Moody’s may upgrade VPBank’s ratings

Thursday, May 20, 2021 17:17

In the first quarter of the year, VPBank achieved positive business results, surpassing the set targets. — Photo courtesy of the bank

Moody’s Investors Service has announced that it is considering upgrading a series of important ratings for VPBank.

Moody’s is considering upgrading the bank’s long-term local and foreign currency deposits and issuer ratings (currently at B1 with a stable outlook), baseline credit assessment (BCA), long-term counterparty risk rating and many other important ratings relating to credit and risk control.

In the first quarter of the year, VPBank achieved positive business results, surpassing its targets.

By the end of March, its total integrated assets exceeded VND436 trillion, up 4.1 per cent from the same period last year. Its consolidated credit growth increased by 2.8 per cent from the corresponding period last year to reach VND332 trillion. The strong credit growth was led by strategic segments of individual customer and small-and-medium enterprises (SMEs) with year-on-year increases of 7 per cent and 11 per cent respectively. Its pre-tax profit reached VND4 trillion in January-March. This was the first time the bank achieved this level in the first quarter of a year.

With revenue diversification, reasonable credit growth, minimising capital costs and optimising operating costs, VPBank's total consolidated pre-tax profit in the first quarter of 2021 has grown strongly at 37.6 per cent over the same period last year. With this result, the bank's performance indicators as of March 31 continued to be improved and ranked at the top of the market, with return on asset (ROA) and return on equity (ROE) reaching 3 per cent and 23.5 per cent respectively.

VPBank also signed an agreement to sell a 49 per cent stake in FE Credit to Japan’s Sumitomo Mitsui Finance Group (SMFG) in a transaction that values the non-bank lender at US$2.8 billion.

The investment would help VPBank enhance its financial capacity and create opportunities to expand new business areas such as investment banking and wealth management.

The bank plans to increase its equity from the current VND56 trillion to VND90 trillion as well as increasing charter capital to VND75 trillion in 2022 thank to the profit from divestment from FE Credit.

If the capital increase plan is successful, VPBank will be among the top Vietnamese banks with the largest equity and chartered capital.

At its general meeting of shareholders held at the end of April, the bank set a total asset target of VND490 trillion, increasing 17.5 per cent, and customer deposits at 19.2 per cent to more than VND350 trillion. Its pre-tax profit is expected to increase by 27.9 per cent to more than VND16.6 trillion. — VNS

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