Customers at a transaction point of VietinBank. Illustrative image (Photo: VNA) Hanoi (VNA) – Creditratings agency Fitch Ratings hasrecently revealed upgrades for several banks, in thewake of its decision to raise Vietnam's national credit rating to BBwith a long-term outlook of "Stable".
It upgraded the Long-TermForeign-Currency Issuer Default Ratings (IDR) of three major banks, namely VietinBank,Vietcombank, and Agribank, from BB to BB+ with a "Stable" outlook.Additionally, the Military Bank (MB)'s credit rating has also been elevated toBB with a "Stable" outlook.
With improvingbusiness environment, Fitch Ratings also raised the operating environment (OE)scores for the Vietnamese banking system, anticipating that the economy willcontinue to recover and grow robustly over the medium term.
Creditconditions have gradually eased since the beginning of this year, thanks todecisive and appropriate monetary policy actions. At the same time, Fitch anticipatedthe financial efficiency of the Vietnamese banking sector to recover next year,buoyed by rising credit demand and improved net interest margins of commercialbanks.
Thenon-performing loan (NPL) ratio is also expected to improve as the economyrebounds. Fitch forecast a GDP growth of 6.3% for Vietnam in 2024.Additionally, stable asset quality indicators and enhanced profitabilitycontribute to the improved credit ratings for these banks.
Dr. Vo Tri Thanh, member of the NationalFinancial and Monetary Policy Advisory Council, said the upgrade holdssignificance as it enables banks to access international funding sources moreeasily, leading to cost saving through securing capital at more favourableinterest rates.
He saidwith the current credit rating, there is a need for further improvement infinancial health, position and brand to strengthen investor confidence, expandbusiness opportunities, and improve business prospects./.
