Moody's assigns first-time B2 ratings to VRB

TRUC LINH

A customer conducting transactions at VRB

Recently Vietnam - Russia Joint Venture Bank (VRB) has been rated by Moody’s with long-term bank deposits and long-term issuer ratings at B2, and stable outlook.

Moody’s Investors Service has recently assigned first-time B2 long-term deposit and issuer ratings to Vietnam - Russia Joint Venture Bank (VRB). Moody’s has also assigned to the bank a b2 Baseline Credit Assessment (BCA) and adjusted BCA. The rating outlook is stable.

Moody’s ranks the long-term issuer ratings of VRB at B2 based on its high capital adequacy ratio (19 percent as of 30 June 2020), the highest among Moody’s-rated domestic peers. With the expected credit growth, in the next 12-18 months, the capital adequacy ratio is still expected at a high level in the market.

VRB’s b2 BCA is underpinned by bank’s strong capitalisation, which will likely remain above industry. In 2020, the Vietnam - Russia Joint Venture Bank completed the restructuring for the period of 2007 - 2020 with good results, particularly: NPL ratio decreasing to below 2 percent, operational safety ratios are ensured in accordance with regulation. VRB has basically completed the internal control model and maintained the capital adequacy ratio in accordance with the State Bank’s Circular 41/2016/TT-NHNN. Regarding risk management activities, VRB actively implements the application of ICAAP (Internal Capital Adequacy Assessment Process) and builds a Risk Management framework under the Basel II.

In addition to the good control of credit quality and capital adequacy ratio, VRB has always provided support to businesses and individuals affected by the Covid-19 pandemic through policies on reducing lending interest rates, restructuring repayment period and interest exemption or reduction. In 2020, VRB’s “Credit program for import - export enterprises” was recognised by the Intellectual Property Association as Top 20 Vietnam Gold Products for its strong points in connecting trade between Vietnam and the Russian Federation, quick procedure and cost-effectiveness.

2020 was the first year VRB was rated by Moody’s. VRB is a joint-venture bank established by JSC Bank for Investment and Development of Vietnam and the Russia-based Bank (VTB) in 2006. BIDV and VTB each hold a 50 percent stake in VRB.