Scenario modeling of the bank’s market value strategic management

Economic Annals-ХХI: Volume 145, Issue 9-10(2), Pages: 19-23

Citation information:
Kolodiziev, O., & Gontar, D. (2014). Scenario modeling of the bank’s market value strategic management. Economic Annals-XXI, 9-10(2), 19-23. https://ea21journal.world/index.php/ea-v145-05/

Oleg Kolodiziev
D.Sc. (Economics),
Professor,
Head of the Banking Department,
Simon Kuznets Kharkiv National University of Economics
9 Lenin Ave, Kharkiv, 61166, Ukraine
kolodizev107@ukr.net

Darya Gontar
PhD Student,
Simon Kuznets Kharkiv National University of Economics
9 Lenin Ave, Kharkiv, 61166, Ukraine
dashagontar@yandex.ru

Scenario modeling of the bank’s market value strategic management

Abstract. Introduction. A significant part of modern innovative approaches to the financial institutions management is not enough effective in practical application. One of the reasons of this tendency lies in the absence of real instruments for these approaches implementation. Purpose of the study is development of such simulation model of strategic management of bank’s market value, which will take into account all aspects of its activities. This model can be used for scenario modeling of the management decisions consequences for the final result of the bank’s activity – its market value. Results. The authors propose the simulation model of the bank’s market value strategic management process, which can be used for scenario modeling. The proposed model takes into account the key factors of its market value: factors of liquidity, equity, intangible assets, competitiveness, profitability, personnel, business activity. The model allows determining the bank’s market value using discounted cash flow method. The priority scenarios of the bank’s market value strategic management process have been formed by the authors, the implementation of which will allow achieving the greatest increase in market value. Conclusions. The proposed model is applicable both in the stage of decision-making and the stage of decision preparing. The results of scenario modeling can be used for substantiation of the choice of bank’s strategy by developing alternative strategic decisions, the optimal implementing of which should lead to a further increase of bank’s market value.

Keywords: Scenario Modelling; Strategic Management; Bank’s Market Value; Simulation Model; Discounted Cash Flow Method

JEL Classification: C150; G210; G170

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Received 17.09.2014