Recently, FinanceAsia – leading Asian magazine in finance and banking honors Saigon – Hanoi Bank (SHB) as the winner of “Biggest ESG impact 2023 in Vietnam” category at the 27th FinanceAsia Awards.
ESG amid rising trend of sustainable development
ESG (Environmental, Social and Governance) – a set of standards to measure the sustainability of a company provides a framework for businesses to consider the impact and dependencies on the environment and society as well as the quality of their corporate governance.
Thanks to Vietnam’s strong commitments at COP26 and the global shift toward sustainability and social responsibility, ESG has gained attention of many domestic enterprises that strive to achieve sustainable growth, enhance competitive edge and attract foreign strategic investors.
This award affirms SHB’s prudential, effective and sustainable strategy which has been highly appreciated by international institutions.
SHB’s strategic green credit growth
Green credit plays a critical role in SHB business strategy. Green growth action plan starts from raising stakeholders awareness of the importance of green credit to offering tailored loan products and banking services for green sectors. Simultaneously, more green loans shall be extended to green enterprises and encourage the brown ones to transition into more environment-friendly projects
Some remarkable green projects of SHB include: Disbursing more than VND 1,000 billion in Vietnam’s Renewable Energy Development Project (REDP) funded by World Bank; on-lending EUR 65 million in project “Smart Grid –Transmission Efficiency” (phase 1) and EUR 350 million in project “Effective grid in small and medium cities” (phases 1 and 2) funded by KfW; issuing guarantee for lending banks in “Scaling up Energy Efficiency for Industrial Enterprises Project” (VSUEE) funded by the Green Climate Fund (GCF) through the World Bank and Ministry of Industry and Trade with a total value of USD 75 million.
SHB’s green loan experienced a steep growth rate of almost 10% pa as a result of the bank’s strategy and efforts to focus on green credit and green banking.
Prioritize women-led small and medium enterprises
FinanceAsia highly appreciates and recognizes SHB efforts in fulfilling social responsibility. SHB is the Top performing bank in disbursement of USD 1,700,000 in COVID-19 Relief Grant for Women-Led Small and Medium-Sized Enterprises (WSME) facilitated by ADB by the end of 2022.
WSME negatively impacted by Covid-19 are entitled to 6 months of interest for existing loans or commitment fee up to USD 10,000 for new loans. SHB also offers many additional incentives to customers such as account number of choice and fee reduction and waiver.
Besides financial service, SHB cooperates with ADB to provide business counselling to these WSME to improve corporate governance and competitive advantage so that they can achieve sustainable development.
In early 2023, SHB and IFC signed a senior loan agreement worth USD 120 million to expand its small and medium-sized enterprise (SME) loan portfolio, which includes women-owned businesses and those involved in the supply chain. SHB commits to set aside a minimum of 37.5% of the loan on- lending to WSME, and the bank will receive a grant of $226,000 from the Financial Initiatives Fund for Women Entrepreneurs. (We-Fi) and the Women Entrepreneurs Opportunity Fund (WEOF) – global funding initiatives with the purpose of enhancing access to funding for women entrepreneurs.
Enhance operational efficiency and satisfy international standards
Improving corporate governance and optimizing organizational structure are an indispensable part of SHB strategy. In Mar 2023, SHB signed a Loan Agreement with IFC. As part of the financing Agreement, IFC will provides advisory services to help improve SHB’s corporate governance and risk management to meet international standards.
People-centricity is one of the four strategic pillars (along with reform of regulations, process and procedures; Customer-centricity; IT Platform and Transformation) directed by SHB’s Board of Directors. Over the past time, SHB’s leadership and executives have been strengthened by additional members of the Board of Directors and the appointment of many executives in charge of strategy and digital technology who are profoundly experienced and held senior positions at leading domestic and international financial institutions.
In addition, SHB also invests heavily in training, building a creative and dynamic corporate culture in order to create a positive workplace and promote productivity. As a result, SHB’s both business and operation targets increase impressively in the past few years despite widespread market challenges.
The banking industry plays an important role in leading the economy as it allocates capital resources based on a strict risk assessment and high-quality human resources. Therefore, SHB expects that the pioneering implementation of ESG will not only help the bank grow prudentially and effectively, enhance its brand but also contribute to setting new standards of sustainable development.