Asia Commercial Joint Stock Bank expected to maintain profitability

Moody’s expects new delinquencies to stay low in the next 12-18 months.

Asia Commercial Joint Stock Bank (ACB) is expected to keep its solid asset quality and profitability over the next year, even as funding and liquidity pressures continue, Moody’s Ratings said.

The bank’s nonperforming loan ratio fell to 1.3% as of June from 1.5% a year earlier, supported by higher write-offs and low exposure to real estate. 

Moody’s expects new delinquencies to stay low in the next 12 to 18 months.
ACB’s capital and earnings remain stable, with its capital ratio above 10.5% and profitability stronger than most peers. 

Loan loss provisions stood at just 0.1% of total loans as of June.

Funding risks have risen, with market-based funding climbing to 28% of assets from 20% in 2023, whilst liquid assets dropped to 2.3% from 6.8%. 

Moody’s said these pressures are likely to persist but remain manageable given the bank’s strong credit fundamentals.