RISK ANALYSIS AND ASSESSMENT OF UKRAINIAN BANKS LOAN PORTFOLIOS EFFICIENCY

Abstract

The article deals with the issues of insufficient level of lending to the domestic economy. It is noted that economic growth is ensured by an increase in aggregate demand and investment in fixed assets of enterprises' own funds. On the other hand, the banking sector has actually gone away from investment lending.

The passivity of banks in the process of lending to the economy holds back their profitable activity, as one of the main sources of bank income is lending. The insufficient level of bank lending is determined by the low level of efficiency of the loan portfolio and its riskiness. Each bank forms its own loan portfolio, and the main criteria for analyzing this portfolio are credit risk and return.

The analysis of the structure of loan portfolios of domestic banks showed that most of the loans and debts fall on legal entities.

On the basis of the analysis of the banks' loan portfolio, it was established that the lion's share of loans granted to individuals and legal entities was the lowest class and are of great importance for credit risk. This situation was conditioned by the fact that in previous years, borrowers who received foreign currency loans, due to significant exchange rate fluctuations, automatically became debtors with a critical financial situation. In addition, a significant proportion of loans to banks issued to insiders, and, according to the legislation, such borrowers are high risk borrowers.

 An effective loan portfolio that has high returns at an acceptable risk level can be considered effective. Therefore, in order to assess the efficiency of the loan portfolio of banks in Ukraine, the interrelation between interest income from credit operations and potential losses from them is investigated in detail.

As a result of the calculations, the value of the risk of lending operations and interest income on them was found that Kredobank credit portfolios are the most effective - 93.09%, Prokreditbank - 80.55% and Raiffeisen Bank Aval - 60.74%. VTB Bank has a low efficiency of its loan portfolios - 3.81%, Ukrsotsbank - 5.14% and Prominvestbank - 6.04%. At the same time, loan portfolios of Kredobank, UkrSibbank and Ukrgasbank are the most profitable ones, while Prokreditbank, Kredobank and Credit Agricole Bank are the least risky.