Analysis of assets and ways for improving credit activity of commercial banks at the example of payable “Rayfhaisen Bank Aval”

Slobodyanyuk, Natalja and Слободянюк, Наталя Олександрівна and Yunackiy, Mariyan and Юнацький, Мар’ян Олегович and Shelever, Alina and Шелевер, Аліна (2019) Analysis of assets and ways for improving credit activity of commercial banks at the example of payable “Rayfhaisen Bank Aval”. Інфраструктура ринку (28). pp. 313-319. ISSN 2519-2868

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Abstract

The article deals with the theoretical aspect of the economic category “assets of a commercial bank” and formulated practical recommendations for improv-ing the banking activity of the banking institution, for example, PJSC “Raiffeisen Bank Aval”. In particular, it is noted that objective assessment and analysis of assets is a prerequisite for the successful operation of a financial institution. This is due to the fact that the results of active operations affect various areas of the organization: operational, financial, investment, and, consequently, reflected in key financial indicators. It is determined that the analysis of assets and their main component – loans, should be carried out in several stages. Firstly, a horizontal analysis that will allow you to study the dynamics of changes in total assets, including their individual articles. Secondly, a vertical analysis by which one can make an impression about the structure of the bank's assets by different classification features. It should also pay attention to the assessment of the structure of assets by income, which characterizes the bank's business activity and shows the level of income from different asset categories. Analysis of the composition and dynamics of changes in assets of PJSC “Raiffeisen Bank Aval” has proven that the bank managed to increase the total number of assets, which is a positive fact. These changes occurred primarily in terms of increasing the loan portfolio. The largest share in the structure of the loan portfolio is the loans granted to large enterprises. In the second place in terms of volume – loans to individuals. Revenues of PJSC “Raiffeisen Bank Aval” consist of interest income, commission income and income from trading in securities. An increase in interest income from loans to customers is a positive fact. On the other hand, with an increase in loans to customers by 31%, such an increase in interest income is insufficient. Reducing interest costs speaks of effective bank performance in attracting resources. The article provides recommendations for improving the efficiency of the banking institution. In particular, the ratio of the actual volume of loans at the level of 71% at the rate of 40% in the structure of the bank's assets, says the lack of diversification of the main activities of the banking institution. At the same time pay attention to the quality of the loan portfolio of the bank. The Bank should be more effective in reducing the share of old problem loans (write-offs, sales of bad debts, and repayment through collateral).

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