Vietnam ready to face with typhoon Bebinca

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The Ministry of National Defense in Vietnam has mobilized nearly 528,000 people, mostly soldiers, to help local residents cope with Bebinca, the fourth typhoon to hit Vietnam so far this year, which has been forecast to make landfall in its northern and central regions on Friday morning.

According to a report on Xinhua, the ministry has also mobilized 2,700 motorized vehicles, including 35 ships, 148 specialized automobiles and 1,570 common ones, which are ready for potential search and rescue operations, according to Vietnam’s National Steering Committee for Natural Disaster Prevention and Control on Thursday.

Meanwhile, border guards in the country’s northern and central regions, from Quang Ninh province to Quang Binh province, have notified and guided over 36,300 ships and boats with a total of 137,700 people on board and 11,300 facilities used for mariculture with 14,700 people to avoid areas potentially hit by Bebinca.

The typhoon is likely to enter coastal areas from northern Hai Phong city to central Nghe An province on Friday early morning and then weaken into a tropical depression later on the same day, Vietnam’s National Center for Hydro-Meteorological Forecasting said on Thursday.

Vietnamese localities are keeping strict surveillance on dykes and reservoirs, and organizing evacuation of local residents in low-lying, coastal, and landslide-prone areas.

Natural disasters, mainly typhoons, flash floods and landslides, killed or left missing 78 people and injured 64 others, destroyed over 740 houses, damaged 18,100 other houses, and damaged 12,600 hectares of rice and other crops, causing property losses of around 1,468 billion Vietnamese dong (63.8 million U.S. dollars) in the first seven months of this year, said Vietnam’s General Statistics Office.

User experience is the key to digital marketing

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At Vietnam Online Marketing Forum, which held in HCMC, Vietnam yesterday, experts said that, as internet users can access a vast pool of information online, one of the challenges facing digital marketing companies is how to create relevant advertising that targets the right customers.

Senior manager of Nielsen Vietnam – Nguyen Phuong Thao said that greater access to smart devices and massive information online could easily intimidate users as it would be difficult to filter and verify information. VNS reported.

“Advertisers and marketers are faced with the challenge of providing information that is relevant to customer experiences,” Thao mentioned.

“There are already many tools available out there to help businesses boost digital marketing. What they need to do is to make an intervention by connecting with users and providing them with relevant user experiences,” she said.

For example, when users book an air ticket online, hotel booking advertisements should be sent to them immediately.

In order to make that intervention, businesses should be able to collect and process a large amount of real-time data using machine learning and artificial intelligence.

Nguyen Ba Ngoc, the founder and CEO of NBN Media, a marketing consultancy firm, said to enhance the effectiveness of digital marketing, companies should adopt the most appropriate model as there is no “one-size-fits-all” model for any business.

“For example, small companies with limited human resources can use a centralised marketing system as it saves costs and is consistent. As companies grow, they can apply a decentralised brand management system, which is more suitable for managing a variety of brands,” he added.

KOL and influencer marketing

Le Hai Binh, founder and chairman of Mat Bao Corp, said that more companies have been using key opinion leaders (KOL) and influencers to boost marketing on social media platforms as every “like”, “view”, and “share” on their personal pages can be seen by the public.

However, companies must know how to verify “real clicks, shares and views” to measure the effectiveness of marketing via this channel, he said.

There are three companies on the market that provide a service to help companies measure the real likes, views and shares of each post on social pages by KOL and influencers, as well as the number of people who have actually been reached by the post.

Binh recommended that companies use this service in the beginning if they prefer KOL and influencer marketing.

Thảo said that, when using influencers, the most important thing is the message to customers.

“All of the information posted by influencers should be personalised and should not ‘sound like advertising’,” she said.

She said people follow influencers because they post content that matches their interests or hobbies. Therefore, it is important for companies to find an influencer who is more relevant to the value of their brand so they can interact and connect with the right customers.

Vietnam to host International Real Estate Conference

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The International Real Estate Conference (IREC 2018) is scheduled to be held in Hanoi, Vietnam from September 5-10, stated the Vietnam Real Estate Association.

The event is expected to attract the participation of more than 300 international guests from nearly 30 countries and territories worldwide, including the leaders of real estate associations and international organizations and nearly 1,000 Vietnamese delegates. NDO reported.

IREC 2018 also aims to provide a good opportunity to connect influential global industry leaders: builders, developers, real estate professionals, and global institutional investors; explore global investment opportunities and provide market and industry knowledge through many educational sessions including latest trends, good practices, and technology, as well as leadership, entrepreneurial, motivational and marketing skills.

This will be the first time IREC organized in Vietnam. In 2015, the conference was held in the Philippines, 2016 in the Republic of Korea and 2017 in Thailand.

ASIAD Group D: Vietnam vs Nepal in second game

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Việt Nam’s U23 football team will meet Nepal in their second game of Group D in the Asian Games (ASIAD) 2018 in Indonesia on August 16.

The game will begin at 7pm (Hà Nội time) at the Wibawa Mukti Stadium in Cikarang – Followed by Vietnam News

Following the 3-0 win against Pakistan on Tuesday, Việt Nam top the group with three points, followed by Japan, Nepal and Pakistan.

According to head coach Park Hang-seo, Việt Nam will change their line-up for the upcoming game and the team has prepared carefully.

“In the recent friendly match with Indonesia, Nepal played with four defenders and competed rather actively. However, in the first match with Japan in this tournament (in which Nepal lost to Japan 0-1), Nepal sat back. In the upcoming match, I don’t know how they will play. However, we prepared carefully and are ready to take on Nepal in every situation,” said the South Korean coach.

“Nepal’s players have physical strength and durability. These are strong points of Nepal. The match with Nepal is very important. If we win, we will pass the qualifying round. I hope that they will play actively and then we will also play actively,” Park added.

He said he wasn’t worried about playing a new line up as most of the players played with each other in the AFC U23 Championship held in China in January. Meanwhile, Nguyễn Anh Đức, Đỗ Hùng Dũng and Nguyễn Văn Quyết, who are over 23 years old, are experienced players so can adapt easily.

Coach Gyotoku Kozi of Nepal announced his side aimed to play on the front foot and to take at least a point.

If Nepal draw with Việt Nam and then beat Pakistan, they will qualify for the next phase.

Japanese coach Kozi said they had only one day off before playing Việt Nam, a very important match for Nepal.

Kozi said the South Asian Football Federation Championship Final, which will be held in early September in Dhaka, was the key event of Nepal. However, if the team competed well in the ASIAD, it would be a driving force for their regional tournament.

Continue reading “ASIAD Group D: Vietnam vs Nepal in second game”

ThaiBev to engage Sabeco operations

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It attributes poor Q3 results to global macroeconomic slowdown; is cautiously optimistic about prospects

After posting disappointing Q3 results on Tuesday, Thai Beverage (ThaiBev) said on Wednesday evening it continued to remain optimistic about its growth in the upcoming quarters. Chin Yong Chang reported on Business Times.

It cited plans to double down on the Vietnam beer market as well as pinning its hopes on the upcoming Thai elections, expected to happen early next year, giving the anaemic demand for beer and spirits in the country a much-needed boost.

One of the concrete steps ThaiBev outlined in a post-earnings conference call was that it was looking to focus on its 54 per cent stake in Saigon Beer Alcohol Beverage Corp (Sabeco).

Despite acquiring the Sabeco stake in December last year, it could only begin conducting due diligence of its production facilities recently because its current CEO, Bennett Neo Gim Siong, was appointed only on Aug 1 this year.

However, it believed the Vietnam beer market would be a profitable venture for the company and was optimistic about the prospects of Sabeco.

Asked by analysts about developing synergies between ThaiBev and Sabeco, the firm said it was working on a number of areas including procurement, marketing, and R&D.

It was also exploring how best to integrate market knowledge as well as best practices in manufacturing.

Speaking on its Thailand and Myanmar markets, ThaiBev attributed the low demand for beverages – including both non-alcoholic drinks like water and green tea, and alcoholic ones like beer and spirits – to poor macroeconomic fundamentals.

It cited the poor performance of the regional agriculture sector, including the rice and fishing sectors, as being the main reason behind falling consumer disposable income.

It also added that the reduction in demand for alcoholic beverages was likely not due to changing consumer preferences, such as towards healthier drinks with less sugar content.

One-off events such as the recently concluded World Cup also did not significantly raise overall consumption of beer in ThaiBev’s markets.

The firm said it expects the domestic beer markets it is in to continue to remain challenging in the face of weak demand, as it does not see any significant shift in the disposable incomes for mass market consumers in the near future.

However, it noted that this was affecting its competitors as well as itself.

Discussing its growth strategy for the long term, ThaiBev said it was also seeking to grow its water and carbonated soft drink sales. It cited green tea as a product it was keen to grow as it had a high profit margin.

ThaiBev closed S$0.02 or 2.9 per cent lower at S$0.68 on Wednesday.

e-Commerce leader in Vietnam draws $51m pan-Asian investment

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Japanese financial services group SBI Holdings and other Asian-based companies will invest a total of $51 million in Vietnam’s online marketplace Sendo Technology, seeking to tap the country’s booming e-commerce market.

According to a report by YU SHIMADA on Nikkei, the eight investors include Daiwa PI Partners, SoftBank Ventures Korea and Beenos, which operates cross-border e-commerce services in Japan. Investment companies from Hong Kong and elsewhere in Asia also are participating in what will be one of the largest funding rounds for a Vietnamese startup. Their individual investments have not been made public.

Sendo, which debuted in 2012, is an online platform for individuals and small businesses to sell their goods — similar to Japan’s Mercari. It is one of Vietnam’s largest e-commerce companies, with over 10 million products from about 300,000 sellers. Gross merchandise sales in the three years through 2017 rose nearly twentyfold. Sendo will use the acquired funds to expand services, targeting merchandise sales of $1 billion in 2020.

Vietnam’s e-commerce market continues to grow about 30% annually. Amazon.com appears likely to expand into the country with a marketplace as well.

Bringing together their financial technologies, the investors seek to generate synergies with Sendo. SBI is investing in fintech companies around Asia and studying partnerships for settlement and financing operations. Beenos will provide its e-commerce know-how, looking into a tie-up with its own services. The financial backers aim to recoup their investment through such options as taking the Vietnamese startup public.

Sendo received nearly 2 billion yen ($18 million at current rates) in funding from three Japanese companies including SBI in 2014. Steady operations growth since then encouraged others like Daiwa and the SoftBank Group arm to join in the second round.

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Overnight interest rate doubles to 4.42%

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Interest rates on the inter-bank market have surged strongly in the past week despite the central bank’s net injection of VNĐ14.4 trillion (US$612.76 million).

According to a report from the Saigon Securities Incorporation (SSI), the rate of overnight loans last week doubled from the previous week to reach 4.42 per cent, nearly equal to the 4.75 per cent rate in the open market operation (OMO). The rise has also contributed to reducing the interest rate gap between overnight and three-month loans to only 27 basis points.

Interest rates for one-week and two-week loans also surged 1.9 and 1.7 times against the previous week.

SSI analysts attributed the interest rate hike to a net withdrawal of VNĐ60 trillion for the week ending August 3, which has reduced the liquidity in the banking system.

SSI’s report also showed that the yield of the central bank’s five-year bills has kept steady at 4.3 per cent in the past week.

During the week, the transaction volume of the bills increased by 27 per cent against the previous week. Foreign investors net bought VNĐ113 billion after they net sold in the last five weeks.

Source: VNS

Gov’t approves strategy for bank expansion by 2025

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Việt Nam aims to have at least 2 or 3 banks in Asia’s top 100 largest banks in terms of assets by 2025.

Under the development strategy of the banking sector until 2025, recently approved by Prime Minister Nguyễn Xuân Phúc, the Government also plans to have 3 to 5 banks listed on foreign stock markets by 2025.

The strategy also seeks to improve local banks’ competitiveness, enhance transparency in the banking sector and make the sector operate in accordance with international standards.

Accordingly, by the end of 2020, all banks are required to have equity capital in accordance with Basel II standards – a set of banking laws and regulations issued by the Basel Committee on banking supervision to enhance competition and transparency in the banking system and make banks more resistant to market changes.

To help State-owned banks achieve the equity capital requirements, the Prime Minister has instructed the State Bank of Việt Nam (SBV), in conjunction with the ministries of Finance and Planning and Investment, to map out and submit to the Government plans to increase capital for State-owned banks.

The new strategy also sets a goal of improving SBV’s independence, activeness and accountability for directing monetary policy, controlling inflation, supporting macro-economic stability and fuelling sustainable economic growth.

It also looks to strengthen institutional capacity and banking supervision of the central bank, expand its scope of supervision into financial corporations with parent ones.

The banking system also plans to undergo a restructuring process in the 2018-20 period with a focus on resolving bad debts and weak banks to ensure the bad debt ratio of the entire banking system is kept under 3 per cent.

Moreover, the Government also plans to reduce the cash payment proportion to less than 10 per cent by 2020 and 8 per cent by 2025, which can be done by expanding the network of automatic teller machines (ATM) and points of sale (POS) nationwide.

Other targets set forward by the strategy include finalising a legal framework for monetary policies and banks on the basis of market mechanisms and international standards, as well as improving foreign currency and gold policy management.

It also aims to enhance public access to financial and banking services, especially in rural, mountainous and poor areas.

Source: VNS

Ministry of Finance proposes to cut 51.4pc of business conditions

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The Ministry of Finance proposed to cut 51.4 per cent of the total number of business investment conditions under the ministry’s management.

The ministry also proposed to amend and supplement 16 decrees in many fields including insurance, securities, price appraisal, customs, accounting, auditing, lottery, electronic games for foreigners, casino, betting business, credit rating services and voluntary retirement fund management services.

For the insurance businesses, the Ministry of Finance proposed to abolish the conditions that insurance enterprises, foreign branches or insurance brokerage enterprises must meet upon establishment.

For Vietnamese organisations to set up insurance limited liability companies, the draft decree eliminated the condition that investors must operate in the fields of finance, banking and insurance to attract more investors to invest in the insurance market.

In the field of securities, the ministry reduced the conditions on minimum charter capital for self-trading securities activity from VND100 billion (US$4.3 million) to VND50 billion and reduced the conditions on the number of years of experience with general directors.

Source: VNS

Digital Banking Sees Prosperous Future in Vietnam

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Like the rest of emerging countries in Asia, digital banking penetration in Vietnam is on the rise. According to a survey by IDG Vietnam, 81% of respondents said they used digital banking solutions in 2017 compared to 21% in 2015.

Digital banking solutions are appreciated for their convenience and time savings and while the growth is real and strong there is still plenty of opportunities. A survey by McKinsey found that approximately 60% of customer in Vietnam would consider opening an account with a branchless digital-only bank.

Most of the banks in Vietnam are already providing Internet banking and digital payments services. Banks including Vietinbank, Vietcombank, BIDV, Agribank, Techcombank, and OCB are all allowing customers to make payments using QR code on their respective mobile banking app.

Agribank was one of the first banks to apply QR code payment through its Agribank E-mobile Banking. Trinh Ngoc Khanh, chairman of the bank’s board of members, said that one of the important tasks for the bank in the near future was to offer services based on high-tech platforms such as QR Pay, Samsung Pay and Autobank while improving services quality.

Going further, Techcombank and VIB even allow clients to remit money via social networks such as Facebook and Zalo, and withdraw cash from ATMs without cards. Meanwhile, VP Bank is utilizing IBM’s data analyzing technology to synchronize data and support customers’ behavior analysis and is providing a full digital banking experience through Timo, a platform developed by local startup Lifestyle Project Management Vietnam Ltd.

Foreign banks too are looking to tap into the Vietnam’s digital banking opportunity. Singapore’s UOB announced last week a digital banking strategy for five markets in ASEAN: Singapore, Indonesia, Malaysia, Thailand and Vietnam. UOB plans to digitize the entire banking process for its upcoming ASEAN digital bank from the onboarding to serving everyday payment needs.

Wee Ee Cheong, deputy chairman and CEO of UOB said that Vietnam represented a strategic market for the bank due to its status as one of the fastest growing economies in Southeast Asia.

“Across countries we see two trends: regulators are increasingly embracing digital, for instance, leveraging technology for know-your-customer requirements, and promotion of innovation via sandbox for fintechs, allowing them to operate within the sandbox requirements,” McKinsey said.

Vietnam strives for 95% of banks offering Internet banking and mobile banking services, and 30% implementing digital banking. The government has expressed on several occasions its ambition to facilitate and boost fintech innovation, announcing in early 2017 a major initiative to become cashless by 2020.

Since then, non-cash and contactless payments in the country have risen. Statistics from the State Bank of Vietnam showed that financial transactions through mobile phones in 2017 rose by 81% while those made online also increased by 67% from the previous year.

For Dr. Nguyen Thi Thanh Van from the Banking Academy’s International Business Faculty, orienting the development of digital technology in the sector is essential as technology can facilitate the use and accessibility of financial services.

There are currently about 78 fintech companies in Vietnam. While the majority of them (47%) operate in the field of payments, several other fintechs have emerged in recent years to help banks offer more efficient and convenient digital services.

For instance, KIU Global has built a cross-border B2B e-commerce platform with integrated enterprise resource planning, logistics, and lending aimed at serving SMEs across Southeast Asia. The company has created a credit rating system using AI which allows banks to “give marks” to SMEs in less than 10 seconds. KIU Global is running a partnership program with Vietnam’s VIB Bank.

Another startup called Weezi Digital offers biometric solutions to help financial institutions take on mobility and digitalization. As for Wecash, the company leverages mobile technology, big data and machine learning to prevent fraud and determine consumer credit worthiness.

Fintechnews

Typhoon Bebinca quickly heading to mainland

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Typhoon Bebinca is quickly heading towards the mainland of the northern and central provinces on Wednesday morning and will blanket the localities with torrential rains starting around midnight on Wednesday – Vietnamnews reported

The torrential rains, with rainfall of up to 350mm, are predicted to last until late Friday night.

The National Committee for Hydro-meteorological Forecasting said that by 10am on Wednesday, the typhoon was 450km away from the north-eastern province of Quảng Ninh’s Móng Cái City, with the strongest wind speeds near its eye reaching 90km per hour.

It was moving west-southwest at 15km per hour, the centre said.

The centre forecast that the typhoon would make landfall in provinces from Hải Phòng to Nghệ An by 10am on Friday.

Due to the typhoon’s influence, water levels could rise by two to four metres in the Hồng (Red) – Thái Bình river system and waters could swell by three to six metres in rivers from Thanh Hóa to Nghệ An between Thursday and Saturday.

Localities of Lai Châu, Sơn La, Hoà Bình, Yên Bái, Phú Thọ, Quảng Ninh, Lạng Sơn, Cao Bằng, Thanh Hóa and Nghệ An have been put on high alert for flash floods and landslides while urban areas in Hà Nội, Ninh Bình, Phủ Lý, Nam Định, Hà Nam, Hưng Yên, Quảng Ninh and Hải Phòng are forecast to face inundation, the centre said.

A team from the Central Steering Committee for Natural Disaster Prevention and Control, led by Deputy Minister of Industry and Trade Hoàng Quốc Vượng, went to localities of Hòa Bình, Sơn La, Điện Biên and Lai Châu to check their preparedness for the typhoon on Tuesday afternoon.

The inspection, carried out between Tuesday and Friday, aims to make sure that the localities take prompt action to ensure local residents are safe during the typhoon as well as to minimise property damage.

Pho named world’s 20th best food experience

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Vietnamese phở has been named the world’s 20th best food experience by world travel guide book publisher the Lonely Planet.

Phở on the Hậu River along 500 other dishes was selected as for the book Ultimate Eatlist: The World’s Top 500 Food Experiences…Ranked published on Wednesday.

The list was topped by pintxos in San Sebastian, Spain, followed by curry laksa in Kuala Lumpur and sushi in Tokyo.

Entries were nominated by Lonely Planet writers, bloggers and staffers and whittled down to a final 500 by a panel including chef and TV presenter Adam Liaw and food blogger Leyla Kazim.

Recommendations from world-renowned chefs José Andrés, Elena Arzak and Eric Ripert; television food star Andrew Zimmern; BBC MasterChef judge and chef Monica Galetti; and 15 more of the world’s top chefs and food writers were also included, CNN reported.

Per the book, the ranking is not about the perfect meal at a three-Michelin star restaurant, but how a dish tastes, its cultural significance and the importance of the location where it’s made and eaten.

“When you have a salad Nicoise in New York, you might think, oh this is nice,” Lonely Planet destinations editor Matt Phillips told CNN Travel.

The final list is based on taste, cultural importance and “the special atmosphere of the location.”

Each entry in the Ultimate Eatlist details an experience, the culture behind it and what makes it so special, Lonely Planet says.

Earlier in June, travel site Rough Guides named Việt Nam’s iconic noodle soup, phở, among the world’s 15 best foods that are easy on a globetrotter’s pocket.

A bowl of phở contains flat, soft rice noodles dipped in a fragrant beef or chicken broth flavored with different condiments. It is served with beef or chicken, shallots and chili and lemon to taste.

The soup originated from Hà Nội before it was brought to the south where people added their own influences to the dish.

Ultimate Eatlist is the follow-up to Lonely Planet’s bestselling Ultimate Travelist and is a must-own bucket list for foodies and those who love to travel. — VNS

Lonely Planet’s top 20 food experiences

1. Pintxos in San Sebastián, Spain

2. Curry laksa in Kuala Lumpur, Malaysia

3. Sushi in Tokyo, Japan

4. Beef brisket in Texas, USA

5. Som tum in Bangkok, Thailand

6. Smørrebrød in Copenhagen, Denmark

7. Crayfish in Kaikoura, New Zealand

8. Bibimbap in Seoul, South Korea

9. Pizza margherita in Naples, Italy

10. Dim sum in Hong Kong

11. Ceviche in Peru

12. Pastéis de nata in Lisbon, Portugal

13. Oysters in Freycinet, Australia

14. Cheese experiences in France

15. Jerk chicken in Jamaica

16. Lamb tagine in Marrakech, Morocco

17. Chilli crab in Singapore

18. Moules frites in Brussels, Belgium

19. Peking duck in Beijing

20. Phở on the Hậu River, Việt Nam

Illegal foreign tour guides found in Danang

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According to Dtinews, the Department of Tourism of Danang City have found 23 foreign tour guides in Danang City without work permits in the first half of this year.

The information was given by Nguyen Xuan Binh, the deputy director of the department.

Among those, up to 20 were Chinese and the three were South Korean.

The municipal authorities have fined 20 people VND322 million (USD14,636). Meanwhile, 11 people have their visas cancelled and are also temporarily banned from entering the country.

During the period, the fine of VND197 million (USD8,954) were imposed on other violations in the tourism sector. The department also found 32 people who used fake tour guide certificates.

The Ministry of Public Security set up an interdisciplinary inspection team to supervise compliance with entry, exit, and residency criteria for foreigners in Danang.

The move was made after many foreigners were reported to illegally work as tour guides in the city.

Danang currently has 623 Chinese-speaking tour guides licensed by the Department of Tourism.

Moody’s takes rating actions on 14 banks in Vietnam

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Moody’s Investors Service on Tuesday upgraded the ratings of 14 Vietnamese banks, driven by its upgrade of Vietnam’s sovereign rating to Ba3 from B1 late last week.

According to a report on VNS, under the latest rating actions on Vietnam’s banking industry, Moody’s upgraded the long-term local and foreign-currency deposit and issuer ratings of Vietcombank, BIDV and VietinBank.

Moody’s also upgraded the long-term counterparty risk ratings (CRR) and counterparty risk assessments (CRAs) of VietinBank and BIDV, and affirmed those of Vietcombank.

Besides the large-sized banks, Moody’s also upgraded the long-term foreign-currency deposit ratings of ACB, Military Bank and Techcombank. All other ratings of these three banks were affirmed.

At the same time, Moody’s also upgraded the long-term local and foreign-currency bank deposit and issuer ratings of five banks named An Bình Bank, LienVietPostBank, TPBank, VIB and VP Bank. All other ratings of these five banks were affirmed.

The long-term CRR and CRA of SHB, HDBank and OCB were also upgraded. All other ratings of these three banks were affirmed.

Moody’s has also changed the outlook for the local currency deposit and local and foreign-currency issuer ratings of eight banks — Vietcombank, BIDV, VietinBank, An Bình Bank, LienVietPostBank, TPBank, VIB and VP Bank — from positive to stable.

According to Moody’s, the baseline credit assessments (BCAs) and adjusted BCAs assigned to the 14 banks are unaffected by Tuesday’s rating actions.

The credit ratings, assessments and outlooks assigned to the other two Moody’s-rated banks in Vietnam are unaffected by the upgrade and change in outlook of Vietnam’s sovereign rating. The two unaffected banks are Sacombank and Maritime Bank.

Vietnam’s sovereign credit strength is a key input in Moody’s deposit and issuer ratings for Vietnamese banks, because the country’s credit strength affects Moody’s assessment of the Government’s capacity to provide support to the banks in times of stress.

The upgrade in Vietnam’s sovereign rating to Ba3 from B1 is underpinned by strong trends in growth, underway for the past decade, that are well-supported by a robust external sector and favorable consumption trends. This in turn has supported a stabilization in debt levels. The upgrade also reflects improvements in the health of the banking sector, albeit from relatively weak levels.

Following the upgrade of Vietnam’s sovereign rating, the foreign currency deposit ceiling is raised to B1 from B2, driving the upgrade of the long-term foreign-currency deposit rating of 11 banks.

Moody’s said that the baseline credit assessments (BCAs) of the 14 Vietnamese banks could also be upgraded if the macroeconomic and operating conditions for banks in Vietnam improve, leading to a higher macro profile for the country.

Moody’s takes rating actions on VIB

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Moody’s has upgraded the long-term local and foreign- currency bank deposit and issuer ratings of Vietnam International Bank (VIB). All other ratings were affirmed.

Moody’s has also changed the outlook for the local currency deposit and local and foreign currency issuer ratings of VIB to stable from positive.

The rating actions follow Moody’s upgrade of Vietnam’s sovereign rating to Ba3 from B1, and change in the outlook for the sovereign’s rating to stable from positive on 10 August 2018. For more information on the sovereign credit rating action, please refer to the Government of Vietnam issuer page on http://www.moodys.com.

The baseline credit assessment (BCA) and adjusted BCA assigned to VIB are unaffected by today’s rating actions.

RATINGS RATIONALE

Today’s rating actions on VIB are driven by Moody’s upgrade of Vietnam’s sovereign rating to Ba3 from B1.

Vietnam’s sovereign credit strength is a key input in Moody’s deposit and issuer ratings for the bank, because the country’s credit strength affects Moody’s assessment of the government’s capacity to provide support to the bank in times of stress.

The upgrade in Vietnam’s sovereign rating to Ba3 is underpinned by strong trends in growth, underway for the past decade, that are well-supported by a robust external sector and favorable consumption trends. This in turn has supported a stabilization in debt levels. The upgrade also reflects improvements in the health of the banking sector, albeit from relatively weak levels.

Following the upgrade of Vietnam’s sovereign rating, the foreign currency deposit ceiling is raised to B1 from B2, driving the upgrade of the long-term foreign-currency deposit rating of VIB.

UPGRADE OF VIETNAM GOVERNMENT’S RATING LED TO A WIDENING OF GOVERNMENT SUPPORT NOTCHING

Moody’s factors in the assumption of a “Moderate” probability of government support in times of need into the ratings of VIB.

Moody’s government support assumption is driven by the relative systemic importance of VIB to the Vietnamese banking system.

In light of the support assumption, the upgrade of the sovereign rating led to a one-notch widening of government support uplift to VIB’s long-term local-currency bank deposit and local and foreign-currency issuer ratings.

WHAT COULD MOVE THE RATINGS UP

The long-term ratings of VIB could be upgraded if both these two conditions are met: (1) the sovereign rating of Vietnam is upgraded, and (2) the bank posts improved stand-alone credit metrics that lead to a higher BCA.

The BCA of VIB could also be upgraded if the macroeconomic and operating conditions in Vietnam improve, leading to a higher Macro Profile for the country.

WHAT COULD MOVE THE RATINGS DOWN

The long-term ratings of VIB could be downgraded if the sovereign rating of Vietnam is downgraded, and/or if the bank’s BCA is downgraded due to a significant deterioration in its financial fundamentals. If all other rating factors are constant, the BCA would come under adverse pressure if the bank reports significantly increased problem loan ratio or significantly reduced capitalization. A material deterioration in funding and liquidity could also be negative for the ratings.

As of June 30, 2018, VIB’s total asset has reached VND127,238 billion, up 3.4% year-to-date. In the first half of the year 2018, the bank’s lending increased by 9.3 to VND87,283 billion; deposits grew 10.2% to VND75,331 billion. In 1H 2018, VIB tripled its pre-tax profit from a year earlier to VND1.151 billion, equivalent to 57% of its 2018 target.

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