Moody’s Investors Service upgrades the long-term local-currency bank deposits ratings and local- and foreign-currency issuer ratings of three commercial banks, including Techcombank. (Photo: VNA) Hanoi (VNA) – Moody’s Investors Service has upgraded thelong-term local-currency bank deposits ratings and local- and foreign-currencyissuer ratings of three banks of Vietnam from B2 to B1.
The banks include Asia Commercial Joint Stock Bank (ACB), MilitaryCommercial Joint Stock Bank (MBBank) and Vietnam Technological and CommercialJoint Stock Bank (Techcombank).
Moody’s also raised the baseline credit assessment (BCA) for these threebanks from b2 to b1.
“For ACB, the upgrade of its BCA reflectsits improved asset quality, following the good progress in the resolution ofits legacy problem assets, including the problem assets related to sixcompanies tied to its former Vice Chairman Nguyen Duc Kien,” Moody’s said.
ACB's problem loans ratio, as adjusted byMoody's, declined to 0.95 percent at the end of 2017 from 2.99 percent at theend of 2016, driven largely by the full write-down of the 1.5 trillion VND(66 million USD) of bonds issued bythe Vietnam Asset Management Company (VAMC), it added.
Similarly, MBBank’s problemloans ratio fell from 4.7 percent in 2016 to 2.9 percent in 2017 mainly due to the full write-off of VAMCbonds for 3.4 trillion VND (149.6 million USD).
Moody's expects ACB and MBBank's assetquality to remain stable over the next 12-18 months on the back of animprovement in the operating environment, which will in turn support therepayment capacity of the bank's borrowers.
As for Techcombank, its BCA upgrade isdriven by improved solvency metrics, namely capital, asset quality andprofitability.
Moody's estimates that the bank's tangiblecommon equity to risk-weighted assets increased to 14.5 percent, from 9 percentin 2016, giving Techcombank the largest core capital buffer among the 16Moody's-rated banks in Vietnam.
At the same time, Moody's has affirmed thelong-term local- and foreign-currency deposit and issuer ratings of VietnamProsperity Joint Stock Commercial Bank (VPBank) at B2, and upgraded the bank'sBCA to b2 from b3.
The upgrade of VPBank's BCA takes intoaccount the bank's high profitability, as well as its improved capital buffer.The BCA also considers VPBank's heightened credit risks from its consumerfinance portfolio, and weak problem loan coverage compared to domestic andglobal peers.-VNA
VNA
