The Effect of Green Banking and Financial Performance on Banking Profitability

Abstract

This study aims to analyze the effect of green banking and financial performances on banking profitability on State-owned banks in Indonesia. This study used quantitative approach and the method used Multiple Regression Analysis with ROA as a dependent variable. Financial performances were proxied CAR, NPL, and LDR as independent variables, while green banking factors were proxied by the number of ATMs and CSR funds. This study uses a combination of data between time series data from 2010-2020 and a cross section of four State-owned Banks in Indonesia, namely BRI, BNI, Mandiri Bank, and BTN. The result showed that CSR funds, CAR, NPL, and LDR have significant affect on ROA bank. On the contrary, number of ATMs does not have significant affect on ROA bank. Implementation of green banking by utilizing technological advances in its activities can be more efficient, which its energy use becomes less and more paperless. So that the operational bank expenses can decrease and increase the profits.