Research On The Impact Of Green Credit On The Profitability Of Commercial Banks

With the rapid development of China's economy,China has made remarkable achievements in the field of economic construction.But behind the rapid economic growth,we have also paid a considerable price.At present,economic development is mainly carried out through high consumption of the environment and economic development at the expense of ecological and environmental resources,which is not conducive to the sustainable development of the country.In 1992,the United Nations communicated the concept of green and low-carbon sustainable development to countries.Countries are also actively protecting the environment and achieving consensus on economic development and sustainable development of society.From economic development with high consumption of resources to green and sustainable economic development,the integration of economy and environment has become an important subject for global research.Green credit,as one of the main loans,guides banks to pay attention to credit projects and the natural environment,and contributes to the development of green economy.In this context,this article studies the impact of green credit on the profitability of commercial banks through a combination of theory and empirical methods.The first is an introduction,which introduces the research background and research significance,and reviews the relevant research progress from three aspects: the concept of green credit,measurement standards,and the impact on the profitability of commercial banks.The second is the concept and theoretical basis,explaining green credit and profitability,and introducing the related theoretical basis of green credit.Then it analyzes the impact mechanism of green credit on the profitability of commercial banks.In empirical research,by collecting panel data of 18 listed commercial banks from 2006 to 2018,and using a double difference model,the impact of green credit policies on China's business on profitability was analyzed.Finally,suggestions and countermeasures.In order to study the effect of policy enforcement on the profitability of China's commercial banks,this paper uses green credit policy as the background of research.As the current situation of China's commercial banks for the implementation of green credit policy,we have seen many problems such as the continuous improvement of the green credit system,the increasingly abundant green credit products,the continuous emergence of green credit effects and the obstacles to the development of green credit.The influence of green credit policy on the profitability of commercial banks is discussed theoretically.Green credit mainly affects commercial banks' operating costs,credit structure,and credit risk.Among them,green credit has a negative effect on the profitability of banks in the short term by affecting the operating costs of commercial banks;it has a positive effect in the long run;green credit has a positive effect on the profitability of commercial banks by adjusting the credit structure;Risk has a positive effect on the profitability of commercial banks.This paper handles the enforcement of green credit policy by collecting panel data of 18 listed commercial banks from 2006 to 2018 and using a double difference model.The study found three important conclusions.First,the implementation of green credit policies will have a positive effect on the profitability of commercial banks,and the net benefits brought by the policies will gradually weaken over time,indicating that banks are currently lacking government incentives while actively promoting green credit..The second is the T-test results of the green credit balance before and after the promulgation of the green credit guidelines,indicating that free riders will appear in the green credit process,and the emergence of these commercial banks will cause the government to provide them with a free corporate image publicity Cause waste of policy resources.Third,the non-performing loan ratio of commercial banks actively participating in green credit declined significantly,and profitability was negatively related to the non-performing loan ratio.Through theoretical and empirical tests,the following suggestions are put forward to speed up the implementation of green credit.First,we need to strengthen information sharing and disclosure,formulate unified statistical standards,give full play to the supervision and public opinion of the media and the public,improve the communication mechanism between relevant departments,and establish an information sharing platform.The second is to widen the development of green credit business,forcing the transformation of the two high and one surplus enterprises and optimizing the industrial structure,while accelerating the adjustment of commercial banks' own credit structure.Suppressing the increase in the rate of non-performing loans,thereby improving its profitability.Second,we need to broaden the development of green credit business,force the transformation of two high and one surplus enterprises and optimize the industrial structure while accelerating the adjustment of commercial banks' own credit structure.Commercial banks also need to continue to develop green credit products to meet the growing needs of domestic and international customers,so that green credit becomes another growth point of bank profits.Third,we should improve the incentive mechanism of the government,let the commercial banks participant actively into green credit,and enhance their policies to improve their bank reputation,accelerate the development of banks,and improve their profitability.