Optimization of Bank Lending in the Context of Modern Realities and Prospects of Financial Market Development

Abstract

Optimization of credit activity is the key to stable development, expansion of the customer base, and growth of profits of banking institutions. Therefore, the priority of ensuring the financial stability of a modern bank should be the formation and effective implementation of credit policy. The purpose of the article is to study the features of banking lending and substantiate scientific and practical recommendations for its improvement, taking into account modern realities and prospects for financial market development. We set a task to determine the main directions of bank lending optimization. For this purpose, the analysis of modern tendencies of credit activity of banks is carried out, problems in the sphere of formation and realization of their credit policy are revealed. Suggestions for strengthening the efficiency of the bank with bad debts are provided. Methodological approaches to the formation of a mechanism for managing problem loans of the bank with the justification of management methods and criteria for their selection, which can be used in the management of credit risks of the bank. The methods of improving the efficiency of the bank’s loan portfolio management substantiated in the article have value for improving its quality and increasing the profitability of credit operations. The proposed fundamental aspects of the formation of the bank’s credit strategy with the identification of its main objectives, priorities, factors, and sequence of specific actions are appropriate for use by banks in building an effective credit policy and increase the profitability of credit operations.