Modern business models of ukrainian banks: identification and assessement

Zherdetska Liliia
D.Sc. (Economics), Associate Professor, Head of the Banking Department, Odesa National Economic University, Odesa, E-mail: lzherdetska@gmail.com, ORCID ID: https://orcid.org/0000-0001-5398-868X

Batenieva Kateryna
4th year student of the Odesa National Economic University, Odesa, E-mail: batekol2002@gmail.com, ORCID ID:

Cite this article:

Zherdetska L., Batenieva K. (2023) Modern business models of ukrainian banks: identification and assessement. Ed.: V.V. Kovalenko (ed.-in-ch.) and others [Suchasni biznes-modeli bankiv Ukrainy: identyfikatsiia ta otsiniuvannia; za red.: V.V. Kovalenko (gol. red.)], Scientific Bulletin of the Odessa National Economic University (ISSN 2313-4569), Odessa National Economics University, Odessa, No. 5-6 (306-307), pp. 47-53.

Abstract

Introduction. The main challenges of modern environment, that require improvement of approaches to the bank businessmodels assessment, are the following: quarantine restrictions in connection with the Covid-19 pandemic; geopolitical instability and war in Ukraine in connection with full scale invasion of russia. Under such circumstances new approaches related to identification and evaluation of banking activity should be substantiated. In the article we propose one of those approaches based on banks’ business models assessment. Improvement of methodological approaches to identification and assessment of bank business models in Ukraine in the modern conditions. Indicators for identification bank business models has been substantiated. Two groups of indicators were selected. These groups are the group based on assets and the group based on liabilities. The group based on assets includes such indicators as the share of interbank loans in net assets; loans to legal entities and loans to individuals as a percentage of net assets; share of investments in net assets. The group based on liabilities includes: bank funds (including funds received from the National Bank of Ukraine) as a percentage of liabilities; funds of legal entities and funds of individuals as a percentage of liabilities; borrowed funds (debt securities, other borrowed funds and subordinated debt), as a percentage of liabilities; the share of capital in the sum of liabilities. Based on own calculations we identified business models of Ukrainian banks under the modern conditions. They are investment with interbank funding, investment with corporate funding, investment with retail funding, investment with capital funding, corporate, corporate with retail funding, corporate with capital funding, retail. To assess business models of Ukrainian banks we substantiated such indicators as return on assets, return on equity, return on investments, yield of assets. Banks with the following business models turned out to be the most profitable: investment with corporate funding, investment with retail funding, corporate with capital funding. According to the results of the assessment of business models based on profitability and profitability indicators, it was established that in Ukraine, in modern conditions, investment business models are the most profitable and profitable. This is ensured by the specificity of investments in government securities, which provide both high income and minimal risk for Ukraine.

Keywords

bank, business models of banks: investment, corporate, retail and universal, yield and profitability of assets.

JEL classification: G210; DOI: 10.32680/2409-9260-2023-5-6 -306-307-47-53

UD classification: 336.719

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