International Scientific Conference „Contemporary Issues in Business, Management and Education“, International Scientific Conference „Contemporary Issues in Business, Management and Economics Engineering"

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The influence of assets structure on financial performance in Croatian banking system
Iris Lončar, Tonći Svilokos

Last modified: 2019-04-30

Abstract


Purpose – as the largest share of national money assets is concentrated in banks, their profitability is important not only for shareholder but also for the whole economy. The aim of this paper is to analyse the influence of the structure of total assets and its liquidity on overall success in the Croatian banking industry.

Research methodology in order to achieve the main purpose the cross-section regression models will be estimated which will include standard profitability indicators and various liquidity and assets indices.

Findings – the results of the analysis show that the level and the structure of total assets, as well as the level of its liquidity, significantly influence its profitability.

Research limitations – the analysis in this paper is limited to the influence of the asset side of the bank balance sheet in cross-section conditions. Therefore this research could be considered as a preliminary one and should be expanded by introducing the other indicators from liability in wider time horizons.

Practical implicationsthe results outlined in this paper could be practical guidelines for successful asset management which is prerequisite for achieving an adequate financial performance in the banking business.

Originality/Value – according to our knowledge, research of this phenomenon is very rare, so this is one of the first papers considering the impact of asset structure on bank performance for the Croatian banking system.

 

DOI:  https://doi.org/10.3846/cibmee.2019.024



Keywords


structure of total assets, non-income assets, liquidity, profitability, return on assets, return on equity, the Croatian banking industry

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