Fitch Assigns Home Credit Vietnam First-Time 'B+' Rating
Fitch Ratings has assigned a long-term Issuer Default Rating (IDR) of “B+” and a short-term IDR of “B” with stable outlooks to consumer finance provider Home Credit Vietnam.
Home Credit Vietnam’s ratings are based on Fitch’s assessment of the company’s standalone credit profile and reflect the company’s financial performance and its position in a growing market that is more prone to business and economic volatility.
The rating is the same as Fitch’s for Agribank, Vietinbank and Vietcombank in 2017.
Moody’s Investors Service, meanwhile, assigned a “B3” corporate family rating (CFR) to Home Credit Vietnam with a stable outlook last May.
Home Credit Vietnam is the first non-bank financial institution (NBFI) in Vietnam that Fitch and Moody’s have rated and is the first in the country to receive international credit ratings.
Ratings from Fitch and Moody’s are objective and allow professional financial investors to cross-check institutions’ prestige and financial strength, lessening risk in investment decisions.
Home Credit Vietnam being the first NBFI with such ratings expresses its information transparency and also provides customers with a base for selecting the best financial services and plays a key role in boosting stability in Vietnam’s consumer finance market.
The market has seen robust foreign capital inflows over recent years and several Vietnamese banks have planned to establish consumer finance arms to gain a greater share of a market that is expected to grow 29 per cent annually.
Local consumer lending activities have been forecast to grow vigorously for at least the next 12 months, from current outstanding debts of more than $26 billion to around $44 billion at the beginning of 2019. The ratio of consumer credit to total outstanding loans in the country’s banking system was estimated at 18 per cent last year, up from 12.3 per cent in 2016.
The consumer finance market is expected to boom since consumers are now familiar with it and recognize its convenience, local analysts have said.
(by Hong Nhung. Vietnam Ecomomic Times)