Международная студенческая научно-практическая конференция «Инновационное развитие государства: проблемы и перспективы глазам молодых ученых». Том 2

Phd Oglih V.V., Rieznik M.A., Beschastna G.O.

Oles Honchar Dnipropetrovsk National University, Ukraine


The current situation of economic and legislative instability is hampering the Ukrainian financial segment development significantly. The crediting development is held back by pessimistic macroeconomic forecasts which have an influence on both global economic aggravation and deflationary and inflationary moods of Ukrainians. The European debt crisis is influencing allowing long- and medium-term credits, the growth of interest rates. Because of an insufficient level of business crediting the renewal of main economic sectors of our country is moving ahead very slowly. The prohibition against bank loans in foreign currency, which was adopted by the National Bank of Ukraine (NBU) in autumn of 2011, was a real shock for commercial banks and population. The anxiety of people was also intensified by signing the law №4452-VI “About the system of securing private person deposits” on 19.03.2012. Now, the Fund of Private Person Deposit Securing guarantees repayment of contributions up to 150000 hrn., but since 21.09.2012 the Fund will settle the sum at its own discretion.

Under such circumstances, the increase in financial stability, effort to reduce a number of loan non-repayment cases and optimization of loan main indexes, risk and profitability, by creating an effective system of risk-management are the most topical tasks for financial establishments. The Ukrainian component adds its specific character to creating such a system.

Such native and foreign scientists as V. Vitlinskyi, A. Labanov, A. Chugunov, etc. explored risk-management. Unfortunately, the Ukrainian system of risk-management is in its initial stage at the moment, and modern methods and techniques are not used. As a result, the bank sector stability is not provided.

The target of this work is improvement of the system of risk-management elements, which are a channel of financial resources for Ukrainian economic development.

Since an exploitation of something new is possible only after a meticulous analysis of conditions and dynamics of its developing, authors scanned the main indexes of activity of banking market participants.

The tense macroeconomic situation has a huge negative effect on financial results of commercial banks. According to the information of the NBU there are negative indexes of banks’ activities from 2010 to the end of 2011 in Ukraine. In 2010 it reached its minimal level (-38450mln. hrn.). Although the data of 01.01.2012 show positive dynamics (650mln.hrn.), it is still too insignificant to make conclusions about a considerable financial climate improvement in the banking sector (Fig. 1).

Fig. 1. Financial performance of banks (mln hrn)

Fig. 1. Financial performance of banks (mln hrn)

In order to avoid mistakes of pre-crisis period bankers pay special attention to risk-management and reserve formation. Ukrainian banks have started to increase their reserves dynamically since 2008 (Fig. 2), trying to secure themselves against the situation of uncertainty, which has been prevalent at the market now.

Fig. 2. Reserves for active operations (mln hrn)

Fig. 2. Reserves for active operations (mln hrn)

Despite the fact that the growth rate for the number credits granted is still far from its pre-crisis value, 2010 witnessed some improvement. Unfortunately, it is happening together with the increase in the number of overdue payments, which indicates a high level of risk for both creditors and borrowers (Fig. 3). In November of 2011, the National Bank announced cancelling 21 bln hrn of hopeless debts.

The period of blocking crediting of the corporate sector for short-term loans has come to an end. However, the experience of pre-crisis mistakes requires special carefulness in risk-management issue solving. Banks should adhere to the policy of exacting requirements for crediting, particularly regarding the companies which are categorized as small, medium-scale businesses and private persons.

Fig. 3. Volume of granted credits (mln hrn) and overdue payments (mln hrn)

Fig. 3. Volume of granted credits (mln hrn) and overdue payments (mln hrn)

Financial establishments should not count on the significant growth of financial results because of a powerful influence of a set of macroeconomic factors and global crisis on the development of a banking segment.