S&P keeps Vietcombank ratings unchanged at BB- after Mizuho deal

Standard & Poor’s Ratings Services said on Sept. 30 that its ratings on Bank for Foreign Trade of Vietnam (Vietcombank; BB-/Negative/B) were unchanged following the bank’s capital and business alliance with Mizuho Corporate Bank Ltd. (MCB; A+/Stable/A-1)
“We believe that, while the capital infusion will provide immediate capital strengthening, the bank will continue to require more capital to support its high growth in loans,” the rating agency said.
According to S&P, the alliance could also provide Vietcombank with an enhanced products and services offering, and accelerate the alignment of the bank’s risk management system and processes with international best practices. However, in its opinion, the alliance may face some difficulty in execution, given the difference in risk culture and operating norms in the two organizations.
As part of the alliance, Mizuho will subscribe to 15% of Vietcombank’s shares (or US$567.3 million) through a private placement of equity.
The alliance will also involve provision of technical support, mutual cooperation, and opportunities for business partnerships with all Mizuho Financial Group companies.
The transaction is subject to regulatory approval and the capital infusion is likely by the first quarter of 2012.”-Source:Vietiz24.com”

Tags: Mizuho deal, Standard & Poor's Ratings Services, Vietcombank, Vietcombank ratings unchanged, Vietnam banking industry, Vietnam finance, Vietnam financial

Posted by quynhdn on Oct 1 2011. Filed under Banking-Finance. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry