Agribank annual report 2009

At the end of 2009, total assets of Agribank reached VND 470,000 billion, an increase of 22% compared with 2008; total funding resources reached VND 434,331 billion, and total outstandin

No 2 Lang Ha, Ba Dinh District, Hanoi, VietnamSWIFT CODE: VBAAVNVX

Tel: (+84 4) 3831 3694 Fax: (+84 4) 3831 3717 - 3831 3719

Email: webmaster@agribank.com.vn www.agribank.com.vn

VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

BRINGS PROSPERITY TO CUSTOMERS

ANNUAL REPORT 2009

VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

BRINGS PROSPERITY TO CUSTOMERS

VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

BRINGS PROSPERITY TO CUSTOMERS

ANNUAL REPORT 2009

4

Ladies and Gentlemen!

In 2009, the world economy continued to face many

challenges The heavy deterioration of most major

economies shrunk export and capital markets and had

many negative impacts on our economy and society

From the early months of 2009, Agribank, as the largest

bank in Vietnam, was aware of its roles and responsibilities

to the community and society, particularly in the strict and

effective implementation of policies and guidance from the

Party, the Government and the State Bank of Vietnam to

prevent economic recession, maintain reasonable growth,

stabilize macro-economy and ensure social security

Agribank reduced interest rates twice for its customers

from 20.5% to 10.5%, with a total rebated amount of VND

4,300 billion; timely supported interest for 1,337,651

customers with an amount of VND 194,293 billion

Holding the leading and dominant role in Vietnam’s rural

financial market, Agribank continued to prioritize its

investment to the “Tam Nong” (Agriculture, rural areas

and farmers) At the year’s end, outstanding loans to

agriculture and rural areas accounted for 68.3% of the total

outstanding loans, of which lending to rural households

accounted for 51% More than 80% of the rural households

in all geographical areas in the country have gained

access to finance and services provided by Agribank This

contributed to further restructuring of the rural economy,

creating tens of millions of new jobs and more industries,

income increasing progressively transforming the

agricultural sector to a commodity producing sector

Aware of the importance of non-traditional credit products

and services, during 2009, Agribank took full advantage of

modern information technology to develop and introduce

modern banking products and services including: Mobile Banking related services, such as SMS Banking, VnTopup,

A Transfer, A Paybill, and VnMart; payment connectivity with the State Treasury, in coordination with Taxation and Customs Offices for the collection of state budget; and the issuance of more than 4.2 million cards of all kinds

2009 was also the year Agribank placed a strong focus on training and retraining its staff to meet the requirements

of competition and integration Throughout the year, Agribank conducted training and retraining for a total of 142,635 turns of staff (an increase of 57% compared with 2008); successfully implemented online training model, and recruited more than 2,000 young staff with strong educational foundation, foreign language skills and IT knowledge in order to prepare human resources for the following years

At the end of 2009, total assets of Agribank reached VND 470,000 billion, an increase of 22% compared with 2008; total funding resources reached VND 434,331 billion, and total outstanding loans to the economy reached VND 354,112 billion, of which outstanding loans to agricultural and rural areas was VND 242,062 billion

In the context of complex economic circumstances, Agribank is still trusted by international financial organizations such as the World Bank (WB), the Asian Development Bank (ADB), the French Development Agency (AFD), the European Investment Bank (EIB), and others These organizations selected Agribank to implement 138 projects with total capital funding of more than USD 4.4 billion of which the disbursed amount of over USD 2.3 billion Agribank constantly approached

and attracted new projects: the second phase of a

co-finance contract with the European Investment Bank

(EIB); the third phase of Rural Finance Project funded

by the World Bank; Quality and Safety Enhancement of

Agricultural Products (QSEAP) funded by ADB; Small

and Medium-Sized Enterprises Finance Project Phase

3 funded by Japan International Cooperation Agency

(JICA); Small Rubber Holdings Development Project

funded by the AFD Agribank is currently undertaking the

Chairmanship of the Asia-Pacific Rural and Agricultural

Credit Association (APRACA) and also is a member of

International Confederation on Agricultural Credit (CICA)

and Asian Bankers Association (ABA), maintaining

correspondent relationship with 1,034 banks in 95

countries and territories

Besides mandates in business, Agribank also displays

its social responsibility as a major enterprise to the

cause of social security of the country In 2009, Agribank

contributed to the building of dozens of schools,

hundreds of houses of gratitude and healing and

donated tens of thousands of gifts to the poor and the

people who were affected by natural disasters with an

amount up to hundreds of billions of Vietnamese Dong

In implementation of the Government’s Resolution No

30a/2008/NQ-CP to provide assistance programs for

faster and sustainable poverty reduction for 61 poor

districts in 20 provinces, Agribank supplied VND 160

billion in support for the two poor districts of Muong Ang

and Tua Chua of Dien Bien province

In 2009, Agribank was honored to receive General

Secretary of the Communist Party of Vietnam Mr Nong

Duc Manh to visit on the occasion of 21st anniversary (26

March, 1988 - 26 March, 2009) It was also honored to be awarded with different certificates of merit and other noble awards from the Party, State, Government, the State Bank

of Vietnam, and other reputable organizations, including:

Top 10 Vietnam Gold Star Award, Vietnam’s Top 10 Most Prestigious Brands, the title of “Business for Sustainable Development” recognized by the Ministry of Industry and Trade, and VNR500’s Top 10 enterprises

In 2010, Agribank is determined to maintain and confirm its leading and dominant positions in providing loans for the cause of industrialization and modernization of agriculture and rural development in conformity with the policies and objectives set forth by the Party and the State;

to expand its operations firmly, safely, and in a sustainable manner; to continuously improve and apply modern information technology in order to provide convenient services and facilities to all types of businesses and communities; to improve profitability; to further develop its human resources for better competitiveness and quick adaptation in the process of international economic integration; and to progressively improve Agribank brand awareness and culture domestically and internationally

Yours truly!

Chairman of Board of Directors

Nguyen The Binh

General Director

Pham Thanh Tan

ANNUAL REPORT OVERVIEW 2009AGRIBANK

After 2008 with lots of disadvantages, the

global economy continued to undergo

another twelve months of 2009 with even

more difficulties

Recession and crisis have actually had

direct impact on many economic sectors in

Vietnam Natural disasters and epidemics

occurred across the country; the most

heavily affected were the Central area

and the Central Highlands Under these

circumstances, the Government promptly put

forward the 05 feasible groups of solution,

together with the stimulus package to support

loans for working capital with the interest rate

subsidy support of 4% per year, providing

credit guarantee for small and medium sized

enterprises, prolonging time for payment of

income tax, etc with the aim of preventing

economic decline, promoting the advantages

and focusing all resources on economic

development associated with ensuring

social security As a result, the Vietnamese

economy was able to maintain a reasonable

growth rate Gross domestic product (GDP) increased by 5.32%, exceeding the target set by the National Assembly of 5% The Agriculture, forestry and fishery sector increased by 1.83%, the industry and construction sector increased by 5.52%, the service sector increased by 6.63%, and the rate of poor households dropped to 12.3%

While many of the world’s largest banks were forced to conduct merger or declared bankruptcy, with the initiative and flexibility in the use of tools on interest rates, exchange rates, open market operations, reserve ratio, derivatives, etc the State Bank of Vietnam has effectively implemented its monetary policy, controlled inflation, helping to achieve

a stable banking system and stabilizing the economy Particularly, the effective implementation of the policy on interest rate subsidy has helped enterprises maintain their business operations and overcome

a period of difficulty while remaining sustainable development

BUSINESS ENVIRONMENT

2007 2008 2009

246,118

294,697

354,112Unit: VND billion

KEY PERFORMANCE FIGURES

2007 2008 2009

246,118

294,697

354,112Unit: VND billion

Active contribution in efforts

to prevent economic decline, maintain reasonable growth, stabilize macro economy, and ensure social security

Agribank timely implemented programs on interest rate subsidy for businesses and individuals;

as of the 31 December 2009, Agribank’s outstanding loans under interest rate subsidy program reached VND 194,293 billion, accounting for nearly 30% of total loan portfolio under interest rate subsidy program of the whole Vietnamese banking system, with a total of 1,337,651 customers and an accumulated interest amount of VND 2,324.6 billion; of which: outstanding loans for agriculture and rural areas accounted for 56.8% of the total outstanding loans, and 95% of customers under this program In implementation of the Government’s Resolution

No 30a/2008/NQ-CP to provide assistance programs for faster and sustainable poverty reduction for 61 poor districts

in 20 provinces, Agribank supported VND 160 billion for the two poor districts of Muong Ang and Tua Chua of Dien Bien province

Visit of General Secretary of Vietnam Communist Party, His Excellency Mr Nong Duc Manh

On the occasion of the 21st anniversary (26 March, 1988 – 26 March, 2009), on the

21 March 2009, Agribank was honored to receive the General Secretary of Vietnam Communist Party, His Excellency Mr Nong Duc Manh

to visit During the working visit,

Mr Nong Duc Manh praised the important contribution of Agribank during its 21 years

of development and stressed that Agribank’s mandates were to have a thorough grasp and the best implementation

of the Resolution No 26-NQ/

TW towards “strong reform

of mechanism and policies

to mobilize resources for rural economic development, improving the material and spiritual life of farmers at large”

Completion of investment scheme into the “Tam Nong”

On 3 November, 2009, the Board of Directors of Agribank approved the Scheme “Vietnam Bank for Agriculture and Rural Development - expansion and improvement of the efficiency

of capital investment for agriculture, farmers and rural areas in 2010 and orientation toward 2020” According to the scheme, Agribank aims

to maintain the proportion of loans to agricultural, farmers, rural areas at 70% of its total loan portfolio in 2020, of which outstanding loans to individuals and farm households account for about 55% of total

outstanding loans; and to increase investment so that the ratio of outstanding loans per household reaches VND 20-25 million in 2010 and VND 50 million in 2020

This is the second

time in a row Agribank

has achieved “Top 10

Vietnam Gold Star”

award, and the third

time Agribank has won

this prestigious award

Training for over 140,000 turns of staff

Focusing on training and retraining staff to meet the requirements of competition and integration, in 2009, Agribank conducted training and retraining for 142,653 turns of staff (an increase of 57% compared with 2008);

successfully implemented online training model, and recruited more than 2,000 young staff with strong educational foundation, foreign language skills and IT knowledge in order to prepare human resources for the following years

Transformation in perception of product and service development

On the basis of modern information technology and the success of the Symposium on Products and Services, the year 2009 marked a substantial change

in the perception of the whole system on the development

of products and services By the end of 2009, Agribank had provided 182 modern and customer friendly banking products and services and issued more than 4.2 million cards of all kinds

Successful organization

of “Talented and Elegant Bankers Contest of the Vietnam Bank for Agriculture and Rural Development, Vietnam 2009”

To honor the elegance in communication and business skills Agribank wide, the contest was held in large scale from the transaction offices, tier-3 branches to Trade-union of higher levels, including Operations Center, subsidiaries, administrative entities, tier-1 and tier-

2 branches all over the country The screenplay

by Agribank Trade Union was granted Certificate of Intellectual Property Rights

by the Ministry of Culture, Sports and Tourism

4

6

5

7

Despite numerous difficulties within the domestic and the world economy, with the efforts of the whole Agribank system, in 2009, Agribank still achieved good results As of the 31 December 2009, total fund resources reached VND 434,331 billion, an increase of 19.7% compared with the beginning of the year.

Agribank had performed well with the role

of providing capital for the economy Total outstanding loans and capital investment reached VND 394,828 billion, an increase of VND 60,064 billion (17.9%) compared with the beginning of the year, of which outstanding loans to the economy reached VND 354,112 billion, an increase of VND 59,415 billion (20.2%)

Outstanding loans to agriculture and rural areas accounted for 68.3% of total outstanding loans, particularly, lending to farm households accounted for 51% More than 80% of the rural households nationwide have gained access

to finance and services provided by Agribank

Agribank continued to maintain a good credit quality and put NPLs under control at 2.6%

Agribank has put a strong focus on developing and diversifying modern banking products and services, serving the needs of customers and increasing the proportion of non-interest income

2 A LEAP FORWARD

IN INFORMATION TECHNOLOGY ON BANKING

On the basis of the Core Banking system IPCAS which was fully deployed to all branches and transaction offices nationwide since 2008, in May 2009, Agribank further completed the conversion of the IPCAS system to a new version, adding two new modules on Management Information System (MIS) and General Administration (GA) Agribank also put into full operation all categories of the two advanced data centers;

optimized WAN systems in all regional centers; implemented projects on information security to ensure the availability of technology systems, the safety of bank and customer assets, as well as for the development of modern banking products and services

DESPITE NUMEROUS DIFFICULTIES WITHIN THE DOMESTIC AND THE WORLD ECONOMY, WITH THE EFFORTS

OF THE WHOLE AGRIBANK SYSTEM,

IN 2009, AGRIBANK STILL ACHIEVED GOOD RESULTS

3.1 Capital mobilization

As of the 31 December 2009, total fund resources reached

VND 434,331 billion, an increase of VND 71,330 billion

(19.7%) compared with the beginning of the year, of which

fund resources in local currency increased by 15.5%,

fund resources in foreign currencies increased by 57.7%

compared with the beginning of the year Funds mobilized

from customers reached VND 366,995 billion, an increase

of VND 30,146 billion (8.9%) compared with the beginning

of the year; funds mobilized from individuals reached VND

200,211 billion, an increase of VND 26,993 billion (15.6%)

compared with the beginning of the year, accounting for

46% of total fund resources

Agribank always ensured a diversified, sound and stable

capital structure

3.2 Credit

As of 31 December 2009, outstanding loans to the economy reached VND 354,112 billion, an increase of VND 69,495 billion (24.4%) compared with the beginning

of the year Outstanding loans in convertible foreign currencies reached VND 27,739 billion, an increase of VND 5,638 billion (25.5%) compared with the beginning of the year, equivalent to 7.8% of total outstanding loans

In 2009, Agribank completed the scheme “Vietnam Bank for Agriculture and Rural Development - expansion and improvement of efficiency of capital investment for agriculture, farmers and rural areas in 2010 and orientation toward 2020”, with the aim of maintaining the proportion

of loan portfolio in the sector at 70% of total outstanding loans in 2020, of which outstanding loans to households and individuals account for about 55% of total outstanding loans, raising the ratio of outstanding loans per household

to VND 20-25 million in 2010 and VND 50 million in 2020

In implementation of the Decisions by the Prime Minister

on interest rate subsidy, to help prevent the economic decline, maintaining growth, ensuring social security,

as of 31 December 2009, Agribank had provided loans under interest rate subsidy program to a total of 1,337,651 customers with an outstanding loans of VND 194,293 billion, accounting for nearly 30% of total loan portfolio under interest rate subsidy program of the whole Vietnamese banking system Particularly, outstanding loans to agriculture and rural areas alone accounted for 56.8% of the total outstanding loans, and 95% of customers under this program

3 RESULTS OF KEY BUSINESS

2005 2008 2009

12 months - 24 monthsTerm > 24 months

Demand depositsTerm < 12 months

to its outlets to make payment most quickly and most economically The amount paid via Agribank has progressively increased In 2009, on average, each day Agribank executed 28,000 payment orders within its system and 26,000 payment orders outside its system.

Agribank has been in progress of developing payment services, including: Transfer; Collection for State Budget;

Internet Banking; SMS Banking; VnTopup; Payment connection and cash-flow management; Bill-payment; Air ticket selling for Vietnam Airlines through Web portal; Deposits and withdrawals at many places; Capital management;

Collection, payment services; Automatic investment

Structure of outstanding loans in 2009

Short-termMedium, Long-term

39.7%

60.3%

VNDForeign currencies

9,700Unit: USD million

International payment turnover

period 2005- 2009

2007 2006

10,643

9,700Unit: USD million

International payment turnover

period 2005- 2009

2007 2006

5,329 32,736

0,000 50,000 100,000 150,000 200,000 250,000 300,000 350,000

3.4 International payment

Total international payment turnover by Agribank in

2009 reached USD 9,700 million, taking a market share

of 7.7% of total import-export turnover of the country; of

which turnover from payment of exports reached USD

4,926 million, an increase of 10.3 % compared with 2008,

accounting for 8.7% of total export value nationwide;

turnover from payment of imports reached USD 4,774

million, down 32.7% from the previous year, accounting

for 6.9% of total import turnover of the country Although

turnover of import-export payments decreased because of

the impact of restrained global trade growth, Agribank was

able to maintain a similar market share to the year 2008

In 2009, Agribank implemented the scheme “Development

of international payment and forex dealing products”

International payment operations have been executed in

a fast, accurate and secured manner, gaining trust and

appreciation from domestic and foreign partners and

customers Agribank was recognized by foreign banks for

its good performance in international payment: “Global

Payments Excellence Award” by Citibank; “Straight

Through Payment Award” by Standard Chartered Bank;

“Certificates for the high STP Payments” by HSBC;

“Certificates for the high STP rate” by BNY Mellon; and

“Cooperation on Product Innovation” by J.P Morgan

Chase

3.5 Treasury and Forex Dealing

Agribank actively implemented appropriate and timely measures to ensure safe and effective money market and forex trading operations Along with the diversification

of valuable paper portfolio, Agribank carried out Repo transactions with the State Bank of Vietnam through Open Market Operations (OMO) In 2009, Agribank continued to

be one of the leading banks in the interbank market with deposit volumes on the interbank market of VND 314,680 billion and USD 19,370 million

Total foreign exchange turnover reached USD 11,844 million, an increase of 15% compared with 2008 Agribank put priority to meeting the needs of customers for foreign currencies to import inputs for production, with the turnover from foreign exchange trading increased 30% compared with the previous year The whole Agribank system was in strict compliance with the foreign exchange regulations of the State Bank of Vietnam

3.6 Cross-border payment

Cross-border Payment is another Agribank’s strength

Taking advantage of its extensive network along the

borders between Viet Nam-China, Viet Nam-Laos and

Viet Nam-Cambodia, Agribank was the first bank to

provide cross- border payments in local currencies via

Internet Banking and Interbank Payment System through

SWIFT to customers trading goods across the border with

neighboring countries In 2009, besides the successful

organization of the Conference of Five Year (2005-2009)

Cross Border Payment, Agribank showed its interest in

expanding and improving this service by signing a series

of agreements as Cooperation Agreements on cross

border payment with Phongsavanh Bank (Laos) and

ACLEDA Bank (Cambodia); Agreements on Cross Border

Payment via Internet Banking between Agribank branches

in Mong Cai, Lang Son, Cao Bang with China’s “Big Four”

commercial banks being Agricultural Bank of China (ABC),

Bank of China (BOC), Industrial and Commercial Bank of

China (ICBC), and China Construction Bank (CCB)

Cross-border Payment via Internet Banking ensures

secure, fast, accurate transactions at competitive costs

Agribank’s revenue of cross border payment in 2009

reached VND 14,000 billion Dominating over 50% market

share of cross-border payment to China and almost 100%

to Laos and Cambodia, Agribank continues to be selected

by customers as the most reliable partner

3.7 Management of trusted projects

Agribank has been trusted by international organizations such as the World Bank (WB), the Asian Development Bank (ADB), the French Development Agency (AFD), the European Investment Bank (EIB), and International Fund for Agricultural Development (IFAD), and others

As of 31 December 2009, Agribank has received and implemented 138 projects with total capital of over USD 5.4 billion, of which capital through Agribank was over USD 4.4 billion and disbursed amount of over USD 2.3 billion

During the year, Agribank had attracted new projects:

the second phase of a co-finance contract with the European Investment Bank (EIB); the third phase of Rural Finance Project funded by the World Bank; Quality and safety enhancement of agricultural products and biogas development project (QSEAP) funded by ADB; the third phase of Small and Medium-sized Enterprises Finance Project by Japan International Cooperation Agency (JICA); Project for small rubber holdings development funded by the AFD; Loan support to the poor in Dak Nong through joint-liability groups (IFAD), etc Besides, Agribank had been selected as a Serving bank for many other projects As of 31 December 2009, Agribank had been selected in 85 projects with an accumulated amount of USD 3.821 billion; approached 37 projects with total capital of USD 3.5 billion Particularly in 2009, Agribank received and disbursed 09 projects totaling USD 336 million, bringing the total number of projects to

28 with a value of USD 2.5 billion

9,466

3.8 Card service

By the end of 2009, Agribank had issued 4.2 million

cards of all kinds, being the bank with the second highest

number of cards issued in Vietnam and the fastest card

issuing bank With the current number of 1,702 ATMs,

or 20% market share, Agribank is the leading bank

with regards to the number of ATMs Agribank’s ATMs

accept card payment of 18 banks which are members

of Banknetvn, Smartlink; Visa International Card,

MasterCard; and is the only bank to accept CUP card

through ATM Banknetvn at 100% of ATMs

To date, Agribank has provided 11 types of card products,

including 08 international card products, 03 domestic

card products Particularly in 2009, Agribank developed

06 new products, including 04 international card

products, 02 domestic card products (Career card and

Student connection card The product line of Agribank

international card has helped customers with payment for

goods and services at more than 36,620 card-accepting

POS/EDCs in the country, and more than 25 million POS/

EDCs on a global scale; withdrawal, cash advances and

other services at 9,723 ATMs in the country and over 1.6

million ATMs worldwide Sales from card transactions

reached VND 78,497 billion, with 59,138,142 transacted

items In the process of developing cards, Agribank has

always focused on ensuring information security and

confidentiality, being the first bank in Vietnam to complete

installation of the system to prevent copying of cardholder

information in 100% of ATMs

288,840 625,878

1.236,247 2,015,148

4,235,721

The number of cards issued over the years

0 1,000,000

1,702

1,202

802 602

202

The number of ATMs over the years

0 500 1,000 1,500 2,000

2007 2006

2005 2008 2009

In 2010, Agribank aims to increase the number of cards to six million, ranking the leading position in the Vietnamese market on the number of cards issued, contributing to the successful implementation of the policy on non-cash payment of the Government

3.9 Overseas remittance

Due to the impact of the global economic crisis, the volume

of remittances transferred to Vietnam through Agribank

decreased by approximately 20% compared with 2008

Of the whole Agribank system, overseas remittance

revenue reached USD 715 million In particular, revenue of

remittances through Western Union reached USD 446 million,

and through account transfer reached VND 269 million

3.10 New products and services

The whole Agribank had a significant move in 2009 in the perception of product and service development Among the 182 customer friendly and modern products and services providing to the market, an impressive success

of Agribank in 2009 was the effective implementation

of the State Budget collection, Study Savings Plan, Credit Security; and under the development of Credit Insurance according to rice index, proceeding to apply

to coffee, rubber, insurance for agriculture - forestry – fishery More and more products and services of Agribank are known and trusted by customers

715 930

Unit: USD million

712 541 400

Revenue of overseas remittance period 2005-2009

With an extensive network of 2,300 branches and transaction offices across the country, and correspondent relationship with 1,034 banks in 95 countries and

territories, Agribank continued to provide domestic and foreign customers with fast, safe, and convenient money transfer services, being the number one partner in Vietnam

of large money transfer organizations in the world

4 RISK MANAGEMENT

Contributing to the sustainable development of the

whole system, Agribank established Risk Management

Committee and actively developed risk management tools,

including: internal credit rating system for the purposes

of management and effective credit granting, which is

the foundation for the development of other tools for risk

management Also, Agribank completed the standard

industry code to meet the management requirements by

the State Bank of Vietnam and Agribank regarding loan

classification as per each economic sector The code has

been implemented in IPCAS and has great efficiency in

credit operation management in particular and business

development of the whole Agribank system in general,

contributing to bringing down the NPLs ratio from 2.7% in

2008 to 2.6% in late 2009

5 MARKETING AND

BRANDING ACTIVITIES

Agribank implements marketing and other activities of

brand building and brand development in many forms:

through funding for key programs and events having great

significance in the community; ads on newspapers, media

releases, outdoor billboards, posters; TVC movie; radio

skits; Agribank Bulletin; Agribank website; direct marketing

at transaction offices, etc In 2009, the AGRIBANK brand

accompanied major events of the country: Hau Giang Rice

Festival, Festival of Gongs in the Central Highlands, 2nd

Buon Me Thuot Coffee Festival, “Xuan Que huong 2009”

(Spring in the Hometown 2009); “Huyen thoai Con Dao”

(Legend of Con Dao island), “Dien Bien cat canh” (Dien

Bien’s Takeoff), etc Thereby, the prestige and influence of

the AGRIBANK brand continued to maintain and develop

6 INTERNATIONAL COOPERATION AND CORRESPONDENT RELATIONSHIP

Agribank’s activities in international cooperation in 2009 had contributed to the improvement of the image, the position of the bank in the regional and global financial

communities Agribank signed agreements with many foreign banks; received foreign missions from 90 organizations, associations, international banks; actively participated in important international conferences such as the EXCOM Meeting of the Asia-Pacific Rural and Agricultural Credit Association (APRACA) in Korea as chairman; IMF/WB Conference in Turkey; completed the procedures to join the The World Economic Forum’s Community of Global Growth Companies (GGC); in the preparation for the conference

on the World Economic Forum on East Asia 2010 hosted by Vietnam; successfully organized exhibition booth at the Sibos

- Hong Kong 2009 conference organized by SWIFT

Agribank continued to maintain and expand correspondent banking relationship with foreign banks

As of 31 December 2009, Agribank had relationship with 1,034 banks in 95 countries and territories

1,034 996 931 979 932

Correspondent banking relationship 2005-2009

300 600 900 1,200

2007 2006

2005 2008 2009

In implementation of the Government’s Resolution No

30a/2008/NQ-CP to provide assistance programs for faster and sustainable poverty reduction for 61 poor districts

in 20 provinces, Agribank supplied VND 160 billion in support for the two poor districts of Muong Ang and Tua Chua of Dien Bien province, handed over 2,188 houses

to the poor in these two districts; and continued to invest

in building houses for local boarding students and in commune health centers, vocational schools in Dien Bien province as committed

Besides the success in business performance, Agribank

also displays its social responsibility as a major enterprise

to the community through various social and charity

activities Every year, Agribank’s employees spend 03

day wages to contribute to the Fund for the Poor, Fund of

gratitude, Fund for Children; 01 day wages for Gratitude

Fund of the banking sector By the end of 2009, the total

amount that Agribank contributed to social and charity

activities reached over VND 100 billion

BESIDES THE SUCCESS IN

BUSINESS PERFORMANCE,

AGRIBANK ALSO DISPLAYS

ITS SOCIAL RESPONSIBILITY

AS A MAJOR ENTERPRISE TO THE

COMMUNITY THROUGH VARIOUS

SOCIAL AND CHARITY ACTIVITIES

SOCIAL

RESPONSIBILITY

(Award names and photos)

1 Top 10 Vietnam Gold Star Award

2 Top Trade Services Award 2009 (Ministry of Industry and Trade)

3 Top 10 enterprises (ratings by VNR500)

4 Bussiness for Sustainable Development (Ministry of Industry and Trade)

5 Cultural enterprise award of UNESCO

27

Mr.Kieu Trong Tuyen

Deputy General Director

Mr.Vu Minh Tan

Deputy General Director

Mr.Dang Van Quang

Deputy General Director

Mrs Le Thi Thanh Hang

Deputy General Director

Mr.Nguyen Quoc Hung

Deputy General Director

FUNCTIONAL DEPARTMENTS CHIEF ACCOUNTANT INTERNAL INSPECTION AND SUPERVISION

SECRETARIAT

TO BOD SUPERVISORY BOARD RISK MANAGEMENT COMMITTEE

BRANCHES

TRAINING AND

HUMAN RESOURCE MANAGEMENT

thoughtful and dedicated in customer service In 2009, Agribank successfully implemented the IPCAS online training model for 18,266 employees; organized many large-scale professional training programs based on actual needs for new products and services, outward remittance via Western Union, forex dealing on IPCAS, border payment, etc.

With the support of the bank’s partners, other international financial institutions, Agribank’s employees had been involved in many training courses within the country and abroad to improve knowledge and learn professional experiences from advanced banks in the world

35

Agribank has always put the focus on human resource development both in quality and quantity towards sustainable development In 2009, Agribank conducted training and retraining for a total of 142,653 turns of staff (an increase of 57% compared to that of 2008);

recruited more than 2,000 young staffs with strong educational foundation, foreign language and IT skills

As of 31 December 2009, Agribank had a total of 35,135 employees, of which the educational level break-down was

TOWARDS SUSTAINABLE DEVELOPMENT, AGRIBANK HAS

ALWAYS PUT A STRONG FOCUS ON HUMAN RESOURCE

DEVELOPMENT BOTH IN QUALITY AND QUANTITY.

1 THE OVERALL GOALS

• To maintain and promote the leading position of a

state-owned commercial bank that plays the key and dominant role in rural financial markets;

• To maximize the mobilization of domestic and foreign

funds by using all means and solutions to actively provide capital for the economy;

• To maintain credit growth at reasonable levels; to give

priorities to investment in agriculture, farmers and rural areas (called “Tam Nong”), that firstly to households

in agriculture, forestry, fisheries, salt production, small and medium enterprises to meet the requirements of restructuring the investment for “Tam Nong”, with the outstanding loans for this sector of about 70% of total outstanding loans;

• To take full advantage of network and technology,

diversifying products and services provided to improve quality of services to be able to compete in the new period of integration;

• To upgrade the activities of branding, marketing towards

a higher professional level in order to substantially enhance the brand identify of Agribank

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• Strictly implementing the policies set

by the Government, the State Bank of

Vietnam on monetary policy in 2010 and

subsequent years;

• Promoting mobilization of capital

from various sources, strengthening

cooperation and payment connection

with large organizations and businesses

to ensure capital for the economy;

• Investing selectively and in order of

priority; focusing on collection of debts

and bad debts to turn over capital

properly to substantially and timely meet

the requirements of capital for the “Tam

Nong” and other key programs of the

Government, ensuring an appropriate

credit growth in 2010;

• Improving the quality of disbursements

for trusted investment projects;

strengthening the attraction, effective

implementation of ODA projects, trusted

projects;

• Performing the evaluation of 10-year

strategy implementation (2001-2010), building business strategy of Agribank period 2011-2015 and Vision 2020;

• Implementing Agribank Rebanding

Project period 2009 - 2010 and over the next five years;

• Giving priority to the investment into

banking technology, promoting the Campaign on development of new products and services according to the criteria and standards of a modern bank, which focuses on developing technology-based payment products in order to meet customer needs, increase non-interest income, improve the competitiveness of Agribank

2 KEY RATIOS OF 2010

CRITERIA TARGET (COMPARED WITH 2009)

Fund resources + 22%-25%

Outstanding loans + 12%-13%

Medium&Long-term outstanding loans

/Total outstanding loans ≤ 40%

Non Performing Loans < 5%

Non-interest income 15%

3 KEY SOLUTIONS

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40

Vietnam Bank For Agriculture And Rural Development

REPORT OF THE BOARD OF DIRECTORS

The Board of Directors of Vietnam Bank for Agriculture and Rural Development (“the Bank”) presents this report and consolidated financial statements of the Bank and its subsidiaries for the year ended 31 December 2009

THE BANK

The Bank is a state-owned commercial bank that is incorporated and registered in the Socialist Republic of Vietnam.The Bank was initially established as Vietnam Bank for Agricultural Development pursuant to Decree No 53/HĐBT dated

26 March 1988 by the Chairman of the Ministers’ Council The Bank changed its name to Vietnam Bank for Agriculture

in accordance with the Decision No 400/CT dated 14 November 1990 by the Prime Minister of the Socialist Republic

of Vietnam Pursuant to Decision No 280/QD-NH5 dated 15 October 1996 and Decision No 1836/QD-TCCB dated 28 December 1996, the name of the Bank was changed once again to Vietnam Bank for Agriculture and Rural Development The Bank is one of a special state-owned enterprise being modeled as a national state-owned corporation with an effective operating period of 99 years commencing from the date of re-establishment

Principal activities of the Bank include mobilizing and receiving short-term, medium-term and long-term deposits from organizations and individuals, making short-term, medium-term and long-term loans and advances to organizations and individuals based on the nature and capability of the bank’s sources of capital; also including foreign exchange transactions, international trade financial services, discount of commercial papers, bonds and other valuable papers, providing brokerage services and other banking services allowed by the State Bank of Vietnam

The Bank’s Head Office is located at 2 Lang Ha Street, Ba Dinh District, Hanoi, Vietnam As of 31 December 2009, the Bank has one (01) Head Office, three (03) Representative Offices, three (03) Administrative Units, one (01) Transaction Center, one hundred fifty seven (157) branches level 1 and level 2, seven hundred seventy six (776) branches level 3 and one thousand three hundred and seventy two (1,372) transaction outlets located in cities and provinces throughout the country

OPERATING RESULTS

Summary of operating results of the Bank and subsidiaries is as follows:

2009 2008

Net profit in the year 1,776,302 2,124,004

Retained earnings at the end of the year 552,720 825,106

EVENTS DURING THE YEAR

In year 2009, two subsidiaries of the Bank, namely Agribank Leasing Company I & Agribank Leasing Company II incurred significant losses of VNDm131,575 and VNDm1,702,633 respectively In addition, certain portion of liabilities of both companies were not settled to creditors on due date and were overdue as at 31 December 2009 These matters raise substantial doubt about the Company’s ability to continue as a going concern However, the Bank has been preparing restructuring plan for these companies, including bad debt work-out plan and necessary financial solutions so that these companies can continue operating on a going concern basis