#1VIETNAM PROSPERITY BANK 9MFY2017 Results - Presentation to Investors and Analysts Oct 2017 VPBank#2AGENDA Overview of VP Bank 9M FY 2017 Performance Strategic plans & targets#3Overview of VP Bank 9M FY 2017 Performance Strategic plans & targets#4VPBANK AT A GLANCE VND 254 trillion total assets Around 4.5 million active customers 9 business segments 2 subsidiaries Full coverage of all banking segments Highly centralized and specialized organization model Over 22,5000 employees 215 branches and 77 SME centers&hubs Over 500 branded ATMs/CDMs, nearly 17,000 linked ATMs OLOLG 000010 LOOLO LOOOLLOO LLOOLOL OLLOOLO 10001011001 1100101010 01101110000111011 DE LOUTOLOLOO! Strong investment in IT systems ✔ Pioneering in digitalization and data management established corporate culture Professional working environment inspired by firmly One of the first bank implementing Basel II End to end credit risk monitoring Strong risk management system with three-lines-of defense 4#5VPBANK AT A GLANCE VPBank Vietnam Prosperity Bank FE CREDIT VAY TIÊU DÙNG TÍN CHẤP Established as Vietnam Joint Stock Commercial Bank for Private Enterprises Renamed Vietnam Prosperity Joint Stock Commercial Bank Engaged McKinsey for overhauling business and operating models 1993 2006 2010 2011 2012 Acquired Vinacomin Finance and renamed VPBank Finance Company Total assets: over VND 229 trillion PBT almost VND 5,000 billion IPO listing 1.64 - million shares on HOSE. Chartered capital: VND 15.706 billion Established two subsidiaries: VPBank Securities and VPBank Asset Management Announced 2012-2017 strategy, focusing on Retail and SME 2013 2014 ☐ Launched Household (Commcredit) and Digital Banking businesses Sold VPBS 2015 2016 Aug 2017 O 5#6FOUR CONSUMER-RELATED PILLARS UNDERLYING BUSINESS GROWTH Consumer-related product VPBANK 5 7 Household Consumer Commercial Digital Corporate and Financial Retail Banking Banking Markets / FI & Finance (FE SME Banking (Comm Credit) Banking (CMB) Banking Services VP Direct Investment Banking credit) Transaction Banking (CIB) Core focus on Includes FE ■Division Targets micro Serves Launched VPBank's retail bank Credit, a standalone formed in July 2015 to companies VPBank's digital banking as a markets separate lending and deposit products and services Key loan products: home loan, auto loan, consumption loan, business loan, UPL, credit card Promote Affluent Banking & Credit Card consumer finance business focusing on the lower to upper mass markets Key products: cash loans, two-wheeler loans, consumer durables loans, credit card target the self- employed mass segment Launched Commcredit to emphasize its focus on serving local communities and SMEs through a network of SME centers Offers a full suite of banking products Won the "Vietnam SME Bank of the Year" award in 20151 corporate customers with annual revenues ranging from VND400bn to VND1,600bn Customers include private and local enterprises as well as medium- scale State- owned enterprises business segment in 2015 to digitize existing banking process and services Offers standard banking products through e- banking system accessible from the web and mobile apps Partnerships with FinTech companies ■Launched in March 2017 Aims to become a digital bank operated to international standards ■ Targets enterprise s with annual revenues above VND1,600 billion capital division performs FX, monetary and bond market transactions Focuses on Handles expandin primarily transaction corporate banking deposits services for and domestic selectively and growing international financial its loan portfolio institutions a#7NETWORK DISTRIBUTION Distribution network - bank branches Established presence throughout Vietnam North: 103 Physical distribution channels Over 22,500 employees 215 branches and 77 SME centers&hubs Over 500 branded ATMs/CDMs, nearly 17,000 linked ATMs North Central coast: 37 Central highlands: 3 Number of Hanoi: 64 Red River Delta: 18 Transaction Transaction Channels points at 31.12.2016 points at 30.9.2017 Sales Staff + sales agents Retail branches 215 215 3,985 SME centers and hubs 72 77 1,088 Household centers 130 236 1,242 (Commcredit) South Central coast: 13 Corporate banking 4 4 123 branches Consumer finance (FE Credit) 8,389 12,606 9,744 ATM/CDM 439/44 477/104 n/a Alternative channels n/a n/a 930 Southeast: 7 Mekong River Delta: 12 Ho Chi Minh City: 45 VPBank's network is organized following a "hub" and "spoke" structure that allows the Bank to cover a wider area and reach more customers 7#8CUSTOMER BASE GROWTH Number of credit cards, active rate and market share (thousands,%) Active customers (thousands) 80.00% 236,964 250,000 67.10% 70.00% 64.40% 62.40% 55.20% 200,000 60.00% 144,285 50.00% 150,000 40.00% 84,066 30.00% 100,000 20.00% 44,569 10.00% 1.90% 2.90% 3.80% 4,565 3,290 2,088 1,305 50,000 635 353 0.00% 2014 2015 Number of cards 2016 Active rate 2017 Market share 2012 2013 2014 2015 2016 Q3/17 Using figures at Bank Spending per active card per month (mil VND) 5.5 4.5 2015 * Using figures at Bank level 8.5 2016 9M 2017 Digital user and online transaction (user,%) 2016 2017 Digital user 296,118 483,760 Transaction online 27% 41% * Using figures at Bank level#9Overview of VP Bank 9M FY 2017 Performance Strategic plans & targets#109M FY 2017 - PERFORMANCE INDICATOR HIGHLIGTS P&L ΤΟΙ NII OPEX Provision expense PBT CAR Cir 36 CAR Basel II Loans to customers 158,696 Q4/16 Q3/17 Vs budget 2016 +22,537 2017 + 14% 181,233 * Including Corporate bonds Total assets 228,771 2016 + 25,076 +11% Q4/16 Q3/17 253,847 9M FY Y-o-Y 2017 growth Budget 2017 Unit: bill VND Progress status 17,575 48% 23,500 75% 14,944 41% 19,013 79% 6,319 33% 8,760 72% 5,620 42% 7,547 74% 5,635 79% 7,192 78% 16.7% 39% 13.5% 60% Deposits from customers 172,438 Q4/16 91% Q3/17 2016 Vs budget 2017 + 19,627 + 11% 87% 192,065 Vs budget 2017 83% NII increased by 41% y-o-y PBT increased 77% CAR under Cir 36 & Basel II improved to 15.7% & 13.5%, much further than the threshold regulated by SBV thanks to the increase at VND 6,4 trillion from IPO Equity multiplier is 9.2%, much lower than others especially state-owned joint-stock banks#11Summary (bil VND) 205,740 36,997 SOLID ASSET GROWTH DYNAMIC 253,847 955 7,757 4,808 Q3 2016 Loans to Securities Interbank Others Q3 2017 customers * Outstanding is calculated as net after provision Asset proportion (bil VND) 18% 253,847 82% Asset growth (bil VND) 23% 248,714 253,847 228,771 229,847 205,740 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Asset mix (%) 9% 8% 8% 10% 3% 4% 4% 2% 26% 25% 24% 24% 23% 62% 62% 65% 64% 65% Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 11 ■Bank ■FE Credit ■Loans to customers Securities Interbank Others#12Summary (bil VND) 23% LOAN PORTFOLIO BREAKDOWN (*) 181,233 By type (bil VND) ■ Bank ■ FE 77% Loan growth (bil VND) 143,098 14,500 27% 14% 176,650 165,821 158,696 140,277 131,002 126,591 181,233 140,028 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 ■Conso Bank By segments (bil VND) + 9,313 Q3 2017 118,886 62,347 49,603 +8% 58,502 + 13,224 Q4 2016 109,573 49,123 +27% ■Secured Unsecured *Including Corporate bonds 100,194 131,630 ■Strategic segments ■ Others Inner circle: Q4 2016 Outer circle: Q3 2017 + 31,436 + 31% - 8,898 - 15% 12#13Funding mix FUNDING MIX Deposit & valuable papers growth (bil VND) 16% 195,443 186,405 192,065 60.7% 63.8% 59.1% 59.4% 172,438 68.8% 165,770 161,955 162,836 150,633 160,706 144,002 23.9% 30.0% 29.9% 21.3% 28.0% 11.6% 6207 9.7% 0.2% 4.4% 3.8% 3.8% 4.7% 5.2% 5.6% Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q3 2016 Q4 2016 ■Customer deposits Valuable paper issued ■Interbank funding Deposits & valuable papers by term and customers at Q3 2017 Q2 2017 Q3 2017 Q1 2017 Conso Bank LDR & Short term funding for mid-long term loans (Bank) 87% 84% 78% 82% 83% 49.2% 38.6% 46% 51% 49% 33.5% 35.3% 29.3% 54% ■ Short term ■Mid& Long term ■ Retail ■ Corporate Q3 2016 Q4 2016 LDR Q1 2017 Q2 2017 Q3 2017 Short term fundings for mid& long-term loans 13#14Number of shares (Million) 1,406 165 STRONG CAPITAL BASE 1,571 Equity and Chartered Capital (Bil VND) 27,624 18,759 19,523 17,178 15,782 15,706 0,765 10,765 9,181 9,181 Sharesbefore IPO Shares raised Shares after IPO Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 ■ Equity ■Chartered Capital Capital Adequacy Ratios Equity multiplier 16.7% 13.2% 13.0 13.3 12.3 12.7 12.0% 12.2% 11.3% 13.5% 9.2 9.5% 10.2% 9.6% 8.5% Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 CAR Cir 36 CAR Basel II 14#15YTD TOI/Vs. Target 2017 (bil VND) 0 17,575 75% YTD/2017 Budget Q1/15 OPEX, Provision expense & PBT over TOI ΤΟΙ TOI (bil VND) 6,277 5,891 9M2016 5,406 5,013 + 5,724 bil 48% 4,176 Q3/17 4,581 3,161 2,069 2,514 2,956 2,101 2,717 2,891 3,013 3,320 Q3 2016 Q4 2016 ■TOI Conso Q1 2017 ■TOI Bank Q2 2017 TOI FE Q3 2017 TOI by segments (bil VND) Q3 2017 37% 26% 37% Q2 2017 38% 39% 23% Q1 2017 33% 31% 36% Q4 2016 37% 27% 36% Q3 2016 47% 16% 38% 0% 20% 40% 60% 80% 100% 120% ■ OPEX Provision expense ■ PBT 1,381 1,044 3,132 4,897 Inner circle: Q3 2016 Outer circle: Q3 2017 ■Strategic Segments ■ Others 15#16Q-o-Q growth NII (bil VND) 42% 3,782 NII + NFI Q-o-Q growth NFI (bil VND) 5,363 4,829 4,753 4,577 213198 2,423 6666 2,162 2,179 1,747 1,994 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 ■Conso Bank NIM 15.2% 15.4% 15.6% 15.0% 13.7% 9.3% 9.3% 9.5% 8.8% 8.1% 5.7% 6.0% 6.2% 6.4% 6.4% 89% 403 328 305 291 267 226 192 199 Q3 2016 Q4 2016 NFI Structure Q1 2017 NFI Conso NFI Bank 9% 16% 5% 70% Q2 2017 Q3 2017 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 -Yields on earning assets Cost of funds NIM ■Payment services ■Insurance service ■Consulting services ■Income from other activities 16#17YTD OPEX/Vs. Target 2017 (Bill VND) Q1/15 Structure OPEX Q-o-Q growth OPEX (bill VND) 17% 2,241 2,281 72% 1,943 9M2016 1,876 1,797 + 1,574 bil + 33% 6,319 YTD/2017 Budget Q3/17 18% ■Salaries and related expenses ■Expenses on assets Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 CIR 47% 37% 38% 36% 33% 10% ■General and administration 12% 60% expenses Other expense Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 17#18YTD Provision Expense/Vs. Target 2017 1,902 74% 3,718 PROVISION EXPENSE 9M2016 + 1,661 bil + 42% Q-o-Q growth (bil VND) 145% 2,310 1,685 1,625 1,353 663 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 ■ Bank ■FE Recovery rate (Life time) NPL, LLR 57% 50% 49% 50% 45% RB 65.57% SME 79.72% 3.09% 2.91% 3.50% 2.81% 3.06% Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 LLR -NPL 18#19YTD PBT/Vs. Target 2017 (bil VND) 78% 9M2016 + 2,490 bil +79% 5,635 YTD/2017 Budget 2,720 2,948 Bank FE ROA, ROE annualized 26.79% 25.75% 21.42% 15.01% PBT 0.88% 1.34% 1.86% 2.49% 2014 2015 2016 Q3 2017 annualized ROE ROA Q-o-Q growth (bil VND) 51% 77% 2,372 1,784 1,924 1,570 1,340 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 PBT Bank and FE (bill VND) 52% 5,635 48% ■Bank FE 19#20VPBank Vietnam Prosperity Bank Overview of VP Bank 9M FY 2017 Performance Strategic plans & targets#21The 2012-17 strategic plan has already been almost fully achieved The detailed plan for 2018-20 will be finalized and announced later in 2017 Key Pillars Organic Growth 2012-17 VISION Top 5 Joint Stock Commercial Bank in Vietnam Top 3 Retailing Joint Stock Commercial Bank in Vietnam Strengthen Internal Capabilities M&A Opportunities Retail banking Consumer finance (FE Credit) Household banking (Commcredit) Digital banking CMB/CIB Risk management, operations and IT Five-point plan to aggressively grow high potential/high income products, explore new channels through strategic partnerships, develop online/mobile applications and enhance customer relationships through higher quality services Remain #1 in consumer finance in Vietnam via the launch of new products and services to suit the evolving demands of customers Expand distribution network and develop relationships with top retailers to expand the business Dedicated business segment created in 2015 to capture the growth of the self-employed family business sector, offering products and services uniquely designed for the segment A core business segment focused on rapid growth in lending, deposits and customers by enhancing sales productivity and launching new products and services to deliver high value to SMEs A focal point of VPBank's retail banking strategy to position the bank as a digital disruptor and provider of optimal and convenient digital banking products and services to customers Focuses on restructuring customer lending portfolios, promoting cross-selling, offering specialized products and optimizing balance sheets VPBank continues to strengthen its risk management systems, credit approval, NPL handling/collection, sales/service systems, human resources development and technology systems to ensure seamless support for growth Strategic Priorities SME 21 21#2217,575 Actual 9M 2017 Unit: Bil VND FORECAST 2017 Indicator Forecast 2017 Budget 2017 Forecast Vs budget ΤΟΙ 24,377 23,500 104% 6,319 5,620 5,635 OPEX 9,444 8,760 108% ΤΟΙ OPEX PROVISION PROVISION PBT 7,694 7,547 102% 181,233 Loans to customers 192,065 Deposits from customers PBT 7,239 7,192 101% Loans to customers 195,078 199,078 98% Deposits from customers 213,599 224,842 95% * Loans to customers including Corporate bonds ** * Deposits from customers of forecast 2017 is lower than the figure of budget 2017 after getting the capital injection from IPO to use funds efficiently#23SUSTAINABLE PROJECTED PROFITABILITY & BALANCE SHEET GROWTH TOI (Billion VND) CAGR = 27% 47,675 38,259 30,363 24,377 Net Profit (Billion VND) CAGR = 34% 8,528 13,973 11,065 17,575 2017F 2018F 2019F 2020F Gross loans to customers (Billion VND) CAGR = 24% 247,486 195,078 181,233 379,965 305,699 5,791 4,501 2017F 2018F 2019F 2020F Total deposits & valuable papers (Billion VND) CAGR = 22% 409,600 336,422 277,559 213,599 192,065 2017F 2018F 2019F 2020F 2017F 2018F 2019F 2020F (*) Including corporate bonds Figures at 30 September 2017 23#24BANCA INSURANCE THE REAL LIFE AIR COMPANY VPBank AIA and VP Bank enter into a 15-year exclusive bancassurance partnership INTEGRATING banking insurance wellness nger, healthier, better lives VPBank AV 24 24#25INVESTMENT HIGHLIGHTS RECAP Best proxy to "consumer" in Vietnam Experienced leadership and strong corporate governance 2 Products The only bank in Vietnam to effectively target the high- potential mass markets with an innovative suite of tailored consumer-related products 7 3 Corporate governance Digitalization 1 Digital pioneer and disruptor The only bank in Vietnam to 6 Customer segmentation 4 successfully centralize the majority of its operations Centralization Risk 5 management Efficient recovery Advanced risk management platform fully integrated across entire business Efficient recovery with disciplined NPL recognition policy 25 25#26GIẢI THƯỞNG QUỐC TẾ 2017 NGÂN HÀNG DÀNH CHO DN SMEs TỐT NHẤT VIỆT NAM Asian Banking and Finance (ABF) NGÂN HÀNG CÓ DỊCH VỤ QUẢN LÝ DÒNG TIỀN TỐT NHẤT CHO DN SMEs Asian Banking and Finance (ABF) THƯƠNG HIỆU NGÂN HÀNG TỐT NHẤT VIỆT NAM Global Brands Magazine (UK) SẢN PHẨM TÀI CHÍNH TIÊU DÙNG TỐT NHẤT CHÂU Á The Asian Banker GIẢI PHÁP TÀI CHÍNH MỚI CỦA NĂM DÀNH CHO HỘ KINH DOANH Finance Digest (UK) SẢN PHẨM TÍN DỤNG TỐT NHẤT CỦA NĂM (SẢN PHẨM THUẾT CỦA COMMCREDIT) Asian Banking and Finance (ABF) VPBank SẢN PHẨM VAY TÍN CHẤP TỐT NHẤT VIỆT NAM The Asian Banker GIẢI PHÁP NGÂN HÀNG SỐ TỐT NHẤT VIỆT NAM The Asian Banker THƯƠNG HIỆU TUYỂN DỤNG HÀNG ĐẦU CHÂU Á Employer Branding Institute & World HRD Congress#27Disclaimer The material in this presentation is general background information about VPBank's activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice when deciding if an investment is appropriate. For further information, visit www.vpbank.com.vn or contact IR team Tel: +8424 3928 8869 Fax: +8424 928 8867 Email: [email protected] 27 27