Vietnam Prosperity JSC Bank ( VPBank ) is advancing negotiations for a sustainability-linked loan of around US$1.2 billion, according to sources familiar with the matter, in a deal set to become one of the largest environmental, social and governance ( ESG )-tied financings in the country’s history.

A VPBank source, speaking on condition of anonymity due to the confidential nature of the discussions, confirmed to The Asset that the transaction is currently “under process”. The Hanoi-headquartered lender has reportedly appointed more than a dozen international banks to underwrite the three-year trade facility.

Japan’s Sumitomo Mitsui Banking Corporation ( SMBC ) is serving as the sole coordinator for the deal. The transaction highlights the strengthening ties between the two institutions, following the acquisition of a 15% stake in VPBank by SMBC’s parent company, Sumitomo Mitsui Financial Group.

Additionally, the Japanese banking giant currently holds a 49% stake in FE Credit, Vietnam’s largest consumer finance firm by market share. SMBC had gradually invested almost US$1.4 billion for the holding, with the remaining 51% controlled by VPBank.

The proposed US$1.2 billion facility aligns with VPBank’s strategy to position itself as a primary driver in Vietnam’s green transition. The bank has increasingly prioritized credit for green initiatives, women-led small and medium enterprises, and socially responsible projects to support the national target of reaching net-zero emissions by 2050.

The scale of the deal, analysts note, reflects the growing resilience of ESG-linked financing in emerging markets. While global growth for such instruments has stabilized, sustainability-linked loans, according to data from ING, are projected to reach approximately US$160 billion in 2026, up from US$139 billion in 2025.

The deal by the bank follows a period of unprecedented activity in international capital markets for the lender. VPBank, by the end of 2025, had successfully mobilized nearly US$5.2 billion in sustainable capital from international markets.

In 2025 alone, the bank raised more than US$2.36 billion, headlined by a landmark US$1 billion ESG syndicated loan. That facility included an accordion option to increase the facility size, marking the largest transaction of its kind ever executed by a private Vietnamese company.

VPBank’s financial performance continues to provide a robust foundation for such large-scale syndications. The bank recorded a consolidated pre-tax profit of 30.6 trillion dong ( approximately US$1.2 billion ) in 2025, representing a 53% year-on-year increase. Total assets reached nearly 1.26 quadrillion dong by year-end.

The bank’s sustained momentum recently earned the bank significant international recognition. On March 31, it was named the Best Sustainable Finance Issuer in Vietnam 2026 by The Asset at its Triple A Awards. The accolade recognizes VPBank’s capacity to mobilize multi-billion-dollar international capital and its implementation of a comprehensive ESG risk management framework, including climate-related financial disclosures.