S&P more optimistic about the "health" of Vietnamese banks

Along with upgrading the system-wide risk assessment from group 10 to group 9, the US credit rating agency has also just announced to upgrade the ratings for 3 Vietnamese banks and maintain the same for 2 other banks.

S&P has become more optimistic about Vietnam's banking system and economy.
Illustration: Hoang Ha

In a statement sent on September 26, Standard & Poors said it had upgraded the rating for the systemic risk management index (BICRA) of the Vietnamese banking industry from group 10 (extremely high risk) to group 9 (high risk). With this result, the rating floor for commercial banks operating only in Vietnam was also upgraded from b to b+.

With this result, S&P also reviewed the credit ratings of 5 Vietnamese banks: Vietcombank, Sacombank, Techcombank, Vietinbank and BIDV. Accordingly, Vietcombank, Sacombank and Techcombank were upgraded one notch from B+ to BB- with a stable outlook. The ratings for Vietinbank and BIDV remain at B+.

S&P's Ratings for 5 Vietnamese Banks

According to S&P, the upgrade of BICRA's rating for the entire system as well as the ratings for the three banks mentioned above shows that the company's confidence in the instability of the Vietnamese economy has somewhat decreased after the policies implemented since the end of 2011. Vietnam's tightening of monetary policy has caused credit growth to decrease significantly compared to the average of 28% in the previous 4 years. The tightening of lending to non-production sectors has also caused real estate prices to decrease closer to their real value... The clearest manifestation of the progress is the reduction of inflation from the peak of 23% in August 2011 to 6.5% (yearly) in September 2012.

However, according to S&P, despite the progress made, the risk of instability for Vietnam's economy remains latent, after the authorities showed signs of loosening policies to support growth, along with concerns surrounding commitments to price stabilization. "The process of rebuilding confidence in the banking system and monetary policy has only just begun, so it requires attention and careful management, especially with the problem of bad debt showing signs of increasing," S&P's report stated.

(According to ebank.vnexpress) - HV