Singapore, October 10, 2019 -- 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 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 Joint Stock 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 Joint Stock Commercial Bank (Lien Viet),
(7) Military Commercial Joint Stock Bank (Military Bank),
(8) Nam A Commercial Joint Stock Bank (Nam A Bank),
(9) Orient Commercial Joint Stock Bank (OCB),
(10) Saigon - Hanoi Commercial Joint Stock Bank (SHB),
(11) Tien Phong Commercial Joint Stock 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 Joint Stock Bank (MSB),
(16) Vietnam Prosperity Joint Stock Commercial Bank (VP Bank), and
(17) Vietnam Technological and Commercial Joint Stock 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.
Please click on this link http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_204974
for the List of Affected Credit Ratings. This list is an integral
part of this Press Release and identifies each affected issuer.
RATINGS RATIONALE
As explained below, the 17 banks are affected differently by Moody's
review of the sovereign rating.
Vietnam's sovereign credit strength is a key input in Moody's ratings
for Vietnamese banks, because the country's credit strength affects
Moody's assessment of the government's capacity to provide support to
the banks in times of stress.
If Moody's downgrades Vietnam's sovereign rating, such
an action will lead to lower or a lack of government support uplift for
some of the banks, leading to lower credit ratings in some cases.
Moreover, in cases where the banks' BCAs and/or long-term
ratings are already positioned at the same level as the sovereign rating
or ceilings, Moody's will downgrade the banks' BCAs/ratings
to keep the levels in line with the sovereign rating or ceilings.
REVIEW ON PUBLIC SECTOR BANKS
The review on the Ba3 long-term local currency deposit and local
and foreign currency issuer ratings of Vietcombank, VietinBank,
Agribank and BIDV is driven by the fact that these ratings are at the
same Ba3 level as the Government of Vietnam's sovereign rating.
The review on these four banks' B1 foreign currency deposit ratings
is related to the B1 foreign currency deposit ceiling for Vietnam.
A downgrade of the government's rating would likely lead to a corresponding
change in the country's foreign-currency deposit ceiling.
The ba3 BCA of Vietcombank is on review, while the BCAs of VietinBank,
Agribank and BIDV are unaffected by today's rating action because
the BCAs of the latter three banks are lower than ba3.
The long-term CRRs and CRAs of Vietcombank, Agribank and
BIDV are on review, while those of VietinBank are unaffected by
today's action. This difference is because of the different
BCAs and preliminary rating assessments of these banks.
REVIEW ON PRIVATE SECTOR BANKS
The review on the BCAs, long-term ratings, and other
long-term assessments of ACB, Military Bank and Techcombank
is driven by the fact that these banks' ba3 BCAs and Ba3 long-term
local currency deposit and local and foreign currency issuer ratings are
at the same level as the government's sovereign rating. The
B1 foreign currency deposit ratings of these three banks are on review
because of the respective ceiling.
The review on ABB, OCB, TPBank, VIB and VP Bank is only
limited to these banks' B1 foreign currency deposit ratings,
which is also related to the B1 foreign currency deposit ceiling.
The review on HDBank and Lien Viet affects only these banks' long-term
issuer and deposit ratings. The review on MSB, Nam A Bank
and SHB affects only their long-term CRR and CRA.
WHAT COULD CHANGE THE RATING UP
Moody's 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.
WHAT COULD CHANGE THE RATING DOWN
Moody's could downgrade some ratings and assessments of the 17 banks
if Moody's downgrades Vietnam's sovereign rating.
The principal methodology used in these ratings was Banks published in
August 2018. Please see the Rating Methodologies page on www.moodys.com
for a copy of this methodology.
An Binh Commercial Joint Stock Bank (ABB), headquartered in Ho Chi
Minh City, reported total assets of VND91,036 billion ($3.9
billion) as of 30 June 2019.
Asia Commercial Bank (ACB), headquartered in Ho Chi Minh City,
reported total assets of VND350,938 billion ($15.0
billion) as of 30 June 2019.
Ho Chi Minh City Development JSC Bank (HDBank), headquartered in
Ho Chi Minh City, reported total assets of VND210,291 billion
($9.0 billion) as of 30 June 2019.
JSC Bank for Foreign Trade of Vietnam (Vietcombank), headquartered
in Hanoi, reported total assets of VND1,122,655 billion
($48.1 billion) as of 30 June 2019.
JSC Bank for Investment and Development of Vietnam (BIDV), headquartered
in Hanoi, reported total assets of VND1,400,112 billion
($60.0 billion) as of 30 June 2019.
Lien Viet Post Joint Stock Commercial Bank (Lien Viet), headquartered
in Hanoi, reported total assets of VND189,955 billion ($8.1
billion) as of 30 June 2019.
Military Commercial Joint Stock Bank (Military Bank), headquartered
in Hanoi, reported total assets of VND402,264 billion ($17.2
billion) as of 30 June 2019.
Nam A Commercial Joint Stock Bank (Nam A Bank), headquartered in
Ho Chi Minh City, reported total assets of VND83,162 billion
($3.6 billion) as of 30 June 2019.
Orient Commercial Joint Stock Bank (OCB), headquartered in Ho Chi
Minh City, reported total assets of VND108,039 billion ($4.6
billion) as of 30 June 2019.
Saigon - Hanoi Commercial Joint Stock Bank (SHB), headquartered
in Hanoi, reported total assets of VND341,947 billion ($14.7
billion) as of 30 June 2019.
Tien Phong Commercial Joint Stock Bank (TPBank), headquartered in
Hanoi, reported total assets of VND145,716 billion ($6.2
billion) as of 30 June 2019.
Vietnam Bank for Agriculture & Rural Development (Agribank),
headquartered in Hanoi, reported total assets of VND1,282,449
billion ($55.3 billion) as of 31 December 2018.
Vietnam JSC Bank for Industry and Trade (VietinBank), headquartered
in Hanoi, reported total assets of VND1,183,795 billion
($50.7 billion) as of 30 June 2019.
Vietnam International Bank (VIB), headquartered in Hanoi,
reported total assets of VND163,856 billion ($7.0
billion) as of 30 June 2019.
Vietnam Maritime Commercial Joint Stock Bank (MSB), headquartered
in Hanoi, reported total assets of VND144,721 billion ($6.2
billion) as of 30 June 2019.
Vietnam Prosperity Joint Stock Commercial Bank (VP Bank), headquartered
in Hanoi, reported total assets of VND348,732 billion ($14.9
billion) as of 30 June 2019.
Vietnam Technological and Commercial Joint Stock Bank (Techcombank),
headquartered in Hanoi, reported total assets of VND360,662
billion ($15.5 billion) as of 30 June 2019.
REGULATORY DISCLOSURES
For ratings issued on a program, series, category/class of
debt or security this announcement provides certain regulatory disclosures
in relation to each rating of a subsequently issued bond or note of the
same series, category/class of debt, security or pursuant
to a program for which the ratings are derived exclusively from existing
ratings in accordance with Moody's rating practices. For ratings
issued on a support provider, this announcement provides certain
regulatory disclosures in relation to the credit rating action on the
support provider and in relation to each particular credit rating action
for securities that derive their credit ratings from the support provider's
credit rating. For provisional ratings, this announcement
provides certain regulatory disclosures in relation to the provisional
rating assigned, and in relation to a definitive rating that may
be assigned subsequent to the final issuance of the debt, in each
case where the transaction structure and terms have not changed prior
to the assignment of the definitive rating in a manner that would have
affected the rating. For further information please see the ratings
tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
The below contact information is provided for information purposes only.
Please see the ratings tab of the issuer page at www.moodys.com,
for each of the ratings covered, Moody's disclosures on the
lead rating analyst and the Moody's legal entity that has issued
the ratings.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Eugene Tarzimanov
VP - Senior Credit Officer
Financial Institutions Group
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
Graeme Knowd
MD - Banking
Financial Institutions Group
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
Releasing Office:
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
