Page 347 - Ebook HTKH 2024

Figure 3. Overview of BIDV's operations during the period of 2018-2023

Source: BIDV Financial Report 2018-2023
5. Conclusions and recommendations
During the period 2018-2022, there was growth in the scale of green credit at

BIDV. As one of the credit capital supply channels of commercial banks for green
projects—projects that minimize environmental risks—green credit is gradually
becoming one of the effective credit supply channels. With strict regulations from the
project appraisal process to mandatory standards for enterprises and projects, the risk of
this item is lower than that of conventional credit channels. This has increased new profit
sources, raising BIDV's total profit. Consequently, BIDV's operational efficiency has
grown positively. Specifically, BIDV's ROE and ROA have increased while the bad

debt ratio has been minimized.
Despite the achievements, the development of green credit by Vietnamese
commercial banks, including BIDV, still faces several limitations, which in turn restrict
its impact on the bank's overall performance. Specifically, the proportion of green credit
outstanding remains modest. Although there has been remarkable growth in recent
years, the proportion of BIDV's green credit outstanding is still low compared to the

potential that green projects could bring to the bank, making this proportion
disproportionate. The impact of green credit on BIDV's operational efficiency is also
limited. Given its relatively small share compared to BIDV's total outstanding loans,
green credit, while having a positive effect on BIDV's performance, has not yet made a
significant impact. Additionally, the costs associated with the personnel and processes
required to implement and manage green credit are considerable, which has somewhat
reduced the bank's overall profitability.

Some primary reasons
Limited human resources related to green credit at BIDV
In providing green credit for green projects, project appraisal and risk assessment
regarding environmental and social aspects are core issues. However, BIDV's staff
capacity has not been deeply and methodically trained, leading to limited project
appraisal, assessment, and environmental and social risk management. Currently,
339