2011 PERFORMANCE REPORT & 2012 BUSINESS TARGETS

H Ni, 28th February, 2012

NGN HNG TMCP CNG THNG VIT NAM

108 Trn Hng o, Hon Kim, H Ni Tel: 04.39421030; Fax: 04.39421032

Business Certificate no. 0100111948 dated 28th February, 2011

2011 Performance report to the Directors Board And 2012 Business targets

REPORT ON
2011 BANKING PERFORMANCE & 2012 BUSINESS TARGETS
In 2011, the global economy had to cope with many difficulties. Japan was stricken with natural disaster, economic recession continued its threat to the US economy, and the public debt crisis in Europe spread out in the Euro Region. The banking and financial system was put on alert and many top world banks are downgraded by international credit ratings agencies. Vietnamese economy also had its challenges such as the high inflation rate threatening the stability of the macroeconomic environment. However, with a package of solutions in curbing inflation, stabilizing the macro economy, ensuring social welfare and responsibility according to Resolution No. 11/NQ-CP dated 24 Feb, 2011 issued by the Government and the Direction No 01/CT-NHNN dated March 01st, 2011 by State bank, at the end of 2011 the economy achieved many positive changes: GDP increased by 5.89%, total exports broke the record at 96.3 billion US dollars, net imports were restricted to under 10%, inflation rate declined sharply within the last months of the year, social welfare was ensured, macroeconomic status was in essence stabilized. Within that context, VietinBank system as a whole managed to overcome difficulties to perform two simultaneous tasks well: (i) conduct of safe, efficient, and internationally standardized development and business activities, (ii) promotion of VietinBank as a leader in the financial and economic fields such as in terms of performing policies and directives as guided by the Party, the Government, and the State. At the end of 2011, VietinBank had achieved remarkable results. VietinBank Management would like to report to the General Shareholders Meeting the following results for 2011:

I. PERFORMANCE REPORT FOR 2011

1. Major Indicators
Unit: billion dongs
Items Done in 20111 Done in 2010 % change compared to 2010 2011 General Shareholders Meeting Plan % of achievements over the 2011 General Shareholders Meeting Plan 104% 103% 103% 104% Target achieved 165%

Total assets Mobilized funds Loan and Investment (1) In which: loan (2) NPL ratio Profits before tax Equity (3) In which: Charter capital ROA (4)

460,241 420,212 430,116 293,434 0.75% 8,392 28,491 20,230 2.03%

367,712 339,699 349,353 234,205 0.66% 4,638 18,201 15,172 1.5%

25% 24% 23% 25% 81% 57% 33%

441,000 408,000 419,000 281,000 < 3% 5,100

20,000-25,000 1.2%

Target achieved Target outperformed

Extracted from audited consolidated Financial Statements for 2011 (note: audited numbers are not yet available)

2011 Performance report to the Directors Board And 2012 Business targets

Items

Done in 20111

Done in 2010

% change compared to 2010

2011 General Shareholders Meeting Plan

ROE (5)

26.74%

22.1%

16%-18%

% of achievements over the 2011 General Shareholders Meeting Plan Target outperformed

(1) (2) (3) (4) (5)

Dividend payout (% over Target 20% 13.47% 49% 16% charter capital at the end of the outperformed year) Credit risk reserve, securities devaluation provision and investment devaluation provision has not yet been included According to Doc. No. 9551/NHNN-TTGS dated 13.12.2011, SBV approved to adjust the credit growth rate of Vietinbank to 25%. Had been excluded the equity of minority shareholders. ROA is calculated as profits before tax over the average of the total assets as of the beginning and the end of the year. ROE is calculated as profits after tax over the average of the total assets as of the beginning and the end of the year

2. Assessment performance results of 2011 2.1.Mobilizing funds In the context of high inflation rate of 2011, State Bank of Vietnam issued policies to curb inflation and stabilize macro economic conditions such as Circular no. 14/2011/TT-NHNN to curb the ceiling USD Deposit rate, Circular no. 13/2011/TT-NHNN to request to link foreign currency deposit sources of State owned Corporations, and Resolution no. 1209/Q-NHNN to regulate an increase of the compulsory reserve rate for credit organizations. The above decisions within the context of common difficulties of domestic and global economies greatly affected the operation of mobilizing funds of commercial banks. Despite difficulties, Vietinbank continued
Chart 1: Scope and Growth of Equity 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 2009 2010 2011
220,591 26% 339,699 420,212 54%

60.0% 50.0% 40.0% 30.0%

24%

20.0% 10.0% 0.0%

.. : Growth rate (%)

: Loan outstanding

to maintain its stable growth rate, focusing on securing liquidity and State Banks regulations. Year end mobilized funds balance (including loans) for 2011 was 420,212 billion dongs, an increase by 24 % compared to 2010, this is 103% compared against the target proposed by General Shareholders Meeting. VND funds mobilized were 348,000 billion dongs, constituting 83% of total funds mobilized, (funds mobilized in foreign currency were equivalent to 2000 billion dongs. Market share of mobilizing funds of VietinBank is approximately 11% )(for 2010: 10.21%).

The above result was thanks to the coordination of active, close, and simultaneous measures such as tight capital balance management, diversification and quality enhancement of products, services, and customer service. Based on that result, VietinBank continued to attract many funding sources with

2011 Performance report to the Directors Board And 2012 Business targets

high volumes and stable terms through various channels such as large domestic and foreign corporations. 2.2.Capital use To achieve growth, sustainability, safety, and efficiency, VietinBank started to change its credit provision model so that risk management follows closely with international practice. The operation of capital use is flexible and yet safe and efficient. At the end of 2011, total loans and investments were 430,116 billion dongs, an increase of 23% compared to the beginning of the year. Specifically: 2.2.1. Credit activities Total loans as of 31 December 2011 were 293,434 billion dongs, an increase of 25% compared to the beginning of the year. Capital was utilized efficiently and focused on several major industries, critical for the economy and potential for growth, such as electricity, petro and gas, telecommunication satellite, cement, steel, coal and mineral, etc.

Chart 2: Scope and Growth of credit 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 50.0% 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0%

43% 293.434 35% 234.204 163.170 25%

Vietinbank was the leading bank in 2009 2010 2011 implementing many credit programs with subsidy for several industries under the Governments Legend: incentives, such programs as: export credit, SME : Growth rate (%) loans, rural economic development loans and industry :Loan outstanding subsidy loans (with a total share of 30% out of the credit structure); whereas non-manufacture loans were 8.5% on total loans. To actively balance business funding, VietinBank focused on short term loan growth (constituting over 60% of total loans) and control foreign currency loans tightly as regulated by State Bank of Vietnam (where foreign currency loan structure share is about 18.54%). Non-performing loans ratio was low, at 0.75%.

..

2.2.2. Investment and usable capital management Investment Book continued to be managed so that profitability increased, and liquidity was ensured for the whole system. At the end of 2011, the scope of investment activities was 138.680 billion dongs, an increase of 18.7% in comparison to the beginning of the year and constituting 30% of total assets. During the year, VietinBank implemented many modern investment products such as interest options, interest swaps, cross currency swaps, assisting the needs for interest rate risk management and forex rate risk management of both the Bank and the customers.

2011 Performance report to the Directors Board And 2012 Business targets

Govt bond and T-bill 28.19% capital stock 0.39% Interbank 47.91%

Govt bond and T-bill 28.96% capital stock 0.25%

Interbank 44.26%

corporate bond and credit instituion 21.38%

Capital contributio n 2.14%

Corporate bond and credit institution 24.70%

Capital contributio n 1.82%

Chart 3. Investment Structure for 2011

Chart 4. Investment Structure for 2010

As for Interbank activities: Until 31st December, 2011, interbank investment achieved 65,500 billion dongs, an increase of 28% compared to 2010. VietinBank always maintained good liquidity status, simultaneously taking the role of providing liquidity and supporting the market. As for Bond/Valuable paper investment: Total investment balance at the end of 2011 was 67.8 billion dongs, an 9.6% increase in comparison to 2010 year end. Vietinbank maintain a large quantity of government bonds as secondary reserves as well as the investment in major projects contributing to economic development in 2011. As for Joint Venture and Capital contribution activities: Until 31st December, 2011, total investment in joint venture companies, affiliates, and other long term commitment was 2,924 billion dongs, a 40% increase compared to 2010.

2.3.Non-credit activities 2.3.1. Payment Domestic payment: In 2011, total domestic payment was made in more than 15.4 million transactions with total transacted amount of 8,100,000 billion dongs (a 64% increase compared to 2010). Remittance achieved 14.6 million transactions, with transacted amounts of 7,400,000 billion dongs (one and a half time compared to the previous year). Service fee for domestic payment was 484 billion dongs, a 26% increase compared to 2010.

International payment and trade: trade payment revenue achieved more than 28 billion US dollars, a 63% increase compared to 2010. Market share was 14% of total trade balance nationwide. Service fees were 599 billion dongs, a 30% increase compared to 2010. The balance of funds mobilized as of 31 December 2011 was 690 million US dollars, an increase by 67% compared to the end of the previous year. 2.3.2. Forex trading While forex trading market experienced complicated fluctuations, VietinBank implemented several solution packages, which were comprehensive and flexible, to stabilize and expand the trading sources to meet customers essential needs and to ensure business efficiency. Total forex purchase by VietinBank for 2011 was 5.1 billion US dollars, an increase of more than 30% compared to 2010, and total forex sale by VietinBank for the year was more than 6 billion US dollars, an increase of 20% compared to 2010.

2011 Performance report to the Directors Board And 2012 Business targets

2.3.3. Overseas Remittance Up to the end of 2011, total volume of overseas remittance through VietinBank network was almost 1.3 billion US dollars with more than 360,000 transactions, an increase by more than 16% compared to 2010. Especially, in December 2011, VietinBank was granted the permission to open VietinBank global remittance company to provide remittance transfer and other individual-toindividual money transfer between Vietnam and other countries and within each foreign country. The work of this company shall be an important landmark in overseas remittance activities of VietinBank. 2.3.4. Card service and E-Banking service Card service: In 2011, VietinBank led the market in terms of ATM Card and Credit Card services. The total number of domestic debit cards was more than 7.1 millionthis made a 21% market share for VietinBank; whereas credit cards were 211,000 cards, a 30% market share 2. Total number of POS of VietinBank was at more than 12,000 places, a 20.7% market share. For each type of card, VietinBank continued to cooperate with large domestic partners such as Vietnam Social Insurance, Hanoi Public Security Department, etc. and foreign partners such as Laos Development Bank; VietinBank pioneered to develop non-stop toll fee collection service. E-banking service: 2011 Online banking service observed positive changes in both the number of customers and the frequency of use: such as VietinBank At Home (with nearly 3,300 customers, ten times more when compared to 2010); Notice of balance change (with more than 1 million times of sending the notices); etc. Besides, transacted amounts through online channels increased remarkably.

2.3.5. Cash and Vault Management Inward and outward flows of cash for 2011 (in both VND and foreign currencies) were 2,400,000 billion dongs, a 48% increase compared to 2010. Change reimbursements for customers were 45 billion dongs and 13,500 US dollars. Export volume of foreign currencies was 123.6 million US dollars (103.4 million US dollars compared to 2010), import volume of foreign currencies was 189.2 million US dollars (108 dollars less compared to 2010). During the year of 2011, VietinBank discovered and kept 443 million dongs counterfeit notes. Service fees from Cash and Vault Management Department was 108.5 billion dongs, an 8% increase compared to 2010. 3. Risk Management, Internal Controllers, Internal Audit 3.1.Risk Management Credit risk management: Although there were difficulties in the economy, and NPLs at Vietnamese banks increased sharply in general, VietinBank was one of the few banks to maintain low NPL ratio at 0.74%. Guideline on credit policies for VietinBank system closely followed macroeconomic changes and State Bank of Vietnams directives; credit control principles were tightened. Interest rate risk and liquidity risk management: The management of interest rate and liquidity risks was often updated and upgraded to the international standards. This helped to ensure efficiency, especially when there were great fluctuations in the global market.
Data from card service data for banks in Vietnam 2011 (source: State Bank of Vietnam)

2011 Performance report to the Directors Board And 2012 Business targets

Market and operational risk management: All documents relevant for this type of risk management were standardized. Work on anti-money-laundering and anti-terrorism closely followed regulations. Forecasts and analyses were upgraded to changes in the global and domestic markets, and provided efficient information to business decisions of the system.

3.2.Internal Controllers and Internal Audit Internal Controllers: As the last controllers of the system, and of risk management activities, the Internal Controllers coordinated investigation groups to conduct comprehensive and by topic investigation of the system branches to discover in time any mistakes made in operations or oversights in the management capacity at the branches for appropriate measures, timely intervention to ensure compliance and risk hedging. Internal Audit: The work of the Internal Audit is enhanced and coordinated with State Audit and other independent auditors to ensure that financial statements are issued timely and in compliance with all regulations.

4. Supporting Group 4.1. Human resources Department, Labour and Salary Management Department, and Network Development activities Human resources management: Based on assessment of the reality of human resources structure from Head Quarter to Branches, VietinBank (i) standardized its working structure according to modern international banks; (ii) reviewed its standards, quality, and capacity of human resources within the system to prepare for the change of the business model for the whole system in 2012. - Network management: VietinBank focused on developing its overseas network and improving the quality of the existing domestic units, enhancing efficiency and productivity for the whole system. In September 2011, VietinBank opened a Branch in Frankfurt (Germany) and became the first Vietnamese commercial bank to open a European branch. Deputy Prime Minister Hong Trung Hi attended and participated to open the Branch, which brought pride and honor to VietinBank system. As for the domestic system, VietinBank opened 26 new transaction offices and savings bureaus, so that the total number of operating units in the system was 1,123 units. Two subsidiaries were opened (The global remittance company and VietinBank Aviva Life Insurance Joint Venture). - Labour and Salary management: VietinBank saw new comprehensive changes in the management of labour and salary within the whole system. The process of assigning target plans and salary unit is being improved and attached to results completed of each operating unit. 4.2. Information technology and bank modernization Under IBMs consultancy, VietinBank completed its general strategy for Information technology by 2015. This is the foundation to enhance competitiveness when the economy is increasingly competitive and gearing towards global integration. The implementation and supervision of the bank modernization project was put under standards of worlds leading projects. The platform for Information technology was continually upgraded to support the development of high tech products and increase their competitiveness, inducing benefits for users, adding values and productivity in terms of enhanced supervision and operation control for the bank. 4.3. Communication and brandname promotion During the year, VietinBank cooperated with television channels and news agencies.
2011 Performance report to the Directors Board And 2012 Business targets

VietinBank and VOV signed a comprehensive agreement to enhance cooperation in broadcasting information and guide towards VietinBanks participating in monetary and financial policies and its brandname promotion. VietinBank also sponsored important domestic events such as the 44th ADB annual meeting, major meetings, major exhibitions, etc. VietinBank website was continually upgraded with new information on the Bank and its new interface was to serve E-banking services for customers. 4.4. Equitization and charter capital increase Upon the Governments approval, VietinBank became the first commercial bank that partnered with a foreign strategic organization and completed its increase of charter capital by selling an additional 10% of chartered shares to IFC and some to existing shareholders (for more than 3,372 billion dongs), and increased total charter capital of VietinBank to 20,230 billion dongs as of 31st December, 2011, ranking VietinBank the second bank in terms of capital nationwide. Shareholders relationship activities in 2011 saw new efforts in holding successful events such as the General Shareholers Meeting, Investors Meeting, VietinBank Analyst Day, etc. All of these events were regarded to make VietinBank the most professional bank in terms of shareholders relationship activities on the Vietnam securities market. 4.5.Basic construction With a view to building VietinBank into a modern, integrable, and competitive financial organization, VietinBank held 29 new projects and delivered 24 important projects. Especially, the Branch newly opened in Frankfurt was in use and other Branches in Berlin and Laos were being furnished to be opened for operation in September, 2012 and February, 2012, respectively. Major projects under construction such as VietinBank Tower in Ciputra (in Hanoi), VietinBank office at 25 Ly thuong Kiet (in Hanoi), School for human resources training and development in Van Canh (in Hanoi), etc, continued to be constructed with the greatest efforts to bring them into use as planned. 4.6.Reward for competition Reward for competition within the network system is implemented regularly and proves to be efficient, providing impetus for individual and group to make efforts in accomplishing their work results. During the year, VietinBank granted 30 medals to individuals and groups, including 1 first class medal, 1 second class medal, and 28 third class medals, together with many merit certificates and flags from the Prime Minister and State Bank of Vietnam, from Ministries and Departments. VietinBank and Chairman Phm Huy Hng took great honor to be awarded for great achievements accomplished in poverty reduction and social betterment by the Prime Minister and the Ministry of Labor, Invalids, and Social Affairs. 5. Party and union 5.1.Party cell and union activities The Vietinbank party cell is comprised of 53 party divisions and 1967 members. During the year, the party cell has successfully implemented resolution NQ 11/CP, passed at the partys 11th congress, and significant policies on propelling the Follow in Ho Chi Minhs footsteps movement and the Vietnamese people prefer Vietnamese commodities movement, with the aim of saving, as well as combating corruption and squander. 5.2.Charity and social welfare Vietinbank makes it a tradition to be at the vanguard of social welfare and to pay gratitude to

2011 Performance report to the Directors Board And 2012 Business targets

the various localities across the country. Having invested nearly 1,500 trillion VND since 2007 in social welfare, 664 of which was from 2011, VietinBank has joined hands with various localities in engaging in social welfare, poverty reduction, tending to invalids, contributing to the veterans funds, and aiding peasants, poverty stricken women, orphans, orange agent victims, flood victims in Japan, the people of Libya These are truly benevolent and meaningful deeds that illustrate the responsible and unique culture of an enterprise that holds a special place in the community and in society. 6. Vietinbanks subsidiaries 6.1.VietinbankSc VietinbankSc operates under the form of a joint stock company, of which Vietinbank holds 76% in charter capital. In light of the challenges that plagued the securities market in 2011, the company was able to achieve positive results. At the end of 2011, total revenue reached 247.8 billion VND (quadruple 2010s figure). Before tax profits amounted to 82.8 billion VND, which earned VietinbankSc 5th place among securities that made a profit in 2011. VietinbankSc also had the 3rd highest profits/equity ratio in the market. The companys investment portfolio is of excellent quality and NPLs are kept at a low level. In 2011, 3,584 new accounts were opened. 6.2.Vietinbank Financial Leasing Company Vietinbank Leasing Company operates under the form of a one member limited liability company, whose charter capital is owned entirely by Vietinbank (800 billion VND). Over the previous year, the company had concrete achievements (and was considered to be one of the best performing financial leasing companies by the Vietnam Financial Leasing Association). By the end of 2011, the companys capital had amounted to 1,002 billion VND, and total loans and investment to 1,799 trillion VND, an increase of 28.7% from 2010. Total before tax profits was at 100.7 billion VND, an increase of 23%; the NPL ratio was curbed at 2.3%, lowest among financial leasing companies. 6.3.Vietinbank Insurance Company (Bao Ngan) As Vietinbank Leasing Company, Vietinbank insurance company is a one member limited liability company whose charter capital is owned entirely by Vietinbank (500 billion VND). In 2011, the company was successful in making excellent use of the Vietinbank branch network to expand its operations. The company had 699 billion VND in total assets on December 31, 2011, an increase of 30% from 2010. Before tax profits for 2011 amounted to 60 billion VND. ROA was at 9.85%, where as ROE reached 12%. 6.4.Vietinbank Debt Management and Asset Exploitation Company Over the past year, the company revamped its operational model for the better by taking such measures as: (i) restructuring and separating the appraisal team from loan operations, (ii) making the director the legal representative to comply with the law. In addition, the company has signed with Vietinbank branches, and provided support for many branches in dealing with debts and fixed assets. The companys year-end profits reached 1.3 billion VND (an increase of 225% from 2010). 6.5.Vietinbank Capital Management Company

2011 Performance report to the Directors Board And 2012 Business targets

Having officially commenced operations in January 2011, Vietinbank Capital already gained a solid reputation in the financial market from very early on. In 2011, the company was successful in making final adjustments to its organizational structure, establishing partnerships with reputable companies, and founding the Nam Quang Ngai Joint Stock Investment Company. The company attained 56.85 billion VND in before tax profits, ROE on the capital funding by Vietinbank (500 billion VND) about 20%. 6.6.Vietinbank Gold and Jewelry Company Although 2011 marked its first year of operations, the company was able to excel at accomplishing its objectives. Profits before tax amounted 56 billion VND, reached to 106% of the target set by Vietinbanks board of directors. Profits after tax amounted to 41.4 billion VND, and ROE was at 14%. Business was rock stable; there were no instances of theft or loss of assets.

II. ORIENTATION, OPERATIONAL DUTIES, AND SOLUTIONS TO BE IMPLEMENTED IN 2012 Vietnams economy is anticipated to continue to be under the influence of the global economy. Economic instability in Europe and the United States, the budget deficit, public debt crisis, and rising inflation in many countries around the world all present significant obstacles that make global economic recovery even more difficult. Moreover, forecasts suggest that adverse economic conditions in the country will persist. The Party, State, and the Government have passed policies that aim to clamp down on inflation, stabilize the macroeconomy, ensure social welfare, keep growth at an appropriate rate, and restructure the economy. The State Bank continues to regulate monetary policies in a stringent yet flexible manner, keeping the growth of total payable instrument from 14 to 16%, credit growth from 15 to 17%, and interest and exchange rates at appropriate levels suited to macroeconomic conditions and changes in the currency market. In close adherence to such policies, Vietinbank plans to repeat the success of 2011 by setting the following business objectives for 2012:
1. OVERALL OBJECTIVE FOR 2012:

Vietinbank continues to undergo comprehensive restructuring to become more modern and to enhance competitive capability. Further, Vietinbank relentlessly revamps and improves its management methodologies and expedites the equitization process. Human resources management, investment in technology, quality enhancement, NPL management, and fulfillment of social welfare responsibilities are areas that Vietinbank plans to focus on over the next year. Vietinbank aims to retain a strong growth rate and occupy a greater share of the market all the while ensuring safety and sustainability. Several specific financial objectives for 2012 are listed below:
Item Unit Target % increase from 2011

Total assets

VND (billions)

550.000

19%

2011 Performance report to the Directors Board And 2012 Business targets

Item

Unit

Target

% increase from 2011

Charter capital Total mobilized and borrowed funds Total loans and investment Of which : Loans to the economy Investment Before tax profits Dividend ratio Several financial ratios

VND (billions) VND (billions) VND (billions) VND (billions) VND (billions) VND (billions) % ROE ROA CAR NPL ratio

30.000 500.000 520.000 343.000 177.000 9.000 16% 18% 1,5%-2% 10% < 3%

48% 19% 21% 17% 30% 7%

2. SPECIFIC DUTIES

2.1. Operations 2.1.1. Capital mobilization The common objective of the entire bank for 2012 is to propel capital growth as well as restructure capital with the medium and long term in mind. The bank also aims to stabilize the floating interest rate so as to reduce interest rate risk and liquidity risk. Details are as follows: Enhance the quality of forecasts to come up with appropriate policies and strategies that help regulate the interest rate in accordance with market conditions, which will grant branches greater competitive ability. - Attract more capital, with priority placed on deposits from organizations and individual customers. Expand client base, offer excellent customer service, offer special treatment to customers with large deposits. Follow directives for the entire bank and have a clear grasp of changes in all relevant markets to mobilize capital as effectively as possible. 2.1.2. Credit, investment Credit Operations The target is to enhance management capability, tighten credit rules, prioritize the inspection and monitoring of credit and operational risk, and minimize the occurrence of NPLs. Successfully implement the credit model change in an effort to centralize risk management in accordance with best practices. The following are several objectives: In tandem with risk management at the transactional level, Vietinbank will continue to manage risk at the loan portfolio level by means of enhancing appraisals and forecasts so as to come up with proper solutions for each product group, each industry, each economic sector. The entire bank continues to develop and change the credit risk management model to better

2011 Performance report to the Directors Board And 2012 Business targets

adhere to international standards and to Vietinbanks needs. Branches take the initiative in obtaining market information and closely follow directives to foster credit growth in accordance with Vietinbank strategies. Improve appraisal quality, customer management, monitoring before, during, and after the granting of loans; ensure that loans are made for the right purposes and conform to Vietinbank regulations. Promote the cross-sale of products and services that include insurance, interest rate swap; Focus on short-term credit growth, avoid medium and long-term loans (especially loans in foreign currencies). Evaluate the riskiness of customers and loans to come to safe and effective decisions; when dealing with non-lucrative customers, accelerate the payment of debts and consider terminating relations. Investment:

To fulfill growth targets, it is necessary to diversify the investment portfolio and manage liquidity risk, interest rate, and profitability. Appraise financial institutions more accurately to determine the transaction limit to be applied for each bank. Expand investment activities and capital mobilization with the aim of successfully issuing 500 million USD worth of international bonds in 2012. Develop new investment products such as derivatives and structure, apply modern methods of investment portfolio management in new treasury system to be introduced in the coming year, expected in quarter III/2012. 2.1.3. Foreign Currency Trading Continue to tighten relations with the State Bank, domestic and foreign financial institutions, and exporting enterprises to better address customers demands for foreign currencies. Implement software to trade foreign currencies and manage them at the central level in accordance with international practices. Introduce new banking services such as derivatives, interest rate, and exchange rate to maximize investment opportunities and minimize risk. Provide sound consultation to customers so that they may opt for a mixture of exchange, deposit, loan, and other products. The goal is to maintain a balance in the supply of foreign currencies and prevent exchange rate risk. 2.1.4. Charged services Card services: Promote the development of key services at which Vietinbank excels such as toll collection services, hospital feels, automatic tuition fee collection. Drive the quality of Vietinbank products and services above all others. In 2012, necessary measures will be taken to establish a card services company operating under Vietinbank. Remittance services: After the Vietinbank Global Money Transfer company officially begins operations, new channels of remittance will be opened, with focus being placed on regions where there are large concentrations of Vietnamese expatriates and laborers. Introduce new services such as only remittance by internet, by phone. Expand payment networks and establish new agencies. Modernize existing technology to ensure that remittance is conducted safely, quickly, and effectively. Payment services: Simplify such services so that they are performed more quickly while still ensuring safety. Diversify products and services, increasing added value for customers. Improve

2011 Performance report to the Directors Board And 2012 Business targets

upon payment services to enhance flexibility and attract more customers, but still conform to internal regulations and the law. 2.1.5. Customer Service Quality To cope with increasing competition, Vietinbank will have to take the following measures in 2012 to improve upon the quality of services: Form a set of indicators and a unit specialized in overseeing the quality of customer service on all levels of the bank; launch the CRM system as early as possible. Put into service the Contact Center, which provides customers with accurate and up-to-date information to improve service quality and promote Vietinbanks brand image. Focus on training and retraining, assign personnel, ensure that staff members have a good grasp of Vietinbank products and services as well as of customer demands to improve service quality. Assign employees to the specific task of monitoring relations with key customers so that appropriate responses can be made when changes arise. Devise procedures whereby the service quality of each department can be monitored. 2.1.6. Equitize and Increase Shareholders Equity Propose a roadmap to increase capital to the government, State Bank, and SCIC that aims to help ensure regulations are complied with and adequacy ratios are suited to the rate of growth of the bank. Finalize negotiations with the banks second foreign strategic partner by year end 2012 and expedite the growth of charter capital by means of issuance of additional shares. Aside from bolstering its financial strength, Vietinbank will request additional technological support from its strategic shareholder to enhance management capability, risk management, expand product and service portfolio, increase relations with foreign partners, and improve personnel training. The overall aim is to turn Vietinbank into a major player and modern bank by the year 2015. 2.2. Risk Management Group The common goal is to ensure that all departments and branches follow procedures and processes. It is necessary to foster a risk prevention culture. Manage, monitor, and prevent risk in all departmental and branch activities. Pay especially close attention to ethical risk. In 2012, Vietinbank will: Change the internal supervision model so that distinction is made among three levels (central, regional, cluster). Enhance employee competence, inspect activities closely, monitor branches to respond in time and impose strict penalties on violators and those who cause damage to Vietinbank. Check all procedures, regulations, and processes to ensure compliance with international standards. Expedite the implementation of risk management modules such as internal credit ranking and ALM to enhance risk management capability. 2.3. Support Group 2.3.1. Organization Expedite the change of business model to form specialized groups such as the business group, treasury group, support group, risk management group, and operational group. Divide responsibility

2011 Performance report to the Directors Board And 2012 Business targets

among various departments to ensure cross checking in all areas of operation. 2.3.2. Personnel Enhance staff competence to cope with new demands and responsibilities. Appoint management appropriately, conduct better evaluation of employees, focus on training young and promising staff. Hire new, competent employees and identify key staff members. Continue to upgrade and implement Peoplesofts staff management and evaluation program. 2.3.3. Compensation, Rewards, and Emulation The year 2012 will see the implementation of a new compensation system comprising job descriptions, KPIs, and internationally used salary structure to guarantee transparency and equality. Research and apply other policies relating to bonuses and salary to provide incentives to Vietinbank workers. It is important to promote teamwork and to determine just how much each staff member contributes so as to help workers maximize their potential and abide by Vietinbank directives and objectives. 2.3.4. Network In addition to strengthening its domestic network, Vietinbank continues to expand internationally in 2012 by opening new branches in Laos (Febuary, 2012) and Berlin, Germany (quarter I/2012). Vietinbanks next destinations include Myanmar, England, the Czech Republic, and Poland. In the near future, Vietinbank will further research the possibility of expanding into other lucrative markets like the Middle East, North America... 2.3.5. Information Technology Implement IT strategies for the period from 2010 to 2015 and key modernization projects (core banking, middle layer, other software systems) in a timely manner. Improve project management skills, ensure compliance with procedures, meet all requirements for IT strategic projects. Upgrade the IT infrastructure to support the development of new products and services that are advanced and capable of addressing customer demands. Formulate policies for the management of data quality and ensure that all branches and departments and in compliance to provide accurate and reliable information that can form a basis for decision making. 2.3.6. Infrastructure Development and Construction Step up the construction of major projects such as the Vietinbank twin towers in Ciputra, the office building at 25 Ly Thuong Kiet (Hanoi), the office building at 93-95 Ham Nghi (HCMC). Complete the construction and revamping of branch buildings. Provide spacious and well furnished areas to better serve customers. Finalize the purchase of buildings in Laos and Myanmar so that operations in these regions may commence. 2.3.7. Communications, Marketing, Brand Image Promotion Completely revamp marketing and promotional strategies. Develop and overall strategy for all of Vietinbank, which must be consistent with regard to communications methods, media. The aim is to communicate in a more reliable manner and embellish the Vietinbank image as perceived by the public eye. Vietinbanks operational results will thus be improved and the banks market share will
2011 Performance report to the Directors Board And 2012 Business targets

augment. 2.4.Party, Union and Social welfare 2.4.1. Party Activities Gain a sound understanding of and implement the resolutions and policies of the Party and the State. Strengthen Vietinbanks internal party structure. Executives are to impart their knowledge of politics and operations on employees. Follow in Ho Chi Minhs footsteps, abide by procedures, improve management capability. 2.4.2. Social Welfare Vietinbank will carry on its tradition of altruism, demonstrating its social responsibility as a commercial bank of crucial importance. By making use of its resources, Vietinbank continues to engage in charity and social welfare activities in an effort to reduce poverty and elevate the standard of living. Tight supervision needs to be carried out to ensure that the money supplied by Vietinbank is put to good use. III. CONCLUSION In 2011, the bank overcame many difficulties and challenges to fulfill the grand duties assigned by the Party, the Government, and the State bank. Rapid growth rates, safe, effective, and high quality operations are just several accomplishments that Vietinbank has had over the previous year. Vietinbanks unparalleled financial results form the very basis upon which the bank will strive to fulfill its 2011-2015 target, which is to become the premier financial and banking corporation in Vietnam. The year 2012 brought about significant changes for the bank, as it continued to strengthen its critical position as a commercial bank that has made invaluable contributions to socioeconomic growth and stability. As Vietinbank progresses in its endeavor to further integrate into the international scene, the bank realizes that the upcoming years challenges also present numerous opportunities not just for the banking industry but for Vietnams economy overall. As such, Vietinbank will continue to build upon its past success, make invaluable contributions to the banking industry and the economy, and is determined to attain its objectives as the banks 25 th anniversary in 2013 draws near. ON BEHALF OF THE BOARD OF DIRECTORS CHAIRMAN

PHAM HUY HUNG

2011 Performance report to the Directors Board And 2012 Business targets