Экономические науки

Fedotkina O.P., Boriskina J.A., Gribanov A.V.

Mordovian State University named by N.P. Ogarev, Russia

Аppraisal of the financial stability of the systemically important banks in the Republic of Mordovia

Financial stability is an important characteristic of the financial activities of commercial banks in a market economy. At the same time ensuring the sustainability of the commercial bank is one of the most pressing issues in its activities. Bank financial strength has a competitive advantage over other commercial banks, which finds expression in attracting additional resources, dominance of a particular market segment, increase in household deposits as the main source of bank resources and, accordingly, to expand the scope of investments, opportunities to develop new and innovative services.

In modern economic literature, both domestic and foreign, there is no consensus on the content category of ‘stability of the commercial bank’. This can be explained by the fact that it has a complex character, reflecting not only internal but also external factors banking.

From our point of view of sustainability as an economic category should be considered in the sense of equilibrium. Under the financial stability of commercial banks in our research, we mean the ability of a commercial bank to reach equilibrium in the current economic environment and maintain this state for a relatively long period of time under the influence of changing external and internal factors.

It is obvious that the global financial crisis, which has replaced the intensive growth of Russia's economy, high and sustained rates of economic growth, achieved macroeconomic stability, observed in Russia in the last few years have had a major impact not only on the banking sector, but also the country's economy as a whole.

Certainly, for the banking system in 2008 was a serious test, identifying all the hidden problems, among which the most acute is the shortage of bank liquidity, lower equity (capital), a reduction in loan portfolios, reducing confidence in the banks of the population and as a consequence, the outflow deposits. In such critical conditions, one of the priority tasks facing the bank was maintaining stable operation.

In our study, we addressed the issue of maintaining the stability of the banking sector of the Republic of Mordovia. It is reasonable to assume that in a global recession, the most vulnerable point of the banking sector is the financial sustainability of its operations. From this perspective, we have analyzed the financial sustainability of the three systemically important banks in the Republic of Mordovia: "KS Bank", "Active Bank", "Mordovpromstroibank" ("MPSB") for the year 2008.

Assessment of financial stability with our position should not fully rely on the size of the bank. In modern conditions the size of the bank is not the main parameter of financial stability: the effect of "too big to fail", according to which the financial stability of the credit institution is defined by its magnitude, in our study does not show.

Accordingly, as indicators of financial stability in the short term is reasonable to consider the capital adequacy and profitability in the long - the quality of bank assets. Assessment of financial stability of banks in the Republic of Mordovia is based on indicators of financial soundness of commercial banks that were ranked by us, depending on the economic content of such groups as the "capital adequacy", "quality assets", "profitability" and "liquidity".

In the group of "capital adequacy" includes such indicators as capital adequacy ratio, the quality factor of capital and the coefficient of financial leverage.

The sufficient capital ratio is a coefficient defined in order to raiting the obligatory norm H1. In accordance with Instruction 110-I the minimum value of coefficient currently in force totals makes up 10% for banks with volume of internal funds under 180 million rub.

The results of settles have shown that sufficient capital ratio is 11,70% for "KS Bank", 13,60% for "Active Bank" and 0,20% for "MPSB".

So backbone banks Republic of Mordovia keep up this index on in indispesable volume. "MPSB" proves the greatest value of the normative sufficient of ratio.

Asset quality is the next group which was considered in this analysis. There are factor asset quality, coefficient of overdue debts in this group.

Real value of factor asset quality is 79,10% 68,70%, 92% for "KS Bank", "Active Bank", "MPSB" accordingly.

The results point that activity of "MPSB" has the most high volume of risk and activity of "Active Bank" has the most low volume of risk. It is obviously that the most suspended policy of c assists to keep stable volume of financial stability with due regard for risk. One the one hand, a profitableness of banking operation increases in proportion to volume of risk. On the other hand, it is optimum the ratio between accepting risks and profitableness of banking operation for each commercial bank.

Coefficient of overdue debts – is a coefficient which defined as a part of overdue loans in total amount of the loan indebtedness. In accordance with computations this coefficient is 0,34% for "KS Bank", 0,77% for "Active Bank", 0,27% for "MPSB".

It is known that a part of overdue debts is an element of credit risk which is typical for activity of commercial bank. "MPSB" has the least value of overdue arrears and "Active Bank" has the greatest value of this index.

It is obvious that the value of coefficient of overdue debts depends on quality management of credit risk and defines financial stability of bank activity. "MPSB" follows the most effective policy in management of the credit risk which includes some methods. There are multistage appraisal plan of the counterpart, fastening of procedures of an estimation of registration and support of credits, application of a joint principle at decision-making on crediting and the constant control over an advances portfolio at different levels.

Actual value of the reservation on loans ratio for is 1,56% for "KS Bank", 2,51% for "Active Bank" and 1,07% for "MPSB". "Active Bank" has the greatest coefficient of reservation under loans. This tendency is justified because it provides stable positioning in the market of banking services and it is possible to draw a conclusion on necessity of realization of more effective policy of management of the credit risk.

The third group («profitableness») includes some indexes: rate of return on assets, the profitability of the own funds ratio.

Return on equity is defined as the ratio of profit before tax to the average for the corresponding period value of equity. The calculations determine the value of the coefficient of 11, 20% for the “Active Bank”, 12,20% for the “KS Bank”, 7,60% for the “MPSB”. Economic essence of this indicator reflects the effectiveness of the Bank's own resources. Certainly high values of the coefficients of profitability provide a competitive advantage bank and determine its effective functioning of the banking system of the Republic of Mordovia.

In the fourth group of "liquidity" we can distinguish indicators such as the acid-test ratio, current ratio, the coefficient depending on the market of interbank lending.

Acid-test ratio is the ratio determined in the manner prescribed for the calculation of the mandatory norm of H2 and equal to the ratio of highly liquid assets of the bank to the obligations demand. Minimum normative value ratio is 15%. The actual value of this ratio amounted to 36.80%, 120.80%, 68.90% for "KS Bank", "Active Bank", "MPSB" respectively. Note that all the examined banks supported the norm of the instantaneous value of liquidity, not only at its limit, but also provide its excess: "KS Bank in 2,5 times, " Active Bank " 8 times, “MPSB” in 4,5 times.

Current Ratio (mandatory standard H3) minimum normative value ratio is 50%. The actual value of the indicator set at 55.10%, 128.90% and 66.60% for "KS Bank", "Active Bank", "MPSB" respectively. All of the banks support the value of the indicator at a level commensurate with its normative value. While OAO AKB "Active Bank" provides its excess of 2,6 times.

Note that the most advantageous position with the liquidity position is OAO AKB "Active Bank". In many ways this is possible through the effective management of liquidity risk.

Coefficient depending on the market MBC - coefficient, defined as the ratio of the difference attraction and accommodation of interbank loans (deposits) to total loans of the bank. Calculations for this indicator showed that the actual value of this ratio amounted to 6.04% for AKKSB "KS Bank, 2.08% for OAO AKB" Active Bank ", 4,80% for OAO KB MPSB. Standard value of this ratio is set at 15%. Investigated banks withstand the desired value of the indicator, which allows to speak about their independence from the market of interbank lending. In addition, banks are considered an active player in this market, as a rule, in the role of creditors.

This requires improving the quality of service, to develop a convenient access to services, to remain competitive prices. In addition, greater financial stability will contribute to the expansion of the banking transactions using the latest banking technologies and increasing the number of operations and transactions via Internet, enhancing the skills of staff in the field of banking risk management, bank management and marketing.