The concept of green
environmental protection and sustainability is deeply rooted in China. Green
credit has become an important social issue in recent years. Most Chinese
financial institutions are also actively participating and investing in this
field, especially banks. In order to explore the correlation between banks'
participation in green credit business and banks' financial performance, this
paper collects the green credit balance, green credit ratio, return on total
assets, non-performing loan ratio and other data of 16 major listed commercial
banks in China from 2011 to 2019. At the same time, econometric modelling is
built using the system GMM regression analysis method. This focuses on the
impact of commercial banks' green credit business on their profitability. The
final research results certify that banks' increasing investment in green
credit has a positive impact on promoting profitability, both showed a positive
correlation. Therefore, this paper suggests that banks should focus on the
development of green credit business, which is beneficial to both the financial
performance of banks and the construction of an environmentally sustainable
JEL classification numbers: P34.
Keywords: Green credit, Green credit, Bank financial performance.