National Economics University

…...0O0…..

Securities Market 2
TOPIC: SSI Securities Corporation

Name Lại Quỳnh Anh: 11210384

Nguyễn Thúy Hiền: 11212168
Nguyễn Phương Anh: 11219257
Ngô Thu Hằng: 11219693
Nguyễn Phương Linh: 11213310
Hoàng Thị Minh 11219486
Khuê:
Trần Thị Dung: 11217346
Nguyễn Minh Đức: 11218776
Nguyễn Đình Minh 11215991
Trung:
Class: Banking EEP 63

Hanoi – January, 2024

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 Table of Contents
I. Securities company....................................................................................................4
1. Overview of securities company..........................................................................4
1.1. Definition and classification of securities company............................................4
1.2. Characteristics of securities company..................................................................4
1.3. Role of securities company..................................................................................6
1.4. Operating principles of securities company.........................................................7
2. Basic operations of securities company..............................................................7
2.1. Securities brokerage.............................................................................................7
2.2. Securities self-trading...........................................................................................8
2.3. Underwriting securities........................................................................................9
2.4. Securities investment consultancy.....................................................................10
2.5) Other operations of securities companies..........................................................10
II. SSI Securities Corporation......................................................................................14
1. Introduction of SSI..................................................................................................14
1.1.1 Overview of SSI...............................................................................................14
1.1.2 The development of SSI...................................................................................14
1.2 Business units of SSI Securities Corporation (SSI).....................................17
1.3. Business performance SSI Securities Corporation (SSI).................................17
2. Securities brokerage operation in SSI...............................................................21
2.1 The brokerage process at SSI..............................................................................21
2.2 SWOT analysis of Securities brokerage operation in SSI................................24
III. Analyze and evaluate SSI's performance based on CAMEL financial index.........27
1. Capital adequacy criteria (C).................................................................................27
2. Asset quality indicators (A)....................................................................................30
3. Evaluation of management quality (M).................................................................33
4. Profitability indicator (E).......................................................................................34
5. Liquidity ratio (L)...................................................................................................36
6. Classify and evaluate performance based on the CAMEL framework..............37
PREFERENCE................................................................................................................40

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3
 I. Securities company
1. Overview of securities company

1.1. Definition and classification of securities company

a. Definition:
 Securities company is an intermediary financial institution established under law,
performing one and/or a number of operations on the stock market. These activities may
include buying and selling securities (such as stocks and bonds) on behalf of clients,
providing investment advice, underwriting new securities issuances, and facilitating
trading on stock exchanges.
b. Classification of securities company:
 By possession:
 Partnerships: A partnership is a business structure in which two or more individuals
manage and operate a business in accordance with the terms and objectives set out in a
Partnership Deed.
 Limited Liability Company: A limited liability company is a flexible form of business
organization that combines elements of partnerships and corporations.
 Joint Stock Company: A joint-stock company is a type of business entity in which shares
of the company's stock can be bought and sold by shareholders.
 By business operations:
 General securities company: A general securities company is a financial institution that
engages in a broad range of activities related to securities and investments, including
brokerage services, underwriting, investment advisory, research, asset management, and
trading.
 Specialized securities company: A specialized securities company is a financial
institution that focuses on specific areas or types of financial services within the
securities market. Unlike general securities companies that offer a broad range of
financial services, specialized securities companies concentrate on niche areas, providing
expertise and tailored services in a particular segment of the financial industry.

1.2. Characteristics of securities company

- An intermediary on the stock market in:

+ Trading: The stock market operates on the principle of intermediation, where buyers and
sellers use financial intermediaries, typically securities companies, to facilitate transactions.
These companies receive and enter client orders into the stock exchange system, where the
matching process occurs. The securities company then reports the matched order price and
volume back to the client.
+ Payment : Securities companies play an intermediary role in facilitating payments between
buyers and sellers in the stock market. Typically, these companies are members of both the stock

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exchange and the Securities Depository Center. They rely on matched order data from these
entities to execute the settlement of funds and securities for their clients.

+ Providing information: Securities companies act as intermediaries in the market, providing

information through brokerage, investment advisory, portfolio management, and business
consulting. Leveraging advanced technology and a skilled workforce, they efficiently deliver
even analyzed information to customers, saving them time and effort compared to independent
information gathering and processing.

+ Capital between buyer and seller: Securities companies act as capital intermediaries between
buyers and sellers through lending money to buy securities or advance sales proceeds.

- A securities company is an intermediary organization that plays a role in providing services in

the stock market, a market that has significant influence on the economy. Therefore, a securities
company is a conditional business entity, meaning that it must meet the conditions specified by
the law about :

+ Capital requirements: Member companies in the stock market, especially securities firms, need
to meet capital requirements to contribute to building trust in the market. Capital requirements
must be designed to ensure that securities companies can conduct their business without
compromising the interests of customers or impacting market operations.
Different countries have specific regulations on the capital of securities companies. For
example, in Korea, the minimum capital for a securities company is 50 billion Won. Vietnamese
law has separate regulations for each type of securities company business. According to the
Securities Law 2007: legal capital for brokerage activities is 25 billion VND, guarantee level is
165 billion VND, investment consulting is 10 billion VND and self-employment is 100 billion
VND. Therefore, to carry out all business activities, a securities company must have a minimum
capital of 300 billion VND.
+ Human resources: The services provided by a securities company are financial services -
services with a high level of complexity and risk that affect not only investors but also the stock
market. Therefore, personnel in securities companies must possess competency, knowledge, and
experience in the fields of finance and law. According to legal regulations, employees of
securities companies must have a university degree or higher in banking, finance, or stock
market specialization, possess professional ethics, and hold a professional certificate issued by
the authorized agency.
+ Physical facilities: The law specifically regulates that securities companies must have a
registered business address for securities trading. Additionally, securities companies need to
meet certain conditions regarding physical infrastructure, technical systems, and software to
become members of the stock exchange. Thanks to the development of information systems,
securities companies can apply modern equipment during transactions, enhancing the services
provided to investors.

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+ Subject to strict control from the management agency : This means that securities companies
operate under close scrutiny and regulation from the relevant management agency. This
oversight is crucial for ensuring compliance with established rules, safeguarding the interests of
investors, and maintaining the overall integrity of the financial markets. Adherence to these
controls helps foster transparency, accountability, and trust within the financial industry,
ultimately contributing to a fair and secure environment for investors and market participants.
- Conflict of interest between securities company and customers : This potential issue arises
when the interests of the securities company may be at odds with those of its customers. For
example, conflicts could arise if the company prioritizes its own financial gains over the best
interests of clients or if it engages in practices that compromise the integrity of the market. It is
essential for securities companies to establish robust ethical guidelines, implement transparency
measures, and adhere to strict regulatory standards to mitigate and manage conflicts of interest,
ensuring fair and equitable treatment for their clients.

1.3. Role of securities company

- For issuers:
Securities companies play a crucial role in establishing mechanisms for capital mobilization for
businesses and the economy. One of the primary services they provide is acting as underwriters
and guarantors for securities issuances. This enables securities companies to bring the issued
securities to investors and facilitate their trading on the market. Leveraging their expertise and
experience, securities companies help streamline the issuance process, saving time, and ensuring
the successful launch of securities. This not only aids businesses in effective capital mobilization
but also contributes to a robust supply of commodities in the securities market.
- For investors:
Securities companies contribute to reducing transaction costs, minimizing risks, and enhancing
investment efficiency for investors. With securities companies serving as intermediaries,
investors do not need to seek partners for their trading activities, thereby minimizing the costs
associated with searching for, and the time and effort involved in finding, suitable counterparts.
Trading securities through securities companies increases the liquidity of the securities, helping
investors minimize risks and improve investment efficiency.
 For the stock market
Securities companies contribute to creating new products and services on the market. When
providing brokerage services, securities companies will grasp customer needs and reflect them to
the company's research and development department. From there, new products and services are
born that will more fully meet customer requirements. Therefore, brokerage activities are one of
the channels that provide ideas for designing products and services according to customer needs.
The result of that process is to create a diversity of products and services and diversify the
customer structure. With low service fees, it will increasingly attract more idle capital in society
for investment.
 For market management agencies
Securities companies help market regulators manage and monitor market activities effectively.
One of the obligations of a securities company is to provide information to investors and
regulatory agencies. Securities companies provide market information to investors through
activities such as brokerage and stock investment consulting. Securities companies provide

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information to regulatory agencies when performing operations such as securities underwriting,
securities brokerage, and securities trading. Information about the issuer, stock trading activities,
and investor ownership ratio are all reported by the securities company to the management
agency. Through this, management agencies can grasp developments in the market and control
and prevent market manipulation activities. Based on the information and reports reported by
securities companies, market management agencies can have appropriate measures and policies
to manage, monitor, and develop the market.

1.4. Operating principles of securities company

 Financial principles
Ensure capital requirements, capital structure, and accounting and reporting principles according
to the provisions of the law. Securities companies must ensure financial resources for their
securities trading commitments with customers.
Securities companies must separate customers' money and securities from the company's money
and securities accounts to avoid conflicts of interest. Securities companies are not allowed to use
customer securities as collateral to borrow capital or use customer money to buy securities unless
the customer agrees in writing.
 Principles of professional ethics
The stock market is a sensitive field with a great impact on the economy. Due to operating in
such a field, employees of the Securities Company must follow the professional ethical
principles issued by the Association of Securities Dealers. This set of principles ensures honesty
and fairness in the activities of securities company employees, thereby ensuring the rights of
investors in the market. Depending on the position in the securities company, employees will
have to follow different sets of ethical standards.

2. Basic operations of securities company

2.1. Securities brokerage

a. Overall about securities brokerage:

Definition: Securities brokerage is the intermediary or representative activity of buying
and selling securities for clients in order to earn a commission. A securities company
provides brokerage services, acting as an intermediary to execute buy and sell orders for
the company’s clients through the stock exchange or OTC market.

Types of brokerage services:

There are two types of brokerage services that securities companies provide:
 First, the full brokerage service where the securities company provides
information and recommendations for each investor and executes orders for those
investors.
 Second, the partial brokerage service where these companies only execute orders
upon client request and do not provide recommendations to the investors. If a

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 securities company provides this partial service, they may not maintain long-term
relationships with clients due to the insufficient service to be competitive.

b. A stockbroker’s skills:
Through brokerage activities, securities companies provide clients with investment
advisory products and services, as well as connect selling inventors to buying investors.
Therefore, the brokerage profession requires certain qualities, ethical standards, and
specific skills in both the job and in relationships with clients. The skills of a securities
broker are demonstrated in the following aspects:
 Communication skills: The qualities or attitude of a securities broker towards the
job, oneself, and clients need to be clearly communicated to most clients with
whom the broker conducts transactions. To succeed in sales (providing buying
and selling services), brokers must prioritize the interests of the clients above all
else. .
 Customer searching skills: There are several methods for acquiring customers, but
they can generally be grouped into the following six methods: leads generated by
the company or transferred accounts; customer referrals; business networking;
letter-writing campaigns; seminars; cold calling.
 Information mining skills: One of the principles of the brokerage profession is to
understand the client, know their financial capabilities, and their risk tolerance.
 Because of the development of information technology, nowadays many investors
have chosen to place orders online instead of through brokers as before. As a
result, securities companies can minimize costs because investing in online
trading systems is less expensive than brokers receiving orders via phone or order
forms. Online order placement services become useful when securities companies
have to compete for market share with each other.

2.2. Securities self-trading

a. Overall about securities self-trading:

Definition: Securities self-trading is when a securities company conducts buy and sell
transactions of securities for its own account. Typically, securities companies have a
specific department dedicated to this activity, including equity investment, bond
investment, and derivatives investment.

Securities self-trading contributes to the income of the securities company. Income from
self-trading comes from the price difference between buying and selling or from
dividends or interest paid by the issuing organization.

b. Requirements for self-trading operations:

Because self-trading involves a securities company trading securities for its own account,
it has the potential for conflicts of interest between the securities company and its clients.
Therefore, this activity needs to meet the following requirements:

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  First, there must be a separation between self-trading and brokerage activities, as
well as between self-trading and securities investment advisory. This separation
includes distinctions in personnel, business processes, and the capital and assets
of clients and the company.
 Second, priority should be given to executing client orders over the company’s
self-trading orders. Securities companies have significant advantages in access to
information and analytical capabilities compared to clients. To ensure fairness
between individual investors and professional investors, securities companies
must prioritize matching client orders over self-trading orders if the two orders
arrive simultaneously.
 Third, the third requirement involves market price stabilization. When acting as a
market maker for securities, a securities company must hold an adequate amount
of securities and cash to buy when there are no buyers and sell when there are no
sellers. In doing so, the securities company contributes to stabilizing market
prices.
 Fourth, the fourth requirement pertains to creating a market for newly issued
securities. When engaging in underwriting, a securities company is responsible
for stabilizing the price of the newly issued securities during the initial period.
c. Forms of trading in self-trading operations:
There are two forms of trading in self-trading operations: indirect trading and direct
trading.
 Indirect trading: involves the securities company placing buy and sell orders for
securities on the stock exchange, with the company’s orders potentially matching
with any investor’s orders on the market.
 Direct trading: involves bilateral trading between two securities companies or
between a securities company and a client through negotiation. The objects of
direct trading are types of securities registered for trading on the OTC market.

2.3. Underwriting securities

a) Overall about underwriting activity:

Definition: Underwriting securities is an activity in which securities companies help issuers
carry out procedures before offering securities, organize securities distribution and help stabilize
securities prices in the early stages after issuance.
b) General underwriting process:
Firstly, the securities company analyzes and evaluates the possibility of issuance, the contents
examined include: the company's operating situation; financial situation; domestic and
international markets; main product markets; legal aspects of issuance.
Secondly, after evaluating the issuance ability of the enterprise, the securities company will
prepare documents to register for public securities offering

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 Thirdly, the distribution activities take place after the issuer ensures that securities buyers can
access the Prospectus in the public securities offering registration documents published at the
locations specified in the Prospectus. newspaper release. At the same time, securities companies
must ensure fair and public distribution of securities and the minimum registration period to buy
securities for investors is 20 days.
Finally, the underwriting organization will purchase securities on the market at the expected
price to prevent investors from buying at a lower price.

2.4. Securities investment consultancy

a) Overall about consultancy activities:

_ Definition: Securities investment consulting is when a securities company determines the
characteristics and conditions of securities, evaluates securities, and analyzes the financial
situation of the issuing company to help investors buy and sell securities successfully.
b) Form of investment consultancy:
Securities consulting activities are classified according to the following criteria:
Firstly, according to the form of consulting activities: direct consulting (meeting customers
directly or through letters or phone calls) and indirect consulting (through publications and
books) to advise customers;
Second, according to the level of authorization of the consultant: suggested consulting
(suggestions to customers on appropriate investment methods, investment decisions are the
customer's) and authorized consulting (both consulting and deciding determined by customer
authorization)
Thirdly, according to the object of consulting activities: including consulting for issuing
organizations and investment consulting

2.5) Other operations of securities companies

A) Financial consultancy:

_ Financial consulting activities of securities companies are services that provide information
and recommendations on investment decisions and financial transactions to customers. Securities
companies often have financial experts and analysts with in-depth knowledge of the stock
market, finance and other investment tools.

_ Some activities of this consulting service:

*) Consulting on business restructuring, merging, acquisition:

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_ Consulting on business restructuring, mergers, and acquisitions of securities companies
involves providing advice and guidance to clients who are considering reorganizing their
securities business through mergers, acquisitions, or other restructuring activities.

+ Securities companies provide business consulting services to companies that want to

restructure their companies. Securities companies will evaluate businesses to make
recommendations on how to restructure.

+ Securities companies will also advise on mergers and acquisitions. The securities company will
evaluate the potential synergy value and determine whether implementing this merger or
acquisition transaction is beneficial to the buyer's business.

*) Consulting on business management, strategy:

_ Involves providing guidance and advice to help these companies optimize their operations,
enhance their competitiveness, and achieve their strategic objectives.

_ Strategic planning: The consulting firm works with the securities company's management team
to develop a clear and actionable strategic plan. This involves setting goals and objectives,
defining the company's target market segments, identifying growth opportunities, and outlining
the strategies and initiatives to achieve those objectives.

_ Business management: business management consultants typically work with organizations to

help them improve their performance, solve problems, and achieve their strategic objectives.
Consulting on business management involves providing expert advice, guidance, and support to
businesses in various areas of management.

=>Consultants work closely with clients, understand their unique challenges, and customize their
approach to meet specific needs.

*) Consulting on securities offerings and listings

_ Consulting on securities offerings and listings involves providing guidance and expertise to
companies that are looking to raise capital through the issuance of securities or list their
securities on a stock exchange.

_ Consulting on securities offering:

+ Securities companies will determine the type of securities: Common options include equity
(such as shares or stocks) and debt (such as bonds or notes). Assess the nature of your business
and financing needs to select the appropriate type.

+ Securities companies can conduct thorough due diligence to assess the legal, financial, and
operational aspects of your business. This helps to identify and address any potential risks or
issues before the offering.

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_ Securities listing: prepare and submit the necessary documentation to the stock exchange for
review. This typically includes financial statements, corporate governance information,
prospectus or offering documents, and compliance with specific listing criteria.

*) Consulting on business equitization, business valuation

_ Consulting on business equitization: includes all consulting activities related to the process of
transforming the company model, helping businesses achieve the highest results during and after
equitization

+ Consultants assist businesses in navigating the legal and regulatory framework related to
equitization. They help ensure compliance with relevant laws, regulations, and procedures
governing the equitization process. This can involve reviewing and interpreting laws, preparing
necessary documentation, and coordinating with regulatory authorities.

+ Consultants support businesses in preparing for the transition to a publicly traded company.
They assist in establishing investor relations functions, developing communication strategies,
and creating transparency in financial reporting. Consultants may provide guidance on corporate
governance practices, disclosure requirements, and investor communication protocols.

_ Consulting on business valuation: consultants conduct financial analysis and valuation of the
business to determine its fair value. This involves analyzing financial statements, assessing assets
and liabilities, and evaluating market conditions and industry trends. Consultants may use
various valuation methods, such as discounted cash flow analysis, comparable company analysis,
or asset-based valuation.

*) Consulting on financial analysis of business

_ Consulting on financial analysis of a securities company involves providing expertise and

guidance specific to the financial analysis of companies operating in the securities industry.

_ Securities company will analyze revenue, cost, financial risk assessment, risk management,
market and competitive, corporate strategy and business development.

_ Consulting on the financial analysis of a securities company requires a deep understanding of

the securities industry, regulatory frameworks, market dynamics, and financial performance
metrics specific to this sector.

B) Securities depository

_ Securities depository is the activity of storing and preserving customers' securities through
securities depository accounts. Securities depository registration is mandatory for customers who
want to trade securities. Securities companies preserve and store securities, helping customers
exercise their rights to their securities. When performing these activities, the securities company
will receive securities depository fees such as: fees for depositing, withdrawing and transferring
securities.

_ Securities depository activities include the following steps:

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Registration and recording, Depository book management , Securities transactions ,Providing
information, Ownership management

C) Exercising ownership rights on behalf of customers

_ Securities give owners certain rights: ownership of the board of directors, income rights, rights
to buy shares, etc. These rights are collectively called stock ownership rights. Because they carry
out securities depository activities for customers, securities companies also exercise the above
ownership rights for the securities they deposit.

_ Securities company's service of exercising ownership rights on behalf of customers includes

the following activities: collect opinions, vote according to authorization, and report results.

_ The service of exercising ownership rights on behalf of customers of securities companies

helps customers save time and effort when not directly participating in shareholder meetings. At
the same time, it ensures that customers' voting rights are exercised according to their wishes and
ensures that customers' interests are protected in the company's decision-making process.

D) Credit operations

_ Lending activities of securities companies are carried out through a number of activities such
as advance payment for selling securities, margin, repo, securities collateralization.

+ Margin lending: securities companies can provide margin loans to customers buying securities.
In this case, the customer puts assets such as stocks, bonds or investment funds as collateral and
receives a loan for a portion of the value of that asset.

+ Advance payment for selling securities: with this service, investors can receive money from
selling securities as soon as the transaction order is matched without having to wait until the
payment date.

+ Repo ( resale transaction ): is a transaction in which a customer buys/sells securities with a

term with a securities company, accordingly, the investor sells securities to the securities
company and commits to buying back those securities in the future.

+ Securities collateralization: is a type of service where investors can use their listed securities as
well as unlisted securities in the accepted list as collateral for investment loans.

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 II. SSI Securities Corporation
1. Introduction of SSI

1.1.1 Overview of SSI

 Established in December 1999 as the inaugural privately licensed securities firm

and the most modest player in the market at that juncture, SSI Securities
Corporation (SSI - HOSE) has evolved into a preeminent financial institution over
its 23-year tenure in the Vietnamese financial landscape. Boasting the swiftest
growth rate, the company has seen its charter capital surge by over 2500 times.
Backed by robust financial capacity, exemplary corporate governance, and a
proficient workforce, SSI delivers a comprehensive array of financial products and
services, aiming to optimize shareholders’ value. Presently, the company
maintains an extensive network of branches and transaction offices, spanning
major cities across Vietnam, including Hanoi, Ho Chi Minh City, and Hai Phong.
 Vision: SSI Securities Corporation (SSI) functions guided by the vision "The
Business of Success." Central to our suite of products and services is a
commitment to attaining success. We aim to unlock opportunities within financial
markets, transforming them into avenues for prosperity and growth. Channeling all
our resources and ideas, we are dedicated to fostering success for our clients, our
team, our shareholders, and the communities where we operate.
 Mission: SSI's objective is to link capital with opportunities, serving as the
unifying mission for all enterprises operating under the SSI brand. This mission
will continue to direct any forthcoming opportunities that the brand may pursue.

1.1.2 The development of SSI

Time Event Authorized capital

12/1999 SSI was established, headquartered in Ho Chi Minh 6.000.000.000 VNĐ
City, and operates with two main functions:
Securities investment consulting and Securities
brokerage.
07/2001 Engaged in four main business activities: Securities 20.000.000.000
investment consulting, Securities brokerage, VNĐ
Proprietary trading, and Securities custody.
07/2002 SSI established a branch in Hanoi, marking the
expansion of its business activities to northern

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 provinces.
6/2005 Operating with 6 main operations: Securities
investment consulting, Securities brokerage,
Proprietary trading, Securities custody, Portfolio
management, and Securities issuance guarantee
2006 - SSI shares were registered for trading at the Hanoi 500.000.000.000
Stock Exchange Center (now the Hanoi Stock VND
Exchange).
- Successfully implemented the first convertible
bond issuance on the Vietnam Stock Market for SSI
itself.
2007 - SSI officially listed at the City Securities Trading 799.999.170.000
Center. Ho Chi Minh City (now Ho Chi Minh City VND
Stock Exchange).

- SSI Fund Management Company (SSIAM), a one-

member limited liability company of SSI was
established.
- Established 2 more branches: Nguyen Cong Tru
Branch in District 1, City. HCM and Hai Phong
Branch in Hong Bang District, City. Hai Phong.
2008 Established Vung Tau Branch in City. Vung Tau, 1.366.666.710.000
Ba Ria Vung Tau Province. VND
2009 - Established Nha Trang Branch in City. Nha Trang, 1.533.334.710.000
Khanh Hoa province. VND
- SSI Fund Management Company Limited is the
first company to be granted a license to invest
abroad.
2010 Established My Dinh Branch in Tu Liem 3.511.117.420.000
District,Hanoi VND
2011 Established Tran Binh Trong Transaction Office at
Hoan Kiem District, Hanoi.
2015 - SSI is the first company in Vietnam to complete
procedures to adjust the ownership limit of foreign
investors to 100% of charter capital.
- Established Pham Ngoc Thach Transaction Office

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 in District 3, City. HCM.
2016 - Tran Binh Trong Transaction Office changed its
name to Tran Hung Dao Transaction Office, new
location at Floor 10, Capital Tower, 109 Tran Hung
Dao, Cua Nam Ward, Hoan Kiem District, Hanoi.
- Established Nguyen Chi Thanh Transaction Office
in Dong Da District, Hanoi.
2017 Established 2 more transaction offices: Nguyen Van 4.900.636.840.000
Cu Transaction Office and Nguyen Thi Minh Khai VND
Transaction Office both in District 1, City. HCM.
2018 - SSI changed the Company's name from "Saigon 5.100.637.840.000
Securities Joint Stock Company" to "SSI Securities VND
Joint Stock Company".
- Established Cach Mang Thang Tam Transaction
Office in District 3, City. HCM; Nguyen Huu Canh
Transaction Office in Binh Thanh District, City.
HCM.
2019 Established Le Loi Transaction Office in District 1,
City. HCM.
2020  SSI pioneered the organization of the 2020 6,029,456,130,000
General Meeting of Shareholders in the VND
online form. SS is the first and only stock
company to hold a meeting of the General
Meeting of Shareholders in this form,
demonstrating its efforts to increase the
interests of shareholders.
 'SSI is honored to receive the noble title of
"'Labor Hero"' in the renovation period
awarded by the Party and State. 'SSI is also
the first private securities company to be
awarded this noble title.
2021  SSI changed the name and location of 9,847,50,220,000
Nguyen Chi Thanh Transaction Office to VND
Van Phuc Transaction Office in Ba Dinh
District, Hanoi City.
 SSI changed the name and location of Tran
Hung Dao Transaction Office to Times City
Transaction Office in Hai Ba Trung District,

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 Hanoi City.
2022 SSl increases charter capital 14,911,301,370,000
VND

1.2 Business units of SSI Securities Corporation (SSI)

SSI operates with 5 main units:

· Securities services, digital services and wealth management
· Treasury
· Principal investment
· Investment banking
· SSI asset management (SSIAM)

1.3. Business performance SSI Securities Corporation (SSI)

Table 1.2. Revenue from activities of SSI Securities Joint Stock Company
Unit (VND)

Operati 1st quarter- 2nd quarter- 3rd quarter- 4th quarter-

ng 2022 2022 2022 2022
revenue

Gain 357.744.712. 216.894.967. 195.794.878. 216.829.505.

from 293 463 666 628
disposal
of
financial
assets at
FVTPL

Gain 62.171.609.8 8.194.086.21 17.127.728.9 29.673.167.7

from 37 7 66 42
revaluati
on of
financial
assets at

17
FVTPL

Dividend 177.957.142. 166.191.958. 228.254.632. 268.259.147.

, interest 017 148 381 570
income
from
financial
assets at
FVTPL

Gain 27.523.656.5 36.074.457.0 133.771.752 11.441.947.8

from 52 06 91
revaluati
on of
outstandi
ng
covered
warrant
payables

Gain 130.454.819. 123.403.390. 81.508.736.7 81.846.366.5

from 231 964 53 07
held-to-
maturity
(HTM)
investme
nts

Gain 566.429.306. 482.973.641. 406.133.381. 345.345.969.

from 766 867 399 834
loans and
receivabl
es

Gain - 2.609.491.22 75.213.151 168.298.151

from 6
available
-for-sale
(AFS)
18
financial
assets

Revenue 599.448.577. 449.430.423. 339.022.060. 318.757.045.

from 320 696 952 096
brokerag
e
services

Revenue 20.147.000.0 9.521.545.45 1.989.000.00 -

from 00 4 0
underwri
ting and
issuance
agency
services

Revenue 3.352.596.83 3.953.645.28 12.472.633.7 7.993.267.61

from 8 5 64 7
securities
investme
nt
advisory
services

Revenue 9.112.801.70 9.415.062.88 10.400.941.2 10.819.639.0

from 2 4 92 58
securities
custodian
services

Revenue 4.441.101.75 27.195.609.8 2.584.545.45 10.875.752.7

from 7 19 5 28
financial
advisory
services

Revenue 48.776.444.5 93.227.641.3 52.469.300.5 49.200.434.8

19
 from 83 25 27 30
other
operating
activities

Total 2.007.559.76 1.629.085.92 1.347.966.82 1.351.210.54

operating 8.896 1.354 5.058 2.652
revenue

Through table 1.2, we see that SSI's revenue gradually decreased over the quarters. Year-
end revenue increased compared to the third quarter thanks to dividends and interest
arising from financial assets.

With a sharp decline of 32.78% in the VN-Index, 2022 was full of fluctuations and
difficulties for Vietnam’s stock market. This was the steepest decline since the 2008
global financial crisis. After a period of abundance with “cheap money” injected by the
government during the height of the COVID-19 pandemic (2020–2021), liquidity
reduced sharply in the past year. In general, liquidity gradually experienced a downward
trend throughout 2022, in which the liquidity in the 4th quarter of 2022 was only one-
third of that recorded in the same quarter of the previous year.

Among SSI's financial operations, stock brokerage is the one that brings the largest
source of revenue for SSI. However, due to the terrible decline of the stock market,
revenue from stock brokerage operations in 2022 from the first quarter to the third quarter
tends to decrease sharply (from 599,448,577,320 to 339,022,060,952) until the fourth
quarter decreased slowly (from 339,022,060,952 to 318,757,045,096).

In 2022, the revenue of SSI Securities Services reached more than VND 3,564 billion,
contributing 54.6% to the total revenue. In which, revenue from brokerage, custody,
investment advisory achieved approximately VND 1,774 billion, accounting for 27% of
the total revenue. Revenue from margin lending and receivables was about VND 1,800
billion, accounting for 27.6% of the total revenue. SSI also recognized efforts in
improving the quality of brokerage and investment advisory services, effectively
connecting transactions, developing new products and features on the trading platform,
increasing the mass customer base, expanding the network of branches and brokers, and
meeting the unique demands of each customer segment. Notably, in 2022, SSI managed
to provide Wealth Management services, aiming to make SSI a comprehensive financial
solution hub, providing a diversified chain of financial services based on a wealth
analysis, advisory and optimization platform for customers.

20
Principal Investment was the second largest contributor to the Company’s revenue with
VND 2,069 billion, accounting for 31.7% of the total revenue. The regular trading
portfolio continued to focus on industry leaders with reasonable valuation, large liquidity,
growth prospects and transparency to limit risks amidst the highly volatile market. In
addition, the Company also traded derivative products such as VN30-Index future
contracts to mitigate risks for the portfolio and short-term investments.
Treasury, with a revenue of approximately VND 635 billion, was the Company’s third-
largest revenue contributor, accounting for 9.7% of the total revenue. Treasury continued
to affirm its important role in effectively managing the Company’s and customers’ funds,
constantly ensuring liquidity, and fully meeting the liquidity needs for business
continuity, and ensuring appropriate fund allocation to safe and highly effective
investment channels.
Investment Banking and other areas also saw a successful year of operation, achieving a
revenue of VND 94 billion in 2022 with many large deals implemented, ensuring high
advisory quality and considerable support to businesses. At the same time, SSI also
carried out both product and human resource restructuring to adapt to the new market
situation, maintaining the leading position of a reputable financial advisor and flexibly
responding to market volatility in a challenging context.
Asset Management contributed nearly VND 165 billion (2.5%) to the total revenue with
active acquisition of new investors, diversification of product distribution channels, and
development of new products such as Voluntary Pension Fund with the aim of
diversifying products for customers.

2. Securities brokerage operation in SSI

2.1 The brokerage process at SSI

 Open accounts for customers:

To conduct securities trading for customers, SSI must first carry out the
procedure of opening a trading account for each customer based on the
Account Opening Proposal and the Service Registration Contract. SSI
brokers explain the contents of the trading account opening contract and
related procedures when conducting securities trading for customers, assess
the financial capacity, risk tolerance, and profit expectations of the
customers. Brokers provide customers with documents on securities
investment, the stock market, and guidance on trading operations.
 Receiving orders from customers:
 Order transactions:
For each transaction, customers must place orders according to the
printed form or enter orders on the SSI Web Trading - SSI’s online
trading service. The order is the customer’s instruction to the broker to
buy or sell securities as they wish. Order must include all required
21
 content specified by the customer. This is a condition that ensures the
safety of the securities company and creates favorable conditions for
customers to place orders. Additionally, customers can place orders
by phone or fax.
 Content of the order:
 An order only has one trading direction, either to buy or sell.
 Quantity of securities to be bought or sold.
 Type of securities, name of securities, securities code; if the
securities are bonds, the order must include the bond’s maturity
date and interest rate.
 Brokerage company code.
 Order type.
 Customer’s name, identification number, account number.
 Date and time of order placement.
 Order validity period.
 Price.
 Order payment method: Transfer or cash.
 Order classification:
Based on different criteria, there are different types of orders:
 Based on trading direction: Buy order, sell order.
 Based on trading price: Market order and limit order.
 Based on the order validity period: Intraday order, day order,
weekly order…
 Order priority:
All transactions of a particular type of security can take place at the
trading counter on the exchange or through SSI Web Trading. When
executing orders, the broker must adhere to the order priority.
Priority 1: Price priority, the best price order is the buy order with the
highest buying price and the sell order with the lowest selling price.
Priority 2: Time priority, for orders with the same price, the order
placed first will be executed first.
Priority 3: Customer priority, for orders with the same price and time,
the individual investor’s order is prioritized over the institutional
investor’s order.
Priority 4: Quantity priority, for orders with all three factors equal, the
order with a larger quantity will be executed first.
 Legal nature of the order:
A trading order is considered as a fixed order placed by the customer
to the broker. Therefore, the responsibilities and rights of the customer
and the broker must be clearly defined and respected. The customer
22
 must adhere to the provisions in the order when the order is executed.
The broker must transmit and execute the order when there is a
corresponding match according to the regulations of the Exchange. An
order is a commitment not to be canceled within the order’s
timeframe, unless the customer requests and SSI accepts the
cancellation.
 Order execution:
The broker verifies the information filled in by the customer. Any necessary
erasures must be confirmed by the customer. The order forms must be fully
checked for the following data:
 Check that all data recorded on the form is complete.
 Verify the validity of the signature.
 Verify the customer’s securities deposit account balance for selling
orders.
 Ensure the customer’s trading cash balance is 100% of the value of
the securities for buying orders.
 Verify the validity of the order in terms of trading units, price
quotation units, and price fluctuation range.
For order forms that do not meet all the necessary standards, the broker is
responsible for contacting investors to address issues or consulting with the
department head before canceling the order.
For new customers opening their accounts for the first time or unfamiliar
customers, the broker must request the customer to present their ID card or
transaction card for verification.
If receiving trading orders from customers via internet, telephone, or fax,
SSI must comply with:
 The Electronic Transaction Law and relevant guidelines must ensure
the recording of the time the orders are received.
 For orders received over the telephone, fax, or the internet, SSI must
ensure the following principle: Confirm with customers before
entering orders into the transaction system and keep records as
evidence of customer orders.
 Implement appropriate remedies when unable to input customer
orders into the transaction system due to company errors.
SSI may request customers to deposit additional funds (for buying orders) or
adjust the quantity of securities for selling orders. If customers do not have
sufficient funds or securities, the company will freeze the amount of money
or securities until the end of the trading session.
SSI regulates the specific process for modifying incorrect orders.

23
 After verifying the accuracy and validity of the order form, SSI’s broker
forwards the order to the trading representative and simultaneously notifies
the offset payment department. The securities company’s representative at
the exchange enters the complete order into the system in the order of the
time the order was received.
 Confirm the implementation results of orders:
The broker at the exchange, after receiving the trading results, shall notify
the securities company’s trading department. The securities company’s
trading department aggregates the day’s trading results and transfers them to
the payment department for further settlement procedures. The company
also informs customers of the trading results.
 Payment and securities receipt:
Settling with customers involves the payment of securities transaction value,
fees, transaction fees, and ancillary fees:
 Securities transaction value: This is the buying or selling price of
securities determined by the official transaction price when orders are
matched.
 Transaction fees: SSI publishes a publicly available fee schedule, and
customers are advised to refer to each specific fee level before
conducting transactions.
The settlement date is conducted on a T+x basis, meaning that payment is
made x days after the transaction date. On the settlement date, the buyer
transfers the money through the designated payment bank, and the seller
transfers the securities through a transfer at the depository center. The
company will settle the money and securities for customers through their
accounts.

2.2 SWOT analysis of Securities brokerage operation in SSI

a) Strength:
Stock brokerage will help reduce costs and transaction time, thereby improving
investment efficiency. When making investments through brokerage services, with
the high professional qualifications and professional reputation of the broker, the
investor will be able to make the right decisions and make investments safely,
effectively and quickly instead of wasting money, effort and time to research
information before deciding to invest because the stock market is a place with
complex fluctuations and high risks.
Convenience is the difference in stock brokerage activities compared to other
brokerage services because when signing a brokerage contract with a securities

24
company, both the buyer and the seller, even if they do not know each other, can
still transact effective trading. Carrying out transactions through a stock brokerage
company helps transactions to be carried out quickly, accurately, effectively, and at
the same time can satisfactorily handle any disputes because this place ensures the
following conditions: materials as well as operational staff and fully implemented
regulations.
At a time when the stock market is growing strongly with many securities
companies springing up, SSI still maintains its position as a prestigious name in the
field of stock brokerage. With a history of development since 1999, SSI is one of
the oldest securities companies operating in the Vietnamese market. By the end of
2023, SSI ranked 2nd in the stock brokerage market share ranking on HOSE with
10.44% market share of the entire market.
b) Weaknesses:
Pressure on sales forces brokers to constantly give buying and selling
recommendations to customers, urging customers to trade in order to collect fees.
Many brokers have not been able to analyze the market situation, and have not
been able to provide useful advice to customers in making investment decisions. In
general, the capacity of staff in this field is still weak. People who have real ability
and work effectively will often tend to leave the company to work on their own
with customers or choose to become investors. Besides, there is still discrimination
among investors, many orders are abandoned or customers' orders are incorrectly
executed, causing damage to customers and loss of company reputation.
SSI is a large and reputable company in the market, this has been maintained for
many years. However, to be able to maintain its position, SSI needs to improve
recruitment standards and pay more attention to training staff with full knowledge,
strong expertise, and good working attitudes and have professional ethics.
c) Opportunities:
Stock brokerage is a tempting profession with attractive salaries and bonuses. A
stock broker's income is proportional to the customer's transaction value. Brokers
can also earn generous bonuses from familiar investors with monthly bonuses, with
the goal of giving them priority to place orders early. If brokers can develop into
flexible team leaders, managing hundreds or trillions of dong of customers. When
they can use their financial potential to guide each stock code in the right direction,
the income of these people is extremely large.
Stock brokerage jobs allow brokers to come into contact with many customers.
They are inherently intelligent, sharp and decisive people. They are the teachers

25
who impart business knowledge to brokers. Brokers receive a lot of information
from customers about different fields and industries, learn countless practical
lessons that no other profession can bring like the stock brokerage profession, and
help expand many relationships. Besides, the stock brokerage profession also
requires a lot of in-depth knowledge in all fields and many skills, so this is also an
opportunity for brokers to expand their knowledge, develop skills, bravery and
more mature with the profession.
In order to take advantage of the opportunities of the rapid growth in the number
of investors as well as the increasing demand for service quality, SSI continues to
plan to recruit more than 200 new brokerage staff in 2022. All candidates must go
through a careful selection process and participate in a recruitment training
program, ensuring high professional knowledge as well as good job performance
skills, improving the quality of consulting and care. client. Training succession
teams at all levels is placed at the heart of training activities and human resource
programs.
c) Threats:
Although the stock brokerage profession is full of appeal and temptation, it is
also extremely fierce, with a high chance of rejection. Mr. Nguyen Manh Hung -
Director of SSI's Personal Customer Brokerage Project also said, "Only less than
30% of brokers stay past the first 3 years at SSI". Brokers face heavy pressure from
finding customers and consulting. Securities is a harsh profession, when the market
is "up" the broker has a monthly income of hundreds of millions of dong, but when
the market is "down" a lot of employees are fired.
SSI's main business activities include bond and stock investment, deposit
investment, margin lending, issuance of covered warrants and derivative securities
products. Revenue and profits from these activities are affected by fluctuations in
interest rates, stock prices, possibly due to market conditions, possibly due to
changes in monetary policy and macroeconomic policies of Vietnamese
Government or other related countries, possibly due to geopolitical fluctuations
such as the East Sea situation, or due to factors such as epidemics, natural
disasters, wars... When profits unexpected fluctuations in interest rates and stock
prices can lead to the risk of reduced revenue and profits of SSI
Credit risk arises when the partner does not pay part or all of the debt obligations
to SSI when due; or when the Company cannot recover debt after handling all of
the customer's collateral assets, or cannot handle collateral assets due to illiquid
stocks, deep price drops or delisting, in addition to That means the customer does
not agree to add collateral.

26
 System and information security risks occur when the company cannot ensure
the stability of the information technology system, transaction system, risks related
to cyber attacks, and other threats. Internal network security affects the security of
business information, company and customer information.

III. Analyze and evaluate SSI's performance based on CAMEL

financial index
1. Capital adequacy criteria (C)

Regarding the scale of charter capital, SSI has a charter capital of 15,111 billion
VND, maintaining the top position in charter capital of the securities group, far
ahead of the second ranked company, VPBank Securities. SSI Company ensures
absolute compliance with regulations of the Securities Commission on contract
safety ratios, while enhancing customer service capacity.

Table 1.1. SSI's equity over the years

Unit: Billion VND

2020 2021 2022 2021/2020 2022/2021

+/- % +/- %
Equit 9.872 14.22 22.384 4.348 44,0 8.164 57,4
y 0 4

SSI's equity increases every year. In 2021, it will increase by 4,348 billion VND
compared to the same period in 2020, equivalent to an increase of 44.04%, in 2022
it will increase by 8,164 billion VND, equivalent to an increase of 57.4%
compared to 2021.

1.1. C1 = Equity/Total assets

In the formula for determining indicator C1, total assets is the value of assets
excluding trading deposits of investors. This is to ensure that investors' deposits are
separated from SSI's assets, avoiding conflicts of interest. This indicator shows the
capital level to total assets that SSI is actually allowed to use. Securities company's
assets include investors' trading deposits, so to calculate the value of assets in the
above formula, the assets in the balance sheet must be subtracted from the value of

27
investors' trading deposits. The value of investors' trading deposits is taken from
the financial statements of securities companies. However, according to Circular
No. 334/2016/TT-BTC dated December 27, 2016 of the Ministry of Finance
replacing Circular No. 210/2014/TT-BTC, investors' trading deposits have been
separated from the assets of securities companies and set off-balance sheet targets,
so the assets in the Balance Sheet of securities companies since 2016 have not
included the value of investors' trading deposits.

Table 1.2. C1 of SSI for the period 2020-2022

2020 2021 2022 2021/2020 2022/2021
+/- % +/- %
C1 0,276 0,280 0,429 0,004 1,44 0,149 53.21

According to Decision 617/QD-UBCK C1, which is lower than 51%, this target
does not ensure a safe threshold, but large securities companies with high debt
ratios will also lead to this target not being guaranteed. With a C1 ratio of less than
51%, it means that SSI's debt ratio is greater than 50%, business capital depends
heavily on debt sources, so if there are big fluctuations in the market, the ability to
cope with risks for SSI also faces many difficulties.

1.2. C2 = Equity/Regulatory capital

When the securities company begins to establish and operate, the equity capital
will be equal to the charter capital of the securities company and will always be
greater than or equal to the charter capital. Thus, when a securities company begins
to establish and operate, this indicator is always greater than or equal to 100%.
During operation, this indicator drops below 100%, which means that the securities
company is operating at a loss, causing shareholder equity to decrease and if
shareholder equity is lower than the charter capital level, this ratio will be less than
100%. When the equity/ authorized capital ratio of a securities company is below
100%, this means that the securities company does not ensure sufficient capital for
each operational operation.

Table 1.3. Target C2 of SSI for the period 2020-2022

28
 Năm 2020 Năm 2021 Năm 2022

C2 105.2% 119.6% 136.8%

In indicator C2, Authorized Capital is the capital level that SSI needs to meet in
order to be licensed to perform one or a certain number of operations. This capital
level depends on how many business operations SSI registers to perform as
presented in the legal framework. According to the table above, SSI's C2 increased
over the years and achieved a value of 100% or more, so SSI reached the safety
threshold at this criterion. This indicator is increasing, proving that equity capital is
constantly growing, showing the growth and development of SSI.

1.3. C3 = Capital adequacy ratio

The average available capital ratio of the system of securities companies has
gradually increased over the years and always reaches above the allowed safety
level. At the same time, the number of securities companies that fail to meet this
safety criterion has also decreased. According to Circular 226 and the Securities
Company Classification Regulations under Decision 617, securities companies
with a liquid capital ratio of less than 180% (corresponding to 40 points) are
considered unhealthy operations.

Available capital ratio in 2020

Available capital ratio in 2021

Available capital ratio in 2022

29
The period 2020-2022 continues to be an absolutely safe year for SSI in terms of
liquidity management, without any risk incidents arising. The ratio of available
capital is always maintained at a reasonably high level, higher than the ratio
prescribed by the State Securities Commission of 180%.

=> Thus, considering the level of capital adequacy through the three criteria
mentioned above, in general these criteria of SSI meet the safety thresholds
according to current regulations.

2. Asset quality indicators (A)

2.2.2.1. Ratio of Total Asset Value after risk adjustment/Total Assets (A1)
Table 2.5. Target A1 of SSI for the period 2020-2022.

2020 2021 2022

A1 99.46 111.23 84.19

Unit: %
According to Table 2.5, the ratio of total assets after the risk adjustment/total assets
of <BS all reaches 88% or more proving the quality of assets according to this
indicator is guaranteed, meaning the property of SSI is mostly safe assets.
Thus, if considering the whole system of Vietnamese securities companies within 5
years from 2017 to 2022, the ratio of the total value of total assets after an
adjustment/total assets of SSI has achieved safety levels. This rate is always worth
over 80%, proving that the quality of assets of the SSI system is always
guaranteed, accounting for a large proportion of the total assets of SSI being assets
with relatively low-risk levels.

2.2. Provision Ratio/(Short-term investment + Long-term investment +

Receivables)

30
 Table 2.6. Target A2 of SSI for the period 2020-2022

2020 2021 2022

Short -term provision 48 62 37

Provision for impairment of receivables 301 243 231
Finance and professional risk fund 392 438 -
Short -term investment 363 1.114 1.417
Long- term investment 6.249 3.689 2.773
Receivables 386 528 416
A2 10.5% 13.94% 5.818%

As mentioned above, accounting for a high proportion of the total assets of

securities companies are investments and receivables with high levels of risk. To
ensure the ability to compensate when risks occur, securities companies must make
provisions for risky assets. Provisions include Provision for short-term investment
devaluation, Provision for long-term investment devaluation, and Provision for bad
debts. These Reserves are included in the securities company's business operating
expenses.
The Provision amount depends on the size of investments and receivables and the
risk level of these items. Thus, if securities companies make provisions properly
and sufficiently according to regulations, the lower A2 ratio means that the assets
of the securities company are less risky and the quality of assets is guaranteed.

According to Table 2.6, we see that in 2020 and 2021, SSI's A2 ratio is higher than
8%, which is considered unsafe compared to other companies. SSI's A2 ratio in
2022 is below 8%, proving that SSI's assets are considered safe compared to the
general level of securities companies.

2.3. Ratio of receivables/Total assets (A3)

31
The quality of assets of securities companies depends greatly on the quality of
receivables. Therefore, to determine the asset quality of a securities company,
another indicator that is also used is the ratio of receivables/total assets (A3). The
higher this ratio, the more it proves that the security level of the securities company
will depend more on receivables. Therefore, to ensure financial security, the ratio
of receivables/total assets will have to be controlled at a certain ratio, this ratio
currently applied to Vietnamese securities companies is 50%. With this ratio, the
securities company will be less dependent on receivables, so the asset quality of
the securities company will be guaranteed.

Table 2.7. SSI's A3 target for the period 2020-2022

2020 2021 2022

Receivables 318 528 416

Total assets 35.770 50.793 52.226
A3 0.889 1.039 0.797

The calculation results show that the ratio of receivables/total assets of SSI reaches
the allowable safe level.

2.2.2. Evaluate SSI's asset quality

Due to the specific nature of securities business activities, a large proportion of

securities companies' assets are financial investments and receivables. Investments
include short-term financial investments and long-term financial investments,
usually investing in securities on the market. Receivables account for a large
proportion of loans that securities companies lend to customers to invest in
securities when using margin buying services. In the market, stock prices depend
on many factors and often fluctuate, so investments and receivables have high
potential risks. Therefore, to evaluate the asset quality of a securities company, the
value of assets after risk adjustment must be considered. The value of total assets
after risk adjustment is determined by subtracting the total value of potential risks

32
in the asset categories from Total Assets (excluding fixed assets). Total risk value
includes market risk value, liquidity risk value, and operational risk value. These
value items are determined according to Circular No. 226/2010/TT-BTC dated
December 31, 2010, and Circular No. 165/2012/TT-BTC dated October 9, 2012 of
the Minister of Finance ( (now Circular No. 87/2017/TT-BTC dated August 15,
2017) and taken from the VKD safety ratio reports of securities companies. In
general, the indicators in SSI's asset quality group over the years have largely met
the allowed safety level.

3. Evaluation of management quality (M)

3.1. Governance structure

SSI has established an executive management structure consistent with the
organization and performance standards of the securities company. Over the years,
SSI has always maintained a reasonable structure of members of the Board of
Directors and Supervisory Board, complying with set regulations.

3.2. Risk management

SSI builds a comprehensive risk management mechanism on all aspects, this
system helps SSI avoid risks in its business activities. The Board of Directors
always considers risk prevention to be an important and necessary policy in the
Bank's operations.
 Risk management and capital preservation
To manage the above types of risks, SSI's risk management organization is
arranged from the Head Office to branches and transaction offices throughout the
system. With a completely built risk management system and increasingly
improved risk management policies, the preservation of shareholders' capital over
the years has been guaranteed, and at the same time, the profit margin always
grows stably and remains at a high level.
 Manage interest rate risk
SSI has a department specializing in strategic research and monetary policy
prediction to be able to offer flexible operating policies for the company, thereby
managing interest rate risks. The Board uses many tools to monitor and manage
interest rate risk, including: repricing maturity deviation chart, duration of debt and
credit assets, sensitivity coefficient.
In a difficult market context, SSI advocates implementing interest rate risk
management according to the principle of prudence with measures to safely grow
mobilized capital and reduce reasonable operating costs.

33
  Credit risk management
SSI always seriously implements credit risk provisions in accordance with
the regulations of the State Bank of Vietnam with adequate provision for overdue
debts according to the decisions of the Credit Council.
 Manage liquidity risks
Current account risk management is implemented in an overall plan for
account risk management and response to account risk incidents. Since its
establishment and joining the Council. Always ensure to maintain very good
account ability and always comply with the regulations on accounts of the
Securities Commission.
 Legal risk management
SSI operates in the field of finance and currency, so in addition to the
general legal documents of the State for normal businesses, SSI is also governed
by a system of by-law documents of the Securities Commission.
 Human resource development activities
SSI is proud to be the only bank in Vietnam that has its own training center
to train employees. Employees annually participate in training courses inside and
outside the bank to improve their knowledge and professional qualifications.

SSI's revenue increased over the years in the period 2020-2022. SSI's
network of branches and transaction offices has been expanded and operates
effectively in many key cities. SSI has attracted and developed a dynamic team of
34
human resources including dozens of analysts and hundreds of individual and
organizational customer relationship experts who are well-trained and have good
ethics. , constantly striving to provide services and business solutions to customers
with the highest care, professionalism and responsibility.

4. Profitability indicator (E)

One of the goals in the operations of a securities company is high and stable
profitability. Therefore, when evaluating financial security of securities companies,
indicators measuring profitability are often considered. To measure the
profitability of securities companies, according to international practice, people
often use indicators such as ROS, ROA, ROE... In the current Vietnam stock
market conditions, ROS, ROA and ROE achieved 0% or more is considered to
ensure financial safety for securities companies.

4.1. Ratio of profit after tax/Total revenue (ROS)

Table 4.1. SSI's business performance results for the period 2020-2022
Năm 2020 Năm Năm 2022
2021

ROS 27,4% 34,6% 26,05%

Statistics show that, across the industry, SSI's ROS has always reached a high level
and maintained steadily in recent years. According to the safety score (ROS > 0%),
the system of Vietnamese securities companies has far exceeded this level.

4.2. ROA and ROE ratio

ROA and ROE reflect the level of profitability of assets and equity in a certain
period of time. This is a very important indicator in convincing investors to
become shareholders of securities companies. Normally, a high ROE shows a
securities company's ability to use equity effectively and then the securities
company can easily increase the size of equity to expand its business, contributing
to ensuring financial safety. In general, in Vietnamese market conditions, if ROE
reaches 0% or higher, the securities company's finances are considered safe.

35
 Table 4.2. ROA, ROE of SSI in the period 2020-2022
Năm 2020 Năm 2021 Năm
2022

ROA 3,5% 5,3% 3,25%

ROE 12,8% 19,0% 7,6%

SSI's ROA over the years has always been greater than 0. However, if compared
with international practice, ROA must reach 8% or more to ensure solid
profitability, then SSI's ROA has not been achieved and is still quite far away.
Compared to the safe level of minimum ROE of 0%, SSI's ROE is above this safe
level. According to international standards, ROE must reach 15% or more to be
considered safe. If compared to this ratio, only SSI's 2021 ROE achieved..
In 2021, SSI's ROE is 19.0%, a sharp increase compared to 2020, due to the sharp
increase in profit in 2021. This is a high ROE ratio, good risk management ability,
so profitability is always high. However, by 2022, SSI's Profit After Tax/Equity
will decrease to 7.6%.

5. Liquidity ratio (L)

Analyzing the liquidity of a securities company is the assessment of the

solvency of a securities company through criteria such as current ratio and
immediate payout ratio. The higher these indicators are, the better the stock
clearing ability of the securities company and vice versa.
5.1. Current solvency ratio (L1)
The current solvency ratio is determined through data on SSI's annual
financial statements.

Table: L1 of SSI in the period 2020-2022

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 2020 2021 2022

L 127.49 220.79 150.08

1

Unit: %

Considering the whole market, SSI's current liquidity ratio is always much
higher than the safety threshold (120%). According to international practice, the
ratio of total assets/short-term debt must reach 200% or more to be considered
safe. Thus, on average, this coefficient of SSI has been achieved, in 2020 and
2022, it has not reached the safety level according to international practices but
still ensures safety according to Vietnamese regulations.

5.2. Instant settlement ratio (L2)

If the instant liquidity ratio (L2) reaches 15% or more, it is considered safe
in liquidity, and 30% or more is considered to be the highest level of safety.
Calculation results of this indicator of Vietnamese securities companies.

Table: L2 of SSI in the period 2020-2022

2020 2021 2022

L2 52.62 67.76 63.57

Unit: %

SSI's immediate payment ratio is very stable, far exceeding the set safety
framework (15%). This result is because SSI has a very high safe immediate
payout ratio, which leads to a high ratio.

Thus, if considering liquidity according to two coefficients: current ratio and

immediate payout ratio, in general SSI has also met the safety thresholds.
However, too high a ratio of L1 and L2 will reduce the company's capital
efficiency. Therefore, SSI needs to maintain this ratio at an appropriate level to
both ensure liquidity and improve capital use efficiency.

5.3. Evaluate SSI's liquidity

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 In general, SSI's liquidity in the 2020-2022 period is quite good. This is
shown by SSI's current ratio, which is always above 120%, meaning SSI can use
total short-term assets to pay its short-term debts with the remaining balance.
redundant.

To improve liquidity, SSI needs to strengthen measures to collect short-term

receivables and minimize short-term debts. Specifically, SSI needs:

Strengthen cash flow management, ensuring timely collection of short-term

receivables.

Minimize short-term debt, especially short-term loans.

Strengthen liquidity risk prevention measures, such as purchasing liquidity

risk insurance.

6. Classify and evaluate performance based on the CAMEL framework

Detailed ranking of each factor in the CAMEL system for SSI operating on the
market has shown positive results in some factors, however, to comprehensively
evaluate the safety level of SSI, it is necessary to review and rank the overall score
based on weighted scores for all four financial factors C, A, E, L of SSI. SSI rating
results according to the CAMEL safety framework from 2020 to 2022 are shown in
the table below:

Table 2.14. SSI performance ranking results for the period 2020-2022

Year 2020 2021 2022

1. CAPITAL SUFFICIENCY
C1 27.6 28.0 42.9
C2 105.2 119.6 136.8
C3 309 358 384
2. ASSET QUALITY
A1 99.46 111.23 84.19
A2 10.5 13.94 5.818

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 A3 0.889 1.039 0.797
3. PROFITABILITY
E1 3.5 5.3 3.25
E2 12.8 19.0 7.6
4. LIQUIDITY QUALITY
L1 127.49 220.79 150.08
L2 52.62 67.76 63.57
Classification B A A

SSI's performance in 2021 and 2022 is rated overall as A, while the rating in 2019
is B. SSI has high safety indicators compared to the safety threshold.

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PREFERENCE

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