The Impact of COVID-19 on Bank Efficiency in the Western Balkans: A DEA Approach

  • Katerina Fotova Čiković
  • Violeta Cvetkoska
  • Damira Keček
Keywords: Banking sector, Data envelopment analysis, COVID-19, Western Balkans


This paper aims to assess and compare the relative efficiency of commercial banks in six Western Balkan developing countries (North Macedonia, Serbia, Montenegro, Bosnia and Herzegovina (B&H), Kosovo1, and Albania), using the leading nonparametric methodology Data Envelopment Analysis (DEA) for the period 2016-2020, and investigating the impact of the COVID-19 pandemics on the performance of banking systems in these countries. The output- oriented DEA model has been implemented with interest expenses and non- interest expenses as inputs and interest revenue and non-interest revenue as outputs. Our findings show that the average efficiency of the six Western Balkan banking systems differs, and Kosovo’s banking system has noted the highest average efficiency in the whole observed period (2016–2020). In contrast, the banking system in Bosnia and Herzegovina noted the lowest average efficiency. The COVID-19 pandemic decreased the relative efficiency of the banking sectors in all six of the Western Balkan countries observed, except Kosovo. However, additional research that includes all pandemic years is recommended to assess the impact of the COVID-19 pandemic on the banking systems in the Western Balkans. This study provides invaluable insights for academic members, banking management and regulatory bodies, governments, and the interested public. It is the first empirical study that includes a glimpse of the first impact of the COVID-19 pandemic on banking systems in the developing countries of the Western Balkans.


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Author Biographies

Katerina Fotova Čiković

University North, Trg dr. Žarka Dolinara 1, 48000 Koprivnica, Croatia

Violeta Cvetkoska

Ss. Cyril and Methodius University in Skopje, Faculty of Economics Skopje, Blvd. Goce Delchev 9 V, 1000 Skopje, North Macedonia

Damira Keček

University North, Trg dr. Žarka Dolinara 1, 48000 Koprivnica, Croatia


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How to Cite
Fotova Čiković K., Cvetkoska V., & Keček D. (2023). The Impact of COVID-19 on Bank Efficiency in the Western Balkans: A DEA Approach. Naše gospodarstvo/Our Economy, 69(1), 29-42. Retrieved from