7 November 2024 – Vietnam Technological and Commercial Joint Stock Bank (“Techcombank” or the “Bank”) reported on 2024 annual rating assessment by S&P Global Ratings (“S&P”), which re-affirmed the Bank’s ‘BB-’ long-term and ‘B’ short-term issuer credit rating with a ‘Stable’ outlook.
RATING HIGHLIGHTS
"We are delighted to see S&P Global Ratings recognize the progress made by the Bank across a number of dimensions, including superior profitability, stable capitalisation and asset quality, and a diversified, low-cost deposit base supported by innovative products and our best-in-market digital customer experiences.
S&P’s latest update represents a more positive perspective on Techcombank’s operating environment, reflecting Vietnam’s faster GDP growth, as well as the Bank’s loan book quality, which has been resilient to the recent economic downturn while both ratings and outlook have been maintained. S&P has also revised up their rating upgrade scenario and this is aligned with the Bank’s current strategy to further diversify our credit book in the future." - Alex Macaire, Techcombank CFO
On 6 November 2024, S&P Global Ratings released its annual research update on Techcombank, affirming the Bank’s ‘BB-’ long-term and ‘B’ short-term issuer credit rating and ‘Stable’ outlook, which is higher than the ‘b+’ anchor of the banking sector.
In this round of research update, S&P highlighted:
In its assessment, S&P emphasised Techcombank’s continued superior profitability, which it expected to support above-average loan growth. For the record, Techcombank has been able to generate an average of 3% core earnings to average adjusted assets in the past four years, significantly higher than 1.0-1.5% of the sector average. The drivers, as S&P acknowledged, were “a high-yielding loan book, a large share of low-cost deposits, and sizable noninterest income”.
On asset quality, S&P noted that it expects the Bank’s non-performing loans (NPL) to improve gradually over the next 12-18 months. This will come as Vietnam’s GDP growth accelerates and the country’s real estate sector further recovers in 2025. According to S&P and many analysts (following the Bank’s 3Q24 results), the recovery of the real estate sector will particularly benefit Techcombank given the characteristics of its business-model. S&P also recognised that Techcombank’s real estate credit book has proven resilient to the recent downturn, with the sector’s NPL ratio remaining below the Bank’s headline NPL ratio.
An important part in S&P’s latest assessment is Techcombank’s funding mix with the rating agency giving credit to the Bank’s diversified funding sources, longer maturity profiles and lower funding costs. S&P also believes that Techcombank will “continue to attract diversified, low-cost deposits through innovative savings products and an enhanced digital banking experience. This will help the Bank maintain one of the highest ratios of current accounts and savings accounts in the industry and low funding costs.”
Lastly, S&P has revised its upgrade scenario for Techcombank, stating that it could “raise the ratings” if the Bank’s risk-adjusted capital ratio (RAC) improves sustainably over the next 12-18 months. This is a significant shift by S&P to a more positive perspective compared to its last assessment of the Bank, which stated that “un upgrade is unlikely”. Techcombank’s management views this upgrade scenario to be in line with the Bank’s communicated strategy to further diversify its credit book. This diversification will improve the Bank’s risk weight-adjusted asset dynamic and help its to optimize this ratio and support the case for an upgrade.
About Techcombank (Ticker: TCB VN, HOSE)
Vietnam Technological and Commercial Joint Stock Bank (Techcombank) is one of the largest joint stock banks in Vietnam, and a leading bank in Asia, with a vision to “Change banking, Change lives”. The Bank pursues a proven customer-centric strategy in providing a broad range of retail and corporate banking solutions and services to help financially empower its customers. Techcombank has ~14.8 million retail and corporate customers, which it serves through a market-leading digital banking platform and mobile app, and an extensive network of transaction service outlets at locations across Vietnam. The Bank’s ecosystem approach, co-created through partnerships in multiple key economic sectors, adds further scale and differentiation in one of the fastest growing markets in the world.
Techcombank is rated AA- by FiinRatings, Ba3 by Moody’s and BB- by S&P, leading among Vietnam joint stock commercial banks.
Public relations contact: Nguyen Thi Bich Thuy Email: thuyntb5@techcombank.com.vn |
Investor relations contact: Investor Relations Department Email: ir@techcombank.com.vn |
Hanoi, October 17, 2024 – Techcombank, one of Vietnam’s leading financial institutions, today announced that it has implemented the Databricks Data Intelligence Platform to drive its data and AI transformation across the organization.
[Hanoi, 9 August 2024] FiinRatings has upgraded the Long-Term Issuer Credit Rating on Vietnam Technological and Commercial Joint Stock Bank (“Techcombank” or “the Bank”) to ‘AA-’ from ‘A+’, while maintaining the Bank’s ‘stable’ rating outlook. Vietnamese banking sector rating stands at “a-”.
