Nam A Bank continues to pioneer in applying international risk management standards

Following the successful implementation of risk management standards according to Basel III in October 2022, Nam A Bank continued to complete the development of methodologies and tools according to Basel III Reforms, based on advanced international risk management standards, with the support and advice of leading international consulting firm KPMG.

Nam A Bank continues to be a pioneer in applying international risk management standards (Figure 1). — Customers conducting transactions at Nam A Bank.

While Basel III requirements primarily focused on improving the quality and quantity of capital, introducing liquidity ratios to ensure short-term liquidity (liquidity coverage ratio – LCR), long-term capital stability (net stable capital ratio – NSFR), and limiting the leverage ratio of credit institutions, complying with Basel III Reforms requires banks to adopt new risk measurement methods in addition to complying with Basel III requirements. Some new standards include: for credit risk measured using internal ratings-based (IRB) models, Basel III Reforms introduces minimum thresholds to prevent banks from making excessively low internal estimates; banks must also measure and manage credit valuation adjustment risk (CVA).

Drawing lessons from previous financial crises, the Basel Committee introduced a completely new method for measuring market risk to overcome the limitations of previous standards. All these changes aim to improve the resilience to market shocks and volatility, and to enhance the operational stability of credit institutions.

To enhance internal governance and operations in accordance with Basel III standards, after completing the methodologies and calculation tools, Nam A Bank continues to refine its internal system operation regulations according to Basel III. Specifically, the main regulations include: Regulations on the methodology for determining capital adequacy ratios according to Basel III standards; Regulations on the methodology for determining the liquidity ratio (LCR) according to Basel III standards; Regulations on the methodology for determining the net stable capital ratio (NSFR) according to Basel III standards; Regulations on the methodology for determining the leverage ratio according to Basel III standards; Regulations on the disclosure of information on capital adequacy ratios and liquidity adequacy ratios according to Basel III standards; and the process for implementing, managing, and monitoring compliance with capital adequacy ratios in Nam A Bank's operations within the framework of international risk management standards Basel III.

On the eve of its 31st anniversary, Nam A Bank continues to affirm its position as one of the pioneering banks in applying international risk management standards to ensure safe and sustainable development in the future.

A representative from the bank shared: "The adoption of Basel III - Reforms demonstrates Nam A Bank's determination to meet the highest international standards, pioneer in technology application, and elevate banking operations to a new level. We are committed to continuing to invest heavily in improving risk management capabilities, perfecting internal control and auditing, and transparentizing financial information to ensure safe and efficient operations, bringing the best benefits to customers and shareholders."

Nam A Bank has continuously strived to promote the early adoption of international best practices in risk management, confidently entering a new era, affirming its pioneering position in service quality, stable, safe and efficient operation, continuing to bring positive values to customers, partners, the community and contributing to the development of the Vietnamese banking system.

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