VIB the first bank to fulfill 3 pillars of basel II in Vietnam

December 19, 2019 – Vietnam International Bank (VIB) celebrated Announcement Ceremony: The completion of Basel II three pillars in VIB. After having received approval from Governor of The State Bank of Vietnam (SBV) to apply Circular 41/2016/TT-NHNN in advance, VIB has been the first bank in Vietnam to complete the implementation of 3 pillars of Basel II one year ahead of time than the provisions of Circular No.41/2016/TT-NHNN and Circular No. 12/2018/TT-NHNN.

Attending at the ceremony, along with representatives of the Board of Directors, Board of Executive and Basel II project management at VIB, there were presence of leaders and experts of the State bank of Vietnam (SBV), leading international organizations such as International Finance Corporation (IFC), Asian Development Bank (ADB), Switzerland’s economic cooperation  and development (SECO), Fidelity National Information Services (USA), General Director and leader of PWC consulting company, FIS Technology Group (USA), many reputable Vietnamese news agencies.

Mr. Tran Dang Phi - Deputy Chief Inspector – SBV highly appreciated the initiative and determination of the Board of Directors and all VIB officers in the process of implementing Basel II project, as well as VIB's efforts in complying with the new provisions of the SBV and applying international standards to banking business in Vietnam. The SBV representative also expressed his belief that VIB's completion of Basel II pillars marks an important foundation for VIB's business activities to be safer and more efficient, at the same time promoting other Vietnamese banks in the process of implementing Basel II and fully complying with Circular 41 and Circular 13 of SBV.

Mr. Han Ngoc Vu – Chief Executive officer of VIB shared: “VIB is a bank with a firm risk management foundation transferred from the strategic shareholder Commonwealth Bank of Australia (CBA) that is one of the safest banks in the world. VIB is also assessed as a leading quality bank and always considers the promotion of advanced and transparent corporate governance and risk management standards as one of the most important foundations for the sustainable development strategy. Setting a clear roadmap when deploying Basel II earlier than the deadline prescribed by the State Bank shows that VIB has taken an approach not only for compliance purposes. We consider the completion of the three pillars of Basel II as one of the most important tasks in the long-term for the bank's risk management”.

On behalf of the Switzerland’s economic cooperation and development (SECO), where the Basel Committee is headquartered, Mr. Marcel Reymond congratulated the achievements of the Vietnamese banking industry in general and of VIB in particular, with the role of one of the first two banks to apply Basel II and the first bank to successfully implement all 3 pillars of Basel II in Vietnam. Mr. Reymond also emphasized: “... the task ahead of Vietnamese banks is enormous and challenging but it can equally be an opportunity. And the health of banking and finance sector is a key to ensure long-term economic growth. Therefore, in addition to creating legal corridor from the authorities, the ready state of banks is also an important motivation to succeed in a competitive market today.”

In 2018, VIB successfully implemented pillars 1 and 3 of Basel II by one year earlier than the deadline required by the SBV and also strengthened its finance to ensure CAR that is calculated automatically according to the provisions of Circular No.41/2016 / TT-NHNN and always over 9%. VIB has fully met the requirements of information technology infrastructure, risk management policy systems, databases, human resources and capital planning to ensure the governance and CAR as prescribed.

In 2019, VIB continues to implement pillar 2 - the important pillar of Basel II, in order to improve the Internal Capital Adequacy Assessment Process (ICAAP) before the SBV's deadline. VIB has cooperated with a prestigious consulting firm (PWC) to gain experience and approach ICAAP assessment methods implemented at South East Asia region banks having the same scale, thereby developing processes and assessment methods for internal capital adequacy for banks. As of September 30, 2019, the bank has completed all policies, processes and assessment methods of internal capital adequacy and has been eligible to comply with Basel 2 pillar from January 1 / 2020, one year earlier than the requirement of the SBV in Circular No.13/2018 / TT-NHNN.

Table 1: Three pillars of Basel II were completed at VIB ahead of schedule

VIB leaders also affirmed that the bank intended to continue to develop Basel II by the advanced method and aims to apply Basel III standards in the bank's risk governance. Basel II really brings practical benefits to VIB. It helps VIB to make appropriate strategic adjustments, manage capital plans in line with sustainable growth goals and improve the quality of business activities comprehensively. That international organizations positively assessed VIB’s completion and early application of all three pillars of Basel II contributes to improving VIB’s reputation in particular and Vietnam’s banking industry in general.

 “PwC is very happy to be a consulting company accompanying with VIB in the process of implementing ICAAP project according to Circular 13 ... During the project, we appreciate the strong support and commitment from the Board of Directors to the senior management of VIB as well as their strict supervision. We have also seen the strong determination and great efforts of the VIB project team to implement this important project successfully. Although there are a lot of tasks ahead, we hope this initial success of VIB will create a positive wave of applying international risk management standards to business activities in Vietnam's banking industry”, Mr. Grant Dennis, General Director of PwC Vietnam, consulting firm of ICAAP implementation at VIB said.

Information about VIB

Vietnam International Commercial Joint Stock Bank, abbreviated as International Bank (VIB) was established on September 18, 1996, headquartered at 111A Pasteur, Ben Nghe Ward, District 1, Ho Chi Minh City. As of September 30, 2019, after 23 years of operation, VIB has become one of the leading joint stock commercial banks in Vietnam with equity over VND 13,000 billion and total assets over VND 180,000 billion. VIB currently has nearly 7,000 employees serving more than 2 million customers with 163 branches and transaction offices. VIB has been the No. 1 in term of market share of car loans in Vietnam since 2017; No. 1 in term of retail lending growth (annual growth rate of 60% in the period 2017-2019, among tops of commercial joint stock banks); leading in credit card in Vietnam 2018 according to Global Banking & Finance Review; and No. 1 sales for Bancassurance insurance nationwide.