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Financial Analytics: Science and Experience
 

Analysis of the operational risk impact on the financial performance of commercial banks

Vol. 9, Iss. 28, JULY 2016

PDF  Article PDF Version

Received: 1 July 2016

Received in revised form: 13 July 2016

Accepted: 20 July 2016

Available online: 29 July 2016

Subject Heading: RISK, ANALYSIS AND EVALUATION

JEL Classification: G21, M49

Pages: 58-71

Pozhidaeva T.A. Voronezh State University, Voronezh, Russian Federation
pozhidaeva_ta@econ.vsu.ru

Shchetinina O.I. PAO Sberbank, Voronezh, Russian Federation
olgashchetinina@gmail.com

Importance The article reveals the modern approaches to the analysis of the impact of operational risk on commercial bank's financial results.
Objectives The paper aims to substantiate such methodological approaches to the analysis and assessment of the impact of operational risk on commercial bank's financial performance.
Methods For the study, we used methods of dynamic, structural, and comparative analyses.
Results We offer methodological approaches to determining the impact of costs related to operational risk on the profit of a commercial bank. Based on the financial statements of a certain bank, we have evaluated the impact of operational risk on the financial results of this bank's activities, and analyzed the current level of this kind of risk of the commercial bank analyzed and its competitors.
Conclusions and Relevance Using the mentioned analysis methods shall allow a comprehensive assessing of the impact of operational risk on commercial bank's financial results; identifying of risk factors, increasingly affecting the final financial result; benchmarking, or comparing of the data of the organization analyzed with the data of the nearest competitors, and developing of appropriate recommendations.

Keywords: operational risk, commercial bank, analysis, financial performance, assessment methods

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