Analysis Of The Impact Of Green Credit On Financial Performance Of Commercial Banks

With the development of global economy,environmental pollution and ecological deterioration are becoming increasingly serious.Then how to achieve the balance of economic development and environmental protection has attracted the public attention.In 2016,as president of the G20,China added green finance into the G20 issue,to study how to promote the development of green finance in accordance with their own characteristics,improve the degree of greening of the global financial institutions and enhance the ability of capital market to allocate resources to green industry.As part of green finance,green credit has been implemented for 10 years in China from 2007 to 2016.In response to the call of green credit,listed banks in China disclose the bank's social responsibility report every year,which summed up the green action over the past year.Therefore,it is of great practical significance to study the issue of green credit with its relatively open information.Most research on green credit is focused on qualitative research,such as the necessity,the theoretical basis,the existing problems and the international experience research.On the basis of qualitative research,the paper makes a quantitative analysis on the impact of the green credit on the financial performance of commercial banks in the short term.Firstly,this paper introduces the concept of green credit and the Equator Principles,and analyzes the theoretical basis of the green credit from three aspects,which contains corporate social responsibility,environmental risk management of banks and sustainable development of commercial banks.Secondly,the paper introduces ten years development of green credit from two aspects,the external policy and the internal practice development.The latter consists of the green credit policy,the green credit product innovation and the effectiveness of green credit of commercial banks.At the same time,the paper summarizes the existing problems of the green credit practice in our country.Thirdly,the paper builds the financial performance system of commercial banks from four perspectives of profitability,safety,liquidity and growth,and analyzes the mechanism of the effect of green credit on financial performance from these four aspects.Fourthly,the paper uses SPSS20.0 and Eviews8.0 to analyze the data of 14 listed commercial banks during 2012 and 2015.This paper selects 13 financial indicators to build the financial performance evaluation system.Through the factor analysis,the comprehensive score of the 14 banks' financial performance can be got,which pave the way for the following regression analysis.The regression analysis concludes that the green credit has a negative effect on the bank's financial performance in the short term.This paper discusses the causes of the contradiction between the theoretical analysis and the empirical analysis from the perspective of existing problems of green credit and the empirical sample.Finally,the paper summarizes the above conclusion,and gives some policy suggestions on the existing problems of green credit and the realization of long-term financial performance.The policy recommendations embrace two aspects,the external and macro support of government and society and the microcosmic improvement of bank's own construction and management.