Ukrainian banking system efficiency after double reducing of the number of bank institutions

Olena Prymostka,Liudmyla Prymostka

doi:10.21511/bbs.13(4).2018.05

Olena Prymostka, Liudmyla Prymostka

Open Access

https://doi.org/10.21511/bbs.13(4).2018.05

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Abstract

The article intends to evaluate the efficiency and performance of Ukrainian banking system based on two stages. The first stage, when the number of banks was on average the same during that period, and the second stage, that began in 2015 and when the number of banks began to fall quickly up to 82 institutions in 2018. The study is based on the model of dynamics norm of the banking system efficiency for two periods.The concept of efficiency was used based on the methods of non-parametric statistic to obtain performance estimates. The implementation of a dynamic model, based on the peculiarities of the banking system functioning, allows to obtain a generalized assessment of the economic efficiency of banking activity before and after critical change in the number of bank institutions. The correlation matrix between financial indicators of the banking system activity was created and the dynamic norm for the two periods was calculated. Given the analytical comparison of indicators, more effective period was identified. The general results of the study indicate that the overall efficiency of the banking system started to grow up since 2015.

Highlights

Ukrainian banking sector has developed for more than twenty years
Dij – is an element of the match matrix, which is where EF – assessment of the banking system effilocated at the intersection of the i-th row and the ciency; n – number of indicators in the dynamic j-th column; norm; i, j – numbers of indicators in the dynamic norm; dij = 1 if sij = 1 simultaneously with fij > = 0; or if sij = –1 simultaneously with fij < = 0; sij is an element of the matrix of reference concurrent preferences, which is at the intersection of the i-th row and the j-th column; dij = 0 in all other cases. dij is an element of the matrix of matches, which is
The research proves that a definite point of structural change of the efficient activity of the Ukrainian banking system really became a turning point for the better

Summary

Introduction

Ukrainian banking sector has developed for more than twenty years. Ukrainian banking system had experienced dramatic changes over the last three years. The number of banks were on average the same during that period. Since 2015, the number of banks began to fall quickly up to 82 institutions in 2018. An appropriate performance measurement system is required to gauge the efficiency of banks. There are significant changes in Ukrainian banking system, it is under recession and in process of the “purge” of the banking system, the issue of consequences of such changes is of particular relevance

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Results

Conclusion