BANKING CREDIT ACTIVITIES: CURRENT SITUATION AND PROSPECTS

Abstract

Abstract. Crediting activities of banking institutions is a complex multi-component process involving various opera-tions and practical actions aimed at the formation of credit services, which differ in terms, requirements, mechanism of provision and repayment. Optimization and consistency of all stages of the credit process is the basis of effective crediting activities of banks.
The credit market of Ukraine has a tendency to decrease the number of banking institutions: their number has decreased more than twice. At the same time, the total assets of working banks increased and, accordingly, the crediting processes of economic entities and individuals accelerated - by 14.5% and 9.8%, respectively. The total credit portfolio of domestic banks increased by 11.2%. But for the recovery and development of the Ukrainian economy, the scale of bank lending remains extremely insufficient.
The credit activity ratio in 2019 gained the highest value for the analyzed period, characterizing the credit strategy of the country's banks as aggressive, aimed at profit. But such a strategy is also associated with increasing the risk of lending.
Recently, there has been an increasing interest of banking institutions in lending to the credit market - that is, the volume of consumer lending is increasing. For banks themselves, credit services to households remain the most profitable segment - such loans have a high interest margin, and their short-term nature allows to accelerate the turnover of the loan portfolio. In addition, consumer loans are widely available and are characterized by a simplified registration procedure, with relatively low risk for lenders.
The average cost of loans remains high, which prevents business entities from attracting additional financial resources. In addition, the size of the market rate of interest does not fully reflect the real value of the borrowing facili-ties. Significant components of the cost of the loan are the amount of periodic fees charged by the bank for related services.
Disturbing the imbalance due to the orientation of the banking business to quick profit generation justifies the need for close cooperation between banking institutions and the state. At the state level, it is necessary to create conditions for economic growth - a favorable investment climate in the country, programs for supporting priority areas of economicactivity, improving the well-being of the population and ensuring political stability.