Bank Portfolio Research Articles

The currency channel of the global bank leverage cycle

The amplitude of leverage procyclicality is heterogeneous across banks and across countries. This paper introduces international diversification of bank balance sheets as a factor in this observed heterogeneity, with a special emphasis on currency diversification. Based on a new theoretical framework, it shows that the impact of international diversification on leverage procyclicality depends on the relative performance of economies, the global business cycle and the exchange rate regime. By altering the distribution of global bank portfolios, international diversification adds a currency channel to the risk channel of the global leverage cycle. Using granular data on banks located in Prance, the paper shows that the pre-crisis international diversification of banks increased leverage procyclicality during the 2008–2009 crisis. Focusing on the currency channel, namely the valuation effect of currency diversification, my results show that it had a negative effect on leverage procyclicality during this period. The currency channel thus helped to offset part of the increased risk caused by the crisis. These findings draw attention to the specific role of balance sheet currency diversification in financial stability risk.

Risk assessment of equity-based conventional and islamic stock portfolios

This study attempts to explore and compare the risk-return relationship and risk premia of the two parallel financial systems in Pakistan, i.e. Islamic (Sharia-compliant) and Conventional (non- Islamic) using two different asset pricing models, namely CAPM and Fama and French (FF) three-factor model. After initial classification, both systems have been split into four subcategories. So conventional stocks portfolios of banks, insurance companies, investment banks, and mutual funds have been compared with Islamic banks, leasing, Modarabah, and Islamic mutual funds stocks in terms of return, risk, and conditional volatility. These results depict significant variations in returns and/or risks (unconditional variance) between these comparable financial systems. The risk premia of conventional stocks are considerably higher than their Islamic compeers. The hypothesis of efficient risk-return relationship is supported for all portfolios, but the relationship is much stronger for the Islamic stocks as compared to the conventional ones. Moreover, the lower reward of Islamic stocks is associated with lesser conditional volatility. The nonsynchronous effect and persistence in the volatility of returns are apparent in all stocks except Modarabah and Islamic mutual funds. Further, the impact of volatility clustering on returns of all stock portfolios is quite larger than external shock.

Mortgage lending market in Russia in terms of exit out of the pandemic

Aim. The work aimed to summarize the results of the development of the mortgage lending market during the acute phase of the COVID-19 pandemic and predict its development in the near future.Tasks. The work was performed to investigate the volume of issuance and growth rates of mortgage lending in Russia; to analyze the dynamics of the total mortgage portfolio of the banking system of the Russian Federation (RF), as well as the average cost of 1 square meter of housing in the primary and secondary markets in a pandemic, combined with government support; demonstrate possible changes in the Russian mortgage market during the exit out of the COVID-19 pandemic and consequences of the implementation of state market support programs.Methods. The methodological foundation of the study was the general scientific methods of cognition, namely analysis, synthesis, generalization, visualization, and forecasting. In particular, the authors analyzed the indicators of the mortgage lending and real estate markets, identified causal relationships between the state support for mortgage lending and changes in the main parameters of the real estate market, as well as forecasting the dynamics of its individual indicators.Results. The work presents the main indicators characterizing mortgage lending in Russia from 2014 to the present time, including the aggregate mortgage portfolio of Russian banks. The study describes the average cost of 1 square meter of housing in the primary and secondary markets. The authors of the article predicted changes in the mortgage lending market, the state of the quality of bank loan portfolios and trends in the residential real estate market as a whole.Conclusion. Under conditions of the COVID-19 pandemic, mortgage lending has shown its incredible growth in association with government support. However, according to the authors, there will be significant changes in the future, which will be the consequences of such a rapid development, namely an increase in overdue indebtedness on mortgage loans, a shortage of demand for built housing which has sharply become expensive. Banks will be forced to tighten monitoring of mortgage programs and select carefully new borrowers, ensuring their highest quality.

Technologies of virtual reality and perspectives of their application in mortgage lending

The article discusses issues related to the development trends of the Russian mortgage lending market, reveals the essence and substantiates the relevance of the introduction of virtual technologies in the process of providing mortgage loans. The main purpose of the study is to analyze current trends in the Russian mortgage lending market, identify existing problems in the process of providing mortgage loans, and develop proposals for further development and improvement of this type of lending. Particular attention during the study was paid to the peculiarities of the use of virtual technologies in the banking business. The implementation of the research goal is due to the solution of the following tasks: the current state and current trends in the Russian mortgage lending market are analyzed; shortcomings of client banking services in the organization of mortgage lending are indicated; analyzed the features of the use of virtual technologies in mortgage lending and the practice of individual Russian banks using virtual reality technologies when applying for a mortgage; the key business indicators of banks that have implemented virtual technologies are given, and the impact of the increase in the share of mortgage lending on the efficiency of their activities is analyzed. To accomplish these tasks in the course of the study, methods of scientific knowledge were used: logical, analytical, the method of comparative analysis, statistical methods of information processing. As the study showed, at present, mortgages are a key driver of growth in retail bank lending, being a reliable, high-quality and profitable asset in the loan portfolios of Russian banks, and the mortgage lending market itself is promising, dynamic, but still not sufficiently technologically advanced. The use of virtual technologies by banks will improve the quality of customer service, will contribute to the growth of mortgage lending and the further development of technological innovations in the banking sector.

An artificial intelligence system for forecasting financial risk in the banking sphere in the conditions of market uncertainty

The article discusses the theoretical foundations of the analysis and forecasting of financial risk in the banking sector in conditions of market uncertainty. The relevance of the study lies in the fact that the growth of problem debts of commercial banks on loans to legal entities, individual entrepreneurs and individuals is currently the most relevant and debated issue in the banking community. The analysis of the dynamics of assets and the share of overdue loans in 2010–2021 has been carried out, trends in portfolio changes have been identified. The authors considered the advantages of using the VaR indicator as a measure of risk, noting that its weak side is the inability to assess extreme losses (in the tails) if the risk is realized in the range above the confi dence interval. The Perseptron program has been developed for forecasting the dynamics of the share of overdue loans in the portfolio of a commercial bank, which is formed on the Deductor platform. Quantization (grouping) of data was carried out using a neural network on the Deductor platform, which made it possible to identify certain patterns in the change in portfolio quality. It was revealed that the value of the share of overdue loans of commercial banks is influenced by many factors, including factors included in the AI-system, so four parameters are placed on the input layer of the perceptron (%): growth in assets, market share, change in the loan portfolio, dynamics of overdue loans. The output layer has one parameter: forecast of the share of overdue loans (%). In addition to the input layer, the neural network architecture has two hidden layers, and an output layer with one parameter. The neural network shows high forecast accuracy. The error rate for Post Bank was 1.2159 %. The authors consider a wide range of financial mathematics tools proposed by the authors in order to assess and minimize financial risks, including quantile hedging, deficit hedging with minimal risk, and optimal quadratic hedging.

Current state and ways to improve the efficiency of investment activities of domestic banks

Subject of research is the current state of activity of domestic banks of Ukraine and ways of their effective investment activities. The purpose of the article is to study and characterize the ways of effective management of the bank's investment strategy. Methods used in the research process: method of system-structural analysis and synthesis, method of comparative analysis, generalization, general science, special methods of scientific knowledge and other research methods. Study results. Credit institutions in world practice are a significant segment of the investment market and play a significant role in this process. One of the components of effective management of a modern banking institution is the implementation of effective investment activities, which requires the selection of an effective investment strategy. The imbalance of domestic banking processes, as shown by domestic and international practice, is often the main prerequisite for the development of a crisis situation in an individual bank, is a threat to the stable development of the banking sector as a whole. One of the main problems in the functioning of domestic commercial banks is the instability of the economic situation in the country, namely declining GDP growth, inflation and devaluation of the national currency, which in turn led to the outflow of bank deposits, bankruptcy of many commercial banks in Ukraine. Covid-19. Over the past year, Ukrainian commercial banks have allocated about 17% of total bank assets to invest in securities. For many years, there has been a negative decline in the share of the banking sector in investing in securities, but there has been an increase in total assets of banks in Ukraine. In addition, the positive point is the increase in the share of investments in securities in the total assets of banks over the past two years, namely from 13.97% in 2020 to 16.88% in 2021. The strategy of the bank's investment activity is an integral interconnected structured complex (system) of consecutive actions (balanced management decisions) under resource constraints, which is aimed at forming long-term effective investment activities of the bank, strengthening the bank's competitive position in the investment market. Application of results. The results of the study can be used in the activities of the Ministry of Finance of Ukraine, the Verkhovna Rada of Ukraine, the National Commission on Securities and Stock Market, in the activities of banking institutions, as well as in higher education institutions in teaching economic disciplines. Conclusions. Thus, there is an extremely high degree of risk in the activities of commercial banks, and managerial errors can lead to the most serious consequences - so effective management for commercial banks becomes especially important. However, the key components of the theory of banking management are still poorly implemented in the practice of most domestic commercial banks. This also applies to the aspect of this theory, which is related to the management of the investment banking portfolio. Thus, the adaptation of the theory of investment portfolio management of commercial banks to the specifics of the Ukrainian economy is an unalterable necessity.

FORMATION AND MANAGEMENT OF THE BANK'S INVESTMENT PORTFOLIO

For effective investment activity of banks, it is necessary to optimize and manage the bank's securities portfolio.The modern portfolio management system has a sufficient arsenal of effective tools, including a number of principles and approaches.The volatility of the Kazakhstan stock market requires the accounting service to pay increased attention to the main function of professional financial agents (including commercial banks) - resource management. The multi-dimensionality of the modern investment portfolio of a commercial bank goes beyond the traditional "accounting" model, that is, the description of the results of portfolio management activities by drawing up the balance sheet. Accordingly, within the framework of the organization of the subject of financial activity, the problem of managing the investment portfolio, building a model and technological implementation arises.Given the huge potential of theoretical developments in the field of portfolio management, Kazakhstan's commercial banks are lagging behind in the practical implementation of management models. Decision-making within the standard organizational structure of commercial banks does not reflect the current capabilities and requirements for resource management. With the development of the Internet and information technologies in Kazakhstan, the time allocated to top managers for making managerial decisions has sharply decreased. Thus, it is necessary not only to develop a model of resource management in the financial markets, its practical implementation has also become a factor in the competitiveness of a commercial bank. The relevance of the study lies in the lack of a comprehensive approach to the practical implementation of the investment portfolio management process, starting with the creation of the organizational structure of a commercial bank and ending with the introduction of management models based on improved information.

Modeling Portfolio Based on Linear Programming for Bank Business Development Project Plan

The bank’s business processes target business plans for the next year. Existing conditions, the business plan is based on the growth asset portfolio every year, so that the purchase of productive assets awaits issuers’ offers. This condition will cause a portfolio not to be measured and the inaccuracy of portfolio selection. Asset Liability Management (ALM) is the management of the structure of assets and liabilities to achieve profit. Banking books and trading books are bank portfolios to earn income. In selecting each portfolio, it contains liquidity risk, market risk and, credit risk. The level of profit is reflected in returns, while returns and risks are a trade-off so that calculations require mathematical and simulation models. Each bank needs an overview of the composition of productive assets, as short-term, medium-term and, long-term assets must be measured risk and target achievement. Linear programming method will allocate productive assets as the bank’s leading source of income, to achieve optimization of profit on the risks received. The problem with this research is that there are 830 variables as banking assets and 19 constraints as indicators of risk. In the seventh iteration of mathematical models, return 1,803 Trillyun from 11 banking book assets.

Optimization of Credit Activity of a Commercial Bank Based on a Parametric Model

In the past few decades, a line of research focusing on the financial portfolios of banking structures has been actively developed in the world’s economic science. The interest in deposit-and-loan portfolios is caused by the rapid growth of both the banking sector and the entire capital market in the world. This paper presents empirical research in the field of analysis of the credit and investment activities of a commercial bank with an extended set of criteria. The team of authors considered a certain approach to parametric modelling of the optimal banking portfolio taking into account unregulated exogenous (macroeconomic) and endogenous (set by the bank) parameters that affect its structure and composition. As part of the proposed method, a list of monitored parameters of the banking portfolio, which was developed due to financial stability and reliability indicators, was compiled. Accordingly, based on calculations with a modified parametric model and assessment of the level of their financial stability and reliability, shortcomings in the structure and composition of the portfolios of the banking organizations under research were identified with respect to the rationality of resource allocation and the adequacy of equity capital. Thus, it was concluded that taking into account the criteria for managing the banking portfolio, measures of profitability and risk, as well as the reliability of the financial and economic base and financial stability of the bank contributes to the growth of its rating and client base, which is especially important for universal commercial banks.
 
 Received: 4 September 2021 / Accepted: 22 November 2021 / Published: 3 January 2022

Analysis of the current state of the loan portfolio of commercial banks

One of the main factors hindering the stability of the banking sector is problem loans. These problem loans reduce the liquidity of banks, as well as the development of the economy as a whole. Problem loans are loans with a low probability of non-repayment or repayment of debt. Therefore, after issuing a loan, the bank must take measures to ensure that there are no loan expenses. The management of problem loans is one of the most important aspects of banking practice. The article is devoted to ensuring the optimization of the quality of the loan portfolio of Kazakhstani banks and their structure. The main problem is the high proportion of problem loans in the structure of the loan portfolio of some domestic banks. Analysis of the loan portfolio of banks in the top 5 STBs with the largest volume of non-performing loans. Analysis of the structure of the loan portfolio of banks in the top 5 STBs with the highest concentration of non-performing loans. There are also considered the main directions of the work of the Problem Loans Fund.

ОЦІНКА ЕФЕКТИВНОСТІ УПРАВЛІННЯ КРЕДИТНИМ ПОРТФЕЛЕМ БАНКУ: ТЕОРІЯ ТА ПРАКТИКА

The stability and profitability of a commercial bank directly depends on the quality organization of credit services. At the same time, it is important to explore the methodological tools for assessing the effectiveness of loan portfolio management, which will allow banking institutions to make timely management decisions regarding the formation of the optimal loan portfolio. The article describes the methodological approaches to assessing the effectiveness of credit portfolio management of a commercial bank. The most common methodological approaches, methods and indicators for determining the effectiveness of the bank's loan portfolio management are systematized. The general efficiency of management of banking institution on the basis of the analysis of the basic financial and economic indicators of activity of commercial bank is defined. The profitability of the bank's activity, the growth of cash and cash equivalents on accounts, the increase in the bank's loan portfolio and the expansion of the customer base for the period under study were established. The dynamics and structure of the loan portfolio of a commercial bank, which is dominated by consumer lending to individuals, which is the largest profitable segment of banking, has been studied. An assessment of compliance by a commercial bank with credit risk standards set by the National Bank of Ukraine was performed. The coefficient method is used to assess the effectiveness of the loan portfolio. Indicators of credit portfolio management efficiency have been studied: credit activity ratio; the share of the loan portfolio in total liabilities; equity coverage ratio of the loan portfolio; loan portfolio growth rate; the share of non-performing loans in the loan portfolio; loan portfolio hedging ratio; credit risk coverage ratio; the share of quality loans in the loan portfolio; the share of written-off loans in the loan portfolio; loan portfolio profitability indicator. The results of the calculation of some of these indicators indicate a decrease in the quality of the bank's loan portfolio. Based on the calculation of financial ratios, the directions of optimization of the loan portfolio of a commercial bank are identified.

THEORETICAL AND METHODOLOGICAL BASIS OF MANAGEMENT OF THE BANK INVESTMENT PORTFOLIO IN THE CONDITIONS OF THE RUSSIA-UKRAINE WAR AND AFTER THE QUARANTINE VIRAL PANDEMIC OF COVID-19

The types of investments used in the formation of the investment portfolio were supplemented and expanded. The principles of formation and use of the foundations of managing the investment portfolio of a commercial bank and the purpose of its strategic management were studied and augmented. It is justified that in the process of forming an investment portfolio in commercial banks, their investment attractiveness growths, which also leads to an raise in financial stability and makes it possible to increase their assets. It is noted that the efficiency and profitability of using the investment portfolio depends on the quality of performance of such functions of its management, namely: stabilization of the bank profits regardless of the phases of the business cycle; reduction of credit risk in the portfolio of bank loans; diversification of such loans taking into account the geographical coverage of clients; maintaining the level of liquidity; using a portfolio as collateral; insurance of banking activity against losses as a result of changes in exchange rates and interest rates; ensuring the flexibility of the bank portfolio of assets; increasing the financial indicators of the bank balance thanks to the quality of securities. The main goal of the formation and use of the commercial bank investment portfolio is determined, which is to ensure the implementation of its investment strategy by selecting the most effective and safe investment projects and financial instruments. It was established that the investment portfolio should be formed considering their current profitability; rates of capital cost growth; the risk of their value changing over time; financial instruments for managing such a portfolio. It has been proven that the effectiveness of the formation and use of an investment portfolio depends on the choice of its management strategy; influence of internal and external factors; an innovative approach to the speed of reaction of management personnel to such changes and the ability to constantly adjust the strategic management process; getting out of crisis situations with the least losses in the process of managing the investment portfolio.

Мінімізація кредитного ризику та підвищення якості кредитного портфеля банку

The article considers the main factors that form credit risk and determines the role of credit risk in the process of formation of the credit portfolio of a commercial bank. It is determined that bank lending involves the functioning of a complex mechanism that includes certain actions aimed at attracting cheap funds and their use in accordance with the terms of the established lending policy, taking into account the minimum risk and maximum profit. As you know, the main source of income of banks is the profit from lending. In this regard, the main problem facing the bank’s management today is the effective management of the bank’s loan portfolio. Against the background of the negative impact of the global financial crisis, the formation of an optimal loan portfolio of the bank is of particular importance in order to increase the efficiency of its activities through the appropriate credit policy. Improving the quality of lending and optimizing the structure of banks’ loan portfolios are traditionally relevant in research, as lending has always been and will remain the main economic function of banks. The article describes each stage of credit activity, which consists of sequential actions. The definition of "credit portfolio quality" as a complex concept that characterizes the efficiency of credit portfolio formation in order to determine its profitability and the degree of credit risk is considered. The development of measures to optimize credit risk is one of the ways to improve the credit process and the entire system of managing the financial flows of the bank as a whole, not just banking risks. The factors influencing the formation of credit risk are analyzed. The main approaches to credit portfolio management in a commercial bank are characterized. It is proved that most of the constructed and implemented models for optimizing the loan portfolio are based on the criterion of risk-return (rather than profitability-risk) and have certain limitations and difficulties in practical application. The quality of the loan portfolio determines the bank’s capabilities in its functioning in the market of credit products, which affects the level of its lending activity and the possibility of restoring positions in the credit market. The process associated with lending is determined by the quality of credit work in banks. Statistics on the functioning of commercial domestic and foreign banks indicates that a well-organized credit process, a well-formed loan portfolio and credit policy will ensure the bank’s prosperity in the future

A Retrospective Study of Non-Performing Loans of the Ghana Banking Sector between 1998 and 2019

This study was conducted as a retrospective analysis of the determinants of Ghana’s Non-Performing Loans (NPLs) using historical time series annual data covering the period of 1998-2013 with an extension to 2019 on NPLs to Total Gross Loans (%). A rising NPLs in a bank portfolio is a pressing issue to bank managers and regulators. The ex-post facto research design was used for this study. Using the Seemingly Unrelated Regression model and Principal Component Analysis, the study found money supply, financial development, and macroeconomics variables to be significant determinants of NPL, except real income. NPL is a significant factor used by regulators to determine financial stability and bank asset quality. The study recommends policies targeted at influencing NPLs and the need for regulators to ensure good corporate governance by the banks to avoid bank failure.

Nature-Based Solutions in Sub-Saharan Africa for Climate and Water Resilience: A Methodology for Evaluating the Regional Status of Investments in Nature-Based Solutions from a Scan of Multilateral Development Bank Portfolios

This technical note outlines the methodology used to create a region-wide dataset of projects that have implemented NBS for climate- and water-resilience objectives in two multilateral development bank (MDB) portfolios — the World Bank and the African Development Bank. The resulting dataset includes 85 projects led by these MDBS over a 10-year period (2012‒21), including 46 projects from the World Bank and 39 projects from the African Development Bank. Total budgets for World Bank projects were $7.9 billion (including $2.5 billion for components with NBS), and total budgets for African Development projects $4.2 billion (including $2 billion for components with NBS). The countries with the largest number of projects were Ethiopia (10), Ghana (7), Malawi (7), Tanzania (6), Uganda (6), and Democratic Republic of the Congo (5). The technical note also demonstrates how these projects are leveraging NBS to address urgent challenges faced by communities in SSA, including urban flooding, coastal flooding, and water security. Additionally, the note illustrates numerous types of co-benefits that NBS are generating, including biodiversity, livelihoods, and opportunities for carbon sequestration.

FORMATION OF A QUALITY CREDIT PORTFOLIO OF UKRAINIAN BANKS: STATE AND STRUCTURE OF THE CREDIT PORTFOLIO OF PRIVATBANK JSC BY DIFFERENT SECTORS OF THE ECONOMY

The purpose of the article is to consider the state and structure of the credit portfolio of JSC CB "PrivatBank" in various sectors of the economy. Analyzing the financial indicators, it has been proven that one of the priority directions in the activities of this Bank is the development of lending while maintaining the high quality of the loan portfolio. The Bank's strategic goal is to build a high-quality credit portfolio of retail and SME loans.As a result of the research, an analysis of the main analytical indicators of credit portfolio management was carried out, the structure of the credit portfolio and the structure of the credit quality of the bank's portfolio were determined during 2019–2021. The practical activities of JSC CB "PrivatBank" were studied and it was established that large loans granted to large enterprises mean big risks for the bank and its millions of depositors. But adhering to this balanced credit policy, the Bank still manages to increase its own credit activity, as evidenced by analytical calculations.To achieve the goal, the research used general scientific research methods: observation (systematic study of the bank, obtaining primary information in the form of financial reporting indicators for the analyzed period), comparison (comparison of the analyzed parameters, coefficients, balance sheet items with each other or with a basic indicator, normative value), abstraction (departure in the definition of categories from non-essential properties and selection of several essential characteristics), grouping method (when considering the classification of loans); various methods of statistical methods, in particular comparison - when comparing actual data for the relevant periods; observations were used to study and assess the financial condition of JSC CB "PrivatBank", methods of analysis and synthesis, induction and deduction.It has been analyzed and proven that the decline in business activity since the beginning of the full-scale war has led to a drop in business demand for loans. At the same time, the deterioration of macroeconomic expectations significantly reduced the risk appetite of banks. Accordingly, financial institutions have tightened lending standards for businesses. Therefore, the growth of the loan portfolio almost stopped: the amount of foreign currency loans decreased, while hryvnia loans increased several times slower than last year, and the hryvnia net corporate loan portfolio increased by 8% since the beginning of the full-scale war.Ways to solve the problems of improving and improving the quality of the bank's credit activity remain prospects for further research

THE IMPACT OF THE COVID-19 PANDEMIC ON THE BANK'S LENDING AND INVESTMENT ACTIVITY IN UKRAINE

The paper deals with the theoretical, regulatory framework for the implementation of lending and investment activities of banks in Ukraine, in particular in the economic downturn caused by the COVID-19 pandemic. The purpose of the article is to reveal the features of bank lending and investing in 2019-2021 and to identify the impact of the COVID-19 pandemic on the implementation of lending and investment activities of banks in Ukraine. The authors' approach to determining the essence of lending and investment activities of banks is substantiated. An assessment of banks' lending and investment activities in 2019-2021 has shown, that 60% of banks' loan and investment portfolios are formed from loans and 40% from investments. The main share of banks credit agreements volume is occupied by loans granted to economic entities; the bank portfolios of securities are formed mainly of profitable and low-risk government bonds. Unprecedented restrictive measures imposed to overcome the pandemic have had an impact on the activities of banking institutions, including reduced income of potential borrowers and their ability to service debt, as well as the problems for banks that have not introduced remote customer service. Analysis of the dynamics and structure of the credit and investment portfolio of Ukrainian banks, investments in investment securities, and long-term investments made it possible to identify the main trends in lending and investment activities of banks in Ukraine. Potential directions of regulatory policy implementation on the banking sector in the context of overcoming the negative consequences of the pandemic should be aimed at creating equal and transparent rules of the game between traditional and new financial service providers. The authors focus the attention on opportunities for the development of lending and investment activities of banks that emerged in the financial market of Ukraine during 2020-2021. Most of these capabilities involve providing simple, intuitive, personalized services across digital platforms with an appropriate level of cybersecurity.

Банківське кредитування компаній електроенергетичного комплексу

The article is aimed at analyzing the current state of bank lending to companies of electric energy complex, highlighting the peculiarities of the introduction of the principles of «green» lending. The importance of the development of the electricity industry as an important component of the national economy of the State is emphasized and the problems that impede the sustainable development of industry companies are identified. The level of bank lending to companies of electric energy complex is analyzed, which indicates a low level of financing of companies in the structure of the loan portfolio of commercial banks of Ukraine and indicates the predominance of short- and medium-term contracts, which limits development opportunities. It is emphasized the need to use «green» loans in order to finance energy sectors through the possibility of mobilizing private capital. The socioecological orientation of «green» lending through the impact on the management of the bank’s relevant risks in order to optimize credit structures and introduce innovative banking services is underlined. The necessity of compliance with key principles ensuring the reliability of the implementation of lending relations within the framework of the provision of «green» loans is determined. The criteria for selection and further on compliance with their sustainable development goals, ensuring the environmental friendliness of projects implemented at the expense of «green» loans, are presented. The key factors that determine the decision on «green» lending are distinguished, namely: reputation; public, joint-stock and regulatory pressure; external control, accessibility. Practical aspects of the activities of domestic banks regarding «green» loaning programs and participation in financing projects supported by the government, international financial and credit institutions are disclosed. The need to attract insurance companies and create favorable conditions on the part of the State for the introduction of «green» products and services in order to minimize the risks of implementing «green» lending schemes for electricity companies is indicated.

СУЧАСНА ДЕПОЗИТНА ПОЛІТИКА БАНКІВ УКРАЇНИ ЯК СКЛАДОВА СИСТЕМИ УПРАВЛІННЯ ПАСИВАМИ

The resilience of the banking system during the war is largely determined by the availability of sufficient sources of funding – own, attracted and borrowed. One such source is bank deposits. The deposit policy of commercial banks in Ukraine has changed significantly in recent years, and banks today have ceased to depend on deposit sources, due to sufficient liquidity of banks due to cheap funds raised from the NBU as refinancing. The main differences in the deposit policy of banks in 2014–2019 and in 2020–2022 are summarized. There is a steady increase in deposits even in times of war, and demand deposits significantly outweigh time deposits, which is due to the desire of customers to have free access to their funds in conditions of uncertainty in the future. The general tendency to increase the deposit portfolio of banks is due to the restoration of confidence in the banking system, as well as the existence of the Deposit Guarantee Fund, which during martial law and three months after its termination will provide full compensation to depositors. Since 2020, we have seen a significant reduction in the level of deposit rates, which today don’t cover inflation. In addition, banks today have no economic reason to raise deposit rates, as the real economy has not had enough facilities to increase lending due to the crisis, the COVID-19 pandemic and especially the war. As an object for investment, deposits today compete with IGLBs, which have higher yields and are not taxed. Today, the main problems associated with attracting deposits in Ukraine are: uncertainty about the future, falling incomes, reduction of interest rates on bank deposits, high level of interest income taxation, significant amounts of cash in circulation, etc. Modernization of banks’ deposit policy should be based on constant analysis of the deposit market, adaptation to the conditions of its operation and the formation of adequate interest rates by banks in order to further invest in the real economy.

INTERNATIONAL FINANCIAL REPORTING STANDARDS AS A TOOL FOR REGULATORY SUPPORT OF OPERATIONS WITH THE LOAN PORTFOLIO OF UKRAINIAN BANKS

The article analyzes the problem of application of information-analytical and regulatory support of operations with the credit portfolio of the Bank, which is currently relevant and Central to successful lending, and therefore to ensure the return of loans and increase the profitability of credit operations. The necessity of forming an effective and efficient system of information-analytical and legal support of operations with the credit portfolio of commercial banks, the main tool of which is the international financial reporting standards, is revealed. It is determined that the requirements of the modern level of globalization are still ahead of the adoption of integration changes regarding the rules and principles of accounting and management accounting by commercial banks of Ukraine. A universal, effective and efficient system of legal regulation of operations with the credit portfolio of a commercial Bank is built on the basis of the study. It is proved that the regulation of operations with the credit portfolio of a commercial Bank can be schematically represented as a hierarchical scheme with 4 levels, where International accounting standards and International financial reporting standards represent the main first level. It was revealed that according to the international financial reporting standards, loans provided by banks belong to the category of financial assets, which are one of the types of financial instruments. The other three levels of the system of legal regulation of operations with the credit portfolio of a commercial Bank, which are derived from the first level, are analyzed. It is concluded that for a more effective organization of accounting it is necessary to harmonize the Ukrainian legislation in accordance with the requirements of International financial reporting standards, and therefore commercial banks with the help of such a system of analytical indicators will be able to constantly monitor changes in the economic system and respond in a timely manner by making appropriate adjustments in case of unsatisfactory developments