Determinants of profitability in commercial banks in Albania

Scientific Study from the year 2018 in the subject Economics - Finance, grade: 12, , language: English, abstract: This study examines the determinants of profitability of commercial banks in Albania. These determinants are categorized into two groups, internal factors that are the bank specific factors and external factors that are further divided into macroeconomic factors and industry specific factors. The main objective of the study is to determine the factors affecting the profitability of commercial banks and making some recommendations, that maybe can help the management and policymakers. A panel data with 16 commercial banks in Albania is analyzed for the period 2009-2014. Two indicators are used (dependent variables) for the measurement of profitability, return on assets (ROA) and return on equity (ROE). Banking specific factors that are used in this study include variables such as bank size, asset management, credit risk, liquidity of assets, capital adequacy, operational efficiency and cost of financing. On the other hand is taken into consideration only one industry specific factor, which is the concentration and macroeconomic factors such as GDP, inflation and exchange rate. To meet the main object of the research, the study is based mainly on quantitative research method, which is supplemented by a qualitative method. Quantitative data were obtained mainly from the financial statements of commercial banks, by INSTAT, Bank of Albania, and World Bank, in order to make empirical analysis needed to identify and measure the determinants of bank profitability. In particular, multiple regression analysis was used to measure the impact of the determinants of bank profitability. On the other hand, qualitative data were collected through unstructured interviews conducted with executives of finance in the albanian commercial banks. To realize empirical analysis were used the software SPSS 22 and Eviews 7.

Dr. Arjeta Hallunovi is a finance lecturer in the Department of Finance - Accounting at University Aleksander Moisiu Durres in Albania. She holds a PhD in Economics Sciences, Finance - Bank Profile. Mrs. Hallunovi is author of three books, four monographs and has more than 30 published papers, the major part with Impact Factor and Thomson Reuters in United Kingdom, Germany, Singapor, USA, Canada, Montenegro, Italy etc. In March and April 2019 she was part of the Teaching Mobility in Andrei Saguna University, Costanta, Romania and Kodolanyi Janos University, Budapest, Hungary. In June 2018 she successfully completed the Summer School 'Advanced Measurement of Quality of Working Life' in France, in which also presented a scientific paper. In May 2018 was part of the Teaching Mobility in Danubius University, in Galati, Romania with the Erasmus students. In 27 - 30 September 2018 was part of the World Youth Forum Right to Dialogue. Ethics of Complexity. XI Edition in Trieste, Italy. In 23 November 2018, she was as a Jury member in the essay competition "Students Problems" organised from the Forum "Studentët për Qeverisjen e Mirë". During the period 20-21 November 2018, Dr. Hallunovi was invited in the Training Program " Participatory Policy Making", organised from the Partners Albania for Change and Development in cooperation with Partnersfor Democratic Change Slovakia with the support of Slovak Aid-Official Development Assistance of the Slovak Republic. Durres, Albania. In 03-04 December 2018, she have participated in the 3rd UNWTO/UNESCO World Conference on Tourism and Culture, Istanbul, Turkey. In March 2019 was part of the Tools for Social Development-Volume III, Erasmus + Project, co-financed by the European Commission, Vrnjacka Banja, Serbia. Among other things, she is on the editorial board of The Educational Review-USA at the Hill Publishing Group, Journal of Finance and Accounting at the Science Publishing Group (USA), Journal of Applied Mathematics and Computation at Hill Publishing Group (USA), Academic Journal of Accounting and Finance at the International Association of Scientists and Researchers, as well as scientific collaborator at the Institute for Scientific Research and Development in Montenegro and she is member of UdEcoM Balkan. Mrs. Hallunovi is Member of the HISTEK project, Interreg IPA-CBC, titled "Senior Technical Specialists in Key Learning Technologies (KETs)" where the Faculty of Business is a partner.