Up to now, there are three Vietnamese banks being listed in the Top 500 most valuable banking brands in the world including VietinBank, BIDV and Vietcombank.
This information is published by the independent brand valuation and strategic consultancy company Brand Finance on value of 500 world’s most valuable bank brands in 2018.
*Three Vietnamese banks entering top 500 in the world
It is easy to understand that the Chinese and US banks are dominating leading positions, but notably, three Vietnamese banks namely VietinBank, BIDV, Vietcombank continue to appear and make significant improvements in rankings.
In particular, the ranking of VietinBank increased from 408 in 2017 to 310 this year. With this result, VietinBank reached the top 10 brands with the highest value of 51 percent. Meanwhile, BIDV increased from 401 to 351 while Vietcombank improved from 461 to 368.
VietinBank said the brand value of this bank inched up from $252 million to $381 million; the brand strength index (BSI) also swelled from A to AA-.
Recently, on February 27, Fitch Ratings has also announced long-term issuer default rating (IDR) for Military Commercial Joint Stock Bank (MBBank) from B to B + with stable outlook.
At the same time, the ratings of Asia Commercial Bank (ACB) remained unchanged at B with stable outlook and VietinBank, Vietcombank and Agribank were rated B + with positive outlook.
Fitch also raised the Viability Rating (VR) of VietinBank and Vietcombank to “b” from “b-” and that of MBBank from b to b+.
One of the reasons for this organisation’s positive assessment is the improvement of the operating environment of Vietnam banking system, with economic policy formulation from the authorities to help promote the macroeconomic-stability and forecasting ability.
This has allowed banks to significantly reduce the risks of loans facing legal problems, which have a large proportion in external and internal debt balance.
Long-term structural weaknesses of the banking system, such as weak capital buffers and weak profitability, are expected to be resolved more satisfactorily in the long run.
*Seven banks considered to upgrade basic credit ratings
The improvement of economic and operating environment of banks has been demonstrated by Moody’s adjustment of Vietnam’s macro-economic outlook towards positive way.
According to Moody’s, Vietnamese banks are benefiting from strong economic growth as well as from strengthened institutional strength.
On the basis of that positive credit rating, in 2017, banks that will be considered by Moody to increase the credit rating include An Binh Commercial Joint Stock Bank (ABBank), Asia Commercial Bank (ACB) Joint Stock Commercial, Bank for Foreign Trade of Vietnam (Vietcombank), Military Commercial Joint Stock Bank (MBBank), Saigon Bank (SHB), Saigon Thuong Tin Commercial Joint Stock Bank (SacomBank), Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank), Vietnam International Commercial Joint Stock Bank (VIB) and Vietnam Technological and Commercial Joint Stock Bank (Techcombank).
The above seven banks will also be considered to upgrade their base credit rating (BCA) and counterparty risk assessment (CRA) along with two other banks.
This move shows that Moody’s expects that an improved economic and environmental context for Vietnamese banks will lead to improved credit profiles and notably asset quality as well as help maintain liquidity and financing.
From a purely business perspective, Vietnamese banks have also made significant progress.
At the end of last year, in spite of not being among the largest banks in the domestic commercial banking system, OCB became the first bank in Vietnam to announce the completion of Basel II project with foundations for a modern, secure bank along with requirements on capital, monitoring, information transparency, etc.
(Basel II is the second version of Basel Convention, which lays down general principles and Banking Laws by Basel Committee on Banking Supervision).
Eddie Lim, representative of DBS Bank (Singapore) that provides consultancy services to meet specific Basel II requirements, stated that “I have no doubts about the progress made. The application of a rigorous examination framework will allow OCB to identify, measure and control financial risks, particularly assess the bank’s liquidity profile and appropriate capital buffer in the event of intense events of the world and the bank”.
Along with that, OCB was also rated B2 by Moody’sthe highest rating of Vietnamese commercial banks so far.
