UTICAJ GLOBALNE KRIZE NA PROFITABILNOST BANKARSKOG SEKTORA U BOSNI I HERCEGOVINI
THE GLOBAL CRISIS IMPACT ON THE PROFITABILITY OF BANKING SECTOR IN BOSNIA AND HERZEGOVINA

Summary/Abstract: The global economic crisis started as a crisis in the financial system, it is spilled over to the real sector of economies causing a recession in the world. In striving to avoid the collapse of their financial systems, the governments of many countries have reacted with different instruments of monetary policy, central banks have been decreasing their interest rates, and also some of them formed dedicated funds for rescuing of their banks. It is already evident that the financial system in the world recorded huge losses, and that the cost of its recovery will be also extremely high. Because of the fact that the banks in B&H deal mainly with traditional banking, and that their assets did not include potentially dangerous investments and high-risk financial assets, the impact of the global financial crisis doesn’t seriously disturb the stability of the overall financial system. The aim of this paper is to present trends and to analyze the impact of the global economic crisis on the profitability of the domestic banking sector. The results o this research point out that the B&H banking sector recorded a significant decrease in profit, and because of the high rate of capitalization of banks, the crisis doesn’t destabilize the financial system. Return on equity (ROE) and return on assets (ROA) are on the lowest levels in comparison with other countries of New Europe for many years. Low rates of ROE are a potential problem for B&H banking sector in its effort to attract more capital and thus ensure continued lending growth, and also overall economic growth and development of country.

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