Volkova Nelia, PhD in Economics, Associate Professor, Associate Professor of the Department of Finance and Banking, Vasyl’ Stus Donetsk National University, Vinnytsia, Ukraine

ORCID ID: 0000-0003-3790-3636
e-mail: n.volkova@donnu.edu.ua

Yanishevskyi B., student, Vasyl’ Stus Donetsk National University, Vinnytsia, Ukraine

ORCID ID: 0009-0008-9251-1356
e-mail: ianishevskyi.b@donnu.edu.ua

Bank’s competitive strategy: factor determination and ways to adapt to market changes

Abstract. Introduction. Amidst financial instability and escalating rivalry within the financial industry, crafting a successful competitive strategy is essential for banks to sustain stability and ensure their long-term survival. Ukrainian banks are operating in a fickle landscape, influenced by inflationary pressures, currency depreciation, fluctuating interest rates, and unequal availability of financial resources. These factors necessitate examining how macroeconomic forces affect bank performance and strategic decisions.

Purpose. This research aims to develop a framework for enhancing the competitive strategy of banks by examining critical external variables and intrinsic structural features. Specifically, the study examines the impact of macroeconomic indices on bank profitability and identifies strategic instruments to enhance flexibility and robustness.

Results. An analysis of data collected from 2015 to 2024 reveals a significant correlation between macroeconomic indicators such as GDP, inflation, interest rates, exchange rates, and unemployment rates, and return on assets (ROA) in the banking sector. A comprehensive macroeconomic index was developed to reflect the overall suitability of the financial environment for banks. The research illustrates a sharp decline in profitability during times of crisis, followed by recovery during more stable economic periods. Analysis of market concentration using the Herfindahl–Hirschman Index (HHI) reveals moderate concentration, with government-owned banks controlling over 60% of the market. Based on these findings, the researchers suggested a strategic model integrating digital technologies, versatile product design, scenario planning, and KPI-driven internal control systems.

Conclusions. The investigation confirms that macroeconomic instability significantly affects the competitiveness of banks operating in Ukraine. Strategic adaptability, bolstered by enhanced analytical capabilities, digitalization, and strategic partnerships, is essential for sustaining financial performance and maintaining a market presence amid uncertainty.

Keywords: competitive strategy of the bank; macroeconomic factors; return on assets; market concentration; strategic management; banking sector; adaptability.

References:

1. Baranovskyi, O. I. (2008). Rozvytok bankivsjkoji systemy Ukrajiny. Instytut ekonomiky ta proghnozuvannja.
2. Blank, I. O. (2009). Finansova strateghija pidpryjemstva. KNTEU.
3. Epifanov, A. O. (2007). Metodologhichni skladovi efektyvnogho rozvytku bankivsjkogho sektoru ekonomiky Ukrajiny. Universytetsjka knygha.
4. Arefiev, S. & Voynilovich, A. (2020, May). Formation of a differential competitive strategy of the enterprise. V All-Ukrainian Scientific Internet Conference «Educational and Innovative Interactive Platform «Student Entrepreneurial Initiatives»», Kyiv National University of Technology and Design, Kyiv, Ukraine. https://er.knutd.edu.ua/bitstream/123456789/17528/1/OIIP2020_P014-016.pdf.
5. Drucker, P. (2015). Praktyka menedzhmentu. Print2print.
6. Ansoff, I. (2018). Implanting strategic management (3rd ed.). Springer.
7. Porter, M. (2019). Konkurentna perevagha. Jak dosjaghaty stabiljno vysokykh rezuljtativ. Nash Format.
8. Porter, M. (2020). Konkurentna strateghija. Tekhniky analizu ghaluzej i konkurentiv. Nash Format.
9. Ackoff, R. (1981). Creating the corporate future: plan or be planned for. John Wiley and Sons Ltd.
10. Hamel, G. & Prahalad. C. K. (1996). Competing for the future. Harvard Business Review Press.
11. OECD Publishing. (2025, January 23). Mapping Ukraine’s Financial Markets and Corporate Governance Framework for a Sustainable Recovery. https://www.oecd.org/en/publications/mapping-ukraine-s-financial-markets-and-corporate-governance-framework-for-a-sustainable-recovery_866c5c44-en.html.
12. Minfin Index (2025, April 19). Gross Domestic Product (GDP) in Ukraine. https://index.minfin.com.ua/ua/economy/gdp/.
13. State Statistics Service of Ukraine. (2025). Consumer price indices for goods and services. https://www.ukrstat.gov.ua/operativ/operativ2010/ct/is_c/arh_isc/arh_iscgr10_u.html.
14. Kalenska V. P. (2023). Analysis of the main macroeconomic indicators of Ukraine during the war in 2022. Scientific Notes of Lviv University of Business and Law. Economic Series. Legal Series, 36, pp. 116-122. DOI: http://dx.doi.org/10.5281/zenodo.7702001.
15. National Bank of Ukraine (2025). Supervisory statistics. https://bank.gov.ua/ua/statistic/supervision-statist.
16. National Bank of Ukraine. (2025). NBU Key Policy Rate. https://bank.gov.ua/ua/monetary/archive-rish.
17. National Bank of Ukraine. (2025). Official hrivnya exchange rates. https://bank.gov.ua/en/markets/exchangerate-chart?cn%5b%5d=USD&startDate=01.01.2020&endDate=01.01.2025.
18. Minfin Index (2022, March 25). Unemployment rate in Ukraine. https://index.minfin.com.ua/ua/labour/unemploy/2020/.
19. Tchaikovsky, E. (2024). Factors influencing the financial stability of banks in Ukraine. Economic analysis, 34(2), 141-157.
20. Ivanova, K. (2025, February 21). Top 10 banks with the highest profits in 2024: ranking. Glavkom. https://glavcom.ua/economics/finances/top-10-bankiv-jaki-otrimali-najbilshe-pributkiv-u-2024-rotsi-rejtinh-1046071.html.
21. Titarenko, V. (2024). Adaptive methods for assessing market concentration. Scientific notes of Lviv University of Business and Law, 41, 507-512.
22. Didenko, I. V. & Efimenko, A. Yu. (2023). Assessment of the integral indicator of macroeconomic stability. Economics and Law, 1, 84-92. http://jnas.nbuv.gov.ua/article/UJRN-0001405634.