Fitch assigns ACB, VietinBank, Agribank, Sacombank credit rating of B

29-Jul-2011 Intellasia | Fitch | 6:41 PM Print This Post

The credit rating agency Fitch has recently unveiled a report on 20 July which assigned the credit rating of B for payment capacity of foreign currency long-term bonds to four Vietnam banks including Vietnam Bank for Agriculture and Rural Development (Agribank), Vietnam Joint-Stock Commercial Bank for Industry and Trade (Vietinbank), Asia Commercial Bank (ACB) and Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) with stable outlook.

Long-term foreign currency bond rating for ACB and Sacombank reflects their standalone credit strength and management as well as the unfavourable operational environment.

Fitch has assigned a Support Rating Floor of ‘B’ to Agribank and VietinBank and a Support Rating Floor of ‘No Floor’ to ACB and Sacombank and all the banks’ existing ratings have been affirmed.

The standalone financial profiles of Agribank and Vietinbank are assessed to be relatively weaker partly due to their roles to monetary policies, but their ratings benefit from Fitch’s expectation of state support given their systemic importance to the domestic economy.

The Vietnamese banks’ Viability/Individual Ratings reflect the challenges of the operating environment, including some transparency issues. Downward rating pressure could arise if conditions became more difficult and volatile, in turn hampering the banks’ performance and credit profile.

Under Fitch’s rating system, rating of B indicates existing credit risks, yet within the safety boundary and rating of CCC implies basic credit risks.

Nonetheless, ratings for Vietcombank have been not unveiled in this report due to “irrelevant ratings” as stated by Fitch in a press release.

 


Category: Finance

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