BIDV Increases Int'l Standards on Business Activities

With a strategy to apply optimal international standards to its business activities, the Bank for Investment and Development of Vietnam (BIDV) has signed a contract and hired the international prestigious credit rating, the Moody Investor’s Service, to appraise and rate the bank. This is the first enterprise in Vietnam to receive a rating assignment from an international prestigious credit rating organisation like Moody’s.

 

According to Moody’s ratings, long-term local and foreign currency deposits were rated Ba1 and B1 respectively. Long-term issuer ratings in local and foreign currency were assigned at Ba1 and Ba3 respectively. Short-term deposits and debt ratings were assigned at Not Prime. The outlook for all these ratings is Stable. And the bank financial strength rating (BFSR) of E was assigned, with a Positive Outlook.

 

The bank financial strength rating of E reflects the bank’s future efforts to improve asset quality and liquidity to the common benchmark, but the positive rating outlook recognizes BIDV’s strengthening profitability.

 

BIDV’s pre-provision profitability on risk-weighted assets (Moody’s estimate: 2.7 per cent) is higher than the E peer group’s median value of 1.9 per cent. The introduction of risk-based pricing, enhanced profitability in the corporate sector, and favourable factors from supply and demand relations, should help the bank to back up profitability and support the bank’s ability to provide for its problem loans.

 

Set up nearly 50 years ago, BIDV, the successor of the Vietnam Building Bank, is the leading commercial bank in Vietnam. From 1996 to date, BIDV has been the first commercial bank to have international audits and in 2001 BIDV is the first bank to receive the quality management certificate ISO 9001:2000. In the recent five years, the bank recorded an average annual growth rate of 18 per cent. This credit rating results will be used for the new bond issuance, which is set for May.