In early 2010, PetroVietnam Finance Joint Stock Corporation (PVFC) is the first credit institution in Vietnam to float its shares on an overseas stock exchange. PVFC has spared no effort to achieving better business results and internationalizing the PVFC trademark. The Vietnam Potentials Magazine has been granted an exclusive talk with Doctor of Economics Tong Quoc Truong, General Director of PVFC, on this matter.

Dr. Truong said: In 2009, revenue and profit results beat preset targets. The revenue reached VND5,644 billion, equal to 145% of the annual plan approved by the Annual General Meeting 2009 and profit before tax (after setting aside for credit and investment provisions) was VND612 billion, or 153% of the 2009 plan. As of October 31, 2009, PVFC’s total assets valued at VND65,080 billion.

Last year, although the market competition strengthened, PVFC still made uplifting results thanks to its endless efforts. What measures did PVFC adopt to make achieve better-than-expected business results?

Right from the beginning of 2009, PVFC applied measures to restructure its investment portfolios to realize the profit on the one hand and lay the groundwork for investment activities for the following years. Apart from liquidating small-cap and ineffective shares, PVFC also realized the profit by transferring blue-chip shares in the portfolio and picked up stocks of good business results, high dividend payout ratio and high liquidity.

At the same time, PVFC provided interest-subsidy loans under the government policy and sped up capital arrangements to meet credit needs of companies operating inside and outside the oil and gas industry. Moreover, PVFC extensively deployed its products and services, gradually improved the quality of its financial and currency products and services, upgraded the customer care service, created close relationships with customers, etc.

The year 2009 was a challenging period for all companies. As a major financial institution and a member of leading State-owned Vietnam National Oil and Gas Group (PVN), PVFC certainly could not steer clear of difficulties?

In 2009, amid complexly adverse impacts on financial and monetary markets, PVFC always faced up with strong competition from domestic and international financial institutions with preeminent prestige and experience. In addition, PVFC’s managers and employees had less practical experience while its operating network was thinner. For that reason, the corporation met with numerous difficulties and challenges.

Besides, there will be favourable conditions for the development of PVFC?

The huge advantage of PVFC is always the care received and favourable conditions created by PVN as well as the supports received from other member units of the group. Internally, PVFC is a State-owned financial company with the largest chartered capital; thus, its position on the monetary market is very high. Since its inception until now, its charter capital has increased from VND100 billion to VND5,000 billion.

As known, PVFC has clearly determined its development direction with breakthrough activities?

PVFC has clearly determined its development direction with innovative breakthrough activities like speeding up administrative reform in order to maximize the internal forces for the new development era; introducing rational personnel policies with persuasive salary and bonus system to encourage the effort and creativity of all members; restructuring the apparatus to make its operations more efficient, streamlined and scientific; reducing administrative expenses by heightening working productivity (1.5 times compared with 2008). In addition, PVFC put into operation an internal credit ratings system that helps minimise the risk of credit activities.

Is that the secret to success?

The success of PVFC throughout the past 10 years results from the solidarity and the consensus of the Board of Directors, the support of all staff and the right development orientation of PVN. PVFC has attaches much importance to developing human resources, focusing on recruitment, training and treatment policies and building a particularly cultured working environment. In addition, PVFC has built up a professional working environment that stimulates the youth, enthusiasm and devotion of all the staff. Furthermore, mass organizations of the corporation have maximized their abilities to open collective meetings, cultural and sporting exchange programs to build favorable, close-knit and united working environment for all members in the spirit of “All for the common home of PVFC.”

According to the plan, PVFC will officially list on the Singapore Stock Exchange in the second quarter of 2010. Thus, if thing proceeds accordingly, PVFC will be the first credit institution of Vietnam to float its shares on an overseas bourse. How has PVFC so far implemented this plan?

Regarding the Singapore listing of PVFC shares, PVFC is submitting contracts signed with domestic and international law consultants. The corporation has also coordinated with consultants to review the legality of documents, organized a seminar on PVFC international listing with the State Bank of Vietnam, and updated information to the draft prospectus.

Why did PVFC choose the Singapore Stock Exchange for share listing?

Singapore is the center of Asian capital market. Listing shares on the Singapore Stock Exchange will give more favorable conditions for PVFC in particular and PVN in general to attract capital. Singapore is also not far from Vietnam; hence, the introduction of financial services in the region will not be too difficult. On the other hand, the Singapore Stock Exchange will help promote the PVFC image on the international market.

How has PVFC done in order to internationalize its brand?

PVFC has been accelerating the development of its services and effectively implementing the cooperative agreements with Morgan Stanley (MS). The corporation strives to have at least one internationally branded product or service and earn at least 10% of revenues from services. PVFC has collaborated with Morgan Stanley to issue international bonds for PVN, list shares and seek strategic shareholders for oil and gas companies and provide derivative services and other financial consultancies for PVN-owned units.

As the first nonbank credit institution in Vietnam and the manager of billions of US dollars, how has PVFC done to minimize the risk?

PVFC has successfully implemented a modern risk management model and an internal credit ratings system and improved the operating quality of compliance control, independent appraisal and legal affairs; resolved existing shortcomings in credit and investment activities to ensure the rational ratio of bad debts provided by the State Bank of Vietnam; completed the internal credit ratings system; improved the quality of compliance control, independent appraisal and legal affairs. However, the construction of modern risk management system model is now in the initial period. Existing shortcomings in credit and investment activities have not been resolved thoroughly.

What measures will PVFC adopt to realize its business plans in 2010?

In 2010, PVFC will grasp all opportunities to boost production and business, especially when domestic and foreign markets are reviving. Specifically, the corporation targets to attain at least VND5,059 of revenues and at least VND1,032 billion of profit before tax (after deducting for provision funds as stipulated by the Ministry of Finance and the State Bank of Vietnam.) The dividend payout ratio on chartered capital is expected at 12.9%.

In order to achieve its objectives, PVFC as set up the following solutions: strictly control credit operations like ensuring the bad debt limit provided by the State Bank; use up capital sources for short-term demand of the group [PVN], speed up the capital turnover, take all of fees from credit operations, arrange/co-finance oil and gas projects and companies; actively participate in the interbank foreign exchange market to support oil and gas companies; improve the quality of products and services by establishing the thought of professional services for the sales force and recruiting senior personnel; renovate customer care services and promote the development of new products; etc.

Thank you very much!

Hoa Linh (Interviewed)

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