THE IMPACT OF GREEN BANKING ON THE FINANCIAL PERFORMANCE OF BANKS IN MALAYSIA
DOI:
https://doi.org/10.33736/uraf.10770.2025Keywords:
Operational efficiency, loan-to-deposit ratio, non-performing loan, return on assets.Abstract
This study aims to investigate how green banking impacts the financial performance of Malaysian commercial banks. To accomplish this, the research used theories like Natural Resource-Based View, Innovation Theory, and Stakeholder Theory. By analysing secondary data from 15 banks over six years (2018-2023). While prior research by Sharif, Sofuoglu, Kocak, and Anwar (2024) identified a knowledge gap in green banking within Malaysia, this study seeks to bridge that gap. The results indicate that green finance initiatives may positively influence the financial performance of banks. This study offers valuable perspectives for policymakers, regulators, and financial institutions by underscoring the importance of promoting green finance initiatives. By exploring the link between green finance and financial outcomes, banks are equipped to make informed choices that bolster their sustainability efforts and strengthen their long-term financial health. It encourages banks to embed sustainability within their business strategies, enabling them to not only support environmental sustainability but also enhance their financial performance, fostering a resilient and sustainable future.
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