Customers at a transaction point of VietinBank. Illustrative image (Photo: VNA)

It upgraded the Long-Term Foreign-Currency Issuer Default Ratings (IDR) of three major banks, namely VietinBank, Vietcombank, and Agribank, from BB to BB with a "Stable" outlook. Additionally, the Military Bank (MB)'s credit rating has also been elevated to BB with a "Stable" outlook.

With improving business environment, Fitch Ratings also raised the operating environment (OE) scores for the Vietnamese banking system, anticipating that the economy will continue to recover and grow robustly over the medium term.

Credit conditions have gradually eased since the beginning of this year, thanks to decisive and appropriate monetary policy actions. At the same time, Fitch anticipated the financial efficiency of the Vietnamese banking sector to recover next year, buoyed by rising credit demand and improved net interest margins of commercial banks.

The non-performing loan (NPL) ratio is also expected to improve as the economy rebounds. Fitch forecast a GDP growth of 6.3% for Vietnam in 2024. Additionally, stable asset quality indicators and enhanced profitability contribute to the improved credit ratings for these banks.

Dr. Vo Tri Thanh, member of the National Financial and Monetary Policy Advisory Council, said the upgrade holds significance as it enables banks to access international funding sources more easily, leading to cost saving through securing capital at more favourable interest rates.

He said with the current credit rating, there is a need for further improvement in financial health, position and brand to strengthen investor confidence, expand business opportunities, and improve business prospects./.