Research On The Effect Of Green Credit On Profitability Of Chinese Commercial Banks

Since the "double carbon" strategy was proposed in 2020,"green finance" has become a new trend and impetus for the development of financial institutions such as banking,compared with traditional financial services.The development of green industry conforms to the national policy guidance and reflects the advantages of improving production mode and promoting environmental protection.However,it also needs the support of financial institutions to obtain long-term capital supply to achieve sustainable development.However,commercial banks have a natural interest in the process of participating in the market competition.Whether the green credit business can obtain certain profitability is the key to the green industry to obtain stable financial support.In view of this,this paper studies the impact of carrying out green credit on the profitability of Chinese commercial banks,so as to further optimize the green credit business.This paper discusses the influence of green credit development on the profitability of commercial banks from both theoretical and empirical aspects:In the theoretical analysis part,the concept of green credit and the profitability of commercial banks is defined,and relevant researches on green finance,green credit and the profitability of commercial banks at home and abroad are sorted out and summarized,and the four theoretical bases of green credit affecting the profitability of commercial banks are sorted out.By summarizing the development status,operation mechanism and problems of green credit,it is found that green credit is growing rapidly and steadily at the present stage,but there are still problems such as imperfect supporting system,shortage of professional talents and unreasonable investment of funds.Then,the paper summarizes the influence mechanism of commercial banks’ green credit business on profitability,and believes that the development of green credit can effectively reduce the number of loans to short term,high risk and high yield "two,one,one and leftover" enterprises,and will increase the intensity of loans to environmental protection enterprises with long credit term.Although the quality of credit assets has been improved,the cost of pre-loan examination and post-loan management has also been increased,which may have a negative impact on the profitability of commercial banks at the present stage.In the empirical analysis part,we select the top 18 listed commercial banks with green credit balance and collect their relevant data from 2011 to 2022 for statistical analysis.After panel data unit root test,Hausman test and VIF multiple linear test,fixed effects model was used for data regression and heterogeneity test.The empirical results show that there is a negative correlation between green credit business and the profitability of commercial banks,and the influence is more obvious in large state-owned banks.In order to ensure the objectivity and rigor of the empirical study,endogeneity test and robustness test were carried out.Finally,based on the theoretical analysis and empirical results,the paper draws conclusions and puts forward countermeasures and suggestions to improve the operation mechanism of green credit,optimize green credit business and increase the profitability of banks,so as to better support the development of green finance business of commercial banks and promote the construction of national green finance system.