According to Moody’s, a further upward rating is possible if the company improves its funding and liquidity while maintaining stable asset quality and capital.
The rating reflects Moody's expectation that Home Credit Vietnam will maintain stable credit fundamentals over the next 12-18 months.
Home Credit also got a B3 rating for its credit profile, reflecting its exposure to the high credit risk inherent in Vietnam's rapidly growing unsecured consumer finance market.
Moreover, its funding and liquidity are vulnerable to disruptions in case of market and/or credit shocks.
But the rating reflects the company's good market position, high profitability and good capital buffer.
Home Credit offers small unsecured consumer loans. Its exposure to credit risk is high, as highlighted by loan loss provisions to average gross loans of 7.7% at the end of 2017, and non-performing and written-off loans of 7.8% of gross loans as of the same date.
The company posted a return on assets of 9% and return on equity of 44% at the end of 2017.
Despite high cash dividends and rapid growth, Home Credit's high profitability will allow the company to maintain a good capital buffer over the next two years.