1. NAME: TRAN THI KIM PHUONG (LUCY) ID STUDENT: MA3N0206 SITUATION OF MERGER OF SHB AND HBB BANKS IN VIETNAM

2. CONTENTS 1. Overview SHB and HBB Banks 1.1 Summary of the merging banks (SHB bank) 1.2 Summary of the merged bank (HBB bank) 2. The causes for the merger 3. Benefits of the merger 4. Financial situation of the two banks at the time of the merger

3. Overview SHB and HBB Banks Summary of the merging banks (SHB Bank) Information

4. Overview SHB and HBB Banks Summary of the merging banks (SHB Bank) The process of formation and development ► 1993: Establishment of the Bank. ► 2007: the Vietnam Coal and Minerals Group and The Vietnam Rubber Group officially became a strategic shareholder and comprehensive cooperation of SHB bank. Contributing capital to establish some Joint Stock companies ► 2008: Increased its Charter Capital from 500 to 2,000 billion VND confirms major turning point in the scale, position, potential of SHB. ► 2009: The 3rd bank in Vietnam Commercial Joint blocks officially listed 200 million shares at the Hanoi Stock Exchange; established and officially put into operation the Saigon-Hanoi Debt Management and Asset Company (SHAMC). ► 2010: successfully issued 150 million shares raised the total charter capital to nearly 3,500 billion VND; successfully issued 1,500 billion VND convertible bonds. ► 2011: Successful changed of 1,500 billion VND bond raise charter capital to 4815.8 billion VND. Approved by the State Bank to open branch in Cambodia and Laos. SHB Phnom Penh - Cambodia Branch has opened and put into operation at the beginning in 2012.

5. Overview SHB and HBB Banks Summary of the merged banks (HBB Bank) Information

6. Overview SHB and HBB Banks Summary of the merged banks (SHB Bank) The process of formation and development ►4/1989: Establishment of the Bank ►1992: a charter capital of 5 billion VND. Performing some operations of foreign currency and banking services in foreign currency. ►1995: Completed the issuance of shares and increase its charter capital to 24.3 billion VND. ►1996: Increasing its charter capital to 50 billion VND. ►2001: Completed the equipped centralized bank management software and became one of the first banks of Vietnam perform centralized data management and online system. ►2005: Deploying automated banking services, issuing HBB Vantage, equipped with ATM / POS system and card joining the alliance VNBC cards ►2006: was one of the first four banks increase its charter capital to 1,000 billion VND. ►2007: completed the selection of Deutsche Bank (Germany) is a foreign strategic partner and increased its charter capital to 2,000 billion VND.

7. Overview SHB and HBB Banks Summary of the merged banks (SHB Bank) The process of formation and development (cont.) ►2009: completed the increase its charter capital to 3000 billion VND and official launch customer service center - opened up a channel approach products and services to customers outside of the bank card and Internet ►2010: successfully issued 10.5 million convertible bonds (1.050 billion VND respectively). officially listed all the 300 million Joint Stock, equivalent to a value of 3.000 billion VND to Hanoi Stock Exchange (HNX), stocks are HBB. ►2011: Completed to change 10.5 million issued bonds to raise the charter capital to 4,050 billion VND.

8. The causes for the merger Summary of the cause financial difficulties for HBB led to the merger ►Focus on outstanding loans companies of Vinasin ►The general economic downturn led to the bad debt ratio and overdue debts customer higher ►Risk management system did not detect and prevent fraudulent behavior of customers ►Pressure on growth in the context of the banking business is very much dominated by the regulations of the State Bank led to Bank implemented of high-risk transactions. ►The financial market of Vietnam was a stub, has not really developed makes Banks had no opportunity to access and use the powerful tool to insure the interest rate risk, exchange rate risk... thereby, affecting the efficiency of business operations

9. The causes for the merger (cont.) HBB need to have additional new funding to operate and overcome the current period There are two solutions to make: ►Solution1: The shareholders of HBB will contribute additional capital; ►Solution2: Merger HBB to other banks would be better to support the shareholders and employees of HBB in the next stage. HBB Board of Directors has decided to choose the solution 2 by the existing shareholders of HBB were not ready to contribute additional capital to HBB during this period.  SHB emerged as a candidate for the Bank's brightest based on the following reasons: ► SHB is a partner with financial strength, developing ambitious (reflected in the strategic development of retail banking, versatile and powerful financial groups in the country and the Indochina region). ► SHB approach for HBB in the merger is practical and feasible. ► The intense competition in the market economy requires economic organization must have a healthy financial background, large scale.

10. Benefits of the merger The merger creates a strong financial institutions include: ► charter capital of nearly 9,000 billion VND and the scale of total assets of over 100,000 billion VND ► There are 500,000 customers and more than 4,600 employees. ► subsidiaries had capable of providing support activities, increased benefits for customers and increase non-interest income for the Bank include: stock company; Asset Management of the Bank Company ► there are areas of operations in the Indochina region with branches in Laos and Cambodia; ► there is strong support and customer who operate in the core areas for the development of the economy such as coal, mineral, industrial crops (rubber), infrastructure development. ► having the ability to provide services efficiently and safely for a large volume of individual customers closer to urban culture and their consumption habits in order to contribute to bring these customers have the life and better facilities.

11. Financial situation of the two banks at the time of the merger

13. HBB was be accumulated losses of up to 4066 billion (on the basis of provision for Loans, investments at greatest risk may occur). One of the main reasons is due to set aside sufficient risk provision for loan Vinasin, with a total value of setting up to 1,860 billion and bonds Vinasin was 376.26 billion. To ensure the interests of shareholders and facilitate the development of Bank after the merger in the search for strategic investors, resource mobilization and other activities, the Bank after the merger consult the General Meeting of Shareholders approved the provision of risk sufficient for the loan and bond investment of Vinashin within 5 years, each year about 372 billion standby lending and 75.2 billion standby bond Vinashin.

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