Shlonchak V. Efficiency of lending and investment banking of banks in conditions of instability of Ukrainian banking system

We made theoretical generalization in PhD thesis and proposed solution for scientific problem having significant importance. It is related to deepening of theoretical and methodological principles and development of methodological approaches as well as finding practical solutions to allow for improvement of efficiency of lending and investment banking (abbreviation LIB) in conditions of banking system instability. It has been proved that appliances of economic and mathematical approaches allows to identify factors having lead to decrease of LIB efficiency. Application of methodology based on integral assessment calculations allows for obtaining relevant data by customizing analytical tools to analysis purposes. One of the major advantages of the methodology is ability to adjust activity in short and long term periods. Ability to get comparative data by using benchmark indicators allows for accurate analysis by taking into consideration impact that external economic environment has on LIB efficiency ratio for banks. To evaluate risks of lending and investment banking the approach of dynamic risk analysis of LIB has been developed taking into consideration advantages of method of regulatory index assessment. It also involves calculations of LIB riskiness indicators as well as calculation of dynamic step-by-step effect. Calculated effect allows for accurate measurement of change of LIB riskiness rate as well as its comparison within periods of investigation. Application of Integral assessment method in conjunction with dynamic analysis method allowed for accurate analysis of efficiency and riskiness of LIB of Ukrainian banks as well as it supplemented providing recommendations with higher degree of objectivity. During empirical investigation it has been proved that the highest efficiency ratio of investment banking is achieved under conditions of cyclical portfolio formation. Applying economic and mathematical modelling the approach to optimal investment portfolio formation has been developed. It is based on cyclical bank demand and evaluates impact that other market participants make. The instability factor’s impact is considered to be the complex impact that set of uncertainty factors makes on LIB efficiency. The model allows for identification of the optimal amount of securities that the bank should buy during certain time period that leads to obtaining maximum LIB efficiency ratio because of optimization of expected coupon payment amount and the asset’s price.