AsemconnectVietnam - The international credit rating agency Moody's has just announced to maintain HDBank's deposit credit rating and issuer rating at B1, saying that HDBank's bad debt ratio is lower than the industry average, high profitability effective and sustainability.

Moody's also continued to give HDBank a rating of B1 for long-term counterparty risk in domestic and foreign currencies, and long-term counterparty risk assessment was maintained at B1. Issuer credit ratings in local and foreign currencies, short-term deposit ratings in local and foreign currencies all maintained at B1.
“The maintenance of HDBank's credit rating and baseline assessment (BCA) reflects the bank's stable financial capacity throughout the economic cycle, thanks to its diversified loan portfolio, strong profitability performance and a solid capital base," the rating agency's announcement said.
Specifically, according to Moody's assessment, HDBank's bad debt ratio (NPL) as at 31/3/2023 was 1.9%, lower than the average NPL ratio of 2.3% of ranked Vietnamese banks. Moody's also believes that prioritizing credit to individual customers, small and medium-sized enterprises has helped HDBank reduce the risk of portfolio concentration and limit the sudden increase of bad debts.
Commenting on profitability, Moody's said that in the first 3 months of 2023, HDBank's net return on assets (ROA) ratio reached 2.4%, higher than the average ROA of only 1.7% of ranked Vietnamese banks.
Regarding the credit rating outlook, Moody's expressed a cautious view about the possible impacts in case HDBank participates in the restructuring of a commercial bank and the growth rate of HDBank's outstanding loans in recent years.
According to Mr. Pham Quoc Thanh, General Director of HDBank, it is appropriate for Moody's to have a cautious view, but HDBank also has strategies for this task. As for the growth rate of outstanding loans, HDBank is proud of its very good asset quality thanks to its strategy of lending for agricultural and rural development and chain financing.
In the first quarter of 2023, HDBank recorded more positive business results than market expectations, with pre-tax profit of VND2,743 billion. Notably, capital adequacy ratios, bad debts, and profitability ratios continued to remain at good levels in the industry. Capital adequacy ratio (CAR) according to Basel II standards of HDBank reached 12.5%, of which tier 1 capital adequacy ratio reached 10%.
The consolidated bad debt ratio is 1.9% and the individual bad debt ratio is 1.5%, lower than the bad debt ratio of the whole industry (about 2.9% by the end of February 2023). Operating expenses are effectively managed, with an expense/income ratio of 34.6%, a sharp improvement from 39.3% at the end of 2022.
N.Nga
Source: VITIC/Tinnhanhchungkhoan