Recently, the rating and outlook for long-term foreign currency issuer at B2 Stable of Saigon – Hanoi Commercial Joint Stock Bank (SHB) has been maintained by Moody’s Investors Service.

On December 18, 2019, Moody’s issued Press Release about maintaining sovereign rating of Vietnam at Ba3, and on the same day, changed outlook of sovereign rating from “Stable” to “Negative”.

According to Moody’s, the reason for outlook downgrade is the ongoing risk of payment delays on some of the government’s indirect debt obligations, in the absence of more tangible and significant measures to improve the coordination and transparency around debt management within the administration. Moody’s assesses that the late payments reflect an administration problem rather than a financial weakening. The delayed payment shows institutional and administrative weakness, including complicated administrative procedures which prevents the prompt and smooth payment.

However, Moody’s maintained Vietnam’s sovereign rating at Ba3 for foreign and domestic currency issued debts and unsecured senior debts. Rating for foreign-currency long-term bond was maintained at Ba1. Maximum rating for deposit and domestic currency bond is still Ba3. Vietnam’s Ba3 rating is given by Moody’s based on strong growth potential, economic diversity which support the shock absorption of Vietnam, including the prolonged slowdown in global trade. Moody’s expects direct debt burden of the government will decrease gradually, to about 48% GDP in 2020 from nearly 53% in 2016.

On December 19, 2019, Moody’s announced the change in rating outlooks of Vietnam banks, in which SHB’s rating and outlook of long-term foreign currency issuer was maintained at B2 Stable. This demonstrates that SHB is operating stably, safely and developing sustainably.