Bank business modeling and levels of non-performing loans:Perspectives of international risk factors in Ukraine

Abstract

This article identifies five different banking business models using the k-means method and demonstrates how banks carried out the migration between defined clusters during the banking crisis. The article identifies and links the banks with the business model they are most exposed to in terms of risk of insolvency. The factors that influence the rate of non-performing loans are defined. Developed econometric models will allow banks with certain business models to improve their activity with non-performing loans. The article also analyzes how the amount of loans to related parties can be injected into the amount of non-performing loans.

Keywords

• bank business model
• cluster analysis
• non-preforming loans
• balances dollarization
• credit to affiliated person