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Banks (Finance)

Moody's Reaffirms An Binh Commercial Joint Stock Bank's Ratings Amid Ongoing Challenges

Strategic Insights

— 1 min read

Moody's Investors Service has completed a periodic review of the ratings of An Binh Commercial Joint Stock Bank, reaffirming its B2 long-term bank deposit ratings and b3 Baseline Credit Assessment (BCA). The review, conducted on July 2, 2025, assessed the bank's standalone credit profile, which remains weak due to high asset risks, modest loan loss buffers, and strained profitability. Despite this, the bank's capital is expected to stay above average, supported by moderate loan growth and a prudent capital retention policy.

Key Takeaways:

  • The bank's ratings and BCA reflect its weak standalone credit profile, with high asset risks and modest loan loss buffers.
  • An Binh Commercial Joint Stock Bank's profitability will be strained due to high credit costs, and its capital is expected to decline.
  • The bank's increasing reliance on wholesale funding and modest liquidity buffers are also considered in its BCA.
  • The BCA is one notch above the bank's B2 long-term bank deposit ratings, reflecting Moody's assumption of moderate government support.
  • The outlook on An Binh Commercial Joint Stock Bank's ratings is stable, reflecting Moody's expectation that the bank's solvency and liquidity metrics will remain unchanged over the next 12-18 months.
  • Factors that could lead to an upgrade of the ratings include:

+ Fully resolving Vietnam Asset Management Company bonds.

+ Maintaining nonperforming loan (NPL) ratio below 3%.

+ Improving tangible common equity (TCE) to risk-weighted assets (RWA) to above 10%.

  • Factors that could lead to a downgrade of the ratings include:

+ Decline in TCE/RWA below 7.2%.

+ Bank becoming unprofitable.

+ Deterioration in asset quality, funding, or liquidity.

+ Reduced government support due to diminished systemic importance (deposit market share below 0.5%).

Statistics:

  • The bank's B2 long-term bank deposit ratings and b3 Baseline Credit Assessment (BCA) reflect its weak standalone credit profile.
  • Moody's expects the bank's profitability to be strained due to high credit costs, with a TCE/RWA ratio below 7.2% potentially leading to a downgrade.
  • An Binh Commercial Joint Stock Bank's capital retention policy is considered prudent, supporting moderate loan growth.

Sources:

  • Moody's Ratings, "Moody's Periodic Review: An Binh Commercial Joint Stock Bank"
  • Moody's Methodologies, "Banks, Published in November 2024"
  • https://ratings.moodys.com
  • https://ratings.moodys.com (Rating Methodologies page)

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