Agribank annual report 2011

In 2012, Agribank aims for “Competition – Efficiency – Modernity – Sustainability”, maintaining a key role in the financial and credit markets for agriculture and rural areas; total ass

VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

Bring prosperity to customers

Annual report

2011

VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

Bring prosperity to customers

Ladies and Gentlemen!

The year 2011 witnessed ongoing domestic economic achievements in Vietnam, despite the fluctuations experienced across much of the global economy Nationwide, inflation was on a downward trend, and the macro economy showed positive signals; production and business continued to grow, and social welfare was guaranteed; agro products export turnover reached a record level of over USD

25 billion, increasing by 23% compared with the year 2010; and a coherent fiscal and monetary policy was effectively put into action At the same time the total means of payment and credit increased by around 12%, and the monetary and forex market remained stable.

Being the largest state-owned commercial bank and financial institution in Vietnam credit institutions system, Agribank continued to grow at a stable pace in 2011 The total assets reached over VND 560 trillion, increasing by 6.5% compared with 2010; total fund resources reached VND 505,792 billion; the total outstanding loans reached VND 443,476 billion, increasing by 6.9% compared with 2010, in which the outstanding loans to agriculture and rural sector increased by 15% and accounted for almost 70% of the total loan portfolio; the bank’s safety ratios were guaranteed, the NPL ratio was on a downward trend in the last months Agribank remained in the Top Ten leading companies in Top 500 Vietnamese Largest Enterprises (VNR 500), gaining the trust of domestic and international clients Agribank continued to be credited by international financial organizations, receiving 117 projects worth USD 5.8 billion, and maintaining relationships with 1,033 banks in 92 countries and territories The Agribank brand accompanied major events across the country: the 44th ADB Annual Meeting, Fishery Festival, and Rice Festival, etc Besides mandates in business, Agribank spent hundreds of billions of dong from its welfare fund for social responsibility activities in areas such as housing support for the poor, scholarships for students, savings book donations to the former young female volunteers and victims of Agent Orange, and schools, healthcare centers and solidarity houses.

In 2012, Agribank aims for “Competition – Efficiency – Modernity – Sustainability”, maintaining

a key role in the financial and credit markets for agriculture and rural areas; total assets, total mobilized funds, and total outstanding loans are set to increase by 11%, 12% and 10% respectively; and prudent ratios in operations are as required by the State Bank of Vietnam Accordingly, all Agribank employees are encouraged to direct their knowledge and resources towards the implementation of innovative solutions such as: First, developing and implementing the restructuring plan of its organizational structure and business activities with a focus on improving the quality of human resources, the governance and management capability, and quality of products and services; Second, maintaining sustainable growth in fund mobilization and ensuring the bank’s solvency; Third, meeting the burgeoning loan demand and expanding banking products and services in agriculture and rural areas; Fourth, reducing bad debt ratio and increasing financial capability; Fifth, modernizing the banking technology;

and Sixth, comprehensively implementing Agribank’s Brand Identity System, to build a friendly, collaborative and relationship-driven culture to satisfy our customers.

In 2012, with a strong sense of confidence and determination; on the basis of promoting its glorious tradition of over 23 years of development and the solidarity and consensus of the management and over 40,000 employees, I believe that Agribank will successfully achieve its objectives and continue to grow in a stable and sustainable manner, deserving the trust from the Party and State as well as millions of its partners and customers.

With best regards !

CHAIRMAN OF THE BOARD OF DIRECTORS

Nguyen Ngoc Bao

MAJOR EVENTS

IN 2011

1 ShifTiNG ThE MOdEl Of OpERATiON

For the implementation of Decision No 214/QĐ-NHNN dated 31 January, 2011 by the Governor of the State

Bank of Vietnam, Agribank shifted the model of operation into a sole member limited liability company, with

100% of the charter capital owned by the State.

2 iNcREASiNG chARTER cApiTAl

In November 2011, the Government supplemented Agribank with VND 8,445.47 billion, raising the Charter

capital of Agribank to VND 29,605 billion Agribank remained the largest commercial bank in Vietnam in terms

of charter capital with the CAR at over 9% as prescribed by the State Bank of Vietnam.

3 chANGiNG, AppOiNTiNG SENiOR pERSONNEl

The Governor of the State Bank of Vietnam issued decisions to appoint members of the Board of Directors and change senior personnel at Agribank.

4 dEVElOpiNG ThE RESTRucTuRiNG plAN

Implementation of the policy of the Party, State and Government in restructuring the commercial banks and financial institutions system, Agribank developed and submitted the Agribank’s Restructuring Plan to the State Bank of Vietnam Besides, Agribank initially deployed the network reorganization and business performance innovation in the direction of modern banking, Growth - Safety - Efficiency – Sustainability.

5 iNVESTMENT iNTO ThE “TAM NONG” REAchEd VNd 300 TRilliON

Holding the key role in the investment into agriculture, farmers and rural areas, in 2011, Agribank actively implemented lending activities in line with the Decree 41/2010/ND-CP on “Credit policy for the development

of agriculture and rural areas “ As of 31 December 2012, the outstanding loans to this sector was VND 301,608 billion, accounting for nearly 70% of Agribank’s total loan portfolio, increasing by VND 39,341 billion, a growth rate of 15% compared with 2010 Agribank was the leading credit institution in pilot lending to the new rural development, contributing to the initial success of the National Target Program on New Rural Development period 2010-2020 of the Government.

6 “BEST pROducTS ANd SERVicES pROVidER iN 2011”

In 2011, Agribank was voted as “Business with the best products and services in 2011” Agribank continuously developed and diversified its products and services in a specialized manner with almost 200 products and services In 2011, Agribank met its customer’s satisfaction and enhanced competitiveness by presenting new fund mobilizing products such as automatic investment, flexible deposit, floating rate term deposit; domestic payment services such as AgriPay (deposit and withdrawal for non – account holders), automated collection;

and various forex trading products.

7 “ExcEllENT BANk iN cARd SERVicE”

Agribank was the leading bank in terms of number of bank cards with 8.4 million cards issued, accounting for 20% of the market share Agribank was honoured to be awarded a Cup by Vietnam Banks Association as

an “Excellent Bank in card service in 2011” for its outstanding achievements and contribution in bank card development in particular as well as for its great contributions to the acceleration of non-cash payment in general.

8 lEAdiNG BANk iN cOllEcTiNG ThE STATE BudGET ThROuGh BANkS

Agribank actively implemented a policy on enhancing non-cash payment of the Government by strengthening the state budget collection through banks and became a leading bank among commercial banks implementing this operation As of 31 December 2011, Agribank deployed 998 collection points at

406 branches Total collected amount reached VND 60,527 billion with 2,860,993 collecting items, increased

by 290.04% in amount and 245.24% in items compared to 2010 The inception of collection points and bank based state budget collecting process of Agribank has been highly appreciated by concerned parties.

The macro economy showed positive movements, social welfare was guaranteed

Business and production were maintained and developed GDP increased by nearly 6%

Agriculture, forestry and fishery increased by 4%, industry and construction increased by 5.53% and services by 6.99% Total export volume reached a record level of more than USD 25 billion, increasing by 27.9% compared with 2010.

Strongly implementing Resolution No 11/NQ-CP dated 24 February 2011 of the Government on key solutions for inflation restraint, macroeconomic stabilization, social welfare assurance, the State Bank of Vietnam issued Instruction No 01/CT-NHNN dated

1 March 2011 on implementation of monetary and banking resolution for inflation restraint Vietnamese banking sector was proactive in managing monetary policies to ensure strictness, flexibility, suitableness to actual conditions, confirming its importance

as the life-line of the economy.

OVERall PERfORmaNCE

Operating in the context where the global economy experienced much unstableness due to crisis and recession, the domestic economy encountered several difficulties and challenges, especially in the first six months due to adverse movement of the economy, the capital market and interest rates, Agribank’s fund mobilization and outstanding loans were continuously declined, however, with strict instructions of the Board of Directors, the Board of Management, as well as the consensus and efforts of the whole bank, Agribank continued to affirm its position and role of the leading commercial bank in rural financial market and the national economy; made positive contributions, together with the Government and the State Bank of Vietnam, to realizing inflation restraint, macro- economic stabilization, and social security assurance.

In 2011, Agribank achieved its planned targets Total fund resources increased by 6.5%

(target from 5% to 7%) Credit grew by 6.9%, exceeding the planned target (growth target from 4% to 6%) Non-performing loans are gradually controlled and reduced to 6.1%, down 1.2% compared with the highest level Liquidity was maintained and stable

Financial performance grew at a rather good pace The development of new banking products and services recorded new achievements with an increase of 29% in non- interest income compared with the year 2010 Governance activities were renovated and accomplished towards more involvement from the Head Office to branches and local units to ensure flexibility and responding to actual market movements for more stable and effective business performance of Agribank.

As of 31 December 2011, total assets of Agribank reached more than VND 560,000 billion; total fund resources reached VND 505,792 billion; total outstanding loans to the economy reached VND 443,476 billion, in which the outstanding loans to agriculture and rural areas was VND 301,608 billion, an increase of VND 39,341 billion (+ 15%), accounting for nearly 70% of the bank’s total loan portfolio.

Agribank had 2,400 branches and transaction offices nationwide and abroad, a customer base of over 30,000 enterprises, millions of households, and thousands of domestic and foreign partners, maintaining correspondent relationships with 1,033 banks in 92 countries and territories in the world.

2009

600,000500,000400,000300,000200,000100,0000

500,000450,000400,000350,000300,000250,000200,000150,000100,00050,000

Year 2011 Year 2010

Agribank ensured high stability in the structure and growth rate of the fund resources, in particular, deposits from population made up 60.6% of total fund resources; diversified the mobilization products and types, making contribution

to the liquidity assurance of the whole system.

Fund resource growth 2007-2011

Unit: VND billion

2007 2008 2009 2010 2011

600,000500,000400,000300,000200,000100,0000

capital structure 2011

Funds mobilized from customers

Funds mobilized from credit institutions and trusted funds

From population From economic entities From State TreasuryPercentage (%) 60.6% 20.6% 4.2% 14.6%

Funds mobilized from populationFunds mobilized from economic entitiesFrom State Treasury

Funds mobilized from credit institutions and trusted funds

international payment volume

in the period 2007-2011

Unit: USD million

2007 2008 2009 2010 2011

12,00010,0008,0006,0004,0002,0000

2 cREdiT

As of 31 December 2011, the total outstanding loans

amounted to VND 443,476 billion, increasing by

VND 28,721 billion (an increase of 6.9%) compared

to that as of end of 2010 In 2011, Agribank timely

issued various credit schemes and policies; instructed

and monitored credit activities ensuring that credit

growth be in line with fund resources growth and

that credit quality be enhanced Agribank gradually

reduced outstanding loans to non-production sectors;

focused in allocating funds for agricultural, rural and

export loans Loans for “Tam nong” areas accounted

for nearly 70% of total outstanding loans, growing

by VND 39,341 billion, an increase of 15% compared

to 2010 Outstanding loans to non-production areas

decreased by 18.8% compared to 2010.

Agribank continued its effective implementation of

the Decree No 41/2010/ND-CP on credit policies

for agriculture and rural development, lending

programs for collection, processing, export of food,

aquaculture products, coffee, etc.; interest rate

support lending program aimed at reducing post

harvest losses for agricultural and aquatic products

according to Decision No.63/2010/QD-TTG, in which,

lending to food sector grew by 48.9%; aquaculture

sector 18%, livestock sector 31.7%, etc.

loan structure 2011

By ECONOMIC SECTORSHouseholds and

VND billion 211,964 231,512Percentage (%) 47.8% 52.2%

By LOAN TERMSShort term Medium and long term

4 fOREiGN BuSiNESS

4.1 International payment

In 2011, the foreign trade activities suffered much from the difficulties of Vietnam and the world economy Although Vietnam import and export turn-over continued to increase and reached USD 203.66 billion, the contribution was mainly from foreign direct investment (FDI) companies with supports from overseas parent companies

Domestic companies faced many difficulties in lack of capital and foreign currencies, unfavorable fluctuation in market and prices.

Agribank actively developed trade finance programs to support its customers such as the GSM-

102 program (export credit guarantee program

of the U.S Department of Agriculture) with a USD

60 million credit limit, Trade finance guarantee program of the Asian Development Bank (ADB) with

a USD 60 million credit limit and other trade finance programs of Agribank correspondent banks with over USD 300 million credit limit In 2011, Agribank was one of the most active banks in using the GSM-

102 in Vietnam as rated by the U.S Department of Agriculture Total import-export payment volume of Agribank in 2011 was USD 7,734 million, decreased

by 12.01% compared to 2010 of which, the export payment volume was USD 3,869 million, decreased

on average 44,906 transactions per day, growing by 27.96% compared to 2010.

Agribank deployed bilateral payments throughout the system with many commercial banks, performed 4,540,447 inward and outward transactions worth VND 761,834 billion or 18,017 inward/outward transactions per day, an increase of 28.6% compared to 2010.

Agribank is a member of the Interbank Payment System of the State Bank of Vietnam with 4,839,027 inward and outward transactions worth VND 2,947,367 billion or 19,202 inward/outward transactions per day, increasing by 25.42% compared to 2010.

On a modern technology platform, in addition

to enhancing traditional payment products and instruments, Agribank focused on the development

of modern payment services such as: Centralized capital management; Automatic salary payment;

anywhere deposits and withdrawals for non – account holders (AgriPay); SMS Banking; VnTopup;

Internet Banking; automatic collection; automatic investment; Payment connection with client;

Payment for electricity, water, tuition fees (Bill Payment); Collection for State Budget; etc For State Budget Collection alone, Agribank implemented in

406 branches with 998 collection points, performed 2,860,993 collecting items worth VND 60,527 billion, increasing by 290.04% compared to end of 2010, maintaining its position as the leading bank among the commercial banks entrusted by the State Treasury for State Budget Collection.

With the largest online payment system in the commercial banking system which can process payment transactions quickly, accurately with various domestic and foreign banks and partners, Agribank brand continued to be recognized as a brand of fast, safe, and low cost quality payments.

Import

2008 2009 2010 2011

30,00025,00020,00015,00010,0005,0000

overseas remittance volume

by 15.5%; the import payment was USD 3,865

million, decreased by 8.3% Although the

import-export payment volume through Agribank in 2011

decreased in comparison with that in 2010 as a

result of economic difficulties, Agribank continued

to earn the loyalty and advocacy from the customer.

4.2 Foreign currency trading

It is always a challenge for commercial banks to

operate effectively in foreign currency trading,

especially in the fluctuation of the currency market

of Vietnam With the advantage of network and

technology, and with the foreign currency trading

activity on the interbank market, Agribank was

one of the leading banks in trading and providing

foreign currency services to individuals and

enterprises nationwide The total volume of foreign

currency trading of Agribank in 2011 reached USD

12,550 million, equivalent to VND 263,926 billion,

increased by 14.4% compared to 2010 of which, the

buying volume was USD 6,283 million, increased by

14.2%; the selling volume was USD 6,267 million,

increased by 14.6% Profit gained from this business

in 2011 reached VND 640 billion, increased by 32.4%

compared to 2010.

4.3 Money market business

2011 is considered as an extremely difficult year for

the inter-bank market Great volatility and tension

had been seen on the money market throughout

the year Agribank had, however, well predicted

the development of the market and had flexible

4.4 Border payment business

Agribank border payment service is available

to China and Laos, neighboring countries that share borders with Vietnam In 2011, total border payment turnover with China reached VND 36,161 billion, increasing by 47% compared to

2010 Of which, the export payment turnover was VND 26,713 billion, increasing by 49% compared

to 2010, the import payment turnover was VND 9,448 billion, increasing by 40% compared to

2010 Total import-export payment turnover with Laos was VND 151 billion, decreasing by 34%

compared to 2010

In 2011, Agribank’s market share in border payments exceeded 40% Payment fees achieved VND 41 billion, an increase of 45% over 2010 Total income from border payment grew from 15% to 20% per year, contributing to the increase of non- interest income portion

With the advantages of the branch network and experience of the pioneer bank in border payment, Agribank has been selected by many customers and partners in doing border trade Border payment has contributed positively to the income increase and service diversification of Agribank in particular and

of the Vietnamese banking system in general and to the promotion of trade between Vietnam and the bordering countries, ensuring stability and security

of monetary system in the border areas.

4.5 Overseas Remittance

As reported by the World Bank, in 2011, Vietnam became one of the 10 largest remittance-receiving countries in the world, the amount of remittances reached USD 9 billion Through implementing many programs such as remittance package products, efficient support and close cooperation with the exported labourers, in 2011, total remittance volume through Agribank reached USD 1,086 million, up 25.7% compared to 2010.

With a modern technology foundation and an extensive branch network, Agribank has confirmed its prestige by bringing fast, safe and convenient money transfer services to customers, partners and big money transfer organizations in the world.

4.6 Receipt and implementation of foreign projects

Implementing effectively and managing transparently the trusted funds, Agribank continued

to be selected as the project serving bank and entrusted with projects by the major international financial institutions

Accessing actively new projects and striving to improve the quality of the project servicing, Agribank has been highly appreciated by the project donors, the State Bank of Vietnam, ministries, agencies and project management units for its strong capacity and high service quality The year 2011 was once again marked as a successful year of Agribank in respects of marketing and receiving projects which contributed

to the growth of the bank, particularly the growth of foreign currency fund resources As of 31/12/2011, Agribank had received 32 trusted projects and served 117 ODA projects with the accrual fund of USD 5.8 billion, continuing to access and register 33 projects with the total value of over USD 4.4 billion.

With the received projects, Agribank was able to utilize the long-term and stable fund resources at preferential interest rates, which facilitated the bank

to timely finance the agriculture and rural areas, contributing to the socio-economic development and creating 766,213 new jobs in 2011.

solutions to cope with difficulties Agribank’s treasury business remained secured and increased

in profitability.

As of 31 December 2011, the turnover of inter-bank deposit transactions amounted to VND 423,954 billion, USD 14.042 million and EUR 829.50 million

Trading of local currency funds in 2011 grew significantly compared to 2010 Inter-bank lending reached 75.4% of available funds resources.

Agribank promoted investment in valuable papers

in order to increase its liquidity and profitability In

2011, total buying volume was VND 16,101 billion

As of 31 December 2011, value of valuable papers was VND 37,182 billion, increasing by 27.85%

number oF cards issued period

2007- 2011

2007 2008 2009 2010 2011

9,000,0008,000,0007,000,0006,000,0005,000,0004,000,0003,000,0002,000,0001,000,0000

deployment oF atms/edcs

period 2007-2011

2007 2008 2009 2010 2011

6,000 5,000 4,000 3,000 2,000 1,000 0

Number of ATMs EDCs

4.7 International Cooperation

Agribank has expanded its correspondent

relationships with 1,033 banks in 92 countries

and territories, maintaining 50 Nostro accounts

with the correspondent banks and 22 Vostro

accounts In 2011, Agribank signed 21 cooperation

agreements and amendments in the fields of

trade finance, cross-border payments, remittances,

accounts, import and export of banknotes, rebate

programs, which provided a legal framework for

the implementation of products and services of

Agribank Besides, Agribank actively participated

in anti-money laundering activities by updating

relevant regulations of the United Nations, the

European Union and the United States, etc In 2011,

Agribank took part in the Annual Meetings of the

WB, IMF, ADB…, established and strengthened

relations with foreign organizations and banks

through the Meetings.

In 2011, Agribank received the international

payment awards such as “Highly Automatic Straight

Through Processing Award” (HSBC), “Straight

Through Processing Award” (Bank of New York).

5 Card Business development

The year 2011 marked a sustainable development of

Agribank on the card market as Agribank affirmed

its leading position in terms of the number of card

holders and the total payment turnover via cards

and card acceptance network.

Agribank maintained a high growth rate of card

issuance with the total cards reaching 8.4 million,

an increase of 31 5% in comparison with 2010,

accounting for 20% of the total market share In

6 pROducTS ANd SERVicES

Agribank engaged its expertise to create products and services in a professional manner which resulted in the creation of many more innovative deposit products for the customer such as Floating rate term deposit; Automatic investment; Flexible deposit and a variety of domestic payment services, notably AgriPay (deposit and withdrawal for non – account holders) as well as in the expansion of the market in overseas remittance payment services

A product portfolio of nearly 200 products and services offered by Agribank as of end of 2011 continued to assert Agribank’s strengths especially

in products and services for domestic payment.

Agribank is one of the banks to provide the most complete Mobile banking services In 2011, Agribank added new services and facilities competing for this product group Accordingly, the customer can pay for telephone, electricity bills, school fees, or can buy game cards through SMS channel The number

of customers using Mobile Banking services in 2011 increased by 51.2 % compared with 2010 Non-interest income increased by 30% compared with 2010.

In addition, Agribank focused in particular in the research of innovative products and services to better serve for the “Tam Nong”, in the development

of domestic and international payment services, and

in the deployment of modern facilities to increase the competitiveness of products and services, while improving existing distribution channels and adding more value to Internet Banking channel.

7 RiSk MANAGEMENT

In 2011, Agribank set up risk provision fund valued

at VND 10,471 billion, brought the bad debts of VND 2,559 billion to off-balance sheet, and recovered the bad loans of VND 2,066 billion To improve the governance and risk management capabilities and implement the customer policy, Agribank completed and deployed the internal credit rating system for all customer, provided system-wide training on the operation and use of the internal credit rating system, on loan classification and handling of risks, credit risk management, etc Loan classification and risk provision were implemented

in compliance with the internal process and related regulations to ensure the adequacy of the provision The credit risk warning and reporting work were periodically made through setting up and implementing reports such as report on inter- branch customer relations; report on outstanding loans by industry, sector, and region; reports on foreign currency loans to closely monitor and limit risks; and many review reports for the governance and safe operations of each branch.

8 iNfORMATiON TEchNOlOGy

Agribank had good management, operation, support and maintenance for the stability of the IT system such as server system, application system, security system, infrastructure system, data center, etc Good handling of incidents, ensuring a stable operating system in turn made good contributions

to the governance and operation of the bank

Agribank developed and supplemented new functionality on the CoreBanking IPCAS system to meet business requirements and the management, development of products and services based on modern information technology In 2011, Agribank completed the largest scale and the most modern data centers in the Vietnamese banking system which helped ensure the absolute safety of the whole system; in addition, the bank focused on improving knowledge of information security.

2011, Agribank installed 400 ATMs and 1,811 EDCs, bringing the total number of ATMs and card- accepting EDCs to 2,100 and 5,621 respectively nationwide Total payment turnover via cards went up by 45% compared with 2010.

Aiming at bringing more facilities to customers, Agribank cooperated with Banknetvn in deploying online payment function of domestic cards (E-commerce) that enabled domestic debit cardholders such as Success Cards, Student Connection Cards, Career Cards to conduct their transactions via internet Besides, Agribank actively researched and conducted many precautionary measures, installed an alarm system in order to ensure the security of ATM transactions The online investigation system (trasoatonline) was deployed

to 100% of the bank’s type I and II branches with a view to save time in settling customer’s claims and cost for the bank.

11 pROMOTiNG SOciAl RESpONSiBiliTy

TO ThE cOMMuNiTy

During the development process, Agribank has always displayed its social responsibility as a major enterprise to the cause of social security of the country Agribank has contributed to a variety of charitable and social welfare activities such as: providing support for the two poor districts of Muong Ang and Tua Chua of Dien Bien province; funding heart surgery for children with congenital heart disease; savings book donations to the former young female volunteers; funding the construction of solidarity houses, cancer hospitals, etc with a budget of over VND 100 billion per year Particularly in

2011, Agribank funding for social welfare activities was VND 200 billion.

Annually, Agribank’s employees contribute to the Fund of Gratitude, Fund for the Poor, Fund for Children and to Gratitude Fund of the banking sector

Through these activities, Agribank is known and recognized by the community as a state-owned enterprise taking the lead in promoting social responsibility, actively supporting the government to implement social security policies.

9 cORpORATE BRANd ANd

culTuRE dEVElOpMENT

The Agribank brand accompanied major events

across the country attracting the attention of the

community such as: the 44th ADB Annual Meeting,

Fishery Festival, and Rice Festival, etc

In 2011, Agribank made a remarkable development

with the completion of the major parts of “Agribank

brand development” project, with the promulgation

and application of regulations on signs and uniform

throughout the system, which made a significant

step forward in transforming Agribank brand

positioning system toward a more professional,

comprehensive and consistent one Also in 2011,

Agribank developed Agribank Corporate Culture

Handbook on the basis of inheriting, addressing

related cultural values of a leading commercial bank

with a long history of nearly 25 years of development

adhering to the development of the “Tam Nong” of

the country.

10 huMAN RESOuRcES TRAiNiNG & dEVElOpMENT

Agribank is the commercial bank having the largest number of employees in Vietnam’s banking system with the total number of 39,950 employees as of

31 December 2011 Agribank has always placed

a high priority on human resources training and development Human resources training and development are considered the decisive factor in the success of all activities Through 2011, Agribank conducted trainings to a total of 6,006 attendee staff members The training programs were developed in accordance with the direction of the Board of Directors and Board of Management and the needs of the participants as well as the labor use units Highlighted training programs: “Management and leadership skills”, “Corporate financial analysis and evaluation of investment projects”, and

“Fundamentals of Procurement”, etc.

To meet the needs for business development, along with training and coaching of employees, Agribank particularly paid special attention to developing and implementing recruitment and labor allocation plans to ensure transparency and stable income sources for employees

Business with the best products and services in 2011

Straight Through Processing Award

Vietnam’s Top 500 Largest Enterprises (VNR 500)

Excellence in bank card operations

Highly Automatic Straight Through Processing Award

ORGANIzATIONAL STRUCTURE

BOaRd Of dIRECTORS

Of agRIBaNk

Mr hoang Anh Tuan

Member of Board of Directors

Mr Vo hong

Member of Board of Directors

Mr Nguyen huu luong

Member of Board of Directors

Mr pham Ngoc Ngoan

Member of Board of Directors Mr Nguyen xuan dong

Member of Board of Directors

Mr Nguyen Ngoc Bao

Chairman of Board of Directors

Mr dang Van Quang

Deputy General Director

Mr Vu Minh Tan

Deputy General Director

Ms le Thi Thanh hang

Deputy General Director Mr Nguyen Quoc hung

Deputy General Director

Mr Trinh Ngoc khanh

Deputy General Director Mr Nguyen Tien dong

Deputy General Director

ORGANIzATIONAL STRUCTURE

BOaRd Of maNagEmENT

Mr kieu Trong Tuyen

Deputy General Director in charge

BOaRd Of dIRECTORS

gENERal dIRECTOR

Functional departments

transaction offices type iii branches

transaction offices

branches

overseas branch operations center type i, type ii branches ative oFFices represent- ative entities administr- subsidiaries

secretariat

to bod risK management committee

supervisory board

deputy general directors chieF accountant internal control & audit system

overall structure

OF THE VIETNAM BANK FOR AGRICULTURE

AND RURAL DEVELOPMENT

Interest and similar income

Interest and similar expense

Net interest income

Net free and commission income

Income/ (loss) from trading securities and foreign currencies

Income from investaments in joint ventures and associates

Net income from other operating activities

total operating income

Provision of credit loss

Credit loss expense under re-repo contracts

Recovery of written-off loans

Impaiment of avaliable-for-sale securities

NET OpERATiNG iNcOME

Personnel expenses

Depreciation and amortization

Other operating expenses

TOTAl OpERATiNG ExpENSES

proFit beFore taX

Corporate income tax expense

Deferred income tax expense/credit

proFit aFter taX

NON-CONTROLLING INTEREST

proFit For the year

77,222,886 (50,495,563)

26,727,323

1,499,211 490,725 66,637 663,018

29,446,914

(12,164,101) 640,167 2,089,966 (1,676)

20,011,270

(10,292,535) (982,325) (5,222,484)

(16,497,344) 3,513,926

(1,195,249) (38,805)

2,279,872

(92,199)

2,187,673

55,826,970 (38,265,172)

17,561,798

1,463,783 (85,415) 52,214 686,914

19,679,294

(4,963,033) (700,972) 2,870,909 (332,050)

16,554,148

(7,701,132) (908,683) (4,464,058)

(13,073,873) 3,480,275

(951,725) 39,605

Mr Kieu trong tuyen

Executive Deputy General Director

Prepared by

Mr le van hung

Deputy Manager Finance and Accounting Departament

Approved by

Mr nguyen Quang thai

Cheif Accountant

Approved by

Mr Kieu trong tuyen

Executive Deputy General Director

Unit: VND million

2011 2010

2,279,872

(609,913) 152,478

-(457,435) 1,822,437

2,568,155

651,508 (162,877)

-488,631 3,056,786

net profit for the year

Other comprehensive income

Foreign currency translasion difference Net gain/(loss) from available-for-sale financial assets Corporate income tax relating to components of the comprehensive income

Other comprehensive income/(loss), net of tax comprehensive income for the year

(*) Refer to the Consolidated Statement of Changes in Owner ,s Equity

cONSOlidATEd iNcOME STATEMENT

FOR THE yEAR ENDED 31 DECEMBER 2011

cONSOlidATEd cOMpREhENSiVE iNcOME STATEMENT

FOR THE yEAR ENDED 31 DECEMBER 2011

Cash and cash equivalents

Balance with the State Bank of Vietnam (“the SBV“)

Due from banks

Derivative financial instruments

Financial assets held-for-trading

Loans to customers under re-repo contracts

Loans and advances to customers, net of provision

for credit losses

Securities investments - available-for-sale

Securities investments - held-to-maturity

Investments in joint ventures and associates

Derivative financial instruments

Debts issued and other borrowed funds

Current tax liabilities

Deferred tax liabilities

Provision for severance allowance

Other liabilities

Total liabilities

8,548,738 17,857,625 37,550,879 63,059 112,844 936,670 439,958,751 35,124,647 3,590,000 552,243 3,666,580 1,931,546 11,988 420,547 5,943,767

556,269,883

56,000,502 28,455,636 406,677,306 35,138 27,572,263 1,233,585 45,159 162,199 8,713,429

528,895,217

8,579,998 11,793,765 37,476,260 144,810 442,532 7,049,096 422,393,790 27,634,477 3,648,656 459,094 3,543,612 1,732,150 12,349 411,208 5,391,458

530,713,255

53,783,067 20,215,252 389,890,718 48,828 26,722,980 1,057,811 149,494 124,410 13,119,800

505,112,360

Unit: VND million

31/12/2011 31/12/ 2010

21,628,932 187,820 8,050,033 (3,248,902) (244,585) 18,909 (15,759) 115,361

26,491,809 882,857 556,269,883

21,511,802 224,716 7,193,988 (4,486,836) 212,850 18,909 (7,617) 81,217

24,749,029 851,866 530,713,255

Chartered capital Other capital Statutory reserves Accumulated losses Available-for-sale reserve Capital surplus

Treasury share Foreign currency translation reserve

Total owner ’ s equity NON-cONTROlliNG iNTEREST TOTAl liABiliTiES, OWNER’ S EQuiTy ANd NON- cONTROlliNG iNTEREST

Approved by

Mr nguyen Quang thai

Cheif Accountant

Approved by

Mr Kieu trong tuyen

Executive Deputy General Director

cONSOlidATEd STATEMENT Of fiNANciAl pOSiTiON

cASh flOWS fROM OpERATiNG AcTiViTiES

Proceeds of interest and similar income

Payment of interest and similar expense

Fees and commission proceeds

Net proceeds from foreign currencies, gold and securities

trading

Other operating proceeds

Other operating expenses

Proceeds from written-off bad debts

Payment to employees

Payment of enterprise income tax in the year

Net cash flows from operating profit before changes

in operating assets and liabilities

(Increase)/decrease in operating assets

(Increase)/Decrease in due from banks

(Increase)/Decrease in trading securities,

available-for-sale and held-to-maturity securities

(Increase)/Decrease in derivative financial instruments

(Increase)/Decrease in loans and advances to customers

Provison for credit losses and impairment of securities,

long-term investment

(Increase)/Decrease in other assets

(Increase)/decrease in operating liabilities

(Increase)/Decrease in borrowings from the Government

and the SBV

(Increase)/Decrease in due to banks

(Increase)/Decrease in due to customers

(Increase)/Decrease in debts issued

(Increase)/Decrease in other borrowed funds

(Increase)/Decrease in derivative financial instruments

(Increase)/Decrease in operating liabilities

Reseverves utilization in the year

Net cash flows from operating activities

75,063,869 (49,867,977) 1,580,814 689,369 798,582 (30,417) 2,089,966 (15,498,024) (1,056,735)

13,769,447

(15,644,022)

12,649,929 (3,371,474) 54,530 (24,937,334) (2,623,301) 2,583,628

22,136,488

1,931,494 8,306,650 16,391,916 (4,234,698) 4,888,333 35,138 (4,666,583) (515,762)

20,261,913

55,106,174 (38,036,049) 1,545,386 453,504 700,735 (80,512) 2,870,909 (9,729,171) (1,233,714)

11,597,262

(63,313,650)

1,167,711 3,219,009 (190,579) (70,068,285) (2,255,303) 4,813,797

39,637,783

8,857,407 (24,829,076) 50,609,636 2,901,939 167,849 (267,899) 2,778,915 (580,988)

(12,078,605)

Unit: VND million

31/12/2011 31/12/ 2010

(1,408,305) 8,785 - - 76,215 -

(1,323,305)

(53,497) (8,142)

-(61,639) 18,876,969 39,963,039

58,840,008

-(1,790,781) 11,073 (5,073) (8,040) 6,440 30,540

(1,755,841)

9,803,000 (15,431) (482)

9,787,087 (4,047,359) 44,010,398

39,963,039

-cASh flOWS fROM OpERATiNG AcTiViTiES

Acquisition of fixed assets Proceeds from sale of fixed assets Purchase of investment properties Additional investments in joint ventures, associates and others

Proceeds from joint ventures, associates and others Dividend receipts in the year

Net cash flows used in investing activities cASh flOWS fROM fiNANciNG AcTiViTiES

Increase in chartered capital Dividend payment

Payment of treasury shares

Net cash flows from financing activities Net (decrease)/increase in cash and cash equivalents cash and cash equivalents at the beginning of the year foreign exchange differentces

cash and cash equivalents at the end of the year

Approved by

Mr nguyen Quang thai

Cheif Accountant

Approved by

Mr Kieu trong tuyen

Executive Deputy General Director

cONSOlidATEd cASh flOW STATEMENT

FOR THE yEAR ENDED 31 DECEMBER 2011

cONSOlidATEd cASh flOW STATEMENT

The system to strengthen and improve the market share of deposits, increase business capital

in the direction of a stable, safe and effective capital structure.

To maintain credit growth at reasonable levels, to restructure capital to focus on the “Tam nong”, lending to small and medium enterprises, export loans, consumer loans as directed by the Government, the State Bank, bringing the proportion of outstanding loans “Tam Nong” to above 70% of total loan portfolio.

To improve the market share and business results of domestic and international payment services, Forex trading, card business, etc of which special attention should be paid to the development of modern service facilities for the agricultural and rural market, small and medium enterprises, and farmers.

To reduce the Loan to Deposit ratio, increase the proportion of investment in valuable papers market, the interbank market, to ensure capital adequacy as prescribed by the State Bank.

To develop and strengthen governance and management models to remain consistent with modern global banking standards.

2 kEy RaTIOS Of 2012

Criteria Target (compared with 2011)

Medium&Long-term outstanding loans /Total

3 PRINCIPal SOluTIONS

Apply appropriate measures to mobilize funds from each type of customer and region, while bolstering and expanding partnerships with other organizations, corporations, and groups.

Implement rigorous Agribank restructuring plan when approved by the Government.

Investigate innovative business management models towards improving the bank’s autonomy and flexibility.

Focus on improving the quality of credit analysis, assessing true state of bad debts and aggressively implementing remedial measures for bad debt handling, reduction and collection.

Strengthen the organizational structure and governance as well as management systems, develop modern management processes across the business, and focus on improving the quality of human resources.

Strengthen the system of inspection and internal control in the direction of improving the quality and efficiency, and reviewing and editing process of ‘one-door’ transaction policy and post-inspection.

Continue to modernize the banking technology, develop modern products and services, improve service market share in urban areas, and improve rapid deploy products and services for the “Tam nong”.

Improve the efficiency of marketing and communication activities associated with social security, thereby promoting the brand, and enhancing the bank’s position and competitiveness.