Abstract
With the financial industry in various countries under strict regulation and interest rates increasingly market-oriented, the rise of the green finance sector has significantly impacted the operations of commercial banks. This influence is particularly evident in green credit, bonds, and insurance, which have emerged as critical components of sustainable finance. As a novel financial paradigm, green finance presents vast development prospects by linking economic growth with environmental sustainability. By actively developing green financial products and services, commercial banks can enhance their operational performance and create new profit growth opportunities. This study conducts an empirical analysis using data from state-owned, joint-stock, and city commercial banks to evaluate the relationship between green finance and bank performance. The findings reveal that green finance positively impacts the operational performance of commercial banks. Notably, green credit emerges as a significant driver, improving profitability while addressing environmental challenges. However, the study also identifies several challenges, such as the need for strategic alignment, product innovation, and enhanced risk management. Commercial banks must improve strategic planning, foster innovation, and strengthen their competitiveness to sustain momentum while maintaining a strong sense of social responsibility. These efforts will contribute to advancing green finance and enable banks to play a pivotal role in promoting sustainable economic development. This research provides valuable insights for policymakers and financial institutions aiming to align economic objectives with environmental goals.