Analyzing the influence of industry-specific metrics on financial performance and the significance of sustainable banking in the Republic of Kosovo

Objective: The Republic of Kosovo's banking sector has seen notable expansion and stability in recent times, yet challenges to profitability persist among commercial banks. Against this backdrop, this study advocates for a quantitative examination of sector-specific metrics to identify the primary drivers of commercial banks' profitability. Using multiple regression analysis, the research examines the internal factors affecting profitability in the banking sector. The study seeks to furnish valuable insights and recommendations for bolstering sector performance by pinpointing profitability catalysts. The findings are significant for policymakers, banking executives, and investors focused on improving Kosovo's banking sector performance. The delineation of profitability's pivotal drivers is crucial for ensuring sustained commercial bank profitability within the nation. Furthermore, this research contributes to the extant literature on banking sector profitability, with implications for analogous economies. Overall, this study highlights the importance of sector-specific indicators in strengthening commercial bank profitability in Kosovo. Moreover, this study acknowledges the imperative of sustainable banking practices in augmenting the banking sector's profitability. It examines sustainable banking's role as a profitability enabler. By incorporating sustainable banking practices into the analysis, the study strives to yield a more holistic understanding of profitability determinants within Kosovo's banking sector. The research outcomes are poised to be invaluable to stakeholders keen on fostering sustainable banking practices and aligning them with financial performance objectives in the banking realm. The study's recommendations could aid the Central Bank of Kosovo in devising a policy framework conducive to sustainable banking practices, thereby positioning Kosovo's banking sector as a beacon for analogous developing nations. Method: The study employs a quantitative approach to analyze the determinants of profitability within the commercial banking sector of the Republic of Kosovo. Multiple regression analysis is conducted on sector-specific metrics to unveil the internal factors influencing profitability. Additionally, sustainable banking practices are integrated into the analysis to ascertain their impact on financial performance within the banking sector. Results: The primary findings of the study underscore the significance of understanding sector-specific indicators in enhancing commercial bank profitability within the Republic of Kosovo. Furthermore, the research elucidates the vital role of sustainable banking practices in augmenting profitability within the banking sector. Originality: The study's focus on the Republic of Kosovo, a developing economy with its unique banking landscape, shows the originality, by offering tailored recommendations that can be extrapolated to similar economies facing analogous challenges and opportunities.