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

Firstly,this paper summarizes the development situation and existing problems of green credit in China.Then,on the basis of theoretical analysis of the influence mechanism of green credit on the profitability of commercial banks,using the panel data of four large state-owned commercial banks and nine small and medium-sized joint-stock commercial banks from 2008 to 2017,this paper empirically examines the effect,mechanism and heterogeneity of the impact of green credit on the profitability of commercial banks through the individual fixed effects regression model.The results show that:(1)although the development of green credit in China has made some progress in policy system and scale growth,the implementation effect in proportion adjustment,product innovation and information disclosure is still unsatisfactory,reflecting the lack of endogenous motivation of commercial banks.(2)Empirical results show that the issuance of green credit will generally weaken the profitability of commercial banks and the impact is heterogeneous: the proportion of green credit is positively correlated with the profitability of large state-owned commercial banks,but negatively correlated with the profitability of small and medium-sized joint-stock commercial banks;the withdrawal of the loans for industries with high pollution,high energy consumption and overcapacity can improve the profitability of commercial banks;at present,green credit can positively affect the profitability of large state-owned commercial banks through the cost-income effect,while on the contrary for the whole banking industry and small and medium-sized joint-stock commercial banks.In terms of policy suggestions,the state level should establish and improve legal norms,strengthen the cultivation of related markets and remove obstacles to information sharing;commercial banks should establish green credit awareness,improve management mechanism,improve product innovation level,and strengthen information disclosure,so as to mitigate the negative impact of the cost-benefit effect of green credit on the profitability of commercial banks from both internal and external aspects.