The impact of interest rate and bank size in bank’s earnings in Albania

Dori Risilia, Ina Pagria & Elvis Mehmeti

Banks are one of the biggest financial institutions and their financial stability is very important. But as any other institution and company, banks face a lot of risk. One of the most important risks that they face is interest rate risk. The purpose of this research is to identify if exist a relationship between interest rate, banks size and bank’s earnings. The data we collected are secondary data and are collected from financial statements of 12 biggest Albanian banks and other sources such as Bank of Albania. The time horizon of the research is from 2013 to 2015. We tested the hypothesis with E-views software. Since we created a hypothesis we have used deductive approach. The findings show that there is a relationship between the earnings of the banks and bank size and interest rate. The relationship between bank size and net income is positive.
Key words interest rate, banks, bank size, earnings
JEL classification C12, E58, G21
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