Banking resilience in wartime: evaluating loan quality, profitability and lending efficiency

Анотація

Introduction. In the context of profound transformations in the economic environment, banks play a decisive role in the functioning of the financial system by ensuring the efficient redistribution of financial resources, providing credit support to economic agents, and managing financial risks. During periods of martial law, the financial stability of systemically important banks, in particular JSC “Oschadbank,” becomes strategically significant for maintaining macroeconomic stability and the country’s financial security. At the same time, banking operations face challenges related to asset quality, primarily due to increased credit risks and the likelihood of borrowers’ default, which highlights the need to improve credit portfolio management tools and enhance transparency in banking operations. Aim. The study aims to provide a comprehensive analysis of the quality, profitability, and efficiency of JSC Oschadbank’s lending activities during 2022-2024. Particular attention is given to the dynamics of non-performing loans (NPLs), compliance with credit risk regulations, and their impact on the bank’s financial stability. The transformation of the credit strategy under conditions of heightened uncertainty, along with the mechanisms for ensuring liquidity, is also examined. Methods. The study employs a set of general scientific methods. The tabular method was used to visually demonstrate changes in the structure of the loan portfolio and the level of non-performing loans (NPLs), while the graphical method was applied to assess the dynamics of profitability and operational efficiency. Methods of abstraction, analogy, and formalization enabled the analysis of credit risk management and compliance with the NBU regulations (N7, N8, N9). Analysis and synthesis methods were applied to evaluate the bank’s financial performance, while logical generalization formed the basis for drawing conclusions and developing recommendations for the development of mortgage and digital lending. Results. The study confirms the strategic importance of the efficiency of JSC “Oschadbank”’s credit activities for the stability of Ukraine’s financial system. During 2022-2024, the bank’s credit portfolio increased by 33,49% while simultaneously improving its quality through a reduction in the NPL ratio to 24,47%. The adequacy of credit loss provisions has been confirmed, and the need to stabilize risk concentration norms has been identified. Priority development areas include the expansion of the “YeOselia” program and the active digitalization of consumer lending, which will contribute to increasing the efficiency of banking operations and strengthening the country’s financial stability.

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