THE BANK`S INCOME: ESSENCE, STRUCTURE AND PECULIARITIES OF FORMATION IN MODERN CONDITIONS

Анотація

The nature of banking activity is to interact closely with the market structure through capital flows in the financial market. The bank’s performance is reflected through specific financial indicators, among which the bank’s income is essential, which is the basis for calculating the financial result. In the current conditions of banking and business in Ukraine, the role and importance of stable formation of the bank’s income is growing to ensure reproducibility in its activities and obtaining the indicatively planned profit level. The paper aims to deepen the theoretical and methodological foundations and practical recommendations regarding forming banks’ income in Ukraine. According to the purpose of the study, the following tasks were set: to summarise the theoretical, organisational and regulatory framework of the process of bank income generation; to analyse the current process of income generation in the banking system of Ukraine; on a micro level, to evaluate the financial of JSC Sense Bank as an example of a nationalised bank to outline the main areas of improvement for the formation of bank income in the context of force majeure circumstances. Methodology of the study is based on general research methods of generalisation, scientific abstraction, analysis, and synthesis; statistical and comparative analysis, grouping and systematisation; method of statistical comparisons; graphic and tabular methods - for visual display of financial and economic indicators of banks and display of the results of the conducted research. Results of the analytical review of the structure of the assets, liabilities and financial results of Ukraine`s banking system in 2020-2024 have shown that despite significant challenges, the Ukrainian banking system has proved to be one of the most resilient components of the national economy, demonstrating rapid adaptation to the crisis. However, it is worth emphasising the significant share of the public sector in the banking system, over 50%, and the predominance of transactions with government bonds in the total volume of bank transactions. This study has identified the advantages and disadvantages of the current situation in the Ukrainian banking market. The influence of external business conditions and force majeure circumstances on the bank`s ability to generate income is shown in the example of the real bank, which underwent a profound transformation during the analysed period. Practical implications. A comparative analysis of the sources of bank income under force majeure circumstances will help improve a flexible policy of adaptation to the changing conditions of the banking market. Value/originality. A generalised assessment of the advantages and disadvantages of shifting the emphasis towards government bond transactions in the total volume of banking operations could help to overcome the pressing issue of concentration and monopoly in the banking market and, hopefully, encourage banks to lend more to the real economy and develop relevant digital services, etc.

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