Vietcombank is among the 12 banks having their baseline credit assessments upgraded by Moody's Investors Service (Photo: VNA) Hanoi (VNA) - Moody's Investors Service has upgradedthe baseline credit assessments (BCAs) of 12 Vietnamese banks in its latestreport released on October 30.
The BCA upgrade was driven by the higher Macro Profile, andby these banks' progress in writing off legacy problem assets.
Specifically, the upgrade of BIDV, Vietcombank, andVietinbank largely reflected improvements in asset quality. Their funding andliquidity were stable due to their relatively lower reliance on market funds,whereas capital remains a weakness for all three banks.
The ABB, ACB, Military Bank, OCB, TPBank, VIB and Techcombankwere also named in the 12-bank list thanks to improvements in their standalonecredit strength, particularly progress in writing off legacy problem assets.Moody's expects profitability for these seven banks to improve over the next 12to 18 months as the burden of credit costs reduces.
The upgrade of VP Bank's BCA took into account its highprofitability and strong capitalisation, which offset the high credit risksfrom its consumer finance portfolio.
The upgrade of HDBank's BCA reflected improvements in thebank's capitalisation and profitability. At the same time, this rating actionalso took into account the impending merger between HDBank and Petrolimex GroupCommercial Joint Stock Bank (PGBank, unrated), a small private sector bank inVietnam.
The remaining four banks – Maritime Bank, Sacombank, SHB,and Lien Viet – saw their BCAs unchanged, reflecting Moody's expectation thattheir credit profiles would broadly remain stable over the next 12 – 18 months.The solvency of these banks was modest compared to that of other ratedVietnamese banks, but somewhat balanced by their funding and liquidity.
Moody’s has also taken other positive actions on its rated Vietnamesebanks.
Accordingly, it has upgraded long-term local andforeign-currency issuer ratings and long-term local-currency deposit ratings offive banks. Meanwhile, two banks have earned higher ratings on long-termforeign-currency deposit. The remaining banks have their ratings unchanged.
At the same time, Moody's has upgraded the long-termCounterparty Risk Ratings (CRRs) and Counterparty Risk Assessments (CRAs) ofeight banks and affirmed the same for the remainders.-VNA
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