Nam A Bank completes risk management following Basel III standards

After nearly eight months of implementation, Nam A Bank officially completed and put into operation the methodologies, calculation tools, and operating procedures for the capital components and liquidity management indicators according to regulated Basel III risk management standards.

KPMG awarded the certificate of completion of Basel III implementation to Nam A Bank

Basel III is a reputable risk management standard widely applied internationally and is increasingly being targeted by Vietnam’s banking system through improving the quality of capital and liquidity as required by the standards.

It helps the bank to be better equipped to withstand liquidity stresses, while simultaneously creating the foundation for a sustainable banking system that is resilient to events and contributes to preventing possible system losses.

Accordingly, for capital components, Basel III standards require banks to simultaneously meet both capital adequacy ratio and core capital components and reserve buffer components to ensure safe capital provision.

Basel III also introduces a set of liquidity risk management indicators including liquidity reserve ratio, net stable capital ratio, and leverage ratio to increase resilience of banks in the face of stressful scenarios.

Leveraging high capital requirement standards and emphasis on liquidity risk management, the bank has sufficient assets to meet liquidity needs, maintain a sustainable capital structure, and limit high leverage risk.

At the end of 2019, Nam A Bank was approved by the State Bank of Vietnam for early application according to Basel II standards (pillars I and III) according to the provisions of Circular 41/2016/TT- SBV.

Nam A Bank is committed to building a safe, effective, and sustainable business

In addition to the application of Basel III, Nam A Bank also implemented international financial reporting standards to enhance financial transparency and improve efficiency and safety in its future operations.

A Nam A Bank representative noted, “Completing Basel III international risk management standards is one of the great efforts of Nam A Bank to celebrate the bank’s 30^th anniversary.”

He added, “For Nam A Bank, complying with international practices is the responsibility and honour of the entire banking system when it is always pioneering in the implementation and application of advanced standards to maintain the safety of entire banking system to ensure banks’ operational efficiency as well as the interests of customers and shareholders.”

The bank will continue to implement advanced governance standards in line with international practices to integrate deeply into international capital market.

Which banks lead international risk management standards? Besides Basel II, many banks have also applied Basel III and IFRS 9. These international standards help banks improve risk management and competitiveness compared with their peers, which also contributes to the effective and sustainable development of the credit institution system.

Risk management required in consumer finance arena Consumer finance firms’ performance in Vietnam is deteriorating due to the minimal capital buffer and hazardous nature of such assets – and a pressing need for a credit expansion boost is indicated as a stipulation for consumer finance players to rebound.