Denys B. Management of the Value Creation Process in a Bank

The approaches to implementation of value creations process systems of banks in Ukraine are formulated in the thesis. Theoretical justification of concepts and categories related to the nature of the value of a bank, reasons for its creation and methods of managing it are shown. New methodological approaches to the classification of the stages of managing the value creation process in a bank are proposed. The role of value management within the financial management system of a bank is discovered. The essence of the theoretical approaches to the determination of the Fair Market Value of the bank is described. Benefits of usage of methods of market approach to calculation the Fair Market Value (DCF and EVA) are substantiated and practically proved. At the same time, the necessity of the capital approach in the valuation with usage of the ERP model for calculating the Cost of Equity is shown. The value structure of a bank in the context of time horizon of its creation is analyzed in the paper. On the basis of such analysis, financial and non-financial value drivers are studied in detail. Software simulation analytical model describing the influence of financial value drivers on the total bank's value and on its components (Current Operations Value and Future Growth Value) is developed. Analyses of exogenous factors to the bank that may affect its value are also done. On the basis of banking sector of Ukraine analysis the conclusion on the almost absolute absence of value managing systems implemented in domestic banks is done. Specific relative financial performance indicators which in case of implementation and usage could contribute in the formation of an effective value creation process mechanism in Ukrainian banks.