading. A financial asset is considered as held-for-trading if:
»» It is considered by management as held-for-trading. A financial liability is considered as held-for-trading if:
• It is acquired principally for the purpose of selling it in the near term;
• It is incurred principally for the purpose of repurchasing it in the near term;
• There is evidence of a recent pattern of short-term profit-taking; or
• There is evidence of a recent pattern of short-term profit-taking; or
• It is a derivative (except for a derivative that is financial guarantee contract or a designated and effective hedging instrument).
• It is a derivative (except for a derivative that is financial guarantee contract or a designated and effective hedging instrument).
»» Upon initial recognition, it is designated by the Bank as at fair value through profit or loss.
»» Upon initial recognition, it is designated by the Bank as at fair value through profit or loss.
Held-to-maturity investments
Financial liabilities carried at amortized cost
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and a fixed maturity that
Financial liabilities which are not classified as financial liabilities at fair value through profit or loss are classified as financial
the Bank has the positive intention and ability to hold to maturity, other than:
liabilities carried at amortized cost.
»» Financial assets that, upon initial recognition, were categorized as such recognized at fair value through profit or loss statements;
The above described classification of financial instruments is solely for presentation and disclosure purpose and is not intended to
»» Financial assets already categorized as available-for-sale;
be a description of how the instruments are measured. Accounting policies for measurement of financial instruments are disclosed
»» Financial assets that meet the definitions of loans and receivables.
in other relevant notes.
Loans and receivables
4.28 Items have no balance
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
Items or balances required by Decision No. 16/2007/QD-NHNN dated 18 April 2007 and Circular No. 49/2014/TT-NHNN dated 31
market, other than those:
December 2014 issued by the SBV stipulating the financial reporting mechanism for credit institutions that are not shown in these
»» That the Bank intends to sell immediately or in the near term, which are classified as held-for-trading, and those that the entity consolidated financial statements indicate nil balance.
on initial recognition designates as at fair value through profit or loss;
»» That the Bank, upon initial recognition, designates as available-for-sale; or
»» For which the Bank may not recover substantially all of its initial investment, other than because of credit deterioration, which
are classified as available-for-sale.

144 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 145
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 6. BALANCES WITH THE STATE BANK OF VIETNAM

4.29 Segment reports

31 December 2017 31 December 2016
VND million VND million
A segment is component of the Bank and subsidiaries which can be determined distinctively and participates in providing a group
of related products and/or services (operating segments) or providing products and/or services in a particular geographical area Balances with the SBV
(geographic segments). Each segment bears different risk and gains specific economic benefits in comparison with each other. - In VND 4,277,877 1,744,926

For management purpose, the Bank and subsidiaries have established into the following operating segments: - In foreign currencies 1,554 788,949
»» Banking activities: Products and services provided to customers include: 4,279,431 2,533,875
• Customer deposits;
• Credit activities; Balances with the SBV include settlement and compulsory deposits in accordance with the regulations of the SBV.
• Settlement and card services; and
• Other banking services. Under the SBV’s regulations relating to the compulsory reserve. banks are permitted to maintain a floating balance for the
»» Asset management activities; compulsory reserve requirement (“CRR”). The monthly average balance of the reserves must not be less than the preceding
»» Securities trading activities; month’s average balances of deposits in scope multiplied with the CRR rates as follows:
»» Fund management activities;
»» Other finance activities;
CRR rates
The Bank and subsidiaries’ operations are mainly conducted within Vietnam territory. Therefore, the Bank presents its segment 31 December 2017 31 December 2016
report by geographical areas including Northern, Central and Southern Vietnam.
Deposits in foreign currencies with term of less than 12 months 8.00% 8.00%
5. CASH AND GOLD Deposits in foreign currencies with term of 12 months and above 6.00% 6.00%
Deposits in VND with term of less than 12 months 3.00% 3.00%
31 December 2017 31 December 2016 Deposits in VND with term of 12 months and above 1.00% 1.00%
VND million VND million
Cash on hand in VND 1,948,066 2,187,535
Cash on hand in foreign currencies 374,120 733,126 Interest rates per annum at the reporting date are as follows:
Gold on hand 22,176 36,047
31 December 2017 31 December 2016
2,344,362 2,956,708
Deposits in VND
Compulsory deposits 1.20% 1.20%
Amount over compulsory deposits 0.00% 0.00%
Deposits in foreign currencies
Compulsory deposits 0.00% 0.00%
Amount over compulsory deposits 0.05% 0.05%

146 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 147
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN
Interest rates per annum of loans to other credit institutions at the reporting date are as follows:

7. BALANCES WITH AND LOANS TO OTHER CREDIT INSTITUTIONS 31 December 2017 31 December 2016
In VND 3.20% - 5.40% 2.40% - 7.00%
7.1 Balances with other credit institutions
In foreign currencies 2.40% - 3.40% 1.50% - 3.60%

31 December 2017 31 December 2016 7.3 Credit quality for balances with and loans to other credit institutions
VND million VND million
Current accounts 7,108,306 1,510,529 Analysis of credit quality for balances (excluding current accounts) with and loans to other credit institutions at the reporting date
are as follows:
- In VND 1,359,152 224,066
- In foreign currencies 5,749,154 1,286,463
31 December 2017 31 December 2016
Term deposits 9,134,748 7,548,413 Group VND million VND million
- In VND 7,071,648 6,185,634
Current 23,047,501 20,088,345
- In foreign currencies 2,063,100 1,362,779
16,243,054 9,058,942 8. SECURITIES HELD-FOR-TRADING

Interest rates per annum of balances with other credit institutions at the reporting date are as follows: 31 December 2017 31 December 2016
VND million VND million
31 December 2017 31 December 2016 Debt securities 6,775,118 8,035,905
Current accounts - Government bonds 3,822,161 5,823,972
- In VND 0.30% 0.15% - Bonds issued by local credit institutions 116,614 960,155
- In foreign currencies 0.00% 0.00% In which: Bonds guaranteed by the Government for settlement 116,614 960,155
Term deposits - Bonds issued by local economic entities 2,836,343 1,251,778
- In VND 1.60% - 9.60% 3.20% - 9.60% Provision for securities held-for-trading (17,024) (11,285)
- In foreign currencies 1.55% - 2.10% 0.80% - 1.70% In which:
- General provision for debt securities (14,246) (11,285)
7.2 Loans to other credit institutions - Provision for diminution of securities (2,778) -
6,758,094 8,024,620
31 December 2017 31 December 2016
VND million VND million
Movements in provision for securities held-for-trading for the year ended 31 December 2017 are as follows:
In VND 11,146,941 8,624,954
In foreign currencies 2,765,812 3,914,978 General Provision for
Total
13,912,753 12,539,932 provision diminution
VND million
VND million VND million
As at 1 January 2017 11,285 - 11,285
Provision made for the year (Note 29) 2,961 2,778 5,739
Balance as at 31 December 2017 14,246 2,778 17,024

148 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 149
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

8. SECURITIES HELD-FOR-TRADING (continued) 9.1 Loan portfolio by quality

Movements in provision for securities held-for-trading for the year ended 31 December 2016 are as follows:
31 December 2017 31 December 2016
VND million % VND million %
General provision Total
VND million VND million Current 155,931,825 96.94 138,203,644 96.91
As at 1 January 2016 9,105 9,105 Special mention 2,333,286 1.45 2,166,056 1.52
Provision made for the year (Note 29) 2,180 2,180 Substandard 575,397 0.36 396,736 0.28
Doubtful 455,567 0.28 474,551 0.33
Balance as at 31 December 2016 11,285 11,285
Loss 1,552,962 0.97 1,375,017 0.96
The listing status of securities held-for-trading is as follows: 160,849,037 100.00 142,616,004 100.00

31 December 2017 31 December 2016 According to the Bank’s report on loans rescheduled without changing in the loan group to the SBV, as at 31 December 2017, the
VND million VND million outstanding loans which are maintained in the same group as they were classified before rescheduled in accordance with Clause
3a, Article 10 of Circular 02/2013/TT-NHNN and previous Decree 780/QD-NHNN as follows:
Debt securities
- Listed 4,176,174 6,822,527
31 December 2017 31 December 2016
- Unlisted 2,598,944 1,213,378 VND million VND million
6,775,118 8,035,905 Rescheduled or extended portions of loans maintained in
75,724 750,020
  Group 1 (Current)
9. LOANS TO CUSTOMERS Rescheduled or extended portions of loans maintained in
649 1,033
Group 2 (Special mention)
31 December 2017 31 December 2016 76,373 751,053
VND million VND million
Loans to local economic entities and individuals 158,497,737 141,203,267 9.2 Loan portfolio by term
Discounted bills and valuable papers 1,983,527 1,038,376
Loans financed by trusted funds 358,449 362,158 31 December 2017 31 December 2016
Payments on behalf of customers 2,166 2,166 VND million % VND million %
Loans to foreign economic entities and individuals 7,158 10,037 Short-term 63,412,628 39.42 35,884,319 25.16
160,849,037 142,616,004 Medium-term 42,896,541 26.67 62,492,501 43.82
Long-term 54,539,868 33.91 44,239,184 31.02
Interest rates per annum of loans to customers at the reporting date are as follows:
160,849,037 100.00 142,616,004 100.00

31 December 2017 31 December 2016

Loans to customers in VND 0.00% - 19.35% 0.84% - 21.84%
Loans to customers in foreign currencies 1.70% - 6.75% 0.00% - 5.70%

150 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 151
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

9. LOANS TO CUSTOMERS (continued) 9.4 Loan portfolio by ownership

9.3 Loan portfolio by industrial sectors 31 December 2017 31 December 2016

VND million % VND million %
31 December 2017 31 December 2016
Loans to economic entities 96,071,606 59.73 80,972,179 56.78
VND million % VND million %
State-owned one-member limited companies 8,424,332 5.24 3,795,377 2.66
Loans to economic entities 96,071,606 59.73 80,972,179 56.78
Other limited companies 32,494,895 20.20 32,321,234 22.66
Agriculture, forestry and aquaculture 301,494 0.19 66,167 0.05
Mining and quarrying 1,271,854 0.79 1,528,042 1.07 Joint-stock state-owned companies 63,292 0.04 283,305 0.20
Manufacturing and processing 20,070,075 12.48 16,793,775 11.78 Other joint-stock companies 51,326,364 31.91 41,220,658 28.91
Electricity, petroleum and hot water manufacturing and distributing 1,858,933 1.16 1,270,437 0.89 Private companies 401,537 0.25 881,741 0.62
Water supply, waste and wastewater management and processing 88,955 0.06 24,549 0.02 Foreign-invested companies 2,076,046 1.29 1,701,518 1.19
Construction 6,100,546 3.79 7,329,029 5.14 Cooperatives and cooperative unions 70,592 0.04 31,547 0.02
Wholesale and retail trade; repair of motor vehicles, motor cycles 14,726,910 9.16 10,798,437 7.57 Administration units, Party, unions, associations 820,739 0.51 422,558 0.30
Transportation and warehousing 3,257,263 2.03 6,045,594 4.24
Others 393,809 0.25 314,241 0.22
Storages and foods services 5,571,892 3.46 2,370,756 1.66
Loans to individuals 64,777,431 40.27 61,643,825 43.22
Information and communication 1,081,104 0.67 894,777 0.63
160,849,037 100.00 142,616,004 100.00
Banking, finance and insurance 9,304,078 5.78 3,911,569 2.74
Real estates 20,326,233 12.64 24,182,046 16.96 10. PROVISION FOR LOANS TO CUSTOMERS
Science and technology 767,880 0.48 161,191 0.11
Administration activities and supportive services 1,868,575 1.16 462,050 0.32 Provision for loans to customers as at 31 December 2017 are as follows:
Education and training 71,687 0.04 31,624 0.02
Health care and social work 84,188 0.05 97,574 0.07 31 December 2017 31 December 2016
Arts and entertainment 15,818 0.01 80,563 0.06 VND million VND million
Other services 9,267,660 5.76 4,285,579 3.00 General provision 1,061,081 1,001,355
Household businesses 36,461 0.02 638,420 0.45 Specific provision 823,500 494,120
Loans to individuals 64,777,431 40.27 61,643,825 43.22
1,884,581 1,495,475
160,849,037 100.00 142,616,004 100.00
Movements in provision for loans to customers for the year ended 31 December 2017 are as follows:

Specific provision General provision Total

VND million VND million VND million
As at 1 January 2017 494,120 1,001,355 1,495,475
Provision made for the year (Note 34) 2,208,338 397,468 2,605,806
Provision reversed during the year (Note 34) (130,568) (337,742) (468,310)
Use of provision (1,748,390) - (1,748,390)
As at 31 December 2017 823,500 1,061,081 1,884,581

152 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 153
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

10. PROVISION FOR LOANS TO CUSTOMERS (continued) 12. INVESTMENT SECURITIES

Movements in provision for loans to customers for the year ended 31 December 2016 are as follows: Investment securities at the reporting date include:

Specific provision General provision Total 31 December 2017 31 December 2016

VND million VND million VND million VND million VND million
As at 1 January 2016 411,226 756,015 1,167,241 Available-for-sale securities 46,018,398 38,575,369
Provision made for the year (Note 34) 4,014,875 474,998 4,489,873 Debt securities 45,798,398 38,428,116
Provision reversed during the year (Note 34) (201,729) (229,658) (431,387) Equity securities 220,000 147,253
Use of provision (3,730,252) - (3,730,252) Held-to-maturity securities 5,715,484 8,560,113
As at 31 December 2016 494,120 1,001,355 1,495,475 VAMC special bonds - 2,922,058
Other debt securities 5,715,484 5,638,055
11. DEBTS PURCHASED Provision for investment securities (191,398) (1,460,558)
51,542,484 45,674,924
31 December 2017 31 December 2016
VND million VND million 12.1 Available-for-sale securities

Debts purchased in VND 12,092 19,466

31 December 2017 31 December 2016
Provision for debts purchased (1,760) (973) VND million VND million
10,332 18,493 Debt securities 45,798,398 38,428,116
Government bonds 13,048,507 15,483,278
Breakdown of principals and interest of debts purchased is as follows:
Bonds issued by local credit institutions 17,010,279 14,858,346
In which: Bonds with settlement guaranteed by the Government 12,459,709 10,156,005
31 December 2017 31 December 2016
VND million VND million Bonds issued by local economic entities (*) 15,739,612 8,086,492
Principal of debts purchased 49,516 54,821 Equity securities 220,000 147,253
Interest of debts purchased 23,619 21,538 Bonds issued by local economic entities 220,000 2,255

73,135 76,359 Bonds issued by local credit institutions - 144,998

Provision for available-for-sale securities (156,851) (76,996)
Movements in provision for debts purchased are as follows: Provision for credit risk of available for sale securities (141,035) (76,996)
Provision for diminution of available for sale securities (15,816) -
2017 2016
45,861,547 38,498,373
VND million VND million
Opening balance 973 1,612
Provision made/(reversed) for the year (Note 34) 787 (639)
Closing balance 1,760 973

154 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 155
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

12.5 Provision for investment securities

12. INVESTMENT SECURITIES (continued)

12.2 Held-to-maturity securities (excluding special bonds issued by VAMC) 31 December 2017 31 December 2016
VND million VND million

31 December 2017 31 December 2016 General provision for unlisted corporate bonds (*) 175,582 93,018
VND million VND million Provision for diminution of securities (*) 15,816 -
Debt securities 5,715,484 5,638,055 Provision for special bonds issued by VAMC (**) - 1,367,540
Government bonds 569,283 571,803 191,398 1,460,558
Bonds issued by local credit institutions 2,030,001 30,001
(*) Movements in provision for unlisted corporate bonds and provision for diminution of securities for the year ended 31 December
In which: Bonds with settlement guaranteed by the Government 30,001 30,001
2017 are as follows:
Bonds issued by local economic entities (*) 3,116,200 5,036,251
Provision for held-to-maturity securities (34,547) (16,022) Provision for
General provision Total
Provision for credit risk of held-to-maturity securities (34,547) (16,022) diminution
VND million VND million
5,680,937 5,622,033 VND million
As at 1 January 2017 93,018 - 93,018
(*) During the year, the Bank reclassified VND2,900 billion of bonds issued by local economic entities from held-to-maturity Provision made for the year (Note 30) 82,564 15,816 98,380
securities to available-for-sale securities due to change in business purpose. On 31 December 2017, the balance of available-
for-sale securities increased by VND2,900 billion due to the reclassification. As at 31 December 2017 175,582 15,816 191,398

12.3 Special bonds issued by VAMC Movements in provision for unlisted corporate bonds for the year ended 31 December 2016 are as follows:

31 December 2017 31 December 2016 General provision Total

VND million VND million VND million VND million
Par value - 2,922,058 As at 1 January 2016 106,785 106,785
Provision for VAMC bonds - (1,367,540) Provision reversed during the year (Note 30) (13,767) (13,767)
- 1,554,518 As at 31 December 2016 93,018 93,018

12.4 Analysis of credit quality (**) Movements in provision for VAMC special bonds are as follows:

Analysis of credit quality for securities (excluding special bonds issued by VAMC) which are classified as assets bearing credit risk 2017 2016
is as follows: VND million VND million
Opening balance 1,367,540 1,021,983
31 December 2017 31 December 2016
VND million VND million Provision made for the year (Note 34) 1,743,194 879,386
Provision reversed during the year (Note 34) (79,428) (155,456)
Current loan 24,110,635 15,903,094
Utilization of provision for the year (3,031,306) (378,373)
Closing balance - 1,367,540

156 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 157
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

13. LONG-TERM INVESTMENTS 14. FIXED ASSETS

14.1 Tangible fixed assets
31 December 2017 31 December 2016
VND million VND million
Movements in tangible fixed assets for the year ended 31 December 2017 are as follows:
Other long-term investments – cost 12,084 582,672 VND million
Provision for long-term investments (2,401) (4,926) Buildings
Machines and Means of
9,683 577,746 & building Other Total
equipment transportation
improvements
13.1 Other long-term investments Cost
As at 1 January 2017 241,190 1,121,608 153,345 2,144 1,518,287
31 December 2017 31 December 2016 Addition 95,552 29,521 8,879 - 133,952
Ownership At cost Ownership At cost Disposal - (33,091) (13,374) - (46,465)
% VND million % VND million Other movements - (2,818) - - (2,818)
Vietnam Airlines Corporation 0.00 417 2.08 570,405 As at 31 December 2017 336,742 1,115,220 148,850 2,144 1,602,956
Vietnam Real Estate Exchange JSC 11.00 660 11.00 660 Accumulated depreciation
TCBOND Consultancy and Investment Company Limited - - 10.00 600
As at 1 January 2017 21,860 833,454 84,546 1,591 941,451
PCB Investment JSC 6.64 7,962 6.64 7,962
Charge for the year 10,673 108,885 19,228 186 138,972
Society for Worldwide Interbank Financial Telecommunication 0.00 1,005 0.00 1,005
Disposal - (32,246) (13,374) - (45,620)
Banking Operations Training and Advisory JSC 7.79 1,040 7.79 1,040
Vietnam National Financial Switching JSC 0.42 1,000 0.42 1,000 Other movements 407 (2,214) 171 - (1,636)
12,084 582,672 As at 31 December 2017 32,940 907,879 90,571 1,777 1,033,167
Net book value
During the year, the Bank sold 25,560,000 shares of Vietnam Airlines Corporation by auction through UpCom Stock Exchange and
As at 1 January 2017 219,330 288,154 68,799 553 576,836
recorded a net gain of VND million 355,192 (Note 32).
As at 31 December 2017 303,802 207,341 58,279 367 569,789
13.2 Provision for long-term investments

2017 2016
VND million VND million
Opening balance 4,926 4,079
Provision made/(reversed) for the year (Note 33) (2,525) 847
Closing balance 2,401 4,926
 

158 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 159
 14.2 Intangible fixed assets
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN Movements in intangible fixed assets for the year ended 31 December 2017 are as follows:
VND million
Computer Definite land
Others Total
14. FIXED ASSETS (continued) software use rights
Cost
14.1 Tangible fixed assets (continued) As at 1 January 2017 802,879 615,768 4,403 1,423,050
Addition 41,408 455 - 41,863
Movements in tangible fixed assets for the year ended 31 December 2016 are as follows:
VND million Disposal (15,297) - - (15,297)
As at 31 December 2017 828,990 616,223 4,403 1,449,616
Buildings
Machines and Means of Accumulated amortization
& building Other Total
equipment transportation As at 1 January 2017 408,309 6,548 2,307 417,164
improvements
Charge for the year 94,115 11,899 78 106,092
Cost
Disposal (15,297) - - (15,297)
As at 1 January 2016 103,356 1,089,097 146,967 2,578 1,341,998
As at 31 December 2017 487,127 18,447 2,385 507,959
Addition 138,042 40,366 8,314 - 186,722
Net book value
Disposals (208) (6,107) (1,936) (90) (8,341) As at 1 January 2017 394,570 609,220 2,096 1,005,886
Other movements - (1,748) - (344) (2,092) As at 31 December 2017 341,863 597,776 2,018 941,657
As at 31 December 2016 241,190 1,121,608 153,345 2,144 1,518,287
Movements in intangible fixed assets for the year ended 31 December 2016 are as follows:
Accumulated depreciation
VND million
As at 1 January 2016 15,786 714,147 72,081 1,837 803,851
Computer Definite land
Charge for the year 6,279 125,677 14,017 214 146,187 Others Total
software use rights
Disposal (208) (5,420) (1,683) (90) (7,401) Cost
Other movements 3 (950) 131 (370) (1,186) As at 1 January 2016 641,837 22,250 4,403 668,490
As at 31 December 2016 21,860 833,454 84,546 1,591 941,451 Addition 161,272 593,518 - 754,790
Other movements (230) - - (230)
Net book value
As at 31 December 2016 802,879 615,768 4,403 1,423,050
As at 1 January 2016 87,570 374,950 74,886 741 538,147
Accumulated amortization
As at 31 December 2016 219,330 288,154 68,799 553 576,836
As at 1 January 2016 321,986 341 2,229 324,556

Additional information of tangible fixed assets Charge for the year 86,363 6,207 78 92,648
Other movements (40) - - (40)
As at 31 December 2016 408,309 6,548 2,307 417,164
31 December 2017 31 December 2016
VND million VND million Net book value
As at 1 January 2016 319,851 21,909 2,174 343,934
Cost value of tangible fixed assets which have been fully depreciated but
401,835 297,613 As at 31 December 2016 394,570 609,220 2,096 1,005,886
still in use
Additional information on intangible fixed assets

31 December 2017 31 December 2016

VND million VND million
Cost value of intangible fixed assets which have been fully depreciated but
175,684 42,753
still in use

160 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 161
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

15. INVESTMENT PROPERTY 16. OTHER ASSETS

Investment property mainly includes Techcombank Building with cost and accumulated amortization amounting to VND 1,435,699
31 December 2017 31 December 2016
million and VND 203,575 million, respectively, as at 31 December 2017.
VND million VND million
Movements in investment properties in 2017 are as follows: Other receivables 9,417,589 6,829,557
VND million Internal receivables 25,774 67,263
Building External receivables 9,391,815 6,762,294
Cost - Deposits for office rental (i) 395,207 496,778
As at 1 January 2017 1,447,256 - Deposit for purchase of office (ii) 2,352,839 -
Disposal (4,429) - Receivables related to Interest Subsidy Program 21,148 21,148
As at 31 December 2017 1,442,827 - Prepaid for suppliers 55,040 59,508
Accumulated amortization - Deposits for gold, commodity and foreign currencies trading in future markets 45,586 74,000
As at 1 January 2017 168,720 - Fixed asset purchase and construction in progress (iii) 946,456 135,495
Charge for the year 36,077 - Receivables from loans sold contract (iv) 1,862,038 3,488,943
As at 31 December 2017 204,797 - Receivables from deferred L/C (v) 2,789,982 2,189,972
Net book value - Corporate income tax overpaid (Note 23) - 112
As at 1 January 2017 1,278,536 - Receivables from other credit institutions 134,884 -
As at 31 December 2017 1,238,030 - Receivables from bond principal and interest due on holiday 368,300 -
- Other external receivables 420,335 296,338
Movements in investment properties for the year ended 31 December 2016 is as follows:
Interest and fees receivable 3,876,528 3,992,328
VND million
Deferred tax assets (vi) 1,773 27,659
Building
Other assets 557,642 650,888
Cost
- Materials 24,475 19,960
As at 1 January 2016 1,442,827
- Prepaid expenses 513,402 485,258
Transfer from construction in progress 4,429
- Goodwill (vii) 19,765 29,647
As at 31 December 2016 1,447,256
- Other assets - 116,023
Accumulated amortization
Provision for other assets (viii) (1,311,569) (1,504,323)
As at 1 January 2016 132,643
12,541,963 9,996,109
Charge for the year 36,077
As at 31 December 2016 168,720 (i) These are deposits for office rental of the Bank’s headquarter and branches, in which the largest amount was the deposit for
Net book value the South Head Office at Lim Tower Building at No, 9-11, Ton Duc Thang Street, Ben Nghe Ward, District 1, Ho Chi Minh City
As at 1 January 2016 1,310,184 amounting to VND 292 billion.

As at 31 December 2016 1,278,536

162 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 163
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

16. OTHER ASSETS (continued) (viii) Provision for other assets comprises of provision for inventories, overdue receivables, receivables from deferred L/C and
receivables from loans sold are as follows:
(ii) These are deposits to purchase the Bank’s offices in Hanoi and Ho Chi Minh city.
31 December 2017 31 December 2016
(iii) These are payments to purchase fixed asset and construct the Bank’s offices in Hanoi.
VND million VND million
(iv) Receivables from loans sold are outstanding receivables from licensed debts purchasing companies. Provision for credit risk 1,242,318 1,435,143
- General provision 22,127 22,242
(v) Receivables from deferred L/C are from importers who are the Bank’s clients of usance payable at sight imported letter of
credit financing service provided by the Bank. This product has been approved by the SBV under Official letter No, 5698/ - Specific provision 1,220,191 1,412,901
NHNN-TD, Accordingly, the Bank finances the usance letter of credit for the beneficiaries (exporters) prior to the matured Other provision 69,251 69,180
date of the letter of credits dates and earns fees for advanced settlement services from 1.00% to 6.00% of advanced
1,311,569 1,504,323
settlement value, Settlement period range is from 1 to 17 months.

(vi) Movement of deferred income tax assets during the year is as follows: Movements in provision for other assets for the year are as follows:

VND million 2017 2016

Opening balance Incurred Reversed Closing balance VND million VND million

Deferred income tax assets related to Opening balance 1,504,323 2,614,476

27,659 - (25,886) 1,773
deductible temporary tax differences Provision reversed for outstanding receivables from loans sold (Notes 34) (193,809) (1,141,115)
General provision made for receivables from deferred L/C (Note 34) 986 20,429
(vii) Goodwill of the Bank was derived from the acquisition of Technological and Commercial Finance Company Limited
(“TCF”) in 2015, Change in goodwill for the period is presented as follows: Provision made for other assets (Note 33) 317 11,895
Reversal of provision for impairment of inventories (Note 33) (248) (1,362)
31 December 2017 31 December 2016 Closing balance 1,311,569 1,504,323
VND million VND million  
Total goodwill 49,411 49,411 17. BORROWINGS FROM THE GOVERNMENT AND THE STATE BANK OF VIETNAM
Amortization periods 5 years 5 years
31 December 2017 31 December 2016
Opening balance of unamortized goodwill 29,647 39,529
VND million VND million
Goodwill decrease for the period
Deposit from State Treasury 1,000,000 -
Amortization for the period (9,882) (9,882)
Borrowings from the State Bank of Vietnam - 1,447,970
Total closing balance of unamortized goodwill 19,765 29,647
1,000,000 1,447,970

Deposit from State Treasury at 31 December 2017 has 2-month term and 4% interest rate.

164 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 165
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

18. DEPOSITS AND BORROWINGS FROM OTHER CREDIT INSTITUTIONS 19. DEPOSITS FROM CUSTOMERS

18.1 Deposits from other credit institutions 19.1 Analysis by category of deposits

31 December 2017 31 December 2016 31 December 2017 31 December 2016

VND million VND million VND million VND million
Demand deposits 1,032,265 449,116 Current accounts 38,234,560 35,826,887
- In VND 1,031,740 448,525 Current accounts in VND 34,061,915 31,030,697
- In foreign currencies 525 591 Current accounts in foreign currencies 4,172,645 4,796,190
Term deposits 20,242,110 14,665,801 Term deposits 129,727,778 134,053,365
- In VND 15,999,300 10,526,500 Term deposits in VND 121,993,210 125,958,279
- In foreign currencies 4,242,810 4,139,301 Term deposits in foreign currencies 7,734,568 8,095,086
21,274,375 15,114,917 Marginal deposits 3,008,495 3,568,677
Marginal deposits in VND 2,843,993 3,405,369
Interest rates per annum of deposits from other credit institutions at the reporting date are as follows: Marginal deposits in foreign currencies 164,502 163,308
170,970,833 173,448,929
31 December 2017 31 December 2016
In VND 1.00% - 7.00% 2.70% - 6.20% Interest rates per annum of deposits from customers at the reporting date are as follows:
In foreign currencies 1.60% - 2.20% 0.85% - 1.60%
31 December 2017 31 December 2016
18.2 Borrowings from other credit institutions Demand deposits in VND 0.00% - 0.80% 0.00% - 0.30%
Demand deposits in foreign currencies 0.00% - 0.10% 0.00% - 1.25%
31 December 2017 31 December 2016
VND million Term deposit in VND 0.30% - 11.94% 0.50% - 11.94%
VND million
Term deposit in foreign currencies 0.00% - 0.75% 0.00% - 0.60%
In VND 19,321,553 6,819,013
In foreign currencies 5,727,897 3,539,579
25,049,450 10,358,592

Interest rates per annum of borrowings from other credit institutions at the reporting date are as follows:

31 December 2017 31 December 2016

In VND 3.50% - 5.90% 3.20% - 5.00%
In foreign currencies 0.75% - 5.40% 0.75% - 4.79%

166 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 167
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

19. DEPOSITS FROM CUSTOMERS (continued) 21. VALUABLE PAPERS ISSUED

19.2 Analysis of deposits portfolio by ownership Valuable papers issued and categorized by terms follow:

31 December 2017 31 December 2016 31 December 2017 31 December 2016

VND million VND million
VND million % VND million %
Up to 12 months (i) 6 42,822
Deposits from organizations 49,926,989 29.20 61,662,821 35.55
From 12 months to 5 years (ii) 11,039,964 3,480,184
State-owned one-member limited companies 2,658,251 1.55 6,186,670 3.57
Other limited companies 19,461,912 11.38 23,719,606 13.68 Over 5 years (iii) 6,600,000 3,891,836
Joint-stock State-owned companies 132,206 0.08 585,640 0.34 Convertible bonds issued (iv) - 3,000,000
Other joint-stock companies 23,100,099 13.51 26,386,488 15.21 17,639,970 10,414,842
Private enterprises 99,386 0.06 160,296 0.09
Foreign-invested enterprises 2,683,171 1.57 2,690,503 1.55 (i) These certificates of deposits bear interest rate of 0.00% per annum (2016: 6.00% to 7.20%).
Cooperatives and cooperative unions 3,010 0.00 7,372 0.00
(ii) These bonds and certificates of deposits bear interest at rates ranging from 5.60% to 8.20% per annum (2016: 7.10%
Administration units, Party, unions, associations 1,227,830 0.72 1,145,799 0.66
to 8.00%).
Others 561,124 0.33 780,447 0.45
Deposits from individuals 121,043,844 70.80 111,786,108 64.45 (iii) These deposit certificates bear interest rates ranging from 7.73% to 8.80% per annum (2016: 8.20% to 8.80%).
170,970,833 100.00 173,448,929 100.00
(iv) During the year, the Bank approved the conversion of convertible bonds into shares with bond par value of VND million
20. DERIVATIVES AND OTHER FINANCIAL LIABILITIES 2,842,287 at the rate of VND 13,683.04, equivalent to 207,722,849 shares, Remaining non-converted bonds are reclassified
VND million to ordinary valuable papers (see also Note 24.3).

31 December 2017 31 December 2016

Total contract Total Total contract Total
nominal value carrying value nominal value carrying value
Foreign exchange forward contracts 18,133,992 144,445 23,144,183 (85,978)
Foreign exchange swap contracts 112,757,969 (108,153) 52,521,119 18,086
130,891,961 36,292 75,665,302 (67,892)

Total contract nominal value is at the foreign exchange rate at the value date.

Total carrying value is at the foreign exchange rate at the date of consolidated financial statements.

168 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 169
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

22. OTHER LIABILITIES (i) Tax payables

31 December 2017 31 December 2016 31 December 2017 31 December 2016

VND million VND million VND million VND million
Accrued interest and fee payables 2,764,162 2,195,582 Value added tax 10,406 13,438
Other liabilities 3,762,845 2,727,936 Corporate income tax (“CIT”) 866,900 336,725
Internal payables 13,465 23,694 Other taxes 51,087 26,816
External payables 3,749,380 2,704,242 928,393 376,979
- Remittance payables 927,230 104,153
- Payable to employees 615,387 456,896 Refer to Note 23 for details of tax payables.

- Settlement on behalf of other credit institutions - 101,399 23. OBLIGATIONS TO THE STATE BUDGET
- Tax payables (i) 928,393 376,979
- Deferred income 9,141 8,903 Incurred during the year
Opening Opening
- Advance from customers 52,595 2,232 Closing
balance- balance-
- Other accrued expenses 368,949 452,838 payable receivable Payable Adjustment Paid balance-
- Salaries accrued expenses 237,113 220,199 payable
- Payables relating to marketing and promotion 20,135 16,093 Value added tax 13,438 - 308,343 - (311,375) 10,406
- Bonus and welfare funds 2,680 17,864 Corporate income tax 336,725 (112) 1,564,816 - (1,034,529) 866,900
- Disbursements awaiting settlement 6,990 200,892 Other taxes 26,816 - 341,851 (2,370) (315,210) 51,087
- Deposit certificates of customers awaiting settlement 176,308 327,624 Taxes payables 376,979 (112) 2,215,010 (2,370) (1,661,114) 928,393
- Deferred proceeds from the sale of collateral 156,580 155,501
23.1 Current Corporate Income Tax
- Other payables 247,879 262,669
6,527,007 4,923,518 Current Corporate Income Tax payables are determined based on taxable income of the current year. Taxable income may be
different from the amount reported in the consolidated income statement since taxable income excludes income which are eligible
for tax or expenses which are subtracted in prior years due to the differences between the Bank’s accounting policies and the
current tax policies, and also excludes tax-exempted income and non-deductible expenses. The current Corporate Income Tax
payables of the Bank are calculated based on the statutory tax rates applicable at the end of the year.

The tax returns filed by the Bank are subject to examination by the tax authorities. As the application of tax laws and regulations is
susceptible to varying interpretations, the amounts reported in the consolidated financial statements could change at a later date
upon final determination by the tax authorities.

170 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 171
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

23. OBLIGATIONS TO THE STATE BUDGET (continued) 23.2 Applicable tax rate

23.1 Current corporate income tax (continued) The Bank’s income tax rate for this year is 20% (2016: 20%).

Provision for current corporate income tax for the year ended 31 December 2017 is computed as follows: 23.3 Deferred corporate income tax

2017 2016 2017 2016
VND million VND million VND million VND million
Profit before tax 8,036,297 3,996,640 Deferred corporate income tax benefit/(expenses) arising from:
Adjustments - Deductible temporary tax differences (25,886) 25,026
- Non-taxable dividend income (334) (470) - Reversal of deferred income taxes payable - (12)
- Other non-taxable income (682) (727) (25,886) 25,014
- Prior year non-deductible expense reverted or deductible this year (268,418) -
- Temporary differences arising from the previous year deducted in this year (129,430) -
- Adjustment on profit for consolidation purpose 27,833 12,507
- Non-deductible expenses 239,978 355,784
- Loss from subsidiary - (2,502)
Taxable corporate income 7,905,244 4,361,232
- Corporate income tax expense calculated on taxable income of current period 1,581,049 872,246
- Adjustment for under provision of corporate income tax expense in prior year (16,233) 562
Current corporate income tax expense for the year 1,564,816 872,808
Opening corporate income tax payable 336,725 189,170
Opening corporate income tax receivable (112) (4,302)
Corporate income tax paid for the year (1,034,529) (721,092)
Corporate income tax adjusted for prior years - 29
Closing corporate income tax payable 866,900 336,725
Closing corporate income tax receivable - (112)

172 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 173
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

24. CAPITAL AND RESERVES 24.2 Share capital

24.1 Statement of changes in equity Breakdown of share capital at the reporting date:

For the year ended 31 December 2017:

31 December 2017 31 December 2016
VND million
VND million VND million
Reserve to
Charter Shares Treasury Financial Other Total Retained Charter capital 11,655,307 8,878,079
supplement Total
capital premium shares reserve reserves reserves earnings
capital Share premium 2,165,058 -
As at 1 January 2017 8,878,079 - - 3,658,696 1,560,012 474 5,219,182 5,489,215 19,586,476 Treasury shares (4,043,249) -
Net profit for the year - - - - - - - 6,445,595 6,445,595
9,777,116 8,878,079
Treasury shares - - (4,043,249) - - - - - (4,043,249)
New shares issuance 700,000 1,399,999 - - - - - - 2,099,999 Movement of number of shares in 2017:
Convertible bonds 2,077,228 765,059 - - - - - - 2,842,287
Utilization of reserves - - - - (263) - (263) - (263) 31 December 2016
31 December 2017
Other movements - - - - - - - (100) (100) Number of shares Number of shares
Appropriation of
- - - 325,056 612,953 - 938,009 (938,009) - Registered share capital 1,165,530,720 887,807,871
reserves
As at 31 Issued share capital
11,655,307 2,165,058 (4,043,249) 3,983,752 2,172,702 474 6,156,928 10,996,701 26,930,745
December 2017 Ordinary shares 1,165,530,720 887,807,871
Treasury shares
For the year ended 31 December 2016: Ordinary shares (172,353,345) -
VND million Shares in circulation
Reserve to Ordinary shares 993,177,375 887,807,871
Charter Financial Other Total Retained
supplement Total
capital reserve reserves reserves earnings
capital Norminal value of the Bank’s ordinary share is VND 10,000. Each share is entitled to one vote at meetings of the Bank. All shareholders
As at 1 January 2016 8,878,079 3,492,508 1,251,921 474 4,744,903 2,834,584 16,457,566 are entitled to receive dividend as declared from time to time. All ordinary shares are ranked equally with regard to the Bank’s
residual assets.
Net profit for the year - - - - - 3,148,846 3,148,846
Utilization of reserves - - (127) - (127) - (127) During the year, the Bank issued 70,000,000 ordinary shares with the face value of VND 10,000 per share and converted convertible
Appropriation to bonus and welfare fund - - - - - (19,716) (19,716) bonds with par value of VND 2,077,228,490,000, equivalent to 207,722,849 shares. Besides, the Bank purchased 172,353,345 of its
ordinary shares from the Hongkong Shanghai Banking Corporation Limited and recorded to treasury shares.
Other movements - - - - - (93) (93)
Appropriation of reserves - 166,188 308,218 - 474,406 (474,406) -

As at 31 December 2016 8,878,079 3,658,696 1,560,012 474 5,219,182 5,489,215 19,586,476

174 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 175
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

24. CAPITAL AND RESERVES (continued)

27. NET FEES AND COMMISSION INCOME
24.3 Information on compound financial instruments
2017 2016
VND million VND million
31 December 2017 31 December 2016
VND million VND million Fees and commission income from 4,519,685 2,558,990
Convertible bonds Settlement and cash services 1,465,532 1,270,342
Debt component - 157,713 Cashiering services 1,355 1,784
Equity component - 2,842,287 Trustee and agency services 1,543,389 61,050
Total value - 3,000,000 Consulting services 3,537 75,926
Insurance commission services 512,882 336,976
During the year, the Bank approved the conversion of convertible bonds into shares with bond par value of VND million 2,842,287 at the Income from securities trading brokerage 374,551 336,504
rate of VND 13,683.04, equivalent to 207,722,849 shares. Remaining non-converted bonds are reclassified to ordinary valuable papers.
Other services 618,439 476,408
24.4 Dividends Fees and commission expenses for (707,783) (603,226)
Settlement and cash services (277,686) (241,119)
Dividends payout shall be decided at Annual General Shareholders Meeting.
Communication charges (36,819) (34,319)
25. INTEREST AND SIMILAR INCOME Cashiering services (53,905) (52,502)
Consulting services (125,430) (88,973)
2017 2016 Other services (213,943) (186,313)
VND million VND million
3,811,902 1,955,764
Interest income from deposits 332,772 220,924
Interest income from loans 13,366,312 11,985,852 28. NET GAIN FROM TRADING FOREIGN CURRENCIES
Income from debt securities investments 3,532,333 3,298,872
Income from guarantee services 280,709 223,400 2017 2016
VND million VND million
Other income from credit activities 82,378 7,029
Income from trading of foreign currencies 1,105,028 1,027,292
17,594,504 15,736,077
Income from foreign exchange trading 193,142 347,317
Income from currency financial derivatives 911,886 679,975
26. INTEREST AND SIMILAR EXPENSES Expenses for trading of foreign currencies (826,443) (787,091)
Expenses for foreign exchange trading (244,100) (103,865)
2017 2016 Expenses for currency financial derivatives (582,343) (683,226)
VND million VND million
278,585 240,201
Interest expenses for deposits 7,645,664 6,727,965
Interest expenses for borrowings 317,362 288,629
Interest expenses for valuable papers issued 701,066 577,262
8,664,092 7,593,856

176 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 177
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

29. NET GAIN FROM SECURITIES HELD-FOR-TRADING 32. INCOME FROM INVESTMENTS IN OTHER ENTITIES

2017 2016 2017 2016
VND million VND million VND million VND million
Income from trading of securities held-for-trading 539,888 274,046 Dividends received for the year from long-term investments 334 470
Expenses for trading of securities held-for-trading (137,419) (147,086) Proceeds from the liquidation of long-term investment (Note 13.1) 355,192 -
Provision made for securities held-for-trading (Note 8) (2,961) (2,180) 355,526 470
Provision for diminution of securities held-for-trading (Note 8) (2,778) -
33. OPERATING EXPENSES
396,730 124,780

2017 2016
Notes
30. NET GAIN FROM INVESTMENT SECURITIES VND million VND million
Salaries and related expenses 2,594,878 2,230,301
2017 2016 Publication, marketing and promotion 263,412 253,236
VND million VND million
Office and asset rental 441,778 440,688
Income from trading of investment securities 1,165,122 646,829 Depreciation of fixed assets 281,141 274,912
Expenses for trading of investment securities (210,982) (179,139) Tax, duties and fees 77,426 65,899
Provision (made)/reversed for investment securities (Note 12.5) (82,564) 13,767 Tools and equipment expenses 51,593 32,942
Provision made for diminution of investment securities (Note 12.5) (15,816) - Telecommunication expenses 35,469 35,557
855,760 481,457 Expenses for maintenance and repair of assets 218,704 214,234
Utilities expenses 53,710 49,127
31. NET GAIN FROM OTHER OPERATING ACTIVITIES
Expenditure on payment of insurance premium for
166,187 134,792
customers’ deposits
2017 2016
Per diem expenses 71,397 60,200
VND million VND million
Provision made/(reversed) for long-term investments 13.2 (2,525) 847
Other operating income 1,963,425 1,567,677
Goodwill amortization expenses 16 9,882 9,882
Income from other derivatives 193,008 402,533
Provision made for other assets 69 10,533
Recovery of loans previously written-off 1,116,820 404,195
- Provision made for other assets 16 317 11,895
Income from entrusted debt collection 71,659 109,315
- Provision reversed for inventories 16 (248) (1,362)
Income from settlement of VAMC 424,134 505,597
Training and education expenses 29,455 28,529
Other income 157,804 146,037
Conference expenses 41,958 41,107
Other operating expenses (248,534) (679,417)
Other operating expenses 363,749 292,636
Expenses for other derivatives (128,764) (328,310)
4,698,283 4,175,422
Other expenses (119,770) (351,107)

1,714,891 888,260

178 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 179
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

34. PROVISION EXPENSES FOR CREDIT LOSSES 35. EARNINGS PER SHARE (continued)

2017 2016
Notes
VND million VND million
2017 2016
General provision made for loans to customers 10 397,468 474,998
Reversal of general provision for loans to customers 10 (337,742) (229,658) Profit after tax attributable to ordinary shareholders of the Bank (VND million) 6,445,595 3,148,846

Specific provision made for loans to customers 10 2,208,338 4,014,875 Adjusted for appropriation to bonus and welfare fund - (19,716)

Reversal of specific provision for loans to customers 10 (130,568) (201,729) Profit after tax attributable to ordinary shares shareholders of the Bank for calculating
6,445,595 3,129,130
basic earnings per share (VND million)
Reversal for loans sold but not yet received 16 (193,809) (1,141,115)
Interest expense on convertible bonds - 79,549
Provision made for receivables from deferred L/C 16 986 20,429
Adjusted profit after tax attributable to ordinary shareholders of the Bank for
Provision made/(reversed) for loans purchases 11 787 (639) 6,445,595 3,208,679
calculation of diluted earnings per share (VND million)
Provision made for VAMC bonds 12.5 1,743,194 879,386 Weighted average number of ordinary shares used for calculation of basic
835,039,242 887,807,871
Reversal of provision for VAMC bonds 12.5 (79,428) (155,456) earnings per share
3,609,226 3,661,091 Effect of mandatory convertible bonds (*) 207,723,346
Weighted average number of ordinary shares used for calculation of diluted
835,039,242 1,095,531,217
35. EARNINGS PER SHARE earnings per share
Earnings per share (VND)
Basic earnings per share are calculated by dividing the profit or loss after tax which is attributable to shareholders holding ordinary
shares of the Bank (after adjusting for appropriation to bonus and welfare fund) to the weighted average of the number of common Basic earnings per share 7,719 3,525
shares outstanding for the period. Diluted earnings per share (*) 2,929
Diluted earnings per share are calculated by dividing the profit or loss after tax which is attributable to shareholders holding
(*) As at 31 December 2017, basic earnings per share of the Bank are not affected by dilution factors.
ordinary shares of the Bank (after adjusting for the dividends of convertible preferred shares) to the total of weighted average
number of ordinary shares outstanding for the year and the weighted average number of ordinary shares which are issued in case
36. CASH AND CASH EQUIVALENTS
all potential ordinary shares which have a diluted impact are converted into ordinary shares.

31 December 2017 31 December 2016

VND million VND million
Cash, gold 2,344,362 2,956,708
Balances with the State Bank of Vietnam 4,279,431 2,533,875
Balanc es with other c redit institutions with original terms less than or equal
16,057,406 8,702,514
three months
22,681,199 14,193,097

180 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 181
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

37. EMPLOYEE BENEFITS

38.2 Assets, valuable papers issued, mortgaged, pledged, discounted and rediscounted by the Bank
2017 2016
VND million VND million
31 December 2017 31 December 2016
I. Average number of employees for the year (person) 8,277 7,702
VND million VND million
II. Employees’ remuneration
Investment securities 17,662,700 7,668,288
1. Basic salaries 2,069,106 1,675,188
Other assets 1,930,000 303,012
2. Allowances and other income 525,772 555,113
19,592,700 7,971,300
3. Total (1+2) 2,594,878 2,230,301
4. Average monthly salary/month 21 18
5. Average annual remuneration/month 26 24 39. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES

38. ASSETS, VALUABLE PAPERS ISSUED, MORTGAGED, PLEDGED, DISCOUNTED AND REDISCOUNTED Related party transactions are transactions undertaken with other entities to which the Bank is related. The following parties are
considered to be related to the Bank:
38.1 Assets, valuable papere issued, mortgaged, pledged, discounted and rediscounted to the Bank
(a) Enterprises that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common
control with, the reporting Bank. (This includes holding companies, subsidiaries and fellow subsidiaries);
31 December 2017 31 December 2016
VND million VND million (b) Associates (see VAS No. 07 “Accounting for Investments in Associates”);
From customers 406,535,584 378,892,668
(c) Individuals owning, directly or indirectly, an interest in the voting power of the reporting Bank that gives them significant
Real estate 182,200,811 180,972,454 influence over the Bank, and close members of the family of any such individual. Close members of the family of an individual
Movable assets 52,230,799 52,800,245 are those that may be expected to influence, or be influenced by, that person in their dealings with the Bank, for examples:
Valuable papers issued 72,913,916 65,630,986 parent, spouse, progeny, siblings, etc;

Other collateral 99,190,058 79,488,983 (d) Key management personnel, that is, those persons having authority and responsibility for planning, directing and
From other credit institutions 1,733,143 1,533,856 controlling the activities of the reporting Bank, including directors and officers of the Bank and close members of the
Valuable papers issued 1,724,979 695,291 families of such individuals;

Other collateral 8,164 838,565 (e) Enterprises in which a substantial interest in the voting power is owned, directly or indirectly, by any person described
408,268,727 380,426,524 in (c) or (d) or over which such a person is able to exercise significant influence. This includes enterprises owned by
directors or major shareholders of the reporting Bank and enterprises that have a member of key management in
common with the reporting Bank.

182 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 183
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

39. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES (continued)

The Bank has the following significant balances with related parties at the end of the year: Significant transactions with related parties during the year are as follows:
VND million
Receivable/(payable)
Related party Relationship 31 December 2016 Related party Relationship
31 December 2017 2017 2016
VND million VND million VND million VND million
Loans from the Bank Interest income
The European Plastic Window JSC (ii) 394,097 407,606 The European Plastic Window JSC (ii) 35,342 21,840
T&M Hatay, JSC (ii) - 193,052 Nui Phao Mining Company Ltd., (ii) 41,962 91,276
Nui Phao Mining Company Ltd., (ii) 890,802 681,982 T&M Hatay, JSC (ii) 18,652 10,807
In which: Increase 1,192,178 1,572,799 Masan Group Corporation (i) 8,294 5,790
Decrease (938,358) (2,758,133) Masan JSC (ii) 16 -

Par value bond of the Bank Interest expenses

Masan Group Corporation (i) 274,155 94,000 Masan Group Corporation (i) (11,854) (7,982)
Masan JSC (ii) 6,012 - The Euro Plastic Window JSC (ii) (10) (83)
Nui Phao Mining Company Ltd., (ii) (1,063) (153)
Deposits at the Bank Masan Consumer JSC (ii) (56,635) (110,108)
Masan Group Corporation (i) (172,521) (49,854) Masan Vision JSC (ii) (1,492) (5,931)
The Euro Plastic Window JSC (ii) (23,793) (40,354) Masan Brewery Ltd., (iii) (6,127) (14,291)
Nui Phao Mining Company Ltd., (ii) (167,262) (39,828) Vinh Hao Mineral Water JSC. (iii) (3,016) (5,592)
Masan Consumer JSC (ii) (311,562) (3,091,157) VinaCafe Bien Hoa JSC (iii) (7,663) (2,516)
Masan Vision JSC (ii) (7,741) (5,839) Masan Beverage Company Limited (iii) (5,179) (2,758)
Masan Brewery Ltd., (iii) (507) (220,887)
Vinh Hao Mineral Water JSC (iii) (62,706) (134,260) Remuneration of key management
VinaCafe Bien Hoa JSC (iii) (1,486,643) (283,071) Remuneration of members of the Board of Directors and Board
(28,903) (28,989)
Masan Beverage Ltd., (iii) (770,203) (73,713) of Supervisors
Remuneration of members of the Board of Management (65,511) (67,372)
(*) This is a USD-denominated loan amounting to USD 39,723,599 as at 31 December 2017 (31 December 2016: USD 30,776,770). 
(i) Shareholder has its representative in the Board of Directors of the Bank
(ii) Related party has its representative in the Board of Directors of the Bank
(iii) Related party has its representative related to members of the Board of Directors, or Board of Management or Board of
Supervision of the Bank

184 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 185
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

40. GEOGRAPHICAL DISPERSION OF ASSETS, LIABILITIES AND OFF-BALANCE SHEET ITEMS

The Bank manages credit risk by using various tools: development and issuance of internal policies and regulations on credit risk
Trading and management; development of credit procedures and manuals; regular review of credit risk; development of a credit rating system
Contingent
Total loans Total deposits Derivatives (*) investment and loan classification; and setting up authorization levels within the credit approval process.
liabilities
VND million VND million VND million securities
VND million
VND million The following table presents the maximum exposure to credit risk from the balance sheet, before taking account of any collateral
held or other credit risk enhancements:
Domestic 174,754,632 191,691,596 48,421,531 130,891,961 58,509,000
Overseas 7,158 553,612 - - -
31 December 2017 31 December 2016
174,761,790 192,245,208 48,421,531 130,891,961 58,509,000 VND million VND million
Balances with and loans to other credit institutions – gross 30,155,807 21,598,874
(*) Nominal contract value
Securities held-for-trading – gross 6,775,118 8,035,905
41. RISK MANAGEMENT DISCLOSURE Loans to customers – gross 160,849,037 142,616,004
Debts purchased – gross 12,092 19,466
This section provides details of the Bank’s exposure to risk and describes policies and the methods used by management to
Investment securities – gross (*) 51,513,882 46,988,229
control risk. The most important types of financial risk to which the Bank is exposed are credit risk, liquidity risk and market risk.
Others financial assets – gross 12,326,513 10,665,130
The Board of Directors has overall responsibility for the establishment and oversight of the Bank’s financial risk management 261,632,449 229,923,608
framework to facilitate its business activities to thrive safely and sustainably.
(*) Excluding equity securities.
Having taken that responsibility, the Board of Directors appropriately promulgates risk management policies and strategies,
establishes business limit, approves high-value business transactions in accordance with both legal and internal requirements,
42.1 Financial assets that are neither past due nor impaired
and determines organizational structure and key managing directors.
Information about credit quality of financial assets that are neither past due nor impaired is as follows:
Risk management strategies and policies adhere to the Bank’s Charter and General Shareholders’ Meeting resolutions.

Audit Risk Committee (“ARCO”) is established by the Board of Directors for the purpose of undertaking a number of functions and 31 December 2017 31 December 2016
tasks related to the audit, supervising and monitoring risk management of the Bank’s operation which are assigned/authorized by VND million VND million
the Board of Directors.
Balances with and loans to other credit institutions – gross 30,155,807 21,598,874
ARCO is responsible for promulgating and monitoring risk management framework, risk appetites and risk management policies Securities-held-for trading – gross 6,775,118 8,035,905
in the Bank’s operating activities and approving market risk limit, credit risk limit for each industry, business line and other general Loans to customers – gross 155,931,825 138,203,644
risk limits of the Bank.
Investment securities – gross 51,513,882 44,066,171
 
42. CREDIT RISK Others financial assets – gross 10,378,441 7,108,731
254,755,073 219,013,325
The Bank is subject to credit risk through its lending, investing activities and in cases where it acts as an intermediary on behalf of
customers or other third parties or issues guarantees. The risk that counterparties might default on their obligations is monitored The Bank’s financial assets, which are neither past due nor impaired, include loans in Group 1 (current); securities, receivables and
on an ongoing basis. To manage the level of credit risk, the Bank attempts to deal with counterparties with good credit standing, other financial assets which are not overdue.
and, when appropriate, obtains collateral. The Bank’s primary exposure to credit risk arises through its loans. The amount of credit
exposure in this regard is represented by the carrying amounts of the assets on the consolidated balance sheet. In addition, the The Bank believes that those financial assets can be fully and timely recovered in the future.
Bank is exposed to off-balance sheet credit risk through commitments to extend credit and guarantees issued.

186 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 187
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

42. CREDIT RISK (continued)

42.2 Financial assets that are past due but not impaired

Information about financial assets that are past due but not impaired as at 31 December 2017 is as follows: Information about financial assets which are impaired as at 31 December 2016 is as follows:
VND million
VND million
Overdue
Overdue
Not past From 91-180 From 181-360
Under 90 days Over 360 days Total
From 181-360 due yet days days
Under 90 days From 91-180 days Over 360 days Total
days
Loans to customers - 1,546,909 285,031 292,837 960,563 3,085,340
Loans to customers 383,681 61,811 91,820 396,460 933,772
Debts purchased 17,784 - - - 1,682 19,466
Other assets - 19,450 - - 19,450
Investment securities 2,922,058 - - - - 2,922,058
383,681 81,261 91,820 396,460 953,222
Other assets 3,488,943 - - - 67,456 3,556,399
Information about financial assets that are past due but not impaired as at 31 December 2016 is as follows: 6,428,785 1,546,909 285,031 292,837 1,029,701 9,583,263
VND million
Overdue
43. MARKET RISK
From 181-360
Under 90 days From 91-180 days Over 360 days Total
days 43.1 Interest rate risk
Loans to customers 619,147 111,705 181,714 414,454 1,327,020
Interest rate risk arises when there is a difference of term in valuation of interest rate between assets and liabilities. All loan
activities, mobilization activities and investment activities of the Banks create interest rate risk.
These past-due loans are not impaired due to they are secured by adequate collateral assets.
On the basis of the state of “interest rate sensitivity” according to periodic changes in interest rates, the indicators which are assets,
42.3 Financial assets that are impaired equity and off-balance sheet assets are classified by terms into the table “interest gap” of the whole Bank.

Information about financial assets which are impaired as at 31 December 2017 is as follows: The interest rate repricing term for items with fixed interest rates is the remaining period until the maturity date of the asset. As for
VND million items with floating interest rates, it is the remaining period until the next interest rate change.
Overdue
Not past From 91-180 From 181-360
Under 90 days Over 360 days Total
due yet days days
Loans to customers - 1,949,605 513,586 363,747 1,156,502 3,983,440
Debts purchased - - 10,410 - 1,682 12,092
Other assets 1,862,038 - - - 66,584 1,928,622
1,862,038 1,949,605 523,996 363,747 1,224,768 5,924,154

188 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 189
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

43. MARKET RISK (continued)

43.1 Interest rate risk (continued) The following table presents the assets and liabilities of the Bank based on “interest gap” at the reporting date:

The followings assumptions and conditions are applied when constructing “interest gap” table: 31 December 2017
VND million
»» Cash and gold; capital contribution; long-term investments; fixed assets, other receivables and other liabilities are classified as
non-interest sensitivity items; Interest re-pricing for the year
Non-
»» Balances with the State Bank of Vietnam, demand balances with and loans to other credit institutions, demand deposits are Up to From 1 to From 3 to From 6 to Over 1 to 5 Over 5
Overdue interest Total
classified as non-interest sensitivity items; 1 month 3 months 6 months 12 months years years
bearing
»» Interest rate repricing of trading securities and investment securities are based on the actual maturity date at the reporting date Assets
if such securities have a fixed interest rate, or based on revaluation of interest rate if such securities have a floating interest rate; Cash and gold - 2,344,362 - - - - - - 2,344,362
»» Interest rate repricing of balances with and loans to other credit institutions; loans to customers; deposits and borrowings from Balances with the SBV - - 4,279,431 - - - - - 4,279,431
the Government and the State Bank of Vietnam are identified as follows: Balances with and loans to other credit
- - 14,067,026 12,518,193 2,853,255 641,539 75,794 - 30,155,807
institutions (*)
• Items with fixed interest rate for the duration of contract: interest rate repricing based on actual maturity date since
Securities held-for-trading (*) - - - 1,128,550 1,463,394 237,399 227,196 3,718,579 6,775,118
reporting date of the consolidated financial statements;
In which: Government bonds
• Items with floating interest rate: interest rate repricing based on nearest interest since reporting date of the consolidated and bonds guaranteed by the - - - - - - 220,196 3,718,579 3,938,775
financial statements; Government for settlement
»» Interest rate repricing of valuable papers issued based on the acutual maturity date of each type of valuable papers if there is a Derivatives and other financial assets - - (2,185) (1,118,212) 82,036 88,978 985,675 - 36,292
fixed interest rate, or time-based revaluation if there is a floating interest rate; Loans to customers (*) 4,917,212 - 71,809,355 29,825,417 13,811,532 16,224,593 22,271,060 1,989,868 160,849,037
Debts purchased (*) 12,092 - - - - - - - 12,092
»» Interest rate repricing of other borrowed and entrusted funds are based on actual maturity date at the reporting date of
Investment securities (*) - 1,183,369 993,452 2,343,163 11,967,201 9,612,105 17,408,036 8,226,556 51,733,882
consolidated financial statement of each other borrowed and entrusted funds if the interest rate is fixed, or based on the
In which: Government bonds
revaluation if the interest rate is floating.
and bonds guaranteed by the - - 179,167 - - 4,029,582 13,432,850 8,465,901 26,107,500
Government for settlement
Interest rate sensitivity
Long-term investments (*) - 12,084 - - - - - - 12,084
Assuming that all other variables remain constant, the effects of fluctuation in interest rates of the loans with floating interest rates Fixed assets and investment property - 2,749,476 - - - - - - 2,749,476
on profit before tax and shareholders’ equity of the Bank is as follows: Other assets (*) 86,034 13,767,498 - - - - - - 13,853,532
Total assets 5,015,338 20,056,789 91,147,079 44,697,111 30,177,418 26,804,614 40,967,761 13,935,003 272,801,113
Liabilities
Effect on
Borrowings from the Government
- - 1,000,000 - - - - - 1,000,000
Increase in Profit before tax Equity and SBV
interest rate VND million VND million Deposits and borrowings from
- - 34,786,036 9,652,688 807,149 145,628 899,739 32,585 46,323,825
other credit institutions
As at 31 December 2017
Deposits from customers - - 91,968,268 32,948,023 22,683,104 17,520,224 5,833,492 17,722 170,970,833
USD 1.50% (10.415) (8.332) Valuable papers issued - - - - - 1,150,000 13,292,170 3,197,800 17,639,970
VND 3.00% 1.490.727 1.192.582 Other liabilities - 6,527,007 - - - - - - 6,527,007
Total liabilities - 6,527,007 127,754,304 42,600,711 23,490,253 18,815,852 20,025,401 3,248,107 242,461,635
Interest sensitivity gap 5,015,338 13,529,782 (36,607,225) 2,096,400 6,687,165 7,988,762 20,942,360 10,686,896 30,339,478

(*) These amounts exclude provisions.

190 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 191
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

43. MARKET RISK (continued)

VND million
43.2 Currency risk
Other
USD EUR Gold
Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The Bank 31 December 2017 VND currencies Total
equivalent equivalent equivalent
was incorporated and operates in Vietnam, with VND as its reporting currency. The major currency in which the Bank transacts is equivalent
VND. The Bank’s asset-liabilities structure included different types of currencies (such as USD, EUR, AUD…), which is the main cause
Assets
of currency risk. The Bank has set limits on positions by currency based on internal risk assessment process and regulations of
the SBV. Currency positions are monitored on a daily basis and hedging strategies used to ensure positions are maintained within Cash and gold 1,948,066 238,486 66,392 22,176 69,242 2,344,362
established limits.
Balances with the SBV 4,277,877 1,554 - - - 4,279,431
Exchange rate sensitivity Balances with and loans to other
19,577,741 9,223,666 935,164 - 419,236 30,155,807
credit institutions (*)
Assuming that all variables remain constant, the following table shows the effects on profit before tax and equity of the Bank
exchange rates. Risk due to change of exchange rate to other currencies of the Bank is not significant. Securities held-for-trading (*) 6,775,118 - - - - 6,775,118
Derivatives and other financial assets (2,523,991) 2,923,082 (485,984) - 123,185 36,292
Effects on Loans to customers (*) 152,379,665 8,439,290 30,082 - - 160,849,037
Profit before tax Equity Debts purchased (*) 12,092 - - - - 12,092
Level of increase
VND million VND million
Investment securities (*) 51,733,882 - - - - 51,733,882
As at 31 December 2017
Long-term investments (*) 12,084 - - - - 12,084
USD 1.00% 138,842 111,074
Fixed assets and investment property 2,749,476 - - - - 2,749,476
EUR 1.00% (4,087) (3,270)
Other assets (*) 10,845,609 2,808,867 190,036 - 9,020 13,853,532
Gold 3.00% 665 532
Total assets 247,787,619 23,634,945 735,690 22,176 620,683 272,801,113
The table in the next page shows the analysis of assets and liabilities in VND and foreign currencies translated into VND at 31 Liabilities
December 2017. Borrowings from the Government
1,000,000 - - - - 1,000,000
and the SBV
Deposits and borrowings from other
36,352,593 9,782,128 189,104 - - 46,323,825
credit institutions
Deposits from customers 158,899,118 10,934,596 536,877 - 600,242 170,970,833
Valuable papers issued 17,639,970 - - - - 17,639,970
Other liabilities 6,445,242 73,273 6,664 - 1,828 6,527,007
Total liabilities 220,336,923 20,789,997 732,645 - 602,070 242,461,635
FX position on balance sheet 27,450,696 2,844,948 3,045 22,176 18,613 30,339,478
FX position off-balance sheet (13,450,405) 11,039,203 (411,762) - 133,578 (2,689,386)
Total FX position on and off-
14,000,291 13,884,151 (408,717) 22,176 152,191 27,650,092
balance sheet

(*) These amounts exclude provisions.

192 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 193
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

43. MARKET RISK (continued) VND million

Overdue Current
43.3 Liquidity risk
Up to 3 Over 3 Up to 1 From 1 to 3 From 3 to From 1 to 5 Over 5
31 December 2017 Total
Liquidity risk arises in the general funding of the Bank’s activities and in the management of positions. It includes both the risk of months months month months 12 months years years
being unable to fund assets at appropriate maturities and rates and the risk of being unable to liquidate an asset at a reasonable Assets
price and in an appropriate time frame. Cash and gold - - 2,344,362 - - - - 2,344,362
Balances with the SBV - - 4,279,431 - - - - 4,279,431
The maturity term of assets and liabilities represents the remaining period from the date of the consolidated financial statements Balances with and loans to other
to the contractual maturity date of assets and liabilities. - - 14,172,940 12,415,143 3,491,930 75,794 - 30,155,807
credit institutions (*)
Securities held-for-trading (*) - - - - 767,399 2,289,140 3,718,579 6,775,118
The following assumptions and conditions are applied in the analysis of overdue status of the Bank’s assets and liabilities: In which: Government bonds
and bonds guaranteed by the - - - - - 220,196 3,718,579 3,938,775
»» Balances with the State Bank of Vietnam are classified as demand deposits which include compulsory deposits. The balance of Government for settlement
compulsory deposits depends on the proportion and terms of the Bank’s customer deposits; Derivatives and other financial assets - - (38,492) (107,453) 154,537 27,700 - 36,292
Loans to customers (*) 2,333,286 2,583,926 9,509,028 15,600,616 38,912,024 42,605,273 49,304,884 160,849,037
»» The maturity term of investment securities is calculated based on the maturity date of each category of securities; In which,
securities issued by the Government/guaranteed by the Government, although classifed based on residual maturity, but
Debts purchased (*) - 12,092 - - - - - 12,092
considered as liquid assets in the market that are readily convertible to known amounts of cash and subject to an insignificant Investment securities (*) - - 399,167 - 11,024,163 29,057,332 11,253,220 51,733,882
risk of change in value; In which: Government bonds
and bonds guaranteed by the - - 179,167 - 4,029,582 13,432,850 8,465,901 26,107,500
»» The maturity term of balances with and loans to other credit institutions, and loans to customers, is determined on the maturity Government for settlement
date as stipulated in contracts. The actual maturity term may be altered because loan contracts may be extended/prepaid; Long-term investments (*) - - - - - - 12,084 12,084
»» The maturity term of equity investments is considered as more than five years because these investments do not have specific Fixed assets and investment property - - 28,823 409 34,396 319,330 2,366,518 2,749,476
maturity date; Other assets (*) - 86,034 3,639,122 3,068,201 4,186,724 2,197,993 675,458 13,853,532
»» The maturity term of deposits and borrowings from credit institutions and customers’ deposits is determined based on features Total assets 2,333,286 2,682,052 34,334,381 30,976,916 58,571,173 76,572,562 67,330,743 272,801,113
of these items or the maturity date as stipulated in contracts. Demand deposits are transacted as required by customers and Liabilities
therefore are classified as current accounts, however, a large proportion of this deposits type of customers remain stable at the Borrowings from the Government
- - 1,000,000 - - - - 1,000,000
Bank over one year. The maturity term of borrowings and term deposits is determined based on the maturity date in contracts. and the SBV
In fact, these amounts may be rotated and therefore they last beyond the original maturity date; Deposits and borrowings from other
- - 34,812,855 9,627,334 951,312 900,965 31,359 46,323,825
credit institutions
»» The maturity term of fixed assets is determined based on the remaining useful life of assets;
Deposits from customers - - 87,115,228 29,706,655 35,569,611 18,511,516 67,823 170,970,833
»» The maturity term of valuable papers issued is calculated based on the maturity date of each category of valuable paper; In which: Current accounts - - 38,234,560 - - - - 38,234,560
»» The maturity term of other borrowed and entrusted funds is determined based on the maturity date as stipulated in contracts Valuable papers issued - - - - 1,150,000 9,891,970 6,598,000 17,639,970
as at the reporting date of each contract; Other liabilities - - 3,623,168 1,576,834 1,182,037 136,559 8,409 6,527,007
Total liabilities - - 126,551,251 40,910,823 38,852,960 29,441,010 6,705,591 242,461,635
»» The maturity term of other liabilities is determined based on the actual maturity date of each liability.
Net liquidity gap difference 2,333,286 2,682,052 (92,216,870) (9,933,907) 19,718,213 47,131,552 60,625,152 30,339,478

The table in the next page shows the analysis of assets and liabilities of the Bank according to their maturities.
(*) These amounts exclude provisions.

194 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 195
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

44. FINANCIAL ASSETS AND LIABILITIES 44.2 Book value and fair value of financial assets and liabilities

44.1 Book value and fair value of financial assets and liabilities Book value and fair value of financial assets and liabilities of the Bank as at 31 December 2017 are as follow:
VND million
Book value and fair value of financial assets and liabilities of the Bank as at 31 December 2017 are as follows:
Book value
VND million
Liabilities
Book value Fair value
and other
through Held-to- Loans and Available- Total book Fair
Assets borrowings
Fair value Profit & Loss maturity receivables for-sale value value
and other by amortized
through statement
Held-to- Loans and Available- liabilities Total book Fair cost
Profit
maturity receivables for-sale by value value
& Loss Borrowings from the Government
amortized - - - - 1,000,000 1,000,000 (*)
statement and the State Bank of Vietnam
cost
Deposits and borrowings from other
Cash and gold - - 2,344,362 - - 2,344,362 2,344,362 - - - - 46,323,825 46,323,825 (*)
credit institutions
Balances with the SBV - - 4,279,431 - - 4,279,431 4,279,431
Deposits from customers - - - - 170,970,833 170,970,833 (*)
Balances with and loans to other
- - 30,155,807 - - 30,155,807 (*) Valuable papers issued - - - - 17,639,970 17,639,970 (*)
credit institutions
Other liabilities - - - - 5,589,473 5,589,473 (*)
Securities held-for-trading 6,775,118 - - - - 6,775,118 (*)
- - - - 241,524,101 241,524,101
Derivatives and other financial assets 36,292 - - - - 36,292 (*)
Loans to customers - - 160,849,037 - - 160,849,037 (*) (*) The Bank has not determined the fair value of these items due to insufficient information and lack of detailed guidance
Debts purchased - - 12,092 - - 12,092 (*) on fair value under Vietnamese Accounting Standards and Vietnamese Accounting System for Credit Institutions. 

Available-for-sale securities - - - 46,018,398 - 46,018,398 (*)

Held-to-maturity securities - 5,715,484 - - - 5,715,484 (*)
Long-term investments - - - 12,084 - 12,084 (*)
Other assets - - 12,326,513 - - 12,326,513 (*)
6,811,410 5,715,484 209,967,242 46,030,482 - 268,524,618

(*) The Bank has not determined the fair value of these items due to insufficient information and lack of detailed guidance on fair
value under Vietnamese Accounting Standards and Vietnamese Accounting System for Credit Institutions.

196 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 197
THUYẾT MINH BÁO CÁO TÀI CHÍNH HỢP NHẤT (tiếp theo)
tại ngày 31 tháng 12 năm 2017 và cho năm tài chính kết thúc cùng ngày B05/TCTD-HN

45. SEGMENT REPORT

45.1 Segment report by geographic region 45.1 Segment report by operating activities

Segment report by geographic region for the year ended 31 December 2017: Segment report by operating activities for the year ended 31 December 2017:
VND million VND million

Elimination Assets Trading Fund

Criteria North (*) Central South Total Criteria Bank Finance Elimination (*) Total
(**) Management securities Management

I. Revenue 48,463,254 283,630 1,084,079 37,272 28,687 (291,790) 49,605,132

I. Income 31,061,209 623,795 18,211,918 (291,790) 49,605,132
1. Interest revenue 39,883,130 4,711 111,300 5,763 28,621 (77,067) 39,956,458
1. Interest income 22,067,063 548,156 17,418,306 (77,067) 39,956,458 Interest income from external 17,521,176 - 106,186 5,274 10,786 (48,918) 17,594,504
Interest income from external 13,974,152 366,490 3,253,862 - 17,594,504 Interest income from internal 22,361,954 4,711 5,114 489 17,835 (28,149) 22,361,954
2. Operating revenue 4,012,138 - 482,229 31,405 - (6,087) 4,519,685
Interest income from internal 8,092,911 181,666 14,164,444 (77,067) 22,361,954
3. Other revenue 4,567,986 278,919 490,550 104 66 (208,636) 5,128,989
2. Income from operating activities 3,860,377 55,090 610,305 (6,087) 4,519,685 II. Expense (37,804,135) (206,188) (166,687) (17,482) (7,093) 241,976 (37,959,609)
3. Income from other operating activities 5,133,769 20,549 183,307 (208,636) 5,128,989 1. Interest expense (31,054,433) (48,625) (55) - - 77,067 (31,026,046)
II. Expenses (20,371,830) (442,168) (17,387,587) 241,976 (37,959,609) Interest expenses to external (8,692,479) - 238 - - 28,149 (8,664,092)
Interest expenses to internal (22,361,954) (48,625) (293) - - 48,918 (22,361,954)
1. Interest expenses (14,200,574) (364,096) (16,538,443) 77,067 (31,026,046)
2. Depreciation expense (237,504) (39,572) (3,739) (43) (283) - (281,141)
Interest expenses to external (6,107,663) (182,430) (2,373,999) - (8,664,092) 3. Operating expense (6,512,198) (117,991) (162,893) (17,439) (6,810) 164,909 (6,652,422)
Interest expenses to internal (8,092,911) (181,666) (14,164,444) 77,067 (22,361,954) Profit before provision expenses
10,659,119 77,442 917,392 19,790 21,594 (49,814) 11,645,523
2. Depreciation expenses (273,058) (661) (7,422) - (281,141) for credit losses
Provision expenses for credit losses (3,602,150) 367 (475) - 951 (7,919) (3,609,226)
3. Expenses from operating activities (5,898,198) (77,411) (841,722) 164,909 (6,652,422)
Segment profit 7,056,969 77,809 916,917 19,790 22,545 (57,733) 8,036,297
Profit before provision expenses for III. Assets 268,354,282 1,492,117 2,814,882 75,341 743,812 (4,088,054) 269,392,380
10,689,379 181,627 824,331 (49,814) 11,645,523
credit losses
1. Cash 2,344,362 - - - - - 2,344,362
Provision expenses for credit losses (3,379,540) (27,146) (194,621) (7,919) (3,609,226) 2. Fixed assets 1,493,089 10,070 7,870 97 320 - 1,511,446
Segment profit 7,309,839 154,481 629,710 (57,733) 8,036,297 3. Other assets 264,516,831 1,482,047 2,807,012 75,244 743,492 (4,088,054) 265,536,572
III. Assets 221,519,989 4,781,452 47,178,993 (4,088,054) 269,392,380 IV. Liabilities 243,383,888 752,247 211,836 6,726 2,790 (1,895,852) 242,461,635
1. External liabilities 243,370,423 752,247 211,836 6,726 2,790 (1,895,852) 242,448,170
1. Cash 1,526,442 108,079 709,841 - 2,344,362
2. Internal liabilities 13,465 - - - - - 13,465
2. Fixed assets 1,447,694 1,271 62,481 - 1,511,446
3. Other assets 218,545,853 4,672,102 46,406,671 (4,088,054) 265,536,572 (*) Elimination of internal transactions
IV. Liabilities 180,065,705 4,965,116 59,326,666 (1,895,852) 242,461,635
1. Liabilities to external 178,164,156 4,957,354 59,326,660 - 242,448,170
2. Liabilities to internal 1,901,549 7,762 6 (1,895,852) 13,465

(*) The Bank’s Head office (in the North segment) has incurred operating expenses for the whole bank, but has not allocated
these expenses to other segments.
(**) Elimination of internal transactions.

198 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 199
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
as at 31 December 2017 and for the year then ended B05/TCTD-HN

46. CORRESPONDING FIGURES 48. EXCHANGE RATES OF APPLICABLE FOREIGN CURRENCIES AGAINST VIETNAM DONG

Certain corresponding figures stated in the prior year have been reclassified to conform to the current year’s presentation:
31 December 2017 31 December 2016
VND VND
31 December AUD 17,718 16,432
2016 (as 31 December 2016
Reclassify CAD 18,053 16,952
Notes previously (Reclassified)
VND million CHF 23,306 22,360
reported VND) VND million
VND million CNY 3,490 3,279
CONSOLIDATED BALANCE SHEET DKK 3,660 3,223
EUR 27,246 23,946
Borrowings from other credit institutions i 9,771,209 587,383 10,358,592
GBP 30,691 28,106
Other borrowed and entrusted funds i 587,383 (587,383) -
HKD 2,907 2,936
CONSOLIDATED INCOME STATEMENT
JPY 201.53 195
Other income ii 1,653,250 (85,573) 1,567,677 NOK 2,766 2,636
Operating expenses ii (4,260,995) 85,573 (4,175,422) SEK 2,768 2,500
CONSOLIDATED CASH FLOW STATEMENT SGD 16,979 15,723
Other income receipts ii 569,638 (85,573) 484,065 THB 697.45 635
Operating and salary expenses payments ii (3,493,511) 85,573 (3,407,938) USD 22,425 22,159
Increase in deposits and borrowings from other credit
i 4,140,136 250,962 4,391,098
institutions
Prepared by: Approved by: Approved by:
Increase in other borrowed and entrusted funds i 250,962 (250,962) -

(i) Reclassify “Other borrowed and entrusted funds” to “Borrowings from other credit institutions”.
(ii) Reclassify “Operating expenses” and “Operating and salary expenses payments “ from “Other income”.

47. EVENTS AFTER THE CONSOLIDATED BALANCE SHEET DATE

There has not been any matter or circumstance that has arisen since the consolidated balance sheet date that has affected or
may significantly affect the operations of the Bank, the results of those operations or the state of affairs of the Bank that requires
disclosure in consolidated financial statements.
Ms. BUI THI KHANH VAN Ms. THAI HA LINH Mr. NGUYEN LE QUOC ANH
Chief Accountant Director of Accounting, Chief Executive Officer
Financial Policy and Tax,
Finance and Planning Division

Hanoi, Vietnam 9 February 2018

200 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 201
OPERATION NETWORK

Number of
N° Province/City branches and
transaction offices

24
1 An Giang 1
2 Ba Ria - Vung Tau 5
3 Bac Giang 2
AFTER 4 Bac Ninh 5
5 Binh Đinh 1
6 Binh Duong 4
7 Binh Phuoc 1
8 Binh Thuan 1
9 Ca Mau 1
10 Can Tho 5
YEARS OF ROBUST GROWTH, TECHCOMBANK NOW 11 Đa Nang 10
BOASTS A LARGE SERVICE NETWORK WHICH OFFERS 12 Daklak 1
13 Đong Nai 6
A DIVERSE RANGE OF FINANCIAL PRODUCTS AND
14 Đong Thap 1
SOLUTIONS. NOT ONLY DOES THE BANK HAVE AN
15 Gia Lai 1
ADVANCED DIGITAL BANKING SYSTEM, BUT ALSO ITS 16 Ha Nam 1
PHYSICAL FOOTPRINT, WHICH INCLUDES 315 BRANCHES/ Con Co Islands
HOANG SA 17 Ha Noi 99
TRANSACTION OFFICES/REPRESENTATIVE OFFICES AND ISLANDS
18 Ha Tinh 3
1,117 ATM’S, NOW COVERS 45 CITIES AND PROVINCES 19 Hai Duong 3
ACROSS THE COUNTRY. 20 Hai Phong 9
21 Ho Chi Minh 100
Ly Sono Islands 22 Hung Yen 3
23 Khanh Hoa 4
24 Kien Giang 2
25 Lam Đong 1
EAST SEA 26 Lang Son 3
27 Lao Cai 3
28 Long An 1
29 Nam Đinh 2
30 Nghe An 4
31 Ninh Binh 1
32 Phu Tho 2
33 Quang Nam 2
AS AT 31 DECEMBER 2017, AS AT 31 DECEMBER 2017, AS AT 31 DECEMBER 2017,
34 Quang Ngai 2
TECHCOMBANK HAD TECHCOMBANK HAD TECHCOMBANK WAS PRESENT IN 35 Quang Ninh 5
36 Soc Trang 1
Phu Quy Islands

37 Tay Ninh 1

1,117 315 45 Phu Quoc Islands

TRUONG SA
ISLANDS
38
39
40
41
Thai Binh
Thai Nguyên
Thanh Hoa
Thua Thien - Hue
1
4
2
3
ATMS BRANCHES/ CITIES AND PROVINCES Con Son Islands 42 Tien Giang 1
43 Vinh Long 2
Hon Khoai Islands

TRANSACTION OFFICES/ IN VIETNAM

REPRESENTATIVE OFFICES 44 Vinh Phuc 3
45 Yen Bai 2
TOTAL 315

202 ANNUAL REPORT 2017 ENABLING FINANCIAL SUCCESS & SECURITY 203
VIETNAM TECHNOLOGICAL AND COMMERCIAL
JOINT STOCK BANK
| Techcombank Tower, 191 Ba Trieu,
Hai Ba Trung District, Ha Noi
| (84 24) 3944 6368
| (84 24) 3944 6395
| www.techcombank.com.vn