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ANZV's ratings are underpinned by Fitch’s expectation of a moderate probability of support from ANZ, if required. This takes into consideration the bank's limited size relative to its parent's assets and ANZ's strong credit profile.

Fitch Revises Outlook on ANZ Vietnam to Positive; Affirms at 'BB'
Fitch Ratings has revised the Outlook on the Long-Term Issuer Default Rating (IDR) of ANZ Bank (Vietnam) Limited (ANZV) to Positive, from Stable. At the same time, the agency has affirmed the bank's Long-Term Foreign-Currency IDR at 'BB', Long-Term Local-Currency IDR at 'BBB-' and Support Rating at '3'.
The revision of the Outlook follows Fitch's revision of its Outlook on the Vietnam sovereign (BB/Positive) to Positive, from Stable, on 1 April 2021, and reflects Fitch’s view that support from ANZV's parent, Australia and New Zealand Banking Group Limited (ANZ, A+/a+) is likely to remain robust.
ANZV's ratings are underpinned by Fitch’s expectation of a moderate probability of support from ANZ, if required. This takes into consideration the bank's limited size relative to its parent's assets and ANZ's strong credit profile. Fitch’s assessment of ANZ's propensity to provide timely support to ANZV also takes into account ANZ's full ownership of ANZV and the two entities' common branding. It also recognises ANZV's limited role in the group compared with that of larger subsidiaries in more strategically important markets. ANZV benefits from strong linkages with its parent, including through client referrals, funding support and access to technical expertise.
ANZV's Long-Term Foreign-Currency IDR is constrained by Vietnam's Country Ceiling of 'BB', reflecting transfer and convertibility risk, while its Long-Term Local-Currency IDR is rated two notches above the sovereign rating, as we believe that sovereign restrictions on repayment of local-currency obligations will be lower than those on foreign-currency obligations.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade:
An upgrade in the sovereign IDR and Country Ceiling is likely to lead to similar action on ANZV's Long-Term IDRs, assuming that there is no significant reduction in our perception of the parent's ability and propensity to support the bank.
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade:
A negative revision in the sovereign rating is likely to result in similar revisions to the bank's IDRs. Fitch may also take negative rating action if there is a change in Fitch's assessment of ANZ's propensity or ability to extend extraordinary support in a timely manner. This could occur if Fitch sees a significant reduction in ANZ's stake in the bank, though Fitch thinks this scenario is unlikely in the near term.
There would have to be a large deterioration in ANZ's Viability Rating for ANZV's IDR to be negatively affected, as it is currently seven notches higher than Vietnam's Country Ceiling.
International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance.

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