S&P announced upgrading Techcombank's (HoSE: TCB) credit rating to BB

S&P Global Ratings is one of the three largest and most prestigious credit rating agencies in the world. The upgrade continues to reflect S&P’s highest recognition of a private joint stock commercial bank in Vietnam, and demonstrates confidence in Techcombank ’s stable outlook over the next 24 months thanks to its retail banking network and outstanding profitability.

In its press release, S&P particularly emphasized that “Techcombank will maintain its capital position over the next 24 months, after having been strongly improved”, increasing by more than 20% in 2024. Techcombank's capital adequacy ratio and profitability - according to S&P's very strict calculation standards - continue to be rated the highest, far surpassing other banks in the system.

In addition, with the impressive results that Techcombank has achieved, S&P expressed confidence that “[the Bank’s] risk profile will stabilize in the coming period, despite macroeconomic uncertainties” with “non-performing loans remaining low compared to the industry average”. Notably, Techcombank’s low level of non-performing loans and potential risk loans was achieved while maintaining the most stable provisioning costs and only approximately 50% compared to competitors. Excluding qualitative factors in the provisioning policy (especially often applied by state-owned commercial banks), Techcombank’s non-performing loan coverage ratio, risk profile as well as its own credit rating are ranked at the highest level in the industry.

The credit rating upgrade in the current context by one of the world’s leading prestigious organizations not only reflects Techcombank’s sustainable financial strength but also reinforces the Bank’s pioneering role in the Vietnamese financial system. This is an important step forward to help Techcombank further expand its access to international capital markets and enhance the confidence of domestic and foreign investors.

Techcombank continues to be the only Vietnamese bank to have succeeded in diversifying its capital structure, including mobilizing from major financial institutions around the world for large long-term loans (3-5 years) with very competitive interest rates. Previously, in July, Techcombank also announced that it was the only bank in Vietnam to not only achieve the most prestigious triple award for “Best Bank in Vietnam” in 1 year but also for 2 consecutive years, 2024-25, by Euromoney, Global Finance and FinanceAsia.

In addition, during the working process with S&P, Techcombank not only shared the bank’s own situation and strengths but also proactively proposed that S&P reassess the rating of the entire Vietnamese banking industry. For many years, S&P’s rating, for many reasons, has not accurately reflected the industry’s position compared to the remarkable progress achieved, surpassing many financial and banking industries of other countries with the same rating.

With the timely support, direction, and coordination of the Government and the State Bank, Techcombank arranged working sessions for the S&P delegation with the Deputy Prime Minister, as well as with representatives of the State Bank to share more about the orientation, or the reality of economic management and the banking industry, strengthening the confidence of S&P experts not only in the results Vietnam has achieved but more importantly in the "Prospects" in the coming time.

The upgrade assessment by the world's leading credit rating agency S&P reflects the recognition of positive results not only for Techcombank but also for the entire Vietnamese banking industry, especially in the 2020-24 period when the system has steadily overcome major challenges thanks to the completion of the legal framework, strong direction as well as the enhanced capacity of banks in general and Techcombank in particular.

Regarding recent tariff concerns, S&P also believes that Techcombank will be insignificantly affected due to its very low exposure to export customers affected by reciprocal tariffs.

The credit rating upgrade of the Vietnamese banking system and Techcombank is of great significance in the context of the world's geopolitical and economic uncertainties. Most of the assessments since the beginning of this year for other countries, banking sectors or credit institutions have only maintained, or even downgraded the credit rating or outlook. This is especially meaningful when S&P directly upgraded Techcombank's credit rating by 1 notch - instead of just adjusting the outlook as usual - reflecting a strong belief in the internal strength and position of Techcombank as well as the positive outlook of the Vietnamese banking system.

Source: https://baodautu.vn/sp-cong-bo-nang-xep-hang-tin-nhiem-techcombank-hose-tcb-len-muc-bb-d371163.html