Fitch Ratings has revised the Outlook on ANZ Bank (Vietnam) Limited’s (ANZV) Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable, from Positive, and affirmed the rating at ‘BB’.
This follows the 8 April 2020 Outlook revision on Vietnam’s IDR to Stable, from Positive, due to the impact of the escalating global coronavirus pandemic on the domestic economy; for details, see ‘Fitch Revises Outlook on Vietnam to Stable; Affirms at ‘BB”.
Related: Fitch Ratings lowers outlook of Vietnamese banks amid the pandemic
KEY RATING DRIVERS
Except for the below, the key rating drivers for ANZV are those outlined in our previous rating action commentary, published 29 December 2019; see ‘Fitch Assigns ANZ Vietnam First-Time ‘BB’ Rating, Outlook Positive’ at fitchratings.com/site/pr/10106232
The Outlook revision on ANZV’s IDR reflects the Outlook revision on Vietnam’s sovereign rating. ANZV’s Long-Term IDR is driven by our expectation of institutional support from its 100% parent, Australia and New Zealand Banking Group Limited (A+/Negative), but is constrained by Vietnam’s IDR and Country Ceiling of ‘BB’.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade: An upgrade in the sovereign IDR and Country Ceiling would be likely to lead to an upward revision in the bank’s IDRs, assuming that the parent’s ability and propensity to support the bank remain intact.
Regarding the factors that could, individually or collectively, lead to Negative Rating Action/Downgrade, Fitch stated in its press release “We may take negative rating action if we change our assessment of ANZ’s propensity and ability to extend ordinary support in a timely manner. There would have to be significant rating changes at ANZ for there to be any impact on Fitch’s assessment of ANZ’s ability to support ANZV, in light of the large gap between the Long-Term IDRs of ANZ and Vietnam.”