CIRCULAR ON RATING CREDIT INSTITUTIONS, FOREIGN BANK BRANCHES ISSUED

The State Bank of Viet Nam issued Circular No. 52/2018/TT-NHNN on rating credit institutions and foreign bank branches from 2019 onward.Credit institutions and foreign bank branches are divided into six groups including (1) large-scale commercial banks with a quarterly average asset value exceeding VND100 trillion; (2) small sized commercial banks with a quarterly average asset value equal to or lower than VND100 trillion.

Other groups consist of (3) foreign bank branches, (4) financial companies, (5) financial leasing companies and (6) co-operative banks.

Based on their scores across the indicators, credit institutions and foreign bank branches are classified into one of the five categories, including Good (A), Fair (B), Medium (C), Poor (D), or Very Poor (E).

Criteria system for rating credit institutions and foreign bank branches includes capital, asset quality, management, liquidity and earnings and sensitivity to market risks.

The Circular takes effect since April 1, 2019.

Source: VGP