Behind this decision is not only the change in rating indices, but also reflecting how an international rating organization perceives the Bank's financial capacity, risk management and development prospects in the coming period.
Internal capacity is the deciding factor
Recently, Moody's upgraded SeABank's Core Credit Rating (BCA) from B1 to Ba3; upgraded the Partner Risk Rating (CRRs) to Ba2 and the Long-term Partner Risk Rating (CR) to Ba2 (cr). At the same time, the organization maintained the Ba3 rating for Long-term Deposits and the Issuer Rating but raised the outlook from "Stable" to "Proactive".
According to Moody's, raising the BCA reflects that SeABank's internal credit capacity has improved thanks to stable asset quality and solid capital foundation. It is noteworthy that this organization does not emphasize asset size or growth rate, but focuses on factors that determine the sustainability of the bank.
First is asset quality. Moody's believes that SeABank has maintained stable asset quality in the context of a still challenging business environment. The organization's report also expects new overdue debts to rise at a low level in the next 12-18 months. This shows that the Bank is controlling credit risk well, while maintaining the quality of its lending portfolio - a factor that directly affects profitability and the safety level of the system.
The second factor is the strengthened capital base. Moody's forecasts that SeABank's tangible ownership ratio to total risky assets (TCE/RWA) will continue to be maintained above 12%, equivalent to many banks in the same rating group. A solid capital base helps banks have better risk resilience, while creating room to expand business operations while still ensuring capital safety requirements.
In addition, Moody's highly appreciates SeABank's risk management efficiency. This is noteworthy because in recent years, the risk management capacity of credit institutions has often been used as a measure of credit rating rather than growth rate. A bank can grow rapidly in the short term, but only banks that maintain asset quality, control risks well and consolidate capital are capable of improving their rating profile in the long term. Moody's raising the BCA shows that SeABank is better meeting these criteria.
Momentum" for SeABank's reputation and development prospects
If raising the BCA reflects what SeABank has improved, then Moody's adjusting the outlook from "Stable" to "Proactive" shows the rating agency's expectations for the next period.
In the credit rating system, Outlook does not reflect the current situation but reflects an assessment of credit trends in the next 12-18 months. Raising the outlook to "Optim" means Moody's believes that SeABank has the ability to continue to improve its rating profile if it maintains its current platforms.
One of the bases for this assessment is SeABank's capital diversification strategy. Moody's believes that expanding access to medium and long-term capital sources from international financial institutions will help the Bank improve the stability of its mobilization structure and create more room for growth in the coming years. This is an important advantage in the context that banks are increasingly having to balance between credit growth and liquidity assurance requirements.
Moody's upgrading of the Partner Risk and Partner Risk Assessment to Ba2 is also meaningful beyond the story of ratings. These indicators reflect the bank's level of reliability in transactions with financial institutions, partners and international investors. As credit ratings improve, SeABank has more favorable conditions to expand cooperation, access international capital sources and enhance its position in the financial market.
For investors, Moody's ratings are an important reference when considering the financial health and outlook of the bank. For international partners, credit ratings are one of the bases for deciding to cooperate, provide capital or participate in financial transactions. Therefore, upgrading is not only meaningful in terms of image but can also create substantial advantages in business operations.
From a broader perspective, SeABank's story also reflects the trend of changes in the way rating agencies evaluate the banking industry. Instead of focusing on growth rate or asset size, criteria such as asset quality, capital base, risk management and sustainable development capacity are becoming decisive factors.
Therefore, Moody's raising many ratings and adjusting the outlook to "positive" not only recognizes the improvements that SeABank has achieved, but also reflects the belief that the Bank is moving in the right direction in the process of strengthening its financial and governance foundations according to international standards. In the context of the banking industry entering a stage of competition based more on quality and sustainability, these will be important advantages to help SeABank enhance its position in the market.
