Standard & Poor's has assigned Sacombank a B+/B credit rating based on its strong business position and adequate liquidity.
S&P said other criteria taken into consideration include its "adequate" risk position, "above-average" funding and "weak" capital and earnings. The agency, which assigned ratings to the Vietnamese bank for the first time last week, said the outlook for Sacombank to maintain its long-term rating was "stable."
"Sacombank's position as the second-largest privately owned bank in Vietnam supports its business position," said Ivan Tan, a credit analyst for S&P.
"The stable outlook reflects our expectation that Sacombank will maintain its financial profile amid challenging conditions and high inflation in Vietnam," said Tan. "We believe the bank management will temper loan growth with prudent risk management."
According to S&P, Sacombank is an established franchise, particularly strong among consumers and small to midsize businesses. "Like most of its peers, it is domestically focused and the bulk of its revenues come from lending," the agency said.
Sacombank's ratio of loans to customer deposits was 76 percent as of September 30, which S&P said is better than the industry average and compares favorably with larger banks that more branches. "This strength reflects Sacombank's deposit-taking efforts and effective use of its network to tap retail deposits," it added.
The agency said it viewed Sacombank's capital and earnings as a neutral factor in its assessment.
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