MSB was upgraded by Moody’s as a issuer, long-term domestic and foreign currency deposits from B2 to B1. The baseline credit rating (BCA) and adjusted BCA were also raised from b3 to b2.
The BCA upgrade, issuer rating and long-term deposit reflect 3 factors. First, MSB’s asset quality is better thanks to the settlement of all the bonds of the Asset Management Company (VAMC) in 2020 and the reduction of the credit proportion in the real estate sector. Second, profitability is improved thanks to increased net interest income (NIM) and lower cost of credit. Finally, the bank’s equity is stable and according to Moody’s, it will remain in the next 12-18 months.
The rating agency also mentioned that MSB’s NPL ratio has dropped from 4.4% to 2% by 2020, along with the full disposal of VAMC bonds. Besides, the proportion of real estate loans decreased from 36% to 16%. Some of the factors affecting asset quality can be targeted as accounts receivable and other assets, collateral recovered.
The bank’s return on tangible assets increased from 0.7% to 1.1% by the end of 2020 thanks to the NIM’s increase of 88 basis points to 3.22%.
MSB’s issuer and long-term deposit ratings benefit from Vietnam’s national credit rating in Ba3 with a positive outlook. MSB currently holds a 1.3% market share in Vietnam’s banking system assets as of September 2020.
Source: ndh.vn – Translated by fintel.vn