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VietNamNews

Vietcombank allowed to apply Basel II standards early

Update: November, 29/2018 - 15:35
Leaders of Vietcombank and VIB receive approvals from the State Bank of Việt Nam. — Photo sbv.gov.vn
Viet Nam News

HÀ NỘI — The State Bank of Việt Nam (SBV) on Wednesday allowed State-owned Vietcombank to apply minimum capital adequacy ratio requirements following Basel II standards one year earlier than the deadline initially set by the central bank.

Basel II is the second edition of the Basel Accords, which are recommendations on banking laws and regulations issued by the Basel Committee on banking supervision. Basel II comprises minimum capital requirements, supervisory review and market discipline. It aims to enhance competition and transparency in the banking system and make banks more resistant to market changes.

In order to realise the target of being the best risk management bank, Vietcombank’s Board of Directors has since 2014 directed a project to analyse the difference between the Basel II requirements and the status of Vietcombank. On this basis, it offers the Basel II Implementation Roadmap with a total of 82 initiatives to meet Basel II standards by the end of 2018 and meet the advanced approach in 2019.

The extensive Basel II programme has the participation of more than 160 people from the bank’s headquarters and branches. The implementation of 82 initiatives under the roadmap has helped Vietcombank qualify to meet Basel II standards. At the same time, Vietcombank has basically fulfilled the important conditions for the application of Basel II according to the advanced method.

Vietcombank has further improved its governance culture and risk management system, adjusting business strategy to ensure the balance between business development and risk control in the direction of diversifying products, focusing on retail development and expanding non-credit activities.

The result is a strong demonstration of Vietcombank’s commitment to becoming one of the 100 largest banks in Asia and one of the world’s 300 largest financial banking groups.

On the same day, the State Bank of Vietnam (SBV) also announced its approval for Vietnam International Bank (VIB) to apply minimum capital requirements following Basel II standards.

The central bank released a roadmap and a concrete plan for Basel II implementation in Việt Nam in 2013 following the Government’s project on restructuring credit institutions in the 2011-15 period, under which 10 commercial banks were selected to pilot the Basel II standards, including Vietcombank and VIB.

State Bank Governor Lê Minh Hưng said he appreciated the first two banks to apply the standards ahead of time, marking the banking sector’s efforts in recent years as a milestone in the development of international standards in Việt Nam.

Hưng said he expected the two banks would continue to focus their resources on implementing the SBV’s regulations and improving governance and administration efficiency.

With determination to achieve the goals set by the National Assembly and the Government, Hưng urged other banks to complete dossiers and register with the central bank to apply the Basel II standards before the deadline.

“The SBV will always support banks to help the banking system operate safely and efficiently adhere to international standards,” said Hưng. — VNS

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