COMMERCIAL BANKING PERFORMANCE AS PREREQUISITE FOR BUSINESS DEVELOPMENT

Authors

DOI:

https://doi.org/10.18371/fcaptp.v3i38.237416

Abstract

Abstract. The article substantiates the need to improve the performance of banks as one of the prerequisites for the economic development of business entities. To assess the performance of banks, the methodological approaches to such an assessment are generalized and their advantages and disadvantages are analyzed. The ease of use and interpretation of the results obtained has been proved when using the coefficient approach as a tool for assessing the performance of Ukrainian banks. However, in order to mitigate the main drawback of the coefficient methodological approach, which is expressed in the impossibility of obtaining an unambiguous assessment of the banking performance, it is proposed to apply a methodological approach that provides for the determination of an integral indicator of the banking performance using taxonomy methods. The use of the method of taxonomic analysis made it possible to generalize eleven relative coefficients that comprehensively characterize the banking performance: the overall efficiency of the bank, the efficiency of resource use, the structure of revenues and expenses and the efficiency of personnel use, as well as obtain an integral indicator of development. The proposed methodology for assessing the level of banking performance was tested on the example of state banks of Ukraine with their subsequent ranking. In particular, the authors found that JSC «Oschadbank» was the leader in terms of performance in 2017. However, during 2018—2019, the leadership passed to JSC CB «PrivatBank». The need to improve the performance of JSC «Ukreximbank» and JSB «Ukrgasbank» was proved, since JSC «Ukreximbank» was characterized by a decrease in business performance, and the lowest level of performance was found in JSB «Ukrgasbank». We believe that research on the main reasons for the decline in the banking performance and the impact of such trends on economic growth, including the development of entrepreneurship, is promising and practically significant.

Keywords: efficiency, assessment, bank, taxonomy, integrated indicator, economic growth, entrepreneurship.

JEL Classification   

Formulas: 0; fig.: 1; tabl.: 5; bibl.: 18.

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Published

2021-06-30

How to Cite

Romashko, O., Zapukhliak, I., Krykhivska, N., Farat О., & Kalynovskyy, A. (2021). COMMERCIAL BANKING PERFORMANCE AS PREREQUISITE FOR BUSINESS DEVELOPMENT. Financial and Credit Activity: Problems of Theory and Practice, 3(38), 25–34. https://doi.org/10.18371/fcaptp.v3i38.237416

Issue

Section

The Modern banking. The problems and prospects of development