Nexus between sustainability and financial performance in the Serbian banking sector




banking, ESG, sustainability, financial performance


Research Question: The paper investigates various ESG (Environmental, Social and Governance) related practices within the leading European banking groups (BGs) present in Serbian banking sector (SBS), including their financial performances. Motivation: The goal of the research was to explore approach habits to sustainable business between the leading European BGs present in the SBS. It should have in mind that SBS are in compliance with their headquarter/major shareholder. The rising global worry about ESG issues and its overall impact forces banking business model to use holistic approach, including the plug-in of sustainability and responsible behaviours. The paper draws on sustainable banking surveys of Aracil et al. (2021) and Stefanovic et al. (2021) in Business-Case domain, applying them on SBS with introduction of 3 comparable sustainable indicators (environmental loans, reduction of tCO2, community investments). It is the first study which takes in respect ESG elements of principal BGs in SBS, with the comprehensive analysis of subject’s legislative framework. Idea: The core idea of the paper was to empirically investigate the sustainable practice in SBS, based on different banks’ reports and publications, including disclosed ESG indicators. E-loans (EL) and profitability indicators were examined individually as dependent variables since other ESG and financial (solvency, financial stability and efficiency) variables served as independent ones.   Data: Analysis was conducted using data of 4 European active BGs on SBS, in the period of 2015-2021, due to fact that there was the lack of quantitative metrics and non-uniform reporting practice. Tools: Statistical analysis (descriptive statistics, correlation, regression test utilizing ANOVA), were used to draw conclusions about the relationship variables, particularly correlation between ESG variables and profitability ratios. Findings: The study showed for analyzed BGs that: (1) they had unique ESG practice, based on global standards and EBA (European Banking Authority) regulation; (2) they had good credit risk management including E-risks in practice; (3) sustainability had significant inter-connectedness among ESG constituents, as well as with some of the financial metrics; (4) statistical significance of ESG metrics for EL; however similar findings are missing when it comes to association between financial performance (in terms of profitability) and ESG practice. Contribution: The paper introduces and expands existing research related to sustainable banking on SBS for further education of all stakeholders.

Author Biographies

Nikola Stakić, Singidunum University, Faculty of Business, Belgrade, Serbia

Nikola Stakić is the Associate Professor at the Faculty of Business at Singidunum University, Belgrade, Serbia and Visiting professor at Wroclaw University of Economics and Business in Poland.  He possesses a rich domestic and international academic experience of 15+ years in the field of financial markets, securities valuation and financial institutions. Apart from his academic career, he obtained CFA® designation and provides preparation for various professional certifications in the finance field.

Lidija Barjaktarović, Singidunum University, Faculty of Business, Belgrade, Serbia

Lidija Barjaktarović is the Full Professor in the field of banking and finance at Singidunum University. She has been the Dean of the Faculty of Business in Belgrade at the Singidunum University since 2021. Professor Barjaktarovic is an academic partner of CFO Association of Serbia and CFA Society Serbia. Moreover, she is the member of scientific, organizing and program committee of FINIZ. Finally, she has been an independent supervisory board member of UniCredit Bank Serbia since 2021.




How to Cite

Stakić, N., & Barjaktarović, L. (2023). Nexus between sustainability and financial performance in the Serbian banking sector. Management:Journal of Sustainable Business and Management Solutions in Emerging Economies, 28(3), 43–56.




Similar Articles

1 2 3 4 5 6 7 8 9 10 > >> 

You may also start an advanced similarity search for this article.