Fitch affirms Standard Chartered Vietnam 'BB' rating, outlook positive

Fitch Ratings has affirmed Standard Chartered Bank Vietnam a long-term foreign currency issuer default rating (IDR) at 'BB' and its long-term local currency IDR at 'BBB-' while the outlook is positive.

Standard Chartered Vietnam's rating is driven by the expectation of support from its parent, Standard Chartered Bank (Singapore) Limited, which poses a strong rating of A+ and the outlook at stable. Fitch said the parent firm has strong propensity to support the wholly owned entity, given the shared branding, highly integrated operations and the bank's growing strategic importance to the group.

Nevertheless, Fitch Ratings said propensity of the parent firm to support the Vietnamese entity is currently capped by transfer and convertibility risks in Vietnam, indicated by its Country Ceiling of 'BB'.

Regarding capital and funding supported by the parent firm, Fitch said Standard Chartered Vietnam received $60 million of tier-2 capital injection from its Singaporean parent firm in September 2023, following another of $120 million in August 2021. This underscores the group's commitment towards the bank and the rating agency expects the parent to remain forthcoming in supporting the Vietnamese bank's robust growth aspirations.

Standard Chartered Vietnam's funding profile also benefits from its strong parental linkages, allowing "it to attract inflows of deposits from its institutional clients from the region over the years," according to Fitch.

The “positive outlook” on the IDRs indicates that on the sovereign, as the ratings are likely to be upgraded if the country's sovereign rating and Country Ceiling are upgraded.