Mr. Nguyen Dinh Tung, CEO of Orient Commercial Bank (OCB), shared his thoughts on the bank's restructuring and performance in recent times.
What are your thoughts on OCB’s achievements in the first six months of this year?
OCB’s indicators all recorded positive growth, especially those in outstanding credit and capital mobilization. Mobilization grew 13.5 per cent, higher than the average in Vietnam’s banking sector. Outstanding credit, meanwhile, also grew at the maximum level as requested by the State Bank of Vietnam (SBV). OCB also presented proposals to the central bank on its new indicator on outstanding credit and credit waiting for approval.
Regarding indicators on quality, OCB has also achieved the indicators contained in new SBV regulations, including Circular No. 02 and Circular No. 36. The achievement also represents the upgrading of safety standards.
As for bad debts, OCB’s bad debt indicator fell to 2.7 per cent. In the first half of this year we have also achieved good results from collecting bad debts.
In efficiency targets, OCB reached above 70 per cent, as planned. We have not recorded a profit because we must strengthen preventive policies, as required by the SBV, while the implementation of the standards in Circular No. 36 has increased some costs. Other OCB activities are progressing well.
Business activities in the first six months were stable and saw some positive growth. OCB is also implementing a three-year strategic roadmap. 2015 is the year that OCB will implement its commitments to the SBV on self-restructuring. We believe we will complete this restructuring program by the end of this year.
Can you tell us more about OCB’s three-year strategic roadmap?
We made plans for OCB’s innovative strategies in late 2012 and early 2013 and officially implemented these strategies in early 2013.
Our strategic goal is restructuring banking operations by focusing on two targeted groups of clients: small and medium-sized enterprises (SMEs), and middle and high-income earners.
At the same time we also rebuilt our internal banking operating system and risk management system. This is the critical foundation for creating a modern retail bank in the future.
OCB has aggressively implemented these innovative strategies since 2013 in accordance with the original plans. We also completed a risk management framework in accordance with international standards and have drafted plans to reach the Basell II banking standards.
OCB will complete the three-year strategic roadmap at the end of this year and this will create a solid foundation for the bank to make vigorous moves in the market next year.
What solutions has OCB adopted to handle bad debts?
In the 2012-2013 period, when we started to implement new business strategies, we determined that handling bad debts and addressing our shortcomings after the banking crisis would be our key tasks.
Collecting bad debts, therefore, is a top priority. OCB has continuously innovated its methods of handling and collecting bad debts.
At first, specialized staff relating to bad debts were part of business departments, but we now have a specialized Debt Settlement Center.
In addition to changing our organizational structure, we also studied changes in methodology and the processes in handling bad debts.
In late 2013 and early 2014 we invited KPMG to support us in rebuilding the policies, processes, procedures and skills for the Debt Settlement Center.
Today, OCB has a modern debt settlement system that is suitable with Vietnam’s market. Our bad debt ratio is predicted to fall from 2.7 per cent to around 1 per cent by the end of this year.
What are OCB’s policies in supporting SMEs, who usually face challenges and difficulties in terms of business capital?
SMEs are OCB’s targeted clients so our structure and operating model are built to serve their demands.
After we complete the new business strategies mentioned above, we believe that more and more SMEs will realize that OCB is the right bank for their lending needs.
OCB offers SMEs a fast and simple transaction process and preferential loans, among other things. OCB’s strategies are gradually upgrading its competitive capacity in three main areas: convenience, speed of service, and price.
What are OCB’s business targets from now to the end of the year?
We will continue to follow our initial plans. As I have mentioned, 2015 is a very important year for OCB, as we will complete our three-year strategic roadmap and meet the SBV’s requests on restructuring.
According to initial plans set at the beginning of the year, expanding its customer base is one of the bank’s important indicators. We will implement a series of programs to diversify channels to reach our targeted customers.
In addition, OCB will continue to improve its business efficiency, especially productivity in its branches as well as in the whole system, to increase the incomes of shareholders and employees.
OCB also will complete the basic foundations for its long-term development by the end of the year. The second half of the year is also an important period, as we will add to and reform our workforce. Our staff will continue to implement the existing business strategies as well as create new developments for OCB in the future.