The impact of the business model on the stability of the banks. The case of the Republic of North Macedonia

Snezana, Dicevska and Ljube, Jolevski (2022) The impact of the business model on the stability of the banks. The case of the Republic of North Macedonia. Conference Proceedings CIET Valencija 2022, 930 (5). pp. 49-54. ISSN ISBN 978-953-7220-70-9

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Abstract

The business models of banks differ according to the key banking activities, financing strategies and risks they take. Successful harmonization of available opportunities and the business model of the bank is the basis for healthy and sustainable profitability. The characteristics of the business model are correlated with the risks to which banks are exposed. Many factors related to the structure of the business model can affect the overall risk profile of banks and their survival. The analysis of the business model should also serve to identify the key weaknesses in the bank's operations, which could have a material impact on its sustainability or could lead to non-fulfillment of the bank's business goals in the future. Macedonian banks apply traditional banking with a dominant activity of lending to households and the corporate sector. In fact, the analysis shows that by applying certain criteria the two types of business models can be identified, ie banks that are more oriented towards lending to households and banks that are more oriented towards lending to the corporate sector. The aim of this paper is to determine whether the choice of business model impact on the stability of banks measured by the Z-score. The Z-score is an indicator based on data from the balance sheet that provides an estimate of the bank's distance to default. Therefore, the Z-score is used as an indicator of insolvency risk. It will be calculated for each business model of banks and then with the comparison method will determine which business model is more stable and resistant to default. The results of the research will indicate to the creators of the business policies of the banks in defining the choice of business activities, i.e. the business model of dealing.

Item Type:	Article
Subjects:	Scientific Fields (Frascati) > Social Sciences > Economics and Business
Divisions:	Faculty of Tourism and Hospitality
Depositing User:	Prof. d-r Snezana Dicevska
Date Deposited:	13 Oct 2022 08:12
Last Modified:	13 Oct 2022 08:12
URI:	https://eprints.uklo.edu.mk/id/eprint/7253

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