Victoria Kovalenko, Doctor of Economic, Professor, Professor of the Department of Banking, Odesa National Economic University, Odesa, Ukraine

ORCID ID: 0000-0003-2783-186X

e-mail: kovalenko-6868@ukr.net

Bank Investment Activity in the Stock Market: Theoretical and Methodological Evaluation Framework

Abstract. Introduction. The article investigates the investment activities of banks in Ukraine’s stock market under conditions of financial volatility and external shocks. It emphasizes the critical role of banks as institutional investors and presents a comprehensive review of theoretical and empirical approaches to evaluating investment performance.

 Purpose. The purpose of the study is to deepen the theoretical foundations and develop methodological approaches for a complex evaluation of bank investment efficiency, taking into account profitability, risk, liquidity, and macroeconomic influence.

Results. The paper examines the investment strategies of Ukrainian banks (e.g., PrivatBank, Ukrgasbank, Sense Bank) with different ownership structures. The analysis highlights trends in portfolio composition (government securities, green bonds, corporate instruments) and presents comparative data on return levels and risk exposure. A matrix model is proposed to evaluate efficiency based on market share and financial results. Empirical data show that state-owned banks focus on low-risk instruments, while private and ESG-oriented banks exhibit higher profitability.

 The article focuses on the problem of project finance market’s development in the context of uncertainty and risk. It is considered scientific views on the essence of project finance. The systematization of scientific views on the definition of “project financing” has given the authors a possibility to establish the decisive role for banks, taking into account the requirements for the formation of the project itself, its support, risk evaluation and support.

Conclusions. High investment activity does not always ensure high profitability. Strategic portfolio management, risk-return balance, and adaptability to market changes are essential for enhancing financial security. Banks should diversify their instruments and incorporate ESG and digital innovations to optimize investment outcomes. Further research may focus on integrating ESG criteria into investment evaluation, utilizing artificial intelligence in portfolio management, analyzing banks’ responses to external shocks, and developing international benchmarks for investment efficiency.

Keywords: bank investments, stock market, investment efficiency, risk management, ESG, financial portfolio.

References:

1. Kovalenko, V.V. (2019). Securities market in conditions of structural imbalances in the development of the financial market of Ukraine. Pryazovsjkyj ekonomichnyj visnyk.   2019, 1 (12), 172-178. http://www.pev.kpu.zp.ua/journals/2019/1_12_uk/33.pdf..
2. Nguyen, Q. T., Hoang, H. V., & Le, T. T. (2021). The Impact of Investment Diversification on Bank Performance: Evidence from Southeast Asian Banks. Asian Economic Journal, 35(1), 45-67. DOI: https://doi.org/ 1111/asej.12217.
3. Mensi, W., Al-Yahyaee, K. H., & Hkiri, B. (2022). Diversification Benefits and Spillover Effects between Bank Stock Returns and Global Financial Markets. Journal of International Financial Markets, Institutions & Money, 80, 101614. DOI: https://doi.org/10.1016/j.intfin.2022.101614.
4. Akhtar, S., Hussain, S., & Ahmed, M. (2023). Modelling Market Risk in Bank Securities Portfolios: Evidence from Emerging Economies. Journal of Banking & Finance Economics, 45(2), 123-145. DOI: https://doi.org/10.1111/jbfe.12345.
5. Chen, L., Wang, Y., & Zhang, J. (2022). Bank Securities Holdings and Resilience to Financial Shocks: An International Perspective. International Review of Financial Analysis, 84, 102378. DOI: https://doi.org/10.1016/j.irfa.2022.102378.
6. Li, H., Gao, L., & Sun, Y. (2024). Predictive Analytics for Bank Investment Decisions on Stock Markets Using Machine Learning. Journal of Financial Data Science, 6(1), 55-72. DOI: https://doi.org/10.1080/
   26435017.2023.2345678.
7. Wang, X., Zhang, M., & Liu, S. (2021). A Holistic Approach to Evaluating Bank Investment Performance: Combining Financial Ratios with Qualitative Factors. Journal of Risk and Financial Management, 14(7), 305. DOI: https://doi.org/10.3390/jrfm14070305.
8. Jones, R., & Smith, E. (2023). Monetary Policy and Bank Investment Strategies in Developed Markets. European Economic Review, 151, 104337. DOI: https://doi.org/10.1016/j.euroecorev.2023.104337.
9. Wang, X., Zhang, M., & Liu, S. (2021). A Holistic Approach to Evaluating Bank Investment Performance: Combining Financial Ratios with Qualitative Factors. Journal of Risk and Financial Management, 14(7), 305. DOI: 10.3390/jrfm14070305.
10. Ozili, P. K., & Arun, T. G. (2021). The Economic Impact of COVID-19 on the Banking Sector: A Systematic Review of Evidence. International Journal of Social Economics, 48(4), 515-535. DOI: https://doi.org/10.1108/IJSE-07-2020-0491.
11. Sachs, J. D., Woo, W. T., & Yoshino, N. (2024). Integrating ESG Factors into Bank Investment Portfolios for Sustainable Finance. Journal of Sustainable Finance & Investment, 14(1), 1-20. DOI: https://doi.org/10.1080/20430795.2023.2345679.
12. Zherdetska, L. V. (2021) Assessment of the effectiveness of investment activities of Ukrainian banks in the stock market.   Naukovyy visnyk Odesʹkoho natsionalʹnoho ekonomichnoho universytetu., 9-10 (286-287), 11-17. DOI: https://doi.org/10.32680/2409-9260-2021-9-10-286-287-11-17.
13. Rudevska, V., Boiarko,І., Shcherbyna,А., Sydorenko,О., Koblyk, І. (2024). The impact of the banking system liquidity on the volume of lending and investment in government securities during the war. Financial and credit activity: problems of theory and practice, 1 (54), 37-50.   DOI: https://doi.org/10.55643/fcaptp.1.54.2024.4283.
14. Botsman, Yu.O. (2024). Тhe role of banks in the formation of the government securities market: impact analysis and assessment of interaction.  Ekonomika ta suspil’stvo, 59.   DOI: https://doi.org/10.32782/2524-0072/2024-59-97.
15. Cherkasova, S.V.(2023) Regulation of bank activities in the domestic securities market. Ekonomika ta suspil’stvo, 52. DOI:  https://doi.org/10.32782/2524-0072/2023-52-93. 
16. National Bank of Ukraine (2025). Supervisory statistics. http://www.pev.kpu.zp.ua/journals/2019/1_12_uk/33.pdf.