Credit Rating Result

Hanoi, 22 May 2026 - Vietnam Investors Service and Credit Rating Agency Joint Stock Company (VIS Rating) has affirmed Tien Phong Commercial Joint Stock Bank’s (TPBank) AA- long-term issuer rating. The rating outlook remains stable.
The rating presented in this announcement is effective from the date of the announcement and remains in effect unless and until it is superseded by a subsequent rating action. Please visit https://visrating.com/rating-results to obtain the latest update on the rating.

Rating rationale

The affirmation of TPBank’s AA- long-term issuer rating with a stable outlook reflects our expectation that the bank’s above-average profitability will remain sufficient to sustain loss absorption buffers. The rating also incorporates our expectation of elevated asset risks and tightening funding and liquidity conditions; if sustained, these may increase downside risks to the bank’s standalone credit profile.
In 2025, TPBank’s reported problem loan ratio declined to 1.29% from 1.52% in 2024, driven mostly by improvements in its retail borrower segment.
We expect asset quality to remain under pressure over the next 12–18 months, as persistently high market interest rates weaken borrowers’ repayment capacity—particularly in mortgages, unsecured consumer lending, credit cards, and real estate-related corporate loans.
Early-stage stress is already evident, with the problem loan ratio rising to 1.85% in 1Q2026 from 1.29% in 2025, reflecting tighter and more volatile operating conditions and signaling a continued rise in problem-loan formation.
Rising concentration in real estate-linked sectors heightens structural risks. Exposure increased from 38% in 2024 to 42% of gross loans at end-2025, including retail mortgages (around 24% of gross loans), real estate developers (10.5%), constructors (8.3%) – mainly linked to infrastructure projects. This growing credit concentration, which includes exposures to corporate groups linked to past bond market stress, in our view, increases the bank's vulnerability to cyclical downturns and event risks.
We expect profitability to moderate over the next 12–18 months, as tighter system liquidity drives intensified deposit competition, raising deposit and funding costs, compressing net interest margins (NIM), and increasing downside risks to earnings. According to the management, the bank may increase lending rates amid strong credit demand to partially offset higher funding costs and support NIM.
Funding pressures are already evident in the decline in CASA-to-gross loans ratio to 14.7% in 1Q2026 (from 18.1% in 2025 and 20.2% in 2024), a common trend across the banking sector; reflecting intense deposit competition and depositors’ shift toward higher-yield term deposits. According to the management, the bank plans to expand longer-term—and more costly—funding sources, including offshore borrowers and domestic bonds to enhance funding stability and diversification.
At the same time, elevated asset quality stress will further lift credit costs, reinforcing pressure on profitability. Although ROAA was resilient at 1.6% in 2025 (above the 1.5% industry average), supported by fee income, this outperformance may gradually erode if operating conditions remain tighter.
Capital should remain broadly stable, underpinned by above-average internal capital generation, which is expected to offset the impact of VND1.4 trillion in planned cash dividends.
TPBank holds liquid assets equivalent to 28% of total assets as of 1Q2026, exceeding the 23% industry average and adequately covering short-term funding needs.
TPBank’s AA- rating incorporates our expectation of a moderate likelihood of extraordinary government support, reflecting the bank’s sizable domestic franchise and an enhanced regulatory framework that provides authorities with multiple resolution tools for distressed banks.

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