The impacts of green credit policy and competition on bank profitability in Indonesia
by Rahmat Siauwijaya; To Jaya Yusanto; Genoveva Cindy Grania
Global Business and Economics Review (GBER), Vol. 32, No. 2, 2025

Abstract: We are exploring the impacts of green credit policy, bank competition, and bank-specific variables on bank profitability in Indonesia. We found that the green credit policy did not hinder the bank from distributing credit. Instead, it can help banks distribute high-quality credit, improving their profitability and decreasing non-performing loans. We also found that competition can improve bank profitability. Bank-specific variables such as bank size, capitalisation, and cost efficiency correlate to increased bank profitability. Meanwhile, an increase in non-performing loans can reduce bank profitability, and bank profitability is unaffected by liquidity, diversification, and labour productivity.

Online publication date: Mon, 03-Feb-2025

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