Moody’s acts on eight Vietnamese banks

Moody's Investors Service said it concluded its review of eight Vietnamese banks and took the following actions:

• Upgraded the long-term credit ratings and baseline credit assessments (BCA) of Military Commercial Joint Stock Bank and Saigon-Hanoi Commercial Joint Stock Bank. The outlooks are stable;

• Confirmed/Affirmed the long-term credit ratings of five banks, with their BCAs upgraded by one notch. These five banks are: Vietnam Bank for Industry and Trade, Vietnam International Bank, An Binh Commercial Joint Stock Bank, Asia Commercial Bank and Vietnam Technological and Commercial Joint Stock Bank. The outlooks are stable; and

• Confirmed the B3 long-term credit ratings and caa1 BCA for Saigon Thuong Tin Commercial Joint-Stock Bank. The outlook was revised to negative.

At the same time, the agency affirmed the long-term B1 local currency deposit and issuer ratings of Bank for Investment & Development of Vietnam. Its caa1 BCA was also affirmed. The outlook remains stable.

The review of the eight banks' ratings for upgrade was initiated on Sept. 5, following Moody's change of Vietnam's (B1 stable) banking system macro profile to "weak" from "weak-". The macro profile captures the risks related to the banks' operating and economic environment.

The BCA of JSC Bank for Foreign Trade of Vietnam (Vietcombank) remains on review for upgrade, pending regulatory approvals and finalization of an announced capital increase. The B1/B2 long-term local and foreign currency deposit ratings of that bank are not on review.

Moody’s said the positive rating actions are broadly driven by its view that the more benign operating and economic conditions for banks in Vietnam (B1 stable) have resulted in somewhat lower solvency and liquidity risks for the majority of Moody's-rated banks in the country.

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