Credit Rating Result

Note: On 24 June 2025, VIS Rating revised the Rating Announcement dated 14 May 2025 to include Amendment No.1 in the Regulatory Disclosures section. The revision can be found on Page 6 herein.
Hanoi, 14 May 2025 - VIS Rating has assigned a long-term issuer rating of A- to VNDIRECT Securities Corporation (VND). The outlook on VND’s A- issuer rating is stable. This is the first time VIS Rating assigned a rating to VND. 

Rating rationale

VND’s A- long-term issuer rating reflects its above-average standalone assessment and our expectation of a low likelihood of affiliate and government support for the firm in times of need. The firm’s standalone assessment incorporates its above-average leverage, funding and liquidity profile, average profitability, and below-average risk appetite relative to peers.

Established in 2006 as a privately-owned securities firm, VND is among the three largest firms by total assets at end-2024. The firm has established an advanced trading platform to grow its customer base and market share in brokerage and margin lending. In recent years, it has expanded its fixed-income operations to serve both institutional and retail customers. The services include corporate bond advisory, underwriting and distribution. VND’s largest shareholder is I.P.A Investment Group (HNX: IPA), a privately-owned investment holding company, with a 25.8% equity stake at end-2024.

We position VND’s profitability at an ‘Average’ level, reflecting our expectation of stable return on average assets (ROAA) from core businesses - margin lending and fixed-income operations – and the firm’s lower-than-industry earnings volatility.

VND’s ROAA improved to 4.0% in 2024 from 3.2% in 2022. Improved bond market conditions helped to boost fixed income-related income, offsetting lower income from margin lending and brokerage businesses, which were affected by keen competition and the firm’s cyberattack incident in 1H2024.

Over the past 3 years, income from fixed-income operations made up 52% of VND’s operating profit, followed by margin lending (36%) and brokerage income (9%)

VND’s earnings volatility was at 58% as of 2024, lower than industry average of 131%, driven by its diversified income structure, backed by strong nationwide retail and institutional customer networks.

Over the next 12-18 months, we expect VND’s ROAA to remain broadly stable. According to the management, demand for margin loans will grow alongside improving market sentiment, and the firm is taking steps to expand its retail product suite to cover wealth management services and investment products. The additional revenue will help to offset the lower yields from de-risking of its corporate bond underwriting activities.

We assess VND’s risk appetite at a ‘Below-Average’ level, reflecting the firm’s high exposure to higher-risk assets - 30% of total assets on average. Those assets were mainly in the form of corporate bonds, and included unlisted shares, overdue receivables, and commitments to buyback corporate bonds.

We note that the firm recently increased holdings of financial institution (FI) bonds. The firm’s corporate bond holdings included several bonds issued by real estate and power sector companies that defaulted in 2023-2024. According to the management, these companies were either embroiled in legal issues that impeded commercial operations or were severely impacted by the downturn in the property market.
According to the management, VND intends to de-risk its fixed income operations by implementing more stringent criteria to select new customers for bond underwriting, and expand its coverage of financial institution bond issuers. In addition, the firm will continue to explore debt restructuring and improve collection from the defaulted corporate bond issuers.

Asset risks from margin loans remain well-managed given the low credit concentration, and its well-established margin call and collateral management process. According to the management, the firm mitigates credit losses through early repayment reminders for borrowers and its automatic force-sell process.

We position VND’s leverage at an ‘Above-average’ level, reflecting the company’s good access to new capital to support business growth and strengthen its loss absorption buffers. VND’s reported leverage ratio fell from 3.9x in 2020 to 2.4x by end-2024, below peers’ average of 2.5x, after raising nearly VND 10 trillion of new capital during 2020-2024.

According to the management, VND plans to maintain modest asset growth over the next 12-18 months, focusing on margin loans. Coupled with steady internal capital generation, we expect VND’s leverage level will remain stable.

We assess VND’s funding and liquidity at ‘Above-average’ level, reflecting its diversified funding structure, good access to state-owned banks and offshore lending, and significant liquid asset buffer.

As a large securities firm, VND manages to secure sizeable credit facilities – including some clean lines - from various local banks to support business expansion. At end-2024, borrowings from state-owned banks made up 60% of VND’s total borrowings. In 2021-2022, VND also obtained syndicated loans from several foreign banks, including Cathay United Bank, Maybank, and Taipei Fubon Bank.

VND plans to issue up to VND 2 trillion of 1-3Y senior unsecured bonds in 2025. If successful, the additional long-term funding will be positive for VND’s funding.

Liquidity risks arising from the use of confidence-sensitive short-term debt are well-managed. The firm maintains sizeable high liquid assets – including cash, term deposits and certificate of deposits (CDs), and government bonds. At end-2024, VND’s inflow to outflow ratio was 101%, similar to most peers.

VND’s issuer rating does not incorporate uplift for affiliate and government support.

The outlook on VND’s long-term issuer rating is stable, reflecting our view that its credit fundamentals will remain stable over the next 12-18 months.

Factors That Could Lead to an Upgrade/Downgrade

Rating methodology

Financial Institutions Rating Methodology.

For more detailed information, please refer to our full credit rating methodology at: here

Credit rating history

Regulatory disclosures

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Amendement no.01

Following the Rating Announcement on 14 May 2025, VND completed its divestment from VIS Rating on 18 June 2025. As of 19 June 2025, VND is no longer a shareholder of VIS Rating.

VND's ownership stake at VIS Rating: 0%

Analyst & Committee

Credit Rating Announcement Number