The Dynamic Influence Of Green Credit Business On The Comprehensive Performance Of Commercial Banks In China

The green transformation is an important path for China’s current economic development transformation based on the ’Two Mountains Theory.’ In the process of green transformation,green finance has become a crucial foundation for supporting the economic transformation and development of various sectors.Whether it is the industrial,agricultural,or service sector,the development of green transformation inevitably means investing a significant amount of capital in product and service innovation.Therefore,the development of green credit is not only crucial for the overall progress of green transformation but also for the performance of various enterprises and commercial banks.From practical experience,the development of environmental protection enterprises always involves a phase of low income and high investment.The provision of green credit by commercial banks to these environmental protection enterprises is bound to follow the market development trend and experience a performance trend of initially declining and later rising.As commercial banks vigorously develop green credit,they must constantly pay attention to the impact of business or product innovation in this field on their performance.With the gradual expansion of green credit business in commercial banks,scholars have begun to pay attention to the impact of green credit business on bank performance.However,previous studies by scholars have been static and have yielded significantly different conclusions due to different perspectives.Some scholars believe that the development of green credit by commercial banks helps diversify their business in new growth areas of the green economy and enhances their social reputation,resulting in a positive effect on bank performance.On the other hand,some scholars argue that the development of green credit can lead to additional costs for banks,reducing their original profits and resulting in a negative effect on bank performance.This article uses panel data from 16 commercial banks from 2007 to 2021 for 15 years to study and demonstrate the impact of the development of green credit by commercial banks on their profitability,risk management level,and comprehensive performance from both short-term and long-term perspectives.By combining normative research with empirical research,the following conclusions are drawn:(1)In the short term,green loans have a significant negative impact on the profitability of commercial banks,but in the long term,they have no significant impact on the profitability of commercial banks.That is,the negative impact of green loans on the profitability of commercial banks will disappear over time.(2)In the short term,green loans have a significant positive impact on the risk management level of commercial banks.In the long term,the positive impact of green loans on the risk management level of commercial banks remains significant,that is,the positive impact of green loans on the risk management level of commercial banks will not disappear over time.(3)In the short term,the impact of green loans on the overall performance of commercial banks is negative but not significant.In the long term,green loans have a significant positive impact on the overall performance of commercial banks.