Techcombank maintains 'BB-' rating in latest S&P review

The rating agency emphasized Techcombank's strong profitability, stable capitalization, solid asset quality, and a diversified, low-cost deposit base. This favorable assessment follows the bank's annual 2024 rating review.

"We are pleased to see S&P Global Ratings recognize our progress in areas such as profitability, capitalization, asset quality, and a low-cost, diversified deposit base supported by our innovative products and industry-leading digital customer experiences," said Techcombank CFO Alex Macaire. "S&P's latest update reflects a more positive view of Techcombank's operating environment, acknowledging Vietnam's accelerated GDP growth."

S&P's affirmation highlights Techcombank's consistent high performance, placing its 'BB-' rating above the 'b+' anchor typically assigned to the Vietnamese banking sector.

The agency anticipates Techcombank's continued profitability, driven by a high-yielding loan book, low-cost deposits, and substantial non-interest income. Over the past four years, the bank has achieved an average core earnings-to-average-adjusted-assets ratio of 3%, significantly outperforming the sector average of 1–1.5%.

The stable outlook reflects S&P's confidence in Techcombank's ability to sustain its strong retail presence and above-industry profitability over the next 12–18 months.

Employees and customers seen at a Techcombank branch. Photo courtesy of Techcombank

S&P foresees gradual improvement in Techcombank's non-performing loan (NPL) ratio as Vietnam's GDP growth strengthens and the real estate sector recovers in 2025. The agency highlighted the resilience of Techcombank's real estate loan portfolio, which maintained a sector NPL ratio below the bank's overall NPL ratio during the economic downturn.

Additionally, S&P commended Techcombank's diversified funding sources, extended maturity profiles, and competitive funding costs. The bank is expected to continue attracting low-cost deposits through innovative products and advanced digital banking services, sustaining one of the highest current and savings account ratios in the industry.

Importantly, S&P has revised its upgrade scenario for Techcombank, indicating a possible rating increase if the bank's risk-adjusted capital (RAC) ratio improves steadily over the next 12–18 months. This marks a shift from the previous stance, where an upgrade was considered less likely.

Techcombank's management sees this revised outlook as aligned with its strategy to further diversify its credit portfolio, which is expected to enhance the bank's risk-weighted asset profile and optimize its RAC, thereby supporting a potential future upgrade