Credit rating agency Moody’s has said that the Bank for Foreign Trade of Viet Nam (Vietcombank) is the bank with the best asset quality in Viet Nam.

Moody’s said Vietcombank has improved its profitability thanks to the net interest margin (NIM) and the diversification trend in non-interest income.

The agency maintained the results of Vietcombank’s credit ratings as in its July 2016 review. The key aspects retained include local and foreign currency issuer ratings of B1, long-term local currency deposit ratings of B1, long-term foreign currency deposit ratings of B2, risk basis assessment of B2 and a stable outlook.

Moody’s, however, pointed out that Vietcombank faces the challenge of increasing its capital for growth. The bank’s credit ratings could increase if it successfully implements the plan to increase its charter capital.

Vietcombank is one of the leading banks in Viet Nam with high asset quality and business effectiveness. It has been upgrading and moving towards meeting international standards in its operations. In the past few years, it has been voted as the best bank in Viet Nam, it has featured among the top 500 banks with most value brand names, and is among the top 300 dynamic companies in Asia.

Last year, Vietcombank’s pre-tax profit hit a record high of VND8.2 trillion (US$361.76 million), up 23.4 per cent against 2015.

The lender mobilised nearly VND600 trillion ($26.4 billion) from its depositors, up 19.4 per cent from the previous year, while lending out an estimated VND470 trillion ($20.7 billion), up 18.9 per cent.

In 2016, the bank also managed to reduce its rate of non-performing loans to 1.44 per cent, down four basis points compared to the end of 2015.

Vietcombank’s capital adequacy ratio, which measures its capital to its risk, was 10.29 per cent, higher than the minimum of 9 per cent set by the State Bank of Viet Nam.

On a solid ground in 2016, the lender is targeting a credit growth of 18 per cent in 2017 and is aiming to increase its total assets by 11 per cent in 2017, to keep the bad debt rate below 1.5 per cent and to earn pre-tax profits of VND9.2 trillion ($404.8 million). — VNS