The Impact Of Green Credit On The Profitability Of Commercial Banks

In the situation of rapid economic development in China,the coordinated development between environment and economy has become an urgent need to solve the problem.In this context,this requires the real economy must be low-carbon environmental protection industry development,green transformation.On the one hand,in response to the concept of green development,commercial banks must act as a medium of financing,and green credit as a major means of environmental risk prevention and control,to achieve a large number of green investment and financing needs of society while maintaining their own sustainable development,to inject new vitality into the financial market.On the other hand,because the green credit product system is imperfect,the commercial bank internal management and so on has restricted its own management development.This paper adopts the fixed-effects panel model to explore the impact of green credit on commercial bank profitability,and at the same time,in order to eliminate the impact of the epidemic situation,carries out an empirical analysis of the panel data of19 listed commercial banks in 2012-2021,then classifies the sample data into large commercial banks and small and medium commercial banks,and conducts a heterogeneity test,and draws the following conclusions:(1)green credit has a certain negative impact on the profitability of commercial banks.It may be that the development of green credit in China is at the primary stage,mainly relying on the commercial banks themselves as the fund suppliers and relying on government policies for promotion,and at the same time,due to the unreasonable management system of commercial banks,insufficient understanding of green credit and other reasons,green credit has little impact on the profitability of commercial banks.However,to achieve the goal of "dual carbon" is an inevitable trend of development,and green credit business will certainly promote the green transformation of the industry;(2)In the heterogeneity test,the results show that there is heterogeneity performance,for large state banks,green credit is negatively correlated with profitability,and positively correlated with profitability of small and medium-sized banks.The reason for the difference may be that the large commercial banks are larger in scale and stronger in credit ability,and they are more likely to realize the national interests than their own interests However,the ability of small and medium-sized commercial banks to resist risks is relatively weak.Compared with actively developing green credit,they are more inclined to maintain their own business stability and will be more cautious in issuing green credit,prioritize green credit projects that generate revenue.Based on this,the following suggestions are put forward: firstly,the relevant legal systems shall be established and improved to strengthen the supervision and restriction of the financial market;secondly,a good market atmosphere shall be created,the credit market environment shall be optimized,and the support for environmental finance,i.e.green finance shall be intensified;thirdly,the innovation of green credit products shall be encouraged to cultivate green financial talents;fourthly,the scale of bank assets shall be maintained at a reasonable range to improve the quality of bank assets.It is hoped that the above suggestions can play a certain role in ensuring the realization of "dual carbon" goal,so as to improve the profitability of commercial banks and promote sustainable economic development.