Agribank annual report 2009

©AGB-150810/HAKI No. 2 Lang Ha, Ba Dinh District, Hanoi, Vietnam SWIFT CODE: VBAAVNVX Tel: (+84 4) 3831 3694 Fax: (+84 4) 3831 3717 - 3831 3719 Email: webmaster@agribank.com.vn www.agribank.com.vn VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT BRINGS PROSPERITY TO CUSTOMERS ANNUAL REPORT 2009 ANNUAL REPORT 2009 VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT BRINGS PROSPERITY TO CUSTOMERS VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT BRINGS PROSPERITY TO CUSTOMERS ANNUAL REPORT 2009 4 AGRIBANK ANNUAL REPORT 2009 5 AGRIBANK ANNUAL REPORT 2009 1. MESSAGE 2009 6 2. AGRIBANK OVERVIEW 2009 8 3. BUSINESS RESULTS OF 2009 14 4. ORGANIZATIONAL STRUCTURE, PERSONNEL 26 5. BUSINESS ORIENTATION 2010 36 6. FINANCIAL STATEMENTS 39 7. OPERATING NETWORK 51 8. CORRESPONDENT BANKS 61 9. SUBSIDIARIES 89 CONTENTS 6 AGRIBANK ANNUAL REPORT 2009 MESSAGE 2009 Ladies and Gentlemen! In 2009, the world economy continued to face many challenges. The heavy deterioration of most major economies shrunk export and capital markets and had many negative impacts on our economy and society. From the early months of 2009, Agribank, as the largest bank in Vietnam, was aware of its roles and responsibilities to the community and society, particularly in the strict and effective implementation of policies and guidance from the Party, the Government and the State Bank of Vietnam to prevent economic recession, maintain reasonable growth, stabilize macro-economy and ensure social security. Agribank reduced interest rates twice for its customers from 20.5% to 10.5%, with a total rebated amount of VND 4,300 billion; timely supported interest for 1,337,651 customers with an amount of VND 194,293 billion. Holding the leading and dominant role in Vietnam’s rural financial market, Agribank continued to prioritize its investment to the “Tam Nong” (Agriculture, rural areas and farmers). At the year’s end, outstanding loans to agriculture and rural areas accounted for 68.3% of the total outstanding loans, of which lending to rural households accounted for 51%. More than 80% of the rural households in all geographical areas in the country have gained access to finance and services provided by Agribank. This contributed to further restructuring of the rural economy, creating tens of millions of new jobs and more industries, income increasing progressively transforming the agricultural sector to a commodity producing sector. Aware of the importance of non-traditional credit products and services, during 2009, Agribank took full advantage of modern information technology to develop and introduce modern banking products and services including: Mobile Banking related services, such as SMS Banking, VnTopup, A Transfer, A Paybill, and VnMart; payment connectivity with the State Treasury, in coordination with Taxation and Customs Offices for the collection of state budget; and the issuance of more than 4.2 million cards of all kinds. 2009 was also the year Agribank placed a strong focus on training and retraining its staff to meet the requirements of competition and integration. Throughout the year, Agribank conducted training and retraining for a total of 142,635 turns of staff (an increase of 57% compared with 2008); successfully implemented online training model, and recruited more than 2,000 young staff with strong educational foundation, foreign language skills and IT knowledge in order to prepare human resources for the following years. At the end of 2009, total assets of Agribank reached VND 470,000 billion, an increase of 22% compared with 2008; total funding resources reached VND 434,331 billion, and total outstanding loans to the economy reached VND 354,112 billion, of which outstanding loans to agricultural and rural areas was VND 242,062 billion. In the context of complex economic circumstances, Agribank is still trusted by international financial organizations such as the World Bank (WB), the Asian Development Bank (ADB), the French Development Agency (AFD), the European Investment Bank (EIB), and others. These organizations selected Agribank to implement 138 projects with total capital funding of more than USD 4.4 billion of which the disbursed amount of over USD 2.3 billion. Agribank constantly approached 7 AGRIBANK ANNUAL REPORT 2009 and attracted new projects: the second phase of a co- finance contract with the European Investment Bank (EIB); the third phase of Rural Finance Project funded by the World Bank; Quality and Safety Enhancement of Agricultural Products (QSEAP) funded by ADB; Small and Medium-Sized Enterprises Finance Project Phase 3 funded by Japan International Cooperation Agency (JICA); Small Rubber Holdings Development Project funded by the AFD. Agribank is currently undertaking the Chairmanship of the Asia-Pacific Rural and Agricultural Credit Association (APRACA) and also is a member of International Confederation on Agricultural Credit (CICA) and Asian Bankers Association (ABA), maintaining correspondent relationship with 1,034 banks in 95 countries and territories. Besides mandates in business, Agribank also displays its social responsibility as a major enterprise to the cause of social security of the country. In 2009, Agribank contributed to the building of dozens of schools, hundreds of houses of gratitude and healing and donated tens of thousands of gifts to the poor and the people who were affected by natural disasters with an amount up to hundreds of billions of Vietnamese Dong. In implementation of the Government’s Resolution No. 30a/2008/NQ-CP to provide assistance programs for faster and sustainable poverty reduction for 61 poor districts in 20 provinces, Agribank supplied VND 160 billion in support for the two poor districts of Muong Ang and Tua Chua of Dien Bien province. In 2009, Agribank was honored to receive General Secretary of the Communist Party of Vietnam Mr. Nong Duc Manh to visit on the occasion of 21st anniversary (26 March, 1988 - 26 March, 2009). It was also honored to be awarded with different certificates of merit and other noble awards from the Party, State, Government, the State Bank of Vietnam, and other reputable organizations, including: Top 10 Vietnam Gold Star Award, Vietnam’s Top 10 Most Prestigious Brands, the title of “Business for Sustainable Development” recognized by the Ministry of Industry and Trade, and VNR500’s Top 10 enterprises. In 2010, Agribank is determined to maintain and confirm its leading and dominant positions in providing loans for the cause of industrialization and modernization of agriculture and rural development in conformity with the policies and objectives set forth by the Party and the State; to expand its operations firmly, safely, and in a sustainable manner; to continuously improve and apply modern information technology in order to provide convenient services and facilities to all types of businesses and communities; to improve profitability; to further develop its human resources for better competitiveness and quick adaptation in the process of international economic integration; and to progressively improve Agribank brand awareness and culture domestically and internationally. Yours truly! Chairman of Board of Directors Nguyen The Binh General Director Pham Thanh Tan 8 AGRIBANK ANNUAL REPORT 2009 OVERVIEW 2009 AGRIBANK 9 AGRIBANK ANNUAL REPORT 2009 After 2008 with lots of disadvantages, the global economy continued to undergo another twelve months of 2009 with even more difficulties. Recession and crisis have actually had direct impact on many economic sectors in Vietnam. Natural disasters and epidemics occurred across the country; the most heavily affected were the Central area and the Central Highlands. Under these circumstances, the Government promptly put forward the 05 feasible groups of solution, together with the stimulus package to support loans for working capital with the interest rate subsidy support of 4% per year, providing credit guarantee for small and medium sized enterprises, prolonging time for payment of income tax, etc. with the aim of preventing economic decline, promoting the advantages and focusing all resources on economic development associated with ensuring social security. As a result, the Vietnamese economy was able to maintain a reasonable growth rate. Gross domestic product (GDP) increased by 5.32%, exceeding the target set by the National Assembly of 5%. The Agriculture, forestry and fishery sector increased by 1.83%, the industry and construction sector increased by 5.52%, the service sector increased by 6.63%, and the rate of poor households dropped to 12.3%. While many of the world’s largest banks were forced to conduct merger or declared bankruptcy, with the initiative and flexibility in the use of tools on interest rates, exchange rates, open market operations, reserve ratio, derivatives, etc. the State Bank of Vietnam has effectively implemented its monetary policy, controlled inflation, helping to achieve a stable banking system and stabilizing the economy. Particularly, the effective implementation of the policy on interest rate subsidy has helped enterprises maintain their business operations and overcome a period of difficulty while remaining sustainable development. BUSINESS ENVIRONMENT 10 AGRIBANK ANNUAL REPORT 2009 0,000 100,000 200,000 300,000 400,000 500,000 2007 2008 2009 305,671 375,033 434,331 Unit: VND billion 0,000 100,000 200,000 300,000 400,000 500,000 2007 2008 2009 246,118 294,697 354,112 Unit: VND billion 0,000 50,000 100,000 150,000 200,000 250,000 0,000 50,000 100,000 150,000 200,000 250,000 2007 2008 2009 69,310 194,867 221,574 Unit: VND billion 2007 2008 2009 116,258 186,180 179,450 Unit: VND billion Total fund resources Total outstanding loans to the economy Forex dealing turnover International payment turnover KEY PERFORMANCE FIGURES [...]... by Agribank Trade Union was granted Certificate of Intellectual Property Rights by the Ministry of Culture, Sports and Tourism AGRIBANK ANNUAL REPORT 2009 6 AGRIBANK ANNUAL REPORT 2009 14 BUSINESS RESULTS OF 2009 6.897.099 5.211.810 4.586.867 3.576.890 3.284.989 AGRIBANK ANNUAL REPORT 2009 15 DESPITE NUMEROUS DIFFICULTIES WITHIN THE DOMESTIC AND THE WORLD ECONOMY, WITH THE EFFORTS OF THE WHOLE AGRIBANK. .. year, Agribank s employees spend 03 day wages to contribute to the Fund for the Poor, Fund of gratitude, Fund for Children; 01 day wages for Gratitude Fund of the banking sector By the end of 2009, the total amount that Agribank contributed to social and charity activities reached over VND 100 billion AGRIBANK ANNUAL REPORT 2009 23 AGRIBANK ANNUAL REPORT 2009 24 AWARDS ACHIEVED IN 2009 AGRIBANK ANNUAL REPORT. .. 27 BOARD OF DIRECTORS AGRIBANK ANNUAL REPORT 2009 28 Mr Nguyen The Binh Chairman AGRIBANK ANNUAL REPORT 2009 29 Mr Pham Thanh Tan Member Mr Nguyen Huu Luong Member Mr Pham Ngoc Ngoan Member Mrs Pham Thi Mai Toan Mr Hoang Anh Tuan Member Member Mr Vo Hong Member BOARD OF MANAGEMENT AGRIBANK ANNUAL REPORT 2009 30 Mr Pham Thanh Tan General Director AGRIBANK ANNUAL REPORT 2009 31 Mr Kieu Trong Tuyen Mr... a value of USD 2.5 billion Cross-border payment turnover period 2005 -2009 Import Unit: VND billion Export 12,000 10,692 11,400 10,000 10,288 9,466 8,724 8,000 7,141 6,000 4,000 5,464 3,020 2.326 2.920 2,000 0 2005 2006 2007 2008 2009 AGRIBANK ANNUAL REPORT 2009 19 AGRIBANK ANNUAL REPORT 2009 20 3.8 Card service By the end of 2009, Agribank had issued 4.2 million cards of all kinds, being the bank with... 2009 25 (Award names and photos) 1 Top 10 Vietnam Gold Star Award 2 Top Trade Services Award 2009 (Ministry of Industry and Trade) 3 Top 10 enterprises (ratings by VNR500) 4 Bussiness for Sustainable Development (Ministry of Industry and Trade) 5 Cultural enterprise award of UNESCO AGRIBANK ANNUAL REPORT 2009 26 ORGANIZATIONAL STRUCTURE, PERSONNEL AGRIBANK ANNUAL REPORT 2009 27 BOARD OF DIRECTORS AGRIBANK. .. 0.3% 0.3% 7.2% 48.6% 43.9% State-owned enterprises Private enterprises Households Cooperatives 17 AGRIBANK ANNUAL REPORT 2009 Structure of outstanding loans in 2009 AGRIBANK ANNUAL REPORT 2009 18 3.4 International payment 3.5 Treasury and Forex Dealing Total international payment turnover by Agribank in 2009 reached USD 9,700 million, taking a market share of 7.7% of total import-export turnover of... ENTITIES SUBSIDIARIES BRANCHES TRANSACTION OFFICES TIER 3 BRANCHES TRANSACTION OFFICES AGRIBANK ANNUAL REPORT 2009 33 TRAINING AND AGRIBANK ANNUAL REPORT 2009 34 HUMAN RESOURCE MANAGEMENT Agribank has always put the focus on human resource development both in quality and quantity towards sustainable development In 2009, Agribank conducted training and retraining for a total of 142,653 turns of staff (an... apply to coffee, rubber, insurance for agriculture - forestry – fishery More and more products and services of Agribank are known and trusted by customers AGRIBANK ANNUAL REPORT 2009 21 AGRIBANK ANNUAL REPORT 2009 22 4 RISK MANAGEMENT Contributing to the sustainable development of the whole system, Agribank established Risk Management Committee and actively developed risk management tools, including: internal... 0,000 2007 2008 2009 Forex dealing turnover 0,000 11 2007 2008 International payment turnover Unit: VND billion 250,000 194,867 200,000 221,574 2009 Unit: VND billion 250,000 186,180 200,000 150,000 150,000 100,000 179,450 100,000 116,258 69,310 50,000 50,000 0,000 2007 2008 2009 0,000 2007 2008 2009 Non Performing Loans (NPLs) 2.5% 2007 2.6% 2.68% 2008 2009 AGRIBANK ANNUAL REPORT 2009 Total fund resources... country and abroad to improve knowledge and learn professional experiences from advanced banks in the world 35 AGRIBANK ANNUAL REPORT 2009 TOWARDS SUSTAINABLE DEVELOPMENT, AGRIBANK HAS ALWAYS PUT A STRONG FOCUS ON HUMAN RESOURCE DEVELOPMENT BOTH IN QUALITY AND QUANTITY BUSINESS AGRIBANK ANNUAL REPORT 2009 36 ORIENTATION 2010 1 THE OVERALL GOALS •  o maintain and promote the leading position of a T state-owned . PROSPERITY TO CUSTOMERS ANNUAL REPORT 2009 4 AGRIBANK ANNUAL REPORT 2009 5 AGRIBANK ANNUAL REPORT 2009 1. MESSAGE 2009 6 2. AGRIBANK OVERVIEW 2009 8 3. BUSINESS RESULTS OF 2009 14 4. ORGANIZATIONAL. 3719 Email: webmaster @agribank. com.vn www .agribank. com.vn VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT BRINGS PROSPERITY TO CUSTOMERS ANNUAL REPORT 2009 ANNUAL REPORT 2009 VIETNAM BANK FOR. EFFORTS OF THE WHOLE AGRIBANK SYSTEM, IN 2009, AGRIBANK STILL ACHIEVED GOOD RESULTS. 16 AGRIBANK ANNUAL REPORT 2009 3.1. Capital mobilization As of the 31 December 2009, total fund resources