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Integral Assessment of Banking Activity Effectiveness and Rating of Ukrainian and Bulgarian Banks

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  • Mariya Rubakha
  • Lesia Tkachyk
  • Olena Hamkalo
  • Khrystyna Demkiv

Abstract

The article proposes a method for evaluating and rating the effectiveness of banks on the basis of coefficient analysis. It is proposed to calculate 24 coefficients, which allow to estimate capital-resource, credit-investment and general effectiveness of banks. According to the developed method, the rating of banks of Ukraine and Bulgaria was formed. Based on the rating, the banks of both countries are divided into 4 groups: high, sufficient, low and critical effectiveness. The rating indicators prove the higher effectiveness of the banks in Bulgaria and generally the higher stability of the banking system compared to Ukraine. The study developed an integral indicator of the bank's operation, which is a tool for a comprehensive assessment of the bank's performance and can be used to analyze the absolute effectiveness and stability of banks in different countries. Along with effectiveness, the integral indicator includes indicators of bank capital adequacy and its qualitative characteristics (customer confidence, image, transparency, comfort and simplicity). According to the results of the integral assessment, taking into account the balance of coefficients in groups, banks occupy the corresponding position in the matrix, which indicates their class (strong, mediocre, weak) and the presence of problems in certain aspects of the activity.

Suggested Citation

  • Mariya Rubakha & Lesia Tkachyk & Olena Hamkalo & Khrystyna Demkiv, 2019. "Integral Assessment of Banking Activity Effectiveness and Rating of Ukrainian and Bulgarian Banks," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 70-96.
    • Handle: RePEc:bas:econst:y:2019:i:4:p:70-96
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    References listed on IDEAS

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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