New Methodological Approaches to the Rapid Assessment of Efficiency of Activity of Credit Organizations (Regional Aspect)

Abstract

The subject of this study is the economic relations arising in the process of evaluating the efficiency of banking activities in the conditions of interbank competition. A competitive banking system is an indicator of a country’s market economy. Credit organizations, as active players in the financial market, offer clients banking services permitted by the Russian Federation law system. Currently, emerging economic crises affect the number of operating banks in the Russian Federation and the financial performance of commercial banks, as well as the quality and cost of banking services offered. The existing realities give rise to topics related to the prospects for the development of the financial services market and the evaluation of the efficiency of credit organizations. The authors propose their own approaches to provide insight into bank performance, taking into account the interests of investors and other stakeholders who are not insiders of banks. The study may be of interest from both a scientific and a practical point of view, in terms of application of its results. The study emphasizes the relevance of creating a mechanism for early informing all stakeholders about the true situation in a particular bank. The authors offer their own methodology, which allows to evaluate the activities of the bank according to indicators calculated on the basis of freely available information published by commercial banks and the regulator. Objective is to develop the scientific and methodological framework for evaluating the efficiency of a commercial bank under interbank competition. The methodological framework of this study includes such methods of scientific research as economic and mathematical methods of information processing, statistical and comparative analyzes, graphical, point-rating approaches to data analysis, as well as methods of cluster analysis. Main results: 1. A comparative analysis of methods for evaluating the economic situation of a commercial bank was conducted. It showed the need for applying new methodological approaches to improve the evaluation of bank performance and adapting existing methods to changing external and internal conditions of credit organizations under interbank competition in the regional financial market. 2. A new methodological approach to evaluating the efficiency of a commercial bank is proposed based on the determination of the nature of a commercial bank and the main task of a credit organization to be effective for owners and shareholders, to bring the maximum useful result to improve the welfare of its owners. Moreover, the main indicators of the bank performance in the group of profitability indicators include: ROA, ROE, return on sales, value added and ROI of employees; in the capital group: capital adequacy, capital multiplier and capital protection ratio, as well as current liquidity and assets quality. 3. A methodology for evaluating the efficiency of a commercial bank based on integral indicators is presented. 4. The methodology was tested on commercial banks of the Ural Federal District. 5. The directions for adjustment of actions of the bank management body on the basis of evaluating its performance efficiency