Impact of size of banks and insurance companies on their profitability in Bosnia and Herzegovina

Torlaković Anes (), Proho Mahir (), Hadžiahmetović-Milišić Nejra () and Dedović Lejla ()
Additional contact information
Torlaković Anes: University of Sarajevo, School of Economics and Business
Proho Mahir: University of Sarajevo, School of Economics and Business
Hadžiahmetović-Milišić Nejra: University of Sarajevo, School of Economics and Business
Dedović Lejla: University of Sarajevo, School of Economics and Business

Journal of Forensic Accounting Profession, 2024, vol. 4, issue 1, 33-44

Abstract: In this paper, we investigate the determinants of bank profitability by examining endogenous factors used to measure the size of a financial institution. We underscore the significance of bank employees in embodying institutional values and playing a pivotal role in sales channels, as well as the impact of technological integration on customer expectations and workforce dynamics. Utilizing a dataset from regulatory agencies, which includes information from 47 banks and insurance companies in Bosnia and Herzegovina for the year 2021, the study explores the relationship between the independent variables which include the volume of total assets and the number of employees, and the dependent variable for profitability. By calculating Return on Equity (ROE) and employing a multiple linear regression model, the study finds that a statistically significant relation between independent variables and the dependent variable does not exist. Despite this, the research highlights the need for further investigation, particularly considering the differentiation between banks and insurance companies, the potential impact of outliers, and the broader economic context of the year studied. The findings suggest that a more refined model, possibly incorporating panel data, could provide clearer insights into the profitability determinants of financial institutions in Bosnia and Herzegovina.

Keywords: financial institutions; profitability; size; employees; Bosnia and Herzegovina (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.2478/jfap-2024-0003 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:vrs:jfaccp:v:4:y:2024:i:1:p:33-44:n:1003

DOI: 10.2478/jfap-2024-0003

Access Statistics for this article

Journal of Forensic Accounting Profession is currently edited by Benina Veledar

More articles in Journal of Forensic Accounting Profession from Sciendo
Bibliographic data for series maintained by Peter Golla ().