Part 1.
Commercial banks began to emerge in Russia relatively recently, and during this time they have developed rapidly and reflected in their destiny both the outstanding capabilities of the Russian economy and the difficulties and troubles it is accustomed to. Today's banking environment is constantly changing: there are changes in legislation and requirements of the Central Bank of the Russian Federation, the failure to comply with which leads to severe sanctions, while at the same time increasing the demands of the bank's clients. Modern conditions force us to change and improve our approaches to the assessment and analysis of commercial banks' activities. An insufficient study of methods of assessment of the commercial bank's financial condition determines the relevance of this work.
The object of this work is the methods of analysis of the commercial bank's financial condition. The purpose of this work is to determine the meaning and necessity of analysis of banks' activity, to study methods of analysis of financial condition, to reveal problems of analysis on the example of a particular commercial bank's activity.
The purposes of this work have determined its content. In the first chapter of the work the theoretical aspects of analysis of the financial condition of commercial banks are considered, the concept, meaning, and types of analysis are disclosed, the main methods of analysis of financial condition are considered. In the second chapter of the work the analysis of the financial condition of OJSC "Promsvyazbank" is carried out, its brief characteristic is given, the analysis of the financial condition is carried out and the main problems of the analysis are revealed.
1. MODERN BASES AND METHODOLOGY OF ASSESSMENT OF COMMERCIAL BANKS FINANCIAL CONDITION
.1 Concept, meaning, and types of analysis of financial condition
Economic analysis of the commercial bank's activity is a system of special knowledge related to the study of financial and economic results of the bank's activity, identification of factors, trends, and proportions of development of economic processes, substantiation of directions of the bank's development.
The object of analysis is the commercial activity of each separate bank. The subjects of the analysis may include commercial banks, counterparties of the bank, including the Bank of Russia, credit institutions, state tax services, audit firms, local and central authorities, actual and potential clients and correspondents of the bank, as well as other individuals and legal entities.
Each of the entities in the process of analysis pursues its objectives. As a result, the areas and criteria for analysis may vary.
Commercial banks, based on the analysis of their activities, seek to optimize their active and passive operations to maximize profits. Assessment of available possibilities of the bank allows us to provide their balance with market demands, to choose the basic programs of development and behavior of the bank in the market, to create an adequate basis for decision-making. The analysis of these possibilities is carried out from research of external and internal conditions of bank activity. The external conditions in which the bank operates are determined by the direction of the economic policy of the state, as well as the controlling role of the Bank of Russia. The analysis of the internal conditions of the bank's activity is based on the assessment of its financial and economic position, behavior in the market, levels of technical equipment, as well as on the analysis of the bank's organizational structure.
Territorial institutions of the Bank of Russia in the process of analysis determine the degree of compliance of commercial banks with the established economic norms of liquidity and payments to centralized backgrounds. The Bank of Russia is primarily interested in the state of stability of the banking system, the analysis of which allows us to determine the main directions of monetary policy and state regulation of commercial banks. Banking regulation presupposes the formation and application of special rules and instructions on the implementation of banking activities, including control over their compliance. At the same time, inspection of the financial condition of commercial banks ensures compliance with the instructions of the Bank of Russia and assesses their financial stability.
The State Tax Service in the process of analyzing the reports of commercial banks carries out financial control over the performance of banks' obligations to the budget.
Auditors of banks are faced with the task of verifying the reliability of accounting and reporting of the bank. As well as confirmation or denial of the results of their activities.
Banking clients and correspondents determine the stability of the bank's financial position, its reliability, development prospects, and expediency of further relations with it based on the analysis of reports.
The main functions of the analysis are:
- Formation and choice of expedient ways of development;
- Identification and study of objectively developed regularities and development trends, assessment of their significance and compliance with the goals of the bank's activity, consideration of the consequences of these trends;
- ?Adequate response to changes in the external environment, including the means of identification of alternative development, allowing to achieve the highest economic effect at acceptable risks and the least expenses at various variants of the bank's development as a whole, its separate subdivisions, technologies used, capital investments in the organization of activities;
- Identification of clients' needs in certain types of banking products.
The main tasks of the analysis are as follows:
- Orientation in a market environment;
- .Assessment of bank risks;
- Identification of internal reserves.
There are many types of economic analysis of enterprises (banks), which can be systematized by different criteria.
According to the periodicity of the balance sheet analysis can be classified as follows: daily, weekly, monthly, quarterly, semi-annual, annual, etc.
Depending on the spectrum of the studied issues, the analysis of banks is distinguished by complete and thematic (operational, financial results, criterion) analysis. Both types of analysis are carried out based on compliance with the principle of comprehensiveness. However, if all the aspects of a commercial bank's operation, i.e. both its external and internal connections, are studied in the course of a full analysis, a narrow range of issues is considered in the course of thematic analysis.
For an adequate assessment of the bank's activity, it is necessary to carry out a full analysis of the bank.
According to the purpose and nature of the research, there is a distinction between preliminary, control and operational, final and prognostic analysis.
The preliminary analysis is applied at an estimation of a condition of accounts for revealing possibilities of realization by commercial banks of any operations.
Control and operational analysis is used in the course of the current work of the bank to assess compliance with liquidity ratios and other indicators and to take urgent measures to ensure their implementation, as well as to obtain sufficient profit.
The final analysis is used to determine the efficiency of commercial banks' activities over the period under review and to identify reserves for increasing profitability.
Forecast analysis is performed for forecasting expected results in the forthcoming period and determination of further direction of the monetary policy. The type of forecast analysis is futures, extrapolation, interpolation, variant, conjuncture, experimental.
The most frequently used in banking practice is the variant analysis, which compares normative and several assumed actual indicators. Variant analysis is used for control over indicators, search for signs of the appearance of current and prospective problems, determination of each person's responsibility for the bank's activity, assistance in making managerial decisions, provision of better interaction within the bank itself.
Interpolative and extrapolative are based on two types of forecasting: interpolation and extrapolation, which imply finding the missing indicator inside or outside the existing series of dynamics.
Depending on the statistical methods used, a distinction is made between correlation, regression, factor, dispersion, cluster, animation, approximation, etc.
Depending on the object of the study, the analysis of the balance of a commercial bank is divided into functional, structural, operational-value and economic.
To be continued the next part.