Moody’s puts 17 banks of Vietnam under review for downgrade

Moody’s Investors Service has placed some of the ratings of 17 Vietnamese banks on review for downgrade.

Of the 17, Moody’s has also placed on review for downgrade the Baseline Credit Assessments (BCAs) and Adjusted BCAs of four banks, and the long-term Counterparty Risk Assessments (CR Assessments) of nine.

The rating actions on the 17 banks follow Moody’s placement of Vietnam’s Ba3 sovereign rating under review for downgrade on 9 October 2019. For more information on the sovereign credit rating action, please refer to the Government of Vietnam issuer page on http://www.moodys.com.

The review of the banks’ ratings is driven purely by the sovereign rating action, and does not reflect a weakening of the banks’ standalone financial profiles.

The 17 affected banks are

1. An Binh Commercial JS Bank (ABB)
2. Asia Commercial Bank (ACB)
3. Ho Chi Minh City Development JSC Bank (HDBank)
4. JSC Bank for Foreign Trade of Vietnam (Vietcombank)
5. JSC Bank for Investment and Development of Vietnam (BIDV)
6. Lien Viet Post JS Commercial Bank (Lien Viet)
7. Military Commercial JS Bank (Military Bank)
8. Nam A Commercial JS Bank (Nam A Bank)
9. Orient Commercial JS Bank (OCB)
10. Saigon – Hanoi Commercial JS Bank (SHB)
11. Tien Phong Commercial JS Bank (TPBank)
12. Vietnam Bank for Agriculture & Rural Development (Agribank)
13. Vietnam International Bank (VIB)
14. Vietnam JSC Bank for Industry and Trade (VietinBank)
15. Vietnam Maritime Commercial JS Bank (MSB)
16. Vietnam Prosperity JS Commercial Bank (VP Bank), and
17. Vietnam Technological and Commercial JS Bank (Techcombank).

The ratings, assessments and outlook of Saigon Thuong Tin Commercial Joint-Stock Bank (Sacombank, Caa1 stable, caa2) are unaffected by today’s action.

Moody’s could downgrade some ratings and assessments of the 17 banks if Moody’s downgrades Vietnam’s sovereign rating.
The agency will unlikely upgrade the ratings of the 17 banks, because their ratings are on review for downgrade.

Nevertheless, Moody’s will confirm the banks’ ratings with a stable outlook, if Moody’s confirms Vietnam’s sovereign rating at Ba3 with a stable outlook.

Moody’s on Wednesday said the key driver behind its decision to place Vietnam’s rating under review for downgrade is institutional weaknesses, as revealed by delayed payments on an obligation by the government. The review could last three months.