An Analysis Of The Influence Of Green Credit On The Profitability Of Commercial Banks

In 2020,the concept of "carbon peaking and carbon neutrality" was introduced for the first time,and in 2021,the "double carbon" target was included in the 14 th Five-Year Plan.In this context,this paper focuses on the impact of green credit on the profitability of commercial banks,which is one of the "three principles",and how to better address this issue and how to better develop green credit.This paper firstly presents three theoretical rationales on the question of what kind of correlation exists between green credit and commercial banks’ profitability.Secondly,it explains the development trend,legal basis and industry flow of green credit in China in recent years,and then divides commercial banks in China into three types,analyses their current situation of profitability and implementation of green credit in turn,and finds out that green credit exists in terms of laws and regulations,technological innovation and data disclosure.In this context,the problems of green credit in terms of laws and regulations,technological innovation and data disclosure are identified.On the basis of the above,the paper analyzed the internal and external factors influencing the profitability of commercial banks and the impact of green loans on the profitability of commercial banks at direct and indirect levels.Finally,the panel data of 20 commercial banks over the 10-year period from2012 to 2021 are collected for empirical research.After comparing the F-test and Hausman test,we decided to establish an individual fixed-effects model,and further adopt the multiple counteraction and panel unit root test to ensure the accuracy and reliability of the data,while regressing the banks in groups,and then analyze the relationship between bank heterogeneity and green credit.The regression results demonstrate that,firstly,the impact of green credit on the profitability of commercial banks is negative.Secondly,green credit has a positive correlation for large commercial banks with better asset quality and larger size,a significant negative correlation for national joint-stock commercial banks with slightly higher NPL ratios,and no significant correlation with regional-type commercial banks.Based on the above analysis,this paper puts forward relevant suggestions and measures in terms of legal policies,market supply and demand,risk control and cost,etc.,in the hope of promoting the sustainable development of green credit.