Determinants of Bank Profitability
Determinants of Bank Profitability

Evidence from Serbia

Summary/Abstract: Although the Serbian banking sector has not suffered major consequences of the latest global economic crisis, profitability of most banks, as well as the sector as a whole is at a very low level, especially since 2011. The aim of this paper is to identify the main factors which affect the profitability of commercial banks in the Serbian banking sector. Also, different theories of commercial bank profitability are presented, as well as results of empirical research. The methodology of research is based on an econometric panel data analysis. The analyzed sample consists of 28 commercial banks, while the observed period includes 2008–2013. The dependent variable in the model representing bank profitability is return on equity (ROE), while explanatory variables include a list of bank-specific and countryspecific indicators.

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