Financial resilience of the bank and the problems of its assurance (on the example of JSC JSCB “Lviv”)
Students Name: Bida Anastasiia Petrivna
Qualification Level: master (ESP)
Speciality: Finance, Banking and Insurance
Institute: Institute of Economics and Management
Mode of Study: full
Academic Year: 2020-2021 н.р.
Language of Defence: ukrainian
Abstract: Bida A.P., Rysin V.V. (supervisor). Financial resilience of the bank and the problems of its assurance (on the example of JSC JSCB «Lviv»). Master’s thesis. - Lviv Polytechnic National University, Lviv, 2021. Extended annotation. "Resilience" should be considered as separate concepts, as opposed to "stability", "equilibrium", "reliability". In addition, for a detailed analysis of resilience, it is necessary to determine the resilience of the banking system and the resilience of the bank. From the standpoint of macro- and microeconomics, the resilience of the banking sector is not the same thing. From a macroeconomic point of view, resilience shows the process of development of the banking system as a whole. Another category is the resilience of an individual bank. The high quality of the bank is a condition that ensures its purposeful development [3]. The financial resilience of a commercial bank is a state of a banking institution in which it is solvent, change the ratio, is a sufficient amount of regulatory capital to cover all possible risks associated with banking, and is offered quite profitable, because it is created almost always [2]. In banking, one of the main indicators that indicates the financial resilience of the bank is the availability of equity. The addition of equity, taking into account when calculating it for all risks of banking, is an integral indicator of assessing the quality of capitalization and financial resilience of banking institutions with the help of banking systems in general. When a bank’s capital adequacy is understood, it should be understood that its ability to cover costs and unforeseen losses from these activities is solely for equity. At the same time, given the constant diversification of risks in the modern economic space, the priority for the banking community is the constant improvement of methods for assessing these risks and its application in determining the level of compliance of bank capital with the needs of economic development. To successfully solve this problem, a necessary condition is the coordination of efforts of both supervisors and banking institutions, rating agencies, scientists, and practitioners who are interested in developing a perfect way to calculate the rate of bank capital adequacy [1]. The object of research is financial resilience and problems of its provision on the example of JSCB "Lviv". The subject of research - theoretical, methodological, and practical aspects of financial resilience of the bank and identifying problems and taking measures and decisions to improve it on the example of JSC JSCB "Lviv". The purpose of the study: theoretical substantiation of the essence of the concept of financial resilience, determining the causes of problems in ensuring a sufficient level of financial resilience, and finding ways to improve it. In the master’s qualification work the theoretical and practical aspects of financial resilience on the example of data of JSC JSCB "Lviv" are investigated. The first section analyzes the theoretical approaches of scientists to defining the essence of the concept of "financial resilience", identifies key factors influencing the financial resilience of domestic banks, including political and economic instability, devaluation of the national currency, growing distrust of banks, inconsistency of bank refinancing mechanism, rise in the price of credit resources, deterioration of the quality of the loan portfolio. In addition, the analysis of the financial condition of the bank and the dynamics of the coefficients of financial resilience of JSC JSCB "Lviv" was carried out. According to the results of the analysis, it is established that the main causes of problems with financial resilience are due to insufficient capitalization of the bank and dependence on borrowed funds. The second section conducted a SWOT analysis of the financial and economic activities of JSC JSCB "Lviv" to determine the main strategic directions of the bank’s development in the future and identified its strengths and weaknesses, as well as opportunities and threats to the financial resilience of the bank. In the process of economic-mathematical modeling based on correlation-regression analysis the modeling of the relationship between the amount of equity and customer funds and their impact on the financial resilience of the bank. In addition, the reliability coefficients and the ratio of equity and borrowed funds were forecast according to the method of trend and average current. The third section proposes measures to increase the financial resilience of JSCB Lviv, including management of costs, risky assets, and liabilities to increase the bank’s capitalization, as well as net profit, liquidity, and solvency, and identifies economic results from the proposed solutions. The calculated financial results and the effect of the above measures indicate an overall improvement in the bank’s operations, as it is the capitalization, liquidity, and ratio of assets and liabilities, as well as the profitability of the bank, determines its level of financial resilience. Keywords: bank; resilience; financial resilience of the bank; factors influencing on financial resilience; coefficients of financial resilience; capitalization. References. 1. Batrakova O.M. Features of determining and assessing the capital adequacy of the bank / O.M. Batrakova [Electronic resource]. - Access mode: http://nauka.zinet.info/17/batrakova.php. 2. Dovgal Y.S. THE ESSENCE OF FINANCIAL STABILITY OF A COMMERCIAL BANK AND EFFECTIVE WAYS OF ITS SECURITY / Y.S. Dovgal, R.O. Chamara. // Financial space. - 2015. - No1. - P. 130–134. 3. Rysin V.V. FINANCIAL RESILIENCE OF THE BANK: FACTORS AND FEATURES OF PROVIDING / V.V. Rysin, A.P. Bida. // Effective economy. - 2021. - No3. - P. 1–9. DOI: 10.32702 / 2307-2105-2021.3.1.