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Fitch maintains 'B' ratings for 4 local banks

Fitch maintains 'B' ratings for 4 local banks

Wednesday, July 03, 2013, 22:00 GMT+7

Fitch Ratings has maintained the ‘B’ notch in the Long-Term Issuer Default Ratings (IDRs) for 4 Vietnamese banks.

They include Vietnam Bank for Agriculture and Rural Development (Agribank), Vietnam Joint-Stock Commercial Bank for Industry and Trade (Vietinbank) and Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) and Asia Commercial Bank's (ACB).

The US credit rating agency has also reaffirmed the ‘stable outlook’ rate in the IDRs for 3 of them, excluding ACB with a ‘negative outlook’.

The agency has also affirmed Vietinbank's outstanding senior notes due 2017 at Long-Term 'B' and a Recovery Rating of 'RR4'.

“The rating actions have been taken in conjunction with Fitch's periodic review on Vietnamese banks,” Fitch said in its latest new release.

The Long-Term IDRs, Support Ratings and Support Rating Floors of Agribank and Vietinbank reflect Fitch's expectation of likely state support as both banks are among those most systemically important to the domestic economy, it said.

Meanwhile, the Long-Term IDRs and Viability Ratings (VRs) of ACB and Sacombank reflect their reasonable standalone credit profiles and risk appetites, including to state-owned entities, but are constrained by ongoing challenges in the domestic operating environment, which have led to weaker asset quality and lower profitability indicators, Fitch added.

“The Negative Outlook on ACB reflects a further potential impairment burden on its financial profile from exposure to six companies where Nguyen Duc Kien was either Chairman or a Member of the Board of Management, with one of the companies reportedly under external investigation following Mr Kien's arrest in August 2012,” Fitch said in its news release.

The 'stable outlook' on Sacombank incorporates its lower reported exposure to companies related to the former chairman, to 7 percent of core equity from an initial 21 percent.

Closing Wednesday trading session, ACB share was traded at VND16,200 per share, up 0.6 percent in value day on day, while CTG share of Vietinbank and STB share of Sacombank were trade at VND19,500 per share and VND17,500 per share, respectively, unchanged from the previous day.

Fitch Ratings has maintained the ‘B’ notch in the Long-Term Issuer Default Ratings (IDRs) for 4 Vietnamese banks.

They include Vietnam Bank for Agriculture and Rural Development (Agribank), Vietnam Joint-Stock Commercial Bank for Industry and Trade (Vietinbank) and Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) and Asia Commercial Bank's (ACB).

The US credit rating agency has also reaffirmed the ‘stable outlook’ rate in the IDRs for 3 of them, excluding ACB with a ‘negative outlook’.

The agency has also affirmed Vietinbank's outstanding senior notes due 2017 at Long-Term 'B' and a Recovery Rating of 'RR4'.

“The rating actions have been taken in conjunction with Fitch's periodic review on Vietnamese banks,” Fitch said in its latest new release.

The Long-Term IDRs, Support Ratings and Support Rating Floors of Agribank and Vietinbank reflect Fitch's expectation of likely state support as both banks are among those most systemically important to the domestic economy, it said.

Meanwhile, the Long-Term IDRs and Viability Ratings (VRs) of ACB and Sacombank reflect their reasonable standalone credit profiles and risk appetites, including to state-owned entities, but are constrained by ongoing challenges in the domestic operating environment, which have led to weaker asset quality and lower profitability indicators, Fitch added.

“The Negative Outlook on ACB reflects a further potential impairment burden on its financial profile from exposure to six companies where Nguyen Duc Kien was either Chairman or a Member of the Board of Management, with one of the companies reportedly under external investigation following Mr Kien's arrest in August 2012,” Fitch said in its news release.

The 'stable outlook' on Sacombank incorporates its lower reported exposure to companies related to the former chairman, to 7 percent of core equity from an initial 21 percent.

Closing Wednesday trading session, ACB share was traded at VND16,200 per share, up 0.6 percent in value day on day, while CTG share of Vietinbank and STB share of Sacombank were trade at VND19,500 per share and VND17,500 per share, respectively, unchanged from the previous day.

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