BAC A BANK: Journey to become a green bank
Proactively anticipating the trend, on the journey to become a green bank, Bac A Commercial Joint Stock Bank (BAC A BANK) has focused on consulting and providing credit for green economic projects, creating livelihoods and jobs for local people.
Challenges and opportunities from green credit
In the context of climate change happening globally, “greening” credit is one of the top priority activities. However, in reality, by the end of 2023, the outstanding green credit balance in our country only reached over 600,000 billion VND, accounting for a very modest proportion, 4.4% of the total outstanding balance of the entire economy.
The reason for this situation is primarily because there are currently no guidelines on the list and criteria for classifying green projects suitable for economic sectors and fields, as a basis for credit institutions to appraise, select and monitor when granting green credit. The legal corridors for implementing the ESG system and green credit are still in the process of being built and completed. There is even a lack of mechanisms to record, evaluate and rank credit institutions with good achievements in granting green credit; as well as support mechanisms and incentives on capital sources to encourage the implementation of green credit to take place effectively. Meanwhile, in our country there are no specific regulations determining whether building and developing green banks is a mandatory task or not, leading to this activity being easily neglected and neglected.

In reality, many banks are having difficulty balancing their capital sources. Green investment projects in Vietnam, especially in the fields of renewable energy and clean energy, often require long payback periods, high investment costs and high market risks, while lending capital mainly comes from short-term mobilized capital, mobilized under high-cost commercial mechanisms. Technical knowledge and environmental expertise have also become barriers for many credit officers in managing potential environmental and social risks; appraising and evaluating project effectiveness, as well as the quality of collateral, and customers' ability to repay debts, etc.

However, many experts believe that Vietnam is one of the most vulnerable countries to climate change. In this context, the Government is increasingly concerned about environmental issues, especially after committing to develop and implement stronger measures to reduce greenhouse gas emissions to achieve net zero emissions by 2050.
To solve this problem, investment capital for green sectors promises to grow strongly in the future; green credit and green banking activities will increasingly develop. According to World Bank estimates, Vietnam needs to invest a huge amount of resources - about 368 billion USD by 2040, equivalent to 6.8% of GDP each year to pursue the green transformation roadmap and complete sustainable development goals. This requires many reforms in policies, solutions to mobilize domestic and foreign capital, and attract private investment in projects with "green" elements.
In the immediate future, thanks to the efforts and synchronous coordination of the State Bank and credit institutions, in the 2017-2023 period, outstanding credit for green sectors recorded a growth rate of up to more than 22%/year, higher than the average credit growth rate of the economy.

Proactively anticipating trends, at BAC A BANK, projects selected for consulting and credit funding are all projects that apply achievements in management science and modern science and technology to production in the direction of green economy, circular economy, knowledge economy, creating livelihoods and solving jobs for local people.
Proactively "taking the lead" on the journey to becoming a green bank
Dairy farming and milk processing projects concentrated in Nghia Dan district; Projects on conservation and production of clean medicinal herbs and natural flavors in Muong Long... are the clearest evidence of high economic efficiency while ensuring positive impacts on the environment; bringing sustainable economic value to investors, at the same time, creating products that contribute to improving the lives and health of consumers. In fact, the proportion of agricultural loans of BAC A BANK is always quite high, such as loans for growing vegetables, flowers, fruits, industrial crops; loans for agricultural production and business for individual customers; credit for corporate customers in the rice industry...
Not stopping there, BAC A BANK has introduced many mechanisms and policies to encourage customers to borrow capital to "green" their projects. Most recently, within the framework of the "Fast Capital - Breakthrough Business" Program with a scale of up to 3,000 billion VND, in addition to the support of competitive and attractive lending interest rates - from only 6%/year, the bank continues to reduce the maximum interest rate by 0.2%/year for businesses implementing green projects and some other priority industries and fields.

For two consecutive years (2023 and 2024), BAC A BANK was honored as "Outstanding Bank for Green Credit" within the framework of "Vietnam Outstanding Banking Awards".
Facing the trend of green economy and circular economy of the era, at the same time, realizing the importance and opportunities from green banking, BAC A BANK has proactively researched and developed strategies to mobilize resources for implementing green activities; practicing green transformation and digital transformation in operational practices at the unit. Perfecting green credit mechanisms and policies by establishing clear criteria and incentives on interest rates and loan terms for green projects, not only creating convenience for businesses but also attracting sustainable development projects.

Prioritizing projects with high potential such as renewable energy (solar energy), green transportation, green infrastructure and sustainable agriculture, clean agriculture, high-tech agriculture, projects to utilize excess gas and heat at cement factories... This direction helps banks optimize resources and create real progress in the country's green growth process. In addition, it enhances awareness, helps bank staff and customers grasp green trends in a timely manner, improve knowledge and be more confident when participating in green credit projects.
At the same time, with the green transformation process; the digital transformation process is also carried out systematically at BAC A BANK from digitizing operational activities; to enhancing the development of digital products and services such as e-banking; Kiosk Banking; Alpha Bank.
Deeply aware that banks not only play the role of financial intermediaries, but also an important link in the green transformation process, leading capital flows into sustainable development goals; BAC A BANK will continue to adhere to the State's policy in "greening" loan portfolios, linking business growth goals with community and social responsibilities, contributing to the mission: "Developing green banks, green credit - a very important task of the banking industry in the coming time".
BAC A BANK leadership representative