Development of Methodology for Analysing Financial Sustainability of Russian Banks

This study focuses on the analysis of the financial state of the Russian banking sector. The premise of this research is that the currently used methodology for assessing financial conditions of Russian commercial banks used by the Central Bank of Russia is inefficient in detecting potential threats to the company’s financial stability. The main objective of this study is to develop an alternative methodology for analyzing financial state of a commercial bank. I will use accounting information to analyze bank’s financial results, dynamic changes of its financial state and to develop a methodology for assessing the quality of its assets and capital. I expect that developed model will be more exquisite in describing the financial state of a commercial bank due to the implication of various indicators representing the unique nature of banks as the main financial intermediaries as well as by taking a closer look into the underlying reasons of instability.