VPBank officially applies Basel II
According to the decision, all of VPBank’s activities will start to follow Circular 41/2016-TT/NNNN from the beginning of next month.
VPBank is one of 10 commercial banks which were selected to pilot Basel II since 2014.
Meeting the capital adequacy ratio (CAR) has been a challenge for many banks when implementing Basel II. VPBank said its CAR in recent years has always been higher than the stipulated level of 8 per cent under the Basel II requirements. By the end of last year, its CAR was 11.2 per cent.
In addition, VPBank said it has achieved positive business results when implementing Basel II.
Last year, its total operating income reached more than VND31 trillion (US$1.33 billion) and pre-tax profit of VND9.2 trillion. Its return on asset (ROA) and return on equity were 2.4 per cent and 22.8 per cent, respectively.
The bank said it has focused on balancing between business targets and risk management to achieve the results. All of its units have regularly made proposals to maximise capital utility to reduce risks.
“The central bank’s approval of VPBank to follow Circular 41 would help enhance its risk management. Implementing Basel II would also promote its business administration to be more transparent, thus helping its operation be more sustainable and effective,” it said.
Basel II international standards are set out to quantify risks through indicators and models, improve risk management and strengthen market transparency. The banks meeting principles of high risk management, safe and sustainable operation will be allowed to follow Basel II.