Risk management and profitability of commercial banks of Western Balkans countries of Kosovo, Albania, North Macedonia, and Serbia

Alshiqi, Sevdie; Sahiti, Arbana

doi:10.15549/jeecar.v8i1.633

Cited by 8 publications

(7 citation statements)

References 11 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…According to a study done with banks in Bosnia and Herzegovina by Alihodžić (2020), profit or loss growth rates, cost-income ratios, and growth rates of the gross domestic product had the most impacts on profitability indicators. There is no statistically significant correlation between CAR and ROE or ROA, according to the empirical findings of the study by Alshiqi and Sahiti (2021). NPL has a poor correlation with both ROE and ROA.…”

Section: Literature Reviewmentioning

confidence: 82%

Assessment of cost efficiency in the banking sector of selected countries in Southeastern Europe

Krasniqi-Pervetica,

Ahmeti

2024

IJAEFA

View full text Add to dashboard Cite

This study examines the assessment of cost efficiency in the banking sector of selected countries in Southeastern Europe. In Southeastern Europe (SEE), where over 100 commercial banks operate, these institutions form the backbone of the financial sector, supporting between 80% and 90% of the financial system in five Balkan Peninsula nations. Kosovo stands out for having a lower participation rate (65%), with 80% to 90% of its banks under foreign government control. A study conducted from 2010 to 2021 employed Data Envelopment Analysis (DEA), a non-parametric technique, to scrutinize the cost-effectiveness and profitability of SEE's banking industry. DEA evaluated SEE's commercial banks in terms of cost efficiency, considering total costs as the dependent variable and inputs including deposits, workforce, and fixed assets. Interest expenses, personnel expenses, and capital-related expenses were compared concerning total deposits and assets, while securities and loans served as outputs. The findings unveiled commendable cost efficiency within SEE's banks. Subsequently, a panel regression analysis utilizing fixed and random effects was performed. Factors like Cost Efficiency, Asset Quality, Market Participation, Debt Ratio, Bank Size, Inflation, Ownership, and Gross Domestic Product were assessed against Return on Equity (ROE) and Return on Assets (ROA). The results underscored robust cost control measures within SEE's banks and highlighted significant factors—Cost Efficiency, Asset Quality, Market Participation, Debt Ratio, Bank Size, Inflation, and Ownership—exerting substantial influence on ROA and ROE. These insights offer valuable information for strategic decision-making, aiding stakeholders in developing targeted actions to enhance the financial sustainability and stability of Southeastern Europe's banking sector.

show abstract

Section: Literature Reviewmentioning

confidence: 82%

Assessment of cost efficiency in the banking sector of selected countries in Southeastern Europe

Krasniqi-Pervetica,

Ahmeti

2024

IJAEFA

View full text Add to dashboard Cite

show abstract

“…To summarize, risk management at a bank is a complex process that begins with the development of a framework to identify and analyze, which is followed by the implementation of specific actions to limit or control unavoidable losses. It is crucial to begin any discussion of risk management in banking with a consideration of why risk is significant and what actions can be taken to control risk in these businesses (Alshiqi and Sahiti 2021). Poudel (2012) found that credit risk management is a bank's best practice, adopted by more than 90% of the country's banks.…”

Section: Mediating Role Of Credit Risk Management (Crm) and Commercia...mentioning

confidence: 99%

Examining the Determinants of Credit Risk Management and Their Relationship with the Performance of Commercial Banks in Nepal

Bhatt

Ahmed

Iqbal

et al. 2023

JRFM

View full text Add to dashboard Cite

In recent years, after the global financial crisis, the issue of credit risk management has received increased attention from international regulators. Credit risk management frameworks are often not sufficiently integrated within the organization, there is no unified approach, and there is no holistic view of all risks. Likewise, where they exist, sound risk management practices have helped institutions to weather financial crises better than others. Therefore, the current study aimed to examine the determinants of credit risk management and their relationship with the performance of commercial banks in Nepal. It also examines the mediating role of credit risk management on the performance of commercial banks in Nepal. The results indicate that there is a positive relationship between environmental risk and credit risk management. It is also found that credit appraisal measurements have a significant effect on credit risk management. The results reveal that market risk analysis has a significant effect on credit risk management. The results show that credit risk management mediates the relationship between environmental risk, credit appraisal measurements, market risk analysis, and the performance of commercial banks. Therefore, managers should strive to impart risk prevention and control mechanisms to reduce credit risk and achieve good financial performance.

show abstract

“…This approach is aimed at planning in advance. In addition, it helps to identify and avoid potential hazards before they occur (Alshiqi & Sahiti, 2021).…”

Section: Literature Reviewmentioning

confidence: 99%

Management Decision-Making as a Mechanism for Reducing the Level of Global Risk and Its Redistribution

Yatsyshyn

Kabachenko

Korchynska

et al. 2023

KJHSS

View full text Add to dashboard Cite

Modern conditions of turbulence in the external economic environment require business structures not only to respond quickly to new challenges, but also to form scenario models of behaviour in order to maintain competitive market advantages based on an objective review of their own commercial potential and reserves. It is noteworthy that the internal risks of the business structure are the primary obstacle in the growth of the efficiency of the commercial structure and determine its level of profitability. The purpose of the research is to assess the factor of formation of biased management decisions and the features of their implementation as factors of reducing the manifestation of internal business risks. Indicated that the system of effective business management must always take into account the manifestation and pressure of internal risk due to a number of factors that cannot be accurately assessed. Modern methodology of project management and project management does not take into account the tool of biased decisions. Anti-crisis management is presented as a mandatory element of management knowledge. Therefore, the further development of management should focus on the adoption of biased management decisions and the development of mechanisms for their timely implementation.

show abstract

Risk management and profitability of commercial banks of Western Balkans countries of Kosovo, Albania, North Macedonia, and Serbia

Cited by 8 publications

References 11 publications

Assessment of cost efficiency in the banking sector of selected countries in Southeastern Europe

Assessment of cost efficiency in the banking sector of selected countries in Southeastern Europe

Examining the Determinants of Credit Risk Management and Their Relationship with the Performance of Commercial Banks in Nepal

Management Decision-Making as a Mechanism for Reducing the Level of Global Risk and Its Redistribution

Contact Info

Product

Resources

About