General Information Contact name SAIGON THUONG TIN COMMERCIAL JOINT STOCK BANK Head office 266-268 Nam

Ky Khoi Nghia Street, Ward 8, District 3, Hochiminh City (HCMC), Vietnam Tel: (84 8) 39 320 420 Fax: (84 8) 39 320 424 Website: www.sacombank.com.vn Chartered Capital VND 10,740,230,130,000 (as at 31 December 2011) SWIFT code SGTTVNVX Number of Employees 9,607 employees (as of 31 December 2011)

1. Establishment and development SAIGON THUONG TIN COMMERCIAL JOINT STOCK BANK (Sacombank) was established under Decision No. 05/GP-UB dated on 03/01/1992 of People's Committee of Hochiminh city and operated by Decision No.0006/NH-GP dated 05/12/1991 of The State Bank of Vietnam. Sacombank officially went into operation on 21.12.1991, it was established through the merger of Go Vap Economic Development Bank and three community credit institutions: Tan Binh, Thanh Cong and Lu Gia. Sacombank was among the first joint stock banks incorporated in Ho Chi Minh City. Period 1991-1995, Sacombank is one of the first joint stock banks in Hochiminh city. It started with initial capital of only VND3 billion. The active network located mainly in the suburban districts and the business scope is very small. Sacombank has made a remarkable point in the first year through policy decisions, guidelines such as focus on handling bad debts; expand its network, the issuance of debentures, made quick money transfer service. In 1993, Sacombank opened its branch office in Hanoi. It was the first bank to provide
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express remittance service between Hanoi and HCMC. The service has greatly reduced physical cash transactions between the two Vietnams largest cities. Period 1995-1998, Sacombank focused on the task of planning and developing. In parallel, the bank continued to strengthen and reorganize. With innovative public issue of shares, Sacombank's capital has increased from VND23 billion to VND71 billion, which was initially established financial capacity for the development of the bank. Period 1999 - 2001, capital increased from VND71 billion to VND190 billion. In 1999, Sacombank inaugurated its Head Office at 278 Nam Ky Khoi Nghia, District 3, HCMC. While upgrading the branch office under the expanding network more than 20 provinces and major economic areas, and established relationships with more than 80 foreign bank branches around the world. Meanwhile, Sacombank became a member of the Association of Telecommunications Contact Global Bank (SWIFT), Visa and Master Card. Period 2001 - 2005, accomplished the economic development goals set for 5-year planning period. Especially with the capital contribution of 03 foreign shareholders are financial institutions - the world's strongest banks and factoring sector has access to support advanced technology and management experience operating modern prepared for the process of international economic integration. At the same time, the Bank initially successful model developed joint ventures through capital contribution to establish joint venture fund management - securities companies - insurance companies. Period 2006-2010, Sacombank channels its efforts on improving operational efficiency, management capacity upgrading, resolving inadequacies and improving the banks adaptability and competitiveness. In 2006, Sacombank is the first Vietnamese bank to be listed on the HOSE with a chartered capital of VND1,900 billion. Year 2009 is a memorable year to Sacombank with many milestones. In May, Sacombank was rated a gold stock by the financial market. It has been a blue-chip since listing on the HOSE and has attracted many local and foreign investors. In June, a branch was opened in Phnom Penh. The bank achieved its aim of expanding into Indochina
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to support cross border enterprises of Vietnam, Laos, and Cambodia. After that, in September, the bank upgraded the core banking system from Smartbank to T24 R8 in all its transaction offices. In 2010, Sacombank has successfully completed all 2001-2010 targets, with a growth rate of 64% per year. Building a firm foundation while making necessary changes in the restructuring process, The Bank is now taking actions to achieve the 2011 - 2020 targets. After more than 20 years of operation, Sacombank becomes one of the biggest joint-stock commercial bank in Vietnam with the Chartered Capital up from VND190 billion in 2001 to VND10,740 billion in 12/2011. The network with over 408 branches and transaction offices spread from north to south, the staff of 9,607 people (12/2011), and relations with over 9700 agents of 250 banks in 91 countries around the world. Sacombank is also a joint stock bank with the mass number of shareholders in Vietnam with over 74,130 shareholders, the shareholders of the factoring strategy is the financial group and largest bank in the world such as: Dragon Financial Holdings of Britain International Financial Company (IFC) under the World Bank Group Australia and New Zealand Bank (ANZ) Along with these achievements, Sacombank aims to become a retail bank versatile - modern - the best of Vietnam and large scale regional.

MANAGEMENT AND SUPERVISOR

SHAREHOLDERS COMMITTEE

2. Organization

BOARD OF DIRECTORS

BOARD OF SUPERVISORS

Internal Audit Board of Directors Office

FINANCIAL INVESTMENT COUNCIL

GENERAL DIRECTOR

CREDIT COUNCIL Investment Sector

HR & TRAINING

PERSONAL BANKING

CORPORATE BANKING

TREASURY

TRANSACTION CENTER

CREDIT

INFORMATION TECHNOLOGY

FINANCE

OPERATION

SUPPORTING

REGIONS

Subsidiaries

Board of Research & Development

Human Resource Department

Personal Banking

Corporate Banking

Capital Market Department

Capital Market Department

IT Department

Finance Planning Department

International Payment Center

Administration Department

Branches

OPERATIONS

Board of Productivity & Quality

Training Center

E-Banking

Forex Department

Data Center

Accounting Department

Domestic Payment & Treasury Department

Construction Department

Transaction Offices

Financial Institutions Sector

Contact Center

Northern Region Treasury Center

ALM Sector

Forex Support Sector

External Affairs Department

Figure 1: Organization Chart

3. Human Resources By late 2011, Sacombank has a total of 9,607 employees. Despite a tight labor market, the human resource capacity was enhanced with consistent staff training and development, competitive remuneration, good management practices and a professional working environment. Staff training was provided on an average of two times per employee per year. The approaches of self-learning, on-the-job training and distant learning were provided. The banks saw continual improve its staff quality and have met human resource development requirements. To be one of the best workplaces in Vietnam, Sacombank adopts the workforce development objective of building a professional, modern and stimulating work environment to attract, manage, retail and nurture talent. To improve its human resource management, Sacombank has developed a range of initiatives based on: 1. Findings from an internal analysis of strengths and weaknesses of its existing talents; 2. Opportunities and threats of the banking industry, arising from existing and potential domestic and socio-economic conditions; 3. Banks strategic direction of its human resources; and 4. Organizational culture and staff welfare. Besides maintaining a competitive compensation scheme and promoting Sacombanks brand in the labor market, the Human Resources Department (HRD) has also established collaboration with universities and colleges in Ho Chi Minh City for direct recruitment and internships for students. Sacombank is able to formulate human resource policies, which not only increase the number of staff for its growth but also create jobs for fresh graduates. From early 2011, Sacombank strengthened its cooperation with universities by conducting recruitment exercises, training programs, scientific research programs, site visits, provision of part-time jobs for students, as well as providing banking services for students.

In 2010, Sacombank launched the Potential Trainee Program targeted at senior students at universities and colleges in Ho Chi Minh City. Interns were selected and assigned specific job functions that were based on the interns specific potential. The interns will complete their graduation thesis as stipulated during the internship. All internship-related expenses were covered by the bank. Upon completion of the internship, trainees who have exhibited good performance were employed to work at the branches where they interned. The Potential Trainee Program received very favorable response from the branch network and also captured the attention of the students in Ho Chi Minh City. In 2011, despite the implementation of a more stringent selection process (comprising of qualifying tests and interview), the Potential Trainee Program attracted 10,500 applicants, of which 880 were short-listed and 400 students were selected. The bank also developed the Golden Idea program that awards employees who demonstrated creativity and innovation. Notably, Sacombank conducted an online employee satisfaction survey for the first time. The survey gathered opinions and feedback of almost 5,000 Sacombank employees on improving staff policies. In parallel, Sacombank also gave outstanding performance and long-service awards. Medals were awarded to staff who served more than 10 years. It also honors Sacombank talents in the Golden Book.

4. Scope of Operations Sacombank is allowed to conduct: Deposit taking, receiving foreign capital, funding business capital requirements; Local and international payments, transactions, and funds transfers; Trading and investing in gold, foreign currency, and securities; Other services offered by foreign banks in line with those allowed by the State Bank of Vietnam.

5. Sacombank performance in period 2009-2011

Year-end Total Assets (VND billion) Equity Capital (VND billion) Chartered Capital (VND billion) Total Deposits (VND billion) Total Loans (VND billion) Distribution network (Number of transaction points) Number of Staff For the year Total Income (VND billion) Total Expenses (VND billion) Profit before tax (VND billion) Profit after tax (VND billion) Earnings per share (VND) Financial Ratios Capital Adequacy Ratio (CAR) (at least 9%) Loans/Assets Loans/Deposits Non-performance Loan (NPL) Overdue Debts/ Outstanding Loans Non-interest income/ Total operating income Operating Expenses/ Total Expenses Earnings assets/ Total assets Return on Equity (ROE) Return on Assets (ROA) 2009 98,474 10,289 6,700 86,335 55,497 320 7,200 8,489 6,588 1,901 1,484 2,771 11.41% 56.00% 64.00% 0.69% 0.88% 41.00% 22.00% 85.00% 16.56% 1.79% 2010 141,799 13,633 9,179 126,203 77,486 366 8,507 12,774 10,348 2,426 1,799 2,422 9.97% 54.64% 61.40% 0.52% 0.56% 30.00% 18.78% 85.64% 15.04% 1.50% 2011 140,137 14,224 10,740 109,384 79,429 408 9,607 17,874 15,134 2,740 2,033 2,091 11.41% 56.68% 72.61% 0.85% 0.56% 35.05% 22.45% 79.38% 19.30% 2.00%

Table 1: Major Financial Indicators

(Source: The Single-entity Financial Statements of Sacombank)

In 2010, the Vietnamese economy has it own set of challenges: (i) unsustainable macroeconomic balance due to low economic growth; (ii) capricious changes in prices of good and service and a high risk of inflation; (iii) reduction of foreign exchange reserves; (iv) depressed stock markets; (v) deficits in trade balance and balance of payments that created pressure on the USD/VND exchange rate; (vi) public debt exceeding the safety limit, coupled with low productivity of public investments. Moreover, natural disasters have affected livelihoods.

As Sacombanks pillar of strength, the Board of Directors drew their wisdom from their 20-year experience and from past adversities, to implement the actions in 2011: Applied its four-pronged approach, which included: Increasing its financial capacity rapidly; Expanding the branch network; Enhancing human resource capacity; Modernizing banking technology ensuring stable operations, effective management and sustainable development in line with State Bank Vietnams regulations and Sacombanks expectations. In parallel, Sacombank tried to improve its adaptability and competitiveness through process re-engineering of the systems, resource reallocation and culture. The bank-undertaken project relating to workforce productivity, work performance, business performance, management capacity and customer service delivery. All these projects were re-aligned with IT systems to build stronger operations thereby improving its standardization and integration capability.

5.1.

Total asset
160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 2009 2010 2011 98,474 Total Asset (VND Billion)

141,799

140,137

Figure 2: Total Asset, 2009-2011

Source: Sacombanks annual reports

The graph presents data on the total asset of Sacombank over an 6 years period, from 2006 till 2011. It will be noticed that the total asset of the bank increased, but not stable. In 2009, total asset of Sacombank is VND98,474 billion. The following year, it rose sharply to VND141,799 billion, with an overall increase of VND43,325 billion. In 2011, total asset fell slightly VND140,137 billion, showing a 1.17% decrease when compare with 2010. With that sum of asset, Sacombank is still one of the biggest banks in Vietnam. As mentioned above, the decline is not great if you know last year was a difficult year for Vietnam's economy. This demonstrates that the bank had the right policy to cope with these difficulties.

5.2.

Total funding
140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 2009 2010 2011 Total Funding (VND Billion) 86,335 126,203 109,384

Figure 3: Total Funding, 2009-2011

Source: Sacombanks annual reports

In 2011, from its close monitoring of market development and implementation of timely and flexible initiatives, Sacombank has developed and stabilized the capital funding from its customers. In addition, The Bank has been building a strong brand reputation as an international financial institution. Sacombank has diversified and increased its funding sources through secondary

markets. The dependence on local transactions was gradually reduced through Letters of Credit (L/C) with long-term refinancing at reasonable interest rates. On 31 December 2011, its total funding decreased by 13.32% from late 2010 and achieved VND109,384 billion. Of this amount, funds raised from enterprises and retail customers residents was VND103,285 billion, decreased by 0.5%, constituting 94.42% of the total funding. However, the market share of Sacombank deposit base has still grown steadily annually and reached 4.8% at end of 2011 (Total funding of Vietnams banking industry in 2011 is estimated at VND2,278,833 billion - Source: The State Bank of Vietnam).

5.3.

Loans The range of Sacombanks loans services improved remarkably. By

providing diverse choices that satisfy increasing consumer demands for each market niche, the bank now taps the full potential of the market. It also contributes to socioeconomic development of the areas where the bank is represented.

90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 55,497 77,486

79,429

Total Loans (VND Billion)

10,000
0 2009 2010 2011

Figure 4: Total Loans, 2009-2011

Source: Sacombanks annual reports

By 31 December 2011, the total outstanding loans of Sacombank reached VND79,429 billion, representing an increase of VND1,943 billion (or 2.5%) year-

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on-year. Sacombanks market share in 2011 continued to grow compared to the previous year, accounting for 3.29% of the total outstanding loans of the banking industry (Total outstanding loans of Vietnams banking industry in 2011 is estimated at VND2,410,676 billion - source: The State Bank of Vietnam). In addition, Sacombank enhances its credit risk management through the Overdue Debt Prevention and Settlement Committee and sub-committees. Credit quality has increased as evident in the continual drop in overdue and bad debts. As at 31 December 2011, the overdue and bad debts ratios were only 0.85% (VND677 billion) and 0.65% (VND445 billion) respectively. This is much lower than the industry average and the banks 2011 ceiling threshold (that is less than 2%).

5.4.

Services
1,000 900 800 700 600 500 400 300 200 100 0 926 696 935

Net fee and commission income (VND Billion)

2009

2010

2011

Figure 5: Net fee and commission income, 2009-2011

Source: Sacombanks annual reports

In 2010, net fee and commission income reached VND935.44 billion, an increase of 33% year-on-year (yoy). Of this, the percentage of fee income from International Payments was the highest. The turnover amount of international

payments reached USD5,726 million, up by 37% yoy. The export payments turnover had a significant increase with a corresponding decrease in import-related payments. Remittances and Guarantees services grew strongly in the year.

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Remittance turnover recorded VND2,834,292 billion, up 76% yoy. The value of Guarantees reached VND8,504 billion, up 73% yoy. These achievements were made possible by Sacombanks commitment to reduce dependence on interest incomes through various means. The bank formulated a stable income structure by improving import and export financing, accelerating guarantee services, revising current remittance products using advanced core banking technology and leveraging on its domestic and overseas network. Concurrently, e-banking products with new features were launched and the Customer Service Center was upgraded. The International Payment Center has also revised its business model to streamline administrative procedures and strengthened its advisory payment services.

5.5.

Financial Results The banks outstanding performance was made possible because of its

ability to manage the challenges, leverage the strengths of its branch network and the ability to identify and seize opportunities effectively. In 2011, Profit before Tax reached VND2,740 Billion, up by 12.94% yoy and exceeded the planned target.
3,000 2,500 2,000 1,500 1,000 500 0 2009 2010 2011 Profit Before Tax (VND Billion) 1,901 2,426 2,740

Figure 6: Financial Results, 2009-2011.

Source: Sacombanks annual reports.

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5.6.

Solvency & profitability In 2010, Sacombank re-shaped the Asset Liability structure and gradually improved

the imbalance of tenor between the two by increasing the medium and long-term funds, raising funds from residents, especially increasing trust funds and issuing bonds. Sacombank focuses on investments in physical facilities. Such investments were made in accordance within planned budget and to balance short-term cost to long-term benefts. The abovementioned measures improved proftability, stabilized liquidity and ensured solvency as evidenced by: Ratio of earning assets to total assets was 85.00%; Average return on equity (ROE) ratio reached 19.3%; and Return on assets (ROA) ratio was 2.0%.
25.00% 20.00% 16.56% 15.04% 15.00% Return on Equity (ROE) 10.00% 5.00% 1.79% 0.00% 2009 2010 2011 1.50% 2.00% 19.30%

Return on Assets (ROA)

Figure 7: Solvency & proftability, 2009-2011.

Source: Sacombanks annual reports.

6. Sacombanks SWOT analysis Strengths Strategic partnerships with Australia and New Zealand Banking Group and the International Finance Corporation, plus recognition and various awards from the Government and trade press. Emerged from the global financial crisis in a strong position.

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By not recycling the rapid growth of deposits into new loans, the bank has reduced its loan-to-deposit ratio to less than 100%. The bank also appears to be reducing its vulnerability to a lack of liquidity within the banking system. One of the largest and longest established commercial banks in Vietnam. Sacombank has one of the largest branch networks among commercial banks. Weaknesses Lack of scale. Sacombank is a fairly large bank in Vietnam but a small institution by international standards. Potential direct and indirect problems from the bursting of the asset price bubble. Opportunities Potential for continuing growth from a low base. Leverage of strong position in the Small and medium enterprises (SME) lending sector. Expansion into southern China and countries in the Association of Southeast Asian Nations. Threats Vulnerability to direct or indirect impact from the downturn in global trade. Vulnerable to government credit caps. The increasing competition from other banks, including private banking, particularly the 100% owned foreign banks such as HSCB, ANZ. Competition from other non-banking financial institutions and investment funds operating in Vietnam as other financing channels for enterprises.

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7. Development Strategy Based on its vision of becoming the leading Retail Bank in the Region, Sacombank has developed several objectives, each with specific solutions and roadmaps: 7.1. Human resources strategy The Bank plans to have 13,000 employees in 2015. Therefore, it will: Increase the employment of staff with appropriate capacity; Identify and groom current staff in preparation for promotion and succession; Prepare recruitment and training policies to stabilize the number of staff employees and maintain the attrition rate below 10% per year. 7.2. Banking technology strategy IT plays a significant role in expanding operations. Based on the development pathway of a modern bank, Sacombank shall implement a strong IT strategy over the next 10 years, in order to: Improve workforce productivity and provide a range of product and services of international standards, through the use of advanced technology (that is, continuous improvement and upgrading of the T24 core banking system); Improve the banks competitiveness and management capacity by implementing the remaining features of the core banking system and data warehouse, and continuous development of other technology projects (excluding the T24 System). The MIS shall be improved to support decision-making and implementation of the growth strategy as well as to scale up organizational performance. 7.3. Financial strategy In the next decade, Sacombank shall:

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Enlarge the capital base. Accordingly, the Basel T1 shall be increased by 15%-20% per annum and T2 capital shall be applied to seek growth; Increase total assets by an average of 15%-20% per annum; Grow Profit before tax by an average of 17%-20%; Increase ROE (Profit after tax/Average Shareholders Equity) to 15%17%; Increase ROA (Profit after tax/Average total assets) to 1.5% - 1.7%. 7.4. Channel strategy Sacombank aims to extend its branch network to 600 transaction points nationwide by 2020. Apart from Laos and Cambodia, the bank will also consider expanding to Malaysia, Singapore, the United States of America, Australia, Europe and other Southeast Asian countries. 7.5. Business strategy (funding and lending) Business approach in the next 10 years: Total funding shall grow by an average of 15%-18% per annum in 2011-2020. Domestic funding shall represent 65%-85% of the total fund raised; Total loans shall grow by an average of 18%-20% per annum during 20112020. 7.6. Product and service strategy Focusing on retail banking product and services, with a gradual increase in fee based income. The ratio of total fee and commission income to total income shall reach an average of 12%-18% per annum within 2011-2020; Satisfying customers needs in retail banking and provide the market with reasonably priced financial product packages by cross-selling with partners and member companies of the Sacombank Group;

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Maximizing customers satisfaction by assuring product and service quality at home and abroad; Developing unique products and services to bring in operational effectiveness and improved competitiveness; Developing new services such as derivative products, structured products, debt instrument products among others. 7.7. Management strategy Improving Corporate Governance by using an advanced management model; Steadily developing the organization, human resources structure and operational model; Integrating Headquarters and transaction points for an effective forecasting system; Developing an advanced and professional risk management system in accordance with international standards; Improving internal audit process in accordance.

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Contents
General Information ....................................................................................................... 1 1. 2. 3. 4. 5. Establishment and development ............................................................................. 1 Organization ............................................................................................................ 4 Figure 1: Organization Chart ......................................................................................... 4 Human Resources .................................................................................................... 5 Scope of Operations ................................................................................................. 6 Sacombank performance in period 2009-2011 ....................................................... 7 5.1. 5.2. 5.3. 5.4. 5.5. 5.6. 6. 7. Total asset .......................................................................................................... 8 Total funding ..................................................................................................... 9 Loans................................................................................................................ 10 Services ............................................................................................................ 11 Financial Results ............................................................................................. 12 Solvency & profitability .................................................................................. 13 Figure 2: Total Asset, 2009-2011 ............................................................................... 8 Figure 3: Total Funding, 2009-2011........................................................................... 9 Figure 4: Total Loans, 2009-2011 ............................................................................ 10 Figure 5: Net fee and commission income, 2009-2011 ............................................. 11 Figure 6: Financial Results, 2009-2011. .................................................................. 12 Figure 7: Solvency & proftability, 2009-2011. ............................................................ 13 Sacombanks SWOT analysis ............................................................................... 13 Development Strategy ............................................................................................ 15 7.1. 7.2. 7.3. 7.4. 7.5. 7.6. 7.7. Human resources strategy .............................................................................. 15 Banking technology strategy ........................................................................... 15 Financial strategy ............................................................................................ 15 Channel strategy.............................................................................................. 16 Business strategy (funding and lending) ......................................................... 16 Product and service strategy ........................................................................... 16 Management strategy ...................................................................................... 17

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