The Impact of Cost Control on the Profitability of Commercial Banks
There are 10 commercial banks operating in Kosovo today and they make up 65 percent of the total assets of the financial sector. Their products and services include bank accounts, loans, local and international payments, bank cards, bank guarantees, letter of credit, e-banking. The structure of assets according to the first quarter of 2020 is dominated by loans totaling 4,721.9 million euros, while the structure of liabilities of the banking sector is dominated by deposits in the amount of 3,845.4 billion euros. Commercial banks in Kosovo have different shareholder structures. Eight of them are banks with foreign capital and two with domestic capital. The purpose of this research is to investigate the impact of cost control on the profitability of banks. The research was done through multivariate regression, where as dependent variables we have Net Profit Margin (NMF), Return on Equity (ROE) and return on assets (ROA) and as independent variables we have interest expenses, salary expenses and provisions expenses. Profitability is the term that refers to the ability of the institution to maintain its profit year after year. Based on the linear regression model, it is found that in one of the dependent variables two dependent variables have a significant impact, while in the other two dependent variables only one of the independent variables has an impact.
2. Ahmeti,S. (2013):Kontabiliteti i menaxhmentit
3. Athanasoglou P., Panayiotis Ch. and Delis M. (2006): Determinants of bank profitability in the South Eastern European region
4. Bourke, P. (1989). Concentration and other determinants of bank profitability in Europe, North America and Australia
5. Fang, J., Lau, C.K.M., Lu, Z., Tan, Y., Zhang, H. (2019). Bank performance in China: A Perspective from Bank efficiency, risk-taking and market competition.
6. Grigorian, D., Manole, V. (2006): Determinants of Commercial Bank Performance in Transition: An Application of Data Envelopment Analysis
7. Haslem, J. (1968). A statistical analysis of the relative profitability of commercial banks.
8. Haslem, J. (1969). A statistical estimation of commercial bank profitability
9. Molyneux, P. (1993). Market structure and profitability in European banking.
10. Jayaratne, J. Dhe Strahan, P. (1998). Entry restrictions, industry evolution, and dynamic efficiency: evidence from commercial banking
11. Pasiouras, F. and Kosmidou K. (2007): Factors influencing the profitability of domestic and foreign commercial banks in the European Union
12. Rahman M., Ashraf B., Zheng Ch., (2017): Impact of Cost Efficiency on Bank Capital and the Cost of Financial Intermediation: Evidence from BRICS Countries and Munni Begum
13. Tan, Y. (2016). The impact of risk and competition on bank profitability in China
Copyright (c) 2021 Agnesa Krasniqi
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
The author fully assumes the content originality and the holograph signature makes him responsible in case of trial.