Financial Services Seabank Perspectives

1

Retail banking:

competing by technology,

advancing to regional integration

Madame Nguyễn Thị Nga

Chairman of SEABANK

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Speech outlines

Vietnam Banking 2012 at a glance

Retail banking: What makes a transformation?

Issues & recommendations:

Non-cash payment

Access to bank accounts

SME financing

Open discussion

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Vietnam Banking 2012 at a glance

Vietnam's banks see rising assets in 2012

Source: SBV (as of Nov2012)

Assets

Total assets $233bio

Assets increment – whole system $3.2bio (1.4%)

Assets increment – SOC banks $1.3bio

Assets increment - JSC banks $1.2bio

Equity

Total equity $20bio

YOY increased equity 7.89%

JSC equity $452mio

Charter capital

Total capital increase 9.68%

7 top achievements in macro governance

1. Inflation restricted at 6.81%

2. Forex market stabilised, FYC reserve

increased

3. Lending interest rate largely bended to

fit in businesses’ capital absorbability

4. VND value appreciated due to anti-dollar

& anti-gold policies

5. Industry inspection activities better

disciplined for transparency

6. Industry restructuring execution better

undergoing

7. Quality of credit recognised by SME,

despite low credit growth

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Vietnam financial market background

Banking Vietnam 2012 Conference

(Hanoi, May 2012)

The financial services industry

continues to undergo rapid and

complex changes in Vietnam.

Beyond the rapidly evolving

economic landscape, these

changes are also driven by

advances in technology,

changing customer needs and

adjustments to regulation

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Issues

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Things that matter

• Economic restructuring

• Industry regulatory adjustments

• Consumer trends

• Technology advances

• Complicated fraud

• Unbalanced network distribution

• ASEAN integration framework

What to be addressed

1. Non-cash payment

2. Access to bank accounts

3. SME financing

Non-cash payment

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Backgrounds • Banks advancing to product

diversification due to technology advances

• Awareness to Usage: conversion rate still low

• Security concerns arising among users

• Prime Minister approval: 2011-2015 Non-cash payment promotion

Recommendations 1. Stronger policies & regulations applied to all sectors 2. Technology infrastructure to be enhanced 3. Convergent Payment Advisory Model 4. Cross-border tools to be established

Access to bank accounts

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Backgrounds • Only 20% population with bank

accounts • Network & facility distribution only

grouped in urban areas • Cash payment culture • E-commerce popular, yet, only

purchase orders counted

Recommendations • Banking facilities in rural

areas to be more invested • Online payment regulations

for related parties • Non-cash payment

regulation: More universal execution needed

SME financing: What’s in it for SMEs?

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• Lending rate cap offer

• Gov guarantee for capital access

• Defer VAT tax payment

• Waiver on income tax, other fees, charges

• Extra fund pumped for banks financing SME

Government

• Own source of fund: >2,000bioVND in 2012

• New approach: Total banking relationship

• Product portfolio: working capital, daily banking

• Credit risk control: Convergence model

SEABANK

Capital access for SME: What needs

addressed?

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Issues from SMEs

Financial transparency: Low

Corporate governance: Weak

Collateral creditability: Unstable

Cash payment: High

Recommendations

Stronger policies to clear the “cloud”

Cash flow management enhancement

Risk control police for collateral

Non-cash payment infrastructure

Summary

Issues Recommendations

Non-cash payment/Cross-

border payment

Access to bank accounts

SME financing

Adjustments to regulations: stricter and more

comprehensive execution

Technology infrastructure: More invested

Rural banking facilities: More invested

Risk control on cross-border payment:

Convergence model

SME financial transparency: More auditing

regulations to be established

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Appendix – Vietnam economic outlook 2013

What Vietnam economic situation will be like in 2013 and more

LE DANG DOANH, Economist:

“Recoverage of market

confidence is key”.

Resolutions in focus:

-Industry restructuring to be

better executed

-More realistic policies to be

designed

Mr CAO SY KIEM, former SBV

Governor:

“Stricter execution towards applied

policies”.

Resolutions in focus:

-Bad debts

-Real estate standstill

-Commodity inventory

PHAM CHI LAN, Economist:

“Classification of insolvent

enterprises for tailored

resolutions”.

Resolutions in focus:

-Economic restructuring to be

accelerated

-Insolvent equity liquidation

better than capital bailout

NGUYEN DUC THANH,

Lecturer:

“Administrative measures to

dominate market-oriented

measures”.

Resolutions in focus:

-Prudent policy in interest rate

-Realistic Monetary policy to rise

local business competition

capability

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