In 2025, HDBank reaffirmed its leadership position with an intelligent risk management system, serving as the core infrastructure for its sustainable development strategy. With a robust financial capacity, evidenced by a consolidated CAR of 16.72% and a strictly controlled NPL ratio of 1.66%, HDBank has successfully realized its roadmap toward the highest international standards, from Basel III and IFRS 9 to a 5-year ESG strategic framework consulted by leading Big 4 consulting firms.

A breakthrough highlight of the year was the comprehensive digitalization of our credit process by integrating the Credit Rating system into the RLOS and CLOS platforms, optimizing both approval turnaround time and accuracy. Notably, the proactive standardization of Related Party transaction governance (consulted by Big 4 firms) in line with international best practices ensures absolute transparency. This forms a solid foundation for HDBank to provide effective and safe support to its strategic related-party partners. The combination of modern quantitative technology and transparent governance has established HDBank as a trusted financial institution, driving exceptional value for global investors and shareholders.

HDBank has implemented an internal control system in accordance with the SBV’s Circular No. 13 and the Basel standards, which includes three (3) lines of defense and five (5) key activities as demonstrated in the following model:

The system of regulations, limits, and prudential ratios is continuously refined, ensuring compliance with international standards and the SBV regulations.

The system of institutional documents is structured into three clear levels of authority: Regulations, Provisions, and Guidelines, ensuring that all business processes are standardized and strictly controlled. Notably, the implementation of advanced liquidity ratios, LCR and NSFR, since 2024, alongside Basel III thresholds from 2025, has enabled HDBank to proactively hedge against market volatility and align closely with the latest drafts of the regulatory authorities.

Our limits related to credit transactions, money market transactions, and investments, along with prudential ratios such as liquidity, asset and liability management, etc., are regularly updated in alignment with the SBV regulations and the nature of our operations.

HDBank places special emphasis on its remote monitoring, control, and inspection system as the basis for detecting, warning, and preventing risks before, during, and after transactions.

The system applies multiple methods simultaneously, including automated checks through the IT system, periodic reviews by specialized control departments, or real-time checks during each transaction processing, in which HDBank has monitored suspect transactions (if any) on-site. HDBank also launched the Internal Control System Restructuring project with the goal of developing a flexible post-control model while providing more monitoring and early warning resources to facilitate effective risk management.

Reports on the results of on-site inspection and monitoring, along with specific data, analysis, warnings, and proposals, are promptly sent to the Board of Management and the Board of Directors for appropriate and timely instructions on response measures.

In 2025, HDBank marked a strategic milestone in credit risk management by integrating international standards and quantitative technology into our operations. We focus on building a credit portfolio that is safe, transparent, and socially responsible.

• Refining policy and compliance frameworks: HDBank has finalized its internal regulations to ensure full compliance with the Law on Credit Institutions 2024 and relevant Circulars from the SBV. By integrating risk management requirements directly into the design phase of new products, we have established a robust legal defense mechanism and ensured operational consistency bank-wide.
• Pioneering ESG and sustainable finance: Built on a solid foundation developed over many years with support from organizations such as IFC, DEG, and LeapFrog, HDBank continues to lead the market in integrating Environmental and Social (E&S) standards into our appraisal processes. Adhering to these international benchmarks enables us to proactively direct capital toward green projects, translating our commitment to sustainable development into tangible actions.
• Going live the next-generation Internal Credit Rating system: The Internal Credit Rating system, featuring advanced quantitative models (details in section 7.2.5), officially went live and was adopted at HDBank. By integrating model outputs into the loan origination process, we have enhanced the objectivity of appraisals, improved the accuracy of assessments of customer financial capacity, and optimized approval efficiency.
• Implementing comprehensive digitalization with the ĐiCore Project: HDBank is accelerating the roadmap for our next-generation Core Banking system, ĐiCore. As a centralized operating platform, ĐiCore enables seamless integration of risk data, aiming for full automation of control gates and real-time limit monitoring once the system officially goes live.
• Proactively hedging with the Early Warning System (EWS): Post-lending management has been strengthened through a set of early warning indicators. By detecting customers’ potential financial fluctuations early, HDBank can proactively prepare response scenarios, ensuring the NPL ratio remains within a sustainable and safe range.

HDBank’s market risk management framework comprises internal policies, regulations, procedures, and organizational structure. Within this framework, the risk management policy plays a central role, defining the bank’s strategy and risk appetite and providing overall direction for market risk management, such as risk measurement, monitoring, and control; risk limits; and internal reporting. Market risk management is closely coordinated under the oversight of our senior management, based on the input of our Committees/Councils and the Independent Three Lines of Defense Model. Documents and the organizational structure for market risk management are periodically reviewed and assessed to ensure alignment with the laws, as well as our business strategy, plans, and financial capacity.

Using measurement methods/models and tools, we identify potential market risk factors through identification, measurement, monitoring, control, and reporting for each type of transaction. Measurement methods such as valuation (mark-to-market and mark-to-model), profit and loss (P/L) determination, and sensitivity and Value at Risk (VaR) measurements are supported by the Treasury FIS Front Arena system. This system enables end-to-end and timely management of the entire transaction lifecycle, from transaction origination and risk control to transaction processing, while integrating alert functions for limit breaches, if any. In partnership with FIS Global, HDBank also completed the upgrade of the Treasury FIS Front Arena system in 2025 to enhance operational performance.

Market risk stress testing is conducted on a periodical or ad-hoc basis when market risk factors experience significant volatility, which enables us to take timely actions and/or develop response plans for adverse situations.

Amid the volatility of 2025, particularly liquidity and interest rate risks, HDBank consistently emphasized comprehensive risk identification, accurate measurement, and regular monitoring. On this basis, we proactively implemented measures to effectively prevent, mitigate, and control liquidity risk and interest rate risk in the banking book, thereby maintaining safe, stable, and sustainable operations.

With digital transformation in governance as a central goal, we are implementing the Asset-Liability Management (ALM) software and the Fund Transfer Pricing (FTP) system, which are expected to be completed and launched in 2026. These systems will provide a timely data platform and analytical tools to support the Asset-Liability Committee (ALCO) in administrative decision-making, which will enable the bank to manage liquidity risk and interest rate risk based on daily data, enhance balance sheet forecasting capabilities, and improve profit optimization. Once launched, they will enable HDBank to meet and comply with the measurement and calculation requirements set out in the SBV’s new draft circulars.

Stress testing for liquidity risk and interest rate risk in the banking book has been conducted rigorously, regularly, and consistently. The results show that the bank maintains the ability to operate safely and effectively, even under adverse scenarios.

In 2025, HDBank continued to enhance the effectiveness of our Operational Risk Management Framework launched in 2024, focusing on standardization, proactivity, and alignment with international best practices. Building on this foundation, we focused on refining processes, optimizing tools, and enhancing governance capabilities, thereby strengthening the bank’s capacity for risk prevention, early detection and timely response. This, in turn, ensures safe, seamless and sustainable business operations.

HDBank adopted a comprehensive suite of operational risk management tools in alignment with international best practices, including Risk and Control Self-Assessment (RCSA), Loss Data Collection (LDC), Key Risk Indicator (KRI) monitoring, and Business Continuity Management (BCM) tools. These tools facilitated the early detection of risks, monitoring of loss trends, identification of red flags, and timely implementation of controls, thereby enhancing operational efficiency and service quality.

HDBank maintained rigorous management of outsourcing activities, from vendor due diligence and selection to periodic monitoring, with clear terms regarding responsibilities, service standards, and information security. A primary focus was placed on risk management for IT services to ensure information security and customer data protection in the context of digital transformation. Furthermore, an insurance strategy was implemented as an effective risk transfer tool, in line with HDBank’s risk appetite.

HDBank identifies the management of financial crime risks, including fraud and money laundering, as a key pillar to ensure safe, transparent, and sustainable operations. HDBank fully complies with Vietnamese regulations while progressively aligning with international standards in anti-money laundering (AML) and counter-terrorism financing (CTF).

Regarding fraud prevention, HDBank is accelerating the development of a centralized management system, leveraging modern technology to enhance the detection and prevention of increasingly sophisticated fraudulent activities. At the same time, we maintain existing control measures, including internal awareness training, enhanced customer communication, and close coordination with authorities and financial institutions.

Regarding AML, HDBank continues to upgrade our specialized technology system, enabling customer screening against watchlists, real-time risk classification, and suspicious transaction monitoring across all channels. The system is designed with a set of control scenarios that are periodically calibrated based on risk levels, enhancing our ability in early detection, warning, and prompt response to risk signals. We also focus on human resource training and strengthening cooperation with regulatory authorities, demonstrating a steadfast commitment to fighting financial crime and safeguarding the system.

In 2026, HDBank aims to further refine our financial crime risk management framework and accelerate the application of advanced technologies such as Artificial Intelligence (AI), Machine Learning (ML), and Big Data Analytics to enhance risk detection and prevention efficiency.

HDBank identifies model risk management as a core competency for implementing Basel and IFRS 9 standards. Over the past year, we have focused our resources on developing, validating, implementing, and applying quantitative risk models, with the partnership of leading consulting firms.

Developing and implementing core risk parameters according to Basel standards: With consultation from Big4 partners, HDBank has finalized the development of Probability of Default (PD), Exposure at Default (EAD), and Loss Given Default (LGD) models. These models (including machine learning models) have been integrated into the Internal Credit Rating system, enhancing the bank’s capacity for proactive credit risk measurement and management.

Calculating ECL under IFRS 9: For international financial reporting, HDBank conducted a validation of our PD, EAD, and LGD models with the support of independent consulting firms. This objective validation serves as a critical foundation for us to develop and refine our Expected Credit Loss (ECL) calculation models in compliance with IFRS 9.

Ensuring transparency and efficiency: By engaging independent consulting firms and ensuring a clear internal functional separation for model development and validation, HDBank has not only enhanced our provisioning calculation tool but also affirmed the objectivity and quality of our current models. It provides a solid foundation for synchronizing risk data, ensuring readiness for full integration once the Đi Core project goes live.

HDBank continued to improve our concentrated risk management in two main operations (in alignment with Circular No. 13/2018/TT-NHNN): Focusing on credit granting and proprietary trading of foreign exchange (FX)/bonds; and developing and implementing a rather rigorous risk limit system, such as the maximum credit limit per customer or group of related customers, sector-specific credit concentration limits, and allocation limits for FX/bond proprietary trading.

Furthermore, we have implemented and upgraded our management and identification system of related customers to ensure effective control in line with increasingly stringent regulatory requirements and international practices.

In 2025, HDBank’s legal activities were further strengthened and elevated, playing a foundational role in supporting the bank’s sustainable development amidst a volatile domestic and international socio-economic and legal landscape. Recognizing that those activities are the backbone of ensuring the legal compliance of bank-wide operations, our legal staff remained united and proactive in consistently implementing assigned tasks, thereby achieving all set goals and orientations.

Strengthening legal and compliance risk management: The Legal Department proactively monitored, updated, and assessed the impact of new regulations to promptly adjust internal documents, operational processes, and offerings. Legal advisory and control activities were consistently implemented bank-wide, helping to mitigate emerging risks and ensure compliance in all business activities.

Protecting HDBank’s legal rights and interests: CDispute resolution and legal representation were conducted in a timely and effective manner, mitigating potential losses and safeguarding HDBank’s interests in legal relations with customers and partners. Furthermore, debt recovery and collateral support were strengthened, contributing to improve asset quality and credit risk control.

Supporting business operations and digital transformation: The Legal Department still engaged deeply in HDBank’s key projects and strategies, including investments in subsidiaries, affiliated companies, and strategic investors, restructuring projects for other credit institutions, product development, digital transformation, and collaborations with technology partners to ensure that business initiatives were built on a solid legal foundation while meeting compliance requirements in an increasingly complex legal landscape.

Enhancing compliance capability and awareness: HDBank increased internal training and communications to raise compliance awareness and enhance legal risk management capabilities among our employees. These efforts were instrumental in fostering a culture of compliance bank-wide.

Furthermore, HDBank actively participated in providing input on draft legal regulations, collaborating with regulatory authorities and banking associations to refine the legal framework for banking activities. This underscores HDBank’s proactive role and sense of responsibility to the sustainable development of the financial system.

Looking ahead to 2026, HDBank aims to further enhance our legal and compliance risk management capabilities, grounded in a proactive, professional, and experienced approach that is deeply integrated into business operations and digital transformation. As HDBank expands internationally, including our participation in the Vietnam International Financial Center (VIFC), the legal function will focus on aligning the compliance governance framework with international best practices, together with strengthening legal risk management for cross-border transactions and new business models. Furthermore, we will accelerate technology adoption in compliance monitoring and legal risk management to ensure all activities are implemented based on a solid, secure, and transparent legal foundation.