Bank performance relation with green banking practices: A study on commercial bank in Bangladesh

Year 2025, Volume: 7 Issue: 2, 107 - 118

Tamal Chakrobortty , Anima Karmakar , A. K. M. Ashiqur Rahman , Dipika Rani Dobey , Md. Rezwon Tanvir Mim

Abstract

This study investigates the relationship between green banking practices and financial performance in Bangladesh's commercial banking sector. Using data from eight commercial banks listed on the Dhaka Stock Exchange (DSE) over the period 2014–2023, the study employs the Augmented Mean Group (AMG) methodology in STATA-17. Green Finance serves as the dependent variable, while Return on Assets (ROA), Market Value of Shares (MV), Return on Equity (ROE), Operating Cost Ratio (OCR), and Bank Size are the independent variables. The findings reveal a significant correlation between green finance and financial performance, with ROE and OCR positively influencing green finance, while MV and ROA show negative correlations. The study underscores the need for proactive green banking policies to drive sustainable financial growth and recommends that financial institutions and regulators strengthen green finance initiatives to enhance economic and environmental sustainability.

Keywords

Green Finance, Firm Performance, Sustainability, AMG Analysis

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