OPTIMIZATION OF THE LOAN PORTFOLIO OF A COMMERCIAL BANK THROUGH INDUSTRY DIVERSIFICATION

The article is devoted to the optimization of the loan portfolio of a commercial bank through the use of industry diversification. The optimization of the loan portfolio means the formation of its structure according to such parameters as: the industry of creditors, the timing, lending rates and the level of risk. The analysis of financial and economic relations on the formation of the composition and structure of the loan portfolio of a commercial bank was carried out. Approaches developed in domestic and foreign economic literature to the definition of the concept of “bank loan portfolio” are considered. It is noted that in these definitions the bank’s loan portfolio is most often considered from the point of view of its structure and doesn’t take into account the presence of the bank’s credit risk when forming the loan portfolio, and also doesn’t take into account the fact that modern commercial banks operate in conditions of fierce competition in the banking services market. The article justifies the need to consider the influence of macroeconomic parameters on the level of credit risk of a commercial bank when forming its loan portfolio. The article concluded that in the conditions of increased competition in financial markets, reduced margins, increased requirements for capital adequacy and risk management, a properly constructed industry diversification of the bank’s loan portfolio will have a positive impact on reducing credit risk and increasing the profitability of active bank operations. As part of the diversification of the loan portfolio by sectors of the economy, the following stages of optimization of the commercial bank’s loan portfolio through sectoral diversification are proposed: stage 1 — analysis and assessment of sectors of the economy; stage 2 — analysis and assessment of typical risks of sectors of the economy; stage 3 — correlating potential and typical risks of economic sectors. When conducting the analysis at each of the presented stages, it is recommended to take into account the indicators of the following time periods: indicators of previous years, current indicators, development trends (planning and forecasting indicators).

commercial bank, credit, credit policy of a commercial bank, loan portfolio of a commercial bank, management of a loan portfolio of a bank, optimal loan portfolio, credit risk, diversification, industry diversification, sectoral diversification of a loan portfolio of a commercial bank, stages of optimization of a bank’s loan portfolio.

Tatarinova L. V., Kravchenko A. E. Optimization of the loan portfolio of a commercial bank through industry diversification. Business. Education. Law, 2021, no. 1, pp. 119—124. DOI: 10.25683/VOLBI.2021.54.108.