The Impact of Macroeconomic Factors on the Performance of Commercial Banks: The Case of Lithuania

Vilda Gižienė; Daiva Laskienė; Tomas Stravinskas; Indrė Petrikė; Ineta Juodžbalytė

doi:10.5755/j01.ee.35.5.37025

Authors

Vilda Gižienė Kaunas University of Technology, Lithuania https://orcid.org/0000-0003-0195-4538
Daiva Laskienė Kaunas University of Technology, Lithuania
Tomas Stravinskas Kaunas University of Technology, Lithuania
Indrė Petrikė Kaunas University of Technology, Lithuania
Ineta Juodžbalytė Kaunas University of Technology, Lithuania https://orcid.org/0009-0005-7888-7638

DOI:

https://doi.org/10.5755/j01.ee.35.5.37025

Keywords:

Macroeconomic factors, Banking sector’s performance, Loan portfolio, Interest income, Services, Commission income

Abstract

In recent years, the stability and performance of commercial banks have become increasingly intertwined with macroeconomic conditions. This study explores the complex relationship between macroeconomic factors and the performance of Lithuanian commercial banks. By analyzing empirical data, we seek to understand how fluctuations in various economic indicators affect interest income, service and fee income and loan portfolio size in the Lithuanian banking sector. There is a lack of such research, as the efficiency of banks' operations and the sensitivity of loan portfolio quality to changes in macroeconomic indicators depend mostly on the structure and characteristics of the banking sector in each country. The results of the study show that the impact of macroeconomic fluctuations on the Lithuanian commercial banking sector is relatively limited. Understanding the impact of macroeconomic factors on commercial banks is crucial for policy makers, investors, and practitioners. Identifying these linkages can improve risk management practices, strengthen regulatory frameworks, and promote financial stability.

Author Biographies

Vilda Gižienė, Kaunas University of Technology, Lithuania

Vilda Gižienė, Dr., is an Associate Professor at the School of Economics and Business at the Academic Centre of Economics, Business and Management; Kaunas University of Technology. Her research interests include investment in human capital, the labor market, macroeconomics, and the energy market. ORCID iD 0000-0003-0195-4538.

Daiva Laskienė, Kaunas University of Technology, Lithuania

Daiva Laskienė, Dr., is an Associate Professor at the School of Economics and Business, the Academic Centre of Economics, Business and Management at Kaunas University of Technology. Her research focuses on income inequality, the macroeconomic environment, and poverty-related issues.

Tomas Stravinskas, Kaunas University of Technology, Lithuania

Tomas Stravinskas, Dr., is a Senior Lecturer at the School of Economics and Business, the Academic Centre of Economics, Business and Management at Kaunas University of Technology. His research interests encompass macroeconomics, the energy market, and the Green Deal.

Indrė Petrikė, Kaunas University of Technology, Lithuania

Indrė Petrikė is a Lecturer at the School of Economics and Business, the Academic Centre of Economics, Business and Management at Kaunas University of Technology. Her research focuses on management, marketing, business-to-business marketing, digital marketing, social media marketing, and economics

Ineta Juodžbalytė, Kaunas University of Technology, Lithuania

Ineta Juodžbalytė holds a bachelor’s degree in Economics with BA+ competence in Financial and Insurance Mathematics from the School of Economics and Business at the Kaunas University of Technology. ORCID iD 0009-0005-7888-7638.