<abstract xmlns="http://www.w3.org/1999/xhtml">
<p>The paper explores the relationship between the diversification of bank activities and a set of bank performance indicators by running multiple regression on panel data set of 22 operating banks in Serbia in the time period spanning the last 15 reporting years. We have found a positive influence of the degree of diversification, measured both by income composition and earning assets composition indicators, on the levels and stability of the banks’ return on equity. For ROA-related performance measures the relationship is not conclusive. We have also tested whether the presence of COVID-19 crisis challenged the observed regularity and confirmed that it has had tendency to reverse the long-term relationship.</p>
</abstract>

The paper explores the relationship between the diversification of bank activities and a set of bank performance indicators by running multiple regression on panel data set of 22 operating banks in Serbia in the time period spanning the last 15 reporting years. We have found a positive influence of the degree of diversification, measured both by income composition and earning assets composition indicators, on the levels and stability of the banks’ return on equity. For ROA-related performance measures the relationship is not conclusive. We have also tested whether the presence of COVID-19 crisis challenged the observed regularity and confirmed that it has had tendency to reverse the long-term relationship.

Impact of Income and Assets Diversification on Bank Performance in Serbia

Economic Themes

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

{"article-title":"Impact of Income and Assets Diversification on Bank Performance in Serbia"}

The paper explores the relationship between the diversification of bank activities and a set of bank performance indicators by running multiple regression on...

Impact of Income and Assets Diversification on Bank Performance in Serbia

Published Online: Sep 14, 2023

Page range: 197 - 214

Received: Jan 25, 2023

Accepted: Jun 20, 2023

DOI: https://doi.org/10.2478/ethemes-2023-0010

Keywords
bank profitability, income diversification, assets diversification, noninterest income, COVID-19

© 2023 Jelena Radojičić et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Impact of Income and Assets Diversification on Bank Performance in Serbia

Published Online: Sep 14, 2023

Page range: 197 - 214

Received: Jan 25, 2023

Accepted: Jun 20, 2023

DOI: https://doi.org/10.2478/ethemes-2023-0010

Keywordsbank profitability, income diversification, assets diversification, noninterest income, COVID-19

© 2023 Jelena Radojičić et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Keywords
bank profitability, income diversification, assets diversification, noninterest income, COVID-19