Indicators of effective bank performance

• Main Author: Oleksansr Havryliuk
• Format: Article
• Language: English
• Published: PC Technology Center 2017-09-01
• Series: Tehnologìčnij Audit ta Rezervi Virobnictva
• Subjects: profitability analysis; banking system; profitability level; financial results; rate of return; efficiency.
• Online Access: http://journals.uran.ua/tarp/article/view/113138

The essence of the concepts "rate of return and profitability of the bank" is investigated. The analysis of rate of return and profitability indicators of Raiffeisen Bank Aval JSC is carried out. Recommendations are given on raising the income level of Raiffeisen Bank Aval JSC for the future. In this research: – the essence of the concepts " rate of return and profitability of the bank" are defined. – theoretical aspects of the bank's rate of return and profitability are grounded. – the peculiarities of forming the income of Raiffeisen Bank Aval JSC by 2016 are analyzed – the main profitability indicators of Raiffeisen Bank Aval JSC are evaluated. – areas for increasing Raiffeisen Bank Aval's income level for the future are identified. The profitability of the banking system of Ukraine is constantly under the control of the NBU, it requires improvement of the procedures for reorganization and liquidation of banks, so that these measures will not reduce the population's distrust of banks. The object of research is the analysis of rate of return and profitability indicators of Raiffeisen Bank Aval JSC. As a result of the research, such research methods as: analysis and synthesis, logical generalization, analogy and comparative comparison are used. Disclosure of the essence of the concepts of rate of return and profitability, as well as the definition of specific indicators allows both shareholders, investors and customers of the bank to orient themselves in the results of the bank's activities and its prospects, without conducting an in–depth analysis of the bank's activities in the areas. After all, the analysis of indicators in the dynamics indicates the effectiveness or not the effectiveness of management of the bank's resources. It is the analysis of these key indicators – indicators that allows to see trends and prospects in the bank's activities, and in time to receive a signal regarding further actions. Exceeding the critical values of rate of return and profitability indicators, the implementation of aggressive credit policy, the lack of formed reserves in the required volume in accordance with credit, interest, currency, investment and other risks, failure to comply with the requirements of banking legislation leads to a deterioration in the bank's financial stability, which can create a real threat of non–fulfillment its obligations to customers, and in the future may lead to bankruptcy. Among the promising areas for further research on the theoretical, practical and advisory aspects of justifying the features of profitability management of the bank is the implementation of the details of the components of the profitability calculation and determining the impact of changes in each of them on the change in the profitability of the banking institution as a whole.