MB signs contract to apply Basel analytics methodology, credit risk modelling solution

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Báo Đầu Tư English - 3 month(s) ago 15 readings

On May 9, Military Commercial Joint Stock Bank (MB) and Experian held a ceremony to sign a contract and kick off a project on credit risk modeling for Basel II.

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Under the contract signed, Experian will provide consultancy and knowledge transfer on the most advanced methodologies. This includes developing software to measure credit risk in accordance with Basel II, helping complete the credit risk estimate under the Internal Rating-Based (IRB) method and helping MB put the system into operation in 2019.

“In the development strategy for 2010-2015 as well as 2017-2021, MB has identified the risk management platform as one of two important platforms and has implemented many solutions to continuously improve risk management capacity to meet the business development and compliance requirements of the State Bank of Vietnam,” said Major General Le Cong, vice chairman of MB, at the ceremony.

“The signing ceremony and launch of the project today is an important event to confirm the commitment and effort of MB and Experian to achieve the best goal of the project. MB pledges to create all necessary conditions for effective, quality, safe and timely implementation of the project,” he said.

MB has been chosen by the State Bank of Vietnam as one of the 10 commercial banks to pilot Basel II in the 2014-2017 phase. The bank identified Basel II as well as upgraded standards in banking operations as an indispensable requirement, making banking operations safer and more efficient. MB not only aims to meet the requirements of the SBV but more importantly, enhances internal governance, supports business effectively and sustainably, and brings long-term value for shareholders, partners.

On the project implementation between MB and Experian, Le Trung Kien, deputy director of the Safety Policy Department of the State Bank of Vietnam said, “Military Commercial Joint Stock Bank has been very diligent in carrying out work to implement Basel II in accordance with the roadmap approved by the governor of the SBV. MB implementation of software project credit risk quantification model at this time is perfectly appropriate and this project is an important component in the improvement of risk management capacity, especially credit risk management of the bank.”

“In time, the quantification of credit risk will be required by the SBV in risk management. I believe that the success of this project will bring about breakthroughs in risk management in general and credit risk management in particular,” he said.

“Military Bank is one of the top banks in Vietnam and among the 10 that will be embarking in implementing international best practice standards and Basel II accreditation by 2020. It is an extremely important process to help foster investor confidence and ensure alignment with global standards but it will be a long and demanding journey,” said Nick Boyle, Experian's Southeast Asia executive director at the signing ceremony. Experian is proud to partner with Military Bank in this process, and we will work together to provide a strong and tested risk management methodology in compliance with Basel II accreditation, and which will help drive automated credit behaviour in Vietnam.”

With the determination to successfully launch Basel II, MB has been perfecting the management model by strongly applying international norms and practices to change the business approach towards risk-based business decision making in areas such as operational management, risk management model, risk management policy framework to the measurement tools, and effective risk management.

This credit risk software implementation is one of the most important and strategically important projects for the bank in the period 2017-2021, under the motto “Innovation, Cooperation, Modernisation and Sustainable Development.”

Established in 1994, after nearly 23 years of development and development, MB is one of the leading banks in Vietnam. As of December 31, 2016, MB has a network of over 269 transaction points in key provinces and cities, two foreign branches in Laos and Cambodia, and one representative office in the Russian Federation. MB has affirmed its brand name, prestige in the financial services industry (banking, insurance, securities, fund management, asset management, asset management). It also provides diversified service and product activities on the basis of superior risk management and modern IT infrastructure.

Experian is the world’s leading global information services company. It has 17,000 people operating across 37 countries and is listed on the London Stock Exchange (EXPN) and are a constituent of the FTSE 100 Index.

By Hong Anh

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