Bondarenko S.A.National Research University – Higher School of Economics, Moscow, Russian Federation stacon777@mail.ru ORCID id: not available
Subject The article analyzes the formation and substantiation of optimal debt load of a credit and financial institution under various methods considering the specifics of banking operations in the financial market. Objectives The aim is to scrutinize the specificity of debt load calculation by a credit institution, review methods of debt load optimization on the PAO VTB case, give recommendations on streamlining the methodology for optimal debt burden calculation to maximize the value of the institution. Methods We test basic methods for evaluation of optimal debt capacity of a credit and financial institution, like weighted average cost of capital, capital asset valuation, EBIT volatility, and the adjusted present value (APV) method. Results The findings enable to take into account the specifics of bank's operating activities, limit the number of methodological approaches to determining the optimal debt capacity of the credit institution. Conclusions The choice of capital structure may have a signal effect on market players: an increase in the loan capacity indicates a potential for profitability growth and big cash flows generation; an increase in equity implies current problems with regulatory requirements for capital adequacy ratio calculation and bank management attempts to reduce the cost of financial difficulties. The optimal level of debt burden can be used by managing credit and financial organizations to make more flexible decisions in the financial market (policy of payments to owners, implementation of investment projects with numerous internal risks, decisions about reorganization, mergers and acquisitions).
Keywords: optimal capital structure, financial and credit institution, debt load, financial leverage
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