Zuieva O. The Estimation of bank’s financial potential

The thesis is devoted to the improvement and further development of theoretical grounds, methodological approaches and practical recommendations to the estimation of bank’s financial potential. The theoretical bases of an estimation of financial potential of bank are deepened in this work. The definition of the concept of «bank’s financial potential» are improved. The classification of species and interrelation of bank’s financial potential with other types of potential is provided. Functions, principles of functioning and the general scheme of formation and realization of bank’s financial potential are defined. Methodical approaches are distinguished and the most appropriate methods for assessing the bank’s financial potential are identified. The orientation of banks financial activity was determined on the basis of indicators of financial potential components and its main directions were defined by the specific weight in the balance sheet and 5 definitive courses of banks activity direction are allocated: lending to individuals; attraction of funds from other banks; investing in securities; attraction of funds from individuals on call accounts; lending to legal entities. It was determined that the main focus of banks in Ukraine is lending to legal entities. A set of internal factors of influence on the components of the banks financial potential was formed and a taxonomic indicator of the bank's attractiveness for the client is calculated on this basis. The close correlation between the calculated integral indicator and the bank’s share in the main directions of financial potential realization was revealed. The toolkit for evaluating the bank's financial potential have been formed based on stochastic models of the boundaries of the components of the financial potential of the bank in the main areas of attracting and allocating financial resources. Results of evaluation the maximum amount of attraction and allocation of financial resources in the main areas of the bank's activities can identify the level of realization of potential, directions and means of management efforts concentration to achieve the goal of the bank A methodical approach to assessing the priority of the components of the bank’s financial potential was developed in terms of the main directions of attraction and placement of financial resources according to characteristics of income (cost), term and risk, which allows to form the priorities of realization of the potential in an analytical way: in order to maximize income, optimize liquidity or minimize risks, and in a synthetic way – for the balanced achievement of all three goals. The methodical approach allows to concentrate administrative efforts on the most appropriate to the bank directions for attracting and allocating financial resources and identify "bottlenecks" on the basis of comparison of the calculated priorities with the real structure of banks deposit and loan portfolios, to identify trends in their structures, allowing them to make scientifically grounded managerial decisions directed to the bank’s development, as well as to create a bank’s resource base and the loan portfolio in a balanced and efficient manner. A methodical approach to assessing the bank’s financial potential based on stochastic frontier models, priorities and optimization task was developed. The approach is based on stochastic limits of the bank's possibilities to attract and allocate financial resources, which are calculated in comparison with the results of amounts of other banks with similar characteristics of activity, and the priorities of the main activity areas, and also takes into account the key requirements for the bank’s financial activity and allows to get estimates of the limits of the potential amount of attraction and allocation of financial resources in the main directions in absolute terms, which can be landmarks by financial planning in order to maximize interest income, optimizing liquidity, minimizing risk or balanced achievement of all three goals. Using developed theoretical and methodological bases for evaluating financial potential will allow banks to assess the level of their financial potential in the market of banking services of Ukraine, to determine the level of realization of financial potential in the main directions of attraction and allocation of financial resources and the main factors influencing it, to identify the priority areas of activity, that will contribute to improving the quality of financial planning and the effectiveness of bank’s financial activities.