Moody's credit rating B1, positive outlook for TPBank

Moody's maintains the B1 credit rating and positive outlook for TPBank according to the latest report. This is the rating of Moody's and only 5 joint stock commercial banks in Vietnam achieved this rating in this year's assessment.

International credit rating agency Moody's Investors Service (Moody's) has just announced to maintain the credit rating of B1, a positive outlook for Tien Phong Commercial Joint Stock Bank (TPBank). Specifically, Moody's maintains TPBank's counterparty risk rating at Ba3 - the highest level in this unit's rating for the banking system in Vietnam; Base credit rating, long-term deposit and long-term issuer at B1.

This is a high rating of Moody's and only 5 joint stock commercial banks in Vietnam achieved in this year's assessment. In the context of increasing inflation affecting the economy, Moody's maintaining the credit rating of TPBank shows that the bank has a strong financial foundation, well controlled risks with continuous improvements and stable long-term development prospects.

According to Moody's, this positive credit rating reflects the sustainable improvement of TPBank's capital position with stable asset quality and profitability. The rating agency also has positive assessments of the bank's credit quality such as strong asset quality and appropriate loan loss insurance, high liquidity, and asset quality expectations. The product will improve even more in the near future.

“We expect NIM to gradually improve as the bank re-lends at higher interest rates and exits restructured loans, in line with Vietnam's economic recovery and TPBank's profitability. will improve in the next 12-18 months”, said Moody's representative. Besides, Moody's also expects TPBank to continue focusing on retail lending by exploiting the mass market, in addition to the young customer market that this bank is still focusing on.

According to the latest announcement of Forbes, TPBank is one of the 50 best listed companies in 2022 and among the top 7 listed banks in Vietnam. To achieve this result, TPBank has built a solid buffer in terms of internal resources, established sustainable growth momentum, strong growth in capital scale, and maintained safety and performance indicators among the group. market leader.

According to the financial report, in the first 6 months of the year, TPBank's total assets reached more than 310 trillion VND, completing nearly 89% of the target plan. The breakthrough in profit in the second quarter brought the accumulated profit by the end of June 30, 2022 to VND 3,788 billion, up 26% over the same period. Asset quality remained stable with a bad debt ratio of 0.85% and a bad debt coverage ratio of 162% at the end of the second quarter. TPBank also continued to deal strongly with bad debts with VND 1,095 billion. With the above results, TPBank is in the top 5 banks with good asset quality with the lowest NPL ratio and the top 6 highest NPL coverage ratio.

Recognizing the importance of risk management early, TPBank was prepared and one step ahead in risk management, up to now TPBank has completely complied with Basel III standards, one level higher than the previous level. against the requirements of the State Bank. TPBank is also the leading bank in the application of the preparation and presentation of financial statements in accordance with International Financial Reporting Standards IFRS9.

In the latest analysis report on TPBank of VnDirect, this securities company said: ''Inflationary pressures and capital market supervision have caused concerns about the outlook of the banking industry in the past few months. However, we still believe that TPBank will still maintain a solid foundation with good growth and profitability in the next three years (ROE from 20-21% in the period 2022-2024); and the bank's 2022 forward P/B is currently 1.4x, reflecting an attractive valuation with TPB's recommended price of VND38,500.

Forecasting the prospects, VnDirect believes that TPBank is one of the leading banks in the retail banking trend in Vietnam thanks to (i) the strategy of focusing on retail lending products, which has a high penetration rate. low in Vietnam, and especially (ii) a pioneer in digital transformation with a strong competitive advantage through simple and streamlined lending procedures. This helps the bank to expand its potential young customer base and grow deposit mobilization in the next 3 years.