METHODOLOGICAL APPROACH TO EVALUATION OF EFFICIENCY OF STATE DEVELOPMENT BANKS
Abstract
State-owned banks must carry out the mission of mitigating (neutralizing) market failures in order to promote economic development (for example, by providing loans to socially significant investment projects that do not receive private financing). Such behavior will usually impair the quality of DBR assets and reduce profitability. One of the main reasons for the low financial and economic efficiency of the DBR is the concentration of such institutions in the weakest industries, segments of borrowers and backward regions, which commercial banks refuse (or limit). An analysis of the above indicators allows us to conclude that banks have achieved the ultimate goal of improving economic and financial stability in the country, despite the fact that the 2020 pandemic has led to negative GDP growth in almost all countries except China. Establishment and control of financial and non-financial targets for the heads of state-owned banks should take place at the state level, in accordance with the state development strategy. It is expedient to assess state development banks by three components of measured indicators of economic, financial and social development, which correspond to the strategy and mission of institutions of this type. Such an assessment should directly affect the assessment of the performance of bank management. Public banks tend to hold more sovereign debt than private banks, especially in developing countries. The result is an expected high correlation between the default of the sovereign and the default of state-owned banks. Correlation analysis showed that there is a weak negative correlation between the dynamics of GDP and assets of DBR (-0.10616) and GDP and loan portfolios of DBR (0.31646). However, there is considerable differentiation between countries: in Poland a slight economic downturn is accompanied by a significant increase in assets and loans of DBR, in Spain zero GDP growth with falling assets and loan portfolio, in Slovakia and Croatia GDP growth and declining bank assets, and most significant loans are demonstrated by the DBR of the Czech Republic and Hungary.
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