SUCCESSFUL MANAGEMENT OF THE BANK’S CREDIT ACTIVITIES

Анотація

As of today, the banking sector is one of the most risky types of economic activity. This is primarily due to the fact that banking institutions deal with borrowed and attracted funds. Their own funds, in the form of charter capital and reserves, perform protective and regulatory functions. The main task of banks is using the attracted funds as efficiently as possible. Therefore, effective management of bank credit activities will allow for profit generation and avoidance of significant losses of attracted funds. The banking sector constantly encounters new risks, posing new challenges. Among these, for instance, is climate risk. This risk subsequently affects the central bank’s monetary policy and the country’s economic indicators as a whole. Hence, the main purpose of this article is to explore the relationships between effective management of bank credit operations and economic indicators. To achieve this goal, the following tasks have been set: to investigate the main components of credit portfolio management, to consider the relationship between the volume of non-performing loans and certain macroeconomic indicators, and to draw conclusions on improving credit portfolio management in Ukrainian banks. The content of the economic block of the organizational and economic mechanism for managing a bank’s credit portfolio defines a specific field of activity for implementing management decisions that will allow for the most rational organization of credit relations between the bank and borrowers, aimed at maximizing profitability within an acceptable level of credit risk. The relationship between such macroeconomic factors as the unemployment rate, inflation, the refinancing rate and non-performing loans is not significant. It appears that the level of non-performing loans in Ukraine is influenced to a greater extent by microeconomic factors such as high interest rates on loans, which are very high in Ukraine. The practical application of this mechanism for managing a commercial bank’s credit portfolio can provide opportunities to significantly enhance the efficiency of banking institutions and activate the credit process aimed at increasing investments in the real sector of the economy.

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