The Big Three: S&P Global Upgrades Vietnam’s Top Banks

On August 25th, S&P Global Ratings announced an upgrade to the long-term credit ratings of three of Vietnam's largest banks, alongside an improvement in the Banking Industry Country Risk Assessment (BICRA) from Group 9 to Group 8. This move reflects the positive transformation of Vietnam's economic landscape and the enhancement of its financial legal framework.

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In a recent announcement, S&P has upgraded the long-term ratings of three Vietnamese banks: Vietcombank (HOSE: VCB), Techcombank (HOSE: TCB), and Eximbank (HOSE: EIB). Vietcombank’s rating has been raised from BB to BB+ with a stable outlook, while Techcombank has been upgraded from BB- to BB, also with a stable outlook. Eximbank has seen an improvement from B+ to BB-, maintaining stability. The short-term ratings for all three banks remain unchanged at B.

S&P attributes Vietcombank’s upgrade to the enhanced BICRA of Vietnam. The bank’s stand-alone credit profile (SACP) has been raised from bb- to bb+, reflecting its strong capital position and superior asset quality relative to peers.

Vietcombank is expected to maintain a risk-adjusted capital (RAC) ratio of 5.8% to 6.3% over the next two years, close to the 5.9% level at the end of 2024. While non-performing loans may increase slightly to 1.2% over the next 12 to 24 months, this remains significantly lower than the industry average of 4 to 5%. The bank also boasts a loan loss reserve ratio of over 200%, providing a comfortable buffer against credit risks.

Eximbank’s improved rating reflects its strategic focus on retail and small business segments, which offer higher yields. As of the end of 2024, retail loans accounted for 54% of its total loan portfolio.

According to S&P, Eximbank’s successful restructuring efforts and tighter credit standards over the past few years have resulted in improved profitability, reduced risk costs, and a more sustainable operating foundation.

For Techcombank, S&P forecasts a RAC ratio of 6% to 6.7% over the next two years, compared to 7.1% at the end of 2024. While non-performing loans may rise to 1.4%, they will still be lower than the industry average.

The bank has limited exposure to the export sector, mitigating direct risks from trade fluctuations. S&P recognizes Techcombank’s strong retail position and expects it to maintain above-average profitability.

Vietnam’s banking sector: Stronger foundations but risks remain

S&P believes that Vietnam’s banking system will be more resilient to global shocks due to several factors: projected GDP growth of 5.9% in 2025 and 6.0% in 2026, outpacing regional averages; stable FDI inflows; and a decrease in the industry’s non-performing loans from 4.5% in 2023 to 4.1% in 2024.

The upcoming Law on Handling Secured Assets, which is expected to come into effect in October 2025, will also support banks in addressing non-performing loans.

However, the industry remains reliant on customer deposits, which are sustained by high savings rates (35-37% of GDP). The State Bank of Vietnam maintains a loose monetary policy, reducing operating rates from 4.5% in 2023 to 3%, which helps lower funding costs for the system.

Nevertheless, S&P warns of certain risks, including a high credit/GDP ratio (136% in 2024), limited disclosure standards, and an unclear timeline for the implementation of Basel III. The rating upgrades and improved BICRA reflect a strengthening and more transparent financial system in Vietnam, boosting market confidence and the banks’ prospects for international capital raising in the future.

Vu Hao

– 13:41 26/08/2025

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