Research On The Impact Of Green Credit On The Profitability Of Commercial Banks

In recent years,with the rapid development of economy,extensive economic development mode has caused tremendous damage to the environment of our country.The uncoordinated development of economic and social environment has become a serious problem in the process of economic development of our country.In the 13 th Five-Year Plan,it is clearly required to change the mode of economic development and promote the development of economy in a green,circular and sustainable direction.At the G-20 Summit in Hangzhou,China took green finance as the focus of economic development and emphasized the importance of green credit to China's economic development.Under the background of supply-side reform,the implementation of green credit can not be separated from financial institutions,which is an important financial hub.As the core of the financial system,commercial banks can guide the flow of funds through green credit,promote more funds to environmental protection enterprises,so as to optimize the structure of enterprises.This paper regards green credit as an important tool for the sustainable development of China's economy.By analyzing the impact of green credit on the profitability of commercial banks,it is hoped that commercial banks can actively implement green credit policy and promote the green development of China's economy.This paper takes the impact of green credit on commercial banks' profitability as the research object.Firstly,it analyses the basic theory of commercial banks' implementation of green credit from three aspects: corporate social responsibility theory,sustainable development theory of financial institutions and equatorial principle.It synthesizes the influencing factors of bank's profitability,and analyses the mechanism of green credit's influence on commercial banks' profitability.Loans will affect commercial banks' profitability through four aspects: cost effect,potential revenue effect,intermediate business profitability effect and reputation effect.Next,by combing the development status of green credit in commercial banks,we can conclude that there are still some deficiencies in laws and regulations,product innovation,information communication and incentive system.In the empirical aspect,based on collecting and collating the data of 11 representative banks from 2009 to 2017,this paper uses the random effect panel model to analyze the impact of green credit on the profitability of commercial banks,and concludes that the development of green credit business helps commercial banks to improve their profitability.Since the implementation of green credit in 2007,although China has made some achievements in the green credit policy,there are still some shortcomings in the regulatory policy,information disclosure,product innovation and incentive system.Based on the empirical analysis and the deficiencies of the development of green credit,this paper puts forward some policy suggestions for the development of green credit business and the increase of profitability of commercial banks in China from the perspective of government and commercial banks' own construction.In order to promote the development of China's economy towards a green direction.