Fitch lifts Agribank, Vietinbank

Fitch Ratings said it upgraded the long-term issuer default ratings of two Vietnamese government-owned banks – Vietnam Bank for Agriculture and Rural Development (Agribank) and Vietnam JSC Bank for Industry and Trade (Vietinbank) – to B+ from B.

The upgrade follows the upgrade on Vietnam’s sovereign rating, Fitch said.

The outlook also was revised to stable from positive, reflecting a similar revision to the sovereign’s outlook, the agency said.

The upgrade also considers a view that the sovereign’s ability to provide extraordinary support, if needed, has improved.

The upgrades include the rating on Vietinbank’s $250 million 8% notes due 2017 to B+ from B with the recovery rating affirmed at RR4.

The ratings on the banks are driven by state support, the agency said.

Fitch said it expects a likely extraordinary state support for both banks as they are majority-owned by the government and they are among the most systemically important banks with quasi-policy functions in the domestic economy.

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