MODERN APPROACHES TO THE ANALYSIS OF FINANCIAL RESULTS OF THE ACTIVITIES OF THE BANKING INSTITUTION

Abstract

Banking institutions need dynamic and systemic transformations. It is important for banking institutions to timely analyze the financial results of their activities. Sustained financial results are a key element of the success of a banking institution and a guarantee of stable long-term development. Banking institutions need to learn how to quickly overcome downturns, which is a prerequisite for moving towards EU standards. Therefore, the topic of the selected study is relevant. The purpose of the article is to study the main methods for analyzing the financial performance of banking institutions. Also, the essence, role and justified need for timely analysis of the bank's financial results will be determined in the work. The main factors affecting the performance of a banking institution will be identified. Modern economic practice highlights a large number of methods for analyzing the financial performance of the banking institution. They are necessary for determining the efficiency of the bank. To date, there are about 20 different methods that can be used to analyze the financial performance of the bank. In general, all methods can be divided into three groups: methods of coefficients, rating methods and mathematical and statistical methods. The most common and adapted to the conditions of functioning of domestic banking institutions are coefficient methods. But each method of analyzing the financial results of a banking institution has its advantages and disadvantages. Therefore, in order to obtain a more accurate result, it is necessary to use several methods simultaneously, but necessarily, on an equal number of methods from each of the groups. That is what our proposal is about. This is precisely our approach. For example, apply two coefficient methods, two rating methods and two mathematical-statistical methods. Or, three coefficient methods, three rating methods and three mathematical-statistical methods. The application of one method taken from each of the three groups is methodologically insufficient and practically unreliable. The use of methods for analyzing the financial performance of a banking institution in this approach is a prerequisite for ensuring the reliability of the assessment of financial stability of the bank. Depending on which methods each of the groups will be selected for analysis of the bank's financial results, an estimate will be built up, which in turn will give an answer to the effectiveness of its (bank) functioning. Therefore, the use of valuation methods from different groups, and provided they provide a one-way outcome, is a guarantee of the analytical quality and reliability of the assessment of the performance of the banking institution. On the other hand, which methods of evaluation should be chosen so that they reflect the financial reality in their totality, this is the field of further research.