Sustainability Stories from SeABank's Development Journey

10:04:13 AM | 6/11/2024

International economic integration presents significant prospects yet imposes tough challenges to Vietnamese companies, especially competitive pressures. Sustainable development (characterized by environmental, social, and corporate governance - ESG) serves as a conduit to improve the performance, competitiveness and reputation of a company in the market, enables it to build long-term sustainable values and creates positive impacts on the environment and society. The banking sector, the economic mainstay, inclusive of entities like SeABank, is not exempt from this paradigm.

The newly established headquarters of SeABank

In recent years, ESG has become a prominent trend in the global financial market as investors and stakeholders are more aware of their investment impacts on the environment, society and corporate governance. As a financial intermediary that supplies capital for the economy, banks are considered an important bridge and link for ESG application, thus bringing many benefits to the economy and for their own.

In fact, it is not until now that banks have implemented ESG, but many banks, including SeABank, have adopted it for years to move towards sustainable development aligned with social and community responsibility, optimized corporate governance, prioritized green products and services, and environmentally friendly, green project financing. ESG criteria help SeABank quantify each goal more clearly and plan the sustainable development strategy, hence enhancing its reputation and competitiveness in the market. As a result, many international financial institutions such as DFC and IFC have trusted to invest up to nearly US$600 million in SeABank which was assigned Ba3 credit ratings by Moody's in many important categories with a stable development outlook.

Enhancing corporate governance

Governance is not only a business issue but also a decisive factor for the success and sustainability of the banking system. Being fully aware of this, SeABank has constantly improved its corporate governance, optimized its operating model, strengthened risk management, invested in human resource development and ensured employee rights as well.

SeABank has led the banking sector in adopting a governance model built on three lines of defense, maximized by self-inspection, monitoring and cross-checking activities between lower lines in many forms to ensure sustainable development goals.

To ensure capital adequacy and sustainable liquidity, SeABank has taken the lead in applying Basel III international risk management standards and completed all three pillars of Basel II first. The Basel II and III implementation and application has enabled SeABank to build a solid foundation for risk management and achieve strong, safe and effective development. This also demonstrates the resolve of SeABank's leadership to fully meet international standards and make its operations active and transparent.

In addition to adhering to Vietnamese Accounting Standards, SeABank proactively implements the International Financial Reporting Standards (IFRS) in the preparation and presentation of its financial statements. This approach fortifies risk management and control mechanisms, enhances the capacity to quantify and administer business outcomes, and lays the groundwork for judicious resource distribution, thereby optimizing capital efficiency.

SeABank has consistently witnessed an enhancement or preservation of its credit rating by Moody’s. During the most recent evaluation phase, Moody’s perpetuated the assignment of Ba3 credit ratings to SeABank across numerous critical categories, while also conferring a stable developmental prognosis. This underscores Moody’s anticipation of SeABank’s robust and escalating capital sufficiency.

In addition to applying advanced risk management models and methods and complying with international standards, SeABank pays special attention to the organizational model and executive personnel and carries out well-prepared investment for human factors. SeABank's organizational structure has been constantly improved to enhance management and operational capacity. The current Board of Management includes very experienced executives who have worked for a long time and made important contributions to SeABank's development, and this will help SeABank further enhance its competitiveness towards sustainable development.

Knowing that personnel is one of the key factors to measure corporate sustainability, SeABank always places personnel at the heart in the goal of building a cohesive, professional and humane working environment. Each employee is trained, equipped with the most basic knowledge, soft skills, professional expertise and management capacity from in-house trainers as well as leading training partners in Vietnam such as Crestcom Vietnam and iChange Center. SeABank's remuneration policy is competitively updated and adapted to worthily reward employees for their contributions and dedication to the bank's development, including annual salary increase to make it competitive in the market, SeACare comprehensive healthcare insurance, preferential loans for employees - SeAStaff Privilege, periodic health checkups, employee stock ownership plan - SEAESOP and a series of thanking programs, and organizational culture development activities.

Prioritizing green banking

Placing customers as the center of service, SeABank aims to "tailor" products and services for each specific customer segment and customer group, especially aiming for green banking. To foster green finance, SeABank focuses on developing green financial products and services. Particularly, the deployment of electronic banking on mobile applications like SeAMobile/SeAMobile Biz/SeANet not only increases convenience to customers but also helps reduce paper and ink, thus facilitating it to optimize costs and demonstrate its strong commitments on environmental and social responsibility.

Focusing on the sustainable development strategy, SeABank prioritizes resources to approach and cooperate with environmentally friendly, green projects, with an emphasis on energy-efficient fields and minimization of energy loss.

Employees are proud to wear the SeABank uniform

By applying ESG, SeABank can expand the market and develop credit products when it receives green capital flows from international financial institutions. To date, SeABank has received up to nearly US$600 million from many international financial groups/institutions such as IFC and DFC and many international investment funds. With this fund and its internal capacity, SeABank has provided many flexible financial solutions, optimizing the use of capital for small and medium-sized enterprises (SMEs), especially women-owned businesses. In addition, SeABank concentrates on lending green credit projects, fighting climate change, providing green home loans to personal customers, hence bringing positive impacts on socioeconomic development and the environment.

To manage environmental and social impacts of its lending activities, SeABank has integrated environmental and social procedures into its credit risk management process. Accordingly, SeABank issued the Exclusion List which states fields are not lent - fields that leave negative impacts on the environment and society - and probed into all credit transactions subject to this list. Transactions subject to the Exclusions List continue to be assessed by SeABank for environmental and social risks and proposed specific mitigation measures if risks exist. SeABank aims to become a pioneering bank that is active in environmental and social risk management to spread the spirit of environmental and community protection to all customers and partners.

Toward good values

In addition to strong business performance, SeABank has persistently pursued a development strategy that brings sustainable values to the community and society. With the working principle “For the Community" - one of its five core values, SeABank has launched many annual charity activities for many years, including the Springtime of Love, SeABanker for Children, Day of Love September 7, Citizens' Week and Warm Blankets for Early Winter. Millions of valuable gifts are a timely source of encouragement and stimulation to the needy.

IFC and SeABank sign a cooperation agreement in Singapore

During the COVID-19 outbreak, SeABank donated nearly VND90 billion to support local authorities and people affected by the plague across the country. In addition, seeing severe epidemic impacts burdened by businesses and people, SeABank responded to the State Bank of Vietnam (SBV)’s rate cut policy. In 2021, the total amount of interest reduced for customers was VND287 billion, equal to 552% of its commitment. 58,522 customers have their loans worth VND79,237 billion had their interest rates slashed.

Keeping the green environment is also a top priority for SeABank in its journey towards sustainable development. Joining hands with the Government to “plant one billion trees in 2021-2025”, SeABank has handed nearly 300,000 trees to Thanh Hoa, Dak Lak, Ha Tinh and Long An provinces to support afforestation and economic development and conserve biodiversity resources.

Not only planting forests, SeABank also sows "green seeds' ' of hope and extends the dream of pursuing education for hundreds of poor students. The SeABank Dream Nurturing Scholarship Fund, established in 2015 with the hope of lighting up future generations, has supported more than 200 poor but studious students each of whom is given VND12 million a year until high school graduation. The total value of scholarships (including lifetime universal education scholarships and startup scholarships) awarded by SeABank is more than VND10.57 billion.

Additionally, SeABank has collaborated with many regions in the construction of charitable residences for the economically disadvantaged or near-disadvantaged, facilitating the realization of their aspiration for a decent dwelling. As of the present, assistance has been extended to 700 underprivileged households across provinces such as Ha Tinh, Nghe An, Dien Bien, among others.

Celebrating its 30th anniversary in 2024, SeABank will continue to make ongoing efforts to improve corporate governance, diversify products, enhance service quality, and provide many flexible financial solutions for customers to optimize their capital use while bringing good values to the community and society. These achievements will be the premise for SeABank to achieve stronger growth and more sustainable development and contribute more to the overall development of the country.

Le Hien  (Vietnam Business Forum)