Economics and Business Management

Formation of a quality credit portfolio of ukrainian banks: State and structure of the credit portfolio of “Privatbank’’ JSC by different sectors of the economy

Olena Zharikova, І. Verbovenko
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Abstract

The purpose of the article is to consider the state and structure of the credit portfolio of JSC CB "PrivatBank" in various sectors of the economy. Analyzing the financial indicators, it has been proven that one of the priority directions in the activities of this Bank is the development of lending while maintaining the high quality of the loan portfolio. The Bank's strategic goal is to build a high-quality credit portfolio of retail and SME loans. As a result of the research, an analysis of the main analytical indicators of credit portfolio management was carried out, the structure of the credit portfolio and the structure of the credit quality of the bank's portfolio were determined during 2019–2021. The practical activities of JSC CB "PrivatBank" were studied and it was established that large loans granted to large enterprises mean big risks for the bank and its millions of depositors. But adhering to this balanced credit policy, the Bank still manages to increase its own credit activity, as evidenced by analytical calculations. To achieve the goal, the research used general scientific research methods: observation (systematic study of the bank, obtaining primary information in the form of financial reporting indicators for the analyzed period), comparison (comparison of the analyzed parameters, coefficients, balance sheet items with each other or with a basic indicator, normative value), abstraction (departure in the definition of categories from non-essential properties and selection of several essential characteristics), grouping method (when considering the classification of loans); various methods of statistical methods, in particular comparison - when comparing actual data for the relevant periods; observations were used to study and assess the financial condition of JSC CB "PrivatBank", methods of analysis and synthesis, induction and deduction. It has been analyzed and proven that the decline in business activity since the beginning of the full-scale war has led to a drop in business demand for loans. At the same time, the deterioration of macroeconomic expectations significantly reduced the risk appetite of banks. Accordingly, financial institutions have tightened lending standards for businesses. Therefore, the growth of the loan portfolio almost stopped: the amount of foreign currency loans decreased, while hryvnia loans increased several times slower than last year, and the hryvnia net corporate loan portfolio increased by 8% since the beginning of the full-scale war. Ways to solve the problems of improving and improving the quality of the bank's credit activity remain prospects for further research

Keywords

bank; National Bank of Ukraine; loan; bank's loan portfolio; income; quality analysis; structure of the bank's loan portfolio

Suggested citation
Zharikova, O., & Verbovenko, І. (2022). Formation of a quality credit portfolio of ukrainian banks: State and structure of the credit portfolio of “Privatbank’’ JSC by different sectors of the economy. Economics and Business Management, 13(4), 46-61. https://doi.org/10.31548/economics13(4).2022.46-61
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