HÀ NỘI — FiinRatings has upgraded F88’s credit rating outlook from 'Stable' to 'Favourable', citing significant improvements in asset quality and the company’s strengthened leadership position in the alternative lending market.

FiinRatings, a leading credit rating agency in Việt Nam, made the announcement just weeks after S&P Global Ratings - one of the world’s top independent credit rating organisations - acquired a 43.6 per cent stake in the company this past February.

This marks FiinRatings’ eighth update on F88 since its initial credit rating report on October 12, 2021. The upgraded outlook is expected to help F88 attract more lending partners and reduce its cost of capital, further supporting its expansion.

According to FiinRatings, the decision to improve F88’s outlook reflects notable progress in business operations, capital management, liquidity and risk control.

“We assess that F88’s capital and liquidity have improved compared to the previous rating, thanks to its continued success in diversifying funding sources from both domestic and international partners. The company’s plan to increase charter capital in 2026, along with a significant reduction in its average cost of capital, further strengthens its financial foundation,” FiinRatings stated in its report.

The agency also highlighted that F88’s ability to secure diverse capital sources ensures stable liquidity and a strong financial foundation to support its growth.

FiinRatings emphasised F88’s dominant position in the alternative lending industry, noting its aggressive expansion plan to reach 1,000 stores by 2026, as a key factor behind the rating upgrade.

In 2024, F88 recorded loan balance growth of 22.7 per cent, significantly outperforming the consumer finance industry average of 3.84 per cent. The company also made strides in revenue diversification, with insurance services revenue growing 11.8 per cent, now contributing 9.5 per cent of total revenue.

Financially, F88 remains well-positioned compared to industry peers.

The company’s Debt-to-Equity (D/E) ratio stood at 1.7, notably lower than the consumer finance industry median of 4.6, showcasing a healthy balance between risk and capital efficiency.

A liquidity stress test, which simulated a 50 per cent drop in loan mobilisation and no charter capital increase in 2026, showed that F88 would still maintain stable liquidity and meet all financial obligations.

F88 reported a net profit of VNĐ351.3 billion in 2024, alongside a sharp decline in Cost to Income Ratio (CIR). Key financial indicators, including Net Interest Margin (NIM), Return on Equity (ROE), and Return on Assets (ROA), have all improved beyond 2023 levels and are now above industry averages.

“We project that F88 will continue to achieve strong after-tax profits, ranging between VNĐ500-700 billion in 2025-26, driven by its lending expansion strategy and disciplined cost management,” FiinRatings said.

A major contributor to F88’s favourable rating is its enhanced risk management framework and effective debt collection strategies.

FiinRatings noted that F88 has significantly improved its ability to manage bad debts, thanks to stricter credit policies, enhanced risk appetite controls, and better coordination across departments. The company’s debt collection rate also saw a strong recovery, reaching 41.7 per cent in 2024, compared to just 15.6 per cent in 2023.

“We expect F88 to further improve debt collection efficiency and reduce credit losses, while maintaining prudent policies on debt classification, provisioning, and bad debt resolution. If this trend continues, F88’s average credit cost-to-debt ratio could decline to 19 per cent by 2026,” the report added.  — VNS