Accordingly, Moody’s affirmed the issuer rating and the long-term foreign-currency / local-currency deposit ratings of VPBank at Ba3, along with unchanged baseline credit assessment (BCA) – reflecting the stand-alone intrinsic strength of the Issuer, at Ba3.
The decision to maintain the Ba3 credit rating with a stable outlook for VPBank is based on the bank’s solid capital foundation, mobilization capacity and liquidity safety, in the context of the global and Vietnamese economies facing many difficulties, challenges, and unpredictable fluctuations in the future.
According to Moody’s, VPBank‘s capital foundation has improved significantly after completing the 15% stake sale to SMBC Bank (Japan) last year, with equity increasing to nearly 140 trillion VND, ranking second in the whole system at the end of 2023. The capital adequacy ratio (CAR) of VPBank, according to Moody’s methodology, increased to 15.5% – the highest among banks rated by Moody’s in Vietnam.
Moody’s also highly appreciated VPBank‘s mobilization capacity, maintaining a strong balance sheet and liquidity safety. Accordingly, the bank’s CASA ratio increased to over 17% by the end of 2023.
“Moody’s expects the bank’s loan size to increase by about 20% – 25% and the net interest margin (NIM) to improve in the next 12-15 months thanks to reduced capital costs,” Moody’s assessment report said. At the same time, asset quality in strategic segments such as retail customers, SME will improve thanks to expectations of economic recovery in 2024 as well as the policy of reducing interest rates.
At the end of the first quarter of 2024, VPBank‘s consolidated credit increased by 2.1% compared to the beginning of the year – higher than the industry average of 1.3%, and increased by nearly 22% over the same period, reaching nearly 613 trillion VND. Consolidated customer deposits and Certificates of Deposit (CDs) of the bank rose by 2.4% compared to the end of 2023 and by more than 21% over the same period, contributing to the consolidation of the balance sheet’s effectiveness.
The solid capital platform built in 2023 along with abundant liquidity have been contributing to optimizing the cost of funds (CoF) of VPBank through each quarter. As of March 31, the CoF of the consolidated bank decreased to below 5% compared to the average of over 6% in the fourth quarter and the whole year of 2023, shaping a downward trend quarter by quarter.
After finishing the first quarter of 2024, VPBank posted consolidated pre-tax profit (PBT) of nearly 4.2 trillion VND, an increase of nearly 66% compared to the previous quarter and 64% over the same period. At the parent bank alone, PBT for the first quarter reached over VND 4.9 trillion, nearly doubling compared to the fourth quarter of 2023, with total operating income increasing by 15% and net interest income increasing by 25% over the same period.
