Moody’s Investors Service has just announced completion of a periodic review of ratings of Vietnam International Bank (VIB)
Previously, Moody’s Investors Service has upgraded the baseline credit assessment (BCA) and adjusted BCA of Vietnam International Bank (VIB) to B1 and Counterparty Risk Assessment (CRA) to Ba3 in November 2018.
The upgrade in VIB’s BCA and other banks’ is driven by the higher Macro Profile of Vietnam, progress in writing off legacy problem assets and profitability of the banks, according to a report from Moody’s.
In addition to the upgrade, VIB was recognized by State Bank of Vietnam (SBV) and Vietnam Asset Management Company (VAMC) as one of five banks to re-purchase all bad debts that VIB sold to VAMC. Moody’s and VIB expect profitability for VIB to improve over the next 12-18 months as the burden of credit costs is reduced because the bank has no debt at VAMC.
VIB is also known as one of the only two local banks ready to apply Base II standards. To date, VIB has completed the implementation and waited for SBV’s approval for applying the standards in 2018.
In 2019, VIB has planned its profit before tax of VND3,400 billion, increasing by 24% year-on-year. Total asset is expected to reach VND182,908 billion and total lending balance amounts to VND136,509 billion. Deposit only from tier 1 market is planned to achieve VND127,198 billion. The bank expects to maintain bad debts at below 2%. The bank will increase its charter capital up to VND10,900 billion, and grant bonus shares for shareholders and private issue for investors.
Nearly 10% room of the bank still be available for foreign investors.