Moody’s put VPBank’s ratings on review for upgrade

On May 12, 2021, the Moody’s announced that it had had put many important ratings of VPBank on review for upgrade.

In particular, Moody’s will review to upgrade the bank’s ratings on long-term foreign-currency deposit (currently B1 with “positive” outlook), baseline credit assessment (currently B1), long-term counterparty risk assessment (currently Ba3), long-term issuer (currently B1 with “positive” outlook) and many others on credit and risk management.

Such announcement was made following VPBank’s positive H1 business results and its agreement with the Japanese SMFG to sell 49% stake of FE Credit that the bank holds.

According to its Q1 financial statement, the bank hit and exceeded most of business targets. As at March 31, 2021, the bank’s PBT reached VND 4 trillion, a 37.6% up y-o-y, of which that of the standalone bank grew by 55.2%. This is also marked the first-time gain in Q1. Moreover, other efficiency indicators continued to be improved and were among the market leading, as ROA and ROE were 3% and 23.5% (as compared to 2.6% and 22% by the end of 2020).

The proceedings from the SMFG deal is said to strengthen its financial ability, thus ensuring sufficient prudent indicators, tapping into new business lines of strategic segments, and investing in some new sectors such as investment banking and wealth management to aid the current segments. Being added by 2021 retained profits, banca deal and share offering/issuance for foreign investors, VPBank’s equity is expected to grow to VND 90 trillion from VND 56 trillion by the end of Q1 2021), and its charter capital will reach nearly VND 75 trillion in 2022. If such plans are successfully carried out, the bank shall be among the ones with highest equity and charter capital.

CAR is expected to increase significantly from 11.9% (as at March 31, 2021), facilitating the bank’s business strategies.

The Annual General Meeting held at the end of April 2021 approved some key business targets for 2021. Total asset is expected to increase by 17.5% to VND 490 tril, customer deposit 19.2% (VND 350 tril), credit to customers 16.6%, and PBT 27.9% (VND 16.6 tril).

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