ESTIMATED CHARACTERISTICS OF THE FACTORS INFLUENCING THE FORMATION OF BANK PROFIT IN UKRAINE

Abstract

The article studies the process of formation of profit of commercial banks of Ukraine in the context of changes in the economic, political and social situation. The main factors influencing the profitability of banking activities, particularly the ratio of interest and commission income and expenses, are identified. An analysis of the income and expenses of the banking system of Ukraine for 2016-2023 is carried out, which shows a steady upward trend in profits, except for 2017. It was found that the main drivers of growth were interest and commission income, while administrative expenses and provisioning had a negative impact. The results obtained allow us to conclude that effective management of banking income and expenses is important for ensuring stable profitability. The paper also examines the dynamics and structure of income and expenses of the banking system of Ukraine in 2016-2023. The main sources of banks' profits are identified, in particular interest and commission income, which played a key role in the formation of a positive financial result. The trends in the share of interest and commission income in banks’ total income, as well as the structure of expenses, among which the largest share was interest, administrative and commission expenses, are analysed. It is proved that the excess of interest and commission income over the corresponding expenses contributed to the growth of the banking sector's profitability. The calculation of the correlation between banks' revenues, expenses and profit showed that interest and commission income had the greatest positive impact on profitability. At the same time, general administrative expenses, commission expenses, and other operating expenses had the largest negative impact. In summary, the study confirms that the key factor in the profitability of the Ukrainian banking system was the excess of interest and fee and commission income over the corresponding expenses. At the same time, administrative expenses and provisioning had a significant negative impact on profitability, which was particularly evident during the crisis.