Chinatrust Commercial Bank, Ho Chi Minh City Branch · 2015. 6. 15. · Chinatrust Commercial Bank,...

Chinatrust Commercial Bank, Ho Chi Minh City Branch

Financial statements for the year ended

31 December 2012


Corporate Information

1

Banking Licence No. 04/NHNN-GP 6 February 2002

The Banking Licence was issued by the State Bank of Vietnam and is valid for 20 years from the date of

the Banking Licence.

Business Registration Certificate No. 107058 24 April 2002

The Branch’s Business Registration Certificate has been amended several times, the most recent of which

is dated 20 September 2011. The Business Registration Certificate and updates were issued by the

Department of Planning and Investment of Ho Chi Minh City.

Branch’s Management Ralph Wu General Manager

Henry Tseng Operation Manager

Winnie Chen Operation Manager

(from 2 February 2012)

Eric Tsai Head of Credit Department

Vu Thi Hoang Ha Head of Accounting Department

Registered Office Floor 9 - Kumho Asiana Plaza Saigon

39 Le Duan Street, Ben Nghe Ward

District 1, Ho Chi Minh City

Vietnam

Auditors KPMG Limited

Vietnam


Statement of the Branch’s Management

2

The Branch’s Management is responsible for the preparation and presentation of the financial statements

in accordance with Vietnamese Accounting Standards, the Vietnamese Accounting System for Credit

Institutions stipulated by the State Bank of Vietnam and the relevant statutory requirements. In the

opinion of the Branch’s Management:

(a) the financial statements set out on pages 4 to 68 are prepared and presented so as to give a true and

fair view of the financial position of Chinatrust Commercial Bank, Ho Chi Minh City Branch (the

“Branch”) as at 31 December 2012, and of the results of operations and the cash flows of the

Branch for the year then ended in accordance with the Vietnamese Accounting Standards, the

Vietnamese Accounting System for Credit Institutions stipulated by the State Bank of Vietnam and

the relevant statutory requirements; and

(b) at the date of this statement, there are no reasons to believe that the Branch will not be able to pay

its debts as and when they fall due.

The Branch’s Management has, on the date of this statement, authorized these financial statements for

issue.

On behalf of the Branch’s Management

Ralph Wu

General Manager

Ho Chi Minh City, 25 March 2013

3

INDEPENDENT AUDITORS’ REPORT

To the Owner


Scope

We have audited the accompanying balance sheet of Chinatrust Commercial Bank, Ho Chi Minh

City Branch (the “Branch”) as of 31 December 2012 and the related statements of income and

cash flows for the year then ended and the explanatory notes thereto which were authorised for

issue by the Branch’s management on 25 March 2013, as set out on pages 4 to 68. These

financial statements are the responsibility of the Branch’s management. Our responsibility is to

express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Vietnamese Standards on Auditing. Those standards

require that we plan and perform the audit to obtain reasonable assurance that the financial

statements are free of material misstatement. An audit includes examining, on a test basis,

evidence supporting the amounts and disclosures in the financial statements. An audit also

includes assessing the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the financial statements. We

believe that our audit provides a reasonable basis for our opinion.

Audit opinion

In our opinion, the financial statements give a true and fair view of the financial position of

Chinatrust Commercial Bank, Ho Chi Minh City Branch as of 31 December 2012 and of its

results of operations and its cash flows for the year then ended in accordance with Vietnamese

Accounting Standards, the Vietnamese Accounting System for Credit Institutions stipulated by

the State Bank of Vietnam and the relevant statutory requirements.

KPMG Limited

Vietnam

Investment Certificate No: 011043000345

Audit Report No: 12-01-114

___________________________________ __________________________________

Nguyen Thanh Nghi Tran Dinh Vinh

CPA No. 0304/KTV CPA No. 0339/KTV

Deputy General Director

Ho Chi Minh City, 25 March 2013


Floor 9 - Kumho Asiana Plaza Saigon, 39 Le Duan Street,

Ben Nghe Ward, District 1, Ho Chi Minh City

Balance sheet as at 31 December 2012

Form B02/TCTD

(Issued in accordance with Decision No

16/2007/QD-NHNN dated 18 April 2007 of the

Governor of the State Bank of Vietnam)

The accompanying notes are an integral part of these financial statements

4

Note

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million

Note 2(d) Note 2(d)

A ASSETS

I Cash on hand 4 1,014,963 551,780 21,140 11,492

II Balances with the State Bank

of Vietnam 5 11,225,631 13,639,375 233,807 284,081

III Deposits with and loans to

credit institutions 65,130,261 106,579,290 1,356,534 2,219,833

1 Deposits 6 59,274,092 98,182,799 1,234,561 2,044,951

2 Loans 6 6,006,169 8,396,491 125,097 174,882

3 Allowance for loans to

credit institutions 7 (150,000) - (3,124) -

VI Loans and advances to customers 225,366,789 293,459,620 4,693,939 6,112,177

1 Loans and advances to customers 8 227,095,594 295,822,461 4,729,947 6,161,390

2 Allowance for loans and

advances to customers 9 (1,728,805) (2,362,841) (36,008) (49,213)

VII Investment securities 10 34,750,566 717,284 723,785 14,940

1 Available-for-sale securities 33,782,072 - 703,613 -

2 Held-to-maturity securities 968,494 717,284 20,172 14,940

IX Fixed assets 364,657 470,570 7,595 9,801

1 Tangible fixed assets 11 364,657 470,570 7,595 9,801

a. Cost 867,545 851,252 18,069 17,730

b. Accumulated depreciation (502,888) (380,682) (10,474) (7,929)

XI Other assets 3,034,240 1,973,345 63,197 41,101

1 Receivables 12 219,953 257,197 4,581 5,357

2 Accrued interest and fees receivable 2,636,470 1,676,778 54,912 34,924

4 Other assets 177,817 39,370 3,704 820

TOTAL ASSETS 340,887,107 417,391,264 7,099,997 8,693,425




Balance sheet as at 31 December 2012 (continued)

Form B02/TCTD





5

Note

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million

Note 2(d) Note 2(d)

B LIABILITIES AND OWNERS’ CAPITAL

LIABILITIES

II Deposits and borrowings

from credit institutions 13 82,995,579 153,221,922 1,728,632 3,191,306

1 Deposits 13 342,453 197,112 7,133 4,105

2 Borrowings 13 82,653,126 153,024,810 1,721,499 3,187,201

III Deposits from customers 14 167,910,894 179,656,151 3,497,248 3,741,878

VII Other liabilities 4,873,239 4,862,306 101,500 101,272

1 Accrued interest and fee

payables

1,296,286 1,491,995 26,999 31,075

3 Other liabilities 15 3,036,426 2,829,784 63,243 58,939

4 Provision for off-balance sheet

commitments 16 540,527 540,527 11,258 11,258

TOTAL LIABILITIES

255,779,712 337,740,379 5,327,380 7,034,456

OWNERS’ CAPITAL

VIII Capital and reserves 17

1 Allocated capital 50,000,000 50,000,000 1,041,400 1,041,400

2 Reserves 5,272,581 4,454,104 109,817 92,770

5 Retained profits 29,834,814 25,196,781 621,400 524,799

TOTAL CAPITAL 85,107,395 79,650,885 1,772,617 1,658,969

TOTAL LIABILITIES AND

OWNERS’ CAPITAL 340,887,107 417,391,264 7,099,997 8,693,425




Balance sheet as at 31 December 2012 (continued)

Form B02/TCTD





6

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million

Note 2(d) Note 2(d)

OFF BALANCE SHEET ITEMS

I CONTINGENT LIABILITIES 22,585,731 44,224,105 470,416 921,100

1 Guarantees 7,408,873 6,144,069 154,312 127,969

2 L/C commitments 15,176,858 38,080,036 316,104 793,131

II OTHER COMMITMENTS 5,000,000 - 104,140 -

1 Undrawn loan commitments 5,000,000 - 104,140 -

25 March 2013

Prepared by: Approved by:

Vu Thi Hoang Ha Ralph Wu

Head of Accounting Department General Manager




Statement of income for the year ended 31 December 2012

Form B03/TCTD





7

Note

2012

USD

2011

USD

2012

Equivalent

VND million

2011

Equivalent

VND million

Note 2(d) Note 2(d)

1 Interest and similar income 18 15,551,693 23,038,223 323,911 479,840

2 Interest and similar expenses 18 (5,356,183) (8,276,178) (111,559) (172,376)

I Net interest income 18 10,195,510 14,762,045 212,352 307,464

3 Fee and commission income 19 1,411,801 2,077,778 29,405 43,276

4 Fee and commission expenses 19 (219,904) (186,201) (4,580) (3,878)

II Net fee and commission income 19 1,191,897 1,891,577 24,825 39,398

III Net gain from trading of

foreign currencies 20 811,184 1,297,481 16,895 27,024

VI Other income/(expense) - net 21 545,692 (48,501) 11,366 (1,010)

VIII Operating expenses 22 (5,519,829) (6,123,244) (114,967) (127,535)

IX Profit before allowance and

provision expenses 7,224,454 11,779,358 150,471 245,341

X Allowance and provision expenses - (38,829) - (809)

XI Profit before tax 7,224,454 11,740,529 150,471 244,532

7 Income tax expense - current 23 (1,767,944) (2,925,000) (36,823) (60,922)

8 Income tax expense - deferred 23 - - - -

XII Total income tax expenses 23 (1,767,944) (2,925,000) (36,823) (60,922)

XIII Net profit after tax 5,456,510 8,815,529 113,648 183,610

25 March 2013







Statement of cash flows for the year ended 31 December 2012

(Direct method)

Form B04/TCTD





8

2012

USD

2011

USD

2012

Equivalent

VND million

2011

Equivalent

VND million

Note 2(d) Note 2(d)

CASH FLOWS FROM OPERATING ACTIVITIES

01 Interest and similar income received 14,764,664 22,694,067 307,518 472,672

02 Interest and similar expenses paid (5,551,892) (8,220,762) (115,635) (171,222)

03 Net fee and commission income

received 1,191,897 1,891,577 24,825 39,398

04 Net receipts from foreign exchange

activities 823,708 1,366,949 17,156 28,471

05 Other income received 377 447 8 9

07 Salaries and operating expenses paid (5,955,648) (5,783,228) (124,044) (114,525)

08 Income tax paid (1,672,549) (3,051,187) (34,836) (63,550)

Cash flows from operating

activities before changes in

operating assets and liabilities

3,600,557 8,897,863 74,992 191,253

Changes in operating assets

09 Deposits with and loans to credit

institutions

(10,929,249) (8,396,491) (227,634) (174,882)

10 Investment securities (34,205,945) - (712,441) -

12 Loans and advances to customers 68,726,867 5,036,406 1,431,442 104,898

14 Other assets (113,727) (178,341) (2,369) (3,714)

Changes in operating liabilities

15 Deposits and borrowings from

credit institutions

(70,226,343) (39,578,078) (1,462,674) (824,332)

17 Deposits from customers (11,745,257) 9,099,770 (244,630) 189,530

21 Other liabilities 730,551 229,414 15,216 (1,150)

I NET CASH FLOWS FROM

OPERATING ACTIVITIES (54,162,546) (24,889,457) (1,128,098) (518,397)




Statement of cash flows for the year ended 31 December 2012

(Direct method - continued)

Form B04/TCTD





9

2012

USD

2011

USD

2012

Equivalent

VND million

Note 2(d)

2011

Equivalent

VND million

Note 2(d)

CASH FLOWS FROM INVESTING ACTIVITIES

01 Purchase of fixed assets (16,293) (392,692) (339) (8,179)

II NET CASH FLOWS FROM

INVESTING ACTIVITIES (16,293) (392,692) (339) (8,179)

IV NET CASH FLOWS DURING

THE YEAR (54,178,839) (25,282,149) (1,128,437) (526,576)

V CASH AND CASH

EQUIVALENTS AT THE

BEGINNING OF THE YEAR 112,373,954 137,656,103 2,340,525 2,606,106

VI FOREIGN EXCHANGE

TRANSLATION

DIFFERENCE - - - 260,995

VII CASH AND CASH

EQUIVALENTS AT THE END

OF THE YEAR (NOTE 24)

58,195,115 112,373,954 1,212,088 2,340,525

25 March 2013







Notes to the financial statements for the year ended

31 December 2012

Form B05/TCTD




10

These notes form an integral part of and should be read in conjunction with, the accompanying financial

statements.

1. Reporting Entity

Chinatrust Commercial Bank, Ho Chi Minh City Branch (the “Branch”) is a foreign bank branch licensed

in Vietnam of Chinatrust Commercial Bank, incorporated in Taiwan (“the Head Office”). The principal

activities of the Branch are to carry out banking activities under Banking Licence No. 04/NHNN-GP

issued by the State Bank of Vietnam (“SBV”) on 6 February 2002. The Banking Licence is valid for 20

years from the Banking Licence date.

As at 31 December 2012, the Branch had 67 employees (31/12/2011: 64 employees).

2. Basis of preparation

(a) Statement of compliance

The financial statements have been prepared in accordance with Vietnamese Accounting Standards, the

Vietnamese Accounting System for Credit Institutions stipulated by the State Bank of Vietnam and the

relevant statutory requirements.

(b) Basis of measurement

The financial statements, except for the statement of cash flows, are prepared on the accrual basis using

the historical cost concept. The statement of cash flows is prepared using the direct method.

(c) Annual accounting period

The annual accounting period of the Branch is from 1 January to 31 December.

(d) Accounting currency

The financial statements are prepared and presented in United States Dollars (“USD”).

For the purposes of preparation of the equivalent financial statements in Vietnam Dong (“VND”), the

financial statements are translated at the rate of exchange ruling at the reporting date. Differences arising

on this translation are recorded as a movement in the capital and reserves (Note 17).





31 December 2012 (continued)

Form B05/TCTD




11

3. Summary of significant accounting policies

The following significant accounting policies have been adopted by the Branch in the preparation of these

financial statements.

(a) Foreign currency transactions

Monetary assets and liabilities denominated in currencies other than USD are translated into USD at rates

of exchange ruling at the reporting date. Transactions in currencies other than USD during the year have

been translated into USD at rates approximating those ruling on transaction dates.

All foreign exchange differences are recorded in the statement of income.

(b) Cash and cash equivalents

Cash comprises cash balances and call deposits. Cash equivalents are short-term highly liquid

investments that are readily convertible to known amount of cash, are subject to an insignificant risk of

changes in value, and are held for the purpose of meeting short-term cash commitments rather than for

investment or other purposes.

Cash and cash equivalents include cash on hand, balances with the State Bank of Vietnam, deposits with

and loans to credit institutions and valuable papers with original terms to maturity of not exceeding three

months.

(c) Loans and advances to customers and loans to credit institutions

Decision No. 493/2005/QD-NHNN dated 22 April 2005 issued by the State Bank of Vietnam (“Decision

493”), which was amended and supplemented by Decision No. 18/2007/ QD-NHNN dated 25 April 2007

issued by the State Bank of Vietnam (“Decision 18”), requires specific allowance to be made for loans

and advances on a quarterly basis based on loan groups.

The specific allowance disclosed at the reporting date (i.e. 31 December) is determined utilising the

following allowance rates against principal outstanding as at 30 November less allowed value of collateral

as follows:






Form B05/TCTD




12

Group Overdue status Allowance

rate

1 Current Current loans or overdue loans less than 10 days. 0%

2 Special

mention

Loans being overdue between 10 days to 90 days; or

Loans having rescheduled terms of repayments for the first time (if customers

are assessed as being capable of repaying both principal and interest according

to the first revised terms of repayments for the case of enterprises and

organisational customers).

5%

3 Sub-

standard

Loans being overdue between 91 days and 180 days;

Loans having rescheduled terms of repayments for the first time except for the

loans with revised terms of repayments classified into the above mentioned

Group 2; or

Loans having exempt or reduced interest because customers are not able to

pay the interest according to contracts.

20%

4 Doubtful

Loans being overdue between 181 days and 360 days;

Loans having rescheduled terms of repayments for the first time and being

overdue less than 90 days according to the first rescheduled terms of

repayments; or

Loans having rescheduled terms of repayments for the second time.

50%

5 Loss

Loans being overdue more than 360 days;

Loans having rescheduled terms of repayments for the first time and being

overdue from 90 days or more according to the first rescheduled terms of

repayments;

Loans having rescheduled terms of repayments for the second time and being

overdue according to the second reschedule terms of repayments;

Loans having rescheduled terms of repayments for the third time; or

Blocked loans, or loans awaiting for settlements.

100%

Effective from 23 April 2012, the Branch adopted Decision No.780/QD-NHNN dated 23 April 2012

issued by State Bank of Vietnam (“Decision 780”) regarding the classification of loans being rescheduled

or having the repayment terms extended under which such loans are classified in the same loan groups as

before rescheduling or having the repayment terms extended if the borrower are assessed as having

positive business potential and ability to repay well these loans. This new accounting policy has been

applied by the Branch prospectively.

The adoption of Decision 780 did not have any effect to the Branch’s allowance for loans and advances to

customers as at 31 December 2012 and net profit for the year ended 31 December 2012 because of the

nature of the Branch’s loans to customers.

In addition, the Branch is required to make a general allowance of 0.75% of outstanding loans that are

classified from Group 1 to Group 4 as at 30 November. Such general allowance is required to be made in

full within 5 years from the effective date of Decision 493. As at 31 December 2012, the Branch provided

a general allowance of 0.75% of the above balances as at 30 November 2012 (31 December 2011: 0.76%

of the above balances as at 30 November 2011).

In accordance with the requirements Decision 493, loans and advances to customers are written-off

against allowance when loans and advances to customers have been classified to Group 5 or when

borrowers have declared bankruptcy or dissolved (for borrowers being organisations, enterprises) or

borrowers have been dead or missing (for borrowers being individuals).






Form B05/TCTD




13

(d) Provision for off-balance sheet commitments

In accordance with Decision 18, the Branch is also required to classify guarantees, acceptances and loan

commitments which are irrevocable and unconditional into relevant groups and make specific provisions

accordingly.

In addition, the Branch is required to make a general provision for outstanding guarantees, letters of credit

and loan commitments which are irrevocable and unconditional as at the reporting date. As at 31

December 2012, the Branch provided a general provision of 1.52% of the above balances as at 30

November 2012 (31 December 2011: 1.11% of the above balances as at 30 November 2011).

(e) Investment securities

(i) Classification

Available-for-sale investment securities are debt securities which are acquired for an indefinite period and

may be sold at any time (available-for-sale securities).

Held-to-maturity investment securities are debt securities with fixed or determinable payment and fixed

maturities where the Bank's management has the positive intention and ability to hold until maturity

(held-to-maturity securities).

(ii) Recognition

The Branch recognises the available-for-sale securities and held-to-maturity securities and on the date it

becomes a party to the contractual provisions of these securities (trade date accounting).

(iii) Measurement

Available-for-sale debt securities and held-to-maturity securities are initially stated at cost at the

acquisition date. They are subsequently measured at cost less allowance for diminution in value.

Allowance for diminution in value is made when the carrying value is higher than the market value. In

case that fair values or market prices of these securities are not available or cannot be determined reliably,

no allowance for diminution in value of these securities is made.

Premiums and discounts arising from purchases of available-for-sale debt securities and held-to-maturity

securities are amortised to the statement of income using effective interest rate method over the period

from the acquisition dates to maturity dates.

Post-acquisition interest income of available-for-sale debt securities and held-to maturity securities is

recognised in the statement of income on an accrual basis.






Form B05/TCTD




14

The allowance for diminution in the value of available-for-sale debt securities and held-to-maturity

securities as mentioned above is reversed if the subsequent increase in recoverable amount can be related

objectively to an event occurring after the allowance was recognised. An allowance 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 allowance had been recognised.

(iv) Derecognition

Available-for-sale securities and held-to-maturity securities are derecognised when the rights to receive

cash flows from the investments have expired or the Bank has transferred substantially all risks and

rewards of ownership.

(f) Tangible fixed assets

(i) Cost

Tangible fixed assets are stated at cost less accumulated depreciation. The initial cost of a tangible fixed

asset comprises of 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.

Expenditure incurred after the tangible fixed assets have been put into operation, such as repairs and

maintenance and overhaul costs, is charged to the statement of income in 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 capitalised as an

additional cost of tangible fixed assets.

(ii) Depreciation

Depreciation is computed on a straight-line basis over the estimated useful lives of items of tangible fixed

assets. The estimated useful lives are as follows:

Leasehold improvements 5 years

Office equipment 3 - 5 years

(g) Derivative financial instruments

Forward and swap currency contracts

Forward currency contracts are commitments to either purchase or sell a designated currency at a specific

future date for a specific exchange rate and are settled in cash. Swap currency contracts are commitments

to settle in cash at a future date based on differences between specified exchange rates.

Forward currency contracts and swap currency contracts are recorded at contract values in balance sheet

accounts. The differences between the currency amounts which are committed to buy/sell at contractual

exchange rate and the currency amounts translated at the spot exchange rate at effective date of the

forward currency contracts and swap currency contracts are amortised to the statement of income on a

straight-line basis over the terms of these contracts.






Form B05/TCTD




15

The positions of forward currency contracts are revalued at the spot exchange rate at reporting date and

the gains/losses are recognised in the statement of income.

(h) Other payables

Other payables are stated at their cost.

(i) Provisions

A provision, other than that as described in Note 3(d), is recognised if, as a result of a past event, the

Branch has a present legal or constructive obligation that can be estimated reliably, and it is probable that

an outflow of economic benefits will be required to settle the obligation. Provisions are determined by

discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the

time value of money and the risks specific to the liability.

Severance allowance

Under the Vietnamese Labour Code, when employees who have worked for 12 months or more (“eligible

employees”) voluntarily terminates his/her labour contract, the employer is required to pay the eligible

employees severance allowance calculated based on years of service and employees’ compensation at

termination. Provision for severance allowance has been provided based on employees’ years of service

and their current salary level.

Pursuant to Law on Social Insurance, effective from 1 January 2009 the Branch and its employees are

required to contribute to an unemployment insurance fund managed by the Vietnam Social Insurance

Agency. The contribution to be paid by each party is calculated at 1% of the lower of the employees’

basic salary and 20 times the general minimum salary level as specified by the Government from time to

time. With the implementation of unemployment insurance scheme, the Branch is no longer required to

provide severance allowance for the service period after 1 January 2009. However, severance allowance

to be paid to the existing eligible employees as of 31 December 2008 will be determined based on the

eligible employees’ years of service as of 31 December 2008 and their average salary for the six-month

period prior to the termination date.

The unemployment insurance is recorded as part of salary and related expenses in the statement of

income.

(j) Classification of financial instruments

Solely for the purpose of providing disclosures about the significance of financial instruments to the

Branch’s financial position and results of operations and the nature and extent of risk arising from

financial instruments, the Branch classifies financial instruments as follow:






Form B05/TCTD




16

(i) Financial assets

Financial assets 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:

It is considered by management as held for trading. A financial asset is considered as held for trading

if:

- it is acquired principally for the purpose of selling it in the near term;

- there is evidence of a recent pattern of short-term profit-taking; or

- 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 Branch as financial asset at fair value through profit or

loss.

Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and

a fixed maturity that the Branch has the positive intention and ability to hold to maturity, other than:

those that the Branch on initial recognition designates as financial assets at fair value through profit or

loss;

those that the Branch designates as available-for-sale; and

those that meet the definition of loans and receivables.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not

quoted in an active market, other than those:

that the Branch intends to sell immediately or in the near term, which are classified as held for

trading, and those that the entity on initial recognition designates as financial assets at fair value

through profit or loss;

that the Branch on initial recognition designates as available for sale; or

for which the Branch may not recover substantially all of its initial investment, other than because of

credit deterioration, which are classified as available-for-sale.






Form B05/TCTD




17

Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are designated as available for

sale or that are not classified as:

financial assets at fair value through profit or loss;

held-to-maturity investments; or

loans and receivables.

(ii) Financial liabilities

Financial liabilities at fair value through profit or loss

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 liability is considered as held for

trading if:

- 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

- 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 Branch as financial liability at fair value through profit

or loss.

Financial liabilities carried at amortised cost

Financial liabilities which are not classified as financial liabilities at fair value through profit or loss are

classified as financial liabilities carried at amortised cost.

The above described classification of financial instruments is solely for presentation and disclosure

purpose and is not intended to be a description of how the instruments are measured. Accounting policies

for measurement of financial instruments are disclosed in other relevant notes.






Form B05/TCTD




18

(k) Taxation

Income tax on the profit or loss for the year comprises of current and deferred tax. Income tax is

recognised in the statement of income except to the extent that it relates to items recognised directly to

equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the

reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the balance sheet liability 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

realisation or settlement of the carrying amount of assets and liabilities using tax rates enacted or

substantively enacted as at the reporting date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be

available against which the temporary difference can be utilised. Deferred tax assets are reduced to the

extent that it is no longer probable that the related tax benefit will be realised.

(l) Allocated capital

Allocated capital is classified as equity.

(m) Reserves

According to Decree No. 57/2012/ND-CP dated 20 July 2012 issued by the Government of Vietnam, the

Branch is required to make the following allocations before distribution of profits:

Annual allocation Maximum balance

Reserve to supplement allocated capital : 5% of profit after tax Allocated capital

Financial reserve : 10% of profit after tax 25% allocated capital

The purpose of the financial reserve is to cover losses incurred during the normal course of business. This

reserve and the reserve to supplement allocated capital are required by law and are non-distributable.

(n) Revenue

(i) Interest income

Interest income is recognised in the statement of income on an accrual basis, except for interest on loans

classified in Group 2 to Group 5 as defined in Note 3(c) which is recognised upon receipt.






Form B05/TCTD




19

(ii) Fee and commission income

Fees and commissions are recognised in the statement of income when earned.

(o) Interest expense

Interest expense is recognised in the statement of income on an accrual basis.

(p) Fee and commission expenses

Fee and commission expenses are recognised in the statement of income when incurred.

(q) Operating lease payments

Payments made under operating leases are recognised in the statement of income on a straight-line basis

over the term of the lease. Lease incentives received are recognised in the statement of income as an

integral part of the total lease expense.

(r) Off-balance sheet items

Commitments and contingent liabilities

From time to time, the Branch has outstanding commitments to extend credit. These commitments take

the form of approved loans and overdraft facilities. The Branch also provides financial guarantees and

letters of credit to guarantee the performance of customers to third parties. The contingent liabilities and

commitments may expire without being advanced in whole or in part. Therefore the amounts do not

represent a firm commitment of future cash flows.

(s) Nil balances

Items or balances required by the Decision No. 16/2007/QD-NHNN dated 18 April 2007 issued by the

Governor of the State Bank of Vietnam on promulgation of financial statement reporting for credit

institutions that are not shown in these financial statements indicate nil balances.






Form B05/TCTD




20

4. Cash on hand

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million

Note 2(d) Note 2(d)

Cash on hand in VND 605,669 255,891 12,615 5,330

Cash on hand in USD 409,294 295,889 8,525 6,162

1,014,963 551,780 21,140 11,492

Cash at 31 December 2012 included amounts denominated in currencies other than VND amounting to

USD409,294 (31/12/2011: USD295,889).

5. Balances with the State Bank of Vietnam

These consist of a compulsory reserve for liquidity and a current account.

Under the State Bank of Vietnam’s regulations relating to the compulsory reserve, banks are permitted to

maintain a floating balance for the compulsory reserve requirement (“CRR”). The monthly average

balance of the reserve must not be less than CRR rates multiply with preceding month’s average balances

of deposits in scope as follows:

Deposits in scope CRR rates

31/12/2012 31/12/2011

Preceding month's average balances of:

Deposits in foreign currencies with term of less than 12 months 8% 8%

Deposits in foreign currencies with term of and more than 12 months 6% 6%

Deposits in VND with term of less than 12 months 3% 3%

Deposits in VND with term of and more than 12 months 1% 1%

Deposits in foreign currencies from overseas banks 1% 1%

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million

Note 2(d) Note 2(d)

Compulsory reserve and current account 11,225,631 13,639,375 233,807 284,081






Form B05/TCTD




21

Effective year-end annual interest rates are as follows:

31/12/2012 31/12/2011

Deposits in VND

Within the compulsory reserve requirement 1.20% 1.20%

Exceeding the compulsory reserve requirement 0% 0%

Deposits in USD

Within the compulsory reserve requirement 0% 0%

Exceeding the compulsory reserve requirement 0.05% 0.05%

6. Deposits with and loans to credit institutions

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million

Note 2(d) Note 2(d)

Current accounts

Current accounts in VND 390,039 333,403 8,124 6,944

Current accounts in foreign currencies 15,884,053 3,373,307 330,833 70,259

Term deposits

Term deposits in VND - 42,922,988 - 894,000

Term deposits in foreign currencies 43,000,000 51,553,101 895,604 1,073,748

Loans to credit institutions

Loans in VND

6,006,169 3,396,491 125,097 70,742

Loans in foreign currencies

- 5,000,000 - 104,140

65,280,261 106,579,290 1,359,658 2,219,833

Effective year-end annual interest rates are as follows:

31/12/2012 31/12/2011

Current accounts in VND 0.24% - 0.50% 3.00%

Current accounts in foreign currencies 0.02% - 0.10% 0.10% - 0.60%

Term deposits in VND - 11.00% - 13.50%

Term deposits in foreign currencies 0.30% - 0.97% 0.20% - 0.57%

Loans in VND 5.50% - 8.00% 16.65%

Loans in foreign currencies - 2.56%






Form B05/TCTD




22

7. Allowance for loans to credit institutions

Allowance for loans to credit institutions consist of:

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million

Note 2(d) Note 2(d)

General allowance 150,000 - 3,124 -

Movements in general allowance for loans to credit institutions were as follows:

2012

USD

2011

USD

2012

Equivalent

VND million

2011

Equivalent

VND million

Note 2(d) Note 2(d)

Opening balance - - - -

Transfer from allowance for loans and

advances to customers (Note 9) 150,000 - 3,124 -

Closing balance 150,000 - 3,124 -






Form B05/TCTD




23

8. Loans and advances to customers

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million

Note 2(d) Note 2(d)

Loans to local corporates and individuals 224,115,911 292,921,762 4,667,886 6,100,974

Bills bought or valuable papers discounted 2,979,683 2,900,699 62,061 60,416

227,095,594 295,822,461 4,729,947 6,161,390

Loan portfolio by loan group were as follows:

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million Note 2(d) Note 2(d)

Group 1 - Current 227,095,594 295,822,461 4,729,947 6,161,390

Loan portfolio by term were as follows:

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million

Note 2(d) Note 2(d)

Short term 159,014,273 210,957,874 3,311,949 4,393,830

Medium term 47,637,292 53,915,066 992,190 1,122,943

Long term 20,444,029 30,949,521 425,808 644,617

227,095,594 295,822,461 4,729,947 6,161,390






Form B05/TCTD




24

Loan portfolio by industry sectors were as follows:

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million

Note 2(d) Note 2(d)

Agriculture, forestry and aquatics 20,417,526 12,703,501 425,256 264,589

Processing and manufacturing 172,351,190 231,616,947 3,589,731 4,824,117

Electricity, oil and gas supplying 22,861,543 39,593,852 476,160 824,661

Real estate 11,225,274 11,908,161 233,800 248,023

Construction 240,061 - 5,000 -

227,095,594 295,822,461 4,729,947 6,161,390

Loan portfolio by type of borrower were as follows:

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million

Note 2(d) Note 2(d)

State owned enterprises 26,265,603 35,258,965 547,060 734,374

Foreign invested companies 184,643,229 241,007,964 3,845,749 5,019,714

Joint venture companies 9,277,000 13,576,160 193,221 282,764

Limited liability companies 6,909,762 5,979,372 143,917 124,538

227,095,594 295,822,461 4,729,947 6,161,390

Effective year-end annual interest rates were as follows:

31/12/2012 31/12/2011

Loans and advances in VND 7.47% - 14.27% 5.00% - 19.50%

Loans and advances in foreign currencies 1.50% - 6.60% 1.79% - 6.60%






Form B05/TCTD




25

9. Allowance for loans and advances to customers

Allowance for loans and advances to customers consist of:

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million

Note 2(d) Note 2(d)

General allowance 1,728,805 2,362,841 36,008 49,213

Movements in general allowance for loans and advances to customers were as follows:

2012

USD

2011

USD

2012

Equivalent

VND million

2011

Equivalent

VND million

Note 2(d) Note 2(d)

Opening balance 2,362,841 2,158,555 49,213 40,866

Allowance made during the year - 204,286 - 4,255

Transfer to allowance for loans to credit

institutions (Note 7) (150,000) - (3,124) -

Provision reversed during the year (484,036) - (10,081) -

Foreign exchange translation differences - - - 4,092

Closing balance 1,728,805 2,362,841 36,008 49,213

As at 31 December 2012 and 2011, there were no specific allowance for loans and advances to customers

and no specific allowance for loans and advances to customers was made for the years then ended.

10. Investment securities

The held-to-maturity government bonds have a coupon rate of 12.3% per annum and a term to maturity of

3 years from 20 June 2012 to 20 June 2014 and are pledged with the SBV.

The available-for-sales government bonds have coupon rates from 9.3% to 12.3% per annum and a term

to maturity from 2 to 3 years.






Form B05/TCTD




26

11. Tangible fixed assets

2012 Leasehold

improvements

USD

Office

equipment

USD

Total

USD

Cost

Opening balance 365,596 485,656 851,252

Additions - 16,293 16,293

Closing balance 365,596 501,949 867,545

Closing balance - Equivalent VND million

(Note 2(d)) 7,615 10,454 18,069

Accumulated depreciation

Opening balance 11,481 369,201 380,682

Charge for the year 73,119 49,087 122,206

Closing balance 84,600 418,288 502,888


(Note 2(d)) 1,762 8,712 10,474

Net book value

Opening balance 354,115 116,455 470,570

Closing balance 280,996 83,661 364,657


(Note 2(d)) 5,853 1,742 7,595






Form B05/TCTD




27

11. Tangible fixed assets (continued)

2011 Leasehold

improvements

USD

Office

equipment

USD

Total

USD

Cost

Opening balance 206,310 490,157 696,467

Additions 365,596 27,096 392,692

Disposals (206,310) (31,597) (237,907)

Closing balance 365,596 485,656 851,252


(Note 2(d)) 7,615 10,115 17,730

Accumulated depreciation

Opening balance 143,003 346,690 489,693

Charge for the year 45,866 53,693 99,559

Disposals (177,388) (31,182) (208,570)

Closing balance 11,481 369,201 380,682


(Note 2(d)) 239 7,690 7,929

Net book value

Opening balance 63,307 143,467 206,774

Closing balance 354,115 116,455 470,570


(Note 2(d)) 7,376 2,425 9,801

Included in the costs are fixed assets costing USD294,063 (31/12/2011: USD199,879), which have been

fully depreciated as of 31 December 2012, but are still in active use.






Form B05/TCTD




28

12. Receivables

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million

Note 2(d) Note 2(d)

Deposit for office rental 215,912 219,976 4,497 4,582

Deductible value added tax 2,921 35,209 61 733

Other receivables 1,120 2,012 23 42

219,953 257,197 4,581 5,357

13. Deposits and borrowings from credit institutions

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million

Note 2(d) Note 2(d)

Demand deposits

Demand deposits in VND 101,671 137,547 2,118 2,865

Demand deposits in foreign currencies 240,782 59,565 5,015 1,240

Borrowings

Borrowings in VND - 1,440,369 - 30,000

Borrowings in USD 82,653,126 151,584,441 1,721,499 3,157,201

82,995,579 153,221,922 1,728,632 3,191,306


31/12/2012 31/12/2011

Demand deposits in VND 0.50% 0.50%

Demand deposits in foreign currencies 0.05% 0.05%

Borrowings in VND - 10.50%

Borrowings in USD 0.14% - 3.20% 0.25% - 3.20%






Form B05/TCTD




29

14. Deposits from customers

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million

Note 2(d) Note 2(d)

Current accounts

Current accounts in VND 26,952,305 30,043,518 561,363 625,746

Current accounts in foreign currencies 43,913,427 40,943,828 914,629 852,778

Term deposits

Term deposits in VND 35,560,705 51,386,623 740,658 1,070,281

Term deposits in foreign currencies 61,484,457 57,282,182 1,280,598 1,193,073

167,910,894 179,656,151 3,497,248 3,741,878

Deposits from customers by type of customers were as follows:

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million

Note 2(d) Note 2(d)

Economic entities 135,117,268 155,928,541 2,814,222 3,247,679

Individuals 32,793,626 23,727,610 683,026 494,199

167,910,894 179,656,151 3,497,248 3,741,878


31/12/2012 31/12/2011

Current accounts in VND 0.50% 0.50%

Current accounts in foreign currencies 0.05% 0.05%

Term deposits in VND 1.20% - 11.90% 6.00% - 13.50%

Term deposits in foreign currencies 0.15% - 1.50% 0.40% - 2.00%






Form B05/TCTD




30

15. Other liabilities

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million

Note 2(d) Note 2(d)

Management fees payable to the Head Office 1,309,705 1,800,440 27,279 37,500

Taxes payable (i) 576,704 433,398 12,012 9,027

Payable to employees 301,282 366,232 6,275 7,628

Provision for severance allowance (ii) 58,261 80,400 1,213 1,675

Remittance payables 688,266 68,672 14,335 1,430

Other payables 102,208 80,642 2,129 1,679

3,036,426 2,829,784 63,243 58,939

(i) Taxes payable:

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million

Note 2(d) Note 2(d)

Corporate income tax 491,027 395,632 10,227 8,240

Value added tax 13,408 12,049 279 251

Personal income tax 51,878 - 1,081 -

Withholding tax 20,391 25,717 425 536

576,704 433,398 12,012 9,027

(ii) Movements in provision for severance allowance were as follows:

2012

USD

2011

USD

2012

Equivalent

VND million

2011

Equivalent

VND million

Note 2(d) Note 2(d)

Opening balance 80,400 72,128 1,675 1,366

Provision made during the year 58,261 11,730 1,212 244

Provision used during the year (19,121) (3,458) (398) (72)

Transferred to other income (Note 21) (61,279) - (1,276) -

Foreign exchange translation differences - - - 137

Closing balance 58,261 80,400 1,213 1,675






Form B05/TCTD




31

16. Provision for off-balance sheet commitments

Movements in provision for off-balance sheet commitments were as follows:

2012

USD

2011

USD

2012

Equivalent

VND million

2011

Equivalent

VND million

Note 2(d) Note 2(d)

Opening balance 540,527 705,983 11,258 13,366

Provision reversed during the year - (165,456) - (3,446)

Foreign exchange translation differences - - - 1,338

Closing balance 540,527 540,527 11,258 11,258






Form B05/TCTD




32

17. Capital and reserves

Statement of changes in equity

Allocated

capital

Reserve to

supplement

allocated

capital

Financial

reserve

Retained

profits Total

USD USD USD USD USD

Balance at 1 January 2011 50,000,000 1,059,034 2,072,741 17,703,581 70,835,356

Net profit for the year - - - 8,815,529 8,815,529

Transfer to reserves - 440,776 881,553 (1,322,329) -

Balance at 1 January 2012 50,000,000 1,499,810 2,954,294 25,196,781 79,650,885

Net profit for the year - - - 5,456,510 5,456,510

Transfer to reserves - 272,826 545,651 (818,477) -

Balance at 31 December

2012 50,000,000 1,772,636 3,499,945 29,834,814 85,107,395

Equivalent VND million (Note 2(d))

Balance at 1 January 2011 946,600 20,050 39,241 335,165 1,341,056

Net profit for the year - - - 183,610 183,610


Foreign exchange

translation difference

94,800

2,008

3,930

33,565

134,303

Balance at 1 January 2012 1,041,400 31,239 61,531 524,799 1,658,969

Net profit for the year - - - 113,648 113,648


Balance at 31 December

2012 1,041,400 36,921 72,896 621,400 1,772,617






Form B05/TCTD




33

Allocated capital

As at 31 December 2012 and 2011, the Branch’s investor and its contributed capital were as follows:

Allocated capital

USD

Equivalent

VND million

Ownership

%

Note 2(d)

Chinatrust Commercial Bank 50,000,000 1,041,400 100%

The parent bank, Chinatrust Commercial Bank and its ultimate parent company, Chinatrust Financial

Holding Co., Ltd are incorporated in Taiwan.

18. Net interest income

2012

USD

2011

USD

2012

Equivalent

VND million

2011

Equivalent

VND million

Note 2(d) Note 2(d)

Interest and similar income

From deposits with and loans to credit

institutions 2,396,571 6,074,696 49,916 126,523

From loans and advances to customers 11,640,709 16,895,554 242,453 351,901

From investment securities 1,514,413 67,973 31,542 1,416

15,551,693 23,038,223 323,911 479,840

Interest and similar expenses

On deposits and borrowings from credit

institutions (1,075,665) (2,179,553) (22,404) (45,396)

On deposits from customers (4,280,518) (6,096,625) (89,155) (126,980)

(5,356,183) (8,276,178) (111,559) (172,376)

Net interest income 10,195,510 14,762,045 212,352 307,464






Form B05/TCTD




34

19. Net fee and commission income

2012

USD

2011

USD

2012

Equivalent

VND million

2011

Equivalent

VND million

Note 2(d) Note 2(d)

Fee and commission income

Guarantees 74,202 485,766 1,545 10,118

Settlement and cash services 841,437 996,500 17,525 20,755

Trade finance services 496,162 595,512 10,335 12,403

1,411,801 2,077,778 29,405 43,276

Fee and commission expenses

Settlement and cash services (219,904) (186,201) (4,580) (3,878)

Net fee and commission income 1,191,897 1,891,577 24,825 39,398

20. Net gain from trading of foreign currencies

2012

USD

2011

USD

2012

Equivalent

VND million

2011

Equivalent

VND million

Note 2(d) Note 2(d)

Gain from foreign exchange contracts 38,157,518 289,794,583 794,744 6,035,842

Loss from foreign exchange contracts (37,346,334) (288,497,102) (777,849) (6,008,818)

811,184 1,297,481 16,895 27,024






Form B05/TCTD




35

21. Other income/(expense) - net

2012

USD

2011

USD

2012

Equivalent

VND million

2011

Equivalent

VND million

Note 2(d) Note 2(d)

Other income

Transferred from severance allowance

(Note 15(ii)) 61,279 - 1,276 -

Reversal of general allowance for loans

and advances to customers 484,036 - 10,082 -

Others 377 447 8 9

545,692 447 11,366 9

Other expenses

Other expenses - (48,948) - (1,019)

Other income/(expense) - net 545,692 (48,501) 11,366 (1,010)

22. Operating expenses

2012

USD

2011

USD

2012

Equivalent

VND million

2011

Equivalent


Salaries and related expenses 2,254,270 2,110,217 46,952 43,952

Management fees from the Head Office 1,319,366 1,928,769 27,480 40,172

Office rental 1,188,238 1,048,974 24,749 21,848

Tax, duties and fees 187,583 429,231 3,907 8,940

Telecommunication expenses 122,238 127,450 2,546 2,655

Depreciation of fixed assets 122,206 99,559 2,545 2,074

Tools and equipment expenses 38,541 48,447 803 1,009

Others 287,387 330,597 5,985 6,885

5,519,829 6,123,244 114,967 127,535






Form B05/TCTD




36

23. Income tax

(a) Recognised in the statement of income

2012

USD

2011

USD

2012

Equivalent

VND million

2011

Equivalent


Current tax expense

Current year 1,767,944 2,925,000 36,823 60,922

Deferred tax expense - - - -

Income tax expenses 1,767,944 2,925,000 36,823 60,922

(b) Reconciliation of effective tax rate

2012

USD

2011

USD

2012

Equivalent

VND million

2011

Equivalent

VND million

Note 2(d) Note 2(d)

Profit before tax 7,224,454 11,740,529 150,471 244,532

Tax at the Branch’s tax rate 1,806,114 2,935,132 37,618 61,133

Non-deductible expenses 22,384 146,098 466 3,043

Deferred tax liabilities/(assets) previously

unrecognised 33,078 (156,230) 689 (3,254)

Over provision in prior years (93,632) - (1,950) -

1,767,944 2,925,000 36,823 60,922

(c) Applicable tax rate

The Branch has an obligation to pay the government income tax at the rate of 25% of taxable profit. The

income tax computation is subject to the review and approval of the tax authorities.






Form B05/TCTD




37

24. Cash and cash equivalents

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent


Cash on hand 1,014,963 551,780 21,140 11,492

Balances with the State Bank of Vietnam 11,225,631 13,639,375 233,807 284,081

Deposits with and loans to other credit

institutions with original terms of not

exceeding three months 45,954,521 98,182,799 957,141 2,044,952

58,195,115 112,373,954 1,212,088 2,340,525






Form B05/TCTD




38

25. Significant transactions with related parties

In the normal course of banking business, the Branch carries out transactions with related parties, mainly

with the Head Office and other entities within the Group.

As at the year-end and during the year, there were the following significant balances and transactions with

related parties:

2012

USD

2011

USD

2012

Equivalent

VND million

2011

Equivalent

VND million

Note 2(d) Note 2(d)

Transactions

Chinatrust Commercial

Bank, Head Office

Interest income 117,841 234,167 2,454 4,877

Interest expenses 360,630 844,975 7,511 17,599

Management fee

expense 1,319,366

1,928,769 27,480

40,172


Bank, Hong Kong Interest expense 167,000 409,270 3,478 8,524

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million

Note 2(d) Note 2(d)

Balances


Bank, Head Office

Deposits 43,000,000 23,553,102 895,604 490,564

Borrowings 24,367,410 78,441,584 507,524 1,633,781

Management

fee payables 1,309,705

1,800,440 27,279

37,500


Bank, Hong Kong Borrowings 4,285,716 7,142,858 89,263 148,771

Chinatrust Bank, USA Current accounts - 60,779 - 1,266


Bank, Singapore Current accounts 2,442 5,429 51 113






Form B05/TCTD




39

26. Concentration of assets, liabilities and off-balance sheet commitments by

geographical area

As at 31 December 2012

Total loan

balances

Total deposit

balances

Credit

commitments

USD USD USD

Domestic 231,421,334 222,046,645 27,585,731

Overseas - 28,859,828 -

231,421,334 250,906,473 27,585,731


Domestic 4,820,044 4,624,788 574,556

Overseas - 601,092 -

4,820,044 5,225,880 574,556


Total loan

balances

Total deposit

balances

Credit

commitments

USD USD USD

Domestic 304,218,952 247,247,033 44,224,105

Overseas - 85,631,040 -

304,218,952 332,878,073 44,224,105


Domestic 6,336,272 5,149,661 921,100

Overseas - 1,783,523 -

6,336,272 6,933,184 921,100






Form B05/TCTD




40

27. Employees’ benefits

2012 2011 2012 2011

USD

USD

Equivalent

VND million

Equivalent

VND million

Note 2(d) Note 2(d)

Total number of employees 67 64 67 64

Employees’ remunerations

1. Salaries 1,459,175 1,417,597 30,392 29,526

2. Bonus 412,813 414,376 8,598 8,631

3. Others 382,282 278,244 7,962 5,795

4. Total (1+2+3) 2,254,270 2,110,217 46,952 43,952

Average annual salary 21,779 22,150 454 461

Average annual remunerations 33,646 32,972 701 687

28. Obligation to State Budget

2012 Opening

balance

Movements Closing

balance Incurred Paid

USD USD USD USD

Corporate income tax 395,632 1,767,944 1,672,549 491,027

Value added tax 12,049 107,741 106,382 13,408

Personal income tax - 595,641 543,763 51,878

Withholding tax 25,717 61,677 67,003 20,391

433,398 2,533,003 2,389,697 576,704


Corporate income tax 8,240 36,823 34,836 10,227

Value added tax 251 2,244 2,216 279

Personal income tax - 12,406 11,325 1,081

Withholding tax 536 1,285 1,396 425

9,027 52,758 49,773 12,012






Form B05/TCTD




41

2011 Opening

balance

Movements Closing


USD USD USD USD

Corporate income tax 521,819 2,925,000 3,051,187 395,632

Value added tax 14,393 146,408 148,752 12,049

Personal income tax 278 667,531 667,809 -

Withholding tax 25,538 160,860 160,681 25,717

562,028 3,899,799 4,028,429 433,398

Opening

balance

Movements Foreign

exchange

translation

difference

Closing


Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Equivalent

VND million Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d)

Corporate income tax 9,880 60,922 63,550 988 8,240

Value added tax 272 3,049 3,098 28 251

Personal income tax 5 13,903 13,909 1 -

Withholding tax 483 3,350 3,347 50 536

10,640 81,224 83,904 1,067 9,027

29. Type and value of collateral from customers

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million

Note 2(d) Note 2(d)

Cash, notes, deposit accounts 13,345,915 32,741,414 277,969 681,938

Real estate 59,825,851 22,431,306 1,246,053 467,199

Movable assets 67,493,182 48,943,561 1,405,748 1,019,396

140,664,948 104,116,281 2,929,770 2,168,533






Form B05/TCTD




42

30. Contingent liabilities and commitments issued

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million

Note 2(d) Note 2(d)

Guarantees 7,408,873 6,144,069 154,312 127,969

L/C commitments 15,176,858 38,080,036 316,104 793,131

Undrawn loan commitments 5,000,000 - 104,140 -

27,585,731 44,224,105 574,556 921,100

Less: Marginal deposits - - - -

27,585,731 44,224,105 574,556 921,100

31. Financial instruments

(a) Financial risk management

Overview

The Branch has exposure to the following risks from its use of financial instruments:

credit risk;

liquidity risk; and

market risk.

This note presents information about the Branch’s exposure to each of the above risks, the Branch’s

objectives, policies and processes for measuring and managing risk.

The Branch’s Management oversees how management monitors compliance with the Branch’s risk

management policies and procedures, and reviews the adequacy of the risk management framework in

relation to the risks faced by the Branch.

(b) Credit risk

Credit risk is the risk of financial loss to the Branch if a customer or counterparty to a financial instrument

fails to meet its contractual obligations.






Form B05/TCTD




43

Management of credit risk

Limit Setting & Risk Concentration Management:

The Branch manages credit risk by lending to a diverse base of corporate customers in various

industry and geographic sectors. The Branch is able to assign credit risk limits based upon credit

history and industry information as well as balance exposure to country risk to prevent concentration

risk.

Internal Rating System:

In order to monitor and evaluate credit risk properly, the Branch implemented advanced internal

rating systems, which helps to differentiate and categorise different credit risks. The Branch’s

internal rating system measures the financial as well as the non-financial aspects of each borrower and

examines the impact of external economic or industry changes on each borrower before it determines

each borrower’s credit rating.

Credit Officer Mechanism:

Coupled with rating system, the Branch’s Credit Officer Mechanism is also the foundation of a risk-

based organization. Full credit approval of individual credit transactions must be given by at least

two credit officers. They must independently approve or decline each credit request according to their

respective delegated authorities. The Branch keeps credit officers’ compensation and performance

evaluations separate from sales and marketing divisions in order to ensure the officers’ independence.

Basel II Compliance:

Currently, the Branch is in the process of implementing IRB approach of Basel II Accord, which

equips the Branch with proactive framework of credit risk measurement and management. Not only

does the implementation comply with the incoming regulatory capital requirement, but IRB approach

is also applied to regular business operations.

Credit Information:

To prevent severe credit events, the Branch takes advantage of abundant default data from Vietnam’s

Credit Information Center (CIC), which holds all credit information among companies and

individuals in Vietnam. Exploited by the risk control units, the acquired data further facilitate the

Branch’s internal risk measurement and control by effectively scrutinizing customer-level line of

credit management, solvency of secured loan borrowers as well as value changes of collaterals.

Core Credit Policy:

The core credit policy is drawn up for governing the lending business of the Branch. It shall serve as

the highest principles for all relative departments to set up related guidelines and working manuals for

maintaining the quality of lending assets. The contents include: The principle of portfolio

management, customer level credit line management, credit product program management, credit risk

measurement, loan review management, impaired asset management, credit transaction delegation,

and compliance with laws and regulations etc.






Form B05/TCTD




44

Portfolio Monitoring:

For monitoring asset quality, the credit risk management units keep track of portfolio structure and

development of all credit products and submit related credit reports to relevant management level(s)

periodically. Those reports include: Credit portfolio review reports, relevant model validation reports

and country risk exposure report, etc.

Stress Testing:

In order to control the extreme credit risk during economic downturns, the Branch stress tests its

portfolio. We assume several economic scenarios and evaluate the impacts of portfolio structure and

credit loss. Stress testing will be included as a part of limit setting management.

Collateral

The amount and type of collateral required depends on an assessment of the credit risk of the

counterparty. Guidelines are implemented regarding the acceptability of types of collateral and valuation

parameters. The main types of collateral obtained are as cash, real estate properties, machinery and

equipments. Management monitors the market value of collateral, requests additional collateral in

accordance with the underlying agreement, and monitors the market value of collateral obtained during its

review of the adequacy of the allowance for impairment losses.

Commitments and guarantees

To meet the financial needs of customers, the Branch enters into various irrevocable commitments and

contingent liabilities. Even though these obligations may not be recognised on the balance sheet, they do

contain credit risk and are therefore part of the overall risk of the Branch.

Exposure to credit risk

As at 31 December 2012, the Branch’s credit risk arises principally from the Branch’s credit facilities to

customers, off - balance sheet commitments, balances and loans with credit institutions.

The Branch’s concentrations of risk are managed by client, by geographical region and by industry sector.

Not considering collateral assets, the Branch’s maximum exposure to credit risk as at 31 December 2012

and 2011 were as follows:






Form B05/TCTD




45


USD

Equivalent

VND million Note 2(d)


Balances with the State Bank of Vietnam 11,225,631 233,807

Deposits with and loans to credit institutions - gross 65,280,261 1,359,658

Loans and advances to customers - gross 227,095,594 4,729,947

Accrued interest and fees receivable 2,636,470 54,912

Receivables 217,032 4,520

306,454,988 6,382,844

Investment securities

Available-for-sales investment securities 33,782,072 703,613

Held-to-maturity investment securities 968,494 20,172

341,205,554 7,106,629

Off-balance sheet commitments

Guarantees 7,408,873 154,312

L/C commitments 15,176,858 316,104

Undrawn loan commitments 5,000,000 104,140

368,791,285 7,681,185


USD

Equivalent

VND million Note 2(d)


Balances with the State Bank of Vietnam 13,639,375 284,081

Deposits with and loans to credit institutions - gross 106,579,290 2,219,833

Loans and advances to customers - gross 295,822,461 6,161,390

Accrued interest and fees receivable 1,676,778 34,924

Receivables 221,988 4,624

417,939,892 8,704,852

Held-to-maturity investments

Held-to-maturity investment securities 717,284 14,940

418,657,176 8,719,792

Off-balance sheet commitments

Guarantees 6,144,069 127,969

L/C commitments 38,080,036 793,131

462,881,281 9,640,892






Form B05/TCTD




46

An analysis of collateral against of financial assets which are neither past due nor impaired at 31

December 2012 and 2011 were as follows:

As at 31 December 2012 Secured Unsecured Total

USD USD USD

Loans and receivables Balances with the State Bank of Vietnam - 11,225,631 11,225,631 Deposits with and loans to credit institutions - gross - 65,280,261 65,280,261 Loans and advances to customers - gross 15,002,965 212,092,629 227,095,594 Accrued interest and fees receivable - 2,636,470 2,636,470 Receivables - 217,032 217,032

15,002,965 291,452,023 306,454,988

Investment securities Available-for-sales investment securities - 33,782,072 33,782,072 Held-to-maturity investment securities - 968,494 968,494

15,002,965 326,202,589 341,205,554

Off-balance sheet commitments Guarantees - 7,408,873 7,408,873 L/C commitments - 15,176,858 15,176,858 Undrawn loan commitments - 5,000,000 5,000,000

15,002,965 353,788,320 368,791,285


Loans and receivables Balances with the State Bank of Vietnam - 233,807 233,807 Deposits with and loans to credit institutions - gross - 1,359,658 1,359,658 Loans and advances to customers - gross 312,482 4,417,465 4,729,947 Accrued interest and fees receivable - 54,912 54,912 Receivables - 4,520 4,520

312,482 6,070,362 6,382,844

Investment securities Available-for-sales investment securities - 703,613 703,613 Held-to-maturity investment securities - 20,172 20,172

312,482 6,794,147 7,106,629

Off-balance sheet commitments Guarantees - 154,312 154,312 L/C commitments - 316,104 316,104 Undrawn loan commitments - 104,140 104,140

312,482 7,368,703 7,681,185






Form B05/TCTD




47

As at 31 December 2011 Secured Unsecured Total

USD USD USD

Loans and receivables Balances with the State Bank of Vietnam - 13,639,375 13,639,375 Deposits with and loans to credit institutions - gross - 106,579,290 106,579,290 Loans and advances to customers - gross 10,924,392 284,898,069 295,822,461 Accrued interest and fees receivable - 1,676,778 1,676,778 Receivables - 221,988 221,988

10,924,392 407,015,500 417,939,892

Investment securities Held-to-maturity investment securities - 717,284 717,284

10,924,392 407,732,784 418,657,176

Off-balance sheet commitments Guarantees - 6,144,069 6,144,069 L/C commitments - 38,080,036 38,080,036

10,924,392 451,956,889 462,881,281


Loans and receivables Balances with the State Bank of Vietnam - 284,081 284,081 Deposits with and loans to credit institutions - gross - 2,219,833 2,219,833 Loans and advances to customers - gross 227,533 5,933,857 6,161,390 Accrued interest and fees receivable - 34,924 34,924 Receivables - 4,624 4,624

227,533 8,477,319 8,704,852

Investment securities Held-to-maturity investment securities - 14,940 14,940

227,533 8,492,259 8,719,792

Off-balance sheet commitments Guarantees - 127,969 127,969 L/C commitments - 793,131 793,131

227,533 9,413,359 9,640,892

As at 31 December 2012 and 2011, the Branch has no impaired financial assets.






Form B05/TCTD




48

(c) Liquidity risk

Liquidity risk is the risk that the Branch will encounter difficulty in meeting obligation as they fall due.

The Branch’s approach to managing liquidity is to ensure, as far as possible, that it will always have

sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without

incurring unacceptable losses or risking damage to the Branch’s reputation.

Management of liquidity risk

The Branch liquidity management policies require that:

If the amount of the transaction is significant, Treasury Department must be informed before the

transaction being processed.

Management of balance and liquidity must be established and limits are imposed.

Potential significant cash flows from foreign exchange activities must be monitored closely.

The Head Office commits to support the Branch USD200 million anytime to maintain the Branch in

good liquidity position.




Notes to the financial statements for the year ended 31 December 2012 (continued)

Form B05/TCTD




49

As at 31 December 2012 Not yet due

Up to

1 month

From

1 month to

3 months

From

3 months to

1 year

From

1 year to

5 years

Over

5 years Total

USD USD USD USD USD USD

Assets

Cash on hand 1,014,963 - - - - 1,014,963

Balances with the SBV 11,225,631 - - - - 11,225,631

Deposits with and loans to credit institutions - gross 45,954,521 - 15,000,000 4,325,740 - 65,280,261

Loans and advances to customers - gross 28,249,620 37,017,595 98,172,540 63,655,839 - 227,095,594

Investment securities - - - 34,750,566 - 34,750,566

Fixed assets - - - 364,657 - 364,657

Other assets 2,818,328 - - 215,912 - 3,034,240

89,263,063 37,017,595 113,172,540 103,312,714 - 342,765,912

Liabilities

Deposits and borrowings from credit institutions 80,138,434 - 2,857,145 - - 82,995,579

Deposits from customers 134,389,337 12,494,912 21,026,645 - - 167,910,894

Other liabilities 4,814,978 - - 58,261 - 4,873,239

219,342,749 12,494,912 23,883,790 58,261 - 255,779,712

Net liquidity gap (130,079,686) 24,522,683 89,288,750 103,254,453 - 86,986,200





Form B05/TCTD




50


Up to

1 month

From

1 month to

3 months

From

3 months to

1 year

From

1 year to

5 years

Over

5 years Total

Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d) Assets Cash on hand 21,140 - - - - 21,140

Balances with the SBV 233,807 - - - - 233,807

Deposits with and loans to credit institutions - gross 957,141 - 312,420 90,097 - 1,359,658

Loans and advances to customers - gross 588,383 771,002 2,044,738 1,325,824 - 4,729,947

Investment securities - - - 723,785 - 723,785

Fixed assets - - - 7,595 - 7,595

Other assets 58,700 - - 4,497 - 63,197

1,859,171 771,002 2,357,158 2,151,798 - 7,139,129

Liabilities Deposits and borrowings from credit institutions 1,669,123 - 59,509 - - 1,728,632

Deposits from customers 2,799,061 260,244 437,943 - - 3,497,248

Other liabilities 100,287 - - 1,213 - 101,500

4,568,471 260,244 497,452 1,213 - 5,327,380

Net liquidity gap (2,709,300) 510,758 1,859,706 2,150,585 - 1,811,749





Form B05/TCTD




51


Up to

1 month

From

1 month to

3 months

From

3 months to

1 year

From

1 year to

5 years

Over

5 years Total

USD USD USD USD USD USD

Assets

Cash on hand 551,780 - - - - 551,780

Balances with the SBV 13,639,375 - - - - 13,639,375

Deposits with and loans to credit institutions - gross 98,380,597 395,596 593,394 7,209,703 - 106,579,290

Loans and advances to customers - gross 37,275,216 76,378,767 120,187,131 61,981,347 - 295,822,461

Investment securities - 717,284 - - - 717,284

Fixed assets - - - 470,570 - 470,570

Other assets 1,753,369 - - 219,976 - 1,973,345

151,600,337 77,491,647 120,780,525 69,881,596 - 419,754,105

Liabilities

Deposits and borrowings from credit institutions 127,507,635 - 21,428,571 4,285,716 - 153,221,922

Deposits from customers 153,743,078 12,567,672 13,345,401 - - 179,656,151

Other liabilities 4,781,906 - - 80,400 - 4,862,306

286,032,619 12,567,672 34,773,972 4,366,116 - 337,740,379






Form B05/TCTD




52


Up to

1 month

From

1 month to

3 months

From

3 months to

1 year

From

1 year to

5 years

Over

5 years Total

Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d) Assets Cash on hand 11,492 - - - - 11,492

Balances with the SBV 284,081 - - - - 284,081

Deposits with and loans to credit institutions - gross 2,049,071 8,239 12,359 150,164 - 2,219,833

Loans and advances to customers - gross 776,368 1,590,817 2,503,258 1,290,947 - 6,161,390

Investment securities - 14,940 - - - 14,940

Fixed assets - - - 9,801 - 9,801

Other assets 36,519 - - 4,582 - 41,101

3,157,531 1,613,996 2,515,617 1,455,494 - 8,742,638

Liabilities Deposits and borrowings from credit institutions 2,655,729 - 446,314 89,263 - 3,191,306

Deposits from customers 3,202,161 261,759 277,958 - - 3,741,878

Other liabilities 99,597 - - 1,675 - 101,272

5,957,487 261,759 724,272 90,938 - 7,034,456







Form B05/TCTD




53

(d) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and

equity prices will affect the Branch’s results of operations or the value of its holdings of financial

instruments. The objective of market risk management is to manage and control market risk exposures

within acceptable parameters, while optimising the return.

Management of market risks

Position Control: only position of foreign exchange trading is allowed at the Branch. The branch is

allowed to maintain long or short position of foreign currencies in the limit of total of

positive/negative foreign currency follow Circular No. 07/2012/QD-NHNN: not exceeds 20% of

financial institution’s own capital.

The Branch is only permitted for trading under the market risk limits which are approved by the Head

Office on an annual basis.

Limit of interest rate risk of the present value per basis point (“PVBP”): On monthly basis, Back

office is responsible to prepare assets and liabilities management (“ALM”) report including of the

Branch’s assessment report of Balance sheet/Statement of income, report of foreign currency trading

department and report to the Head Office’s market risk management department for supervising.

Stop loss limit: the stop loss limit for the Branch’s foreign currency trading department which was

approved by the Head Office is USD400,000 per annum.

Exposure to market risks

As at 31 December 2012 and 2011, the Branch’s market risks are deemed to be affected by two main

components: change in foreign exchange rates and interest rates.

(i) Currency risk

Currency risk is the risk that the value or future cash flows of a financial instrument will fluctuate because

of changes in foreign exchange rates.

The Branch was incorporated and operates in Vietnam and uses USD as its reporting currency. The main

currencies in which the Branch uses are USD and VND. The Branch’s loans to customers were mainly

denominated in USD and partly in VND. However, some of the Branch’s other assets are in currencies

other than the reporting currency and VND. The Branch’s management has set limits on positions by

currency. Positions are monitored on a daily basis and hedging strategies used to ensure positions are

maintained within established limits.


Floor 9 - Kumho Asiana Plaza Saigon, 39 Le Duan Street



Form B05/TCTD




54

As at 31 December 2012 VND USD EUR Others Total

USD USD USD USD USD

Assets

Cash on hand 605,669 409,294 - - 1,014,963

Balances with the SBV 1,554,913 9,670,718 - - 11,225,631

Deposits with and loans to credit institutions - gross 6,396,208 58,599,375 281,023 3,655 65,280,261

Loans and advances to customers - gross 27,516,173 199,173,322 86,664 319,435 227,095,594

Investment securities 34,750,566 - - - 34,750,566

Fixed assets - 364,657 - - 364,657

Other assets 2,022,648 1,010,165 369 1,058 3,034,240

72,846,177 269,227,531 368,056 324,148 342,765,912

Liabilities and owners’ equity

Deposits and borrowings from credit institutions 101,671 82,319,796 66,275 507,837 82,995,579

Deposits from customers 62,513,009 105,077,465 281,664 38,756 167,910,894

Other liabilities 1,199,366 3,673,832 28 13 4,873,239

Capital and reserves (*) - 86,986,200 - - 86,986,200

63,814,046 278,057,293 347,967 546,606 342,765,912

FX position on balance sheet 9,032,131 (8,829,762) 20,089 (222,458) -

FX position off-balance sheet - (231,455) - 231,643 188

FX position on and off-balance sheet 9,032,131 (9,061,217) 20,089 9,185 188





Form B05/TCTD




55

VND USD EUR Others Total

As at 31 December 2012 Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d)

Assets

Cash on hand 12,615 8,525 - - 21,140

Balances with the SBV 32,386 201,421 - - 233,807

Deposits with and loans to credit institutions - gross 133,221 1,220,508 5,853 76 1,359,658

Loans and advances to customers - gross 573,107 4,148,382 1,805 6,653 4,729,947

Investment securities 723,785 - - - 723,785

Fixed assets - 7,595 - - 7,595

Other assets 42,127 21,040 8 22 63,197

1,517,241 5,607,471 7,666 6,751 7,139,129


Deposits and borrowings from credit institutions 2,118 1,714,557 1,380 10,577 1,728,632

Deposits from customers 1,302,021 2,188,553 5,867 807 3,497,248

Other liabilities 24,980 76,519 1 - 101,500


1,329,119 5,791,378 7,248 11,384 7,139,129

FX position on balance sheet 188,122 (183,907) 418 (4,633) -


FX position on and off-balance sheet 188,122 (188,728) 418 192 4





Form B05/TCTD




56


USD USD USD USD USD

Assets

Cash on hand 255,891 295,889 - - 551,780

Balances with the SBV 5,368,743 8,270,632 - - 13,639,375

Deposits with and loans to credit institutions - gross 46,652,882 58,127,433 1,785,037 13,938 106,579,290

Loans and advances to customers - gross 33,334,387 261,179,718 - 1,308,356 295,822,461


Fixed assets - 470,570 - - 470,570

Other assets 750,202 1,216,021 122 7,000 1,973,345

87,079,389 329,560,263 1,785,159 1,329,294 419,754,105


Deposits and borrowings from credit institutions 1,577,916 150,155,824 - 1,488,182 153,221,922

Deposits from customers 81,430,141 96,440,585 1,777,215 8,210 179,656,151

Other liabilities 1,280,823 3,581,234 17 232 4,862,306


84,288,880 332,191,369 1,777,232 1,496,624 419,754,105

FX position on balance sheet 2,790,509 (2,631,106) 7,927 (167,330) -


FX position on and off-balance sheet 2,790,509 (2,811,408) 7,927 12,974 2





Form B05/TCTD




57

(*) The allowance for loans and advances to customers and loans to credit institutions was added back to the retained profits included in capital and reserves.


Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d)

Assets

Cash on hand 5,330 6,162 - - 11,492

Balances with the SBV 111,820 172,261 - - 284,081

Deposits with and loans to credit institutions - gross 971,686 1,210,678 37,179 290 2,219,833

Loans and advances to customers - gross 694,289 5,439,851 - 27,250 6,161,390


Fixed assets - 9,801 - - 9,801

Other assets 15,625 25,327 3 146 41,101

1,813,690 6,864,080 37,182 27,686 8,742,638


Deposits and borrowings from credit institutions 32,865 3,127,445 - 30,996 3,191,306

Deposits from customers 1,696,027 2,008,665 37,016 170 3,741,878

Other liabilities 26,677 74,590 - 5 101,272


1,755,569 6,918,882 37,016 31,171 8,742,638

FX position on balance sheet 58,121 (54,802) 166 (3,485) -

FX position off-balance sheet - (3,755) - 3,755 -

FX position on and off-balance sheet 58,121 (58,557) 166 270 -






Form B05/TCTD




58

At 31 December 2012, assuming that all other variables, in particular interest rates, remain constant, had

VND strengthen or weaken against USD by 2%, the increase or decrease respectively in profit and equity

would have amounted to approximately USD132,825 (31/12/2011: 10% and USD190,261).

(ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate

because of changes in market interest rates.

The repricing period of effective interest rate is the remaining period from the reporting date to the nearest

repricing date of interest rate applicable to assets and liabilities which are subject to changes in interest

rates.

The following table shows the Branch’s assets and liabilities categorised by the earlier of contractual

repricing or maturity date at the reporting date:





Form B05/TCTD




59

As at 31 December 2012 Overdue

Free of Interest

Up to 1 month

From 1 to 3 months

From 3 to 6 months

From 6 to 12 months

From 1 to 5 years

Over 5 years Total

USD USD USD USD USD USD USD USD USD

Assets

Cash on hand - 1,014,963 - - - - - - 1,014,963

Balances with the SBV - - 11,225,631 - - - - - 11,225,631

Deposits with and loans to credit institutions

- gross - - 49,968,554 311,707 - 15,000,000 - - 65,280,261

Loans and advances to customers - gross - - 174,200,258 52,365,574 529,762 - - - 227,095,594

Investment securities - - - - - - 34,750,566 - 34,750,566

Fixed assets - 364,657 - - - - - - 364,657

Other assets - 3,034,240 - - - - - - 3,034,240

- 4,413,860 235,394,443 52,677,281 529,762 15,000,000 34,750,566 - 342,765,912

Liabilities

Deposits and borrowings from credit institutions - - 78,709,863 4,285,716 - - - - 82,995,579

Deposits from customers - - 134,389,337 12,494,912 14,398,518 6,628,127 - - 167,910,894

Other liabilities - 4,873,239 - - - - - - 4,873,239

- 4,873,239 213,099,200 16,780,628 14,398,518 6,628,127 - - 255,779,712

Interest sensitivity gap of balance sheet

items - (459,379) 22,295,243 35,896,653 (13,868,756) 8,371,873 34,750,566 - 86,986,200

Interest sensitivity gap of off-balance

sheet items - - - 5,000,000 - - - - 5,000,000

Total interest sensitivity gap - (459,379) 22,295,243 40,896,653 (13,868,756) 8,371,873 34,750,566 - 91,986,200





Form B05/TCTD




60


Overdue

Free of Interest

Up to 1 month

From 1 to3 months

From 3 to 6 months

From 6 to 12 months

From 1 to 5 years

Over 5 years

Total

Equivalent VND million









Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d)

Assets

Cash on hand - 21,140 - - - - - - 21,140

Balances with the SBV - - 233,807 - - - - - 233,807

Deposits with and loans to credit

institutions - gross

- - 1,040,745 6,492 - 312,421 - - 1,359,658

Loans and advances to customers - gross - - 3,628,243 1,090,670 11,034 - - - 4,729,947

Investment securities - - - - - - 723,785 - 723,785

Fixed assets - 7,595 - - - - - - 7,595

Other assets - 63,197 - - - - - - 63,197

- 91,932 4,902,795 1,097,162 11,034 312,421 723,785 - 7,139,129

Liabilities

Deposits and borrowings from credit institutions - - 1,639,369 89,263 - - - - 1,728,632

Deposits from customers - - 2,799,061 260,244 299,892 138,051 - - 3,497,248

Other liabilities - 101,500 - - - - - - 101,500

- 101,500 4,438,430 349,507 299,892 138,051 - - 5,327,380

Interest sensitivity gap of balance

sheet items - (9,568) 464,365 747,655 (288,858) 174,370 723,785 - 1,811,749

Interest sensitivity gap of off -balance

sheet items - - - 104,140 - - - - 104,140

Total interest sensitivity gap - (9,568) 464,365 851,795 (288,858) 174,370 723,785 - 1,915,889





Form B05/TCTD




61

As at 31 December 2011 Overdue Free of Interest

Up to 1 month

From 1 to 3 months

From 3 to 6 months

From 6 to 12 months

From 1 to 5 years

Over 5 years Total

USD USD USD USD USD USD USD USD USD

Assets

Cash on hand - 551,780 - - - - - - 551,780

Balances with the SBV - - 13,639,375 - - - - - 13,639,375

Deposits with and loans to credit institutions

- gross - - 101,579,290 - 5,000,000 - - - 106,579,290

Loans and advances to customers - gross - - 213,039,606 64,085,945 7,707,097 894,882 10,094,931 - 295,822,461

Investment securities - - - 717,284 - - - - 717,284

Fixed assets - 470,570 - - - - - - 470,570

Other assets - 1,973,345 - - - - - - 1,973,345

- 2,995,695 328,258,271 64,803,229 12,707,097 894,882 10,094,931 - 419,754,105

Liabilities

Deposits and borrowings from credit institutions - - 128,936,206 20,000,000 4,285,716 - - - 153,221,922

Deposits from customers - - 153,743,078 12,567,672 11,115,579 2,229,822 - - 179,656,151

Other liabilities - 4,862,306 - - - - - - 4,862,306

- 4,862,306 282,679,284 32,567,672 15,401,295 2,229,822 - - 337,740,379

Interest sensitivity gap of balance sheet

items - (1,866,611) 45,578,987 32,235,557 (2,694,198) (1,334,940) 10,094,931 - 82,013,726

Interest sensitivity gap of off-balance

sheet items - - - - - - - - -

Total interest sensitivity gap - (1,866,611) 45,578,987 32,235,557 (2,694,198) (1,334,940) 10,094,931 - 82,013,726





Form B05/TCTD




62


Overdue Free of Interest

Up to 1 month

From 1 to3 months

From 3 to 6 months

From 6 to 12 months

From 1 to 5 years

Over 5 years

Total










Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d)

Assets

Cash on hand - 11,492 - - - - - - 11,492

Balances with the SBV - - 284,081 - - - - - 284,081

Deposits with and loans to credit

institutions - gross - - 2,115,693 - 104,140 - - - 2,219,833

Loans and advances to customers - gross - - 4,437,189 1,334,782 160,523 18,639 210,257 - 6,161,390

Investment securities - - - 14,940 - - - - 14,940

Fixed assets - 9,801 - - - - - - 9,801

Other assets - 41,101 - - - - - - 41,101

- 62,394 6,836,963 1,349,722 264,663 18,639 210,257 - 8,742,638

Liabilities

Deposits and borrowings from credit institutions - - 2,685,483 416,560 89,263 - - - 3,191,306

Deposits from customers - - 3,202,161 261,759 231,515 46,443 - - 3,741,878

Other liabilities - 101,272 - - - - - - 101,272

- 101,272 5,887,644 678,319 320,778 46,443 - - 7,034,456

Interest sensitivity gap of balance

sheet items - (38,878) 949,319 671,403 (56,115) (27,804) 210,257 - 1,708,182

Interest sensitivity gap of off -balance

sheet items - - - - - - - - -

Total interest sensitivity gap - (38,878) 949,319 671,403 (56,115) (27,804) 210,257 - 1,708,182






Form B05/TCTD




63

A change of 100 basis points in interest rates would have increased or decreased the net profit of the

Branch by USD655,842 (2011: USD629,103). This analysis assumes that all other variables, in particular

foreign currency rates, remain constant.

(e) Fair values versus carrying values

Fair value is the amount for which an asset could be exchanged, or liability settled, between

knowledgeable, willing parties in arm’s length transaction on the measurement date.

The following table presents carrying amount and fair value of the Branch’s financial assets and liabilities

as at 31 December 2012 and 2011:





Form B05/TCTD




64

As at 31 December 2012 Carrying value Fair Value

At fair value

through profit

or loss

Held- to

maturity

Loans and

receivables

Available-for-

sale

Financial

liabilities

determined at

amortised cost Total

USD USD USD USD USD USD USD

Financial assets

Cash on hand 1,014,963 - - - - 1,014,963 1,014,963

Balances with the SBV 11,225,631 - - - - 11,225,631 11,225,631

Deposits with and loans to credit institutions - gross - - 65,280,261 - - 65,280,261 (*)

Loans and advances to customers - gross - - 227,095,594 - - 227,095,594 (*)

Investment securities - 968,494 - 33,782,072 - 34,750,566 (*)

Other financial assets - - 2,853,502 - - 2,853,502 (*)

12,240,594 968,494 295,229,357 33,782,072 - 342,220,517

Financial liabilities

Deposits and borrowings from credit institutions - - - - 82,995,579 82,995,579 (*)

Deposits from customers - - - - 167,910,894 167,910,894 (*)

Other financial liabilities - - - - 3,396,465 3,396,465 (*)

- - - - 254,302,938 254,302,938





Form B05/TCTD




65


At fair value

through profit

or loss

Held- to

maturity

Loans and

receivables

Available-for-

sale

Financial

liabilities

determined at


Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d)

Financial assets

Cash on hand 21,140 - - - - 21,140 21,140

Balances with the SBV 233,807 - - - - 233,807 233,807



Investment securities - 20,172 - 703,613 - 723,785 (*)

Other financial assets - - 59,432 - - 59,432 (*)

254,947 20,172 6,149,037 703,613 - 7,127,769




Other financial liabilities - - - - 70,742 70,742 (*)

- - - - 5,296,622 5,296,622





Form B05/TCTD




66


At fair value

through profit

or loss

Held- to

maturity

Loans and

receivables

Available-for-

sale

Financial

liabilities

determined at


USD USD USD USD USD USD USD

Financial assets

Cash on hand 551,780 - - - - 551,780 551,780

Balances with the SBV 13,639,375 - - - - 13,639,375 13,639,375



Investment securities - 717,284 - - - 717,284 (*)

Other financial assets - - 1,898,766 - - 1,898,766 (*)

14,191,155 717,284 404,300,517 - - 419,208,956




Other financial liabilities - - - - 3,441,749 3,441,749 (*)

- - - - 336,319,822 336,319,822





Form B05/TCTD




67


At fair value

through profit

or loss

Held- to

maturity

Loans and

receivables

Available-for-

sale

Financial

liabilities

determined at


Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Equivalent

VND million

Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d) Note 2(d)

Financial assets

Cash on hand 11,492 - - - - 11,492 11,492

Balances with the SBV 284,081 - - - - 284,081 284,081



Investment securities - 14,940 - - - 14,940 (*)

Other financial assets - - 39,548 - - 39,548 (*)

295,573 14,940 8,420,771 - - 8,731,284




Other financial liabilities - - - - 71,684 71,684 (*)

- - - - 7,004,868 7,004,868

(*) The Branch has not determined fair values of other financial assets and liabilities for disclosure because (i) quoted prices in active market is not available for these

financial assets and liabilities; and (ii) Vietnamese Accounting Standards, the Vietnamese Accounting System for Credit Institutions stipulated by the State Bank of

Vietnam and the relevant statutory requirements do not provide guidance on measurement of fair values in the case where quoted prices in active market are not available.

Fair values of these financial instruments may be different from their carrying values.






Form B05/TCTD




68

(f) Operational risk

Operational risks include risks arising from system failure, human error or non-adherence to systems and

procedures, or from fraud or inadequate internal controls and procedures, resulting in financial or

reputation loss. The Branch has put in place necessary preventive and detective controls to ensure those

risks are managed to the minimum level.

32. Lease commitments

The future minimum lease payments under non-cancellable operating leases were:

31/12/2012

USD

31/12/2011

USD

31/12/2012

Equivalent

VND million

31/12/2011

Equivalent

VND million

Note 2(d) Note 2(d)

Within one year 1,104,997 704,016 23,015 14,663

Within two to five years 2,904,066 2,816,064 60,486 58,653

Over five years - 528,012 - 10,997

4,009,063 4,048,092 83,501 84,313

25 March 2013




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