Title: The effects of operational efficiency, non-interest income, and green banking on operational and financial performance

Authors: I. Putu Sugiartha Sanjaya; Vincensius Reynold Tiodoris; Wimpie Yustino Setiawan

Addresses: Faculty of Business and Economics, Accounting Department, Universitas Atma Jaya Yogyakarta, Jl. Babarsari, No. 43 Yogyakarta, 55281, Indonesia ' Faculty of Business and Economics, Accounting Department, Universitas Atma Jaya Yogyakarta, Jl. Babarsari, No. 43 Yogyakarta, 55281, Indonesia ' Faculty of Business and Economics, Accounting Department, Universitas Atma Jaya Yogyakarta, Jl. Babarsari, No. 43 Yogyakarta, 55281, Indonesia

Abstract: This study provides empirical evidence on the impact of green banking on banks' operational and financial performance, focusing on banking companies listed on the Indonesia Stock Exchange during the 2016-2022 period. Using purposive sampling, this study collects 294 firm years. The findings reveal that operational efficiency negatively affects performance, whereas non-interest income and green banking positively influence operational outcomes. Green banking is not only an initiative of the Indonesian government but also part of the global sustainable finance agenda under the United Nation Sustainable Development Goals (UN SDGs). Accordingly, the findings of this study hold implications for international financial markets, particularly in developing countries that adopt green banking practices as a strategic approach to enhancing global competitiveness. These findings contribute to preparing sustainability reports, as in POJK Number 51/POJK.03/2017 for financial services institutions, issuers, and public companies. This study also contributes to the international literature, such as stakeholder theory and legitimacy theory, by integrating economic and nonfinancial factors in explaining bank profitability, reinforcing the importance of sustainability considerations in global banking practices.

Keywords: operational efficiency; non-interest income; green banking; operational performance; financial performance.

DOI: 10.1504/IJTGM.2026.155760

International Journal of Trade and Global Markets, 2026 Vol.22 No.3/4, pp.260 - 268

Received: 07 Feb 2025
Accepted: 24 Feb 2026
Published online: 13 Aug 2026 *

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