REVIEW OF BANKING PERFORMANCE IN REPUBLIC OF NORTH MACEDONIA DURING ECONOMIC DOWNTURNS: EXPECTED OUTCOME FROM COVID 19
Research Article
REVIEW OF BANKING PERFORMANCE IN REPUBLIC OF NORTH MACEDONIA DURING ECONOMIC DOWNTURNS: EXPECTED OUTCOME FROM COVID 19
ABSTRACT
The main role of the banking system is to enable entities with excess financial resources to invest and transfer to entities that lack financial resources (and have sustained plans for new projects), with the ultimate goal of making a profit. Recessionary tendencies in the world economy, as well as the slowdown in domestic growth are negatively reflecting on the financial capacity of enterprises and their ability to regularly service liabilities. These problems in the corporate sector spill over into the banking sector over certain time delay, decreasing the bank’s profitability and efficiency as well as rising its vulnerability. After the global financial crisis 2007-2009, which made significant impact on the banking industry, new adverse macroeconomic conditions emerge globally due to COVID 19 pandemic. For a short period of time the lockdown caused a collapse of financial markets, breakdown of global value chains, and restrictions in financial flows in general. Thus, the purpose of this paper is to analyze the performance of the Macedonian banking sector during the last financial crises, regarding its profitability and risk profile, and compare them with the recent banking performance indicators, so to derive assumptions: if the lockdown caused by COVID 19 would affect the performance of the Macedonian banking sector. In this research, secondary data are used regarding particular indicators for banks that are offering services on Macedonian territory. These data will be additionally analyzed and described by conducting comparisons for different time periods and for different group of banks. The results from the analysis show that the banking sector won’t be immune to the impact of the unfavorable economic conditions, but the intensity of the decline in their performance will be directly under the influence of the operating efficiency of bank management. Large banks, because of their high value of operating efficiency, stable deposit base and more effective embedded systems for risk management will be more resilient to this turbulence.
B. DANEVSKA, A.,
(2020). REVIEW OF BANKING PERFORMANCE IN REPUBLIC OF NORTH MACEDONIA DURING ECONOMIC DOWNTURNS: EXPECTED OUTCOME FROM COVID 19. Trends in Economics, Finance, and Management Journal, 2(1), 42-51. Arrival Date Posted By:https://tefmj.ibupress.com/articles/review-of-banking-performance-in-republic-of-north-macedonia-during-economic-downturns-expected-outcome-from-covid-19
