MACROECONOMIC AND BANK-SPECIFIC DETERMINANTS OF NET INTEREST MARGINS: EVIDENCE FROM SERBIA

Mirjana Jemović; Srđan Marinković; Kristijan Ristić; Andreja Todorović

doi:10.59864/Oditor22601MJ

Authors

Mirjana Jemović University of Niš, Faculty of Economics, Trg Kralja Aleksandra Ujedinitelja 11, Niš, Serbia Author https://orcid.org/0000-0002-5212-182X
Srđan Marinković University of Niš, Faculty of Economics, Trg Kralja Aleksandra Ujedinitelja 11, Niš, Serbia Author https://orcid.org/0000-0001-9012-9454
Kristijan Ristić MB University, Belgrade, Teodora Drajzera br. 27, Belgrade, Serbia Author https://orcid.org/0000-0001-8907-1304
Andreja Todorović University of Niš Innovation Centre, Serbia Author https://orcid.org/0000-0003-2849-6987

DOI:

https://doi.org/10.59864/Oditor22601MJ

Keywords:

determinants, net interest margin, banks, Republic of Serbia

Abstract

This paper examines the determinants of the net interest margin (NIM) of banks in Serbia during the period 2007–2023. The analysis includes indicators reflecting banking-sector conditions and selected macroeconomic variables as independent variables, while NIM is treated as the dependent variable. Using panel regression analysis, the study identifies the key determinants affecting the net interest margin of banks operating in the Republic of Serbia. The results indicate that macroeconomic factors significantly influence NIM. The key policy interest rate has a positive effect, while the exchange rate has a negative effect on NIM. Among banking sector variables, bank size and the loan-to-deposit ratio show a statistically significant negative impact, whereas the Lerner index, as a measure of market power, has a positive effect. Other variables are not statistically significant.

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