Analysis of Financial Performance of the Banking System in Kosovo - 2014-2019 Period


  • Yllka Ahmeti
  • Ibish Mazreku


ROA - Return on Assets; ROE - Return on Equity; NIM - Net Interest Margin; Financial Performance; Profit


The banking system plays an important role in the economic development of a country. A
banking institution is indispensable in a modern society. It plays a key role in the economic
development of a country and focuses the essence of the money market on a developed country. The
basic function of banks is to collect deposits as much as possible from customers and mobilize it in the
most favorable and profitable sector such as industry, trade, agriculture and entertainment. This study
mainly attempts to analyze the financial performance of commercial banks in Kosovo covering the
period 2014 - 2019. There are many past studies in which researchers used different financial reports
to control the financial performance of commercial banks such as: Return on Assets (ROA), Return on
Equity (ROE), Return on capital (ROC), Return on Fixed Operating assets (ROFA), Report of costs on
Income (C/I). Based on the accounting data, we used the key coefficients which are: ROA, ROE and
NIM for estimating financial performance. The findings of the study may be useful for managing
commercial banks in Kosovo.


Adeusi, S. O.; Kolapo, F. T. & Aluko, A. O. (2014). Determinants of Commerical Banks’ Profitability: Panel Evidence from Nigeria. International Journal of Economics, Commerce and Management Vol. II, Issue 12, pp. 1-18.
Ahmeti, S.; Hoti, A. & Alshiqi, S. (2014). Analysis of Financial Performance in the Banking System in Kosovo-the Period 2006-2012. Journal of Knowledge Management, Economics and Information Technology, IV, 2(2).
Altman, E. I. (1968). Financial ratios, discriminant analysis and the prediction of corporate bankruptcy. The journal of finance, 23(4), pp. 589-609.
Ayanda, A. M.; Christopher, E. I. & Mudashiru, M. A. (2013). Determinants of banks’ profitability in a developing economy: Evidence from Nigerian banking industry. Interdisciplinary Journal of contemporary research in business, 4(9), pp. 155-181.
Beaver, W. H. (1966). Financial ratios as predictors of failure. Journal of accounting research, pp. 71-111.
Bonin, J. P.; Hasan, I. & Wachtel, P. (2005). Bank performance, efficiency and ownership in transition countries. Journal of banking & finance, 29(1), pp. 31-53.
CBK (2019). Quarterly Assessment of the Financial System. Central Bankof Kosova.
CBK Annual Report (2019). Central Bank of Kosova.
Claeys, S. & Vander Vennet, R. (2008). Determinants of bank interest margins in Central and Eastern Europe: A comparison with the West. Economic Systems, 32(2), pp. 197-216.
Demirgüç-Kunt, A. & Huizinga, H. (1999). Determinants of commercial bank interest margins and profitability: some international evidence. The World Bank Economic Review, 13(2), pp. 379-408.
EBF (2020). European Banking Federation. Retrieved from
Ehrhardt, M. C. & Brigham, E. F. (2011). Financial management: theory and practice. South-Western Cengage Learning.
Gremi, E. (2013). Internal factors affecting Albanian banking profitability. Academic Journal of Interdisciplinary Studies, 2(9), p. 19.
Grigorian, D. A. & Manole, V. (2002). Determinants of commercial bank performance in transition: An application of data envelopment analysis. The World Bank.
Gümüş, Y. & Çelikkol, H. (2011). Data envelopment analysis: An augmented method for the analysis of firm performance. International research journal of finance and economics, 79, pp. 137-142.
Gupta, P. K. (2014). An analysis of Indian public sector banks using CAMEL approach. IOSR Journal of Business and Management, 16(1), pp. 94-102.
Maishanu, M. M. (2004). A univariate approach to predicting failure in the commercial banking sub-sector. Nigerian Journal of Accounting Research, 1(1), pp. 70-84.
Mittal, M. & Dhade, A. (2009). Awareness and Perception of CAMEL Rating Across Banks: Some Survey Evidence. IUP Journal of Bank Management, 8(2), p. 51.
Mous, L. (2005). Predicting bankruptcy with discriminant analysis and decision tree using financial ratios. University of Rotterdam.
Prasad, K. V. N. & Ravinder, G. (2012). A CAMEL Model Analysis of Nationalized Banks in India. Journal of Venture Capital & Financial Services, 6(1).
Reddy, K. S. (2012). Relative performance of commercial banks in India using CAMEL approach. International Journal of Multidisciplinary Research, 2(3), pp. 38-58.
Ross, S.; Westerfield, R.; Jordan, B.; Mazin, A. & Abidin, Z. F. (2007). Financial management fundamentals in Malaysia. Malaysia: McGraw-Hill.
Saghi-Zedek, N. (2016). Product diversification and bank performance: does ownership structure matter?. Journal of Banking & Finance, 71, pp. 154-167.
Shingjergji, A. & Idrizi, A. (2014). The performance of the Albanian banking system. Anglisticum Journal, 3(7), pp. 64-69.
Staikouras, C. K., & Wood, G. E. (2004). The determinants of European bank profitability. International Business & Economics Research Journal (IBER), 3(6).
Statista (2020). Global No. 1 Data Platform. Retrieved from
Sufian, F. & Habibullah, M. S. (2009). Bank specific and macroeconomic determinants of bank profitability: Empirical evidence from the China banking sector. Frontiers of Economics in China, 4(2), pp. 274-291.