LienVietPostBank

LienVietPostBank

Native name	Ngân hàng TMCP Bưu Điện Liên Việt
Type	Private
Industry	Banking
Founded	March 2008
Headquarters	Hau Giang province, Vietnam
Number of locations	72 own transaction points and 1,031 postal transaction offices across 42 cities and provinces
Key people	Mr. Duong Cong Minh as Chairman Mr. Pham Doan Son as General Director
Net income	2012: VND 868 billion (equivalent to USD 43 million)
Total assets	2012: VND 66,413 billion (equivalent to USD 3,320 million)
Total equity	2012: VND 7,391 billion (equivalent to USD 369 million)
Number of employees	2012: 2,500
Website	http://www.lienvietpostbank.com.vn/

Lien Viet Post Joint Stock Commercial Bank or LienVietPostBank (LPB), formerly known as LienVietBank, is a Vietnamese retail bank that provides banking products and services through its own transaction points across 42 cities and provinces and 1,031 postal transaction offices nationwide.^[1]

LPB is considered to be in the top 10 biggest banks in terms of assets and equity ^[2] and ranked 36th in VNR500 -Top 500 largest private companies in Vietnam in 2013.^[3]

The Bank is striving to become the bank for everyone in Vietnam by focusing on banking products for households and small and medium enterprises especially in the agriculture sector, and expanding its activities to rural and remote areas via the post offices network.

History

Establishment

LienVietPostBank (LPB) was established in Hau Giang Province on March 28, 2008 with the chartered capital of VND 3,300 billion. At that time, LPB was one of the top 10 commercial banks in Vietnam in terms of chartered capital. The founder shareholders include Him Lam Joint Stock Company, Saigon Trading Group and Southern Airports Service Company.

On May 1, 2008, LPB opened its first branch in Hau Giang province.

Becoming the first postal bank in Vietnam

In July 2011, Vietnam Post Corporation (VNPost) became the Bank’s biggest shareholder by contributing capital to the Bank equal to the value of the Vietnam Postal Savings Service Company (VPSC) and in cash. This merger was one of the most notable M&A events in Vietnam at that time ^[4] and is a milestone in the development of the Bank. The Bank then changed its name to Lien Viet Post Joint Stock Commercial Bank and became the first Postal Bank in Vietnam.

Besides, LPB and VNPost signed a 50-year-co-operation agreement which allows LPB to be an exclusive bank in providing banking and financial products and services throughout the network of more than 10,000 transaction points of VNPost.^[2] This gives LPB the opportunity to be present in 63 cities and provinces with 90% coverage at communal level around the country and take advantage of the huge client base of more than 400,000 individual clients.

From 2012 to present

In 2012, LPB was ranked 39th in the top 500 Vietnam’s biggest private enterprises according to VNR500.^[3] The Bank’s total assets and chartered capital was VND 66,413 billion and VND 6,460 billion respectively. By Feb of 2014, its network consists of 72 own transaction points and 1,031 postal transaction offices across 42 cities and provinces in Vietnam.

Main shareholders

1.Him Lam Joint Stock Company: 10.44%

2.Vietnam Post Corporation (VNPost): 12.54% ^[1]

Strategic Partners

1.Vietnam Bank for Agriculture and Rural Development (Agribank)

2.La Poste Group

3.Credit Suisse Bank

4.Oracle Financial Services Software Limited^[2]

Operations

Products and Services

Capital mobilization products

Typical capital mobilization products include term savings deposits with flexible principle withdrawal, floating rate deposits, step-up deposits, automatic investment accounts, studying abroad saving deposits, high interest-rate deposits and Postal Saving Services. The capital mobilized through the Postal saving system contributed to nearly 25% of total bank deposits in 2012.^[5] As of June 2013, LPB mobilized capital from nearly 620,000client accounts.^[2]

Credit products^[5]

Typical retail banking products: Flagship products, for example, car loans, real-estate loans, consumer loans, mortgage loans, study overseas loans, agricultural loans and home loans.

Typical corporate banking products: Short-term credit line, export financing, LPB guarantee product packages, foreign bill purchase and agricultural loans.

LPB’s lending portfolio shows its priority in access to finance

LPB has been developing credit products mainly aiming at agricultural-rural sector and SMEs. In 2010, LPB financed over 1,100 enterprises and individuals in the agricultural business with an amount of VND 2,400 billion (USD 114 million).^[6]

In 2011, agriculture and rural loans increased to over more than 40% of the total outstanding loans of the Bank.^[7]

In 2012, LPB provided abundant and cheap credit products to farmers and offered a variety of financial benefits to stakeholders including Vietnam Veterans Association, Vietnam Women’s Union and Farmers Association for credit expansion in agriculture and rural areas. SMEs were also given preferential conditions with low-cost, medium and long term funds from international financial institutions under IFC’s Global Trade Finance Program, Rural Finance Program of the World Bank, the Small and Medium Enterprise Financing Program of Japan International Cooperation Agency and other projects.^[5]

From June 2013, VNPost, LPB’s strategic partner, became the sole entity to distribute and service over 3 million pension accounts throughout Vietnam. This is a huge opportunity for LPB to implement its plan of access to finance.^[2]

The table below demonstrates LPB’s total deposits and loans from 2008 to 2012.^[5]

Unit: VND billion	2008	2009	2010	2011	2012
Deposits	3,801	13,399	30,421	48,148	57,628
Loans	2,674	5,983	10,114	12,757	29,325

Electronic banking and other products

In 2012, LPB launched two breakthrough services including Green Banking (products and services with environment-protecting covenants and non-cash transaction services) and New Generation Banking (product and services targeting at children and parents with assistance in educating personal finance management).^[5]

In addition to traditional services in domestic payment, international settlement, cash management and property keeping services, LPB was also eligible for providing State budget collection and electricity bill collection service in 2012. LPB is about to implement telephone bill collection service for Viettel Telecom Group and Vietnam Computerized Lottery Company.^[5]

Regarding electronic banking, in 2011, LPB launched Vi Viet E-wallet, a mobile money and online payment platform. LPB believes that one of the most efficient ways to reach viral is to shift the majority of cash-based financial transactions into digital form through a mobile phone or any digital interfaces. LPB is now in the process of improving Vi Viet E-wallet to transform it into an effective tool to access its un-banked segment and mass market coverage.^[7]

Partnership with Vietnam Post

According to the 50-year-co-operation agreement between LPB and VNPost, LPB is allowed to provide postal saving services and other banking services throughout the network of more than 10,000 transaction points of VNPost. The Bank has now been vigorously selling its banking products and services through the 1,031 postal transaction offices.^[8]

In October 2013, LPB and VNPost signed a Service Agreement with France’s La Poste Group to deliver technical consultation and technology transfer in order to boost the efficiency of the strategic partnership between LPB and VNPost.^[9] The objectives of the Service include:

• Define the best coordination governance to manage the relationship between LPB and VNP

• Design a retail postal banking range of products and the new product’s go-to-market process

• Build the postal banking transaction office model and the 5 years roll-out plan ^[9]

In the next 10 years, the Bank’s goal is to expand full banking services to at least 80% of more than 10,000 post offices throughout Vietnam.^[2]

International Relations

Since its establishment in 2008, the Bank has approached and built relationships with several international organizations and foreign financial institutions such as:

• IFC – International Finance Corporation: May 2011, LPB’s initial trade line through IFC’s Global Trade Finance Program (GTFP) reached USD 5 million. January 2012, the trade line is increased to USD 20 million to help SMEs sustain import and export activities.^[5][7]

• World Bank: In May 2012, the Bank participated in the third Rural Finance Program III sponsored by the International Development Association, a member of World Bank, to support end-borrowers including individuals, households and SMEs in rural areas.^[5]

• WSBI – World Saving Bank Institute: In July 2011, LPB officially became a member of WSBI, a global voice of the world’s retail and saving banks. In November 2011, WSBI with Bill & Melinda Gates Foundation began assisting LPB in implementing the project of “Working with saving banks to double the number of savings accounts for the poor”.^[7]

• JICA – Japan International Cooperation Agency: September 2011, LPB participated in the third stage of SMEs’ financing project of JICA.^[7]

• JP Morgan Chase, Wells Fargo and Industrial and Commercial Bank of China (ICBC) are currently important partners of LPB and play vital roles in assisting the Bank to enhance trade finance for SMEs.

Key financial ratios

Unit: VND billion	2008[10]	2009[10]	2010[6]	2011[7]	2012[5]
Total Assets	7,453	17,367	34,985	56,132	66,143
Shareholders’ Equity	3,447	3,828	4,105	6,594	7,391
Net Operating Income	449	569	816	1,161	1,275
Net Profit After Tax	444	540	683	977	868
Return on average assets (ROAA) (%)	5.96%	4.35%	2.61%	2.14%	1.42%
Return on average equity (ROAE) (%)	12.88%	14.85%	17.22%	18.26%	12.42%
Non-performing loans (NPL) (%)	0.00%	0.28%	0.42%	2.14%	2.71%
Dividend payout ratio (%/year)	9.00%	13.00%	15.00%	15.00%	10.00%

Business Strategies

Mission	• To offer customers and society a wide range of products and services with excellent quality • To create maximum benefits for the Bank and the Society
Vision	• To become a leading retail bank in Vietnam – A Bank for Everyone
Business Strategies	• To be a retail and universal bank
Core values	• Discipline, Creativity and Humanity[1]

Highlights

Mar 2008	• Received operation license from the SBV (formerly known as Lien Viet Joint-stock Commercial Bank)[1]
Sep 2009	• Established LienVietBank’s E-Banking.
Oct 2009	• Increased chartered capital to USD 193 million.[10]
Oct 2010	• Signed cooperation agreement with Wells Fargo in Washington DC.[6]
Mar 2011	• Officially formed relationship with International Finance Corporation (IFC) through the Global Trade Finance Program (GTFP) with an initial trade line of USD 5 million.
Jul 2011	• Merged with Vietnam Postal Savings Company (VPSC), and changed name to LienVietPostBank. • Became a member of World Savings Banks Institute (WSBI).[1]
Sep 2011	• Successfully participated in SMEs’ financing via Japan International Corporation Agency (JICA) loans. • Integrated LPB’s ATM system into Vietnam biggest ATM network – Smartlink.[7]
Dec 2011	• Became the first joint-stock commercial bank to be selected as an ODA loan servicing bank.[11]
Jan 2012	• On January 16, 2012, the LPB’s GTFP trade line was increased to US 20 million by IFC, allowing LPB to further help SMEs sustain import and export activities.[5]
May 2012	• Successfully participated in the third Rural Finance Program built by the World Bank to support end-borrowers which are individuals, households and SMEs in rural areas.[5]
Jan 2013	• Ranked 36th in the TOP 500 biggest private enterprises in Vietnam accrording to VNR500.[3]
Oct 2013	• Sign technical consulting and technology transfer contract with La Poste Group.[9]

Corporate Social Responsibility

From 2008 to 2012, LPB and its founders actively contributed over VND 600 billion, equivalent to over USD 28 million, to the community and society through social activities.^[5] Some notable programs are:

• Study and Talent Encouragement Funds: Pham Van Tra Fund (Bac Ninh), Dat To Fund (Phu Tho), Luong The Vinh Fund (Nam Dinh), Nguyen Khac Nghien Fund (Phu Tho), Nguyen Dan Que Fund (Thanh Hoa), Dinh Bo Linh Fund (Ninh Binh) and Chu Van An Fund (Ha Noi). The total sponsorship amounted to over VND 20 billion.

• “Going home” program: LPB has built more than 30 national standardized schools and funded modern facilities for healthcare and education.

• Fund for the poor: LPB has funded over VND 40 billion for the poor in Hau Giang, Can Tho, Quang Ngai and Ben Tre.

• LPB established Xin Man Development Company to solely dedicates to project in helping Xin Man district, Ha Giang province (one of the poorest districts in Northern Vietnam): Until 2012, LPB has funded nearly VND 100 billion for many projects related to public transportation infrastructure, healthcare and education; support the people in the district to earn their living and strengthen trade exchange for Xin Man district.

Since 2010, the Bank has implemented the ”Tam Nong” program which helps reduce lending rates for individuals and enterprises operating in agriculture and rural areas.

Besides, the Bank has committed itself to international standards and norms in corporate social responsibility as those set by Global Compact Network Vietnam (GCNV) and International Finance Corporation (IFC).^[8]

See also

VN Post http://www.vnpost.vn/

Him Lam Joint Stock Company http://www.himlam.com/EN/Himlam.html

References

External links

Official Website:

• English:

• http://www.lienvietpostbank.com.vn/en/about/introduction/content/about-us-111111

• Vietnamese:

• http://www.lienvietpostbank.com.vn/