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Fitch believes that the bank's parent Australia and New Zealand Banking Group Limited (ANZ, AA-/Negative/aa-) has a strong ability to extend extraordinary support to its Vietnam subsidiary - given the parent's credit profile.

Fitch Assigns ANZ Vietnam First-Time 'BB' Rating; Outlook Positive
Ảnh: ANZ
Fitch Ratings has assigned a first-time Long-Term Foreign-Currency Issuer Default Rating (IDR) of 'BB' and Long-Term Local-Currency IDR of 'BBB-' to ANZ Bank (Vietnam) Limited (ANZV). The Outlook is Positive.
The Positive Outlook reflects our Outlook on the Vietnam sovereign (BB/Positive).
A full list of rating actions is at the end of this rating action commentary.
ANZV's ratings are support driven. Fitch believes that the bank's parent Australia and New Zealand Banking Group Limited (ANZ, AA-/Negative/aa-) has a strong ability to extend extraordinary support to its Vietnam subsidiary - given the parent's credit profile, and ANZV's small asset base that accounted for only around 0.2% of the parent's total assets at end-2018.
Nevertheless, Fitch believes that currency transfer and convertibility risks, as reflected in Vietnam's Country Ceiling of 'BB', could represent a significant constraint on ANZV's ability to receive support from its Australia-based parent. This is reflected in the Support Rating of '3' that indicates a moderate probability of support from its higher-rated Australia-based parent, in times of need. ANZV's Long-Term Foreign Currency IDR is capped at the Vietnamese Country Ceiling.
Fitch regards the risk of sovereign restrictions on local-currency repayments as lower than that of foreign-currency restrictions. Fitch also expects parental support to be robust, assuming no very high levels of sovereign or macroeconomic stress. Hence, ANZV's Long-Term Local-Currency IDR is rated two notches above Vietnam's sovereign rating.
Fitch’s view on ANZ's propensity to provide support to ANZV is based on ANZV's relatively limited role in the group, compared with larger subsidiaries in more strategically important markets.
Fitch has not assigned a Viability Rating to ANZV due to its high level of management and operational linkages with its parent and the absence of a meaningful standalone franchise. ANZV has a small asset base, constituting a mere 0.3% of Vietnam banking system assets at end-2018.
The bank's ratings are currently constrained by the country's sovereign rating and Country Ceiling. An upgrade in the sovereign rating and Country Ceiling would therefore be likely to lead to an upward revision in the bank's IDRs, assuming that the parent's ability and propensity to support the bank remain intact.
Fitch may take negative rating action if there is a change in Fitch's assessment of ANZ's propensity and ability to extend extraordinary support in a timely manner. For example, a significant dilution in ANZ's stake in the bank could be indicative of a reduced propensity to support, though Fitch believes this is unlikely in the near term.
There would have to be very significant rating changes at both entities for there to be any impact on Fitch's assessment of ANZ's ability to support ANZV, in light of the large gap between the Long-Term IDRs of ANZ and Vietnam.
The rating actions are as follows:
Long-Term IDR assigned at 'BB'; Outlook Positive
Long-Term Local Currency IDR assigned at 'BBB-'; Outlook Positive
Short-Term IDR assigned at 'B'
Short-Term Local Currency IDR assigned at 'F3'
Support Rating assigned at '3'

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