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.

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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