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The revision of the Outlook follows Fitch's revision of the Outlook on the Vietnam sovereign (BB/Positive) to Positive, from Stable, on 1 April 2021.

Fitch Upgrades Outlook on SCB Vietnam to Positive; Affirms at 'BB'
Fitch Ratings has revised the Outlook on the Long-Term Issuer Default Rating (IDR) of Standard Chartered Bank (Vietnam) Limited (SCBVL) to Positive, from Stable. At the same time, the agency has affirmed the bank's Long-Term Foreign-Currency IDR at 'BB', Long-Term Local-Currency IDR at 'BBB-' and Support Rating at '3'.
The revision of the Outlook follows Fitch's revision of the Outlook on the Vietnam sovereign (BB/Positive) to Positive, from Stable, on 1 April 2021. It also reflects Fitch's view that support from SCBVL's 100% parent, Standard Chartered Bank (SCB, A+/Negative/a) is likely to remain intact.
KEY RATING DRIVERS
SCBVL's ratings are underpinned by Fitch's expectation of a moderate probability of support from SCB, if required. This takes into consideration SCB's 100% ownership in SCBVL, the bank's expanding role in the group's regional strategy, high operational and management integration and SCB's strong ability to provide support; SCBVL's assets accounted for less than 0.5% of the parent's assets.
SCBVL's Long-Term Foreign-Currency IDR is constrained by Vietnam's Country Ceiling of 'BB', reflecting transfer and convertibility risks in the market. Its Long-Term Local-Currency IDR is rated two notches above the sovereign, as Fitch believes sovereign restrictions on the repayment of local-currency obligations will be lower than those on foreign-currency obligations.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade:
An upward revision in the sovereign IDR and Country Ceiling would result in a similar upgrade in SCBVL's IDRs, assuming there is no significant reduction in Fitch's perception of the parent's ability or propensity to support the bank.
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade:
Negative rating action on the sovereign rating, leading to a lower Country Ceiling, would be likely to lead to a corresponding downgrade in the bank's IDRs.
SCB's Viability Rating is six notches above Vietnam's Country Ceiling. This means there would have to be a large reduction in SCB's ability or propensity to support the bank before SCBVL's ratings would be affected. A significant stake sale of SCBVL, for example, may suggest a perceived reduced propensity to provide support, however, we think that this is unlikely to occur in the near term.
International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance.

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