The Impact Of Green Credit On The Profitability Of Commercial Banks

Green development is an inevitable trend of sustainable development in today's society,and an important tool to achieve green development is green finance.The green credit business carried out by commercial banks is one of the important contents of green finance and it is important to promote social and economic development.Commercial banks is one of the important financing channels for all kinds of enterprises,and also a financial institution that carries out green credit business.The development of green credit business in the banking sector solves the financing problem for green production enterprises,responding to the call of green development.It also expands the scope of business and opens up a new way of operation.Compared with developed green credit in foreign countries,we still have a certain gap,and there is still much room for improvement.On the one hand,the green credit business adds a more complex and rigorous examination and approval process,which will undoubtedly increase the operating costs of banks.On the other hand,the expansion of loan scale to a large extent will reduce the impact of increasing operating costs,and even enhance profitability.If commercial banks carry out green credit business,their profitability will be improved and their enthusiasm for participating in green finance will be increased.This paper summarizes the literature on green credit at home and abroad,deeply analyzes some theories related to green credit,and expounds in detail the specific situation of Chinese commercial banks' green credit business and the specific problems to be solved.Stata measurement software is used to conduct regression analysis on green credit balance and other relevant panel data of 16 listed banks from 2011 to 2017.The empirical results show that the green credit balance of commercial banks is positively correlated with the profitability,but the coefficient is small,indicating that the development of green credit business only brings a small increase in the profitability.However,considering that China's commercial banks have a short time to carry out green credit business,there is room for further improvement.From the long-term perspective of sustainable development,commercial banks should take the initiative to carry out green credit business,continuously improve its development,and organically combine green finance with their own development.At the end of this paper,relevant suggestions are put forward from three aspects.Stakeholders cooperate with each other,hoping that green credit can promote green development and bring considerable benefits to commercial banks.