Fitch assigns ANZ Vietnam first-time 'BB' rating; outlook positive
The Hanoitimes - ANZ Vietnam's Long-Term Foreign Currency IDR is capped at the Vietnamese Country Ceiling, which is ‘BB’ now.
Fitch Ratings has assigned a first-time Long-Term Foreign-Currency Issuer Default Rating (IDR) of 'BB' and Long-Term Local-Currency IDR of 'BBB-' to ANZ Bank (Vietnam) Limited (ANZV). The outlook is positive.
“The Positive Outlook reflects our Outlook on the Vietnam sovereign (BB/Positive),” Fitch said in a note on Monday.
ANZV's Long-Term Foreign Currency IDR is capped at the Vietnamese Country Ceiling, which is ‘BB’ now.
| An ANZ branch in Vietnam|
The rating agency said ANZV's ratings are support driven. Fitch believes that the bank's parent Australia and New Zealand Banking Group Limited (ANZ, AA-/Negative/aa-) has a strong ability to extend extraordinary support to its Vietnam subsidiary - given the parent's credit profile, and ANZV's small asset base that accounted for only around 0.2% of the parent's total assets at end-2018.
Nevertheless, Fitch analysts believe that currency transfer and convertibility risks, as reflected in Vietnam's Country Ceiling of 'BB', could represent a significant constraint on ANZV's ability to receive support from its Australia-based parent. This is reflected in the Support Rating of '3' that indicates a moderate probability of support from its higher-rated Australia-based parent, in times of need.
“Fitch regards the risk of sovereign restrictions on local-currency repayments as lower than that of foreign-currency restrictions. We also expect parental support to be robust, assuming no very high levels of sovereign or macroeconomic stress. Hence, ANZV's Long-Term Local-Currency IDR is rated two notches above Vietnam's sovereign rating,” said the note.
The rating’s view on ANZ's propensity to provide support to ANZV is based on ANZV's relatively limited role in the group, compared with larger subsidiaries in more strategically important markets.
- Covid-19 pushes Vietnam fiscal deficit to nearly 6% of GDP
- Lack of credit culture poses risks to Vietnam bond market: ADB
- Vietnam finance ministry pushes for speedier privatization of SOEs
- Vietnam spends over US$752 million on Covid-19 fight
- IMF trims Vietnam GDP growth forecast to 1.6% in 2020
- Stable outlook expected for Vietnamese dong
- Vietnam banking sector to suffer in 2020 before rebounding in 2021
- Effective gov’t support mitigates Covid-19 impacts on Vietnam financial industry
- Vietnam stock market predicted to go sideways after strong performance in Sept
- Consumers in Hanoi use more multiple e-wallets than in other locations: Survey
VEPR revises down Vietnam's 2020 GDP growth forecast to 2.8%
Hanoi takes numerous measures to tackle air pollution
Hanoi to expand public transport network in period 2021-2030
Kinh te & Do thi calls for support for victims of historic flooding in central Vietnam
Hanoi completes traffic infrastructure to develop satellite urban areas: Official
Close-up of first train of Hanoi’s second metro line put on rails
Apple partner Pegatron mulls US$1-billion investment in hi-tech projects in Vietnam
Hanoi’s weekend pedestrian streets allowed to reopen from September 18
European investors propose US$1 billion logistics project in Vietnam