Market and Competitor Analysis
Week 3 Nov 2014
Market and Competitor Analysis
Weekly Updated
ISSUER OF THE ANALYSIS:
Strategic Research & Analysis
Strategy and Corporate
Development/Finance & Strategy
Division
Address: Level 20, Techcombank
Tower, 191 Ba Trieu, Ha Noi
Tel: +84 4 3944 6368
Link to Weekly reports
Intranet\Chiến lược & Phát triển\Phân
tích chiến lược
Hoàng Quốc Đông
Director of Strategic Research & Analysis
Email: donghq@techcombank.com.vn
Tel: +844 39446368, Ext. 1243
Lưu Trung Nguyện
Analyst
Email: nguyenlt2@techcombank.com.vn
Ext: 1244
do
Strategy and Corporate Development
Jul 2014
OVERVIEW
 Vietcombank continued to lower the deposit interest rates.
Accordingly, deposit interest rates of 1-month term were 4%/year
which is the lowest deposit rate in the current market. This result partly
showed that the capital mobilization activities of banks still took place
favorably after SBV lowered the deposit interest rate cap from 6% to
5.5% by the end of October.
 JSCBs will be allowed to participate in the VND 30,000 billion
subsidy credit package for housing. Accordingly, commercial banks
will have to send registration to SBV within 30 days from November
25th. In addition, officials of State will be allowed to purchase
commercial houses with the maximum total value of VND 1.05 billion;
workers having lands in urban areas will be allowed to borrow capital
under this program to build or repair their own houses; loan tenor will
increase from 10 years to 15 years… These are the most notable
contents in the Circular 32/2014 issued by SBV amending and
supplementing Circular 11/2013/TT-NHNN regulating the subsidy
credit for housing.
 Risk coefficient of loans for real estate and securities business will
decline from 250% to 150%. With this regulation, CAR of banks will
be improved in the future, especially for banks with the large
outstanding loans for real estate business such as Vietinbank (VND
21,000 billion), VPBank (VND 11,600 billion), Vietcombank (VND
11,000 billion) and Eximbank (VND 10,000 billion)…
 JSCBs and SOCBs will have to maintain the maximum LDR ratio
at the level of 90% and 80% respectively. However, according to the
statistics as of September 30th 2014, there were 5 banks violating this
provision, including Vietinbank, BIDV, VIBank, Eximbank and
SHBank. Therefore, these banks will have 3 months to reduce LDR to
below the specified level. The solution that these banks can push
towards is promoting mobilization. Thus, it is likely that these banks
will increase the long term deposit interest rates to attract deposits in
the near future.
 Each bank will be allowed to hold a maximum of 5% of charter
capital of another CI; each bank can only hold shares of no more
than 2 CIs; total outstanding loans of banks for customers’
investment in stocks cannot exceed 5% of charter capital. Loans of
customers for investing and trading stocks cannot be guaranteed by
those stocks….They are the notable contents in Circular 36/2014
regulating on the limitations, adequacy ratios in operation of CIs.
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 Market and Competitor Analysis
Week 3 Nov 2014
Jul 2014

DEVELOPMENTS OF MARKETS AND POLICY

JSCBs will be allowed to On November 18th, SBV issued Circular 32/2014/TT-NHNN amending and
participate in the subsidy supplementing some articles of Circular 11/2013/TT-NHNN regulating the
credit package for housing subsidy credit for housing with the main contents as follows:
- To supplement eligible borrowers including:
+/ Civil servants, officials, armed forces, workers, low-income workers
having demand for: buying commercial houses with contract value of
not exceeding VND 1.05 billion
+/ Civil servants, officials, armed forces and workers, who have land in
urban areas, will be lended for building or reparing their own houses
- To supplement JSCBs as providers of credit. Accordingly, within 30 days
from November 25th 2014, JSCBs which want to participate have to send
registration to SBV.
- Loan tenor is adjusted as follows:
+/ Increase loan tenor from 10 years to 15 years for customers to purchase or
hire social, commercial houses but not after the date 1/6/2031
+/ Maximum of 10 years for customers to construct, renovate and repair
their houses but not after the date of 1/6/2026
+/ Maximum of 5 years for corporates, households, individuals to construct,
renovate and repair their houses but not after the date of 1/6/2021
Circular 32 will take effect from the date of November 25th 2014.
CBs will not be permitted
to use exceeding 5% of On November 20th, SBV issued Circular 36/2014/TT-NHNN regulating limits
their charter capital to lend and adequacy ratios in the operation of CIs with the main contents as follows:
to customers for securities - Risk coefficient for real estate and security loans will be reduced from 250%
investment to 150%.
- Each commercial bank can holds shares of no more than 2 CIs and only
holds less than 5% charter capital of these CIs, except for the case of
restructuring as regulated by SBV.
- SOCBs and JSCBs must maintain loan to deposit ratio (LDR) respectively at
90% and 80%. In particular, outstanding loan excludes investments in
government bonds, loans with entrusted funds of Government, individuals
and other organizations. Total deposit includes deposit of organizations and
individuals but excludes deposits of State Treasury and money mobilized
from issuance of valuable papers.
Banks have Loan to deposit ratio (LDR) exceeding the limit regulated by
SBV as of November 30th 2014
Banks VIBank SHB BIDV Eximbank Vietinbank
LDR 84.5% 80.1% 96.4% 86.1% 98.6%
- Commercial banks must maintain Reserve ratio at 10% and Liquidity ratio
within 30 days in VND and FCs respectively at 50% and 10%.
- To supplement regulations on banks’ credit for customers’ security
investment:
+/ Commercial banks with NPL of over 3% will not be allowed to lend
customers for stock trading and investing.
+/ Commercial banks will not be allowed to grant medium and long-term

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Strategy and Corporate Development
 Market and Competitor Analysis
Week 3 Nov 2014
Jul 2014

credit for customers to invest and trade stocks.

+/ Total outstanding loans of commercial banks for all customers’ investment
in stocks shall not exceed 5% of charter capital. The customer loans to
invest, trade stocks are not guaranteed by those stocks/
+/ Commercial banks will not be allowed to grant credit or authorize their
subsidiaries or associated companies to invest, trade stock or lend to invest,
trade stock.
- To supplement regulations on ratio of short-term fund used for medium and
long-term loans. Accordingly, commercial banks can only use the maximum
of 60% short-term funds for medium and long-term loans. Medium and long-
term loans include both corporate bonds and other CIs bonds.
- To supplement regulations on ratio of short-term fund used to invest in
Government bond. Accordingly, SOCBs and JSCBs are only allowed
maximum of respectively 15% and 35% short-term fund to invest in
Gorvernment bonds.
This Circular will take effect from the date of February 1st 2015.

INFORMATION ON PROGRAMS, PRODUCTS, NETWORK…OF TCB AND COMPETITORS

On September 19th, Techcombank signed a cooperation agreement with the Department of
Foreign investment about promoting activities to attract investment of Korean enterprizes
into Vietnam. Accordingly, Techcombank will support the Department of Foreign
investment in bulding the Support Department for Korean enterprizes (Korea Desk).
Korean enterprises will be provided with all necessary information about investment
environment, market, the system of administrative procedures, legislation,... in order to
establish investment and business projects in Vietnamese market..

Recently, Vietcombank has continued to lower the deposit interest rates with the reduction
of 0.1%-0.5%/year. Currently, the deposit interest rates of Vietcombank are at the lowest
level of the whole system:
Tenor 1 month 2 months 3 months 6 months 9 months 12 months 24 months
Interest rate 4.0% 4.5% 4.9% 5.3% 5.4% 6.2% 6.3%
th
On November 11 , at the Transation Center of VCB, the Ceremony of signing the credit
contract to finance the BOT Hanoi – Bac Giang project took place with the participation
of Vietcombank, Vietinbank, LienVietPost Bank and investors. This credit contract has
total value of approximately VND 3,660 billion. The project of renovating and upgrading
the section Hanoi – Bac Giang of Highway in BOT form is 45.8 km long with the total
investment value of more than VND 4,213 billion and expected to be completed in June
2016.
On November 19th, in Myanmar, BIDV Finance Company Limited was granted the
temporary establishment license by the Myanmar Ministry of Economic Development and
National Planning. Accordingly:
- BIDV Finance company in Myanmar was established by the capital contribution of
the representative from Vietnam (70%) and the Mahar Bawaga Micro - Consumer
finance company (30%)
- Initial scope of business focused on the following fields: Microfinance; Receiving
deposits; Transferring cash and other financial activities

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Strategy and Corporate Development
 Market and Competitor Analysis
Week 3 Nov 2014
Jul 2014

Other banks From now until December 31st, OCB deployed the preferential credit package “OCB –
Borrowing quickly and cheaply” with some contents as follows:
- Objects: individual customers and household businesses
- Loan purposes: home loan, home repair loan, installment loan for purchasing cars and
used cars, consumer loan with collaterals, manufacturing and business loan
- Lending interest rates:
+/ Fixed 10.5%/year for less-than-12-month loan
+/ 9.5%/year in the first 12 months for from-12-to-24-month loan
+/ 9%/year in the first 12 months for more-than-24-month loan

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Strategy and Corporate Development