HDBank*
Com hgt lgi ich cco nhdt
HO CHI MINH CITY DEVELOPMENT JOINT STOCK COMMERCIAL BANK
CONSOLIDATED FINANCIAL STATEMENTS FOR THE SECOND QUARTER OF 2025
For the period from 1 January 2025 to 30 June 2025
TABLE OF CONTENTS
Pages
Consolidated statement of financial position Consolidated statement of profit or loss Consolidated cash flow statement
Notes to the consolidated financial statements
This translation is for informational purpose only, NOT an official version
1 - 4
6 - 7
8 - 52
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At as 30 June 2025
Form B02a/TCTD-HN (issrted under Circular No.
27/2021/TT- NHNN dated 31 December 2021)
Notes | 30 June 2025 VND million | 31 December 2024 VND million | |
ASSETS | |||
Cash and gold | 3,944,656 | 3,105,355 | |
Baiances with the State Bank of Vietnam | 9,728,909 | 26,680,270 | |
Due from and loans to other credit institutions | 132,104,675 | 101,600,254 | |
Due from other credit institutions | 124,358,309 | 94,225,901 | |
Loans to other credit institutions Provision for loans to other credit institutions (*) | 7,746,366 | 7,374,353 | |
Securities held for trading | V.01 | 2,411,264 | 21,955,Y75 |
Securities held for trading Provision for securities held for trading (*) | 2,411,264 | 21,955,775 | |
Derivatives and other financial assets | V.02 | 40,229 | |
Loans to customers | 502,451,955 | 436,606,237 | |
Loans to customers | V 05 | 508,548,842 | 442,484,841 |
Provision for credit losses of loans to customers (") | V04 | (6,096,887) | (5,878,604) |
Purchased debts Purchased debts Provision for credit Tosses of purchased debts (") | |||
Investment securities | V.05 | 71,362,330 | 48,751,284 |
Available-for-safe securities | 67,243,887 | 31,407,524 | |
Held-to-maturity securities | 4,231,266 | 17,436,610 | |
Provision for investment securities (") | (112,823) | (92,850) | |
Long-term investments investments in subsidiaries investments in joint ventures Investments in associates | V.06 | 939,185 821,061 | 857,783 729,739 |
Other long-term investments | 125,666 | 146,546 | |
Provision for long-term investments (') | (7,542) | (18,502) | |
Fixed assets | 1,756,858 | 1,765,927 | |
Tangible fixed assets | 889,163 | 887,455 | |
Cost | 2,057,742 | 1,983,500 | |
Accumulated depreciation (*) | {1,168,579) | (1,096,045) | |
Finance leases Cost Accumulated depreciation (") | |||
Intangible fixed assets | 867, 695 | 878,472 | |
Gost | 1,323,598 | 1,291,428 | |
Accumulated amortisation {*) | (455,903) | (412,956) |
CONSOLIDATED STATEME hT OF FINANCIAL POSITION
At as 30 June 2025
bOfM B02a/TCTD-HN
(issued under Circular No.
27/2021/TT- NHNN dated 31 December 2021)
30 June 2025 | 31 December 2024 | ||
/lobes | VND million | VND mi'lIion | |
Investment properties Cost Accumulated depreciation (*) | |||
Other assets | 59,356,226 | 56,043,573 | |
Receivables | 50,120,428 | 48,316,273 | |
interest and fees receivable | 6,970,426 | 5,383,522 | |
Deferred corporate income tax assets | V.12.2 | 83,309 | 155,916 |
Other assets In which. Goodwill Provision for other assets (") | 2,229,162 (47,099) | 2,234,788 (46,926) | |
TOTAL ASSETS | 784, 96,287 | 697,366,458 | |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At as 30 June 2025
Form B02a/TCTD-HN (issued under Circular No.
27/2021/TT- NHNN dated 31 December 2021)
Notes | 30 June 2025 VND million | 31 December 2024 V/VP million | ||
LlABlLlTlES | ||||
Debts to the Government and State Bank Due to and borrowings from the Government and the State Bank of Vietnam | V.07 | 9,952 9,952 | 15,434 15,434 | |
Transactions for the sale and repurchase of Government bonds with the State Treasury | ||||
Due to and borrowings from other credit institutions | V.08 | 99,269,338 | 99,460,579 | |
Due to other credit institutions | 75,267,930 | 74,877,046 | ||
Borrowings from other credit institutions | 24,001,408 | 24,583, s33 | ||
Due to customers | V.09 | 478,700,229 | 437,505,165 | |
Derivatives and other financial liabilities | V.02 | 18,449 | ||
Grants, entrusted funds and loans exposed to risks | 2,787,202 | 2,788,443 | ||
Valuable papers issued | V.10, 13.2 | 83,686,176 | 81,349,744 | |
Other liabilities | V.11 | 55,017,027 | 19,571,383 | |
Interests and fees payable Deferred corporate income tax liabilities Other payables | V,12,2 | 11,475,643 43,541,384 | 8,01J,166 11,558,217 | |
Other provision (for contingent liabilities and off-balance sheet commitments) | ||||
TOTAL LIABILITIES | 719,469,924 | 640,709,197 | ||
OWNERS* EQUITY | ||||
Capital | 35,224,020 | 35,224,020 | ||
Charter capital | 35,101,423 | 35.101,423 | ||
Fund for capital expenditure | 89 | 89 | ||
Share premium | 535,956 | 535,956 | ||
Treasury shares (*) Preference shares Other owners' capital | (413,448) | (413,448) | ||
Reserves | 8,833,680 | 6,313,Z02 | ||
Foreign exchange differences | (26,977) | |||
Asset revaluation differences | ||||
Retained earnings | 18,145,365 | 12,953,881 | ||
Non-controlling interest | 2,450,275 | 2.166.158 | ||
TOTAL OWNERS* EQUITY | V.13.1 | 64,626,363 | 56,657,261 |
TOTAL LIABILITIES, OWNERS' EQUITY AND NON-CONTROL INTERESTS
784,096,287
697,366,458
OFF-BALANCE SHEET ITEMS | |||
Notes | 30 June 202J VND million | 31 Oecemder 2024 VND million | |
Gredit guarantees | 9,045 | 808,743 | |
Foreign exchange commitments | 300,582,741 | 199,136,079 | |
- Spot foreign exchange commitments - buy | 4,284,979 | 6,816,847 | |
- Spot foreign exchange commitments - sell | 4,395,882 | 8,977,349 | |
Cross currency swap contracts - Future contracts irrevocable lending commitments Letters of credit | 291,901,880 49,598,763 | f83,343,883 46,476,948 | |
Other guarantees | 27,266,669 | 24,924,802 | |
Other commitments Interest income and fee receivables not yet collected | 12,937,948 3,677,692 | 12,364,361 3,336,440 | |
Bad debts written-off | 26,236,856 | 20,134,777 | |
Other assets and documents | 48,647,838 | 47,589,161 | |
TOt0l | 468,957,552 | 354,773,311 | |
Reviewed by:
Ms. Ho Dang Hoang Quyen Mr far» Van
Chief Accountan' z Chief Financial Officerp
G GRAM
Prepared by.
Ms. Huynh Thi Nga Accountant
Ho Chi Minh City, Vietnam 30 July 2025
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
for the period from 1 January 2025 to 30 June 2025
Form B03a/TCTD-HN (issued under Circular No.
27/2021/TT- NHNN dated 31 December 2Q21)
Accumulate form 1st January
Second quarter to end of period
Current period Previous period Current period Previous period
Notes | VNO million | VND million | VND million | VND million | |
interest and similar income | VI.14 | 17,989,705 | 14,245,165 | 32,981,425 | 28,624,094 |
interest and similar expenses | VI 15 | (8,170,547) | {6,525,287) | {15,754,167) | (13,743,866) |
Net interest and similar income | 9,819,158 | 7,719,878 | 17,227,258 | 14,880,228 | |
Fee and commission income | 1,874,020 | 876,036 | 3,051,259 | 1,388,483 | |
Fee and commission expenses | (542,460) | (651,467) | (986,409) | (807,152) | |
Net fee and commission income Het gain from trading of foreign currencies | 1,331,550 423,977 | 224,569 310,407 | 2,064,850 612,218 | 581,331 485,293 | |
Xet gain/(loss) from securities held for trading | VT.16 | 241,355 | (279) | 630,635 | (78,943) |
Net {loss)/gain from investment securities | VI.17 | 19,526 | {49,917) | 2,782 | 15,434 |
Other operating income | (211,628) | 140,389 | 348,533 | 248.077 | |
Other operating expenses Net gain from other operating activities | (60.710) (272,338) | (52,031) 88,358 | (142,054) 206,479 | {86,339) 161,738 | |
Income from investments in other entities | VI.18 | 72,649 | 96,218 | ||
Operating expenses Xet operating profit before provision for credit losses | VI.19 | (2,782,029) 8,853,858 | (3,029,780) 5,263,236 | (5,306,552) 15,533,888 | (5,484,419) 10,560,662 |
Provision expenses for credit iosses | (4,141,072) | (1,126,231) | {5,465,867) | (2,396,082) | |
Profit before tax Current corporate income tax expense | 4,712,786 (1,015,345) | 4,137,005 (879,466) | 10,068,021 (1,961,683) | 8,164,580 (1,687,603) | |
Deferred corporate income tax expense | (21,382) | (5,687) | (72,607) | {11,953) | |
Corporate income tax expenses | (1,036,727) | (885,153) | (2,034,290) | (1,699,556) | |
Profit after tax | 3,676,05s | 3,251,852 | 8,O33,z31 | g,4s5,024 | |
in which. Common shareholders of the Bank | 3,514,860 | 3,114,89 f | 7,749,614 | 6,224,663 | |
Non-controlling interest Basis earning per share (VND/share) | 161,199 | 136,961 | 284,117 2,217 | 240,361 1,775 |
Prepared by. Reviewed by:
Ms. Huynh Thi Nga Ms. Ho Dang Hoang Quyen Mr. Pham Van Dau" " . ‹'..'. "-
Accountant Chief Accountants Chief Financial Officer p é LONG GRAM Doc Ho Chi Minh City, Vietnam
30 July 2025
CONSOLIDATED CASH FLOW STATEMENT
for the period from 1 January 2025 to 30 June 2025
Form B04a/TGTD-HN (issued under Circular No.
27/2021/TT- NHNN dated 31 December 2021)
Current period | Previous period VND million | |||
Cash flows from operating activities Interest income and similar receipts | 31,417,309 | 27,792,677 | ||
Interest expenses and similar payments | (12,363,452) | (16,541,782) | ||
Net fee and commission receipts Net receipts from trading of securities, and foreign currencies | gold | 1,941,204 1,266,274 | 762,260 902,425 | |
Other income | 48,967 | 37,314 | ||
Recoveries from bad debts written-off previously Payments to employees and other operating expenses | 197,76d (5,795,468) | 1d5,757 (5,053,370) | ||
Corporate income tax paid during the period | V.12.1 | {1,872,172) | (2,629,502) | |
Net cash flows from operating profit before changes in operating assets and liabilities | 14,840,428 | 5,435,Y79 | ||
Changes in operar/ng assets (increase)/decrease in due from and loans to other credit institutions | {372,013) | 928,621 | ||
(increase)/decrease in trading securities (lncrease)/decrease in derivatives and other financial assets | (16,326,016) (40,229) | 9,996,806 (271,013) | ||
(increase)/decrease in loans to customers Utilization of provision to write-off loans to customers, securities and long-term investments | (66,064,001) (5,256,584) | (42,782,442) (1,683,521) | ||
(Increase)/decrease in other assets | (1,647,809) | (3,907,349) | ||
Changes in operating liabilities Increase/(decrease) in due to Government and the State Bank of Vietnam | (5,482) | (5,612) | ||
increase/{decrease) in due to and borrowings from other credit institutions | (191,241) | 6,600,436 | ||
Increase/(decrease) in due to customers | 41,195,064 | 15,795,455 | ||
Increase/(decrease) in valuable papers issued Increase/(decrease) in grants, entrusted funds and loans exposed to risks | 2,336,432 (1,241) | (6,345,492) 45.349 | ||
Increase/(decrease) in derivatives and other financial liabilities | (18,449) | - | ||
Increase/(decrease) in other liabilities | 32,451,039 | 2,956,939 | ||
Utilization of funds | (17,652) | (1,493) | ||
Net cash used in operating activities | 882,246 | (13,237,537) | ||
6
CONSOLIDATED CASH FLOW STATEMENT
for the period from 1 January 2025 to 30 June 2025
Form B04a/TCTD-HN (issued under Circular No.
27/2021/TT- NHNN dated 31 December 2021)
Cash flows from investing activities
/Votes
Current period Previous period VND million VND million
Purchase of fixed assets
Proceeds from disposal of fixed assets Payment for disposal of fixed assets Purchase of investment properties
Proceeds from disposal of investment properties Payment for disposal of investment properties Payments for investments in other entities Proceeds from disposal of investments in other entities
(111,421)
724
20,880
(207,524)
1,019
(657,639)
14,375
Dividends received from long-term investments 4,896
Net cash from investing activities _ (84.921) Cash flows from financing activities
Increase in charter capital from capital contribution and share issuance
Proceeds from issuing long term valuable papers eligible to be included in capital and other long-term borrowings
Proceeds from disposals of long-term valuable papers eligible to be included in capital and other long-term borrowings
Dividends distributed to shareholders Purchase of treasury shares
Proceeds from disposal of treasury shares Net cash from financing activities
(849,769)
Het cash flows for the period
Cash and cash equivalents at the beginning of the period
Foreign exchange cfifference
Cash and cash equivalents at the end of the
period
Reviewed by
Prepared by.
797,325 (14,087,306)
137,261,526 132,411,767
(25 97/) {28,143)
138,031,874 118,296,318
Ms. Huynh Thi Nga | Ms. Ho Dang Hoang Quyen " Mr. Pham Van n ,• | " | " | |
Accountant | Chief Accountant " .V Chief Financial Off??°ci |
Ho Chi Minh City, Vietnam 30 July 2025
PH0 TONG GtAf/I DOC
NOTES TO THE CONSOLl DATED FINANGtAL STATEMENT
for the period from 1 January 2025 to 30 June 2025
Form B0Sa/TCTD-HN (issued under Circulaf No.
27/2021/TT- NHNN dated 31 December 2021)
GENERAL INFORMATION
Establishment and Operations, Term of operation
Ho Chi Minh City Development Joint Stock Commercial Bank ("the Bank") is a joint stock commercial bank iDCorporated in the Socialist Republic of Vietnam.
The Bank was established and operates in accordance with Decision No. 47/QD-UB issued by the People's Commi'.tee of Ho Chi Minh City on 11 February 1989 and initial Banking License No. 00019/NH-GP issued by the State Bank of Vietnam ("the SBV") on 6 June 1992 and replaced by Banking License No.26/GP-NHNN issued by the State Bank of Vietnam on 12 February 2020 and Decisions amending and supplementing the Establishment and Operation License No.26/GP-NHNN on 12 February 2020. The operation term of the Bank is 99 years from the date of the first license.
The Bank's principal activities are to provide banking services including mobilizing and receiving short, medium and long-term deposits from organizations and individuals; making shon, medium and long-term loans to organizations and individuals based on the nature and capability of the Bank's capital resources; conducting foreign currency transactions, providing international trade finance services, discounting of commercial notes, bonds and valuable papers; settlement services and other banking services as allowed by the SBV.
Charter capital
The charter capital of the Bank as at 30 June 2025 is VND35,101,423 million (as at 31 December 2024: VND35,101,423 million).
The Board of Directors
The members of the Board of Directors of the Bank during the period and at the date of this report are:
/lame
Mr. Kim ByoungHo
Position
Chairman, Independent Member
Date of appointment/re-appointment/Resignation
Appointment on 29 April 2022
Ms. Nguyen Thi Phucng Thao Standing Vice Chairwoman Re-appointment on 29 April 2022 Mr. Luu Duc Khanh Vice Chairman Re-appointment on 29 April 2022 Mr. Nguyen Thanh Do Vice Chairman Re-appointment on 29 April 2022 Mr. Nguyen Huu Dang Vice Chairman Resignation on 08 January 2025 Mr. Pham Quoc Thanh Vice Chairman Appointment on 13 May 2025 Mr. Le Manh Dung independent Member Appointment on 29 April 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT
for the period from 1 January 2025 to 30 June 2025
Form B05a/TCTD-HN (issued under Circular No.
27/202 I/TT- NHNN dated 31 December 2021)
The Board of Management, Chief Financial Officer and Chief Accountant
The members of the Board of Management, Chief Financial Officer and Chief Accountant of the Bank during the period and at the date of this report are.
Name Position
Date of appointment/re-
appointment/ Resi0nalion
Mr. Nguyen Huu Dang
Mr. Pham Quoc Thanh Mr. Nguyen Minh Due Mr. Le Thanh Tung
Mr. Nguyen Van Hao Mr. Nguyen Dang Thanh
Mr. Tran Hoai Nam Mr. Tran Thai Hoa
Mr. Nguyen Canh Vinh Mr. Tran Xuan Huy
Mr. Pham Van Dau
Ms. Ho Dang Hoang Quyen
Operation network
General Director
Acting General Director Deputy General Director Deputy General Director Deputy General Director Deputy General Director Standing Deputy General Director
Deputy General Director Deputy General Director Deputy General Director Chief Financial Officer Chief Accountant
Appointed on 13 May 2025
Resignation on 13 May 2025
Re-appointed on 1 August 2022
Resignation on 01 June 2025
Re-appointed on 2 October 2023
Resignation on 01 June 2025
Re-appointed on 27 February 2025
Re-appointed on 26 May 2024
Resignation on 06 June 2025
designation on 15 January 2025
Appointed on 16 September 2009
Appointed on 7 July 2011
The Bank's Head Office is located at HD Tower, 25 BiS Nguyen Th‹ Minh Khai Street, Ben Nghe Ward, District 1, Ho Chi Minh City. As at 30 June 2025, the Bank had one (1) Head Office, one
{1) representative office in the North, one (1) representative office in Myanmar, eighty-seven (87) branches and two hundred and eighty-eight (288) transaction offices located in cities and provinces throughout Vietnam.
Subsidiary
As at 30 June 2025, the Bank had two (2) subsidiary:
Subsidiary
Operating License No.
Nature of business
Ownership of lhe Bank
HD SAISON Finance Co., Ltd. ("HD SAiSON"),
previously known as Ho Chi Minh City Development Joint Stock Commercial Bank Finance Go , Ltd
0304990133 dated 13 July 2007 issued by Ho Chi Minh city Department of Planning and investment, amended for sixteenth (16) time on 20 June
2022
Finance/ Banking
50%
Vikki Digital Bank Limited
{Vikki Bank) (*)
Decision No. 0009/NH-CP dated 27 March 1992 issued by the State Bank of Vietnam ("the SBV"). Enterprise code: 0301442379, first registered on 8 April 1992, issued by Ho Chi Minh city Department of Planning and Investment.
Finance/ Banking
100%
(*) On 17 January 2025, the State Bank of Vietnam ("the SBV") announced Decision No. 116/QO-NHNN of Governor of SBV regarding the mandatory transfer of Dong A Commercial Joint Stock Bank to the Bank. After the mandatory transfer, Dong A Commercial Joint Stock Bank operates as a single-member limited liability company owned by the Bank, under the name Dong A One-Member Limited Liability 8ank and was renamed to Vikki Digital Bank Limited according to Decision No. 42/QO-TTGSNH2 dated 14 February 2025,
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT
for the period from 1 January 2025 to 30 June 2025
Form B05a/TCTD-HN (issued under Circular No.
27/2021/TT- NHNN dated 31 December 2021)
In addition, according to Point C, Clause 1, Article 185 of the Law on Gredit Institutions No, 32/2024/QH15 dated 18 January 2024, the Bank is not required to consolidate the financial statements of the mandatory transferred commercial bank. Accordingly, the Bank's consolidated financial statements for the period ended 30 June 2025 include the Bank and its subsidiaries, excluding Vikki Bank.
Employees
The Bank and its subsidiary's total number of employees as at 30 June 2025 was 18,380 persons (as at 31 December 2024 was 18,533 persons).
ACCOUNTING PERJOD AND ACCOUNTING CURRENCY
Accounting period
The Bank and its subsidiary's fiscal year starts on 1 January and ends on 31 December.
The first quarter accounting period applicable for the presentation of consolidated financial statements of the Bank and its subsidiary's starts on 1 April and ends on 30 June.
Accounting currency
The Bank and its subsidiary's accounting currency is Vietnam dong ("VND" or "Dong"). The consolidated financial statements are prepared and presented in VND, rounded to the nearest million ("VND million"). The Bank and its subsidiary determine its accounting currency in accordance with Vietnamese Accounting Standards, Vietnamese Accounting System and applicable regulations.
Ill, 1
APPLIED ACCOUNTING STANDARDS AND SYSTEM
Statement of compliance
The Board of Management of the Bank confirms that the accompanying consolidated financial statements have been prepared in accordance with Vietnamese Accounting Standards, Vietnamese Accounting System for Credit Institutions and other statutory requirements relevant to preparation and presentation of the consolidated financial statements.
Basis of preparation of consolidated financial statements
The consolidated financial statements have been prepared in accordance with Vietnamese Accounting Standards, Vietnamese Accounting System for Credit Institutions and other statutory requirements relevant to preparation and presentation of the consolidated financial statements applicable to credit institutions operating in Vietnam. The consolidated financial statements have been prepared under the historical cost convention.
The accompanying consolidated financial statements are not intended to present the consolidated financial position, consolidated results of operations and consolidated cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Vietnam. The accounting principles and practices utilised in Vietnam may differ from those generally accepted in countries and jurisdictions other than Vietnam.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT
for the period from 1 January 2025 to 30 June 2025
Form B05a/TCTD-HN (issued under Circular No.
27/2021/TT- NHNN dated 31 December 2021)
Assumptions and uses of estimates
The preparation of the consolidated financial statements is in accordance with Vietnamese Accounting Standards, Vietnamese Accounting System and applicable regulations on preparation and presentation of consolidated financial statements applicable to credit institutions operating in Vietnam require the Board of Management make estimates and assumptions that affect the the reported amount of assets and liabilities and disclosure of contingent liabilities and contingent assets at the end of period, such as income and expense amount during the accounting period.
Estimates and assumptions that have a material effect on the consolidated financial statements include:
Classification and provision for cfedit losses of loans to customers,
Estimates and assumptions are regularly evaluated based on past experience and other factors, including future assumptions that have a material effect on the Bank and its subsidiary's consoldiated financial statements and considered by the Board of Management to be fair.
Basis of consolidation
The consolidated financial statements include the financial statements of HDBank and the financial statements of its subsidiary (HDSaison Finance Company Limited).
The financial statements of the subsidiary used for consolidation are prepared for the same reporting period as the parent bank, using consistent accounting policies.
IV. SUMMARY OF SIGNIFICAHT ACCOUHTIHG POLICIES
1 Foreign currency transactions
API transactions are recorded in original currencies. Transactions arising in foreign currencies are translated at exchange rates prevailing at the transaction dates. Monetary assets and liabilities denominated in foreign currencies at month end are translated at the exchange rate prevailing at the month end date. Foreign exchange differences arising from these translations are recognised in the foreign exchange differences item in the consolidated statement of financial position at month end and transferred to the consolidated income statement at year end.
Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Bank. The control exits when the Bank has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. tn assessing the control, potential voting rights that presently are exercisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that the control commences until the date that the control ceases.
Inter-company balances, transactions and profit/loss on transactions between those subsidiaries and the Bank are eliminated in full in the consolidated financial statements. The accounting policies of subsidiaries have been changed if necessary to ensure the consistency with the policies adopted by the Bank.
NOTES TO THE CONSOLIDATED FlNANCtAL STATEMENT
for the period from 1 January 2025 to 30 June 2025
Form B05a/TCTD-HN (issued under Circular No.
27/2021/TT- NHNN dated 31 December 2021)
Non-controlling transactions and interests
The Bank and its subsidiary apply a policy for transactions with non-controlling interests as transactions with external parties to the Group. Non-controlling interests ("NCP") are measured at their proportionate share of the acquiree's identifiable net assets at date of acquisition.
A divestment of the Bank's interest in a subsidiary that does not result in a loss of control is accounted for as a transaction with owners. The difference between the change in the Bank's share of net assets of the subsidiary and any consideration paid or received from divestment of the Bank's interest in the subsidiary is recorded directly in the undistributed earnings under equity.
In a divestment of the Bank's interest in a subsidiary that result in a loss of control, the difference between the Bank's share in the net assets of the subsidiary and the net proceeds from divestment Is recognised in the consolidated income statement. The retained interest in the entity will be accounted for as either an investment in another entity or an investment to be accounted for as equity since the divestment date.
Associate
Associate company is a company in which the Bank has significant influence but does not control, typically represented by holding 20% to 50% of the voting rights in that company. Investments in associate companies are accounted for using the equity method and initially recognized at cost.
The Bank's share of the results of operations of the associate company is recognized in the Bank's consolidated income statement. Cumulative changes after the investment in the associate company are adjusted to the carrying amount of the investment. When the Bank's share of the losses of the associate company equals or exceeds the carrying amount of the investment, the Bank does not continue to recognize further losses in the consolidated financial statements unless the Bank has an obligation to make payments on behalf of the associate company for debts that the Bank has guaranteed or committed to pay. !n such cases, the value of the investment presented in the financial statements is zero (0). If the associate company subsequently becomes profitable, the Bank recognizes its share of the profits only after offsetting the previously unrecognized net losses.
The accounting policies of the associate company are adjusted when necessary to ensure consistency with the accounting policies adopted by the Bank and its subsidiaries.
-
Derivatives and hedging accounting
Derivatives are recognised in the consolidated statement of financial position at contract value on the contract date and subsequently are revalued at the rate of exchange prevailing at the month end. Realised gains or losses are recognised in the consolidated income statement. Unrealised gains or losses are recognised in the fofeign exchange differences item in the consolidated statement of financial position at the month end and are transferred to the income statement at the year end
income and expenses recognition
Interest income
Interest income is recognised in the consolidated income statement on an accrual basis, over time and at effective interest rate for each period when two conditions are simultaneously satisfied: (i) it is probable that the economic benefits associated with the transaction will ftow to the Bank, and (ii} the amount of interest income can be measured reliably. Accrued interest income is derecognised and recognised into off-statement of financial position when a loan is not classified as Current loan or is sub ect to the application of Circular 03/2021, Circular 14/2021 or the application of Circular 02/2023 and Circular 06/2024, interest income from these loans is recognised in the consolidated income statement upon receipts.
NOTES TO THE GONSOLtDATED FINANCIAL STATEMENT
for the period from 1 January 2025 to 30 June 2025
Form B05a/TCTO-HN (issued under Circular No.
27/2021/TT- NHNN dated 31 December 2021)
Other income from credi't activities
Other income from credit activities primarily comprises fees such as loan withdrawal commitment fees, standby credit I‹mit fees, early repayment fees, and other fees associated with credit activities, which is recognised when the completion of the work as per the agreed-upon work under the contract/agreement can be reliably determined at the date of preparation of the consolidated financial statements.
Fee and commission income
Fee and commission' income comprises fee income from insurance agency services. bonds services, settlement services, treasury services and other services that are recognised on an accrual basis in the consolidated income statement when the services rendered, by reference to completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided Fee and commission income is only recognised when a\ four (4) of the following conditions are satisfied:
The amount of income can be measured reliably;
It is probable that the economic benefits associated with the transaction will flow to the Bank;
The percentage of completion of the transaction at the statement of financial position date can be measured reliably; and
The costs incurred for the transaction and the costs to complete the transaction can be measured reliably.
Income from investing activities
Gain and loss from investment securities is determined based on the difference between the selling price and the cost of such securities.
Dividend income
Cash dividend income is recognised when the Bank establishes the right to receive dividend from investees and when it is probable that economic benefits associated with the transaction will flow to the Bank and income can be measured reliably. Stock dividends and bonus shares received are not recognised as income of the Bank, but only the number of shares is updated.
Other income
Other income is recognised on an accrual basis, by reference to completion level of services.
According to Circular'16/2018/TT-BTC dated 7 February 2018 issued by the Ministry of Finance, receivables which have been accounted as income but then are assessed as uncollectible or can not be collected by due date, the Bank and its subsidiary shall revert such income if it is in the same financial year, or recognise as an expense if it is not in the same financial year and monitor these receivables in off-statement of financial position items for subsequent collection. The Bank and its subsidiary shall recognise these receivables as income in the consolidated income statement upon receipt.
/n/eres/ expenses
Interest expenses are recognised in the consolidated income statement on an accrual basis.
NOTES TO THE CONSOLE DATED FINANCIAL STATEMENT
for the period from 1 January 2025 to 30 June 2025
Form B05afTGTD-HN (issued under Circular No.
27/2021/TT- NHNN dated 31 December 2021)
Acccounting for loans to customers and purchased de6ts
Accounting for loans to customers Measurement and recognition of loans to customers
Short-term loans are loans with term of less than one year from the date of disbursement. Medium-term loans have term of one to five years from the date of disbursement. Long-term loans are loans with term of over 5 years from the date of disbursement.
Loans to customers are stated at amount of principal outstanding less provision for credit losses.
According to the Law on Credit Institutions No. 32/2024/QH15 issued by the National Assembly on 18 January 2024 and Circular 21/2024/TT-NHNN issued by SBV on 28 June 2024 regulating letters of credit ("L/C") operations and other business activities relating to L/G, from 1 July 2024, L/C operation is defined as a form of credit granting through the issuance, confirmation, payment negotiation and repayment of L/C. The Bank has made appropriate accounting recognition in accordance with these regulations.
Classification of loans to customers
Before 1 July 202+., loans classification and provisions for credit losses were made in accordance with Circular 11
From 1 July 2024, debt classification, including customer loans, debts arising from the issuance of L/C, payment negotiation of L/C, and repayment of L/C (collectively referred to as "debts"), was made in accordance with Circular 31; and provisioning for credit risks was made in accordance with Decree 86.
According to Circular 31, loans to customers are classified into five debt groups:
Classification of loans using the quantitative method Group 1. Current loans
Current loans are assessed as fully and timely recoverable for both principals and interests,
OF
Loans are overdue for a period of tess than 10 days and assessed as fully recoverable for both overdue principals and interests, and fully and timely recoverable for both remaining principals and interests, or
{iii) Loans classified into group 1 as meeting criteria to be classified into groups with lower level of risk.
Group 2: Special mentioned loans
Loans are overdue up to 90 days; except those specified in point (ii) of Current loans and those classified into a group with higher level of risk as prescribed, or
Loans rescheduled for the first time and repaid on schedule, except those meeting criteria to be classified into a group with lower of risk and those classified into a group with higher level of risk"as prescribed.
{iii) Loans classified into group 2 as meeting criteria to be classified into a group with lower level of risk or loans classified into group with higher level of risk as prescribed.
Group 3: Sub-standard loans
Loans overdue between 91 days and 180 days, except those classified into a group with higher level of risk as prescribed by regulations; Or
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT
for the period from 1 January 2025 to 30 June 2025
Form B05a/TCTD-HN (issued under Circular No.
27/2021/TT- NHNN dated 31 December 2021)
Loans are extended for the first time and repaid on schedule, except those meeting criteria to be classified into a proup with lower level of risk and or loans classified into a group with higher level of risk as prescribed by regulations, or
Loans are exempted or reduced interests because customers are not able to pay the interests according to credit contracts, except those ctasstfied into a group with higher level,
Loans falling in one of these following cases that have not yet been collected within less than 30 days from the issuance date of debt collection decision:
Loans violating regulations specified in clauses 1, 3, 4, 5, 6 of Article 134 of Law on Credit lnstitutions No. 32/2024/QH15 (from 1 July 2024) or according to clauses 1, 3, 4, 5, 6 of Article 126 of Law on Credit Institutions No. 47/2010/QH12 (before 1 July
2024); or
Loans violating regulations specified in clauses 1, 2, 3, 4 of Article 135 of Law on credit institutions No. 32/2024/QH15 (from 1 July 2024) or according to clauses 1, 2, 3, 4 of Article 127 of Law on credit institutions No. 47/2010/QH12 (before 1 July 2024), or
Loans violating regulations specified in clauses 1, 2, 5, 9 of Article 136 of Law on credit institutions No. 32/2024/QH15 (from 1 July 2024) or according to clauses 1, 2, 5 of Article 128 of Law on credit institutions No. 47/2010/QH12 (before 1 July 2024).
Loans in the collection process under inspection conclusions; or
Loans collected under premature debt collection decisions by the Bank and its subsidiary due to customers' breach of agreements without being collected within less than 30 days from the issuance date of debt collection decision; or
Loans are classified into group 3 as meeting criteria to be classified into a group with lower level of risk or loans classified into a group with higher level of risk as prescribed by regulations; or
{viii) Loans must be classified into group 3 according to requirements of SBV due to risk level of the loan based on the results of inspection, supervision, and relevant credit information.
Group 4: Doubtful loans
(i) Loans overdue between 181 days to 360 days, except those classified into a group with higher level of risk as prescribed by regulations; or
{ii) Loans are restructured for the first time and overdue less than 90 days according to the first restructured payment term, except those classified into a group with higher level of risk as prescribed by regulations, or
Loans are restructured for the second time and undue, except those meeting criteria to be classified into a group with lower level of risk or classified into a group with higher level of risk as prescribed by regulations; or
Loans are specified in point (iv) of Sub-standard loans remain uncollected for a period of 30 to 60 days from the issuance date of debt collection decision, or
Loans in the collection process under inspection conclusions but being overdue up to 60 days according to inspection conclusions; or.
via Loans recovered under premature debt collection decisions of the Bank and its subsidiary due to customers violating the agreement which remain uncollected for a period of 30 to 60 days from the issuance date of debt collection decisions, or
1$
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT
for the period from 1 January 2025 to 30 June 2025
Form B0Sa/TCTD-HN (issued under Circular No.
27/2021/TT- NHNN dated 31 December 2021)
{vii) Loans that are classified into group 4 as meeting criteria to be classified into a group with lower level of risk or classified into a group with higher level of risk as prescribed by regulations; or
Loans that are classified into group 4 according to requirements of SBV due to risk level of the loan based on the results of inspection, supervision, and relevant credit information.
Group 5: Loss loans
Loans overdue more than 360 days, or
Loans are restructured for the first time and overdue ffom 91 days according to the first restructured terms of repayments; or
(ui) Loans are restructured for the second time and overdue according to the second restructured terms of repayments, or
{iv) Loans are restructured for the third time or more, except those meeting criteria to be classified into a group with tower level of risk; or
Loans specified in point (iv) of Sub-standard loans which remain uncollected for more than 60 days from the issuance date of collection decision; or
Loans in the collection process under inspection conclusions but being overdue for more than 60 days according to inspection conclusions, or
Loans recovered under premature debt collection decisions of the Bank and its subsidiary due to customers violating the agreement which remain uncollected for more than 60 days from the issuance date of debt collection decis on, or
Loans to other credit institutions announced under special control status, or to foreign bank's bfanches of n'hich capital and assets are blockaded; or
Loans that are classified into group 5 as meeting criteria to be classified into a group with higher level of risk as prescribed by regulations; or
Loans that are classified into group 5 according to requirements of SBV due to risk level of the loan based on the results of inspection, supervision, and relevant credit information.
Classification of loans using the qualitative method
Group 1 (Current loans), including: Loans of which both principal and interest are rated by the bank or non-bank credit institution to be recoverable in full by due dates.
Group 2 (Special mentioned loans), including: Loans with the principal and interest that are likely to be recovered in full, but customers showing s gns of decrease in ability to pay according to the evaluation of the bank or non-bank credit institution.
Group 3 (Sub-standard loans), including: Loans with the principal and interest that are unlikely to be recovered by due dates according to the evaluation of the bank or non-bank credit institution. These loans are rated by the bank or non-bank credit institution as those likely to cause ioss
Group 4 (Doubtful loans), including: Loans which are rated by the bank or non-bank credit institution as those posing high risk of causing toss.
Group S (Loss loans), including. Loans which are rated by the bank or non-bank credit institution as those unlikely to be recovered and posing risk of causing loss.
Loans shall be classified in a group with lower level of risk (including Group 1) in these following
cases.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT
for the period from 1 January 2025 to 30 June 2025
Form B05aJCTD-HN
(issued under Circular No.
27/2021/TT- NHNN dated 31 December 2021)
Overdue loans.
Customers fully paid overdue principal and interest (including interest on overdue principals) and principals, interest of following payment schedules (if any) for at least 3 (three) months in respect of medium and long-term loans and 1 {one) month in respect of short-term loans since the date overdue principals and interest are fully repaid; and
The Bank and its subsidiary have sufficient basis of information and documents to assess and conclude that customers are capable of fully repaying principals and interest in a timely manner.
Restructured loans
CustomerS fully paid principal and interest under restructuring (if any), for at least 3 (three) months in respect of medium and long-term loans and 1 (one) month in respect of short-term loans, since the date principal and interest under restructuring are fully paid; or from the commence date of full repayment of such principal and interest in cases where the repayment schedules for principal and interest are congruent;
The Bank and its subsidiary have sufficient basis of information and documents to assess and conclude that customers are capable of fully repaying principals and interest in a timely manner.
Loans shall be classified in a group with higher level of risk these following cases.
Norms on profitability, solvency, ratio of debts to capital, cash flows leading to capability of customers to repay debts deteriorating continuously for 3 consecutive times of assessment or loan classification, or
Customers fail to supply fully, timely and truly financial information at the request of the Bank and its subsidiary to assess debt repayment capability of customers; or
Loans which are classified in Group 2, Group 3, Group 4 for 1 (one) year or longer but not qualified to classify ‹n a group with Tower level o( risk; or
Loans whose credit extension is administratively sanctioned Non-performing loans are loans classified into Group 3, 4 and 5.
The Bank and its subsidiary are required to use the results of loan classification as provided by the Credit Information Center of the SBV {"CIC") to classify its loans to customers into a group with higher level of risk between the group assessed by the Bank and its subsidiary and the group provided by the CIG.
When a customer owes more than one loan to the Bank, and has any loan classified into a group with higher level of risk, the Bank classifies the remaining loans of such customer into the loan group with highest Ie 'el of risk.
When the Bank and its subsidiary participate in a syndicated loan, the Bank and its subsidiary reclassify all loans (including the outstanding syndicated loan) of the customer into the group with the highest level of rusk as determined by the tenders.
Classification of payments for off-balance sheet commitments
Payments under off-balance sheet commitments are amounts that the Bank and its subsidiary settled on behalf of customers when customers who are guaranteed by the Bank and its subsidiary are not able to settle the amount when it falls due.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT
for the period from 1 January 2025 to 30 June 2025
Form B05a/TCTD-HN (issued under Circular No.
27/2021/TT- NHNN dated 31 December 2021)
According to Circulaf 31, off-balance sheet commitments are classified as follows Group 3. Sub-standard - If overdue for less than 30 days.
Group 4: Doubtful - If overdue from 30 days and tess than 90 days;
Group 5: Loss - if overdue for 90 days or more.
If the payment under off-balance sheet commitment is classified in a group with lower level of risk than a group in which the off-balance sheet commitment is classified, the Bank and its subsidiary must reclassify the payment into the same group of the off-balance sheet commitment.
Provision for losses on loans fo customers
Provision for losses on loans to customers includes specific provisions and general provisions.
S,'› I c. •! sinns
Specific provisions for losses on loans to customers are calculated using set rates applied to each loan group as follows.
Provision rate
Group 1 Current loans 0°/
Group 2 Special-mentioned loans 5%
Group 3 - Sub-standard loans 20o/o
Group 4 - Doubtful loans 50%
Group 5 - Loss loans 100%
Specific provisions are calculated based on customer's loan balances on the last working day of each month less the discounted value of collateral assets.
According to Decree 86, the maximum discount rate for each type of collateral asset is determined as follows:
Type of collateral assets
Deoosit_ ce icates of deposit in VND at the Bank
Government bonds, gold billets in accordance with law on gold trading activities; deposit, certificate of deposit in foreign currencies at the Bank.
Municipal bonds, Government-guaranteed bonds; transferable instrumentst I" bonds issued by the Bank; deposit, certificate of deposit issued by other credit institutions, foreign bank branches:
With a remaining term of less than 1 year
With a remaining term of between 1 year to 5 years
With a remaining term of over 5 years
Securities issued by other credit institutions and listed on a stock exchange.(v) Securities issued by enterprises (except credit institutions) and listed on a
stock exchange.
{vi) Unlisted securities and valuable papers, except for types of securities specified in (iii), issued by other credit institutions registered for listing on a stock exchange,
Unlisted securities and valuable papers, except for the types of securities specified in (ui), issued by other credit institutions not registered for listing on
a stock exchanae
Maximum
discountedratio,
100%
95%
95%
85%
80%
70%
65%
50%
30%
(vii)
n ed c
s
suot ea hanae
able papers issued by enterprises registered for
30%
Unlisted securities and valuable papers issued by enterprises not registered for listing on a stock exchange
i 10%
Real estates
50%
Others
30%
Collateral assets are movable properties, real estates and collaterals other than gold billets, Government bonds listed on Stock Exchanges, securities issued by enterprises or other credit institutions with a value above VND50 billion for loans to customers who are related parties of the Bank and other entitles as prescribed in Article 135 of the Law on Credit Institutions 2024 and collateral assets with a value for deduction above VND200 billion must be valued by external valuers. For other cases, collateral assets are valued according to the Bank's internal regulations and procedures.
Any collateral asset that does not fully satisfy the conditions specified in Article 4, Clause 4, Clause 5 of Decree 86 (before 11 July 2024: apply Article 12, Clause 3 of Circular 11) shall have its value considered as zero.
According to Decree 86, the amount of general provision is determined by 0.75% of the total outstanding balance of debts classified from group 1 to group 4.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT
for the period from 1 January 2025 to 30 June 2025
Form B05a/TCTD-HN (issued under Circular No.
27/2021/TT- NHNN dated 31 December 2021)
Write-off bad debts
Bad debts could be written-ofi using provisions in the following cases:
Customer is an organization, which is dissolved, goes bankrupt as prescribed by law or an individual who dies or is missing; or
Debts which are classified in group 5.
For at least 5 (five) years. after using provisions against credit risks and after all measures for debt recovery of the Bank and its subsidiary's Credit Committee have been implemented but debts are still irrevocable, the Bank and its subsidiary shall be entitled to release the unsettled debts from the off-balance sheet in accordance with the approval of the General Meeting of Shareholders.
Loan restructuring, exemption or reduction of interest, fees and retention of loan group to assist customers affected by the Covid-19 pandemic
From 17 May 2021, loan restructuring, exemption or reduction of interest, fees and retention of loan group to assist customers affected by the Covid-19 pandemic were carried out in accordance with Circular 03/2021/TT-NHNN ("Circular 03/2021") effective from 1Y May 2021 and Circular 14/202"‹/TT-NHNN ("Circular 14/2021") effective from 7 September 2021.
The Bank made 100% of additional specific provisions required to be made for customers whose outstanding loan balances were restructured in accordance with Circular 03/2021
Restructuring foan repayment terms and retention of loan group to assist customers facing difficulties in doing business and customers facing difficulties in repaying their consumer loans.
From 24 April 2023, restructuring loan repayment terms, including the principal and/or interest, to assist customers facing difficulties in doing business and customers facing difficulties in repaying their consumer loans is carried out in accordance with Circular 02/2023/TT-NHNM ("Circular 02/2023") issued by the SBV on 23 April 2023, upon the customers' requests and the Bank and its subsidiary's financial capabilities.
On 18 June 2024, SBV issued Circular 06/2024/TT-NHNN ("Circular 06/2024") on amending and supplementing Circular 02/2023, extending the implementation time of policies at Circular 02/2023 until 31 December 2024.
According Io Circular 02/2023 and Circular 06/2024, Ihe Bank and ils subsidiary restructure repayment terms of outstanding principals and/or interest of loans /o customers satisfying all of tnese following conditions:
Being a loan with principal arisen before 24 April 2023 from lending and finance teases,
The obligation of principal repayment and/or interest repayment arises during the period from 24 April 2023 to 31 December 2024;
The loan to be rescheduled is undue or has been overdue up to 10 days from the due date of payment schedule according to contract or agreement;
the Bank and its subsidiary determine that customers are unable to repay principal and/or interest on schedule under loan agreement due to decreasing revenue or income compared to revenue or income as specified in the repayment of principal and/or interest plan under contract or agreement.
Customers apply for loan restructuring and the Bank and its subsidiary determine that customers are able to fully repay principal and/or pay interest under the restructured schedules;
Loan violates laws and regulations shall not be restructured by the Bank and its subsidiary;
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT
for the period from 1 January 2025 to 30 June 2025
Form B05a/TCTD-HN (issued under Circular No.
27/202 J/TT- NHNN dated 31 December 2021)
The restructured term {including loan extension) is decided in conformity with the degree ol difficulty of each customer and is not permitted to exceed 12 months from the original maturity date of the respective rescheduled amount;
Loan restructuring under Circular 02/2023 and Circular 06/2024 is carried out from 24 April 2023 to 31 December 2024.
Detail of loan classification and loan group retention.
The Bank and its subsidiary retain loan group for the loan whose principal and/or interest are restructured ("restructured loan") at the latest classification before the loan was restructured.
For restructured loans that are undue during the restructured period, the Bank and its subsidiary do not apply to adjust, reclassify into a group with higher level of risk as prescribed in Circular 31 {from 1 July 2024) and Circular 11 (before 1 July 2024);
For restructured loans that are overdue during the restructured period and the Bank and its subsidiary do not continue to apply loan restructuring as prescribed in Circular 02/2023 and Circular 06/2024, the Bank and its subsidiary shall classify those restructured loans in accordance with Circular 31 (from 1 July 2024) and Circular 11 (before 1 July 2024),
For the interest receivables on loans that are being restructured according to Circular 02/2023 and Circular 06/2024, the Bank and its subsidiary do not record income (accrued interest) and recognises them as off-statement of financial position to for following up and urge collection. Interest income is recorded in the consolidated income statement upon receipts.
Restructuring loan repayment terms and retention of loan group to assist customers facing difficulties due to the impact and damage of storm No.3.
From 4 December 2024, restructuring loan repayment terms, including the principal and/or interest, to assist customers facing difficulties due to the impact and damage of storm number 3 is carried out in accordance with Circular S3/2024/TT-NHNN ("Circular 53/2024") dated 4 December 2024 issued by the SBV, upon the customers' request and the Bank's financial capacity.
According to Circular 53/2024, the Bank restructures repayment term of outstanding principals and/or interest of loans to customers satisfying all of these following conditions.
Customer in the following central-affiliated cities and provinces, including: Ha Giang, Cao Bang, Lang Son, Bac Giang, Phu Tho, Thai Nguyen, Bac Xan, Tuyen Quang, Lao Cai, Yen Bai, Lai Chau, Son La, Dien Been, Hoa Binh, Ha Noi, Hai Phong, Hai Duong, Hung ten, Vinh Phuc, Bac Ninh, Thai Binh, Nam Dinh, Ha Nam, Ninh Binh, Quang Ninh, Thanh Hoa {"26 provinces and cities"), are facing difficulties due to impact and damage of Storm number 3, including:
Customers are individuals who are currently residing1 or working or locating their business establishments or carrying out investment, construction or business activities in the abovementioned 26 provinces and cities,
Customers are organizations {except borrowers that are credit institutions or foreign bank branches) that are headquartered or locate their branches, representative offices or business establishments or carry out investment, construction or business activities in the abovementioned 26 provinces and cities.
' According to Clause 10, Article 2 of Residence law No.68/2020/QH 14 daied 13 November 2020, current place of residence means the place of permanent or temporary residence where a citizen lives on a regular basis; if the citizen has no place of permanent or temporary rcsidcnce, the place where they are living shall be their current place of residence.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT
for the period from 1 January 2025 to 30 June 2025
Form B05aJCTD-HN
(issued under Circular No.
27/2021/TT- NHNN dated 31 December 2021)
Outstanding debt arising from lending activities and fully meeting the following conditions: Outstanding principal amounts arise before 7 September 2024
Obligations to repay outstanding principal and/or interest arise within the period starting from 7 September 2024 to 31 December 2025 inclusive.
- The outstanding debt to be rescheduled is undue or up to 10 (ten) days past the agreed-upon due date and/or the outstanding debt which is more than 10 (ten) days overdue and considered overdue within the period starting from 7 September 2024 to 16 December 2024 inclusive if these debt rescheduling procedures are carried out for the first time as prescribed Circular 53/2024.
Loans classification and monitoring of interest receivables:
The loan is retained the debt group as the debt group classified according to regulations at the most r.°..cent time before 7 September 2024 when restructuring the debt repayment period according to Circular 53/2024.
For restructured loans that are undue during the restructure period, without having to apply adjustment principal, reclassify into a group with higher level of risk as prescribed in Circular 31.
For restructured loans that are overdue during the restructured period and the Bank does not continue to apply loan restructuring no longer have outstanding loans with restructured debt repayment period, loans classification is performed according to Circular 31;
- For the interest receivables on loans which are restructured repayment terms and are retained the loan group as current loans (group 1), the Bank derecognizes their accrued interest and recognizes them as off-balance sheet items for following up and collection from the restructured date, interest income for these loans is recognized in the income statement upon receipt accordance with regulations of law on financial regimes applicable to credit institutions and foreign bank branches.
Provision /'or losses on loans to customers
Provis/on for losses on loans to customers whose principal and/or interest are restructured in accord'ance with Circular 02/2023 and Circular 06/2024
From 24 April 2023, the Bank and its subsidiary make provisions for losses on loans to customers whose loans are restructured as prescribed by Circular 02/2023 and Circular 06/2024 as follows.
Additional specific provisions shall be determined as follows:
Additional specific provision -- A B
Whereas:
A: Specific provisions made for all outstanding loans of customers according to loan classifications regulated by Circular 31 (prior to 1 July 2024, according to Circular 11).
B: Specific provisions made for all outstanding loans of customers according to loan classifications regulated by Circular 02/2o23 and Circular 06/2024.
if the aforementioned additional specific provision is positive, the Banh and its subsidiary make additional specific provisions for credit losses as follows.
By 31.12. 2023: At least 50% of additional specific provisions; By 31.12.2024 100% of additional specific provisions.
The Bank and its subsidiary make general provisioning for the entire outstanding balance of customers based on the loan classification results determined according to Circular 31 (prior to 1 July 2024. according to Circular 11).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT
for the period from 1 January 2025 to 30 June 2025
Form B05a/TCTD-HN
(issued under Circular No.
27/2021/TT- NHNN dated 31 December 2021)
Provision for losses on loans to customers whose pr/nc/pa/ and'/or interest are restructured in accordance with Circular 53/2024
The specific provision is made for the entire outstanding loans of the customer according to the loan classification results for the portion of the outstanding loans that is retained in the same loan group and according to the loan classification results for the remaining outstanding loans o( the customer as per the loan classification regulations of Circular 31.
Determine the specific provision amount to be made for the entire outstanding loans of the customer according to the loan classification results as per the loan classification regulations of Circular 31 (not applying the regulation of retaining the loan group).
Additional pecif pro¿vision shall be determined as follows:
Additional specific provision = A - B
In which:
A: Additional specific provision must be set aside as prescribed in point b, Clause 5.5.2.
B: Additional specific provision must be set aside as prescribed in point a, Clause 5.5.2
If the aforementioned additional specific provisions at point c is positive, additional specific
provision for credit iosses is made as loliows
By 31 December 2024: At least 50% of additional specific provision;
8y 31 December 2025: additional provisions to reach at least 70% of the specific provision amount that needs to be supplemented
For loans that have been restructured according to Circular 53/2024 before 1 January 2025, provisions in 2025 should be made at least according to the rate specified in point a of this clause.
By 31 December 2026. Make additional provisions for the remaining amount to reach 100% of the specific provision amount that needs to be supplemented.
For loans that have been restructured according to Circular 53/2024 before January 1, 2026, provisions in 2026 should be made at least according to the rate specified in point b of this clause.
The general provision is made for the entire outstanding deDt of the customer according to the loan classification results determined in point b, clause 5.5.2.
Purchased de6ts
Purchased debts are ecorded at the purchasing price on the contract and classified to the group with risk level is not lower than its original group classified before purchase. if the interest receipt thereafter includes the accrued interest before purchase date, the interest recognition is made as follows. (i) reduce the value of purchased debts by the interest incurred before the purchase date; (ii) record the interest income in the period by the amount incurred after the purchase date.
The Bank classify and make provision for purchased debts in accordance with regulations on loan classification and provision for credit loss.
Debt selling actfv'/ties
Accordance to the guidance of Circular 09/2015/TT-NHNN, the treatment of the difference between the selling price and the book price for the debts is as follows.
For debts currently recorded on the on-statement of financial position.
If the selling price exceeds the book value of the debt, the difference is recognised as other income within the fiscal year,
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT
for the period from 1 January 2025 to 30 June 2025
form B05a/TCTD-HN (issued under Circular No.
27/2021/TT- NHNN dated 31 December 202 J)
if the selling price is lower than the value of the debt, the difference is recorded as an expense of the Bank in the fiscal year, after being oftset by compensation from parties, insurance from the designated insurance organisation, and if applicable, the financial risk reserve fund.
For debts that have been removed mom the consolidated financial statements and are being monitored off-statement of financial position, the proceeds from debt sales are recorded as other income of the Bank.
-
Trading and investment securities
Trading sect/r/I/es
Classification and recognition
Trading securities include debt securities or equity securities which are acquired and are held for trading primarily for the purpose of selling in short-tCrm, not exceeding one year to earn short-term profits.
Trading securities are recognised at the time the Bank becomes a party to the purchase contracts of these trading securities, details are as follows.
Listed securities are recorded at the time of orders matching,
Unlisted securities are recognised at the time when official ownership is established in accordance with regulations
Measurement
Trading securities which are certificates of deposits or unlisted bonds are recognised at costs less provisions for credit losses. The classification of debts and provisioning for these securities are similar to those for "Loans to customers" as presented in Note 5.1. According to Decree 86
{from 11 July 2024) and Circular 11 (before 1 July 2024), the Bank do not make general provisions for certificates of deposits and bonds issued by local credit institutions.
Other trading securities are initially recognised at their carrying value less provisions for diminution in value. Provisions for diminution in value are made when the market value of these trading securities is lower than their book value.
For listed equity securities: the market price of equity securities is the closing price on the most recent trading day up to the end of the fiscal year.
For listed debt securities: the market price of debt securities is the most recent trading price at the Stock Exchange within 10 days up to the end of the fiscal year.
The Bank does not make provisions for Government bonds, municipal bonds and Government-guaranteed bonds.
The difference between the provision made at the end of the current financial year and the provision made at the end of the previous financial year is recognised in the consolidated income statement during the year. Provisions for trading securities as mentioned above are reverted when the recoverable amount of trading securities increases after the provisions are made as results of objective events. A reversal of provisions, if any, is made only to the extent original costs of trading securities.
Gains or tosses from sales of trading securities are recognised in the consolidated income statement as "Net gain from trading of trading securities". Cost is determined by the specific identification method
Interests received from trading securities during holding periods are recognised in the consolidated income statement upon receipts.
NOTES TO THE CONSOLIDATEO FINANCIAL STATEMENT
for the period from 1 January 2025 to 30 June 2025
Form B05a/TCTD-HN (issued under Circular No.
27/2021/TT- NHNN dated 31 December 2021)
Derecognition
Trading securities are derecognised when the rights to receive cash flows from these securities are terminated or the Bank transfer substantially all the risks and rewards from ownerships of these securities.
Avai/a6/e-for-sa/e investment sectzrit/es
Classification and recognition
Available-for-sale investment securities include debt and equity securities, which are intended to be held for investing purposes and may be sold at any time if deemed advantageous.
Available-for-sale investment securities are recognised when the Bank becomes a party to the purchase contracts of these securities.
Measurement
Available-for-sale investment securities which are certificates of deposits or unlisted bonds are recorded at costs less provisions for credit losses.
Other available-for-safe investment securities are stated at their carrying value tess provisions for diminution in value. Provisions for diminution in value of available-for-sale investment securities is made when the carrying value is higher than the market price.
The provision for credit losses and provision for diminution in value of available-for-sale investment securities are made similar to the principles applied to trading securities as presented in Note 6.1
Available-for-sale debt securities are recognised at par value at purchased date. Accrued interest receivables before purchased date (for debt securities with interest payments in arrears) or deferred interest awaiting for allocation (for debt securities with interest payments in advance) is recognised in a separate account. D scount/premium, which is the negative/positive difference between the cost and the amount of par value plus (+) accrued interest receivables before the purchased date {if any) or minus (-) deferred interest awaiting for allocation (if any) is also recognised in a separate account.
tn subsequent holding periods, these debt securities are recognised at par value, and the discount/premium (if any) are amortised to the consolidated income statement on a straight-line basis over the remaining terms of these debt securities.
Cumulative interest before purchased date is recognised as a decrease in the accrued interest receivables account upon receipt. Accrued interest incurred after purchased date is recognised as income of the Bank based on an accrual basis. Interest received in advance is amortised into interest income from investment securities based on a straight-line basis over the terms of investment securities.
Gains or losses from sales of available-for-sale investment securities are recognised in the consolidated income statement as "Net gain from trading of inVestmenl securities", Cost is determined by the specific identification method.
Derecogni'tion
Available-for-sale investment securities are derecognised when the rights to receive cash flows from these securities are terminated or the Bank transfers substantially all the risks and rewards of ownerships of these securities.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT
for the period from 1 January 2025 to 30 June 2025
Fotm B0Sa/TCTD-HN (issued under Circular No.
27/2021/TT- NHNN dated 31 December 2021)
Held•to-maturity investment sect/rf/es
Held-to-maturity investment securities are debt securities that the Bank purchases with investing purpose to earn interests and the Bank has capabilities and intentions to hold these investment securities until maturities. According to Official Letter No. 2601/NHNN-TCKT issued by SBV on 14 April 2009, the Bank is allowed to reclassify maximum onetime after purchasing for held-to-maturity investment securities.
Held-to-maturity debt investment securities are recognised and measured similarly as available-for-sale debt investment securities as presented in Note 6.2
Cash and cash equivalents
For the purpose of the consolidated cash flow statement, cash and cash equivalents comprise cash on hand, gold, balances with SBV, demand and term deposits at other credit institutions which have original terms within 3 months or less, and securities which have collection periods or original maturities within 3 months or less from purchase dates.
Provision, contingent liabilities and assets
Off-balance sheet commitments comprise guarantees, settlement acceptances and irrevocable credit commitments
From 1 July 2024, the classifications of off-balance sheet commitments are made in accordance with Circular 31 as follows.
Group 1: Undue commitments, as assessed by the Bank and its subsidiary, which could be fully settled when due.
Group 2: Undue commitments. as assessed by the Bank and its subsidiary, which could not be fully settled when they fall due
A commitment is classified into Group 3 or a group of higher risk: Commitments meet any of the specified conditions and remains uncoilected for a period less than 30 days from the issuance date of the Bank and its subsidiary's collection decision:
Commitments violating the provisions in Clauses 1, 3, 4, 5, 6, Article 134 of the Law on Credit
Institutions No. 32/2024/QH15 (before 1 July 2024: applied according to Clauses 1, 3, 4, 5, 6 Article 126 of the Law on Credit institutions No. 47/2010/QH12 and according to Circular
11); or
Commitments violating the provisions in Clauses 1, 2. 3, 4, Article 135 of the Law on Credit institutions No. 32/2024/QH15 (before 1 July 2024: applied according to Clauses 1, 2, 3, 4, Article 127 Law on Credit institutions No. 47/2010/QH12 and according to Circular 11); or
- Commitments that violate the provisions of Clauses 1, 2, S, 9, Article 136 of the Law on Credit Institutions No. 32/2024/QH15 (before 1 July 2024: applied according to Clauses 1, 2, 5, Article 128 of the Law on Credit institutions No. 47/2010/QH12 and according to Circular 11).
Provisions for off-balance sheet commitments
According to Decree 86 (from 11 July 2024) and Circular 11 (before 1 July 2024), the classification of off-balance sheet commitments is conducted solely for risk management, credit quality supervision. Therefore, provisions are not made for off-balance sheet commitments.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT
for the period from 1 January 2025 to 30 June 2025
Form B05a/TCTD-HN (issued under Circular No.
27/2021/TT- NHNN dated 31 December 2021)
Corporate income tax
income tax include all income tax which is based on taxable profits. income tax expense comprises of current tax expense and deferred tax expense.
Current income tax is the amount of income tax payable or recoverable in fespect of the current period taxable profits at the current period tax rates. Current and deferred income tax are recognised as an income or an expense and included in the consolidated income statement of the period, except to the extent that the income tax arises from a transaction or event which is recognised, in the same or a different period, directly in equity.
Deferred income tax is provided in full, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the interim consolidated financial statements. Deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of occurrence affects neither the accounting nor the taxable profit or loss. Deferred income tax is determined at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted by the interim consolidated statement of financial position date.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
Borrowings, issued debt securities and equity instruments
Due to State Bank of Vietnam, due to and borrowings from other credit institutions, valuable papers issued are disclosed at the principal amounts outstanding at the date of the consolidated financial statements. At initial recognition, issuance costs are deducted from the cost of the valuable papers, These costs are allocated on a straight-line method during the lifetime of the valuable papers to "Interest and similar expenses".
Owners' capital
Owners' capital is recorded according to the actual amounts contributed by shareholders at the par value of the shares.
Share premium is the difference between the par value and the issue price of shares and the difference between the repurchase price and re-issuing price of treasury shares.
Other owners' capital represents other capital held by the owners at the reporting date.
Treasury shares
Treasury shares bought before the effective date of the Law on Securities (1 January 2021) are shares issued by the Bank and bought back by the Bank itself, but these securities are not cancelled yet and may be re-issued in the future tn accordance with securities laws and regulations. The amount received will be recorded as an increase in equity, and any surplus or deficit from these transactions will be recorded in the share premium account.
Treasury shares, which are repurchased after the effective date of the Law on Securities (1 January 2021), are cancelled and adjusted to reduce in the Bank's charter capital.
NOTES TO THE CONSOLE DATED FINANCIAL STATEMENT
for the period from 1 January 2025 to 30 June 2025
Form B05a/TGTD-HN
(issued under Circular No.
27/2021/TT- NHNN dated 31 December 2021)
Retained earnings
Retained earnings record the Bank and its subsidiary's results (profits) after CIT at the reporting date.
Statutory Reserves
Supplement cnarter capital reserve
Since 1 July 2024, according to the Law on Credit Institutions No. 32/2024/QH15 issued by the National Assembly on 8 January 2024, the Bank and its subsidiary make appropriation of 10% of profit after tax to supplement charter capital reserve untit it reaches the maximum balance of the Bank and its subsidiary's charter capital.
Financial reserve
According to Law on Credit Institutions No. 47/2010/QH12 issued by the National Assembly on 16 June 2010 and Decree No. 93/2017/ND-CP, the Bank and its subsidiary make appropriation of 10% of profit after tax to financial reserve.
The purpose of financial reserve is to offset residual asset losses and damage occurring in the course of business aher such losses have been offset with compensation paid by organisations, individuals who caused them, indemnity paid by insurers and with the allowance set up and accounted for in expenses, and shall be used for other purposes in accordance with the laws.
These statutory reserves are not allowed to be distributed and are recognised as part of equity.
Appropriation of profit
The Bank and its subsidiary's dividends are recognised as a liability in the Bank's consolidated financial statements during the year in which the dividends are approved by the General Meeting of Shareholders.
Profit after CIT could be distributed to shareholders after approval at the General Meeting of Shareholders, and after appropriation to other funds in accordance with the Bank and its subsidiary's charter and Vietnamese regulations.
Other reserves including in equity are appropriated from profit after tax. The appropriation from profit after tax and the utilisations of other reserves must be approved by the resolution of the General Meeting of Shareholders. These reserves are not regulated by laws and are allowed to be fully distributed.
The bonus and welfare fund is appropriated from the Bank and its subsidiary's profit after tax after approval by the General Meeting of Shareholders and is presented as a liability on the consolidated statement of financial position. The Bank and its subsidiary uses the fund in accordance with purposes as specified in accordance with Decree 93.
Earnings per share
The Bank presents basic and diluted earnings per share (EPS) for its ordinary shares. Basic EPS is calculated by dividing the net profit attributable to the ordinary shareholders of the Bank, after deducting the bonus and welfare fund made during the year, by the weighted average number of ordinary shares outstanding during the year. Diluted EPS is determined by adjusting the profit attributable to the ordinary shareholders and the weighted average number of ordinary shares outstanding for the effect of all dilutive potential ordinary shares.
Restatement corresponding figures.° hone
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HDBank - Ho Chi Minh City Development Joint Stock Commercial Bank published this content on July 30, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on July 30, 2025 at 10:33 UTC.
