Moody’s retains B1 rating for consumer lending FE Credit, outlook negative
Moody's Ratings has retained its B1 long-term corporate family rating (CFR) for VPBank SMBC Finance Company Limited, a consumer lending firm in Vietnam also known as FE Credit.
Moody’s announced the information last weekend, after completing a periodic review of the ratings for FE Credit. “The ratings and assessments of FE Credit, including the B1 long-term corporate family rating (CFR) and caa1 standalone assessment, reflect the company's exposure to high asset risks, its weakening capitalization and its moderate funding profile,” Moody’s said.
Additionally, the outlook of FE Credit, is negative, reflecting uncertainty surrounding FE Credit's ability to improve its asset quality and profitability meaningfully, Moody’s stressed.
The rating agency highlighted FE Credit’s issues, including the execution risk associated with its de-risking plans, low provision coverage, and the challenges posed by elevated credit losses on its capitalization.

FE Credit offers loans at a mobile phone store. Photo courtesy of Vietnam News Agency.
Nevertheless, “these risks are offset by a very high likelihood of support from its parent VPBank. FE Credit's B1 CFR benefits from three notches of affiliate support above its caa1 standalone assessment.
FE Credit was the consumer credit division under VPBank, listed on the Ho Chi Minh Stock Exchange (HoSE) as VPB. In October 2021, VPBank sold 49% of FE Credit's charter capital to SMBC Consumer Finance Co., Ltd (SMBCCF), a wholly-owned subsidiary of Japan's Sumitomo Mitsui Financial Group. FE Credit holds the lion’s share of the consumer finance market with 21,000 transaction points and more than 16,000 employees.
Before selling its stake to the Japanese group, FE Credit reported a profit of VND313 billion ($13 million) in 2021.
However, it suffered post-tax losses of VND2,376 billion ($99.7 million) in 2022 and VND2,965 billion in 2023, according to the firm’s filing with the Hanoi Stock Exchange (HNX).
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