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

Since China’s reform and opening up,the economic growth rate ranks in the forefront of the world,and increasingly plays an important role in the global economic development,but the long-term extensive growth has also brought a burden to China’s environment,how to coordinate the relationship between environmental protection and economic growth,how to develop a green economy and transform the mode of economic growth has become an important issue for economic development in the new era.At the same time,as an important part of the social economy,the profitability of the banking industry also has an important impact on economic development.Then,the specific impact mechanism and degree of green credit on the profitability of commercial banks,and how we should use green credit to improve the profitability of commercial banks to achieve the purpose of win-win environmental protection and economy,have become topics worth discussing.This paper selects the relevant data of green credit and return on assets of 20 domestic commercial banks from 2012 to 2021 as samples,uses the fixed-effect model and threshold effect model to examine the impact of green credit on the profitability of commercial banks,and further studies the difference in the impact of state-owned banks and non-state-owned banks on their own profitability when carrying out green credit by heterogeneity analysis,and examines the mechanism of green credit on the profitability of commercial banks from the perspective of green reputation.The main conclusions of this paper are as follows:(1)green credit has a significant positive impact on the profitability of commercial banks,and the positive promotion effect is more significant when the green credit ratio level is low,and there is a threshold effect;(2)The impact of green credit on the profitability of commercial banks is heterogeneous,and the positive impact of green credit on the profitability of non-state-owned banks is more significant;(3)There is a mechanism effect of green reputation between green credit and the profitability of commercial banks.Based on the research conclusions,five policy recommendations are put forward for the government and financial regulators:(1)establish unified evaluation standards for green credit,clarify the lending scope of green credit,and unify the directory of green credit industries;(2)Improve green finance regulatory laws and regulations,strengthen post-loan testing and risk management;(3)Improve the green credit information disclosure mechanism of the banking industry and eliminate environmental protection information barriers;(4)Establish a green credit incentive and constraint system for the banking industry to guide the hierarchical and orderly competition between state-owned banks and non-state-owned banks;(5)Cooperate with commercial banks to establish a pilot platform for local green industry loans.Four development suggestions for commercial banks:(1)enrich the types of green credit products;(2)Cooperate with local governments to carry out green industry loan pilot work;(3)Combine the actual operation of their own banks,appropriately adjust the green credit ratio,and take the differentiated development path of green credit;(4)Actively carry out the training and reserve of green credit talents,provide highly professional and targeted green loan services,and strengthen the competitiveness of banks.Compared with the existing results,this paper focuses on the impact of green credit on the profitability of banks,classifies commercial banks as state-owned banks and non-state-owned banks,analyzes the differences between them as different capital market entities in green credit business and their reasons,and obtains targeted research results and conclusions,which enriches the research results in this field.In terms of research methods,this paper uses fixed-effect model,threshold effect model,heterogeneity test and mechanism test to verify the impact of green credit on the profitability of commercial banks,which is a supplement to the previous research results.