Moody’s upgrades ABBank to B1, maintains positive outlook

Moody’s upgrades ABBank to B1, maintains positive outlook

Moody’s Ratings has upgraded ABBank’s long-term foreign- and local-currency deposit and issuer ratings from B2 to B1.

Moody’s has upgraded the lender’s credit rating from B2 to B1 while maintaining a positive outlook. — Photo courtesy of the bank

 Moody’s Ratings has upgraded ABBank’s long-term foreign- and local-currency deposit and issuer ratings from B2 to B1.

The agency maintained a positive outlook, citing improvements in the bank’s asset quality, profitability, capital strength, and ability to withstand financial risks.

It also upgraded the lender’s baseline credit assessment from b3 to b2 and its long-term counterparty risk ratings from B1 to Ba3.

The positive outlook reflects Moody’s expectation that ABBank’s planned capital raising in the first half of 2027 will further strengthen its creditworthiness.

Moody’s said the upgrade reflects improved asset quality and profitability, while the capital increase completed in mid-2026 has strengthened the bank’s capacity to absorb losses.

ABBank’s problem loan ratio, which includes non-performing loans and Vietnam Asset Management Company bonds, fell to 1.2 per cent in June 2026 from 5.3 per cent a year earlier after it fully wrote off these bonds.

The agency also assessed the risk of further loans becoming non-performing as low, with special-mention loans accounting for 0.7 per cent of total loans.

ABBank’s capital position also improved after it increased its capital to more than VNĐ16 trillion.

Its ratio of tangible common equity to risk-weighted assets rose to 10.5 per cent in June 2026 from 8.8 per cent in December 2025. Moody’s expects this position to strengthen further over the next 12–18 months as the bank raises additional capital and retains profits.

The bank’s profitability improved, with its annualised return on tangible assets rising to 1.9 per cent in the first half of 2026 from 1.3 per cent in 2025. Moody’s expects profitability to fall slightly over the next 12–18 months though stronger than in previous periods.

It also improved ABBank’s governance issuer profile score from 4 to 3, citing a greater capacity to absorb losses and reduced concentration in corporate lending.

The rating upgrade comes as ABBank steps up changes to its operations and strengthens its finances to support further growth.

The State Bank of Vietnam has approved ABBank’s plan to raise up to VNĐ10.7 trillion in additional charter capital, increasing it by 67 per cent from VNĐ16.1 trillion to VNĐ26.8 trillion.

This is expected to help the bank meet capital adequacy requirements, expand lending, and pursue its long-term development plans.

An bank spokesperson said: “Moody’s rating upgrade is a positive recognition of ABBank’s transformation and reinforces our commitment to further strengthening our capabilities in this new phase of development.

“Alongside bolstering our financial foundation and corporate governance, ABBank will remain focused on developing retail banking, improving products, services, and every touchpoint, ensuring our progress is reflected in the customer experience.” 

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