Joint Stock Commercial Bank for Foreign Trade of Vietnam : 3. BOD report

JSC BANK FOR FOREIGN TRADE OF VIETNAM

SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness

Address: 198 Tran Quang Khai St., Hanoi Business Registration No. : 0100112437

Hanoi, 29 April 2022

(15th revision dated 14 April 2022)

TRANSLATION

REPORT OF THE BOARD OF DIRECTORS ON 2021 OPERATION AND 2022 ORIENTATION

• I. OPERATION REPORT OF 2021

• 1. Highlights and overview

  In 2021, the world continues to witness the raging of COVID-19 pandemic with dangerous variations, causing heavy losses to socio-economic. In Vietnam, social distancing and prolonged blockade in many provinces disrupted production and supply chains. However, with the drastic, flexible and responsive management of the Government as well as great efforts from both enterprises and people, Vietnam has gradually adapted to the epidemic and the economy recovered strongly in the last quarter of 2021. GDP for the whole year increased by 2.58%; import-export turnover reached 668.5 billion USD, up 22.6% compared to 2020; trade surplus reached 4 billion USD; inflation stood at 1.84% - the lowest level since 2016.

  Amidst overall difficulties and challenges, the banking industry continues to prove itself as the pillar of the economy, accompanying and supporting people and enterprises to overcome difficulties, recover and expand businesses. System liquidity was ample; interest rates were kept at low level; foreign exchange market and exchange rate were stable. The digital transformation of the banking system has made remarkable progress.

2.

Missions assigned by the General Shareholders Meeting

At the Annual General Shareholders Meeting (AGM) in 2021, the Meetingratified the following:

- Approved 2021 business direction with the following points:

•  2021 motto Transformation - Efficiency - Sustainability, with main

focus on thorough innovation of growth model and management orientation Responsibility - Action - Innovation.

•  AGM assigned the BOD to direct and decide on any adjustment of 2021 targets to match the situation, especially in line with COVID-19 situation and in accordance with approval from the competent authority. According to Official Letter No. 2712/NHNN-TCKT dated 22/04/2021, Official Letter No. 5674/NHNN-TCKT dated 06/08/2021 and Official Letter No. 8285/NHNN-CSTT dated 23/11/2021, SBV approved several targets for 2021 as follows:

•  Total assets growth of 5%;

•  Credit growth of 10,5% (which was thereafter increased to 15%);

•  Deposits growth of 7%;

•  NPL of less than 1%;

•  Consolidated PBT growth of 11%, Single PBT of VND 25,400; Cash dividend payout ratio of 12% over face value;

- Approved VCB Development plan until 2025, vision until 2030;

- Approved profit distribution plan and authorized the BOD to execute the plan in accordance with SBV's official approval.

- Approved the maximum remuneration for the Board of Directors and Supervisory Board of 0.27% of consolidated profit after tax given 2021 consolidated profit before tax fulfilled target assigned by competent authority.

- Assigned the Board of Directors to decide on the selection of an independent auditing company to review the financial statements of the second quarter of 2022, audit the financial statements and the operation of the internal control system of VCB in 2022.

- Approved the amendment and supplementation of a number of contents of Charter, Regulations on organization and operation of the Board of Directors, internal management regulations. Assigned the Board of Directors to carry out necessary procedures; promulgate the Charter, Regulations on organization and operation of the Board of Directors, and internal management regulations.

- Approved the plan to increase charter capital in 2021 of VCB.

3.

Review the implementation of the missions assigned by the AGM With effort, responsibility and determination, VCB has successfully

implemented the goals: Effective COVID-19 epidemic prevention; Ensure employees' health; Customer difficulties sharing and Sustainable business development. In 2021, VCB achieved many impressive results, exceeded the targets assigned the AGM, continued to be the leading bank in terms of profit and asset quality in the banking system.

Results of the implementation of missions assigned by the AGM are as follows:

3.1. Business operation outcomes

In 2021, Vietcombank achieved and exceeded the targets set by the AGM:

- Total assets reached VND 1,414,673 billion, up 7% compared to 2020, completed 101% of the target set by AGM.

- Loan outstanding reached VND 972,680 billion, up 15% compared to 2020, within the credit growth limit assigned by the State Bank and completed 104% of the target set by AGM.

- Total deposit reached VND 1,152,712 billion, up 9% compared to 2020, completed 102% of the target set by AGM.

- VCB continues to strictly control credit quality and accelerate bad debt handling. The balance of NPL on the balance sheet is VND 6,121 billion, NPL ratio was 0.63%, while the balance of provision reserve fund was VND 25,976 billion. The loan loss coverage ratio was 424%, reaching the highest level in VCB's operations and within the banking system.

- Consolidated profit before tax reached VND 27,389 billion, up 19% compared to 2020 and completed 106% of the target set by AGM. Bank only profit before tax reached VND 26,457 billion, up 17% compared to 2020 and completed 104% of the target set by AGM.

- Market capitalization reached USD 16.7 billion as of December 31, 2021, highest among listed banks.

(For more details, please see BOM's report). 3.2. Business direction and management

Bank governance was the focus of the Board of Directors with outstanding activities in 2021 including:

Network development, human resource management and training

- Consolidate the organizational model at the Head Office and Branches.

Newly established Information Technology & Digital Transformation Division; opened 5 new branches and 32 transaction offices

- The COVID-19 epidemic outspreaded in Australia and Vietnam in the past 2 years, which has led to critical changes in the business environment, market potentials as well as posting new challenges. Considering the above facts, the Board of Directors has decided to stop implementing the plan to establish a VCB branch in Australia.

- Scientific research and operations of the Scientific Council were promoted and implemented seriously and methodically.

Digital transformation and progress of capacity building projects

- Promulgating the Digital Transformation Action Scheme to 2025, with a vision to 2030 with 15 specific goals; promulgating the Transformation Action Plan to implement the Digital Transformation Action Scheme.

- Project management activities are satisfactory, the projects continue to follow the set schedule.

Fulfilled obligations to the State and responsibilities to the community, ensuring interests of shareholders

- Fulfill all obligations to the State. In 2021, VCB paid nearly VND 11 trillion to the State budget, continuing to be one of the largest payers to State budget in Vietnam.

- VCB strived to balance between the safe and sound development goals with the role as the leading bank in the industry. In 2021, VCB has pioneered to reduce interest and fees, restructured debt and maintained debt groups for customers in accordance with the guidance of the SBV to support people andbusinesses to maintain production and overcome difficult times.

- Besides business activities, VCB also actively promoted Corporate Social Responsibility (CSR) by participating in numerous social welfare activities. In 2021, VCB has implemented social security programs with a total commitment of ~ VND 723 billion, of which VND 381 billion was donated to COVID-19 disease prevention and control. VCB has implemented a series of programs and activities to show gratitude to the frontline forces against the epidemic, especially the medical team. VCB's CSR activities focused on financing the construction of houses for the poor, construction of schools, health facilities, and infrastructure works in areas with difficulites, rural, remote and regional areas . ... , in which education and health were two key areas that VCB paid special attention to and widely deployed in many localities across the country, actively contributing to spreading VCB's brand.

3.3. Development Strategy to 2025, vision until 2030

VCB successfully compiled and submitted Development Strategy to 2025, vision until 2030 to SBV for approval. Vision and mission until 2025: No.1 Bank in Vietnam, one of 100 largest banks in Asia and 300 largest banking groups globally, one of 1000 largest listed corporates in the world with substantial contribution to Vietnam's development.

3.4. 2020 profit distribution

In accordance with SBV's approval under Official letter No. 8173/NHNN-TCKT dated 17/11/2021 and resolution of the AGM, BOD issued Resolution No. 609/NQ-VCB-HDQT dated 09/12/2021 to approve 2020 profit distribution plan. Accordingly, the rate of cash dividend payment was 12% for 2020. VCB completed cash dividend payments to shareholders on 05/01/2022. After booking required reserves and paying cash dividends, VCB continued to pay stock dividend according to the charter capital increasing plan approved by competent State authority.

3.5. Operating fund, remuneration for the BOD and Supervisory Board in 2021

The remuneration of the BOD and Supervisory Board incurred and paid from the salary fund in the financial year 2021 was 0.10% x profit after tax, in line with 5