...Sovereign Support Drives Ratings: The Long-Term Issuer Default Rating (IDR) of Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) is driven by our expectation that state support will be forthcoming, if needed, given its high systemic importance and the state's controlling stake. Its IDR is one notch lower than that of Vietnam (BB-/Stable) to reflect the state's weak finances and large banking industry relative to GDP, which may lead to less timely support. Asset-Quality Risk: Vietinbank's reported non-performing loan (NPL) ratio increased to 1.0% at end-2016 (2015: 0.9%), bucking the industry trend. This is despite its rapid loan growth and could suggest the bank's NPL classification policy may have been less conservative than its peers in the past. Its adjusted NPL ratio ¡ including "special mention" loans and NPLs sold to Vietnam Asset Management Company ¡ was 3.3% at end-2016. Nevertheless, we believe that its "true" asset quality may likely be weaker than what is...
