notes to the consolidated financial statements - Sacombank

REPoRt oF tHE BoARD oF SUPERVISoRS
Taking the responsibilities for monitoring compliance with the laws and regulations set by the State Bank of Vietnam
(SBV) across Sacombank’s system to ensure its stable growth, achievement of business objectives and adherence to the
laws and banking regulations, based on macro-economic forecasts and the Bank’s performance review, the Board of
Supervisors in 2011 performed the following specific action plans:
Hold periodic meetings between the Board of Supervisors and the Internal Auditors and the Risk Management team;
attend the meetings of the Board of Directors; provide comments on the development and implementation of business
plans; perform comprehensive monitoring of the Bank’s operations in various aspects with emphasis on the monitoring
and cooperation with the Board of Directors and the Board of Management to achieve the set objectives.
In 2011, as a tool of the Board of Supervisors, the Internal Audit system (consisting of the Internal Auditors at the Head
Office and the Regional Inspection and Supervision Team) performed audits of 408 transaction offices (100% of the total
number of transaction offices), 11 divisions/departments at the Head Office and 3 Subsidiaries (SBA, SBL, SBJ). Periodic
and extraordinary cash counts were performed at all transaction offices across the Bank’s system. The controls and
internal audit systems of the Bank proved their efficiency in the monitoring process to achieve the goal of prevention and
warning of any probable risks. In addition, the Internal Auditors have performed distant supervision of all business units
across the Bank’s system, gave timely warnings and identified any violations of the regulations for immediate response
and remediation as well as provided guidelines on business operations for different business units.
Assessment of the Board of Supervisors on the
Bank’s business activities:
n Management: The Board of Directors performed their
management role well, providing timely support and
instructions to the Board of Management in relation
to managerial tasks. The Board of Directors also closely
coordinated with the Board of Supervisors through
inspection and control of the operating activities of the
Bank and its subsidiaries.
n Operations: The Board of Management made
outstanding efforts in 2011, having consistently grasped
market developments in a timely manner and strictly
implemented the directives of the Board of Directors as
well as adhering to the plans of the Board of Directors.
These actions resulted in a number of praiseworthy
successes in the year in terms of profit before tax, total
assets, and business network expansion. The Board of
Management also coordinated closely with the Board
of Supervisors in monitoring and supervising operating
activities, and providing relevant information and data
to support the Board of Supervisors’ actions.
n Internal controls: The Bank has built and has always
been interested in the improvement of a system of
internal controls to meet the development needs of
the Bank. There was an emphasis on self-checks and
self-correction, and appointing Itinerant Directors and
Transaction Managers to conduct checks as well. The
control system comprises of risk management policies,
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ANNUAL REPORT 2011
processes and regulations, decentralisation of power,
levels of authorisation and IT applications. The tasks
of inspection and supervision were improved to attain
better results.
n Risk management and treatment in Sacombank’s
control system.
Market risks
(i) Foreign exchange risk
According to economists, one of the biggest successes of
the monetary policy of 2011 lies in the foreign exchange
rate policy. With VND deposit rates being maintained high
while the applicable ceiling rate for USD deposits being
kept low, the foreign exchange rate between USD and
VND has been kept reasonably stable after it had been
sharply depreciated by 9% at the beginning of the year.
However, the foreign exchange rate climbed at certain
points in time during the year which was principally due
to gold speculation.
With the foreign exchange rate being quite stable in 2011
and efficient management of the foreign exchange risks,
Sacombank has not been affected severely by the foreign
exchange risks.
(ii) Interest rate risk
In 2011, given the scarcity of raised funds, banks’ race to
increase interest rates was intensified vigorously. However,
thanks to its policy on floating loan interest rates, Sacombank
successfully managed interest rate risks.