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Journal section "Public finances"

Determinants of the Russian Banking Sector Development as the Drivers of Economic Growth

Voronova N.S., Miroshnichenko O.S., Tarasova A.N.

4 (46), 2016

Voronova N.S., Miroshnichenko O.S., Tarasova A.N. Determinants of the Russian Banking Sector Development as the Drivers of Economic Growth. Economic and Social Changes: Facts, Trends, Forecast, 2016, no. 4 (46), pp. 165-183. DOI: 10.15838/esc.2016.4.46.9

DOI: 10.15838/esc.2016.4.46.9

Abstract   |   Authors   |   References
The paper substantiates the relationship between the situation in the national banking sector and Russia’s economy. Using the data provided by the Bank of Russia [8; 9; 10], Federal State Statistics Service [2], IBM SPSS Statistics software product, the authors have carried out a regression-correlation analysis of the main indicators of the Russian banking sector in 2005–2015 and GDP. It has been found that there is the strongest positive correlation between GDP and aggregate banking risks and also the profit of credit institutions; the correlation between GDP and aggregate financial result of the banking sector is weaker; the return on equity has no significant relationship with major indicators of banking activities, except for a moderate negative relationship with the aggregate value of regulatory capital; the return on equity in the Russian banking sector is affected adversely by subordinated debt in the structure of capital. In a stable economic situation (2005–2007, 2010–2013) the authors point out a correlation between capital and the profit of the banking sector; in a crisis situation (2008–2009, 2014–2015), there is a correlation between capital and the profit of profitable credit institutions alone. A positive correlation has been revealed between the proportion of profit of the reserve fund in the structure of capital and risks undertaken. Taking into consideration the correlations identified, the authors make a forecast model for aggregate profits of Russia’s banking sector

Keywords

banking, profitability, capital adequacy, business cycles, capital portfolio

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