Ho Chi Minh City-based commercial lender HDBank (HSX: HDB) has deployed the internal capital adequacy assessment process under pillar 2 of the Basel Committee on Banking Supervision, reaching the full implementation of the three pillars of Basel II in light of Circular No.41/2016/TT-NHNN and Circular No.13/2010/TT-NHNN of the central bank ahead of the deadline.
|HDBank has prepared firm fundaments for its stable operation in the time ahead |
This continues the bank’s upbeat business performance from late 2019 when HDBank was one of the first entities in the banking sectors greenlit by the State Bank of Vietnam (SBV) to apply pillar 1 on minimum capital requirements and pillar 3 on information transparency under Basel II.
Basel II is the second edition of the Basel Accords, which are recommendations on banking law and regulations issued by the Basel Committee on Banking Supervision. It aims to enhance competition and transparency in the banking system and make banks more resistant to market changes.
Beginning implementation in early 2020, by mid-December HDBank was doing a good job with building the methodology, policies, organisational structure, and automated calculations with completion ahead of the deadline, ensuring the system’s stable performance.
|Through ICAAP review, the results show that HDBank has excellently met requirements of Basel II’s three pillars as well as those set in SBV’s circulars 41 and 13 on banking supervision. |
The Internal Capital Adequacy Assessment Process (ICAAP) is one of the most complex activities under Basel II. It aims to ensure the bank will accomplish its business strategy while simultaneously adhering to minimum capital requirements (CAR) of the central bank through effective management of risks associated with pillars 1 and 2, and ensure preparedness to surmount stress-test scenarios amid current economic and market uncertainties.
Through ICAAP review, the results show that HDBank has met requirements of Basel II’s three pillars with flying colours as well as those set in SBV’s circulars 41 and 13 on banking supervision, ensuring a safe fundament for quality and efficient growth path aligned with the bank’s development trajectory.
In the past months, as the world and the domestic economy have been beset by multiple hardships due to natural calamities and the COVID-19 pandemic, HDBank continues to hold a B1 rating by global rating agency Moody’s with high assessments of the bank’s capital capacity, risk management, and long-term growth potential.
Moving forward, HDBank has just completed raising its charter capital to more than VND16.088 trillion ($700 million) through dividend and bonus share payments.
It has also successfully issued $160 million worth of convertible bonds to foreign strategic partners to diversify its capital sources and further enhance CAR status which was maintained at a high level of 10.9 per cent as of September 30, 2020.
In addition, the southern lender has completed important projects on building an automatic treasury system, risk management system with support from global units such as EY, KPMG, and BCG, building strong financial foundations, potential customer ecosystem, and drafting a flexible business strategy, making it ready to develop robustly in the time ahead.