On The Impact Of Green Credit On The Financial Performance Of Commercial Banks In China

As the continuous development of human industrialization,the conflict between social development and natural environment is becoming more and more serious,thus,the green development has been widely recognized by the international community.With the function of bank resource allocation,green credit plays an important role in promoting the green transformation of economic development,which also shows the social responsibility and environmental protection responsibility of banking financial institutions.At present,with the green development set as the basic national policy,the green credit has developed rapidly due to the policy,and the construction of supporting policies and mechanisms has been continuously improved and deepened.Green finance pilot zone,carbon emission trading market and carbon emission reduction support tools have been launched one after another,so as to lay a good development foundation for green credit.This paper focuses on studying the mechanism and impact of green credit on bank financial performance,putting forward reasonable suggestions for the existing problems,so that it can improve the bank financial performance,the endogenous driving force as well as the benign and rapid development of green credit.This paper,first of all,introduces the emergence and development of green credit,expounding the theoretical and practical significance of the study.With the definition and discussion of the relevant concepts and theories about green credit,this paper summarizes and learns from the research methods and achievements of relevant literature to analyze the problems existing in the development of green credit business of commercial banks in China,such as the imperfect incentive mechanism,the unsound information disclosure and communication mechanism and less product innovation according to the relevant theories of sustainable development.Therefore,this paper discusses the impact of green credit on bank financial performance with assumptions from four aspects: growth,liquidity,security and profitability.The empirical part of this paper takes the data of 16 listed commercial banks from 2011 to 2020 as the sample,calculating the dimensionality reduction of the set relevant factors through the factor analysis method according to the four paths of green credit affecting the financial performance of commercial banks selected by demonstration.Thus,it can select comprehensive financial performance and common factors to build regression models respectively with empirical analysis.It is shown in the empirical results that(1)The improvement of green credit ratio has a negative effect on comprehensive financial performance;(2)The negative effect of credit on green growth;(3)The increase of green credit ratio has a negative effect on liquidity;(4)The improvement of green credit ratio has a positive effect on security;(5)The increase of green credit ratio has a negative effect on profitability.Finally,it draws relevant conclusions with the results of theoretical analysis,practical summary and empirical analysis,putting forward some reasonable suggestions for the government and banks from the perspectives of system construction,mechanism establishment and application of financial tools.