Banks Specific Factor that Determinate the Profitability of Commercial Banks in Republic of North Macedonia

  • Arbenita Kosumi
  • Arbereshe Kosumi University of Prishtina
Keywords: Bank Profitability, the profitability determinants, commercial banks, ROA.


Banking sector plays an important role in economy and has significant impact on country’s economic
growth. The purpose of this seminar paper is by utilizing empirically analyses to identify the key
determinants of commercial banks’ profitability by case study, Republic of North Macedonia.
Performance evaluation of commercial banks is grounded on the banks specific factors, exploiting data
for the period 2012 -2018 for 13 commercial banks. For this purpose, the return on assets (ROA) is taken
as a dependent variable, whereas capital adequacy (CAP), bank size (SIZE), credit risk (CR), revenue
diversification (DIV), liquidity (L) and leverage (LEV) represent the independent variables. The
regression analysis indicate that that commercial banks profitability in Republic of North Macedonia has
been driven mainly by factors such as liquidity and size.


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