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The Impact of Internal Factors on Bank Profitability in Kosovo

Author

Listed:
  • Leonora Haliti Rudhani

    (University of Applied Sciences, Republic of Kosovo)

  • Skender Ahmeti

    (University of Prishtina)

  • Taulant Rudhani

    (University of Prishtina)

Abstract

Commercial banks play an important role in the economic development and financial stability; therefore this study investigated the influence of internal factors in the profitability of commercial banks in Kosovo. Based on the literature review, a crucial internal factor on the profitability of banks in Kosovo was deemed: the repayment of assets (ROA) as a measure of profitability influenced by other independent variables, such as: bank size, capital adequacy, loan and liquidity risk. The aim of this study is to investigate the empirical relation between internal factors determining bank profitability and profitability as a dependent variable. The empirical analysis is based on the data of commercial banks in Kosovo published in the period 2010-2014. The data were analysed with SPSS 21 version, and the hypotheses were tested by means of correlation and linear regression. The findings of the study proved that commercial banks in Kosovo could enlarge their profitability by increasing the level of bank loaning and other investments, except for managing risk and liquidity properly.

Suggested Citation

  • Leonora Haliti Rudhani & Skender Ahmeti & Taulant Rudhani, 2016. "The Impact of Internal Factors on Bank Profitability in Kosovo," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 12(1), pages 95-107, February.
    • Handle: RePEc:dug:actaec:y:2016:i:1:p:95-107
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    File URL: http://journals.univ-danubius.ro/index.php/oeconomica/article/view/3090/3109
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    References listed on IDEAS

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    2. Skender Ahmeti & Arta Hoti & Sevdie Alshiqi – Bekteshi, 2014. "Analysis of Financial Performance in the Banking System in Kosovo - the Period 2006-2012," Journal of Knowledge Management, Economics and Information Technology, ScientificPapers.org, vol. 4(2), pages 1-3, April.
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    Cited by:

    1. Leonora Haliti Rudhani & Driton Balaj, 2019. "Management of Liquidity Risk and the Banking Activity: The Banking System of Kosovo as a Case," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 8(2), pages 01-08, April.

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