Sustainable banking development on a solid risk management foundation

Risk management (RR) is one of the important components for sustainable growth and development. SeABank always focuses on investing, upgrading, and applying RR to the operating process, helping the Bank's operations to always be stable, safe and effective. Comprehensive risk management according to international standards In order to maximize support for business goals and build a solid foundation towards sustainable development, SeABank continuously improves comprehensive risk assessment methods according to international standards and practices while flexibly adjusting policies according to market fluctuations, ensuring the maintenance of asset quality, stable liquidity and a solid buffer. To strengthen the capital reserve foundation for risks, SeABank has completed all 3 pillars of Basel II ahead of schedule. SeABank is also one of the few pioneering banks to deploy and apply Basel III from May 2022 with strict requirements on meeting capital adequacy ratio (CAR), core capital components, reserve capital components, and liquidity risk management indexes.

SeABank is one of the few pioneering banks to deploy and apply Basel III in business operations and risk management.

After 2 years of implementation, SeABank has continuously improved its indicators on ensuring safe capital reserves for operations and enhancing liquidity resilience against events. Accordingly, the Bank applies the IMA (Internal Models Approach) method to measure liquidity resilience index, calculate capital for market risk, and fully implement the internal capital adequacy assessment process (ICAAP) to be ready for all scenarios. Thanks to that, the Bank always maintains a CAR ratio at a safe level higher than the minimum requirement of the State Bank of Vietnam, with a consolidated CAR ratio of 13.61% as of December 31, 2023. SeABank also applies early International Financial Reporting Standards (IFRS) in addition to Vietnamese Accounting Standards when preparing and presenting financial statements. Thereby, the Bank strengthens risk management and control by improving the ability to measure and manage business results, creating a basis for reasonable resource allocation to increase capital efficiency. Managing environmental and social risks and promoting responsible credit In addition to managing inherent material risks, SeABank also proactively builds and deploys an environmental and social risk management system (ESMS) and promotes green credit, aiming to combat climate change and realize the Government's goal of transitioning to a net zero carbon emission economy. Since 2022, SeABank has comprehensively implemented environmental and social risk management in credit activities. Accordingly, 100% of credit transactions are screened, classified, and assessed for environmental and social risks, thereby determining appropriate environmental and social risk management measures based on the identified risk level, while rejecting transactions that have serious and irreversible impacts on the environment and society. This is an important step forward to help SeABank identify and manage risks, raise awareness of environmental protection and community benefits, and accompany customers towards sustainable development. To improve efficiency and promote responsible credit projects, SeABank is constantly seeking companionship, financial support and expertise from prestigious international partners such as IFC, DFC, ADB... Thereby, the Bank is confident in providing green financial and social financial products to maximally support small and medium enterprises, women-led enterprises to develop towards green economy, circular economy, meet the world's strict production criteria, improve the efficiency of resource and energy use. Risk management on technology and digitalization platform To strengthen the risk management platform to create momentum for business development, SeABank continuously promotes the implementation of the "Digital Convergence" strategy, focusing on investing in systems, applying advanced technology to enhance control, prevention and early detection of risks, thereby maintaining safe and continuous operations. SeABank has invested in applying advanced technology to improve the efficiency of risk management, control and early detection, and risk prevention in many aspects such as: exploiting big data to have a comprehensive and timely view of problems arising in transactions and building tools to identify suspicious transactions; applying AI, Machine Learning, Data Analytics to build models to improve the quality of risk assessment; developing a Data Center to support the improvement of the EWS model for early warning of credit risks; developing Risk Datamart, software integrating risk management and compliance; building a behavioral model to optimize the balance sheet, be flexible in the face of adverse situations according to Basel standards; automatic synchronization and comprehensive conversion solutions according to IFRS... In particular, SeABank especially prioritizes resources to prevent risks in technology safety and customer information security in the digital transformation period through investing in a data loss prevention system; QTRR projects and enhanced card security such as Digital Authentication Framework or Mastercard Proactive Scanning; upgrading eKYC technology, ensuring integration of national population data and authenticating chip-embedded citizen identification cards to increase transaction security... Thanks to that, SeABank is certified to meet the highest standards of information security according to ISO 27001, and at the same time becomes the first organization in Vietnam to be awarded the PCI DSS 3.2 certificate for safety and security for payment card systems.

SeABank continues to be rated Ba3 by Moody's for many important categories

Thanks to its safe and effective operations on the international standard risk management platform reinforced by modern technology, SeABank has been rated B1 by Moody's for many consecutive years. Notably, in 2023, this organization rated SeABank at Ba3 for many important categories with a Stable outlook. Moody's also highly appreciated the improvement in asset quality management, high capital adequacy ratio, stable lending and liquidity activities, and expected SeABank's stable credit capacity. This also opens up many opportunities for SeABank, typically accessing investment capital with a total value of more than 600 million USD from prestigious international organizations such as IFC, DFC, ADB... to help improve financial resources to meet sustainable growth goals. Setting the goal of sustainable growth associated with risk control as one of the pillars of business strategy, SeABank will continue to promote risk management to ensure transparent and sustainable operations, contributing to the safety and soundness of the banking system, the stable growth of the economy with the position of one of the leading commercial joint stock banks in Vietnam.

Nhu Loan

Source: https://baodautu.vn/ngan-hang-phat-trien-ben-vung-tren-nen-tang-quan-tri-rui-ro-vung-chac-d217387.html