Moody's maintains stable outlook for FE CREDIT on recovering economy
|Photo: FE Credit|
The decision to maintain the outlook at Ba3 is driven by strong support from its parent, Vietnam Prosperity Jt. Stk. Commercial Bank (VPBank, Ba3 positive) and its 49% shareholder, SMBC Consumer Finance Co., (SMBCCF), which will help FE Credit mitigate risks stemming from its risky loan book and reliance on wholesale funding.
The outlook of FE Credit remains stable, reflecting Moody's expectation that FE Credit can maintain its stable credit profile in the next 12 to 18 months. Moody's also expects FE CREDIT's asset quality and profitability to recover and return to pre-pandemic levels in 2023.
Although in the context of increasing inflation, the rating maintained reflects the strong financial foundation of FE CREDIT following the risk quality control improvements and stable long-term development prospects. After more than 1 year since SMBCCF became a strategic shareholder of FE CREDIT, the financial company has increasingly perfected the management apparatus, improved its mobilized capital, and improved the quality of risk management. By the end of the first quarter of 2022, the total loan outstanding balance of FE CREDIT reached VND 76,638 billion, an increase of 16.2% compared to the end of the first quarter of 2021.
Not only that, the company's cost of capital (COF) decreased to 6.1% from 7.4% (at Q1.2021). More impressively, the financial company recorded pre-tax profit in the first quarter of 2022 far exceeding the results of the whole year 2021.
|Vietnam’s Economic Recovery Remains Strong Despite Global Uncertainties: WB |
Vietnam’s economic recovery remained strong despite heightened global uncertainties, the World Banks said in the June edition of its Vietnam Macro Monitoring report.
|Vietnam to Become The Third Largest Economy in the Southeast Asia: IMF |
According to a recent press release of the International Monetary Fund (IMF), Vietnam’s gross domestic product (GDP) will reach US$571.1 billion by 2025, surpassing the ...
|Vietnamese Service Enterprises Struggle to Recover |
After Covid-19, service businesses faced many difficulties. In order to fully recover, businesses expect appropriate support policies and solutions.