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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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    1. 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.
    2. Ahmad Aref Almazari, 2014. "Impact of Internal Factors on Bank Profitability: Comparative Study between Saudi Arabia and Jordan," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 4(1), pages 1-7.
    3. Constantinos Alexiou & Voyazas Sofoklis, 2009. "Determinants Of Bank Profitability: Evidence From The Greek Banking Sector," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 54(182), pages 93-118, July – Se.
    4. Brunilda Duraj & Elvana Moci, 2015. "Factors Influencing the Bank Profitability - Empirical Evidence from Albania," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(3), pages 483-494, March.
    5. Fadzlan Sufian & Royfaizal Razali Chong, 2008. "Determinants of Bank Profitability in a Developing Economy: Empirical Evidence from the Philipinnes," Asian Academy of Management Journal of Accounting and Finance (AAMJAF), Penerbit Universiti Sains Malaysia, vol. 4(2), pages 91-112.
    6. Angela Roman & Adina Elena Dănuleţiu, 2013. "An Empirical Analysis Of The Determinants Of Bank Profitability In Romania," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 2(15), pages 1-23.
    7. Brunilda DURAJ & Elvana MOCI, 2015. "Factors Influencing The Bank Profitability – Empirical Evidence From Albania," Romanian Economic Business Review, Romanian-American University, vol. 10(1), pages 60-72, March.
    8. Brunilda Duraj & Elvana Moci, 2015. "Factors Influencing the Bank Profitability - Empirical Evidence from Albania," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(3), pages 483-494.
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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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