2018

ACHIEVING

ANNUAL REPORT
VIETNAM TECHNOLOGICAL AND COMMERCIAL JOINT STOCK BANK

Techcombank Building – No. 191 Ba Trieu Street, Le Dai Hanh Ward,

DREAMS
Hai Ba Trung District, Hanoi, Vietnam
+84 (24) 3944 6368
+84 (24) 3944 6395

www.techcombank.com.vn 2018 ANNUAL REPORT

 I 25 Years of Achievements
“The Honorable legacy”

6 Chairman’s letter
8 About us
10 CEO’s story
18 Vision, mission, core values
20 Corporate structure and network
22 25 Years of Achievements
24 Stories of Customers
28 Stories from Techcomers

II Business Performance
"The epic transformation"

Table of 36
38
Development strategy
Business model

Contents
42 Transformation program
48 Corporate culture
Techcombank's mission is to become the best bank in 52 Operating results assessment report in 2018
Vietnam. We are determined to be the trusted financial 62 Significant figures
partner of Vietnamese people and businesses on the
path towards their dreams. III Corporate Governance
"A solid foundation"

66 Chairman’s message on Corporate Governance

67 CEO’s message on Corporate Governance
68 Our Board of Directors
76 Activities of Committees under the Board of Directors
80 The Supervisory Board
84 Our Board of Management
92 Corporate governance model
94 Transactions, remuneration and benefits of the Board of Directors,
the Board of Management and the Supervisory Board

IV Sustainable Development
“The greater future”

100 People development

101 Investment in technology
102 New products and solutions
104 Corporate social responsibility

V Financial Report
2018 audited financial report

ANNUAL REPORT 2018 ACHIEVING DREAMS 3

 25 Years of
Achievements
“The Honorable legacy”
ANNUAL REPORT 2018 ACHIEVING DREAMS 5
25 YEARS OF ACHIEVEMENTS
Chairman’s letter
Dear valued shareholders, customers, and partners,
2018 marked many important milestones for
Techcombank. Not only did we celebrate our
25th anniversary, we also celebrated many other breakthrough
achievements this past year.
Techcombank proudly set two major records in 2018. First,
our listing on Ho Chi Minh Stock Exchange, completed in
June 2018, was the largest listing in the history of Vietnam's
stock market at the time, and made Techcombank one of the
top three banks in Vietnam in terms of market capitalization.
Second, Techcombank became one of the first two banks
in Vietnam to officially join the "VND10 trillion" club, as we
recorded 2018 pre-tax profit of VND10,661 trillion.
Techcombank, as a major player in the Vietnamese financial
system, adheres to the Government's guidelines and the
direction of the State Bank of Vietnam (SBV) in allocating
its capital and providing services. One of Techcombank's
greatest achievements is the business model we built with
a clear customer-centric strategy. Techcombank strongly
believes that every business strategy and plan must not only
bring value to the Bank, but also deliver outstanding value to
our customers and to the community.
Therefore, I am confident that Techcombank is primed to
reach even greater heights ahead, to realize our goal of
becoming the bank that enables all Vietnamese citizen to lead
better financial lives and achieve their dreams. And beyond
that, it is our goal to make Techcombank one of the region's
leading banks.
I believe in this goal, because Techcombank's business model
is built for the future and - with the distinctive characteristics
of our corporate culture and the consensus of our more than
9,000 excellent employees - cannot be replicated. Consistently
implementing the right business model and strategy has made
Mr. Ho Hung Anh Techcombank the leading bank in terms of efficiency and
Chairman of the board profitability among Vietnamese credit institutions.
ANNUAL REPORT 2018
But success cannot be unilateral!
Our most important assets are the trust and partnership we
share with our shareholders, clients, and partners. We share
a belief in Techcombank's long-term value, and the ambition
to make Techcombank greater everyday, propelling it into
becoming a national and regional leading brand. As such,
we are confident that we will bring the bank to even greater
achievements in the next stage of development.
And the opportunities ahead are remarkable.
Vietnam is a young economy on the rise. We have seen
the explosion of the private sector, as well as increasing
consumption among the middle class. There will be even
more exciting opportunities in the future as Vietnam becomes
increasingly integrated in the global economy.
In 2019 and the coming years, economists predict a period
of prosperity for Vietnam. As an engine of the economy,
the financial sector will develop alongside the country on
that trajectory. As for Techcombank, we believe all of our
9,000+ employees will continue to unite, collaborate, and
grow by realizing the dreams with which our customers and
shareholders have entrusted us.
I would like to express my sincere gratitude to our customers
and shareholders who have remained steadfast with
Techcombank on our journey to achieving dreams.
Sincerely,
Ho Hung Anh
Chairman of the board
ACHIEVING DREAMS 7
25 YEARS OF ACHIEVEMENTS

About us 145 branches

in the North
46.18%

Trading name Branch network

• In Vietnamese: NGÂN HÀNG THƯƠNG MẠI CỔ As at December 31, 2018
PHẦN KỸ THƯƠNG VIỆT NAM 36 branches

1 2
in the Central
• In English: VIETNAM TECHNOLOGICAL AND Representative
Head Office 11.46%
COMMERCIAL JOINT STOCK BANK offices
• Trading name: TECHCOMBANK
• Abbreviated name: TECHCOMBANK
The Bank is operated under the Banking Operation License 314 Transaction points nationwide

No. 0038/GP-NHNN issued by the State Bank of Vietnam on

3
133 branches
March 6, 2018 (renewed for operation license No. 0040/NH- Subsidiaries in the South
GP dated August 6, 1993). 42.36%

Business registration certificate number: 0100230800
• First registration: September 7, 1993
• 50th revision: August 10, 2018
Charter capital: VND34,965,921,600,000
• In words: Thirty-four trillion nine hundred sixty-five billion
nine hundred twenty-one million six hundred thousand VND.
TECHCOM SECURITIES JOINT STOCK COMPANY
Operation license: 85/GPDC- UBCK issued by the State
Securities Commission on October 16, 2018
Address: 10th + 21st floor, Techcombank Building, 191 Ba
Trieu Street, Le Dai Hanh Ward, Hai Ba Trung District, Hanoi
Business lines: Securities brokerage

Address: Techcombank Building – No. 191 Ba Trieu Street,

Charter capital: VND1,058,201,050,000
Ownership by Techcombank: 94.50% T echcombank was established in 1993, amid
the backdrop of a nascent transition from
central planning to a more market-oriented
than 6 million retail and corporate customers in
Vietnam through our extensive network of 1 head
office, 2 representative offices and 314 transaction
Le Dai Hanh Ward, Hai Ba Trung District, Hanoi, Vietnam. VIETNAM TECHNOLOGICAL AND COMMERCIAL economy. Back then, Vietnam undertook and offices across 45 cities and provinces nationwide,
Phone number: (+84) (243) 944 6368 JOINT STOCK BANK – ASSET MANAGEMENT witnessed comprehensive changes in economic satisfying not only traditional banking needs but
Fax: (+84) (243) 944 6395 COMPANY LIMITED development, unleashing an explosive level of also security and wealth management needs. In
Website: http://www.techcombank.com.vn Operation license: 0102786255 issued by the Hanoi growth that doubled the GDP expansion of the 2018, among the nine largest joint stock banks in
Stock code: TCB Department of Planning and Investment on June 18, 2008, previous decade. Vietnam, Techcombank led in terms of non-interest
with 22nd revision on November 30, 2018 income ratio, cost-to-income ratio, return on assets,
Banking services Address: Techcombank Building, 191 Ba Trieu Street, Le Dai This macro-economic expansion was the first step and total operating income per employee.
The Bank's main operations include: Hanh Ward, Hai Ba Trung District, Hanoi towards a more significant shift in the local need for
Business lines: Asset management capital as well as the global appetite for investment And we will continue to innovate to meet our
Charter capital: VND410,000,000,000 opportunities in Vietnam, and the nation saw a customers’ needs. Whether it is our retail or
Ownership by Techcombank: 100% fresh influx of foreign direct investment as well as corporate customers, being served by our Personal
the liberalization of the private sector. Financial Services division, Business Banking
TECHCOMBANK CAPITAL COMPANY LIMITED division, or Wholesale Banking division, our aim is
Mobilizing Providing short, Implementing Implementing cap-
Operation license: 57/GP-UBCK issued by the State From modest beginnings 25 years ago with to be the “one-stop shop” for financial solutions.
short, medium, medium, and payment and ital contributions, Securities Commission on January 30, 2019 charter capital of a mere VND20 billion, we have
and long-term long-term credit treasury opera- share purchases, Address: 10th floor, Techcombank Building, 191 Ba Trieu grown to become the third largest bank in terms of At Techcombank, our vision and our mission are
deposits from based on the tions and other bond investments, Street, Le Dai Hanh Ward, Hai Ba Trung District, Hanoi chartered capital in Vietnam. Our success is rooted to become the No. 1 bank in Vietnam, catering
organizations nature and banking services and foreign cur-
and individuals. capability of the permitted by the rency trading in
Business lines: Fund management in the strategy of focusing on our customers and to the everyday needs of the Vietnamese people
Bank's capital State Bank of accordance with Charter capital: VND40,000,000,000 meeting their evolving needs. Today, we provide and helping them grow to achieve their own
sources. Vietnam (“SBV”). the law. Ownership by Techcombank: 100% a broad range of products and services to more financial dreams.

ANNUAL REPORT 2018 ACHIEVING DREAMS 9

25 YEARS OF ACHIEVEMENTS
CEO’s story
Dear customers, investors, and colleagues,
T his year was the most profitable year in Techcombank’s
history, and we closed the books on 2018 reporting profit
before tax of VND10,661 trillion. It not only represents a 31
percent increase compared to 2017, but it also represents the
first time a private commercial joint stock bank has hit the re-
cord of more than VND10 trillion in profit before tax in Vietnam.
Additionally, Techcombank’s successful listing on Ho Chi Minh
Stock Exchange (HOSE) in June was the largest listing in
Vietnam’s banking history.
2018 also marked Techcombank’s 25th anniversary. We
trace our roots back to 1993, when we were one of the new
commercial banks in Vietnam, established to accelerate
the nation’s renewed economic development efforts, and to
build up the people’s confidence in the banking sector. The
economy and the nation were entering a period of transition -
moving from a focus on central planning, with heavy reliance
on government subsidies, to a market driven economy. The
private sector was just starting up, and the Vietnamese people
were starting their new journey, pursuing dreams of prosperity
and financial security. Not coincidentally, we began to pursue
our dream, of enabling the Vietnamese to achieve theirs. As
Vietnam grew, so did Techcombank. We have transformed to
be the “Best Bank in Vietnam 2018,” according to Euromoney,
Mr. Nguyen Le Quoc Anh and Vietnam has transformed into one of the fastest growing
Chief Executive Officer economies in the world.
ANNUAL REPORT 2018
Our customers have transformed, as well. In 1993, it was
common for customers to store gold bars in their mattresses;
today those same customers are processing electronic pay-
ments on their smartphones. When I traveled across Vietnam
in 1996, three years after the establishment of Techcombank,
there were no credit cards being used in Da Nang, but they
are very common now. I was walking in mud to visit Lang Co
then. Now, there are many luxurious resorts there. At that
time, it was rare for any Vietnamese family to think about
sending their children to study abroad. Now, after 25 years,
many young Vietnamese complete their degrees in top foreign
universities and come back to work in Vietnam. Many are
currently working for Techcombank.
In the early years of our bank, the development of Vietnam
was a “many a little makes a mickle” process, and so we
anchored that financial growth by enabling savings, man-
ufacturing, and exports. During our adolescent years, we
expanded across Vietnam. On the corporate side, we have
seen customers grow from small family proprietorships to
large publicly traded companies with businesses extending
beyond our nation’s borders. We have been there, with our
customers throughout their journeys, to enable that develop-
ment, and we will be there as that development continues.
Today, we are one of the largest joint stock banks (JSBs) in
Vietnam, and one of the leading banks in Asia. We provide a
broad range of banking products and services to more than 6
ACHIEVING DREAMS 11
25 YEARS OF ACHIEVEMENTS | CEO’s story
million customers with an extensive network of 314 branches
across Vietnam.
Last year, Techcombank was named the “Best Bank in Viet-
nam 2018” by Euromoney, the result of the Bank’s outstanding
performance across all consideration criteria: sustainable de-
velopment, business performance, risk management, informa-
tion technology, management quality, and contribution to the
local financial and banking market. Other criteria of the award
include total revenues, total assets, profit before tax, and net
income. The former are things we do to benefit our customers
as well as our country, and if we execute them well they will
lead to the latter.
Vietnam continues to enjoy an economic resurgence that
began in 2014, with 2018 growing at the fastest rate since
the global economic crisis 10 years ago. GDP growth for the
fourth quarter was 7.3% versus last year, pushing the full-year
growth to 7.08%. Despite concerns over trade wars and rising
interest rates, prudent monetary policy from the SBV helped
Vietnam achieve high levels of economic growth while main-
taining low inflation (with the CPI up by only 3.54% in 2018).
We expect the economy to show robust growth in 2019 and
beyond, helped by a strong banking sector and diligent man-
agement by the SBV, and driven by the indomitable spirit of
the Vietnamese people.
While Techcombank’s strong performance for 2018 can in
part be attributed to the robust turnaround in the economy, it
was more the result of the efforts undertaken in executing our
customer-centric strategy. By dedicating our efforts toward
enhancing our services and revenue streams, and building
up a strong team of Techcomers, our bank not only overcame
some economic challenges - but we truly began to thrive.
These achievements were driven by growth across all busi-
ness divisions in 2018, including bank-wide credit growth of
20%, while asset quality remained healthy with NPLs ending
the year at 1.8%. Lower credit costs and disciplined expense
management also contributed to record profits. Mortgage
lending grew by 20%, driving retail loans to a 45% share of
the total lending portfolio. Additionally, retail deposits grew by
17% year-over-year, with a record high CASA ratio of 28.7%
of total bank deposits. Also in 2018, Techcombank became
the #1 franchise for Visa credit and debit card transactions
and maintained its #1 position in bancassurance.
ANNUAL REPORT 2018
Retail and Small and Medium
Enterprises (“SME”) as growth
drivers
Solid growth among SME, being the backbone of the
economy, reflects the strength of the broader market.
Techcombank achieved strong growth from corporate SME
banking customers, with loan balances and revenues growing
by 49% and 33%, respectively.
This impressive financial performance from our business
banking division is the result of successfully implementing
a series of transformation initiatives aimed at improving
customer satisfaction, employee training and development,
credit risk, and operations process improvements.
Meeting large corporate capital
investment needs
In line with the SBV’s direction of growing corporate bonds to
20% of Vietnam’s GDP by 2030, Techcombank advised the
issuance of more than VND60 trillion (equivalent to USD2.6
billion) of corporate bonds in 2018 to support the funding
needs of large corporates, representing 82% growth versus
the prior year.
Through its 314 branches, Techcombank services the financial
needs of more than 6 million retail and corporate customers
by offering convenient credit card services, zero-fee online
banking transactions, and a range of mortgage products to
help customers achieve lifelong dreams of homeownership.
The financial performance in the fourth quarter of 2018
continued the record of 13 consecutive quarters of year-
over-year revenue growth. This steady performance is a key
in building a solid and stable bank to serve the Vietnamese
people and business communities.
Largest listing on Ho Chi Minh Stock Exchange
in Vietnam’s banking sector
June 4, 2018 was the day of the largest listing in Vietnam’s
banking history. Techcombank offered 1.16 billion shares at
the opening price of VND128,000 per share on the bourse,
lifting the Bank’s market capitalization to USD6.5 billion.
Moreover, Techcombank was the first bank to follow the strict
criteria of Rule 144A and Regulation S of the United States in
its transaction. In listing its shares on the Ho Chi Minh Stock
Exchange, Techcombank continued to move forward in the
direction of efficiency, standardization, and transparency.
Simultaneously, we continued to focus on executing our
bank’s strategy in order to achieve sustainable growth,
in accordance with the Board of Directors’ and our
shareholders’ vision.
ACHIEVING DREAMS 13
25 YEARS OF ACHIEVEMENTS | CEO’s story

Making our services more customer-centric

The Bank made significant progress in reorganizing the busi-
ness in 2018 to enable a sharper focus on our “customer-cen-
tric” approach. This strategy is focused on understanding how
best to serve and protect customers, and on delivering the
most convenient access to the Bank’s products and services
today, tomorrow, and well into the future. We always strive to
understand customers’ needs, and to tailor our products to
meet those needs, while also maximizing customer benefit.
Techcombank accompanies and empowers our customers to
achieve their goals and dreams. We accompany our custom-
ers throughout their days and throughout their lives, meeting
not only daily needs, but also long-term needs for our custom-
ers and their families.
As part of our transformation, Techcombank has adopted and
adapted our “customer-centric” strategy, and paired the value
chain model with the ecosystem approach by establishing
strong partnerships with many leading Vietnamese enterprises
across six key economic sectors which account for nearly half
of Vietnam’s GDP. Techcombank identified these six econom-
ic sectors based on its own strategic criteria: the sectors are
consumption driven; serving the domestic market to limit ex-
posure to international turmoil; resilient to the economic cycle;
and contribute greatly to the overall economy. These sectors
include: housing and real estate, auto, financial services, travel
and leisure, FMCG, and telecommunications and other utilities.
Techcombank understands that customers expect their every-
day transactions to be free and without complicated proce-
dures. We agree, and by providing them accordingly we see
how our customer-centric approach leads to higher levels of
customer loyalty and customer satisfaction. Similarly, the prod-
ucts we offer demonstrate how we take care of our customers’
needs, from meeting housing needs through mortgages, to
fulfilling transportation needs via auto loans, and from provid-
ing tools for daily living through credit and debit card services,
to meeting protection and wealth management needs with
bancassurance products and bonds.
Techcombank works with all participants in a given value
chain to create an ecosystem to minimize friction and add
value for customers. Any activity inconvenient to customers
would be eliminated, any service that bring good values to
customers will be boosted. Techcombank has received posi-
tive feedbacks from our customers because we brought them
higher benefits with lower risk through our transformation.

Technology as a key enabler

In the past recent years, Techcombank has become more
digitized, significantly strengthening our online transaction
services. The total amount of money transacted online has
increased tenfold in the last two years, and we have set
aside $300 million for comprehensively investing in our new
technology systems. The hardest part in execution include
preparing internal resources, and adjusting our processes
and operating methods to take advantage of the technology
system and improve operational efficiency. This requires
a long period of thorough preparation. We will only invest
in our technology infrastructure when we have our human
resource and other resources ready. Our corporate culture
enables alignment in mindset, fostering an environment
where everyone works together to ensure that customers’
(internal and external) value and benefits are maximized. The
Bank benefits as well, for when our customers use electronic
transactions, they don’t need to be in the branches physically,
and our staff resources are freed up to work on more
demanding tasks like advising customers.
Individual and corporate customers want to have a more
comprehensive, flexible, secured, real-time electronic financial
management system that allows them to track their savings
and manage their cash flow as well as their upcoming
payments and transactions. Our technology must meet these
legitimate demands. Techcombank’s strategy is to provide a
system in which we are helping our customers to automate
their financial statements and manage cash flows, and to
maximize customer benefit and financial convenience with
one-stop/one-touch service.
Being truly digital involves a massive transformation of the
Bank, from the frontline to the back end. To be successful,
we are investing in training our people and in redesigning
our technology infrastructure. Techcombank is committed
to offering the best services to our customers, and we
understand that superior technology is the backbone of this.

ANNUAL REPORT 2018 ACHIEVING DREAMS 15

25 YEARS OF ACHIEVEMENTS | CEO’s story
Excellence in Human Resources
Our impressive profit results this year were achieved thanks
to our focus on developing our human resources. Historically,
the banking sector in Vietnam was in a “negative circle,” in
which banks were taking good staff from one another. In the
last three years, Techcombank has built up a “positive circle,”
in which the Bank categorizes and provides in-depth training
for our staff based on the customer segment they are working
with. We have recruiters working directly with top universities
to find the best graduates. At the same time, the Bank has
been streamlining the organization to increase staff efficiency
and reduce unnecessary posts.
Techcombank’s mission was designed to provide our custom-
ers with a full range of tailored financial products and services.
To do so - and by doing so - we provide our employees with a
superlative, award-winning working environment where they
have wide-ranging opportunities to develop, contribute, and
build a successful career, as well as offer our shareholders
superior long-term returns.
To transform from a product-centric organization to a cus-
tomer-centric one, we know we cannot succeed alone. Every
step in Techcombank’s transformation is driven by the people:
Prudent Risk Management
This confidence, however, does not mean that we can let
down our guard. In a climate such as this, it is even more
important for Techcombank to remain an institution of
trust and prudence as we continue serving the needs of
Vietnamese citizens as enablers and supporters of their
wealth and growth.
This year, Techcombank laid the groundwork for early
adoption of Basel II compliance, and we trust that our
application will be accepted by the SBV soon. Nevertheless,
Techcombank is already applying the Basel II standards in
risk management. Additionally, Techcombank is one of only a
few banks to have written off all bad debts from VAMC early,
having finished the process in 2017.
ANNUAL REPORT 2018
either the people we serve or the people we employ. We do
not view customer-centricity as simply a motto, but rather as
a promise to fulfill, and the guiding principle behind what we
do and how we do it. We are all on this journey together, and
we will work to make sure that all of us - customers, partners,
employees, and stakeholders - succeed together.
Achieving dreams
From day one, our mandate has been to serve the best to the highest professional ethics to best serve our customers,
interests of our customers, employees, and stakeholders. and we are all committed to making tomorrow better than
today, for all of Vietnam.
This dedicated mission has, by its nature, seen our growth
journey mirror the growth story of Vietnam. In 2009, as Our transformation journey has just begun. Virtually every
people grew fearful of the global financial crisis sweeping division in the bank is changing: in what can be described
through Vietnam’s banking sector, Techcombank was the first somewhere between evolution and a revolution, our
financial institution in the country to hire globally renowned businesses are adapting - ahead of time - to the ever-
management consultants McKinsey & Company to advise changing needs of our customers. The last 25 years have
us on how we could to improve our structure. One year been an amazing journey. As we look forward, we will
later, we were honored with the award for “Best Bank in continue our transformation journey toward building a
Vietnam” from EuroMoney. Since then, we have started a stronger Techcombank and writing the next chapter in our
series of transformative initiatives to ensure the most positive success story.
experience for our customers, such as “Cardless” ATM
transactions, Zero Fee online transactions and Cashback on I would like to thank the Board, the management team, and
debit card purchases. all our staff for the enormous efforts they continue to make to
secure Techcombank’s growth and future.
Over the past few years, in concert with an ever-improving
standard of living, the Vietnamese people have demanded Finally, I would thank our shareholders for their unceasing
more sophisticated and better integrated financial solutions support. We are optimistic about the bank’s prospect and will
that enable a successful, sustainable financial life. It was continue to strengthen our capabilities, to invest in technology
from identifying this demand, as well as the solutions, that and human resources in order to deliver growth, performance,
Techcombank’s bancassurance partnership with Manulife and value creation.
was born.
Sincerely,
These are just some of the examples of our ongoing effort Nguyen Le Quoc Anh
to enable and accompany the growth of our country and our
countrymen. People’s lives and needs are changing every
day, and we will continue to change to ensure that we can
continue to meet those needs, and to enable all Vietnamese
citizens as they pursue their own trajectory of growth.
We endeavor to become the number one bank in Vietnam,
as well as a leading player on the international financial
landscape. Economic integration is inevitable, and Vietnam
is becoming an increasingly important link in the ASEAN
community. We are happy and excited to welcome a future
where a broader base of customers is served, and where we
are making increasingly meaningful contributions to the story
of our nation’s success.
To meet that goal, the Bank needs to have a sustainable
foundation, in which technology, human resources, and risk
management are top priorities. Each Techcomer is committed
ACHIEVING DREAMS 17
25 YEARS OF ACHIEVEMENTS

Techcombank's vision is

Vision, mission, core values To be the best bank and a leading enterprise in Vietnam
Mission
To be the most trusted financial partner of our customers, due to our ability to provide a full range of financial products and
services based on our “customer-centric” approach.

To create a positive working environment for employees, with massive opportunities to develop personal capabilities, make a
valuable contribution, and create a successful career.

To give shareholders long-term, attractive returns by deploying a fast-growing business development strategy, in parallel with
implementing corporate governance and risk management practices that meet or exceed international standards.

Core values

Customer Innovate to Effective People Committed

centricity be the leader collaboration excellence to action

"Because we only All Techcomers are "Because you "To create a competitive "To overcome
succeed when our always ready to lead cannot succeed at advantage and challenges and come
customers succeed" the charge for positive Techcombank if you outstanding success out on top"
change; to explore work alone" for ourselves and our
Techcombank always and learn without organization" At Techcombank,
places customers at the fear of failure; and Each Techcomer places commitment is not
center of every thought to be innovative in the Bank's benefits With the motto of only presented
and action. We protect every action to create above their personal "Empower and through thoughts, but
our customers' interests breakthroughs for the interests. They are be empowered", also through taking
by always complying benefit of customers. willing to listen to Techcombank the initiative and
with the laws and the constructive feedback, creates conditions responsibility to act
Bank’s regulations. to offer support when and opportunities for and deliver results.
Techcombank facilitates needed, and to work the staff to develop We are disciplined and
customers’ long-term together to create and to succeed. In compliant, yet we are
successes, in addition the highest value for turn, Techcomers bold and direct when
to addressing the short- Techcombank, its also actively learn speaking out against
term financial needs. customers, and its to improve their transgressions.
shareholders. capabilities and to
continually set higher
goals for themselves.

ANNUAL REPORT 2018 ACHIEVING DREAMS 19

25 YEARS OF ACHIEVEMENTS

Corporate structure
and network
Shareholder structure

Outstanding shares

The total number of outstanding shares of Techcombank

as at 31 December 2018 was 3,496,592,160 shares
(equivalent to the Bank’s charter capital of

3,496,592,160
VND34,965,921,600,000), which consist of:

Shares restricted to transfer

637,554,566 18.23% shares

Free-float shares

2,859,037,594 81.77%
Changes in equity ownership
Shareholder structure
On 12 July 2018, Techcombank increased its charter capital from VND11,655,307,200,000 to VND34,965,921,600,000 through
issuing shares at a ratio of 1:2.

14.995
% 22.51% Treasury share transactions
43.66%
56.34% In 2018, Techcombank had two treasury Date of Number Average price
Buyers
85.005% 77.49% share transactions as follows: implementation of shares (VND/share)

1st tranche Mar 23, 2018 93,242,458 91,000 Investors and

employees

Major shareholders * Institutional shareholders Domestic shareholders 2nd tranche May 07, 2018 64,411,157 128,000 Investors
524,315,499 shares 1,526,673,280 shares 2,709,558,224 shares

Other shareholders Individual shareholders Foreign shareholders

2,972,276,661 shares 1,969,918,880 shares 787,033,936 shares As at 31 December 2018, Techcombank did not have any treasury shares.

* According to Article 4.26 of the Law on Credit Institutions issued in 2010, “major shareholders of a joint stock credit
ANNUAL REPORT 2018 ACHIEVING DREAMS 21
institution are shareholders directly or indirectly holding 5% or more of the voting shares of the organization”.

2001
Implemented the
international standard core
banking system Globus.
2006
Joined the club of banks
with total assets of above
USD1 billion.
2009
Affirmed the leading JSC bank
position with VND5.4 trillion
in charter capital; total assets
reached VND95 trillion; became
the first Vietnamese bank to work
with the world’s leading strategy
advisor – McKinsey & Co.
2011
Became Vietnam’s second largest
Vietnamese JSC bank, by assets,
with total assets of VND180 trillion
and a network of 307 branches
nationwide.
2014
Affirmed our status as the
leader in service quality with 23
prestigious awards from domestic
and foreign organizations such
as Global Finance, IFC, and
FinanceAsia.
Became the bank of choice of 3.7
million individual customers and
48,000 corporate customers.
2018
2016 Listed on Ho Chi Minh City Stock Exchange under the ticker TCB, with
USD6.5 billion market capitalization.
Entered a breakthrough period with the launch and
implementation of the 2016-2020 transformation Recognized as one of the Top 3 biggest IPO deals in Southeast
Asia in 2018.
strategy to become the primary bank of choice, leading
the financial lives of the Vietnamese people, and to
become the No.1 bank in Vietnam.
Tripled charter capital, increasing it to VND34,965 trillion.
Became the first private JSC bank in Vietnam to exceed the VND10 trillion
Doubled profit before taxes compared to the previous threshold in profit before taxes.
year; awarded "Best Bank in Vietnam" by FinanceAsia,
"Vietnam’s outstanding bank of the year" by AsiaRisk, Became the leading bank in terms of Visa card transactions (debit and
and "Best HR Strategy" by Vietnam HR Awards. credit) in Vietnam, recognized by International VISA Card organization.
Awarded "Best Bank in Vietnam 2018" by Euromoney.
Named "Vietnam's Best Trade Finance Bank 2018" by Global Banking &
Finance Review.

1993 2003 2008 2010 2012 2015 2017

Established Joined the global card Became a founding Awarded "Best Bank Reaffirmed our position at the Became one of the top Became the leading Vietnamese bank in terms of credit
with initial system with F@stAccess member of Vietnam’s of Vietnam 2010" by forefront of bringing a sector- 2 banks in Vietnam in rating, earning the "national credit rating ceiling" by S&P.
capital of - Connect 24. largest card alliance - EuroMoney; honored leading digital technology terms of Visa payment
Maintained double-digit profit growth as profit before
VND20 billion. Smartlink; Launched the with many other experience through cardless ATM turnover, with 4.2 million
taxes swelled to VND8,036 trillion; ranked second in
Techcombank Visa Card. international awards. transaction service to over 2.8 customers.
profitability in Vietnam by Asian Banker; number of
million customers.
customers reached more than 5 million.
Became Vietnam’s leading bank in terms of Visa
transaction volume.
Became the market leader in bancassurance products,
forming a long-term, exclusive strategic partnership with
Manulife.
Led in EES index voted by employees; voted as one of
the Top 2 Best Workplaces in Vietnam’s banking and
finance sector.
Became long-term title sponsors of the iconic community
event - HCMC Techcombank International Marathon.
 25 YEARS OF ACHIEVEMENTS
Stories of Customers
Nguyen Phuong Anh
PFS customer
YEARS
I own a small family business and
have been a Techcombank customer
for nearly 20 years. I have personally
used many of Techcombank's products,
OF ACHIEVEMENTS from savings accounts and overdraft
protection, to bond investments. These
products address my personal needs
like they were "tailor-made" for me.
Techcombank was founded in 1993, just a few years after the reformations of Doi
Moi. Similar to the Vietnamese economy, the Bank has enjoyed 25 years of growth I have seen remarkable progress
and development. Nevertheless, the Vietnamese economy as a whole and the every day at Techcombank. They
local banking industry are still very young: while our population is vast at around 95 have innovative products such as the
million people, 70 per cent are still unbanked. Vietnam is growing rapidly, and there magnetic stripe card, the OTP code,
is even greater potential in the future. e-banking, as well as the f@st mobile
application and other mobile apps.
For Techcombank, as we lay out our vision for the future, success will be measured These innovations are very convenient
not only at the completion of our transformation, but also by the milestones we for customers, and the assistance
achieve along the way. In 2018, we achieved a very important milestone, as the from Techcombank’s staff made it very
bank completed the listing on Ho Chi Minh Stock Exchange, the largest listing in the easy for me to use these new services.
history of Vietnam's banking sector. The investment from our valued international
strategic shareholders has solidified our strong position, and we are thankful to them
Pham Thi Kim Oanh
for their partnership and support as we march toward a brighter and greater future.
Chief Finance Officer cum Chief Accountant - Hoa Phat Group
Techcombank has been working with
Hoa Phat for over a decade. As one
of the sources of medium-term capital
for Hoa Phat's Coke Production Plant,
Techcombank has developed many
products and services that impress
us. The quality of service and the
professionalism of Techcombank are
what have made Hoa Phat loyal to
Techcombank’s services throughout
the years.
ANNUAL REPORT 2018
Another plus is that domestic money
transfers via Techcombank are free
of charge. I believe that many other
customers feel satisfied with those
services, as well.
As for investment products, I was
advised to buy corporate bonds, and
I ended up using my idle money very
effectively. I hope Techcombank will
continue to promote its strength in bond
brokerage. As many businesses need
access to capital, Techcombank can
be a reliable partner to help them issue
bonds as a means of accessing funds.
Another unique trait that I have noticed
about Techcombank’s staff is that they
are very proud of the bank, and always
Techcombank doesn’t stop at providing
regular banking services. Rather,
they want to understand corporate
customers so that they can fully serve
such customers’ needs. As a result,
Techcombank has made deliberate
personnel changes, arranging staff with
specialized expertise in each field to work
directly with customers, to match us with
the people who better understand the
sector that Hoa Phat is operating in.
perform above and beyond what is
necessary. That makes customers
like me very confident in using
Techcombank's services.
I strongly believe in Techcombank's
commitment to being greater every day.
Techcombank has two stand out
characteristics compared to many other
partners with whom we have worked:
flexible products and an integrated
value chain.
Techcombank is one of four banks in
Vietnam with commodity derivative
products and is responsible for serving
up to 50% of Hoa Phat's derivative
needs. With respect to the value chain,
we recommend each of our new agents
open an account at Techcombank. The
fact that Techcombank has provided our
agents the same credit limit, coupled
with guaranteed quality of service, has
increased our operational efficiency
tremendously.
In addition, Techcombank also excels in
service fees and transaction processing
speed. The outstanding loans of Hoa
Nguyen Phuong Thanh
Deputy General Director - Thien Son Granite & Marble JSC
Thien Son Granite & Marble JSC
has a 17-year history of producing
stone materials in Hanoi, providing
construction materials for many large
corporations and projects. However,
Thien Son is only at the operational
scale of a small business. Our dream
is that Thien Son will continue our
sustainable development and become
a second home for our employees,
helping them to stay with the company
for the long-term. Techcombank has
been assisting us since 2014, and we
hope to continue our partnership on the
road ahead.
What’s unique about Techcombank is
that it has product offerings that are
highly relevant to our needs in terms of
Phat in 2018 at times reached up to
VND2.8 trillion, but the processing
procedures at Techcombank were
very fast, careful, and strict, especially
as environmental issues are tightly
attached to our business nature.
Techcombank has been a consistent
partner during the development of Hoa
Phat. As our company has expanded,
Techcombank has increased our credit
limit and the permitted transaction size.
Among Hoa Phat's domestic joint stock
bank partners, Techcombank is a key
provider of all the banking products that
we employ.
The staff at Techcombank is very
responsive to innovation. In 2018, our
company had a syndicated loan, and
Techcombank was quick to offer a
currency swap. No other domestic bank
operational scale and development. In
addition, they provide timely, high quality
financial advice. That is the key for us
to work with the bank in the long-term.
Furthermore, as we are satisfied with
Techcombank’s quality of service, we
often prioritize Techcombank for our
projects.
In 2018, as a result of Techcombank’s
support, Thien Son was able to
purchase new assets. At the time,
Techcombank had a new program
to provide financing to Vincom’s
subcontractors, and Thien Son was the
first to get capital under this program.
Thanks to that, we were able to acquire
the resources to implement many big
projects.
offered that. We are also continuously
being advised of many other products.
Lastly, Techcombank's employees
are very passionate, and are ready to
support us even beyond working hours.
This culture is very similar to our own
and is one of the factors that will make
Hoa Phat continue our partnership with
Techcombank in the future.
We are grateful for Techcombank’s
flexibility and willingness to go above
and beyond expectations to help us. At
one point, Techcombank's marketing
manager even flew from Ho Chi Minh
City to Hanoi to meet with us and give
her support.
We operate in a niche market, so we
have not gone through many major
upheavals. However, events such as a
loss of certain investment opportunities
have changed the company structure.
It is at such times that we need the
responsiveness of a bank partner,
and we appreciate Techcombank in
this regard.
ACHIEVING DREAMS 25
25 YEARS OF ACHIEVEMENTS | Stories of Customers
Nguyen Hong Giang
PFS customer
I am the owner of a confectionery import
and export facility in Hanoi. I have used
Techcombank exclusively since my
business was established in 2013.
For me, the most important
characteristics of banking services
are effectiveness and timeliness of
transactions. With Techcombank, I am
assured that if there is a need, I will be
supported.
Even though high frequency, small value
transactions are part of the nature of
my business, my business transactions
through Techcombank are still very
fast and effective. Techcombank's staff
also advised me on new products to
Nguyen Trong Nam
General Director - Thanh Binh HTC Vietnam JSC
Thanh Binh HTC was established in
1998. We are an SME in the industrial
steel sector. Techcombank has
supported us since our early years
when we encountered many difficulties
as a new young business entering
the market.
Professionalism is the outstanding quality
that makes us loyal to Techcombank:
listening to and understanding customer
concerns ensures that they can provide
us with products and services that best
fit our needs.
ANNUAL REPORT 2018
increase the efficiency of my business
operations, such as foreign currency
trading contracts to help my company
lock in a stable exchange rate.
With respect to personal banking,
Techcombank's products and services
meet my daily needs, as well as my
long-term needs such as investment
and insurance.
While Techcombank often rejuvenates
its team with new talent, it still
ensures professional competence and
enthusiasm. I see many employees with
long tenures at the bank. This makes
me feel secure when cooperating with
Techcombank.
The steel industry witnessed some
fluctuations in raw material prices in the
last few months of 2018 that directly
affected our operations. Although we
did not fully reach our profit target, our
results were positive in comparison to
other enterprises of the same scale in
the same industry.
We are grateful to Techcombank for
supporting us not only financially but
also operationally, by providing us
with market information and in-depth
seminars. This support enabled us to
In the last 3 years, my company's
performance has been very positive,
growing steadily over 20%. In the future,
I will need to invest in warehouses to
ensure stability for my operations which
will require support from Techcombank.
confidently manage market fluctuations
and risks so that we could seize
investment opportunities.
We also appreciate Techcombank for
its expert and dedicated employees.
Throughout nearly 20 years of
cooperation, although there have
been personnel changes, services
continued without interruption because
the transition process was quick and
effective.
Further, Techcombank provided us with
many products such as online banking
Tran Van Huu
Chief Accountant - Jetstar Pacific Airlines JSC
Jetstar Pacific (formerly Pacific
Airlines) and Techcombank have had
a relationship since the early ’90s,
when Techcombank was established.
Throughout this relationship,
Techcombank has always been a
trustworthy partner to us.
What we have noticed from working with
Techcombank is its team’s dedication.
The team emphasizes customer
care, learning about the customers’
needs, and targets comprehensively
addressing those needs. Throughout
our partnership, Techcombank has
been very efficient in handling our
transactions: from small tasks like
processing electronic payments or
settling foreign payments, to more
complicated aspects such as technology
integration and credit relations.
Techcombank has also been very
responsive and collaborative, ensuring
that we understand each other's
development strategy, enabling us to
quickly solve any emerging issues.
and weekly foreign exchange updates
that brought innovation and insights
to our business. With these services,
we have been able to control our cash
flow better, save time and costs, and
increase business efficiency.
Thanh Binh HTC and Techcombank
have built a long-term track record of
partnership, which has left us a very
good impression.
Since Techcombank understands its
customers, the Bank has been able
to provide us with solutions tailored to
our needs. The nature of the aviation
industry is large-scale retail with many
small agents and customers nationwide.
Without technology, it would be more
difficult for customers to access aviation
services, and harder for us to exert
greater financial control. Techcombank
assisted Jetstar with automatic
payments, collection from agents and
customers, promotion of cashless
payments, and minimizing intermediate
operations in financial management.
Other services such as salary payment
also aim to minimize procedures as well
as save time and costs.
We are also very impressed with
Techcombank for being a pioneer in
promoting investment in technology.
Techcombank's strategy is in line
with that of Jetstar Pacific, which is
the first airline in Vietnam to apply a
comprehensive e-commerce platform
In 2019, we will invest in a new
2,000-hectare factory in Hung Yen, so
the capital need is large. Amongst the
factors affecting our investment decision
was Techcombank’s indispensable
support. The financial solutions and
operational advice they provided helped
to make us more confident. Thank you,
Techcombank.
for selling electronic tickets. We aim
to build a digital airline by promoting
website development and expanding
electronic payment methods to optimize
customer experience. To meet this
goal, the corresponding technology
solutions for online payment, including
card products and collection services,
play an important role. Therefore, we
hope to continue our partnership with
Techcombank to increase the proportion
of e-commerce in our operations as well
as improve our quality of service.
ACHIEVING DREAMS 27
25 YEARS OF ACHIEVEMENTS

Stories from I joined Techcombank in July 2017 after more

Techcomers
than 11 years in the foreign banking industry. During
my time with Techcombank, I have seen three
major differentiating factors of the Bank: vision,
commitment, and outstanding innovation.

Nguyen Tat Khanh

Director of Transaction Banking, Wholesale Banking division

With respect to vision, Techcombank
aspires to be the No. 1 bank in Vietnam
and to make an impact on a regional
scale. It is very ambitious, but at the
same time very attainable. I trust that
our leadership and all Techcomers are
on the right track.
On a personal level, Techcombank
has widened my own vision to enable
a personal breakthrough. Through
participating in community activities
such as the Bank-sponsored marathon,
I had the opportunity to test my limits
and overcome challenges that I used
to think were impossible. To prepare
for the marathon, I set a goal for myself
to run a little further each week. With
the support and camaraderie of my
colleagues, it was not as difficult as
I had thought. With every milestone
I achieved, I felt very pleased to
overcome my own limits.
Techcombank unique is its ability to
commit to action and execute. Everyone
in the organization has embraced that
spirit, so that we are able to coordinate
smoothly, and demonstrate that
commitment through our everyday work.
Techcombank is not only committed to
becoming a trusted financial partner for
its customers, but it is also committed
to helping its employees develop
their capabilities and build successful
careers. As a new employee who joined
the bank less than two years ago, I have
personally felt Techcombank's strong
commitment to helping me grow. I was
assigned to manage the sales and
solution consulting team as part of the
Transaction Banking (TB) division. It is
a challenging environment, but I enjoy
it, as well as the feeling of fulfilment
from achieving my goal of better serving
customers.
sharing their experiences so that I could
complete this very practical training.
I have realized that Techcombank's
success comes from aligning the
commitment of each individual to the
commitment of the organization, through
the process of shifting their mindset
about work and life.
Finally, innovation is an outstanding
value of Techcombank, stemming from
its commitment to customer-centricity.
For example, we are continuously
working to identify new opportunities
to connect with new partners in
our customers' value chain, and to
improve solutions. In this perspective,
Techcombank aims to be a trusted
partner that brings the best benefits to
customers, rather than a mere service
provider that focuses on competition
through lower prices and reduced fees.

In terms of commitment, The Board of Management of the Bank Ultimately, the core of operation
many organizations talk about a accepted my application to join the at Techcombank is how to solve
customer-centric strategy. One TechcomLead training program, and customer problems and bring them the
of the characteristics that makes has worked closely with my cohort, highest values.

ANNUAL REPORT 2018 ACHIEVING DREAMS 29

25 YEARS OF ACHIEVEMENTS | Stories from Techcomers

At Techcombank, foundational "Data Excellence"

combined with our ongoing investment in technology It is the core values of the bank

Techcomers
will create many advantages for the Bank. that inspire me.

Pham Quang Canh Nguyen Thi Kim Hue

Director of Portfolio Analytics & Modeling - Risk Management Division Director of Doi Can branch

Risk management is a seemingly new
field, but in fact, it is the backbone
of any bank. My area of expertise,
after many years of experience in the
Singapore market, is in building a risk
management model based on a big data
analysis, supporting timely, objective
and even automated decision making.
One might think of it as Data Science in
risk management.
But the biggest challenge is how to put
these tools into effective use, for which
the support and long-term commitment
of the Board of Directors is a necessity.
After studying Techcombank's
environment and strategy and receiving
the trust and support of the Board of
Management - who not only understand
the opportunities and challenges in this
field, but also have practical experience
from international organizations to
draw upon - I was confident in joining
the Bank.
The next challenge is determining
whether the data is large and precise
enough, so that the model is error-
free and leads to the right decisions.
Techcombank has a set of more than
ten years of historical data, which
is relatively complete thanks to the
Bank’s investment in the data platform
and to the foresight of building the risk
management model based on Basel II
standards from an early point in time.
The Vietnamese banking industry is
behind the rest of the world in terms of
adopting these standards, and there
are many opportunities if we take
advantage of the latest developments
and utilize new data sources to
understand customers better as well
as improve their service experience.
At Techcombank, foundational "Data
Excellence" combined with our ongoing
investment in technology will create
many advantages for the Bank.
In addition, Techcombank's culture of
cooperation and personal development
is the key to overcoming the "human"
challenge in the Data Science field.
The coordination among teams to
understand customers, business
operations, risks and IT systems
has helped to ensure that the risk
management models run smoothly.
Moreover, the fact that our team is
enthusiastic and eager to learn is a
great motivation for me in my work.
Techcombank is the first bank in
Vietnam to successfully apply the
international financial reporting standard
IFRS 9, which requires a high degree
of transparency. Risk measurement
models are an important component
of making provisioning based on
expected loss. In addition, the use of
these models and data analysis has
helped us to make decisions faster and
more accurately, ensuring prudent risk
management while reducing operating
costs. Although there is much work
to be done, we have overcome the
biggest challenges, and I believe that
Techcombank has all the advantages to
become the market leader in terms of
data science technology.
I have worked at Techcombank since system in 2003, until now, seeing
its early days. I was very honored to be Techcombank become a pioneer in
appointed to register the Bank’s initial technology.
VND20 billion charter capital at the SBV.
These developments are rooted in our
From the very beginning, Techcombank customer-centric approach - we are
has consistently grown throughout the constantly innovating to bring customers
years. I have memories of the Bank the best experience and quality of
spanning my entire career, especially service. It is the core values of the bank
about the bank's culture and people. that inspire me. I am therefore very
The milestones that marked the optimistic about Techcombank's vision to
development of the bank are also become a leading enterprise in Vietnam,
the turning points in my career. I am and to reach out to the rest of the world.
always grateful to Techcombank and
the Board of Management, who have
greatly supported me and my fellow
Techcomers in our development.
I have held many positions throughout
my career, from treasurer to accountant
to branch manager. From these vantage
points, I have observed Techcombank's
development milestones, from using the
Siba accounting software to successfully
deploying the GLOBUS core banking

ANNUAL REPORT 2018 ACHIEVING DREAMS 31

25 YEARS OF ACHIEVEMENTS | Stories from Techcomers
I started my career at Techcombank
as a trainee in 1997. Over the past
22 years, I have witnessed every step
of Techcombank's transformation.
From a newly established bank with a
modest number of employees and a
lot of manual processes, Techcombank
has consistently invested heavily in
technology, making operations faster
and more accurate. Techcombank
is also preparing to launch our new
TB Platform, which promises to be a
turning point for the bank and will better
enable our customers to reach out to the
world market.
What keeps me stay at Techcombank
is the strong foundation of corporate
culture, built from scratch. It is a culture
based on proactivity and collaboration.
I have been trusted and empowered in
my job and in every assignment I have
been given, I have received thoughtful
guidance from the management.
This, along with practical training
ANNUAL REPORT 2018
At Techcombank, every employee is
encouraged to be creative at work, and to
work to their utmost capacity to achieve
the highest efficiency.
Tran Khanh Ngoc
Director of Payment and Trade Finance
programs, has made me confident in
doing my daily work. At Techcombank,
every employee is encouraged to
be creative at work, and to work to
their utmost capacity to achieve the
highest efficiency. The success of each
individual is tied to the success of the
organization.
Another core value of Techcombank
is non-stop innovation - it is a key
driver of excitement for each of us at
work. Throughout the past 25 years,
Techcombank and its customers have
grown in tandem. While we have
established a nationwide network,
we have also constantly evolved and
innovated to serve our customers in the
best way.
Vietnamese people are often proud
whenever the country makes it to
the international level. Techcombank
wants to satisfy that pride with our
vision and mission of becoming
a leading Vietnamese enterprise,
approaching international standards.
At Techcombank, every employee
understands this, and is aligned with the
common goals of the organization.
I joined Techcombank two years ago. At
that time, Techcombank had just begun
its transformation process, and changed
its approach from being product-driven
to being customer-centric. I saw this
as an opportunity, and so I decided
to stop working in a foreign banking
environment and, instead, joined
Techcombank.
Techcombank is attractive to me
because its modern and effective
approach is coupled with its employees’
commitment to working towards the
common goals of the organization. A
strategy will only produce good results
if you can execute it with determination,
and I believe Techcombank has
succeeded in that.
The successful implementation of
this strategy has not only helped
Techcombank gain advantages
in the market, but also has had a
significant impact on creating value
A strategy will only produce
Techcomers
good results if you can execute it
with determination.
Dang Thi Lan Anh
Business Marketing Director
for its customers and the community. I
believe the Bank's greatest strengths
is its leadership’s consistent ability to
execute and align people around a
common goal.
In addition, the team of Techcomers is a
diverse mix of young and experienced
employees, of locals and foreigners,
who bring unique and multidimensional
perspectives to work.
I personally aspire to engage in exciting
jobs that allow me to learn new things to
foster my own long-term development.
Techcombank provides me with that.
Further, management is often very
involved in staff projects, sharing their
experiences and helping all of us to
widen our perspectives. I myself was
encouraged to participate in many
different projects so that I could not only
gain more marketing experience, but
also learn more about other areas of
the Bank.
ACHIEVING DREAMS 33
 Business
Performance
"The epic transformation"
ANNUAL REPORT 2018 ACHIEVING DREAMS 35
BUSINESS PERFORMANCE

entire value chain from suppliers, to manufacturing enterprises,
to distributors and consumers.
In order to further the Government's direction of developing
the domestic economy as well as the SME sector,
Techcombank focuses on serving the value chains of six key
economic sectors that meet both short-term, daily needs (e.g.,
electricity, telecommunications, and consumer goods) and
long-term needs (e.g., housing, automobiles, and financial
services) of Vietnamese people and businesses. The core of
this ecosystem approach is to increase the level of interaction
between businesses in a value chain, thereby enabling us to
be more proactive in providing services for SMEs, especially
in the scope of credit and liquidity risk management.
The fact that Techcombank has provided our agents
the same credit limit, coupled with guaranteed quality
of service, has increased our operational efficiency
tremendously.
Ms. Pham Thi Kim Oanh,
CFO of Hoa Phat Group.
and IT platforms, to ensure operations run smoothly and
efficiently. As a result, the proportion of repeat customers
for each product is growing, and customers are increasingly
satisfied, thanks to the convenience and benefits brought by
our products and services.
After three years of implementing this strategy, Techcombank
was able to reduce risks in our loan portfolio by reducing the
total outstanding loans to large corporates, while at the same
time creating benefits for the economy, local businesses,
and individual consumers. Simultaneously, Techcombank
has actively shifted the tenure of outstanding loans to large
corporates and SME’s from predominantly long-term to mainly
short-term. Another positive result is that Techcombank has
increased the proportion of fee income, improving the stability
of our revenues. Techcombank has enjoyed 13 consecutive
quarters of year-over-year revenue growth and is leading the
sector in many retail areas.

Techcombank had a new program to provide financing to

Vincom’s subcontractors, and Thien Son was the first to get

Development strategy
capital under this program. Thanks to that, we were able to
acquire the resources to implement many big projects.
Mr. Nguyen Phuong Thanh,
CEO of Thien Son Granite & Marble JSC.

The more we learn about customers, the more we promote

T he motivation for Techcombank's new long-term develop-

ment strategy originated from our situation in the 2000s.
We have always been pioneers in terms of leveraging
technology to serve the financial lives of the Vietnamese
people and businesses. In 2001, Techcombank was the first
bank in Vietnam to deploy a global core banking system
from Temenos, thereby linking branches into a network that
could effectively serve customers' needs anywhere, instead
of just at an individual branch. Like many other banks in
Vietnam at the time, however, Techcombank encountered
some difficulties in the 2012-14 period when the economy
was suffering from turbulence. We took this as an opportunity
to systematically address and attempt to resolve all existing
issues and move forward.
Techcombank learned and incorporated an important lesson
from that episode. When laying out the strategy for the next
period, the 2016-20 transformation, rather than focusing
on the product, our strategy put the customer at the center
of everything we do. Thanks to the appropriate direction
and our continuous efforts over the past three years to
turn our strategy into action, Techcombank has achieved
outstanding results.
Although "customer centricity" might be the mantra of many
businesses, what is unique about Techcombank that enables
us to deliver truly exceptional results is, first and foremost,
there is only one focus: "customer". Techcombank does not
look at customers solely as individual entities, but rather we
treat them as members of an ecosystem, consisting of the
the customer centric approach. "Techcombank provides
customers with solutions rather than products", and "meeting
customer needs, not providing customers with what we
have", have become the standard mindset of Techcombank’s
business units. Each employee must answer the question,
"what does the customer need?", prior to thinking about which
products and services they should recommend to customers.
During the past three years, rather than launching a massive
number of new products, Techcombank eliminated some
products that were not suitable for the financial needs of the
target customer segments. Techcombank's product portfolio
has become leaner, but all our products satisfy the needs of
our key customer segments. At the same time, Techcombank
has made significant investments in our human resources

ANNUAL REPORT 2018 ACHIEVING DREAMS 37

BUSINESS PERFORMANCE
Business model
Our 2016-20 transformation strategy has spawned a comprehensive business model for
Techcombank, with seven interlinked components. First and foremost, our customers are at the
center. Around them, we identify a complete range of what is needed to serve them, including
products, sales and services, risk management, operations and technology, human resources, and
marketing and communications.
ANNUAL REPORT 2018
Customer centricity
Customer centricity is an explicit part of Techcombank
business model.
Techcombank has invested massive resources and time
to collect comprehensive customer data from all contact
points, and has analyzed this data to gain a deeper
understanding of customer needs and behavior. Hence,
Techcombank has segmented its customers by business unit,
and further categorized them by economic sector and sub-
segment. Combining customer segmentation and customer
Product development and pricing
At Techcombank, the most important metric is neither the
value of each contract signed with customers, nor the revenue
that customers bring in the month or a year. Rather, it is the
customer life-time value (CLV). As a result, Techcombank is
willing to share our revenue with customers to benefit both
sides, forging a long-term and sustainable relationship.
Unlike other banks, which usually launch short-term promotion
campaigns, in the last three years, Techcombank has pro-
moted the free and cashback elements as new, fixed features
of many of our products. The "Zero Fee" program was first
deployed for individual customers in 2016, and was expanded
Sales and services
The relationship between Techcombank and its customers
is built not only on meeting customers’ needs, but also
on the sales and service mechanism deployed by our
dedicated employees. Deep customer understanding allows
understanding, Techcombank has been able to constantly
improve the value propositions to better match the needs of
each customer segment.
Techcombank continually builds and adjusts these value
propositions to increase engagement and improve customer
experience. Over the last three years, Techcombank has
focused on building the capabilities of the frontline team,
providing the necessary resources so that they can better
serve our customers.
for SME customers in 2018, enabling millions of Techcombank
customers to save costs on all their online transactions.
Similarly, Techcombank’s portfolio of solutions, coupled with
our strengths in transaction banking and bond brokerage,
have also helped to bring sustainable benefits to tens of
thousands of enterprises in Vietnam, including the majority
of leading companies in the essential economic sectors. In
particular, the value chain approach allows Techcombank
to meet the needs of all businesses and individuals in
the ecosystem involving these economic sectors, thereby
enhancing the benefits we deliver.
Techcombank to improve sales channels to provide not only
the products and services that customers need, but also to do
so in a manner in which customers want these products and
services delivered.
ACHIEVING DREAMS 39
BUSINESS PERFORMANCE | Business model
Risk management
Over the last three years of our customer-centric
transformation, Techcombank has built a proactive risk
management culture based on the concept that "Bank’s
security is parallel with customers’ security”. Techcombank
has been a pioneer in applying advanced risk management
standards to enhance the Bank's risk management
capabilities. As a result, Techcombank has managed to
control low NPLs in recent years, and was one of the first
two banks in Vietnam to eliminate legacy bad debt by writing
off all of the VAMC bonds. Additionally, Techcombank is the
first and only bank in Vietnam to implement IFRS 9 for its
annual financial reports, the same standard employed by the
leading banks in the region.
Operations and technology
Techcombank’s strong technology base has contributed
significantly to the effectiveness of the Bank's risk
management system as described above. Techcombank
has always been a pioneer when it comes to investing
in technology. As a result, Techcombank's system
operates seamlessly - even during holidays - despite the
ever-increasing pressure on the system as the average
number of transactions keeps growing as a result of free
online banking.
In the years to come, Techcombank will continue to invest
in technology, and has earmarked more than $300 million
for just that purpose. This is a major investment not only in
comparison with domestic banks but also relative to leading
banks in the region, which in turn will help Techcombank
better serve our customers.
ANNUAL REPORT 2018
Product
development
& pricing
Marketing
Sales and
& Commu-
services
nication
Cus-
tomer
Human
Risk
manage- Marketing and Communication
resources
ment
"Customer centricity" is not only the keystone of our strategy, Vietnam is in a development period, and the Vietnamese
Operations but also the culture of Techcombank. With our brand people have quickly seized the opportunities to develop
& technology positioning of "Be greater", Techcombank aims to show along with the country. In this context, Techcombank also
what we are doing: providing financial services to millions has many opportunities to be an active force to promote this
of individual customers and tens of thousands of business development. With the vision of becoming the number one
customers, in order to help them lead more successful bank in Vietnam, Techcombank's brand positioning reflects our
financial lives. That brand positioning is also true for the Bank differentiation and leading role in guiding customers' financial
Human resources itself and the employees, who are working hard to "be greater" lives, and helping them achieve their dreams.
every day in their work, and to help customers succeed.
All of these systems and technologies don’t run themselves,
and Techcombank understands that people are the most
important resource. "People excellence", is therefore identified
as the first fundamental capability to successfully implement
Techcombank's strategy, and we are constantly striving to
achieve this goal.
Until recently, the number of Techcombank employees had
stayed largely flat, but the Bank’s investments in staff training
and improving the working environment have increased
constantly. As a result, Techcombank has created cohesion
among employees. We have been consistently ranked as one
of the leading workplaces in Vietnam, and surpassed many
foreign banks in Vietnam to come in second place within the
industry in this criterion.
Currently, Techcombank has an excellent team of senior
and middle management executives, and a spirit of
professionalism and mutual respect between those with
extensive experience in other international and domestic
organizations and those with many years of success at
Techcombank. This team provides a solid foundation for
executing Techcombank's business model, and will lead the
Bank to greater success not only throughout the rest of our
transformation, but also for many years to come.
ACHIEVING DREAMS 41
BUSINESS PERFORMANCE
Transformation program
The transformation began in 2015, and Techcombank is still in the midst of this process. The Bank’s achievements in
2018 were not happy accidents, but rather they were built up through long-term planning, preparation, and execution.
Human resources
I personally aspire to engage in exciting jobs that allow me to learn new
things to foster my own long-term development. Techcombank provides me
with that.
Dang Thi Lan Anh, Business Marketing Director.
development, Techcombank employs
an “employee-centric” approach
internally. “Quality” and “quantity” of
our human resources at Techcombank
are developing and improving, as
demonstrated through the following
metrics:
- The number of employees at
Techcombank grew 17% from 8,328
in 2017 to 9,757 employees in 2018,
according to the strategy and business
expansion plan, asserting the scale and
position of Techcombank in the market.
- The number of employees with
higher education is rising, as the
Techcombank always cultivates ratio of employees with postgraduate
“people excellence” - each individual qualifications improved from 5.96% in
at Techcombank works hard every 2017 to 8.7% in 2018.
day to contribute to the success of
the organization. Understanding - The job retrenchment ratio in 2018 was
the correlation between human 16.6%, significantly improved from 2017
resource development and the Bank’s (reduced 2.93%). This was the largest
ANNUAL REPORT 2018
reduction ratio in that ratio in the last
several years. Improved retrenchment
demonstrates the commitment and
investment of Techcombank’s Board of
Directors in:
• Executing effective strategies to attract
and retain talents (e.g., adjust yearly
basic income, prioritized loan programs
for employees, exceeding reward
programs in the market)
• Investing in talent development
through professional training programs,
talent framework training, PDP and
succession plan implementation
- The average employee tenure reached
4.5 years. This is a very positive
number, indicating the level of employee
commitment to Techcombank is much
higher than the three year average in
the rest of the industry.
- Techcombank was honored for
Excellent Human Resources Strategy,
Effective Human Resource Planning
and Recruitment, and Effective
Talent Management, and was one of
winningest enterprises at the Vietnam
HR Awards 2018.
Risk management
In 2018 and 2019, in addition to
managing the traditional risks any bank
faces, Techcombank is preparing to deal
with new risks in the financial market
such as strategy risk, technology risk,
model risk, and network security risk.
Presaging the future implementation
of Basel II in Vietnam, Techcombank
founded a Basel II project group in
September of 2012, led by foreign
experts with experience implementing
Basel II in Asia.
In March of 2014, when selected
by the SBV for the pilot program to
implement Basel II, Techcombank
began analyzing the impact and
developed an overall roadmap for
Basel II implementation. Throughout
this process, Techcombank has strictly
adhered to the guidelines from SBV,
proactively carrying out projects to
collect and process data, reviewing and
updating regulations, internal processes,
organizational structure, and completing
the capital adequacy ratio calculation
program as prescribed in Circular
41/2016 TT-NHNN.
Besides working to comply with Basel II,
per the standard method (Circular 41),
Techcombank also launched projects
to comply with Basel II according
to the advanced method, including
developing advanced risk measurement
models (such as PD, LGD, EAD, VaR).
With consulting support from Ernst
& Young, Techcombank became the
first Vietnamese bank to report its
financial statements according to IFRS9,
starting with its 2018 fiscal year. This
report includes the development and
completion of probability of default (PD),
loss given default (LGD), exposure at
default (EAD) models - based on Basel
II requirements.
Techcombank also completed the
review, amendment and supplement
of internal documents, adjustment of
organizational structure, formation of
new capital management councils, and
risk council to fulfill the Circular 13/2018/
TT-NHNN pertaining to the internal
control system. In 2019, Techcombank
will continue risk mitigating projects
including the internal capital adequacy
assessment process (ICAAP), endurance
checking, and capital planning as we
approach Basel II standards.
Techcombank is also one of the first
banks to implement a comprehensive
data connection with the state bank
credit center (CIC) by the Host-to-
Host method. This focused credit data
reference system helps enterprises to
proactively verify customer information,
to provide advanced security for
users, to minimize operational risk, to
optimize use, and to share internal data
while simultaneously saving costs for
Techcombank.
In 2018 Techcombank began
implementing its Business Credit
Decision Engine (BCDE) project. This is
an integrated platform which supports
different requirements of end-to-end
credit risk management operations
for enterprises, including financial
analysis, credit rating, credit process,
early warning and monitoring credit
conditions.
ACHIEVING DREAMS 43
BUSINESS PERFORMANCE | Transformation Program

“Techcombank is one of four banks in Vietnam with commodity

derivative products and is responsible for serving up to 50% of Hoa Phat's
derivative needs.
Ms. Pham Thi Kim Oanh, CFO of Hoa Phat Group.

Wholesale Banking Personal financial services

In 2018, the Wholesale Banking
division transformed the structure of
the loan portfolio, shifting medium-
and long-term loans to short-term
loans and corporate bonds.
In the past, Wholesale Banking
division served companies, or families
of companies, with annual revenues of
over VND600 billion. However, given
the complicated financial demands of
these large corporate customers, the
focus has shifted towards companies,
and groups of companies, with annual
revenues of over VND2,000 billion.
+ 184%
2017 2018
Short-term loans
The total average short-term loan balance
in Wholesale Banking in 2018 was VND38.6
trillion, an increase of 184% compared to 2017,
generating VND943 billion of interest income.
Techcombank’s focus is on optimizing the sales and service
experience for our retail customers. At the same time, we
+ 135% are developing other service channels, besides the branch
channel, based on understanding our customers’ needs.
Upgrading our Mobile Banking platform is just one example
of what Techcombank is executing to enhance customer
experience. Techcombank is working to automate daily
transaction processes to meet the customer need of making
banking faster and more convenient.
2017 2018
Additionally, Techcombank delivers short- and long-term
Average balance of corporate bonds training programs to our frontline employees to ensure
increased by 135% to VND25.4 trillion while
medium- and long-term loans decreased by 28% they have all the requisite skills and capabilities to support
to VND30.9 trillion. our retail customers. As a result, 2018 saw impressive
development in retail banking, resulting in Techcombank
maintaining its market leading position in such areas as Visa
cards, bancassurance, and home mortgages.
-- Total volume of credit card payments grew 53% compared
to 2017.
-- Online deposit grew by 158% in 2018.
-- Techcombank maintained nearly 20% market share for
bancassurance in 2018.
I have seen remarkable progress every day at
Techcombank. They have innovative products such as the
magnetic stripe card, the OTP code, e-banking, as well as
the F@st mobile application and other mobile apps. As for
investment products, I was advised to buy corporate bonds,
and I ended up using my idle money very effectively.
Nguyen Phuong Anh - Individual customer

Total income from services:

+ 28%

+ 94% + 93%

2017 2018 2017 2018 2017 2018

Advisory services for corporate
bond issuance
In 2018, we provided advisory service for the
issuance of VND65.2 trillion worth of corporate
bonds, generating VND600 billion in fee income
(increased 94% compared to 2017).
Maintain and spur fee income from
traditional services, especially
underwriting fee income
increased 93% to VND97 billion.
Total income from foreign
exchange trading
reached VND216 billion, an increase of 28%
compared to 2017 on total transaction of almost
USD7 billion, while income from derivative
transactions increased to VND105 billion.

ANNUAL REPORT 2018 ACHIEVING DREAMS 45

BUSINESS PERFORMANCE | Transformation Program

Technology
For the last 25 years, Techcombank has led the way on
digitizing financial services and banking products. In 2010,
Techcombank was the first bank in Vietnam to provide Internet
banking, and in 2014 Techcombank became the first bank
to provide Mobile Banking. Today, Techcombank provides
customers with the opportunity to conduct transactions
such as remittance, payment, deposit, and credit card
payments through mobile banking, essentially offering those
services 24/7.

In 2018, Techcombank presented its new brand positioning,

"Be Greater", showing our commitment to inspire everybody to
dare to dream big. This new brand position also demonstrates
the desire to enable each Vietnamese citizen to be optimistic
and independent to be greater together. Techcombank
conducted consumer research and confirmed that customers
expect greater digital capabilities from their bank. What’s
more, in the era of Technology 4.0, they expect a better online
experience that ensures the safety and security of their data.
Techcombank is committed to bringing data safety as part of
improving customer experience.
By the end of 2018, more than
Business Banking
Techcombank promotes a value chain approach within
our six targeted economic sectors. This enables us to
attract and serve key customers within those sectors, while
reducing risk weighted assets, and lowering new customer
acquisition costs.
The Business Banking division contributed 11% of total
revenues in 2018, increasing 33% compared to 2017 result. In
2018, we continued our transformation of the entire division,
during which we changed our targeted customer segments
business banking centers in special economic zones, where
our customers are located. We also provided specialized
training for our Relationship Managers (RMs), and established
the practice of matching the right RMs with the right
customers. In doing so, we are able to provide the most
suitable financial solutions to the customers’ needs, which
include short-term working capital loans, medium- to long-term
loans, current accounts, term deposits, as well as transaction
banking services like trade finance and remittance.

1.5 million customers

The nature of the aviation industry is large-scale retail
with many small agents and customers nationwide. Without
technology, it would be more difficult for customers to access
aviation services, and harder for us to exert greater financial
control. Techcombank assisted Jetstar with automatic
payments, collection from agents and customers, promotion of
cashless payments, and minimizing intermediate operations in
financial management. Other activities such as salary payment
also aim to minimize procedures and save time and costs.
Nguyen Van Huu, Jetstar’s Chief Accountant
were using digital banking, an increase of
90% compared to 2017.
We expect this growth to continue, and are enhancing our
capabilities and improving the digital banking experience.
This development is funded, in part, by the more than $300
million we are investing in IT.
and economic sectors, re-designed our end-to-end risk
process and continued upgrading technology.
The Business Banking division targets customers in the
USME and SME categories for primary banking relationships,
driving fee income and interest income. MSME customers
are targeted primarily for transaction banking business.
Lending grew dramatically in this business banking segment,
growing 49% versus the prior year, while deposits saw a 23%
increase.
As part of the Business Banking transformation, the division
restructured the sales and service model by establishing
This approach has improved service quality. Our own internal
investigation of SME customer satisfaction showed that
Techcombank’s service was graded 8.4/10 in terms of service
quality, and 7.8/10 on quality of business programs.
By implementing the right people, and the right strategy, at the
right time, we have achieved great results. In order to sustain
those achievements throughout the economic cycle, we are
investing in technology, and executing standardized, focused,
and advanced risk management methodologies. Further, we
are investing in human resources to maintain and develop
the next generation of leaders, and we will of course continue
deepening our understanding of our customers’ demands.

ANNUAL REPORT 2018 ACHIEVING DREAMS 47

BUSINESS PERFORMANCE

Customer centricity
When applying our “customer centric” approach, we always
ask whether we are applying our core corporate values when
delivering the solution. Techcombank aims to work with sector
leading efficiency, and that can only be achieved when we
stay true to our core values when delivering solutions that
customers’ needs.

As proof, Techcombank eliminated some products that did not

meet the demands of our customers. Our product portfolio
has become more streamlined, but all our products meet our

Corporate culture
customers’ demands.

Customer satisfaction is growing, not only because our

products and services are providing greater benefit than ever
before, but also because of the dedication and passion with
which our team delivers them. Effective collaboration

S ince before our transformation even began, Techcombank

believed that in addition to strong business initiatives,
corporate culture is an important foundation that an
organization must have. We consider our organization’s
culture as the railways for the Techcombank locomotive, and
that culture must be solid and effective for the train to roll
smoothly.
Techcombank’s culture originated from the Bank’s vision
and mission and has become part of all Techcomers’ DNA.
In other words, Techcombank can maintain a strong cultural
foundation thanks to the leadership of the Board of Directors
who recognize the importance of that foundation and work
to cultivate it. This creates a positive example and motivates
the rest of the team to live and work according to that same
culture every day.
In order to do that, Techcombank has designed a system to
ensure that every initiative contains a component of corporate
culture. We have a Culture Journey program at Techcombank,
which includes daily activities to increase each Techcomer’s
understanding of our core values, and to encourage them to
implement those values. At a higher level, Techcombank has
worked with consulting organizations to take strategic actions
to implement culture as part of our transformation process.
The impact of core values in Techcombank’s culture is plain
to see. You will always have things happen that are outside
a defined process. If you only rely on the normal process,
then you will not be able to resolve the issue. Techcombank’s
culture has proven that, with everyone’s agreement and
commitment to a common goal, all problems can be solved
more easily.
Innovation and creativity
Originating from the core values of our customer centric
strategy, Techcombank is always working to improve our
products and services. This constant quest for improvement
is reflected in our investment in better technology and more
efficient processes.
This process of improvement is part of the mindset and
working method of each individual to transform and innovate
together. Techcombank has worked with leading corporate
consulting organizations not only to renovate the technology
infrastructure and the operational processes, but also to
create alignment around our strategic changes to ensure the
success of the Bank’s transformation process.
Techcombank values the spirit of cooperation among our team
members. In an organization with more than 9,000 employees,
without collaboration, neither the individual nor the organization
can succeed. More importantly, without collaboration and
coordination, customers will not be best served. This is
because one department working alone cannot provide the
most effective and sufficient solutions for our customers.
In all projects at Techcombank, all team members are
encouraged to participate to solve problems, even if
that project does not directly relate to their department.
Techcombank’s sponsorship of endurance sports, such as
marathons and triathlons, not only benefits the community,
but also helps foster a spirit of camaraderie among our
team, enabling our people to better experience the impact of
collaboration.

ANNUAL REPORT 2018 ACHIEVING DREAMS 49

BUSINESS PERFORMANCE | Corporate Culture

Commitment to action
Success doesn’t come easy. Techcombank’s success
today has been achieved as a result of the commitment
of all Techcomers. This spirit has been demonstrated
clearly throughout the transformation process because this
process started with a mindset and perspective shift among
Techcomers. This transformation is made possible not only
by our Techcomers working above and beyond ordinary
expectations, but more importantly, because our entire team of
more than 9,000 Techcomers understands our vision and our
strategy, and they understand the impact of their commitment
to take action.

Techcombank’s core values are interconnected. Techcomers

People excellence have demonstrated their commitment by stepping out of their
comfort zones and their teams to support and coordinate
Techcombank is proud to say that our people are our with others, helping the organization achieve its goals, while
competitive advantage. Due to a strong corporate culture, simultaneously challenging themselves. The central theme
Techcombank can afford to be selective in hiring and is all employees at Techcombank share a common value,
retaining only the best performers in the market, who are placing customers at the center of everything we do.
aligned with the Bank’s strategic goals. The individual/
organization relationship at Techcombank is a two-way street.
Techcombank invests in training to develop the personal
capabilities of our employees, and vice versa, our employees
associate personal success with organizational success.

Since our transformation began, Techcombank has

continuously invested in training and development, with a
focus on our frontline team, ensuring that they have the
necessary resources to best serve our customers.

Techcombank has also consistently invested in developing

the capabilities of middle and senior level managers,
with programs that leave lasting impressions such as
TechcomLead, and new programs with support from foreign
experts such as TechcomHero. Thanks to initiatives such
as these, Techcombank has a group of middle and senior
managers with superior capabilities, in addition to their
track records of success in international and domestic
organizations.

In keeping with our spirit of collaboration, our focus on “People

Excellence” is a feature of the culture at Techcombank, and
helps to create cohesion and cooperation among employees.

ANNUAL REPORT 2018 ACHIEVING DREAMS 51

BUSINESS PERFORMANCE

Operating results
assessment report in 2018
Number 1 private joint stock commercial bank with profit before
tax of VND10.7 Trillion
While there are strong fluctuations in the
market, Techcombank again achieved
impressive results with VND18.3 trillion
in revenue and VND10.7 trillion in profit
before tax, increasing 11.5% and 32.7%,
respectively, compared to the previous
year. These results stem from the
development of all business segments
through the continuous implementation
of our customer centric strategy.
Credit growth of 20% helped increase
net interest income and record revenue
from core fees contributed to the high,
sustainable income for Techcombank in
2018. Several other factors contributed
to our record profits, including lower
contingency fees - reflecting the
progress in risk management -
disciplined cost management, and a
strong focus on writing off legacy
bad debts.
Actual transformation is a very
difficult and time-consuming process.
However, throughout the entire process
of redefining roles, responsibilities
and infrastructure, Techcombank
has remained consistent and true
to its customer-centric approach.
Techcombank, therefore, has seen
continuously improving results in return
for its efforts. This is evidenced by
the 13 straight quarters of year-over-
year revenue growth. This result again
affirms that Techcombank is doing the
right things in the right way.
Stable operating income stems from sustainable growth of
interest income and non-interest income
Techcombank’s total operating income
in 2018 reached VND18.4 trillion, an
increase of 11.5% compared to the
previous year, due to the steady growth
in interest income (24.6%), and non-
interest income (18.8%). Credit growth
allowed by the SBV increased in the
second half to 20%, based in part on
improved capacity resulting from the
successful capital raise in the first half of
Structure of operating income 2017- 2018
the year. This served as the main factor
driving net interest income to the highest
growth rate in the last 3 years, and
contributing 61% of Techcombank’s total
revenue in 2018.
The proportion of revenue from service
activities in 2018 increased faster than
the average rate of the four past years,
and continues to account for an ever
increasing percentage of the operating
revenue of Techcombank. This result
stems from the strategic design of
Techcombank to continue focusing on
increasing income contribution based
on fees to diversify and provide a
sustainable foundation for revenue -
something especially important during
periods of market volatility.

2018 2017 GROWTH

RATIO
VND BILLION VND BILLION VND BILLION %
20%
Total operating income 18,350 16,458 1,892 11.49% 24%
Net interest income
VND VND
• Net interest income 11,127 8,930 2,196 24.59%
15,012 18,350 Net fee income
• Net fee and commission income (1)
3,536 3,926 390 -9.94% Billion 19% Billion
17% 59% 61% Other income
• Other non-interest income 3,687 3,601 86 2.38%

Operating expenses 5,843 4,812 1,030 21.40%

Allowance and provision expenses 1,846 3,609 1,763 -48.85% 2017 (1)
2018
Profit before tax 10,661 8,036 2,625 32.66%

ANNUAL REPORT 2018 Note: (1) Net fee and commission income 2017 includes agency support fee for bancassurance services of VND1,446 billion. Note: (1) Total operating income 2017 doesn't agency support fee for bancassurance services of VND1,446 billion. ACHIEVING DREAMS 53
BUSINESS PERFORMANCE | Operating results assessment report in 2018

Customer Deposit Composition

201.471
+18%
170.971
Credit portfolio continues to grow, and is shifting to retail Effective growth of deposits,
customers and small and medium enterprises with CASA ratio reaching 29%
71%
Loan to customers composition At the end of 2018, the credit balance of Techcombank The shift in our loan portfolio from medium- and long-term
reached VND217.1 trillion, equivalent to the credit growth loans to short-term loans creates downward pressure on 76%
rate of 20% allowed by the SBV, based on the higher owner’s NIMs, but this is partially offset by reducing costs of funding.
equity after Techcombank completed the capital raise In 2018, Techcombank continued to focus on driving deposit
procedures on August 2018 while still maintaining NPL ratio at growth, especially CASA balances, and at year end the
40% 45% a low rate. CASA ratio reached 29%. Retail CASA balances grew 59%
compared the end of 2017, accounting for 44% of the total 29%
Techcombank continued to shift its loan portfolio from large demand deposit balance. To help drive those impressive 24%
corporate customers to individual customers and small figures, the Bank launched “Zero fee banking for businesses”
and medium sized enterprises (SMEs). Therefore, the based on the success of the program among retail customers,
13% proportion of loans to large corporate customers decreased as well as “Unlimited 1% cashback” for debit card purchases. 2017 2018
20% significantly from 47% to 35%, giving room to SMEs and Techcombank will continue to invest in initiatives that improve
individual retail customers, which accounted for 20% and convenience and customer experience. Term deposits Current accounts
45% of total outstanding loan balance, respectively. This is
the result of a strategic shift, and Techcombank still meets
47% the credit demands of large corporate customers by advising
31 DECEMBER 2018 31 DECEMBER 2017
and assisting them to issue corporate bonds to the market. DEPOSITS COMPOSITION BY
35% 2018 was a record year for corporate bond advisory, with CUSTOMER SEGMENT
Techcombank advising on the issuance of VND62 trillion in VND BILLION % VND BILLION %
bonds. 2018 also witnessed unprecedented growth in SME
lending activities, with a growth rate of 49% compared to the
previous year, as the tenure of the loans shifted to more short- Term deposits 143,613 100% 129,728 100%
2017 2018 term loan products. More importantly, the bank still controls
and maintains strong credit quality and ample liquidity as the
Large corporates Retail SMEs strategic shift in our loan portfolio continues. Individual 116,844 81% 105,176 81%

Institutional 26,769 19% 24,551 19%

Current accounts (1) 57,801 100% 41,243 100%

Individual 25,212 44% 15,867 38%

Institutional 32,589 56% 25,376 62%

ANNUAL REPORT 2018 Note: (1) Inclusive of marginal deposits ACHIEVING DREAMS 55
BUSINESS PERFORMANCE | Operating results assessment report in 2018

Core fee income continues to develop, contributing 19% of total Income from guarantee Growth
for securities issuance
revenue 61,992 79%

C ore Fee income in 2018 at Techcombank was led by

corporate bond advisory, and bancassurance which
accounted for 33% and 20% of core fee income, respectively.
for insurance products among retail customers. The strong
growth in non-interest income in general and fee income in
particular also contributes to higher returns on assets, as
The growth rate of these fees reflect the ongoing credit Techcombank can drive profits while continuing cautious Bond volume
demand of corporate customers and the increasing demand management of balance sheet growth.
34,637
1,160 210%
Fee income
Corporate Bond advisory brought VND1.2 trillion in fee 375
2018 2017 (1) income, three times higher than last year.
NET FEE AND COMMISSION INCOME
STRUCTURE 2017 2018
VND Billion % VND Billion %

Income from guarantee for Premium income (VND Billion) Growth

1,160 33% 375 15%
securities issuance
917
Income from bancassurance 722 20% 574 23%
41% Techcombank maintained its market leadership in
bancassurance, and began the transition to a direct sales
Annual 649 model in 2018. This will help drive fee income as well as
Card services 479 14% 450 18% premium cross-sales opportunities.
equivalent
(APE) In line with the SBV’s plan to drive more cashless
Payment & cash services 748 21% 738 30% transactions, Techcombank implemented a program titled
“Unlimited 1% cash back for debit cards” for retail customers,
574 722 26% building on the success of the “Zero fee” online banking
Other services 408 12% 343 14% program that was launched in late 2016. As a result,
Techcombank became the market leader in Visa credit and
Fee income debit card transactions. This is a meaningful milestone,
Net fee and commission income 3,536 100% 2,480 100% recognizing Techcombank’s efforts to deliver high quality card
products and services to customers.

2017 2018

ANNUAL REPORT 2018 Note: (1) Excluding the bancassurance agency supporting fee of VND1,446 billion ACHIEVING DREAMS 57
BUSINESS PERFORMANCE | Operating results assessment report in 2018

Delivering cost to income ratio (CIR) of 32% 31 DECEMBER 2018 31 DECEMBER 2017 CHANGE
UNIT (VND BN)
Part of Techcombank’s profit performance in 2018 was due to our customers. Projects related to transformational consulting VND BN % VND BN % VND BN %
continued efforts in cost management. and system development were therefore prioritized in 2018,
evidenced by a 32.8% increase in expenses in these area
In 2018, Techcombank continued to invest in human resources versus the prior year. Salaries and related expenses 3,240 55.45% 2,595 53.92% 645 24.86%
and added significant headcount in line with the Bank’s five-
year strategy. Accordingly, Techcombank’s total operating In tandem with the internal transformation, Techcombank drove Office and asset rental, tools and
costs increased 21.4% compared to 2017. CIR for 2018 was experiential marketing through sponsorships of the Ho Chi equipment expenses. and depreciation of 1,088 18.61% 1,047 21.75% 41 3.88%
31.8%, the lowest rate among joint stock commercial banks Minh City International Marathon and the Vietnam IRONMAN fixed assets
in Vietnam. 70.3 Triathlon. In addition to these branding activities,
Techcombank also introduced many other marketing and Publication, marketing and promotion 301 5.15% 263 5.47% 38 14.25%
Staff costs made up 55% of operating expenses. The Bank promotion programs, and provided ecosystem-based solutions
added nearly 1,500 employees in 2018, and the ratio of for customers in the six targeted economic sectors. Expenditure on payment of insurance
194 3.32% 166 3.45% 28 16.62%
business employees versus support staff remained largely premium for customers’ deposits
unchanged. In line with our HR strategy to develop and retain 2018 also marked the largest listing on HOSE in Vietnam's
high quality talent, Techcombank delivered salary increases banking sector. Meeting and networking activities with Per diem expenses 100 1.71% 71 1.48% 28 39.71%
at a competitive rate, and drove training activities to improve investors grew compared to 2017, and accounted for 3% of
employee capabilities. Accordingly, staff costs increased 24.9% total expenses compared with 2.36% in 2017.
Training and education expenses 35 0.60% 29 0.61% 5 18.59%
in 2018, and training costs increased 18.6% compared to 2017.
Techcombank delivered strong revenues across all business
In addition to our efforts to strengthen human resources, units as well as balanced prudent cost management with Conference expenses 76 1.30% 42 0.87% 34 80.39%
Techcombank set in motion a number of transformation long term investment, creating impressive profits in 2018 and
programs which aim to lead Techcombank to the number one laying a sustainable foundation for the future development of
position in the market while delivering meaningful value to the Bank. Consulting expenses 152 2.59% 114 2.37% 37 32.78%

Other operating expenses 658 11.27% 484 10.06% 174 35.98%

Total operating expenses 5,843 100% 4,812 100% 1,030 21.40%

Average number of employees (person) 9,757 8,328 1,429 17.16%

Revenue/employee/year 1.88 1.98 (0.10) -4.83%

Cost/employee/year 0.60 0.58 0.02 3.62%

Cost to Income ratio (CIR) (%) 31,84% 29.24% 2.60%

ANNUAL REPORT 2018 ACHIEVING DREAMS 59

BUSINESS PERFORMANCE | Operating results assessment report in 2018

Balance sheet management and effective liquidity risk management

Balance sheet management Liquidity management

2018 saw effective and managed balance sheet growth. Total assets at the end of 2018 reached VND321 trillion, 19.2% growth Techcombank maintained compliance with the SBV requirements regarding liquidity as prescribed in Circular 36/2014-TT-
compared to the prior year, in which credit increased by VND36.8 trillion, and deposits increased by VND26 trillion compared to NHNN, amended by Circular 06/2016/TT-NHNN.
2017. As a result of the successful capital raise in 2018, total equity increased by VND24.9 trillion compared to 2017.
In 2018, with the goal of reducing short-term deposits deployed for long-term lending to the SBV-prescribed level of 40%
for 2019, Techcombank proactively managed the ratio of short-term deposits to long-term lending down to 31.5% at the
UNIT (VND BN) 2018 2017 CHANGE end of 2018.

To manage internal liquidity risk, Techcombank follows the management systems, measurements, supervision, and forecasts
Total credit 217,138 181,002 36,136 19.97%
of liquidity risk supported by the Audit and Risk Committee (ARCO), the department issuing the risk appetite framework for the
Bank as a whole, and the Asset and Liability Committee (ALCO), the department implementing and supervising the execution
Loans to customers 159,939 160,849 -910 -0.6% and liquidity risk management, assuring the compliance with risk appetite and limit/warning thresholds as prescribed by
the ARCO.
Corporate bonds 59,656 21,912 37,744 172.3%
Furthermore, liquidity stress tests were also carried out in a large market scale scenario, and in a Techcombank-specific
Deposits from customers and valuable
214,593 188,611 25,982 13.8% scenario. These liquidity tests are carried out monthly to forecast cash flow over a certain period, with the assumption that the
papers issued
Bank will face particular stressors, such as an increasing withdrawal rate, or limited access to interbank funds. Techcombank
Deposits from customers 201,415 170,971 30,444 17.8% has proactively developed a liquidity conservation plan (LCP) to ensure a timely response to stressful situations, helping prevent
liquidity crises from arising.
Valuable papers issued 13,178 17,640 -4,462 -25.3%

Capital and reserves 51,783 26,931 24,852 92.3% LIMIT ACTUAL LIMIT ACTUAL
LIQUIDITY RATIO
2018 31/12/2018 2017 31/12/2017
Share capital 35,443 9,777 25,666 262.5%
Liquid reserve ratio ≥ 10% 16.95% ≥ 10% 15.87%
Total reserves 3,868 6,157 -2,289 -37.2%

Retained earnings (accumulated losses) 12,403 10,997 1,406 12.8%

30-day solvency ratio (VND) ≥ 50% 55.89% ≥ 50% 52.58%
Minority interest 69 _ 69 NA
Loan-to-deposit ratio ≤ 80% 65.45% ≤ 80% 76.62%

Capital management Short-term capital sources used as the medium

≤ 45% 31.50% ≤ 50% 42.98%
and long term loans
The bank’s capital adequacy ratio at the end of the year was 14.3% according to Vietnamese Accounting Standards, 530 basis
points higher than the limit according to SBV regulations.

Profits after tax in 2017 were retained in full to invest and serve the growth of the Bank in the future. Additionally, Techcombank Although there is still much to do, Techcombank delivered outstanding results against the central goals of the first three years
completed projects to prepare for early adoption of Basel II standards in compliance with the roadmap of the SBV, and has of implementing our transformation strategy. This has fostered the belief within the Board of Directors and the employees of
already submitted its application to the SBV. Techcombank that the Bank’s strategy is being executed successfully, and will continue to bring superior results for years to come.

ANNUAL REPORT 2018 ACHIEVING DREAMS 61

BUSINESS PERFORMANCE
Significant figures
Total Assets
VND321.0 TRILLION
Techcombank‘s total assets on December 31, 2018
reached VND321.0 trillion, surpassing the planned rate
of 2018, growing 19.2% compared to 2017 with a four
year CAGR of 16.2% from 2014 to 2018.
Owner’s Equity
VND51.8 TRILLION
Charter capital: VND35.0 trillion
Owner’s equity reached VND51.8 trillion, increasing
92.3% compared to 2017, of which charter capital
was VND35.0 trillion, and retained earnings increased
200% to VND 12.403 billion. In August 2018,
Techcombank enacted a plan of increasing chartered
capital to VND35.0 trillion. The goal of this capital
increase was to share benefits with shareholders by
converting owners’ equity into usable capital to invest
in infrastructure and loans.
ANNUAL REPORT 2018
Mobilized sources
VND207.7 TRILLION
17.8% compared to 2017
To maintain an effective LDR, Techcombank
actively adjusts the increase in customer
deposits in each period throughout the year.
Deposit balances reached VND207.7 trillion
including VND6.3 trillion in certificates of
deposit at the end of 2018, an increase of
17.8% compared to 2017.
Deposit balances grew significantly in 2018,
with the ratio of CASA balance growing to
27.8%, which contributed to maintaining the
net interest margin (NIM) at 3.74% - higher
than the average level of the banking industry.
Credit quality Capital
Below % for2 adequacy ratio
non-performing loans
Credit costs in 2018 were stable compared to 2017, and
14.3%
non-performing loans were held below 2%, within target.
The bank finished writing off legacy bad debts from Capital adequacy ratio (CAR) at December
VAMC bonds in 2017. 31, 2018 was 14.3%, much higher than the
9% minimum per SBV regulations.
Profitability
VND10.7 TRILLION OF PROFIT BEFORE TAX
32.7% compared to 2017
Profitability continued to improve in 2018.
Profit before tax in 2018 reached VND10.7 trillion, an increase of 32.7% compared to 2017. Net interest
income increased 24.6% versus 2017. Return on average asset (ROAA) and return on average equity
(ROAE) reached 2.9% and 21.5%, respectively.
ACHIEVING DREAMS 63
 Corporate
Governance
"A solid foundation"
ANNUAL REPORT 2018 ACHIEVING DREAMS 65
CORPORATE GOVERNANCE

Chairman’s message CEO’s message

on Corporate Governance on Corporate Governance

O n June 4, 2018, Techcombank was officially listed on the

Ho Chi Minh Stock Exchange (HOSE). This milestones
has validated our corporate governance’s compliance with not
only the Law on Credit Institutions but also Securities Law,
which was highly appreciated by foreign investors through
their investments in Techcombank shares – marking our deal
the second largest listing in Vietnam’s stock market in 2018.
I n 2018, after listing and increasing our charter capital,
Techcombank has achieved a record pre-tax profit of more
than VND10 trillion. This result has validated the Bank’s right
approach in meeting customers’ needs and affirmed that we
have been pursuing the right strategy under the right direction
of the Board of Directors coupled with the highest commitment
and cooperation from the Board of Management.
The refreshed corporate governance structure will be one of
Techcombank's top priorities in order to create an environment
for the management team to demonstrate their outstanding
leaderships based on lean and transparent principles. We
will continue to implement and apply the redesigned model
into reality to foster management excellence, business
performance as well as resource optimization.

Realizing the importance of a transparent and effective
governance structure where there is a clear separation
between management and governance so that our
shareholders, investors and other stakeholders could
secure their investments and give high credits to the
organization, Techcombank continues to promote the
implementation of a new governance model that enables us to
pursue an early adoption of Basel II, especially the guidelines
on Corporate Governance principles for banks (328*) by the
Basel Committee and other leading international corporate
governance practices. This shall allow us to meet the
At the governance level, we are committed expectations of both local and international investors.
to ensuring prudent management and
accountability within the bank, and fairness to In 2019, Techcombank will implement the separation of the
our customers, employees and shareholders. Risk Committee and the Audit Committee and a number of
other Committees to ensure conflicts of interests are closely
During our transformation period, we remain monitored by different board members. This shall give the
committed to safeguarding business continuity Board different objective views while examining key aspects
and the highest levels of performance.” of the Bank, especially in the field of risk management, as well
as to audit independently, creating distinct lines of defense.
Techcombank's Board of Directors will continue to enhance the governance quality of the Board
through the selection and appointment of the Board members with profound experience from reputable
international organizations, and the diversity of expertise and skills to lead the Bank to meet the increasing
customers’ demands. In addition, we will continue to strengthen our oversight capacity in all critical areas
to ensure the Bank’s resilience in the face of market volatility, safeguard values for investors as well as
increase the organization’s long-term benefits and sustainable development.
Also in 2018, Vietnam has witnessed significant changes
in the legal environments through gradually applying
international practices of corporate governance and internal
control. Some of the most important regulations issued by the
SBV in an effort to create necessary buffer steps before banks
in Vietnam apply Basel II standards in 2020 include:
Circular no. 13/2018/TT-NHNN effective from 01/01/2019
Circular no. 41/2016/TT-NHNN effective from 01/01/2020
Techcombank has proactively studied and designed a
corporate governance model for the next three years as well
as a roadmap for execution in each year. In 2019, Board of
Management will continue with the implementation as per
the Board's directions, ensuring absolute compliance with
the current Vietnamese laws and regulations as well as
international practices.
At management level, we
are committed to ensuring the
growth and sustainability of the
organization

ANNUAL REPORT 2018 * Reference: Guidelines on C.G principles for Bank – July 2015, Basel Committee on banking Supervision – BCSC 328 ACHIEVING DREAMS 67
CORPORATE GOVERNANCE

Our Board Mr. Nguyen Dang Quang

 irst Vice Chairman
F
Age group
of Directors 29% 28%
Under 50
Age: 56
Elected: 05/2008
Tenure at Board of Directors: 20 years
51 - 60
43%
Mr. Nguyen Dang Quang has served as First Vice Chairman
61 - 70 of Techcombank’s Board of Directors since April 2016.
1 Independent Director Previously, he was a member of Techcombank’s Board of
Directors from May 2014 to March 2016 and was First Vice
5 Non-executive Directors Chairman of the Bank from May 2008 to April 2014. Before
becoming a Director of Techcombank, Mr. Nguyen Dang
1 Executive Director Tenure at Board Quang had more than 20 years of executive experience,
including membership on the Board of Directors at Masan and
of Directors key management positions at Techcombank since 1995.
14%
Under 5 years Mr. Nguyen Dang Quang holds a PhD from the National
Academy of Sciences of Belarus and an MBA from the
57% 29%
5-7 years Plekhanov Russian University of Economics.

Above 7 years

Mr. Ho Hung Anh Mr. Nguyen Thieu Quang

Chairman  ice Chairman
V

Age: 49 Age: 60

Elected: 05/2008 Elected: 05/2008
Tenure at Board of Directors: 15 years Tenure at Board of Directors: 20 years

Mr. Ho Hung Anh has been the Chairman of Techcombank’s Mr. Nguyen Thieu Quang has been a member of
Board of Directors since May 2008. Prior to his election as Techcombank’s Board of Directors since 1999 and became
Chairman, Mr. Ho Hung Anh had served as a member of Vice Chairman of Techcombank’s Board of Directors in May
Techcombank’s Board of Directors from 2004. His professional 2008. Mr. Nguyen Thieu Quang has signifcant executive
career also includes several years of experience at executive experience including various key positions at Masan,
level at large organizations, including Masan. Vinaconex, and Senco.

Mr. Ho Hung Anh holds a degree in electrical engineering from Mr. Nguyen Thieu Quang holds a degree in civil engineering
the Kiev Polytechnic Institute in the Ukraine. from Donetsk Polytechnic Institute in the Ukraine (now
Donetsk National Technical University).

ANNUAL REPORT 2018 ACHIEVING DREAMS 69

CORPORATE GOVERNANCE | Our Board of Directors

Mr. Nguyen Canh Son Mr. Lee Boon Huat

Vice Chairman Non-executive Director

Age: 52 Age: 62

Elected: 04/2009 Elected: 04/2014
Tenure at Board of Directors: 11 years Tenure at Board of Directors: 7 years

Mr. Nguyen Canh Son has served on the Board of Directors Mr. Lee Boon Huat has been a member of Techcombank’s
since May 2008 and has been the Vice Chairman of Board of Directors since May 2014, prior to that, he was an
Techcombank’s Board of Directors since April 2009. Mr. Independent Director of the Board of Directors from December
Nguyen Canh Son has more than 20 years of management 2012 to April 2014. Before joining Techcombank, Mr. Lee Boon
experience including positions as the Chairman at Huat worked with several international organizations, including
Eurowindow Holding and Board membership at T&M the Monetary Authority of Singapore, HSBC, Canadian
Invest Vietnam. Imperial Bank of Commerce, Chemical Bank, and Standard
Chartered Bank.
He holds a degree in civil engineering from the Moscow
Institute of Civil Engineering in Russia (now Moscow State Mr. Lee Boon Huat holds a Bachelor’s degree in Business
University of Civil Engineering). Accounting from the Western Australian Institute of
Technology (now Curtin University).

Mr. Do Tuan Anh Mr. Nguyen Doan Hung

Vice Chairman cum Deputy CEO Independent Director

Age: 46 Age: 66

Elected: 06/2015 Elected: 05/2014
Tenure at Board of Directors: 7 years Tenure at Board of Directors: 5 years

Mr. Do Tuan Anh has been Vice Chairman of the Board of Mr. Nguyen Doan Hung has been an Independent Director of
Directors and Deputy CEO of Techcombank since June 2015 the Board of Directors of Techcombank since May 2014. He
and served as a member of Techcombank’s Board of Directors has extensive management experience with the State Bank of
since December 2012. Prior to his appointment to the Board Vietnam, having held positions including Head of the Capital
of Directors, Mr. Do Tuan Anh held various management Market Research and Development Department, Head of
positions at the State Bank of Vietnam and Techcombank, the Governor’s Office, and Head of the Foreign Exchange
including Deputy Director of the General International Management Department. He also served as the Deputy
Cooperation Department and Director of the Banking Executive Director of the World Bank and Vice Chairman of
Supervision Agency, Senior Assistant to the Board of Directors the State Securities Commission of Vietnam.
and Head of the Strategy and Corporate Development
Division. Mr. Nguyen Doan Hung holds a Bachelor’s degree in English
language from Hanoi University (Vietnam) and a Master’s
He holds a Master’s degree in Wealth Management from degree in Financial Management from the University of
Singapore Management University (Singapore). London (England).
ANNUAL REPORT 2018 ACHIEVING DREAMS 71
CORPORATE GOVERNANCE | Our Board of Directors

Techcombank share ownership and positions in other companies Expertise and experience of Board of Directors
held by members of the Board of Directors
NUMBER POSITIONS IN OTHER COMPANIES HELD BY
NO. FULL NAME POSITIONS
OF SHARES
%
BOD MEMBERS Experience
1 Ho Hung Anh Chairman 39,309,579 1.1242% --None
2 Nguyen Dang Quang First 9,403,176 0.2689% --BOD Chairman cum CEO, Masan Group
Vice Chairman --BOD Member, Masan Consumer
Management and Leadership
--BOD Member, Masan Resources
--Chairman of the Member’s Council, Nui Phao
Mining Company
--BOD Chairman cum CEO, Masan Corporation
Banking and Financial Services
3 Nguyen Thieu Quang Vice Chairman 30,256,431 0.8653% --BOD Member, Masan Consumer
--BOD Chairman, Saigon Environmental Technology &
Construction Corporation
--BOD Chairman, Golden Lotus Kim Huynh JSC
--BOD Chairman, Golden Lotus Building JSC
Expertise
4 Nguyen Canh Son Vice Chairman 17,954,979 0.5135% --BOD Chairman, Eurowindow Holding
--BOD Chairman, Melinh Plaza Thanh Hoa Trade
Complex Investment JSC
--BOD Member, T&M Van Phong Investment & Human Capital and Banking
Tourism JSC; Management
--BOD Chairman, Incentra JSC
--BOD Chairman, Eurowindow JSC
5 Do Tuan Anh Vice Chairman 887,542 0.0254% --Member of the Member’s Council, Techcom Securities Risk Management
cum --BOD Chairman, INB Investment JSC
Deputy CEO --BOD Chairman, Dai Hung Tinh Investment JSC
--BOD Member, Techcom Capital JSC
6 Lee Boon Huat Board Director 0 0.0000% --Independent Director - AfrAsia Bank Limited Mauritius Regulatory, Law and Compliance
--Independent Director - Alliance Bank Bhd
--BOD Member - Credit Counselling Singapore
--Independent Director - British Malayan Holdings Limited
Community affairs, Government
7 Nguyen Doan Hung Board 162 0.0000% --Independent Director, Phu Hung Securities JSC Relations, Social Responsibility and
Independent Public Policies
Director

Operation and technology

Number of Directors 0 1 2 3 4 5 6 7

ANNUAL REPORT 2018 Note: The number and percentage of shareholding as of 31/12/2018 ACHIEVING DREAMS 73
CORPORATE GOVERNANCE | Our Board of Directors

BOD activities Resolutions of the Board of Directors in 2018

The Board of Directors oversees the operations of the CEO/Board of Management (BOM) through the authorization and NO. RESOLUTION NO. ISSUANCE DATE MAIN CONTENT
delegation mechanism as well as TCB’s internal regulations issued by the BOD. Activities that are under the authorities and
7 1086/2018/NQ-HĐQT 12/06/2018 --Approval of business results as of 05/2018.
decision by the Shareholders' General Assembly and the BOD, shall be reported and submitted to the BOD for approval by
--Approval of Supervisory Board’s report as of 05/2018.
CEO, upon which the BOD will make decisions promptly or authorizes the CEO/BOM to implement. --Approval of the organization of Extraordinary General Shareholders’ Meeting
on 14/6/2018.
BOD’s activities in 2018
8 1569/2018/NQ-HĐQT 21/09/2018 --Approval of business results as of 08/2018.
--Approval of Supervisory Board’s report as of 08/2018.
DAY BECOMING
NO. OF
A MEMBER OF ATTENDANCE 9 1905/2017/NQ-HĐQT 14/12/2018 --Approval of business results as of 11/2018.
NO. BOD MEMBERS POSITION ATTENDED
THE BOARD OF RATE --Approval of Supervisory Board’s report as of 11/2018
MEETINGS
DIRECTORS --Approval of business plan for 2019.
--Approval of report and proposal of restructuring of governance, supervisory
1 Mr Ho Hung Anh Chairman 19/04/2014 7 100%
and management of the bank to comply with regulations of Circular No.
2 Mr. Nguyen Dang Quang First Vice Chairman 19/04/2014 7 100% 13/2018/TT-NHNN.

3 Mr. Nguyen Thieu Quang Vice Chairman 19/04/2014 7 100%

4 Mr. Nguyen Canh Son
5 Mr. Do Tuan Anh
6 Mr. Lee Boon Huat
7 Mr. Nguyen Doan Hung
Resolutions of the Board of Directors in 2018
NO. RESOLUTION NO.
1 146/2018/NQ-HĐQT
2 224/2018/NQ-HĐQT
3 225/2018/NQ-HĐQT
4 226/2018/NQ-HĐQT
Vice Chairman 19/04/2014 7 100% Activities of Independent Directors
Vice Chairman cum Deputy CEO 19/04/2014 7 100%
Board Director 19/04/2014 7 100% As stipulated in the Techcombank’s Charter passed Neither directly nor indirectly owning or representing
Board Independent Director 19/04/2014 7 100% by the General Shareholders’ Meeting on 3rd March ownership of 1% or more of TCB’s chartered capital
2018, in addition to meeting the requirements of civil act or voting shares; together with his/her related persons
capacity, professional ethics, qualifications and experience not owning 5% or more of TCB’s charter capital or
in accordance with current laws and regulations, an voting shares.
independent member of TCB’s Board of Directors must
ISSUANCE DATE MAIN CONTENT also meet the following criteria and conditions: Not being a manager or a member of TCB’s Supervisory
Board at any time in the five (05) preceding years.
09/02/2018 --Approval of business results in 2017 and as of 01/2018.
Neither currently working for TCB or its subsidiaries
--Approval of Supervisory Board’s report as of 01/2018.
--Approval of the organization of Annual General Shareholders’ Meeting 2018. nor working for TCB or its subsidiaries in three (03) Independent Director of Techcombank has been a member
--Approval of transforming the legal form of Techcom Securities Limited preceding years; of the Audit and Risk Committee as assigned by the Board
Company (TCBS) to a joint stock company. of Directors. In 2018, Independent Director has fully and
--Approval of issues related to selling treasury stocks. Not receiving any remuneration and allowance of actively attended the Board’s and the relevant Committees’
Techcombank other than the standard allowances for BOD meetings.
03/03/2018 --Issuing regulations on the issuance and sale of shares under the Employee
members under existing regulations;
Stock Option Program (ESOP).
03/03/2018 --Deploying the sale of shares according to the ESOP using Techcombank's Having no spouse, parent, child, sibling and spouses of
treasury stocks. these persons being a major shareholder of TCB, manager
03/03/2018 --Approval of the list of employees entitled to the ESOP. or member of Supervisory Board of TCB or its subsidiaries;

5 228/2018/NQ-HĐQT 03/03/2018 --Deploying the sale of treasury stocks to domestic/foreign investors in

first tranche.
6 229/2018/NQ-HĐQT 03/03/2018 --Raising the limit on foreign ownership at Techcombank.
In 2018, members of Techcombank’s Board of Directors have
all participated in various programs on Corporate Governance

ANNUAL REPORT 2018 ACHIEVING DREAMS 75

CORPORATE GOVERNANCE

Activities of Committees
under the Board of Directors Audit and Risk Committee (“ARCO”)

Currently, Techcombank has three Committees to assist the Board of Directors, including: Standing Committee of the Board of
Directors; Audit and Risk Committee ("ARCO"); Nomination and Remuneration Committee ("NORCO"). The Board of Directors
issues Statue on Organization and Opeartion for each of Committee.
The Committees maintain scheduled and ad-hoc meetings to assist the Board of Directors in improving its operational and
management efficiency of the Bank.
Standing Committee of the Board of Directors
The Audit and Risk Committee organized four plenary meetings in the year with separate agendas for the two areas of
auditing and risk management to fulfill the responsibilities assigned by the Board of Directors related to auditing and risk
management.
Risk Management
In 2018, ARCO advised the Board in issuing Techcombank risk appetite, including risk appetite statement, direction
indicators, risk appetite and risk limits for each critical risk type of Techcombank. In addition, the risk appetite of the
subsidiary (TCBS) was also reviewed and accepted by ARCO before TCBS approved and applied.

The Standing Committee of the Board of Directors is the body established by the Board to represent the Board of
Directors supports Board of Management in making timely decisions on important business activities arising amid the
official meetings of the Board. In the past year, the Standing Committee has taken written opinions and issued resolutions
under its authorization.
The Standing Committee of the BOD assists and advises the Board of Directors in considering and approving internal
regulations related issues , conducting evaluation and giving opinions on key finanicial results and business plan of
the Bank
The Standing Committee of the BOD also promptly gave directions to the Board of Management in the implementation of
the Bank's operations and address difficulties in implementing the business strategy and business plan.
ARCO proactively oversees bank-wide risk management activities on the basis of monitoring the periodic and ad-hoc
compliance of the risk management policy and risk appetite. In 2018, market risk limits are reviewed as scheduled and
accepted by the Committee, ARCO also approved credit rating models for individual customers, ensuring that the Bank
fully complies with legal regulations on credit risk management. Regarding operational risks, ARCO has adopted effective
risk management practices, including identifying key operational risks, monitoring and providing governance measures,
and gave direction and monitored subsequent action plans to address existing issues.
Audit
In 2018, ARCO exercised oversight of the Board of Management and support the Board of Directors in monitoring
internal control system and internal audit, enhancing the effectiveness of internal control system and internal audit across
Techcombank.

Chairman of Standing Committee of BOD Committee members Chairman of Audit and Risk Committee Committee members

Mr. Ho Hung Anh (Chairman) Mr. Nguyen Dang Quang (First Vice Chairman) Mr. Nguyen Thieu Quang (Vice Chairman) Mr. Ho Hung Anh (Chairman) – Vice Chairman of the Committee

Mr. Nguyen Thieu Quang (Vice Chairman) Mr. Nguyen Dang Quang (First Vice Chairman)

Mr. Nguyen Canh Son (Vice Chairman) Mr. Do Tuan Anh (Vice Chairman cum Deputy CEO)

Mr. Do Tuan Anh (Vice Chairman cum Deputy CEO) Mr. Lee Boon Huat (Board Director)

Mr. Lee Boon Huat (Board Member) Mr. Nguyen Doan Hung (Board Independent Director)

Mr. Le Ba Dung (Deputy CEO cum Chief Risk Officer)

ANNUAL REPORT 2018 ACHIEVING DREAMS 77

CORPORATE GOVERNANCE | Activities of committees under Board of Directors

Nomination and Remuneration Committee (“NORCO”)

In 2018, NORCO held seven plenary meetings, advised the Board of Directors on human resource issues and
remuneration policies, resulting in specific Human Resource Strategy and Policy; Techcombank's overall talent attraction,
management and retention strategies as part of implementing the “People Excellence” foundation with the “Employee
Centricity” approach.

Talent attraction, management and retention

NORCO has advised on recruitment, appointment, dismissal, and reassignment of personnel in order to promptly meet
both short-term and long-term personnel needs. At the same time, the Committee advised on the succession planning,
fulfilling the divisions' needs of both quantity and quality in the context of transformation and development of the Bank. In
addition, NORCO also supported in talent management strategic direction of Techcombank, reviewed and accepted vital
proposals in talent segmentation, building capacity frameworks and leadership program in accordance with international
standards; established an Employee Experience Department to focus on building processes and measuring tools that
improve employee experience.

Remuneration, reward and welfare policies

NORCO continued to provide direction and guidance on conducting remuneration market research, thereby
benchmarking, adjusting policies to position Techcombank as one of the most competitive compensation scheme within
the industry, our compensation policies also encourage employees to “be greater” at work, by associating rewards
with employee capacity, potential and performance. At the same time, the Committee continued to review, adjust and
promulgate market-leading welfare programs, aiming at comprehensive care for the essential needs of employees,
thereby increasing employee engagement and creating higher motivation as well as the pride of Techcombank. One such
program is the issuance of employee-loan interest rate policies to support the majority of employees, thereby improving
the quality of life in the most practical way for Techcombank's employees.

Chairman of the Nomination and

Remuneration Committee Committee members

Mr. Ho Hung Anh (Chairman) Mr. Nguyen Dang Quang (First Vice Chairman)

Mr. Nguyen Thieu Quang (Vice Chairman)

Mr. Nguyen Canh Son (Vice Chairman)

Mr. Do Tuan Anh (Vice Chairman cum Deputy CEO)

Mr. Nguyen Le Quoc Anh (Chief Executive Officer)

Ms. Pham Vu Minh Dan (Chief Human Resources Officer)

ANNUAL REPORT 2018 ACHIEVING DREAMS 79

CORPORATE GOVERNANCE

The Supervisory
Board Mr. Mag Rer Soc Oec
Romauch Hannes
Member
Mr. Hoang Huy Trung Mr. Mag Rer Soc Oec Romauch Hannes has many years of
Head of Supervisory Board cum Full-time member experience in banking finance, and has held many important
management positions in financial institutions and large
Mr. Hoang Huy Trung has many years of experience in the corporates. He has been a member of the Techcombank
banking industry and has held various management positions Supervisory Board since December 2012.
at the State Bank of Vietnam and Techcombank. He has been
the Head and a full-time member of Techcombank Supervisory Mr. Mag Rer Soc Oec Romauch Hannes holds a Master’s
Board since December 2012. degree in Business Administration, majoring in Finance,
Banking and Marketing from Klagenfurt University, Austria.
Mr. Hoang Huy Trung graduated with a Master’s degree
in Economics, specializing in Banking from the National
Economics University in Hanoi and a Bachelor in Economics,
majoring in banking-finance from the Academy of Finance.

Ms. Nguyen Thu Hien Ms. Bui Thi Hong Mai

Full-time member Member

Ms. Nguyen Thu Hien has been active in Techcombank’s Ms Bui Thi Hong Mai has many years of experience in
accounting and control activities since 1999. She served as accounting and finance. From April 2010 to December 2012,
Head of Supervisory Board cum full-time member from April she was a Member in charge of the Techcombank Supervisory
2010 to December 2012. She has been a full-time member of Board. She has been a member of the Techcombank
the Techcombank Supervisory Board since December 2012. Supervisory Board since December 2012.

Ms. Nguyen Thu Hien holds a Bachelor’s degree in Ms. Bui Thi Hong Mai holds a Bachelor’s degree in Accounting
Credit Finance. and Finance.

ANNUAL REPORT 2018 ACHIEVING DREAMS 81

CORPORATE GOVERNANCE | The Supervisory Board

Supervisory Board’s Activities in 2018

As of 01/01/2019, Techcombank’s Supervisory Board has four members, including two full-time members and two part-time
members. By year end, the number of Supervisory Board members did not change compared to that at the start of the year.

Meeting attendance of the Supervisory Board members in 2018 is as follows:

NO. OF
SUPERVISORY DAY BECOMING ATTENDANCE REASON
NO. POSITION ATTENDED
BOARD MEMBERS A MEMBER RATE FOR ABSENCE
MEETINGS

1 Mr. Hoang Huy Trung Head of Supervisory Board 19/04/2014 4 100%

cum full-time member

2 Ms. Nguyen Thu Hien Full-time member 19/04/2014 4 100%

3 Ms. Bui Thi Hong Mai Member 19/04/2014 4 100%

4 Mr. Mag Rer Soc Oec Member 19/04/2014 3 75% On business trip
Romauch Hannes

Results of the Supervisory Board’s Meetings in 2018

Activities of the Supervisory Board
Supervision activities of the Supervisory
Board for the Board of Directors, Board of
Management and Shareholders
Monitor the compliance with legal regulations and TCB’s
Charter in the governance and management activities of
the Bank;
Perform internal audit function; provide direction,
administration and monitor the operation of the Internal
Audit function to review and assess objectively the
internal control system;
Appraise the Bank's semi-annual and annual financial
statements;
Perform the inspection and monitoring (if any) at the
request of the State Bank of Vietnam and/or major
shareholders/group of major shareholders in accordance
with the law and the Bank's Charter.
NO.
Coordination in activities of the Supervisory
Board, the Board of Directors and Board of
Management
Based on the internal audit result, the Supervisory Board
and Internal Audit team have timely informed and worked
with the Board of Directors, CEO and other members
of the Board of Management to make decisions, strictly
address the divisions/units to prevent, promptly detect and
resolve issues in operations, contributing to the improved
efficiency, enhanced capacity of the internal control system,
regulations, processes, risk management and governance
capacity of the organization.
The Board of Directors and Board of Management have
proactively remediated existing issues as recommended by
the Supervisory Board and Internal Audit; while at the same
time provided timely supports to the Supervisory Board
during the execution of its responsibilities.
DOCUMENT NO. ISSUED DATE MAIN CONTENT
1 Meeting minutes 08/02/2018 --Evaluate audit plan execution results in quarter 1/2018 (as of the meeting time);
Quarter 1/2018 --Update some of the bank’s safety ratios as at 31/12/2017;
--Review and amend Statute on the Operations of Supervisory Board according to the
amended Credit Institution Law;
--Review draft reports of the Board of Directors and Supervisory Board at the Annual
General Shareholders’ Meeting 2018.
2 Meeting minutes 11/06/2018 --Evaluate internal audit plan execution result in quarter 2/2018 (as of the meeting time);
Quarter 2/2018 --Update some of the bank’s safety ratios as at 30/4/2018;
--Review materials for Etraordinary General Shareholders’ meeting on 14/6/2018;
--Review audit execution plan for the last 6 months of 2018;
--Discuss some key issues from the newly-promulgated Circular by the SBV which
prescribe the internal control system of commercial banks, foreign bank branches
(Circular 13).
3 Meeting minutes 20/09/2018 --Evaluate internal audit plan execution result in quarter 3/2018 (as of the meeting time);
Quarter 3/2018 --Update some of the bank’s safety ratios as at 31/8/2018;
--Report on the adjustment of internal audit plan for the last six months of 2018;
--Review the proposed adjustments in the organizations and additional positions of the
Internal Audit team.
4 Meeting minutes 13/12/2018 --Evaluate internal audit execution result in quarter 4/2018 (as of the meeting time);
Quarter 4/2018 --Report on the issuance of the operational documents of the Internal Audit in Nov 2018;
--Update some of the bank’s safety ratios as at 30/11/2018;
--Consolidated Internal audit report for 2018 and;
--Audit plan for 2019.

ANNUAL REPORT 2018 ACHIEVING DREAMS 83

CORPORATE GOVERNANCE

Our
Board of
Management
The Board of Management holds
the ultimate responsibility for the
execution of the strategy and the
successful business operations of
the bank.

Mr. Nguyen Le Quoc Anh
The average Chief Executive Officer
number of years
of experience
of the Board of Mr. Nguyen Le Quoc Anh was appointed
Management as the Chief Executive Officer of
Techcombank in September 2016. Prior
to his appointment, he was the Head of
the Strategy and Corporate Development
One third of Division of Techcombank from May 2015,
the Board of and Deputy Chief Executive Officer from
Management January 2016. He has more than 25
are women years of experience, including a variety of
senior management positions in banking,
financial services, telecommunication and
management consulting firms including
Wells Fargo, Fortress Investment Group,
Half of the Board T-Mobile, and McKinsey & Company.
of Management
are international He hold a Ph.D in Nuclear Engineering
experts from Purdue University (US) and a
Master’s Degree in Econometrics from
University of California (US).
Mr. Do Tuan Anh
Vice President of Board of Directors Chief Financial Officer
cum Deputy CEO
Mr. Do Tuan Anh has served as a
member of the Board of Directors since
December 2012 and became Vice
Chairman of the Board of Directors and
Deputy CEO of Techcombank in June
2015. He has 22 years of experience in
banking. Previously, he was Unit Deputy
Head of the International Cooperation
Department and Department Head
of the Banking Supervision Agency
at the State Bank of Vietnam, Senior
Assistant to the Board of Directors and
Head of the Strategy and Corporate
Development Division.
He holds a Master’s Degree in
Wealth Management from Singapore
Management University (Singapore).
Mr. Trinh Bang
Mr. Trinh Bang was appointed Chief
Financial Officer in January 2018.
He has more than 23 years of global
banking and finance experience
– including 18 years with Morgan
Stanley in New York, Singapore, and
most recently as Senior Advisor and
Managing Director/Country Head for
Vietnam and the Philippines.
He holds a Bachelor’s degree in
Systems Engineering from the
University of Virginia (USA).
Mr. Le Ba Dung
Deputy CEO and Chief Risk Officer
Mr. Le Ba Dung was appointed Chief
Risk Officer in September 2015. He has
more than 20 years of experience in
finance and banking risk management.
Prior to joining Techcombank, he served
in senior executive risk management
positions at Asia Commercial Bank
(Vietnam), Standard Chartered Bank
(Singapore), and GE Capital Asia-
Pacific (Hong Kong, South Korea, and
China). Since January 2019, Mr. Le Ba
Dung was appointed Deputy CEO of
Techcombank
He holds a Master’s degree in
International Affairs from Georgetown
University (US) and a Master’s degree
in Electrical Engineering from the State
University of New York (US).
Mr. Chester Gorski
Chief Technology Operation Officer
Mr. Chester Gorski was appointed
Chief Technology Operation Officer in
February 2016. He has more than 25
years of experience, including senior
leadership roles in banking, insurance
and financial services firms including
Wells Fargo, Wachovia, Aon, as well
as consulting firms including PwC and
McKinsey & Company.
He holds an MBA from the University of
Chicago (USA).

ANNUAL REPORT 2018 ACHIEVING DREAMS 85

CORPORATE GOVERNANCE | Our Board of Management
Mr. Nguyen Xuan Minh
Head of Investment Banking
Mr. Nguyen Xuan Minh was appointed
Head of Investment Banking Division –
Chairman of the Board of Directors of
Techcom Securities Company Limited in
October 2013. He has more than 20 years
of experience in fund management and
investment banking, including in previous
positions such as CEO of Vietnam Asset
Management Ltd. (VAM) and Senior
Vice President of Franklin Templeton
Investments under Mark Mobius in
Singapore.
He holds a Master’s degree in Applied
Finance & Investment from Securities
Institute of Australia (FINSIA), and an
M.S. in Science, Oil & Gas – Mechanical
Engineering from Gubkin Russian State
University of Oil and Gas (Russia). He is a
CFA Charterholder.
ANNUAL REPORT 2018
Mr. Phung Quang Hung
Head of Sales and Distribution
Mr. Phung Quang Hung was appointed
Head of the Sales and Distribution
Division in November 2014. Prior to
this, he was Techcombank’s Chief
Technology and Operations Officer from
September 2010. He has more than 20
years of management experience at
international banks, including previous
positions as Head of IT and Operations
at ABN AMRO(Vietnam) and Business
Partner at National Australia Bank
(London).
He holds a Master’s degree in
International Business from Washington
State University (US).
Ms. Le Thi Bich Phuong
Head of Personal Financial Services
Ms. Le Thi Bich Phuong was appointed
Techcombank’s Head of Personal
Financial Services in June 2016. She
has more than 15 years of experience
in banking, holding executive sales and
distribution positions including Head
of Area, Head of Region, and Head of
Sales and Distribution.
She holds a Bachelor’s degree in
Economics and International Business
from the Hanoi University of Social and
Human Sciences (Vietnam).
Mr. Vishal Shah
Head of Business Banking
Mr. Vishal Shah was appointed Head of
Business Banking in March 2018. He
has more than 20 years of experience at
leading companies with strong expertise
in commercial banking, retail banking
and financial advisory services. He
has held key leadership positions at
Standard Chartered Bank in Singapore,
India, and the UAE. He has also
held advisory roles at Ernst & Young
and KPMG.
Mr. Vishal Shah is a Qualified Chartered
Accountant (ACA) and Cost and Works
Accountancy (Grad CWA). He holds
a Bachelor’s degree in Commerce
from HR College of Commerce and
Economics, Mumbai University (India).
Mr. Phan Thanh Son
Transformation Director of
Transaction Banking
Mr. Phan Thanh Son was appointed
Transformation Director of Transaction
Banking in July 2017. Prior to this, he
was Head of the Treasury and Financial
Markets Division from January 2011. He
has more than 20 years of experience
in local financial markets and played
an important role in developing the
local fixed income markets. He was
the Deputy Chief Executive Officer at
TienPhong Bank. He has held various
positions in the Global Markets Divisions
at Standard Chartered Bank (Vietnam),
Citibank (Vietnam), and Citigroup Global
Markets Ltd. (Hong Kong).
He holds a Master’s degree in
Economics from the National Economics
University, Hanoi (Vietnam).
Ms. Nguyen Thi Van Anh
Head of Marketing
Ms. Nguyen Thi Van Anh joined
Techcombank in November 2014 and
was appointed Techcombank’s Head of
Marketing in June 2016. Prior to joining
Techcombank, she had more than 20
years of experience as Head of Brand
and Head of Marketing at major national
and multi-national companies including
Vingroup, British Petroleum, and British
American Tobacco (BAT).
She holds an MBA from University
of Westminster (UK) and a Master’s
degree in Marketing from Swinburne
University of Technology (Australia).
ACHIEVING DREAMS 87
CORPORATE GOVERNANCE | Our Board of Management
Mr. Pham Quang Thang
Deputy CEO Head of Transformation Office
and Head of Compliance and Legal
Mr. Pham Quang Thang was appointed
Deputy Chief Executive Officer and
Head of Compliance and Legal in
January 2014. He has more than
20 years of experience in banking,
including several senior positions
such as Chief Accountant, Head of
Treasury and Transactions Management
Center, Deputy Chief Executive Officer
in charge of Finance, Planning and
Strategy, Head of the Commercial
Banking Division, and Head of the
Credit Approval Division.
He holds a Master’s degree in
International Accounting from Swinburne
Technology University (Australia).
ANNUAL REPORT 2018
Mr. Ashish Sharma
Mr. Ashish Sharma was appointed
Head of Transformation Office in June
2017. He has 20 years of experience
in establishing and running business
banking platforms and banking strategy
in leadership roles. He has held Director
and Executive Director positions at large
corporate and financial institutions such
as Standard Chartered Bank, McKinsey
& Company, The Goldman Sachs
Group, and INC, among others.
He holds an MBA in Finance from New
York University (US) and a Master’s
degree in Computer Sciences from
MIT (USA).
Ms. Tran Thi Minh Lan
Head of Strategy and Corporate
Development and Chief of Staff
Ms. Tran Thi Minh Lan was appointed Head
of Strategy and Corporate Development
in August 2017. Before this, she was
Techcombank’s Head of Transformation
Program and the Deputy Head of Strategy
and Corporate Development from
December 2015, responsible for building
and implementing the Bank’s overall
strategy. She has more than 15 years of
experience in banking strategy and risk
management. She has held several senior
positions including the Deputy Head of the
Risk Management Division at Techcombank.
Ms. Tran Thi Minh Lan graduated from
the Executive Development Program at
the Wharton School, the University of
Pennsylvania (US) and holds a Master’s
degree in Financial and Accounting
Management from the University of Berlin
(Germany).
Ms. Nguyen Huong Giang
Head of Transaction Banking
Ms. Nguyen Huong Giang joined
Techcombank as Head of Transaction
Banking in July 2017. She has 25 years
of experience working at leading global
banks including ANZ and Citibank. She
has held senior roles such as Head of
Client Delivery & Implementation, Head
of Sales and Product Development of
the Transaction Banking Division, and
Director - ASEAN Channel Product.
She holds a Bachelor’s degree in
Linguistic Education from National
University, Hanoi (Vietnam).
Mr. Vu Minh Truong
Head of Treasury and
Financial Markets
Mr. Vu Minh Truong was appointed
Head of Treasury and Financial Markets
in January 2017. He has more than
20 years of professional experience,
including senior management positions
in major international banks such as
ABN AMRO, HSBC, ANZ and Standard
Chartered. In more recent years, he
worked at VPBank and TPBank as
Deputy CEO.
He holds a Bachelor’s degree
in Business Administration from
the Technical University of Berlin
(Germany).
Ms. Phan Thi Thanh Binh
Head of Wholesale Banking
Ms. Phan Thi Thanh Binh was
appointed Head of Wholesale Banking
in April 2018. Prior to this, she joined
Techcombank as Transformation
Director of Wholesale Banking in July
2017. She has more than 20 years of
experience with ANZ in various positions
including Head of Markets Vietnam,
acting CEO of ANZ (Vietnam), Member
of the Board of Directors at ANZ
(Vietnam, Cambodia, and Laos) and
Chairwoman of ANZ (Laos).
She holds a Master’s degree from
University Libre de Bruxelle (Belgium).
ACHIEVING DREAMS 89
CORPORATE GOVERNANCE | Our Board of Management
Ms. Pham Vu Minh Dan
Chief Human Resource Officer
Ms. Pham Vu Minh Dan (Alexis) was
appointed Chief Human Resources
Officer at Techcombank in January
2015. Prior to this, she gained more
than 14 years of experience in human
resource management at British
American Tobacco Group (BAT).
During her tenure with BAT, she was
appointed to various senior HR roles in
Vietnam,Malaysia, the United Kingdom
and the Asia-Pacific region. Her last role
at BAT was Regional Head of Talent for
the Asia-Pacific region.
She holds a Bachelor’s degree in
Business Management from Nanyang
Technological University (Singapore).
ANNUAL REPORT 2018
Mr. De Leeuw Van Weenen
Alexander Iwan Paul
Transformation Director of
Human Resource
Mr. Iwan was appointed as Transformation
Director of Human Resource Division
in August 2018, he has 18 years
of experience in human resource
management, including 13 years of
experience in banking and finance at
General Electric (GE). Before joining
Techcombank, he held several important
positions at GE such as National Human
Resource Manager (singapore), Senior
Director of Organization Development and
Talent Development (SIngapore), Senior
Director of Organization Development and
Talent Development (USA), HRBP Director
(USA), Human Resource Manager (USA),
HR Project Team Leader (USA).
Mr. Iwan graduated with a Bachelor’s
Degree in Japanese Language and
Culture at Leiden University (Netherlands).
Mr. Chung Ba Phuong
Head of Insurance
Mr. Chung Ba Phuong was appointed
Head of Insurance in August 2017. He
has more than 24 years of experience
in developing and growing insurance
businesses for renowned insurance
groups such as Generali (Europe),
Manulife (Canada), American International
Group (USA) and consultant at Towers
Perrin (Willis Towers Watson). Before
joining Techcombank, he led Generali
Hong Kong as the CEO and General
Manager.
He holds a Bachelor in Commerce
(Honors) from the University of Manitoba
(Canada), and is a member of many
professional career associations such as
Canadian Institute of Actuaries (FCIA),
Society of Actuaries (FSA), American
Academy of Actuaries (MAAA).
ACHIEVING DREAMS 91
CORPORATE GOVERNANCE
Corporate
Governance Model
Our targeted Corporate Governance model
Board Risk Committee
Board Risk Committee has the functions
as follows:
-- Advise the BOD in issuing procedures,
policies related to risk management in
Techcombank’s activities.
-- Review, evaluate the appropriateness,
effectiveness of procedures and policies to
advise the BOD for approval of any changes.
-- Analyse and provide warning on
Techcombank’s safety against potential risk
exposure and risk mitigation plans.
-- Advise the BOD in approvals of investments,
related party transactions, governance policy
and risk remediation within Committee’s
responsilibities and duty.
ANNUAL REPORT 2018
Board Risk Settlement Committee
Board Risk Settlement Committee functions
to assist the BOD in matters related to
debt classification, provisioning, use of
provisions to handle credit risks and debt
settlement.
Risk Management
Committee
General Assembly
of Shareholders
Board of Directors
Board Nomination Committee
Board Nomination Committee has the
functions as follows:
--Advise the BOD on composition and
sizing of the Board, Executive positions to
align with operating model and strategy of
Techcombank.
--Advise the BOD on nomination
matters during the process of election,
appointment, and dismissal in the BOD,
the Supervisory Board and for executive
positions in accordance with local
regulations and Techcombank Charter,
ensuring the appropriate skills, expertise,
and experience is available when required.
Chief Executive Officer
ALCO
Board Audit Committee
Board Audit Committee advises the BOD
and provides guidance and oversight of the
Board of Management on matters related to
forming and monitoring financial statements,
internal control system and independent
accounting and audit policies.
Capital Management
Commimttee
Supervisory Board
Internal Audit
Board Remuneration Committee
Board Remuneration Committee advises
the BOD on matters related to remuneration
policy for BOD members, CEO and other
senior management positions, evaluates
the efficiency of remuneration system,
compensation and other reward programs
for Techcombank employees.
Other Committee
under CEO
Board Strategy Committee
Strategy Committee has the following
functions:
--Advise the BOD in building, and
overseeing the implementation of
strategy and development direction
of Techcombank, as well as matters
related to the Transformation program of
Techcombank.
--Advise the BOD on approving business
goals, annual budget and major investment
activities of Techcombank.
Note
Committees under BOD in compliance with
regulatory requirements.
Committees under BOD.
Recently Techcombank has been implementing the
necessary initiatives to transform the Corporate
Governance model above into a practically applicable
actions in the Bank’s governance operation.
ACHIEVING DREAMS 93
CORPORATE GOVERNANCE

Transactions, Remuneration and Benefits of the

Board of Directors, the Board of Management and
the Supervisory Board Salary, rewards, remuneration and other benefits & expenses for
each member of the Board of Directors, the Supervisory Board and
Information on internal shareholders’ ownership of TCB shares as the CEO
of 31/12/2018 Salary, rewards, remuneration and other benefits & expenses for members of the Board of Directors

NUMBER MEMBERS OF THE BOARD OF SALARY/REWARDS/REMUNERATION

PERCENTAGE OF NO. POSITION
NO. NAME POSITION OF TCB DIRECTORS AND OTHER BENEFITS
SHAREHOLDING
SHARES
1 Mr. Ho Hung Anh BOD Chairman
Board of Directors
2 Mr. Nguyen Dang Quang First Vice Chairman
1 Mr. Ho Hung Anh Chairman 39,309,579 1.1242%
3 Mr. Nguyen Thieu Quang Vice Chairman
Refer to the 2018 Consolidated
2 Mr. Nguyen Dang Quang First Vice Chairman 9,403,176 0.2689%
4 Mr. Nguyen Canh Son Vice Chairman Financial Statement - Footnote no. 40 on
3 Mr. Nguyen Thieu Quang Vice Chairman 30,256,431 0.8653% “Transactions with related parties”
5 Mr. Do Tuan Anh Vice Chairman cum Deputy CEO
4 Mr. Nguyen Canh Son Vice Chairman 17,954,979 0.5135%
6 Mr. Lee Boon Huat Board Director
5 Mr. Do Tuan Anh Vice Chairman cum Deputy CEO 887,542 0.0254%
7 Mr. Nguyen Doan Hung Board Independent Director
6 Mr. Lee Boon Huat Board Director 0 0.0000%
7 Mr. Nguyen Doan Hung Board Independent Director 162 0.0000% Salary, rewards, remuneration and other benefits & expenses for members of the Supervisory Board
Supervisory Board
SALARY, BONUS, REMUNERATION
1 Mr. Hoang Huy Trung Head of Supervisory Board cum full-time member 57,504 0.0016% NO. MEMBERS OF BOC POSITION
AND BENEFITS
2 Ms. Nguyen Thu Hien Full-time member 3,041,835 0.0870%
1 Mr. Hoang Huy Trung Head of Supervisory Board cum
3 Ms. Bui Thi Hong Mai Member 48 0.0000% full-time member
Refer to the 2018 Consolidated
4 Mr. Mag Rer Soc Oec Member 0 0.0000% 2 Ms. Nguyen Thu Hien Full-time member Financial Statement - Footnote no. 40 on
Romauch Hannes “Transactions with related parties”
3 Ms. Bui Thi Hong Mai Member
Executive members
4 Mag Rer Soc Oec Romauch Hannes Member
1 Mr. Nguyen Le Quoc Anh CEO 6,100,000 0.1745%
2 Mr. Do Tuan Anh Vice Chairman cum Deputy CEO (as above) (as above)
Salary, rewards, remuneration and other benefits & expenses for CEO
3 Mr. Pham Quang Thang Deputy CEO cum Head of Compliance and 775,222 0.0222%
Legal Division SALARY, BONUS, REMUNERATION
NO. NAME POSITION
4` Mr. Trinh Bang Group CFO 6,000,000 0.1716% AND BENEFITS

4 Ms. Thai Ha Linh Head of Accounting, Financial policy and Tax 976,412 0.0279% 1 Mr. Nguyen Le Quoc Anh CEO Refer to the 2018 Consolidated
Financial Statement - Footnote no. 40 on
5 Ms. Bui Thi Khanh Van Chief Accountant 0 0.0000% “Transactions with related parties”

ANNUAL REPORT 2018 Note: Percentage of shareholding is rounded to four decimal places ACHIEVING DREAMS 95
CORPORATE GOVERNANCE | Transactions, Remuneration and Benefits of Board of Directors, Board of Management and Supervisory Board

Share transactions by internal shareholders *

In 2018, the number of transactions and volume of TCB shares traded by internal shareholders are as follows:

TYPE OF TRANSACTION (*) The volume of traded shares does not include:
TRANSACTIONS
TRANSACTIONS VOLUME
-- Increase due to bonus share issuance (1:2 ratio).
Buy 0 - -- Increase due to Employee Stock Option Program (ESOP).
-- Increase due to shares rewarded to employees with high
Sell 3 402,882 performance.

Total 3 402,882

Contracts or transaction with internal shareholders

Share transactions by internal shareholders’ related parties **

Refer to the 2018 Consolidated Financial Statement - Footnote no. 40 on
“Transactions with related parties”
In 2018, the number of transactions and volume of TCB shares traded by internal shareholders' related parties are as follows:

TYPE OF TRANSACTION (**) The volume of traded shares does not include:
TRANSACTION
TRANSACTIONS VOLUME
-- Increases due to bonus share issuance (1:2 ratio).
Buy 8 262,370,775 Application of regulations to Corporate Governance
Sell 32 114,685,368
Techcombank ensures that the Bank’s corporate governance Techcombank will continue to comply with any new legal
practice complies fully with the current regulations and regulations and guidance as well as proactively researching
Tổng 40 377,056,143 guidance on corporate governance for public and listed regional and international practices on corporate governance,
companies as prescribed by the Law on Credit Institutions thereby gradually transforming and applying good practices
(amended), Law on Enterprise, Law on Securities, Decree to strengthen the transparency and efficiency of the Bank’s
no. 71/2017/NĐ-CP providing guideline on Corporate governance. This is also one of our prioritized tasks which
Governance of Public Companies, Circular no. 95/2017/TT- is considered to be an important factor for Techcombank to
BTC guiding a number of articles of Decree 71/2017/NĐ-CP. meet international standards on risk governance and internal
In addition, Techcombank has also submitted periodic reports control such as Basel II or COSO 2013 on Internal Control in
Detailed information on the transactions by internal shareholders and their on corporate governance every 6 months in accordance with the future.
related parties are provided on Techcombank’s website. Circular no. 155/2015/TT-BTC guiding information disclosure
on securities market and other related regulations.

ANNUAL REPORT 2018 ACHIEVING DREAMS 97

 Sustainable
Development
“The greater future”
ANNUAL REPORT 2018 ACHIEVING DREAMS 99
SUSTAINABLE DEVELOPMENT

People Development
A lthough Vietnam is in the middle
of a golden population period,
2018 saw some volatility in the
domestic human resource market.
This was especially noticeable in the
finance and banking industry where
there was a scarcity of talent, even
more so in the area of Industry 4.0.
Investment in
technology
Therefore, to better equip the Bank’s employees to execute
our strategy, Techcombank has fostered a change in
mindset, working methods, and customer service approach
To that end, Techcombank offers
its employees every opportunity
to develop themselves in a
among Techcomers. The Bank’s employees believe and professional, friendly environment,
support the transformation. This is the most important step in with a clear career development
executing our strategies. roadmap. Techcombank helps
each employee deliver against
Additionally, Techcombank offers a competitive and expectations, acquire knowledge
comprehensive employee value proposition, in line with our and skills through training and
talent management strategy, ensuring that we can attract personal development plans and
and retain our best talent, with the goal of becoming the succession planning. This ensures
“Number one Bank in Vietnam based on efficiency.” that we can maintain our high quality
of internal human resources, and
helps our employees develop more
capabilities.

The employee value proposition
of Techcombank today is very
diversified, meeting not only the
basic demands of our staff (through
basic salary and benefits), but also
intangible demands such as reward
and recognition as well as long-term
compensation plans. All policies
from remuneration to benefits
ensure that our compensation
package is higher than the
average of domestic banks and
multinational companies in Vietnam.
Techcombank continues to lead the
market in compensation in order to
retain key talent, through programs
such as ESOP (Employee Stock
Ownership Plan) and Outstanding
Techcomer awards, creating more
incentives for employees to commit
to Techcombank in the long-term.
During this transformation journey, Techcombank has earmarked more than
USD300 million for investment in IT. Not only is this a significant investment, it
also demonstrates Techcombank's commitment to successfully execute its
customer-centric strategy.
A s a part of the Bank’s goal of
encouraging and enabling every
Vietnamese citizen to be optimistic,
talent. Since it first conducted business
more than 25 years ago, Techcombank
has always focused on developing
independent, and greater everyday, best-in-class human resources and
the digital products and services we deep customer understanding. This
deploy help our customers experience way, technology becomes a tool for
digital banking right in the palms of Techcombank’s personnel to enable
their hands. Further, customers with customers to realize their dreams.
sophisticated financial needs can
perform financial tasks everywhere, Techcombank maintains this
everyday, safely and conveniently. commitment by investing in new digital
platforms, aiming to bring the best
Techcombank puts customers at possible experience to more than 2.6
the center of everything we do, million e-banking customers in 2019,
regardless the technological era. with the expectation that the number of
Indeed, Techcombank has been able online customers will double each year
to differentiate itself thanks to superior for the next five years.

ANNUAL REPORT 2018 ACHIEVING DREAMS 101

SUSTAINABLE DEVELOPMENT

New products and solutions

M ore than just products and
services, Techcombank
delivers solutions. Our goal is
to solve customer problems and
facilitate their financial security, not
merely to meet their existing needs.
Therefore, in addition to traditional banking products, Techcombank will continue
developing solutions in areas such as insurance (e.g. life insurance, property
insurance, integrated insurance), and expanding the corporate bond brokerage
business, among other areas.
Under Techcombank’s business strategy for the 2015-20 period, we aim to serve the
entire market, with a focus on customers in the Affluent and Mass Affluent segments.

The products and services offered by Techcombank, such as Zero Fee online
banking and electronic savings, are continuously improved to meet the ever-
evolving needs of customers, and we have driven revenue growth through many
such promotional programs.

For Affluent customers For Mass Affluent customers

Techcombank is focusing on many new initiatives, including
deploying a direct sales model for bancassurance, improving
the mortgage experience for home buyers, and creating new
asset management products and credit products.
Beginning in November 2018, Techcombank launched a loan
program for Vincity homebuyers - a breakthrough solution with
loan tenure of up to 35 years, and various debt repayment
options. In addition, we are also focusing on improving
customer experience for credit card users and home loans at
the onboarding stage as well as on deploying additional online
channels.

In 2019, we will pay special attention to business projects that aim to improve customer experience, to drive loyalty and
engagement, and to generate trust in our financial solutions.

These include short-term and long-term initiatives such as reducing early repayment fees for homebuyers; expanding research
on savings account customers; launching short-term card projects inspired by our "Cashless Payment Strategy"; creating
mortgage-backed security products; and changing credit assessment processes in accordance with the appraisal/approval
model based on expected losses.

In addition, we will continue to focus on serving the value chains of our strategic partners across our six targeted
economic sectors.

ANNUAL REPORT 2018 ACHIEVING DREAMS 103

SUSTAINABLE DEVELOPMENT

Corporate Social
Responsibility Schools

T echcombank's Corporate Social Responsibility (CSR) programs are more

than simply fulfilling the social obligations of a business. To us, our pro-
grams are the demonstration of the values that bond all Techcomers together
As a financial services provider,
Techcombank places a heavy weight
on the importance of contributing
Hospitals

and lead us towards the Bank’s common goal. Our organization is committed to the sustainable and long-term
to helping Vietnamese people realize their dreams in their own ways. development of the community. We
consider social activities to be an
integral part of the bank’s strategy,
now and in the future. Our Board of
Directors believes that having a clear
and meaningful CSR strategy is crucial Foster homes
to creating beneficial value chains for
both businesses and the society. To
achieve this goal, Techcombank has
designed the ‘Partnering CSR’ model,
whereby Techcombank personnel is the
benefactor who implement Partnering
CSR activities and at the same time the
beneficiary of these activities. Bridges

In 2018, Techcombank continued to

contribute nearly VND50 billion to
community support programs, focusing
on education, public healthcare and
poverty reduction. As a result, many
schools and foster homes have been
built,and many hospitals and healthcare Techcombus
facilities have been upgraded all over trips
the country.

ANNUAL REPORT 2018 ACHIEVING DREAMS 105

SUSTAINABLE DEVELOPMENT

Alongside community activities,
Techcombank is also a long-term
partner of the Techcombank Ironman
70.3 Vietnam and the Ho Chi Minh
City International Marathon. Both are
landmark initiatives of the Partnering
CSR strategy. Within two years,
from 2017 to 2018, the number of
participants in these tournaments saw
impressive growth: increasing more
than 20% to 1,600 athletes in Ironman,
and doubling to 10,000 athletes in
the Ho Chi Minh City International
Marathon.
the finish line, Techcombank donated
more than VND1.2 billion to the ‘For
the Poor’ charity fund and Ho Chi Minh
City Sports Talent Development Fund.
Also in 2018, with the goal of
promoting the "Be greater together"
spirit, as well as bringing together the
community through running, more
than 2,000 members of Techcombank
participated in UPRACE 2018,
completing a total of 106,557km,
which translated to VND1,065,557,000
donated to Newborns Vietnam.
Techcombank also topped the ranking
for corporate participants.
Techcombank will continue its
partnership with Ironman 70.3 Asia
Pacific 2019, Ho Chi Minh City
International Marathon 2019, UPRACE
2019, and other community-driven
events to deliver the "Be greater
together" message.

We are happy to see the tournaments

growing, attracting enlarging numbers
of participants. Most importantly,
we are happy to see the spirit
of overcoming oneself to reach
greater goals spreading from the
tournaments to society. We commit
to our partnerships with Ironman 70.3
Vietnam and the Ho Chi Minh City
International Marathon to continue
creating a positive impact on the
community, thus building a brighter
future for Vietnam.

In particular, in 2018 alone, more

than 700 Techcomers joined the Ho
Chi Minh City International Marathon,
collectively overcoming challenges,
reaching the finish line, and spreading
the community spirit. Upon reaching

ANNUAL REPORT 2018 ACHIEVING DREAMS 107

 Financial
Report
2018 audited financial report
ANNUAL REPORT 2018 ACHIEVING DREAMS 109
FINANCIAL REPORT

GENERAL INFORMATION
THE BANK BOARD OF MANAGEMENT
Vietnam Technological and Commercial Joint Stock Bank (“the Bank”) is a commercial joint stock bank registered and Members of the Board of Management of the Bank for the year ended 31 December 2018 and as at the date of these consoli-
incorporated in the Socialist Republic of Vietnam. dated financial statements are as follows:
The Bank was incorporated pursuant to Business License No. 0038/GP-NHNN issued by the Governor of the State Bank
of Vietnam (“the SBV”) on 6 March 2018 to replace Business License No. 0040/NH-GP on 6 August 1993 and Business Name Position
Registration Certificate No. 0100230800 issued by the Hanoi Department of Planning and Investment on 10 August 2018. The
operating duration is 99 years since 6 August 1993. Mr. Nguyen Le Quoc Anh Chief Executive Officer
The principal activities of the Bank are mobilizing and receiving short, medium and long-term deposit funds from organizations Mr. Do Tuan Anh Deputy Chief Executive Officer
and individuals, lending on short, medium and long-term basis up to the nature and ability of the Bank’s capital resources, Mr. Pham Quang Thang Deputy Chief Executive Officer
conducting settlement and cash services and other banking services as approved by the SBV, conducting investments in cum Head of Compliance and Legal Division
subsidiaries, associates, joint-ventures, bonds and other companies and dealing in foreign exchange in accordance with Mr. Le Ba Dung Deputy Chief Executive Officer (from 7 January 2019)
applicable regulations. cum Head of Risk Management
Mr. Trinh Bang Group Chief Finance Officer (from 25 January 2018)
Ms. Tran Thi Minh Lan Head of Strategy and Corporate Development
BOARD OF DIRECTORS Mr. Chester Gorski Head of IT and Operations
Mr. Vu Minh Truong Head of Treasury and Financial Markets
Members of the Board of Directors of the Bank for the year ended 31 December 2018 and as at the date of these consolidated Ms. Phan Thi Thanh Binh Head of Wholesales Banking (from 23 April 2018)
financial statements are as follows: Transformation Director – Wholesales Banking (to 22 April 2018)
Ms. Nguyen Huong Giang Head of Transaction Banking
Name Position Mr. Vishal Shah Head of Business Banking (from 2 March 2018)
Mr. Phung Quang Hung Head of Sales and Distribution
Mr. Ho Hung Anh Chairman Ms. Le Thi Bich Phuong Head of Personal Financial Services
Mr. Nguyen Dang Quang The first Vice Chairman Ms. Pham Vu Minh Dan Head of Human Resources
Mr. Nguyen Thieu Quang Vice Chairman Ms. Nguyen Thi Van Anh Head of Marketing Division
Mr. Nguyen Canh Son Vice Chairman Mr. Chung Ba Phuong Head of Insurance Division
Mr. Do Tuan Anh Vice Chairman Mr. Ashish Sharma Transformation Director – Transformation Office
Mr. Lee Boon Huat Member Mr. Phan Thanh Son Transformation Director – Transaction Banking
Mr. Nguyen Doan Hung Independent Member Mr. De Leeuw Van Weenen Alexander Iwan Paul Transformation Director – Human Resources (from 6 August 2018)
Mr. Chan Jonathan Chung Ming Transformation Director – Personal Financial Services
(to 31 August 2018)
BOARD OF SUPERVISION
Members of the Board of Supervision of the Bank for the year ended 31 December 2018 and as at the date of these consolidated
financial statements are as follows: LEGAL REPRESENTATIVE
The legal representative of the Bank for the year ended 31 December 2018 and as at the date of these consolidated financial
Name Position statements is Mr. Ho Hung Anh, the Chairman.
Mr. Nguyen Le Quoc Anh is authorized by Mr. Ho Hung Anh to sign off operations management related reports and documents
Mr. Hoang Huy Trung Head of the Board of Supervision which comprise the accompanying consolidated financial statements for the year ended 31 December 2018 in accordance with
cum Member in charge Decision No. 0312/UQ-HDQT dated 25 February 2016.
Mr. Mag Rec Soc Oec Romauch Hannes Member
Ms. Nguyen Thu Hien Member in charge
Ms. Bui Thi Hong Mai Member AUDITORS
The auditor of the Bank is Ernst & Young Vietnam Limited.

ANNUAL REPORT 2018 ACHIEVING DREAMS 111

FINANCIAL REPORT
REPORT OF THE BOARD OF MANAGEMENT
The Board of Management of Vietnam Technological and Commercial Joint Stock Bank (“the Bank”) is pleased to present its
report and the consolidated financial statements of the Bank and its subsidiaries for the year ended 31 December 2018.
MANAGEMENT’S RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS
The Board of Management of the Bank is responsible for the consolidated financial statements of each financial year which give
a true and fair view of the consolidated financial position of the Bank and its subsidiaries and of the consolidated results of their
operations and their consolidated cash flows for the year. In preparing those consolidated financial statements, the Board of
Management is required to:
select suitable accounting policies and then apply them consistently;
make judgments and estimates that are reasonable and prudent;
state whether applicable accounting standards have been followed, subject to any material departures disclosed and
explained in the consolidated financial statements; and
prepare the consolidated financial statements on the going concern basis unless it is inappropriate to presume that the Bank
and its subsidiaries will continue its business.
The Board of Management of the Bank is responsible for ensuring that proper accounting records are kept which disclose,
with reasonable accuracy at any time, the consolidated financial position of the Bank and ensuring that the accounting records
comply with the applied accounting system. It is also responsible for safeguarding the assets of the Bank and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The Board of Management of the Bank confirmed that it has complied with the above requirements in preparing the
accompanying consolidated financial statements.
STATEMENT BY THE BOARD OF MANAGEMENT
The Board of Management does hereby state that, in its opinion, the accompanying consolidated financial statements give
a true and fair view of the consolidated financial position of the Bank and its subsidiaries as at 31 December 2018, and of
the consolidated results of their operations and their consolidated cash flows for the year then ended in accordance with
Vietnamese Accounting Standards, Vietnamese Accounting System for Credit Institutions and statutory requirements relevant to
preparation and presentation of consolidated financial statements.
Hanoi, Vietnam, 15 March 2019
ANNUAL REPORT 2018
INDEPENDENT AUDITORS’ REPORT REFERENCE 60899747/20303658-HN
To: The Shareholders of
Vietnam Technological and Commercial Joint Stock Bank
We have audited the accompanying consolidated financial statements of Vietnam Technological and Commercial Joint Stock
Bank (“the Bank”) and its subsidiaries, as prepared on 15 March 2019 and set out on pages 6 to 81 which comprise the
consolidated balance sheet as at 31 December 2018, the consolidated income statement and the consolidated cash flow
statement for the year then ended and the notes thereto.
MANAGEMENT’S RESPONSIBILITY
The Bank’s Board of Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with Vietnamese Accounting Standards, Vietnamese Accounting System for Credit Institutions and
statutory requirements relevant to preparation and presentation of consolidated financial statements, and for such internal
control as the Board of Management determines is necessary to enable the preparation and presentation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
AUDITORS’ RESPONSIBILITY
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our
audit in accordance with Vietnamese Standards on Auditing. Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of
material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments,
the auditors consider internal control relevant to the entity’s preparation and fair presentation of the consolidated financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the
overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
ACHIEVING DREAMS 113
FINANCIAL REPORT

INDEPENDENT AUDITORS’ REPORT (continued) CONSOLIDATED BALANCE SHEET B02/TCTD-HN

as at 31 December 2018
OPINION
In our opinion, the consolidated financial statements give a true and fair view, in all material respects, of the consolidated ASSETS NOTES 31 DECEMBER 2018 31 DECEMBER 2017
financial position of the Bank and its subsidiaries as at 31 December 2018, and of the consolidated results of their operations VND MILLION VND MILLION

and their consolidated cash flows for the year then ended in accordance with Vietnamese Accounting Standards, Vietnamese Cash and gold 5 2,606,467 2,344,362
Accounting System for Credit Institutions and statutory requirements relevant to preparation and presentation of the Balances with the State Bank of Vietnam 6 10,555,483 4,279,431
consolidated financial statements. Balances with and credit granting to other credit institutions 7 35,559,363 30,155,807
Balances with other credit institutions 7.1 24,169,512 16,243,054
Credit granting to other credit institutions 7.2 11,389,851 13,912,753
Securities held-for-trading 8 7,572,229 6,758,094
Securities held-for-trading 7,583,090 6,775,118
Provision for securities held-for-trading (10,861) (17,024)
Derivatives and other financial assets 20 - 36,292
Loans to customers 157,554,103 158,964,456
Loans to customers 9 159,939,217 160,849,037
Provision for loans to customers 10 (2,385,114) (1,884,581)
Debts purchased 11 - 10,332
Debts purchased 1,682 12,092
Provision for debts purchased (1,682) (1,760)
Investment securities 12 86,512,348 51,542,484
Available-for-sale securities 66,625,261 46,018,398
Held-to-maturity securities 20,236,200 5,715,484
Provision for investment securities (349,113) (191,398)
Hanoi, Vietnam, 15 March 2019 Long-term investments 13 12,223 9,683
Other long-term investments 12,883 12,084
Provision for long-term investments (660) (2,401)
Fixed assets 14 1,718,596 1,511,446
Tangible fixed assets 14.1 788,016 569,789
Cost 1,835,272 1,602,956
Accumulated depreciation (1,047,256) (1,033,167)
Intangible fixed assets 14.2 930,580 941,657
Cost 1,540,037 1,449,616
Accumulated amortization (609,457) (507,959)
Investment property 15 1,196,324 1,238,030
Cost 1,435,699 1,442,827
Accumulated depreciation (239,375) (204,797)
Other assets 16 17,701,805 12,541,963
Receivables 11,322,256 9,417,589
Accrued interest and fees receivables 5,737,907 3,876,528
Deferred tax assets - 1,773
Other assets 717,481 557,642
In which: Goodwill - 19,765
Provision for other assets (75,839) (1,311,569)

TOTAL ASSETS 320 ,98 8 ,94 1 269,392,38 0

ANNUAL REPORT 2018 ACHIEVING DREAMS 115

FINANCIAL REPORT

CONSOLIDATED BALANCE SHEET (continued) B02/TCTD-HN

as at 31 December 2018

LIABILITIES NOTES 31 DECEMBER 2018 31 DECEMBER 2017 CONSOLIDATED OFF-BALANCE SHEET ITEMS 31 DECEMBER 2018 31 DECEMBER 2017
VND MILLION VND MILLION VND MILLION VND MILLION

Due from the Government and the State Bank of Vietnam 17 6,025,027 1,000,000 Contingent liabilities
Deposits and borrowings from other financial institutions and Guarantees for borrowings 5,957 8,558
credit institutions 18 36,425,560 46,323,825 Commitments for currencies contracts 160,600,295 232,107,961
Deposits from other financial institutions and credit institutions 18.1 28,973,455 21,274,375 Commitments to buy foreign currencies 3,305,927 2,911,065
Borrowings from other financial institutions and credit institutions 18.2 7,452,105 25,049,450 Commitments to sell foreign currencies 7,472,531 5,440,635
Deposits from customers 19 201,414,532 170,970,833 Commitments to currency swap contracts 149,821,837 223,756,261
Derivatives and other financial liabilities 20 310,313 - Letters of credit 12,163,321 9,366,321
Valuable papers issued 21 13,177,959 17,639,970 Other guarantees 19,043,774 16,001,135
Other liabilities 22 11,852,845 6,527,007 Valuable papers forward commitments 8,059,426 9,638,324
Accrued interest and fee payables 3,424,068 2,764,162 Other commitments (*) 202,008,746 23,045,517
Other liabilities 8,428,777 3,762,845
401,881,519 290,167,816
TOTAL LIABILITIES 269,206,236 242,461,635

(*) The balance as at 31 December 2018 of “Other commitments” additionally includes unused credit limits that the Bank has
SHAREHOLDERS’ EQUITY the right to cancel or automatically cancel when customers breach conditions of cancelling or deteriorate their capacity to
perform obligations; and unused credit limits of credit cards in accordance with Circular No. 19/2017/TT-NHNN dated 28
Share capital 35,442,539 9,777,116 December 2017 amending and supplementing some articles of Circular No. 36/2014/TT-NHNN dated 20 November 2014
Charter capital 34,965,922 11,655,307 of the Governor of the State Bank of Vietnam regulating the limits and adequacy ratios in operation of credit institutions and
Share premium 476,617 2,165,058 foreign bank branches, which has been effective since 12 February 2018.
Treasury shares - (4,043,249)
Reserves 3,867,846 6,156,928
Retained earnings 12,403,003 10,996,701
Non-controlling interests 69,317 -

TOTAL SHAREHOLDERS’ EQUITY 24 51,782,705 26,930,745

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 320,988,941 269,392,380

Hanoi, Vietnam, 15 March 2019

ANNUAL REPORT 2018 ACHIEVING DREAMS 117

FINANCIAL REPORT

CONSOLIDATED INCOME STATEMENT B03/TCTD-HN CONSOLIDATED CASH FLOW STATEMENT B04/TCTD-HN

for the year ended 31 December 2018 for the year ended 31 December 2018

NOTES 2018 2017 CASH FLOWS FROM OPERATING ACTIVITIES NOTES 2018 2017
VND MILLION VND MILLION VND MILLION VND MILLION
(RECLASSIFIED) (RECLASSIFIED)

Interest and similar income 25 21,150,222 17,594,504 Interest and similar receipts 20,181,939 17,710,304
Interest and similar expenses 26 (10,023,687) (8,664,092) Interest and similar payments (9,797,235) (8,095,512)
Net interest and similar income 11,126,535 8,930,412 Net fees and commission receipts 3,229,966 3,861,336
Fees and commission income 4,451,721 4,519,685 Net receipts/payments from trading activities (foreign currencies and securities) 1,310,321 1,635,194
Fees and commission expenses (915,737) (593,601) Other income receipts 151,294 598,071
Net fees and commission income 27 3,535,984 3,926,084 Recovery of loans previously written-off 31 1,422,895 1,116,820
Net gain from trading foreign currencies 28 233,751 278,585 Payments for employees and other operating expenses (4,432,019) (4,282,290)
Net gain from securities yheld-for-trading 29 168,433 396,730 Current income taxation paid for the year 23.1 (2,140,758) (1,034,529)
Net gain from investment securities 30 756,585 855,760 Net cash flows from operating activities before changes in operating assets
Other income 3,147,169 1,963,425 and liabilities 9,926,403 11,509,394
Other expenses (1,513,392) (248,534) Changes in operating assets
Net gain from other operating activities 31 1,633,777 1,714,891 Decrease/(increase) in balances with and credit granting to other credit institutions 2,576,067 (1,202,041)
Income from investments in other entities 32 894,703 355,526 Increase in securities held-for-trading (35,935,551) (3,337,613)
Total operating income 18,349,768 16,457,988 Decrease/(increase) derivatives instrument and other financial assets 36,292 (36,292)
Operating expenses 33 (5,842,507) (4,812,465) Decrease/(increase) in loans to customers 909,820 (18,233,033)
Net profit before provision for credit losses 12,507,261 11,645,523 Decrease in use of provision to write off loans, securities, long-term investments,
Provision expenses for credit losses 34 (1,846,245) (3,609,226) receivables (2,553,203) (4,779,696)
Profit before tax 10,661,016 8,036,297 Increase in other operating assets (3,308,223) (2,472,881)
Current corporate income tax expense 23.1 (2,185,246) (1,564,816) Changes in operating liabilities
Deferred corporate income tax expense 23.3 (1,773) (25,886) Increase/(decrease) in due from the Government and the State Bank of Vietnam 4,024,907 (447,970)
Corporate income tax expense (2,187,019) (1,590,702) (Decrease)/increase in deposits and borrowings from other financial institutions
Profit after tax 8,473,997 6,445,595 and credit institutions (9,898,265) 20,850,316
Non-controlling interests (11,222) - Increase/(decrease) in deposits from customers (including State Treasury) 31,443,819 (2,478,096)
Basic earnings per share (VND/share) 35 3,816 7,719 (Decrease)/increase in valuable papers issued (excluding valuable papers issued
classified into financing activities) (1,762,011) 7,359,251
Increase/(decrease) in derivatives and other financial liabilities 310,313 (67,892)
Increase in other liabilities 4,528,623 304,627
Payments from reserves (59) (263)
Net cash flows from operating activities 298,932 6,967,811

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for purchases of fixed assets (401,574) (175,815)

Proceeds from disposal of fixed assets 6,097 5,795
Payments for disposal of fixed assets (89) (717)
Payments for investments in other entities (799) -
Proceeds from investments in other entities 915,560 925,780
Dividends received from long-term investments 32 275 334
Net cash flows from investing activities 519,470 755,377
Hanoi, Vietnam, 15 March 2019

ANNUAL REPORT 2018 ACHIEVING DREAMS 119

FINANCIAL REPORT

CONSOLIDATED CASH FLOW STATEMENT (continued) B04/TCTD-HN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS B05/TCTD-HN
for the year ended 31 December 2018 as at 31 December 2018 and for the year then ended

CASH FLOWS FROM FINANCING ACTIVITIES NOTES 2018 2017 1. GENERAL INFORMATION
VND MILLION VND MILLION
(RECLASSIFIED)
Vietnam Technological and Commercial Joint Stock Bank (“the Bank”) is a commercial joint stock bank registered and
incorporated in the Socialist Republic of Vietnam.
Increase in charter capital from share issuance - 2.099.999
Proceeds from long-term valuable papers issued classified into Establishment and operations
owners’ equity and other long-term borrowings 310.000 2.708.164
The Bank was incorporated pursuant to Business License No. 0038/GP-NHNN issued by the Governor of the State Bank of
Payments for long-term valuable papers qualified to classify into
Vietnam (“the SBV”) on 6 March 2018 to replace Business License No. 0040/NH-GP on 6 August 1993 and Business Registration
owners’ equity and other long-term borrowings (3.010.000) -
Certificate No. 0100230800 issued by the Hanoi Department of Planning and Investment on 10 August 2018. The operating
Payments for buying treasury shares - (4.043.249)
duration is 99 years since 6 August 1993.
Proceeds from selling treasury shares 16.341.177 -
Increase in charter capital from capital contribution by The principal activities of the Bank are mobilizing and receiving short, medium and long-term deposit funds from organizations and
non-controlling shareholders 58.201 - individuals, lending on short, medium and long-term basis up to the nature and ability of the Bank’s capital resources, conducting
Net cash flows from financing activities 13.699.378 764.914 settlement and cash services and other banking services as approved by the SBV, conducting investments in subsidiaries,
Net cash flows during the year 14.517.780 8.488.102 associates, joint-ventures, bonds and other companies and dealing in foreign exchange in accordance with applicable regulations.
Cash and cash equivalents at the beginning of the year 22.681.199 14.193.097
Charter capital
Cash and cash equivalents at the end of the year 36 37.198.979 22.681.199
As at 31 December 2018, the charter capital of the Bank is VND 34,965,921,600,000
(31 December 2017: VND 11,655,307,200,000).
SIGNIFICANT NON-CASH TRANSACTIONS DURING THE YEAR Network
Increase in charter capital from owners’ equity 23.310.615 - The Bank’s Head Office is located at 191 Ba Trieu, Hai Ba Trung District, Hanoi. As at 31 December 2018, the Bank has one
Increase in charter capital from convertible bonds - 2.077.228 (1) Head Office, two (2) representative offices, three hundred and fourteen (314) transaction offices nationwide and three (3)
subsidiaries.
Subsidiaries
As at 31 December 2018, the Bank has three (3) subsidiaries as follows:

% owned
No. Name Business License No. Industry by the Bank

1 Techcom Securities Joint Stock 85/GPDC-UBCK dated 16 October 2018 Securities activities 94.49999%
Company granted by the State Securities Commission

2 Vietnam Technological and 0102786255 dated 18 June 2008 granted Debt and asset 100%
Commercial Joint Stock Bank – by the Hanoi Department of Planning and management
Asset Management Company Investment which was amended for the 22th
Limited time on 30 November 2018

3 Techcom Capital Management 40/UBCK-GP dated 21 October 2008 Fund management 100%
Company Limited granted by the State Securities Commission
Hanoi, Vietnam, 15 March 2019

Employees
As at 31 December 2018, the Bank and its subsidiaries have 9,757 employees (31 December 2017: 8,328 employees).

ANNUAL REPORT 2018 ACHIEVING DREAMS 121

FINANCIAL REPORT | Notes to the consolidated financial statements
2. ACCOUNTING PERIOD AND CURRENCY
2.1 Accounting period
The annual accounting period of the Bank starts on 1 January and ends on 31 December.
2.2 Accounting currency
Currency used in accounting of the Bank is Vietnam dong (“VND”) and is rounded to the nearest VND million for presentation of
consolidated financial statements.
3. APPLIED ACCOUNTING STANDARDS AND SYSTEM
3.1 Statement of compliance
The Board of Management of the Bank confirmed that it has complied with Vietnamese Accounting Standards, Vietnamese
Accounting System for Credit Institutions and statutory requirements relevant to preparation and presentation of consolidated
financial statements.
Accordingly, the accompanying consolidated balance sheet, the consolidated income statement, the consolidated cash flow
statement and notes to the consolidated financial statements, including their utilization are not designed for those who are
not informed about Vietnamese accounting principles, procedures and practices and furthermore are not intended to present
the consolidated financial position of the Bank and its subsidiaries, the consolidated results of their operations and their
consolidated cash flows in accordance with accounting principles and practices generally accepted in countries other than
Vietnam.
3.2 Basis of preparation
The consolidated financial statements of the Bank are prepared in accordance with the Accounting System applicable to Credit
Institutions required under Decision No. 479/2004/QD-NHNN issued on 29 April 2004, Circular No. 10/2014/TT-NHNN dated
20 March 2014 and Circular No. 22/2017/TT-NHNN dated 29 December 2017 amending and supplementing Decision No.
479/2004/QD-NHNN; the financial reporting regime applicable to credit institutions required under Decision No. 16/2007/QD-
NHNN dated 18 April 2007 and Circular No. 49/2014/TT-NHNN amending and supplementing a number of articles of Decision
No. 16/2007/QD-NHNN and the chart of account system for credit institutions issued in connection with Decision No. 479/2004/
QD-NHNN by the State Bank of Vietnam and Vietnamese Accounting Standards issued by the Ministry of Finance as per:
Decision No.149/2001/QD-BTC dated 31 December 2001 on the Issuance and Promulgation of Four Vietnamese Standards
on Accounting (series 1);
Decision No.165/2002/QD-BTC dated 31 December 2002 on the Issuance and Promulgation of Six Vietnamese Standards
on Accounting (series 2);
Decision No. 234/2003/QD-BTC dated 30 December 2003 on the Issuance and Promulgation of Six Vietnamese Standards
on Accounting (series 3);
Decision No.12/2005/QD-BTC dated 15 February 2005 on the Issuance and Promulgation of Six Vietnamese Standards on
Accounting (series 4); and
Decision No.100/2005/QD-BTC dated 28 December 2005 on the Issuance and Promulgation of Four Vietnamese Standards
on Accounting (series 5).
3.3 Basic of consolidation
The consolidated financial statements comprise the financial statements of the Bank and its subsidiaries for the year then ended
31 December 2018. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Bank obtains
control, and continue to be consolidated until the date that such control ceases. In case the Bank divests its equity interest in a
subsidiary resulting in loss of control over the subsidiary, the Bank only consolidates the financial result of the subsidiary from
the beginning of the year up to the date of the divestment without consolidating the net assets of the subsidiary. Furthermore,
the Bank makes adjustments of indirect impact of the divestment transactions on the consolidated cash flow statement.
ANNUAL REPORT 2018
B05/TCTD-HN
3. APPLIED ACCOUNTING STANDARDS AND SYSTEM (continued)
3.3 Basic of consolidation (continued)
The financial statements of subsidiaries are prepared for the same reporting year as the parent company, using consistent
accounting policies.
All intra-company balances, income and expenses and unrealized gains or losses result from intra-company transactions are
eliminated in full.
3.4 Basis of assumptions and uses of estimates
The preparation of the consolidated financial statements requires the Board of Management to make estimates and
assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities. These estimates and
assumptions also affect the income, expenses and the resultant provisions. Therefore, such estimates are necessarily based on
assumptions involving varying degrees of subjectivity and uncertainty and actual results may differ resulting in future changes in
such provision.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
4.1 Changes in accounting policies and disclosures
The accounting policies adopted by the Bank in preparation of the consolidated financial statements are consistent with those
followed in the preparation of the Bank’s consolidated financial statements for the year ended 31 December 2017, except for the
following changes in the accounting policies:
Circular No. 14/2017/TT-NHNN regulating the methods of calculating interest on depositing and credit extension transactions
between credit institutions and customers
On 29 September 2017, the SBV issued Circular No. 14/2017/TT-NHNN regulating methods of calculation of interest in
depositing and credit granting transactions between credit institutions and customers. Accordingly, the interest accruals on credit
and deposit operation are calculated on the basis that a year is 365 days. The circular has taken effect since 1 January 2018.
Circular No. 19/2017/TT-NHNN amending and supplementing a number of articles of Circular No. 36/2014/TT-NHNN of the
Governor of the SBV dated 20 November 2014 stipulating prudential ratios and limits for the operation of credit institutions and
foreign bank branches
On 28 December 2017, the SBV issued Circular No. 19/2017/TT-NHNN amending and supplementing a number of articles of
Circular No. 36/2014/TT-NHNN dated 20 November 2014 of the Governor of the SBV stipulating prudential ratios and limits for
the operation of credit institutions and foreign bank branches. Accordingly, “Other commitments” disclosed in "Off-balance sheet
items" include unused credit limits that credit institutions have rights to cancel or automatically cancel when customers breach
conditions of canceling or deteriorate the capacity to perform obligations; and unused credit limits of credit cards and other
commitments. The circular has taken effect since 12 February 2018.
Circular No. 16/2018/TT-BTC ("Circular 16") guiding a number of articles of the financial regime applicable to credit institutions
and foreign bank branches
Changes in Circular 16 are as below:
Amending and supplementing the management and utilization method of real estate held for debt resolution;
Amending and supplementing the recognition of revenue from trading of securities (shares exclusive); and
Amending and supplementing the recognition of expenses.
Circular 16 has taken effect since 26 March 2018 and replaced Circular No. 05/2013/TT-BTC dated 9 January 2013 of the
Ministry of Finance providing guidance on the financial regime applicable to credit institutions and foreign bank branches.
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FINANCIAL REPORT | Notes to the consolidated financial statements
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4.1 Changes in accounting policies and disclosures (continued)
Circular No. 22/2017/TT-NHNN amending and supplementing a number of articles of the Chart of account system applicable to
credit institutions issued in connection with Decision No. 479/2004/QD-NHNN dated 29 April 2004 and the financial reporting
regime applicable to credit institutions required under Decision No. 16/2007/QD-NHNN dated 18 April 2007 by the Governor of
the SBV ("Circular 22")
On 29 December 2017, the SBV issued Circular No. 22/2017/TT-NHNN amending and supplementing a number of articles of
the Chart of account system applicable to credit institutions issued in connection with Decision No. 479/2004/QD-NHNN dated
29 April 2004 and the financial reporting regime applicable to credit institutions required under Decision No. 16/2007/QD-NHNN
dated 18 April 2007 by the Governor of the SBV. The circular has taken effect since 1 April 2018.
The main changes in Circular 22 are as below:
Amending and supplementing the guidance on the accounting treatment for foreign exchange and gold transactions;
Amending a number of accounts in the Chart of account system applicable to credit institutions;
Amending the guidance on the accounting treatment for some accounts in the Chart of account system applicable to credit
institutions; and
Amending and supplementing the guidance on the Financial reporting regime applicable to credit institutions.
The Bank has assessed the effect of Circular 22 on the comparative figures in the consolidated financial statements.
Accordingly, the effects due to changes in exchange rate policies are immaterial. As a result, the Bank is not required to restate
the comparative figures due to changes in exchange rate policies.
4.2 Cash and cash equivalents
Cash and cash equivalents comprise cash, gold, balances with the SBV, treasury bills and other short-term valuable papers
eligible for rediscount with the SBV; balances with other credit institutions that have maturity of three months or less from the
transaction date and securities with recovery or maturity of three months or less from date of purchase. entrustments for credit granting
4.3 Balances with and credit granting to other credit institutions Asset classification for balances with and loans to other credit institutions, investments and trusted investments in unlisted
Balances with and credit granting to other credit institutions are presented at the principal amounts outstanding at the end of the year.
The credit risk classification of balances with and credit granting to other credit institutions and provision for credit risks thereof
are provided in accordance with Circular No. 02/2013/TT-NHNN dated 21 January 2013 of the SBV on classification of assets,
levels and method of making risk provision, and use of provision against credit risks in operation of credit institutions, foreign
bank’s branches (“Circular 02”) and Circular No. 09/2014/TT-NHNN dated 18 March 2014 on amending and supplementing
a number of article of Circular 02 (“Circular 09”). Accordingly, the Bank makes a specific provision for balances with (except
for current accounts at other local credit institutions or at foreign bank branches in Vietnam) and credit granting to other credit
institutions according to the method as described in Note 4.6.
According to Circular 02, the Bank is not required to make a general provision for placements with and credit granting to other
credit institutions.
4.4 Securities held-for-trading
4.4.1 Classification and recognition
Securities held-for-trading include debt securities acquired and held for resale. Securities held-for-trading are initially recognized
at cost.
4.4.2 Measurement
Listed debt securities held for trading are recognized at cost less provision for diminution in value of securities, which is based
on the yield quoted on the Hanoi Securities Exchange as at the balance sheet date.
ANNUAL REPORT 2018
B05/TCTD-HN
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4.4 Securities held-for-trading (continued)
4.4.2 Measurement (continued)
Provision for credit losses on corporate bonds which are not listed on the stock market or not registered on the unlisted public
companies market is made in accordance with Circular 02 and Circular 09 as described in Note 4.6.
Provision for securities held for trading which is mentioned above is reversed when the recoverable amount of securities held for
trading increases after making provision as a result of an objective event. Provision is reversed up to the gross value of these
securities before provision.
Gains or losses from the sales of securities held-for-trading are recognized in the consolidated income statement.
4.4.3 De-recognition
Securities held-for-trading are derecognized when the rights to receive cash flows from these securities are terminated or the
Bank transfers substantially all the risks and rewards of ownership of these securities.
4.5 Loans to customers
Loans to customers are presented at the principal amounts outstanding as at the end of the year less any provision made for
loans to customers.
Short-term loans have maturity of less than or equal to one year from disbursement date. Medium-term loans have maturity from
over one year to five years from disbursement date. Long-term loans have maturity of more than five years from disbursement date.
Loan classification and provision for credit losses are made according to Circular 02 and Circular 09 as presented in Note 4.6.
4.6 Asset classification and provisioning rate, risk provisioning method for balances with and credit granting to
other credit institutions, investments and trusted investments in unlisted corporate bonds, loans to customers and
corporate bonds, loans to customers and entrustments for credit granting (here refer as “debts”) is made in compliance with the
quantitative method as prescribed in Article 10 of Circular 02.
Specific provision as at 31 December is made based on the outstanding principal balance less discounted value of collaterals
multiplied by provision rates which are determined based on the debt classification as at 30 November. The basis to determine
the value and discounted value for each type of collateral is specified in Circular 02.
The debt classification and specific provision rates for each group are presented as follows:
Group Description Provision rate
1. Current (a) Current debts that are assessed as fully and timely recoverable for both principals and interests; or 0%
(b) Debts which are overdue for a period of less than 10 days and assessed as fully recoverable
for both overdue principals and interests, and fully and timely recoverable for both remaining
principals and interests.
2. Special (a) Debts which are overdue for a period of between 10 days and 90 days; or 5%
mention (b) Debts which the repayment terms are restructured for the first time.
3. Sub-standard (a) Debts which are overdue for a period of between 91 days and 180 days; or 20%
(b) Debts which the repayment terms are extended for the first time; or
(c) Debts which interests are exempted or reduced because customers do not have sufficient
capability to repay all interests under credit contracts; or
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FINANCIAL REPORT | Notes to the consolidated financial statements
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4.6 Asset classification and provisioning rate, risk provisioning method for balances with and credit granting to
other credit institutions, investments and trusted investments in unlisted corporate bonds, loans to customers and
entrustments for credit granting (continued)
Group Description
3. Sub-standard (d) Debts under one of the following cases which have not been recovered in less than 30 days from
(continued) the date of the recovery decision:
Debts violating Clause 1, 3, 4, 5, 6 under Article 126 of Law on Credit Institutions; or
Debts violating Clause 1, 2, 3, 4 under Article 127 of Law on Credit Institutions; or
Debts violating Clauses 1, 2 and 5 under Article 128 of Law on Credit Institutions.
(e) Debts required to be recovered under inspection conclusions.
4. Doubtful (a) Debts which are overdue for a period of between 181 days and 360 days; or
(b) Debts which the repayment terms are restructured for the first time but still overdue for a period of
less than 90 days under that restructured repayment term; or
(c) Debts which the repayment terms are restructured for the second time; or
(d) Debts which are specified in point (d) of Group 3 overdue for a period of between 30 days and 60
days after decisions of recovery have been issued; or
(e) Debts required to be recovered under inspection conclusions but still outstanding with an overdue
period up to 60 days since the recovery date as required by regulatory inspection conclusions.
(a) Debts which are overdue for a period of more than 360 days; or
5. Loss (b) Debts which the repayment terms are restructured for the first time but still overdue for a period of
90 days or more under that first restructured repayment term; or
(c) Debts which the repayment terms are restructured for the second time but still overdue under that
second restructured repayment term; or
(d) Debts which the repayment terms are restructured for the third time or more, regardless of being
overdue or not; or
(e) Debts which are specified in point (d) of Loan group 3 and overdue for a period of more than 60
days after decisions on recovery have been issued; or
(f) Debts required to be recovered under regulatory inspection conclusions but still outstanding
with an overdue period of more than 60 days since the recovery date as required by regulatory
inspection conclusions; or
(g) Debts of credit institutions under special control as announced by the SBV, or debts of foreign
bank branches of which capital and assets are blocked.
Where a customer has more than one debt with the Bank and one of the outstanding debts is classified into a higher risk group,
the Bank is required to classify the entire remaining debts of such customer into the higher risk group.
When participating in a syndicated loan as a participant, the Bank classifies loans (including syndicated loans) of the customer
into the higher risk group between the assessment of the leading banks and its own assessment.
If a customer is classified by the bank into the risk group which is lower than the risk group provided by CIC, the Bank is
required to adjust the risk group of such customer following the risk group provided by CIC.
In accordance with the requirements of Circular 02, General provision as at 31 December is made at 0.75% of total outstanding
debt balances excluding placements with and credit granting to other credit institutions and debts classified as loss (group 5) as
at 30 November.
ANNUAL REPORT 2018
B05/TCTD-HN
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4.7 Investment securities
4.7.1 Classification
Investment securities include available-for-sale investment securities and held-to-maturity investment securities. The Bank
Provision rate initially recognizes investment securities at cost and classifies investment securities into proper groups at purchase date.
According to Official Letter No. 2601/NHNN-TCKT dated 14 April 2009 by the SBV, the Bank is allowed to reclassify investment
securities for maximum one time after purchase.
Held-to-maturity investment securities
Held-to-maturity investment securities are debt securities with fixed maturities and fixed or determinable payments, where the
Bank has the positive intention and ability to hold until maturity.
Available-for-sale investment securities
50% Available-for-sale investment securities are debt or equity securities which are held for an indefinite period and may be sold at
any time.
4.7.2 Recognition
The Bank recognizes investment securities on the date that it acquires substantially all the risks and rewards of owning these
securities.
4.7.3 Measurement
Equity securities
100%
Listed available-for-sale equity securities are recorded at cost less provision for diminution in value of securities determined
based on closing prices of securities on Ho Chi Minh City Stock Exchange and Hanoi Stock Exchange as at the consolidated
balance sheet date.
For unlisted available-for-sale equity securities which are actively traded on the unlisted public company market (“Upcom”),
provision for diminution in value is determined by the average trading price at the reporting date.
For unlisted available-for-sale equity securities which are not registered on Upcom, provision for diminution in value is calculated
based on the average quoted prices of three securities companies with their share capital of above VND 300 billion. In case the
quoted prices of three securities companies cannot be obtained, these securities are recorded at cost.
Debt securities
Debt securities are initially stated at cost, including transaction costs and other directly attributable costs. They are subsequently
recognized at amortized cost (affected by premium/discount amortization) less provision for impairment. Premium and discounts
arising from purchases of debt securities are amortized to the consolidated income statement on a straight-line basis from the
acquisition date to the maturity date.
Post-acquisition interest income of available-for-sale debt securities and held-to-maturity debt securities is recognized in the
consolidated income statement on an accrual basis.
Provision for diminution in value of securities is made when the carrying value is higher than the market value in compliance
with Circular No. 228/2009/TT-BTC issued by the Ministry of Finance on 7 December 2009. In case market prices of securities
are not available or cannot be determined reliably, no provision is calculated. Provision is recognized in the “Net gain/(loss) from
investment securities” account of the consolidated income statement.
Provision for credit losses on corporate bonds which are not listed on the stock market or not registered on the unlisted public
companies market is made in accordance with Circular 02 and Circular 09 as presented in Note 4.6.
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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4.8 Repurchase and reverse repurchase agreements 4.10 Tangible fixed assets (continued)
Securities sold under agreements to repurchase at a specific date in the future are not derecognized from the consolidated 4.10.2 Depreciation
financial statements. The corresponding cash received is recognized as a borrowing in the consolidated balance sheet. The
difference between the sale price and repurchase price is recognized in the consolidated income statement based on the interest Depreciation of fixed assets is computed on a straight-line basis over the estimated useful lives of tangible fixed assets which
rate stipulated in the contract. are as follows:

Conversely, securities purchased under agreements to resell at a specific date in the future are not recognized in the
consolidated financial statements. The corresponding cash payment is recognized as an investment in the consolidated balance
sheet and the difference between the purchase price and resale price is recognized in the consolidated income statement based
on the interest rate stipulated in the contract.
4.9 Long-term investments
4.9.1 Other long-term investments
Other long-term investments represent investments in other entities in which the Bank holds less than or equal to 11% of voting
rights. These investments are initially recorded at cost at the investment date.
4.9.2 Provision for impairment of long-term investments
For listed securities or unlisted but registered for trading securities on unlisted public company market (UPCoM), provision for
diminution in value is made when their listed/registered price for trading is lower than the carrying value of the securities at year end.
In other cases, provision for diminution in the value of other long-term investment is made when the investee suffers loss, except
that such loss had been forecasted in the investee’s business plan before the investment. Provision for impairment is determined
as the total actual contributed capital of parties to the investee company (par value) less (-) the actual owner’s equity multiplied
(x) by the Bank’s ownership percentage (par value) in the investee company. Provision is reserved when the recoverable amount
of the investments increases after the provision is made. A provision is reversed only to the extent that the investment’s carrying
amount does not exceed the carrying amount that would have been determined if no provision had been recognized.
4.10 Tangible fixed assets
4.10.1 Cost
Tangible fixed assets are stated at cost less accumulated depreciation. The initial cost of a tangible fixed asset comprises
its purchase price, including import duties and non-refundable purchase taxes and any directly attributable costs of bringing
the asset to its working condition and location for its intended use, and the cost of dismantling and removing the asset and
restoring the site on which they are located. Expenditure incurred after the tangible fixed assets have been put into operation,
such as repairs and maintenance and overhaul costs, is normally charged to the consolidated income statement for the period
in which the costs are incurred. Where it can be clearly demonstrated that the expenditure has resulted in an increase in the
future economic benefits expected to be obtained from the use of an item of tangible fixed assets beyond its originally assessed
standard of performance, the expenditure is capitalized as an additional cost of tangible fixed assets.
In case the rental period accounts for more than 90% of the assets’ useful life, the Bank is allowed to record the total rental
expense as fixed assets if all of the following conditions are simultaneously satisfied:
The lessee is not entitled to cancel the lease contract and the lessor has no obligation to repay the amount received in
advance under any circumstances and forms;
The amount prepaid to the lessor is not less than 90% of the total value of rental contract and the lessee must make payment
for the remaining amount within 12 months from the beginning of the lease;
Almost all the risks and benefits associated with ownership of the leased asset are transferred to the lessee; and
The lessor must estimate the relatively full cost of the lease.
buildings and building improvements.... 8 - 50 years
machines and equipment...................... 3 - 10 years
vehicles................................................. 6 - 10 years
other fixed assets.................................. 4 - 10 years
4.11 Intangible fixed assets
4.11.1 Computer software
The cost of acquiring new software, which is not an integral part of the related hardware, is capitalized and treated as an
intangible asset. Software costs are amortized on a straight-line basis for the period from 4 to 8 years.
4.11.2 Land use rights
Definite land use rights
Definite land use rights are stated at cost less accumulated amortization. The initial cost of a land use right comprises its
purchase price in conjunction with securing the land use right and expenses for compensation for site clearance, ground leveling
and registration fees. Amortization is computed on a straight-line basis over the leasing period.
Indefinite land use rights
Indefinite land use rights are stated at cost and are not amortized. The initial cost of land use rights comprises its purchase price in
conjunction with securing the land right and expenses for compensation for site clearance, ground leveling and registration fees.
4.11.3 Other intangible fixed assets
Other intangible fixed assets are stated at cost less accumulated amortization. Amortization is computed on a straight-line basis
for the period from 4 to 8 years.
4.12 Investment property
4.12.1 Cost
Investment property is stated at cost less accumulated depreciation. The initial cost of an investment property comprises
its purchase price, cost of land use rights and any directly attributable expenditures of bringing the property to the condition
necessary for it to be capable of operating. Expenditure incurred after investment property has been put into operation, such as
repairs and maintenance, is charged to the consolidated income statement for the year in which the expenditure is incurred. In
situations where it can be clearly demonstrated that the expenditure has resulted in future economic benefits in excess of the
originally assessed standard of performance of the existing investment property, the expenditure is capitalized as an additional
cost of investment property.
4.12.2 Depreciation
Depreciation of investment property is computed on a straight-line basis over the estimated useful life of investment property
which is as follows:
building..................................................10 - 40 years

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4.13 Operating lease payments 4.16 Share capital (continued)
Payments made under operating leases are recognized in the consolidated income statement on a straight-line basis over the 4.16.2 Share premium
term of the lease. Lease incentives received are recognized in the consolidated income statement as an integral part of the total
lease expense. On receipt of capital from shareholders, the difference between the issue price and the par value of the shares is recorded as
share premium in equity.
4.14 Other receivables
4.16.3 Treasury shares
Accounts receivable other than receivables from credit activities of the Bank are initially recognized at cost and subsequently
presented at cost less provision. Own equity instruments which are reacquired (treasury shares) are recognized at cost and deducted from equity. No gain or loss
is recognized in profit or loss upon purchase, sale, issue or cancellation of the Bank’s own equity instruments.
Receivables are subject to review for impairment based on the number of overdue months from the original maturity date of
receivables or expected loss of current debts in case the debts are not due for payment yet but the corporate debtors have 4.16.4 Reserves and funds
fallen into bankruptcy or are in the process of dissolution, or of individual debtors who are missing, escaped, prosecuted, on trial
Reserves and funds of the Bank
or deceased. Provision expense incurred is recorded in “Other operating expenses” of the consolidated income statement in the
year The Bank is required to make the following reserves before distribution of profits in accordance with Law on Credit Institutions
No. 47/2010/QH12 and Decree No. 93/2017/ND-CP and Charter of the Bank:
For overdue receivables, the Bank uses provision rates based on the overdue months in accordance with Circular No. 228/2009/
TT-BTC dated 7 December 2009 and Circular No. 89/2013/TT-BTC dated 28 June 2013 as below:
Percentage of profit after tax Maximum balance
Status of aging Provision rate
Capital supplementary reserve 5% of profit after tax 100% charter capital
From six (06) months up to under one (01) year 30% Financial reserve 10% of profit after tax Not regulated
From one (01) year up to under two (02) years 50%
From two (02) years up to under three (03) years 70% Other funds are appropriated from profit after tax. The allocation from profit after tax and utilization of the other equity funds are
From three (03) years and above 100% approved by the shareholders in the Annual General Meeting. These funds are not required by law and are fully distributable.
Reserves and funds of subsidiaries
Classification and provisioning for debts which have been sold but not yet collected Vietnam Technological and Commercial Joint Stock Bank - Asset Management Company Limited:
The Bank reclassifies and makes provision for the debts which have been sold but not yet collected based on the debt According to Circular No. 27/2002/TT-BTC dated 22 March 2002 issued by the Ministry of Finance, the appropriation to reserves
classification results and collateral value right before the debts were sold in accordance with Circular 02 and Circular 09. is made in a similar way to the Bank.
Techcom Securities Joint Stock Company and Techcom Capital Management Company Limited:
4.15 Business combination and goodwill
According to Circular No. 146/2014/TT-BTC issued by the Ministry of Finance issued on 6 October 2014 guiding the financial
Business combinations are accounted for using the purchase method. The cost of a business combination is measured as regime for securities and fund management companies, realized profit of the Company shall be distributed as follows:
the fair value of assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange plus any
costs directly attributable to the business combination. Identifiable assets and liabilities and contingent liabilities assumed in a
business combination are measured initially at fair values at the date of business combination. Percentage of profit after tax Maximum balance
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost the business combination
over the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities. If the cost Capital supplementary reserve 5% of profit after tax 10% charter capital
of a business combination is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized
Financial reserve 5% of profit after tax 10% charter capital
directly in the consolidated income statement. After initial recognition, goodwill is measured at cost less any accumulated
amortization. Goodwill is amortized over five-year period on a straight-line basis.
4.16 Share capital Financial reserve is used to compensate the damages incurred in business activities. These statutory reserves are made at
year-end, non-distributable and considered as equity of the Bank.
4.16.1 Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognized as
a deduction from equity.

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FINANCIAL REPORT | Notes to the consolidated financial statements
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4.17 Revenue and expense recognition
4.17.1 Interest income
Interest income is recognized in the consolidated income statement on an accrual basis, except for interest of debts which are
classified in groups 2 to 5 which is recognized upon receipt.
4.17.2 Fees and commission income
Fees and commissions are recognized in the consolidated income statement on an accrual basis.
4.17.3 Dividend income
Dividends receivable in cash are recognized in the consolidated income statement when the Bank’s right to receive dividends is
established.
In accordance with Circular No. 244/2009/TT-BTC dated 31 December 2009 issued by the Ministry of Finance, dividends
received in the form of shares, bonus shares and rights to purchase shares of the existing shareholders, shares distributed
from retained earnings are not recognized as an increase in the value of the investment and income is not recognized in the
consolidated income statement. Instead only changes in number of shares held by the Bank are updated and monitored.
4.17.4 Income and expenses from the sale of debts
Income and expenses from the sale of debts are recognized in accordance with Decision No. 59/2006/QD-NHNN issued by
the SBV promulgating regulations on sale and purchase of debts by credit institutions. From 1 September 2015, income and
expenses arising from purchase and sale of debts are recognized following Circular No. 09/2015/TT-NHNN providing guidance
on the sale of debts of credit institutions and foreign bank branches.
According to Decision No. 59/2006/QD-NHNN and Circular No. 09/2015/TT-NHNN, the difference between the prices of debts
purchased or sold and their book value are recorded as follows:
For debts recorded in the consolidated balance sheet:
-- If the sale price is higher than the book value of the debt, the difference shall be recorded as income of the Bank in the year.
-- If the sale price is lower than the book value of the debt, the difference shall be used to offset against the indemnity paid by
an individual or guarantor (in case such individual or guarantor is determined to be responsible for the damage and obliged
to make indemnity under prevailing regulations), or the compensation paid by the insurer, or use of outstanding provision
recognized as expense previously. The remaining balance (if any) shall be recognized as an operating expense of the Bank
in the year.
For debts written-off and monitored off-balance sheet, the proceeds from sale of debts shall be recognized as other income
of the Bank.
Book value of debts purchased or sold is the book value of the principal, interest and related financial obligations (if any) of
debts recorded in the consolidated balance sheet or off-balance sheet at the date of debts purchased or sold; or the book value
at the date of writing-off of debts; or the book value of debts written-off previously at the date of debts purchased or sold.
The purchasing or selling price is the sum of consideration to be paid by a debt buyer to a debt seller under a debt purchase or
sale contract.
4.17.5 Interest expenses
Interest expenses are recognized in the consolidated income statement on an accrual basis.
ANNUAL REPORT 2018
B05/TCTD-HN
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4.18 Foreign currency transactions
The Bank maintains its accounting system and records all transactions in original currencies. Monetary assets and liabilities
denominated in foreign currencies are translated into VND using exchange rates ruling at the consolidated balance sheet date.
Non-monetary items arising in foreign currencies during the year are converted into VND at rates ruling on the transaction dates.
Foreign exchange differences arising from the translation of monetary assets and liabilities into VND in the year are recognized
and followed in the “Differences in foreign exchange” under “Shareholders’ equity” in the consolidated balance sheet and will be
transferred to the consolidated income statement at year-end.
4.19 Taxation
Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognized in the consolidated
income statement.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at
the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet method, providing for temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax
provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities using tax
rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which
the asset can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit
will be realized.
4.20 Fiduciary assets
Assets held in a fiduciary capacity are not reported in the consolidated financial statements as they are not assets of the Bank.
4.21 Commitments and contingent liabilities
At any time, the Bank has outstanding commitments to extend credit. These commitments take the form of approved loans and
overdraft facilities. The Bank also provides financial guarantees and letters of credit to guarantee the performance of customers
to third parties. Many of the contingent liabilities and commitments will expire without being advanced in whole or in part.
Therefore the amounts do not represent firm commitment of future cash flows.
Off-balance sheet commitments include guarantees, payment acceptances and irrevocable unconditional loan commitments
with specific implementing time.
The classification of off-balance sheet commitments is made only for the purpose of managing and monitoring the credit quality
under the policy applied to debt classification as described in Note 4.6.
In accordance with Circular 02, no provision is required for off-balance sheet commitments.
4.22 Derivative financial instruments
4.22.1 Foreign exchange contracts
The Bank involves in currency forward contracts and currency swap contracts to facilitate customers to transfer, modify or
minimize foreign exchange risk or other market risks, and also for the business purpose of the Bank.
The currency forward contracts are commitments to settle in cash on a pre-determined future date based on the difference
between pre-determined exchange rates, calculated on the notional amount. The currency forward contracts are recognized
at nominal value at the transaction date and are revalued for the reporting purpose at the exchange rate at the reporting date.
Gains or losses realized or unrealized are recognized in the consolidated income statement.
ACHIEVING DREAMS 133
FINANCIAL REPORT | Notes to the consolidated financial statements
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4.22 Derivative financial instruments (continued)
4.22.1 Foreign exchange contracts (continued)
The currency swap contracts are commitments to settle in cash on a pre-determined future date based on the difference
between pre-determined exchange rates, calculated on the notional principal amount. The discount or premium arising from
difference between spot exchange rate at the effective date of the contract and the forward rate is recognized at the effective
date of the contract as an asset if positive or a liability if negative in the consolidated balance sheet. This difference will be
amortized on a straight-line basis to the consolidated income statement over the term on the contract.
4.22.2 Interest rate swap contracts
Commitment value in interest rate swap contracts is not recognized in the consolidated balance sheet. Differences in interest
rate swaps are recognized in the consolidated income statement on an accrual basis.
4.22.3 Commodity futures contracts
The Bank provides brokerage services for clients enter into the commodity future contracts, and accordingly the value of those
contracts is not recognized in the consolidated balance sheet. Income arising from the brokerage transactions is recognized in
the consolidated income statement.
4.23 Offsetting
Financial assets and financial liabilities are offset and the net amount reported in the consolidated balance sheet if, and only
if, there is a currently enforceable legal right to offset financial assets against financial liabilities or vice-versa, and there is an
intention to settle on a net basis, or to realize the asset and settle the liability simultaneously.
4.24 Employee benefits
4.24.1 Post-employment benefits
Post-employment benefits are paid to retired employees of the Bank by the Social Insurance Agency which belongs to the
Ministry of Labor, Invalids and Social Affairs. The Bank is required to contribute to these post-employment benefits by paying
social insurance premium to the Social Insurance Agency at the rate of 17.5% of employees’ basic salary plus other allowances.
The Bank has no further obligation.
4.24.2 Voluntary resignation
The Bank has the obligation, under Article 48 of the Vietnam Labor Code No. 10/2012/QH13 effective from 1 May 2013, to pay
allowance arising from voluntary resignation of employees, equal to a half of monthly salary for each year of employment up to
31 December 2008 plus salary allowances (if any). From 1 January 2009, the average monthly salary used in this calculation is
the average monthly salary of the latest six-month period up to the resignation date.
4.24.3 Unemployment allowance
According to Circular No. 28/2015/TT-BLDTBXH on guidelines for Article 52 of the Law on Employment and Decree No.
28/2015/ND-CP dated 12 March 2015 of the Government providing guidelines for the Law on Employment in term of
unemployment insurance, the Bank is required to contribute to the unemployment insurance at the rate of 1% of salary and
wage fund of unemployment insurance joiners and deduct 1% of monthly salary and wage of each employee to contribute to the
unemployment insurance.
ANNUAL REPORT 2018
B05/TCTD-HN
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4.25 Financial instruments
Solely for the purpose of providing disclosures about the significance of financial instruments to the consolidated financial
position, consolidated results of operations and the nature and extent of risk arising from financial instruments in compliance
with Circular No. 210/2009/TT-BTC, the Bank classifies its financial instruments as follows:
4.25.1 Financial assets
Financial assets recognized 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 Bank as 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 Bank has the positive intention and ability to hold to maturity, other than:
financial assets that, upon initial recognition, were categorized as such recognized at fair value through profit or loss
statements;
financial assets already categorized as available-for-sale;
financial assets that meet the definitions 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 Bank 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 at fair value through profit or loss;
that the Bank, upon initial recognition, designates as available-for-sale; or
for which the Bank may not recover substantially all of its initial investment, other than because of credit deterioration, which
are classified as available-for-sale.
Available-for-sale investments
Available-for-sale assets are non-derivative financial assets that are designated as available-for-sale or are not classified as:
financial assets at fair value through profit or loss;
held-to-maturity investments; or
loans and receivables.
ACHIEVING DREAMS 135
FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 5. CASH AND GOLD

4.25 Financial instruments (continued) 31 DECEMBER 2018 31 DECEMBER 2017
VND MILLION VND MILLION
4.25.2 Financial liabilities
Cash on hand in VND 2,121,147 1,948,066
Financial liabilities at fair value through profit or loss Cash on hand in foreign currencies 472,445 374,120
A financial liability at fair value through profit or loss is a financial liability that meets either of the following conditions: Gold on hand 12,875 22,176

It is considered by management as held-for-trading. A financial liability is considered as held-for-trading if: 2,606,467 2,344,362
- 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 Bank as at fair value through profit or loss.
6. BALANCES WITH THE STATE BANK OF VIETNAM
Financial liabilities carried at amortized cost
Financial liabilities which are not classified as financial liabilities at fair value through profit or loss are classified as financial 31 DECEMBER 2018 31 DECEMBER 2017
liabilities carried at amortized cost. VND MILLION VND MILLION

The above described classification of financial instruments is solely for presentation and disclosure purpose and is not intended Balances with the SBV
to be a description of how the instruments are measured. Accounting policies for measurement of financial instruments are - In VND 10,554,041 4,277,877
disclosed in other relevant notes. - In foreign currencies 1,442 1,554

4.26 Items which have no balance 10,555,483 4,279,431

Items or balances required by Decision No. 16/2007/QD-NHNN dated 18 April 2007 and Circular No. 49/2014/TT-NHNN dated
31 December 2014 issued by the SBV stipulating the financial reporting mechanism for credit institutions that are not shown in
these consolidated financial statements indicate nil balance.
Balances with the SBV include settlement and compulsory deposits.
4.27 Segment reports Under the SBV’s regulations on compulsory reserve, banks are permitted to maintain a floating balance for the compulsory
A segment is a component determined separately by the Bank which is engaged in providing related products or services reserve requirement (“CRR”). The monthly average balance of the reserve must not be less than the preceding month’s average
(business segment) or providing products or services in a particular economic environment (geographical segment), that is balances of deposits in scope multiplied by the CRR rates as follows:
subject to risks and returns that are different from those of other segments.
CRR RATES
For management purpose, the Bank and its subsidiaries have established their operation into the following business segments:
Banking activities: Products and services provided to customers include: 31 DECEMBER 2018 31 DECEMBER 2017
- Mobilizing deposits;
- Providing credit; Deposits in foreign currencies with term of less than 12 months 8.00% 8.00%
- Providing settlement and card services; and Deposits in foreign currencies with term of 12 months and above 6.00% 6.00%
- Providing other banking services. Deposits in VND with term of less than 12 months 3.00% 3.00%
Asset management activities; Deposits in VND with term of 12 months and above 1.00% 1.00%
Securities trading activities;
Fund management activities; and
Other finance activities.
The Bank and its subsidiaries’ principal activities are mainly conducted within Vietnam territory. Therefore, the Bank and its
subsidiaries’ risks and returns are not impacted by the Bank’s operations that are taken place in different locations. Hence,
the Bank’s management is of the view that the Bank has only one geographical segment. Accordingly, the presentation of
geographical segment information is not required.

ANNUAL REPORT 2018 ACHIEVING DREAMS 137

FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

6. BALANCES WITH THE STATE BANK OF VIETNAM (continued) 7. BALANCES WITH AND CREDIT GRANTING TO OTHER CREDIT INSTITUTIONS (continued)
Interest rates per annum at the reporting date are as follows: 7.2 Credit granting to other credit institutions

31 DECEMBER 2018 31 DECEMBER 2017 31 DECEMBER 2018 31 DECEMBER 2017

VND MILLION VND MILLION

Deposits in VND In VND 9,589,218 11,146,941

Compulsory deposits 1.20% 1.20% In foreign currencies 1,800,633 2,765,812
Amount over compulsory deposits 0.00% 0.00%
11,389,851 13,912,753
Deposits in foreign currencies
Compulsory deposits 0.00% 0.00%
Amount over compulsory deposits 0.05% 0.05% Interest rates per annum of credit granting to other credit institutions at the reporting date are as follows:

31 DECEMBER 2018 31 DECEMBER 2017

7. BALANCES WITH AND CREDIT GRANTING TO OTHER CREDIT INSTITUTIONS In VND 3.00% - 7.60% 3.20% - 5.40%
7.1 Balances with other credit institutions In foreign currencies 2.70% - 4.18% 2.40% - 3.40%

31 DECEMBER 2018 31 DECEMBER 2017

VND MILLION VND MILLION

Current accounts 8,956,056 7,108,306 7.3 Credit quality for balances with and credit granting to other credit institutions
- In VND 5,042,183 1,359,152
- In foreign currencies 3,913,873 5,749,154 Analysis of credit quality for balances (excluding current accounts) with and credit granting to other credit institutions at the
reporting date are as follows:
Term deposits 15,213,456 9,134,748
- In VND 6,258,483 7,071,648 31 DECEMBER 2018 31 DECEMBER 2017
VND MILLION VND MILLION
- In foreign currencies 8,954,973 2,063,100
Current 26,603,307 23,047,501
24,169,512 16,243,054

Interest rates per annum of balances with other credit institutions at the reporting date are as follows: 8. SECURITIES HELD-FOR-TRADING

31 DECEMBER 2018 31 DECEMBER 2017 31 DECEMBER 2018 31 DECEMBER 2017

VND MILLION VND MILLION

Current accounts Debt securities 7,583,090 6,775,118

- In VND 0.00% - 0.20% 0.30% Government bonds 3,723,271 3,822,161
- In foreign currencies 0.00% 0.00% Bonds issued by local credit institutions 2,724,819 116,614
In which: Bonds guaranteed by the Government for settlement 1,711,904 116,614
Term deposits Bonds issued by local economic entities 1,135,000 2,836,343
- In VND 4.40% - 9.60% 1.60% - 9.60%
- In foreign currencies 2.00% - 3.40% 1.55% - 2.10% Provision for securities held-for-trading (10,861) (17,024)
Provision for credit risk of unlisted corporate bonds (10,544) (14,246)
Provision for diminution of securities held-for-trading (317) (2,778)

7,572,229 6,758,094

ANNUAL REPORT 2018 ACHIEVING DREAMS 139

FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

8. SECURITIES HELD-FOR-TRADING (continued) 9. LOANS TO CUSTOMERS (continued)

Movements in provision for securities held-for-trading for year ended 31 December 2018 are as follows: Interest rates per annum of loans to customers at the reporting date are as follows:

GENERAL PROVISION FOR 31 DECEMBER 2018 31 DECEMBER 2017

PROVISION DIMINUTION TOTAL
VND MILLION VND MILLION VND MILLION
Loans to customers in VND 0.00% - 19.45% 0.00% - 19.35%
As at 1 January 2018 14,246 2,778 17,024 Loans to customers in foreign currencies 2.23% - 6.59% 1.70% - 6.75%
Provision reversed for the year (Note 29) (3,702) (2,461) (6,163)

Balance as at 31 December 2018 10,544 317 10,861

9.1 Loan portfolio by quality

31 DECEMBER 2018 31 DECEMBER 2017

Movements in provision for securities held-for-trading for year ended 31 December 2017 are as follows:
VND MILLION % VND MILLION %

GENERAL PROVISION FOR Current 154,548,122 96.63 155,931,825 96.94

PROVISION DIMINUTION TOTAL Special mention 2,587,646 1.62 2,333,286 1.45
VND MILLION VND MILLION VND MILLION Substandard 237,758 0.15 575,397 0.36
As at 1 January 2017 11,285 - 11,285 Doubtful 862,510 0.54 455,567 0.28
Provision made for the year (Note 29) 2,961 2,778 5,739 Loss 1,703,181 1.06 1,552,962 0.97

Balance as at 31 December 2017 14,246 2,778 17,024 159,939,217 100.00 160,849,037 100.00

In accordance with the Bank's report to the SBV as at 31 December 2018, the outstanding restructured loans which are
The listing status of securities held-for-trading is as follows: maintained in the same group as before the restructuring in accordance with Clause 3a, Article 10 of Circular 02/2013/TT-NHNN
and Decision 780/QD-NHNN are as follows:
31 DECEMBER 2018 31 DECEMBER 2017
VND MILLION VND MILLION
31 DECEMBER 2018 31 DECEMBER 2017
Debt securities VND MILLION VND MILLION

- Listed 5,435,175 4,176,174 Rescheduled or extended portions of loans maintained

- Unlisted 2,147,915 2,598,944 in Group 1 (Current) 18,305 75,724
Rescheduled or extended portions of loans maintained
7,583,090 6,775,118 in Group 2 (Special mention) 582 649

18,887 76,373
9. LOANS TO CUSTOMERS
31 DECEMBER 2018 31 DECEMBER 2017 9.2 Loan portfolio by term
VND MILLION VND MILLION

Loans to local economic entities and individuals 158,971,627 158,497,737 31 DECEMBER 2018 31 DECEMBER 2017
Discounted bills and valuable papers 361,280 1,983,527
VND MILLION % VND MILLION %
Loans financed by trusted funds 472,609 358,449
Payments on behalf of customers 94,473 2,166 Short term 60,381,950 37.76 63,412,628 39.42
Loans to foreign economic entities and individuals 39,228 7,158 Medium term 36,774,904 22.99 42,896,541 26.67
Long term 62,782,363 39.25 54,539,868 33.91
159,939,217 160,849,037
159,939,217 100.00 160,849,037 100.00

ANNUAL REPORT 2018 ACHIEVING DREAMS 141

FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

9. LOANS TO CUSTOMERS (continued) 10. PROVISION FOR LOANS TO CUSTOMERS

9.3 Loan portfolio by industrial sectors Provision for loans to customers are as follows:

31 DECEMBER 2018 31 DECEMBER 2017 31 DECEMBER 2018 31 DECEMBER 2017

VND MILLION VND MILLION

VND MILLION % VND MILLION % General provision 1,225,265 1,061,081

Loans to economic entities 87,555,538 54.74 96,071,606 59.73 Specific provision 1,159,849 823,500
Agriculture, forestry and aquaculture 260,998 0.16 301,494 0.19
Mining and quarrying 1,590,134 0.99 1,271,854 0.79 2,385,114 1,884,581
Manufacturing and processing 19,076,386 11.94 20,070,075 12.48
Electricity, petroleum and hot water manufacturing and distributing 2,409,681 1.51 1,858,933 1.16 Movements in provision for loans to customers for the year ended 31 December 2018 are as follows:
Water supply; waste and wastewater management and processing 23,526 0.01 88,955 0.06
Construction 8,095,573 5.06 6,100,546 3.79 SPECIFIC PROVISION GENERAL PROVISION TOTAL
Wholesale and retail trade; repair of motor vehicles, motorcycles 21,171,980 13.24 14,726,910 9.16 VND MILLION VND MILLION VND MILLION

Transportation and warehousing 2,853,511 1.78 3,257,263 2.03 As at 1 January 2018 823,500 1,061,081 1,884,581
Accommodation and foods services 927,745 0.58 5,571,892 3.46 Provision made for the year (Note 34) 2,889,508 164,184 3,053,692
Information and communication 147,061 0.09 1,081,104 0.67 Use of provision (2,553,159) - (2,553,159)
Banking, finance and insurance 9,468,647 5.92 9,304,078 5.78
Real estates 13,554,781 8.47 20,326,233 12.64 As at 31 December 2018 1,159,849 1,225,265 2,385,114
Science and technology 791,378 0.49 767,880 0.48
Administration activities and supportive services 201,007 0.13 1,868,575 1.16
154,973 0.10 71,687 Movements in provision for loans to customers for the year ended 31 December 2017 are as follows:
Education and training 0.04
Health care and social work 37,304 0.02 84,188 0.05
SPECIFIC PROVISION GENERAL PROVISION TOTAL
Arts and entertainment 127,065 0.08 15,818 0.01 VND MILLION VND MILLION VND MILLION
Other services 6,568,616 4.11 9,267,660 5.76
As at 1 January 2017 494,120 1,001,355 1,495,475
Household businesses 95,172 0.06 36,461 0.02
Provision made for the year (Note 34) 2,077,770 59,726 2,137,496
Loans to individuals 72,383,679 45.26 64,777,431 40.27
Use of provision (1,748,390) - (1,748,390)
159,939,217 100.00 160,849,037 100.00
As at 31 December 2017 823,500 1,061,081 1,884,581

9.4 Loan portfolio by ownership

11. DEBTS PURCHASED
31 DECEMBER 2018 31 DECEMBER 2017
*
(RECLASSIFIED) ( )
31 DECEMBER 2018 31 DECEMBER 2017
VND MILLION % VND MILLION % VND MILLION VND MILLION

Loans to economic entities 87,555,538 54.74 96,071,606 59.73 Debts purchased in VND 1,682 12,092
State-owned limited companies 6,902,256 4.32 8,817,905 5.49 Provision for debts purchased (1,682) (1,760)
Other limited companies 34,575,025 21.62 32,494,895 20.20
Joint-stock state-owned companies 76,316 0.05 63,292 0.04 - 10,332
Other joint-stock companies 43,234,058 27.01 51,326,364 31.91
Private companies and partnership companies 322,237 0.20 401,537 0.25 Breakdown of principals and interest of debts purchased is as follows:
Foreign-invested companies 2,039,895 1.28 2,076,046 1.29
Cooperatives and cooperative unions 25,637 0.02 70,592 0.04 31 DECEMBER 2018 31 DECEMBER 2017
VND MILLION VND MILLION
Administration units, Party, unions, associations 380,055 0.24 820,739 0.51
Others 59 0.00 236 0.00 Debts purchased in VND - 49,516
Loans to individuals 72,383,679 45.26 64,777,431 40.27 Provision for debts purchased 1,682 23,619

159,939,217 100.00 160,849,037 100.00 1,682 73,135

ANNUAL REPORT 2018 (*) Reclassifying some loans to the appropriate type of ownership ACHIEVING DREAMS 143
FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

11. DEBTS PURCHASED (continued) 12. INVESTMENT SECURITIES (continued)

Movements in provision for debts purchased are as follows:
12.2 Held-to-maturity securities
2018 2017
VND MILLION VND MILLION 31 DECEMBER 2018 31 DECEMBER 2017
VND MILLION VND MILLION
Opening balance 1,760 973
Debt securities 20,236,200 5,715,484
Provision (reversed)/made for the year (Note 34) (78) 787
Government bonds - 569,283
Bonds issued by other local credit institutions 30,000 2,030,001
Closing balance 1,682 1,760
In which: Bonds guaranteed by the Government for settlement 30,000 30,001
Bonds issued by local economic entities 20,206,200 3,116,200
Provision for held-to-maturity securities (159,422) (34,547)
12. INVESTMENT SECURITIES Provision for credit risk of unlisted corporate bonds (159,422) (34,547)
Investment securities at the reporting date include:
20,076,778 5,680,937
31 DECEMBER 2018 31 DECEMBER 2017
VND MILLION VND MILLION

Available-for-sale securities 66,625,261 46,018,398 12.3 Analysis of credit quality

- Debt securities 66,625,257 45,798,398 Analysis of credit quality for securities which are classified as credit risk bearing assets is as follows:
- Equity securities 4 220,000
Held-to-maturity securities 20,236,200 5,715,484 31 DECEMBER 2018 31 DECEMBER 2017
- Debt securities 20,236,200 5,715,484 VND MILLION VND MILLION

Provision for investment securities (349,113) (191,398) Current 61,052,464 24,110,635

- Provision for available-for-sale securities (189,691) (156,851)
- Provision for held-to-maturity securities (159,422) (34,547)
12.4 Provision for investment securities
86,512,348 51,542,484
31 DECEMBER 2018 31 DECEMBER 2017
VND MILLION VND MILLION
12.1 Available-for-sale securities
Provision for credit risk of unlisted corporate bonds 345,316 175,582
Provision for diminution of investment Securities 3,797 15,816
31 DECEMBER 2018 31 DECEMBER 2017
VND MILLION VND MILLION
349,113 191,398
Debt securities 66,625,257 45,798,398
Government bonds 8,793,593 13,048,507
Bonds issued by other local credit institutions 19,516,788 17,010,279
In which: Bonds guaranteed by the Government for settlement 11,114,162 12,459,709 Movements in provision for investment securities for the year ended 31 December 2018 are as follows:
Bonds issued by local economic entities 38,314,876 15,739,612
Equity securities 4 220,000 GENERAL PROVISION FOR
Equity security issued by local economic entities 4 220,000 PROVISION DIMINUTION TOTAL
Provision for available-for-sale securities (189,691) (156,851) VND MILLION VND MILLION VND MILLION

Provision for credit risk of unlisted corporate bonds (185,894) (141,035) As at 1 January 2018 175,582 15,816 191,398
Provision for diminution of available-for-sale securities (3,797) (15,816) Provision made/(reversed) for the year (Note 30) 169,734 (12,019) 157,715

66,435,570 45,861,547 As at 31 December 2018 345,316 3,797 349,113

ANNUAL REPORT 2018 ACHIEVING DREAMS 145

FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

12. INVESTMENT SECURITIES (continued) 13. LONG-TERM INVESTMENTS (continued)

12.4 Provision for investment securities (continued) 13.2 Provision for long-term investments
Movements in provision for investment securities for the year ended 31 December 2017 are as follows:
2018 2017
VND MILLION VND MILLION
GENERAL PROVISION FOR
PROVISION DIMINUTION TOTAL Opening balance 2,401 4,926
VND MILLION VND MILLION VND MILLION Provision reversed for the year (Note 33) (1,741) (2,525)
As at 1 January 2017 93,018 - 93,018
Provision made for the year (Note 30) 82,564 15,816 98,380 Closing balance 660 2,401

As at 31 December 2017 175,582 15,816 191,398

14. FIXED ASSETS

Movements in provision for VAMC bonds are as follows: 14.1 Tangible fixed assets
Movements in tangible fixed assets for the year ended 31 December 2018 are as follows: VND million
2018 2017
VND MILLION VND MILLION BUILDINGS MACHINES
Opening balance - 1,367,540 & BUILDING AND
Provision made for the year (Note 34) - 1,663,766 IMPROVEMENTS EQUIPMENT VEHICLES OTHERS TOTAL
Use of provision - (3,031,306)
Cost
Closing balance - - As at 1 January 2018 336,742 1,115,220 148,850 2,144 1,602,956
Addition 117,122 198,398 10,795 - 326,315
Transfer from advances for
13. LONG-TERM INVESTMENTS construction in progress 102,790 3,711 6,920 - 113,421
Other increases 5,681 - - - 5,681
31 DECEMBER 2018 31 DECEMBER 2017 Disposals (106,289) (98,623) - (402) (205,314)
VND MILLION VND MILLION Other decreases (4,643) (905) (2,102) (137) (7,787)
Other long-term investments - cost 12,883 12,084
Provision for long-term investments (660) (2,401) As at 31 December 2018 451,403 1,217,801 164,463 1,605 1,835,272

12,223 9,683 Accumulated depreciation

As at 1 January 2018 32,940 907,879 90,571 1,777 1,033,167
Charge for the year 13,557 93,492 13,939 156 121,144
13.1 Other long-term investments Other increases 1,338 - - - 1,338
Disposals (10,719) (94,142) - (396) (105,257)
31 DECEMBER 2018 31 DECEMBER 2017 Other decreases (10) (887) (2,102) (137) (3,136)

OWNERSHIP AT COST OWNERSHIP AT COST As at 31 December 2018 37,106 906,342 102,408 1,400 1,047,256
% VND MILLION % VND MILLION

Vietnam Airlines Corporation 0.00 417 0.00 417 Net book value
Vietnam Real Estate Exchange JSC 11.00 660 11.00 660 As at 1 January 2018 303,802 207,341 58,279 367 569,789
PCB Investment JSC 6.64 7,962 6.64 7,962 As at 31 December 2018 414,297 311,459 62,055 205 788,016
Society for Worldwide Interbank Financial Telecommunication 0.00 1,804 0.00 1,005
Banking Operations Training and Advisory JSC 10.93 1,040 9.88 1,040
Vietnam National Financial Switching JSC 0.42 1,000 0.42 1,000

12,883 12,084

ANNUAL REPORT 2018 ACHIEVING DREAMS 147

FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

14. FIXED ASSETS (continued) 14. FIXED ASSETS (continued)

14.1 Tangible fixed assets (continued) 14.2 Intangible fixed assets
Movements in tangible fixed assets for the year ended 31 December 2017 are as follows: VND million Movements in intangible fixed assets for the year ended 31 December 2018 are as follows: VND million

BUILDINGS MACHINES DEFINITE

& BUILDING AND COMPUTER LAND USE
IMPROVEMENTS EQUIPMENT VEHICLES OTHERS TOTAL SOFTWARE RIGHTS OTHERS TOTAL

Cost Cost
As at 1 January 2017 241,190 1,121,608 153,345 2,144 1,518,287 As at 1 January 2018 828,990 616,223 4,403 1,449,616
Addition 95,552 29,521 8,879 - 133,952 Addition 52,335 22,924 - 75,259
Disposals - (33,091) (13,374) - (46,465) Transfer from advances for construction in progress 7,888 4,050 - 11,938
Other decreases - (2,818) - - (2,818) Other increases - 4,629 - 4,629
Disposals (339) - (42) (381)
As at 31 December 2017 336,742 1,115,220 148,850 2,144 1,602,956 Other decreases (1,024) - - (1,024)

Accumulated depreciation As at 31 December 2018 887,850 647,826 4,361 1,540,037

As at 1 January 2017 21,860 833,454 84,546 1,591 941,451
Charge for the year 10,673 108,885 19,228 186 138,972 Accumulated amortization
Disposals - (32,246) (13,374) - (45,620) As at 1 January 2018 487,127 18,447 2,385 507,959
Other movements 407 (2,214) 171 - (1,636) Charge for the year 90,345 12,120 78 102,543
Disposals (243) - (42) (285)
As at 31 December 2017 32,940 907,879 90,571 1,777 1,033,167 Other decreases (760) - - (760)

Net book value As at 31 December 2018 576,469 30,567 2,421 609,457

As at 1 January 2017 219,330 288,154 68,799 553 576,836
As at 31 December 2017 303,802 207,341 58,279 367 569,789 Net book value
As at 1 January 2018 341,863 597,776 2,018 941,657
As at 31 December 2018 311,381 617,259 1,940 930,580

Additional information of tangible fixed assets:

31 DECEMBER 2018 31 DECEMBER 2017

VND MILLION VND MILLION

Cost of tangible fixed assets which have been fully depreciated

but still in active use 700,900 401,835

ANNUAL REPORT 2018 ACHIEVING DREAMS 149

FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

14. FIXED ASSETS (continued) 15. INVESTMENT PROPERTY

Movements in investment properties for the year ended in 31 December 2018 are as follows:
14.2 Intangible fixed assets (continued)
BUILDING
Movements in intangible fixed assets for the year ended 31 December 2017 are as follows: VND million VND MILLION

Cost
DEFINITE As at 1 January 2018 1,442,827
COMPUTER LAND USE Other decreases (7,128)
SOFTWARE RIGHTS OTHERS TOTAL
As at 31 December 2018 1,435,699
Cost
As at 1 January 2017 802,879 615,768 4,403 1,423,050 Accumulated depreciation
Addition 41,408 455 - 41,863 As at 1 January 2018 204,797
Disposals (15,297) - - (15,297) Charge for the year 35,916
Other decreases (1,338)
As at 31 December 2017 828,990 616,223 4,403 1,449,616
As at 31 December 2018 239,375
Accumulated amortization
As at 1 January 2017 408,309 6,548 2,307 417,164 Net book value
Charge for the year 94,115 11,899 78 106,092 As at 1 January 2018 1,238,030
Disposals (15,297) - - (15,297) As at 31 December 2018 1,196,324

As at 31 December 2017 487,127 18,447 2,385 507,959

Movements in investment properties for the year ended 31 December 2017 are as follows:
Net book value
BUILDING
As at 1 January 2017 394,570 609,220 2,096 1,005,886 VND MILLION
As at 31 December 2017 341,863 597,776 2,018 941,657
Cost
As at 1 January 2017 1,447,256
Disposals (4,429)
Additional information on intangible fixed assets:
As at 31 December 2017 1,442,827
31 DECEMBER 2018 31 DECEMBER 2017
VND MILLION VND MILLION
Accumulated depreciation
Cost of intangible fixed assets which have been fully amortized As at 1 January 2017 168,720
but still in active use 203,520 175,684 Charge for the year 36,077

As at 31 December 2017 204,797

Net book value

As at 1 January 2017 1,278,536
As at 31 December 2017 1,238,030

Investment property mainly includes Techcombank Building with cost and accumulated depreciation amounting to VND 1,435,699
million and VND 239,375 million respectively, as at 31 December 2018.
The Bank does not present its investment property at fair value for the following reason: The building is mostly used as the Bank
and its subsidiaries’ office, and the subsidiary’s rental revenue and the Bank’s rental expense related to the building have been
eliminated in the consolidated financial statements. With the building being utilized internally, the Bank is more concerned about the
building’s historical cost and its useful life (presented in the consolidated financial statements) rather than the building’s fair value.

ANNUAL REPORT 2018 ACHIEVING DREAMS 151

FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

16. OTHER ASSETS 16. OTHER ASSETS (continued)

(vii) Goodwill of the Bank was derived from the acquisition of Technological and Commercial Finance Company Limited (“TCF”)
31 DECEMBER 2018 31 DECEMBER 2017 in 2015. Changes in goodwill for the year are presented as follows:
VND MILLION VND MILLION

Other receivables 11,322,256 9,417,589 2018 2017

Internal receivables 76,332 25,774 VND MILLION VND MILLION
External receivables 11,245,924 9,391,815 Total goodwill 49,411 49,411
- Deposits for office rental (i) 106,861 395,207
- Deposit for purchase of office (ii) 377,467 2,352,839 Amortization periods 5 years 5 years
- Receivables related to Interest Subsidy Program 20,006 21,148 - Opening balance of unamortized goodwill 19,765 29,647
- Prepaid to suppliers 90,734 55,040
- Deposits for gold, commodity and foreign currencies trading in future markets 77,349 45,586 Goodwill decrease for the year
- Advances for fixed asset purchase and construction in progress (iii) 3,459,747 946,456 - Amortization for the year (Note 33) - (9,882)
- Receivables from loans sold contract (iv) - 1,862,038 - Goodwill decrease due to disposal of the subsidiary (19,765) -
- Receivables from deferred letters of credit (v) 4,240,462 2,789,982
- Receivables from other credit institutions 2,259,597 71,266 Total closing balance of unamortized goodwill - 19,765
- Receivables from bond principal and interest due on holiday 231,486 368,300
- Other external receivables 382,215 483,953

Interest and fee receivables 5,737,907 3,876,528 (viii) Provision for other assets, comprising of provision for inventories, overdue receivables, receivables from deferred letters of
credit, receivables from loans sold and other credit risk bearing assets, is as follows:
Deferred corporate income tax (vi) - 1,773
31 DECEMBER 2018 31 DECEMBER 2017
Other assets 717,481 557,642 VND MILLION VND MILLION

- Materials 10,735 24,475 Provision for credit risk 34,950 1,242,318

- Prepaid expenses 706,746 513,402 - General provision 34,906 22,127
- Goodwill (vii) - 19,765 - Specific provision 44 1,220,191
Other provision 40,889 69,251
Provision for other assets (viii) (75,839) (1,311,569)
75,839 1,311,569
17,701,805 12,541,963

(i) These are deposits for office rental of the Bank’s headquarter and branches. Movements in provision for other assets during the year are as follows:
(ii) These are deposits to purchase the Bank’s offices in Hanoi and Ho Chi Minh City.
2018 2017
(iii) These are payments to purchase fixed assets and construct the Bank’s offices. In which, there is an advance to purchase VND MILLION VND MILLION

a real-estate at Ho Chi Minh City. On 16 January 2019, the Bank completed the transfer of ownership and recorded a new Opening balance 1,311,569 1,504,323
fixed asset. Provision reversed for outstanding receivables from loans sold (Note 34) (1,220,903) (193,809)
(iv) Receivables from loans sold are outstanding receivables from licensed debts purchasing companies. General provision made for receivables from deferred letters of credit
(Note 34) 12,675 986
(v) Receivables from deferred letters of credit are receivables from importers who are the Bank’s customers for usance payable
Provision made for other assets bearing credit risk (Note 34) 859 -
at sight imported letter of credit. Accordingly, the Bank or counterparty bank made payment to the beneficiaries (exporters)
Provision made for other assets (Note 33) 44 317
of these letters of credit prior to their matured dates and earned fees for advanced settlement services.
Use of provision (44) -
(vi) Movement of deferred income tax assets during the year is as follows: VND million Provision reversed for inventories (Note 33) (1,498) (248)
Effects of consolidation (26,863) -
OPENING BALANCE REVERSAL CLOSING BALANCE
Closing balance 75,839 1,311,569
Deferred income tax assets related to
temporary tax differences 1,773 (1,773) -

ANNUAL REPORT 2018 ACHIEVING DREAMS 153

FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

17. DUE FROM THE GOVERNMENT AND THE STATE BANK OF VIETNAM 19. DEPOSITS FROM CUSTOMERS
31 DECEMBER 2018 31 DECEMBER 2017 19.1 Analysis by category of deposits
VND MILLION VND MILLION

Deposits from the State Treasury of Vietnam 2,000,120 1,000,000 31 DECEMBER 2018 31 DECEMBER 2017
VND MILLION VND MILLION
Borrowings from the State Bank of Vietnam 4,024,907 -
Current accounts 54,612,613 38,234,560
6,025,027 1,000,000 Current accounts in VND 48,125,562 34,061,915
Current accounts in foreign currencies 6,487,051 4,172,645
The deposits from the State Treasury of Vietnam as at 31 December 2018 have terms of two months and interest rate per
annum of 4.40%. The borrowings from the State Bank of Vietnam at 31 December 2018 have terms from 1 week to 2 weeks and Term deposits 143,613,379 129,727,778
interest rate per annum of 4.75%. Term deposits in VND 136,635,672 121,993,210
Term deposits in foreign currencies 6,977,707 7,734,568
18. DEPOSITS AND BORROWINGS FROM OTHER FINANCIAL INSTITUTIONS AND CREDIT INSTITUTIONS
Marginal deposits 3,188,540 3,008,495
18.1 Deposits from other financial institutions and credit institutions Marginal deposits in VND 3,080,503 2,843,993
Marginal deposits in foreign currencies 108,037 164,502
31 DECEMBER 2018 31 DECEMBER 2017
VND MILLION VND MILLION 201,414,532 170,970,833
Demand deposits 5,037,660 1,032,265
- In VND 5,036,111 1,031,740 Interest rates per annum of deposits from customers at the reporting date are as follows:
- In foreign currencies 1,549 525
Term deposits 23,935,795 20,242,110 31 DECEMBER 2018 31 DECEMBER 2017
- In VND 22,057,000 15,999,300
- In foreign currencies 1,878,795 4,242,810 Demand deposits in VND 0.00% - 0.80% 0.00% - 0.80%
Demand deposits in foreign currencies 0.00% - 0.10% 0.00% - 0.10%
28,973,455 21,274,375 Term deposits in VND 0.30% - 7.60% 0.30% - 11.94%
Term deposits in foreign currencies 0.00% - 0.60% 0.00% - 0.75%
Interest rates per annum of deposits from other financial institutions and credit institutions at the reporting date are as follows:

31 DECEMBER 2018 31 DECEMBER 2017 19.2 Analysis of deposits portfolio by ownership

In VND 3.50% - 5.50% 1.00% - 7.00%
In foreign currencies 2.42% - 3.40% 1.60% - 2.20% 31 DECEMBER 2018 31 DECEMBER 2017

VND MILLION % VND MILLION %

18.2 Borrowings from other financial institutions and credit institutions Deposits from organizations 59,358,072 29.47 49,926,989 29.20
State-owned limited companies 3,720,237 1.85 2,658,251 1.55
31 DECEMBER 2018 31 DECEMBER 2017 Other limited companies 25,735,319 12.78 19,461,912 11.38
VND MILLION VND MILLION
Joint-stock state-owned companies 126,038 0.06 132,206 0.08
In VND 1,839,199 19,321,553 Other joint-stock companies 23,263,620 11.55 23,100,099 13.51
In foreign currencies 5,612,906 5,727,897 Private enterprises and partnership companies 54,135 0.03 99,386 0.06
Foreign-invested enterprises 2,898,416 1.44 2,683,171 1.57
7,452,105 25,049,450 Cooperatives and cooperative unions 6,269 0.00 3,010 0.00
Administration units, Party, unions, associations 1,882,692 0.93 1,227,830 0.72
Interest rates per annum of borrowings from other financial institutions and credit institutions at the reporting date are as follows: Others 1,671,346 0.83 561,124 0.33

31 DECEMBER 2018 31 DECEMBER 2017 Deposits from individuals 142,056,460 70.53 121,043,844 70.80
In VND 3.50% - 8.00% 3.50% - 6.50%
In foreign currencies 0.70% - 4.17% 0.75% - 5.40% 201,414,532 100.00 170,970,833 100.00

ANNUAL REPORT 2018 ACHIEVING DREAMS 155

FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

20. DERIVATIVES AND OTHER FINANCIAL ASSETS/(LIABILITIES) VND million 22. OTHER LIABILITIES
31 DECEMBER 2018 31 DECEMBER 2017 31 DECEMBER 2018 31 DECEMBER 2017
VND MILLION VND MILLION

TOTAL CONTRACT TOTAL TOTAL CONTRACT TOTAL Accrued interest and fee payables 3,424,068 2,764,162
NOMINAL VALUE CARRYING VALUE NOMINAL VALUE CARRYING VALUE
Other liabilities 8,428,777 3,762,845
Foreign exchange Internal payables 12,582 13,465
forward contracts 64,416,164 (64,693) 26,744,367 144,445 External payables 8,416,195 3,749,380
Foreign exchange - Remittance payables 5,059,137 927,230
currency swap contracts 75,166,996 (191,614) 103,970,254 (173,684) - Payables to employees 686,126 615,387
Foreign exchange - Taxes payable (i) 980,062 928,393
interest rate swap contracts 11,386,132 (54,006) 5,148,488 65,531 - Deferred income 119,832 9,141
- Advance from customers 1,798 52,595
150,969,292 (310,313) 135,863,109 36,292 - Other accrued expenses 401,467 237,113
- Salary accrued expenses 441,414 368,949
- Payables relating to marketing and promotion 1,965 20,135
Total contract nominal value is translated at the contractual exchange rates. - Bonus and welfare funds 7,062 2,680
- Disbursements awaiting settlement 19,577 6,990
Total net carrying value is translated at the foreign exchange rates as at the reporting date. - Amount awaiting settlement 137,805 176,308
- Deferred proceeds from the sale of collaterals 83,833 156,580
- Deposits of customers awaiting settlement 85,103 105,583
21. VALUABLE PAPERS ISSUED - Other payables 391,014 142,296
Valuable papers issued categorized by terms are as follows:
11,852,845 6,527,007
31 DECEMBER 2018 31 DECEMBER 2017 (i) Taxes payable
VND MILLION VND MILLION

Up to 12 months (i) 6 6 31 DECEMBER 2018 31 DECEMBER 2017

VND MILLION VND MILLION
From 12 months to 5 years (ii) 9,277,953 11,039,964
Over 5 years (iii) 3,900,000 6,600,000 Value added tax (“VAT”) 16,080 10,406
Corporate income tax (“CIT”) 915,054 866,900
13,177,959 17,639,970 Other taxes 48,928 51,087

980,062 928,393
Refer to Note 23 for details of tax payables.
(i) These certificates of deposits bear interest rate of 0.00% per annum (2017: 0.00%).
(ii) These bonds and certificates of deposits bear interest rates ranging from 5.50% to 8.20% per annum (2017: 5.60% to 8.20%).
(iii) These bonds bear interest rates ranging from 8.20% to 8.80% per annum (2017: 7.73% to 8.80%).
23. OBLIGATIONS TO THE STATE BUDGET VND million

INCURRED DURING THE YEAR

OPENING CLOSING
BALANCE PAYABLES ADJUSTMENT PAID BALANCE

Value added tax 10,406 179,588 2 (173,916) 16,080

Corporate income tax 866,900 2,185,246 3,666 (2,140,758) 915,054
Other taxes 51,087 546,669 (344) (548,484) 48,928

Taxes payable 928,393 2,911,503 3,324 (2,863,158) 980,062

ANNUAL REPORT 2018 ACHIEVING DREAMS 157

FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

23. OBLIGATIONS TO THE STATE BUDGET (continued) 24. CAPITAL AND RESERVES
23.1 Current corporate income tax 24.1 Statement of changes in equity
Current corporate income tax payables are determined based on taxable income of the current year. Taxable income may be For the year ended 31 December 2018: VND million
different from the amount reported in the consolidated income statement since taxable income excludes income which are
eligible for tax or expenses which are subtracted in prior years due to the differences between the Bank’s accounting policies CHARTER
and the current tax policies, and also excludes tax-exempted income and non-deductible expenses. The current corporate CAPITAL
SUPPLE- NON-CON-
income tax payable of the Bank is calculated based on the statutory tax rates applicable at the end of the year. CHARTER SHARES TREASURY MENTARY FINANCIAL OTHER TOTAL RETAINED TROLLING
CAPITAL PREMIUM SHARES RESERVE RESERVE RESERVES RESERVES EARNINGS INTERESTS TOTAL
The tax returns filed by the Bank are subject to examination by the tax authorities. As the application of tax laws and regulations
is susceptible to varying interpretations, the amounts reported in the consolidated financial statements could change at a later
As at 1 January 2018 11,655,307 2,165,058 (4,043,249) 3,983,752 2,172,702 474 6,156,928 10,996,701 - 26,930,745
date upon final determination by the tax authorities.
Capital increase 23,310,615 (13,986,369) - (3,496,592) - - (3,496,592) (5,827,654) 58,201 58,201
Provision for current corporate income tax for the year ended 31 December 2018 is computed as follows: Net profit for the year - - - - - - - 8,462,775 11,222 8,473,997
Sale of treasury shares - 12,297,928 4,043,249 - - - - - - 16,341,177
2018 2017 Appropriation to reserves - - - 408,270 808,721 - 1,216,991 (1,216,885) (106) -
VND MILLION VND MILLION
Appropriation to bonus
Profit before tax 10,661,016 8,036,297 and welfare fund - - - - - - - (20,000) - (20,000)
Minus: Utilization of reserves - - - - (59) - (59) - - (59)
- Non-taxable dividend income (275) (334) Other movements - - - (3,141) (6,281) - (9,422) 8,066 - (1,356)
- Income transferred from previous year (144,636) -
- Other non-taxable income - (682) As at 31 December 2018 34,965,922 476,617 - 892,289 2,975,083 474 3,867,846 12,403,003 69,317 51,782,705
- Temporary differences arising from the previous year - (129,430)
- Prior year non-deductible expense reverted or deductible this year (190,213) (268,418)
Add: For the year ended 31 December 2017: VND million
- Non-deductible expenses 548,123 239,978
- Adjustment to profit for consolidation purpose 12,304 27,833
RESERVE
TO SUP-
Taxable corporate income 10,886,319 7,905,244 CHARTER SHARES TREASURY PLEMENT FINANCIAL OTHER TOTAL RETAINED
- Corporate income tax expense calculated on taxable income of current year 2,177,264 1,581,049 CAPITAL PREMIUM SHARES CAPITAL RESERVE RESERVES RESERVES EARNINGS TOTAL
- Adjustment for under provision of corporate income tax expense in prior year 7,982 (16,233)
As at 1 January 2017 8,878,079 - - 3,658,696 1,560,012 474 5,219,182 5,489,215 19,586,476
Current corporate income tax expense for the year 2,185,246 1,564,816 New shares issuance 700,000 1,399,999 - - - - - - 2,099,999
Capital increase from convertible bonds 2,077,228 765,059 - - - - - - 2,842,287
Opening corporate income tax payable 866,900 336,613 Net profit for the year - - - - - - - 6,445,595 6,445,595
Corporate income tax adjusted for prior years 3,666 - Buy treasury shares - - (4,043,249) - - - - - (4,043,249)
Corporate income tax paid for the year (2,140,758) (1,034,529) Appropriation to reserves - - - 325,056 612,953 - 938,009 (938,009) -
Utilization of reserves - - - - (263) - (263) - (263)
Closing corporate income tax payable 915,054 866,900 Other movements - - - - - - - (100) (100)

As at 31 December 2017 11,655,307 2,165,058 (4,043,249) 3,983,752 2,172,702 474 6,156,928 10,996,701 26,930,745
23.2 Applicable tax rate
The Bank’s income tax rate for this year is 20% (2017: 20%).

23.3 Deferred corporate income tax

2018 2017
VND MILLION VND MILLION

Deferred corporate income tax expense arising from:

- Deductible temporary tax differences (1,773) (25,886)

ANNUAL REPORT 2018 ACHIEVING DREAMS 159

FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

24. CAPITAL AND RESERVES (continued)

25. INTEREST AND SIMILAR INCOME
24.2 Share capital
2018 2017
Breakdown of share capital at the reporting date:
VND MILLION
VND MILLION

Interest income from deposits 606,159 332,772

31 DECEMBER 2018 31 DECEMBER 2017 Interest income from loans
VND MILLION VND MILLION
15,460,433 13,366,312
Income from debt investment securities 4,140,607 3,532,332
Charter capital 34,965,922 11,655,307 Income from guarantee services 312,998 280,709
Share premium 476,617 2,165,058 Other income from credit activities 630,025 82,379
Treasury shares - (4,043,249)
21,150,222 17,594,504
35,442,539 9,777,116

Number of shares at the reporting date: 26. INTEREST AND SIMILAR EXPENSES
31 DECEMBER 2018 31 DECEMBER 2017 2018 2017
VND MILLION VND MILLION

Registered share capital 3,496,592,160 1,165,530,720 Interest expenses for deposits 8,233,723 7,645,664
Issued share capital Interest expenses for borrowings 436,842 317,362
Ordinary shares 3,496,592,160 1,165,530,720 Interest expenses for valuable papers issued 1,353,122 701,066

10,023,687 8,664,092
Movement of number of shares in the year:

2018 2017
27. NET FEES AND COMMISSION INCOME
Shares in circulation
Ordinary shares at 1 January 993,177,375 887,807,871 2018 2017
VND MILLION VND MILLION
Ordinary shares issued in the year 2,331,061,440 70,000,000 (RECLASSIFIED)
Convertible bond converted in the year - 207,722,849
Fees and commission income from 4,451,721 4,519,685
Buy treasury share in the year - (172,353,345)
Settlement and cash services 1,763,054 1,465,532
Sell treasury share in the year 172,353,345 -
Cashiering services 2,523 1,355
Trustee and agency services 212,520 1,543,389
Ordinary shares at 3031 December 3,496,592,160 993,177,375
Consulting services 35,469 3,537
Bancassurance services 722,481 512,882
Nominal value of the Bank’s ordinary share is VND 10,000. Each share is entitled to one vote at General Shareholders Meetings Securities issuance guarantee services 1,160,413 374,551
of the Bank. All shareholders are entitled to receive dividends as declared from time to time. All ordinary shares are ranked Brokerage services 118,572 50,676
equally with regard to the Bank’s residual assets. Other services 436,689 567,763
During the year, the Bank sold 14,699,730 treasury shares to their employees under Employee Stock Ownership Plan program Fees and commission expenses for (915,737) (593,601)
and 157,653,615 treasury shares to foreign investors. Settlement and cash services (517,780) (277,686)
The Bank increased its charter capital from VND 11,655,307 million to VND 34,965,921 million by way of issuing ordinary Cashiering services (58,102) (53,905)
shares using owner’s equity pursuant to Decision No. 1624/QD-NHNN dated 10 August 2018 granted by the SBV, Official Letter Brokerage services (30,526) (11,247)
No. 4331/UBCK-QLCB dated 12 July 2018 issued by the State Securities Commission and Business Registration Certificate Other services (309,329) (250,763)
with business code No. 0100230800 amended for the 50th time on 10 August 2018 by Hanoi Department of Planning and
Development. 3,535,984 3,926,084

24.3 Dividends
Dividends payout shall be decided at Annual General Shareholders Meeting.

ANNUAL REPORT 2018 ACHIEVING DREAMS 161

FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

28. NET GAIN FROM TRADING FOREIGN CURRENCIES 2018 2017 32. INCOME FROM INVESTMENTS IN OTHER ENTITIES
VND MILLION VND MILLION
2018 2017
Income from trading of foreign currencies 1,879,317 1,105,028 VND MILLION
VND MILLION

Income from foreign exchange trading 1,030,351 193,142 Dividends received for the year from other long-term investment 275 334
Income from currency derivatives 848,966 911,886 Proceeds from the liquidation of the subsidiary (*) 894,428 -
Proceeds from the liquidation of other long-term investments - 355,192
Expenses for trading of foreign currencies (1,645,566) (826,443)
Expenses for foreign exchange trading (154,420) (244,100) 894,703 355,526
Expenses for currency derivatives (1,491,146) (582,343)
(*) This is the income from the divestment of the Bank’s entire capital in Techcom Finance Limited One Member Company.
233,751 278,585

29. NET GAIN FROM SECURITIES HELD-FOR-TRADING 2018 2017 33. OPERATING EXPENSES NOTES 2018 2017
VND MILLION
VND MILLION
VND MILLION VND MILLION
Income from trading of securities held-for-trading 350,135 539,888 (RECLASSIFIED)

Expenses for trading of securities held-for-trading (187,865) (137,419) Salaries and related expenses 3,239,958 2,594,878
Provision reversed/(made) for credit risk of unlisted corporate bonds (Note 8) 3,702 (2,961) Publication, marketing and promotion 300,951 263,412
Provision reversed/(made) for diminution in value of securities held-for-trading Office and asset rental 461,748 441,778
(Note 8) 2,461 (2,778) Depreciation and amortization of fixed assets 259,603 281,141
Tax, duties and fees 102,603 77,426
168,433 396,730 Tools and equipment expenses 87,907 51,593
Telecommunication expenses 39,694 35,469
Expenses for maintenance and repair of assets 210,795 218,704
30. NET GAIN FROM INVESTMENT SECURITIES 2018 2017 Utilities expenses 67,513 53,710
VND MILLION
VND MILLION
Expenditure on payment of insurance premium for customers’ deposits 193,813 166,187
Income from trading of investment securities 1,303,955 1,165,121 Per diem expenses 99,747 71,397
Expenses for trading of investment securities (389,655) (210,981) Provision reversed for long-term investments 13.2 (1,741) (2,525)
Provision made for credit risk of unlisted corporate bonds (Note 12.4) (169,734) (82,564) Goodwill amortization expenses 16 - 9,882
Provision reversed/(made) for diminution in value of investment securities Provision made for other assets (1,454) 69
(Note 12.4) 12,019 (15,816) - Provision reversed for diminution of inventories 16 (1,498) (248)
- Provision made for other assets 16 44 317
756,585 855,760 Consultancy expenses 151,611 114,182
Training and education expenses 34,930 29,455
Conference expenses 75,687 41,958
31. NET GAIN FROM OTHER OPERATING ACTIVITIES 2018 2017 Other operating expenses 519,142 363,749
VND MILLION
VND MILLION

Other operating income 3,147,169 1,963,425 5,842,507 4,812,465

Income from other derivatives 1,544,089 193,008
Recovery of loans previously written-off 1,422,895 1,116,820
Income from entrusted debt collection 25,826 71,659
Income from settlement of VAMC special bonds - 424,134
Other income 154,359 157,804

Other operating expenses (1,513,392) (248,534)

Expenses for other derivatives (1,228,491) (128,764)
Other expenses (284,901) (119,770)

1,633,777 1,714,891

ANNUAL REPORT 2018 ACHIEVING DREAMS 163

FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

34. PROVISION EXPENSES FOR CREDIT LOSSES 36. CASH AND CASH EQUIVALENTS
NOTES 2018 2017 31 DECEMBER 2018 31 DECEMBER 2017
VND MILLION VND MILLION
VND MILLION
VND MILLION

General provision made for loans to customers 10 164,184 59,726 Cash and gold 2,606,467 2,344,362
Specific provision made for loans to customers 10 2,889,508 2,077,770 Balances with the State Bank of Vietnam 10,555,483 4,279,431
Provision (reversed)/made for loan purchases 11 (78) 787 Balances with other credit institutions with
Provision made for VAMC special bonds 12.4 - 1,663,766 original terms of three months or less 24,037,029 16,057,406
Provision reserved for receivables from loans sold contract 16 (1,220,903) (193,809)
Provision made for receivables from deferred letters of credit 16 12,675 986 37,198,979 22,681,199
Provision made for other assets bearing credit risk 16 859 -

1,846,245 3,609,226 37. NEW PURCHASES AND LIQUIDATION OF SUBSIDIARIES

DATA RELATING TO NEW PURCHASES AS PRESENTED IN THE CONSOLIDATED
35. EARNINGS PER SHARE AND LIQUIDATION OF SUBSIDIARIES FINANCIAL STATEMENTS
Basic earnings per share are calculated by dividing the profit or loss after tax which is attributable to shareholders holding
ordinary shares of the Bank (after adjusting for appropriation to bonus and welfare fund) by the weighted average of the number CURRENT YEAR PREVIOUS YEAR CURRENT YEAR (*) PREVIOUS YEAR
VND MILLION VND MILLION VND MILLION VND MILLION
of common shares outstanding for the year.
Total value of acquisition or disposals (1) 1,750,000 - 1,750,000 -
Diluted earnings per share are calculated by dividing the profit or loss after tax which is attributable to shareholders holding
Portion of acquisition or disposals paid in
ordinary shares of the Bank (after adjusting for the dividends of convertible preferred shares) by the total of weighted average
cash and cash equivalents 1,750,000 - 1,750,000 -
number of ordinary shares outstanding for the year and the weighted average number of ordinary shares which are issued in
Cash and cash equivalents in
case all potential ordinary shares which have a diluting impact are converted into ordinary shares.
subsidiaries or other business entities
The Bank uses the following information to calculate basic earnings per share: acquired or disposed (2) 743,190 - 743,190 -
Value of assets and liabilities which are
2018 2017 not cash and cash equivalents in
subsidiaries or other business entities
Profit after tax attributable to ordinary shareholders (VND million) 8,462,775 6,445,595 acquired or disposed during the year (3) 1,368 - - -
Adjusted for appropriation to bonus and welfare fund (20,000) - - Fixed assets 283 - - -
Profit after tax attributable to ordinary shares shareholders for calculating - Other assets 4,585 - - -
basic earnings per share (VND million) 8,442,775 6,445,595 - Other liabilities (3,500) - - -

Adjusted profit after tax attributable to ordinary shareholders for Total ((1)-(2)-(3)) 1,005,442 - 1,006,810 -
calculation of diluted earnings per share (VND million) 8,442,775 6,445,595
(*) As after the disposal, Techcom Finance Limited One Member Company (Techcom Finance) is no longer a subsidiary of the
Weighted average number of ordinary shares used for calculation of basic
Bank. Therefore, the assets and liabilities of Techcom Finance are not presented in the consolidated financial statements of
earnings per share 2,212,707,968 835,039,242
the Bank as at 31 December 2018.
Effect of upcoming shares issuance - -

Weighted average number of ordinary shares used for calculation of

diluted earnings per share 2,212,707,968 835,039,242

Earnings per share (VND)

Basic earnings per share 3,816 7,719

ANNUAL REPORT 2018 ACHIEVING DREAMS 165

FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

38. EMPLOYEE BENEFITS 40. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES

2018 2017 Related party transactions are transactions undertaken with other entities to which the Bank is related. A party is considered to
VND MILLION VND MILLION
RESTATED
be related to the Bank if:
I. Average number of employees for the year (person) 9,043 8,058 (a) Enterprises that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common
control with, the reporting Bank (including holding companies, subsidiaries and fellow subsidiaries);
II. Employees’ remuneration (b) Associates (see Vietnamese Accounting Standards No. 07 “Accounting for Investments in Associates”);
1. Basic salaries 2,710,518 2,069,106 (c) Individuals owning, directly or indirectly, an interest in the voting power of the reporting Bank that gives them significant
2. Allowances and other income 529,440 525,772 influence over the Bank, and close members of the family of any such individual. Close members of the family of an
3. Total (1+2) 3,239,958 2,594,878 individual are those that may be expected to influence, or be influenced by, that person in their dealings with the Bank, for
4. Average salary/month 25 21 examples: parent, spouse, progeny, siblings, etc;
5. Average remuneration/month 30 27
(d) Key management personnel having authority and responsibility for planning, directing and controlling the activities of the
reporting Bank, including directors and officers of the Bank and close members of the families of such individuals
(e) Enterprises in which a substantial interest in the voting power is owned, directly or indirectly, by any person described in
39. ASSETS, VALUABLE PAPERS, MORTGAGED, PLEDGED, DISCOUNTED AND REDISCOUNTED (c) or (d) or over which such person is able to exercise significant influence. This includes enterprises owned by directors
or major shareholders of the reporting Bank and enterprises that have a member of key management in common with the
39.1 Assets, valuable papers, mortgaged, pledged, discounted and rediscounted to the Bank
reporting Bank.
31 DECEMBER 2018 31 DECEMBER 2017
VND MILLION VND MILLION
Bond transactions VND million
From customers 524,374,576 406,535,584
Real estate 222,246,316 182,200,811 2018 2017
Movable assets 52,218,872 52,230,799
Valuable papers 122,795,518 72,913,916 OPENING CLOSING OPENING CLOSING
Other collaterals 127,113,870 99,190,058 RELATED PARTY RELATIONSHIP BALANCE INCREASE DECREASE BALANCE BALANCE INCREASE DECREASE BALANCE

From other credit institutions 4,282,349 1,733,143 Masan Group Corporation

Valuable papers 4,273,905 1,724,979 Joint Stock Company (i)
Other collaterals 8,444 8,164 Face value 274,155 913,109 (1,148,772) 38,492 94,000 3,562,434 (3,382,279) 274,155
Interest receivables 2,864 8,294 (10,784) 374 21 18,527 (15,684) 2,864
528,656,925 408,268,727
Masan Corporation Joint
Stock Company (ii)
Face value 6,012 2,847,892 (2,853,904) - - 1,735,000 (1,728,988) 6,012
39.2 Assets, valuable papers, mortgaged, pledged, discounted and rediscounted by the Bank Interest receivables 16 3,225 (3,241) - - 27 16
(11)

31 DECEMBER 2018 31 DECEMBER 2017 Nui Phao Mining

VND MILLION VND MILLION
Company Limited (ii)
Investment securities 2,010,000 17,662,700 Face value - 1,725,319 (1,178,021) 547,298 - - -
-
Other assets - 1,930,000 Interest receivables - 20,439 (798) 19,641 - - -
-

2,010,000 19,592,700 Masan Resources Joint

Stock Company (ii)
Face value - 1,346,161 (1,064,071) 282,090 - - -
-
Interest receivables - 1,636 (472) 1,164 - - -
-

ANNUAL REPORT 2018 ACHIEVING DREAMS 167

FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

40. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES (continued) 40. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES (continued)
Loans to customers VND million Demand deposits from customers VND million

2018 2017 RELATED PARTY RELATIONSHIP 31 DECEMBER 2018 31 DECEMBER 2017

OPENING CLOSING OPENING CLOSING
The European Plastic Window Joint Stock Company (ii) 10,670 23,793
RELATED PARTY RELATIONSHIP BALANCE INCREASE DECREASE BALANCE BALANCE INCREASE DECREASE BALANCE
Masan Group Corporation Joint Stock Company and
a group of related companies (iv) 67,984 64,877
The European Plastic
Members of the Board of Directors, Supervision,
Window Joint Stock
Management and other related individuals (i), (iii) 200,648 172,702
Company (ii)
Loans to customers 394,097 652,705 (559,466) 487,336 407,606 285,092 (298,601) 394,097
Interest receivables 1,978 41,343 (41,192) 2,129 1,225 32,075 (31,322) 1,978
Remuneration of Board of Directors, Supervision and Management VND million
Nui Phao Mining
Company Limited (ii) AMOUNT
Loans to customers 890,802 1,648,913 (1,381,555) 1,158,160 681,982 1,192,178 (983,358) 890,802
Interest receivables 696 47,421 (47,258) 859 430 38,461 (38,195) 696 RELATED PARTY 2018 2017

Vietnam Investment T&M Remuneration of Board of Directors, Supervision and Management

Joint Stock Company (iii) Remuneration of Board of Directors and Supervision 31,099 28,903
Loans to customers 590,000 - - 590,000 - 590,000 - 590,000 Remuneration of Board of Management 154,886 65,511
Interest receivables 3,278 61,314 (61,694) 2,898 - 3,278 - 3,278
(i) Shareholder has its representative in the Board of Directors of the Bank
(ii) Related party has its representative in the Board of Directors of the Bank
Term deposits from customers VND million (iii) Related party has its representative related to members of the Board of Directors, or Board of Management or Board of
Supervision of the Bank
2018 2017
(iv) Masan Group Corporation Joint Stock Company and a group of related companies of Masan Group Corporation Joint Stock
OPENING CLOSING OPENING CLOSING Company have its representative in the Board of Directors of the Bank or its representative related to members of the Board
RELATED PARTY RELATIONSHIP BALANCE INCREASE DECREASE BALANCE BALANCE INCREASE DECREASE BALANCE of Directors, or Board of Management or Board of Supervision of the Bank

Masan Group Corporation

Joint Stock Company and a 41. GEOGRAPHICAL DISPERSION OF ASSETS, LIABILITIES AND OFF-BALANCE SHEET ITEMS
group of related companies (iv)
Term deposits from customers 2,231,676 16,999,304 (18,578,058) 652,922 3,972,472 14,499,276 (16,240,072) 2,231,676 Concentration of assets, liabilities and off-balance sheet items by geographical region of the Bank’s partners as at 31 December
Interest payables 4,058 98,283 (100,151) 2,190 11,965 91,318 (99,225) 4,058 2018 are as follows:

Members of the Board of TRADING AND

Directors, Supervision, TOTAL CONTINGENT INVESTMENT
Management and other TOTAL LOANS DEPOSITS LIABILITIES DERIVATIVES (*) SECURITIES
related individuals (i), (iii) VND MILLION VND MILLION VND MILLION VND MILLION VND MILLION

Term deposits from customers 396,937 6,148,743 (5,499,570) 1,046,110 297,706 5,958,388 (5,859,157) 396,937 Domestic 171,289,840 229,646,106 108,612,258 150,969,292 94,444,551
Interest payables 8,259 68,329 (64,520) 12,068 2,772 30,474 (24,987) 8,259 Overseas 39,228 741,881 - - -

171,329,068 230,387,987 108,612,258 150,969,292 94,444,551

(*) Nominal contract value

ANNUAL REPORT 2018 ACHIEVING DREAMS 169

FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

42. RISK MANAGEMENT DISCLOSURE 43. CREDIT RISK (continued)

This section provides details of the Bank’s exposure to risks and describes the policies, the methods used by management to
control risks. The most important types of financial risks to which the Bank is exposed are credit risk, liquidity risk and market risk. 43.1 Financial assets that are neither past due nor impaired
The Board of Directors has overall responsibility for the establishment and oversight of the Bank’s financial risk management Information about credit quality of financial assets that are neither past due nor impaired is as follows:
framework to facilitate its business activities to thrive safely and sustainably. 31 DECEMBER 2018 31 DECEMBER 2017
Having taken that responsibility, the Board of Directors appropriately promulgates risk management policies and strategies, VND MILLION VND MILLION

establishes business limit, directly approves high-value business transactions in accordance with both legal and internal Balances with and credit granting to other credit institutions – gross 35,559,363 30,155,807
requirement, and determine organizational structure and key managing directors. Securities held-for trading – gross 7,434,265 6,668,223
Risk management strategies and policies are adhered to the Bank’s Charter and General Shareholders’ Meeting resolution. Loans to customers – gross 154,548,122 155,931,825
Investment securities – gross 86,260,036 50,531,801
Audit and Risk Committee (“ARCO”) is established by the Board of Directors for the purpose of undertaking a number of Others financial assets – gross 12,785,103 7,732,565
functions and tasks related to the audit, supervising and monitoring risk management of the Bank’s operation which are assigned/
authorized by the Board of Directors. 296,586,889 251,020,221
ARCO is responsible for promulgating and monitoring risk management framework, risk appetites and risk management policies
in the Bank’s operation activities and approving market risk limit, credit risk limit for each industry, business line and other general The Bank’s financial assets, which are neither past due nor impaired, include loans in Group 1 (current); securities, receivables
risk limits of the Bank. and other financial assets which are not overdue.
The Bank believes that those financial assets can be fully and timely recovered in the future.
43. CREDIT RISK
The Bank is subject to credit risk through its lending, investing activities and in cases where it acts as an intermediary on behalf of 43.2 Financial assets that are past due but not impaired
customers or other third parties or issues guarantees. The risk that counterparties might default on their obligations is monitored Information about financial assets that are past due but not impaired as at 31 December 2018 is as follows:
on an ongoing basis. To manage the level of credit risk, the Bank attempts to deal with counterparties with good credit standing, VND million
and, when appropriate, obtains collateral. The Bank’s primary exposure to credit risk arises through its loans. The amount of
OVERDUE
credit exposure in this regard is represented by the carrying amounts of the assets on the consolidated balance sheet. In addition,
the Bank is exposed to off-balance sheet credit risk through commitments to extend credit and guarantees issued. UNDER FROM 91- FROM 181- OVER
The Bank manages credit risk by using various tools: development and issuance of internal policies and regulations on credit risk 90 DAYS 180 DAYS 360 DAYS 360 DAYS TOTAL
management; development of credit procedures and manuals; regular review of credit risk; development of a credit rating system
and loan classification; setting up authorization levels within the credit approval process. Loans to customers 341,517 46,305 57,952 366,114 811,888
The following table presents the maximum exposure to credit risk from balance sheet, before taking account of any collaterals Investment securities 62,709 - 125,419 62,709 250,837
held or other credit risk enhancements: Other financial assets - - - 211,054 211,054

31 DECEMBER 2018 31 DECEMBER 2017 404,226 46,305 183,371 639,877 1,273,779

VND MILLION VND MILLION

Balances with and credit granting to other credit institutions – gross 35,559,363 30,155,807 These past-due loans are not impaired due to they are secured by adequate collateral assets.
Securities held-for-trading – gross 7,583,090 6,775,118
Loans to customers – gross 159,939,217 160,849,037
Debts purchased – gross 1,682 12,092
Investment securities – gross (*) 86,861,457 51,513,882
Others financial assets – gross 13,035,877 9,892,860

302,980,686 259,198,796

(*) Excluding equity securities

ANNUAL REPORT 2018 ACHIEVING DREAMS 171

FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

43. CREDIT RISK (continued) 44. MARKET RISK

43.2 Financial assets that are past due but not impaired (continued) 44.1 Interest rate risk
Interest rate risk arises when there is a difference of term in repricing of interest rate between assets and liabilities. All loan
Information about financial assets that are past due but not impaired as at 31 December 2017 is as follows: activities, mobilization activities, investment activities of the Banks create interest rate risk.
VND million
OVERDUE On the basis of the state of “interest rate sensitivity” according to periodic changes in interest rates, the items which are assets,
equity and off-balance sheet assets are classified by terms into the table “interest gap” of the whole Bank.
UNDER FROM 91- FROM 181- OVER Interest rate repricing terms for items with fixed interest rates are the remaining period until maturity date of assets, as for
90 DAYS 180 DAYS 360 DAYS 360 DAYS TOTAL floating interest rates are the remaining period until the nearest repricing date.
The followings assumptions and conditions are applied when constructing “interest gap” table:
Loans to customers 383,681 61,811 91,820 396,460 933,772
Investment securities 62,709 - 62,709 - 125,418 Cash and gold, capital contribution, long-term investments, fixed assets, other receivables and other liabilities are classified
Other financial assets - 19,450 - 211,054 230,504 as non-interest bearing items;
Balances with the State Bank of Vietnam, demand balances with other credit institutions, demand deposits are classified as
446,390 81,261 154,529 607,514 1,289,694 non-interest bearing items;
Interest rate repricing terms of securities held-for-trading and investment securities are based on the actual maturity date at
the reporting date if such securities have a fixed interest rate or based on the nearest repricing date if such securities have a
43.3 Financial assets that are impaired floating interest rate;
Information about financial assets which are impaired as at 31 December 2018 is as follows: Interest rate repricing of balances with and credit granting to other credit institutions; loans to customers; deposits and
VND million borrowings from the Government and the State Bank of Vietnam; deposits and borrowings from other financial institutions
OVERDUE and credit institutions, deposits from customers are identified as follows:
- Items with fixed interest rates for the duration of contract: interest rate repricing terms based on actual maturity date since
NOT PAST UNDER FROM 91- FROM 181- OVER reporting date of the consolidated financial statements;
DUE YET 90 DAYS 180 DAYS 360 DAYS 360 DAYS TOTAL - Items with floating interest rates: interest rate repricing terms based on the nearest repricing date since the reporting date
of the consolidated financial statements;
Loans to customers - 2,246,129 191,453 804,558 1,337,067 4,579,207
Debts purchased - - - - 1,682 1,682 Interest rate repricing of valuable papers issued based on the actual maturity date of each type of valuable papers if there is
Other financial assets - - - - 39,720 39,720 a fixed interest rate or the nearest repricing date if there is a floating interest rate;
Interest rate repricing of other borrowed and entrusted funds are based on actual maturity date at the reporting date of
- 2,246,129 191,453 804,558 1,378,469 4,620,609 consolidated financial statement of each other borrowed and entrusted funds if the interest rate is fixed or based on the
nearest repricing date if the interest rate is floating.

Interest rate sensitivity

Assuming that all other variables remain constant, the effects of fluctuation in interest rates of the items with floating interest
Information about financial assets which are impaired as at 31 December 2017 is as follows: rates on profit before tax and shareholders’ equity of the Bank is as follows:
VND million
OVERDUE EFFECT ON

NOT PAST UNDER FROM 91- FROM 181- OVER INCREASE IN PROFIT
DUE YET 90 DAYS 180 DAYS 360 DAYS 360 DAYS TOTAL INTEREST RATE BEFORE TAX EQUITY
VND MILLION VND MILLION

Loans to customers - 1,949,605 513,586 363,747 1,156,502 3,983,440 As at 31 December 2018

Debts purchased - - 10,410 - 1,682 12,092 USD 1.50% 61,170 48,936
Other financial assets 1,862,038 - - - 67,753 1,929,791 VND 3.00% 2,357,113 1,885,690

1,862,038 1,949,605 523,996 363,747 1,225,937 5,925,323

The table in the next page presents the assets and liabilities of the Bank based on “interest gap” at the reporting date.

ANNUAL REPORT 2018 ACHIEVING DREAMS 173

FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

44. MARKET RISK (continued) 44. MARKET RISK (continued)

44.1 Interest rate risk (continued) VND million 44.2 Currency risk (continued)
INTEREST RE-PRICING FOR THE YEAR Exchange rate sensitivity
NON-
Assuming that all variables remain constant, the following table shows the effects on profit before tax and equity of the Bank due
INTEREST UP TO FROM 1 TO FROM 3 TO FROM 6 TO OVER 1 TO OVER
OVERDUE BEARING 1 MONTH 3 MONTHS 6 MONTHS 12 MONTHS 5 YEARS 5 YEARS TOTAL to possible changes in exchange rates. Risk due to changes of exchange rates to other currencies of the Bank is not significant.
Assets
Cash and gold - 2,606,467 - - - - - - 2,606,467 EFFECTS ON
Balances with the SBV - 10,555,483 - - - - - - 10,555,483
Balances with and credit granting to LEVEL OF PROFIT
other credit institutions (*) - 8,956,048 13,987,497 8,325,791 2,466,686 1,823,341 - - 35,559,363 INCREASE BEFORE TAX EQUITY
Securities held-for-trading (*) - - - 1,357,800 585,000 205,115 2,153,431 3,281,744 7,583,090 VND MILLION VND MILLION
In which:
Government bonds and bonds As at 31 December 2018
guaranteed by the Government for USD 1.00% 3,338 2,670
settlement - - - - - - 2,153,431 3,281,744 5,435,175 EUR 1.00% (8) (6)
Loans to customers (*) 5,391,095 - 67,973,058 25,037,221 23,564,142 14,310,803 20,795,241 2,867,657 159,939,217 Gold 3.00% 386 309
Debts purchased (*) 1,682 - - - - - - - 1,682
Investment securities (*) 250,837 671,104 13,027,067 31,194,711 17,706,548 6,114,646 12,438,991 5,457,557 86,861,461
In which: The following table shows the analysis of assets and liabilities in foreign currencies translated into VND at 31 December 2018.
Government bonds and bonds
guaranteed by the Government for
OTHER
settlement 250,837 668,061 1,988,667 1,599,500 1,157,709 710,296 8,333,327 5,309,557 20,017,954
Long-term investments (*) - 12,883 - - - - - - 12,883 USD EUR GOLD CURRENCIES
Fixed assets and investment property - 2,914,920 - - - - - - 2,914,920 EQUIVALENT EQUIVALENT EQUIVALENT EQUIVALENT TOTAL
VND MILLION VND MILLION VND MILLION VND MILLION VND MILLION
Other assets (*) 250,774 17,526,870 - - - - - - 17,777,644
Assets
Total assets 5,894,388 43,243,775 94,987,622 65,915,523 44,322,376 22,453,905 35,387,663 11,606,958 323,812,210 Cash and gold 317,505 55,879 12,875 99,061 485,320
Balances with the SBV 1,442 - - - 1,442
Liabilities
Due from the Government and the SBV - - 5,025,027 1,000,000 - - - - 6,025,027
Balances with and credit granting to other
Deposits and borrowings from other credit institutions (*) 13,725,401 455,883 - 488,195 14,669,479
financial institutions and credit institutions - 5,037,660 24,432,957 3,058,810 1,606,533 1,419,123 866,976 3,501 36,425,560 Loans to customers (*) 9,338,756 13,974 - - 9,352,730
Deposits from customers - 58,778,812 52,794,532 33,525,858 26,465,838 25,277,518 4,554,077 17,897 201,414,532 Other assets (*) 3,776,750 754,002 - 36,752 4,567,504
Derivatives and financial liabilities - - 15,308,314 7,491,852 (1,605,644) (3,826,665) (17,057,544) - 310,313
Valuable papers issued - - 2,220,953 2,740,200 1,595,500 5,628,677 992,629 - 13,177,959 Total assets 27,159,854 1,279,738 12,875 624,008 29,076,475
Other liabilities - 11,852,845 - - - - - - 11,852,845

Total liabilities - 75,669,317 99,781,783 47,816,720 28,062,227 28,498,653 (10,643,862) 21,398 269,206,236 Liabilities
Deposits and borrowings from other financial
Interest sensitivity gap 5,894,388 (32,425,542) (4,794,161) 18,098,803 16,260,149 (6,044,748) 46,031,525 11,585,560 54,605,974 institutions and credit institutions 6,713,214 754,005 - 26,031 7,493,250
Deposits from customers 12,538,067 494,912 - 539,816 13,572,795
(*) These amounts exclude provisions Derivatives and other financial liabilities 2,749,867 22,572 - 19,734 2,792,173
Other liabilities 662,829 9,000 - 13,438 685,267
44.2 Currency risk
Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The Bank Total liabilities 22,663,977 1,280,489 - 599,019 24,543,485
was incorporated and operates in Vietnam with VND as its reporting currency. The major currency in which the Bank transacts
is VND. The Bank’s asset - liabilities structure included different types of currencies (such as USD, EUR, AUD, ect), which is the FX position on balance sheet 4,495,877 (751) 12,875 24,989 4,532,990
main cause of currency risk. The Bank has set limits on positions by currency based on internal risk assessment process and FX position off-balance sheet (4,162,093) - - (4,511) (4,166,604)
regulations of the SBV. Currency positions are monitored on a daily basis and hedging strategies used to ensure positions are
maintained within established limits. Total FX position on and off-balance sheet 333,784 (751) 12,875 20,478 366,386

(*) These amounts exclude provisions

ANNUAL REPORT 2018 ACHIEVING DREAMS 175

FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

44. MARKET RISK (continued) 44. MARKET RISK (continued)

44.3 Liquidity risk 44.3 Liquidity risk (continued) VND million
Liquidity risk arises in the general funding of the Bank’s activities and in the management of positions. It includes both the risk
of being unable to fund assets at appropriate maturities and interest rates and the risk of being unable to liquidate an asset at a OVERDUE CURRENT
reasonable price and in an appropriate time frame.
UP TO 3 OVER 3 UP TO FROM 1 TO FROM 3 TO FROM 1 TO OVER 5
The maturity term of assets and liabilities represents the remaining period from the date of the consolidated financial statements MONTHS MONTHS 1 MONTH 3 MONTHS 12 MONTHS 5 YEARS YEARS TOTAL
to the contractual maturity date of assets and liabilities. Assets
Cash and gold - - 2,606,467 - - - - 2,606,467
The following assumptions and conditions are applied in the analysis of overdue status of the Bank’s assets and liabilities: Balances with the SBV - - 10,555,483 - - - - 10,555,483
Balances with the State Bank of Vietnam are classified as demand deposits which include compulsory deposits. The Balances with and credit granting to other
balance of compulsory deposits depends on the proportion and terms of the Bank’s deposits from customers; credit institutions (*) - - 22,943,545 8,325,791 4,290,027 - - 35,559,363
Securities held-for-trading (*) - - - 807,800 1,340,115 2,153,431 3,281,744 7,583,090
The maturity term of investment securities is calculated based on the maturity date of each category of securities. In which, In which:
securities issued/guaranteed by the Government, despite the classification based on residual maturity, they are considered Government bonds and bonds guaranteed
as liquid assets in the market that are readily convertible to known amounts of cash and subject to an insignificant risk of by the Government for settlement - - - - - 2,153,431 3,281,744 5,435,175
change in value; Loans to customers (*) 2,587,646 2,803,449 13,898,815 15,262,212 33,027,027 35,123,215 57,236,853 159,939,217
Debts purchased (*) - 1,682 - - - - - 1,682
The maturity term of balances with and credit granting to other credit institutions; and loans to customers is determined Investment securities (*) 62,709 188,128 2,029,330 1,741,340 39,509,525 32,453,561 10,876,868 86,861,461
on the maturity date as stipulated in contracts. The actual maturity term may be altered because loan contracts may be In which:
extended/prepaid; Government bonds and bonds guaranteed
by the Government for settlement 62,709 188,128 1,990,930 1,606,574 1,830,496 8,874,571 5,464,546 20,017,954
The maturity term of equity investments is considered as more than five years because these investments do not have Long-term investments (*) - - - - - - 12,883 12,883
specific maturity date; Fixed assets and investment property - - 95,239 1,143 14,642 337,039 2,466,857 2,914,920
Other assets (*) - 250,774 8,783,680 2,368,617 2,721,770 3,325,051 327,752 17,777,644
The maturity term of deposits and borrowings from financial institutions and credit institutions and deposits from customers
is determined based on features of these items or the maturity date as stipulated in contracts. Demand deposits are Total assets 2,650,355 3,244,033 60,912,559 28,506,903 80,903,106 73,392,297 74,202,957 323,812,210
transacted as required by customers and therefore being classified as current accounts, however, a large proportion of these
deposit types of customers remain stable at the Bank over one year. The maturity term of borrowings and term deposits is Liabilities
determined based on the maturity date in contracts. In fact, these amounts may be rotated and therefore they last beyond Due from the Government and the SBV - - 5,025,027 1,000,000 - - - 6,025,027
the original maturity date; Deposits and borrowings from other financial
and credit institutions - - 29,470,618 3,058,810 3,025,655 866,976 3,501 36,425,560
The maturity term of fixed assets is determined on the remaining useful life of assets; Deposits from customers - - 109,949,648 33,207,610 52,163,432 6,028,430 65,412 201,414,532
In which:
The maturity term of valuable papers issued is calculated based on the maturity date of each category of valuable papers;
Current accounts and marginal deposits - - 57,801,153 - - - - 57,801,153
The maturity term of other borrowed and entrusted funds is determined on the maturity date as stipulated in contracts as at Derivatives and other financial liabilities - - 34,406 (17,530) 165,418 128,019 - 310,313
the reporting date of each contract; Valuable papers issued - - 300,147 - 2,428,677 7,251,135 3,198,000 13,177,959
Other liabilities - - 8,866,885 869,593 1,444,217 663,706 8,444 11,852,845
The maturity term of other liabilities is determined on the actual maturity date of each liability.
The table in the next page shows the analysis of assets and liabilities of the Bank according to their maturities as at 31 Total liabilities - - 153,646,731 38,118,483 59,227,399 14,938,266 3,275,357 269,206,236
December 2018.
Net liquidity gap 2,650,355 3,244,033 (92,734,172) (9,611,580) 21,675,707 58,454,031 70,927,600 54,605,974

(*) These amounts exclude provisions

ANNUAL REPORT 2018 ACHIEVING DREAMS 177

FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

44. MARKET RISK (continued) 46. SEGMENT REPORT

44.4 Other market price risk Segment report by operating activities for the year ended 31 December 2018:

Securities held by the Bank are affected by market price risk arising from the uncertainty of future value of investment securities. VND million
Information about securities diminution at the reporting date as follows:
ASSETS TRADING FUND FINANCE ELIMINATION
CRITERIA BANK MANAGEMENT SECURITIES MANAGEMENT (**) (*) TOTAL
31 DECEMBER 2018 31 DECEMBER 2017
VND MILLION VND MILLION
I. Revenue 57,501,843 256,190 1,871,886 71,841 4,489 (1,054,380) 58,651,869
Securities held-for-trading – gross 148,825 106,895 1. Interest revenue 46,503,789 8,618 148,746 7,816 4,489 (48,590) 46,624,868
Investment securities – gross 350,584 856,663 Interest income from external 21,029,143 8,618 148,746 7,816 4,489 (48,590) 21,150,222
Interest income from internal 25,474,646 - - - - - 25,474,646
2. Operating revenue 3,020,828 - 1,369,491 64,025 - (2,623) 4,451,721
499,409 963,558 3. Other revenue 7,977,226 247,572 353,649 - - (1,003,167) 7,575,280

II. Expense (45,802,600) (234,874) (339,699) (21,634) (1,091) 255,290 (46,144,608)

1. Interest expense (35,480,409) (46,396) (34,797) - - 63,269 (35,498,333)
45. FINANCIAL ASSETS AND LIABILITIES Interest expenses to external (10,005,763) (46,396) (34,797) - - 63,269 (10,023,687)
Book value and fair value of financial assets of the Bank and its subsidiaries as at 31 December 2018 are as follows: Interest expenses to internal (25,474,646) - - - - - (25,474,646)
2. Depreciation and amortization
VND million expenses (216,594) (39,075) (3,845) (47) (33) (9) (259,603)
3. Operating expenses (10,105,597) (149,403) (301,057) (21,587) (1,058) 192,030 (10,386,672)
BOOK VALUE
FAIR VALUE OTHER FINAN-
Profit before provision expenses
THROUGH CIAL ASSETS/ for credit losses 11,699,243 21,316 1,532,187 50,207 3,398 (799,090) 12,507,261
PROFIT (LIABILITIES) Provision expenses for credit losses (1,843,873) 498 - - 1,047 (3,917) (1,846,245)
& LOSS HELD-TO- LOANS AND AVAILABLE- AT AMOR- TOTAL BOOK
STATEMENT MATURITY RECEIVABLES FOR-SALE TIZED COST VALUE FAIR VALUE Segment profit 9,855,370 21,814 1,532,187 50,207 4,445 (803,007) 10,661,016

Cash and gold - - 2,606,467 - - 2,606,467 2,606,467 III. Assets 318,620,217 1,425,218 4,351,052 119,921 - (3,527,467) 320,988,941
Balances with the SBV - - 10,555,483 - - 10,555,483 (*) 1. Cash and gold 2,606,467 - - - - - 2,606,467
Balances with and credit granting to other 2. Fixed assets 1,671,944 5,156 37,112 51 - 4,333 1,718,596
credit institutions - - 35,559,363 - - 35,559,363 (*) 3. Other assets 314,341,806 1,420,062 4,313,940 119,870 - (3,531,800) 316,663,878
Securities held-for-trading 7,583,090 - - - - 7,583,090 (*)
Loans to customers - - 159,939,217 - - 159,939,217 (*) IV. Liabilities 269,330,154 676,225 1,244,385 11,363 - (2,055,891) 269,206,236
Debts purchased - - 1,682 - - 1,682 1. External liabilities 269,317,572 676,225 1,244,385 11,363 - (2,055,891) 269,193,654
Available-for-sale securities - - - 66,625,261 - 66,625,261 (*) 2. Internal liabilities 12,582 - - - - - 12,582
Held-to-maturity securities - 20,236,200 - - - 20,236,200 (*)
Long-term investments - 12,883 - - - 12,883 (*)
Other financial assets - - 13,035,877 - - 13,035,877 (*) (*) Elimination of internal transactions
7,583,090 20,249,083 221,698,089 66,625,261 - 316,155,523
(**) On 12 March 2018, the Bank divested its entire capital in Techcom Finance Limited One Member Company. Hence,
Techcom Finance's assets and liabilities are no longer part of the Bank's assets and liabilities as at 31 December 2018.
Due from the Government and the SBV - - - - 6,025,027 6,025,027 (*)
Deposits and borrowings from other
financial institutions and credit institutions - - - - 36,425,560 36,425,560 (*)
Deposits from customers - - - - 201,414,532 201,414,532 (*)
Derivatives and other financial liabilities 310,313 - - - - 310,313 (*)
Valuable paper issued - - - - 13,177,959 13,177,959 (*)
Other financial liabilities - - - - 9,127,529 9,127,529 (*)

310,313 - - - 266,170,607 266,480,920

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

ANNUAL REPORT 2018 ACHIEVING DREAMS 179

FINANCIAL REPORT | Notes to the consolidated financial statements B05/TCTD-HN

47. CORRESPONDING FIGURES 50. EVENTS AFTER THE CONSOLIDATED BALANCE SHEET DATE
Certain corresponding figures reported in the prior year have been reclassified to conform to the current year’s presentation: On 30 January 2019, Techcom Capital Management Company Limited has successfully transformed its legal form from a limited
company to a joint stock company under Establishment and Operating Licence No. 57/GP-UBCK issued by the State Security
2017 RECLASSIFICATION 2017 Commission of Vietnam dated 30 January 2019, replacing Establishment and Operating Licence No. 40/UBCK-GP issued by
VND MILLION VND MILLION VND MILLION
(AS PREVIOUSLY REPORTED) (RECLASSIFIED) the State Security Commission of Vietnam on 21 October 2008. There is no difference in term of permitted operating activities
CONSOLIDATED INCOME STATEMENT between these 2 official documents. Accordingly, the Company’s name is changed to Techcom Capital Management Joint Stock
Fees and commission expenses (*) (707,783) 114,182 (593,601) Company.
Operating expenses (*) (4,698,283) (114,182) (4,812,465) There is no other matter or circumstance that has arisen since the consolidated balance sheet date that has affected or may
significantly affect the operations of the Bank, the results of those operations or the state of affairs of the Bank that requires
CONSOLIDATED CASH FLOW disclosure in consolidated financial statements.
STATEMENT
Net fees and commission receipts (*) 3,747,154 114,182 3,861,336
Operating and salary expenses payments (*) (4,168,108) (114,182) (4,282,290) 51. EXCHANGE RATES OF APPLICABLE FOREIGN CURRENCIES AGAINST VIETNAM DONG

31 DECEMBER 2018 31 DECEMBER 2017

(*) Reclassify “Operating expenses” from “Fees and commission expenses”. VND VND

AUD 16,378 17,718

CAD 17,039 18,053
48. CHANGE IN PROFIT BEFORE TAX FOR THE YEAR
CHF 23,553 23,306
The consolidated profit before tax for the year ended 31 December 2018 of the Bank and its subsidiaries increases by CNY 3,372 3,490
VND2,624,719 million compared to that for the year ended 31 December 2017, equivalent to 32.66% due to the following reasons: DKK 3,553 3,660
EUR 26,529 27,246
PROFIT BEFORE TAX GBP 29,548 30,691
VND MILLION
HKD 2,962 2,907
Profit increase/(decrease) due to: JPY 211 202
Increase in net interest and similar income 2,196,123 NOK 2,669 2,766
Decrease in net fees and commission income (390,100) SEK 2,593 2,768
Decrease in net gain from trading of foreign currencies (44,834) SGD 17,025 16,979
Decrease in net gain from securities held for trading (228,297) THB 716 697
Decrease in net gain from investment securities (99,175) USD 23,195 22,425
Decrease in net gain from other operating activities (81,114) XAU 3,641,000 3,648,000
Increase in income from investments in other entities 539,177
Increase in operating expenses (1,030,042)
Decrease in provision expenses for credit losses 1,762,981

Profit before tax increased by: 2,624,719

49. SIGNIFICANT EVENTS DURING THE YEAR

On 12 March 2018, the Bank transferred its entire capital in Techcom Finance Limited One Member Company.
On 4 June 2018, the Bank’s shares were officially listed on Ho Chi Minh City Stock Exchange.
On 30 May 2018, Techcom Securities Company Limited has successfully transformed its legal form from a limited company to a
joint stock company under Establishment and Operating License No. 125/GP-UBCK issued by the State Security Commission of
Vietnam dated 30 May 2018. The Company’s new name has been changed to Techcom Securities Joint Stock Company.

Hanoi, Vietnam, 15 March 2019

ANNUAL REPORT 2018 ACHIEVING DREAMS 181