The interaction between financial, market and environmental components in the banking sector of the Serbia

Abstract

Banks are one of the essential institutions in the financial systems worldwide, whereby profitability is the ultimate goal for banks’ business. To provide success, bank management should create an attractive market portfolio that will continuosly generate profit. However, banks have to support eco-friendly initiatives and projects and try to implement corporate social responsibility in their business. The goal of the research is to investigate the connection between financial, environmental and market components in the banking sector of the Serbia from 2014 to 2021. The empirical findings of T-test indicate that banks with green loans in portfolio registered higher profitability compared to banks that do not offer this loan type. The obtained results of correlation show that green loans and market share are positively correlated to bank profitability indicators. This does not mean that green loans are a factor that shapes banks' profitability, but that their presence in the portfolio does not negatively affect the level of the bank's realized profit.

Keywords

• banks
• green loans
• market share
• profitability
• serbia