1.

Brief news
1.1. Vietnam’s top banks struggle to increase capital to meet global adequacy
norms
The National Financial Supervisory Commission found that Vietnamese banks need to increase
their charter capital by 1.8-2 times to meet the Basel capital adequacy ratio (CAR) - a measure
of a bank's available capital expressed as a percentage of a bank's risk-weighted credit
exposures.

They include three of the four biggest lenders, BIDV, Vietcombank and Vietinbank.

BIDV, Vietnam's biggest bank by assets, currently has total assets of VND1,270 trillion ($54.3
billion) but capital of nearly VND34.19 trillion ($1.46 billion), which has remained unchanged
since 2015. BIDV’s CAR is now only 9 percent according to leading broker VietCapital Securities,
which is “close to dangerous” if compared to Basel II standard, the bank’s CEO, Phan Duc Tu,
said. In the last three years the bank has been making three or four plans each year such as
selling shares to existing shareholders, paying SBV’s dividends in stock to increase charter
capital, but none of them have been successful.

Vietcombank’s charter capital has remained since 2016 at VND35.98 trillion ($1.54 billion). The
SBV recently gave the lender approval to increase its charter capital by 10 percent to VND39.58
trillion ($1.69 billion). Vietcombank plans to make a private placement of 10 percent of its stake
and has received approval from its shareholders for this. Should its plan succeed, Vietcombank
will surpass Vietinbank as the bank with the largest charter capital.

Vietinbank, the country’s second largest lender by assets, has seen state ownership fall to the
minimum permitted level of 65 percent, and so can no longer issue more shares. Its charter
capital has remained at VND37.23 trillion ($1.59 billion) since 2014.

A masterplan, approved by the Prime Minister early last month, targets to have 3-5 banks listed
on foreign stock exchanges. The plan, which covers the banking sector's development until
2025 with a vision to 2030, also set targets to reduce the state capital ownership in three major
banks: Vietcombank, BIDV and Vietinbank. In 2018-2020, the state will reduce its shares in
those banks to at least 65 percent and in 2021-2025, the figure will be 51 percent.

1.2. The State Bank approved the principle of merging PGBank into HDBank
The State Bank of Vietnam officially approved the principle of merging Petrolimex Bank
(PGBank) into the City Development Bank. The official merger of PGBank into HDBank is
expected by the end of 2018.
Specifically, the State Bank of Vietnam (SBV) issued a document No. 6785 / NHNN-TTGSNH
dated September 7, 2011 approving the principle of merging PGBank into HDBank.

Accordingly, PGBank and HDBank are responsible for disclosing information, performing the
responsibilities of credit institutions involved in the merger in accordance with regulations.
Within 60 days, HDBank shall send to the State Bank a dossier of application for approval of the
merger according to regulations.

The merger of PGBank into HDBank was made based on voluntary principles between two
normal banks to create a merger bank (HDBank) with stronger financial strength, good
governance more, the network is wide, competitive, providing financial services to customers,
businesses, investors, bringing better benefits to customers, social community. The merger is
also based on strategic cooperation between HDBank and Vietnam Petroleum Group
(Petrolimex).

HDBank, after merger, has a chartered capital of VND15,345 billion, owns nearly 370 branches
and transaction offices, more than 15,000 financial transaction points and services covering
63/63 provinces.

2. Brief information of 2 banks

2.1. Agribank
The Vietnam Bank for Agriculture and Rural Development or Agribank (Vietnamese: Ngân hàng
Nông nghiệp và Phát triển Nông thôn Việt Nam) is the largest commercial bank in Vietnam by
total assets. It is a state-owned corporation under a special status. According to a report by the
United Nations Development Programme, Agribank is also the largest corporation in Vietnam.

The bank was founded on 26 March 1988, by Council of Ministers of Vietnam as a bank
specialized at rural and agricultural development as Vietnam Bank for Agricultural Development.
On 14 November 1990, it was replaced by the Vietnam Bank for Agriculture by a prime
ministerial decision.

Agribank is the largest bank in Vietnam by most measures: capital, total assets, staff, operating
network, and clients. Its capital as of March 2007 was VND 267.000 billion, with an equity of
VND 15.000 billion and total assets of almost VND 239.000 billion. The bank operates 2.200
branches nationwide with 30.000 staff. It is the reliable partner of over 60,000 businesses, 4
million production households and 10 million individual customers with business philosophy:
"Bring prosperity to customers".
Agribank provides over 200 modern products and services in 10 groups: Mobilization, Credit,
Domestic Payment, International Payment, Capital Business, Investment, Card, E-Banking,
Treasury and Money Management, which meet the needs of individual customers and
businesses. Moreover, the bank offers modern and diversified distribution network: Network of
branches and transaction offices along the nation, correspondent banking network to most
countries in the world, ATM, EDC / POS system, Mobile, Internet and other channels connected
with customers.

2.2. BIDV:
BIDV is a large state-owned bank in Vietnam. According to the United Nations Development
Programme report on the 100 largest enterprises in Vietnam, BIDV came in at the 4 th position
after Agribank, VNPT and EVN.

BIDV was founded on 26th April 1957. After over 60 years of operation, BIDV has developed its
network to 190 branches, 815 transaction offices over the country with about 25000 employees
(statistic was collected in 2016). Moreover, BIDV expand its branches to abroad countries such
as: Russia, Laos, Myanmar, etc. By the year 2017, the total asset of this bank was about VND
560,340 billion.

BIDV provides 4 kinds of product: banking, insurance, security and financial investment.

- Bank: is a large bank providing full range of modern banking products and services.

- Insurance: provide non-life insurance products designed in accordance with BIDV's total
package products to customers.

- Securities: provide a variety of brokerage services, investment and investment consultancy

together with the ability to rapidly develop the system of ordering agents across the country.

- Financial investment: Contributing capital to set up enterprises to invest in projects, in which

the role of coordinating key projects of the country such as: Aviation Leasing Joint Stock
Company (VALC Expressway Development Company (BEDC), Long Thanh International Airport
Investment.

In recent years, BIDV has been continuously honored with many awards: Top 1,000 Global Bank
(The Banker announced); Top 500 World's Most Valuable Bank Brand in 2018 (Brand Finance
Announces); Leading Partner Bank in Vietnam (Asian Development Bank - ADB); Domestic
banks provide the best import-export products in Vietnam (The Euromoney). Especially, on May
24, 2018, the Bank for Investment and Development of Vietnam (BIDV) was awarded the
prestigious "Best Bank for Payment Services in Vietnam" by The Asian Banker Bank.
3. Lending services of 2 banks
3.1. LENDING PROCEDURES OF 2 BANKS
Lending conditions and procedures have a close relationship with one another, which has a
great impact on the credit relationship between banks and other economic sectors. They will
reduce risk factors to ensure credit security and, create pressure to improve efficiency in
business’s economy. Thus, organizations or businesses want to borrow capital from banks to
carry out business activities, they need to ensure principals of lending conditions and
procedures in each bank.

3.1.1.BIDV (BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM JSC)

The biggest advantage of borrowing money from BIDV is the large branch network with low
interest rates, besides, you are also free consultant on the most effective and economical loan
solution, fast, simple procedure and quick disbursements. Since this is still a state-owned bank,
there are still many preferential interest rates. To borrow capital from BIDV, organizations and
businesses need to meet the following simple conditions and procedures:

 Borrowing Conditions

BIDV Bank has a simple and easy loan conditions for customers. If you meet the following
conditions, you can apply for a loan at any time:

 In the age of 20 to 60
 good working health
 Individuals of Vietnamese nationality or enterprises doing business in Vietnam;
 Customers are trading in the form and the service sector, sales agents, commercial
business, purchasing clue ...
 using bank loans to business legally, belongs to the business of BIDV
 have a stable income level to pay back loan at the time of the bank loan
 property secured loan or property guaranteed by a third part
 Do not have bad debt in the time of BIDV bank loan
 Loan Application Documents

Loan application documents are the documents required by the bank when borrowing money,
when borrowing capital from BIDV, organizations and businesses need to prepare the following
application documents:

 Personal documents: ID card / passport, household registration / temporary residence

certificate, business registration certificate (if any) …
  Profile of financial capacity: Economic contracts, books and vouchers…
 Loan application form of BIDV Bank
 Documents evidencing the purpose of the loan: Economic contract / purchase and sale
of goods, production plan...
 Asset documents: land use right certificate, house purchase contract...

3.1.2.AGRIBANK (VIETNAM BANK FOR AGRICULTURE AND RURAL

DEVELOPMENT)
When organizations or businesses want to borrow capital from AGRIBANK to carry out business
activities, they need to meet the following conditions and procedures:

 Borrowers

Borrowers of AGRIBANK include legal entities and individuals in Vietnam such as state-owned
enterprises, cooperatives, limited liability companies, joint stock companies, foreign invested
enterprises and groups. Other organizations meeting the conditions prescribed in Article 94 of
the Civil Code; Personal; Family; Cooperative group; Private enterprise; Partnerships and
foreign legal entities and individuals.

 Object for Loans

AGRIBANK is ready to meet all demands for loans for production, business, investment projects,
consumption, living, import and export, labor export ... forbidden laws.

 Forms of Credits

AGRIBANK provides credit in various forms which can be classified by duration or mode of
lending to meet the needs of capital for customers.

 Borrowing Conditions

To be eligible for AGRIBANK loan, customers must satisfy certain criteria as regulated by law as
well as regulations of AGRIBANK on the principle of ensuring benefits for both customers and
banks:

For Vietnamese customers and business organizations:

AGRIBANK considers and decides to provide loans when customers satisfy the following
conditions:

- Having civil legal capacity, civil act capacity and civil liability as prescribed by law
- The purpose of using legal loans.
 - Having the financial capability to ensure the repayment within the committed time limit:
- Having own capital involved in projects, production, business, service and life plans as
prescribed.
- Effective business: profitable; In case of losses, there must be a feasible plan for
overcoming losses and ensuring repayment within the committed time limit.
- No bad debt or overdue debt over 6 months at AGRIBANK.
- Having feasible and effective investment projects, production, business and service
plans; or have investment projects, livelihoods feasible.
- To implement regulations on loan security in accordance with the regulations of the
Government, the State Bank of Vietnam and the guidance of AGRIBANK.
For foreign customers and business organizations:

Borrowing clients being foreign legal persons and individuals must have civil legal capacity and
civil act capacity in accordance with the law of the country where the legal person is a citizen or
the individual is a citizen, if the law Such foreign law is governed by the Civil Code of the
Socialist Republic of Vietnam, by other legal documents of Vietnam or by the international
treaties which the Socialist Republic of Vietnam has signed or acceded to. Household
regulations.

 Loan Application Documents

Loan application documents are the documents required by the bank when borrowing money.
For legal entities, private enterprises and partnerships, the application file includes three main
types: legal documents, economic records, loan files.

Legal documents:

Depending on the type of business, the following must be sent to AGRIBANK for the first time:

 Decision on the establishment of the enterprise

 The charter of the enterprise (except for private enterprises)
 The decision on the appointment of the Managing Board chairman (if any), the general
director (director), the chief accountant; Decision recognizing the management board
and manager of the cooperative
 Business Registration
 A practice license (if any)
 Investment license (for foreign-invested enterprises)
 Capital contribution record, list of founding members (joint stock companies, limited
liability companies, partnerships)
 Accounting procedures as prescribed by the bank
Economic file:
  Production and business plan in the period
 Report on the implementation of production and business plans in the latest period

Loan file:

 Loan request form

 Projects, production, business, service and life projects
 Relevant documents (to be presented when borrowing)
 Loan security documents as prescribed

3.2. Business loans by maturity

Regarding time of payments, banks divide into 3 types:

 Short-term loans: a loan with term of 1 year, which can be separate into 3 levels – 3
months, 6 months and 12 months. Short-term loans rotate with the customer's business
cycle. Loans and debt collection always take place at the beginning and end of a
business cycle. Short-term loans are mainly used to meet the need for temporary
shortages of working capital in the business process of an enterprise such as the need
for capital to purchase supplies and materials or cover expenses. manufacturing. When
capital needs arise, enterprises borrow money from banks and when they are consumed,
enterprises have revenue when banks collect debts.
 Medium-term loans: a loan with a term of 1 to 5 years. This is mainly used to invest in
purchases of fixed assets, innovate or renew facilities and technology, expand of
business, develop new project with small scale and quick recovery time. Beside investing,
medium-term loans are also the source of regular working capital of enterprises,
especially new-established ones.
 Long-term loans: a loan with term of more than 5 years and the maximum can be 20-30
years, which can be 40 years in some special cases. This loan is provided to meet the
long-term need of houses, facilities, transportations with large scales, and establishment
of ne entrepreneurs.

For the short-term loan, time to recover capital is usually short, leading to lower risk as well as
interest rate compared to medium and long-term loans. Hence, short-term loans are the main
source to revenue of a bank. Meanwhile, medium and long-term loans normally provide for
projects which cannot generate revenue in the short period to recovery time is longer;
therefore, risk and interest rate is higher.

3.2.1.Agribank
Agribank offers many types of loans with such 3 levels of time.
According to financial statements of Agribank at the end of 2017, the total loan to customers
was 876.237.910 million VND, which increases by more than 17% in comparison with the
previous year.

31/12/2017 31/12/2016

Million VND Million VND

Short-term loans 516.851.440 59.8% 456.330.787 61.3%

Medium-term loans 270.454.481 30.8% 225.440.926 30.3%

Long-term loans 88.931.989 9.4% 63.042.904 8.4%

Business loans 876.237.910 100% 744.814.617 100%

Table 1. Statement of business loans of Agribank

According to the report, short-term loans accounted for the highest proportion (59.8%) of total
loans to customers, providing large capital for banks while long-term debt accounted for only
10%.

Compared to 2016, short-term loans in 2017 expands by 60.520.653 million VND and medium
and long-term loans rise 70.902.640 million VND. We can see that in the year of 2017, there is a
movement in the structure of bustiness loans – medium and long-term loans slightly go up
while short-term goes down.

In 2017, Agribank reduced interest rates for short-term loans from 7% / year to 6.5% / year and
reduced interest rates for medium and long-term loans from 8.5% / year to 8% / year for
customers who are subject to priority in accordance with Circular No. 39/2016 / TT-NHNN with
transparent and healthy financial status. Moreover, Agribank has applied many solutions to
solve difficulties in credit relations with customers; simplifying lending procedures; bringing the
mobile bank down to serve the commune for the people. Agribank has implemented 3 credit
packages of interest rate lower than the interest rate of internal capital to support customers in
hi-tech agricultural production and business, adjusting repayment term and debt extension in
accordance with Decree 55/2015. / ND-CP of the Government for 2,200 customers, the amount
of over 600 billion.

Although medium- and long-term loans are risky and less liquid than short-term loans, the
restructuring of Agribank shows that the bank has paid more attention to the financing of
short-term loans. Business activities of the enterprise due to loans for investment projects
often have a long term. However, this also means that creditors cannot pay at due, leading to
bad debts of the bank increased significantly.
 3.2.2.BIDV
In term of maturity, BIDV offers 2 main types of loans:

No. Name Characteristics

1 Short-term loans
2 Medium to long term loans
• Subjects of loans: expenses related to production and
business activities such as: purchase of raw materials,
goods, services, wages, electricity / water bills ...
• Method of loan: by item, limit.
• Type of loan: VND, USD, foreign currency.
• Loan amount: as agreed, in accordance with customer
needs.
• Loan term: up to 12 months.
• Collateral: with / without property guarantees or third-
party guarantee
• Loans: fixed investment costs such as procurement of
machinery, equipment, transportation, factory building,
office ...
• Type of loan: VND, USD, foreign currency.
• Loan amount: up to 85% of total project investment.
• Loan period
Medium-term loans: up to 5 years.
Long-term loans: over 5 years.
• Collateral: Assets formed from loans and / or other
assets as stipulated by BIDV.

For these loans, interest rate can be fixed or floated, depending on agreement between bank
and enterprise.

According to financial statements, the total business loans of BIDV is 866.885.307 million VND,
which increases by 143.187.899 million VND corresponded to 43% higher.

31/12/2017 31/12/2016
Million VND Million VND

Short-term loans 502.852.624 58.0% 396.853.660 54.8%

Medium-term loans 81.745.839 9.4% 86.399.622 11.9%

Long-term loans 282.286.844 32.6% 240.444.126 33.3%

 Business loans 866.885.307 100% 723.697.408 100%
Table 2. Statement of business loans of BIDV

As reported in 2017, short-term accounts for 58% in total loans, while medium takes 9.4% and
long has 32.6 proportion. Looking at numbers of 2 years, we can see that short-term loans sky-
rocket by 105.998.964 million VND while medium loans slightly drops by 4(.653.783 million
VND. In addition, there is an insignificant transference in the structure of loans, where medium
and long-term fall and short term raises more in term of percentage.

The reason is that BIDV, in 2017, decreases the interest rate of short-term loans in VND,
specifically: “Applying the ceiling interest rate of 6.5% annually for short-term loans in VND for
priority beneficiaries according to the regulations of the SBV”. This new announcement creates
an attractive for enterprises, especially ones in rural development, exportation, high technology
area.

3.3. Business loans by currency (VND and foreign currency):

3.3.1.BIDV:
Nowadays, BIDV provides business loans by many foreign currencies such as: USD, Euro,
Japanese Yen, Korea Won, etc. These are the table of foreign currency dealed in BIDV in
2017(changed into VND):

Foreign currency 31/12/2016 31/12/2017

USD 22,159 22,425
EUR 23,886 27,098
GBP 27,799 30,513
CHF 22,212 23,187
JPY 192,93 200,37
SGD 15,633 16,881
CAD 16,767 17,949
AUD 16,325 17,625

However, the kind of foreign currency used most is USD. These are statistics about business
loans by USD changed into million VND in the 1-year period between 2016 and 2017:

Date Loans by USD changed Loans by other currency Loans by VND (million
into million VND changed into million VND)
VND
31/12/2016 81.992.158 471306 641.169.308
31/12/2017 84.981.169 11.507.872 759.046.484

3.3.2.Agribank:
The following table describes foreign currency dealed in Agribank (changed into VND) in 2017:

Foreign currency 31/12/2016 31/12/2017

EUR 23.243 26.778
GBP 27.167 30.144
HKD 2.857 2.869
USD 22.159 22.425
CHF 21.678 22.918
JPY 190.16 199
AUD 15.988 17.478
SGD 15.304 16.766
THB 617 686
CAD 16.412 17.844
DKK 3.128 3.597
NOK 2.565 2.718
SEK 2.430 2.721
NZD 15.425 15.893
LAK 2.71 2.71
KHR 5.56 5.58
CNY 3.268 3.465

The foreign currency used most is USD. These are statistics about business loans by USD
changed into million VND in the 1-year period between 2016 and 2017:

Date Loans by USD Loans by other Loans by VND (million

(changed into million currency (changed VND)
VND) into million VND)
31/12/2016 20.097.251 408.043 724.089.323
31/12/2017 20.624.728 85.526 820.165.588

According to statistics, from 2016 to 2017, the precentage of business loans by foreign currency
increased. The figures for BIDV in 2016 and 2017 growth significantly by 17%; meanwhile, the
figures for Agribank only went up slightly by 1%. Although the proportion of credit is still in
favor of VND credit, but with the increase of foreign currency credit in the past time, not only
BIDV and Agribank but also the banking system must be careful, avoid the implications for the
control of " đô la hóa”.
These are some reasons to explain why credit by foreign currency growth in near period:

a) The SBV has once again agreed to extend the short-term foreign currency loans until the end
of 2018.

b) The domestic and international economy such as demand for foreign currency to import
goods.

c) At that time, foreign exchange rates in the country and the world continuously fluctuate
because of business war between America and China. Although the fluctuation of the domestic
exchange rate is still within the permissible range, but also partly affect the situation. foreign
currency supply of credit institutions.

d) Enterprises specializing in import and export is known, they want to borrow money in foreign
currency more than VND because of advantage in dealing with foreign partners.

e) The foreign currency lending rate plus the exchange rate in VND is still lower than that in
VND. According to the SBV, USD lending rates are currently around 2.8-6% per year; in which
short-term interest rates are popular at 2.8-4.7% per year, interest rates on medium and long
term loans at 4.5-6% per year. Meanwhile, for VND, lending rates are commonly at 6-9% per
year for short term; 9-11% / year for medium and long term.

Loans by foreign current can bring to our economy some problems. The demand for high
foreign currency loans while mobilizing foreign currencies reduced because the interest rate of
foreign currency mobilization remained at 0%, which made people less willing to send USD. In
BIDV, 2017 foreign currency credit has grown positively since the beginning of the year,
reaching about 17% at the end of the year, conversely, foreign currency deposits grew modestly,
at less than 5% and fluctuated sharply over time. Accordingly, the difference in capital
mobilization and foreign currency credit has narrowed about USD 3 billion in 2017. Therefore,
the bank needs to borrow USD with high interest rate or borrow from the abroad country. The
dollar on the international market in the past few days tend to increase the value due to the
impact of US-China tension. If the FED increases interest rates, the SBV will certainly look back
at the policy of attracting dollars, then the exchange rate will fluctuate and interest rates in USD
will increase, meaning companies borrowing in USD are very risky. In fact, many Vietnamese
enterprises that depend on foreign currency loans have suffered from heavy exchange losses
due to fluctuations of the dollar. As a result, goverment try to find the method reducing credit
by foreign currency.

3.4. Business loans by customers ( individual and corporate):

3.4.1.Business loans by individuals

In the form of personal consumption credit, the bank lends money to the employees for the
purpose of transferring real estate, building, repairing houses, purchasing and repairing means
of transport, learning and other purposes. In general, individual needs are varied and plentiful.

• Consumer loans: purchase of vehicles, purchase of living facilities ...

• Loan for purchase, construction, repair and upgrading of housing

• Loans for production and business

• Loans for export labor

• Student loans

• Other loans: Discounted valuable papers, advances on securities sales, bank guarantees ...

 Some main loans by individual customer in BIDV:

Number Name of loan Features
1 Loanfor purchasing,repairing -The maximum loan term is 20 years
and upgrating of house -Maximum loan amount is 100% of house
and land value
-Loan security: assets formed from loan funds
or other security assets of customers
2 Car loan -Maximum loan amount is 95% of car
purchase value
-The loan period is 5 years
-Loan security: Car or other household assets
of car buyers.
3 Unsecured Loans -Unsecured Personal Loans are non-
collateralized credit products intended for
individual clients with stable incomes to meet
their diverse consumer needs and family
- No need to loan security
- There is no mandatory BIDV account
- Attractive loans: maximum 10 months of
income and can be up to 500 million
- The term may be up to 60 months
- Low interest rates guarantee maximum
benefit of customers
4 Collateral overdraft -A form of BIDV for customers who are
overpaid in their deposit account opened at
BIDV.
- No need to loan security
- Overdraft limit: Maximum is 5 months of
 income and can be up to 100 million
-Term can be up to 12 months for first time
customers, 36 months with qualified
customers to be extended by the bank.
-Reasonable interest rates
5 Discount / lending to secure -BIDV acquires or lends to the borrowers that
valuable papers / savings valuable papers / savings certificates are
cards issued by the government, BIDV and other
credit institutions. issued to meet the needs
of customers when valuable paper / savings
card is not due.
- Loan / discount: up to 100% of the value of
valuable papers / savings card
- Flexible term of loan: BIDV and the
customer breathe in
- Low interest rates
6 Loan for studying abroad -This is a product for customers who need
financial assistance to apply for a study
permit and study abroad expenses during
their study abroad.
- Maximum: 100% tuition and study expenses
- A maximum time of 10 years
- Interest on debt outstanding decreases
-Loan security: the collateral is owned by the
borrower itself or guaranteed by a third
party.
7 Loans for production and - Borrowing capital for production, business
business and investment purposes:
- High loan limits
- A diversified form of property mortgage
-Borrowing loans with diversified business
purposes

 Some main loans by individual customer in Agribank:

Number Name of loan Features
1 Loans for the purchase of - Type of loan: VND;
household goods - Loan term: maximum 60 months;
- Loan amount: up to 80% of the cost;
- Interest rate: fixed and floating;
- Loan guarantee: yes / no guarantee with
property or guarantee of a third party;
2 Loanfor purchasing,repairing - Type of loan: VND
and upgrating of house
3 Loan for valuable paper - Valuable papers are pledged: savings books,
mortgage
4 Loans to buy vehicles
5 Loans to support study abroad - Type of loan: VND, foreign currency.
6 Providing credit loans to - Credit limit: Agreement, maximum up to 200
households business
- Loan term: not exceeding 15 years.
- Loan amount: up to 85% of total estimated
capital demand or total value of house
purchase contract.
- Interest rate: fixed and floating.
-Loan guarantee: secured by property or
guarantee of a third party.
promissory notes issued by commercial banks;
treasury bills, treasury bonds and bonds;
stocks, bonds and fund certificates issued by
enterprises.
- Currency: VND
- Loan term: not exceeding the remaining
payment term of valuable papers. For listed
shares, bonds and fund certificates: no more
than 06 months.
- The loan amount shall be equal to the
principal plus interest minus the interest
payable in the loan term; maximum of 50% of
market price at the time of lending for listed
securities
- Interest rate: fixed and floating.
- Type of loan: VND.
- Loan term: short term, medium term, long
term.
- Loan amount: agreed, not more than 85% of
total cost.
- Interest rate: fixed and floating.
- Loan security: yes / no security with assets;
third party guarantee.
- Loan terms: short, medium, long term.
- Loan amount: agreed, not more than 85% of
cost
- Interest rate: fixed and floating.
- Loan security: yes / no security with assets;
third party guarantee.
million;
- Type of loan: VND;
- Credit limit: To maintain a maximum of 03
years;
 - Customers can withdraw funds when there is
a demand within the credit limit;
- Interest rate: fixed and floating;

 The percentage of individual loans in two banks between 2016 and 2017:

The percentage of individual loans in BIDV and

Agribank between 2016 and 2017

31/12/2017 68.10%
54.70%

31/12/2016 63.04%
54.04%

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% 100.00%

Agribank BIDV

According the chart, the proportion of individual loans in two banks in period from 2016 to
2017 went up. Agribank saw a significant increase in this figure by about 5%, meanwhile there
was a slight growth in the figure in BIDV by about 1%.
In the near years, this percentage always goes up because of some reasons:
1. The demand for shopping, studying abroad, business loans of individuals and households are
increasing.
2. Interest rates of loans in banks are lower than in the market.
3. Individual loan procedures are simple.
4. Loans by individual are very various.

3.4.2.Business loans by corporate customer:

 Some main loans for corporations for BIDV:

No. Name Characteristics

1 Loan for project investment • Loan subject: all reasonable costs associated with
the project.
• Type of loan: VND, USD, foreign currency.

2 Overdraft
3 Funding businesses by sector
4 Discounted valuable papers
 Some main loans for corporations of Agribank:
No. Name
1 Credit line loans
• Loan amount: up to 85% of total investment.
• Loan term: up to 15 years.
• Collateral: Assets formed from loans and / or
other assets as stipulated by BIDV
• Loans: working capital costs.
• Conditions: Customers have VND deposit
accounts at BIDV, meeting criteria of financial
status and payment prestige.
• Type of overdraft: VND.
• Limit of overdraft: up to VND 5 billion. In cases
where the demand for overdraft is over VND5
billion, BIDV will be considered if it meets some
additional conditions.
• Time limit for issuance of overdraft limit:
maximum 12 months and considered for annual re-
allocation.
• Collateral: no collateral required if BIDV criteria
are met.
• Modalities of financing: Loans, guarantees, limits.
• Funding level and duration: diversified, suitable
for business.
• Collateral Assets: Assets that are conventional,
and other assets according to sectoral
characteristics.
• Subject of discount: Pre-maturity payment
(issued by BIDV).
• Discount method: discount for a period or
discount of the remaining period of validity.
• Discount type: VND, foreign currency in
accordance with the currencies listed in the
Government Gazette and regulations on foreign
exchange management.
• The discount amount: up to 100% of par value, in
accordance with the discount method / term,
interest rate and interest payment method.
• The discount period: up to the payment period of
the GTCG.
Characteristics
- Type of loan: VND.
- Credit term: up to 12 months.
 - Loan amount: negotiable, customers with equity of at
least 10% of total capital.
- Disbursement: many times.
- Repayment of principal and interest: repayment of
principal once or several times, repayment of interest
monthly or periodically as agreed.
2 Loans under investment - Type of loan: VND, foreign currency
projects - Loan term: medium term, long term.
- Loan amount: negotiable, customers with equity of at
least 15% of total capital
- Interest rate: fixed or floating.
- Loan guarantee: yes / no guarantee with property or
third-party guarantee.
- Disbursement: once or several times.
- Repayment of principal and interest: Repayment of
principal or interest, repayment of interest monthly or
periodically as agreed.
3 Loans preferentially for - Type of loan: VND
export - Loan term: maximum 6 months.
- Loan amount: negotiable, customers with equity of at
least 10% of total capital.
- Interest rate: fixed and floating.
- Loan guarantee: yes / no guarantee with property or
third-party guarantee.
- Disbursement: once or several times.
- Repayment of principal and interest: Repayment of
principal or interest, repayment of interest monthly or
periodically as agreed.
- Pay before maturity: Interest is paid from the borrowing
date to the repayment date. The amount of prepayment
fee specified in the contract.
4 Syndicated loans - Type of loan: VND, foreign currency.
- Own capital: The self-funded capital plan shall cover at
least 10% of the total demand for short-term loans and
20% of the total demand for medium and long-term loans
for the Government's Decree No. 41 and Decision No. 63;
25% for other plans.
- Beneficiary: The borrower is a legal entity that needs a
loan that exceeds Agribank's ability or exceeds 25% of
Agribank's own capital.

These are tables which illustrates the amount of business loans by corporate customer in BIDV
and Agribank:
BIDV:
Kinds of enterprise 31/12/2016 ( VND million) 31/12/2017 ( VND million)
State-owned 27.013.648 37.767.528
Cooperatives 657.004 4.913.169

Joint Stock Company, 175.763.035 193.261.044

Limited Liability Company
Private enterprise 1.274.354 6.145.500
Foreign-invested 21.157.102 27.054.057
enterprises
Total 225.865.144 269.141.298

Agribank:
Kinds of enterprise 31/12/2016 ( VND million) 31/12/2017 ( VND million)
State-owned 10.790.504 10.386.836
Cooperatives 1.239.171 1.376.723

Joint Stock Company, 194.913.011 251.237.430

Limited Liability Company
Private enterprise 19.533.879 3.876.880
Foreign-invested 823.830 3.084.986
enterprises
Total 227.300.395 269.962.855

The 1-year period from 2016 to 2017 saw a dramatic increase in the amount of loan by
corporate customer in both 2 banks. The figures for BIDV in 2016 and 2017 were under
226.000.000 VND million and under 270.000.000 VND million, respectively. The figures for
Agribank in 2016 and 2017 were 227.300.395 and 269.962.855, respectively.
Specially, the kind of loan by corporate customer accounted for the highest rate is loan of Joint
Stock Company, Limited Liability Company, which is the most popular kind of enterprise in
Vietnam at present. As a rresult, the demand for bank loans of this type is the highest; in BIDV,
the propotion of loan by corporate customer accounted from 72% to 77% while the figure for
Agribank was from 85% to 93%.
On the other hand, in recent years, foreign investors have invested and built a lot of companies
in Vietnam, so the demand for loans of foreign invested companies increased dramacially. In
BIDV, the amount of loans of foreign invested companies grew up ,at 28.6%, whereas, Agribank
saw a sharp increase in this figure, at 274%.

3.5. Business loans by risk:

These are 5 types risk of loans: number of days overdue

Group Type Number of days overdue Specific redundancy rates

1 Standard loans Under 30 days 0%
2 Special mentioned loans From 30 days to 90 days 5%
3 Sub-standard loans From 90 days to 180 days 20%
4 Doubtful loans From 180 days to 360 days 50%
5 Potentially inrecoverable Above 360 days 100%
loans

This is the table of analysis of loan quality in BIDV in 2016 and 2017:

Type 31/12/2017 31/12/2016

VND million % VND million %
Standard loans 822.297.721 94,86 682.185.112 94,26
Special 30.523.477 3,52 27.083.337 3.75
mentioned loans
Sub-standard 3.749.610 0.43 6.481.930 0.9
loans
Doubtful loans 5.084.324 0.59 1.035.811 0.14
Potentially 5.230.175 0.6 6.911.218 0.95
inrecoverable
loans
100 100

This is the table of analysis of loan quality in Agribank in 2016 and 2017:

Type 31/12/2017 31/12/2016

Million VND % Million VND %
Standard loans 828.531.062 94.56 697.645.070 93.67
Special mentioned loans 29.706.586 3.39 31.695.246 4.26
Sub-standard loans 4.484.808 0.51 1.520.242 0.20
Doubtful loans 2.463.014 0.28 3.341.667 0.45
Potentially irrecoverable loans 11.052.440 1.26 10.612.392 1.42
876.237.910 100 744.814.617 100

According to the statistic, the percentage of bad debt in BIDV went down in the period between
2016 to 2017 from 1.99% to 1.62% and the proportion of standard loans grew slightly by 0.6%.
In Agribank, the figure for bad debt also went down between 2016 and 2017 from 2.07% to
2.05%. Although it was higher than the proportion of bad debt of other banks, this change was
a positive change for the financial situation of Agribank. Both of banks reduced the percentage
of bad debt due to some reasons:

- 2 banks have policies that control the level of debt safety.

- The ability of provision for loan is better.

- In the recent year, economy is recovering after crisis so enterprisses are able to pay loan on
time.

3.6. Contingent liabilities

Contingent liabilities are liabilities that may be incurred by an entity depending on the outcome
of an uncertain future event such as the outcome of a pending lawsuit. These liabilities are not
recorded in a company's accounts and shown in the balance sheet when both probable and
reasonably estimable as “contingency” or “worst case” financial outcome. A footnote to the
balance sheet may describe the nature and extent of the contingent liabilities. The likelihood of
loss is described as probable, reasonably possible, or remote. The ability to estimate a loss is
described as known, reasonably estimable, or not reasonably estimable. It may or may not
occur.

This is the guaranteed liquidation in the future, because of the “commitments” not the
immediate performance so it is not shown in balance sheet that is shown in off-balance-sheet.

 Classification of off-balance-sheet commitments

In accordance with Circular 02 of the SBV, credit institutions should classify guarantees,
acceptances of payment and unconditional, irrevocable loan commitments with specific
effective date (collectively referred to as “off-balance-sheet commitments”) as stipulated in
Article 9, Article 10 or Article 11 of Circular 02. Accordingly, off-balance-sheet commitments
are classified by risk level as follows: standard (less than 30 days), special mention (30 – 90
days), substandard (90 – 180 days), doubtful (180 – 360 days) and loss (more than 360 days),
based on overdue status and other qualitative indicators.
Here are contingent liabilities of BIDV in financial statement 2017 which is shown under “other
commitments” such as guarantees. According to this, you can see the total guarantees at the
end of fiscal year increase more than 20,000,000 million VND compared with the beginning of
fiscal year. It includes credit guarantees that increase more than 600,000 million VND and other
guarantees that increase more than 20,000,000 million VND. These things show that BIDV
performed more guarantees for borrower and they must face with credit risk if borrower has
no solvency.

Today, BIDV expanded their market in Cambodia and Laos, so they also classify loans and
provide for credit losses in Cambodian and Laos markets.

3.7. Collaterals
Collateral is a property or other asset that a borrower offers as a way for a lender to secure the
loan. If the borrower stops making the promised loan payments, the lender can seize the
collateral to recoup its losses. Since collateral offers some security to the lender should the
borrower fail to pay back the loan, loans that are secured by collateral typically have lower
interest rates than unsecured loans. A lender's claim to a borrower's collateral is called a lien.
Let’s find out more about two of the biggest banks in Vietnam.

3.7.1.BIDV

3.7.1.1. Individual customers

3.7.1.1.1. Loan secured by mortgage of real estate

 You have financial requirement for expenditure, you have secured property like fixed assets
with full property certificate, you need an easy and convenient procedure… Product-related
loan which is secured by mortgage of real estate will satisfy your demands.

 Benefits
- Easy and simple lending procedure
- The maximum loan reach to 1 billion VND for product and 500 million VND for overdraft
- Flexible loan period: 84 months
- Fast loan approval.
 Criteria
- Customers should have long-term residence or permanent job in the same city/province with
the lending branch’s location
- Customers have regular and stable income and guarantee loan-paying ability during period
- Customers have reasonable aim.
 Secured property
- Real estate is home/land which is granted legal land use right certificate
- Real estate is owned by customer, customer’s wife/husband or customer’s
mother/father/brother/sister
 Lending profile
- Loan proposal (according to BIDV form)
- Land use right certificate
- Financial situation demonstration papers/confirmation for salary
- Loan use purpose papers
3.7.1.1.2. Loan secured by the mortgage of Valuable Papers/Certificate
of fixed deposit - Discount of Valuable Papers

 Benefits:
o Loan/Discount amount: up to 100% of value of Valuable Papers/Certificate of fixed
deposit
o Flexible loan/discount term
o Competitive interest rate/discount rate
o Methods of borrowing/discounting:
 Mortgage loan: can be tranch loan or depending on credit limit.
 Discount: term discount or can be the remaining term of Valuable
o Papers/Certificate of fixed deposit
o Flexible repayment schedule, depending on the client’s solvency.
 Application criteria:
o Clients: Vietnamese or foreign individuals.
o Valuable Papers/Certificate of fixed deposit: under the legal ownership of borrower
(or of the third party) and in one of the following types:
+ Treasury bills, Treasury bonds, Government construction bonds...

+ Bills issued by The State Bank of Vietnam

 + Saving cards, Certificate of Deposits, Bonds... issued by BIDV or other banks.

(For Valuable Papers/Certificate of fixed deposit not issued by BIDV: must be verified and
approved holding during the borrowing by the issued bank).

 Required documents:
- Valuable Papers/Certificate of fixed deposit;
- Loan application form;
- Valid Identification card/Passport of borrower and other owners of Valuable
Papers/Certificate of fixed deposit (if any)
3.7.1.1.3. Car loan
Ready for a new car? BIDV Car Loan can help you purchase your vehicle for personal or business
purposes.

 Features and Benefits

- Simple and convenient procedure
- Competitive interest rate, interest calculated on reducing balance
- Preferential interest rates and discounts on related charges under BIDV’s promotions
periodically
- Loan amount up to 100% of car value
- Loan terms up to 7 years
- Expert advice
 Application criteria
- Vietnamese citizens or expatriate individuals
- Residing or regularly working in the same area or in the adjacent areas with the
financing BIDV branch
- Regular and enough income for repayment
- Collaterals meet BIDV’s requirements
 Collaterals
- Collateral is the car to be purchased.
- Other collaterals owned by the borrowers or a third party.
- Combination of both.
 Documentation
- BIDV loan application form
- Valid Identity Card/Passport, Permanent/Temporary Residence Certificate
- Documents regarding the vehicle: sales contract, invoices, etc.
- Proof of income: employment contracts, Pay slips, etc.
- Documents related to other collaterals
- Other related documents (if any)
3.7.1.1.4. T-day securities loan
* Benefits:
- Meeting immediately investor’s need for advance payments of listed securities sale.

- Supporting clients in managing capital for securities investments.

- Clients may make use utilities of BIDV’s current account.

- High loan amounts.

- Loan term: max to 3 working days.

- Term of using credit limit: up to 12 months

- Interest rates: as agreed by BIDV and Clients.

* Application criteria: Customers should:

- Have securities transactions at Securities companies linked with BIDV@ Securities program
(Please contact Securities companies for more details).

- Open a current account at BIDV.

- Be certified by a Securities company for successful transactions and un-received payment.

* Required documents:

- Valid Identification card/Passport of Borrower

- T-day securities loan application form and Application of advance payment for each
disbursement.

3.7.1.2. Corporate customers

3.7.1.2.1. Car loan

BIDV’s product to finance enterprises to purchase car for travelling and other business purposes.

 Features

- Conditions for cars: with 04-45 seats, brand new or used.

- Loan amount: in accordance with customers’ demand, credit rating, solvency and car’s
features.

- Loan term: up to 05 years.

- Collaterals: the car formed from the loan and/or other assets as specified
  Benefits

- Documents and procedures are simple, flexible (investment project is not required).

- Quick processing (maximum duration for procedure completion is 02 working days of BIDV’s
receiving adequate documents).

- Competitive and reasonable interest rate, mechanism.

- Flexible and various collaterals.

- Maximum loan support.

 Documents
- Application for loan cum loan repayment plan under the form of BIDV.

- Enterprise’s financial, legal documents

- Collateral documents

- Other documents as specified by BIDV.

3.7.1.2.2. II. Loans for fixed asset investment

BIDV's loan product to meet enterprises’ demands of fixed asset investment such as new
investment, capacity expansion investment, and technological innovation investment for
production and business activities in a flexible way.

 Features

- Subjects: fixed assets formed under Investment projects/small, single assets.

- General conditions for investment assets:

+ Assets with enough documents proving clear origin and legality.

+ Assets allowed in transactions without dispute.

+ Assets being 100% new or second-hand having at least 80% of remaining value after being
used.

- Loan amount:

+ For fixed asset loan for project investment: in accordance with demands, credit rating and
solvency of customers.
+ For small, single fixed asset loan: up to 90% of cost for new purchase; up to 80% of remaining
value for used assets.

- Loan term: in accordance with demands, credit rating and solvency of customers.

- Collaterals: assets formed from the loan and/or other assets as specified.

 Benefits

- Documents and procedures are simple, flexible and suitable for investment assets’ features
(investment project is not required).

- Competitive, reasonable interest rate, mechanism.

- Flexible security measures.

- Giving maximum loan support.

 Documents
- Application for loans under the form of BIDV. For small, single asset investment, the
enterprise is not required to prepare project loans.

- Enterprise’s financial, legal documents.

- Loan documents for fixed asset purchase (For small, single asset investment, the enterprise is
not required to prepare project loans).

- Loan guarantee documents.

- Other related documents as required by BIDV.

3.7.1.2.3. Project investment loan

BIDV’s mid-and long-term finance product for investment in projects implemented in Vietnam
and certain countries/territories in accordance with the law and BIDV’s regulations for each
period.

 Features

- Subjects: projects need all reasonable costs.

- Currencies for loan: VND, USD, EUR, JPY and other foreign currencies.

- Loan amount: up to 85% of total investment.

- Loan term: up to 15 years.

- Collaterals: assets formed from the loan and/or other assets as specified by BIDV.

 Benefits

- Flexible loan amount and loan term, being suitable for business projects.

- Competitive interest rate and service charges.

- Being provided with consultancy, supported with necessary information regarding investment
projects.

- Being provided with products, services to support throughout the project implementation.

 Documents

- Project documents, loan options.

- Enterprise’s financial, legal documents.

- Loan guarantee documents as specified by BIDV.

- Other related documents as required by BIDV.

 Specific products:

Currently, BIDV is providing specific loan products including loans for hydroelectric project
investment, loans for real estate investment projects, building construction loans, shipbuilding
loans, etc.

3.7.1.2.4. Working capital loan

BIDV's loan product to meet demands for regular working capital for enterprises’ production,
business and services.

 Features

- Subjects: enterprises who need costs for production and business activities such as, costs for
buying materials, goods, services, paying salary, utilities, etc.

- Lending method: one-time, limits.

- Currencies for loan: VND, USD, EUR, JPY and other foreign currencies.

- Loan amount: on agreement basis, suitable to customers’ demands.

- Loan term: up to 12 months.

- Collateral: with/without collaterals or third-party guarantee.

 Benefits

- Selection from a number of lending methods which are suitable to the enterprise’s type of
business.

- Multi-currency loans.

- Flexible loan term, being suited to the enterprise’s cash flow.

- Reasonable and competitive interest rate; either fixed or floating rate which is suitable for the
enterprise’s demands.

 Documents

- Loan documents as specified by BIDV.

- Enterprise’s financial, legal documents

- Loan guarantee documents as specified by BIDV. - Other related documents as required by

BIDV.

3.7.1.2.5. Industry-specific loan

In addition to common credit products for corporate customers, BIDV offers package products
suitable for enterprises’ demands and specific features under different business lines.

 Benefits

- Enjoying preferential interest rates for loans, discounts, deposits, foreign exchange rates,
service fees (domestic/international payment, cargo insurance, cash flow management,
Internet banking, etc.) when using BIDV’s diversified products for each period.

- Flexible collaterals, suitable for customers’ demands.

- Financing amounts and terms best meeting enterprises’ demands.

 Documents

- Project documents, loan options.

- Enterprises’ financial, legal documents.

- Enterprises financial documents.

- Loan guarantee documents as specified by BIDV.

- Other related documents as required by BIDV.

 Specific products

* Petroleum corporate financing

- Financing amount: up to 100% of the contract/order/business plan value.

- Financing term: up to 04 months for loans and up to 12 months for guarantee.

- Interest rates/fees: preferential interest rates/fees if customers use BIDV’s closed package
services.

- Collaterals: unsecured loans, reserved petroleum in stock, debt claim rights and other assets
as specified by BIDV.

* Textile and garment corporate financing

- Financing amount: in accordance with demands, credit rating and solvency of customers.

- Financing terms:

+ Medium and long-term: up to 10 years for fiber production projects and 7 years for the rest
projects.

+ Short–term: up to 6 months.

+ Guarantee: suitable for the term for customers to perform their obligations as committed
with the guarantee recipient.

- Interest rates/fees: customers shall be exempted from/reduced interest rates/fees in the case
where they fulfill commitments (revenue transfer, using package services or products, etc.)

- Collaterals: debt claim rights formed in the future, inventories and other collaterals as
specified by BIDV.

* Financing for export processing enterprises

- Financing amount: in accordance with demand, credit rating and solvency of customers.
- Financing terms: up to 06 months for loans; term duration for guarantee is suitable with
customers’ demands and term for customer to perform their obligations as committed with the
guarantee recipient.

- Interest rates/fees: customers shall be exempted from/reduced interest rates/fees in the case
where they fulfill the commitment (revenue transfer, using package services or products, etc.)

- Collaterals: debt claim rights formed in the future, inventories and other collaterals as
specified by BIDV.

* Financing for pharmaceutical enterprises

- Financing amount: up to 80% of collateral value.

- Financing term:

+ Medium and long-term: in accordance with demands, credit rating and solvency of customers.

+ Short–term: up to 08 months.

- Guarantee: suitable with customers’ demands and term for customer to perform their
obligations as committed with the guarantee recipient.

- Interest rates/fees: customers shall be exempted from/reduced interest rates/fees in the case
where they fulfill the commitment (revenue transfer, using package services or products, etc.)

- Collaterals: Deposits/Valuable papers, real estate, personal properties and other assets as
specified.

3.7.1.2.6. VI. Supply chain financing

BIDV’s form of financing programs (loans, guarantee, discount, overdrafts, opening Letter of
Credit, etc.) for “Supply chain” enterprises (e.g. suppliers, distributors) of central enterprises
with incentives and competitive policies aimed to give closed package support to the supply
chain - production - distribution of customers.

 Features

- Subjects: enterprises that supply input materials (suppliers) or consume output finished goods
(distributors) for central enterprises.

- Financed subjects: working capital costs for production and business to purchase materials,
produce, consume, or distribute goods for central enterprises.
- Financing amount: based on satellite enterprises’ capital demands, sales and determined
according to each specific financing program.

- Financing term: up to 12 months (for loans) and/or in accordance with term to perform
committed obligations (for guarantee).

- Interest rates and charges:

+ Interest rates: as specified by BIDV

+ Charges: Free for money transfer between central enterprises and “satellite” enterprises
within BIDV.

- Collaterals: debt claim rights formed in future, inventories and other secured assets as
specified by BIDV.

 Benefits

- For central enterprises: managing cash flow and liability effectively, minimizing risks and
management costs because BIDV helps them manage payables/receivables.

- For suppliers, distributors:

+ Being supported with maximum financing capital, timely and flexible in terms of collaterals.

+ Enjoying preferential interest rates and service charges.

+ Maximizing profits thanks to utilizing loans effectively and enjoying central enterprises’
discounts thanks to change from deferred payment to cash payment.

+ For distributors: Being supported to manage payables.

 Documents

- Enterprise’s financial, legal documents.

- Application documents, loan options.

- Loan security documents.

- Other documents as specified by BIDV

All of the above lending methods have the secured property which is called collateral, it is just
only different in application criteria, documents and loan period.

3.7.2.AGRIBANK
 3.7.2.1. Individual customers

3.7.2.2. Corporate customers

3.7.2.2.1. Short-term loans for production and business (one loan at a

time)
Agribank provides loans for customers including state-owned enterprises, cooperatives, limited
liability companies, joint-stock companies, foreign-invested enterprises, private firms,
partnerships and other types of organizations who meet the requirements as stipulated in
Article 94 of the Civil Law, to cover the shortage of capital for production and business.

- Currency: VND

- Type of loan: Short-term

- Loan amount: upon negotiation. Customers must have equity participation of at least 10% of
the total capital needs.

- Lending rates: fixed, floating

- Loan security: with or without assets as collateral and third-party guarantor

- Disbursements: full disbursement or in partial disbursements (multiple disbursements)

- Repayment of principle and interest: single or multiple principle payment, monthly repayment
on interest or regular repayment as negotiated.

 Short-term working capital loan

Agribank provides short-term working capital loan for enterprise customers that need short-
term working capital loans regularly.

- Currencies: VND

- Term: short term, not exceeding the duration of the next financing

- Loan amount: not exceeding loan amount of the previous credit contract, customers must
have equity participation of at least 10% of the total capital needs.

- Interest rate: rates applicable at the time of loan

- Loan security: with or without assets as collateral or third-party guarantor

- Disbursements: full disbursement or in partial disbursements (multiple disbursements)

- Repayment of principle and interest: single or multiple principle payment, monthly repayment
on interest or regular repayment as negotiated.

 Fixed assets loan

Agribank provides enterprise customers with “fixed assets loan” for buying fixed assets such as
factories, heavy equipment and industrial machinery for project purposes.

- Currencies: VND, foreign currencies

- Term: medium to long term

- Loan amount: upon negotiation, customers must have equity participation of at least 15% of
the total capital needs.

- Interest rate: fixed, floating

- Loan security: with or without assets as collateral or third-party guarantor

- Disbursements: full disbursement or in partial disbursements (multiple disbursements)

- Repayment of principle and interest: single or multiple principle payment, monthly repayment
on interest or regular repayment as negotiated.

 Syndicated loan
Legal entities, private enterprises, cooperatives or companies with borrowing needs for
business operations much larger than standard limits allowed by Agribank can apply to use
“syndicated loan” of Agribank.

- Currency: VND, foreign currencies

- Maximum loan term: 12 months

- Loan amount: customers must have equity participation of at least 10% of the total short-term
capital needs and of 20% of total medium to long term capital needs.

- Interest: fixed, floating

- Loan security: with or without assets as collateral, or by 3rd party guarantor

- Lending method: single or multiple lending as requested by customers

- Repayment of principle and interest: single or multiple principle payment, monthly repayment
on interest or regular repayment as negotiated.
  Loans to project as directed by the Government
Loans to projects as directed by the Government” is aimed to support enterprises with costs of
production and business operation under projects funded by the Government.

- Currencies: VND

- Term: short, medium and long term

- Loan amount: specified in Government’s instructions

- Interest rate: fixed, floating

- Loan security: with or without assets as collateral or third-party guarantor

- Disbursements: full disbursement or in partial disbursements (multiple disbursements)

- Repayment of principle and interest: single or multiple principle payment, monthly repayment
on interest or regular repayment as negotiated.

 Preferential loans for export activities

Agribank provides its loyal business customers who do payment transactions at Agribank, open
forward contracts to sell foreign currencies to Agribank, have export contracts and sources of
revenue in foreign currencies with “preferential loans for export activities” to support them
with costs of purchase, production, and processing of export goods.

- Currencies: VND

- Term: maximum term: 6 months

- Loan amount: upon negotiation, customers must have equity participation of at least 10% of
the total capital needs.

- Interest rate: fixed, floating

- Loan security: with or without assets as collateral or third-party guarantor

- Disbursements: full disbursement or in partial disbursements (multiple disbursements)

- Repayment of principle and interest: single or multiple principle payment, monthly repayment
on interest or regular repayment as negotiated.

- Repayment before term: interest calculated from the date of borrowing to the date of
repayment. Total fees paid before the term is stated in the contractual agreement.

 Loans for infrastructure projects

Agribank provides this product to assist enterprises with costs to finance infrastructure projects.

- Currency: VND

- Term: short term, medium and long term

- Loan amount: maximum at 70% of the total estimated costs of infrastructure project

- Interest: fixed, floating

- Loan security: with or without assets as collateral or third-party guarantor

- Disbursements: full disbursement or in partial disbursements (multiple disbursements)

- Repayment of principle and interest: single or multiple principle payment, monthly repayment
on interest or regular repayment as negotiated

- Repayment before term: interest calculated from the date of borrowing to the date of
repayment. Total fees paid before the term is stated in the contractual agreement.

 Cash advances for selling securities

Domestic and foreign business customers having current accounts at Agribank for securities
trading with branches and order-receiving agencies of Agribank Securities Company (Agriseco)
can get advances from selling securities after they sell by using “cash advances for securities
securities” service. Type of securities: Listed securities

- Currencies: VND

- Term: not exceeding 3 working days from the time of receipt of trading result confirmation

- Loan amount: the maximum amount would equal to the amount the seller receives from the
transaction after deducting interest and other fees (brokerage, etc.).

- Interest rate: interest is calculated on short-term interest rates at the time of the loan divided
by (:) 30 days, plus (+) a minimum of 0.01% per day.

- Loan security: without assets as collateral based on trading result confirmation of Agriseco or
its branches

- Disbursements: full disbursement or in partial disbursements (multiple disbursements)

directly into account opened at Agriseco or Agriseco’s branches

- Repayment of principle and interest: single or multiple principle payment, monthly repayment
on interest or regular repayment as negotiated, the sale of securities must be put into account
of the seller to collect the debt, the difference between the amount received and the debt
payments will be paid to the seller upon request.

- Repayment before term: interest calculated from the date of borrowing to the date of
repayment. Total fees paid before the term is stated in the contractual agreement.

3.8. BIDV LOANS INTEREST RATE 2018

BIDV Bank lending rate 2017 reduced interest in many interest rate, loan term of BIDV Bank
applied to 30/06/2017

 Business loans

7,000 bil (up to 06/07/2017)

the preferential interest rates only from 6.7% - 7% per year.

 Housing loans, insurance

12,000 bil package(up to 30/06/2017)

the preferential interest rates only from 7.1% per year.

Loan duration: 60 months

 CAR loan package

2,000 billion ( up to 29/08/2017).

the preferential loan interest only from7.1% to 8.1% per year.

 Collateral loans: 7% (1st year), 3-3,5% (the following year).

AGRIBANK LOANS INTEREST RATE 2017

Diễn giải Vay ngắn hạn(/ năm) Vay trung- dài hạn(/năm)
1. Cho vay bổ sung vốn 7% 8% - 9 %
kinh doanh
2. Cho vay tiêu dùng 9% 10%
3. Cho vay mua nhà ở 8% 9%
4. Cho vay thấu chi 12%-15% -
5. Cho vay nông nghiệp Trung bình 6.5%
 Agribank reduced interest loans

 10/7/2017, short-term loan interest rate reduction from maximum 7% per year to a
maximum of 6.5% per year and reduce the high lending interest rates long term, from
8.5% per year down from 8% per year for priority clients.
 Collateral loans interest 2017 6-8% : This is quite attractive interest rates by comparison
with other banks, then this number is smaller than about 2%.

4. Current issue in business lending of banks in Vietnam

In a recent online exchange of Bizlight Business School website entitled "Risk of legal action in
lending activities", economist - lawyer, Dr. Bui Quang Tin, the problem is that the bank will rely
on where to find the business functions appropriate to the needs of the loan or not? And based
on where to know the business is actually qualified conditional business.

In our country the risk in banking business and management problems it is not new. With a lack
of banking expertise and a risky environment, specific risk awareness and management issues
are an urgent issue in the banking system nationwide. The management of banks is less active;
the risk is more likely to arise. It does not show the full potential of its own, damage to the
economy will occur.

Banking risk is not only the haunt of the banking system but also the general haunt of the
banking system in the world. Surprises always happen to the banks with the best staff, the most
experienced also unpredictable risk. Therefore, recognizing the risks in lending are the current
issues for the banking system. There are two main types of risk that occur in lending in the
banking system.

Financial risks include:

 Loan repayment risk: When the borrower does not pay or fully repay the loan when due
to the difficult business situation leading to the loss of the ability to pay temporarily or
expired A borrower intentionally does not pay the loan due to intent or fraud.
 The amount of money collected (both principal and interest) cannot cover the capital
that the lender spends to lend.
 Risk of exchange rate change: As foreign currency loans are increasing, along with other
operations, banks must be directly involved in the foreign exchange market. From loan
signing to disbursement. The bank needs a certain amount of time. It is therefore
difficult to avoid the risks that occur when the exchange rate changes.+ The risk of
changes in the average interest rate on the market affects the interest rates applied by
banks in lending transactions. Interest rate of commercial banks is determined on the
 average interest rate the market and the interest rate policy of the bank. This interest
rate is applied to the borrower for the duration of the loan (fixed rate loan contract).
Therefore, at that time, if there is a big change in interest rates, it will affect the bank's
performance, especially its competitiveness in the market. Asset risks ensure price
fluctuations. This risk occurs when collateral is being replaced or taken over or stolen.
This causes the bank to lose money when it liquidates to cover the loan.
 Credit risk: In addition to interest rate risk, credit risk is also a major risk to the
operations of the commercial banks. This risk occurs when bank's borrowers fail to
perform or is unable to perform its obligations under the undertaking, including
repayment commitments principal, interest due on time and other payment
commitments. Causes of credit risk are:
• This can be attributed to the decrease in business performance of that bank's
clients
• The decline The downside of the industry is that customers operate or the
economy in general.

According to LS.TS, there are still regulations that require business lines to be recorded on some
documents of enterprises, such as registration notice, change, adjust business content of
enterprises, Accordingly, banks have to renovate their business, instead of just having a
business registration certificate, they must actively store and evaluate the new documents as
above. If not, the risk of businesses doing business illegally manifested, and banks still face the
challenge of being attributed loans to the purpose of using capital.

Sharing this view, Vu Quyet Tien, a member of the Ho Chi Minh City Bar Association, a lawyer of
the BizLight School of Business, points out the causes of wrongfulness in the lending business
over time, mostly due to Bankers lack legal knowledge, while inspection and supervision by the
State Bank of Vietnam (SBV) has not implemented the law. On the other hand, bank legislation
is still overlapping and needs time to be finalized. Accordingly, solutions to limit the risk of
lending in banking activities should still strictly implement credit assessment, loan decision and
disbursement, post-lend control.