The Role of Financial Forecasting in the Formation of Optimal Loan Portfolios of Ukrainian Banks

The variability of social, economic and military factors over time reduces the efficiency of the banking institution. In this regard, managing the bank's loan portfolio, as the primary source of bank profits, should be carried out using progressive approaches to forecasting. The article aims to assess the possibilities of using theoretical and methodical principles of financial forecasting to ensure the effective functioning of banks in Ukraine and the formation of their optimal loan portfolios. The article analyzes the world's experience in developing and modernizing financial forecasting methods and models and identifies factors that contributed to this. It was found that using financial forecasting tools to establish effective lending activities in banks has its specifics. The external and internal environment factors that affect the quantitative and qualitative indicators of loan portfolios of domestic banks were systematized. As tools for optimizing loan portfolios, banks can use various models and methods of financial forecasting, the implementation of which is facilitated by modern technologies such as artificial intelligence and big data. In addition, the formation of a high-quality loan portfolio is impossible without a rational credit policy, which will regulate the organization of the bank's lending activities based on the balancing of four indicators: lending volumes, profitability, liquidity and portfolio risks. The paper assesses the potential impact of changes in Ukraine's macroeconomic indicators on the activities of banks in 2025-2027. The study results indicate that the beginning of hostilities in February 2022 led to an economic shock and created significant pressure on the banking system. The greatest threat to the normal functioning of the banking system is posed by military and political factors, as well as the high level of unemployment in the country. Steps were outlined to restore the economy of Ukraine, which should be based on strategically verified state policy that will promote structural reforms and macroeconomic stability.

Authors

Publication Details

Journal
Oblik i finansi
Published
2025-01-01
DOI
https://doi.org/10.33146/2307-9878-2025-1(107)-40-48
Primary Topic
Economic Issues in Ukraine
Type
article
Field-Weighted Citation Impact
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article

The Role of Financial Forecasting in the Formation of Optimal Loan Portfolios of Ukrainian Banks

Kostiantyn Zatvornytskyi
Oblik i finansi
Economic Issues in Ukraine
article

The Role of Financial Forecasting in the Formation of Optimal Loan Portfolios of Ukrainian Banks

Kostiantyn Zatvornytskyi
article en

Abstract

The variability of social, economic and military factors over time reduces the efficiency of the banking institution. In this regard, managing the bank's loan portfolio, as the primary source of bank profits, should be carried out using progressive approaches to forecasting. The article aims to assess the possibilities of using theoretical and methodical principles of financial forecasting to ensure the effective functioning of banks in Ukraine and the formation of their optimal loan portfolios. The article analyzes the world's experience in developing and modernizing financial forecasting methods and models and identifies factors that contributed to this. It was found that using financial forecasting tools to establish effective lending activities in banks has its specifics. The external and internal environment factors that affect the quantitative and qualitative indicators of loan portfolios of domestic banks were systematized. As tools for optimizing loan portfolios, banks can use various models and methods of financial forecasting, the implementation of which is facilitated by modern technologies such as artificial intelligence and big data. In addition, the formation of a high-quality loan portfolio is impossible without a rational credit policy, which will regulate the organization of the bank's lending activities based on the balancing of four indicators: lending volumes, profitability, liquidity and portfolio risks. The paper assesses the potential impact of changes in Ukraine's macroeconomic indicators on the activities of banks in 2025-2027. The study results indicate that the beginning of hostilities in February 2022 led to an economic shock and created significant pressure on the banking system. The greatest threat to the normal functioning of the banking system is posed by military and political factors, as well as the high level of unemployment in the country. Steps were outlined to restore the economy of Ukraine, which should be based on strategically verified state policy that will promote structural reforms and macroeconomic stability.

Oblik i finansi(1(107))
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Economic Issues in Ukraine
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