Home Credit gets Moody’s B3 credit rating
Moody’s Investors Service has assigned a B3, or stable, credit rating to Home Credit Vietnam Finance Company Limited, making it the first consumer finance company in Vietnam to get the rating.
Hanoi (VNA) - Moody’s Investors Service has assigned a B3, or stable, credit rating to Home Credit Vietnam Finance Company Limited, making it the first consumer finance company in Vietnam to get the rating, matching that of some banks despite its high-risk business model.
According to Moody’s, a further upward rating is possible if the company
improves its funding and liquidity while maintaining stable asset quality and
capital.
The rating reflects Moody's expectation that Home Credit Vietnam will
maintain stable credit fundamentals over the next 12-18 months.
Home Credit also got a B3 rating for its credit profile, reflecting its
exposure to the high credit risk inherent in Vietnam's rapidly growing
unsecured consumer finance market.
Moreover, its funding and liquidity are vulnerable to disruptions in case of
market and/or credit shocks.
But the rating reflects the company's good market position, high
profitability and good capital buffer.
Home Credit offers small unsecured consumer loans. Its exposure to credit
risk is high, as highlighted by loan loss provisions to average gross loans of
7.7 percent at the end of 2017, and non-performing and written-off loans of
7.8 percent of gross loans as of the same date.
The company posted a return on assets of 9 percent and return on equity of
44 percent at the end of 2017.
Despite high cash dividends and rapid growth, Home Credit's high
profitability will allow the company to maintain a good capital buffer over the
next two years.-VNA