...Support-Driven Ratings: The Long-Term Issuer Default Rating (IDR) of Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) is one notch below that of Vietnam (BB-/Stable). This reflects Fitch Ratings' view that the state's weak finances and large banking industry relative to GDP may cause less timely support. Still, Vietnam's propensity to back the nation's second-largest bank is strong, given the bank's systemic importance, quasi-policy functions and strong domestic franchise. Asset-Quality Risk: Fitch believes Vietinbank's low reported NPL ratio (end-2014: 1.1%) understates the extent of its problematic exposures, thereby undermining the bank's reported capital levels and increasing downside risks to profitability. Asset-quality pressures could be alleviated if the economy stays stable. The bank's adjusted problem-loan ratio of 3.6% of gross loans ¡ comprising sales to Vietnam Asset Management Company, "special mention" loans and reported NPLs ¡ still seems low relative...
