Title: The impacts of green credit policy and competition on bank profitability in Indonesia

Authors: Rahmat Siauwijaya; To Jaya Yusanto; Genoveva Cindy Grania

Addresses: Accounting Department, School of Accounting, Bina Nusantara University, Indonesia ' Accounting Department, School of Accounting, Bina Nusantara University, Indonesia ' Accounting Department, School of Accounting, Bina Nusantara University, Indonesia

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.

Keywords: banking competition; green banking; market power; bank profitability; Indonesia.

DOI: 10.1504/GBER.2025.144234

Global Business and Economics Review, 2025 Vol.32 No.2, pp.134 - 159

Received: 04 Apr 2023
Accepted: 21 Jul 2023
Published online: 03 Feb 2025 *

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