THE IMPACT OF CAPITAL ADEQUACY RATIO ON BANKS’ PROFITABILITY IN THE REPUBLIC OF NORTH MACEDONIA
The safety and solvency of the banking institutions are related to the banks’ capital. The banks’ capital is regulated by international regulation and it is under the supervision of the central bank. Namely, Basel Accords determines the minimum of the capital adequacy ratios. The banks’ capital ad...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Academica Brâncuşi
2022-02-01
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| Series: | Analele Universităţii Constantin Brâncuşi din Târgu Jiu : Seria Economie |
| Subjects: | |
| Online Access: | https://www.utgjiu.ro/revista/ec/pdf/2022-01/02_Spaseska.pdf |
| _version_ | 1811313046141796352 |
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| author | TATJANA SPASESKA ILIJA HRISTOSKI DRAGICA ODZAKLIESKA |
| author_facet | TATJANA SPASESKA ILIJA HRISTOSKI DRAGICA ODZAKLIESKA |
| author_sort | TATJANA SPASESKA |
| collection | DOAJ |
| description | The safety and solvency of the banking institutions are related to the banks’ capital. The banks’ capital is
regulated by international regulation and it is under the supervision of the central bank. Namely, Basel Accords
determines the minimum of the capital adequacy ratios. The banks’ capital adequacy ratio influences the working
success of banking institutions and, at the same time, the kind of risks the banks can take over. This way, the capital
adequacy ratio indirectly influences the banks’ financial results. Hence, the main objective of the research in this
paper is to analyze the impact of the capital adequacy ratio on the banks’ profitability in North Macedonia. The
empirical study is based on the utilization of the Auto-Regressive Distributed Lag (ARDL) method for time series
analysis via EViews v10. The results of the study have shown that there is a positive, yet statistically insignificant
relationship between the Capital Adequacy Ratio (CAR) and the Return on Average Assets (ROAA) of the Macedonian
banks, both in the short- and long-run. However, the impact of Deposit-to-Asset Ratio (DAR) on ROAA is both positive
and statistically significant both in the short- and long-run. |
| first_indexed | 2024-04-13T10:47:19Z |
| format | Article |
| id | doaj.art-ded8b799e5f449a69a099de10048b346 |
| institution | Directory Open Access Journal |
| issn | 1844-7007 |
| language | English |
| last_indexed | 2024-04-13T10:47:19Z |
| publishDate | 2022-02-01 |
| publisher | Academica Brâncuşi |
| record_format | Article |
| series | Analele Universităţii Constantin Brâncuşi din Târgu Jiu : Seria Economie |
| spelling | doaj.art-ded8b799e5f449a69a099de10048b3462022-12-22T02:49:45ZengAcademica BrâncuşiAnalele Universităţii Constantin Brâncuşi din Târgu Jiu : Seria Economie1844-70072022-02-0111537THE IMPACT OF CAPITAL ADEQUACY RATIO ON BANKS’ PROFITABILITY IN THE REPUBLIC OF NORTH MACEDONIATATJANA SPASESKA0ILIJA HRISTOSKI1DRAGICA ODZAKLIESKA2UNIVERSITY “ST.KLIMENT OHRIDSKI”-BITOLA, NORTH MACEDONIAUNIVERSITY “ST.KLIMENT OHRIDSKI”-BITOLA, NORTH MACEDONIAUNIVERSITY “ST.KLIMENT OHRIDSKI”-BITOLA, NORTH MACEDONIAThe safety and solvency of the banking institutions are related to the banks’ capital. The banks’ capital is regulated by international regulation and it is under the supervision of the central bank. Namely, Basel Accords determines the minimum of the capital adequacy ratios. The banks’ capital adequacy ratio influences the working success of banking institutions and, at the same time, the kind of risks the banks can take over. This way, the capital adequacy ratio indirectly influences the banks’ financial results. Hence, the main objective of the research in this paper is to analyze the impact of the capital adequacy ratio on the banks’ profitability in North Macedonia. The empirical study is based on the utilization of the Auto-Regressive Distributed Lag (ARDL) method for time series analysis via EViews v10. The results of the study have shown that there is a positive, yet statistically insignificant relationship between the Capital Adequacy Ratio (CAR) and the Return on Average Assets (ROAA) of the Macedonian banks, both in the short- and long-run. However, the impact of Deposit-to-Asset Ratio (DAR) on ROAA is both positive and statistically significant both in the short- and long-run. https://www.utgjiu.ro/revista/ec/pdf/2022-01/02_Spaseska.pdfbankscapital adequacy ratio (car)profitabilityreturn on average assets (roaa)banking risksnorth macedonia |
| spellingShingle | TATJANA SPASESKA ILIJA HRISTOSKI DRAGICA ODZAKLIESKA THE IMPACT OF CAPITAL ADEQUACY RATIO ON BANKS’ PROFITABILITY IN THE REPUBLIC OF NORTH MACEDONIA Analele Universităţii Constantin Brâncuşi din Târgu Jiu : Seria Economie banks capital adequacy ratio (car) profitability return on average assets (roaa) banking risks north macedonia |
| title | THE IMPACT OF CAPITAL ADEQUACY RATIO ON BANKS’ PROFITABILITY IN THE REPUBLIC OF NORTH MACEDONIA |
| title_full | THE IMPACT OF CAPITAL ADEQUACY RATIO ON BANKS’ PROFITABILITY IN THE REPUBLIC OF NORTH MACEDONIA |
| title_fullStr | THE IMPACT OF CAPITAL ADEQUACY RATIO ON BANKS’ PROFITABILITY IN THE REPUBLIC OF NORTH MACEDONIA |
| title_full_unstemmed | THE IMPACT OF CAPITAL ADEQUACY RATIO ON BANKS’ PROFITABILITY IN THE REPUBLIC OF NORTH MACEDONIA |
| title_short | THE IMPACT OF CAPITAL ADEQUACY RATIO ON BANKS’ PROFITABILITY IN THE REPUBLIC OF NORTH MACEDONIA |
| title_sort | impact of capital adequacy ratio on banks profitability in the republic of north macedonia |
| topic | banks capital adequacy ratio (car) profitability return on average assets (roaa) banking risks north macedonia |
| url | https://www.utgjiu.ro/revista/ec/pdf/2022-01/02_Spaseska.pdf |
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