Understanding the impact of sustainable finance on bank profitability

<p><span>This research examines the impact of green credit, competition, and risk taking on bank profitability as a form of sustainable finance practices that can increase economic growth. This research applies balanced panel data <span>regression analysis</span> using commercial banks data from 2005 to 2021<span>.</span><span> </span><span>The results show that increasing green credit allocation </span>and the level of competition will increase bank profitability in Indonesia. The<span> </span>increased<span> </span>bank<span> </span>profitability<span> </span>resulting<span> </span>from<span> </span>green<span> </span>credit<span> </span>allocation<span> </span>and bank competition can boost economic growth.<span> </span>Furthermore,<span> </span>high<span> </span>risk-taking<span> </span>behavior<span> </span>will<span> </span>reduce<span> </span>bank<span> </span>profitability.<span> </span>This finding<span> </span>is<span> </span>in<span> </span>line with sustainable development goals (SDGs) eight and nine. The results<span> </span>emphasize<span> </span>the<span> </span>importance<span> </span>of<span> </span>strategy<span> </span>in<span> </span>green<span> </span>credit allocation, competitive banking strategies, and risk management in bank&rsquo;s decision making to realize sustainable finance.</span></p>