Abstract: Based on the unbalanced panel data of 34 Chinese commercial banks from 2007 to 2017, this paper empirically tests the influence of green credit on banks’ financial performance and examines the moderating effect of green development on the relationship between green credit and bank financial performance using the provincial green development index provided by "China Green Development Index Report". Results show that: green credit granted is helpful to improve banks’ financial performance, and the improvement effect is mainly achieved by improving banks’ return on interest bearing assets; green development can enhance the economic benefits of green credit granted by banks, and the enhancement effect is mainly related to the greening degree of local economic growth and the support degree of local governments for green development.Commercial banks should actively carry out green credit business; government departments should strengthen and improve green credit incentive policies to promote the coordinated development of green finance and green economy.

Key words: green credit, green development, banks’ financial performance