The Impact of Green Finance on Commercial Bank Profitability: An Empirical Analysis Based on Chinese Commercial Banks

DOI

10.2991/978-94-6463-874-5_47How to use a DOI?

Keywords

green finance; commercial bank profitability; U-shaped relationship

Abstract

As global environmental issues and the contradiction between development and the carrying capacity of resources and the environment become increasingly prominent, the development of green finance has become an inevitable choice for achieving coordinated economic and environmental development. Sustainable finance leverages specialized instruments like eco-friendly loans to drive economic decarbonization. This approach has become an essential strategy for facilitating the shift in national development paradigms and accelerating industrial modernization toward environmentally conscious practices. The sector represents both an innovative financial mechanism and a critical response to pressing global ecological challenges. Green finance extends beyond environmental benefits, significantly influencing commercial banks’ profitability and operational frameworks. This study investigates how green finance influences bank profitability by compiling and evaluating data from 14 Chinese banks from 2014 to 2022. The sample includes the “Big Five” state-owned banks (ICBC, ABC, BoC, CCB, and BoCom) alongside joint-stock commercial banks like China Merchants Bank and SPDB, which examines how green finance initiatives influence the profitability of these banking institutions. Empirical findings reveal a U-shaped link between green finance and bank profitability. While green finance may temporarily reduce bank profits, it enhances long-term financial performance. With these insights, the research presents pertinent suggestions to both the administration and private lenders for fostering eco-friendly financial strategies. This study offers data-driven insights and conceptual backing for sustainable finance transformation.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Yinglin Song
PY  - 2025
DA  - 2025/11/03
TI  - The Impact of Green Finance on Commercial Bank Profitability: An Empirical Analysis Based on Chinese Commercial Banks
BT  - Proceedings of the 2025 International Conference on Financial Innovation and Marketing Management (FIMM 2025)
PB  - Atlantis Press
SP  - 392
EP  - 400
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-874-5_47
DO  - 10.2991/978-94-6463-874-5_47
ID  - Song2025
ER  -