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The purpose of this paper is to investigate the relationship between bank ownership (foreign vs. domestic) and bank profitability in three South-Eastern European countries, Bulgaria, Macedonia and Serbia using individual bank data. There are a lot empirical evidences that banks with foreign ownership have better performance. This is due on the better corporate governance in those banks that is manifest with better risk management system. In micromanagement, better risk management system is depicted in better granting criteria, more strict and unbiased process, better monitoring system and more proactive strategy. This leads to better quality of the credit portfolio and better performance indicators. This paper will explore this hypothesis on basis of a sample of 24 banks from the three sample countries through a data series of ROE for the period 2008-2016.

The core goal of this paper is to assess the level of finacial inclusion in Republic of Macedonia. The level of financial incluison in a country is important because it can facilitate the reduction of poverty in a country. Aslo the higher level of financial inclusion can have positive impact on macroeconomic development by facilitating the economic growth. The main mechanisams are lower transactional costs and better distribution of capital. Also the level of financial inclusion is important for effective execution of other social policies. The level of financial inclusion in Macedonia is on satisfactory level which was driven by the legislation also. Almoust all the population have access to bank account which is good base for further measures. Still, the use of the account only to receive wage and withdraw from ATM indicates for higher need for financial education. Also, the new payment methods like credit cards or electronic payments are on very low level which further emphasizes the need for education in which the banks must have more active role. The borrowings in major part are from relative and friends and from retail stores. In all categories as less financially included are older people, people with smaller income and people how are less educated. This gives clear path for the policy makers where to focus its activities of enhancement of the level of financial education.

The aim of this paper is to evaluate the influence of trends in retail loan portfolio on the consumption and economic growth of Macedonia. The consumption of population is one of the components of GDP, and one of its drivers is the retail credit activity. On macroeconomic level, there is wide consensus among researchers that credit activity and quality of portfolio is driven by GDP movements, unemployment ratio and indebtedness of population. Also, vice verse the activities in retail segment influence on consumption and indirectly on GDP. So these two linkages enhance between and can result in negative spiral. Negative movements in GDP influence on the quality of portfolio and higher NPL ratio. And higher NPL ratio results in further decrease in credit activity and has additional negative impact on GDP. Because of that is important to determine the causes of credit activity in this segment. The retail portfolio in the last 4 years in Macedonian banking sector is growing continuously, opposite of other Balkan countries. That is why is important to analyze the past growth of retail portfolio and to determine possible weaknesses because of its future impact on GDP. One of the most important drivers that determine the future credit growth is the quality of retail credit portfolio in the moment. Another important aspect for the portfolio trend will be the interest rate environment. There is clear empirical evidence that low interest environment triggers greater credit activity and vice versa. Another important aspect of the credit qrowth, is the maturity of the retail credit portfolio as a way to decrease the monthly installments and to accumulate greater risk on longer term. Special focus of this paper will be the trend in retail loan portfolio after 2008, when the banking system of Macedonia felt the impact from financial crisis. The activities that were taken by the banking sector then can be some guidelines for future crisis. The retail credit growth will be analyzed by products in order better to understand bank strategies and reasons that contributed for such a growth. Also, the analyze of NPL ratio by product will give answer whether the quality of portfolio by products was one of the key drivers for credit activity.

The aim of this paper is to evaluate the level of NPL loans in banking systems of the three sample Balkan countries. The special attention is dedicated to the level of NPL loans and their ratio compare to total loans. The quality of credit portfolio is important determinant in future bank strategies, thereby it’s important for the economic development of the whole country. The NPL loans affect the economic development through the credit activity which influence on the consumption and the capital adequacy ratio which constrain the possibility of growth. Thus creating a spiral and higher NPL ratio create low economic growth and low growth creates further NPL portfolio. In this paper analysis will be focused to compare the data of quality of credit portfolio in Macedonia, Serbia and Croatia. The comparative analysis will outline the differences in the quality of the portfolios in sample countries as well as the reasons for the differences. The reasons for higher resilience of some banking systems portfolios compared to others can be used as a valuable tool for enhancing the stability of the banking systems. These three countries are chosen because they had high credit growth in the past until the financial crises, they were affected by the crisis in the same time and their banking systems are dominantly owned by foreign banks.

The modern world is painted with constant changes, in which the key to economic success lies in the ability of their understanding and optimally adapt to new business environments. The company is now fragmented by numerous lines - horizontal, vertical, and oblique and - the same number and interest of the opposing groups. These interests are opposed to a force that cannot be ignored. The force field imposed on certain moves and actions, even if the stakeholders have very different orientations. The forces produced by interweaving dynamic tendencies that generate the appropriate effects, and that the actors are not able, or to modify or to eliminate them. This complex constraint imposed by the act, and that same force and relentless, like the standard static constraints that economists are so close and are part of their usual analytical instruments. The disintegration of the bipolar system of international relations and a number of major political and economic consequences that are derived from it, have caused certain divert foreign policy and economic priorities. In today’s world, international and economic relations are a system of power relations, both political and economic. Economies are becoming less and less national, and increasingly global. However, regardless of the apparent trend in the international political and economic relations, the role of the state remains very significant, especially in the areas of economic relations. Most developed countries that their power based on economic superiority and supremacy in the field of manufacturing, its foreign policy priorities more shifting and linked to the economic sphere, trying to realize their interests, among other things, strong economic engagement.

The aim of this paper is to elaborate the impact of the new Basel III rules of the capital position on Macedonian banks and their activities. Having in mind the characteristics of the banking system, although Basel III still isn’t at force in Macedonia, this paper will analyze its impact on the CAR on banks. The financial crises showed that the bank’s resistance to crises is very fragile and two main issues were recovered that should be enhanced: the capital strength of the banking system and the liquidity position. As a result of the identified weaknesses of the regulatory framework the Basel Committee acceded to revision of the Basle II principles. The main question is will the new regulatory framework enhance the resilience of the banking system and how these changes will affect the business model of banks. Off course the effectiveness of the new framework depends on the decision of national regulators and legislation in different countries and regions. Having in mind the aim of this paper, the implications from Basel III regarding quality and quantity of the capital that is required will be analyzed on Macedonian banks on individual level.

The aim of this paper is to examine the impact of the accession of Macedonia in the EU on the banking system. EU enlargement is a complex process with enormous impact on the economy of the new member countries. The financial system of the new member country, and the banking system as part of it, faces the challenge of integration in the EU financial system. The best evidence of the EU accession impact on the banking system is the analysis of the basic characteristics of banking systems of the countries that have become members in the last 20 years. The future banking development in the new EU member countries will very likely follow some main patterns known from the old EU members. In a way, banks from candidate countries can see their own future by observing the current developments in the Western European banking. The process of restructuring in the banking system through consolidation which has led to increased concentration has been one of the main drivers of changes. The existence of this process in new EU countries will be examined together with the structure of the Macedonian banking system. It is important to examine whether significant efficiency improvements have been achieved in the banking systems of the new EU countries and if they are a result of the bigger market power or some other factor. Also, there have been changes in the funding sources of the banks from the new EU countries with a lot of potentials for alternative funding. The financial crises has made these potentials evaporate, but on the long-term horizon, those opportunities will appear again. The low level of financial intermediation in new EU countries leaves space for increasing the range of financial services and their scope.

The aim of this paper is to examine the impact on the banking system from the accession of Macedonia in the EU. EU enlargement is a complex process with enormous impact on the economy of the new member countries. The financial system of the new member country, and the banking system as a part of it, faces with the challenge of integration in the EU financial system. The best evidence of the EU accession impact on the banking system is the analysis of the basic characteristics of banking systems on the countries that became members in the last 20 years. The future banking development in new EU member countries will very likely follow some main patterns known from the old EU members. In a way banks from candidate countries can see their own future by observing the current developments in Western European banking. The process of restructuring in the banking system through consolidation which lead to increased concentration was one of the main drivers of changes. The existence of this process in new EU countries will be examined together with the structure of Macedonian banking system. It is important to examine whether significant efficiency improvements were achieved in the banking systems of the new EU countries and are they result from the bigger market power or some other factor. Also, there were changes in the funding sources of the banks from the new EU countries with a lot of potentials for alternative funding possibilities. The financial crises made these potentials to evaporate, but on long term horizon, those opportunities will appear again. The low level of financial intermediation in new EU countries leaves space for increasing the range of financial services and their scope. Associated with the previous, a further enlarge of the market share on non-bank financial intermediaries in new EU members can be expected.