Commentary: Codifying Resolution 42 – A Domestic Credit Rating Agency’s Perspective

The codification of Resolution 42 into the amended Law on Credit Institutions (2025) – effective from October 15, 2025 – marks a structural milestone to address these limitations, enhance debt recovery for CIs, and strengthen the resilience of Vietnam’s banking system. 

Amid these significant regulatory changes, FiinRatings – A Strategic Partner of S&P Global – has released its Market Commentary titled “Codifying Resolution 42: A Local Credit Rating Agency’s Perspective,” providing an independent and in-depth analysis of the implications for credit risk and the rating outlook of Vietnamese banks. 

Key Highlights from the Commentary: 

🔹 Narrowing the Legal Gap: Vietnam is moving closer to jurisdictions with mature legal systems such as Hong Kong and Australia. 

🔹 A more comprehensive legal foundation also supports an improved assessment of Vietnam’s Banking Industry Country Risk Assessment (BICRA), as recently noted by S&P Global Ratings. 

🔹 Increasing Differentiation Among Bank Groups: Large banks strengthen their position through scale and sound governance, while smaller banks face pressure to enhance risk management and invest more in NPL resolution. 

🔹 Core Tier 1 Capital (CET1) and Capital Adequacy Ratios (CAR) remain decisive factors for credit outlooks and the long-term resilience of the banking system amid robust credit expansion. 

Codifying Resolution No. 42 not only accelerates the resolution of non-performing loans (NPLs) but also paves the way for an improved credit outlook for Vietnam’s banking sector over the medium to long term. This establishes a critical foundation for a more transparent, sustainable, and trustworthy financial market.  

Building on this milestone, FiinRatings - a member of FiinGroup - offers comprehensive credit rating and advisory services to help enterprises strengthen credibility, raise capital efficiently at optimized costs, and enable investors to identify quality opportunities. 

👉  Read the full Commentary HERE

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