The Moderating Role of Green Credit between Business Risk and Financial Performance – A Case Study of Chinese Commercial Banks

It attaches great importance to the development of green finance in China, and the bank's green credit business is just the most important link in the green finance project Most of the literature believe that green credit business helps to reduce the business risk of banks and then improve the financial performance of banks. This paper takes the Chinese banking sector from 2011 to 2020 as a research sample, to explore whether the green business in the banking industry can play a mediating role between banks' operational risk and financial performance. The results show that the higher the debt ratio contributes to the ROA and has no significant impact on the ROE, but the higher NPL hurts both ROA and ROE; the more green business also hurts both ROA and ROE; however, the cross term of debt ratio and green business has no significant relationship on ROA, but has a positive significant impact on ROE; the cross term of NPL and green business has a negative significant effect on ROE. We also provide the suggestion for these findings.