Banking Sector Development: Performance Indicators

The effectiveness of the banking sector is considered in various parameters. Systemically, micro and macro indicators are selected. With the help of macro-indicators, the depth of the market determines the potential for the development of financial and economic systems. For emerging markets in conditions of instability - the volatility of exchange rates, etc. - it is difficult to identify the optimal level. One of the key indicators of banks' efficiency at the micro level is net interest margin. It remains the main element of the profits of banks. Increased inflation risks led to the transition to the regime of inflation targeting and a floating exchange rate. Since 2015, the key rate is gradually declining. The sensitivity of the banks' margin to the rate of the Central Bank is presumably increased. There are fears that there will be an even greater compression of margins in the banking sector and a general decline in efficiency. As part of this study, an attempt was made to assess the impact of interest rate shocks on net interest margins, taking into account the specialization of banks.