Moody’s upgrades VPBank’s credit rating for second year

Global credit rating firm Moody’s Investors Services has upgraded Vietnam Prosperity Bank (VPBank)’s baseline credit assessment from B3 to B2, and its counterparty risk assessment from B2 to B1.

In addition, Moody’s kept VPBank’s rating on long-term foreign-currency deposit unchanged at B2, while raising its outlook from ‘stable’ to ‘positive’.

This was the second consecutive year Moody’s has assigned a positive assessment for VPBank’s ratings.


The baseline credit assessment reflects the bank’s sound credit profile, as well as its probability of a bank’s standalone failure, absent external support. This rating is based upon macroeconomic, financial and asset quality factors.

The counterparty risk assessment evaluates the risk of a partner engaging with that bank.

The Moody’s upgrade took into consideration VPBank’s significant improvement in financial strength, operating efficiency, profitability, as well as growth potential.

VPBank’s return on assets (ROA) ratio increased from 1.7 per cent in 2016 to 2.3 per cent in 2017, outperforming many other Vietnamese banks. Its pre-provision operating profit jumped by 56 to 57 per cent in the past two years.

Moody’s praised the bank’s expansion in business scale and its leading position in the consumer finance market, which has generated high profit margins and contributed to VPBank’s strong earnings.

It reported a record revenue and profit in 2017, with VNĐ25.03 trillion (US$1.1 billion) in total revenue and VNĐ8.13 trillion in pre-tax profits, up 48 per cent and 65 per cent against 2016, respectively.

Also, the lender’s charter capital climbed from VNĐ9.18 trillion to over VNĐ15.7 trillion.

The risk-weighted asset (RWA) rose from 8.5 per cent in 2016 to 12.1 per cent by the end of 2017. This improvement is attributed to additional share issues, stock dividends and bonus shares, increasing retained earnings and reducing average loan growth to 26 per cent, from 41 per cent in the 2013-16 period.

VPBank is one of the top five commercial joint stock banks, in terms of lending and mobilizing deposits.