Moody’s assigns first-time rating for SHB Finance

08-Aug-2019 Intellasia | VIR | 6:02 AM Print This Post

Moody’s Investors Services on August 5 assigned a first-time long-term issuer rating of B3 to SHB Finance Co., Ltd, with stable entity-level rating outlook.

The assessment takes into account the company’s (SHB Finance) young market position in the consumer finance industry in Vietnam since August 2018, its strong capitalisation since its establishment in 2017, and improving profitability.

Moody’s assigning a Capital score of Ba1 reflects its expectation of a moderation in SHB Finance’s capitalisation to a more sustainable level in the next few years because of rapid balance sheet expansion and profit upstream to the parent bank.

Moody’s assigning a Profitability score of Ba2 reflects its expectation of a gradual improvement in SHB Finance’s profitability, driven by the bank’s loan portfolio expansion and high net interest margins.

SHB Finance, a wholly-owned subsidiary of Hanoi-based commercial lender Saigon-Hanoi Commercial Joint Stock Bank (SHB), is noted to have made good progress in expanding and diversifying its funding base right in the early phases of business. The total funds raised by early August 2019 reached VND1.3 trillion ($56.52 million).

As of the end of June 2019, the company’s funding was made up 89 per cent of certificates of deposits and 11 per cent of corporate deposits. In late June 2019, SHB Finance was offered a committed, unsecured credit limit of VND680 billion ($29.57 million) by inter-bank partners to provide emergency liquidity support.

Moody’s assumes a high probability of affiliate support by parent company SHB and the ecosystem for SHB Finance given its strategic importance to SHB’s retail strategy.

SHB Finance sees the ratings as the initial fundamental steps for its continuing effort towards a transparent and efficient finance company operating on par with international standards.

As of now, SHB Finance is the first finance company in its first year of business to be rated by an international ratings agency like Moody’s. At the same time, SHB Finance is working with KPMG, a leading global professional services firm, to perform International Financial Reporting Standards (IFRS).

SHB Finance’s audited first-half 2019 financial results outpaced its plan. Accordingly, as of June 30, 2019, the company served more than 156,000 customers, reported VND1.842 trillion ($80.1 million) in cumulative outstanding loans and VND101 billion ($4.39 million) in pre-tax profit.

This is a significant performance for a finance company running for a single year. The rewards are gained from the close control and optimisation of operating costs, enhanced productivity from automation, and technology application.

For more information about SHB Finance, please visit:, Facebook Fanpage: TaichinhtieudungSHB, Hotline: 1900-2198.


Category: Finance, Vietnam

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