Performance 2011 and Target 2012

7/31/2019 Performance 2011 and Target 2012

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2011Performance report to the Directors Board

And 2012 Business targets

2011 PERFORMANCE REPORT

& 2012 BUSINESS TARGETS

H Ni, 28th February, 2012

NGN HNG TMCP CNG THNG VIT NAM

108 Trn Hng o, Hon Kim, H Ni

Tel: 04.39421030; Fax: 04.39421032

Business Certificate no. 0100111948 dated 28th

February, 2011


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REPORT ON

2011 BANKING PERFORMANCE

& 2012 BUSINESS TARGETS

In 2011, the global economy had to cope with many difficulties. Japan was stricken with

natural disaster, economic recession continued its threat to the US economy, and the public debtcrisis in Europe spread out in the Euro Region. The banking and financial system was put on alert

and many top world banks are downgraded by international credit ratings agencies.

Vietnamese economy also had its challenges such as the high inflation rate threatening the

stability of the macroeconomic environment. However, with a package of solutions in curbing

inflation, stabilizing the macro economy, ensuring social welfare and responsibility according to

Resolution No. 11/NQ-CP dated 24 Feb, 2011 issued by the Government and the Direction No

01/CT-NHNN dated March 01st,

2011 by State bank, at the end of 2011 the economy achieved many

positive changes: GDP increased by 5.89%, total exports broke the record at 96.3 billion US dollars,

net imports were restricted to under 10%, inflation rate declined sharply within the last months of theyear, social welfare was ensured, macroeconomic status was in essence stabilized.

Within that context, VietinBank system as a whole managed to overcome difficulties to

perform two simultaneous tasks well: (i) conduct of safe, efficient, and internationally standardized

development and business activities, (ii) promotion of VietinBank as a leader in the financial and

economic fields such as in terms of performing policies and directives as guided by the Party, the

Government, and the State. At the end of 2011, VietinBank had achieved remarkable results.

VietinBank Management would like to report to the General Shareholders Meeting the followingresults for 2011:

I.

PERFORMANCE REPORT FOR 20111. Major IndicatorsUnit: billion dongs

Items Done in

20111

Done in

2010

% change

compared to

2010

2011 General

ShareholdersMeeting Plan

% of

achievements over

the 2011 GeneralShareholdersMeeting Plan

Total assets 460,241 367,712 25% 441,000 104%

Mobilized funds 420,212 339,699 24% 408,000 103%

Loan and Investment (1) 430,116 349,353 23% 419,000 103%

In which: loan (2) 293,434 234,205 25% 281,000 104%

NPL ratio 0.75% 0.66% < 3% Target achieved

Profits before tax 8,392 4,638 81% 5,100 165%

Equity (3) 28,491 18,201 57%

In which: Charter capital 20,230 15,172 33% 20,000-25,000 Target achieved

ROA (4) 2.03% 1.5%1.2% Target

outperformed

1Extracted from audited consolidated Financial Statements for 2011 (note: audited numbers are not yet available)


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Items Done in

20111

Done in

2010

% change

compared to

2010

2011 GeneralShareholdersMeeting Plan

% of

achievements over

the 2011 General

ShareholdersMeeting Plan

ROE (5) 26.74% 22.1%16%-18% Target

outperformed

Dividend payout (% over

charter capital at the end of theyear)

20% 13.47% 49% 16%Target

outperformed

(1) Credit risk reserve, securities devaluation provision and investment devaluation provision has not yet been included(2) According to Doc. No. 9551/NHNN-TTGS dated 13.12.2011, SBV approved to adjust the credit growth rate of

Vietinbank to 25%.

(3) Had been excluded the equity of minority shareholders.(4) ROA is calculated as profits before tax over the average of the total assets as of the beginning and the end of the year.(5) ROE is calculated as profits after tax over the average of the total assets as of the beginning and the end of the year

2. Assessment performance results of 20112.1.Mobilizing funds

In the context of high inflation rate of 2011, State Bank of Vietnam issued policies to curbinflation and stabilize macro economic conditions such as Circular no. 14/2011/TT-NHNN to curb

the ceiling USD Deposit rate, Circular no. 13/2011/TT-NHNN to request to link foreign currency

deposit sources of State owned Corporations, and Resolution no. 1209/Q-NHNN to regulate anincrease of the compulsory reserve rate for credit organizations. The above decisions within the

context of common difficulties of domestic and global economies greatly affected the operation of

mobilizing funds of commercial banks.

.. : Growth rate (%)

: Loan outstanding

The above result was thanks to the coordination of active, close, and simultaneous measures such as

tight capital balance management, diversification and quality enhancement of products, services, and

customer service. Based on that result, VietinBank continued to attract many funding sources with

220,591

339,699

420,212

26%

54%

24%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000450,000

2009 2010 2011

Chart 1: Scope and Growth of Equity

Despite difficulties, Vietinbank continued

to maintain its stable growth rate, focusing

on securing liquidity and State Banksregulations. Year end mobilized funds

balance (including loans) for 2011 was

420,212 billion dongs, an increase by 24 %

compared to 2010, this is 103% compared

against the target proposed by General

Shareholders Meeting. VND fundsmobilized were 348,000 billion dongs,

constituting 83% of total funds mobilized,

(funds mobilized in foreign currency were

equivalent to 2000 billion dongs. Market

share of mobilizing funds of VietinBank isapproximately 11% )(for 2010: 10.21%).


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Chart 3. Investment Structure for 2011 Chart 4. Investment Structure for 2010

- As for Interbank activities: Until 31st December, 2011, interbank investment achieved 65,500billion dongs, an increase of 28% compared to 2010. VietinBank always maintained good

liquidity status, simultaneously taking the role of providing liquidity and supporting the market.

-

As for Bond/Valuable paper investment: Total investment balance at the end of 2011 was 67.8billion dongs, an 9.6% increase in comparison to 2010 year end. Vietinbank maintain a large

quantity of government bonds as secondary reserves as well as the investment in major projects

contributing to economic development in 2011.

- As for Joint Venture and Capital contribution activities: Until 31st December, 2011, totalinvestment in joint venture companies, affiliates, and other long term commitment was 2,924

billion dongs, a 40% increase compared to 2010.

2.3.Non-credit activities

2.3.1. Payment- Domestic payment: In 2011, total domestic payment was made in more than 15.4 million

transactions with total transacted amount of 8,100,000 billion dongs (a 64% increase compared

to 2010). Remittance achieved 14.6 million transactions, with transacted amounts of 7,400,000

billion dongs (one and a half time compared to the previous year). Service fee for domestic

payment was 484 billion dongs, a 26% increase compared to 2010.

- International payment and trade: trade payment revenue achieved more than 28 billion USdollars, a 63% increase compared to 2010. Market share was 14% of total trade balance

nationwide. Service fees were 599 billion dongs, a 30% increase compared to 2010. The balance

of funds mobilized as of 31 December 2011 was 690 million US dollars, an increase by 67%

compared to the end of the previous year.2.3.2. Forex trading

While forex trading market experienced complicated fluctuations, VietinBank implemented

several solution packages, which were comprehensive and flexible, to stabilize and expand the

trading sources to meet customers essential needs and to ensure business efficiency. Total forexpurchase by VietinBank for 2011 was 5.1 billion US dollars, an increase of more than 30%

compared to 2010, and total forex sale by VietinBank for the year was more than 6 billion US

dollars, an increase of 20% compared to 2010.

Interbank

44.26%

Capital

contributio

n 1.82%

Corporate

bond and

credit

institution

24.70%

capital

stock

0.25%

Govt bond

and T-bill

28.96%Interbank

47.91%

Capital

contributio

n 2.14%

corporatebond and

creditinstituion

21.38%

capital

stock

0.39%

Govt bond

and T-bill

28.19%


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2.3.3. Overseas RemittanceUp to the end of 2011, total volume of overseas remittance through VietinBank network was

almost 1.3 billion US dollars with more than 360,000 transactions, an increase by more than 16%

compared to 2010. Especially, in December 2011, VietinBank was granted the permission to open

VietinBank global remittance company to provide remittance transfer and other individual-to-

individual money transfer between Vietnam and other countries and within each foreign country.

The work of this company shall be an important landmark in overseas remittance activities of

VietinBank.

2.3.4. Card service and E-Banking service- Card service: In 2011, VietinBank led the market in terms of ATM Card and Credit Card

services. The total number of domestic debit cards was more than 7.1 millionthis made a 21%market share for VietinBank; whereas credit cards were 211,000 cards, a 30% market share

2.

Total number of POS of VietinBank was at more than 12,000 places, a 20.7% market share. For

each type of card, VietinBank continued to cooperate with large domestic partners such as

Vietnam Social Insurance, Hanoi Public Security Department, etc. and foreign partners such asLaos Development Bank; VietinBank pioneered to develop non-stop toll fee collection service.

- E-banking service: 2011 Online banking service observed positive changes in both the numberof customers and the frequency of use: such as VietinBank At Home (with nearly 3,300

customers, ten times more when compared to 2010); Notice of balance change (with more than 1

million times of sending the notices); etc. Besides, transacted amounts through online channels

increased remarkably.

2.3.5. Cash and Vault ManagementInward and outward flows of cash for 2011 (in both VND and foreign currencies) were

2,400,000 billion dongs, a 48% increase compared to 2010. Change reimbursements for customerswere 45 billion dongs and 13,500 US dollars. Export volume of foreign currencies was 123.6 million

US dollars (103.4 million US dollars compared to 2010), import volume of foreign currencies was

189.2 million US dollars (108 dollars less compared to 2010). During the year of 2011, VietinBank

discovered and kept 443 million dongs counterfeit notes. Service fees from Cash and Vault

Management Department was 108.5 billion dongs, an 8% increase compared to 2010.

3. Risk Management, Internal Controllers, Internal Audit3.1.Risk Management

- Credit risk management: Although there were difficulties in the economy, and NPLs atVietnamese banks increased sharply in general, VietinBank was one of the few banks tomaintain low NPL ratio at 0.74%. Guideline on credit policies for VietinBank system closely

followed macroeconomic changes and State Bank of Vietnams directives; credit controlprinciples were tightened.

- Interest rate risk and liquidity risk management: The management of interest rate and liquidityrisks was often updated and upgraded to the international standards. This helped to ensure

efficiency, especially when there were great fluctuations in the global market.

2Data from card service data for banks in Vietnam 2011 (source: State Bank of Vietnam)


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- Market and operational risk management: All documents relevant for this type of riskmanagement were standardized. Work on anti-money-laundering and anti-terrorism closely

followed regulations. Forecasts and analyses were upgraded to changes in the global and

domestic markets, and provided efficient information to business decisions of the system.

3.2.Internal Controllers and Internal Audit

- Internal Controllers: As the last controllers of the system, and of risk management activities, theInternal Controllers coordinated investigation groups to conduct comprehensive and by topicinvestigation of the system branches to discover in time any mistakes made in operations or

oversights in the management capacity at the branches for appropriate measures, timely

intervention to ensure compliance and risk hedging.

- Internal Audit: The work of the Internal Audit is enhanced and coordinated with State Audit andother independent auditors to ensure that financial statements are issued timely and in

compliance with all regulations.

4. Supporting Group4.1. Human resources Department, Labour and Salary Management Department, and

Network Development activities

- Human resources management: Based on assessment of the reality of human resourcesstructure from Head Quarter to Branches, VietinBank (i) standardized its working structure

according to modern international banks; (ii) reviewed its standards, quality, and capacity of

human resources within the system to prepare for the change of the business model for the whole

system in 2012.

- Network management: VietinBank focused on developing its overseas network and improvingthe quality of the existing domestic units, enhancing efficiency and productivity for the whole

system. In September 2011, VietinBank opened a Branch in Frankfurt (Germany) and became

the first Vietnamese commercial bank to open a European branch. Deputy Prime Minister HongTrung Hi attended and participated to open the Branch, which brought pride and honor toVietinBank system. As for the domestic system, VietinBank opened 26 new transaction offices

and savings bureaus, so that the total number of operating units in the system was 1,123 units.

Two subsidiaries were opened (The global remittance company and VietinBank Aviva Life

Insurance Joint Venture).

- Labour and Salary management: VietinBank saw new comprehensive changes in themanagement of labour and salary within the whole system. The process of assigning target plans

and salary unit is being improved and attached to results completed of each operating unit.

4.2. Information technology and bank modernization

Under IBMs consultancy, VietinBank completed its general strategy for Informationtechnology by 2015. This is the foundation to enhance competitiveness when the economy is

increasingly competitive and gearing towards global integration. The implementation and

supervision of the bank modernization project was put under standards of worlds leading projects.The platform for Information technology was continually upgraded to support the

development of high tech products and increase their competitiveness, inducing benefits for users,

adding values and productivity in terms of enhanced supervision and operation control for the bank.

4.3. Communication and brandname promotion

During the year, VietinBank cooperated with television channels and news agencies.


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VietinBank and VOV signed a comprehensive agreement to enhance cooperation in broadcasting

information and guide towards VietinBanks participating in monetary and financial policies and itsbrandname promotion. VietinBank also sponsored important domestic events such as the 44

thADB

annual meeting, major meetings, major exhibitions, etc. VietinBank website was continually

upgraded with new information on the Bank and its new interface was to serve E-banking services

for customers.

4.4. Equitization and charter capital increaseUpon the Governments approval, VietinBank became the first commercial bank that

partnered with a foreign strategic organization and completed its increase of charter capital by

selling an additional 10% of chartered shares to IFC and some to existing shareholders (for more

than 3,372 billion dongs), and increased total charter capital of VietinBank to 20,230 billion dongs

as of 31st December, 2011, ranking VietinBank the second bank in terms of capital nationwide.

Shareholders relationship activities in 2011 saw new efforts in holding successful eventssuch as the General Shareholers Meeting, Investors Meeting, VietinBank Analyst Day, etc. All ofthese events were regarded to make VietinBank the most professional bank in terms of shareholdersrelationship activities on the Vietnam securities market.

4.5.Basic constructionWith a view to building VietinBank into a modern, integrable, and competitive financial

organization, VietinBank held 29 new projects and delivered 24 important projects. Especially, the

Branch newly opened in Frankfurt was in use and other Branches in Berlin and Laos were being

furnished to be opened for operation in September, 2012 and February, 2012, respectively. Major

projects under construction such as VietinBank Tower in Ciputra (in Hanoi), VietinBank office at 25

Ly thuong Kiet (in Hanoi), School for human resources training and development in Van Canh (in

Hanoi), etc, continued to be constructed with the greatest efforts to bring them into use as planned.

4.6.Reward for competition

Reward for competition within the network system is implemented regularly and proves to be

efficient, providing impetus for individual and group to make efforts in accomplishing their workresults. During the year, VietinBank granted 30 medals to individuals and groups, including 1 first

class medal, 1 second class medal, and 28 third class medals, together with many merit certificates

and flags from the Prime Minister and State Bank of Vietnam, from Ministries and Departments.

VietinBank and Chairman Phm Huy Hng took great honor to be awarded for great achievementsaccomplished in poverty reduction and social betterment by the Prime Minister and the Ministry of

Labor, Invalids, and Social Affairs.

5. Party and union5.1.Party cell and union activities

The Vietinbank party cell is comprised of 53 party divisions and 1967 members. During the

year, the party cell has successfully implemented resolution NQ 11/CP, passed at the partys 11thcongress, and significantpolicies on propelling the Follow in Ho Chi Minhs footsteps movementand the Vietnamese people prefer Vietnamese commodities movement, with the aim of saving, aswell as combating corruption and squander.

5.2.Charity and social welfare

Vietinbank makes it a tradition to be at the vanguard of social welfare and to pay gratitude to


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the various localities across the country. Having invested nearly 1,500 trillion VND since 2007 in

social welfare, 664 of which was from 2011, VietinBank has joined hands with various localities in

engaging in social welfare, poverty reduction, tending to invalids, contributing to the veterans funds,

and aiding peasants, poverty stricken women, orphans, orange agent victims, flood victims in Japan,

the people ofLibya These are truly benevolent and meaningful deeds that illustrate the responsibleand unique culture of an enterprise that holds a special place in the community and in society.

6. Vietinbanks subsidiaries6.1.VietinbankSc

VietinbankSc operates under the form of a joint stock company, of which Vietinbank holds

76% in charter capital. In light of the challenges that plagued the securities market in 2011, the

company was able to achieve positive results. At the end of 2011, total revenue reached 247.8 billion

VND (quadruple 2010s figure). Before tax profits amounted to 82.8 billion VND, which earnedVietinbankSc 5th place among securities that made a profit in 2011. VietinbankSc also had the 3 rd

highest profits/equity ratio in the market. The companys investment portfolio is of excellent quality

and NPLs are kept at a low level. In 2011, 3,584 new accounts were opened.

6.2.Vietinbank Financial Leasing Company

Vietinbank Leasing Company operates under the form of a one member limited liability

company, whose charter capital is owned entirely by Vietinbank (800 billion VND). Over the

previous year, the company had concrete achievements (and was considered to be one of the best

performing financial leasing companies by the Vietnam Financial Leasing Association). By the end

of 2011, the companys capital had amounted to 1,002 billion VND, and total loans and investmentto 1,799 trillion VND, an increase of 28.7% from 2010. Total before tax profits was at 100.7 billion

VND, an increase of 23%; the NPL ratio was curbed at 2.3%, lowest among financial leasing

companies.

6.3.Vietinbank Insurance Company (Bao Ngan)

As Vietinbank Leasing Company, Vietinbank insurance company is a one member limited

liability company whose charter capital is owned entirely by Vietinbank (500 billion VND). In 2011,

the company was successful in making excellent use of the Vietinbank branch network to expand its

operations. The company had 699 billion VND in total assets on December 31, 2011, an increase of

30% from 2010. Before tax profits for 2011 amounted to 60 billion VND. ROA was at 9.85%, where

as ROE reached 12%.

6.4.Vietinbank Debt Management and Asset Exploitation Company

Over the past year, the company revamped its operational model for the better by taking such

measures as: (i) restructuring and separating the appraisal team from loan operations, (ii) making the

director the legal representative to comply with the law. In addition, the company has signed with

Vietinbank branches, and provided support for many branches in dealing with debts and fixed assets.

The companys year-end profits reached 1.3 billion VND (an increase of 225% from 2010).

6.5.Vietinbank Capital Management Company


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Having officially commenced operations in January 2011, Vietinbank Capital already gained

a solid reputation in the financial market from very early on. In 2011, the company was successful in

making final adjustments to its organizational structure, establishing partnerships with reputable

companies, and founding the Nam Quang Ngai Joint Stock Investment Company. The company

attained 56.85 billion VND in before tax profits, ROE on the capital funding by Vietinbank (500

billion VND) about 20%.

6.6.Vietinbank Gold and Jewelry Company

Although 2011 marked its first year of operations, the company was able to excel at

accomplishing its objectives. Profits before tax amounted 56 billion VND, reached to 106% of the

target set by Vietinbanks board of directors. Profits after tax amounted to 41.4 billion VND, andROE was at 14%. Business was rock stable; there were no instances of theft or loss of assets.

II. ORIENTATION, OPERATIONAL DUTIES, AND SOLUTIONS TO BE IMPLEMENTED

IN 2012

Vietnams economy is anticipated to continue to be under the influence of the global economy.Economic instability in Europe and the United States, the budget deficit, public debt crisis, and

rising inflation in many countries around the world all present significant obstacles that make global

economic recovery even more difficult. Moreover, forecasts suggest that adverse economic

conditions in the country will persist. The Party, State, and the Government have passed policies that

aim to clamp down on inflation, stabilize the macroeconomy, ensure social welfare, keep growth at

an appropriate rate, and restructure the economy. The State Bank continues to regulate monetary

policies in a stringent yet flexible manner, keeping the growth of total payable instrument from 14 to

16%, credit growth from 15 to 17%, and interest and exchange rates at appropriate levels suited to

macroeconomic conditions and changes in the currency market.In close adherence to such policies, Vietinbank plans to repeat the success of 2011 by setting

the following business objectives for 2012:

1. OVERALL OBJECTIVE FOR 2012:Vietinbank continues to undergo comprehensive restructuring to become more modern and to

enhance competitive capability. Further, Vietinbank relentlessly revamps and improves its

management methodologies and expedites the equitization process. Human resources management,

investment in technology, quality enhancement, NPL management, and fulfillment of social welfare

responsibilities are areas that Vietinbank plans to focus on over the next year.

Vietinbank aims to retain a strong growth rate and occupy a greater share of the market all the

while ensuring safety and sustainability. Several specific financial objectives for 2012 are listed

below:

Item Unit Target % increase from 2011

Total assets VND(billions)

550.000 19%


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adhere to international standards and to Vietinbanks needs.

- Branches take the initiative in obtaining market information and closely follow directives tofoster credit growth in accordance with Vietinbank strategies. Improve appraisal quality,

customer management, monitoring before, during, and after the granting of loans; ensure that

loans are made for the right purposes and conform to Vietinbank regulations.

- Promote the cross-sale of products and services that include insurance, interest rate swap;Focus on short-term credit growth, avoid medium and long-term loans (especially loans in

foreign currencies). Evaluate the riskiness of customers and loans to come to safe and effective

decisions; when dealing with non-lucrative customers, accelerate the payment of debts and

consider terminating relations.

Investment:To fulfill growth targets, it is necessary to diversify the investment portfolio and manage

liquidity risk, interest rate, and profitability. Appraise financial institutions more accurately to

determine the transaction limit to be applied for each bank. Expand investment activities and capital

mobilization with the aim of successfully issuing 500 million USD worth of international bonds in

2012. Develop new investment products such as derivatives and structure, apply modern methods of

investment portfolio management in new treasury system to be introduced in the coming year,

expected in quarter III/2012.

2.1.3. Foreign Currency TradingContinue to tighten relations with the State Bank, domestic and foreign financial institutions, and

exporting enterprises to better address customers demands for foreign currencies. Implementsoftware to trade foreign currencies and manage them at the central level in accordance with

international practices. Introduce new banking services such as derivatives, interest rate, and

exchange rate to maximize investment opportunities and minimize risk.

Provide sound consultation to customers so that they may opt for a mixture of exchange, deposit,

loan, and other products. The goal is to maintain a balance in the supply of foreign currencies and

prevent exchange rate risk.

2.1.4. Charged services- Card services: Promote the development of key services at which Vietinbank excels such as toll

collection services, hospital feels, automatic tuition fee collection. Drive the quality of

Vietinbank products and services above all others. In 2012, necessary measures will be taken to

establish a card services company operating under Vietinbank.

-

Remittance services: After the Vietinbank Global Money Transfer company officially beginsoperations, new channels of remittance will be opened, with focus being placed on regions where

there are large concentrations of Vietnamese expatriates and laborers. Introduce new services

such as only remittance by internet, by phone. Expand payment networks and establish new

agencies. Modernize existing technology to ensure that remittance is conducted safely, quickly,

and effectively.

- Payment services: Simplify such services so that they are performed more quickly while stillensuring safety. Diversify products and services, increasing added value for customers. Improve


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upon payment services to enhance flexibility and attract more customers, but still conform to

internal regulations and the law.

2.1.5. Customer Service QualityTo cope with increasing competition, Vietinbank will have to take the following measures in

2012 to improve upon the quality of services:

- Form a set of indicators and a unit specialized in overseeing the quality of customer service onall levels of the bank; launch the CRM system as early as possible. Put into service the ContactCenter, which provides customers with accurate and up-to-date information to improve service

quality and promote Vietinbanks brand image.

- Focus on training and retraining, assign personnel, ensure that staff members have a good graspof Vietinbank products and services as well as of customer demands to improve service quality.

Assign employees to the specific task of monitoring relations with key customers so that

appropriate responses can be made when changes arise. Devise procedures whereby the service

quality of each department can be monitored.

2.1.6. Equitize and Increase Shareholders EquityPropose a roadmap to increase capital to the government, State Bank, and SCIC that aims to

help ensure regulations are complied with and adequacy ratios are suited to the rate of growth of the

bank. Finalize negotiations with the banks second foreign strategic partner by year end 2012 andexpedite the growth of charter capital by means of issuance of additional shares.

Aside from bolstering its financial strength, Vietinbank will request additional technological

support from its strategic shareholder to enhance management capability, risk management, expand

product and service portfolio, increase relations with foreign partners, and improve personnel

training. The overall aim is to turn Vietinbank into a major player and modern bank by the year

2015.

2.2. Risk Management Group

The common goal is to ensure that all departments and branches follow procedures and

processes. It is necessary to foster a risk prevention culture. Manage, monitor, and prevent risk in all

departmental and branch activities. Pay especially close attention to ethical risk. In 2012, Vietinbank

will:

- Change the internal supervision model so that distinction is made among three levels (central,regional, cluster). Enhance employee competence, inspect activities closely, monitor branches to

respond in time and impose strict penalties on violators and those who cause damage to

Vietinbank.

- Check all procedures, regulations, and processes to ensure compliance with internationalstandards. Expedite the implementation of risk management modules such as internal credit

ranking and ALM to enhance risk management capability.

2.3. Support Group

2.3.1. OrganizationExpedite the change of business model to form specialized groups such as the business group,

treasury group, support group, risk management group, and operational group. Divide responsibility


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among various departments to ensure cross checking in all areas of operation.

2.3.2. PersonnelEnhance staff competence to cope with new demands and responsibilities. Appoint

management appropriately, conduct better evaluation of employees, focus on training young and

promising staff. Hire new, competent employees and identify key staff members.

Continue to upgrade and implement Peoplesofts staff management and evaluation program. 2.3.3. Compensation, Rewards, and Emulation

The year 2012 will see the implementation of a new compensation system comprising job

descriptions, KPIs, and internationally used salary structure to guarantee transparency and equality.

Research and apply other policies relating to bonuses and salary to provide incentives to Vietinbank

workers.

It is important to promote teamwork and to determine just how much each staff member

contributes so as to help workers maximize their potential and abide by Vietinbank directives and

objectives.

2.3.4. NetworkIn addition to strengthening its domestic network, Vietinbank continues to expand

internationally in 2012 by opening new branches in Laos (Febuary, 2012) and Berlin, Germany

(quarter I/2012). Vietinbanks next destinations include Myanmar, England, the Czech Republic, andPoland. In the near future, Vietinbank will further research the possibility of expanding into other

lucrative markets like the Middle East, North America...

2.3.5. Information TechnologyImplement IT strategies for the period from 2010 to 2015 and key modernization projects

(core banking, middle layer, other software systems) in a timely manner. Improve project

management skills, ensure compliance with procedures, meet all requirements for IT strategicprojects.

Upgrade the IT infrastructure to support the development of new products and services that

are advanced and capable of addressing customer demands. Formulate policies for the management

of data quality and ensure that all branches and departments and in compliance to provide accurate

and reliable information that can form a basis for decision making.

2.3.6. Infrastructure Development and ConstructionStep up the construction of major projects such as the Vietinbank twin towers in Ciputra, the

office building at 25 Ly Thuong Kiet (Hanoi), the office building at 93-95 Ham Nghi (HCMC).

Complete the construction and revamping of branch buildings. Provide spacious and well furnishedareas to better serve customers. Finalize the purchase of buildings in Laos and Myanmar so that

operations in these regions may commence.

2.3.7. Communications, Marketing, Brand Image PromotionCompletely revamp marketing and promotional strategies. Develop and overall strategy for all

of Vietinbank, which must be consistent with regard to communications methods, media. The aim is

to communicate in a more reliable manner and embellish the Vietinbank image as perceived by the

public eye. Vietinbanks operational results will thus be improved and the banks market share will


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augment.

2.4.Party, Union and Social welfare

2.4.1. Party ActivitiesGain a sound understanding of and implement the resolutions and policies of the Party and the

State. Strengthen Vietinbanks internal party structure. Executives are to impart their knowledge ofpolitics and operations on employees. Follow in Ho Chi Minhs footsteps, abide by procedures,improve management capability.

2.4.2. Social WelfareVietinbank will carry on its tradition of altruism, demonstrating its social responsibility as a

commercial bank of crucial importance. By making use of its resources, Vietinbank continues to

engage in charity and social welfare activities in an effort to reduce poverty and elevate the standard

of living. Tight supervision needs to be carried out to ensure that the money supplied by Vietinbank

is put to good use.

III. CONCLUSION

In 2011, the bank overcame many difficulties and challenges to fulfill the grand duties assignedby the Party, the Government, and the State bank. Rapid growth rates, safe, effective, and high

quality operations are just several accomplishments that Vietinbank has had over the previous year.

Vietinbanks unparalleled financial results form the very basis upon which the bank will strive tofulfill its 2011-2015 target, which is to become the premier financial and banking corporation in

Vietnam. The year 2012 brought about significant changes for the bank, as it continued to strengthen

its critical position as a commercial bank that has made invaluable contributions to socioeconomic

growth and stability. As Vietinbank progresses in its endeavor to further integrate into the

international scene, the bank realizes that the upcoming years challenges also present numerousopportunities not just for the banking industry but for Vietnams economy overall. As such,

Vietinbank will continue to build upon its past success, make invaluable contributions to the bankingindustry and the economy, and is determined to attain its objectives as the banks 25 th anniversary in2013 draws near.

ON BEHALF OF THE BOARD

OF DIRECTORS

CHAIRMAN

PHAM HUY HUNG

Date post:	05-Apr-2018
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Performance 2011 and Target 2012

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