Outlook on Vietnam Eximbank revised to Stable from Negative

SINGAPORE - S&P Global Ratings has revised to stable from negative its outlook on Vietnam Export Import Commercial Joint Stock Bank (Eximbank), also affirming its 'B+' long-term and 'B' short-term issuer credit ratings on the bank.

S&P said the revision reflected its view that the resilience of Eximbank's financial profile had improved on the back of a solid rebound in profitability in 2016 and 2017, and the expected benefit from a restructuring of its business and risk management.
 “In our view, Eximbank's new management team has reinvigorated the bank with a well-executed restructuring plan,” S&P said.
 “The plan primarily realigns the bank to its traditional strengths in trade financing and institutes stricter risk management and cost controls.”
 S&P said it believed Vietnam's banking system still faced a volatile operating environment and systemic credit risks, reflecting high private-sector debt, low-income levels, and legacy-stressed assets in the form of Vietnam Asset Management Co. (VAMC) bonds.
 “In our view, Eximbank has made notable progress to resolve its legacy NPLs and is working toward complete resolution of its VAMC bonds, likely by 2020.
 “We consider the bank's prudent loans growth target of 12%, compared with the industry's 17%-19% average, as reflctive of the management's focus on selective, profitable growth versus volume-driven lending. www.standardandpoors.com (ATI).