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Analysis of Business Models of Ukrainian Banks

Author

Listed:
  • Alina Derkachenko

    (Bialystok University of Technology, Bialystok, Poland)

  • Yuliya Khudolii

    (Poltava National Technical Yuri Kondratyuk University, Poltava, Ukraine)

Abstract

Today in Ukraine, the largest share of activity risks concerns the banking sector, because the activities of banking institutions directly depend on the economic and political situation in the country. The purpose of the article is to carry out a cluster analysis of business models of Ukrainian banks, to identify risks for such models, and to justify the main ways to minimize them. The business model of the bank defines the basic concepts and objects that make up the content of the banking business, as well as the relationship between them. To assess the level of financial stability of banks, the authors proposed a system of indicators, which consists of 12 indicators calculated for each bank. Descriptive statistics of variables of Ukrainian banks business models was disclosed. Cluster analysis of business models of Ukrainian banks was carried out using the Ward method and the self-organization maps of Kohonen of the determined business models of Ukrainian banks. According to the results of the cluster analysis, the five clusters were identified: Cluster # 1 – banks with a high level of financial stability; Cluster # 2 – banks with a sufficient level of financial stability; Cluster # 3 – banks with an average level of financial stability; Cluster # 4 – banks with a satisfactory level of financial stability; Cluster # 5 – banks with a low level of financial stability. The business model was analyzed, which is typical for the banks of each cluster. The distribution of banks on the Kohonen map shows that the market status and financial stability of the bank are largely related to its resource base and interest policy, with which the asset and liability management policy is agreed. Successful implementation of the development strategy of each bank is characterized by growth rates of its assets.

Suggested Citation

  • Alina Derkachenko & Yuliya Khudolii, 2018. "Analysis of Business Models of Ukrainian Banks," Oblik i finansi, Institute of Accounting and Finance, issue 2, pages 76-83, June.
    • Handle: RePEc:iaf:journl:y:2018:i:2:p:76-83
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    References listed on IDEAS

    as
    1. Oleksiy Lysenok, 2015. "Regulatory-Index Model for Evaluation of Banking Socioeconomic Efficiency," Oblik i finansi, Institute of Accounting and Finance, issue 4, pages 98-104, December.
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    Cited by:

    1. Tetiana Payanok & Mariya Kamenchuk, 2019. "Analysis and Forecasting of the Bank's Performance: The Case of the Privatbank," Oblik i finansi, Institute of Accounting and Finance, issue 4, pages 78-87, December.

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    More about this item

    Keywords

    banking system of Ukraine; business model of the bank; financial stability; banking risks; regulation of banking risks; cluster analysis; minimization of banking risks;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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