As people become more aware of the alarming environmental problems, actions to promote a sustainable economy and a better ecological environment are called. One of the most promising ways is green credit, which positively impacts the environment. This paper investigates how green credits in banks’ portfolios affect their performance, providing evidence from banks operating in Vietnam. The research is based on the panel data of 30 selected banks out of 49 banks operating in Vietnam from 2015 to 2022 from consolidated financial statements and annual reports. The study uses panel unit root tests and a fixed-effects model with moderation. The Hausman and joint F-test research results confirm that the fixed-effects model was the most appropriate method for identifying how green credit impacted the relationship between various factors and Vietnamese bank performance. Our research shows that green credit affects bank performance. Specifically, the presence of green credits in bank loan portfolios reduces the impact of the loans-to-deposit ratio, but not the bank size and capital adequacy, on both banks’ ROA and ROE, which implies that banks should implement green credit policy to mitigate the liquidity risks.