Vietnamese Bank enhances its position

Bank promotion helps improve investors' confidence, thereby creating favorable conditions for banks to mobilize foreign capital at low costs.

Brand value increases

In the context of many challenging market developments, through evaluation by international organizations, many Vietnamese banks are still continuously promoted. Brand Finance recently announced the top 500 banks with the highest brand value globally in 2024, Vietnam has the presence of 15 banks. Including 3 new faces: TPBank, LPBank and MSB.

Vietnamese banks continuously "score points" for international organizations

In general, most Vietnamese banks recorded an increase in brand value rankings after one year. According to Brand Finance's rankings, Vietcombank is still the Vietnamese bank with the highest brand value, ranked 133/500, up 4 places compared to 2023. VIB is the bank with the highest rank increase after 1 year. From position 491, this bank has risen to position 425. Three other banks also have impressive improvement rankings: ACB, Sacombank, and HDBank, all increasing more than 30 places.

Brand Finance has pointed out the important factors in the impressive growth in brand value of Vietnamese banks are the recovery and revenue forecast. In addition, customer trust is also one of the main pillars that create brand strength. The determination of businesses in implementing commitments and completing strategic goals is also a factor that contributes to growth in brand value.

Good news followed good news when the world's leading credit rating organization Moody's recently upgraded a number of banks. Sacombank has been upgraded by Moody's by 1 notch to issue Sacombank's long-term local and foreign currency deposit and issuer ratings from B3 to B2. Sacombank's Base Credit Assessment (BCA) index was upgraded from Caa1 to B3. At the same time, Moody's also raised 1 level for Counterparty Risk Rating (CRR) in long-term local and foreign currency and Counterparty Risk Assessment (CR) from B2 to B1. According to Moody's, the upgrade is due to Sacombank's significant handling of outstanding assets, helping to improve asset quality and profitability. Moody's also considered Sacombank's strong deposit system to help the bank increase its mobilization capacity and liquidity.

Another positive point is that Sacombank has a large branch network, supporting the ability to attract new deposits with lower mobilization costs than some other banks in the same class. The bank's outstanding problem assets only account for 2.2% of total assets at the end of 2023 from 2.7% the previous year, after including provisions. The bank is completely capable of controlling the additional provisions that may need to be set aside for these assets. In addition, Moody's believes that return on assets (ROA) will be reinforced by higher net interest margin (NIM) in the near future.

Previously, Techcombank was announced by Moody's to upgrade its Outlook for 2024. This result from Moody's reflects recognition of the bank's positive business results in the past year. Specifically, Techcombank's capital adequacy ratio and operating efficiency continue to be higher than the industry average, further supported by diverse capital mobilization sources. Techcombank's mobilization and liquidity structure is assessed to continue to be stable. Deposits from customers increased in 2023, with the CASA ratio improving to 40%, almost the highest level among Vietnamese banks rated by Moody's.

Continue to maintain and increase credibility

According to Dr. Chau Dinh Linh, Banking University, City. Ho Chi Minh City, the fact that reputable international credit rating organizations have raised the prospects of Vietnamese banks is a good thing and not only brings great benefits to the banks themselves but also spreads to the entire system. As the bank's image and brand increasingly improve, it helps them implement their business strategies more easily. In addition, increased credit ratings not only help banks call for domestic capital but also facilitate attracting foreign strategic investors. In particular, the trust of depositors in that bank through brand value also increases.

In addition to positive assessments, international credit rating organizations also point out points that banks need to pay attention to and improve in the coming time to better improve banking operations, continue to maintain and expand their banking operations. increase your credibility. "When seeing the benefits of credit rating upgrade, banks that have not yet improved their ratings will make competitive efforts to score points with this organization. If many banks upgrade their credit ratings together, international organizations will also positively evaluate the health of the entire banking system," Dr. Linh shared more.

Sharing the same opinion, a banking expert assessed that the fact that Vietnamese banks are continuously upgraded by prestigious international credit rating organizations brings dual benefits to them. That is, the bank both improves investors' confidence in operations and at the same time helps them mobilize foreign capital at lower costs. Thereby, helping the bank diversify mobilization channels, especially medium and long-term capital, contributing to adjusting the capital structure towards sustainability.

Although many Vietnamese banks have been upgraded by credit rating agencies since the previous decision to upgrade the national credit rating, it must be affirmed that in recent times, the banking system has made great efforts to improve its financial health. Finance, liquidity, governance, strengthening the application of international standards and practices... This also confirms that the State Bank's monetary policy management solutions are increasingly effective and are evaluated by international organizations. contributes to controlling inflation and stabilizing the macroeconomy. VND continues to be the most stable domestic currency in the region in the context of global financial fluctuations.

Looking to the future, although there have been clear changes, according to experts, we cannot be satisfied with the results achieved, especially the credit ratings of banks are still not in the encouraged group. actively invest, but need to continue to raise credibility to an even higher level.

In addition, international rating agencies also note credit risks because the credit/GDP ratio is still quite high. Along with that, the bank's profitability (profitability) may be affected if the real estate market faces difficulties.

Another note, in the coming time, banks need to focus on improving and accelerating the process of handling bad debts. Because international rating agencies assess that although the asset quality of Vietnamese banks has improved, it is still quite fragile, especially the increasing trend of bad debt, so do not be subjective.