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 society.
JEL classification numbers: P34.
Keywords: Green credit, Green credit, Bank financial performance.
ISSN: 1792-7552 (Online)