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Increase of RAROC: How to Determine

Student: Borovykh Iana

Supervisor: Anna Bykova

Faculty: Faculty of Economics, Management, and Business Informatics

Educational Programme: Economics (Bachelor)

Year of Graduation: 2017

In this work, an increase in the RAROC indicator, which characterizes the return on equity adjusted for risk, was investigated. RAROC was invented not so long ago, and PS Sberbank is one of the few banks that uses this indicator. It was necessary to identify what factors will influence its increase. A model, based on the data of PS Sberbank, was analyzed to investigate what factors influence the increase in the RAROC index. In the future, the results of the work can be used by PS Sberbank to assess the indicators that can change the RAROC indicator. It reflects financially stable and unsustainable customers in deciding whether to deal with them by the Bank or not. Key words: RAROC, ROE, ROA, economic capital, income, banking services, PS Sberbank.

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