Trust proves vital to bank’s rising star

As BIDV has distinguished itself as a banking brand that makes accountability its foremost concern, its steady rise looks set to continue

Non-stop growth

The country has transformed considerably in the past 30 years, achieving many outstanding accomplishments and turning itself from a closed and centrally-planned economy into a dynamically-integrated market economy.

The country’s banking system, likewise, has gone through a massive development process, with the Bank for Investment and Development of Vietnam (BIDV), in particular, witnessing radical changes. What was once a bank that specialised exclusively in the management of state budget funds under the Ministry of Finance, has now branched out to become known as one of the top commercial banks under the State Bank’s (SBV) management.

BIDV has consistently adjusted to the ever-changing business environment, and has tried hard to improve its scale, quality, and performance. Consequently, it has developed into a pioneer bank that handles foreign direct investments and contributes towards the country’s international economic integration. The bank has also taken the initiative to partake in the poverty reduction programme in Vietnam through its corporate social responsibility activities.

In past years, BIDV received a number of prestigious awards from various leading international magazines such as International Banker, The Banker, AsiaMoney, EuroMoney and The Asian Banker. Last year, the bank was voted the Best Commercial Bank in Vietnam by International Banker, and the Best Retail Bank in Vietnam by The Asian Banker.

The bank’s accolades are due recognition for a brand that has become internationally recognised for products and services that are widely appreciated.

Throughout its 58 years of unceasing development, and especially in the past 20 years of growth, BIDV has turned itself into an innovative and competitive bank, capable of maintaining sustainable growth while expanding its business both regionally and internationally.

Last year, the bank scooped two awards for the best commercial bank, and the best retail bank in Vietnam

Early involvement

Prior to Vietnam joining the Association of Southeast Asian Nations (ASEAN) in 1992, BIDV was selected by the state as the only bank to co-operate with Malaysia-based Public Bank Berhad to found the joint venture VID Public Bank.

Subsequently, BIDV has established numerous joint ventures and affiliated projects in banking, insurance, and fund management, with prominent counter parties from the US, Singapore, and Russia. The financial and insurance markets have presented BIDV with various new business opportunities, while drawing out the bank’s strengths in networking, and helping to make it a universal financial and banking corporation in Vietnam.

In addition to the bank’s active operations in the local financial market, BIDV has made bold movements to tap into the financial and banking markets in the neighbouring countries, including Laos, Cambodia, and Myanmar, as well as other countries that have considerable Vietnamese communities, such as the Czech Republic and Russia.

BIDV’s involvement in banking, insurance, and securities have proved its effectiveness and raised its prestige and position in these countries. At the same time, the bank has taken a principal position in connecting Vietnamese enterprises investing overseas through its role as the founder and president of the Association of Vietnamese Investors in Cambodia (AVIC), the Association of Vietnamese Investors in Myanmar (AVIM), and the Association of Vietnamese Investors in Laos (AVIL). BIDV has made great efforts to boost the economic, trade and investment co-operation between Vietnam and other countries where the bank operates.

It also has the capacity to support large-scale projects including three Rural Development Financing projects worth $548 million from the World Bank and a Stress Recovery Support project worth of $500 million from the Asian Development Bank. BIDV is also an active member of various regional associations including the Asian Bankers’ Association, the ASEAN Bankers’ Association, the ASEAN Business Advisory Council0 and the China–ASEAN Interbank Association.

Snapshot of performance

In the first six months of the year, BIDV’s total assets were recorded at VND730 trillion ($33.95 billion), up 25 per cent compared to the same period last year, and 14 per cent compared to the beginning of the year.

Its outstanding loans reached approximately VND535 trillion ($24.88 billion), an increase of 31 per cent and 9.1 per cent compared to the same period last year and the beginning of the year, respectively, also higher than the overall growth rate of 6 per cent across the entire banking system.

Its non-performing loans (NPL) were controlled at around 2 per cent, thanks to the bank’s drastic measures to handle its NPLs effectively and efficiently.

The total deposits were reported at VND547 trillion ($25.44 billion), an increase of 33 per cent compared to the same period in 2014, and 11.2 per cent compared to the start of the year, higher than the overall growth in deposits of 4.4 per cent among other banks.

In addition, BIDV’s post-tax profits stood at VND3.016 trillion ($140.27 million) as of June 31, an increase of 25 per cent compared to the same period last year. Its market segment for credit accounted for 12.7 per cent, while deposits took 11.59 per cent, an increase of 1.1 per cent and 1.28 per cent, respectively, compared to a year earlier.

BID and BIC, tickers of BIDV’s stocks, at certain points in time during the first half of the year, soared some 110 per cent and 98 per cent, respectively, on top of the market average swell of 14-16 per cent. The bank’s stock transaction volume was among the highest group in the stock market.

One step ahead

Taking transparency in its business operations seriously, BIDV has employed an international independent audit and released its financial statements under both Vietnam Accounting Standards and International Financial Reporting Standards since 1996.

Credit rating assessment has been standard practice in the international financial market for years. However, this practice has only been prevalent in Vietnam for the last 10 years. Notably, BIDV was the first-ever bank in Vietnam to begin credit rating assessments. BIDV established credit rating contracts with two of the most prestigious credit rating organisations in the world, Moody’s Investors Service in 2006, and Standard & Poor’s Financial Service in 2010.

In the old days, the bank’s products and services were limited to just account services, international payments, basic trade financing, and foreign exchanges. Nowadays however, the bank has a diversified range of products and services in line with international standards that meets customers’ increasing demands.

BIDV, however, is not satisfied to rest on its laurels, and has a vision to become a leading modernised and efficiently operated bank in Vietnam. Specifically, the bank aims to be ranked in the top 10 banks in Southeast Asia by 2030.