A Beacon in the Heart of Hanoi

Not to mention, a hall of honor featuring numerous medals and certificates, such as: First, Second, and Third Class Labor Medals; Flags and Certificates of Merit from the Prime Minister; Flags and Certificates of Merit from the Vietnam General Confederation of Labor; and those from the Governor of the State Bank of Vietnam (SBV), among many other awards from the Chairman of the Board of Directors and the General Director of BIDV over the years. These prestigious awards have become a source of pride for Branch 1)

Honor and pride! That is why I am not surprised that when mentioning Branch 1, BIDV employees often affectionately and familiarly refer to it as “Branch 1” with no shortage of “flattering terms.” They’re called the “main force,” the “steel fist,” the “pioneer,” and the “vanguard”—all spoken with unhidden admiration.

What has made Branch 1—a branch relatively young compared to many established banks in the market—earn such a coveted title so early on? In the early days of Spring 2017 (nearly 10 years ago), I brought this curious question to Mr. Doan Viet Nam, Director of BIDV Branch 1, who had previously served for many years as General Director of the Lao-Viet Joint Venture Bank and had recently returned from Vientiane to take over the director’s position nine months prior, succeeding his predecessor, Ms. Do Thi Khanh, and we had a meeting.

From the 9th floor of the Vincom Ba Trieu Tower, while waiting for him to process paperwork for the day’s work, I took the opportunity to look down at the street below. In the distance, flower vendors were bringing April into the city; the trumpet-shaped blossoms evoked memories of years past. On this very same land, just a decade ago, Hanoi suddenly came alive with the debut of such a grand, modern, and luxurious shopping center right in the heart of the city. People flocked to the Vincom shopping center to explore and shop. It was certainly no coincidence that BIDV chose such a prime location for Branch 1 as its headquarters. This prime location alone is a significant competitive advantage. It partly explains why, even early in the morning, the branch was already bustling with customers coming and going.

Over a cup of hot tea, Director Doan Viet Nam began our conversation by presenting a hardcover book—large in size, elegantly designed, modern, and striking—titled: “25 Years Since the Establishment of Branch 1 – Pioneering the Way.” He said: “This is the most fundamental, comprehensive, and core essence of a unit recognized as a ‘Labor Hero of the Reform Era’—exactly what the journalist likely wants to explore.” A historical chronicle? Exactly! A historical chronicle marking the quarter-century journey of formation and development of the BIDV Branch. Though this journey may not be long compared to BIDV’s 60-year history, its scale, dynamism, and contributions are truly admirable.

Right on the first few pages is a congratulatory letter from the former Chairman of BIDV’s Board of Directors. The letter includes the following passage: “Looking back at the 1990s, according to regulations of the State Bank of Vietnam, each state-owned commercial bank was permitted to establish only one branch directly serving customers in each province or city.” At that time in Hanoi, BIDV had the Hanoi Branch and the Thang Long Branch, which served as the units responsible for disbursing funds for the Thang Long Bridge, a key infrastructure project. However, in response to the need to strengthen the management of investment, construction, and development activities, and to ensure effective, consistent oversight by the Head Office over major, key projects and clients—namely construction and installation corporations operating across multiple regions; At the same time, there is a need for a core, vanguard force in capital mobilization campaigns, piloting new banking operations, mechanisms, and technologies, thereby gaining practical experience to implement comprehensively and provide guidance across the entire system; Furthermore, a unit is needed to train staff with both theoretical and practical expertise, laying a crucial foundation for expanding the system’s network; And on March 28, 1991, with the approval of the State Bank of Vietnam (SBV), BIDV established the Vietnam Investment and Development Bank Branch—the first and earliest branch among all commercial banks in Vietnam.

Now I understand the reason for the existence of Branch 1 at that time. Was it fate or destiny? Perhaps both, when viewed from the perspective of opportunity and challenge. For those who lived through the 1990s, it is hard to forget the vibrant days of the nation, marked by significant transitions from a centrally planned economy to a market economy, the emergence and rapid development of a multi-sector commodity-based economy; and investment growth indicators... all increasing exponentially. Strengthening and expanding relations with countries around the world also contributed to creating conditions for increasingly open international cooperation. In light of this trend, there was a need for a Vietnamese financial system that operated in a systematic and stable manner, keeping pace with the development of the times.

In the banking sector, in 1990, two Banking Decrees were enacted, marking the beginning of the first banking revolution. For BIDV, the early 1990s presented a monumental challenge regarding its very survival, stemming from the decision to transfer the tasks of disbursing state budget funds and providing loans under the state plan to the General Department of Investment and Development under the Ministry of Finance. However, through its resilience and character, coupled with a visionary outlook, BIDV transformed these challenges into opportunities. Moving beyond its previous role of merely managing and disbursing funds according to state plans, BIDV swiftly and decisively transitioned to operating under the mechanisms of a commercial bank, adopting the operational principle of “borrowing to lend.” This is also considered the most significant turning point in BIDV’s development process, laying a solid foundation and establishing itself as a major pillar of the Vietnamese banking sector.

New circumstances called for a new operational model: a special business unit to carry out special tasks. And Decision No. 76/QĐ-TCCB issued by BIDV’s then-General Director Nguyen Van Doan to establish a “special business unit” named the BIDV Trading Department was recognized as an innovative, bold, and strategic initiative, whose value and significance continue to resonate to this day.

Time flies. The BIDV Trading Department of yesteryear has now marked 26 years, filled with unforgettable memories and milestones. As the 8th Director of Branch 1, and although he has only recently taken over this unit, when it comes to its history, the ups and downs of its journey, and especially the impact of Branch 1 on the entire BIDV system, Mr. Doan Viet Nam seems to have a deep understanding. However, he remains humble, stating: “No one understands Branch 1 better than those ‘in the thick of it’—the ‘living history’ who have ‘tasted the bitter and endured the hardships’ from the very early, rudimentary days to the present.”

Starting with the first leaders—Mr. Vo Xuan Phuc and Mr. Vu Quoc Sau—who, over five years (1991–1996), laid the groundwork and pioneered the way, they meticulously managed and oversaw operations to ensure Branch 1 ran smoothly under a new model, with new clients, and a new organizational structure. The following seven years (1997–2004) were marked by the leadership of Mr. Le Dao Nguyen, Mr. Le Van Loc, and Mr. Nguyen Khac Than, who steered a phase of extraordinary growth, remarkable breakthroughs, and a complete transformation, enabling Branch 1 to truly function as a commercial bank. Then came the era of Ms. Le Thị Kim Khuyên and Ms. Do Thị Khanh, two female leaders who steered the bank through a challenging and difficult integration phase for 10 consecutive years (2005–2015), amid the financial and monetary crisis...

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“Gold is tested by fire; strength is tested by adversity”—this proverb may sound generic, but if examined closely, like a film that alternates between wide shots and close-ups, one can fully grasp what Branch 1 of the Transaction Office has endured, conquered, and achieved. Over 26 years of relentless effort—through sweat, intellect, and dedication—the successive generations of staff at Branch 1 of the Stock Exchange have contributed numerous landmark projects to Hanoi and Vietnam; they have stood shoulder-to-shoulder with businesses, providing effective support to help them stabilize and expand their operations, rise to capture market share, and deliver convenient banking products and services to millions of customers...

26 years—more than a quarter of a century. Looking back from where we stand today, if we were to break it down, we can envision the Branch having traversed three major phases, each marking a significant leap in maturity. The first was the five-year period from 1991 to 1994: this can be viewed as the foundational phase. The Branch was entrusted with a major responsibility: not only continuing to provide capital and extend working capital loans for large-scale projects and construction works, but also serving as a testing ground for commercial banking operations, particularly in the area of capital mobilization. Activities such as: issuing gold-backed promissory notes; savings deposit campaigns for housing construction; issuing purpose-specific savings promissory notes; or terms like: “borrowing to lend,” “diversifying business sectors,” “diversifying customer bases”... can be described as the “foundational lessons” in the operational activities of a commercial bank, helping SGD specifically and BIDV in general gain the experience needed to turn a new page in their history of commercial banking operations.

Second, the 10-year period from 1996 to 2005. This is referred to as the pioneering phase of reform. Having successfully navigated the initial phase with notable achievements across all business metrics—total assets, capital mobilization, credit outstanding, and profits—this was also a period when banks expanded their operations, establishing branches and transaction offices to capture market share. A number of banks at that time also began to make significant strides, such as ACB, Sacombank, Techcombank, and VPBank. It was a period that, in the words of former BIDV Board Member and former Director of Branch 1, Le Dao Nguyen: “Hanoi at that time was likened to an oil field; to drill and extract more oil, we needed more drilling rigs.” Therefore, to enhance competitiveness and expand market share—to “extract more oil”—Branch 1 was selected by BIDV to lead the pilot initiative to spin off and establish the North Hanoi Branch. Following that successful pilot, new branches subsequently emerged one after another in key economic areas such as Ha Thanh, Dong Do, Quang Trung, Hai Ba Trung, Hoan Kiem, Hong Ha... and to this day, these units continue to maintain a stable and sustainable growth trajectory.

Also during this period, a project to modernize BIDV’s banking operations and payment systems was once again piloted by Branch 1. After four weeks of “forgetting to eat and sleep” thanks to the high level of effort and determination from all 200-plus staff members, the project was successfully implemented, and its positive impact can be described as a revolution that comprehensively transformed BIDV’s business operations and management—Mr. Nguyen recalled.

And from 2006 to 2017, this period is regarded as a phase of accelerated growth and expansion on the path toward integration and sustainable development. Building on its own solid foundation, anchored by BIDV’s 60-year history, and with outstanding achievements throughout its 26-year journey of continuous pioneering and innovation, the reputation of Branch 1 has grown increasingly prominent, consistently affirming its leading position within the BIDV system. In 2008, Branch 1 became the first branch of BIDV—and indeed the entire Vietnamese banking system—to be awarded the title of “Labor Hero of the Reform Era”by the President of Vietnam. According to Ms. Do Thi Khanh, who served as Director of Branch 1 for four years before Mr. Nam took over: Branch 1 stands as a clear testament to the visionary leadership and strategic direction of BIDV’s executive board. Based on the realities of a market economy—where competition is driven by capability, experience, innovation, and creativity—Branch 1 has embodied a dynamic, high-quality, and efficient BIDV.

The capital of Branch 1 has been channeled into “timeless” projects, becoming part of history and contributing to the economic landscape of the capital city in particular and the nation as a whole. Not only today, as the economy enters a phase of deep and extensive reform and integration requiring substantial capital to meet robust development needs, but from its very inception—with the responsibility of being the primary unit serving national key projects and the main provider of capital for the economy—Branch 1 has been at the forefront. Through financing projects for state-owned corporations and enterprises in the 1990s and early 1990s; and supporting the nation’s critical economic and technical infrastructure projects in sectors such as transportation, energy, and telecommunications... such as the expansion of the Uong Bi Thermal Power Plant, National Highway 1A, the 500 kV power transmission line, the Nam Con Son oil and gas project, Viettel Group’s overseas telecommunications network expansion project..., as well as the Hoa Binh, Yaly, Son La, and Lai Chau hydropower plants..., the hand of Branch 1 is present almost everywhere across the country, providing support.

Guided by the motto “Our customers’ business success is our bank’s mission,” we do not merely provide what we have but, more importantly, focus on what our customers need. Thanks to fully embracing this operational motto, to date, Branch 1 has built and developed a strong and sustainable customer base with over 2,700 corporate clients and more than 105,000 individual clients. In particular, during the 2011–2015 period, in accordance with directives from the Government, the State Bank of Vietnam, and BIDV Headquarters, Branch 1 supported many businesses facing difficulties due to the impact of economic restructuring, helping them successfully maintain and expand their production operations. Notable examples include Hanaka Group Joint Stock Company, Northern Power Investment and Development Joint Stock Company 2, and others. After weathering such turbulent and challenging times, the bond between the Bank and its customers, as well as the enduring value of the spirit of “sharing opportunities and achieving success through cooperation,” has grown even stronger.

From its humble beginnings stepping into the highly competitive and cutthroat market arena, having been shaped over a quarter-century by its contributions and achievements, today, Branch 1 has become the flagship branch of the BIDV system, consistently leading the system with outstanding achievements in scale, quality, efficiency, labor productivity, and contributing over 10% of the system’s annual profit. By the end of 2016, Branch 1’s total assets, total deposits, and total loans were on par with those of an average-sized, average-performing credit institution in the Vietnamese market, making a significant and decisive contribution to BIDV’s establishment of its position within the Vietnamese joint-stock commercial bank system. And according to the latest updated figures provided by the staff of the Branch’s Financial Planning Department, as of March 31, 2017: Branch 1’s total assets reached nearly 38,000 billion VND (1.5 billion USD), end-of-period deposits exceeded 33,000 billion VND, and outstanding credit balances were nearly 20,000 billion VND. These figures speak volumes; they are truly remarkable!

Not only is it a pioneer in testing new ideas, products, services, technologies, and management models under the leadership of the Executive Board—serving as a prime example of advanced management and business practices and BIDV’s high competitiveness— it is not only a key driver in network development and market share expansion in the increasingly fierce capital market of the ever-booming capital city, but more importantly, Branch 1 has long been regarded as a “university without degrees or certificates” yet it has trained a high-quality workforce and nurtured numerous talents and key executives from this shared home; dozens have gone on to become BIDV leaders, such as: Mr. Le Đào Nguyên, Mr. Le Văn Lộc, Mr. Nguyen Khắc Thân, Mr. Pham Quang Tùng, Mr. Quách Hùng Hiệp, Ms. Le Thị Kim Khuyên, Mr. Le Ngọc Lâm… Dozens have become branch directors, including Mr. Do Huy Hoai, Mr. Le Quang Thanh, Mr. Bui Quang Thai, Ms. Nguyen Thi Quynh Giao, Mr. Vu Hoang Duong, … and hundreds of key staff members serving as Deputy Directors or Department Heads at the headquarters or affiliated units. Operational skills, management expertise, business knowledge, leadership, and management—it seems all of these can be found in this dynamic, youthful, and passionate environment brimming with creativity. An environment where, out of 300 staff members, 70% are young people under the age of 35! As young and energetic as the 26-year-old Branch 1!

Speaking of Branch 1, within the BIDV system, there is no shortage of praise. General Director Phan Duc Tu remarked: After 26 years of operation, Branch 1 has played a significant role in shaping BIDV’s professional, modern, responsible, and community-friendly image. Former Chairman Tran Bac Ha summarized it in eight words: CORE - PIONEER - RESILIENCE - SUCCESS. Ms. Phung Thi Van Anh—a female leader dating back to the tenure of Board Chairman Nguyen Van Doan and CEO Trinh Ngoc Ho—enthusiastically remarked: Branch 1 has always been the most special unit; it is not only a young, creative, and dynamic team but also a united, friendly, and harmonious group. Nor is it merely a unit that works with dedication, seriousness, discipline, and caution; it is also a strong, successive collective that proudly upholds BIDV’s traditions and builds its own distinct legacy.

Among the people you mentioned, thanks to Ms. Van Anh’s introduction, I was fortunate to have a warm conversation with Mr. Le Dao Nguyen. Perhaps because he lived through and steered Branch 1 during such a special period, meeting him—before the cigarette smoke had even faded—triggered a flood of memories, as if an instinct had been awakened; the moment I touched upon them, they poured out...

April 1997 – he recalled: While serving as Head of the Guarantee Department at the Head Office, I was unexpectedly assigned by BIDV’s Leadership Board to the position of Director of Branch 1. This was my first time being entrusted with the direct management of a business unit, and it was also the first time Branch 1 officially had a dedicated Director. At that time, the question “What should I do?” weighed heavily on my mind. The first thing I did was seek guidance from the Directors of other BIDV branches, such as Mr. Hoang Van Khao (Director of the Nam Dinh Branch) and Mr. Nguyen Van Pham (Director of Branch 2). Mr. Khao said: “What matters most is the unity of the team.” Mr. Pham, on the other hand, suggested: “What’s important is having an ‘operational framework.’” These insights were brief and simple, but to this day, I remain grateful to them.

I also vividly recall the guidance from Mr. Nguyen Van Doan and Mr. Trinh Ngoc Ho: The foundation for business operations and decision-making in business is capital. To effectively carry out capital mobilization, we established an additional Savings Fund at 38 Hàng Vôi. Thanks to BIDV’s reputation and the appeal of its capital mobilization products, the small branch at 194 Tran Quang Khải during the 1997–1998 period was always bustling with customers coming to deposit money. Branch 1 had to mobilize staff from the Head Office to staff dozens of deposit desks to meet customer demand. Along with funds mobilized from businesses—especially those with credit relationships with Branch 1, such as Vietnam Electricity Corporation—Branch 1’s capital grew rapidly at a rate of approximately 60–70% per year.

“It seems like everything was going smoothly?” I interrupted his recollection. “Not exactly,” he replied. “Actually, in my first year taking over as director, since I had no business experience whatsoever, Branch 1 suffered a loss of 10 billion dong in 1997.” The situation improved in 1998. And by 1999—at this point, his face lit up—Branch 1 had risen to become BIDV’s top-ranked branch in terms of both scale and operational efficiency, surpassing even the Hanoi and Ho Chi Minh City branches, which were the two long-established branches. The branch’s nickname, “the steel fist,” also originated from that milestone; the branch became a symbol of BIDV’s competitive strength, making significant contributions to the entire system.

Established during BIDV’s transitional phase—shifting from a state-owned to a commercial bank, particularly as we adopted market-based commercial credit mechanisms—we initially faced considerable challenges and uncertainty in implementation. The key question at the time was the issue of customers—one of the critical factors determining the success of business operations. How could we attract and win over customers? How could we enhance service capabilities and increase our ability to provide capital? To solve this problem, in his view, the approach was twofold: focusing on capital mobilization efforts while simultaneously improving credit quality. And to compete and attract customers, his business principle was: low funding costs, high quality, and no risk. To achieve this, in the early days, he implemented a very low lending interest rate policy. The NIM between deposit and lending was reduced to just 0.058%—a figure that could be considered operating at a loss!

Good things speak for themselves; customers flocked to the Branch in increasing numbers, not only because of the attractive interest rate policy, but more importantly, because they found a trustworthy partner in the Branch. There, customers received business consulting, assistance with cash flow management, and capital management, ensuring profitable operations. Notable lending projects during that period included the Yaly Hydropower Plant by EVN, the VNPT Fiber-Optic Project, the Uông Bí Thermal Power Plant Renovation Project by Lilama, the Cienco 18 Project for financing construction equipment for Route 13 in Laos, and the Honda Parts Production Project by Kim Khí Thăng Long. These projects brought high credibility and effectiveness, creating a strong reputation for Branch 1.

3. “Reflecting on the past is to understand the present.” Recalling the past helps us appreciate the value of what we have today. Starting with just 35 people and an organizational structure comprising a credit disbursement department, two savings funds, and a simple accounting and transaction department in those early days—amidst countless uncertainties and challenges as we took our first tentative steps into the market economy— Branch 1 has, step by step, united in purpose, continuously innovated, and broken through to rise as the “pioneer,” the “steel fist,” or the “main force”—as it is often called when people mention BIDV.

On that solid foundation, with so many advantages, being content with what we have is a sure way to fall behind. Returning to the conversation with the current Director, Mr. Doan Viet Nam, he shared: one of the challenges he faced upon taking over this grand, modern “establishment” was how to uphold and enhance its fine traditions, while continuing to honor and shine a light on the “Branch 1” brand today. In 2016, the branch achieved the lowest business plan completion rate in the past three years. Some operational targets fell short of BIDV’s leadership expectations. Moreover, looking at the broader picture, domestic and global conditions were marked by instability and unpredictability. Vietnam is entering a period of deep and robust integration into the global economy. The restructuring of the banking sector is entering a more decisive and thorough phase; accordingly, 2017 is also the first year BIDV implements Phase 2 of its restructuring plan, with no shortage of existing limitations awaiting resolution...

To maintain its leading position within the entire system, according to Director Nam, a comprehensive overhaul is necessary, based on a thorough analysis of the achievements, limitations, and lessons learned from 2016. And, one of the first tasks upon his arrival to take over management was to establish a specific, clear roadmap: what to do in the first year? What for the next 5 years? What about the next 10 years?... He stated: Expanding the customer base and increasing capital are the two core solutions that Branch 1 will focus on implementing in the next five-year plan. To develop the customer base, a shift is needed: gradually reducing reliance on a small number of large clients, and increasing focus on small and medium-sized enterprises (SMEs) and individual customers, leveraging modern information technology. To achieve this, 100% of the branch’s staff must be “people-oriented,” understanding customer psychology based on demographics, personality, gender, and age—thereby identifying the most appropriate “care” strategies.

He enthusiastically shared with me the plans, goals, and solutions to revitalize a Branch that has always been strong and continues to grow stronger, one that has always been a pioneer and continues to lead the way. One of the solutions that impressed me the most was the set of 6 principles regarding cultural values and 7 leadership behaviors that the entire team at Branch 1 developed, based on BIDV’s cultural foundation but with a distinct, unique touch. These principles clearly and specifically outline what employees must do and how leaders should act. It’s an approach to conduct that is equal from both sides, using work quality as the benchmark. Could this very essence be the Branch’s unique cultural trait—an invaluable asset that fuels new momentum and serves as the foundation for Branch 1’s breakthrough today?

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The sun has shifted to this side of the Vincom Tower. The early April sunlight is thin and gentle. The conversation between me and Director Doan Viet Nam seems to have no end, as he is brimming with plans and aspirations for a new chapter of Branch 1 on its journey toward the future, conquering new heights...And before my eyes appears the image of the vibrant red banner that the Chairman of the BIDV Board of Directors presented to Exchange 1 in March 2016 to commemorate the Exchange’s 25th anniversary, featuring a prominent gold letter “ONE”—reaffirming once again the role and position of Exchange 1 as one of the leading pioneers in the BIDV sky.

Bui Sim Sim