Annual Report 05

Table of Contents
Message from Mr. Chairman of the Board........................................ 2

President’s Report.............................................................................. 6
Mission Statement............................................................................. 10
Year 2006 Action Plan....................................................................... 11
Key Performance Targets................................................................... 11
Highlights of the Year........................................................................ 12
Awards and Social Recognition.......................................................... 14
Key Financial Figures from 2001 to 2005........................................... 16
What Our Customers Have Said........................................................ 17
AGM Resolution................................................................................ 20
Organizational Chart......................................................................... 22
The Board of Directors...................................................................... 24
The Management............................................................................. 27
The Supervisory Board...................................................................... 30
Bankcard Center Activities................................................................. 31
ACBS Activities.................................................................................. 34
Activities of Western Union Money Transfer Center........................... 36
Activities of ACB Asset Management Company................................. 37
ACB: “Bank of the Year“ in Vietnam in 2005.................................... 38
Social Activities.................................................................................. 40
Correspondent Bank Relationship...................................................... 42
An Overview of Vietnam Banking System in 2005............................. 44
Financial Reports................................................................................ 47
Branch Network................................................................................. 92
Annual Report 2005
Message from Mr. Chairman of the Board
Asia Commercial Bank (ACB) grew strongly in 2005 and continues to

grow in 2006. To ensure a sustainable growth, the bank shall focus
on the effective implementation of the solutions of strategic planning,
information technology, human resources, risk management, market
share, compliance and public confidence, which is expected to further
consolidate the foundation of shareholders’ long-term benefits.
Dear shareholders,
ACB has successfully achieved targets for the year 2005. The bank continues to
grow in all aspects including equity, total assets, loans, branch network and staff.
Its performance was spectacular while non-performing loans remained low. While
growths for 2006 are set in the range of 30% to 50%, quality of growth continues
to be emphasized. The Board of Directors has identified a set of imperative growths
for the management to focus on which cover strategy, system, human resources,
risk management, market share, compliance and customers’ confidence.
The banking industry of Vietnam has grown to a new stage and commercial banks
have experienced big changes. Banks have expanded their networks and increased
equities. Some state-owned commercial banks are going to be equitized. While
existing foreign banks are increasing their presence in Vietnam, others are about
to enter the market. The playing field for foreign banks and local banks will be
www.acb.com.vn
Mr. Tran Mong Hung - Chairman
leveling in the near future. Given this context, ACB has to review its current strategy,
identify core business priorities, pay due attention to market segmentation and
develop appropriate business models for each segment. In addition, management’s
capability in strategic planning will be enhanced to improve the bank’s long term
competitiveness.
Besides, initiatives have been taken by ACB in the use of technology for sustainable
growth. We are the first joint-stock bank in Vietnam to set up a bank-wise, online
network to support operation of the bank and service our customers. That investment
has contributed significantly to the success of the bank. As the bank expands rapidly,
the system will need to be upgraded regularly to ensure smooth operation on both
regular and backup system. One of the main tasks of this year is to strengthen the
network security to protect customers and enhance their confidence in the bank’s
system.
Annual Report 2005
Human resources have contributed much to the growth of ACB and are always
nurtured. Best practices in recruitment, training, compensation and fringe benefits
have been applied. Clear career paths and promotion opportunities for staff are set
up. Staff training will be improved focusing on concise contents, practicality, and
sufficient training times to increase their efficiency and productivity. The performance
measurement system has been improved to provide a fair and objective means of
evaluation. Not only does ACB always try to professionalize the employees and apply
best practices, it also requests that staff be prudent and conservative. A workforce
of high competence and energy continues to be a competitive edge of the bank.
In addition, risk management has been addressed. ACB’s risk management system
will be restructured and its efficiency will be improved significantly this year. Credit
risk management continues be strengthened by enhancing the bank’s credit
policies which set out ACB’s risk appetite and credit limits in support of lending in
a controllable manner. In addition, improvement of market risk has allowed ACB
to increase its revenue while putting liquidity risk under control. Internal audit and
control was enhanced last year to protect branches’ operation. The tasks of this
function will not be limited to uncovering deficiencies and requesting corrective
actions. Analysis of causes, suggestion of appropriate and complete solutions, and
development of an effective and remote warning system will be required. Risk
management systems will be built at branch level. Effective risk management will
allow the bank to allocate its capital favorably given the fact that best practices in
banking will be adopted by Vietnam soon.
While GDP of Vietnam is expected to grow at high rates in the coming years, the
financial and banking industries will be stable and GDP per capita will continue to
increase. These will present the bank with opportunities to increase market share
and diversify business. To improve the bank’s competitiveness in an increased
globalization environment, ACB will need to enhance service quality, upgrade
existing products, introduce new ones and expand distribution channels, especially
electronic banking, mobile banking and ATMs.
www.acb.com.vn
Further, the bank is going to establish subsidiaries to run specific businesses to

ensure their independency and enhance their contribution to the bank’s bottom
line. The two existing subsidiaries - ACB Securities Company (ACBS) and ACB Assets
Management Company (ACBA) - will be strengthened to increase their market
shares, expand their businesses, and help implement ACB’s diversification strategy.
Establishment of other subsidiaries operating in non-banking financial sector is
being planned.
One of the factors that help the bank grow in a sustainable manner is attributed
to its strict compliance with prudence. ACB always meets requirements of the
regulators, including required capital adequacy ratio. The bank shall not trade off
prudent operations with risky but lucrative businesses.
Besides, ACB has actively applied the best practices in corporate governance and
management which comply with Vietnamese laws and regulations, satisfying
requirements of disclosure to maintain confidence of the shareholders, in particular
and of the public, in general.
The Board of Directors hopes that the shareholders agree with the Board and
look forward to shareholders’ continuous support to the management. The Board
believes that the implementation of the above-mentioned solutions will ensure the
achievement of the 2006 targets, promote ACB’s brand, protect shareholders and
add value to them, and contribute more to the society.
Yours truly,
Tran Mong Hung

Annual Report 2005
President’s Report
Growth
The year of 2005 continued witnessing ACB’s vigorous growth in all spheres. Total
mobilized funds increased by 56% reaching VND 22,332 billion by year-end, amid
a highly competitive environment where total mobilizing funds across the industry
only stepped up by 22%. Funds mobilized from commercial customers increased
by 55.1% compared to 2004, and household deposits by 55.2%, accounting
for 6% of total saving deposits of the industry. Household deposits continuously
growing and taking a significant proportion in the total mobilized funds structure
have helped stabilizing the bank’ funding source.
Also in 2005, the bank increased its charter capital to VND 948 billion from 481
billion previously, which in turn raised total equity by 80% from end of 2004
to VND 1,272 billion. Having been approved by the State Bank of
Vietnam, Standard Chartered Bank (SCB) officially became strategic
partner of the bank in June 2005. SCB together with three other
foreign investors including International Financial Corporation (an
investment arm of the World Bank), Connaught Investors Ltd.
(Jardines Group) and Dragon Capital make up of 30% of the bank’s
charter capital.
The strong growth in funds mobilization has brought the total

assets to VND 24,247 billion, an increase of 57% from 2004,
exceeding the target of VND 23,000 billion set at beginning of
the year. The bank continues to maintain its leading position
as the largest joint-stock commercial bank in terms of total
assets. At the same time, loans also grew at a healthy rate
of 42% in 2005 while industry average lagged behind with
the growth of 22.5%. Total outstanding loans reached
VND 9,565 billion by end of 2005, of which consumer
lending and commercial lending accounts for 49% and
51%, respectively.
The bank has given a significant emphasis on the

development and expansion of its distribution network
in order to provide better services to customers. In 2005,
19 new branches and sub-branches became operational
in HCMC, Hue, Da Nang, Hoi An, Vung Tau and Dong
Nai. By year-end, the bank has got a total of 61 branches
and sub-branches, and two subsidiaries including ACB
Securities Company (ACBS) and ACB Asset Management
Company (ACBA). Besides, the bank keeps reinforcing its
human resources. The total number of employees was
doubled by end of 2005 topping 2,128, an increase of
50% against year 2004. The staff and management of
the bank are increasingly enhanced by young dedicated
talents.
Mr. Ly Xuan Hai - President

www.acb.com.vn
ACB launched several new products and services in 2005 to meet the increasingly
diversifying demands of customers, such as factoring, overdraft, gold options, Visa
debit card, escalating interest rate deposits, Call Center 247. Being equipped with
modern technologies, the bank is able to provide customers with over 200 types of
products and services in different and flexible forms.
Value
Under the pressure of lending competition and rising deposit interest rate, ACB has
applied flexible measures to ensure capital growth and higher income from credit
activities. The bank continued to enjoy the highest level of profitability among
commercial joint stock banks. Pre-tax profit for the whole year achieved VND 385
billion, representing a 38.5% increase over 2004 and exceeding the VND 370
billion target set out at the beginning of the year.
The net interest income of the year reached VND 512 billion, 47% increase against
2004. The average density of net interest income over the total assets was 2.6%.
The trading volume of USD-denominated currencies was USD 3.7 billion by the
year 2005, 27.6% higher than USD 2.9 billion in 2004. This is especially resulted
from high increase in key foreign currency sales. In addition, trade finance volume
amounted to USD 985.3 million, up by 82.8% over 2004, and equal to 132.2%
of the year plan. Fee income of VND 104.7 billion was mainly obtained from the
trade finance service, gold and foreign exchange trading, bankcard service, and
remittance.
Key financial indicators (as % of total assets)
Indicators 2005 2004 2003 2002 2001

Net interest income 2.6 2.7 2.9 2.8 2.4
Non-interest income 0.8 0.9 0.6 0.7 0.9
Operating expenses 1.4 1.3 1.4 1.5 1.3
Specific reserve 0.02 0.1 0.2 0 0.4
Pre-tax profit 1.9 2.1 1.9 2.0 1.6
Net profit 1.5 1.6 1.3 1.5 1.3
ACB’s operating expenses remained stable. Operating expenses to total assets ratio
in 2005 was 1.4% as the bank continued to adopt a competitive salary policy and
increased its salary expenses for the recruitment of 895 new staffs.
Specific reserve to total assets ratio was kept at 0.02%, lower than in 2004. This
resulted from the standardization of credit appraisal, approval and monitoring
process. In addition to specific reserve, the bank also set aside VND 13.9 billion
Annual Report 2005
President’s Report (continued)
for general provision which accounts for 0.15% of the total outstanding loans of
category 1 – 4, in accordance with the Decision 493 by SBV dated 22/4/2005.
Non-performing loan (NPL) ratio fell from 0.72% in 2004 to 0.3% in 2005. Most of
the loans overdue are likely to be recovered since they are secured by highly liquid
collateral, mainly properties.
High growth, well-controlled expenses and a low ratio of overdue loans created
positive impacts on the bank’s profit. Pre-tax profit as percentage of average total
assets was 1.9%. After-tax profit was VND 293 billion, 1.5% over the average total
assets. In 2004, following a dividend pay-out of 12% in cash and 16% in shares,
the bank’s retained earnings and capital enrichment reserve were employed to
increase share capital from VND 948 billion to VND 1,100 billion.
In 2005, ACB was awarded “Bank of the Year in Vietnam” by The Banker (U.K.).
The bank is also the only bank among 10 enterprises awarded with merits from
HCMC People’s Committee for its achievements in business management and
service quality enhancement.
Sustainability
Regarding safety as a criterion in operation, ACB has substantially focused on
across-the-board risk management.
Credit risk is the main risk of the bank. The approval process of credit, depending
upon its size and level of risk, is performed by Management Credit Committee,
Executive Credit Committee, or approval experts working separately from business
units. The deployment of credit risk policy is carried out consistently throughout the
system. The bank’s loan portfolio enjoys high level of security as 94% outstanding
loans are collateralized. Highly tradable commercial real estates took the biggest
proportion which accounted for 74% of the collaterals while factories, machinery
and inventory represented 14%, third party guarantee 5%, and gold and foreign
currency in cash 2%. Non-performing loans ratio has been remained at below 1%
in the recent years and tends to keep decreasing.
Market risk is centrally managed with prudent principles. The Board of Directors
issues market risk management policy. The Asset and Liability Committee (ALCO)
monitors and manages risks in accordance with approved polices and limits, using
repricing gap and factor sensitivity. Foreign exchange risk is controlled based on
stop loss and position limits for each currency type and the aggregate amount of
all currencies.
ACB’s liquidity is strictly monitored and controlled through a system of instruments.

The structure of ACB’s assets and liabilities is highly liquid. Household deposits
amounted to 73.3% of the total assets which helps to stabilize ACB’s funds and
capital. Assets including inter-bank placements (26.2% of total assets), commercial
bank bonds (12.3%) and government bonds (7.6%) helps to enhance the liquidity.
www.acb.com.vn
In addition, the bank has been developing its fund transfer pricing system to
eliminate market risk at branches.
ACB has established a centralized system of operational risk management. Each

branch or sub-branch or department is responsible for the management of its own
daily operational risk following consistent processes.
Legal risk may have adverse impacts on the bank’s operation, reputation, and
financial status due to the violation of current laws and regulations. ACB’s Legal
Department is in charge of the management of legal risk throughout the system.
A thorough review of legal documents to ensure a strict compliance with laws and
regulations is carried out with great caution to safeguard the benefits of customers,
partners and the bank itself.
Capital adequacy ratio of the bank 31/12/2005 was 12%, relatively high in
comparison with the 8% set by the SBV.
Prospects
ACB identifies 2006 as the core year with robust growth, creating a base for
sustainable development of the period ending 2010 with the expected average
growth rate of 30%. Total assets are expected to increase by 36%, reaching
VND 33,000 billion by end of 2006. The Bank will make effort to raise its total
outstanding loans to VND 14,500 billion, 51.6% higher than 2005-end, of which
commercial and consumer outstanding loans are to reach VND 7,430 billion and
VND 7,070 billion, respectively. Deposit mobilization projected to up 44.4%, from
VND 19,996 billion to 28,870 billion, in which saving deposits are likely to increase
from VND 16,360 billion to 23,780 billion, payment deposits and security deposits
from VND 3,635 billion to 5,090 billion. ACB will strive for VND 555 billion pre-tax
profit, or 44.2% increase versus 2005.
In order to achieve the above targets, ACB will further segment the market,
focus on pushing up outstanding loans on the ground of prudent policies, at the
same time accelerate cross-selling activities. The bank will also improve its credit
management with a centralized model with clear lending criteria, standardized
products, innovating lending procedures in order to raise the ratio of outstanding
loans over the total assets to 60% in the next few years. Flexible interest rate policy
will continue to be on the move and new products are to be developed including
currency conversion (for saving accounts and payment accounts), forex/gold margin
trading, forward gold trading and derivative products (private banking/ wealth
management). In 2006, the bank will actively expand its distribution channels,
opening 20 more branches and sub-branches and installing ATMs to enhance its
servicing capacity and to attract potential customers. The bank will continue to
seek for new talents, focus on the training and development of human resources,
upgrade managerial skills of the management team, and renovate its technology
system.
10 Annual Report 2005
Mission Statement
Asia Commercial Bank constantly drives

itself to be a leading commercial bank in
Vietnam, characterized by its pro-active
operations, diversified product portfolio,
widespread and diversified distribution
network, modernized technology, safe
and profitable performance, sustainable
growth, and professional, ethical
employees.
www.acb.com.vn 11
Year 2006 Action Plan
1. To enhance the segmentation capacity with focus on target customers

(individuals, households and small and medium sized enterprises).
2. To improve deposit market share through flexible interest rate policy and new
product launching.
3. To make loan growth on the basis of prudence and centralized management,
with clear-cut review criteria, standardization of products, and process
improvements.
4. To strive for increasing service-based revenue to 27%.
5. To expand network of branches and sub-branches, to set up ATM network and
to establish a proactive sales system.
6. To train and develop the existing human resources, to continue recruiting
new staff and especially experienced officers; and to make full use of training
programs under technical assistance from IFC and SCB.
7. To further enhance the bank’s image as a strong, safe, and dynamic bank
responsible for shareholders, staff, customers, and the community.
Key Performance Targets

(Unit: VND Billion)
Targets Year 2006
Total assets 33,000

Customer Deposit 28,870
Outstanding loans 14,500
Profit before taxation 555
Network expansion: 10 branches and 10 sub-branches
Highlights of the Year
6/Jan/05 Press conference to introduce Vera-ACB Visa Electron Card
24/Jan/05 Shareholders’ Annual General Meeting 2005
30/Jan/05 “2005’s At Dau Spring Trees” program for underprivileged

children
16/Feb/05 ACB share capital increased to 600 billion VND
08/Mar/05 Inauguration of Hoi An Branch (Quang Nam Province)
16/Apr/05 Press conference to introduce gold options.
10/May/05 Press conference to introduce foreign currency options, factoring,

and 247 Call Center.
12/May/05 Press conference to introduce “ Phu Bao Tin”, a combined product

between ACB and Prudential Life Insurance Co.
16/May/05 Press conference to announce “For the Children’s World”

television live show (in collaboration with The National Fund for
Vietnamese Children, VTV and “Ha Noi Moi” – Evening News)
17/May/05 Inauguration of Chua Ha Branch (Ha Noi City)
23/May/05 Inauguration of new premise of Thu Duc Branch and of Kien Thiet
Sub-branch (HCMC)
01/Jun/05 “For the Children’s World” television live show
17/Jun/05 Signing ceremony of Technical Assistance Programme between

Standard Chartered Bank and ACB
22/Jun/05 Inauguration 0f ACB Security Service Joint Stock Company
25/Jun/05 Inauguration of Saigon ACB-SJC Jewelry Joint Stock Company
05/Jul/05 Share capital increased to VND 656.18 billion
14/Jul/05 Inauguration of Vung Tau Branch (Ba Ria-Vung Tau Province)
22/Jul/05 Inauguration of Hue Branch
26/Jul/05 Inauguration of Luy Ban Bich Branch (HCMC)
04/Aug/05 Inauguration of new premise of Cho Lon Branch and of Hong

Bang Sub-branch (HCMC)
www.acb.com.vn 13
12/Aug/05 Inauguration of Phan Dang Luu Branch (HCMC)
16/Aug/05 Inauguration of Cau Vong Branch (Da Nang City)
23/Aug/05 Share capital increased to 948,32 billion VND
29/Aug/05 ACB takes part in the “Computer for the start” Program held by
Intel Corp.
19/Sep/05 Inauguration of Cu Chi Branch (HCMC)
23/Sep/05 Inauguration of Nguyen Tri Phuong Sub-branch (HCMC)
02/Oct/05 Granting houses to underprivileged families of the suburban district

of A Luoi (Hue City)
04/Oct/05 Inauguration of Ho Nai Sub-branch (Dong Nai Province)
17/Oct/05 Inauguration of Ta Uyen Sub-branch (HCMC)
21/Oct/05 Inauguration of Van Lang Branch (HCMC)
27/Oct/05 Inauguration of An Suong Branch (HCMC)
11/Nov/05 Inauguration of Tan Thuan Branch (HCMC)
25/Nov/05 Inauguration of Ong Ich Khiem Branch and Ong Ich Khiem
Apartment Building (HCMC)
28/Nov/05 Inauguration of new premise of Ngoc Lam Sub-branch (Ha Noi

City)
06/Dec/05 Inauguration of Binh Tay Branch (HCMC)
08/Dec/05 Signing ceremony of cooperation between ACB and HCMC Post

Office regarding the expansion of distribution channels of Master
Dynamic Card and ACB- Visa Debit Card through its outlets
15/Dec/05 Inauguration of To Hieu Sub-branch (Hai Phong City)
19/Dec/05 Inauguration of Tan Binh Branch (HCMC)
21/Dec/05 Introduction of ACB- Saigontourist Premium Travel Card

Awards and Social Recognition
Cup 04/01/2005 Vietnam Industrial “Vietnam Trademark” Award

Property Association
Certificate of Decision No. HCMC People’s Good compliance with tax policy in 2004
Merit 1618/QD-BTC Committee
19/05/2005
Certificate of QĐ 1618/QĐ-BTC Ministry of Good compliance with tax policy in 2004

Merit 19/05/2005 Finance
Certificate of Decision No.1057/ The State Bank of Good implementation of open-market operations
Merit QD-NHNN Vietnam
918 /07/2005
Certificate of 07/2005 Citigroup Outstanding performance in international payment

Achievement service in 2005
Campaign 30/08/2005 People’s Committee 15th Anniversary of Nguyen Thi Minh Khai
medal of District 3 Scholarship Program.
Certificate & 06/09/2005 The Banker (Financial Bank of the Year in 2005 in Vietnam
Cup Times Group -UK)
Certificate of 06/09/2005 HSBC Outstanding performance in international payment

Achievement service in 2005
Certificate of Decision No. HCMC People’s High achievement in the management and
Merit 5942/QD-UB Committee promotion of product quality
23/11/2005
Campaign 23/11/2005 HCMC Red Cross ACB’s employees being appreciated for their
Medal contribution to charitable activities 2005
Certificate 2005 HCMC University of Scholarship for underprivileged students with

Banking outstanding academic results at HCMC University
of Banking
Certificate of Decision No. People’s Committee Good compliance with corporate technical
Merit 61/QD-UB of District 3 equipment registration as stipulated by Decree
12/12/2005 No. 168/CP of the Government.
Certificate of Decision No. Fatherland Front Contribution to “Fund for The Poor” in five years
Merit 444/QD Committee, (2001-2005)
29/12/2005 District 3, HCMC
Certificate of January Standard Chartered Outstanding Quality In Payment Formatting And

Achievement 2006 Bank Straight-Through Rate in 2005
www.acb.com.vn 15
Key Financial Figures from 2001 to 2005
25000 25000
24,247
22,332
20000 20000
15000 15000
15,417
14,359
10000 10000
10,855
9,350
9,928
8,620
7,399
5000 5000
6,767
0 0
2001 2002 2003 2004 2005 2001 2002 2003 2004 2005
TOTAL ASSETS (VND Billion) CUSTOMER DEPOSIT (VND Billion)
10000 400
9,565
385
8000 320
278
6,760
6000 240
5,396
160
188
4000
165
3,908
2,788
108
2000 80
0 0
2001 2002 2003 2004 2005 2001 2002 2003 2004 2005
OUTSTANDING LOANS (VND Billion) PRE-TAX PROFIT (VND Billion)
35% 125
33
30%
100
30
105
25%
27
25
89
75
20%
22
69
15%
50
58
47
10%
25
5%
0% 0
2001 2002 2003 2004 2005 2001 2002 2003 2004 2005
ROE (%) FEE INCOME (VND Bn)

www.acb.com.vn 17
What Our Customers Have Said
First of all we would like to congratulate ACB for its performance in 2005 with a
profit of VND 385 billion. We appreciate the friendliness and are pleased to work
with ACB. The bank’s professionalism has been well-illustrated through the staff’s
attitude and behaviour. Hopefully ACB will maintain its leading position in the
banking industry with diversified and competitive products. We trust that ACB can
do it!
Mr. Tran Xuan Bao

Chief accountant, Container Joint-Stock Company, Vietnam
11 Vo Thi Sau Street, May To Ward, Ngo Quyen District, Hai Phong City
I know about ACB by chance when it was about to be established. I am one of the
very first customers and still stay with the bank. I admire the Board of Directors
and the Management for having navigated ACB to the land of success and to
grow rapidly in every aspect. In less than 10 years, ACB has managed to be in the
top 500 banks in Asia (2000), to obtain Asia-Pacific Quality Award (2003) by Asia
Pacific Quality Organization (APQO). In 2003, the Governor of the State Bank of
Vietnam - Mr. Le Duc Thuy - commented: “ACB is the safest and most efficient
bank among joint-stock commercial banks in Vietnam”. I’m very pleased to be
welcome by professional and whole-hearted staff, every time I visit ACB.
Mr. Nguyen Van Lich

37F Nguyen Duy Duong, Ward 9, District 5, HCMC.
We used to be customers of state-owned banks. Our working capital-needs

was often not timely addressed, causing us to loose some momentum of our
business. Since we changed to joint-stock banks, we have been impressed with
their professionalism, especially that of ACB for the whole process, from project
appraisal, collateral evaluation to prompt decision. We highly appreciate the bank’s
customer oriented approach. We hope ACB will be “Bank of the year” for this year
and the years to follow.
Mr. Giao Nhut Phuong Tung

Director, Dai Giao Co., Ltd.
97/224 Son Cang Street, Tan Binh District, HCMC.
For more than three years of working with ACB-Saigon Branch, we have observed
many of its strengths including professionalism, warmness, timely response to
customers’ needs and reasonable service fees.
Mr. Nguyen Dinh Khoi, Director

Minh Tam LM & Construction Joint-Stock Company
215 B3 Nguyen Van Thuong Street, Thao Dien Ward, District 3, HCMC.
What Our Customers Have Said (continued)
We have business relationship with many local and foreign banks. Among them, ACB
emerges as one of the most satisfying banks with the effective product portfolio,
professional service and whole-hearted staff who can advise right products to
customers and duly address customers’ issues. What I respect most is the working
ethics at ACB. I believe that those strengths, if further reinforced, will build up
customers’ confidence as well as sustainable development.
Ms. Tu Hue Tran

Director, Vinh Loi Co., Ltd.
56 5A Street, Binh Thoi Apt., Ward 8, District 11, HCMC.
Upon submiting the first lending application, I thought it might be cumbersome and
time-consuming process but it turn out that it took very short processing time from
application to final decision. I received warm and diligent guidance. My dificulties
related to the loan was duly understood and timely addressed. I believe that ACB is
always a reliable finiancial partner for its customers.
Mr. Pham Minh Tan
Cong & Friends Co., Ltd.
358/14 Nguyen Cu Trinh, District 1, HCMC.
As a long time customer of ACB, we recognise its continuous development with

improved professionalism and expanding product portfolio. We trust that ACB will
be a faithful companion in the development of our business as well as others’.
Mr. Nguyen Cao Tri

Nguyen Cao Law Office
327 Ben Van Don Street, Ward 2, District 4, HCMC.
As we engage in packaging export activities, we conduct a lot of trade finiance

transactions with local and foreign banks. We recognise the professionalism of
ACB’s staff in all aspects. We also like its value adding services that help me save
time. ACB is a commited supporter of our business.
Ms. Le Thi Hien Luong

Director, Kim Duc Co., Ltd.
456A Kinh Duong Vuong Street, An Lac Ward, Binh Tan District, HCMC.
www.acb.com.vn 19
I have been doing business with ACB for six years, which is quite a long time, and
I think I will continue to stick to the bank for the long run. What makes me think
of ACB when I need banking services? ACB offers a variety of products and service
convenience to customer through its widespread presence. What I like most is being
served after working hours and even on public holidays. Moreover, its staff is young,
attentive and responsible to customers. ACB is the bank of my choice for being able
to meet my needs: convenience, simplicity, accuracy and availability.
Mr. Vo Nam Trung

159/6A Bach Dang Street, Ward 2, Tan Binh District, HCMC.
Appreciating ACB’s level of development, we decide to select ACB as our preferred

bank. We are pleased with the warm support and professionalism of the staff of
ACB-Phu Lam Branch in all service aspect from credit to trade finiance services.
ACB-Phu Lam Branch gives us peace of mind and we believe that “ACB is always
aiming to perfect customer service”. We wish ACB to win more customers, develop
continuously and be trusted partner of all enterprises.
Mr. Hua Van Quyen

Ngo Quyen Automobile Engineering Private Enterprise
721 Kinh Duong Vuong, An Lac Ward, Binh Tan District, HCMC
In the middle of 2005, ACB launched the Hue branch. We, an enterprise operating
in the Hue hospitality sector from 1999, have examined both the advantages and
disadvantages of ACB and its products. Upon receiving the bank’s introductory letter,
we had a thought of setting banking relationship with ACB. On the warm reception
of the experienced staff, we decided to enter into a formal business relationship
with ACB to help financing our business in 2006. We wish ACB to firmly develop
and win customers’ will.
Mr. Mai Duc Lieu,
Business Owner, Hoang Ngoc Hotel
3 Phan Dinh Phung Street, Hue.
AGM Resolution
Resolution Summary
The following items were approved at the AGM:
1. Report of the President on year 2005 performance and the business plan for
2006.
2. Report of the Supervisory Board on the bank’s 2005 financial statements.
3. Profit distribution plan, dividend payment plan and use of funds in 2005.
4. Proposal on the retention of a portion of year-2006 profit for capital

enrichment.
5. Draft proposal of the Board of Directors to the State Bank of Vietnam on the
listing of ACB shares, the Board of Directors being assigned to decide on when to
do the listing and which securities trading center to register at.
6. Proposal on the capital construction, fixed assets purchase and budget for
information technology projects in 2006.
7. Supplementary voting of four new members to the Board of Directors.

www.acb.com.vn 21
Increase in Share Capital
On 14th February 2006, the Governor of the State Bank of Vietnam approved the
increase of ACB’s share capital from VND 948,316 billion to VND 1,100 billion.
ACB has fulfilled all the required procedures under the prevailing regulations and
changed the terms relating to the enrichment.
Dividend
During the year, shareholders received cash dividend of 12% for the 600,000 shares
before the enrichment in Q3/2005 and 6% for the 348,316 shares increased in the
enrichment in Q3/2005. At the Meeting, shareholders agreed to ratify the payment
of share dividend at the ratio of 16%.
New Members of the Board of Directors
The General Meeting of Shareholders on January 20th 2006 elected to the Board
the following four members:
• Mr. Julian Fong Loong Choon from Standard Charter APR Ltd.
• Mr. Pisit Leeahtam from Connaught Investors Ltd.
• Mr. Timothy M. Krause from International Finance Corporation (IFC)
• Mr. Tran Hung Huy, individual shareholder.
Organizational Chart
General
Meeting of
Shareholders
Board of
Directors
The Committees
President
&
CEO
ISO Quality Assurance Dept
Internal Audit Dept
Credit Policy &

Management Dept
Consumer Commercial Business

Treasury
Banking Banking Development
Division
Division Division Division
Deposit & Personal Finance Branch Support &

Credit Analysis Dept Money Market Dept
Dept Development Dept
Sales Dept Trade Finance Dept Foreign Exchange Dept Marketing Dept
Product & Customer Market Research

Credit Dept Gold Trading Dept
Analysis Dept Dept
E- Banking Dept WU Money

Factoring Sub-Dept Banknote Dept
Transfer Center
Information Analysis Dept
Main Branch, Branches, Sub-branches and

www.acb.com.vn 23
Supervisory Board
Board of Directors' Office
Strategic Planning Dept
International Relations Dept
Collateral Apraisal Dept
Managerial Resource
Monitoring Management IT Division
Division Division
Accounting Dept Human Resources Dept IT Infrastructure Dept
Risk Management IT Operations Dept

Administration Dept
Dept
General Management
Training Center IT Development Dept
Dept
Legal Dept Bankcard EDP
Investment Portfolio
Call Center 247
Sub-Dept
Bankcard Center
The Board of Directors
TRAN MONG HUNG PHAM TRUNG CANG NGUYEN DUC KIEN TRINH KIM QUANG
Chairman Vice Chairman Vice Chairman Member
www.acb.com.vn 25
NGUYEN CHI THANH NGUYEN NHAC HUYNH THANH THUY PISIT LEEAHTAM
Member Member Member Member
The Board of Directors (continued)
TIMOTHY M. KRAUSE JULIAN FONG LOONG CHOON TRAN HUNG HUY

Member Member Member
www.acb.com.vn 27
The Management
LY XUAN HAI PHAM VAN THIET DAM VAN TUAN

President Vice President Vice President
The Management (continued)
HUYNH QUANG TUAN LE VU KY NGUYEN THANH TOAI DO MINH TOAN

Vice President Vice President Vice President Vice President
www.acb.com.vn 29
VO TRONG THUY LE MINH TAM NGUYEN VAN HOA HUYNH NGHIA HIEP
Vice President Vice President Chief Accountant Vice President
The Supervisory Board
TRIEU CAO PHONG DINH THI HOA HOANG NGAN PHUNG THI TOT
Chief Comptroller Comptroller Comptroller Comptroller
www.acb.com.vn 31
Bankcard Center Activites
In 2005, many of Vietnamese banks started issuing debit cards and

setting up alliances to link points of sale (POS) and ATM networks.
Bankcard business has become increasingly active and competitive. In
such a situation, ACB Bankcard Center (the center) has exerted itself
to achieve encouraging performance.
Issuing Activity
In order to promote growth of cardholders, the center cooperated with well-known

partners, selling cards to customers who subscribe for ADSL internet service of FPT,
issuing ACB-Saigon Tourist co-branded cards to VIP customers of Saigon Tourist.
Customers may now also apply for ACB bankcards through the network of the
HCMC Post Office.
Furthermore, the center offered incentives and convenience to card applicants and
stepped up the dissemination of bankcard knowledge among college students.
The number of issued cards by end-2005 was 64,666 while the volume reached
VND 1,266 billion.
Acquiring Activity
New merchants acquired in 2005 reached the number of 794, making the total up
to 5,569 merchants. Total volume topped VND 1,346 billion. Not-on-us business
constituted a significant proportion and was the main source of earnings. Most
high-volume merchants are concentrated in big cities and provinces like Ha Noi,
HCMC, Hoi An (Quang Nam) and Nha Trang (Khanh Hoa). Customers are mainly
from tourists.
Fraud Prevention
The center is highly aware of the importance of fraud prevention and risk management
in bankcard transactions. The Center follows closely with information on fraudulent
transactions and skimming from international bankcard organizations to inform
cardholders, especially keeps close guard on transactions made in countries with
high rate of skimming and notify cardholders in order for them to change password
for prevention. The center also contacts merchants for timely advice when there
are doubtful transactions. Information or events relating to fraud and skimming is
always shared with international bankcard organizations.
Bankcard Center Activities (continued)
Training
During 2005, key staff were sent for local and overseas training courses held by
Visa and MasterCard. In addition, The center also offered some training courses on
merchant- and card business to CSR staff at new branches, and organized classes
on new products for branch staff.
Non-performing Loans
The center has strengthened the monitoring and collection of overdue debts, at
the same time coordinated with ACB Asset Management Company (ACBA) to start
legal proceedings for recovery. Non-performing loans ratio in 2005 was 0.6% which
is 0.08% less against 2004.
Infrastructure Upgrading
To prepare for the EMV (chip card) program as required by Visa and MasterCard,
in September 2005, ACB signed a contract with Opus, an Indian software solutions
company, for the management of issuing and payment of ElectraCard, replacing
the current CardPro system) and establish new switching system - ElectraSwitch - so
as to link with other local banks.
New Product Development
In 2005, the center launched Visa debit card, MasterCard Dynamic, and ACB-
Saigontourist MasterCard Dynamic, all of which came with overdraft feature to
meet customers’ demand for borrowing. “Visa Partnership” agreement was signed
with Visa who will lend its support to ACB. Another agreement was signed with
HCMC Post Office for the development of Visa debit card.
www.acb.com.vn 33
In 2006, the following shall be deployed:

- Dynamic Currency Conversion with e-Clearing Vietnam
- Card acceptance via Internet with VDC
- Acceptance CUP card with China Union Pay
- National Net Settlement Service (NNSS) with Visa and member banks in Vietnam
- ATM project: the first 60 ATMs are planned to be in operation in June 2006,
together with the issuance of Visa ATM cards.
Business Performance
In overall, the center has accomplished its targets, remaining a high performance
unit within the bank. Its profit in 2005 is VND 24.25 billion.
ACBS Activities
Year 2005 witnessed a stable growth of Vietnam stock market. The total trading
volume of listed bonds was 38.122 billions VND, equaling 4.9% of GDP, and the
total trading volume of listed stocks 9,356 billions VND, equaling 1.2% of GDP
(volumes of both securities trading centers in HCMC and Ha Noi). The VN index
reached 237.23 points in the early year and 308.8 points in year-end, and this was
up by 10.56% versus 2004.
In March 2005, Ha Noi Securities Trading Center became operational as the second
one in the country. The market became more heated after Government’s decision
to increase the maximum stake owned by foreign investors in listed companies from
30% to 49%. That USD 750 million Vietnamese government bonds was issued
successfully in New York Stock Exchange (USA) leads to a new funds mobilizing
channel for Vietnam economy. Draft law on securities being completed by the
Ministry of Finance and expected to submit to the National Assembly in June 2006
shall lay the foundation for the new development of the country stock markets.
Year 2005 also witnessed ACBS pacing up remarkably. Profit before tax reached
VND 33.47 billion nearly doubling that of 2004. ACBS’s income comes from
three main services including brokerage, proprietary trading and advisory service.
Brokerage turnover was up by 40% compared to year 2004. Turnover from other
services like bond guarantee and brokerage tripled and contributed considerably
to the performance of the company. Proprietary trading mainly focused on trading
listed stocks and gained VND 50 billion turnover and VND 12 billion investments by
other OTC stocks. Corporate financial advisory service owned a very strong growth
www.acb.com.vn 35
focusing on equitization advisory service (including assessing a company’s value and

initial public offering auction).
ACBS’s charter capital having been raised to VND 100 billion makes it one of the
largest firms in terms of capital in Vietnam. A new product - stock repo - was
introduced by ACBS in 2005. Foreign affairs have been enhanced remarkably in
2005. Several big foreign investors like Citigroup Global Markets, Nomura Securities,
Arisaig Fund, etc, have established relationship with ACBS.
Vietnam’s stock market is expected to keep growing by the number of listed

companies, amount of market capitalization and VN index in 2006. After such
big Vietnamese companies like Vinamilk, Sacombank, Imexfarm, etc. are listed,
the amount of market capitalization will be likely to double versus 2005. OTC
market continues to be vivid. State owned company equitization process will be
accelerated. In such a prosperous situation, ACBS has built up its 2006 business
plan in principle of stability and sustainable development. ACBS will open one more
securities trading house in HCMC and acquire agents in major cities and provinces to
meet investors’ surging demand. Bond and stock repos will be boosted up together
with the enhancement of custody service and shareholder management for non-
listed companies. Relationship with foreign partners will be enhanced; and human
resources strengthened. Charter capital is planned to be the largest among the
firms in the market.
Activities of Western Union Money Transfer Center
2005 saw some significant changes in the activities of Western Union. A state-
owned commercial bank with widespread network became another agent of
Western Union. Other current agents also expanded the coverage of their payment
locations. Given this situation, ACB Western Union Money Transfer Center (the
center) made effort to maintain its position. Business result in 2005 was bright.
Turnover and profit were much higher than the previous years. Particularly, turnover
increased by 43%, profit increased by 12%, as compared to 2004.
This growth was partly due to the fact customers are becoming more aware of
Western Union money transfer service through ACB. Especially, the standardization
of the remittance delivery team and the extension of payment locations to over 64
provinces throughout the country (including islands and mountainous areas) have
contributed to the growth of turnover last year.
Aiming for even higher turnover growth in 2006, the center provided training on
outward remittances by the end of Q4/2005 to all agents in the country, getting
prepared for the launching of this service in 2006. The center has also set up a team
specialized in marketing and developing agents, and at the same time adjusted
its business strategy. As for service quality, the center has planned to strengthen
the system which helps monitor and controll the quality of services. The center
also exchanges information with agents regularly and adequately care about their
benefits.
With the payment location network covering 64 provinces throughout the country,
the center has taken its first step of decentralization by regions to attain flexible
management and optimal business result.
www.acb.com.vn 37
Activities of ACB Asset Management Company
ACB issued Regulation on organization and operations of ACB Asset Management

Company (ACBA) in 2005. ACBA’s organizational structure consists of
Chairman, General Director, Recovery department and Accounting-administrative
department.
ACBA has issued its financial regulation and operational procedure for overdue
debts recovery, specifying actions that should be taken during the process: debt
receipt, appraisal, classification, methods for settlement, forms and responsibilities
of relevant departments, etc. ACBA has also built a measure to control 100%
dossiers under its management including doubtful and complicated cases. This
control is considered a solid premise for collection in the future.
Auction property sale was added to ACBA’s scope of business to speed up its debt
settlement process. At present, four staff of ACBA are licensed auctioneers eligible
to perform this kind of sale as regulated by law and regulations.
In combination with ACB Information Technology Division, ACBA has built an

operations management program to make its data, information on documentation,
debt amount, progress of debt settlement manageable so as to ensure a strict
monitoring and management of documentation and to serve reporting purpose.
ACBA also worked with ACB Legal Department in investigating and assisting ACB’s
branches outside Ho Chi Minh City like Can Tho, An Giang, Da Nang, in debt
settlement. After investigations, ACBA has analyzed reasons of overdue debts and
made recommendations on measures of recovery and prevention of overdue loans.
ACBA has several times proposed to state authorities on difficulties encountered by
this type of company during its operation.
Some highlights:
Debts received from units belonging to ACB in Ho Chi Minh City:

- In the early year: 294 dossiers with total debt amount of VND 51.8 billion.
- Occurring within the year: 137 dossiers with total debt amount of VND 14.1
billion.
In Ho Chi Minh City, ACBA recovered a principal amount of VND 9.6 billions, an
interest amount of VND 1.2 billions, liquidated 161 dossiers and achieved 120%
of its 2005 plan.
The profit for 2005 was VND 226 million.
In 2006, ACBA continues to focus on strengthening its operations staff and

enhance auction property sale for faster recovery.
ACB: “Bank of the Year” in Vietnam in 2005
The Banker is the global banking magazine of the Financial Times

Group and was established in 1926. The magazine grants awards
for outstanding banks at global, regional, national levels and banks
with best use of IT. In July 2005, The Banker announced that Asia
Commercial Bank won “Bank of the Year”award for Vietnam in
2005.
The methodology for the award is to issue questionnaire, collect the data from the
banks themselves; check the data provided by the banks with the magazine’s own
data sources; and to assess the banks by a panel of editors and correspondents.
Awards are a subjective judgment based not only on the data available but also on
market performance, strategic initiatives, technology usage and overall growth.
The award to ACB is a positive recognition of the bank’s achievement of objectives,

especially in terms of financial performance, market share and image. Its ROE is
33% and 30% in 2004 and 2005 respectively. The bank’s deposit market share
currently accounts for 6% of the whole Vietnamese banking system and it aims to
achieve 10% in five years’ time. By the end of 2005, its total assets reached $1.5
billion, the largest among the peer banks.
A higher and more secure rank in the industry is another objective. The bank’s
performance could be recognized by the high evaluation of the Vietnamese
regulators. Mr. Le Duc Thuy, the Governor of the State Bank of Vietnam (SBV)
said in the tenth anniversary of the bank in June 2003: “ACB is the leading joint-
stock commercial bank in terms of size, development level and great contributions
to banking and credit activities...and speeding up the development process of
Vietnam banking system in line with the progressive trends in the region and in
the world.” In October of the same year Mr. Governor in a press interview had the
following remark: ““ACB is one of the safest and most effective joint-stock banks
in Vietnam.” Early in 2005, Mr. Tran Minh Tuan, Deputy Governor of the SBV
commented that ACB was evaluated a leading bank, and especially recognized a
bank that always strictly complied with SBV’s regulations.
www.acb.com.vn 39
Mr. Vo Trong Thuy (left) - Vice President of ACB

receiving the Award “Bank of the year 2005 Vietnam“ from
Mr. Stephen Timewell (right) - Chief of The Financial Times (UK)
Recently in January 2006, Mr. Tran Ngoc Minh, Director of SBV HCMC gave his
comment: … As bank regulators, we are very proud of ACB’s operations…
A stake of 30% is owned by four foreign shareholders which are Connaught

Investors (Jardine Matheson Group), Dragon Capital, IFC, and Standard Chartered
Bank. Those shareholders were a source of assistance to the bank in many regards.
IFC had given a technical assistance via a two-year comprehensive training program
on banking products and operations before becoming a shareholder and currently
sponsored another technical assistance program aiming at the enhancement of
risk management, assets and liabilities management, security management and
network assessment, etc. August of this year 2005 witnessed the commencement
of a five-year technical assistance program by SCB which aims to make ACB a
highly competitive commercial bank in the Vietnamese banking market, especially
in retail banking, and to maintain the position of ACB as the pre-eminent joint-stock
commercial bank in Vietnam.
BANK OF THE YEAR 2005

VIETNAM
Social Activities
In order to maintain sustainable development, an organization needs

not only look after its stakeholders, but also the community, especially
the underprivileged. From that point of view, ACB always stay true
to its philosophy of being corporate social responsible and ever more
vigorous in its social activities.
ACB has established a Charity Committee which includes representatives of the

bank’s labor union, youth union and Human Resource Department in order to
organize all social activities so as to ensure the bank’s efforts in satisfies those in
need.
Pupils and students are in the first group that benefits from the bank’s “For the
Community” program. In 2005, ACB granted 14 Nguyen Thi Minh Khai scholarships
under the illiteracy eradication program of District 3 Woman’s Association;
coordinated with the HCMC Red Cross Society to give more than 2,500 presents
to the pupils whose parents are victims of agent orange; made contribution to
Nguyen Thai Binh Fund of Thanh Nien Newspaper; granted scholarships to poor
but students with outstanding performance of HCMC University of Economics and
HCMC University of Banking; and supported study encouragement funds in several
cities and provinces.
ACB also cares about the disabled and/or miserable children. ACB, together with the
HCMC Red Cross Society, organized “Spring Tree” program on the Lunar New Year
for those children. Particularly, in the action month of “For the Children’s World”
2005 program launched by the Viet Nam Children Sponsor Fund, ACB spent up to
VND 700 million for heart operations of children with inborn heart disease. On the
occasion of the mid-autumn festival, poor children in Can Tho, Gia Lai and Tra Vinh
provinces enjoyed a real full-moon night organized by ACB in coordination with the
two above-mentioned universities. Furthermore, ACB visited disabled children in
Bung Sang School, Ky Quang pagoda, giving them presents, wheelchairs, learning
and playing tools, and financed HCMC Disabled Children Sponsor Association’s
operations program for children with cleft palate and cataract.
As for the ill-fated people, ACB regularly takes part in “Bringing light to the poor
www.acb.com.vn 41
blind” program of the Poor Patient Sponsor Association. In 2005, ACB built 5 houses
for the ethic minority households at A Luoi District (Hue City) under the Miserable
Housing Eradication Program launched by Thua Thien Hue People’s Committee,
offered VND 500 million to victims of Storm No.7 for them to recover their normal
living, visited and gave presents to poor families and the lonely elders; contributed
to the Poor People Fund of An Giang province and “For a better smile” operation
program of CitiGroup.
ACB also concerns about cultural community activities. In 2005, ACB sponsored the
“World of Children” live telecast, bringing a wonderful day to children throughout
the country; made contribution to the June 1st Children’s Festival at Tao Dan
Park organized by HCM Communist Youth Union, with more than 3,000 children
attended; and financed other programs including The Singing of Students, The
Graceful Students (HCMC University of Banking), Career Fair (HCMC University of
Economics), Lim Festival in Bac Ninh Province, Traditional Culture Festival in Hue
City, ‘Hoi Tu Xanh’ Tourism Festival in Binh Thuan Province.
ACB’s funds for social activities in 2005 was VND 2.5 billion, of which 60% went to
children, 20% to educational programs, 10% to the disabled and the poor, 5% to
merited families, and 5% to victims of natural calamity.
In 2006, ACB shall maintain its charity funds and participate in other areas such as
health care, knowledge of life, arts, sports, etc. Close co-operation between ACB
and counterparties is expected to provide timely and practical care and support to
those considered.
Participation in social activities has become a cultural trait of ACB staff and customers
of the bank find it not only reliable but also active in social activities.
Correspondent Bank Relationship

www.acb.com.vn 43
In 2005, ACB continue to widen its correspondent bank network to meet the
demands of its import-export customers as well as its own business. The bank
has so far established correspondent relations with more than 450 banks in 100
countries. of these banks, 45 have global presence.
ACB has relationship with world leading prestigious banks such as Citibank,
Deutsche Bank, JP Morgan Chase, Standard Chartered Bank, Wachovia, etc. ACB
has got credit line for L/C confirmation and foreign exchange deals. The bank
was granted awards from HSBC, Citibank and Standard Chartered Bank for its
outstanding performance in international payments.
An Overview of Vietnam Banking System in 2005
The world economy witnessed big upheavals in 2005. The oil price at times topped
the threshold of 70 USD per barrel – the highest in the past 21 years. Such soaring
also took place in gold price with 540 USD/ounce – peak of the past 24 years. Inflation
pressure was escalating. Avian flu attacked many countries. Katrina typhoon destroyed
some southern states of the U.S. Tsunami resulted in heavy economic damages in many
Southeast Asian countries.
The global economy, however, enjoyed a steady growth. According to World Bank,
global GDP increased by 3.2% in 2005 after reaching its highest growth of 3.8% in 2004
during the past three decades. Many central banks raised their interest rates to cope with
the increasing inflation pressure. Since June 2004, the U.S. Federal Reserve has increased
its interest rate 13 times, from 1% p.a. to 4.25% p.a. in 2005 year-end. European
Central Bank (ECB) also took its key long-term interest rate from 2 to 2.5% in 2005.
The world’s most important stock markets in the U.S., England, Germany and Japan
remained highly unstable. The U.S. Dollar enjoyed an appreciation versus other hard
currencies. The Asia-Pacific economy’s growth stayed at a high level of 6.3% - a slight
decline in comparison with 7.1% in 2004; this growth took place in both developing and
transitional economies.
Vietnam’s GDP growth was 8.4% in 2005 – the crest in the past nine years, but still
lower than 9.34% in 1996. Average growth rate of the 2005-2010 period was 7.5%.
Service sector owned a growth of 8.5%, much higher than the past two years. Total
investment of the whole society was sharply increasing which accounted for 38.5%
GDP. Official development assistance (ODA) reached USD 3.75 billion of commitment,
of which USD 1.7 billions was disbursed. Foreign direct investment (FDI) stayed at USD
6 billions approximately. National foreign currency reserve stood at around ten import
weeks. Consumption price index (CPI), on the annualized basis, was 8.4% lower than
2004’s 9.5%. Export turnover was USD 32.23 billions while import turnover was USD
36.68 billions resulting in import surplus of USD 4.65 billions. Foreign exchange was, on
the annualized basis, lifted by 0.9% slower than the 1% estimated in the beginning of
2005.
Vietnam’s banking industry has been marked by many significant achievements in 2005.
Thanks to its well-controlled exchange rate, an international credit ratings firm upgraded
Vietnam’s long-term foreign currency from B+ to BB-. This promotion reflects Vietnam’s
sustainable development outlook as well as its reinforced position in foreign affairs.
The State Bank of Vietnam (SBV) adopted a cautious and flexible monetary policy. Based
on a strict monitoring of fluctuations of monetary market, it raised refinancing rate
from 5% to 6.5% (after three times of adjustment), discounting rate from 3% to 4.5%
(three times) and the base VND rate from 7.8% to 8.25% (two times). Under impacts
www.acb.com.vn 45
of capital supply and demand, credit institutions also lifted their deposit rates. Averagely,
VND deposit rate increased by 0.6 - 1.2% and USD deposit rate by 1.2 - 2.5% while VND
and USD lending rate 0.6% and 0.7 - 1.5% respectively. SBV adjusted exchange rate
in a flexible manner to take a firm lid on inflation and give a boost to export. Exchange
rate, for the whole 2005, only increased by 0.9% versus 2004. Open market operations
remained the key channel to put money into and absorb from circulation.
SBV continued the second phase of the project of banking and payment system
modernization. Mechanism and policies have been improved to be closer to international
standards and practices, paving the road for strengthening financial transparency and
enhancing the competitiveness of commercial joint-stock banks. VND 12,500 billions
was poured into state-owned commercial banks to enlarge their capital and improve
their capital adequacy ratios. Two banks - Vietcombank and Mekong Housing Bank
- have been approved by the Government for being equitized. Commercial joint stock
banks continued to increase their charter capital, expand their distribution network, and
develop new products especially electronic banking products. About 500 ATMs have
been installed; and a sharp increase occurred in the number of cards (from 560,000 in
2004 year-end to over 2 millions in 2005). The number of individual accounts, in 2005,
hiked up to 5 millions from 1 million. Total mobilized funds and outstanding loans,
on the annualized basis, of the entire banking industry increased by 22% and 22.5%
respectively. In general, 2005 is a year of success to the banking industry.
The world economy is expected to be stable in 2006 but full of challenges like fluctuations
of oil and gold prices and world-wide imbalance due to high deficit of current accounts
of such big economies as the U.S. and Japan. Vietnam will maintain its high growth. GDP
growth rate will stay around 8%; the added value of service sector will be 8%; CPI’s
increase will be surpassed by economic growth; the growth of export turnover will stand
at 16.4%.
SBV will continue to take cautious and flexible policies based on macroeconomic
movements to make inflation manageable and push up economic steady growth.
Monetary and credit mechanism and policies will be revised to bolster credit institutions’
self-determination, establish an open legal framework by international standards and
practices. Restructuring program will be boosted to improve the competitiveness of local
credit institutions. Banks will intensify funds raising and credit expansion under control of
growth rate and credit quality.
2006 will be a favorable and important year for the banking industry in general and
joint-stock commercial banks in particular. It is favorable thanks to 2005’s significant
achievements, the economy’s strong growth, national credit ratings being upgraded
and Vietnam’s position being reinforced in international arena. It is important in that
commercial banks will have opportunities to enhance their competitiveness. Yet, such
opportunities must be leveraged to be successful in the path of regional and international
economic integration.
46
46 Báo cáo Report
Annual thường2005
niên 2005 www.acb.com.vn 47
Financial Report
Report of the Bank’s Management 48

Report of the auditors 50
Balance sheet 52
Income statement 53
Statement of cash flows 54
Notes to the financial statements 56
Branch Network 88
48 Annual Report 2005 www.acb.com.vn 49
Report of The Board of Management
The Bank’s Management submit their report together with the audited consolidated financial statements Results
of Asia Commercial Joint Stock Bank, (“the Bank”) and its subsidiaries (together, “the Group”) for the year The results of operations for the year ended 31 December 2005 are set out in the consolidated income
ended 31 December 2005. statement on page 6(*) of the consolidated financial statements.
The Boards of Directors And Management Auditors

The members of the Boards of Directors and Management during the year and to the date of this report were: The consolidated financial statements have been audited by PricewaterhouseCoopers (Vietnam) Limited.

Board of Directors: Statement of The Responsibility of The Board of Management In Respect of
The following members of the Board of Directors for the period from 2003 to 2008 have been appointed
The Consolidated Financial Statements
and approved in the minute of shareholders meeting dated 18 January 2003 and additional following
The Bank’s Management is responsible for the consolidated financial statements which give a true and
members have been approved in the minutes of shareholders meeting dated 20 January 2006:
fair view of the financial position of the Group as at 31 December 2005 and of its results of operations
Mr Tran Mong Hung Chairman
and cash flows for the year then ended. In preparing these consolidated financial statements, the Board of
Mr Pham Trung Cang Vice-Chairman
Management is required to:
Mr Nguyen Duc Kien Vice-Chairman
Mr Trinh Kim Quang Member
• select suitable accounting policies and then apply them consistently;
Mr Nguyen Chi Thanh Member
• make judgments and estimates that are reasonable and prudent; and
Mr Nguyen Nhac Member
• prepare the consolidated financial statements on a going concern basis unless it is inappropriate to
Mr Philip David Smiley Member (resigned on 20 January 2006)
presume that the Group will continue in business.
Ms Huynh Thanh Thuy Member
Mr Pisit Leeahtam Member (appointed on 20 January 2006)
The Bank’s Management is responsible for ensuring that proper accounting records are kept which
Mr Timothy M. Krause Member (appointed on 20 January 2006)
disclose, with reasonable accuracy at any time, the financial position of the Group and which enable
Mr Julian Fong Loong Choon Member (appointed on 20 January 2006)
consolidated financial statements to be prepared which comply with the basis of accounting set out in Note
Mr Tran Hung Huy Member (appointed on 20 January 2006)
2 to the consolidated financial statements. The Bank’s Management is responsible for ensuring compliance
with Vietnamese Accounting Standards and prevailing regulations applicable to banks and other credit
Management: institutions operating in SR Vietnam. They are also responsible for safeguarding the assets of the Group
The following have been members of the Management for the period of these financial statements and to
and hence for
the date of this report:
taking reasonable steps for the prevention and detection of fraud and other irregularities.
Mr Ly Xuan Hai President (appointed on 16 June 2005)
Mr Pham Van Thiet Vice President (appointed on 16 June 2005)
Approval of The Financial Consolidated Statements
Mr Huynh Nghia Hiep Vice President
We hereby approve the accompanying consolidated financial statements on page 5 to page 40 (**) which
Mr Le Vu Ky Vice President
give a true and fair view of the financial position of the Group as at 31 December 2005 and of its results of
Mr Nguyen Thanh Toai Vice President
operations and cash flows for the year then ended, in accordance with Vietnamese Accounting Standards
Mr Huynh Quang Tuan Vice President
and prevailing regulations applicable to banks and other credit institutions operating in SR Vietnam.
Mr Dam Van Tuan Vice President
Mr Do Minh Toan Vice President (appointed on 26 April 2005)
For and on behalf of the Bank’s Board of Management
Mr Vo Trong Thuy Vice President (appointed on 4 May 2005)
Mr Le Minh Tam Vice President (appointed on 2 November 2005)
Principal Activities
The principal activities of the Bank and its consolidated subsidiaries are to mobilise short, medium and
ong-term capital in the form of time deposits, demand deposits, certificates of deposit; receive investment
funds; receive capital from local and overseas financial institutions; grant short, medium and long-term
Mr Ly Xuan Hai - President
loans; discount commercial paper, bonds and valuable documents; set up partnerships and joint ventures;
Ho Chi Minh City, SR Vietnam
provide settlement services to customers; deal in foreign exchange, gold; provide international settlements
10 March 2006
services; investment in bonds and securities; provide investment and asset management services and
provide other banking services.
(*): page 53 of this annual report; (**): from page 52 to 87 of this annual report;
Auditors’ Report To Shareholders of Asia

Commercial Joint Stock Bank
(Được cấp giấy phép và thành lập tại nước CHXHCN Việt Nam)
We have audited the accompanying consolidated balance sheet of Asia Commercial Qualified opinion arising from limitation on audit scope
Joint Stock Bank (“the Bank”) and its subsidiaries (together, “the Group”) as of 31 In our opinion, except for any adjustments that might have been found to be nec-
December 2005 and the related consolidated statements of income and cash flows essary had we been able to carry out satisfactory audit procedures on the opening
for the year then ended, as set out on pages 5 to 40. These consolidated financial balances at 1 January 2005 of the Bank’s subsidiary and associate company as men-
statements are the responsibility of the Bank’s Management and have been pre- tioned in the preceding paragraph, the consolidated financial statements give a true
pared in accordance with Vietnamese Accounting Standards and prevailing regula- and fair view, in all material respects, of the financial position of the Group as at 31
tions applicable to banks and other credit institutions operating in SR Vietnam. Our December 2005 and of the results of its operations and cash flows for the year then
responsibility is to express an opinion on these consolidated financial statements ended in accordance with Vietnamese Accounting Standards and prevailing regula-
based on our audit. The consolidated balance sheet of the Group as at 31 December tions applicable to banks and other credit institutions operating in SR Vietnam.
2004 and the related consolidated statements of income and cash flows for the year
then ended are presented as comparative figures in the accompanying consolidated
financial statements. These comparative figures were not audited.
Basis of opinion
Except as described in the following paragraph, we conducted our audit in accor-
dance with Vietnamese Standards on Auditing and International Standards on Au-
diting accepted in SR Vietnam. Those Standards require that we plan and perform
the audit to obtain reasonable assurance that the consolidated financial statements
are free of material misstatement. An audit includes examining, on a test basis, evi-
dence supporting the amounts and disclosures in the consolidated financial state-
ments. An audit also includes assessing the accounting principles used and signifi-
cant estimates made by the Bank’s Management, as well as evaluating the overall
Ian S. Lydall Le Van Hoa
consolidated financial statements presentation. We believe that our audit provides
AC No. N. 0559/KTV AC No. 0248/KTV
a reasonable basis for our opinion.
Authorised signatory
Limitation on audit scope

The consolidated financial statements for the periods prior to 1 January 2005 in-
PRICEWATERHOUSECOOPERS (VIETNAM) LIMITED
cluded the Bank’s subsidiary and associate company whose financial statements
Ho Chi Minh City, SR Vietnam
were not audited. We were unable to carry out satisfactory audit procedures neces-
Audit report number HCM1103
sary to obtain sufficient assurance on the opening balances as at 1 January 2005 of
10 March 2006
those aforementioned subsidiary and associate company. It has not been possible
to assess if the balances of the reserves and retained earnings at 1 January 2005 are
complete and accurate, or to conclude on the potential impact on the consolidated
income statement and consolidated statement of cash flows for the year ended 31
December 2005 of any potential adjustments to the opening balances of assets and
liabilities.
(*): from page 52 to 87 of this annual report;

Consolidated Balance Sheet Consolidated Income Statement

As At 31 December 2005 For The Year Ended 31 December 2005
2005 2004 2005 2004

Notes VND million VND million Notes VND million VND million
Assets Interest and similar income 26 1,354,980 855,738
Cash and precious metals 4 1,532,492 553,659 Interest expense and similar charges 27 (840,715) (505,443)
Balances with the State Bank of Vietnam 5 988,784 727,117 Net interest income 514,265 350,295
Placements with overseas banks 6 427,153 161,821 Fees and commission income 28 112,807 92,776
Placements with local credit institutions 7 5,926,745 3,846,155 Fees and commission expenses 29 (15,599) (15,914)
Loans and advances to local credit institutions 8 181,407 61,238 Net fee and commission income 97,208 76,862
Trading securities 9 39,218 6,999 Dividend income 30,778 2,065
Loans and advances to customers 10 9,381,517 6,698,437 Net gain from dealing in foreign currencies 30 14,640 8,782
Less: provision for losses on loans and advances to customers 10.7 (20,825) (26,027) Net gain from trading of securities 31 2,626 9,516
Investment in debt securities 11 Other operating income 32 28,137 28,118
- available-for-sale 11.1 456,515 157,287 Other income 76,181 48,481
- held-to-maturity 11.2 4,367,252 2,734,463 Salary and related expenses 33 (108,538) (71,035)
Investment in associates and joint venture 12 11,713 611 Depreciation and amortisation 14, 15 (25,520) (17,874)
Investments in other entities 13 125,003 50,662 Other operating expenses 34 (157,255) (93,064)
Tangible fixed assets 14 257,880 104,532 Other expenses (291,313) (181,973)
Intangible fixed assets 15 12,470 14,467 Provision for losses on loans and advances 10,7 (12,201) (16,027)
Construction in progress and purchase of fixed assets 16 224,128 152,847 Income on recovery of bad debts 7,614 4,338
Other assets 17 361,412 175,266 Provision for diminution in value of investments (1,405) -
Total assets 24,272,864 15,419,534 (5,992) (11,689)
Liabilities Operating profit 390,349 281,976
Borrowing from the State Bank of Vietnam 18 967,312 68,670 Share of profit of associates and joint venture 1,201 172
Deposits and borrowings from local credit institutions 19 1,123,576 1,000,806 Profit before tax 391,550 282,148
Funds received from Government, international and other institutions 21 265,428 243,950 Business income tax 36 (92,349) (68,057)
Deposits from customers 20 19,984,920 13,040,340 Net profit for the year 299,201 214,091
Other liabilities 22 630,026 345,212
Income tax payable 18,396 10,558
Total liabilities 22,989,658 14,709,536
Shareholders’ equity
Chartered capital 23 948,316 481,138
Reserves 24 138,973 197,845
Retained earnings 24 195,917 31,015
Total shareholders’ equity 1,283,206 709,998
Chairman President Chief Accountant
Total shareholders’ equity and liabilities 24,272,864 15,419,534 Tran Mong Hung Ly Xuan Hai Nguyen Van Hoa
Contingencies and commitments 38 816,930 533,196 10 March 2006

Tran Mong Hung Ly Xuan Hai Nguyen Van Hoa
10 March 2006
Consolidated Statement of Cash Flows

For The Year Ended 31 December 2005
2005 2004 2005 2004

VND million VND million VND million VND million
Cash flows from operating activities Cash flows from investing activities
Net profit before tax 391,550 282,148 Purchase of fixed assets (248,836) (68,867)
Adjustments to reconcile net profit for the year to net cash flows from operating Proceeds on disposal of fixed assets 368 138
activities:
Purchase of debt securities (2,515,952) (2,112,951)
Depreciation and amortisation 25,521 17,874 Proceeds from disposal of debt securities 583,935 1,009,103
Provision for losses on loans and advances 12,201 16,027 Gain on investments in securities 287,705 222,289
Addition/(reversal) of provision for diminution in value of investments 1,405 (4,816) Investments in other entities (79,741) (23,211)
(Gain)/loss on disposal of fixed assets (109) 9 Proceeds from disposal of investment in other entities 10 -
Reclassification of fixed assets to operating expenses - 2,526 Investments in associates (10,068) -
Gain on trading of securities (2,626) (2,535) Dividend received from associates 135 84
Loss on disposal of investments in other entities 5,390 - Purchase of trading securities (444,370) (63,506)
Interest income from securities (287,705) (222,289) Proceeds from sales of trading securities 413,372 95,627
Share of net profit from associates (1,201) (172) Dividend income 30,778 2,065
Dividend income (30,778) (2,065) Net cash flows from investing activities (1,982,664) (939,229)
Cash flow from operating activities before changes
Cash flows from financing activities
in operating assets and liabilities 113,648 86,707
Increase in chartered capital 348,316 -
Increase in compulsory reserves with State Bank of Vietnam (245,418) (367,974)
Dividend paid (70,821) (54,357)
Increase in placements at local and overseas credit institutions (1,872,806) (3,128,428)
Net cash flows from financing activities 277,495 (54,357)
Increase in loans to local credit institutions (120,443) (17,600)
Net increase/(decrease) in cash and cash equivalents 1,468,198 (1,465,200)
Increase in loans and advances to customers (2,700,209) (1,357,947)
Cash and cash equivalents at beginning of the year 1,632,209 3,097,409
Increase in accrued interest income (159,688) (35,407)
Cash and cash equivalents at end of the year 3,100,407 1,632,209
Increase in other assets (26,034) (3,019)
Cash and cash equivalents are made up of:
Increase in borrowing from the State Bank of Vietnam 898,642 48,687
Cash and precious metals 1,532,492 553,659 1,532,492 553,659
Increase in placements and borrowings from local credit institutions 122,770 356,037
Demand deposits the State Bank of Vietnam 215,251 199,002 215,251 199,002
Increase in funds received from Government, international and other institutions 21,478 101,923
Placements with overseas banks 331,921 105,161 331,921 105,161
Increase in deposits from customers 6,944,580 3,780,607
Placements with local credit institutions 1,020,743 774,387
Increase in accrued interest expenses 113,692 34,859
3,100,407 1,632,209
Increase in other liabilities 171,122 109,762
Net cash flows from operating activities
before business income tax 3,261,334 (391,793)
Business income tax paid (84,511) (67,879)
Payment from reserves (3,456) (12,482)
Bad debt collection - 540
Net cash flows from operating activities 3,173,367 (471,614)

10 March 2006
Notes To The Consolidated Financial Statements

For The Year Ended 31 December 2005
I. Business Highlights In 2005, the Group adopted the following Vietnamese Accounting Standards:
VAS 05: Investment property
1.1 Structure of ownership VAS 07: Accounting for investments in associates
Asia Commercial Joint Stock Bank (herein referred to as “the Bank”) is a Vietnamese VAS 08: Financial reporting of interest in joint ventures
jointstock bank registered in the Socialist Republic of Vietnam. VAS 17: Business income taxes
Banking Licence No. 0032/NH-GP was granted to the Bank by the State Bank of VAS 22: Disclosure in the financial statements of Banks and similar Financial Institution
Vietnam (“the SBV”) effective 24 April 1993. The licence is for a period of 50 VAS 23: Events after the balance sheet date
years and stipulates a share capital of VND20,000 million. The Bank’s commercial VAS 25: Consolidated financial statements and accounting for investments in
operations commenced on 4 June 1993. The Bank’s chartered capital as at 31 subsidiaries
December 2005 is VND948,316 million. VAS 26: Related party disclosures
VAS 29: Changes in accounting policies, accounting estimates and errors
1.2 Structure of operations
The Bank’s Head Office is located at No.442 Nguyen Thi Minh Khai Street, District 2.2 Consolidation
3, Ho Chi Minh City. The Bank has 61 branches and transaction offices nation (I) Subsidiaries
wide. The Bank wholly owns two subsidiaries which are ACB Securities Company Subsidiaries are those companies over which the Group has the power to govern
(“ACBS”) under the licence No.06/GP/HDKD dated 29 June 2000 and ACB Assets the financial and operating policies. Subsidiaries are consolidated from the date
Management Company (“ACBA”) under the licence No. 4104000099 dated 11 on which control is transferred to the Group. Inter-company balances, transactions
October 2004. and unrealised gains on transactions between those companies and the Group are
eliminated. Unrealised losses also eliminated unless transaction provides evidence
1.3 Business sector of an impairment of the asset transferred. Accounting policies of subsidiaries have
The principal activities of the Bank are to mobilise short, medium and long-term been changed where necessary to ensure the consistency with the policies adopted
capital in the form of time deposits, demand deposits, certificates of deposit; receive by the Bank.
investment funds; receive capital from local and overseas financial institutions;
grant short, medium and long-term loans; discount commercial paper, bonds and (II) Associates and joint venture
valuable documents; set up partnerships and joint ventures; provide settlement Associates are all entities over which the Group has significant influence but not
services to customers; deal in foreign exchange, gold; provide international control, generally accompanying a shareholding of between 20% and 50% of the
settlements services and provide other banking services. voting rights.
Joint venture is a contractual arrangement whereby the Group and other parties
2. Summary of Accounting Policies
undertake an economic activity which is subject to joint control.
The principal accounting policies adopted for the preparation of these consolidated The Group uses equity method for consolidating its investments in associates and
financial statements are set out below. joint ventures. The Group’s share of its associates’ and joint venture post acquisition
profits or losses is recognised in the consolidated income statement. When the
2.1 Basis of preparation of consolidated financial statements Group’s share of losses in an associate and joint venture equals or exceeds the
The consolidated financial statements have been prepared in millions of Vietnamese carrying amount of its investment in the associate and joint venture, the Group does
dong using the historical cost convention and in accordance with Vietnamese not recognise further losses in its consolidated financial statements, unless it has
Accounting Standards and prevailing regulations applicable to banks and other obligations to pay on behaf of the associate and joint venture.Unrealised gains on
credit institutions operating in SR Vietnam. Accordingly, the consolidated financial transactions between the Group and its associates and joint venture are eliminated
statements are not intended to present the financial position and results of to the extent of the Group’s interest in the associates and joint ventures. Unrealised
operations and cash flows in accordance with jurisdictions other than SR Vietnam. losses are also eliminated unless the transaction provides evidence of an impairment
The accounting principles and practices utilised in SR Vietnam may differ from those of the asset transferred. Accounting policies of associates and joint venture have
generally accepted in countries and jurisdictions other than SR Vietnam. been changed where necessary to ensure consistency with the policies adopted by
the Bank.

For The Year Ended 31 December 2005 (continued)
(III) Investments in other entities 2.5 Foreign currencies

Investments in other entities comprise shareholding of less than 20% in unlisted The consolidated financial statements are prepared in million Vietnamese Dong.
companies. Since fair values for unlisted securities cannot be measured reliably,
these investments are recognised at cost of acquisition. Dividends are recognised In accordance with the Decision No. 522/2000/QD-NHNN2 dated 20 December
in the consolidated income statement when the Group’s right to receive payment 2000 issued by the State Bank of Vietnam and effective starting in 2000, transactions
is established. arising in foreign currencies are translated at rates ruling on the transaction dates.
Monetary assets and liabilities denominated in foreign currencies at the balance
2.3 Investment in securities sheet date are translated at the rates of exchange ruling at the balance sheet date.
(I) Trading securities Foreign exchange differences arising from these transactions are dealt with in the
Trading securities are securities held for trading and is acquired principally for the income statement.
purpose of selling in the short-term or if so designated by the Management.
2.6 Interest income and expenses
Listed trading securities are initially stated at cost of acquisition. Subsequently, The Bank records interest income and expense on an accruals basis in accordance
they are measured at cost less provision. Provision is provided for where there is a with Circular 92/TT-BTC issued on 14 September 2000 by the Ministry of Finance
diminution in value. The accounting treatment of this provision is stated in Circular and Decision 652/2001/QD-NHNN issued on 17 May 2001 by the State Bank of
92/2000/TT-BTC issued by Ministry of Finance on 14 September 2000. Unlisted Vietnam.
securities are stated at cost of acquisition since fair value of these securities cannot
be measured reliably. 2.7 Fees and commissions income
Fees and commission income consists of fees received for settlement services, fees
Gains or losses from disposal of trading securities are recognised in the income arising from guarantees given and other services.
statements and are reported on net basis.
2.8 Loans and advances to customers
(II) Held-to-maturity debt securities Short-term loans are those with a repayment date within one year of the date the
Held-to-maturity debt securities are those securities with fixed or determinable loan was advanced, medium-term loans are those with a final repayment date
payment and fixed maturities that the Group’s management has the positive between one and five years of the date the loan was advanced and long-term loans
intention and ability to hold to maturity. are those with a repayment date of more than five years from the date the loan
was advanced.
(III) Available-for-sale debt securities
Available-for-sale debt securities are those intended to be held for an indefinite Loans and advances to customers are granted in accordance with Decision 1627/QD-
period of time, which may be sold in response to needs for liquidation or changes NHNN dated 31 December 2001, Decision 127/2005/QD-NHNN dated 3 February
in interest rates, exchange rates or equity prices. Available-for-sale securities also 2005 and Decision 783/2005/QD-NHNN dated 31 May 2005. Loans and advances
include securities held by the Group under the repurchase agreement with other to customers are classified in accordance with Decision 493/2005/QD-NHNN dated
financial institutions which to be sold at a certain date in accordance with the 22 April 2005 issued by the State Bank of Vietnam.
repurchase agreement.
Loans and advances to customers are classified into five groups as follows:
Held-to-maturity and available-for-sales debt securities are stated at cost of
acquisition. Post-acquisition interest income of debt securities is recognised in the Group 1: Current
consolidated income statement on an accrual basis. Pre-acquisition interest income - Undue debts which, according to the Bank’s evaluation, could be fully recovered,
of debt securities is deducted against the cost of acquisition. both principal and interest, when they fall due;
- Restructured debts which could be fully recovered, both principal and interest, within
2.4 Fiscal year the rescheduled term of at least one year for medium and long-term debts and three
The Group’s fiscal year is from 1 January to 31 December. months for short-term debts and are evaluated by the Bank as having the capability
to pay in full the principal and interest in due time within the rescheduled term.

Group 2: Special mentioned Provision rates

- Debts which are overdue for less than 90 days; Group 1 - Current 0%
- Restructured debts other than those in Group 1 which are performing within the Group 2 - Special mentioned 5%
rescheduled term. Group 3 - Sub-standard 20%
Group 4 - Doubtful 50%
Group 3: Sub-standard Group 5 - Bad 100%
- Debts which are overdue from 90 days to 180 days; The specific provision is calculated based on net credit exposure of each borrower
- Restructured debts which are overdue for less than 90 days within the rescheduled term. which is equal to loan and advance balance less value of collateral assets. The value
of these assets is market value discounted at predetermined percentage for each
Group 4: Doubtful kind of collateral assets as regulated in the Decision.
- Debts which are overdue from 181 days to 360 days;
- Restructured debts which are overdue from 90 days to 180 days within the In accordance with the Decision, a general provision is also required and should be
rescheduled term. equal to at least 0.75% of total balance of loans and advances to customers and
guarantees and excluding the total balance of loans and advances to customers and
Group 5: Bad guarantees which are classified as bad. This level of the general provision is required
- Debts which are overdue for more than 360 days; to be achieved within 5 years from the effective date of the Decision.
- Restructured debts which are overdue for more than 180 days within the
rescheduled term. The adoption of Decision 493/2005/QD-NHNN became effective in May 2005 and is
- Frozen debts which are awaiting resolution from the Government. applied prospectively with no prior year adjustment for provision for losses on loans
and advances to customers.
Where a customer owes more than one debt to the Bank, and has any of its
debts transferred to the group of debts with higher risk, the Bank is obliged to 2.9 Fixed assets
classify the remaining debts of such customer into groups of debts with higher risk Tangible and intangible fixed assets
corresponding with their level of risk. Fixed assets are stated at historical cost less accumulated depreciation. Historical cost
includes expenditure that is directly attributable to the acquisition of the fixed assets.
Where debts (including undue debts and debts whose repayment period in the Depreciation
term is rearranged to fall within the rescheduled term of debts) in respect of which Fixed assets are depreciated on the straight-line method to write off the cost of the
the Bank has full bases to evaluate that the capability of repayment by the customer assets over their estimated useful lives. The principal annual rates used are:
is weakened, the Bank shall actively decide on classification of those debts into
groups of debts with higher risk corresponding with their level of risk. Annual rates
Buildings 4%
The adoption of Decision 493/2005/QD-NHNN became effective in May 2005 and is Office equipments 33%
applied prospectively with no prior year adjustment for loan classification purposes. Motor vehicles 14%
Other assets 20%
Provision for losses on loans and advances Computer software 12,5%
In accordance with the Decision 493/2005/QD-NHNN, recognition is given to specific
and general provision arising from credit activities. As set out in this Decision, the Gains and losses on disposals are determined by comparing net disposal proceeds
determination of specific provision for credit risk is calculated using set rates applied with the carrying amount and are recognised as income or expense in the income
to each group of debts as follows: statement.

The Bank is unable to separate the values of land use rights and values of construction A deferred tax liability should be recognised for all taxable temporary differences,
in the costs of buildings because these buildings were acquired at the lump sum unless the deferred tax liability arises from the initial recognition of an asset or liability
amounts. Accordingly, the land use rights have been included in costs of buildings in a transaction which at the time of the transaction, affects neither accounting
and depreciated over the estimated useful lives of these buildings. profit nor taxable profit.
2.10 Gold A deferred tax asset shall be recognised for all deductible temporary differences to
Gold is revalued at the end of the year. The differences are transferred to the the extent that it is probable that taxable profit will be available against which the
income statement. deductible temporary difference can be utilised, unless the deferred tax asset arises
from the initial recognition of an asset or liability in a transaction which at the time
2.11 Cash and cash equivalents of the transaction, affects neither accounting profit nor taxable profit.
For the purpose of the consolidated statement of cash flows, cash and cash
equivalents comprise cash and precious metals, demand deposit at the State Bank 2.14 Related parties
of Vietnam, demand and term deposits at banks with an original maturity of three Parties are considered to be related if one party has the ability to control the other
months or less. party or exercise significant influence over the other party in making financial or
operational decisions.
2.12 Derivative financial instruments
In accordance with Decision 479/2004/QD-NHNN of the State Bank of Vietnam 2.15 Provision for severance allowances
dated 29 April 2004 on the issue of new chart of accounts for financial institutions, In accordance with Vietnamese labour laws, employees of the Group are entitled to
derivatives are recorded on balance sheet account at contract value on the date a severance allowance based on their years of service. This will be paid as a lump
which a derivative contract is entered into and revalued subsequently at their sum when the employee leaves the Group. A provision for severance allowances is
fair values. Gains or losses from realisation of derivatives are recognised in the made for the estimated liability for employment termination as a result of services
consolidated income statement. Unrealised gains or losses are not recognised in the rendered by employees up to the balance sheet date. The provision is calculated on
income statement but recorded in balance sheet as the revaluation reserve. the basis of a half month salary for each year of service with the Group, based on
salary level at balance sheet date.
2.13 Taxation
Business income tax expense is recognised in the income statement based on current 2.16 Dividend distribution
income tax and deferred income tax. Dividend distribution to the Group’s shareholders is recognised as a liability in the
Group’s consolidated financial statements in the period in which the dividends are
Current income tax is the amount of business income tax payable or recoverable in approved by the Group’s shareholders.
respect of the current year taxable profit and the current tax rates.
2.17 Fiduciary activities
Deferred income tax is provided in full, using the liability method, on temporary The Group commonly acts as trustees and in other fiduciary capacities that result in
differences arising between the tax bases of assets and liabilities and their carrying the holding or placing of assets on behalf of individuals and other companies. These
amounts in the financial statements. Deferred income tax is determined at the tax assets and income arising thereon are excluded from these consolidated financial
rates that are expected to apply to the financial year when the asset is realised or statements, as they are not assets of the Group.
the liability is settled, based on tax rates that have been enacted or substantively
enacted by the balance sheet date. 2.18 Comparative figures
Notes to the consolidated balance sheet as at 31 December 2004 and to the
consolidated income statement for the year then ended were not audited.

3. Concentrations of Assets And Liabilities In Terms of Cur-

rency And Maturity
3.1. Currency risk
The Bank takes on exposure to effects of fluctuations in the prevailing foreign cur-
rency exchange rates on its financial position and cash flows. The Bank’s Manage-
ment sets limits on the level of exposure by currency and in total for both overnight
and intra-day positions, which are monitored daily.
The table below summarises the Group’s exposure to foreign currency exchange rate
risk at 31 December 2005. Included in the table are the Group’s assets and liabilities
at carrying amounts, categorised by currency. Currency: VND million
31 December 2005 VND USD GOLD EUR JPY AUD CAD Others Total
Assets
Cash and precious metals 158,621 141,088 1,210,036 18,442 1,497 1,728 1,007 73 1,532,492
Balances with the State Bank of Vietnam 724,847 263,937 - - - - - - 988,784
Placements with overseas banks - 185,931 137,100 94,501 2,498 2,678 490 3,955 427,153
Placements with local credit institutions 4,457,283 1,413,385 48,900 5,625 98 176 209 1,069 5,926,745
Loans and advances to local credit institutions 104,842 76,565 - - - - - - 181,407
Trading securities 39,218 - - - - - - - 39,218
Loans and advances to customers 6,008,618 2,282,826 1,089,222 851 - - - - 9,381,517
Less: Provision for losses on loans and advances to customers (20,825) - - - - - - - (20,825)
Investment in debt securities
- available-for-sale 456,515 - - - - - - - 456,515
- held-to-maturity 3,956,383 410,869 - - - - - - 4,367,252
Investment in associates and joint venture 11,713 - - - - - - - 11,713
Investment in other entities 125,003 - - - - - - - 125,003
Tangible fixed assets, construction in progress and purchase
of fixed assets 482,008 - - - - - - - 482,008
Intangible fixed assets 12,470 - - - - - - - 12,470
Other assets 324,984 30,756 5,636 1 - 2 - 33 361,412
Total assets 16,841,680 4,805,357 2,490,894 119,420 4,093 4,584 1,706 5,130 24,272,864
Liabilities
Borrowing from the State Bank of Vietnam 967,312 - - - - - - - 967,312
Deposits and borrowings from local credit institutions 876,010 247,564 - 2 - - - - 1,123,576
Funds received from Government, international and other
institutions 265,428 - - - - - - - 265,428
Deposits from customers 12,639,046 4,786,875 2,455,916 95,899 1,983 4,050 29 1,122 19,984,920
Other liabilities 398,403 203,914 23,650 2,045 339 296 281 1,098 630,026
Business income tax payable 18,396 - - - - - - - 18,396
Total liabilities 15,164,595 5,238,353 2,479,566 97,946 2,322 4,346 310 2,220 22,989,658
Net on-balance sheet position 1,677,085 (432,996) 11,328 21,474 1,771 238 1,396 2,910 1,283,206

3.2. Liquidity risk

The Bank is exposed to daily calls on its available cash resources from overnight
deposits, current accounts, maturing deposits, loan draw downs, guarantees and
from margin and other calls on cash settled derivatives. The Bank does not maintain
cash resources to meet all of these needs as experience shows that a minimum level
of reinvestment of maturing funds can be predicted with a high level of certainty.
The Bank’s Management sets limits on the minimum proportion of maturing funds
available to meet such calls and on the minimum level of inter-bank and other
borrowing facilities that should be in place to cover withdrawals at unexpected
levels of demand.
The table below analysed the Group’s assets and liabilities into relevant maturity
grouping based on the remaining period at the balance sheet date to the contractual
maturity date. Currency: VND million
As at 31 December 2005 Up to 1 month 1-3 months 3-12 months 1-5 years Over 5 years Total
Assets
Cash and precious metals 1,532,492 - - - - 1,532,492
Balances with the State Bank of Vietnam 988,784 - - - - 988,784
Placements with overseas banks 331,921 7,936 79,360 7,936 - 427,153
Placements with local credit institutions 1,458,679 636,034 3,292,032 540,000 - 5,926,745
Loans and advances to local credit institutions - 104,842 76,565 - - 181,407
Trading securities 39,218 - - - - 39,218
Loans and advances to customers 462,472 305,257 4,124,189 2,977,114 1,512,485 9,381,517
Less: Provision for losses on loans and advances to customers (20,825) - - - - (20,825)
Investment in debt securities
- available-for-sale 156,435 - 300,080 - - 456,515
- held-to-maturity 862,785 421,145 309,835 2,663,687 109,800 4,367,252
Investment in associates and joint venture - - - - 11,713 11,713
Investment in other entities - - - - 125,003 125,003
Tangible fixed assets, construction in progress and purchase
of fixed assets - - - - 482,008 482,008
Intangible fixed assets - - - - 12,470 12,470
Other assets 359,620 - - - 1,792 361,412
Total assets 6,171,581 1,475,214 8,182,061 6,188,737 2,255,271 24,272,864
Liabilities
Borrowing from the State Bank of Vietnam 904,312 63,000 - - - 967,312
Deposits and borrowings from local credit institutions 1,123,576 - - - - 1,123,576
Funds received from Government, international and other
institutions 47 24,567 96,702 133,566 10,546 265,428
Deposits from customers 7,348,376 6,746,614 5,435,721 453,341 868 19,984,920
Other liabilities 630,026 - - - - 630,026
Business income tax payable 18,396 - - - - 18,396
Total liabilities 10,024,733 6,834,181 5,532,423 586,907 11,414 22,989,658
Net liquidity gap (3,853,152) (5,358,967) 2,649,638 5,601,830 2,243,857 1,283,206

4. Cash And Precious Metals 7. Placements With Local Credit Institutions

2005 2004 2005 2004
Cash on hand 317.013 317.765 Settlements with local credit institutions 209.387 122.777
Gold 1.210.036 226.210 Placements with local credit institutions 5.717.358 3.723.378
Valuable documents 5.443 9.684 5.926.745 3.846.155
1.532.492 553.659
8. Loans And Advances To Local Credit Institutions
2005 2005
5. Balances With The State Bank of Vietnam (“SBV”) VND million VND million
Short-term loan 181.681 61.238
2005 2004 Less: provision for losses on loans and advances to credit institutions (274) -
VND million VND million 181.407 61.238
Obligatory reserves 773.533 528.115
Demand deposits 215.251 199.002
9. Trading Securities
988.784 727.117 2005 2004
VND million VND million
An obligatory reserve in Vietnamese dong is required to be deposited with the SBV. Equity securities 40.792 7.168
The balance is adjusted once per month and is calculated as 5% of the average Less: provision for diminution in value of investments (1.574) (169)
Vietnamese dong customer deposits with terms within one year and 2% of the 39.218 6.999
average Vietnamese dong customer deposit with terms from above one year to two
years, excluding term deposits with terms greater than two years, in the preceding
30 days. For foreign currency deposits excluding term deposits with terms of more 10. Loans And Advances To Customers
than two years, an obligatory reserve in United States dollars is also required to be Loans and advances to customers were analysed as follows:
deposited, calculated by the same method at the rate of 8% for term deposits with
10.1. Analysis by type
terms within one year and 2% for term deposits with terms from above one year
to two years. 2005 2004
Balances at the SBV also include other deposits for clearing and settlement. Short-term loans 4.851.873 3.387.962
Medium and long-term loans 4.010.283 2.909.626
Syndicated loans 458.705 292.367
6. Placements With Overseas Banks Loans funded by Government, international and
other organisations 60.656 98.466
2005 2004 Frozen loans - 10.016
9.381.517 6.698.437
Settlements with overseas banks 95.232 83.656
Placements with overseas banks 317.235 56.660
Margin accounts
10.2. Analysis by currency
14.686 21.505
2005 2004
427.153 161.821 VND million VND million
Loans and advances denominated in VND and gold 7.097.841 4.513.642
Margin accounts represent the margin deposit amounts for margin trading in gold Loans and advances denominated in foreign currencies 2.283.676 2.184.795
which were held with the Bank’s counterparties (Note 39). 9.381.517 6.698.437

10. Loans And Advances To Customers (continued) 10.7. Provision for losses on loans and advances to customers
10.3. Analysis by industry 2005 2004 Provision for losses on loans and advances to customers as at 31 December
VND million VND million comprises:
Trading 1.990.939 1.162.612 2005 2004
Agriculture and forestry VND million VND million
129.252 145.220
Specific provision 6.891 26.027
Manufacturing and processing 2.119.473 1.989.665
General provision 13.934 -
Construction 318.852 200.805
As at 31 December 20.825 26.027
Individual and community services 3.621.374 2.789.251
Warehousing, transportation and communication 269.963 118.461 (a) Specific provision 2005 2004
Training and education 30.968 2.088 VND million VND million
Estate agents and consultants 190.719 199.823 As at 1 January 26.027 21.765
Hotels and restaurants 68.568 44.433 Charge for the year - 16.027
Financial services 5.135 503 Utilisation during the year (17.129) (11.765)
Others 636.274 45.576 Reverse during the year (2.007) -
9.381.517 6.698.437 As at 31 December 6.891 26.027
10.4. Analysis by group 2005 The specific provision for losses on loans and advances to customers as at 31
VND million December 2005 has been calculated based on net credit exposure of each customer
Current 9.225.725 which is equal to loans and advances balance less value of collateral, using set rate
Special mentioned 127.853 applied to each loan group in accordance with Decision 493/2005/QD-NHNN issued
Substandard 3.458 by the SBV.
Doubtful 4.020 The specific provision for losses on loans and advances to customers as at 31
Bad 20.461 December 2004 was calculated based on the payment arrears status of all loans and
advances to customers classified as overdue, and based on whether the loan and
9.381.517
advance is secured or not in accordance with Decision 488/2000/QD-NHNN issued
by the SBV.
10.5. Analysis by geography 2005 2004 Loans are written off at the discretion of the Bank’s Risk Management Committee
when they consider that all reasonable efforts for recovery of doubtful loans,
Ho Chi Minh City 6.960.194 5.250.452
including legal actions, have been exhausted. In the year ended 31 December 2005,
Mekong Delta 674.852 442.866
loans were written off in accordance with the instructions of the Decision 493/2005/
Central 371.225 160.428 QD-NHNN, while in the year ended 31 December 2004, loans were written off in
Northern 1.375.246 844.691 accordance with the instructions of the Decision 488/2000/QD-NHNN.
9.381.517 6.698.437 (b) General provision
2005
VND million
10.6. Analysis by type of customer 2005 2004
VND million VND million As at 1 January -
State-owned enterprises 1.052.334 623.449 Charge for the year 13.934
Joint-stock, limited companies and private enterprises 3.356.089 2.058.633 As at 31 December 13.934
Joint ventures 118.113 100.324
General provision for losses on loans and advances to customers as at 31 December
100% foreign-owned enterprises 104.032 165.838 2005 has been calculated at a rate of 0.15% of total loans and advances to customers
Co-operatives 3.410 785 and guarantees as at 30 November 2005, excluding the total balance of loans and
Individuals and farmers and others 4.747.539 3.749.408 advances to customers and guarantees which are classified as loss, in accordance
9.381.517 6.698.437 with the Decision 493/2005/QD-NHNN.

11. Investments In Debt Securities 12. Investments In Associates And Joint Venture
11.1. Available-for-sale 2005 2004 2005 2004
Value at cost Value at cost VND million VND million
Name VND million VND million
Investments in associates and joint ventures 11.713 611
Government bonds
Due within one year 456,515 127,287
Due within two years - - 12.1. The Bank’s investments
Due within four years - - The Bank’s investments in associates and joint ventures comprise of the following
Due within five years - -
companies:
31 December 2005 31 December 2004
Due over five years - 30,000
Name Nature of business Details Investment Value at cost Investment Value at cost
456,515 157,287 % VND million % VND million
Associates and joint venture companies
11.2. Held-to-maturity 2005 2004 ACB Real Estate Joint Real estate Capital 10 1,500 - -
Value at cost Value at cost Stock Company contribution
Name VND million VND million ACB Security Services Security services Capital 10 100 - -
Government bonds (*) Joint Stock Company contribution
Due within one year 2,619 181,648 ACB-SJC Saigon Jewellery Capital 10 1,000 - -
Jewellery Joint stock contribution
Due within two years - - Company
- -
Due within four years 134,330 11,614 Pho Noi Infrastructure Develop and operate Capital 10 1,067
Due within five years 1,248,489 52,470 Development Joint Industrial park contribution -
Stock Company
Due over five years - -
Total 3,667
1,385,438 245,732
Certificates of deposit issued by other banks
Due within one year 1,291,145 150,000 12.2. Subsidiaries’ investments
Due within two years 200,000 1,230,000
(a) ACBS’s investment 31 December 2005 31 December 2004
Name Nature of business Details Investment Value at cost Investment Value at cost
1,491,145 1,380,000
% VND million % VND million
Bonds issued by other credit institutions
Associates and joint venture companies
Due within one year 300,000 -
ACB Real Estate Joint Real estate Capital 15 2,250 15 450
Due within two years 100,000 300,000 Stock Company contribution
Due within three years - -
Due within four years 781,509 808,731 (b) ACBA’s investments 31 December 2005 31 December 2004
Due within five years 199,360 - Name Nature of business Details Investment Value at cost Investment Value at cost
Due over five years (**) 109,800 - % VND million % VND million
1,490,669 1,108,731 Associates and joint venture companies
4,367,252 2,734,463 ACB Real Estate Joint Real estate Capital 20 3,000 - -
Stock Company contribution
(*) Included in held-to-maturity debt securities are VND903,745 million of Government bonds Pho Noi Infrastructure Develop and operate Capital 15 1,534 - -
which are currently pledged at the SBV. Development Joint Industrial park contribution
Stock Company
(**) Included in held-to-maturity debts securities as at 31 December 2005 are VND109,800 -
million of convertible bonds issued by Vietcombank, which can be exchanged, at the 4,534
option of the holder, for Vietcombank’s common shares when Vietcombank is privatised.

13. Investments In Other Entities

The Group’s investments in other entities with shareholding of less than 11% comprise of
the following companies:
Name Nature of business 31 December 2005 31 December 2004

Value at cost Value at cost
Saigon Phu Quoc Joint Stock Company Hotel and restaurant 1.901 1.714
Nha Rong Insurance Joint Stock Company Insurance 7.700 7.700
Togi Real Estate Company Real estate 1.000 1.000
Dong Anh Trading and Service Company Trading and services 1.000 1.000
ACB Sport Joint Stock Company Sports 300 300
Saigon Optics Company Eye glasses and optics supplies 1.076 1.076
Saigon Trading and Tourist Company (SPCo) Tourism and trading 638 638
Thuy Ta Joint Stock Company Manufacturing and trading consumer goods 8.681 -
Song Tan Joint Stock Company Industrial Park development 16.000 -
Binh Chanh Commercial, Manufacturing and Service Joint Stock Company Trading aqua-products and manufacturing ice 4.785 -
Banking Training Co., Ltd. Provide training service for banks 310 150
Tan Tao Industrial Park Joint Stock Company Industrial Park development 30.000 2.580
Viet A Commercial Joint Stock Bank Banking 1.430 -
Vietnam Export-Import Commercial Joint Stock Bank (EXIM Bank) Banking 17.759 14.019
Gia Dinh Commercial Joint Stock Bank Banking 500 500
Chuyen Mach Tai Chinh Joint Stock Company Financial service 10.000 10.000
Dai Cat Hoang Long Commercial, Manufacturing and Service Company Manufacturing, service 84 -
Binh Thang Investment and Development Joint Stock Company Industrial park development 1.238 1.238
Duc Hoa III Industrial Park Joint Stock Company Industrial park development 12.272 3.347
Asia Silk Joint Stock Company Silk processing 1.000 -
3/2 Pharmaceutical Joint Stock Company Manufacturing and processing pharmaceutical 3.710 -
Viconship Joint Stock Company Sea transportation 2.527 -
Saigon Tourist Joint Stock Company Tourism 1.092 -
Tan Uyen Joint Stock Company (*) Construction materials - 5.400
Total 125.003 50.662
(*) In 2005, ACBS sold its share of investment of VND5,400 million in Tan Uyen Joint Stock
Company to ACB Real Estate Joint Stock Company (“ACBR”), an associate company at
the price of VND10 million according to the contract dated 20 December 2005 between
ACBS and ACBR .

14. Tangible Fixed Assets 15. Intangible Fixed Assets
Currency: VND Million

Currency: VND Million
Office Motor Other
Buildings equipment vehicles assets TOTAL Computer
Historical cost software
As at 1 January 2005 Historical cost

84,829 38,544 15,890 4,059 143,322
Additions As at 1 January 2005 23,507
88,975 49,874 34,621 3,148 176,618
Disposals Additions 937
- (2,183) (1,776) - (3,959)
Reclassification Disposals -
- (295) - (196) (491)
As at 31 December 2005 As at 31 December 2005 24,444
173,804 85,940 48,735 7,011 315,490
Including:
Not used Accumulated depreciation
79,620 - - 1,984 81,604
Fully depreciated As at 1 January 2005 9,040
- 14,639 4,111 1,644 20,394
Charge for the year 2,934
Accumulated depreciation Disposals -
As at 1 January 2005 As at 31 December 2005 11,974

10,838 18,870 6,673 2,409 38,790
Charge for the year 3,673 12,563 5,743 607 22,586
Disposals Net book value
- (2,183) (1,517) - (3,700)
Reclassification As at 1 January 2005 14,467
- (66) - - (66)
As at 31 December 2005 As at 31 December 2005 12,470
14,511 29,184 10,899 3,016 57,610
Net book value

As at 1 January 2005 73,991 19,674 9,217 1,650 104,532 16. Construction In Progress And Purchase of Fixed Assets
As at 31 December 2005 159,293 56,756 37,836 3,995 257,880
2005 2004
As at 1 January 152,847 99,009
Additions 178,819 55,421
Transfer to fixed assets (89,954) (12)
Other transfers (17,584) (1,571)
As at 31 December 224,128 152,847

17. Other Assets 20. Deposits From Customers

2005 2004 2005 2004
Accrued interest income 265,633 105,945 Current deposits 2,608,012 1,888,668
Receivables from customers 16,574 5,062 Term deposits 402,610 146,149
Advances and internal receivables 29,562 14,176 Deposits for specific purposes 22,516 1,222
Deferred expenses 40,345 25,186 Saving deposits 16,360,429 10,539,071
Other assets 8,369 23,968 Margin deposits 591,353 465,230
Golf membership 929 929 19,984,920 13,040,340
361,412 175,266
31 December 2005 Denominated in VND Denominated in foreign currency and gold Total
18. Borrowings From The State Bank of Vietnam VND million VND million VND million
Current deposits 2.120.950 487,062 2,608,012
2005 2004
VND million VND million Term deposits 377.177 25,493 402,610
Short-term borrowing secured by valuable papers 904,312 48,687 Deposits for specific purposes 21.918 598 22,516
Other borrowing 63,000 19,983 Saving deposits 9.832.932 6,527,497 16,360,429
967,312 68,670 Margin deposits 286.129 305,224 591,353

12.639.046 7,345,874 19,984,920
Short-term borrowing is secured by Treasury notes due within one year and the
Government bonds (Note 11.2).
31 December 2005 Denominated in VND Denominated in foreign currency and gold Total
VND million VND million VND million
Current deposits 1.568.722 319,946 1,888,668
19. Deposits And Borrowings From Local Credit Institutions Term deposits 133.621 12,528 146,149
2005 2004 Deposits for specific pur- 1.152 70 1,222

VND million VND million poses
5.831.548 4,707,523 10,539,071
Demand deposits 13,242 8,411 Saving deposits
219.936 245,294 465,230
Short-term deposits 1,090,334 890,487 Margin deposits
7.754.979 5,285,361 13,040,340
Short-term borrowings 20,000 101,908
1,123,576 1,000,806
Included in margin deposit is VND130,614 million (2004: VND111,205 million) of
gold which is held in custody for customers. This gold is utilised in commercial trans-
actions by the Bank. Interest earned and trading results are accounted for in the
consolidated income statement.

21. Funds received from government, international and 23. Chartered capital
2005 2004
other institutions VND million VND million
Issued and fully paid chartered capital 948,316 481,138
2005 2004
VND million VND million In accordance with Official Letter No.248/NHNN-HCM02 dated 16 February 2005 is-
Funds received from SMEDF 19,835 11,175 sued by the State Bank of Vietnam – Ho Chi Minh City Branch, the Bank’s Chartered
Funds received from RDF 157,241 130,553 capital was increased to VND600,000 million by transferring VND118,862 million of
Funds received from JBIC 88,352 102,222 reserve for supplementary chartered capital to chartered capital.
265,428 243,950 In accordance with Official Letter No.1450/NHNN-HCM02 dated 5 July 2005 issued
by the State Bank of Vietnam – Ho Chi Minh City Branch, the Bank’s Chartered
Trust investment from Small and Medium Enterprises Development Fund (“SMEDF”) capital was increased to VND656,180 million by issuance of new shares.
represents funds received from SMEDF to finance Vietnamese small and medium
In accordance with Official Letter No.1717/NHNN-HCM02 dated 8 August 2005 is-
enterprises. Any loans granted using SMEDF funds must be reviewed and ap-
sued by the State Bank of Vietnam – Ho Chi Minh City Branch, the Bank’s Chartered
proved by the Project Planning and Monitoring Unit of SMEDF. This trust invest-
capital was increased to VND948,316 million by transferring VND292,136 million of
ment bears interest at a fixed rate of 6.28% p.a (for funds received before 2005)
reserve for supplementary chartered capital to chartered capital.
and 6.8% p.a (for funds received in 2005) on the outstanding balance of trust
deposits. Loans granted using these funds bear interest at the same rate as other
commercial loans. 24. Reserves and retained earnings
Currency: VND million
Funds received from the Rural Development Fund (“RDF”) are financed by the
World Bank for a term from one to five years at interest rate from 0.59% to 0.64% Retained Reserve for Financial Other Total
earnings supplementary provision reserves
per month. These funds are lent to borrowers in accordance with the Decision No.
undistributed chartered capital fund
25/QD-NH21 dated 31 January 1997 by the Governor of the SBV.
At 1 January 2005 31,015 119,167 62,678 16,000 228,860
Funds received from JBIC are financed by the Japanese Government via Japan Bank
Consolidated net profit for the year 299,201 - - - 299,201
for International Cooperation at interest rate from 0.44% to 0.51% per month.
Distributions of profit (63,490) 14,661 27,856 20,973 -
These funds are lent to small and medium enterprises with the maximum period
of 10 years for medium and long term loans and 1 year for short term loans in ac- Dividend paid for 2004 (27,104) - - - (27,104)
cordance with the Lending Agreement signed between the State Bank of Vietnam Interim dividend paid for 2005 (43,717) - - - (43,717)
and Asia Commercial Bank. Transfer to chartered capital (Note 23) - (118,862) - - (118,862)
Other movements of reserves 12 (97) 7 (3,410) (3,488)
At 31 December 2005 195,917 14,869 90,541 33,563 334,890
22. Other liabilities
In accordance with Decree No. 166/1999/ND-CP dated 19 November 1999 issued
2005 2004
VND million VND million by the Government, the Bank is required to establish the following reserves:
Accrued interest expenses 233,619 119,927 • Reserve for supplementary chartered capital: 5% of the net profit after business
Remittance in transit payable 57,880 25,444 income tax each year is allocated until the reserve balance reaches 100% of the cur-
Other taxes payable 1,826 1,047 rent capital. The reserve for supplementary chartered capital will be transferred to
Unearned interest income 93,281 111,031 chartered capital upon approval from the SBV.
Other payables 238,310 82,653 • Financial provision fund: 10% of the net profit after the allocation to the above
Provision for severance allowance 5,110 5,110 reserve is allocated until the reserve balance reaches 25% of the current capital.
630,026 345,212 During the year 2005, the State Bank of Vietnam approved for the transfer of
VND118,862 million of the reserve for supplementary chartered capital to chartered
capital.
27. Interest expenses and other charges

Other reserves include fund for basic construction, welfare and bonus fund and 2005 2004
other funds. The allocation to welfare and bonus fund has been approved by the VND million VND million
Board of Directors of the Bank and its subsidiaries. On deposits from customers 797,510 491,476
On borrowings from local credit institutions 42,864 10,377
Others 341 3,590
Dividend 505,443
840,715
Dividends for 2005 at a rate of 12% in cash for all shares issued before June 2005
and at a rate of 6% in cash for all shares issued after June 2005 and at a rate of
16% in form of bonus shares have been declared at the Annual General Meeting 28. Fees and commission income
2005 2004
on 20 January 2006. Accordingly, a cash dividend of VND92,899 million and a divi-
dend of VND151,731 million in form of bonus shares will be paid for the financial
Guarantees 1,854 1,216
year 2005. Interim dividends amounting to VND43,717 million were paid in cash
Settlement services 94,782 80,217
to shareholders during 2005. The remaining amount of cash dividend and bonus
share dividend was reflected in the retained earnings of the consolidated financial Cash services 1,293 1,031
statements for the year ended 31 December 2005 and will be paid subsequently in Other services 14,878 10,312
2006. 112,807 92,776
25. Number of shareholders

29. Fees and commission expenses
2005 2004 2005 2004
Corporate Settlement and cash services 15,595 15,914
State Owned Enterprises 3 3 Other operating expenses 4 -
Joint Stock Companies 4 5 15,599 15,914
Limited Companies 2 2
Foreign Investors 4 3 30. Net gain from dealing in foreign currencies
2005 2004
Individuals VND million VND million
747 Gain from dealing in foreign currencies 16,956 11,025

Local 779
760 Loss from dealing in foreign currencies (2,316) (2,243)
792
Number of shares (VND1,000,000/share) 948,316 481,138 14,640 8,782
The Bank records derivatives in the off balance sheet account at contract value on
the date which a derivative contract is entered into and not revalued subsequently
26. Interest and similar income
at their fair values. Gains or losses from realisation of derivatives are recognised
2005 2004 in the income statement. Unrealised gains or losses are not recognised in the in-
come statement. The Bank’s current accounting treatment for derivative financial
On loans and advances to customers 747,764 522,476
instruments is not in compliance with the Decision 479/2004/QĐ-NHNN because
On placements at, loans and advances to other 317,934 108,096
the State Bank of Vietnam has not issued any detailed guidance on the accounting
credit institutions 287,705 222,289 treatment for derivative financial instruments. The Bank’s Management, however,
On investments 1,577 2,877 believes that the effect of the adjustment, if necessary, as when the Bank applies
Other income from credit activities 1,354,980 855,738 accounting treatment in accordance with the Decision 479/2004/QĐ-NHNN, is in-
significant.

31. Net gain from trading of securities 36. Business income tax (“BIT”)
2005 2004 2005 2004
Proceeds from disposal of trading securities 20,043 95,455 Current income tax 92,349 68,057
Less: Cost of trading securities disposed (17,417) (85,939) Deferred income tax - -
2,626 9,516 92,349 68,057
32. Other operating income Business income tax charge at the rate of 28% for the year is based on the esti-
mated taxable income and is subject to the review and possible adjustment by the
2005 2004 tax authorities.
Gain from revaluation of gold and foreign currencies 27,332 23,245
2005 2004
Other income 805 4,873
28,137 28,118
Net profit before tax 373,065 300,852
Tax (at rate of 28%) 108,216 79,577
33. Salaries and related expenses

Effect of:
2005 2004
VND million VND million Tax on income not subject to tax (8,294) (4,363)
Salaries and allowances 101,161 66,951 Favourable tax treatment on income (8,555) (7,157)
Uniforms and related expenditures 1,697 1,291 Under provision in previous year 982 -
Contributions required by law 3,785 2,293 92,349 68,057
Subsidies 1,895 500
108,538 71,035
Circular No. 18/2002/TT-BTC dated 20 February 2002 issued by the Ministry of Fi-
nance requires taxable income to include interest income and expense recognised
on an accruals basis. The Bank therefore has calculated BIT by including interest
34. Other operating expenses income and expense recognised on an accruals basis.
2005 2004
VND million VND million Following the approval from the Ministry of Planning and Investment in the Official
Tax, duties and fees 2,586 1,443 Letter No. 7105 BKH/DN dated 25 November 1999, the Bank is entitled to a favour-
Deposit insurance premiums 7,735
able treatment on BIT for the new system called The Complete Banking Solution
11,506
(“TCBS”). The Bank is exempted BIT in the first year of using the system and 50%
Loss from revaluation of gold and foreign currencies 2,371 571
reduction on BIT in the following 4 years, applicable for the increased profit resulting
Administrative expenses 140,792 83,315
from the new system. Accordingly, the Bank has applied the favourable tax treat-
157,255 93,064
ment for the 31 December 2001 year ended. This year, the Bank continued applying
BIT rate of 20% with 50% BIT reduction on the increased profit resulted from the
35. Value added tax new system and 28% on the remaining profit. The estimated favourable tax amount
for 2005 is VND8,555 million.
Earned fees and commissions are subject to value added tax at the rate of 10%
The Bank’s tax returns are subject to periodic examination and possible adjustment
under the deduction method, foreign currency and gold operations are subject to
by the Tax Authority.
value added tax at the rate of 10% under the direct method. All other banking
activities of the Bank are exempt from value added tax. The tax assessments for the year 2005 has not yet been finalised by the Tax Author-
ity.

37. Related party transactions and balances In the normal course of business, the Group makes various commitments and in-
curs certain contingent liabilities that are presented in the off balance sheet. The
During the year ended 31 December 2005, the Group had the following transac-
commitments and contingent liabilities include guarantees, letters of credit, forex
tions with related parties:
forward contracts and undue spot contracts. The Group does not anticipate any
2005 2004
VND million VND million significant losses as a result of these transactions.
Compensation of Board of Management 3,005 1,716
39. Margin trading in gold

Interest expenses paid to associates companies 148 20
Other expenses paid to associate companies 19,036 11,822 During the year ended 31 December 2005, the Bank signed a certain number of
Dividend received from associate companies 135 84 margin contracts in gold with counterparties. Margin deposits are required for these
Proceeds from sales of investment to an associate (Note 13) 10 4,000 contracts and are held in the margin trading accounts at the counterparties.
Money received from related parties under fiduciary activities 900 -
Deposits from associates and joint venture 11,595 392
The face values of these contracts provide a basis for comparison with instruments
recognised on the balance sheet, but they do not necessarily indicate the amount
of future cash flows involved or current fair values of the contracts and do not
38. Contingencies and commitments
therefore indicate the Bank’s exposure to credit or market price risks. The contracts
The aggregate amounts of outstanding guarantees, letters of credit and other become favourable (gain) or unfavourable (loss) as a result of fluctuations in market
commitments at the end of the year were: gold prices relative to their terms. The aggregate contractual amount or face value
of these contracts on hand, the extent to which contracts are favourable or unfa-
31 December 2005 Denominated in VND Denominated in Total
VND million foreign currency VND million vourable and, thus the aggregate fair values of these contracts can fluctuate from
VND million time to time.
Letters of credit at sight 2,759 437,450 440,209
Deferred letters of credit - 248,082 248,082
The consolidated financial statements are approved by the Bank’s Management on
Payment guarantees 22,543 28,504 51,047
10 March 2006.
Performance guarantees 19,711 5,223 24,934
Bidding guarantees 8,561 3,940 12,501
Other guarantees 30,708 9,341 40,049
Forex forward selling transaction - 108 108
84,282 732,648 816,930
Denominated in VND Denominated in Total

31 December 2005 VND million foreign currency VND million
VND million
Letters of credit at sight 410,099 410,099 Chairman President Chief Accountant
-
Deferred letters of credit - 34,635 34,635 10 March 2006
Payment guarantees 13,944 2,486 16,430
Performance guarantees 20,794 3,742 24,536
Bidding guarantees 11,643 1,494 13,137
Other guarantees 27,194 7,055 34,249
Forex forward selling transaction - 110 110
73,575 459,621 533,196
Appendix I Appendix II
Balance sheet Income statement
as at 31 december 2005 for the year ended 31 december 2005
2005 2004 2005 2004

Assets Interest and similar income 1,353,541 855,064
Cash and precious metals 1,532,104 553,288 Interest expense and similar changes (841,159) (505,714)
Balances with the State Bank of Vietnam 988,784 727,117 Net interest income 512,382 349,350
Placements with overseas banks 427,153 161,821 Fees and commission income 104,680 88,686
Placements with local credit institutions 5,926,613 3,846,135 Fees and commission expenses (19,760) (18,917)
Loans and advances to local credit institutions 181,407 61,238 Net fee and commission income 84,920 69,769
Trading securities - - Dividend income 29,618 14,996
Loans and advances to customers 9,383,617 6,698,437 Net gain from dealing in foreign currencies 14,640 8,782
Less: Provision losses on loans and advances to customers (20,825) (26,027) Other operating income 28,137 23,302
Investment in debt securities: Other income 72,395 47,080
- available-for-sale 456,515 157,287 Salary and related expenses (105,268) (69,044)
- held-to-maturity 4,347,252 2,714,463 Depreciation and amortisation (25,091) (17,380)
Investments in other entities 215,882 66,428 Other operating expenses (149,680) (90,087)
Tangible fixed assets 256,060 103,283 Total other expenses (280,039) (176,511)
Intangible fixed assets 12,470 14,467 Provision for losses on loans and advances (12,201) (16,027)
Construction in progress and purchase of fixed assets 155,628 152,847 Income on recovery of bad debts 7,614 4,338
Other assets 384,356 185,890 (4,587) (11,689)
Total assets 24,247,016 15,416,674 Profit before tax 385,071 277,999
Liabilities Business income tax (91,954) (66,320)
Borrowing from the State Bank of Vietnam Net profit for the year 293,117 211,679
Deposits and borrowings from local credit institutions 967,312 68,670
Funds received from Government, international and 1,103,576 1,000,806
other institutions 265,428 243,950
Deposits from customers 19,995,787 13,045,974
Other liabilities 624,094 342,734
Income tax payable 18,007 8,856
Total liabilities 22,974,204 14,710,990
Shareholders’ equity 948,316 481,138
Chartered capital 130,348 194,017 Chairman President Chief Accountant
Reserves 194,148 30,529
10 March 2006
Retained earnings 1,272,812 705,684
Total shareholders’ equity 24,247,016 15,416,674
Total shareholders’ equity and liabilities 816,930 533,196
Contingencies and commitments

10 March 2006
Statement of cash flows Appendix III

for the year ended 31 december 2005
2005 2004 2005 2004

Vash flows from operating activities cash flows from investing activities
Net profit before tax 385,071 277,999 Purchase of fixed assets (179,171) (69,480)
Adjustments to reconcile net profit for the year to net cash flows Proceeds on disposal of fixed assets 368 138
from operating activities:
Purchase of securities (2,495,952) (2,092,951)
Depreciation and amortisation 25,091 17,380 Proceeds from disposal of securities 563,935 1,009,103
Provision for losses on loans and advances 12,201 16,027 Gain on investments in securities 286,276 221,733
(Gain)/loss on disposal of fixed assets (109) 9 Payment of investment in other entities (149,454) (4,221)
Reclassification of fixed assets to operating expenses - 2,526 Dividend income 29,618 14,996
Loss on trading of securities - 6,981 Net cash flows from investing activities (1,944,380) (920,682)
Interest income from securities (286,276) (221,733) Cash flows from financing activities
Dividend income (29,618) (14,996) Dividend paid (70,821) (54,357)
Cash flow from operating activities before changes in operating assets and liabili-
Increase in chartered capital 348,316 -
ties 106,360 84,193
Net cash flows from financing activities 277,495 (54,357)
Increase in placements at local and overseas credit institutions (245,418) (367,974)
Net increase/(decrease) in cash and cash equivalent 1,468,069 (1,464,748)
Increase in compulsory reserve at State Bank of Vietnam (1,872,806) (3,128,428)
Cash and cash equivalents at beginning of the year 1,631,818 3,096,566
Increase in loans to local credit institutions (120,443) (17,600)
Cash and cash equivalents at end of the year 3,099,887 1,631,818
Increase in loans and advances to customers (2,702,309) (1,357,947)
Cash and cash equivalents are made up of:
Increase in accrued interest income (159,288) (34,851)
Cash and precious metals 1,532,104 553,288
Increase in other assets (38,918) (22,758)
Demand deposits at the State Bank of Vietnam 215,251 199,002
Increase in borrowing from the State Bank of Vietnam 898,642 48,687
Placements with overseas banks 331,921 105,161
Increase in placements and borrowings from local credit institutions 102,770 356,037
Placements with local credit institutions 1,020,611 774,367
Increase in funds received from Government, international and other institutions 21,478 101,923
3,099,887 1,631,818
Increase in deposits from customers 6,949,813 3,611,202
Increase in accrued interest expenses 113,692 34,859
Increase in other liabilities 167,578 282,685
Net cash flows from operating activities before business income tax
before business income tax 3,221,151 (409,972)
Business income tax paid (82,803) (67,844)
Payment from reserves (3,394) (12,433)
Bad debt collection - 540
net cash flows from operating activities 3,134,954 (489,709)
10 March 2006

Annual Report 05

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Table of Contents

Message from Mr. Chairman of the Board........................................ 2

Message from Mr. Chairman of the Board

Asia Commercial Bank (ACB) grew strongly in 2005 and continues to

Mr. Tran Mong Hung - Chairman

Further, the bank is going to establish subsidiaries to run specific businesses to

Tran Mong Hung

The strong growth in funds mobilization has brought the total

The bank has given a significant emphasis on the

Mr. Ly Xuan Hai - President

Key financial indicators (as % of total assets)

Indicators 2005 2004 2003 2002 2001

President’s Report (continued)

ACB’s liquidity is strictly monitored and controlled through a system of instruments.

ACB has established a centralized system of operational risk management. Each

Asia Commercial Bank constantly drives

Year 2006 Action Plan

1. To enhance the segmentation capacity with focus on target customers

Key Performance Targets

Targets Year 2006

Total assets 33,000

Highlights of the Year

6/Jan/05 Press conference to introduce Vera-ACB Visa Electron Card

24/Jan/05 Shareholders’ Annual General Meeting 2005

30/Jan/05 “2005’s At Dau Spring Trees” program for underprivileged

16/Feb/05 ACB share capital increased to 600 billion VND

08/Mar/05 Inauguration of Hoi An Branch (Quang Nam Province)

16/Apr/05 Press conference to introduce gold options.

10/May/05 Press conference to introduce foreign currency options, factoring,

12/May/05 Press conference to introduce “ Phu Bao Tin”, a combined product

16/May/05 Press conference to announce “For the Children’s World”

17/May/05 Inauguration of Chua Ha Branch (Ha Noi City)

01/Jun/05 “For the Children’s World” television live show

17/Jun/05 Signing ceremony of Technical Assistance Programme between

22/Jun/05 Inauguration 0f ACB Security Service Joint Stock Company

25/Jun/05 Inauguration of Saigon ACB-SJC Jewelry Joint Stock Company

05/Jul/05 Share capital increased to VND 656.18 billion

14/Jul/05 Inauguration of Vung Tau Branch (Ba Ria-Vung Tau Province)

22/Jul/05 Inauguration of Hue Branch

26/Jul/05 Inauguration of Luy Ban Bich Branch (HCMC)

04/Aug/05 Inauguration of new premise of Cho Lon Branch and of Hong

12/Aug/05 Inauguration of Phan Dang Luu Branch (HCMC)

16/Aug/05 Inauguration of Cau Vong Branch (Da Nang City)

23/Aug/05 Share capital increased to 948,32 billion VND

19/Sep/05 Inauguration of Cu Chi Branch (HCMC)

23/Sep/05 Inauguration of Nguyen Tri Phuong Sub-branch (HCMC)

02/Oct/05 Granting houses to underprivileged families of the suburban district

04/Oct/05 Inauguration of Ho Nai Sub-branch (Dong Nai Province)

17/Oct/05 Inauguration of Ta Uyen Sub-branch (HCMC)

21/Oct/05 Inauguration of Van Lang Branch (HCMC)

27/Oct/05 Inauguration of An Suong Branch (HCMC)

11/Nov/05 Inauguration of Tan Thuan Branch (HCMC)

28/Nov/05 Inauguration of new premise of Ngoc Lam Sub-branch (Ha Noi

06/Dec/05 Inauguration of Binh Tay Branch (HCMC)

08/Dec/05 Signing ceremony of cooperation between ACB and HCMC Post

15/Dec/05 Inauguration of To Hieu Sub-branch (Hai Phong City)

19/Dec/05 Inauguration of Tan Binh Branch (HCMC)

21/Dec/05 Introduction of ACB- Saigontourist Premium Travel Card

Awards and Social Recognition

Cup 04/01/2005 Vietnam Industrial “Vietnam Trademark” Award

Certificate of QĐ 1618/QĐ-BTC Ministry of Good compliance with tax policy in 2004

Certificate of 07/2005 Citigroup Outstanding performance in international payment

Certificate of 06/09/2005 HSBC Outstanding performance in international payment

Certificate 2005 HCMC University of Scholarship for underprivileged students with