Almir Alihodžić – Faculty of Economics – University of Zenica, 72000, Zenica, Bosnia and Herzegovina (BH)

Anna Zielińska-Chmielewska – Poznań University of Economics and Business, Faculty of Commodity Science, Department of Business
Activity, Al. Niepodległości 10, 61-875 Poznań, Poland


4th International Scientific Conference – EMAN 2020 – Economics and Management: How to Cope With Disrupted Times, Online/Virtual, September 3, 2020, SELECTED PAPERS published by: Association of Economists and Managers of the Balkans, Belgrade, Serbia; ISBN 978-86-80194-31-8, ISSN 2683-4510


This research includes all banks in Bosnia and Herzegovina and testing internal and external
variables on bank profitability indicators. In addition, the profitability of banks in B&H is also
influenced by the financial result of operations, which is determined by price and interest rate risk. The
primary goal of this paper is to determine, through correlation and regression analysis, the strength
and significance of external and internal variables on bank profitability in Bosnia and Herzegovina.
The research period covered from 2008: q1 to 2019: q4 on a quarterly database. Also, in this paper,
the STATA 13.0 software package will be used. The following dependents variable were used: return on
asset (ROA) and return on equity (ROE). The following independent variables were used: the growth
rate of net gross/loss (GRNGL), the growth rate of non-performing loans (GRNPL), GDP growth rate
(GRGDP), concentration ratio of loans of the largest banks in the system (CR Loans), concentration
ratio of deposits of the largest banks in the system (CR Deposits), capital adequacy ratio (CAR) and
loan-to-deposit ratio. The total number of observations was 48. The results showed that the significant
influence on the dependent variables were the return on equity (ROE) and return on asset (ROA), which
has been achieved by the following independent variables, such as the growth rate of net gross/loss, the
growth rate of non-performing loans and concentration ratio of loans and deposit of the largest banks.


Profitability indicators, Non-performing loans, Concentration ratio, Loan-to-deposit ratio.


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