“In 2021, the Co-operative Bank of Vietnam (Co-opBank) continued to perform well its role as a support foundation for the development of the PCFs system” SBV First Deputy Governor – Mr. Dao Minh Tu said at Conference on implementation of Co-opBank’s 2022 missions on January 10, 2022. At the same time, Co-opBank has promoted the role as a state credit institution along with PCF system provided financial and banking services to the agricultural and rural areas, contributed to perform Government’s goals for poverty reduction, rural construction; as well as performed the dual goals of preventing the COVID-19 pandemic and promoting socio-economic development in the context of the “new normal”.
SBV First Deputy Governor – Mr. Dao Minh Tu acknowledged the positive results achieved by Co-opBank in 2021
Enhancing the role as focal point of the PCF system
Looking back on 2021, Co-opbank Deputy Executive CEO – Mr. Nguyen Minh Tuan said that, although the charter capital was only VND 3,030 billion with limited financial capacity, Co-opBank performed well its roles and responsibilities in linking the PCFs system.
Co-opbank Deputy Executive CEO – Mr. Nguyen Minh Tuan gave his speech at the conference
This can be seen clearly that Co-op Bank always places the finance coordination and allocation among the PCFs as its key activity. In 2021, Co-opbank faced the pressure that the deposit increasing in high level, the volume of intermediate deposits reached VND 73,523 billion; as of December 31, 2021, the intermediate deposits reached VND 35,779 billion, at the highest time of the year it reached up to VND 41,000 billion. Along with that, Co-opBank still put the interests of PCFs on the highest priority by making an effort to maintain the regulated interest rate on deposits higher than the savings deposit rate. On the other hand, 3 times in the 2021, Co-opbank lowered the interest rate floor for PCF’s loans.
In addition, in the fourth quarter of 2021, Co-opBank continued to implement the lending program “Joining hands to support PCF members” with the lowest interest rate of only 3.5% per annum; it hepled PCF members have the opportunities to access cheap capital. Loan sales under this program reached VND 717 billion with the joins of 304 PCFs, contributed to the growth of outstanding loans to PCFs in the last months of the year 2021 to nearly VND 2,000 billion. Outstanding loans to the PCF system as of 31/12/2021 reached VND 3,481 billion. Loan sales to PCFs in the year 2021 reached VND 18,587 billion.
Co-opBank continued to actively coordinate with SBV branches in provinces and cities in supporting weak PCFs in the whole country by its appointment of more than 50 officers to take up positions in the weak PCFs such as Chairman of the Board of Supervisors, Chief Accountant, CEO…, contributed to help PCFs in loans restructuring and handling its weakness. At the same time, Co-opBank inspected 19/25 PCFs at the request of SBV, thereby recommended PCFs to supplement and amend its internal documents and regulations as well as overcome problems in credit activities.
Co-opbank Chairman – Mr. Nguyen Quoc Cuong gave his speech at the conference
Also in 2021, Co-opbank cooperated with STEP project to continue implementing many practical and effective activities such as: trainied on how to use the PRMS (PCF reporting information management system) to all branches to enhance the effectiveness of remote monitoring for the PCFs, launched E-banking project to provide service integration (EsB) and 24/7 quick interbank transfer to customers and members of the PCFs, promoted the development of financial education applications, developed training materials on business development services for members of the PCFs, completed the PCF’s internal audit toolkit and cash flow loan appraisal method, built a risk monitoring framework using PRMS data, organized a workshop on Gender Equality… STEP also sponsored Co-opbank to develope strategy for digital transformation and information technology.
Supports from Co-opBank has contributed to help PCF system to become stronger in terms of financial capacity, human resource and management qualifications: Charter capital reached VND 6,344 billion (up 10% compared to 2020); total assets reached VND 160,553 billion (up 12% compared to 2020); capital mobilization reached VND 141,810 billion (up 12% compared to 2020); loans to members reached VND 112,205 billion (up 6% compared to 2020); NPL accounted for 0.93% of total outstanding loans.
Breakout speed up for digital transformation
Realized that digital transformation was an essential requirement in the development not only of Co-opBank but also of PCF system which helping PCFs improving its capacity to support its members. In the extremely difficult year of 2021, despite the limited financial and human resources, Co-opBank devoted all its resources on digital transformation, served PCF members and customers in remote areas, helped to connect rural – urban areas closer and closer.
Up to date, Co-opBank basically completed the task of converting magnetic into chip cards; completed upgrading ATM/POS card acceptance devices to meet VCCS standards and received NAPAS certification; completed the transaction testing of Co-opBank chip card and certificated by NAPAS. It was expected that by January 31, 2022, the conversion will be completed in accordance with VCCS standards. In 2021, Co-opBank accelerated the implementation of Remote Loan Origination System (RLOS) for overdraft loans on debit cards.
CFebank’s e-banking system has expanded to 679 transaction points with the joins in payment linkages of 32 branches, 66 transaction offices and 581 PCFs, helping the payment of the PCFs to be fast, safe and secure and accurate. Co-opBank also effectively implemented the overdraft loans service for PCFs who are members and participated in the CF-eBank system in order to support the situation of temporary capital shortage and meet the needs of money transfer and payments of its members and customers.
As of December 31, 2021, there are 178 PCFs participated in the card payment system of Co-opBank. The total amount of Co-opBank cards issued to its officers and PCF’s members was 5,798 cards (accounting for 25% of the total issued cards). The transactions amounts made by card in the form of cash withdrawal via POS/ATM, payment for goods or services, money transfers of PCFs… reached 35,182 transactions with a total amount of VND 1,309 billion; increase of 30.7% in terms of transaction volume and 104% in transaction value compared to 2020.
Overview of the conference
On January 10, 2022, Co-opBank officially launched Mobile Banking service with the main market in rural areas in 57 provinces and cities of nearly 1,200 PCFs. Co-opBank Mobile Banking was the result of efforts and determination in Co-opBank’s digital transformation roadmap. It is also a breakthrough in operation and a fundamental effective step for the coming time of the Co-opBank to support the transformation of PCFs to bringing convenient and modern financial services to the people in remote areas. Co-opBank is also completing the construction and upgrading of a centralized credit and accounting software system to meet the requirements of managing payment deposit account services and collateral overdraft loans for Co-opBank’s customers and it is expected to be deployed in the first quarter of 2022.
Building capacity to support the economy
Along with the role as a bank for the PCF system, Co-opbank also effectively implemented its role as a bank that providing capital to the economy. As of December 31, 2021, the total credit balance for corporate and individual customers is VND 22,738 billion. Credit growth reached 19.83% compared to December 31, 2020. Particularly, outstanding loans for agriculture and rural areas as of December 31, 2021 reached VND 14,596 billion, accounting for 64.25% of outstanding loans to individual and enterprises; on-balance sheet NPL of the whole system was equivalented to 1.14% of total outstanding loans.
Co-opBank proactively deployed credit solutions to support COVID-affected enterprises and individual customers. As of December 31, 2021, the debt balance was rescheduled principal payment term of Co-opBank was VND 156 billion from 256 customers. From March 13, 2020 to December 31, 2021, Co-opBank has restructured the repayment period of principal and interest for 449 customers with outstanding balance of VND 428 billion; lowered interest rates for 9,660 customers with a total outstanding balance of VND 2,288 billion.
In 2022, Co-opBank orients its goals in which: continues to perform well its roles and responsibilities on linking the PCF system, capital regulation, inspection, supervision and safety assurance for the PCF system; continues to participate in supporting weak PCFs under the direction of SBV and coordinate to participate in support, inspection and supervision on PCFs when required. The growth plan targets have also been set compared to 2021: capital mobilization: minimum growth of 15%; credit growth: loans for PCFs grow at least 15%.
Acknowled the efforts of the Board of Directors as well as the entire Co-op Bank system when achieved positive operating results as well as agreed with the 2022 operation plan, SBV First Deputy Governor – Mr. Dao Minh Tu also pointed out the challenges for the sustainable development of Co-opBank and the PCF system, highlighted the key content that Co-opBank needs to focus on implementing in the coming time. That was: Co-opBank’s development and implementation of the strategy and the financial plan for 2022 must closely follow the solutions for managing monetary policy, credit and banking activities of the Government and SBV.
Mr. Dao Minh Tu also thoroughly grasped the entire Co-opBank system to implement safe and effective credit growth, directing credit to manufacturing and priority fields according to the Government’s policy and strictly controlling credit into risky areas; diversify banking products and services in order to provide modern banking products and services to its PCFs member. At the same time, focus on improving credit quality, strictly controlling and minimizing new NPL arising in the context that the economy continues to be negatively affected by the Covid-19 pandemic; completely handle NPL; strictly implement debt classification, provisioning and risk handling in accordance with SBV’s regulations. “Co-opBank needs to continue to strengthen the banking role of the PCF system, provide financial support, capital coordination and allocation among the Funds to ensure the safety of the PCF system, continues to perform effectively its mandate as a management tool of the SBV over the PCF system; implement well the direction of SBV on inspecting the PCFs in 2022” emphasized the Deputy Governor.
SBV First Deputy Governor – Mr. Dao Minh Tu also directed Co-opBank to continue effectively implementing the tasks assigned in the Digital Transformation Plan of the Banking sector and the Non-Cash Payment Scheme for the 2021-2025 period; striving to provide a full range of modern financial and banking services to PCFs and customers in agricultural, rural areas; Actively participate in the formulation of the plan to restructure the PCF system in the coming period, in which proactively propose to the SBV on solutions to restructure the PCF model.
Thoroughly understand the directions of Mr.Dao Minh Tu, Co-opBank Chairman Mr. Nguyen Quoc Cuong said: “Co-opBank determined that this is a very important development stage in order to fulfill its pivotal role, it is necessary to focus on building a bank to take care of PCFs. However, Co-opBank also needs to be concerned by the Government and SBV in terms of the legal framework, mechanisms and policies in the relationship with PCFs, increasing charter capital and supporting capital to have financial capacity”.
Besides as a role of a commercial bank, in the coming time, Co-opBank will strengthen the quality of operations, accelerate digital transformation, apply modern technology to products, human resources, and administration. “In order to achieve this goal, it is necessary to have the support of SBV to develop in terms of scale and operating areas towards using its potential as a basic support for finance, human resources, and the operation of PCF system and Co-opBank,” suggested Mr. Nguyen Quoc Cuong.
According to Banking Journal
