The US-based Moody's Investors Service has rated Viet Nam’s Technological and Commercial Joint Stock Bank (Techcombank) stable for its outlook of all the deposit and issuer ratings and positive for the outlook of the bank's financial strength.
Moody’s, a leading provider of independent credit ratings, research and financial information to the capital markets, assigned ratings to Techcombank with “B1” for long- and short-term foreign currency deposits (not prime); “Ba1” for long- and short-term local currency deposits (not prime); “Ba2” for long- and short-term foreign currency Issuer Ratings (not prime); “Ba1” for long- and short-term local currency Issuer Ratings (not prime); and a Bank Financial Strength Rating (BFSR) of “D-“ (D minus).
The bank's BFSR of D- incorporates its strong profitability and liquidity, as well as the benefits of skills transfer from its shareholder HSBC.
The positive outlook on the BFSR reflects the bank's improving profitability and anticipated capital raising. A BFSR of D- equates to a Baseline Risk Assessment of Ba3.
The bank's deposit and issuer ratings benefit from the strong liquidity support mechanisms that exist in Viet Nam's banking sector. This factor lifts Techcombank's local currency ratings to Ba1, which is above its Baseline Risk Assessment of Ba3.
The foreign currency ratings are constrained by Viet Nam's foreign currency ceilings of B1 for deposits and Ba2 for debt.
The outlook is stable in line with the sovereign ceiling ratings.
Moody’s forecast Techcombank will has a rapidly growing franchise among small to medium sized corporate customers, principally in the Ha Noi region.
Its solid growth potential is supported by the strong prospects of Vietnam's economy, which are leading to an increased demand for banking services in the country's expanding private sector.
The bank has made considerable investment in systems and this supports its institutional business, as well as laying the foundations for its expanding retail banking operations.
Since Moody's ratings assess the credit profiles of banks over multi-year periods, these considerations will act as a constraint on the BFSRs of all banks in Viet Nam, including Techcombank.
Techcombank has a total chartered capital of over VND830 billion (about US$52 million) and total assets of VND14 trillion (about US$875 billion), with a network of 65 branches nationwide.