Subject The article addresses the operating efficiency of credit institutions. Objectives The study aims to consider the effect of credit policy focused on loans to individuals on bank performance indicators. Methods To perform the analysis, we selected 50 credit institutions with the highest figure of total assets as of the end of 2013, and distinguished a group of retail banks (focusing their credit policy on loans to individuals) and a group of universal banks (having a relatively balanced proportion of loans to legal entities and individuals). We defined a set of indicators characterizing the bank operating efficiency, and compared the indicators calculated for these two groups to assess the influence of the dynamics of loans to individuals on bank performance indicators. Results The findings show that the total loan portfolio yield (inclusive of loan loss provision) of universal banks is lower than that retail banks. Universal banks demonstrated better ratios of operating expense to loan portfolio, and the sum of operating and interest expenses to loan portfolio. We selected the return on equity and return on assets as resulting indicators of performance. Conclusions The retail model of banking business proves to be more efficient in terms of credit institution's profit maximization. However, this study does not cover the issue of the stability of the retail banking model, which requires special consideration.
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