Bank profitability prior and after the crisis: evidence from selected Balkan transitional economies
Bank profitability prior and after the crisis: evidence from selected Balkan transitional economies

Summary/Abstract: Managing bank profitability during the financial crisis represent a key element in the transitional economies due to the bank based financial system characterized for such economies and lack of developed financial institutions. The focus of the research is primarily connected to statistical modeling of the financial crisis impact on bank profitability indicators. The paper at hand provide general analyzes regarding the profitability indicators of Serbian and Bosnian banks during the same period for a proper comparative perception. Focus on the empirical analysis is banking sector of the Republic of Macedonia. The paper provide and explicit answer if the variables influencing bank profitability before and after the crises are significantly changed in order to shape the management policies for setting a desirable level of banking profitability in the period after the crisis. The implementation of dummy variable and determination of its statistical effects on key profitability indicators expressed through ROAA and ROAE is the another parameter of importance as additional component into model analyzes. The statistical tests showed that dummy variable has a negative significance on profitability indicators only for the year 2009 which to some extend was contrary to our previous expectations.

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