Vietnam’s Banking Outlook to Stay Negative, Moody’s Says

Vietnam’s banking system outlook over the next 12 to 18 months remains negative, in line with the country’s sovereign debt, Moody’s Investors Service said, citing concerns about falling profits and poor asset quality.

Domestic economic imbalances pose a risk to banks’ asset quality and make funding more difficult, Moody’s said in a report today. The quality of assets held by banks is “far worse” than implied by officially reported non-performing-loan figures, and some companies have begun reducing deposits due to refinancing difficulties and weaker earnings, Moody’s said.