Profitabilnost bankarskog sektora u Bosni i Hercegovini (2003.-2007.)
Profitability of banking sector in Bosnia and Herzegovina (2003.-2007.)

Summary/Abstract: Due to the role of banking sector in the country’s economic development and domination of foreign capital in banks of Bosnia and Herzegovina as well, opposing opinions appear upon the profitability of domestic banks. The high profitability might be a consequence of market looming, while the low profitability would preclude banking sector in its role in the overall economic development. Therefore, the „medium“ profitability would be most desired from society point of view, assuredly with the condition that the notion of “medium“ could be quantified. The prime objective of this paper is to present and analyze the outcomes of the domestic banking sector business throughout the last five years, compared to the period that we can name as a period of its consolidations and stabilization. Besides, by comparison to the profitability of banks in countries which are in transition process, the conclusion will be made on the real dimension of the profitability of B&H banks. Research results indicate the fact that the domestic banking sector develops “normally“, i.e. that throughout the observed period, the coefficient of capital adequacy decreases with such a ROA/ROE ratio which does not lead to moving away from the line of regression that represents the acceptable development path. In comparisons to countries which are in the transition process, BH banking sector has achieved a considerably lower return on assets and capital. The future development of banking sector in B&H would largely depend on circumstances and stage of development of the overall financial market in B&H and the real sector BH economy. The presentation of research results is accompanied by proper recommendation to regulatory authority.

• Details
• Contents