Moody’s maintains VPBank’s credit ratings at “stable”

Moody’s Investors Services, VPBank's credit rating, Moody’s Investors Services, VPBank's credit rating, Banking,
Moody's maintained its credit rating with VPBank, showing that the bank has good financial capacity, with risks less than initial concerns when the disease started. — Photo courtesy of VPBank

Global credit rating firm Moody’s Investors Services has announced it would keep VPBank's credit rating at B1. This decision was made nearly four months after Moody's announced the review on risks, financial strength and development prospects of the bank amid the COVID-19 pandemic, negatively affecting almost all sectors of the economy.

Accordingly, Moody’s confirmed VPBank’s outlook at ‘stable’ including counterparty risk assessment at Ba3 and long-term local currency deposit at B1.

Due to the impact of the COVID-19 pandemic, which led to the global economic recession, in the first half of 2020, Viet Nam's economy recorded a GDP growth of 1.81 per cent - the lowest increase over the past decade. In this context, Moody's maintained its credit rating with VPBank, showing that the bank has good financial capacity, with risks less than initial concerns when the disease broke out.

In confirming VP Bank's B1 Baseline Credit Assessment (BCA), Moody's acknowledges the bank's above-industry average profitability and strong capitalisation. In addition, Moody's stated that the risks that may occur to the consumer finance segment due to impacts of COVID-19 were well controlled by VPBank by optimising the balance sheet, ensuring safety ratios and good liquidity assets. It can be said that the decision to maintain the credit rating with VPBank reflected the efforts of maintaining a solid foundation to ensure the bank’s sustainable and efficient growth.

By the end of the second quarter of the year, VPBank's consolidated operating income reached VND18.8 trillion (US$810.6 million), an increase of 12 per cent over the same period last year. The bank's consolidated before-tax profit was recorded at nearly VND6.6 trillion, equivalent to 64 per cent of the whole year’s plan. In parallel with maintaining revenue and profit growth, risk control activities have been implemented well by the bank.

VPBank's consolidated bad debt ratio by the end of June stood at 2.71 per cent. The parent bank's bad debt ratio dropped to 2.07 per cent. VPBank has also been one of the banks with the highest capital adequacy ratio (CAR) in the market. By the end of June 2020, VPBank's CAR was above 11 per cent based on Basel II standards, much higher than the 8 per cent required by the State Bank of Viet Nam.

The bank’s caution in preventing risks was also reflected in the increase of provision fund expenses. In the first half of this year, VPBank's provision expenses - excluding the provision for Viet Nam Asset Management Company (VAMC) - in 2019 increased by 8.6 per cent and 30.4 per cent at individual banks. High provision expenses showed that VPBank has always been cautious and has sufficient financial resources to prevent risks that may arise when the economy is in an unpredictable stage.

At the same time, VPBank still consolidates its position as one of the banks with the highest return on equity (ROE) and return on assets (ROA). These ratios as at the end of June were 23.5 per cent and 2.7 per cent respectively.

With the success of cautious steps in the right direction with the recognition of international organisations including Moody’s, VPBank continues to consolidate a solid foundation for future development goals. — VNS

News Related

OTHER NEWS

Vietnam Covid-19 Updates (August 4): Ten fresh cases detected, latest treatment regimen announced

On the morning of August 4, the Ministry of Health announced 10 more cases of Covid-19, bringing the total number of people infected with this disease nationwide to 652 cases. Read more »

World breaking news today August 4: Trump asked 45 days for Microsoft to buy TikTok

World breaking news today August 4: Trump urges Microsoft to buy TikTok in its entirety. Meanwhile, Spain's former King Juan Carlos, under investigation for corruption, said he was quitting the country, Typhoon Hagupit in China and... Read more »

Footwear exports in seven months fails to break US$10 billion mark

The opening seven months of the year saw leather and footwear exports only reach turnover of US$9.53 billion, therefore dropping out of the list of top ten export items exceeding US$10 billion which... Read more »

Miserable grabbiker carried 8-month-old son along his work under baking heat of HCMC

Making both ends meet while the old mother still has to sell lottery tickets to earn their living, Mr. Hieu - a GrabBike driver - takes his infant son along with each ride... Read more »

Footwear exports over seven-month period fails to break US$10 billion mark

The opening seven months of the year saw leather and footwear exports only reach turnover of US$9.53 billion, therefore dropping out of the list of top ten export items exceeding US$10 billion which... Read more »

Over 70,600 Hanoians returnees from Da Nang test negative for COVID-19

Hanoi has managed to test 70,689 residents who recently returned from Da Nang by using quick testing methods and PCR diagnostics, with all the tests coming back negative, said Nguyen Khac Hien, director... Read more »

‘One-trillion-dong profit club’ led by Vinhomes JSC

The Vinhomes Ocean Park, a project developed by real estate firm Vinhomes JSC. — Photo vinhomes.vn Twenty-five companies have entered the “one-trillion-dong profit club” for January-June, despite the economy being ravaged by the... Read more »

One more Covid-19 patient dies in Vietnam

A 62-year-old woman with Covid-19 in Da Nang has been confirmed dead Tuesday, becoming the seventh fatality of the pandemic in Vietnam. Read more »

Flood maroons many places in Northern region, leaving two dead

Flood maroons many places in Northern region, leaving two dead Read more »

Seventh COVID-19 fatality recorded in Vietnam

A 62-year-old COVID-19 female patient in central Da Nang city died of serious underlying health conditions and the novel coronavirus (COVID-19), taking Vietnam’s death toll to seven, the Ministry of Health reported on... Read more »