AEBF ANNUAL MEETING India, November 2014 THE VIETNAM DEVELOPMENT BANK- VDB

CONTENT 1. Overview of VDB 2. Challenges for export financing 3. Paths to follow

Overview of VDB Established on May 19 th 2006 by the Prime Minister, VDB functions and missions: Investment credit and export credit ODA fund management Credit guarantee Funding in domestic and international markets except from individual deposit Implement international cooperation Other tasks assigned by the Prime Minister.

Overview of VDB (cont) Charter capital: USD700 millions (expected to be USD1.5 billion in 2020). Total assets till 31/12/2013: USD 15 billions (expected to be USD 25 billions in 2020) Vision to 2030: Reinforce and develop VDB as a Government policy bank for non-profit purpose; to ensure development, effectiveness, self-reliance to implement export credit investment policies corresponding to social economic demand of each period.

VDB’s Motto - Safety - Effectiveness - International integration - Durable development

Short-term export credit : USD 6.4 billions of disbursement for exports contracts exporting goods to 120 countries (representing 5-10% of total outstanding of VDB). Average loan outstanding reached USD 0.5 billions. Implement other export support missions under Prime Minister’s decision.

Benefice from VDB export support Reduce cost of goods sold, increase competitiveness, Take advantages of good opportunity to boost export, Maintain traditional market as well as expend to new potential ones.

Other export financing activities Finance oversea infrastructure projects as long-term credit. Cooperation with other EXIM banks: - Windfarm program with US Eximbank support - JBIC loan for short and long terms - ODA loans from India Exim, China Exim...

Challenges for VDB export financing activities - Global economic downturns affecting performance and financial status of export companies and their loan repayment capacities. - Services and eligible clients are less competitive in comparison with commercial banks - Collateral requirements less than commercial banks does not stipulate costumers to make repayment. - As government bank, VDB’s policies and credit mechanism less flexible than commercial banks especially applied interest rate, risk management, provision set up…

Directives and group of measures As government bank, VDB commits to be developed in a sustainable, efficient way, contribution to support socio-economic goals of the country for each period. Export financing focus on export industries with high added value and export market that need government support but always respect international commitment.

Solutions - Improve export credit policies and mechanism goods and services eligible to be supported including agriculture, aquaculture products, products in area in difficulty, products that have high contents of technologies, products with high added values Selection of export markets and expand to new and potential market. Selection of eligible customers: Switch from trading companies to manufacturing companies. Diversify and increase range of services to be provided including indirect support (factoring and export contract guarantee), diversify loan currency.

Solutions (cont) - Make loan conditions more attractive - Complete bad debt prevention and bad debt settlement - Improve personnel qualification and corporate governance - Increase cooperation with AEBF

AEBF ANNUAL MEETING 2014 THANK YOU!