Epoka University, Tirana, Albania
4th International Conference – ERAZ 2018 – KNOWLEDGE BASED SUSTAINABLE ECONOMIC DEVELOPMENT, Sofia- Bulgaria, June 7, 2018, CONFERENCE PROCEEDINGS published by: Association of Economists and Managers of the Balkans, Belgrade, Serbia; Faculty of Business Studies, Mediterranean University – Podgorica, Montenegro; University of National and World Economy – Sofia, Bulgaria; Faculty of Commercial and Business Studies – Celje, Slovenia; Faculty of Applied Management, Economics and Finance – Belgrade, Serbia, ISBN 978-86-80194-12-7
This paper focuses on the trends of the profitability of banking sector. The Kosovo belongs to the economies in transition process toward open market economy. The establishment of new financial system in Kosovo started at the end of 1999 from scratch and new banking institutions were established by the private capital investment. This paper examines the evolution of banking profitability over period of 6 years from 2010 until 2015. The survey examines banking sector (10 banks) which experienced continuously good profitability and analysis how profitability has been fluctuated using profitability indicators as return on assets, return on equity and net interest margin. The results will express how high profitability returns in 2010 have been followed by a slight decrease of profitability during 2012-2013; and ending in 2015 with the highest profitability indicators since the establishment of banking sector. The ROA indicator has been doubled while ROE productivity indicator has been close to the double figure comparing banking performance in period from 2010 to 2015. The Kosovo banking industry except very good liquidity and capital adequacy ratios has continued to have very qualitative loan portfolio expressed with the lowest level of non-performing loans (NPL) in region which at the end impacted very high profitability in banking industry.
banks, profitability, ROA, ROE, net interest margin
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