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.
