Quantitative Analysis of Business Success Indicators in the Banking Sector of the Republic of Serbia

Identification of an appropriate set of indicators of the banking sector to be analyzed has to be observed in terms of the needs of different users. For the purpose of managing financial systems, methods for early detection of problems in banks are essential in order to protect the interests of citizens and the entire system. From the standpoint of the interests of shareholders, it is necessary to apply the method of performance comparison with competing banks in order to identify the causes of inefficiency in operations and causes of action to improve efficiency. Finally, in terms of individual users of banking services, quality of a bank shall assess the level of risk in the business, as well as the assessment of a specific risk. Some aspects of bank performance, such as liquidity and capital adequacy, are of great importance for the stability of the entire sector and their minimum values are prescribed by the National Bank of Serbia. On the other hand, financial performance and profitability indicators are essential for long-term and successful pursuit of banking business. In this paper, we use regression analysis to evaluate the influence of some of these indicators on the financial result of the banking sector in Serbia. The period that is analyzed is post 2000, immediately after the reform of the banking sector. For the purpose of analysis, the entire period is divided in two sub-periods: (1) the period from 2000 to 2008, and (2) the period after 2008, which was characterized by a negative impact of the global economic crisis.