Moody’s affirms ratings of eight Vietnamese banks

May 04, 2017 | 11:29

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Moody’s Investors Service on May 3 affirmed the long-term and short-term deposit and, where applicable, issuer and senior debt ratings of eight banks in Vietnam (B1 positive), as well as revised the outlooks for the local currency deposit and local and foreign currency issuer ratings of these institutions to positive from stable.

The rating actions follow Moody’s affirmation of Vietnam’s B1 sovereign rating, and change in the outlook for the sovereign’s rating to positive from stable on April 28.

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Bank

Changes in ratings

An Binh Commercial Joint Stock Bank

- BCA and Adjusted BCA at b2, no change

- Affirm foreign currency long-term bank deposit ratings at B2; outlook stable

- Affirm local currency long-term bank deposit ratings at B2; outlook

positive

- Affirm local and foreign currency long-term issuer ratings at B2;

outlook positive

- Long-term CR Assessment at B1(cr), no change

- Affirm local currency and foreign currency short-term deposit ratings at NP

- Affirm local currency and foreign currency short-term issuer ratings at NP

- Short-term CR Assessment at NP(cr), no change

- Outlook changed to Stable(m) from Stable

Asia Commercial Bank

- BCA and Adjusted BCA at b2, no change

- Affirm foreign currency long-term bank deposit ratings at B2; outlook stable

- Affirm local currency long-term bank deposit ratings at B2; outlook

positive

- Affirm local and foreign currency long-term issuer ratings at B2;

outlook positive

- Long-term CR Assessment at B1(cr), no change

- Affirm local currency and foreign currency short-term deposit ratings at NP

- Affirm local currency and foreign currency short-term issuer ratings at NP

- Short-term CR Assessment at NP(cr), no change

- Outlook changed to Stable(m) from Stable

Bank for Foreign Trade of Vietnam

- BCA and Adjusted BCA at b2, remained review for upgrade

- Affirm foreign currency long-term bank deposit ratings at B2; outlook stable

- Affirm local currency long-term bank deposit ratings at B1; outlook

positive

- Affirm local and foreign currency long-term issuer ratings at B1;

outlook positive

- Long-term CR Assessment at B1(cr), remained review for upgrade

- Affirm local currency and foreign currency short-term deposit ratings at NP

- Affirm local currency and foreign currency short-term issuer ratings at NP

- Short-term CR Assessment at NP(cr), no change

- Outlook changed to Stable(m) from Stable

Bank for Investment & Development of Vietnam

- BCA and Adjusted BCA at caa1, no change

- Affirm foreign currency long-term bank deposit ratings at B2; outlook stable

- Affirm local currency long-term bank deposit ratings at B1; outlook

positive

- Affirm local and foreign currency long-term issuer ratings at B1;

outlook positive

- Long-term CR Assessment at B1(cr), no change

- Affirm local currency and foreign currency short-term deposit ratings at NP

- Affirm local currency and foreign currency short-term issuer ratings at NP

- Short-term CR Assessment at NP(cr), no change

- Outlook changed to Stable(m) from Stable

Military Commercial Joint Stock Bank

- BCA and Adjusted BCA at b2, no change

- Affirm foreign currency long-term bank deposit ratings at B2; outlook stable

- Affirm local currency long-term bank deposit ratings at B2; outlook

positive

- Affirm local and foreign currency long-term issuer ratings at B2;

outlook positive

- Long-term CR Assessment at B1(cr), no change

- Affirm local currency and foreign currency short-term deposit ratings at NP

- Affirm local currency and foreign currency short-term issuer ratings at NP

- Short-term CR Assessment at NP(cr), no change

- Outlook changed to Stable(m) from Stable

Vietnam International Bank

- BCA and Adjusted BCA at b2, no change

- Affirm foreign currency long-term bank deposit ratings at B2; outlook stable

- Affirm local currency long-term bank deposit ratings at B2; outlook

positive

- Affirm local and foreign currency long-term issuer ratings at B2;

outlook positive

- Long-term CR Assessment at B1(cr), no change

- Affirm local currency and foreign currency short-term deposit ratings at NP

- Affirm local currency and foreign currency short-term issuer ratings at NP

- Short-term CR Assessment at NP(cr), no change

- Outlook changed to Stable(m) from Stable

Vietnam Bank for Industry and Trade

- BCA and Adjusted BCA at b2, no change

- Affirm foreign currency long-term bank deposit ratings at B2; outlook stable

- Affirm local currency long-term bank deposit ratings at B1; outlook

positive

- Affirm local and foreign currency long-term issuer ratings at B1;

outlook positive

- Affirm foreign currency senior unsecured rating at B1; outlook positive

- Long-term CR Assessment at B1(cr), no change

- Affirm local currency and foreign currency short-term deposit ratings at NP

- Affirm local currency and foreign currency short-term issuer ratings at NP

- Short-term CR Assessment at NP(cr), no change

- Outlook changed to Stable(m) from Stable

Vietnam Technological and Commercial JSB

- BCA and Adjusted BCA at b2, no change

- Affirm foreign currency long-term bank deposit ratings at B2; outlook stable

- Affirm local currency long-term bank deposit ratings at B2; outlook

positive

- Affirm local and foreign currency long-term issuer ratings at B2;

outlook positive

- Long-term CR Assessment at B1(cr), no change

- Affirm local currency and foreign currency short-term deposit ratings at NP

- Affirm local currency and foreign currency short-term issuer ratings at NP

- Short-term CR Assessment at NP(cr), no change

- Outlook changed to Stable(m) from Stable

The baseline credit assessments (BCAs), adjusted BCAs and counterparty risk assessments assigned to the eight banks are unaffected by today’s rating actions.

The credit ratings, assessments and outlooks assigned to the other seven Moody’s-rated banks in Vietnam are unaffected by the outlook change on the Vietnam sovereign rating. These seven unaffected banks are: (1) Ho Chi Minh City Development JSC Bank (B2 stable), (2) Saigon – Hanoi Commercial Joint Stock Bank (B2 stable), (3) Saigon Thuong Tin Commercial Joint-Stock Bank (Sacombank, B3 negative), (4) Tien Phong Commercial Joint Stock Bank (B2 stable), (5) Vietnam Maritime Commercial Joint Stock Bank (B3 positive), (6) Vietnam Prosperity JSC Bank (B3 stable) and (7) Orient Commercial Joint Stock Bank (B2 stable).

Today’s rating actions on the eight Vietnamese banks are driven by Moody’s affirmation on April 28 of Vietnam’s B1 sovereign rating, and the change in the country’s rating outlook to positive from stable on the same date.

Vietnam’s sovereign credit strength is a key input in Moody’s deposit and issuer ratings for Vietnamese banks, because the country’s credit strength affects Moody’s assessment of the government’s capacity to provide support to the banks in times of stress.

Moody’s revision of the outlook on Vietnam’s B1 sovereign rating to positive from stable signals the government’s potentially higher capacity to provide such support to the banks.

The positive outlook on the Vietnamese government rating is based on Moody’s expectations that strong foreign direct investment inflows, fostered by ongoing economic reform, will continue to diversify the economy and enhance economic performance when compared to rating peers; macroeconomic and external stability will be maintained; and the resulting strong growth and stable macroeconomic environment will help stabilise government debt around current levels.

The B2 foreign currency deposit ratings of the eight Vietnamese banks were affirmed with stable outlooks, because these ratings are constrained by the B2 foreign currency deposit ceiling for Vietnam.

If the B1 rating on the Vietnamese government is upgraded, Moody’s will likely upgrade the long-term ratings of the eight Vietnamese banks stated above, by incorporating additional notches of public support uplift.

The long-term ratings of the eight Vietnamese banks could be downgraded if there is a severe deterioration in their credit fundamentals, and Moody’s assesses that government support for the banks has weakened.

By By Hong Anh

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional