... Issuer Default Rating of Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) is one notch lower than Vietnam's sovereign rating (BB-/Stable). This reflects Fitch Ratings' view that the state's ability to provide timely support would be constrained by weak finances and a large banking system relative to GDP. However, we believe the state's propensity to support the bank is strong, due to its high systemic importance, majority state ownership and quasi-policy functions. Asset-Quality Risks: Like other state-owned banks, Vietcombank faces high systemic asset- quality risks, and high state-owned enterprise (SOE) exposure, 28% of gross loans at end- 2014. Problem loans ¡ including loans classified "special mention" and below, and special bonds issued by the Vietnam Asset Management Company (VAMC) ¡ have improved to 7% of gross loans at end-June 2015 (end-2014: 8.3%). Capitalisation Weaker than Reported: The understatement of...
