The Investigation of the Influence of Fundamental Factors on the Banks’ Market Capitalization

This research is devoted to the study of the influence of external and internal factors on the bank`s market capitalization. At the beginning of the study, the theoretical basis of the concept and types of capitalization was given, then various methods of assessing the value of the Bank's share were considered, among which the leading position is occupied by the Edwards-Bell-Olson (EBO) model. This model was tested on a sample of 14 banks listed on the Moscow Exchange, and the results were compared with the market quotations of shares. The purpose of the research is to determine a set of fundamental factors that can affect the market capitalization of credit institutions. After constructing and analyzing the regressions models, some not significant regressors were excluded. Among the remaining parameters there were factors, which had a positive effect on the value of shares. They include the exchange rate, N1, N2, loan portfolio and additional issue of shares. The following factors have an inverse relationship: the key rate, inflation, the introduction of sanctions, the national rating, the reorganization of the Bank, the level of its overdue loans. After determining the impact of the selected parameters, conclusions and recommendations were given to improve bank`s market capitalization.