News 12/01/2016 06:18

VietinBank has remained its highest ratings among Vietnamese commercial banks

Over the last 3 years (from 2014 to 2016), Fitch Ratings, Standard and Poor’s and Capital Intelligence have affirmed the ratings on Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank), equivalent with ratings of Vietnam. Up to now, VietinBank has remained its highest ratings among Vietnamese commercial banks rated by such international ratings agencies.

VietinBank - Top 10 Most Valuable Brands 2016 - awarded by Brand Finance

The “scoring” factors

Equity

VietinBank’s equity ended 30^th September, 2016 reached at over 61,300 billion VND, in which the chartered capital accounted for above 37,200 billion, the fund surplus made up nearly 9,000 billion, deposits from credit organizations were over 5,300 billion and retained earnings stood at 9,000 billion. VietinBank is always a commercial bank with the largest chartered capital and the strongest strategic partners with the majority from the Vietnamese government with 64.46%, two foreign partners namely the Bank of Tokyo Mitsubishi UFJ (19.73%) and International Finance Corporation (8.03%) and the rest for the minority (7.78%). VietinBank has complied fully with required capital adequacy ratios. Besides, its capitalization has increased dramatically after BTMU injected fund into VietinBank in 2013.

The assets quality

As of 30^th September, 2016, total assets of VietinBank reached about 901 trillion VND, increasing by 15.56% compared with 31^st December 2015, accounting for 101.03% of the whole plan for 2016. Loans to customers made up 625 trillion VND, going up by 16.23% compared with the end of 2015. Deposits of customers also increased by nearly 27%. As of 30^th September 2016, NPL of VietinBank accounted for 0.86% of the total outstanding loan – the lowest rate amount Vietnamese commercial banks.

According to international ratings agencies, VietinBank is systemically important to the domestic economy and banking system, as reflected by its 10% share of system assets and 11% share of deposits with the high exposure for corporates.

Funding

VietinBank has an advantage over private banks in times of stress as depositors would likely have higher confidence in a majority state-owned bank (64.46%) and strong domestic franchise. As of 30^th September 2016, deposits from customers increased considerably and diversified with the leading market share in terms of system deposits, reaching at 625 trillion VND, increasing by 26.9% compared with the end of 2015. Therefore, according to Moody’s calculation, VietinBank’s loan-to-deposit ratio decreased at 103% at end-June 2016 (107% at end-June 2015). In 2016, VietinBank has strongly pushed its operations to meet fully with requirements of each specific area and focused on safe and efficiency sectors to reach its targeted growth. Therefore, besides positive signals of the economy, loans to customers of VietinBank went up strongly, reaching at 625 trillion VND, increasing by 16.2% compared with end-2015. At the same time, before-tax profit stood at 6,485 billion VND, increasing by 13.2% compared with end-2015.

Standing at Number 1 in the local banking system

VietinBank is expected that the government would provide extraordinary support as VietinBank is systemically important and majority-owned by the Vietnamese government. It is the leading Vietnamese bank in terms of total assets and has a strong domestic network.

In 2016, although the banking system has faced numerous difficulties and challenges with potential opportunities, VietinBank will continue to keep its leading position. It has focused on 5 major areas, namely, continued implementing its medium-term business strategy for 2015-2017; strengthening the sales chain, cross-selling its products and services; increasing its size and strictly controlling its assets quality; re-structuring and standardizing its modern business model as well. With its business strategy, VietinBank will be expected to affirm its highest ratings among Vietnamese local banks in the coming years assessed by international ratings agencies.

Compare ratings of VietinBank with that of Vietnam (updated on Nov, 2016)

Ratings agency	Vietnam	VietinBank	Outlook
Fitch Ratings	BB-	B+	Stable
Moody’s	B1	B1
Standard & Poor’s	BB-	BB-	Stable
Capital Intelligence	BB-	BB- (stable)

Compare ratings of VietinBank with Vietnamese commercial banks (updated on Nov, 2016)

Ratings agency	VietinBank	VCB	BIDV	ACB	MB	SHB	Sacombank	VP	Techcombank	VIB
Fitch	B+	B+	withdraw	B	B	n.a	withdraw	n.a	n.a	n.a
Moody’s	B2	n.a	B2	B2	B3	B3	B3	B3	B2	B2
S& P’s	BB-	BB-	B+	n.a	n.a	n.a	n.a	n.a	BB-	n.a
Capital Intelligence	BB-	B+	B+	n.a	n.a	n.a	n.a	n.a	B+	n.a