Financial Sustainability of Bank: The Essence and Assessment of Factors of Influence

Abstract

The article is concerned with analyzing theoretical approaches to the essence of the concept of «financial sustainability of bank» and developing practical recommendations for structuring the main factors influencing the financial sustainability of a bank. It is specified that the financial sustainability of the banking system is directly related to the sustainability of each individual bank that constitutes a part of it. It is noted that a significant negative impact on the banking system of our country at the present stage is exerted through events of the ongoing war, inflation, reduction of production, and a decrease in investment activity. Based on the analysis and generalization of existing approaches to determining the essence of the concept of «financial sustainability of bank» using content analysis, the main components of financial sustainability of a bank have been identified, namely: ensuring risk coverage; the bank’s ability to counteract negative external and internal factors; efficiency of use of assets and financial resources; ensuring liquidity, solvency and profitability of the bank. The main factors influencing the financial sustainability of a bank are analyzed. Using system analysis, the article offers a structural model of the hierarchy of factors influencing the financial sustainability of the bank. The results of structuring the factors influencing the financial sustainability of the bank help to choose the right sequence of actions and allow to identify priority problems that require first-order solutions when making managerial decisions on the development and implementation of the bank’s development program.

Keywords

• financial sustainability of bank
• liquidity
• solvency
• quality of assets
• quality of liabilities
• factors of influence.