Management of the credit portfolio of JSC CB "Privatbank" in wartime conditions
Students Name: Kholiavka Yaryna Olehivna
Qualification Level: master (ESP)
Speciality: Finance, Banking and Insurance
Institute: Institute of Economics and Management
Mode of Study: full
Academic Year: 2023-2024 н.р.
Language of Defence: англійська
Abstract: The management of the loan portfolio is one of the key strategic functions for banking institutions, especially in the conditions of military conflict, which can affect the economic stability and financial system of the country. This research work is devoted to the analysis of strategies and methods of managing the credit portfolio of JSC CB "Privatbank" in the conditions of war. In the first chapter, theoretical approaches to the definition of the bank’s credit portfolio and its management during crisis situations are analyzed. The influence of the military conflict on the main activities of the bank, the financial condition and how it changed during the war is also evaluated, the structure of the loan portfolio is thoroughly analyzed. The horizontal analysis of the report on the financial results of JSC KB "Privatbank" for 2021-2023 showed that the net profit in 2023 amounted to UAH 37,764 million, which exceeds the result of the previous year by UAH 14,890 million. and which is absolutely the greatest value among the banking sector of Ukraine. The structure of the loan portfolio in 2023 did not undergo significant changes, the largest share is 46.2% loans under financial leasing, loans to individuals -26% (among which 14.8% are credit cards), 2.5% is taken up by lending to legal entities , loans and advances to banks – 25.6%. In the second part of the work, a SWOT analysis of JSC CB "Privatbank" was carried out, which revealed the bank’s strengths and weaknesses, as well as development opportunities and potential threats. Development strategies for operational activities, sales promotion and financial component of the bank were also described. This section includes economic-mathematical modeling of the optimization of the structure of the bank’s loan portfolio and testing of this model. The level of profitability of the loan portfolio in 2024 is forecast using the least squares method. The third section of the study provides a list of recommended measures to improve the efficiency of the bank’s loan portfolio. Implemented measures, such as increasing and intensifying the use of credit cards, new credit products and programs for vulnerable segments of the population, improving the mortgage program, increasing government programs with compensatory interest rates, introducing credit products of unsecured lending and crowdfunding collateral, as well as reducing problem debt, significantly affected the financial indicators of the bank. They have provided increased profitability, improved net spreads and interest margins, while increasing the costs and risks that must be considered for continued sustainable operations. This research work aims to contribute to the understanding and improvement of loan portfolio management strategies for banking institutions in the conditions of war, which is an urgent task in the context of modern geopolitical realities. The object of the study - is the loan portfolio of JSC CB "Privatbank". The purpose of the research - is to analyze the bank’s credit portfolio, its structure and dynamics, to study the impact of military operations on the bank’s credit portfolio, to identify key risks and challenges, as well as to develop recommendations for increasing the stability and adaptability of the bank’s credit policy. Research goals: to analyze theoretical approaches to the management of the bank’s credit portfolio, to assess the financial condition of JSC CB "Privatbank"; to investigate the bank’s loan portfolio, its dynamics and structure; conduct a SWOT analysis of the bank; describe the economic-mathematical model of optimizing the structure of the credit portfolio and carry out the approbation of this model; predict the value of the bank’s interest income and the level of profitability of the loan portfolio; develop, in accordance with the conducted analysis, recommended measures to improve the financial condition of the bank and evaluate the results of their introduction. Key words: loan portfolio, bank, loan portfolio management, structure, borrower, martial law. Literature: 1. Korol S. V. Credit portfolio of a commercial bank: the essence and features of the formation of the optimal structure [Electronic resource] / Korol S. V., Smytsnyuk O. R. // Scientific Bulletin of the Ivano-Frankivsk National Technical University of Oil and Gas. Series: Economics and management in the oil and gas industry. - 2022. - No. 2. - P. 119-130: http://nbuv.gov.ua/UJRN/nvifnunge_2022_2_13 2. Drobyazko A.O. Credit portfolio of Ukrainian banks: analysis of the influence of the state of war [Electronic resource] / A.O. Drobyazko, O.S. Kaminska, O.S. Borshchuk // Finance of Ukraine. - 2023. - No. 7. - P. 99-112. http://nbuv.gov.ua/UJRN/Fu_2023_7_7 3. Khoma I.B. Optimizing credit risk from the standpoint of banking institution protection: theoretical and applied principles / I.B. Khoma, Yu.V. Myrhorodets // Electronic scientific journal "Priazov Economic Herald". – Issue 1(24), 2021. - C. 196-201