Customer-centric bank MB to share $50 million of its profits in support of customers

Pham Nhu Anh, member of the Board of Management of Military Commercial Joint Stock Bank (MB)

The pandemic has taken a serious toll on the whole economy. As one of the largest commercial banks in Vietnam, how do MB's support and relief measures for vulnerable businesses and individuals look like?

“Sharing is caring” – that’s our motto, and we are fully committed to customer-centric and sustainable initiatives through thick and thin.

Given the precarious path ahead that customers might face, MB has developed a suite of tool kits to prop up their resilience with a number of interest rate reduction programmes.

Along with that, we have also extended the roadmap for debt rescheduling in a bid to support vulnerable customers hit by the pandemic, which is in accordance with Circular No.03/NHNN from April 2.

In these challenging times, MB has promptly implemented interest exemptions, reductions, and debt extensions for customers affected by the pandemic, under the direction of the local government and the State Bank of Vietnam (SBV).

Furthermore, we roughly estimate that in the last five months of this year, we will reduce interest rates by around VND1 trillion ($50 million) for customers affected by the health crisis.

By mid-August, we had already slashed our accumulated interests by VND400 billion ($17.4 million). At the end of August, MB would reduce another VND300 billion ($13.04 million). The remaining $13.04 million will be calculated in our interest-reduction mechanism within the remainder of 2021.

Could you kindly delve into specific interest rate reductions for MB's customers?

As a customer-centric bank, we firmly believe a “helping hand” is the most critical need at the moment for all kinds of customers, and MB’s assistance could somehow dampen the fears of those on the edge of troubles.

According to our estimation, MB will reduce its interest rates by 0.5-1.5 per cent, depending on specific customer groups and the extent to which customers are affected by the pandemic. With this interest rate, there are around VND70 trillion ($304.3 million) of outstanding loans for individual customers, and approximately VND50 trillion ($217.4 million) of outstanding loans for corporate customers who are entitled to a reduction policy.

Besides existing preferential rates programmes, MB is also deploying its resources to ease the current economic stress with freshly-minted preferential loan packages, with lending rates of 0.5-1.5 per cent – lower than the regular figures. These packages are designed to cater to the needs of individuals and businesses alike.

What are the required procedures and conditions customers need to prepare before applying for the preferential packages of MB?

First and foremost, our task is to assist prioritised sectors, which are defined by the Vietnamese government, the SBV, and MB. For existing customers, we make immediate discounts for prioritised groups – such as manufacturing and hospitality – and notify them. MB is committed to deliver the most appropriate preferential programmes for our customers in vulnerable localities, even before their proposals or suggestions.

For new client groups, which are the prioritised subjects of MB, we will apply a new interest rate roadmap to ensure they receive a rate reduction of 0.5-1 per cent compared to their previous ones. All of our procedures are very simple and swift, which is in accordance with our digitally-driven initiatives.

As a customer-centric bank, MB firmly believes a “helping hand” is the most critical need at the moment for all kinds of customers

How do businesses benefit from the SBV's policies on debt restructuring and rescheduling?

The pandemic has affected customers who are restructuring their debts and those who have yet to restructure. Supply chain disruptions occur in a number of industries, especially tourism and manufacturing, due to a high number of infections among workers. The entire cash flow of several corporate customers has been hit hard by the pandemic. Therefore, it is necessary to extend the principal and interest repayment timelines for these customers.

At MB, we fully comply with SBV’s and other legal regulations. The extension of the principal and interest repayment timeline according to the SBV is necessary during this tough time. This will help corporate customers to restore their production and capital turnover in line with the terms of existing and new loans that they have to repay on due date.

To protect citizens' safety, the Vietnamese government has directed many cities and provinces to implement strict social distancing measures. How does MB maintain the credit flow to customers when it is almost impossible to contact and directly appraise projects and business plans?

In the current context, MB is encountering many hurdles in credit activities for both individuals and businesses. The first difficulty is how to contact and appraise customers, as well as sign credit and collateral documents.

To support customers and maintain credit flow during the social distancing period, MB has made an agreement with them and moved to electronic transaction channels. Besides this, MB also upgraded two of its customer platforms, namely the MBBank App (for individual customers) and Biz MBBank (for corporate customers), so that they can easily access credit flows online.

As individuals and corporate clients in the Mekong Delta are facing enormous difficulties, the SBV has instructed credit institutions to provide timely support to them. How has MB implemented the above directive?

We identify agricultural businesses, particularly the rice sector, as one of Vietnam’s key industries. MB has given a priority to the rice industry to support the development of the Mekong Delta provinces as well as other major agricultural localities. Up to now, MB has disbursed about $197.3 million to rice businesses. We expect to disburse another $87.64 million in the near future to support them with MB's preferential interest rates, which are lower than normal lending products.

Furthermore, we are working closely with many customers to bring payment technology into their business operations. On the MBBank and Biz MBBank App platforms, we will support customers in online payments and purchases, ensuring uninterrupted contact between the bank and customers. This solution limits risks for both sides during the spike in coronavirus infections.