A Moody's building. (Source: ibtimes.com)
At the same time, the U.S.-based credit rating agency lifted the two banks’ baseline credit assessment (BCA) to b3 from caa1.
Moody’s changed the outlook of both Techcombank and ACB to stable from positive.
“The upgrade of Techcombank’s deposit and issuer ratings to B2 from B3 reflects the improvements in the standalone credit profile of the bank, as reflected by the upgrade of the BCA to b3”, said Moody’s.
Techcombank’s asset quality metrics have improved in 2014 and the first half of 2015, although from a relatively weak base. The improvements in asset quality were driven by write-offs, recoveries, and some credit growth.
The unlisted bank’s problematic assets decreased to 12.8% of gross loans as of June 2015, from 14.4% in December 2014 and 20.1% in December 2013.
Regarding ACB, Moody’s said that the bank’s bad loan ratio declined slightly to 4.66% at end-June 2015 from 4.75% at end-2014 and down from a high of 7.77% at end-2012. “Some of this improvement in the bank’s problem loans ratios is due to the transfer of assets to the Vietnam Asset Management Company (VAMC)”.
ACB’s moderate loan growth has further reduced the risk that newer loans could deteriorate and materially weaken asset quality. Loan growth was 9% in 2014 and 3% in 2013, significantly below the system averages of [15%] in 2014 and [15%] in 2013, Moody’s added.