EVALUATION OF COMMERCIAL BANKS FINANCIAL SECURITY LEVEL IN UKRAINE

Abstract

In the article, basing on the previous research, the scientific and methodological approaches have been improved in order to evaluate the financial security level of commercial banks in Ukraine. The evaluation of the integral index of commercial banks’ financial security is the core element of the proposed approach. The integral index is suggested to be calculated in accordance with the following sequence of stages: 1) the formation of indicators list; 2) determination of indicators’ characteristic values; 3) collection of statistical data for the calculation of indicators; 4) the indicators valuation; 5) the indicators’ weight determination; 6) integral index calculation.
The article proposes a system of banks’ financial security indicators and their characteristic values constituting the structure of the integral index. Indicators were chosen in accordance with the principle of information availability, that is, the availability of statistical data for its calculation. To determine the weight of the indicators, the method of pairwise comparisons is proposed. The evaluated indicators are compared with each other in pairs and the results are entered into the matrix. To determine the banks’ financial security levels the universal scale of Harrington is proposed.
On the basis of official statistics published on 01.01.2019 by the National Bank of Ukraine, integral financial security indexes of all commercial banks that have a license for banking activity are defined. According to the results of Ukrainian banks ranking and grouping, banks with a high, sufficient, average, low and critical level are distinguished by the value of the financial security integral index.
Evaluation of the commercial banks financial security level is an important stage in terms of control functions of execu­tive authorities, research institutes and other stakeholders. This issue is especially relevant in the context of the risk and instability in the financial sector of the Ukrainian economy. Taking into account the most significant and accessible official statistical indicators, this approach allows to identify problem banks and adopt necessary regulatory and managerial decisions to minimize the negative effects and threats. In this case financial stability and banking sector security level tend to be increased.