“ In the overall results of the banking industry, the Co-operative Bank of Vietnam (Co-opBank) with its role of supporting the development of the People’s Credit Fund (PCF) system, creating a capital to serve members develop their production and business, making a significant contribution to poverty alleviation, limiting black credit, and improving people’s living standards, particularly in the agricultural sector and rural areas, has made a significant contribution, according to the Deputy Secretary of the Party Affairs Committee, Standing Deputy Governor of the State Bank of Vietnam – Mr. Dao Minh Tu noted at Co-opbank’s Conference to summarize the work in 2022 and deploy the 2023 tasks, which was held on January 11, 2023 in Hanoi.
SBV Standing deputy Governor – Mr. Dao Minh Tu gives his speech at the Conference
Platform to support the development and digitization of PCF system
Addressing at the start of the Conference, Co-opBank Chairman – Mr. Nguyen Quoc Cuong stated that in 2022, Co-activities opBank’s faced numerous obstacles and considerable pressure from unanticipated economic changes. Although financial resources are still limited, Co-opBank has made significant efforts to execute given responsibilities and perform successfully as the focal point of the PCF system.
Reporting on the results of Co-operations opBank’s in 2022, Co-opBank Deputy CEO – Mr. Nguyen Minh Tuan stated that as of December 31, 2022, the total operating capital of Co-opBank was VND 49,799 billion, an increase of 1.33% over the previous year; and the harmonised deposit from PCFs was VND 24,309 billion, a decrease of 32.06% over the previous year. Overall outstanding loans were VND 31,185 billion, an increase of VND 4,987 billion (corresponding 19,04%) from the year-ago quarter. Profit achieved 102.96% of the anticipated plan.The role of the focal point of PCF system is clearly shown in the capital intermediation between Co-opBank and the PCFs, which has always been a key activity of Co-opBank – with a clear orientation of prioritizing the needs of deposits and loans of PCF system at all times. For PCF who need additional capital to operate, Co-opBank has promptly adjusted the level of loans to extend credit beyond the limits which was specified in the Regulation on Capital Regulation in order to support PCF’s operation.
Co-opBank, on the other hand, continues to execute the loan programme “Joining hands to help PCF members” with low interest rates (minimum 4.8%/year) to share hardships with PCF members during the first ten months of 2022. Furthermore, Co-opBank maintains an ongoing policy of running lending interest rates for PCFs that are lower than lending rates for enterprises and people. Outstanding loans to PCFs reached VND 5,590 billion as of December 31, 2022, a 60.57% rise over the same time in 2021 – the biggest amount ever.
Co-opBank has a preferential policy on term deposit interest rates for PCF harmonised deposits, which are always 0.5% higher than the maximum deposit interest rate each year depending on the individual term. The harmonised deposit amount of the PCFs was VND 24,309 billion as of December 31, 2022, down 32.06% due to increasing demand for withdrawing deposits from members to recover production and commercial operations following the Covid-19 pandemic.
Co-opBank has deployed a variety of modern multi-channel and multi-utility payment products and services to PCFs, performing well as the focal bank, accompanying PCFs in digital transformation, and promoting non-cash payments, particularly in the context of the digital transformation, which is trending strongly.
Co-opBank Chairman – Mr. Nguyen Quoc Cuong gives his speech at the Conference
Co-opBank had welcomed 81 more PCFs as members of the whole system as of December 31, 2022, bringing the overall number of Co-opBank transaction points to 76, comprising 32 Branches, 66 Transaction Offices, and 663 PCFs.
Outbound transactions were 275,562 items (up 21%) with outbound sales of VND 40,485 billion (up 45%) compared to the same time last year; Incoming money transfer transactions were 273,107 items (up 78%) with remittance turnover of 19,191 billion VND (up 75%) compared to the same period last year.
Co-opBank has also awarded an overdraft limit of payment accounts to 407 PCF members who participate in the CF-eBank system, with the allowed limit of VND 542 billion, overdraft sales of VND 7,440 billion, and profit of VND 3,057 billion. PCFs execute the responsibility to repay principal and fees in accordance with Co-regulations. opBank’s
Co-opBank continues to improve card utilities focused at PCF members, such as: granting overdraft limits of up to VND 100 million; connecting with NAPAS to facilitate card transactions in Korea; implementing reward and promotional programmes… As of December 31, 2022, there were 259 PCFs participating in Co-payment opBank’s card system, with 59,825 transactions totaling 3,296 billion VND (increased 70% in number of transactions and more than 151.8% in value compared to 2021).
Co-opBank Mobile Banking application is developed with a nice interface that is simplified, making it simpler for consumers to experience a variety of adaptable banking apps, which are becoming an efficient means to deliver online banking services to PCF members, particularly in rural regions.
There is also a chance to assist Co-opBank and PCFs in reaching out to new members and consumers, particularly in distant and inaccessible locations, in order to complete Vietnam’s overall financial development strategy. In particular, Co-opBank prioritises resources to implement the policy of eliminating all fees for the implementation and operation of payment products and services, as well as making all money transfer transactions free of charge for PCF members who join the electronic banking system; free transactions on Co-opBank Mobile Banking digital banking application with a fee exemption and reduction value of nearly VND 4 billion as of December 31, 2022.
Continue to improve system support capacity
Co-opbank has coordinated with local SBV branches to support weak PCFs; Co-opBank has appointed 52 officers to participate in the administration or special supervision of weak PCFs in 14 provinces and cities; and Co-opBank has appointed 52 officers to participate in the administration or special supervision of weak PCFs in 14 provinces and cities. Disseminating the PCF Handbook to assist Co-opBank branches in effectively managing and dealing with PCF vulnerabilities. Continue to do a good job of delivering blank savings books for PCFs in compliance with SBV rules.
In addition, in the position of a state-owned commercial bank, Co-opBank swiftly introduced digital applications into banking operations, in line with market signals to promote economic support, especially in rural regions. The total outstanding loans to individual and company clients were VND 25,504 billion as of December 31, 2012, with new credit growth reaching 12.58% compared to December 31, 2021.
Co-opBank actively undertook restructuring related to bad debt resolution and essentially met the objectives established in 2022. The bad debt ratio has always been kept low (on the balance sheet, the bad debt ratio is 0.46%).
At the Conference, many individuals and units of Co-opBank received certificates of merit and noble titles from the Prime Minister, the Governor of the State Bank, and the Trade Union of the State Bank of Vietnam.
SBV Standing Deputy Governor Mr. Dao Minh Tu spoke at the conference on behalf of the Party Committee and the SBV Board of Directors, complimenting Co-op Bank’s efforts and successes in 2022.
Mr. Tu further stated that the global and domestic economic condition in 2023 will be more difficult and hard. In which economic growth is expected to decelerate, inflation pressures to rise, and global commerce to contract… As a result, the financial system will continue to encounter several obstacles and difficulties in 2023.
In that context, Mr. Tu proposed to Co-Board opbank’s of Directors, Executive Board, and all officers and employees that they continue to promote the achievements made in the past and make efforts to perform well the tasks and solutions mentioned at the Conference on implementing banking tasks in 2023 in order to help the entire banking industry fulfil the assigned political tasks. Mr. Tu emphasised seven major issues that Co-opBank must prioritise in the next months.
To begin, closely monitor the Government’s and the State Bank’s monetary, credit, and banking policies, prepare business and financial strategies for 2022, submit to the State Bank for approval, and implement. Today, endeavour to attain the defined goals.
Secondly, completely grasp throughout the system to execute safe and effective credit growth along with enhancing credit quality; rigorously regulate credit into potentially problematic sectors, limiting new emergent bad debts.
Finally, in the years 2021-2025, focus resources on developing and effectively implementing a restructuring strategy for dealing with bad loans. In particular, the plan to increase Co-charter opbank’s capital from legal sources; develop growth in operating scale, improve capital quality, improve capital safety ratio as prescribed by the State Bank; improve management, administration, and risk management efficiency in accordance with modern banking standards…
Fourth, strengthen Co-function opbank’s and responsibilities as a focal point of the PCF system, controlling capital, monitoring, and assuring the PCF system’s safety in line with the law. Applying the State Bank’s directive on PCF examination in 2023. In order to assure the feasibility and efficacy of the PCF system, precise strategies must be developed. Coordination of training and retraining for PCFs with the PCF Association and local SBV branches to enhance management, administration, and professional skills for its officials; Active participation in dealing with PCF weaknesses and challenges in operation.
Fifth, continue to effectively implement a digital conversion strategy, expand cooperation to connect with units inside and outside the banking industry to develop a variety of digital banking services that are safe and appropriate for the needs of Co-opbank and PCF’s rural customers,… improve human resource quality to meet the requirements of digital transformation.
Sixth, remodelling, planning, controlling rotation, and providing professional training to officials to fulfil the needs of Co-activities opbank’s in the new time.
Seventh, continue to support the Co-opbank Party Committee’s leadership and comprehensive direction in all aspects of its activity, including its business activities.
Mr. Dao Minh Tu, SBV Deputy Governor, emphasised that the entire Co-opbank system is continuing to implement the plan, successfully completing the business task in 2023, and continuing to operate safely, effectively, sustainably, and worthy of the role of supporting the development of the PCF system, contributing more and more to the banking industry’s development process.
Co-opbank has awarded many rewards to typical branches and individuals in 2022
According to Banking journal
