The Impact Of Green Credit On The Business Performance Of Commercial Banks

In recent years,with the rapid development of the economy,the resulting environmental problems have become increasingly prominent.There is a contradiction between the development of the economy and the maintenance of a stable ecological environment.In order to effectively solve this contradiction,the financial sector has launched a model that combines economic development and environmental protection,namely green finance.The easiest way to achieve green finance is to carry out green credit,so green credit has attracted more and more attention.Although China’s green credit has been developed for more than ten years since it was proposed,its proportion in China’s overall bank loans is still at a low level,and the proportion of green credit in most banks is still less than 10%,mainly because the benefits brought by green credit are not clear,leading to the low enthusiasm of financial institutions,mainly commercial banks,to implement green credit,Constantly exploring the impact of green credit on the business performance of commercial banks is very beneficial to the development of green credit in China.Firstly,based on the background and significance of green credit research,this paper introduces relevant concepts and combs the domestic and foreign literature on green credit and commercial banks’ operating performance,sorts out the theoretical basis of green credit,expounds the current situation of China’s green credit development,and divides the measurement indicators that affect commercial banks’ operating performance into profitability and operational risk.Secondly,on the basis of existing research,this paper analyzes the impact mechanism of profitability and operational risk,and puts forward assumptions for empirical research.In the empirical study,this paper selects the data of 20 A-share listed commercial banks from 2011 to 2020 as samples,builds a non-balanced panel data model based on different impact mechanisms,and carries out random effect model regression.The empirical results show that green credit will improve the profitability of commercial banks and reduce the operational risk of banks.The model has passed the robustness test,and the results are stable,but the heterogeneity analysis shows that,The impact of green credit on the business performance of different commercial banks is different.Then take Industrial Bank as a typical case for analysis,and compare its profitability and operational risk indicators with the average value of the banking industry respectively,so as to study the impact of industrial bank’s green credit on its operating performance,and draw the conclusion that green credit increases the profitability of Industrial Bank and reduces the operational risk of commercial banks,which is consistent with the empirical analysis conclusion.Finally,this paper puts forward countermeasures and suggestions from the perspectives of banks and governments,and suggests that we should strengthen the development of green credit,accelerate the construction of a diversified green credit product system,improve the legal system of green credit,improve the information disclosure system,and increase the support for banks’ green credit business,so as to promote commercial banks to develop green credit and effectively deal with the existing risks.