TCB - AR - EN Ver 08

www.techcombank.com.
vn
Annual Report 2008
VIETNAM TECHNOLOGICAL AND COMMERCIAL JOINT STOCK BANK

70-72 Ba Trieu, Hoan Kiem, Ha Noi Tel: 04. 39446368 Fax: 04. 39446362
VIETNAM TECHNOLOGICAL AND COMMERCIAL JOINT STOCK BANK
FINANCIAL HIGHLIGHTS
Contents
FINANCIAL HIGHLIGHTS MESSAGE FROM CHAIRMAN OF BOARD OF DIRECTORS REPORT BY CHIEF EXECUTIVE OFFICER CORPORATE GOVERNANCE Board of Directors Board of Supervision Board of Management Organizational Chart RETAIL BANKING CORPORATE BANKING INVESTMENT BANKING RISK MANAGEMENT TECHNOLOGY HUMAN RESOURCES CORPORATE AND SOCIAL RESPONSIBILITIES AWARDS AND SOCIAL RECOGNITION FINANCIAL TARGETS FOR 2009 AUDITED FINANCIAL STATEMENTS 2008 Audited financial statements for Bank Audited consolidated financial statements BRANCH NETWORK
1 2-3 4-7 8 8-9 10 11-12 13 16-21 22-27 30-31
2008
Financial Highlights
2006 2005 2004 No. Indicators
2008
59,360 3,642 5,615 13.99 8,382 512 1,600 1,173 25.87 2.28
2007
1 2 3 4 5 6 7 8 9 10
Total assets Share capital Total equity Capital adequacy ratio (%) Total income Provisional reserves Profit before tax Profit after tax ROE (%) ROA (%)
39,542 2,521 3,573 14.30 2,653 144 709 510 22.98 1.99
17,326 1,500 1,762 17.28 1,398 120 356 257 26.76 1.89
10,666 617 1,009 15.72 905 89 286 206 45.19 2.60
7,667 412 515 10.19 494 95 107 76 31.71 1.70
32-37
38-39 40-42 43-45 46-47 50 51 51 68 78
(Unit: Bln VND)
MESSAGE FROM CHAIRMAN OF BOARD OF DIRECTORS

Im proud to say that 2008 was an exciting and successful year for Techcombank as we demonstrated a high level of resilience given the global financial turmoil and local economic recession. Our outstanding results and record dividend payment to shareholders show we have the strong foundation with solid underlying momentum in our business and we are moving in the right direction to realize our aspiration to become a leading joint stock bank in Vietnam.
The banking business delivered a full year after tax profit of VND1,173 billion, representing a 130% increase on the previous year. This performance was attributable to good growth in all business lines, especially securities trading and non-credit services. Our equity capital, total assets, customer deposits and loan book all increased by more than 50%, assisted by an expanded branch network and widened business operations and the improved capabilities of all units. We are now in a strong liquidity position and well capitalized, consistent with our credit ratings which is always in line with the national ratings. We have made a number of senior appointments to strengthen the management of the banks business, including ones with extensive international business experience from our strategic partner, Hong Kong and Shanghai Banking Corporation (HSBC), and some other global banks such as Citibank and JP Morgan Chase Bank NA. We have also significantly improved administration, risk control, and internal audit to ensure a sustainable rate of development commensurate with a multipurpose and modern bank. Techcombanks performance was recognized by the Prime Minister who gave the Bank a certificate of merit for our considerable contribution to the governments efforts to help curb inflation, stabilize the macro-economy, and help maintain social security. The Bank also received many awards in 2008, including the Most Favored Services Company, the Prestigious Stock Trademark, Vietnams Leading Joint Stock Company title, and the Most Outstanding Financial Service Provider title, the Best Trade Financing Bank title by local ministries and organizations; and the Most Active Issuing Bank in Asia award by the International Finance Corporation (IFC). Management Company Limited (Techcombank AMC) with a registered capital of VND70 billion, Techcombank Securities Company Limited (Techcom Securities) with a registered capital of VND300 billion and Techcombank Capital Company Limited (Techcom Capital) with a registered capital of VND40 billion. We are confident that these companies will soon deliver good returns for the whole group. Techcombank came through very well in the uncertain times. We delivered good returns to shareholders, with dividends reaching a record level for the past years. In this year, the Bank sold an additional stake of 5% to our strategic partner, HSBC, which now holds a 20% stake in Techcombank. We also issued new shares to all existing shareholders, bringing the total chartered capital to VND3,642 billion from VND2,521 billion a year earlier. The outlook for the Vietnamese economy for 2009 remains gloomy and there persists some risks from the current instability in global financial markets. However, given the strengthened capacity of the Bank, we are confident to continue to deliver strong returns. We will continue sustainable growth through intensified risk management and more modern services. We will work to enhance our competitive edge to fully tap business opportunities and confirm our leading position in Vietnams banking system. On behalf of the Board of Directors, I would like to express our special gratitude to our customers, partners and shareholders for their confidence in and continued support for the Bank these past years. I also want to recognize, congratulate and thank the management and staff for their contribution to the Banks solid achievements last year when many other banks in Vietnam and all over the world faced considerable difficulties. I hope you all will continue your commitment and hard work for our success in the coming year.
Mr. Ho Hung Anh

Chairman
In addition to banking business, it is our target to develop into a strong financial group. To realize plans, we gradually made new investments in securities and real estate. In the second half of 2008, we established three subsidiaries with a combined capital of VND410 billion, including Techcombank Assets and Liabilities
Ho Hung Anh
Chairman
2 - Annual Report 2008
Annual Report 2008 -
REPORT BY CHIEF EXECUTIVE OFFICER

The year 2008 stunned many people working in the Vietnamese banking industry, including the most experienced ones. Economic changes at home and abroad posed big challenges to managers who were expected to overcome the difficulties and ensure that their firms would develop in a sustainable manner.
The local economy went through, what is probably considered to be a period of unsustainable growth as evidenced by the number of large-scale investment projects, the setting up of many securities companies and listed firms, the growth in the number of stock investors, commercial banks, finance investment entities and real estates traders in early 2008. The outcome of these excesses included a higher inflation rate, a bigger trade deficit, a plummeting stock market, and a crash in the property market. To minimize the impacts of such unfavorable factors, the Government and the State Bank of Vietnam gradually applied a wide range of macro policies, mainly the tightening of monetary policy, to curb the system-wide growth of loans and the volume of payment instruments. Meanwhile, a financial crisis broke out in the US and spread worldwide, leading to the collapse of several giant financial institutions with a devastating impact on the worlds stock markets. Under such circumstances, like other commercial banks, Techcombank faced many business difficulties. However, with strong financials, tight controls and prudent, flexible management, we weathered all the challenges and realized most of our business targets, confirming that we are a strong, safe and established bank and an important link in Vietnams finance and banking chain. The Board of Directors and the Board of Management acted decisively to address the changing environment, focused on protecting our customer base and actively managed our liabilities, in particular the mobilization of deposits in order to ensure the Banks liquidity. In the 2008 fiscal year, total capital mobilized from residents and economic entities was VND41,365 billion, surging 64.54% against late 2007, and representing 69.68% of the Banks total assets. This stable and abundant source of funds and our dynamics in the inter-bank market helped us to become one of few banks that managed to maintain very good liquidity during the most difficult times. Our Tier 1 capital ratio at 13.99% by the end of 2008 was much higher than the standard of 8% applied by most of nations in the world. With strong capital and liquidity, Techcombank was seen as a dependable partner, always able to support customers, even under the toughest market conditions. We continued to provide loans to local companies, prioritized disbursement for the economys key industries, and made available foreign currencies on a regular basis to cover the imports of essential goods. We actively controlled the credit growth rate and limited lending to higher risk areas such as stock investment and property speculation. In addition to gradually centralizing the credit appraisal process, the Bank continuously enhanced risk management capabilities, risk monitoring and management system, thus maintaining credit quality and keeping non-performing loans to only 2.52% of total outstanding loans. Total provisions accounted for 48.72% of the non-performing loans. We also focused on improving asset quality and increasing liquid assets. These measures helped maintain our strong financials and increased our income considerably.
Mr. Nguyen Duc Vinh

CEO
* Including customer deposits, valuable papers and entrusted funds
REPORT BY CHIEF EXECUTIVE OFFICER
CORPORATE GOVERNANCE Board of Directors

(2009-2014)
The year 2008 is also notified by our continued investments in the development and promotion of non-credit services to meet the diversified demands of customers. Thus, the net fee and commission income reached VND483 billion, up 172.91% against 2007.
Thanks to our persistent pursuit of sustainable development targets, timely policies and a team effort by the whole Bank, Techcombank made a profit before tax of VND1,600 billion in 2008, up 125.48% against 2007, and 55% more than the initial target set in early 2008. The profit was the second biggest among those reported by commercial joint stock banks in Vietnam, making Techcombank a success model amid the market crisis of 2008 when many banks had to revise down their targets. The Banks return on assets (ROA) and return on equity (ROE) increased remarkably from 1.99% and 22.98% in 2007 to 2.28% and 25.87% in 2008 respectively. While striving to realize all business targets in 2008, we invested sufficiently in renewing technology, reinforced our management system, centralized business assistance, accelerated delivery of services to the retail sector, and further restructured corporate customers related operations, all to enable us to continue to implement the overall development strategy for 2006-2010, with the goal of becoming Vietnams leading commercial bank. These innovative steps will bring about positive results once the business environment is again favorable. This is the foundation for sustainable growth, and for the professional and modern operation of Techcombank. The year 2009 awaits us with more challenges and difficulties. However, all Techcombank managers and staff are ready to cope with and overcome them, and continue to perfect the Banks operations, risk management capabilities and business policies to maintain sustainable development, and to seize new business opportunities. We firmly believe that under the leadership of the Board of Directors and with the joint effort of all managers and staff, Techcombank will continue to reap great success in 2009, gradually realizing the 2006-2010 plan, and building up the image of a SAFE, EFFECTIVE, CONVENIENT and FRIENDLY bank, contributing to the national socioeconomic development, and bringing about benefits to shareholders, customers and employees. On behalf of the Board of Management
1. Mr. Ho HuNg ANH Chairman

Date of birth: June 8, 1970 Education background: Engineering Foreign language: Russian Mr. Ho Hung Anh has many years of experience in corporate governance at Techcombank as stated below: From 2004 - 2005: Member of the Board of Directors From 2005 - August 2006: Vice Chairman of the Board of Directors From September 2006 - April 2008: First Vice Chairman of the Board of Directors From May 2008 to date: Chairman of the Board of Directors Bachelor in Electronic
3. Mr. Ngo CHI DzuNg Vice Chairman

Date of birth: September 25, 1968 Education background: Ph.D. in Economics, Bachelor in Geological Engineering Foreign languages: Russian, English. Mr. Ngo Chi Dzung has been Vice Chairman of the Board of Directors since August 2006.
4. Mr. NguyeN THIeu QuANg Vice Chairman

Date of birth: August 28, 1959 Education background: Bachelor in Underground Construction Foreign language: Russian Mr. Nguyen Thieu Quang has many years of experience in directing the operations of Techcombank as stated below: From 1999 - 2003: Member of the Board of Directors From 2003 - August 2006: Vice Chairman of the Board of Directors From September 2006 - April 2008: Chairman of the Board of Directors From May 2008 to date: Vice Chairman of the Board of Directors
2. Mr. NguyeN DANg QuANg First Vice Chairman

Date of birth: August 23, 1963 Education background: Ph.D. in Postgraduate in Financial Management Foreign languages: Russian, English Mr. Nguyen Dang Quang has many years of experience at the management level in Techcombank as stated below: From 1995 - 1998: Deputy General Director From 1999 - 2002: Vice Chairman of the Board of Directors From 2006 - April 2008: Advisor to Chairman of the Board of Directors From May 2008 to date: First Vice Chairman of the Board of Directors Technology,
5. Mr. NguyeN CANH SoN Member

Date of birth: April 10, 1967 Education background: Bachelor in Construction Engineering Foreign language: Russian Mr. Nguyen Canh Son was member of the Board of Directors from May 2008 to March 2009 and since then, Vice Chairman of the Board of Directors.
Nguyen Duc Vinh

CEO
(2009-2014)
CORPORATE GOVERNANCE Board of Directors
CORPORATE GOVERNANCE Board of Supervision

(2009-2014)
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6. Mr. SuMIT DuTTA Member

Date of birth: August 7, 1966 Nationality: Indian Education background: Bachelor Administration Foreign languages: Bengali, English of Business
9. Mr. STepHeN ColIN MoSS Member

Date of birth: February 16, 1967 Nationality: British Education background: Bachelor of Economics and Accounting Foreign languages: English, French Mr. Stephen Colin Moss has considerable years of experience at the management level in the field of financial accounting. He is currently HSBCs Manager of Strategy and Development in Asia Pacific region. He became a member of the Board of Directors in April 2009.
1. Mr. Do TuAN ANH Head cum specialist member

Date of birth: November 2, 1973 Education background: Master in Financial Investment Management Foreign language: English Mr. Do Anh Tuan has many years of experience in the field of finance and banking. He became Head of the Board of Supervision in April 2009.
3. MrS. NguyeN THu HIeN Specialist member

Date of birth: October 20, 1965 Education background: Bachelor in Credit Finance Foreign languages: Russian, English Mrs. Nguyen Thu Hien has many years of experience in the supervisory level at Techcombank as stated below: From January 1999 - February 2003: Specialist member of the Board of Supervision From 2005 - August 2006: Member of the Board of Supervision From August 2006 - March 2009: Head of the Board of Supervision From April 2009 to date: Specialist member of the Board of Supervision
Mr. Sumit Dutta has several years of experience at the management level at HSBC. He is now Director of the Retail Banking Division of Techcombank. He became a member of the Board of Directors in April 2009.
7. Mr. TrAN THANH HIeN Member

Date of birth: April 9, 1963 Education background: MBA Foreign language: English Mr. Tran Thanh Hien became a member of the Board of Directors in April 2009.
2. MrS. NguyeN QuyNH ANH Specialist member

Date of birth: February 25, 1971 Education background: Master in Education Science and Postgraduate in corporate governance models Foreign languages: English, Russian Mrs. Nguyen Quynh Anh was member of the Board of Supervision between May 2008 and March 2009. She became a specialist member of the Board of Supervision in April 2009.
10. Mr. NguyeN DuC VINH Member

Date of birth: September 16, 1958 Education background: MBA Foreign languages: English, French Mr. Nguyen Duc Vinh has been Chief Executive Officer of Techcombank for nearly 10 years and became a member of the Board of Directors in April 2009.
4. MrS. Vu THI DzuNg Member

Date of birth: February 15, 1975 Education background: Bachelor of Accounting and Finance, Auditor Foreign language: English Mrs. Vu Thi Dzung has many years of experience in the field of accounting and finance. She became a member of the Board of Supervision in April 2009.
8. Mr. MADHur MAINI Member

Date of birh: August 6, 1973 Nationality: Indian Education background: Bachelor of Economics, Bachelor of Application Science Foreign language: English Mr. Madhur Maini has years of experience managing big US financial groups in Southeast Asia. He became a member of the Board of Directors in April 2009.
5. Mr. NguyeN QuyNH lAM Member

Date of birth: December 30, 1965 Education background: Bachelor in Mining Economics Mr. Nguyen Quynh Lam was a specialist member of the Board of Supervision between May 2008 and March 2009. He became a member of the Board of Supervision in April 2009.
CORPORATE GOVERNANCE Board of Management
10
1. Mr. NguyeN DuC VINH President and Chief Executive Officer

Date of birth: September 16, 1958 Education background: MBA Foreign languages: French, English Mr. Nguyen Duc Vinh was Deputy General Director of Vietnam Airlines before joining Techcombank. When Vietnam Airlines bought a stake of Techcombank, the Board of Directors of Techcombank appointed Mr. Vinh to the position of Deputy General Director. Mr. Vinh was appointed President and Chief Executive Officer of Techcombank in December 2000.
4. Mr. NguyeN THANH loNg executive Vice president

Date of birth: July 19, 1966 Education background: Master in Economic Law Foreign language: English Mr. Nguyen Thanh Long has many years of experience in the fields of finance and banking. Prior to joining Techcombank, Mr. Long held the position of Deputy Chief of the Legal Department at the State Bank of Vietnam. Mr. Long was appointed as Executive Vice President of Techcombank in November 2007.
6. Mr. le XuAN Vu executive Vice president

Date of birth: October 21, 1971 Education background: MBA Foreign language: English Mr. Le Xuan Vu has many years of experience in information technology. He held positions such as Head of the IT Department and Director of the IT Center before being appointed as Executive Vice President cum Director of IT Center in January 2008.
9. Mr. gAry MATTHewS Chief Operating Officer

Date of birth: December 11, 1964 Nationality: British Language: English Mr. Gary Matthews is a Banking Operations professional with over 20 years experience in the management of large, functionally diverse, cross cultural teams gained in multiple roles and varying locations with a proven track record of driving process risk reduction coupled with productivity improvement through functional centralization and process outsourcing. His most recent position is Managing Director Group Head of Wholesale Banking Operations and Technology at DBS BANK Singapore Branch. Mr. Gary was appointed as Chief Operating Officer of Techcombank in July 2009.
2. MrS. NguyeN THI TAM executive Vice president

Date of birth: February 20, 1960 Education background: Bachelor of Economics, MBA Foreign language: English Mrs. Nguyen Thi Tam had many years of experience in banking prior to joining Techcombank in 1994. Mrs. Tam has since held the following positions: Deputy Director of Business Center, Head of Foreign Relations Department, Head of Corporate Banking Department, and Director of Head Offices Business Center. Mrs. Tam was appointed as Executive Vice President in September 2004.
5. Mr. TrAN HoAI pHuoNg executive Vice president

Date of birth: October 20, 1964 Education background: Bachelor of Foreign Trade, postgraduate in International Economics Foreign languages: English, French Mr. Tran Hoai Phuong has many years of experience in the fields of banking and finance. His first position was as financial analyst at Banque Nationale de Paris, Ho Chi Minh City Branch. Later, as Head of Corporate Banking, he was among the key persons who worked out a development strategy for Standard Chartered Bank in Vietnam. He then joined Citibank Vietnam and held the positions of Head of Business Development and Head of Ho Chi Minh City Branch at which time he was in charge of building the SME banking model for the bank in the Vietnamese market. Mr. Phuong also spent a short time with the Empower Securities Co. Ltd. at the management level. Mr. Phuong was appointed as Executive Vice President of Techcombank in September 2008.
7. MrS. luu THI ANH XuAN executive Vice president

Date of birth: April 4, 1970 Education background: MBA Foreign language: English Mrs. Luu Thi Anh Xuan has many years of experience in the fields of finance and banking. Before working at Techcombank, Mrs. Xuan held senior positions at a number of international banks, including Citibank, ABN AMRO Bank and Deutsche Bank. Her previous roles included Director of Payments and Trade Finance and Head of the Business Department. Mrs. Xuan was appointed as Executive Vice President in February 2007.
10. Mr. ANTHoNy guerrIer Chief Financial Controller

Date of birth: March 23, 1970 Education background: Bachelor of Economics, Business Degree in Accounting and Finance Nationality: French Languages: French, English Ms. Anthony Guerrier has many years experience in banking. He worked for ERNST & YOUNG - Toulouse, France as Banking sector Manager for a long period of time prior to joining HSBC in 2000 and held several positions including Head of Management Information & Planning and Manager for Accounting and Regulatory Platforms at HSBC Paris, and Chief Financial Officer at HSBC Bordeaux. Mr. Anthony was seconded to Techcombank and appointed as Chief Financial Controller in July 2009.
3. Mr. pHAM QuANg THANg executive Vice president

Date of birth: March 14, 1973 Education background: Master in International Accounting Foreign language: English Mr. Pham Quang Thang has many years of experience in the fields of finance and banking. Mr. Thang held important positions at Techcombank, including Head of the Accounting Department and Corporate Planning Department and Director of the Treasury Center. Mr. Thang was appointed as Executive Vice President in October 2007.
8. Mr. JoNATHAN CrICHToN Chief Risk Officer

Date of birth: September 28, 1955 Education background: BA (Comb Hons) History and Politics; Diplome I.E.H.E.I Nationality: British Languages: English, French Mr. Jonathan Crichton has almost 30 years working experiences with HSBC system around the world in different activities such as Risk, Personal Financial Service, Internal Audit, Commercial Banking, and Marketing. His most recent position is Head of Credit HSBC France. Mr. Jonathan was seconded to Techcombank and appointed as Chief Risk Officer in June 2009.
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11
Nationality: Indian

11. Mr. SuMIT DuTTA Director, retail Banking 12. Mr. BIMo NoTowIDIgDo Director, Treasury
Date of birth: August 7, 1966 Languages: Bengali, English Nationality: Indonesian
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Date of birth: November 8, 1975
Languages: Indonesian, English Business
Education background: Bachelor of Administration, Jadavpur University, India
Education background: Bachelor of Economics
Mr. Sumit was seconded to Techcombank and appointed as Director of the Retail Banking Division of Techcombank in August 2008.
Mr. Sumit Dutta has several years of experience at the management level of HSBC. He has held several senior positions including Senior Vice President, Head of Consumer and Sales Management and Head of Product Management of HSBC USA, and Head of Global e-Business and Direct Sales, HSBC New Jersey.
Mr. Bimo was appointed as Director of the Treasury Centre in June 2009.
13 14
Mr. Bimo Notowidigdo worked for Citibank in Jakarta, Kuala Lumpur and Singapore for 10 years before he joined Techcombank. His most recent position is Director/Country Treasury in Citibank Jakarta. Foreign language: English
14. MrS. To THuy TrANg Director, Marketing

Date of birth: December 16, 1954
13. Mr. NguyeN VAN THo Director, Human resources
Date of birth: January 13, 1974
Foreign languages: English, Japanese
Education background: Bachelor of Economics
Mrs. Trang was appointed as Marketing Director in April 2009.

SHAREHOLDERS MEETING BOARD OF DIRECTORS
Mrs. To Thuy Trang has about 10 years experience in the field of marketing. Her most recent position was Skincare Product Director of Kao Consumer Product Southeast Asia, Bangkok, Thailand.
EXCO
Education background: BA Degree, Post-graduate Diploma
Mr. Tho was appointed as Human Resources Director in June 2009.
Mr. Nguyen Van Tho has many years of experience in the field of Human Resources. His most recent position before joining Techcombank was Head of Country Human Resources in Citibank Vietnam.
BOARD OF SUPERVISION
BOARD OF DIRECTORS OFFICE 3. STRATEGIC INVESTMENT COMMITTEE
1. AUDIT AND RISK COMMITTEE
2. NOMINATION AND REMUNERATION COMMITTEE
BOARD OF MANAGEMENT 4. IT STEERING COMMITTEE
CREDIT COMMITTEE 5. ASSETS AND LIABILITIES COMMITTEE
6.
Corporate Banking Division
7.
Retail Banking Division
8. Treasury Center
9. Human Resources Division
10. Credit Risk Management Division
11. Market and Operation Risk Management Division
12. IT Center
13. Legal and Compliance Division
14. Operations Division
15. Advisory Division
- Business and Market Analysis Department - Product Management Department
- Deposit Product Management Center
- MM Department - Investment department - Wealth Management Center
- Recruitment Department
- Credit Risk Department
- Technology Risk Department - Salary and Remuneration Department - Global Futures and Commodities Department - Northern and Central Trade and Cash Management Department - Lending Product Management Center - Card Product Center - Southern Trade and Cash Management Department - SME Department - Big Corporate Department - Customer Service Department - MSME Center - Sales and Services Center - Channel Strategy and Distribution Center - Retail Credit Center - Bond Department - FX Department - R&D Department - Southern FX Department - Procedure and Product Risk Department - Southern Appraisal Department - Market Risk Department
- Planning and Project Department - Security Department - Application Department - Personnel Information Management and Policy Department - Training Center
- Legal and Compliance Control Department - Credit Risk Model Department - P. TD H.O - Central Appraisal Department - Internal Audit Department - Debt Collection Department
- Operations Center - Center of Credit Administration - Cash & Vault Department
- Marketing Department - Corporate Planning Department - Accounting Department - Construction Management Department - Project Appraisal Department - H.O M.Banking Department - Southern M. Banking Department - Problem Loans Department - Collateral Management Department HO - Interbank Customer Services Department - Collateral Management Department for Southern Branches - Credit Control Department H.O - Southern Credit Control Department - Operation Risk Department - Asset, Liability Risk Department - Business Continuity Department - MIS Department - Card and E-Banking Department - Infrastructure Telecommunications Department - Central IT Department - Southern IT Department - Administration Department - Quality Management Department - Card Management and Operation Center - MIS Project - FI Department
CORPORATE GOVERNANCE Organizational Chart
Techcom Securities Co., Ltd
Techcom Fund Management Co., Ltd
15. Branches, Sub-branches, TSOs
Techcombank Asset Management Company Ltd
13
Committed to make a
difference
one of Techcombanks strategies is to become the leading retail bank in Vietnam. To achieve this end, we have made substantial improvements in the operating structure to serve our customers in a more professional manner.
15
RETAIL BANKING
Fast, Convenient and Secured Access Channels

The Bank expanded its network to 169 branches and sales outlets in cities and provinces across the country. The Contact Center at the Head Office was upgraded to become a reliable friend, specialized in providing information, consultancy and answers to customers inquiries 24/7 with a capacity of serving almost 50 customers at the same time. In Internet banking, we continued to affirm our leading position among banks in Vietnam with real web-based services of international standards. The F@st I-bank package for individuals and F@st E-bank package for corporate clients allow customers not only to make inquiries about their account balance but also to make transfers to accounts with Techcombank and with other banks. Customers can also make payments for credit cards, deposit on a regular basis, set automatic payment calendars, schedule automatic payments, as well as perform other transactions. One of Techcombanks strategies is to become the leading retail bank in Vietnam. To achieve this end, we have made substantial improvements in the operating structure to serve our customers in a more professional manner. Additionally, a full scope of innovative and customized products and service convenience were introduced to better meet the various financial demands of individual customers. Special attention was given to the diversity and convenience of products and service quality as well as enhanced delivery channels aimed at increasing customer accessibility to these services.
During the fluctuations in the financial market in 2008, Techcombank closely monitored market information as well as customers savings and investment preferences to decide on an appropriate interest rate policy to meet customers needs as well as retain and win new deposit business. Several savings promotion programs were launched such as Lucky Spring Deposit, Super Lucky Savings, and Win Comfortable Prizes from Secured Deposits with total prizes worth approximately VND10 billion. These programs rewarded many lucky customers. Along with efforts to affirm the brand name of a secure and effective Bank, we successfully improved and expanded our customer base, and maintained a stable source of funds for our lending and investment activities. The Bank has won the trust of more and more customers. These efforts have brought about several positive results. Deposits by individuals grew rapidly despite fluctuations, contributing to the high liquidity of the Bank. As of late 2008, total personal customer deposits were VND29,779 billion, up 110.91% against 2007, accounting for 71.99% of the Banks total mobilized funds. This was among the highest growth
retail Banking Model Completely restructured

Retail banking activities are continuously improved in terms of structure through the organization and establishment of specialized centers under the Head Offices Personal Financial Services Division (PFS), which help us to better meet customers demands. The Division currently includes: Deposit Product Management Center Lending Product Management Center Retail Credit Center Card Product Center Wealth Management Center Channel Strategy and Distribution Center Sales and Services Center
We provide another effective access channel to customers via our website with full information on the banks products and services, detailed instructions on using Internet Banking, list of direct sales outlets, ATM locations etc.
Varied saving products, suitable with investment and saving demands of individuals
By studying investment, saving demands and habits of individual customers in different regions nationwide, Techcombank introduced multiple flexible savings and deposit products, offering a wide variety of choices: installment savings, savings with interest paid before maturity/at maturity/on a regular basis, savings with fixed or flexible interest rates etc. We also offer short-term investment products for large amounts, enabling customers to optimize returns on their otherwise idle funds or to proactively make appropriate financial plans for each phase of their lives.
The Bank had more than 517,000 personal accounts with a total outstanding balance of VND1,146 billion as of 31 December 2008. Retail banking currently contributes over 20% to total revenue, and is expected to grow in the near future. A number of branches and sales outlets have been adjusted to focus on serving individual customers.
17
RETAIL BANKING (CONTINUED)
rates of local commercial banks in the year. Moreover, 95.13% was in term deposits, while 22.41% was in foreign currencies that helped the Bank to be more proactive in using funds.
Boosting Consumer loans, Financing personal Investment

Techcombank supported financing to individuals whose capital demands varied from supporting their living and consumption needs to carrying out investment plans and private business activities. However, due to numerous difficulties in the market in 2008, we reduced the growth rate of total outstanding loans for personal customers.
reTAIl ouTSTANDINg loANS (BlN VND)
ToTAl ouTSTANDINg HoMe loANS AND CoNSuMer loANS (BlN VND)

4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 1,506 4,200 3,521 3,386
perSoNAl CuSToMer DepoSITS (BlN VND)

29,779
30,000 25,000 2,000 1,500 1,000 500 0 3,892 2,129 14,119
We separated the card operation from the business system by establishing the Card Management and Operations Center in April 2008. This structural adjustment has helped improve service quality and enabled the Bank to be well prepared to receive a large number of customers in the coming years. Improvements in the quality of our card services live up to the goal fast issuance, stable system, flexible and prompt response to customers requests. This increased customer convenience in using credit cards and led to Techcombank being highly appreciated by all partners.
8,000 6,000 4,000
7,480
7,954
Best Visa Card Issuer

Home loans
2007
Consumer loans
2008
6,684
2,817 1,560 940
Card and e-payment Services Keep growing

In 2005, Techcombank was known as the first bank in Vietnam to successfully connect its card system with Vietcombank to form the first card alliance in Vietnam. Last year, Techcombank was also the first bank to connect our card system with SmartLink and Banknet the two largest card alliances in Vietnam, and with our strategic partner HSBC Vietnam. Thanks to those connections, Techcombank cardholders can use their cards at over 7,000 ATMs and 14,000 POS nationwide, including 360 ATMs and 2,000 POS owned by the Bank. The year 2008 also marked membership and full connection of Techcombank with the Visa International group, which allows Techcombank Visa cardholders to use their cards at more than one million ATMs and millions of Visa POS worldwide. Techcombank has also joined and connected with MasterCard, and is now preparing for the issue of Techcombank MasterCard in the near future.
2004
2005
2006
2007
2008
2,000 0
Techcombank was recognized as the best Visa card issuer in Vietnam in 2008 with a total number of 100,000 Visa debit and credit cards out of 300,000 cards issued by the bank during the year. By end of 2008, the total number of all types of cards issued was 601,884, of which 458,428 were domestic debit cards, and 143,416 were Visa debit and credit cards. The Bank is now one of the three biggest international card issuing banks in Vietnam with a market share of 14%. With our plan to issue MasterCard cards in 2009, Techcombank will gain a remarkable expansion in card services.
BreAKDowN oF perSoNAl CuSToMer DepoSITS

4.87%
2004
2005
2006
2007
2008
Our strategic products Home loans and Consumer loans - continued to increase, while other products such as overdrafts, gold trading loans, stock trading loans, overseas study loans, and valuable paper mortgage loans produced good results. With overdraft loans, customers can take an unsecured credit equal to 10 months salary.
95.13%
Demand deposits
Term deposits
Total consumer lending as of late 2008 was VND3,386 billion, an increase of 124.83% against 2007, while home loans remained high at VND3,521 billion. On average, each home loan amounted to VND500 million.
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RETAIL BANKING (CONTINUED)
NuMBer oF ISSueD CArDS By 31 DeC 2008

300
pAyMeNT TurNoVer VIA poS (VND BlN)

272 217
137,303
250 200 150 100 50 0
6,113
458,428
Techcombank F@stAcess domestic debit cards
Techcombank Visa International debit cards
Techcombank Visa International credit cards
2007
2008
Strong Growth in Card Payment and E-payment

The Bank launched a series of promotional programs to encourage and get customers into the habit of using modern card products, such as free-ofcharge card issuance programs, tickets to Morning Star Singing Competition 2008, Discovering Beijing, Enjoying Olympic 2008, Saving points for shopping, accumulating points for traveling, and customer care programs in cooperation with Nokia and MobiFone. The number of transactions at ATMs and POS, therefore, surged, with the total withdrawn and transferred amount through ATMs in 2008 reaching VND7,744 billion, up 146.86% against 2007. In the context of the economic crisis in 2008 and the resultant drop in consumer spending, the transaction value via POS still increased by 25.35% to VND272 billion.
The Bank also introduced and improved electronic payment channels such as Internet Banking (F@st i-bank), and F@st Mobipay. By the end of 2008, 8,286 customers had registered for F@st i-bank, resulting in a surge in the number of transactions with approximately VND190 billion per month late last year. Although it was a new initiative, the mobile phone payment channel F@st Mobipay was widely accepted by customers.
is a considerable challenge for many investors, thus in 2008, Techcombank established the Wealth Management Center with the aim to help customers invest professionally and effectively and focus on other financial goals at the same time. This marked an important step in completing our organization and services to realize the strategy of becoming a leading retail bank, providing a wide range of highquality products and services to retail customers. Techcombank wealth management experts will provide customers with important and accurate market information on the economy, finance, securities, deposit and lending interest rates, etc. as well as analysis on investment trends, currency forecasts, domestic and world gold prices. Based on the analysis of customers financial status and needs, we help them develop and manage their investment portfolio professionally and effectively. With individual
solutions designed for each, customers are able to both minimize risks and increase their asset. In addition to the aforementioned services, Techcombank has introduced Bancassurance products, including Education Savings and Bao Gia Savings. These are installment savings products with competitive interest rates and tenors, helping customers save funds for future plans. Customers can buy life insurance with high compensation for each product.
wealth Management Services Deployed

Wealth management services have long been popular in developed countries. However, the acceptance in Vietnam is generally slower, partially due to the culture of Vietnamese people to want to decide their spending and investments on their own. In order to invest successfully, investors have to spend time and money enriching their knowledge, gaining experience, etc. Realizing it
21
CORPORATE BANKING
By the end of 2008, Techcombank had more than 26,600 corporate customers who accounted for around 70% of the Banks outstanding loans, and contributed a large proportion to total revenues.
STruCTure oF CorporATe CuSToMerS
were VND11,312 billion, up 12.48% against late 2007. Of this total, term deposits made up 54.59%, and deposits in foreign currencies accounted for 16.76%.
DepoSITS By eCoNoMIC INSTITuTIoNS (BlN VND)

12,000
11,312 10,057
31%
10,000 8,000
1% 8% 60%
6,000 4,000 2,000 0 2,096 2,382
2,882
Big Corporations
MME
SME
MSME
2004
2005
2006
2007
2008
Techcombank attaches special attention to traditional products and services targeting enterprises. Having deep understanding of the specific operations and demands of certain groups of businesses, the Bank offers specialized products and services for different market segments, such as large corporations, medium-sized enterprises (MMEs), small and mediumsized enterprises (SMEs), micro, small and medium enterprises (MSMEs) and trading households. In 2008, Techcombank continued to make radical changes in the organizational structures of the Head Office, branches and sales outlets (TSOs) in order to serve business customers in a more professional manner. Techcombank conducted market research for each segment in order to develop and offer appropriate, competitive and flexible financial solutions and products. Commercial banking services for SMEs continued to
be the Banks core business. In 2008, Techcombank implemented a business strategy targeting SMEs in line with the consultancy of the IFC, a part of the World Bank (WB). This strategy is consistent with responding to the needs of current corporate customers and to the Banks vision for 2010: to become a leading bank in terms of diversity, reliability, quality and efficiency. Acknowledging our efficient operations and reputation, many large multilateral financial institutions such as World Bank, the Asian Development Bank (ADB) and the Swiss State Secretariat for Economic Affairs (SECO) has chosen Techcombank as a disbursement bank for their projects which help SMEs gain access to soft loans to renew technology and buy environmentally friendly and energy-saving equipment.
effective Financial Management Solutions and Investment Channel

Utilizing Techcombanks account services, customers can manage their corporate finances simply and conveniently. For large corporate customers, the Banks cash management solutions allow them to closely monitor cash flows so they can optimize business results. Early last year, the Bank launched a service for overnight investment using the current accounts called F@st Invest which offers higher interest rates, thereby helping enterprises utilize their idle capital in the most efficient manner. Thanks to the service, Techcombanks deposit mobilization increased during the liquidity squeeze in the financial markets. The total deposits by economic institutions as of late 2008
Timely, Flexible Credit provision

Keeping in mind that enterprises are not only customers, but also business partners, Techcombank always stands side by side with enterprises, especially SMEs and import-export enterprises affected by shrunken markets, higher dollar prices and tightened credits. With strong financial health and the right business strategies, Techcombank continued to disburse loans and advances, ensuring liquidity for economic contracts of enterprises, thus becoming an indispensible partner in the financing of companies in 2008, a year full of difficulties. Techcombank set aside VND3,000 billion for funding enterprises operating in key economic sectors last year, especially for purchasing and processing rice, coffee, cashew nuts and pepper to boost exports.
23
CORPORATE BANKING (CONTINUED)
Loans were also offered with lower interest rates to enterprises which import materials and equipment for production and business expansion. This policy was aimed at creating favorable conditions for enterprises to overcome their financial difficulties in order to develop and expand business, contributing to the countrys economic growth. Total outstanding loans and advances to economic entities reached VND18,388 billion as of 31 December 2008, up 47.36% against 2007. Along with promoting credit activities in 2008, Techcombank centralized credit appraisal process, approval, credit support and customer care services. These measures have helped the Bank to better monitor loans, and kept non-performing loans at relatively low levels amid the economic crisis which saw many enterprises racking up losses or even going bankrupt.
Lending to Support Business Operations

For SMEs, Techcombank focuses on financial services that help companies optimize their cash flow thus sharpening their competitive edge. The Banks flexibility in responding to customers borrowing needs means that loans are timely provided to enterprises so that they can handle emergencies or unexpected cash shortages via short-term working capital financing or overdraft financing. For large corporate customers, the Bank prioritizes the availability of funds for separate projects. For MSMEs and household businesses in 2008, Techcombank took the lead in providing this important sector with standardized financial packages such as Micro-banking financing and Supplier financing. These packages have clear term sheets, quick lending procedures, and flexible collateral, suitable to trading households and MSMEs operating in various fields.
ouTSTANDINg loANS To eCoNoMIC INSTITuTIoNS By SeCTor
7.5% 3.5%
International Payment and Trade Finance

Techcombank took the initiative in launching new products and services such as export financing with preferential interest rates and export bills collection to create more convenience and added value services to customers and to improve the Banks operation efficiency. With a wide network of correspondent banks in nearly 100 countries in the world, we continued to confirm our position as the best bank in terms of international payments and trade finance among joint stock banks in Vietnam. The total international payment volume increased 23.81% in 2008 to USD3.37 billion, contributing VND176 billion to the Banks net profits. Techcombank was also the first bank in Vietnam for which the IFC raised its guarantee limit up to USD50 million in the framework of the Global Trade Finance Program (GTFP) for issuing banks.
ouTSTANDINg loANS To eCoNoMIC INSTITuTIoNS (BIllIoN VND)

20,000 18,388 15,000 12,478 10,000 5,993 5,000 2,525 3,819
INTerNATIoNAl pAyMeNT VoluMe (MIllIoN uSD)
2.2%
3,500 3,000 2,722
3,370
17.3%
2,500 2,000 1,500 1,342 1,014 520
17.6%
1,000 500 0
2004
2005
2006
2007
2008 Agriculture & Forestry Construction Hotel Industry
51.8% Trading Manufacturing & Processing Logistics, Transportation & Communication Others
2004
2005
2006
2007
2008
25
CORPORATE BANKING (CONTINUED)
Guarantee Business
The Banks local guarantee business continued to expand, making a considerable contribution to fee income. Total guarantee fees reached almost VND57 billion, representing around 10% of the Banks total fee income. Techcombanks guarantees are accepted by many foreign and domestic banks and enterprises because of the Banks strong financials and well established reputation in the market. Currently, we provide the following types of guarantees: Bid bond guarantees Performance guarantees Advance payment guarantees Warranty guarantees Payment guarantees Loan guarantees Counter guarantees Other guarantees
Techcombank has continuously invested in technology to acquire the most modern electronic trading platforms and information systems from such providers as Reuters and Bloomberg. We have also completed internal processes with close linkages between the Front Office, Back Office and Middle Office, and frequently standardized risk management activities. We are currently the first joint stock bank in Vietnam that provides derivative services to help enterprises manage risks relating to changes in prices in general and forex rates in particular. Using electronic transaction systems linked to international trading floors such as LIFFE, NYBOT, NYMEX, CME and TOCOM, we offer price fluctuation protection services to producers and processors of such agricultural products as coffee, cocoa, sugar, rice, soy bean, wheat and corn, as well as importers and manufacturers of ferrous metals, copper, lead, aluminum, zinc, tin and nickel. In addition to offering basic foreign exchange rate risk management services such as Forward, Swap, and Option, Techcombank has combined credit operation and forex operation to provide a comprehensive solution to help enterprises access soft loans and benefit from common forex rate guarantee through an export assistance program with total funding of VND3,000 billion. In preparation for 2009, predicted to be a year full of changes, challenges as well as opportunities in money and foreign exchange markets, Techcombank has concentrated on developing products and raising service quality, mainly targeting corporate customers. Together with refining its structure and process, Techcombank will continue to actively trade in the interbank market to confirm its position as a leading joint stock bank in treasury and forex trading.
Foreign Exchange Trade and Commodities Futures

In October 2008, Techcombank received the Most Active Import Financing Bank in East Asia award from the IFC. In February 2009, Techcombank was awarded the 2008 Outstanding Trade and Service Enterprise title, and was recognized as the Best Trade Financing Bank in Vietnam in 2008. Along with strengthening international payment channels to boost import-export activities of enterprises, Techcombank actively trades on the interbank forex market to ensure the availability of foreign currency to better serve customers. Through forward contracts our customers are protected from fluctuations in forex rates. The total forex trading volume in 2008 was up 132.70% to VND198 trillion (USD12.37 billion).
FX TrADINg VoluMe (BlN VND)
120,000 100,000
150
INTerNATIoNAl pAyMeNT INCoMe (BlN VND)

200
176
95,359
102,589
80,000
100
86 54
60,000 40,000 20,000 0 Buying volume 2007 39,934
45,131
50
40 25
2004
2005
2006
2007
2008
Selling volume 2008
27
Adding value to
relationship
Techcombank is one of the leading urban banks in terms of credibility, quality and efficiency.
29
INVESTMENT BANKING
Techcombank is promoting modern investment banking services, which are now considered one of three main pillars for increasing revenue. The year 2008 saw sharp fluctuations in interbank interest rates, which posed challenges to treasury activities and the liquidity position of commercial banks. In this environment, we confirmed our financial strength and achieved certain breakthroughs. Total funds mobilized from economic entities and individuals increased considerably. The loans to customer deposits ratio were always at safe levels, standing at 76% by the end of June 2008 and 66% by the end of 2008. Having a strong and stable liquidity position, the Bank has not only ensured effective performance but also made positive contributions to the operation of the domestic financial market. Our timely and substantial
investments in government bonds reinforced our liquidity and generated profits when interest rates went down. When interest rates were highly volatile last year, this investment channel proved really efficient. As a result, bond trading made total net revenues of VND931 billion in 2008, compared with VND82 billion in 2007. Techcombank also gradually engaged in new investment operations, including investments in securities and real estate. In the second half of 2008, three subsidiaries were established with combined capital of VND410 billion, including: Techcombank Assets and Liabilities Management Company Limited (Techcombank AMC) with a registered capital of VND70 billion, established in July 2008.
Techcombank Securities Company Limited (Techcom Securities) with a registered capital of VND300 billion, established in October 2008. Techcombank Capital Company Limited (Techcom Capital) with a registered capital of VND40 billion, established in November 2008. Techcombank AMC initiated activities to serve the Bank and our customers such as logistics, collateral management, assets management and safe custody services to enhance the Banks asset quality and service level. Techcom Securities and Techcom Capital are still in the initial development stages of building up systems and operations and should be ready to meet market demands and tap business opportunities in 2009.
31
RISK MANAGEMENT
rISK goVerNANCe
BoArD oF DIreCTorS
Audit and risk Committee Asset and liability Committee
BoArD oF MANAgeMeNT
Credit risk Management Division
operational and Market risk Management Division
Credit risk
Credit Appraisal/Approval
operational risk
Credit policy
Collateral evaluation and Management
Asset and liability Management Market risk (MM, FX, securities, commodities)
problem loan Management
Techcombank is fully aware that banking business is closely associated with risk, and risk management capability is fundamental to success. This factor is even more important in the face of the current crisis of the world economy, of the increasingly fierce competition in the business environment of Vietnam, as well as the mushrooming of sophisticated financial products and services which may expose a financial institution to substantial risks. Our Board of Directors and the Board of Management have thus decided to apply international criteria to identify, assume and manage risks before they become problems. Our risk management is based on hi-tech platforms which facilitate application, development and then integration of technologybased solutions, and on qualified personnel who can master such advanced management tools. This system, which is completely centralized and separate
from the business side of the Bank, is now working effectively to help the Board of Management balance risk and reward, resulting in the soundness and efficiency of the Banks total business activities. Board of Directors: approves resolutions of the Audit and Risk Committee and the Asset and Liability Committee; supervises the design of procedures and policies which manage the overall risk of the Bank as a whole. Board of Management: reports to the Board of Directors on the efficiency of risk management and compliance with respect to preset limits. Credit risk Management Division and operational and Market risk Management Division: proactively run policies with respect to credit, market and operational risks.
Credit risk
Credit risk is substantially associated with loans granted to customers. Credit risk materializes in cases where a customer does not repay in full the principal and/or interest of the loan granted or is overdue on principal and/or interest. Techcombank has developed a comprehensive risk management framework to identify and monitor credit risks. We have advanced scoring and rating systems with the Basel approach to assess the creditworthiness of clients and measure all possible risks. Based on those systems, the Credit Risk Management Division will work out clear credit policies with suitable limits and management plans for each segment and each client.
33
RISK MANAGEMENT (CONTINUED)
Currently, the Credit Risk Management Division is organized to focus on the following tasks: Building and refining internal scoring systems for each category of customers such as Individuals, Big Corporations, SMEs and Micro SMEs. Monitoring loan portfolio: conducting analysis and consulting on the creditworthiness of sectors/ industries; setting limits for each sector/industry, and making reports on loan portfolio. Developing tools and reports to monitor and manage Key Risk Indicators (KRIs). Doing regular checks and refining the quality of the credit management system. Developing other Credit Management Models such as LGD, EAD, Pricing Models/Facilities Profitability.
Building up and upgrading criteria to select counterparties and determine limit for each counterparty. Monitoring P&L of FX transactions per currency and per type of transaction (spot, forward, swap). To deal with risks associated with MM transactions, the Market Risk Department of Techcombank currently applies the following measures:
To deal with risks associated with commodities trading, Techcombank relies on: Building up and deploying specific risk measuring models and working out monitoring procedures for each kind of commodity and each market. Building up a customer scoring system based on the scoring system for business clients; and adjusting limits for each client regularly. Applying clear criteria to select counterparties and determine limits for each counterparty. Making deep dives into market fluctuations and giving out forecasts and warning messages if necessary.
Market risk
Market risk is the potential negative change in value of the Banks positions as a result of changes in market prices (interest rates, margins, currency, equity and commodity prices). In 2003, Techcombank was the first bank in Vietnam to successfully deploy a market risk monitoring system, which has been continually extended and improved since then. In 2008, the system was upgraded with the most advanced techniques and properly customised, focusing on detecting and minimizing risks relating to the trading of FX, MM, securities, commodities To deal with risks associated with FX transactions, in 2008, Techcombank already completed the following steps: Setting limits for all currencies. Developing and applying KPIs for dealers that, in turn, help set limits for each dealer.
Building a model for identifying and measuring interest risk and liquidity risk. Involving directly in monitoring the compliance of policies, procedures, decisions in the daily operations of the Treasury Center; with the right to stop any transaction if non-compliance is detected. Making daily reports and special reports on extraordinary cases to the Board of Management and the relevant units. To deal with risk associated with investment securities, Techcombank focuses on the following tasks:
Asset and liability risk

The structure of the balance sheet is made of the weight of each asset type, asset diversification which represents one of the key factors affecting P&L of the Bank. The tendency to maximize profit by adjusting structure of the balance sheet leads to the loss of control of mismatches regarding term, interest, currency which, in turn, translate into illiquidity of the Bank. The temptation to increase fee and commission income by adding up the number and complexity of off-balance sheet items poses potential risks on the P&L of the bank if those risks are not properly managed.
Building up a scoring system for investment securities, to identify an optimal investment portfolio. Building up models for monitoring and measuring the P&L of portfolio. Setting limits for sectors/industries applicable to investment portfolio based on issuers, industry, main business, geography...). Marking the portfolio to market regularly. Building up a stress test model of business environment that affects the investment portfolio. Monitoring portfolio investment activities. Reporting to the Board of Management on investment activities and proposing measures to manage risks efficiently.
35
RISK MANAGEMENT (CONTINUED)
To deal with risks associated with the balance sheet, Techcombank emphasizes: Controlling size, structure, P&L of assets and liabilities. Identifying and analyzing risks in assets and liabilities. Setting optimal ratio and limit of each component of the balance sheet. Running stress tests. Maintaining sound liquidity. Checking policy compliance regularly. Taking measures to better manage risks threatening the Bank and to maximize profit. To deal with risks associated with policy changes, Techcombank focuses on: Building up criteria for strengthening relationship with partners; improving analysis of competitors. Regularly updating models to determine limits for customers which help improve accuracy and efficiency. Building models to set the total limit and assign the sub-limit to each field: money market, foreign exchange, fixed income, L/Cs, and commodities. Building up various scoring criteria to cover the overall business operation and potential risks of counterparties. Diversifying sources of information used and approaches to counterparty. Rating institutions which are the Banks partners; gathering, recording and reporting on rating results.
long terms; thus sending warning messages over potential risks to concerned parties; proposing measures to minimize risks and optimize our returns. The Bank has already set up specialized units to gather such information and develop models to analyze impacts of political and economic events on business performance.
Risks associated with procedures, products: Evaluating risks, checking procedures, products. Building KRIs in each function of operation to control risk. Training and supporting business units to produce their own evaluation of operational risk. Building a network of coordinators at every business function to gather information on loss and then evaluate risks. Training to upgrade skill levels and raise awareness of over operational risks to protect the Bank from operational risk.
operational risk
Operational risk is the risk of losses caused through inadequate or defective systems and processes, human or technical failures, or external events such as system breakdown or fire damage. Operational risk is a conventional risk in the banking business. However, measures to control it are reasonably new, even to some major banks. Many Vietnamese banks have recently incurred considerable losses created by operational risks. At Techcombank, all business lines / functions must control operational risk in their own operations. In addition, a specially designated department in the Market and Operational Risk Management Division performs deep dives on: Risks associated with technology: Controlling IT systems (IT, card systems), ensuring their readiness. Building and applying evaluation on technologyassociated risks. Monitoring IT projects. Appraising and involving in implementation of IT projects. Delivering warning messages on IT investments. Training staff on information security.
We have spent considerable time and resources on building Business Continuity Plan (BCP) for the Bank as a whole as well as for separate business units in case of natural disasters. This important initiative included training staff and staging rehearsals to raise awareness of protective measures in the event of such disasters occurring.
We attach great importance to gathering and analysing information, news, market data, and forecasts which help us to formulate our own ideas on market fluctuations in the short, medium and
37
TECHNOLOGY
Supporting Liquidity and Payment System

After the successful roll-out of internet banking services for individuals (F@st I-Bank) in 2007, Techcombank introduced a similar service for SMEs called F@st E-Bank last year. It is the sole full-service internet banking offered by a Vietnamese bank to clients, which includes account inquiries, and fund transfer to other accounts with Techcombank or with other banks using double passwords and onetime password. The F@st MobiPay is a useful tool which allows customers to make account inquiries or payment within Techcombank via mobile phones. In 2008, this service was upgraded using OTAC (One Time Authentication Certification) and OTP (One Time PIN), which requires customers to use a new PIN for a certain period of time. system (developed by Temenos Holdings) was first applied in 2002 and upgraded annually. Techcombank is using the latest version of T24R07 (2008). In 2008, based on the core banking system, the Bank successfully deployed the multi-book system which enables network expansion faster and more easily, serving the retail banking strategies, while meeting the reporting requirements of every single business unit. This corebanking system also enables Techcombank to expand connectivity to other management support programs such as the payment system, credit management system and the risk management supporting programs. In the first half of 2008, Vietnams banking system faced liquidity problems and higher interest rates with every bank implementing aggressive deposit policies as well as flexible deposit rates to maintain stable funding. Thanks to some of the special functions of the core banking system, F@st-Invest is a special deposit product for business clients. This deposit product shows how interest rates vary with changes in the accounts outstanding balance.
Supporting risk Management

In 2008, Techcombank ran some systems to increase productivity and minimize operational risk. It applied Processing Workflow (PW) in Personal Financial Services to centralize individual customer scoring and credit approval at the Retail Credit Center. The Bank also applied the new IT system dealing with organizational restructure towards centralization such as Payment Center, and Credit Approval Center. The Bank focused on rolling out the Enterprise Content Management (ECM-Filenet) applicable to the main procedures throughout centers, branches and subbranches, enhancing MIS, and piloting Business Intelligence and Data Warehouse, which upgrades management information requirements and thus facilitates the decision-making process.
One of Techcombanks strengths is technology. Substantial investments were made in technology to enable the Bank to implement best practices and deliver to a growing customer base modern products and services, thereby fostering profitable overall growth. In 2008, the Bank focused on strengthening its IT system, currently organized to serve three main requirements: developing the corebanking system, developing business support and control systems, and supporting risk management. The target is to make the IT Center a professional unit which applies advanced management models up to international standards and is totally oriented to serving customers.
Supporting Card Payment and ATM System

In 2008, the Bank successfully connected to the Visa credit card system; to the card payment system of HSBC Vietnam, Banknet, and Paynet; ran co-brand cards with Vietnam Airlines; ran ADM; and applied Fraud Analyzer dealing with fake card transactions. These supporting functions helped Techcombank become the Bank of Best Card Payment system and Best Visa issuer in Vietnam.
Developing Corebanking System

The Banks corebanking system is continuously upgraded to match world banking standards and to ensure that the overall system always operates online on a real-time basis, with data synchronization at any transaction office of the Bank. The core banking
Developing Business Support and Control System

The advanced corebanking system, allows the integration of subsidiary systems such as the payment and liquidity system, the card and ATM processing system, and the operational support system are integrated.
39
HUMAN RESOURCES
BreAKDowN oF STAFF
15% 3%
Treasuring Talents
Talents are considered to be a treasure of the nation in general and of the banking industry in particular. Thus, Techcombank attaches great importance to offering preferential treatment to staff with the viewpoint of minimizing personal worries so that they can concentrate on improving the quality and efficiency in their work. In 2008, Techcombank sought advice from William Mercer, whose representative in Vietnam is Talent Net, to adjust salary scales, raising salary in the whole system in July 2008 and continuing to improve it in 2009. This has made an important contribution to enhancing the Banks human resource competitiveness, attracting many highly skilled and competent staff. The total payroll increased 122.5% to VND405 billion in 2008. The per capita average income reached VND8 million per month, up 54.5% against 2007. The total bonus for the most outstanding staff was VND20 billion, accounting for 5% of the total payroll in 2008. In the same year, Techcombank implemented the Share Bonus Program for employees who have contributed to the Banks development to encourage their loyalty. We have paid attention to not only financial factors, but also to the healthcare of our staff and their family members, so that they keep their mind on their work. In addition to ordinary health insurance, the Bank has offered accident insurance and Techcombank Care health insurance provided by Bao Minh Insurance Co. Ltd. to all staff and family members of medium and high-ranking managers since January 2008, following recommendations from AON Consulting Company. The total expense for this program is VND4.5 billion. In early 2009, this insurance program was expanded to lower ranking managers so that their family members can benefit from lower cost, and higher claim amounts from many prestigious healthcare establishments. Techcombank is the first bank to offer this policy to all employees and their family members, easing their worries about accidents or illnesses, and setting their mind at rest when using best healthcare services.
82%
University graduates & postgraduates College and short-term training graduates High school graduates
Human resources are the firm foundation for every enterprise to develop rapidly and in a sustainable manner. For Techcombank, every staff member is seen not only as an asset but also as the most precious source of capital because they are the ones who implement business strategies and maintain the relationship with customers, ensuring the Banks success in recent years as well as in the future. The Bank, during 15 years of operation, has always attached great importance to developing high-quality human resources, and creating a professional working environment with equitable policies to encourage the staff to be more enterprising, to the benefit of both customers and the Bank. Techcombank has also paid special attention to offering preferential treatment, both in the material and spiritual forms, to staff, including due attention to their families. Techcombank was able to attract and retain quality staff in a highly competitive market for human resources and even though Techcombank remuneration levels were not the highest among banks, our staff have still worked wholeheartedly for the development of the Bank.
In addition to trademarks of banking services and products, Techcombank has created a trademark of human resources, the trademark of a working environment where staff have strong attachment to, and receive encouragement and support to enrich their knowledge, enhance capability, and contribute to the success of the Bank.
recruiting and Treating Talents

In 2008, when many domestic and foreign banks had to trim their workforce due to the impact of the economic recession, Techcombank emerged as a bright point for creating jobs and attracting talent. As of late 2008, the staff number increased 44.21% against the previous year (from 2,929 to 4,224), in which the number of managerial posts rose 36.86%, and staff having at least two years of experience rose 58.45%. The percentage of staff having graduate and post-graduate degrees increased from 78% to 82%.
Taking the developing Vietnamese banking industry into consideration, Techcombank pays special attention to recruiting talented people who are well-trained and hold middle or high-ranking managerial posts in international institutions, as well as assigning the right work and positions to the right people. Therefore, most of the staff are really energetic and enterprising. Staff often put forth effective customer development and business solutions.
41
HUMAN RESOURCES (CONTINUED)
CORPORATE AND SOCIAL RESPONSIBILITIES
This is one of principal factors of the overall personnel and welfare policy adopted by the Bank. The series of social and cultural activities held on festive days, including the Banks founding anniversary (Techcombanks Day), summer and winter vacations (Techcombank Summer/Winter Holiday), and Christmas, have reinforced bonds and solidarity among all members of the great family of Techcombank.
Building a Secured Future

Along with recruiting experienced, well-trained, proactive and creative employees, Techcombank focuses on training promising employees for a secure future. The Bank has set a prime target of fostering human resources in a sustainable manner, turning out highly skilled and professional staff to offer better services to customers.
Techcombank has actively organized in-house training courses designed for new employees to enrich their knowledge and skills to better understand market demands and development trends to launch new products and services. We have also coordinated closely with third-party organizations to provide training for employees, and send them to good international and domestic courses in different areas such as Quality Management and Strategy Management. Notably, in early 2008, Techcombank signed training contracts with famous universities in Hanoi and Ho Chi Minh City, and requested some training centers to develop appropriate training programs, most of which are designated for candidates for managerial positions in the near future. The total number of training courses increased 46.39% (from 291 to 426) in late 2008, and that of staff undergoing the courses surged 58.22% (from 7,351 to 11,631). The training costs rose 59% to VND6.74 billion.
Through 15 years of development, Techcombank has always determined that profit is not the only target to be realized at any cost, and that resources should be earmarked for the development of for the community trademark, contributing to societys sustainable development. We firmly believe that a business is successful only when our interests are in harmony with those of the society and the community.
areas, and small and medium-sized enterprises to expand production, and promoting clean and energysaving technologies. We are currently taking part in the following projects: 1. The SME Development Fund (SMEDF) project sponsored by the European Commission that supports SMEs to develop production and business. The Rural Development Financing project phase 2 (RDF2) sponsored by the World Bank for individuals and private enterprises in rural areas. The SME Finance Project phase 2 (SMEFP2) sponsored by the Japan Bank for International Cooperation (JBIC) through the State Bank of Vietnam (SBV). The Housing Financing Facility (HFF) sponsored by the Asian Development Bank for low-income and poor households in cities to improve living conditions.
Business for a Better Community

In its daily business, the Bank commits not to let business and trading pressure affect good regulations, standards and practices that have been chosen to be the foundation of our corporate culture. Thus, Techcombank does not cooperate with individual and corporate customers as well as partners whose activities adversely affect the natural or social environment. In addition, the Bank takes the lead in disbursing capital for projects funded by foreign governments and NGOs which are designated for poverty eradication and generally improving life of poor people, supporting private enterprises in rural
2.
3.
4.
43
CORPORATE AND SOCIAL RESPONSIBILITIES (CONTINUED)
5.
The Commercial Energy Efficiency Program (CEEP) sponsored by the World Bank to help SMEs purchase or upgrade equipment in order to save energy and costs. The Promotion of Energy Conservation in SMEs (PECSME) sponsored by the Global Environment Facility of the World Bank to provide guarantees for SMEs operating in specific fields to invest in clean and energy-saving production technologies. The Green Credit Trust Fund established on the initiative of the Swiss State Secretariat for Economic Affairs (SECO) to provide financial assistance and credit guarantees for SMEs to replace old technologies with modern and environmentally-friendly ones. The project to cooperate and financially assist food processing and packaging enterprises which participate in the Hanoi Business Incubation (HBI) program.
2.
Traditional 30/4 olympic contest in the Southern region Techcombank took part in sponsoring the traditional 30/4 Olympic contest in the Southern region from April 3-5, 2008 at Le Hong Phong High School. This activity was aimed at promoting young talents of Vietnam.
7.
2008 Terry Fox run A large number of Techcombank employees participated in the 9th Terry Fox Run program to support research programs for cancer treatment in Vietnam in particular and in the world in general.
6.
8.
Charity activities to help storm victims On August 16, 2008, Techcombank donated VND50 million to the Golden Heart Fund of Vietnam Television in order to help people affected by Kammuri, the fourth storm striking Vietnam in the year. Besides, over 3,700 Techcombank employees donated cash, clothes and other goods to people in the affected provinces.
3.
Childrens Day - June 1 On the occasion of Childrens Day on June 1, 2008, Techcombank and the Social Work Center under the Ho Chi Minh Communist Youth League of Ho Chi Minh City co-organized a social program entitled For Suburban Friends for over 200 disadvantaged children in Hiep Phu Ward, District 9, Ho Chi Minh City.
7.
8.
9.
4.
Cua lo Beach Cleansing Campaign In July 2008, all staff of Techcombank participated in a campaign to cleanse Cua Lo Beach.
Awarding scholarships to poor pupils in Can Tho City At the ceremony of new school year, Techcombank Can Tho gave 25 scholarships totaling VND25 million to studious poor pupils of 5 junior high schools and primary schools in inner Can Tho City. The schools include Luong The Vinh, Mac Dinh Chi, Thoi Binh 1, An Hoa 2, and Tran Quoc Toan.
Social and Charitable Activities

In 2008, the Bank continued to sponsor a large number of social and charitable activities to the tune of VND9.6 billion. Some of these events are: 1. Hanoi Tet: past and present program of Hanoi Television magazine On the occasion of 2008 Lunar New Year Festival, Techcombank and Hanoi Television magazine co-organized a special television show named Hanoi Tet: Past and Present. The show, which exhibited and promoted traditional cultural features, especially those of Hanoians in the past and the present, left strong impressions on viewers throughout the country. 5.
Sao Mai Diem Hen Techcombank coordinated with Vietnam Television to organize 2008 Sao Mai Diem Hen (Morning Star Rendezvous) music contest to bring into play young talents in Vietnam, and offer viewers special entertainment.
10. Mid-Autumn Festival for sightless pupils of Nguyen Dinh Chieu School The Bank organized a party and cultural activities, and gave presents to visually impaired pupils of Nguyen Dinh Chieu School in Hanoi at the MidAutumn Festival, in a move to encourage them to live and study well.
6.
war Invalids and Martyrs Day - July 27 On the occasion of the Vietnamese War Invalids and Martyrs Day on July 27, 2008, Techcombank co-ordinated with Vietnam Television and contestants of 2008 Sao Mai Diem Hen music contest to visit heroic mother Pham Thi Co in Kim Lu village, Thanh Nguyen commune, Thanh Liem district, Ha Nam province. Techcombank offered her VND10 million.
45
AWARDS AND SOCIAL RECOGNITION
testament of our commitment
Certificate of Merit granted by the Prime Minister for greatly contributing to restraining inflation, stabilizing macro-economy, meeting the capital need for production expansion and export, and maintaining social security. Top Trade Services Prize in 2008 granted by the Ministry of Industry and Trade. Unique Big Enterprise With Effective IT Application Award granted by the Ministry of Information and Communications in 2008.
Golden Cup for Social Improvement and Sustainable Development granted by the Ministry of Labor, Invalids and Social Affairs. Prestigious Securities Award and Top Joint Stock Company in 2008 Award granted by the State Securities Commission and the Securities magazine. Most Active Issuing Bank in East Asia in 2008 Award granted by the IFC.
Golden Star of Vietnam Award granted by the Young Enterprises Association in 2006 and 2008. Most Favored Services Company in 2008 Award granted by consumers under a voting program held by Saigon Marketing newspaper. Strong Trademark of Vietnam Award granted by Vietnam Economic Times in 2006, 2007, 2008.
47
We measure our success by our
customers success
Techcombanks business orientations are always based on our customers benefits as our customers are the focus of every activity in our business.
49
FINANCIAL TARGETS FOR 2009
AUDITED FINANCIAL STATEMENTS 2008
Financial targets for 2009 a. b. c. d. e. f. g. h. Total assets: Total customer deposits Total loans and advances Non-performing loans Profit before tax Dividends ROE ROA
Bln VND, %
82,041 72,077 33,112 2.5% 2,000 20% 19% 1.65%
Audited Financial Statements for Bank 2008

In our opinion, the separate financial statements present fairly, in all material respects, the unconsolidated financial position of the Bank as of 31 December 2008 and the unconsolidated results of its operations and its cash flows for the year then ended, in accordance with Vietnamese Accounting Standards, the Vietnamese Accounting System for Credit Institutions and other relevant accounting regulations stipulated by the State Bank of Vietnam and accounting principles generally accepted in Vietnam
51
Corporate information
KPMG Limited
10th Floor, Sun Wah Tower 115 Nguyen Hue Street District 1, Ho Chi Minh City The Socialist Republic of Vietnam
Telephone +84 (8) 3821 9266 Fax +84 (8) 3821 9267 Internet www.kpmg.com
Banking Licence No.
REPORT OF THE INDEPENDENT AUDITORS
0040/NH - GP
6 August 1993
The banking licence was issued by the State Bank of Vietnam and was valid for 20 years from the date of the banking licence. The operation period was extended to 99 years under Decision No. 330/QD-NH5 of the State Bank of Vietnam dated 8 October 1997.
To the Shareholders Vietnam Technological Commercial Joint Stock Bank (Incorporated in the Socialist Republic of Vietnam) Scope We have audited the accompanying separate balance sheet of Vietnam Technological Commercial Joint Stock Bank (the Bank) as of 31 December 2008 and the related separate statements of income, changes in equity and cash flows for the year then ended. These financial statements are the responsibility of the Banks management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Vietnamese Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Audit opinion
Board of Management
Mr. Ho Hung Anh Mr. Nguyen Dang Quang Mr. Nguyen Thieu Quang Mr. Tran Duc Luu Mr. Ngo Chi Dung Mr. Brian Fredrick Mr. Nguyen Canh Son Mr. Le Huu Bau Mr. Hoang Van Dao
Chairman First Vice Chairman Vice Chairman Vice Chairman Vice Chairman Member (until 8/12/2008) Member Member Member
Board of Directors
Mr. Nguyen Duc Vinh Ms. Nguyen Thi Tam Mr. Pham Quang Thang Ms. Luu Thi Anh Xuan Mr. Nguyen Duy Phu Mr. Le Xuan Vu Mr. Nguyen Thanh Long Ms. Do Diem Hong Mr. Tran Hoai Phuong Ms. Nguyen Thi Thien Huong 70-72 Ba Trieu Street Hoan Kiem District Hanoi, Vietnam KPMG Limited Vietnam
Chief Executive Officer Deputy General Director Deputy General Director Deputy General Director Deputy General Director Deputy General Director Deputy General Director Deputy General Director (from 1/6/2008) Deputy General Director (from 1/9/2008) Deputy General Director (from 1/10/2008)
In our opinion, the separate financial statements present fairly, in all material respects, the unconsolidated financial position of the Bank as of 31 December 2008 and the unconsolidated results of its operations and its cash flows for the year then ended, in accordance with Vietnamese Accounting Standards, the Vietnamese Accounting System for Credit Institutions and other relevant accounting regulations stipulated by the State Bank of Vietnam and accounting principles generally accepted in Vietnam.
Head Office
KPMG Limited Vietnam Investment Certificate No: 011043000345 Audit Report No: 08-02-146/2
Auditors
John T. Ditty CPA No. N 0555/KTV General Director Hanoi, 12 March 2009
Vo Thanh Phu Quoc CPA No.0339/KTV
2009 KPMG Limited, a Vietnamese limited liability company and a member firm of the KPMG net work of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved
53
Balance sheet
as at 31 December 2008
as at 31 December 2008 (continued)
Balance sheet
2008 VND million
2007 VND million
2008 VND million
2007 VND million
Assets Cash on hand and gold Balances with the State Bank of Vietnam Balances with financial institutions Investments in securities Loans and advances to customers Advances to purchase securities Long-term investments in equities Fixed assets Other assets 1,565,938 2,296,574 15,525,959 10,500,988 26,018,985 921,250 475,765 574,479 1,480,547 59,360,485 Liabilities Borrowings from the State Bank of Vietnam Balances and borrowings from financial institutions Valuable papers Entrusted funds Deposits from customers General provision for commitments Other liabilities Provision for taxation 8,970,269 2,761,793 231,961 39,930,678 34,203 1,399,925 416,102 53,744,931 301,993 8,458,903 1,750,715 161,170 24,476,576 25,216 638,183 156,324 35,969,080 496,173 1,298,682 9,303,685 6,842,172 19,841,131 645,000 36,930 436,970 641,753 39,542,496
Equity Share capital Share premium Other capital Retained earnings Reserves 3,642,015 1,063,402 371 628,354 281,412 5,615,554 59,360,485 Off-balance sheet items Letters of credit Undrawn loan commitments Guarantees Foreign exchange contracts Gold contracts Future commodity purchase commitments Future commodity sales commitments 2,879,247 14,031 2,283,271 3,184,902 122,697 1,395,433 1,414,321 5,455,192 1,348,279 375,323 6,051,861 5,881,154 2,521,308 476,779 371 428,636 146,322 3,573,416 39,542,496
Approved by:
Nguyen Duc Vinh Chief Executive Officer
Tran Van Chien Chief Accountant
55
(30,594)
1,761,687
1,331,939
(364,201) -
(41,242)
Statement of income
510,384
3,573,416
1,272,357
1,995 1,995
(12,840)
(30,594)
(434,973)
103,503
146,322
(41,242)
86,253
Fee and commission income Fee and commission expenses Net fee and commission income Foreign exchange gain net Dividend income Income from securities trading net Other income Salaries and related expenses Specific allowance for doubtful debts General allowance for doubtful debts Reversal of specific allowance for doubtful debts General provision for commitments Allowance for diminution of investments in securities Allowance for diminution of investments in equities Reversal of allowance for diminution of investments in equities Depreciation and amortisation of fixed assets General administration expenses Profit before taxation Corporate income tax Profit after taxation Earnings per share (par value of VND10,000/share) Basic earnings per share (VND)
543,270 (60,393) 482,877 21,793 78,864 931,102 9,355 (405,506) (537,171) (71,774) 6,225 (8,987) (148,318) (5,740) 1,835 (42,189) (456,320) 1,600,348 (427,119) 1,173,229 4,224
206,958 (30,022) 176,936 24,583 2,992 81,761 4,462 (182,240) (10,818) (48,297) (19,937) (1,835) (23,535) (219,606) 709,740 (199,356) 510,384 3,235
371
371
Other capital
371
(476,779)
472,837
476,779
1,063,402
Statement of changes in equity
Share premium
1,500,000
859,102
12,840
149,366
2,521,308
for the year ended 31 December 2008
Share capital
3,642,015
208,955
434,973
476,779
1,063,402
Approved by: 57 Nguyen Duc Vinh Chief Executive Officer
3,942
Transfer from reserves to share capital
Transfer from share premium to share capital
Net profit for the year
Transfer to reserves
Utilisation of reserves
Capital contribution
Chief Executive Officer

Nguyen Duc Vinh
Chief Accountant
Tran Van Chien
Dividends
Approved by:
Balance at 31 December 2008
(VND million)
Balance at 1 January 2007
Other movements
Share dividends
Interest and similar income Interest and similar expenses Net interest income
6,213,718 (4,469,416) 1,744,302
2,326,002 (1,400,728) 925,274
Reserves
(149,366)
(103,503)
609,310
(609,310)
(364,201)
171,121
510,384
428,636
Retained earnings
1,173,229
628,354
281,412
2008 VND million
2007 VND million
Total
1,173,229
5,615,554
Statement of cash flows
for the year ended 31 December 2008 (continued)
Statement of cash flows
2008 VND million
2007 VND million
2008 VND million
2007 VND million
Cash flows from operating activities Profit before tax Adjustments for: Depreciation and amortisation of fixed assets General allowance for commitments issued Specific allowance for doubtful debts net General allowance for doubtful debts Allowance for diminution of investment in securities Allowance for diminution of investment in equities net Income from investment in securities Dividend income received Loss on disposal of fixed assets Operating profit before changes in operating assets and liabilities (Increase)/decrease in operating assets Balances with other financial institutions Loans and advances to customers Advances to securities companies to purchase securities Other assets Increase/(decrease) in operating liabilities Borrowings from the State Bank of Vietnam Balances and borrowings from other financial institutions Entrusted funds Deposits from customers Valuable papers issued Other liabilities Cash inflow from operating activities Corporate income tax paid Utilization of reserves Other movements Net cash inflow from operating activities
1,600,348 42,189 8,987 530,946 71,774 148,318 5,740 (931,102) (78,864) 1,221 1,399,557 (2,622,031) (6,780,574) (276,250) (838,794) (301,993) 511,366 70,791 15,454,102 1,011,078 767,732 8,394,984 (173,331) (41,242) 1,995 8,182,406
709,740 23,535 19,937 10,818 48,297 1,835 (81,761) (2,992) 458 729,867 (2,890,053) (11,204,145) (645,000) (328,918) 244,110 3,388,051 (116,137) 14,910,533 1,558,473 274,844 5,921,625 (74,697) (30,594) 5,816,334
Cash flows from investing activities Purchase of fixed assets and construction in progress Increases in investments in subsidiaries Dividends received during the year Paid for investments in securities Proceeds from disposal of investments in securities Redemptions of investment in securities Acquisition of investment in equity Net cash outflow from investing activities Net cash flows from financing activities Issuance of share capital and share premium Distributions to shareholders Net cash inflow from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 1,272,357 (364,201) 908,156 5,667,900 5,775,858 11,443,758 1,331,939 (57) 1,331,882 3,136,957 2,638,901 5,775,858 (180,919) (410,000) 78,864 (10,271,303) 5,937,719 1,457,552 (34,575) (3,422,662) (122,662) 2,992 (6,050,932) 1,872,325 295,000 (7,982) (4,011,259)
Non-Cash Investing Activities

2008 VND million 2007 VND million
Dividends received in shares Approved by:
75,743
59
Notes to the financial statements

These notes form an integral part of, and should be read in conjunction with, the accompanying financial statements. 1. Reporting entity The principal activities of Vietnam Technological and Commercial Joint Stock Bank (the Bank), which is incorporated as a joint stock bank in the Socialist Republic of Vietnam, are to carry out banking activities, under Banking Licence No. 0040/NH-GP issued by the State Bank of Vietnam (SBV) on 6 August 1993 for an initial period of 20 years. The operation of the Bank was extended to 99 years under Decision No. 330/QD-NH5, dated 8 October 1997, of the SBV. The Banks Head Office is located at 70 - 72 Ba Trieu, Hanoi. As at 31 December 2008, the Bank has one Head Office, 01 representative office, 01 Head Office transaction centres, 38 branches and 114 transaction offices nationwide. As at 31 December 2008, the Bank has three subsidiaries as follows:
Subsidiary Techcom Securities Company Limited Vietnam Technological and Commercial Joint Stock Bank - Asset Management Company Limited Techcom Capital Management Company Limited Operating licence 98/UBCK-GP, dated 18 September 2008 granted by State Securities Committee. 0104003519 dated 18 June 2008 granted by Hanoi Planning and Investment Department. 40/UBCK-GP, dated 21 October 2008 granted by State Securities Committee. Nature of Business Securities activities % owned by the Bank 100%
The financial statements, expressed in Vietnam Dong (VND), rounded to the nearest million, have been prepared in accordance with Vietnamese Accounting Standards, the Vietnamese Accounting System for Credit Institutions and other relevant accounting regulations stipulated by the State Bank of Vietnam, and accounting principles generally accepted in Vietnam. These accounting policies may differ in some material respects from International Financial Reporting Standards and the generally accepted accounting principles and standards of other countries. Accordingly, the accompanying financial statements are not intended to present the financial position and results of operations and cash flows in accordance with generally accepted accounting principles and practices in countries or jurisdictions other than Vietnam. Furthermore, their utilisation is not designed for those who are not informed about Vietnams accounting principles, procedures and practices. The financial statements, except for the statement of cash flows, are prepared on the historical cost basis. The statement of cash flows is prepared using the indirect method. The accounting policies have been consistently applied by the Bank and are consistent with those used in the previous year. (b) Fiscal year The fiscal year of the Bank is from 1 January to 31 December. (c) Foreign currency transactions Monetary assets and liabilities denominated in currencies other than VND are translated into VND at rates of exchange ruling at the balance sheet date. Transactions in currencies other than VND during the year have been translated into VND at rates approximating those ruling on transaction dates. All realised and unrealised foreign exchange differences are recorded in the statement of income. Open commitments on forward foreign exchange contracts are revalued at rates of exchange ruling at the balance sheet date. Any gain or loss arising therefrom is included in the statement of income. (d) Cash and cash equivalents Cash and cash equivalents include cash on hand, balances with the SBV and balances with other banks with original terms to maturity not exceeding three months. (e) Investments in securities Investments in securities comprise securities issued by the Government, the SBV and other banks and companies. Those that the Bank holds for the purpose of short-term profit taking are classified as trading instruments. Those that the Bank has the intention and ability to hold to
Asset management
100%
Fund management
100%
As at 31 December 2008, the Bank had 4,224 employees (31 December 2007: 2,929 employees). 2. Summary of significant accounting policies The following significant accounting policies have been adopted by the Bank in the preparation of these financial statements. (a) Basis of financial statement preparation These are the separate financial statements of the Bank which do not include financial statements of subsidiaries. The Bank produces consolidated financial statements which included the Bank and its subsidiaries and issues them separately, in addition to these financial statements.
61

maturity are classified as held-to-maturity assets. Other investments are classified as availablefor-sale assets. Investments in securities are stated at cost less allowance for diminution in value of investments. (f) Long-term investments in equities Investments in subsidiaries are stated at their cost in the separate financial statements. Other long-term investments in equities are stated at cost less allowance for diminution in value of the investments. Management determines the diminution allowance after giving consideration to cost, market conditions, current and projected operating performance and expected cash flows. (g) Loans and advances to customers Decision No. 493/2005/QD-NHNN dated 22 April 2005 issued by State Bank of Vietnam, which was amended and supplemented by Decision No. 18/2007/ QD-NHNN dated 25 April 2007 issued by State Bank of Vietnam, requires specific allowance to be made for loans and advances on a monthly basis based on loan gradings. The specific allowance disclosed at the balance sheet date (i.e. 31 December) is determined utilising the following allowance rates against principal outstanding as at 30 November less allowed value of collateral.
Group
Overdue status
Allowance rate
4 Doubtful
Loans being overdue between 181 days and 360 days; Loans having rescheduled terms of repayments for the first time and being overdue less than 90 days according to the first rescheduled terms of repayments; or Loans having rescheduled terms of repayments for the second time. Loans being overdue more than 360 days; Loans having rescheduled terms of repayments for the first time and being overdue from 90 days or more according to the first rescheduled terms of repayments; Loans having rescheduled terms of repayments for the second time and being overdue according to the second reschedule terms of repayments; Loans having rescheduled terms of repayments for the third time; or Blocked loans, or loans awaiting for settlements.
50%
5 Loss
100%
In addition, the Bank is required to make a general allowance of 0.75% of total outstanding loans that are classified from Group 1 to Group 4 as at the balance sheet date. Such general allowance is required to be made in full within 5 years from the effective date of Decision No. 493/2005/QD-NHNN. As at the balance sheet date, the bank provided a general allowance of 0.6% of the above balances as at 30 November 2008 (2007: 0.45%). In accordance with the requirements of this Decision, loans and advances are written off against allowance when loans and advances have been classified to Group 5 or when borrowers have declared bankruptcy or dissolved (for borrowers being organisations, enterprises) or borrowers have been dead or missing (for borrowers being individuals). No general allowances are made for country risk, other than the financial reserve required by the State Bank regulations (Note 17). (h) Provision for off-balance sheet commitments
Group
Overdue status
Allowance rate
1 Current 2 Special mentioned
Current loans or overdue loans less than 10 days. Loans being overdue between 10 days to 90 days; or Loans having revised terms of repayments for the first time (if customers are assessed as being capable of repaying both principal and interest according to the first revised terms of repayments for the case of enterprises and organisational customers). Loans being overdue between 91 days and 180 days; Loans having rescheduled terms of repayments for the first time except for the loans with revised terms of repayments classified into the above mentioned Group 2; or Loans having exempt or reduced interest because customers are not able to pay the interest according to contracts.
0% 5%
3 Substandard
20%
In accordance with Decision No. 18/2007/QD-NHNN, the Group is also required to classify guarantees, acceptances, irrevocable undrawn loan commitments which are irrevocable into relevant groups and make specific allowances accordingly.
63
In addition, in accordance with Decision 493/2005/QD-NHNN the Group is required to make a general provision of 0.75% of total outstanding letters of guarantee, letters of credit, and irrevocable undrawn loan commitments as at the balance sheet date. Such general provision is required to be made in full within 5 years from the effective date of the Decision. As at the balance sheet date, the Bank provided a general provision of 0.6% of the above balances as at 30 November 2008 (2007: 0.45%). (i) Tangible fixed assets (i) Cost Tangible fixed assets are stated at cost less accumulated depreciation. The initial cost of a tangible fixed asset comprises its purchase price, including import duties and non-refundable purchase taxes and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Expenditure incurred after the tangible fixed assets have been put into operation, such as repairs and maintenance and overhaul costs, is normally charged to statement of income in the year in which the costs are incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of an item of tangible fixed assets beyond its originally assessed standard of performance, the expenditure is capitalised as an additional cost of tangible fixed assets. (ii) Depreciation Depreciation is computed on a straight-line basis over the estimated useful lives of items of tangible fixed assets. The estimated useful lives are as follows: buildings and building improvements office equipment motor vehicles others 20 - 50 years 4 - 8 years 7 years 4 - 5 years
(ii) Software Cost of acquisition of new software, which is not an integral part of the related hardware, is capitalised and treated as an intangible asset. Software is amortised on a straight-line basis over 4 years. (k) Provision A provision is recognised if, as a result of a past event, the Bank has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. (l) Taxation Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the statement of income except to the extent that it relates to items recognised directly to equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years. Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities using tax rates enacted or substantively enacted at the balance sheet date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised. (m) Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity.
(j) Intangible fixed assets (i) Land use rights Land use rights include costs incurred to acquire formal rights to use land. The initial cost is based on the costs incurred and the value of land approved by the Government at the time of acquisition. Land use rights included those with definite term and those with indefinite term. Land use rights with definite term are amortised over their useful lives. Land use rights with indefinite term are not amortised.
65
(n) Reserves The reserve to supplement capital is allocated from profit after tax and is to supplement share capital. Financial reserve is allocated from profit after tax and is to cover losses incurred during the normal course of business. These reserves are not distributable. The bonus and welfare fund is allocated from profit after tax and is used primarily to make payments to the Banks employees. (o) Revenue recognition Interest income is recognised in the statement of income on an accruals basis, except for interest on loans classified in Group 2 to Group 5, as defined in Note 2 (g), which is recognised upon receipts. Fees and commissions are recognised when incurred or earned. Dividend income is recognised when the right to receive payment is established. (p) Operating lease payments Payments made under operating leases are recognised in the statement of income on a straightline basis over the term of the lease. Lease incentives received are recognised in the statement of income as an integral part of the total lease expense. (q) Borrowing costs Borrowing costs are recognised as an expense in the year in which they are incurred. (r) Earnings per share The Bank presents its basic earnings per share (EPS) for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to the ordinary shareholders of the Bank by the weighted average number of ordinary shares outstanding during the year. (s) Segment reporting A segment is a distinguishable component of the Bank that is engaged either in providing related products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are
different from those of other segments. The Bank primary format for segment reporting is based on geographical segments. (t) Related parties Parties are considered to be related if one party has the ability, directly or indirectly, to control another party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subjected to common control or common significant influence. (u) Off-balance sheet items In the normal course of business, the Bank has entered into off-balance sheet commitments. (i) Foreign exchange contracts The Bank enters into foreign exchange (including gold) forwards and swaps which enable customers to transfer, modify or reduce their foreign exchange or other market risks and also trades these products for its own account. Forward contracts are commitments to either purchase or sell a designated currency at a specific future date for a specific exchange rate and are settled in cash. Swap contracts are commitments to settle in cash at a future date based on differentials between specified exchange rates, as applied to a notional principal amount. (ii) Futures Commodity Contracts Futures commodity contracts are commitments to either purchase or sell a designated commodity at a specified future date for a specified price and may be settled in cash or another financial asset, which enable customers to transfer, modify or reduce their market risks in terms of the fluctuations in commoditys prices. The Bank acts as a broker for its customers in entering into futures commodity contracts. (iii) Commitments and contingent liabilities At any time, the Bank has outstanding commitments to extend credit. These commitments take the form of approved loans and overdraft facilities. The Bank also provides financial guarantees and letters of credit to guarantee the performance of customers to third parties. Many of the contingent liabilities and commitments will expire without being advanced in whole or in part. Therefore the amounts do not represent expected future cash flows.
67
AUDITED FINANCIAL STATEMENTS 2008
Corporate information
Banking Licence No.
0040/NH - GP
6 August 1993
The banking licence was issued by the State Bank of Vietnam and was valid for 20 years from the date of the banking licence. The operation period was extended to 99 years under Decision No. 330/QD-NH5 of the State Bank of Vietnam dated 8 October 1997.
Board of Management
Mr. Ho Hung Anh Mr. Nguyen Dang Quang Mr. Nguyen Thieu Quang Mr. Tran Duc Luu Mr. Ngo Chi Dung Mr. Brian Fredrick Mr. Nguyen Canh Son Mr. Le Huu Bau Mr. Hoang Van Dao
Chairman First Vice Chairman Vice Chairman Vice Chairman Vice Chairman Member (until 8/12/2008) Member Member Member
Board of Directors
Audited Consolidated Financial Statements 2008

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of 31 December 2008 and the consolidated results of its operations and its consolidated cash flows for the year then ended, in accordance with Vietnamese Accounting Standards, the Vietnamese Accounting System for Credit Institutions and other relevant accounting principles generally accepted in Vietnam. Head Office
Mr. Nguyen Duc Vinh Ms. Nguyen Thi Tam Mr. Pham Quang Thang Ms. Luu Thi Anh Xuan Mr. Nguyen Duy Phu Mr. Le Xuan Vu Mr. Nguyen Thanh Long Ms. Do Diem Hong Mr. Tran Hoai Phuong Ms. Nguyen Thi Thien Huong 70-72 Ba Trieu Street Hoan Kiem District Hanoi, Vietnam KPMG Limited Vietnam
Chief Executive Officer Deputy General Director Deputy General Director Deputy General Director Deputy General Director Deputy General Director Deputy General Director Deputy General Director (from 1/6/2008) Deputy General Director (from 1/9/2008) Deputy General Director (from 1/10/2008)
Auditors
69
KPMG Limited
10th Floor, Sun Wah Tower 115 Nguyen Hue Street District 1, Ho Chi Minh City The Socialist Republic of Vietnam
Telephone +84 (8) 3821 9266 Fax +84 (8) 3821 9267 Internet www.kpmg.com
Consolidated balance sheet
as at 31 December 2008
REPORT OF THE INDEPENDENT AUDITORS To the Shareholders Vietnam Technological Commercial Joint Stock Bank (Incorporated in the Socialist Republic of Vietnam) Scope We have audited the accompanying consolidated balance sheet of Vietnam Technological Commercial Joint Stock Bank (the Bank) and its subsidiaries (together, the Group) as of 31 December 2008 and the related consolidated statements of income, changes in equity and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Groups management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Vietnamese Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance that the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Audit opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of 31 December 2008 and the consolidated results of its operations and its consolidated cash flows for the year then ended, in accordance with Vietnamese Accounting Standards, the Vietnamese Accounting System for Credit Institutions and other relevant accounting regulations stipulated by the State Bank of Vietnam and accounting principles generally accepted in Vietnam.
2008 VND million
2007 VND million
Assets Cash on hand and gold Balances with the State Bank of Vietnam Balances with financial institutions Investments in securities Loans and advances to customers Advances to purchase securities Long-term investments in equities Fixed assets Other assets 1,565,968 2,296,574 15,647,089 10,497,569 26,018,985 921,250 66,425 576,665 1,478,530 59,069,055 Liabilities Borrowings from the State Bank of Vietnam Balances and borrowings from financial institutions Valuable papers Entrusted funds Deposits from customers General provision for commitments Other liabilities Provision for taxation 8,970,269 2,761,793 231,961 39,617,723 34,203 1,405,256 422,442 53,443,647 301,993 8,458,903 1,750,715 161,170 24,476,576 25,216 638,183 156,324 35,969,080 496,173 1,298,682 9,303,685 6,842,172 19,841,131 645,000 36,930 436,970 641,753 39,542,496
KPMG Limited Vietnam Investment Certificate No: 011043000345 Audit Report No: 08-02-146/2
John T. Ditty CPA No. N 0555/KTV General Director Hanoi, 12 March 2009
Vo Thanh Phu Quoc CPA No. N1079/KTV
2009 KPMG Limited, a Vietnamese limited liability company and a member firm of the KPMG net work of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved
71
Consolidated balance sheet

as at 31 December 2008 (continued)
Consolidated statement of income
2008 VND million
2007 VND million
2008 VND million
2007 VND million
Equity Share capital Share premium Other capital Retained earnings Reserves 3,642,015 1,063,402 371 636,443 283,177 5,625,408 59,069,055 Off-balance sheet items Letters of credit Undrawn loan commitments Guarantees Foreign exchange contracts Gold contracts Future commodity purchase commitments Future commodity sales commitments 2,879,247 14,031 2,283,271 3,184,902 122,697 1,395,433 1,414,321 5,455,192 1,348,279 375,323 6,051,861 5,881,154 2,521,308 476,779 371 428,636 146,322 3,573,416 39,542,496
Interest and similar income Interest and similar expenses Net interest income Fee and commission income Fee and commission expenses Net fee and commission income Foreign exchange gain net Dividend income Income from securities trading net Other income Salaries and related expenses Specific allowance for doubtful debts General allowance for doubtful debts Reversal of specific allowance for doubtful debts General provision for commitments Allowance for diminution of investments in securities Allowance for diminution of investments in equities Reversal of allowance for diminution of investments in equities Depreciation and amortization of fixed assets General administration expenses Approved by: Profit before taxation Corporate income tax Profit after taxation Nguyen Duc Vinh Chief Executive Officer Tran Van Chien Chief Accountant Earnings per share (par value of VND10,000/share) Basic earnings per share (VND)
6,218,777 (4,458,034) 1,760,743 543,270 (60,393) 482,877 21,793 79,582 931,102 14,199 (405,506) (537,171) (71,774) 6,225 (8,987) (148,318) (5,740) 1,835 (42,244) (462,761) 1,615,855 (432,772) 1,183,083 4,259
2,326,002 (1,400,728) 925,274 206,958 (30,022) 176,936 24,583 2,992 81,761 4,462 (182,240) (10,818) (48,297) (19,937) (1,835) (23,535) (219,606) 709,740 (199,356) 510,384 3,235
Approved by:
Nguyen Duc Vinh Chief Executive Officer 72 - Annual Report 2008

73
Consolidated statement of cash flows

1,761,687 1,331,939 510,384 (30,594) 1,272,357 3,573,416 1,183,083 (41,242) (364,201) 1,995 5,625,408 Total
(12,840)
(434,973)
(30,594)
103,503
146,322
611,075
(41,242)
86,253
1,995
Reserves
283,177
2008 VND million
2007 VND million
Cash flows from operating activities Profit before tax Adjustments for: Tran Van Chien Chief Accountant Depreciation and amortization of fixed assets General allowance for commitments issued Specific allowance for doubtful debts net General allowance for doubtful debts Allowance for diminution of investment in securities Allowance for diminution of investment in equities net Income from investment in securities Dividend income received Approved by: Loss on disposal of fixed assets Operating profit before changes in operating assets and liabilities (Increase)/decrease in operating assets Balances with other financial institutions Loans and advances to customers Advances to securities companies to purchase securities Other assets (897,531) (6,780,574) (276,250) (836,777) (301,993) 511,366 70,791 15,141,147 1,011,078 773,102 9,828,760 (173,343) (41,242) 1,995 9,616,170 (2,890,053) (11,204,145) (645,000) (328,918) 244,110 3,388,051 (116,137) 14,910,533 1,558,473 274,844 5,921,625 (74,697) (30,594) 5,816,334 42,244 8,987 530,946 71,774 148,318 5,740 (931,102) (79,582) 1,221 1,414,401 23,535 19,937 10,818 48,297 1,835 (81,761) (2,992) 458 729,867 1,615,855 709,740
(149,366)
(103,503)
(611,075)
1,183,083
(364,201)
510,384
171,121
428,636
Other capital
Retained earnings
371
371
Consolidated statement of changes in equity
1,063,402
(476,779)
472,837
3,942
476,779
Share premium
12,840
859,102
149,366
1,063,402
371
636,443
1,500,000
2,521,308
208,955
434,973
476,779
3,642,015
Share capital
Increase/(decrease) in operating liabilities Borrowings from the State Bank of Vietnam Balances and borrowings from financial institutions Entrusted funds Deposits from customers Valuable papers issued Other liabilities Cash inflow from operating activities Corporate income tax paid Utilisation of reserves Other movements Net cash inflow from operating activities
Transfer from share premium to share capital
Other movements
Balance at 31 December 2008
(VND million)
Share dividends
Dividends
75
Consolidated statement of cash flows

Notes to the consolidated financial statements
2008 VND million
2007 VND million
These notes form an integral part of, and should be read in conjunction with, the accompanying consolidated financial statements. 1. Reporting entity The principal activities of Vietnam Technological and Commercial Joint Stock Bank (the Bank), which is incorporated as a joint stock bank in the Socialist Republic of Vietnam, are to carry out banking activities, under Banking Licence No. 0040/NH-GP issued by the State Bank of Vietnam (SBV) on 6 August 1993 for an initial period of 20 years. The operation of the Bank was extended to 99 years under Decision No. 330/QD-NH5, dated 8 October 1997, of the SBV. The Banks Head Office is located at 70 - 72 Ba Trieu, Hanoi. As at 31 December 2008, the Bank has one Head Office, 01 representative office, 01 Head Office transaction centres, 38 branches and 114 transaction offices nationwide. As at 31 December 2008 the Bank had the following subsidiaries:
Cash flows from investing activities Purchase of fixed assets and construction in progress Dividends received during the year Paid for investments in securities Proceeds from disposal of investments in securities Redemptions of investment in securities Acquisition of investment in equity Net cash outflow from investing activities Net cash flows from financing activities Issuance of share capital and share premium Distributions to shareholders Net cash inflow from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 1,272,357 (364,201) 908,156 7,513,560 5,775,858 13,289,418 1,331,939 (57) 1,331,882 3,136,957 2,638,901 5,775,858 (183,160) 79,582 (10,267,884) 5,937,719 1,457,552 (34,575) (3,010,766) (122,662) 2,992 (6,050,932) 1,872,325 295,000 (7,982) (4,011,259)
Subsidiaries
Operating licence
Nature of Business
% owned by the Bank 100%
Capital VNDmillion 300,000
Techcom Securities Company Limited
98/UBCK-GP, dated 18 September 2008 granted by State Securities Committee. 0104003519 dated 18 June 2008 granted by Hanoi Planning and Investment Department.
Securities activities
Non-Cash Investing Activities

2008 VND million 2007 VND million
Vietnam Technological and Commercial Joint Stock Bank - Asset Management Company Limited Techcom Capital Management Company Limited
Asset management
100%
70,000
Dividends received in shares
75,743
40/UBCK-GP, dated 21 October 2008 granted by State Securities Committee.
Fund management
100%
40,000
As at 31 December 2008, the Group had 4,589 employees (31 December 2007: 2,929 employees). Approved by:
77
BRANCH NETWORK
3 7 12 9 1 8 5 10 4
Ha Noi
6 11 2
Our networking of 160 branches and transaction offices over 29 provinces nationwide:
13
Northern Regions:
1 2 3 4 15 5 6 7 8 9 10 11 16 17 18 12
14
Danang
13
Ha Noi: 55 branches & offices Hai Phong: 6 branches & offices Lao Cai: 2 branches & offices Quang Ninh: 3 branches & offices Bac Ninh: 2 branches & offices Hai Duong: 2 branches & offices Lang Son: 1 branch Thai Nguyen: 1 branch Vinh Phuc: 4 branches & offices Bac Giang: 1 branch Hung Yen: 2 branches & offices Phu Tho: 1 branch Thanh Hoa: 1 branch
Middle Regions:
14 15 16 19 17 18 19 20 20 21 22
21 22
Nghe An: 3 branches & offices Ha Tinh: 1 office Hue: 2 branches Da Nang: 9 branches & offices Quang Nam: 1 branch Binh Dinh: 1 branch Gia Lai: 1 office DakLak: 1 branch Khanh Hoa: 2 branches & offices
Southern Regions:
23 24 25 26 27 28 29
25 27 28 26
23
Ho Chi Minh City

24
Dong Nai: 3 branches & offices Ba Ria Vung Tau: 4 branches & offices Binh Duong: 2 branches & offices Ho Chi Minh City: 53 branches & offices Long An: 1 branch An Giang: 1 branch Can Tho: 3 branches & offices
29
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Annual Report 2008

VIETNAM TECHNOLOGICAL AND COMMERCIAL JOINT STOCK BANK

VIETNAM TECHNOLOGICAL AND COMMERCIAL JOINT STOCK BANK

10,666 617 1,009 15.72 905 89 286 206 45.19 2.60

7,667 412 515 10.19 494 95 107 76 31.71 1.70

(Unit: Bln VND)

MESSAGE FROM CHAIRMAN OF BOARD OF DIRECTORS

Mr. Ho Hung Anh

2 - Annual Report 2008

Annual Report 2008 -

REPORT BY CHIEF EXECUTIVE OFFICER

Mr. Nguyen Duc Vinh

4 - Annual Report 2008

Annual Report 2008 -

REPORT BY CHIEF EXECUTIVE OFFICER

CORPORATE GOVERNANCE Board of Directors

1. Mr. Ho HuNg ANH Chairman

3. Mr. Ngo CHI DzuNg Vice Chairman

4. Mr. NguyeN THIeu QuANg Vice Chairman

2. Mr. NguyeN DANg QuANg First Vice Chairman

5. Mr. NguyeN CANH SoN Member

Nguyen Duc Vinh

6 - Annual Report 2008

Annual Report 2008 -

CORPORATE GOVERNANCE Board of Directors

CORPORATE GOVERNANCE Board of Supervision

6. Mr. SuMIT DuTTA Member

9. Mr. STepHeN ColIN MoSS Member

1. Mr. Do TuAN ANH Head cum specialist member

3. MrS. NguyeN THu HIeN Specialist member

7. Mr. TrAN THANH HIeN Member

2. MrS. NguyeN QuyNH ANH Specialist member

10. Mr. NguyeN DuC VINH Member

4. MrS. Vu THI DzuNg Member

8. Mr. MADHur MAINI Member

5. Mr. NguyeN QuyNH lAM Member

8 - Annual Report 2008

Annual Report 2008 -

CORPORATE GOVERNANCE Board of Management

CORPORATE GOVERNANCE Board of Management

1. Mr. NguyeN DuC VINH President and Chief Executive Officer

4. Mr. NguyeN THANH loNg executive Vice president

6. Mr. le XuAN Vu executive Vice president

9. Mr. gAry MATTHewS Chief Operating Officer

2. MrS. NguyeN THI TAM executive Vice president

5. Mr. TrAN HoAI pHuoNg executive Vice president

7. MrS. luu THI ANH XuAN executive Vice president

10. Mr. ANTHoNy guerrIer Chief Financial Controller

3. Mr. pHAM QuANg THANg executive Vice president

8. Mr. JoNATHAN CrICHToN Chief Risk Officer

10 - Annual Report 2008

Annual Report 2008 -

12 - Annual Report 2008

Date of birth: November 8, 1975

Languages: Indonesian, English Business

Education background: Bachelor of Administration, Jadavpur University, India

Education background: Bachelor of Economics

CORPORATE GOVERNANCE Board of Management

14. MrS. To THuy TrANg Director, Marketing

13. Mr. NguyeN VAN THo Director, Human resources

Date of birth: January 13, 1974