Background: During the last four years, the banking sector in Bosnia and Herzegovina has been facing crisis which has caused the stagnation within the sector. Still, the results within the sector vary to a great extent from bank to bank. Objectives: The efficiency score is assessed for each bank and serves as a basis for further comparisons between banks in the period between 2008 and 2010. Methods: A modified model of Data Envelopment Analysis (DEA) has been used in order to combine several financial indicators simultaneously in a unique efficiency measure. The model provides a rounded judgement on a bank's relative efficiency. Results: Efficiency of individual banks varied throughout the observed period and not all of the banks were a part of the negative banking sector trend induced by the crisis. There is no significant difference between performance of banks in different entities of Bosnia and Herzegovina, and between smaller and larger banks. Conclusions: The results of the study can be used by bank managers to assess the performance of their banks, as observing financial ratios separately can result in a misleading conclusion. The most valuable practical implications of the findings are the provided feasible targets for the three observed years.
Background: Competition in the banking industry has been an important topic in the scientific literature as researchers tried to assess the level of competition in the banking sector. Objectives: This paper has an aim to investigate the market structure and a long term equilibrium of the banking market in Bosnia and Herzegovina nationwide as well as on its constitutional entities as well as to evaluate the monopoly power of banks during the years 2008-2012. Methods/Approach: The paper is examining the market structure using the most frequently applied measures of concentration k-bank concentration ratio (CRk) and Herfindahl-Hirschman Index (HHI) as well as evaluating the monopoly power of banks by employing Panzar-Rosse “H-statistic”. Results: The empirical results using CRk and HHI show that Bosnia and Herzegovina banking market has a moderately concentrated market with a concentration decreasing trend. The Panzar-Rosse “H-statistic” suggests that banks in Bosnia and Herzegovina operate under monopoly or monopolistic competition depending on the market segment. Conclusions: Banks operating on the banking market in Bosnia and Herzegovina seem to be earning their total and interest revenues under monopoly or perfectly collusive oligopoly.
This article has an aim to assess credit default prediction on the banking market in Bosnia and Herzegovina nationwide as well as on its constitutional entities (Federation of Bosnia and Herzegovina and Republika Srpska). Ability to classify companies info different predefined groups or finding an appropriate tool which would replace human assessment in classifying companies into good and bad buckets has been one of the main interests on risk management researchers for a long time. We investigated the possibility and accuracy of default prediction using traditional statistical methods logistic regression (logit) and multiple discriminant analysis (MDA) and compared their predictive abilities. The results show that the created models have high predictive ability. For logit models, some variables are more influential on the default prediction than the others. Return on assets (ROA) is statistically significant in all four periods prior to default, having very high regression coefficients, or high impact on the model's ability to predict default. Similar results are obtained for MDA models. It is also found that predictive ability differs between logistic regression and multiple discriminant analysis.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.