Credit ratings agency Moody’s has upgraded the baseline credit assessments (BCAs) of 12 Vietnamese banks, thanks to Vietnam’s strong economic growth and the banks’ progress in dealing with bad debt. The upgrade of BIDV, Vietcombank and Vietinbank’s BCAs largely reflect their improvements in asset quality, explained Moody’s, elaborating that funding and liquidity for these banks are stable as a result of their relatively lower reliance on market funds. Meanwhile, the upgrade of ABBank, ACB, MB, OceanBank, TPBank, VIB and Techcombank’s BCAs was due to improvements in their standalone credit strengths, particularly progress in resolving bad debt, and a strengthening of their capitalisation as in the case of OceanBank, TPBank and Techcombank. Moody’s expects profitability for these seven banks to improve over the next 12-18 months as the burden of credit costs reduces. In the case of VPBank, the upgrade takes into account its high profitability and strong capitalisation, which offset the high credit risks from its consumer finance portfolio. For HDBank, the credit rating agency’s upgrade of its BCA was driven the bank’s capitalisation and profitability, as well as the impending merger between HDBank and the unrated PGBank. In a rating action announced on October 30, Moody’s also affirmed the BCAs of Maritime Bank, Sacombank, SHB and LienVietPostBank, with the expectations that these banks’ credit profiles will broadly remain stable over the next 12-18 months. The solvency of these banks is modest compared to that of other rated Vietnamese banks, but somewhat balanced by their funding and liquidity, said Moody’s.