S&P ups Vietnam banking risk to 9

Standard & Poor's said it raised its Banking Industry Country Risk Assessment on Vietnam to Group 9 from Group 10.

This action primarily reflects improved economic risk environment due to the country's favorable economic growth prospects, underpinned by investments and productivity gains and improving although still inadequate infrastructure, the agency said.

S&P noted that this improvement in the banking industry country risk is a positive element that underpins all bank credit ratings in Vietnam, adding that this type of action alone will not automatically lead to upgrades of the financial institutions in a specific country, but it could contribute to a change in a bank's ratings.

"Vietnam's transition to a market economy remains cautious and gradual, but favorable endowments, high saving and investment ratios and strong export potential provide a solid basis for medium-term growth prospects," said S&P credit analyst Ritesh Maheshwari.

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