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The Impact of Specific Banking, Industrial and Macroeconomic Factors on Bank Profitability: Evidence from the Albanian Banking System

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  • Gazmend Nure

Abstract

This research studies the factors that affect the profitability of the banking system in Albania during the period 2012-2017.The specific factors taken in the study are divided into two groups: the specific banking factors (internal), and the macroeconomic factors. The dependent variable used in the study, to measure Bank Profits, is Return on Equity (ROE). The empirical findings show that, when ROE is used as a dependent variable, all bank specific variables are negatively and significantly related to profitability. That being said, there is the exception of the liquidity factor (Liquid assets over short term liabilities) and bank size which has a positive.

Suggested Citation

  • Gazmend Nure, 2019. "The Impact of Specific Banking, Industrial and Macroeconomic Factors on Bank Profitability: Evidence from the Albanian Banking System," Business and Economic Research, Macrothink Institute, vol. 9(2), pages 182-198, June.
    • Handle: RePEc:mth:ber888:v:9:y:2019:i:2:p:182-198
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    More about this item

    Keywords

    Commercial banks; Profitability; Determinants; Return on assets; Liquidity ratio;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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