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Abstract
This study examines the effect of Islamic financial literacy on sustainable financial performance, with green banking as a mediating variable in Islamic banking institutions in Semarang City, Indonesia. A quantitative approach was employed using a survey of 100 employees from Islamic banking institutions. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results indicate that Islamic financial literacy has a positive and significant effect on green banking practices and sustainable financial performance. Furthermore, green banking practices have a positive and significant effect on sustainable financial performance and partially mediate the relationship between Islamic financial literacy and sustainable financial performance. These findings emphasize that enhancing employee financial literacy and strengthening sustainable banking practices are important strategies for promoting the resilience and sustainability of Islamic banks' financial performance. This study also contributes to the literature on sustainable banking based on Islamic principles and offers managerial implications for developing internal banking policies.
