Multidimensional assessment of banking sector competitiveness: Republic of Serbia (2015-2024)

Jasminka Đuričanin; Mirjana Mrvaljević; Jelena Veličković

doi:10.71159/bizinfo260017D

Authors

Jasminka Đuričanin Toplica Academy of Applied Studies, Department of Business Studies Blace, Serbia
Mirjana Mrvaljević Kosovo and Metohija Academy of Applied Studies, Leposavić, Serbia
Jelena Veličković Toplica Academy of Applied Studies, Department of Business Studies Blace, Serbia

DOI:

https://doi.org/10.71159/bizinfo260017D

Keywords:

banking sector, competitiveness, composite competitiveness index, Republic of Serbia

Abstract

This research evaluates the competitiveness of the Republic of Serbia banking sector in the period 2015-2024 and uses a composite competitiveness index (CCI) constructed from key performance indicators. The methodological approach of this paper includes descriptive statistics, comparative analysis with selected countries in the region and the European Union, and correlation and regression analyses. The research results show that the banking sector of the Republic of Serbia has made significant progress in the observed period. Despite positive trends, challenges related to market concentration and long-term efficiency remain. The research contributes to the contemporary literature through a comprehensive index-based assessment of the banking sector's competitiveness in the Republic of Serbia. The research also provides guidelines for economic policymakers to encourage sustainable and balanced development of the banking sector in the future.

Downloads

Download data is not yet available.

References

Ab-Rahim, R., & Chiang, S. N. (2016). Market structure and performance of Malaysian banking industry. Journal of Financial Reporting and Accounting, 14(2), 158-177. https://doi.org/10.1108/jfra-11-2014-0086

Adelopo, I., Vichou, N., & Cheung, K. Y. (2022). Capital, liquidity, and profitability in European banks. Journal of Corporate Accounting & Finance, 33(1), 23-35. https://doi.org/10.1002/jcaf.22522

Anastasiou, D., Giannoulakis, S., Koutoupis, A., Tzomakas, C., & Davidopoulos, L. G. (2022). European banks’ profitability and sentimental cycle. Review of Behavioral Economics, 9(3), 223-250. https://doi.org/10.1561/105.00000157

Arhinful, R., Mensah, L., Gyamfi, B. A., & Obeng, H. A. (2025). The impact of non-performing loans on bank growth: The moderating roles of bank size and capital adequacy ratio—Evidence from US banks. International Journal of Financial Studies, 13(3), 165. https://doi.org/10.3390/ijfs13030165

Azarenkova, G., Shkodina, I., Samorodov, B., & Babenko, M. (2018). The influence of financial technologies on the global financial system stability. Investment Management & Financial Innovations, 15(4), 229. https://doi.org/10.21511/imfi.15(4).2018.19

Berger, A. N., Klapper, L. F., & Turk-Ariss, R. (2017). Bank competition and financial stability. In Handbook of competition in banking and finance (pp. 185-204). Edward Elgar Publishing. https://doi.org/10.4337/9781785363306.00018

Bernard Azolibe, C. (2022). Banking sector intermediation development and economic growth: Evidence from Nigeria. Journal of African Business, 23(3), 757-774. https://doi.org/10.1080/15228916.2021.1926857

Bernardelli, M., Korzeb, Z., & Niedziółka, P. (2024). What drives the profitability of banking sectors in the European Union? The machine learning approach. International Journal of Management and Economics, 60(4), 272-284. https://doi.org/10.2478/ijme-2024-0022

Bourai, S., Arora, R., & Yadav, N. (2024). Structure-conduct-performance (SCP) paradigm in digital platform competition: a conceptual framework. Journal of Strategy and Management, 17(2), 322-347. https://doi.org/10.1108/jsma-07-2023-0184

Božić, I., & Božić, A. (2025). Commercial banking and financial stability: evaluating internal and external determinants. Journal of Business and Economic Options, 8(1), 1-14. https://doi.org/10.5281/zenodo.17371089

BSCEE Review. (2024). Banking Sector in Central and Eastern Europe 2024. https://www.bscee.org/review2024

Bueno, L. A., Sigahi, T. F., Rampasso, I. S., Leal Filho, W., & Anholon, R. (2024). Impacts of digitization on operational efficiency in the banking sector: Thematic analysis and research agenda proposal. International Journal of Information Management Data Insights, 4(1), 100230. https://doi.org/10.1016/j.jjimei.2024.100230

Bukvić, R. (2020a). Concentration and Competition in Serbian Banking Sector in the Period 2016–2018. Ekonomika, 66(2), 17-35. https://doi.org/10.5937/ekonomika2002017b

Bukvić, R. M. (2020b). Measuring of concentration and competition: Serbian banking sector. Synaxa–Matica Srpska International Journal for Social Sciences, Arts, and Culture, (6-7), 65-90. https://mpra.ub.uni-muenchen.de/107465/1/MPRA_paper_107465.pdf

Calice, P. (2025). Navigating the Competition-Stability Nexus in Financial Services. World Bank. https://doi.org/10.1596/1813-9450-11124

Chinoda, T., & Kapingura, F. M. (2023). The impact of digital financial inclusion and bank competition on bank stability in sub-Saharan Africa. Economies, 11(1), 15. https://doi.org/10.3390/economies11010015

Doran, N. M., Bădîrcea, R. M., & Manta, A. G. (2022). Digitization and financial performance of banking sectors facing COVID-19 challenges in Central and Eastern European Countries. Electronics, 11(21), 3483. https://doi.org/10.3390/electronics11213483

Đuranović, G., & Filipović, S. (2025). The impact of the external factors on the profitability of the banking sector in Serbia. Ekonomika preduzeća, 283-297. https://doi.org/10.5937/ekopre2506283d

Ernaningsih, I., Smaoui, H., & Temimi, A. (2023). The effect of capitalization on the competition-stability Nexus: Evidence from dual banking systems. Pacific-Basin Finance Journal, 82, 102152. https://doi.org/10.1016/j.pacfin.2023.102152

European Banking Authority. (2024). Risk Assessment Report of the European Banking System 2024. Paris: EBA. https://www.eba.europa.eu/documents/eba-2024-report

European Banking Federation. (2024). Banking in Europe: EBF Facts & Figures 2024. Brussels: European Banking Federation. https://www.ebf.eu/factsandfigures/

European Central Bank. (2024). Structural Financial Indicators. https://www.ecb.europa.eu/home/html/index.en.html

Eurostat. (2024). Eurostat database. Luxembourg: European Commission. https://ec.europa.eu/eurostat

EY. (2024). Banking Sector Pulse 2024: Trends and Insights. London: Ernst & Young. https://www.ey.com/banking2024

Ferreira, C. (2023). Competition and stability in the European Union banking sector. International Advances in Economic Research, 29(4), 207-224. https://doi.org/10.1007/s11294-023-09880-z

Fotova Čiković, K., & Cvetkoska, V. (2022). How efficient are banks in Croatia?. Ekonomski vjesnik: Review of Contemporary Entrepreneurship, Business, and Economic Issues, 35(1), 139-150. https://doi.org/10.51680/ev.35.1.11

Ghosh, A. (2016). Banking sector globalization and bank performance: A comparative analysis of low income countries with emerging markets and advanced economies. Review of Development Finance, 6(1), 58-70. https://doi.org/10.1016/j.rdf.2016.05.003

Grubišić, Z., Kamenković, S., & Kaličanin, T. (2021). Comparative analysis of the banking sector competitiveness in Serbia and Montenegro. Journal of Central Banking Theory and Practice, 10(1), 75-91. https://doi.org/10.2478/jcbtp-2021-0004

Gržeta, I., Žiković, S., & Tomas Žiković, I. (2023). Size matters: analyzing bank profitability and efficiency under the Basel III framework. Financial innovation, 9(1), 43. https://doi.org/10.1186/s40854-022-00412-y

Horvat, A. M., Milenković, N., Radovanov, B., Zelenović, V., & Milić, D. (2023). DEA efficiency of Serbian banks-comparison of three approaches. Anali Ekonomskog Fakulteta u Subotici, 59(50), 19-35. https://doi.org/10.5937/aneksub2200011m

Horvat, A. M., Radovanov, B., Milić, D., & Milenković, N. (2022). Efficiency analysis of Serbian banking sector using data envelopment analysis: pre-pandemic era. BizInfo Blace, 13(2), 41-47. https://doi.org/10.5937/bizinfo2202041m

Inđić, M., Horvat, A. M., & Pjanić, M. (2025). Assessing banks efficiency: DEA implementation. BizInfo Blace, 16(1), 21-30. https://doi.org/10.71159/bizinfo250003i

Kaličanin, T., & Terzić, I. (2023). Measures of concentration level in the banking sector: Empirical evidence from Serbia, Croatia and Montenegro. The European Journal of Applied Economics, 20(1), 107-121. https://doi.org/10.5937/ejae20-42392

Karem, A. A., & Azzahra, M. S. (2024). Analyzing the impact of regulatory policies on financial stability and market dynamics in the banking industry. Inspirasi & Strategi (INSPIRAT): Jurnal Kebijakan Publik & Bisnis, 14(2), 83-91. https://ejournal.isha.or.id/index.php/Inspirat/article/view/277

Khattak, M. A., Alaeddin, O., & Abojeib, M. (2022). Competition-stability relationship in dual banking systems: Evidence from efficiency-adjusted market power. The Singapore Economic Review, 67(01), 309-332. https://doi.org/10.1142/s0217590820420096

Korneev, V., Dziubliuk, O., Tymkiv, A., Antkiv, V., & Kucherenko, N. (2023). Banking sector stability and economic development: Assessment of risks and efficiency. Economic Affairs, 68(3), 1683-1692. https://doi.org/10.46852/0424-2513.3.2023.33

Lekić, S., Vapa Tankosić, J., Bejatović, G., & Redžepagić, S. (2025). The role of education in enhancing innovation in banks. International Review, 14(1–2), 95–104. https://doi.org/10.5937/intrev2501095L

Leonida, L., & Muzzupappa, E. (2018). Do Basel Accords influence competition in the banking industry? A comparative analysis of Germany and the UK. Journal of Banking Regulation, 19(1), 64-72. https://doi.org/10.1057/s41261-017-0053-0

Ljumović, I., Pavlović, V., & Cvijanović, J. (2014). Two aspects of concentration in Serbian banking sector. Industrija: časopis za ekonomiku industrije, 42(3), 61-77. https://doi.org/10.5937/industrija42-5867

Matović, I. M. (2018, November). Creating and developing competition in the banking sector of the Republic of Serbia. In Proceedings of the 11th International RAIS Conference on Social Sciences (pp. 59-64). Scientia Moralitas Research Institute. https://doi.org/10.2139/ssrn.3303339

Menicucci, E., & Paolucci, G. (2016). The determinants of bank profitability: empirical evidence from European banking sector. Journal of financial reporting and Accounting, 14(1), 86-115. https://doi.org/10.1108/jfra-05-2015-0060

Mijoč, I., Kuzmić, M., & Vujanić, M. (2025). Estimating the determinants of bank profitability: comparative study for EU and US banks. Organizacija, 58(1), 31-47. https://doi.org/10.2478/orga-2025-0003

Miljković, M., Filipović, S., & Tanasković, S. (2013). Market concentration in the banking sector: Evidence from Serbia. Industrija, 41(2), 7-27. https://doi.org/10.5937/industrija41-4064

Mondol, D. K., & Wadud, A. (2022). Determinants of profitability of commercial banking in Bangladesh: A panel analysis. International Journal of Statistical Sciences, 22(1), 115-143. https://doi.org/10.21511/bbs.12(3-1).2017.03

National Bank of Serbia. (2024). Annual Report on the Banking Sector in Serbia 2015-2024. https://www.nbs.rs/banking-report-2024

Obeid, R. (2023). Factors affecting return on assets (ROA) in the banking sector of selected Arab countries: Is there a role for financial inclusion and technology indicators. International Journal of Economics and Finance, 15(9), 1-1. https://doi.org/10.5539/ijef.v15n9p1

Odorović, A. (2023). Open banking: Between cooperation and competition. Annals of the Faculty of Law in Belgrade, 71(1), 65-91. https://doi.org/10.51204/anali_pfbu_23102a

Oyegbade, I. K., Igwe, A. N., Ofodile, O. C., & Azubuike, C. (2022). Transforming financial institutions with technology and strategic collaboration: Lessons from banking and capital markets. International Journal of Multidisciplinary Research and Growth Evaluation, 4(6), 1118-1127. https://doi.org/10.54660/.ijmrge.2023.4.6.1118-1127

Panhans, M. T. (2024). The rise, fall, and legacy of the structure-conduct-performance paradigm. Journal of the History ofEconomic Thought, 46(3), 337-357. https://doi.org/10.1017/s105383722300038x

Peleckis, K. (2022). Determining the level of market concentration in the construction sector—case of application of the HHI index. Sustainability, 14(2), 779. https://doi.org/10.3390/su14020779

Preziuso, M., Koefer, F., & Ehrenhard, M. (2023). Open banking and inclusive finance in the European Union: perspectives from the Dutch stakeholder ecosystem. Financial Innovation, 9(1), 111. https://doi.org/10.1186/s40854-023-00522-1

Putra, C. I. W., Manurung, A. H., & Machdar, N. M. (2024). Effect of Capital Adequacy Ratio, Credit Policy, Liquidity Risk and Non-Performing Loan on Financial Distress. Greenation International Journal of Economics and Accounting, 2(4), 309-322. https://doi.org/10.38035/gijea.v2i4.300

Raiffeisen Research. (2024). CEE Banking Sector Report 2024. Vienna: Raiffeisen Bank International. https://www.raiffeisen-research.com/cee-report2024

Santoso, D. B., Suprapto, E., Zakaria, R. A., Kusumaningrum, H. A., & Jamil, H. (2023). Analysis of banking competition in Indonesia and its impact on profitability: Structure conduct performance (SCP) approach. Journal of Innovation in Business and Economics, 7(01), 19-28. https://doi.org/10.22219/jibe.v7i01.27156

Srivastava, B., Singh, S., & Jain, S. (2023). Bank competition, risk-taking and financial stability: insights from an emerging economy. Competitiveness Review: An International Business Journal, 33(5), 959-992. https://doi.org/10.1108/cr-10-2021-0143

Todorović, A., Popović, A., Vučić, V., & Barjaktarević, M. (2025). The impact of macroeconomic factors on bank profitability: Evidence from selected Southeast European countries. International Review, (3-4), 28-36. https://doi.org/10.5937/intrev2504028t

Tran, H. S., Nguyen, T. D., & Nguyen, T. L. (2023). Market structure, institutional quality and bank stability: evidence from emerging and developing countries. Competitiveness Review: An International Business Journal, 33(6), 1046-1068. https://doi.org/10.1108/cr-02-2022-0016

World Bank. (2024). World Development Indicators Database. Washington, DC: World Bank. https://data.worldbank.org