Moody's cuts Vietnam banks

Moody's Investors Service said it lowered the ratings of six Vietnamese banks following the downgrade of the Vietnamese government's rating to B1 from Ba3.

All six banks' foreign-currency deposit ratings were lowered to B2 from B1, and continue to have a negative outlook, in line with the revised foreign-currency deposit ceiling, Moody's said.

Moody's also lowered - by one to two notches - the baseline credit assessments of all six banks.

The affected banks include Asia Commercial Bank, Bank for Investment and Development of Vietnam, Military Commercial Joint Stock Bank, Saigon-Hanoi Commercial Joint Stock Bank, Techcombank and Vietnam International Bank.

All of the factors that are resulting in negative credit trends for the sovereign have increased the riskiness of Vietnam's operating environment for the banks, the agency said.

In addition, the financial difficulties of government-owned shipbuilder Vinashin, and the likelihood that it will default on its foreign-currency borrowings have negative implications for the banks, Moody's added.

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