The Cost Approach to the Evaluation of Competitiveness of Commercial Bank

Y. Ezrokh ()

Journal of Modern Competition, 2014, issue 1, 26-43

Abstract: This article discusses the methodological framework of the cost approach for the assessment of competitiveness of Russian banks. As the active operations of banks generate basic income, evaluation of costs of leveraging resources is an important element of the assessment of the integral competitiveness of the bank. The author presents and validates es the algorithm of calculation procedures. On the basis of current data on the 50 largest banks the author makes approbation assessment of the funding costs, estimating on the basis of their competitiveness. Additionally, a comparison is the cost of resource generation by large and small banks. In this paper we disprove a number of typical misconceptions about the availability of an inverse relationship between the size of the bank’s cost of funding and active operations. Accordingly, the absolute ranking of banks in terms of competitiveness on the basis of this factor seems economically unjustified.

Keywords: competitiveness of the Bank; competitiveness assessment; bank; the bank's costs (search for similar items in EconPapers)
Date: 2014
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