Bank ratings under spotlight

Industry insiders are scrutinising the implications of the central bank’s recent credit growth target allocations on banks.

The identity of group I and II banks with highest credit growth targets of 17 and 15 per cent respectively in 2012 was recently unveiled. Accordingly, in parallel to giants VietinBank, Vietcombank and Techcombank, group I encompasses Eximbank, Maritime Bank, Military Bank, VPBank, VIB, SeaBank, Sacombank and ACB.

Joining group II are Nam A, Dai A, Phuong Nam, Phuong Dong, Saigon-Hanoi Bank, Lien Viet Post Bank, Bao Viet Bank, Nam Viet, Kien Long Bank, Mekong, An Binh, Agribank and several others.

Which banks had sit in the bottom of central bank classification list became clearer since more 10 banks have yet to be given 2012 credit growth targets. Some industry insiders then worry this would create a mess in the local banking market.

Senior banking expert Nguyen Tri Hieu assumed depositors and shareholders would take back their money once they knew which banks were in bad shape.

Economist Vo Tri Thanh held a different view saying “suitable measures will be applied to those weaker banks in the coming period, since there is no reason to be worried when their names are known to the public.”

“Depositors can put their mind at ease since the State Bank will not allow bank collapses,” Thanh added.

Managing partner of Financial Services, Ernst & Young Asia-Pacific Keith Pogson assumed group 4 banks forbidden from credit growth in 2012 should be banned from raising deposits to rein in inflation and protect depositors.

In fact, classification criteria not publicly announced has worried several banks after they were allocated credit growth indexes from the State Bank.

“What are the differences between A rating and group I bank standards? We are by no means inferior in terms of asset value, governance capacity, bad debt ratio or liquidation to banks in group I,” said a group II bank director. The bank got an A rating in previous years.

“We still hope since several group II banks were viewed as worse then us in a number of fields,” said the representative of a bank that has yet to be given 2012 credit growth index.

Economist Le Dang Doanh assumed classifying banks was a smart move, but it would be important to unveil classification standards to the public. This would help address envy among banks as well as propel banking sector restructuring.
 

Ha Tam (vir.com.vn)