Moody’s upgrades VPBank’s credit rating for second year

The Moody’s upgrade took into consideration VPBank’s significant improvement in financial strength, operating efficiency, profitability, as well as growth potential. — Photo courtesy of VPBank

HÀ NỘI — Global credit rating firm Moody’s Investors Services has upgraded Vietnam Prosperity Bank (VPBank)’s baseline credit assessment from B 三 to B 二, and its counterparty risk assessment from B 二 to B 一.

In addition, Moody’s kept VPBank’s rating on long-term foreign-currency deposit unchanged at B 二, while raising its outlook from ‘stable’ to ‘positive’.

This was the second consecutive year Moody’s has assigned a positive assessment for VPBank’s ratings.

The baseline credit assessment reflects the bank’s sound credit profile, as well as its probability of a bank’s standalone failure, absent external support. This rating is based upon macroeconomic, financial and asset quality factors.

The counterparty risk assessment evaluates the risk of a partner engaging with that bank.

The Moody’s upgrade took into consideration VPBank’s significant improvement in financial strength, operating efficiency, profitability, as well as growth potential.

VPBank’s return on assets (ROA) ratio increased from  一. 七 per cent in  二0 一 六 to  二. 三 per cent in  二0 一 七, outperforming many other Vietnamese banks. Its pre-provision operating profit jumped by  五 六 to  五 七 per cent in the past two years.

Moody’s praised the bank’s expansion in business scale and its leading position in the consumer finance market, which has generated high profit margins and contributed to VPBank’s strong earnings.

It reported a record revenue and profit in  二0 一 七, with VNĐ 二 五.0 三 trillion (US$ 一. 一 billion) in total revenue and VNĐ 八. 一 三 trillion in pre-tax profits, up  四 八 per cent and  六 五 per cent against  二0 一 六, respectively.

Also, the lender’s charter capital climbed from VNĐ 九. 一 八 trillion to over VNĐ 一 五. 七 trillion.

The risk-weighted asset (RWA) rose from  八. 五 per cent in  二0 一 六 to  一 二. 一 per cent by the end of  二0 一 七. This improvement is attributed to additional share issues, stock dividends and bonus shares, increasing retained earnings and reducing average loan growth to  二 六 per cent, from  四 一 per cent, in the  二0 一 三- 一 六 period.

VPBank is one of the top five co妹妹ercial joint stock banks, in terms of lending and mobilising deposits. — VNS