September , 2013

VIETNAM – AT A GLANCE

1

Banking Sector LandscapeBanking Sector Landscape2

Macroeconomic OverviewMacroeconomic Overview1

Q&AQ&A3

Contents

Macroeconomic Overview

3

One of the fastest growing countries in South East Asia

Solid & committed economic reforms combined with constitutional & institutional reform

Fast growth with a golden population structure – more than 70% population under 30 years old

Government’s ambitious plan to restructure three core elements of the economy: public investment, state-owned enterprises and the banking system

Source: GSO

Macroeconomic overview

Recovery signals

4

6M2013: GDP grew by 4.9% (y-o-y) Services and Industry-Construction

experienced a modest recovery Agriculture remarkably decelerated over the

time Target for FY2013: GDP: 5.5% (y-o-y) VCBS forecast: 5.2 - 5.3% (y-o-y) in FY2013

and possibly reach 6% in FY2014

6M2013: CPI posted 2.4% (y-t-d) and 6.69% (y-o-y)

Inflation control remains top priority CPI is likely to moderately pick up in coming

months VCBS forecast: 7-8% (y-o-y) for FY2013

Source: GSO

Strong capital inflows

5

5M2013: Japan remains biggest foreign investor in Vietnam

5M2013: Singapore ranks second with USD2.35bn, making up 27.7% of the country’s total registered foreign capital.

The processing and manufacturing industry remained the most attractive for foreign investors

FY2013 forecast: FDI registered and disbursed to reach USD13-14bn and USD10.5-11bn (MPI)

Source: GSO

Export and Import

6

An export-oriented economy

Vietnam’s key import commodities include:• petroleum products• steel• fertilizer• electronics• machinery and equipment

Vietnam's main exports include:• crude oil• textiles and garment• rice• coffee• rubber• coal• aquaculture• processed forest products

Uni

t: U

SD

Billi

on

Source: GSO

Retail and Manufacturing

7

Uni

t: th

ousa

nd B

n. V

ND

Retail SectorSolid retail Growth since joining WTO in 2007Slows down but still grow with double digitNon-grocery sales continue to increase shareInternational players establish a stronger presence

Manufacturing IndustryManufacturing sectors hurts during the recessionInventory sharply tumbles in 2013.Underperformance of the State SectorPrivate Sector pull its weight to sustain the economyRecovery signals turn more visible

Source: GSO, HSBC

Exchange rate

8

Relatively stable since the “shocking adjustment” of +9.3% in March, 2011

Government’s target: solid improvement of Foreign Reserve

The exchange rate is likely to stay anchored or swing up by +1% in the rest of FY2013

Source: SBV, VCB

Banking Sector Landscape

10

Banking sector experiencing high growth phase

The banking market has been opened to both foreign and private sector banks (JSCBs) since 1991

Over-banking in number, but under-banking in service quality

Still infant industry with high potential growth

About 20% of the 87m population in Vietnam have a bank account, about 1 ATM for every 8,000 people and 1 bank outlet for every 20,000 people

Urbanization, a young population and increasing incomes together fuel the demand for banking services

10Source: SBV, GSO

Banking Sector

11

High concentration & competition Dominated by four state-owned commercial banks

(SOCBs) that account for 50% assets, 48% deposit and 52% credit market-share

Joint-stock banks focus mainly on niche market penetration (SME; individuals)

11

Number of Banks 98

SOCB 5JSCB 34Foreign bank’s branches &subsidiaries 55JVB 4

(as at 31/12/2012)

Source: ADB, SBV, IMFSource: ADB, SBV, IMF

Banking Sector (cont’d)

12

Bank profit deteriorated Banks’ credit growth stayed low due to weak

domestic demand and high NPLs.

Profitability deteriorated due to surging operating and provision expenses.

5M2013: 24/124 credit institutions experienced losses, 100/125 gained but 57 of which had negative y-o-y profit growth.

12Source: SBVSource: SBV

Banking Sector (cont’d)

13

Restructuring process and priority for solving NPL problem

SBV required distressed banks to be restructured.

8/9 distressed banks have had their restructuring plans approved by SBV by now.

VAMC (Vietnam Asset Management Company) officially went into operation on 9th July 2013.

However, detailed guidance on NPL trading has not been finalized.

13

Source: SBV

Banking Sector (cont’d)

Photo Gallery

14

Ha Long Bay, northern coastal province of Quang Ninh

Photo Gallery

15

Mu Cang Chai, northern mountainous province of Yen Bai

16

Cat Ba island, offshore the northern coastal city of Hai Phong

Photo Gallery

17

Dragon bridge, central coastal city of Da Nang

Photo Gallery

18

Ho Chi Minh City, southern Vietnam

Important notice: The information contained in this documentation comes from many sources and should be taken for reference purpose only.

Vietcombank takes no responsibility with regard to the accuracy or completeness of any information contained here. Viewpoint and analysis in the report can be changed without notification.

The presentation is a property of Vietcombank and under copyright protection. Infringement of copy, change and reprint of the report without permission of Vietcombank is illegal. Vietcombank owns the copyright on this documentation.

Contact: Mr. Nguyen Ngoc Quang

Deputy DirectorFinancial Institutions DepartmentBank for Foreign Trade of Vietnam (Vietcombank)Tel: (84-4) 3934-3137 ext. 0963Fax: (84-4) 3826-5548Email: nnquang.ho@vietcombank.com.vn

20