BAC A BANK is rated "A-" with a "Stable" outlook.

In early April 2024, FiinRatings – a member of FiinGroup and a partner of S&P Global Ratings in Vietnam – assigned BAC A BANK a long-term Issuer Credit rating of 'A-' with a "Stable" outlook.

“We rate BAC A BANK’s business stability at ‘Medium,’ contributed by its modest but consistently stable size within the industry over the years; its consistent lending policy targeting essential sectors less sensitive to economic fluctuations; and its medium-term customer base expansion strategy.”

According to FiinRatings' first Credit Rating Report, BAC A BANK possesses unique advantages that earned it an "A-" rating with a "Stable" outlook over the next 12-24 months. Firstly, BAC A BANK's risk position is rated "Very Good," demonstrated by its clearly defined and consistent risk management practices, combined with a consistent risk appetite targeting both individual and corporate clients with low risk levels. BAC A BANK's experience and history in asset quality management are also consistently good and more prudent than the industry average, coupled with a lower perceived risk level compared to the industry due to its relatively simple business model and focus on lending.

“We assess that BAC A BANK has maintained more stable asset quality and credit costs compared to the industry average, despite the challenging business environment. During the 2019-2023 period, BAC A BANK's average annual loan growth rate was 7.2%, lower than the industry average of around 15%. However, during this period, BAC A BANK effectively controlled the proportion of problematic loans (including Group 2 loans and non-performing loans – Groups 3, 4, and 5) and consistently maintained a very low non-performing loan ratio. Although the non-performing loan ratio tended to increase in 2023 (following the trend of the banking industry), BAC A BANK still maintained the lowest non-performing loan ratio in the system, at 0.92% as of December 31, 2023, lower than the industry median of 2.3% at the same time.” Regarding provisioning, BAC A BANK's non-performing loan (NPL) coverage ratio has consistently been maintained at a much higher level than the industry average, and has tended to increase along with the industry, especially from 2020 onwards when the State Bank of Vietnam continuously issued regulations guiding the restructuring of loans affected by the Covid-19 pandemic. As of December 31, 2023, the Bank's NPL coverage ratio reached 131.0% (2022 data: 203.8%; 2021 data: 161.8%), while the industry average was 63.7% (2022: 68.9%; 2021: 60.9%). This ratio for BAC A BANK is comparable to that of leading private banks and banks with high-yielding asset portfolios. Provisioning costs increased by 35.7% year-on-year, equivalent to the growth rate of problematic loans. Loans recovered after provisioning decreased by 34.0% year-on-year, reaching VND 93 billion. In addition, BAC A BANK's credit cost ratio increased to 0.2% (2022: 0.1%; 2021: 0.3%). FiinRatings estimates this ratio will remain around 0.2-0.3% during the 2024-2025 period. “With a lending orientation focused on government-encouraged sectors with low risk and volatility, such as high-tech agriculture and social welfare, BAC A BANK has strengthened its risk-weighted position over nearly 30 years of development. The bank has maintained a stable loan portfolio, with the majority of its structure coming from essential and less volatile sectors (processing and manufacturing accounting for 37%; agriculture, forestry, and fisheries accounting for 18%) – focusing on large enterprises in these sectors with good credit quality and within BAC A BANK's typical lending value chain. In addition, we always accompany and advise investment clients in these sectors, thus having a comprehensive understanding of their business operations and closely monitoring their cash flow,” said Mr. Chu Nguyen Binh, Deputy General Director of BAC A BANK. BAC A BANK's capital and liquidity profile is 'Suitable' thanks to the bank's increased capital structure stability and continued benefit from its highly loyal retail customer base. BAC A BANK's stable funding ratio, as adjusted by FiinRatings, showed a slight downward trend during the 2019-2023 period, averaging 100.1%, but remained higher than the industry average of 98.8%. The ratio of highly liquid assets to short-term wholesale capital remained above 1.0 times. With good liquidity, stable customer deposits, and strong interest rate reductions from Q2 2023 to the present, BAC A BANK's cost of capital in 2024-2025 is expected to gradually decrease to near the industry average.

Other assessment factors: BAC A BANK's business position, capital structure, and profitability are rated "Average" by FiinRatings based on factors such as the bank's size and business diversification being more modest than the industry average. For more detailed information on FiinRatings and its initial issuer rating report on BAC A BANK, as well as the prospect of future rating upgrades or downgrades, please visit the bank's website: www.baca-bank.vn

Source: https://www.baca-bank.vn/SitePages/website/tin-tuc.aspx?ttid=1069<tid=17&pb=False&s=TT&tt=BAC%20A%20BANK%20%C4%90%C6%AF%E1%BB%A2C%20X%E1%BA%BEP%20H%E1%BA%A0NG%20T%C3%8DN%20NHI%E1%BB%86M%20M%E1%BB%A8C