F88’s credit outlook upgraded following business advantages and improved asset quality

FiinRatings is a leading credit rating agency in Vietnam. In February, S&P Global Ratings, one of the world’s top independent credit rating organisations, announced to acquire a 43.4 per cent stake in FiinRatings.

This is the eighth rating update announcement since FiinRatings published F88’s initial credit rating on October 12, 2021. The upgraded outlook will facilitate F88’s access to more lending partners and reduce its average cost of capital.

FiinRatings’ decision to upgrade the outlook reflects significant improvements in F88’s business activities, funding sources, liquidity, and risk management capacity.

“We assess that F88's funding capacity and liquidity have improved compared to the previous credit rating thanks to the company’s successful diversification of funding sources from domestic and foreign partners alongside the plan to increase charter capital in 2026 and significant improvements in its average cost of capital,” FiinRatings said, adding that the company's diversification of funding sources provides a stable capital foundation for business operations and solid liquidity.

In addition, FiinRatings emphasised F88’s dominant position in the alternative lending market, noting its aggressive expansion plan to reach 1,000 stores by 2026, as a key factor behind the rating upgrade. In 2024, F88 diversified its revenue sources, with insurance revenue growing 11.8 per cent and contributing 9.5 per cent of total revenue. Its debt/equity ratio remained at 1.7x, lower than the median of consumer finance companies at 4.6x, demonstrating a healthy balance between risk and capital efficiency. In the stress test of its liquidity, FiinRatings assumed a 50 per cent decrease in F88’s debt capital mobilisation and no increase in charter capital in 2026, showed that F88 maintained stable liquidity and fulfilled its obligations to related parties.

Regarding profitability, F88 recorded a profit of VND351.5 billion ($13.7 million) alongside a sharp drop in its cost-to-income ratio. Meanwhile, profitability metrics such as NIM, ROE, and ROA improved significantly, outperforming 2023 and currently exceed industry averages. This has helped strengthen investor confidence in F88's business operations.

“According to our projection, F88 will continue to record a high after-tax profit of VND500-700 billion ($19.5-27.3 million) in 2025-2026 thanks to its lending expansion strategy and effective cost management,” FiinRatings commented in the announcement.

To achieve this high performance, F88 has maintained a strict risk management policy that “significantly improves its ability to manage and handle bad debts”. The debt collection rate recovered markedly to 41.7 per cent, compared with 15.6 per cent in 2023.

According to FiinRatings’s announcement, F88 has maintained stable asset quality thanks to significant improvements in customers' repayment capacity, tightened business risk appetite and effective coordination across departments.

“We expect F88 to continue improving its debt collection capabilities and credit losses, as well as maintaining prudent polices on bad debt classification, provisioning and management. The credit cost/average loan balance ratio could be cut to 19 per cent in 2026,” FiinRatings noted.

F88 receives highest ESG score F88 Business JSC received an ESG Score of A from Synesgy, the highest score for compliance with ESG (environmental, social, and governance) principles.

F88 optimises operational costs with KPMG The F88 convenience financial store chain and accounting giant KPMG have signed a deal to optimise the efficiency of F88's 823 nationwide transaction offices.

F88 partners with MB to transform over 850 financial stores into bank offices Military Commercial joint-stock bank (MB) and F88 signed a comprehensive cooperation agreement at MB's headquarters in Hanoi on December 16.