i ABSTRACT The thesis focuses on current situations of risk management at Bank for Investment and Development of Vietnam JSC – Cau Giay branch Through analyzing current activities in managing credit risk, market risk and operational risk from 2010 to 2013, it can be seen that the risk management system of Cau Giay branch worked well, which allowed the branch to have the capability of minimizing losses and detecting risks However, some limitations in human resource and information technology system also affected banking operation Therefore, solutions to encourage the quality of risk management activities in BIDV – Cau Giay branch should be considered, including of credit model diversification, credit evaluating improvement, information collecting and human resources quality improvement, and overdue debt and non-performing loan avoidance In conclusion, the thesis has already been completed in comparison with proposed objectives and targets in the introduction ii TABLE OF CONTENT ABSTRACT I TABLE OF CONTENT II LIST OF TABLES AND CHARTS IV LIST OF ABBREVIATIONS IV INTRODUCTION 1 RATIONALE OF THE STUDY AIMS OF THE STUDY METHODS OF THE STUDY SCOPE AND SUBJECT OF THE STUDY STRUCTURE OF THE STUDY 1 2 CHAPTER I LITERATURE REVIEW 1.1 RISKS 1.1.1 Definitions .3 1.1.2 The categories of risks 1.1.2.1 Credit risk .4 1.1.2.2 Market risk 1.1.2.3 Operational risk 1.2 RISK MANAGEMENT 1.2.1 Definitions .7 1.2.2 Risk measurement 1.2.2.1 Credit risk measurement .8 1.2.2.2 Market risk measurement 10 1.2.2.3 Operational risk measurement 11 1.3 RISK MANAGEMENT PROCESSES 12 1.3.1 Components of risk management process 12 1.3.2 Strategies for risk management 13 1.3.3 Roles in the risk management process 14 CHAPTER II 16 THE REALITY OF RISK MANAGEMENT IN BIDV – CAU GIAY BRANCH .16 2.1 OVERVIEW OF BIDV 16 2.1.1 General introduction about BIDV 16 2.1.2 Development orientation 17 2.2 OVERVIEW OF BIDV – CAU GIAY BRANCH 18 2.2.1 Organizational structure .19 2.3 CURRENT SITUATION OF RISK MANAGEMENT IN BIDV – CAU GIAY BRANCH 19 2.3.1 Current activities 19 2.3.1.1 Business performance .19 2.3.1.2 Fund mobilization 21 2.3.2 Current situation of credit risks at Cau Giay branch 22 2.3.2.1 Credit model 22 iii 2.3.2.2 Overdue debt and NPL .24 2.3.2.3 Provision plan 25 2.3.2.4 Income from credit activities .26 2.3.3 Current situation of market risk management at Cau Giay branch .27 2.3.4 Current situation of operational risk management at Cau Giay branch 27 2.3.5 The assessment of the risk management situation at BIDV – Cau Giay Branch during the 2010 – 2013 period .29 2.5.3.3 Causes 30 2.4 STRENGTHS AND WEAKNESSES OF RISK MANAGEMENT AT CAU GIAY BRANCH 30 2.4.1 Strengths 30 2.4.2 Weaknesses 31 2.4.3 Opportunities 31 2.4.4 Challenges 32 CHAPTER III 33 SUGGESTIONS TO IMPROVE THE EFFICIENCY OF RISK MANAGEMENTIN BIDV – CAU GIAY BRANCH 33 3.1 THE DEVELOPMENT ORIENTATION OF BIDV 3.2 SUGGESTIONS TO IMPROVE THE EFFICIENCY OF RISK MANAGEMENT IN BIDV – CAU GIAY BRANCH 33 34 3.2.1 Credit model diversification 34 3.2.2 Credit evaluating improvement 34 3.2.3 Information collecting improvement 35 3.2.5 Human resources quality improvement .36 3.3 RECOMMENDATIONS 37 3.3.1 Recommendations to the Government 37 3.3.1 To State bank of Vietnam .38 3.3.2 To BIDV 38 CONCLUSION 40 REFERENCES 41 iv LIST OF TABLES AND CHARTS TABLES Table 1: NPL rate of BIDV against other banks 32 Table 2: Overdue debt and NPL proportion over 2011-2013 period of BIDV – Cau Giay Branch 33 Table 3: Provision plan over 2010-2013 period 34 Table 4: Income from credit activities over 2010 – 2013 period 35 FIGURES & CHARTS Figure 1: Three main types of risks 05 Figure 2: Sources of Operational Risk 09 Figure 3: Making Consistent Risk Management Decisions .18 Figure 4: Strategies for risk management 19 Figure 5: Roles in the Risk Management Process .21 Figure 6: The organizational structure of Cau Giay Branch 26 Chart 1: Total asset and Profit before tax of Cau Giay branch (2010-2013) .27 Chart 2: Fund mobilization situation of Cau Giay branch (2010-2013) 29 Chart 3: Outstanding loan on term over 2010-2013 period .30 Chart 4: Credit model in terms of borrower over 2010-2013 period .31 LIST OF ABBREVIATIONS Abbreviations BIDV Meanings Joint Stock Commercial Bank for Investment and Development of v BIS BOD CIC EVA IT NPLs P&L VaR VCB VND Vietnam The Bank of International Settlement Board of Directors Credit Information Centre Economic Value Added Information Technology Non - performing loans Profit and Loss Value at Risk Vietcombank ( Bank for Foreign Trade of Vietnam) Vietnamese Dong INTRODUCTION Rationale of the study Thanks to new opportunities created by international economic integration, Vietnam economy has achieved noticeable achievements recently It also has led to significant changes in the overall economy in general and particularly in Vietnam’s banking sector, especially in commercial banks Commercial banks in Vietnam have grown in both quality and quantity over the last few years It is considered as a bridge which connects several sectors in the economy, a currency and credit center distributing to the sustainable development of the country However, in the changing business environment and sharp competitions, those banks have to face with several risks from both external and internal sources Any problems arising from the activities of banks can immediately and directly affect their clients and indirectly other involved subjects Moreover, the weakness of banking operations, the incompleteness in the policy system and the likes have caused serious consequences such as increasing non-performing debts, losses, or fraud According to the Banking Magazine of the State Bank of Vietnam (2012), there was an upward trends in non-performing debt rate, from 3.07% in December 2011 to 4.22% in April 2012 As the result, in order to prevent these consequences, creating an efficiency risk management system must be the top priority of commercial banks Furthermore, any banks that can manage risks well will survive and develop in the market in the long run Therefore, the study for solution to improve risk management is a frequent and urgent issue of banking industry in Vietnam Risk management is also important to Cau Giay branch of Bank for Investment and Development of Vietnam JSC, one of the most efficiently operating branches During the past years, the branch has achieved certain successes in identification and managing risks; however, the risk management polices has been incomplete and imperfect, resulting in high possibility of losses Therefore, the branch has made an attempt to improve efficiency further Because of above reasons, the topic: “Solutions to improve the efficiency of risk management in Bank for Investment and Development of Vietnam JSC – Cau Giay branch” was chosen as the issues for this study Aims of the study The general aim of this thesis was to study risk management at Cau Giay branch of BIDV and through that, some suggestions and implications was proposed to enhance the efficiency of risk management at Cau Giay branch, BIDV The thesis answered main questions: Firstly, what are the current situations of managing risks at Cau Giay branch? Secondly, which implications BIDV - Cau Giay branch should apply to manage risks? Methods of the study In order to achieve the aim of the study, there was a combination between comparison and analysis methods in order to find out the strengths, shortcomings, opportunities as well as recommend some solutions for improving the efficiency of risk management in BIDV – Cau Giay branch Based on banks’ annual reports, financial statements, websites, newspapers, government publication, finance journals, banking statistics, books, surveys and industry reports, the figure of business performance and credit activities such as total assets, profit before tax, fund mobilization, outstanding loan, and non – performing loans (NPL) during 2010 – 2013 period were compared and analyzed to notice the trend and the quality of credit risk management There was also a comparison between NPL of BIDV and that of other commercial banks, which illustrated the competitiveness of BIDV in the market In addition, the analyses in market and operational risk management were used to show the capacity of Cau Giay branch when handling risks Scope and subject of the study My research mainly concentrates on risk management at BIDV, Cau Giay branch under the economic perspective in terms of space and in period 2010-2013 in term of time Structure of the study Apart from the introduction, conclusion, references and documents attached, the main content is divided into three chapters as follows: Chapter 1:“Literature review” gives brief introduction to the risks by compiling the different ideas and influences of experts about risks, risk management in banking, types of risks, risk measurements and risk management process Chapter 2:“The reality of risk management in BIDV – Cau Giay Branch” focuses on the basis of analyzing the current situations and evaluating the management of risks over the years Chapter 3:“Suggestions to improve the efficiency of risk management in BIDV – Cau Giay branch” brings some suggestions to minimize risks and thus increases risk management quality CHAPTER I LITERATURE REVIEW 1.1 Risks 1.1.1 Definitions “Risk” has long been studied, especially in recent years It is one of those concepts which not have a universal definition Each author has a different approach to define risk Gallati, R (2003) defines risk as a condition in which there exists an exposure to adversity, or a condition in which there exists a possibility of deviation from a desired outcome that is expected or hoped for Another definition of risk was provided by Bessis, J (2002) in which risk was defined as the probability or threat of quantifiable damage, injury, liability, loss, or any other negative occurrence that is caused by external or internal vulnerabilities, and that may be avoided through preemptive action Despite some different factors, these definitions all agree that risk is the chance that in some unfavorable and unexpected events will occur In the banking industry, “Banking risks are defined as adverse impacts on bank’s profitability arising from several distinct sources of uncertainty” (Bessis (2002)) For the purposes of this thesis, risk is defined as the volatility of a corporation’s market value (Kupper, E (1999)) Therefore, all decisions may impact on a change in market value 1.1.2 The categories of risks There are numerous methods to classify types of risks However, in practices, banks tend to focus their energies and resources on understanding and managing the key drives that determine financial loss In that sense, they focus on three main types of risks: credit risk, market risk and operational risk Figure provides a bird’s eye view on three main types of risk and its components Figure 1: Three main types of risks RISKS CREDIT RISK OPERATIONAL RISK MARKET RISK •Risk grading • Single name • Single transaction • Industry/ Sector • Country/ Region • Product • Event risk • Payments/Settlement • Trading risk • Balance sheet risk risk • Technology/Systems exposure • Fraud/Compliance risk • Natural disaster • Change management • Tenor • Credit skills and training (Source: Kupper, E (1999)) 1.1.2.1 Credit risk  Definitions Credit risk is one of the main risks of commercial banks that will affect the banks’ possibility of sustainable operation Banks assume credit risk when they act as intermediaries of funds and credit risk management lies at the heart of commercial banking In a 1996 report, the Bank of International Settlement (BIS) defined credit risk as the risk that a counterparty will not settle an obligation for full value, either when due or at any time thereafter After that, Viney, C (2009, p.728) found that credit risk was the possibility that a borrower or a debtor will not meet future financial obligation to pay interest installments or to repay debt principal when due On the other hand, according to Decision No.493/2005/QD-NHNN dated 22 April, 2005 by Vietnam government, credit risk is seen as the potential that a bank borrower or counterparty will default on any type of debt by failing to make payments when it is obligated to In short, these definitions share the same idea that credit risk is the potential financial loss resulting from the failure of customers to honour fully the terms of a loan or contract This definition is being expanded to include the risk of loss in portfolio value as a result of migration from a higher risk grade to a lower one  Sources of credit risks Credit risk arises from a number of causes as follow: • From the banks themselves: Due to loose credit policies and procedures, ineffective risk management, inappropriate customer credit’s need, insufficient professional qualification of credit staff… • From the customers: Due to limited governance capacity of customers, capital incapable customers who are not able to carry out planned business, cheating customers • From business environment: Due to reasons of force majeure (natural disasters, plague ), changing in macroeconomic policies and legal environment, asymmetric information In the current changing business conditions, credit risk management becomes more complicated That fact requires each bank must constantly enhance risk management capability, especially credit risk  Types of credit risks There are two main types of credit risk, credit default risk and credit spread risk According to Winkler, G (2008, p.12), default risk is the risk of loss arising from a debtor being unlikely to pay its loan obligations in full or from the debtor missing payment for more than 90 days on any credit obligations Default risk may impact all credit transactions including loans, securities and derivatives The credit spread is the excess premium over the government or risk-free rate required by the market for taking on a certain assumed credit exposure It is important to notice that the higher the credit rating, the smaller the credit spread Thus, the credit spread risk is the risk of financial loss resulting from changes in the level of credit spreads used in the marking-to-market of a fixed income product Changes in observed credit spreads affect the value of the portfolio and can lead to losses for traders or underperformance for portfolio managers 1.1.2.2 Market risk  Definitions Bank for International Settlement defines market risk as “the risk of losses in on- and off-balancesheet positions arising from movements in market prices.” In this respect, the main factors contributing to market risk are equity, interest rate, foreign exchange, and commodity risk The total market risk is the aggregation of all risk factors (Sironi, Resti, 2007; Dowd, 2002) Another definition is that market risk is the risk of adverse deviations of the mark-to-market value of trading portfolio, due to market changes, during the period required to liquidate the transaction Market risk is also defined as the risk to earnings arising from changes in interest rates or exchange rates, or from fluctuations in bond, equity or commodity prices Banks are subject to market risk in both the management of their balance sheets and in their trading operations 2.3.3 Current situation of market risk management at Cau Giay branch 2.3.3.1 Interest risk management As one of the leading banks in Vietnam in implementing modern risk management system, BIDV has fully established its internal regulations on interest rate risk management system in compliance with relevant regulations by the State Bank of Vietnam as well as approaching toward international practices In 2013, BIDV studied and introduced most of the instruments and interest rate risk management in accordance with international practices such as value interest rate risk (VaR), change in net income ΔNII interest, hypothesis testing, and minimum capital requirements At the moment, BIDV is studying to complete these tools and deploy testing tool crisis (stress test) to meet the requirements of SBV at the Circular regulating risk management systems in banking operation which is expected to be issued soon as well as to enhance the effectiveness of long-term interest rates risk management 2.3.3.2 Foreign exchange risk management The branch’s business activities, including foreign exchange trading, joint-venture participation and offshore investment, have been directly affected by the variation of exchange rate in the market The exchange rate in Vietnam is monitored and regulated by SBV, according to which SBV will announce the average interbank rate and commercial banks will exchange foreign currencies within the allowed margin Currently, BIDV’s forex trading activities primarily include spot transactions, forward transactions, and swaps (between USD – VND) In order to manage exchange rate risk, BIDV has promulgated a series of regulations and set limits on foreign exchange transactions, risk-acceptance threshold, and instruments for risk measurement and control At the same time, BIDV has also thoroughly done researches and implied derivatives hedging against exchange risk for the Bank’s asset portfolio 2.3.3.3 Liquidity risk management BIDV has developed a system of rules, procedures adequate internal liquidity risk management with the implementation of modern management model BIDV’s liquidity management policy in compliance with the principle of central bank regulations, safety systems, and increasing investment in reserve assets have high profitability, enhance asset quality 2.3.4 Current situation of operational risk management at Cau Giay branch 2.3.4.1 Technology operation To prevent and restrain information technology system risk, in recent years, along with appropriate human resources development in information technology, BIDV has continuously invested in equipment and developed a complete IT system: setting up firewall, modern IPS/IDS system for WAN/LAN, copyrighted anti-virus system which has been updated frequently applied system-wide, disaster recovery center complying with international standards, storage area network (SAN), as well as policies on system’s security and safety BIDV is also one of the first banks in Vietnam to establish a backup center that uses backup main server system and storage technology with the most advanced solutions to secure the Bank’s continuous operation even in case of natural disasters and catastrophes The management and operation of BIDV’s IT system are strictly conducted and closely controlled in accordance with processes and regulations, which are periodically reviewed and updated BIDV’s IT system has been maintained up-to-date, stable and centrally operated at the rate of more than 99% The speed of processing daily transactions is stable and secure with to million successful transactions processed per day, satisfying the requirements of the entire system’s business activities 2.3.4.2 Payment system BIDV’s payment system has been ranked among the best payment systems of commercial banks by both foreign and domestic organizations Not only connecting to the major international and domestic payment networks (IBPS, TTBT, TTSP/TTDP, VCB Money, Swift), BIDV has also developed a Bilateral/Multilateral payment system connecting over 20 domestic banks to effectively serve business operations All of the payment channels of BIDV are able to process in multiple currencies (excluding the channels by State Bank of Vietnam in accordance with the regulations) BIDV completed the implementation of the electronic banking system (Internet Banking - Mobile Banking) in 2012, offering the Bank’s customers many utilities Such products can be listed as BIDV Online, Mobile BIDV, BIDV Business Online, BankPlus 2.3.4.3 Operational control risk Operational risk is a risk that may occur in most of banks’ activities It is adherent to banking activities but unpredictable Operational risk may stem from human factors (negligence, fraud), due to loopholes in the operating procedures, weaknesses in information systems, internal control systems; or from changes of unexpected external factors (government policies, natural disasters, sabotage) To prevent and mitigate operational risk, BIDV has implemented operational risk management by divided this type of risk into 07 categories, at the same time the development and application of new standardized operational risk management tools is also emphasized and promoted BIDV has been actively researching, implementing the results from Rural Finance Project III, component “enhancing operational risk management capacity at BIDV” funded by World Bank Some international compliance risk management tools are currently applied in BIDV as selfidentification risk assessment methodology, RCSA tool, CSA 2.3.5 The assessment of the risk management situation at BIDV – Cau Giay Branch during the 2010 – 2013 period 2.3.5.1 Achievements During the 2010-2013 period, the risk management activities of BIDV - Cau Giay branch achieved positive results The branch had an excellent performance for years with large amount of total assets and profit as well as the capacity of mobilizing fund in a short time, which definitely improved the competitiveness and reputation of the bank in the market The upward trend of the income from credit activities proved that the quality of credit activities at the branch was focused and ensured Moreover, the total outstanding loans matched with the capacity of mobilized fund, which played an important role in improving profits, gaining customers’ trust and developing the possibility for collecting debts At the same time, overdue debt as well as non-performing loan is an important measure to evaluate the current performance of a bank The overdue debt and NPL ratios of BIDV – Cau Giay branch were remained at a safe level (under 2%) over the period, meaning that the credit risk level of the branch was low and the quality of risk management was quite high The evaluation of credit activities had partly improved by applying modern scientific and technical methods, implementing strict credit risk management Finally, policies and regulations of the branch to control market and operational risks worked well The branch concentrated not only on technology systems but also human resource to prevent risks 2.3.5.2 Limitations Despite of gaining the great achievements above, the branch still had some limitations First, although outstanding loan increased in the period of four years from 2010-2013, it was mainly short-term loans It is obvious that the branch had some limitations in meeting the demand for medium and long -term loans Besides, in terms of types of borrower, the outstanding loan of enterprises made up a majority of total outstanding loan In such a difficult period, enterprises had to face numerous obstacles, which reduced their repayment capacity Therefore, the higher proportion of enterprise loans was, the higher risks the bank had 2.5.3.3 Causes  Subjective causes In terms of policy, the complex credit procedures affect the effectiveness and efficiency of credit activities Therefore, customers, especially individuals may find it complicate and difficult when lending or borrowing Moreover, marketing policies was not concentrated The branch had problems in finding new customers Medium and long-term loans mainly applied for regular customers or customers who have long credit relationship with bank  Objective causes The first cause is that during 4-year period, the world economy rose and fell unpredictably, which affect considerably to the performance of enterprises Many companies made huge losses, or even were in the edge of bankruptcy Therefore, it is difficult to control the amount of nonperforming loans over the period The second cause is the dishonest of borrowers There was still group of borrowers who committed monetary fraud Financial reports have been counterfeited in order to take money from bank in an illegal way or to use capital without initial objectives 2.4 2.4.1 Strengths and weaknesses of risk management at Cau Giay branch Strengths With its best efforts, Cau Giay Branch has adopted abundantly measures to minimize risks as well as to mitigate the negative impacts of overdue loans It came as no surprise that Cau Giay Branch has made significant accomplishment in managing risks These results were produced due to the tight lending policy, and a high reputation of the branch  The tight lending policy The credit portfolio and quality were strictly controlled in accordance with the business targets set for the year Lending business focused on prioritized sectors such as agriculture, imports and exports, high-technology industry and SMEs Besides, the bank continued to control loans in foreign currencies as well as maintained a diversified lending portfolio to reduce concentration risks BIDV has also proactively controlled credit quality to achieve business targets, assessing the repayment ability to apply suitable debt recovery method to each customer; constantly reclassified loan portfolio and set up provision at branch level; proactively set up plan to adjust loan classification and provision when Circular 02 was enforced; strived to recover and write off bad debts by using provision  High reputation A high reputation plays an important role in business activities It is a tool to build customers’ trust and attract more capital First factor that creates public confidence in Cau Giay Branch service is the history of development With more than 50 years working in the banking market, the bank has been given an excellent reputation in both domestic and international markets Second factor lies in Cau Giay Branch’s business culture in which all staff appeared to be professional, dynamic and innovative Cau Giay Branch’s image as a trust-worthy credit institution was consolidated 2.4.2 Weaknesses In spite of having implemented a number of measures to minimize risks, CauGiay Branch still has to suffer from a significant degree of risks There have been several shortcomings in bank’s activities Firstly, the business policies of the branch have been in general It does not have detail instructions or specific approaches for staff in risk management They have been working mostly with their experience to deal with risks, especially credit risks Therefore, they may be confused when unprecedented risks occur Secondly, though its system in BIDV Cau Giay is modern and stable, it failed to be used the full of capability to gather information about borrowers The source of information is mainly from what borrowers provide so that it is very passive and not accurate Moreover, information collection and inspection after lending activities is not concerned As a result, the forecast on the possibility of credit risk is difficult Last but not least, human resource lacks information about risk management Many employee working in banks think that risk management is the directors’ responsibility They not equip themselves with risk management methods and laws Consequently, the risk cannot be detected and prevented soon 2.4.3 Opportunities In the context of global recovery and well-timing and aggressive directions from the Government (Resolution 01 and 02), Vietnam has achieved encouraging results, basically completed all ecosocio objectives (of which are stabilizing macroeconomics, monitoring inflation, ensuring employment and social benefit) set by the National Assembly and the Government In that sense, the business activities will be brighter, encouraging individuals and enterprises perform more transactions through banks It is a good opportunity for the branch to make profits and expand markets Another opportunity is that in 2012, BIDV transformed into a joint stock commercial bank It means that BIDV can, in a way, mobilize capitals in several ways through shares, borrowing…as well as increase the brand image At this time, BIDV conducted an innovative compensation mechanism which was considered a breakthrough, leading to reformations in all other operational activities The new compensation mechanism has been developed and applied in BIDV since July 1st 2012 with the principles of standards’ approach, market competitiveness, and internal equality in accordance with the provisions of the laws and BIDV’s financial budget 2.4.4 Challenges Firstly, the business activities in the branch are facing various difficulties because the borrowing interest is high, while the lending interest is decreasing As a result, the differences between output and input are small Moreover, providing new services or expanding the market requires a huge amount of funds and time Therefore, increasing profits for the branch is a big challenge In addition, Vietnam’s economy has been affected by the financial crisis, obstacles still remain: (I) Domestic demand is still weak, (ii) Budget is still constrained, public debt is troublesome, (iii) Bad debt is still high and worrying, (iv) Restructuring progress of the priority areas is still sluggish These challenges will directly affect business activities of BIDV’s customers and BIDV itself The final cause is legal environment Legal environment has not been properly built, affecting the expansion activities for commercial banks Especially, regulations on property ownership certificate and real estate have not been clearly, as a result, banks have difficulties in credit evaluation In conclusion, this chapter has analyzed and assessed of the current status of risk management in the business activities of BIDV Cau Giay, and pointed out some strengths and weaknesses as well as challenges that the bank has to face Therefore, the solutions to improve the efficiency of risk management are considered the key matters of BIDV Cau Giay in the next years CHAPTER III SUGGESTIONS TO IMPROVE THE EFFICIENCY OF RISK MANAGEMENTIN BIDV – CAU GIAY BRANCH 3.1 The development orientation of BIDV The development orientation of the whole BIDV is also considered as the development orientation of BIDV – Cau Giay Branch during the period Based on anticipated challenges from the macro economy and banking industry, as well as taking advantages of the exist resources such as human resource, a wide distribution channel, in order to become a leading bank in operation scale and indicators in compliance with international standards and practices; and aggressively and effectively implement the tasks assigned by the General Meeting of Shareholders, the BOD has determined targets for the next years as follows: • Continue to improve BIDV’s operational mechanism, including regulatory framework and procedures to ensure the Bank’s operation in compliance with current regulations and in line with international practices and Vietnam’s business environment • Manage credit growth with focus on priotized industries, sectors and projects with safety and effectiveness, in order to increase the total demand and contribute to the whole economy growth • Focus on implementing NPL settlement solutions, strictly controlling credit quality; target at sufficient provision and ensuring safety of the Bank • Implement effectively the profit plan by improving net interest income, boosting service activities and developing retail banking • Focus on deploying key IT projects to comprehensively renovate the IT system, investing in fixedtangible assets, infrastructure construction together with inspection and supervision on deployment progress and quality • Continue to improve the performance of business presences, extend the BIDV’s role and reputation in international market  Detail objectives in 2014 Key ratios Total fund mobilization Total outstanding loans Profit before tax NPL ROA ROE Target Increase 13% Increase 15-16% VND 6000 billion dong