1. Introduction.

Until recently, there was no analysis of banking activities in the Russian Federation, as there was no need for this. At present, when commercial banks become more independent, such analysis is necessary, and this analysis should be carried out by each bank independently. This analysis allows management to think through the most beneficial credit policy and take a number of other decisions to ensure the profitability of the bank.

It should be noted that in countries with developed market relations, information is usually published annually by the Chamber of Commerce, industry associations or the government, which discloses the normative values of profitability indicators. Comparison of its indicators with their permissible values allows us to conclude on the state of the financial situation of the enterprise. In Russia, this practice is not yet available, so the only basis for comparison is information on the magnitude of indicators in previous years. [1]

2. Materials and methods.

For a more detailed and more descriptive analysis, let’s look at the activities of Sberbank of Russia, which holds leading positions in the ratings of Russian banks for almost all indicators, however, according to the profitability of capital, the result of OJSC Sberbank of Russia is slightly behind other banks and is only on the 145th place To March 2016) [2].

Now we will make a rating of the well-known commercial banks of Russia on profitability of the capital [2]. Imagine it in the form of table 1.

Table 1

Rating of commercial banks in Russia by return on equity

Thus, the leading position is occupied by CB «Transnational Bank» LLC with a return on capital of 58.98%, according to the rating agency AK & M, this financial institution belongs to a class of borrowers with a high degree of creditworthiness. The risk of late fulfillment of obligations is low, the probability of debt restructuring or its part is minimal. During the validity period, the assigned rating level is likely to remain. And the factors that support the rating assessment of the bank are:

— growth of capital and assets;

— high profitability of activities,

— high value of liquidity standards.

Not always a decline in the profitability of capital heralds failure. The indicator of profitability of capital should be considered in the dynamics with the indicators of past years, as well as with the level of the profitability index of capital of other organizations in the related industry [3].

Having examined the data of Table 1, it can be noted that Sberbank is the seventh in terms of indicators. If you take countries such as the United States and Britain, the average return on capital is about 10-12%. For the Russian inflation economy, this indicator should be higher, therefore, the return on equity of Sberbank of Russia, equal to 20.24%, is quite acceptable. The reasons why the bank’s return on capital may be reduced is a decrease in the volume of services, an increase in costs and an increase in assets. Reduction in the volume of services can be caused by a decline in demand for services and even poor management performance. To provide the bank with a sufficiently high return on capital, one must strive to maximize profits.

For a more complete and detailed analysis, consider the rating of the most reliable banks, presented in Table 2.

Table 2

Rating of the most reliable banks for 2016

According to Table 2, it can be noted that the leader in this rating is ZAO Citibank, much attention is paid to servicing individuals in the field of lending. [4]

However, Sberbank notes that the tense situation in Ukraine and the imposition of economic sanctions could further adversely affect macroeconomic indicators in the banking sector of the Russian Federation.

The largest state-owned banks of the Russian Federation and organizations, including OJSC Sberbank of Russia, were out of the West’s capital markets, which were blocked by EU and US sanctions imposed on the Russian Federation for their policy towards Ukraine. The value of money in the domestic market increased following the increase in the Central Bank’s rates amid financial instability and inflationary risks.

In all markets, except for the CIS markets, margin decrease is more than one percentage point.

The report of the Savings Bank of the Russian Federation for the current year says that, on the main market for the bank, a decrease in the margin will also be accompanied by a significant decrease in asset growth rates, which will lead to an intensification of competition and an increase in the influence on the current indicators of the banking system of the accumulated assets that were previously accumulated.

But not all organizations are striving to improve the profitability of capital. There are strategies in which organizations or other financial institutions seek to reduce this figure, but at the same time to double their assets. This happens in cases when the world economy ceases to be stable, the behavior of clients changes, which leads to a slow growth of the banking sector.

An example of this is the new development strategy for 2014-2018, which was presented by Sberbank of Russia. By 2019, the bank intends to double, the resulting profit and assets. Sberbank intends to sell more products to customers and increase the share of operations that can be remotely performed. For five years, the number of products sold to one customer should grow by about 1.5 times. [4]

3. Results and Discussion

Banks are a very important component of the economy and money economy of any country, their activities are inextricably linked with the needs of reproduction. Banks are the founders of the market mechanism, thanks to which the country’s economy functions. Commercial banks regulate the movement of all cash flows, including credit, contribute to ensuring the most beneficial use of the financial resources of society and the flow of capital into those sectors of the economy of the country where the return on investment will be maximum.

Unfortunately, banking activities are subject to risks that need to be identified, assessed and eliminated at the time, if possible. Underestimation of risks can cause bankruptcy of the bank, which, in turn, will cause damage to its customers and shareholders. In our time, banks are trying to seriously approach this issue.

Thus, we can conclude that the profitability ratio shows the profitability of the bank’s operations. The high value of the indicator indicates the effective use of the bank’s assets, but at the same time may reflect the high riskiness of operations. If the return on equity grows, then profit grows, borrowed capital, and if it falls, then the turnover of assets falls.