Market and Competitor Analysis
Week 2 December 2014
Market and Competitor Analysis
Weekly Updated
ISSUER OF THE ANALYSIS:
Strategic Research & Analysis
Strategy and Corporate
Development/Finance & Strategy
Division
Address: Level 20,
TechcombankTower, 191 Ba Trieu,
Ha Noi
Tel: +84 4 3944 6368
Link to Weekly reports
Intranet\Chiến lược & Phát triển\Phân
tích chiến lược
Hoàng Quốc Đông
Director of Strategic Research & Analysis
Email: donghq@techcombank.com.vn
Tel: +844 39446368, Ext. 1243
Lưu Trung Nguyện
Analyst
Email: nguyenlt2@techcombank.com.vn
Ext: 1244
Strategy and Corporate Development
Jul 2014
OVERVIEW
 Moody’s has upgraded the outlook for the Vietnamese banking
sector in 12-18 months to “stable” from “negative”. However,
Moody’s suggested that owned capital and provisions of banks were
insufficient.
 Total assets of JSCBs increased substantially in October 2014.
Although total assets increased, CAR declined 0.21% against the number
in September. The result suggests that assets quality of JSCBs might
decline as bad debts could have increased.
 LDR of the whole system surprisingly increased strongly in October
2014. This is opposite to the developments in previous months since
LDR gradually declined from 85.9% in January to 82.7% in September.
Notably, LDR of SOCBs is currently 94.4%, higher than the cap
prescribed in Circular 36. Therefore, state-owned banks will have to
push customer deposits in the upcoming period by the time Circular 36
taking effects from Feb 1 2015.
 Potential for the development of Vietnamese banking sector is still
large since the penetration rate is only 21.4%. This is acknowledged
by many experts in the Asean Banker Forum 2014 recently held in
HCMC featuring the topic “Develop modern and comprehensive retail
banking model”. According to the professionals, Vietnamese banks have
started to invest aggressively in technology to create new distribution
channels in the future such as Internet Banking, Mobile Banking, Tablet
Banking, and Social Network/Media. Hence, bank staffs will support
with guidance and consulting, customers will perform self-service
transactions via technology devices.
 Many banks promote consumer lending in the last months of 2014.
Accordingly, domestic banks such as SeABank, TPBank,
LienVietPostBank, VietABank, VietBank and OCBank have deployed
preferential lending products. TPBank offers the lowest lending interest
rate of 4.5%/year in the first 3 months, meanwhile, OCB offers the
longest preferential period, fixed 9.99%/year for 3 years…Besides,
foreign banks promote unsecured lending products, ANZ offers personal
loans salary advance at 1.3%/year applied for a loan up to 500 million
dong with tenor up to 60 months.
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Week 2 December 2014
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UPDATE ON MARKETS AND POLICY

Moody’s upgraded the
outlook for the Vietnamese
banking system to “stable”
from “negative”
In the report published on December 11st regarding Vietnam banking system
outlook in the upcoming 12-18 months, Moody’s changed the outlook for the
Vietnamese banking system to “stable” from “negative”. Report looks at
Vietnam’s banking system in terms of five factors including liquidity, assets
quality, shareholders’ equity, profitability and systemic supports from the
Government and SBV.
In particular, Moody’s stated that capital and provision rate for overdue debts
of Vietnamese banks are lower than those of same scale banks in Pakistan and
Mongolia.
Exhibit 1

Notes: Hatton = Hatton National Bank, Khan Bank = Khan Bank in Mongolia,
XacBank = XacBank in Mongolia, Ceylon = Bank of Ceylon
Exhibit 2

Notes: Allied = Allied Bank Limited in Pakistan, NBP = National Bank of

Pakistan
Total assets of JSCBs Recently, SBV has announced some performance indicators of the whole
surged in October 2014 banking system up to the end of October 2014 with notable contents as
follows:
(i) As of end-October 2014, total assets of CIs reached 6,175 trillion, up by
6.34% against year-end of 2013; while shareholders’ equity of the whole
system increased by 3.58% against year-end of 2013.
Items 31/10/14 %Vs 30/9/14 %Vs 31/12/13

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Week 2 December 2014
Jul 2014
Vnd’s bil
Total assets 6,174,623 0.21% 6.34%
Shareholders' equity 497,236 0.17% 3.58%
The total assets of SOCBs decreased by 0.24% while that of JSCBs continued
to increase by 1.01% against the previous month.
Total assets
31/10/14 %Vs 30/9/14 %Vs 31/12/13
Vnd’s bil
SOCBs 2,712,017 -0.24% 8.27%
JSCBs 2,624,167 1.01% 6.72%
(ii) Capital adequacy ratio (CAR) of the whole system was 13.22%, down by
0.03% against year-end of 2013. In particular, CAR of SOCBs and JSCBs fell
respectively by 1.02% and 0.29% against year-end of 2013.
CAR 31/10/14 %Vs 30/9/14 %Vs 31/12/13
Whole sector 13.22% -0.21% -0.03%
LRD of the whole system SOCBs 9.89% -0.18% -1.02%
surged back in October JSCBs 12.27% -0.21% -0.29%
2014 (iii) Loans to Deposit ratio (LDR) of the whole system was 83.43%, up by
0.71% against the last month. Particularly, LDRs of SOCBs and JSCBs
increased 1.44% and 0.17% respectively. However, compared to 2013.
LDR of the whole system decreased by 1.28%.
LDR 31/10/14 %Vs 30/9/14 %Vs 31/12/13
Whole sector 83.43% 0.71% -1.28%
SOCBs 94.38% 1.44% -0.24%
JSCBs 74.24% 0.17% -0.96%
Vietnam still has large On December 3rd, Asean Banker Forum was held in HCM city with the main
potential in the banking topic “Transforming Retail Banking into a Futuristic Banking Model”.
sector There were notable contents in forum as follows:
- The proportion of adult (>15 years old) used banking account in Vietnam
only accounted for 21.4% as of 2011

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- The number of branches over 100,000 adults in Vietnam was only 3.7 as of
2013

- The proportion of adult (>15 years old) used banking services in Vietnam
was low in comparison with countries in Asia-Pan Pacific.

INFORMATION ON PROGRAMS, PRODUCTS, NETWORK…OF TCB AND COMPETITORS

From now to March 31st 2015, VietinBank deployed lending program “Connect
with potential customers” with preferential contents as follows:
- Objects: New corporate customers
- Preferential interest rates:
+/ As for short term loans:
Interest rate in the Interest rate in the
first 3 months first 6 months
Large enterprises 5%/year 5%/year
SMEs 5.5%/year 6%/year
Micro enterprises 6%/year 6.5%/year
+/ As for medium and long term loans:
Interest rate in the Interest rate in the
first 6 months first 12 months
Large enterprises 6.5%/year 7%/year
SMEs 7%/year 8%/year
Micro enterprises 8%/year 8.5%/year

On December 8th, BIDV and Vietnam - Singapore Industrial Park Joint Venture
Limited Company (VSIP) signed a credit contract to finance investment project of
VSIP Quang Ngai Industrial complex – metropolitan and services. Accordingly,
BIDV will spend 35 million USD to invest in construction and business of

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Jul 2014
infrastructure. Meanwhile, BIDV deployed a credit package of VND 2,000 billion
with preferential interest rates – and the maximum loan tenor of 15 years for
enterprises having projects deployed at VSIP Quang Ngai Industrial zone
From October 8th to December 31st 2014, LienVietPost Bank deployed program
“Providing business capital – Promoting consumption” with main contents as
follows:
- Total limit: VND 4,000 billion
- Loan purposes:
+/ Housing loans, auto loans, consumer loans with collaterals
+/ Manufacturing and business loans, properties investment loans
- Loan tenor: Maximum of 60 months
- Preferential interest rates as follows:
+/ In terms of loans in VND:
 6.5%/year fixed in the first 3 months
 7%/year fixed in the first 6 months
 8.5%/year fixed in the first 12 months
+/ In terms of loans in USD:
 2%/year fixed in the first month
 2.5%/year fixed in the first 2 months
 3%/year fixed in the first 3 months
Other banks From December 8th 2014 until the end of January 31st 2015, VietABank deployed a
credit package “Price stabilization on Tet holiday” with main contents as follows:
- Object: Customers borrowing short term VND loans
- Preferential interest rates fixed in the entire loan period:
+/ Corporate customers: 7%/year
+/ Individual customers who are household businesses and small businesses:
8.5%/year
- Total value of credit package for corporate customers: VND 1,000 billion
From December 8th to December 31st 2014, VietBank deployed preferential credit
packages with main contents as follows:
- Object: Individual customers
- Loan purposes: Loan for manufacturing and business; auto loans with
collaterals which is the purchased car or real estate; consumer loans with
collaterals; housing loans
- Preferential interest rates as follows:
Interest rate in the first year Interest rate in the second
Credit packages st nd rd
1 Option 2 Option 3 Option year and during loan period
Loans for 8.5%/year in - Interest rate in the second
9%/year fixed
manufacturing and the first 6 year = 13-month saving rate +
in 12 months
business months margin of 3%/year
7.5%/year in 8.5%/year in - Interest rate from the 3rd year
Auto loans secured 10%/year fixed
the first 3 the first 6 does not exceed 13-month
by the purchased car in 12 months
months months saving rate + margin of
Auto loans secured 5.5%/year in 7.5%/year in 9%/year fixed 4%/year
by real estate the first 3 the first 6 in 12 months

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Jul 2014

Housing loans months months

5.5%/year in 7.5%/year in 9.5%/year

Consumer loans with
the first 3 the first 6 fixed in 12
collaterals
months months months

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