FE Credit's headquarter in HCM City. Moody's decision to maintain the B1 rating demonstrates their active recognition of FE CREDIT's recent recovery efforts.Photo courtesy of the firm

HCM CITY — International credit rating organisation Moody's, has announced it will maintain the rank of B1 for VPBank SMBC Finance Company Limited (FE CREDIT).

Moody's has also confirmed that FE CREDIT's Corporate Family Rating (CFR), which is based on its correlation with other members within the same corporation, will remain at B1.

According to Moody's assessment, FE CREDIT has still faced several challenges. However, the strong support from its parent bank, VPBank (which holds a Ba3 credit rating with a stable outlook), and SMBC will help compensate for these difficulties. Moody's has maintained FE CREDIT's outlook based on its recent assessment.

Amid a fluctuating economy, Moody's decision to maintain the B1 rating demonstrates their active recognition of FE CREDIT's recent recovery efforts.

The year 2023 marked a significant milestone for FE CREDIT as the company underwent a process of restructuring and refining its entire system. Through timely adjustments in business operations, optimisation of operating costs, and strengthening of risk management controls, the largest consumer finance company in Việt Nam achieved initial successes. In the second half of 2023, FE CREDIT recorded positive developments in its business activities.

By the end of the first quarter of 2024, FE CREDIT experienced positive growth in its disbursement scale compared to the average of 2023. With a more cautious lending strategy that focuses on low-risk customer profiles, the loan quality of FE CREDIT has improved consistently each quarter.

Furthermore, the implementation of a corporate model has helped FE CREDIT optimise its operating costs. In the first quarter of the year, the company achieved a 10.5 per cent reduction in operating expenses, and the cost-to-income ratio (CIR) decreased significantly by 27.7 per cent compared to the same period last year.

In 2024, FE CREDIT will undertake specific action programmes that involve focusing on optimising the existing business model, enhancing the risk control framework, and improving the customer experience. Simultaneously, the company will drive digital transformation initiatives with the goal of reaching a wide range of customers.

Additionally, FE CREDIT will strengthen its collaborations with reputable retail chains in the market to offer diverse and flexible products that cater to different customer segments, aiming to boost sales.

VPBank is one of Việt Nam's earliest established joint-stock commercial banks, with a 30-year history of sustainable development. Currently, it holds the position of the bank with the largest charter capital in Việt Nam. In 2023, VPBank will rank 173rd among the 500 most valuable banking brands globally.

As a pioneer in the field of consumer finance in Việt Nam, FE CREDIT offers a wide range of consumer financial products and services. These include personal consumer loans, instalment plans for purchasing phones and electronics, instalment plans for purchasing motorbikes, credit card services, and insurance solutions.

FE CREDIT serves over 14 million customers nationwide, providing easy access to consumer loans through various platforms. Customers can apply for loans through the FE Online application, the company's website, or by visiting any of the 13,000 FE CREDIT transaction points across the country.

In 2022, FE CREDIT received recognition for its outstanding performance. It was voted as the "Best Consumer Finance Product Việt Nam 2022" and recognised as the "Fastest Growing Consumer Finance Company Việt Nam 2022" by The Global Economics Magazine. — VNS