Circular No. 49/2004/TT-BTC guides criteria for evaluating the effectiveness of financial operations of state credit institutions, applicable to state commercial banks and commercial banks with over 50% state capital. This Circular stipulates a system of criteria for classifying credit institutions based on factors such as the rate of increase in capital mobilization, overdue loan ratio, realized profit, etc., with the aim of assessing and encouraging effective operations of credit institutions.
Đối tượng áp dụng
State commercial banks, commercial banks with over 50% state shares or contributions, and the Social Policy Bank (separately applied).
Các điểm cốt lõi
- Credit institutions are evaluated based on six criteria: the rate of increase in capital mobilization, the rate of increase in investment capital, profitability ratio, compliance with policies and regulations, overdue loan ratio, realized profit, and return on capital.
- Based on classification results, credit institutions may be rewarded or punished: rewards for criteria classified as A, disciplinary action for criteria classified as C.
- Credit institutions achieving AAA for two consecutive years will be considered for the title of 'excellent manager' and receive an advance salary increase; conversely, those classified as C may need to reorganize personnel.
- The Ministry of Finance performs state management functions regarding finance for state credit institutions, supervising and analyzing the effectiveness of financial operations of state credit institutions through this system of criteria.
- This Circular takes effect fifteen days from the date of publication in the Official Gazette.
🌐 Tác động xã hội từ văn bản này
- Positive impact: Creates a basis for evaluating the effectiveness of financial operations, encouraging credit institutions to improve service quality and financial management.
- Negative impact: May place significant pressure on banks to comply with criteria, affecting their flexibility in business operations.
❓ Câu hỏi thường gặp
What is the formula for calculating the rate of increase in capital mobilization?
Rate of increase in capital mobilization = [(Average balance of capital mobilized over twelve months of the current year - Average balance of capital mobilized over twelve months of the previous year) / Average balance of capital mobilized over twelve months of the previous year] * 100.
How is the overdue loan ratio calculated?
Overdue loan ratio = [Outstanding overdue loans at the end of the period / Total outstanding loans at the end of the period] * 100. Overdue loans are determined according to the loan classification specified by the State Bank.
On what factors are the A, B, C classification criteria based?
Criterion 1: Rate of increase in capital mobilization of 10% or more is A, below 10% is B, below 0% is C. Criterion 2: Rate of increase in investment capital of 10% or more is A, below 10% is B, below 0% is C. Criterion 3: Profitability ratio of 75% or more is A, between 65% and under 75% is B, below 65% is C. Criterion 4: No violation of laws is A, conclusion by competent authority but not yet administratively punished is B, administratively punished or criminally prosecuted is C. Criterion 5: Overdue loan ratio ≤ 5% is A, 5% < overdue loan ratio < 8% is B, ≥ 8% is C. Criterion 6: Realized profit higher than the previous year is A, equal to or lower than the previous year is B, credit institution incurs a loss is C.
Which classification will credit institutions be rewarded for?
Credit institutions classified as AAA and AA will be rewarded: The Board of Directors can receive up to three months' salary if AAA, two months' salary if AA; the General Director, Deputy General Director, and Chief Accountant receive bonuses based on business performance results. Credit institutions classified as BB may also be rewarded.
What happens if a credit institution is classified as C for two consecutive years?
If a credit institution is classified as C for two consecutive years, the State Bank of Vietnam may implement measures to reorganize the Board of Directors and General Director or Director personnel.
Toàn văn
CIRCULAR
Guidelines for financial performance evaluation indicators of state credit organizations
state credit function
_________________________________
Pursuant to Article 17 of Decision No. 271/QĐ-TTg dated December 31, 2003 of the Prime Minister on the issuance of the Regulation on supervision and evaluation of the effectiveness of state-owned enterprises' operations, the Ministry of Finance provides guidelines for financial performance evaluation indicators and classification of state credit organizations as follows:
I. GENERAL PROVISIONS
1. Purpose of implementing the system of financial performance evaluation indicators for state credit organizations:
The system of financial performance evaluation indicators for state credit organizations aims to promptly grasp the current status and effectiveness of financial operations of state credit organizations to assist them in addressing shortcomings, achieving business goals and plans, enhancing business operation efficiency and competitiveness; and contributing to improving mechanisms, policies, and laws.
- Evaluating the financial performance of state credit organizations to classify these organizations and implement material and spiritual incentives for state credit organizations and their managers and executives who operate effectively, while promptly handling those organizations and their managers and executives that are weak.
第二条 组织和实施奖励工作的支出水平，如政府第152/2025/NĐ-CP号决定关于分级授权和奖励领域的分权规定
- State commercial banks and commercial banks with state shareholding or capital contribution exceeding 50% of charter capital established, organized, and operated according to the Law on Credit Institutions. Hereinafter referred to collectively as Credit Organizations.
- Social policy banks shall follow separate guidelines issued by the Ministry of Finance.
II. SPECIFIC PROVISIONS
1. System of financial performance evaluation indicators for Credit Organizations:
The system of financial performance evaluation indicators for Credit Organizations includes six indicators divided into three groups as follows:
1.1. General activity indicators:
* Indicator No. 1: Rate of increase in capital mobilization
* Indicator No. 2: Rate of increase in capital investment
* Indicator No. 3: Profitability ratio
* Indicator No. 4: Compliance with policies and regulations.
1.2. Capital utilization safety indicators:
* Indicator No. 5: Overdue debt ratio
1.3. Profit indicators:
* Indicator No. 6: Realized profit and return on capital
2. Method of determining the system of indicators and classifying Credit Organizations:
* Data for calculating the classification indicators of Credit Organizations are based on balance sheet statements (Level III, Level IV, Level V) and financial reports as prescribed.
* The average of 12 months in the formulas for calculating the classification indicators of Credit Organizations is determined by the following formula:
|
Beginning balance |
+ |
Ending balance |
+ |
....... |
+ |
Beginning balance of December |
+ |
Ending balance of December |
: |
Twelve months |
|
2 |
2 |
2.1 Group of general activity indicators:
a. Indicator No. 1: Rate of increase in capital mobilization.
* Calculation formula:
|
Rate of increase in capital mobilization = |
Average capital mobilization balance |
- 1) |
In which: Capital mobilization balance includes deposits from residents and economic organizations (excluding deposits and loans from Credit Organizations operating within the country), issuance of promissory notes, bonds, deposit certificates, and other negotiable instruments. |
100 |
* Classification method:
Increase rate of 10% or more: Class A
Increase rate from 0% to less than 10%: Class B
Increase rate below 0%: Class C
b. Indicator No. 2: Rate of increase in capital investment.
End-of-period outstanding loans and investments in negotiable instruments
* Calculation formula:
|
Rate of increase in capital mobilization = |
(End-of-period outstanding loans and investments in negotiable instruments) |
- 1) |
In which: Capital mobilization balance includes deposits from residents and economic organizations (excluding deposits and loans from Credit Organizations operating within the country), issuance of promissory notes, bonds, deposit certificates, and other negotiable instruments. |
100 |
Increase rate from 0% to less than 10%: Class B
Increase rate below 0%: Class C
c. Indicator No. 3: Profitability ratio.
Profitability ratio
Average earning assets of 12 months
Average total on-balance-sheet assets of 12 months
* Calculation formula:
|
In which: Earning assets include assets in the form of deposits, loans, or capital investments currently generating interest income, excluding overdue debts that do not generate interest income. |
= |
Profitability ratio of 75% or higher: Class A |
In which: Capital mobilization balance includes deposits from residents and economic organizations (excluding deposits and loans from Credit Organizations operating within the country), issuance of promissory notes, bonds, deposit certificates, and other negotiable instruments. |
100 |
d. Indicator No. 4: Compliance with policies and regulations.
Increase rate below 0%: Class C
Based on compliance with and implementation of state policies and regulations in the field of finance, including provisions on tax, accounting and auditing systems, financial regulations for Credit Organizations, expenditure regulations, procurement and asset management regulations to determine this indicator.
- Credit Organizations without violations of current laws: Class A.
- Credit Organizations with conclusions from competent authorities regarding violations of current state policies and regulations but not reaching the level of administrative penalties: Class B.
- Credit Organizations subject to administrative penalties for non-compliance with legal provisions or managers/executives of Credit Organizations (General Directors, Deputy General Directors, Chief Accountants, Branch Managers at Level I, and independent accounting enterprise directors) engaging in illegal acts during the execution of their duties to the extent of being criminally prosecuted: Class C.
2.2 Group of capital utilization safety indicators:
Indicator No. 5: Overdue debt ratio.
Overdue debt ratio
End-of-period overdue debt balance
Total end-of-period loan balance
In which: End-of-period overdue debt is determined according to the loan classification by the State Bank, excluding debts written off according to the Government's decision and old arrears resolved according to Decision No. 149/2001/QĐ-TTg dated May 6, 2001.
* Calculation formula:
|
Class A: Overdue debt ratio ≤ 5% |
= |
Class B: 5% < Overdue debt ratio < 8% |
In which: Capital mobilization balance includes deposits from residents and economic organizations (excluding deposits and loans from Credit Organizations operating within the country), issuance of promissory notes, bonds, deposit certificates, and other negotiable instruments. |
100 |
2.3 Group of profit indicators The Prime Minister.
Increase rate below 0%: Class C
Indicator No. 6: Realized profit and return on capital.
Category B: 5% < Non-performing loan ratio < 8%
Category C: Non-performing loan ratio ≥ 8%
2.3 Profit Indicators Group
Indicator No. 6: Achieved profit and return on capital.
* Calculation formula:
Profit realized = Total income - Total expenses - Corporate income tax.
|
Return on capital |
= |
Total profit realized |
In which: Capital mobilization balance includes deposits from residents and economic organizations (excluding deposits and loans from Credit Organizations operating within the country), issuance of promissory notes, bonds, deposit certificates, and other negotiable instruments. |
100 |
Among which: State capital at credit organizations includes charter capital, construction fund for fixed asset purchases (if any), other capital, and funds recorded on first-level accounts (60 and 61) in the accounting system of credit organizations.
Increase rate of 10% or more: Class A
If the return on capital increases compared to the previous year: Class A
If the return on capital is equal to or lower than the previous year: Class B
Credit organization incurs losses: Class C.
3. Classification of credit organizations:
Credit organization is classified as AAA if it meets all six criteria for Class A.
Credit organization is classified as AA if it has five criteria for Class A and one criterion for Class B, with criteria 4, 5, and 6 being Class A.
Credit organization is classified as BBB if it meets all six criteria for Class B or higher but does not meet the conditions for AAA and AA classifications.
Credit organization is classified as BB if it has five criteria for Class B or higher and one criterion for Class C, with criteria 4, 5, and 6 being Class B or higher.
Credit organization is classified as C if it does not meet the above classification levels.
4. Reporting and publicizing classification results:
- Within ninety days from the end of the fiscal year, credit organizations are responsible for preparing reports evaluating and classifying according to each criterion attached as a supplementary table to this Circular, explaining the subjective and objective reasons affecting the classification results of credit organizations, and submitting them to the Ministry of Finance and the State Bank of Vietnam. In case there are unusual fluctuations in the calculation of criteria, credit organizations must immediately report and explain the factors causing such fluctuations to the Ministry of Finance and the State Bank of Vietnam, and take timely measures to adjust and rectify.
- In the second quarter, the Board of Directors will publicly announce the previous year's classification results within the credit organization after receiving written comments from the Ministry of Finance. At the same time, they will send the reported classification results of the credit organization to the Ministry of Finance for consolidation.
5. Rewards and penalties:
Based on the classification results of credit organizations, rewards and disciplinary actions shall be implemented as follows:
5.1. For credit organizations classified as good, the management board shall be rewarded in material form based on business results as follows:
- The Board of Directors will receive a maximum of three months' salary if the credit organization is classified as AAA, a maximum of two months' salary if the credit organization is classified as AA, and a maximum of one month's salary if the credit organization is classified as BBB.
- Annually, based on business activity results, the Board of Directors decides the bonus amount for the General Director, Deputy General Director, and Chief Accountant.
- The General Director decides the bonus amount for the Branch Manager, Deputy Branch Manager, and Chief Accountant of branch offices and subsidiary companies.
- The bonus for the management board of the credit organization is taken from the reward fund of the credit organization.
For credit organizations with controlling shares of the state, the general meeting of shareholders may apply regulations on setting up funds to reward the Chairman of the Board of Directors, the General Director, or the Director of the credit organization.
5.2. For credit organizations that have been classified as AAA for two consecutive years, the Chairman of the Board of Directors and the General Director or Director of the credit organization will be considered for the title of "excellent manager" by the competent authority and for an increase in salary ahead of schedule according to the prescribed regulations.
5.3. For credit organizations that have been classified as C for two consecutive years, based on the actual situation of the credit organization, the State Bank of Vietnam will implement measures to reorganize the positions of the Board of Directors and the General Director or Director.
III. IMPLEMENTATION
- This Circular takes effect fifteen days after its publication in the Official Gazette.
- The Chairman of the Board of Directors and the General Director (Director) of the credit organization is responsible for guiding branch offices to self-assess financial performance and bear legal responsibility before the state management agency regarding the implementation of supervisory mechanisms and assessment of business effectiveness of the credit organization.
- The Ministry of Finance performs state management functions over state-owned credit organizations, monitors and supervises their financial activities according to the provisions of the law, and analyzes and evaluates the financial performance of state-owned credit organizations through the system of indicators prescribed in this Circular. During implementation, if there are difficulties, please reflect them to the Ministry of Finance for research, consideration, and resolution.
- During implementation, if there are difficulties, please reflect them to the Ministry of Finance for research, consideration, and resolution./.
DEPUTY MINISTER
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