Executives of Sacombank and PwC (Vietnam) Limited sign an agreement to start a project called "Enhancement of valuation model and development of market risk regulatory capital charged model” for the bank in HCM City on July 5. — Photo courtesy of Sacombank

Sacombank and PwC (Vietnam) Limited on July 5 signed a deal and began the "Enhancement of valuation model and development of market risk regulatory capital charged model” project.

It seeks to improve the bank’s risk management capacity while helping create a solid foundation to comply with the State Bank of Vietnam (SBV) regulations and speed up the roadmap for adopting Basel II standards.

It is planned for completion in February 2020.

It will help Sacombank achieve its main objectives of upgrading models for valuation and quantifying risks in line with its current and future business portfolios; developing a methodology for market risk regulatory capital charged model following the standardised measurement method and internal model approach; developing stamina-testing methods, including principles/assumptions, tests and identification of all factors that can result in market risks to business portfolios, to come up with timely responses.

Talking about the rationale for the project, Nguyen Thi Kim Oanh, director of Sacombank’s capital market and foreign exchange division and the project director, said: “As a pioneer bank, more than ever, Sacombank expects to apply the most advanced practices and standards in modernising risk management activities in the capital and foreign exchange market businesses to ensure the bank operates in a safe and sustainable manner.

Sacombank’s project is also aimed at “bringing about significant changes in quality and comprehensive reform, creating a sustainable foundation to cope with the competitive business environment.”

Grant Arthur Dennis, PwC Vietnam’s chairman, said Việt Nam's financial market has changed very quickly in recent times, requiring banks to adapt.

Therefore, this project would be a big step for Sacombank in its journey to become the leading retail bank in Viet Nam, he said, assuring that PwC would bring a team of experienced foreign and Vietnamese consultants to co-ordinate with Sacombank to complete the project.

Speaking at the signing ceremony, Le Thi Hoa, an independent board member and chairwoman of the steering committee for implementing the Basel II project, said: “The completion of this project will not only meet SBV's expectations but more importantly improve Sacombank's governance and management system and help the bank’s staff access advanced knowledge the world is using.”

In 2015 Sacombank was one of 10 banks selected by the SBV to pilot risk management in line with Basel II norms.

In 2017 the bank implemented the loan origination system to help automate and professionalise credit allocation and management.

A year later it launched two risk management projects, "Perfecting the risk management database framework" and "Credit risk quantification model".

These are its two most important projects in the process of completing standardised approach and adopting the internal approach under the Basel II.

In February this year Sacombank and PwC Vietnam Consulting Co., Ltd. officially launched the "Upgrading and perfecting the asset liability management framework" project.

With such investment in key projects, Sacombank has been preparing to achieve the goal of adopting Basel II norms. — VNS