CORPORATE GOVERNANCE

OVERVIEW ON CORPORATE GOVERNANCE

The Board of Directors congratulated Mr. Pham Quoc Thanh - Chief Executive Officer of HDBank (the 3^rd from left) on becoming a Member of the Board of Directors at the 2023 Annual General Meeting of Shareholders

Ensuring compliance with legal regulations on the operations of a Credit Institution and on the governance of a listed company, HDBank has been building an internal governance system according to the best domestic as well as international corporate governance practices, principles and standards, including:

Decree No. 155/2020/ND-CP detailing the implementation of a number of Articles of the Law on Securities.
Circular No. 13/2018/TT-NHNN on the internal control system of commercial banks, foreign bank branches, and related amendments and supplements.
“The Vietnam Corporate Governance Principles of Best Practices” issued by the State Securities Commission and the International Finance Corporation (IFC).
The OECD (Organisation for Economic Co-operation and Development) Principles of Corporate Governance.
ASEAN Corporate Governance Scorecard.

With a well-established and clearly defined medium to long-term development strategy, affirming the brand value, bringing the highest benefits to customers, investors, employees and the community, in 2023 and the following years, HDBank shall focus on performing the following tasks:

To innovate corporate governance methods; to further improve the quality of human resources, building a high-performance working culture.
To accerlerate the adoption of the Environmental, Social, and Governance (ESG) standards to enhance operational efficiency, improve competitive capacity and ensure sustainable development of HDBank, while demonstrating the Bank’s responsibility to the environment and society.
To strengthen the role and responsibilities of the Committees under the Board of Directors in advising, supervising relevant areas, and sponsoring transformation programs according to the 5-year strategy 2021 - 2025, emphasizing the crucial role of top Management in successfully implementing transformation programs, highlighting the requirement of embracing innovative mindset and new approaches to transformation works, leading the development and promotion of the culture of innovation and collaboration.
To increase investment in technology, digitizing internal processes and customer journeys to optimize operational efficiency, enhance management capacity and improve competitiveness in the market.
To strengthen the risk management system in a modern and efficient direction; to improve forecasting capacity and prepare plans to minimize the impact of macroeconomic risks.
To implement plans to restructure the Bank in presence of appropriate opportunities.

THE BOARD OF DIRECTORS’ ASSESSMENT OF THE BANK’S PERFORMANCE

Madam Nguyen Thi Phuong Thao - Permanent Vice Chairwoman of the Board of Directors

CAPITAL ADEQUACY RATIO (CAR) ACCORDING TO THE BASEL 2 STANDARDS

12.6%

among the banks with the highest capital adequacy

THE NUMBER OF NEW CUSTOMERS DEVELOPED THROUGH DIGITAL CHANNELS ACCOUNTED FOR

55%

of the Bank’s total new customers

THE NUMBER OF FINANCIAL TRANSACTIONS PERFORMED ON E-BANKING INCREASED BY

132%

THE BALANCE OF SAVINGS DEPOSITS VIA DIGITAL CHANNELS INCREASED BY

449%

2023 has been assessed as a difficult year for the world economy with declines in global GDP growth, trade and investment. exchange rates, Economies have been put under a lot of pressure coming from the tightening of monetary policy in many countries due to the high level of inflation, the complex fluctuations in exchange rates, oil prices, and gold prices, the failures of some of the world’s leading financial institutions in the US and Europe, and the stressful, unpredictable developments in geopolitical conflicts, extreme weather events, and widespread diseases...

As a highly open economy, Vietnam has been inevitably influenced by external fluctuations. In particular, the banking sector has faced many challenges in 2023 such as liquidity pressures, the increasing trend of overdue debts, the negative impact on non-interest income due to the cautious sentiment of customers after incidents related to products, services of some financial institutions...

For HDBank, 2023 was considered a pivotal year in implementing the 5-year strategy 2021 - 2025. In a challenging market context, to achieve the established strategic objectives, the Board of Directors directed, supervised, and accompanied the Board of Management in implementing flexible adaptation solutions, actively seeking, seizing and taking advantage of business opportunities. With the close guidance of the Board of Directors, the determination of the Board of Management in operating as well as the best efforts of all employees, , by the end of 2023, HDBank achieved positive results, continued impressive growth in scale and efficiency, ensured quality, safety in operations, affirmed the position and brand of HDBank, gradually approaching the 5-year strategic goal (2021 - 2025). In particular, the growth ratio of Total Deposits, Total Credit Outstanding and Profit Before Tax of HDBank were among the highest in the banking industry.

Accelerating business development for breakthrough growth to enhance its position, HDBank also pays great attention to risk management. The Bank has always been positively evaluated by partners and Moody’s - the credit rating agency - thanks to good asset quality, high operational efficiency, and abundant liquidity reserves. HDBank’s Capital Adequacy Ratio (CAR) (under Basel standards) as of December 31, 2023 reached 12.27%, placing it among the banks with the highest capital adequacy ratio. HDBank is one of the pioneering banks in Vietnam to fully apply Basel III standards in risk management.

As one of the leading, pioneer banks in digitalization, the implementation of HDBank’s digital transformation strategy and the development of HDBank Digital Bank have recorded positive results. In 2023, the number of new customers developed through digital channels accounted for 55% of total new customers, the number of financial transactions on e-banking increased by 132%, the balance of savings deposits via digital channels increased by 449%,... HDBank was the only bank in Vietnam to receive the “Digital Innovation” award at the ASEAN Business Awards - (ABA) 2023. This is a prestigious award organized by the ASEAN Business Advisory Council to honor businesses with outstanding achievements and contributions to the region’s development. This award demonstrates the international recognition for HDBank’s digital transformation initiatives.

Implementing a sustainable development strategy, business growth parallel with corporate responsibility in environmental and social protection, and bringing positive impacts to the community, HDBank is one of the pioneers in Vietnam in green credit, providing the best financial solutions for customers in agriculture, high-tech applications, renewable energy, and environmentally friendly production solutions, contributing to promoting socio-economic development with the goal of minimizing environmental impacts. Additionally, the Bank always fulfills its social responsibilities, actively participates in and accompanies social welfare activities. With its efforts and contributions, HDBank is the only retail bank in Asia and the Middle East honored by The Asian Banking and Finance (ABF) in the category “Most Sustainable Development Bank of the Year 2023” (Sustainability Initiative of the Year). Balancing the interests of the Bank, customers, shareholders, and investors, HDBank completed cash dividends at a rate of 10% and stock dividends at a rate of 15% as per the resolutions passed by shareholders and the tradition of regular dividend payouts every year. Information disclosure and support for shareholders to exercise their rights are timely, transparent, and responsible. Furthermore, HDBank has a dedicated investor relations department always ready to receive and address shareholders’ contributions, requests, and inquiries.

STRUCTURE OF THE BOARD OF DIRECTORS

No.	Member	Title	Date of becoming/ceasing Board member		Ownership percentage	Position at other organizations
No.	Member	Title	Date of appointment	Date of dismissal	Ownership percentage	Position at other organizations
1	Kim Byoungho	Chairman Independent member	April 29, 2022		0%	Board member - SK Inc., Korea
2	Nguyen Thi Phuong Thao	Permanent Vice Chairwoman	June 30, 2005		3.69%	Chairman, CEO - Sovico Group Joint Stock Company Chairwoman - Vietjet Aviation Joint Stock Company Permanent Vice Chairwoman - HD SAISON Finance Co., Ltd Chairwoman - GalaxyOne Co., Ltd
3	Nguyen Huu Dang	Vice Chairman	December 31, 2010		2.75%	Chief Executive Officer - GalaxyOne Co., Ltd
4	Nguyen Thanh Do	Vice Chairman	April 21, 2017		0%	Board member - Hoa Binh University
5	Luu Duc Khanh	Vice Chairman	July 03, 2009		0.29%	Board member - Vietjet Aviation Joint Stock Company
6	Le Manh Dung	Independent member	April 29, 2022		0%	Representative - DEG - Deutsche Investitions- und Entwicklungsgesellschaft mbH
7	Pham Quoc Thanh	Member cum Chief Executive Officer	April 26, 2023		0.16%	Board member - HD SAISON Finance Co., Ltd
8	Nguyen Thi Tam	Member	April 26, 2013	April 26, 2023	0%

ASSIGNMENT OF DUTIES OF THE BOARD OF DIRECTORS

After the 2023 AGM, the Board of Directors completed the assignment of duties to the Board members, enhancing the quality and professionalism in the supervision and governance of the Banks’s activities.

Specifically, to fulfill the authorities and obligations of the Board of Directors as stipulated in the Law on Credit Institutions, the Law on Enterprise, the Charter of the Bank and other relevant legal documents, the duties of each HDBank’s Board members are assigned as follows:

Member	Duties
Mr. Kim Byoungho Independent Chairman	To comprehensively operate, lead and manage all general activities of the Board of Directors. To be responsible for the development strategies and restructuring plans of HDBank. To be responsible for external relations and relationships with strategic partners both domestically and internationally. To support financial investment and shareholder relations activities. To hold the positions as the Chairman of the Strategy and Investment Committee (renamed as the ESG Committee), Chairman of the Banking Technology Committee.
Ms. Nguyen Thi Phuong Thao Permanent Vice Chairwoman	To directly resolve issues on behalf of the Chairman of the Board of Directors according to his authorization. To daily handling issues under the authorities and responsibilities of the Board of Directors on a regular basis. To hold the positions as the Chairwoman of the Credit Supervision Committee, Member of the Strategy and Investment Committee (renamed as the ESG Committee).
Mr. Nguyen Huu Dang Vice Chairman	To be responsible for network development and human resource activities of the Bank. To hold the positions as the Chairman of the Human Resources Committee, Member of the Credit Supervision Committee, Member of the Strategy and Investment Committee (renamed as the ESG Committee), Member of the Banking Technology Committee.
Mr. Nguyen Thanh Do Vice Chairman	To be responsible for supervising the operations of the Board Office. To manage activities in the Northern Region on behalf of the Board of Directors. To support the Board of Directors in external relations activities. To hold the positions as the Member of the Human Resources Committee and Member of the Risk Management Committee.
Mr. Luu Duc Khanh Vice Chairman	To assist the Board of Directors in directing the implementation of the strategic plans. To hold the positions as the Member of the Risk Management Committee, Member of the Credit Supervision Committee, Member of the Strategy and Investment Committee (renamed as the ESG Committee).
Mr. Le Manh Dung Independent member	To monitoring the Balance Sheet, performance indicators and prudential ratios of the Bank. To hold the positions as the Chairman of the Risk Management Committee, Member of the Human Resources Committee, Member of the Strategy and Investment Committee (renamed as the ESG Committee).
Mr. Pham Quoc Thanh Member cum Chief Executive Officer	To directly lead and manage the operations of HDBank, to direct the implementation of the resolutions and decisions of the Board of Directors across the Bank. To hold the positions as the Member of the Risk Management Committee, Member of the Human Resources Committee, Member of the Strategy and Investment Committee (renamed as the ESG Committee).

REPORT ON THE ACTIVITIES OF THE BOARD OF DIRECTORS AND INDEPENDENT MEMBERS OF THE BOARD OF DIRECTORS IN 2023

In 2023, the Board of Directors effectively fulfilled the leadership role in the Bank’s governance. The Professional Committees played a crucial role in advising the Board of Directors to make decisions on specific areas, supporting the Board of Management in implementing key development programs and projects, contributing positively to the Bank’s performance. In 2023, the HDBank Board of Directors was honored with “the Board of the Year” award by the Vietnam Institute of Directors (VIOD), recognizing HDBank’s pioneering efforts in applying advanced corporate governance standards and transparency in business operations according to the best international practices.

All Board members have demonstrated a high sense of responsibility, professionalism and prudence in carrying out their duties. effectively leveraging their leadership roles, actively engaging, seizing opportunities to contribute to the bank’s development while harmonizing short-term and long-term goals.

The independent Board members of the Board of Directors fulfilled their responsibilities with a strong commitment, dedication, professionalism, and respect for the interests of all shareholders. They carefully considered issues within under their authorities, including decisions on transactions with related parties, ensuring objectivity, transparency, contributing to enhancing the effectiveness of the Board of Directors’ operations. Attending all Board meetings, independent members have proactively reviewed, analyzedto provide valuable, objective, and relevant comments, recommendations to improve the quality of operations, making significant contributions to the bank’s sustainable development.

As the governing body responsible for directing, supervising and assessing the bank’s operations, HDBank’s Board of Directors regularly discusses and organize the collection of opinions from Board members to make final decisions on the Bank’s operations according to the majority principle.

Key activities of the Board of Directors in 2023:

1

The Board of Directors successfully organized the 2023 AGM (fiscal year 2022) on April 26, 2023, achieving the high consensus of shareholders in approving the reports and proposals submitted by the Board of Directors, the Board of Supervisors, the Board of Management, as well as additionally electing one Board member.

2

In 2023, the Board of Directors held 5 meetings attended by Board members, the Chief of the Board of Supervisors, the Chief Executive Officer, and observers representing bondholders of HDBank convertible bonds.

Members of the Board of Directors and Executive Board at the HDBank Strategy workshop, October 2023

The attendance of the Board members at Board meetings in 2023 was as follows:

No.	Member	No. of meetings attended	Meeting attendance rate	Note
1	Mr. Kim Byoungho	05/05	100%
2	Ms. Nguyen Thi Phuong Thao	05/05	100%
3	Mr. Luu Duc Khanh	05/05	100%
4	Mr. Nguyen Thanh Do	05/05	100%
5	Mr. Nguyen Huu Dang	05/05	100%
6	Ms. Nguyen Thi Tam	03/03	100%	Ms. Nguyen Thi Tam was dismissed from the position of the Board member by the General Meeting of Shareholders on April 26, 2023.
7	Mr. Le Manh Dung	05/05	100%
8	Mr. Pham Quoc Thanh	02/02	100%	Mr. Pham Quoc Thanh was additionally elected as HDBank’s Board member by the General Meeting of Shareholders on April 26, 2023.

REPORT ON THE ACTIVITIES OF COMMITTEES UNDER THE BOARD OF DIRECTORS

FUNCTIONS AND TASKS

The Risk Management Committee’s main functions are to advise the Board of Directors in developing, issuing, updating changes, and organizing the implementation of risk management policies in the Bank’s operations in accordance with legal regulations and the Bank’s Charter; to advise the Board of Directors on risk management related to issues submitted for approval; to provide warnings about the Bank’s safety levels against potential risks and preventive measures; to advise the Board of Directors on organizing the handling, rectifying existing limitations in risk management.

COMMITTEE MEMBERS

Mr. Le Manh Dung

Independent Board Member - Committee Chairman

Mr. Luu Duc Khanh

Vice Chairman of the Board of Directors - Member

Mr. Nguyen Huu Dang

Vice Chairman of the Board of Directors - Member

Mr. Pham Quoc Thanh

Board Member cum Chief Executive Officer - Member

Mr. Nguyen Thanh Do

Vice Chairman of the Board of Directors - Member

Mr. Le Thanh Hai

Director of the Risk Management Division - Committee Secretary

HIGHLIGHTS OF ACTIVITIES

In 2023, the Risk Management Committee held 04 quarterly periodical meetings with the participation of committee members and leaders of related Divisions/ Departments.

The main activities of the Risk Management Committee in 2023:

To assist the Board of Directors in monitoring the implementation of projects under the Basel II and Basel III roadmap and strategic initiatives on risk management.
To advise the Board of Directors to improve risk management policies: Promulgating the Regulation on Environmental, Social, and Governance (ESG) policies; the Regulation on operational risk management, announcing HDBank’s risk appetite from now until 2026 as well as operational risk management framework of HDBank.
To assist the Board of Directors in supervising compliance with regulations of the State Bank on safety criteria for banking operations; HDBank’s regulations on risk appetite, risk limit and risks related to credit risk, liquidity risk, interest rate risk, exchange rate risk, operational risk; HDBank regulations on risk appetite, risk limits, and risks related to credit risk, liquidity risk, interest rate risk, exchange rate risk, operational risk, making recommendations for the Board of Management to implement necessary actions and solutions to ensure safe and efficient operations in the context of complex market developments directly affecting activities of banks.

OPERATING DIRECTION

The Risk Management Committee shall continue to focus on monitoring compliance with risk management policies in the Bank’s operations, assessing the appropriateness and effectiveness of these policies; monitoring the progress of projects to enhance technology application in risk management and the implementation of the roadmap for applying international standards and criteria based on consultancy, thereby making recommendations to the Board of Management and advisory opinions to the Board of Directors for timely directions and decisions, ensuring effective risk management and optimizing business efficiency.

FUNCTIONS AND TASKS

The Human Resources Committee assists and advises the Board of Directors in promulgating internal policies and regulations on human resources under their authorities; recruiting/appointing/reappointing senior management positions; evaluating the appropriateness of current human resources policies to make appropriate adjustments in compliance with legal regulations and actual situations.

COMMITTEE MEMBERS

Mr. Nguyen Huu Dang

Vice Chairman of the Board of Directors - Committee Chairman

Mr. Nguyen Thanh Do

Vice Chairman of the Board of Directors - Member

Mr. Le Manh Dung

Independent Board Member - Member

Mr. Pham Quoc Thanh

Board Member cum Chief Executive Officer - Member

Ms. Nguyen Thi Thanh Thuy

Deputy Director of the Human Resources Division - Committee Secretary

HIGHLIGHTS OF ACTIVITIES

The Human Resources Committee held 04 meetings to assess the implementation of directions on human resources and the quality of human resources activities at HDBank in 2023.

The Human Resources Committee assisted the Board of Directors in directing the Board of Management and the Human Resources Division to focus on implementing tasks to enhance the quality of human resources at HDBank such as: developing and improving policies to encourage, attract, and train high-quality human resources; promptly deploying welfare policies to bond employees to the Bank; improving procedures and regulations related to human resources; Establishing long-term orientation, vision, and specific goals for training, focusing on focusing on fostering and training source staff; improving the quality of HR reports and proposal.

In addition, facing increasingly fierce competition in the financial-banking market and the strong digital transformation trend, the Human Resources Committee has assisted the Board of Directors in directing to review the human resources situation of the Transformation Management Office (TMO) and the organizational as well as personnel structure of the Digital Bank - 02 key units that are expected to be able to support the Bank in accelerating the implementation process to complete the work items in the shortest time in order to soon achieve the established strategic development as well as digital transformation goals, strengthening and enhancing HDBank’s capacity, position and competitiveness in the market.

OPERATING DIRECTION

To advise the Board of Directors on continuing to improve policies for effective human resources management.
To advise the Board of Directors on directing training, recruitment, and human resource development activities to build a professional, friendly working environment with competitive remuneration, creating motivation for all employees, enhancing HDBank’s brand position in the recruitment market.
To advise the Board of Directors to focus on the goal of digitizing the entire operation processes in 2024 to facilitate reporting, data management, and personnel management.

FUNCTIONS AND TASKS

The Credit Supervision Committee advises the Board of Directors in: approving credit policies; approving credit limits within the decision-making authority of the Board of Directors as stipulated; supervising the credit approval levels under the Board of Management on approving the credit extension to 01 customer, or 01 customer and their related parties with a value equal to or greater than 1% of HDBank’s equity capital, or 5% of HDBank’s charter capital and/or equivalent to 500 billion VND or more as prescribed in HDBank’s recent regulations.

COMMITTEE MEMBERS

Ms. Nguyen Thi Phuong Thao

Permanent Vice Chairwoman of the Board of Directors - Committee Chairwoman

Mr. Luu Duc Khanh

Vice Chairman of the Board of Directors - Member

Mr. Nguyen Huu Dang

Vice Chairman of the Board of Directors - Member

Mr. Pham Quoc Thanh

Board Member cum Chief Executive Officer - Member

Mr. Thai Minh Tu

Director of the Corporate Credit Center - Committee Secretary

Ms. Nguyen Thi Thu Hang

Head of the Retail Banking Re-Appraisal Department - Committee Secretary

HIGHLIGHTS OF ACTIVITIES

In 2023, the Credit Monitoring Committee held 04 quarterly periodical meetings and 05 times of collecting written opinions of members for the purpose of:

Advising the Board of Directors on orienting credit development strategy and approving credit policies, plans to develop new products, new markets in accordance with the policies of the Government and the State Bank;
Advising the Board of Directors to direct the Board of Management to carry out credit activities in line with the 2023 credit growth limit granted by the State Bank of Vietnam and the actual market situation, proactively and flexibly offering credit to the economy, focusing on areas considered as economic growth drivers according to the Government’s policies;
Supporting the Board of Directors in monitoring, supervising the Board of Management in implementing of the credit growth plan, ensuring scale, quality, and effectiveness in accordance with the orientation;
Advising the Board of Directors in approving credit applications under the approval authority of the Board of Directors.

In addition, the Committee appointed Member(s) to supervise the credit approval levels under the Board of Management in approving the credit extensions under the supervision authority of the Board of Directors.

OPERATING DIRECTION

To advise the Board of Directors to direct and supervise the Board of Management in credit approval activities and credit development orientation, promptly making adjustments in accordance with developments and actual situations to effectively exploit 2024 credit growth limit, contributing to promoting economic growth and increasing the scale, enhancing the position of the Bank while still ensuring credit quality, controlling the ratio of overdue and bad debts in accordance with regulations.
When the Credit Approval Level of the Board of Management approved credit applications that are under the approval authority or the supervision authority of the Board of Directors and such those approved applications are submitted by the Credit Reappraisal Department to the Board of Directors for reporting/ approval, the Credit Supervision Committee shall assess, scrutinize and suggest solutions and advices to the Board of Directors for consideration and approval.

FUNCTIONS AND TASKS

The Strategy and Investment Committee advises the Board of Directors in orienting, monitoring the development and implementation of medium/long-term strategic objectives; promulgating policies within the authority related to the strategy; providing direction, criteria, and promulgating investment policies in the Bank’s operations as regulated by the law and the Bank’s Charter.

COMMITTEE MEMBERS

Mr. Kim Byoungho

Chairman of the Board of Directors - Committee Chairman

Ms. Nguyen Thi Phuong Thao

Permanent Vice Chairwoman of the Board of Directors - Member

Mr. Nguyen Huu Dang

Vice Chairman of the Board of Directors - Member

Mr. Luu Duc Khanh

Vice Chairman of the Board of Directors - Member

Mr. Le Manh Dung

Independent Board Member - Member

Mr. Pham Quoc Thanh

Board Member cum Chief Executive Officer - Member

Ms. Le Thi Bang Tam

Advisor to the Board of Directors - Member

Mr. Chu Viet Cuong

Advisor to the Board of Directors - Member

Mr. Pham Van Dau

Chief Financial Officer - Committee Secretary

HIGHLIGHTS OF ACTIVITIES

In 2023, the Strategy and Investment Committee held 04 meetings with the participation of committee members and members of the Board of Management, as well as relevant Divisions/ Departments to discuss and provide advisory opinions for the Board of Directors on investment and strategy development and implementation, including:

Developing business plans and orienting banking activities for 2023;
Implementing tasks and action programs in order to achieve the approved business plan for 2023;
Participating in the Credit institutions restructuring program as directed by the State Bank;
Reassessing the appropriateness of established strategic objectives and initiatives, proposing adjustments to ensure the feasibility of strategic objectives;

Performing tasks under the 5-year development strategy for 2021 - 2025; developing a set of key performance indicators (KPIs) linked to transformation and incentive policies based on KPIs for Board members;
Developing the detailed plan on contributing capital to a securities company as approved by the General Meeting of Shareholders;
Studying and considering the plan to establish the HDBank representative office in Seoul, South Korea;
Investor relations activities, seeking and selecting strategic investors.

OPERATING DIRECTION

To support the Board of Directors in directing the completion of HDBank’s organizational structure towards a leaner, more efficient manner, optimizing resources, improving competitiveness, and cost-effectively enhancing capabilities.

To advise the Board of Directors in directing, supervising and proactively supporting the Board of Management in implementing strategic projects such as establishing the Representative Office in Seoul, Korea; participating in the restructuring program of a commercial bank; seeking and selecting strategic partners...

In the context of sustainable development with 3 pillars of Environmental - Social - Governance (ESG) increasingly becoming dominant, at the beginning of 2024, HDBank Board of Directors reached a consensus on establishing the ESG Committee based on renaming the Strategy and Investment Committee and supplementing a number of functions and duties to this committee.

The ESG Committee shall advise and support the Board of Directors in:
- Enhancing the Bank’s awareness of the importance and positive impacts of implementing ESG on the bank’s operations and long-term development;
- Providing orientation, directing the establishment of specific objectives, policies, and action programs related to ESG implementation;
- Directing the implementation and closely monitoring the deployment of approved policies, programs, solutions to urgently apply the ESG standards effectively into various activities, ensuring the bank’s sustainable growth and development, while contributing to economic development, environmental health, and social stability, bringing the highest benefits to all stakeholders.

FUNCTIONS AND TASKS

The Banking Technology Committee of the Bank advised the Board of Directors in issuing policies, information technology development strategies under their competences; making decisions on investments with technology application to banking operations.

COMMITTEE MEMBERS

Mr. Kim Byoungho

Chairman of the Board of Directors - Committee Chairman

Mr. Nguyen Huu Dang

Vice Chairman of the Board of Directors - Member

Mr. Lim Peng Khoon

Advisor to the Board of Directors - Member

Mr. Nguyen Phuc Duong

Director of the Information Technology and Electronic Banking Division - Member

HIGHLIGHTS OF ACTIVITIES

The Banking Technology Committee held 04 meetings in 2023 to focus on discussing and advising the Board of Directors on the following key issues:

Optimization plan for the 2023 technology budget;

Implementation plan for technology projects in 2023;

Major projects related to technology that are strategically important to the Bank: Core Banking system simplification and upgrade plan, technology resource restructuring plan, Digital Bank establishment project…

OPERATING DIRECTION

1

To advise the Board of Directors on planning key Technology projects for 2024 in priority order to achieve strategic objectives.

2

To support the Board of Directors in directing the Board of Management to implement major technology projects such as Digital Core Thought Machine, Vikki App by HDBank, ensuring successful project execution with minimal risk.

3

To participate in reviewing and consulting the 2024 budget plan for Information Technology and Digital Banking.

FUNCTIONS AND TASKS

Based on the provisions of the Law, regulations of the State Bank, the Charter of HDBank, and the Policies of the Board of Supervisors, the Board of Supervisors has completed the following tasks:

Monitoring compliance with legal regulations and the Charter of the Bank in the management and operation of the Board of Directors and the Board of Management;
Monitoring the operations of HDBank in accordance with legal regulations, the Charter of the Bank, and/or upon request of competent authorities;
Reviewing the six-month and annual financial reports of the Bank, assessing the reasonableness, legality, accuracy, and prudence in accounting, statistics, and preparation of financial statements;
Implementing internal audit activities according to the annual plan, including evaluating the effectiveness of HDBank’s internal control system;
Reviewing the Regulation on operations of the Board of Supervisors.

MEMBERS OF THE BOARD OF SUPERVISORS

As of December 31, 2023, the Board of Supervisors of HDBank consists of 04 specialized members - meeting the requirements for standards and conditions as stipulated by laws and by HDBank.

The composition of the Board of Supervisors and HDBank shares owned by Members of the Board of Supervisors are as follows:

No.	Full name	Position	Ownership percentage
1	Mr. Dao Duy Tuong	Chief of Board of Supervisors	2.74%
2	Ms. Duong Thi Thu	Member	0.001%
3	Ms. Bui Thi Kieu Oanh	Member	0.00%
4	Mr. Nguyen Le Hieu	Member	0.024%

ACTIVITIES IN 2023

Implementation of internal audit tasks

In 2023, the Board of Supervisors oriented and directed internal audits to focus on monitoring the bank’s activities to ensure compliance with legal regulations. Therefore, the Internal audits has strengthened inspections and monitoring of the first and second lines of internal control systems according to Circular 13/2018/TT-NHNN.

Internal audits conducted audits of 95 branches and transaction offices, 13 special topics, and 193 extraordinary cash / important printed letters audits. Additionally, the Board of Supervisors directed internal audits to inspect and review issues required by the State Bank, such as: reviewing internal regulations of commercial banks and credit granting to customers with large credit balances according to Document No. 2406/TTGSNH4 dated June 7, 2023; auditing the handling of non-performing loans (NPL), provisions, and use of reserves to manage operational risks of credit institutions according to Document No. 8861/NHNN-TTGSNH dated November 16, 2023; enhancing supervision and control over activities, areas with potential risks. The Board of Supervisors also directed internal audits to continue reviewing and improving internal regulations in internal audit activities in accordance with legal regulations.

With the development of digital transformation in banking activities, internal audits reviewed and inspected some activities to ensure compliance with regulations on safety and information security of HDBank.

During the year, the Board of Supervisors, internal audits issued reports to the Board of Directors, Board of Management, accompanied by recommendations/suggestions for systemic adjustments, process and regulation improvements, risk mitigation, and enhancement of operational quality.

Supervision of the management and operation activities of the Board of Directors and Board of Management

HDBank continued to enhance the internal control system by completing and applying documents according to the requirements of Circular 13/2018/TT-NHNN dated May 18, 2018 (Circular 13), applying an internal control system consisting of 3 independent protection lines to meet the requirements of Circular 13.

The Board of Directors established five (05) Committees: Human Resources Committee, Risk Management Committee, Credit Supervision Committee, Strategy and Investment Committee, Banking Technology Committee. Advising by these Committees, the Board of Directors issued Resolutions, Directives to direct and supervise the Board of Management in implementing the 2023 business plan approved by the General Meeting of Shareholders and legal regulations, directives of the State Bank on managing, monitoring banking activities, ensuring compliance with safety ratios the Bank’s operations.

The Board of Supervisors’ supervision of HDBank’s compliance with regulations for listed companies

The Board of Supervisors supervises HDBank’s compliance with regulations for listed companies in accordance with regulations and regularly updated information; the disclosure of information according to regulations is always supervised.

The review of financial statements, business operation reports

The Board of Supervisors reviewed the six-month and the annual financial statements audited by PwC Vietnam Limited Liability Company, assessing the reasonableness, accuracy, and prudence in accounting, statistics, and financial statement preparation in compliance with Vietnamese accounting standards, Vietnamese accounting regime applied to credit institutions issued by the State Bank of Vietnam and relevant legal regulations on preparation and presentation of financial statements.

MEETINGS OF THE BOARD OF SUPERVISORS

In 2023, the Board of Supervisors held eight (08) internal meetings with the participation of all members of the Board of Supervisors. The content and results of the meetings were as follows:

No.	Content of meeting	Result/content approved
1	To orient the internal audit activities in 2023.	The Board of Supervisors outlined tasks to perform in 2023.
2	To implement certain activities of the Board of Supervisors	The Chief of the Board of Supervisors pointed out certain issues should be reflected in the Periodic Report of the Board of Supervisors. The Chief of the Board of Supervisors directed to implement some inspection and monitoring tasks.
3	To assess Q1 2023 operations	The contents of the Quarterly Report of the Board of Supervisors should ensure a coherent structure, with clear and precise analytical content. Members of the Board of Supervisors and the Head/Deputy Head of the Internal Audit should promptly report to the Chief of the Board of Supervisors when they grasp information about the bank’s operations. To conduct the assessment of the internal control system of HDBank.
4	Report on HDBank’s operation	Members of the Board of Supervisors and the Head/Deputy Head of the Internal Audit should closely monitor the situation of overdue debts and the implementation of recommendations outlined in audit reports.
5	To review files/documents. To implement tasks outlined in the conclusion document of the State Bank Governor.	To review, examine data/records/documents to prepare for inspection work. To conduct inspections, monitor internal control systems to ensure compliance with the law. To supplement some contents into the monthly report to be submitted to the Chief of the Board of Supervisors. Upon the availability of the inspection results, the status of credit card issuance at the Tuyen Quang Branch should be immediately reported to the Board of Supervisor.
6	To implement tasks as requested by the State Bank authorities/Banking Supervision Inspectorate.	To review and prepare a comprehensive report to be sent to the competent authorities. To assign monitoring and supervision tasks to ensure that the Board of Supervisors fulfills their responsibilities and authorities. To summarize and evaluate the implementation status of the recommendations made. To request the Risk Management Division/Chief Executive Officer to report on the overall NPLs situation. To fully archive records and audit documents.

THE COORDINATION OF THE BOARD OF SUPERVISORS WITH THE BOARD OF DIRECTORS AND THE BOARD OF MANAGEMENT

The Board of Directors, the Board of Management, and the Board of Supervisors have established appropriate coordination mechanisms in monitoring, inspection, and control activities.
The recommendations and suggestions of the Board of Supervisors and internal audits are always took note by the Board of Directors, the Board of Management to promptly direct the relevant units to timely amend, supplement.

ORIENTATIONS FOR 2024 OPERATIONS OF THE BOARD OF SUPERVISORS

In 2024, the Board of Supervisors shall continue to perform the supervisory function, constantly improving the quality of supervision based on existing resources, with the following main tasks:

Supervising the Board of Directors, the Board of Management in managing the operations of HDBank, ensuring safety, effectiveness, following the key action programs of the Board of Directors and the Board of Management in accordance with the responsibilities and authorities of the Board of Supervisors as prescribed by law;
Implementing internal audit activities according to the plan; audit activities shall focus on evaluating the effectiveness of the internal control system as required by Circular 13/2018/TT-NHNN;

In internal audit activities, establishing automated data reports to serve remote supervision and risk identification;
Focusing on regular reporting to ensure the timely dissemination timely dissemination of information on the Bank’s operation to relevant parties;
Reviewing financial statements, assessing the reasonableness, accuracy, and prudence in accounting, statistics, and financial statement preparation;
Supervising information disclosure activities and shareholder relations of HDBank after listing according to legal regulations.

Internal audit Department of HDBank was established according to the regulations of the State Bank of Vietnam, as a specialized unit under the HDBank Board of Supervisors, responsible for conducting internal audit activities. Internal audit Department is organized in a vertical system and operates on the principles of independence, objectivity, and professionalism.

The operations of internal audit Department are led by the Head of Internal Audit Department with the support of Deputy Heads of Internal Audit and Heads of Internal Audit for Areas.

AUDIT PROCEDURE

Internal audit activities are implemented by unit, by area, and by function, using methods of cross-sectional, expansion, coordination audit, and in various forms, including: On-site audit at each unit/group of units for the business activities; specialized audit for business processes evaluated based on risk orientation, with elements lacking prevention/error control in operation, and specialized audit for systemic business activities; spot checks for the safety of the Bank’s treasury, cash, important printed papers, ATM key management, etc., to detect/control arising violations timely;

Remote monitoring to timely detect errors in operations, identify critical risk areas. Audit is organized annually according to the plan or at the request of the Board of Supervisors, or when signs of misconduct and potential risk arises.

Annually, based on the results of the previous year’s auditing to identify risk areas, based on the bank’s operational direction, leadership management objectives, at the suggestion of the Board of Directors, the Board of Supervisors develops and approves the next year’s audit plan.

LEGAL AND COMPLIANCE

SUMMARY OF LEGAL COMPLIANCE ACTIVITIES IN 2023

With a clear understanding of the foundational role and backbone of regulatory and compliance work in the operations of an enterprise in general and specifically within the banking sector, through collective efforts and unity, HDBank’s legal activities have been carried out and achieved the set objectives as follows.

Ensuring legal safety in activities and operations throughout the HDBank’s system

In 2023, some legal regulations related to banking activities underwent changes to adapt to the fluctuating market economic conditions, such as regulations on lending activities for customers, restructuring repayment terms while maintaining debt groups to support customers in difficulty (due to the Covid-19 pandemic, economic downturn), conditions for foreign borrowing without government guarantees, guidance on anti-money laundering, digital signatures, personal data protection, etc.

Continuous review, adjustment, establishment, and legal control of internal regulations, business process procedures, products/services, and transaction form templates, as well as operational activities, have been consistently carried out and well perfected, aligning with the actual situation and general legal system. Additionally, legal control work ensures legal safety, protection, and enhancement of HDBank’s legal rights and interests in transactions, contracts, agreements with partners, and customers are meticulously performed, meeting the business, development, and safety needs of the system.

Digital Transformation in Banking Operations

In line with the digital transformation trend in the banking industry, HDBank’s legal work has been reflected through the active participation in digital transformation projects, supporting units in linking and cooperating with partners to develop digitized products and services, providing a “digital” and streamlined experience, reducing procedures for customers. Additionally, HDBank actively contributed opinions on draft legal regulations regarding electronic transactions and regulations related to “Digital Banking” activities at the State Bank, Banking Association, etc.

Bank Representation in Legal Proceedings

The Legal Department has participated, supported, and provided advice to resolve disputes, complaints, and handle risks resulting from violations by employees to protect the bank’s legal rights, interests, and minimize related damages.

Furthermore, legal activities also include acting as the Representative of the Bank to work with authorities, attending court sessions to protect the Bank’s legal rights and interests.

Participation in Councils, Project Committees

Legal Department has actively participated in product council meetings to provide legal advice on emerging issues, new policies, products, and business programs of HDBank, enhancing the overall quality and efficiency of HDBank’s operations.

In particular, Legal activities played an active role in key projects such as restructuring weak credit institutions, cooperation projects to develop digital products for individual and corporate customers, investment projects, project on reviewing, upgrading internal document systems and transaction forms of HDBank...

Support for Debt Handling, Asset Recovery

The implementation of debt handling and asset recovery has been intensified across the HDBank system. Compliance work participated in, supported early debt resolution for customers to minimize bad debts. Especially, amidst the negative impact of the Covid-19 pandemic since 2021, despite the economic market still being sluggish and volatile, many customers are still affected and face difficulties in debt repayment. Compliance work provided legal advice, debt resolution for special cases of customers, thereby meeting customer expectations and ensuring capital safety for the bank.

Dissemination of Legal Information

Training and disseminating legal information were conducted through various methods to enable staff to understand and apply them to their work. This included direct dissemination, updating of basic legal regulations in banking operations through online training courses, legal assessment reports when new legal documents are issued, informing through Legal Bulletins, and periodic reports on newly issued legal policies.

Participation in Drafting Legal Regulations

HDBank participated in providing insights for drafting legal regulations to contribute to improving the transparency and alignment of legal regulations with the business activities of commercial banks. In particular, HDBank actively coordinated with the Banking Association to propose, advise, and recommend amendments and supplements to legal regulations. Notable activities in the past year included drafting amendments to the Law on Credit Institutions (a critical sectoral law regulating the operations of credit institutions in general and commercial banks in particular), State Bank’s Circulars on corporate bond trading, conditions for foreign borrowing without government guarantees, operational network of commercial banks, lending activities, disbursement methods of credit institutions, foreign bank branches for customers, etc.

CHALLENGES AND SOLUTIONS

With the instabilities and impacts of the global and domestic economy, resulted in the operations of businesses in general and credit institutions in particular facing many difficulties, it is a significant challenge to balance competitiveness and business targets while adhering to legal regulations and ensuring the safety of the bank’s business activities.

Additionally, the constant changes in policies, legal regulations, and the application of legal principles by authorities also significantly affect legal activities.

RESULTS OF DIGITAL TRANSFORMATION APPLICATION IN OPERATIONS

2023 witnessed a strong shift in HDBank’s digital transformation efforts, which was the fruit of the preparation journey and system conversion efforts, as well as the collective effort and unity from Divisions/ Departments and the Legal Department in particular.

In terms of online payment account opening, Legal Department closely monitored, advised, and supported business units “anytime, anywhere” in exploiting customer segments, applying solutions, and enhancing the “digital” experience for customers. As of December 31, 2023, the number of successfully opened online payment accounts is approaching the milestone of one million accounts. Especially, within just 3 months of collaboration with a financial company, over 44 thousand individual customers have opened accounts.

In the credit sector, with the motto of “Committed to your best returns”, HDBank developed and implemented online loan journeys for customers. HDBank collaborated with the Telecommunications Corporation (VNPT) to grant overdraft limit on payment accounts for individual customers using VNPT subscriptions and wallets. This is a bright spot in the journey of serving and maximizing benefits for customers, facilitating customers from the delta to the border region, or from remote islands to easily access consumer loans without having to visit the bank in person. In a short period of deployment, from September 2023 to the end of December 2023, over 600 customers have been successfully granted credit with a total credit limit of over 2 billion VND.

Especially, at the end of 2023, HDBank developed and implemented flexible loan journeys based on existing individual customers who have been granted credit card limits. With simple, fast, and flexible loan procedures, while still ensuring risk management and legal compliance, individual customers can be disbursed one hundred million VND to meet their consumer credit needs. In just a short period of less than a month since the implementation, by the beginning of January 2024, nearly 600 customers have borrowed with a total outstanding balance reaching nearly 6 billion VND.

Additionally, other online loan journeys such as savings secured loan, overdraft… are still being finalized to be able to serve customers in the future.

It can be said that HDBank’s digital journeys have provided convenience for customers, facilitating customers to access credit and avoid the situation of black credit in the context of many socio-economic difficulties. HDBank’s digital transformation work not only meets customer needs but also contributes to economic development and social stability.

LEGAL OPERATIONS DIRECTION FOR 2024

To continue the achievements and align with HDBank’s direction and policies, the compliance and regulatory operations set higher goals suitable for the upcoming period. Specifically:

Building Legal Regulations and Legal Dissemination within the System

HDBank will continue to provide insights for drafting legal documents in the banking and financial sector, as well as other related fields. Additionally, close collaboration with the Banking Association, the State Bank, and relevant agencies will be maintained to timely propose and improve legal regulations to serve the bank’s business activities and enhance risk management.
Simultaneously, training and disseminating legal knowledge and regulations to units and staff within the system will be continued to ensure awareness of changes and new legal provisions regarding banking operations to meet job requirements.

Compliance and Regulatory Operations Focus on Dual Goals of ensuring compliance with legal regulations while creating additional advantages for HDBank’s business operations

Legal Department shall continue to provide legal advice aligned with the bank’s development strategy for the overall development of the HDBank system, supporting legal matters for business units, operations, and participating in the bank’s key projects, ensuring safety and compliance in the Bank’s operations.
For digital transformation efforts: Legal activities will intensify efforts to ensure that the digital transformation strategy is implemented in compliance with current legal frameworks, ensuring that products, services provided to customers, partners, and internal operational processes are handled smoothly, quickly, streamlined, and safely.
For the Bank’s Business Activities: Legal activities shall be continuously, comprehensively implemented and adaptively to circumstances to ensure maximum flexibility and effectiveness for the Bank’s business activities. Anti-money laundering and anti-corruption efforts will be closely monitored and rigorously enforced as required by regulations, the State Bank, and relevant authorities. Additionally, compliance work will closely monitor practical situations and provide timely preventive solutions and legal risk management to protect the bank’s legal rights and interests. Furthermore, HDBank will remain vigilant regarding global and domestic developments to ensure providing appropriate and safe solutions for the bank, especially in international payment activities and cooperation with foreign investors.
Adherence to Current Regulations: The Bank should ensure compliance with regulations on information disclosure, transparency in the operations of listed companies, implementing policies. Risk management should always adhere to the requirements and criteria of Basel III standards.

TRANSACTIONS, REMUNERATION AND BENEFITS OF BOARD OF DIRECTORS, BOARD OF SUPERVISORS, AND BOARD OF MANAGEMENT

HDBank always ensures compliance with legal regulations and internal regulations of the Bank on the authority to approve and responsibility to disclose information regarding remuneration/income of the Board of Directors, Board of Supervisors, Board of Management; transactions of HDB shares by Internal Persons and their related persons; transactions between HDBank and related parties. Specifically:

The total annual remuneration and allowances of the Board of Directors, Board of Supervisors of HDBank is approved at the Annual General Meeting of Shareholders. Specific remuneration/income for the year of each member of the Board of Directors, Board of Supervisors, Board of Management is detailed in the audited consolidated financial statements and the Annual report of the Bank.

Resolutions of the Annual General Meeting of Shareholders, audited consolidated financial statements, and the annual report of HDBank are disclosed on the HDBank website in accordance with regulations.

HDBank’s Internal Persons and their related persons, when there is a need to trade HDB share with an expected total transactions value (at par value) equal to or greater than VND 50 million in a day, or equal to or greater than VND 200 million in a month, have complied with regulations on information disclosure, reporting to the State Securities Commission, Stock Exchange before and after conducting transactions. Specifically:
- Information about the expected transaction is disclosed at least 03 working days before the scheduled transaction date;
- The expected transaction execution period is up to 30 days from the registration date for transaction execution;
- Information about the transaction results with the reasons for not executing the transaction or not completing the registered volume (if any) is disclosed within 05 working days from the completion date of the transaction (in case the transaction ends before the registration deadline) or the end of the expected transaction execution period.

Transactions between HDBank and related parties (including related persons, Internal Persons, and related persons of the Internal Persons of HDBank) are approved by the General Meeting of Shareholders/Board of Directors in accordance with the authority prescribed by legal regulations and HDBank’s Charter. Resolutions/Decisions of the General Meeting of Shareholders, Board of Directors approving these transactions and other related issues are disclosed on the HDBank website (Investor Relations - Information Disclosure) within 24 hours from the issuance date of the Resolution/Decision.

The list of related persons, Internal Persons, and related persons of the Internal Persons of HDBank is reported quarterly to the State Bank and stated in the Company’s Corporate Governance Report (according to the template applicable to public companies) disclosed every 06 months as required.

REMUNERATION/SALARY, BONUS, COMPENSATION, OTHER BENEFITS AND EXPENSES FOR EACH OF THE MEMBER OF THE BOARD OF DIRECTORS, BOARD OF SUPERVISORS, BOARD OF MANAGEMENT:

Remuneration/income for the Board of Directors in 2023

Full name	Position	2023 VND million	2022 VND million
Mr. Kim Byoungho	Chairman, Independent member	5,177	1,350
Mdm. Nguyen Thi Phuong Thao	Permanent Vice Chairwoman	1,851	1,879
Mr. Luu Duc Khanh	Vice Chairman	1,027	3
Mr. Nguyen Thanh Do	Vice Chairman	2,227	1,346
Mr. Nguyen Huu Dang	Vice Chairman	3,541	1,579
Mr. Le Manh Dung	Independent member	1,171	646
Mdm. Nguyen Thi Tam	Member (by April 26, 2023)	1,035	855
Mdm. Le Thi Bang Tam	Chairwoman (by April 29, 2022)	-	474
Mr. Chu Viet Cuong	Member (by April 29, 2022)	-	205
Mr. Lim Peng Khoon	Member (by April 29, 2022)	-	71
		16,029	8,408

Remuneration/income for the Board of Management, Chief Finance Officer and Chief Accountant in 2023

Full name	Position	2023 VND million	2022 VND million
Mr. Pham Quoc Thanh	Chief Executive Officer	2,174	6,060
Mr. Nguyen Minh Duc	Deputy Chief Executive Officer	2,180	3,940
Mr. Le Thanh Tung	Deputy Chief Executive Officer	1,569	1,702
Mr. Nguyen Van Hao	Deputy Chief Executive Officer	2,141	3,223
Mr. Nguyen Dang Thanh	Deputy Chief Executive Officer	1,858	3,004
Mr. Le Thanh Trung	Deputy Chief Executive Officer	2,158	1,309
Mr. Tran Hoai Nam	Deputy Chief Executive Officer	2,054	2,145
Mr. Tran Thai Hoa	Deputy Chief Executive Officer	1,347	2,067
Mr. Nguyen Canh Vinh	Deputy Chief Executive Officer	2,601	323
Mr. Tran Xuan Huy	Deputy Chief Executive Officer	806	-
Mdm. Nguyen Doan Duy Ai	Deputy Chief Executive Officer (by June 20, 2022)	-	2,502
Mr. Pham Van Dau	Chief Finance Officer	1,359	1,631
Mdm. Ho Dang Hoang Quyen	Chief Accountant	1,038	1,411
		21,285	29,317

The remunerations/incomes above are the net amounts after deducting personal income tax in accordance with current laws.

EVALUATION OF INDEPENDENT BOARD MEMBERS ON THE IMPLEMENTATION OF CORPORATE GOVERNANCE POLICIES AT HDBANK

It is believed that in 2024 and the years to come, HDBank shall continue to achieve high and sustainable growth, enhancing the Bank’s position and competitiveness, reaching the developed strategic goal of becoming the leading bank in the system, a pioneer in digital technology, being governed under the modern model, according to international practices.

In 2023, given the economy in general and the banking sector in particular facing many challenges, the Board of Directors of HDBank effectively leveraged its leadership role, providing direction, oversight, and support to the Board of Management in implementing programs and plans according to the resolutions of the Annual General Meeting of Shareholders, steering HDBank’s operations to achieve positive results, continuing impressive growth in scale, affirming the bank’s position and brand, while ensuring the best interests of all stakeholders.

The organizational, governance structure and internal regulation system are being adjusted to align with the best international standards and practices, contributing to improving operational efficiency and enhancing forecasting, prevention, and control capabilities for potential risks, ensuring smooth, safe, and stable operation. HDBank is urgently deploying policies, programs, and solutions to effectively adopt ESG (Environmental, Social, Governance) standards in the Bank’s activities, aiming at sustainable development, improving competitiveness, and making positive contributions to the environment and society.

Emphasizing human resources activities, HDBank is developing a professional working environment, establishing the clear policies on recruitment, training, career promotion, and offering the best compensation and welfare schemes for employees. Exciting internal activities and corporate culture dissemination programs, with the motto “A Happy Workplace” are regularly organized to enhance employee engagement with the bank.

The activities of the Board of Directors in 2023 were carried out in accordance with the resolutions of the General Meeting of Shareholders, compliance with the Charter, internal policies, and governance standards. The Board members always adhere to the responsibility of disclosing interests and fulfilling their duties of monitoring and preventing conflicts of interest, protecting the rights and interests of the bank, shareholders, and investors. Transactions with related parties are conducted on the objective basis without any terms that create an advantage over terms proposed by other independent partners

HDBank consistently complies with regulations on information disclosure and pays attention to shareholders’ interests. Shareholders are guaranteed to be treated equally, be able to access information fully, accurately, transparently and are given the best conditions to exercise their rights. Fulfilling commitments, HDBank completed the 2022 dividend payment within the stipulated time frame.

With effective and transparent governance according to the best standards and practices and outstanding business performance, HDBank was honored in the Top 10 most prestigious and effective public companies in Vietnam in 2023 - the ranking includes public companies that demonstrate superiority in capacity, growth potential, sustainable development ability, quality of governance and solid position in the industry. It is believed that in 2024 and the years to come, HDBank shall continue to achieve high and sustainable growth, enhancing the Bank’s position and competitiveness, reaching the developed strategic goal of becoming the leading bank in the system, a pioneer in digital technology, being governed under the modern model, according to international practices.

INDEPENDENT BOARD MEMBER

LE MANH DUNG

GOVERNANCE AND EXECUTIVE ORIENTATIONS FOR 2024 OF THE BOARD OF DIRECTORS

1

To focus on directing HDBank’s entire system to decisively, flexibly implement action plans in accordance with market developments, maximizing business advantages to achieve the growth targets set for 2024.
The Board of Directors will closely coordinate with the Chief Executive Officer and the Board of Management to provide guidance and promptly address issues arising while performing business tasks.

2

To accompany and support the Board of Management to implement transformation programs, enhancing the in such those programs as program sponsors participation of Professional Committees under the Board of Directors in such those programs as program sponsors.
The Board members should perform their governance tasks with high responsibility, supporting the Board of Management in implementing key programs and projects with potential to directly and positively impact the Bank’s performance according to strategic objectives.

3

To continue directing HDBank’s participation in the credit institutions restructuring program, ensuring benefits for HDBank in implementing project.

4

To direct and support the Board of Management to quickly implement procedures to complete the plan on purchasing shares of a securities company for the purpose of turning such company into a subsidiary/affiliate of HDBank following the policy approved by the General Meeting of Shareholders, promoting the development of corporate financial advisory services and other financial services, contributing to increasing the value of HDBank’s shares.

5

To direct the improvement of processes, digitization of activities, intensifying customer attraction, promoting the offering of products and services via digital channels, enhancing the application of technology to handle internal processes in order to improve work efficiency and the competitiveness of products, services as well as HDBank brand in the market.

6

To direct and support the Board of Management in enhancing capital mobilization activities to supplement long-term capital, preparing financial resources for strategic projects, adapting customers’ borrowing demand and improving safety indicators; to direct the aggressive and effective implementation of the Plan on restructuring associated with handling non-performing loans for the 2021 - 2025 period, promoting the handling and recovery of non-performing loans, improving credit quality.

7

To continue directing and supervising the research, amendment, and enhancement of mechanisms, policies, and internal regulations towards strong reform of regulations and procedures, creating favorable conditions for people and businesses to access bank capital, while improving the human resources quality and work efficiency.

8

To properly organize well the periodical meetings of the General Meeting of Shareholders and the Board of Directors throughout the year.

Chairman of the Board of Directors HDBank, Mr. Kim Byoungho

HDBank’s Board of Directors always encourages and facilitates the Bank’s leaders at all levels to participate in courses, discussions related to the Bank’s governance under domestic and international standards. HDBank’s Board members have participated in a number of seminars on corporate governance and have extensive experience in managing various economic organizations and credit institutions.

Mr. Kim Byoungho - Chairman, Independent Board Member has been granted a certificate in Corporate Governance following a course organized by SK Group.

The participation of the Board members in corporate governance programs in 2023:

Mr. Kim Byoungho - Chairman, Independent Board Member participated in training courses, High-Level Workshop on Corporate Governance for the Board Members and Directors Summit organized by SK Group - South Korea; Annual Forum 2023: Green Finance and E&S Governance organized by the Vietnam Institute of Directors (VIOD).

SHAREHOLDER AND INVESTOR RELATIONS

IMPRESSIVE FIGURES ON HDBANK SHARE PERFORMANCE AND INVESTOR RELATIONS IN 2023

Investor Conference, updating business results in 2023 and information on directions and prospects for 2024

46.4%

THE GROWTH RATE OF HDBANK’S MARKET CAPITALIZATION IN 2023

The strong and sustainable business growth, the attention and companionship of domestic and international investors and the positive results of shareholder and investor relations activities in recent years have contributed to elevating HDBank’s position in the market. By the end of 2023, HDBank’s market capitalization reached VND 58,719 billion, an increase of 46.4% YOY, placing the Bank among the top 5 companies in the VN30 basket with the strongest market capitalization growth rate.

54.3%

THE GROWTH RATE OF HDB SHARE PRICE IN 2023

Closing the session on December 29, 2023, HDB stock price was at VND 20,300/stock, marking an increase of 54.3% YTD. Despite market fluctuations, the growth rate of HDB stock price outperformed the market, being 4.3 times higher than the increase of the VN30 index (12.6%) and 4.5 times the increase of the VNIndex (12.2%).

25%

THE DIVIDEND RATIO THAT HDBANK SHAREHOLDERS RECEIVED IN 2023

Maintaining the tradition of regularly paying dividends at high rate, in 2023, HDBank completed dividend payments with a total ratio of 25% in cash and stocks in accordance with the resolution of the General Meeting of Shareholders. This is a high dividend ratio in the industry, indicating HDBank’s high performance and HDBank’s commitment to bringing the highest benefits to shareholders and investors.

Top10

HDB IS AMONG THE TOP 10 STOCKS WITH THE LARGEST NET PURCHASES BY FOREIGN INVESTORS

Despite of the stock market fluctuations and strong net selling by foreign investors across the market in 2023, HDBank stocks still attracted significant net purchases from large and reputable foreign investment funds. With a net purchase of 39.3 million shares by foreign investors, HDB is among the Top 10 stocks with the largest net purchases by foreign investors on the HoSE in 2023, room for foreign investors has regularly been filled.

#1

HDBANK IS THE ONLY BANK SELECTED TO BE INCLUDED IN THE VN-DIAMOND INDEX BASKET

In October 2023, Ho Chi Minh City Stock Exchange announced that HDBank met all the criteria and was the only bank selected to be included in the VN-Diamond Index basket - a collection of 18 companies listed on the HoSE with good growth potential and high attractiveness to investors, meeting various criteria such as market capitalization, liquidity... Particularly, the key criteria for the attractiveness of VN Diamond is that selected stocks must have great appeal to foreign investors with the “foreign room” being filled at least 95%.

#5

TO BE HONORED FOR 5 CONSECUTIVE YEARS AT THE VIETNAM LISTED COMPANY AWARDS

The Vietnam Listed Company Awards (VLCA) is the largest annual event assessing the activities of listed companies, organized by Ho Chi Minh City Stock Exchange (HoSE), Hanoi Stock Exchange (HNX), and Vietnam Investment Review Magazine. In 2023, HDBank was honored in 2 important categories: awarded as “Listed large-cap company with the best annual report - Financial service industry” for the 5^th consecutive year; recognized as “the listed company with the best organization of the AGM” in the first year the organizers evaluated and awarded this category. Furthermore, HDBank continued to be included in the VNSI (Vietnam Sustainable Index) basket, comprising 20 companies highly appreciated by HoSE for sustainability-related activities. These awards are evidence of the high appriciation of the organizers for HDBank in applying the best international standards on corporate governance, being transparent in all activities, and ensuring the highest interests of shareholders and investors.

SHAREHOLDER AND INVESTOR RELATIONS

Shareholder and investor relations have always been prioritized by HDBank, progressively professionalizing to bring the highest benefits to all stakeholders. The Bank always ensures full compliance with corporate governance regulations and endeavors to best meet the requirements of shareholders and investors for timely and comprehensive updates on activities, facilitating shareholders’ rights exercise and contributing to the Bank’s development.

With this direction, in recent years, HDBank has continuously innovated and improved investor relations activities. HDBank has been one of the pioneering listed companies to organize both online and offline AGM since 2021. Domestic and international shareholders can easily participate in the AGM and pose questions to the Bank’s Board of Directors from any location. Voting and elections have been conducted entirely online on mobile devices, with a friendly, easy-to- operate interface and highly secure. To support shareholders, HDBank has established an online support hotline to provide comprehensive and timely guidance from the date of publishing the AGM Materials until the end of the AGM. The AGM Materials as well as other documents subject to disclosure have always been fully prepared and published on time in both Vietnamese and English. In 2023, the Bank completed the dividend payment in cash and shares with a total ratio of 25% prior to the prescribed deadline.

HDBank’s efforts have been recognized by shareholders, investors, and management authorities. At the 2023 Vietnam Listed Company Awards (VLCA) ceremony 2023, HDBank was honored as the listed company with the best organization of the AGM.

LAW-ABIDING, TRANSPARENT AND EFFECTIVE ELECTION PROCEDURES

1

Procedures for electing members of the Board of Directors, Board of Supervisors are always rigorously implemented by HDBank, ensuring compliance with the law and the Bank’s Charter, while providing timely, transparent information to shareholders and investors.

2

At least 30 days before the AGM, the Board of Directors publishes information about the number of members expected to be elected and the required criteria of each position for shareholders to acknowledge information and exercise their rights to nominate or selfnominate candidates as regulated. Subsequently, the Board of Directors submits the list of candidates to be elected to the BOD and their profiles to the competent authorities for consideration and approval.

3

Information about candidates should be published on HDBank’s website, Ho Chi Minh City Stock Exchange, and other media outlets for shareholders to review before making decisions. The voting, election, and vote counting process is clearly informed by the Bank, including voting and election guidelines published on the website before the AGM and clearly disseminated at the AGM. Election results are announced immediately upon the completion of the vote counting at the AGM in the presence of shareholders, management authorities, and independent auditors. After the AGM, resolutions and meeting minutes of the AGM are published within 24 hours of issuance, and HDBank reports information about elected members in compliance with the prescribed deadlines.

TRANSPARENT INFORMATION DISCLOSURE, OPEN COMMUNICATION WITH SHAREHOLDERS AND INVESTORS

HDBank not only fulfills responsibilities as a listed company but also always accompanies and supports investors and shareholders in timely and effectively accessing information about the Bank’s activities. Shareholders can easily exercise their rights and contribute to HDBank’s development through various communication channels such as on regular direct and online meetings, via emails, and contacting the Bank’s hotline. Information disclosure activities always fully implemented in both Vietnamese and English in accordance with prescribed deadlines. All comments, questions, and requests from investors are comprehensively and promptly received and responded to by HDBank’s Investor Relations department.

In 2023, HDBank has promoted interaction and communication with investors, shareholders on online platforms to better meet the requirements of shareholders and investors for diversifying information reception channels. At the same time, the HDBank increased the scale and frequency of participation in domestic and international investor engagement events, attracting the attention of over 9,000 investors. Such those efforts have been highly appreciated by investors and shareholders. According to the results of event quality surveys, “Good” and “Very good” responses averaged 94%.

Investors can update information about HDBank through various channels, including:

Ho Chi Minh City Stock Exchange website:

https://www.hsx.vn/Modules/Listed/Web/SymbolView/706

Official website of HDBank

https://hdbank.com.vn/vi/investor

HDBank hotline

1900 6060

Contacting the Investor Relations Department of the Bank:

Investor Relations Department - the BOD Office, Ho Chi Minh City Development Joint Stock Commercial Bank

Phone

+84 28 6291 5669 (Ext 1481)

Email

ir@hdbank.com.vn

In 2024, HDBank’s investor relations activities will continue to be innovated and improved towards professionalizing and standardizing processes, actively researching and applying the best international practices in investor relations activities in order to create even better conditions for shareholders and investors to fully exercise their rights and obligations as prescribed, while contributing to enhancing the reputation and position of HDBank.

INFORMATION ABOUT SHAREHOLDER STRUCTURE, SHARES, AND STOCK PRICES

SHARES

The total ordinary shares of HDBank as of December 29, 2023 was 2,907,632,132 shares, equivalent to the charter capital of VND 29,076,321,320,000 including:

OUTSTANDING SHARES

2,892,550,610

shares

TREASURY SHARES

15,081,522

shares

UNRESTRICTED SHARES

2,684,696,648

shares

RESTRICTED SHARES

222,935,484

shares

HDBank shares are not traded in foreign countries and territories
In 2023, the Bank did not repurchase shares issued as treasury shares.

SHAREHOLDER STRUCTURE AS OF DECEMBER 29, 2023

HDBank’s shareholder structure according to the percentage of ownership (major shareholders - owning equal to or greater than 5% of voting share capital, minor shareholders):

No.	Subject	Number of shareholders	Number of shares owned	Ownership percentage
1	Major shareholders (*)	1	417,744,361	14.37%
2	Minor shareholders	20,079	2,489,887,771	85.63%
	Total	20,080	2,907,632,132	100.00%

(*) Sovico Holdings Joint Stock Company is the only major shareholder of HDBank with an ownership percentage of 14.37% of the Bank’s voting share capital. All other shareholders own less than 5% of HDBank’s.

OWNERSHIP STRUCTURE BY TYPE OF SHAREHOLDERS

No.	Type of shareholders	Number of shares	Ownership percentage	Number of shareholders	Structure of shareholders (*)
No.	Type of shareholders	Number of shares	Ownership percentage	Number of shareholders	Organization	Individual
1	State-owned shareholders	89,318,653	3.07%	6	6	0
2	Major shareholders	417,744,361	14.37%	1	1	-
3	The Bank’s Labour Union	724,146	0.02%	1	1	-
4	Treasury shares	15,081,522	0.52%	1	1	-
5	Other shareholders	2,384,763,450	82.02%	20,071	230	19,841
	Domestic	1,815,822,970	62.45%	19,404	113	19,291
	Foreign	568,940,480	19.57%	667	117	550
	TOTAL	2,907,632,132	100%	20,080	239	19,841
	In which:
	Domestic	2,338,691,652	80.43%	19,413	122	19,291
	Foreign	568,940,480	19.57%	667	117	550

HISTORY OF CHARTER CAPITAL INCREASE

Time	Charter capital after the increase (VND billion)	Charter capital increased in the period (VND billion)	Notes
February 1989	3	0	The initial charter capital
June 1992	5	2	Issuance of additional shares to existing shareholders
October 1993	10	5	Issuance of additional shares to existing shareholders
April1994	22	12	Issuance of additional shares to existing shareholders
January 1998	42	20	Issuance of additional shares to existing shareholders
August 1998	50	8	Issuance of additional shares to existing shareholders
February 1999	60	10	Issuance of additional shares to existing shareholders
June 2002	70	10	Private issuance of shares
December 2004	150	80	Issuance of additional shares to existing shareholders
August 2005	200	50	Issuance of additional shares to existing shareholders
December 2005	300	100	Issuance of additional shares to existing shareholders
December 2006	500	200	Issuance of additional shares to existing shareholders
November 2007	1,000	500	Issuance of additional shares to existing shareholders and employees
October 2008	1,550	550	Issuance of additional shares to existing shareholders and employees
August 2010	2,000	450	Issuance of additional shares to existing shareholders and employees
January 2011	3,000	1,000	Issuance of additional shares to existing shareholders and employees
June 2012	5,000	2,000	Issuance of additional shares to existing shareholders and employees
December 2013	8,100	3,100	To increase capital due to the merger of Dai A Commercial Joint Stock Bank in to HDBank
October 2017	8,829	729	Issuance of shares to pay dividends and issuance of shares to increase capital from owners’ capital
December 2017	9,810	981	Private issuance of shares
October 2020	12,708	2.898	Issuance of shares to pay dividends and issuance of bonus shares from owners’ capital
December 2020	16,089	3,381	To issue shares to pay dividends
October 2021	20,073	3,984	To issue shares to pay dividends
July 2022	20,273	200	PIssuance of ESOP shares to employees
November 2022	25,303	5,030	Issuance of shares to pay dividends
July 2023	29,076	3,773	Issuance of shares to pay dividends

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GREEN GOVERNANCE

SOARING HIGH

OVERVIEW ON CORPORATE GOVERNANCE

THE BOARD OF DIRECTORS’ ASSESSMENT OF THE BANK’S PERFORMANCE

STRUCTURE OF THE BOARD OF DIRECTORS

ASSIGNMENT OF DUTIES OF THE BOARD OF DIRECTORS

REPORT ON THE ACTIVITIES OF THE BOARD OF DIRECTORS AND INDEPENDENT MEMBERS OF THE BOARD OF DIRECTORS IN 2023

REPORT ON THE ACTIVITIES OF COMMITTEES UNDER THE BOARD OF DIRECTORS

LEGAL AND COMPLIANCE

TRANSACTIONS, REMUNERATION AND BENEFITS OF BOARD OF DIRECTORS, BOARD OF SUPERVISORS, AND BOARD OF MANAGEMENT

REMUNERATION/SALARY, BONUS, COMPENSATION, OTHER BENEFITS AND EXPENSES FOR EACH OF THE MEMBER OF THE BOARD OF DIRECTORS, BOARD OF SUPERVISORS, BOARD OF MANAGEMENT:

EVALUATION OF INDEPENDENT BOARD MEMBERS ON THE IMPLEMENTATION OF CORPORATE GOVERNANCE POLICIES AT HDBANK

GOVERNANCE AND EXECUTIVE ORIENTATIONS FOR 2024 OF THE BOARD OF DIRECTORS

SHAREHOLDER AND INVESTOR RELATIONS

IMPRESSIVE FIGURES ON HDBANK SHARE PERFORMANCE AND INVESTOR RELATIONS IN 2023

INFORMATION ABOUT SHAREHOLDER STRUCTURE, SHARES, AND STOCK PRICES

SHARES

SHAREHOLDER STRUCTURE AS OF DECEMBER 29, 2023

OWNERSHIP STRUCTURE BY TYPE OF SHAREHOLDERS

HISTORY OF CHARTER CAPITAL INCREASE