1 Banque Pour Le Commerce Exterieur Lao Public A Summary of Business Performance of the year 2017
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1. Banque pour le Commerce Exterieur Lao Public
Banque Pour Le Commerce Exterieur Lao Public (BCEL) is a joint-stock bank incorporated and
registered in the Lao People’s Democratic Republic
BCEL was established in accordance with the Business License No. 129/BOL dated 01
November 1989. On the 23rd
December 2010, the bank was equitized and renamed into Banque Pour
Le Commerce Exterieur Lao Public under the Enterprise Registration License No.0061 dated on 10
January 2011 issued by the Department of Enterprise Registration and Management, Ministry of
Industry and Commerce of the Lao P.D.R. The Ministry of Finance representing the Government
held 80% of the total shares.
On 15 July 2011, the Ministry of Finance sold 10% of the total ordinary shares to its strategic
partner named COFIBRED in accordance with the Ordinary Shares Purchase Agreement between
the Ministry of Finance and COFIBRED.
The current structure of BCEL’s shareholders includes: The Government’s shares account for
70% of the Bank’s chartered capital; local investors’ shares (including employees of the Bank) and
other foreign investors’ proportion of 20%; strategic partners’ shares account for 10%.
On 17 August 2017, Lao Securities Commission Office approved the Bank to recapitalize by
both Rights offering to the existing shareholders. This recapitalization aims to increase the
registered capital. The bank received new Banking License No. 21/BOL, dated 13 September 2017,
issued by Bank of the Lao PDR. On 15th
September 2017, Lao Securities Exchange certified that the
bank has increased its registered capital in the amount of 355.728.500.000 LAK (71.145.700 shares)
according to the certificate No. 01/LSX, dated 15 September 2017 and the business license
No.0889/ERO, dated 15 September 2017, issued by Ministry of Industry and Commerce.
The principal activities of the Bank are to provide banking services including fund
mobilization and deposit-taking for short-term, medium-term, and long-term from organizations and
individuals. The bank also provides loans for short-term, medium-term, and long-term to business
units and individuals based on the loan purposes and the capability of the bank for lending; foreign
exchange transactions, international trade financial services, Letter of credits, guarantees, gold
trading via account and other banking services allowed by the Bank of the Lao PDR.
Charter Capital
The charter capital as of 31 December 2017 is 1.038.617 million LAK (as of 31 Dec 2016:
682.888 million LAK).
Location and Network
The Bank’s Head Office is located at No.01, Pangkham Street, Ban Xiengnheun, Chanthabouly
District, Vientiane, Lao PDR. As of 31st December 2017, the Bank has one (01) Head Office, one
(1) subsidiary, four (4) joint ventures, nineteen (19) main branches, eighty-five (85) services units,
and sixteen (16) exchange units all over Lao P.D.R.
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2. Vision
BCEL has adopted a vision and apply to its business development to achieve its goal and
objective of “Becoming a strong, modern and meet international standards bank”.
3. Mission
In order to become a strong, modern and meet international standards bank, the important
missions of BCEL includes improving the strength in all the areas , especially the Corporate
Governance (CG) by focusing on development of banking services to be suitable for the changes in
each period; embracing the creation of the strength in the culture of Risk Management and to
comply with the BASEL II principles; increasing business operation capacity; creating and
developing the capacity of the Management of Information System (MIS) to be effective,
completed, correct and punctual and meet international standards of the reporting system; applying
modern technology and upgrading the knowledge and expertise of the employees as of regional and
international levels.
Business Targets for 2017
In order to prepare for and ensure the effective implementation of the long-term missions, BCEL
has to develop its fundamental organizational structure to be appropriate; to develop necessary tools
in all areas and improve other fundamental factors to facilitate for the development of its services; to
build its financial capacity and to achieve excellent management. For the excellent management
ideal, the allocation and appointment of management structure and organizational structure are
needed to be improved such the establishment of the Marketing Division, the establishment of the
branches in Vientiane Capital and to extend the service units where appropriate; to improve the
regulations on internal administration to be complied with the new amended legal documents and
additional regulations; and to improve the roles and responsibilities of the Board of Directors to
comply with CG.
4. Organizational Structure.
4.1 The organization of BCEL consists of the Board of Directors (7 Directors), Executive
Management (7 members), 11 Divisions, 3 Centers, 19 Branches, 85 Service Units and 16
Money Changers nationwide.
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BCEL’s Board of Directors
Dr. Bounleua Sinxayvoravong Chairman
Mr. Khamsouk Sundara Voice Chairman
Mr. Phoukhong Chanthachack
Member
Ms. Khanthaly Vongxayarath Member
Mr. Phansana Khounnouvong Member
Mr . Viengxay
Chanthanvisouk Member
Mr Marc ROBERT Member
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BCEL’s Board of Management
Mr. Lachay Khanppravong Deputy managing Director
Mr. Nanthalath Keopaseuth Deputy managing
Mr. Khamsian Mingboupha Deputy managing Director
Mr. Souphak Thinxayphone Deputy managing Director
Mr. Phansana Khounnouvong Deputy managing Director
Mr. Bouavanh Symalyvong Deputy managing Director
Mr. Phoukhong Chanthachack General Managing Director
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5. Achievement for the year 2017
For the year 2017, BCEL achieved its targets in many areas such as completing the year-end
financial report for 2017, holding the Business Performance Review Meetings for the year 2016,
holding of the Quarterly Business Review Meeting and holding of the Board of Directors Meeting
for 3 times. The bank also held BCEL’s ordinary shareholders Meeting for the year 2016 to approve
the important issues and the dividend payment for the year 2016 in the amount of 614 kip/share.
BCEL has successfully selected and appointed the financial advisor, legal advisor and
underwriter for recapitalization in the amount of 360 billion LAK. The recapitalization was
successfully completed. The bank also launched the Implementation of the BASEL II Project and
gap analysis of all risks according to Basel II principles; Checked the draft of the gap analysis report
on ICAAP risks as well as completed basic projects including gap analysis of risks, creating the
roadmap of BASEL II project and solving the risk gaps which were found; Researched and proposed
to the Bank of Lao PDR on the establishment of Marketing Division, the establishment of a new
branch in Xaysettha District and the merger of Audit Division and Branch Management Division.
BCEL has disclosed its financial statements for the year 2016, the business performance report
for the first quarter of 2017, the first six month and the 9 months of 2017 via the disclosure system
of the Lao Securities Exchange. BCEL has launched the new credit program which was under the
process of gathering the information from related divisions to provide for the consulting company.
In additions, BCEL has distributed its long-term strategic plan from 2016-2020 and the 2017 plan to
all of branches in order to raise the acknowledgement of the bank’s directions of the plan at branch
level and to implement such plans for the achievements. The bank also researched and improved job
description and Key performance indicators for staff which can be basically competed by 4
Divisions (including 1.Human Resource and Personnel Division, 2.Research and Development and
Marketing Division, 3.Credit division, and 4.Service Center) and to propose for the approval in
starting the pilot study. The bank also created BCEL’s profile in Lao and English versions and the
using of BCEL’s new cheque books.
BCEL has also expanded its service by cooperating with various parties such as signing ceremony
on the overall banking cooperation between BCEL and Bank of China Limited, the signing
ceremony on financial advisory service between BCEL and Lao-China Securities Company Limited,
the signing ceremony on bill payment with Krungsri Leasing service Company, AEON leasing
company, Thai-Ace leasing company, Pratukham deposit-taking financial institution and ST-
Meuangthai insurance. The bank also signed MOU with KEB Hana Bank from South Korea on
Overall banking Co-operation.
The bank has successfully held the signing ceremony on modern payment of road taxes between
BCEL and Tax Department and developed the advanced payment via QR code or OnePay which
will be part of BCEL One application. This service was installed at many shops in Vientiane Capital
and BCEL’s branches overall the country. Moreover, the bank also held the display and information
support event for the promotion of OnePay (QR Code Payment) service at Lao-ITECC to promote
and introduce how to apply OnePay for product settlement.
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In 2017, BCEL extended its network by opening 5 new service units, in which 2 units located in
Vientiane Capital, including 1.Hauy Hong Service Unit, 2.Dong Chong Service Unit (at PTT gas
station), 3. Upgrading of Numphou Service Unit, 4. 35 KM Service Units at Savanhnaketh province
and 5.Xiengngern Service Unit. The bank also launched the grand opening of Meung ngoi Service
Unit’s new building which is under Laungprabang Branch and the new building of BCEL’s Salavan
Branch.
Moreover, BCEL also received the award of Domestic Retail Bank of The Year 2017; the
bank collaborated with China Union Pay (CUP) held the campaign for returning benefits to the
customers by creating 4 promotions which provided the travel packages to Malaysia-Singapore for
13 prizes, to Honkhong-Macua for 6 prizes, and Iphone 7 for 5 prizes for the customers who were
the top spenders by using UnionPay’s card. BCEL also set up an advertisement boot at the
intellectual property exhibition. At the end of the year, BCEL received the award for Operational
Excellence for 2016 from Wells Fargo Bank which is one of the top 5 financial institutions in the
US.
6. The Activities of the Board of Directors, the Board of Management and other Committees
The Board of Directors
For the year 2017, the Board of Directors held the meeting to discuss and approve important
issues as follows:
-Approved the recapitalization plan, the purposes for the use of recapitalized fund, approved the
appointment of Lao China Securities Co., Ltd as the underwriter for the recapitalization and
approved the appointment of Lao Law and Consultancy Group as the legal advisor for the
recapitalization.
- Approved the nomination for the new members of BCEL’s Board of Directors and the new Audit
Committee to BCEL’s Board of Directors and the Shareholders.
-Approved the business performance for the year 2016 and approved the principles on allocation of
the profit after tax and to pay for dividend 50% and 50% will be the compulsory reserves.
-Approved the closing date of the shareholders’ registration book, the date for the Annual General
Shareholders’ Meeting and the date for dividend payment for the year 2016.
-Approved the Financial Statements for the year 2016 and for the six months of the year 2017 in
accordance with LAS and IFRS via circular letter.
-Approved the regulation on the roles, rights and responsibilities of the 5 committees to the Board of
Directors.
-Approved the amendment of the regulation on procurement, construction and repair.
-Approved Ernst & Young Lao Company Limited for auditing BCEL’s financial statements of the
year 2018.
-Approved the recapitalization of BCEL from 682.888 mil LAK to 1.038.617 mil LAK.
-Approved in principle on the reduction of the shareholding portion of BCEL at BFL which
decreased from 46% to 30%.
-Approved the business feasibility Study of BCEL and the establishment of new branch (Xaysetha
Branch) and the branch’s administrative regulation.
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Governance Committee
For the year 2017, the committee focused on research and monitoring of BCEL’s business
performance in each period and provided effective supervision to the business operation of BCEL
in all areas such as monitoring on human resource development; following up on the consideration
of BCEL’s new members of the Board of Directors; monitoring on fund mobilization by
appointment of committee to research on fund mobilization through several channels as such
advertisement and setting of interests; following up the credit management work, especially the
cooperate clients and control NPL to be at the suitable level; following up the research of targets
for the business plan of the year 2018 in order to propose to the Board of Directors; following up
the management of affiliated companies and to claim for the dividends from the profit of those
companies; following up the possibility of offering the shares held by the government for 19% and
considered the level of BCEL’s capital adequacy ratio based on LAS and IFRS.
In additions, the committee also supervised the implementation of BCEL’s long-term strategic
plan; researched on the roles of the Board of Directors’ Committees in order to propose to the Board
of Directors; followed up the development of human resource and BCEL’s products; considered the
allocation of profit after tax for 2017 into each reserve and proposed to Board of Directors for
approval; considered the recapitalization for Lao-China bank and to propose to the Board of
Directors. Moreover, the Committee also assessed the KPI at branches based on the defined
conditions and followed up the research on KPI of BCEL’s staff at Head Office and supervised the
authorization right at branch and service unit level by standardizing each authorization level in
accordance with cash and deposit transactions.
The Committee has approved the amendment of many regulations such as BCEL’s Articles
of Association; the regulation on procurement, construction and repair of BCEL; the regulation on
vehicle management; the regulations on the roles, rights and responsibilities of the committees to the
Board of Directors and approved the Annual report for 2016 of BCEL.
Risk Management Committee
BCEL has continuously focused on the efficient implementation of the Risk
Management. Some of outstanding performances by the committee including the summary of the
findings and risk recommendations of BCEL for the 2016 and to input in the Risk Record
Document (Cloud Computing Risk Log), which was basically created for risk analysis and the
Analysis of the impacts from internal and external risks on the business operation of BCEL such as
frauds on credit cards, the use of EDC in the offline form for frauds and other purposes, closely
monitored credit risk, liquidity risk, and operational risk.
Moreover, the committee monthly evaluated the transactions of divisions, centers and
branches which were not complied with the service rules as well as compared the data among
divisions, centers, branches then reported to the risk management section (Second Line of
Defense); reported the findings to the Audit Section (Third Line of Defense) to ensure the accuracy
of the report and drafted the risk management policy for BCEL. BCEL has also focused on
implementation of risk management to meet with the international standards which can be seen in
the preparation for the adoption of BASEL II and the completion of the Roadmap for Basel II
implementation which is divided into 3 phases. BCEL also cooperated with E&Y in a project to
improve the credit approval procedures by using Loan Origination System (LOS), Credit Rating
System (CRS) and researched the possible risks associated with all products of BCEL.