The Impact Of Launching Green Credit Business On Its Profits

In recent years,China's rapid economic development and extensive production methods have caused great damage to the ecological environment,and various types of environmental problems have occurred frequently.The environmental issue urgently needed to be solved.Finance has a huge driving force on China's real economy.The bank is also the core of the financial system and the main source of funds for social financing.To control the flow of funds to environmentally friendly companies,will inevitably be achieved through banks.This has led to the development of green credit in our country.In theory,commercial banks Practicing green credit business will increase their own auditing procedures and increase their operating costs,thus reducing the profitability.However,the expansion of loan size may offset the increase in the cost of developing green credit business,and thus increase its profitability.Under the background of the new normal of China's economy,Whether the implementation of green credit really have the profitability of commercial banks in China have an impact,its influence mechanism is like? In this paper,in 2009--2016 years,Industrial Bank,China Industrial and Commercial Bank,Agricultural Bank of China and other 16 listed commercial banks as sample data,and empirically analyzes the green credit ratio and return on assets,and finds that the green credit ratio is positively related to the return on bank assets.The implementation of green credit by banks will help increase their profits.At the same time,he coefficient of green credit ratio is still relatively small,indicating that the increase in the scale of green credit can bring about a smaller increase in the profitability of commercial banks.In the long run,banks' development of green credit business and the fulfillment of their social responsibilities will help build differentiated competitive advantages,bring good reputation effects to banks,and increase the long-term profits of commercial banks.