Moody's has assigned HDBank a B1 credit rating, recognizing its low non-performing loans and high operational efficiency.

International credit rating agency Moody's has announced the maintenance of HDBank's deposit rating and issuer rating at B1, noting the bank's lower non-performing loan ratio compared to the industry average and its high profitability and sustainability.

Moody's also reaffirmed HDBank's B1 long-term counterparty risk ratings in both local and foreign currencies, maintaining the B1 risk assessment for long-term counterparty risk. The issuer credit ratings in both local and foreign currencies, as well as the short-term deposit ratings in both local and foreign currencies, all remained at the B1 level.

"The maintenance of the credit ratings and the assessment of the baseline credit assessment (BCA) for HDBank reflect the bank's stable financial capacity throughout the economic cycle, thanks to its diversified loan portfolio, strong profitability, and solid capital foundation," the agency's announcement stated.

Specifically, according to Moody's assessment, HDBank's non-performing loan (NPL) ratio as of March 31, 2023, was 1.9%, lower than the average NPL ratio of 2.3% for rated banks in Vietnam. Moody's also noted that prioritizing credit provision to individual customers and small and medium-sized enterprises helped HDBank reduce concentration risk in its loan portfolio and limit a sudden increase in non-performing loans.

Regarding profitability, Moody's noted that in the first three months of 2023, HDBank achieved a return on assets (ROA) of 2.4%, higher than the average ROA of 1.7% for rated banks in Vietnam.

Regarding the credit rating outlook, Moody's expressed a cautious view on the potential impact of HDBank's participation in the restructuring of a commercial bank and the bank's loan growth rate in recent times.

According to Mr. Pham Quoc Thanh, CEO of HDBank, Moody's cautious view is appropriate, but HDBank has strategies in place for these tasks. In terms of loan growth rate, HDBank is proud of its strong asset quality, thanks to its strategy of lending to agricultural and rural development along with value chain financing.

In the first quarter of 2023, HDBank achieved positive business results that exceeded market expectations, with a pre-tax profit of 2,743 billion VND. Notably, the bank's capital adequacy ratios, non-performing loan ratios, and profitability ratios continued to be at good levels within the industry. HDBank's capital adequacy ratio (CAR) under Basel II stood at 12.5%, with a Tier 1 capital adequacy ratio of 10%.

The consolidated non-performing loan ratio was 1.9%, and the stand-alone non-performing loan ratio was 1.5%, lower than the industry's non-performing loan ratio (around 2.9% as of the end of February 2023). Operating expenses were effectively managed, with a cost-to-income ratio of 34.6%, significantly improved from 39.3% at the end of 2022.