Standard & Poor's upgrades Techcombank outlook to stable

(Hanoi – September 11th, 2017) Standard & Poor’s Global Ratings (S&P) has upgraded its outlook rating on Techcombank to “stable”.  The agency has also affirmed its ‘BB-’ long-term and ‘B’ short-term issuer credit ratings for the bank.  



S&P’s outlook and credit ratings for Techcombank are the same as those for the government of Vietnam.  As a practical matter, these are the highest ratings that a Vietnam bank can achieve (until S&P upgrades its credit ratings for the government of Vietnam).  This is from what is commonly called a “sovereign ratings ceiling” where it is either extremely rare or not possible for banks and other companies to receive ratings higher than that of their home country.  At the time of this writing, and as published by S&P, only one other Vietnam bank has the same outlook and ratings as Techcombank (i.e. Vietcombank).

Credit ratings from internationally recognized agencies such as S&P are important in several ways for banks and their customers, both individuals and corporates.  Customers can use credit ratings as a factor to assess the level of confidence they place in a bank, such as in the context of their deposits.  Higher ratings can also allow banks to lower their costs in obtaining funds, and thus, the opportunity to offer optimal lending interest rates and pass such savings to their customers and improve banking services overall. 

S&P explained that their “stable” outlook for Techcombank reflects their view that “Techcombank will maintain its market position and superior profitability over the next 12 months as it pursues a retail-driven strategy.”  Techcombank has been implementing its 5-year transformation strategy (2016-2020) which includes a fundamental shift towards a customer-centric approach that places customers at the heart of everything the bank does with a view on creating more value for its customers. 

In addition, S&P provides that Techcombank “has adopted a balanced approach toward profit enhancement and risk-taking.”  Techcombank’s profit before tax increased by 96.2% from 2015 to 2016, and by 72.3% for the first half of 2017 as compared to the same period in 2016.  

Techcombank’s risk management strategy cited by S&P is also tied to “People Excellence,” a core pillar the bank adopted in 2015.  Recognizing that the banking industry faces market, operational and fraudulent risks, Techcombank focuses on acquiring, retaining and developing talent who are dynamic and knowledgeable to mitigate such risks, offer solutions and make the bank more competitive.
Finally, S&P's latest rating sets out their view that “the bank will maintain its status as a leading privately owned bank in Vietnam.”  The S&P upgrade reinforces Techcombank’s confidence and commitment to its strategy towards becoming the best bank in Vietnam.

About Standard & Poor’s:

S&P Global Ratings and its predecessor organizations have been in business for more than 150 years. S&P is the world’s leading provider of credit ratings, which are essential to driving growth, and providing market transparency. Operating in 26 countries around the globe, their analysts, managers and economists assess the factors and trends that affect creditworthiness.