37920 - TPB Quasi Equity

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Summary of Investment Information

Project Number

37920

Company Name

TIEN PHONG COMMERCIAL JOINT STOCK BANK

Date SPI Disclosed

Apr 25, 2016

Country

Viet Nam

Region

East Asia and the Pacific

Projected Board Date

Apr 29, 2016

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Jun 11, 2022

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : May 12, 2016
Signed : May 23, 2016
Invested : Aug 19, 2016

Sector

Commercial Banking - General

Project Description

The proposed project involves an IFC investment in dividend preference shares of Tien Phong Commercial Joint Stock Bank (“TPBank” or the “Bank”). TPBank is a fast growing mid-tier commercial bank, strategically aiming to become a leading digital bank of Vietnam. As at 31 December 2015, the Bank had a total assets of US$3.5 billion equivalent and serving over 1 million customers. IFC’s investment will allow the Bank to capitalize on new business opportunities and implement its growth strategy.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	18.35

Development Impact

- By providing long term funding to a successfully restructured bank, IFC is playing its counter-cyclical role, helping restore confidence in the Vietnam banking system and thus contributing to the recovery of the sector.
- By supporting a young bank which strategically positions itself as the leading digital bank of Vietnam, the Project helps promote innovation and inclusion, which ultimately increase access to finance to MSMEs.

- IFC''s stamp of approval, as an equity investor and IFC''s knowledge in best practices, would help TPBank continue improving the institution perception within the local and international markets, thus, supporting the Bank in reaching international and local capital markets for future funding, and possible future IPO.
- Help diversify its funding structure and shareholder structure when conversion takes place.
- Enhance the Bank''s environment and social risk management.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
CORE - E and S Management Systems (Y/N)	Compliance/Enhancement		Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

This project has been classified as FI-2 according to IFC's Environmental and Social Sustainability Policy. TP bank provides financial services mainly to SMEs, micro lenders and limited number of corporate clients operating predominantly in medium risk sectors but the bank has also very limited exposures to higher risk sectors such as mining, gas, and large construction business. The project is considered to have limited adverse E&S risks and impacts which are largely reversible and can be managed through mitigation measures. The Applicable Performance Requirements for this project are the IFC Exclusion List, the applicable National Laws and Regulations of Vietnam and in case of project and long term corporate finance the Performance Standards.

The main E&S risks and impacts relate to the bank's ability to identify and manage the risks associated with the activities of the portfolio companies supported in line with IFC's policy requirements. TP Bank does not yet have a specific E&S policy or procedure in place to evaluate and address E&S risks which are therefore not part of the loan review and no E&S due diligence is undertaken. The client does not have a designated department or staff responsible for E&S Risk Management. The bank will be required to develop an ESMS and designate E&S staff prior to IFC commitment to ensure adequate screening and management of E&S issues. The bank was found to be largely in compliance with the PS2 requirements

Task Title & Description	Status	Comments	Completion Date
Nominate officers	Completed	yes	06/01/2016
Formalize procedures	Completed	Yes	07/31/2016
Staff Training	Completed	Yes	11/08/2016
Other1 Hire an external consultant - on call	Completed	Yes	07/31/2016
Other2 E&S staff training	Completed	Yes	11/08/2016
Other3 ESMS implementation	Completed	Yes	01/01/2017

Contacts

For Inquiries About the Project, Contact

Name: Hanh Nam NGUYEN
Title: Principal Investment Officer, Hub Leader FIG Vietnam, Lao, Cambodia, Thailand and Myanmar
International Finance Corporation
Address: 3rd floor, 63 Ly Thai To, Hoan Kiem, Hanoi, Vietnam.
Tel: +84 4 3934 2282
Fax: +84 4 3934 2289
Email: mailto:Nnam@ifc.org
Website: http://www.ifc.org

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IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
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Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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