Agribank's milestones in development
In 1988, the Agricultural Development Bank of Vietnamwas established by Decree No. 53/HDBT dated 26 March, 1988 of the Council of Ministers (now the Government) with the reform of the financial system and the introduction of commercial banks in Vietnam.
The Agricultural Development Bank of Vietnam was created out of the State Bank of Vietnam (SBV): from all provincial branches of SBV, Agriculture Credit Division, funds at different provincial/district branches of SBV; specifically, Agribank was formerly the Agriculture Credit Department of SBV with personnel from Commercial Credit Department, Bank for Investment and Construction, Department of Accounting, and a number of functional units.
On 14 November, 1990, President of the Council of Ministers (now the Prime Minister) signed Decision No. 400/CT on establishment of the Vietnam Bank for Agriculture (VBA) to replace the Agricultural Development Bank of Vietnam. The Vietnam Bank for Agriculture was by law a legal entity having universal banking functions with major focus on agricultural sectors and rural areas, and responsible for its own finance, operations.
On 1 March, 1991, the Governor of the State Bank of Vietnam issued Decision No. 18/NH-QD on establishment of representative office of Vietnam Bank for Agriculture in Ho Chi Minh city, and on 24 June, 1994, the Governor issued document no. 439/CV-TCCB with the approval to set up representative office of Agribank in the Central region in Quy Nhon city – Binh Dinh province.
On 22 December, 1992, the Governor of the State Bank of Viet Nam issued Decision No. 603/NH-QD on the establishment of VBA provincial branches. As described in the Decision, Agribank has three Operations Centers, i.e, No I, II, III in Hanoi, Ho Chi Minh City Representative Office and the Central Region Representative respectively. Besides, VBA had 43 branches at provincial/city level and 475 branches at district/commune level.
In 1993, VBA promulgated emulation and commendation regulations in all positions and tasks to create standards for individuals and functional units to strive for excellent performance. In the same year, VBA also successfully organized a conference at national level with the participation of the best District Branch Managers all over the country.
On 30 July, 1994, by Decision No.160/QD-NHN9, The Governor of the State Bank of Vietnam approved new innovative management system model of the Agribank, on that basis, the General Director of VBA specified in writing in document No. 927/TCCB/VBA dated 16 August, 1994 which detailed as: the Vietnam Bank for Agriculture had two levels: Advisory level and Operational level. This was truly a turning point in the organizational structure of VBA and set the foundation for business operations of the existing Vietnam Bank for Agriculture and Rural Development.
On March 7th, 1994 pursuant to the Decree No 90/TTg of the Prime Minister, VBA began to be organized into a State-owned Corporation with the organizational structure consisting the Board of Directors, General Director, assisting apparatus including apparatus for internal control, subsidiaries including dependent accounting business units, independent accounting business units, and executive and non-executive functions were clearly separated, in which Chairman of Board of Directors and General Director were two separate roles.
Based on good results of the Preferential Loan Funds for poor households, VBA made recommendations to set up the Bank for the poor, and the idea was supported by the Government, the State Bank, and the public at large. On 31 August, 1995, the Prime Minister issued Decision No. 525/TTg on the establishment of the Bank for the poor.
The Vietnam Bank for the Poor (VBP) was a credit institution operating nationwide, having legal status, owned charter capital, assets, balance sheet, legal seal, headquartered in Hanoi. Initial operating capital was VND 400 billion of which the Vietnam Bank for Agriculture contributed VND 200 billion, Bank for Foreign Trade of Vietnam contributed VND 100 billion and the State Bank of Vietnam contributed VND 100 billion. The Vietnam Bank for the Poor was set up to eliminate hunger and alleviate poverty, operating not for profit but for capital preservation, capital development and cost recovery. The Bank for the Poor was actually a thriving operational division of the Vietnam Bank for Agriculture. As of September 2002, total outstanding loans of the Vietnam Bank for the Poor reached VND 6,694 billion, gaining high prestige both at home and abroad, appreciated by international organizations and highly supported by the public. The Bank for the Poor was renamed Vietnam Bank for Social Policies (VBSP) in March 2003. It was the Vietnam Bank for Agriculture that proposed the establishment, the implementation and the support for the VBP which was the precursor for the VBSP. This is a great pride of the Vietnam Bank for Agriculture and Rural Development in economic development and poverty reduction of the country.
On 15 November, 1996, authorized by the Prime Minister, the Governor of the State Bank of Vietnam issued Decision No. 280/QD-NHNN to rename the Vietnam Bank for Agriculture into Vietnam Bank for Agriculture and Rural Development (AGRIBANK). Under the new name, Agribank is allowed to carry out commercial banking activities but with a focus on investment for agricultural sector and rural areas by providing medium and long-term loans for infrastructure development, particularly agriculture, fishery, forestry, contributing to the cause of industrialization and modernization of agriculture and rural development.
In 2001, Agribank entered into a restructuring phase. The Restructuring Plan includes debt restructuring, strengthening the bank financial capacity, improving asset quality, and complying with international accounting international standards, commercialization, organizational and operational remodeling according to International best practice. By the end of 2001, Agribank had become the leading commercial bank in Vietnam, with the most extensive network of branches in rural areas. In 2002, Agribank became a member of APRACA and the Confederation International du Credit Agricole (CICA).
In 2002, Agribank expanded operation at home market as well as strengthened international relations. By the end of 2002, Agribank has been a member of reputable associations such as APRACA, CICA and ABA, VBARD General Director was an official member of The Board of Management of APRACA and CICA.
In 2003, Agribank sped up implementation process of Restructuring project in order to improve business activities in large-scale with high quality. Thanks to significant achievements in Doi moi Period, great contributions to social-economic development as well as rural and agricultural modernization and industrialization, the President of Socialist Republic of Viet Nam issued Decision No 226/2003/QD/CTN dated May 7th, 2003 on awarding the Title of Labor Hero of the Doimoi period to Agribank.
By 2004, after 4 years of implementation Agribank’s restructuring plan in the period of 2001-2010, Agribank reached encouraging achievements. Financial position was cleaned up by loans restructuring and recapitalisation, 90% of NPLs were settled. Organizational structure had been gradually improved aiming at strengthening management capacity. Management mechanism at Head Office and branches had been reinforced, business self-control was enhanced.
By the end of 2005, Agribank’s equity reached VND 7,702 billion; the total assets were over of VND 190,000 billion, the network comprised over 2,000 branches and 29,492 staffs accounting for 40% of total bank staff nationwide. Agribank applied advanced technology, providing high quality banking services and products. So far, Agribank has received and implemented 68 projects funded by international organizations worth USD 2,486 million, in which USD 1.5 billion have been disbursed through Agribank. Agribank currently has correspondent relationship with 932 foreign banks located in 112 countries and territories throughout the world and became the member of leading credit institutions and organizations.
Thanks to the breakthrough and innovative measures, since 2006, Agribank has begun to thrive. By the end of 2007, total assets reached VND 325,802 billion, equivalent to USD 20 billion, increasing by almost 220 times compared with the first years of establishment. Total outstanding loans reached VND 242,102 billion, 70% of which were granted to rural and agricultural sector with around 10 million farming households, loans granted to small and medium enterprises accounted for over of 36% with around 30,000 enterprises. Total funds reached VND 295,048 billion, which were mainly mobilized.
The year 2008 marked the path of 20 years of development of Agribank. This year is also an important year in the international economic integration process under the direction of Party and the Government. Agribank’s development strategy is to become a multi-sector, multi-function, multi-owner financial group. Following to this, the bank has identified its key goals: remaining the dominant role in rural and agricultural financial market, being the fellow of around 10 million farming households, speeding up the restructuring process, completely settling NPLs, reaching Capital Adequacy Ratio (CAR) following international standards, improving IT infrastructure, diversifying products, increasing service quality, preparing qualified staff, ensuring employees’ interests, promoting awareness of AGRIBANK brand and culture.
Aware of the importance of non-traditional credit products and services, during 2009, Agribank utilized modern information technology to develop and introduce modern banking products and services including: Mobile Banking related services, such as SMS Banking, VnTopup, A Transfer, A Paybill, and VnMart; payment connectivity with the State Treasury, in coordination with Taxation and Customs Offices for the collection of state budget; and the issuance of more than 4 million cards of all kinds.
2009 was also the year Agribank placed a strong focus on training and fostering its staff to meet the requirements of competition and integration. Throughout the year, Agribank conducted training and retraining to a total of 142,635 attendee staff members (an increase of 57% attendance compared with 2008); successfully implemented online training model, and recruited more than 2,000 young staff with strong educational foundation, foreign language skills and IT knowledge in order to prepare human resources for the following years. At the end of 2009, total assets of Agribank reached VND 479,000 billion, an increase of 22% compared with 2008; total funding resources reached VND 434,331 billion, and total outstanding loans to the economy reached VND 354,112 billion, of which outstanding loans to agricultural and rural areas was VND 242,062 billion.
Also in 2009, Agribank was honored to welcome General Secretary of the Communist Party of Vietnam Nong Duc Manh to visit on the occasion of the celebration of its founding and 21 years (26 March, 1988 – 26/3/2009). It was also honored to be awarded with different certificates of merit and other noble awards from the Party, State, Government, banking industry, and other reputable organizations, including: Top 10 Vietnam Gold Star Award, Vietnam’s Top 10 most prestigious brands, the title of “Business for Sustainable Development” recognized by the Ministry of Industry and Trade, and VNR500’s Top 10 enterprises.
In 2010, Agribank’s in Top 10 of 500 largest enterprises in Vietnam. To enforce the credit institutions in 2010 and to implement the Decree No. 59/2009/ND-CP of the Government on organization and operation of commercial banks, Agribank’s Directive Board has promulgated and implemented new Article on organization and operation replace the Regulation enacted in 2002. Also in 2010, Agribank approved by the Government for adding VND 10,202.11 billion, bringing up the total charter capital to VND 20,810 billion, and continuously to be the largest Financial Institution in Vietnam. Always leading in implementing the guidelines of the Party, Government, and the monetary policy of the SBV, Agribank has actively implemented the Decree No. 41/2010 / ND-CP on the basis of 10-year implementation of Decision 67/1999/QD-TTg on the credit policy for development of agriculture and rural areas, and further confirmed the main role in agricultural investment with the proportion of rural lending always accounted for 70% of the outstanding loan of the whole Agribank’s system. In 2010, Agribank reached the title “No 1 Bank in Vietnam for cardholder development” with 6.38 million cards, and speed up the development in services and products, especially for local market. On June 28, 2010, Agribank officially opened its branch in Cambodia, and on November 20, 2010 the bank informed the establishment of Agribank Banking School (formerly Training Center). Also in 2010, Agribank successfully held the 8th Congress Party (term of 2010 – 2015), the 3rd Excellent Individuals Meeting, the 6th Sport Festival of the Bank.
In 2011, by Decision No 214/QD-NHNN, dated on 31/01/2011, approved by The Governor of the State Bank of Vietnam, Agribank has completely changed into Ltd company with 100% capital of state.
On November 2011, Agribank was approved by the Government to add VND 8445.47 billion, reaching the number of VND 29,605 billion, continuously to be the bank of greatest capital in Vietnam, ensuring CAR higher than 9% as prescribed by the State Bank of Vietnam.
In 2011 Agribank has invested in "Tam Nong" (Agriculture, Farmer and Rural area) hits VND 300,000 billion, to be the leading credit institution for pilot lending for the new rural construction, which contributed to the initial success of the National targets programme on new rural construction for the period of 2010 - 2020 directed by the Government.
Also in 2011, Agribank won the title "Enterprise of best products and services", and awarded the Cup of "Outstanding bank in card activities," for the achievements, contribution of Agribank in card development in particular and non-cash payments in general.