The Effect of Green Banking on Bank Profitability
DOI:
https://doi.org/10.59890/ijma.v4i3.14Keywords:
Green, Banking, ProfitabilityAbstract
This study aims to examine the effect of green banking on bank profitability. The study employed quantitative methods with documentation techniques in collecting secondary data obtained from annual reports and corporate sustainability reports. The theoretical basis used in this study is stakeholder theory. The research sample consisted of 44 banks listed on the Indonesia Stock Exchange (IDX) with a total of 173 observations during the 2021-2024 period. Data analysis was conducted using panel data regression with the selected model, a fixed effect model (FEM), using Eviews 12. The results showed that the implementation of green banking, along with control variables, simultaneously affected profitability. However, partially, green banking did not show a significant effect on profitability. This finding indicates that the implementation of green banking has not been able to increase bank profitability because the practice has not been fully integrated into the main business strategy, which has a direct impact on financial performance, especially profitability. Furthermore, the benefits of implementing green banking tend to be indirect, such as an improved reputation among stakeholders, whose impact on profitability is more likely to be seen in the long term.
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