№ 1/2019

Fìnansi Ukr. 2019 (1): 80–101https://doi.org/10.33763/finukr2019.01.080

MONETARY POLICY

BORTNIKOV Gennadiy ¹

¹SESE “The Academy of Financial Management”
OrcID ID : https://orcid.org/0000-0001-8388-6721

Comparative analysis of business models of public banks in Ukraine

The financial quarterly and annual reports disclosed by banks, prepared in accordance with international financial reporting standards, represent an underestimated source of information for researches and bank supervisors to analyse the bank's business model. The review of data revealed that, by the diversification of assets, the Oschadbank and the Ukreximbank positioned themselves as investment-corporate banks; Ukrgasbank and Privatbank – corporate-investment banks. The structure of funding base gives grounds for the clastering state banks correspondingly: Oschadbank as retail one, Ukreximbank – corporate and investment, Ukrgasbank – corporate-retail, and PrivatBank –primarily retail. For the analysis of banks' capability to generate income, the author calculated the indicator of‘business income’, which includes net interest income, net fee and the result of the FX exchange transactions. The banks' income from exchange rate differences, fluctuations in the value of securities, and loss provisions are treated as ‘contingent income’. The calculation of the business income would refine the profitability of the bank from thoserevenues, which are largely the result of technical changes or do not depend on the bank management. State banks have almost the same focus on lending to corporate clients, but their activity measured as loans in total assets is significantly lower than leading banks with foreign capital. There is unjustified competition between state-owned banks. Their business models have not fundamentally changed since the adoption of strategic plans in 2017-2018. Banks position themselves as universal, focusing on almost the same market segments, without clearly differing in their regional presence. All state banks exploit implicit and explicit government support as a competitive advantage over non-state banks. The national economy strongly demands at least one state bank with strategic mission of thedevelopment bank, and ideally one more bank for the development of small and medium business.

Keywords:banking business, banking sector, business model, bank stability, public sector

JEL: E50, E52, E58, G21

Bortnikov G. . Comparative analysis of business models of public banks in Ukraine / G. . Bortnikov // Фінанси України. - 2019. - № 1. - C. 80-101.

Article original in Ukrainian (pp. 80 - 101)

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