The Influence of Green Credit Scale on the Operating Performance of Commercial Banks

The Influence of Green Credit Scale on the Operating Performance of Commercial Banks

Ting Zhang

(Fuzhou University of International Studies and Trade )

Abstract

In the context of the carbon peak and carbon neutral policy, how to guide the flow of funds to low-carbon environmental protection departments through green credit and realize the green allocation of credit funds has become a key research topic. Using panel data of 15 commercial banks in China from 2007 to 2019, this paper chooses non-linear model to study the relationship between green credit scale of commercial banks and operating performance. The results show that the relationship presents a inverted U-shaped curve and most banks are in the rising phase of the curve, so the development of green credit business helps to improve the operating performance of commercial banks. Further analysis of the income structure reveals that green credit can significantly increase the bank’s net interest income, but has little effect on non-interest income. Accordingly, the paper proposes targeted countermeasures from the bank and government levels in order to promote the development of green finance in commercial banks.

Keyword: carbon neutral policy, commercial banks, non-linear model, operating performance