FiinRatings upgrades F88's credit rating outlook

FiinRatings is a credit rating company established in Vietnam. Last February, the world's leading independent credit rating organization S&P Global Ratings announced the acquisition of 43.6% of FiinRatings' shares.

This is the 8th update since FiinRatings first issued its credit rating on October 12, 2021. Upgrading the credit rating outlook could help F88 access more lending partners and improve its average cost of capital.

FiinRatings' decision to upgrade its outlook this time reflects significant improvements in F88's business operations, capital, liquidity and risk management capabilities.

An F88 transaction point in Hanoi.

“We assess that F88's capital and liquidity have improved somewhat compared to the previous credit rating, thanks to the company's continued success in diversifying its capital mobilization sources from domestic and foreign partners, along with its plan to increase charter capital in 2026 and a significant improvement in its average cost of capital mobilization," FiinRatings' announcement explained, emphasizing that the diversity of capital mobilization sources provides a stable capital foundation for business operations and ensures solid liquidity.

In addition, FiinRatings said F88's leading position in the alternative lending industry, with a target of 1,000 stores by 2026, is also an important factor that makes the organization upgrade F88's credit rating outlook.

Specifically, in 2024, F88 recorded a loan balance growth rate of up to 22.7%, much higher than the average growth rate of the consumer finance industry of 3.84%. F88 also diversified its revenue sources, in which revenue from insurance services increased by 11.8%, contributing 9.5% of total revenue. The Debt/Equity ratio remained at 1.7 times, lower than the median of consumer finance companies at 4.6 times, demonstrating a balance between safe and efficient capital use. In the liquidity stress test, FiinRatings assumed a 50% decrease in loan mobilization and no increase in charter capital in 2026, resulting in F88 maintaining stable liquidity and ensuring fulfillment of obligations to stakeholders.

In terms of profitability, F88 achieved a profit of VND 351.5 billion, along with a sharp reduction in operating expenses (CIR). Important financial indicators such as NIM, ROE and ROA have all improved significantly, surpassing 2023 and higher than the industry average. This helps to strengthen investors' confidence in F88's business operations.

“According to our projection, F88 will continue to record high after-tax profit of VND500-700 billion in the 2025-2026 period thanks to its loan expansion strategy and effective cost management,” FiinRatings commented in the announcement.

To achieve such high performance, F88 has maintained a strict risk management policy that has been commented by a credit rating company as “significantly improving its ability to manage and handle bad debt”.

FiinRatings' announcement added that F88 has maintained stable asset quality, thanks to a strong improvement in customers' repayment capacity, as well as from governance, tightening of business risk appetite and effective coordination between departments. Debt collection rate also recovered significantly, reaching 41.7% compared to 15.6% in 2023. This helps strengthen investors' confidence in F88's business operations.

“We expect F88 to continue to improve its debt collection and credit loss capabilities, as well as maintain prudent policies on classification, provisioning, and bad debt handling. As a result, the average credit cost/debt balance may decrease to 19% by 2026,” FiinRatings wrote.

Huyen Trang

Source: https://doanhnghiepvn.vn/kinh-te/tai-chinh-ngan-hang/fiinratings-nang-trien-vong-xep-hang-tin-nhiem-cua-f88/20250402033540469