<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>This paper aims to assess and compare the relative efficiency of commercial banks in six Western Balkan developing countries (North Macedonia, Serbia, Montenegro, Bosnia and Herzegovina (B&amp;H), Kosovo<sup><xref ref-type="fn" rid="j_ngoe-2023-0004_fn_002">1</xref></sup>, and Albania), using the leading nonparametric methodology Data Envelopment Analysis (DEA) for the period 2016-2020, and investigating the impact of the COVID-19 pandemics on the performance of banking systems in these countries. The output-oriented DEA model has been implemented with interest expenses and non-interest expenses as inputs and interest revenue and non-interest revenue as outputs. Our findings show that the average efficiency of the six Western Balkan banking systems differs, and Kosovo’s banking system has noted the highest average efficiency in the whole observed period (2016–2020). In contrast, the banking system in Bosnia and Herzegovina noted the lowest average efficiency. The COVID-19 pandemic decreased the relative efficiency of the banking sectors in all six of the Western Balkan countries observed, except Kosovo. However, additional research that includes all pandemic years is recommended to assess the impact of the COVID-19 pandemic on the banking systems in the Western Balkans. This study provides invaluable insights for academic members, banking management and regulatory bodies, governments, and the interested public. It is the first empirical study that includes a glimpse of the first impact of the COVID-19 pandemic on banking systems in the developing countries of the Western Balkans.</p>
</abstract>

This paper aims to assess and compare the relative efficiency of commercial banks in six Western Balkan developing countries (North Macedonia, Serbia, Montenegro, Bosnia and Herzegovina (B&H), Kosovo1, and Albania), using the leading nonparametric methodology Data Envelopment Analysis (DEA) for the period 2016-2020, and investigating the impact of the COVID-19 pandemics on the performance of banking systems in these countries. The output-oriented DEA model has been implemented with interest expenses and non-interest expenses as inputs and interest revenue and non-interest revenue as outputs. Our findings show that the average efficiency of the six Western Balkan banking systems differs, and Kosovo’s banking system has noted the highest average efficiency in the whole observed period (2016–2020). In contrast, the banking system in Bosnia and Herzegovina noted the lowest average efficiency. The COVID-19 pandemic decreased the relative efficiency of the banking sectors in all six of the Western Balkan countries observed, except Kosovo. However, additional research that includes all pandemic years is recommended to assess the impact of the COVID-19 pandemic on the banking systems in the Western Balkans. This study provides invaluable insights for academic members, banking management and regulatory bodies, governments, and the interested public. It is the first empirical study that includes a glimpse of the first impact of the COVID-19 pandemic on banking systems in the developing countries of the Western Balkans.

The Impact of COVID-19 on Bank Efficiency in the Western Balkans: A DEA Approach

Naše gospodarstvo/Our economy

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

Vpliv COVID-19 na učinkovitost bank na Zahodnem Balkanu: pristop z metodo analize ovojnice podatkov

This paper aims to assess and compare the relative efficiency of commercial banks in six Western Balkan developing countries (North Macedonia, Serbia,...

The Impact of COVID-19 on Bank Efficiency in the Western Balkans: A DEA Approach

Article Category: Original Scientific Article

Pubblicato online: 05 apr 2023

Pagine: 29 - 42

Ricevuto: 01 dic 2022

Accettato: 01 feb 2023

DOI: https://doi.org/10.2478/ngoe-2023-0004

Parole chiave
Banking sector, Data envelopment analysis, COVID-19, Western Balkans

© 2023 Katerina Fotova Čiković et al., published by Sciendo

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

The Impact of COVID-19 on Bank Efficiency in the Western Balkans: A DEA Approach

Article Category: Original Scientific Article

Pubblicato online: 05 apr 2023

Pagine: 29 - 42

Ricevuto: 01 dic 2022

Accettato: 01 feb 2023

DOI: https://doi.org/10.2478/ngoe-2023-0004

Parole chiaveBanking sector, Data envelopment analysis, COVID-19, Western Balkans

© 2023 Katerina Fotova Čiković et al., published by Sciendo

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

Parole chiave
Banking sector, Data envelopment analysis, COVID-19, Western Balkans