HDBank completes three pillars of Basel II ahead of schedule

Friday, Jan 01, 2021 09:18

An HDBank transaction office in HCM City. HDBank has completed all three pillars of Basel II. — Photo courtesy of the bank

The Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank – HoSE: HDB) has applied the Internal Capital Adequacy Assessment Process (ICAAP), thus completing all three pillars of the Basel II ahead of the schedule set by the State Bank of Vietnam under Circulars 13 and 41.

Late last year HDBank became one of the first banks in Viet Nam to get approval from the SBV to apply the first and third pillars of Basel II’s minimum capital requirements and market discipline. ICAAP is the second.

ICAAP is arguably the most complex of the three pillars, and seeks to ensure a bank will complete its business strategy while complying with the SBV’s minimum capital requirement based on effective management of credit, market and operational risks prescribed under pillar 1, as well as interest rate risk, concentration risk and other risks regulated under pillar 2, and having appropriate plans to cope with stress tests for the most challenging scenarios.

On completing the process of building, calculating and inspecting ICAAP activities, HDBank has met all three pillars of Basel II and the SBV’s Circular 41 and Circular 13, which would help it strengthen risk management and ensure high growth in line with its business strategy.

Amid the tribulations faced by the global economy due to the Covid-19 pandemic, international credit rating agency Moody's maintained the B1 credit rating for HDBank, appreciating its capital capacity, risk management and long-term growth potential.

The bank recently completed a hike in charter capital to more than VND16.088 trillion ($693.7 million) by paying dividends in shares.

It also issued convertible bonds to strategic foreign partners to diversify its capital sources and further improve capital adequacy ratio, which was at a high 10.9 per cent as of September 30.

HDBank also completed some important projects related to the automatic treasury system, risk management systems for market / liquidity / interest rate in accordance with Basel II and digital banking strategy and others with the support of leading and prestigious global companies (FIS, EY, PWC, KPMG, and BCG).

Along with its strong financial foundation, comprehensive customer eco-system and appropriate business strategy, HDBank is ready for solid growth in future. — VNS

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