BAC A BANK is rated "A-" with a "Stable" rating outlook.

In early April 2024, FiinRatings - a member of FiinGroup and a partner of S&P Global Ratings in Vietnam - rated BAC A BANK's Long-Term Issuer Credit Rating at 'A-' with a "Stable" Rating Outlook.

“We rate BAC A BANK's business stability at 'Adequate', contributed by its modest scale but maintained stability in the industry over many years; the consistent maintenance of lending policies towards essential sectors that are less sensitive to economic fluctuations, along with the strategy of expanding the customer base in the medium term.”

According to FiinRatings' first Credit Rating Report, BAC A BANK has its own advantages to receive an "A-" score with a "Stable" outlook in the next 12 - 24 months. The first point is that BAC A BANK's risk position is assessed at "Very Good", demonstrated through clearly defined and consistent risk management, combined with a consistent risk appetite aimed at both individual and corporate customers with low risk levels. BAC A BANK's experience and history of asset quality management are also always good and more cautious than the industry average, along with a potential risk level assessed lower than the industry thanks to a relatively simple business model and focus on lending.

“We assess that BAC A BANK has maintained a more stable asset quality and credit costs than the industry average in the context of many challenges in general business conditions. During the period 2019-2023, BAC A BANK had an average annual loan growth rate of 7.2%, lower than the industry average of about 15%. However, during this period, BAC A BANK has controlled the problem debt ratio quite well (including Group 2 debts and bad debts - Groups 3,4,5) and always maintained a very low bad debt ratio. Although the bad debt ratio tends to increase in 2023 (along with the trend of the banking industry), BAC A BANK still maintains the lowest bad debt ratio in the system, at 0.92% as of December 31, 2023, lower than the industry average of 2.3% at the same time”. Regarding provisioning, BAC A BANK's bad debt coverage ratio has always been maintained at a level much higher than the industry average, and tends to increase along with the industry, especially in the period 2020 onwards when the State Bank continuously issued regulations guiding the restructuring of loans affected by the Covid-19 pandemic. As of December 31, 2023, the Bank's bad debt coverage ratio reached 131.0% (2022 data: 203.8%; 2021 data: 161.8%), while the industry average was 63.7% (2022: 68.9%; 2021: 60.9%). This ratio of BAC A BANK is at a level equivalent to the leading private banking group and banks with high-yielding asset portfolios. Provision expenses increased by 35.7% year-on-year, equivalent to the growth rate of the problem debt group. Debt recovered after provisioning decreased by 34.0% year-on-year to VND93 billion. In addition, BAC A BANK's credit cost ratio increased to 0.2% (2022: 0.1%; 2021: 0.3%). FiinRatings estimates that this ratio will be maintained around 0.2 - 0.3% in the period of 2024-2025. “With the orientation of lending to sectors encouraged by the government, with low risk and volatility such as high-tech agriculture and social security, it has helped strengthen BAC A BANK's risk position in nearly 30 years of development. The bank has been maintaining a stable loan portfolio with more than half of the portfolio structure coming from essential and less volatile industry groups (processing and manufacturing industry accounts for 37%; agriculture, forestry and fishery accounts for 18%) - focusing on large enterprises in the industry with good credit quality and in the typical lending value chain of BAC A BANK. In addition, we always accompany and advise on investment for customers in this industry, so we have a comprehensive understanding of the business situation as well as closely monitor the cash flow of customers." - Mr. Chu Nguyen Binh, Deputy General Director of Bac A Commercial Joint Stock Bank said. Capital and liquidity profile 'Adequate' thanks to the Bank's increased capital structure stability, and continued to benefit from a highly engaged retail customer base. BAC A BANK's stable capital ratio, according to FiinRatings, although slightly decreasing in the 2019-2023 period and reaching an average of 100.1%, is still maintained at a higher level than the industry average of 98.8%. The ratio of highly liquid assets to short-term wholesale capital remains above 1.0 times. With good liquidity, stable customer deposits combined with strong interest rate reduction policies from the second quarter of 2023 to present, BAC A BANK's capital cost in 2024 - 2025 is expected to gradually decrease to a threshold approaching the industry average.

Other assessment factors: Business position; Capital structure and Profitability of BAC A BANK are rated as “Average” by FiinRatings based on factors such as the scale and business diversity of the Bank being more modest than the industry average. For more information about FiinRatings and FiinRatings’ initial issuer rating report on BAC A BANK, as well as prospects for future rating upgrades or downgrades, please visit the bank’s website: www.baca-bank.vn

Source: https://www.baca-bank.vn/SitePages/website/tin-tuc.aspx?ttid=1069<tid=17&pb=False&s=TT&tt=BAC%20A%20BANK%20%C4%90%C6%AF%E1%BB%A2C%20X%E1%BA%BEP%20H%E1%BA%A0NG%20T%C3%8DN%20NHI%E1%BB%86M%20M%E1%BB%A8C